Companies strengthen legal teams to better cope with spiraling number of lawsuits


Local gaming companies ― many of them operators of globally best-selling games ― are gearing up to better defend themselves at court in the face of mounting legal squabbles.

On Monday, NCsoft, one of the nation’s top online gaming companies and creator of some of the industry’s hottest games such as Lineage and Guild Wars, said it has appointed a Kim & Chang lawyer as its chief legal officer.

The company has become one of the first in the industry to fill such a position, industry watchers said, predicting that more firms will follow suit.

“The move seems to be addressing the growing concern among the online gaming industry, since as it earns popularity both locally and globally, the more legal issues it inevitably faces,” said Im Sang-hyeok, a lawyer with Shin & Kim.

Since the suits can draw out for long periods of time ― often even longer than the actual popularity of the games themselves ― companies are choosing to have their own legal expert on the team.

“More companies will go this road because it pays to have a lawyer on board, and an experienced one at that, to handle things, especially since when lawsuits happen with overseas parties, it can get very messy and difficult,” Im added.

In-house legal teams getting boost

Currently, gaming companies consult with their in-house legal offices when there are disputes or other legal issues to address.

While firms did not seem to harbor immediate plans to appoint chief legal officers, they said their legal teams were definitely growing to be able to cope with legal disputes that are cropping up at a faster pace.

“We are increasingly seeing the need to strengthen our legal teams because the online gaming industry abounds in legal issues and risks,” said Won Yoon-sik, a spokesman for Hangame.

He added that the role of legal experts and how the companies utilize them are becoming more and more significant because the firms are basically writing legal history.

“What we do now, what kind of legal precedents we set are going to serve as milestones for the future of this industry,” he said.

Hangame, owned by NHN Corp., has half a dozen lawyers at its legal team, and the NHN chief executive was formerly a judge.

The industry’s lower-tier players cannot yet afford to hire lawyers from outside, but many are still conscious of the importance of legal knowledge and expertise, industry watchers said.

Gaming firms plagued by legal squabbles

The biggest reason why the gaming industry is turning to legal experts is because of the mushrooming volume of legal battles they face.

A previous dispute between Blizzard Entertainment local Korean cable television stations over the broadcasting rights for StarCraft games was one of the most conspicuous that overshadowed the industry.

Patent rights are another popular arena of legal squabbles, as seen in the case of Worlds.com filing a licensing suit against NCsoft.

Many of these cases can draw out for years, leaving the gaming companies dealing with the nagging issue until they manage to settle, which is the usual course since it is difficult to prove which party is in the wrong, legal experts pointed out.

In other cases, gamers outside of Korea are now filing lawsuits against local gaming companies for failing to notify them of the danger of getting hooked on video or online games.

“It’s turning like how U.S. consumers started to sue McDonalds for failing to inform them of side-effects, meaning we do understand why this is happening and even the frustration the consumers may feel, but also feel they were adequately warned because it’s so obvious,” said one industry source close to gaming companies who declined to be identified.

Just last month, online game publishing companies Nexon and CJ Entertainment and Media ended a lengthy dispute by agreeing to jointly publish the popular game Sudden Attack starting on July 11.

By Kim Ji-hyun (jemmie@heraldcorp.com)