Criminal Enforcement of Copyright and Unintended Consequences

Soon after the signing of the Korea-US FTA ("KORUS") in June 2007, South Korea experienced a dramatic increase of complaints of copyright crime from 2007. Around one hundred thousands of persons were accused of copyright infringement in a year, and juvenile’s victims occupied 24% in 2008.[1] 

But the actual indictments by the prosecutors were very small: from 2005 to 2013 on average only 7.38% of the complaints were brought to the court. Most of them were for summary proceedings and public trial occupied only 0.22%.[2] Notably in 2008, among the complaints as many as 90,979, only 8 complaints led to the public trial (0.00879%).  Among the complaints that were not indicted by the public prosecutors in 2008, around 60% cases were withdrawn by the complainants.

These unimaginable figures, i.e., the skyrocketed increase of criminal complaints on the one hand and the tiny portion of actual trial on the other hand are for two reasons.

First, the threshold for entering the criminal procedure is too low – almost nothing. The only threshold is knowingness. Any infringing act is subject to criminal penalty regardless of the nature or seriousness of offense.

Second, the criminal enforcement has been strategically abused by copyright holders and lawyers. The threat of criminal sanction became a new business model since 2007 when KORUS officially signed. Most of the complaints, 63% in 2008, were raised by law firms. They hired special agents to regularly monitor the Internet and sent warning letters to individuals who conducted technically copyright infringing activity, threatening criminal actions. In exchange of stopping the criminal action, they asked a cash settlement. The criminal enforcement procedure provides copyright holders with a leverage using the threat of criminal action as the initiation of criminal procedure is subject to a complaint by the right holder.

The phenomenon so-called a “business of copyright settlement money” has been widespread and become a serious social problem in Korea for nearly a decade. To fix this problem, several bills to raise the threshold of the copyright criminality has been introduced in the National Assembly. The latest effort makes the statutory requirements for criminal sanction: a for-profit purpose; or harm or injury to copyright holder of more than KRW one million.[3] 

The copyright industries and like-minded scholars and practitioners presented a united front to the bill when it passed the competent committee in April 2014 and had a legal formality examination ahead. Their opposition was based, among others, on possible disputes with foreign countries, predicted complaints from foreign authors, degradation of general public’s recognition on copyright protection, and breach of KORUS, which requires criminalizing copyright violation for purpose of private financial gain. Due to their strong resistance, the reform bill was finally foundered in May 2016.

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[1] The number of complained reduced to a half since 2010 when the Ministry of Culture and the Prosecutors’ Office took an interim measure not to prosecute those who were first involved in the copyright infringement crime or minors.

[2] The summary proceedings, also called summary indictment, refer to a court proceeding by which judge orders, without attendance of the accused, a fine or penalty. See, Korean Minister of Justice, Criminal case procedures available at http://fgn.kics.go.kr/en/jsp/cjp/criminalCaseProcedures09.jsp.

[3] The threshold of KRW one million was modeled on the US laws of “during any 180-day period … a total retail value of more than $1,000 (17 U.S.C. § 506(1)(1)(B)).

Changes Induced by Open-Ended Fair Use Clause: Korean Experiences

[Also posted at http://infojustice.org/archives/37215]

South Korea has a civil law tradition based on the modern European civil law systems. The civil law tradition was one of the obstacles when civil societies and lawmakers tried to introduce flexible and open-ended fair use exceptions into the Korean Copyright Act (“KCA”) in 2005 and 2009. According to opposers, the fair use doctrine, developed under the rules of equity in common law countries such as the U.S., did not fit with the Korean civil law system.

Facts and Figures on Copyright Three-Strike Rule in Korea

Notice: I think I have to clarify that the thirty-one individuals mentioned below were not suspended without any prior notice from the Copyright Commission. Some articles referring to my blog indicated they were. For instance, here and here. When I said no prior notice for the Commission’s recommendation, I meant to put an emphasis on the difference in the statutory requirement between the track by the Minister’s order and one by the Commission’s recommendation. Currently, the Korea Copyright Commission has its own bylaw which imposes at least three times prior notice upon the recommendation of suspension. The thirty-one individuals had been suspended according to this bylaw. However, the Commission is free to amend the bylaw and switch to one-strike system.

1. Two Tracks to Implement the Three-Strike Rule

A. Suspension of a User Account or Shutting-Down of a Web Site by an Order of the Minister

Under Article 133bis of the Korea Copyright Act, the Minister of Culture, Sports and Tourism (“the Minister”) may, after deliberation by the Copyright Commission, order an ISP to take measures:

·         To suspend for a period shorter than six months an account provided by the corresponding ISP for a user when the user has been warned at least three times by the Minister in connection with an unauthorized reproduction or transmission of the copyright infringing material (Para 2); or

·         To shut down for a period shorter than six months a web site (“a bulletin board”) that has been ordered at least three times by the Minister to delete or block copyright infringing material (Para 4)

ECJ on Resale Right

The European Court of Justice ruled on the author's resale right in a disute on paintings of Salvador Dalí who died on 23 January 1989. This concerns on the interpretation of Articles 6(1) and 8(2) and (3) of Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art (OJ 2001 L 272, p. 32).

According to the Directive, the resale right is an inalienable right which cannot be waived and defined as a right to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author (Article 1(1)). The royalty is to be paid to author or after his death to those entitled under him/her (Article 6(1)).The term of resale right is the same as the term of author's right, i.e., for the life of the author and for 70 years after his death.

The decision is here.

Three Strikes Rule: Sleeping for Seven Months

Last month I requested the South Korean government to disclose information on the three strikes rule that came into effect on July 23, 2009. Surprisingly there was no single case in which the rule has been actually applied or considered to be applied.

This is surprising because the government, backed by copyright industries, claimed, when it strongly supported the introduction of the rule, that wilful repeat infringers (called 'heavy uploaders') were about 1,000 and most of the illegal file sharing took place in around 150 ISPs (largely in web storage service providers). Due to the heavy uploaders and ISPs having a symbiotic relationship with them, the loss to the copyright industry was said to amount to approximately 2 trillion KRW (in 2007). Relying upon the overestimated number, the government proclaimed that the three strikes rule was of urgent necessity for saving the copyright industries that were going to wither away.

According to Article 133bis of the Korean Copyright Act, the Minister of Culture, Sports and Tourism (MCST) may order ISPs to take a measure: (i) to suspend for a period shorter than 6 months a user account of a repeat infringer [1] (Para 2); or (ii) to shut down for a period shorter than 6 months a web site [2] that allows a file uploading and has been ordered by MCST at least three times to stop an illegal filing sharing (Para 4). These are key provisions of the Korean three strikes rule.

When the rule was introduced, the notice-and-takedown system was also revised. Under the revised system, the Copyright Commission (a governmental body) may recommend ISPs to warn against an illegal material transmitter or to delete or cease to transmit the illegal material (Article 133ter). From July 23 to December 31, 2009, the Commission sent ISPs 24,394 recommendations and ISPs fulfilled what was recommended in 24,030 cases. This means 100% compliance by ISPs (the remaining notices were not serviced due to unknown address or close of business of ISPs). Table 1 below shows the recommendations sent by the Commission to ISPs from July 23, 2009 to January 31, 2010, and table 2 illustrates the measures taken by ISPs upon the Commission’s recommendations for the same period of time.

Table 1: Recommendations by the Copyright Commissions

Year	Recommendations (Warning)	Recommendations (Delete or Cease to Transmit)	Suspension of User Account	Total
2009 (From July 23)	12,420	11,974	0	24,394
2010 (to January 31)	2,555	2,500	0	5,055

Table 2: Measures Taken by ISPs upon the Commission’s Recommendations

Year	Measures by ISPs (Warning)	Measures by ISPs (Delete or Cease to Transmit)	Suspension of User Account	Total
2009 (From July 23)	12,237	11,793	0	24,030
2010	2,549	2,494	0	5,043
* Warnings and takedown notices of 376 were due to close of business or unknown address of ISPs.

This tells us two things. First, the three strike rule is redundant and unnecessary. Its urgent necessity proclaimed by the government and copyright industries turns out to be untrue. Second, the notice-and-takedown system did work. The figure of 100% compliance by ISPs shows it worked too much. To ISPs, the compliance to the Commission’s recommendations is the easiest and cheapest way. What we have to concern is its chilling effect on freedom of speech and on everyone’s right to access to information.

[1] The ‘repeat infringer’ refers to one who has been warned or noticed to cease to transmit illegal material more than three times by ISPs. The warning or the notice by ISPs is to be made upon an order by MCST and such an order has to be issued after consultation with the Copyright Commission. The warning is directed to those who conduct illegal reproduction or transmitting copyrighted works, and the notice requires ISPs to delete or stop transmission of the illegally reproduced material.

The ‘user account’ refers to an account provided by an ISP in question for identifying or managing users. It includes user accounts provided by the same ISP other than the account used in the transmission of the illegally reproduced material. However, a user’s email account is excluded.

[2] For the ‘web site,’ Article 133bis uses the term ‘bulletin board,’ a definition of which is provided in other law (“Act on Promotion of Information and Communications Network Utilization and Information Protection”). According to it, a ‘bulletin board’ refers to “regardless of its name, a computer programme or a technological device that enables a user to post information such as sign, character, voice, sound, image or video on an information telecommunication network for the purpose of disclosing the information to the public. A bulletin board that may be shut down under the three strikes rule is broad to cover what is operated for commercial purposes or provides convenience for users.

* The MCST describes the Korean three strikes rule in a slightly different nuance here.

UK Human Rights Committee on "three strikes" Rule

Digital Economy Bill introduced by the UK Government in the House of Lards on 19 November 2009 contains so-called "three strike" rule (gratuate response). This is to combat an illegal file-sharing via a two-stage process: first, by requiring ISPs to maintain a list of accounts of suspected users; and second, through delegated powers to introduce technical measures, such as disconnection.

The Billl provoked concerns about rights to privacy, freedom of expression, and procedural justice and fairness. On February 5, 2010, the Joint Committee on Human Rights appointed by the House of Lords and the House of Commons issued its final report on the issues.

Concerning the procedural fairness and justice, the report says:

"1.44 We accept that there is no clear answer to whether the decisions taken during the process of issuing copyright infringement reports and infringement lists involve the determination of any individuals’ civil rights and that it is unlikely that Article 6 ECHR is engaged. However, in the light of the acceptance by the EU that a fair process is necessary for regulation of individual service users’ access to the internet, we consider that statutory provision for a right to appeal to an independent body against inclusion on any infringement list at this stage would lead to a fairer procedure and so be a human rights enhancing measure.

...

1.48 Although there is very little detail about the appeal mechanism, the enforcement and reviewing bodies on the face of the Bill, it is our view that, provided the time frame for review and appeal is adequate and the measures are routinely suspended until the right of appeal is exhausted, it is unlikely that these provisions will be structurally incompatible with Article 6 ECHR. The provision of a review by an independent reviewing body and a full right to appeal before the First Tier Tribunal, prior to the imposition of any sanction is adequate to meet the requirements of the Convention for a hearing by an independent and impartial tribunal."

Notes from the Meeting between Civil Society Organization Members and Korean Government (MCST)

Notes from the Meeting between Civil Society Organization Members and Korean Government (MCST)

November 27, 2009

MCST: Why national civil society groups are interested in the proposed WIPO Treaty? What makes CSO members take part in such a movement?

CSO: Although Korean domestic laws already have provisions similar to the proposed WIPO Treaty, access to foreign works can be enhanced by the proposed WIPO Treaty. Our participation is also vital for the shared aims of people with reading disabilities all over the world.

MCST: Korean delegation is "supportive" of the proposed WIPO Treaty and hopes the proposal will become an international treaty as proposed, rather than weakened. One of the concerns is that some delegations =96 including that of the US =96 worry that the proposed WIPO Treaty may encourage copyright infringements, which are already prevalent. If such concern is not relaxed, entering into a treaty is to be delayed. Furthermore, since the WIPO Internet Treaty of 1996 we have not seen any other treaty concluded within the WIPO (e.g. the broadcasting treaty); getting agreement on such a treaty for people with reading disabilities is also difficult. But the text of a treaty is already on the table and this is a good start.

MCST: Concerning the "alternative ways" to which the Korean delegation referred at the WIPO meeting, the MCST has no clear ideas about what exactly these =93alternative ways=94 are, and the Korean delegation is not in a position to oppose the proposed WIPO Treaty. When the WIPO discusses a treaty, any urgent efforts by the WIPO necessary for helping people with reading disabilities are likely to be halted because the WIPO is an intergovernmental organization with limited resources. [On the other hand, according to a local news story (mediaus.co.kr), the "alternative ways" may include "recommendations" which are easier to agree on than a treaty that may take more than 10 years, says an official of the MCST.

CSO: Our concern is that many industrialized countries have indirectly expressed their opposition and that the Korean government has frequently followed the U.S. position. So the statement on "alternative ways" seems to be no different from such indirect opposition. Nonetheless, we welcome if the MCST is in a supportive position and demand a clear expression of support from the Korean delegation at the next session of the SCCR.

MCST: Concerning domestic policy on people with reading disabilities, publishers still oppose the recently revised provisions in the Copyright Act regarding copyright limitation for such people. Thus the MCST focuses more on practical issues such as how to ensure the prevention of copyright infringement in the process of converting copyrighted works into an accessible format for people with reading disabilities.

Open Letter to the Korean Government Concerning the Proposed WIPO Treaty for People with Reading Disabilities

Open Letter to the Korean Government Concerning the Proposed WIPO Treaty for People with Reading Disabilities

The 18th session of the Standing Committee on Copyright and Related Rights (SCCR) of the World Intellectual Property Organization (WIPO) was held on 25 to 29 May 2009. During this session, Brazil, Ecuador and Paraguay proposed official discussions on the WIPO Treaty for Improved Access for Blind, Visually Impaired and Other Persons with Reading Disabilities (the proposed WIPO Treaty), which was presented by the World Blind Union last year.

It is widely accepted that a number of people with reading disabilities throughout the world have suffered from restriction in self-development and social participation due to limited access to copyrighted works. Constructing social conditions in which people with reading disabilities can equally participate in the cultural life and enjoy scientific advancement and its benefits is not only a legitimate right of these people, but also an obligation of the state. As a way of fulfilling this obligation, South Korea has tried, like some other states, to ensure rights of people with reading disabilities through the provision of limitations on copyright in the Copyright Act. Yet copyright provisions differ from one country to the next, and efforts to protect people's right to access in different countries has been constrained. It is therefore necessary to establish an internationally applied rule regarding minimum standards on copyright limitations for people with reading disabilities. This is also vital for striking a fair balance between the protection of copyright and the fair use of copyrighted works, which is inherent and essential in a copyright system.

Considering this, we ask the following questions on the position of the Ministry of Culture, Sports and Tourism (MCST) in connection with the proposed WIPO Treaty.

(1) At the 18th session of the SCCR, the Korean delegation, while admitting the importance of enhancing access to copyrighted works by people with reading disabilities, supported "alternative ways", rather than negotiating a treaty. What does the MCST actually mean by "alternative ways" that can enhance the right to access of people with reading disabilities in an effective and sustainable manner, as
opposed to temporary assistance for these people?

(2) What is the reason for the position of the MCST and the Korean delegation supporting "alternative ways" rather than a treaty?

(3) Has the MCST, as an executive branch in charge of copyright policies, conducted a detailed review of the proposed WIPO Treaty? We ask that any review be made public.

(4) Does the MCST consider the proposed WIPO Treaty to be in conflict with any provisions of the Korea Copyright Act?

(5) We believe that the proposed WIPO Treaty can be negotiated in parallel with any efforts seeking to enhance access to information for people with reading disabilities. International efforts to improve access to information for people with reading disabilities started several years ago, and relevant discussions within the WIPO began in 2003. We hardly see any reason to delay discussions on an international treaty for that purpose.

We would like to know if the MCST and the Korean delegation to the WIPO intend to clearly express strong support for the proposed WIPO Treaty.

November 4, 2009

Disability Discrimination Act of Solidarity in Korea (DDASK) IPLeft (Intellectual Property Left)

Copyright L&E for Libraries

Bill No. 4389 to Amend the Korea Copyright Act Introduced on April 2, 2009 by Ten Congressmen (Lead by Congressman Choi, Munsoon)

1. Current Provision on Copyright L&E for Libraries

Article 31(Reproduction, etc. in Libraries, etc.)
(1)Libraries under the Libraries and Reading Promotion Act and the facilities (including the heads of the relevant facilities hereinafter referred to as "libraries, etc.") as prescribed by Presidential Decree among those facilities which provide books, documents, records and other materials (hereinafter referred to as "books, etc.") for public use may reproduce the works by utilizing books, etc. held by the libraries, etc. (in the case of Subparagraph 1, including the books, etc. reproduced by or interactively transmitted to the libraries, etc. in accordance with the provision of Paragraph 3 hereof) in any of the following cases: provided that in the case of Subparagraphs 1 and 3, the works may not be reproduced in digital format.
1. Where, at the request of a user and for the purpose of research and study, a single copy of a part of books, etc. already made public is provided to him
2. Where it is necessary for libraries, etc. to reproduce books, etc. for the purpose of preserving such books, etc. and
3. Where libraries, etc. provide other libraries etc. with a reproduction of books, etc. that are out of print or scarcely available for similar reasons at the request of other libraries etc. for their collection purpose.
(2) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users to peruse them in such libraries, etc. by using devices capable of information processing such as computers, etc. In such case, the number of users who may peruse them at the same time shall not exceed the number of copies of such books, etc. held by the libraries, etc. or authorized to be used by the persons with copyrights or other rights protected according to this Act.
(3) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users in other libraries, etc. to peruse them by using computers, etc.; provided that, in those cases where all or a part of the books, etc. have been published for sale, such books, etc. shall not be reproduced or interactively transmitted unless a period of five years has elapsed since the publication date of such books, etc.
(4) In reproducing books, etc. pursuant to Subparagraph 2 of Paragraph (1), Paragraph (2) or Paragraph (3), libraries, etc. shall not reproduce such books, etc. in digital format if they are being sold in digital format.
(5) In reproducing books, etc. in digital format pursuant to Subparagraph 1 of Paragraph (1), or reproducing or interactively transmitting books, etc. for the purpose of allowing perusal inside other libraries, etc. pursuant to Paragraph (3), libraries, etc. shall pay the owners of authors' property rights compensation in accordance with the standards determined and published by the Minister of Culture provided that said provision shall not apply to books, etc. (excluding those books, etc. which are, in part or in whole, published for a sales purpose) regarding which the state, local governments or schools as provided in Article 2 of the Higher Education Act hold authors' property rights.
(6) The regulation regarding compensation in Paragraph 5 to Paragraph 9 of Article 25, shall apply mutatis mutandis to foregoing Paragraph 5 with regard to distribution of compensation, etc.
(7) If books, etc. are reproduced or interactively transmitted in digital format pursuant to the foregoing Paragraphs (1) through (3), libraries, etc. shall take necessary measures as provided by Presidential Decree such as reproduction prevention measures in order to prevent infringement of copyrights and other rights protected under this Act.

2. Amendment

Article 31(Reproduction, etc. in Libraries, etc.)
(1) In Libraries under the Libraries and Reading Promotion Act and the facilities (hereinafter referred to as "libraries, etc.") as prescribed by Presidential Decree among those facilities which provide books, documents, records and other materials (hereinafter referred to as "books, etc.") for public use may be produced the works by utilizing books, etc. held by the libraries, etc. (in the case of Subparagraph 1, including the books, etc. reproduced by or interactively transmitted to the libraries, etc. in accordance with the provision of Paragraph 2 hereof) in any of the following cases: provided that in the case of Subparagraph 1, the works may not be reproduced in digital format.
a. Where, at the request of a user and for the purpose of research and study, a single copy of a part of books, etc. already made public is provided to him
b. Where it is necessary for libraries, etc. to reproduce books, etc. for the purpose of preserving such books, etc. and
c. Where libraries, etc. provide other libraries etc. with a reproduction of books, etc. that are out of print or scarcely available for similar reasons at the request of other libraries etc. for their collection purpose.
(2) Libraries, etc. may reproduce or interactively transmit their books, etc. to allow users to peruse them in such libraries, etc. (including an Internet address that is supported by an information telecommunication network of such libraries, etc.), in other libraries, etc., and outside of the libraries, etc. by using devices capable of information processing such as computers, etc., provided that in case where all or a part of the books, etc. have been published for sale (excluding books, etc. that are out of print or scarcely available for similar reasons), such books, etc. shall not be perused outside the libraries, etc. unless a period of five years has passed from the publication date of such books, etc.
(3) (Deleted)
(4) In reproducing books, etc. pursuant to Paragraph (2), libraries, etc. shall not reproduce such books, etc. in digital format if they are being sold in digital format.
(5) In reproducing or interactively transmitting books, etc. for inside other libraries, etc. or for outside libraries, etc., libraries, etc. shall pay the owners of authors' property rights compensation in accordance with the standards determined and published by the Minister of Culture provided that said provision shall not
apply to:
a. books, etc. (excluding those books, etc. which are, in part or in whole, published for a sales purpose) regarding which the state, local governments or schools as provided in Article 2 of the Higher Education Act hold authors' property rights;
b. books, etc. of which use is permitted free of charge by the owners of authors' property rights; and
c. those cases pursuant to Subparagraphs 2 and 3 of Paragraph 1.

(6) The regulation regarding compensation in Paragraph 5 to Paragraph 9 of Article 25, shall apply mutatis mutandis to foregoing Paragraph 5 with regard to distribution of compensation, etc. In this case the state or local governments may provide with a subsidy for libraries, etc.

(7) If books, etc. are reproduced or interactively transmitted in digital format pursuant to the foregoing Paragraphs (1) through (2), libraries, etc. shall take necessary measures as provided by Presidential Decree such as reproduction prevention measures in order to prevent infringement of copyrights and other rights protected under this Act.

3. Explanation of the Amendment

3-1. Paragraph (1)

The current provision is designed to allow "libraries" to make copies. This creates an unintended consequence: only librarians can reproduce works upon request of users. Put differently, users can not make their own copies of works held by a library even with using a self-service photocopier which is under control of the library. Therefore, librarians need to be engaged in every reproduction task and to police the activities of users.

The Amendment abolishes the division between librarian copying and copying by users and permits copying by users or agencies employed by libraries.

Further, the Amendment permits the copying of works in "digital format." Such a copy can be provided for other libraries where the works are unavailable or scarcely available due to, e.g., out-of-print.

3-2. Paragraph (2)

Expansion of "in the library"

Under the current provision, a library is defined as an establishment occupying physically the same space. Therefore, for instance, when a university has several libraries distant but connected by the same computer network, each library is separate one within the meaning of current Article 31.

The Amendment expands the concept of "in the library" by adding the phrase "including an Internet address that is supported by an information telecommunication network of such libraries, etc."

Remote Access

Under the current provision, in order to access works provided in digital format by a library, users have to visit the library. Further, in such a library, the number of users concurrently accessing the digital works is limited by the number of physical copies held by the library.

The Amendment removes these two limitations, allowing remote access to the digital works regardless of the number of the physical copies kept by the library. In consideration of concerns of and harmful impacts on the publishers, the Amendment provides that peruse by readers outside the libraries is only permitted after five years have passed from the date when the works were published for sale. Even after the elapse of five years, libraries have to pay compensation to a copyright holder for their providing for the remote use (Paragraph 5).

3-3. Paragraph (3)

Deleted in accordance with the amendment of Paragraph (2).

3-4. Paragraph (4)

It is permitted that libraries reproduce works in digital formats even when they are being sold in digital format so long as the reproduction is made for the purpose of preservation under Subparagraph 2 of Paragraph 1.

3-5. Paragraph (5)

The current compensation rule applies to any interactive transmission between libraries. The Amendment rules out the transmission of works that are non-for-sale.

3-6. Paragraph (6)

The Amendment enables the State or local government to financially assist a library having a slim budget for paying compensation to the copyright holders.