6th International Conference in Kyoto on 16 February 2008

Ritsumeikan Law School, Kyoto

ABSTRACTS & LINKS

Koji Takahashi ( Doshisha University)

Walford v. Miles in Japan: lock-in and lock-out agreements in Sumitomo v. UFJ

On 1 October 2005, a merger in Japan culminated in the launch of the then world's largest financial group by assets. In the background, a prolonged two-year legal battle was unfolding among three of Japan's “Big Four” banking groups over a lock-in agreement (i.e. an agreement to negotiate a contract in good faith with each other) and a lock-out agreement (i.e. an agreement excluding third parties from a contract negotiation). This paper will outline the sequence of events, set out the legal issues involved, examine the decisions of the courts, and compare them with the decisions of the English and Australian courts in cases such as Walford v. Miles. The issues discussed include whether lock-in and lock-out agreements are binding and enforceable, in what circumstances an interim injunction may be obtained to restrain the breach of a lock-out agreement, what is the measure of damages for the breach of lock-in and lock-out agreements and the enforceability of a clause on break-up fees.

Michelle Tan ( University of Tezukayama)

“Consumers in Japan: Where are we now? Where do we want to be?”

Since the year 2000, the year of the Snow Brand milk scandal, there have been a great many changes in the consumer protection landscape in Japan. The Snow Brand milk scandal heralded an explosion in similar scandals, in particular those involving food, to the extent that it has been almost hard to stay abreast.

One positive effect of this regrettable situation is that consumers seem to have a greater awareness of their rights. Consumers are more likely in current times to voice their dissatisfaction directly to companies about corporate behaviour and practices and to boycott those companies which violate the law.

Both corporate practice and consumer policy has been influenced by these fundamental changes in consumer behaviour, and as a result many companies are now using ‘soft law’ methods such as corporate codes of conduct and standards in order to regain the trust of consumers. Such methods are also supported by the Japanese government. There have also been several major amendments to consumer protection laws aimed at strengthening the rights of consumers.
This presentation represents a timely assessment of how far consumers have come, and what remains to be done by all stakeholders in Japan; government, business and consumers.

Commentator: Luke Nottage ( University of Sydney)

“ Consumers Beware! Australia's Current Inquiry into its Consumer Policy Framework”

Related Link :

"Submissions to the Productivity Commission's Inquiry into Australia's Consumer Policy Framework"

http://www.pc.gov.au/inquiry/consumer/submissions

James Prest ( Australian National University)

“Legislating to Promote Renewable Energy Deployment - A Comparative Review of Law & Policy in Australia and Japan”

A comparative review of developments over the past decade in the field of renewable energy (RE) law and policy in Australia and Japan reveals some remarkable similarities. Both countries have adopted legislation that mandated Renewable Portfolio Standards (RPS) as a primary tool of support for renewable energy. These laws set a required minimum of energy that must be generated from renewable sources. Further, both countries until very recently have set targets for RE deployment which are, by international standards, rather unambitious (at 1.35 to 2%). The countries are also similar in that both have to date not legislated to introduce the model of RE support which is the most prevalent worldwide, that of Feed-in Tariffs (or FIT laws). Both countries have hosted various proposals for FIT laws, but to date, this alternative legislative model has not yet been enacted in either Australia or Japan.

One marked point of departure between the nations is the considerable extent of direct support for photovoltaic technology up until recently provided in Japan. In contrast to a commonly professed Australian aversion to “picking winners”, i.e., providing dedicated support and subsidy to a particular sector of an industry, a key feature of Japanese policy between 1993 and 2005 was dedicated subsidies for the solar photovoltaic industry. Lessons may be at hand for Australia in terms of the beneficial results – extremely rapid industry growth and spectacular capture of global market share achieved by Japanese corporations. This example of industry support remains relevant to ongoing debates in Australia over the interaction between national emissions trading markets with domestic law and policy providing industry support.

Another primary argument made is that the recent history of renewable energy law and policy in Australia and Japan suggests that the major barriers to increasing the share of total electricity production occupied by RE are political and economic, rather than technical. In terms of Japan, this argument is explored in the context of evidence that the RPS law did not sufficiently protect wind industry development between 2003-2006, against self-interested barriers raised by major players within the electricity supply and distribution industry. The implications of this experience for the promised major expansion of legal support for RE to 20% targets in Australia are explored - in the context of possible industry objections that may be raised to expanded operation of the national RE target. This paper concludes by making comparative reference to the findings of the international literature, identifying the key features of national law and policy in Australia and Japan which have tended to variously support or stall RE development in each nation during the past decade.

Related Link :

For the abstract with the selected bibliography of the “Legislating to Promote Renewable Energy Deployment - A Comparative Review of Law & Policy in Australia and Japan” click here.

Brett Williams (University of Sydney)

“How is Japan Contributing to the Constitutionalization of the WTO - Reinforcing Principles or Undercutting Principles with Exceptions?”

It is possible that Japan’s early experience with the multilateral system in which other GATT parties ignored the principles of the system and treated Japan so badly has motivated Japan in two ways:

- perhaps Japan’s experience motivates Japan to be a defender of the principles of the system using its opportunities to reinforce the principles of the system so as to help the system maintain an open world economy conducive to good international relations; or

- perhaps Japan’s experience motivates Japan to imitate the type of behaviour that was used against Japan in the past, making Japan a pragmatic user of loopholes and leaving it to other nations to try to maintain the principles of the multilateral system?

Discussion:

In 1955, Japan acceded to the General Agreement on Tariffs and Trade. Certainly, for the first 25 years of participation in the GATT, Japan’s experience was that other parties treated Japan in ways that derogated from the principles of the system:

- from 1955 onward, as many as 50 GATT parties invoked the non-application provision in GATT Article XXXV – thereby enabling them to apply less liberal treatment to imports from Japan. Though technically legal, this treatment was in violation of the general principle of non-discrimination embodied in GATT Article I;

- from about 1960 onward, a number of parties applied ‘Voluntary Export Restraints” on exports from Japan. Though the GATT legality of VERS at that time is still open to debate, this treatment was in violation of the general principles of regulating different policy instruments in different ways so as to encourage use of less restrictive instruments and discourage the most restrictive instruments like import quotas and VERs.

By about 1975, almost all GATT parties had ceased to invoke the non-application clause against Japan, and in 1995, all WTO Members adopted a new obligation to cease applying Voluntary Export Restraints. Since then Japan has been able to participate in the world trading system on a more even footing with other members. Even then, Japan has still been substantially affected by antidumping duties and by the fairly weak, sometimes perverse, attempts of the Members to re-write the WTO rules so as to make it harder to impose anti-dumping duties.

Also by about 1990, scholars had begun to write about the GATT (and later the WTO system) in terms of analogies with the constitutional constraints on governance in other systems of law: for example, in comparison to the US Constitution in Daniel Farber & Robert Hudec, “Free trade and the Regulatory State: A GATT’s Eye View of the Dormant Commerce Clause” (1994) 47 Vanderbilt Law Review 1401-1440, in relation to the Treaty Establishing the European Economic Community in Jan Tumlir, “GATT rules and Community Law – A comparison of Economic and legal Functions” in Meinhard Hilf, Francis G Jacobs & Ernst-Ulrich Petersmann (eds) The European Community and GATT (Kluwer, 1986) or more generally in Meinhard Hilf and Ernst-Ulrich Petersmann, National Constitutions and International Economic Law (Volume 8 of Studies in Transnational Economic Law) (Kluwer, Boston 1993). In more recent scholarship, scholars have begun to speak of the constitutionalization of WTO law.

To various extents, scholars speak of the WTO system being based on certain principles including:

- reciprocity;

- non-discrimination;

- some freedom to choose policy objectives;

- ranking of policy instruments as reflected in the differential legal disciplines on different types of measures and in the adoption of the less trade restrictive means rule adopted, inter alia, in the Art XX jurisprudence.

Despite the high minded and theoretical assessments of academics, WTO Member countries continue to approach their participation in the WTO on a fairly pragmatic basis. Nevertheless, from time to time, the above mentioned principles do figure in the WTO dispute settlement jurisprudence (for example, the WTO Appellate Body’s reference to the MFN principle as the cornerstone of the multilateral system in the Havana Club case (WT/DS176/AB/R) or the Panel’s reference to the fundamental principle of the system that tariffs are preferred to quotas in the Turkey Textile case (WT/DS34/R)).

Now, as the WTO system itself appears to be breaking down, it is more important than ever that those working in the system have an understanding of the principles which make the system succeed or fail to maintain a relatively open trading system and peaceful international relations.

What contribution is Japan making?

Is Japan’s participation in the WTO helping to reinforce the essential principles of the legal system?

This paper considers some aspects of Japan’s participation in the WTO system (all of which could individually be the subject of more comprehensive research):

Is Japan’s behaviour helping to maintain a principle of non-discrimination and for this purpose I propose to assess Japan’s participation in Preferential Trade Agreements and its participation in the WTO Committee on Regional Arrangements.

Is Japan’s behaviour in the Doha Round of negotiations helping to open markets on the basis of the principle of the ranking of instruments, in particular limiting import barriers and leaving some freedom for less inefficient policy instruments; in particular, it is worth assessing whether Japanese arguments for multifunctionality of agriculture are helping or harming the system.

Is Japan making useful contributions to the Doha round negotiations on Rules which may help to avoid the over use of antidumping duties?

Related Link:

For the "How is Japan Contributing to the Constitutionalization of the WTO - Reinforcing Principles or Undercutting Principles with Exceptions?" presentation notes click here.

Alexandra George ( University of New South Wales)

Comparative Perspectives on Intellectual Property Law and Theory

This paper presents ideas designed to generate comparative discussion about the concepts and philosophies underpinning contemporary intellectual property law and policy making.

Modern intellectual property laws derive from an historical period of industrialization in Europe during the 17th to 19th centuries. Early copyright laws responded to the introduction of the printing press, operating as a de facto form of censorship law by which the English Crown could control seditious texts. Early patent laws were a method by which competing Italian states tried to encourage and attract innovation within their borders. Design and trademark laws came about when the ability to mass produce and transport items for sale changed the nature of trade and commerce during the Industrial Revolution. Throughout the 20th century, these early intellectual property laws evolved and gained popularity among lawmakers in industrialized nations. The 1994 Agreement on Trade Related Aspects of Intellectual Property (‘TRIPS’), in conjunction with earlier multilateral agreements such as the Berne and Paris Conventions, effectively standardized minimum intellectual property standards worldwide. The prevailing standards thus follow a direct line of descent from laws devised in Europe several centuries ago.

The philosophical assumptions on which these intellectual property laws are based, and the goals they purport to uphold, are distinctly Eurocentric in character. They reflect Western values that prioritize the individual over the collective, competition over collaboration, and materiality over spirituality. These traditions contrast with many found in non-European societies, such as Japan. The purpose of this paper will be to explore how Japanese culture and traditions inform a philosophical outlook that coincides or contrasts with that reflected in the modern global intellectual property standards that have been adopted by Japan by virtue of its membership of international treaties.

It is hoped that presenting such ideas from a neutral scholarly perspective (i.e. by abandoning any assumption that one philosophical approach is morally or teleologically superior to any other) will provide an environment in which Western and non-Western cultural traditions are treated with mutual respect and deference. The outcomes are likely to be fascinating.

The contemporary intellectual property standards that are infused with Western legal traditions and concepts are failing to keep pace with technological changes and the social changes that accompany them. Non-Western traditions may be able to offer insight into why some of the existing intellectual property laws are ineffectual, as well as suggesting solutions to weaknesses in the existing laws. For a Western trained scholar, such as myself, learning about relevant traditions in other societies -- especially societies with as long a history, as successful an empire, and as rich a culture as Japan -- opens the possibility of gaining valuable insights as to how laws may be left with the societies in which they are expected to operate. It is to be hoped that conferring with one's academic counterparts in Japan, exchanging ideas, discussing one's own traditions and participating in conversations about Japanese traditions will bring about fresh perspectives, stimulate and generate new ideas, will open channels of communication for future discussion and collaboration, and will ultimately lead to the publication of work that may help break down barriers and better inform future scholars about the possibilities of comparative research into the philosophies of intellectual property.

Last updated: 16 January 2009