March 12, 2019

To: Secretariat of Intellectual Property Strategy Headquarters, Cabinet OfficeCouncil for Intellectual Property Protection on Internet (CIPP)

CIPP Report for Fiscal Year 2018
The CIPP is a private organization established in December 2005 by Rights Holders andtheir organizations as well as Internet service operators with an aim to prevent thedistribution on the Internet of goods that infringe intellectual property rights (IPR).
Since its foundation, the CIPP has been discussing voluntary measures on various issues
surrounding goods that infringe IPR caused by transactions on the Internet throughcollaborative activities among Rights Holders and Internet service operators and by inviting
as observers the Secretariat of Intellectual Property Strategy Headquarters at the Cabinet
Office, National Police Agency, Ministry of Economy, Trade and Industry, Ministry of Internal
Affairs and Communications, Agency for Cultural Affairs, Japan Patent Office, andConsumer Affairs Agency.
We would like the secretary to see this report as a representation of consensus among
Rights Holders (individuals and organizations) and Internet service operators.

1[Overview]
1. A Report from the Effectiveness Verification Committee● For this fiscal year, we have continued to verify the effectiveness of the measuresagainst infringement not only in the Internet auction services (from here on referred to as the“Auction”) but also in the flea market applications (from here on referred to as “Flea-Ma”). At
the same time, we have catalogued and organized the verification results based ongrouping by the occurrence rate of infringing goods in order to clearly show theeffectiveness of voluntary efforts by Rights Holders as well as CtoC (customer-to-customer)
marketplace operators such as Auction and Flea-Mas (from here on referred to as“Platformers”).
● Considering the recent expansion of distribution in the markets where transactions on
the Internet occur, we believe that the effectiveness of verification of measures against
infringement through the CIPP is enhancing for all groups.
● For Group 1, the occurrence rate of IPR-infringing goods has been kept at a low level, asin last fiscal year, as a result of removals of such goods through Platformers’ voluntary
patrols and alerts from Rights Holders.
● As for Group 2, a CtoC Platformer which was categorized in Group 3 in last fiscal year
has been moved to Group 2 as a result of our assessment on its actions to removal requests
in the past three years. If it continues to take similar actions, it is expected to move to Group1.
● As for a CtoC Platformer in Group 3, which was included in the verification from last
fiscal year, the occurrence rate of infringing goods this fiscal year has been improved to thelevel of Group 1's. It is expected that it will continue to do so in the next fiscal year.
2. A Report from the Guidelines Committee● The committee discussed how the “Guidelines for the Prevention of Distribution ofIPR-Infringing Goods on the Internet” (from here on referred to as the “Guidelines”), which
had been revised in fiscal 2017, were implemented and what the latest infringement cases
were.
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● Because good results were produced by implementing the Guidelines, the committee all
agreed that the effectiveness verification should continue to be done based on theseguidelines.
3. A Report from the Third Committee● From this fiscal year, we decided to set up the Third Committee to deal with issues theabove two committees cited for consideration until last fiscal year. The new committee will
review measures to counter IPR-fringing goods at the BtoC (Business to Customer)
marketplace operators (from here on referred to as the “BtoC Platformers”) as well as how to
do the CIPP's public relations.
● In this fiscal year, the Third Committee discussed what future measures should be,considering the BtoC Platformers' characteristic features, such as whether or not there
should be guidelines specifically for them.
● The committee also invited people from relevant government ministries and agencies
such as the Finance Ministry's Custom and Tariff Bureau as observers to be briefed about
the distribution of IPR-infringing goods in cross-border transactions. The discussions wereconducted among those who are involved with implementing effective measures to prevent
the IPR-infringing goods.

31. A Report from the Effectiveness Verification Committee(1) The Effectiveness Verification Method
This year, as in previous years, we set up operational procedures (please see Document 2“Effectiveness Verification Implementation Method”) at the “Effectiveness Verification
Committee,” which consists of those who check the infringement situation as Rights Holders
and their counterparts at CtoC Platformers. We have conducted the effectivenessverification based on these procedures.
① The scope of effectiveness verification
For this fiscal year as well, we decided to examine eight services, including Auction as well
as Flea-Ma services.
②Types of exhibits for effectiveness verification
For this fiscal year, as in the previous year, we divided exhibits of goods for this purpose into
two categories.
(i) “Exhibits of Infringing Goods”
Exhibits of the goods that could be judged as infringement of a copyright or a trademark,based on on-screen texts or images, that would allow Rights Holders to request CtoC
Platformers to suspend such goods' entry.
(ii) “Exhibits of Goods Having a Probability of Infringement”
These are the exhibits of goods that do not directly offer visible evidence of infringement in
the provided information (when checked against the Guidelines, etc.) that would allow CtoC
operators to remove them as infringing goods but have characteristics as in the following:(1) Exhibits of goods which are deemed to be have infringed a copyright or trademark as aresult of appraisal of on-screen texts and images by Rights Holders and if the Rights
Holders make a request for removal, CtoC Platformers can take action for removal (“Exhibitsof Infringing Goods Without Notice”), or (2) exhibits of goods which are deemed as without
doubt being infringing goods if the Rights Holders purchase and appraise the goods based4

on various pieces of information (“Exhibits of Goods Having a High Probability ofInfringement”).
③Grouping of CtoC Platformers
In order to clarify further the achievements of voluntary action by Rights Holders and CtoC
Platformers, we divided CtoC Platformers’ services into Groups 1 to 3 by the occurrence
rate of infringing goods’ exhibits.
(i) Group 1 (The average occurrence rate of infringing goods’ exhibits in the last three years
is less than 2 percent): 6 services belonged to this group(ii) Group 2 (The average occurrence rate of infringing goods’ exhibits in the last three years
is more than 2 percent but less than 10 percent): 1 service(iii) Group 3 (The average occurrence rate of infringing goods’ exhibits in the last three years
is more than 10 percent): 1 service5(2) Verification Results①Auction(i) Occurrence Rate of “Exhibits of Infringing Goods”

2016

Copyright

TrademarkTotal

2017

2018

Group 1# ofverified
items
2,328

% of
Occurrence
Rate
0.04%

# ofverified
items
2,972

% of
Occurrence
Rate
0.07%

# of
verified
items
2,427

% of
Occurrence
Rate
0.16%

Group 2――――――

Group 3――――――

Group 1

1,399

0.79%

2,147

0.09%

2,062

0.44%

Group 2――――――

Group 3――――――

Group 1

3,727

0.32%

5,1190.08%

Group 2――――――

Group 3―――――

―

4,489

0.30%

(ii) Occurrence Rate of “Exhibits of Goods Having a Probability of Infringement”

2016

Copyright

Trademark

Total

2017

2018

Group 1# ofverified
items
2,328

% of
Occurrence
Rate
1.98%

# of
verified
items
2,972

% of
Occurrence
Rate
0.64%

# of
verified
items
2,427

% of
Occurrence
Rate
0.01%

Group 2――――――

Group 3――――――

Group 1

1,399

1.00%

2,147

3.02%

2,062

0.02％

Group 2――――――

Group 3――――――

Group 1

3,727

1.61%

5,119

1.64%

4,489

0.02%

Group 2――――――

Group 3――――――

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②Flea-Ma(i) Occurrence Rate of “Exhibits of Infringing Goods’”

2016

Copyright

Trademark

Total

2017

2018

Group 1# ofverified
items
3,924

% of
Occurrence
Rate
0.00%

# of
verified
items
6,430

% of
Occurrence
Rate
0.26%

# of
verified
items
3,506

% ofOccurrence
Rate
1.06%

Group 2――――

705

0.14%

Group 3

242

0.00%

477

26.20%

76

0.00%

Group 1

3,020

1.09%

5,093

1.06%

4,389

2.96%

Group 2――――

1,083

4.16%

Group 3

673

4.01%

2,302

56.25%

753

0.93%Group 1

6,944

0.48%

11,523

0.61%

7,895

2.12%

Group 2

―

―

―

―

1,788

2.57%

Group 3

915

3.28%

2,779

41.22%

829

0.84%(ii) Occurrence Rate of “Exhibits of Goods Having a Probability of Infringement”

2016

Copyright

Trademark

Total

2017

2018

Group 1# ofverified
items
3,924

% of
Occurrence
Rate
2.80%

# ofverified
items
6,430

% of
Occurrence
Rate
1.07%

# of
verified
items
3,506

% ofOccurrence
Rate
2.31%

Group 2――――7055.25%

Group 3

242

0.00%

477

0.00%

76

26.32%

Group 1

3,020

0.3%

5,093

1.19％

3,837

9.56%

Group 2

――

―

1,083

14.59%―

Group 3

673

4.01%

2,302

3.30%

753

6.11%

Group 1

6,944

1.71%

11.523

1.13%

7,343

6.10%

Group 2

―――

―

1,788

10.91%

2.00%

2,779

1.65%

829

7.96%

Group 3915

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＊There were no services in Group 2 in fiscal 2016 and 2017.

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(3) An Analysis of Verification Results(i) Auction
All Auction services are categorized in Group 1. The occurrence rates of “Exhibits ofInfringing Goods” and ““Exhibits of Goods Having a Probability of Infringement” have been
kept extremely low for this fiscal year as well.
(ii) Flea-Ma
This fiscal year, we added one new service and a total of six Flea-Ma services were verified.
Four among the six are categorized in Group 1. The rate of infringement occurrence has
been low both for “Exhibits of Infringing Goods” and “Exhibits of Goods Having a Probabilityof Infringement.” A service in Group 2 has shown initiative to meet removal requests andother measures over the past three years. From this fiscal year, it has moved up from Group
3 to Group 2. As for a service in Group 3, its infringement occurrence rate itself hasimproved to almost the level of Group 1. It is expected to keep on with similar work in thenext fiscal year.
As we can tell from some service's move to different categories, it has become possible foreach CtoC Platformer to share and accumulate their knowledge to judge the infringing
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goods and measures to take by joining this committee. We can conclude that measures tocombat infringing goods through this committee have become highly effective.
Also, since last fiscal year, we have been discussing the issue of distributing so-called“novelty goods” which infringe trademark rights. As the Guidelines was revised at the CIPP's
Guideline Committee and these were implemented, the occurrence rate of novelty-goods'
equivalent of “Infringing Goods’ Exhibits” and "Exhibits of Goods Having a Probability ofInfringement" has been curbed.
Meanwhile, as for one of the four services in Group 1, the occurrence rate of infringing
goods exhibits has risen quite a lot compared to the other CtoC Platformers. The main
reason is that, because effective countermeasures were taken in the CtoC Platforms with ahigh occurrence rate, a group of overseas exhibitors of infringing goods moved from there toother Platforms with a low occurrence rate.
From now on, we believe that the cooperation between Rights Holders and CtoC
Platformers should be strengthened thorough lively exchange of opinions at the CIPP on
how to combat groups of overseas exhibitors of infringing goods, who we cannot eradicate
by measures for individual CtoC Platformers only. We view that an effective effort is needed
to prevent the distribution of infringing goods in Japan in addition to solving the issues
regarding individual CtoC Platformers.
(4) Others
Some of Rights Holders of copyrights told the CIPP that, because the diversification ofservices provided by CtoC Platformers who participate in the CIPP, a more effective
verification method which reflects the situation on the ground, should be discussed andadopted. This opinion came from the fact that in early days following the setup of the CIPP,
verification effectiveness tests were conducted for auction services only. For the purpose of"prevention of distributing IPR-infringing goods," the verification was conducted starting fromexhibited goods with the shortest remaining time for auction because the purpose will beachieved as long as the infringing goods can be removed before the auction ends.
Meanwhile, in flea market sites, there is no time lag before a purchasing contract is made,unlike auction sites. Therefore, the Rights Holders suggested that the verification should beconducted starting from the newest exhibits to prevent the distribution of IPR-infringing
goods.

11Based on these opinions, from next fiscal year, we believe that methods to obtain more
appropriate verification results will be required, which will cater to a different service type foreach CtoC Platformer.
Some of the Rights Holders of trademark rights told the CIPP that when they made a test
verification on brands which do not share information with CtoC Platformers at present, theyfound that the occurrence rate of "Exhibits of infringing goods" at some brands was nearly
100 percent. Therefore, the Rights Holders said that the CIPP should discuss how to share
information with these brands' goods.
2. A Report from the Guidelines Committee
The Guidelines Committee discussed how “Guidelines for Prevention of Distribution ofIPR-infringing goods on the Internet” (from now on referred to as “the Guidelines") wereimplemented and the latest infringement examples. The Guidelines were revised in fiscal
2016 and in fiscal 2017.
Because good results were achieved when the revised Guidelines were implemented, thecommittee agreed that the effectiveness verification should be made based on the current
Guidelines.
In the Effectiveness Verification Committee, there was a discussion on the occurrence rateof (1) “Exhibits of Infringing Goods Not Yet Informed", which means that they are the exhibits
where Rights Holders can conclude that the copyrights/trademark infringement occurred,judged from the texts and images on screen, and action can be taken if they inform CtoC
Platformers of their request to suspend the goods' entry.
It will be difficult to take action for these exhibits without a request to CtoC Platformers for
stopping the exhibits. Considering this, the committee agreed that it will be desirable inprinciple to take actions following alerts from Rights Holders.
However, if infringing goods can be categorized by type in advance, some of the attendantssuggested that the Guideline Committee could coordinate the Guidelines.
With due consideration to the opinion above, the attendants agreed that the Guidelines
should be avoided from excessive segmentation and the Rights Holders and the CtoC
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Platformers should review the Guidelines, as and when, to make it more clear and effective
for both of them.
3. A Summary of Activities for This Fiscal YearAs we stated so far, it has been confirmed that we continued to be able to force down theoccurrence rate of infringed goods in Group 1 to a low level this fiscal year by promoting a“Japanese approach” in which both Rights Holders and CtoC Platformers respect eachother’s positions and collaboratively stand up against infringers.
In this fiscal year, the newly established Third Committee began to study measures tocombat the IPR-infringing goods in the BtoC (Business to Consumer) Platforms. TheCommittee will continue to do so in the next fiscal year.
We will continue to report the results of our work to Society and at the same time further ourdiscussion regarding measures to tackle new forms of infringements.
We would appreciate it if the government would introduce CIPP’s work to other countries
because the CIPP has made achievements unlike any other in the world. We hope that thegovernment will support our work so that our efforts will be recognized as Japan's de facto
standard of measures against IPR-infringing goods on the Internet.

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Various Statistical Data
■ Number of goods exhibited (Unit: 10,000)▷Total figures of eight official members of the CIPP.
▷To calculate, we measured the number of items on offer at a certain time on a certain day inDecember of the relevant year and then calculated the daily average as “the total number ofgoods exhibited.”▷It is difficult to compare figures year-by-year and see a trend because there are fluctuationsin the number of platformers at the time when the data were taken.
■ Number of self-deletions▷Total figures of eight official members of the CIPP.
▷Two out of the eight platformers do not keep records of self-deletions by the type ofinfringement. Therefore, their figures were added only to the total figures.
▷As in the case of the above table, it is difficult to compare figures year-by-year and discovera trend.
■ Number of deletion requests from Rights Holders▷Total figures from seven out of eight official members of the CIPP.
▷The figures include the deletions of individual items as well as deletions made after
removals of sellers from the service.
▷ Some Rights Holders change services and goods that they focus on during theirsurveillance in order to effectively combat the infringement of IPR. Therefore, it is difficult to14

compare figures year-by-year and demonstrate a trend.

Principles of the Japanese Approach
1. Both parties (Rights Holders and Platformers) must 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 interests
but also the interests of consumers among others.
2. Rights Holders must be made aware that they should enforce their own rights, which
are not automatically protected.
3. Platformers should be aware that they should make active efforts to protect intellectual
property rights for the development of a sound Internet.
4. Both parties shall be aware in the course of the promotion of countermeasures thatthey should agree on the equal importance of the protection of intellectual property rights
and the securement of users’ freedom for business and also the secrecy ofcommunication, and that they should take actions not to undermine the value of either
aspect of business.

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