Korea In-Store Music Copyright Law: Korean Copyright Law Basics

The Korean Supreme Court ruled that if a store plays music provided by a streaming music service, the act of playing that music constitutes Korean copyright infringement. Under the Copyright Act of Korea, “records for sale” do not constitute copyright infringement of performance rights because the copyright holder’s performance rights are limited by law, but music provided by store music service providers for stores does not constitute “records for sale” according to a recent ruling by the Korean Supreme Court.

South Korean In-Store Music Copyright Law

Under the copyright law of Korea, a “record for sale” is a work for which the copyright holder has paid a fee when purchasing the music, and if no additional money is received from the audience or spectators using the recording, the copyright holder’s performance rights are limited and no additional compensation needs to be paid to the copyright owner.

The key issue in this case was whether music provided by a music service provider is considered a “record for sale.”

Korean Supreme Court on Copyright Law of In-Store Played Music

1. The case was brought by the Korea Music Copyright Association (KOMCA) against a Lotte division that operates Lotteria and Angel-in-us Coffee. The Korea Music Copyright Association is a South Korean non-profit copyright collective. 
2. The Lotte stores were playing music provided by store music service providers. KOMCA claimed that the copyright holder’s performance rights were violated and demanded compensation of approximately KRW 800 million.
3. The first trial and the appellate court ruled against KOMCA, noting, in part, that the music provided by the store music service provider is akin to “records for sale,” so the performance rights are limited under the Copyright Act of Korea, and no separate performance fee needs to be paid to KOMCA.
4. The Supreme Court of Korea overturned the original judgments and ruled in favor of KOMCA, noting that the store music service provider was not providing a record for sale.

Supreme Court Decision

The Supreme Court of Korea explained that a “record for sale” is a record produced to be sold commercially, and whether the music provided to store operators by a store music service provider is a “record for sale” should be determined based on the time at which the music was stored on the server of the store music service provider.

The Supreme Court ruled that “when the store music service provider stored the music in question on its server, the album was fixed for the purpose of providing store music services and not for commercial sale, so it does not qualify as a ‘record for sale.’ The original court deemed the audio file played in the defendant’s store to be a copy of an audio file produced for sale on the market and thus constituted a ‘record for sale,’ and therefore did not accept the plaintiff’s claim for damages and return of unjust enrichment due to the infringement of the plaintiff’s performing rights. . . The original court’s decision is in error based on a misunderstanding of the legal doctrine regarding ‘records for sale. ’”

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services and IPG Legal is consistently rated a top-tier law firm in corporate law, litigation, franchise law, estate law, family law, employment & labor law, and criminal defense law.

To schedule a call with Sean Hayes, please Schedule a Call Here.