17 Laws Applicable to Transfer and Licensing Contracts ofIndustrial Property Rights(*)
Research Fellow: Atsuko YAMAGUCHI
Conflict of laws rules for juridical acts as specified in Article 7 and later provisions of the Act on General
Rules for Application of Laws (hereinafter referred to as the "General Rules Act") are applied to contracts
concerned with transfer and licensing of industrial property rights (limited to contractual issues). Rulings anddiscussions have not sufficiently been accumulated concerning how conflict of laws rules in the absence of choiceof law, especially Article 8(2) of the General Rules Act based on the theory of characteristic performance, should
be interpreted for industrial property right contracts. The interpretation thus has yet to be clarified. For thisreason, I would like to clarify the interpretation of the abovementioned rules in a bid to secure the safety ofinternational transactions. I first analyze related arguments under the Rome Convention and the Rome I
Regulation: both of these, as well as the General Rules Act include conflict of laws rules for contracts based on
the theory of characteristic performance. With a view to legislative considerations, additionally, I also compare
and analyze private international law principles and legislative proposals on intellectual property rights as
prepared by four research groups. Based on these analyses, I give my personal view on the abovementioned
conflict of laws rules of Japan.

I

Introduction

Laws applicable to the formation and effectsof contracts concerned with transfer and licensingof industrial property rights1 are determined inaccordance with the Act on General Rules forApplication of Laws (hereinafter referred to as
the General Rules Act). This act is the main
source of Japanese private international law. The
rules for contracts under the act are summarized
as follows: Under Articles 7 and 9 of the act,
parties to a contract can choose a governing lawof their contract. In the absence of such choice, agoverning law is determined according to Article
8 of the act. The latter article, particularly
Paragraph 2 based on the theory of characteristic
performance, must be interpreted for eachcategory of contract. But the manner in which theprovision should be interpreted for industrial
property right contracts has not sufficiently been
discussed. Rulings on the interpretation have yet
to be accumulated. However, since these types ofcontractsfeaturecomplicated,diversified
relationships between rights and obligations ofparties to the contracts and are difficult tointerpret Article 8(2) of the General Rules Act forsuch contracts, the interpretation is further
required to be clarified for safe transactions.

As a matter of course, if a governing law of acontract has been chosen, Article 8 of the act may
not be applied and its interpretation may not be atissue. But parties to a contract are also allowed tochoose no governing law. Even if the parties havechosen a governing law, the choice may not fallwithin “a choice of law under Article 7 of theGeneral Rules Act”. In such cases, a governing
law may be determined in accordance with Article
8. This means that as far as there are cases where
no governing law is chosen, it is very significant
to clarify the interpretation of conflict of laws
rules for these cases.
In this study, therefore, I analyze the conflictof laws rules for contracts under the General
Rules Act from the viewpoint of contracts
concerned with transfer and licensing ofindustrial property rights focusing on the rules
for cases where parties to the contracts have notchosen any governing law of their contracts. The
analysis refers to related arguments in Europethat has had rules similar to the Japanese General
Rules Act and active discussions on the matter.
With a view to legislative considerations as well, I
also compare and analyze private internationallaw principles and legislative proposals on
intellectual property rights as prepared by four
research groups. Based on these analyses, I(*) This is an English translation of the summary of the report published under the Industrial Property Research
Promotion Project FY2013 entrusted by the Japan Patent Office. IIP is entirely responsible for any errors in
expression or description of the translation. When any ambiguity is found in the English translation, the original
Japanese text shall be prevailing.

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finally give my personal view on theabovementioned conflict of laws rules of Japan.

Ⅱ Laws applicable to Contracts:
Act on General Rules forApplication of Laws
I would like to give an overview of theconflict of laws rules for the formation and effectsof contracts in Japan. Articles 7 to 9 of theGeneral Rules Act provide for the rules.
Article 7 allows parties to a contract tochoose a governing law of the contract at the timeof conclusion of the contract. Article 9 allows theparties to change the governing law ex post facto.
In the absence of a choice of law under
Article 7, the formation and effects of a contract
shall be governed by the law of the place withwhich the contract is most closely connected at
the time of conclusion of the contract (hereinafter
called the law of the place with the closest
connection) under Article 8(1). Since Article 8(1)represents an approach rather than a rule, thisprovision is clarified by Articles 8(2) and (3),namely presumption rules2. The indicated placein accordance with these provisions shall be
presumed to be the place with the closest
connection. Article 8(2), which is applied tojuridical acts causing claim-obligation relationshipin general, including contracts on industrial
property rights, states that the law of the habitualresidence of the party providing the characteristic
performance (hereinafter referred as thecharacteristic performer) shall be presumed to be
the law of the place with the closest connection.
Article 8(2) is based on the so-called
characteristic performance theory. A legislative
document for the General Rules Act explains thetheory as an approach where the principal place ofbusiness for the party providing the characteristic
performance (a performance that can become astandard to separate some type of contracts fromthe other types) is considered the place withwhich the contract is most closely connected 3 ,based on and generalizing a view that the place ofbusiness for the merchant is the place with which
the contract is most closely connected because
the center of gravity of the contractual
relationship for commercial acts is situated on theside of the party undertaking professional acts.
The characteristic performance is generallyinterpreted as performance for which thepayment is due in case of bilateral contracts 4. In asales contract, for example, the delivery of goods
is the performance for which the payment is due,and then the former performance is viewed as thecharacteristic performance. Therefore, the law of
the habitual residence of the seller providing thecharacteristic performance is presumed to be thelaw of the place with which the sales contract ismost closely connected 5.
The characteristic performance can be
identified in this way. In an exchange or joint
venture contract under which both parties are
required to provide equal performance each other,
however, no characteristic performance can be
determined6. In this case, the law of the placewith the closest connection is determined under
Article 8(1). If the law of the habitual residence ofthe characteristic performer is identified for the
relevant contract but the contract is more closely
connected with another place, the presumption
under Article 8(2) can be rebutted. In this case,the contract shall be governed by the law of theother place as the law of the place with theclosest connection7.
The formation and effects of contracts
concerned with transfer and licensing ofindustrial property rights are governed by laws
determined under the above rules. The problem
here is the interpretation of the theory ofcharacteristic performance. What is thecharacteristic performance of transfer andlicensing contracts of industrial property rights?
Who is the characteristic performer? Can thecharacteristic performance be identified? These
questions have not been sufficiently discussed orclarified in Japan 8 . Therefore, I analyze
discussions on these questions under theConvention on the law applicable to contractual
obligations opened for signature in Rome on 19
June 1980 (hereinafter referred to as the “RomeConvention”9) and the Regulation (EC) 593/2008of the European Parliament of the Council of 17
June on the law applicable to contractual
obligations (hereinafter referred to as the “Rome
I Regulation”10). Based on the analysis, I clarify
the interpretation of Japan’s rules.

Ⅲ Rules on Law Applicable toContractual Obligations: Rome
Convention and Rome I Regulation
Before considering discussions under theRome Convention and Rome I Regulation, I
overview the rules provided in them on the law
applicable to contractual obligations as far as they
are directly related to this study.
The Rome Convention allows the parties to acontract to choose a law applicable to the contract

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(Article 3(1), first sentence). In the absence ofsuch choice, the convention provides that thecontract shall be governed by the law of thecountry with which it is most closely connected(Article 4(1), first sentence). On the law of thecountry with which it is most closely connected,
the convention adopts the theory of characteristic
performance11 and presumes that the law of thecountry where the characteristic performer has
its habitual residence, which is determined under
the theory, is the law of the country with which
the contract is most closely connected (Article
4(2)). If the characteristic performance cannot be
determined, Article 4(2) may not apply (first halfof Article 4(5)). If it appears from thecircumstances as a whole that the contract ismore closely with another country, thepresumption in Article 4(2) may be disregarded(second half of Article 4(5)) and the law of theother country may apply.

be governed by the law of the country with which
the contract is most closely connected (Article
4(4)). The Rome I Regulation has no specificprovisions for the principle of the closest
connection but uses the concept of “the closest
connection” in two contexts in Article 4(3) and(4). The general principle of the closest
connection thus emerges as a key principle in
Article 4 of the Rome I Regulation, similar to theRome Convention15.
In the absence of choice of law, as explained
above, governing laws of contracts pertaining totransfer and licensing of industrial property rights
are determined under the theory of characteristic
performance which both the Rome Convention
and the Rome I Regulation depend on. In thissense, they have adopted the same rule as Japan’s
General Rules Act. Chapters IV and V analyze
discussions on the interpretation of the theory ofcharacteristic performance under the rules.

Meanwhile, the Rome I Regulation, like theRome Convention, recognizes the freedom of theparties to a contract to choose a governing law of
the contract (Article 3(1), first sentence). In theabsence of such choice, the Rome Convention isbased on the interaction between the generalprinciple of the closest connection andconcretization of that principle through the theoryof characteristic performance, while the Rome I
Regulation does not adopt the principle of theclosest connection but provides for a catalogue of
conflict of laws rules for various types ofcontracts with rigid connecting factors (Article
4(1) of Rome I Regulation) 12 . If the relevant
contract cannot be classified as being one of thespecified types, however, the law of the country
where the characteristic performer has its
habitual residence governs the contract under
Article 4(2) (which adopts the theory ofcharacteristic performance while not being apresumption rule) 13 . Contracts relating tointellectual or industrial property rights are notcovered by the specified types of contracts listed
in Article 4(1)14 and are subject to Article 4(2).

Ⅳ Theory of Characteristic Performance:
Traditional Interpretation

In the absence of choice of law, a governing
law of a contract may be determined as explained
above. If it is clear from all the circumstances of
the case that the contract is manifestly moreclosely connected with another country than thatindicated in Article 4(1) or (2), the law of theother country may apply to the contract (Article
4(3)). If the governing law cannot be determined
pursuant to Article 4(1) or (2), the contract may

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separate some type of contracts from the othertypes,” the performance must be determined foreach type of contract rather than for eachindividual contract. Contracts related tointellectual or industrial property rights can bedivided into two types. One type represents
contracts having as their main object the transfer
or license of intellectual property rights, such astransfer and licensing contracts. The other typecovers contracts having the transfer or license of
intellectual property rights as ancillary duty of
one of contracting parties , such as franchise anddistribution contracts. Here, it may beappropriate to conceive the former type ascontracts related to intellectual property rights.
What is the characteristic performance fortransfer and licensing contracts of industrial
property rights? In Europe, it is widely acceptedthat “the transfer of industrial property rights by
the transferor” under transfer contracts and “thegrant of the right to use or exploit the subject
matter of industrial property rights by thelicensor (hereinafter referred to as grant oflicense) under licensing contracts are interpreted
as the characteristic performance 16 . Therefore,
the transferor may be the characteristic
performer for transfer contracts of industrial
property rights and the licensor for licensing
contracts of the rights.

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There are different opinions about licensing
contracts. The first opinion says that the grant oflicense by the licensor is the characteristic
performance, with the licensor being thecharacteristic performer, irrespective of whether
a duty to exploit the licensed rights is imposed on
the licensee under a contract 17 . The second
opinion says that while the licensor under asimple licensing contract 18 is the characteristic
performer as noted in the first opinion, thelicensee’s performance is the characteristic
performance, with the licensee being thecharacteristic performer, under a complicatedlicensing contract that the licensee is obliged to
exploit the licensed rights 19 . The third opinion
says that while the licensor is considered thecharacteristic performer under a simple contract
as noted in the first and second opinions, thelicensee’s country of business is presumed to be
the country with which the contract is moreclosely connected under a complicated licensing
contract, because the center of gravity of thecontractual relationship is transferred to thelicensee from the licensor20. Some people havecriticized the second opinion for determining
either the licensor or the licensee as thecharacteristic performer depending on whether
the licensee is required to exploit the licensed
rights, noting that such standard depends on
substantive national law21 and also that whether
the licensee has such duty under a contract
should be determined by application andinterpretation of the governing law of thecontract22.
The three opinions agree that under a simple
licensing contract, the licensor is thecharacteristic performer. This point has beenendorsed in rulings and legislations, according toearlier studies 23 . But they are divided over acontract under which the licensee is required to
exploit the licensed rights, as explained above.
The three opinions are divided into two positions-- interpreting the duty of the licensee to exploit
the licensed rights as shifting the center ofgravity of the contractual relationship from thelicensor to the licensee (second and third
opinions) and rejecting such interpretation (first
opinion). The second and third opinions, thoughcommonly endorsing the shift, are still different.
The second interprets the habitual residence ofthe licensee (as the characteristic performer) as
the country with which the contract is mostclosely connected under the theory ofcharacteristic performance, while the third views
the licensee’s habitual residence as the country

with which the contract is more closely connectedunder the principle of the closest connection.
Therefore, whether the duty of the licensee to
exploit the licensed rights is interpreted as acause of shifting the center of gravity of thecontractual relationship from the licensor to thelicensee and if so, whether the interpretation
should be based on the theory of characteristic
performance are at issue in interpreting thecharacteristic performance under this kind ofcontract.

Ⅴ New Interpretation of Theory of
Characteristic PerformanceAs
notedabove,
thecharacteristic
performance must be determined for each type ofcontract. Since the diversity of contracts related
to industrial property rights makes it difficult toclassify all such contracts into specific types,
specify the characteristic performance for eachtype and identify the contracting party who
carries out the performance as the characteristic
performer, however, Professors Fawcett &Torremans and Professor Shoichi Kidana24 haveinsisted on the view that the characteristic
performance should be identified looking at
contracts on a contract-by-contract basis insteadof a type-by-type basis 25 . Nevertheless,Professors Fawcett & Torremans argues that asingle characteristic performance cannot be
determined for complicated contracts. Under thisargument, Article 4(2) in the Rome I Regulation
does not apply but the law of the protecting
country applies as the law of the country withwhich the contract is most closely connected in
Article 4(4) in the Regulation under the principleof the closest connection26. Meanwhile, Professor
Kidana insists that the law of the protecting
country should apply to the complicated contracts,
based on either the view that such country ismore closely connected with the relevant contract
than the law presumed under the characteristic
performance theory or the view that the parties
to the contract have chosen implicitly the law of
the protecting country as the governing law of thecontract27.
These arguments indicate that Professors
Fawcett & Torremans and Professor Kidana aretrying to refrain from or avoid dependence on the
traditional characteristic performance theory indetermining the governing law of contracts
related to industrial property rights (including
complicated contracts). This approach is seen in
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legislative proposals to be analyzed in the next
chapter.

Ⅵ Analysis on Private International
Law Principles and Legislative
Proposals
As analyzed above, there are disputes overwhat the characteristic performance is fortransfer and licensing contracts of industrial
property rights, how to identify the characteristic
performance and where the center of gravity of
the contractual relationship is for such contracts.
Amid such disputes, four research groups
prepared and released private international law
principles regarding intellectual property (rights),
including ”Intellectual Property: Principles
Governing Jurisdiction, Choice of Law, andJudgmentsinTransnational
Disputes”(hereinafter referred to as the ALI Principles28), a“Principles of Private International Law onIntellectual Property Rights (Joint Proposal
Drafted by Members of the Private International
Law Association of Japan and Korea)”(hereinafter referred to as the Waseda
Principles29) and ”Conflict of Laws in Intellectual
Property: The CLIP Principles” (hereinafterreferred to as the CLIP Principles 30 ), andlegislative proposals made by the Transparency
Working Group (hereinafter referred to as theTransparency Proposal 31 ) (hereinafter these arecollectively referred to as private internationallaw principles and proposals). They include
conflict of laws rules for governing laws ofcontracts related to intellectual property. In orderto decide whether any legislative action isrequired for Japan’s conflict of laws rules for acontract, especially a contract related to industrial
property rights, I compare and analyze therelevant rules proposed by the four researchgroups as shown in the private international law
principles and proposals from two viewpoints:
whether the theory of characteristic performancehas been adopted while its interpretation is still at
issue, and, which law is proposed as a governing
law for a licensing contract under which thelicensee is obliged to exploit the licensed rights
while views under the theory are divided oversuch contract.
First, conflict of laws rules for contracts inthe private international law principles andproposals adopt the principle of party autonomy
as Japan’s General Rules Act does 32 . In theabsence of choice of law, the three sets of privateinternational law principles specifically provide

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the country with which it is most closely
connected. The legislative proposal also proposesa rule based on the principle of the closest
connection 33. The principles or proposals do notinclude any provision like Article 8(2) of theGeneral Rules Act to generalize the characteristic
performance theory as a method for determining
the place with the closest connection. Instead,the ALI Principles and the Transparency Proposal
explicitly specify the country with the closest
connection. The Waseda and CLIP Principles
provide that for each individual contract after
determining the party where the center of gravityof the contractual relationship is located, based on
factors listed in the respective sets of principles34,
the habitual residence of the party at which thecenter of gravity is located shall be determined as
the country with the closest connection35.
In this way, these principles and proposals
seem to refrain from depending on thecharacteristic performance theory. But according
to comments on the ALI Principles, the“residence of the transferor or licensor” in the
Principles will often correspond to the residenceof the characteristic performer 36 . The “rightholder’s habitual place of residence” in theTransparency Proposal is explained as aconnecting factor depending on the theory ofcharacteristic performance 37 . The methods for
exploring the country with the closest connection
under the Waseda and CLIP Principles consider
the habitual residence of the party on which thecenter of gravity of the contractual relationship issituated to be the country with the closest
connection, taking over a major feature of thetheory of characteristic performance38. Therefore,
these principles and proposals may be interpreted
as developing the characteristic performance
theory into new rules to address disputes orproblems over the interpretation of the theory for
intellectual property contracts39, rather than as an
attempt to eliminate the theory.
Next, the four research groups propose
different conflict of laws rules for governing lawsof licensing contracts under which the licensee isobliged to exploit the licensed rights. But the
principles and proposals apparently agree that the
habitual residence of the licensee is notnecessarily determined as the country with theclosest connection only due to the duty. For
example, the ALI Principles provides that thecontract is presumed to be most closely
connected to the State in which the licensor
resided at the time of the execution of the

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contract40. While whether the licensee is required
to exploit the licensed rights may be considered
in deciding whether the presumption could be
rebutted, according to comments on the ALI
Principles, the reason for presuming theresidence of the licensor as the State with theclosest connection41 apparently indicates that the
duty itself may not greatly influence the decision.
Even in this case, therefore, the contract would
be governed by the law of the State in thelicensor resided at the time of execution of thecontract. The Transparency Proposal provides atiered approach. The contract shall be governedby the law of the country granting the intellectual
property right that is the subject matter of thecontract. If there are multiple countries granting
the intellectual property right that is the subject
matter of the contract, the contract shall begoverned by the law of the place of the habitualresidence of the rights holder 42 . However, if
another country has a closer connection to thecontract than the country granting the intellectual
property right or the place of the habitualresidence of the rights holder, the contract shallbe governed by the law of that other country43.
Given any specific situation presumed by the
proposal for applying this provision 44 , it may
apparently be unlikely that any other country thanthat provided above could be determined as thecountry with the closest connection only due tothe existence of the duty of the licensee to exploit
the licensed rights.
Meanwhile, both the Waseda and CLIP
Principles cite the duty of the licensee to exploit
the licensed rights as one of factors fordetermining the habitual residence of thelicensee as the country with the closest
connection 45. Both apparently interpret the duty
as shifting the center of gravity of the contractual
relationship to the licensee. Given the method of
considering the factors listed in both principles46,
however, the licensee’s habitual residence may be
determined as the country with the closest
connection only if the duty is accompanied byother factors shifting the center of gravity of thecontractual relationship to the licensee, andmoreover, either by the absence of factors
shifting the center to the licensor or by thepresence of such factors that do not affect thedecision that the center of gravity is situated on
the side of the licensee.
Therefore, both principles may indicate moreor less that the duty of the licensee to exploit thelicensed rights is not the only factor for
determining the licensee’s habitual residence as

the country with the closest connection.

Ⅶ Personal View as Conclusion
Finally, I would like to build on the above
analysis to provide my personal view about aninterpretation of conflict of laws rules thatgoverns transfer or licensing contracts ofindustrial property rights in the absence of choiceof law.
First, the transfer or licensing contracts ofindustrial property rights is usually interpreted as
falling under the case where “only one of theparties is to provide a characteristic performance
involved in a juridical act” as provided by Article
8(2) of the General Rules Act. In this case, the“characteristic performance” in the paragraphrefers to “the transfer of rights by the transferor”
under the transfer contract of industrial property
rights or “the grant of license by the licensor”
under the licensing contract of the rights, leading
to the law of the country where the transferor or
licensor has its habitual residence being
presumed as the law of the place with thecontract is most closely connected . This meansthat the licensor should be always recognized as
the characteristic performer of the licensing
contract irrespective of whether the licensee isrequired to exploit the licensed rights. Then,considering various factors of individual contract,
if the contract is more closely connected withanother country than with the licensor’s habitualresidence country, the law of the other country
may be interpreted as the law of the place withthe closest connection under Article 8(1) of theact.
As explained above, I provided my personalview as an interpretative proposal rather than as alegislative proposal on the conflict of laws rules.
This is because I believe that we can determine
an appropriate governing law of transfer andlicensing contracts of industrial property rights
through the application and interpretation of theexisting Article 8 of the General Rules Act even
without any new legislative action for thefollowing reasons: First, the characteristics of thetransfer or licensing contracts of industrial
property rights, namely their diversity andcomplexity, fit Article 8’s structure and function(to ensure the foreseeability with the theory ofcharacteristic performance in Article 8(2) and tosecure the specific appropriateness with theprinciple of the closest connection in Article
8(1) ). Second, the proposed rules in the privateinternational law principles and proposals are not

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performance, although the rules were preparedeven amid disputes over the interpretation of thetheory.
Next, in my view, the characteristic
performance of transfer and licensing contracts
of industrial property rights should be identified
for each contract type, namely under the
traditional approach. At the same time, I adopt an
ordinary interpretation of the characteristic
performance for transfer contracts and a widely
accepted interpretation at least for simple
licensing contracts, giving priority to theclearness of the conflict of laws rules and theguarantee of foreseeability. Specifically, thetransfer of rights by the transferor and the grantof license by the licensor should be interpreted as
the characteristic performance. I adopt thisinterpretation even for the case where thelicensee has the duty to exploit the licensed
rights under a contract47. It may be certain thatthe licensee, if required to exploit the licensed
rights, may bear commercial or economic riskthat the licensee does not have to bear without
the duty. Unless the licensor makes the relevant
industrial property rights available, however, thelicensee may have no access to the rights. Unlessthe licensor permits the exploitation of the rights,
the licensee may remain unable to legally exploit
the rights. Therefore, I cannot agree that the dutyof the licensee to exploit the rights alone
definitely shifts the center of gravity of thecontractual relations from the licensor to thelicensee48. This is why I uniformly interpret the
grant of license by the licensor as thecharacteristic performance of the licensing
contract and the licensor as the characteristic
performer.
As a matter of course, the duty of thelicensee to exploit the licensed rights and otherconditions could indicate that the center ofgravity of the contractual relationship is situatedon the side of the licensee. In such case, I thinkthat the center of gravity may be interpreted ashaving shifted from the licensor to the licensee
and that the latter’s habitual residence may beinterpreted as more closely connected with therelevant contract, and accordingly the law of thelicensee’s habitual residence may apply to thecontract as the law of the place with the closest
connection under Article 8(1) of the General
Rules Act. The interpretation may lead to more
appropriate law of the country with the closest
connection for the contract, because it is possible
to determine the law giving consideration to not

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only the performance of parties but also otherconditions of the contract. Useful for making aconclusion under the paragraph will be factors
listed in the Waseda and CLIP Principles fordetermining whether any party’s habitualresidence is the place with the closest connection.
Since not only the country where each party to acontract has its habitual residence but also any
other country could be the place with the closest
connection under Article 8(1) of the General
Rules Act as explained above, however, various
conditions of specific contractual relationship,
which would not be limited to the factors listed in
the Waseda and CLIP Principles, may be taken
into account in determining the place with theclosest connection.
The above is my present personal view on
the interpretation of conflict of laws rules forcontracts in the General Rules Act in terms oftransfer and licensing contracts of industrial
property rights. As reiterated above, discussions
and rulings on the interpretation have not been
accumulated sufficiently in Japan. Many problems
have yet to be clarified. While expecting thisstudy to trigger discussions on the matter, I
would like to wait for more discussions andrulings on the matter to be accumulated,reconsider my view repeatedly and further
deepen my study on the matter.

1

A general view on governing laws of a transfer andlicensing contract of patents and copyrights is that
contractual issues are governed by a governing law of
the transfer and licensing contract, while issues
relating to the rights are governed by the law of theprotecting country (Hiroshi Matsuoka, Kokusai Kankei
Shihō Nyūmon (Introduction to International PrivateLaw), p. 166 [Miho Tanaka] (Yuhikaku Publishing Co.,
3rd Edition, 2012). This study targets conflict of laws
rules for the former issue.
2
Yoshiaki Sakurada & Masato Dogauchi, Chūshaku
Kokusai Shihō (Explanations on International Private
Law) (1), p. 202 [Yasushi Nakanishi] (Yuhikaku
Publishing Co., 2001).
3
Office of Counsellor, Civil Affairs Bureau, Ministry ofJustice, Kokusai Shihō no Gendaika ni kansuru Yōkō
Chūkan Shian Hosoku Setsumei (Supplementary
Explanations
forInterim
Draft
OutlineforModernization of International Private Law), p. 39.
4
Tadashi Kanzaki, Kaisetsu Hō no Tekiyō ni kansuru
Tsūsokuhō: Atarashii Kokusai Shihō (Commentary on
Act on General Rules for Application of Laws: NewInternational Private Law), p. 66 (Koubundou
Publishers Inc., 2006); Nakanishi, supra note 2, p. 206,
etc.
5
See supra note 3, p. 39.
6
Nakashi, supra note 2, p. 210; Kanzaki, supra note 4, p.
66.
7
See Nakashi, supra note 2, p. 211. It is said that the

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provision fails to clarify the degree of evidence forrebutting the presumption and the strength of thepresumption and must be interpreted (Yoshihisa
Hayakawa, “Tsūsokuhō ni okeru Keiyaku Junkyohō”(Contract Governing Laws under Act on General Rules
for Application of Laws), Japanese Yearbook of Private
International Law No. 9, pp.20 (2007); Toshiyuki Kono,
Chiteki Zaisanken to Shōgai Minji Soshō (Intellectual
Property Rights and External Civil Suits), p. 321 [MariNagata] (Koubundou Publishers Inc., 2010)).
8Regarding the related discussions and interpretations inJapan, for example, see Nakanishi, supra note 2, pp.
208-209, and V in this paper.
9
Official Journal of the European Communities 1980, L
266/1; (consolidated version), Official Journal of theEuropean Union 2005, C334/1.
10
Official Journal of the European Union 2008, L 177/6.
11
A report on the Rome Convention explains the theoryof characteristic performance adopted by theconvention (Report on the Convention on the law
applicable to contractual obligations by Mario Giuliano,
Professor, University of Milan, and Paul Lagarde,
Professor, University of Paris I, Official Journal of theEuropean Communities C 282, October 31, 1980, pp.
20-21） (hereinafter referred to as Giuliano-Lagardereport). According to this report, the characteristic
performance theory adopted by the convention may beinterpreted as the same as the theory under Japan’s
General Rules Act as discussed in the previous
chapter.
12
See, Andrea Bonomi, “The Rome I Regulation on the
Law Applicable to Contractual Obligations: Some
General Remarks”, Yearbook of Private InternationalLaw, vol. 10 (2008), pp. 173-174.
13
The theory of characteristic performance in the RomeI Regulation may be interpreted as the same as thetheory under the Rome Convention. See, Lawrence
Collins and others, Dicey, Morris & Collins on the
Conflict of Laws, (Sweet & Maxwell, 15th ed., 2012),
pp. 1779 and 1783.
14
But the Rome I Regulation has provisionsforfranchise and distribution contracts related collaterally
to transfer and licensing of intellectual property rights.
See Article 4(1)(e)(f) of the Regulation.
15
Pedro A. de Miguel Asensio, “Applicable Law in the
Absence of Choice to Contracts Relating to Intellectualor Industrial Property Rights, Yearbook of Private
International Law, vol. 10 (2008), p. 201.
16
Pedro A. de Miguel Asensio, “The law governinginternational
intellectual
property
licensingagreements (a conflict of laws analysis) “, in Jacques deWerra ed., Research Handbook on Intellectual Property
Licensing (Edward Elgar Publishing, 2013), p. 325. Seealso, James J. Fawcett and Paul Torremans, Intellectual
Property and Private International Law (Oxford
University Press, 2nd ed., 2011), p. 765; Yuko
Nishitani, “Contracts Concerning Intellectual Property
Rights”, in Franco Ferrari and Stefan Leible eds., RomeI Regulation: The Law Applicable to Contractual
Obligations in Europe (Sellier European Law
Publishers, 2009, pp. 65-66.
17
Nishitani, supra note 16, pp. 67-70; de Miguel Asensio,
supra note 15, pp. 210-214; de Miguel Asensio, supranote 16, pp. 325-328.

18

A simple licensing contract means that the licensor
grants the licensee a non-exclusive license on
industrial property rights, while the licensee makes alump sum payment for the license.
19
Peter Mankowski, “Contracts Relating to Intellectualor Industrial Property Rights under the Rome I
Regulation”, in Stefan Leible and Ansgar Ohly eds.,
Intellectual Property and Private International law(Mohr Siebeck, 2009 ), pp. 51-55 and pp. 77-78;
Thomas Petz, “Intellectual Property and Private
International Law: situation in Austria”, in Toshiyuki
Kono ed., Intellectual Property and Private International
Law (Hart Publish, 2012), pp. 235-238; Giovanna
Modiano, “International Patent Licensing Agreements
and Conflicts of Laws”, 2 Nw. J. Int’l L. & Bus. 11(1980), pp. 23-27.
20
Eugen Ulmer, Intellectual Property Rights and theConflict of Laws (Kluwer Academic Publishers, 1978),pp. 94-96 and p. 99 et seq.
21
Nishitani, supra note 16, p. 68.
22
Ibid. See also, de Miguel Asensio, supra note 16, p.
326.
23See, Axel Metzger, “The Emergence of a Lex
Mercatoria (or Lex Informatica) for International
Creative Communities”, jipitec, vol. 3 (2012), p. 363.
(http://www.jipitec.eu/issues/jipitec-3-3-2012/3523/met
zger.pdf)
24
Since the theory of characteristic performance has notbeen sufficiently discussed from the viewpoint ofcontracts on intellectual property rights including
industrial property rights in Japan, as noted above, I
have focused on the related discussions in Europe.
Under the circumstances, Professor Kidana is one of a
few researchers discussing the matter under Japan’s
private international law (namely, the General Rules
Act) and his view is close to Fawcett & Torremans. For
this reason, I take up Professor Kidana’s view here.
25
Fawcett & Torremans, supra note 16, pp. 762-763;
Shoichi Kidana, Kokusai Chiteki Zaisan H(International Intellectual Property Law), pp.
452-453(Nippon Hyron Sha Co., 2009).
26
Fawcett & Torremans, supra note 16, pp. 766-774.
27
See Kidana, supra note 25, pp. 453.
28
The ALI Principle were made by the American Law
Institute. The American Law Institute, Intellectual
Property: Principle Governing Jurisdiction, Choice ofLaw, and Judgments in Transnational Disputes(American Law Institute Publishers, 2008).
29
The Waseda Principles were made by an International
Law and Private International Law Group of the Global
COE program “Waseda Institute for Corporate Law
and Society.” Shoichi Kidana, Chiteki Zaisan no
Kokusai Shihō Gensoku Kenkyū: Higashi Ajia no
Nichi-Kan Kyōdō Teian (Study on International Private
Law Principles for Intellectual Property: Japan-South
Korea Joint Proposal for East Asia) (Seibundo
Publishing Co., 2012).
30
The CLIP Principles were made by the European
Max-Planck Group for Conflict of Laws in Intellectual
Property（hereinafter referred to as the CLIP Group).
European Max Planck Group on Conflict of Laws inIntellectual Property, Conflict of Laws in Intellectual
Property: The CLIP Principles and Commentary,(Oxford University Press, 2013).

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The Transparency Proposal was made as a Japaneselegislation proposal by the Transparency Working
Group. Toshiyuki Kono, Chiteki Zaisanken to Shōgai
Minji Soshō (Intellectual Property Rights and External
Civil Suits), (Koubundou Publishers Inc., 2010).
32
Article 315(1) of the ALI Principles; Article 302 of the
Waseda Principles; Article 3:501 of the CLIP
Principles; Article 306(1) of the Transparency
Proposal.
33
Article 315(2) of the ALI Principles; Article 307(1) of
the Waseda Principles; Article 3:502(1) of the CLIP
Principles; Article 306(2) of the Transparency
Proposal.
34
See Article 307(2) of the Waseda Principles, andArticle 3:502(2)(a)(b) of the CLIP Principle.
35
As for the CLIP Principles, see Article 3:502(3) of the
Principles.
36
Article 315(2) of the ALI Principles; ALI, supra note 28,
p. 148.
37
See Nagata, supra note 7, p. 328. But the Transparency
Proposal primarily determines the country granting
the relevant right as the country with the closest
connection (see Article 306(2), first sentence) and theplace of the habitual residence of the right holder assuch country if multiple countries have granted therelevant right (see the same paragraph, second
sentence). See also, Article 306(3).
38
See Kidana, supra note 29, p. 36. See also, European
Max Planck Group on Conflict of Laws in Intellectual
Property (CLIP), Conflict of Laws in Intellectual
Property: The CLIP Principles and Commentary,(Oxford University Press, 2013), p. 273 [AxelMetzger].
39
The ALI Principles and the Transparency Proposalinterpret the licensor or right holder as thecharacteristic performer and specify his/her habitualresidence or residence as the place with the closest
connection. By specifying the characteristic performer,
they apparently attempt to put an end to disputes overthe interpretation of the characteristic performance
theory (including what the characteristic performanceis). Meanwhile, the Waseda and CLIP Principles
adopted their respective approaches in an apparent bid
to overcome a problem criticized under thecharacteristic performance theory: the difficulty inconceiving the characteristic performance for eachtype of contracts.
40
Article 315(2) of the ALI Principles.
41
Article 306(2) of the Transparency Proposal.
42
Article 306(2) of the Transparency Proposal.
43
Article 306(3) of the Transparency Proposal.
44
See Nagata, supra note 7, p. 328.
45
See supra note 34.
46
See Kidana, supra note 29, p. 36. Metzger, supra note
38, p. 274.
47
This means I adopt the first opinion as explained in
Chapter IV.
48
If the licensee’s exploitation of the relevant rights under
his/her duty is interpreted as the characteristic
performance, licensing contracts may have to beclassified by the presence or absence of such duty.
Given that the presence or absence must be determined
under the law governing the relevant contract. However,such classification may turn out inappropriate.

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