Japan’s Entry into the Trans-Pacific Partnership and What it Means for Intellectual Property

After suffering from the Tsunami and the Fukushima Daiichi nuclear disaster in 2011, Japan’s economy still struggles to recover.

Japan’s recent entry into the Trans-Pacific Partnership (TPP) is part of Prime Minister Shinzo Abe’s plan to restore Japan’s economy after the last few years of recession.  The TPP was established to remove barriers and set standards among the participating countries concerning workers’ rights, environmental protection and Intellectual Property Rights. The TPP currently consists of 12 member countries, including the U.S., Australia, New Zealand, Mexico, Canada, Chile, Peru, Malaysia, Vietnam, Singapore and Brunei.

In the United States, the TPP serves as part of the Obama administration’s plan to focus economic and military resources in Asia to counteract and balance the power of China. With the recent inclusion of Japan, the U.S. is calling for Japan to eliminate their high tariffs on imports and to build a deal that opens Japan to U.S. automotive, farm products and insurance firms.

Part of the TPP agreement would also include a chapter on Intellectual Property in regards to copyrights, trademarks and patents. The proposed plans, if put into effect, would require participating countries to change their domestic copyright laws in order to conform with the new agreement.

Opponents of the TPP believe that the proposed Intellectual Property laws could restrict freedoms of speech and access to medication in the name of increased digital security and patenting. In response to these critiques, I sat down with Tatsuya Sawada, a Managing Partner and Japanese Patent Attorney with Sugimura International Patent and Trademark Attorneys. Established in 1923 and based in Japan but with regional offices in Palo Alto, California, Sugimura handles patent, utility model, design and trademark law.  Here’s what Sawada had to say:

1. How do you feel about Japan’s entry into the Trans-Pacific Partnership (TPP)?

SUGIMURA is hopeful that Japan’s entry into the Trans-Pacific Partnership will serve as the economic stimulus that Prime Minister Shinzo Abe spoke of. Caution must be taken to ensure the implementation of any resulting agreement does not harm the domestic agricultural, medical and intellectual property industries. Although we hold concerns regarding the lack of transparency within the negotiation process, we also understand the need to preserve negotiation strategies and to allow for open discussion among the member partners. We hope that the TPP stakeholders will take the concerns of the people into consideration during their negotiations.

2. How will the TPP affect Japan’s Intellectual Property laws? Will it affect them for the better? Make them more restrictive? How would those changes affect the Sugimura company?

For the information that is available to the public, we understand that the current terms of the negotiations of the Intellectual Property standards of the TPP have mirrored current US standards. The implementation of such a system would prove burdensome to the Japanese IP system. It would be preferable if a compromise could be reached among the systems.

However, if such a system were to be implemented in Japan, intellectual property laws would change rather drastically to mirror those of the US. The result would likely be a similar change in the culture of the IP community. Most notably, Japanese intellectual property rights holders would likely become more litigious due to the changes made to the court system, particularly with regard to the allowable damages of “up to three times the amount of the injury found or assessed.”

For the Japanese IP community, there are six main areas of concern with regard to the TPP negotiations. The first of these concerns is the proposed requirements calling for the protection of trademarks based on use. The Japanese trademark system, like many other international systems, is unlike the US system and is strictly registration based. In order to allow for harmonization across the TPP countries, it would be best if the US conformed to the other countries and adopted the registration based approach.

Second, the proposed requirements do not mandate the publication of all patent applications. In order for transparency within patent offices, all patent applications should be published without exception. More specifically, provisions like 35 USC 122 (b)(2)(B), which allows an applicant to make a request for not publishing an application should be prohibited by the TPP.

Third, the patent application procedure should not be unduly burdensome for any member country. As such, the US should reduce the burden required by their Information Disclosure Statements and harmonize with the other countries.

Next, the proposed requirements would require Japan to extend its copyright term from 50 years after the life of an author to 70 years after the life of an author. The US has requested this change from Japan in the past and Japan has rejected such an extension in light of public outcry.

Additionally, the proposed requirements impose criminal statutory penalties for copyright infringement without a need to show actual harm. This strict application would prove unduly burdensome and impractical for enforcement purposes. An amendment of such requirements should be made to allow for criminal action to be prosecuted only if the copyright owner accuses a potential infringer.

Lastly, due to the stringent consequences of the US Economic Espionage Act and in light of the manner in which it has been applied in the past, we believe the US Economic Espionage Act should not apply to TPP member countries.

We believe that subsequent negotiations, like those held later this month, will address these issues and are hopeful that the resulting TPP agreement will continue to protect the rights of the intellectual property right holders as well as the general public.

3. Do you believe that the proposed IP laws could restrict freedoms of speech in the name of digital security and patenting?

The current proposed IP laws of the TPP could restrict the freedoms of speech in Japan. As we mentioned above, the proposed requirements impose criminal statutory penalties for copyright infringement without a need to show actual harm. This strict application would prove unduly burdensome and impractical for enforcement purposes.

The consequence of such a criminal action can be best illustrated by opponents of the TPP within Japan’s anime community. Opponents expressed concern that such provisions would destroy the derivative fan-published works popular in Japan’s anime community and thus weaken the entire anime industry.

An amendment of such requirements should be made to allow for criminal action to be prosecuted only if the copyright owner accuses a potential infringer. This would eliminate the fears of the anime community that their fans will be prosecuted for crimes that support their industry and produce no harm to the copyright holders.