Brief Summary of Collective Trademark

March 23, 2006
Patent Attorney
Yukari Sato

1. Definition
Collective trademark refers to a trademark containing a regional name, which is used by a cooperative business association with a corporate status or a farmer’s cooperative. Registration of the collective trademark is processed under more moderate regulations than usual if the trademark is judged to have certain publicity.

2. Background
Recently, local organizations have cooperatively used local brands to emphasize their products or services. As cases of “Yubari Melon,” “Inaba-Udon,” or “Seki-Saba” illustrate, vitalization of local industries through such attempts have prevailed nationwide. The local brands, on the other hand, were exposed to abuses and tarnishes including mislabeling or mal-uses for poor quality products or services. Despite such controversial issues, the local brands were denied from a proper protection. In fact, under the conventional trademark laws, local brands were categorized as collections of ordinal seals showing an area of production, a sales territory/a service area, or quality of a product/service (first paragraph of Article 3); therefore, registrations of the local trademarks were rarely approved.
Collective trademark was established to improve such situation. Application of it has been expected to contribute to the vitalization of the local industries, differentiating local products or services.

3. Registration Requirement of Collective Trademark
(1) Subjective Requirement
Eligible applicants include a cooperative business association with a corporate status, an association established on a particular law, and a corresponding foreign association. Organizations above have to have established internal regulations in incorporation acts banning themselves from putting restrictions on new enrollments of prospective members. Collective trademarks were rejected from being registered on the reason that monopolization of local trademarks by one organization was inappropriate (first paragraph of Article 3,) so it is important that collective trademarks have to be available to anyone interested in them. Therefore, unlike in the case of the organization trademark, the establishment of the regulation above is required in trademark law.

(2) Objective requirement
A trademark has to satisfy at least three requirements below to be registered as collective trademark.
① A trademark usable by members of a legitimate organization
Like organization trademark, collective trademark proves that sources of products or services are members of a legitimate organization. Therefore, collective trademark requires to be actually used by the individual members in addition to by the legitimate organization itself.

② Publicity requirement
As a result of registration, collective trademark has to have publicity among consumers widely as the indication that the sources of the products or services are legitimate organizations or their members.
Conventionally, even when products were denied from being registered under the section 3 to 5 of first paragraph of Article 3, those products could still be registered under the second paragraph of Article 3 if they were judged to have publicity among consumers. Yet, the publicity in this case had to be nationwide, so local brands only known in a certain province were rarely protected. Therefore, exclusive rights have been given to applicants under more moderate regulations than the second paragraph of Article 3 while restrictions on third party’s use of local trademarks is cared.

③ Trademark composed of a regional name and a production or a service name
Trademark able to be registered as collective trademarks is composed of characters showing a regional name and a product or service name in ordinary methods, which are specified under sections of second paragraph of Article 7.
i)A Regional Name + A Common Name of A Product or A Service (section 1 of second paragraph of Article 7 (2))
ii)A regional Name + An Idiomatic Name of A Product or A Service (section 2 of second paragraph of Article 7 (2))
iii)A Common Name of A Product or A Service or An Idiomatic Name of A Product or A Service + A Regional Name + Phrase Used to Describe An Area of Production (section 3 of second paragraph of Article 7(2))
Trademark not falling under the categories above should originally have distinctiveness, thereby should be able to be registered before the establishment of the system of collective trademark.

④ Requirement for a close link between a region and a product/service
A regional name of collective trademark should refer to a region having close link with a product or service. Even though registration requirements for the collective trademark are alleviated to protect local brands, products which have nothing to do with a region should not be registered as collective trademarks.

⑤ Other registration requirements (section 1 an d 2 of first paragraph of Article 3, and Article 4)
Except fine prints in Article 3, registration requirements for collective trademark are same as those for ordinal trademark or organization trademark since exclusive rights are given to collective trademark likewise.

4. Transferring of property in trademark and setting of rights of use
(1)Property in collective trademark cannot be transferred to other parties (section 4 of second paragraph of Article 24.)
Approval of free alienation of property in collective trademark will damage the purpose　of acknowledging particular organizations exclusively the rights to monopolize the collective trademark. However, succession of the rights caused by a merger between organizations is admitted since sources of products and services remain partially same and since reputations of qualities in products or in services are maintained.

(2)Exclusive license cannot be set for the property in collective trademark (Article 30 Rider.)
On the same reason as banning the free transfer of property in trademark, establishing exclusive license for collective trademark is not admitted. If exclusive license is set for property in collective trademark, uses of collective trademark by members of the legitimate organizations will be restricted as well. Meanwhile, ordinary use right can be set for property in trademark since the legitimate organizations and their members can still continuously use trademark. Therefore, the purpose of authorizing the legitimate organization to monopolize the collective trademark will not be damaged.

5. Use of a third party
Trademark law acknowledges a third party rights to continuously use trademarks identical or similar to registered collective trademark regardless of whether or not the trademarks are registered on following two conditions: if he has used the trademarks before the application for registration of collective trademark is made; and if the trademarks have acquired publicity (prior use rights: Article 32.)
Furthermore, trademark law acknowledges continuous uses of trademarks which have been used without purposes of unfair competitions in advance of the registration of collective trademark, so that collective trademark will not interferes with interests of the third party (section 1 of second paragraph of Article 32.)
If the third party is not acknowledged of the prior use rights in such case, he will not be able to continue present businesses; as a result, equity between the organizations owing collective trademark and the third party will be lost.

6. Objection and invalidation trial (Article 43 (2), Article 46)
In addition to a case when registration of collective trademark violates Article 7 (2), two other cases are added to the grounds for objecting and for requesting invalidation trial. Those are: a case when collective trademark loses publicity after registration; and a case when collective trademark fails to satisfy subjective requirements after registration. If the legitimate organizations fail to satisfy the subjective requirements as a result of their changes or a result of neglecting of marketing efforts or if collective trademark loses publicity due to changes in interests or preferences of consumers, it is more appropriate to acknowledge a third party rights to freely use the collective trademark and to give him opportunities to apply for anew registration.
Here, statute of limitation (Article47) should be paid attention to. Statute of limitation refers to a time period after which law conditions provided by a registration will be maintained from perspectives of common good even when the registration itself contains defects. However, for those collective trademark which fails to satisfy the registration requirements (section 1 of second paragraph of Article 7,) the statute of limitation will not be applied. That is to say, even after the statute of limitation passes, in this case five years from the time of registration, invalidation trial can be filed against collective trademark.
Since collective trademark is concerned with interests of many people engaging in local industries, it is not suited for being monopolized originally; therefore, the statute of limitation should not be applied to collective trademark which fails to satisfy the registration requirements.
It also should be noted that invalidation trial cannot be filed on the ground that collective trademark does not have publicity if collective trademark had publicity at the time of registration and if five years have passed since then (second paragraph of Article 47.) As publicity requirements are concerned, there may be a case that publicity will be gained after registration; therefore, concrete appropriateness should be sought.

7 Speculation (1) Registration requirement for publicity
Consider the following case:
There are a few organizations using a trademark of “Bigo’s footwear” for shoe products. Right after organization A applies that trademark for collective trademark, organization B applies as well. Even though the trademark of “Bigo’s footwear” gains publicity in this province, it remains uncertain to which organization the trademark owes its publicity. As illustrated above, if more than two organizations using the same trademark coexist in the neighborhood, it may be difficult to judge to which organization’s products or services the trademark owes its publicity. The requirements for publicity are not clear from a concept of corporation legitimateness on the Article 7-2, so whether organization A or B should be legitimate has to be judged before the principle of first-to-file is considered.

(2) Requirements for close link
The registration requirement for collective trademark also includes close links between products or services and regions. According to the types of the products or the services, traders and consumers, or conditions of trading, the close links are judged to be whether socio-conventionally valid or not. Yet, in some respects, such perspectives as social customs appear to be inappropriate as criteria to judge the validities of close links.

(3) How to react to prospective outsiders who use collective trademarks
It will become necessary to carefully approach to issues, such as rights violation, setting of use rights, new enrollment in an organization, or advisability of the application of Article 26, arising between legitimate organizations and prospective outsiders in a neighborhood.


Reference
Patent Office Explanatory Meeting Text “H.17 Consideration Over Amendments of the
Trademark Laws ”
Aggregate Corporation of the Association of Invention “H.17 Amendments of the
Trademark Law and Comments on the Industrial Property Right Laws”
Bulletin of Japan Trademark Association 57th issue