Who Owns the Copyright in a Work-for-Hire Contract in South Korea? Key Court Rulings Explained

Facts: The client commissioned a developer (Defendant D) to create multi-screen cinema management software. The service agreement stated that “all intellectual and commercial ownership of products developed at the client’s request shall vest in the client.” Before inspection and final payment, the developer registered the software with the Korea Software Promotion Institute under the client’s name. Two other defendants later supplied the same program to third-party cinemas without authorization, prompting the client to sue for copyright infringement.

High Court (original): Copyright vested originally in the developer. The contract clause constituted an agreement to assign — not original vesting. Because inspection and final payment had not been completed, the assignment condition had not been satisfied, and the client had not acquired copyright.

Supreme Court (reversing): The Court held that the unconditional assignment clause should be given effect without conditioning it on inspection or payment, for three reasons:

• The parties expressed an unconditional intent for copyright to belong to the client — that intent should apply equally to the assignment context
• Copyright assignment in software takes effect by contract alone, without delivery of the product
• The developer’s act of registering the software under the client’s name prior to inspection corroborated an intent to assign immediately upon completion

Atlas Legal Note: This ruling confirms that a “belongs to client” clause is treated as an assignment — not original vesting. Critically, however, an unconditional assignment clause takes effect on completion, regardless of whether inspection or payment has occurred. The drafting of the assignment clause therefore materially affects when copyright transfers.

Facts: The plaintiff (client) claimed copyright in semiconductor inspection software developed by the defendant contractor, arguing the software was a work made for hire because the client’s subsidiary exclusively planned and funded the project. The court rejected all of the client’s arguments.

Held: The developer operated under an independent service contract, not an employment relationship. The contractor’s employee performed the core technical work and was employed by — and paid by — the contractor’s own business. The client’s involvement amounted to commissioning the work, not exercising the kind of comprehensive planning and control required to treat the contractor as a de facto employee. Copyright remained with the contractor.

Atlas Legal Note: This case illustrates that the work-made-for-hire exception is narrow. Funding the project and requesting deliverables is not sufficient. The client must demonstrate that the contractor was effectively integrated into the client’s organization — a difficult threshold to meet in a standard outsourcing arrangement.

Facts: A clinic hired a web agency to build its website under a fixed-term contract. The agency missed the deadline by over six months, and the clinic terminated the contract and engaged a replacement vendor. The agency counterclaimed, arguing the replacement site infringed its copyright in the original design.

Held (on counterclaim): The court found insufficient evidence of the creative originality required for compilation copyright — noting that the contractor itself had acknowledged making numerous revisions at the client’s direction, effectively conceding the absence of its own independent creative contribution. The counterclaim was dismissed.

Practical Takeaway: Where a client directs repeated design revisions, the contractor’s copyright claim may be weakened — but so may the client’s ability to claim ownership. A clear written assignment clause remains the most reliable mechanism.

Facts: An advertising agency commissioned a photographer to shoot 28 product images for a ham manufacturer’s catalog. The agency prepared the concept, arranged the products and props, and directed the shoot; the photographer operated the camera according to the agency’s instructions. The photographer later sued the manufacturer for copyright infringement when the images were used in department store catalogs beyond the original scope.

Held: Copyright vested originally in the advertising agency (the commissioner), not the photographer, because the agency — not the photographer — performed the substantive creative role of concept development, subject arrangement, and directorial oversight. The photographer merely executed the mechanical operation of the camera. Alternatively, even if the photographer had originally owned copyright, delivery of the negatives without a limiting agreement constituted an assignment of the full copyright.

Atlas Legal Note: This ruling identifies two independent grounds on which the commissioning party may acquire copyright in advertising works: (1) original vesting where the commissioner exercised substantive creative control, and (2) implied full assignment where the work is delivered without any contractual limitation on use.

Facts: A doctor who operated a traditional Korean medicine clinic commissioned a webtoon artist to produce 24 episodes of a diet-themed webcomic for use on the clinic’s blog. The doctor paid ₩4 million total. Later, without the artist’s consent, the doctor published the webtoon as a book under her own name. The artist filed a criminal complaint; the doctor responded by seeking a court declaration that she owned the copyright.

Held: The court rejected all three of the client’s theories:

• Work made for hire: The artist was an independent contractor, not an employee. She received per-episode compensation, not a salary. She independently created the detailed story, character designs, layouts, and artwork. The doctor’s input — suggesting story direction and reviewing drafts — was the conduct of a commissioning client, not an employer exercising supervision.
• Work-made-for-hire analogy: The court declined to extend the software exception (recognized in Supreme Court 98Da60590) to cartoon works, noting that the exception reflects characteristics specific to computer programs.
• Assignment by PSD file delivery: The artist delivered the PSD source files only for the purpose of printing a small number of copies for in-clinic use. This limited grant did not constitute an assignment of copyright. The artist’s immediate objection to commercial publication confirmed the scope of the grant.
• Joint authorship: The doctor supplied ideas and subject-matter information, but these are not protectable expression. Creative decisions about the work’s expressive form — story detail, character design, artwork — were made exclusively by the artist.

Atlas Legal Note: This case demonstrates that delivery of source files (PSD, source code, etc.) does not imply copyright assignment. The scope of any permitted use should be documented in writing at the time of delivery. Criminal penalties — the client was fined ₩15 million — illustrate the severity of unauthorized use of another’s copyright.

Facts: An animation director (plaintiff/contractor) entered a service agreement with a production company (defendant/client) to create a 10-episode UHD children’s program. The actual contract value was ₩44 million. The contractor performed directing, scenario writing, character design, casting, and filming, but declared a work stoppage in November 2017 before completing post-production. The client then engaged third parties to rewrite the script, produce animation sequences, and complete the program, which was broadcast on cable television and uploaded to YouTube.

Held — Joint Work: The court found that the contractor had not completed the work and that, by handing over the unfinished footage, the contractor implicitly authorized the client to complete the remaining production. The finished program was therefore a joint work of both parties. Because the contractor had also tacitly agreed that the client could exercise copyright independently, the contractor’s claims of infringement of distribution rights and moral rights (integrity right) failed.

Held — Moral Rights (Attribution): The client’s failure to credit the contractor in connection with the set design (which the contractor had created) infringed the contractor’s attribution right. The court awarded ₩100,000 in non-economic damages for this breach.

Held — Contractor’s Liability (Counterclaim): By abandoning the project without completing the scenario and storyboard to a standard usable by third parties, the contractor breached the contract. The contractor was ordered to compensate the client for:

• Script rewriting costs: ₩3.3 million
• Animation outsourcing costs: ₩11 million
• Stage director costs: ₩1.65 million
• Total (after set-off): ₩15.85 million

Atlas Legal Note: Where a contractor abandons an unfinished project and the client completes it, the finished work may be treated as a joint work — with the client able to exploit it independently under an implied agreement. Contractors who withdraw mid-project face both loss of copyright exclusivity and potential liability for the costs of completion.