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

Name of a deceased historical person as trademark

Trademark containing the name, famous pseudonym, professional name or pen name of another person in-life, or famous abbreviation thereof is prevented from registering based on Article 4(1)(viii) of the Japanese Trademark Law.

 Article 4(1)(viii) is applicable only to a person in-life, however.

What happens to the name of a deceased historical person?

 JPO admitted to register the following surname of historical person as trademark filed during the past half decade by an entity apparently unrelated to the person or his descendant.

Reg No. 5501361 for word mark “CLEOPATRA” in class 31

Reg No. 5610909 for word mark “NAPOLEON” in class 14

Reg No. 5870913 for word mark “EDISON” in class 21

Reg No. 5744685 for word mark “MOZART” in class 11

Reg No. 5514116 for word mark “NEWTON” in class 9, 41

Reg No. 5744686 for word mark “PICASSO” in class 11

Reg No. 5537255 for word mark “KENNEDY” in class 25

 

Meanwhile, “ANNE FRANK”, “JOHN LENNON”, “JAMES DEAN”, “MARILYN MONROE”, “CHAPLIN”, and “MOTHER TERESA” has been registered as a trademark owned by specific organization

 

Trademark Examination Manual (TEM) 42.107.04 revised in 2009 refers to approach to application filed for registering a trademark created after the name of a historical person or name of a well-known or famous deceased person.

 1. In the process of examining an application filed for registering a trademark, examiners should pay special attention to the application for a trademark created after the name of a historical person since using or registering such application may cause damage to social and public interest, irrespective the unobjectionable composition of the trademark, or generally-accepted sense of morality, which may fall under Article 4(1)(vii) of the Trademark Act. Specifically, they should analyze such application if it would fall under the provision, comprehensively taking the following backgrounds into consideration:

1) Popularity of the well-known or famous historical person;

2) Acceptance of the name of the historical person among the nation or region;

3) Availability of the name of the historical person;

4) Relationship between the availability of the name of the historical person and the designated goods or services;

5) Circumstance, purpose, or reason of the application; and

6) Relationship between the historical person and the applicant.

2. In the process of the examination said above, especially when examiners recognize the application as “an application for registering the trademark filed by the applicant who takes advantage of the measures for public interest using the name of a historical person, who hinders the execution of the measures, and who intends to monopolize the interest while he/she knows that the application would result in damaging public interest,” the application falls under Article 4(1)(vii) of the Trademark Act based on the idea that the application may disrupt the order of fair competition and cause damage to social and public interest.

 In a lawsuit disputing invalidity of mark “CARNEGIE SPECIAL”, the court ruled that the registered trademark as a whole was invalidated due to violation of public policy because it was presumed that the plaintiff had illegally intended to use the achievement of Dale Carnegie Note (1888 – 1955), famous writer, for his own business. (Decision by the Tokyo High Court, August 29, 2002 [2001 (Gyo Ke) No. 545])

To sum up, since 2009, it becomes evident that where an applied mark corresponds to the name of a historical person, the mark shall not be registered if its registration is likely to cause damage to public policy on the ground of violation of Article 4(1)(vii) and TEM 42.107.04. Inter alia, where a specific organization manages IP right of historical person, JPO will refuse registration of the name of such person accordingly.

Customarily used trademarks

Article 3(1)(ii) of the Japanese trademark law stipulates that

“a mark customarily used in connection with designated goods or services is not registrable”.

According to the trademark examination guideline (TEG), “customarily used trademarks” means trademarks which, having become customarily used with respect to the same type of goods or services among business operators relating to his business, are not distinctive to distinguish the goods or services of one party from those of other parties.

In a word, “customarily used trademark” results from a circumstance where a mark, coined and firstly used by registrant, became generic or descriptive, while it is inherently distinctive, as a result of free-hand use of the term on equivalent goods or services by competitors in general.

“Customarily used trademark” becomes controversy in an attempt to invalidate a trademark registration on the basis of Article 3(1)(ii), and to defend against claims of trademark infringement based on Article 26(1)(iv).

 

Article 26(1)(iv) stipulates that

“A trademark right shall have no effect on any of trademark customarily used for the designated goods or designated services or goods or services similar thereto”.

 

TEG enumerates examples of Customarily used trademark”.

(1) Trademarks consisting of characters, figures and other elements

“正宗” [MASAMUNE] (Refined Japanese sake wine)

“羽二重餅” [HABUTAEMOCHI] (Bean jam cake)

Figure of “オランダ船” [ORANDASEN] (cake)

“かきやま” [KAKIYAMA] (Rice crackers)

“観光ホテル” [KANKO HOTEL] (Provision of lodging accommodations)

“プレイガイド” [PLAY-GUIDE] (Arrangements for seats of entertainment facilities)

 

(2) Color marks

“Combination of red and white” (for wedding ceremonies)

“Combination of black and white” (for funeral ceremonies)

 

(3) Sound marks

“Cries of a street sellers who sells sweet potatoes baked on hot pebbles” (baked sweet potatoes)

“Sounds of a flute played by a street vendor who sells noodles on the streets at night (Chinese noodle supply)

 

In order to avoid successful defense, it is inevitable for registrants to take preventive action in a timely manner for the purpose of adequately protecting their trademark. Otherwise, trademark is likely to lose the strength and value of the mark.

How to avoid mispronounced marks

Unique writing system of the Japanese language consists of three different character sets: Kanji (several thousands of Chinese characters), and Hiragana and Katakana (two syllabaries of 46 characters each).

Specifically, Katakana gets used for writing foreign loanwords phonetically.

By virtue of Katakana, we get a clue to learn proper pronunciation of unpronounceable alphabetical words. In this regard, Katakana is obviously of great help to avoid phonetic slip-ups and mispronouncing high-profile brand names in Japan.

For instance,

When we come across a word “YVES SAINT LAURENT” for the first time, we most likely call it “i-bes-sein-to-lo-ren-to”.

Likewise, we may call “L’OCCITANE” as “lo-sshi-ta-ne”, “PEUGEOT” as “pe-u-ge-o-to”, “RENAULT” as “re-na-u-ru-to”, “agnès b” as “a-gu-ne-su-bi”, “MONC BLANC” as “mon-to-bu-ran-ku”, “T-fal” as “tei-fa-lu”.

 

In other words, less attention to Katakana in promoting alphabetical brand names is likely to result in mispronunciation among the relevant public in Japan as you can see from the examples.

What’s worse, it may give rise to tragedy that trademark registration for the alphabetical name is insufficient to force unauthorized entity to cease his use of a mark consisting of Katakana to represent correct pronunciation of the name due to dissimilarity of the marks.

Provided that trademark registration is solely composed of alphabetical words, pronunciation of the mark is construed based on the most natural, logical way to pronounce it.

In this regard, it was a bit surprise that the Supreme Court judged a word mark written in Katakana pronounced as “reeru-dyu-tan” is phonetically identical with a registered mark “L’Air du Temps” in Case 1998 (Gyo-Hi) 85. Undoubtedly the judgement was based on the facts that “L’Air du Temps” had become well-known as a brand of perfume and the registered mark had been advertised accompanying a Katanaka “reeru-dyu-tan” as well.

http://www.courts.go.jp/app/hanrei_en/detail?id=493

When we come across a word “L’Air du Temps” for the first time, little thought is given to call it “reeru-dyu-tan”. The most natural way to pronounce it is “lu-ear-dyu-ten-po-su” indeed.Thus, the Supreme Court judgement should not be considered to negate necessity of Katakana in avoiding mispronounced marks.

 

It is advisable to use and register a Katakana word representing correct pronunciation of brand name as well as the alphabetical letters, especially where the letters are unpronounceable to the Japanese and thus natural pronunciation is not what a brand owner expects the Japanese to call it.

How to decide similarity of composite marks

The Japanese Trademark Law sets forth:

– the use of a trademark similar to the registered trademark constitutes infringement of trademark right (Article 37(1)),

– trademark shall not be registered if the trademark is similar to another entity’s senior registered trademark (Article 4(1)(xi)).

It remains unclear from the articles how we can discriminate marks in dispute are similar or dissimilar.

Trademark examination guideline (TEG) plays a role to provide us with key factors in the assessment of similarity of marks.

[TEG Chapter 3, Part 10]

1.In judging the similarity of a trademark, decisive elements of the trademark, including its appearance, sound and concept need to be comprehensively taken into consideration.

2.A judgment on the similarity of a trademark needs to, with consideration given to a class of main users (for example, professionals, senior people, children, women, etc.) of goods or services on which the trademark is used, be made based on attentiveness usually possessed by the user, with consideration given to the state of transaction of the goods or the provision of the services.

The guidelines are set forth in conformity with precedent decisions of the Supreme Court.

In regard to composite marks, TEG enumerates seven cases and corresponding examples as follows.

 6.Concerning the similarity of a composite trademark composed of two or more elements, a judgment needs to be made based on the following among other things, with consideration given to the strength of a combination between its elements. However, this does not apply where such a trademark is judged clearly to produce a remarkably different appearance, sound and concept.

(1) 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.

[Example]

“SUPER LION” v. “LION”,

“GINZA KOBAN” v. “KOBAN”,

“LADY GREEN” v. “LADY”

(2) A trademark composed of letters different in size is judged with respect to a group of letters identical in size as a general rule.

[Example]

“富士白鳥” v. “富士” or “白鳥”

“サンムーン” v. “サン” or “ムーン”

(3) A trademark composed of letters conspicuously separate apart from each other is judged with respect to a group of letters separate from others as a general rule.

[Example]

“鶴亀  万寿” v. “鶴亀” or “万寿”

(4) A trademark which, because of its long sound or its particularly conspicuous portion, may be simplified with a certain portion thereof is compared with other trademarks, in principle, with its portion picked up in its simplified form.

[Example]

“cherryblossomboy” v. “cherryblossom”,

“chrysanthemumbluesky” v. “kurisanshimamu” or “blue-sky”

(5) A trademark combining letters customarily used for the designated goods or designated services with other letters is compared with other trademarks with the customarily-used letters removed.

[Example]

“男山富士” v. “富士” for sake

“play guide shuttle” v. “shuttle” for arrangements for seats of entertainment facilities

 (6) A trademark combining another person’s registered trademark that is widely recognized in respect of the designated goods or designated services with other letters or figures, including one whose appearance in totality is well formed or one having a connection in concept, is judged as similar to that another person’s trademark, in principle, excluding however cases where the part of another person’s trademark has become an established word.

[Example]

“SONY” v. “SONYLINE” in respect of tape recorders

“L‘OREAL” v. “LOVE L‘OREAL” in respect of cosmetics

(7) A trademark composed of a trade name (including a trademark composed of an abbreviation of a trade name, as hereinafter applicable) having such characters as “Co.,” “K.K.” “Ltd.,” etc. customarily used as part of a trade name is judged with those characters removed as a general rule, irrespective of their position respective to the primary part of the trademark, either at its head or end.

 

In the meantime, the Supreme Court decision rendered in 2008 established general rule to grasp composite marks in its entirety in the assessment of similarity of mark.

 “Where a mark in dispute is recognized as a composite mark consisting of two elements or more, it is not permissible to decide similarity of mark as a whole simply by picking out an element of the composite mark and then comparing such element with other mark, unless consumers or traders are likely to perceive the element as a dominant portion appealing its source of origin of goods/service, or remaining elements truly lack inherent ability to serve as a source indicator in view of sound and concept.”

 

Based on the above rule, composite mark “TSUTSUMINO-OHINAKKOYA” was deemed dissimilar to a word mark “TSUSTUMI” on the grounds that latter portion of “OHINAKKOYA” is admittedly distinctive.

 Recent disputes arising from similarity of composite mark are entirely in conformity with the Supreme Court decision. Namely, a composite mark consisting of two or more distinctive elements will put you on the fast track to registration

Trademark Abbreviations

A company should be mindful of how the public perceives and uses its trademarks in Japan.

Japanese is prone to abbreviate trademarks. Occasionally, the abbreviation has no resemblance to its original name.

For example, ABERCROMBIE & FITCH is popularly called “ABA-KURO” among general public in Japan. Likewise, DOLCE & GABBANA can be called “DOLU-GABA”. STARBUCKS COFFEE is known as “SUTABA”. TOMMY HILFIGER is called “TOMI-HIRU”.

Where a trademark is composed of five sounds or more, you should mind that general public in Japan gets to call the mark in abbreviation contrary to brand owner’s intention.

BMW is even called as “BI-EMU”.

Most popular name recognized in abbreviation is McDonald without doubt. We seldom call “McDonald” as it is. One of the most popular fast-food chains and one of the top franchises in the world has always been called “MAKUDO” or “MAC”.

A combination mark is an easy target for abbreviation as well.

BOTTEGA VENETA is call “BOTTEGA”. LUIS VUITTON is known as “VUITTON”.

Trademark abbreviations may serve as a barometer for well-recognition of the mark among general public in Japan. In the meantime, abbreviations or nicknames used by the public are not protected under the respective registrations given that they have no resemblance to the original names e.g., “ABA-KURO” and “DOLU-GABA”.

Using abbreviations, nicknames, and acronyms as trademarks may be appealing from a marketing perspective, however, trademark protection for an abbreviation has to be sought independently from the trademark protection that its extensive version might be already enjoying, and vice versa.

A company that seeks trademark protection for an abbreviation should abide by the standard trademark requirements.