カテゴリー: trademark infringement

Hermes Wins Birkin & Kelly Bag’s 3D Trademark Infringement Lawsuit

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On March 9, 2023, the Tokyo District Court awarded HERMES INTERNATIONAL JPY5,640,112 for infringement of its trademark right pertinent to the 3D shape of the Birkin bag and Kelly bag.

[Judicial case no. Tokyo District Court – Reiwa3(wa)22287]

3D mark of Hermès Birkin and Kelly Bag

HERMES INTERNATIONAL, a French luxury fashion house, has owned Japanese trademark registration no. 5438059 for the 3D shape of the “Birkin” bag and no. 5438058 for the “Kelly” bag in connection with handbags (class 25) since 2011 by successfully demonstrating acquired secondary meaning as a specific source indicator of Hermès’ luxury bags.

Birkin and Kelly Bag Imitations

Hermes sued NAO INTERNATIONAL Co., Ltd. at the Tokyo District Court for violating its trademark right and the unfair competition prevention law by allegedly selling 214 Birkin look-alike bags and 184 Kelly look-alike bags in Japan with a price tag of JPY2,270 (approx. USD20) at their brick-and-mortal shops and online shop from December 20, 2019, to February 13, 2021.

Court decision

The Tokyo District Court found that the defendant’s bags respectively resemble 3D marks representing Hermès Birkin and Kelly Bag in an appearance on the ground that the defendant’s bags contain a basic and unique configuration enabling to distinguish Hermès Birkin and Kelly Bag from others. A difference in details is trivial and would not give rise to a distinctive impression in the mind of consumers.

Taking into consideration the fact that both bags are promoted for sale at the department store, the court has a reason to believe relevant consumers are likely to confuse the source of the defendant’s bags with Hermes.

Even though there is a severe price gap between the Hermes bag and the defendant bag, bearing in mind that authentic second-hand Hermès handbags are sold relatively at low prices, such a price gap would be anything but sufficient to negate the likelihood of confusion.

The court measured damages to recover (i) the defendant’s actual profits of infringing bags (JPY5,150,140) by reducing 20% (not attributable to goodwill on Hermès bags) for JPY4,120,112, (ii) “mental suffering” caused by an infringement for JPY1,000,000, and (iii) reasonable attorney fee for JPY520,000.

To read a full text of the Tokyo District Court decision (Japanese only), click here.

Famous mark Protection under Trademark Law

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Japan is a rigid “first-to-file” jurisdiction, meaning that it is necessary to register a trademark in order to obtain proprietary rights over it in principle. Prior use of the trademark is insufficient to be protected under the Trademark Law. The only meaningful exception to this rule is the treatment of so-called famous trademarks even if they have not been filed yet. But it should note owners of famous trademarks can’t file an infringement lawsuit based on the trademark right without registration in Japan. The Trademark Law provides special provisions to protect the famous trademarks. However, the statute never refers to the “famous” mark. It only refers to “recognized” marks, “widely recognized” marks, and “highly recognized” marks.

Relative grounds for refusal, opposition, invalidation

Like other jurisdictions, the Japan Trademark Law prohibits registration of junior marks which are the same as or similar to senior marks that are effectively registered in Japan under Article 4(1)(xi). In order to provide broader protection of famous trademarks, the Law stipulates extra grounds for refusal, opposition, and invalidation on Article 4(1)(x), (xv), (xix).

Article 4(1)(x)

Trademarks that are the same as or similar to trademarks that are widely recognized by consumers as marks indicating the goods or services of another and are used on the same goods or services or similar to those of the other party may not be registered.

Article 4(1)(xv)

Trademarks that are likely to cause confusion in connection with the goods or services related to another’s business may not be registered.

Article 4(1)(xix)

Trademarks which are the same as or similar to trademarks that are widely recognized among consumers either in Japan or in foreign countries as identifying the goods or services related to another’s business and are used for illicit purposes such as trading off the goodwill of another or causing damage to another may not be registered.

These articles spotlight that the Japan Trademark Law considers (1) “similarity” as a most critical issue to determine the scope of protection to famous trademark and (2) “likelihood of confusion” as other legal concepts different from “similarity”.

Defensive mark

A famous trademark may be registered as a defensive mark to cover other identified goods or services than those listed in the original registration under Article 64. These additional goods or services need to be dissimilar to the original goods or services and the registrant needs to prove (1) that the mark is “widely recognized by consumers” and (2) that confusion is likely if the mark is used on these additional goods or services by a third party.

Noteworthy is that defensive mark registration would not be vulnerable to non-use cancellation. Besides, the registrant is entitled to take action against a third party for trademark infringement even if the mark was used on the goods or services that are remotely associated with his business.

Prior use rights

As stated above, a mere prior use is insufficient to be protected under the Trademark Law. Prior user is entitled to defense for trademark infringement only where the mark is “widely recognized by consumers” as identifying the goods or services of the prior user at the filing date of initial trademark application by the registrant under Article 32.

Enforcement/Infringement

Unauthorized use of the mark that is the same as or similar to the registered mark constitutes trademark infringement under Articles 25 and 37(i).

As a matter of law, the Trademark Law does not provide broader protection of famous trademarks in enforcement. No specific provision is given to prohibit famous trademark dilution and parody. There is a considerable gray zone in the Trademark Law when it comes to the unauthorized use of “non-similar” marks that are likely to cause confusion with famous trademarks.

Japan: Trademark Law Revision Act promulgated on May 21, 2021

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The Japan Trademark Law Revision Act of 2021 (Act No. 42) passing congress on May 14, 2021, was promulgated on May 21.

Hot topics of trademark-related revision are:

1. On-line oral hearing

Under the current law, the Japan Patent Office (JPO) has no choice but to hold an oral hearing for administrative proceedings only when the parties are physically present in the oral proceedings. The revised act enables the JPO to hold oral proceedings by video conference.

2. Notifications by email

Under the current law, trademark applicant via the Madrid Protocol gets to know the status of registration only by means of receiving written notification from the JPO. The revised act allows the JPO to electronically send registration notifications to the applicant via the International Bureau by email.

3. Customs enforcement

In view of an increasing number of counterfeits imported for private use, the revised act restricts the counterfeits that were exported from a foreign country via postal mail by a business entity even if purchased by a private person in Japan and constitute trademark infringement at the time when they enter the territory of Japan.

4. Payment of second official fee for registration via the Madrid Protocol

Article 68-30 of the revised act looks attractive to Madrid users indeed. The Madrid users are no longer required to pay a second official fee to the JPO in order to accomplish trademark registration in Japan.

5. Fee increase

The revised act increases official fees for trademarks by more than 10%. Details will be decided by the JPO.

Official feeExistingRevised act
Filing feeJPY28,200/classLess than JPY32,900/class (17% increase)
Registration feeJPY38,800/classLess than JPY43,60/class (12% increase)

When does the revised act come into force?

The revised act is set to become effective within a year from the promulgation date.

IP High Court affirmed TM infringement in favor of Wenger over cross design

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On April 21, 2021, the Japan IP High Court affirmed the Tokyo District Court’s decision in favor of Wenger S.A. and ruled to dismiss the appeal brought by TravelPlus International who was sentenced for trademark infringement by using cross design marks similar to the Wegner cross on backpacks. [Court case nos. IP High Court Reiwa2(ne)10060]

WENGER

Wenger, the Swiss company, has owned international registration no. 1002196 for the cross mark (see below) for use on backpacks of class 18 and others goods in Japan since November 5, 2010.

SWISSWIN

TravelPlus International (TI) distributed “SWISSWIN” brand backpacks adorned with a logo evoking the Swiss flag which consists of a cross surrounded by a square in Japan. According to the court decision, an affiliated company of TI has produced the Wenger bags as an OEM vendor.   

IP High Court ruling

The IP High Court dismissed the appeal entirely and issued a decision addressing the interpretation of similar marks evoking the Swiss flag that is unregistrable under the Trademark Law.

1. Evaluation of color difference on cross design

TI argued color difference shall be a crucial factor in this case based on Article 4(1)(iv) of the Japan Trademark Law that prohibits registration of an identical or similar mark to the Red Cross.


However, the judge denied the allegation by stating that any cross design dissimilar to the Red Cross can be registrable under the article. If so, it does not make sense to find the color difference on cross designs that would materially affect the similarity of the marks. Both marks should be assessed in their entirety by taking account of other elements as well.

2.  Assessing figurative element except for cross design

TI argued both marks should be assessed similarly on the assumption that the square plays a dominant role of source indicator based on Article 4(1)(i). Any mark identical or similar to a foreign national flag is unregistrable under the article. If so, it should not be allowed to claim trademark infringement based on the cross design which is undoubtedly similar to the Swiss flag.

However, the judge dismissed the allegation and reiterated its stance that in finding similarity of the mark, both marks should be assessed in their entirety, not only with the square but also the cross, since both marks just consist of these elements.

Hermès beat Birkin Bag Imitator for Trademark Infringement

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On December 17, 2020, the Japan IP High Court upheld awards for JPY2,900,000 for damages suffered by Hermès in relation to a trademark infringement and passing-off case regarding the Birkin Bag imitations.
[Court case no. Reiwa2(Ne)10040]

Hermès Birkin Bag

HERMES INTERNATIONAL, a French luxury fashion house, has owned Japanese trademark registration no. 5438059 for the 3D shape of the “Birkin” bag in connection with handbags of class 25 since 2011 by successfully demonstrating acquired secondary meaning as a specific source indicator of Hermès’ luxury bags.

The iconic Birkin bag was firstly created for Jane Birkin in 1984. It is known for its superior craftsmanship and jaw-dropping price tag, with standard models starting around JPY1,000,000. Its annual sales figures exceed 3,000 in 1998, 8,000 in 2003, and 17,000 in 2009.

Birkin Bag Imitations

Hermes sued Kabushiki Kaisha Tia Maria at the Tokyo District Court for violating its trademark right and the unfair competition prevention law by allegedly promoting 100 or more Birkin look-alike bags (see below) in Japan with a price tag of JPY27,300 from August 2010 to February 2018.

Court decision

On June 3, 2020, the Tokyo District Court decided in favor of HERMES INTERNATIONAL and awarded damages for trademark infringement and passing-off in the amount of JPY2,900,000.
[court case no. Heisei31(wa)9997]

In the decision, the Tokyo District Court found that Hermès Birkin Bag has acquired distinctiveness and become remarkably famous as a source indicator of Hermès’ luxury bags by 2009.

Besides, the court held that defendant’s goods constitutes an infringement of the 3D shape of the “Birkin” bag trademark since both are confusingly similar in view of the following aspects:
(a) a distinctive three-lobed flap design with keyhole-shaped notches to fit around the base of the handle, (b) a dimpled triangular profile, (c) a closure which consists of two thin, horizontal straps designed to fit over the flap, with metal plates at their end that fit over a circular turn lock, (d) a padlock which fits through the center eye of the turn lock and (e), typically, a key fob affixed to a leather strap, one end of which is affixed to the bag by wrapping around the base of one end of the handle.

Screen capture of TIA MARIA’s website (http://tiamaria.zf.shopserve.jp/SHOP/V1172S.html)

The court measured damages to recover (i) defendant’s actual sales of infringing bags (JPY2,730,780) by subtracting appropriate variable cost (40% of the offered price) for JPY1,638,468, (ii) “mental suffering” caused by an infringement for JPY1,000,000, and (iii) reasonable attorney fee for JPY260,000.

The district court decision was challenged by the defendant before the High Court to set aside or vary it, however, the IP High Court dismissed the appeal entirely and sided with HERMES INTERNATIONAL.

To read a full text of the IP High Court decision (Japanese only), click here.

Court Case: Parallel imports of trademarked goods in Japan

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In a trademark dispute pertinent to parallel imports, on October 22, 2020, the Japan Tokyo District Court allowed the parallel import of “2UNDR” men’s underwear from Singapore into Japan.
[Court case no. Heisei30(Wa)35053]

2UNDR

Harris Williams Design Inc. (Harris), a Canadian corporation, is an owner of Japanese Trademark Registration no. 5696029 for the mark “2UNDR” over men’s underwear, clothing, and others in class 25 as well as Canadian Trademark Registration for the same mark, jointly with EYE IN THE SKY CO, Ltd., an exclusive distributor and licensee in Japan, sued Kabushiki Kaisha Bright, a Japanese company who imported and distributed 2,387 pcs of men’s underwear bearing the “2UNDR” mark as follows in Japan, for trademark infringement.

Defendant argued the goods in dispute were all purchased from a Singapore company M-Golf which was originally imported to Singapore under the license of another Canadian corporation owned by the CEO of Harris. If so, the import of the 2UNDR goods in Japan would not constitute trademark infringement and it is not prohibited the defendant from selling such goods in Japan as a parallel importer.

Parallel imports

Parallel imports involve the import and distribution of genuine trademarked goods by parties other than the trademark owner or their agent. In contrast to counterfeit products, products that are the subject of parallel imports were produced abroad with the consent of the trademark owner.

The plaintiffs contended the defendant’s act would be anything but permissible since M-Golf has been restricted under trademark license to export the licensed goods out of Singapore. Besides, when the defendant purchased the disputed goods, M-Golf was no longer an authorized distributor in Singapore. Therefore, defendant goods would never be construed the genuine products as a matter of law.

Supreme Court Ruling

In the “Fred Perry Case” decision ruled on February 27, 2003, the Japan Supreme Court established the criteria to determine whether parallel imports shall constitute trademark infringements, by relying on ‘functional theory’:

  1. Is the trademark affixed on the goods, which the alleged infringer wishes to import, by the trademark owner or with its consent in the country of export?
  2. Is the party who owns trademark right in the country of export also an owner of Japanese trademark right for the same mark or closely associated with the owner so that the trademark affixed in the country of export could indicate the same source with a registered mark in Japan?
  3. Is the owner of Japanese trademark right, directly or indirectly, effectively in control of the quality of imported goods with the trademark which is sought to be enforced so that the imported goods would be estimated virtually identical in view of quality with the goods placed on the market under the same trademark by the owner in Japan?

Given the answer to the above three tests is yes, the essential function of a trademark, namely “source indicator” and “quality assurance”, would not be harmed by virtue of parallel imports in fact. In this respect, parallel imports shall be permissible even if the defendant’s act nominally constitutes trademark infringement.

Tokyo District Court Decision

In line with the criteria, the Tokyo District Court found that answer to the first test is “yes” because the 2UNDR mark was originally affixed on the disputed goods under a license of Harris in Canada. The territorial restriction imposed on a licensee and termination of license agreement would be irrelevant to the test.

Unquestionably, the answer to the second test is “yes” since Harris is the sole owner of Japanese trademark registration and Canadian trademark registration for the 2UNDR mark. If so, both marks indicate the same source of origin as a matter of course.

As for the third test, the court could not find a reasonable ground to believe that territorial restriction is beneficial to assure the quality of men’s underwear by taking into consideration such goods would neither easily decline quality nor damage during shipment. Besides, there seems no difference in quality between the defendant’s imported goods and the plaintiff’s 2UNDR goods distributed in Japan. Therefore, the court held the case satisfies the third test as well.

Based on the foregoing, the court decided the defendant’s act to import and distribute the disputed goods in Japan would not adversely affect the essential function of the 2UNDR mark owned by plaintiffs and thus permissible as parallel imports under the Trademark Law.

Click here to read the full decision