Despite having a strong basis in the cultural heritage of Japan, Japanese folklore spirits, also known as yōkai, have often been excluded from being protected as cultural heritage, and are often privately trademarked and used in a multi-billion-dollar entertainment industry. Through these trademarks, rights holders have inconsistent and overlapping privatized entitlement to what is essentially shared cultural heritage, which forms a chasm in Japanese copyright protections. This has negative consequences for the public use and enjoyment of cultural heritage. This essay takes a socio-legal approach and proposes that yōkai being catalogued and protected under the protections granted by the Convention for the Safeguarding of Intangible Cultural Heritage would be a positive step, but is ultimately not a viable solution to this issue, and instead the lack of fair use protections in Japanese copyright law should be expanded to include a defence for the use of cultural heritage forms such as yōkai.