July 2016Office 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 2004.”

– 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 http://www.meti.go.jp/policy/ipr/index.html

* 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

Summary of Annual Report 2016

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 2015.

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

(2) Percentages of consultation cases by intellectual property category

(3) Percentages of inquiries in which countries where thecounterfeits are manufactured are identified

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In 2015, the Office of Intellectual Property Protection received909 inquiries and cases of information provision. The number ofinquiries 334 is the highest since the government’s establishmentof the Office in 2004.

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

“Trademark” accounted for the largest percentage, followed by“copyright” and “unfair competition”, which have been increasing inrecent years. No particular change was observed in 2015.

[Number of inquiries and information provision]

[Breakdown of contact method]

[Cumulative total from 2004 to 2015] [2015]

[1,410 cases in total] [340 cases in total]

[Cumulative total from 2004 to 2015] [2015]

[568 inquiries in total] [52 inquiries in total]

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. 2006 and Jul. 2007.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.

(4) Intellectual Property Rights Overseas Infringements Investigation Program

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. 2014 : The Government of Malaysia began to publicize the permission information regarding optical disc labels via the internet.

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[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 uponoverseas, the Government of Japan examines the legal system of a foreign country upon request and, where necessary, seeks to resolve the issue by using internationalagreements, 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.

(1) Trend of actual damage due to counterfeit goods

(Source) Japan Patent Office, “FY2015 Counterfeit Damage Survey Report"

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.

Trend in the number of companies suffering counterfeit damage and the percentages of counterfeit damage (FY2004–2014)

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2. Damage due to Counterfeit Products [Annex]

(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 dividedby countries and regions remained at the same level in most of the areas, ASEANregion also included, from the past years.

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"

５

(3) Growing Complexity of Counterfeit Problems

◆ In China, there has been an increase in cases where third parties fileinappropriate trademark applications of Japanese company product brands,Japanese place names and regional brands, and Japanese animation characters.

(5) Increase in Intellectual Property Rights Infringements on the Internet

More than 60% of the companies suffering counterfeit damage are facing damage on theInternet, and such damage is on the rise.

Categorized by intellectual property right category, trademark infringement accounts forthe 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

(Source) Japan Patent Office, “FY20145Survey Report on Loss Caused by Counterfeiting”

(4) Increase in Unlawful Trademark Applications

◆ As shown below, counterfeit problems have become more complex thanever, and are no longer clear and simple forms of infringement.

◆ Liquid Crystal TelevisionsAlthough these counterfeit television sets are sold with no trademarks on

the surface, a famous trademark appears on their screens when the sets areturned on.

◆ Counterfeit air bagsCounterfeit air bags do not satisfy safety standards and tend to have weak

expansion force or lead to users being injured by scattered parts due toexpansion. Some of these counterfeits are on the market withouttrademarks or with fake trademarks attached immediately before sales,which makes it difficult to regulate them

◆ The causes for the increase in inappropriate applications include the easyaccess to information on overseas brands due to the spread of the Internet, andan increase of people who try to sell their already-registered trademarks at highprices.

(Source) Japan Patent Office, “FY2015Counterfeit Damage Survey Report"

(Source) Japan Patent Office, “FY2015 Survey Report on Loss Caused by Counterfeiting”

Damage Details

First: Dec. 2002; Leader: Mr. Morishita, Chairman of Matsushita Electric Industrial Co., Ltd.; Participants: Mr. Nishikawa, State Minister of Economy, Trade and Industry, and othersSecond: May 2004; Leader: Mr. Munekuni , Chairman of Honda Motor Co., Ltd.; Participants: Mr. Nakajima, Director General, Manufacturing Industries Bureau of METI, and othersThird: June 2005; Leader: Mr. Munekuni, Special Adviser of Honda Motor Co., Ltd.; Participants: Mr. Okuda, Director General , Manufacturing Industries Bureau of METI, and othersFourth: June 2006; Leader: Mr. Munekuni, Special Adviser of Honda Motor Co., Ltd.; Participants: Mr. Hiraku, Director General, Manufacturing Industries Bureau of METI, and othersFifth: 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 othersSixth: Feb. 2009; Leader: Mr. Nakamura, Chairman of Panasonic Corporation; Participants: Ms. Takaichi, State Minister of Economy, Trade and Industry, and othersSeventh: Aug. 2010; Leader: Mr. Shiga, COO of Nissan Motor Co. Ltd.; Participants: Mr. Kondo, Parliamentary Vice Minister of Economy, Trade and Industry, and othersEighth: Sep. 2012; Leader: Mr. Shiga, COO of Nissan Motor Co. Ltd.; Participants: Mr. Nakane, Parliamentary Vice Minister of Economy, Trade and Industry, and others

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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 toChina 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 2012.

* Two pillars of approach

● Requested that the central government organizations improveChina’s intellectual property-related legal systems

●Requested that regional regulatory authorities improve their systemoperation and law enforcement

●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

Requests Cooperation

The mission visiting the National People’s Congress.(September 2012)

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 ChineseGovernment (Administration of Quality, Supervision, Inspection and Quarantine,General Administration of Customs, State Intellectual Property Office and SupremePeople's Court), and we exchanged opinions on IIPPF’s propositions and maderequests to them.

• We had a joint conference with four organizations of Guangdong Province(Intellectual Property Office, Administration for Industry and Commerce, Bureau ofQuality and Technical Supervision and Food and Drug Administration) and confirmedcarrying cooperation ahead to protect Intellectual Property Right.

In addition, a working-level mission was dispatched to Beijing in November 2015 and Guangdong Province in January 2016, and each missionexchanged views with their counterparts.

●Inviting officials from the intellectual property department ofGuangdong Provincial Government

In order to establish a cooperative relationship with thegovernments of countries where infringements arise, public officersin intellectual property related departments of such countries wereinvited to exchange opinions with the Government of Japan andJapanese 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 SaudiArabia. We had fruitful discussion in comparison with that of 2013,and confirmed further cooperation between governments andcompanies to combat counterfeit products through giving apresentation to Japanese companies as well as exchanging opinions.

Also we invited General Administration of Customs (China), StateAdministration of Industry and Commerce (China), DirectorateGeneral of Intellectual Property (Indonesia), Ministry of DomesticTrade, Co-operatives and Consumerism (Malaysia) and EurasianEconomic Commission

(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 ofenforcement-related organizations, such as customs and policedepartments, are held every year, with the aim of providingpractical 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.

Genuine/fake determination seminar in Hanoi City (November 2015

Seminar in Japan

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Countries where genuine/fake determination seminars were held worldwide (as of March 2016)

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4.Improvement of bilateral relationship with China Annex

（１） Japan-China Intellectual Property Rights Working Group Resumed

(2) A Sign for Resuming Political Dialogue with State Administration for Industry and Commerce (SAIC)

Based on the Ministerial MOU signed in June 2009, the 4th Japan-China Intellectual Property Rights Working Group was resumed in May, 2015 in Beijing, China. About 3 years had passed since the 3rd WG was held in 2012.

In the 4th 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.

1st IPR WG ：November, 2009, Tokyo2nd IPR WG：May,2010, Beijing3rd IPR WG：October ,2011, Kobe4Th IPR WG：May, 2015, Beijing

Date and Venue：May 11, 2015 at Department of Commerce, ChinaAttendants (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 CounterfeitingAttendants (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

METI invited 5 officials in charge of trademark from SAIC in March, 2016. 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.

※this report was prepared based on the information as of June 17, 2016. The 5th IPR WG was held in June 28, 2016 in Tokio.

９

５．Voices from Overseas 【Annex】

●Columns of officials in JETRO overseas offices in China and other Asian countries

－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

－IP enforcement in China－Mr. Tomotaka Honma, JETRO Beijing

<2015>

May

June

September

October

November

<2016>

January

February

March

○Held the 4th 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]

○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

（Reference）Principal events in 2015