Date of
Judgment: February 27, 2003
Issuing
Authority:
Supreme Court
Level of
the Issuing Authority: Final Instance
Type of
Procedure: Judicial（Civil）
Subject
Matter: Trademarks
Main
text of the judgment (decision):
1.
The final
appeal is dismissed.
2. The appellant of final appeal
shall bear the cost of the final appeal.
Reasons:
Concerning
the reasons for petition for acceptance of final appeal argued by the appeal
counsel, YONEKAWA Koichi, NAGASHIMA Kenya, SUZUKI Kengo, SAKURAI Shigenori,
HOSAKA Mitsuhiko, and OIZUMI Takeshi
1. The outline of the facts legally determined
by the court of prior instance is as follows.
(1) Company D (a U.K. corporation) held a
trademark right registered for the trademark that is composed as indicated in
Section 1 of the list of trademarks attached to the judgment in first instance
(omitted here), designating the goods, "clothing, personal belongings made
of fabric, bedding," with Registration No. 650248 (establishment of the
trademark right registered on August 17, 1964), and also held another trademark
right registered for the trademark that is composed as indicted in Section 2 of
said list, designating the goods, "clothing (excluding special clothing
for sports), personal belongings made of fabric (excluding those assigned to
any other class), bedding (excluding beds)," with Registration No. 1404275
(establishment of the trademark right registered on January 31, 1980)
(hereinafter these trademarks and trademark rights are collectively referred to
as the "Registered Trademark" and the "Trademark Right").
The Registered Trademark is a trademark of a globally famous brand name,
"F". Company D held a trademark right for a series of "F"
trademarks, including those that are substantially identical with the
Registered Trademark, in 110 countries around the world including the Republic of
Singapore, Malaysia, the State of Brunei Darussalam, the Republic of Indonesia,
and the People's Republic of China.
On November 29, 1995, Company E (a U.K.
corporation), which is a 100% subsidiary company of Appellee B1 company (a
stock company; hereinafter referred to as "Appellee B1 Company"),
acquired by succession the trademark rights held by Company D for all
"F" trademarks registered in the countries except for Japan. In
Japan, Appellee B1 Company held an exclusive license. On January 25, 1996,
Appellee B1 Company acquired the Trademark Right assigned from Company D, and
on May 27, 1996, it completed the registration of the assignment and became the
trademark right holder.
(2) From around March to July 1996, the
appellant imported polo shirts made in China (Product Number M1200; hereinafter
referred to as the "Goods"), which carried the marks indicated in
Sections 1 and 2 of the list of marks attached to the judgment in first
instance (omitted here) (hereinafter collectively referred to as the "Mark"),
and sold them in Japan since June 1996. The Goods were produced at a factory in
the People's Republic of China, as subcontracted by Company G (a Singaporean
corporation), and then imported into Japan by the appellant via Company H (a
Singaporean corporation).
(3) Company G had been granted a license by
Company D to use a trademark identical with the Registered Trademark for three
years from April 1, 1994 (the license agreement between Company D and Company G
is hereinafter referred to as the "Agreement"). On November 29, 1995,
the licensor's status under the Agreement was transferred to Company E.
The Agreement contains the following clauses
(hereinafter referred to as the "Granting Clauses").
A. Company D shall grant a license to Company G
to produce, sell and distribute the licensed goods in the licensed territory,
namely, the Republic of Singapore, Malaysia, the State of Brunei Darussalam,
and the Republic of Indonesia, and to use a trademark identical with the
Registered Trademark for the licensed goods within the licensed territory. The
licensed goods shall be sportswear and leisure wear goods carrying said
trademark that are produced according to Company D's specifications (Articles 1
and 2).
B. Company G shall promise not to make any
arrangement for subcontracting production, finishing or packaging of the
licensed goods, without prior consent given by Company D in writing. Company D
shall not unreasonably reserve its consent as long as Company G provides
Company D with the complete information on all relevant facts or matters
concerning subcontractors and secures a promise from subcontractors that they
agree to offer to Company D a facility that is the same as the facility they
offer to Company G so that Company D's agent can check whether the
subcontractors comply with and fulfil the specifications and quality standards
prescribed in the Agreement and keep all relevant information confidential
(Article 4).
(4) The Goods were produced at a factory in the
People's Republic of China, which was outside the licensed territory, as
subcontracted by Company G without Company D's consent, and Company G thus
breached the Granting Clauses.
(5) Appellee B1 Company placed an advertisement
in B2 Newspaper issued by Appellee B2 Newspaper Company, claiming that the
Goods, etc. were counterfeit goods. It filed a petition for the procedure for
identifying the Goods, etc. as import-prohibited articles under the Customs
Tariff Act, and also filed a criminal complaint on the grounds that the sale of
the Goods constitutes infringement of the trademark right.
2. In this case, the appellant alleges that the
appellees' acts mentioned in 1 (5) above interfere with the appellant's
business or harm its reputation, and seeks damages, etc. against the appellees
under Article 709 of the Civil Code. In response, Appellee B1 Company alleges
that the appellant's act mentioned in 1 (2) above infringes the Trademark
Right, and seeks damages, etc. against the appellant under said Article.
The appellant alleged that the importation of
the Goods constitutes what is generally referred to as parallel importation of
genuine goods and it is therefore not illegal.
3. If a person other than a holder of a
trademark right in Japan imports goods identical with the goods designated for
the trademark right, by affixing thereto a trademark identical with the
registered trademark, such act of importation infringes the trademark right
unless it is licensed by the trademark right holder (Article 2, paragraph (3)
and Article 25 of the Trademark Act). However, it is appropriate to construe
that the importation of goods in such manner is deemed to be parallel
importation of genuine goods, and it is therefore deemed to be not
substantially illegal for infringing the trademark right under the following
conditions: (1) the trademark has been legally affixed to the import goods by a
holder of a trademark right in a foreign country or a person licensed by the
trademark right holder, (2) the trademark right holder in the foreign country
and the trademark right holder in Japan are the same person or have a
relationship wherein they can be regarded as being legally or economically
identical with each other, and hence the trademark affixed to the import goods
indicates the same source as that indicated by the registered trademark in Japan,
and (3) since the trademark right holder in Japan is in the position to be able
to control the quality of the import goods directly or indirectly, the import
goods and the goods carrying the registered trademark held by the trademark
right holder in Japan are judged to be not substantially different in terms of
the quality guaranteed by the registered trademark. The purpose of the
Trademark Act is "to ensure the maintenance of business confidence of
persons who use trademarks through the protection of trademarks, and thereby to
contribute to the development of the industry and to protect the interests of
consumers" (Article 1 of said Act). Parallel importation of genuine goods
that satisfies the abovementioned conditions would not undermine a trademark's
functions, i.e. the function to indicate the source of goods and the function
to guarantee the quality of goods, nor would it damage the business reputation
of the trademark user or the interest of consumers, and thus it can be deemed
to not be substantially illegal.
4. This reasoning can be applied in this case as
follows. According to the facts mentioned above, the Goods were produced
through the process whereby Company G, which was licensed to use a trademark
identical with the Registered Trademark in the Republic of Singapore and three
other countries, subcontracted the production to a factory in the People's
Republic of China, which was outside the licensed territory, without the
consent of the trademark right holder. Thus, the Goods were produced in a
manner beyond the scope of license defined by the Granting Clauses in the
Agreement and then the Mark was affixed to them, and hence they undermine the
Registered Trademark's function to indicate the source of goods.
Furthermore, the limitations on the production
areas and on subcontracted production under the Granting Clauses are very
important for the trademark right holder in controlling the quality of goods
carrying the Registered Trademark and ensuring that the Registered Trademark
fully functions to guarantee the quality of goods. The Goods which had been
produced in breach of these limitations and to which the Mark was affixed would
be outside the quality control of the trademark right holder, and they could be
substantially different from the goods put on the market by Appellee B1 Company
by affixing the Registered Trademark to them, in terms of the quality
guaranteed by the Registered Trademark. Hence, the Goods are likely to
undermine the Registered Trademark's function to guarantee the quality of
goods.
Consequently, if the importation of such goods
is allowed, it could undermine the business reputation embodied in the
"F" brand, which has been established by Company D and Appellee B1
Company that have used the Registered Trademark. In addition, while consumers
trust the parallel import goods, believing that they can purchase goods that
are identical in terms of the source and quality with the goods put on the
market by the trademark right holder by affixing the registered trademark to
them, if the importation of the Goods conducted in breach of the abovementioned
limitations is allowed, it would result in breaching the consumers' trust.
Based on these grounds, the importation of the
Goods cannot be regarded as parallel importation of genuine goods and therefore
it cannot be deemed to not be substantially illegal.
Furthermore, since an importer is required to
clarify the production site of the import products upon import declaration
(Article 67 of the Customs Act and Article 59, paragraph (1), item (ii) of the
Order for Enforcement of the Customs Act), in order to import goods to which a
trademark identical with a trademark registered in Japan has been affixed not
by a holder of a trademark right in a foreign country but by a person licensed
by the trademark right holder in the foreign country, the importer must import
the goods after confirming, at least, that the licensee is entitled under the
license agreement to produce the goods in the production area and affix said
identical trademark to them. Since the appellant has not proved that it
fulfilled the obligation to confirm this before importing the Goods, the
presumption of negligence on the part of the appellant (Article 103 of the
Patent Act as applied mutatis mutandis pursuant to Article 39 of the Trademark
Act) cannot be reversed.
5. For the reasons stated above, the
determination of the court of prior instance can be accepted as justifiable for
dismissing the appellant's claim and partially upholding Appellant B1 Company's
claim on the grounds that the appellant's act of importing and selling the
Goods infringes the Trademark Right. The appeal counsel's arguments cannot be
accepted.
Therefore, the judgment has been rendered in the
form of the main text by the unanimous consent of the Justices.
(This translation is provisional and
subject to revision.)