Ministry of Culture wins lawsuit against Korea Music Copyright Association

The Ministry of Culture, Sports and Tourism (MCST) won the final victory in the lawsuit seeking cancellation of the penalty surcharge imposed by the Korea Music Copyright Association.

On the 27th, the MCST reported that the Supreme Court's 1st Division (Chief Justice Seo Kyung-hwan) dismissed the appeal related to the lawsuit for cancellation of the penalty surcharge imposed by the Korea Music Copyright Association and confirmed the lower court ruling that the MCST's action was lawful on the 20th.

Earlier, the MCST imposed a penalty surcharge of 144 million won on June 16, 2022, after determining that the Korea Music Copyright Association arbitrarily applied the "music copyright trust ratio" instead of the "music copyright management ratio" specified in the usage fee collection regulations when signing a contract with the Korean Traditional Music Broadcasting. This was deemed to fall under Article 109, Paragraph 1, Subparagraph 2 of the Copyright Act regarding the receipt of royalties other than approved usage fees.

The Korea Music Copyright Association filed an administrative lawsuit on September 8, 2022, in opposition to this. The association argued that the principle of contractual freedom applies to determining the usage rates and amounts of music copyrights, claiming that the MCST's enforcement of the management ratio exceeded the limits of its supervisory authority.

However, all three courts, including the 1st and 2nd trials, sided with the MCST. The second trial court ruled that the MCST's exercise of supervisory authority was a legitimate action considering the monopolistic and public-interest nature of copyright management agents. It concluded that there was no legitimate basis for applying separate standards apart from the management ratio.