Japanese Court's Reversal in File-Sharing Case is a Clear Win for Software Innovators

A Japanese appeals court yesterday reversed a lower court ruling against file-sharing software developer Isamu Kaneko related to his "Winny" program. This ruling is a departure from recent rulings in both the US and Sweden, and clearly demonstrates that Japan's courts have an eye toward fostering innovation rather than protecting the status quo on behalf of content owners.

The criminal proceeding against Kaneko turned on the issue of whether the Winny program "encouraged" file-sharing and copyright infringement. This approach is directly analogous to the idea of contributory infringement here in the U.S. The doctrine of contributory infringement basically goes like this: If you know that your actions/products/etc. are used for infringing activity and you intentionally induce or encourage people to participate in the activity or use the product, you are also liable for any infringement that they commit. The case law in this area has been developing for over two decades, but was codified in 2005 by the Supreme Court in the landmark MGM v. Grokster case. However, it is the 1984 Sony Betamax case that provides an escape. In that case, the Supreme Court said that a product is not designed for contributory infringement as long as it has significant non-infringing uses. Yesterday's ruling from the Japanese high court clearly recognizes the goal of Sony, which is the continued encouragement of technological innovation.

Worldwide, the big content companies have seemed to fear this encouragement of technological innovation in the area of file-sharing. Rather, they have attempted to place civil and criminal liability upon file sharers, software developers and tracking site hosts in order to cut off the supply of unauthorized copies of music, movies, software, etc. Big Content has seemingly ignored the tack whereby they would become participants in the technological foot race and lead the next iteration of development in order to protect their own content without resort to legislation. The reversal of Kaneko's conviction demonstrates to Japanese content providers that the courts of that country are not going to be as cooperative as some other courts in policing file-sharing related copyright infringement if it means stifling innovation. This ruling is a clear win for software developers in that country and should be a strong signal to Big Content that - at least in Japan - their next move must come on the technological front rather than the legislative or judicial approaches employed to this point.