Moral Rights of Authors under Japanese Copyright Law: Legal Risks and Countermeasures Businesses Should Know

Under Japanese law, rights arising from creative activities possess two distinct natures. One is the ‘copyright (property right),’ an economic right that can be licensed or transferred. This concept is widely recognized internationally. However, there is another crucial right at the core of the Japanese copyright system: the ‘moral rights of authors.’ This right protects the personal and spiritual connection that creators have with their works and, under Japanese Copyright Law, is an inalienable right exclusive to the individual. This non-transferability creates unique and significant legal risks in corporate activities. Even if a company believes it has fully acquired copyright through a contract, the individual creator retains their moral rights. Consequently, there is a potential for creators to later object to modifications or uses of the work necessary for business, leading to legal actions such as injunctions or claims for damages. This article first clarifies the basic concept of moral rights in comparison with copyright (property rights). Next, it specifically explains the three main rights that constitute moral rights—namely, the right of disclosure, the right to claim authorship, and the right to integrity—incorporating Japanese case law. Finally, it details the most effective legal framework for systematic management of these risks by companies, the ‘work-for-hire’ system, and provides practical guidelines.

The Fundamental Concepts of Moral Rights: Distinguishing Copyright as Property Rights Under Japanese Law

In Japanese copyright law, the rights of authors are broadly classified into two categories. One is ‘copyright (property rights),’ which protects the economic value of a work, and the other is ‘moral rights,’ which protect the personal and spiritual interests of the author, namely the personal connection between the creation and the author. Article 17, Paragraph 1 of the Japanese Copyright Law stipulates that authors have both of these rights.

The most significant personalityistic of moral rights is their inalienability. Article 59 of the Japanese Copyright Law clearly states that “moral rights are exclusive to the author and cannot be transferred.” This means that moral rights are inseparable from the author’s personality and remain permanently with the original creator, even if the copyright (property rights) is transferred to another party through a contract. This legal nature is of utmost importance in the practice of contracts related to the licensing and transfer of rights. Simply concluding a contract that states “transfer of copyright” does not manage the risks associated with moral rights. For companies to use works freely and flexibly, it is essential to address moral rights separately from the acquisition of copyright (property rights).

The table below summarizes the basic differences between these two types of rights.

The Right of Disclosure: Managing Unpublished Works Under Japanese Copyright Law

The right of disclosure, as defined in Article 18 of the Japanese Copyright Law, grants the author the exclusive right to decide when and how to make their unpublished work available to the public. This right is crucial for authors to control the initial presentation of their creations. In the corporate world, there are numerous unpublished works such as draft business plans, confidential research and development reports, pre-release software, and advertising designs awaiting final approval. Disclosing these works without the consent of the author, who may be an employee or an external contractor, could potentially infringe upon their right of disclosure.

However, Japanese Copyright Law provides for certain situations where the author’s consent is legally ‘presumed.’ According to Article 18, Paragraph 2, Item 1 of the Japanese Copyright Law, when the copyright (property rights) of an unpublished work is transferred, it is presumed that the author has consented to the transferee making the work available to the public as an exercise of those rights. This provision aims to facilitate the smooth use of unpublished works acquired by a company through contracts. However, it is important to note that this ‘presumption’ can be legally overturned. The legal effect of ‘presuming’ is weaker than that of ‘deeming,’ and if the author can prove that they transferred the copyright but did not consent to the publication, the presumption can be reversed. Therefore, when a company acquires an unpublished work and plans to publish it in the future, it is wise not to rely solely on this presumption. Instead, obtaining a clear and irrevocable consent from the author regarding the timing and method of publication in the contract can be a prudent strategy to prevent disputes.

Right of Attribution: Determining the Credit of the Author Under Japanese Copyright Law

The right of attribution is stipulated in Article 19 of the Japanese Copyright Law. This right ensures that an author can choose to display their real name, use a pseudonym, or remain anonymous when publishing their work. Those who utilize the work are generally obligated to adhere to the method of attribution already established by the author.

However, there are exceptions to this right. Article 19, Paragraph 3 of the Japanese Copyright Law states that “when it is recognized that there is no risk of harming the interest of the author in claiming to be the creator in light of the purpose and manner of the use of the work, the indication may be omitted as long as it does not contravene fair practices.” For example, it is commonly understood that announcing the name of the composer for each song played as background music in restaurants or stores falls under this exception.

Recent technological advancements have presented new challenges to the right of attribution. A symbolic case is the decision by the Supreme Court of Japan on July 21, 2020 (commonly known as the “Retweet Case”). In this case, a photographer’s photo, which had been posted on Twitter with their name displayed, was retweeted by a third party. Due to the specifications of Twitter’s system, the image was automatically cropped, and the photographer’s name was removed from the display on the timeline. The Supreme Court ruled that even if the person who retweeted the photo did not intend to remove the name, the fact that the photo was presented to the public without the name constituted an infringement of the photographer’s right of attribution. This judgment provides important implications for companies engaged in website operation, application development, and social media marketing. It underscores that from the design stage of systems that automatically process and display content, technical considerations must be made to ensure that an author’s credit is not unintentionally deleted. It is essential to recognize that infringement of the right of attribution can occur not only through direct human actions but also through the automatic operations of systems.

The Right of Integrity: Protecting the Integrity of Works Under Japanese Copyright Law

The right of integrity is one of the most powerful rights within the moral rights of authors and is often the cause of disputes in business practices. Article 20, Paragraph 1 of the Japanese Copyright Law states, “The author has the right to preserve the integrity of their work and its title, and shall not be subjected to any alterations, deletions, or other modifications against their will.” This right protects authors from unauthorized changes to the content or title of their creations. For instance, altering the storyline of a novel, adjusting the color scheme of an illustration, or removing part of a logo design could all potentially infringe upon the right of integrity.

Of course, not all modifications are prohibited. Article 20, Paragraph 2 of the Japanese Copyright Law enumerates several exceptions where the right of integrity does not apply. Among these, the most relevant to corporate practice is item 4, which refers to “alterations that are deemed necessary in light of the nature of the work, the purpose and manner of its use.” However, determining what constitutes a “necessary” alteration is very ambiguous and can be a legally unpredictable area. Even business-as-usual actions, such as resizing an image for a website or shortening text to create a report summary, could lead to disputes if the author claims that their creative intent has been compromised.

It is important to note that the requirement of “against their will” is judged not only by the author’s subjective feelings but also by objective standards. However, the boundary between this objective judgment and “necessary alterations” is unclear, making this right a powerful negotiating tool for creators. To avoid litigation risks over minor modifications, companies may be forced into unfavorable settlements with creators. To eliminate such uncertainties, it is highly effective to enumerate anticipated modifications (such as resizing, cropping, color correction, etc.) in contracts regarding the use of works and to include clauses where the author provides comprehensive prior consent to these changes as a risk management strategy.

Key Japanese Case Law on the Right of Integrity

To understand the interpretation and scope of the right of integrity, let us introduce two important Japanese case law examples.

The first is the Supreme Court of Japan’s decision on February 13, 2001 (commonly known as the “Tokimeki Memorial case”). In this case, a vendor who sold memory cards capable of illegally altering the parameters of the popular romance simulation game “Tokimeki Memorial” was sued. The defendant (the vendor) argued that they did not directly modify the game’s program itself. However, the Supreme Court recognized that using the memory cards sold by the defendant changed the game protagonist’s parameters to values that were not originally possible, thereby altering the game’s storyline and personality portrayal beyond the scope intended by the author. The Court ruled that the act of selling devices that facilitate such alterations constitutes an illegal act that promotes infringement of the author’s right of integrity. This judgment has set an important precedent, especially for the software and digital content industry, indicating that not only direct alterations of a work but also providing tools or services that enable third-party modifications can constitute an infringement of the right of integrity (indirect infringement).

The second case is the Tokyo District Court’s decision on March 26, 1999 (commonly known as the “Dolphin Photo case”). In this case, a publisher used photographs of whales and dolphins taken by a photographer in a magazine without prior permission, trimming (cutting off parts from the top, bottom, left, and right) and overlaying text on the photos for layout purposes. The publisher claimed that the alterations were necessary for the magazine’s layout and did not harm the essence of the work. However, the court found that the trimming changed the original composition of the photographs, which did not align with the creator’s intent. The act of overlaying text was also deemed equivalent to an act of excision that covered parts of the photograph, and the court ruled that both actions infringed the photographer’s right of integrity. This judgment clearly indicates that in fields such as advertising, publishing, and web design, any alteration that affects the author’s creative expression, even if necessary for design or technical reasons, can constitute an infringement of the right of integrity.

Work-for-Hire Creations: The Legal Framework for Corporations as Authors Under Japanese Copyright Law

As we have seen, the right of authorship, which is non-transferable, encompasses risks that are difficult for corporations to manage. The most comprehensive and powerful legal tool to resolve this fundamental issue is the system of “work-for-hire” creations, as stipulated in Article 15 of the Japanese Copyright Law.

The most significant feature of the work-for-hire system is that, when certain requirements are met, the corporation or other employer, rather than the individual employee who actually created the work, acquires the status of “author” from the inception of the creation. This allows the corporation to originally acquire not only the copyright (property rights) but also the moral rights of the author. As a result, the individual creator does not have moral rights, thus completely eliminating the potential risks associated with their non-transferability. This system is an important exception to the principle of “the creator becomes the author” (creatorship principle) in Japanese copyright law, established to support the smooth operation of corporate business activities. However, since this is an exceptional provision, courts tend to interpret its requirements strictly. For a corporation to benefit from this system, it is essential to ensure that each of the established requirements is met and to maintain evidence of compliance.

Requirements for the Establishment of Work-for-Hire Creations and Practical Considerations Under Japanese Copyright Law

In order for a work-for-hire creation to be established, it must meet all of the following requirements set forth in Article 15 of the Japanese Copyright Law:

1. It must be created based on the initiative of a corporation or other employer (hereinafter referred to as “corporation etc.”).
2. It must be created by an individual engaged in the business of the corporation etc.
3. It must be something that the individual creates as part of their job duties.
4. The corporation etc. must publish it under its own name as the author. (However, this requirement is not necessary for computer program works.)
5. There must be no special provisions in the contract, work rules, or otherwise at the time of creation.

Among these requirements, the most challenging to interpret in practice is the scope of “individuals engaged in the business of the corporation etc.” as stated in the second requirement. It is clear that full-time employees meet this requirement, but the judgment becomes complex when it comes to works created by external creators such as contractors or freelancers.

In this regard, the Japanese Supreme Court’s decision on April 11, 2003 (commonly known as the “RGB Case”) provided important criteria for judgment. The Supreme Court ruled that whether an individual qualifies as “engaged in the business” should not be determined by formal criteria such as the name of the contract (e.g., “service contract”), but rather by whether there is a substantial relationship of direction and supervision between the employer and the creator, and whether the money paid can be evaluated as compensation for labor. This should be substantively judged by comprehensively considering the nature of the work, the presence or absence of direction and supervision, the amount and method of payment, and other specific circumstances.

What this precedent indicates is that companies cannot easily expect the establishment of work-for-hire creations in their relationships with external professionals. Freelance designers and programmers, who typically do not operate under the direct supervision of a company and carry out their work as independent business operators, are less likely to be recognized as “individuals engaged in the business.” Therefore, companies need to think about their intellectual property management strategy in a dualistic manner. For works created by employees, companies secure rights by preparing employment contracts and work regulations to ensure that the requirements for work-for-hire creations are met. On the other hand, for works created by external contractors, rather than relying on the establishment of work-for-hire creations, the only certain risk management measure is to clearly define the transfer of copyright (property rights) in the contract and to set up a special agreement (non-exercise agreement) stating that the creator will not exercise moral rights.

Summary

In Japanese copyright law, the moral rights of authors are inalienable and serve as a powerful means to protect the personal interests of creators. If companies overlook these rights, they may face serious management risks such as delays in business plans or unexpected litigation. The right of disclosure, the right to claim authorship, and especially the right to integrity, all directly impact a company’s public relations, development, and marketing activities. The most reliable way to effectively manage these risks is to take measures from both internal systems and external contracts. For works created by employees, it is essential to accurately understand the requirements of the work-for-hire system and to establish internal regulations and operations to ensure its proper application. On the other hand, when collaborating with external creators such as freelancers or contractors, it is crucial to not rely on the establishment of work-for-hire and to conclude clear and specific contracts that include the transfer of copyright and a special agreement on the non-exercise of moral rights.

Monolith Law Office has extensive experience representing a wide range of domestic and international clients in complex cases involving Japanese copyright law, particularly moral rights of authors. Our firm includes professionals with international backgrounds, including English-speaking attorneys with foreign qualifications, enabling us to provide accurate advice on the Japanese legal system from a global perspective. We offer comprehensive legal support related to the content discussed in this article, from the creation and review of employment contracts and service agreements to the formulation of internal policies for intellectual property management, and even handling disputes should they arise.