You must not make a profit by using a well-known character belonging to someone else without licence. This is a commercial common sense, but a question is on what legal basis such an activity is banned? A character business may involve various intellectual properties, including copyright, trademark, design rights, etc., however, none of these IP rights is directly aimed at protecting characters. Besides, trademarks and design rights shall not take effect unless they are registered at the Patent Office, and characters are not always copyrightable. In several cases, Japanese courts suggest that the Unfair Competition Prevention Act of Japan takes a certain role to protect characters. This case review examines a recent judgment in the case, which deals with the application of this Act for the prevention of free riding on the video game characters.
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