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The ongoing legal dispute between EXO-CBX and SM Entertainment is expected to continue for some time.
The UBJ
SM Entertainment has recently taken legal action against EXO-CBX, comprising members Chen, Baekhyun, and Xiumin.
The lawsuit is related to a disagreement over contractual agreements concerning IP usage fees between SM and the group’s members.
In a countersuit, EXO-CBX has challenged SM on grounds of an unfair profits distribution.
EXO-CBX Sues SM Entertainment Over Contentious Profit Sharing Arrangement
Reportedly, EXO-CBX has yet to remit royalty payments to SM for the use of intellectual property, which includes music and other assets, for a period exceeding six months.
Originally, an agreement was in place that required EXO-CBX to pay SM 10% of their sales profits on a quarterly basis, a sum inclusive of the IP usage fees. However, during a press event, EXO-CBX proposed a distinct arrangement for payment for the use of SM’s IP, a negotiation to which SM did not respond.
At present, EXO-CBX is still required to pay SM for IP usage, a matter that adds tension to the ongoing legal proceedings. Without resolution, they may be restricted from utilizing the group name and other related IP created by SM.
Netizens have expressed confusion over how EXO-CBX has been utilizing SM’s IP without fulfilling contractual payment obligations.
- “The magnitude of this case seems to be escalating.”
- “Aren’t the IP rights owned by SM? So, essentially, they are illegally using another company’s concrete intellectual property.”
- “SM has shown considerable leniency thus far but they need to take stringent measures now.”
- “They intend to compensate for IP usage since the sales percentage seems too hefty, and they haven’t been paying it anyway.”
- “If they’re unwilling to comply with the payment, they should disassociate from EXO.”
- “It’s surprising they weren’t aware?”
- “EXO-CBX has performed using EXO’s songs despite not settling IP fees?”
- “Why did they renew contracts if they had no plans to abide by them?”
- “SM might have to take severe legal recourse given that the misconduct involves touring without settling IP payments.”
Subsequently, EXO-CBX made an official statement concerning the IP fees issue.
We signed an agreement allowing us IP usage last June without stipulated fees. SM didn’t request payment for IP usage, hence it is baseless to claim non-payment. At the press conference, we took the initiative to propose a settlement for IP usage fees, but SM has remained silent. The insinuation of us not paying the IP fee through media play, without being approached by SM, is disappointing.
— INB100
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