JAPAN’S TRADEMARK LAW- A CUT ABOVE THE REST

-Shantanu Jugtawat*

‘Trademarks have significance not only for private consumers but for corporations that sell goods and furnish services as well. Long ago, in an economy of face-to-face trade and of craftsmen and women, merchants considered credibility (or reputation) to be a vital asset. The more credible the merchant was, the more goodwill he or she acquired. At one point, merchants use the word “goodwill” as a mark to indicate consumer satisfaction, on other occasions the word was used to indicate a quality business organization. Marks are more unique in today’s highly developed distribution economy, but trademarks still play a role of immeasurable importance in facilitating economic activities.

Trademarks play a vital role in day-to-day choices made by the consuming public. Consider the effect of trademarks on those who purchase goods and receive services, consumers. Consumers rely on trademarks; for example, to more easily facilitate repeat purchases of goods or services based on a previous pleasurable experience or a manufacturer’s reputation for quality. Trademarks enable consumers to make repeated purchases without extensive research’*.

A trademark registration system was also implemented that, over time, encouraged the emergence of “trademark as property.” As the economy developed further, trademarks became recognized as important intellectual property. As a result of the evolving intellectual property perspective, a number of revisions of trademark legislation have been attempted and various interpretative studies have developed regarding Trademark Law. Because trademarks have great significance for consumers in the distribution economy, future Trademark Law examinations and interpretive studies should significantly take into account the perspective of consumer protection.

Section 1. Functions of Marks

Trademarks are signs that are associated with the exchange of goods and services. A “sign” is a mark; its function is identification. A trade “sign” is a representation enabling an article to be identified and distinguished from others on the basis of its origin.

Under the Trademark Law of Japan, marks are defined as “characters, figures, symbols, three-dimensional shapes or any combination thereof, or any combination thereof with colors.” (Article 2, Paragraph 1)

Japan’s Trademark Law protects trademarks and service marks. As is the case with patent applications, a resident agent (usually a lawyer or patent agent) must prosecute the trademark application and as with the processing of patent applications, Japan’s trademark registration process can be slow. Any company planning on doing business in Japan should file for trademark registration as early as practicable .

Unfair Competition and Trade Secrets:

The only protection available for a trademark in Japan prior to registration is under the Japanese Unfair Competition Prevention Law. Under this law, the owner of the mark must demonstrate that the mark is well known in Japan and that consumers will be confused by the use of an identical or similar mark by the unauthorized user. In 1990, Japan enacted amendments to the law that provided some protection from theft of trade secrets, such as know-how, customer lists, sales manuals, and experimental data. The law, which was amended completely in 1993, also provides for injunctions against wrongful use, acquisition, or disclosure of a trade secret by any person who knew or should have known that the information in question was misappropriated. The judicial process, however, makes the enforcement of rights without loss of trade secrets difficult.

Effectiveness of Trademarks

The trademark in Japan is valid only when it is registered for a certain category of goods. Thus it is possible to have the same trademark for different categories of products, without problem. The registration is with the Patent Agency.

However, to use the same trademark, or a similar one, for the same category of goods would violate the trademark. The trademark rights holder would then be able to seek an injunction and compensatory damages. There is also a possiblity of criminal penalties of five years imprisonment and 5 million yen in fines. This is obviously taken quite seriously, so it is advisable that adequate trademark research be carried out before using one. Nevertheless, even if another party had registered a trademark before you, if you have been using it from before, and it is well known among users, you may continue to use it. It is still advisable to make due research and timely registration in order to avoid conflict. Another exception is that if even a party registers a trademark first, if they do not use it for 3 years without suitable reason, another party can file an application for the cancellation of the trade mark in question.

Requirements for Registering a Trademark. –

Trademark registrations are made with the Patent Agency. The first to file gets the rights. The rights arise from the moment the moment it registered . As much as possible the symbol of the trademark should have characteristics such that as much as possible it can be distinguished from the products of services of other companies . There are two times when similarity becomes a problem. At the time of application and at the time of infringement. There are three aspects that are looked at in determining similarity.There is similarity in external appearance. Here if the trademark is looked at externally, and the lettering, drawings and markings look similar. Secondly is similarity in impression. If two trademarks have similar meanings there could be a similarity in impression. Finally, there is similarity in name, if they have similarity in sound. Thus Sony and Somy may fall in this category. In reality even experts often disagree in this area and there is a great Probaility existence of involving in litigation on these issues.

Obtaining Protection of Trademarks: Time priority in seeking registration is the major factor which enables one to exclude other potential users of a trademark in Japan. In terms of the time frame for obtaining registration, an application will typically be approved in two to three years from the date of filing if it is not contested. Electronic filing procedures have been created to streamline the application process. Neither current use nor the intention to make future use of a mark in commerce is a requirement for obtaining registration.

The following (among other) information must be included in an application for registration of a trademark in Japan:

(a) The applicant’s name (and, for companies, the representative’s name), address and place of incorporation;

(b) The specific “International Class(es)” in which registration of the trademark is desired. Also, the subclasses of goods and/or services in relation to which use is to be registered must be designated, including any desired limitation to specific goods and/or services contained in a subclass.

Invalidation Trial of Trademark Registration

(1) In the following cases, an interested person or an examiner may demand a trial to invalidate the registration of a trademark or the supplementary registration of designated goods. In such a case, if two or more designated goods are covered by the trademark registration, a demand for an invalidation trial may be made for each of the designated goods:

(i) the registration has been effected contrary to proviso of Article 3, Articles 6 to 8, Article 12(2) (second sentence), (5), and (7) to (9) of this Law or contrary to Article 25 of the Patent Law applied under Article 5 of the Law; ¡Amended on Aug. 22, 1997¡•

(ii) The registration has been affected in violation of a treaty;

(iii) The registration has been affected on the basis of an application filed by a person who is not a successor in title to the right deriving from the trademark application;

(iv) After the registration, the owner of the trademark right is no longer capable of enjoying such right under Article 25 of the Patent Law applied under Article 5 of this Law, or the registration no longer complies with a treaty.

(2) A trial for invalidation under paragraph (1) may be requested even after the extinguishment of a trademark right.

(3) Where a trial decision invalidating a trademark registration has become final and conclusive, the trademark right shall be deemed never to have existed; however, where a trial decision invalidating a trademark right has existed; however, where a trial decision invalidating a trademark right has become final and conclusive under paragraph (1)(iv), the trademark right shall be deemed not to have existed from the time when the trademark registration first fell under the said paragraph.

(4) Where a trial under paragraph (1) has been request the presiding trial examiner shall notify the contents of the demand to the exclusive licensee of the trademark right and to other persons who have any registered right relating to the trademark.

Article 72. Invalidation Trial of Registration of Renewal of Term of Trademark Right

(1) In the following cases, an interested person or an examiner may request a trial to invalidate the registration of the renewal of the term of a trademark right. In such a case, if two or more designated goods are covered by the registration of the renewal of the term of the trademark right, a demand for an invalidation trial may be made for each of the designated goods:

(i) ¡Deleted on Aug. 22, 1997¡•

(ii) The registration of the renewal has been affected contrary to Article 43(2);

(iii) The registration of the renewal has been applied for by a person who is not the owner of the trademark right concerned.

(2) A trial for invalidation under paragraph (1) may be requested even after the extinguishment of a trademark right.

(3) Where a trial decision invalidating the registration of the renewal of the term of a trademark right has become final and conclusive, the registration of the renewal of the term shall be deemed never to have existed.

(4) Article 71(4) shall apply mutatis mutandis to the request for an invalidation trial under paragraph (1).

Article 73. Trial for Cancellation of Trademark Registration

(1) A trial may be demanded for the cancellation of the registration of a trademark if the registered trademark falls under any one of the following subparagraphs:

(i) ¡Deleted on Aug. 22, 1997¡•

(ii) The owner of the trademark right intentionally uses a trademark similar to the registered mark on the designated goods or uses the registered trademark, or a trademark similar thereto, on goods similar to the designated goods in a manner that may be misleading as to the quality of the goods or which is liable to cause confusion with goods connected with another person’s business;

(iii) Neither the owner of the trademark right nor the exclusive or non-exclusive licensee has been continuously using the registered trademark for more than three years on the designated goods in the Republic of Korea without any justifiable reason before the date of the trial for cancellation;

(iv) The owner of the trademark right comes under the terms of Article 54(1) (second sentence), (5), or (7) to (9); ¡Amended on Aug. 22, 1997¡•

(v) The member of the association causes another person to use its collective mark contrary to the provisions of the statutes of the association;

(vi) A collective mark has become likely to mislead as to the quality of goods, or cause confusion among consumers with goods connected with another person’s business by a change of the statutes of the association under Article 9(3);

(vii) A trademark falling under the principal sentence of Article 23(1)(iv) has been registered and the owner of the original trademark requests a trial for cancellation within five years from the date of registration of the trademark;

(viii) The exclusive or non-exclusive licensee uses the registered trademark, or a similar trademark, on the designated goods, or goods similar thereto, in a manner that is liable to mislead consumers as to the quality of the goods or to cause confusion among consumers with goods connected with another person’s business; however, this provision shall not apply where the owner of the trademark right has taken appropriate care; or

(ix) Similar registered trademarks are owned by different owners of the trademark right resulting from a transfer of trademark right and one owner thereof uses his registered trademark for the purposes of unfair competition in respect of goods identical with, or similar to, the designated goods of his own registered trademark, causing consumers mislead as to the quality of that goods or have a confusion between his goods and the goods in relation with the other owners. ¡Added on Aug. 22, 1997¡•

(2) ¡Deleted on Aug. 22, 1997¡•

(3) Where a trial for cancellation is demanded for reasons referred to in paragraph (1)(iii), a trial for cancellation may be demanded for a part of the designated goods if the designated goods covered by the trademark registration arc two or more.

(4) Where a trial for cancellation is demanded for a reason referred to in paragraph (1)(iii), if the defendant cannot prove that the registered trademark has been used in the Republic of Korea within three years prior to the date of the demand for the trial on one or more of the designated goods to which the demand relates, the owner of the trademark right may not avoid the cancellation of the registration of the trademark for the designated goods; however, this provision shall not apply where the defendant can prove a justifiable reason for the failure to use the registered trademark. ¡Amended on Aug. 22, 1997¡•

(5) The reasons for cancellation shall not be affected when the facts giving rise to a demand for a cancellation trial no longer exist after the demand for trial is made for reasons referred to in paragraph (1)(ii), (iii), (v), (vi), (viii) or (ix).¡Amended on Aug. 22, 1997¡•

(6) A trial for cancellation under paragraph (1) may be demanded only by an interested person, except that a trial demanded for reasons referred to in paragraph (1)(ii), (vi), (viii) or (ix) may be demanded by any person. ¡Amended on Aug. 22, 1997¡•

(7) Where a trial decision ordering the cancellation of a trademark registration has become final and conclusive, the trademark right shall become extinguished as from that moment.

DefensiveMeasures:

A party may oppose the registration of a trademark (in relation to some or all of the designated goods and/or services) within two months of its publication in the Patent Office’s Official Gazette .

Trademarks are published subsequent to being approved for registration. As stated above, grounds for successfully opposing a trademark’s registration are essentially the same as those available to the Patent Office for denying it registration.

The criteria which prohibit registration include non-distinctiveness (however, distinctiveness may be acquired through use similarity to governmental or other official symbols, similarity to a pre-existing widely known mark, similarity to a previously registered mark, likelihood of misleading or confusion, unregistrability for other technical reasons ,

Process time consuming and costly

Obtaining and protecting patent and trademark rights in Japan can be time-consuming and costly. While the process to safeguard such rights might seem prohibitive, lack of protection would permit competitors in Japan to copy your product or production process, even if you have a US patent or trademark. Even when intellectual property rights have been acquired, pirating of technology and designs can occur in Japan, as it could in almost any country. Each company in a trading or licensing agreement should understand clearly what its rights and obligations are with respect to the intellectual property rights owned, acquired or subsequently developed by the other .

Japan’s Trademark Law protects trademarks and service marks. As is the case with patent applications, a resident agent (usually a lawyer or patent agent) must prosecute the trademark application. As with the processing of patent applications, Japan’s trademark registration process is slow, although processing times have been improving recently. It takes an average of 2.8 years to process a trademark registration in Japan, compared with an average of 13 months in the United States. Any company planning on doing business in Japan should file for trademark registration as early as practical.

The only protection available for a trademark in Japan prior to registration is under the Japanese Unfair Competition Law. Under this law, the owner of the mark must demonstrate that the mark is well-known in Japan and that consumers will be confused by the use of an identical or similar mark by the unauthorized user. Copying of American trademarks, particularly in the fields of sporting goods and clothing, occurs frequently and some smaller unscrupulous companies will file trademark registration applications for a US brand trademark, which they believe, will become popular in Japan.

Japan enacted amendments to the Unfair Competition Law in 1990, which provide some measure of protection from theft of trade secrets such as know-how, customer lists, sales manuals and experimental data. The law, which was amended completely in 1993, provides for injunctions against wrongful use, acquisition, or disclosure of a trade secret by any person who knew or should have known that the information in question was misappropriated. A problem with judicial procedure remains despite a 1996 amendment, and makes civil enforcement of rights without the loss of the trade secret difficult.

5.4.2 Cancellation of proxy registration

Japan’s trademark system protects the right of duly authorized trademark owners. For instance, where overseas-based goods or services are provided in Japan, and where the overseas company involved has entered into an agency agreement with a Japanese company, if that local agent applies for registration of the overseas company’s trademark without due cause, the duly authorized trademark owner may file a petition for the cancellation of the Japanese registration, and can thereby regain their trademark rights .

Application and registration fees

Naturally, applying for and being granted registration of a design incurs fees. The fees for this process in Japan are as follows.

1. Application fees

a. 16,000 yen per design

b. Note that the above amount is the official fee only, and does not include patent attorney’s fees, fees for design drawings, etc.

2. Registration fees

A registration fee is required when registering a design, however these fees differ from those of trademarks. The design registration fee for the first year is 8,500 yen and an annuity must be paid each year in order to maintain the validity of the design rights. The annuities are as follows.

Years 1 through 3: 8,500 yen per year

Years 4 through 10: 16,900 yen per year

Years 11 through 15: 33,800 yen per year

Similar designs: 8,500 yen (flat rate)

Remember that, if you engaged a patent attorney, you will be charged fees in addition to the above registration fees; these may include fees for the work involved in paying the official fees.

5.8.2 from application to registration

If the examination process goes smoothly, a design can be registered in as little as three months from the time of application. Generally, however, the examination takes approximately six months, and the registration takes another one or two months. Allow about eight months after application to complete the process.

Trademark Law

The 2005 revision of the Japanese Trademark Law introduces the regionally-based collective mark. The revision is intended to promote the credit of business, enhance industrial competitiveness and vitalize local economies.

Prior to the revision, a mark, which is the combination of the name of a region and goods or services, could not be registered as a word mark unless it acquired nationwide recognition or was combined with other designs or letters with a distinctive character. The problem was that an applicant could not exclude a third party’s free-ride use of such word marks until the mark gained a nationwide recognition, which usually requires huge investments and a long period of marketing efforts. Another pitfall is that the registrant of a trademark which comprised certain words and figures could not prevent a third party’s use of the words themselves or the mark which comprised the same words and other figures.

The official outlines of the bill gives key points of the revision:

1. Requirements for registration of regionally-based collective marks

ü Cooperative business associations and other associations established under the special laws with the status of legal entities and foreign legal entities corresponding thereto shall be entitled to obtain a regionally-based collective mark.

ü A trademark registration of a regionally-based collective mark may be obtained where, as a result of the use of the trademark, it has become widely known among consumers as an indication of the applicant’s or its members’ products or services.

ü Trademarks which may be registered as regionally-based collective marks are comprised of the name of the production area of the goods where the applicant or its members have been using the trademark prior to the filing, the place where the services are provided, or other corresponding areas which are recognized as having a close relationshipto the goods or services.

2. Opposition to the registration of regionally-based collective mark; Invalidation of the trademark registration

a. Any person may file an opposition to the registration of a regionally-based collective mark which has been made in violation of the requirements for registration.

b. When a registration has been made in violation of the requirements for registration of a regionally-based collective mark, an invalidation procedure of the registration may be demanded. In addition, when a registered regionally-based collective mark becomes not to meet the requirements for registration, an invalidation procedure of the registration may be demanded.

Thus, the revised law allows a business group, such as a cooperative business association to register a trademark, which is a combination of the name of a region and its goods or services, earlier than acquiring nationwide recognition of the trademark. This protects local businesses against a free-ride of their marks. The revision of the Japanese Trademark Law, adding regionally-based collective marks, will become effective on April 1, 2006.

The revision on the Japanese Unfair Competition Law and other related laws came into force on November 1, 2005

ELABORATE PROCEDURE FOR OBTAINING TRADEMARK

(1) Application

In order to obtain a trademark right, an applicant must fill out the forms prescribed in the relevant ordinances and submit them to the Japan Patent Office.

(2) Publication of Unexamined Application

The JPO will publish the content of an application in the Official Gazette after filing.

(3) Formality Examination

An application document submitted to the JPO will be checked to see whether it fulfills the necessary procedural and formal requirements. An invitation to correct will be made where necessary documents are missing or required sections have not been filled in.

(4) Substantive Examination

An examination will be made of whether the application fulfills the substantive requirements. The following trademarks will be refused as they are deemed not to meet the substantive requirements.

(i) Trademarks which do not enable consumers to differentiate the applicant’s goods or services from those belonging to other parties

(ii) Trademarks which are unregistrable for reasons of public interest or for the protection of private interests

(5) Notification of Reasons for Refusal

Where an application fails to meet the substantive requirements, a notification of reasons for refusal will be sent.

(6) Written Argument / Amendment

An applicant may submit either a written argument against a notification of reasons for refusal or an amendment that would nullify the reasons for refusal.

(7) Decision of Registration

If it is ultimately judged that there are no reasons for refusal, a decision to register a trademark will be made.

(8) Decision of Refusal

If a written argument and an amendment can not eliminate the reasons for refusal, and if the examiner judges that the trademark can not be registered, a decision of refusal will be made.

(9) Appeal against Decision of Refusal

When dissatisfaction is in the decision of refusal of the examiner, the applicant may appeal against the decision of refusal.

(10) Appeal Examination (against the decision of refusal)

An appeal examination against a decision of refusal is performed by a collegial body of three or five appeal examiners.

Decision of the appeal examiners is called appeal decision.

When it is judged, as a result of appeal examination, that the reasons for refusal was solved, an appeal decision to register a trademark is performed, and when the reasons for refusal is judged that the reasons cannot cancel and the trademark cannot be registered, an appeal decision of refusal is performed

(11) Registration (Registration Fee Payment)

With the payment of the registration fee, the registration of the trademark right will take place and the trademark right will come into force.

(12) Publication of a Trademark Gazette

As for the trademark right which has been registered and come into force, the contents are published on the trademark gazette.

(13) Opposition

Any person may file an opposition to the decision to register a trademark with the Commissioner of the JPO.

(14) Appeal for Invalidation / Revocation

Even after a trademark is registered, any person may appeal for invalidation of the trademark if it has a flaw.

Moreover, if the trademark has not been used after registration for three years or more, an appeal for revocation may be charged.

(15) Appeal Examination (Invalidation / Revocation)

An appeal examination of invalidation/revocation is performed by a collegial body of three or five appeal examiners.

About invalidation, if the appeal examiners judge that there is no flaw in the decision to register a trademark, they will make a decision to maintain the trademark registration. If however they judge that the decision to grant was flawed, they will make a decision to revoke the trademark right.

About revocation, when a right holder cannot prove using the trademark, an appeal decision of revocation is performed, and the trademark right is revoked.

(16) Intellectual property High Court

An applicant who is dissatisfied with an appeal decision of refusal of an appeal against decision of refusal, and an interested party who is dissatisfied with an appeal decision of invalidation, revocation or maintenance, may appeal to the Intellectual Property High Court.

Conclusion

‘Imagine for a moment a world in which trademarks on goods are unprotected. Counterfeiters and forgers, seeking to profit from the goodwill of merchants with skill and quality products, are unleashed to flood the marketplace with “knock-offs” and imitations. Consumer confusion as to true source results in inadvertent purchasing of low quality goods. From a merchant’s (or corporation’s) perspective, the incentive to build a reputation through sincere effort and scrupulous business practices is lost. The likely result of such a scheme is a haphazard distribution economy bordering on disorder and chaos.’

Like the Japanese patent system, the Japanese trademark system employs a first-to-file system. Under this system if one or more applications conflict with another, the application that was filed first is registered. In the unlikely event that two or more applications are filed for identical or similar marks on the same day for identical or similar goods or services, the parties involved are given the opportunity to decide which one may obtain registration. If no agreement can be reached within a specified time limit, the Director-General will draw lots.

Due to the first-to-file system and the low threshold for showing intention, many large companies in Japan have created their own trademark banks by registering many different trademarks. Many of these trademarks are never used. About one third of all registered trademarks have never been used. More than two thirds of all registered trademarks are currently not in use. The Japanese system does allow a party to demand a Trial for Cancellation of Trademark Registration (due to non-use).

An application must include the mark, designated goods or services, the applicant’s name and address, and the applicant’s area of business, and must be accompanied by a filing fee. No power of attorney is required. If the mark can be represented using ordinary characters, a sample is not required. However, if the mark is a figure, sign, three-dimensional mark, or any combination of the aforementioned, including characters, with or without colors, a sample must be submitted. A mark may consist of characters, figures, or signs. It may also be a combination of these. Assuming that it can be represented graphically, a mark may be any combination of characters, figures, or signs with colors. Three-dimensional trademarks can also be registered. Sounds and smells cannot be registered. Japanese law allows for multi-class applications. This means that the designation of more than one of the forty-two classes of goods and services is permitted on a single application.

Under Japan’s Trademark Law, trademarks can be registered even if they are not in use at the time under the first-to-file rule. However, if a trademark is not used at all within a period of three years following registration, an interested third party might file a petition for the cancellation of that trademark. Incidentally, “use” of a trademark is not limited to the displaying of the trademark directly on a product; the printing of a trademark in a pamphlet together with an image of the product, the use of the trademark in an advertisement for the goods such as in a newspaper, or the displaying of goods featuring the trademark on an Internet website all constitute “use.”

References

· Dr. Sheon Ono ‘Overview of Japanese Trademark Law’, 2nd edition

· ‘Examination Guidelines for trademark in Japan’- Japan Patent Office February 2003

· ‘Permissions and trademark guidelines’ Adobe. Retrieved on September 3, 2006.

· Pullum, Geoffrey K ‘A Guide to Proper Trademark Use’ Retrieved on December 5, 2006.

· Danny Bronski ‘MAKING YOUR MARK: TRADEMARK BASICS FOR TECHNOLOGY ENTREPRENEURS’

· Danny Bronski ‘A SENSIBLE APPROACH TO SECURING TRADEMARK PROTECTION’

· Gregory H. Guillot ‘All about trademarks’

Web Sites

· Japan External Trade Organization- http://www.jetro.go.jp/en/invest/setting_up/laws/section5/page3.html

· http://www.marcaria.com/

Trademark organizations

· INTA The International Trademark Association

· WIPO World Intellectual Property Organisation

· WIPO trademarks homepage