Thursday, January 24, 2013

How will Amazon AutoRip overcome the difficulty in Japanese Copyright Law?

On January 10th, announced a new service called "Amazon AutoRip." This service is, in essence, giving users MP3 versions of CDs they bought.  What is important for a Japanese IT lawyer is the announcement that Amazon is planning to introduce AutoRip in Japan.

In order to do so, Amazon must overcome the difficulty in Japanese  Copyright Law.  The most important of all is the MYUTA case.  Image City ("IC"), the plaintiff, provided a cloud storage service for cell phone  users called MYUTA.  In a nutshell, users convert the music in their CDs and upload it onto IC's server through the special software IC provided. The music a user uploaded can be used by the user (only the user herself!) with the cell phone of the user.   JASRAC, the biggest music copyright  administration organization, threatened to sue IC saying that MYUTA was in  violation of music copyright.  IC asked for declaratory judgment that MYUTA service was lawful.  The court denied the declaratory judgment saying that MYUTA service violated the copyright.

The reason is very detailed so I will just pick up one of the most  important issues in relation to Japanese cloud service.  In Japanese Copyright Law, there is no general "fair use" clause.   There is something

similar in the field of private usage in that the user's reproduction by himself for private purposes is lawful even without the rights holder's permission (Article 30 of Copyright Law).

Article 30. (1) It shall be permissible for a user to reproduce by himself a work forming the subject matter of copyright (hereinafter in this Subsection referred to as a "work") for the purpose of his personal use, family use or other similar uses within a limited circle”

Time shifting at home like in the Sony Corp. of America v. Universal City Studios, Inc. Case is OK in Japan under this clause.  However, as the court  found the role of IC in uploading and storing the data essential, the court held that IC, not the users, was reproducing.   This means that the condition of reproduction of the user "by himself" in Article 30 is not met.

Under MYUTA court opinion, many of the "personal locker" type cloud  services might be regarded as infringing copyright.   Although this is just a lower court opinion (IC did not appeal.), this has been the "spectre" "haunting" the Japanese cloud industry.

In 2012, a report submitted to the Japanese Agency for Cultural Affairs  pointed out that the committee members for the report "basically agreed to support the opinion to limit the scope of the MYUTA court opinion. (Hon Chosa Kenkyu Iinkai deha … MYUTA jiken ni tsui te, hanketsuno shatei wo genteiteki ni toraeru kenkai wo shijisuru iken de ohmune icchishita.)" But this is just a report, which has no authoritative power.  I personally hope that the legislative action such as the amendment of  Copyright Law would solve this problem but considering the current Japanese political situation, the legislative action may not come so quickly.

Amazon AutoRip is much more dangerous in view of Japanese Copyright Law than MYUTA.  In MYUTA, users were uploading (using the software IC provided) the data.  However, in the Amazon AutoRip case, Amazon is ripping the data and storing it in cloud storage for users.  One way to solve this problem is to obtain license from right holders.  However, there would be a time-consuming negotiation and Amazon might have to pay royalty.  Of course, Amazon can launch the service and hope to win in the Japanese court, but I am not sure whether Amazon will take this risk.

DISCLAIMER: "IT Law issues in Japan" only provides general information about Japanese information technology law and does not, under any circumstances, constitute legal advice. You should first obtain the advice of professional legal counsel who is qualified in Japan before acting or refraining from acting based on this blog.

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