JAPAN Trends and Developments Contributed by: Shingo Yamada, Yugo Komori, Yasuhiro Akita and Yusei Kanehara, Oh-Ebashi LPC & Partners
product from the platform – and nevertheless con - tinued to list the product without removing it, thereby causing harm, it is likely that the DPF provider may incur liability for damages. Software Under Japanese product liability law, software, includ - ing AI, is not included within the scope of products subject to liability, and a software developer does not incur liability for damages under the Product Liability Act; however, it may, in certain circumstances, incur liability for damages in tort under the Civil Code. At present, no clear direction has yet emerged as to whether software developers should be brought within the scope of entities subject to product liability, as under the new EU Product Liability Directive; however, it is anticipated that this issue will be the subject of increasingly active discussion in Japan going forward. On the other hand, where a defect in software causes a malfunction in the product into which the software is incorporated, resulting in a product-related acci - dent, there is no doubt under the Product Liability Act in Japan that the manufacturer of the product incor - porating such software will incur product liability. In practice, in Japan there are a number of judgments concerning products incorporating software, such as autonomous driving systems and assistive AI, in which the product liability of the manufacturer of the product has been contested on the basis of defects in the software. Specifically, in a case involving an aircraft crash, the plaintiffs argued that the aircraft was defective in that its design allowed the autopilot system installed in the aircraft to conflict with the pilot’s manual control inputs, thereby placing the aircraft in an extremely unstable and dangerous condition. However, in this case, the court ultimately denied product liability, holding that the cause of the accident lay in pilot negligence, including a lack of understanding of the autopilot system. With respect to assistive AI, there is also a judgment in which, in a case where a driver, having followed route guidance provided by a car navigation system, entered a narrow road obstructed by overhanging
trees and sustained scratches to the vehicle body, the driver sought to hold the manufacturer of the naviga - tion system liable under product liability on the ground that the navigation system was defective. In this case as well, the court ultimately denied product liability, holding that it was necessary for the driver to operate the vehicle on the basis of their own judgment. From these earlier judgments, it may be inferred that, with respect to autonomous driving systems and AI systems, courts have tended to place emphasis on the judgment and duty of care of the user, and to construe product liability relatively narrowly. That said, these decisions are relatively dated, having been handed down in 2004 and 2018, respectively. In light of the significant advances in AI technology since then, and the corresponding rapid increase in both the performance of, and reliance upon, AI systems, it cannot necessarily be assumed that such trends will be maintained in the present or future. It will therefore be important to monitor further developments, includ - ing ongoing considerations by the CAA and METI, as well as future judgments. Post-market liability Under Japanese product liability law, a manufacturer is understood to incur product liability only where a defect exists in the product at the time it is delivered. Accordingly, where a product becomes defective only after delivery, for example as a result of subsequent modification, the manufacturer does not, under the current Product Liability Act, incur product liability in respect of the product in its modified state. With respect to post-market liability, as with the issue of software described above, no clear direction has yet emerged as to whether it will, in the future, be brought within the scope of product liability in Japan, as under the new EU Product Liability Directive. However, even where a product becomes defective only after delivery, the manufacturer may, in certain circumstances, incur liability for damages in tort under the Civil Code. For example, in a case in which gas instantaneous water heaters were modified by third parties after delivery, and a series of fatal accidents resulted from such modifications, there is a judgment in which the court recognised the manufacturer’s lia - bility for damages in tort on the basis that, despite
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