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The registration of "xx.jp" Japanese domain name matters (namely, ".co.jp,".ne. jp" and ".go.jp" domain names) is handled by a non-profit organization called the Japan Network Information Center (JPNIC).  We understand that the newly introduced general use ".jp" domain names (discussed in .jp Domain Names below) will be handled by a for-profit "branch" of JPNIC, although the precise scope of its operation has not yet been determined.  Whether an applicant registers a ".co.jp,".ne.jp" or ".go.jp" domain name is not discretionary, and depends on the nature of the entity's business. 

Subject only to the limited exception (discussed below in .jp Domain Names), a single entity is only entitled to own one Japanese domain name.  If a company wishes to register more than one Japanese domain name (for example, for its differently branded products) subject to this limited exception, it needs to establish a separate subsidiary or branch office to serve as the registered owner of each Japanese domain name.  This limitation does not affect an entity's ability to, in addition, register domain names with registrars other than the JPNIC.

Application and Registration Procedures
   Application Procedures
   Japanese Presence Requirement
      Japanese Subsidiary
      Japanese Branch Office
Transfer of Domain Names
Licensing of Domain Names
".jp" Domain Names
    General Information
    Schedule
Dispute Resolution Policies and Procedures
    Background Information; Purpose
    Relief Measures
    Dispute Resolution Proceedings
    Costs
Japanese Language Domain Name Registrations

Application and Registration Procedures

Application Procedures.  Domain name registrations in Japan are made on a first-to-file basis.  The cost of registering a domain name in Japan is ¥20,000 (approximately $167)[1].  The application process itself is relatively straightforward.  The applicant pays the ¥20,000 fee and submits his/her application by e-mail to the JPNIC.  The JPNIC notifies the applicant by e-mail of the application results within ten (10) days of receipt.  If the application is not approved, the fee is refunded.

Japanese Presence Requirement.  In order to register a domain name in Japan (namely, a "co.jp", "ne.jp,".go.jp" or ".jp" domain name), it is necessary for the applicant to be a Japanese corporate entity, such as a Japanese subsidiary or a registered branch of a non-Japanese entity.  Domain name registrations cannot be made by applicants which do not have a Japanese presence.  Given this, below we provide a brief outline of the legal status and formation process for Japanese subsidiaries and branches.

Japanese Subsidiary.  Japanese law recognizes two types of companies with limited liability, either of which may be used to establish a subsidiary, namely (i) the "limited liability company" (yugen kaisha), and (ii) the "joint stock company" (kabushiki kaisha).  Both kinds of corporation must be registered in Japan as Japanese corporations.  The corporate establishment and structure of the yugen kaisha is simpler than for a kabushiki kaisha, but most foreign enterprises setting up subsidiaries in Japan adopt the kabushiki kaisha as the vehicle for their operations.  Yugen kaisha must have capital equal to or greater than ¥3,000,000 ($25,000), whereas kabushiki kaisha must have capital equal to or greater than ¥10,000,000 ($83,333).  Both yugen kaisha and kabushiki kaisha are subject to Japanese corporate taxes in essentially the same way, both have certain ongoing reporting requirements, both must have a certain minimum number of directors or officers, and so on.  In addition to the cost, there are relatively onerous establishment and maintenance requirements which must be met with respect to a subsidiary, particularly a kabushiki kaisha.

Japanese Branch Office.  Establishing and maintaining a Japanese branch office is simpler, quicker and cheaper than establishing and maintaining a Japanese subsidiary.  Therefore, in our experience most clients who wish to establish a Japanese presence solely in order to register a Japanese domain name are best served by establishing a branch office rather than a subsidiary.  In order to establish a branch office in Japan, an applicant needs to provide certain information relating to the parent company, including its trade name, the address of the principal headquarter(s), the current paid-in capital, the total number of employees and the address of the branch office in Japan (an attorney's office may not be used for this purpose).  An applicant must provide a number of documents in order to establish its Japanese branch office, including a copy of its Articles of Incorporation.  A branch may or may not need to be commercially registered, depending on whether the branch will engage in commercial activities in Japan.  It is important to note that a branch must employ at least one representative resident in Japan.  In our experience, it takes approximately two weeks to establish a Japanese branch office from the date of application, assuming that the applicant provides all information necessary to establish the branch, has someone who can serve as the resident representative and has arranged for an office for registration purposes. 

Although the formation of a branch may have the advantages touched on above, note that there are also several disadvantages.[2]  For example, the foreign parent is directly liable for all the legal obligations of its Japan branch.  Accordingly, the presence of a branch in Japan enables any Japanese person or entity to sue the foreign corporation.  Further, branches may not freely receive operating funds from foreign persons and entities due to restrictions under the Foreign Exchange and Foreign Trade Control Law.  Finally, as a general matter a Japanese branch is less well-known and is less respected as a vehicle through which to conduct business in Japan.

Transfer of Domain Names

Until October 19, 2000, a domain name owner was not permitted to voluntarily transfer or assign a domain name to a third party.  However, pursuant to new rules effective as of October 19, 2000, this transfer restriction has been removed and it is now possible for domain names to be voluntarily transferred, provided that the transferee meets the Japanese presence requirement and does not hold more than one domain name, as discussed above.

Licensing of Domain Names

We have been advised by Japanese counsel that the JPNIC has recently conclusively confirmed that licensing of a ".co.jp,".ne.jp,".go.jp" or ".jp" domain name by the owner to a third party is permissible.  Until very recently, licensing of Japanese domain names was prohibited by the JPNIC and, as far as we are aware, there has not yet been an official announcement that this prohibition has been removed.

".jp" Domain Names

General Information.  Effective January 1, 2001, the JPNIC introduced multi-purpose second level ".jp" domain name registrations in the form of, for example, "mofo.jp."

In applying for a ".jp" registration, up until March 23, 2001, priority goes to registrants who (i) have the same third level domain registration; and/or (ii) own the Japanese trademark registration or trade name, corresponding to the domain name.  For example, the registrant of "mofo.co.jp" would have priority to obtain registration for the domain name "mofo.jp" in English and the domain name "mofo.jp" in Japanese kanji, hiragana or katakana characters, as discussed in more detail in paragraph 7 below.  The "mofo.jp" domain name(s) would co-exist with the previously registered "mofo.co.jp" registration.  The availability of ".jp" domain name registrations in English and Japanese means, in effect, that one registrant can own more than two (2) domain name registrations (that is, to use the same example, "mofo.co.jp,"mofo.jp" in English and "mofo.jp" in Japanese), which provides a limited exception to the one domain name per entity rule.  Foreign parties interested in obtaining a ".jp" domain name must still meet the local presence requirement, discussed in paragraph 2 above. 

Schedule.  The current schedule for the introduction of ".jp" domain name applications and registrations is as follows:

February 22, 2001:  Multi-purpose domain name registration regulations become effective. 

February 22 - March 23, 2001:  Application period for priority registration for eligible registrants who acquired a JPNIC-registered domain name before March 31, 2000, and for owners of trademarks, etc.

 April 2 - ongoing:  Acceptance of applications for multi-purpose domain names based on a first-to-file basis.

Dispute Resolution Policies and Procedures

Background Information; Purpose.  Effective October 19, 2000, the JPNIC introduced a dispute resolution policy (the "Policy"), in response to the increasing number of instances of cybersquatting in Japan, as well as other factors.  The Policy is essentially a localized Japanese version of the ICANN Uniform Domain Name Dispute Resolution Policy tailored to Japanese law and practice.  The primary aim of the Policy is to swiftly resolve domain name disputes by canceling or transferring JPNIC-registered domain names obviously registered or used in "bad faith" when complaints are made by the rightful owners of the underlying trademark.  Under the Policy, the rightful owner, or alleged rightful owner, of a domain name has standing to bring a complaint.  "Bad faith" use and registration of a domain name can be found in situations such as when the domain name registrant has obtained his/her domain name registration reflecting a trademark for the purpose of reselling it to the rightful trademark or domain name owner at a high price (namely, cybersquatting), or when a web site using a domain name identical or similar to a trademark owned by another party for the purpose of misleading or creating confusion among Internet users has been established. 

Relief Measures.  The relief measures available under the Policy are either (i) cancellation, or (ii) transferal of the domain name registration to the rightful owner (namely, complainant).  Please note that injunctive relief and compensatory damages are not available. 

Dispute Resolution Proceedings.  Dispute resolution proceedings are governed by JPNIC-approved dispute resolution service providers.  The first dispute resolution service provider which has been chosen is the Arbitration Center for Industrial Property ("ACIP") located in Tokyo.  The Policy aims to resolve all disputes within fifty-five (55) days from the time the complaint has been received by the dispute resolution service provider.  Dispute resolution proceedings are handled by an expert recommended by the ACIP.  The ACIP is currently preparing a list of candidates (such as attorneys and patent attorneys) to serve as arbitrators in dispute resolution proceedings.  In general, one arbitrator oversees proceedings.  If the parties so elect, however, the parties may have three arbitrators.  The proceedings are primarily document-based but, occasionally, oral argument may be requested by the arbitrators.  The arbitrators seek to render a decision within fourteen days of their appointment. 

The panelist(s) notify the ACIP of their decision and the ACIP thereafter notifies the parties as well as the JPNIC of such decision.  The ACIP publicizes all decisions on-line.  Upon receipt of each decision, the JPNIC holds it for a period of ten (10) days.  If the registrant does not bring a lawsuit contesting a decision within ten days after publication, the JPNIC proceeds to effect the decision, namely either cancel or transfer the domain name registration in question.  However, even after that period the decision does not have the same effect as a court decision and, if a party is not satisfied with the arbitrator's decision, it may still file a lawsuit with the appropriate court.

By way of aside, we understand from Japanese counsel that very few matters have so far been brought before the ACIP, which is contrary to initial expectations of the legal community and a flood of claims was widely anticipated.

Costs (as of 3/01)

One panelist (costs to be borne by the complainant):

Up to three domain names:              ¥180,000 ($1,500)
For every additional domain name: ¥10,000 ($83)

Three panelists:

if requested by complainant, costs to be borne by complainant:

Up to three domain names:             ¥360,000 ($3,000)
For every additional domain name:  ¥20,000 ($167) 

if requested by registrant, costs are split: 

Up to three domain names:             ¥180,000 per party ($1,500)
For every additional domain name:  ¥10,000 per party ($83)

Japanese Language Domain Name Registrations

Since November, 2000, it has been possible to register "**.com"**.net" and "**.org" domain names using Japanese kanji, hiragana and katakana characters.[3]  We note that "**.com"**.net" and "**.org" registrations are not made through the JPNIC.  For those not familiar with the Japanese language, kanji are Chinese characters, each of which represents a concept or idea.  Each kanji may have more than one possible pronunciation, depending on the context in which it is used.  Hiragana and katakana are phonetic "alphabets" used together with kanji in the Japanese language.  Katakana is used specifically for indicating foreign and foreign-origin words, such as the names of non-Japanese companies or individuals.

Many aspects, including administrative and technical aspects, of the Japanese domain name application and registration process are still developing.  However, we understand that under current practice, Japanese language domain names may contain up to fifteen (15) Japanese characters.  The ".com,".net" or ".org" portion of the domain name is indicated in English. 

We understand that, beginning February 22, 2001, it has been possible to register ".jp" domain names in Japanese through the JPNIC.  The ".jp" portion of a Japanese-language the domain name is indicated in English.  For example, if Morrison & Foerster is the owner of the domain name "mofo.co.jp," Morrison & Foerster would, in addition, be able to obtain both "mofo.jp" in the English language and "mofo.jp" in kanji, hiragana or katakana characters.  If, however, Morrison & Foerster only registered "mofo.jp" in English but not Japanese, or vice versa, it would be possible for an unrelated third party to register "mofo.jp" in the language which "mofo.jp" has not been registered.  It remains to be seen how much of a problem this will be, but it is anticipated that the amended Japan Unfair Competition and Prevention Law ("UCPL"), discussed in paragraph 8, will deter registrations made with ill intent.   

It is not possible to register "**.co.jp" domain names in Japanese (namely, in kanji, hiragana or katakana characters), and - as far as we are aware - the JPNIC does not have any current plans to permit such registrations.

Amendment to the Japan Unfair Competition and Prevention Law

We have been advised by Japanese counsel that Article 2 of the UCPL will likely be amended in 2001, to clarify the scope of activities that are considered to be unfair competition.  The main purpose of the amendment is to make it easier for rightful owners of domain names to bring legal action against third parties registering domain names with ill intent, either through the Japanese courts or in accordance with the Policy, discussed in paragraph 6.  We understand that the proposed revision will provide that an act of unfair competition shall include "the act of obtaining the right to use a domain name, holding of such domain name or use of such domain name which is similar to the trademark or trade dress of goods etc. of another, with ill intent."

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Please note that Morrison & Foerster is not qualified to advise on Japanese law and, accordingly, this document should be viewed only as a summary of the principal issues as we understand them, and should not be construed as a substitute for detailed legal advice.  Also, the information contained herein is subject to change.  

In the event you desire to register a domain name in Japan, or have any specific questions about Japanese domain names, we recommend that you contact Angela Krantz in our Tokyo office so that we may work with you and Japanese counsel to assist you.