Download PDF（Newsletter）

Introduction

On December 23, 2022, the Trademark System Subcommittee of the Intellectual Property Committee of the Industrial Structure Council, under Japan’s Ministry of Economy, Trade and Industry (METI) (the “Sub-committee”) published a draft report titled, “Review of the Trademark System for the Development of Brand Strategies Utilizing Trademarks” (in Japanese), which summarizes the last three (3) months’ of discussions on the introduction of a consent letter system to Japanese IP law practice.

 

Over 50 years of discussion

Although trademark practitioners have been discussing the necessity of implementing a consent letter system for over 50 years, such system has yet to be introduced in Japan. This is mainly because it has often been considered by critics that the mere indication of consent between the parties does not eliminate the risk that consumers may confuse the origin of the goods or services when similar marks co-exist in the marketplace. As the JPO does not accept letters of consent to overcome the citation of prior marks, trademark applicants instead have to go through cumbersome “assign-back arrangements” (see our article titled “Quasi-Consent System under Article 4-1-11 of the Trademark Act – How to Overcome Trademark Conflicts Between Parent Companies and Subsidiaries, etc.” in Issue 10 of our Japan Patent & Trademark Update), which often result in additional costs in time and money until registration compared to the situation in which an applicant could simply obtain a consent letter from the holder of the prior trademark registration.

 

JPO Commissioner’s strong initiative

An advisory panel to the JPO Commissioner, known as the round-table conference on policy promotion, began discussions last April on how to address and implement changes in several areas of concern related to the current Japanese IP system in order to promote the utilization of IP. Such areas of concern included: (i) The current IP system’s ability to meet modern demands; (ii) Support for SMEs, universities, and ventures; and (iii) Digitization. Of the 16 topics discussed, “introducing a consent letter system” was among the topics related to the current Japanese trademark system. After 3 months of discussions, on June 30, 2022, the JPO published its report (in Japanese) outlining basic guidelines for the introduction of a consent letter system. Considering the ongoing resistance toward such practice throughout the past 50 years, the JPO choosing to act so quickly is quite surprising, and this rapid change was only made possible by the courage and initiative displayed by the JPO Commissioner, which has now finally opened the way for the introduction of a consent letter system in Japan.

 

Sub-Committee’s Report

The Sub-Committee’s Report concluded that, although there are still opposing views toward the introduction of a consent letter system, considering that: (i) the protection of consumers' interests is already sufficiently ensured by the design of the consent letter system; (ii) applicants’ needs have been increasing in recent years; and (iii) there is an increasing demand for international harmonization, the majority of the committee members agreed that it is appropriate to introduce a consent letter system in Japan.

The Sub-Committee’s Report proposed that consent letters should only be allowed on a conditional basis, i.e., even if a letter of consent is submitted to overcome the citation of a prior trademark registration in an Office Action, the Examiner still has the discretion to reject the trademark application if he/she believes that confusion would be likely to occur, thereby ensuring that the interests of consumers are adequately protected. This type of consent system is widely adopted by many countries, such as the U.S., Canada, China, Hong Kong, Taiwan and Singapore. The Sub-Committee’s Report also proposed the implementation of remedial measures such as Cancellation Actions, if confusion actually does occur as a result of the co-existence of similar trademarks, as well as the implementation of requests for an indication to prevent confusion from arising due to the co-existence of similar trademarks.

 

Conclusion

After 50 years, this is truly a big step forward for brand owners and Japanese trademark practitioners alike, as, once the system is implemented, it will become far simpler for trademarks to be registered and co-exist when the parties do not believe that consumers may confuse the origin of their goods or services, thereby bringing the Japanese system closer to international harmonization. Discussions on the criteria or specific factors to be considered in assessing the likelihood of confusion will commence later this year through another Working Group on Examination Standards, based on the guidelines outlined in the Sub-Committee’s Report.