Introduction

The Japanese Design Law does not allow the registration of designs that are likely to cause confusion with the business of others [Design Act Article 5 (ii)], even if they satisfy the other registration requirements such as novelty and creativity (i.e., non-easiness of creation), in view of the public interest.

Article 5 (ii) provides as follows:

[Designs Not Eligible for Design Registration]

Article 5: Notwithstanding the provisions of Article 3, the following designs may not have a design registration made:

(ii) a design that risks giving rise to confusion with an article, building, or graphic image connected with another person’s business;

[Design Act（Act No. 125 of 1959）Last English Version: Act No. 42 of 2021]

The following is the judgment of the IP High Court, rendered on February 19, 2024, upholding the invalidation decision of the JPO that a registered design for a handbag is likely to cause confusion with the article connected with Hermès’ (Defendant) business because it includes a famous trademark thereof as a part of the design. (Case No: 2023 Gyo-ke 10113)

Overview of Invalidated Design

The invalidated design registration (Reg. No.1606558) relates to a bag. As shown in the attached photographs, the appearance of the bag is a box-like body without a lid at the top, with a pair of front and rear handles, a pair of belts on the left and right sides, and a padlock to fasten the belts. The padlock has an almost H-shaped, three-dimensional pattern formed by multiple grooves. In addition, on both sides of the bag, small cone-shaped protrusions are formed in a grid of ten rows by nine columns.

Arguments and the Court’s Decision on Article 5 (ii)

In the original trial for invalidation, Hermès (Demandant) claimed that the registration should be invalidated by Article 48 Section 1 (i) of the law since it is a design which has a possibility of causing confusion with an article connected with the business of Hermès based on its own three Japanese registered trademarks. The specific decisions of the JPO Trial Board were as follows.

[vs. Birkin 3D trademark: Reg. No. 5438059]

Although the trademark was recognized as famous in Japan, there is no likelihood of confusion under Article 5 (ii) since its form differs significantly from that of the registered design. In particular, the studs on both sides, the padlock, and the color scheme of the registered design were considered to be important features of difference.

[vs. H-shaped trademark 1: Reg. No.4672965]

The H-shaped trademark 1 is not applicable to Article 5 (ii) because it is not considered to be famous in Japan although its form shares features in common with the registered design.

[vs. H-shaped trademark 2: Reg. No.5864813]

The trademark is found to be famous in Japan and its form shares features in common with the front side of the padlock of the registered design in question, so it was judged to fall under Article 5 (ii).

In the end, the IP High Court upheld the JPO’s invalidation decision on the H-shaped trademark 2, stating that the registered design was likely to cause confusion with the business of Hermès.

Observation regarding this Decision

In this way, there may be cases where a design containing a mark similar to a registered trademark has been inadvertently registered by the JPO, when the design fulfills the other requirements for registration such as novelty as a whole. However, even in such a case, the design registration can be invalidated if a likelihood of confusion with a business of others can be proved.

What is confusing and interesting is that, in Japan, “design similarity” under Article 3 and “confusion” under Article 5 (ii) are two different concepts. Therefore, there are cases where “confusion” occurs even if the design for an article is “dissimilar” to prior designs. Actually, the invalidated design in this case seemed to be created so that it could be dissimilar to the Birkin of Hermès by emphasizing novelty and creativity through the studs on both sides, while retaining a style somewhat similar to Hermès on the front side.

In Japan, the concept of “similarity” defines the scope of design protection as well as the criteria for novelty. The Supreme Court has ruled that the key to “similarity” is whether the aesthetic sense from the perspective of general traders and consumers is the same or different (Case No: 1970 Gyo-Tsu 45, March 19, 1974, “Flexible and elastic hose” Case). Design Act Article 24(2) for “Scope of Registered Design” is considered to have the same meaning. In other words, “similarity” under Japanese Design Law is purely a matter of whether the appearances and/or the nature of the products is similar. Existence of confusion or well-knowness/famousness of prior designs is not considered to directly influence a judgment on novelty or scope of a design right.

On the other hand, regarding the concept of “confusion” under Article 5 (ii), the JPO trial board judged the applicability of Article 5 (ii) from three perspectives: the famousness of another’s trademark, the relevance of the product’s field, and the commonality of form between the famous trademark and the corresponding part of the registered design, which was affirmed by the IP High Court. This is also in line with the statement in the Design Examination Guidelines that:

“A design representing another person’s famous mark or a mark that can be mixed up therewith is very likely to lead to confusion that the article to the design is produced or sold in relation to the business of that person or organization, and the design is found to create confusion with an article pertaining to another person’s business, so such a design may not be registered.” [The Examination Guidelines before revision on April 1, 2020, Part IV Unregistrable designs, 41.1.3]

In addition, it should be noted that the JPO trial board determined the famousness of each of the three registered trademarks of Hermès one by one. The Birkin 3D trademark and H-shaped trademark 2 were found to be highly famous as they were registered in the same form used for their actual products that have been traded extensively in markets around the world. On the other hand, H-shaped trademark 1 was denied famousness due to insufficiency of evidence that the trademark had been used in actual products in the same form as it was registered. This case is instructive since we could learn the criteria used by the JPO and/or the courts to determine famousness under Article 5 (ii).

In practice, the number of cases where Article 5 (ii) has been applied is still very small compared to other registration requirements. Therefore, the accumulation of court decisions on “confusion” under Article 5 (ii) is still scarce. This decision is rare and noteworthy in that the IP High Court made a determination to not allow the registration of a design that risks giving rise to confusion with an article connected with another person’s business over Article 5 (ii).