February 1, 2017
Trademark News
Tokyo District issues preliminary injunction against Defendant's operation of coffee shop that has similar exterior as Plaintiff's coffee shops
On December 19, 2016, the Tokyo District Court issued a preliminary injunction against the Defendant's operation of a coffee shop, finding that the exterior of the Defendant's coffee shop is similar to the exterior of the Plaintiff's well-known coffee shops. (Tokyo District Court Case No. 2015 (yo) 22042).
Background
The Plaintiff (Komeda Co., Ltd.) is a company that operates coffee shops named "Komeda Coffee Shop." After the first shop was opened in Nagoya City in 1968, the Plaintiff continued to open new shops in various areas. As of May 2015, the total number of the Plaintiff's coffee shops in Japan became 628, and the Plaintiff became the third largest coffee shop chain in Japan.
There are two types of shops in the Plaintiff's coffee shops, namely: (a) a SC mall-type shop, which is located in a part of shopping mall or a commercial building; and (b) a road side-type shop, which is a stand alone building that faces a major road in a suburban area. As of September 2015, 496 shops of the Plaintiff were road side-type shops, among the total of 645 shops.
The Defendant (Minosuke Corporation) is a company that operates a television game business and an entertainment business. In 2013, the Defendant asked the Plaintiff for permission to open a "Komeda Coffee Shop" in Wakayama City as the Plaintiff's franchisee. The Plaintiff rejected the Defendant's request, since there was already another franchisee that operated a coffee shop in the same area.
In August 2014, the Defendant opened a coffee shop named "Masaki Coffee" in Wakayama City. The exterior of the Plaintiff's road side-type shops and the exterior of the Defendant's shop had some common features (described below).
Left: Plaintiff's coffee shop
Right: Defendant's coffee shop
Both copied from: http://v4.eir-parts.net/v4Contents/View.aspx?cat=tdnet&sid=1428023
Immediately after the Defendant opened the shop, the Plaintiff began to receive many inquiries from customers regarding the relationship between the Plaintiff's coffee shops and the Defendant's coffee shop. The Plaintiff made an announcement on its website that the Defendant's coffee shop has no relationship with the Plaintiff. The Plaintiff also sent a letter to the Defendant in August 2014, requesting the Defendant to stop the operation of its coffee shop. However, the Defendant continued to operate the shop.
On May 14, 2015, the Plaintiff filed a lawsuit seeking permanent injunction and a request for preliminary injunction against the Defendant before the Tokyo District Court, asserting that the Defendant's operation of the coffee shop and combination of drinks and dishes constitutes unfair competition under Article 2(1)(i) of the Unfair Competition Prevention Act of Japan (the "UCPA"). Article 2(1)(i) of the UCPA provides that an act of using an indication of goods or business ("Indication of Goods") that is identical or similar to a well-known indication of goods or business of another person in a manner that would cause confusion constitutes unfair competition and is subject to injunction and damages. An Indication of Goods refer to a name, trade name, trademark, mark, container or packaging for goods or any other indication of a person's goods or business.
The main points of disputes were: (i) whether the exterior of the Plaintiff's coffee shops is protected as an "Indication of Goods" under the UCPA; (ii) whether the exterior of the Plaintiff's coffee shops is well-known; (iii) whether the Defendant's shop is similar to the Plaintiff's shop; and (iv) whether there is a likelihood of confusion.
Judgment
Regarding the issue of whether the exterior of the Plaintiff's coffee shops is protected as an "Indication of Goods" under the UCPA, the Tokyo District Court ruled that, if: (a) an exterior of a shop has a distinctive character that is different from other shops in the same business; and (b) the exterior of the shop can be found as well-known to customers as indicating a specific operator's business (by considering the term of continuous and exclusive use of such an exterior of the shop by the specific operator, advertisements including such exterior of the shop, and so on), the exterior of the shop can be protected as an "Indication of Goods."
The Tokyo District Court found that the exterior of the Plaintiff's road side-type shops has a distinctive character that is different from other coffee shops: namely, elements such as a bay window and a brick wall under a gable roof, a big lattice window and a red peaked tent, are distinctive and different from the exterior of other coffee shops.
The Tokyo District Court also found that the exterior of the Plaintiff's shop is well-known to customers as indicating the Plaintiff's business, since:
- the exterior of the Plaintiff's shops has been standardized;
- the Plaintiff and its franchisees have continuously and exclusively used the exterior of the shops that has distinctive characters stated above; and
- the Plaintiff's shops were often introduced in TV programs, newspapers and magazines, and in one TV program the narrator actually gave a comment, "All Komeda's shops located anywhere are log cabin-style shops using real woods and bricks."
The Plaintiff also asserted that the combination of drinks and dishes used in the Plaintiff's shops are also protected as an "Indication of Goods". However, the Tokyo District Court denied this assertion, holding that the combination of drinks and dishes was not well-known to customers as an indication of the Plaintiff's business.
Regarding the issue of whether the exterior of the Plaintiff's coffee shops is well-known, the Tokyo District Court found that the exterior of the Plaintiff's shop is well-known to customers, as already explained above.
Regarding the issue of whether the Defendant's shop is similar to the Plaintiff's shops, the Tokyo District Court found that the exterior of the Defendant's shop is similar to the exterior of the Plaintiff's shops, since the Defendant's shop had the same characters as the Plaintiff's shops (such as a bay window and a brick wall under a gable roof, a big lattice window, and a red peaked tent). The Court found that although the name of the shops are different, such a difference does not affect the conclusion.
Finally, regarding the issue of whether there is a likelihood of confusion, the Tokyo District Court found that there is a likelihood of confusion, since the exterior of these shops are very similar, and many customers actually inquired the relationship between the Plaintiff and the Defendant.
Accordingly, the Tokyo District Court found that the Defendant committed an act of unfair competition, and issued a preliminary injunction against the Defendant.
Comments
This is the first case that a Japanese court clearly held that an exterior of a shop can be protected as an "Indication of Goods" under the UCPA, and actually ordered an injunction against the use of a shop with a similar exterior.
Generally speaking, trade dresses (such as an exterior of a shop) are not protected in Japan under trademark law. A person who wish to protect his or her trade dress usually must rely on the UCPA (as the Plaintiff in the current case did).
In a previous case in which a restaurant owner asserted that the use of a similar exterior of a restaurant constitutes an unfair competition (Osaka District Court judgment issued on July 3, 2007), the restaurant owner lost since the court found that the exterior of the defendant's restaurant was dissimilar to the plaintiff's restaurant.
As the judgement states, in the current case the Defendant's shop seems very similar to the Plaintiff's shops. It is unclear from this judgment whether a Japanese court would allow an injunction in a case where merely a part of distinctive characters is used in the defendant's shop. Nevertheless, the judgement is worth noting, since the judgement clearly states that an exterior of a shop itself can be protected as an "Indication of Goods," and has established the criteria explained explained above.
The Court also mentioned that the Plaintiff obtained the following Japanese trademark registration regarding the exterior of the shops, after the Plaintiff filed the current action before the Tokyo District Court.
Japanese Trademark Registration No. 5851632
The Plaintiff did not assert trademark infringement in this case, but it is possible that the fact that the Plaintiff obtained a trademark registration helped the Court in finding that the exterior of the Plaintiff's shops is protected as an "Indication of Goods."
Written by: Ms. Kiyoko Nakaoka (Attorney-at-law, Patent Attorney)