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.

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.

If you have any questions regarding this article, please contact below:

Un Ho KIM ([email protected])

Hyeok AHN ([email protected])

Jaewoo KWAK ([email protected])

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