Who Owns Copyright for Works Created by Employees in Japan: The Company or The Creator?

In any business where employees generate creative content—be it software, marketing materials, reports, designs, or articles—a critical question arises: who owns the copyright? Under Japanese copyright law, the answer often lies in the doctrine of "works made for hire," known as shokumu chosaku (職務著作). This framework determines whether the individual creator or the employing entity is considered the author and thus the initial copyright holder.

The General Principle: The Creator is the Author

As a starting point, Japanese copyright law adheres to the "creator-author principle" (sōsaku-sha shugi 創作者主義). This means that, generally, the individual who actually creates a work is deemed its author and, as a result, initially acquires both the economic rights (copyright, 著作権 - chosakuken) and the moral rights (著作者人格権 - chosakusha jinkakuken) associated with it.

However, Article 15 of the Japanese Copyright Act provides a significant exception for works created by employees under specific circumstances. In such cases, the juridical person (e.g., a company) or other employer can be deemed the author, acquiring both copyright and moral rights from the moment of creation. This is a crucial distinction from, for example, Japanese patent law regarding employee inventions, where rights typically first vest in the inventor and may then be transferred to the employer through contractual arrangements or workplace regulations. For copyrightable works made for hire, the employer's authorship can be primitive.

Conditions for a "Work Made for Hire"

For an employer to be recognized as the author of a work created by an employee, Article 15, Paragraph 1, sets forth several conditions that must generally be met. The absence of a contrary agreement (discussed later) is also a prerequisite.

1. Initiative of the Juridical Person or Other Employer (法人等の発意に基づき - hōjin tō no hotsui ni motozuki)

The work must be created based on the employer's initiative. "Initiative" (hotsui 発意) typically means that the employer planned, conceived, or directed the creation of the work. This doesn't always necessitate a specific, explicit order for each individual piece of work. If the creation falls within the employee's general duties and is something the employer would naturally expect them to produce, the employer's initiative can be inferred. For example, software developed by a programmer within their defined role generally fulfills this.

Crucially, the employer's initiative must exist before or at the time of the work's creation. Subsequent approval or adoption of a work created independently by an employee does not retroactively transform it into a work made for hire under this doctrine. The connection between the creation and the employer's planning or operational needs is key.

There has been some scholarly discussion about applying this "initiative" requirement strictly, particularly because, unlike in the patent system for employee inventions, there's no statutory right to separate "reasonable remuneration" for copyright in works made for hire vesting in the employer. A stricter interpretation might demand more concrete instructions from the employer.

2. By a Person Engaged in the Business of the Juridical Person, etc. (法人等の業務に従事する者 - hōjin tō no gyōmu ni jūji suru mono)

The creator must be a person "engaged in the business" of the employer. This term, often translated as "employee" (jūgyōsha 従業者), is not strictly confined to individuals with formal employment contracts. Courts look at the substantive nature of the relationship. The Supreme Court of Japan, in the RGB Adventure case (April 11, 2003), indicated that this determination should be based on a comprehensive consideration of factors such as whether the individual provides labor under the employer's direction and supervision, and whether remuneration is paid as consideration for such labor, taking into account work style, command structures, and payment methods.

Therefore, individuals like dispatched workers or secondees could qualify if they are effectively working under the command and supervision of the receiving company for the purpose of creating the work. Even company directors might be considered "persons engaged in the business" if they create works as part of their directorial duties under the company's initiative.

However, works created by independent contractors or external agencies commissioned for a specific project are generally not considered works made for hire. In such cases, the contractor is usually the author, and the commissioning party would need to secure rights through a contractual assignment (though moral rights remain with the contractor).

The term "juridical person or other employer" encompasses corporations, non-juridical associations and foundations, national and local governments, and even individual business proprietors engaging others in their business.

3. Created in the Course of Duties (職務上作成するもの - shokumu-jō sakusei suru mono)

The work must be created by the employee "in the course of their duties". This means the creation must be part of, or directly related to, the employee's job responsibilities or tasks they are expected to perform for the employer.

This condition is not solely determined by whether the work was created during official working hours or at the employer's premises. A work created outside of these parameters could still qualify if it directly pertains to the employee's duties. For example, the Tokyo District Court in the Space Development Agency Program Case (December 12, 2005) held that a computer program developed by an employee during an overseas study period funded by the employer could be a work made for hire, given its connection to their professional responsibilities and the nature of the study.

4. Published Under the Name of the Juridical Person, etc. (as Author) (法人等が自己の著作の名義の下に公表するもの - hōjin tō ga jiko no chosaku no meigi no shita ni kōhyō suru mono)

For most types of works (with a significant exception for computer programs, see below), this is a critical condition: the work must be made public under the employer's name as the author, or under circumstances where it is clear that the employer is taking authorship responsibility.

If a work is created with the intention of being published under the employer's name, it can satisfy this condition even before actual publication occurs, as suggested by the Tokyo District Court in the System Science Case (October 30, 1995). In such a scenario, the employer would acquire moral rights, including the right of first publication.

The way authorship is indicated is important. Simply including an employee's name along with their job title and the company's name might be interpreted as identifying the individual's role in creation rather than attributing authorship to the company. For example, the Tokyo District Court in the Instrumentation Engineer Training Course Case (February 27, 2006) found that listing an employee's name and department on training materials was merely an indication of his role as a lecturer, not an assertion of corporate authorship for the materials themselves.
Conversely, in the Last Message in Saishūgō case (Tokyo District Court, December 18, 1995), a farewell message in a magazine bearing the editor-in-chief's name was still considered published under the corporate publisher's name, as it was seen as reflecting an internal division of labor within the corporate publication. This logic often applies to newspaper articles written by employee journalists.

An interesting situation arose in the Kanji Kentei Study Book Case (Osaka District Court, February 16, 2012). The court recognized a work as a work-made-for-hire even though it was ultimately published under a different corporate name than the one originally intended at the time of its creation, effectively looking beyond the final publication name to the circumstances of creation.

The Special Case of Computer Programs

A significant exception to the "publication under the employer's name" requirement exists for computer programs. According to Article 15, Paragraph 2 of the Copyright Act, this condition does not apply to computer programs.

This means that if a computer program is created by an employee under the employer's initiative and in the course of their duties, the employer is deemed the author (and owns the copyright and moral rights) even if the program is never published, is used only internally, or is published under the employee's name or anonymously. This amendment, introduced in 1985, acknowledges the unique nature of software development, where many programs are created for internal operational purposes rather than public dissemination.

The Role of "Agreement to the Contrary" (別段の定め - Betsudan no Sadame)

The provisions of Article 15, Paragraph 1 (and by extension, Paragraph 2 for programs) apply unless otherwise stipulated by contract, work regulations, or other provisions in effect at the time of the creation of the work.

This "agreement to the contrary" (betsudan no sadame 別段の定め) allows employers and employees to modify the default work-made-for-hire rule. If, at the time of creation, there is a clear agreement (e.g., in an employment contract or specific project agreement) that the individual employee will be the author, then the employee will retain both the copyright and their moral rights.

It's important that such an agreement is in place at the time of creation. An agreement made after a work has already been created under conditions that would qualify it as a work made for hire cannot retroactively divest the employer of authorship and vest it in the employee. Similarly, if a work is created by an employee outside the scope of the work-made-for-hire conditions (e.g., a personal project unrelated to duties), a pre-existing general employment clause cannot automatically make the employer the primitive author of that specific work. In such cases, the employer would need to obtain rights via a separate assignment from the employee author (though moral rights, being inalienable, would remain with the employee).

Consequences of Work-Made-for-Hire Status

When a work qualifies as a work made for hire under Article 15:

• The Employer is Deemed the Author: The juridical person or other employer, not the individual creator, is legally considered the author of the work.
• Primitive Acquisition of All Rights: The employer acquires, from the moment of creation, both the economic rights (copyright) and the author's moral rights (right of publication, right of attribution, right of integrity). This wholesale transfer of moral rights to a corporate entity is a distinctive feature of the Japanese system and contrasts with many other jurisdictions where moral rights are inalienable and remain with the individual creator.
• No Statutory Right to Separate Remuneration for Copyright: Unlike Japanese patent law, which mandates "reasonable remuneration" for employees whose inventions are assigned to their employers, the Copyright Act does not provide a general statutory right for employees to receive additional or separate compensation specifically for the copyright in works for which their employer is deemed the author. This lack of a direct compensation mechanism for copyright has been a point of academic discussion, especially concerning highly creative works or works like software which might also embody patentable elements where remuneration would be due.

Rationale and Points of Consideration

The Japanese work-made-for-hire system aims to provide legal certainty and facilitate the commercial exploitation of works created within an employment context. By vesting authorship (including moral rights) in the employer, it simplifies rights management, especially for collaborative projects or works intended for broad corporate use, and avoids potential conflicts arising from individual employees' moral rights claims that could hinder the employer's use of the work.

However, the automatic vesting of moral rights in a corporate entity has drawn some critique. Moral rights are traditionally seen as deeply personal to the creator, reflecting their "spiritual connection" to the work. Attributing these to a corporation, and doing so without a direct remuneration system for the copyright itself, can appear less favorable to individual employee-creators compared to approaches in patent law or in other copyright jurisdictions. Some scholars suggest that corporate authors should exercise their acquired moral rights (particularly the right of integrity) with restraint, or that for certain types of routine corporate works, moral rights might not be as strongly implicated as for works of high artistic expression. The Tokyo District Court decision in Kaichō wa Naze Jisatsu Shita ka (Chairman Why Did You Commit Suicide?) (September 12, 2014), which deemed a collaborative journalistic book a work-made-for-hire by the newspaper company, highlighted these tensions concerning highly creative works produced by identifiable individuals within an employment setting.

It's also worth noting that certain professional contexts, like university professors creating academic papers or lecture materials, are often considered outside the typical work-made-for-hire framework. While their work is related to their employment, the initiative and intellectual direction for such scholarly output usually reside with the individual professor, and such works are commonly published under their own names, not as works of the university.

Conclusion

The Japanese shokumu chosaku system provides a clear, albeit distinct, framework for determining authorship and copyright ownership of works created by employees. By setting specific conditions under which an employer is deemed the author—including the crucial acquisition of moral rights—the law aims to balance the interests of employers in utilizing employee-created works with the underlying principles of copyright. For businesses operating in Japan or engaging Japanese employees in creative tasks, a thorough understanding of Article 15, including the possibility and timing of "agreements to the contrary," is essential for proper rights management and to avoid future disputes.