New statutory damages for trademark infringement

The Japanese Government promulgated the Trans-Pacific Partnership (TPP) Implementation Law No. 108 of December 16, 2016. Inter alia, in the field of intellectual property, it entails amendment of provisions concerning monetary remedies in an attempt to harmonize with TPP.
New Trademark Law introduces additional statutory damages for trademark infringement enabling trademark owner to recover the amount of damage equivalent to expenses paid for initial acquisition and maintenance (renewal) of trademark registration under Article 38 (4).

 

Article 38 (4)

Where trademark owner or exclusive trademark licensee claims damages from infringer for trademark infringement undertaken intentionally or negligently, and the infringement constitutes the use of a registered trademark (including a mark deemed as identical from common sense with the registered trademark as well as a word mark depicted in different fonts; a mark with identical pronunciation and concept written in different characters among Hiragana, Katakana and alphabets; and a device mark deemed as identical with the registered trademark in appearance) in connection with any of the designated goods or services, the owner or licensee is entitled to recover the amount equivalent to expenses paid for initial acquisition and maintenance of the trademark registration in general.

Statutory minimum damage

Article 38(4) provides for a new option to recover minimum damages from trademark infringement. 

Existing monetary remedies provided under Article 38(1) to (3) enable trademark owner or exclusive licensee to recover the amount of:

  1. Profit per unit of infringed goods multiplied by the quantity of infringing goods,
  2. Profits attributed to infringer caused by infringement
  3. License fee

New monetary remedy is indeed less punishable in comparison with existing statutory damages since infringer is just liable for expenses incurred in the administrative procedures of trademark registration and renewals.

Infringing mark

Monetary remedy under Article 38(4) is deemed applicable to a case where infringing mark misuses a registered trademark or its equivalent on designated goods/services. In other words, damages based on Article 38(4) are not recoverable provided that infringer misused a mark similar to the trademark registration.

Therefore, if disputed marks are not deemed identical, but similar, damages  provided under Article 38(1) to (3) are recoverable.

Implementation date

New Trademark Law is scheduled to become effective on the day of the TPP coming into force.

NOTE: 

TPP is a 12-nation trade pact aiming to liberalise the flow of goods among countries in the Pacific Rim. Japan ratified TPP agreement on December 9, 2016, however, the new US administration of President Donald Trump has said its trade strategy to withdraw from the TPP trade pact, which the United States signed but has not ratified. Unless two major economic powers ratify the agreement, TPP will never come into force.

 

1187hirai%e4%bf%ae%e6%ad%a3003_2MASAKI MIKAMI – Attorney at IP Law
Founder of MARKS IP LAW FIRM

 

 

 

How to avoid a descriptive mark from being refused by JPO

The trademark law prohibits any mark incapable of serving as a source indicator from being registered under Article 3 (1).

Article 3(1) of the trademark law

Any trademark to be used in connection with goods or services pertaining to the business of an applicant may be registered, unless the trademark:

(i) consists solely of a mark indicating, in a common manner, the common name of the goods or services;

(ii) is customarily used in connection with the goods or services;

(iii) 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;

(iv) consists solely of a mark indicating, in a common manner, a common surname or name of a juridical person;

(v) consists solely of a very simple and common mark; or

(vi) is in addition to those listed in each of the preceding items, a trademark by which consumers are not able to recognize the goods or services as those pertaining to a business of a particular person.

How to overcome refusal under Article 3(1)

We have three options to overcome the refusal under Article 3(1).

Option 1: Opposing to examiner’s assertion and dispute inherent distinctiveness.

Examiner often withdraws a refusal if we could convince the examiner of inherent distinctiveness in a response. Mostly, where applied mark is composed of two or three words, it is worthy of arguing distinctiveness of the mark in its entirety even though respective word is deemed descriptive.

 

Option 2: Arguing acquired distinctiveness of applied mark if applicant has substantial used of the mark.

A mark having functioned as a source indicator resulting from extensive and substantial use can be exceptionally registered under Article 3(2) of the trademark law regardless of descriptive meaning of the mark.

Article 3(2)
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 thetrademark, consumers are able to recognize the goods or services as those pertaining to a business of a particular person.

 

Option 3: Asserting a unique appearance of the mark even if admittedly the mark itself is descriptive without such appearance.

If applied mark contains figurative elements or depicts word(s) with an unfamiliar font design, it is still possible to overcome the refusal since Article 3(1) is applicable to a mark depicted “in a common manner”.

In other words, descriptive term(s) written in an uncommon manner can be registered regardless of original meaning of the mark.

Needless to say, it is not allowed to amend font design of applied mark during examination based on Article 16-2. Therefore, third option should be taken into consideration prior to filing an application.

Article 16-2(1)
Where an amendment made to the designated goods or designated services, or to the trademark for which registration is sought as stated in the application, is considered to cause any change of the gist thereof, the examiner shall dismiss the amendment by a ruling.

 

1187hirai%e4%bf%ae%e6%ad%a3003_2Masaki MIKAMI – Attorney at IP Law, Japan
MARKS IP LAW FIRM

IP High Court ruled a commonly used shape of package is incapable of serving as a source indicator

On December 22, 2016, the IP High Court (Tokyo) upheld decision of Tokyo District Court (Case no. Heisei 27(Wa)33398), and ordered dismissal of appeal ruling that:

  • Appellant’s good serves as a source indicator due to designs, color, gloss, and texture depicted on external package of the goods, not merely by cube geometry of the package.
  • In view of severe difference in design, color, word mark appeared on the package, consumers will perceive such distinctive elements as “configuration of goods” provided under Article 2(4) of the Unfair Competition Law rather than shape of the package itself.
  • Configuration of goods is incapable of serving as a source indicator unless it comprises prominent distinction. Overall shape of package composed of appellant’s goods is quite simple and thus a mere fact of identical shape with respective package is insufficient to conclude that the shape plays a role of source indicator of goods in dispute.

package

Based on the foregoing, the court denied appellant’s motion to dismiss a decision of trial court on the grounds that overall package of appellant’s goods neither corresponds to “indication of goods” provided under Article 2(1)i of the Unfair Competition Law, nor “configuration of goods” under Article 2(1)iii without combination of designs, color, gloss, and texture depicted on the package.

Unfair Competition Law

Article 2(1)i
The termunfair 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. wellknown 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.;

 

Article 2(1)iii
(iii) assignment, lease, display for the purpose of assignment or lease, export or import of goods which imitate the form of another person‘s goods (excluding forms indispensable to ensuring the functioning of said goods);

 

Article 2(4)
The term “configuration of goods” as used in this Act shall mean the external and internal shape of goods and their associated patterns, color, gloss, and texture, which may be perceived by users when making ordinary use of the goods.

Unfair Competition Law plays a key role in a dispute involving unregistered mark or trade dress. The case teaches us a good lesson.

A coincidence in the shape of package is insufficient in a lawsuit based on the Unfair Competition Law unless the shape contains prominent distinction in itself.

Appeal Case no. IP High Court Heisei28(Ne)10084

1187hirai%e4%bf%ae%e6%ad%a3003_2Masaki MIKAMI – Attorney at IP Law (Japan)

MARKS IP LAW FIRM

New Standard Characters in trademark registration

When applying to register a trademark at the JPO, the mark itself can be one of several types.

  • Word mark in standard character
  • Word mark in specific style
  • Design (logo)
  • 3D mark (trade dress)
  • Color
  • Motion
  • Position
  • Hologram
  • Combination of above elements (other than standard character trademark)

Standard Characters 

For a mark to quality as a standard character trademark, it must consist of only acceptable standard characters – alphabetical letters, Japanese characters (Hiragana, Katakana), Chinese characters, numbers and some symbols.

Article 5(3) of the Japan Trademark Law provides:

Where a person desires to register a trademark consisting solely of characters designated by the Commissioner of the Patent Office (hereinafter referred to as “standard characters”), the application shall contain a statement indicating thereof.

Trademark Examination Manual 19.01 enumerates standard characters available in obtaining Japanese trademark registration.

 

New Standard Characters

From January 1, 2017, “New Standard Character Set” becomes effective.

Newly adopted standard characters, almost Chinese characters as below listed, are aimed to comply with characters provided in the New Japanese Industrial Standards (JIS).

 standard-character

 

In terms of trademark registration, a standard character claim allows for the registration of words, letters, numbers and some symbols without any specific font, size, style, color or other design element. It simply requires the mark to be typed out without regard to the font, style, size or color. Registering a trademark in standard characters provides the broadest form of protection regardless of the form it appears in.

1187hirai%e4%bf%ae%e6%ad%a3003_2Masaki MIKAMI – Attorney at IP law (JAPAN), MARKS IP LAW FIRM