June 30, 2016

Trademark News

JPO Tells Legitimate Owners Not to Be Afraid of Bad Faith Trademark Filings

On May 17, 2016, the Japan Patent Office ("JPO") made an announcement on bad faith trademark filings, telling legitimate trademark owners not to give up filing of new applications just because there are already prior trademark applications filed by third parties in bad faith.

Recently, some applicants ("BF Applicants") are filing thousands of Japanese trademark applications ("BF Applications") for trademarks ("BF Marks") already used (but not yet filed) by legitimate trademark owners. In case of most BF Applications, the BF Applicants do not pay the official filing fee to the JPO. Also, the BF Applicants often file a divisional application (again, without paying the filing fee) before the original BF Applications are dismissed, in order to retain the priority date. In some cases where the BF Applicant finds that there is a value in its BF Application (e.g. the BF Mark may be asserted against the legitimate owner), the BF Applicant moves to pay the official fees to have the BF Mark registered by the JPO.

In case of a trademark application filed without payment of filing fee, the JPO's practice is to: (i) wait for several months before the JPO dismisses the application due to non-payment; (ii) disclose the information about the application in the online database service "J-PlatPat"; and (iii) until the application is dismissed, cite the application against a later-filed application for an identical or similar trademark, and do not allow the later-filed application to proceed to registration unless such citation is somehow resolved. The BF Applicants misuse such JPO's practice and file numerous BF Applications without paying the filing fees, resulting in trademark applications filed by legitimate owners being blocked by the BF Applications. This further discourages a legitimate owner from filing a new trademark application in the first place when there is already a BF Application that is identical or similar to the legitimate owner's trademark.

The Trademark Act of Japan provides legitimate owners with some measures that may be taken against registration of BF Marks, as explained in the latest TM5 Seminar presented by the JPO on the Japanese Law. If the legitimate owner's trademark is well-known somewhere in the world at the time of filing of the BF Application, the legitimate owner is able to take typical and traditional measures such as an opposition and/or an invalidation action against registration of the BF Mark. Even if the trademark is not well-known at the time of filing of the BF Application, there is still a possibility of invalidating the registration of the BF Mark on the ground that the BF Applicant lacks intent to use the BF Mark, as decided in the IP High Court judgment dated May 31, 2012. This judgment also suggests that if a BF Application was filed fraudulently, the registration of the BF Mark may also be invalidated on the ground that it is against public interest, public morality or international fidelity. (Please see the material prepared by the JPO, available at http://tmfive.org/files/App-7_JPO-Bad-faith-seminar.pdf.) After this IP High Court judgment, the JPO is now able to dismiss the BF Applications with confidence. Once the JPO dismisses such BF Application, such Application will be deemed as not being filed from the beginning and thus will not be cited against later-filed applications.

However, one problem is that we are able to file oppositions and invalidation actions only after the BF Mark is registered. As mentioned above, most BF Applications do not reach that stage due to the BF Applicants' failure to pay the filing fees, and we have no measures for attacking the BF Applications that have not yet been registered.

Also, even if the BF Mark is registered, it takes some time for oppositions and/or invalidation actions to conclude, and thus registration of the trademark application filed by the legitimate owner may be delayed. Moreover, even if we file an opposition and/or an invalidation action against a registration of the BF Application, the BF Applicant might try to vigorously defend the registration, in which case it could take more than one year or two years to resolve the issue. Meanwhile, the JPO does not have the power to dismiss or reject trademark applications, just because they are filed by BF Applicants. The JPO is obliged to register the BF Marks, as long as it suffices all requirements for registration.

The JPO's announcement mentioned above suggests that the JPO is willing to support legitimate owners within its discretionary power, if BF Applications become an issue. The BF Applicant's targets are unregistered trademarks of famous persons and/or entities who have already succeeded in certain business areas, in particular, who have just started new businesses with unregistered trademarks before becoming well-known. The aim of the BF Applicant is to obtain a prior right of the yet-to-be-registered famous trademark with little cost, so that they earn money from the legitimate owner of the trademark.

If an applicant finds that there is a prior application for an identical or similar trademark that is likely to be a BF Application, the applicant should file an application for its trademark anyway to acquire a prior right following the BF Application. After receiving a JPO office action that cites a BF Application, the applicant should respond to the JPO office action by explaining that the cited mark is a BF Mark and request to wait until the BF Application is dismissed. As the JPO is aware of the BF Applicant, it is likely that the applicant may relatively easily argue that the cited mark is a BF Mark. In addition, direct dialogue with the JPO examiner will help to check the status of the BF Application, since the BF Applicant sometimes moves to pay for a BF Application if the BP Applicant realizes its value, and because it usually takes a few months before the J-PlatPat is updated to reflect the most recent information. Although it would take more time for a legitimate owner to register its trademark compared to other trademarks that are not threatened by BF Marks, it is likely that a legitimate owner will eventually be able to obtain registration on its trademark in Japan in most cases.

Most importantly, in order to avoid this kind of trouble, it is strongly recommended that a legitimate owner files an application for its trademark before the owner starts using the trademark publicly.

(Written by Ms. Mizue Kakiuchi (Attorney at Law, Patent Attorney))