Derivative Works in Japan: Navigating Rights, Royalties, and the "Essential Characteristics" Test

The creation of new works often involves drawing inspiration from, or building upon, pre-existing ones. When such creative endeavors result in a new work that incorporates and adapts an earlier piece, it enters the realm of "derivative works." In Japan, these are known as nijiteki chosakubutsu (二次的著作物). Understanding the legal framework surrounding derivative works is crucial, as it involves a complex interplay of rights between the author of the original work and the creator of the new, adapted work. This article delves into how Japanese copyright law defines and governs derivative works, the rights of the respective authors, and key judicial interpretations.

What is a Derivative Work Under Japanese Copyright Law?

Article 2, Paragraph 1, Item 11 of the Japanese Copyright Act defines a derivative work as one created by "translating, arranging musically, transforming, dramatizing, cinematizing, or otherwise adapting" a pre-existing work. These various acts of adaptation are often collectively referred to by the broader term hon'an (翻案).

A critical distinction must be made: a derivative work is not merely a reproduction with minor alterations. It must embody new creative expression contributed by the adapter. If the changes are trivial or mechanical, the resulting piece might simply be considered a reproduction (an infringement if unauthorized) rather than a new, protectable derivative work.

The Supreme Court of Japan, in its landmark judgment of June 28, 2001 (widely known as the Esa oiwake case, concerning a folk song documentary), provided a foundational definition for what constitutes an adaptation (specifically, a linguistic adaptation in that case, but its principles are considered broadly applicable). The Court stated that an adaptation (and thus the creation of a derivative work) involves:

1. Relying on (ikkyo shi) a pre-existing work;
2. Maintaining the identity of the essential expressive features (hyōgenjō no honshitsuteki na tokuchō no dōitsusei o iji shitsutsu) of that pre-existing work; and
3. Adding modifications, additions, or changes through new creative expression, such that a person encountering the new work can still directly perceive the essential expressive features of the pre-existing work.

Therefore, for a work to be considered derivative, it must be based on an existing copyrighted work, the adapter must have contributed their own original creative expression, and the core expressive elements of the original work must remain perceptible within the new creation.

Illustrative Forms of Derivative Works

The Copyright Act provides examples of acts that can lead to derivative works:

• Translation (翻訳 - honyaku): This involves re-expressing a linguistic work in a different language. The process inherently requires creative choices by the translator in vocabulary, syntax, and nuance, thus adding new creative value. A purely mechanical, word-for-word conversion without such creative input (e.g., translating "Monday, Tuesday, Wednesday..." into its direct Japanese equivalents) would not result in a protectable derivative work.
• Musical Arrangement (編曲 - henkyoku): This refers to adapting a musical work, for instance, by changing its style (e.g., a classical piece arranged for a jazz ensemble) or instrumentation in a way that adds new creative elements. Simply adding a standard accompaniment to an existing melody without substantially altering it might be viewed as a reproduction of the melody combined with a new accompaniment, rather than an arrangement of the original melody itself. Likewise, a mechanical change in instrumentation without creative input may not qualify.
• Transformation (変形 - henkei): This involves changing the dimensionality or form of a work with added creativity, such as creating a three-dimensional sculpture based on a two-dimensional painting, or vice-versa. Court precedents include cases where illustrations were turned into dolls (Tokyo High Court, May 30, 2001, in the Kyūpī Irasuto I & II cases) or manga characters were embodied as model kits (Kyoto District Court, July 17, 1997, in the Garēji Kitto case). A mere mechanical reproduction, such as photographing a sculpture without any creative contribution to the photographic expression itself, would not typically create a derivative photographic work of the sculpture.
• Adaptation (翻案 - hon'an): This is a broader category encompassing various other modifications. The Act specifically lists "dramatization" (脚色 - kyakushoku), such as creating a script from a novel or manga, and "cinematization" (映画化 - eigaka), which is creating a film based on an existing work. In these instances, the storyline and expressive elements of the original work are utilized and built upon.

It is vital to distinguish the creation of a derivative work from the permissible use of mere ideas, themes, or abstract plotlines from an existing work. The idea-expression dichotomy dictates that only the concrete expression is protected, not the underlying ideas. Taking only abstract concepts is not an infringement and does not create a derivative work.

The Dual Rights Structure: Original and Derivative Authors

When a derivative work is lawfully created, a dual structure of rights emerges.

1. Rights of the Derivative Author: The individual who creatively adapts the original work is considered an author in their own right. They acquire copyright (including economic and moral rights) in the new creative contributions they have made to the derivative work (Article 17, Japanese Copyright Act. Their work is protected independently as a new copyrighted piece.
2. Rights of the Original Author: The author of the pre-existing (original) work retains significant rights concerning the derivative work:
   • Right of Adaptation (Article 27): The original author has the exclusive right to authorize the creation of any derivative works based on their original piece. This includes the right to translate, arrange, transform, dramatize, or cinematize their work. Creating a derivative work without the original author's permission constitutes an infringement of this right.
   • Rights in the Exploitation of the Derivative Work (Article 28): This is a particularly important and somewhat unique feature of Japanese copyright law. Article 28 stipulates that, with respect to the exploitation of a derivative work, the author of the original work enjoys rights of the same types as those held by the author of the derivative work.
     This means, for example, if a novel is translated (creating a derivative linguistic work), and that translation is then published (reproduced and distributed), both the translator (as the author of the derivative work) and the original novelist (as the author of the pre-existing work) can exercise their respective rights of reproduction and distribution concerning that published translation.
     Consequently, any third party wishing to exploit the derivative work (e.g., publish the translation, broadcast the film adaptation) must typically obtain permission from both the author of the derivative work and the author of the original work. Similarly, the author of the derivative work generally needs the original author's consent to exploit their own derivative creation.

The original author's rights under Article 28 are distinct from the derivative author's copyright in their new contributions. The expiration of the derivative author's copyright (e.g., due to the passage of the protection term) does not, in principle, affect the continued existence or enforceability of the original author's Article 28 rights in the derivative work. An exception exists for cinematographic works, where the expiration of the film's copyright can also extinguish the original author's rights related to the use of their work in that film (Article 54, Paragraph 2).

The "Essential Characteristics" Test and Interpretive Challenges

The practical application of these principles, particularly determining whether a new work is indeed derivative and the extent of the original author's rights, often hinges on the interpretation of the Supreme Court's "essential expressive features" test from the Esa oiwake decision.

The "Overall Comparison" (全体比較論 - zentai hikakuron) Debate

A point of academic and judicial discussion revolves around whether the mere perceptibility of the original work's creative expression within a new work is always sufficient to trigger the original author's full rights, especially under Article 28. Some scholars and practitioners have advocated for an "overall comparison" theory (zentai hikakuron). This theory suggests that even if some creative elements of the original work are technically present and perceivable in the new work, if these elements have become "faded" (iroaseteiru), diluted, or are so overwhelmed by the newly added creative contributions that the new work, when viewed as a whole, projects a predominantly new and different character, then it might not be considered an infringing derivative work, or at least the original author's control under Article 28 might be attenuated.

The rationale behind this theory is to encourage transformative uses that significantly add new value and meaning, preventing an overly broad application of the original author's rights from stifling such creativity. However, the theory has also faced criticism for the inherent vagueness and subjectivity in determining when an original work's contribution is sufficiently "faded" or "submerged" within the new creation. The Esa oiwake Supreme Court decision itself did not definitively adopt or reject this approach, as the common elements in that specific case were ultimately deemed to be unprotected facts or ideas, not creative expression from the original folk song.

Some lower court decisions have appeared to lean towards a more holistic assessment. The Intellectual Property High Court judgment of August 8, 2012, in the Tsuri Gē Taun 2 (Fishing Game Town 2) case, has been cited by some as potentially supporting an overall comparison approach. In that case, concerning similarities between fishing game screen displays, the court found that the overall impression of the defendant's game screen was different from the plaintiff's, and that the "essential expressive features" of the plaintiff's work could not be "directly perceived" in the defendant's work as a whole.

Partial Use of Derivative Works and the Candy Candy Conundrum

The application of Article 28 becomes particularly complex when only portions of a derivative work are used:

• Use of Original Author's Elements Only: If a part of a derivative work that is exploited contains only the creative expression of the original author, with no creative contribution from the derivative author in that specific part, the derivative author cannot claim copyright infringement for the use of that part. This was established by the Supreme Court on July 17, 1997, in the Popai Nekutai (Popeye Tie) case.
• Use of Derivative Author's New Elements Only: Conversely, if a part of a derivative work that is exploited contains only new creative expression added by the derivative author, and the original author's creative expression is not perceptible in that specific part, the derivative author can clearly assert their copyright in that new contribution. The more difficult question is whether the original author can also assert rights under Article 28 over the use of this newly created, seemingly independent part.
  A strict textual reading of Article 28 (which grants the original author rights "of the same types" as the derivative author) might suggest so. However, a strong argument can be made that if the portion used is devoid of any of the original work's creative expression, it is no longer, for that specific exploitation, a "use of a derivative work" in a way that implicates the original author's interests.
  This issue was central to the highly publicized Kyandi Kyandi (Candy Candy) litigation. The original story writer (X) and the manga artist (Y) collaborated on the famous manga. Later, the artist (Y) independently created and authorized commercial products featuring new illustrations of the characters. The Tokyo High Court, in its judgment of March 30, 2000, held that for the purposes of Article 28, courts should not attempt to dissect a derivative work into elements solely attributable to the original author versus those solely attributable to the derivative author. It reasoned that such distinctions are often difficult or impossible to make and that, in a fundamental sense, all elements of a derivative work are, to some extent, reliant on the original's creative impetus. The Supreme Court, on October 25, 2001, upheld the High Court's decision, essentially affirming that the original author's rights under Article 28 can extend to the derivative work as a whole, including parts primarily showcasing the derivative author's new contributions, as long as the work as a whole qualifies as derivative. This broad interpretation gives significant leverage to original authors.

Successive Derivations (Derivatives of Derivatives)

Another layer of complexity arises with successive derivations: Work A is adapted into Work B, and then Work B is further adapted into Work Gamma. The author of Work B clearly has Article 28 rights with respect to Work Gamma. Does the author of Work A also have Article 28 rights concerning Work Gamma, perhaps through a cascading application of Article 28 via Work B? A purely mechanical interpretation could lead to an infinite regression of rights, where the very first author in a long chain of adaptations could claim rights in the latest iteration, even if their original expression has become heavily diluted or is no longer directly perceptible.

It is argued that the more principled approach is that an original author's Article 28 rights should only extend to subsequent derivative works as long as their own specific creative expression remains perceptible in that later work. If, through multiple adaptations, the original expression of Author A is no longer identifiable in Work Gamma, then Author A should not possess Article 28 rights in Work Gamma, even if Work Gamma is clearly derivative of Work B.

Comparison with U.S. Law on Derivative Works

The U.S. Copyright Act defines a "derivative work" in 17 U.S.C. § 101 as "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted." Key comparative points include:

• Originality in New Contributions: Like Japan, U.S. law requires that the material added by the author of the derivative work must itself possess sufficient originality to be copyrightable.
• Scope of Derivative Copyright: U.S. law explicitly states that copyright in a derivative work "extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material" (17 U.S.C. § 103(b)). This seems more aligned with a dissection approach than the holistic view taken in Japan's Candy Candy case regarding the original author's reach.
• Original Author's Rights: The U.S. copyright owner has the exclusive right to prepare and to authorize the preparation of derivative works (17 U.S.C. § 106(2)). This is analogous to Japan's Article 27.
• Absence of a Direct Article 28 Equivalent: The U.S. system does not have a statutory provision directly equivalent to Japan's Article 28, which grants the original author co-extensive rights in the exploitation of the derivative work itself. In the U.S., the original author's control is primarily exercised through their exclusive right to authorize the creation of the derivative. The terms of any license granted to create the derivative work would typically govern royalties and any ongoing control or revenue share from the derivative's exploitation. The derivative author owns the copyright in their new contributions. If an unauthorized derivative work is created, the original author can sue for infringement of their exclusive right to prepare derivative works based on their underlying work.
• Fair Use: A significant difference is the U.S. doctrine of fair use (17 U.S.C. § 107), which can excuse certain unauthorized uses, including some that might be transformative and create derivative works (e.g., parody), based on a four-factor balancing test. Japan relies on specific, enumerated exceptions rather than a broad fair use doctrine.

Conclusion

Navigating the law of derivative works in Japan requires careful attention to the definition of what constitutes an adaptation, the new creativity added, and the continuing perceptibility of the original work's essential expressive features. The dual rights structure, particularly the original author's far-reaching rights under Article 28, means that securing permissions from all relevant rights holders is paramount. While the Esa oiwake case provides a guiding test, ongoing debates and varying judicial interpretations, as seen in the "overall comparison" discussions and the Candy Candy litigation, indicate that this remains a dynamic and sometimes challenging area of Japanese copyright law.