My Song Was Stolen Abroad! Copyright Infringement and Parallel Imports of Music CDs/DVDs into Japan

Japanese Attorney at Law - Bengoshi L.L.

• 7 min read

The global dissemination of creative works is easier than ever, but it also brings complex copyright challenges. Imagine a Japanese singer-songwriter discovers their hit song has been plagiarized by an artist in a foreign country. To make matters worse, CDs and DVDs containing this unauthorized version, or even legitimate foreign versions of their own work, start appearing for sale in Japan. What rights does the Japanese artist have to control these imports and sales on their home turf? This article explores how Japanese copyright law addresses such cross-border scenarios, focusing on the rights of transfer and distribution, the principle of exhaustion, and specific "deemed infringement" provisions.

Foundational Copyrights: The Rights of Transfer and Distribution in Japan

When copyrighted works are embodied in physical copies like CDs or DVDs, Japanese copyright law grants authors specific rights to control their circulation:

  1. The Right of Transfer (Jōto Ken) - Copyright Act Article 26-2:
    This right applies to most copyrighted works (excluding cinematographic works for this specific right, which are covered by the Right of Distribution). It grants the copyright holder the exclusive right to offer their work (original or copies) to the public by transfer of ownership. Essentially, it controls the first sale of a copy.
    • Domestic Exhaustion: A crucial limitation is that once a copy of a work (e.g., a music CD) has been lawfully transferred to the public in Japan with the authorization of the copyright holder, the Right of Transfer with respect to that particular copy is considered "exhausted." This means the copy can then be freely resold within Japan without further permission (e.g., in a used CD store).
    • International Exhaustion: Generally, Japanese copyright law also recognizes international exhaustion for the Right of Transfer. This means that if a copy of a work was lawfully sold abroad with the copyright holder's consent, importing that copy and reselling it in Japan typically does not infringe the Right of Transfer (Art. 26-2(2)(v) outlines circumstances where the right is exhausted by transfers outside Japan).
  2. The Right of Distribution (Hampu Ken) - Copyright Act Article 26:
    This right is specific to "cinematographic works." Under Japanese law, this category is broad and includes not only theatrical films but also most video games and audiovisual recordings like music concert DVDs. The Right of Distribution grants the author the exclusive right to distribute copies of their cinematographic work to the public by transfer of ownership or by lending. It also covers offering copies for the purpose of public presentation (e.g., supplying a film print to a cinema).
    • Exhaustion of the Distribution Right for Cinematographic Works: This is more nuanced. The Supreme Court of Japan, in its landmark Used Game Software Case (Judgment of April 25, 2002), held that the distribution right concerning the transfer of ownership (i.e., sale) of copies of game software intended for private home use is exhausted by the first lawful sale in Japan. This ruling paved the way for a legitimate secondary market for used video games.
    • The applicability of this exhaustion principle to other types of cinematographic works (like movie DVDs), to the lending aspect of the distribution right, and to international scenarios requires careful consideration. Legal commentary suggests that the lending component of the distribution right is likely not exhausted by a first sale, to maintain consistency with the separate Right of Lending (Art. 26-3) for other works (like books or music CDs), which is not exhausted for commercial rental businesses.

When Imports Become Infringements: "Deemed Infringement" under Article 113

While the exhaustion principle (especially international exhaustion for the Right of Transfer) might suggest that many imported goods can be freely sold, Article 113 of the Copyright Act contains crucial "deemed infringement" provisions that can override this in specific circumstances.

1. Importing and Distributing Infringing Items (Art. 113(1)(i) & (ii))
These provisions are vital for combating piracy:

  • Article 113(1)(i): Importing items into Japan for the purpose of distributing them in Japan, where such items, if they had been made in Japan at the time of importation, would have constituted an infringement of copyright (or moral rights, or neighboring rights). This targets goods made abroad entirely without the Japanese rights holder's consent (i.e., pirated goods).
  • Article 113(1)(ii): Knowingly distributing, or possessing for the purpose of distribution, items that infringe copyright (e.g., pirated goods, whether made in Japan or abroad, or items covered by Art. 113(1)(i)). The "knowledge" (情を知って, jō o shitte) element is critical for downstream sellers.

2. The "Record Import Ban" – A Key Exception to International Exhaustion (Art. 113(5))
This highly specific provision, often referred to as the "Record Import Ban," creates a significant exception to the general principle of international exhaustion for the Right of Transfer, specifically for commercial phonograms (records, CDs, digital music files sold as products). It is designed to protect the domestic Japanese market for recordings by Japanese artists or recordings primarily aimed at the Japanese market.

Article 113(5) deems the following acts as copyright infringement if they unreasonably prejudice the profits the copyright holder could expect from sales in the domestic market:

  • Importing, for the purpose of distribution in Japan, commercial phonograms that were manufactured abroad with the Japanese copyright holder's authorization but were intended exclusively for distribution outside Japan ("overseas market phonograms").
  • Distributing such imported "overseas market phonograms" in Japan, or possessing them for such distribution, with knowledge of these facts.

This provision applies only if the copyright holder (or their exclusive licensee) also issues or has issued commercial phonograms of the same recording that are intended for distribution within Japan ("domestic market phonograms"). Furthermore, this restriction on importing "overseas market phonograms" is time-limited: it generally does not apply after a certain period (currently four years under the Copyright Act Enforcement Order) has elapsed from the first sale of the "domestic market phonogram" in Japan.

Analyzing Cross-Border Scenarios: The Artist's Rights

Let's apply these principles to a hypothetical scenario involving "Artist X," a Japanese singer-songwriter, whose song "Melody 2007" is exploited abroad by "Artist A" under the title "Tune 2017." A retail chain in Japan, "Retailer Y," then imports and sells CDs and DVDs related to "Tune 2017."

Scenario 1: The Plagiarized Foreign CD (Unauthorized Copy – "CD1")
Artist A initially releases "Tune 2017" (which is identical to X's "Melody 2007") on a CD in a foreign country before any agreement with X. This CD ("CD1") is made without X's authorization.

  • Retailer Y's Import of CD1 for Sale: This act would be deemed an infringement of X's copyright under Article 113(1)(i), as CD1, if made in Japan, would have infringed X's reproduction rights.
  • Retailer Y's Sale of CD1:
    • If Retailer Y sells CD1 knowing it's an unauthorized copy, this constitutes deemed infringement under Article 113(1)(ii).
    • If Retailer Y was initially unaware (e.g., an employee purchased CD1 from a foreign supplier believing it to be legitimate, perhaps mixed with other legitimate stock), initial sales might not meet the "knowledge" requirement. However, once Artist X notifies Retailer Y of the infringing nature of CD1, any subsequent sales would be made with the requisite knowledge.

Scenario 2: The Legitimately Licensed Foreign CD (Authorized Overseas Version – "CD2")
After X discovers the plagiarism, X and Artist A reach an agreement: A can continue to use "Tune 2017" in the foreign country provided X is credited as the composer, and X receives a share of the profits. CDs made under this agreement ("CD2") are lawfully manufactured abroad with X's consent. Retailer Y imports these legitimate CD2s into Japan.

  • General International Exhaustion: Since CD2 was lawfully placed on the market abroad with X's consent, the general principle of international exhaustion under Article 26-2(2)(v) would suggest that Retailer Y can import and sell CD2 in Japan without infringing X's Right of Transfer.
  • The Article 113(5) "Record Import Ban" Exception: This is where it gets complicated.
    • If Artist X also has a version of "Melody 2007" (or a similar recording) that is specifically manufactured and sold for the Japanese domestic market ("domestic market phonogram"), AND
    • CD2 (the version made by Artist A under license) was intended by X and A only for distribution outside Japan ("overseas market phonogram"), AND
    • The import and sale of CD2 in Japan by Retailer Y occurs within the restricted period (e.g., four years from the first release of X's domestic version), AND
    • Such sales unreasonably prejudice the profits X could expect from their domestic market sales,
    • THEN, the import and sale of CD2 by Retailer Y could be deemed copyright infringement under Article 113(5), despite CD2 being a legitimate foreign pressing.
      If there is no "domestic market phonogram" released by or under the authority of X in Japan to compare against, then Article 113(5) is unlikely to apply. The problem in the PDF notes that "A's CD album's 'Japanese version' does not exist," which steers away from Art. 113(5) application against A's specific foreign version. However, if X has their own distinct Japanese release of "Melody 2007," that could trigger the analysis.

Scenario 3: The Legitimately Licensed Foreign DVD (Cinematographic Work)
A DVD featuring a live performance of "Tune 2017" by Artist A is also made abroad under the agreement with X and imported by Retailer Y. This DVD is a "cinematographic work."

  • Sale of the DVD: The governing right here is the Right of Distribution (Art. 26). Does the principle from the Used Game Software Case (international exhaustion of the sale aspect of the distribution right) apply to a concert DVD? There's no definitive Supreme Court ruling on this specific point for all types of cinematographic works in an international context. Courts would likely consider factors such as whether the DVD was region-coded (the PDF scenario says it's "region-free," suggesting broad intended circulation), the terms of the underlying license from X to A, and whether preventing its import and sale is necessary to protect X's legitimate market interests in Japan. If the DVD was made with X's consent for potentially global distribution, an argument for exhaustion of the transfer of ownership right could be strong.
  • Rental of the DVD: If Retailer Y were to rent out the imported legitimate DVD in Japan (instead of selling it), the situation changes. The lending component of the Right of Distribution for cinematographic works (Art. 26) is generally not considered to be exhausted by a first sale, whether domestic or international. This is to ensure that copyright holders can control the lucrative rental market and is consistent with the separate Right of Lending (Art. 26-3) for works like books and music CDs, which is explicitly designed not to be exhausted for commercial rentals. Therefore, Artist X would likely be able to prevent Retailer Y from commercially renting out the imported DVDs in Japan without a specific rental license.

The interplay of copyright, international exhaustion principles, and Japan's specific "deemed infringement" provisions creates a complex regulatory environment for parallel imports.

  • Clearly pirated goods made without any authorization from the Japanese rights holder can be blocked effectively using Article 113(1).
  • For legitimate goods (like music CDs) manufactured abroad with the Japanese rights holder's consent, their import and sale in Japan are generally permitted under international exhaustion of the Right of Transfer, unless the strict conditions of the Article 113(5) "Record Import Ban" are met.
  • For cinematographic works like DVDs, the exhaustion of the Right of Distribution for sales of imported legitimate copies is more nuanced and may depend on the specifics of the release, while the right to control commercial rental of such imported copies generally remains with the copyright holder.

Businesses involved in importing or selling foreign versions of copyrighted works in Japan must carefully navigate these rules to avoid infringement, paying close attention to the nature of the product, its authorization status, and the specific provisions of Japanese copyright law.