PROLOGUE. Content of the Application

Transcription

1 PROLOGUE Although Japan adopted the International Classification of Goods according to the Nice Agreement in 1992, the Japanese Patent Office (JPO) decided that they would not allow the specification retail services. However, with the release of the 7 th edition of the International Classification of Goods in 1997, it was thought that perhaps Japan would begin to recognize retail services. Particularly, since December of 1999, when the European Trademark Office issued a decision of registration for the application GIACOMELLI SPORT, which listed retail services, an increasing number of applicants (especially American and European companies) have sought the same result in Japan, applying for registration of marks specifying retail services. One of these applications, the details of which will be outlined in the following, was an application for the mark ESPRIT, filed by the American company ESPRIT INTERNATIONAL, specifying the services retail services related to cosmetics, etc., which was ultimately rejected by the JPO. A suit was filed with the Tokyo High Court, in attempt to overturn the unsatisfactory decision of rejection, but the Court upheld the decision of the JPO. While this is the first case in Japan in which the correctness of registering retail services was challenged outright, from this decision, it has become clear that the JPO will not allow retail services to be registered. However, although the fact still remains that this policy of not registering retail services is the Japanese practice, aware of the recent trend in other countries like the members of the European Union for example, who continue to allow the registration of retail services, it is probable that Japan will change its policy one day. Content of the Application The applicant filed this ESPRIT application on Jan. 9, 1997, specifying the following services in Class 35: retail services in relation to: cosmetics; perfumes; soaps; toiletries; eyeglass frames; sunglasses; awnings, sunscreens; jewelry; watches; papers; paper products; printed matter; publications; books; notebooks; appointment books; address books; writing implements and accessories thereof; stationary goods; carrying cases; bags; travel bags; umbrellas; handbags; coin purses; belts; wallets; furniture; picture frames; household items and containers; glass containers; plates; cups; mugs; bowls; soap dishes; ashtrays; combs; sponges; brushes, including toothbrushes (excluding paintbrushes); hairbrushes; makeup brushes; ceramic goods for household use; tablecloths; bed spreads: sheets,

2 pillowcases and other bedding items; towels; washcloths; household goods made of cloth; men s and women s/children s clothing including accessories like footwear, hats, shawls, etc.; games; toys The Notification of Reason for Rejection The JPO rejected this application, stating that as the specified services include those not belonging to Class 35, the application should be rejected under Article 6 Section 1 of the Japanese Trademark Law. The Notification of reasons for rejection also stated that furthermore, retail services in relation to should be listed in correlation to each and every product. The Argument by the Applicant The applicant duly filed an Argument, asserting that since the 7 th publication of the Nice Agreement stipulates Class 35 as including the bringing together, for the benefit of others, of a variety of goods (excluding the transport thereof), enabling consumers to conveniently view and purchase those goods and registration of such specification has been allowed in many countries, that failure to do so by the JPO violates the very spirit of the International Accord. The Decision of Rejection The Examiner issued a Decision of Rejection, in which he maintained the position that with respect to retail services in relation to ~, the object of trade is the individual products, and retail services are nothing more than actions incidental to the sale of the goods. As such, retail services should not be recognized as independent objectives of trade. Grounds for Appeal Retail activities should be protected in relation to Article 2 Sections 1.2 of the Trademark Law, which stipulates marks used in respect of services by a person who provides or certifies such services in the course of trade. Further protection should be offered under the stipulations of Article 2 Section 3.3 Acts of applying a

3 mark to articles for use by persons to whom the services are provided (including articles transferred or leased hereinafter the same). For example, when a department store sells a product that is made by an external entity, the purchaser determines the source of the goods based on the trademark attached, and not the name of the department store. Despite the fact that there should be no difference in the quality or source of goods bearing the same trademark, regardless of what department store they are purchased in, consumers will in most cases opt to buy in the department store that suits their personal taste. This is a consumer confidence that is associated with the name of the particular department store, an evaluation of trust resulting from many years of service as a retailer, and this confidence is indifferent to the goods themselves. As such, retail service is a service that should be protected. Retail services provide customer services such as store planning, coordination services relating to the display of goods in a manner that is attractive to the customers, product selection, fitting room advice, etc. The protection of retail services is in the best interest of the consumers, and contributes to the perpetuation of a competitive marketplace. The 7 th publication of the Nice Agreement stipulates Class 35 as including the bringing together, for the benefit of others, of a variety of goods (excluding the transport thereof), enabling consumers to conveniently view and purchase those goods, thus such services should be registrable. In light of the fact that, beginning with America, many countries have accepted trademark registration for ~related retail services, despite being a member nation, Japan s refusal to recognize this goes against the spirit of international cooperation. Reasons cited in the Appeal Board s Decision While Japanese Trademark Law does not define service, in our society it is generally understood to be labor or benefit provided for other people that is an independent objective of trade. To begin with, retail means purchase of goods from a wholesaler, and selling these goods to and thus distributing them among consumers. Accordingly, to the demandant in this case, while certainly providing the consumer with an opportunity to purchase/select the goods, the ultimate goal is the sale of the goods.

4 The demandant s mention of customer services such as store planning, coordination services relating to the display of goods in a manner that is attractive to the customers, product selection, fitting room advice, etc, are all incidental to the sale of the goods. A trademark is not only an indicator of the manufacture or source of goods, but is understood to also include the sale of goods, and serves to indicate goods selected and sold based on the individual responsibility of the demandant, as opposed to those selected and sold by another seller. In the 7 th edition of the International Classification of Goods according to the Nice Agreement, published in 1997, an annotation for Class 35 indicates that Class 35 does not include activity of an enterprise, the primary function of which is the sale of goods, i.e., of a so-called commercial enterprise, and thus retail services, the sale of goods, are interpreted as not being included in this class. At the 17 th Committee Meeting of the Nice Alliance, a report was issued to the effect that the scope of protection and/or recognition of retail store services is not something that will bind every country. The annotation of Class 35 the bringing together, for the benefit of others, of a variety of goods, enabling customers to conveniently view and purchase those goods, is not referring to the retail sale of goods, but stops at the point of arranging a variety of goods and store layout. The plaintiff s (applicant s) reasons for seeking a reversal of the Decision Article 2 Section 1.1 of the Trademark Law should be interpreted under the assumption that goods are produced by producer, who then verifies the quality of those goods, then attaches a trademark directly on the transferable goods themselves or on the packaging, etc. and thus would not include the case in which a producer manufactures the goods, and a third party uses a trademark to certify these goods, selects them on behalf of the consumer, providing the consumer with an opportunity to purchase them. This type of retail business is an independent service with an economic objective. Consumers select a retail store that responds to their needs, such as pricing, store image, location, service quality of staff (advice concerning choosing a size, tryingon, etc.). These service activities raise the price of the products, but it is easily recognizable that the consumers accept this and are willing to pay that amount.

5 Other countries, such as America, England, Canada, Spain, Finland, Taiwan, Korea, Singapore, the EU, the Philippines, Australia, New Zealand, etc., are allowing trademark registration of retail services. Although the manner in which this is handled varies among member countries of the Nice Agreement, and also non-member countries, it should be said that, based on interpretation of current trademark laws and/or practical application, there is room to allow for the registration of retail services, and that there is no driving proof to refute this. Rebuttal by the Defendant (JPO) According to the Trademark Law, up to now the retail sale of goods has been treated as a transfer of goods, and this has remained the same even after the implementation of the Service Mark System in April of Transfer is not limited, as the plaintiff asserts, to the case in which goods are produced by producer, who then verifies the quality of those goods, then attaches a trademark directly on the transferable goods themselves or on the packaging, etc. but of course also includes the case where a producer manufactures the goods, and a third party uses a trademark to certify these goods, select them on behalf of the consumer, providing the consumer with an opportunity to purchase them, and there is no reason to distinguish these two entities. The reason for this is, the producer of the goods sometimes retails the goods themselves, but there are times when the goods retailed by the producer are then again resold by another entity, and either case can be considered as a transfer of goods. Service is considered to be labor or convenience provided for the benefit of others, not being incidental, but being an independent object or trade in the marketplace. The objective of department stores or retailers is, above all else, the sale of the goods, and the incidental services mentioned by the plaintiff are nothing more than steps taken to promote the sales of the goods, and illicit no independent value or compensation. The plaintiff asserts that not recognizing retail services makes light of international cooperation. However, the 7 th Edition of the International Classification of Goods according to the Nice Agreement does not by any means recognize retail services. In fact, the annotation to Class 35, under the heading of This Class does not include,

6 in particular:, makes mention of activity of an enterprise, the primary function of which is the sale of goods, i.e., of a so-called commercial enterprise. The plaintiff contends that based on interpretation of current trademark laws and/or practical application, there is room to allow for the registration of retail services, and that there is no driving proof to refute this. However, per the adoption of the Service Mark System, the retail of goods underwent careful consideration. To recognize the retail of goods as a service involves the problem that it would drastically change the system of trademark protection that has been in place up to now, and if such a service were in fact recognized, complex problems would arise concerning the evaluation and judgement of similarity of goods, the scope of protection, and the very Service Trademark Rights and Product Trademark Rights themselves. The Court Decision Activities conducted in correlation with and incidental to the transfer of products, while in and of themselves may be construed to be in the interests of others, are not independent objects of trade in the marketplace, and as such, do not correspond to the services listed in the Trademark Law. The goal of retail service is, in the end, the sale of products, and the incidental services asserted by the plaintiff are no more than activities carried out to further the sale of products. In actuality, there is no separate price indicated or independently paid for these services, apart from the purchase price of the products, to indicate that they are independent objects of trade. Although the plaintiff asserts that retail services are not the business of transferring products, as set out in Article 2 Section 1.1 of the Trademark Law, but instead should be interpreted as services which correspond to the business of providing a service stipulated in Section 1.2, there are no limitations concerning the transfer of goods in Section 1.1. As such, whether the products are distributed directly from the producer to the consumers, or reach the end-consumer via a distributor, these activities are included in the transfer of goods.

7 The 7 th Edition of the International Classification of Goods according to the Nice Agreement, the annotation to Class 35, under the heading of This Class does not include, in particular:, makes mention of activity of an enterprise, the primary function of which is the sale of goods, i.e., of a so-called commercial enterprise. Based solely on this, it can be said that the retail sale of product corresponds to this sale of goods, and that it should not be interpreted to mean that these services be included in those outlined in the Nice Agreement, as the plaintiff has asserted, Further, by the Plaintiffs own admission, the International Classification of Goods based on the Nice Agreement have no restraining powers over the way they are handled by each member country. In addition, although the plaintiff notes that many countries have accepted retail services, there are many counties, including Japan, who stand opposed. (Patent Attorney, Sakae Kikuchi, Kyowa Patent and Law Office)