Summary of Facts

Defendant A is the Representative Department Manger of the Planning Supervision Department of the Engineering Works Main Department of X Company, a major heavy machinery maker, and Defendant B is group manager at X Company and is in charge of development of its computer systems. The system which was developed was to maintain X Company's confidential material. A and others wanted to market the system outside of the company, but there was a very strong sentiment within X Company that to do so would be like "sending salt to one's enemies" and, therefore, the marketing of the system to anyone, other than six companies with which a sales contract had already been entered into, as prohibited. At that point A et al. developed a strong intention to leave X Company and form an independent software marketing company and, because it was necessary to gather customers for the newly established company, they kept the fact that they were going independents a secret while requesting from Y Company its cooperation in marketing X Company's CAD. Defendant C, a staff member at Y Company, took A's words in good faith and made the necessary preparations. For a period of time after establishing their new company, A et al., thinking that the only thing they had to do was market the system developed by X Company as it was or maybe with a few superficial changes, considered surreptitiously copying each system's data and source program as well as its load module, etc. before quitting the company. Additionally, A told C that the new company would be marketing the CAD and, although C thought that he could not get permission to remove that type of industrial secret, he had previously invested capital and commenced marketing activities, thereby consenting to A's plan acceding to A's request for assistance in establishing the new company. For his part, B ordered one of his subordinates, who knew nothing of the scheme, to take the plans, specifications, instructions and circuit diagrams for the system, all of which were in B's custody to both Company Z and Company Y for copying. This case is brought together with a case of attempted fraud but, as that charge is completely unrelated to the Copyright Law, it has been omitted from this decision. Also, although C claims he has an alibi regarding the existence of conspiracy, it is not recognized in this decision and is omitted here from as unrelated to the Copyright Law.

Based on the above facts, A has been sentenced to two years in prison (3 years suspended sentence), B to one year and six months (3 years suspended sentence), and C to one year (two years suspended sentence).

Gist

Regarding the defendants' allegation that the data in question is a copyrighted work but does not fall under the juridical person copyright of Art. 15 of the Copyright Law because X Company has no plans to publish the data in its own name and that the copyright holders are, therefore, A et al., who, in taking and duplicating the data in question were entirely within their rights, the gist of the court's decision is as follows.

Copyright Law Art. 15 establishes 1) that the copyrighted work must be an original idea of the juridical person, 2) it must be something developed by the employees of the juridical person pursuant to their employment, 3) it must be published in the name of the juridical person as the copyright holder, and 4) where important matters not provided for in contracts, company rules or other specific provisions can be filled in, it is intended that the juridical person be the copyright holder. It is clear that the data in question in this case fulfills items 1, 2 and 4 above.

The problem is whether item 3 above has been satisfied or not. In addition to the above interpretation: "it must be published in the name of the juridical person as the copyright holder," the Sixth Subcommittee (on computer software) of the Agency for Cultural Affairs' Copyright Inquiry Commission has established another accepted interpretation: "in addition to actually being published in the name of the juridical person, this includes assumed publication of material which is of such a character that it would be published in the name of the juridical person." (p. 39, Interim Report of said subcommittee, January, 1984).

Because the data in this case was, at the time, a company secret of X Company, there were no actual plans for publication; yet it can be recognized as something which, if in the future was no longer secret and could be published, is of such a nature that naturally X Company would seek to publish."

Giving careful consideration to situations of data such as in this case, there is some doubt about the propriety of allowing employees to become copyright holders for those works for which there are no plans for publication and therefore absolutely do not fall under requirement 3. In particular, while according to Art. 17. Para. 1 of the Law, a copyright holder is suppose to enjoy the right of publication (Art. 18) and other personal rights of a copyright holder as well as duplication rights (Art. 21) and all other copyrights, where, as in this case, the data was developed and maintained inside the juridical person and by nature contained company secrets, even though it usually would not fall under requirement 3 because there were no actual plans for publication, to give the right of publication, which includes the authority to decide whether to publish or not, to an employee, thereby giving the employee the right to decide whether or not to publish company secrets, would be to invite an impractical result. In order to avert such an impractical result, rather than say that where there are no actual plans for publication, requirement 3 has not been fulfilled, it is appropriate to assume publication in the case of data of a nature as that described above and to say that the publication has been in the name of the juridical person, thereby fulfilling requirement 3. Even taking this approach we think there is no contradiction with the exceptional provisions contained in Article 15 of the Law.

(translation by Vicki L. Beyer)

Temple University Japan