CJ E&M faces $50m copyright lawsuit in U.S.

The plaintiff said it had attained the international distribution rights for about 300 Korean songs by registering on behalf of the relevant Korean artists with the U.S. Copyright Office.

CJ E&M and CJ E&M America had submitted a motion to dismiss the case, calling the agency’s claims groundless, but  the court rejected it and has set a jury trial date for March 1, 2016.

According to recent initial disclosures, several former and current CJ E&M executives including CJ Group vice chairwoman Lee Mie-kyung, better known as Miky Lee in the global entertainment scene, are on the list of potential witnesses who will be asked to provide evidence and testify in the case.

As one of the most influential figures in promoting Korean pop culture overseas, the elder sister of CJ Group chairman Lee Jay-hyun has led the group’s entertainment and media businesses ranging from music to TV dramas to films since 1995. Lee, who is a U.S. citizen, resides in California.

In the U.S. civil lawsuit, the plaintiff is claiming that while it was legally licensed to sell Korean songs in the U.S. on digital music stores such as Apple iTunes for $0.99 to $1.29 per download, the defendants committed copyright infringements by allowing international customers including U.S. users to access their Korean Mnet.com website and purchase the same Korean songs at price-dumped rates per download to even as low as free. Copyright holders’ returns become smaller as the download prices fall.

The case could set a precedent for protecting Korean music copyrights overseas as the plaintiff also added claims of Digital Millennium Copyright Act violations to its U.S. civil lawsuit.

On top of copyright infringement claims, DFSB Kollective has levelled allegations that since 2014, CJ E&M and CJ E&M America have provided incorrect copyright credits and altered industry-standard registration codes to Korean songs played on the California-based Beats Music streaming service. Apple owns Beats Music, having acquired the site last year.

The misconduct violates “content management information” under the Digital Millennium Copyright Act.

Local legal experts say DFSB Kollective’s case is the first ever DMCA lawsuit filed against the Korean music industry giant.

“Unlike Korea, the U.S.’ DMCA law levies ‘punitive’ damages for misconduct involving copyrights in the digital domain,” said professor Lee Jae-Kyoung of Konkuk University Law School.

CJ E&M’s legal team said Wednesday via email exchange, “The complaints that the plaintiff filed are not true and so the company will fight against them without compromise until we are proven innocent.”

The company claimed it terminated the music download service to international customers in 2011 after it found “technical errors” that had allowed such downloads.

CJ E&M also said there is no irregularity in the distribution of Korean music in the U.S. via Beats Music through the “exclusive” distribution contract with the U.S. streaming site, signed last year.

Furthermore, CJ E&M accused DFSB Kollective of bringing to the U.S. the case that reached a settlement in the Korean court in 2012. In the breach of contract lawsuit, filed in 2011, DFSB Kollective sued for similar copyright management misconduct.

Regardless of the outcome of the current case, singers, songwriters and musicians have expressed frustration over their creative works distributed illegally at home and abroad by Korean distributors who call themselves Korean pop culture promoters.

The lead singer of a Korean indie band who discovered their albums were made available on Beats Music by CJ E&M and CJ E&M America without their knowledge or permission, speaking on condition of anonymity, said, “We are too powerless to fight against them to protect our creative works.”

By Kim Hoo-ran and Seo Jee-yeon (khooran@heraldcorp.com) (jyseo@heraldcorpcom)