The European Lawyer

Japan IP/Technology/Media

4 Feb 2012

Trade Mark Litigation - Japan

Editors: Mori Hamada & Matsumoto Yutaka Miyoshi

1. Sources of Law

1.1 What are the principal sources of law and regulation relating to trade mark and trade mark litigation? (Briefly describe the role of international, foreign or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties).

Since the Japanese legal system is based primarily on codified law, the Trade Mark Law is the principal source of substantive law governing trade marks, and the Code of Civil Procedure and Rules of Civil Procedure are the principal sources of law and regulation governing the procedural aspects of trade mark litigation in Japan. The Civil Provisional Relief Law is also the source of law governing provisional relief, including preliminary injunctions, in connection with trade mark infringement.
Japan is a member of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (‘Madrid Protocol’) that offers a trade mark owner the possibility to have his trade mark protected in several countries by simply filing one application directly with his own national or regional trade mark office. The Trade Mark Law provides necessary proceedings for such international trade mark registration system under the Madrid Protocol.

1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?

In Japan, prior court judgments, such as decisions and orders, do not have legally binding effect on the courts. Courts are theoretically free to render judgments contrary to precedents. However, the precedents of higher courts, especially those of the Supreme Court, substantially function as a source of law for lower courts in that lower courts hesitate to render judgments that contradict rulings established by the higher court and that would likely be overruled at the higher court. In this context, it can be said that court precedents are also sources of law (ie case law).

2. Court System

2.1 Can third parties oppose/request cancellation of a national or supranational (eg Benelux, Madrid Agreement and Protocol, Community Trade Marks) trade mark application/registration in your country? If so, on what grounds? Please briefly describe the opposition/cancellation procedure(s).

Under article 43-2 of the Trade Mark Law a third party may file an opposition against a trade mark registration with the Japanese Patent Office (‘JPO’) within two months from the date of publication of the Gazette containing such trade mark. The grounds for the opposition are listed in article 43-2 (eg (i) lack of registrability under article 3; (ii) unregistrable trade marks under article 4(1); and (iii) violation of a treaty). If an opposition is filed, the appeal examiner must send a copy to the trade mark owner in order to grant an opportunity to file a response to such opposition. If the appeal examiner accepts the opposition, the trade mark is cancelled retroactively. The trade mark owner may attack such successful opposition by appealing to the Intellectual Property High Court. On the contrary, the opposer cannot appeal the appeal examiner’s decision on his opposition, but can demand a trial for invalidation of the trade mark registration.
A third party may also demand a trial for cancellation of a trade mark registration of the Japanese Patent Office. A trial for cancellation of a trade mark registration is available to any person for non-use of a registered trade mark and three other reasons, such as improper uses, as provided in articles 50, 51, 52-2 and 53 of the Trade Mark Law. In order to demand a trial for cancellation for a non-used trade mark, the party submits a written petition to the JPO alleging that neither the trade mark registrant nor any licensee has been using the registered trade mark for more than three consecutive years from the registration date with respect to all or certain items of the designated goods or services. If the trade mark owner fails to prove that he or his licensee has used the registered trade mark with respect to at least one item of the designated goods or services during three years following the registration date or that he has a reasonable cause for such non-use, the trade mark registration is cancelled back to the date of the registration of the demand.
In addition, a third party who is, in a legal sense, interested in the registered trade mark may demand a trial for invalidation under article 46 (see question 3.5).

2.2 In which courts are trade marks enforced? Are they specialised trade mark courts? If not, what level of expertise can a trade mark holder expect from the courts?

In general, a litigation case, including a trade mark infringement case, is first tried in a district court. There are 50 main district courts, each of which is located in each preference of Japan. The judgment of a district court can be appealed to a high court (Koso appeal) and then to the Supreme Court (Jokoku appeal).
Under the new Code of Civil Procedure, which came into effect in 2004, the Tokyo District Court and the Osaka District Court have concurrent jurisdiction over the first instance of trade mark cases, as well as copyright (except for software copyright) and design cases, with other district courts in order to implement a speedy trial of IP cases. The claims concerning trade marks occurring in eastern Japan are subject to the jurisdiction of the Tokyo District Court that has four special divisions for IP matters, and those occurring in western Japan are subject to the jurisdiction of the Osaka District Court that has two special divisions for IP matters.
Koso appeals from district courts in trade mark infringement cases come under the jurisdiction of the Intellectual Property High Court (‘IP High Court’), which was established in April 2005 as a special High Court dealing only with IP matters. The IP High Court has four general divisions and one special division where a panel of five judges hears and decides cases.
Jokoku appeals from the IP High Court are filed with the Supreme Court. A case in the Supreme Court is usually heard by one of the three petty benches composed of five justices.

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

In principle, as mentioned in question 1.2 above, the courts are not legally bound by prior court decisions. However, in practice, the precedents of higher courts, especially those of the Supreme Court, substantially function as a source of law for lower courts in that lower courts hesitate to render judgments that contradict rulings established by the higher court and that would likely be overruled at the higher court. Foreign court decisions in similar cases would not be considered by Japanese courts because of the territoriality principle, but decisions as to certain fact-finding matters such as similarity of trade marks may be taken into account in a Japanese court.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency shall they be brought (eg the national Trade Mark Office or the OHIM in Alicante)?

The Trade Mark Law grants the Japan Patent Office (‘JPO’), a national government agency handling prosecution matters regarding patents and trade marks, the authority to determine trade mark invalidity. In order to invalidate a trade mark, one is required to file a complaint with the JPO demanding a trial for invalidation (Muko-Shinpan). In order to avoid the delays in litigation where the validity of a trade mark is at issue, the Trade Mark Law was amended in 2004 to provide an invalidity defence in a trade mark infringement case in a court. Under article 39 a court in a trade mark infringement case is able to deny enforcement of the trade mark at issue if it finds grounds for invalidation.
However, it should be noted that a court judgment on trade mark invalidity under article 39 is binding only on the parties to the particular case, and that, as explained above, the JPO still has the authority to declare general invalidity of a trade mark through a trial for invalidation. The existence of two different procedural tracks for trade mark invalidation is likely to raise the issue of how to resolve a situation where the decisions of the court and the JPO contradict each other.

2.5 Who can represent parties before the courts handling trade mark litigation and/or the national or supranational government agency dealing with trade mark validity issues?

In Japan, there are effectively two types of legal representatives that handle trade mark matters for clients, ‘attorneys-at-law’ (Bengoshi) and ‘patent attorneys’ (Benrishi). Bengoshi are persons who have passed the bar examination and are registered with a bar association, and Benrishi are usually persons who have passed the patent bar examination and are registered at the JPO.
Bengoshi can represent parties before courts in trade mark litigation. They are also allowed to appear before the JPO. Benrishi can act as representatives for prosecution matters, including filing appeals of decisions of the JPO with the IP High Court. They may also appear in a court as assistants for Bengoshi in trade mark litigation. As a result of the amendment to the Patent Attorney Law in 2002, Benrishi were granted authority to co-represent parties in trade mark litigation with a Bengoshi, provided that such Benrishi have passed the Specific Infringement Litigation Representation Examination.

2.6 What is the language of the proceedings? Is there a choice of language?

Court proceedings are carried out in Japanese. When presenting documentary evidence which is written in a foreign language, a translation into Japanese needs to be attached. If a person participating in the court proceedings is not familiar with Japanese, such as a witness from a foreign country, an interpreter is required.

3. Substantive Law

3.1 To what extent are unregistered trade marks protected under your country’s laws?

Japan is a country where prior registration, not prior use, grants protection by the Trade Mark Law to a trade mark owner. However, widely known indications and famous indications are protected under the Unfair Competition Prevention Law (‘UCPL’) regardless of registration at the JPO. Article 2(1)(i) of the UCPL prohibits the act of passing-off one’s indications of goods (meaning any indication of a person’s name, trade name, trade mark, mark, container, or package of goods in connection with the person’s business, or any other indications of goods or services) using another party’s indications that are widely known among consumers and that cause confusion. In addition, article 2(1)(ii) of the UCPL prohibits the act of using as one’s own indication that which is identical or similar to another party’s famous indication.

3.2 How is trade mark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trade marks?

Acts of infringement
There are basically three categories of acts that constitute trade mark infringement under the Trade Mark Law. According to article 25, a trade mark owner shall have an exclusive right to use the registered mark with respect to the designated goods or services. Thus, the first category of acts of trade mark infringement is an unauthorised use of the trade mark on the designated goods or services. Article 37(1) provides the second category of infringement:
(i) use of a trade mark similar of the registered trade mark in respect to the designated goods or services; (ii) use of a trade mark with respect to goods or services similar to the designated goods or services; and (iii) use of a trade mark similar to the registered trade mark in respect of goods or services similar to the designated goods or services. In addition, article 37(2) to (8) provides, as a third category, other preliminary acts of infringement:

• acts of holding, for the purpose of assignment or delivery, designated goods, or goods which are similar to the designated goods or services and to which, or on the packaging of which, the registered trade mark or a trade mark similar thereto has been applied, (article 37(2));
• acts of holding or importing articles which are for use by persons to whom the services are provided and to which the registered trade mark or a trade mark similar thereto has been applied, in the provision of the designated services, or of services similar to the designated services or designated goods, for the purpose of using such articles in the provision of services (article 37(3));
• acts of assigning or delivering articles which are for use by persons to whom the services are provided and to which the registered trade mark or a trade mark similar thereto has been applied, in the provision of the designated services, or services similar to the designated services or goods, for the purpose of causing such articles to be used in the provision of such services, or acts of holding or importing such articles for the purpose of assigning or delivering them (article 37(4));
• acts of holding articles bearing a reproduction of the registered trade mark or a trade mark similar to it for the purpose of using the trade mark in respect of the designated goods or services or of goods or services similar to them (article 37(5));
• acts of assigning, delivering, or of holding for the purpose of assignment or delivery, articles bearing a reproduction of the registered trade mark or a trade mark similar thereto, for the purpose of causing such trade mark to be used in respect of the designated goods or services or of goods or services similar thereto (article 37(6));
• acts of manufacturing or importing articles bearing a reproduction of the registered trade mark or a trade mark similar thereto for the purpose of using such trade mark, or causing it to be used, in respect of the designated goods or services or of goods or services similar thereto (article 37(7)); and,
• acts of manufacturing, assigning, delivering or importing, in the course of trade, articles to be used exclusively for manufacturing goods bearing a reproduction of the registered trade mark or a similar trade mark (article 37(8)).

Use of a mark
The term ‘use’ of a trade mark is defined in article 2(3) as including the following acts:

• applying the mark to the goods or their packaging;
• assigning, delivering, displaying for the purpose of assignment or delivery, exporting, importing or providing through electric telecommunication lines, the goods on which, or on the packaging of which, a mark has been applied;
• applying a mark to articles for use by persons to whom the services are provided (including articles assigned or leased) when providing services;
• providing services by use of articles to which a mark has been applied for use by persons to whom the services are provided when providing services;
• displaying, for the purpose of providing services, articles to which a mark has been applied and supplied for use in the provision of services (including articles for use by persons to whom the services are provided when providing services);
• applying a mark to articles related to the provision of such services belonging to persons to whom the services are provided when providing services;
• providing services through an image viewer by electromagnetic means (that is, electronic or magnetic method or other method which is not perceptible to a human being), on which a mark is indicated, when providing services through the image viewers;
• displaying or distributing advertisements, price lists or business papers relating to the goods or services or offering them with the information pertaining thereto on which the mark is indicated by electromagnetic means.

Similarity
The Supreme Court has established, through its decisions in the Shozan case in 1968, the Daishinrin case in 1992 and the Kozozushi case in 1997, the standard for determining the similarity between the defendant’s mark and the plaintiff’s registered trade mark:

• similarity of the marks shall be determined based upon whether use of these marks with respect to identical or similar goods or services causes confusion as to the source or origin of the goods or services;
• the danger of the above confusion shall be determined based upon (i) the outward appearance of the mark, (ii) the pronunciation of the mark, and (iii) the underlying concept or idea of the mark, for consumers; and
• similarity of the marks shall also be determined by reference to the conditions or circumstance of the actual use of such marks on goods or services.

Accordingly, translations or conceptually identical but graphically different trade marks would likely to be deemed similar.

3.3 Are there other causes of action for trade marks (eg dilution)?

Under the Trade Mark Law, the protection for the registered trade mark covers only the use of the designated goods or services and goods or services similar to it. The protection against so-called ‘dilution’ is not provided under the Trade Mark Law, but provided under the Unfair Competition Prevention Law in Japan.

3.4 Can a trade mark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

Under article 2(1) of the Trade Mark Law, ‘trade mark’ is broadly defined as characters, figures, signs, three-dimensional shapes or any combination of them and colours which are used in respect of goods or services by a person, who produces, certifies or assigns such goods, or provides or certifies such services, in the course of a trade. Thus, the use of a domain name, trade name etc may constitute a ‘trade mark’ depending on its manner of use. However, there are some requirements for acts to constitute trade mark infringement, such as ‘trade mark use,’ and also some limitations on the trade mark rights, such as ‘use as a company name’ (see question 3.7).

3.5 On what grounds can a trade mark be invalidated?

Article 46(1) of the Trade Mark Law lists various grounds for invalidation, most of which overlap the grounds for rejection and opposition. In practice, a trade mark is most often invalidated because the trade mark is (i) similar to a prior registered trade mark (article 8);
(ii) similar to a well known unregistered trade mark (article 4(1)(x)); or (iii) likely to cause confusion with respect to other person’s goods or services (article 4(1)(xv)). A trade mark that lacks registrability (distinctiveness) may also be invalidated (article 3). The following are examples of trade marks that lack registrability (distinctiveness):

• trade marks which consist solely of a mark indication, in a common way, of a common name of goods or services;
• trade marks which are customarily used in respect of goods or services;
• trade marks which consist solely of a mark indicating, in a common way, the origin, place of sale, quality, raw materials, efficacy, use, quantity, shape or price of the goods, or the method or time of manufacturing or using them; or the location of provision of the services, articles used in such provision, efficacy, use, quantity, modes, price or method or time of the provision of services;
• trade marks which consist solely of a mark indicating, in a common way, a commonplace surname or name of a legal entity;
• trade marks which consist solely of a very simple and commonplace mark; or
• trade marks which do not enable consumers to recognise the goods or services being connected with a certain person’s business.

3.6 Must use requirements be satisfied to maintain the trade mark registration? If so, is there any definition of what constitutes use?

As described in question 2.1, in a trial of cancellation for non-use, a trade mark owner is required to prove that he or his licensee has used the registered trade mark with respect to at least one item of the designated goods or services during three years following the registration date or that he has a reasonable cause for such non-use. Please see question 3.2 where the term ‘use’ is prescribed. It should be noted that use of the trade mark within three months before filing a petition for cancellation does not satisfy the requirement of ‘use’.

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for prior user rights?

The most common defence is to challenge the similarity of its mark and the plaintiff’s registered trade mark, or the similarity of the designated goods or services. In addition, even when an act formally seems to constitute trade mark infringement, other defences are sometimes recognised by the court, for example:

• Prior use right: If the mark is well known as a result of the fact that the defendant has used and continued to use the trade mark without the intent to compete unfairly before the application of the trade mark is filed with the JPO, the defendant has a right to use the registered trade mark (article 32(1)).
• Not trade mark use: There have been numerous court decisions clearly stating that the use of a registered trade mark other than ‘trade mark use’ does not constitute trade mark infringement. ‘Trade mark use’ generally means that a mark is used in a manner which indicates the source or origin of the goods or service. The issue as to whether the use of a mark is considered to be trade mark use is determined based upon the perception of consumers. In other words, if a mark is used in a manner that does not function or serve as a sign for consumers to distinguish the source or origin of the goods or service, it would not be considered to be trade mark use. Based upon this point of view, the use of a mark as a logo on t-shirts, as a title of a book or music CDs, and on toys to make them look more realistic was not determined to be trade mark use by the courts.
• Limitation on trade mark right: The trade mark owner’s exclusive right to use his registered trade mark does not cover another’s use of certain marks (article 26). For example: (i) a trade mark indicating, in a common way, one’s own portrait, name (including company name), famous pseudonym, professional name or pen name or a famous abbreviation of it; and (ii) a trade mark indicating, in a common way, the origin, place of sale, quality, raw materials, efficacy, use, quantity, shape or price of the goods, or the method or time of manufacturing or using the designated goods or goods similar to it or the common name of the services similar to the designated goods; or location of provision of the services, articles used in such provision, efficacy, use, quantity, modes, price or method or time of the provision of services.
• Parallel imports: In principle, unauthorised importation of products bearing a registered trade mark to Japan without the permission of the owner of such trade mark constitutes trade mark infringement (article 2(3)). However, the parallel importation of genuine goods (‘parallel imports’) has been supported by many lower court decisions. In 2005, the Supreme Court in the Fred Perry case established a three-part test to determine lawful parallel imports:

– the trade mark on the imported goods was duly affixed to them by the trade mark owner or licensee in the foreign country;
– the trade mark owner in the foreign country is the same entity, or may be legally or financially deemed to be the same entity, as the trade mark owner in Japan, so that the trade mark on the imported goods indicates the same source (origin) of goods as that of the registered trade mark in Japan; and
– the imported goods do not substantially differ in the quality guaranteed by the registered trade mark from the products bearing the registered trade mark affixed by the trade mark owner in Japan, because such trade mark owner in Japan is in a position to be able to directly or indirectly control the quality of the imported goods.
There has been an issue whether the importation of goods that were manufactured in breach of the provisions of a licence agreement would still be considered a lawful parallel import. The Supreme Court decision in the Fred Perry case held that imported goods that were manufactured outside the territory designated in thelicence agreement and manufactured by a sub-contractor that was not permitted in the licence agreement do not fall within the scope of lawful parallel imports, thus resulting in trade mark infringement for the reason that importation of such goods would harm the function of the trade mark (ie the function of quality guarantee and identification of source).

• Licence: If the defendant is an effective licensee of the plaintiff or other licensee of the trade mark, the use of the registered trade mark does not constitute infringement.
• Abuse of right theory: Many courts have ruled that where the exercise of a trade mark right is against public policy, or fair and equitable principle, the plaintiff cannot seek a remedy in court under the theory of the abuse of right, even though he is the owner of the registered trade mark. The trade marks which are famous in foreign countries and were registered by the plaintiff without any authorities, such as ‘Popeye’ and ‘Juventus,’ are sometimes denied the protection by a court under this theory.
• Prescription (statute of limitation): The right to demand compensation for damages concerning trade mark infringement lapses by prescription if not exercised:

– within three years of the time when a trde mark owner became aware of such damages and of the identity of the person who caused it; or
– within 20 years from the act of infringement.

3.8 To what extent can enforcement of a trade mark expose the trade mark holder to liability for an antitrust violation?

Article 21 of the Japanese Antimonopoly Law provides that it shall not apply to such acts recognisable as the exercise of rights under the Intellectual Property Laws including the Trade Mark Law. Accordingly, in general, the exercise of trade mark rights is not subject to the Antimonopoly Act and does not constitute any violation of the Antimonopoly Law in Japan. However, it is the established interpretation of article 21 of the Antimonopoly Law that, even if an act is considered on its face to be the ‘exercise of rights’ in respect of intellectual property, if such act is considered, taking into account its purpose, particular circumstances, and impact on competition in a market, to deviate from or run counter to the purposes of the legal framework to protect intellectual property rights to encourage innovation, such act will no longer be deemed an ‘exercise of rights’ in respect of intellectual property and the Antimonopoly Law will be applicable to it. There has been no court decision or statutory law ruling that a violation of the Antimonopoly Law by a trade mark owner constitutes a defence against trade mark infringement. However, there is a possibility, under the abuse of right doctrine, that a court would deny enforcement of a trade mark if granting such enforcement would result in a serious violation of the Antimonopoly Law.

3.9 Can a court only partially invalidate a trade mark?

Japanese courts can partially invalidate a trade mark, for example, invalidating some of the designated good or services and upholding others.

3.10 Is it possible to amend a registered trade mark during a lawsuit?

A registered trade mark can be amended only while the proceedings of examination or trial for opposition are pending.

3.11 Are there any grounds on which an otherwise valid trade mark can be deemed unenforceable, owing to misconduct by the trade mark holder, or for some other reason (eg expiry of time limit)?

As mentioned above, the right to claim damages lapses by prescription if not exercised within, as applicable, three years or 20 years (‘extinctive prescription’ or ‘statute of limitations’). However, there are no defences, based on laches or equitable estoppel, as is often seen in US courts, even when a trade mark owner delays filing suit for a long time, except for the circumstance where the trade mark owner implicitly grants a licence to use its trade mark to the alleged infringer.

3.12 Can a trade mark holder bring a lawsuit claiming both trade mark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trade mark is registered?

The Unfair Competition Prevention Law (‘UCPL’) protects widely known indications and famous indications including marks regardless of registration. It is possible for the plaintiff to bring another lawsuit on the ground of violation of UCPL concurrently with the lawsuit of trade mark infringement based on the same set of facts. However, in most instances the judge consolidates both the trade mark case and UCPL case since a victory in either claim is sufficient for the plaintiff.

4. Parties to Litigation

4.1 Who can sue for trade mark infringement (trade mark holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?

Not only a single owner of a trade mark, but a joint owner of a trade mark can seek an injunction against and compensation for damages from a trade mark infringer regarding his/her own share of the trade mark. Further, trade mark licensees can be plaintiffs to seek statutory remedies against the infringer of a trade mark. A trade mark licensee is generally classified into one of three categories:

• registered exclusive licensee (Senyo-Shiyoken);
• non-registered exclusive licensee (Dokusenteki-Tsujo-Shiyoken); or
• non-exclusive licensee (Hidokusenteki-Tsujo-Shiyoken).

A registered exclusive licensee, the licence of which must be registered in the Trade Mark Register at the JPO in order to take effect, is granted a right to bring a lawsuit seeking an injunction and compensation for damages under the Trade Mark Law. A non-registered exclusive licensee can claim damages incurred by itself from infringers without the licence being registered. However, there is an issue as to whether a non-registered exclusive licensee can demand an injunction in subrogation of a trade mark owner. Neither the Trade Mark Law nor court precedents have granted a non-exclusive licensee the right to seek an injunction against and compensation for damages from a trade mark infringer.

4.2 Under what conditions, if any, can an alleged infringer bring a lawsuit to obtain a declaratory judgment on non-infringement?

A trade mark owner sometimes sends a cease and desist letter to an alleged infringer, including its customers, without reliable or definite facts proving the infringement. In such case, the alleged infringer is able to file a lawsuit to obtain a declaratory judgment for non-infringement. In addition, under article 2(1)-(14) of the UCPL, the alleged infringer can demand a court to grant an injunction against a trade mark owner’s false misrepresentation to customers and compensation for damages that such alleged infringer suffered.

4.3 Who can be sued for trade mark infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to trade mark infringement by someone else?

In principle, the defendant in a trade mark infringement case should be the person or entity who uses the registered trade mark (‘direct infringement’), and directors, officers, or a parent company of the company which cause the direct infringement will not be liable. However, article 37(2)-(8) provides certain preliminary acts as trade mark infringement (‘indirect infringement’), some of which could apply to a person who itself does not use the trade mark. For example, someone who assigned the article to which a registered trade mark is attached to someone else who will use such articles in the designated service can be sued for indirect infringement under article 37(4).

4.4 Is it possible to add or subtract parties during a lawsuit?

Under the Code of Civil Procedure, the courts may order the combination of oral arguments for a case in which different parties are involved. Therefore, when a plaintiff of the pending lawsuit brings another lawsuit against another infringer, or when another right holder, such as a co-owner of the trade mark, brings a lawsuit against a defendant of the pending lawsuit based on the same trade mark, the procedure would become consolidated if the court orders a combination of oral arguments. On the other hand, a plaintiff may voluntarily dismiss a lawsuit against any defendant at any time before the defendant files an answer with the court, but only with the defendant’s acceptance after the defendant has filed an answer with the court.

5. Enforcement Options

5.1 What options are open to a trade mark holder when seeking to enforce its rights in your country?

In connection with trade mark infringement, not only civil remedies, including an injunction and compensation of damage, but also other remedies, such as criminal penalties, border measures and alternative dispute resolutions, such as conciliation and arbitration, are available to a trade mark owner, as described in more detail below.

5.2 Are criminal proceedings available? If so, what are the sanctions?

Criminal proceedings are available. As a result of the amendment to Trade Mark Law in 2006, criminal sanctions for trade mark infringement were stiffened. Any individual who has committed direct infringement can be liable for imprisonment with labour not exceeding 10 years or for a fine not exceeding ¥10 million (article 78 of the Trade Mark Law). Liability for imprisonment with labour not exceeding five years or for a fine not exceeding ¥5 million can apply to a individual who has committed indirect infringement. Furthermore, where an officer representing a company or a representative, employee or any other servant of a company has infringed a trade mark right with regard to the business of the company, in addition to the offender, the company is liable for a fine not exceeding ¥300 million (article 82 of the Trade Mark Law).

5.3 Are border measures available?

Border measures are available. Under the Customs Tariff Act, a trade mark owner may, where cargo considered to infringe the trade mark is imported, file a petition with the Customs Director for an importation suspension by submitting necessary evidence establishing a prima facie case for infringement (article 21-2). The Customs Director has authority to order confiscation, destruction, or reshipment of goods prohibited from being imported.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?

In principle, the enforcement of a trade mark right under Japanese Trade Mark Law is permitted only within the territory of Japan, and Japanese courts will grant injunctive relief only if the act of trade mark infringement is conducted in Japan (‘principle of territoriality’).

5.5 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?

Such actions are not recognised by Japanese courts.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trade mark disputes? If arbitration is available to assess invalidity, will your Patent Office recognise and execute an arbitral award declaring a trade mark invalid?

In Japan, there are two types of alternative dispute resolution (‘ADR’) procedures: conciliation and arbitration. These ADR procedures, however, are not frequently used since the court system for the protection of trade marks in Japan works well in terms of the speed of litigation and reliability of the judgments of the special IP division of the District Court and the IP High Court. The procedures for conciliation and arbitration in Japan can be briefly summarised as follows.
If a dispute has arisen in respect of trade mark infringement, the party concerned may file an application for conciliation with the court. In a conciliation procedure, the Conciliation Committee, which is composed of one judge and two civil conciliation members, hears the case, and if an agreement is reached between both parties in the conciliation and is stated in the protocol, it is deemed that a conciliation has been formed and such statement has the same effect as a judicial compromise (article 15 of the Law for Conciliation of Civil Affairs). The Tokyo District Court and the Osaka District Court have a special conciliation system for IP matters, where attorneys-at-law and patent attorneys well versed in IP matters are appointed as conciliation members.
In an arbitration procedure, the parties concerned conclude an arbitration agreement, and arbitrators hear the case. Although an arbitral award has the same effect as a final and conclusive judgment, a party seeking enforcement based on the arbitral award is required to apply to a court for an enforcement decision (articles 45 and 46 of the Arbitration Law). Arbitration awards only affect the parties to an arbitration agreement. The JPO neither recognises nor executes arbitration awards declaring a trade mark invalid. The Japan Intellectual Property Arbitration Center, where attorneys-at-law, patent attorneys and former judges are appointed members, deals with IP matters.

6. Procedure in Civil Courts

6.1 What is the format of trade mark infringement proceedings?

Trade mark infringement litigation is commenced by a plaintiff by filing a complaint with the court. A complaint must contain a specific allegation of the fundamental facts and of the substantial evidentiary facts, and the plaintiff is required to attach to the complaint such basic materials as copies of the material documentary evidence.
Once a complaint and summons are served, the defendant is required to file an answer with the court and attach copies of the material documentary evidence to the answer. Then, the judge holds a hearing date for both the plaintiff and defendant about once a month at a courtroom or a meeting room to sort out disputed issues after studying briefs submitted by the plaintiff and defendant.
The process of trade mark infringement litigation is divided into two stages:

• the first stage (Shingai-Ron), where the court examines whether the trade mark infringement exists; and
• the second stage (Songai-Ron), where the court examines the amount of damages.

In the first stage, if after hearing arguments and evidence from the parties the judge reaches a conclusion in favour of the defendant, the judge may not move the case to the second stages and may close the trial. On the contrary, if the judge reaches a conclusion in favour of the plaintiff in the first stage, the judge often discloses the conclusion to the parties and makes a suggestion for settlement. The judge often sets several dates for settlement, suggesting appropriate terms and persuading the parties to make concessions. If the parties do not reach a settlement, the judge may move the case to the second stage or sometimes render an interlocutory judgment in order to conclude the first phase.
The statistics show that more than 50 per cent of all IP infringement cases, including trade mark infringement, are resolved by judicial settlements at the district court.

6.2 Are disputed issues decided by a judge or jury?

As no jury system exists in Japan, the judges alone hear all the arguments and evidence. In general, cases are usually heard by either a panel of three judges or a single judge at the district court. A panel of three judges hears most trade mark infringement lawsuits.

6.3 To what extent is survey evidence used (eg to support acquired distinctiveness, likelihood of confusion)? What is its relevance in proceedings (eg party allegation, evidence)? Who decides which consumers are questioned in the survey (eg the court, court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

Consumer surveys have become more popular recently as documentary evidence in trade mark litigation, but seem to still play a side-roll in terms of formation of the judgment of a court. Consumer surveys are submitted to a court as indirect evidence aiming to prove the similarity of trade marks or confusion by a plaintiff and/or defendant. Under the principle of free evaluation of evidence, a judge is supposed to evaluate and determine the result of such survey depending upon the logical law and the empirical rule. There are many consumer surveys rejected or held invalid by a court on the ground that questions were inappropriate, in particular, leading questions. The cost of a consumer survey depends upon the scale of the survey, and is not recoverable from the losing party (Law concerning the Cost for Civil Procedure).

6.4 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

The evidence submitted to the criminal proceedings is admissible in civil proceedings. However, since the evidence rule for criminal proceedings is stricter than that of civil proceedings, in general the evidence obtained in civil procedure cannot be submitted to the criminal court without defendant approval.

6.5 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?

There are some statutory means for obtaining evidence from an adverse party or third parties in Japan, although there is not as strong a discovery procedure as in the US.
First, the party may file a motion for an examination, and preservation of the results of such examination, prior to filing a lawsuit (evidence preservation, Shoko-Hozen). The requirement for this evidence preservation motion is that it would be too late to conduct an appropriate examination of evidence if the court were to wait for the scheduled presentation of evidence at court (article 234 of the Code of Civil Procedure). However, the courts in fact often deny these motions unless the necessity is fully established, because it would likely inflict irreparable harm on the defendant, as trade secrets of the defendant may become known to the other side. It should also be noted that the order for evidence preservation only has a non-binding effect.
Second, as a result of amendments to the Code of Civil Procedure in 2003, a party may, prior to the commencement of a lawsuit, inquire in writing to the adverse party about the matters which are clearly necessary for the preparation of the lawsuit. The court may, upon a motion of a party, make dispositions prior to the commencement of a lawsuit to collect evidence such as a request for transmission of a document, a request to government offices and so forth, after hearing from the adverse party. A written notice indicating the intent of a would-be plaintiff to sue a would-be defendant is a prerequisite for these pre-trial procedures.
Lastly, during a lawsuit, the court may, upon a request of a party, order the other party to produce documents necessary for the proof of alleged infringement or the assessment of the damages caused by the infringement. However, submission of documents can be refused when there is a legitimate reason, such as a trade secret (article 105 of the Patent Law). When the party does not obey the order for the production of documents without a legitimate reason, there is a presumption in favour of the claim made by the requesting party.

6.6 What level of proof is required for establishing infringement or invalidity?

The standard of proof does not have to be beyond all doubt, but it is required to satisfy a high probability.

6.7 How long do trade mark infringement proceedings typically last? Is it possible to expedite this process?

Court procedure has accelerated considerably in recent years, and the average pendency time for concluded IP cases in 2004 was about 13.8 months, which was about half the time of 10 years ago.

6.8 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?

There is no effective way available for a defendant to cause delay to the proceedings in Japan.

7. Final Remedies

7.1 What remedies are available against a trade mark infringer? (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)

There are three types of civil remedies for trade mark infringement, namely:

• the right to demand an injunction;
• the right to claim damages; and
• the right to recover business reputation.

With regard to injunctive relief, article 36 of the Trade Mark Law prescribes that a trade mark owner may require a person or entity who is infringing or is likely to infringe the trade mark to discontinue or refrain from such infringement. Furthermore, a trade mark owner may demand the destruction of articles by which an act of infringement was committed, the removal of the facilities used for the act of infringement, or other measures necessary to prevent the infringement. However, an order for recall or publication of the decision is not permissible. Even if the defendant has not yet started to manufacture or sell the infringing product, a trade mark owner could seek an injunction where an infringement is likely to be committed.

7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

It is possible to obtain a final injunction against suppliers and customers. However, if customers are not using a trade mark ‘commercially’ (or ‘in the course of trade’), a trade mark owner cannot obtain injunctive relief against customers.

7.3 What monetary remedies are available against a trade mark infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?

In order to claim damages, a trade mark owner must basically prove three requirements, namely:

• the infringer was wilful or negligent in the act of infringement;
• the amount of damages incurred by the trade mark owner; and
• the causation between the act of infringement and the damages.

To alleviate the burden of the trade mark owner on claiming damages, there are statutory presumptions in the Trade Mark Law. First, negligence of the infringer is presumed (article 39). The second presumption relates to damages. Although punitive damages are not permitted in Japan, there are special provisions regarding the presumption of the amount of damages. Article 38(1) of the Trade Mark Law provides that the amount of damages is presumed to be the sum of money obtained by multiplying the quantity of the infringing products by the unit profit that could have been gained by the trade mark owner. Article 38(2) also presumes that the profits gained by the infringer through the act of infringement to be the amount of damages. Furthermore, damages can be presumed to be equal to the amount of royalties receivable to the trade mark owner under article 38(3).

8. Preliminary Relief

8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?

A preliminary injunction is available to a trade mark owner to stop infringement when it is necessary to avoid substantial damages or imminent danger on the side of a trade mark owner (article 23(2) of the Civil Preservation Law). The necessity is determined taking into consideration the specific circumstances of each particular case.
If a preliminary injunction is to be granted, the court usually orders a petitioner to deposit a bond prior to granting the injunction, which is expected to compensate the damage incurred by the respondent if the preliminary injunction is overruled later. The amount of the bond is decided on the basis of the foreseeable damages the respondent would suffer.

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

As mentioned in question 8.3, a court must hold oral proceedings or an interrogation of the respondent in order to grant a preliminary injunction, and an ex parte preliminary injunction is not available.

8.3 What is the format of preliminary injunction proceedings?

A motion for preliminary injunction must be filed with a district court. As a preliminary injunction seeking to stop the manufacture or sale of a product affords substantially the same result as winning the main lawsuit, which would likely cause extremely severe damage to the respondent, oral proceedings or an interrogation of the respondent must be held by the judge at the court (article 23(4) of the Civil Preservation Law). In practice, the courts usually hold an interrogation, but oral proceedings are rarely initiated.
In a preliminary injunction case, the judge calls in counsel for both the petitioner and respondent about once every month or three weeks. If the main lawsuit and the motion for preliminary injunction are filed jointly, it may happen that the preliminary injunction case is heard parallel to the main lawsuit.
Preliminary injunction cases are heard by either a panel of three judges or by a single judge. When the preliminary injunction case is heard parallel to the main lawsuit, a panel of three judges usually hears the case.

8.4 Can the defendant put the validity of a trade mark in issue in preliminary injunction proceedings?

The respondent can raise an invalidity defence against the trade mark at issue in preliminary injunction proceedings, as in the main lawsuit.

8.5 To what extent are documents, affidavits, witnesses, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

The evidence submitted in a preliminary injunction case is limited to that which can be examined immediately, and there is no commissioning of investigations, mailing of documents, or ordering the submission of written documents.

8.6 What level of proof is required to establishing infringement or invalidity in preliminary injunction proceedings?

The level of proof is, unlike in the main lawsuits, prima facie.

8.7 How long do preliminary injunction proceedings typically last?

According to the statistics provided by the Supreme Court, in 2003, the average pendency time for IP preliminary injunction cases, including those for trade mark infringement, was about five months.

8.8 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?

When a preliminary injunction is granted prior to commencement of the main lawsuit, the court must, upon application by the respondent, order the petitioner to file the main lawsuit and submit a document showing such filing within a term designated by the court. If there is a failure to comply with this court order, the order granting the preliminary injunction must be vacated upon application of the respondent (article 37 of the Civil Preservation Law).

9. Appeal

9.1 What avenues of appeal are available for a defeated party to main proceedings or preliminary injunction proceedings?

The losing party in a district court case may file a Koso appeal to the IP High Court within two weeks of the day of service of the judgment on the appellant. Because the Koso appeal court is still a court conducting fact-finding proceedings, the grounds for Koso appeal may be not only errors in the application of law in the judgment but errors in the finding of fact. A case in the IP High Court is usually heard by a panel of three judges, but a case which involves an important matter of law the outcome of which may significantly impact IP practices would ordinarily be heard by the Grand Panel consisting of five judges, which was introduced in April 2004.
The losing party in an IP High Court case may file a Jokoku appeal to the Supreme Court within two weeks of the day of service of the judgment on the appellant. Because the Supreme Court is a court ruling on matters of law and is bound by the facts found at the IP High Court, the grounds for a Jokoku appeal are limited to a violation of the Constitution in the IP High Court judgment or substantial illegalities of procedure in the lower court. In addition, the losing party may file a petition for a Jokoku appeal (Jokoku-Juri-Moushitate) on the grounds that the judgment contains an important issue of interpretation of law, or is contrary to precedent. However, like the system under the US writ of certiorari, the Supreme Court can exercise its discretion whether to grant such petition.

Appeal of preliminary injunction
When a preliminary injunction is granted, the respondent may file an objection (Hozen-Igi) with the district court which granted it. Upon hearing both parties, the court must approve, change or repeal the original order.

9.2 How long do appeal proceedings typically last?

The average pendency time for IP Koso appeal cases in 2004 decreased to about nine months as a result of the introduction of the intensive hearing method from January 2003.

10. Litigation Costs

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

When a trade mark owner files a lawsuit or preliminary injunction for trade mark infringement, the trade mark owner must pay filing fees by affixing to the complaint or other documents revenue stamps in an amount set by the Civil Litigation Costs Law. Attorneys’ fees are also incurred, and these are usually calculated on either a time-charge basis or retainer/contingency basis.

10.2 Are costs recoverable from the losing party?

The losing party must pay the litigation costs (article 61 of the Code of Civil Procedure), which are limited to filing fees, transportation fees for an expert designated by a court etc. Attorneys’ fees are not included in litigation costs. However, it should be noted that a person who is injured by a tortious act and is thereby obliged to hire an attorney may recover reasonable attorneys’ fees as part of the damages at the discretion of the court, but not as litigation costs. This rule has become one of general application in tort litigation.

11. Forthcoming Legislation

11.1 What are the important developing and emerging trends in your country’s trade mark law?

Japan appears to be finally emerging from an unprecedented economic depression during most of the 1990s. It is likely that a key source of Japan’s continued competitiveness and economic growth will be added value and productivity fuelled by intellectual property. With such awareness, the Japanese government declared that it would promote IP as a national policy and took the first step toward becoming an intellectual property-based nation with the enactment of the Basic Law on Intellectual Property in 2002. Since then, a series of specific reforms have been made and are still in the process of being made at an exceptionally fast pace, all of which are having considerable influence on every aspect of economic activities relating to the creation, protection, and exploitation of IP.

11.2 To the extent it relates to trade mark enforcement, outline any major trade mark legislation in the pipeline.

As the Japanese government declared promoting IP as a national policy, a variety of amendments were made to improve the proceedings of lawsuits in the field of trade mark litigation, such as reinforcement of specialised proceedings, human resources in the courts, and proceedings for obtaining evidence, most of which have been mentioned above. In addition, as already described, the amendments to the Trade Mark Law in 2006, which took effect as of 1 January 2007, further strengthen the protection of trade mark rights by expanding the scope of trade mark infringement to acts of exporting infringing products, and by enhancing the criminal penalties for trade mark infringement. For additional information on IP legislation, please see the Intellectual Property Strategic Program which has been developed by the government of Japan every year since 2003 and is available on the internet (www.kantei.go.jp/jp/singi/titeki2/kettei/060609keikaku.pdf).

12. Useful References

12.1 Please identify any useful works of reference relating to trade mark law and trade mark litigation in your country including useful websites.

N Nakayama Industrial Property Law, Vol 1 (2nd ed, 2000)
C Heath (ed) Intellectual Property Law in Asia (2003)
Journals of The Japanese Group of AIPPI
The Supreme Court’s home page: www.courts.go.jp/
The IP High Court’s home page: www.ip.courts.go.jp/
The JPO’s home page: www.jpo.go.jp/
The Secretariat of IP Strategy Headquarters’ home page: www.ipr.go.jp.