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Japan: Tighter controls on the influx of counterfeit goods and abolition of two-step payment of individual fees

Jul 19, 2022


Japan: Tighter controls on the influx of counterfeit goods and abolition of two-step payment of individual fees


 



The enforcement date for the provisions of the Law Partially Amending the Patent Law made in May 2021 have been finally determined for the following items (1-4), and the information on prepayment has been updated.

 

1. A revision in the Japanese Design Law and Japanese Trademark Law makes it illegal for foreign businesses to bring counterfeit products into Japan. Specifically, it is stated that “the act of importing shall include the act of having a person in a foreign country bring it into Japan from a foreign country using another person.” (Effective date: October 1, 2022)

2. The requirements for restoration of patent rights that have lapsed due to the expiration of a procedural period have been relaxed from “having a justifiable reason” to “not being caused by willful misconduct. In addition, a fee for restoration will be collected from those who wish to be subject to the provisions for restoration of rights. (Effective date: April 1, 2023)

3. With regard to review of service of transcripts of registration examinations for international design and trademark applications, WIPO will be notified by electronic data of a certified copy of the registration decision addressed to the overseas applicant and a statement of the grant of protection stating the expected date of registration of establishment in a single electronic file. (Design Law effective October 1, 2021, Trademark Law effective April 1, 2023)

4. With regard to individual fees for international applications for trademark registration under the Madrid Protocol, the two-step payment system has been abolished and a lump-sum payment system is now available. (Effective date: April 1, 2023)

5. Revision of prepayment

(1) Abolition of prepayment by patent revenue stamps (October 1, 2021)

As a transitional measure, prepayment by patent revenue stamps will remain in effect for a period not exceeding two years from October 1, 2021, until a date specified by government ordinance. The abolition of prepayment by patent revenue stamps is expected to take place in the first half of fiscal year 2023.

(2) Introducing prepayment by bank transfer (cash payment) (October 1, 2021)

(3) Introducing credit card payment at the JPO counter (April 1, 2022)

(4) Introducing prepayment using internet application software (electronic cash prepayment) (January 2023)

 

For more details, please click here

 

Act for Partial Revision of the Patent Act, etc.

Tighter controls on the influx of counterfeit goods from abroad.

A revision in the Japanese Design Law and Japanese Trademark Law makes it illegal for foreign businesses to bring counterfeit products into Japan. Recently, however, there has been a rapid increase in the number of cases in which overseas business entities sell or directly send small quantities of counterfeit goods by mail to individuals residing in Japan. In this case, since importing counterfeit goods for personal use does not constitute an infringement, these goods cannot be confiscated by customs in Japan making it difficult to control the influx of counterfeit goods from abroad. As a result, the amendment will be introduced to define the direct sending of counterfeit goods by an overseas business to a person in Japan as an act of design right infringement or trademark right infringement from the time the goods reach Japan.

 (1) Revision of the definition of the working of a design

The act of “importing” as defined in the definition of the working of a design shall include the act of a foreign person causing another person to bring into Japan from a foreign country (by another person other than himself, such as a mailing agent) (Article 2(ii)(1) of the Intellectual Property Law).

 (2) Revision of the definition of trademark use

The act of importing as defined in the definition of trademark use shall include the act of a foreign person causing another person to bring into Japan from a foreign country (by another person other than the foreign person himself, such as a mailer) (Article 2(7) of the Commercial Code).

 

Relaxation of Requirements for Restoration of Patent Rights

Regarding the restoration of proceedings, the current operation is based on a strict interpretation of having a justifiable reason and has been pointed out as being too strict compared to the industrial property systems of major countries, as Japan’s approval rate is prominently low at around 10-20%, while the approval rate is over 60% in countries that adopt the reasonable care standard. In addition, when each country tries to obtain rights, a situation in which only Japan’s rights are not adequately protected can be anticipated.

Therefore, in order to increase the approval rate, reduce the burden on applicants, and improve the predictability of applications for restoration, the current law is to be revised to one that allows restoration of rights if it is recognized that the lapse of time was unintentional.

 

  Fees collected to recover rights in Japan

  



The procedures to be covered are as follows:

 (1) Translation of a written application in a foreign language (Patent Law)

In the case of a written application in a foreign language, a translation of the foreign language document and the abstract in a foreign language may be submitted within a certain period of time if the failure to submit the translation within the prescribed period is deemed to be unintentional (Special Article 36-2(6)).

 (2) Translation of international patent application filed in foreign language (Patent Law, Utility Model Law)

In the case of an international patent application filed in a foreign language, a translation of the description, etc., drawings and abstract may be submitted within a certain time limit if the failure to submit the translation within the prescribed time limit is found to be unintentional (Article 184-4(iv) of the Patent Act and Article 48 4④).

 (3) Priority claims based on patent applications and priority claims under the Paris Convention (Patent Law, Utility Model Law, Design Law)

If the failure to file a patent application within the priority period is deemed to be unintentional, a priority claim based on a patent application, etc., or under the Paris Convention may be made within a certain period of time. ((Special Article 41①1, Special Article 43-2①, Special Article 43-3③, Real Article 8①1, Special Article 43-2① and Special Article 43-3③ as applied mutatis mutandis under Real Article 11①, Special Article 43-2① and Special Article 43-3③ as applied mutatis mutandis under Intention 15①)

 (4) Request for application examination (Patent Law)

If it is found that the failure to file a request for examination of a patent application within the time limit for filing such a request was unintentional, such request may be filed within a certain time limit (Article 48-3(5) of the Patent Act).

 (5) Restoration of patent right by additional payment of patent fees, etc. (Patent Law, Utility Model Law, Design Law)

In the case of late payment of patent fees, etc., if it is found that the failure to make such late payment within the prescribed period was unintentional, such late payment may be made within a certain period of time (Special Article 112-2(1); Article 33-2(1); Intention Article 44 2①)

 (6) Relaxation of requirements for restoration of trademark rights

   (i) Restoration of trademark rights

Where it is deemed that the failure to renew the duration of a trademark right within the period from six months prior to the expiration of the duration of the trademark right to the date of expiration was unintentional, such application may be filed only within a certain period. (Article 21(i) of the Commercial Code).

  (ii) Restoration of trademark rights by additional payment of late divisional registration fee, etc.

Where it is found that the failure to pay the late registration fee for divisional registration and registration surcharge within 6 months after the expiration of 5 years before the expiration of trademark right was unintentional, the late registration fee for divisional registration and registration surcharge may be paid within a certain period of time (Article 41-3(i) of the Commercial Code).

  (iii) Application for registration of renewal of duration of right based on defensive mark registration

Where it is found that the failure to file an application for registration of renewal during the period from 6 months prior to the expiration of the duration of the right based on defensive mark registration to the expiration date was unintentional, an application for registration of renewal may be filed only within a certain period (Article 65-3(3) of the Commercial Code).

  (iv) Application for registration of renewal

If it is found that the failure to file an application for registration of renewal within the time limit for filing an application for registration of renewal was unintentional, an application for registration of renewal may be filed within a certain time limit (Article 3(iii) of the Commercial Supplementary Provisions).

 

 (7) Special provisions concerning patent administrators for overseas residents

Where it is deemed that the failure to notify the appointment of a patent administrator in an international patent application within the prescribed period is unintentional, such notification may be made only for a certain period (Article 184-11(6) of the Patent Act as applied mutatis mutandis pursuant to Article 184-11(6) of the Patent Act and Article 48-15(2) of the Patent Act).

 

Revision of the service of transcripts of registration examiner’s decision on international design and trademark applications (Design Law, Trademark Law)

(Design Law effective October 1, 2021) (Trademark Law effective April 1, 2023)

(Trademark Law: Effective on April 1, 2023)

The JPO has traditionally required overseas applicants to

 (i) serve a certified copy of the registration decision addressed to the overseas applicant by international mail in accordance with national law, and

 (ii) under the Hague Agreement (Designs) or the Madrid Protocol (Trademarks), notify the WIPO International Bureau by electronic data before the registration of establishment of a statement of the grant of protection stating the expected date of registration of establishment, and the right was granted pending the completion of the service of the registration decision.

However, due to the emergency situation of the worldwide epidemic of the new type of coronavirus infection, the acceptance of international mail was suspended for some countries, and there were cases where a transcript of the registration decision of an international application for registration of a design or trademark could not be served by international mail (1). In addition, since service of a transcript of the registration decision is indispensable for the registration of establishment under the domestic law, the right could not be granted if service was delayed, resulting in disadvantage to the overseas applicant.

For this purpose, it is now possible to notify the International Bureau of WIPO of a certified copy of the registration decision addressed to the foreign applicant and a statement of the grant of protection stating the expected date of registration of establishment, in a single electronic data file.

With regard to the method of assessment of an international application for design registration, the Commissioner of the Patent Office notifies the holder of the international registration of the matters stated in the assessment to the effect that the design is to be registered via the International Bureau as provided for in the Geneva Amendment Agreement to the Hague Agreement on the International Registration of Designs, in lieu of serving a transcript of the assessment to the effect that the design is to be registered. (Article 60-12-2(1) of the Intellectual Property Law).

With regard to the method of assessment of an international application for trademark registration, the Commissioner of the Patent Office notifes the holder of international registration of the matters stated in the assessment to the effect that the trademark is to be registered through the International Bureau as provided in the Protocol to the Madrid Agreement on International Applications for Marks may be substituted for service of a transcript of the assessment to the effect that the trademark is to be registered. (Article 68-18-2(1) of the Commercial Code).

 

Change from two-step payment to lump-sum payment of individual fees for international applications for trademark registration (Effective date: April 1, 2023)

Under the Protocol to the Madrid Agreement on the International Registration of Marks (hereinafter referred to as the “Protocol”), the following (1) shall be the principle for obtaining an international registration, but (2) may also be declared.

(i) basic fee, an additional fee in accordance with the number of designated categories, and an additional fee in accordance with the number of designated countries (Article 8(2) of the Protocol).

(ii) the receipt of the basic fee and individual fees may be declared (Article 8(7) of the Protocol), and the individual fees may be collected in two stages, at the time of filing and at a later date to be fixed in accordance with the laws of the Contracting State (Rule 34(3)(a) of the Rules under the Protocol).

Japan declares receipt of the individual fee under (2) and adopts a two-stage payment system whereby this fee is collected in two stages, at the time of filing the application with the WIPO International Bureau and at the time of registration of establishment in Japan (Article 68-30(2) of the Trademark Law).

Japan’s adoption of the two-step payment system creates the following issues:

(a) Since the second payment procedure is required at the time of registration of establishment of trademark rights in Japan, it is an additional procedural burden for overseas applicants.

(b) Many countries that are parties to the Protocol adopt the international standard lump-sum payment of individual fees, and overseas applicants sometimes fail to complete the unfamiliar second-stage payment procedure, resulting in many cases where applications are deemed withdrawn.

(c) The WIPO International Bureau is burdened with administrative work for the two-step payment.

In order to solve the above issues, the method of payment of individual fees for international applications for trademark registration will be changed from two-step payment to lump-sum payment (in accordance with the international standard, lump-sum payment without the system of requesting a refund of individual fees even in the case of an examiner’s decision of refusal).

The individual fees for an international application for trademark registration must be paid in a lump sum to the International Bureau prior to international registration (Article 68-19(1) of the Commercial Code, each item of Article 68-30 of the Commercial Code, and Article 68-35 of the Commercial Code).

 

Revision of prepayment

 (1) Abolition of prepayment by patent revenue stamps (October 1, 2021) Notice Concerning Prepayment 

As a transitional measure, prepayment by patent revenue stamps will remain in effect until a date specified by Cabinet Order within a period not exceeding two years from October 1, 2021.

The abolition of prepayment by patent revenue stamps is expected to take place in the first half of fiscal year 2023. The prepayment system itself will continue to exist even after the abolition of prepayment by patent revenue stamps to balance what have already been paid, paid before the abolition of prepayment by patent revenue stamps, with the possibility to continue using prepayment ledgers.

In addition, procedures such as filing an application (payment of fees) by affixing patent revenue stamps will also continue to be available.

(2) Introducing prepayment by bank transfer (cash payment) (October 1, 2021)

(3) Introducing credit card payment at the counter (April 1, 2022)

(4) Introducing prepayment (electronic cash prepayment) using Internet application software (scheduled for January 2023)

With this system, all procedures from payment to submission of prepayment forms will be completed online.

The prepayment system using patent stamps will be abolished to reduce the burden on both users and the JPO in handling physical stamps. Fees can be paid by bank transfer, , credit card, etc. In particular, the prepayment system by patent revenue stamps and the account transfer system are equivalent in terms of functionality in that the fees are automatically deducted from the account balance based on the application, so it is expected that users who used to prepay by patent revenue stamps will have more opportunities to use the account transfer prepayment method in the future.

Prepayment of patent fees must be made in cash, not by patent revenue stamps (Articles 14 (1) (2), 15 (each), and 16 of the Law Concerning Special Provisions for Procedures, etc. Related to Industrial Property Rights).