Intellectual Property Rights

The use of SNS (Social Network Site) for the promotion or direct sale of counterfeit goods is widespread in Japan, just as it is in other countries. In most countries outside Japan, the online marketplace is the primary battleground for combating counterfeit products. However, in Japan, issues related to the “parallel imports” (which are permitted in Japan) and “second-hand” markets play a significant role, making them distinctive aspects of counterfeit distribution in the country. On the other hand, the sources of counterfeit goods are relatively straightforward, similar to those in many other countries. China remains the top manufacturer and exporter of counterfeit products circulating in Japan, followed by Vietnam. In 2023, approximately one million counterfeit items were seized at customs. Considering that it is impossible for customs authorities to inspect all imported goods, this number likely represents only a fraction of the total volume of counterfeit products entering the country.

Until recently, it was a fact that a considerable number of consumers in Japan did not mind purchasing counterfeit goods. As a result, e-commerce platforms seemed to focus more on counterfeit prevention from the perspective of dealing with brand owners rather than protecting consumers. However, as more consumers have come to prefer purchasing genuine products over counterfeits, these platforms have started adapting their services accordingly. The shift in consumer awareness regarding counterfeit goods can be attributed to several factors:

• • The cooling of the frenzy for branded products, driven by economic downturns
  • The emergence of AI, which has highlighted new possibilities for counterfeit detection and prevention
  • A desire for self-correction based on observing others, where, in this case, “others” refers to China, a country known for widespread counterfeit distribution

This last two transformation is a positive development and should be welcomed.

CtoC platforms, however, have made little real progress in their efforts to combat counterfeit goods. Some platforms have partnered with second-hand goods dealers and industry associations to enhance authentication through human verification. However, manual authentication is both time-consuming and costly, limiting the number of consumers who use such services. While certain platforms claim to utilize AI or image recognition systems to appeal to the general public, the effectiveness of these technologies in identifying or eliminating counterfeits remains insufficient. It is widely recognized that the term “AI” is often used as a buzzword, with its actual capabilities falling short. Although there are high expectations for future technological advancements and innovations, existing measures should also be carefully reviewed and strengthened. These include stricter identity verification for sellers, systematic collection and analysis of buyer complaints, effective utilization of infringement data from takedown requests submitted by rights holders, and the blacklisting of malicious users.

When looking at BtoC platforms, major Japan-based BtoC sites have long been proactive in combating counterfeit goods. For instance, in an effort to “cleanse” their marketplaces, they collaborate with brand owners to verify suspicious products. If a listed item is suspected of being counterfeit—such as when it is priced unusually low or flagged by consumer reports—they conduct test purchases to confirm its authenticity. If the item is found to be counterfeit, they take action, including removing the seller from the platform. On the other hand, overseas-owned BtoC platforms still show little improvement. Issues remain, such as the inadequate enforcement of account suspensions and an overreliance on automated detection systems, leading to insufficient human-led monitoring and enforcement efforts.

In Japan, various sectors are engaged in collaborative efforts to establish frameworks for eliminating counterfeit products. Some of these approaches are even more advanced than those implemented in Europe and the United States. Notably, the information-sharing and cooperation systems established between major BtoC and CtoC platforms and rights holders are highly developed and deserve recognition. At the same time, there are areas where Japan lags behind and requires improvement. Below, is outlined the key issues and proposed solutions.