Summary of Annual Report 2016

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1 1 Summary of Annual Report 2016 July 2016 Office of Intellectual Property Protection Ministry of Economy, Trade and Industry General contact desk In response to requests from rights holders and companies, the Government of Japan decided to set up a general contact desk in the Ministry of Economy, Trade and Industry (METI) as mentioned in the Intellectual Property Strategic Program Relevant ministries and agencies work together in order to provide advice in response to inquiries from companies, etc. The Government of Japan has IPRs Overseas Infringements Investigation Program in which it investigates the legal system of a country where infringements occur based on applications filed by companies, etc., and in which it negotiates with the government of the country. Annual report In the Intellectual Property Strategic Program 2005, the Government of Japan decided to prepare an annual report in order to disclose information on the government s consultation services to the public. METI, as a general contact point for the government s measures against counterfeits and pirated products, and relevant ministries and agencies work together in order to prepare the annual report (this is the 11th publication of the annual report). The government provides information to right holders and companies, etc. (Reference) Website of the Government s Office of Intellectual Property Protection * Relevant ministries and agencies: Cabinet Office (Intellectual Property Strategy Headquarters); National Police Agency; Ministry of Internal Affairs and Communications; Ministry of Justice; Ministry of Foreign Affairs; Ministry of Finance; Ministry of Education, Culture, Sports, Science and Technology (Agency for Cultural Affairs); Ministry of Agriculture, Forestry and Fisheries; Consumer Affairs Agency; and Japan Patent Office

1.Report on Services at the Office of Intellectual Property Protection [Main Chapter] (1) Number of inquiries received and information provision and the contact

The number of inquiries 334 is the highest since the government s establishment of the Office in 2004.

percentage, followed by copyright and unfair competition, which have been increasing in recent years. No particular change was observed in 2015.

manufactured are identified Approximately 90% of inquiries and cases of information provision were received by email.

2 1.Report on Services at the Office of Intellectual Property Protection [Main Chapter] (1) Number of inquiries received and information provision and the contact methods In 2015, the Office of Intellectual Property Protection received 909 inquiries and cases of information provision. The number of inquiries 334 is the highest since the government s establishment of the Office in [Number of inquiries and information provision] (2) Percentages of consultation cases by intellectual property category Trademark accounted for the largest percentage, followed by copyright and unfair competition, which have been increasing in recent years. No particular change was observed in [Cumulative total from 2004 to 2015] [2015] [1,410 cases in total] [340 cases in total] (3) Percentages of inquiries in which countries where the counterfeits are manufactured are identified Approximately 90% of inquiries and cases of information provision were received by . [Breakdown of contact method] Of inquiries identifying countries of manufacture and origin of counterfeit or pirated goods, more than the half of the inquiries were related to China (including Hong Kong). No particular change was observed in [Cumulative total from 2004 to 2015] [2015] [568 inquiries in total] [52 inquiries in total] 2

3 (4) Intellectual Property Rights Overseas Infringements Investigation Program [What is the Intellectual Property Rights Overseas Infringements Investigation Program?] Under the Intellectual Property Rights Overseas Infringements Investigation Program, if the intellectual property rights of a private company, etc. are infringed upon overseas, the Government of Japan examines the legal system of a foreign country upon request and, where necessary, seeks to resolve the issue by using international agreements, such as bilateral consultations and the WTO. We have received a total of three applications and are engaged in investigations and bilateral consultations, etc. with the foreign governments of the countries/regions in which the infringements have occurred. Case [Applicant] The Association of Japanese Animations (AJA) and the Japan Video Software Association (JVA) [Country/region] Malaysia [Outline of the case] When supplying an official DVD in Malaysia, the supplier is obligated, under Trade Descriptions (Optical Disc Label) Order 2010, to affix a hologram sticker called an optical disc label in a conspicuous place on the package of the official DVD for which the approval from the Government of Malaysia has been obtained. However, DVDs of Japanese animations, etc., which are not authorized by the copyright holders are labeled with the optical disc labels and are on the market, as if they were originals. [Progress] Jul. 2011: AJA and JVA filed requests for investigation. Aug. 2011: The Government of Japan initiated its investigation into the relevant systems and practices of the Government of Malaysia. Feb. 2012: The Government of Japan responded to AJA and JVA that the examination into whether or not the label applicant was either a copyright holder or a licensee from a lawful copyright holder yielded a finding of insufficient, resulting in the affixing of the optical disc labels onto infringing products by unauthorized parties, and that it judged that there was an issue with the operation of the systems in Malaysia. Apr. and Jun. 2012, Jun. 2013, Feb 2014.: The governments of Japan and Malaysia conducted negotiations to improve the appropriate systems and practices : The Government of Malaysia began to publicize the permission information regarding optical disc labels via the internet. Case [Applicant] Japan Electronics and Information Technology Industries Association (JEITA) [Country/region] Hong Kong Special Administrative Region [Outline of the case] Trademarks of Japanese electronic manufacturers were registered without permission and used as part of trade names by third parties. In Hong Kong, the trademark rights holders had no means to remove or change the unauthorized registered trade names of the third parties. [Progress] Apr. 2005: JEITA filed a request for investigation. May 2005: The Government of Japan initiated an investigation into the relevant systems and practices of the government of the Hong Kong Special Administrative Region. Oct. 2005: The Government of Japan responded to the applicant that the remedies for unauthorized use of a trademark or trade name are insufficient and we have concluded that problems exist in the systems, practices, etc. of Hong Kong with respect to the protection of the applicant s intellectual property rights. Nov. 2005: The Government of Japan initiated its consultation with the Hong Kong government. (1st consultation) * Consultations were held four times in total in Nov. 2005, Feb. 2006, Nov and Jul Apr. 2008: The Hong Kong government published a draft of revisions amending the Company Act, including the amendment necessary to address the above issue. Jul. 2010: Revision of the Company Act Case [Applicant] Japan Electronics and Information Technology Industries Association (JEITA) [Country/region] The Republic of Turkey [Outline of the case] In Jul. 2008, the Supreme Court rendered a decision, with respect to a penal provision on a trademark infringement, that it is a violation of the constitutional law of Turkey to prescribe a criminal punishment in a cabinet order. In addition, the revised Penal Code, which prohibits administrative authorities from prescribing crimes and criminal punishments in cabinet orders, entered into force on Jan. 1, 2009; the penal provision became invalid on the same day. However, because the revised Trademark Act was not enacted until Jan. 28, 2009, there was a period during which no penal provision on trademark infringement existed. Under these circumstances, many not-guilty verdicts were rendered in criminal trials related to infringements of Japanese companies world famous trademarks. Some of the decisions allowed the infringing products, which were seized in the course of criminal investigations, to be returned to the infringers. [Progress] Feb. 2010: JEITA filed a request for investigation. Jun. 2010: The Government of Japan initiated its investigation into the relevant systems and practices of the Government of Turkey. Nov. 2010: Japan, the U.S., and Europe jointly requested the government of Turkey to take prompt action with regard to this issue. Feb. 2012: Japan requested Turkey s Minister of Economy to accelerate the adoption of the revised Trademark Act at the review meeting of Turkey held by the WTO Trade Policy Review Body (TPRB). Jul. 2012: Japan s Minister of Economy, Trade and Industry stated to Turkey s Minister of Economy that Japan expected Turkey to accelerate the adoption of the revised Trademark Act. Presently, we are placing strong pressure on the Government of Turkey toward the revision of the Act and we are monitoring the situation. 3

2. Damage due to Counterfeit Products [Annex] (1) Trend of actual damage due to counterfeit goods 896 businesses were damaged in 2015 by counterfeit goods, keeping highest level on the matter

9%, remaining at the same level. (2) Damage by country/region In overseas markets, Japanese companies suffered the most damage in China, followed by Taiwan and the Republic of Korea.

4 2. Damage due to Counterfeit Products [Annex] (1) Trend of actual damage due to counterfeit goods 896 businesses were damaged in 2015 by counterfeit goods, keeping highest level on the matter continuously from the previous year. The percentages of counterfeit damage (i.e., the number of companies damaged by counterfeiting divided by the total number of respondent companies) was 21.9%, remaining at the same level. (2) Damage by country/region In overseas markets, Japanese companies suffered the most damage in China, followed by Taiwan and the Republic of Korea. The trend of the damages divided by countries and regions remained at the same level in most of the areas, ASEAN region also included, from the past years. Trend in the number of companies suffering counterfeit damage and the percentages of counterfeit damage (FY ) (Source) Japan Patent Office, FY2015 Counterfeit Damage Survey Report" Current situation of counterfeits damaging Japan by country/region (Source) Japan Patent Office, FY2015 Counterfeit Damage Survey Report" (Source) Japan Patent Office, FY2015 Counterfeit Damage Survey Report" 4

(3) Growing Complexity of Counterfeit Problems As shown below, counterfeit problems have become more complex than ever, and are no longer clear and simple forms of infringement.

(5) Increase in Intellectual Property Rights Infringements on the Internet More than 60% of the companies suffering counterfeit damage are facing damage on the Internet, and such damage is on the

As for the breakdown, the damage caused by sales on online shopping sites overseas accounts for the largest percentage (48.2%).

5 (3) Growing Complexity of Counterfeit Problems As shown below, counterfeit problems have become more complex than ever, and are no longer clear and simple forms of infringement. Liquid Crystal Televisions Although these counterfeit television sets are sold with no trademarks on the surface, a famous trademark appears on their screens when the sets are turned on. (5) Increase in Intellectual Property Rights Infringements on the Internet More than 60% of the companies suffering counterfeit damage are facing damage on the Internet, and such damage is on the rise. Categorized by intellectual property right category, trademark infringement accounts for the largest percentage (41.1%). As for the breakdown, the damage caused by sales on online shopping sites overseas accounts for the largest percentage (48.2%). Transition of infringement damage on the Internet Infringed rights Counterfeit air bags Counterfeit air bags do not satisfy safety standards and tend to have weak expansion force or lead to users being injured by scattered parts due to expansion. Some of these counterfeits are on the market without trademarks or with fake trademarks attached immediately before sales, which makes it difficult to regulate them (Source) Japan Patent Office, FY20145Survey Report on Loss Caused by Counterfeiting Damage Details (Source) Japan Patent Office, FY2015 Survey Report on Loss Caused by Counterfeiting (4) Increase in Unlawful Trademark Applications In China, there has been an increase in cases where third parties file inappropriate trademark applications of Japanese company product brands, Japanese place names and regional brands, and Japanese animation characters. Thecausesfortheincreaseininappropriate applications include the easy access to information on overseas brands due to the spread of the Internet, and an increase of people who try to sell their already-registered trademarks at high prices. (Source) Japan Patent Office, FY2015Counterfeit Damage Survey Report" 5

3. Major efforts in 2015 [Annex] (1) Dispatch of the public-private joint mission to China concerning intellectual property protection The Government of Japan and Japanese industries (International

, through two pillars of approach, namely, cooperation and request. However, a high-level mission has not been dispatched since September 2012.

improve their system operation and law enforcement Cooperation Provision of Japan s accumulated knowledge of intellectual property-related laws, etc.

6 3. Major efforts in 2015 [Annex] (1) Dispatch of the public-private joint mission to China concerning intellectual property protection The Government of Japan and Japanese industries (International Intellectual Property Protection Forum: IIPPF) have been sending joint missions to China to request and encourage the Chinese government to improve legal systems and practices, etc., through two pillars of approach, namely, cooperation and request. However, a high-level mission has not been dispatched since September * Two pillars of approach Requests Requested that the central government organizations improve China s intellectual property-related legal systems Requested that regional regulatory authorities improve their system operation and law enforcement Cooperation Provision of Japan s accumulated knowledge of intellectual property-related laws, etc. Strengthening of personnel exchanges between Japanese and Chinese government officials Provision of knowledge to field staff, such as how to distinguish between originals and counterfeits First: Dec. 2002; Leader: Mr. Morishita, Chairman of Matsushita Electric Industrial Co., Ltd.; Participants: Mr. Nishikawa, State Minister of Economy, Trade and Industry, and others Second: May 2004; Leader: Mr. Munekuni, Chairman of Honda Motor Co., Ltd.; Participants: Mr. Nakajima, Director General, Manufacturing Industries Bureau of METI, and others Third: June 2005; Leader: Mr. Munekuni, Special Adviser of Honda Motor Co., Ltd.; Participants: Mr. Okuda, Director General, Manufacturing Industries Bureau of METI, and others Fourth: June 2006; Leader: Mr. Munekuni, Special Adviser of Honda Motor Co., Ltd.; Participants: Mr. Hiraku, Director General, Manufacturing Industries Bureau of METI, and others Fifth: Sep. 2007; Leader: Mr. Munekuni, former Chairman of Honda Motor Co., Ltd.; Participants: Mr. Hatou, Deputy Director-General of Manufacturing Industries Bureau of METI, and others Sixth: Feb. 2009; Leader: Mr. Nakamura, Chairman of Panasonic Corporation; Participants: Ms. Takaichi, State Minister of Economy, Trade and Industry, and others Seventh: Aug. 2010; Leader: Mr. Shiga, COO of Nissan Motor Co. Ltd.; Participants: Mr. Kondo, Parliamentary Vice Minister of Economy, Trade and Industry, and others Eighth: Sep. 2012; Leader: Mr. Shiga, COO of Nissan Motor Co. Ltd.; Participants: Mr. Nakane, Parliamentary Vice Minister of Economy, Trade and Industry, and others The mission visiting the National People s Congress. (September 2012) In addition, a working-level mission was dispatched to Beijing in November 2015 and Guangdong Province in January 2016, and each mission exchanged views with their counterparts. The mission visiting the Supreme People s Court. Three organizations in Guangdong (IPO, AIC, TSB) Joint conference We held each conference in Beijing with four organizations of the Chinese Government (Administration of Quality, Supervision, Inspection and Quarantine, General Administration of Customs, State Intellectual Property Office and Supreme People's Court), and we exchanged opinions on IIPPF s propositions and made requests to them. We had a joint conference with four organizations of Guangdong Province (Intellectual Property Office, Administration for Industry and Commerce, Bureau of Quality and Technical Supervision and Food and Drug Administration) and confirmed carrying cooperation ahead to protect Intellectual Property Right. 6

(2) Promotion of exchange and cooperation projects with countries in which infringements arise Holding genuine/fake determination seminars, etc.

for crackdowns on counterfeit products, etc. In FY 2015, these seminars were held 12 times in total in China, Vietnam, Thailand and Russia.

7 (2) Promotion of exchange and cooperation projects with countries in which infringements arise Holding genuine/fake determination seminars, etc. Genuine/fake determination seminars for public officers of enforcement-related organizations, such as customs and police departments, are held every year, with the aim of providing practical know-how for crackdowns on counterfeit products, etc. In FY 2015, these seminars were held 12 times in total in China, Vietnam, Thailand and Russia. Inviting officials from the intellectual property department of Guangdong Provincial Government In order to establish a cooperative relationship with the governments of countries where infringements arise, public officers in intellectual property related departments of such countries were invited to exchange opinions with the Government of Japan and Japanese companies for better established mutual understanding. <Invitation for Saudi Arabian officials> In June 2015, we invited public officers of the Ministry of Commerce and Industry and Saudi Customs of the Kingdom of Saudi Arabia. We had fruitful discussion in comparison with that of 2013, and confirmed further cooperation between governments and companies to combat counterfeit products through giving a presentation to Japanese companies as well as exchanging opinions. Genuine/fake determination seminar in Hanoi City (November 2015 Seminar in Japan Countries where genuine/fake determination seminars were held worldwide (as of March 2016) Also we invited General Administration of Customs (China), State Administration of Industry and Commerce (China), Directorate General of Intellectual Property (Indonesia), Ministry of Domestic Trade, Co-operatives and Consumerism (Malaysia) and Eurasian Economic Commission 7

4.Improvement of bilateral relationship with China Annex (1) Japan-China Intellectual Property Rights Working Group Resumed Based on the Ministerial MOU signed in June 2009, the 4 th Japan- China

8 4.Improvement of bilateral relationship with China Annex (1) Japan-China Intellectual Property Rights Working Group Resumed Based on the Ministerial MOU signed in June 2009, the 4 th Japan- China Intellectual Property Rights Working Group was resumed in May, 2015 in Beijing, China. About 3 years had passed since the 3 rd WG was held in st IPR WG :November, 2009, Tokyo 2 nd IPR WG:May,2010, Beijing 3 rd IPR WG:October,2011, Kobe 4 Th IPR WG:May, 2015, Beijing In the 4 th WG, we focused on countermeasures against infringement on websites and provision of a better environment for strengthening further enforcement. Both Japan and China agreed the necessity of exchanges in the area of intellectual property rights and would hold the next WG in Japan. Date and Venue:May 11, 2015 at Department of Commerce, China Attendants (China):Ministry of Commerce, State Administration for Industry and Commerce, State Intellectual Property Office AQSIQ, Ministry of Science and Technology, Ministry of Agriculture Ministry of Public Security of the People's Republic, Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting Attendants (Japan):METI, and JPO, Prime Minister s Secretariat, National Police Agency, Ministry of Foreign Affairs, Ministry of Finance, Agency for Cultural Affairs, Ministry of Agriculture, Forestry and Fishery this report was prepared based on the information as of June 17, The 5 th IPR WG was held in June 28, 2016 in Tokio. (2) A Sign for Resuming Political Dialogue with State Administration for Industry and Commerce (SAIC) METI invited 5 officials in charge of trademark from SAIC in March, Both sides confirmed further cooperation on disclosure of infringement of trademarks and application on BOUNIN trademarks, which have been getting more serious recently. In the meeting with Japanese companies, Japanese right holders gave their opinion to SAIC on the matter of operation of the revised Trademark Law in light of recent cases. 8

5.Voices from Overseas Annex Columns of officials in JETRO overseas

Takeshi Isozumi, JETRO Singapore -Facilitation of IP enforcement in

9 5.Voices from Overseas Annex Columns of officials in JETRO overseas offices in China and other Asian countries -IP enforcement in China- Mr. Tomotaka Honma, JETRO Beijing -IP protection of today in Middle East and Establishment of IPG- Mr. Masao Goto, JETRO Dubai -IP Activity in Singapore- Mr. Takeshi Isozumi, JETRO Singapore -Facilitation of IP enforcement in India- Mr. Yohei Sugawara, JETRO New Delhi -Actual situation of IP protection in Europe and measures of IP department in JETRO Dusseldorf- Mr. Hirokazu Nakano, JETRO Dusseldorf 9

10 (Reference)Principal events in 2015 <2015> May June September October November Held the 4 th Japan China IPR Working Group [Beijing, China] Invited officials from Saudi Arabia Invited officials from Eurasia Economic Committee Invited officials from Malaysia (MDTCC) Dispatched public private sector joint mission to China (working level) [Beijing] <2016> January February March Dispatched public private sector joint mission to China (working level) [Guangdong] Invited officials from the Center for Internet Regulatory, China Invited officials from General Administration of Customs, China Invited officials from Indonesia (DGIP) Invited officials from SAIC, China 10

Advanced and Emerging Economies Two speed Recovery

Advanced and Emerging Economies Two speed Recovery 23 November 2 Bauhinia Foundation Research Centre Masaaki Shirakawa Governor of the Bank of Japan Slide 1 Japan s Silver Yen and Hong Kong s Silver Yuan