1. Public Exhibition of Dali's Works and Publication of a Catalogue by the Organizer
2. Assignment of Copyright by Dali to the Plaintiff Dutch Company
3. Copyright Infringement Action against the Exhibition Organizer and the Gallery Owner
4. Contentions of the Exhibition Organizer and the Gallery Owner

1. Copyright Protection of Dali's Works in Japan
2. The Nature of the Contract between Dali and the Plaintiff
3. Publication and Sale of the Exhibition Catalogue
4. Publication of a Pamphlet of Exhibited Works Permissible under the Copyright Act
5. Wilfullness, Negligence and Bad Faith of the Defendants
6. Recovery of Damages
7. Claim for an Injunction

1. Legality of the Assignment of Copyright Limited in Time
2. Governing Law of the Contract between Dali and the Plaintiff
3. Acquisition of Japanese Copyright by Dali's Works
4. Limited Scope of the Exhibition Organizer's Privilege to Publish a Catalogue of Exhibition
5. Exhibition of Leonard Foujita's Works held by K.K. Art Life
6. Limited Scope of Quotation of Art Works in a Literary Work
7. Recovery Damages in a Copyright Infringement Action

Salvadore Dali hereby assigns to the plaintiff all the rights to enforce completely and without obstruction throughout the world the intellectual property rights now existing in his works and deriving from such works regardless of whether they are known at present and regardless of whether they are literary, artistic, dramatic, cinematographic or other kind of works, and the plaintiff accepts such assignment. Such rights shall include the following rights:

The rights defined and described above shall be assigned to the plaintiff for the period ending on May 11, 2004, without being subject to cancellation or termination. Unless otherwise agreed in writing, such rights shall revert to Dali or his sucessors or assigns upon expiration of the period of this contract.

It is understood that the rights temporarily assigned to the plaintiff under this instrument are free from any encumbrance.

"Article 4" of the principal contract shall be interpreted in all occasions to mean that the net fruits or profits deriving from the exercise and use of copyright under the principal contract shall inure to the benefit off Dali or the Dali Foundation as the sole beneficiary.

So long as the exercise of copyright generates profits, the above provision shall not prevent the plaintiff from using the profits, as part of its copyright expenses, for assisting the financing of a transaction, business or research for the benefit of the Dali Foundation and for the better fulfillment of the purpose of the Foundation, and for assisting the defrayal of expenses for the material subsistence of Dali himself through its intermediary.

A part of the periodic report referred to in "Article 5, para. l" of the principal contract shall also be transmitted to the officer in charge as assigned from time to time in the Ministry of Economy and Finance of Spain or its department.

The conclusion of the principal contract shall not prevent the government of Spain with respect to Dali's works presently owned by it or his works which may come under its ownership in the future, from exercising the right to compile and publish a catalogue or document of an exhibition and display of such works for cultural purposes.

Both the principal and supplemental contracts were approved by the government of Spain on February 19, 1987. The plaintiff was duly incorporated on September3, 1986, and Robert Decharnet became its representative. On September 7, 1987, the plaintiff approved all the acts done by Robert Decharnet including the contract to assign Dali's copyright and, thus, all the conditions provided in Article 9 were fulfilled. The suspensive condition for the contract to take effect was fulfilled on February 19, 1987, and the plaintiff acquired copyright in the aforementioned paintings and drawing under this contract.

Demart Pro Alte P .V., as the owner of copyright in Dali's works, brought an action for copyright infringement, seeking injunction and damages, against Asahi Shimbun-sha and Daimaru. The plaintiff alleged as follows:

"The defendant Asahi Shimbun, knowing that the plaintiff is the owner of copyright in tne paintings and disregarding the notice given by the plaintiff copyright owner urging Asahi Shimbun to obtain a license from the plaintiff, reproduced and published the paintings in the catalogue in question, and, thus, Asahi Shimbun wilfully infringed copyright. On the other hand, the defendant Daimaru sold copies of the catalogue knowing that it was made in infringement of the plaintiff's copyright. Even if this is not the case, a person who intends to prepare the catalogue of an exhibition by reproducing the exhibited works and sell its copies owes a duty of care to confirm who is the copyright owner in such works and to obtain a license from the copyright owner to do so. However, the defendants, in reproducing and publishing the catalogue, never tried to confirm whether or not the plaintiff is the copyright owner, and, therefore, they were negligent in not assuming such duty of care. Thus, the defendants' conducts constitute joint acts of tort."

The defendants Asahi Shimbun-sha and Daimaru denied their copyright liability on the following grounds:

Even though the plaintiff is the owner of copyright in the paintings, and reproduction and publication of the paintings by the defendant Asahi Shimbun infringes copyright owned by the plaintiff, there was no negligence on the part of Asahi Shirribun, and Daimaru was not aware that the catalogue was made by an act of infringing copyright;

The Tokyo District Court found that the plaintiff's copyright in Dali's works displayed at the exhibition organized by Asahi Shimbun was infringed and ordered Asahi Shimbun: (1) not to reproduce the paintings in the catalogue; (2) not to distribute copies of the catalogue which contain reproductions of the paintings; (3) to destroy the printing plates of the catalogue and copies of the catalogue in its possession; and (4) to pay to the plaintiff the sum of 200,000 yen as damages together with an interest at the rate of 0.5 per annum from April 16, 1991, till full payment.

On each one of the issues raised in the litigation, the District Court ruled as follows:

First, the court confirmed that "the paintings involved in this case which are works of Dali who was a Spanish national are entitled to protection under the Copyright Act of Japan in accordance with Article 3 (1) (a) of the Berne Convention for the Protection of Literary and Artistic Works (Paris Act) to which both Japan and Spain are contracting parties and Article 6 (iii) of the Copyright Act of Japan."

In analyzing the nature of the contract concluded by Dali and the plaintiff, the court first determined that the governing law is the law of Spain. The court held as follows:

The court found that the contract in the instant case is a contract of partial assignment of copyright for a fixed period from the date of coming into effect of the contract, i.e., February 19, 1987, to May 11, 2004, and held that "such partial assignment of copyright limited in time is permissible under the Copyright Act of Japan, and, even if the assignor intended to delegate the management of copyright to the assignee, it is clear that it is not a contract to delegate authority, and that the parties concluded tne contract to assign copyright as a method to achieve that purpose and the copyright is completely transferred to the assignee for the stipulated period."

The court found, as undisputed facts, that the defendant Asahi Shimbun, organizer of the exhibition, made 8,000 copies of the catalogue in which the paintings were reproduced, and that the co-defendant Daimaru sold, on consignment, 7,374 copies at 2,500 yen per copy at the galleries where the exhibition was held. The court also found that the remaining 626 copies were given away or used as materials and not sold to the public.

With respect to the defense that the catalogue published by Asahi Shimbun does not infringe the plaintiff's copyright because it is a pamphlet prepared for explaining or introducing the works displayed at the exhibition, the court interpreted the relevant provision of the Copyright Act and denied this defense on the ground that Asahi Shimbun's catalogue is marketable as an art book and, hence, it exceeds the limited scope of this provision. The court held as follows:

"1. A pamphlet for the purpose of explaining or introducing works of art or photographic works provided in Article 47 of the Copyright Act means a small catalogue, mokuroku (meaning a catalogue) or zuroku (meaning a pictorial or graphic catalogue) which is designed to explain or introduce the exhibited works to the visitors. So long as its purpose is explanation or introduction, its contents must consist mainly of explanation of the works, or largely of materials that provide information about the works.

Since its purpose is to explain or introduce the works to the visitors who want to see the original works exhibited, the quality of reproduction of the works in such pamphlet should not be so high as to enable the reader to appreciate the works. The above provision presupposes that a pamphlet simply helps the visitors to visually identify the original works exhibited and their respective explanation or information contained in the pamphlet. Hence, a catalogue, even though prepared for distribution among the visitors, is not a pamphlet within the meaning of Article 47, but a gashû (meaning a book containing reproductions of works of art) in a practical sense, if it possesses a value equivalent to a book for kanshô (meaning appreciation and enjoyment) of works reproduced in it in view of the quality of paper, printing format and the manner of reproduction of the works.

Although it is meaningful from cultural or academic standpoint to publish, at the occasion of a public exhibition under a specific theme, a catalogue which contains good quality reproductions of works loaned by the owners in Japan and various other countries of the world and works loaned by private indivisuals that are not easily accessible by the general public and help the visitors to study and appreciate these Works at later times and recall the original works, it is not proper to make such aspects the reason for preparing a catalogue which is equivalent to gashû for appreciation and enjoyment sold in the market beyond the reach of the reproduction right as a pamphlet referred to in Article 47 of the Copyright Act."

"2. Now let us examine the catalogue in the instant case. In the light of Exhibit Ken-Ko No.1 which the parties do not dispute that it is a catalogue entitled "Supein no gensô 'Gaudi to Dali no sekaikan'" and the purport of their arguments, the cout finds the following facts. The catalogue in the instant case lacks an element of providing information about the exhibited works. Rather, the manner of compilation clearly shows that its main purpose is to let the readers appreciate and enjoy the reproductions of works it contains. When such characteristics of the catalogue as the quality of paper, a large number of colored pages, the printing format, the size of rerproductions of the works, etc. are viewed together, the catalogue is as good as those books sold in the market as gashû which contain reproductions of works for appreciation and enjoyment. Hence, we cannot say that the catalogue falls under a "pamphlet" (shôsasshi) within the meaning of Article 47 of the Copyright Act."

With respect to the recovery of damages, the court determined that the sum of 200,000 yen as "the amount of money equal to the amount the copyright holder is normally entitled to receive for the exercise of his copyright" under Acticle 114(2) of the Copyright Act. The court held as follows:

"In view of these factors, the degree of contribution of the reproductions of the works to the value of the catalogue as a whole should be 20 percent.

"In the light of the practice of collecting royalties for the use of Dali's works, the rate for calculating royalties for the use of the works in the catalogue should be 10 percent." From the foregoing analysis, the amount of damages that the plaintiff suffered from the defendant Asahi Shimbun's act of copyright infringement should be 200,000 yen obtained from the following calculations: first, multiply 1,250 yen (the unit price of the catalogue) by 8,000 (the number of copies produced) and obtain l0,000,000 yen; then multiply this sum by 0.2 (the ratio of contribution by the works to the catalogue; and further multiply the resulting sum by 0.1 (the royalty rate)."

With respect to the plaintiff's claim for an injunction against the defendants, the court found that the catalogue is marketable as an art book after the exhibition is over, because the pages carrying information about the exhibition and the list of supporters can be easily removed and, therefore, there is a possibility that the catalogue will be printed and distributed after the exhibition. Thus, the court admitted the plaintiff's claim for an injunction against Asahi Shimbun under Articles 112(1) and 113(1) (ii) of the Copyright Act.

Then, the court dismissed the plaintiff's claim against Daimaru because it simply sold the catalogue on consignment and is not liable for copyright infringement.

The first issue raised in this case is whether or not the plaintiff is the owner of copyright in Dali's works. The court chacterized the contract concluded in 1936 by Dali and the plaintiff as a contract to assign copyright limited in time. The object of the contract is Japanese copyright and, hence, the relevant provisions of the Copyright Act (Law No. 48, 1970) must be examined. Article 61(1) of the Copyright Act provides that "copyright is assignable in whole or in part." This provision is liberally interpreted to permit assignment limited in time or space.²⁾ The Tokyo District Court's decision under discussion is probably the first case in which the court expressly recognized the validity of a assignment of copyright limited in time.

In accordance with Article 10 of the contract between Dali and the plaintiff, the court held that the governing law of this contract is the law of Spain citing Article 7 (1) of Horei (Act concerning the Application of Laws) (Law No. 10, 1898). Horei contains a set of conflict of laws provisions including Article 7 (1)which recognizes the principle of party autonomy.

Article 7 provides as follows:

There are numerous cases which interpreted and applied Article 7 of Horei. ³⁾

At the outset of its decision, the court confirmed that Dali's works acquired copyright in Japan under the relevant provisions of the Berne Convention and the Copyright Act of Japan.

Article 3 of the Berne Convention provides as follows:

Article 6 of the Copyright Act lists the works of authorship eligible for copyright protection as follows:

The most signification contribution that the case under review has made is the clarification of the scope of an exhibition organizer's privilege to reproduce the extlibited works in a pamphlet for the purpose of explanation or introduction of the exhibited works to the visitors under Article 47 of the Copyritht Act. Article 47 provides as follows:

"(Reproduction of artistic works for visitors of an extlibition)
Article 47. A person who publicly exhibits the originals of works of art or photographic works, without prejudice to the right provided in Article 25, may reproduce these works in a pamphlet for the purpose of explaining or introducing them to the visitors."

Article 25. referred in Article 47 above, provides that "[a]n author shall exclusively have the right to publicly exhibit the original of his work of art or unpublished photographic work". An author's exclusive right to publicly exhibit the original of his work of art or photographic work under Article 25 is restricted by the right of the owner of the original to publicly exhibit it. Article 45(1) provides that "[t]he owner of the original of a work of art or a photographic work, or a person authorized by such owner, may publicly exhibit the original of such work." An exhibition organizer's privilege to reproduce the exhibited works in a pamphlet for distribution among the visitors under Article 47 is another limitation to an author's exclusive right of public exhibition provided in Article 25. Article 48 (1)(i) requires the exhibition organizer to indicate the source in a reasonable manner. ⁴⁾

When the Copyright Act of 1970 was in the process of drafting, the Copyright System Council, then an advisory body to the Ministry of Education, proposed to establish a set of fair use provisions as limitations to copyright.

The Council recommended that "the organizer of a public exhibition of works of art should be permitted to reproduce the works of art to be exhibited in the preparation of its catalogue." ⁵⁾ This recommendation was followed by the following statement:

"With regard to reproduction for the purpose of preparing a catalogue of works of art to be publicly exhibited, it is permissible to do so freely within the scope necessary for introducing and explaining the works to be exhibited. In such instance, it may be unnecessary to mention that the making of reproductions for appreciation and enjoyment should be excluded." ⁶⁾

The only prior case which discussed the limited scope of Article 47 is Kimiyo Fujita v. K.K. Act Life⁷⁾ decided by the Tokyo District Court in 1989.

In this case, the defendant Art Life organized and held an exhibition of the late Leonard Foujita's works from October 31, 1986, to April 5, 1987, in Tokyo, Osaka, Kyoto, Hiroshima and Fukuoka, and published a catalogue of the exhibition containing reproductions of the exhibited works entitled "Seitan 100nen kinen Leonard Foujita" (meaning 100th anniversary of the birth of Leonard Foujita). In an action for copyright infringement brought by the plaintiff Kimiyo Fujita, Leonard's widow who acquired all the copyrights in his works by inheritance, the defendant invoked Article 47 as a defense. The court found infringement on the ground that "the book in question is not essentially different from art books for kanshô (appreciation and enjoyment) which are traded in the market and, therefore, it is not a 'pamphlet' within the meaning of Article 47 of the Copyright Act."

Since this is the first case to address the issue, the court carefully examined the catalogues of major art exhibitions held in the past. The court found that some of these catalogues were published without license from the copyright owners even though they were not permissible as "pamphlets" under Article 47. The court noted that, if such catalogues could be published in contravention of the purport of Article 47, the copyright owners' interests would be unreasonably harmed.

The lesson that exhibition organizers should learn from this case and the case under review is that it is more beneficial to them and to the general public to publish catalogues of permanent and marketable value under license from copyright holders, rather than to assume the risk of copyright infringement.

A comparable copyright problem in the art law is how far the author of a book or article to explain, criticize, review or otherwise discuss works of art can use photocopies of such works in his book or article. The relevant provision in the Copyright Act is Article 32(1) which provides as follows:

"(Quotation)
Article 32. (1) A published work may be used by way of quoting. In this case, the quotation shall conform to fair practice and be within a reasonable extent for the purpose of quotation such as news reporting, criticism, research, etc."

In K.K. Shogakukan v. Kimiyo Fujita,⁸⁾ the defendant published a book entitled "Kindai yôga no tenkai" (Development of modern European paintings) as volume 7 of "Genshoku gendai nihon no bijutsu" (Modern Japanese art in original colors). The book contained an article of the same title, written by the art historian Hideo Toyama. In this article, twelve paintings of the late Leonard Foujita were reproduced. Kimiyo Fujita brought a copyright infringement action against the publisher and the latter invoked Article 32(1) and argued that it had merely quoted the paintings. The Tokyo High Court, in upholding the lower court's finding of infringement, rejected the publisher's defense on the ground that its reproductions had not met the requirements of quotation within "fair practice" and "a reasonable extent." The High Court applied the criteria for meeting these requirements that the quoting and quoted works "must be clearly distinguishable and in a relationship that the former and the latter can respectively be regarded as the principal and subordinate." ⁹⁾

It was evident in the case that the quoting and quoted works were clearly distinguishable. As to the second requirement, the High Court held that the reproductions of Leonard Foujita's works in the book were finely printed and in good quality to enable the readers to appreciate the artistic value of his works and hence, they were not subordinate to the article in helping the readers to understand the article.

In the assessment of damages recoverable by the plaintiff, the court relied on Article 114(2) of the Copyright Act. In a civil action to recover damages from a copyright infringer, the plaintiff must first rely on Article 769 of the Civil Code (Law No. 89, 1896) which provides that " [a] person who wilfully or negligently has injured the right of another is bound to compensate him for the damage which has arisen thereto." In order to ease the plaintiff's burden of proving the amount of damages, Article 114 of the Copyright Act provides for the presumption of damages.¹⁰⁾ Article 114(1) permits the plaintiff to recover the defendant's profits as damages. Article 114 (2) provides for the recovery of reasonable royalty. And Article 114(3) permits the plaintiff to claim damages in excess of the amount of reasonable royalty.

The formula used by the court in the case under review in accordance with Article 114(2) is: 1,250 yen (price per copy of the catalogue) × 8,000 (number of copies produced by the infringer) × 0.2(ratio of contribution made by the reproduced works to the catalogue) × 0.1 (customary royalty rate) = 200,000 yen.

It must be noted that, in the above formula, the number of production rather than the number of sale was used. It is the standard practice in the book publishing industry in Japan to calculate royalty payable to the author on the basis of the number of copies produced, and the rate is normally 10 percent of the resale price. Publishers usually pay royalties to authors when their books are published. For books, periodicals and phonograph records, resale price can be fixed as an exception to the prohibition of price-fixing under the Antimonopoly Act (Law No. 54, 1947).