Reference
Chronology of the Case
2001
Oct. 1

Law on Management Business of Copyright and Neighboring
Rights comes into force.

Oct. 11

E-License Inc. registers with the commissioner of the Agency
for Cultural Affairs as a copyright management business
operator.

2006
Oct. 1

E-License Inc. commences music copyright management
operations in the field of broadcasting.

2008
Apr. 23

On-site inspection of JASRAC by the Japan Fair Trade
Commission (JFTC).

2009
Feb. 27

Cease-and-desist order issued by the JFTC against JASRAC.

Apr. 28JASRAC requests JFTC hearings.

May 25JFTC decides to commence hearings.

Jul. 27

1st hearing held.

2011
Jun. 113th hearing held.

Hearings process concludes.

2012
Jun. 12JFTC notifies JASRAC of its decision (Note 1) to rescind its
cease-and-desist order.

Jul. 10

E-License Inc. files a legal action with the Tokyo High Court
demanding rescission of JFTC’s decision to rescind the ceaseand-desist order.

Sep. 6JASRAC requests participation in the JFTC Decision
Rescission case.

Sep. 24First oral proceedings of the JFTC Decision Rescission caseheld. Tokyo High Court accepts JASRAC’s participation.

2013
Jun. 7

Third oral proceedings of the JFTC Decision Rescission case isheld. Oral proceedings conclude.

Nov. 1

Tokyo High Court renders judgment (rescinding JFTC’s

decision (Note 2)).
Nov. 13JFTC files a petition for acceptance of final appeal. JASRAC
files a final appeal and a petition for acceptance of final appeal
demanding reversal of the Tokyo High Court decision.

2014
May 20E-License, Inc. files a complaint with the Tokyo District Court
demanding damages and an injunction against JASRAC.

2015
Feb. 25-Party Talks commence.

Apr. 28

Supreme Court renders its judgment (dismissing JFTC’s andJASRAC’s final appeals (Note 3)).→Tokyo High Court
judgment is upheld.→ Rescission of JFTC decision becomes
final.

Jun. 12JFTC notifies JASRAC of its decision to resume the hearings
process.

Jul. 8JFTC decides to allow the participation of e-License Inc. in thehearings process.

Aug. 314th hearing held (1st since hearings initially concluded in2011).

Sep. 175-Party Talks conclude with signing of agreement.

2016
Feb. 1

E-License Inc. and Japan Rights Clearance Inc. merge, andchanges its firm name to NexTone Inc.

Feb. 16

NexTone Inc. withdraws its law suit against JASRAC.

Mar. 4JFTC cancels its decision to allow NexTone Inc. to participate
in the hearings process.

May 3119th hearing held (JFTC investigator’s final statement ofopinion).

Sep. 9JASRAC submits application to withdraw hearings request toJFTC.

Note 1 Decision by the JFTC on June 12, 2012
The JFTC, after directly investigating evidence such as objective usage
data on the use in broadcast programs of works administered by e-License
Inc. in October 2006 when e-License first commenced operations in the fieldof broadcasting, and upon questioning witnesses, decided to rescind its ceaseand-desist order against JASRAC. It cited a failure to identify actual cases
where the use of e-License repertoire was avoided, to reason that the actionsin question (JASRAC’s blanket collection of broadcast royalties) did not havethe effect of excluding (#) other businesses. Because no effect of exclusion
existed, such actions do not constitute private monopolization (violation ofAntimonopoly Act, Article 3) regardless of how the other points may be judged,and thus the cease-and-desist order was rescinded.
(#) One of the four conditions that need to be confirmed in order todetermine if a certain act constitutes a private monopolization (theremaining three being, the existence of artificiality, actual restriction ofcompetition, and whether it is against public interests).

Note 2 Decision by the Tokyo High Court on November 1, 2013
The Tokyo High Court opined that “the various stipulations in theAntimonopoly Act have as their primary aim the realization of publicinterests, but the stipulations can be construed to include the objective ofprotecting the interests of competitors, even if they are the individualinterests of individual competitors,” and recognized the competing operator’s
standing to sue (#1), which in principle had not been allowed until then.
Additionally, regarding the substantial evidence rule (#2), the Tokyo
High Court opined that “although it cannot be said that e-License’s repertoire
had been excluded from usage, it can be concluded that there was urging toexclude such usage. On that point, the recognition of the decision inquestion which concluded that there were no facts to indicate the use of eLicense’s repertoire was avoided, cannot be said to be based on substantiveevidence.” Without demonstrating how the JFTC’s finding of facts had
deviated from reasonableness, the Tokyo High Court produced a newrecognition of facts, recognizing the exclusionary effects of the actions inquestion based on reasoning different from the cease-and-desist order (#3),
and rendered a judgment that overturned the JFTC decision.
(#1) Qualification to take legal action as the plaintiff.
(#2) Stipulation in the Antimonopoly Act stating that the Tokyo High

Court can only make its own finding of facts when, the finding of factsof its decision based on the study of evidence by the JFTC is found to be
deviating from the realm of reasonableness.
(#3) The reasoning for the cease-and-desist order was to say that,
focusing on a popular work administered at the time by e-License,
because even the use of a popular musical work with large demand forusage in broadcast programs was avoided, the actions in question had
an exclusionary effect. In contrast, the Tokyo High Court decision,
while accepting the fact that the popular musical work in question wasused in equal frequency with musical works administered by JASRAC,reasoned that other musical works (musical works that are not popular)
administered by e-License “cannot be presumed to have been used on
similar terms (with JASRAC repertoire),” and rendered a judgment that
acknowledged exclusionary effects for the actions in question.
This new reasoning by the Tokyo High Court was not expressed in theJFTC decision, nor during the trial examination in the Tokyo High Court, andwas not arguable in the Supreme Court either (only legal matters such as
constitutional violations are allowed as reason for appeal). As a result,
JASRAC was not given the opportunity to argue its case.

Note 3 Decision by the Supreme Court on April 28, 2015
The Supreme Court accepted both the JFTC’s and JASRAC’s petitions
for acceptance of final appeal, whose arguments were based on the lack ofstanding to sue (Note 2 (#1)) and violation of the substantial evidence rule(Note 2 (#2)). However, the Tokyo High Court decision was upheld without
passing judgment on either point.
With the Tokyo High Court decision upheld, the JFTC decision (Note1) to rescind the cease-and-desist order was overturned, and the JFTC
reopened the hearings process to examine the remaining issues (see below).

Overview of Issues
IssuesJFTCDecision(Note 1)

Tokyo High
Court Decision(Note 2)

SupremeCourt Decision(Note 3)

1. Exclusionary Effect
Whether the actions inquestion have the effectof making entry into themarket difficult forother business
operators.

Cannot say
there is.

There is.

There is.

2. Artificiality
Whether there is an
artificiality to theactions in question that
goes beyond the normal
realm of competitive
measures.

Because noexclusionary
effect can be
identified,there is noneed to passdecisions on
issues 2 to 5.

Decisionsshould bepassed on
issues 2 to 5
when thehearings
reconvene.

Decisionsshould bepassed on
issues 2 to 5(#) when thehearings
reconvene.
(#) On issue 2,
obiter dicta
was rendered
as follows:
whether there
are “specialcircumstances”
to determinethat there is
no artificiality
is subject toexamination.

3. Substantive
Restriction ofCompetition
Whether the actions inquestion substantively
restrict competition in aparticular field of trade.
4. Public InterestWhether the actions inquestion work contrary
to public interest.
5. Legality of Order
Whether the actions inquestion are necessary
measures for therestoration ofcompetition and arefeasible.

(Issues 1 to 4 correspond to the four conditions regarding the applicability of“Exclusionary Private Monopolization”)