[Translation]*
Holding
The judgment of the court of the second instance shall be reversed.
This case shall be remanded to the Intellectual Property High Court.
Grounds
Regarding reasons for petition for acceptance of the final appeal to this Court (excluding
those not considered) by Yasuhiro Umeda and other counsel for appellant X1, and reasons for
petition for acceptance of the final appeal to this Court (excluding those not considered) by
Masayuki Matsuda and other counsel for appellants X2 and X3, by Hiroshi Okazaki and othercounsel for appellants X4 and X5, by Tetsuo Maeda and other counsel for appellants X6 andX7, by Makoto Ito and other counsel for appellants X8 and X9, and by Yukimasa Ozaki andother counsel for appellant X10.
1.

In this case, the appellants, who are broadcasting organizations, assert against theappellee, who provides a service using a hard disc recorder, called Rokuraku II(“Rokuraku II”), with an Internet communication function, that said service infringes aright of reproduction for the copyrighted works, i.e., broadcast programs, produced byeach appellant, and for the sounds and images incorporated in the broadcasts made byeach appellant (broadcast programs, and sounds and images incorporated in thebroadcasts are collectively referred to as the “Broadcast Programs”) (Articles 21 and 98
of the Copyright Act), and seek damages and injunctive relief against the appellee
reproducing the Broadcast Programs.
While the appellants assert that it is the appellee that reproduces the Broadcast
Programs in providing the abovementioned service, the appellee asserts that the users of
the abovementioned service legitimately reproduce the Broadcast Programs for private
use and that it is not the appellee that reproduces the Broadcast Programs.

2.

A summary of the facts determined by the court of the second instance, i.e., theIntellectual Property High Court (“IP High Court”), is as follows:(1)

Each of the appellants X1, X2, X4, X8, and X10 has a right of reproduction foreach broadcast program provided in the list of copyrighted works attached hereto.
Each of the appellants (other than appellant X6) is a broadcasting organizationand has a right of reproduction for sounds and images incorporated in eachbroadcast provided in the list of broadcasts attached to the judgment in the firstinstance (each broadcast program provided in the list of copyrighted works
attached hereto and the sounds and images incorporated in each broadcast
provided in the list of broadcasts attached to the judgment in the first instance arecollectively referred to as the “Programs”).
Party A used to be a broadcasting organization and used to have a right ofreproduction for one of the broadcast programs provided in the list of copyrighted*

the translation was supervised by Haruaki Murao, an attorney at law in Tokyoworks attached hereto and the same for sounds and images incorporated in one of
the broadcasts provided in the list of broadcasts attached to the judgment in thefirst instance. The appellant X6 is a broadcasting organization that succeeded
the rights and obligations relating to all of Party A’s business other than its groupmanagement business on October 1, 2008 as a result of a company split.
(2)

The appellee manufactures and sells or leases Rokuraku II.
Rokuraku II consists of two devices, one of which can be used as a main deviceand the other as a secondary device (the “Main Rokuraku” and the “SecondaryRokuraku” respectively). The Main Rokuraku includes a built-in tuner for
terrestrial analog television (TV) broadcasts and performs a function of digitizing
and recording received Broadcast Programs and a function of transmitting via theInternet the data relating to a recording. The Secondary Rokuraku has a functionof instructing via the Internet the Main Rokuraku to record Broadcast Programsand thereafter, of receiving and playing the data from the Main Rokuraku relating
to the recordings.
A user of Rokuraku II can, by setting up the Main Rokuraku and the SecondaryRokuraku to communicate exclusively with each other (one-to-one) via theInternet, view on the Secondary Rokuraku located in a different location from theMain Rokuraku the Broadcast Programs recorded by the Main Rokuraku.
Specific procedures are: (i) the user operates the Secondary Rokuraku locatedwith the user to request the recording of certain Broadcast Programs; (ii) thatrequest is relayed to the corresponding Main Rokuraku via the Internet; (iii) theterrestrial analog broadcast received through a television (TV) antenna is inputtedto the Main Rokuraku, the abovementioned Broadcast Programs relating to therequest are automatically digitized and recorded by the Main Rokuraku when theabovementioned request for recording is received, and this data is then transmitted
to the Secondary Rokuraku via the Internet; and (iv) the user plays theabovementioned data and views said Broadcast Programs by operating theSecondary Rokuraku.

(3)

Around March 2005, the appellee commenced the service to lease sets of the MainRokuraku and the Secondary Rokuraku or to sell the Secondary Rokuraku andlease only the Main Rokuraku (collectively, the “Service”), the appellee charging
initial registration fees of 3,150 yen and monthly rental fees of 8,925 yen (for theformer service) or of 6,825 yen (for the latter service).
A user of the Service can view the Broadcast Programs aired in the area where theMain Rokuraku is installed by operating the Secondary Rokuraku to request therecording of said Broadcast Programs.

3.

The IP High Court denied the appellants’ requests on the grounds that the appellee does
no more than provide an environment that facilitates the reproduction by a user of theService even though each Main Rokuraku is installed at a site managed and controlled
by the appellee, and that the appellee shall not be deemed to be reproducing thePrograms.

4.

However, the abovementioned determinations by the IP High Court cannot be approved
for the following reasons.

With respect to the service that enables a person to obtain reproduction of the Broadcast
Programs, when a person who provides such service (the “Service Provider”) under its
management and control inputs broadcasts received by a television (TV) antenna to adevice with the function of reproducing such broadcast (the “Reproduction Device”)
and the Broadcast Programs are automatically reproduced once a request for recording
is sent to said Reproduction Device, it is reasonable to consider the Service Provider tobe the actor of reproduction, even if the person who requests the recording is a user ofsaid service. In other words, it is reasonable to take into account various factors suchas the subject and method of reproduction, and the details and the extent of an entity’sinvolvement in reproduction, and then to determine who can be deemed to be doing thereproducing of copyrightable works. In this case, the Service Provider not only
provides an environment that facilitates the reproduction, but also plays an pivotal role
in realizing the reproduction of the Broadcast Programs using a Reproduction Device byreceiving broadcasts and inputting information relating to the Broadcast Programs to theReproduction Device under its management and control. As such, it is virtually
impossible for the user of said service to reproduce the Broadcast Programs unless theService Provider conducts each of the acts in reproduction, even if the user sends arequest for recording. Thus, the Service Provider can be deemed to be the actor ofreproduction.
5.

Accordingly, there are violations of laws that obviously affect the judgment in the IP
High Court’s decision denying the appellants’ requests on the grounds that the appellee
could not be deemed to be reproducing the Programs without determining how the Main
Rokuraku is managed, etc., even if the Main Rokuraku for the Service is installed at asite managed and controlled by the appellee. The appellants’ claims are with merit andthe IP High Court’s judgment must be reversed. This case shall be remanded to the IP
High Court for further proceedings to determine how the Main Rokuraku is managed,etc.

Therefore, the judgment was unanimously rendered in the form of the Holding.
Seishi Kanetsuki provides a concurrence.

Justice

The concurrence by Justice Seishi Kanetsuki is as follows.
As there are issues related to this court’s precedent with respect to standards of judgment for
the actor of reproduction, etc. under the Copyright Act, I would like to express my opinion.
1.

With respect to the standards, the so-called “Karaoke Hori (‘Karaoke Doctrine’)” fromthe decision by the Third Petty Bench of this Court on March 15, 1988 (Minshu Vol. 42,No. 3, p. 199) has often been referred to, and there are many judicial decisions,
including the judgment of the first instance in this case, that determined the actor ofreproduction in accordance with this doctrine. The “Karaoke Doctrine” recognizes aperson who is not physically or naturally an actor as an actor from a legal perspective,
and is based on a comprehensive consideration focused on the two factors of: (i)management of and control over the act; and (ii) attribution of profit. With thisunderstanding of the doctrine, some critics point out that the doctrine does not haveclear legal grounds, that its requirements are ambiguous, and that the scope ofapplication is unclear. However, when determining the actor of “reproduction,”“performance,” “exhibition,” “distribution,” or any other act set forth in Article 21 andthereafter of the Copyright Act, an investigation merely from physical and natural
perspectives is not sufficient, and a comprehensive investigation from social, economic,

and other perspectives must be conducted, although the interpretation different from theordinary meaning of the language of the law should of course be avoided. I believe
this is a logical legal judgment because the use of copyrighted works involves socialand economic aspects.
Thus, the “Karaoke Doctrine” provides a legal interpretation of legal concepts, which is
nothing more than a general method of legal interpretation. I believe that it is not
appropriate to deem the “Karaoke Doctrine” a special legal theory. Accordingly,factors to be considered may change depending on the type of act in question, and thetwo factors, i.e., management of and control over the act and attribution of profit, should
not be deemed fixed factors. These two factors are merely important factors when
determining the actor from social and economic perspectives. If the “KaraokeDoctrine” has wings as a special doctrine with two fixed requirements, I believe that it
is a significant issue that should be reconsidered.
2.

I understand that the IP High Court’s judgment emphasized the fact that the user
requests the recording, including program selection, at its discretion when identifying
the user and not the appellee as the actor of the recording in this case. It can be said
that this investigation was conducted with a focus on an aspect of the user’s physicaland natural act, i.e., the operation of the recording device. Further, the judgment
concluded that the use of the main device when self-managed by the user is private use
and lawful, that even if the main device is managed by the appellee, the service
provided by the appellee is merely to provide, in place of the user, the technicalenvironments and conditions, required for smooth operation of the main device, and that
this does not change lawful private use into infringing use. However, this view isquestionable in several respects.
As pointed out by this Court, since it is virtually impossible for the user to reproduce theBroadcast Programs even if the user makes a request for recording absent an action ofreceiving the broadcast and inputting the information relating to the Broadcast Programs
to the Reproduction Device, the question of who manages and controls the process ofreceiving and inputting of the broadcast should have great significance in identifying
the actor of the recording. Therefore, I believe it is not reasonable to put emphasis
only on the fact that the requests for recording are made by the user as in the IP High
Court’s judgment, even if investigating the recording process of this case only fromphysical and natural perspectives.
Furthermore, considering the function of Rokuraku II, the service to be provided using
Rokuraku II obviously has great value to those residing overseas who are unable todirectly receive Japanese television (TV) broadcasts at home, etc., and it is believed that
installment and self-management of the main device in a coverage area is not always
easy for such persons in terms of time, effort and cost. That is the very reason why
this kind of business is viable, and it is not reasonable to downplay the social andeconomic significance of the management of the main device. It must be said that toconsider that this system is a mere integration of private use does not reflect reality.
It is also questionable to determine that the service provided by the appellee is only toprovide environments and conditions, and that the fees paid by the user are only
consideration for such service. In this case, what is provided by the appellee is aservice specializing in receiving and recording of television (TV) broadcasts, and theappellee’s business would not be viable without broadcasted television (TV) programs.

Hence, it is natural to consider that the user pays consideration for the service to recordand view the television (TV) programs. In that context, I believe that the attribution of
economic interests relating to exercise of copyrights and neighboring rights should befound. Although, the evaluation of profit attribution is not necessary in this casebecause the appellee can be identified as the actor of recording if the appellee’s
management of and control over the main device is found.
3.

The IP High Court distinguished this case from the abovementioned precedent. Of
course, this case is not identical to said precedent, but it can be understood that said
precedent was based on the idea that it is reasonable to carry out a comprehensive
investigation including social and economic aspects to identify who infringes thecopyrights, rather than conducting such an investigation only from physical and natural
perspectives. I believe that the IP High Court’s judgment lacks such comprehensive
perspective and is not a reasonable interpretation of the Copyright Act.

Justice Seishi Kanetsuki, Presiding
Justice Koji Miyakawa
Justice Tatsuko Sakurai
Justice Tomoyuki Yokota
Justice Yu Shiraki

Appendix
List of Copyrighted Works
1.

X1
Name of Program: Variety Seikatsu Sho Hyakka
Name of Program: Fukushi Network

2.

X2
Name of Program: Odoru! Sanma Goten!

3.

X4
Name of Program: Hiroshi Sekiguchi’s Tokyo Friend Park II

4.

A
Name of Program: MUSIC FAIR 21

5.

X8
Name of Program: Ikinari! Ogon Densetsu

6.

X10
Name of Program: Pet Daishugo! Pochi Tama[This translation was supervised by Haruaki Murao, an attorney at law in Tokyo]