Investment Returns Not Distributed... Violation of 'Artist Rights Protection Act'
Unfair Terms Also Found in Contracts Between Copyright Holders
The Ministry of Culture, Sports and Tourism announced on the 17th that it has issued a corrective order to the accused party of the comic 'Geomjeong Gomosin' (Jang Jin-hyeok, CEO of Hyeongseol Publishing and Hyeongseol&), ordering them to cease unfair practices and pay the undistributed profits to the complainants (the late Lee Woo-young and Lee Woo-jin). Minister Park Bo-gyun stated, "We have confirmed unfair practices prohibited by the 'Act on the Guarantee of Artists' Status and Rights' in contracts between copyright holders," adding, "We will take strong measures and operate the Copyright Legal Support Center and the Visiting Legal Service Support Group to ensure that such tragedies never happen again."
Following the Ministry of Culture, Sports and Tourism's order to stop the 'refusal to distribute profits,' the accused must return the undistributed investment profits. Additionally, appropriate income from ongoing licensing businesses must also be distributed. The basis for this judgment is the business rights establishment contract between the copyright holders of 'Geomjeong Gomosin' dated June 2008. The special investigation confirmed that investment profits were not distributed. The ministry explained, "Not only the original work royalties but also investment profits derived from the animation should be considered profits to be distributed among copyright holders," and added, "The accused's continuous refusal to distribute investment profits violates Article 13, Paragraph 1, Subparagraph 2 of the 'Act on the Guarantee of Artists' Status and Rights.'"
The ministry also identified unfair terms in the contract between copyright holders and ordered changes. The accused must revise the contract terms, including resetting the validity period through consultation with the parties involved. The problematic contract is the 'Transfer Agreement of Claims for Damages, etc.' signed in 2010. It unilaterally imposes obligations on the complainants, such as transferring the business rights of 'Geomjeong Gomosin' to the accused and stipulating penalties for violations. The accused did not pay any specific compensation to the complainants. The ministry pointed out, "This constitutes setting transaction conditions that are significantly disadvantageous to the complainants," and stated, "It violates Article 13, Paragraph 1, Subparagraph 5 of the 'Act on the Guarantee of Artists' Status and Rights.'" Furthermore, "The accused has never responded even once to the complainants' requests to amend the contract terms," which is interpreted as "an act of imposing other disadvantages on the complainants during the execution of transaction conditions."
The accused must submit evidence proving compliance to the Ministry of Culture, Sports and Tourism by September 14. Failure to comply may result in a fine of up to 5 million won or suspension/exclusion of financial support within three years. If necessary, the ministry may also order public disclosure according to the 'Notice on the Publication of Facts of Corrective Orders.'
Since the enforcement of the 'Act on the Guarantee of Artists' Status and Rights,' 123 cases have been filed with the Artists' Ombudsman. The ministry has issued corrective orders in seventeen cases, including the 'Geomjeong Gomosin' case. It has handled a total of 43 cases: three corrective recommendations, three dispute mediations, five pre-action compliance cases, and fifteen closures. Currently, fourteen cases are under review, and fifty-six cases are under fact-finding investigation.
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