Tokyo District Court awards record damages of JPY200M over a dead copy of bra design

The Tokyo District Court, on September 3, 2021, awarded record damages of 202 million Japanese Yen to Co-medical who brought a lawsuit against VIDAN under the Unfair Competition Prevention Law, accusing the defendant of unlawfully imitating P’s bra design bearing a trademark “Funwari Room-Bra.”
[Judicial case no. Reiwa1(Wa)11673]


Plaintiff, Co-medical Co., Ltd., has launched the sale of brassiere for use at home under the trademark of “Funwari Room-Bra” on September 12, 2016. By virtue of comfort to wear and elegant design of non-wired bra with adjustable breast support band under the cups and longline lace frill (see below left), the bra was a huge hit, ranked No. 1 on Amazon Japan. Total sales over three year period exceeded 1.4 million bras.   

In October 2018, the defendant began to sell non-wired bras under the trademark of “Moriage” (see above right) that has substantially the same configuration as P’s “Funwari Room Bra.” Sales of D’s bra reached 30 million JP Yen by the time D terminated the sale in September 2019.

Co-medical filed a lawsuit at the Tokyo District Court in May 2019, and argued the configuration of D’s bras constitute an act of unfair competition under Article 2(1)(iii) of the Unfair Competition Prevention Law that prohibits “commercial act to assign goods that imitates the configuration of another person’s goods unrelated to achieve a technical function before the lapse of three years from the date of release in Japan.” If so, given substantial resemblance in shape and design between two bras, D shall be liable for 202 million JP Yen damages caused by their act under Article 5(2) and attorney fee.


The court found D’s bra constitutes an unfair competition act prohibited under Article 2(1)(iii) and awarded damages of 200 million JP Yen over a dead copy of bra design by stating as follows.

  • There is a slight difference in details between the two bras. However, since it would not affect a whole configuration, in fact, D’s bra shall be deemed practically identical with P’s bra in shape.
  • In view of the recent popularity and advertisement of P’s bra, there is reasonable doubt that D in the same trade would have been aware of and knowingly relied on P’s bra to manufacture their bra.
  • Under Article 5(2), D’s profit gaiend by their unfair act shall be construed marginal profit, calculated by deducting direct costs incurred to manufacture and sell D’s bras from the sales. Therefore, D is liable for 184 milliom JP Yen damages. Besides, the court has a good reason to believe that 18 million JP Yen shall be awarded as damages to recover P’s attorney fees.

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

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

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

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

JPY 71 Million Damages Award Against Design Copycat of BAO BAO ISSEY MIYAKE

In a civil legal battle involving design copycat of luxurious “BAO BAO” bags designed by ISSEY MIYAKE, a Japanese fashion designer, the Tokyo District Court sided with ISSEY MIYAKE and found infringement under the Unfair Competition Prevention Act on June 18, 2019.
[Judicial case no. H29(Gyo-wa)31572]

BAO BAO ISSEY MIYAKE

Issey Miyake’s innovative and unique bag designs under the brand of “BAO BAO” since 2010 earned it accolades and wide recognition in the fashion world. Its most prominent design is crafted with a tessellating triangular structure that shifts as it’s moved to create new three-dimensional forms. Capturing a seamless fusion of geometric shapes and fluid silhouettes, the designs are often a kaleidoscope of color. Most of the pieces consist of rectangular equilateral triangle.

Disputed bags

Defendant, Largu Co., Ltd. began to promote following women’s shoulder bags, pouches, backpacks and tote bags under the brand of “Avancer” from 2016. Defendant copied tessellating triangular structure on disputed bags likewise. Most of the pieces are not rectangular equilateral triangle.

Defendant sold these goods for JPY 1,000 ~ 6,000. It was far cheaper than BAO BAO ISSEY MIYAKE – sometimes up to one-thirteenth.

Court decision

In the judgment, at the outset, the court assessed whether the geometric shapes of tessellating triangular structure shall play a role of source indicator protectable under the Unfair Competition Prevention Act. The judge found the shape of plaintiff’s goods has a distinctive and different feature from other women’s bags by taking account of produced evidences. Its unique and innovative design, inter alia, creating various three-dimensional forms when used, apparently gives unusual impression to consumers. If so, the prominent design consisting of triangular structure shall be protectable under the Unfair Competition Prevention Act.

Besides, the court found the triangular structure of plaintiff’s goods obtained a certain degree of popularity and reputation as a source indicator of BAO BAO ISSEY MYAKE by the time defendant launched disputed bags in 2016.

In assessing a likelihood of confusion, the court dismissed defendant’s counterargument on different shape of triangle by stating that disputed goods give rise to a same visual effect with BAO BAO ISSEY MIYAKE by means of creating various three-dimensional forms when used. Price difference is not a material factor to negate a likelihood of confusion as long as consumers conceive BAO BAO ISSEY MIYAKA at the sight of disputed bags.

After significant litigation, the trade dress suit ended with an injunction barring all future sales of the copied designs and a hefty damages award, JPY 71,068,000 under the Unfair Competition Prevention Act.

In the meantime, the court dismissed plaintiff’s allegation of copyright infringement on the ground that plaintiff’s goods are rather suitable for industrial design. In fact, plaintiff’s goods are produced in quantity at factory. If so, it shall be unprotectable under the Copyright Law.

LUIS POULSEN Victory over trademark infringement lawsuit for Pendant Lamp Shade

On December 27, 2018, the Tokyo District Court sided with Luis Poulsen A/S, a Danish company, in a lawsuit for trademark infringement against R&M Japan Co., Ltd. who imported into Japan and sold lighting apparatus allegedly identical with or confusingly similar to a registered 3D mark in the shape of unique pendant lamp shade well-known for “PH5” and awarded damages of 4.4 million JPY. [Case no. Heisei 29(Wa)22543]

 

Luis Poulsen “PH-5”

Luis Poulsen A/S has manufactured and sold lighting apparatus with a unique lamp shape well-known for “PH-5” in Japan past four decades. The shape was successfully registered as a 3D mark by the JPO in 2016 as a result of demonstrating acquired distinctiveness of the shape as a source indicator in connection with goods of ramp shade in class 11 (see below) [Trademark registration no. 5825191].

 

Infringing product

R&M Japan, Defendant, imported into Japan and sold lighting apparatus which apparently looks identical with the shape of PH-5 (see below).

Defendant argued that the Court should dismiss the complaint in its entirely.

According to the court decision, defendant admitted to reproducing a design which has terminated its exclusive right after the lapse of statutory period and thus became public domain.

Defendant also disputed there happened no damages to plaintiff on the grounds that the company put consumers on notice to offer replica designer lighting or free generic design items in the marketplace. There exists a remarkable price gap between genuine PH-5 and defendant product. If so, claimed damages shall not be linked to defendant’s act.

 

Court decision

The Tokyo District Court ruled in favor of Luis Poulsen by stating that:

  1. It is unquestionable that infringing product constitutes trademark infringement given the same shape with registered 3D mark representing “PH-5” owned by plaintiff.
  2. Provided that the 3D shape of “PH-5” has been successfully registered as a trademark in Japan, expiration of design right shall not prevent the owner from enforcing trademark right against the shape once registered as design right.
  3. Even if infringing product was offered to sell on notice of replica designer lighting or free generic design items at a lower price than genuine PH-5, it shall not deny a fact that infringing product is likely to compete with plaintiff.

Based on the foregoing, the Court ruled that R&M Japan committed a trademark infringement and awarded Luis Poulsen 4.4 million JPYen for damages.

R&M Japan once challenged validity of trademark registration for the 3D mark of PH-5, but resulted in vain. click here.

Fashion design and copycat

On July 30, the Tokyo District Court delivered a ruling in the case of copycat fashion dispute pertinent to the shape of cold shoulder blouse.
[Case no. Heisei 29(Wa)30499]

 

Cold Shoulder Blouse

The case was brought into the court by PETTERS Co., Ltd. who complained MAXIM Co., Ltd. of unlawfully imitating a unique shape of cold shoulder blouse designed by plaintiff and damaging business interests by distribution of defendant’s “KOBE LETTUCE” cold shoulder blouses.

According to the court decision, plaintiff allegedly designed a new cold shoulder blouse featuring unique ruffle sleeve and long ribbon (see right in below) in February 2016 and began selling from August of the year. Subsequently, defendant imported similar blouses (see left in below) from Korea and promoted for sale in Japan since May 2017.

Unfair Competition Prevention Law

Plaintiff argued defendant shall be liable for his conduct because it constitutes violation of Article 2(1)(iii) of the Unfair Competition Prevention Law.

Article 2(1)(iii) of the Unfair Prevention Law prohibits unauthorized party from assignment, lease, display for assignment or lease, export or import of goods which shape results from imitation of goods belonging to other entity.

The party shall be exempted from liability if it passes three months from initial offer for sale of imitated goods at the time of his misconduct.
From the case law, it is construed that the article does not apply for imitation of a commonly used-shape in light of the purposes and objectives of the article.

 

Court decision

The judge, however, did not clearly state if overall shape of plaintiff’s cold shoulder blouse shall be protectable under the article.
As a consequence, the court totally dismissed the case on the grounds that:

  1. There exists difference in the shape of ruffle sleeve and ribbon between disputed goods.
  2. The difference gives rise to distinctive impressive in the mind of consumers
  3. If so, the shape of defendant’s goods shall neither be identical with, nor deemed imitation of plaintiff’s goods.