Zeitschrift für Japanisches Recht

All Her Trouble Seemed So Far Away: USA v. Japan Before the WTO Christopher Heath

I. YESTERDAY

Ah, yesterday, it was all good day sunshine, but now it looks as though it isn't here to stay: In February 1996, the U.S. has accused Japan of not properly complying with the GATT/TRIPS Agreement and brought the case before a panel of the newly set up World Trade Organisation (WTO).
When on 15th April, 1994, after eight years of negotiations, the "Uruguay-Round" on the General Agreement on Tariffs and Trades (GATT) was concluded in Marrakesh, Morocco, a new chapter for world trade had begun: First, disputes on the implementation and interpretation of rules covered by the GATT could be brought before a compulsory arbitration panel with rulings binding to both parties. Second, intellectual property protection was included into the framework of GATT via a side-Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This TRIPS Agreement requires all signatory states to comply with certain minimum standards of protection for a number of intellectual property rights. Apart from patents, trademarks, designs, and trade secrets, minimum levels of protection have also been introduced for "copyright and related rights". The rights of phonogram producers that are in dispute between Japan and the U.S. belong to the category of related rights, also and more commonly called neighbouring rights. Copyright specialists, a sophisticated-thinking bunch of people, have made a distinction between the rights of creators of works (authors, painters, composers, etc.), that is, copyright, and the rights of persons performing or commercially exploiting such works by technical means. It is easy to see that the performers of Beethoven's Ninth Symphony are not its authors. The author is undoubtedly Beethoven, and for this reason, orchestras and conductors cannot obtain any copyright. Nevertheless, they should have the right to exploit their performance. In a similar fashion, phonogram producers help to spread recorded performances by technical means. But certainly, phonogram producers are not the authors of the works on the CD. Yet, because of their financial commitment, they may have a vital commercial interest in that their records are not produced without permission, put in CD-rental shops, etc. In short, performers and phonogram producers, although unable to obtain copyright protection because they do not qualify as authors, need something just like copyright protection. For this reason, modern copyright laws have introduced a category of related rights or neighbouring rights.
Commercially, such protection of neighbouring rights makes a big difference. While the copyright fees paid to the authors amount to about six percent of a CD's price, additional neighbouring rights for performers and phonogram producers would account for a hefty 8-30 percent of a CD's price, depending on the popularity. Such money must be funny not only in a rich man's world.
Art. 14 of the TRIPS Agreement now obliges Member States to endow phonogram producers with the right to authorise or prohibit the direct or indirect reproduction of their phonograms. So far, so good. But hasn't Japan properly done so?

II. MAGICAL MYSTERY TOUR

Trying to find out the relevant Japanese laws applicable to the protection of foreign phonogram producers is almost a magical mystery tour, that, when only reading the present Copyright Act, very soon makes you look like the fool on the hill.