CH.7 Effects of Trademarks

CHAPTER 7. EFFECTS OF TRADEMARKS Section 1. General Remarks I. Nature of Trademark Right 1. Trademark Right A trademark right is the exclusive right to use a registered trademark with respect to designated goods or services. The right is initiated upon registration of the mark. (Sections 18, 19 and 25). 2. Characteristics of the Trademark Right The subject of a trademark right may be described as an intellectual product or intangible property. However, its purpose is not for cultural advancement, as is a copyright. It is a kind of "industrial property" and its contribution is for "industrial purposes" (protection of users) (Section 1). The protection of industrial property focuses on patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition. (Paris Convention, Article 1, Paragraph 2). Under the Japanese legal system, a trademark right is one of the "industrial properties." The term, "industrial properties", is usually used narrowly and indicates the rights covered by the four main laws; namely, the Patent Law, the Utility Model Law, the Design Law and the Trademark Law. A broad definition of "industrial properties" includes various rights covered by the trade name provisions in the Commercial Code and the Unfair Competition Prevention Law. Whether interpreted broadly or narrowly, the Trademark Law is included in the definition of "industrial property rights." The terms "intangible property right" and "the Intangible Property Right Law" cover, in addition to the broad definition of industrial properties, copyright (and the Copyright Law) and the Agricultural Seed and Seedlings Law. 3. Characteristics of Trademark Rights before Trademark Registration The Trademark Law of Japan, which is based on the "registration principle" of trademark law, does not grant an exclusive right to a trademark application before the mark is registered. It does acknowledge, however, "a right that has accrued due to filing the trademark application" once the application is filed and a provision concerning a right to obtain a patent is applied mutatis mutandis to a trademark application. (Section 13(2); Patent Law, Sections 33, (4)-(7)). Some of the rights associated with an invention (patent rights) are applicable and similar to trademark rights in some respects. The prevailing opinion considers the right that accrues upon the filing of a trademark registration to be a public right and is based upon the belief that a trademark right is established by registration. (See p. 682 of Amino. Kiyose holds the view that the public right is granted in order to protect an incomplete trademark right before filing. See p. 57 of Kiyose. Many others opine that a trademark right is both public and private, or in-between.). Unlike the rights of an application, namely, a right to request a nation to grant a trademark right, a trademark right is an inherent "private right" to claim 1 exclusive possession of a trademark as between individuals. 4. Exclusive Property Right A trademark right is not a relative right or a claim right against a particular person, but is an exclusive right effective against the general public. A trademark right is an "absolute right that is similar to a real right in nature." (It is a "quasi-real right" because its subject is intangible property). It carries with it exclusivity; it is a right to exclusively use a particular trademark on particular designated goods. According to Ono, a trademark right protects the connection between the mark and its designated goods or services. The purpose is not to exclusively control a two-dimensional mark, but to protect the reputation represented by the mark (connective function) (Ono, "Unfair Competition Prevention Law", Hara Taikan (retirement) (Second volume), p. 953). A trademark right is not a personal right connected to the specific status of an individual though it does have proprietary value. It may also be transferred or assigned. As a result, it is considered a "property right." Furthermore, because a trademark right is used with respect to intangible property, exclusive possession of a registered trademark with respect to designated goods or services, it falls under the category of "intangible property right." 5. Number of Trademark Rights If a trademark has two or more designated goods or services, the trademark registration is considered to attach to each of such designated goods or services (Section 69). It is also considered to be a single registration for a single trademark. However, in a trial for cancellation of a mark or for invalidation of trademark registration, surrender of a trademark right, or any action affecting its registration, each item of the designated goods or services is treated individually. A trademark right initially affects each individual item of goods or services; renewal registrations are also considered to apply to each individual item of goods or services. The trademark rights for two or more designated goods or services may be viewed by some scholars as "a group of trademark rights." If this were the case, Section 69 is fictitious. In such a case, it may be considered a reasonable and cautionary (Yoshiwara=Takahashi, p. 130) or declaratory provision (Amino, p. 573). II. Entry into Effect of Trademark Right 1. Definition of Trademark Registration A trademark right commences when the mark to be used is registered (Section 18 (1)). This "registration for establishment" is a registration ex officio. By virtue of registration, a trademark is established. Registration of a trademark is also a "condition for entry into force", "condition for continuance" and "condition for prevailing against a third party." Trademark registration is one of the "actions for establishing rights" included in administrative dispositions. 2. First-to-file Principle 2 The Trademark Law of Japan adopts a registration basis to determine establishment of trademark rights, as opposed to a "first-to-use" system. It further adopts a "first-to-file rule" instead of following the principles of prior use. Because a trademark system that looks only to registration to determine establishment is found to be defective, practically speaking, the first-to-use principle is adopted as well. The Law provides protection for a trademark that is unregistered but well known to the public (Section 4(1)(x). A trial for invalidation under Section 46 (1)(i) may be held when one party attempts to register a mark that indicates goods or services connected with another person's business. Similarily, even if the owner of a well-known trademark fails to renew the trademark, a trademark registration made by others with respect to such trademark will be rejected and the registration by the owner will be permitted. The Trademark Law also has a provision providing for rights accrued by virtue of "prior use" (Section 32). 3. Adoption of a Registration-Based Trademark System Some countries adopt a "first-to-use" trademark system; that is to say, a right comes into effect by virtue of use. It is difficult in this type of system, however, to confirm if a trademark is in fact being used. It is especially difficult to determine when the trademark began to be used. Therefore, the right may be unstable and may tend to cause disputes. In such situations, the system does not serve to protect owners of the right. These are some of the reasons the Trademark Law of Japan adopts the "registration principle." According to this principle, the process of the trademark registration begins from filing of an application, and the trademark right comes into effect upon registration of its establishment by the decision of the Commissioner of the Patent Office. Although the registration principle is excellent in stabilizing rights, it has some weak points. Because use of the mark is not a requisite for registration, this system may be abused, causing many unused registered trademarks to exist. This results in a great number of unused trademark registrations preventing the public from freely choosing trademarks for use. They also cause unnecessary trouble during examination for trademark registration. For this reason, the Trademark Law shifts the burden of proof in a trial for cancellation of an unused trademark registration in order to reinforce an obligation to use trademarks. Every country is trying to harmonize the registration principle and the first-to-use principle. There is no country which adopts either one of the principles to the complete exclusion of the other. (See "Chapter V, Section 1 "Registration Principle and First-to- Use Principle", p. 88 of this book). Section 2. Effects of Trademark Right I. Effects of Trademark Right The owner of a trademark right shall "have an exclusive right to use the registered trademark with respect to the designated goods or designated services (Text of Section 25). The owner of a trademark has such "exclusive right" in order to protect the accrued 3 reputation with respect to designated goods or services and is entitled to take civil or criminal proceedings against any person infringing his or her right. The effects of a trademark right extend throughout the country, but not beyond the territory (for example, Japan) within which the Trademark Law is enforced. The trademark rights in each country are independent. The practical content of a trademark right is derived from the purposes of the Trademark Law. The protection of a trademark right refers primarily to the protection of the function of a registered trademark. It is based on a balance between the protection of the owner of a trademark right and the protection of consumers. Accordingly, the infringement of a trademark right should not be limited to "an act to affix the registered trademarks of another without limitation." Instead, it should be defined as an act that impairs a function of a registered trademark.

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