Summary
Background
Facts
JPO decision
IP High Court decision
Comment

Summary

On June 9 2015 the IP High Court upheld the Japan Patent Office (JPO) trial decision rejecting the unfair use cancellation action brought against the registration for the SENTCOMEX trademark, used for the designated goods "clothing, footwear, clothes for sports and special footwear for sports" in Class 25. The court ruled that the defendant's use of its SENT COMEX trademarks – which the plaintiff alleged to be similar to its own COMEX trademark used for mules and sandals – did not cause confusion with the plaintiff's goods. Therefore, the court ruled that the SENTCOMEX registration should not be cancelled under Article 53(1) of the Trademark Law (127/1959, as amended).

Background

Article 53(1) of the Trademark Law provides that:

"Where a holder of an exclusive right to use, or a non-exclusive right to use, uses a registered trademark in connection with the designated goods or designated services or in connection with goods or services similar thereto, or a trademark similar thereto, in a manner that misleads as to the quality of the goods or services or causes confusion in connection with the goods or services pertaining to the business of another person, any person may file a request for a trial for rescission of the trademark registration; provided, however, that this shall not apply to the case where the holder of the trademark right was not aware of the fact and used due care."

Facts

Plaintiff Kabushiki Kaisha Bi Milan owned the trademark COMEX (in English), used for the designated goods "footwear (excluding special footwear for sports), umbrellas, canes and their parts and accessories thereof" in old Class 22 (registered on November 26 1982 as Registration 1548890; see figure below).

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On March 12 2012 the defendant filed an application with the JPO for the SENTCOMEX mark, to be used for the designated goods "clothing, footwear, clothes for sports and special footwear for sports" in Class 25. It matured to registration on August 24 2012.

KK State Site and KK Star Queen – companies for which the defendant acted as representative director and director, respectively – sold mules and sandals under seven different SENT COMEX marks from around March 2013 to August 2013 (see figures below).

The defendant thus used a trademark in its business activities that differed slightly from the mark that it had actually been granted (it added a space between 'SENT' and 'COMEX'). The court distinguished between the two in its judgment by referring to the marks used by the defendant (SENT COMEX) as the "used trademarks" and the mark officially granted to the defendant (SENTCOMEX) as the "subject trademark".

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The plaintiff alleged that the defendant's used SENT COMEX trademarks caused confusion with its own COMEX trademark and on October 7 2013 demanded a trial for cancellation of the subject SENTCOMEX mark under Article 53(1) of the Trademark Law.

JPO decision

On December 15 2014 the JPO rejected the plaintiff's demand for a trial hearing. The JPO held that:

  • the COMEX trademark was not well known among consumers;
  • the SENT COMEX trademarks were not similar to the COMEX trademark; and
  • consumers would not associate the SENT COMEX trademarks with the plaintiff's goods; thus, there was no likelihood of confusion as to the goods' origin.

The JPO accordingly held that no cancellation should be admitted under Article 53(1) of the Trademark Law.

The detailed reasoning of the JPO was as follows.

Holders of non-exclusive use rights
As KK State Site and KK Star Queen were companies for which the defendant – the owner of the SENTCOMEX trademark – acted as representative director or director, they were considered to be non-exclusive use rights holders of the SENTCOMEX mark.

Similarity between SENT COMEX trademarks and SENTCOMEX trademark
In comparing the defendant's used trademarks (the SENT COMEX trademarks) and its registered trademark (the SENTCOMEX trademark), the JPO held that the only difference between them was the existence of a space between the words 'SENT' and 'COMEX' and the Katakana indication '????????' ('Sent Comex'). Thus, the SENT COMEX trademarks and SENTCOMEX trademark were considered to be similar trademarks with the common pronunciation '????????' ('Sent Comex').

Goods bearing SENT COMEX trademarks
The SENT COMEX trademarks were used for sandals, mules and pumps, which belonged to the footwear category included in the designated goods of the subject SENTCOMEX trademark. Therefore, the SENT COMEX trademarks were deemed to be similar to the SENTCOMEX trademark and used with respect to goods that were similar to the designated goods for the SENTCOMEX trademark.

Likelihood of confusion between SENT COMEX trademarks and plaintiff's goods
Familiarity of COMEX trademark
The JPO held that although the COMEX products handled by the plaintiff had been featured in several fashion magazines (eg, Vi Vi and Ray), the COMEX trademark and its related products were not widely known among consumers in the field of ladies' shoes. There was no evidence to indicate that the plaintiff had advertised and promoted the COMEX trademark and its related products other than in those magazines. Therefore, the JPO held that the COMEX trademark was not widely recognised among consumers as indicating the plaintiff's goods.

Similarity between SENT COMEX trademarks and COMEX trademark
The JPO held that the word 'COMEX' (in English and Japanese Katakana) – as included in the SENT COMEX trademarks – was not widely known among consumers as an indication of goods sold by the plaintiff or persons related thereto. Thus, it could not be recognised as giving a strong indication of origin. The SENT COMEX trademarks produced the pronunciation '????????' ('Sent Comex') by virtue of their total structure and did not evoke a specific concept. In view of this, the JPO ruled that the SENT COMEX trademarks and the COMEX trademark were not confusingly similar in respect of appearance, pronunciation or concept.

Likelihood of confusion as to origin
As the COMEX trademark was not widely recognised among consumers as an indication of the plaintiff's products and was not confusingly similar to the SENT COMEX trademarks, the JPO held that even if KK State Site and other non-exclusive rights holders had used the SENT COMEX trademarks in respect of the same type of goods as COMEX products (eg, sandals, mules and pumps), it was unlikely that dealers or consumers would associate them with the plaintiff's COMEX products and trademark. As such, the JPO held that there was no likelihood of confusion as to origin.

IP High Court decision

The defendant appealed to the IP High Court, which upheld the JPO trial decision on June 9 2015. The court's reasoning was as follows.

Familiarity of COMEX trademark
Due to the nature of the case, the IP High Court first addressed the defendant's second stated reason for cancellation, regarding the familiarity of the COMEX trademark.

The COMEX trademark was registered on November 26 1982 and it was assumed that the sale of shoes bearing the trademark commenced around that time. In light of the manner in which the COMEX trademark was introduced in various magazine articles, COMEX products were considered to be known only in limited areas.

Sales of COMEX products (limited to shoes) were as follows for each fiscal year:

  • 2009 – 11,488 pairs (Y152,960,887);
  • 2010 – 12,544 pairs (Y167,609,515);
  • 2011 – 11,715 pairs (Y156,518,654); and
  • 2012 – 11,485 pairs (Y153,454,641).

In comparison, total sales of ladies' shoes in Japan were Y365 billion in 2011 and Y373 billion in 2012, while the sales forecast for 2013 was Y379 billion.

COMEX products were sold in 54 shops throughout Japan, including the BE Milano head office (which is directly managed by the plaintiff), the Osaka Kita-shinchi shop, the Nakasu-Oodoori shop and the NKG building shop. However, COMEX products were not necessarily sold in all famous department stores in Tokyo and Osaka.

Moreover, although the COMEX trademark was affixed to certain types of ladies' shoe – in particular, high-heel shoes, pumps and sandals – the court noted that it was not used for various other types of ladies' shoe (eg, trainers and boots).

In order for the trademark to be considered widely known to female consumers in general, the court held that the following criteria must be met:

  • It must be aggressively advertised and promoted;
  • The shops selling the relevant products must be very high in number;
  • Attractive presentation methods must be adopted with regard to the trademark; and
  • The trademark must be frequently featured in mass media.

In view of these criteria, and although the COMEX trademark had obtained a certain degree of familiarity, the court could not admit that it had become famous in the Kansai area or throughout Japan. As such, it upheld the JPO's finding that the COMEX trademark lacked sufficient familiarity.

Similarity between COMEX trademark and SENT COMEX trademarks
The court subsequently addressed the defendant's first stated reason for cancellation, regarding the similarity between the COMEX trademark and the SENT COMEX trademarks.

COMEX trademark
The COMEX trademark comprised the boldfaced English letters 'COMEX', which constituted one word. The letters were arranged without spaces between them and at an equal interval. Thus, it simply produced the pronunciation 'COMEX'. The court recognised this as a coined word that did not evoke a specific concept.

SENT COMEX trademarks
The court considered the used SENT COMEX trademarks to be equivalent to the subject SENTCOMEX trademark. Although there was a space between 'SENT' and 'COMEX' in the used trademarks, the court understood them to be the same in practice as the subject trademark. The words 'SENT' and 'COMEX' in the used trademarks were written in the same font and size, and were thus recognised as a whole. Moreover, 'SENTCOMEX' was pronounced as two consecutive words without pause. It evoked no specific concept, as the words were recognised consecutively.

In view of these observations, the court recognised the used SENT COMEX trademarks as a whole in terms of appearance, finding that they could be pronounced consecutively as '????????' ('Sent Comex'), but did not evoke a specific concept.

The court noted that the 'SENT' portion evoked no particular pronunciation or concept which related to the designated goods; further, the 'COMEX' portion was not particularly distinctive. Therefore, the court held that the 'COMEX' portion did not give consumers a strong impression as to the origin of the goods; nor did the 'SENT' portion evoke any relation to the origin of the goods. The court accordingly refused to accept that the 'COMEX' portion could be isolated within the SENT COMEX trademarks.

The court thus rejected the plaintiff's claim and upheld the JPO decision.

Likelihood of confusion
The court compared the SENT COMEX trademarks with the COMEX trademark and made the following observations:

  • The difference in their appearance was the existence of the word 'SENT'.
  • The difference in their pronunciation was the existence of the sound '???' ('sent').

These distinctions evoked no specific concept. Therefore, the court ruled that there was no risk of confusion between the SENT COMEX trademarks and the COMEX trademark; nor was there any likelihood that consumers would mistakenly identify the SENT COMEX trademarks as being economically related to the plaintiff's COMEX products. Even if the COMEX trademark were considered to have a degree of familiarity, the court refused to accept that only the 'COMEX' portion of the SENT COMEX trademarks could be separately observed.

Conclusion
The court held that the plaintiff's arguments had no merit and accordingly dismissed its claim.

Comment

While some court precedent exists with regard to Article 53(1) of the Trademark Law, few judgments have actually admitted its application. This is unsurprising in light of the fact that a petitioner under Article 53(1) must prove that the relevant rights holder intended to cause confusion with or misunderstanding of the petitioner's goods or services. The case at hand is thus one of many in which the court has refused to apply Article 53(1).

Although the plaintiff in this case asserted that the defendant had the intention of unfair use – that is, to cause confusion with or misunderstanding of the COMEX goods, such as by deliberately placing a space between 'SENT' and 'COMEX' in its used trademarks and affixing the registered trademark symbol after the word 'COMEX' – the court did not accept this argument.

Therefore, it is hoped that future court cases will clarify the circumstances in which trademark use is considered to cause confusion with or misunderstanding of a petitioner's goods or services under Article 53(1) of the Trademark Law.

For further information on this topic please contact Eiichi Fukushima at Nishimura & Asahi by telephone (+81 3 5562 8500) or email (e_fukushima@jurists.co.jp). The Nishimura & Asahi website can be accessed at www.jurists.co.jp.

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