E-News No.47

E-News No.47

Bad Faith Trademark Filing in Japan

by Mizue Kakiuchi (KUBOTA – Japan)

On 17 May, 2016, the Japan Patent Office (“JPO”) issued a notice on bad faith trademark filings to encourage prospective applicants whose mark has been already filed by a third party. The JPO’s key message is “Don’t give up filing new applications due to prior similar trademarks filed by others in bad faith!”.

The background is that a certain applicant (“BF Applicant”) recently filed thousands of trademark applications (“BF Applications”) for marks used by others (“BF Marks”), often without payment to the JPO for the BF Applications. The BF Applicant misused JPO practices of (i) suspending applications for several months if some formalities are not satisfied including payment of fees, (ii) disclosing such filing information on “J-Plat Pat” of the JPO database server, and (iii) issuing an office action of a preliminary rejection to later applications due to such prior identical or similar BF Marks.

We have some measures against such BF Applications as shown in the last TM5 Seminar presented by the JPO on Japanese Law. If the target mark is a well-known trademark somewhere in the world at filing of the BF Mark, we might take typical and traditional measures to protect by objections or invalidations against the BF mark filed with unfair purpose. Even if the target mark is not well-known at filing of the BF Mark, we have a case of the IP high court decided on May 31, 2012 where a BF Mark was invalidated under the Principal Paragraph of Article 3(1) of the Trademark Act due to a lack of intention to use. The decision also suggested that if an application was filed fraudulently, the trademark can also be invalidated due to being against public interest, public morality or international fidelity based on Article 4(1)(vii). (Please see JPO’s resume at http://tmfive.org/files/App-7_JPO-Bad-faith-seminar.pdf.) After this case, the JPO is now able to dismiss BF Applications with certainty. Once the JPO dismisses such an Application, it is deemed not to have been filed at all.

However, one problem is that objections and other procedures take time, and thus the application of the true owner of the mark can be delayed. Though we can file an objection, a cancellation or an invalidation action after registration, we have no measure to take any action against such BF Applications before registration. Meanwhile, the JPO cannot dismiss nor reject applications filed by the BF Applicant and have to register, if the applications meet all requirements to register. Moreover, once an action is filed against the BF Application, the BF Applicant may be willing to fight for the BF Application. This means that it could take more than a year or two years to have the issue solved.

The notice above suggests that the JPO would actively support you in cases like this bad faith case within its discretions. The BF Applicant’s targets are unfiled trademarks of a famous or capable person/entity who has already succeeded in a certain business area, in particular, who has just started new business with unregistered trademarks before being well-known. The aim of the BF Applicant is to have a prior right of yet-to-be-registered famous marks with little cost, so that they earn money from the true owners of the mark.

If a general applicant finds that a prior mark is a BF Mark, the general applicant should file an application for a mark anyway to acquire a prior right following a BF Application. After receipt of a preliminary rejection by the JPO due to a prior BF Mark, the general applicant should respond to the office action with explanations regarding the prior BF Mark and request to retain the application for its own mark until the BF Mark is dismissed. As the JPO is aware of the BF Applicant, you can easily argue that the owner of the prior mark application is in bad faith. Additionally, direct dialogue with a JPO examiner will help to check the status of the BF Application, since the BF Applicant sometimes moves to pay for a BF Application if the BF Applicant realizes its value, and because the J-Plat Pat will not be updated for a few months. Though it takes more time to register these marks than general applications, you will eventually be able to acquire your trademark in Japan in most cases.

Most importantly to avoid this kind of trouble, however, since Japan has no requirement to use a trademark before registration, it will be highly advisable to file the trademark before use.