Marks consisting of Ethiopian geographical names held to be distinctive

Japan
The IP High Court has reversed a decision of the Patent Office in which the latter had invalidated trademark registrations owned by the Ethiopian government for the marks SIDAMO and YIRGACHEFFE for coffee and coffee beans in Class 30 of the Nice Classification (March 29 2010).

Article 3(1)(3) of the Trademark Law (127/1959) provides that registration cannot be granted:

"in the case of a trademark which consists solely of a mark indicating in a common way the place of origin or sale, quality, raw material, efficacy, use, quantity, shape (including packaging) or price of the goods, or the method, time of manufacture or use, or the location of the provision of services, or the quality, articles used, efficacy, use, quantity, modes or price, or the method or time of provision of services."

Article 3(2) provides that:

"in the case of a trademark falling under Items 3 to 5 of the preceding paragraph, where, as a result of the use of a trademark, consumers can recognize goods or services as being connected to a certain person's business, trademark registration may be obtained notwithstanding the provisions of the preceding paragraph."

Article 4(1)(16) provides that registration cannot be obtained "in the case of a trademark which is liable to be misleading as to the quality of the goods or services".

Article 46(1) provides that:

"where a trademark registration falls under any of the following Items, a trial for invalidation of trademark registration may be demanded for the invalidation of the trademark registration. In such a case, if two or more designated goods or designated services are covered by the trademark registration, a trial may be demanded with respect to each of such designated goods or designated services:

(1) where the registration has been effected contrary to Articles 3(4)(1)… of the law."

On September 8 2005 the Ethiopian government filed four applications with the Japanese Patent Office for the registration of the mark SIDAMO in Latin and Japanese katakana (ie, phonetic) characters, and the mark YIRGACHEFFE, also in Latin and katakana characters, for coffee and coffee beans in Class 30. The applications matured on May 26 2006 as Registrations 4955560 to 4955563. On January 29 2007 the All Japan Coffee Association, a public corporation, sought the invalidation of the marks under Articles 3(1)(3) and 4(1)(16). 

On March 30 2009 the Patent Office invalidated the four trademarks, reasoning as follows:
  • The rationale for the provisions of Article 3(1)(3) - and for finding that the marks lacked the requirements for registration - is that any party may wish to use such marks as the necessary and proper indication for their products in trade. Thus, it would be contrary to the public interest for the use of such marks to be monopolized by a single party. Such marks, if used generally, should be held to lack the distinctiveness necessary to distinguish them from other products (see the April 10 1979 Supreme Court decision in Waikiki).
  • The trademarks in question were well known not only among dealers, but also more widely among general consumers and coffee lovers - either as places of coffee bean production in Ethiopia or as the names of coffee beans produced in the Sidamo or Yirgacheffe regions - at the time of the examination of the applications. Therefore, if the marks were used for "coffee beans produced in the Sidamo or Yirgacheffe areas in Ethiopia or coffee made from coffee beans produced [there]", the marks would be recognized as indicating the place of production or the quality of the product.
  • Even if it might be premature to find the marks to be indicative of the place of production or the quality of the products, it was likely that the marks would become thus recognized among dealers or general consumers in future. Therefore, it would not be in the public interest for use of the marks to be monopolized by a specific party, such marks being necessary to indicate an element of quality or place of production. Therefore, the marks fell under Article 3(1)(3).
  • The Patent Office did not accept the Ethiopian government's assertion that the trademarks distinguished the designated goods because they were not known to general consumers as the names of places of production of coffee beans, and thus general consumers would not have recognized the marks as such at the time of examination.
  • In connection with Article 3(2), the Patent Office found it difficult to accept, on the evidence, that the words 'Sidamo' and 'Yirgacheffe' had come to be recognized by consumers as indicating a brand of coffee bean produced in Ethiopia as a result of use at the time of examination. Although coffee beans produced in Sidamo or Yirgacheffe may have retained particular qualities and features due to the Ethiopian government's longstanding controls on the quality of coffee beans, many dealers and general consumers in Japan understand the words 'Sidamo' and 'Yirgacheffe' to indicate places of production or names of high-quality coffee beans, rather than as brands of coffee bean with special qualities or features.
  • There was no other evidence to substantiate the claim that consumers would recognize the words 'Sidamo' and 'Yirgacheffe' as indicating a brand of coffee bean produced in Ethiopia or a brand of coffee from Ethiopia.
  • In connection with Article 4(1)(16), the marks were considered to indicate the place of production or the quality of product, even if used for "coffee beans produced in the Sidamo or Yirgacheffe areas of Ethiopia and coffee made from coffee beans produced [there]". Furthermore, if used for coffee beans and coffee other than the above goods, they would be liable to be misleading as to the quality of the goods. The marks thus fell under Article 4(1)(16).
Therefore, the marks had been registered in violation of Articles 3(1)(3) and 4(1)(16), and should be invalidated under Article 46(1).

The Ethiopian government appealed to the IP High Court, which reversed the Patent Office decision. On the question of whether the All Japan Coffee Association had standing to seek invalidation, the court held that:
  • the parties with a right to demand a trial for the invalidation of a trademark under Article 46 should be limited to those with a legal interest in the outcome of the trial according to the interpretation of such provision;
  • as the association can conduct "any other necessary business to perform the purpose of this association" under its articles of incorporation, and thus could demand a trial for invalidation of registration, it had the necessary interest and thus had standing; and
  • the trademark owner's assertion that the association was an alter ego of UCC Ueshima Coffee Co was not supported by evidence.
On the question of the applicability of Article 3(1)(3), the court concurred with the Patent Office in respect of its interpretation of the Supreme Court judgment of April 10 1979. The court found that:
  • the words 'Sidamo' and 'Yirgacheffe', when used in connection with coffee or coffee beans in Japan, are used to indicate a brand or type of coffee or coffee bean in many cases;
  • even where the words are used to indicate the place of production, such cases arise where the place of production is stated simply as 'Sidamo' or Yirgacheffe', which denotes the brand or type in many cases; and
  • the words denoting the brand or type are used in connection with high-quality coffee beans produced in Ethiopia or coffee made from such beans.
The court went on to find as follows:
  • In Japan, the degree of recognition of the geographical names 'Sidamo' and 'Yirgacheffe' is generally poor. In light of this and the findings above, the marks (if used for their designated goods) are recognized among dealers and consumers as indicating the brand or type of coffee or coffee bean (ie, the high-quality coffee beans produced in Ethiopia generally or in the Sidamo or Yirgacheffe regions, or coffee made from such beans), rather than the place of production of the beans. Therefore, the marks are distinctive.
  • Insofar as SIDAMO or YIRGACHEFFE is used as the above brand or type to indicate high-quality coffee beans produced in Ethiopia (or in the two regions), or coffee made from such beans, even though the words are used by various dealers, they should be deemed to be used for coffee beans exported from Ethiopia under the quality control of the trademark owner or for the coffee made from such beans. Therefore, the monopolized use by the trademark owner is not contrary the public interest.
  • The marks do not "[consist] solely of a mark indicating in a common way the place of production or the quality of the products" under Article 3(1)(3).
  • The Patent Office's trademark examination standard does not bind the court's judgment by its nature and does not stipulate that any other geographical name falls under Article 3(1)(3). Therefore, allowing the registration of SIDAMO or YIRGACHEFFE would not contradict the standard, even if either was a geographical name.
  • The decision that the marks are distinctive and that Article 3(1)(3) does not apply to the trademarks if used for "coffee beans produced in the Sidamo or Yirgacheffe areas in Ethiopia or coffee made from coffee beans produced in [those areas]" is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights.
On the question of the applicability of Article 4(1)(16), the court held as follows:
  • As coffee flavours differ depending on the place of production in Ethiopia, there would be a likelihood of confusion if the trademarks in question, originating from the place of production, were used for coffee or coffee beans other than those produced in the Sidamo or Yirgacheffe regions.
  • Thus, the trademarks would be likely to cause confusion as to the quality of the products if used in connection with coffee beans or coffee other than that originating from the regions in question.
  • The Patent Office had not erred in its trial decision that the marks fell into the category of "trademarks likely to cause confusion as to the quality of the products" under Article 3(1)(16).
  • Consequently, there was no reason to invalidate the part of the judgment referring to "coffee beans produced in the Sidamo or Yirgacheffe area in Ethiopia or coffee made from coffee beans produced [there]", but the remaining parts of the judgment should be reversed.
In summary, the court held that the part of the trial decision referring to the designated goods should be cancelled as incorrect, and the remaining parts of the claim by the trademark owner should be dismissed as groundless.

Both the Patent Office trial decision and the IP High Court decision cited the same Supreme Court judgment, although they reached different conclusions. In Waikiki, the Supreme Court decided that WAIKIKI was not registrable under Article 3(1)(3) as it indicated the place of sale of the products. One of the reasons for the different conclusions seems to be a different approach to whether it is against the public interest for a trademark's use to be monopolized by a specific party under Article 3(1)(3). The High Court noted the Ethiopian government's quality controls for coffee beans produced in Sidamo and Yirgacheffe, and concluded that the government's monopolistic use of the marks was not contrary to the public interest.

This case is unique in that it involved a foreign government as trademark applicant and owner, requesting registration of marks relating to the name of the place of production of the goods. It is assumed that the Patent Office's application of Article 3(1)(3), using the trademark examination standard, will have to become more precise, which will require an examination of the market and greater recognition of dealers and consumers.

The decisions on all four marks have been appealed to the Supreme Court.

Eiichi Fukushima, Nishimura & Asahi, Tokyo

Unlock unlimited access to all WTR content