Trademark enforcement proceedings
What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?
Both civil and criminal proceedings are available. There are two types of civil proceedings. One is the main lawsuit, by which a trademark owner may seek both a permanent injunction order and damages, and the other is a proceeding for preliminary injunction, by which a trademark owner may seek a preliminary injunction order. There is no specialised court for trademark cases; however, the Tokyo District Court and Osaka District Court have specialised divisions dealing with cases relating to intellectual property.
For criminal proceedings, a trademark owner may file a criminal complaint with police officers or public prosecutors; in practice, however, it depends on the discretion of police officers or public prosecutors as to whether a substantial investigation is made. Criminal proceedings are governed by the Code of Criminal Procedure, which is applied to all criminal proceedings in Japan. There are no specific procedural provisions related to trademark enforcement in criminal law. In addition, as an administrative proceeding, it is possible for a trademark owner to file an application for customs seizure.
Procedural format and timing
What is the format of the infringement proceeding?
The infringement proceedings begin with the filing of a complaint for a main lawsuit or petition for a preliminary injunction. No US-style discovery is allowed in Japan. However, an order for document production with limited scope under certain conditions is available. Live testimony can be used under the Code of Civil Procedure, although judges usually prefer to dispense with live testimony for trademark infringement cases. Affidavits from experts are often submitted to prove important facts, such as the pronunciation of foreign words, the likelihood of confusion, the fact that the mark is well known and the amount of the damages. The proceedings for a preliminary injunction typically take several months, and the proceedings for a main lawsuit typically take one to one-and-a-half years at the district court level and another year at the high court level.
For criminal proceedings, a trademark owner may file a criminal complaint with police officers or public prosecutors; however, in practice, it depends on the discretion of police officers or public prosecutors as to whether a substantial investigation is made. After the investigation, only the public prosecutors may commence the prosecution in court and the decision of whether to prosecute is at the sole discretion of the public prosecutors. Live testimony is commonly used. Upon the request of the public prosecutor, the trademark owner may submit affidavits to prove important facts, such as the likelihood of confusion, the fact that the mark is well known and the amount of the damages. Criminal proceedings typically take less time than civil lawsuits, unless the accused (trademark infringer) denies the offence.
Burden of proof
What is the burden of proof to establish infringement or dilution?
A trademark owner has the burden of proof to establish that its mark has been registered with the Japan Patent Office (JPO) or is well known in Japan, and that marks used by an alleged infringer are similar and cause confusion of source. The alleged infringer has the burden to prove the facts supporting its counterarguments.
Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?
A trademark owner or a licensee who has been registered as an exclusive licensee with the JPO has standing to seek injunctive relief or compensation for damages. A licensee who has not been registered as an exclusive licensee with the JPO does not have standing to seek injunctive relief, although there are a few precedents where an exclusive licensee who has not been registered with the JPO was awarded compensation for damages. A trademark owner or a licensee who has been registered as an exclusive licensee with the JPO may file a criminal complaint with police officers or the public prosecutors. However, only the public prosecutor has standing to bring a criminal complaint to the court under the Code of Criminal Procedure. Whether to prosecute is at the sole discretion of the public prosecutor.
Border enforcement and foreign activities
What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?
As to border enforcement, trademark rights holders can file an application for import suspension for goods suspected of infringing trademarks with the customs authority. The customs authority will examine the application and record the trademarks. The customs authority has the authority to seize goods suspected of infringing trademarks. During border seizure proceedings, both trademark rights holder and importer will be provided with opportunities to submit opinions, and the customs authority will then determine if suspected goods constitute a trademark infringement.
As to foreign activities, activities taking place outside Japan cannot support a legal charge because the activities to be judged in Japanese courts must be those made within the territory of Japan. However, activities that take place in foreign countries are often cited to prove facts, such as the fact that the mark is well known worldwide and the fact that the alleged infringer had the intention to infringe. Further, judges sometimes wish to know about judgments rendered by courts of foreign countries, especially those of the United States and the European Union. In addition, an act of importation from foreign countries into Japan constitutes infringement taking place within Japan.
What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?
Under the Code of Civil Procedure, each party may file a court petition for an order of document production against an adverse party or a third party, as long as:
- the requesting party can identify the document to be produced;
- there is necessity to obtain an order for document production; and
- the adverse party or the third party has no statutory grounds of immunity from production.
Further, there is another proceeding by which each party may request a court to request a third party to produce documents voluntarily. To obtain evidence from third parties outside the country, a party should request a foreign court through a Japanese court to provide judicial assistance and obtain evidence in accordance with the Convention Relating to Civil Procedure or bilateral international agreements.
What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?
After the filing of the complaint, the court clerk will examine whether the correct form for the complaint has been used and whether the correct stamp value has been affixed on the complaint. The clerk will then contact the plaintiff or his or her attorney and, depending on his or her availability, will decide the date of the first oral hearing. The court will then send a summons and the complaint to the defendant by post. The first oral hearing will typically be held 40 to 50 days after the filing date. Before the hearing, the defendant must file a defence, which will deny or accept each claim and the factual information relied upon in the complaint. At each key event in the proceedings, the judge will ask the parties whether they have an intention to settle the case.
Following the first hearing, there will be a court hearing of (on average) 10 to 15 minutes once a month for about eight to 12 months. In addition, the judge may hold a preparatory court hearing, at which the judge and both parties will discuss the issues at hand for a relatively long time in chambers.
The examination and cross-examination of witnesses will follow, although judges tend to dispense with the examination of witnesses in relation to trademark cases. After this, each party will file its closing brief. The oral proceedings will close, and the court will issue its judgment. On average, judgment is rendered from one to one-and-a-half years following the filing of the complaint.
The proceedings for a preliminary injunction typically take several months or more. The proceedings for appeals typically take about one year.
What is the limitation period for filing an infringement action?
In Japan, the limitation period for filing an infringement action is three years from the time when trademark owner becomes aware of the damages and the identity of the infringer. The same shall apply when 20 years have elapsed from the time of infringing act.
What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?
The fee to be paid to a court upon filing depends on the economic scale of the case. For example, if the trademark owner seeks ¥100 million as damages, it must pay approximately ¥300,000 to the district court and, if it appeals, ¥500,000 to the relevant high court.
As for attorneys’ fees, there is no legally binding standard in Japan. Usually, attorneys representing foreign clients charge on an hourly basis and their rates vary from ¥30,000 to ¥60,000, although some attorneys charge certain amounts as initial and contingent fees. Under Japanese law, a plaintiff can recover the full amount of the fee paid to the court and a part of the attorneys’ fees, which is usually up to 10 per cent of the amount of the damages awarded as compensation for infringement.
What avenues of appeal are available?
The judgment of a district court can be appealed to a high court. There are 50 district courts and nine high courts in Japan. Since April 2005, trademark cases that used to be subject to the jurisdiction of the Tokyo High Court are now heard by the Intellectual Property High Court. The grounds for appeal from a district court to a high court are that the first judge made an error in a factual finding or in the application of the law. The Supreme Court will hear appeals from a high court on grounds of error in interpretation and other violations of the constitution. In addition, violations of the civil procedure rules, such as an error in jurisdiction or lack of reasoning, will also give rise to a right of appeal to the Supreme Court. A system of petitions to the Supreme Court has been introduced that gives the Supreme Court discretion to accept cases if the judgment being appealed is contrary to precedent or contains significant matters concerning the interpretation of laws and ordinances.
What defences are available to a charge of infringement or dilution, or any related action?
In defending a charge of infringement or dilution, an alleged infringer often alleges, inter alia:
- no similarity of the marks;
- no similarity of goods or services;
- no likelihood of confusion;
- prior use that caused an allegedly infringing mark to become well known;
- that the term is generic;
- that the registration is invalid;
- that the registration should be cancelled as a result of non-use of the registered mark;
- that the mark is not well known or famous in Japan;
- the exhaustion of rights by first sale; or
- parallel importation.
In addition to a defence before the courts, an alleged infringer may file a petition for invalidation or cancellation of registration as a separate proceeding before the JPO. Filing a petition for invalidation or cancellation with the JPO does not necessarily stop litigation proceedings before a court, but judges sometimes prefer to await the outcome of a JPO decision.
What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?
Permanent injunctions and monetary relief are available through the proceedings for a main lawsuit, and a preliminary injunction is available through the proceedings for a preliminary injunction. As to monetary relief, the amount of damages is limited to actual damages (punitive damages are not allowed in Japan).
The amount of damages is usually determined by:
- the profit gained by an infringer;
- the number of infringing products multiplied by the amount of profit per unit gained by the trademark owner that sells competing products; or
- a reasonable or established royalty rate.
To obtain injunctive relief, the trademark owner does not have to establish any fact other than an existing, or the threat of, infringement for a permanent injunction through a lawsuit on the merits, but must establish the necessity for a preliminary injunction if they request one. However, in practice, courts do not require a high level of necessity to be established. Further, as a condition for a preliminary injunction order, the trademark owner is ordered by judges to place a bond with the court, the amount of which is determined by judges on a discretionary basis (eg, as an amount equivalent to 20 per cent of the annual sales of infringing products).
As for criminal remedies, imprisonment not exceeding 10 years or a fine not exceeding ¥10 million (in the case of a corporation, ¥300 million), or both, may be imposed on the trademark infringers, depending on the maliciousness of the conduct, the amount of the damages, etc.
Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?
Arbitration is available in Japan as long as both parties agree to arbitrate disputes. The Japan Commercial Arbitration Association and the Japan Intellectual Property Arbitration Centre are active institutions that administrate arbitration proceedings in relation to disputes related to intellectual property. However, the number of arbitration cases relating to intellectual property is small – except for domain name disputes – and the number is presently far lower than the number of litigated cases.
The benefits of arbitration are that the parties may agree to use the English language, that confidentiality can be kept and that the enforcement of the decision is easier if the decision needs to be enforced in foreign countries, etc. The risk of arbitration is that no appeal is available.
Further, mediation is also available provided that both parties agree. The benefit of mediation is that the proceedings are not necessarily adversarial. The risks of mediation are that it is very difficult to locate good and experienced mediators, and that the proceedings may become redundant, as mediation is not binding.