YKI Trademarks Japan June 1, 2003 Issue In this Issue: 1. JPO Revises Trademark Fee Policy - Again 2. Preventing Parallel Imports 3. Using Information Statements to Block Registration (c) 2003 YKI Patent Attorneys *-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-* JPO Revises Trademark Fee Policy - Again On April 15, 2003 the Japan Patent Office announced the results of their review into the new trademark fee policy implemented last year. As reported in the March edition of YKI Trademarks Japan, this JPO policy required Examiners to charge a 15,000 yen official fee for all classes considered in any trademark application, even for classes which were not claimed by the applicant and even when the goods in the additional class were cancelled. In response to the large number of negative comments received from applicants and practitioners, the JPO announced that, effective immediately, the policy will be revised such that "when the designated goods/services having been filed with wrong classification are deleted, additional fees are not requested." The new policy can be understood using an example of an applicant who files an application for a particular mark covering goods which properly belong in two classes, Class 1 Chemicals and Class 2 Paints, for example, but who files the application in only Class 1 Chemicals, Paints and only remits the official fee for one class. If, during prosecution, the applicant amends the classification from Class 1 Chemicals, Paints to Class 1 Chemicals and deletes all goods which belong in Class 2 Paints, no additional fee will be necessary. Similarly, if the applicant amends the classification to Class 2 Paints and deletes all goods not in that class, no additional fee will be charged. In either case, the new policy states that only one class is considered. Under the policy in force until April 14, the applicant would have been charged the official fee for two classes in either of these situations. Naturally, if the applicant amended the classification to include both Class 1 Chemicals and Class 2 Paints, an additional 15,000 yen charge would still be required for the additional class. The newest JPO policy also clarified that an applicant who filed a trademark application for goods in one class, such as Class 1 Paints, would not be charged an additional fee if the application were amended to delete that classification and only describe goods in one other class, such as only in Class 2 Paint. Under the previous policy, situations such as this were left up to the Examiner's discretion. The lack of uniformity in interpretation of the previous policy was a source of frustration for many Japanese trademark practitioners, and a source of confusion for their clients. A matter that was not clarified was how the JPO would rule on requests for refunds of additional fees assessed under the old policy. Applicants who filed a significant number of multi-class trademark applications between January 1, 2002 and April 14, 2003 may wish to request an opinion and update from their representative in Japan. Preventing Parallel Imports A decision handed down by the Japan Supreme Court on February 27, 2003 clarified that, although parallel importing of goods is generally allowed under the Trademark Law, contract clauses related to the practice must be considered to decide whether the Trademark Law was violated. Until this decision, the nature of any contractual relationship was only considered a contract matter. In Japan, parallel importing of goods bearing a trademark is generally not considered an act of trademark infringement as long as the source and quality guarantees associated with a particular mark are not damaged. Goods which satisfy the following base criteria are very likely to be considered legally importable: 1. The imported goods should not be counterfeit goods; they must be authentic goods produced by the trademark owner or a legitimate licensee. 2. The trademarks in the exporting country and in Japan should be associated with the same entity. If the marks are owned by the same party, the owner of the Japanese trademark purchased or licensed their trademark rights from or with the permission of the same source, or the Japanese trademark owner is closely related to the foreign trademark owner legally or economically, the marks are considered to be associated with a single entity. The Supreme Court decision specifically stated that trademarked goods produced in a location other than that permitted by a licensing agreement are not to be considered "authentic goods", and are to be treated as counterfeit. The court seemed to express an opinion that the quality of a trademark would be unfairly diluted if the trademark owner were not able to control the locations of production of goods bearing their mark. Although the case decided by the court focused on the location of production of the goods, trademark owners not wishing to see parallel importing of their goods into Japan should consider including in all licensing agreements both contractual limitations on manufacturing locations and a specific clause prohibiting export to Japan, or to countries not specified in the agreement. Practice Tip: Using Information Statements to Block Registration Japanese trademark practice includes an information statement system which allows any party to submit information, including opinions, which they believe may affect the registrability of a mark for which an trademark application is pending with the Japan Patent Office. While Japan also has an opposition system for requesting cancellation of a decision for registration and an invalidation trial system for requesting invalidation of a registered trademark, the information statement system can be used to preempt registration of a particular mark. YKI Patent Attorneys encourages use of the information statement system. The system is advantageous in that it is: Cost Effective - The official fee for filing an information statement is less than half that of an opposition and only one third that of an invalidation trial. Anonymous - Information can be submitted virtually anonymously through any third party, and the applicant is not directly informed when an information statement is filed. Swift - When there is clear grounds for rejection, the information statement system can be used to eliminate a potential problem at the earliest opportunity. This can be especially beneficial when the grounds would not otherwise be known to the Examiner. For example, an unsolicited offer from a "squatter" in Japan attempting to sell you, or your client, rights to a Japanese application describing a trademark owned by you or your client elsewhere could be used as evidence that the application is not based on a bona fide intent to use. Safe - If the information disclosed in the information statement does not convince the Examiner to reject the application, it will still be possible to file an opposition or to request an invalidation trial. A disadvantage of the system is that, because the Examiner will not respond to the information provider, the extent to which the Examiner considered the filed information is not always apparent. Please contact the YKI trademark team if you would like more information on how to file information statements, or how to set up a system for watching for problematic applications.