TPP11 & EPA with EU started – Effects on IPR in Japan

by Kozo YABE (UASA & HARA –  Japan)

Since the TPP11 (Trans Pacific Partnership) finally came into effect on December 30, 2018 in Japan, several key amendments became effective especially regarding the Copyright Law (CL) and the Trademark Law (TL). Such amendments include a) statutory damages, b) extension of copyrighted works, c) royalties for a sound source by streaming on broadcasting/cable broadcasting, d) private complaint no longer required for criminal prosecutions, and e) further protection on access control technology. The same extension of copyright term was adopted by the EPA (Economic Partnership Agreement) between the EU and Japan.

After the U.S. withdrew from the original TPP in November 2017, the other 11 member countries maintained the negotiation under Japan’s initiative and concluded to execute it on March 8, 2018. Japan ratified the TPP11 and prepared the local bills of legislation by July 2018. By October 31, 2018, 6 member countries including Australia ratified and prepared local legislation. Subsequently, the TPP11 became effective on December 30, 2018 while all amendments of the Japanese CL and TL were effective on the same date.

The most contentious point was statutory damages. The Supreme Court precedent keeps compensation-based damages only with specified ways for the assumption of such damages regarding IPR. No punitive damages are allowed. Nevertheless, the TPP11 requires that members at least establish an alternative way for statutory damages or “additional” damages including punitive damages. The new CL adopted the damage claim assumption to take the most expensive amount in the calculation of a possible royalty corresponding amount at the discretion of a copyright owner and court judgment. In case of the new TL, any ordinary cost for obtaining/maintenance can be considered statutory damages. This was added to other assumptions of damage calculation.

Compared with statutory liquidated damages, there was less argument in adopting an extension of the copyright term from 50 years to 70 years after the death of a copyright work author. The extension of the copyright term has been gradually extended in the past. But it was still 50 years after an author’s death (with the exception of 70 years for movie works) before the TPP11 became effective. The amendment is consistent with Japan’s attitude towards the EPA between the EU and Japan which became effective on February 1, 2019. The negotiation on the EPA was concluded in December 2017 and was already ratified in 2018.

A royalty right for the secondary use of a commercial sound record was originally only recognized by the CL of Japan even though Japan had joined the WIPO Performance and Phonograms Treaty (WPPT). In order to change this outdated situation after the TPP11, the new CL adopted the same right even for a sound source by streaming on broadcasting/cable broadcasting.

The private complaint requirement is now no longer adopted by the CL in order to start a criminal prosecution of copyright infringement. Although the criminal penalty is severe with imprisonment with labor for up to 10 years or a fine of up to 10 million JPY (300 million JPY for a corporation), it was subject to a private complaint for long time.

The last is the adoption of restriction on access control protection of copyright works. Prior to this amendment, the CL focused on more technology protection of unauthorized copying with a criminal penalty without a private complaint. In addition to this, the new CL after the TPP 11 even began technology protection of access to copyrighted works because the recent mode of copyrighted works is now more concerned with methods of activation from authorized servers rather than sales of copyrighted work packages. However, this will gradually resemble the same kind of regulation under the Unfair Competition Prevention Law. It should be necessary to clarify the borders of applications between them.

Despite the recent crisis concerning global free trade, Japan maintains a free trade friendly policy regarding IPR.