The Kawaii Transactions: How Fan Fiction Helped Unleash Japan’s Cultural Creativity Tsunami

The kawaii aesthetic can refer to humans, animals, or the inanimate (e.g., objects or even styles of handwriting). Today, a wide variety of Japanese creations are recognized by their high degree of kawaii (cuteness), including films, books, fashion, toys, and other elements across a spectrum of contemporary popular culture.

In the entertainment industry, kawaii has spawned a tsunami of incredibly successful industry genres and iconic characters, including Sanrio’s Hello Kitty, video games (Nintendo’s Donkey Kong and Mario), manga comic books, the anime genre of animated films, and more. Generally, this genre features characters known for their distinctive style, extra-large doe eyes, and cartoonish proportions.

The kawaii movement is animated by several factors. Scholars suggest that it is something hardwired in the human psyche that draws us to this aesthetic and its characteristics. Japanese culture also offers an incredibly devout fan base that engages in a variety of behaviors that amplify the popularity of the character franchises. These fan behaviors include creating fan websites, organizing conferences, dressing up in costumes like their favorite characters (“cosplay”), and creating their own fan-made versions of comics and films. Notably, the creation of much of this unauthorized fan fiction—infringing derivative works under copyright law—today drives numerous Japanese economic, trade, and copyright licensing issues.

The Rise of Japan’s Creative Ecosystem

Post-World War II Japan was characterized by vast devastation and poverty. The Japanese people struggled to make ends meet, and most held menial hard labor jobs, including low-end manufacturing. In the 1950s, the nation’s economy was resurrected through the manufacture of cheap goods for the world. Creative forces soon launched a cultural revolution of sorts by developing new characters for licensing across a spectrum of the film and toy industries. In the 1960s, Shintaro Tsuji, the founder of Sanrio, realized a vision for his company, as well as Japan’s future: “Japan was ‘a world in which “making money” meant “making things.” I desperately wanted to leapfrog the “things”—the “hardware”—and make a business out of the intellectual property [IP].’” In the 1970s, Tsuji launched a series of comic characters, including Hello Kitty. Of all of Sanrio’s various character products, Hello Kitty was the single biggest runaway hit. Today, Sanrio is a multi-billion-dollar enterprise, and its iconic characters are beloved around the world.

The Japanese creative industries have given the world some of the most iconic characters and products of the last generation, including Mario (and his nemesis Donkey Kong), Pac-Man, Pokémon, the Walkman, and a cast of countless others. A highly dedicated fan base embraced these creations for a variety of reasons, including the distinctive kawaii aesthetic and the fandom community’s sense of belonging to an inclusive community. In the U.S., we may liken this devout anime fan base to the “Trekkies” who propelled the popular Star Trek franchise or the “Potterheads” of the beloved Harry Potter series. Accordingly, the fandom kawaii tsunami has driven the huge commercial success of these Japanese franchises across films, books, video games, clothing, and other merchandise secured by IP licensing.

One celebrated landmark achievement of the Japanese creative ecosystem is the animated fantasy film Spirited Away, by Studio Ghibli and writer-director Hayao Miyazaki. This anime genre film masterpiece stunned the world by winning an Oscar for Best Animated Feature at the 75th Academy Awards in 2002. It also was a commercial success, earning more than $395 million at the global box office (and is Japan’s second most successful, highest domestically grossing film in its history).

Soon thereafter, Hollywood types argued that anime’s “worldwide popularity ranks alongside—and likely surpasses—Disney animation.” It is important to remember that Japan is home to the world’s third largest box office, after North America and China. The Japanese anime film franchises are hugely successful at home and increasingly overseas, as is the genre itself. The numbers bear out that truth:

• Netflix reported that more than 100 million households around the world watched at least one anime title in the first nine months of 2020, a 50% increase from 2019.
• In 2022, Japan’s total anime industry had an estimated market value in excess of $21 billion.
• A private market research firm forecasted that the total global revenue from anime is expected to grow to more than $50 billion by 2029.

As the anime industry continues to prove its economic success, Japanese policymakers and its industry are motivated to strengthen their copyright system to prevent internet piracy and to facilitate licensing transactions.

The Manga-Anime Guardians Project

The Content Overseas Distribution Association (CODA) is Japan’s primary trade association organized to fight the foreign piracy and counterfeiting of content. According to CODA’s published surveys, the estimated losses from pirated Japanese content circulating online in 2022 was 1.95 to 2.20 trillion yen (the equivalent of $13 billion in 2022 dollars), which was approximately five times higher than the 2019 survey’s estimate. In the 2019 survey, the estimated amount of damage was 333.3 to 430 billion yen (the equivalent of $3.5 billion in 2019 dollars). Clearly, the magnitude and trend of this problem call for significant action.

In 2014, Japan’s Ministry of Economy, Trade and Industry (METI) developed a plan to prevent global copyright infringement for anime and manga works. METI launched the Manga-Anime Guardians Project (MAGP) (1) to monitor and to take down illegally uploaded copies of manga and anime; (2) to provide the public with official government anti-piracy resources, including an ongoing public awareness education campaign that often features popular anime characters; and (3) to develop policy recommendations, including legal reforms.

Recent MAGP public education campaigns urge Japanese fans to join the fight to stop copyright piracy. In one campaign, the Office of the Japanese Prime Minister, along with a score of various characters, thanks “all of those who love Manga & Anime” for their support of the domestic industry against foreign piracy. The PSA uses film footage from a variety of classic Japanese manga and anime films. It’s a “just say no” campaign, with a Japanese anime twist.

Another significant contribution of the MAGP and CODA’s fight against illegal internet piracy was a legislative copyright reform recommendation. In January 2021, their efforts were realized when the revised Japanese Copyright Act expanded the prohibition against illegal downloading of infringing content to cover all copyrighted works. Previously, the copyright law’s prohibitions had been limited to movies and music content. The penalties for the unauthorized downloading of publications now include a sentence of up to two years in prison or a maximum fine of two million yen ($18,620). Previously, local laws had provided base penalties for movie and music content piracy.

Fan attitudes toward the MAGP and its anti-piracy initiatives have been quite cool to negative. These fan attitudes are akin to the populism witnessed in other countries around the world, including the U.S., which are grappling with fan issues in response to fighting global internet piracy. Legal commentators argue:

[B]ased on the few non-infringing options for non-Japanese-speaking fans to view anime and manga, it is likely that, should [the MAGP’s] project succeed, they will alienate these viewers by restricting access to the material. . . . Although METI was creative and put effort into the MAGP website and plan, it is not the answer to the problem of illegal video streaming and downloads. METI underestimated the zeal and devotion of overseas fans. Fans are not passive consumers. They are always searching for the next thing, the hidden symbolism, the new interpretation, or even just the newest phone snapshot of their favorite actor.”

In contrast, the Japanese content industry publicly acknowledges the severity of the threats of online piracy. Takeo Hisamatsu, a Japanese film producer and the Tokyo International Film Festival’s director, has argued that the magnitude of Japan’s online piracy problem is “quite shocking,” despite the body politic’s attitude that “it is not a big issue.” It has been more than 20 years since the rise and fall of the peer-to-peer file sharing site Napster, and the U.S.’s public attitudes surrounding online copyright piracy still remain mixed.

Japanese culture is known for respecting the virtue of perseverance. Accordingly, we must recognize that the fight against online piracy in Japan, along with public attitudes, will require perseverance, as it does in all other countries grappling with these technological challenges.

Japanese Copyright Law

Japan is known for having a high degree of centralized government-planned industrial policies driving its economic prosperity. Ultimately, IP emerged as an important element of Japan’s national plan. The phenomenal economic success of Japan’s commercialization of its kawaii creativity, along with concerns about domestic copyright violations and global internet piracy, drove important changes to its copyright law.

Legal observers find the Japanese copyright system to be modern in some respects but deficient in others. Japan joined the major modern copyright international agreements—the Berne Convention and the WIPO Performances and Phonograms Treaty—despite initial reservations. The Japan Copyright Act (Chosakuken) acknowledges a number of important owner rights, including key economic and moral rights. The economic rights include the rights of reproduction, distribution, translation, public transmission, exhibition, and exploitation of derivative works. Moral rights include a right to preserve the “integrity” of the work.

However, Japanese copyright law does not recognize anything akin to the U.S.’s fair use doctrine. Accordingly, Japanese law frequently presents a puzzling gap between the rights of owners and users. Because Japanese courts do not rely on legal court precedent (e.g., “stare decisis”), any significant changes to the copyright law must be made through legislation.

Notably, Japan’s otherwise strict copyright system tolerates, if not embraces, two enormously popular phenomena of unauthorized fan-created derivative works: doujinshi and fansubs.

Doujinshi: Fan-Created Works

Doujinshi are fan-created works, such as fan-created comic books or short films, based on popular characters, which are produced without the permission of the original creators. These wildly popular unauthorized derivative works are produced and sold for profit. While such works are not specifically authorized by Japanese copyright law, this practice is generally embraced by the culture and the copyright owners and endorsed by government officials.

Doujinshi conventions, which are held several times a year, are very popular among the devoted fan base. They are akin to our Comic-Con, the popular fan comic book and film convention. Founded in 1975, the Japanese Comic Market (Comiket) is a Tokyo-based semi-annual fan convention featuring marketplaces for the sale of doujinshi works. In 2019, the wildly popular event’s attendance reached a peak of 750,000 fans. The existence of such a marketplace of this scale selling copyright-infringing fan works with the blessings of all involved likely defies the imaginations of many Westerners.

These fan-created works are often tolerated by the copyright owners because they help “fan the flames” of a franchise’s popularity with the audience. These works are celebrated for a variety of reasons, including (1) allowing the fan expression of new stories with their beloved characters; (2) helping share new franchises with the public; (3) providing a means for new, younger artists to be recognized by the industry and gain employment; and (4) allowing for certain fan communities to feel included by society. (It must be noted that by some estimates, 90% of all doujinshi are some type of erotica.) While there is great tolerance, if not an embrace, for this tradition, there have been some notable, extreme cases of abusive fan-created works that have gone to court for copyright violations (e.g., the Pokémon fan fiction lawsuit).

Fansubs: Fan-Subtitled Anime

Fansubs are another fan phenomenon. The term “fansubs” is short for “fan-subtitled anime,” where fans subtitle and release anime video episodes for distribution to overseas audiences, often for free. Many laud this activity as it is viewed as a way of sharing new titles and characters with new fan bases and audiences around the world. In contrast, these activities very likely violate the artists’ and authors’ economic and moral rights under Japanese copyright law, including the moral right of preserving integrity (Article 20), the right of public transmission (Article 23), and the right to translate (Article 27). Likewise, a foreign translation may also be a violation of U.S. copyright law as the Act expressly protects derivative works.

Fansubs are sometimes distributed freely for no direct cost; however, it is argued that the distributors are nevertheless benefiting in indirect financial ways. These fan practices arguably helped evangelize anime across new audiences and popularize otherwise unknown, or unavailable, works in some jurisdictions. These practices have been less tolerated over the years, as the anime industry matured. They also helped galvanize Japanese filmmakers and policymakers to change Japanese copyright law to protect authors and to fight piracy.

Fan Fiction, Fair Use, and Contrasting National Legal Treatment

Japan’s phenomenal kawaii success story highlights the importance of fan fiction for a nation’s creative ecosystem and economic prosperity. Yet, the disparate treatment of fan fiction between the Japanese and U.S. legal regimes is quite paradoxical. In Japan, fan fiction is embraced despite its facially stricter copyright law, including the existence of strong moral rights and the absence of a fair use provision. In the U.S., fan fiction is rarely tolerated despite its long experience with a fair use doctrine. Doujinshi and fansubs have inspired many American proponents of broad legal protection for fan fiction, who argue that this enterprise is about creativity, meaning, and enjoyment. Accordingly, they believe that U.S. copyright law should also tolerate, if not embrace, these fan-based activities, especially given the temptation of the fair use doctrine’s prima facieembrace of a transformative use. In reality, the U.S. copyright system has grappled with the challenges of fan-created works for decades.

Almost a century ago, Judge Learned Hand opined that “the issue of fair use . . . is the most troublesome in the whole law of copyright.” U.S. Supreme Court jurisprudence interpreting the Copyright Act continues to establish the boundaries and the delicate balance between authors and users. In Harper & Row, Publishers, Inc. v. Nation Enterprises, the Court noted that the Copyright Act encourages creativity by granting to the author of an original work “a bundle of exclusive rights.” The Copyright Act statutorily provides authors this bundle of exclusive rights (i.e., protection against reproduction and the production of derivative works) while tempering these with limitations through fair use. American courts have interpreted the Copyright Act to balance a number of considerations, including what conduct may be considered a permissible fair use. The fair use analysis—an affirmative defense to the infringement of any of this bundle of exclusive rights—is an extremely fact-specific balancing test. Nearly 30 years ago, in Campbell v. Acuff-Rose Music, Inc., the Court considered how a successful fair use analysis could rely on a so-called “transformative” use, looking to concepts such as parody and satire. After Campbell, many adopted an expansive fair use paradigm wherein one could claim that an infringing use was transformative because it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.”

Recently, in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, the U.S. Supreme Court issued a landmark copyright opinion reviewing the contours of the fair use doctrine. The opinion’s conclusion is a far stricter, narrower interpretation of “fair use.” Accordingly, any American hopes for a broad fan fiction legal safe harbor have likely been set back. While proponents may argue that fan fiction is simply a “transformative fair use” of beloved characters recast in entirely new stories and situations, the Warhol decision may squarely foreclose such unauthorized practices. In Warhol, the majority opinion explained:

[T]he first [copyright] fair use factor instead focuses on whether an allegedly infringing use has a further purpose or different character, which is a matter of degree, and the degree of difference must be weighed against other considerations, like commercialism. Although new expression may be relevant to whether a copying use has a sufficiently distinct purpose or character, it is not, without more, dispositive of the first factor. . . . Otherwise, “transformative use” would swallow the copyright owner’s exclusive right to prepare derivative works. Many derivative works, including musical arrangements, film and stage adaptions, sequels, spinoffs, and others that “recast, transfor[m] or adap[t]” the original, §101, add new expression, meaning or message, or provide new information, new aesthetics, new insights and understandings.

In her passionate Warhol dissent, Justice Kagan challenges the majority opinion limiting the transformation approach of the fair use doctrine by asking, “Why do we have ‘fair use’ anyway?” Her frustration is palpable as she invokes past Court precedent and observes, “As Congress knew, and as this Court once saw, new creations come from building on—and, in the process, transforming—those coming before.”

Ultimately, the Court’s answer may lie in American legal realism, including what Congress and the Court have observed in that “coming before” and thereafter. In Eldred v. Ashcroft, the Court cited the congressional testimony of Register of Copyrights Marybeth Peters and others regarding the economic underpinnings of our copyright system. Register Peters testified in defense of a strong copyright system, explaining that “[a]uthors would not be able to continue to create . . . unless they earned income on their finished works. The public benefits not only from an author’s original work but also from his or her further creations.” A liberal Japanese-like approach to fan fiction, which embraces the widespread production of infringing works, would clearly undermine the efforts and livelihood of those original authors. Accordingly, a fair use exception that swallows the rule of exclusive rights would distort the historic legal balance underlying the American creative ecosystem.

The divide between modern authors and their most fervent fans need not be fraught with tension. The Japanese and U.S. legal experiences provide valuable lessons about how the two systems can balance the creative impulses of the original authors and the most devoted fans seeking to honor their favorite characters, through a balanced legal approach and other market-based solutions, such as voluntary licensing guidelines.

Fortunately, today many U.S. copyright owners also deeply respect and celebrate their fans and their desire to create fan fiction through various permissive licensing systems. Some organizations have developed licensing regimes to allow fans to create their own fan fiction, subject to certain guidelines. Paramount has issued guidelines for the creation of Star Trek fan fiction that include policies regarding the use of certain characters, the length of any film production, distribution means, professional actor compensation, etc. The guidelines state in part:

CBS and Paramount Pictures are big believers in reasonable fan fiction and fan creativity, and, in particular, want amateur fan filmmakers to showcase their passion for Star Trek. Therefore, CBS and Paramount Pictures will not object to, or take legal action against, Star Trek fan productions that are non-professional and amateur and meet the following guidelines.

Japan taught the world to consider innovative practices to help fans to boldly go on to celebrate copyrighted works in a largely frictionless transaction. Inevitably, authors and their devout fans will continue to perfect the creative ecosystem harmony, recognizing the delicate balance of the many elements at stake.

Conclusion

The kawaii “cuteness culture” movement may have been born of the Japanese people’s unhappiness and the hungry spirit of a past era. Today, kawaii’s legacy includes the invention of many beloved characters and stories, a stronger national copyright licensing system, a globally envied creative ecosystem, and the gift of much happiness to the whole world.