The most important law pertaining to trade marks in Japan is the Trade Mark Act (Law No 127 of 13 April 1959).
While the Trade Mark Act regulates requirements and process to register trade marks and the scope of protection for registered trade marks, the other important law governing trade marks in Japan is the Unfair Competition Prevention Act, which provides protection for trade marks not registered but have acquired certain degree of goodwill and fame through actual use.
Trade mark rights and rights under the Unfair Competition Prevention Act are governed by these statutory laws and not by case law (Unlike the USA and UK, Japan is a civil law country).
Japan is a party to the following conventions, treaties and agreements:
In Japan, “trade marks”, “collective trade marks”, “regional collective trade marks” and “defensive marks” can be registered under the Trade Mark Act. Trade marks can be registered in relation to services as well as goods.
Collective Trade Marks
Collective trade marks can be registered for trade marks that are used by members of business co-operatives and associations. Regional collective trade marks can be registered for trade marks composed solely of the region’s name and the generic name of the particular goods or services that are used by members of business co-operatives and associations. Defensive marks can extend the protection of a famous mark to include the goods and services for which the applicant does not intend to use the mark.
In Japan, certification marks are protected as ordinary trade marks and we do not have a separate system to register a mark as a certification mark.
Geographic indicators are not protected as trade marks under the Trade Mark Act.Rather, geographic indications (GI) are protected under the Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs and by registration under the control of the Ministry of Agriculture, Forestry and Fisheries.
Trade mark protection is available not only for word marks, but also for design (figurative) marks. Further, sound trade marks, colour trade marks, motion trade marks and hologram trade marks and position trade marks can be protected. If a shape, a colour, or a sound that cannot be avoided for the product in question to function, a trade mark solely composed of such feature cannot be registered.
Product marks, such as the shape of a product, its container or packaging, can be protected by registration as a three-dimensional trade mark or under the Unfair Competition Prevention Act. However, a trade dress such as a basic shape of a container of a product (without any distinctive word mark or sign on it) is often deemed indistinctive and cannot be registered unless acquisition of a secondary meaning is proven.
Regarding use of surnames, it should be noted that a common surname is deemed indistinctive and not protectable as a trade mark under the Trademark Act except where such surname is famous as one’s trade mark.
In Japan, there are specific marks that are protected by statute in a way differently than an ordinary trade mark, namely registered trade marks under the Trade Mark Act and unregistered but well-known trade marks under the Unfair Competition Prevention Law.
There is no special legislation to provide a special protection for the Olympic related marks such as one known as “association rights” in some countries. Still, the Unfair Competition Prevention Act has a provision that use of any mark identical or similar to a mark which is “famous” (which is a higher level of a well-known status) would constitute an act of unfair competition, which is subject to damages and injunctive relief, even if there is no likelihood of confusion.
For example, since the term "Olympic" and the Olympic symbol are undeniably famous in Japan, use of any mark identical or similar would likely constitute a violation of the above provision under the Unfair Competition Prevention Act, regardless of whether there is any likelihood of confusion or not. As such, while there is no special statute to protect Olympic-related marks, they are actually strongly protected in Japan.
Marks that are famous outside Japan are not directly protected under Japanese law. However, the Japanese Trade Mark Act provides that an application for registration shall be rejected or a registration of a trade mark shall be invalidated if it is identical with, or similar to, a trade mark that is well known among consumers outside Japan as indicating goods or services pertaining to a business of another person and if such a trade mark is used for unfair purposes (ie, gaining unfair profits, causing damage to other persons, or any other unfair purposes), even if such trade mark is not used or known in Japan.
The duration of a trade mark right expires after ten years from the date of registration.
There is no provision for exhaustion of trade mark rights under the Japanese Trade Mark Act. It is generally considered that, in accordance with the precedents, once goods on which the registered trade mark is affixed by the legitimate trade mark owner are put on the market, subsequent distribution of the same goods by third parties is not deemed to constitute trade mark infringement because, as long as the quality of the goods is under the control of the trade mark owner, the trade mark’s essential functions of:
Although it is not mandatory, it is encouraged to denote that a mark is registered in Japan. No symbol is provided in Japanese Trade Mark Act, but indications such as ® and “a registered trade mark” are widely used for registered trade marks. While there is no concept of "common law rights" in Japan, it is customary practice to use a TM legend if the trade mark is not registered but used as a trade mark.
A trade mark can be assigned freely before and after registration except for those owned by the State, a local government, an agency thereof. Trade Marks owned by a non-profit organisation undertaking a business for public interest and regional collective trade marks may be assigned only if the assignment satisfies certain requirements under the law..
To assign a registered trade mark, it is mandatory to record the assignment on the Trademark Register for such assignment to become legally effective, except for assignment of a registered trade mark by way of succession (eg, by merger of the original trade mark owner by a third party).
For recordation of an assignment of a registered trade mark, the JPO requires:
Usually, the JPO does not require certification of signatures on the assignment deed or the POA.
Under the Japanese law, in principle, a trade mark owner can freely licence use of its trade mark for others by way of a contact between the trade mark owner (the licensor) and the licensee. There is no need to obtain an approval by the Japan Patent Office to grant a licence. License can be exclusive and/or non-exclusive. Licence can be granted orally and tacitly and there is no legal requirement that a licence must be in writing.
That said, as a practical matter, it is recommended that the licence is granted in writing to clearly stipulate rights and obligations of the licensor and the licensee. It is possible to licence use of an unregistered trade mark for others. However, licensing of unregistered trade mark would not provide legal protection available for a registered trade mark and the position of the licensee will be unstable and not protected vis-à-vis third parties.
While recordation of the licence at the JPO is not mandatory, it is possible to record the licence with the JPO. In this connection, it should be noted that there are only two types of licence that can be recorded at the JPO: an exclusive licence (senyo shiyoken) and a non-exclusive licence (tsujo shiyoken) (Articles 30 and 31 of the Trade Marks Act). An exclusive licence under Article 30 of the Japanese Trade Mark Act becomes valid only if such licence is recorded with the JPO.
For a non-exclusive licence (tsujo shiyoken) under Article 31 of the Trade Marks Act, recordation of the license at the JPO is optional and not mandatory. The benefit of recording a non-exclusive licence is for the licensee. The licensee who recorded its non-exclusive licence with the JPO will be able to assert its license against a third party who subsequently acquires the trademark right pertaining to the licensed trademark from the original licensor.
To record an exclusive or non-exclusive licence, the deed of grant of licence signed by the trademark owner and the POA from the licensee is required.
There is no legal restriction that a licence may not be perpetual under the Japanese law.
Assignment of a registered trade mark must be recorded at the JPO unless it is an assignment by way of a general succession.
The risk during the gap between the assignment or licence taking place and its registration is that the trade mark might be assigned again to another party if the assignment is not timely recorded. Since the assignment becomes valid and effective only upon recordation, if the trade mark owner X sells the trade mark to the assignee Y and then X subsequently sells the same trade mark to another entity Z and the assignee Z records the second assignment with the JPO before the assignee Y records the first assignment with the JPO, legally, the assignee Z will be the valid assignee.
As discussed, an assignment by way of a general succession becomes valid when such succession takes place. However, timely recordation of an assignment by way of general succession is still highly recommended to keep the Trademark Register in order and up-to-date.
For a license, as discussed in 2.2 Licensing Requirements or Restrictions, licence can be effective by way of a contract between the trade mark owner and the licensee and there is no need to record the licence for it to be binding upon the parties, except for an exclusive licence under Article 30 of the Japanese Trade Mark Act.
There are no requirements other than those already discussed.
An application can be assigned while it is pending examination. It is possible to grant a licence to use a trade mark under a pending application if the trade mark applicant and the licensee agree to such contractual terms. However, it will only be a contractual relationship between the trade mark applicant and the licensee where the licensee can assert the licence only vis-a-vis the licensor.
Under the Japanese Law, there is no distinction between applications based on use and applications based on an intent to use. Therefore, whether or not the applied mark is in actual use or not does not affect assigning or licensing applications.
A trade mark can be subject to pledge and assigned by way of security. In the event of a compulsory execution, a trade mark may be subject to seizure and be auctioned as part of the property of the obligator.
A trade mark registration must be obtained to have trade mark rights in Japan. Trade mark rights cannot be acquired merely by using the mark.
An indistinctive mark, includes the following:
A product configuration is often deemed indistinctive and is refused registration. An indistinctive mark as listed above can be registered if the trade mark applicant successfully proves that it has acquired a secondary meaning as the result of continuous and extensive use.
The Japan Patent Office maintains the Trade mark Register.
There is only one trade mark register in Japan and we do not have a supplementary register for descriptive marks.
It is normal practice to search for prior trade marks before applying to register a mark in Japan. The search is usually conducted using the JPO database. No trade mark right will arise unless it is registered, therefore the search does not generally cover marks in use but not applied for or registered.
The term of a trade mark registration is ten years. A renewal application must be filed during the six-months prior to the expiration of a trade mark right. Within the six months following the expiration date (the grace period), the owner may file a renewal application by paying double the official fees as a bailout measure.
If the trade mark owner has justifiable reasons (such as natural disasters) for having been unable to file an application for renewal within the grace period, it may file the application for renewal within two months from the date on which such reason to justify the inability of the trade mark owner to file the renewal application ceases to exist, but no later than six months after the expiration of the grace period.
In Japan, once a trade mark is registered, it is not possible to update or refresh the trade mark as registered, including a design mark.
Any person who desires to register a trade mark shall submit an application to the Commissioner of the JPO accompanied by the required documents setting for the applicant’s name and address, the trade mark to be registered; and the designated goods and/or services.
If priority is claimed under the Paris Convention, the applicant must submit a priority certificate within three months from the filing date. No other documents (a specimen of use, a power of attorney) are required.
Any entities with the legal capacity to hold rights can register a trade mark. Although such entities include individuals, legal entities and trade bodies, unincorporated associations (eg, a sports club or residents’ association) may not register a trade mark.
For types of registrable trade marks, see 1.2 Types of Trade Marks. Multi-class applications are accepted under the Japanese trade mark system.
There is no requirement that a trade mark applicant use its mark in commerce before the registration is issued.
Japan does not allow the registration of series marks.
The JPO refuses the registration of trade marks due to the existence of prior rights,namely:
In Japan, the JPO does not accept a “consent letter” or “co-existence agreement” as a measure to allow two similar trade marks to co-exist on the Trademark Register with the exception that where one of the owners of the senior and junior trade marks is under the corporate ownership and/or control of the other.
Instead of a consent letter, one way to circumvent the refusal is to use an “assign-back arrangement” whereby an applicant will temporarily assign ownership of the application to the cited prior trade mark owner. As the applicant’s mark and the prior mark would then be (temporarily) owned by the same entity (ie, the prior trade mark owner), the relevant grounds for refusal would be resolved and the JPO would grant registration to the applicant’s mark. Once the registration is granted, the prior trade mark owner assigns the client’s application back to the applicant.
Any person can file a document referred to as “Information Statement” containing useful information for the examination in case that they believe an applied-for trade mark does not meet the substantive requirements for registration such as existence of an earlier registered trade mark that they believe should be cited as a bar to registration of the trade mark application.
In addition, any person can file an opposition to a registration within two months from the date of publication of the trade mark.
To file an Information Statement or an Opposition, there is no need to show any legal standing or commercial interest to attack the trade mark in question.
The applicant can make amendments relating to its application when the case is pending examination, examination on opposition to registration, trial or retrial. It is very common for the applicant to amend the description of the goods and services at the request of the JPO examiner. Amendment of the trade mark itself is usually not permitted.
The applicant is permitted to divide a trade mark application. The division of the application may be made provided that the application is pending in examination, trial or retrial, or if a suit against a trial decision to refuse the application is pending in court.
If a trade mark application includes incorrect information such as typos in the applicant name and descriptions of the goods and services, the JPO issues an office action requesting the applicant to correct the information. When the typos are very minor, the JPO tends to correct them by its own authority.
The Japan Patent Office examines all the trade mark applications and they can be refused for both absolute grounds (indistinctiveness) and relative grounds (earlier rights – see 4.4 Consideration of Prior Rights in Registration). Misleading trade marks and applications filed for bad faith as well as applications for marks liable to contravene public order and moral are also refused.
If the JPO Examiner finds any ground for refusal, the applicant is given an opportunity to file a counter argument against the Examiner’s view. If the trade mark is refused on absolute ground for refusal, there is usually an attempt to argue that the trade mark in question is sufficiently distinctive. If there is not room for such argument, it would be argued that that the trade mark is famous and has acquired a secondary meaning through continuous and extensive use in Japan.
A refusal by the initial examiner of the JPO may be appealed within three months from the date of refusal. The Appeal must be filed to the JPO and examination of an appeal against a decision of refusal is examined by three or five appeal examiners of the JPO.
If the appeal examiners make a decision to refuse the application, the applicant may make a further appeal to the Intellectual Property High Court (IP High Court) within 30 days.
Japan participates in the Madrid System and adopts a two-part payment of individual fees with the second part of the individual fees needing to be paid directly to the International Bureau after the decision of registration is made by the JPO.
Japan adopts a “post registration” opposition system and an opposition must be filed during two months after the publication of the trade mark after it is approved, registered and published. The opposition deadline is not extendable.
An opposition may be filed based on the following grounds:
Dilution is not explicitly recognised as a ground to oppose a trade mark registration. In addition, dilution is not explicitly recognised as a ground to prevent use of a mark in a lawsuit.
Any person can file an opposition. If the opponent if an entity residing outside Japan, representation by a domestic attorney is necessary to file an opposition at the JPO. The average cost for opposing a registration in one class is about USD3,000 to USD4,000.
An opposition to a trade mark registration can be filed with the JPO within two months of the publication. Once a bare-bones notice of opposition is filed, the opponent can supplement detailed grounds and supporting evidence within 30 days (if resident in Japan) or within 90 days (if not resident in Japan).
In principle, the examination of the opposition is conducted on the basis of documents
Trade mark opposition proceedings in Japan are quite different from those in the USA. In Japan, a trade mark opposition is in essence a re-examination of the trade mark application and the JPO will make a decision on its own as to whether the initial examination was correct. In trade mark opposition procedures, there is no proceeding for discovery or any other process to oblige parties to collect and submit evidence surrounding the application or the opposition.
If the trial examiners render a decision to maintain the trade mark registration and dismisses the opposition, the decision cannot be appealed. However, if the opponent is dissatisfied with the dismissal, it is possible for it to file an invalidation action for the same grounds. If the trial examiners render a rescission decision and if the owner of trade mark is dissatisfied with the decision, it may appeal to the IP High Court within 30 days from the date on which a certified copy of the decision is served.
It usually takes about eight months from the time of filing an appeal to the decision by the court. The JPO may extend the above time period for a foreign resident.
An invalidation action based on the absolute or relative grounds for refusal must be filed within five years from the date of registration of the trade mark in question, except for cases where trade marks are filed in bad faith or for the purposes of unfair competition.
The time period of five years also applies for cancellation actions due to misuse of registered trade mark and against trade marks registered by the trade mark owner’s former agent or representative without authorisation.
Cancellation Action Based on Non-use
Any person may file a request for a trial for cancellation of a trade mark where the trade mark has not been used for three years or longer. Where such request is filed, the burden of proof of use is on the owner.
Cancellation Action Due to Misuse
Any person may file a request for a trial for cancellation of a trade mark where the use of the trade mark misleads the consumers as to the nature of the goods/services or causes confusion with the goods/services of another person.
Cancellation Action against a Trade Mark Registered without Authorisation
A person who has the right pertaining to the trade mark in a foreign member country of the Paris Convention, WTO or Trademark Law Treaty may file a request for a trial for cancellation of a trade mark where the application for trade mark registration was filed by their former agent or representative without their authorisation.
A person who has a legal interest in invalidating the trade mark at issue may appeal for invalidation of the trade mark based on absolute grounds, relative grounds and other grounds set forth under the Trade Mark Act.
Any person may request a trial for a cancellation action, except for a cancellation action based on Article 53-2 of the Trade Mark Act (a registration obtained by an agent or representative without authorisation), which must be filed by the owner of the right pertaining to the trade mark in the foreign member country of the Paris Convention, WTO or Trademark Law Treaty.
An invalidation action needs to be filed by a person who has a legal interest in invalidating the trade mark at issue, such as an applicant who received an office action from the JPO citing the trade mark at issue as an obstacle against their application.
Cancellation actions and invalidations must be filed with the JPO.
Cancellation actions based on non-use and invalidation can be filed in a partial manner specifying certain designated goods/services. It is not permitted to seek partial cancellation in a cancellation action for misuse or in a cancellation action for unauthorised registration by an agent or representative.
The owner of the trade mark cannot make amendments in cancellation/invalidation proceedings if the amendments alter the gist and/or the scope of the original application for revocation/invalidation. For example, it is not permitted to add cited trade marks or expand the scope of the goods and services attacked in the cancellation action/invalidation actions. Filing of additional evidence may be disallowed if such evidence involves a new legal argument and necessitates a defence by the defending party that was not expected when the action was originally filed.
Revocation/cancellation of the trade mark registration is separate from the infringement procedure. Nevertheless, the court may dismiss the claim of infringement if it believes that the trade mark registration should be revoked or cancelled. In such an event in an infringement case, the registration of the trade mark at issue will still remain until it is revoked or cancelled in a separate cancellation/revocation procedure at the JPO.
There is no limitation of period for injunction claim as long as the infringement continues. Conversely, due to statute of limitation under the Civil Code, a damage claim must be brought within three years after the trade mark owner become aware of the infringement or, even if the trade mark owner has not aware of the infringement, within 20 years after the infringement.
The trade mark owner may claim damages or injunction (including a preliminary injunction) against the infringement of a trade mark right in the infringement litigation. Under the Japanese Trade Mark Act, a trade mark right comes into existence upon registration at the JPO (Article 19, paragraph 1 of the Trade Mark Act). Therefore, the owner of an unregistered trade mark cannot enjoy protections against infringement of a trade mark right under the Trade Mark Act, although unregistered marks can be protected under the UCPA if the mark is well known or famous as an indicator of origin and satisfies other requirements of protection under the UCPA.
In addition, if the infringing goods are imported, the owner of a registered and/or well-known/famous trade mark may file an import suspension application with the Customs Office. Further, the trade mark owner may use ADR proceedings, such as mediation or arbitration, if the other party agrees to it. These actions are available to the claim under the UCPA.
Trade mark infringement will be established only when a mark at issue is used as indicator of origin. Even if any use of a mark cause dilution of a registered trade mark, if it does not serve as a source indicator, it will not be considered as trade mark infringement.
As to cybersquatting, if a domain name that is similar or identical to the registered trade mark is actually used for a certain website, while it is not explicitly provided under the Trade Mark Act, according to the precedents, it could be considered as trade mark infringement as well as an unfair competition under Article 2.1.1 or Article 2.1.2 of the UCPA if the trade mark is well-known or famous. In addition, registration or use of a domain name that is similar or identical to a third party’s trade mark for the purpose of illicit gain or harm to the trade mark owner constitute an unfair competition under Article 2.1.19 of the UCPA.
The plaintiff (ie, trade mark owner) and the defendant (ie, the alleged infringer) are the necessary parties to a trade mark infringement litigation. A registered exclusive licensee is entitled to file an action based on infringement of the registered exclusive licence seeking the same remedies as the trade mark owner. In this regard, there are arguments over whether non-registered exclusive licensees or non-exclusive licensees can initiate an action for infringement.
With regard to injunctions, it is generally considered that neither a non-registered exclusive licensee nor a non-exclusive licensee is entitled to claim for an injunction. With respect to a claim for damages, a non-registered exclusive licensee may claim for damages, although a non-exclusive licensee is still not permitted to claim for damages.
There is no legal system that allows for representative or collective actions for trade mark proceedings, provided that if the subject matter of the suits is common to two or more persons or is based on the same factual or statutory cause, these persons may sue or be sued as co-parties.
There are no prerequisites or remedies. The trade mark right comes into existence when the trade mark is registered.
Conversely, if the claim made by the trade mark owner is so unreasonable and groundless, then such claim could constitute a tort under the Civil Code. Further, if the trade mark owner claim trade mark infringement against parallel imported goods without any legal ground, such act may violate the Japanese competition law.
A complaint must identify the names and addresses of the plaintiff and defendant (and plaintiff’s attorneys’ names and addresses, if appointed), the gist of the demand and the grounds for the demand. In particular, the infringing goods or services and the infringing acts must be specified in detail in the complaint. To identify those facts, a trade mark owner is expected to conduct a sufficiently detailed investigation and analysis on the case prior to initiating the lawsuit.
There are no special provisions for lawsuits in trade mark proceedings that differ from non-IP proceedings.
Supplementing pleadings with additional arguments are acceptable. The court examines the case through periodic hearing procedures (generally once a month) and each party is allowed to add its legal/factual arguments or evidence in the course of those procedures. The plaintiff may even expand or amend the claim or statement of claim until oral argument is concluded.
However, the court may limit such additional arguments or evidence if it considers such additional argument or evidence would substantially delay the court proceedings.
Further Lawsuits on the Same Subject
Once a lawsuit is initiated, the defendant cannot initiate a lawsuit for the same subject and if the defendant files such a lawsuit, it will be dismissed by the court. Provided that the litigation initiated by the plaintiff itself is considered to constitute a tort (see 9.6 Rights and Remedies for the Prevailing Defendant), the defendant may initiate a lawsuit against the plaintiff seeking damages arising out of the infringement litigation.
The trade mark owner may file a lawsuit before the court that has jurisdiction over the location of the infringing act or defendant. In addition, with respect to a claim for damages, the court that has jurisdiction over the location of the plaintiff can hear the case. Further, for a trade mark infringement case, the plaintiff may select the Tokyo District Court as its option if a District Court is located within the jurisdictional district of any of the High Courts in the east part of Japan (ie, the Tokyo High Court, the Nagoya High Court, the Sendai High Court or the Sapporo High Court) and the plaintiff may select the Osaka District Court as its option if a District Court is located within the jurisdictional district of any of the High Courts in the west part of Japan (ie, the Osaka High Court, the Hiroshima High Court, the Fukuoka High Court or the Takamatsu High Court). However, the court can transfer the case to another court with jurisdiction when it finds it necessary in order to avoid undue delay of the procedure or ensure equity between the parties.
Costs that typically arise before filing a lawsuit would be for investigating the accused products or services, sending warning letters and for preparing for the litigation.
In Japan, a party may select at its discretion whether they will be represented by a lawyer. However, in practice, it is common for lawyers to represent the parties in trade mark litigation matters. A patent attorney (benrishi), which is a different profession from a lawyer (bengoshi), can also represent a party in trade mark litigation matters under certain conditions.
Once the decision of the JPO becomes final, the effect caused by the decision is binding on any persons and thus the decision could legally affect the infringement actions in case the JPO decision is to invalidate or cancel the trade mark registration that is the basis of the infringement action. Until the decision becomes final, the decision will not be legally binding and technically have no effect on infringement actions, provided that it might affect the perception of the court in practice.
The alleged infringer can initiate a lawsuit for declaratory judgment to confirm that there is no trade mark infringement and, therefore, the trade mark owner has no right to seek an injunction. When the trade mark owner initiates a lawsuit for trade mark infringement, the defendant can still initiate a lawsuit for declaratory judgment for the same trade mark but the claim will be dismissed due to lack of benefit of suit.
A potential defendant can file a request for a trade mark invalidation trial before the JPO and/or initiate a lawsuit for declaratory judgment to confirm the absence of the right to demand an injunction, etc. There is no need for a potential opponent to lodge a protective brief to take these actions. It should be noted that if a trade mark owner starts the proceeding for a preliminary injunction under the Civil Preservation Act, the respondent/a potential defendant in the formal litigation is not entitled to require a bond to be posted by the trade mark owner under the Civil Preservation Act, while a court usually orders the owner to deposit a certain amount of money as a security when issuing an interim injunction order.
Counterfeit mark is not explicitly recognised by the Trade Mark Act and thus there is no special procedure, remedies, or statutes addressing counterfeit marks, provided that the criminal sanction for a trade mark infringement by use of identical mark is heavier than infringement by use of a similar mark.
There are no provisions specifically applicable to trial and settlement for trade mark rights proceedings. However, in practice, the trial will be divided into two parts. The court firstly focuses on determining whether the infringement of the trade mark rights is established. Then, only after the court tentatively concludes the establishment of the infringement will the court assess the damages incurred by the plaintiff.
The case is determined solely by a legal judge. The Japanese legal system has neither technical judges nor jury trials for IP cases. In the Tokyo District Court and the Osaka District Court, there are special divisions for IP matters (four divisions at the Tokyo District Court and two divisions at the Osaka District Court) where judges who are experienced in IP matters will hear and decide the cases. The judges in these courts and the IP High Court rarely have technical backgrounds.
Technical advisers may be appointed to support the judge for advanced or complicated technical issues and to conduct research of highly advanced issues on the judge's behalf. The parties cannot influence who will judge the case, except to request to avoid a certain judge if they have reason to believe they cannot be impartial due to a relationship with the other party (eg, a relative).
It is necessary to establish that the defendant has used the sign as a trade mark; that is, as a source indicator of origin for the designated goods and/or services. If the defendant successfully proves that the sign has not been used as a source indicator, trade mark infringement will not be established.
The plaintiff must prove the existence of the trade mark registration, the similarity between the registered trade mark and the mark at issue, and the similarity between the designated goods/services and the goods/services at issue. The distinctiveness of the registered mark is presumed and it is the defendant who has the burden of proving lack of distinctiveness as their defence. The similarity of the marks is determined, taking into account the similarity in terms of appearance, connotation and pronunciation between the marks, as well as the likelihood of confusion.
Trade mark infringement is established only where the mark is used as an indicator of origin (ie, “trade mark use”). Even if there cause dilution by blurring or tarnishment, use of a mark identical or similar to a trade mark will not be considered a trade mark infringement so long as the mark does not serve as an indicator of origin. Cybersquatting could constitute a trade mark infringement and/or unfair competition (see 7.2 Legal Grounds for Filing Infringement Lawsuits).
Negligence of the defendant who infringes a trade mark right is presumed under the Trade Mark Act. Presumption of the damages are also available for a trade mark owner (see 9.1 Injunctive Remedies)
If the defendant has used a mark and the mark has become famous prior to the registration of the trade mark at issue, the defendant can claim "prior use" as a defence. Furthermore, the defendant may claim that a trade mark is a generic term or that the use thereof is only descriptive (ie, indicating the contents, quality, origin, shape, or materials) and/or that the defendant’s mark is not being used as an indicator of origin (ie, a "trade mark use"). In addition, the defendant may also claim abuse of trade mark rights if there is any ground for invalidation or cancellation of the trade mark registration.
Non-use of a trade mark cannot be directly claimed as a defence. Nevertheless, non-use of a trade mark for a continuous period of three years or more could be grounds for cancellation of the trade mark registration and therefore the defendant may claim abuse of rights on the ground of non-use for such period.
As to the statute of limitations, the trade mark owner cannot claim damages for an infringement when more than three years have passed from the date on which the trade mark owner become aware of the infringement and the identity of the infringer that caused the damage, and there is an overall limit of ten years from the act of infringement.
Although there is no discovery procedure in Japan, the Trade Mark Act provides that a court can order a party to produce documents upon the other party’s request for the purpose of proving infringement activities or calculating damages, provided that this shall not apply where there are reasonable grounds for the alleged infringer possessing the documents to refuse production.
Expert opinions and surveys can be used as substantive evidence for certain legal issues, such as the likelihood of confusion, secondary meaning or genericness. However, given that the court may consider such evidence to be somehow partial or biased, this evidence is unlikely to be decisive and the court will determine the case taking into account all other evidence as well.
Trade mark infringement can constitute a criminal offence; however, there is no such administrative offence under Japanese law. The criminal offence of trade mark infringement by way of using a mark identical to the registered trade mark for the designated goods or services carries a penalty of up to ten years' imprisonment and a fine of up to JPY10 million for those infringing upon the trade mark. Using a mark similar to the registered trade mark for the designated goods or services — or using a mark identical or similar to the registered trade mark for goods or services similar to the designated goods or services — carries a penalty of up to five years’ imprisonment and a fine of up to JPY5 million.
For filing litigation, a stamp fee will be incurred, the amount of which will vary depending on the amount of claim of the case. The other costs are mainly for attorneys' fees and are dependent on the case and the individual attorney’s fee structure. Generally speaking, the costs for trade mark infringement cases would be lower than those for trade mark cases.
As an injunctive relief, the court may order the defendant to cease the infringing action. In addition, the court may order the defendant to take measures necessary to restore the business credibility of the trade mark owner, such as publication of an apology. The trade mark owner can also seek disposal of the infringing goods.
The judge has discretion to determine the appropriate remedies or amount of damages provided that such discretion is only within the scope of claims sought by the plaintiff (ie, if the plaintiff does not seek an injunctive relief, the judge cannot order such relief)
Injunctive relief is available where infringement continues, or it is likely to be resumed even if it is once ceased. Preliminary injunctions are available under the Civil Preservation Act in cases where injunctions are necessary for a rights owner to avoid any substantial detriment or imminent danger with respect to the trade mark rights in dispute. A defendant can oppose a preliminary injunction on the ground that there is no such necessity or infringement has been already ceased.
Damages or an account of profit is available as a remedy for trade mark infringement under the Civil Code. Attorneys' fees can be recovered as part of the damages, although the recovery thereof is very limited; in practice, around 10% of the total amount of damages is admitted as the amount of reasonable attorneys' fees by the court. A trade mark owner can only seek compensatory damages.
Claims for enhanced damages, eg, punitive damages, are not eligible, even in cases of wilful infringement. The Trade Mark Act provides for certain presumptions of the damages that are to be calculated based on the profit from the infringement or the assumed royalties. The judge has discretion to determine the appropriate remedies or amount of damages provided that such discretion is only within the scope of claims sought by the plaintiff (ie, if the plaintiff does not seek an injunctive relief, the judge cannot order such relief) and within the amount of the claim made by the plaintiff. In addition, a trade mark owner may request banks to freeze the bank accounts that infringers have used to receive prices for counterfeit goods.
The judge has discretion to determine the appropriate amount of damages provided that such discretion is only within the scope of claims sought by the plaintiff and within the amount of the claim made by the plaintiff.
Damages are awarded once the judge admits the infringement and finds the infringement caused any detriment effect on the plaintiff’s business.
As a part of injunctive relief, the trade mark owner can also seek disposal of the infringing goods.
In general, court costs are borne by the losing party. However, the proportion of the responsibility for the court costs is left up to the court’s discretion and the court may allocate the responsibility of the court costs to the prevailing party in proportion to the part of its claim not accepted by the court.
The court costs do not include attorneys' fees and thus, generally speaking, each party must bear their own attorney’s fee by itself. The plaintiff may seek compensation for their attorney’s fees as part of the damages but the recovery rate is left up to the court’s discretion and it is usually quite limited, even if the plaintiff wins the case (in practice approximately 10% of the total amount of damages admitted by the court).
It is not eligible for a trade mark owner to seek relief without notice to the defendant. It is not mandatory under the Trade Mark Act or Civil Provisional Remedies Act, but in practice the application of preliminary injunction will be served to the defendant and hearing is held with attendance of the defendant.
If the defendant prevails, the court can order the plaintiff to pay the court costs (such as transportation fees to attend court hearings and daily allowances for witnesses), provided that the court costs do not include the defendant’s attorneys’ fees or other costs incurred by the defendant in the course of the procedure. There is no right or remedy for a prevailing defendant to recover their own costs.
The prevailing defendant may seek damages arising out of the infringement litigation, including their attorneys’ fees, if the litigation itself is considered to constitute a tort on the grounds that:
Japan Customs seizes counterfeit goods upon request from the owner of a registered and/or well-known/famous trade mark, or at Customs' discretion.
Parallel imports will not be subject to Customs seizure if they are considered to be the parallel importation of genuine goods. According to the precedents, parallel imports will not be considered as infringement if:
The trade mark owner submits a written request for seizure of certain counterfeit goods to Japan Customs and Japan Customs will seize those goods. Meanwhile, if Japan Customs finds any suspicious goods by itself, it will contact the trade mark owner to confirm if the goods are counterfeit goods and, upon receiving confirmation from the trade mark owner, seize the goods at its discretion.
There are no different remedies for different types of trade marks.
The judge usually takes the initiative on settlement negotiations unless the parties clearly refuse to settle the case. In no event will the defendant be obliged to settle the case. Generally speaking, the court prefers to resolve cases via settlements rather than judgments.
The judge may disclose or imply to the parties (or only one party) their unofficial opinion on the case to facilitate the settlement negotiations. The judge will cease settlement negotiations if one party decides that they require a court decision rather than a settlement.
ADR is not a common way to settle trade mark cases in Japan. However, ADR, such as mediation or arbitration, is available and the Japan Intellectual Property Arbitration Centre (JIPAC) is the sole ADR organisation that provides for dispute resolution in the field of IP.
Even if there are any pending parallel revocation or infringement proceedings, the current proceedings will not normally be stayed and the court will separately and independently make the judgment for the case. The court can even dismiss the claim for infringement on the grounds that the trade mark at issue is invalid, without the need to conduct a revocation proceeding, which means that it is possible for there to be a contradiction between two cases on the same subject matter. However, in practice, the High Court, as the Court of Second Instance, will make consistent judgments with those cases so that any such contradiction in the first instance will be resolved.
The losing party may appeal to the second instance such as IP High Court within two weeks from the date on which a written judgement is served to the losing party. The timeframe for the appeal is dependent on the case in question, however, according to the report published by the IP High Court, the current average period for trial of IP-related cases in the Appeal Court is less than eight months.
Generally speaking, there is no special provision concerning the appellate procedure for trade mark proceedings.
It should be noted, however, that the appeal court for a trade mark case will be the IP High Court, which specialises in IP matters, if the District Court of First Instance is located within the jurisdictional district of the Tokyo High Courts.
The High Court, as the Court of Second Instance, conducts not only a legal review of the facts of the case, but also a full review of the decisions made by District Courts in the first instance. The High Court can also conduct factual findings on its own. A party may submit additional legal arguments, facts or evidence to the Appeal Court, unless an additional claim is considered to be causing delay to the procedure due to that party’s fault. The Supreme Court, as the Court of Third Instance, only reviews the legal issues of the case.
Technically speaking, if a trade mark is so creative as to be considered as “copyrighted work” under the Copyright Act (such as a unique device mark), it can be protected by copyright; however, in practice, a trade mark is often considered insufficiently creative, especially for a word mark.
Under the Japanese Copyright Law, author of a copyrighted work has the right to be identified and named as the author of his/her work (ie, right of attribution) as a moral right and, even if the surname of author is registered as trade mark by a third party, this moral right does not conflict with the trade mark rights as indicating his/her own name in a common manner is not be considered trade mark infringement under Article 26.1.1 of the Trade Mark Act. In the first place, a mark composed solely for a common surname may not be registered as trade mark as it is regarded as an indistinctive mark under Article 3 of the Trade Mark Act.
Copyrights or moral rights does not limit the scope of trade mark rights under the Japanese law. Trade mark owner can execute its trade mark right regardless of the copyright vested in a mark and vice versa.
A trade mark can be protected as a design patent if its design (typically its shape) satisfies requisites such as novelty and creative difficulty, and is registered as a design patent under the Design Act. A trade dress could be protected under the Unfair Competition Prevention Act if it is well known or famous as an indicator of origin of goods or service
Under the Japanese law, rights of publicity or personality is protected primarily by one’s moral right to their name and their likeness. In addition, one may seek protection of their name and/or likeliness by registering it a trademark. If their name and/or likeliness is well-known or famous, in theory, protection under the Unfair Competition Prevention Act may also be available.
In relation to trade mark protection, it should be noted that no one can register a trademark incorporating another’s name or likeliness. Therefore, any unauthorised trade mark application for a celebrity’s name would be refused if it is identical to the celebrity’s name.
Under Article 2.1.1 of UCPA, regardless of registration of trade mark, if a mark is well-known as an indicator of origin of goods or services among the customers, using of a mark that is identical or similar to the well-known mark and causing a likelihood of confusion among the customer constitutes an act of unfair competition. Further, under Article 2.1.2 of UCPA, if a mark becomes famous (ie, more than well-known) as an indicator of origin of goods or services, using of a mark that is identical or similar to the famous mark constitutes an act of unfair competition regardless of a likelihood of confusion. In addition, with respect to a domain name, registration or use of a domain name that is similar or identical to a third party’s trade mark for the purpose of illicit gain or harm to the trade mark owner constitute an unfair competition under Article 2.1.19 of UCPA.
Under the Trade Mark Act, non-commercial use of trade mark does not constitute trade mark infringement and thus, even if infringing goods are imported, the Customs may not be able to suspend those infringing goods if the importer claims that those products are personally imported for non-commercial use (so-called “private import”) even though those goods are commercially distributed to Japanese consumers from abroad. Given that the government decided to consider an amendment of Trade Mark Act in 2021 to restrict such private import.
Under the Act on the Limitation of Liability for Internet Service Providers, if an internet service provider who provides online platform services and its user distributes any information that constitutes a trade mark infringement on the platform services, upon request of the trade mark owner, the service provider are required to disclose identity information of such infringing user to the trade mark owner, and may remove such infringing information on certain conditions without consent of the infringing user. Conversely, if the service provider leaves the infringing information without any corrective action in spite of a request from the trade mark owner, the service provider could be liable for such infringement.
There is no such special rules or norms regarding trade mark as used in business.
What to Know about Trade Marks When Entering the Japanese Market
More and more goods and services provided by foreign providers have been introduced into Japan through international trade or the internet. This momentum will undoubtedly continue, even in the new normal established thanks to COVID-19.
Traditionally, one way for a foreign provider to enter the Japanese market is to establish a subsidiary or branch. Another way is to use a business partner, such as a distributor or an agent, for distributing goods or services without establishing its own business base. Whatever the case, it would be only a slight exaggeration to state that a registered trade mark is the very essence of down-to-earth success in Japan.
The importance of obtaining a registered trade mark
One cannot consider the proper business in Japan without obtaining a registered trade mark. Assume, for example, that a foreign provider has not obtained the trade mark registration because it has trusted its business partner. Under the situation, the business partner could file at any moment the application for trade mark registration of the provider’s trade mark without the provider’s consent.
This would become most problematic if one further assumes that the business relationship between the provider and the business partner has collapsed. The worst-case scenario is that the business partner, having obtained the trade mark rights, may possibly unfairly require the provider to purchase the trade mark rights at high price, or otherwise even demand it to leave the Japanese market. Obtaining the trade mark registration is, therefore, often thought crucial before entering the Japanese market.
Not every foreign provider is, however, familiar with the Japanese trade mark law. A foreign provider cannot always obtain proper legal advice, at an early-enough stage, regarding the Japanese trade mark law. Consequently, it is no surprise that many providers end up starting the business in Japan without filing an application for the trade mark registration. How then is such a provider able to be saved if involved in a trade mark problem in Japan?
Remedy one: invalidation due to filing for “unfair purposes”
One option to save such a provider is Section 4.1(19) of the Trademark Act. This stipulates that an application for trade mark registration must be refused if the trade mark is well-known among consumers in Japan or abroad, and if such trade mark is used for unfair purposes. Even once registered, the registration will become invalid if someone files a invalidation trial before the Patent Office.
For example, in KCP, the applicant had purchased from the Korean provider’s goods named “KCP” and then sold them in Japan. The Korean provider thereafter decided to enter the Japanese market. Upon noticing the Korean provider’s plan, the applicant filed an application for the trade mark of “KCP” and obtained the registration. Under the circumstances, the Court found that the registration must be invalidated because the applicant filed with the purpose of forcing the Korean provider to purchase the trade mark for fee, or to make the contract with the applicant so that the applicant could become the Korean provider's sales agent in Japan. Such a purpose, according to the Court, amounted to the “unfair purposes.” (IP High Court 30 May 2019, Hei 30 (Gyo-ke) No 10173).
Relying to Section 4.1(19) alone is not enough, though. As mentioned, to be protected under Section 4.1(19), the trade mark must be “well-known” among consumers in Japan or abroad. The threshold of proof of this requirement is high. One must provide the court with numerous evidences from various points of view, examples of which are sales amount, sales period, the number of stores, the number of views of websites, awards, appearances in magazines or newspapers, and users’ reviews posted on the internet. It can safely be said that being involved into the dispute requiring such time and effort is, by itself, a huge legal risk.
Remedy two: rescission due to filing by a “former agent”
Another option to save the provider is Section 53-2. This sets out that a registered trade mark must be rescinded if the applicant is the agent or representative of the foreign provider within one year before the filing date of trade mark registration, and if the applicant has no justifiable ground to file. This could be advantageous to a foreign provider in that unlike Section 4.1(19), the “well-known” factor mentioned above is not required.
For example, in Chromax, a Taiwanese provider had a business relationship with an applicant through continuous transactions. The applicant thereafter filed an application for trade mark registration of “Chromax,” which was virtually the same as one registered by the Taiwanese provider in Taiwan. The Court found that the applicant was the “former agent or representative within one year before the filing date”, and that since the applicant never heightened the value of the trade mark of "Chromax" by promotions and advertisements, there was no “justifiable ground” for the applicant to file. In so finding, the Court rescinded the applicant’s registration. (IP High Court 19 January 2012, Hei 23 (Gyo-ke) No 10194).
Although often important to a foreign provider, Section 53-2 alone is not sufficient, either. To apply Section 53-2 to the case, the applicant must have been an “agent or representative” of the foreign provider “within one year before the filing date.” In some cases, however, it becomes uncertain when the agency relationship actually began. For example, in Agronatura, the Patent Office found that the applicant was an “agent or representative” of the Italian provider at the time of filing.
The Court, however, reversed that decision, and held that the applicant was not an “agent” because the applicant had merely purchased the Italian provider’s goods for evaluation at the time of filing. Such a relationship, according to the Court, was not enough to create an agency relationship. (IP High Court 31 January 2011, Hei 21 (Gyo-ke) No 10138, etc).
The importance of obtaining a registered trade mark
Based on the foregoing, it would be essential to understand the importance of obtaining registered trade mark before starting the business in Japan. If not properly obtained, a foreign provider will probably encounter a trade mark issue at some point in the future, especially at the end of the business relationship with business partners. The Trademark Act, as noted, provides some protections for a foreign provider under such a situation. However, because these are only post-remedies, it is not a good idea to rely too much on them. Consequently, a trade mark registration at an appropriate timing is clearly warranted.
Awareness of how a registered trade mark is used
A foreign provider must be careful regarding how its trade mark is actually used after its registration. This caveat is nicely illustrated in the recent trade mark infringement case before the IP High Court (IP High Court 24 June 2020, Rei 1 (Ne) No 10069).
In MMPI, the plaintiff was the owner of the registered trade mark of “MMPI.” The “MMPI” stands for the “Minnesota Multiphasic Personality Inventory,” which is a standardised psychometric test, developed by a psychologist and psychiatrist at the University of Minnesota. The plaintiff had published the questionnaires of its Japanese version and provided scoring services for years. The defendant later created another type of Japanese translation, and then provided goods and services relating to the MMPI by using the trade mark of “MMPI”.
The Court found that, at the time the defendant began to provide the goods and services, it had widely been recognised among consumers that the word of “MMPI” meant the standardised psychometric test, developed by a psychologist and psychiatrist at the University of Minnesota, or its abbreviation. Notably, the Court paid attention to how the trade mark of “MMPI” had actually been used on the plaintiff’s own goods and services. The Court pointed out that from the relevant evidence, the plaintiff’s way to use of “MMPI” in the past had not demonstrated the source of its service, but rather, the content of its service. The mere use of such a mark which merely indicates the content, or quality, of the service, according to the Court, does not constitute of trade mark infringement (Section 26.1(3)).
This outcome might have been opposite if the plaintiff were to have used the trade mark of “MMPI” so that it could have been recognised among consumers properly as the source identification. This, therefore, serves to trigger revisiting whether the use of the trade mark is appropriate. In other words, even though a foreign provider has properly obtained the registered trade mark, that registration becomes useless, unless actually used appropriately.
Given that a foreign provider often has business partners use its registered trade mark, it must always remember that incessant efforts to manage and supervise the way to use the trade mark by business partners are indispensable. If business partners were to use the trade mark inappropriately, regardless of whether intended or negligent, and if no consumer comes to consider the trade mark ever shows the source of goods or services, then the registration will be useless in the end.
To summarise, a foreign provider must be aware of the importance of registering the trade mark before starting the business in Japan, and continuously supervise how the trade mark is actually used in the market thereafter. As clearly shown in the recent IP High Court cases stated here, it is not unusual to see trade mark issues arising between a foreign provider and their Japanese business partner. Again, the most obvious source of avoiding such problems, if not the only, is the proper registration and management of a trade mark.