A World Without Cablevision nor Sony: How Japanese Courts Find Providers of Personal Locker and Content-Sharing Services Liable

Abstract

Japan presents an interesting example of how intermediary liabilities could be handled by courts with primary responsibilities on the provider side, not the end-users. This paper examines a series of Japanese court cases on copyright infringement liability of online service providers, in comparison to the U.S. cases. Combined, it presents a long-overdue broad picture of relevant cases in Japan and the U.S., which is lacking even in Japanese legal scholarship.

The Japanese courts found a number of providers to be direct infringers of copyright when, on the surface, they were merely providing a content-sharing platform or personal locker service. There are two counter-intuitive and critical grounds shown in these Japanese opinions, and they are contrasting to the ones found in key U.S. cases. First, those providers could be regarded to be the direct infringers of the uploaded content because the volition of the infringement could well be at the side of the provider, not its end-users (the volition question). What could otherwise be an unauthorized yet legal private copying by an end-user become illegal copying by a service provider under this line of thinking. There had been a few key criteria cited to determine the volition of the infringement, but one Supreme Court decision came with a note suggesting that there should not be such fixed set of criteria, and the court would engage in normative determination of who should be the uploader of a copyrighted material.

Second, the providers are regarded to be engaged in "public transmission" of copyrighted materials when a personal locker service is available to either unspecific OR a large number of person(s) (the public performance question). The end-user's downloading of copyrighted materials from a personal locker, following this way of thinking, is actually public transmission of those materials by the provider.

The first part of the paper discusses Japanese historical context for the volition question, focusing mainly on the pioneering Club Cat's Eye decision from the 1980's where the owner of a karaoke bar, not the customers who enjoyed singing, was found to be the direct infringers of copyright, and determined to have engaged in the singing. What lies behind this and subsequent decisions is the lack of injunctive remedy for indirect infringement, which, according to a number of legal scholars, pushed courts to find the providers to be directly infringing. Some contrasts with Sony decision are highlighted.

The second and third parts of the paper discuss the recent cases such as MYUTA (multi-device personal music locker service), TV Break (video sharing), and RokuRaku II (remote DVR/routing of TV programs to devices). They highlight difference with such U.S. cases as Cablevision, YouTube, and MP3Tunes, where, the volition and public performance questions are answered in a contrasting manner.

Finally, the paper reviews recent Japanese legal and policy discussions around these issues to examine possible legislative reactions. The cloud computing-friendliness is an important consideration for copyright reform, and the issue of provider liabilities is a concern. Based on several interviews conducted by the authors with Japanese providers and IP/Internet lawyers, these court cases have had actual effect to chill the development of new cloud-based services in Japan. However, no short-term solution is conceivable. There has been a suggestion to introduction of the indirect infringement into the Japanese copyright law, and thereby limiting the scope of actions that could be deemed direct infringement. Yet certain rights holders have been resistant to the idea and expressed the suppport for keeping the current state of the law.

Keywords: intermediary liability, copyright, indirect infringement, cloud computing, public transmission, volition