1 . Trademark
1.1. Sources of law
The Trademark Act and the Unfair Competition Prevention Act (UCPA) are the principal sources of law. Supreme Court precedents substantially function as sources of law.
If using unregistered well-known trademarks or famous trademarks, then such well-known or famous unregistered trademarks can obtain protection under the UCPA.
Well-known or famous unregistered trademarks can be protected by Prior Use if the commencement of the use is prior to registered trademarks.
1.2. Substantive law
The Trademark Act provides for the categories of unregistrable trademarks (upon examination or subject to cancellation) to protect well-known or famous trademarks.
The UCPA protects “indications of goods or business (names, trade names, trademarks, mark, containers or packaging for goods which are connected with a person’s operations, or any other indication of a person’s goods or business [. . .]),” which are “well-known among consumers” or which are “famous”. “Famous” indicates a higher degree of fame than “well-known” does.
Use of signs identical or similar to an indication of goods or business that is “well-known” among customers is deemed unfair competition if the likelihood to cause confusion exists, whereas “famous” indications of goods or business are protected even where there is no likelihood to cause confusion.
Both the Trademark Act and the UCPA distinguish between famous trademarks and well-known trademarks.
Under the Trademark Act, Article 4-1-10 is considered to protect both well-known trademarks and famous trademarks. Article 4-1-15 and 4-1-19 are interpreted to protect only famous and extremely well-known trademarks.
Under the UCPA, the difference lies in whether it is necessary to demonstrate the requirement to cause confusion (for well-known marks) or not (famous marks) in order to be deemed as unfair competition.
The “aura of luxury” should not play a role either. In practice, courts will apply the same general principles to luxury brands and do not recognize any broader protection.
According to the Examination Guidelines for Trademarks published by the Japan Patent Office (JPO), the fact that a trademark is well-known or famous needs to be proved by evidence such as:
- printed matter (newspaper, magazines, catalogues);
- invoices, receipts;
- photographs showing the trademark;
- certificate by an advertisement agency;
- trade association or consumers certificate;
- public organization certificate;
- articles in general newspapers, trade journals and the internet; and
- outcome reports of the questionnaire intended for consumers regarding awareness of the trademark.
The JPO and courts would take into account various factors:
- a trademark actually in use and goods or services for which it is used;
- the start date, duration, or the area where it is used;
- the volume of production and scale of business (number of stores, business area, an amount of sales;
- appearance in general newspapers, trade journals, magazines and the internet; and
- the outcome of the questionnaire regarding consumers’ awareness of the trademark.
Usually, oral testimony is not used for trademark protection cases.
Affidavit is not common for trademark protection of luxury brands, but it is sometimes used to show sales, strategy and advertisement for the brand in Japan with other documents.
In order to show the likelihood of confusion, the reputation and the degree of awareness or fame of the brand, a Questionnaire Survey conducted by experts is sometimes used.
The owner of a trademark can seek an injunction of a domain name.
A trademark cannot be enforced against a trade name if the use of the trade name is in a general manner and the owner of the trade name does not have the purpose of unfair competition.
If other distinctive signs are categorized as commercial use, especially for advertisement of the products, brands or services, then it may become infringement.
There have been Court decisions (for example, 10 October 2019 IP High Court) that recognize that using a third party trademark in description metatag may cause infringement. However, another IP High Court decision did not recognize that keyword metatag caused infringement.
Whether a trade mark can be enforced against its unauthorized use in comparative advertising depends on whether the use in a social media or comparative advertising is deemed as trademark use. One of the points is whether such use in social network services contributes to advertising of the products or services.
There is no provision for general fair use in parody. The Frank Muller Case in the IP High Court (12 April 2016) held that parody use of a Frank Muller watch did not constitute trademark infringement. In another case, KUmA/PUMA in the IP High Court (27 June 2013), found trademark infringement in a parody case for PUMA logo. The Court does not provide the conditions or tests for infringement in parody.
A trade mark owner can take action claiming both trade mark infringement and unfair competition for the same set of facts. It is possible to bring parallel proceedings.
One of the issues for luxury brands is the import of pirate products for personal use. This is a loophole used by importers of pirate products. In order to resolve this issue, the Trademark Act was amended in May 2021. New article 2-7 defines that “Import” in the amended act clearly prohibits any action to bring infringement products from a foreign country into Japan by people who reside outside of Japan, by themselves or via any third party for any reason. As a result of this, personal use import of pirate products would be prohibited.
2 . Copyright
2.1. Sources of law
The substantive law is the Copyright Act. Japan has executed many treaties with respect to copyright protection, including the Berne Convention; Universal Copyright Convention; Rome Convention; Geneva Phonograms Convention; WIPO Copyright Treaty; WIPO Performances and Phonograms Treaty; and WTO/TRIPS Agreement.
Supreme Court precedents substantially function as sources of law.
The provision of the treaty will prevail. However, there are no conflicts at present.
2.2. Substantive law
Copyrightable work should be as a “production in which thoughts or sentiments are expressed in a creative way and which falls within the literary, scientific, artistic or musical domain.” Article 10 provides open list, including scripts and other literary works; musical works; choreographic works and pantomimes; paintings, sculptures and other artistic works; architectural works; maps, diagrammatical works of a scientific nature; cinematographic works; photographic works; and computer programs.
Objects of industrial, fashion or accessory design can be copyrightable, however, only a very limited number of industrial products can satisfy the requirements for copyright protection.
The Court grants to an industrial product only if it is deemed comparable to fine arts or it has qualities of fine arts with following factors: whether or not the work has a high level of aesthetic expression or artistic qualities; whether or not it is produced only in pursuit of aesthetic expression, without substantial restrictions thereon for practical purposes; and whether or not it can serve as an object of art, or a complete artistic work, apart from its practicality.
Article 21 to 28 of the Copyright Act sets forth the following type of rights: reproduction; performance; screen presentation; public transmission; recitation; exhibition (limited to artistic work or unpublished photographic work); distribution (limited to cinematographic work); transfer (work other than cinematographic work); rental (work other than cinematographic work); translation and adaptation; and exploitation of a derivative work (original author).
As for moral rights (Art.18 to 20), the author has the right to offer and make available to the public any work which has not yet been made public; the right to determine whether or not to indicate its name as the author of the work; and the right to maintain the integrity of its work and its title. These rights are personal and exclusive to the author and cannot be transferred (Art. 59).
“Neighboring rights” are protected. This term refers to the rights of performers, broadcasters, and other individuals who do not author works, but play an important role in communicating them to the public.
Rights of producers of phonograms (Articles 96 to 97-3), Broadcasting organizations (Articles 98 to 100) and Wire-broadcasting organizations (Articles 100-2 to 100-5) are also protected.
Article 15(1) of the Copyright Act specifically provides that authorship of an employee “in the course of his duties” is attributed to the employer “unless otherwise stipulated in a contract, work regulation, or the like in force at the time of the making of the work”.
Contract provision to assign the rights are required for copyrightable work carried out by consultants or suppliers.
Where a shareholder or director is also an employee, the work for hire presumption will apply. Otherwise, express contract provisions shall provide for copyright assignment.
No formalities are necessary to assign copyright. However, to assert a copyright assignment against a third party, copyright registration in the Agency for Cultural Affairs (or SOFTIC for computer programs) is required. The registration has to be substantiated by submitting relevant documents providing evidence that the parties have agreed to the assignment.
Moral rights are non-transferable and cannot be waived.
In principle the term of protection is until the end of the 70-year period following the death of the author (Article 51). There are some exceptions. First, the term of protection for anonymous or pseudonymous works and works under the name of a juridical person or other corporate body is until the end of the 70-year period following the making public of such works (Articles 52, 53). With respect to cinematographic works, the copyright continues to subsist until the end of the 70-year period following the making public of such works, and if the work has not been made public within the 70-year period following its creation, until the end of the 70-year period following the work’s creation (Article 54).
The Berne Convention adopts the principle of reciprocity with respect to the term of protection. Therefore, if the term of protection in the country of origin is shorter than above, the shorter term of protection applies (Article 58).
Neither copyright registration, copyright deposit nor copyright notice is required to enforce a copyright.
Copyright registration may be obtained at the Agency for Cultural Affairs (or SOFTIC for programming works). The merit of registration lies in the point that a person whose true name is registered will be presumed to be the author of the work (Article 75-3) and to assert a copyright assignment against a third party.
The Supreme Court has held that “copying of a work is the reproduction of a work based on the existing work, and from which the details and forms of the existing work can be perceived”. If it can be acknowledged as having been based on the existing work and is of substantial similarity from which the details and forms of the original work can be perceived, it will establish an infringement of copyright.
It may be possible for copyright to be enforced against a trademark, registered design/design patent, patent, domain name, trade name, pseudonym or other IP rights. In order to protect by copyright, such distinctive signs must be a “production in which thoughts or sentiments are expressed in a creative way” and “which falls within the literary, scientific, artistic or musical domain” and oftentimes, extremely short phrases are considered to not meet the requirement.
The use of copyright in social network services or comparative advertising may constitute copyright infringement, if such use falls under infringement.
The Copyright Act does not provide general fair use provisions or parody exceptions. Any unauthorized use will be decided on a case-by-case basis and considered copyright infringement if it meets the criteria.
Articles 30 to 47-8 of the Copyright Act limit copyright and neighboring rights in the cases indicated thereunder, for the purpose of harmonizing the economic benefits of the author and the benefits of the society which uses the information. The list is limited. In that sense, cases in which the exercise of copyrights are acknowledged, although they may be far from “fair”, are individually listed in detail, and rights are limited in only such cases. The limited list includes (but are not limited to): reproduction for private use; use for evaluation by a certain prospect licensee; use for experimental purposes; quotations; reproduction in school education; performances not for profit-making; reproduction for judicial proceedings; reproduction of artistic works in copyright assignment or license; reproduction by the owner of the reproduction of a computer program (install, backup, etc.); ephemeral reproduction for maintenance or repairs; and record of software works for execution of a program by duplication or transmission of a computer program.
With respect to neighboring rights, these are essentially limited in the same instances as above.
The right to demand compensation for damages for copyright infringement lapses by prescription if not exercised: within 3 years from the time when the right holder became aware of such damages and of the identity of the person who caused it; or within 20 years from the act of infringement.
For luxury brands, copyright protection is frequently used to protect its internet homepage, photography of the brands and catch copy of advertisements. In addition to them, although not so common, some artistic logos might be protected. If luxury brands retain an external designer to create their logo, the luxury brand should ask that designer to assign copyright and to commit not to exercise their moral rights.
3 . Design
3.1. Sources of law
The Design Act, the UCPA and the Copyright Act are the principal sources of law. Supreme Court precedents substantially function as sources of law.
Treaties take precedence over domestic laws, however, there are no hierarchical differences at moment.
3.2. Substantive law
The Design Act exclusively protects registered designs defined as “the shape, patterns or colors, or any combination of them, of an article which creates an aesthetic impression through the eye” as long as it does not fall under the category of unregistrable designs.
The UCPA provides protection for unregistered design by prohibiting acts of unfair competition for 3 years after the date the goods were first sold in Japan, regardless of notoriety of the configuration. Well-known design or Famous design is also protected by the UCPA.
A design is protectable under the Copyright Act if the design is deemed as a copyrightable work.
To obtain a design right a design owner is required to show the design:
- creates an aesthetic impression through the eye;
- has industrial application;
- has novelty and is not easily created;
- is not identical with or similar to a part of a design which application has been filed prior to the date of filling of the said application;
- does not fall under the category of unregistrable design;
- complies with the requirement, one application per design; and
- there is no prior application.
A legal entity shall have a non-exclusive license on design rights obtained for designs made by an employee, which, by the nature of the said design, fall within the scope of its business and created by an act categorized as a present or past duty of the said employee. Besides this non-exclusive license, a legal entity is required to execute an assignment agreement to acquire the rights in the designs created by its employee, consultant, shareholder, director or supplier.
Unless a design falls under the category of non-exclusive license for “work for hire”, any provision in any agreement, employment regulation or any other stipulation provided in advance that the right to obtain a design right or that the design rights for any design made by an employee shall vest in the employer, or that an exclusive license for the said design shall be granted to the employer, shall be null and void.
Besides the above, there is no specific requirement in the laws for a design assignment agreement to be valid.
An employee is entitled to receive reasonable remuneration where he assigns the design right or grants an exclusive license to the employer in accordance with an agreement, employment regulation or any other stipulation. The value of the remuneration shall not be considered unreasonable in light of circumstances where a negotiation between the employer and the employee took place in order to set among others, standards for the determination of the said remuneration and their disclosure, the opinions of the employee, regarding the calculation of the amount of the remuneration received and any other relevant circumstances.
Unless a design is protected under the Copyright Act, the designer shall not obtain moral rights.
Registered design protection lasts 20 years (15 years for the application filed before 31 March 2007) without the possibility of renewal.
Under the UCPA, unregistered design protection lasts 3 years from the date the goods were first sold in Japan unless the design of the goods is well-known or famous.
Copyright protection lasts for 70 years following the death of the author.
Actual copying is not always necessary to establish design infringement.
Under the Design Act, a design owner can exercise its exclusive right to manufacture or sell an article that is identical or similar to the registered design. Whether a registered design is identical with or similar to another design shall be determined based upon the aesthetic impression created by the designs through the eye of their consumers. There is no actual copying requirement.
Under the UCPA, it is prohibited to assign, lease, display for the purpose of assignment or leasing, trade in goods that imitate the configuration of another person’s goods within 3 years from the date the goods were first sold in Japan (see above 3.2). In addition, if a design is considered as an indication of goods or services and is well-known or famous among consumers, an identical or similar design will constitute infringement. There is no actual copying requirement.
A design is enforceable against a trademark, a registered design/design patent, patent, domain name, trade name or other IP rights if these are infringing the design according to the Design Act, the UCPA or the Copyright Act.
However, the Design Act provides that one cannot enforce its registered design where that registered design or a design similar to that registered design, is similar or conflicts with another person’s prior right with a previous filing date (i.e., registered design, patented invention or registered utility model, trademark right, or copyright).
In general, it must be noted that rarely do trademarks, patents, domain names and trade names fulfil criteria for designs (see definition at 3.2), and thus would not be held identical or similar to the allegedly infringed design under the Design Act.
A design can be enforced against its unauthorized use in social media, comparative advertising or parody, if such use falls under one of the categories of infringement under the Design Act, the UCPA or the Copyright Act.
There is no “repair clause” in Japan. The defenses that are available to an alleged infringer under the Design Act are general ones, for example: design right invalidity defense; prior use; prior application; or restriction on the effect of the design right restored by retrial.
A design owner cannot enforce his/her design right if it is deemed as abuse of right under the Civil Code.
For the protection under the UCPA, see above 3.2.
The right to demand compensation for damages lapses after 3 years from the time when the right holder became aware of such damages and of the identity of the person who caused it; or within 20 years from the act of infringement.
It is possible for a design holder to take action claiming both design infringement and copyright infringement and/or unfair competition for the same set of facts and bring parallel copyright proceedings and/or unfair competition proceedings.
Before the recent amendment of the Act, only one design was acceptable for one prosecution. However, with changes to modern industry, one design may be used for several products. Therefore, the amendment allows a design right owner to file several design prosecutions for one design.
4 . Right of privacy, publicity and personal endorsement
4.1. Sources of law
Case law in Japan does recognize the right of an individual to control the commercial use of his or her name, image, likeness, or other unequivocal aspects of one's identity.
There is no statutory source relating to the right of publicity - it is recognized through judicial precedents which refer to the Constitution, the Civil Code, the Copyright Act, or a combination of the three.
4.2. Substantive law
To own a right of publicity, persons must be of distinction or a celebrity, such as actors, performers, singers or sportspersons. Protection is granted to both Japanese and foreign individuals. It is not necessary for individuals to make commercial use of their identity. The Supreme Court (13 February 2004) held that only natural persons can enjoy a right of publicity and damages for its infringement.
Case law does not provide for protection of the right of publicity to extend after the individual’s death, although post-mortem rights have been under discussion.
Although there are no judicial precedents officially recognizing post-mortem rights, in practice successors of the deceased individual often require prior approval and payment of royalties to use that individual’s name or image, and have indeed obtained and been paid by publishers or TV companies.
The Supreme Court recognized publicity rights (“Pink Lady” Judgment, 2 February 2012) as originating from personal rights which are in principle not transferrable. However, the IP High Court partially admitted transferability of publicity rights regarding a baseball team and its players (Heisei 18(ne) No.10072).
An individual’s right of publicity can be licensed for advertisement, distribution of merchandising products, derived goods or productions (films, animations, CD’s, etc.). There is no restriction on whether it must be exclusive.
There are no requirements for validity.
Given the particular nature of publicity rights, a licensor can withdraw the consent to its use whenever the licensor’s image, goodwill or name is objectionable, namely defamatory, obscene or unlawful and/or their reputation damaged. In order to avoid this issue, a clause requiring prior written approval for usage should be included and the possibility to withdraw in case of breach.
Following the death of the licensor, since post-mortem rights do not currently exist in Japan, in principle the contract becomes unenforceable.
The agreement may expressly provide whether the agreement binds successors.
There is no set length of protection or post-mortem rights so the rights are likely to lapse after the death of the assignor.
In the event heirs have an independent right over a deceased individual’s name, image, likeness, or other unequivocal aspects of their identity, a licensing agreement should expressly provide for how to deal with this situation. If there is no express prior clause, the licensee or assignee may be faced without any rights.
Since publicity rights aim to protect financial value, the right of publicity is infringed where use is made without the right holder approval, in cases where the image is used for promoting a product to attract audience or customers.
It is not strictly necessary to prove that that an individual’s name, image, likeness, or other unequivocal aspects of one's identity have a commercial value to obtain an injunction or other remedies for the unauthorized use. However, as an example, the Yokohama District Court (Hensei 1 (wa) No.581) ruled that a poet did not have any right of publicity as poets do not control their name like a celebrity who uses his or her name in order to attract an audience.
The issue of whether the use of a prominent person’s name or likeness is actionable should be determined by weighing the interest in exclusively controlling one’s name or likeness against the guarantee of freedom of expression and the burden that prominent members of society may reasonably be expected to bear.
Use in news report or literary works is guaranteed by freedom of expression. The alleged infringer must demonstrate lack of intent to free ride on the individual’s promotional value.
Limited use of photos and names is allowed with reasonable purpose and extent.
As an example of the current issues that celebrities and others face when exercising their right of publicity when working with luxury brands, the IP High Court found that publicity of Jill Stuart and using their photography without authorization constituted publicity infringement. The infringer was a long term experienced local distributor. This distributor finally obtained trademarks for Jill Stuart by assignment from Jill Stuart brand. However, Jill Stuart terminated the distribution agreement after the trademark assignment. IP High Court found publicity infringement, and recognised that Jill Stuart damages were around JPY1,000,000 (10K USD).
5 . Product placement
There are no legislative provisions on product placement in Japan. The use of “subliminal techniques” in broadcasting is generally prohibited in Japan, although there is no specific regulation regarding surreptitious advertising or product placement.
There are several self-regulation industry bodies which restrict advertising of certain products due to their nature and in order to protect minors. For example, the tobacco industry and alcohol industry have self-regulation.
In the event another party fails to perform the agreement, assuming there is an express agreement regulating the product placement, the damaged party may sue the non-compliant party for breach of contract and IP rights infringement in order to obtain an injunction order and/or damage remedies.
Since there is no restriction on product placement and no criticism against product placement, luxury brands provide a product/brand to Japanese TV or movies at a certain level. As of the present time, there is no specific concern in this respect.
6 . Protection of corporate image and reputation
Publicity and Privacy rights are protected under interpretation of Article 13 of the Constitutional law for the right to “life, liberty, and the pursuit of happiness” and for the right for people to be “respected as individuals.”
There is no case that recognizes the right of publicity for corporations or legal entities.
It is generally possible to include specific clauses in agreements aimed at protecting the corporate image/reputation of one of the parties, under freedom of contract principles. One might include prohibition to sell the products to re-sellers whose image is below a certain defined standard and this clause is common in a selective distribution contract and can be included in a “right of publicity” agreement provided it does not contravene provisions of the Antimonopoly Act.
Prohibition to sell below a certain price, or to do so outside of specific time periods, and prohibition to buy non original – but otherwise legitimate – spare parts and components are both possible, provided it does not constitute an infringement of the Antimonopoly Act.
Article 420-1 of the Civil Code provides that the parties may agree on the amount of the liquidated damages with respect to the failure to perform the obligation. However, if the claiming party has partially contributed to the loss suffered, the principle of contributory negligence will work to reduce the amount of recoverable damages.
For luxury brands concerned about the secondary market, this is protected by First Sale Doctrine, which is not specified in legislation but protected by case law. Repair and reconditioning services are also allowed, however, redesign for sales is not allowed.