(Tokyo, Japan) The Tokyo District Court today issued its judgment in a civil suit in which three major software makers claimed damages for infringement of copyright by corporate piracy. The three, members of the Business Software Alliance (headquarters: Washington, D.C., USA; Chairman: Robert W. Holleyman; hereinafter referred to as "BSA"), a non-profit organization whose aim is the protection of copyrights in computer software, had claimed compensation from Tokyo Legal Mind Inc., a major bar exam preparatory school, on April 19, 2000. The Tokyo District Court (Chief Judge Toshiaki Iimura) ruled in favor of the plaintiffs, acknowledging that their copyrights had been violated when their software products were copied by the defendant. The ruling held as groundless, the defendant’s claim that copyright infringement becomes nullified if legitimate copies of a software product are purchased once the illegal copies have been discovered. As a result, Tokyo Legal Inc. was ordered to pay damages totaling 84,720,400 yen.

This decision is the first in Japan concerning the infringement of copyright by corporate piracy. The result of this decision, in which the court recognized the seriousness of the infringement of copyright by corporate piracy claimed by the plaintiffs, is a major advance toward the strengthening of copyright protection in Japan in the future.

The plaintiffs in the suit are Apple Computer, Inc. (headquarters: Cupertino, CA, USA), Adobe Systems, Inc. (headquarters: San Jose, CA, USA) and Microsoft Corporation (headquarters: Redmond, WA, USA). Subsidiaries of the three companies have been operating in Japan for over 10 years and have been contributing to the development of the country’s IT industry.

The plaintiffs had demanded the destruction of the illegal copies and the payment of damages under the Copyright Law with respect to the defendant company's having illegally used its in-house computers to copy software copyrighted by the plaintiffs and then used that software in its business operations.

The software that was illegally copied and used by Tokyo Legal Mind included a product with a network protection function designed to thwart illegal copying. Most of the in-house computers at Tokyo Legal Mind, however, were equipped with a third-party software product that enabled them to override and defeat the protection function and copy the software anyway.

The Tokyo District Court upheld the defendant’s infringement of software copyright by producing illegal copies in the organization,

• 1. completely denied defendant’s claim as groundless that copyright infringement becomes nullified if legitimate copies are purchased once the illegal copies are discovered, and ordered Tokyo Legal Inc., to pay damages,
• 2. found the standard for the computation of damages to be the retail price of a legitimate copy of the infringed software product; and
• 3. as for the number of illegal copies, the court found that illegal copies had been made in excess of those verified in procedures for the preservation of evidence which were conducted at one school operated by the defendant company in May of 1999.

The plaintiffs praised the court's recognition of a number of illegal copies in excess of those that were actually verified. The ruling, the plaintiffs said, is an epoch-making one, because it is the first in Japan concerning the infringement of copyright by corporate piracy. In that sense, the court’s ruling is a major step forward in protecting the copyrights of all software makers, the plaintiffs said.

The illegal copying of software not only harms software makers but also ultimately causes serious harm to end users through the spreading of computer viruses, among other things. In addition, it harms the businesses of distributors and resellers and discourages software developers from developing new products. Moreover, software serves as the foundation of today's information society, and illegal copying impedes the advancement of information technology. The plaintiffs applauded this court’s decision, which will certainly drive IT promotion in Japan.

Naoko Mizokoshi, who heads Japan’s activities of the Business Software Alliance, said, "The court's decision is very significant not only for the software industry but for the IT industry as a whole in that the court has acknowledged for the first time the infringement of copyright by illegal corporate piracy. Since the software serves as the infrastructure of today's information society, it is quite important that the right of the owners of copyright and other intellectual properties should be securely protected by means of reinforced protective measures in order to make a step into the information society and have the IT industry make a contribution to the economic prosperity of Japan."

About BSA Since 1988, the Business Software Alliance has represented the world's leading software developers to protect and promote a global software industry. BSA educates computer users on issues impacting the software industry through public policy expertise and assists its members in enforcing their copyrights. The BSA has provided a variety of educational and marketing activities to promote anti-piracy practices in Japan since 1992. These activities include free anti-piracy seminars, software management training, and the distribution of informational materials. To strengthen such activities and efforts, the BSA launched its “Anti-Piracy Campaign” on April 22, 1997. Its toll-free hotline number is 0120-79-1451. The BSA also started an e-mail hotline in August 1997. The address is hotline@bsa.or.jp. The BSA has worked with its member companies to resolve software piracy through lawsuits and legal actions based on information provided via the hotline and other outlets. The BSA’s Japanese web site can be viewed at: http://www.bsa.or.jp.

BSA's members include global and local leaders in information technology development including Adobe, Apple, Autodesk, Bentley Systems, CNC Software / Mastercam, Macromedia, Microsoft, Network Associates, Symantec, and UGS. Members of BSA's Policy Council include these companies and Compaq, IBM, Intel, Intuit and Sybase. In Japan, JUSTSYSTEM has participated in BSA’s activities. For educational activities, the BSA cooperates in Japan with the Association of Copyright for Computer Software.

The Piracy rate in Japan has been declining gradually since the BSA started this research and the rate reached 31% in 1999. Various activities in copyright protection and end user education carried out by industry organizations and anti-piracy organizations have led to increased awareness among end users on copyright protection and appropriate software management practices. # # #

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Name: Osamu Ishihara
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Phone: 81-3-5472-8511

Name: Toshiaki Nakata
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Phone: 81-3-5472-8511