April 27, 2009
To: Secretariat of Intellectual Property Strategy Headquarters, Cabinet Secretariat

Council for Intellectual Property Protection on Internet (CIPP)

CIPP Report for FY 2008

As you have already known as a participant, the CIPP, since FY 2005, has been committed to thecollaborative activities on the private-sector level by inviting the Secretariat of Intellectual Property
Strategy Headquarters, Cabinet Secretariat, National Police Agency, Ministry of Economy, Trade andIndustry, Ministry of Internal Affairs and Communications, Agency for Cultural Affairs, and Japan
Patent Office as observers in order to solve the problem of the distribution of intellectual property
rights (IPR) infringing goods arising from Internet auctions.
We hope this report will help you plan IPR protection policies for FY 2009 as it represents aconsensus of right holders (individuals and organizations) and Internet auction operators.

[Outlines]
1.

Successfully kept the percentage of auctioned infringing goods at a low level as a result of
the implementation of certain measures including voluntary patrols by auction operators andremovals upon notice from right holders.

2.

As a result of the CIPP’s efforts, a downward trend was observed in actions to auction
infringing goods compared with the situation at the time of the establishment of the council.

3.

Made revisions to the CIPP Bylaws and expanded members.

4.

Further promoted the “Japanese Approach.”5.

Further ask the Japanese government to take actions to the countries which manufacture / sell
infringing goods.

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Background to the discussions and changes in actual conditions during FY 2008
This fiscal year’s activities involved the steady promotion of traditional measures centering on
removals as well as the implementation of an effectiveness verification to find outcomes from thepast efforts based on the “Japanese Approach” (for details, see the CIPP Report for FY 2007)
between auction operators and right holders. In addition, we logically derived remaining problems
from an analysis of the verification results and discussed measures for them.

800,000

Trademark(Voluntary Removals)

200,000

Copyright(Voluntary Removals )160,000

600,000

120,000

400,000
80,000200,000

40,00000
2007

80,0002007

2008

Trademark(Removal Reques ts )

2,000

2008

Copyright(Removal Requests)

1,600

60,0001,200

40,000800

20,000400002007Table 1:

2007

2008

2008

Changes in Voluntary Removals by CIPP Participating Operators and Removal Requests from CIPP
Participating Right Holders in Past Two Years i ii

iRemoval requests were directed to five companies: Yahoo! Auction, Rakuten Auction, Bidders Auction, MOBAOKU, and girlsauction. (Note that girls auction was added in December 2007.)
ii
The figures on removal requests from right holders include the cases where individual auctioned items or IDs of the sellers weresuspended.

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1.

Voluntary removals by auction operators and removal requests from right holders(a)Table 2 shows the voluntary removals by auction operators. As in the previous fiscal year,
proper operation was carried out in accordance with the “Guidelines for Prevention of theDistribution of Intellectual Property Rights Infringing Goods” (hereinafter referred to as
the “Guidelines”). Compared with the figures in the previous fiscal year, the trademark andcopyright decreased 223,614 cases and 135,108 cases, respectively.

Trademark

CopyrightTotal

2007

748,416 cases

187,909 cases

936,325 cases

2008

524,802 cases

52,801 cases

577,603 cases

Table 2: Changes in Voluntary Removals by Operators in Past Two Years(b)

Table 3 shows the removals based on removal requests from right holders. The increase
from the previous fiscal year in the trademark was due to the inclusion of removal requests
to “girls auction,” a major mobile auction site, from December 2007. Therefore, it does notmean that the situation was worsening.

TrademarkDesign Right

Total

2005

81,491 cases

18,263 cases

2 cases

99,756 cases

2006

60,929 cases

3,557 cases

5 cases

64,491 cases

2007

30,907 cases

365 cases

2 cases

31,274 cases

2008

46,747 cases

294 cases

0

Table 3:(c)Copyright

47,041 cases

Changes in Removal Requests from Right Holders in Past Four Yearsiii

Table 4 shows changes in total auctioned items in major auction sites, indicating consistentincreases.

Yahoo! Auction

Rakuten Auction

Bidders

MOBAOKU

2007

16.50 million cases

0.53 million cases

2.80 million cases

3.10 million cases

2008

18.17 million cases

1.07 million cases

5.37 million cases

3.34 million cases

Table 4: Changes in Total Auctioned Items in Major Auction Sites iviii

Removal requests related to trademarks in 2008 were from Honda Motor Co., Ltd., Union des Fabricants (whose members include
Louis Vuitton and Gucci), and Chanel Co., Ltd.
iv
The figures on Yahoo! Auction, Rakuten Auction and MOBAOKU represent their daily average values in December while thefigures on Bidders represent the total of auctioned items at the end of the month.

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2.

Effectiveness verification(a)SurveyThis fiscal year we again established an “Effectiveness Verification Committee” consisting of

the individuals who were actually in charge of removal requests / voluntary removals, andcarried out a verification by dividing targets into two groups: those which were judged as
infringement of a copyright or trademark based on their on-screen descriptions and images andwould allow right holders to make suspension requests to auction operators (Table 5), and thosewhich were highly likely to be infringing goods from an objective viewpoint despite the lack ofdecisive factors (Table 6).
Outlines of the implemented verification are as indicated in the annex. As in the previous
fiscal year, the current effectiveness verification did not cover the auctioned items which did
not allow right holders and operators to determine on the screen whether or not they wereinfringing goods, or which were not identifiable before actually buying the items.

TrademarkVerification
Parameter

Copyright

Percentage

Verification
Parameter

Total

Percentage

Verification
Parameter

Percentage

2007

19,268

1.20%

5,063

0.51%

24,331

1.06%

2008

13,334

1.39%

6,740

0.91%

20,074

1.23%

Table 5:Percentages of auctioned IPR-infringing goods meeting the requirements specified in the guidelines

TrademarkVerification
Parameter

CopyrightPercentage

Verification
Parameter

Total

Percentage

Verification
Parameter

Percentage

2007

19,268

0.13%

5,063

0.32%

24,331

0.17%

2008

13,334

0.19%

6,740

1.75%

20,0740.72%

Table 6:Percentages of auctioned items which right holders deemed were highly likely to be infringing goods froman objective viewpoint although the requirements specified in the Guidelines were not met(b)Analysis
As a result of the survey, both trademark- and copyright-infringing goods slightly increasedin number from the previous fiscal year. However, right holders did not feel, from their actualexperience, that infringing goods increased and did feel that at least the protection system wassufficiently maintained. A low percentage was also indicated in the auctioned items which werehighly likely to be infringing goods from an objective viewpoint although the requirements

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specified in the Guidelines were not met. Based on these results of the effectiveness verification,
we believe that it was surely difficult to auction the goods of the right holders who hadpromoted relevant efforts in cooperation with auction operators and had been active inenforcement.
In this verification, we often found that a single seller auctioned multiple infringing goods,
which increased the percentage of auctioned infringing items. In other words, the infringement
rate was kept low enough to allow auctioned items from a specific person to affect the overall
infringement rate.

3.

Revisions to the CIPP Bylaws
Working for several years since its establishment, the CIPP has received offers of participationfrom multiple companies / organizations and inquiries from overseas through concerned parties. We
are proud of this situation because it is a proof that the CIPP has gained a certain status. As this trend
seems to continue, we made revisions to the CIPP Bylaws mainly for the purpose of providing
multiple membership statuses.

4.

New members
Pursuant to the new bylaws, four companies and an organization indicated below are added as

new observers.

girls auction Co., Ltd.

Chanel Co., Ltd.

(girls auction)
Shop Airlines, Ltd.

Association Against Counterfeit Product Distribution(sekaimon)

eLADY Limited.

Conclusion
This fiscal year is characterized by the fact that a sharp decrease is observed in the removals basedon voluntary patrols by auction operators and that the percentage of auctioned infringing items in theeffectiveness verification is still kept at a low level, which is consistent with how right holders feelfrom their actual experience. Considering the growth in the total of auctioned items in auction sites,
it can be said that “we successfully reduced actions to auction infringing items.” Our various
measures have stopped trading / distribution through removals of auctioned items before winningbids were chosen. It is significant that we won the endurance game against sellers of infringing
goods and lessened actions to auction infringing items.
According to the “Status of Arrests on Consumer and Financial Fraud Cases in 2008,” released
this March by Consumer & Environment Protection Division, Community Safety Bureau, National

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Police Agency, in terms of Trademark Act violation cases (such as counterfeit cases), 63.3% ofconfiscated counterfeit goods were smuggled from overseas, and the largest source country was now
China, which overtook South Korea and smuggled most of those counterfeit goods to Japan. TheCIPP is intended to protect the distribution of counterfeit goods or the like in auctions at theprivate-sector level. However, it is still important, in addition to measures at the point of entry into
Japan, that those manufacturing / selling countries will take appropriate actions as drastic measures
to create an environment where criminals will be arrested and punished without fail. We ask theJapanese government to continue pressing foreign governments to actively take necessary actions.
The CIPP will expand its activities by disclosing the English version of this report or otherwise toobtain a de facto standard in problems of intellectual property rights on the Internet for the purposesof improving some auction operators with a high percentage of auctioned IPR-infringing goods, who
newly became observers of the CIPP this fiscal year, as well as winning more support from homeand abroad with respect to the “Japanese Approach” advocated by the CIPP, which is proved to beremarkably effective, in order to ensure sound Internet auctions.

(Reference)Principles of the Japanese Approach

1. Both parties (right holders and auction operators) shall be aware that they should fully
respect each other’s positions and then make collaborative efforts in standing up against
their common enemies, that is, infringers, in order to protect not only their own interest but
also interest of consumers among others.

2. Right holders shall be aware that they should enforce their own rights, which are notautomatically protected.

3. Auction operators shall be aware that they should make active efforts to protect intellectual
property rights for sound development of the Internet.

4. Both parties shall be aware in the course of the promotion of countermeasures that theyshould agree on the equal importance of the protection of intellectual property rights andthe securement of users’ freedom for business and secrecy of communication, and that theyshould take actions not to undermine values of both aspects.

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