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Revision of Japanese Trademark Law and Regulations

The Japanese Trademark Law Revision Bill passed the Diet on June 4, 1996, and most of the provisions of the new law will come into force on April 1, 1997. The JPO regulations will be revised as well. The following are major aspects of the latest revision:

  1. Meeting Trademark Law Treaty (TLT) requirements
  2. Unused trademark control measures
  3. Early grant of trademark rights
  4. Broader protection for well-known trademarks
  5. Other measures to stimulate economic activities
  6. Miscellaneous changes

Each of these topics is discussed below. The revision includes some very significant changes such as introduction of multi-class applications and abolition of the associated trademark system. In this newsletter, we present a summary of how the revised law will affect current Japanese trademark practice.


1. Meeting Trademark Law Treaty (TLT) Requirements

Introduction of Multi-Class Application System

Currently, the number of classes that can be designated in a single application is limited to one. Under the new law, plural classes of goods and/or services may be covered in one application. Under the new JPO fee schedule accompanying this change, official filing fees will increase according to the number of designated classes, but the filing cost for one mark in multiple classes will be lower than the cost of filing multiple applications under the current fee schedule.

However, during prosecution, if a conflicting mark exists with respect to one of the classes in an application made under the new law, the entire application will be rejected. Then, an amendment or a divisional application must be filed to obtain a registration with respect to the other goods and/or services where no conflicting mark exists. The costs of such procedures might negate the costs saved at the time of filing. Therefore, careful searching prior to filing will be very important under the new system.

Simplification of Formalities

Formalities relating to application forms and certificates will be simplified under the new law. This will reduce the costs of procedures such as corporate name changes.

Checks on Use and Substantive Examination at Renewal Abolished

As for registrations that expire on or after April 1, 1997, evidence of use does not need to be submitted if a renewal application is filed on or after April 1, 1997. Substantive examination for renewal applications will no longer be carried out, and renewal of a trademark registration will be completed by submitting a request for renewal and a renewal fee. There are exceptions to this change. Substantive examination will be continued with respect to defensive trademark registrations. (A defensive registration is a further registration of a very famous registered mark for goods on which the mark is not being used in order to protect against dilution.) As for service marks for which registrations were granted under special treatment when the service mark registration system was introduced (so-called "double registration"), evidence of use will be required at the time of the first renewal.

Under the new law, renewal fees can be paid within a six-month grace period after the expiration day (with an extra fee).

Public Notice of Transfer of Trademark Ownership

Currently, a notice of transfer of trademark ownership in a daily newspaper is required to record the assignment with the JPO. This requirement has been abolished by the revision.

Power of Attorney

Under the revised JPO regulations, a Power of Attorney effective in both application and post-registration procedures will be accepted by the JPO. A general Power of Attorney effective in all procedures for trademark applications and registrations owned by the same entity will also be accepted.

Other Changes to Comply with the TLT

The latest revision includes other changes to comply with the TLT. For example, when informalities such as incomplete documents are found, an opportunity to provide an explanation will be given before the JPO makes a rejection.

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2. Unused Trademark Control Measures

Reforms Relating to Cancellation Procedures

Currently, a person requesting a cancellation based on non-use is required to have a legal interest in the cancellation procedures. The new law provides that any person can request a cancellation. This change is expected to expedite cancellation requests because the standing of a person demanding a trial for cancellation will no longer be debated.

A new provision has been added to prevent token use of marks just prior to cancellation. In Japan, a registered mark is subject to cancellation if the mark is not used by the registrant or its licensee without any justifiable reason within three years of the date when a request of trial for cancellation is registered on the Trademark Register. This remains unchanged under the new system, however, the new law provides that use of the mark occurring within three months prior to the filing of a cancellation action cannot be a defense if the person requesting cancellation can prove that the registrant had knowledge that the cancellation proceeding was likely. Under the present system, a registrant can circumvent cancellation by creating a token use after being approached by someone for negotiation of purchase of the mark and before a cancellation request is registered. The new provision is expected to stop such token use.

Under the current law, a cancellation of registration takes effect on the date a decision to cancel the registration becomes final. Under the revised law, the registration will be deemed to have lapsed from the date the request was registered (which is not the same as the date it was filed). The purpose of the new provision is to prevent any recovery of damages by the owner of the cancelled registration for the period between the date the request was registered and the date the decision of cancellation becomes final.

Registration Fees

Currently, registration fees as well as renewal fees can be paid only in one lump sum. Under the new law, those fees may be paid either in one lump sum or in two installments. If the fee is paid in installments, the first half of the fee covers the first five years of the term of the trademark rights. If the second half of the fee is not paid, the registration will lapse at the end of the first five-year period.

Associated Trademark System Abolished

Under the current law, an applicant can apply for registration of similar marks only under the associated trademark system. The revised law abolishes the associated trademark system in favor of treating similar marks as ordinary marks. Two major consequences of this change involve trademark assignment and cancellation procedures.

First, under the present law, the assignment or transfer of associated trademarks is possible only as a block conveyance of all similar marks. Effective April 1, 1997, the new law will allow conveyance of any single mark, despite its similarity to another mark. Significantly, this change may create a situation where owners of multiple trademarks, after having transferred one or more of their similar marks, may not be able to later obtain registration of additional similar marks due to the ownership of one (or more) of the similar marks by another.

Second, currently, in cancellation proceedings, use of the mark under one registration inures to the benefit of other associated registrations. With the abolition of associated trademark system, this will no longer be the case. (As an interim measure, in cancellation actions filed by March 31, 2000, use of an associated trademark occurring before April 1, 1997 can be a defense.) The number of unused registered marks is expected to be reduced since use of marks will now be tested individually in cancellation proceedings.

In relation to cancellation actions, the latitude of the identity between the mark registered and the mark used in a defense is explicitly stated in the revised law, which is explained further below.

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3. Early Grant of Trademark Rights

Post-Registration Opposition System

Currently, Japan has a pre-registration opposition system. However, after April 1, 1997, marks allowed by the JPO will be published for opposition after they are registered. In the past, the average period of time from receipt of a decision of publication to receipt of a notice of registration was almost one year where no opposition was raised. The shift from the pre-registration opposition to post-registration opposition system will result in the prompt grant of registrations.

Rejection based on pending trademark applications

Currently, issuance of a first official action of the junior application is delayed when the senior application is still pending. Under the new law, the JPO will begin issuing an official action (Notification of Reasons for Refusal) based on the existence of a pending senior application. This will give the junior applicant the opportunity to adopt a new mark, make amendment, etc. at an early stage.

Identity Between Mark Used and Mark Registered in Cancellations

The revised law explicitly states the latitude of the identity of the mark used to defend a cancellation action. This provision will contribute to reducing a total number of applications filed with the JPO, which will result in faster granting of registrations.

Some examples given by the JPO are listed below. When a registered mark is in Roman letters, use of the mark in its Japanese phonetic equivalent will qualify if the registered mark and the phonetic Japanese equivalent have a one-on-one relationship in concept. Use of one of the marks below will qualify as use of the corresponding mark.

Bluebird <--> Bluebird
HI-KE <--> hi-ke
apple <--> ("apple" in Katakana)
apple <--> ("apple" in Hiragana)

 

The two examples below are cases where use of the Japanese mark does not qualify as use of the corresponding English mark, and vice versa. In example 1), the Katakana can represent three different words in English. In example 2), the Kanji (Chinese character) and the English mark are conceptual equivalents, but the Kanji is pronounced "niji"," thus they are phonetically different.

1. right <--> ("right" in Katakana)
write <--> ("write" in Katakana)
light <--> ("light" in Katakana)
   
2. rainbow <--> (Kanji meaning "rainbow")

 

Introduction of a Standard Characters System

When a trademark registration is sought for a wordmark in no specific style or font, submission of a trademark reproduction is no longer required.

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4. Broader Protection for Well-Known Trademarks

The revised law expressly states that registration of a trademark right shall not be granted when the mark has been applied for with an unjust intention (e.g., intention to gain unjust profits or to do damage to another person). The current system has been insufficient to prevent a Japanese applicant from obtaining registration for a well-known foreign mark for the purposes of willful copying or gaining unjust profits. By the new provision, protection of well-known trademarks will be extended to marks that have high recognition outside Japan regardless of the level of recognition in Japan.

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5. Other Measures to Stimulate Economic Activities

Three-dimensional Trademarks Registrable

So far, three-dimensional trademarks have been protected in Japan by the Unfair Competition Prevention Law, provided that the mark is well-known. Three-dimensional trademarks will become registrable under the new trademark law.

Collective Trademarks

So-called "collective trademarks", which are already protected under the current law, are clearly provided for in the new law. (A collective trademark is a mark which is used not by the owner of the registration, but by its members.) Only non-profit corporations will be able to obtain a registration for a collective trademark.

Reclassification

Registrations under five classification systems coexist in Japan, including the International Classification of goods and services, which was introduced on April 1, 1992. The new law requires that goods under the old classifications be reclassified in accordance with International Classification within a specified period. Reclassification will start with registrations that expire on or after October 1, 1998. An application for reclassification may be filed within a period from six months prior to the expiration date of the registration to one year into the new term. Reclassification is not mandatory, however, if reclassification is not done during this period, the next application for renewal will be denied. Therefore, no more than one final 10-year term is available to those who do not reclassify during the relevant period.

Heavier Fines Imposed on Corporations in Infringement Cases

In order to stop rampant counterfeiting by corporations, under the revised law, heavier fines will be imposed on a corporations in infringement cases.

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6. Miscellaneous Changes

Revision to Classification of Goods and Services

In accordance with the 7th edition of International Classification, changes will be made to the classification of goods and services, effective January 1, 1997.

Adoption of Information Offer System

Since the pre-registration opposition system will be abolished, the JPO will facilitate offers of information for pending trademark applications. Any person can voluntarily offer information to be considered in examination of a pending trademark application. The information offer system will be set forth in the implementing regulations for the trademark law.

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