First ruling by IP High Court on New Type of Trademark in Japan

On February 14 2020, the Japan IP High Court ruled to uphold the Japan Patent Office (JPO) decision and rejected TM application no. 2016-009831 for a 3D position mark consisting of three virtual images of oil stove flame due to a lack of inherent and acquired distinctiveness.
[Case no. Reiwa1(Gyo-ke)10125]

TOYOTOMI Oil Stove “Rainbow”

TOYOTOMI CO., LTD., a Japanese company, the world’s first manufacturer of kerosene-fired portable cooking stove in 1952, has allegedly produced their convection type lantern-like design oil stoves in the name of “Rainbow” since 1980.

By means of a heat-resistant glass coated on the inner surface of vertical cylindrical heat chamber of the Rainbow stoves, virtual images of orange flame appear floatingly above actual flame when stoves are in use (see below).

3D Position mark

TOYOTOMI sought for registration for its virtual images of flame in connection with convection type oil stoves in class 11 as a 3D Position mark (see below) on January 29, 2016.

In a description of the mark, applicant specified:

applied mark is a position mark consisting of 3D virtual image of three flame rings appeared floatingly above the flame burning on stove at the inside of vertical cylindrical heat chamber. Devices colored in blue and red would not constitute an element of applied mark.

In Japan, by enactment of the New Trademark Law in 2014, new type of mark, namely, color, sound, position, motion, hologram, was allowed for trademark registration since April 2015.

According to the JPO database, more than 480 position marks were applied for registration under the New Trademark Law and 78 position marks are successfully registered as of now (Feb 29, 2020).

JPO decision

On March 2, 2018, the JPO examiner refused applied mark under Article 3(1)(iii) of the Trademark Law based on the fact that mechanism of 3D virtual shape of three flame rings was exclusively protected under Patent No. 1508319 which was expired on July 25, 2000. According to technical specifications of the patent, it is admitted that the 3D shape was purely achieved as a result of utilitarian functionality and aesthetic functionality. If so, the JPO finds it inappropriate to register the shape as a trademark because of unfair and detrimental effect to the public caused by prospective perpetual exclusivity to the shape itself that should have been a public domain under the Patent Law.

Besides, the JPO considered applied mark has not acquired distinctiveness (secondary meaning) as a source indicator of applicant’s products regardless of substantial use for more than three decades.

Subsequently, JPO dismissed an appeal on the same ground. [Appeal case no. 2018-007479, on August 30, 2019]

To contend, applicant filed a lawsuit to the IP High Court on September 26, 2019 and demanded cancellation of the decision.

IP High Court ruling

This lawsuit was the very first case for the IP High Court to take up new type of trademark at the open court.

The court held a shape of goods shall not be protectable as a source indicator if it just aims to achieve function of the goods from utilitarian and aesthetic viewpoints. If such shape per se is apparently destined to achieve functions of goods, it shall be refused for registration under Article 3(1)(iii) of the Trademark Law.

In this regard, the court found, applied mark simply consists of a shape destined to achieve utilitarian and aesthetic functions of goods in question, since it is considered virtual images of floating flame ring aim to increase heating effect of convection type oil stoves.

A mere fact that none of competitors have used identical or similar shape with applied mark on oil stoves would be irrelevant to assess distinctiveness of mark under Article 3(1)(iii).

Even if three flame rings do not physically constitute a shape of oil stoves, the court would see the JPO did not error in adapting Article 3(1)(iii) on the case.

As for acquired distinctiveness, the court had no reason to believe applied mark acquired secondary meaning through actual use based on the produced evidence. TOYOTOMI allegedly held top-rank market share (22.5%) of convection type oil stoves in Japan and annually delivered 29,000 stoves on average for the last seven years. However, the court pointed out the TOYOTOMI Rainbow stoves share just 2% when radiation type oil stoves are counted. Besides, provided that applied mark is not visible to consumers who visit shops to purchase oil stoves from appearance of the goods when turned off, it is questionable whether average consumers would conceive the 3D shape as a source indicator, rather than a functional shape of oil stoves.

Based on the foregoing, the IP High Court upheld JPO decision.

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