Say NO to copyright transfer!

(This lecture is written based on the circumstances of the illustration industry in Japan and on Japanese law.)

The professional illustrators’ organization Illustrators Tsushin has been advocating the slogan “Say NO to copyright transfer!” since around 2014.

In accordance with this slogan, illustrators belonging to our organization, as a general rule, do not accept requests to transfer copyright.

However, this is not intended to deprive clients of the benefits they may gain from copyright transfer. We also offer solutions that can benefit both parties.

Furthermore, this initiative is not simply about saying, “We refuse copyright-transfer work in order to protect our own interests.”

It is driven by our strong desire to protect Japanese popular culture—something we believe Japan should be proud to share with the world.

Why do we uphold the slogan “Say NO to copyright transfer!”?

What kind of solution can benefit both parties?

What does it mean to “protect Japanese popular culture”?

Allow us to take this opportunity to explain the position of Illustrators Tsushin.

Copyright-Transfer Agreements Are Contracts That Protect Companies While Neglecting the Protection of Illustrators

Since around 2011, an increasing number of companies, organizations, and local governments have begun requesting copyright transfers.

This is likely because copyright-transfer agreements offer various advantages to companies, organizations, and municipalities that commission illustration work.

Because such agreements may appear to protect companies in various ways, it seems that some attorneys even recommend copyright-transfer contracts.

However—

For illustrators, copyright-transfer agreements involve many risks.

An illustrator who accepts work under a copyright-transfer agreement may find it difficult to make a living, and may even become exposed to the possibility of enormous claims for damages.

Copyright-transfer agreements tend to become one-sided contracts in which only companies are protected, while the protection of illustrators is neglected.

Why do they tend to become that way?

What kinds of risks do they involve?

Allow me to explain.

Illustration Fees Are Not Payment for the Labor of Production, but Usage Fees

The first thing I would like you to understand is this:

The fee for illustration is not payment for the labor involved in producing it. It is a usage fee.

For example, suppose a company wants to use an image of Doraemon for its campaign, or on one of its products.

Is the money paid to Fujiko F. Fujio Pro payment for the labor of drawing that image?

No, it is not.

It is payment for using that illustration—a usage fee.

The money paid when using an illustration is not paid for the labor of drawing the picture, but as a fee for its use.

This is true whether the illustration is Doraemon, drawn by the late Fujiko F. Fujio, or a small spot illustration by an unknown illustrator.

We illustrators do not make a living by receiving compensation for the labor of drawing pictures.

We make a living by receiving usage fees for our illustrations.

In some cases, the fee received by an illustrator may also include compensation for the labor of drawing. In such cases, the illustrator’s fee consists of “usage fee + labor fee.”

Considering Copyright-Transfer Agreements in Publishing

An illustration whose copyright has been transferred can be used freely in any medium, any number of times.

Let us consider what that means.

First, let us look at publishing work.

Suppose Illustrator A draws one illustration for a novel in a magazine and transfers the copyright to Publisher B for 30,000 yen.

In that case, the copyright to that illustration now belongs to Publisher B.

Publisher B can use it freely in any medium, for any purpose, any number of times, and for any length of time.

Illustrator A, the original creator, has no way to stop Publisher B.

If the novel for which the illustration was created is later published as a book, and the transferred illustration is used on the book cover, Illustrator A cannot object.

Publisher B’s action is completely legal.

The going rate for a book-cover illustration is around 100,000 yen, but the illustrator would not receive that usage fee.

For Illustrator A, this would mean a loss of 70,000 yen.

Furthermore—

Even if that novel were adapted into a television drama and the illustration were used in the opening sequence, Illustrator A could say nothing.

Even if it were used on the cover of an overseas edition of the book, that usage fee would not go to Illustrator A.

Even if it were adapted into a Hollywood film and used on the film poster—

Illustrator A would receive only the original 30,000 yen.

If the usage expanded that far, the illustrator’s losses would likely exceed one million yen.

Furthermore—

The illustration could also be used for books unrelated to the novel for which it was originally created.

It could be used in any number of books and magazines, over and over again.

It could be used on stationery or miscellaneous goods.

It could even be used for character merchandise.

It would even be legal to make it Publisher B’s corporate image character.

Because Publisher B owns the copyright, it could use the illustration extensively as its own corporate character in all kinds of advertising and promotion.

At that point, it would be impossible to estimate how much damage the illustrator might suffer.

You may think, “That would never happen.”

But copyright transfer means selling rights that make such things possible.

Why should rights that are not even necessary be purchased at an extremely low price?

Let me offer an easy-to-understand analogy.

Suppose someone entered a Chinese restaurant and placed the following order:

“I think I’ll have ramen. But I might eat something other than ramen as well. I don’t know how many dishes I’ll eat, so for now, I’ll just buy the whole restaurant. I’ll pay a little extra on top of the price of one bowl of ramen.”

This is a person trying to buy even rights they have no plan to use, for a price only slightly above that of one bowl of ramen.

Doesn’t that sound outrageous?

But from the illustrator’s point of view, a client who tries to buy the copyright at a very low price feels rather like someone placing that kind of order in a Chinese restaurant.

If you are going to buy the entire restaurant, shouldn’t you pay an appropriate price for it?

Considering Copyright-Transfer Agreements in Advertising

Let us also consider copyright-transfer agreements for advertising illustrations.

In typical advertising work, illustrators are prohibited from working for competing companies.

When a single illustrator works for multiple competing products or services, this is often referred to as “conflict of interest” or “competitive overlap,” and is considered something that must not be done.

If an illustrator were to work for a competing company, they could potentially be subject to a large claim for damages.

If the visual images in advertisements are too similar, consumers may confuse one company’s products or services with another’s.

The promotion of Company C’s product may end up looking like promotion for Company D, whose visual image is similar.

Therefore, it is understandable that, in exchange for a substantial fee, a company would prohibit an illustrator from working for competitors.

I do not believe this industry rule itself is problematic.

However, when this industry rule prohibiting work for competitors is combined with copyright transfer, it creates a terrifying problem.

Please consider the following case.

Suppose Illustrator A transfers the copyright of an illustration to detergent company F for 200,000 yen.

Then—

Since work for competitors is prohibited…

Illustrator A will no longer be able to work on advertising or promotional projects for any other detergent company that competes with detergent company F—for the rest of their life.

In ordinary advertising work with a defined usage period, once the usage period ends, the illustrator can work for competing detergent companies.

However, because the copyright has been transferred, detergent company F now holds the right to use that illustration virtually forever.

It can use the illustration indefinitely.

Even if it stops using it for a while, it can reuse it at any time.

The illustrator has no choice but to give up detergent-related work for life.

Over the course of that illustrator’s future career, they might have earned several million yen from detergent-related companies.

They might even have earned more than that.

All of that would be lost for just 200,000 yen.

The company that received the copyright transfer has purchased the right to use the illustration indefinitely at a very low price.

That is an excellent deal for the company.

But on the other hand, the illustrator’s rights and livelihood are being sacrificed.

The Possibility of Even More Serious Problems

If Illustrator A transfers the copyright, the work they can no longer accept is not limited to detergent-related jobs.

That is because, although the illustrator may have thought they were transferring the copyright to a detergent company, that company might in fact also manufacture and sell cosmetics.

Since detergent company F owns the copyright, it can use the illustration for any of its own products or services.

If it also manufactures and sells cosmetics, there is absolutely no problem with using the illustration in cosmetics advertising. That would be completely legal.

Now suppose Illustrator A is also working with cosmetics manufacturer G under a contract that prohibits work for competitors.

If Illustrator A’s work appears in advertisements for both detergent company F and cosmetics manufacturer G, that would create the kind of competitive overlap that must never happen.

Illustrator A could be subject to a large claim for damages from cosmetics manufacturer G.

The amount of compensation demanded from Illustrator A by the cosmetics manufacturer might exceed what an ordinary illustrator could possibly pay.

It is terrifying to imagine.

Even if detergent company F does not currently manufacture or sell cosmetics, it may do so in the future.

Therefore, even if detergent company F was not manufacturing or selling cosmetics at the time the copyright was transferred, we cannot say that there is absolutely no risk of competitive overlap in cosmetics advertising.

And cosmetics are not the only business detergent company F might enter.

It might begin selling household goods.

It might enter the food business.

Any company has the potential to start various new businesses.

Illustrator A has no right to stop that company.

In other words, merely by transferring copyright to detergent company F, Illustrator A becomes exposed to the possibility of competitive overlap in advertising work across all kinds of industries.

Legally, copyright can also be transferred again.

Detergent company F could resell the copyright to an automobile manufacturer, a mobile phone company, or a company in any other industry.

If the copyright were resold to an automobile manufacturer, the illustration could be used in that manufacturer’s television commercials.

If the copyright were transferred to a mobile phone company, it could be used freely in mobile phone advertising.

In other words—

Although Illustrator A may have believed they merely transferred copyright to detergent company F—

When we consider the possibility that the transferee company may enter other businesses, and the possibility of further transfer—

Competitive overlap may arise in advertising and promotional work across every industry.

When one considers the damages that could be demanded if such overlap occurred, the risk is simply terrifying.

Advertising and promotional work would become difficult to accept.

The illustrator’s subsequent career could be seriously impaired.

Of course, companies, organizations, and municipalities do not purchase copyrights with the intention of transferring them further.

However—

If management changes, policies may also change.

Companies may be absorbed, merged, or acquired.

When that happens, management policy will naturally change.

No one can know what will happen then to illustrations whose copyrights have been purchased.

Furthermore—

What if a company that had collected a large number of illustrations through copyright transfers were to launch a stock-illustration business based on them?

What would happen then?

Or what if a stock-illustration company were to buy copyright-transferred illustrations cheaply from various companies and begin offering them online as free materials?

In that case, those illustrations would be used in advertisements by companies all over the world, and Illustrator A, the original creator, would lose all control over them.

An illustrator who sells their copyright even once must continue working afterward while carrying terrifying risks.

Copyright transfer is a contract that imposes such sacrifices on illustrators while allowing only companies, organizations, or municipalities to benefit unilaterally.

To companies, organizations, and municipalities:

Are you so focused on your own profits and efficiency that you have forgotten the importance of compliance?

I sincerely ask you to think carefully about this once again.

Risks for Clients

In fact—

Copyright-transfer agreements also involve risks for companies that commission illustration work.

If many companies routinely begin purchasing copyrights from illustrators, illustrations whose copyrights have been transferred will likely start being used for products or services in industries unrelated to the products or services for which they were originally used.

An illustration whose copyright has been purchased can be used for other products within the same company.

It can also be used in other businesses operated by group companies.

If it is transferred again, a completely different company can use it.

If a stock-illustration company buys it, companies all over the world may use it.

Therefore, an illustration may increasingly be used in industries or products unrelated to the product or service for which it was initially created.

This means that—

Even if a company formally commissions work directly from an illustrator,

there will always be a risk that, unexpectedly, the illustrator will overlap with a competing company.

If copyright transfer continues to spread and becomes the norm in society—

I believe the day will eventually come when no company will be able to commission illustrators with peace of mind.

Do not many companies wish to avoid advertising and promotion that uses the same illustrator as a competing company?

To everyone in charge of commissioning illustration at companies:

Please think carefully once again.

Do you really want a society in which companies can no longer safely commission illustrators?

I would be grateful if you would look beyond short-term profit and consider the future of Japan as well.

A Solution That Protects the Interests of Both Clients and Illustrators

The main reasons companies, organizations, and municipalities request copyright-transfer agreements seem to be the following three.

Reason 1: Because there is a possibility of reuse in various media.

Moreover, the media in which the illustration is used may continue to expand in the future. Obtaining permission from the illustrator every time the medium increases is time-consuming. Buying the copyright seems more efficient.

Reason 2: Because the client does not know how long the illustration will be used.

There are cases where the illustration may be used for a long time, but the client does not know exactly how long, so they decide to request copyright transfer for the time being. For example, in poster work displayed at branches nationwide, there may be cases where the company cannot guarantee that regional branches will properly remove the posters after the usage period ends.

Reason 3: To avoid litigation risk.

An employee who does not fully understand copyright may reuse the illustration for something without asking the illustrator. If that happens, there is a risk of being sued. To avoid litigation risk, the client wants to buy the copyright.

Let us consider each of these three cases.

Considering Reason 1: “Because There Is a Possibility of Reuse in Various Media”

It is certainly inefficient to obtain permission only after each new reuse has been decided.

I understand very well that efficiency is extremely important for companies.

But suppose a company were planning to use an image of Doraemon.

Would it think, “The scope of use may expand in the future, so let’s buy the copyright”?

If a company cannot make such a demand of Fujiko F. Fujio Pro, but tries to impose its own convenience on an unknown illustrator, is that not unreasonable?

We unknown illustrators also have livelihoods and lives.

To companies, organizations, and municipalities—

Could you please consider a path that does not destroy our lives?

In fact—

Even in cases where the client wishes to use an illustration in many media, and where the number of media may increase in the future, making it difficult to limit the contract to specific media—

There is a contractual method that benefits both the client and the illustrator without damaging the illustrator’s rights.

That is a license agreement for “all media.”

“All media” refers to a contract that allows use in every medium, with no limit on the number of uses.

Because the media are not limited, there is no need to obtain permission each time a new reuse arises later.

However, because this type of contract allows use in many media, the fee will naturally be somewhat higher.

I ask for your understanding.

Please discuss the specific amount with the illustrator you commission.

Considering Reason 2: “Because the Client Does Not Know How Long the Illustration Will Be Used”

Because of the issue of competitive overlap—

While an illustration is being used in a company’s advertisement, the illustrator who created that work cannot accept work from competing companies.

In other words, if no usage period is defined and the illustration continues to be used indefinitely, the illustrator will be unable to work for other companies in that industry virtually forever.

If the usage period is not clearly determined, each advertising job will gradually eliminate the illustrator’s ability to accept new work in that industry.

Therefore, for illustrators, the usage period is extremely important.

If an illustration will be used for a long time, but the exact duration is unclear, we would appreciate an annual contract.

An annual contract is an arrangement in which the client pays a set fee for one year, and if the illustration is used for more than one year, an annual renewal usage fee is paid each year.

By paying a renewal usage fee each year, long-term use becomes possible.

In poster work, we sometimes hear cases where a company says, “We cannot guarantee that regional branches will properly remove the posters after the usage period has passed.”

In such cases—

What about printing a small notice in the corner of the poster, such as:

“Display period: until [Month] [Day], 2022.”

With this method, even part-time workers at regional branches will understand that the poster must be removed when the deadline arrives.

There may still be cases where the poster remains displayed for a little while after the deadline, but it is unlikely to remain posted for years.

Of course, when the deadline comes, the company should also instruct each branch to remove the poster.

If the client absolutely cannot determine a usage period and wishes to purchase a virtually perpetual right of use—

Then the fee would need to be equivalent to the income that illustrator would be expected to earn from that industry over the course of their lifetime.

Considering Reason 3: “To Avoid Litigation Risk”

It is certainly difficult to educate all employees about copyright.

There may be cases where employees without copyright awareness reuse illustrations without permission, causing trouble with illustrators.

For these reasons, it seems that some attorneys recommend copyright-transfer agreements to companies.

However—

Did you know that copyright-transfer agreements themselves also involve litigation risk?

Forcing a copyright transfer without sufficient compensation may violate the Subcontract Act or the Antimonopoly Act in Japan.

This is clearly stated in the Japan Fair Trade Commission’s pamphlet Content Transactions and the Subcontract Act.

In that pamphlet, one of the prohibited acts by a main subcontracting enterprise is listed as follows:

“Unilaterally setting a payment amount far below the ordinary price without sufficient consultation with the subcontractor regarding compensation for copyright.”This is categorized as buying at an unfairly low price.

Alternatively, as conduct that may be problematic under the Antimonopoly Act as abuse of a superior bargaining position, the pamphlet also lists:

“Unilateral handling of rights related to information-based products,”and“Setting remarkably low compensation.”

The Guidelines for Creating an Environment in Which Freelancers Can Work with Peace of Mind, published by Japan’s Ministry of Economy, Trade and Industry, also point out that forcing copyright transfer may violate the Subcontract Act or the Antimonopoly Act.

In other words—

Forcing copyright transfer is likely to be considered illegal.

If a company engages in conduct that may be illegal, is there not a risk that it will eventually face litigation?

I believe copyright-transfer agreements contain another kind of litigation risk, and therefore do not constitute true risk avoidance.

If a company truly wishes to avoid risk, the most effective approach is to thoroughly educate employees internally about copyright.

Alternatively, it would also be effective to create an internal system that prevents employees from reusing illustrations without permission.

For example, a company might establish an intellectual property department and require permission from that department whenever anyone wishes to use an illustration, even briefly.

Even if litigation does not occur, this issue may eventually become a social problem.

Several years ago, the “WELQ problem” became a major public issue in Japan.

Some companies lost public trust as a result.

There have likely been other cases in which companies lost public trust because they prioritized profit and efficiency so much that they forgot compliance.

I sincerely hope that companies, organizations, and municipalities will take this opportunity to think deeply about compliance once again.

What Is Copyright For?

To begin with, what is copyright for?

The answer is found in Article 1 of Japan’s Copyright Act.

Article 1 of the Copyright Act:This Act provides for the rights of authors and rights neighboring thereto with respect to works, performances, phonograms, broadcasts, and cable broadcasts, while giving due regard to the fair exploitation of these cultural products, and aims to protect the rights of authors and others, thereby contributing to the development of culture.

In other words—

Copyright exists to develop culture by protecting the rights of authors.

However, if copyright transfer continues to spread as it is now, illustrators will no longer be able to make a living.

If illustration becomes impossible to sustain as a profession, illustration culture will surely decline.

The purpose of copyright—to develop culture—will no longer be fulfilled.

During Japan’s Edo period, popular culture flourished, including ukiyo-e.

In Europe around the same time, paintings belonged largely to the wealthy classes and the church.

It seems that ordinary people rarely purchased color pictures.

Oil paintings were expensive, and beyond the reach of ordinary Europeans.

There were also relatively inexpensive copperplate prints, but they do not seem to have spread widely among the general public.

In Japan, by contrast, ordinary people enjoyed ukiyo-e.

In the late Edo period, when a bowl of soba noodles cost 16 mon, even expensive ukiyo-e could apparently be purchased for around 20 mon, and some were available for around 3 to 6 mon.

Even in the Edo period, Japan was already a rare country of popular culture in the world.

That tradition has led to the culture of contemporary Japan’s animation, manga, and illustration—the culture known as Cool Japan.

However—

Copyright-transfer agreements are contracts that protect only companies while neglecting the protection of creators.

They destroy the culture of Cool Japan, which even the Japanese government seeks to promote.

They also run counter to the very principle of copyright, which is to develop culture.

The recent trend toward the spread of copyright-transfer agreements represents a crisis for Japanese popular culture—something Japan should be proud to share with the world.

I am deeply concerned that more companies, organizations, and municipalities are requesting copyright transfers.

For this reason, I have been working on this issue for many years through Illustrators Tsushin.

Perhaps I may be the only one taking this issue seriously.

But do you not think Japanese popular culture is something wonderful, something we should be proud to present to the world?

I wish to protect the flame of illustration as part of Japanese popular culture and pass it on to the future.

This is the greatest reason why Illustrators Tsushin upholds the slogan:

“Say NO to copyright transfer!”

We would be grateful for the understanding and cooperation of companies, organizations, and municipalities.