8

Appropriate Protection of Intellectual Property

While new business styles have emerged with the progress of digitization, there have beenacts of competition that are regarded as illegal under tort provisions (Article 709 of the Civil
Code) from the viewpoint of maintaining fair competition among business operators, and acts of
unfair competition that had not been recognized as problems in the past are now drawing
attention as important issues. In order to achieve sound business development, it is necessary to
clarify rules to prevent acts that will inhibit such business. Therefore, the Unfair Competition
Prevention Act plays an extremely important role.
This study examined the possibilities and challenges of the following measures: (1) regulating
the misuse of indications having property value (Consumer-Attracting Indications), which is often
observed in merchandizing business, as being unfair competition; (2) establishing an environment
where people engaged commercially in the creation and provision of databases can conductbusiness with a sense of assurance; and (3) establishing complementary provisions or generalprovisions concerning acts of unfair competition based on the examinations above.

further increased in property value in recent
years as items that promote product sales
and services provision. However, current
intellectual property law does not extend
sufficient
protection
tosuchConsumer-Attracting Indications.
Thus, an examination was made as towhether or not it would be appropriate toregard the misuse of indications having
property value as unfair competition under
the Unfair Competition Prevention Act inorder to maintain fair competition in themerchandising and advertising businesses
that make use of the consumer-attracting
power of those indications.
Some members actively supported theprotectionofConsumer-Attracting
Indications, stating that the indications
deserved to be protected as they involved anenormous amount of effort and investment.
However, other members voiced concerns
about practical issues such as the possible
decline of business activities resulting frombecoming excessively conscious about rights
following the introduction of the protection ofConsumer-Attracting Indications. There wasalso an opinion that, although some
Consumer-Attracting Indications have beenprotected based on the provisions on
malignant acts of unfair competition underIn the FY2006 Study on Appropriate
Protection of Intellectual Property, anexamination was made of acts of unfair
competition in new businesses that haveemerged in line with the progress of
information digitization and networking andthe possibilities and challenges of handlingsuch acts under the Unfair Competition
Prevention Act. A separate study was madefor the following three areas: (1) indications
that have an appeal to attract consumers(hereinafterreferredtoas“Consumer-Attracting Indications”) such as
the name or portrait of a famous person, afamous character, or a famous brand logo; (2)collections of information (such as databases
and typefaces); and (3) introduction ofcomplementary provisions and the challenges
thereof.

1

Possibilities and Challenges ofProtecting
Consumer-Attracting
Indications
Consumer-Attracting Indications, whichhave the effect of promoting product sales
and services provision, are treated as having
property
value.
Amidsttherapiddevelopment of e-commerce via the Internet,
Consumer-Attracting
Indications
have
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business. On the other hand, people involvedin the information and communications andelectrical equipment industries called forcaution, for example: there is a need to
examine the necessity of allowing requests
for an injunction under the Unfair
Competition Prevention Act in addition to
those under the current law, by taking into
account the actual state of a databasebusiness; there are still concerns that the
new protection could lead to a monopoly of
the information itself; and it is questionable
whether sufficient court decisions have been
accumulated to set the requirements.
Due to such differences of opinion, thisreport does not clearly point to whether or
not databases should be protected under the
Unfair Competition Prevention Act. Instead,the report presents ideas on the possible
issues concerning the legal system so as topromote future discussions, based on theunderstanding that it is appropriate topromote discussions on the demarcation
between business acts that should bepermitted and business acts that should not
be permitted regarding cases where the act atissue is highly malignant and relief throughan injunction is considered to be reasonable,
such as the Tsubasa System case.
With regard to the “purpose of theprotection,” there was an opinion that the
purpose should be selected from among thecreation of data per se, the data entry, andthe collection of data, since these elements
have come to command the bulk of the costs
for creating databases in line with thedevelopmentofcomputertechnology.
However, it was pointed out that the decisionon the selection of the purpose of theprotection from among these investmentareas would also affect the discussions on
individual issues including the protectablesubject matter (the scope of databases to beprotected), the term of the protection, andacts subject to regulation. Thus, specificdiscussions in the future should be promoted
while paying attention to such linkages.
In respect of “protectable subject
matter,” there was a view that the more a
database is widely used, the greater the need

the current Unfair Competition Prevention
Act, a substantial practical risk would
remain unless the legal basis were clarified.
Furthermore,
insteadofabstract
discussion, the study group made concrete
examinations of how to achieve the protectionof Consumer-Attracting Indications by using
the components of legal provisions asmaterials. As a result, the study group, which
also heard opinions from industry, narrowed
down the challenges regarding the legal
system to, for example, the need also to
consider the effect of an exemption from theapplication of law when establishingrequirements for protectable subject matter.
In the future, even more in-depth
discussions should be held including
measures on practical issues (such asprotectable subject matter and acts to be
regulated).

2

Possibilities and Challenges ofProtecting Collections of Information(Databases)
Since digitized information is easy tocopy and always faces the risk of misuse,
some kind of legal protection would be
required to regulate very malignant acts.
Some digital information is protected byintellectual property rights such as copyright,
but some is not protectable by intellectual
property rights in spite of having property
value, such as databases that lack“creativity” although they involve anenormous amount of production costs. Unlessthey are appropriately protected, theincentive to create and provide new
databases by investing funds and labor would
be lost. Therefore, it is desirable to build asystem that allows people who engage
commercially in creating and providing
databases to conduct business with a sense ofassurance and to establish an environmentthat would promote the creation andprovision of new databases.
A number of people involved in thebusiness of creating and providing databasessought active protection, such as insisting on
the need to clarify the requirements fordatabase protection in order to facilitate
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the databases to be protected, the term of theprotection, and the acts to be regulated).
Therefore, it would be appropriate to discuss
the matter again after examinations havebeen made of the purpose of the protection
and protection requirements, while giving
sufficient consideration to any adverse effects
of information monopoly.

to protect it from misuse, and that it isnecessarytoconsiderintroducing
requirements such as “providing thedatabase to specific persons in business” and“taking measures to manage the database” inorder to specify precisely which databases areprotectable. On the other hand, there wasalso an opinion that it would be better not to
set such requirements because there arebusiness models where databases areprovided for the use of the general public but
which are financed by advertising revenues.
Meanwhile, there was a comment that
because the requirement of “well-known or
famous” is ambiguous, a requirement of“utility” should be imposed. However, it wasalso pointed out that this could cause
confusion since there is a question as to how“utility” should be evaluated.
As for the “term of the protection,” thefollowing two approaches were suggested: (1)considering the purpose of the protection of
databases, the term of the protection should
be limited to the period until the databaseproviders recoup their investments; and (2)since the Unfair Competition Prevention Act
regulates acts, malignant acts of unfair
competition should be regulated for as longas they continue.
Regarding “acts to be regulated,” nomembers objected to making “acts of
distribution of reproductions” subject toregulation, and that “mere acts ofreproduction (acts of unauthorized use ofindividual component data)” should not be
regulated. However, it was considerednecessary to examine further any need formore specific requirements (additional
requirements) for regulating such acts as the
distribution by a person who is not in acompetitive relationship or by an offender for
takes delight in other peoples’ reactions to
the offense. There would also be a need toconsider whether or not the “concept ofquantity” should be introduced with regard to
the reproduction of databases.
With regard to an “exemption from theapplication of law,” it is a matter that is
related to both the purpose of the protection
and the protection requirements (the scope of3

Possibilities and Challenges ofProtecting Collections of Information(Typefaces)
In this digital era, unauthorized copying
and alteration of typefaces (a typeface is a setof characters as letters, numbers and marksthat has been produced based on a unified
concept) have become frequent. In addition,
unauthorized copying and alteration of
typefaces have become easier due to theadvancement in technological innovation andthe diffusion of networking and due to thecommercializationoftechnology
forembedding digital fonts that incorporate
typefaces in an electronic document andtransmit the document via the Internet.
Because of this, there has been a large
number of cases where typefaces have been
unfairly
misappropriated.
Given
the
increasing importance of font design invarious media, the Intellectual Property
Strategic Program 2006 of the Japanese
governmenthasasectionabout“strengthening the protection of typefaces,”indicating that an examination should bemade as to how typefaces should beprotected.
Thus, this study group examined how
typefaces,
which
are
collectionsof
information concerning font design, should beprotected under the Unfair Competition
Prevention Act.
There was an opinion from the relevant
industry indicating a demand for making
typefaces subject to protection. No objections
were made to this opinion.
However, the study group unanimously
agreed on the idea that individual provisions
for protecting typefaces should not beestablished under the Unfair Competition
Prevention Act for the following reasons: (1)3

IIP Bulletin 2007

there are people who think that their acts areunaffected by law if such acts are not coveredby the categories of acts of unfair competition,and there are others who suffer enormous
damage from such acts but cannot obtain any
relief; accordingly, if we establish general orcomplementary provisions to indicate clearly
that any socially unreasonable act conducted
for gaining profits shall be regarded as an actof unfair competition, it would lead to soundbusiness practices and enable parties toobtain a reasonable conclusion in specificcases. On the other hand, however, there wasa view that more convincing arguments
would be required on the necessity of
establishing abstract provisions.
One member voiced a concern that the
introduction of general provisions could leadto the loss of foreseeability and the decline ofbusiness activities. However, there was also acomment that it is more of a problem to rely
on Article 709 of the Civil Code and award
damages for an act that fails to meet therequirements under the Unfair Competition
Prevention Act, and it would be better toestablish general provisions as a guideline fordetermination. With regard to a concern thatsuchanintroduction
could
make
foreseeability and the subject of protection
ambiguous, there was an opinion that
foresesability would not be lost because inrecent court decisions, products involving
other people’s investment or labor, specified
types of creations, and products that are notprotected by intellectual property law areprotected under certain requirements, as
according to discussions based on theGerman Unfair Competition Law held by thecommittee that made examinations for the
1993 revision of the Unfair Competition
Prevention Act.
There was an opinion that, in the case of
introducing new provisions as specific“complementary provisions,” a possible
requirement would be the unfair use ofanother person’s achievement or fame that is
not used as an indication of the goods orservices. However, there was a comment thatwhat is covered by “achievement” is unclear,and if this is not delimited in the newacts of infringement between business
operators (designers) are much rarer thansuch acts between persons other thanbusiness operators (end users); (2) it issystematically incompatible to introduce
measures against use by persons other thanbusiness operators under the Unfair
Competition Prevention Act, which basicallyregulates acts between competitive business
operators; and (3) relevant business
operators are hoping to have typefaces
protected by a framework other than the
Unfair Competition Prevention Act, such as
granting rights for typefaces.
4

Possibilities
andChallengesofIntroducing Complementary Provisions
In line with the progress of digitizationand networking, new business styles haveemerged, and business problems that cannot
be dealt with sufficiently under theconventional framework of intellectual
property protection have occurred, such as
the misappropriation of information products.
Because of this, there has been growing
attention given as to what kind of rules
should be established to secure and maintain
fair trade between competitive business
operators. The Japanese Unfair Competition
Prevention Act lists acts of unfair
competition in a restrictive manner.
Therefore, when a new type of very
malignant act of unfair competition has
occurred, it has been added to the Act as“unfair competition,” as required, as long as
such a requirement can be stipulated to
specify such an act as an individual andspecific type of act. However, it is generally
accepted that even when an act is regarded
as an act of unfair competition, it is not
regulated unless it falls within the categories
of acts listed in the Unfair Competition
Prevention Act. Thus, an examination wasmade as to how to deal with new acts of
unfair competition.
On the one hand, there was the following
opinion: there seems to be a generalconsensus that an act of using anotherperson’s product, without authorization, for
one’s own profit should not be permitted; but
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property staff from about 3,000 domestic
companies, and 718 companies responded(collection rate: about 25%).
Not many companies were using or
managing Consumer-Attracting Indications
at the time the survey was carried out, andthere were only a few cases where therespondent companies faced troubles withregard to such indications either in Japan oroverseas. Maybe because of this, not many
companies had developed a concrete in-house
manual concerning Customer-Attracting
Indications. Under such circumstances, theopinions of the respondent companies were
almost halved over whether or not there is a
need
for
the
legal
protectionofConsumer-Attracting Indications.
As for the modes of the use of databases,
about the same number of companies
responded that they “produce databases more
frequently than use them,” “produce and use
databases” and “use databases more
frequently than produce them.” Most
companies take technological restriction
measures, such as access control using ID
and passwords, for the produced databases. A
slightly larger number of companies said
there was no need for legal protection otherthan copyright, but many companies said
they would not be affected even if legal
protection other than copyright wereintroduced.
About 70% of the companies found legal
protection
necessaryfor“businessachievements.” Many companies thoughtbusiness achievements were the result ofcorporate efforts including investment that
had property value, and many companies
recognized that the legal system forprotecting
suchachievements
wasinsufficient. While there are concerns about
the risk of the abuse of rights if the protection
becomes excessive, it would be necessary to
examine some way of providing protection in
the future by, for example, clarifying therequirements for the protection.
Opinions were nearly divided withregard to the need for reviewing the list of
indications in Article 2, paragraph 1, item 13of the UCPA. However, many of theprovisions, business activities could decline.
Regarding this point, it was suggested that,such concern could be removed by adding a
restriction that a request for an injunction
may only be allowed when the act at issue isespecially highly malignant or when the act
at issue causes tremendous damage.
There was also an opinion that, when
examining complementary provisions, apossible measure would be to expand thescope of the application of provisions on
misrepresentation of information regarding
the place of origin or similar (Article 2,paragraph 1, item 3 of the Unfair
Competition Prevention Act [hereinafterreferred to as the “UCPA”]) or provisions on
acts of injuring another person’s reputation(Article 2, paragraph 1, item 14 of theUCPA).

5

Other challenges
In addition to making examinations
regardingtheaforementioned“Consumer-Attracting
Indications,”“collections of information (databases andtypefaces)” and “complementary provisions,”
the study group also raised questions about“other challenges” regarding the Unfair
Competition Prevention Act. Such otherchallenges are acts of providing devices that
obstruct the effect of technological restriction
measures (Article 2, paragraph 1, items 10
and 11), misrepresentation of information
regarding the place of origin or similar(Article 2, paragraph 1, item 3) and acts of
injuring another person’s reputation (Article
2, paragraph 1, item 14).
However, since concrete examinations
were not made with regard to the “otherchallenges,” this report introduces the points
that were raised at the study group sessions.
6

Awareness of industry about arevision of the UCPA
This study group has held discussions
toward the revision of the UCPA. Thus, in
relation to this revision, it conducted aquestionnaire survey to investigate theawareness of industry about such revision.
The questionnaire was sent to intellectual
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indications that were referred to as being
questionable are difficult to interpret fromthe list of indications under the current Act,so there would be a need to consider
reviewing the current Act while taking into
account the changing times.
With regard to Article 2, paragraph 1,
item 14 of the UCPA, the number ofcompanies that had experienced having
allegations injurious to the company’s
reputation made or circulated against themaccounted for a little over 10%, but the
number of companies finding the need for aright to request an injunction against such
illicit acts reached about 70%. This is because
many companies have come to find the needto take measures promptly against a growing
risk of being injured by the acts of unfair
competition prescribed in Article 2,paragraph 1, item 14 of the UCPA in linewith the development of information methods
such as the Internet. Currently, thisprovision includes restrictive matters such as“competitive
relationship”
and“falseallegation” so there have been cases recently
where such acts cannot be regarded as acts of
unfair competition under the current Act.
Thus, there would be a need to consider the
possibility of deleting these restrictions andexpanding the current Act.
In addition to this, many opinions wereexpressed concerning the current UCPA. A
particularly notable opinion was that it isdifficult to determine whether or not an act
corresponds to an act of unfair competition.
There is a demand that guidelines be
indicated or awareness-raising activities be
conducted regarding this difficulty. Manycompanies also mentioned that acts of unfair
competition should be regulated byestablishing
generalprovisions
orcomplementary provisions or that the penal
provisions should be made stricter. There
would be a need to consider such possibilities
in the future, including the issues mentioned
above,
whilecloselyexaminingtherequirements for the protection and the scopeof the protection.

7

Status of Major Developed Countries
Concerning Regulation of Acts of
Unfair Competition(1) United Kingdom
There are no laws or regulations thatgenerally prohibit unfair competition or thatspecifically deal with the issue of thecommercial use of Consumer-Attracting
Indications. It is possible to file a passing-off
action or an action on the ground of a breachof confidentiality or an infringement ofprivacy against the unauthorized use of theportrait of a famous person.
Databases are protected by databaseright (a new sui generis right concerning
databases) or copyright. This is as a result ofa European Parliament Directive (96/9/EC[Database Directive]) being implemented in
the Copyright Act, and later being embodied
in the form of the Copyright and Rights in
Databases Regulations 1997 (Database
Regulations) that include revisions of the
Copyright Act, Designs Act and Patents Act.
While the protection by database rightrequires that there has been a substantial
investment in obtaining, verifying orpresenting the contents of a database, theprotection by copyright requires that a
database is “original.” In this way, the scopeof the protection, the term of the protection
and remedial measures are stipulated
separately for both rights. The Copyright Act,
Designs Act and Patents Act have provisions
for prohibiting the circumvention oftechnological restriction measures forprotecting
copyright
works
includingdatabases, and there are also civil andcriminal provisions concerning devices forcircumventing such technological measures.
(2) Germany
In both the German Civil Code and theGerman Trade Mark Law, there areprovisions for protecting trade names andtrademarks from acts of illicit use or
defamation. When an infringement lawsuit
has been filed, the holder of the right may
demand the suspension or correction of illicit
use based on the Civil Code or the Trade
Mark Law and claim damages, and the court
6

IIP Bulletin 2007

competition or parasitic use include
injunctions, damage claims, publication of
court judgments and the destruction of
infringing goods. Penal provisions are notapplied.
Databases are protected by copyrightand database right under the Database Law
implementing the Database Directive of theEuropean Parliament. They are also
protected by provisions on unfair competition,
which are applied when the requirements forthe application of provisions on copyright or
database right cannot be satisfied. With
regard to the requirements for protection by
database right, courts determine that
substantial investment needs to have beenmade. For protection under the CopyrightLaw, there must be originality in the way inwhich the contents are composed. The scopeof the protection, the term of the protection
and remedial measures are stipulated
separately for both rights. Legal protection
for technological measures and limitations
thereof are provided for in intellectual
property law. Circumvention of technologicalmeasures is restricted or prohibited, andcriminal penalties are imposed on suchcircumvention. Civil remedial measures
include injunctions, damage claims, and thedestruction of infringing goods.

may order an injunction to stop the
infringing act. The German Act against
Unfair Competition of 2004 has a generalprovision stating “Acts of unfair competition,
which are likely to not insignificantlyinterferewithcompetition
tothedisadvantage of competitors, consumers orother market participants, are prohibited”(Section 3) and 11 exemplary provisions(Section 4). The Act also grants interest
groups such as consumer groups the right todemand a cease-and-desist order (request for
an infringement) and the right to claim
damages.
Databases are protected as copyrightworks under the Copyright Law or by
database right under the Database Directiveof the European Parliament. In order for a
database to be a copyright work, the selection
or arrangement of materials needs to result
from creative effort. Also, the databaseproducer needs to have made a substantial
investment. A database producer has an
exclusive right over a substantial part of thedatabase, and has the right to exclude
repetitive and systematic use of thenon-substantive parts of the database. Whenthe right has been infringed, the databaseproducer may claim damages. The term of
the protection under the Copyright Law is 15
years. The Copyright Law also prohibits thecircumvention of technological restriction
measures, and punishes the violation thereof
as an offense. There are no provisions on civil
remedial measures.

(4) SwitzerlandThe
self-serving
useofConsumer-Attracting Indications is not
restricted by explicit provisions, but in termsof concept, it is regarded as corresponding to
the violation of the general provisions of the
Swiss Unfair Competition Law. The Unfair
Competition Law also refers to unfair,
fraudulent and misleading comparison, illicit
use of characteristics of individuals, andillicit use of the names of other people. The
general provisions under Article 2 of the Law
prohibit any act that is deceptive or that inany other way infringes the principle of goodfaith and which affects the relationshipbetween competitors or between suppliersand customers, while giving specificexamples of acts of unfair competition. An
individual or organization whose economic(3) France
France has no law that defines andprotects Consumer-Attracting Indications,but the legal system concerning personal
rights and the legal system prohibiting unfair
competition and parasitic use are mainly
appliedtoprotecting
rightsfor
Consumer-Attracting Indications. However,these legal systems are not considered to be
inhibiting the freedom of business activities
in the market. Meanwhile, French law does
not have provisions that generally or clearlyprohibit unfair competition. Personal rights
and civil remedial measures against unfair
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not clear whether or not a legislative
measure for database protection is supportedatpresent.
The
circumventionoftechnologicalrestriction
measuresconstitutes an offense, and is subject to penal
provisions.
(Senior Researcher: Yoshihito INABAYASHI)

interests are threatened or prejudiced by anact of unfair competition may seek remedy.
Civil remedial measures include injunctions,deterrence of infringement, and damage
claims. Criminal provisions are also
stipulated.
The Database Directive of the European
Parliament is not applied in Switzerland.
Databases are protected by the CopyrightLaw, and the Unfair Competition Law isconstrued to provide additional protection.
An individual or organization whose
economic interests are threatened or
prejudiced by an act of unfair competition
may seek remedial measures against
infringement. There are no laws that preventthe circumvention of technological restriction
measures and no criminal law provisions thatpunish such circumvention.
(5) United StatesThe
self-serving
useofConsumer-Attracting
Indications
may
constitute the infringement of privacy rights
of an individual or the publicity rights of afamous person. Under common law publicity
rights, a person who has plagiarized thename,portraitor
other
personal
characteristics of an individual without
consent for a business purpose shall be liable
to damages. There are no penal provisions
under civil law against the infringement ofConsumer-Attracting Indications. However,injunctive relief is available. Since unfair
competition cannot be comprehended in a
restrictive manner, courts have not formed atheoretical definition of unfair competition.
The U.S. Supreme Court has ruled that acompilation work such as a database must
contain a minimum level of creativity, rather
than involving “sweat of the brow” or“industrious collection,” in order to beprotectable under the Copyright Act. A
copyright owner may claim an injunction anddamages.
Intentional
infringement
constitutes an offense and is subject to penal
provisions. Many people say that theprotection of databases by copyright isinsufficient and they think that protection bycontract is more reasonable. However, it is8
IIP Bulletin 2007