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Copyright infringement as user innovation

Abstract

Copyright holders of major manga and anime in Japan have been ignoring copyright infringement by \(d{\bar{o}}jinshi\) (or doujinshi), a Japanese word referring to self-published works created predominately by amateurs. Many of \(d{\bar{o}}jinshi\) are derivative works of popular anime or manga but are sold without official permissions from the copyright holders. Thus, it is highly possible that the activity of \(d{\bar{o}}jinshi\) creators violates Article 28 of the Copyright Law of Japan, which states the rights of original authors in the situation of exploitation by derivative works. We demonstrate that ignoring copyright infringement by a derivative creator can be optimal for the copyright holder based on an economic model that incorporates both positive and negative externalities of derivative work. We also demonstrate that when unauthorized use of the copyrighted work is optimal for the copyright holder, it is also optimal for social welfare although the opposite is not necessarily true.

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Notes

  1. 1.

    For details of \(d{\bar{o}}jinshi\), especially the differences from an American legal understanding of parody, see Mehra (2002). See also Lessing (2004).

  2. 2.

    “What is the Comic Market,” the Official Comic Market Site (http://www.comiket.co.jp/info-a/WhatIsEng080528.pdf, last accessed on 2012/11/27).

  3. 3.

    Such chain bookstores include a publicly traded company Mandarake, which reports the sales from \(d{\bar{o}}jinshi\) in its financial statements (written in Japanese, http://www.mandarake.co.jp/company/kessan/, last accessed on 2012/11/27).

  4. 4.

    Examples of styles and ideas developed by \(d{\bar{o}}jinshi\) creators include those of lolicom and yaoi genres. See Mehra (2002) for the descriptions of the two genres. The development of yaoi genre, which aims for a female audience, seems to be especially influential on relatively recent anime and manga. For example, a major Japanese anime distributor, Bandai Visual, issued a press release on July 21, 2005 that it would further increase producing anime works targeting a female audience, a large part of which comprises yaoi fans (written in Japanese, http://www.bandaivisual.co.jp/press_pdf/1/163.pdf, last accessed on 2012/11/27).

  5. 5.

    Just because of this reason, Nintendo, the copyright holder for Pokemon series, made a criminal declaration under Japan’s Copyright Law in 1999, and an author selling a \(d{\bar{o}}jinshi\) series of Pokemon characters was arrested. See Mehra (2002) for further details.

  6. 6.

    \(D{\bar{o}}jinshi\) markets: Yano Research Institute, Otaku Market in Japan: Key Research Findings 2012 (available at http://www.yanoresearch.com/press/pdf/1002.pdf, last accessed on 2012/11/27). Commercial comic book and magazine markets: All Japan Magazine and Book Publisher’s and Editor’s Association, Annual Report on the Publication Market 2012 (written in Japanese).

  7. 7.

    Otaku Market in Japan: Key Research Findings 2012 forecasts that 2012’s \(d{\bar{o}}jinshi\) markets will grow compared to the market in 2010, that is, before the great earthquake in March 11, 2011. On the other hand, Annual Report on the Publication Market 2012 reports that sales of commercial comic books and magazines had been decreasing 10 years in a row since 2001.

  8. 8.

    For patent and innovation, Bessen and Maskin (2009) show that imitation can encourage sequential innovation and benefit the original inventor.

  9. 9.

    Derivative works are not necessarily complement nor substitute to the original. Moreover, derivative works can be copyrightable if they have some expressive elements not found in the original work. See Landes and Posner (1989).

  10. 10.

    The variable y can be also continuous. In that case, the unauthorized use is ignored with probability less than 1. When y is continuous, however, the analysis become quite complicated though the implication is basically the same as the one for the discrete case.

  11. 11.

    In the model of Landes and Posner (1989), for example, the fixed cost e is a function of the copyright protection level because the producer uses other copyrighted works to create its original work.

  12. 12.

    The assumption for e is for simplicity and can be relaxed. Since the copyright protection level is not changed by the publisher’ behavior, the same results are obtained under the assumption, for example, \(e \le \max \left\{\Uppi(0), \Uppi(1) \right\}\).

  13. 13.

    Suppose that the costs of copying and obtaining s are not zero. Then, if the publisher chooses to license the use, the license fee needs to be smaller than the profit from selling reproductions so that the derivative creator has an incentive to provide the derivative work and its reproductions. In that case, we need one more parameter for the licensing rate smaller than 1, which makes the model more complicated but does not change the main results.

  14. 14.

    In our model setting, the quality of the derivative work when the publisher licenses the copyright is 1 − s. Thus, when s becomes larger, it also decreases the quality and the demand of the derivative work under y = 0, which make choosing y = 0 less profitable.

  15. 15.

    The net social welfare is W(y) − e, where e is the fixed costs of the two original works. Since the publisher’s decision y does not affect e, the results examining \(W(0)-e \, \lesseqgtr \, W(1)-e\) and \(W(0) \lesseqgtr W(1)\) are the same.

  16. 16.

    “The cultural committee of the government summarized the views on introducing general rules of the use of copyrighted works, paying attention to unjustifiable infringement (written in Japanese),” Nihon Keizai Shinbun (The Nikkei Newspaper), January 26, 2011.

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Acknowledgments

We thank two anonymous referees for the valuable and constructive comments. We also thank Christian Handke, Koichiro Hayashi, Tatsuo Tanaka, and participants in ACEI 2012 17th International Conference on Cultural Economics in Kyoto and the 8th Annual Meeting of Japan Law and Economics Association in 2010 for helpful discussions. This work was supported by JSPS KAKENHI Grant Number 23243042, 24730212. Of course, any remaining errors are our own responsibility.

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Correspondence to Shinya Kinukawa.

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Arai, Y., Kinukawa, S. Copyright infringement as user innovation. J Cult Econ 38, 131–144 (2014). https://doi.org/10.1007/s10824-013-9200-3

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Keywords

  • Copyright
  • Derivative work
  • \(D{\bar{o}}jinshi\)
  • User innovation

JEL Classification

  • K39
  • O34