Date of
Judgment: January
20, 2011
Issuing
Authority:
Supreme Court
Level of
the Issuing Authority: Final Instance
Type of
Procedure: Judicial (Civil）
Subject
Matter: Copyright and Related
Rights (Neighboring Rights)
Main
text of the judgment (decision):
1.
The
judgment in prior instance is quashed.
2.
The case
is remanded to the Intellectual Property High Court.
Reasons:
Concerning
the reasons for petition for acceptance of final appeal argued by the appeal
counsels for Appellant X1, UMEDA Yasuhiro, et al., and the reasons for petition
for acceptance of final appeal argued by the appeal counsels for Appellants X2
and X3, MATSUDA Masayuki, et al., the appeal counsels for Appellants X4 and X5,
OKAZAKI Hiroshi, et al., the appeal counsels for Appellants X6 and X7, MAEDA
Tetsuo, et al., the appeal counsels for Appellants X8 and X9, ITO Makoto, et
al., and the appeal counsels for Appellant X10, OZAKI Yukimasa, et al. (except
for the reasons excluded)
1. In this case, the appellants of final appeal,
who are broadcasting organizations, sue the appellee of final appeal, who
provides a service using hard disk recorders with an Internet communication
function, called Rokuraku II (hereinafter referred to as "Rokuraku
II"), alleging that said service infringes the appellants' right of
reproduction with regard to the broadcast programs that they have produced,
which are categorized copyrighted works, and the sounds or images incorporated
in the broadcasts that they provide (these broadcasts and sounds or images
incorporated in the broadcasts shall hereinafter be collectively referred to as
the "broadcast programs, etc.") (Articles 21 and 98 of the Copyright
Act); based on this allegation, the appellants seek injunction against the
appellee's reproduction of the broadcast programs, etc., while also seeking
payment of damages.
The appellants argue that it is the appellee
that performs reproduction in terms of said service, whereas the appellee
contends that it is not the appellee that performs reproduction because the
users of the service perform legal reproduction for their private use.
2. The outline of the facts determined by the
court of prior instance is as follows.
(1) Appellants X1, X2, X4, X8, and X10, as
indicated in the list of copyrighted works attached hereto, respectively have
the right of reproduction with regard to the broadcast programs indicated in
said list. The appellants (except for Appellant X6) are broadcasting
organizations, and as indicated in the list of broadcasts attached to the
judgment in first instance, they respectively have the right of reproduction
with regard to the sounds or images incorporated in the broadcasts indicated in
said list (the broadcast programs indicated in the list of copyrighted works
attached hereto and the sounds or images incorporated in the broadcasts
indicated in the list of broadcasts attached to the judgment in first instance
shall hereinafter be collectively referred to as the "Programs,
etc.").
P was a broadcasting organization, and as
indicated in the list of copyrighted works attached hereto, it had the right of
reproduction with regard to the broadcast programs indicated in said list, and
as indicated in the list of broadcasts attached to the judgment in first
instance, it also had the right of reproduction with regard to the sounds or
images incorporated in the broadcasts indicated in said list. Appellant X6 is a
broadcasting organization, and on October 1, 2008, it succeeded to rights and
obligations in relation to all of P's businesses, except for the group
management business, as a result of a company split.
(2) The appellee manufactures Rokuraku II, and
sells or leases this product.
Rokuraku II can be used as a pair of units, one
functioning as a master unit and the other functioning as a slave unit
(hereinafter Rokuraku II used as a master unit and Rokuraku II used as a slave
unit shall be referred to as "Rokuraku Master Unit" and
"Rokuraku Slave Unit," respectively). A Rokuraku Master Unit
incorporates a television tuner for terrestrial analog broadcasting, and
functions to record the received broadcast programs, etc. by converting them
into digital data, and also functions to transmit the data of recordings via
the Internet. A Rokuraku Slave Unit functions to command a Rokuraku Master Unit
to record via the Internet and then receive the data of recordings from the
Rokuraku Master Unit and play those recordings.
A user of Rokuraku II, through one-on-one
correspondence via the Internet between the Rokuraku Master Unit and the
Rokuraku Slave Unit, can view the broadcast programs, etc. recorded by the
Rokuraku Master Unit, by means of the Rokuraku Slave Units installed at a place
remote from where the Rokuraku Master Unit is installed. The specific process
of this system is as follows. (i) A user operates a Rokuraku Slave Unit at hand
and commands the recording of a specific broadcast program, etc. (ii) The
command is transmitted to the corresponding Rokuraku Master Unit via the
Internet. (iii) The Rokuraku Master Unit, into which terrestrial analog
broadcasts received by the television antenna are continuously input, upon
receiving said command of recording, automatically records the broadcast
program, etc. under command by converting them into digital data, which is then
transmitted to the Rokuraku Slave Unit via the Internet. (iv) The user operates
the Rokuraku Slave Unit at hand and plays said data to view the broadcast
program, etc.
(3) Around March 2005, the appellee launched a
service of leasing a pair of a Rokuraku Master Unit and Rokuraku Slave Unit, or
selling a Rokuraku Slave Unit while leasing only a Rokuraku Master Unit, with
an initial registration fee of 3,150 yen and a monthly rental fee of 6,825 yen
to 8,925 yen (such service shall hereinafter be collectively referred to as the
"Service").
Users of the Service can view the broadcast
programs, etc. aired in the areas where the Rokuraku Master Units are
installed, by operating their Rokuraku Slave Units and issuing a command of
recording of those broadcast programs, etc.
3. The court of prior instance ruled that, even
where the Rokuraku Master Units are installed at places under the management
and control of the appellee, the appellee does nothing more than provide users
of the Service with an environment, etc. making it easy for them to perform
reproduction, and in this respect, the appellee itself cannot be deemed to be
reproducing the Programs, etc.
4. However, we cannot affirm the rulings of the
court of prior instance, on the following grounds.
In terms of the service of making it possible to
acquire reproductions of broadcast programs, etc., where the person who
provides such service (hereinafter referred to as the "service
provider"), under the person's management and control, inputs the
broadcasts received by the television antenna into an apparatus that functions
to perform reproduction (hereinafter referred to as "reproduction
apparatus"), so that the reproduction apparatus, upon receiving a command
of recording, automatically reproduces broadcast programs, etc., it is
appropriate to construe that the service provider is the party who performs
reproduction, even if the command of recording is issued by the user of the
service. More specifically, when identifying the party who performs
reproduction, it is reasonable to examine who it is that reproduces the
copyrighted work in question, while taking into consideration various factors
such as the object to be reproduced, the method of reproduction, and the details
and extent of involvement in performing reproduction. In the case assumed
above, the service provider does not only develop the environment, etc. for
making it easy to perform reproduction, but also carries out the essential
actions in the process of reproducing broadcast programs, etc. with the use of
a reproduction apparatus, that is, under its management and control, receiving
broadcasts and inputting the information concerning the broadcast programs,
etc. into the reproduction apparatus. But for such actions carried out by the
service provider at the time of reproduction, it would be impossible for the
users of the service to reproduce broadcast programs, etc. even if they issue a
command of recording. In this context, there are sufficient grounds for regarding
the service provider as the party who performs reproduction.
5. The court of prior instance, without making
any findings as to the status of management of the Rokuraku Master Units in
terms of the Service, dismissed the appellants' claims on the grounds that the
appellee cannot be deemed to be reproducing the Programs, etc. even though the
Rokuraku Master Units are installed at places under the appellee's management
and control. According to our reasoning shown above, such determination of the court
of prior instance contains violation of laws and regulations that apparently
affects the judgment. The appeal counsels' arguments are well-grounded, and the
judgment in prior instance should inevitably be quashed. For further
examination as to matters including the status of management of said
apparatuses, we remand the case to the court of prior instance.
Therefore, the judgment has been rendered in the
form of the main text by the unanimous consent of the Justices. There is a
concurring opinion by Justice KANETSUKI Seishi.
The concurring opinion by Justice KANETSUKI
Seishi is as follows.
As for the criterion for identifying the party
who performs reproduction, etc. in the meaning under the Copyright Act, this
case is connected with issues such as the relation with this court's past
judgments. I would like to state my views on these issues.
1. When identifying the party who performs
reproduction, the criterion generally called the "karaoke rule" has
been frequently applied since it was indicated in this court's past decisions,
i.e. the judgment of the Third Petty Bench of the Supreme Court of March 15,
1988 (Minshu Vol. 42, No. 3, at 199). There are not a few lower court
decisions, including the judgment in first instance of the present case, which
made a finding of the party who performs reproduction, etc. in accordance with
this rule. Under the "karaoke rule," a person who physically or
naturally cannot be regarded as performing a certain act is identified as the
party who performs the act from a normative perspective, and an overall
determination should be made, focusing on two factors, namely, management and
control over the act, and attribution of profits. At the same time, this rule
faces criticisms for its lack of a definite legal basis or its ambiguous
requirements and unclear scope of applicability. However, in the course of
identifying the party who performs acts set forth in Article 21 and the
subsequent clauses in the Copyright Act, namely, "reproduction,"
"performance," "exhibition," "distribution,"
etc., it is not sufficient just to observe these acts from physical or natural
aspects?although it must be avoided to put an interpretation that is far from
the ordinary meaning of the respective terms in the legal text?, but it is
necessary to observe those acts comprehensively, including social and economic
aspects. This is a matter-of-course requirement in making a determination on a
legal issue, because the use of a copyrighted work is an act that has both
social and economic aspects.
Thus, the "karaoke rule" is a
normative interpretation of a legal concept, and is nothing more than an
ordinary approach of legal interpretation. It may be inappropriate to consider
this rule as some special legal theory. Therefore, the factors to be taken into
consideration would vary according to the type of act in question; the two
conventional factors, i.e. management and control over the act, and attribution
of profits, should not be treated as fixed factors. In most cases, these two
factors have significance only in the course of examining who it is that
performs the act from social and economic perspectives. Nevertheless, the
"karaoke rule" appears to have taken on a life of its own, as if it
were an original legal theory which involves fixed requirements, and this is
exactly the point that I find in the "karaoke rule" that needs to be
corrected.
2. When finding that it is not the appellee but
the users that perform the recording, the judgment in prior instance presumably
placed an emphasis on the point that the users freely issue commands to execute
operations for recording, including selection of broadcast programs. This is an
observation of the act of reproduction while focusing on the operation of the
recording device, that is, the physical and natural aspect of the user's act.
The judgment in prior instance determined that the act of reproduction is
deemed to be legal private use if the users themselves manage the master units
that they use, and even where the appellee manages the master units, the
service provided by the appellee only work to develop, on behalf of the users,
the environment, conditions, etc. that form the technical basis for enabling
the master units to exert their functions smoothly, and that such legal private
use would not change into illegal use due to the service in question. However,
I find some questions with this point of view.
As pointed out by the court opinion, unless
someone carries out actions of receiving broadcasts and inputting the
information concerning the broadcast programs, etc. into the reproduction
apparatus, it would be impossible for the users to reproduce broadcast
programs, etc. even if they issue a command of recording. In this context, who
it is that manages and controls the process of receiving and inputting broadcasts
is an issue of extremely great importance in the course of identifying the
party who performs recording. Therefore, even only for the purpose of observing
the process of recording in question from physical or natural aspects, it may
be inappropriate to place emphasis only on the point that the command of
recording is issued by the users, as in the judgment in prior instance.
In addition, in view of the functions of
Rokuraku II, it is obvious that the service provided by means of this system is
of high value of utility for persons living outside Japan, who cannot directly
receive Japanese television broadcasts in their home, etc. For such persons, it
may be troublesome and costly and therefore not very easy for such persons to
install and manage by themselves the master units in the areas where Japanese
television broadcasts are receivable. This is what makes this type of business
work, and it is inappropriate to make light of the social and economic
significance peculiar to the management function of the master unit. It runs
counter to reality to regard the system in dispute as an accumulation of acts
of mere private use. Furthermore, it is also questionable to consider that the
service provided by the appellee does not go beyond the bounds of the development
of the necessary environment, conditions, etc., and the users pay fees in
exchange for such benefits. What is provided by the appellee is a service
designed specially for receiving and recording television broadcasts, which
means that the appellee's business would not work unless broadcast television
programs are available. It is natural to determine that the users pay fees in
exchange for receiving the service by which they can record and view television
programs. In this sense, it may be an affirmable view that economic profits
arising from the use of the copyrights or neighboring rights are attributed to
the appellee. Nevertheless, in this case, the determination as to the
attribution of such profits does not affect the conclusion, because the appellee
can be judged to be the party who performs the recording in question if it is
found to exercise the power of management and control over the master units.
3. The judgment in prior instance stated that
this case differs from the aforementioned leading case in terms of factual
backgrounds. This determination is itself a matter of course, but in that
leading case, this court probably based its conclusion on the view that when
identifying the copyright infringer, it is appropriate not only to observe the
act in question merely from physical and natural aspects, but also to make an
overall observation including social and economic aspects. The determination of
the court of prior instance lacks such an overall perspective and cannot be
accepted as a reasonable interpretation of the Copyright Act.
(This translation is
provisional and subject to revision.)