Public order: Japan's IP High Court takes a stand

The IP High Court this year has shown its commitment to taking a tougher stand against trademark registrations that violate public order and morality or are fraudulent, by overruling several Japan Patent Office (JPO) decisions.

The court’s decisions also signify that it will not tolerate trademark registrations that contravene the principles of international good faith, and they are likely in turn to cause the JPO to take a harder line against questionable trademarks that may have been registered for ulterior motives, eg, for fraud (fusei), or that may violate the principles of international good faith (kokusai shingi) or public order and morality (kojo ryozoku).

IP High Court Heisei 23 (gyo-ke) 10399 (May 14, 2012)

The court reversed a JPO decision and ruled that a trademark registration for ‘Tarzan’ by a third party with no relationship to the Tarzan character was invalid on the grounds that allowing such a registration would violate the principles of international good faith and public order and morality.

On appeal was the trademark ‘Tarzan’, designating ‘plastic-working machinery and tools’ in Class 7 (machines and machine tools, etc).

The plaintiff, a company that manages copyrights for the Tarzan character, initially filed an appeal for invalidation at the JPO on the grounds that the trademark violates the principles of international good faith and public order and morality, but the appeal was dismissed by the JPO.

The JPO explained that while the name ‘Tarzan’ is vaguely familiar to those in Japan, it cannot be considered to be widely recognisable as the name of the character in the works of the American writer Edgar Rice Burroughs, and the name is also not managed by any public agencies in the US. Furthermore, the plaintiff did not own the rights to the trademark ‘Tarzan’ for goods in Class 7.

In that situation, the JPO held, any dispute regarding the trademark ‘Tarzan’ must be resolved as a private action between the relevant parties, and the registration itself is irrelevant to questions of international good faith or public order and morality. The court, after hearing an appeal, overruled the JPO and deregistered the trademark.

At the time the trademark application was filed, the plaintiff held the copyright to novels such as Tarzan, managed these and related works, and held 44 registered trademarks relating to ‘Tarzan’.

On the other hand, the trademark ‘Tarzan’ apparently does not have any power to draw customers for ‘plastic-working machinery and tools’, so the registration cannot be considered to be a fraudulent attempt to take advantage of the name ‘Tarzan’.

However, despite the lack of widespread recognition in Japan, the unique word ‘Tarzan’ has been consistently used in literature and film globally, particularly in the US, to refer to a fictional character with a certain persona, and the word ‘Tarzan’ does not suggest any other images, whether in Japanese or in other languages.

Under such circumstances, to allow a trademark consisting solely of the word ‘Tarzan’ to be registered in the name of a third party is a violation of international good faith, even if the word ‘Tarzan’ does not have any potential to attract customers to buy the designated goods per se.

Moreover, for a third party to enjoy exclusive use of the trademark ‘Tarzan’ with the right to bar even the plaintiff, albeit for the limited types of goods that are designated, cannot be termed appropriate for maintaining fair trade, and such a situation is contrary to public order and morality.

The decision includes important rulings concerning the principles of international good faith, public order and morality.

First, that allowing an unrelated third party to register a trademark using a name that evokes a specific image and is internationally known, even if it is not well-known in Japan, violates the principles of international good faith.

"These rulings, although they limit the choice of marks for trademark applicants and broaden the rights of IP right owners, are praiseworthy."

Second, that to bar even the original, legitimate user of a name from its free use by allowing registration of a trademark using that name is a violation of the principles of public order and morality. These rulings, although they limit the choice of marks for trademark applicants and broaden the rights of IP right owners, are praiseworthy in view of the increasingly globalised transfer of goods and services and the growing need for their international protection.

IP High Court Heisei 23 (gyo-ke) 10019 (March 22, 2012)

The court ruled against a trademark registrant who had registered 44 trademarks and trade names that were being used by other parties but remained unregistered. The plaintiff had filed an appeal for invalidation but this was dismissed by the JPO.

The ground for invalidation of the trademark by the IP High Court was lack of intention to use the trademark. The trademark in question was for ‘RC Tavern’ designating the service ‘Providing food and beverages’. The plaintiff had advertised and publicly announced on the Internet, in magazines, and by distributing brochures, the intention to open a restaurant and had actually opened a restaurant named ‘RC Tavern’.

However, the plaintiff had never bothered to register the trademark. The defendant not only filed an application for ‘RC Tavern’ immediately after the opening of the restaurant but also held 44 registered trademarks with questionable intentions. Indeed, those trademarks were actually being used, albeit without registration, by various third parties that had no connection with the defendant, and the designated services were in many diverse areas.

Additionally, while the statutory three years to use the trademark had not yet passed after registration, there were no records showing that the defendant had actually used the registered trademarks. In view of the above circumstances, the court ruled that the defendant was merely collecting registered trademarks and did not appear to be using them or to have any intention to use them, and therefore violated the requirement of the Trademark Law to have an intention to use the trademark.

Furthermore, the reasoning of the JPO was found incorrect because the defendant must prove the intention to use the trademark rather than the plaintiff disproving the intention. In addition, although this was sufficient to invalidate the trademark, the court took the liberty of mentioning that the present trademark must be considered to have been registered for the fraudulent purpose of hijacking the plaintiff’s trademark, which is a violation of public order and morality.

Therefore the trademark should be invalidated for that reason also, the court said. This is a stern warning from the IP High Court to those attempting to register trademarks for fraudulent purposes. The court appears to be taking a proactive attitude toward preventing so-called trademark trolls who register trademarks without intending to use them and subsequently sell them for a fee.

IP High Court Heisei 23 (gyo-ke) 10426 (March 6, 2012)

The IP High Court ruled in the case ‘Lambormini/Lamborghini’, that the three grounds for invalidation offered were relevant and therefore invalidated the trademark ‘Lambormini’, reversing the JPO decision in the appeal for invalidation.

According to the IP High Court, ‘Lambormini’, in light of the famous trademark ‘Lamborghini’, violates the principles of public order and morality, is confusingly similar to a wellknown trademark, and is deemed to have a fraudulent purpose.