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JFTC warns Konami Corporation against unfair trade practices through sub-lincense agreements

April 22/2003
Japan Fair Trade Commission

The Japan Fair Trade Commission conducted an investigation into Konami Corporation (hereunder “Konami”) based on the provisions of the Antimonopoly Act and today issued a warning to Konami that the company is in danger of violating the provisions of Section 19 of the Act (corresponding to Designation of Unfair Trade Practices Paragraph 2 “Other refusal to deal”) as described below.

1 Concerned party

Name Konami Corporation (Tokyo, Japan)
Business Creation and sale of game software for home use, other businesses

2  Summary of conduct suspected of violating the Antimonopoly Act

Konami had entered an agreement with The Professional Baseball Organization of Japan (hereunder “The Baseball Organization”) for exclusive merchandising rights concerning the intellectual property rights (hereunder “the intellectual property rights in this case”) regarding baseball team names, baseball player names and baseball team logo marks of twelve professional baseball teams controlled by The Baseball Organization for a three-year period from April 1, 2000. Despite the fact the agreement provided that Konami grant sub-licenses to the intellectual property rights in this case to other game software developers besides Konami (hereunder “software developers”) to the extent there was no particular rational cause to withhold such sub-licenses, Konami engaged in conduct that delayed the conclusion of sub-license agreements with certain software developers,or delayed the sale of new professional baseball game software products by those software developers or caused them to abandon the development of such software, by not accepting applications to conclude a sub-license agreement by reason of problems regarding rights of portrait.

3 Summary of the warning

Konami shall not engage in the conduct described in paragraph 2 above in the future.

4 Request to The Baseball Organization

The Commission determined that although The Baseball Organization, in concluding the exclusive merchandising license agreement with Konami, provided that Konami grant sub-licenses to the relevant intellectual property rights to software developers to the extent there was no particular rational cause to withhold such sub-licenses because the use of the intellectual property rights in this case is indispensable to the creation and sale of professional baseball game software, The Baseball Organization did not sufficiently adopt measures required for this purpose, or overlooked the conduct by Konami described in paragraph 2 above.

In light of The Baseball Organization having entrusted with the management of the intellectual property rights in this case by the twelve professional baseball teams, and granted rights to the use of the intellectual property rights in this case, the Commission requested The Baseball Organization should give sufficient attention to the Antimonopoly Act when granting rights to the use of the intellectual property rights in this case in the future.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.



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