Copyright, Control and Comics: Japanese Battles Over Downstream Limits on Content

Abstract

Over the past decade, a national battle has raged over how much downstream control copyright holders should have over their products once they are sold to distributors, retailers and consumers. By and large, consumers seem to have won this battle as legal change and business innovation eroded downstream limits. Copyright holders have been unsuccessful in their attempts to roll back this erosion, and indeed have been further hampered by judges and antitrust enforcers who have bolstered the trend.

This nation is not the United States; it is Japan. Despite strenuous objections by authors and publishers, the expansion of what Japanese consumers can do with the copyrighted comics they buy threatens to reshape the $5 billion domestic industry. For Americans, the Japanese experience is instructive in several ways. Unlike the American debate regarding downstream controls, the Japanese battle has not involved actual or alleged illicit copying. Instead, it appears that gains from price discrimination are motivating authors and the publishing industry. Additionally, a change in transaction costs made possible by business innovation appears to have undercut the ability of publishers to tailor prices. Also of significant interest, the erosion in downstream control has coincided with stunning growth of the Japanese comic medium as a worldwide export, a notable contradiction to the common assertion of the U.S. copyright industry that stronger copyright protection must necessarily yield more creativity.

Keywords: resale price maintenance (RPM), copyright, price discrimination, first sale, Japan, comics