Japan IP High Court: Cancellation of trademark right due to inappropriate use by licensee

The IP High Court ruled on September 26, 2018 to totally cancel TM Reg. No. 1809362 for the mark “TOP-SIDER” on the ground that use of the registered mark by licensee is likely to cause confusion with goods from a business entity other than trademark owner.
[Case no. Heisei30(Gyo-ke)10053]

TM Registration – “TOP-SIDER”

Registered mark in question, consisting of the word “TOP-SIDER” written in plain Gothic font (see below), was registered in 1985 over the goods of clothing, coats, shirts and others in class 25 and  has been validly renewed over three decades .

Licensee’s Use

Mizujin  Co., Ltd, a  non-exclusive licensee of the registered mark in question, used “TOP-SIDER” logo on T-shirts (see below).

Sperry Top-Sider

Sperry Top-Sider LLC, a US business entity, famous for “Sperry Top-Sider” deck shoes, filed a cancellation trial against the registration based on Article 53 of the Japan Trademark Law and argued that above use by Mizujin shall be inappropriate since it is likely to cause confusion with “Sperry Top-Sider”.

Cancellation trial based on Article 53

JPO sided with Sperry and decided to entirely cancel the registration. To contend, trademark owner appealed to the IP High Court and alleged cancellation of the decision.

Article 53 of the Trademark Law provides that trademark right is subject to cancellation if use of the mark by licensee causes confusion with respect to another’s business and trademark owner is liable for failure to supervise with an ordinary care.

IP High Court decision

The IP High Court upheld the JPO decision, stating that:

  1. Apparently from totality of the circumstances, trademark owner must have noticed above use by Mizujin.
  2. ”TOP-SIDER” logo contains figurative elements to be seen as cloud and yacht, and looks quite similar to the Sperry mark.
  3. “Sperry Top-Sider” logo has become well-known for Sperry’s deck shoes among traders and general consumers.
  4. Since T-shirts and shoes are offered for sale to wear at same apparel shops, they are closely related with each other in view of sales channel as well as consumers.
  5. Thus, the Court finds that above use by licensee is likely to cause confusion with respect to Sperry business on deck shoes.

It is noteworthy that trademark owner is entitled to grant a licensee the right to use registered mark, however, by doing so , it enhances a risk to lose trademark right if he is careless to supervise the licensee’s inappropriate use and cause confusion.

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

How to remove senior registered mark in an effective manner

How to remove trademark registration

The Japan Trademark Law provides several provisions to make trademark registrations ineffective once successfully registered.

  1. Opposition (Article 43bis)
  2. Invalidation trial (Article 46)
  3. Non-use cancellation trial (Article 50)
  4. Cancellation trial based on misleading use by registrant (Article 51)
  5. Cancellation trial based on fraudulent use by assignee of divided trademark right (Article 52bis)
  6. Cancellation trail based on misleading use by licensee (Article 53)
  7. Cancellation trial based on unauthorized registration by person concerned (Article 53bis)

Which is risk saving?

According to the statistical data released by the Japan Patent Office (JPO), it shows that non-use cancellation trial is at lowest risk in view of past success rate.

<Success rate in 2016>

  • Non-use cancellation trial: 80%
  • Invalidation trial: 47%
  • Opposition: 17%

Non-use cancellation trial

In Japan, since burden of proof to demonstrate genuine use of the disputed mark during the past three years rests just on trademark owner, non-use cancellation trial is not burdensome to claimant at all. Besides, the law does not require the claimant to have legal interest to the result of cancellation trial. It also helps to boost a preference to non-use cancellation trial.

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