Jul 13, 2023
Japan: Act for Partial Revision of the Unfair Competition Prevention Act (IP Lump-sum Act) promulgated
The Act for Partial Revision of the Unfair Competition Prevention Act (IP Lump-sum Act) was passed and enacted as Act No. 51 on June 14, 2023. The effective date of this law is the date specified by a Cabinet Order within a period not exceeding one year from the date of promulgation, however, some of the laws came into effect on July 3, 2023.
The new Act partially revises the Patent, the Utility Model, the Design, the Trademark, and the Laws concerning special provisions for procedures, etc. related to IP rights (the Industrial Property Special Provisions Law) and the aim is to:
1) strengthen protection of brands and designs in light of the diversification of business activities associated with digitalization
2) improve intellectual property procedures, etc. in response to the Corona Disaster and digitalization
3) establish a system for international business development
1. Strengthening protection of brands, designs, etc. in light of the diversification of business activities due to digitalization
The protection of new brands, designs, data, and intellectual property is to be strengthened in response to the diversification of business activities, especially among start-ups and small and medium-sized businesses, due to the use of digital technology.
(1) Introduction of the consent system (Effective from the date specified by Cabinet Order within a period not exceeding one year from June 14,2023)
The consent system refers to a system whereby a trademark identical or similar to a previously registered trademark of another person may be registered concurrently if the proprietor of the previously registered trademark consents to such registration.
From the viewpoint of preventing confusion of origin, a trademark that is similar to another person’s registered trademark cannot be registered (Article 4(1)(11) of the former Trademark Law).
While the consent system has already been introduced in many countries and regions such as the U.S., Europe, Taiwan, and Singapore, and global consents agreements are sometimes concluded, the system has not been introduced in Japan, which sometimes hinders trademark registration in Japan by foreign users.
For this reason, a system was introduced to allow the registration of both trademarks even in the case of an application for a trademark identical or similar to a previously registered trademark of another party, if the proprietor of the previously registered trademark consents to the registration of both trademarks. However, even with the consent of the proprietor of the prior registered trademark, if there is still a likelihood of confusion of origin, the registration will not be granted, and the existence of a likelihood of confusion of origin will be examined. In addition, after registration, it is possible to request an anti-confusion indication (Article 24-4 (1) (i) of the Trademark Law) or a trial for cancellation of improper use (Article 52-2 of the Trademark Law).
Even if a trademark falls under Article 4(1)(xi), the provision of the said item shall not apply to a trademark for which the applicant for trademark registration has obtained the consent of another person under the said item to obtain trademark registration and where there is no risk of confusion between the goods or services in which the trademark is used and the goods or services pertaining to the business of the holder of trademark right, exclusive right to use or non-exclusive right to use of the registered trademark of another person under the said item (Trademark Law Article 4(iv)).
In addition, the Unfair Competition Law also takes into consideration the fact that the act of using a registered trademark without an unfair purpose is no longer treated as unfair competition (Article 19 (1) (iii) of the Unfair Competition Law), so that a trademark owner who has achieved well-known and famous status cannot demand an injunction against the other trademark owner under the Unfair Competition Law. The Unfair Competition Law also takes into consideration the fact that similar trademarks coexist.
Also, since the coexistence of similar trademarks infringes or may infringe business interests, the trademark right holder may demand that the other party affix an anti-confusion mark (Article 19 (2) (ii) of the Unfair Competition Law).
(2) Relaxation of requirements for registration of trademarks containing the name of another person (Trademark Law) (Effective from the date specified by Cabinet Order within a period not exceeding one year from June 14,2023)
From the viewpoint of protecting the personal interests of others, a trademark containing the name, etc. of another person in its composition cannot be registered without the consent of that person (former Trademark Law, Article 4 (1) (8)).
However,
(i) Academic experts have pointed out that this provision gives the impression of overly protecting the personal interests of others.
(ii) Needs such as name trademarks are indispensable for brand strategy, especially in the fashion industry.
(iii) In foreign countries such as the U.S., Europe, China, and Korea, a system has been introduced that requires the name of another person to be well-known as a requirement for trademarks that include the name of another person.
Therefore, the requirements for registration of a trademark that includes the name of another person who is widely recognized by consumers in the field of goods and services in which the registered trademark is used have been relaxed (Article 4(1)(8) of the Trademark Law).
The name of another person is subject to certain name recognition requirements, and specifically, this requirement is set by a Cabinet Order (Trademark Law, Article 4 (1) (8)).
A portrait of another person or a name of another person (limited to a name that is widely recognized among consumers in the field of goods or services in which the trademark is used), or a name or a well-known pseudonym or pen name of another person or a well-known abbreviation thereof (ii) (except those for which the approval of the other person has been obtained), or a trademark containing the name of another person, which does not meet the requirements specified by Cabinet Order, cannot be registered as a trademark (Trademark Law, Article 4 (1) (8)).
(3) Relaxation of requirements for application of exception to lack of novelty (Design Law) (Effective from the date specified by Cabinet Order within a period not exceeding September counting from June 14,2023)
When applying for the exception to lack of novelty, it has become difficult to manage all the published facts related to the applied design, and it has been a great burden for the applicant to prepare a certificate of exception regarding all the published designs within 30 days of the application. In addition, the exception to lack of novelty could not be applied due to insufficient published designs described in the exception certificate, and the application was sometimes rejected for lack of novelty. Therefore, the rules were relaxed so that the exception to lack of novelty can be applied to identical or similar designs that have been published because of the acts of a person entitled to obtain a design registration, etc., based only on a certificate of the earliest publication submitted within 30 days of the filing of the application. The requirement for the first publication of a design is relaxed to allow the same or similar design to be registered. The reason for requiring the earliest publication is that the timing of publication can be objectively determined, the earliest publication is easy for the applicant to grasp, and the earliest publication makes it easier to determine which of the published designs are eligible for the exception.
Specifically, with respect to designs that meet the following requirements, the exception to loss of novelty also applies to identical or similar designs published based on certificates submitted within the statutory period and due to the acts of persons entitled to design registration:
(1) The design must have become publicly known as a result of the act of a person who has the right to receive a design registration. (In addition, the exception to loss of novelty does not apply to items that become publicly known through publication in the gazette, as in the past.)
(2) The design must have been published after the publication of the certified design by a certificate submitted within the statutory period.
(3) The design must be identical or similar to the certified design based on a certificate submitted within the statutory period.
(In the case of a design that is dissimilar to the design described on the certificate, it may be the basis for refusal of requirements such as inconvenience of creation in relation to the applied design, in which case a separate certification is required.)
Please note:
(1) No special proof or oath is required for the fact that the design described on the certificate is the first public design.
(2) It is possible to submit certificates other than the earliest disclosure, and there is no particular disadvantage even if there is duplication.
(3) Even if the publisher is grounded for refusal as an unknown design in the course of examination or trial, if the published design was published due to the act of a person who has the right to receive a design registration, the publisher may argue and prove that it meets the requirements for the application of the exception provision for loss of novelty and refute it.
(4) Designs published before the design stated on the certificate are not subject to the exception based on the submitted certificate.
(5) If multiple identical or similar designs are published, it is sufficient to indicate one of them on the certificate.
However, where there have been two or more acts of the person entitled to obtain a design registration which have resulted in the same or similar design falling under Article 3(1)(i) or (ii), it is sufficient to submit a certificate with respect to the first of the two or more acts which took place on the earlier date (proviso to Article 4(iii) of the Design Law).
(4) Prevention of Acts of Imitation in Digital Space (Unfair Competition Law) (Effective from the date specified by Cabinet Order within a period not exceeding one year from June 14,2023)
In light of the increasing number of acts of imitation of product forms in digital spaces such as metaverse and SNS, the Unfair Competition Law has been revised to make such acts subject to unfair competition and to allow the right to demand an injunction to be exercised. Specifically, the act of offering through a telecommunication line a product that imitates the form of another person’s product is also considered unfair competition and is added to Article 2 (1) (iii) of the Unfair Competition Law.
Unfair competition means the act of transferring, leasing, displaying for the purpose of transferring or leasing, exporting, importing, or providing through an electric telecommunication line, goods that imitate the form of another person’s goods (excluding forms essential for ensuring the function of said goods) (Article 2, ①3 of the Unfair Competition Law).
(5) Strengthening Protection of Trade Secrets and Limited Provision Data (Unfair Competition Law) (Effective from the date specified by Cabinet Order within a period not exceeding one year from June 14,2023)
(1) Addition of definition of limited provision data
In the case of services that share big data with other companies, including cases where data is managed confidentially, the data will be protected as limited provision data, and it will be possible to demand an injunction against infringement, etc. (Article 2 of the Unfair Competition Law).
Limited Provision Data means technical or business information (excluding trade secrets) that is stored and managed in a substantial amount by electromagnetic means as information to be provided to a specific person during business (Article 2(vii) of the Unfair Competition Law).
(2) Introduction of a claim for increased damages equivalent to the license fee
In a suit for damages, it is possible to claim an increase in the amount equivalent to the license fee for damages in excess of the infringed party’s production capacity, etc.
In case of claiming compensation for damages suffered by the infringed party as a result of the infringement, if the infringer transfers the object (including electromagnetic records) that constitutes the act of infringement or services caused by the act of infringement (including the transfer of property resulting from the act of aggression), the total of the following amounts shall be determined as the amount of damages suffered by the infringed party (Article 5(i) of the Unfair Competition Law).
(6) Restriction on Inspection of Trade Secret Documents in Rulings (Patent Law, Utility Model Law, Design Law) (effective July 3, 2023)
In the past, any person could make a request to inspect documents related to an award (Patent Law, Article 186, etc.). However, even if trade secrets, etc. were contained in the documents related to the adjudication procedure, inspection could not be restricted. Therefore, there was a possibility that the applicant for adjudication or the patentee would refrain from submitting documents necessary to prove or disprove the claim due to concerns about leakage of trade secrets, and as a result, an appropriate adjudication decision could not be made. It has therefore become possible to restrict the inspection of documents related to the award that contain trade secrets.
If a person who has submitted a document pertaining to an award request that the document contain trade secrets held by the person concerned and the Commissioner of the JPO deems it necessary to maintain secrecy, the inspection of the document shall be restricted (Patent Act, Article 186 (1) (iii); Prohibition Act, Article 55; Design Act, Article 63; Patent Act Enforcement Regulations, Article 44-2).
2. Improvement of intellectual property procedures in response to the corona disaster and digitalization
(1) Revision of service of public notice due to suspension of acceptance of international mail, etc. (Patent Law, Utility Model Law, Design Law, Trademark Law) (Effective July 3, 2023)
Service from an overseas resident (a person who does not have a domicile or residence or, in the case of a corporation, a business office in Japan) shall be made to the patent administrator if the overseas resident has one, or directly if the overseas resident has no patent administrator (Patent Law Article 192 (1) (ii)). However, due to the global spread of the new type of coronavirus and the situation in Ukraine, international postal acceptance has been suspended for a long period of time in some countries and regions, making it impossible to send documents.
Therefore, the requirement for service by publication, which is a means of service when service cannot be made by ordinary means, has been added.
An official designated by the Commissioner of the Patent Office or a trial clerk shall make service of public notice if the situation continues for six months where it is difficult to send documents under Article 192(2) of the Patent Law (Article 191(1)(iii) of the Patent Law).
For cases in which the suspension of acceptance of international mail has occurred prior to the effective date of the revised Patent Act (July 3, 2023), the period prior to the effective date will not be counted, and service by public notice will be made if the suspension of acceptance continues for six months after the effective date (Article 3 (1) of the Supplementary Provisions of the Revised Act). In addition, a system for service via the Internet has been established (Article 5 of the Industrial Property Special Provisions Law).
(2) Revision for digitization of written procedures, etc. (Patent Law, Utility Model Law, Design Law, Trademark Law)(Enforced from the day specified by Cabinet Order within the range not exceeding September counting from June 14, 2023)
The revised Patent, Trademark, and Industrial Property Special Provisions Laws will enable electronic filing of priority right travel documents related to patents, etc. (Article 43 of the Patent Law, Article 10 of the Utility Model Law, Article 10-2 of the Design Law, and Article 10 of the Trademark Law.) in order to respond to the rapidly developing digital society and further improve convenience of administrative procedures. This allows for the submission of a photocopy of a priority certificate issued in writing and a written output of a certification document pertaining to a priority right that has been provided electronically. Also, a certified document pertaining to the right of priority provided electronically by the Office of the first country may be accepted.
(3) Revision of fee reduction/exemption system (Patent Law, etc.) (Effective from the day specified by Cabinet Order within one year from June 14, 2023)
Regarding the reduction or exemption of fees for patents for small and medium-sized enterprises, to encourage inventions and promote industrial development for those with limited financial resources, a limit will be set by Cabinet Order on the number of cases for those other than those who are recognized as having particular financial difficulties (proviso to Article 195-2, etc. of the Patent Law).
If a person who requests application examination of his/her own patent application and meets the requirements provided by Cabinet Order in consideration of his/her financial resources to pay the fee for requesting application examination, the Commissioner of the JPO may, pursuant to the provisions of Cabinet Order, reduce or exempt the fee for requesting application examination to be paid under paragraph (2) of the preceding Article. However, for applicants other than those specified by Cabinet Order as those who are found to have particular difficulty in paying the fee for requesting application examination due to economic hardship or other reasons, the fee shall be limited to the number of cases specified by Cabinet Order (proviso to Article 195-2, etc. of the Patent Act).
3. Establishment of a system for international business development (Unfair Competition Law)
(1) Strengthening and Expansion of Penalties for Bribery of Foreign Public Officials (Effective from the day specified by Cabinet Order within one year from June 14, 2023)
In order to accurately implement the OECD Convention against Bribery of Foreign Public Officials at a higher level, the statutory penalties for natural persons and juridical persons will be increased, and the act of sole overseas bribery by a foreign employee of a Japanese company will also be made punishable (the scope of punishment for juridical persons will also be expanded through a dual penalty provision) (Article 21 of the Non-Competition Law, etc.).
1) Increased statutory penalties for natural and legal persons (Article 21(iv) and Article 22(i)(1) of the Non-Competition Law) Natural persons: Fines of not more than 5 million yen and imprisonment of not more than 5 years shall be increased to fines of not more than 30 million yen and imprisonment of not more than 10 years.
Corporations: Fines of not more than 300 million yen shall be increased to fines of not more than 1 billion yen.
The statute of limitations for filing an appeal will be 7 years instead of 5 years. Since the imprisonment of not more than 5 years has been revised to not more than 10 years, the applicable article of the Code of Criminal Procedure has also been changed from Article 250 (2)5 to Article 250 (2)4, and as a result, the statute of limitations for appeals has also been changed.
2) Expansion of the scope of punishment for bribery overseas by employees of Japanese companies (Article 21, Paragraph (11) of the Non-Competition Law) Although only Japanese employees were subject to the law, the law now also allows foreign employees to be punished for the bribery overseas.
(2) Clarification of Jurisdiction over International Trade Secret Infringement Cases (Effective from the day specified by Cabinet Order within one year from June 14, 2023)
A provision has been established to apply the Japanese Unfair Competition Law to cases where an infringement of a Japanese company’s trade secrets occurs outside of Japan, allowing a Japanese court to take action. However, this provision does not apply if the trade secret is exclusively used for business purposes outside of Japan (Article 19-2, etc. of the Noncompetition Law).
An action against a person who engages in unfair competition as set forth in Article 2 (i) (4), (5), (7) and (8) with respect to trade secrets of a trade secret holder operating a business in Japan that are controlled in Japan may be filed in a Japanese court. However, this shall not apply where said trade secrets are used exclusively for business purposes outside Japan (Article 19-2(i) of the Unfair Competition Law, etc.).
4. Partial Revision of Unfair Competition Prevention Act (Unfair Competition Law) (Effective from the day specified by Cabinet Order within one year from June 14, 2023)
In the Unfair Competition Prevention Act, the provisions of penalties were revised to organize the penalties according to whether or not there is double punishment of corporations, and to clarify when the acts constituting the penalties were committed (Article 21, etc. of the Unfair Competition Prevention Act).