CHAPTER 4. SYSTEMATIC POSITION OF THE TRADEMARK LAW
I. The Trademark Law and other intangible property right laws
1. Law on Original Works and Law on Marks
The Trademark Law is a subset of industrial property right law, and of the broader
category intellectual property law (or intangible property law). Intellectual property law
is defined as "the right or benefit of exclusive control over intangible things that are
products of a person's mental activity."Intellectual property can be roughly divided into two kinds. The first kind is the
product of a creative activity. The second kind differs from the first because, although
it is still a product of a person's creativity, it is a distinctive mark for industrial activity.
Some examples of a "product of a creative activity" may include the following: ①
inventions; ② ideas; ③ designs; and ④ literature, science, art, and music, among others.
The laws that regulate these items, respectively, include: ⑤ the patent law; ⑥ theUtility Model Law; ⑦ the Design Law; and ⑧ the Copyright Law, among others.
These “products of creative activity” already have value during the time they are being
produced under the each applicable law. Distinctive marks for industrial activity
include: ⑨ trademarks for goods; ⑩ service marks; ⑪ trade names; and ⑫ marks orother indications the country of origin. Trademark Law regulates trademarks for goods
and marks indicating country of origin. The Unfair Competition Prevention Law deals
directly with service marks and also is used to protect marks indicating country oforigin. The Commercial Law regulates and protects trade names. The value of theseproducts of creative activity increases as consumer trust in the products associated withthese marks grows. This trust is gained through use and advertisements that increase
the customer base.
2. The Industrial Law and Cultural Law
Another perspective divides intangible property rights law into two categories: (1) laws
purposely designed to contribute to the development of industry and (2) laws purposely
designed to contribute to the development of culture.
The Industrial Property Rights Law is a law of the first type, with a goal of directly
contributing to the development of industry. Copyright Law, is a law of the second type,with a goal of directly contributing to the development of intellectual culture. The
subject matter of the Copyright Law has come to have a purpose of contributing tocultural industries in recent years; additionally, its relationship to the protection ofcomputer software is strengthening. Fundamentally, however, Industrial Property Right
Law has a purpose of advancing industries and the Copyright Law has a purpose ofserving the intellectual and cultural development. Moreover, the Copyright Law has agreater weight on personal rights. The Trademark Law, as one type of industrial
property law, belongs to the first category.
3. The Statute of Monopolies and the Profit Sanctuary Law

1

Another way to view industrial property rights law is to consider the level of protection
granted by the various laws. There are two categories: 1) laws that establish amonopoly right, and 2) laws that merely grant an exclusive right or protect profit.
Industrial property laws that set out monopoly rights are: the Patent Law, the Utility
Model Law, the Design Law, and the Trademark Law. The second category consists oflaws that only grant exclusive rights, such as the Copyright Law. The Unfair
Competition Prevention Law is a law that protects profit. With regard to the trademark
right, when a person uses a trademark that is the same as or similar to a registeredtrademark without permission of the trademark right owner (or the holder of the
exclusive right toward that trademark), that person will be unable to continue using thetrademark due to the trademark holder's exclusive right. In comparison, when a person
obtains a copyright for his artwork, he has no right to exclude another who happened to
produce the same work of art by coincidence. In that case, both artists are granted
copyrights independently, and two copyrights would attach to the same work of art.
This is what is known as a "copyright approach."
Well-known unregistered trademarks are protected under the Unfair Competition
Prevention Law as discussed earlier. However, just as with the above example of thetwo copyrights that attach simultaneously to the same work of art, there could be morethan one well-known trademark existing at the same time, each as an independent wellknown trademark, as long as they are in different and geographically distinct
commercial markets.
The grant of a monopoly right means that even if a person, who has no knowledge ofthe patent right owner's patented invention or the trademark owner's registeredtrademark, creates something similar in good faith and uses it, he will still be prevented
from using the patented invention or registering trademark without authorization. Thisis called the "patent approach." Trademarks are also approached this way. In contrast,
the protection provided by the Profit Sanctuary Law is not the same as having amonopoly right. The Law merely grants the ability to stop a third party from using what
is already someone else's.
4. Summary
To summarize, the Trademark Law belongs to "intellectual property law" (or Intangible
Property Right Law). The Intangible Property Right Law can be roughly divided intothe "Industrial Property Law" (in a broad sense)" and the "Copyright Law." "Industrial
Property Law" was explained by the Paris Convention. The "protection of industrial
property rights concerned protection of patents, utility models, designs, trademarks,
service marks, trade names, indications depicting a country of origin or a name of acountry of origin, and prevention of unfair competition (art. 1-2)." The Convention also
provided that "the term industrial property right is to be interpreted as broadly as
possible, and used in connection with products not only of industry and commerce, butalso of agriculture, the extractive industry, and manufactured or natural products (art. 13)." The term "Industrial Property Right," as used in the Customs Tariff Law, the Law
on Export/Import Transactions and other laws on trade and treaties, is used broadly,2

including know-how, trade names, marks depicting country of origin and origin namesthat are subject to the Unfair Competition Prevention Law.1 The Trademark Law is not
only a broadly construed industrial property right, but also considered a narrowly
construed industrial property right. Generally, however, "industrial property right law"refers to the Patent Law, Utility Model Law, the Design Law, and the Trademark Law.
They are also known as the "four laws" and are considered to be the narrowly construed
industrial property right law. It is upon interpretation that the author will rely in thistext.
Trademark Law belongs to the above-mentioned "narrowly construed industrial
property right." However, it further reflects aspects of "Industrial Law," "Law on
Marks" and "Law on the Monopoly Right."
5. The Law on Protection of Marks That Are Like Trademarks
Trademark rights are rights concerning marks used in business.
regulations protect marks (other than trademarks) used in business.

The following(1) Law on protection of marks for goods on container packaging
Some examples of marks that can indicate the source of goods are: the shape of thegood itself or the shape of the container, the packaging or color of the goods, business
related documents, advertisements, and shapes and colors of signs. These marks areexamples of indications for goods that can be protected if confusion exists under the
Unfair Competition Prevention Law (article 2, paragraph 1, item 1), if they havebecome well-known. Moreover, famous marks can be protected even if there is noconfusion.
(2) Law on protection of trade names and business marks
A trade name is a name that a merchant uses in indicating his own business. Businessnames officially indicate the business or the enterprise itself. Business marks are mere
symbols or designs (not names) that indicate a business. In Japan, trade names aremainly protected by the Commercial Law (the General Law and the Unfair Competition
Prevention Law). Well-known business names and business marks are protected under
the Unfair Competition Prevention Law.
(3) Law on protection of personal names
When a person's name indicates a business, it is protected as a trade name or as abusiness name under the Unfair Competition Prevention Law. Original personal fullnames are protected by the name righcity is starting to become recognized. In one case,for example, a problem regart under the Civil Law. In case law, the right of publiding
publicity rights occurred when an expensive balloon was photographed and used inbusiness without permission. However, the nature of such a problem is outside the1This is different from narrower interpretations, such as the Patent Law, the Utility Model Law, theDesign Law and the Trademark Law.

3scope of this book, and the author leaves the subject to the Revised Version of Outline
on the Unfair Competition Prevention Law.
(4) Law on protection of indications of geographic production or origin
The term "geographic origin" can be used to mean two different things. First, the term
can refer to the name of a place of origin that is famous and has inherent value. An
example is Champagne, an alcoholic beverage from the Champagne region of France.
Another example is Nada, known as "Nada-no-Ki Ippon," a kind of Japanese sake.
With both examples, the locations have value as names of geographic origin bythemselves. On the contrary, markings that indicate from where the clothing items
emanate, such as "Made in China," "Made in Korea," or "Made in India," are merely
indications of the source of manufacture.
A geographic name of origin may refer not only to the place of production known for
the natural condition of the land that guarantees the quality of the product. From time totime it may also refer to the place where the product was collected or the port where thegood was loaded, as seen in Nankin Rice and Port Cognac. The Unfair Competition
Prevention Law protects such marks. The problems concerning indications ofgeographic origin are questions often raised in international treaties.
II. Unfair Competition Prevention Law and the Trademark Law
1. The objectives of each system
The Unfair Competition Prevention Law and the Trademark Law are two subparts of alarger legal category that can be called "business competition law." Businesscompetition law is set in distinct contrast to anti-trust law, and these, together, form theexisting economic order.
The Trademark Law uses "registration" as a procedural means of granting the trademark
owner a fixed "monopoly right" to a trademark, and protecting his or her privateinterests.2 The Trademark Law falls within the ambit of "Industrial Property Law,"
which uses the patent law, the traditional monopoly law, as a model.
Regarding the above, the Unfair Competition Prevention Law does not protect in thesame way as does the "patent approach," but rather, by directly prohibiting acts of unfair
competition. This encompasses the protection of well known indications ("indications"
includes trademarks) and famous indications, which are typical targets of unfair
competition. The result of the Law 3 is that well-known and famous trademarks areafforded rights that are almost just like monopoly rights. The legal character of theprovision prohibiting typical unfair competition involving copying of well-known andfamous indications is rather similar to that of copyright law. Therefore, if the well2

This is the so-called "patent approach" and indicates a patent-like protection means, but does not
only refer to patent-like protection, but to the Utility Model Law, the Design Law, and theTrademark Law as well. This concept is discussed in greater detail, supra.
3
The Unfair Competition Prevention Law works to “prohibit typical unfair competition involving
copying of well known and famous indications.”4

known or famous trademark and the infringing indication are unrelated to one another,it may be possible for a number of well-known indications to co-exist4. This copyrightlike protection also encompasses a protection method that is like the Unfair Competition
Prevention Law.
The objective of a trademark "registration" is not a "means." The goal of the trademark
law is to directly protect individual trademark rights, and indirectly contributes to the
public good by protecting consumer interests. That is to say, trademark law’s express
purpose is to protect the "registered" trademark of a person who is using that mark in
the competitive business. But through this protection, competitive business protected,
benefiting society. (Article 1).
Both the Unfair Competition Law and the Trademark Law fall under the Business
Competition Law, which developed out of the broad meaning of the Illegal Acts Law
for the prevention of fraud. However, the legal effect of the Unfair Competition
Prevention Law is slightly different from that set forth above. Whereas the Trademark
Law is a monopoly law that eliminates trademark infringement by establishing"trademark rights as exclusive monopoly rights," the Unfair Competition andPrevention Law, more than the Trademark Law, intends to maintain fairness of thecompetitive business order by preventing confusion with indications such as legally
beneficial trademarks, trade names, and surnames which have become well known or
famous, or by encompassing and prohibiting "individually and fundamentally" unfair
competitors who abuse the system. As a result, a phenomenon similar to that of amonopoly right was brought about for well known and famous indications.5 This is areflexive result in which acts of unfair business competition are suppressed regarding
the legally beneficial well known or famous indication.
Regarding the territorial reach of the trademark right, and whether it extends nationally,
the effect of protection of well known indications under the Unfair Competition
Prevention Law is limited to the territorial scope forming the market presence. 6(Supreme Court Decision April 6, 1960, Keisyu Vol. 14, No. 5, page 525, Sendai
Kikuya v. Kikuya Case. In this case, there was the famous Kikuya, famous even in
Osaka, but not in Sendai. Without looking at the merits of a different case, in the Jet
Slim Clinic Case, the plaintiff was enjoined from using its mark in Shizuoka Prefecture,
due to the fact that the defendant's mark was more famous (Tokyo High Court Decision,
July 4, 1991. Chitekisyu Vol. 23, No. 2, page 555)). The effect of the protection of
famous indications under Unfair Competition Prevention Law is similar, and because
famous marks are by definition known nationally, it goes without saying that the right
extends to the territorial scope forming the market presence, which is national.
Moreover, relating to the type of business, the effect of protection of famous indications
under the Unfair Competition Prevention Law is not limited to only the relevant trade,but extends to protection of marks in different fields. This method of protection comesunder the "copyright approach," where the focus is "use" of an indication, unlike the"patent approach," where the focus is "registration." As a result, in regard to theprotection of famous marks under the Unfair Competition Prevention Law, it can be
4

Refer, supra, to the “copyright approach.”This is a relative monopoly right and is a metaphorical expression.
6
I would footnote this parenthetical.
55said that famous indications can be limited to the scope of the relevant trade forming
market presence. The protection of famous marks that are extremely strong extends toevery trade, but it should be understood that if the strength of the distinctiveness of afamous indication is not that strong, there will be a limitation on the scope of businessareas to which the protection will extend. (Reference page 47 for a discussion of what ismeant by strong indication).
2. The relationship of the Trademark Law and the Unfair Competition Prevention
Law
We have already discussed the fact that the Unfair Competition Prevention Law and theTrademark Law both form a part of business competition law. It is important toremember that the Unfair Competition Prevention Law and the Trademark Law are bothself-sufficient and complete laws, and, as a result, it is not appropriate to expend too
much energy trying to decide which to apply to a legal relationship. Both laws, while
differing in the legal perspective, frequently overlap in application. For example, it is
not appropriate to imagine that the Unfair Competition Prevention Law is applicable
only to protection of unregistered marks. (Long ago, it was theorized that the Unfair
Competition Prevention Law was only applicable to unregistered marks, but nowadays,
there are precedents acknowledging overlapping application. Osaka High Court
Decision August 27, 1963, Kamin-syu, Vol. 14, No. 8, page 1610, and Tokyo High
Court Decision, April 28, 1970, Mutai-syu, Vol. 2, No. 1, page 213 (acknowledging
that application of the laws can overlap in precedent and common explanation).
Additionally, there are many other cases, including many Supreme Court cases thatindirectly support the contention).
It is not the kind of question that can be answered in one glance, like whether atrademark is registered or not. As a practical matter, it is very often the case that thesituation is not clear even when it is known whether a trademark is registered or not.
For example, a trademark may be registered, designating goods or services, but
frequently it is unclear in which classes the goods or services belong. (For example,
would a sewing set for cutting cloth and creating clothes by merely sewing be classified
as "woven material" or "clothing." If we cannot decide which, then what class should
we use in an application?). In particular, this is often the case with new products. (Forexample, when the first music tape was filed as a good, the applicant corporation musthave been confused as to whether to register the mark in the class for tape or in the classfor records. Further, even recently, discs with software input are registered in manydifferent classes). Moreover, goods change based on the era, and one good that is the
subject matter of one class might be moved to another class. For example, it is often thecase that there is the problem of whether a good classified in one class in the Taisei Era
should be classified in the same class as usual if it uses the same product name as thosedays, but is a new product of the modern era. (For example, in which class of
Tsukigoromo would a novel clothing article like the recent "new mode shirt" belong.)
Furthermore, the question of what is a similar trademark, and the question of to what
structural sphere we can go to define a similar trademark, and the question of where we
draw the line on the degree of similarity, are all unclear. Even if the letters are
displayed on an infringer's sign, pamphlet, or name card, etc., such letters form a6

trademark if related to the goods or services, and not a trademark if not related.
Fundamentally, case precedent is also varied.
In such a situation, the decision to protect a trademark under the Trademark Law or anindication under the Unfair Competition Prevention Law, may require inquiry into
whether the potentially infringing mark is unregistered or not. When the decision has
been made, it is meaningless to try to bring another suit under the law that is notinitially used. Furthermore, traditionally, under current trademark law, trademarks arevisible things, and audible use of trademarks should not fall into the category of
trademark use. For example, even if a two-dimensional mark appeared on the televisionscreen, when the mark is only expressed by sound, not expressed visibly, like in thecase of oral advertisements on the street, or radio advertisements, this theory would saythat such use is not trademark use. (Conversely, under the infringement doctrine, vocal
use injures trademark value, and such use is infringement). Under the recent changes in
the Trademark Law under the 1996 revision, vocal use of marks was included alongwith the inclusion of three-dimensional marks. Consequently, now, when theinterpretation is made that the Trademark Law does not apply to such marks, sucharguments are usually thrown out. Under the Unfair Competition Prevention Law,
because there is no inquiry into whether an indication is registered or not, when a suit isbrought under the Unfair Competition Prevention Law, this question does not arise.
3. Exercise of Trademark Rights and the Unfair Competition Prevention Law
As for the exercise of Trademark rights, Section 6 of the old Unfair Competition
Prevention law (hereinafter referred to as "Old Section 6") was not applied to the "actsregarded as the exercise of the right," according to the Trademark Law. Accordingly, it
was defined that the actions falling under Items 1 and 2 of article 1 paragraph 1 of theold Unfair Competition Prevention Law (as well as the actions falling under article 1,
paragraphs 1 to 3 of the Old Unfair Competition Prevention Law) did not come under
unfair competition acts.
Therefore, the relation between the Trademark Law and the Unfair Competition
Prevention Law has always been a subject of discussion on whether or not rights under
the Trademark Law are "allowed as actionable rights" in an injunction lawsuit brought
under the exceptional provision of the old Unfair Competition Prevention Law.
Old Section 6 was repealed by the 1993 legal reform of the Unfair Competition
Prevention Law. As a result, rights of claims based on the Unfair Competition
Prevention Law and the Trademark Law compete with one another. Accordingly, it has
become more important to make the relationship clear.
(1) Circumstances of Legislation
From the viewpoint of history, the reason for enacting Old Section 6 was based on theperceived importance of registrations, i.e., a right of action established by agovernmental grant (registration) should be protected.
Abstractly, the Unfair
Competition Prevention Law was drafted so as not to exceed the Trademark Law.

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Fundamentally, first, the trademark right should be respected because the right wasapproved through examination procedures. Second, it is not appropriate to regulate theright under the Unfair Competition Prevention Law without invalidation or cancellation
procedures, because the right is approved by the government.
The deletion of Section 6, without invalidation or cancellation procedures of the
trademark right, has made it possible to directly regulate an action of a registeredtrademark right under the Unfair Competition Prevention Law. (However, theTrademark Law was not amended, and therefore the right to use trademark by virtue ofprior use under Section 32 of the Trademark Law is still limited to a passive right ofrefutation).
The formal explanation stated: "while the trademark right is an exclusive right, theUnfair Competition Prevention Law merely protects factual benefits. Therefore, theTrademark Law does not always take priority over the Unfair Competition Prevention
Law." The Unfair Competition Prevention Law was therefore amended, and as one
legislator recognized: "The adjustment between the benefits of both the laws is
performed under such a general principal that an improper use of right is not allowed.
Therefore, in the case where an action is considered as a proper action based on an
Industrial Property Right, the case should be treated the same as in the past" (Report
dated December 14, 1992, p.44, issued by Sangyou Kouzou Singikai Titekizaisan
Seisakubukai).
(2) Influence of the deletion
However, under the Old Law, there was a debate about Old Section 6. According toProfessor Toyosaki, the priority relationship between a registered trademark and a wellknown trademark is determined based on the timing, that is, when the former
application was filed and when the latter became well known (Toyosaki, Industrial
Property Rights on page 473; Year Report (1) entitled "Mixture of Protections ofTrademarks and Tradenames" issued by the law department of Gakusyuuin University,p. 82; Industrial Property Right Handbook p.419). In contrast, Professor Shibuya
argues that Professor Toyosaki's opinion is considered to only be applicable at thelegislative stage because of the existence of Old Section 6. He further argues that a wellknown indication can be classified as first, an indication meeting the criteria for a wellknown mark as defined by Item 10 of paragraph 1 of article 4 of the Trademark Law,second, an indication based on the right to use a trademark by virtue of prior use andthird, an indication that does not have the benefit of prior use. The priority relationshipbetween a registered trademark and a well known trademark should be determinedbased on whether or not the trademark registration was made based on an illegal
registration with objective and substantive defects (see Shibuya, p.296). Due to thedeletion of Old Section 6, at least, the adjustment proposed by Professor Shibuya under
Old Section 6 became the actual practice.
In cases of brand or mark confusion, it is possible that a person having a well known
indication could file an injunction against a person using a registered trademark basedon the Unfair Competition Prevention Law. Here, the issues of priority and region andthe issue of the right to petition for the prevention of confusion may be important8

matters for a dispute solution.
A person who owned a well known trademark called Hataserukana "Tateyama," which
was well known in respect of Japanese sake in Toyama Prefecture, was allowed toenjoin the sale of Japanese sake called "Echino Tateyama," (a registered trademark)under Item 1 of paragraph 1 of article 2 of the Unfair Competition Prevention Law(Toyama District Court, Report No. 288-8683 dated August 12, 1996). The decision
was reached at the High Court without careful discussion of the abuse of rights (Nagoya
High Court Kanazawa branch, Report No. 288-8681 dated March 19, 1997). Further, ata trial at the court of final appeal, the decision was upheld by a so-called "model
precedent" decision (Supreme Court Report No. 288-86254 dated December 18, 1998).
Thus, the Unfair Competition Prevention Law is slowly being established as setting
precedent.
(3) Position of a person having a non-registered trademark in the registration
systemUnder the registration system, a trademark right is created by registration. The
trademark right allows the registered trademark owner (hereinafter referred to as "X") to
exclusively use the registered trademark (hereinafter referred to as "A") and has
superior rights in many cases of conflicting trademarks.
A more problematic circumstance is found, however, in the case where a trademark user
(hereinafter referred to as "Y") was using an established trademark A in good faith,
without limiting the effect of the registered trademark right. By allowing X to preventY‘s use of the mark A, the goodwill of Y in respect to the trademark A would be
captured by X, an unfair result. In an attempt to create an equitable solution, the laws
attempt to balance the rights of both X and Y. Two considerations are paramount: first,
what conditions are required to allow the right of Y to continuously use the mark by
virtue of prior use (article 32 of the Trademark Law) and second, what conditions are
required to grant the registered trademark owner X an injunction against the acts ofconfusion of the person Y (paragraph 1 of article 3 of the Unfair Competition
Prevention Law). That is to say, when the benefits to X and Y are compared, it should
be determined whether or not it is appropriate to make an exception and deny the rights
the trademark owner acquired under the first-to-file registration system.
Suppose an injunction is entered under the Unfair Competition Prevention Law against
the applicant X after registration, because applicant X had filed the application while
fully aware of Y’s use of the trademark A? In this case, it would be considered fair that
protection was afforded to Y based on Y’s prior use. The protection of a mere markuser, such as Y, in contrast to an applicant for a registered mark, such as X, may differ
depending on the status of use of the trademark A by X and Y and the status of whether
the mark A used by Y is well known or not.
(4) Position of the prior user against the trademark right owner
Under a registration-based system, a person who merely uses a trademark (hereinafter,“A”) prior to a filing of an application by another will not have any relief based on9merely the fact of use, due to the need to stabilize registered trademark rights.
Because of Y’s prior use or A, the Unfair Competition Prevention Law prevents
registration of a conflicting trademark A when Y’s trademark A becomes well known.
This is one effect of the abolition of the Old Section 6. There is significant debate as towhether this is still the case under the new law. Even under the Old Law, the position
or right of the non-registered, well known trademark owner was strongly debated (seePater by Toyosaki & Shibuya). Accordingly, the trademark owner X who filed a
trademark application with knowledge of Y’s use of the mark was prohibited fromexercising his right only when he abused his rights. However, due to the deletion of
Old Section 6, the owner was now prohibited from exercising his rights even if he did
not know of Y's use and was not considered to be abusing his rights.
According to judicial precedents in Japan, courts have traditionally been truly faithful tothe concept of the registration system. Where a registrant under the first-to-file system
has priority over another trademark user, the registrant will prevail if he has not abused
his rights, even if he acted in bad faith or the registration was obtained in order to obtain
the other person's clients. More recently, however, the situation has changed. There isa possibility that use of a well known trademark and a registered trademark may coexist and compete with each other. Although the Report on the amendment of the
Unfair Competition Prevention Law states that there is no change in the law as a resultof the deletion, due to the deletion of Old Section 6, the problem on how to balancemark registrants and mere users will become more important. Since the timing and thecontent of the phrase "widely recognized" in each law is different, the term should beapplied to the respective Laws differently, because the purpose of Section 32 of theTrademark Law and the Item 1 of paragraph 1 of article 2 the Unfair Competition
Prevention Law are different from each other.
Comparative law discussions find that provisions such as Old Section 6 are rather
exceptional ones from the international point of view. Even if there had been no
provision such as Old Section 6, it is likely that the trademark legal order would havebeen stabilized by an accumulation of judicial precedent. Because Old Section 6 wasomitted after the fact, however, the ramifications of its deletion should have been
sufficiently discussed. As of today, the law is scattered and there is confusion regarding
the presumption of the effect of the trademark right.

10