Supreme Court, 1st Petty Bench / Decided Feb. 28, 2002 / Case No. 2001(gyo-hi) 12
(Trademark Law, Section 56-1, Section 46 bis / Administrative Law, Section 32-1)
When a jointly owned trademark registration is held invalid by the Board of Appeals of the Patent Office, each of the joint owners of the trademark may individually invoke an appeal against the decision of invalidation by the Board of Appeals.
Kabushiki Kaisha Tamaruya and other 10 owners of noodle restaurants ("Joint Owners") filed a trademark application "Mizusawa udon" on September 21, 1990. The trademark was registered on August 31, 1993 as No. 2564665, designating goods in local class 32 for udon noodles. The trademark comprised a "Mizusawa" (in Kanji) and a udon (in Kana) which were written in a vertical form. Mizusawa was named after the region where the Joint Owners have their restaurants and souvenir shops.
Yugen Kaisha Maki Shoji ("Maki Shoji") opened a udon restaurant in the region where the Joint Owners had been doing business. Maki Shoji used, without an explicit license from the Joint Owners, the trademark for its shop and in commercial materials. Joint Owners informally demanded Maki Shoji to stop the use of the trademark. Several discussions were held for amicable resolution of the use of the trademark by Maki Shoji but they did not work out. In March 27, 1995, Joint Owners sent to Maki Shoji a letter of warning in which they announced a possible proceedings for injunctive order. Maki Shoji filed with the Patent Office (JPO) an invalidation trial against the trademark owned by the Joint Owners.
Having reviewed the case, the JPO's Board of Appeals concluded that the trademark had been descriptive because of its combination of a geographical name and a generic name. The Board of Appeals decided to invalidate the trademark for lack in distinctiveness at the time of trademark registration.
Joint Owners filed before the Tokyo High Court an appeal against the decision of the Board of Appeals. The Tokyo High Court, however, dismissed the appeal without having oral hearing. In dismissing the appeal, the high court pointed out, among other things, failure by the Joint Owners in meeting requirements for the qualification as joint appellants. Law requires, the high court said, that all of the joint owners of the trademark at issue had to be listed as the appellants in order for the court to accept an appeal. In fact, two names out of the 11 Joint Owners were missing from the complaint, because they waived their interest in the trademark after the invalidation decision by the Board of Appeals. Waiver was stated within statutory limitation for an appeal, i.e., 30 days from the decision, but waiver was entered into official records after the due date of appeal.
The appellants named on the complaint filed an appeal to the Supreme Court and the Supreme Court accepted the appeal.
The Supreme Court vacated and remanded the high court decision for the following reasons.
1) Qualification as Appellant
Where joint applicants of a trademark application files a demand of appeal or trial with the Board of Appeals against a decision by the Board of Examination, such demand has to be made jointly by all of the joint owners. (Trademark Law, Section 56-1 referring to governing and applicable Patent Law provisions) When either of joint owners wants to dispose of a registered trademark, he/she is required to have the consent of the other owners. Once a jointly filed trademark is registered, however, either of the joint owners can freely use the registered trademark, except for its assignment or senyo-jissiken(exclusive license) (Trademark Law, Section 35; Patent Law, Section 73)
2) Preservative Action (Hozon-koi)
Once a registered trademark is held invalid by the Board of Appeals and no appeal is filed against the invalidation decision within statutory limitation, the trademark in question would be deemed to have never existed from the beginning and a right to exclusively use the trademark would retrospectively extinguish. (Trademark Law, Section 46 bis) Filing an appeal against JPO's invalidation decision amounts to a hozon-koi (action to prevent a right from extinguishing). Each of the joint owners may invoke such revocation suit individually. Construing the provisions in this way would not harm the right of the rest of other owners.
3) In case of a jointly owned trademark, individual owners may have their own interests which are different in nature to each other. Such difference often cause joint owners not to participate in appeal proceedings. Some may want to waive legal interest and such waiver may not be completed within statutory limitation for an appeal while, in other situations, parties may be unreachable for geographical and/or other physical reasons. Taking these into account, the Supreme Court held:
The lower court construed that a partial listing as appellants of joint owners was illegitimate. If so, the invalidation decision by the Board of Appeals would become final immediately upon the lapse of statutory limitation for the revocation suit and the trademark in question would be deemed to have never existed from the beginning. However, such construction by the lower court is inappropriate in view of justice.
4) Requirements of Same Effects
Construction that a joint owner may file an appeal individually against a invalidation decision by the Board of Appeals would not cause any harm to the rest of other joint owners. When the high court decides to accept an appeal against the invalidation decision by the Board of Appeals, the effect of the court decision would extend to all of the joint owners (Administrative Procedure Law, Section 32-1). In such case, the Board of Appeals is required to hear the case once more. On the other hand, when the high court decides not to accept the appeal, then, the invalidation decision by the Board of Appeals would become final immediately upon the expiration of statutory limitation. In either case, the court's decision to accept the appeal filed by joint owners on an individual basis would not be against the rule of "achieving the same effects". When a plurality of appeals are filed jointly or individually, the cases filed would be consolidated and heard by a single court. Nothing would be against the same effects rule.
Therefore, appropriate construction is that when the Board of Appeals decides an invalidation of a registered trademark under joint ownership, each of the joint owners to the trademark is allowed to individually file an appeal against the invalidation decision by the Board of Appeals. Therefore, the lower court's dismissal of the appeal is apparently erroneous in the construction of law.
In the Trademark Law, there are no provisions directly applicable to an issue concerning qualifications as appellants against an invalidation decision at JPO. Therefore, an issue of whether an appeal against JPO's invalidation decision is made collectively in the names of all of the joint owners or it can be made individually, has been considered in accordance with provisions of the Civil Code.
There are two underlying theories in this regard. One is an absolute requirement under which participation by all of the joint owners are compulsory. In dismissing the appeal, the Tokyo High Court applied this theory based on the fact that two owners were missing from the complaint. The other is a flexible requirement which is a doctrine similar to the rule of reason. According to this theory, an appeal filed by a group of, but not all of, the joint owners would be permissible. The Supreme Court clearly stated that a flexible requirement is applicable so far as the "requirements of same effects" (Goitsu Kakutei no Yosei) are met.
Depending upon actual cases, interests of parties are different. If the absolute requirement is rigidly applied, it would allow a challenger to take unfair tactics. For example, a challenger may approach to one of the joint owners and persuade not to join the suit. If the challenger is successful, then, that is the end of the story.
In this instant case, two owners gave up ownership because they did not want to continue arguments with the appellee, Maki Shoji. They did not want to destroy relationship established in the community. The Supreme Court considered that the application of the absolute requirement is inappropriate in view of justice, when and if appellants file an appeal against an invalidation decision by JPO.
Interestingly, the Supreme Court had the same ruling in another case one week earlier than the present case. In K.K. Komaryo v. Pier F. Senizerg (spelling uncertified), decided February 22, 2002, the Supreme Court vacated and remanded the high court's decision for substantially the same reasons as discussed in this case. In Komaryo, one of two joint owners had no interest in legal proceedings as it was no longer doing related business.
The decision of the Supreme Court is likewise applicable to revocation suits against a JPO's decision of invalidation against a granted patent under joint ownership.
(By Jinzo Fujino, Published in the AIPPI Journal, September 2002, pp 341-344)