(Unfair Competition Prevention Act/Japan) Promulgation of Law that Partially Amends the Unfair Competition Prevention Act (Acts of Imitation in the Digital Realm)
“The Bill for Partial Amendment of the Unfair Competition Prevention Act” was passed and enacted on June 7, 2023, and promulgated on June 14, 2023.
https://www.jpo.go.jp/system/laws/rule/hokaisei/sangyozaisan/fuseikyousou_2306.html
This amendment to the law was made in view of changes in the environment, such as further developments in the field of intellectual property such as digitalization and globalization, and includes, the relaxation of procedures for exceptions to loss of novelty through amendments to the Design Act, as well as partial amendments to the Trademark Act, Patent Act, and Unfair Competition Prevention Act, thereby striving to revise the intellectual property system to respond to the demands of the times.
Here we explain the prohibition of acts of imitation in the digital realm (so-called Metaverse) by the amendment of the Unfair Competition Prevention Act.
Unfair Competition Prevention Act Article 2(1)(iii) prohibits the act of distributing, etc., products that imitate the products of others (so-called “dead copies”).
As only distribution, etc., of products in the real world (selling in actual stores, for example) was considered to be subject to the prohibition, according to provisions before the amendment, it was difficult to prohibit distribution, etc., in the digital realm (distribution, etc., in the Metaverse of completely identical computer-generated image and video imitations of the products, for example) under said Act.
Accordingly, Unfair Competition Prevention Act Article 2(1)(iii) was amended to explicitly state that distribution, etc., in the digital realm such as above are also subject to prohibition, by adding acts of “provision via telecommunication lines” to the acts prohibited in said article.
In order to correspond to acts prohibited thereby, however, a product in the real world and in its counterpart in the digital realm must be “substantively identical” (i.e., so similar that it seems identical).
Real-world products can actually be physically handled and compared.
As this is not the case for products in the digital realm, however, it may be difficult to assert and prove that they are “substantively identical” in the case of images or videos reproduced in two dimensions only, for example.
Nevertheless, transactions of products in the digital realm are expected to continue evolving and diversifying as the metaverse market expands, which likely means that this amendment will have a significant influence on metaverse enterprises, creators, and the like.
It should be noted that the effective date of this amendment is, except for certain provisions, a date specified by Cabinet Order within a period not exceeding 1 year from the promulgation date.