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Characters and Merchandising Rights

Characters and Merchandising Rights Masayasu Ishida*

Director, Toppan Printing Co.,Ltd.

1. Prologue ______________________________________________ 1

2. Characters and Merchandi ing Rights____________________ 2 s

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3. Japanese Law Relating to Merchandising Rights _________ 3

4. Intelle tual Property and Merchandising Rights __________ 5 4-1. Points to Understanding Merchandising Rights through

Copyright Law 7

4-2. Points to Understanding Merchandising Rights through

Trademark Law 10

4-3. Points to Understanding Merchandising Rights through

Design Law 12

5. How to A quire Intelle tual Property for Character ______ 12

6. Points of Cauti n When to Use Characters_______________ 14 6-1. Contracts Licensing or Assigning Characters 16

6-2. Standard Contracts Concerning Merchandising Rights 16

6-3. Example of a General Contract 19

6-4. Points of Contracts Licensing Merchandising Rights 21

7. Claim to Right and Defen e ___________________________ 22

8. Penalties (unde Criminal Law and Civil Law) for CopyrightInfringemen _________________________________________ 25

* Director of the Public Relations Division, Legal Division and International Legal Center of TOPPAN PRINTING CO.,LTD. Received Master’s Degrees both Law and Commercial Science from Nippon University. A lecturer for Law and Intellectual Property postgraduate courses at Keio and Sapporo Universities. “Characters and Multi-media” is one of his many published works.


1. Prologue

“Characters” are an indispensable part of effective advertising often found essential in sales strategy.

“Characters” refers to heroes/heroines and animals appearing in comic books, for example.

When walking the street, we can see people carrying

bags and wearing shirts printed with character images in an effort to show a distinctive fashion sense. Furthermore, packages of food products bear comic heroes or heroines making products more familiar. Character goods like these have come into the market in a wide range of fields, including toys, stationery goods and video games.

In contracts drawn to trade character goods, the term

“merchandising rights” is often used. Along with the spread of characters, the term has become generally recognized today.

“Merchandizing rights,” in short, are rights entitling one

to use characters for goods based on rights such as copyrights and trademark rights. For example, pictorial representations of a character are subject to copyright. If the name of a certain character is registered as a trademark, it gains a trademark right. If one wishes to use a character for one’s goods, licensing must be gained from the copyright owner, trademark owner and any other rights holders. Licensing of this kind only allows merchandising of the character. Contracts to gain licensing, as explained above, are called “merchandising contracts.”

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Besides characters, the images of professional athletes and famous people may be subject to merchandising rights. A reason why these likenesses are subject to merchandising rights is that they effectively enhance the vitality of product advertisement. Rights to use the images of public figures for product advertisement are called “publicity rights” or “image rights.”

Along with the recent rapid development of a full-fledged

multimedia society, information-digitizing technologies have become subject to merchandising rights. In connection with internet development, new business systems for project planning and the like are also being produced.

Despite the above, there is not necessarily any law

concerning merchandising rights, which may specifically be called the “Merchandising Rights Law.” Such regulations are structured according to various laws, including Copyright Law, Trademark Law, Unfair Competition Prevention Law and Civil Law. Bilateral contracts are important in determining the set up of merchandising rights concerned.

2. Characters and Merchandising Rights

In product planning, adopting and using characters to smoothen communications with consumers and eventually contribute to profit growth is an important issue. When using characters, intellectual property rights, particularly merchandising rights, are important. The use of characters for goods and others products is usually handled by contracts concerning merchandising rights.

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In many cases, characters are entitled to copyrights and, where the character is used for products, one must license use of the character in advance from its rights owner. Of course, characters may also be granted trademark rights or copyrights. In these cases, in addition to the merchandising contract, one must license the use of the trademark right and the right to work the copyright from the respective owners.

As described above, merchandising rights refer to rights

to use characters and the like. Generally, “merchandising rights” are called “rights to use human-made creative works for goods and other products.” In other words, these are rights to use the images, figures and names of characters or the names and images of actual persons, which have acquired goodwill (power to appeal to customers).

3. Japanese Laws Relating to Merchandising Rights

At present, the term “merchandising rights” is not written as such in any Japanese legal provisions. The substantial contents of merchandising rights are determined by several laws, including Copyright Law, Trademark Law, Design Law, Unfair Competition Prevention Law and Civil Law. Therefore, it is important to bear in mind that behind merchandising rights, there exist various related regulations.

The major laws relating to merchandising rights for

characters are listed below. (1) Copyright Law

The purpose of this Law, by providing for rights of

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authors and related rights for works as well as performances, phonograms, broadcasts and wire diffusions, shall be to secure rights protection to authors and creative parties having regard to a just and fair application of these cultural products, thereby contributing to cultural development.

(2) Trademark Law

The purpose of this Law shall be to ensure management of business reputations for persons using trademarks by protecting the trademarks, and thereby contributing to industrial development and protecting of consumer interests.

(3) Design Law

The purpose of this Law shall be to encourage the creation of designs by promoting their protection and utilization in order to contribute to industrial development.

(4) Unfair Competition Prevention Law

The purpose of this Law shall be to prevent unfair competition and provide for compensation for damages and ensure adequate implementation of related international agreements and contribute to the healthy development of a national economy.

(5) Civil Law

This Law stipulates that ①private rights shall be in accordance with public welfare, ② exercising rights and fulfilling obligations shall be conducted honestly and fairly and ③ the abuse of rights shall be prohibited. In addition, it is stipulated that any party, infringing on the rights of another with or without intent, shall take responsibility for compensating losses.

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Laws Relating to Merchandising Rights

Trademark Law

Design Law

Unfair CompetitionPrevention Law

Civil Law

Copyright Law

4. Intellectual Property and Merchandising Rights

As mentioned above, the term “merchandising rights” does not appear in any Japanese legal provisions at present. Nor, is the term used in Japanese laws. However, “merchandising rights” is quite often used in the real business world.

In many cases, merchandising rights relate to

intellectual property. Therefore, the major aspects of intellectual property closely related to merchandising rights shall be explored. First of all, intellectual property involves a wide variety of rights which are at the same time, expected to diversify in the future.

Rights legally set forth at present are as shown in the

following figure. However trade secrets (know-how) are not

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defined as intellectual property. They are important informational assets with proprietary values (intellectual property) and are protected under the Unfair Competition Prevention Law.

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Key Map of Intellectual Property

IntellectualProperty

Rights Relating to the Creation of Intellectual Activity

Patent Rights

Utility Model Rights

Design Rights

Copyrights

Neighboring Rights

Rights Relating to New Plant Varieties

Right to Use of Circuit Layout of Semiconductor Integrated Circuits

Rights Relating to Distinction of Business

Product Trademark Rights

Service Trademarks Rights (Service Mark)

Trade Name Rights

Other

4.1 Points to Understanding Merchandising Rights through Copyright Law

The purpose of Copyright Law is to protect works. In many cases, characters are protected under Copyright Law

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making Copyright Law important to merchandising rights. Here, major points from the Copyright Law will be introduced in Questions and Answers form.

(1) Who is the proprietor of rights?

It is the author of a work, who usually acquires rights to the work.

(2) When do the rights of an author come into existence?

The rights come into existence upon the creation of the related work. It is called the non-formality principle.

(3) What are such rights applicable to?

Author’s rights are generated with respect to such works as literature, music and arts.

(4) Is there any work which is not entitled to protection

under Copyright Law? Laws and ordinances as well as news reports are not

protected under Copyright Law.

(5) What specific rights is the author of a work recognized to own? The author of a work is granted moral rights and a

copyrights (intellectual property).

(6) What does the moral right of an author include? It is a right entitling protection of the moral interests of

an author, including the rights to make work public, to determine indications of name and to preserve the integrity of works.

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(7) What is a copyright (intellectual property)? It is a right granted to protect proprietary interests of an

author, including the right to reproduction, performance and execution, cinematographic presentation, public transmission, recitation, exhibition, distribution, transfer, lending, translation, adaptation, etc. These rights are generally called “rights comprising copyright.”

(8) How is it conceivably possible to use copyrighted works

free? The Copyright Law provides for the free use of a

copyrighted work within a limited scope of conditions such as the reproduction of a copyrighted work for private-use and the reproduction and partial citation of a copyrighted work at a library.

(9) How long does a copyright last?

In principle, a copyright expires 50 years after the death of the author. However, it varies, depending on the type of work. No duration is set for the termination of protection of moral rights.

(10) Is it possible for a copyrighted work to change

ownership? When a copyright (intellectual property) is assigned or

succeeded after the death of an auther, its ownership changes. However, the moral right of an author can be neither assigned nor succeeded.

(11) When, or in what case, does a copyright terminate?

It terminates upon expiration of copyright protection in the absence of a successor.

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(12) What happens to a copyright when the owner dies?

The copyrights and the moral rights of an author must be considered separately. A copyright can be succeeded but the moral right concerned cannot. However, the unrestricted, free use of a copyright is not allowed.

(13) What differences exist between assigning and licensing

a copyright? A copyright and a moral right are different in nature.

In case of assignment, a copyright is transferred. But not in the case of licensing.

(14) When can a copyright be registered?

A copyright can be registered when it is obtained through assignment. By registering a copyright, the assignee gains rights effective against a third party.

(15) What is a neighboring right?

A neighboring right is not granted to the author of a copyrighted work but other people who play a major role in the transmission and communication of the copyright. At present, performers, phonographic record producers, broadcasting stations and wire diffusion organizations are entitled to this particular right.

(16) What act is considered as the infringement of a

copyright? Among other things, the unauthorized use of a copyright

without permission from its owner is considered as an act of copyright infringement.

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(17) How is a foreign copyrighted work handled? A work copyrighted overseas is protected in Japan as

long as it meets protection standard set by international treaties.

4-2 Points to Understanding Merchandising Rights through Trademark Law

(1) A trademark is a mark used with respect to goods or services. Trademark rights are granted by registration after going through examination procedures as prescribed in Trademark Law. The degree of legal protection is determined accordingly.

(2) The owner of a trademark right may exclusively use the registered trademark for any designated goods or services. The duration of a trademark right is 10 years, and is renewable.

(3) By examining appearance (similarity in exterior shape), appellation (similarity in reading) and concept (similarity in meaning), it may be determined whether a trademark right is being infringed upon.

(4) Provided relief measures resolving infringement are listed below. ① The right to demand an injunction ② The right to demand compensation for damages ③ The right to demand compensation for unfair profits ④ Criminal penalties In general, the name of a character itself is not eligible

to legal protection under Copyright Law. When it is

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registered as a trademark under Trademark Law, the registered trademark is entitled to legal protection.

For example, if only the name of a character is used,

even without the illustration, for goods without prior permission, it is deemed an act of infringement. Thus, it is subject to rights such as calling for an injunction to suspend its use and demanding compensation for damages. In order to acquire such rights, an application for a character name must be filed with the Patent Office in advance and granted a trademark right.

If it is not registered as a trademark, conversely, its use

may be claimed as an act of infringement by another party with the same name registered.

If a character name is not registered as a trademark but

it is widely known, however, it may be entitled to a right to require an injunction calling for the suspension of its use or a right to demand compensation for damages as a well-known indication under the Unfair Competition Prevention Law. Even where it is hard to properly apply Unfair Competition Prevention Law, unauthorized use may qualify demands to compensation for damages resulting from illegal acts under Civil Law.

4-3 Points to Understanding Merchandising Rights through Design Law

(1) Designs refer to creative uses in decorations, designing and industrial designs. A design is entitled to a certain degree of legal protection once it is established and registered through procedures as prescribed in Design

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Law. (2) A design as used in Design Law means a “shape, pattern

or color or any combination thereof in an article which produces an aesthetic impression on the sense of sight.” (Article 2(1) of the Design Law)

(3) The rights owner may exclusively use the registered

design or designs similar thereto for a duration of 15 years from its establishment and registration.

(4) Relief measures addressing design right violations are

provided as listed below. ① The right to demand an injunction ② The right to compensation for damages ③ The right to compensation for unfair profits ④ Criminal penalties

5. How to Acquire Intellectual Property for Characters

Copyrights, trademark rights and design rights are important as intellectual property when applied to characters.

To acquire these kinds of intellectual property, they need to comply with respective laws.

As Copyright Law adopts no formality principle, nothing

is required to get copyrights protected. Meanwhile Trademark Law and Design Law, both employ formality principles, requiring the filing of an application for the registration of each character.

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(1) Acquisition of Trademark Rights

A trademark registration must first be filed with the Patent Office where it will be examined to determine whether the trademark satisfies prescribed requirements in granting trademark rights.

A trademark right takes effects upon being registered in

the Trademark Registry. This right is effective nationwide, providing the owner with exclusive ability to use the registered trademark with respect to all its designated goods or services.

When applications are made for similar trademarks in

Japan, the earliest application is granted the right, in principle. Therefore, it is advisable to file an application for trademark registration as soon as possible when the use of the latter is decided.

① Trademarks qualifying for registration

Each request for trademark registration (trademark specimen) must be accompanied by four copies. ② Designated goods or services

A request must sort out and indicate all designated goods or services used by the trademark in accordance with set classes.

In the case designated goods or services are not clear in

content and scope from their indication in the request or fail to match set classes of goods and services, a trademark may not be granted.

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(2) Acquisition of Design Rights To acquire a design right, a registration application must

be filed with the Patent Office and is subject to an examination so as to determine whether it satisfies all prescribed requirements.

At the Patent Office, applications filed throughout the

country are collected for examination. All related procedures, from filing to the grant of a design rights, are carefully handled through consultations and communications with applicants.

A person wishing to obtain a design right is required to

file a request indicating contents accompanied by a drawing indicating the design intended for registration (a photograph, model or sample may be substituted). (Article 6 of the Design Law)

6. Points of Caution When to Use Characters

Characters can be personalities and animals appearing in comics for example. When a character is used, it is usually handled under a contract for practical merchandising rights.

In many cases, characters are entitled to copyrights. In

order to use a character in advertisements and/or produce three-dimensional figures based on a character, it is necessary to obtain merchandising rights licensing to the character from its author before commercialization. Incidentally, merchandising rights refer to the rights to use characters, and the like for goods.

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Pictures of a character and its original illustrations are

protected as “aesthetic works” under Copyright Law. A TV cartoon or an animation movie is produced based on an illustration as such is entitled anew to a copyright as a “movie work.” In contrast to the original illustration, this copyright is considered to be a secondary copyrighted work.

In order to use a secondary copyrighted character, it is

necessary, according to Design Law, to obtain authorization for use of both the original work and the secondary work.

On the other hand, when including pictures or original

illustrations on a CD (compact disk) cover, the cover itself is a copy of the original work. Therefore, it is necessary to obtain authorization from the authors for use. If the right to maintenance of integration is waived in this case, it may become possible to arrange the secondary CD for resale.

In reality, however, the licensing business is usually

executed by merchandising rights management companies. In this case, each licensor does not necessarily have all rights to license and, therefore, a merchandising rights management company determines the characters and the extent of their copyrights. In other words, it is best to grasp the scope of licensing rights of each licensor in advance.

6-1. Contracts Licensing or Assigning Characters Once merchandising using a character or personality is

decided upon, it is necessary to obtain permission to use the character and the photographic image of the personality, namely, “licensing.” A party granting a license is called the

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“licensor” while the party obtaining it is called the “licensee.” The extent of licensing is determined by a contract. A

verbal agreement is a kind of “contract” and does not necessarily require the same preparation, making it less effective. In order to write down and confirm specific arrangements to prevent a dispute from arising later, it is necessary for parties concerned to make up and sign a contract.

This is not limited only to licensing characters and also

applies to where a character is created upon request by a client and the copyright is also assigned (sold). In such cases, it is important to leave evidence of who the copyright belongs to and how much was paid to compensate for the assignment. All matters related to assignment of the copyright should be recorded to prevent a dispute from arising later.

6-2. Standard Contracts Concerning Merchandising Rights

By Japan Merchandising Licensors Association

Merchandising Rights Licensing Contract

Parties to Contract: Licensor: Name

Address Licensee: Name

Address The licensor is the owner (or manager) of a copyright for

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characters including in and a licensing right to merchandise based thereon and any goodwill (applying power to customers or business credits) gained (or potentially gainable) by the character, its name, shape and accompanying story (customers appealing power or business credit).

The licensee wishes to use the character and its name

for goods being manufactured and sold, in order to promote sales.

The licensor is willing to license the merchandising

rights to use the character and its name for such goods. Therefore, the licensor and the licensee conclude a

contract setting forth terms and conditions as hereinafter defined.

(Licensing of Merchandising Rights) Article 1: (1) The licensor shall license to the licensee an exclusive

right (hereinafter called the “merchandising right”) to manufacture and sell, during the term of this contract, goods as designated in this contract, using reproduction or other representation of the licensor’s character and its name (hereinafter called the “character”) indicated in the appendix to the contract.

(2) The “designated goods” shall be the goods agreed on between the contracted parties in accordance with the classes of goods set by the licensor for the purpose of licensing the character merchandising rights, with details indicated in the appendix to the contract.

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(3) The licensor shall reserve the right to license the character merchandising rights to a third party to allow the use of characters for goods which are not directly in competition with the designated goods of the licensee.

(4) Based on this contract, the merchandising rights the licensor grants to the licensee shall belong to the licensee whereas the licensee shall not, without a prior written agreement from the licensor, assign or reassign the character merchandising rights to a third party nor mortgage it for the sake of a third party.

(Territory) Article 2: (1) The merchandizing rights the licensor grants to the

licensee under this contract are based on Copyright Law in Japan and execution of the merchandising rights by the licensee shall be limited within Japanese territory.

(2) The licensee shall not, directly or indirectly, export its goods manufactured based on this contract to any countries where the licensor has a copyright and manages the character.

(Term of Contract) Article 3: (1) This contract shall take effect upon the date the

contracted parties sign and shall be good for years or the contract’s termination date.

(2) The parties to this contract may, upon agreement reached months prior to the expiration of the contract term and renew the contract for another years.

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The followings are headings and do not contain section contents.

Article 4: (License Fee) Article 5: (Account Reports, Record Inspections,

Stamped Certification) Article 6: (Quality Control) Article 7: (Sales Promotion) Article 8: (Copyright and Source Presentations) Article 9: (Manufacturing and Selling Designated Goods) Article 10: (Trademark and Design Registration) Article 11: (Currents in TV broadcasting) Article 12: (Third Party Infringement) Article 13: (Licensee Infringement on a Third Party) Artilce 14: (Termination) Article 15: (Conditions after Termination) Article 16: (Dispute Resolution)

6-3. Example of a General Contract

Contract This contract between Company A (hereinafter called the

“licensor”) and Company B (hereinafter called the “licensee”) shall set forth the following terms and conditions for the licensing of a copyright and other rights to the character “ 〇〇〇〇,” owned by the licensor.

Article 1: Licensing Use The licensor shall allow the licensee to use, under the

terms and conditions set forth, a character for advertising

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campaigns issued and distributed by the licensee (hereinafter called “subjective articles”)

Article 2: Compensation (1) The licensee shall provide a total sum of yen

(not including excise tax) to the licensor as compensation for the licensing based on the preceding article.

(2) The licensee shall deliver immediately, once this contract is concluded or renewed, the sum licensing fees as set in the preceding paragraph to a bank account designated by the licensor.

Article 3: Provision of Reproduction Proof The licensee shall, in a timely manner, after the

conclusion of this contract, provide reproduction proof of the character concerned to the licensor.

Article 4: Licensing of Use to Third Parties

The licensor shall not, during the term of this contract, grant licensing to any third parties to allowing use of the character for advertising within .

Article 5: Infringement of Right

In the case where a claim based on Copyright Law is raised against the character used by the licensee under this contract, the licensor shall settle the problem by independent responsibility.

Article 6: Term of Contract

This contract shall be valid for one year from (date). However, it shall be automatically renewed for another year upon request by either the licensor or the licensee provided

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up to one year before expiration as long as no objections exist. The same shall apply later.

Article 7: Consultations

The licensor and the licensee shall faithfully execute this contract. Any dispute arising from matters set forth in the contract or any doubt over its interpretation shall be smoothly resolved and settled through consultations.

IN WITNESS WHEREOF, the parties hereto have

consented to the agreement signed and sealed by duly authorized representatives in duplicate, copies of which the two parties each shall keep in their custody.

On this th day of (month), (year) Licensor: Licensee:

6-4. Points of Contracts Licensing Merchandising Rights

In general, merchandising rights refer to rights to a personality or animal (character) appearing in comic or TV programs as applied to goods in order to increase profits. At present, a merchandising right is not legally recognized as a clearly-defined right. However, many characters constituting the core of merchandising rights contracts correspond to works entitled to legal protection under Copyright Law. In practice, therefore, a merchandising right licensing contract is similar to a copyright licensing contract in many aspects.

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7. Claim to Right and Defense

(1) Points of Caution Concerning the Ownership of Copyrights and Characters When obtaining licensing to a character, it is important

to clearly distinguish between ownership and a copyright, two completely different rights. When obtaining licensing, it is necessary to take care of both ownership (rights to use articles, dispose of articles, and gain profits) and a copyright (the rights to reproduction, etc.).

When the original copy of a character is photographed

with the owner’s permission and pamphlets thereby showing the characters are produced, problems may still occur even if the owner’s permission had been obtained. The owner and the copyright-holder of a character may be different persons and, in such cases, the character may not be reproduced and used without permission from the copyright owner. Therefore, once permission is obtained, photographing the original character without the owner’s consent is a violation of the ownership of the original copy.

(2) Points of Caution for the Production and Sales of Comic

Character Dolls The act of producing and selling dolls representing a

comic character without permission from the copyright holder is deemed to be a violation of Copyright Law.

Under Copyright Law, the act of reproducing a

copyrighted work in a different form, for example, by making a two-dimensional shape three-dimensional, is considered an infringement on “translation rights,” as contained in

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copyrights. “Translation rights” applies to creating new works based on a copyrighted character, not using the character as it is copyrighted.

Criteria are not concretely clearly set forth to determine

what degree of similarity constitutes an infringement. Usually, a work at hand may be considered an infringement so far as it has features basically identical to those of the original despite partial and slight differences. It would carry a common impression as a whole and would be widely recognized by purchasers to be the original character.

(3) How to Obtain Rights to Use Copyrighted Characters

Before deciding to use a character entitled to a copyright, it is necessary to negotiate a copyright-licensing contract with the copyright holder of a character. If use of a copyrighted character is decided before negotiations for that purpose start, all related planning would inevitably have to start again from the beginning should it become impossible to obtain the desired licensing. The following steps are generally taken in order to obtain licensing.

① Confirmation of manners of use

To enter licensing negotiations, the targeted use of a copyrighted character and the applied period for licensing must be confirmed.

② Confirmation of the copyright holder and licensing negotiator

The owner of a character intended for use is not necessarily limited to the character’s creator. There may be cases where the copyright is transferred through succession or assignment. Therefore, it is necessary to

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confirm who the current owner of a character’s copyright is.

There may also be cases where a representative is appointed to conduct negotiations for licensing. When negotiating with a representative, it is important to solidly confirm the existence of the representative’s rights.

③ Conclusion of a licensing contract Negotiations for licensing copyrighted characters

are conducted through steps ① and ② above and, where an agreement is reached on basic terms and conditions, a licensing contract is concluded.

④ Relationship with ownership of character Apart from copyright problems, the use of a

copyrighted character, may be subject to issues concerning ownership. In the case a character is photographed for printing, it is necessary to obtain permission from the character’s owner. This issue concerns character ownership. If a film showing a character and its prints are your legal possessions, problems related to ownership should not arise since the owner’s permission is not necessary for photographing the character. In reality, however, an owner may raise a claim because the character’s commercial reproduction and use may lower the market value, among other things. Since the case is irrespective of photographing permission, it is clearly an issue beyond those concerning copyrights and ownership.

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8. Penalties (under Criminal Law and Civil Law) for Copyright Infringement

If a copyrighted work is used without permission in principle, there may be a case of copyright infringement. If a copyrighted work is modified without the creator’s permission or an anonymous work is distributed under the author’s true name without proper authorization, it may infringe on the moral rights of the creator.

Penalties for copyright infringements and moral rights infringements are set forth as listed below. Similar penalties apply to infringements on neighboring rights.

Complaint-based crimes are those that cannot be

prosecuted unless a complaint is filed by the victim. Penalties under Civil Law and Criminal Law are respectively related to a period of effect (prescription) subject to expiration and one set by prosecution. In cases of copyright infringement, the right to demand compensation for damages resulting from illegal acts expires after three years. For crimes punishable with imprisonment or fines, prosecution prescription becomes applicable after three years, making them not prosecutable.

* Expiration prescription refers to rights owned that expire after not executing them for a certain period of time. Prosecution prescription, meanwhile, refers to criminal acts not prosecuted during a set period of time ultimately become unprosecutable.

(1) Relief measures under Copyright Law (Civil Remedy)

① The right to demand an injunction (Article 112)

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② The right to demand compensation for damages (Articles 114 and 709 of Civil Law)

③ The right to demand compensation for unfair profits (Articles 703 and 704 of Civil Law)

④ The right to demand measures to restore reputation. (Articles 115 and 116)

* Infringement acts (Article 113) (Notes 1 and 2) (2) Penalties under Copyright Law (Criminal Penalties)

① The crime of infringing on rights (Article 119) ② The crime of infringing on personal profits (Article

120) ③ The crime of circumventing technical protective

measures (Article 120bis) (Note 3) ④ The crime of misrepresenting an author’s name

(Article 121) ⑤ The crime of illegally reproducing phonographic

records (Article 121bis) ⑥ The crime of not indicating the source of goods

(Article 122) * Crimes prosecutable subject to complaint (Article

123) * Penal provisions (Article 124)

(Note 1) Infringement acts The act of willfully interpolating or eliminating

information concerning rights is deemed to be an act of infringement.

Rights management information covers an author’s moral rights, copyrights and neighboring rights and includes information on licensing fees (Paragraph 21, Section 1, Article 2). The fact that it has become possible to apply

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rights management information to copyrighted goods and their copies through electronic processes, facilitating discovery and proof of their illegal use sets the scene of its uses.

(Note 2) Special provision for assignment rights passed to

the public The act of transferring the original copy or copies of a

copyrighted work to the public in good deliberate faith is deemed to be a copyright infringement. (Article 113bis).

(Note 3) The crime of circumventing technical protection

measures In recent years, a way to technically protect matter,

called “copy protection” has been developed, contributing to the prevention of the unauthorized copies of copyrighted works, such as music CD’s and DVD’s.

However, on the other hand, devices and programs have

also come to be developed to circumvent such technical protection, leading to even the sales of such copies. Therefore, it is stipulated that the act of manufacturing and selling devices or programs that nullify technical protection is subject to criminal penalties.

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