Feature By Ai Nagaoka

Parody and the IP High Court – the Japanese experience

Under Japanese law, the mere fact that a Recent case law mark is a parody makes no difference when it comes KUMA v PUMA to registrability. Applicants for parody marks should In KUMA v PUMA (June 27 2013) the IP High Court supported the Japan Office’s (JPO) trial decision, which rejected the thus pay particular attention to issues of similarity, registration of a trademark consisting of the word KUMA, which as well to the original mark’s level of fame means ‘bear’ in Japanese, with a bear device as shown in Figure 1. The court held that the KUMA mark was likely to cause confusion with the PUMA marks – which consist of the word PUMA and a puma device as shown in Figure 2 – and was also likely to cause damage to There is no legal definition of a ‘parody trademark’ in the Japanese public order or morality. Trademark Act. The registrability of such marks is often assessed in PUMA SE filed a motion to invalidate the KUMA registration with relation to the following considerations: the JPO on the grounds that the KUMA mark was likely to cause: • whether the mark is likely to cause damage to public order or • confusion with PUMA SE’s business, when taking into account morality (Article 4(1)(vii)); the well-known nature of the PUMA marks in Japan; and • whether the mark is similar or identical to any prior registered • damage to public order or morality. marks (Article 4(1)(xi)); • whether the mark is likely to cause confusion over the source of The JPO Appeal Board recognised the well-known nature of the goods and services (Article 4(1)(xv)); and PUMA marks in Japan and ordered the cancellation of the KUMA • whether the mark is similar to another party’s well-known mark registration on the two grounds claimed by PUMA SE. The case was and has been filed for registration by an applicant with an unfair brought before the IP High Court. purpose (Article 4(1) (xix)). The IP High Court supported the JPO’s trial decision, confirming that the grounds cited were reasonable. This article examines some recent Japanese court decisions According to the court’s decision, both marks were similar in related to parody trademarks. While it seems that the courts tend that they had in common four letters and an animal silhouette, to protect rights holders, it is important for both rights holders and located at the upper right side of the letters. Although the type of users of parody trademarks to understand how famous trademarks animal was different, both animals had four legs with their forefeet and parody trademarks are protected. outstretched towards the lettering. The difference in the lettering

Figure 1: Kuma mark and device Figure 2: Puma mark and device

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Figure 3: Buta means ‘pig’ in Japanese Figure 4: The Uuma (horse) mark

was merely the first letter and the design of the letters in the two The original owner of the KUMA mark also filed marks consisting was similar. Consequently, the composition of both marks of the words ‘buta’, which means ‘pig’ in Japanese and ‘uuma’, which resulted in a similar image, giving consumers the impression that means ‘horse’ in Japanese, as shown in Figures 3 and 4. The JPO they were close to each other in appearance. rejected these marks on the grounds that they were likely to cause Further, the IP High Court found as follows: “The goods covered damage to public order or morality. The applicant appealed this by the ‘KUMA’ mark, such as clothing, are identical to, or are very decision. However, once again the JPO Appeal Board stated that these similar to the goods such as ‘Jackets, pants for jogging, trousers, marks were contrary to the purpose of the Trademark Act and were T-shirts, swimming wear, hats, belts, shoes for sports’, which have also against business morality, and thus supported the JPO’s decision been used by PUMA SE for a long period, from the perspective of use, to reject the registration (Appeal Cases 2008/10902 and 2008/10900). purpose, quality, sales place and so on. The consumers in the field of such goods do not have detailed knowledge of the trademark or SHI-SA v PUMA and do not always pay adequate attention to trademarks when KUMA v PUMA was not the first parody trademark case that PUMA they select or purchase goods. In addition, marks used for clothing has had to fight in the IP High Court. and shoes etc. are often used as a one point mark, which are usually A trademark consisting of the words ‘shi-sa’ – the name of a small, and in such case, consumers are likely to receive an overall mythical animal which is well known in Okinawa, Japan – and impression of the mark and be unaware of small differences.” “Okinawan original guardian shishi-dog” with a jumping SHI-SA device Taking this into account, the IP High Court held that consumers was registered in relation to clothing in Class 25. The SHI-SA mark was would take notice of the prominent combination of the alphabetical filed by a citizen of Okinawa, which is in the southern part of Japan. letters and animal devices, and associate the KUMA mark with the PUMA AG filed an opposition with the JPO on the basis of its famous PUMA marks. As a result, the KUMA mark was likely to well-known PUMA marks, as shown in Figure 2. The opposition was cause confusion with the business of PUMA SE. made on the grounds that: The IP High Court also held that the KUMA mark had been filed • the SHI-SA mark and the PUMA marks were similar; and registered with the unfair purpose of free riding on the trust, • the SHI-SA mark was likely to cause confusion with the business reputation and goodwill of the PUMA marks, which were well known of PUMA AG; and around the world. Continued use of the KUMA mark would likely • the SHI-SA mark was a parody of the well-known PUMA marks dilute the PUMA marks and destroy goodwill in them. Therefore, the and was thus free riding on their goodwill. KUMA mark was contrary to the purposes of the Trademark Act and against ethical standards. The JPO cancelled the SHI-SA mark on the basis of similarity with the prior PUMA marks. However, on July 12 2010 the IP High Court reversed the JPO’s decision by allowing the registration of the SHI-SA mark. The IP High Court recognised the dissimilarity between the marks in appearance, sound and concept. For example, the SHI-SA mark The courts tend to find in included the words “Okinawan original guardian shishi-dog”, while the PUMA mark had no such elements. The design of the alphabetical favour of the owners of famous letters of ‘shi-sa’ and ‘puma’ was also significantly different. In addition, according to the IP High Court, the SHI-SA mark was marks. This would seem to be used for t-shirts or caps and such goods were sold only in shops located in Okinawa and online. Only a small amount of SHI-SA goods were sold, the trend for the foreseeable while large amounts of PUMA goods are sold all over the world. The IP High Court held that in view of the dissimilarity between future in relation to parody the marks and the scale of sales, the SHI-SA mark was unlikely to cause confusion with PUMA AG’s business. trademarks in Japan In this case the IP High Court further referred to the concept of parody. According to the court, the concept is not defined by the Trademark Act. Therefore, any decision as to whether a mark is

70 World Trademark Review April/May 2014 www.WorldTrademarkReview.com Figure 5: The adidog device mark Figure 6.: The adidas trademark

likely to cause confusion should be based on the applicability of the LAMBORGHINI mark, while the phonemes ‘mi’ and ‘ghi’ also provisions stipulated in the act. resembled one another. Further, both marks were considered similar Previously, the courts have rejected trademarks which were in appearance as a whole. In view of the similarities in sound and apparently a parody of another party’s famous mark. For example, appearance, as well the trading conditions, LAMBORMINI was found a cat device mark was cancelled in an opposition filed by MGM to be similar to LAMBORGHINI. on the grounds of likelihood of confusion with its lion trademark In light of this similarity, the IP High Court found as follows: (Opposition Case 2002-090881). • The LAMBORMINI mark was similar to the LAMBORGHINI mark, The ‘adidog’ device mark depicted above was also cancelled which was well known among Japanese consumers as indicating in an opposition filed by ADIDAS on the grounds of likelihood of the goods manufactured and sold by Automobile Lamborghini confusion (Opposition Case 2007-900190). SpA and to be used in respect of automobile goods; In SHI-SA v PUMA the court made clear that the mere fact of • The goods covered by the LAMBORMINI mark included whether a mark is a parody will not be taken into consideration automobiles bearing the LAMBORGHINI mark, meaning that when assessing the mark’s registrability. the LAMBORMINI mark was likely to cause confusion with the business of Automobile Lamborghini SpA; and Other cases related to parody trademarks • Although the owner of the LAMBORMINI mark was aware that the Rolling Stones’ tongue and lips mark LAMBORGHINI mark was well known among Japanese consumers, A trademark depicting a tongue and lips was registered in Class 9 by it filed an application for the LAMBORMINI mark in relation to a Japanese rock band. Famous UK rock band the Rolling Stones filed automobiles; it then proceeded to manufacture and sell a custom an opposition with the JPO on the basis of its famous tongue and lips buggy under the LAMBORMINI mark. In view of this, the court mark. The JPO opposition decision partially cancelled the trademark found that subject mark had been used with the intention of registration in relation to goods related to music in Class 9. The gaining unfair profits or causing damage to another party. Rolling Stones appealed to the IP High Court. On January 13 2010 the IP High Court reversed the JPO’s decision by allowing the registration As a result, the IP High Court ruled that the JPO had erred in its of the Japanese rock band’s tongue and lips mark. judgment and reversed its trial decision to allow registration of the According to the court, the mark filed by the Japanese rock LAMBORMINI mark. band was unlikely to cause confusion with the Rolling Stones’ famous mark. The court recognised that there were some points in Key considerations common in the appearance of both marks (eg, red lips, red tongues As explained above, the mere fact that a mark is a parody will not be protruding from an open month and white teeth). However, the taken into consideration when it comes to assessing its registrability. overall impressions arising from each mark were quite different It is therefore particularly important for rights holders and users and the relevant consumers – rock music fans – would usually pay of parody trademarks to consider whether the parody mark is similar adequate attention to the goods and services that they selected or to the original mark and whether the original mark is well known purchased. Given that the Rolling Stones’ tongue and lips mark is among Japanese consumers, as provided by the Trademark Act. very famous among music fans, the court ruled that there was no As seen from the latest two court judgments in 2012 and 2013 – likelihood of confusion over the source of goods and services. LAMBORMNI v LAMBORGHINI and KUMA v PUMA – the courts tend to find in favour of the owners of famous marks. This would seem to LAMBORMINI v LAMBORGHINI be the trend for the foreseeable future in relation to parody A trademark consisting of a stylised word – ‘Lambormini’ – with a trademarks in Japan. WTR tail device was registered in relation to automobiles in Class 12 by a Japanese company manufacturing custom buggies. Automobile Lamborghini SpA filed an invalidation trial with the JPO on the basis of its own famous mark. However, the JPO dismissed the invalidation trial. The case was then appealed to the IP High Court. On March 6 2012 the IP High Court found that LAMBORMINI and LAMBORGHINI were phonetically similar to each other. Nine Ai Nagaoka is an attorney at Anderson Mori & Tomotsune of the 10 letters of the LAMBORMINI mark were common to the [email protected] www.WorldTrademarkReview.com April/May 2014 World Trademark Review 71