2.Case on Imposing Obligation on Online Service Providers to Disable Unauthorized Transmitting of Original Works

[23-1(A) KCCR 53, 2009Hun-Ba13·52·110(consolidated), February 24, 2011]

The Constitutional Court unanimously held Article 104(1) of the Copyright Act (hereinafter, the "Instant Provision I") and Article 142(1) and (2) of the Copyright Act(hereinafter, the "Instant Provision II") constitutional and also, in a 7-2 decision, held Article 104(2) ofthe Copyright Act (hereinafter, the "Instant Provision III") constitutional.The Instant Provision I sets forth a provision imposing an obligation on online service providers of special type (hereinafter, "OSP of special type") to take necessary measures including technical measures disabling unlawful transmission of original works upon the right holder's request. An OSP who violates the obligation under Instant Provision I is to be punishable by a fine under Instance Provision II. Pursuant to Instant Provision III, the Minister of Culture, Sports and Tourism may decide and announce a notification defining OSPs of special type which should be subject to such obligation. The Court found that these provisions neither violated the rule against blanket statutory delegation nor infringed on freedom in job performance in violation of the rule against excessive restriction.

Background of the Case

Administrative penalty of fines were imposed on petitioners for not taking any necessary measures including technical ones to disable unauthorized transmission of original works. Complainants, as OSPs, who operate Internet websites using "peer to peer" or "P2P" filesharing computer programs to provide audio and video file-downloadingservice, were deemed to be OSPs of special type recognized under Article 104 of the Copyright Act. Complainants filed a notice of appeal with the court and, during the proceeding, moved the court to file a request to the Constitutional Court for constitutional review on statutes of Instant Provisions I, II and III. Upon dismissal, the complainants filed this constitutional complaint.

Provisions at Issue

The Copyright Act (amended by Act No. 8101 on December 28, 2006 but prior to amendment by Act No. 9625 on April 22, 2009)

Article 104 (Responsibility of Online Service Providers of Special Type)

1.Online service providers whose main purpose is to enable people to transmit original works among them by using computers (hereinafter "online service providers of special type") shall take necessary measures such as technological measures to disable illegal interactive transmission of original works upon request of the right holders. Insuch cases, matters related to the request of rights holders and necessarymeasures shall be set forth by Presidential Decree.

Article 142 (Fine for Negligence)

1.A person who has failed to take necessary measures pursuant toArticle 104(1) shall be punished by a fine for negligence not exceeding30 million won. A person who failed to carry out obligations under Article 106 or to perform the order of the Minister of Culture, Sports and Tourism under Article 133(4) shall be punished by a fine for negligence not exceeding 10 million won.

2.A fine for negligence pursuant to paragraph 1 shall be imposed and collected by the Minister of Culture, Sports and Tourism as prescribed by Presidential Decree.

The Copyright Act (amended by Act No. 8852 on February 29, 2008)

Article 104 (Responsibility of Online Service Providers of Special Type)

2.The Minister of Culture, Sports and Tourism may decide and announce the extent of online service provider of special type pursuant to the provisions of paragraph 1.

Summary of Decision

The Constitutional Court unanimously held Instant Provision I and Instant Provision II constitutional and also, in a 7-2 decision, held Instant Provision III constitutional. The Court reasoned as follows:

1. Court Opinion

(1)Due to the subject nature regulated by the laws in this case, a concrete and descriptive wording of the statute defining "OSPs ofspecial type" which take certain responsibility for disabling unauthorizedtransmission of original works is inevitably difficult, and a professional and empirical analysis is required in legislation. We, therefore, recognize that it is necessary to delegate to the Ministry of Culture, Sports and Tourism the power of announcing notifications defining OSPs of special type. In addition, the part of the "right holder'srequest" to a OSP of special type and the part of "necessary measures"including technical measures that disable unlawful transmission of original works also respectively need to be regulated flexibly by legislative delegation to lower-level rules considering the nature of the original work itself, the features of online copyright infringement in reality and the phase of technology development. Instant Provisions I and III do not violate the principle of rule against blanket statutory delegation in that the contents of the text to be promulgated in the notification made by the Minister of Culture, Sports and Tourism and President Ordinance as to the scope of OSPs of special type, right holder's request, and necessary measures are sufficiently foreseeable when we examine the purpose of legislation of the Copyright Act, policies in enactment of the Instant Provisions, and related regulations.

(2)Through disabling unauthorized transmission of original works, the instant provisions aim to protect copyrights and to improve culture and develop related industries. The provisions amount to be proper means to achieve those goals pursued. Furthermore, there can be no alternative means to achieve the same legislative goals while less intrusive than the instant provisions, thus not violating the rule of the least restrictive means due to reasons as follows: Instant Provisions I and III require certain OSPs to take measures disabling unauthorized transmission of original works only upon the right holders' request; technologically impracticable measures are not required to be taken; and online copyright infringements have been prevalent so far. Provisions at issue, also, properly balance interests involved in that, while imposing limited responsibility to take technical measures on

designated OSPs cannot be deemed a significant interference on thefreedom of occupation, public interest in preventing harmful consequencesof unlawful transmission of original works for the sake of improving and developing culture and related industries is grave. Therefore, Instant Provisions I, II and III do not infringe upon the complainants' freedom of occupation.

(3)Treating OSPs of special type differently from the other OSPs on the ground that services provided by the former is, in its nature, more likely to be used for unauthorized transmission than services provided by the latter, appears to have reasonable justifications not to constitute an unlawful discrimination.

(4)By not allowing OSPs of special type, which acknowledge that unlawful transmission can be easily generated due to the nature of their services, to facilitate unlawful transmission, Instant Provisions I, II and III articulate and specify the principle that a person should take accountability for his/her own behavior and are not incompatible with that principle.

2.Dissenting Opinion (Concerning Unconstitutionality of Instant Provision III)

Article 104(2) of the Copyright Act allows the Minister of Culture, Sports and Tourism to make regulations with respect to the personwho takes responsibility prescribed in Article 104(1). But our Constitutionhas specific provisions regarding "Bupkyu-Myoungryoung" (hereinafter, "rules and regulations"), which are issued by particular administrative authorities such as the President but have statutory effects regulating people's rights and duties. The provisions stipulate specific types of rules and regulations; particular administrative authorities that have the power to issue them; permissible scope of delegation of that function; and conditions of delegation, etc. Therefore, not only any rules and regulations impermissible under the Constitution cannot be enacted by the legislature, but also matters to be regulated by rules and regulations cannot be delegated to administrative regulations or rules which have no such statutory effect. Thus we conclude that Article

104(2) violates the Constitution in that it directly delegates the power to issue rules regulating peoples' duties to the Minister of Culture, Sports and Tourism in the form of public notice, rather than by rules and regulations as enumerated in the Constitution.