APAA e-Newsletter (Issue No. 21, February 2021)

Single Color Mark Case (Acquired Distinctiveness), IP High Court Case No. REI 1 (Gyo-Ke) 10147 (June 23, 2020)

Toyoko Yoshida, Shimizu and Daigo (Japan)

1. Issue

Whether a single color mark per se has acquired distinctiveness through use.

2. Subject Application and File History

Mark: orange color mark without outline (Application No. 2015-29999)

Goods: Class 7- Hydraulic excavators (after amendment)

The subject application was ultimately refused for registration by the JPO Board of Appeal, as the mark lacked distinctiveness under Article 3-1-3 of the Trademark Act (“Act”) and did not meet the requirement of acquired distinctiveness under Article 3-2 of the Act.

The applicant (Plaintiff) filed a suit before the IP High Court, to cancel the Appeal Board’s decision .

3. Summary of the Judgment

The IP High Court affirmed the JPO Appeal Board decision and refused the subject application due to lack of distinctiveness. Also, the Court held that subject mark did not meet the requirement of acquired distinctiveness under Article 3-2 of the Act.

4. Outline of the Case

The court held that whether or not the trademark has acquired distinctiveness through use should be determined comprehensively considering the following factors:

・ Period and area where the mark has been used;
・ Sales figures and scale of business related to the product;
・ Period and extent of advertisement;
・ Existence of products of other parties that used the same/similar mark; and
・ Significance of the role that the trademark plays in identifying and selecting products, etc.
・ public interest in avoiding unreasonable restrictions on free use of the color by other traders of the product.

Acquired distinctiveness through use

(1) The court did not admit that the subject color mark was independently recognized among consumers in Japan as the source identifier of the Plaintiff’s hydraulic excavator, mainly for the following reasons:

・ The orange color in the subject mark is a common color.
・ Japan Industrial Standard (JIS) lists orange color as a conventional color name.
・ Similar orange color is adopted as the JIS safety colors for preventing accidents that cause harm to humans and damage to property.
・ Similar orange color is commonly used at construction sites.
・ The subject color mark is affixed on arm and body of the Plaintiff’s hydraulic excavators together with a famous mark “HITACHI” which is the abbreviation of the Plaintiff’s company name.

Reference: picture of Plaintiff’s hydraulic excavators

(2) Questionnaire survey

The Plaintiff conducted a questionnaire survey. The Court found it to be unsatisfactory in demonstrating acquired distinctiveness, and did not admit that the subject color mark was immediately recognized as the source identifier.

The Plaintiff stated that the respondents of the questionnaire survey were traders and consumers of hydraulic excavators nationwide.

However, the Court pointed out that consumers of wheel loaders, dump trucks, road machinery, environmental machinery, etc., and agriculture and dairy farming sectors were excluded from the targets. Also, the target respondents were only limited to those who had ten (10) or more hydraulic excavators. Thus, the Court determined that the target respondents were limited to some of the consumers of hydraulic excavators.

Furthermore, the Court denied the Plaintiff’s argument that the subject color mark has a high degree of recognition.

The Court stated that the number of target respondents was 502, and the number of valid responses was only 193, which was 38.6% of the total. The high recognition rate of 95.9% was for 185 positive respondents out of 193 valid responses. The recognition rate was only 36.8% for 502.

The court also found that the method of the question was ambiguous. The questionnaire survey showed the color image of the subject mark and then asked the question: “please answer which company manufactures the hydraulic excavator”.

The Court determined that this question was based on the premise that the subject mark was recognized as a source identifier. Therefore, the answer could not determine whether the subject mark was recognized as the source identifier only for the Plaintiff, or if it was merely recognized as a body color of the Plaintiff’s hydraulic excavator.

(3) Use of similar color mark by other traders

The Court found that there are a considerable number of traders, other than the Plaintiff, who use similar orange colors in the fields of hydraulic excavators and construction machinery, and also in the fields of agricultural machinery and forestry machinery where hydraulic excavators are used.

(4) The Court held that in transactions of construction machinery such as hydraulic excavators, the function and reliability of the product are considered, but color of machine body does not play a significant role when selecting and purchasing a product.

Further, the Court determined that there is public interest to avoid unreasonably restricting the free use of the color. Consequently, the Court did not admit that the subject mark had acquired distinctiveness through use.

5. Comment

The protection of non-traditional marks such as color marks without outlines took effect on April 2015.

In principle, color marks without outline are not considered inherently distinctive in Japan. The applicant must submit substantial use evidence as proof of acquired distinctiveness.

To prove such acquired distinctiveness is a very difficult task, in particular, for single color marks such as the subject mark.

As of January 2021, there were eight (8) registered color marks in Japan, all of which are “combinations of color marks”. No “single color marks” have been approved for registration.

This judgment indicates that single color mark applications are rarely successfully registered, in practice. The point of interest of this judgment is that it indicates public interest in keeping single color mark free for use by competitors.