Who Owns the IP in a Co-Developed Video Game in Japan? Works Made for Hire, Moral Rights, and IP Assignment

Video game development is an intensely collaborative endeavor, often involving a diverse team of programmers, artists, musicians, writers, and company planners. When these creative talents—some full-time employees, others freelance contractors—come together to build the next interactive hit, a critical question arises: who owns the resulting intellectual property, particularly the copyright, under Japanese law? The answer is multifaceted, involving Japan's unique approaches to "work made for hire," the authorship of video games as "cinematographic works," the robust protection of authors' moral rights, and specific rules for copyright assignment.

Company as Author? The "Work Made for Hire" Doctrine in Japan (Shokumu Chosaku)

The default principle in copyright law is that the individual creator of a work is its author and initial copyright owner. However, Japanese Copyright Act Article 15 provides a significant exception for "works made for hire" (shokumu chosaku). Under specific conditions, the legal entity or employer (e.g., the game development company) can be deemed the author of a work created by an individual engaged in its business, thereby acquiring both the economic rights (copyright) and the moral rights of the author from the outset.

For a company to be recognized as the author under Article 15(1), the following conditions must generally be met:

1. Initiative of the Employer: The creation of the work must be based on the initiative of the employer (or other such legal entity). In game development, this typically means the game project is conceived and commissioned by the company.
2. Made by a Person "Engaged in the Business" of the Employer: The individual creator must be someone "engaged in the business" (gyōmu ni jūji suru mono) of the employer.
   • This doesn't strictly require a formal, full-time employment contract. The Supreme Court of Japan, in the RGB Adventure Case (Judgment of April 11, 2003), clarified that this condition can be met if: (a) the individual provides labor under the employer's direction and supervision, and (b) the payment received can be evaluated as remuneration for that labor.
   • Consider a scenario where game programmers or artists are brought in on short-term contracts or even less formal arrangements (e.g., on tourist visas, as sometimes occurs with international talent). If they work at the company's premises, adhere to company project plans and reporting schedules, use company equipment, and receive regular payments structured like a salary for their development work, they may well be considered "engaged in the business" for the purposes of Article 15, even without a standard employment agreement.
3. Made in the Course of Duties: The work must be created as part of the individual's duties for the employer (shokumu jō sakusei).
4. Published Under the Employer's Name (with an exception): The work must be made public under the name of the employer as the author. However, Article 15(2) provides a crucial exception: this requirement of publication under the employer's name does not apply to computer programs. Since video games are fundamentally computer programs (often with significant audiovisual elements), this condition is frequently less critical for game software itself, although the overall game product (including its title screen, packaging, etc.) is typically released under the company's name.
5. No Contrary Stipulation: There must be no contract, work rule, or other stipulation in place at the time of creation that provides otherwise (e.g., explicitly stating that the individual creator retains authorship or copyright).

If all these conditions are met, the game development company, not the individual developers, becomes the legal author and thus the initial owner of all copyrights and moral rights in the work (or the specific contributions made under these conditions).

Video Games as "Cinematographic Works" and Special Authorship/Ownership Rules

Under Japanese copyright law, video games, with their sequences of moving images and accompanying sounds, are generally classified as "cinematographic works" (Copyright Act Art. 2(3), Art. 10(1)(vii)). This classification triggers specific rules regarding authorship and copyright ownership.

• Authors of Cinematographic Works (Art. 16): Article 16 defines the authors of a cinematographic work as those persons who, by taking charge of production, direction, cinematographic staging, shooting, art direction, etc., have creatively contributed to the overall artistic formation of the work as a whole.
  Importantly, this definition explicitly excludes the authors of pre-existing works (such as novels, screenplays, or musical compositions) that are merely reproduced or adapted within the cinematographic work.
• The "Maker of a Cinematographic Work" (Eiga Seisakusha): The company that takes the initiative and financial/organizational responsibility for producing the video game is considered the "maker of a cinematographic work" (Art. 2(1)(x)).
• Presumption of Copyright Transfer to the Maker (Art. 29(1)): For cinematographic works (whose authors are defined under Art. 16), there's a special provision in Article 29(1). It stipulates that the economic rights (copyright) in such a work are presumed to belong to the maker of the cinematographic work, provided that the Art. 16 authors agreed to participate in its production. This rule facilitates the commercial exploitation of films (and games) by centralizing rights with the production entity.

Implications for Freelance Contributors (e.g., a Musician):

Consider a freelance musician commissioned to compose the theme song and sound effects for a video game.

• The musician is the author of their musical compositions (which are separate copyrighted works).
• When this music is incorporated into the game, it is a "pre-existing work reproduced or adapted in the cinematographic work."
• Therefore, the musician is not considered an author of the video game as a cinematographic work under Article 16.
• Consequently, the special rule of Article 29(1) does not automatically transfer the copyright in the musician's original music to the game company (the eiga seisakusha). For the game company to acquire the copyright in the music itself (beyond a mere license to use it in the game), an explicit copyright assignment from the musician is necessary.

Navigating Copyright Assignment: The "Specifically Mentioned" Rule (Art. 61(2))

When a game company does obtain a copyright assignment from a creator (like the freelance musician), Article 61(1) of the Copyright Act allows for the transfer of economic rights in whole or in part. However, there's a critical safeguard for assignors in Article 61(2):

If a copyright assignment agreement generically states that "all copyrights are assigned" (or similar broad language), certain important rights—namely, the right of adaptation (e.g., to create translations, arrangements, dramatizations, under Art. 27) and the right to exploit derivative works (Art. 28)—are presumed to be reserved by the assignor (the creator) unless these specific rights (Art. 27 and Art. 28 rights) are expressly itemized and transferred in the assignment agreement. The agreement must tokkei suru (specifically mention) these rights for them to be effectively transferred.

Implications for Game Companies:
If a game company acquires music via an assignment that only broadly says "all copyrights are assigned" without specifically listing Art. 27 rights, the company might not have the right to create a new arrangement of that music (e.g., changing a ballad to an upbeat techno track for a game sequel) without further permission from the original composer. To secure full flexibility, assignment agreements must be drafted with this "specific mention" requirement in mind.

The Strength of Moral Rights in Japan (Chosakusha Jinkaku Ken)

Beyond economic rights (copyright), Japanese law grants authors robust "moral rights" (chosakusha jinkaku ken), which are personal to the author and, under Article 59, are inalienable (they cannot be assigned or sold). Key moral rights include:

• Right of Making Public (Art. 18): The right to decide whether and when to publish an unreleased work.
• Right of Determining Indication of Name (Attribution) (Art. 19): The right to decide whether their name is displayed, and what name (real name or pseudonym) is used.
• Right of Integrity (Dōitsusei Hoji Ken) (Art. 20): The right to preserve the work and its title against any modification, cutting, or other alteration that is contrary to the author's will.

The Right of Integrity in Video Games:
The right of integrity is particularly potent. The Supreme Court of Japan, in the Tokimeki Memorial Case (Judgment of February 13, 2001), addressed a situation where third-party memory cards allowed users to alter game parameters, character attributes, and story progression in a popular dating simulation game. The Court found that the use of such memory cards by players could constitute an infringement of the game author's right of integrity by modifying the game's content against their intent. Furthermore, the company that sold these memory cards was held liable for inducing this infringement (or for its own infringement by enabling such modifications).

This has implications for game companies (who, if deemed authors under shokumu chosaku, would also hold these moral rights) in controlling how their games are experienced and potentially modified by unauthorized third-party tools or add-ons. If a company sells devices that facilitate the unauthorized alteration of another company's game, the game's author (often the original game company) could potentially seek remedies based on infringement of the right of integrity. However, obtaining an injunction against a party who merely facilitates moral rights infringement by end-users can be challenging, as Japanese copyright law does not have explicit provisions for "indirect moral rights infringement" analogous to Article 101 for economic rights.

Agreements Not to Exercise Moral Rights (Fukōshi Tokuyaku):
Since moral rights are inalienable, they cannot be contractually "waived" in the sense of being extinguished or transferred. However, it is a very common practice in Japan for companies commissioning creative works (including game assets) to include clauses in their contracts whereby the creator agrees not to exercise their moral rights (chosakusha jinkakuken fukōshi tokuyaku).

The general validity of such non-exercise agreements has been debated:

• Some legal scholars argue that broad, all-encompassing agreements not to exercise moral rights could be contrary to public policy, as they would effectively nullify these fundamental personal rights of authors.
• The prevailing view, however, supported by much industry practice and evolving case law, is that such agreements are generally enforceable, particularly if they are freely entered into, are specific about the types of uses or modifications covered, and especially if the creator receives fair consideration. They are seen as a practical necessity for enabling the smooth commercial exploitation and adaptation of works.
• However, even with a non-exercise agreement, it's unlikely a court would permit modifications that are truly egregious and severely damage the author's personal honor or reputation.

If a musician (like Freelancer E in the PDF's scenario) signs an agreement not to exercise moral rights concerning modifications to their theme song, and the game company later changes the song's arrangement (e.g., from a ballad to an upbeat tune for a game update), the company would rely on this non-exercise agreement as a defense against a claim of infringement of the right of integrity. The validity of this defense would depend on the scope of the agreement and the nature of the modification.

Conclusion: Proactive IP Management is Key

The development of video games in Japan, often a melting pot of in-house talent and external creative contributions, requires a proactive and nuanced approach to intellectual property management.

• The "work made for hire" doctrine (Art. 15) can vest authorship and initial ownership of copyright and moral rights in the game company for contributions made by its employees or those under its effective direction and control. Clear contractual terms are vital, especially for non-traditional employment relationships.
• Video games are treated as cinematographic works, which has special implications for copyright ownership (presumption of transfer to the maker under Art. 29(1) for Art. 16 authors, but not for authors of pre-existing music).
• Copyright assignments from freelance contributors (like musicians or artists) must be explicit and, to capture rights of adaptation and exploitation of derivative works, must specifically enumerate those rights as per Art. 61(2).
• Authors' moral rights, particularly the right of integrity, are strong and inalienable. While agreements not to exercise moral rights are common and generally upheld for reasonable uses, they must be carefully drafted and managed.

For both game development companies and individual creators, understanding these Japanese copyright principles and ensuring they are clearly addressed in all contractual relationships is essential for avoiding disputes and ensuring that all parties know where they stand regarding the valuable intellectual property embodied in a video game.