Central to the conflict between Blizzard and KeSPA are the intellectual property rights to StarCraft and its upcoming sequel. KeSPA operates tournaments without licensing the game, which is used to generate revenue. Blizzard would like to be paid a fee as another party is profiting off of if its IP.
Blizzard had previously attempted to run its own tournaments through GOMTV invitational tournaments, but KeSPA blocked this by forbidding players from competing in any Blizzard events and being a member of KeSPA. This shut down Blizzard's sanctioned tournaments.
Blizzard CEO Mike Morhaime summed up the issue in the interview:
We've tried to talk to KeSPA for three years, but we can't get them to recognize our IP rights. Of course we think our IP rights should be respected. Starcraft II will be released soon, so we will have to look for a new partner.
KeSPA was also recently implicated in match-fixing and corruption allegations. Top players were accused of throwing matches while conspiring with gambling groups to profit. Since the initial story, new information has suggested that KeSPA was aware that some wrongdoing was occurring.
This opens the door for a new partnership for StarCraft II and could potentially end professional StarCraft in Korea as we know it if Blizzard's IP must be respected. It is clear that KeSPA does not want to license StarCraft and believes it can run tournaments without Blizzard.