Bills will strengthen the protection of trademark rights in Japan

The Japanese government has submitted to the National Diet (the Japanese legislature) bills modifying the Unfair Competition Prevention Law and the Tariff Law in order to strengthen protection of well-known and famous indications and designs. The bills provide criminal penalties for the use of a famous indication of another person, and empower customs to prohibit the import of (i) goods unfairly using a famous indication or design, and (ii) any goods using a famous indication of another person and causing confusion to consumers.

The Unfair Competition Prevention Law prohibits unfair trade practices. The current law indicates that the use of a well-known or famous indication of another person is an act of unfair trade practice, and the owners of such indications may have recourse to civil proceedings to seek an injunction and damages. However, it does not impose criminal punishment for such an act. This will change if the proposed amendment comes into effect. The bill provides for imprisonment for less than five years or a penalty of less than Y5 million for the unauthorized use of a famous indication for an unfair purpose or for the purpose of injuring the reputation of the person who owns the famous indication.

The other bill under consideration by the National Diet is the Tariff Law. Article 21 of the law lists goods, including narcotics, prohibited from being imported (prohibited goods). The current law defines goods infringing a Japanese patent, trademark or copyright as prohibited goods, but not goods that cause unfair competition and are prohibited from import or sale under the Unfair Competition Prevention Law. At present, such goods cannot be prohibited from being imported without a court order. The amendment removes this obstacle and allows customs to prevent the importation of goods using a well-known or famous indication of another person or imitating the design of another party's goods.

Prohibition of importation by customs is a very effective means, in terms of time and cost, for stopping the import of infringing goods, and many famous brand owners use this procedure. The current Tariff Law only allows holders of registered trademarks in Japan to prohibit import of infringing goods, based on their trademark rights. The amendment allows the prohibition of import of goods using a well-known or famous indication or copying a design of goods not registered in Japan. This is good news for famous brand owners.

If the Diet approves the bills, the amended Unfair Competition Prevention Law will become effective within a year, and the revised Tariff Law will come into force from March 1 2006.

Yukukazu Hanamizu, Yuasa and Hara, Tokyo