JTA BULLETIN, Issue no. 7

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1 JTA BULLETIN, Issue no. 7 Cybersquatting through use of a domain name has been written into law as an unfair competition act in a recently passed bill revising part of the Unfair Competition Prevention Law. The revised law was passed in the National Diet on June 22, 2001, promulgated on June 29, 2001 under Law No.81 of 2001 and is slated to come into force by December 28, 2001 at the latest. This issue will deal with Domain name disputes in Japan, Trend of International Application for Registration and Protection of Foreign Trademarks against Misappropriation in Japan. Domain name disputes in Japan ICANN (Internet Corporation for Assigned Names and numbers) has drafted and implemented UDRP (Uniform Domain Names Dispute Resolution Policy) for gtld since December 1, In Japan, JPDRP (the JP Domain Name Dispute Resolution Policy) has been drafted by Japan Network Information Center (JPNIC, i.e. the Registry of JP domain names) and has been published since July 19, 2000, in order to establish a rule to solve cybersquatting of the JP domain names. In accordance with the policy of JPDRP, Japanese Intellectual Property Arbitration Center has accepted a request for transfers and cancellations of domain name since October 19, This center, designated by JPNIC is a solitary dispute-resolution service provider now. As the JPDRP is basically localized from the UDRP, the outline is common to each

2 other, that is, 1. A registrant and a complainant are not bound to a decision made by a panel. Each party can bring a suit within ten days after a decision is made. 2. A decision should be made within fifty-five days after a request is filed. 3. The costs for this dispute resolution are reasonable, that is 180,000 for a single panelist, and 360,000 for three panelists.. 4. A decision is published through the Internet. As a unique point to JPDRP, any indications, not only trademark, can be grounded to a dispute. Also, bad faith may be established, even if a registrant uses the domain name in bad faith but not registered it in bad faith, or vice versa. Under the JPDRP, a complainant for resolution must prove the following three facts (differences from UDRP are emphasized): 1. that the domain name of the registrant is identical or confusingly similar to trademark, service mark, or any other indications in which the complainant has rights or legitimate interests; 2. that the registrant has no right or legitimate interests in relation to the registration of the domain name; and 3. that the domain name of the registrant has been registered or is being used in bad faith. As of June 20, 2001, arbitrations are requested in thirteen cases. Transfer of domain name is decided to the following six cases: 1. goo.co.jp 2. itoyokado.co.jp

3 3. sonybank.co.jp 4. icom.ne.jp 5. MP3.CO.JP 6. SUNKIST.CO.JP With respect to cases 1, 3 and 5, each registrant brought a suit to a competent court. Following is the summery of these decisions; goo.co.jp In the case goo.co.jp, the registrant had obtained the domain name before the complainant filed the trademark application goo and opened the Internet site. The point at issue is whether the priority of registration of the domain name is considered important or not. As a result, the domain name was decided to be used in bad faith since the link and transfer from the site of the domain name to an adult site was set after the complainant opened the site and, therefore, it was decided that the domain name should be transferred to the complainant. itoyokado.co.jp The Complainant, Kabushiki Kaisha Ito Yokado is a famous department store in Japan. The Respondent had opened a web site, where it advertised, Welcome to My Home Page - we are selling the domain name, itoyokado.co.jp, and simultaneously on the auction of web site Yahoo Japan, the Respondent proposed to sell the domain name for a bidding price of 1,000,000,000. Based on these facts, the Domain name use was considered to be in bad faith and a decision to transfer was rendered. sonybank.co.jp In the case sonybank.co.jp, the registrant requested the court for a preliminary injunction for a request to confirm ownership of the domain name. The point at issue is whether the procedures for decision should be suspended by the injunction. However, the request for the preliminary injunction was made after the present case was informed to the registrant and could be abused as a measure to suspend the procedures for decision. In addition, there was no reason for suspension. As a result, it was decided that the domain name should be transferred to the complainant,

4 without suspending the procedures for decision. This decision cited some other decisions made by the WIPO Arbitration and Mediation Center. icom.ne.jp The respondent who received a complaint did not submit a response. According to the allegations and the evidence, which the complainant submitted, the respondent dispersed and is under liquidation. Meanwhile, the complainant is a firm which deals the business of the information processing by the internet. Complainant has the right for a trademark which sound is ICOM. The name of his firm is also ICOM. The situation that the respondent does not cancel the domain name registration without reason is decided to be the evidence that the domain name has been registered and is being used in bad faith. MP3.CO.JP In the case "mp3.co.jp", the complainant, a Delaware corporation in the United States, is a major provider of music distribution service over the Internet. It was found that the registrant, holding a web site under the domain name without providing any related services, appropriated the complainant's good will and, therefore, it was decided that the domain name should be transferred to the complainant. SUNKIST.CO.JP It was decided that domain name should be transferred to the complainant, which is the subsidiary in Japan wholly owned by the U.S. corporation who distributes the fruits drink under the trade mark Sunkist. The reason is that, if and in case the registrant uses the domain name in his web site, the confusion might happen in the market. The decision further takes up the problem of parallel import matter, that is, whether or not the registrant can import the genuine Sunkist Orange fruits from the United States. However, it was decided that the registrant is not entitled to use the domain name as the registrant s shop name even for the parallel import. In Japan, registration of general-use JP domain names has been accepted on and after May 7, 2001 and a corporation/person is allowed to register plural domain names. It is expected that disputes on the domain names will increase in the future. Recently, the Bill to revise the Unfair Competition Prevention Law has been approved in the Diet. Under the revised Unfair Competition Prevention Law, the following acts

5 constitutes unfair competition: An act of obtaining or holding a right to use a domain name identical or similar to a specific indication of goods or other matter of other person (meaning names, trade names, trademarks, marks or other indications of goods or a service pertaining to other person s business) or using such a domain name, for the purpose of making an unfair profit or inflicting injury on other person The situation around domain names has been rapidly changed. Now cybersquatters have to pay big damages for misappropriating famous marks and obtaining domain names without considering such situation. (Sakae MIYANAGA, Patent Attorney, SUZUYE & SUZUYE) Trend of International Applications for Registration Acceptance of international applications under the Madrid Protocol was started on March 14, 2000 in Japan. The number of applications filed through this route is as small as 187 by the end of the last year and 62 for the first three months of this year (see the table indicated below). No. of International Application filed through JPO as the Office of origin Source : Japanese Patent Office Period No. of IA through JPO No. of designated contracting parties 14/3/ /12/ /1/ /3/ The reasons why the number of Madrid Protocol applications have not been increased are considered as follows; (1) the Japanese companies are not familiar with international trademark application and wish to see how things are going under the new

6 application system for a while, (2) most member countries of Madrid Protocol are European countries, and many Asian countries and the United States have not ratified the Protocol yet. However, in the case where a number of countries are designated in a Madrid Protocol application, the cost is significantly reduced as compared to that of filing the national applications in each country. Therefore, it is expected that trademark proprietors, who intend to develop their business globally, would file trademark applications through Madrid Protocol more and more in the future. (Masako NISHIMURA, Patent Attorney, SUZUYE & SUZUYE) Protection of Foreign Trademarks against Misappropriation in Japan In 1999, the Japanese Patent Office revised the examination criteria relating to Section 4 (1) (x), (xi), (xv) and (xix) of the Trademark Law to reinforce the protection of wellknown or famous trademarks, so as to reject, in principle, trademark consisting of a combination of another person s well-known or famous trademark and applicant s own character or device. Before the revision, a trademark including a well known or famous foreign trademark in its part, filed by a Japanese applicant, could not have been determined to be similar to the well known or famous foreign trademark under the conventional criteria for trademark similarity judgment. Therefore, such a composite mark could have been registered before the legitimate owner of the foreign trademark obtains registration for it in Japan. As a result of the revision of the criteria, however, such a trademark shall be rejected on the grounds that it causes confusion as to origin with that of the well known or famous trademark. However, the revision cannot fully protect foreign trademarks that had been registered by misappropriation in Japan since the above sections require the foreign trademarks being well known or famous. Even under the conventional criteria, whether a foreign trademark was well known or famous in Japan was judged in consideration of its reputation overseas as well, when it was not well known or famous in Japan. However, if a foreign mark is not recognized to be well known or famous in the foreign country due to circumstances, for example, where consumers of the products with the mark are restricted to a narrow range, a preemptive application or registration cannot be rejected or invalidated under the above sections of the Trademark Law which apply to only well known or famous marks.

7 In such cases, Section 4 (1) (vii) of the Trademark Law is noteworthy, which stipulates the ground to reject or invalidate trademarks liable to contravene public order or morality. The Patent Office made the following decisions concerning not well known or famous foreign trademark registered by misappropriation, based on the provision of Section 4 (1) (vii). Trial Decision of April 9, 1992 (Trial No. 3232/83) A trade name Lillywhites, the name of the biggest specialty store of sporting products in Europe, located in London, was filed in Japan as a trademark for clothing. The application was rejected under Section 4 (1) (vii) of the Trademark Law for the following reasons: The applicant had no relationship with Lillywhites in London. If the applicant, being unrelated to Lillywhites, obtains registration of the present mark, public order of fair competition may be disturbed, resulting in violation of international faith. Trial Decision of September 27, 1999 (Trial No. 645/91) A trademark identical to the mark K SWISS used by a Californian company, K. Swiss Incorporated, was filed by a Japanese applicant. The application was rejected by the Examiner under Section 4 (1) (vii) of the Trademark Law. This rejection was upheld in the Trial for the following reasons: It was surmised that the cited mark K SWISS had been famous in the United States when the present mark was filed. The present mark and the logotype thereof are very similar to those of the cited mark. In consideration of the fact that the present mark was filed at substantially the same time as K. Swiss Incorporated introduced their products into the Japanese market, an unfair purpose is naturally presumed. Court Decision on December 22, 1999 (Lawsuit for canceling a trial decision) The trademark DUCERAM used by a German company for dental therapeutic ceramics (a material for artificial teeth) was preemptively registered by a Japanese company, which had got in touch with the German company in connection with import of the above products to Japan before filing their application. The trial decision rejected the present mark under Section 4 (1) (vii) of the Trademark Law without determining whether the present mark was well known or not. The court upheld the trial decision, stating that the present mark was liable to disturb public order of fair competition, resulting in violation of international faith, and thus, being liable to

8 contravene public order or morality. If in such a case that the proprietor of foreign trademark and the Japanese registration owner had concluded a distributor contract for exclusive supply of the products in Japan at any time during the year preceding the filing date of a preemptive registration, and the application was made without a legitimate reason and without the authorization of the proprietor, it would be possible to cancel the registration under Section 53 bis of the Japanese Trademark Law based on Article 6 septies of the Paris Convention. However, in many cases, a Japanese registrant is a mere local distributor of the proprietor of the foreign trademark, and thus, neither an agency under exclusive contract for sale nor a representative of a Japanese subsidiary under a distributor contract, therefore, it is difficult to apply Section 53 bis. Further, the cancellation trial based on Section 53 bis cannot be filed after the expiration of the equitable time limit (five years) from the registration date. Accordingly, Section 4 (1) (vii) can be utilized for protecting foreign trademarks against misappropriation, when the mark is not well known, and moreover, when it is not possible to cancel the registration based on Section 53 bis, which would be effective for global protection of trademarks in Japan. (Masako NISHIMURA, Patent Attorney, SUZUYE & SUZUYE) Editor: International Activities Committee