Japan IP High Court ruling: “I♡JAPAN” lacks distinctiveness as a trademark

On June 17, 2020, the Japan IP High Court affirmed the JPO’s rejection of the “I♡JAPAN” mark in relation to various goods of class 14,16,18 and 24 due to a lack of distinctiveness.
[Judicial case no. Reiwa 1(Gyo-ke)10164]

I♡JAPAN

The disputed mark consists of the capital letter “I”, followed by a red heart symbol, below which are the capital letters “JAPAN” (see below). The mark filed by CREWZ COMPANY, a Japanese merchant on April 17, 2018, over various goods in class 14, 16, 18, and 24 [TM application no. 2018-049161].

Noticeably, the JPO already allowed trademark registration for the same mark on apparels in class 25 on March 27, 2015, filed by the applicant [TM Registration no. 5752985]. Regardless of it, the examiner refused disputed mark in contravention of Article 3(1)(vi) of the Trademark Law.

Article 3(1)(vi) is a provision to comprehensively prohibit from registering any mark lacking inherent distinctiveness.

Any trademark to be used in connection with goods or services pertaining to the business of an applicant may be registered, unless the trademark:
(vi) is in addition to those listed in each of the preceding items, a trademark by which consumers are not able to recognize the goods or services as those pertaining to a business of a particular person.

JPO decision

The JPO Appeal Board sustained the examiner’s refusal and decided to reject disputed mark by stating that we are nowadays accustomed to finding goods bearing the “I♡” logo followed by a geographical indication, which represents a strong devotion or attachment to the area/city in its entirety. In fact, the “I♡JAPAN” design is commonly used on several goods as a symbol to support the Japanese sports team or souvenirs for tourists. If so, the design shall not be exclusively occupied by a specific entity. Under the circumstances, relevant consumers are unlikely to conceive the disputed mark as a source indicator of the applicant. Thus, the mark shall be rejected in contravention of Article 3(1)(vi) and the examiner did not error. [Appeal case no. 2018-16957]

To contend against the decision, the applicant filed an appeal to the IP High Court.

IP High Court ruling

The IP High Court dismissed the applicant’s allegation entirely, stating that the disputed mark gives rise to the meaning of “I love JAPAN”. The court found the “I♡” logo followed by a geographical indication is commonly used to appeal a strong devotion or attachment to the area/city. Inter alia, various merchants promote goods bearing the “I♡JAPAN” design as a sign of their support to Japan or the Japanese sports team. If so, relevant consumers and traders would not conceive disputed mark as a source indicator of goods in question, but merely a symbol to represent their devotion and support to Japan. Therefore, the disputed mark shall not be registrable under n contravention of Article 3(1)(vi).

Besides, the court found the fact of a precedent registration for the same mark in a different class would not affect the distinctiveness of disputed mark since it does not have a legal effect to bind subsequent examination in assessing registrability of a junior mark under Article 3(1)(vi).

Japan IP High Court sided with Apple Inc. in “CORE ML” trademark dispute

On May 20, 2020, the Japan IP High Court denied the JPO decision and sided with Apple Inc. by finding the “CORE ML” mark is dissimilar to senior trademark registration no. 5611369 for word mark “CORE” in connection with computer software of class 9.
[Case no. Reiwa1(Gyo-ke)10151]

CORE ML

Apple Inc. filed a trademark application for word mark “CORE ML” in standard character by designating computer software in class 9 on November 6, 2017 (TM App no. 2017-145606).

Apple’s Core ML is its own framework for Machine Learning used across Apple products for performing fast prediction or inference with easy integration of pre-trained machine learning models on the edge, which allows you to perform real-time predictions of live images or video on the device.

JPO decision

The Japan Patent Office (JPO) rejected “CORE ML” in contravention of Article 4(1)(xi) of the Trademark Law due to a conflict with senior trademark registration no. 5611369 for word mark “CORE” in standard character over electronic machines, computer software, and other goods in class 9 owned by Seiko Holdings Corporation.

Article 4(1)(xi) is a provision to prohibit from registering a junior mark that is deemed identical with, or similar to, any senior registered mark.

In the decision, the JPO stated applied mark apparently consists of two words, “CORE” and “ML”. The term “CORE”, a familiar English word meaning ‘a central and foundational part’, would play a role of source indicator in connection with the goods in question. In the meantime, “ML” is a descriptive term since it is commonly used as an abbreviation of ‘Machine Learning’ in the computer software industry. If so, it is permissible to select the term “CORE” as a dominant portion of applied mark and compare it with the cited mark “CORE”.

To contend against the decision, Apple Inc. filed an appeal to the IP High Court.

IP High Court ruling

The IP High Court, at the outset, referred to the Supreme Court ruling in 2008 which established the criterion to grasp a composite mark in its entirety in the assessment of similarity of the mark.

“Where a mark in dispute is recognized as a composite mark consisting of two elements or more, it is not permissible to assess the similarity of mark simply by means of taking out an element of the composite mark and then comparing such element with the other mark, unless consumers or traders are likely to perceive the element as a dominant portion indicating its source of origin of goods/service, or remaining elements truly lack inherent distinctiveness as a source indicator in view of sound and concept.”

Based on the criteria, the court found that applied mark shall be assessed in its entirety on the following grounds:

  1. “CORE” would be merely recognized as a term to mean ‘a central and foundational part’ in connection with goods in question.
  2. It is unlikely that relevant consumers at the sight of “CORE ML” used on computer software conceive the term “ML” as an abbreviation of ‘machine learning’. If so, “ML” would not give rise to any specific meaning.
  3. The above facts suggest that “CORE” would never play a dominant role and “ML” shall not be considered less distinctive than “CORE” as a source indicator in view of the concept.
  4. From appearance and sound, there is no reasonable ground to believe “CORE” and “ML” shall be recognized individual and separable.

Based on the foregoing, the court pointed out the JPO erred in finding applied mark appropriately and decided that the applied mark “CORE ML” is deemed dissimilar to the cited mark “CORE” as a whole given the remarkable difference in sound and appearance, even if both marks resemble in concept.

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.

Japan IP High Court Ordered Unofficial Mario Kart To Pay Nintendo Over $450,000

On January 29, 2020, the Japan IP High Court ruled in favor of Nintendo over a case against go-kart operator Mari Mobility (the company formally named Maricar) and ordered damage compensation of 50 million JP.

Mari Mobility, the go-karting company formerly known as Maricar, has provided services for tourists riding around Tokyo streets in go-karts and offered Nintendo-themed costumes for customers to wear as various Mario characters, strongly resembling the likes of Mario Kart. The service has been a popular tourist attraction.

Nintendo quickly stepped in and sued Mari Mobility for their Street Kart service, initially winning in 2018. 

Subsequently, Mari Mobility has re-branded its service as Street Kart, providing superhero-themed outfits and swapping out all Nintendo references with various superhero ones. Besides, “Unrelated to Nintendo,” was written on Mari Mobility’s karts.

The official site reads:

We at Street Kart is providing our service as usual. Street Kart is fully complied [sic] through local governing laws in Japan. Street Kart is in no way a reflection of Nintendo, the game ‘Mario Kart’. (We do not provide rental of costumes of Mario Series.)

Mari Mobility hoped to reduce the damages owed to Nintendo, a sum of 10 million yen (around $92,000) awarded by the lower court. The strategy has backfired, however, with Mari Mobility losing and IP High Court judge ordering them to pay five times the damages, now totaling 50 million yen ($458,000)

In a statement following the ruling, Nintendo stressed that it will continue defending violations of its intellectual property that damages the brands it has built up over numerous years.

[Judicial case no. Heisei30(Ne)10081]

Empire Steak House loses to trademark its restaurant name in Japan IP High Court battle

On December 26, 2019, the Japan IP High Court ruled to uphold a rejection by the Japan Patent Office (JPO) to International Registration no. 1351134 for the mark “EMPIRE STEAK HOUSE” in class 43 due to a conflict with senior trademark registration no. 5848647 for word mark “EMPIRE”. [Judicial case no. Reiwa1(Gyo-ke)10104]

EMPIRE STEAK HOUSE

The case was brought into the IP High Court after the JPO decided to dismiss an appeal (case no. 2018-650052) filed by RJJ Restaurant LLC (Plaintiff), an owner of IR no.1351134 for mark consisting of stylized-words “EMPIRE STEAK HOUSE” in two lines and a golden cow design (see below) on restaurant services; carry-out restaurant services; catering services in class 43.

EMPIRE STEAK HOUSE, one of the top steakhouses in New York City since 2010, has opened their first restaurant aboard on the first floor of the new Candeo Hotel in Roppongi, Tokyo (JPN) on October 17, 2017. To secure the restaurant name in Japan, RJJ Restaurant LLC applied for registration of disputed mark via the Madrid Protocol with a priority date of March 2, 2017 in advance of the opening.

Senior registered mark “EMPIRE”

The JPO rejected disputed mark by citing senior trademark registration no. 5848647 for word mark “EMPIRE” in standard character on grilled meat and sea foods restaurant services in class 43 based on Article 4(1)(xi) of the Trademark Law.

Article 4(1)(xi) is a provision to prohibit from registering a junior mark which is deemed identical with, or similar to, any senior registered mark.

Senior registered mark was applied for registration on December 8, 2015 and registered on May 13 ,2016. Apparently, senior mark is actually used as a name of restaurant, “Dining Bar Empire”, located in the city of Ueda, Nagano Prefecture (JPN).

To contend against the decision, plaintiff filed an appeal to the IP High Court on July 19, 2019.

IP High Court Decision

Plaintiff argued the literal elements of disputed mark “EMPIRE STEAK HOUSE” shall be assessed in its entirety by citing web articles relating to applicant’s restaurant which referred to the restaurant as Empire Steak House in full. Like ‘Empire State Building’ and ‘Empire Hotel’, the term “EMPIRE” gives rise to unique meaning and plays a role of source indicator as a whole when used in combination with other descriptive word. Besides, disputed mark contains an eye-catching golden cow which attracts attention to relevant consumers. If so, it is evident that the JPO erred in assessing similarity of mark between “EMPIRE STEAK HOUSE” and “EMPIRE”.

The IP High Court, at the outset, mentioned the Supreme Court decision rendered in 2008 which established general rule to grasp a composite mark in its entirety in the assessment of similarity of mark.

“Where a mark in dispute is recognized as a composite mark consisting of two elements or more, it is not permissible to decide similarity of mark as a whole simply by picking out an element of the composite mark and then comparing such element with other mark, unless consumers or traders are likely to perceive the element as a dominant portion appealing its source of origin of goods/service, or remaining elements truly lack inherent ability to serve as a source indicator in view of sound and concept.”

Next, the court analyzed the configuration of disputed mark and found it is allowed to grasp a literal element “EMPIRE” of disputed mark as dominant portion in light of the criteria applied by the Supreme Court by stating that:

  1. A term “STEAK HOUSE” is commonly used to indicate steak restaurant even in Japan.
  2. Where the term is included in restaurant name, it sometimes happens that relevant consumers over leap the term to shorten the name.
  3. In restaurants, it becomes common practice to display cucina and foodstuffs to be served on signboard or advertisement. Likewise, there are many steak and grilled meat restaurants displaying cow design. If so, relevant consumers at the sight of disputed mark would perceive the cow design as a mere indication to represent foodstuffs at the restaurant.
  4. From appearance, given the configuration of disputed mark, respective element can be considered separable.

Finally, based on the above findings, the court dismissed plaintiff’s arguments and concluded the JPO was correctly assessing similarity of mark. Given dominant portion of disputed mark is identical with the cited mark “EMPIRE” and both marks designate the same or similar services in class 43, disputed mark shall be unregistrable under Article 4(1)(xi) of the Trademark Law.

Trademark Dispute Over Cigarette Sub-Brand “SIGNATURE”

In a decision dated September 12, 2019, the Japan IP High Court affirmed the Japan Patent Office’s (JPO) determination to refuse registration for the STATE EXPRESS 555 “SIGNATURE” cigarette package design due to a conflict with senior Trademark Registration No. 4658792 for word mark “SIGNATURE”.
[Court case no. Heisei31(Gyo-ke)10020]

STATE EXPRESS 555 “SIGNATURE” cigarette package design

CTBAT International Company Limited, a joint investment of subsidiaries of China National Tobacco Corporation and British American Tobacco and incorporated in Hong Kong, filed a trademark application for device mark representing cigarette package design (see below) by designating cigarette, tobacco, electronic cigarette and others in class 34 on November 28, 2016 (TM application No. 2016-134074).

It the center, “No. 555 STATE EXPRESS” is written in three lines inside a circle. “SIGNATURE” is written independently on the upper side of the design.

Senior trademark “SIGNATURE”

The JPO examiner refused registration by citing a senior Trademark Registration No. 4658792 for word mark “SIGNATURE” in standard character overt the goods of cigarette in class 34 owned by PT Gudang Garam TBK, one of Indonesia’s leading cigarette manufacturers, best known for its kretek clove cigarettes, headquartered in Kediri, Indonesia, which was acquired by Philip Morris in 2005.

PT Gudang Garam TBK has used the registered mark as a cigarette sub-brand of Gudang Garam.

CTBAT filed an appeal against the JPO examiner’s refusal and argued dissimilarity between the marks, but in vain. [Appeal case no. 2018-002007]
Subsequently, CTBAT appealed to the IP High Court and demanded cancellation of the administrative decision to refuse registration for plaintiff’s mark.

Qualitative description

CTBAT argued the term ‘SIGNATURE’ lacks distinctiveness in relation to cigarette because several cigarette manufacturers, e.g. Dunhill, Camel, Davidoff, W.O.Larsen, have been using it as a qualitative term to indicate the cigarette has a specific feature of symbolic brand.

Besides, plaintiff’s mark contains distinctive terms, “No. 555 STATE EXPRESS”, which has acquired a certain degree of popularity of the cigarette brand through substantial use for more than 100 years. If so, it is unlikely that relevant consumers and traders would recognize the term “SIGNATURE” on the upper side as a source indicator in itself.

IP High Court Ruling

The court dismissed the allegation entirely, by stating that:

  1. From overall appearance of plaintiff’s mark, the term “SIGNATURE” shall not be perceived to combine with other figurative and literal elements.
  2. From the produced evidences, it is unclear if “No. 555 STATE EXPRESS” and “555” has acquired a certain degree of popularity because the cigarette brand has never been distributed in Japan so far.
  3. It is questionable that relevant Japanese consumers fully understand the term “SIGNATURE” and associated words, “Signature model”, “Signature Blends” have a qualitative or descriptive meaning in connection with cigarette.
  4. It has been often seen that a sub-brand is used on cigarette package separable from its main brand.
  5. The court finds the cited mark is used as a source indicator (sub-brand) on its cigarette package as well.
  6. Given the term “SIGNATURE” does not inseparably combine with other elements of plaintiff’s mark, it shall be permissible to cut out the portion and assess similarity of both marks based on the portion as long as it does meet with trade practice.

Based on the foregoing, the IP High Court sided with the JPO and upheld the refusal decision.

Fashion Designer in trademark fight over his name

On August 7, 2019, the Japan IP High Court ruled to dismiss an appeal by Ken Kikuchi, a Japanese jewelry designer, who contested a decision by the Japan Patent Office (JPO) to deny trademark registration for a composite mark consisting of a word “KEN KIKUCHI” with an eagle device under Article 4(1)(viii) of the Trademark Law.
[Judicial case no. Heisei31(Gyo-ke)10037]

KEN KIKUCHI

Disputed mark (see below) was filed by Ken Kikuchi on May 23 ,2017 covering various goods in class 14, 18 and 25 including jewelry and accessories. [TM application no. 2017-69467]

Since 2000, Ken Kikuchi allegedly has been designing and manufacturing affordable elaborate silver jewelry under the brand of his name “KEN KIKUCHI”. As a result of business expansion (14 brick-and-mortar stores in Japan, 4 stores in foreign counties) and advertisements from television, magazines, the designer’s name has acquired better reputation in the industry.

Refusal decision by JPO

The Japan Patent Office (JPO) refused the mark based on Article 4(1)(viii) of the Trademark Law, on the ground that the literal element of disputed mark can be perceived to identify a private individual named “Ken Kikuchi”. According to white pages, evidently there exist several Japanese people with the same name. If so, disputed mark shall not be allowed for registration since it contains a name of living person per se.

Article 4(1)(viii)

Article 4(1)(viii) of the Trademark Law prohibits registration of trademarks which contain the representation or name of any person, famous pseudonym, professional name or pen name of another person, or famous abbreviation thereof. Notwithstanding the provision, the article is not applicable where the applicant of disputed mark produces the written consent of the person.

The Supreme Court of Japan has ruled the article shall be interpreted to protect personal rights of a living individual. In line with the Supreme Court ruling, Trademark Examination Manuals (TEM) set forth that the article is applicable not only to natural persons (including foreigners) and corporations but also associations without capacity.

The Appeal Board of JPO also sided with the examiner’s refusal on the same ground. [Appeal case no. 2018-7529]

To contest the administrative decision, the designer filed an appeal to the IP High Court on March 25, 2019

IP High Court Ruling

The court dismissed the allegation entirely, by stating that:

  1. “KEN” and “KIKUCHI” are both commonly used names to Japanese people.
  2. Literal elements of disputed mark shall be perceived as a name of person even if the name is written in alphabet, given it has become popular to write a full name on the passport, credit card and others in alphabet.
  3. Article 4(1)(viii) shall be construed to comprehend a name of person written in alphabet.
  4. It is not relevant to consider reputation of disputed mark in applying the article since it aims to protect personal rights of a living individual.
  5. Irrespective of the fact that a person named “Ken Kikuchi” surely exists, applicant failed to prove consent from the person.

Based on the foregoing, the IP High Court sided with the JPO and upheld the refusal decision.

The Japan IP High Court Finds “EQ” Entitled to Trademark Registration Belonging to Mercedes Benz

On July 3, 2019, the Japan IP High Court reversed a decision of the Japan Patent Office (JPO) finding that the company Daimler AG was entitled to registration of “EQ” for Motor vehicles in class 12, even though the term “EQ” by itself is descriptive for the goods.
[Case no. Heisei31(Gyo-ke)10004, Daimler AG vs the JPO Commissioner]

The EQ Application

The JPO has refused registration to an application for EQ in standard characters (word only, see below) on the basis that the mark was descriptive for the goods “Motor vehicles” in class 12 based on Article 3(1)(v) of the Trademark Law.

The article prohibits an applied mark from registering if it consists solely of a very simple and common mark. Trademark Examination Guidelines (TEG) stipulates that a mark consisting of one or two alphabetical letters is not eligible for registration under the article. Click here.

A mark consisting of two alphabetical letters is not capable of identifying the source of the goods due to a lack of distinctiveness because a combination of two alphabetical letters is limited on quantity and currently used to represent a model name of vehicle, e.g. BMW XS, TOYOTA Carina ED, Ferrari FX, Nissan GT-R.

Descriptive terms falling under the article are only capable for registration based on Article 3(2) if they have “acquired distinctiveness”, which means the term has taken on a meaning in the public view so that people see the term as a trademark identifying the goods rather than simply describing the goods.

In this regard, Daimler AG argued the EQ mark, a coined term originating from “Electric Intelligence” to appeal design, extraordinary driving pleasure, high levels of everyday suitability and maximum safety of electric car by Mercedes-Benz, has acquired distinctiveness since launching the brand at the Paris Motor Show in September 2016.

JPO Decision

However, the JPO dismissed the argument on the grounds that:

  1. Daimler has neither used the EQ mark by itself as a name of electric car nor produced evidences of its plan to sell electric car named “EQ”.
  2. Daimler uses the EQ mark in a stylized design in press releases. If so, it is questionable whether relevant consumers conceive the EQ mark in standard characters as a source indicator of Mercedes-Benz.
  3. According to the produced evidences, Daimler uses the EQ mark in combination with other literal elements, e.g. “Generation EQ Concept”, “Concept EQA”, “EQC”, “smart vision EQ for two”, “EQ POWER”, “EQ POWER+”.
  4. There are no actual domestic sales of the electric car using the applied mark during the past two years from the date Daimler launched the brand in fact.
  5. A combination of two alphabetical letters, “E” and “Q”, has been generally used as a mode name in association with vehicles, e.g. TOYOTA electric car “eQ”, HYUNDAI luxury sedan “EQ900”, Zhengzhou Nissan truck “EQ1060”, Laufenn tyre “S FIT EQ”, ALPINE car navigation “EX11Z-EQ”, SPECIALLIZED bicycle “ALIBI SPORT EQ”. If so, the EQ term shall not be eligible for monopoly by a specific entity any longer.

The Appeal Board of JPO also upheld the refusal.
[Appeal case no. 2018-650016]

To contest the administrative decision, Daimler AG filed an appeal to the IP High Court on January 15, 2019.

IP High Court Ruling

The court first found the EQ mark in standard characters is not eligible for registration under Article 3(1)(v) of the Trademark Law.

In the meantime, the court found Daimler has newly released, promoted, and used the EQ mark with a combination of “POWER” as a new brand concept of electric car by Mercedes-Benz. Given a space for single letter between “EQ” and “POWER”, relevant consumers at the sight of promotional materials, advertisements and car magazines pertinent to Mercedes-Benz’s new electric car brand would perceive “EQ” as a specific source indicator. Taking account of enormous number of circulation of magazines (approx. 230,000) and advertisements for users (170,000 per year), the court held the EQ mark has been well known for a source indicator of Daimler electric car among relevant consumers and traders even if the duration of actual use and sales amount are not sufficient by themselves.

Notably, the court also negated fact-finding by JPO regarding ordinary use of the term EQ in association with vehicles by stating that since competitors use the term in a tight combination with other literal elements, they can be simply perceived as a mode name. If so, such use shall not be construed to negate acquired distinctiveness of the EQ mark by Daimler.

Based on the foregoing, the court ruled the EQ mark is entitled to trademark registration based on Article 3(2) of the Trademark Law and reversed a decision by the JPO on that account.

IP High Court ruling: “BULK AAA” confusingly similar to “BULK HOMME”

On March 7, 2019, the Japan IP High Court revoked a decision by the Japan Patent Office (JPO) to invalidation trial over a dispute of similarity between trademark “BULK AAA” and “BULK HOMME”, and ruled “BULLK AAA” shall be retroactively invalid. [Judicial case no. Heisei30(Gyo-ke)10141]

 

BULK HOMME

The case was brought into the IP High Court after the JPO decided to dismiss an invalidation trial (case no. 2017-890079) claimed by BULK HOMME Co., Ltd. (Plaintiff), an owner of senior trademark registration no. 5738351 for a  mark consisting of “BULK HOMME” and other literal elements (see below) over goods of cosmetics, skin care products for men in class 3.

 

INVALIDATION TRIAL AGAINST “BULK AAA”

In the invalidation trial, plaintiff asserted trademark registration no. 5931607 for word mark “BULK AAA” in standard character shall be invalid in violation of Article 4(1)(xi) of the Trademark Law since the mark is confusingly similar to “BULK HOMME” and designates cosmetics (class 3) which is undoubtedly identical with or similar to the goods designated under its own senior registration.

Article 4(1)(xi) is a provision to prohibit from registering a junior mark which is deemed identical with, or similar to, any senior registered mark.

Inter alia, plaintiff vehemently argued the term “AAA” in disputed mark lacks distinctiveness as a source indicator in relation to cosmetics since “AAA” is a term commonly used to represent the highest possible rating assigned to the bonds of an issuer by credit rating agencies. Given the circumstance, relevant consumes of cosmetics are likely to consider the term in disputed mark a qualitative indication of the goods even if the term has not been used as such  in connection with cosmetics in fact.

However, the Trial Board of JPO set aside the allegation by stating that disputed mark “BULK AAA” shall be assessed in its entirety. It is groundless to compare a word portion “BULK” of disputed mark with “BULK HOMME” given the Board could not identify any facts to assume relevant consumers of cosmetics conceive the term “AAA” of disputed mark as a qualitative indication. Both marks are sufficiently distinguishable from visual, phonetic, and conceptual points of view and dissimilar as a whole.

To contend against the decision, plaintiff filed an appeal to the IP High Court.

 

IP HIGH COURT DECISION

The IP High Court, to the contrary, sided with plaintiff and completely negated fact-findings made by the Trial Board of JPO. The Court held the term “AAA” is recognized as a qualitative indication even when used on cosmetics and thus the word portion of “BULK” is likely to play a dominant role of source indicator. If so, it is anything but inappropriate to pick up the word “BULK” from disputed mark and compare it with other mark in the assessment of mark similarity.

Besides, “HOMME” is a French word meaning “for men”. From the produced evidences, it seems apparent the word has been used in relation to men’s cosmetics, and consumers are accustomed to it so that they can recognize the meaning. Given the term is depicted in a thinner font than “BULK” in the citation, “BULK” gives dominant impression as a source indicator in the mind of consumers. Accordingly, it is reasonable to pick up the word “BULK” from the citation and compare it with other mark in the assessment of mark similarity.

The Court found that the Trial Board materially erred in the fact-finding and assessing similarity of mark. As long as dominant portion “BULK” of both marks and designated goods are identical, disputed mark shall be invalid based on Article 4(1)(xi).