Case Number: R2 (Gyo-Ke) 10120
Appeal Lawsuit against Decision by Trial Board of Japan Patent Office (JPO)
Judgment issued by Intellectual Property (IP) High Court on November 9, 2022

1. Issue

Whether a Japanese distributor’s advertisement of a product bearing the registered mark without any proof of its relations with the foreign Trademark Owner can be judged as a legitimate use of the registered mark.

2. Subject Trademark Registration and JPO Trial Board Decision

Mark: PACKARD BELL in black color with two bold red lines above and below the words in an overall shape of an elongated parallelogram (JP Reg. No. 2244788)

Designated Goods: Class 9 – electronic machines and apparatus, including replacement LCD panels for computers, and a wide variety of other goods in Classes 7, 8, 9, 10, 11, 12, 17 and 21.

Partial cancellation was sought in respect of some of the goods in Class 7 and 9 as well as all the goods in Class 12, including replacement LCD panels for computers in Class 9.

The JPO Trial Board cancelled the subject registration based on Article 50 (1) of the Trademark Act, stating that the Japanese distributor’s advertisement of a replacement LCD panel for computers bearing the registered mark, without proof of relations with the foreign Trademark Owner, Acer Inc., a Taiwanese PC giant, could not be considered a legitimate use of the mark.

3. Summary of the Judgment

The IP High Court upheld the JPO Trial Board decision, ultimately concluding that a Japanese distributor’s advertisement on a website for a replacement LCD panel for computers bearing the registered mark without any proof of its relations with the foreign Trademark Owner could not be considered a legitimate use of the registered mark.

4. Outline of the Case

The Trademark Owner (Plaintiff) filed a lawsuit with the IP High Court, seeking a reversal of the Trial Board decision. The Plaintiff argued that the subject mark was used on a replacement LCD panel for computers, “‘Packard Bell Easy Note tk37 series 15.6,” advertised on Amazon JP by a Japanese intermediary distributor named ‘CHIKAZO’ within the three-year statutory period before the non-use cancellation trial was requested.

The JPO (Defendant) drew attention to the lack of evidence showing a relationship with the Trademark Owner, Acer Inc., and questioned whether the product was genuinely manufactured by the Registrant. The relationship between the Plaintiff and CHIKAZO was also unclear.

Furthermore, the Trademark Owner contended that as a multinational company, they acquired “Packard Bell B.V.” (“Packard Bell”) in 2008, and the nature of their products involved distribution across national borders through intermediary distributors worldwide. They asserted that the above circumstances claimed by the Defendant did not negate the fact that the replacement LCD panel in question was a good produced by the Trademark Owner or its Licenser.

The Plaintiff quoted the following IP High Court precedent to support its argument as well:

[Fashion Walker Case – IP High Court Decision H24 (Gyo-Ke) 10310 of March 25, 2013]

“The use of a registered trademark by the Trademark Owner extends beyond their direct sale of goods. It also includes the use of the mark by distributors during the distribution process. This interpretation, as per Article 50 (1) of the Trademark Act, covers cases where distributors use the registered trademark while selling goods manufactured by the registrant as part of the distribution process. This interpretation aligns with current practices in the distribution of goods, where manufacturers typically sell goods to consumers through intermediate distributors. If the use of the registered trademark by these intermediate distributors during distribution is deemed illegitimate and subject to non-use cancellation, it would contradict the purpose of Article 50 of the Trademark Act.”

5. Judgement

The IP High Court determined as follows:

[Conclusion]

The Plaintiff failed to prove that the Trademark Owner, an Exclusive Licensee, or a Non-exclusive Licensee used the registered trademark in Japan for the designated goods within the three-year statutory period. Consequently, the subject trademark registration should be cancelled for the challenged goods.

Based on the evidence submitted by the Plaintiff, it was unclear whether CHIKAZO was the Trademark Owner, an Exclusive Licensee, or a Non-exclusive Licensee, and any relation to the Plaintiff remained uncertain. Additionally, CHIKAZO’s claim as an importer of directly imported products from the US did not necessarily mean that the Plaintiff, a Taiwanese company, sold its products in the US. The distribution route from the Trademark Owner to CHIKAZO was also unclear. Moreover, the evidence did not clarify if the “Packard Bell Easy Note TK37 Series” sold by CHIKAZO on Amazon JP were manufactured by the Plaintiff.

Due to the lack of evidence proving the relationship between the Taiwanese Trademark Owner and the Japanese distributor, the Court found significant differences between the precedent of the Fashion Walker Case and the present case.

In the cancellation trial decision, the JPO judged that the used trademark “Packard Bell” in plain type in “Packard Bell Easy Note tk37 series 15.6” did not substantially match the registered trademark. However, the Court did not offer any judgment on this matter in the present case.

6. Comment

In recent cases of non-use cancellation trials and court decisions, it has become a mainstream approach that even if a trademark owner did not directly import or sell the goods in Japan, a non-use cancellation request would be dismissed if it was proved that the goods were sold by an intermediate distributor and manufactured by the trademark owner. However, this ruling makes it clear that evidence must be provided to show that the goods sold by the intermediate distributor were manufactured by the trademark owner or its licensee. Had such evidentiary materials been submitted, the outcome of this present judgment would have been different.