Some Case Studies: LEGENDS OF HACCHO-BORI / Stealing a Trademark

The Benefits of Brands
When it comes to watches, bags and jewelry, brands are important. No matter how much we may stress that the quality is the same, "Yamaguchi" cannot compete with "Gucci."

One of our clients, Company X, was a Japanese trading company that had been earning revenue for a long time by selling brand-name goods. ?In this case, the trademark right holder in Japan was an American citizen, Mr. Y, who granted a license to use the trademark in Japan to Company X.
Mr. Y was a former designer who built a well-known brand all by himself, and the Japanese Company X had been sending a substantial amount of royalties to him every year.

After the Trademark Right Holder Passed Away
One day, Mr. Y died of old age in the United States. Then it became necessary to change the name of the trademark right holder in Japan. If Mr. Y were still alive, he could have simply signed a "deed of assignment." However, since he was already deceased, the issue of succession had to be resolved. ?Mr. Y had three children. Not only did they live far away from each other, they also were not very close with each other, according to the information of Company X.

In addition, Mr. Y must have left behind considerable wealth as it took forever to settle the issue of succession, during which time Company X had no idea where to send the royalty.

The Deadline Approaches
That being said, normally the death of a patent right holder does not cause any problems because a trademark right is rarely associated with the death of a person. However, for this particular trademark, the time to apply ?for renewal of the trademark registration was drawing near. The application for renewal of registration is a system that allows continuous extension of a trademark registration by applying for it every 10 years. Thanks to this system, for some major brands, their trademark registrations have been continuously extended from the late 19th century. ?In this particular case; however, we could not tell who should apply for renewal because we could not tell who was the heir of Mr. Y. ?The deadline for the application of registration renewal was drawing near.

Our Suggestion
After getting a briefing on the situation from Company X, I suggested they apply for registration of the same trademark under the name of Company X. This meant stealing Mr. Y's trademark - an act of piracy.

In the import and export business, if an import agent in Japan registers the trademark of an exporter overseas without asking, what happens? ?For cases just like these, there is a clause called "fraudulent registration by an agent," and the registration will be revoked, because it is an unfair act in international trade. ?In this particular case, it was not related to a license to import and export goods, but doing this would still greatly damage the trust between Mr. Y, the licenser, and Company X, the licensee. Then, what kind of care should we take after applying for the trademark registration without asking? ??It would be a good idea to write a letter fully describing the process. ?In the letter, we made it clear that we wanted to pay the royalty to a legitimate heir as soon as possible and that we would return the trademark right to the legitimate heir as soon as such a person is selected, but to please make sure and select the heir before the time of renewal.

The Trademark Failed Renewal
In this case, the heir was not selected because of the complicated interests described above, nor was there any response to several letters sent from Company X. As a result, the application for renewal could not be made before the deadline, and a trademark application submitted under the name of Company A was registered. This meant that if a third party had applied for registration, such registration could have been granted. It was a close call. ?We tried to contact the children of Mr. Y many times even after the registration, but nobody ever responded.

Balance Between Benefits and Laws
In this case, what would happen if a patent office merely observed the laws and regulations and sat back and watched the dispute over the rightful heir of Mr. Y? The trademark right which is the basis of the established brand could have been stolen by someone else. ?Meanwhile, what would happen if we had ignored the laws and regulations and thought solely of the benefits of our client, Company X? It could have led to the revocation of the trademark due to illicit obtainment of a trademark, bringing disgrace to Company X.

This way, the mission of a patent office is to always think about striking a balance between our client's benefits and the law.

Some Case Studies: LEGENDS OF HACCHO-BORI