Anti-Counterfeiting Measures in Japan
Historically, the
production of counterfeit items and items bearing a striking similarity to
existing well-known brands was a serious problem in
At present, Japan
does not permit free trade zones nor free trade storage facilities within the
country, thus, any and all imported items (also including items to be exported
from Japan) are subject to all anti-counterfeit laws and statutes promulgated
in Japan.
Japanese
companies have voiced concern over inferior and potentially dangerous copies of
their products being imported into
This report will
analyze the causes and the damages (not limited to financial) that widespread
counterfeiting has caused and causes Japanese companies. Thereafter, the laws
and countermeasures used to combat the import and overseas production of
counterfeit items will be described in detail.
A)
The Problem
The Organisation for
Economic Co-operation and Development (OECD) has estimated that worldwide damages
due to counterfeiting run in excess of 250 billion USD per year, which amounts
to 5-7% of world trade2.
In a 2012 survey
of more than 4,300 Japanese companies among the 8,000 Japanese companies filing
the greatest number of patent, utility model, trademark and design applications
(2007-2011), 23% of these companies stated that they had suffered from losses
as the result of other entities counterfeiting their intellectual property. The
majority of losses occurred as the result of infringement on a company’s
trademarks (57.8%), followed by designs (38%), patents and utility models (33%)
and copyrighted material (16%). A large percentage of companies reported losses
due to counterfeit items made in China (64%), Korea (23%), and other ASEAN
countries (19%) such as Indonesia, Vietnam, Thailand, Philippines, etc. More
than half of the companies experienced losses as the result of Internet piracy,
which has continuously increased since 2006. More than half of the companies
had implemented anti-counterfeiting procedures, many with a first focus on
According to the
Ministry of Finance, in 2013, there were 28,135 cases constituting 628,187
items in which imports were seized by customs officials in
B)
Countermeasures (Pharmaceutical Field)
Pharmaceutical
companies have implemented numerous strong countermeasures against counterfeit
pharmaceuticals, including the installation of anti-counterfeit technology to
the packaging of medicines and the establishment of more oversight in all areas
of the supply chain with a particular focus on markets deemed to be high risk,
such as Internet sales (Yagaku Zasshi 2014: 134(2), 203-211). 16% of Japanese
consumers who bought pharmaceuticals over the Internet reported slight to
severe health problems after use (Yagaku Zasshi 2014: 134(2), 213-222).
The Japanese
Ministry of Health, Labor and Welfare (MHLW) is active in warning the public of
the potential hazards in using pharmaceuticals obtained from dubious sources. In
Japan, most Internet-based pharmaceutical sales are medicines and supplements
for erectile dysfunction, hair restoration, diet supplements, beauty supplies,
and sleeping pills, however antibiotics and medicines for serious health
conditions including allergy, cancer, diabetes, etc., may be easily procured on
the Internet.
Since 2013, the
JPO has operated a website which focuses on educating the public regarding how
to detect counterfeit products and the websites selling counterfeit products.
The JPO website explains that purchasing pharmaceuticals of questionable
efficacy and safety over the Internet exposes the customer to a plethora of potential
problems. The website touts that purchasing counterfeit goods/items, in the
case of pharmaceuticals, carries the possibility that the pharmaceuticals
purchased over the Internet are ineffective at best, and lethal at worst;
infringes on the IPR and may hamper future innovation; runs the risk of the
leakage of personal information (i.e., credit card and identity theft); and
ultimately, buying these illegal pharmaceuticals makes the customer a willing
accomplice in a criminal activity. (https://www.meti.go.jp/english/press/2018/1127_005.html)
The MHLW
established a “Suspicious Drugs Reporting Network” for the public to notify the
government agency of potential counterfeit medicines which are commercially
available via the Internet and other sources. In 2015, the Japan Pharmaceutical
Manufacturers Association (JMPA) found that while many Japanese pharmaceutical
companies do take an active role in protecting their products and IPR by “altering…
products in some ways as a measure against counterfeits”, 46% of Japanese
pharmaceutical companies did not have a department exclusively in charge of
countermeasures against counterfeit pharmaceuticals.
See: Results of the Second
Survey on Counterfeit Medicines (http://www.jpma.or.jp/english/globalhealth/fake_measures/questionnaire.html)
C)
Countermeasures (Legal)
Japanese
companies are not without a wide assortment of laws and regulations backing
them in their fight against counterfeits. The Patent Act, Utility Model Act,
Trademark Act, Design Act, Copyright Act, Customs Tariff Law and the Unfair
Competition Prevention Law all contain language specifically addressing the
issues of counterfeits and infringement of IPR.
The Design Law
was amended in 2007 to include “acts of importing infringed goods” as an act
which constitutes a violation, and the Patent Act, Utility Model Act and the Design
Act all have a provision stating “holding infringed goods for purchase of
assignment” is also a violation.
A 2005 amendment
of the Unfair Competition Prevention Law criminalizes the use or copying of a
protected item for the intention of misuse or when such copying is liable to
cause confusion among consumers due to the copied item being similar or
identical to another commercially available item.
1)
provide the customs agencies of signatories with the power to prevent the importation
of infringing goods,
2)
permit customs officials to conduct ex officio enforcement,
3)
allow the intellectual property rights holder to file criminal charges against
counterfeiters,
4)
simplify the filing procedures for claims of infringement, and
5)
establish measures to combat Internet copyright infringement.
D)
Countermeasures (Japanese Customs5)
IP rights holders
may submit an Application for Import Suspension to Japanese Customs in order to
attempt to bar the importation of goods/items that the IP rights holder feels
infringe on their IPR. There is no cost associated with filing such an
application (other than the cost incurred by employing a Japanese attorney (bengoshi)
or patent attorney (benrishi) to handle the filing of the application), and only
the IP rights holder may file the application.
After filing of the
Application for Import Suspension (Fig. 1), Japanese Customs may request an
interview with the applicant in order to better understand how the counterfeit goods/items
violate the IPR (i.e., how to better distinguish the real goods/items from the
knock-off goods/items). Registration of the application generally requires 3-5
months and is renewable every two years. A non-Japanese company must appoint a
Japanese representative (attorney or patent attorney) and issue a power of
attorney.
The application which
is to be submitted to one of the following customs centers in Japan (Hakodate,
Kobe, Moji, Nagasaki, Nagoya, Okinawa, Osaka, Tokyo or Yokohama) should
describe the goods/items, products, inventions, etc., protected by the IPR, a
list of authorized distributors and manufacturers, global licensing
information, and as much information regarding known counterfeits as is known.
A comparison of the authentic goods/items and the counterfeit goods/items,
noting their differences should be provided, so that Japanese Customs may
better distinguish the real goods/items from the knock-off goods/items.
When a
potentially infringing item is discovered, Japanese Customs notifies the IP
rights holder and the addressee. If the addressee does not respond within 10
working days (3 days if the goods/items are considered perishable), the goods/items
are deemed to be forfeited and may be destroyed by Japanese Customs.
Should the
addressee respond within the allotted time period and denies that the goods/items
they wish to import are goods/items which infringe on the IP rights holder’s goods/items,
Japanese Customs notifies the IP rights holder thereof and provides 10 working
days for the IP rights holder to examine the addressee’s goods/items in order
to file an opinion as to whether the addressee’s goods/items constitute an
infringement. Thereafter, Japanese Customs will determine whether infringement
exists and will destroy the goods/items if such an infringement is discovered. If
it is deemed that no infringement exists, the goods/items will be released to
the addressee.
(Fig.
1) Fig. 1 is a flowchart indicating the steps taken by Japanese Customs when potentially
infringing goods/items are discovered.
E)
Criminal and Civil Enforcement of IP Rights in
The National
Police Agency (NPA) has the power to arrest sellers of counterfeit goods/items.
Evidence regarding the infringement is provided to the public prosecutor, who
will determine whether to proceed with criminal charges against the
seller/counterfeiter.
The IP rights
holder may sue to have an injunction issued against the seller, counterfeiter,
or importer, and to have the infringing goods/items destroyed. The IP rights
holder may also sue for financial compensation resulting from losses incurred
due to the sale or use of the counterfeit goods/items. (The amount of the
damages awarded in these cases is far below the amounts typically seen in the
United States and the EU, although, in 2015, the JPO, the Ministry of Economy,
Trade and Industry (METI), and other government ministries announced that they would
commence an investigation as to whether to substantially increase the financial
penalties associated with IPR infringement in Japan). (Table 1)
|
Type of IPR Infringement |
Max. Incarceration (years) |
Max. Financial (yen) |
|
Patent |
10 |
10,000,000 ($92,593) |
|
Trademark |
10 |
10,000,000 |
|
Design |
10 |
10,000,000 |
|
Utility Model |
5 |
5,000,000 ($46,296) |
|
Imitating Configuration |
5 |
5,000,000 |
Table 1: Maximum Punishments Permitted
after Conviction for Infringement of IPR
(Data obtained from NAGAHASHI, Yoshihiro “Counterfeiting and
Piracy - A Global Overview” via the WIPO homepage. https://www.wipo.int/edocs/mdocs/aspac/en/wipo_ipr_pnh_11/wipo_ipr_pnh_11_ref_t2.pdf)
Note: US dollar amounts are based on ¥108 = $1 US (Rate as of January
2020)
Initially, a
warning letter is sent to the infringing party (the seller of infringing goods/items,
etc) notifying them of the infringement and that an injunction against the
import, export, sale, and/or use of the goods/items is being sought by the IP
rights holder. In about 70% of the cases in
F)
Online Piracy
When it is
determined that a website is selling counterfeit goods/items that infringe on
an IPR, the IPR holder makes a direct request to the Internet Service Provider
(ISP) in order to obtain the seller’s information. In some cases, the ISP will
not provide such information, and the IPR holder may have a court order the ISP
to provide this information. The IPR holder may also request that the ISP
remove the website on which the infringing goods/items are being sold.
In the case of
Internet auctions, if it is determined that any of the goods/items being sold
on the auction website constitute an infringement or are counterfeit, the
auction site may be ordered to remove the goods/items from their website.
G)
Other Strategies
The International
IP Protection Forum (IIPPF) which is an organization of numerous corporations
and groups dedicated to finding solutions in order to stem the rise in overseas
infringement of Intellectual Property Rights is affiliated with the Japan
External Trade Organization (JETRO). The IIPPF along with members of Japanese
industry and trade organizations holds annual meeting with their Chinese
counterparts and authorities in order to assess and discuss the current state
of enforcement in both countries.
As an alternative to the Trans-Pacific
Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) is a free
trade agreement currently being negotiated between 10 ASEAN members and six
countries (Australia, China, India, Japan, South Korea and New Zealand) having
other free trade agreements with ASEAN countries. Negotiations began in
November 2012 and currently there are numerous roadblocks in the pathway to
achieving a consensus among the participating nations. While the RCEP is mainly
focused on the reduction of tariffs among the 16 nations involved, there are
numerous aspects relating to the protection of IPR and combating the
proliferation of counterfeits.
Other nations (for
example, India) participating in the RCEP negotiations are unlikely to agree to
many of the above demands, due to fears regarding the intellectual property
provisions in the RCEP that would allow pharmaceutical corporations to continue
to block access to generic medicines in regions of the world which cannot
afford to pay what wealthier nations pay. Despite this, it is clear that
H)
Notable cases
Since 2015, along
with the update of the JPO/METI sponsored anti-counterfeiting webpage, Japanese
authorities have taken a more proactive role in prosecuting individuals and
groups engaged in procuring counterfeit goods for sale or engaging in willful
violation of IPR for monetary gain. In fiscal 2015, the number of import
prohibitions and seizures of goods at the Moji Customs Office (Fukuoka) increased
by approximately 37% from the previous year with more than 97% of the
prohibited goods coming from China. However, in 2015, the number of import
prohibitions and seizures of goods/items at the Nagoya Customs Office, while
still high, had declined from the same period in 2014. Most of the goods/items
deemed to be counterfeit or in violation of an existing IPR originated in
Advances in 3D
printing have made it easier for people to simply download a trademarked image
and print it directly on goods. A man was arrested in September 2016 for
printing the trademarked logo for the 2020 Tokyo Olympics on mugs and other
goods and offering these items for sale7. In October 2016, two men were arrested
for adding Chinese subtitles to Japanese animated films and uploading the
altered films for sale on the Internet8.
Also in September
2016,
I)
Conclusion
The JPO and
various governmental ministries have strengthened Intellectual Property and
Customs laws and regulations in order to better confront and prevent the import,
export and sale of counterfeit goods/items. The JPO and various governmental
ministries work together with their counterparts in numerous countries to
exchange information and voice concerns that various industries have regarding
counterfeit goods/items and their impact on public safety, commerce and future
innovation. By educating the public as to the illegality of and the dangers
associated with purchasing counterfeit goods/items, the JPO and Japanese
industry hope to further curtail the availability and the sale of counterfeit goods
in stores and on-line.
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1 “FY2016 JPO/IPR Training
Course on Anti-Counterfeiting Measures for Practitioners” from JPO home page (https://www.jpo.go.jp/e/news/ugoki/201701/012001.html)
2 “Global trade in fake goods worth nearly half a
trillion dollars a year - OECD & EUIPO” OECD website (www.oecd.org/industry/global-trade-in-fake-goods-worth-nearly-half-a-trillion-dollars-a-year.htm)
3 “FY2013 Survey Report on Losses Caused by
Counterfeiting was Compiled” (METI Website)
(www.meti.go.jp/english/press/2014/0317_02.html)
4 English text of ACTA available on the Ministry of
Foreign Affairs website
(www.mofa.go.jp/policy/economy/i_property/acta.html)
5 IPR Protection The Role of
(www.customs.go.jp/mizugiwa/chiteki/pages/ipr_p.pdf)
6 “
7 “
8 “Chinese anime subbing fans arrested in
(http://www.globaltimes.cn/content/1009305.shtml)
9 “Japanese man arrested for selling jailbroken I-Phones"
Naked Security by Sophos September 30, 2016
(https://nakedsecurity.sophos.com/2016/09/30/japanese-man-arrested-for-selling-jailbroken-iphones/)