Can You Commercially Use Generative AI Output in Japan? Copyright Article 30-4 and Output-Stage Risk

Text, images and code produced by generative AI can be used commercially in Japan in many situations. The copyright risk, however, sits less in "training" than in "how the output is used". Article 30-4 of the Copyright Act, which broadly permits AI training, does not protect the use of the output. If an output is similar to an existing work and is found to rely on it, the business that used it may face an injunction or a damages claim.

• You want to use images made with an image-generation tool in advertising banners or product packaging.
• Your company publishes articles or newsletters written with generative AI.
• Your developers incorporate output from a code-generation tool directly into products.
• A customer asks you to warrant that AI-assisted deliverables do not infringe anyone's rights.
• Another company copies a logo or character you made with AI, and you want it stopped.

A work may be used, by any means and to the extent considered necessary, where the purpose is not to enjoy, or to have others enjoy, the thoughts or sentiments expressed in it (Copyright Act, Article 30-4). "Enjoyment" means viewing, reading or listening to a work for its expressive value. The article lists, as one example, use for information analysis (item (ii)).

Information analysis means extracting information on elements such as language, sound or images from a large volume of information and comparing, classifying or otherwise analysing it (item (ii)). The "General Understanding on AI and Copyright" adopted by the Legal Subcommittee of the Copyright Subdivision of the Council for Cultural Affairs on 15 March 2024 states that use for information analysis, including use for AI training, falls within these non-enjoyment cases.

In other words, Article 30-4 mainly concerns the AI development and training stage. For a business that simply uses AI tools, it is not a basis for justifying the use of the output.

Article 30-4 has two limits.

The first is the proviso. The article does not apply where, in light of the type and purpose of the work and the manner of use, the use would unreasonably harm the interests of the copyright holder (proviso to Article 30-4).

The second is coexisting enjoyment purposes. The General Understanding states that where a single act of use has several purposes, the requirements of Article 30-4 are not met if even one of them is an enjoyment purpose. As an example it gives additional training intended to make the model output the creative expression of works in the training data.

This matters if your company fine-tunes a model, or builds a system that searches internal documents or third-party materials and generates answers from them. Check at the design stage that reproducing particular works as they are is not one of the purposes.

Generating an output and then publishing or distributing it may infringe copyright in an existing work. The General Understanding states that this should be assessed under the same requirements as human creation without AI.

According to the General Understanding, existing case law holds that a work infringes copyright where both similarity to and reliance on an existing work are found.

• Similarity: the essential features of the existing work's expression can be directly perceived in the output. A similar style or idea alone is not enough.
• Reliance: the output was created on the basis of the existing work. A coincidental resemblance involves no reliance.

Reliance raises issues specific to AI. The General Understanding sets out the following:

• The user knew the existing work: if the user has the AI generate something that has the creative expression of that work, reliance is found and the user is considered to infringe. Examples include inputting an image to produce an image (image-to-image) and including the title of a work or another proper noun in the prompt.
• The user did not know the work, but the AI had been trained on it: access is objectively established, so if a similar output is produced, reliance is normally presumed and the user may infringe.
• The user did not know the work and the AI had not been trained on it: any resemblance is coincidental and there is no reliance.

The second case is the one to watch in practice. Even if no one involved knew the original work, publishing a similar output can expose the company to liability. The General Understanding also notes that where it is technically ensured that the expression of works used in training is not output, reliance may be found not to exist.

There is also the question of whether you can stop others copying material you generated. A work is a creative expression of thoughts or sentiments (Article 2(1)(i)).

The General Understanding states that whether a person used AI as a tool is judged by the degree of creative contribution. It lists three factors:

• The volume and content of instructions (prompts): detailed instructions that specify creative expression point towards contribution; instructions that only convey ideas do not, however long they are.
• The number of attempts: many attempts alone do not matter, but repeated attempts in which the user reviews the output and revises the prompt may lead to the output being recognised as a work.
• Selection from multiple outputs: mere selection does not matter in itself.

Parts to which a person adds creative edits or modifications are normally considered to be works. For a logo, a key character or anything else you want to control exclusively, finishing it by hand is one way to secure protection.

A copyright holder may demand that a person who infringes, or is likely to infringe, stop or prevent the infringement (Article 112(1)), and may also demand disposal of objects created through the infringement (Article 112(2)). For advertising or packaging, this means the cost of recall or replacement.

Where there is intent or negligence, damages can also be claimed. Article 114 contains provisions presuming the amount of damages.

Wilful infringement is a criminal offence. An individual faces imprisonment of up to 10 years, a fine of up to JPY 10 million, or both (Article 119(1)). Where an employee or other person commits the offence in the course of the company's business, the company may also be fined up to JPY 300 million (Article 124(1)(i)).

The General Understanding notes that an injunction is available regardless of intent or negligence, while damages require intent or negligence and criminal penalties require intent. Where the user did not know of the original work, the available remedy is an injunction, not damages or criminal penalties. Even then, the user may be required to return unjust enrichment, such as an amount reasonably equivalent to a licence fee.

• Decide which generative AI services may be used internally and, for each use, whether external publication and commercial use are allowed, and put this in writing.
• For external use, prohibit prompts that include the names of works, artists or characters, and prohibit inputting other people's images to produce similar ones.
• Before publishing advertising, packaging, logos or other external outputs, check that they do not resemble existing works.
• Review the terms of the AI services you use for ownership of outputs, whether commercial use is allowed, and whether the provider offers any indemnity.
• Keep records of which service, which prompt and which date produced each output. They help when reliance is disputed.
• In contracts with outsourced creators, address whether they may use AI, whether they must report it, and what warranties they give.

• A rights holder or their representative has sent a warning letter or takedown request about an output.
• Before investing significantly in using an output for advertising, products or a logo, you want to confirm its rights position.
• Your company plans to fine-tune a model or build a system that searches and outputs internal or external materials.
• A customer is asking for warranties or indemnities about AI-generated deliverables.
• Another company is using your output and you want to stop it.

Q. Can we use generative AI output commercially in Japan? In many situations, yes. But the use of output is subject to the ordinary rules of copyright infringement. If it is similar to an existing work and reliance is found, the business that used it may face an injunction or a damages claim.

Q. Does Article 30-4 mean the output cannot infringe? No. Article 30-4 concerns uses that are not for enjoyment and mainly relates to the development and training stage. When output is published or distributed, the ordinary test of similarity and reliance applies.

Q. Are we liable if we did not know the original work? Infringement is considered possible even without knowledge, because reliance can be presumed for a similar output where the AI was trained on that work. Without intent or negligence, damages and criminal penalties do not apply, but an injunction is still possible and the user may be required to return unjust enrichment, such as an amount equivalent to a licence fee.

Q. Is an AI-generated image protected by copyright? It can be a work if a person's creative contribution is recognised, judged from factors such as the content of the prompts and the process of attempts. An image produced from a simple prompt may not be recognised as a work. Parts to which a person adds creative edits are normally considered to be works.

Q. Is the General Understanding legally binding? No. The document itself states that it presents the subcommittee's views at the time of publication and has no legally binding force. Courts decide each case on its own facts.