2

Trademark System in the 21st Century

Although the current Japanese Trademark Law has undergone several amendments since its promulgationin 1959, these amendments have mostly been technical revisions of provisions to add necessary requirements.
Therefore, a fundamental amendment of the law is required in the future.
In this study, we clarified and investigated issues pertaining to the following eight major points that need to
be investigated in order to fundamentally amend the current Trademark Law, with promoting the strategic useof brand names as one of the key perspectives.
These points are as follows: (1) adding “distinctiveness” to the definition of “trademark”; (2) protection of
trademarks consisting of sounds, colors and smells; (3) whether or not to allow “electricity” as goods under the
Trademark Law; (4) whether or not to allow “retailing” as services under the Trademark Law; (5) introductionof a comprehensive definition for “use”; (6) whether or not use by auditory representation should be consideredas the “use with respect to a mark” in Section 2 (3) of the Trademark Law; (7) introduction of the consent
system; and (8) review of the defensive mark system.

Ⅰ Introduction
The current Japanese Trademark Law waspromulgated in 1959, and since then, has
undergone several amendments to respond todomestic or international situations such as
strengthening the obligation to use registeredtrademarks, introduction of the service markregistration system, and participating in treaties
such as the Nice Agreement, the Trademark Law
Treaty, the Madrid Protocol, etc. However, theseamendments did not go beyond the scope of adding
necessary requirements to the technicalconstruction of provisions. Meanwhile, thetrademark systems in the United Kingdom andGermany, which were the models for the Japanesesystem, have undergone fundamental amendment
in accordance with the EC directive of 1988, which
may have been one reason that, regarding thenecessity for the amendment of the JapaneseTrademark Law, the Legal System Subcommittee of
the Intellectual Property Policy Committee,
Industrial Structure Council (2001) proposed, “It isnecessary to promote review of the system in the
future in line with international harmonization.”
Furthermore, with China’s entry into theinternational market, full-scale use of brand-namestrategy by Japanese companies has become more
and more important, and therefore, it is proposed in
the Intellectual Property Policy Outline that “TheGOJ (Government of Japan) will consider specificmeasures to enable companies to provide products
and services of greater value by using attractive
designsandbrand-names,
includingtheestablishment of ideal design and trademark
systems. It will draw a conclusion by FY 2005.”
Therefore, in this study, we clarified and discussed
the issues that need to be investigated in order toamend the current Trademark Law, with promoting
the strategic use of brand names as one of the key
perspectives.

IIP Bulletin 2003

Ⅱ Issues for Amendment in theTrademark Law: Specific Issues
for
which
Amendment
isRequired1

How to Define “Trademark”(1) Introductionofadefinitionof“trademark”
thatfocuseson“distinctiveness”(i) Nature of the problem
In the old Trademark Law of 1921, Section 1(2) imposed the requirement of “special
distinctiveness” on a trademark, for which there
was the “constituent element theory” and the“registration requirement theory.” “Special
distinctiveness” was generally interpreted asmeaning “distinctive character distinguishing one’s
goods from those of others.”
The current Trademark Law does contain arequirement of “special distinctiveness” in its
definition of a “trademark,” but Section 3 (1) of the
Law specifically provides for cases of a trademark
lacking “special distinctiveness” for trademarks forwhich an application for registration has been made.
Therefore, “trademark” as defined in Section 2 (1)is somewhat detached from the socially-acceptedidea of “trademark” that has distinctiveness as its
character.
Because of the points mentioned above, one ofthe problems with the current trademark law is thateven a use of a mark that is not a so-called “use as atrademark” may be accused of being an
infringement of a trademark right.
On the other hand, in recent years, court
precedents have established that a use of a
trademark in a manner that lacks “distinctiveness”
cannot be an infringement of a trademark right, andthe opinion has been voiced that there should be no
problem with the current definition; but thereasoning regarding such opinion is not yet fixed,● 12 ●

and therefore, the fear of possible confusion cannot
be ruled out.
(ii) Examples in other countries
Many countries have the explicit element of“distinctiveness” in their definition of “trademark.”(iii) Points to be investigated・ Whether it is necessary to provide for therequirement of “distinctiveness” in the definition of“trademark,” thus clarifying the scope of protection,or to the contrary, whether it is better to keep it as
it is so as not to cause confusion with the alreadyestablished theories and court precedents.
(iv) Main opinions of the Committee
c Adding “distinctiveness” as a constituent
element in the definition of “trademark”
Most voices were generally in favor of adding“distinctiveness” as a constituent element.
As mentioned above, the reasoning in the
court precedents is not yet fixed. Rather, suchprecedents draw decisions without clarifying thepoints in question; furthermore, it was pointed outthat adding “distinctiveness” would clarify themeaning of “trademark” in the provisions of not
only Section 37 but also Section 3, 4, 26 and others.
d Meaning of “distinctiveness”
There was one suggestion of letting it have ameaning that includes the concept of Section 3(2) of
the Japanese Trademark Law, i.e., “capable ofacquiring special distinctiveness as a result of theuse,” referring to the term “capable” that is used in
the U.K. as “capable of distinguishing,” and another
opinion suggested limiting it to an objective
requirement and excluding any subjective ones.
e Problems with adding “distinctiveness”
There was the opinion that when judging
whether trademarks are identical or similar to eachother, it may always become necessary to breakthem down into the distinctive part andnon-distinctive part.
2

Expansion of Scope of Protection under
Trademark Law(1) Expansion of component elements of a
trademark: Protection of sounds, colors
and smells, etc.
(i) Nature of the problem
Trademarks protected under the current
Trademark Law can consist of only the elementsthat are recognizable by sight such as characters,
figures and signs, etc., and the demand fromcompanies for the trademark protection of otherelements including sounds, colors, and smells has
not been very high. The question is, in this modern
society with increasing diversification of theconcept of goods and services and the manner ofuse of trademarks, whether to recognize a markconsisting of sounds, colors, and smells as atrademark in line with the examples of European
countries and the United States.

(ii) Examples in other countries
Mainly European countries and the UnitedStates allow registration of trademarks consistingof sounds, colors or smells, and they have various
examples of registration. However, the number ofregistrations itself is not so large, and it seems thatthe examination criteria or qualifications for the
subject of examination have yet to be established.
(iii) Points for investigation
・Whether the Trademark Law is an appropriate
framework for the protection of distinctive sounds,
colors, or smells
・Considering protection by the Trademark Law,
how to deal with the question of exhaustion ofcolors, the manner of description on the application
form, the measure of examination and thespecification of the scope of the right.
(iv) Main opinions of the Committee
As for trademarks by sounds, colors, or smells,
the demand from the user side is not so strong, andmeanwhile, there was the opinion that if these
trademarks were allowed, they would be difficult tomanage.
Another opinion that was voiced was that if theregistration of these trademarks were allowed, theJapan Patent Office could be expected to incur agreat burden for the preparation of the system toaccept them and for the examination, etc.
On the other hand, there were opinions thatsuch registration might as well be allowed if those
trademarks are objectively distinctive, the scope ofthe right identifiable and their publication possible,
and that from the standpoint of brand strategy,
companies should positively consider making use of
these trademarks.
(2) Review of the Concept of Goods andServices (1): Treating “Electricity” as
Goods(i) Nature of the problem
Under the 9th edition of the Nice Agreement,“electricity” is certain to be added to theInternational Classification of Products andServices as Class 4 goods, and in Japan also, withthe amendment of the Electric Utility Law, theliberalization of electricity retailing has begun.
Under these circumstances, should it be allowable
to obtain trademarks for goods for “electricity”?
(ii) Views in other countries
In the U.S. and U.K., “electricity supply” isincluded as a service but “retailing” is notrecognized as such. Therefore, their view is in favorof allowing trademarks for electricity as trademarks
for goods to protect the activity of electricity
retailing.
(iii) Points to be investigated・How to apply the definition of “use” in Section 2(3) to “electricity,” which is intangible and cannot
be kept in a container (supplied through a wire), andwhether “electricity” can be regarded as goods in
Section 2 (1) (i).

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(iv) Main opinions of the Committee
There was no objection to allowing electricity
to be treated as goods under the Trademark Law.
As a specific opinion, one member gave theview that since industry is in effect treating
electricity itself as goods, electricity can obviously
be regarded as goods under the Trademark Law andthere should be no objection to that, but it will benecessary to review the definition for “use.”(3) Review of the Concept of Goods andServices (2): The Question of Introducing“Retailing” as a Service(i) Nature of the problem
In Japan, under the current Trademark Law,“retailing” is regarded as assignment (sales) ofgoods and not as provision of a service. This isbecause “retailing” does not fall under the current
definition of services, i.e., “the act of providing
labor or benefits to others which can in itself be theobject of commercial trade”
On the other hand, in addition to the U.S. andCanada who have been treating “retailing” as aservice, the Office for Harmonization in theInternal Market (OHIM) and the U.K. have also
recently begun recognizing “retailing” as a service,
which is an international trend that we will have to
face and take into consideration.
Meanwhile, while retailers have the opinion
that if it were sufficient to file an application for aservice mark designating only Class 35, it would
exclude the burden of applying for trademarks forgoods designating plural classes of goods, helping
also to reduce costs, concerns were also voiced
about possible conflicting registrations by others.
Is it desirable to allow service marks for“retailing” in Japan under these circumstances?
(ii) Views in other countries
European countries, the United States, Taiwan
and others have allowed service mark registration
for “retailing.”(iii) Points to be investigated・Why “retailing” does not fall into the category of“services” under the current Japanese Trademark
Law・Even if the registration of a mark designating“retailing” is admitted, isn’t the scope of the rightvague? Furthermore, in the examination, is
judgment required on similarity with various kindsof goods in Class 1 to 34?
・What range of “retailing” should be admitted forthe registration of a service mark?
(iv) Main opinions of the Committee
Many were of a positive opinion towards
admitting service marks for “retailing.” On theother hand, there was an opinion that the scope of“retailing” to be admitted should be determined bytaking the social effects into consideration.
Specifically, there was an opinion that thenecessity under the Trademark Law for a service tobe “the object of commercial trade in itself” is

IIP Bulletin 2003

unclear; since in the retail business also, the nameof a store may have the power to attract customers,
retailing should be admitted as a service.
Meanwhile, as to the scope of “retailing” thatshould be admitted as a service, one opinion wasthat it should be determined with consideration
given to small retailers, and, when it is introduced,
a transitory measure should be considered like thatof the right of continuous use that was adopted
when the service mark system was introduced.
3

Responding to the Diversification of theManner of Use(1) Review of the definition of “use” of a
trademark:Introductionofacomprehensive definition for “use”(i) Nature of the problem
A problem with the current JapaneseTrademark Law is that its definition of “use”
prescribes the acts in too many segments,
especially for services prescribing peripheral acts
around the act of providing services, without
stipulating the essential act itself. Furthermore, inorder not to be forced to add to or modify theprovisions for “use” of a trademark each time a new
business emerges with the changes of the times, itis necessary to consider introducing acomprehensive definition for “use” while making
reference to the examples of legislation in
European countries or the U.S.
(ii) Examples in other countries
European countries and the United States
have generic definitions of “use.” For instance, inGermany and U.K., they have provisions like “offer
or provision of services under a mark,” which
covers all acts under Section 2 (3) (iv)-(vi) of theJapanese Trademark Law, which defines the “use”
of trademark for services.
(iii) Points to be investigated・ If a comprehensive definition for “use” isintroduced, will it not make the definition of “use”
of a trademark vague? Furthermore, what
considerations need to be made concerning theeffects of such definition on other provisions?
・How about providing for the term “use,” like inGermany and the the United Kingdom, in theprovisions on infringement rather than providing
for the definition of “use” of marks as in the current
trademark law?
(iv) Main opinions of the Committee
For example, Section 10 (4) (b) of the U.K.
Trade Marks Act stipulates, “offer or expose goods
for sale, put them on the market or stock them forthose purposes under the sign,” and if we provide
for a comprehensive definition for “use” based upon
this, it would be, “providing or offering to provide
goods under the sign,” which is vague in Japanese,and thus requires further investigation.

● 14 ●

(2) Use through auditory representation(i) Nature of the problem
The current Trademark Law defines acts ofuse of a trademark as acts in which distinctivenessis recognizable by visual perception. Consequently,
sounds (radio commercials, etc.) recognizable byauditory perception are excluded from the scope of
use of marks. On the other hand, there is a theory
that, “If another person repeats an appellation on aradio commercial, it would be no less likely to cause
confusion….[Therefore, it] should be regarded as ause of a trademark from the perspective of
infringement.” Hence, investigation is required onwhether to admit the use of trademarks throughauditory representation.
(ii) Examples in other countries
Australia and Norway are among the few
countries that admit use through auditory
representation.
(iii) Points to be investigated・Considering the developments in the advertising
function of trademarks and the advertising media, is
it not necessary to include the “use throughauditory representation” in the definition of the useof trademarks, thus strengthening the protection of
trademarks?
・ Meanwhile, for example, where there is a
registered trademark on the Chinese characters for“the sun” (pronounced “taiyou” in Japanese), if one
read aloud the Chinese characters for “the ocean”(different characters to the letters for “the sun” butwith the same pronunciation), would it constitutean infringement?
(iv) Main opinions of the Committee
There was an opinion that, like anadvertisement being read aloud, there are naturallycases where a trademark is expressed by auditory
representation, and, even if use of a mark in“auditory representation” does not fall under “use”
in Section 2 (3), such use is most likely to be
subjected to the right to demand injunction under
Section 36 (1), presenting no problems with regard
to trademark protection. However, from thestandpoint of strengthening trademark protection,such use might as well be included in the concept of“use,” and for this purpose, it is advisable to clearlystipulate that a use in “auditory representation”
also falls under “use” as defined in Section 2 (3).
4Other Issues(1) Introduction of consent system(i) Nature of the problem
By the amendment of the Japanese Trademark
Law in 1996, the transfer of a similar registeredtrademark separate from the main registeredtrademark came to be allowed, which made it
possible, as a response to notification of reasons forrefusal of an application for registration of a
trademark citing the existence of similar priorregistered trademark, to “transfer the application
once to the right owner of the existing registeredtrademark and get it transferred back after having it
registered by the existing right owner.”At the time of the amendment of the law in1996, the introduction of a “consent system,” which
would enable the applicant in the preceding
paragraph to obtain the same legal position as thatobtained through the convoluted proceduredescribed above, was investigated, but was not
adopted for the reason of a possible delaying effecton the examination process. However, many othercountries have adopted this system, and with someusers desiring its introduction, the introduction of
the “consent system” needs to be investigated.
(ii) Examples in other countries
Many countries have adopted the “consent
system.” The U.K has, so to speak, a “complete
consent system,” in which “even if there is arelative reason for rejection, the registration isallowed if there is consent.” The U.S., Australia andothers have, as it were, the “consent system withsome reservations” in which “if there is a danger of
causing confusion, registration is not allowed even
if there is consent.” And OHIM, Germany andFrance, etc. have what you might call the “hidden
consent system,” in that they conduct examination
only for an “absolute reason for rejection.”(iii) Points to be investigated・ Which should have more weight in allowing
registration, public interests or private interests?
For example, while there are different views on the
purpose of each paragraph of Section 4 (of theJapanese Trademark Law), suppose the purpose of
Paragraph 11 is private interest, and Paragraph 15
public interest, when there is consent, even if theexamination will not be conducted if it is regarding
Paragraph 11, as for Paragraph 15, should it not be
conducted for the sake of protection of public
interest?
・If the consent system were introduced, would it
not work to cause consumer confusion?
・Is the fact that a trademark was registered byconsent to be publicized?
・What would be the scope of a right that has beenregistered by consent?
(iv) Main opinions of the Committee
As a whole, there were many opinions in favorof introducing the consent system. Among theopinions in favor, one was from the standpoint of
having a user-friendly system, and another pointed
out that the introduction would enable theexamination to be more based on the reality ofbusiness. On the other hand, one alarming opinion
was that due consideration should be given to copewith possible examination delay, consumer
confusion and misuse of right. Furthermore, there
was an opinion that if the system to be introducedis the “consent system with some reservations,”
the law as it currently stands already● 15 ●IIP Bulletin 2003

accommodates this in its operation.
(2) Review of the defensive mark system(i) Nature of the problem
The defensive mark system is for theprotection of well-known trademarks. However,unlike when the system was introduced in 1959,
the protection of famous trademarks by the Unfair
Competition Prevention Law has been enhanced,
and therefore, on the occasion of the revision of theTrademark Law in 1996, the abolition of the
defensive mark system was investigated, with theconclusion being to maintain the system for thereasons that under the Unfair Competition
Prevention Law, an act of misusing a well-known
trademark (Section 2 (1) (ii) of the Law) is notpunishable by criminal penalties and violation of thelaw is not subject to border regulations under the
Customs Tariff Law. Meanwhile, the U.K., which
had had a defensive mark system, abandoned thesystem in the amendment of the law in 1994,
replacing it with a new system in accordance with
the EC Directives. In light of these situations, it isnecessary to investigate the necessity of the
defensive mark system, and the method ofadequate protection of well-known trademarks.
(ii) Examples in other countries
Currently, India, Hong Kong, Australia andothers have a defensive mark system.
(iii) Points to be investigated・Should the defensive mark system be maintainedor abolished? Even if it were abolished, would the
Unfair Competition Prevention Law cover it for theprotection of well-known trademarks? And, can a
new provision for the protection of well-known
trademarks be conceived as a substitute for the
defensive mark system?
(iv) Main opinions of the Committeec Necessity of the defensive mark system
As there have been very few cases ofenforcement of a defensive mark right (it seems
there has been no case for the border regulation
either), the necessity of the system is low. There
was also an opinion that since a defensive markregistration lasts ten years even if the trademark
has ceased to be well-known, the system may not
be appropriate for the protection of well-known
trademarks.
On the other hand, there was another voice insupport of maintaining the system for the reasonsthat while, under the defensive mark system, themark will be protected by registration for the scopeof the right, if, without utilizing the system, one
tries to protect a mark by trademark registration forbroader designated goods, there is a possibility theregistration may face a demand of trial forcancellation of registered trademark not in use, andfurthermore, an infringer of a defensive mark is
subjected to criminal penalties, which could be adeterrent to infringement. This opinion added thateven if the defensive mark system were abolished,

IIP Bulletin 2003

another similar system should be introduced in its
place.
d Well known trademark protection to replace
the current defensive mark system(a) Protection by the Unfair Competition
Prevention Law
One member stated that in order to giveprotection, under the Unfair Competition
Prevention Law, of the same degree as under the
defensive mark system, it is necessary to makeviolation of the Unfair Competition Prevention Law
subject to the border regulations under the
Customs Tariff Law, and make an act of misuse of awell-known trademark (Section 2 (1) (ii) ) subject tocriminal penalties. And, in that case, additional
provisions in the Unfair Competition Prevention
Law for the appropriate constituent elements would
be needed.
(b) Protection by the Trademark Law
・Expansion of prohibitive right
Although a trademark that is liable to cause
confusion with another person's well-known
trademark cannot be registered, the use of such a
trademark, unless the trademark and goods orservices with regard to which the trademark isused are identical or similar to a registeredtrademark and its designated goods or services, will
not constitute an infringement of the registeredtrademark even if it is a well-known trademark.
One suggestion was for legislation to the effect that,even if the goods or services with respect to whicha trademark is used are not similar to thedesignated goods or services of a registeredwell-known trademark, if the use is liable to cause
confusion, the use shall be subjected to theprohibitive right of the registered well-known
trademark.
・Legislating a provision based on Section 5 (2) ofthe EC Directive
By putting into legislation a provision such as
the one mentioned above, a well-known registeredtrademark will have an expanded prohibitive rightthat extends to un-similar goods or services. Thismeasure may be better than the defensive marksystem for the protection of well-known
trademarks in that the judgment of whether the
trademark is well-known will be made at the time
the owner makes use of this provision. There wasan opinion, however, that when this measure istaken, it will be necessary to fully investigate how
to deal with the requisites for free ride, which is notcovered in the Japanese Trademark Law or the
Unfair Competition Prevention Law, and how tomake a judgment on the famousness of a
trademark.

● 16 ●(Researcher：Hiroki Hattori)

● 17 ●IIP Bulletin 2003