Intellectual Property
August 2003 VOL. 43, NO. 1
Statements or expressions of opinion or comments appearing herein are those of the editors or contributors, and not necessarily those of the association or section.
(Notice to librarians: The following issue was published in Volume 42 of this newsletter during the fiscal year ending June 30, 2002: October, No. 1.)
Contents
* "Common law" trademark protection in Japan?
* Outline of three recent Supreme Court decisions on patent law (and more)
"Common Law" trademark protection in Japan?
By Jiri M. Mestecky and Koya Uemura
A. Introduction
There is a common misperception among intellectual property attorneys and businesspeople in "common law" countries, such as the United States, that "civil law" countries, such as Japan, France, Germany and others, provide little or no protection for unregistered trademarks. It is often assumed that, in "civil law" countries, trademark protection is based solely upon registration, not use, and that in order to be afforded any trademark rights or bring a claim for trademark infringement, a party must first have its mark registered with the relevant government authority. At least in the case of Japan, the above assumption is false in that Japanese law does provide certain legal protections and rights for owners of unregistered trademarks. For example, a party using an unregistered mark can bring an unfair competition claim against a subsequent user of a confusingly similar mark. Moreover, in Japan, ownership of a well-known unregistered trademark can serve as a basis upon which to nullify the trademark registration of a confusingly similar mark. The above should be useful and welcome knowledge to U.S. and other foreign entities doing business in Japan (as well as their attorneys) who do not have their marks registered in such country. The following is a discussion of Japan's trademark system as well as legal protections under Japanese law for unregistered trademarks, many of which are analogous to "common law" trademark rights found in the U.S. and other "common law" countries.
B. Overview of trademark protection under Japanese law
1. Types of marks protected
As a signatory to the Paris Convention, WTO-TRIPs Agreement, the Trademark Law Treaty and Madrid Protocol, Japan has undertaken many measures to bring its domestic trademark law into compliance with international norms. The registration and protection of trademarks in Japan is governed by the Trademark Act (Shohyo-Ho), which covers "ordinary marks," such as trademarks, service marks, collective marks, and certification marks, as well as a separate class of marks called "defensive marks."1 Trade names are treated differently than trademarks under Japanese law, and are protected under Japan's Commercial Code (Sho-Ho) and the Unfair Competition Prevention Act (Fusei-Kyoso-Boshi-Ho).2
Under the Trademark Act, a trademark can be composed of characters, figures, signs, three-dimensional shapes or any combination thereof. In addition, color, while not protectable as a trademark in itself, can constitute a trademark if used in combination with characters, figures, and other protectable matter to distinguish the trademark owner's goods or services from those of others.3 This differs from the U.S., where a color may, in itself, constitute a valid, registrable trademark. Also unlike the U.S., non-traditional marks such as sounds and scents are not registrable as trademarks under the Japanese Trademark Act.4
2. Trademark registration
Applications for trademark registration in Japan must be filed with the Japan Patent Office. Japan has adopted the International Classification System used by the U.S. and other countries, and trademark applications may be for more than one class of goods or services. In addition, like the U.S., Japan has adopted an online filing system. Trademark registrations are valid in Japan for 10 years, and are renewable for additional 10-year periods.5 Appeals from final decisions of the Japan Patent Office are first to the Tokyo High Court and finally to Japan's Supreme Court.
Many of the factors used to determine the registrability of a mark under Japanese law are similar to those factors used under U.S. law, namely, distinctiveness, confusing similarity to other marks, and misdescriptiveness.6 The Japanese Trademark Act also provides certain exclusions and restrictions relating to the registrability of marks similar to national flags and symbols, symbols of international organizations, geographic names associated with wines and spirits, and similar marks or symbols.7 Unlike the "common law" U.S. system, in Japan, there is no requirement that a trademark actually be used in commerce prior to registration.8 However, non-use for a period of three consecutive years at any point after registration makes the registration vulnerable to cancellation.
3. Licensing
With respect to trademark licensing, Japan's Trademark Act provides for two different types of trademark licenses, specifically "exclusive" trademark licenses and "nonexclusive" trademark licenses.9 Under the Trademark Act, licensors and exclusive licensees are allowed to bring trademark infringement claims on their own against alleged infringers, while nonexclusive licensees are not. However, in order for an exclusive licensee to be able to take such legal action, the exclusive license must be registered with the Japan Patent Office.10 This is another area in which Japanese and U.S. laws differ, as in the U.S., there is no legal requirement that exclusive or nonexclusive trademark licenses be registered in order to enforce trademark rights.
4. "First-to-file" system
The aspect of Japan's trademark law primarily responsible for giving rise to the incorrect notion that unregistered trademarks are unprotectable under Japanese law is the "first-to-file" system, which Japan has in common with many European and other "civil law" countries. Under this system, in the case of parties having identical or similar marks for use with identical or similar goods, the first party to file a trademark application will be entitled to registration, regardless of when the parties actually began using their respective marks in commerce. In the case of trademark applications filed on the same date, the Japan Patent Office determines the party entitled to registration based upon mutual agreement of the parties or, if a mutual agreement cannot be reached, through a lottery system.
A basic tenet of the above "first-to-file" system is that trademark rights do not come into existence except through trademark registration. A corollary of such rule would logically seem to be that, if a mark is not registered, it is not a valid trademark and, therefore, is not legally protectable. As discussed in further detail below, however, Japan's Trademark Act and Unfair Competition Prevention Law provide owners of unregistered trademarks with certain rights and protections which, while not identical to "common law" trademark protection in the U.S., serve many of the same purposes and, in certain cases, provide many of the same remedies.
C. Trademark infringement as "unfair competition"
1. "Well-known" marks
Japan's Unfair Competition Prevention Act provides certain protections for unregistered trademarks which are somewhat analogous to "common law" trademark protection in the U.S. Under such Act, if a party uses a trademark that is the same as, or similar to, a preexisting unregistered (or registered) trademark or trade name which is "well-known" to users in Japan, and if such use causes, or is likely to cause, confusion with the goods or business of the owner of the preexisting unregistered mark, then the subsequent use of the confusingly similar mark constitutes "unfair competition."11
2. "Famous" marks
In addition to protecting "well-known" marks, the Unfair Competition Prevention Act also provides protection for unregistered (or registered) "famous" trademarks and trade names. While the exact line of demarcation between "well-known" marks and "famous" marks is not entirely clear under Japanese law, in general, "famous" marks have a higher profile and are more widely known than "well-known" marks (e.g., a mark known nationally or internationally versus a mark known only regionally or locally) and thus, are afforded a higher degree of protection. Specifically, unlike situations involving "well-known" marks, likelihood of confusion with the goods or business associated with a "famous" mark is not required. Therefore, the Unfair Competition Prevention Act's protection of "famous" marks can be used to combat trademark dilution and tarnishment. The determination of whether a mark is, in fact, "famous", is made at trial. Consequently, if a party uses a trademark which is the same as, or confusingly similar to, a trademark which a court determines to be "famous" in Japan, such use may be deemed "unfair competition" under the Unfair Competition Prevention Act.12
3. Trade dress
Unregistered (or registered) three-dimensional trademarks, such as product designs and configurations commonly referred to as "trade dress" under U.S. law, are also protected under Japan's Unfair Competition Prevention Act. Specifically, the transfer, lending, display for transfer or lending, export, or importation of goods which imitate the trade dress of another party constitute unfair competition (so-called "dead copy").13 However, trade dress which is commonly used for the same type of goods is excluded from protection. Moreover, the above trade dress protection is available only for goods which have been available for purchase for less than three years. However, additional protection for such trade dress can be obtained by registering such trade dress as a "three-dimensional" trademark under the Trademark Act.
4. Remedies
The remedies available under Japan's Unfair Competition Prevention Act for the above acts of "unfair competition" with respect to unregistered marks are analogous to remedies available in the U.S. for "common law" trademark infringement, specifically, injunctive relief and damages.14 Civil actions for violation of the Unfair Competition Prevention Act may be brought in any of Japan's District Courts. Moreover, the Japanese Customs Office can prohibit the importation of goods which infringe the registered trademarks of others.15 Although the Japanese Customs Office does not have the power to prohibit the export of goods which will infringe trademark rights in foreign countries, the Minister of Economy, Trade and Industry can issue a warning to an exporter who infringes the trademark rights of others in a foreign country, or, under certain circumstances, issue an order prohibiting the export of such goods for up to one year.16 An exporter who violates such order may be sentenced to a maximum of two years imprisonment with forced labor.17
D. Protection against infringing registrations
1. Revocation or nullification of registration
Under Japan's Trademark Act, it is possible for owners of preexisting unregistered trademarks to petition the Japan Patent Office for revocation or nullification of the registration of identical or confusingly similar trademarks.18 As discussed above, the Japan Patent Office considers a number of factors in determining whether a mark is entitled to registration, such as distinctiveness, confusing similarity to other marks, and misdescriptiveness. A party can petition the Japan Patent Office for nullification of the registration of a conflicting mark based upon any of these factors. In addition, a trademark application can be rejected, and a trademark registration annulled, if it can be shown that the applicant or registrant has a fraudulent intent to use a trademark which is the same as, or confusingly similar to, the unregistered trademark of another party which is "well-known" to users in Japan or foreign countries at the time of the conflicting trademark application.19
A classic example of such fraudulent intent is where a Japanese retailer files for registration of a trademark which is the same as, or similar to, a trademark which is widely known in the U.S. in order to force the U.S. company to enter into a sales representative agreement with the Japanese retailer when the U.S. company expands its business into Japan. In the event of a trademark registration resulting from such fraudulent intent, anyone, whether such party has an interest in the relevant trademark or not, can file for nullification of the registration with the Japan Patent Office within two months after the date of publication of the mark in the official bulletin of the Japan Patent Office,20 which, unlike publication in the U.S., signifies that the mark has been registered.21 Either before or after the expiration of this two-month term, the Japan Patent Office can nullify the fraudulent trademark registration.22 Although the issue of standing in nullification proceedings has been a point of controversy in Japan, it is clear that the owner of an unregistered mark in use in commerce can file for nullification of a subsequent trademark registration for a confusingly similar mark involving fraudulent intent.
2. Right of use
As stated above, under Japan's Trademark Act, trademark rights do not come into existence except through trademark registration. Nonetheless, the Trademark Act does provide that, under certain conditions, the owner of a preexisting unregistered mark can continue to use the unregistered trademark despite the subsequent registration of an identical or similar mark by another party. Specifically, if the unregistered trademark was used in Japan and, as a result, became "well-known" to consumers in Japan by the time of the conflicting trademark application of another party, the owner of the unregistered trademark is allowed to continue to use the unregistered trademark in commerce even if the conflicting trademark application matures into registration.23 It should be noted, however, that the owner of the unregistered trademark is allowed to continue to use the unregistered trademark only with those goods or services in connection with which the unregistered trademark was used and "well-known" at the time of trademark application of the other party. Moreover, the owner of the unregistered trademark cannot exercise the above right of use for the purpose of engaging in unfair competition.
Significantly, because the owner of an unregistered mark does not technically have any trademark rights, the above right of use under the Trademark Act does not confer upon the owner of the unregistered mark the right to bring a trademark infringement claim against the owner of a confusingly similar mark. In such case, the only recourse for the owner of the unregistered mark would be to bring a claim under the Unfair Competition Prevention Act and/or, in the event of a registered trademark, seek nullification as discussed above.
E. Conclusion
The protection of unregistered trademarks should be an issue of concern for any party doing business in the U.S. or abroad. This is especially true for those doing business in countries which are major trading partners of the U.S., such as Japan, where the intellectual property rights and corresponding dollar amounts at stake can be quite significant. Though there exists a common misperception that "civil law" countries such as Japan do not provide protection for unregistered trademarks, the reality is that Japan does provide certain legal protections for unregistered trademarks which are, in many respects, analogous to "common law" trademark rights found in the U.S. and other "common law" countries. The better educated lawyers and businesspeople in "common law" countries are concerning the protection of unregistered marks in Japan, the better equipped they will be to protect and enforce trademark rights in the world's second largest economy.
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Jiri M. Mestecky is an attorney and member of the Illinois Bar working in Osaka, Japan with the law firm of Kitahama Partners Legal Professional Corporation. He was a member of the ISBA Intellectual Property Section Council from 2001-2003. Mr. Mestecky can be contacted by e-mail at JMestecky@int.kitahama.or.jp.
Koya Uemura is a Japanese attorney ("bengoshi"), member of the New York Bar, and visiting attorney at the Chicago law firm of Masuda, Funai, Eifert & Mitchell, Ltd., who is currently on sabbatical from his firm, Oh-Ebashi Law Offices, located in Osaka, Japan. Mr. Uemura can be contacted by e-mail at kuemura@masudafunai.com.
1. A "defensive mark," under Japanese law, is a mark registered not for use with any particular goods or services, but solely for the purpose of protecting a famous mark against infringement by others. See Zentaro Kitagawa, Doing Business In Japan: Desk Edition Åò16.05 (2002).
2. Id.
3. Shohyo-Ho. Law No. 127, 1959, Art. 2-1-1.
4. Kitagawa, supra note 1.
5. Shohyo-Ho. Law No. 127, 1959, Art. 19.
6. Shohyo-Ho. Law No. 127, 1959, Arts. 3 and 4.
7. Shohyo-Ho. Law No. 127, 1959, Art. 4.
8. For purposes of interpreting Japanese law, the terms "use" and "use in commerce" are used interchangeably herein. The following acts constitute trademark "use" under Japanese law: (1) distribution, transfer or importation of goods bearing a mark; (2) advertising of a mark; and (3) affixation of a mark to goods.
9. Shohyo-Ho. Law No. 127, 1959, Arts. 30 and 31.
10. Kitagawa, supra note 1.
11. Fusei-Kyoso-Boshi-Ho. Law No. 47, 1993, Art. 2-1-1.
12. Fusei-Kyoso-Boshi-Ho. Law No. 47, 1993, Art. 2-1-2.
13. Fusei-Kyoso-Boshi-Ho. Law No. 47, 1993, Art. 2-1-3.
14. Fusei-Kyoso-Boshi-Ho. Law No. 47, 1993, Arts. 3 and 4.
15. Kanzei-Teiritsu-Ho [Customs Tariff Law]. Law No. 54, Art. 21.1-5.
16. Yushutsunyu-Torihiki-Ho [Export and Import Trading Law]. Law No. 299, Art. 4.2.
17. Yushutsunyu-Torihiki-Ho [Export and Import Trading Law]. Law No. 299, Art. 42.
18. Unfortunately, the concepts of revocation and nullification are difficult to distinguish under Japanese law. In general, the term "revocation" is used where an act can be revocable but still be valid until it is revoked. The term "nullification" is used where an act is automatically invalid regardless of whether it is revoked or not. However, in the trademark context, these two concepts are substantially similar, with the difference being mainly procedural.
19. Shohyo-Ho. Law No. 127, 1959, Arts. 4-1-19 and 4-3.
20. Shohyo-Ho. Law No. 127, 1959, Art. 43.2.
21. Shohyo-Ho. Law No. 127, 1959, Art. 18-3.
22. Shohyo-Ho. Law No. 127, 1959, Art. 46-1-1.
23. Shohyo-Ho. Law No. 127, 1959, Art. 32-1.
Outline of three recent Supreme Court decisions on patent law (and more)
By Eugene F. Friedman, Friedman & Friedman, Ltd. Chicago Copyright © Eugene F. Friedman, All Rights Reserved.
I. Utility patents for plants--J.E.M. Ag Supply Inc. v. Pioneer Hi-Bred International Inc., 60 USPQ2d 1865 (2001)
A. Related statutes
1. Plant Patent Act, 35 U.S.C. §§ 161-164
2. Plant Variety Protection Act, 7 U.S.C. §§ 2321 et seq.
B. Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980)
C. Advantages of utility patent protection under 35 U.S.C. 101
1. Prevents saving of seed to plant succeeding crops
2. Research on seeds constitutes infringement
D. Covers macro forms of life
1. MPEP § 2105
2. Hybrid corn plants
E. Covers animals
1. Mice, Elan Pharmaceuticals Inc. v. Mayo Foundation for Medical Education and Research, 64 USPQ2d 1292 (Fed.Cir. 2002)
2. Cloned human "embryos, fetuses and children," U.S. patent 6,211,429 and 64 PTCJ 81 (2002)
E. Label licensing
II. Doctrine of equivalents--Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 62 USPQ2d 1705 (2002)
A. The doctrine of equivalents is alive and at least not moribund, Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 41 USPQ2d 1865 (1997)
1. Intended to avoid the literalism of strict adherence to the claim language
2. Words may not always suffice to describe an invention
3. The patentee bears the burden of proving that a particular amendment was not made for a reason that would give rise to estopple