JAPAN Trends and Developments Contributed by: Shingo Yamada, Yugo Komori, Yasuhiro Akita and Yusei Kanehara, Oh-Ebashi LPC & Partners
being aware of the risk of such accidents, the manu - facturer failed to take measures such as recalling the products. Moreover, with respect to post-market liability, more complex issues arise in cases involving products that require post-delivery updates, as is often the case with software such as artificial intelligence. For example, where, following the delivery of a product incorporating software, technological developments necessitate a software update, but the manufacturer fails to implement an appropriate update, the manu - facturer does not incur liability for damages under the current Product Liability Act; however, it may incur liability for damages in tort under the Civil Code. This is analogous to the case of gas instantaneous water heaters referred to above. The question then arises as to how such situation should be addressed where, at the time of delivery, no defect existed in the software, and although the manufacturer subsequently implemented appropri - ate updates, those updates create a new issue in the software under certain conditions. In such case, there is little doubt that the manufacturer may incur liability for damages in tort under the Civil Code. On the other hand, as regards product liability, since a manufac -
turer is understood, as noted above, to incur product liability only where a defect exists in the product at the time it is delivered, it appears that the manufacturer does not incur product liability in respect of issues arising from updates implemented after delivery. How - ever, the Guideline on the Interpretation and Applica - tion of Civil Liability in the Use of AI issued by METI, as described above, introduces the following two views: • although a defect arising from an update cannot, as a general rule, be regarded as a defect existing at the time of delivery, it is conceivable that where the latent cause of such defect in the software update existed at the time of delivery of the prod - uct, the defect may be regarded as having existed at the time of delivery; and • in the case of products for which software updates are envisaged at the time of delivery, the assess - ment of a defect may take into account all cir - cumstances up to the point of the final software update. Among recent products incorporating software, including AI, it is not uncommon for such products to be premised on enhancement of their safety through timely post-delivery updates. The developments in discussions concerning such updates warrant close attention going forward.
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