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  1. 1. The Copyright Protection of Computer Software ín Japan and U.S. - A Comparative Studies - ERICAAOKI "The ~ftest thing in the universe overcome..~ hardest the thinp in the lJniver~e" - fL&:. TRe) a "1. TntTOductlon Not many technological phenomenon conld prodnce snch an ampleeconomic, social and legal impact as the advance and spread ofthe infonnatics. Twi11present in this study, the legal protectlon for computer software,adopted by the two most important comtries in the world in this field: Japan andV.S. This work is taking as a premise, that the V.S. leadershíp in manufactureand trade so:ftware,was the main factor which determined the actual rules for theprotection of computer software in the world. The V.S. share of software marketin 1984 amounted to at least 70 percent of the world market. It enable D.S. tosolve many of the problems in applying copyright protection to computersoftware. I will not present in this work. the CONTIJs Report. which contains themain legal reasons of the adoption of copyright to proteet computer software. Iwill attain mainly to the aspects occurred afier CONTU. As a result of the economical and polítical pressure, and to folIow thedirection imposed by the United States, a significant number of countries, asJapan. adapted their copyright laws to specifically include computer software ascopyrightable material. The first and the most important episode where the American >-Govemment actively sustained the focus of intelleetual property for software wasagainst Japan. In 1983, the Ministry of Intemational Trade and IndustIy of Japan (MITI)issued an informative with a proposal to establish a sui gener;s regime for thesoftware protection. ~nTI sustained that, according to the special characteristicsof computer programs. the existing legisIation resulted inadequate.
  2. 2. Surrender to the American pressure, the MITI project establishing 15years of protection, has been put aside and the Japanese Diet decided for 3modified copYlight whiclrresulted- in the-t~ Law. ----- - --- - The Vnited States wanted with this control measure, avoid that eaclJsingle cOlmtrydeve10psits own law to protect software, since this may represen1the dilutlon of the proteetlon power of the system chosen by them. For thisreason, the establishment of an own legislation to protect software by a countrylike Japan, one of the market leader in this field following the Vnited States, wasnot acceptable. As a deve10ped country with a large and expressive computeIindustry, the influence of an independent law created in Japan could represent anemerge of a protectionism policy, mainly in developing countries, which wasagainst to the goal V.S. intended to reach with the protection of software.n. Copyright Proteetion for Computer Software - U S. point ofview The 10st of intemational competitiveness in the 80s by the Americanindustries, affected many sectors, including high technology fields. In 70s,Vnited States had the domain of 100% of the miero e1eetronies market, but in1988, the share of Ameriean companies dropped to 42%.1 The Japanese companies superseded the American companies in itstechnology, gaining a larger market shares, mainly in manufacture of equipmentfor the semÍeonductor industries and robotles. However, Vnited States maintained a solid leadership in the field ofhardware and computer software. The V.S. leadership in these fields was cruciaIto determine the market of system software standards (e.g. CP-M, MS-DOS,UNIX). Therefore, the American software manufacturers, has actively advocatein favor of a consolidation of the legal protection of software in domestic andworldwide market . The main eoncem in that time, which stiU representing a problem, -"wathe software pirates. The worldwide theft by software pirates cost the industryabout US$ 12 billion in 1992.1 Carlos Maria Correa, Proteccion dei software: estudio de caso sobre ei desarro/lo dei derechoeconomico, 494 Revista dei Derecho Industrial 557, 559 (1979).
  3. 3. As infonnation released by the Arneriean Business Software of alI the losses - whieh hit both software makers and distributors -were raeked up in Japan. while hi-teeh theft fell in Europe:-due in part to toughnewlaws.2 This faets carne towards to eonfinn the needs of Arnerican rnanufacturersto have a stronger copyright protection laws and also a strict enforcement of thelaws. since V.S. industries progress would be even grater if these measures hasbeen taken. By the moment, it is quite pacific the understanding regarding to the copyrightability of computer software. However, for manY years the discussion about which law could be more efficient to protect the rights on computer software, maintained a hot discussion in courts, between scholars and in Govemmental sphere. As in other intelleetual property field, the American position over theprotection of software has produeed a great impact in legislation models adoptedby many other countries in the world. In 1980, the Vnited States Govemment adopted an explicit position that software shall be protected by copyright, this position has been taken, in part, asa mea5ure of it5 foreign trade poliey. The favorable argument of V.S. in taking this position was that,the copyright offers the possibility to apply an entirely well known and respectedprincipIes and mIes: it provide a legal measure against an illegal reproduetion;the protection period is longer than others inteIleetual property rights; theprotection is given since its ereation and in general it not require any forrnalitiesto guarantee the rights; and the disclosure of protected work 1S not required. Vhen applied in an international seale, the foeus of copyright a1sograntssuhstantial advantages for exporters: the exÍstence of an accepted eonvention (e.g.Beme and Universal); the inexistence of registry proeess to obtain protection; andthe universal protection since its creation. The reIative low cost of obtaining the copyright and the norrnally strl;Jightforward and expeditious registration process are the benefits of copyrightprotection.2 Reuter, Study: piracy o/ software costs $12 bil.. The Daily Yomiup, 1993
  4. 4. The computer program has been accepted for registration by theCopyright Office since the decade of 60s, even though it was still unclearwhether computer software was a copyrightable "writing" under the originalIegislation. From the Copyright Act of 19093, which secured for authors theexclusive rights to their respective writings, the legislation have developed toattend the new needs of the market. Yet in 1964, even though it was still unclearwhether computer software was a copyrightable "writing" under the legislation,the Copyright Office announced guidelines governing the registration ofcomputer programs. Congress considerably broadened the registration guidelines by enactingthe Copyright Act of 19764, suggesting the copyrightability ofcomputer software.The Act however, did not specifical1y prescribe that computer programs waseligible for copyright protection. Without an express mention that computer software was copyrightablesubject matter, the court failed to reach a consensus in this respect, so thecopyright protection for computer software remained problematic until Congress,acting on the recommendation of the National Commission on NewTechnological Uses of Copyrighted Works (CONTU) passed the adoption ofspecific dispositions for computer software protection.5 The legal reasons to eleet the copyright to protect computer software wasextensively discussed in CONTU report, but this decision can also be justified ineconomical terms, from a point of view of a country that is the mainmanufacturer and exporter of computer software of the world. The Computer Software Copyright Act of 1980, added proV1slOnspecifically dealing with computer programs, revised the Section 117 andÍncluded the term "computer program" in the definitions of Section 101 of theLaw.3U.S. Constitution art. I Section 8 c1.8.417 U.S.C. Sections 101-8105 ArthUT R. MilIer, Copyright Protection for Computer Programs. Databases. and ComputerGenerated Works: Is Anything New Since CONTU?, 106 Harv.L.Rev. 978, 979 (1993)
  5. 5. The amendments plainly applied software represented in "source code",therefore the eourts were required to resolve the quesrion of whether copyrighjproteetion extended to computer programs expressed in "object code". Copyrightable intellectual property, under V.S. law definition, must bean original work of authorship, flxed in a tangible mediurn, from which it ean be"perceived, reproduced, or otherwise communieated, either direetly or with theaid of a machine or device". 6 The degree of originality is mínima!, requiring neither novelty nOIingenuity.7 Simply stated, onee the ereator transfers an idea to a tangible medium,a eopyright is bom, providing protection from the moment of transfer. Thecopyright then endures for the life ofthe author plus fifty years.8 Copyright law does not protect the copYright owner from having otherstake the ideas used in the copyrighted work. 9 Copyright law protects on1y theexpression of the idea, not the idea itself. The statutory scheme of copyright protection on1yprohibits copying., notindependent creation by another person or entity. The evolution of American jurisprudence regarding to the softwareprotection has been carefully examined not only inside but also outside V.S. Thecases conceming the copyright protection of computer software can be analyzedby divide it into three generations.10 The first generation of cases addressed the copying of substantialportions of literal software elements, including objeet and source Computcr Softwarc Copyright Act, 17 U.S.c. Scction 102 (a) (1988)7 Atari Games Corp v. Oman. 888 F.2d 878, 883 (D.C. Cir. 1989).8 17 U.S.c. Scetion 302 (a).9 11 U.S.C. Section 102 (b).lOJohn T.Soma, James Shortall Jr.& Vemon A. Evans, The Use ofQuiet Title and DeclaratoryJudgment Proceeding in Computer Software Ownership Disputes,71:3 Denv. U. L Rev., 543,555 (1994)
  6. 6. The 1980 amendment to the Copyright Act fmn1y established the copyrightability of computer programs and, rejected the alleged source code- object code distinction.l1 In the second generation, the courts considered the extent to which the non-literal aspects of computer software, inc1uding the structure, sequence and organization (SSO) of programs, received copyright protection. The court established a test for distinguishing non-copyrightable idea from copyrightable expression. The court held that afier isolating the idea, copyright protection clearly extended beyond the literal code to the structure, sequ~nce and organization of the program.12 Recently, the court presented an altemative analytical framework for distinguishing idea from expression and determining the substantial similarity of non-literal program structures.I3 The third generation of software copyright cases further extended protection to non-literal elements, often focusing on the user interface. The court established a test to determine the copyrightability of non-literal components of computer software.14 According to V.S. law, the defmition of a computer program in the sense of Section 101 of the V.S. Copyright Act also seems to suggest that a computer consists of both hardware components and operating systems, and that consequently the operating system as a part of the computer cannot be protected under copyright law. Nevertheless, in some court decisions, operating system has been protected under copyright law as computer programs.15 11 Appk Computer, Inc. v. Franklin Computer Corp., 714 F.2d. 1240 (3d Cir. 1983) certo dismissed, 464 V.S. 1033 (1984) 12Whelan Associares Inc y Jaslow Dental Laboratot:Y, Inc., 797 F.2d 1222 (3d Cir 1986) certo denied, 479 V.S. 1031 (1987». 13Computcr Associatcs Internatjonal, Ine v Altaj, Ine, 982 F.2d 693 (2d Cir. 1992). HLotus Devclopment Corp v Paperbaek Softwarc Intematjonal, 740 F.Supp. 37 (D.Mass. 1990). 15Apple Computcr V Franklin Computer Corporation. 101 S. Ct. 690 (1984)IOMlcrosott Corpomfioo v Showa Trildiog KK, 1219 Hanji 48, 1987 Patents and Licensing17Karl H. Pilny, Legal Aspeets of Interfaees and Reverse Engineering - Protection in Germany,the United States and Japan, 23 Intcrnational Review of Industrial Property and Copyright LawI1C, 196,206 (1992)
  7. 7. The first Japanese copyright law was enacted in 1869. Under thislegislation, the author of a book, was obliged to obtain a license from thegovernment to published it. This license, once obtained, protected the authors monopoly rights onprofits beard from the book, for the authorts life. This provision was amended in 1875, restricting the protection period for thirty years. In 1887, Japan adopted a registration system, and in 1899, enacted itsfrrst copyright statute, incorporating the principIes of the Beme Convention. Under the 1899 Copyright Act, Japan granted the copyright protection tothe author of a writing, speech, drawing, painting, sculpture, model, photograph,or other work of authorship. This Copyright Act served as a base of the ActualCopyright Act enacted in 1970, and was amended several times. ln 1910, addedarchitecture, in 1920 added instrumental and vocal performance, in 1930included music, in 1934, included sound recordings of particular works, and in 1956, Japan ratified the Universal Copyright Convention. The Copyright Act Enforcement Order and Regulation of 197018, currentin force in Japan, has been amended repeatedly since its enactment until today. The Japanese Copyright Act defines in its Article 2(1)(i)19the "works ofauthorship" as a "production in which thoughts or sentiments are expressed in acreative way and which falls within the literary, scientific, artistic or mutualdomain", and it lists in Article 10(1)20 an example of nine types of "works ofauthorship" that are entitled to copyright protection. One of the peculiarity of the Japanese Copyright Act is that it protectscompilations if there is sufficient creativity in the selection or arrangement of themateriaIs. "This compilation protection has important implications in protectingcomputer databases. ln 1985, an advisory committee to the Japanese Govenunent18Japancse Statutes, Law No. 48 of 1970, as amended by Japanese Copyright Act ArticIe 1-104;Cabinct Order No. 335 of 1970; Ministry ofEducatíon Ordinance No. 26 of 1970.19Iapanese Copyright Act art 2( 1)(í).20Id. art 10(1).
  8. 8. recommended that computer databases be given compilation protection under theCopyright Act. "21 This recommendation was followed in 1986. The Japanese Copyright Act gives more rights for the author of protectedworks than are specified in the V.S. Copyright Act. The Japanese Act in its article 30-4922, identifies some specificlimitations and compulsory licenses, since there is no general "fair use"exceptions to the exclusive rights : 1. reproduction for private use, unless the reproduction is made by an automatic reproduction machine placed for public use; 2. reproduction of library materiaIs for certain non-profit activities; 3. limited quotations; 4. lirnited reproductions or broadcasts in schools, school text books, or school education programs; 5. reporting of current events; 6. reproduction for judicial proceedings, and other matters Copying is allowed for certain other uses by compulsory licenses. 23 According to the Japanese Copyright Act, authors automatically enjoyboth copyright protection and moral rights protection. Artic1e 17 (2)24 providesthat "the enjoyrnent of moral rights and copyright, shall not be subject to anyforrnality". However, registration still possible and, in some circumstances,desirable in helping to prove copyright infringement. Although registration system are not necessary for creation of copyrightprotection, the Japanese Govemment operates four different copyright registers.The Director General of Japans Cultural Affairs Agency administers theCopy-nght Register, the Publication Right Register and the Neighboring Rights21Mark S. Lee, Japans Approach to Copyright Protection for Computer Software , 16 Loy.L.A. Intl & Campo L.J. 675, 680-681 (1994).22Japanese Copyright Act arts. 30-49.23Id. art. 50.24Id. Art. 17 (2).
  9. 9. Register25• A govemment ageney ereated in Deeember 1986, ealled the "SoftwareInformation Center", administers the Computer Program Register26. Under the Japanese law, notiee is not required for--copyrighted··work,however, notiee can avoid eertain exemptions to eopyright holders exclusiverights that could otherwise apply. The Japanese Act on1y protects works of Japanese national and works"fust published" in Japan, unless an intemational treaty obliges Japan to proteetotherwise ineligible works. "First published" works include works publishedwithin thirty days of initial publieation eIsewhere. Nevertheless, Japan hasentered into one bilateral treaty and severa! multilateral conventions that protectV.S. works. The Beme Convention or the Universal Copyright Conventionprotect foreign works in Japan. Generally, the terro of Japanese copyright is fifty years afier the authorsdeath. From 70s, the Japanese Governrnent and computer industry started todebate the amount and type of intellectual property protection appropriate forcomputer software. While this debate progressed, Japanese courts found implicitprotection for computer software in the Copyright Act. In July 5, 1972, the Committee of Software Protection Survey of theHeavy Industry Agency of Ministry of International and Industry (MITI), issuedits reporto Basically, this Committee proposed the protection of the capitalinvested for the development of computer program, guarantee its marketability,and improve the computerization of the market. The Committee found that, toreach those target, it is sufficient to protect against infringement by copying orillegal use, and it is not necessary to protect the ldea itself. The committeeproposed a registration system, with a compulsory examination, publication ofthe documentation of the program, arbitration iu case of disputes and a short tennprotection of 10 year27.25Id. arts. 71(1), 78 bis, 8826 Id. arts. 75-7827 Nobuhiro Nakayama, Software no Hoteki Hogo [Legal Protection of Software], 9 (Yuhikaku1990)
  10. 10. ln 1973, the Cultural Affair Agency Copyright Committee, presented itsopinion that the computer software shall be protected by copyright law. Even though, the computer software protection problem has been discussed from early 70s in Japan, there was not many significant problems until 1982. In 1982, the Hitachi v. IBM28,trade secret infringement case, brought thepublic attention to the question with regard to computer software protection. In the same period, the infringement of computer games increased. This question was concluded with the decision of the Tokyo District Court dated December 6, 1982, which, by the first time, explicitly recognized the copyrightability of software. Based in above mentioned decisions , the Ministry of International Trade and Industry (MITI) and the Culture Affair Agency, separately proposed a new law and the amendment of the Copyright Act respectively. The MITI issued in 1983, a proposaI, caIled Program Right (Puroguramu ken), which established a sui generis regime for the protection of software, cIearly defrning that the copyright law should not be applicable for computer software protection. The MITI proposal was aiming to reach 3 mam targets: 1) promotion of the development of software; 2) regulation of the infringement by illegal copies and 3) promote the use of software. The MITI proposed Program Right, reflected the dissatisfaction with thecopyright law to protect software. The point MITI was concerned, was theinexistence of the concept of right to use tn the copyright, so, to use the "work",no manner of fact, will result in copy of that work. For who was in the defense ofthe copyright, copy ofthe work has the same meaning ofuse. Also, MITI was conceming that the computer software, as a product ofhighest intellectual work of a man, representing a main factor of the developrnentof an industrial society, should be in constant improvement, which necessarilyneeds to be very fast. By this meaning, MITI sustained that by allowtng thecopyright protection of computer software, this protection will be for a verylongperiod of 50 years, which causes damage to the rapid improvement of thetechnology. 50, they proposed the same protection period of a patent, 15 years29.28Nano Hiko, Chitckishoyuken [InteIlectual Property Right], 69-132 (Chuo Koronsha 1988)29Nano Hiko, Chitekishoyukcn [Intellectual Property Right), 156(Chuo Koronsha 1988)
  11. 11. ln tum, the Cultural Affair Agency, presented its report in Januaty 1984,with totally ditrerent position from MITI. According to the Cultural AtrairAgencys Report, a program, until it tums to firmware, shall be subject matter ofcopyright, and 50 the copyright wiIl be applied. The Cultural Affair Agency report proposed to include computerprogram in the copyright subject matter (as it is in the actual Copyright Act,Article 10). They also proposed a rearrangement of the roles regarding to "work onhire" (Article 15 of the current Copyright Act), and with regard to version up, itproposed the inclusion of an exception to the right of preserving the integrity. The discussion between MITI and the Cultural Affair Agency, regardingto their contradictory positions, was finally decided by an external pressure. TheUnited States, which has decided to adopt the copyright to protect software, wasstrongly against the MITI position, and this issue 5tarted to be one of the items ofthe Japan-U.S. trade friction. Finally, the protection of computer software in Japan tumed to besubmitted to the Copyright Act, and the computer software has been consideredas a "work" within the meaning of the Act. The 1985 Amendments to theJapanese Copyright Act clarified the copyright protection to be given to computersoftware. According to the Act, "program" means "an expression of combinedinstructions given to a computer 50 as to make it function and obtain a certainresult". The Act also added "program works" to its list of authorship works, andspecified limitations on the protection provided to software. The 1985 Arnendrnent however, kept some characteristics of the MITIprojeet., since it not proteet language. mIes and algorithms. The Japanese law added a specific "work for hire" provision, where thesoftware created by employee in the course of its employment, the employershall be considered the aUthor of the work, and establish a voluntary registrarionsystem of software, as the proposal ofthe Cultural AfIair Agency.
  12. 12. IV. Conclusion The United State strong position against the MITI proposal for theproteetion of software, was, no manner of faet, more related to defense of tradeinterest than a rational and seholastie study of the questiono However, the diseussion regarding the copyrightability of software,stayed in the near past. Nowadays, most of developed eountries and somedeveloping eouotries, aceepted the copyright as the institute to proteet computeIsoftware. Moreover, the main target, whieh was the proteetion of software, as anintelleetual property, has been aehieved. The effieieney of this roles still inquestioD.,vis a vis, the amount ofthe lost from infringements in 1992. The globalization of the roles, seems to be an utopia, sinee the diversityof eeonoIDÍealeapacity of eaeh couotry, raise different interests to be defended. Nevertheless, the adoption of copyright to proteet software in Japan,confirmed the tendency, and allowed a eertain uniformity. The future, no one knows. And once the teehnology develops in a speedthat legal mIes canoot follow, in a near future, probably wiIl be necessary tocreate a more efficient institute of law, more proper to protect the rights ofeomputer software.