The IP High Court in Japan has considered book scanning services to amount to copyright infringement. The judgment became final in March this year because the Supreme Court dismissed the appeal by the service provider. On 30th November, the police in Kyoto arrested a book scanning service provider, who scanned popular Japanese manga comics in response to its clients’ request. This is the first criminal case and could largely affect similar businesses in Japan. In this posting, I would like to briefly explain the reasoning of the IP High Court.
What is a book scanning service?
If you have a lot of paper books, it would be a great feeling to scan all of them and put all data in just one portable tablet for carrying them easily. Of course, you can cut and scan them by yourself. However, you need an initial investment to buy a cutting machine and a scanner, and cutting and scanning many books is a time-consuming task. A book scanning service provider (“service provider”) offers to operate those tasks for you. The contents of this service (“scanning service”) are the following (i) – (v):
(i) The owner of the books sends them to the book scanning service provider.
(ii) The service provider cuts and scans them.
(iii) The service provider sends the scanned data to the owner.
(iv) The service provider throws cut paper books away.
(v) The owner of the books pays for the scanning service.
Since scanning amounts to create digital copies of the books, the scanning service raises several copyright issues. If you do all the above by yourself and use the data only for yourself, it will be totally legal because Article 30 (1) of Japanese Copyright Act (See at the end) contains a private copying exception. But once you assign the task to a service provider, it will trigger hot copyright discussions on who is copying and whether it falls within the scope of the exception for private use.
Judgment of the IP High Court
There were two main copyright issues on the scanning service, which were disputed in the above-mentioned IP High Court’s decision.
(1) Who is legally scanning?
According to the case law in Japan, there are two ways to determine who is legally performing the scanning. One way is to recognize a service provider as a legal actor because it is physically copying. The other way is to recognize an owner of books as a legal actor, taking into account that a service provider is just acting as a “tool” or an “assistant” of this owner. This determination of the actor is really important because if a scanning conduct is recognized as a book owner’s own conduct, the scanning service will be likely to be considered as private use.
The IP High Court held that the legal actor of the scanning conduct was the service provider because it had scanned books with the intention of copying as an individual entity independent from the book owner. Therefore, the service provider could not be considered a “tool” or an “assistant” of the book owner.
(2) Does the conduct fall within the scope of the exception for private use?
According to Article 30 (1), for private use to be admitted, a user must reproduce for himself. Once the service provider is recognized as the legal actor of a scanning conduct, the next issue is whether the service provider is reproducing for himself because he seems to be reproducing for the book owner. In order to meet the statutory requirement, the service provider argued that even if he is considered the legal actor, the book owner should also be recognized as the joint actors. But the IP High Court dismissed the claim and concluded that the service provider does not meet this requirement.
Furthermore, the court held that the service provider has scanned books for a commercial purpose, and its business as a whole is directed to an unspecified large numbers of clients, which does not meet another requirement of “uses within a limited circle ” in Article 30 (1). Therefore, the scanning conduct could not be considered as private use anymore. However, this reasoning does not seem very persuasive because the service provider is distributing scanned data only to its client, which could be considered as “uses within a limited circle “.
There has been some criticism on the judgment of the IP High Court, according to which the identification of the individual who legally scans is wrong and the scope of the exception for private use is too narrow. However, it is a final judgment and one book scanning provider was arrested based on the finding of the judgment. One of the most frightening punishments for business owners is to be involved in a criminal case. Accordingly, service providers in Japan are likely to die out soon unless they develop a new business model that would not amount to copyright infringement.
Article 30 (1) of Japanese Copyright Act
“It shall be permissible for a user to reproduce by himself a work forming the subject matter of copyright for the purpose of his personal use, family use or other similar uses within a limited circle, except in the case: …”