Foreign companies may rely on unfair competition law to recover marks registered by third parties

A recent landmark IP case may be of interest to overseas companies seeking to enter the Japanese market, particularly if they are aware of third parties having registered their trademarks in Japan.

The plaintiff was a major foreign carrier. The defendant had registered the plaintiff's marks in Japan before the plaintiff entered the Japanese market, and used the marks to sell products to the Japanese public. Japan is a 'first to file' country and, therefore, this act did not constitute trademark infringement. The plaintiff nevertheless argued that unfair competition law precluded the defendant from registering and using the plaintiff's marks in Japan.

There was no precedent on point in this case. There was only one similar precedent in the Tokyo High Court with regard to an administrative suit for cancellation involving the trademark COMPUTER WORLD. An American publisher owned the mark in the United States, but a Japanese newspaper company had registered the mark in Japan without the American owner's permission. The American publisher sought and obtained the cancellation of the mark on the basis that it was well known in the United States through publications and the news media.

Based on this precedent, the plaintiff argued before the Tokyo District Court that it should apply a similar logic in the context of trademark infringement (as opposed to cancellation proceedings). It argued that, even if an overseas company has not yet entered the Japanese market, the fact that its mark is well known should give rise to a remedy under unfair competition law.

The Tokyo District Court accepted the plaintiff's arguments and pushed the defendant to settle. The defendant agreed to assign the trademarks in question to the plaintiff, and the marks are now registered in the plaintiff's name.

Shigeru Miki, Squire Gaikokuho Kyodo Jigyo Horitsu Jimusho, Tokyo

The author's firm acted for the plaintiff in this case