The Copyright Protection of Computer Software ín Japan and U.S.- A Comparative Studies -

ERICAAOKI

"The ~ftest thing in the universe overcome..~the hardestthinp in the lJniver~e" - fL&:. TRe)a "

1. TntTOductlon

Not many technological phenomenon conld prodnce snch an ampleeconomic, social and legal impact as the advance and spread ofthe infonnatics.

Twi11present in this study, the legal protectlon for computer software,adopted by the two most important co\mtries in the world in this field: Japan andV.S.

This work is taking as a premise, that the V.S. leadershíp in manufactureand trade so:ftware,was the main factor which determined the actual rules for the

protection of computer software in the world. The V.S. share of software marketin 1984 amounted to at least 70 percent of the world market. It enable D.S. to

solve many of the problems in applying copyright protection to computersoftware.

I will not present in this work. the CONTIJs Report. which contains themain legal reasons of the adoption of copyright to proteet computer software. Iwill attain mainly to the aspects occurred afier CONTU.

As a result of the economical and polítical pressure, and to folIow the

direction imposed by the United States, a significant number of countries, as

Japan. adapted their copyright laws to specifically include computer software ascopyrightable material.

The first and the most important episode where the American>-

Govemment actively sustained the focus of intelleetual property for software wasagainst Japan.

In 1983, the Ministry of Intemational Trade and IndustIy of Japan (MITI)issued an informative with a proposal to establish a sui gener;s regime for thesoftware protection. ~nTI sustained that, according to the special characteristicsof computer programs. the existing legisIation resulted inadequate.

Surrender to the American pressure, the MITI project establishing 15

years of protection, has been put aside and the Japanese Diet decided for 3

modified copYlight whiclrresulted- in the-t~ Law. ------ - ---The Vnited States wanted with this control measure, avoid that eaclJ

single cOlmtrydeve10psits own law to protect software, since this may represen1the dilutlon of the proteetlon power of the system chosen by them. For this

reason, the establishment of an own legislation to protect software by a country

like Japan, one of the market leader in this field following the Vnited States, was

not acceptable. As a deve10ped country with a large and expressive computeI

industry, the influence of an independent law created in Japan could represent an

emerge of a protectionism policy, mainly in developing countries , which wasagainst to the goal V.S. intended to reach with the protection of software.

n. Copyright Proteetion for Computer Software - U S. point ofview

The 10st of intemational competitiveness in the 80's by the American

industries, affected many sectors, including high technology fields. In 70's,Vnited States had the domain of 100% of the miero e1eetronies market, but in

1988, the share of Ameriean companies dropped to 42%.1

The Japanese companies superseded the American companies in itstechnology, gaining a larger market shares, mainly in manufacture of equipmentfor the semÍeonductor industries and robotles.

However, Vnited States maintained a solid leadership in the field ofhardware and computer software. The V.S. leadership in these fields was cruciaI

to determine the market of system software standards (e.g. CP-M, MS-DOS,

UNIX). Therefore, the American software manufacturers, has actively advocatein favor of a consolidation of the legal protection of software in domestic andworldwide market .

The main eoncem in that time, which stiU representing a problem, -"wasthe software pirates. The worldwide theft by software pirates cost the industryabout US$ 12 billion in 1992.

1 Carlos Maria Correa, Proteccion dei software: estudio de caso sobre ei desarro/lo dei derecho

economico, 494 Revista dei Derecho Industrial 557, 559 (1979).

As infonnation released by the Arneriean Business Software Allianee.

one-quarter of alI the losses - whieh hit both software makers and distributors ­

were raeked up in Japan. while hi-teeh theft fell in Europe:-due in part to toughnewlaws.2

This faets carne towards to eonfinn the needs of Arnerican rnanufacturers

to have a stronger copyright protection laws and also a strict enforcement of thelaws. since V.S. industries progress would be even grater if these measures hasbeen taken.

By the moment, it is quite pacific the understanding regarding to thecopyrightability of computer software. However, for manYyears the discussionabout which law could be more efficient to protect the rights on computersoftware, maintained a hot discussion in courts, between scholars and in

Govemmental sphere.

As in other intelleetual property field, the American position over theprotection of software has produeed a great impact in legislation models adoptedby many other countries in the world.

In 1980, the Vnited States Govemment adopted an explicit position that

software shall be protected by copyright, this position has been taken, in part, as

a mea5ure of it5 foreign trade poliey.

The favorable argument of V.S. in taking this position was that,

the copyright offers the possibility to apply an entirely well known and respectedprincipIes and mIes: it provide a legal measure against an illegal reproduetion;the protection period is longer than others inteIleetual property rights; theprotection is given since its ereation and in general it not require any forrnalities

to guarantee the rights; and the disclosure of protected work 1S not required.

\Vhen applied in an international seale, the foeus of copyright a1sograntssuhstantial advantages for exporters: the exÍstence of an accepted eonvention (e.g.Beme and Universal); the inexistence of registry proeess to obtain protection; andthe universal protection since its creation.

The reIative low cost of obtaining the copyright and the norrnally strl;Jight

forward and expeditious registration process are the benefits of copyrightprotection.

2 Reuter, Study: piracy o/ software costs $12 bil.. The Daily Yomiup, 1993

The computer program has been accepted for registration by the

Copyright Office since the decade of 60's, even though it was still unclear

whether computer software was a copyrightable "writing" under the originalIegislation.

From the Copyright Act of 19093, which secured for authors the

exclusive rights to their respective writings, the legislation have developed toattend the new needs of the market. Yet in 1964, even though it was still unclear

whether computer software was a copyrightable "writing" under the legislation,the Copyright Office announced guidelines governing the registration ofcomputer programs.

Congress considerably broadened the registration guidelines by enacting

the Copyright Act of 19764, suggesting the copyrightability ofcomputer software.The Act however, did not specifical1y prescribe that computer programs waseligible for copyright protection.

Without an express mention that computer software was copyrightablesubject matter, the court failed to reach a consensus in this respect, so the

copyright protection for computer software remained problematic until Congress,acting on the recommendation of the National Commission on New

Technological Uses of Copyrighted Works (CONTU) passed the adoption ofspecific dispositions for computer software protection.5

The legal reasons to eleet the copyright to protect computer software was

extensively discussed in CONTU report, but this decision can also be justified in

economical terms, from a point of view of a country that is the mainmanufacturer and exporter of computer software of the world.

The Computer Software Copyright Act of 1980, added proV1slOn

specifically dealing with computer programs, revised the Section 117 andÍncluded the term "computer program" in the definitions of Section 101 of theLaw.

3U.S. Constitution art. I Section 8 c1.8.

417 U.S.C. Sections 101-810

5 ArthUT R. MilIer, Copyright Protection for Computer Programs. Databases. and Computer

Generated Works: Is Anything New Since CONTU?, 106 Harv.L.Rev. 978, 979 (1993)

The amendments plainly applied software represented in "source code",

therefore the eourts were required to resolve the quesrion of whether copyrighj

proteetion extended to computer programs expressed in "object code".

Copyrightable intellectual property, under V.S. law definition, must be

an original work of authorship, flxed in a tangible mediurn, from which it ean be

"perceived, reproduced, or otherwise communieated, either direetly or with theaid of a machine or device". 6

The degree of originality is mínima!, requiring neither novelty nOIingenuity.7 Simply stated, onee the ereator transfers an idea to a tangible medium,a eopyright is bom, providing protection from the moment of transfer. Thecopyright then endures for the life ofthe author plus fifty years.8

Copyright law does not protect the copYright owner from having others

take the ideas used in the copyrighted work. 9 Copyright law protects on1y theexpression of the idea, not the idea itself.

The statutory scheme of copyright protection on1yprohibits copying.,not

independent creation by another person or entity.The evolution of American jurisprudence regarding to the software

protection has been carefully examined not only inside but also outside V.S. The

cases conceming the copyright protection of computer software can be analyzedby divide it into three generations.10

The first generation of cases addressed the copying of substantial

portions of literal software elements, including objeet and source codes.

li Computcr Softwarc Copyright Act, 17 U.S.c. Scction 102 (a) (1988)

7 Atari Games Corp v. Oman. 888 F.2d 878, 883 (D.C. Cir. 1989).

8 17 U.S.c. Scetion 302 (a).

9 11 U.S.C. Section 102 (b).

lOJohn T.Soma, James Shortall Jr.& Vemon A. Evans, The Use ofQuiet Title and Declaratory

Judgment Proceeding in Computer Software Ownership Disputes,71:3 Denv. U. L Rev., 543,

555 (1994)

The 1980 amendment to the Copyright Act fmn1y established thecopyrightability of computer programs and, rejected the alleged source code­object code distinction.l1

In the second generation, the courts considered the extent to which the

non-literal aspects of computer software, inc1uding the structure, sequence andorganization (SSO) of programs, received copyright protection. The courtestablished a test for distinguishing non-copyrightable idea from copyrightable

expression. The court held that afier isolating the idea, copyright protection

clearly extended beyond the literal code to the structure, sequ~nce and

organization of the program.12

Recently, the court presented an altemative analytical framework fordistinguishing idea from expression and determining the substantial similarity of

non-literal program structures.I3

The third generation of software copyright cases further extended

protection to non-literal elements, often focusing on the user interface. The court

established a test to determine the copyrightability of non-literal components of

computer software.14

According to V.S. law, the defmition of a computer program in the senseof Section 101 of the V.S. Copyright Act also seems to suggest that a computerconsists of both hardware components and operating systems, and that

consequently the operating system as a part of the computer cannot be protectedunder copyright law. Nevertheless, in some court decisions, operating system hasbeen protected under copyright law as computer programs.15

11 Appk Computer, Inc. v. Franklin Computer Corp., 714 F.2d. 1240 (3d Cir. 1983) certo

dismissed, 464 V.S. 1033 (1984)

12Whelan Associares Inc y Jaslow Dental Laboratot:Y, Inc., 797 F.2d 1222 (3d Cir 1986) certo

denied, 479 V.S. 1031 (1987».

13Computcr Associatcs Internatjonal, Ine v Altaj, Ine, 982 F.2d 693 (2d Cir. 1992).

HLotus Devclopment Corp v Paperbaek Softwarc Intematjonal, 740 F.Supp. 37 (D.Mass.

1990).

15Apple Computcr V Franklin Computer Corporation. 101 S. Ct. 690 (1984)

IOMlcrosott Corpomfioo v Showa Trildiog KK, 1219 Hanji 48, 1987 Patents and Licensing

17Karl H. Pilny, Legal Aspeets of Interfaees and Reverse Engineering - Protection in Germany,

the United States and Japan, 23 Intcrnational Review of Industrial Property and Copyright Law

I1C, 196,206 (1992)

The first Japanese copyright law was enacted in 1869. Under this

legislation, the author of a book, was obliged to obtain a license from thegovernment to published it.

This license, once obtained, protected the author's monopoly rights on

profits beard from the book, for the authorts life. This provision was amended in

1875, restricting the protection period for thirty years.In 1887, Japan adopted a registration system, and in 1899, enacted its

frrst copyright statute, incorporating the principIes of the Beme Convention.Under the 1899 Copyright Act, Japan granted the copyright protection to

the author of a writing, speech, drawing, painting, sculpture, model, photograph,

or other work of authorship. This Copyright Act served as a base of the ActualCopyright Act enacted in 1970, and was amended several times. ln 1910, addedarchitecture, in 1920 added instrumental and vocal performance, in 1930included music, in 1934, included sound recordings of particular works, and in

1956, Japan ratified the Universal Copyright Convention.

The Copyright Act Enforcement Order and Regulation of 197018, current

in force in Japan, has been amended repeatedly since its enactment until today.The Japanese Copyright Act defines in its Article 2(1)(i)19the "works of

authorship" as a "production in which thoughts or sentiments are expressed in acreative way and which falls within the literary, scientific, artistic or mutual

domain", and it lists in Article 10(1)20 an example of nine types of "works of

authorship" that are entitled to copyright protection.

One of the peculiarity of the Japanese Copyright Act is that it protectscompilations if there is sufficient creativity in the selection or arrangement of themateriaIs.

"This compilation protection has important implications in protectingcomputer databases. ln 1985, an advisory committee to the Japanese Govenunent

18Japancse Statutes, Law No. 48 of 1970, as amended by Japanese Copyright Act ArticIe 1-104;

Cabinct Order No. 335 of 1970; Ministry ofEducatíon Ordinance No. 26 of 1970.

19Iapanese Copyright Act art 2( 1)(í).

20Id. art 10(1).

recommended that computer databases be given compilation protection under theCopyright Act."21 This recommendation was followed in 1986.

The Japanese Copyright Act gives more rights for the author of protected

works than are specified in the V.S. Copyright Act.

The Japanese Act in its article 30-4922, identifies some specific

limitations and compulsory licenses, since there is no general "fair use"exceptions to the exclusive rights :

1. reproduction for private use, unless the reproduction is made by an

automatic reproduction machine placed for public use;

2. reproduction of library materiaIs for certain non-profit activities;3. limited quotations;4. lirnited reproductions or broadcasts in schools, school text books, or

school education programs;

5. reporting of current events;

6. reproduction for judicial proceedings, and other matters

Copying is allowed for certain other uses by compulsory licenses. 23

According to the Japanese Copyright Act, authors automatically enjoyboth copyright protection and moral rights protection. Artic1e 17 (2)24 providesthat "the enjoyrnent of moral rights and copyright, shall not be subject to anyforrnality". However, registration still possible and, in some circumstances,

desirable in helping to prove copyright infringement.

Although registration system are not necessary for creation of copyrightprotection, the Japanese Govemment operates four different copyright registers.The Director General of Japan's Cultural Affairs Agency administers the

Copy-nght Register, the Publication Right Register and the Neighboring Rights

21Mark S. Lee, Japan's Approach to Copyright Protection for Computer Software , 16 Loy.

L.A. Int'l & Campo L.J. 675, 680-681 (1994).

22Japanese Copyright Act arts. 30-49.

23Id. art. 50.

24Id. Art. 17 (2).

Register25• A govemment ageney ereated in Deeember 1986, ealled the "SoftwareInformation Center", administers the Computer Program Register26.

Under the Japanese law, notiee is not required for--copyrighted··work,

however, notiee can avoid eertain exemptions to eopyright holders' exclusive

rights that could otherwise apply.The Japanese Act on1y protects works of Japanese national and works

"fust published" in Japan, unless an intemational treaty obliges Japan to proteet

otherwise ineligible works. "First published" works include works publishedwithin thirty days of initial publieation eIsewhere. Nevertheless, Japan hasentered into one bilateral treaty and severa! multilateral conventions that protectV.S. works. The Beme Convention or the Universal Copyright Convention

protect foreign works in Japan.Generally, the terro of Japanese copyright is fifty years afier the author's

death.

From 70's, the Japanese Governrnent and computer industry started todebate the amount and type of intellectual property protection appropriate for

computer software. While this debate progressed, Japanese courts found implicit

protection for computer software in the Copyright Act.

In July 5, 1972, the Committee of Software Protection Survey of theHeavy Industry Agency of Ministry of International and Industry (MITI), issued

its reporto Basically, this Committee proposed the protection of the capitalinvested for the development of computer program, guarantee its marketability,and improve the computerization of the market. The Committee found that, toreach those target, it is sufficient to protect against infringement by copying orillegal use, and it is not necessary to protect the ldea itself. The committee

proposed a registration system, with a compulsory examination, publication of

the documentation of the program, arbitration iu case of disputes and a short tennprotection of 10 year27.

25Id. arts. 71(1), 78 bis, 88

26 Id. arts. 75-78

27 Nobuhiro Nakayama, Software no Hoteki Hogo [Legal Protection of Software], 9 (Yuhikaku

1990)

ln 1973, the Cultural Affair Agency Copyright Committee, presented its

opinion that the computer software shall be protected by copyright law.

Even though, the computer software protection problem has been

discussed from early 70's in Japan, there was not many significant problems until

1982. In 1982, the Hitachi v. IBM28,trade secret infringement case, brought the

public attention to the question with regard to computer software protection.In the same period, the infringement of computer games increased. This

question was concluded with the decision of the Tokyo District Court dated

December 6, 1982, which, by the first time, explicitly recognized thecopyrightability of software.

Based in above mentioned decisions , the Ministry of International Tradeand Industry (MITI) and the Culture Affair Agency, separately proposed a new

law and the amendment of the Copyright Act respectively.

The MITI issued in 1983, a proposaI, caIled Program Right (Puroguramu

ken), which established a sui generis regime for the protection of software,

cIearly defrning that the copyright law should not be applicable for computersoftware protection.

The MITI proposal was aiming to reach 3 mam targets: 1) promotion ofthe development of software; 2) regulation of the infringement by illegal copies

and 3) promote the use of software.

The MITI proposed Program Right, reflected the dissatisfaction with thecopyright law to protect software. The point MITI was concerned, was the

inexistence of the concept of right to use tn the copyright, so, to use the "work",no manner of fact, will result in copy of that work. For who was in the defense of

the copyright, copy ofthe work has the same meaning ofuse.

Also, MITI was conceming that the computer software, as a product ofhighest intellectual work of a man, representing a main factor of the developrnentof an industrial society, should be in constant improvement, which necessarilyneeds to be very fast. By this meaning, MITI sustained that by allowtng the

copyright protection of computer software, this protection will be for a very'long

period of 50 years, which causes damage to the rapid improvement of the

technology. 50, they proposed the same protection period of a patent, 15years29.

28Nano Hiko, Chitckishoyuken [InteIlectual Property Right], 69-132 (Chuo Koronsha 1988)

29Nano Hiko, Chitekishoyukcn [Intellectual Property Right), 156(Chuo Koronsha 1988)

ln tum, the Cultural Affair Agency, presented its report in Januaty 1984,

with totally ditrerent position from MITI. According to the Cultural Atrair

Agency's Report, a program, until it tums to firmware, shall be subject matter of

copyright, and 50 the copyright wiIl be applied.

The Cultural Affair Agency report proposed to include computer

program in the copyright subject matter (as it is in the actual Copyright Act,

Article 10).

They also proposed a rearrangement of the roles regarding to "work on

hire" (Article 15 of the current Copyright Act), and with regard to version up, it

proposed the inclusion of an exception to the right of preserving the integrity.

The discussion between MITI and the Cultural Affair Agency, regarding

to their contradictory positions, was finally decided by an external pressure. The

United States, which has decided to adopt the copyright to protect software, was

strongly against the MITI position, and this issue 5tarted to be one of the items of

the Japan-U.S. trade friction.

Finally, the protection of computer software in Japan tumed to be

submitted to the Copyright Act, and the computer software has been considered

as a "work" within the meaning of the Act. The 1985 Amendments to the

Japanese Copyright Act clarified the copyright protection to be given to computersoftware.

According to the Act, "program" means "an expression of combined

instructions given to a computer 50 as to make it function and obtain a certain

result". The Act also added "program works" to its list of authorship works, and

specified limitations on the protection provided to software.

The 1985 Arnendrnent however, kept some characteristics of the MITI

projeet., since it not proteet language. mIes and algorithms.

The Japanese law added a specific "work for hire" provision, where the

software created by employee in the course of its employment, the employer

shall be considered the aUthor of the work, and establish a voluntary registrarion

system of software, as the proposal ofthe Cultural AfIair Agency.

IV. Conclusion

The United State strong position against the MITI proposal for theproteetion of software, was, no manner of faet, more related to defense of trade

interest than a rational and seholastie study of the questiono

However, the diseussion regarding the copyrightability of software,

stayed in the near past. Nowadays, most of developed eountries and somedeveloping eouotries, aceepted the copyright as the institute to proteet computeIsoftware.

Moreover, the main target, whieh was the proteetion of software, as anintelleetual property, has been aehieved. The effieieney of this roles still inquestioD.,vis a vis, the amount ofthe lost from infringements in 1992.

The globalization of the roles, seems to be an utopia, sinee the diversityof eeonoIDÍealeapacity of eaeh couotry, raise different interests to be defended.

Nevertheless, the adoption of copyright to proteet software in Japan,confirmed the tendency, and allowed a eertain uniformity.

The future, no one knows. And once the teehnology develops in a speedthat legal mIes canoot follow, in a near future, probably wiIl be necessary to

create a more efficient institute of law, more proper to protect the rights of

eomputer software.