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The First Supreme Court Decision for Copyright Infringement in Games is Issued in June, 2019. 

On June 27, 2019, the Supreme Court of Korea issued a decision in a case for copyright infringement in substantially similar selection, arrangement and combination of the elements in games. This ruling is the first Supreme Court decision recognizing copyright infringement in copied games including mobile games. Lee & Ko represented the plaintiff, King.com, throughout the proceedings before the lower courts as well as the Supreme Court, and played important role in achieving the ground breaking decision of the Supreme Court.

Facts of the Case and Questions Presented

King.com, a prominent game company and creator of “Farm Heroes Saga,” brought a copyright infringement suit against the defendant who distributed another game, “Forest Mania” which was substantially similar to Farm Heroes Saga. Both games expressed the game rules through similar movement and order of introduction but had different game characters. Seoul Central District Court found no copyright infringement but held that the defendant violated the Unfair Competition Prevention and Trade Secret Protection Act (the “UCPA”) and on appeal, Seoul High Court held in favor of defendant, finding no copyright infringement and no violation of the UCPA. King.com appealed the decision of Seoul High Court.

On the appeal case heard before the Supreme Court, Lee & Ko presented how the “creative characteristics” of Farm Heroes Saga were actualized through selection, arrangement and combination of game rules. Given the nature of the case where many contentious issues were based on visual expressions, the Supreme Court allowed both sides rare opportunities of presenting the arguments before the court using visual materials and Lee & Ko successfully presented convincing evidence of substantial similarities between Farm Heroes Saga and Forest Mania. Finding copyright infringement based on Forest Mania’s copying of the creative characteristics of Farm Heroes Saga, the Supreme Court held in favor of King.com, thereby reversing Seoul High Court’s decision and remanded the case back to Seoul High Court.

In King.com case, defendant’s game had design elements such as characters which were different from such elements in plaintiff’s game but selection, arrangement and combination of game rules were substantially similar in both games. In the decision, the Supreme Court explained that a game can be protected under copyright if its elements are selected, arranged and combined in accordance with certain intention so that the resulting game has creative characteristics distinguishing itself from other games. This case is the first Supreme Court case where the court recognized copyright infringement in substantially similar games.

Implications in Game Industry

A game is a complex work which combines narratives, music, visual design, video and computer programs. Until King.com decision, there has been no clear precedent on to what extent the copyright protection is available for games, especially on whether a copyright infringement can be found for a game which imitates original games but changes the design of characters. With King.com decision, the court provided a guideline for determining copyright infringement for games by recognizing creative characteristics in selection, arrangement and combination of game elements.
 

Lee & Ko, on behalf of Big Hit Entertainment (“Big Hit”), obtained the first-ever decision in Korea to recognize the entertainment companies’ right to independently request for injunction against those who free-ride on the customer attractiveness that is based off of popularity and fame of the artists managed by the companies. This landmark decision is expected to serve as an important pedestal in protecting the legitimate interest of entertainment companies (domestic as well as international) that manage famous artists and entertainers and remain vulnerable to unfair competition of free-riders.

Big Hit is the mastermind behind the global sensation BTS, also known as the Bangtan Boys (방탄소년단), one of the most popular boy bands in the music industry today. Ever since BTS’ conception, Big Hit has been the engine and fuel behind all aspect of BTS’ activities. As BTS rose to global fame, however, rampant exploitation of their fame grew in high demand and merchandises using BTS’ name, portrait and photo without Big Hit’s permission started to flood the market. Fans who purchased these merchandises (specifically photobooks with collection of BTS’ portraits and photos) by believing them as official goods were disappointed to learn the truth, and poured complaints to Big Hit.

Lee & Ko was engaged as Big Hit’s legal representative to take legal measures against these unauthorized merchandises. At the time Lee & Ko sought to take action, however, the Korean court’s then-current position was that the entertainment companies are not entitled to seek legal protection for their artists’ right to publicity when there is no explicit legislation governing such right. This called for an immediate introduction of new legal basis that can protect the entertainment companies from the free-riders of their artists’ fame.

To do so, Lee & Ko developed a new legal basis for protection based on the Unfair Competition Prevention and Trade Secret Protection Act (“UCPA”). The UCPA prohibits actions that infringe another person’s economic interest by using such person’s achievements, which are the result of substantial efforts and investments for many years, without permission for unjust profit. Using the UCPA, Lee & Ko asserted that the economic value of BTS (e.g., BTS’ name, logo, portrait, photo, etc.) correspond to Big Hit’s enormous achievement resulting from many years of tremendous efforts and investments, by emphasizing the fact that Big Hit has planned and managed BTS’ entire career from debut to their present tremendous success. Lee & Ko argued that the very act of selling the unauthorized merchandises of BTS constitutes an act of unfair competition prohibited by the UCPA.

Convinced by Lee & Ko’s argument, the Seoul Southern District Court entered an injunction order on November 30, 2018 prohibiting all unauthorized production, distribution, sale and export of BTS photobooks, and also imposed a strict penalty by ordering a payment of 20 million KRW (approximately 20 thousand USD) won per day in the event of continued violation.

Despite the Court’s order, once the publishing companies were not allowed to make photobooks using unauthorized photos, they found ways to circumvent the court’s scrutiny by creating and selling photobooks fronted as entertainment magazines (that still included large number of BTS photos) and claiming freedom of press.

Publishing companies started to print magazine-like photobooks as shown below

Use of unauthorized BTS’ photos within the magazine 

In response, Lee & Ko filed an injunction to stop the publishing company from selling such “magazines” in name only. The Seoul Central District Court, however, denied the claim by holding that since the magazines still cover stories of other artists as well, they constitute legitimate media coverage and are protected under the freedom of press. Lee & Ko appealed the decision by showing the court that the magazines were serving as actual photobooks to the fans (which was verified through fan surveys, general perception of the public, comparison with other legitimate entertainment magazines, etc.), and that the publishing companies were using such guise to free-ride on the fame and popularity of BTS. After reviewing the exhaustive evidences submitted by Lee & Ko, the Seoul High Court on May 30, 2019 expressly acknowledged that the magazines in effect constitutes a “photobook” or “photobook-like magazine” similar to the official photobooks produced and sold by Big Hit and further held that the publishing company’s act of publishing and selling such magazines exceed the scope of ordinary media coverage and therefore cannot be protected under the freedom of press. The Seoul High Court granted an injunction relief and ordered the publishing company to pay Big Hit 10 million KRW (approximately 10 thousand USD) per day in the event of continued violation.

The two recent Korean Court’s decisions are significant in that they serve as first-ever decisions to recognize that entertainment companies are also independently entitled to legal protection for their artists’ name, logo, portrait, photo under the UCPA, therefore extending the scope of legal protection from artists to the entertainment companies that built the artists’ customer attractiveness through substantial investments and efforts.

365mc, an obesity clinic, filed suit for copyright infringement against Dodam Korea, a manufacturer and distributor of the imitation dolls of Jibang-ii, a famous mascot representing the clinic. Finding such infringement, the Seoul Central District Court (presiding judge Sang-Gu Park) on January 11 granted judgment in favor of 365mc and awarded KRW 30 million in damages and a permanent injunction on the manufacture and sale of the imitation dolls.

Jibang-ii is a character with a round and cute appearance that garnered huge popularity after being featured in various advertisements continuously throughout Korea (advertisement costs totaling about KRW 29 Billion). Jibang-ii’s popularity was so extensive that the Jibang-ii dolls gifted by 365mc to their clients were traded and resold in the second-hand markets at a lucrative value. As Jibang-ii’s popularity grew, however, there was also a sharp increase in the demand for imitation dolls of Jibang-ii, and Dodam Korea started making imitations of the Jibang-ii dolls since the end of 2015. These imitation dolls were distributed at a low price under the same name Jibang-ii or other similar names. In response, 365mc filed a suit in early 2018, claiming that Dodam Korea's manufacture and sale of the imitation dolls constituted copyright infringement and unfair competition.

Lee & Ko’s IP Practice Group, led by Attorney Young-mo Kwon, Choong Jin Oh, Vera Eunwoo Lee and Joo Hyun Choi, represented 365mc and was able to obtain a successful result for the client, which is a clear victory for the medical industry preparing for the 4th industrial revolution by creating and utilizing their own brand.