4

Study on the Desirable Form of Protection
under the Patent Law and Trademark Law
in the Era of Information Technology

E-commerce and other business activities on computer networks are expanding in line with the diffusion of
the Internet. In order to respond to such changes of the economy and society, the Japan Patent Office (JPO) has
held discussions on strengthening the patent protection of information property such as software, increasing andimproving provisions on indirect infringement under the Patent Law, and strengthening the protection of
trademarks used in online businesses, with an eye to amending the related laws.
With the aim of contributing to such discussions, this study has analyzed Japanese court decisions
concerning indirect infringement and joint infringement acts. In addition, investigation and study has been
made on constitutional laws of major western countries that refer to intellectual property rights, the damages
awarded in recent patent/utility model infringement cases, the constituent elements of indirect infringement, thehandling of claim categories, the handling of divisional applications and continuing applications, the handlingof trademarks used on the Internet, and the handling of goods attached with service marks.

Ⅰ Introduction
The main features of the 2002 bill partiallyamending the Patent Law and other laws were toreview the definition provisions in the Patent Law
and Trademark Law so as to respond to the
spreading use of information networks, and to
improve the provisions on indirect infringement in
the Patent Law and other laws. In making such
amendments to laws, it is indispensable toinvestigate and analyze the related systems andcourt decisions of not only Japan, but also those ofwestern countries.

Ⅱ Situation Surrounding Intellectual
Property Rights
1

Mention of Intellectual Property Rights in
National/Regional Constitutional Laws

First of all, investigation and analysis has been
conducted on the situation surrounding intellectual
property rights (IPR) as a premise for amending thePatent Law and other laws.
First of all, foreign constitutional laws
referring to intellectual property have been
investigated and analyzed. The intention of thestudy was to examine the significance and thereasonableness of the existing argument that the
pro-patent policy should be clearly set forth bystipulating protection of patent and the like in thenational constitution, as in the case of the UnitedStates, in amending the laws this time.
The constitutional laws of foreign countries

that refer to intellectual property can be categorized
into ones clearly stating that intellectual property
should be protected(*1), ones clearly stating that thenation should be liable to encourage invention(*2),
and ones clearly stating that the authority toregulate IPR is vested in the commonwealth or thelike(*3). The countries of which constitutions clearlystate that intellectual property should be protected
are mainly countries that have enacted theirconstitutions relatively recently, such as countries
in Eastern Europe and Latin America. The Federal
Constitution of the United States merely stipulates
that the federal government has the authority toregulate copyrights and patents.
2

Increase in the Amount of Damages
AwardedinPatent/Utility
Model
Infringement Lawsuits

With respect to the measures taken in the1998 and 1999 amendments of the Patent Law andother laws for extending stronger remedies forinfringement of such rights as patents, forexamination of their effects, and assessment of
the need for making further amendments, theamounts of damages awarded in Japanese
IPR-related lawsuits in recent years have been
analyzed. Looking at the average amount ofdamages awarded in patent/utility model
infringement lawsuits for the past every five-year
period, the average for 1990 to 1994 was only about
46.24 million yen but that for 1998 to 2001 reachedabout 181.25 million yen.
The following are representative cases
indicating the spiraling amount of damages: 760(*1) Such countries as Russia, Slovenia, the Republic of Korea, the Philippines, Brazil, Portugal, and Yugoslavia.
(*1)(*2) Such countries and territories as China and Taiwan.
(*2)(*3) Such countries as the United States, Australia, Austria, Germany,(*3) and Spain.

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million yen awarded by the Tokyo District Court in
May 1973 in a design infringement case related to a
design of a motorbike of Honda Motors; 1.12 billion
yen awarded by the Toyama District Court in
February 1997 in a patent infringement case related
to a manufacturing process of an antiallergic agentof Kissei Pharmaceutical; a total of 3.06 billion yen
awarded by the Tokyo District Court on October 12,
1998 in a patent infringement case related to a
manufacturing process of cimetidine, a cure forulcers, of SmithKline Beecham (U.K.); and a total of
8.41 billion yen awarded by the Tokyo District
Court on March 19, 2002 in a patent infringementcase related to a pachinko-type slot machine of
Aruze.
High amounts of damages awarded in recent
U.S. court decisions include about 147 billion yen in
Litton v. Honeywell in 1993 and about 107 billion
yen in Polaroid v. Kodak in 1991.

Ⅲ Basic Research for Amending thePatent Law
1Analysis of Japanese Court Decisions on
Indirect Infringement

A total of 124 cases involving indirect
infringement have been extracted from thepatent/utility model lawsuits that had been
published by 2001 and analyzed from a number ofviewpoints.
The percentage of cases disputing indirect
infringement of product claims was more or less thesame as that of process claims. Indirect
infringement was found in whole or in part in 25
cases (about 20 percent) and denied in 99 cases(about 80 percent). The number of cases that weredismissed before the determination of indirect
infringement, due to such reasons as “the art does
not fall under the technical scope,” was 60,
accounting for about 50 percent of the studied cases.
In the 64 cases in which the determination wasmade on whether or not one of the constituent
elements of indirect infringement, to be used“exclusively” for working the invention, wasfulfilled, judgments that the requirement of“exclusively” was not fulfilledwere made in 39 case(about 61 percent).
Major court decisions on indirect infringementof patents/utility models include the case of themethod of attaching a decorative laminate to thewall, the interchangeable lens case, the automatic
bread baker case, the sand mill hammer case, andthe case of a transparent agent for composing

polyolefin(*4). Examples of court decisions on
indirect infringement of software-related patents
include the master-copy designing case and theauthentication system case(*5).
2

Joint Acts

The following can be assumed as the typical
patterns in which acts of patent/utility model
infringement are conducted: (i) a single person
conducts an act in full; (ii) each of multiple persons
conducts an act in full; (iii) each of multiple persons
jointly conduct an act in full; (iv) multiple persons
jointly conduct an act by taking charge of theirrespective parts; (v) physical assistance; and (vi)abetment/mental assistance.
A total of 124 cases involving joint
infringement acts have been extracted from thepatent/utility model lawsuits that had been
published by 2001 and analyzed from a number ofviewpoints.
It was clearly indicated in either the statementof claim of a party or the grounds for the decisionthat the act was either a “joint tort” or based on
Article 719 of the Civil Code in 66 cases. Apartfrom these, the court found “solidarity (including
imperfect solidarity)” in the liability for damage in
31 cases, and found a “joint” or “conspired” act of
infringement by multiple persons in 18 cases. Of
the 124 cases, the act of the defendant was disputed
as being abetment or assistance in 14 cases. Amongthese 124 cases, judgment on “joint act” wasmade in 28 cases, and a “joint act” was found in 19
cases.
Among the cases in which indirect
infringement was also disputed, no case was foundthat both a joint act and indirect infringement were
found.
In the Napster case where copyright
infringement was disputed in relation to an act ofusing copyrighted musical works on computer
networks in the United States, the U.S. district
court ordered an injunction against almost theentire scope of Napster’s service. The appeals court
also denied application of the fair use doctrine, andfound contributory infringement discovering noerror in the district court’s judgment that Napsterencouraged and assisted users’ acts of infringement
while being aware that the acts would infringe theplaintiff’s copyrights. Further, it found vicarious
infringement, although in a more limited mannerthan the district court, based on the reason that
Napster could police illegal files by checking the filenames. However, the appeals court reversed a partof the district court’s decision, holding that the(*4) Osaka District Court, February 16, 1979 [1977 (wa) No. 3654]; Tokyo District Court, February 25, 1981 [1975 (wa) No.
9647]; Osaka District Court, October 24, 2000 [1996 (wa) No. 12109]; Osaka District Court, April 24, 1989 [1985 (wa) No.
6851]; Osaka District Court, December 21, 2000 [1998 (wa) No. 12875].
(*5) Tokyo District Court, July 18, 2000 [1999 (wa) No. 1346]; Osaka(*4)District Court, February 1, 2001 [2000 (wa) No. 1931].
(*5)● 35 ●IIP Bulletin 2002

scope of the injunction was too broad, andremanded the case(*6).
3

Analysis of the Constituent Elements ofIndirect Infringement in Europe

The handling of contributory or indirect
infringement in the U.K., Germany, and France arebased on the provisions in Article 26 of theCommunity Patent Convention (CPC). While there
are slight differences between those countries, thesubjective and objective elements are the same.
The objective elements require the means supplied
or offered to relate to an essential element of theinvention and suitable to be put into effect in theinvention. The subjective element is knowledge (orobviousness in the circumstances) of the presumed
infringer that the means offered or supplied aresuitable and intended for putting the invention into
effect. One of the difficulties in lawsuits forcontributory or indirect infringement is how to
distinguish between essential elements andnon-essential elements.
Any infringement of a European patent shallbe dealt with by national law according to Article
64(3) of the European Patent Convention(EPC). In
the United Kingdom, Germany or France, a “staple
commercial product” cannot be embraced in thescope of protection unless the product is supplied
or offered for the purpose of inducing the person
supplied directly infringe the patent. In U.K. andGerman court decisions, according to theinterpretation of Art.30CPC (current Art.26CPC),
the courts have interpreted a “staple commercial
product” to be a product of the kind needed every
day and generally obtainable, such as nails, screws,
bolts, wires, chemicals, fuels and the like(*7). A
product specially designed to co-operate with aninvention will be found to fall outside the range of“staple commercial products,” and infringement
cannot be denied merely because the product hasother usage. France seems to interpret theexclusion of “staple commercial products” fromthe scope of protection under doctrine indirect
infringement more broadly than U.K. andGermany(*8).
To prevent patent proprietors from unduly

extending their exclusive right, the distinction
between essential elements and non-essential
elements is inadequate. In the United Kingdom,
there is a difference between contributory
infringement under the common law and indirect
infringement under Section 60(2) of the Patents Act.
In an infringement case(*9) related to an invention
for using zinc powder to prevent corrosion inboilers, where a party sold zinc powder with intent
to put the invention into effect, the fact underlying
the decision of U.K. court are now looked upon as awould-be act of indirect infringement under the
Patents Act. However, with the revision of theGerman Patent Law in 1981, difference between
essential elements and non-essential elements is
no longer required. Essentiality is to be confirmed
if the means supplied differ from those commonlyused in the state of art relative to the patent in
dispute and enable practicing the invention definedin an independent claim(*10). In France, thesubjective element or a supply or offer of “staple
commercial products” is more relevant in indirect
infringement than the means relating to an
essential element of the invention.
4

Handling of Claim Categories in the
Examination Phase in Europe

Since the categorization between “productinventions” and “process inventions” would be an
important point of issue in amending the Patent
Law to correspond to the spread of information
networks, the claim categorization in theexamination phase in Europe has been analyzed.
The claim categories of products and processes
also exist in Europe. The U.K., German, andFrench patent laws have provisions about therelationship between the claim categories(product/process) and infringement(*11). Although noprovision can be found that other categories than
products or processes are barredfrom patentability,from practical experience, patent claims can beunderstood as either product claim, process claim,
or a hybrid form of these two, regardless of thedesignation made by the applicant.
Article 84 EPC provides that the claims “shallbe clear and concise” and C-III-4.1 of the(*6) A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 2000 U.S. Dist. LEXIS 11862, Copy. L. Rep. (CCH) P28126, 55
U.S.P.Q.2d (BNA) 1780 (N.D. Cal. 2000); 2001 U.S. App. LEXIS 1941, 2001 Cal. Daily Op. Service 1255, 2001 D.A.R. 1611,
57 U.S.P.Q.2d (BNA) 1729 (9th Cir. Cal. Feb. 12, 2001). The district court’s decision based on the remand and the appeals
court’s decision on it were also later rendered. See 2001 U.S. Dist. LEXIS 2186 (N.D. Cal. Mar. 5, 2001), 284 F.3d 1091,(9th Cir. Mar. 25, 2002).
(*7) For the British case, see Andreas Pavel v. Sony Corp, Sony (UK) Ltd. and Toshiba Ltd., Patent County Court, BL
CC/14/93, noted in IPD 16070, pp. 60-61; for the German case, see Landgericht Düsseldorf 25.2.1997 4 O 204/95
Klemmhalter, Entscheidungen 1997 Heft 2, pp. 25-31, p. 30.
(*8) Tribunal de Grande Instance Paris 26.9.1986, EPO OJ 10/1991, pp. 544-546; IIC 1989, pp. 217-220.
(*9) Innes v. Short and Beal, High Court, Queen’s Bench Div. June 27, 1898, [1898] 15 RPC 18, pp. 449-452.
(*10) Bundesgerichtshof 10.12.1981 XZR 70/80 Rigg, GURU 1982 Heft
3, pp. 165-168; Bundesgerichtshof 24.9.1991 X ZR 37/90
(*6)
(*9)
(*7)
(*10)
Beheizbarer Atemluftschlauch, EPO OJ 1993, pp. 89-93; Bundesgerichtshof
10.10.2000 X ZR 176/98 Luftheizgerät, GRUR
(*8)
(*11)
2001, Heft 3, pp. 228-232.

IIP Bulletin 2002

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Guidelines for Examination in the EPO stipulates,“In view of the differences in the scope ofprotection which may be attached to the various
categories of claims, the examiner should ensurethat the wording of a claim leaves no doubt as to its
category.” Thus, during prosecution, an applicant
would be requested to clarify the claim, possibly by
precisely stating the category. Such hybrid claims
as a “product by process claim” will be theexception to the general rule of lack of clarity.
Since it is recognized that there is sometimes
an overlap between product claims and process
claims , the practice before the U.K. Patent Officedoes not know substantial difficulties withprosecuting hybrid product/process claims(*12). The
Guidelines for Examination(*13)3 in Germany states“the generally unlimited choice of applicant as
regards the category of claims is thereby
restricted” and hybrid claims are allowed only if nomore suitable way is available. As to France, there
is a provision similar to Article 84 EPC, but no full
substantive examination as those of the EPC, theUnited Kingdom, and Germany, and no notable
court decision on this issue is known.
5

Handling of Continuing Applications by
Divisional Applications in Europe and theUnited States

The Japanese Patent Law does not impose any
special restrictions with regard to divisional
applications, so the divisions cause delay in
examination. Thus, there are strong demands for
restricting the number of times applications can bedivided.
(1) Situation in Europe(i) EPO
According to the EPC, in the case of amandatory divisional application to be filed in
response to a communication to notify an objection
based on lack of unity(Article 82 EPC), the parent
application is refused if the divisional application is
not filed within a period. On the other hand, avoluntary divisional application can generally be
filed at any time until the (final) approval under
Rule 51(4) of the Implementing Regulations to the
EPC (Rule 25(1) EPC). If an applicant declares thisapproval only with the proviso of amendments andthe Examining Division does not consent to theamendments, the examination procedure isresumed and a divisional application can be filed(A-IV-1.1.2 of the Guidelines for Examination in theEPO). A further divisional application can be filed
based on a divisional application. A divisional

application must not contain subject-matter which
does not extend beyond the content of the earlier(parent) application as filed (second sentence ofArticle 76(1) of the EPC). A divisional application
directed to subject matter originally contained in aclaim of the parent application, which was latercancelled during prosecution is only allowable if theapplicant has clearly stated that the deletion is
without prejudice to the filing of a divisional
application (EPO Board of Appeal Decision J 15/85).
In order to avoid double patenting, the same subject
matter must not be claimed in the parent anddivisional applications (Article 125 of the EPC).
According to the EPO’s comment, no abuse of
the divisional application system by applicants has
been found in particular.
(ii) The United Kingdom
In the United Kingdom, Rule 34 of the Patents
Rules provides for the period for putting applicationin order for acceptance, and according to Rule 24 of
the Patents Rules, a divisional application may be
filed not later than the beginning of the third month
before the end of the so-called acceptance period
for the parent application. Since a parent and all
divisional applications therefrom are likely toproceed to grant on or about the same date, adivisional application cannot be used to prolong theexamination procedure. The filing of a further
divisional application on an earlier divisional
application is not prohibited, but inhibited due tothe overall time limit for acceptance.
According to the UK Patent Office, no abuse of
the divisional application system by applicants has
been found.
(iii) Germany
In Germany, there are a mandatory divisional
application “separation (Ausscheidung)” filed in
response to a lack of unity objection (Section 34(5)of the Patent Law) and a voluntary divisional
application “division (Teilung)” that may be filed at
any time (Section 39 of the Patent Law). The“separation” lacks an explicit regulation in theGerman Patent Law. While “separation” may also
be declared in the appeal proceedings before theGerman Federal Patent Court, the consent of the
Senate is necessary. A divisional application itself
may be further divided. If a divisional application isdeliberately used to delay the examination, theapplicant may be impeded from enjoying the benefit.
The division of a granted patent during the
opposition proceedings pursuant to Section 60 of
the Patent Law is unique in Germany. After theGerman Federal Supreme Court took a stance thatthe complete disclosure of the original application(*11) Article 64 EPC, Rule 29(2) of the Implementing Regulations to the EPC, Section 60(1)(a)(b) of the U.K. Patents Act,
Section 9 of German Patent Act, Articles L.613-2 and L. 613-3 of the French Intellectual Property Code (Legislative Part),and Article R. 612-18 of the French Intellectual Property Code (Regulatory Part).
(*12) U.K. Patent Office, Manual of Patent Practice, Sec. 14.108 and 14.109.
(*12)(*13) German Patent and Trademark Office, Richtlinien für das Prüfungsverfahren (Prüfungsrichtlinien) 3.3.7.2.
(*13)
Patentkategorie.
● 37 ●IIP Bulletin 2002

may be used in a divisional application pursuant to
Section 60 of the Patent Law(*14), the number ofdeclarations of division in the opposition proceedings
increased. However, courts have tended to take amore restricted stance recently(*15).
The German Patent and Trademark Office’s
remarks have not pointed out any problem of abuseof the divisional application system.
(iv) France
In France, a divisional application (Article R.
612-33 of the Regulation) may be filed within atime limit in response to a lack of unity objection(Article L. 612-4 of the Legislation) and a voluntary
divisional application (Article R. 612-34 of theRegulation) that may be filed until the payment of
the issue fee. Since there is no substantive
examination in France, unless it is refused in thecase where it is prima facie non-patentable, theapplicant has no reason to file a divisional
application claiming the same subject-matter as
the original application in order to achieve are-examination of the invention.
(2) Situation in the United States
In the United States, a divisional application is
filed for a claim that has been found to be a separate
invention, and a continuation application is filed
irrespective of a requirement for restriction (alsoknown as a requirement for division). The scope ofclaims may be enlarged by a reissue patentapplication within two years from the grant of theoriginal patent. However, the recent decision of
CAFC has been prohibiting restoration of a portion
once abandoned in the examination procedure of
the application by a reissued patent application inrecent cases. There is no such rule for continuation
applications.
When an applicant wants to have theexamination further continued without increasing
the number of applications, he/she can have theexamination commence by viewing the application
as a new one by filing a request for continued
examination (RCE). On the other hand, when an
applicant wants to have the allowed claims patented
as it is and to have the rejected claims further
examined, a continuation application is filed.
The examiner may issue the requirement fordivision when claims are to be classified into
different classes. A requirement for division not
only reduces the burden the examiner bears fromhaving multiple inventions in a single application,
but is also necessary from the viewpoint of thetechnological expertise of the examiner. Thus,
education of the practices is conducted on
examiners to help them give requirements fordivision appropriately. Despite that the requirementfor division is often used by the examiners to fulfill
their quota, the USPTO welcomes continuation

applications that create no additional substantial
burden and RCEs that bring additional revenue, andsees no particular problem in it. As the standard forunity of the PCT is used in the national phase of aninternational application under the PCT, recently,
the proportion of applications for which a
requirement for division can be issued is decreasing
in some technical fields due to a growing number of
PCT applications brought into the national phase.
Therefore, whereas there seems to be considerable
unfairness in the quota system, the quota system
has never been reviewed since the launch of thesystem and is not likely to be in the future either. A
separate continuation application can cause burden
to the examiner, but the number of examiners canbe increased relatively easily if necessary.
Since the term of a patent has come to expire
in 20 years from the filing date in principle, thesubmarine patent is no longer considered topresent a special problem.

Ⅳ Basic Research for Amendmentof the Trademark Law
Revision of the definition provisions in theTrademark Law to correspond to the spread of
information networks is one of the important pillarsof the law amendment this time. Therefore,
research and analysis have been conducted on theprotection of trademarks on the Internet in Europe
and the United States in order to provide basic
material for the deliberation.
1

Handling of Trademarks on the Internet inEurope and the United States(1) Trademark Infringement by Using Signs
for Intellectual Property on the Internet
The trademark infringement that occurs whena trademark is used in relation to the downloadingof such intellectual property as computer programs
and music from the Internet (the same applies totransmission media other than the Internet) will be
studied below.
(i) Trademark infringement by use of a sign on
the Internet
First of all, it will be examined whether or nota trademark, being present in the form of data on
the Internetand only visible when it is displayed on
a computer monitor, constitutes trademark
infringement.
c Situation in Germany
In Germany, as no decision has yet been
issued by the German Federal Supreme Court
concerning the interpretation of infringing use of
trademarks pursuant to the current Trademark Law(*14) Bundesgerichtshof 1.10.1991 X ZB 34/89 (BpatG) Strassenkehrmaschine, GRUR 1992 Heft 1, pp. 38-40.
(*15) Bundesgerichtshof 14.5.1996 X ZB 4/95 (BpatG) Informationssignal, GRUR 1996 Heft 10, pp. 753-756.

(*14)
(*15)

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(Markengesetz) since it came into force, infringing
use is interpreted in the traditional sense as in the
old Trademark Law 1968 (Warenzeichengesetz).
According to this interpretation, trademark
infringement is found:－ if a sign is used in the course of trade;－ if a not completely irrelevant part of the publicconsiders the sign as a designation of the origin of
the goods or services; and－ if the signs and the goods or services are
identical or similar, or in the case of a trademark
with a reputation if the sign is identical with orsimilar to the trademark and the use of that sign
without due cause takes unfair advantage of, or isdetrimental to, the repute of such trademark.
It is generally acknowledged that neither a
corporeal nor spatial connection is necessary
between the trademark and the goods or services
for trademark infringement.
The current Trademark Law formulates
infringing use broader than the former Trademark
Law, setting forth that offering goods or services
under the sign constitutes trademark infringement(Section 14(3)(ii) and (iii) of the Trademark Law).
Since the function of trademarks is regarded as not
only designation of the origin of goods and services,
but also an advertisement and communication ofimages, many theories no longer support thetraditional concept, but hold a view that any use of asign for any economic activity could constitute an
infringing use(*16). According to this view, use of asign on the Internet, transmission of a sign bysound, or use of a sign for an advertising purpose
could also constitute trademark infringement.
A final interpretation under the current
Trademark Law based on a first Council Directiveon trademarks(*17) must wait for decisions of theGerman Federal Supreme Court and the European
Court of Justice. In the meantime it appears to berecommendable to apply the traditional interpretation
adopted by the German district courts.
It will be examined with regard to use of a
trademark on the Internet whether the requirement
under the traditional interpretation is fulfilled. The
industries concerned regard domain names used forInternet domains, links, and meta-tags as designationsof the origin and the use of mark as a trademark isaffirmed(*18). It is acknowledged that displaying a
trademark on a monitor also constitute trademark
infringement if it is considered to be designation of
the origin, as stated in the German Federal Patent
Court’s decision of the Vision case(*19). Neither use
for a decorative purpose nor use as a model, such asa car of car race simulation in a computer game, isassumed as designation of the origin and is likely
to constitute trademark infringement. However,such use constitutes trademark infringement
according to the up-dated interpretation. The current
Trademark Law explicitly clarify that advertisement
in any form can constitute trademark infringement.
When a downloaded trademark is transmitted tothe public in the form of sound, a designation of
the origin is traditionally denied, but the newinterpretation accepts trademark infringement.
The prerequisites of trademark infringement
under the current Trademark Law are:－ any sign which is identical with the trademark
in relation to goods or services which are identicalwith those for which the trademark is protected(Section 14(2)(i) of the Trademark Law);－ any sign where, because of its identity with, orsimilarity to, the trademark and the identity orsimilarity of the goods or services covered by thetrademark and the sign, there exists a likelihood ofconfusion on the part of the public (Section 14(2)(ii)of the Law); and－ any sign which is identical with or similar to a
trademark with a reputation and where the use ofthat sign without due cause takes unfair advantageof, or is detrimental to, the distinctive character or
the repute of such trademark (Section 14(2)(iii) of
the Law).
According to court decisions, a domain nameor a meta-tag is a product to be compared withgoods or services for which the infringed trademark
is registered, and the goods or services offeredunder the trademark on the website have to becompared with the goods or services for which thetrademark is registered(*20).
d Situation in the United Kingdom
In the United Kingdom, Section 10(1) of the
U.K. Trademarks Act provides that a person
infringes a registered trade mark if he uses in thecourse of trade a sign which is identical with thetrade mark in relation to goods or services which
are identical with those for which it is registered. If
a trademark is used on the Internet, it must be
used as a sign in the perception of the public.
According to court decisions, use of a trademark on
the Internet for offering goods or services can also
be a trademark infringement if it becomes
sufficiently clear for the industries in the United
Kingdom that the goods or services are offered in
the United Kingdom(*21).
(ii) Trademark used in an intangible form
Secondly, it will be examined whether or not(*17) First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade
marks, Official Journal L 040, 11.02.1989 pp. 0001-0007.
(*18) Landgericht Mannheim 7 O 291/97 1.8.1997 ARWIS, Computer und Recht 1998, p. 306.
(*19) Bundespatentgericht 18.4.2000 24 W (pat) 185/99 VISION, Marken Recht 11-12/2000, pp. 439-445.
(*16)(*20) Landgericht Düsseldorf 4.4.1997 34 O 191/96 epson.de, Computer und Recht 11-12/2000, pp. 439-445.
(*17)(*21) Trebor Bassett Ltd. v. Football Association, High Court Chancery
Div. 16.10.1996, [1997] FSR p. 211; Euromarket Design
(*18)
(*20)
Inc. v. Peters & Anr, High Court Chancery Div. 25.7.2000 HC1999
NO. 04494.
(*19)
(*21)
● 39 ●IIP Bulletin 2002

intangible intellectual property can be regarded as
goods or services in the meaning under trademark
law when a trademark is used for intangible
intellectual property .
c Situation in Germany
In Germany, many courts and theories upholdthe position that trademarks can only be registeredfor intellectual property in a corporeal form evenafter introducing service marks in 1979. The
German Federal Supreme Court held that astandard computer program is not a service, but canbe goods as long as it is stored in any corporeal
form(*22). According to this view,an opinion thatsoftware to be downloaded is a service could bedenied with an argument that intellectual property
products are mass-produced. On the other hand, an
opinion that it is goods would probably be alsodenied with an argument that temporary storage ofthe intellectual property products in computer
RAM cannot be regarded as a corporeal form ofintellectual property.
The current Trademark Law foresees thepossibility of service marks. Therefore, based on anargument that intellectual property products caneither be supplied in a corporeal form of goods orservices like licenses,(*23) most theories andseveral district courts have taken the view that
trademarks can be registered for intellectual
property products(*24). Furtheremore, it is also
argued that trademark protection is necessary forany economic activity and supply of intellectual
property cannot be excluded from trademark
protection. Thus, the current view of trademarks
for intellectual property will prevail.
d Situation in the United Kingdom
The issue above is not discussed so actively in
the United Kingdom. As the current Trademarks
Act provides that a sign can be used in relation to
goods and services, the aforementioned modern
concept adopted by many German courts and theories
could also be adopted in the United Kingdom.
(2) Preparatory or Abetting Act of Trademark
Infringement Concerning Information
Property
It will be examined next whether preparatory
or abetting act, such as possession of website data
including the data of a trademark, constitutes
trademark infringement.
(i) Situation in Germany
In Germany, the qualification of preparatory or
abetting act as trademark infringement depends on
mainly on the question of whether the supply ofintellectual property via the Internet is qualified as

goods or services.
If it is qualified as a service, offering oftrademark data on the Internet constitutes
trademark infringement under Section 14(3)(iii) of
the Trademark Law.
Section 14(3)(ii) and (iv) of the law stipulatethat mere possession of goods under a sign can be
trademark infringement, and it is a trademark forgoods that can be infringed by mere possession.
Therefore, if the supply of intellectual property via
the Internet is qualified as offering or selling ofgoods, the mere possession of the trademark data
included in the intellectual property data to besupplied via the Internet are qualified as trademark
infringement by viewing the trademark data to berelated to goods. Import and export of the data canalso constitute trademark infringement.
With regard to trademark data for advertising,
Section 14(3)(v) of the law stipulates that “use” of asign for an advertisement constitutes infringement.
Therefore, many theories deny that mere possessionof the sign constitutes trademark infringement(*25).
(ii) Situation in the United Kingdom
In the United Kingdom as well, assessment of
preparatory or abetting act constitutes trademark
infringement depends on the qualification of theintellectual property product as goods or services.
If it is qualified as a service, mere offer of the
trademark data via the Internet can constitutetrademark infringement without being downloaded
or displayed, because the Trademarks Act
stipulates that offer or supply of services under asign can constitute trademark infringement. Whenthe intellectual property supplied via the Internet isregarded as goods, there is a provision in theTrademarks Act stating that stocking of goods
under a sign can infringe a trademark. Export andimport of the data can also constitute trademark
infringement.
2

Handling of Goods Attaching Service
Marks in Europe and the United States

In Japan, there are no penal provisions under
the Penal Code for counterfeiting credit cards.
Therefore, it is being handled as a trademark
infringement issue in actual practice. Thus, there
have been requests for reviewing how such issue
should be handled in practice. It will be examined
whether a third person’s act of manufacturing or
selling goods by attaching a service markconstitutes trademark infringement in Europe andthe United States.

(*22) Bundesgerichtshof 2.5.1985 I ZB 8/84 Datenverarbeitungsprogramme, GRUR 1985, p. 1055 et seq.
(*23) Supra note 16, Fezer, Markenrecht; Ingerl/Rhonke, Margengesetz.
(*24) Oberlandesgericht Frankfurt am Main 15.7.1996 Gelbe Seiten; Landgericht Frankfurt am Main 15.10.1997 2/6 O 300/97
yellow pages; Oberlandesgericht München 30.4.1999 6 W 1563/99 FTP-Explorer; Landgericht München 25.5.2000 4 HK(*22)
06543/00 FTP-Explorer; Landgericht Dusselfdorf 25.11.2000 2a 0106/00 FTP-Explorer.
(*23)(*25) Supra note 16, Fezer, Markenrecht; Ingerl/Rhonke, Markengesetz.
(*24)

IIP Bulletin 2002(*25)

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(1) Situation in Germany
In Germany, with respect to the use in courseof trade as a prerequisite for trademark
infringement, it is generally acknowledged that it issufficient if the user has the intention to use thetrademark. Therefore, an act itself of affixing of aservice mark to goods can infringe the service
mark if it is intended to use the mark affixed on the
goods for for offering the goods for sale.
It is generally acknowledged that anassessment of the liklyhood of confusion implies
some interdependence in particular between thesimilarity of the trademarks and the similarity of
the goods or services. A lesser degree ofsimilarity between the goods or services may beoffset by a greater degree of the similarity
between the marks, and vice versa(*26). Consequently,
infringement of service mark by affixing it to goods
depends on whether the trademarks are identical orsimilar and whether the goods and services are
similar so that the public can confuse the marks.
The problem is whether the services and goods arelooked upon as being similar by the industries
concerned.
In the German Federal Supreme Court andtheories, it is generally acknowledged that anassessment of a similarity between goods andservices must be based on the same principle thatapplied when assessing the similarity of one goods
or service with another(*27). A similarity of goods
and services is assumed if the industries concerned
who take into account all relevant economic factors,
draw the conclusion that the goods and services areoffered by the same company or by companies
economically-linked(*28). It is decided in general that
there is no similarity of goods and services if thegoods are only means for providing the services
or if the goods are the result of the services, unlessthe goods are offered in a manner economicallyindependent of the services as viewed by the
public(*29). The cases in which the court foundsimilarity between the goods and the services
include the KNIPPING case, the MEDICE case,and the White Lion case(*30). On the other hand,cases in which the court denied similarity between
the goods and the services include the DEUS caseand the MICROTONIC case(*31).
A well-known service mark can be infringed if:
an identical or similar trademark is attached togoods; it is unfairly used in such a manner that its
reputation may be transferred to the goods to which
the trademark is attached; and the use of the
trademark harms the capacity to distinguish and therepute of the service mark. An identity or similarityof the goods or services is not necessary. In
contrast to the similarity of the goods and theservices, taking unfair advantage of a well-known
service mark is already possible even if the goods
and services are only very remotely similar.
However, an image transfer was denied in somedecisions such that the image of a fast-foodrestaurant cannot be transferred to paint andvarnishes, T-shirts, or other clothing.(*32) Detrimental
use is only assumed if there is certain similarity
between the services and goods. To assume
similarity, mereassociation is sufficient, and very
well-known trademarks, such as Coca Cola, Rolls
Royce, and Mercedes, must be respected for all
goods or services. If a service mark is used forpoor-quality products, or if the using company has abad reputation, or if the products do not fit with theimage of the service mark, the use is regarded to be
detrimental to the reputation.
(2) Situation in the United States
In the United States, while mere reproductionof a trademark or a service mark does not by itself
constitute trademark or service mark infringement,
the Lanham Act imposes liability for infringementof a mark on any party, including any manufacturer,
who uses an infringing mark in connection with thesale, offering for sale, distribution, or advertising ofgoods or services when such use is likely to cause
confusion. Those who are not directly responsible
for the sale of goods or services to the consuming
public are liable as contributory infringers. If amanufacturer continues to supply a product to one(*26) European Court of Justice 29.9.1998 C-39/97 Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc., formerly Pathe
Communications Corporation, Reference for a preliminary ruling: Bundesgerichtshof - Germany, European Court Reports
1998 I-5507.
(*27) Bundesgerichtshof 21.1.1999 I ZB 15/94 (BpatG) Canon II, GRUR 1999 Heft 8-9 pp. 731-733; Bundesgerichtshof
6.12.1990 I ZR 249/88 MEDICE, GRUR 1999 Heft 4 pp. 317-318; Werner Althammer/Paul Ströbele/Rainer Klaka,
Markengesetz, 2000, p. 246, Carl Heymanns; supra note 13, Ingerl/Rhonke, MarkenG, p. 440 et seq.
(*28) Bundesgerichtshof 23.2.1989 I ZB 11/87 (BpatG) MICROTONIC, GRUR 1989 Heft 5 pp. 347-349; supra note 26, thecourt decision for the Cannon case.
(*29) Bundesgerichtshof 7.11.1985 I ZB 12/84 (BpatG) RE-WA-MAT, GRUR 1986 Heft 5 p. 380 et seq.; Bundesgerichtshof
11.2.1999 I ZB 16/97 (BpatG) White Lion, GRUR 1999 Heft 7 p. 586-587.
(*30) Bundespatentgericht 30.11.1983 27 W (pat) 132/82 KNIPPING, GRUR 1984 Heft 4, p. 77; supra note 27, the court
decision for the MEDICE case. Supra note 29, the court decision for the White Lion case.
(*31) Bundespatentgericht 29.5.1984 25 W (pat) 399/82 DEUS, GRUR 1985 Heft 1 p. 49; supra note 28, the court decision for
the MICROTONIC case.
(*26)(*32) Oberlandesgericht Düsselfdorf 14.1.1997 20 U 5/96 Mac Paint, WRP 1997, pp. 588-592; Oberlandesgericht München
(*27)
(*30)
22.9.1994 6 U 6371/93 McDonald/McShirt, Mitt, 1996, pp. 92-96;
Oberlandesgericht München 21.9.1995 29 U 5214/94
(*28)
(*31)
McDonald’s,
GRUR
1996
Heft
1,
pp.
63-66.
(*29)(*32)● 41 ●IIP Bulletin 2002

whom it knows or has reason to know is engaging
in infringement of a trademark or a service mark,the manufacturer is contributorily responsible forany harm done as a result. A manufacturer may also
be liable for direct infringement of a service mark if
it sells a product bearing a mark that is the same orsimilar to a mark already in use for related goods. It
is well established that confusion is likely to occur
from the use of the same or similar marks for goods
and for services. Accordingly, a manufacturer who
sells coffee cups bearing a mark that is identical orsimilar to a mark already in use for restaurant
services would likely be found to be infringing therestaurant’s service mark.
Furthermore, everyone who participates in the
preparation, distribution, or sale of infringing goods
or services is potentially liable for trademark
infringement. Therefore, the seller of the tableware
may be found liable as a contributory infringer,rather than a direct infrnger, if it was induced tooffer the products by the actual manufacturer of
the tableware. Related court decisions include
Kentucky Fried Chicken Corp. v. Diversified
Packaging Corp. 183 USPQ 148 (S.D. Fla. 1974) andCentury 21 Real Estate Corp. v. R.M. Post, Inc., 8
USPQ2d 1614 (N.D. III 1988).
3

Handling of Counterfeit Credit Cards in
Europe and the United States

It will be examined whether distribution or useof counterfeit credit cards constitute trademark
infringement or violate any other laws in Europe
and the United States.
(1) Situation in Germany
When a credit card has been copied anddistributed to a third person, “use in the course of
trade” under the Trademark Law must be assumed
since the activity serves business purposes,
although these purposes are illegal. In the case of
copying a credit card together with the trademark
and purchasing goods with this card for a privateuse, it is doubtful if this activity cannot be
considered an economic activity, as it does notbelong to business.
With regard to designation of the origin, using
the trademark on a copied credit card forpurchasing goods does not use the trademark forgoods or services, so the industries concerned will
not regard the trademark as the designation of theorigin. However, a trademark on a credit card thathas been distributed to a third person by pretending

to enable use of the credit service would beconsidered as designation of the origin by theindustries (*33).
In the case that a trademark is used foroffering alleged credit service by a copied credit
card, the trademark is identical or similar and theservice is identical as viewed by the public.
Therefore, likelihood of confusion, unfair advantage,
and detriment to the distinctiveness and thereputation of the well-known service mark would
be found for the use of the trademark.
The design of the credit card or the trademark
can be protected by copyright law, design law,or unfair competition law if it is not used for a
private purpose. An act of using a counterfeit
credit card for purchasing goods and an act ofselling or distributing a counterfeit credit card to athird person are, if it causes any damage,considered as fraud with the corresponding penal
consequences.(*34) It is also possible to claim
compensation for the damage pursuant to the laws
on torts.
(2) Situation in the United States
In the United States, counterfeiting is the actof producing or selling a product with a mark that is
an intentional reproduction of a genuine trademark(15 U.S.C. 1116(d)(1)(B)). Counterfeiting a credit
card results in a product, i.e., a counterfeit credit
card, which may be used in securing credit services.
Because credit cards themselves are subject totrademark protection in International Class 16,
producing a counterfeit credit card results intrademark infringement under the Lanham Act.
The Trademark Counterfeiting Act(*35) of 1984
and the Anticounterfeiting Consumer Protection
Act(*36) of 1996 also address trafficking in counterfeit
trademark goods including credit cards. These acts
also amend the Lanham Act to create stronger
remedies in civil cases involving the intentional use
of a counterfeit trademark. The acts provide amechanism for obtaining statutory damages, treble
damages, and the attorney’s fee (15 U.S.C. 1117).
In order to be both applicable to criminal and civil
actions, the Anticounterfeiting Consumer Protection
Act also amends the RICO Act(*37) to add certain
intellectual property offenses as predicate offenses
under the RICO Act, and it specifically adds
languageproscribing trafficking in counterfeit goods
and services bearing counterfeit marks (18 U.S.C.
2320). The actual items prohibited under the RICO
Act for civil and criminal actions are:(a) use of proceeds of racketeering activity to(*33) Bundesgerichtshof 22.6.1962 I ZR 27/61 Strumpf-Zentrale, GRIR 1962 pp. 647-650; Bundesgerichtshof 3.4.1981 I ZR
72/79 Champion du Monde, GRUR 1981 p. 563.
(*34) The main corresponding crimes are assumed to be (a) computer fraud (a fine or imprisonment of no more than five years)
and (b) abuse of credit cards (a fine or imprisonment of no morethan three years) in Section 263 “Fraud” of German Penal(*33)
Code (Strafgesetzbuch).
(*34)
(*35)
(*35) Trademark Counterfeiting Act 1984, Pub. L. No. 98-473, Tit. II,§1502(a), 98 Stat. 2178 (1984).
(*36) ACPA - Anticounterfeiting Consumer Protection Act, Pub. L. (*36)
No. 104-153, 110 Stat. 1386 (1996).
(*37)

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acquire an interest in an enterprise;(b) acquisition of an interest in an enterprisethrough a pattern of racketeering activity;(c) conduct or participation in the affairs of anenterprise through a pattern of racketeering
activity; and(d) conspiracy to violate subsection (a), (b), or (c).
The report of this study includes the following
in its reference material section: a list of foreign
constitutional laws that mention IPR; a list ofdamages awarded in IPR disputes; analysis of thedamages awarded in IPR disputes, a list of court
decisions related to indirect infringement ofindustrial property rights in chronological order; alist of court decisions related to indirect
infringement of patent rights and utility modelrights by case; patterns of joint acts in patent
infringement and their legal effects; a list of court
decisions related to joint acts in infringement ofpatent rights and utility model rights by case; a listof cases concerning trademark infringement on theInternet in Europe and the United States; atentative Japanese translation of commentaries on
Sections 9 and 10 of the German Patent Law; atentative Japanese translation of treatises on
German Trademark Law; and the provisions oftreaties and laws that are concerned.
（Senior Researcher: Takeyuki Iwai）(*37) Racketeer Influenced and Corrupt Organizations Act: a law for regulating penetration of crime organizations inbusinesses.
● 43 ●IIP Bulletin 2002