Ring-S U.S. et al. (Attorneys Shin Tae-gil et al., Counsel for the plaintiff-appellant)

Ging-ri and one other (Law Firm Yang & Yang, Attorney White-si, Counsel for the plaintiff-appellant)

January 5, 2011

1. With respect to the case of “specific performance, attorney’s fees, and attorney’s fees claim” between the Plaintiffs and the Defendants, the Court rendered a judgment as of January 15, 2009 and granting compulsory execution according to the contents of the attached judgment.

2. The costs of lawsuit are assessed against each of the Defendants.

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Facts of recognition;

A. Defendant Ringfree Co., Ltd. (hereinafter “Defendant Company”) is a company that holds a patent right related to the method and equipment to create to ringbackne during the time of telephone or mobile phone communication (hereinafter “instant patent right”). The Plaintiffs are the U.S. companies located in California.

B. On December 7, 2002, Plaintiff Ring Fri U.S. entered into a license agreement with the Defendant Company to use, lease, sublease, and manufacture the instant patent right owned by the Defendant Company in the United States and Canada, and to grant the transferable right to Plaintiff Ring Fri U.S. (hereinafter “instant First Agreement”). The content of the instant First Agreement is as follows.

Article 2-1 The Defendant Company shall grant Plaintiff Ringp U.S. exclusive and transferable rights to use, lease, sublease, manufacture, sell, distribute, sell, subscribe and sell the patent of this case in the United States and Canada.

Article 2-4 The term of this Agreement is two years after the date of entry into force of this Agreement from the date of issuance of the patent application in the United States of America. This Agreement shall be permanently indefinitely extended to the extent that it has succeeded in securing at least one license for the patent rights by Plaintiff Ringp E during the initial term of this Agreement.

Article 2-5: Plaintiff Ringp U.S. agree to pay royalties to the Defendant Company in accordance with the terms and conditions set out in Annex A to this Agreement’s Schedule “heat Rates.” Annex A shall be treated as confidential information, and neither Party shall disclose the content thereof to a third party without written approval of the other Party.

Article 2-6 The Defendant Company shall grant the right to use the route, trade name or copyright of the Defendant Company in the performance of this Agreement to Plaintiff Ringp U.S.A.

Article 14 The Parties shall obey the exclusive jurisdiction of the California District Court, which is amended in California Central District Court or California Luxembourg with respect to any action arising in connection with this contract.

In a lawsuit to enforce this contract, the winning party shall have the right to recover reasonable expenses, including reasonable attorney fees and expenses.

D. On December 9, 2002, Defendant Company, Plaintiff Ring U.S., Defendant 2 (Representative Director of Defendant Company), and Nonparty 1 (Korean name omitted, Plaintiff Ring U.S.’s representative director) concluded a written consent on December 9, 200 (hereinafter “instant contract”) and the terms of the instant contract No. 2 are as follows.

Article 3 A Joint Venture Co., Ltd. (the above Company was established on July 28, 2003 in accordance with the instant contract; hereinafter referred to as “Plaintiff Ringfree International”) with 44.5%, Plaintiff Ring S.A. 40%, Nonparty 2 11%, and Nonparty 1’s share of 4.5%.

Article 4 The Defendant Company shall transfer to and transfer all rights, titles, and interests in the patent of this case in respect of the Plaintiff’s Ringp International person.

Article 6 The directors of Plaintiff Ringp International shall consist of six persons, including Defendant 2, Nonparty 2, Nonparty 1 (English name 1 omitted), Nonparty 6 (English name 2 omitted), Nonparty 7 (English name 3 omitted), and Nonparty 8.

Article X This Agreement shall enter into force on the date of entry into force of this Agreement and during the existence of the Plaintiff’s Ringp personal person, and to the extent that either Party is possessing intellectual property rights in the Republic of Korea, the United States or any other place, each Party agrees to transfer its interest in intellectual property to the Plaintiff’s Ringp personal person.

Article 22 Section 14 of the instant First Contract is the same as Article 14 of the instant Contract.

Article 23 Section 15 of the instant First Contract is the same as Article 15 of the instant Contract.

E. On January 7, 2003, the Defendant Company received USD 1 and other effective compensation from the Plaintiff’s Ringp International (hereinafter “US”) from the Plaintiff’s Ringp International, and drafted and issued a certificate of transfer of the patent right to the said Plaintiff. Meanwhile, Defendant Company’s representative director did not undergo a special resolution of the Defendant Company’s general meeting of shareholders at the time of entering into each of the instant contracts.

F. Since then, the Defendant Company did not transfer the instant patent right to Plaintiff Ringp International, and Nonparty 3 (English name 4 omitted) on February 27, 2003, the Plaintiff and Nonparty 2, who represented by the Defendant Company, did not pay the amount of USD 1,000,000 in return for the transfer of the instant patent right to the Defendant Company under a contract if Plaintiff Ringp Es. paid to the Plaintiffs and Nonparty 2 in return for the transfer of the instant patent right. Defendant 2, who was not fluent in English, did not enter into each of the instant contracts without an interpreter or a lawyer, sent notice to the effect that each of the said contracts is null and void.

G. Accordingly, on March 16, 2005, Plaintiff Ringp International filed a provisional injunction against the Defendant Company with Suwon District Court 2005Kahap312, which was dismissed on August 11, 2005 on the ground that each of the instant contracts were null and void, which was the only asset of Defendant Company, transferred the instant patent without the resolution of the general meeting of shareholders.

H. In addition, Defendant 2, the representative director of Defendant Company, was prosecuted for the crime of occupational breach of trust, etc. on the part of the transfer of patent right of this case without the resolution of the general meeting of shareholders, and was sentenced to a fine of KRW 20,000,000 on May 28, 2004 (Seoul Central District Court 2003Da9020), and was sentenced to a suspended sentence of two years on November 2, 2004 at the appellate court proceeding with both appeals (Seoul Central District Court 2004No2354), and on June 16, 2006, the final judgment became final and conclusive (Supreme Court 2004Do7585).

I. The Plaintiffs filed a lawsuit against the Defendants seeking specific performance under each of the above contracts on the ground of the Defendants’ non-performance of obligation under each of the contracts of this case, including the case numbers (case number omitted), attorney's fees, and attorney's fees, at the California District Court of the United States of California (U.S.).

E. The instant U.S. court tried by jurors from August 19, 2008 to August 22, 2008, and from August 26 to August 28, 2008. On August 28, 2008, jurors conducted a verdict recognizing the Defendants’ nonperformance of their respective contractual obligations.

(k) The Defendants, in the above lawsuit, are invalid in violation of the Commercial Act of the Republic of Korea, provided that the contract of this case requires a special resolution of the general meeting of shareholders at the time of transfer of important assets. ② In the Republic of Korea, each of the contracts of this case was already invalidated, and the decision of dismissal of an application for provisional disposition of patent right prohibition, criminal judgment was rendered. ③ The Plaintiffs agreed to pay the Defendants the transfer contract amount to KRW 200,000,000, the loan amount to KRW 800,000,000, while they received the patent right of this case, but they did not perform their obligations, and ④ Defendant 2, who was not fluent in English, entered into each of the contracts of this case by mistake, did not accept each of the above arguments of the Defendants, and subsequently, the U.S. court accepted the aforementioned arguments and decided that the Defendants jointly and severally accepted the Plaintiffs’ claim for payment of expenses and fees to the Plaintiffs (hereinafter referred to as the “instant decision”).

(l) The Defendants appealed, but the appeal was dismissed, and the judgment of this case became final and conclusive.

[Ground of recognition] Facts without dispute, Gap 1 through 7 evidence, Eul 1 through 9 evidence (including each number in the case of additional number), the purport of the whole pleadings

2. Determination

A. Whether a foreign judgment satisfies the requirements for recognition and enforcement

1) In order for a judgment of a foreign court to be approved and executed in Korea, the requirements stipulated in Article 217 of the Civil Procedure Act, namely, the final judgment of the foreign court, which is ① to recognize the international jurisdiction of the foreign court under the laws and regulations of the Republic of Korea or in principle of international jurisdiction under the laws and regulations of the Republic of Korea (No. 1), ② the defendant who has lost the judgment must comply with the lawsuit even if he/she has not been served with a written complaint or a document corresponding thereto, and a written notice of date or an order, with sufficient time to defend himself/herself according to lawful method (No. 2), ③ to recognize the validity of the judgment does not violate good morals and other social order of the Republic of Korea (No. 3

2) According to this case’s return to the case, and the above facts of recognition, ① the contract of this case provides that each of the contracts of this case is subject to the jurisdiction of the State of California, the State of California, or the State of California, with respect to disputes related to each of the contracts of this case, and the court of this case which rendered the judgment of this case recognized the international jurisdiction of the above case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’

B. Determination of the defendants' assertion

1) On this issue, the Defendants, under Article 374 (1) 1 of the Korean Commercial Act, prescribe that the transfer of essential assets of the company in violation of the provision shall undergo a special resolution of the general meeting of shareholders in the event that the company performs an act of transfer of all or part of its business, and the above provision is null and void. Since Defendant 2, the representative director of the defendant company, did not undergo a special resolution of the general meeting of shareholders in the contract of this case that transfers the patent right of this case, which is the only asset of the defendant company, to the plaintiffs, each of the above contracts is null and void, and since prior to the judgment of this case, the court of the Republic of Korea dismissed the plaintiffs' application for the provisional disposition of prohibition of disposal of the patent right of this case and recognized the defendants 2 guilty of occupational breach of trust, the approval and enforcement of the judgment of

2) In light of the following, the good customs or other social order under Article 217 subparag. 3 of the Civil Procedure Act refers to an international public document separate from a domestic public document under Article 103 of the Civil Act. The above reason does not mean whether the recognition of facts or the application of legal principles issued in a foreign court does not violate good customs or other social order of the Republic of Korea, but it refers to whether approval or enforcement in the Republic of Korea of a foreign judgment granted in relation to a dispute violates good customs or other social order, and in principle, the foreign judgment itself should be examined and determined. The content of the obligation imposed on the party by the foreign judgment itself is against good customs or other social order as well as against good customs or other social order in the formation procedure of the foreign judgment (see Supreme Court Decision 2002Da74213 decided Oct. 28, 2004).

3) On the other hand, Article 374(1)1 of the Commercial Act of the Republic of Korea provides that a special resolution of the general meeting of shareholders shall be required when a company transfers all or some of its business operations. According to the above facts, although Defendant 2, the representative director of the company of the defendant, transferred the patent right of this case to the plaintiffs without a special resolution of the general meeting of shareholders of the defendant company, the transfer of important assets of the company in whole or in part is directly related to the company's property foundation and is able to transfer important assets under the aggravated condition of the special resolution of the general meeting of shareholders for the protection of shareholders because it seriously affects the interests of the shareholders, and it is difficult to interpret that the above transfer of the company's stocks to the non-party 2 without a special resolution of the general meeting of shareholders of the defendant company of this case because it violated the above 0-party 1's legal order and morality, and it is difficult to interpret that the above transfer of the company's stocks to the non-party 1's representative director without a special resolution of shareholders of this case.

3. Conclusion

Therefore, each of the plaintiffs' claims against the defendants is justified, and it is so decided as per Disposition.

[Attachment]

Judges Hak-man (Presiding Judge)

1) Under the United States Contract Law, a specific performance refers to the case where the court grants the benefit itself as promised to the injured party or orders the commitment person who did not fulfill his obligation to pay the benefit itself.

2) Article 3390 and 3391 of the California Civil Act provides that ① the application of legal remedies to the Plaintiff is inappropriate; ② there is a basic contract supported by reasonable and appropriate consideration; ③ there is remedy to both the parties; ④ the court is clear to the extent that the terms and conditions of the contract are necessary for the implementation of certain terms and conditions of the contract; ⑤ the Plaintiff’s proof that the contents of the claim requested by the Plaintiff are substantially similar to those of the contractual obligations may order a specific performance: Provided, That where the other party fails to receive reasonable remuneration under the contract, ② where the other party is fair or reasonable, ③ where the consent of the other party is obtained through a false statement, concealment, evasion, or unfair transaction, or where the consent of the other party is obtained through the other party’s promise, ④ where the other party’s consent is obtained through a mistake, misunderstanding, or an unfair transaction.