[1] Whether a phonogram producer shall obtain permission for use from the holder of author's property right of the work recorded in the phonogram to reproduce and distribute the phonogram which is an author's work (affirmative)

[2] The method of interpreting the scope of authorization to exploit musical works under an agreement to permit the use of musical works

[3] The case holding that an act of producing and selling edited records by a person who has produced the original half with the permission of use from the author of the musical work does not naturally include the scope of the right of reproduction and distribution of the phonogram producer

[4] Whether to obtain permission to exploit a work from the author of author’s property right in addition to the permission to exploit the work’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s work

[1] The neighboring right of a phonogram producer is a right derived from the act of first fixing sound on the phonogram, which is an independent right independent from the author’s property right on the phonogram such as author’s author’s author’s author’s author’s author’s author’s work, but the reproduction and distribution of a phonogram which is an author’s author’s author’s work entails the use of the work recorded on the phonogram. Thus, the phonogram producer’s own author’s author’s property right cannot reproduce and distribute the phonogram without obtaining permission to use it from the author’s author’s property right.

[2] In interpreting a license agreement entered into between the phonogram producer and the author’s property right, if the scope of the license agreement is not clear, the scope of the license agreement shall be reasonably interpreted in accordance with the generally accepted sense and transaction norms by taking into account all the circumstances, including the motive and circumstance leading up to the conclusion of the license agreement; the purpose to be achieved by the license agreement; transaction practices; the parties’ knowledge, experience and economic status; whether the received benefits maintain balance; whether the method of using the copyrighted musical work was foreseeable at the time the license agreement was granted; whether the parties would have made an agreement different contents if they were aware of the method of using the copyrighted musical work; whether the method of using the copyrighted musical work would substitute the existing music market; or whether the new market was created.

[3] The case holding that, even if the phonogram producer obtained the right of reproduction and distribution of the original half of the musical work by obtaining permission to exploit the musical work from the author of the musical work, the act of producing and selling the compilation phonogram by reproducing the original half of the musical work in question, regardless of the specific scope of the author's permission to exploit the musical work, shall not be included as a matter of course in the scope of the right of reproduction and distribution of the phonogram producer

[4] Unless there are special circumstances such as granting the phonogram producer the right of disposition of the right of reproduction and distribution among the author's property rights to exploit copyrighted works to the phonogram producer, or granting the phonogram producer the right of permission to exploit copyrighted works to the third party other than the original copyrighted works, the person who intends to produce edited records by extracting some of the contents contained in the original copyrighted works produced by the phonogram producer, shall obtain the permission to exploit copyrighted works from the author's property rights in addition to the permission to exploit copyrighted works produced by the phonogram producer.

[1] Article 2 subparag. 7, Articles 42, 62, and 67 of the Copyright Act (amended by Act No. 8101 of Dec. 28, 2006) / [2] Article 42(2) of the Copyright Act (amended by Act No. 8101 of Dec. 28, 2006), Article 105 of the Civil Act / [3] Articles 2 subparag. 7, 42, 62, and 67 of the Copyright Act (amended by Act No. 8101 of Dec. 28, 2006) / [4] Articles 2 subparag. 7, 42, 62, and 67 of the Copyright Act (amended by Act No. 8101 of Dec. 28, 2006)

[1] [2] Supreme Court Decision 2006Da21002 Decided December 22, 2006 (Gong2007Sang, 209) / [4] Supreme Court Decision 2001Da60682 Decided September 24, 2002 (Gong2002Ha, 2514) (Gong2004Da10756 Decided July 13, 2006)

Korea Music Copyright Association (Law Firm Song, Attorneys Cho Yong-ok, Counsel for the plaintiff-appellant)

M Planning Co., Ltd. and one other

Seoul High Court Decision 2005Na7599 delivered on November 8, 2005

Of the part against the plaintiff in the judgment of the court below, the part concerning each musical work listed in the attached table Nos. 1, 2, 4, 5, 12, 31, 34, 38, 39, 40, 42, 43, 49, 56, and 61 of the judgment of the court below regarding the attached table No. 1, 2, 4, 5, 12, 31, 34, 38, 39, 40, 42, 4

1. Judgment on the Plaintiff’s grounds of appeal

A. As to the validity of the license agreement entered into by the author after the trust of author's property right

According to the reasoning of the judgment of the court below, upon citing the reasoning of the judgment of the court of first instance, the court below determined to the effect that each musical work described in 1,2, 4, 5, 12, 31, 34, 38, 39, 40, 42, 43, 49, 56, and 61 (hereinafter “the 15 musical work”) was produced by the Defendants with the author’s permission to exploit each musical work on July 1, 2003 before the Plaintiff’s implementation of the 15 musical work, and that, even if the author’s property right to the musical work was entrusted to the author’s property right to the musical work, if the author’s property right to the musical work was first used to the author’s property right to the musical work in practice, the court below did not collect the author’s property right to the musical work from the third party’s copyright holder and the third party’s copyright holder’s consent to exploit the musical work as a fixed amount of money for the author’s.

In light of the records, the above judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the trust of author's property rights or the interpretation of a trust contract for author's property rights, as otherwise

B. As to the scope of authorization to reproduce and distribute music records producers and to exploit musical works

Article 2 subparag. 7 and Article 67 of the Copyright Act provide that a phonogram producer who first fixed the phonogram shall have the right to reproduce and distribute the phonogram at the same time, and Article 62 of the same Act provides that the provisions on neighboring rights of the phonogram producer, etc. shall not be interpreted as affecting copyright. The neighboring rights of the phonogram producer are rights arising from the act of first fixing sound on the phonogram, which are independent of the author’s property rights on the phonogram such as the author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s author’s property right. Article 42(2) of the Copyright Act provides that if the author’s author’s author’s author’s author’s author’s author’s property right to exploit the phonogram at the time of signing an existing agreement to permit to exploit the phonogram, the author’s author’s property right.

In light of the above legal principles and the records, even if the Defendants were to have the right of reproduction and distribution of the 15 musical works from the authors of “the 15 musical works of this case,” and who had produced the 15 musical works of this case, they did not examine where the 15 musical works were permitted to use the “the 15 musical works of this case,” and solely on the above circumstances, it cannot be readily concluded that the Defendants’ act of reproducing the 15 musical works of “the 15 musical works of this case,” and producing and selling “the 15 musical works of this case,” does not constitute the Plaintiff’s infringement of the author’s property right of the 15 musical works.

Nevertheless, in the event that the Defendants produced the original musical work from the authors of “the 15 musical works of this case” with permission to exploit, the court below held that as a matter of course, regardless of the specific scope of the permission to exploit the 15 musical works, the producers may produce and sell “compied sound records” containing “the 15 musical works of this case” as an exercise of the right to reproduce and distribute the producers, regardless of the specific scope of the permission to exploit. In so determining, the court below erred by misapprehending the legal principles on the right to reproduce and distribute the 15 musical works of this case, by failing to exhaust all necessary deliberations, which affected the conclusion

2. Determination on the grounds of appeal by Defendant Domin Media Co., Ltd.

A. As to the scope of the agreement to permit the use of musical works

Unless there are special circumstances such as granting the producer of author's property rights to the producer of author's property rights the disposal authority of the right of reproduction and distribution among his/her author's property rights to the producer of author's property rights, or granting the producer of author's property rights the right to permit the exploitation of his/her work or the right to permit the exploitation of his/her work to a third party, other than the phonogram which is the author's property rights, any person who intends to produce the compilation phonogram by extracting some of the contents contained in the phonogram which is the author's work produced by the producer of author's property rights, shall obtain the authorization of the use of the work from the author of author's property rights in addition to the permission to exploit the work's work's author's work (see Supreme Court Decisions 201Da60682, Sep. 24, 2002; 2004Da10756, Jul. 4, 2006, etc.).

In light of the above legal principles and records, the court below, citing the reasoning of the judgment of the court of first instance, citing the reasoning of the judgment, produced and sold the musical work excluding “the 15 musical work of this case” among the musical work of the 67 musical work in the [Attachment 15] and the 77 musical work in the [Attachment 15] attached table of the judgment of the court below (hereinafter “the remaining musical work of this case”) with the permission of the author’s use. The author of “the remaining musical work of this case” has transferred the right of reproduction and distribution among the author’s property rights to the music producer, or granted the third party the right of use of the musical work to the third party or the right of use of the musical work without the permission of the plaintiff who is the author’s property right. Thus, the defendants' production and sale of “the Compilation musical work of this case” without the permission of the producer of author’s property rights infringed the plaintiff’s property rights to the remaining musical work of this case, and there is no violation of the rules of evidence as to the plaintiff's grounds for appeal.

B. On revocation of confession and negligence, etc. on infringement of author's property right

In light of the records, the court below, citing the judgment of the court of first instance, recognized that Defendant Dom Media (hereinafter “Defendant Dom Media”) was involved in the planning and production of the “compied phonogram” and “compied Compilation phonogram,” and rejected Defendant Dom Media’s assertion that the confession was revoked on the planning facts of the “compied Compilation phonogram,” on the ground that there is no evidence to acknowledge that the confession was contrary to the truth and due to mistake, and even if Defendant Dom Media did not plan the phonogram jointly with Defendant Dom Media Co., Ltd. (hereinafter “Defendant Dom Media”) and had already produced and distributed the Dom Media, the court below did not err in the misapprehension of the legal principles as to the act of infringement of author’s property right as to the production and distribution of the Dom Media as a specialized manufacturer of the Dom Media, and did not err in the misapprehension of the legal principles as to the act of infringement of author’s property right as alleged in the ground of appeal.

3. The Plaintiff’s appeal on the part of the claim related to “netly Compilation Phonograms” and Defendant M&C’s appeal

A. The Plaintiff did not state the grounds of appeal in the petition of appeal and the appellate brief on the part of the claim related to the “netly Compilation Sound Records” against Defendant Doide Media.

B. Defendant MM planning did not state the grounds of appeal in the petition of appeal, and did not submit the grounds of appeal within the due period of submission of the grounds of appeal.

4. Conclusion

Therefore, the part of the judgment of the court below against the plaintiff regarding "five musical works of this case" shall be reversed, and that part of the case shall be remanded to the court below. The remaining appeals against Defendant Domm Media and the appeals by the defendants shall be dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Young-ran (Presiding Justice)