As Korea's content industry grows rapidly, legal disputes over investment funds, distribution rights, intellectual property (IP), and international transactions are also spreading. As a structure in which multiple investors, producers, distributors, and platforms jointly use a single piece of content becomes common, issues of rights attribution, revenue sharing, and settlement after contract termination have grown more complex.
According to the legal community on the 26th, the Seoul High Court's Civil Division 20-3 (presiding judge Lee Eui-young) will hold an appellate ruling hearing on September 2 in a monetary claim lawsuit filed by Company A against content investment and distribution firm Showbox.
The key issue in the case is whether 50 billion won in investment funds prepaid for a drama production project must be returned. The two sides signed an investment contract worth a total of 137 billion won, but the contract was terminated after Company A failed to pay the remaining investment funds except for the 50 billion won prepayment.
Company A argued that while the contract took the form of an investment contract, it was in substance a "bridge investment" made before the fund formation stage, and that it should recover the 50 billion won prepayment. However, the first-instance court ruled in favor of Showbox, judging valid a clause that terminates the contract and prevents the return of already-paid amounts if the investment funds are not properly paid.
Lawsuits over distribution rights contracts signed at the content distribution stage are also continuing. The Seoul Central District Court recently issued a partial victory ruling for the plaintiff in a distribution fee return lawsuit filed by CJ ENM against Production Company B. The ruling was confirmed as is, as neither side appealed.
In this case, the key issue was how to settle prepaid distribution fees after a film supply contract fell through. The court judged that since the amount was paid on the premise of film supply, it must be returned if the contract was not performed.
As overseas companies increasingly participate in content production, disputes over international contracts are also noticeable. A representative case involved the application of the United Nations Convention on Contracts for the International Sale of Goods (CISG), which governs cross-border sale-of-goods contracts.
A Hong Kong mold manufacturer filed a lawsuit demanding payment related to a toy mold production contract signed with a Korean animation producer. The court ruled in favor of the Hong Kong company. The court judged that "under the CISG, if defects in the product were not reported in a timely manner, payment cannot be refused solely on the grounds that final approval was not given."
Behind the diversification of disputes lies the expansion of the content industry. According to the Korea Creative Content Agency's "Content Industry Trend Analysis Report," domestic content industry revenue last year was 161.4839 trillion won, up 2.6% from 157.4021 trillion won in 2024. First-quarter revenue this year was also 40.9495 trillion won, up 7.9% from a year earlier.
As the industry grows in scale, content contracts are also expanding from simple production and delivery contracts to investment, production, distribution, and IP business contracts involving multiple parties. Content companies cite the "complexity of contracts and negotiations" and "understanding rights relationships" as major challenges in the transaction process.
Kwak Jae-woo, an attorney at law firm Lee & Ko, explained, "With the spread of over-the-top (OTT) services and the increase in joint productions, the need to define media of use, region, duration, release order, and exclusivity in greater detail at the contract stage has grown." He added, "Legal advisory work is also expanding beyond reviewing completed contracts to designing rights attribution and investment recovery structures from the outset."
The legal community expects disputes over specific scopes of use, rather than ownership of the content itself, to increase further in the future. Representative examples include the use of celebrities' faces and voices through artificial intelligence (AI), remake and spin-off production, and rights to secondary businesses such as games and merchandise. Regarding global OTT services, conflicts over distribution rights by country, release period and order, and revenue settlement methods are also expected to emerge as key issues.
"To reduce disputes, contracts must clearly define who owns what and who exercises decision-making rights," Kwak said. "Since current standard contracts do not sufficiently reflect the recently complex investment and IP business structures, it is effective to prepare modular standard clauses that can be used by transaction type."
He stressed, "Since courts also prioritize the rights and obligations specified in the contract over industry practices in their rulings, documenting the details of the agreement concretely at the contract stage is more important than anything else."
