カテゴリー: Non-use cancellation

Japan IP High Court Ruling: “Designed, Quality-controlled in France” is not equivalent to “Made in France”

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On March 22, 2022, in an appeal against the non-use cancellation decision by the Japan Patent Office (JPO), the Japan IP High Court affirmed the JPO’s decision and ruled it is not construed that a disputed mark “I R O PARIS” has been used on its designated goods with a limitation of the origin ‘All made in France’ because the term is not equivalent to ‘designed, or quality-controlled in France’.

Disputed mark “I R O PARIS”

A French fashion house, IRO has registered a wordmark “I R O PARIS” on various goods e.g., jewelry, watches, leather, bags, umbrella, wallets, clothing, shoes, sports shoes, headgear in classes 14, 18, and 25 with a limitation of the origin ‘all made in France’ in 2013 (TM Reg No. 5623868).

Non-Use Cancellation

Article 50 of the Japan Trademark Law provides if a trademark registered in Japan has never been used in commerce in Japan for three consecutive years or longer after registration, the trademark is vulnerable to cancellation provided that third parties file a petition for cancellation of the trademark registration.

iROO International Co., Ltd., a Taiwanese company, filed a petition for non-use cancellation against the disputed mark on every goods of three classes on October 4, 2019.

In the cancellation action, the registrant produced evidence (order form, invoice, magazines) to demonstrate the actual use of the mark “IRO” and “www.iroparis.com” on skirts, belts, and dresses in Japan. The JPO admitted these marks are equivalent to the registered mark “I R O PARIS”. However, the JPO found the goods bearing the mark are not “made in France”, but “made in China”. If so, the disputed mark has not been precisely used on designated goods. Because of it, the Cancellation Board decided to cancel the disputed mark in whole on March 24, 2021.

IRO filed an appeal against the JPO decision on July 29, 2021, and argued the mark “IRO” has been used on goods designed by employees working at the head office in Paris (France). The head office has exclusive authority to control the quality of every item, namely, selecting suitable materials, producing samples made of materials available in Paris, securing the quality of goods made by suppliers, and storing finished goods in a warehouse in Paris before delivery. In view of actual commitment to quality control of final goods made by suppliers and common industry practice in the apparel, the goods shall be construed ‘made in France’ even if it was manufactured by an overseas supplier.

IP High Court decision

The court found the JPO did not err in fact-findings. In fact, the goods bearing the mark “IRO” were manufactured by suppliers having a place of business out of France. On the plaintiff’s website “IRO FALL WINTER 21 COLLECTION”, it mentions the product was made in China.

The disputed mark designates ‘clothing made in France’. It shall be construed the clothing was made in the territory of France. If so, the clothing made out of France would never be deemed identical to the designated goods.

The court has no reason to believe “designed, quality-controlled in France” is equivalent to ‘made in France’ in the literal interpretation of Article 50 of the Japan Trademark Law.

Based on the foregoing, the IP High Court dismissed the appeal and affirmed the cancellation decision.

[Judicial case no. Reiwa 3(Gyo-ke)10087]

This case teaches how important for brand owners to keep designated goods consistent with the actual business. It often happens that the goods bearing a mark containing GI are made in other countries or regions as a matter of fact. Such inconsistency may result in non-use cancellation if the designated goods limit the origin.

As an experienced trademark practitioner, I never fail to confirm the relation between goods and GI when a mark contains GI. In case a brand owner does not manufacture in the area, it is advisable to limit goods by placing more adequate terms, such as ‘designed by (area), derived from (area), using material from (area).’ Otherwise, you may lose your trademark registration in Japan as a result of non-use cancellation.

Securely Protecting Trademark Abbreviations

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Japanese is prone to abbreviate trademarks. Occasionally, the abbreviation has no resemblance to its original name. A brand owner should be mindful of how the public perceives and uses its trademarks in Japan. Abbreviations or nicknames used by the public are not protected under the respective registrations given that they have no resemblance to the original names.

“Family Mart”, Japan’s second-largest convenience store franchiser since 1973, with more than 15,000 locations, is commonly called “Fa-mi-ma” among consumers. It is true that Family Mark has used only “Family Mart” in the ordinary course of their business for more than three decades. But, eventually, Family Mart decided to adopt the name on their store opened in urban office or commercial buildings.

I suppose it aims at avoiding risks of the “Famima” mark registration by a third party in view of high recognition for the name among relevant consumers and dissimilarity to “Family Mart”. Now, the mark is securely registered in the name of Family Mart.

Trademark abbreviations may serve as a barometer for well-recognition of the mark among the general public in Japan. In this respect, trademark abbreviations would not be a matter only for the Japanese company, but also for foreign brand owners. Where a trademark is composed of five sounds or more, you should mind that the general public in Japan gets to call the mark in abbreviation contrary to the brand owner’s intention. A combination mark is an easy target for abbreviation as well. BOTTEGA VENETA is called “BOTTEGA”. LUIS VUITTON is known as “VITON”. DOLCE & GABBANA is popularly called “DOLU-GABA”. STARBUCKS COFFEE is known as “SUTABA”. TOMMY HILFIGER is called “TOMI-HIRU”. Undoubtedly, the most popular name recognized in the abbreviation is “McDonald”. We seldom call it in the full name. One of the most popular fast-food chains and one of the top franchises in the world has always been called “MAKUDO” or “MAC”.

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.

It came to my notice that ABERCROMBIE & FITCH, known for its shortened name “ABA-KURO”, sought Japanese trademark registration of “ABACRO” in English and its Japanese transliteration, but ended in vain due to a conflict with a senior trademark registration “ABERCRO”. A&F was unsuccessfully challenging the senior trademark registration based on non-use grounds.

Coffee Trademark Battle

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Colombian Coffee Federation (FNC) failed a fight for invalidation of Japanese TM Registration no. 5901554 for word mark “EMERALD” in class 30 owned by The Coca-Cola Company, one of the world’s largest beverage company in the US.
[Invalidation case no. 2018-890017, Gazette issued date: August 28, 2020]

EMERALD MOUNTAIN

Emerald Mountain is a top brand name of Colombian coffee approved by FNC (NGO organization, the union of coffee producer established in 1927 joining over 560,000 members for enhancing quality, production, and export) guaranteed hand-picked and hand-screened beans of which quantity is only 3 –1% of the total production of Colombia coffee beans.

The FNC owns several trademark registrations for “EMERALD MOUNTAIN” in Japan.

In the early 90s, Emerald Mountain began to be sold by Coca-Cola as canned liquid coffee under the Georgia brand in thousands of vending machines across Japan. Since 1997 it has become the most sold coffee in Japanese history as well as the #1 beverage sold by Coca-Cola in Japan. Every can of Georgia Emerald Mountain coffee has an explanation of the Colombian origin of the coffee as well as the high-quality certification of the FNCS. With annual sales of more than 630 million cans, Georgia Emerald Mountain Blend is undoubtedly Emerald Mountain’s leading product within the Japanese market.

EMERALD

Irrespective of a long-standing relationship, The Coca Cola Company, in 2011, sought registration for a wordmark “EMERALD” over artificial coffee, coffee-based beverages, prepared coffee and cocoa, tea, ice in class 30 which confronted with a severe objection from FNC.

FNC was successful in removing the registration by means of a non-use cancellation in 2017. However, The Coca Cola Company deliberately filed a new trademark application for the same mark in 2015 immediately when the registered mark was vulnerable for cancellation on grounds of non-use. The JPO allowed registration of the new application in December 2016.

To contend, FNC filed an invalidation action against the EMERALD mark in March 2018.

Invalidation petition by FNC

FNC argued the EMERALD mark shall be invalidated in contravention of Article 4(1)(vii), (x), (xi), (xv), and (xix) of the Trademark Law by stating that “EMERALD MOUNTAIN” has acquired substantial reputation and popularity as an indicator of high-quality Columbian coffee as a result of continuous sales promotion in Japan since 1970. In the coffee industry, coffee beans grown in highland are often named with the term “MOUNTAIN”, e.g. “BLUE MOUNTAIN”, “CRYSTAL MOUNTAIN”, “CARRIBERAN MOUNTAIN”, “CORAL MOUNTAIN”. In this respect, “EMERALD” shall play a prominent role in “EMERALD MOUNTAIN”. If so, both marks are deemed similar and it is likely that relevant consumers confuse or associate artificial coffee, coffee-based beverages, prepared coffee and cocoa, tea, ice bearing the EMERALD mark with “EMERALD MOUNTAIN”.

Besides, The Coca Cola Company has been using “EMERALD MOUNTAIN” on canned-liquid coffee under license from FNC. Presumably, the disputed mark was filed in anticipation of non-use cancellation claimed by FNC. In the cancellation proceeding, The Coca-Cola Company did neither answer nor respond. These facts clearly show the disputed mark was filed just to avoid cancellation even if The Coca-Cola Company had no intention to use it. It is really annoyance and free-riding on the famous marks with a fraudulent intention.

JPO decision

From the totality of evidence and circumstances, the JPO admitted a high degree of reputation and popularity of EMERALD MOUNTAIN as a source indicator of FNC’s high-quality Columbian coffee beans. In the meantime, the JPO questioned if relevant consumers connect the term “EMERALD” with FNC when used on coffee since the evidence did not disclose EMERALD MOUNTAIN is actually abbreviated to “EMERALD” in commerce. Likewise, it is suspicious whether “BLUE MOUNTAIN”, “CRYSTAL MOUNTAIN”, “CARRIBERAN MOUNTAIN”, “CORAL MOUNTAIN” are recognized with its short name, namely, “BLUE”, “CRYSTAL”, “CARRIBEAN”, “CORAL”.

In assessing the similarity of the mark, the JPO found “EMERALD MOUNTAIN” and “EMERALD” are dissimilar from visual, phonetic, and conceptual points of view. Given both marks are distinctively dissimilar, it is unlikely to find a likelihood of confusion in connection with the goods in dispute.

Even if The Coca-Cola Company filed the disputed mark with an intention to avoid the non-use cancellation, it would be anything but punishable in view of dissimilarity between marks. Besides, from the produced evidence, the JPO was unable to find fraudulent intention by Coca Cola to be blamed for invalidation.

Based on the foregoing, the JPO decided to dismiss the invalidation action.

How to remove a senior registered mark in the most effective manner

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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)

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

Article 50 (1) of the Trademark Law provides that;

Where a registered trademark (including a trademark deemed identical from common sense perspective with the registered trademark, including a trademark consisting of characters identical with the registered trademark but in different fonts, a trademark that is written in different characters, Hiragana characters, Katakana characters, or Latin alphabetic characters, from the registered trademark but identical with the registered trademark in terms of pronunciation and concept, and a trademark consisting of figures that are considered identical in terms of appearance as those of the registered trademark; hereinafter the same shall apply in this article) has not been used in Japan in connection with any of the designated goods and designated services for three consecutive years or longer by the holder of trademark right, the exclusive right to use or non-exclusive right to use, any person may request a cancellation trial of such trademark registration in connection with the relevant designated goods or designated services.

 

In Japan, burden of proof to demonstrate genuine use of the disputed mark during the past three years rests just on trademark owner. In other words, 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 boosts preference to non-use cancellation trial.

It also should be noted that claimant is not obliged to file a non-use cancellation against the entire goods/services designated by registered mark in dispute. In the meantime, Article 50(2) provides that non-use cancellation trial results in fail where trademark holder successfully proves genuine use of the registered mark on any one of goods/services in question. It means the more goods/services are requested for cancellation trial, the less likely to win the trial, since the Trademark Law does not allow partial cancellation decision.

 

Article 50(2)

Where a request for the cancellation trial under the preceding paragraph is filed, unless the trademark holder proves that any of the holder of trademark right, exclusive right to use or non-exclusive right to use has used the registered trademark in Japan in connection with any of the designated goods or designated services pertaining to the request within three years prior to the registration of the request for the trial, the holder may not prevent cancellation of the trademark registration in connection with the relevant designated goods or designated services; provided, however, that this shall not apply where the holder shows just causes for non-use of the registered trademark in connection with the relevant designated goods or designated services.

 

Today’s lesson: Grasp all, lose all.