1.2Legal affairs

For anyone involved in IT companies or information systems, legal knowledge is a practical foundation you cannot afford to skip. This section walks through intellectual property, which protects what you create; security-related law, the rules for handling information; labor and trade law, the rules for dealing with people and business partners; and compliance and standardization, which govern corporate activity as a whole.

1.2.1Intellectual property rights (copyright and industrial property)

• Copyright protects created expressions such as novels, music, and computer programs. It requires no registration—it arises automatically the moment a work is created (the principle of automatic protection).
• Industrial property rights are a group of rights that arise through application and registration with the Patent Office. There are four main types: patent rights (protect inventions), utility model rights (protect the shape and structure of articles), design rights (protect designs), and trademark rights (protect names and logos of goods and services).
• The biggest difference between copyright and industrial property: copyright arises automatically without registration, while industrial property requires application, examination, and registration. There is also a difference in what is protected: a program's "source code as expression" can be protected by copyright, while an "invention-level idea" embodied in the program can be protected by a patent.

1.2.2Security-related law

• The Unauthorized Computer Access Law prohibits accessing a system using someone else's ID and password without authorization, as well as acts that facilitate this (such as providing an unlawfully obtained password).
• The Act on the Protection of Personal Information requires businesses that handle information identifying a specific individual (such as name and date of birth) to clearly state the purpose of use, take appropriate security measures, and, in principle, refrain from providing the data to third parties without the individual's consent.

1.2.3Labor and trade law, compliance, and standardization

• The Worker Dispatch Act governs the arrangement in which a dispatching agency sends workers to work at a client company. A key difference from outsourcing (contracting) is that the client company can directly direct and supervise dispatched workers.
• The Act on Ensuring the Proper Conduct of Subcontracting Transactions with SMEs (formerly the Subcontract Act; renamed and in force January 2026) prohibits a commissioning business from unfairly reducing payments, delaying payment, or forcing unreasonably low prices on a small or medium subcontracted business, ensuring fair transactions. With the rename, the former "parent business / subcontractor" became "commissioning business / small-and-medium subcontracted business."
• Compliance means an attitude of adhering not only to laws but also to internal rules and social ethics. Standardization such as ISO/JIS is a mechanism for aligning the quality of products, services, and management to a consistent level based on international standards (ISO) or Japanese Industrial Standards (JIS).

Picture a startup building a new smartphone app. The moment an engineer finishes writing the source code, it is protected by copyright—no special registration is needed. If the app includes a genuinely novel algorithm (an invention) that no other company has, and the startup wants exclusive protection, it must file an application with the Patent Office to obtain a patent (a type of industrial property). If it wants to stop others from copying the app's logo or service name, it can consider filing for a trademark. If the startup outsources part of the UI design to an outside small or medium-sized business, the Act on Ensuring the Proper Conduct of Subcontracting Transactions with SMEs applies to the startup as the ordering party, prohibiting it from unfairly cutting payment or delaying it after receiving the deliverable. On the other hand, if the startup temporarily brings in engineers from a staffing agency during a busy season, the Worker Dispatch Act applies, and the startup (as the client) can directly instruct the dispatched engineers—unlike outsourced contractors, whom it cannot directly direct. If the app collects users' names and email addresses, it must state the purpose of use and manage the data appropriately under the Act on the Protection of Personal Information. And if a former employee keeps using an old ID and password without authorization to access the internal system after leaving, that violates the Unauthorized Computer Access Law. Legal rules like these cover nearly every facet of running a business—building things, hiring people, handling information, and making deals.

1.2.4Section summary

• Copyright arises automatically, no registration (protects expression). Industrial property (patent/utility model/design/trademark) requires application and registration
• Unauthorized Computer Access Law: prohibits unauthorized access. Act on the Protection of Personal Information: requires stating purpose, security measures, and no third-party disclosure without consent
• Worker Dispatch Act (client can directly direct workers) / Act on Ensuring the Proper Conduct of Subcontracting Transactions with SMEs (do not use the old name). Compliance and ISO/JIS standardization