What is Trademark Infringement? Explaining the Framework for Determining Illegality

By obtaining trademark rights for your company’s products and materials, you can prevent so-called “Ripoffs”.

However, a trademark right is not, for example, the right to say “Don’t use ‘Disney'”. What is prohibited by trademark rights is strictly limited to ‘trademark use’. In the case of Disney, if a third party creates a facility called ‘Disney Island’, even if it has no actual connection with Disney, it may appear to be an official Disney facility. Trademark rights are the rights to prohibit such use (referred to as ‘trademark use’ as described later).

How far can the trademark owner prohibit the use of ‘trademarks’ on the Internet, for example on EC sites or corporate sites? We will explain this by referring to precedents.

What is the Trademark Use Prohibited by Trademark Rights?

Although there are limitations on designated goods and services, trademark owners are granted with the exclusive use of their registered trademarks. Therefore, if a third party uses the same or similar trademark on designated goods or services without permission, it is generally considered as a trademark infringement.

However, in the amendment to the Japanese Trademark Law (商標法) in 2014 (Heisei 26), Article 26, Paragraph 1, Item 6 was established, clarifying that if it does not fall under “trademark use”, it will not be considered a trademark infringement.

Article 26 The effect of a trademark right does not extend to the following trademarks (including those that are part of other trademarks):
⑥ In addition to those listed in the preceding items, trademarks that are not used in a manner that allows consumers to recognize that they are goods or services related to the business of several people.

(Japanese Trademark Law Article 26, Paragraph 1, Item 6)

So, what exactly does this “trademark use” refer to?

As mentioned earlier, a trademark is used to distinguish one’s own goods or services from others (function of distinguishing goods/services), and to indicate the origin of the goods or services (function of indicating origin).

And the use of this function of distinguishing goods/services and indicating origin is considered as “trademark use”.

For example, when a general consumer sees the string “ABC” attached to a product and can recall which company’s product it is, it is said to have the function of distinguishing goods/services and indicating origin, and the act of attaching the string “ABC” to the product is considered “trademark use”.

Conversely, in cases where the use does not fulfill the function of distinguishing goods/services and indicating origin, it is not considered “trademark use”, and there may be cases where the effect of the registered trademark does not apply.

Examples of Trademark Infringement Cases

Can the Title of a Book or Article Constitute Trademark Infringement? (The Morning Banana Case)

This is a case where the plaintiff, who owns the trademark rights for the standard characters “Morning Banana” for “magazines, books, mooks” and other designated goods, filed a trademark infringement lawsuit against the defendant who sold a book titled “40 Tips for Successful Morning Banana Diet”. The court ruled that the string of characters “Morning Banana” displayed by the defendant is merely shown as a title, not as an identification or origin of the product, and therefore denied the trademark infringement.

The display of the defendant’s mark on the cover and other parts of the defendant’s book is merely a part of the title indicating the content of the book, and it cannot be recognized as being used in a manner that has the function of identifying the product or indicating its origin. Therefore, it cannot be said that it infringes the trademark right.

(Tokyo District Court, November 12, 2009 (Heisei 21))

In the case of book titles, even if they contain the same string of characters as your registered trademark, if they represent the content of the book and not the origin of the book as a product, it may be judged that “its use is not as a trademark”.

However, in cases where there are circumstances such as the title of a periodical such as a magazine or newspaper, or the title of a series that is produced and sold repeatedly under the same title, it is considered that there may be an infringement of trademark rights.

Does a Product that Free-Rides on a Famous Product Constitute Trademark Infringement? (The Beretta Case)

The famous Italian firearms manufacturer “Beretta” had a license agreement with the model gun manufacturer “Western Arms”. Beretta claimed that another model gun manufacturer, the defendant, who manufactures and sells models of “Beretta”, violated Article 2, Paragraph 1, Item 1 of the Unfair Competition Prevention Act (well-known indication confusion act), and demanded an injunction and claimed for damages.

In this case, according to the recognized facts, the defendant’s products are model guns that faithfully reproduce the appearance of the M92F, a real gun that is not generally allowed to be possessed and is not circulated in the market in our country. They are not lethal, and they are traded as imitation goods distinguished from real guns in a separate market. The traders and demanders of these products are recognized as identifying each product by the display indicating the manufacturer of the model gun attached to its body or package, etc., evaluating its performance and quality as a model gun, and then selecting and purchasing it. Therefore, even if the defendant’s product form has the same product form as the plaintiff’s product form, which is used as a display indicating that the plaintiff’s real gun is a product of the plaintiff Beretta, the defendant’s product form is not used in a manner that has the function of indicating the origin or distinguishing the product from others.

(Tokyo District Court, June 29, 2000 (Heisei 12))

The court ruled that even if the model guns being manufactured and sold faithfully reproduce the actual product form, the product form of the model as a product cannot be said to be used in a manner that has the function of indicating the origin or distinguishing the product from others.

In this case, Beretta did not manufacture and sell model guns, and there was a clear difference in the essential function of lethality between Beretta’s real guns and other companies’ model guns, and it was ruled that there was no room for general demanders to be confused about the identity of the products. Therefore, if, for example, Beretta itself was manufacturing and selling model guns, and had licensed the use of its design and trademark to Western Arms, it is possible that the product identification function could have been recognized in Western Arms’ products, and that imitation products by others could have been judged to infringe trademark rights.

Can a Catchphrase Constitute Trademark Infringement? (The Always Coca-Cola Case)

This is a case where the plaintiff, who had registered the trademark “Always” for goods including soft drinks such as cola in the old Class 29, demanded a prohibition of the use of “Always” and claimed for damages for trademark infringement, claiming that the act of Coca-Cola selling cola drinks with the catchphrase “Always Coca-Cola” displayed on the can for sales promotion constituted trademark infringement.

The word “Always”, which means “always, anytime”, can be understood as an expression that has the effect of enhancing the purchasing power of the product by making the demander want to drink Coca-Cola all the time, and is recognized as part of a catchphrase in a campaign for sales promotion, so it cannot be said to be used in a manner that performs the function of specifying the product or indicating the origin. Therefore, it cannot be said to have been used as a trademark. Therefore, it does not constitute trademark infringement.

(Tokyo District Court, July 22, 1998 (Heisei 10))

The court ruled that the string of characters “Always” displayed in small print in the upper left corner of the “Coca-Cola” logo on the can is recognized as part of a campaign catchphrase for sales promotion, and cannot be said to have been used in a manner that performs the function of indicating the source of the product, and therefore does not constitute a trademark use.

It should be noted that catchphrases themselves can also be registered as trademarks.

Traditionally, advertising slogans and other phrases used in advertisements and promotions are often used generically for general products and services, and it was difficult for consumers to distinguish whose products or services they were by these slogans, so the trademark registration was commonly rejected.

However, with the revision of the examination standards in 2016 (Heisei 28), the trademark examination standards are now clearly stated that “if the applied-for trademark can be recognized not only as an advertisement or corporate philosophy or management policy for the product or service, but also as a coined word, it is not considered to fall under this item”.

Therefore, if there are elements that can serve as a sign to identify the product or service, such as using a coined word or incorporating your own brand name, even if it is a catchphrase, you can have it registered as a trademark.

Given this, it cannot be categorically stated that the identification power is denied and there is no trademark infringement simply because the use of the registered trademark is in a catchphrase. If the use of the registered trademark can be said to perform the function of distinguishing between one’s own and other’s products and indicating the source, even if it is used in a catchphrase, there may be cases where it constitutes a trademark use.

This legal principle applies equally to the use of trademarks on the Internet, such as the use of trademarks in listing advertisements.

Summary

Especially in the online marketplace, where a plethora of product and service information is available, it is not uncommon to find products being sold that use trademarks similar to your own registered trademark, or to receive a notice of trademark infringement from another company regarding the products you are selling. In such cases, there is often a rush to take immediate measures such as deletion.

However, as we have discussed so far, just because a registered trademark is being used, it does not necessarily mean that all uses constitute trademark infringement. Whether the use falls under trademark use or not, and whether it constitutes trademark infringement or not, requires a judgment from multiple perspectives based on individual circumstances. Therefore, we recommend consulting with an expert in intellectual property rights.