カテゴリー: Trademark Assignment

Letter of Consent in Japanese Trademark Practice

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When trademark applicants receive a refusal of their trademark applications due to a conflict with a prior similar registered mark cited by the JPO examiner, how can the applicants overcome the refusal?

In some jurisdictions, it has become a routine to submit a letter of consent (LOC) issued in the name of the owner of the cited mark agreeing on the use and registration of the applied mark for the purpose of overcoming the refusal, apart from arguing against the similarities between the respective marks.

However, the Japan Patent Office (JPO) is negative to withdraw refusals arising from a conflict with a senior registered mark under Article 4(1)(xi) of the Trademark Law simply by means of LOC.

Trademark Examination Guideline (TEG) 42.111.03 in relation to Article 4(1)(xi) provides special conditions where the JPO accepts LOC and withdraws refusals as follows.

Where an applicant claims that he/she is in any of the relationships (1) and (2) with the owner of a cited trademark right and submits evidence (3), the case shall be handled as if Article 4(1)(xi) does not apply.

(1) The owner of a cited trademark right is under the control of the applicant.

(2) The applicant is under the control of the owner of a cited trademark right.

(3) Evidence to the effect that the owner of a cited trademark right agrees that the trademark as applied is to be registered.

Condition (1) and (2) – “Under the control” relation between cited owner and applicant will be satisfied if:

(a) Business of the owner of a cited trademark right of which the majority of voting rights of all shareholders are owned by the applicant;

(b) Business of the owner of a cited trademark right which has a capital alliance with the applicant and whose corporate activities are substantially under the control of the applicant, although the requirement specified in (a) above is not satisfied.

Therefore, LOC is useful only where either party has a controlling interest in the other entity, the so-called parent-child relationship between companies.

Due to the restriction, LOC would not be available in most cases to overcome the refusal based on Article 4(1)(xi).

Under the circumstance, practically, we are able to select three options.

  1. Arguing dissimilarity of mark or goods/ services　
  2. Filing a non-use cancellation against the cited mark　
  3. Transferring an applied mark to an owner of the cited mark and assigning it back after registration, vice versa.

Transferring Trademark Ownership in Japan

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Trademark owners can freely sell their trademark or transfer it without any compensation. Transfers of trademark ownership happen when the owner of trademark rights is changed. Examples of when transfers of trademark rights might happen include when a company is buying another company, or when a business buys product rights from another company or individual.

Deed of Assignment

A deed of assignment is used where the trademark owner (the “assignor”) transfers all or part of their right, title, and interest in a trademark to another entity (the “assignee”). A deed of assignment can be done in one transaction, by transferring all ownership rights of trademarks detailed in the deed. No payment is required for it to be valid.

A deed of assignment must be in writing and should include:

  • The names and addresses of the assignor and assignee
  • A description of the trademark right, i.e., Japanese trademark registration number to be transferred
  • A statement that the assignor transfers the trademark right to the assignee
  • Seals/Signatures of the parties and the date of the agreement execution

Recording Trademark Assignment

Although a deed of assignment transfers ownership in trademark right, it does not change the registration of the ownership. To be valid and enforced, the trademark assignment must be recorded with the Japan Patent Office (“JPO”). The parties must submit a deed of trademark assignment along with a statutory request to change the ownership.

Joint Application Rule

It is noteworthy that the Japanese law provides the request to change trademark ownership with relevant administrative authority should be applied jointly by assignor and assignee even though assignor agrees to assign their interest in the property to the assignee in the deed.

Consequently, mere signatures of both parties on the deed of the assignment are insufficient to meet this requirement.

To record the assignment of trademark registration with the JPO requested solely in the name of the assignee, which often happens, as a matter of fact, the deed should contain a declaration that the assignor would agree and never oppose assignee to solely request the transfer of trademark right with the JPO. (Article 8 of Japan Trademark Registration Order)

Taxes

It is mandatory to pay an official fee, JPY30,000 per registration in order to register the change in ownership with the JPO.

Meanwhile, where the transfer arises from general succession, e.g., inheritance, M&A, it costs JPY3,000 per registration.