1 “Self Cooking” Service in Japan through Tokyo District Court’s decision of September 30, 2013 AIPLA MWI IP Practice in Japan Committee Pre-Meeting Wednesday, January 29, 2014 Kei IIDA Attorney at Law & Patent Attorney Nakamura & Partners

2 Background Book scanning by owners of books, called “jisui” in Japanese and directly translated into “self cooking” in English, becomes popular, and then, book scanning service by agencies for the owners also becomes popular. Article 21 of the Copyright Act of Japan provides that an owner of copyrights has an exclusive right of reproduction of a work. Article 30, Paragraph 1 provides that the reproduction right shall be restricted for the reproduction by a private user for the private use. In judicial precedents in Japan, in general, the courts do not accept indirect infringement but just accept direct infringement, of copyrights, and, instead, determine a direct infringing actor not just through physical observation but through legal evaluation.

3 Case Tokyo District Court case number Heisei 24 (Wa) Plaintiffs Famous 4 novelists and 3 cartoonists. Defendants 2 book scanning agencies and their representatives. Plaintiffs’ claims for the reason of infringement by book scanning service of the reproduction right Permanent injunction against scanning service for the subject books authored by the plaintiffs. Damages of attorneys fees only. Court’s decision of September 30, 2013 Permanent injunction accepted. Damages partially accepted and partially dismissed.

4 Issues ① ① Whether or not “reproduction” may be found in book scanning in case that the book to be scanned is or will be destroyed. ② ② Who is an actor of “reproduction” in book scanning service. ③ ③ Whether or not the act by a book scanning agency in book scanning service may enjoy the restriction of the reproduction right for the reproduction by a private user for the private use.

5 Court’s Holdings on Issue ① In light of the definition of "reproduction" provided in Article 2, Paragraph 1, Item 15 of the Copyright Act in Japan as including “the reproduction in a tangible form by means of printing, photography, photocopy, sound or visual recording or other methods”, whether or not the book to be scanned is or will be destroyed does not matter in order to find “reproduction” as an electronic file by book scanning.

6 Court’s Holdings on Issue ② In a case where more than one person participated in achieving a tangible result through a sequence of acts comprising a plurality of steps for reproduction, it is reasonable to consider a question of who carried out the reproduction from the viewpoint of who carried out the important act for realizing the reproduction. Then, it is also reasonable to determine the important act and the person who carried it out in light of factors such as the target and way of the reproduction, the content and degree of participation in the reproduction in each individual case.

7 Court’s Holdings on Issue ② (cont’d) Here, in light of the distinctive feature of the reproduction in this case, the operation of converting books into electronic files, which is performed by not users but solely agencies, is determined as the important act of the reproduction. Thus, the important act is determined as being carried out by not the users but the agencies. Further, the important act carried out by the agencies is not considered to be controlled by the users, because it is difficult for the users to perform the detailed works for the operation of converting books into electronic files such as cutting books, scanning books and checking scanned data in light of the costs for facilities, labors, and technical knowledge and experiences. Therefore, not the users but the agencies are determined as an actor of “reproduction” in book scanning service.

8 Court’s Holdings on Issue ③ Since Article 30, Paragraph 1 restricts the reproduction right for the reproduction only “by a private user” for the private use, and here not the users but the defendants are determined as an actor of “reproduction” in book scanning service. there is no legal ground to restrict the reproduction right.

9 Comments In response to the warning letters and the decision, the number of book scanning agencies has greatly decreased. In order to legally provide book scanning service, it will be imperative to make rules on obtaining permissions from copyright holders and returning part of the profits from book scanning service to copyright holders. Many copyright holders such as writers and publishers already established a liaison organization on March 2013 in order to prepare for public discussion on such rules. The organization also basically agreed with the organization of book scanning agencies to discuss such rules. The decision will accelerate the discussion on such rules.

10 Thank you! Kei IIDA Attorney at Law & Patent Attorney Nakamura & Partners Shin-Tokyo Bldg., 6F, 3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo Japan Tel: Fax: