[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] 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)

ELS Co., Ltd. (Law Firm Sejong, Attorneys Kim Yong-dam et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2011Na50754 decided January 19, 2012

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. 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 its meaning is not clearly expressed 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 so as to conform to the ideology of social justice and equity 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. (see, e.g., Supreme Court Decision 2010Da10291, May 26, 2011).

2. According to the reasoning of the lower judgment, the lower court determined that (i) the Defendant’s implementation of telephone connection music service (hereinafter “instant service”) from December 2002, based on the following facts: (ii) the Plaintiff and the Defendant, from January 2009, paid the royalty in accordance with Article 25 of the Copyright Collection Regulations (amended by February 28, 2008; hereinafter “instant Collection Regulations”) to the extent that the Plaintiff did not reach an agreement on whether the additional service fee is included in the scope of sales under Article 25 of the Collection Regulations (hereinafter “the instant agreement”); (iii) the instant collection regulations, which apply to the instant agreement, provide information and communications service under the name of telephone from December 1, 2002 to the extent of sales revenue of the instant service; and (ii) provide information and communications service, including the Plaintiff’s revenue and sales revenue from the instant website (hereinafter “the instant service charge”) to the extent of sales revenue from the instant service site, including the Plaintiff’s revenue and sales revenue from the instant service site (hereinafter “the instant service charge”).

3. However, it is difficult to accept such a determination by the lower court for the following reasons.

A. The reasoning of the lower judgment and the record reveal the following.

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 for the call connection 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 service charges 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 sound source stored in the phone is transmitted automatically through the communication network used at the time of voice call. Of these series of processes, the act of using the musical work by the "transmission" under the Copyright Act is completed by posting the sound source processed by the CP, etc. on the website operated by the CP, and the act of transmitting the recorded sound source to the sender from the post-hand source storage facility is merely a mere mechanical and communication providing 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 telecommunications network. Around 2002, the mobile network operator, which was a key telecommunications business operator subject to authorization of the terms and conditions of use, applied for the submission of evidentiary materials, such as direct and indirect expenses, expected number of subscribers, expected revenues, etc. to provide the relevant service, and imposed additional service charges by deeming the service that delivers a telephone connection from the information and communications department as the telecommunications service, and separately, if the content is used, such as the sound source processed by the CP, etc., the terms and conditions of use have been authorized to additionally impose additional service charges on the instant service, such as the mobile network operator, and reported the terms and conditions of use to separately impose information service charges on the use of the content. For that reason, even if the mobile phone operator subscribed to the instant service and fails to use the content separately processed by the CP, the mobile phone operator is obliged to pay additional service charges to the Defendant by the mobile phone operator without the stored user.

④ Prior to the conclusion of the instant agreement, the Plaintiff permitted the Plaintiff to provide the Plaintiff’s management work with the wireless Internet services, etc., and the CP permitted the Plaintiff to supply the Plaintiff’s management work as a file to the mobile carrier and transmit it to the Plaintiff’s file. The Plaintiff, upon entering into a musical work use contract, deemed the Defendant’s musical work as a person using the Defendant’s copyrighted musical work as “transmission” method. The “sales definition” under the Copyright Fee Collection Regulation (amended by July 14, 2006) applied at the time, did not differ from the sales definition of the instant case. However, the Plaintiff did not receive the Defendant’s supplementary service user fee under the name of copyright, and did not demand it.

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

C. Nevertheless, the lower court, based on its reasoning, determined that the “sales” defined in the definition of sales in this case includes the Defendant’s additional service charges 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 ground of appeal assigning

4. 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 Chang-suk (Presiding Justice)