Can shape of goods be protected under the Unfair Competition Prevention Law?

Imitation of training chopsticks

Plaintiff filed a lawsuit against defendant to cease to manufacture and distribute defendant’s training chopsticks in the name of “Deluxe Training Chopsticks” by alleging it constitutes confusion with, or imitation of plaintiff’s well-known training chopsticks in the name of “Edison Chopsticks” based on violation of the Unfair Competition Prevention Law.

chopsticks

 The IP High Court decision

In a dispute of imitation of training chopsticks, the IP High Court admitted Article 2(1)(i) of the Unfair Competition Prevention Law is interpreted to include shape of goods in the meaning of “another person’s goods or business by use of an indication of goods, etc. (which shall mean a name, trade name, trademark, mark, container or package, or any other indication of goods or trade pertaining to a person’s business)”, provided that the shape has acquired “secondary meaning” as a consequence of substantial use even if it is not aimed to serve as a source indicator.

 Article 2(1)(i) of the Unfair Competition Prevention Law

Article 2

(1) The term “unfair competition” as used in this Act shall mean any of the following:

(i) creation of confusion with another person’s goods or business by use of an indication of goods, etc. (which shall mean a name, trade name, trademark, mark, container or package, or any other indication of goods or trade pertaining to a person’s business; the same shall apply hereinafter) that is identical or similar to an indication of goods, etc. well-known among consumers used by said person, or assignment, delivery, display for the purpose of assignment or delivery, export, import or provision through a telecommunications line of goods bearing the such an indication of goods, etc.;

Secondary meaning for shape of goods

Besides, in the assessment of secondary meaning, the shape is required:

(1)   To contain a distinctive character distinguishable from other similar goods objectively, and

(2)   To be exclusively used by specific entity for a long period of time or published for advertisement extensively, and thus the goods gets known for a source indicator of the entity among relevant consumers

It should be noted that where the shape simply results from technical function and utility of the goods and leaves no other option to adopt an alternative configuration, such shape should not be protected under Article 2(1)(i) of the Unfair Competition Prevention Law.

In the meantime, where the shape leaves other option to adopt an alternative configuration, Article 2(1)(i) of the Unfair Competition Prevention Law is applicable on the condition that the shape meet above requirements, namely (1) distinctive character and (2) well-knownness.

 

Conclusion

Based on above rules, the IP High Court found that the shape of plaintiff’s Edison chopsticks evidently derives from technical function and utility since it serves directly for consumers to learn how to use chopsticks in a correct manner.

The IP High Court admitted the shape leaves other potion to adopt an alternative configuration, however, denied plaintiff’s argument in view of lack of distinctive character since Edison chopsticks consists of a common configuration with equivalent goods. (Heisei 28 Ne 10028 ruled on July 27, 2016)

The IP High Court refused a word mark “HOKOTABAUM” due to lack of inherent distinctiveness

In a dispute regarding distinctiveness of a word mark “HOKOTABAUM” in class 30 for goods “Baumkuchen”, a ringed, hollow cake that’s made on a spit with layer after painstaking layer of batter, a German traditional cake, the IP High Court upheld the decision of JPO negating distinctivenss of the mark and decided to refuse registration of the disputed mark (Heisei28 Gyo-ke 10109 ruled on October 12,22016).

 “HOKOTA” nominally corresponds to a name of the city located in Ibaraki Prefecture, north east of Tokyo. JPO considered that the mark “HOKOTABAUM” is a term combining city name of “Hokota” with an abbreviation of “Baumkuchen” and refused the mark based on Article 3(1)(iii) of the Trademark Law since it consists solely of a mark indicating, in a common manner, the place of origin, place of sale for goods.

Plaintiff argued that relevant consumers and traders will not recognize Hokota City as a place where Baumkuchen is produced or distributed for sale because the City is not known for confectionery or cakes as local industry.

 hokotabaum

However, the Court dismissed the argument by citing decision of the Supreme Court pertinent to Article 3(1)(iii) of the Trademark Law.

 The Supreme Court decision

Article 3(1)(iii) of the Trademark Law stipulates that any trademark may not be registered if the trademark consists solely of a mark indicating, in a common manner, in the case of goods, the place of origin, place of sale, quality, raw materials, efficacy, intended purpose, quantity, shape (including shape of packages), price, the method or time of production or use, or, in the case of services, the location of provision, quality, articles to be used in such provision, efficacy, intended purpose, quantity, modes, price or method or time of provision.

The article aims to exclude trademark registration on the grounds that exclusive use of such trademark by specific entity is inappropriately detrimental to the public interest and such trademark lacks inherent distinctiveness due to general use in business, thus is unable to serve its function as a source indicator.

Besides, in order to admit the trademark as a place of origin or place of sale for goods, it is not necessary the goods in dispute is actually produced or distributed for sale in the geographical place. As long as relevant consumer or traders generally perceive likelihood of production or distribution for sale of the disputed goods in the place, it suffices for requirement.

 

The IP High Court dismissed plaintiff’s argument in accordance with the Supreme Court ruling since the fact whether relevant consumers or traders recognize Hokota City as a place of production or distribution for goods of Baumkuchen is irrelevant in adapting Article 3(1)(iii).

In assessment of general perception test, the Court questioned what relevant consumers or traders perceive when they see the word mark “HOKOTABAUM” used on “Baumkuchen produced in Hokota City”, and concluded that relevant public is likely to conceive Hokota City from the term “HOKOTA” in disputed mark.

 

Plaintiff also alleged other examples of trademark registration having similar configuration to the disputed mark in order to demonstrate inappropriateness of JPO decision and bolster adequateness of his assertion. In this respect, the IP High Court judged that Article 3(1)(iii) should be assessed on a case-by-case basis at the time of decision to trademark application respectively by taking into consideration of attentiveness usually possessed by the user and a state of transaction of the goods.

“ANNIVERSARY DIAMOND” versus “ANNIVERSARY”

The JPO Appeal Board ruled that

a senior trademark registration for the mark “ANNIVERSARY” in standard character designating jewelry in class 14 is unlikely to cause confusion with a junior mark “ANNIVERSARY DIAMOND” written in plain letters other than a letter “O” which was replaced with a diamond-ring device (see below), even if the mark is used on diamond rings in class 14[Fufuku2015-19812].


anniversary-diamond


The Appeal Board cancelled a refusal decision rendered by the JPO examiner on the grounds that:
(1) From appearance and pronunciation, the “ANNIVERSARY DIAMOND” logo can be perceived as one mark in its entirety. Besides, both terms of “ANNIVERSARY” and “DIAMOND” are quite familiar with relevant public in Japan and thus concept of “ANNIVERSARY DIAMOND” can be easily conceived from the combination.
(2) Due to the configuration, it must be appropriate to consider that the logo just gives rise to its pronunciation and meaning as a whole.
(3) Therefore, the refusal decision based on the assumption that the term of “ANNIVERSARY” plays a dominant role in the logo made a factual mistake and should be cancelled consequently.

Seemingly, above conclusion is not coincident with the Trademark Examination Guidelines (TEG) criteria as below.

Chapter III, Part 10 of TEG provides that:
A composite trademark having characters representing an adjective (characters indicating the quality, raw materials, etc. of goods or characters indicating the quality of services, the location of its provision, quality, etc.) is judged as similar to a trademark without the adjective as a general rule.

In this respect, as long as the junior mark designates diamond rings in class 14 and the device depicted on the term “DIAMOND” further impresses the concept of diamond rings in mind of consumers, the portion of “DIAMOND” should be considered descriptive. Otherwise, any combined mark composed of registered mark and a generic term pertinent to the designated goods is deemed dissimilar to the registered mark.

I suppose the Board just aimed to declare narrower scope of right where trademark consists of a dictionary word commonly used to the public.

Registrability of two alphabetical letter trademarks in Japan

According to Article 3(1)(v) of the Japanese Trademark Law,

Any trademark solely consisted of a very simple and common mark may not be registered.

 Trademark Examination Guideline(TEG) pertinent to the article (Chapter I, Part 7) specifies that:

Trademarks composed of (a) one or two alphabetical letter, (b) two alphabetical letters hyphened, or (c) one or two alphabetical letter preceded or followed by a term representing business entity, e.g. “Co.” “Ltd.”, are not registrable on the grounds of Article 3(1)(v).

 In the meantime, trademarks consisted of (a) two alphabetical letters combined with “&”, (b) two alphabetical letters depicted in monogram, (c) Japanese katakana characters transliterating two alphabetical letters, or (d) two alphabetical letter represented in a unique design do not fall under the article.

 http://www.jpo.go.jp/tetuzuki_e/t_tokkyo_e/pdf/tt1302-002/1-7.pdf

You had better note that TEG admits to register Japanese katakana characters transliterating two alphabetical letters. That means, even if alphabetical letter trademark would fail to register due to the article, you may have an option to register transliteration of the mark in Japan.
Consequently, one or two alphabetical letter trademarks in standard character, including acronyms and abbreviations are under normal circumstances not registrable.
 As an exception, provided that the producer so effectively markets the product with the mark that consumers come to immediately associate the mark with only that producer of that particular kind of goods and thus one or two alphabetical letter trademarks attain acquired distinctiveness, the marks are entitled to trademark protection on the basis of Article 3(2).

 

Article 3(2) of the Japanese Trademark Law stipulates that:

Notwithstanding the preceding paragraph, a trademark that falls under any of items (iii) to (v) of the preceding paragraph may be registered if, as a result of the use of the trademark, consumers are able to recognize the goods or services as those pertaining to a business of a particular person.

Similarity of Goods and/or Services

Article 4(1)(xi) of the Japanese Trademark Law stipulates that trademark is not registrable if it is identical with, or similar to, another entity’s senior registration provided that the applied trademark is used in connection with the same designated goods or designated services related to the senior registration.

In evaluating dissimilarity of goods or services between the applied mark and senior registration, JPO relies on “Examination Guidelines for Similar Goods and Services (EGSGS).”

EGSGS, in compliance with the Nice Classification, categorize goods having commonality in terms of the production sector, the sales sector, raw materials, qualities, etc.; or services having commonality in terms of how they are being offered, the purposes for which they are being offered, the places they are being offered, etc.

It aims to determine which goods or services belong to which group in light of above commonality, and therefore, in principle, goods/services in each group is deemed similar respectively.

Each group is numbered with a five-digit, common, alphanumeric code, which is called “Similar Group Code (SGC)”.

Similar Group Code (SGC)

As an established examination practice, JPO has considered any goods and services assigned to the same SGC to be in principle similar to each other.

[Example of SGC for goods]

–       Cl.16 Books (26A01)

–       Cl.24 Towels (17B01)

[Example of SGC for services]

–       Cl.41 Educational services for art, sports, or knowledge (41A01)

–       Cl.44 Medical practices (42V02)

 

Same code can be numbered even if each goods/services is classified in different class based on the Nice Classification, vice versa.

[Example of same SGC in different class]

–       Cl.14 Jewelry case (20A01) similar to Cl.20 Furniture (20A01)

[Example of different SGC in same class]

–       Cl.16 Books (26A01) dissimilar to Cl.16 Pencils (25B01)

 

As trademark practitioner, SGC provides us useful information in assessing registrability of a junior mark and possibility of trademark infringement.

In the meantime, occasionally it becomes an unexpected obstacle in view of less likelihood of confusion in the course of actual trade.

Similar code system is introduced in neighboring Asian countries, such as Korea and China.

 

If you want to find more information on SGC, please visit at a website of the JPO for your reference.

https://www.jpo.go.jp/tetuzuki_e/t_tokkyo_e/goods_services_10-2016.htm