A bill representing a comprehensive overhaul of the Korean Copyright Act (the “Act”) was proposed to the National Assembly on January 15, 2021.  This bill comes 14 years after the last comprehensive amendment of the Act in 2006, and is intended to respond to advances in technology over the years as well as to promote efficient use and distribution of mass-produced copyrighted works.  The bill, which includes creating new categories of works protected by copyright and providing for punitive damages for copyright infringement, is likely to significantly impact the rights of both users and creators of copyrighted works.

The current Act is largely unchanged since the last comprehensive amendment in 2006.  As advances in technology have made mass distribution and use of copyrighted works commonplace, and as protection of publicity and related rights has become more important, it has become increasingly clear that a new comprehensive amendment to the Act is needed to adjust to the changed copyright environment.

We have summarized some of the more notable proposed changes below.

1.   Reproduction and Transmission for Information Analysis Allowed

A new provision allowing the reproduction and transmission of copyrighted works for the purpose of information analysis has been established (Article 43).  The user may reproduce and transmit a copyrighted work without the copyright owner’s prior consent to the extent necessary to create additional information or value by analyzing large amounts of information (e.g., big data analysis), only if (i) the reproduction or transmission of such work is not intended for the enjoyment of the human thoughts or emotions expressed in the copyrighted work, and (ii) the work has been lawfully accessed.

2.   Protection of “Portrait” Property Rights

The proposed amendment to the Act expressly provides for a “right of publicity” by indicating that “a person who is the object of a portrait, etc. shall have the right to utilize its portrait, etc. for commercial purposes in a manner that can be widely recognized by the general public” (Article 126).  “Portrait, etc.” is further defined as the “name, portrait and voice of the specific person and other traits similar thereto.”  The amendment states that “portrait, etc.” rights are personal and cannot be assigned, attached or offered as security.

3.   Extended Collective Management

The proposed amendment facilitates extended collective management organizations (“CMO”) designated by the Minister of Culture, Sports and Tourism to manage copyright and neighboring rights in specific areas, represent right holders in those areas, and enter into license agreements with general users on behalf of such right holders, regardless of whether they have expressly entrusted their copyrights or neighboring rights with the CMO.  However, a right holder that is not a member of the CMO can still opt out by notifying the CMO, and in this case, users of their copyrighted works will need to obtain their separate consent. 

Under the amendment’s extended CMO scheme, users may use copyrighted works within the scope of the CMO’s authority without facing a risk of liability for infringement.  However, in order to use copyrighted works that are beyond the scope of the CMO’s authority (i.e., those held by a right holder who opts out of being represented by the CMO), users will need to approach the right holder directly to obtain consent. 

4.   Author’s Claim for Additional Remuneration – “Bestseller Right”

The proposed amendment also includes a new provision that offers authors the right to claim additional compensation from the assignee of the copyrighted work beyond what was originally agreed, if a “significant imbalance” occurs between the authors’ compensation and the assignee’s profit from the work (Article 59).  This additional remuneration claim cannot be waived through a contract in advance and can be enforced against the original contracting party (i.e., assignee) as well as third parties to whom the right to use the works have been subsequently assigned. 

5.   Punitive Damages for Intentional Copyright Infringement

Under the proposed amendment, where intentional copyright infringement is found, the court may award the plaintiff compensation of up to three times the amount of calculated damages.  In determining the amount of punitive damages, the court may consider factors such as the infringer’s intent or awareness of the damage likely to be inflicted on the right holder, the extent of such damage to the right holder, and duration and frequency of the infringement. 

Implications

If passed by the National Assembly, the bill will resolve legal uncertainty relating to publicity rights and the distribution of mass-produced copyrighted works, and provide for more substantial compensation to content creators.  Further, given the availability of punitive damages for copyright infringement, it would be prudent for businesses suspected of infringing on copyrights to carefully review and respond to the potential risk of additional civil damages.

As this bill may be partially modified in the course of discussions at the National Assembly, users as well as right holders of copyrighted works need to closely monitor further developments regarding this bill.