Luis Vuitton victory in trademark battle for remake use

In a trademark battle involving famous Louis Vuitton Monogram for remake use, the Japan IP High Court ruled in favor of Louis Vuitton and ordered appellant to pay 1.7 million JP-Yen for damages on October 23, 2018.

Custom-made Remake

Appellant has produced shoes, caps and other fashion items by making use of material of secondhand Louis Vuitton goods (see below) and promoted the items as a custom-made remake, e.g. LOUIS VUITTON REMAKE DENIM CAP/BLUE, through internet.

Unfair Competition Prevention Act

Louis Vuitton filed a lawsuit and demanded to stop selling the items as well as payment for the damage on the grounds that appellant’s act constitutes unfair competition under Article 2(1)(ii) of the Japan Unfair Prevention Act.

Article 2(1)(ii) of the Unfair Competition Prevention Act is a provision to prohibit any person from using a famous source indicator of another person without permission.

Appeal

Appellant argued they become popular among relevant consumers as a business entity to produce a custom-made remake from secondhand of genuine brand. If so, since consumers are fully aware that the items are remake, neither faked goods nor brand-new article, confusion is unlikely to happen in the mind of consumers. Besides, appellant insisted as long as the Louis Vuitton Monogram is not used as a source indicator but design, the Unfair Competition Prevention Act is not applicable to the items.

IP High Court decision

The IP High Court decisively dismissed appellant’s allegations and decided the monogram on the items still plays a role of source indicator in view of remarkable reputation of Louis Vuitton Monogram. It can be easily presumed that average consumers at sight of the items shall conceive Louis Vuitton. Even if the items are sold as a custom-made remake or with any description to appeal the items made from secondhand, such facts will not affect the decision on the merit.
[Heisei 30 (Ne)10042]


The Unfair Competition Prevention Act is essential to the case where actual confusion would not happen in fact regardless of unauthorized commercial use of famous brand.

Masaki MIKAMI, Attorney at IP Law – Founder of MARKS IP LAW FIRM

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