Jun 2024

Japan

Law Over Borders Comparative Guide:

Luxury Law

Sections

Scroll down to read the full chapter or click on the headings below to jump to the relevant section.

Contributing Firm

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1 . Trademark

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1.1. Sources of law

The primary sources are national law, as well as international treaties ratified by Japan. The national statutes are principally the Japan Trademark Act and the Unfair Competition Prevention Act (UCPA).

The international treaties applicable to Japan relating to trademarks are:

  • The Paris Convention for the Protection of Industrial Property. 
  • Marrakech Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
  • The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.
  • The Singapore Treaty on the Law of Trademarks.
  • The Trademark Law Treaty.
  • The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.
  • The Anti-Counterfeiting Trade Agreement.
  • The Trans-Pacific Partnership Agreement (TPP).

The hierarchy of sources of law in Japan is as follows:

  • Japanese Constitution.
  • International Treaties.
  • Japanese Laws.
  • Regulatory acts.

This hierarchy of law means that rights guaranteed by the Japanese Constitution, and the international treaty approved by the Japanese Congress, will take precedence when in conflict with domestic laws or regulatory acts.

The Japan Trademark Act has applied a “first-to-file” principle. “Use” per se would not be recognized as a source of trademark rights. Exceptionally, the Trademark Act and the UCPA provide protection to non-registered trademarks if the mark has become “well-known” or “famous” as a result of substantial use.

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1.2. Substantive law

The Japan Trademark Law makes a distinction between “famous” trademark and “well-known” trademark as well as the UCPA. A well-known mark is one that is recognized by a majority of customers in the relevant goods or service in dispute. A famous mark, on the other hand, is recognized by a majority of customers both within and beyond the industry.

For instance: 

  • A junior mark that is identical or similar to a “well-known” or “famous” mark, whether registered or unregistered, shall be unregistrable under the Trademark Act. 
  • Prior use can only be a defense to trademark infringement only where the mark has become “well-known”. 
  • A “famous mark” can be protected against unauthorized use of an identical or similar mark on goods or services that are remotely associated with the famous brand owner’s business under the UCPA.

There are no specific rules or case laws that allow for a broader range of protection for trademarks especially in the “luxury industry”.

In enforcement, the court focuses on assessing the degree of reputation and popularity of the mark claimed to be “well-known” or “famous”, as well as the similarity of the mark under the Trademark Act and UCPA. Even if the mark is found to be “well-known” or “famous”, if there is a low degree of similarity to the accused infringing mark, the court is unlikely to rule in favour of the luxury brand unless there is a likelihood of confusion among relevant consumers. 

The likelihood of confusion is a key factor for brand owners of “well-known” or “famous” marks to enjoy a broader range of trademark protection provided by law. The concept of the likelihood of confusion extends beyond the similarity of marks, but it does not directly aim to prohibit dilution by blurring or tarnishment. Therefore, harm or damage to the “aura of luxury” per se would not significantly impact trademark enforcement.

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1.3. Enforcement

There is no particular list of evidence provided by law for a trademark to be entitled to broader protection.

In trademark cases where the status of being “well-known” or “famous” and the likelihood of confusion are disputed, documentary evidence is regularly produced as follows:

  • Product photos/images bearing the trademark.
  • Product packages (tags/labels), or photos of product packages, bearing the trademark.
  • Product orders, sales contracts, relevant invoices, shipping documents and other transaction documentation bearing the trademark.
  • Advertising materials of the trademark such as advertisements, product catalogues, billboard/signs, magazines, newspapers, exhibition/trade show, etc.
  • Evidence certifying the trademark’s fame such as awards, consumers’ opinions posted on magazines, books, blogs and social networking services (SNS).
  • Sales, market share, and advertising expenses of goods and/or service bearing the trademark in Japan.
  • If the trademark has been authorized to be used by local licensees or distributors, evidence of use by the licensees or distributors.
  • Enforcement records such as cease and desist (C&D) letters, precedent judicial or administrative decisions relating to the trademark.
  • Affidavits duly executed by a person or organization who has knowledge of substantial use of the trademark.

Oral testimony and expert evidence are rarely used, but acceptable forms of evidence.

A trademark can be enforced against unauthorized use and registration of a domain name that contains the registered trademark. For <.jp> level domain name, trademarks registrants can file an Alternative Dispute Resolution (ADR) proceeding with the Japan Intellectual Property Arbitration Center (JIPAC) to seek cancellation of registration and transfer of the domain name, or file a civil action based on the UCPA to seek a stop to the use of the disputed domain name.

A trademark cannot be enforced against a trade name if such trade name is used in a common manner (Article 26(1)(i) of the Trademark Act), or without the purpose of unfair competition or unjust enrichment (Article 26(2) of the Trademark Act, Article 19(1)(ii) of the UCPA).

If other distinctive signs are commercially used in a conceivable manner to indicate a source of goods or services, then it may become trademark infringement.

Recent court decisions have upheld that the use of trademarks in “description metatag” constitutes infringement under the Trademark Act and UCPA. However, the court has denied infringement of trademarks used in “keyword metatag”.

If a trademark is used to advertise goods or services that are unrelated to those of the trademark owner on social media, it may constitute trademark infringement. Besides, if a famous mark is used without authorization on social media to cause dilution or mislead the public regarding an affiliation between the trademark owner and the account holder, there may be claims available under the UCPA.

In general, a trademark cannot be enforced where a third party’s trademark is not used as a source identifier in comparative advertisements.

Instead, the trademark owner may seek other claims as provided under Article 2(1)(xx) of the UCPA, as well as other advertising-related regulations under the Unjustifiable Premiums and Misleading Representations Act, if any statements in the advertisement are untrue or misleading.

The Japanese Court maintains its position of not granting special consideration to unauthorized trademark use in parody.

The same criteria have been used to assess whether the parody mark constitutes trademark infringement under the Trademark Act and UCPA. Successful parody is carefully crafted to avoid confusion with famous trademarks. As a result, courts may dismiss claims of trademark infringement if they find that there is less likelihood of confusion.

A trademark owner can take action claiming both trademark infringement and unfair competition for the same set of facts. It is also possible to bring parallel and/ or separate proceedings. To establish a mark as “well-known” or “famous” under the UCPA, it is essential to demonstrate actual and substantial use of the trademark in judicial actions, although this is not a requirement for a trademark infringement claim.

Recent issues that luxury brands face in expanding and protecting their trademark rights in Japan include:

  • Proper protection of trademark rights in virtual environments (metaverse, non-fungible token (NFT), and so on).
  • Border enforcement at the Japan Customs under the revised act enforced on October 1, 2022. Goods bearing an infringing trademark imported for private use can be blocked at the border provided that it was exported by a foreign business entity.
  • Struggle with trademark parody to prevent prestigious luxury brands from dilution.
  • Trademark registration of unique color(s). In a series of Louboutin’s legal challenge to claim exclusive right over red soles, the Japan IP High Court, on the heels of the dismissal of Louboutin’s infringement claim on December 26, 2022, affirmed the JPO rejection to TM Application no. 2015-29921 for a red-colored mark in sole and ruled Louboutin’s red soles shall be unregistrable due to a lack of distinctiveness under the Trademark Law on January 31, 2023 (Court case no. Reiwa 4(Gyo-ke)10089).
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2 . Copyright

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2.1. Sources of law

The primary sources of law and regulation relating to copyright are national law, as well as international treaties ratified by Japan. The national statutes are principally the Japan Copyright Act.

The international treaties applicable to Japan relating to copyright are:

  • The Berne Convention.
  • The Universal Copyright Convention.
  • The International Convention for the Protection of Performances, Producers of Phonograms and Broadcasting Organisation.
  • The Geneve Phonograms Convention.
  • WIPO Copyright Treaty.
  • WIPO Performances and Phonograms Treaty.
  • The Beijing Treaty on Audiovisual Performances.
  • The Anti-Counterfeiting Trade Agreement.
  • Marrakech Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
  • The Trans-Pacific Partnership Agreement (TPP).

The hierarchy of sources of law in Japan is as follows:

  • Japanese Constitution.
  • International Treaties.
  • Japanese Laws.
  • Regulatory acts.

This hierarchy of law means that rights guaranteed by the Japanese Constitution, and the international treaty approved by the Japanese Congress, will take precedence when in conflict with domestic laws or regulatory acts.

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2.2. Substantive law

Article 2(1)(i) of the Copyright Act defines copyrightable work as a “a creatively produced expression of emotion or ideas that falls within the literary, academic, artistic, or musical domain”. 

The Copyright Act lists examples of nine categories of copyrightable works under Article 10(1) as follows:

  • novels, scenarios, articles, lectures, and other literary works;
  • musical works;
  • works of choreography and pantomime;
  • paintings, woodblock prints, sculptures, and other works of fine art;
  • works of architecture;
  • maps and other diagrammatic works of an academic nature, such as plans, charts, and models;
  • cinematographic works;
  • photographic works; and
  • works of computer programming

It is commonly understood that copyright protection is limited to original works of authorship, excluding mass-produced products. Therefore, objects of industrial, fashion, or accessory design are typically not eligible for copyright protection unless they are classified as a “work of art”.

Based on recent decisions by the IP High Court, industrial, fashion, or accessory designs may be eligible for copyright protection as a “work of art” if they possess the fundamental elements of a copyrightable work, namely “creativity” and “expression of human emotion or ideas”, in addition to having artistic value that is physically separable from the composition needed to achieve the practical function and purpose of the object.

The rights of reproduction, stage performance and musical performance, on-screen presentation, transmission to the public, recitation (limited to literary work), exhibitions (limited to artistic work or unpublished photographic work), distribution (limited to cinematographic work), transfer (except a cinematographic work), rental (except a cinematographic work), translation and adaptation, and exploitation of a derivative work (original author) are covered by copyright (Articles 21 to 28 of the Copyright Act).

The Copyright Act provides protection of author’s moral rights under Articles 18 to 20, including the rights of public disclosure, preservation of integrity or identity of the work, and attribution of authorship. The moral rights are exclusive to the author, and inalienable (Article 59).

The Copyright Act allows a legal entity, organization, or individual to be considered the “author” of the work created by their employee and own copyright in the work, provided that all of the following conditions are met:

  • the work is created by an employee within the scope of employment, subject to the employer’s supervision;
  • the work is published in the name of the employer (except computer program); and
  • there is no separate or particular contract or employment regulation providing that the status of the author, or ownership of the copyright of, the work-for-hire should belong to the employee.

Consultants, shareholders and suppliers are not considered “employees”, and thus the legal entity has to make a contract to acquire the rights in the work created by them.

If a shareholder or director is considered to be an “employee”, the work for hire presumption will apply. 

A copyright assignment agreement does not need to meet any specific formal requirements to be valid.

However, to establish copyright ownership against a third party, registration with the Japan Agency for Cultural Affairs (or the Software Information Center (SOFTIC) only for computer programs) is required.

The author cannot transfer and waive his/her moral rights.

Copyright protection lasts for the life of the author plus 70 years after their death. 

Anonymous or pseudonymous works as well as works for hire are protected for 70 years after they are made public. However, if the works have not been made public within 70 years of their creation, the protection term is then for 70 years after their creation.

The Berne Convention adopts the principle of reciprocity regarding the term of protection. Therefore, if the term of protection in the country of origin is shorter than the term mentioned above, the shorter term of protection will be applied (Article 58 of the Copyright Act).

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2.3. Enforcement

The Copyright Act does not impose an obligation of copyright registration, copyright deposit, or copyright notice when enforcing copyright. Therefore, failure to make a copyright deposit, or to display a copyright notice, would not have a detrimental effect on copyright enforcement.

Objects of industrial designs are capable of protection by copyright provided that they possess the fundamental elements of a copyrightable work, namely “creativity” and “expression of human emotion or ideas”, in addition to having artistic value that is physically separable from the composition needed to achieve the practical function and purpose of the object.

Copyright infringement is determined by demonstrating that the infringing party created their work based on the earlier copyrighted work, and that there is significant similarity between the two works. Infringement can be established without actual copying, as long as there is substantial similarity to the copyrighted work.

Copyright can be enforced against a trademark, registered design, patent, domain name, trade name, pseudonym, or other IP rights.

Article 29 of the Trademark Act provides that trademark right is unenforceable against copyright that exists prior to the trademark application filing date. Likewise, Article 26 of the Design Act provides that design right cannot be enforced against copyright that exists prior to the design application filing date. 

There is no specific provision regarding the enforceability of copyright against other intellectual property rights such as patents, domain names, trade names, pseudonyms. However, the consent of the copyright holder will be necessary if these IP rights conflict with earlier copyright.

Copyright can be enforced against unauthorized use in social media or comparative advertising if the infringing party created the content based on an earlier copyrighted work and there is significant similarity between them.

The Copyright Act does not provide a statutory exception for parody. However, the Supreme Court of Japan ruled on March 28, 1980 that copyright (moral rights) can be enforced against its unauthorized use in parody if the infringing work obviously contains the unique artistic features of the original copyrighted work. 

The Copyright Act includes a range of exceptions and defenses available to an alleged infringer, as outlined in Articles 30 to 49. For instance, reproduction for private use; exploitation of incidentally captured works; exploitation of a work as part of an investigation; reproduction in libraries; fair quotation; broadcasting of educational programs for schools; stage performances for non-commercial purposes; reprinting of editorial commentary on current affairs; ephemeral fixation by a broadcaster or cable caster; exhibition of an artistic work by the owner of the original; exploitation by means of translation and adaptation; reproduction by the owner of a copy of computer programs.

A valid copyright can be deemed unenforceable owing to misconduct by the copyright holder based on the theory of abuse of rights under the Civil Code.

There is no time limit for seeking injunctive relief in an infringement action. However, a claim for damages must be brought within three years from when the copyright holder became aware of such damages and the entity who caused it, or 20 years from the act of infringement.

Recent issues that luxury brands face in expanding and protecting their copyrights in Japan include:

  • Proper protection of copyright against generative AI (artificial intelligence) created content.
  • Border enforcement at the Japan Customs under the revised act enforced on October 1, 2022. Infringing copyrighted materials imported for private use can be blocked at the border provided that they were exported by a foreign business entity.
  • Copyright protection to industrial design. Japanese courts have been strict not to expand copyright protection on industrial articles. But recent judicial decisions admit copyright protection to such articles, provided that they possess the fundamental elements of a copyrightable work in addition to having artistic value that is physically separable from the composition needed to achieve the practical function and purpose of the article. For luxury brands that attract consumers with their unique, elaborate and luxurious design, it is worthwhile to claim copyright infringement apart from trademark; design infringement if the article meets with the requirement.
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3 . Design

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3.1. Sources of law

The primary sources of law and regulation relating to designs are national law, as well as international treaties ratified by Japan. The national statutes are principally the Japan Design Act, the Copyright Act, and the Unfair Competition Prevention Act (UCPA). Supreme Court precedents substantially function as sources of law.

The international treaties applicable to Japan relating to designs are:

  • The Paris Convention for the Protection of Industrial Property. 
  • Marrakech Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
  • The Berne Convention for the Protection of Literary and Artistic Works.
  • The Locarno Agreement Establishing an International Classification for Industrial Designs.
  • The Hague Agreement Concerning the International Registration of Industrial Designs.
  • The Anti-Counterfeiting Trade Agreement.
  • The Trans-Pacific Partnership Agreement (TPP).

The hierarchy of sources of law in Japan is as follows:

  • Japanese Constitution.
  • International Treaties.
  • Japanese Laws.
  • Regulatory acts.

This hierarchy of law means that rights guaranteed by the Japanese Constitution, and the international treaty approved by the Japanese Congress, will take precedence when in conflict with domestic laws or regulatory acts.

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3.2. Substantive law

The subject matter protected under the Design Act is the shape, pattern, color, or combination of these attributes in an article that produces an aesthetic impression on the consumer’s sense of sight. The term “article” refers to tangible movable properties. From April 1, 2020, the “graphical user interface (GUI)” design that are not stored or indicated on articles, “building” designs, and “interior” consisting of multiple articles, walls, floors, ceilings and the like can be newly registered under the Design Act.

Unregistered designs cannot be protected under the Design Act, but under the UCPA, it is prohibited to commercially assign, rent, display, export or import a product that imitates the configuration of another party's product (Article 2(1)(iii) of the UCPA, “dead copy” provision). This includes the external and internal shape of the product, as well as the pattern, color, gloss, and texture combined with the shape, which can be perceived by consumers who use it in an ordinary way (Article 2(4) of the UCPA). This prohibition applies even if the design is unregistered and lasts for three years from the day it was first sold in Japan (Article 19(1)(v) of the UCPA). A design, both registered and unregistered, is protectable under the Copyright Act as well if it is considered copyrightable works, e.g., fine arts, architecture, photography.

To obtain a valid registered design right under the Design Act in Japan, a design must possess novelty and creativity, as well as produce an aesthetic impression on the consumer’s sense of sight. Prior to filing a design application, the design must not be identical or similar to a publicly known design in Japan or abroad, or described in a publication circulated in Japan or abroad, or made publicly accessible through the internet. Additionally, the design must not be identical or similar to an earlier design registration.

Besides, a design must not be easily created by a person with ordinary skill in the relevant field from a publicly known shape, pattern, color, combination of these attributes, or images. This includes designs that have been described in publications distributed in Japan or abroad, or made publicly accessible through the internet.

Intellectual property rights, such as patents, utility models, and designs, belong to their creators as a fundamental principle of Japanese law. Therefore, employees have an inherent right to obtain registration for their designs. However, the revised Design Act, which was enacted in April 2016, allows for the validity of a pre-design assignment agreement with the employee or company regulation that expressly provides for the assignment of any and all future service designs to the employer by employee-creators. By entering into an agreement or company regulation, a legal entity has the right to register the design created by its employee. The law ensures that employees are entitled to “reasonable compensation” from a legal entity. 

Directors are considered employees, and therefore a legal entity can acquire the rights to the design created by directors through pre-design or post-design assignment agreements or company regulations.

To obtain the design, a legal entity must secure an assignment from consultants, shareholders, and suppliers through a separate agreement. This is because they are not considered employees.

A design assignment agreement does not need to meet specific formal requirements to be considered valid, as long as the parties involved agree to the assignment.

For the design assignment to be effective, the assignment must be recorded with the Japan Patent Office (JPO). Therefore, it is necessary to decide who will take action to the JPO and bear expense incurred to the record if taken after filing the design application.

When drafting a pre-design assignment agreement with employees, it is important to avoid designs created by the employee that are unrelated to their current or past duties, or beyond the scope of the employer’s business. Article 15(3) of the Design Act allows for the invalidation of any condition that provides for the assignment of future “non-service” designs to the employer prior to their creation.

If a design is not protectable under the Copyright Act, the designer will not have moral rights.

Since April 1, 2020, the Design Act has extended the protection for registered designs by an additional five years, resulting in a total of 25 years.

Under the UCPA, protection for unregistered designs lasts for three years from the date of first sale in Japan.

Copyrightable designs, whether registered or unregistered, can be protected under the Copyright Act for 70 years after the creator’s death.

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3.3. New technologies

Although NFT art replicating real clothing designs is gaining popularity on the Japanese NFT market, legislation and discussions regarding it are still in their early stages. Using a registered brand or product name without permission is considered a trademark violation. Currently, there are few companies that have registered trademarks specifically for NFT imitations. To reduce the risks, the company must register NFT-related products. However, it is uncertain how much protection will be provided in cases where the brand name is only mentioned in the product description. For trademark infringement to be recognized, two requirements must be met. Firstly, the registered trademark or something similar must be used. Secondly, there must be similarity in the products or services being offered. Regarding NFT art that replicates the design of tangible clothing, it may not meet the requirement of similarity in products between the clothing and NFT art. Therefore, a possibility exists that trademark infringement will not be established.

Article 30-4 of the Copyright Act, amended in 2018, permits the free use of copyrighted works to the extent considered necessary where the intended use of such works is not the enjoyment of the ideas or emotions expressed therein. This includes raw data that is fed into a computer programme to carry out deep learning activities, forming the basis of artificial intelligence. Recently, there has been concern that generative AI tools may be able to create deliberate and recognizable imitations of the personal style of a designer with prestige in the luxury market. This is believed to be unprotectable under design right, copyright, and unfair competition laws.

Following the amendment of the Payment Services Act in 2020, the Japan Patent Office (JPO) now recognizes “cryptocurrencies” as an appropriate term for finance-related services in class 36 (management of crypto assets) and class 42 (cryptomining).

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3.4. Enforcement

Using an identical or similar design without authorization from the owner of the registered design constitutes an infringement of design rights under the Design Act. Actual copying is not required to establish infringement, as long as the design is registered in Japan. 

The assessment of design similarity is based on the aesthetic impression of designs as perceived by relevant consumers and traders, in particular by paying close attention to the design features that distinguish them from the prior designs. This takes into account factors such as the resemblance of the usage and function of articles, graphic images or buildings on which the respective design is used, as well as an objective and comprehensive comparison of similarities and differences between the registered design and the accused infringing design. 

If the accused infringing design uses the registered design or a similar design on its component, it constitutes design infringement, even if the article itself is distinct from the registered design.

In the meantime, regarding the protection of unregistered designs under the “dead copy” provision of the UCPA, the compared designs must be almost identical (imitation).

In general, a design can be enforced against a trademark, a registered design, a design patent, a patent, a domain name, a trade name, or other IP rights if they infringe or make use of the design. However, according to Article 26 of the Design Act, a registered design or a design similar to the registered design may not be enforced against another’s trademark, design, patent, copyright, or utility model if an application for the foregoing was filed earlier than the filing date of the registration of the design concerned. In case of conflict between the design right and other person’s patent right, utility model right, trademark right, copyright, the owner of the registered design in question shall not commercialize the design without permission from the owner of the earlier design right, patent right, utility model right, trademark right or copyright.

Since April 1, 2020, the “graphical user interface (GUI)” design has been applied for registration in Japan. In cases where a user promotes products on social media by using a similar GUI, it may constitute design infringement.

Merely using images in advertising of an article or building on which design registration is admitted renders it unenforceable. However, if the advertising uses identical or similar images with a registered GUI, it may constitute design infringement.

If a parody uses a registered design or a similar design and the article on which the parody was represented is the same as the registered design, the holder can take action against its unauthorized use in parody under the Design Act.

Under our jurisdiction, the following defenses are available to an alleged infringer if applicable:

  • use of publicly known or used design (prior use);
  • invalidity of design right;
  • exhaustion of design right;
  • creation of the design by the alleged infringer; and
  • abuse of design right.

There is no “repair clause” in Japan nor are there any comparable limitations. 

A valid registered design can be deemed unenforceable owing to misconduct by the design holder based on the theory of abuse of rights under the Civil Code. 

There is no time limit for seeking injunctive relief in an infringement action. However, a claim for damages must be brought within three years from when the design holder became aware of such damages and the entity who caused it, or 20 years from the act of infringement.

A design holder can take action claiming design and copyright infringement, as well as unfair competition, for the same set of facts.

There are no statutory regulations regarding the bringing of parallel and/or separate proceedings for copyright infringement and unfair competition in court.

Current issues that luxury brands face in expanding and protecting their design rights include:

  • Proper protection of design rights in virtual environments (the metaverse, NFTs, and so on).
  • Border enforcement at the Japan Customs under the revised act enforced on October 1, 2022. Articles representing an infringing design imported for private use can be blocked at the border provided that it was exported by a foreign business entity.
  • Multiple designs in one application, introduced since April 1, 2020. There is no limitation regarding the number of designs or Locarno classification, unlike the European Community design system.
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4 . Right of privacy, publicity and personal endorsement

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4.1. Sources of law

The Japan law recognizes 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 legal source for the right of publicity. It is recognized by judicial precedents based on general provisions of the Constitution, the Civil Code, or both.

Article 13 of the Constitution provides “All of the people shall be respected as individuals. Their right to life, liberty, and the pursuit of happiness shall, to the extent that it does not interfere with the public welfare, be the supreme consideration in legislation and in other governmental affairs."

Article 709 of the Civil Code provides “A person who has intentionally or negligently infringed any right of others, or legally protected interest of others, shall be liable to compensate any damages resulting in consequence.”

In accordance with the provisions, Article 4(1)(viii) of the Trademark Act prohibits the registration of a trademark that contains the name or representation of any person without their consent.

Major amendments to the Personal Information Protection Act (PIPA) came into force on April 1, 2022, requiring companies to take additional measures to protect personal data. The Amendment expands the scope of businesses covered under the act even further. The prior law indicated that it only applied to business operators that stored the information of at least 5,000 identifiable individuals on at least one day during the previous six months. Now, there is no minimum limit on the database size. Luxury brands managed by foreign companies that provide goods or services to Japanese consumers and businesses, will all be subject to all obligations and restrictions under the PIPA, including investigations and administrative orders. Previously, such investigations and orders were limited to companies located in Japan.

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4.2. Substantive law

The Supreme Court upheld the proprietary aspects based on the commercial value of a person’s name, portraits and the like are protectable under the right of publicity, namely, “the right to exclusively utilize one’s attractiveness to customers” in its ruling on February 2, 2012.

In this respect, to claim a right of publicity, individuals must be distinguished or a celebrity, such as actors, performers, singers, or athletes. It is not required for individuals to commercialize their name, portraits, and the like to be protected. However, it is necessary to demonstrate that the sole purpose of unauthorized use of his/her name, portraits, and the like is to take advantage of the customer appeal.

Protection is granted to both Japanese and foreign individuals. 

The right of publicity is “derived from” a personal right that has been construed untransferable, and unprotectable after the person’s death. There is no judicial precedent admitting some form of independent rights over that individual’s name, image, likeness, or other unequivocal aspects of his/her identity belonging to the heirs.

In the meantime, there is a controversy over legal protection to the proprietary nature of a celebrity apart from moral rights even after their death. There are a few lower court decisions that admit transferability of proprietary aspect of the right of publicity to be inheritable (e.g. Tokyo District Court decisions on February 12, 2014). Some lower court decisions have acknowledged the transferability of the proprietary aspect of the right of publicity (e.g. Tokyo District Court decisions on December 18, 2022).

An individual can license his/her right of publicity at will. There are no legal restrictions on whether it must be exclusive or not.

There are no statutory requirements to validate an agreement for the assignment or license of the right of publicity.

Due to the specific nature of publicity rights, a licensor has the right to withdraw their consent to the use of their image, goodwill or name if it is deemed objectionable, defamatory, obscene, unlawful or if it damages their reputation. To prevent this issue, it is recommended to include a clause that requires prior written approval for usage and allows for withdrawal in case of breach.

Following the death of the licensor, when it occurs while the license agreement is still in force, as the right of publicity is construed untransferable, the license agreement will be terminated upon the licensor’s death.

If a law does not allow for the transfer of the proprietary aspect of the right of publicity, the license agreement will end when the licensor dies and will not be binding on their successors.

Following the death of an assignor, in principle, the right of publicity cannot be assigned. 

If a law allows for the assignment of the proprietary aspect, the death of an assignor would not affect the validity of the assignment. The licensee will be able to claim their position and legal interest in accordance with the license agreement.

Any heirs would not have independent rights over the deceased individual’s name, image, likeness, or other unequivocal aspects of their identity, as well as the assignee or licensee in principle.

If a law permits the inheritance of the proprietary aspect of the right of publicity, it is argued that it should expire 50 years after the individual’s death, in line with the Copyright Act.

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4.3. Enforcement

Considering that the Supreme Court recognized the protection of the right of publicity based on the commercial value of a person’s name, portraits, and similar aspects in its ruling on February 2, 2012, the right of publicity can only be enforced against the commercial use of an individual’s name, image, likeness, or other unequivocal aspects of their identity. Therefore, the right of publicity is only infringed when these are used to promote a product and attract audiences or customers without the individual’s approval.

The Supreme Court has ruled that using an individual’s name, image, likeness, or other clear aspects of their identity without authorization constitutes a violation of their right to publicity and is illegal under tort law. This is particularly relevant when the intention is mostly to leverage the individual’s customer appeal. For instance, when images are (i) used in relation to goods or service; (ii) affixed to goods or service to differentiate them from others; or (iii) employed for advertising goods or service.

In this respect, it is requisite for the individual to demonstrate a certain level of “customer appeal” bestowed on his/her name or image in order to obtain an injunction or other remedies for the unauthorized use.

The following defenses are available to the alleged infringer.

  • Lack of intention to take most advantage of the individual’s customer appeal: the Supreme Court ruling on February 2, 2012.
  • Infamousness of the individual: the Supreme Court ruling on February 2, 2012.
  • Private use of the individual’s image: Article 30 of the Copyright Act.
  • Reporting of current events: Article 41 of the Copyright Act.
  • Use of the infringer’s self-name: Article 19(1)(ii) of the UCPA.

On February 20, 2020, the Japan IP High Court acknowledged that there had been a violation of Jill Stuart’s right of publicity in a dispute over the unauthorized use of photography by the ex-distributor and trademark owner of the fashion brand Jill Stuart in Japan. As a result, Jill Stuart was awarded damages of approximately JPY 1,000,000 (USD 10,000).

According to Article 4(1)(viii) of the Trademark Act, an individual’s name and image cannot be registered if it coincides with another living person’s name without their consent. This provision has prevented famous fashion designers working with luxury brands from registering their names as trademarks without consent if there is another person with the same name. From April 1, 2024, individuals whose names are widely recognized as a source indicator for their business may register their name without the consent of another person with the same name.

Due to the rising number of counterfeit goods being imported for private use, the revised act, which came into force on October 1, 2022, now restricts counterfeits that were exported from a foreign country via postal mail by a business entity, even if they were purchased by a private person in Japan. This constitutes trademark infringement at the time when they enter the territory of Japan.

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5 . Product placement

There is no legislation in Japan to directly regulate product placement. 

In the meantime, “stealth marketing”, a practice in which companies promote their products or services while concealing the fact that it is an advertisement, was added to the list of misrepresentations prohibited under the Act against Unjustifiable Premiums and Misleading Representations on October 1, 2023.

If the communication is not only product placement but also stealth marketing, it will be subject to the new regulation to protect consumers against misleading advertising.

The new law applies to all forms of media, including television, newspapers and the internet. The regulation requires advertisements to prominently display phrases such as “advertisement”, “promotion” and “PR” in order to distinguish them from stealth marketing. The regulation focuses on marketing methods that are difficult to recognize as advertising or paid promotion, targeting companies rather than influencers or others who paid for social media promotion. The Consumer Affairs Agency will assess the involvement of companies in social media posts to determine if they qualify as advertising or promotion, including instructions given to promoters or confirmation of fulfilment requirements. In cases where individuals promote products or services without direct company instruction, the agency will investigate previous interactions and relationships to uncover potential violations. If the agency identifies violations, they may ban an advertisement, or request measures be taken to inform the general public of the violation and to prevent recurrences.

If the other party fails to comply with the product placement agreement, the brand owner may sue the other party for breach of contract and infringement of intellectual property rights, and may seek injunctive relief and damages.

With the enforcement of the new ban on stealth marketing, there may be more cases for luxury brands to be involved in the agency’s investigation of social media posts by influencers. To avoid controversial “stealth marketing”, it is advisable to clearly label your advertising as “advertising”.

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6 . Protection of corporate image and reputation

By court case rulings, the right of publicity and privacy has been found to be implicit in other constitutional protections under Article 13 of the Constitution that provides the right for a citizen to be “respected as individual” and their right to “life, liberty, and the pursuit of happiness” as a fundamental human right. There is no statutory law that explicitly aims to protect the right of publicity and privacy in Japan. It has been interpreted and commonly believed that the right of publicity and privacy is applicable only to individuals. There is no precedent to support the right of publicity and privacy extending to legal entities and corporations.

In terms of legislative or litigation challenges regarding environmental issues, aiming to achieve the reduction of greenhouse gas emissions to net zero (carbon neutrality) by 2050, the Japanese government newly revised the Promotion of Global Warming Countermeasures Act which came into force in April 2022, and the Act on Rationalizing Energy use and Shifting to Non-fossil Energy effective on April 1 ,2023.

With respect to diversity and inclusion, on October 25, 2023, the Supreme Court concluded that a law requiring citizens to undergo sterilization before changing their legal gender was unconstitutional, in a sign of progress for transgender rights advocates. The decision is the first by the top court to find Japan’s rules on legal gender change at odds with the constitution, and highlights the growing rift between public opinion and the government on LGBTQ rights. Same-sex marriage has been a hot issue in Japan for years now. Five lower court-rulings on same-sex marriage have been handed down in Japan over the past two years — two concluding the ban was unconstitutional, one saying it was not, and two upholding the ban but raising other rights concerns. The Act on Promotion of Women’s Participation and Advancement in the Workplace, aimed at promoting gender equality in the workplace and increasing the participation and advancement of women in the workforce, was revised in April 2022. The new law requires employers with more than 101 employees to set numerical targets for the percentage of women in management positions, and to publish their progress towards achieving those targets.

Accessibility to physical retail facilities is legislated for by the Accessible Building Act: enacted in 1994, it aims to promote and introduce architectural designs for public buildings that are easily accessible and usable by the elderly and physically disabled.

Website accessibility is legislated for by the Act for the Advancement of Facilitation Program for the Use of Telecommunications and Broadcasting Services by Disabled Persons, which aims to achieve an “information barrier-free” society and to enable disabled people to benefit from the increasing availability of information by broadcasting TV programmes with subtitles or programmes with audio narration, etc. 

Generally, it is possible to include specific clauses in agreements that aim to protect the corporate image or reputation of one of the parties, as a matter of the Freedom of Contract principle. 

  • One might include: the prohibition to sell the products to re-sellers whose image is below a certain defined standard. This clause is often found in selective distribution contracts and may also be included in a “right of publicity” agreement, as long as it does not violate the Antimonopoly Act.
  • The prohibition to sell below a certain price or to do so outside of specific time periods: a possible inclusion, but there is a risk of violating the Antimonopoly Act if suppliers take on inventory risks directly.
  • The prohibition to buy non-original — but otherwise legitimate — spare parts and components: a possible inclusion, but there may be a violation of the Antimonopoly Act unless such prohibition is necessary to achieve a specific technical function of the products and goes beyond what is necessary.
  • Article 420(1) of the Civil Code allows parties to agree on the liquidated damages in case of failure to perform their obligation. However, even if the damage is partially the claimant’s fault, this would not make the agreement unenforceable. Instead, the court will reduce the recoverable damages in accordance with the principle of contributory negligence.

Due to their high popularity and premium pricing, even second-hand luxury brands are often sold outside of their exclusive commercial channels. Luxury brands face the issue of unauthorized custom services using genuine second-hand goods that cause a false impression as if the customized products are new and limited from the owners of luxury brands.

EXPERT ANALYSIS

Chapters

Australia

Belinda Breakspear
Harriet Young

China

Lina Li
Yunze Lian

Germany

Dr Wiebke Baars

India

Dhruv Anand
Nimrat Singh
Sampurnaa Sanyal
Udita Patro
Pravin Anand

Italy

Fabrizio Jacobacci

Lebanon

Julien Khoury
Nisrine El Haddad
Patricia Seaiby
Rany Sader

Mexico

Ricardo R. Díaz Cisneros

Netherlands

Herwin Roerdink
Tjeerd Overdijk

South Korea

Clare Ryeojin Park
Dae Hyun Seo
Won Joong Kim

Spain

Eleonora Carrillo
Ignacio Martínez
Rafael Linage

Sweden

Helena Brännvall
Karin Crafoord
Magnus Henning

Thailand

Adele Marchal
Chanapa Thussanasumrit
Munif Chaipanya
Orranat Suvarnasuddhi
Pawat Varapirom

Ukraine

Dmytro Stefanovych
Ganna Prokhorova
Ilona Boliubash

United Kingdom

Simon Miles

United States

Alan Behr
Tod Melgar

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