Practical measures to prevent counterfeit design goods in Japan

June 01, 2012

More and more counterfeit goods from Asian countries have been found in the Japanese marketplace (including the internet marketplace).  The damages incurred by the counterfeit products have become a threat not only to large companies but to SMEs operating business in Japan.  Under such circumstances, taking firm measures against counterfeits of your company’s goods is very effective to establish your company’s reputation and to deter potential infringements in the future.

Among the measures, the most common and practical ones to protect the designs of a goods, in other words, the configuration of a goods, are the following two:
1) obtaining a design right of the configuration under Design Law, or
2) obtaining protection based on Unfair Competition Prevention Law Article 2 (1) (iii) (article stipulating  prevention of imitation of configuration of another person’s goods ) .

* When a configuration of a goods is well-known or famous as a person's indication of goods or business among consumers or dealers, then Unfair Competition Prevention Law Article 2 (1) (i) or (ii) can be applied.
* Obtaining a 3D trademark right can be one of the measures only when the trademark is not deemed as descriptive or has gained a secondary meaning.

Difference between Design Law and Unfair Competition Prevention Law

In Japan, obtaining a design right requires registration of the design thorough a set of procedures (including a substantive examination by the JPO) provided in Design Law, while no procedure is required to obtain protection under Unfair Competition Prevention Law.

Therefore, it seems much simpler and easier to obtain protection to the configuration of a goods under Unfair Competition Prevention Law than Design Law.  However, when exercising a right, some differences between Unfair Competition Prevention Law and Design Law can come to the front which cannot be overlooked as follows.

1. Proof of having right

  Basically, a plaintiff has to prove that all requirements provided in Unfair Competition Prevention Law are met and he/she has a right to obtain protection under the Law.
  In contrast, possession of a design registration is enough to exercise the design right under Design Law; therefore prompt protection can be realized.

2. Intention

  If a goods is identical to the configuration of your company's goods by coincidence without any intentions of imitation of the owner of the first goods, the goods cannot be an infringing goods based on Unfair Competition Prevention Law Article 2 (1) (iii).
  Basically, intentions of imitation or such coincidence are left out of consideration when exercising a design right under Design Law.

3. Scope of protection

  Unfair Competition Prevention Law prevents the goods which are identical (or substantively identical) to your company’s goods.  In other words, only “dead copies “ can be excluded from the marketplace.
  Design Law provides a wider scope of protection in which the goods not only identical but similar to your company’s goods are prevented.

4. Presumption of negligence

  There is no provision of presumption of negligence in Unfair Competition Prevention Law, thus the burden of proof of negligence is on a plaintiff when filing the damages suit.
  Meanwhile, Design Law has a provision of presumption of negligence (Article 40), thus a plaintiff basically does not have to prove of negligence when filing the damages suit.

5. Bona fide and no gross negligence of a person receiving an goods by transfer

  If a person has received a goods that imitates the configuration of another person's goods by transfer with bona fide and without gross negligence, it does not deedmed as infringement under Unfair Competition Prevention Law (Article 19 (1) (v) (b) ).
  In contrast, no such provision regarding bona fides is provided and negligence is presumed in Design Law, a plaintiff dose not have to hesitate to exercise a design right against a person who has received a goods that imitates the configuration of the plaintiff's goods by transfer.

6. Period of protection

  Protection of a configuration of a goods shall expire after three years from the date it was first sold in Japan under Unfair Competition Prevention Law (Article 19 (1) (v) (a)), while protection under Design Law can continue up to 20 years from the registration date.

Our comment

If the life cycle of your company’s goods may be rather short or the goods will be quickly replaced with new models, and prevention of "dead copies" is enough, you can choose protection under Unfair Competition Prevention Law. 
Other cases where protection of Unfair Competition Prevention can be considered would be that design of your company’s goods dose not meet requirements to pass the substantive examination to obtain a design registration. 
However, protection backed up by design rights is more convenient and secure than protection under Unfair Competition Prevention Law.  Therefore, registration of the design is more recommended when important goods or potential long sellers have to be protected.

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AIGI Intellectual Property Law Firm

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