TRADEMARK STREET - Indication of Trademark Registration (1) -

June 7, 2003
HARAKENZO WORLD PATENT & TRADEMARK Intellectual Property Law Firm
Patent & Trademark Attorney
Teruhide SUKESUE

Welcome to Trademark Street! In this column, I'd like to pick up various subjects related to trademarks and browse them as if enjoying window-shopping.
Please take a look and enjoy reading over a cup of coffee.

1. Introduction
You may have seen a trademark with a "®" or a "TM" on its right shoulder such as "WINDOWS®" and "WORD™" of Microsoft Corporation. This time, let's start browsing the "®".

2. Origin of the "®"
The "®" is made up with an initial character of the word "Registered" and a circle surrounding it and used to indicate a trademark to which it is attached is a registered trademark. You may have also seen a similar mark "(C)". The "(C)" is made up with an initial character of the word "Copyright" and a circle surrounding it. It indicates that a book to which it is attached is protected by the Copyright Law. The "®" was primarily used in the United States [1]. Now it is used all over the world since it has a design that is easy to be indicated. For instance, the "®" is defined as an indication of trademark registration in China [2].

3. Japanese Regulations concerning Indication of Trademark Registration How is the indication of trademark registration defined in Japan? The Trademark Law (hereinafter referred to as "the Law") prescribes that when a registered trademark is applied to the designated goods, their packaging, and so forth, steps to attach to the trademark an indication to the effect that the trademark is a registered trademark shall be taken (Article 73, the Law). This provision is considered to have been made for the effects brought by the indication of trademark registration, that is, it indicates that a trademark right is granted on the trademark and warns in advance against infringement by the third parties [3].
Since this provision is interpreted as a mere instruction that has no legal force [4], to attach an indication of trademark registration is not a legal obligation. The owner of a trademark right is at liberty to attach an indication of trademark registration and is not suffer any penalty for not attaching it (See Article 5D, the Paris Convention). Pursuant to the above provision, Article 17 of the Regulations under the Law (hereinafter referred to as "the Regulations") prescribes "Indication of the existence of trademark registration under Article 73 of the Trademark Law shall consist of the words "registered trademark" and its registration or international registration number".
In relation to that, attaching to an unregistered trademark [5] an indication of a trademark registration or an indication confusingly similar thereto (false marking) is prohibited (Article 74, the Law). This provision is considered to prohibit the deception towards the third parties in which a false indication is attached to an unregistered trademark as if a trademark right were granted on it [6].
Any person violating Article 74 shall be liable to imprisonment with labor not exceeding three years or to a fine not exceeding 3,000,000 yen (Article 80, the Law), and in the case of legal entity, to the fine up to 100 million yen pursuant to the provision of dual liability (Article 82, the Law) for reinforcing prevention of criminal acts. Only intentional crimes are punished since there is no provision concerning punishments for negligent crimes [7].
How about civil liability? Since there is no provision concerning civil liability in the Law, unlike the case with criminal liability, it may appear that there is no civil liability to be assumed. However, civil liability is not excluded even if the Law has no provision for such liability.
The Civil Code is applied under the general principles of laws of tort. A person who intentionally or negligently has infringed upon the rights of another person or legal interests to be protected by attaching false marking is liable for compensating damages [8]. Provisions concerning criminal liability, unlike those concerning civil liability, were made to meet the requirements of (Lat.) nullum crimen sine lege (Article 31, the Constitution).
There is no strict regulation stating that the indication of trademark registration should be attached. However, false marking is strictly regulated by the laws in terms of civil liability and criminal liability.

4. Legal meaning of the "®" and handling thereof in Japan
What is the meaning of the "®" in Japan? As mentioned above, unlike the United States and China, Japan does not have any laws or regulations concerning the "®".
Nevertheless, the "®" should be considered to be an indication of trademark registration since it is widely used in Japan as such and consumers and traders perceive that a trademark with the "®" is a registered trademark.
Here we have an issue of the interpretation of Article 73 of the Law providing "as prescribed in an ordinance of the Ministry of Economy, Trade and Industry" and Article 17 of the Regulations defining the indication of trademark registration as the words of "registered trademark" and registered number thereof pursuant to Article 73.
In the case that the Regulations limit the indication of trademark registration to the one defined therein, there is no ground set forth in positive laws for dealing with the "®" as an indication of trademark registration.
I propose three hypotheses concerning the grounds in positive laws and examine each of them.
In the first hypothesis, Article 73 of the Law and Article 17 of the Regulations, and Article 74 of the Law are considered as one unit (Integration Hypothesis). In this point of view, the indication of trademark registration prescribed in Article 73 of the Law is limited to the one prescribed in Article 17 of the Regulations. Then "the indication of trademark registration" in Article 74 is interpreted based on the above-mentioned limited one. In other words, the indication of trademark registration in Article 74 refers to the one prescribed in Article 17 of the Regulations only and all other indications fall under "an indication confusingly similar thereto (to the indication of a trademark registration)".
There seems to be a certain gap between the indication of trademark registration in this hypothesis and that in general understanding. Further, indications of the "®" which are generally used fall under the false marking in Article 74 of the Law. This hypothesis may not conform to the trade circumstances where the "®" is widely used and the conventional wisdom for the "®".
Contrary to the Integration Hypothesis, the second hypothesis (Illustration Hypothesis) considers Article 17 of the Regulations to illustrate one example of the indication of trademark registration and not to eliminate other indications of trademark registration such as the "®".
Unlike the Integration Hypothesis, the Illustration Hypothesis is in conformity to the trade circumstances and the conventional wisdom.
This hypothesis, however, may not be able to explain Article 17 of The Regulations prescribing "the indication of trademark registration prescribed in Article 73 of the Law shall consist of the words of "registered trademark" and registration number or international registration number thereof" pursuant to Article 73 of the Law providing "as prescribed in an ordinance of the Ministry of Economy, Trade and Industry".
Article 73 of the Law authorizes the Regulations, i.e., the ordinance of the Ministry of Economy, Trade and Industry, in the provision to define the content of the indication of trademark registration. Further, it is difficult to determine Article 17 of the Regulations to include other indications of trademark registration by the words of "shall consist of".
The third hypothesis (Separation Hypothesis), which is an intermediate hypothesis of the first and the second, proposes that the meaning of the indication of trademark registration should be separated from the statements of Article 73 of the Law and Article 17 of the Regulations. The idea of this hypothesis is as follows:
In the case of attaching an indication of trademark registration under Article 73 of the Law, the indication should be attached pursuant to Article 17 of the Regulations. In the case of the indication of trademark registration in Article 74 of the Law that may lead to criminal punishments, the meaning of the indication should be considered separately from Article 17 of the Regulations.
In this point of view, the use of the "®" is unlikely to be judged illegal if the trade circumstances and the conventional wisdom are taken into consideration. However, if we follow a systematic interpretation in which the place and the order of the articles are concerned, the statement concerning the indication of trademark registration in Article 74 of the Law might need to be interpreted under Article 73 of the Law and Article 17 of the Regulations. In addition, this hypothesis would not be able to eliminate concerns over its excessively elaborate interpretation.
As mentioned above, each of the three hypotheses has both advantages and disadvantages and none of them is conclusive. However, the Integration Hypothesis is impossible to be taken in view of the validity of conclusion.
This hypothesis, which emphasizes logical conclusions of the articles, is based on (Ger.) Begriffsjurispridenz interpretation. It may be determined to underestimate validity of conclusions based on the trade circumstances and the conventional wisdom. Accordingly, the interpretation is not considered to fit in with the reality and to be capable of solving specific problems.
The remaining options are Separation Hypothesis and Illustration Hypothesis.
The Separation Hypothesis is considered to be more appropriate than the Illustration Hypothesis. In the Illustration Hypothesis, the words "shall consist of the words c" in Article 17 of the Regulations are to be replaced by the words "shall includec" in interpretation. This way of interpretation may not be acceptable for it seems to be outside the scope of interpretation. This hypothesis appears to be in support of the revision of laws rather than provide an interpretation of the language of the legislation.
Since regulation is a sub-concept of law, it may be unnecessary to examine regulations as closely as the case with laws to prevent the revision thereof.
It can be quite meaningful to argue about the revision of the regulations since they are easily amended in contrast to the laws. Nevertheless, there seems to be something wrong with arguing about the revision while arguing about the interpretation because it is a premise in arguing about issues concerning laws to separate the argument about the interpretation from that about the revision.
The argument about the revision is not included in the Separate Hypothesis.
Although the Separate Hypothesis has some problems as mentioned above, it does not necessarily judged to be inappropriate if the difference of the characters between Articles 73 and 74 of the Law are taken into consideration.
While Article 73 is just an instruction, Article 74 leads to criminal punishments. Article 17 of the Regulations, which is originally related to an instruction, should not be interpreted as a regulation concerning a provision leading to criminal punishments. Accordingly, we adopt the Separate Hypothesis in this column.
From this point of view, Article 74 of the Law has good grounds for interpreting that the "®" is an indication of trademark registration.
This means that interpreting the "®" as an indication of the trademark registration is also allowed in Japan regarding Article 74 of the Law. For your information, there would be no problem in interpreting that the "®" is not an indication of trademark registration prescribed in Article 73 of the Law because the article was originally a mere instruction.
Although no document in which the issue whether the "®" is an indication of trademark registration or not is discussed in terms of the interpretation of laws and regulations can be found, Dr. Amino states in his book as follows:
"... If Japan has an ordinance of Ministry concerning the "®", products imported from the United States, which have the above-mentioned trademarks with the "R" thereon, may be judged to fall under the provision providing false marking (Article 74). No statement concerning the "®" was made in the ordinance in consideration of this
possibility. However, the "R" has been conventionally used here in Japan."
He explains the reason the ordinance (Article 17 of the Regulations) was enacted rather than provides his opinion, mainly focusing on the "®" in terms of Article 74 of the Law. If there is such problem, the indication of trademark registration should not be necessarily provided in regulations.
This type of problem should be solved by courts, i.e., jurisdiction through interpretation of Article 74 of the Law under the system of the separation of powers prescribed in the Constitution. As long as the issue whether the "®" attached to imported products from foreign countries such as the United States is directly connected to criminal punishments, it should be considered in terms of crime-constituting conditions through interpretation of "the indication of trademark registration", justifiable causes such as acts committed in the pursuit of lawful business (Article 35, the Criminal Law), and causes of non-imputability such as expectativility pursuant to Criminal Law Theory. The administration should not intervene in this matter by means of ambiguous regulations. The issue does not appear to be handled by the administration. It does not seem to have any effect on dealing with the issue.
The reason why the "conventional" use of the "®" does not fall under the false marking is not clarified. Although this topic is also interesting, let it be a subject for other time for putting a period to the present topic.
In conclusion, since the "®" is considered to be an "indication of trademark registration" in applying of Article 74 of the Law, at least false marking thereof is subject to criminal and civil liabilities.

5. Supplementary argument concerning criminal and civil liabilities
As mentioned above, attaching the "®" to an unregistered trademark is subject to criminal liability. However, the case where a person was arrested and charged for the false marking has not been heard.
There is no problem if the false marking has never been committed. Otherwise, Article 80 of the Law may be a dead law in reality.
Although the false marking is a tort in the Civil Code, it is not easy to verify the causal relationship between acts of false marking and damages.
Attaching the "®" to an unregistered trademark is not likely to damage consumers and such. To verify the causal relationship between them is actually impossible. Therefore, liability for the tort is seldom accused for the false marking.
Attaching the "®" to an unregistered trademark should be avoided even though there are few possibilities that it is determined to be criminally and civilly liable. Such act is still illegal in that it indicates false trademark registration. Besides the above, unregistered trademarks with the "®" may affect so-called brand image in brand marketing and keep consumers away from purchasing products of the brand for those trademarks are perceived to be unreliable. As a result, the brand may be forced to retreat from the market because of the damage to credibility of the brand at the worst. A disreputable brand can provoke a considerable negative reaction among consumers.
A false marking, which is not so risky in terms of laws, may cause irreparable damage to business operation. Accordingly, at least attaching false marking intentionally should not be committed at any cost.
I'd like to discuss the "TM" next time in "Indication of trademark registration (2)".
The issue of this column, which includes Criminal Law Theory, might be complicated for browsing as window-shopping. It might not be suitable for a coffee break. As there are not so many discussions on this issue,
I hope this will provide you an idea about it. I would be pleased to have your opinions.

Reference
[1] Article 29, Lanham Act (15USC1111)
[2] Paragraph 2, Article 3, The Implementing Regulations under the Trademark Law of the People's Republic of China "A "R" is included in registration marks. When a registered mark is used, it shall be indicated on the right shoulder or end thereof.
[3], [4] "Practical Guide to Industrial Property Laws" edited by the Japanese Patent Office (Japan Institute of Invention and Innovation (Hatsumei Kyokai), the 16th edition, 2001) p. 1324
[5] All pending trademarks (including unregistered trademarks of which registration fees have been paid) and trademarks of which terms expired are included in the unregistered trademarks. (Yoshiyuki TAMURA, "Outlines of the Trademark Law" (KOBUNDO, the second edition, 2003) p.p. 404-405).
[6] "Practical Guide to Industrial Property Laws" edited by the Japanese Patent Office (Japan Institute of Invention and Innovation (Hatsumei Kyokai), the 16th edition, 2001) p. 1326
[7] Paragraph 1, Article 38, Japanese Criminal Code "Acts carried out without any intention to commit crimes are not punished, otherwise prescribed specially in laws."
[8] Article 709, Japanese Civil Code
"A person who intentionally or negligently has infringed upon the rights of another person is liable for compensating damages."
[9] Makoto AMINO, "Trademark" (Yuuhikaku, the 6th edition, 2002) p.755