Online Copyright Infringement in Japan: ISP Liability and Key Court Rulings on Intermediaries

Japanese Attorney at Law - Bengoshi L.L.

31 May 2025 • 9 min read

The internet has revolutionized content distribution, but it has also created unprecedented challenges for copyright enforcement. When users engage in infringing activities online—such as unauthorized file-sharing or streaming—the role and responsibility of the intermediaries that provide the platforms and infrastructure, like Internet Service Providers (ISPs) and platform operators, come under intense scrutiny. Japanese law addresses this complex issue through a combination of general tort principles, evolving judicial interpretations of who constitutes an "infringing entity," and specific legislation known as the Provider Liability Limitation Act.

Who is the "Infringing Entity"? The Expanding Scope for Injunctions

Under Article 112 of the Japanese Copyright Act, a copyright holder can seek an injunction (差止請求 - sashitome seikyū) against a person who is infringing or is likely to infringe their rights. While the most straightforward "infringing entity" (侵害主体 - shingai shutai) is the individual directly committing the unauthorized act of reproduction or public transmission, Japanese courts have, over time, expanded this concept to include entities that, while not directly performing the infringing act themselves, play a crucial role in enabling, managing, or profiting from it.

The "Karaoke Doctrine" and Its Normative Assessment

A foundational development in this area was the Supreme Court's judgment of March 15, 1988, in the Club Cats Eye case. This case concerned karaoke bars where customers would sing copyrighted songs using backing tracks provided by the establishment. The Supreme Court held that the bar owner, not just the singing customer, could be deemed the entity "performing" the songs and thus directly liable for infringing the composers' performance rights. The Court's reasoning focused on two key factors:

Management and Control: The owner managed and controlled the customers' singing activities by providing the necessary equipment, controlling the selection of songs, and often having employees encourage or facilitate the performances.
Commercial Benefit: The owner derived commercial profit from these customer performances, as they attracted patrons to the establishment.

This "Karaoke Doctrine" established a normative approach to identifying the infringing entity, looking beyond the person physically committing the final act to the one who orchestrates and benefits from the infringing environment. This principle was later extended to operators of "karaoke boxes" (private karaoke rooms), even where direct employee involvement in song selection was minimal, based on the operator's control over the premises, equipment, and available song database, and the clear commercial purpose (e.g., Osaka District Court Decision, December 12, 1997 - Karaoke Room Network case; Tokyo District Court, August 27, 1998 - Big Echo I case).

The core question for online intermediaries became how these judicially developed concepts of "management/control" and "commercial benefit" would apply in the digital realm.

Key Court Rulings on Online Intermediary Liability

Japanese courts have grappled with applying these principles to various online services:

The Tokyo High Court's decision on March 31, 2005, in the File Rogue case, addressed a centralized peer-to-peer (P2P) file-sharing service. Users of the service directly exchanged MP3 files (infringing public transmission rights), while the service provider maintained a server that indexed the files available on users' computers and facilitated the connections. The court found the service provider itself to be an infringing entity responsible for making the works transmittable. The reasoning was multifaceted, considering:

The nature of the service (specifically designed and promoted for MP3 file exchange, thus having a high probability of infringing use).
The provider's capacity for management and control (including the ability to monitor and remove infringing files, which was inadequately exercised).
The commercial benefit derived by the provider (e.g., through advertising on its software download pages).
This ruling demonstrated a willingness to hold service operators directly accountable when their platforms were intrinsically linked to widespread infringement and they failed to take reasonable steps within their control.

B. TV Program Recording and Retransmission Services: Rokuraku II and Maneki TV

Two Supreme Court decisions in 2011 provided crucial, albeit nuanced, guidance regarding services that enabled users to access Japanese television broadcasts remotely:

The Rokuraku II Case (Supreme Court, January 20, 2011): This service involved users purchasing a "parent" device, which was kept and managed by the service operator in Japan. This device recorded TV broadcasts as per the user's remote instructions, and the recordings were then transmitted to the user's "child" device, often located overseas. The primary issue was who was the entity making the reproductions (the recordings). The Supreme Court overturned a lower court decision that had found the user to be the reproducer. It emphasized that the service provider's management and control over the recording equipment (the parent device) and, crucially, the act of inputting the broadcast signal into that equipment, were pivotal. By performing this "pivotal act" (sūyō na kōi) of inputting the signal into devices under its control, the service provider was likely the entity responsible for the reproduction.
The Maneki TV Case (Supreme Court, January 18, 2011): This service also involved user-specific base stations managed by the service provider in Japan, which received TV signals. However, unlike Rokuraku II, these signals were transmitted to the user's paired device in real-time (streaming), without an intermediate recording step by the service. The issue here was infringement of the right of making transmittable (sōshin kanōkaken) and the right of public transmission. The Supreme Court found the service provider to be the infringing entity. It reasoned that the provider, by setting up, maintaining, and connecting the base stations to antennas and thereby inputting broadcast signals into them, was the party creating the state whereby the signals could be automatically transmitted to users upon their request. The Court also determined that the users, being an indeterminate group from the provider's perspective at the point of service contracting, constituted the "public" for the purposes of public transmission rights.

These cases underscore the importance of who controls the technical infrastructure and, critically, who performs the key act of "inputting" the copyrighted content into the system that enables its reproduction or transmission. For cloud services, if a user uploads their own legitimately acquired content to their own designated cloud storage space primarily for personal backup or access, the user is generally considered the entity making the reproduction (which may be permissible under private use exceptions, subject to limitations). However, the Rokuraku II and Maneki TV rulings suggest that if the service provider is the one inputting third-party content into the system or the system architecture gives the provider substantial control over the reproduction or transmission process initiated by users, the provider's liability as an infringing entity becomes a strong possibility.

C. Online Bulletin Boards: The 2channel Case

The liability of operators of online bulletin boards for user-posted infringing content was addressed by the Tokyo High Court on March 3, 2005, in a case involving the anonymous forum "2channel" (the Shogakukan case). While users posting infringing material are direct infringers, the court considered the operator's liability for failing to remove such content. It held that an operator could be deemed liable for copyright infringement by omission if they became aware (e.g., through a rights holder's notification) or should reasonably have become aware of the infringing content and failed to remove it within a reasonable period. The operator's control over the platform and the difficulty for rights holders in pursuing anonymous users were key considerations. The court found that the operator's failure to act upon takedown notices regarding clear instances of infringement amounted to culpable inaction contributing to the ongoing infringement. This approach shows an overlap with principles later codified in the Provider Liability Limitation Act.

The Intellectual Property High Court decision of September 8, 2010, in the TV Break case, concerned a video-sharing site where users uploaded numerous infringing videos. The court found the site operator itself to be the entity infringing the rights of reproduction (by storing the uploaded files on its servers) and the right of making transmittable. The court's reasoning was comprehensive:

The service was inherently high-risk for copyright infringement.
The operator controlled the site and derived commercial benefit from it (e.g., advertising revenue).
The operator actively induced user uploads and essentially used these user-generated (often infringing) contributions as the core content of its service.
The operator was aware of the widespread infringement (a high percentage of hosted content was infringing) yet failed to implement adequate preventative measures or promptly remove infringing content upon notification.
Under these circumstances, the operator was not seen as a mere passive conduit but as an active participant that utilized and profited from the infringing acts of its users, making it normatively responsible as an infringing entity. The operator was also identified as an "originating sender" (hasshinsha) in the context of the Provider Liability Limitation Act.

The Provider Liability Limitation Act (PLALA)

Enacted in 2001, the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Disclosure of Sender Information (特定電気通信役務提供者の損害賠償責任の制限及び発信者情報の開示に関する法律 - colloquially, プロバイダ責任制限法 Purobaida Sekinin Seigen Hō) primarily aims to:

Provide "safe harbors" that limit the monetary damages liability of qualifying service providers (ISPs, web hosting services, platform operators, etc.) for copyright infringements and other illegal acts committed by their users.
Establish procedures for rights holders to request the removal or blocking of infringing content (a form of "takedown" process).
Establish procedures for victims of online defamation or rights infringement to request the disclosure of identifiable information about the anonymous users responsible.

Safe Harbors from Damages Liability (Article 3 of PLALA):
A service provider is generally not liable for damages arising from infringing information transmitted or made available by users if:

It was technically impossible for the provider to prevent the transmission of the infringing information; OR
The provider did not know that the information transmission infringed rights, AND had no reasonable grounds from which it should have been apparent that rights were being infringed (Article 3, Paragraph 1).

Even if a provider does acquire knowledge (or has reasonable grounds to know) of an infringement, it can still avoid damages liability if it takes prompt measures to block the infringing information (sōshin bōshi sochi). Specific procedures apply if it's unclear whether the user has a legitimate right to transmit the information, often involving notifying the user and allowing them a period (typically 7 days) to object before blocking occurs.

Relationship with "Infringing Entity" Status for Injunctions:
It is crucial to understand that PLALA primarily addresses monetary damages liability. It does not directly define who is an "infringing entity" for the purpose of an injunction under Article 112 of the Copyright Act. An injunction aims to stop or prevent the infringing act itself.

However, the principles embedded in PLALA—particularly those related to knowledge of infringement, the ability to control the infringing content, and the consequences of failing to act upon such knowledge—have evidently influenced judicial assessments of whether an intermediary's conduct (or prolonged inaction) makes them liable to an injunction as if they were a direct infringer. Cases like 2channel and the Rakuten/Chuppa Chups trademark case suggest that if an operator is notified of clear infringement on its platform and fails to take appropriate action within a reasonable timeframe, its continued hosting or facilitation of that infringement can itself be viewed as an infringing act subject to injunction. Thus, while PLALA's safe harbors are primarily for damages, its underlying standards of care and responsibility often inform the broader analysis of an intermediary's potential direct liability for injunctive relief.

Comparison with U.S. Law: DMCA Safe Harbors

The U.S. approach to online intermediary liability for copyright infringement is largely governed by the Digital Millennium Copyright Act (DMCA), particularly Section 512, which provides "safe harbors" from monetary liability (and limitations on injunctive relief) for qualifying online service providers (OSPs). Key aspects include:

Categorized Safe Harbors: DMCA § 512 offers distinct safe harbors for different OSP functions: transitory digital network communications (512(a)), system caching (512(b)), information residing on systems or networks at the direction of users (e.g., web hosting, platform hosting - 512(c)), and information location tools (e.g., search engines - 512(d)).
Notice and Takedown: A central feature, especially for the 512(c) safe harbor, is the robust notice-and-takedown system. OSPs must designate an agent to receive notifications of claimed infringement. Upon receiving a compliant takedown notice from a copyright holder, the OSP must expeditiously remove or disable access to the allegedly infringing material to maintain its safe harbor protection. There are also provisions for counter-notifications by users.
Knowledge Standards: To qualify for safe harbors, OSPs generally must not have actual knowledge of the infringing activity, not be aware of facts or circumstances from which infringing activity is apparent ("red flag" knowledge), and, in cases where they have the right and ability to control such activity, not receive a financial benefit directly attributable to it.
No General Monitoring Obligation: Generally, OSPs are not required to proactively monitor their services for infringing activity to qualify for safe harbors, though willful blindness can vitiate protection.

While both the Japanese PLALA and the U.S. DMCA aim to balance copyright protection with the facilitation of online services, they differ in their specific mechanisms, scope, and the way liability for injunctions versus damages is delineated. The U.S. system is often seen as more procedurally detailed regarding the notice-and-takedown process for qualifying for safe harbors, including those related to injunctive relief. In Japan, liability for injunctions against intermediaries often hinges more directly on whether the court deems the intermediary itself an "infringing entity" based on a normative assessment of its overall role, control, and benefit, sometimes drawing upon PLALA's knowledge and inaction principles.

Conclusion

The legal landscape for online intermediary liability in Japan is characterized by an evolving interplay between traditional copyright principles defining the "infringing entity" and the specific framework of the Provider Liability Limitation Act. Japanese courts have shown a willingness to hold online service providers directly accountable for copyright infringements occurring on or through their platforms, particularly when the provider exercises significant management or control, derives commercial benefit from the infringing use, or fails to take reasonable action after becoming aware of clear infringements. This normative expansion of who can be subject to an injunction, combined with PLALA's rules for damages and takedowns, creates a distinct regulatory environment that continues to adapt to the challenges posed by new online technologies and business models.