The act of broadcasting background music in-store through real-time playback of sound sources via the internet using the 'webcasting method' has been deemed a copyright infringement by the Supreme Court. This overturns the judgments of the first and second trials.
The Supreme Court's Civil Division 1 (Chief Justice Noh Tae-ack) stated on the 9th that it overturned the decision of the lower court, which ruled in favor of the defendant, in the lawsuit filed by the Korea Music Copyright Association against Lotteria's parent company, Lotte GRS, for the return of unjust enrichment and damages on Jan. 23.
Lotte GRS has contracted with companies like Shopcast, which provides in-store music services, to play music via the webcasting method at franchise locations such as Lotteria and Angel-in-us.
In response, the Korea Music Copyright Association argued that the music played through the webcasting method is not a playback of commercial records, thus violating copyright law, and filed a lawsuit demanding '800 million won' in performance fees. Article 29, Section 2 of the Copyright Act stipulates that public performance of commercial recordings without compensation does not infringe on the performer's rights. This means that if sound sources other than commercial records are played publicly, appropriate compensation must be paid to the copyright holder.
The first trial ruled in favor of the defendant. The court stated, 'The sound sources provided to Lotte GRS through Shopcast are identical to the digital sound files sold in the market, so the in-store operator publicly displaying the sound files received via the webcasting method is considered as publicly displaying commercial recordings under Article 29, Section 2 of the Copyright Act.' Thus, it noted, 'The claims for damages by the plaintiff based on infringement of performing rights and the return of unjust enrichment cannot be accepted.' The second trial made the same judgment.
However, the Supreme Court overturned the second trial ruling, stating, 'The sound sources provided via the webcasting method do not correspond to commercial recordings (which are exempt from copyright fees).' It explained, 'Whether it is a commercial recording should be judged based on the time the performer receives the recording; since the in-store operator receives the music for a purpose other than commercial sale, viewing it as intended for "in-store music services" means it cannot be considered as a commercial recording.'