[1] The method of interpreting a juristic act in a case where the objective meaning is not clearly revealed by the party’s language and text

[2] In a case where: (a) the Korea Music Copyright Association and Company A paid user fees in accordance with the method of calculation stipulated in the Copyright Collection Regulations with respect to the call connection music service provided by Company A, a mobile network operator; and (b) whether additional service user fees are included in the scope of sales, which is the standard for calculating transmission user fees, the case holding that the additional service user fees that Company A received in return for telecommunications services,

[1] Interpretation of a juristic act is clearly binding upon the objective meaning given by the parties to the act of representation. In a case where the objective meaning is not clearly revealed by the parties’ language and text, it shall be reasonably interpreted in accordance with logical and empirical rules and the common sense of social norms and transaction norms, by comprehensively examining the contents of the language and text, the motive and background leading up to the juristic act, the purpose and genuine intent to be achieved by the parties through the juristic act, the transaction practices, etc.

[2] In a case where: (a) the Korea Music Copyright Association and Company A paid user fees in accordance with the copyright royalty collection method as to the telephone connection music service provided by Company A, which is a mobile network operator; and (b) whether additional service user fees are included in the scope of sales, which is the basis for calculating transmission user fees, the case held that the court below erred in the misapprehension of legal principles as to the sales revenue of telecommunications service, regardless of the act of transmission, should be interpreted as "the sales amount" in the above collection provision, and "the service site" in the definition of the above sales amount, "the content provider ("CP")" and "the revenue of the service user fee, etc. from the above service" means only the revenue of the information service fee received by the CP, etc. in return for the transmission of sound sources; and (c) it is reasonable to interpret "advertisement and other revenue" as "the sales amount generated from the website, etc." in the above collection provision.

[1] Article 105 of the Civil Act / [2] Article 105 of the Civil Act, Article 2 subparag. 10 of the Copyright Act, Article 105(5) of the Copyright Act

[1] Supreme Court Decision 2010Da10291 Decided May 26, 2011 (Gong2011Ha, 1285)

Korea Music Copyright Association (Attorney Yu Won-soo et al., Counsel for the plaintiff-appellant)

KS Telecom Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Ko Hyun-chul et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na24663 decided October 26, 2011

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the fourth ground for appeal

Even if the specific and direct judgment on the matters alleged by the parties is not indicated in the judgment, if it is possible to find out that the assertion was cited or rejected in light of the overall purport of the reasons for the judgment, it cannot be said to be omitted (see Supreme Court Decision 2011Da104253, Mar. 29, 2012, etc.).

The reasoning of the judgment of the court below does not indicate a specific and direct judgment as to whether the lawsuit in this case is not permitted since it would form a judgment of the court. However, considering the adopted evidence, the court below acknowledged the following facts: (a) since January 2009, the Plaintiff and the Defendant paid the royalty in accordance with the method of calculating copyright usage fee under Article 25 of the Copyright Fee Collection Regulation (amended by February 28, 2008; hereinafter “Collection Regulation”) as stated in the judgment of the court; (b) on the grounds that there was no agreement as to whether the scope of sales under Article 25 of the Collection Regulation of this case includes additional service usage fee (hereinafter “instant agreement”); and (c) further, on the scope of sales under Article 25 of the Collection Regulation of this case, the court below determined whether the additional service usage fee is included in the scope of sales under Article 25 of the Collection Regulation of this case. Examining the reasoning of the judgment of the court below, it can be found that there was no error in the misapprehension of the judgment of the court below or the grounds for appeal.

2. As to the grounds of appeal Nos. 1 and 2

A. Interpretation of a juristic act is clearly confirming the objective meaning given by the party to an act of representation. In a case where the objective meaning is not clearly revealed by the party’s language and text, it shall be reasonably interpreted in accordance with logical and empirical rules and the common sense of social norms and transaction norms, by comprehensively taking into account the contents of the language and text, the motive and background leading up to the juristic act, the purpose and genuine intent to be achieved by the party through the juristic act, transaction practices, etc. (see, e.g., Supreme Court Decision 2010Da10291, May 26, 2011).

B. According to the reasoning of the lower judgment, the lower court comprehensively based on the adopted evidence, determined that ① the Defendant’s implementation of telephone connection music service (hereinafter “instant service”) from March 2002 under the name of “Local Monitoring”, ② Article 25 of the instant collection provision, which applies to the instant agreement, includes the following: “The amount of sales 】 9% 】 the rate of additional music management; and Article 23 subparag. 2) includes the sum of the amount of sales generated from the relevant service site, including advertising and other revenues (excluding value-added tax) and the amount of sales generated from the relevant service site, which reflects the ratio of sales generated from the relevant service site to the amount of sales generated from the relevant service site. Article 25 of the instant collection provision, which applies to the instant agreement, provides information service charges to the Plaintiff (hereinafter “the Plaintiff and the Association”) at the expense of KRW 10,000, including the definitions of the instant service charges.

C. However, the lower court’s determination is difficult to accept for the following reasons.

(1) Review of the reasoning of the lower judgment and the record reveals the following circumstances.

① The royalty under Article 25 of the Collection Clause provides for copyright royalty to be paid when a person who has obtained permission to use a musical work from the Plaintiff directly uses the musical work by means of “transmission” under the Copyright Act. Therefore, even if the other party to the instant agreement, if the Defendant had a person using the musical work by means of “transmission” due to reuse permission, etc. from the Defendant, in principle, the user fee should be calculated based on his sales, and the user fee should not be calculated based on the Defendant’s sales. In addition, the term “transmission” under the Copyright Act refers to providing a work, etc. to allow access to the copyrighted work at the time and place of individual choice of the members of the public, including transmission made therefrom (Article 2 subparag. 10 of the Copyright Act). Therefore, the determination should be made mainly by whether the person who used the copyrighted work by means of “transmission” is the person who provided the musical work to the public with access.

② The call connection sound is first processed as a sound source in the length and form that can be used as a telephone connecting sound by a content provider ("CP"). The processed sound source is set up on the website operated by the CP, etc., and sold upon receiving information usage fees from mobile telephone subscribers. The sold sound source was stored in the sound source storage server managed by the Defendant. If the sender calls for a telephone, the recorded sound source was transmitted automatically through the communication network used at the time of voice call. Of these acts, the act of posting the sound source processed by the CP, etc. on the website operated by him/her is merely providing “the use of the musical work to the public.” As such, the act of using the musical work is completed by means of “transmission” under the Copyright Act, and the act of delivering the recorded sound source to the sender of the recorded sound source after such act is merely a mere act of delivering and managing information to the Defendant.

(3) In order for a mobile network operator to deliver a telephone connection, it is essential to use a sound source storage server, subscriber information management server, and communications network. A key telecommunications business operator subject to the authorization of the terms and conditions of use around 2002, the Defendant, which was a mobile network operator subject to the authorization of the terms and conditions of use, applies for appending and applying for basic data, such as direct and indirect expenses, expected number of subscribers, expected revenues, etc. to provide the relevant service, and imposes additional service charges on the instant service, deeming the instant service that delivers a telephone connection from the information and communications department as telecommunications services, and separately, if the content is used, such as the sound source, etc. processed by the CP, etc., the terms and conditions of use are authorized to impose additional service charges on the Defendant. For this reason, even if a mobile network operator subscribed to the instant service only and fails to use the content, such as the sound source, etc. separately processed by the CP, is delivered to the sender by means of a

④ Prior to the conclusion of the instant agreement, the Plaintiff concluded a musical work use agreement with the CP, etc. stating that “the CP, etc. allows the Plaintiff to provide the Plaintiff’s management work for the Defendant’s advertising service,” and regarded the CP, etc. as a person who uses the Defendant’s musical work as “transmission” method, and even though the “sales definition” under the Copyright User Fees Collection Regulation (amended by July 14, 2006) applied at the time did not differ from the definition of the instant sales, the Plaintiff did not receive a copyright fee for the Defendant’s supplementary service use fee and did not demand

(2) In full view of the above circumstances, the term “relevant service site” in the definition of the sales amount of this case refers to the “CP website,” and the term “revenue from the usage fees, etc. generated from the relevant service” refers only to the income of information usage fees that the CP, etc. received in return for the transmission of the sound source via a telephone connection,” and it is reasonable to interpret the term “advertisement and other income” as “advertisement and other income generated from the CP, etc. website. Therefore, the additional service usage fees that the Defendant received in return for the communications service regardless of the act of transmission shall be interpreted not to be included in the “sales” in the definition of the sales

D. Nevertheless, the lower court, on the grounds indicated in its reasoning, determined that “sales” under the definition of sales in this case includes the charges for additional services that the Defendant received in return for telecommunications services. In so doing, it erred by misapprehending the legal doctrine on the interpretation of a legal act, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim So-young (Presiding Justice)