June 2024 [Legal] Newsletter

June [Legal] Newsletter

April 2024About the Revised Unfair Competition Prevention Act

At the 5th Ordinary Session of the Diet in 211, the "Act for Partial Amendment of the Unfair Competition Prevention Act, etc." (Act No. 51), which includes the revision of the Unfair Competition Prevention Act, was passed and enacted, with the following three pillars: In addition, some of the Trademark Law, Design Law, Patent Law, Utility Model Law, etc. were revised, mainly the Unfair Competition Prevention Law.

(1) Strengthening the protection of brands, designs, etc. in light of the diversification of business activities due to digitalization

(2) Developing intellectual property procedures, etc. in response to the coronavirus pandemic and digitalization

(3) System development for international business development

Main revised items and enforcement date

Of these, the main amendments to the Unfair Competition Prevention Act are as follows, and will come into effect on April 1, 2024.

▪ Preventing counterfeiting in the digital space

→With regard to acts of imitation of product form, the act of providing a product that imitates the form of another person's product in the digital space will also be considered an act of unfair competition, and the right to seek an injunction will be made exercisable.

▪ Enhanced protection of trade secrets and privately available data

→ Regarding the Unfair Competition Prevention Act, in services where big data is shared with others, even if the data is kept confidential, it will be protected as limited provision data, and it will be possible to request an injunction to stop infringing acts. In addition, the protection of trade secrets will be strengthened by making it possible to request an increase in damages that exceed the production capacity of the infringed party in a lawsuit for compensation as an amount equivalent to the license fee.

▪ Strengthening and expanding penalties for bribery of foreign public officials

→In order to implement the OECD Convention Against Bribery of Foreign Public Officials at a higher level and more accurately, the statutory penalties for natural persons and corporations will be increased, and individual acts of bribery by foreign employees of Japanese companies overseas will also be subject to punishment.

▪ Clarification of procedures in international trade secret infringement cases

→Regarding the Unfair Competition Prevention Act, even if a violation of a Japanese company's trade secrets occurs overseas, a lawsuit can be filed in a Japanese court, and Japan's Unfair Competition Prevention Act will be applied.

This letter specifically introduces the prevention of counterfeiting in the digital space, which is closely related to intellectual property practices.

Preventing counterfeiting in the digital space

[Unfair Competition Prevention Act Article 2, Paragraph 1, Item 3 (after amendment)]

Transferring, renting, exhibiting for transfer or loan, exporting, importing, orAct of providing through telecommunications line

The Unfair Competition Prevention Act attempts to protect product designs by regulating the act of transferring a product that imitates the shape of another person's product as unfair competition (Article 2, Paragraph 1, Item 3 of the Unfair Competition Prevention Act). However, as traditional businesses become increasingly digitalized, with transactions in digital spaces such as the Metaverse becoming more active, the Unfair Competition Prevention Act, Article 2, Paragraph 1, Item 3, has become a counterfeit case that mixes physical and digital. Issues were pointed out that it may not be possible to respond.

Therefore, under Article 2, Paragraph 1, Item 3 of the Unfair Competition Prevention Act before the revision, only acts based on tangible things such as "assignment" and "lending" were stipulated as unfair competition. The amendment was made so that acts of providing imitative products through networks can also be considered unfair competition.

In order to regard imitation of product forms in the digital space as unfair competition, it can be assumed that "goods" (Article 2, Paragraph 1, Item 3 of the Unfair Competition Prevention Act) must include intangible objects (such as data). However, rather than amending the law, the article-by-article commentary (effective April XNUMX, XNUMX) has made it clear that "goods" includes intangible objects.

In addition, in order to prevent imitation acts in the digital space, which have not been clearly regarded as unfair competition in the past, it is necessary to take into account the predictability of business operators, so what kind of acts in the digital space should be treated as unfair competition. Article-by-article commentary also clarified whether this can be considered "imitation."

Reference URL:

https://www.meti.go.jp/policy/economy/chizai/chiteki/kaisei_recent.html

https://www.jpo.go.jp/system/laws/rule/hokaisei/sangyozaisan/fuseikyousou_2306.html

https://www.meti.go.jp/policy/economy/chizai/chiteki/pdf/Chikujo.pdf

Trends in design registration applications for new objects of protection

The Japan Patent Office website has published application trends for new subjects of protection under the revised Design Act (enforced April 10, XNUMX). According to this, the number of applications for the newly protected designs of "images," "architectures," and "interiors," as well as related designs filed after the issuance of the design bulletin for the principal design (up to the day before XNUMX years have passed since the application for the basic design) due to the expansion of the related design system, is as follows (excluding Hague). According to the Japan Patent Office website, many companies and other parties have shown a high level of interest in the application status for these designs, and we would like to continue to publish this information in our newsletter.

Number of design registration applications for new objects of protection

The numbers in parentheses are the number of cases that have increased since the last time (approximately three months ago)

(Only those available as of May 9, 2024) (From the Japan Patent Office website)

Number of registrations for new protected subjects

The numbers in parentheses are the number of cases that have increased since the last time (approximately three months ago)

(Only those available as of May 9, 2024) (From the Japan Patent Office website)

Above 1. The number of design registration applications includes those that are currently under examination, and the registration rate is not determined by the number of registrations listed above/the number of design registration applications listed above.

Number of design registration applications for related designs

The numbers in parentheses are increases from the previous time (approximately three months ago) (from the Japan Patent Office website)

(Only those available as of May 9, 2024 / For applications filed before the publication of the design gazette, applications filed after April 2020 are counted.)

Japan Patent Office: Collection of trademark utilization examples “Trademark Utilization Guide Learn from Examples”

On April 5, 2024, the Japan Patent Office released the "Trademark Usage Guide: Learning from Case Studies," which was released in XNUMX, and for the first time in five years, released the new "Trademark Usage Guide: Learning from Case Studies XNUMX." This guide uses actual examples to introduce how to use trademarks in business and the benefits of obtaining rights, as well as introducing examples of failures such as "what happened because a trademark was not obtained." This article only introduces a portion of the guide, and more details can be found on the following website.

Introduction of failure cases (1) Troubles in Japan

〇 After using the store name for many years without registering it as a trademark, we suddenly received a warning letter. Even though the other party registered the trademark long after we opened, we were forced to change the name of the store and the brochures and signboards we were using had to be changed.

When the name 〇 was attached to a product and sold without being registered as a trademark, the product gained popularity and became known to consumers. Perhaps because of this, the name was registered as a trademark by another company, and an exorbitant fee was charged based on the trademark right.

〇When we issued a press release about a new service we were planning to offer without filing a trademark application, another company applied for and registered the name of the service before we could file the trademark application.

>>>In order to prevent other companies from taking advantage of the trademark, it is better to apply for and register important trademarks promptly (if possible, before publication).

〇I waived my trademark rights that I had licensed to another company. After this was discovered, I hurriedly applied again. Fortunately, I was able to register, but I had a near-miss.

〇I forgot to renew my trademark rights and let them expire. After the rights expired, someone else registered the same name as a trademark and subsequently asked us to stop using the trademark, so we had no choice but to change the trademark.

>>>Trademark rights must be renewed every 10 years. When determining whether an update is necessary, you need to check not only your company's usage status, but also the licensing status of other companies.

〇I created a large number of catalogs that displayed logos that were significantly different from registered trademarks. In order to reduce the risk, it became necessary to apply and register the logo again.

>>>Use of a logo mark that is significantly different from a registered trademark is likely not to fall within the scope of the rights of the registered trademark, and there is a great risk of infringing on the rights of other companies. When using a trademark, check the registered trademark for which you have obtained rights, and refrain from using it in a manner that is significantly different from the registered trademark.

Introduction of failure cases (2) Troubles overseas

〇 When we looked into the trademark rights that we had internally maintained as being owned in our company's name overseas, we discovered that they were actually owned by a local subsidiary or agency. If the trademark rights were not in the company's name, there was a possibility that companies would not be able to take flexible measures when exercising their rights. This appears to be due to insufficient confirmation of the trademark rights by the person in charge in the past.

〇An overseas subsidiary or agency was using a registered trademark in a modified form without our consent.

>>> Regarding the acquisition of trademark rights overseas and the manner in which trademarks are used, it is necessary to communicate thoroughly with local subsidiaries and agents and to control them.

〇When I exported a product overseas, its popularity skyrocketed, and I hurriedly applied for a trademark in that country, but the application had been filed by someone else six months earlier, and as a result, I had a very difficult time registering the trademark.

>>>Overseas, there are many cases where someone else files a trademark application for the name of the product first. File an application early if possible, monitor other people's applications, take measures to prevent registration if you find another person's application, and if it has already been registered, consider filing a request for invalidation of the registration. Such measures are required.

[reference]

https://www.jpo.go.jp/support/example/trademark_guide2024.html

Newsletter translated into English

Revised Unfair Competition Prevention Law to be Enforced in April 2024

During the 211th ordinary session of the National Diet in 2023, the “Law for Partial Amendment of the Unfair Competition Prevention Law, etc.” (Law No. 51) was passed and enacted, which included amendments to the Unfair Competition Prevention Law and partially amended the Trademark Law, Design Law, Patent Law, and Utility Model Law, with respect to the following three main points and with the focus on the Unfair Competition Prevention Law.

(1) Strengthening protection of brands, designs, etc., in light of the diversification of business activities associated with digitalization

(2) Improvement of intellectual property procedures, etc. in response to the coronavirus pandemic and digitalization

(3) Institutional development for international business development

Major revisions and effective date

The main revisions to the Unfair Competition Prevention Law are as follows. These revisions came into effect on April 1, 2024.

▪ Prevention of counterfeiting in the digital space

→With respect to acts of imitation of product forms, the act of providing products in the digital space that imitate the product forms of others shall also be subject to acts of unfair competition, and the right to demand an injunction, etc. may be exercised .

▪ Strengthening of protection of trade secrets and shared data with limited access

→Regarding the Unfair Competition Prevention Law, in the case of services that share big data with others, data should be protected as shared data with limited access, including in cases where the data is managed confidentially, and it should be possible to demand an injunction against infringement, etc. In addition, the protection of trade secrets, etc. will be strengthened by making it possible to claim an increase in the amount equivalent to the license fee for damages that exceed the infringed party's production capacity, etc. in litigations filing damages.

▪ Strengthening and expansion of penalties for bribery of foreign public officials

→In order to accurately implement the OECD Convention against Bribery of Foreign Public Officials at a higher level, the statutory penalties for natural and legal persons should be increased, and the act of sole overseas bribery by a foreign employee of a Japanese company should be made punishable.

▪ Clarification of procedures in international trade secret infringement cases

→ Regarding the Unfair Competition Prevention Law, if infringement of a Japanese company's trade secret occurs outside of Japan, a Japanese court can be used to file a lawsuit, and the Japanese Unfair Competition Prevention Law shall apply.

In this newsletter, we will focus in particular on the prevention of counterfeit acts in the digital space, which is also closely related to IP practice.

Prevention of counterfeiting in the digital space

[Article 2(1)(iii) of the Unfair Competition Prevention Law (as amended)]

(iii) the act of transferring, leasing, displaying for the purpose of transfer or lease, exporting or importing, or providing through a telecommunication line goods that imitate the form of another person's goods (excluding that which is indispensable to its functioning);

The Unfair Competition Prevention Law protects product design by regulating the act of transferring goods that imitate the form of another's goods as unfair competition (Article 2(1)(iii) of the Unfair Competition Prevention Law). However, with the increasing digitalization of tradition businesses, such as transactions in digital spaces such as the metaverse, it has been pointed out that Article 2(1)(iii) of the Unfair Competition Prevention Law may not be able to respond to cases of imitation where physical/digital aspects intersect.

Article 2(1)(iii) of the Unfair Competition Prevention Law before the amendment stipulated that only acts that presuppose a tangible object, such as “assignment” or “leasing,” were considered as unfair competition. The amendment was made so that acts of providing counterfeit goods over a network can also be regarded as unfair competition by regulating “the act of providing through a telecommunication line” as unfair competition.

In order to consider the act of imitating the form of a good in the digital space as unfair competition, it is considered a prerequisite that the “good” (Article 2(1)(iii) of the Unfair Competition Prevention Law) includes intangible objects (eg, data). The Commentary to the Law (version effective April 1, 2024) clarified that “goods” includes intangible objects.

In addition, the commentary clarifies what acts in the digital space can be considered “imitation” in light of the need to take into consideration the foreseeability of business operators, etc., in connection with treating imitation in the digital space as unfair competition, which had not been clearly defined as unfair competition in the past.

Reference URL:

https://www.meti.go.jp/policy/economy/chizai/chiteki/kaisei_recent.html

https://www.jpo.go.jp/system/laws/rule/hokaisei/sangyozaisan/fuseikyousou_2306.html

https://www.meti.go.jp/policy/economy/chizai/chiteki/pdf/Chikujo.pdf

Trends in Design Registration Applications for Objects Newly Subject to Protection

The JPO website has published a report on application trends for objects newly subject to protection under the revised Design Law (enforced on April 1, 2020). According to this report, the number of design applications for “graphic images,” “buildings” and “interiors”, which are newly protected, and the number of applications for related designs after the publication of the design gazette of a design (before the expiration of 10 years from the filing of the basic design) due to the expansion of the related design system are as follows (excluding Hague designs).

According to the JPO website, many companies and others have shown a high level of interest in the status of these design applications, and we will continue to publish this information in our newsletters.

Number of applications for design registration for objects newly subject to protection

( ) Figures in parentheses indicate the increase in the number of cases since the last report (approx. 3 months prior).

(Only those available as of May 9, 2024) (Source: JPO website)

Number of registrations for objects newly subject to protection

( ) Figures in parentheses indicate the increase in the number of cases since the last report (approx. 3 months prior).

(Only those available as of May 9, 2024) (Source: JPO website)

The number of design registration applications in 1. above also includes those currently under examination, so the above number of registrations divided by the above number of design registration applications does not necessarily represent the registration rate.

Number of design registration applications for related designs

( ) Figures in parentheses indicate the increase in the number of cases since the last report (approx. 3 months prior).

(Only those available as of May 9, 2024. For applications filed prior to the publication of the Design Gazette, applications filed in April 2020 or later are counted.) (Source: JPO website)

JPO Publishers “Learning from Case Studies: A Guide to Trademark Use”, a Collection of Examples of Trademark Use

On April 3, 2024, the JPO renewed the guide “Learning from Case Studies: A Guide to Trademark Use” five years after its publication in 2019, and newly published the guide “Learning from Case Studies: A Guide to Trademark Use 2024”. This guide introduces methods of trademarks use in business and the advantages of obtaining rights through examples of actual cases, and also introduces “things that happened because we did note obtain a trademark” as examples of failures. This article introduces only a part of the guide , and details can be found at the URL indicated at the end of the article.

Introduction of Failure Examples (1) Trouble in Japan

▪ After many years of using the name of our store without registering it as a trademark, we suddenly received a warning letter. Even though the other party registered their trademark long after we our opened restaurant, we were forced to change the name of our restaurant and had to change the pamphlets and signs we were using.

▪ We sold a product without registering its name as a trademark and the product gained a reputation and become known to consumers. Maybe for that reason, the name was registered as a trademark by another company, and the company charged an exorbitant royalty fee based on the trademark right.

▪ When we sent out a press release without filing a trademark application for a new service we were planning to offer, another company applied for and registered the name of that service before we filed our trademark application.

It is advisable to apply for and register important trademarks promptly (before announcement, if possible) to avoid preemption by other companies.

▪ We allowed the trademark rights that we had licensed to another company to become abandoned. After discovering this, we hurriedly filed another application. Fortunately, we were able to register it, but it was a close call.

▪ We forgot to renew our trademark right and let the right lapse. After the expiration of the right, someone else registered a trademark consisting of the same name and later asked us to stop using the trademark, so we had no choice but to change our trademark.

Trademark rights must be renewed every 10 years. When deciding whether or not to renew, it is necessary to check not only the status of your own use of the trademark, but also the status of licensing to other companies, etc.

▪ We produced a large number of catalogs displaying a logo that differed significantly from the registered trademark. In order to mitigate the risk, we had to take action to file and register again under that logo.

Use of a logo mark that differs significantly from the registered trademark is likely to fall outside the scope of the registered trademark rights and has a great risk of infringing on the rights of other companies. When using a trademark, check the registration for which rights have has been acquired, and refrain from using the trademark in a manner that is significantly different.

Introduction of Failure Examples (2) Trouble overseas

▪ An investigation into overseas trademark rights that were treated internally as being registered in the company's name revealed that they were in fact owned by a local subsidiary or distributor. As the trademark rights were not in our company's name, there was a possibility that we would not be able to take flexible measures when exercising rights. This may have been due to inadequate confirmation of the contents of the trademark rights by the person in charge in the past.

▪ Overseas subsidiaries and distributors were using the registered trademark in a modified form without informing us.

The acquisition of trademark rights overseas and the manner in which the trademark is used must be thoroughly communicated with the local subsidiary or distributor and controlled.

▪ When we exported a product to another country and it rapidly rose in popularity, we rushed to file a trademark application in that country. However, an application had been filed by someone else six months earlier, and as a result, we had great difficulty in registering the trademark.

Overseas, it is often the case that someone else files a trademark application for the name of the product before you do. It is necessary to take measures such as filing an early application if possible, monitoring applications of others, taking measures to prevent registration if an application of another party is found, and if the application has already been registered, considering requesting a trial for invalidation of the registration.

[See also]

https://www.jpo.go.jp/support/example/trademark_guide2024.html