2025.02.13
Updates on the "Letter of Consent" under the Trademark Law in Japan
TRADEMARK
Updates on the "Letter of Consent" under the Trademark Law in Japan
This is a follow-up to our article dated December 28, 2023 "Review of Systems for Deployment of Brand Strategy Utilizing Trademarks" (https://www.rc-iplaw.com/en/news/detail/67). Starting April 1, 2024, a significant change has been introduced to the Japanese trademark system, providing you (an applicant) with a new avenue to navigate provisional refusals due to prior trademarks.
General Options to Respond to Provisional Refusal
When filing a trademark application in Japan, you may sometimes (or often?) face provisional refusals if your mark ("Mark A") conflicts with an already registered mark ("Mark B") for similar or identical goods/services. In the circumstances, you generally have options to address such refusals:
1. Submitting arguments to challenge the refusal;
2. Restricting the designated goods or services;
3. Filing a non-use cancellation action against Mark B; and/or
4. Negotiating with the owner of Mark B for:
In addition to the above, you now have an option of a "Letter of Consent" ("LOC") from the owner of Mark B (NOTE: This option is limited to trademark applications filed on or after April 1, 2024). So, you may now negotiate the LOC with the owner of Mark B.
However, it is important to note that the LOC alone does not automatically resolve the provisional refusal under the Japanese trademark law. You are also required to submit additional arguments that there is no likelihood of confusion in the future as well as at the present.
How To Prove "No Likelihood of Confusion"
To determine whether the LOC is effective, the new Examination Guidelines outline specific factors that will be evaluated holistically:
1. Similarity of the Marks:
Therefore, the LOC under the Japanese trademark law is expected to address as many items of the above as possible.
Examples of Differentiation
General Options to Respond to Provisional Refusal
When filing a trademark application in Japan, you may sometimes (or often?) face provisional refusals if your mark ("Mark A") conflicts with an already registered mark ("Mark B") for similar or identical goods/services. In the circumstances, you generally have options to address such refusals:
1. Submitting arguments to challenge the refusal;
2. Restricting the designated goods or services;
3. Filing a non-use cancellation action against Mark B; and/or
4. Negotiating with the owner of Mark B for:
o Assignment of Mark B;
o Voluntary Abandonment of Mark B; and/or
o An "assign-back" agreement, where Mark A is temporarily assigned to the owner of Mark B, then reassigned back after registration, or vice versa.
o Voluntary Abandonment of Mark B; and/or
o An "assign-back" agreement, where Mark A is temporarily assigned to the owner of Mark B, then reassigned back after registration, or vice versa.
In addition to the above, you now have an option of a "Letter of Consent" ("LOC") from the owner of Mark B (NOTE: This option is limited to trademark applications filed on or after April 1, 2024). So, you may now negotiate the LOC with the owner of Mark B.
However, it is important to note that the LOC alone does not automatically resolve the provisional refusal under the Japanese trademark law. You are also required to submit additional arguments that there is no likelihood of confusion in the future as well as at the present.
How To Prove "No Likelihood of Confusion"
To determine whether the LOC is effective, the new Examination Guidelines outline specific factors that will be evaluated holistically:
1. Similarity of the Marks:
- A LOC will typically not work if the marks are identical and pertain to identical goods/services.
2. Fame of the Marks:
- The level of recognition or fame of each mark is considered.
3. Distinctiveness:
- Whether the marks are coined terms or inherently distinctive.
4. Nature of the Marks:
- Whether the marks function as "house marks" or serve specific branding purposes.
5. Market Context:
- Possibility of business diversification.
- Nature of the goods/services involved.
- Whether the consumers or customer bases are shared between the two marks.
6. Usage of the Marks:- Nature of the goods/services involved.
- Whether the consumers or customer bases are shared between the two marks.
- Specific layouts, colors, fonts, and placement on packaging.
- Whether the mark is always used in conjunction with other identifiers, such as company names or disclaimers (e.g., "this item is not related to Company XYZ").
7. Business Practices:- Whether the mark is always used in conjunction with other identifiers, such as company names or disclaimers (e.g., "this item is not related to Company XYZ").
- Agreements to take corrective action if confusion arises on the market.
Therefore, the LOC under the Japanese trademark law is expected to address as many items of the above as possible.
Examples of Differentiation
The Guidelines emphasize the importance of differentiation between the marks in question. Examples of helpful differentiation include:
- Descriptions of Goods/Services:
Additional Considerations - "Plus Factors"
The Guidelines also say additional factors that could find “no likelihood of confusion”:
Practical Tips
Even if the Examiner still believes there is a likelihood of confusion after the LOC is submitted, an immediate final decision for refusal will not be issued. Instead, you will have another opportunity to submit additional documents or evidence to support your position. In addition, there has yet to be a case in Japan where a trademark has been approved for registration through the LOC, so it is unclear how strictly or loosely the Examiner will apply the Guidelines to cases. Therefore, you may challenge the provisional refusal by submitting the LOC (and the revised LOC(s) as the case may be) and arguments that there is no likelihood of confusion several times.
Also, if you negotiate with the owner of a prior conflicting mark, it is recommended to cover the "assign-back" option as well as the LOC to be on the safe side. This is because the LOC alone may not always work.
- Descriptions of Goods/Services:
• Restricting “computer programs” under Mark A to “game related programs” and Mark B to “computer programs for medical use.”
- Price Range:
• Differentiating between high-end products under Mark A and low-end products under Mark B.
- Sales Channels:
• Selling mass-market goods to general consumers (Mark A) versus made-to-order goods for specific customers (Mark B).
- Geographic Scope:
• Restricting sales to different regions, such as Hokkaido (the northernmost prefecture of Japan) for Mark A and Okinawa (the southernmost prefecture of Japan) for Mark B.
- Seasonal Sales:
• Products under Mark A are sold only in spring while products under Mark B are sold only in autumn.
Additional Considerations - "Plus Factors"
The Guidelines also say additional factors that could find “no likelihood of confusion”:
- No Intent to Use: If the owner of Mark B does not use or plan to use for the relevant goods/services, this may be considered a "plus" in favor of you, the applicant of Mark A.
- Commitments on Usage: Your agreement to use Mark A in a specific way, as outlined in the LOC, without future modifications could enhance the registrability of Mark A.
Practical Tips
Even if the Examiner still believes there is a likelihood of confusion after the LOC is submitted, an immediate final decision for refusal will not be issued. Instead, you will have another opportunity to submit additional documents or evidence to support your position. In addition, there has yet to be a case in Japan where a trademark has been approved for registration through the LOC, so it is unclear how strictly or loosely the Examiner will apply the Guidelines to cases. Therefore, you may challenge the provisional refusal by submitting the LOC (and the revised LOC(s) as the case may be) and arguments that there is no likelihood of confusion several times.
Also, if you negotiate with the owner of a prior conflicting mark, it is recommended to cover the "assign-back" option as well as the LOC to be on the safe side. This is because the LOC alone may not always work.
