Court Case Review (Trademarks) – Similarity of Combination Marks (Agatha Naomi Case)

Yuasa and Hara Intellectual Property News Vol. 29
published in May, 2010
AOSHIMA, Emi (Ms.)

Court Case Review – Similarity of Combination Marks

Appellant (plaintiff) : Agatha Diffusion (French Corporation)
Appellee (defendant) : A Smart Kabushiki Kaisha (Japanese　Corporation)
Case Numbers : Hei-20(Wa) 21018, Tokyo District Court, decided on February 27, 2009 Hei-21(Ne) 10031, IP High Court, decided on October. 13, 2009

1.Introduction
It is sometimes difficult to judge similarity between a combination mark and a one-word mark which includes one element of the combination mark.

Recently, interesting rulings for a trademark infringement case were issued, in which judgments regarding similarity of a combination mark and such a one-word mark made by the Tokyo District Court and its appeal court, i.e. the IP High Court, were different, though both courts followed the same criteria for assessing similarity of a combination mark shown in a precedent of the Supreme Court.

2.Background
The plaintiff, Agatha Diffusion established in 1974 in Paris, produces and sells jewelry, personal ornaments, and so on. Agatha Diffusion has a trademark right for “AGATHA” (see below) (hereinafter “Plaintiff’s Mark” or “Appellant’s Mark”) in Classes 6, 14 and 26 for “buckles, jewelry, personal ornaments or accessories, and so on”.

The defendant, A SMART K.K. (hereinafter “A SMART”), is an importer and seller of jewelry, personal ornaments and so on. In 2006 or earlier, A SMART opened a website, whose URL was www.agathanaomi.com. On the website, they started selling and advertising their goods, displaying the following marks (see below) (hereinafter collectively “Defendant’s Marks” or “Appellee’s Marks”).

Defendant’s Marks:

1.

2.

3.

4.

5.

Agatha Diffusion filed a lawsuit with the Tokyo District Court, claiming infringement of their trademark right for Plaintiff’s Mark against the A SMART’s use of Defendant’s Marks.

3.Judgment made by the Tokyo District　Court on February 27, 2009
In ruling, the Tokyo District Court cited a precedent, the 2008 judgment of the Second Petty Bench of the Supreme Court in Case No. Hei-19(Gyo-hi) 223, September 8, 2008, “TSUTSUMINOOHINAKKO- YA in Hiragana” (“つつみのおひなっこや”) vs. “TSUTSUMI in Hiragana” (“つつみ”) and “TSUTSUMI in Chinese Characters” (“堤”).

In the cited case, the following criteria of judging trademark similarity were introduced.

“In principle, a mark composed of inseparable series of letters should be recognized as an inseparable single unit when judging similarity of marks. It is not acceptable to compare only some part of a combination mark with a mark in question. Only when a certain portion of the combination　mark provides a strong impression and dominant to serve as a source indicator of goods or services among traders and consumers, or when any sound or idea that can identify the origin of goods/services does not arise from the other part of the combination mark, and so on, it is allowed to divide the combination mark when judging similarity of marks.”

The Supreme Court held that, although the plaintiff’s mark contained “TSUTSUMI” as part thereof, the “TSUTSUMI” portion was not so impressive or dominant enough to serve as a goods-source identifier, and added that the remaining part could possibly function as a source indicator. The Supreme Court thus determined that the plaintiff’s combination mark “TSUTSUMINOOHINAKKOYA” should be treated as an inseparable single unit, and therefore was not similar to the defendant’s mark “TSUTSUMI”. The court concluded that the plaintiff’s mark should not have been invalidated and the case has been remanded back to the IP High Court, whose decision is to be made in due course.

Following the above criteria of the precedent shown by the Supreme Court, the Tokyo District Court stated that Defendant’s Marks “Agatha Naomi” were written in a unified form (in view of the size/style of the letters, color, etc.) and thus should naturally be read through as a single term. Further, like Agatha Christie, “Agatha Naomi” would be recognized as a name of a woman. Also, the Tokyo District Court did not accept from the evidence the Agatha Diffusion’s assertion that “AGATHA” was well-known as their abbreviated name and their housemark among consumers, and held that the part “AGATHA” of Defendant’s Marks would not give a strong impression nor be dominant as an indication of source of the goods to traders and consumers. In addition, the Tokyo District Court added that　since “Naomi” is a woman’s name, it was not possible to accept that any sound or idea that could identify the origin of goods/services did not arise from the part “Naomi” of Defendant’s Marks.

Thus, the Tokyo District Court held that Defendant’s Marks “Agatha Naomi” should be recognized as a single unit as a whole and they were not similar to Plaintiff’s Mark “AGATHA”, and rejected all of the Agatha Diffusion’s assertions claiming the defendant’s trademark infringement.

4.Judgment made by the IP High Court on October 13, 2009
Agatha Diffusion appealed to the IP High Court, asserting that, since Appellee’s Marks were composed of two separable parts “Agatha” and “Naomi” in terms of appearance, sound and idea, they should not be regarded as “a single unit”. Agatha Diffusion added that, since “AGATHA” was well-known for “personal ornaments” among Japanese consumers, the part “Agatha” of Appellee’s Marks would give a strong impression and be dominant, and thus the part should be regarded as the main part of Appellee’s Marks.

The IP High Court cited almost the same criteria of judging similarity of combination marks as shown in the above Supreme Court case and other Supreme Court cases. The IP High Court explained their similarity assessment criteria as follows:

“In principle, a combination mark should be recognized as an inseparable single unit when judging similarity of marks, if the constituent elements are so well integrated that it is unnatural to separately observe one or more elements away from the other elements in trade. It is not acceptable to compare only some part of such a combination mark with a mark in question. Only when a certain portion of the combination mark provides a strong impression and dominant to serve as a source indicator of goods or services among traders and consumers, or when any sound or idea that can identify the source of goods/services does not arise from the other part of the combination mark, and so on, it is allowed to divide the combination mark when judging similarity of marks.”

In view of the number of Agatha Diffusion’s shops, advertisement on magazines, sales volumes of their products and so on in Japan*, the IP High Court accepted that “AGATHA” had already obtained a wide recognition as an abbreviated trade name of Agatha Diffusion and also as a well-known trademark for “personal ornaments” among Japanese consumers and traders before A SMART started using Appellee’s Marks in October, 2006.

* The appellant had sold their products in Japan at their 25 shops operated in department stores since 1989 and had 280 shops worldwide. Sales of accessories and jewelry bearing “AGATHA” were 1.3 to 1.4 billion per year from 2006 to 2008 on the basis of wholesale price.

In accordance with the above criteria, the IP High Court judged that Appellee’s Marks were confusingly similar to Appellant’s Mark, showing the following reasons. — The first letter of each element “Agatha” and “Naomi” of Appellee’s Marks are represented in capital letters and there is a space between the two elements “Agatha” and “Naomi”. These elements of Appellee’s Marks are therefore not combined closely enough to say that it is unnatural to separate the part “Agatha” from the other part in trade.

— In view of the fact that “AGATHA” has obtained a wide recognition for “personal ornaments” and is considered to give a strong impression and dominant as a source indicator of goods, the sound and idea of “Agatha” would arise from Appellee’s Marks in addition to the sound and idea arising from the entire Appellee’s Marks.

Accordingly, the IP High Court concluded that A SMART’s use of Appellee’s Marks constituted infringement of the Agatha Diffusion’s trademark right for Appellant’s Mark and thus overturned the decision of the Tokyo District Court.