Gaming Industry Faces a Series of "September Courtroom Battles"

Disputes Over Put Options, Trade Secret Leaks, and Plagiarism...
Spotlight on Smilegate Asset Division

Major court cases related to the gaming industry are scheduled to take place in September.

Line Games received an investment of 125 billion won from Longo Entertainment (hereafter Longo) in 2018. Longo is a special purpose company established by Anchor Equity Partners, a private equity fund manager, and secured a 27.6% stake in Line Games through this investment. Subsequently, Longo claimed that Jet Intermedia Global (a subsidiary of Line Yahoo), which controls Line Games, violated the non-compete obligation stipulated in the shareholders’ agreement. In 2023, Longo exercised a put option (stock purchase claim) and filed a lawsuit worth 223.5 billion won. The first trial dismissed Longo’s claim. Longo appealed, stating that the court had interpreted the requirements for exercising the put option too strictly. The first appellate hearing (2026Na200507) will be held at the Seoul High Court on September 3.

The trial concerning CEO Choi Juhyun of Ironmace and others, charged with violating the Unfair Competition Prevention Act, is ongoing at the Seongnam Branch of the Suwon District Court (2026Godan237). A hearing is scheduled for September 3. Prosecutors allege that CEO Choi and others took files of Nexon’s unpublished game ‘Project P3’ and used some of them in the development of ‘Dark and Darker.’ While Ironmace acknowledges partial removal of files, they deny any trade secret nature of the materials and any improper intent. In a previous civil case, the Supreme Court upheld the lower court’s ruling, confirming that Ironmace had infringed upon Nexon’s trade secrets.

The Seoul Family Court’s 3rd Civil Division (presiding judge: Chief Judge Jeong Donghyuk) will render a first-instance decision in the divorce lawsuit of Kwon Hyukbin, founder of Smilegate, on September 9. According to a court appraisal, Kwon’s stake in Smilegate Holdings is valued at between 4 trillion and 8 trillion won. It is reported that the spouse, Ms. Lee, claims these shares should be divided equally.

An appeal is also underway regarding the lawsuit brought by convertible bond (CB) investors over the aborted listing of Smilegate RPG (2026Na202326). Although the lawsuit was filed in the name of Mirae Asset Securities, the actual party of interest is Rhinos Asset Management, which invested in the CB. The first trial ruled that Smilegate RPG failed to fulfill its obligation to pursue a listing and ordered it to pay 100 billion won in damages.

Court rulings have also diverged in three copyright infringement lawsuits filed by NC.

In the case related to Webzen’s game ‘R2M,’ both the first trial and the appellate court did not recognize infringement of the ‘Lineage M’ copyright. However, they did acknowledge unfair competition by unauthorized use of NC’s work. The appellate court ordered R2M’s service to be suspended and awarded damages of over 16.9 billion won. Both parties have appealed, and the case is pending before the Supreme Court (2025Da212342).

In a separate lawsuit involving ‘ArcheAge War’ from Kakao Games, NC claimed ‘Lineage 2M’ copyright infringement and violation of the Unfair Competition Prevention Act. After losing both the first and appellate trials, NC has appealed, and the case is under review (2026Da203186).

NC also alleges that Kakao Games’ ‘LOM’ copied its game ‘Lineage W.’ The first trial took place at the Seoul Central District Court. The court found that many of the core elements of the two games were quite different and did not recognize either copyright infringement or unfair competition (2024Gahap49375). NC has appealed.

Lee Sangwoo, reporter at Law Times Korea

※This article is based on content supplied by Law Times.

This content was produced with the assistance of AI translation services.