Introduction
Previous Trademark Act and Design Act
Revised Trademark Act and Design Act
As a result of the covid-19 pandemic, the importance and presence of e-commerce is increasing globally, which has led to not only more genuine goods but also more counterfeit goods being sent directly to consumers. Some such counterfeit goods are imported for private use, while others are disguised as for private use but are instead imported with the intent of further distribution in Japan.
While border enforcement measures in Japan are generally effective, the border enforcement regulations and practices were unable to effectively address the changing trends in e-commerce transactions and the increase in counterfeit goods being imported into Japan for private use. In May 2021, the Trademark Act and the Design Act were revised to strengthen the effectiveness of border enforcement and customs seizures of counterfeit goods infringing upon trademark and design rights.
Previous Trademark Act and Design Act
Prior to the revision, article 2-(3)-(ii) of the Trademark Act read as follows:
(3) "Use" with respect to a mark as used in this Act refers to any of the following acts:
(ii) assigning, delivering, displaying for the purpose of assignment or delivery, exporting, importing, or providing through a telecommunications line, goods with affixed marks or goods with marks affixed on their packaging;
Article 2-(2)-(i) of the Design Act read as follows:
(2) "Working" of a design in this Act shall mean the following acts:
(i) Manufacturing, using, assigning, leasing, exporting or importing, or offering for assignment or lease (including displaying for the purpose of assignment or lease, the same shall apply hereinafter) of an article to the design;
The Acts defined the "use" of a mark and the "working" of a design as taking place "in the course of trade", so imports had to be "in the course of trade" to be considered trademark or design infringement subject to seizure by customs. Customs could not seize counterfeit goods imported for private use only. Therefore, if an importer stated that the imported goods were for private use, customs had to release the counterfeit goods (see Figure 1).
Figure 1: situation prior to the revisions
This caused significant problems for owners of trademark and design rights, and resulted in prolific discussion regarding how to stop the import of counterfeit goods into Japan. The revisions to the Trademark Act and the Design Act aimed to solve this problem by clarifying the definition of "import" and strengthening the effectiveness of border enforcement.
Revised Trademark Act and Design Act
Article 2-(3)-(ii) and 2-(7) of the revised Trademark Act reads as follows:
(3) "Use" with respect to a mark as used in this Act refers to any of the following acts:
(ii) assigning, delivering, displaying for the purpose of assignment or delivery, exporting, importing or providing through a telecommunications line, goods with affixed marks or goods with marks affixed on their packaging;
(7) Under this Act, the act of importing shall include the acts of persons located abroad and having other persons bring such goods into Japan from abroad.(Emphasis added, unofficial translation.)
Article 2-(2)-(i) of the revised Design Act reads as follows:
(2) "Working" of a design in this Act shall mean the following acts:
(i) Manufacturing, using, assigning, leasing, exporting or importing (including the acts of persons located abroad and having other persons bring such goods into Japan from abroad; the same shall apply hereinafter), or offering for assignment or lease (including displaying for the purpose of assignment or lease, the same shall apply hereinafter) of an article to the design. (Emphasis added, unofficial translation).
The revisions to the Acts seek to clarify the definition of "import". Previously, it was unclear whether the acts of overseas business operators constituted part of the import process. The revisions confirm that such acts – for example, sending counterfeit goods to Japan by mail – will be considered part of the import process and thus "import in the course of trade". As a result, customs may now seize counterfeit goods regardless of whether the individual importer (ie, the end customer) intends to use the goods for private use (see Figure 2).
Figure 2: situation after the revisions
The requirement that the "use" of a mark or the "working" of a design must be "in the course of trade" remains unchanged. Imports must still be "in the course of trade" to be considered trademark or design infringement subject to seizure by customs. The revisions to the Acts clarify the definition of "import" while keeping the fundamental legal framework the same.
For further information on this topic please contact Chisako Yagi at Nishimura & Asahi by telephone (+81 3 6250 6200) or email ([email protected]). The Nishimura & Asahi website can be accessed at www.nishimura.com.