Which coffee do you prefer, American or European? – Court Case Review (Trademark): “EUROPEAN case (Use as a trademark in a cancellation trial based on non-use)” (2015)

When you see the indication “EUROPEAN COFFEE” on coffee packaging, what do you think it means? It seems that most people whose mother language is English would regard it merely as an indication of one type of coffee, rather than a trademark. I also believe that even Japanese people, myself included, who are notorious in the world for not being good at English, think in the same way. Despite such recognition, the Intellectual Property High Court (IPHC) held that such indication was used as a trademark. The overview and the gist of the decision are as follows:

The plaintiff, The Coca-Cola Company filed with the Japan Patent Office (JPO) a cancellation trial based on non-use against a trademark registration for EUROPEAN in Katakana in relation to “coffee and cocoa” in International Class 30, owned by the defendant, Mafujiya Syokuhin K.K. The Trial and Appeal Board of the JPO dismissed the claim from the plaintiff, based on the fact that the defendant sold “instant coffee” bearing EUROPEAN in Katakana and COFFEE in Katakana shown in two lines (hereinafter “EUROPEAN COFFEE in two lines”) as follows in Japan during the three years.

[The packaging of the instant coffee which the defendant sold]

The plaintiff appealed to the IPHC.

In this case, the following points of issue were disputed.

Issue No. 1. Whether use of “EUROPEAN” on the above packaging is use as a trademark.

Issue No. 2. Whether “EUROPEAN COFFEE in two lines” of the above packaging is regarded as use of the registered trademark “EUROPEAN in Katakana”, supposing that it constituted use as a trademark.

1. Issue No. 1

Regarding the issue No. 1, taking into consideration evidence of use of the term “EUROPEAN” as an indication of the taste or a type of “coffee, coffee beans” by some companies including the plaintiff, which had been submitted by the plaintiff, the IPHC stated that when the term “EUROPEAN” is used in connection with “coffee, coffee beans”, together with another trademark whose distinctiveness is strong, in many cases, the term “EUROPEAN” is merely an indication of a type (quality), but is not regarded as use of a trademark. Also, the IPHC stated that an idea of “European tasting coffee”, “coffee using deeply roasted beans”, “bitter coffee”, or “rich coffee” arises from “EUROPEAN COFFEE in two lines”.

 However, the IPHC held that taking the following points a) through c) into consideration, the part “EUROPEAN” of “EUROPEAN COFFEE in two lines” on the packaging was used as a trademark to a moderate extent, though its distinctiveness is not so strong.

a) “EUROPEAN COFFEE in two lines” was used alone – without any other trademark with strong distinctiveness;

b) “EUROPEAN COFFEE in two lines” was shown more largely and put on a noticeable area of the packaging, compared with other indications on the packaging; and

c) An indication showing a registered trademark was attached at the side of the part “EUROPEAN” of “EUROPEAN COFFEE in two lines”.

According to a widely-accepted theory and the findings of many court cases, “use as a trademark” is required to avoid cancellation of registrations in cancellation trials based on non-use. However, according to precedents at the courts, the standards of judgment concerning “use as a trademark” or not in cancellation trials based on non-use have been more relaxed than those in trademark infringement cases. The IPHC appears to have followed the relaxed standards and as a result seems to have held use of “EUROPEAN COFFEE in two lines” as use as a trademark by making much of the above a) through c), though it mentioned that an idea of “European tasting coffee”, “coffee using deeply roasted beans”, “bitter coffee”, or “rich coffee” arises from “EUROPEAN COFFEE in two lines”.

The indication “EUROPEAN COFFEE” has been used broadly in the field of “coffee” to mean a type of coffee, such as coffee using deeply roasted beans, as opposed to “AMERICAN COFFEE” meaning a type of coffee, such as coffee using lightly roasted beans, and thus, I think that it is descriptive of “coffee”.

Specifically in the field of food and beverages, generic names and indications of type or quality of goods are very appealing to consumers, and thus in many cases, generic names and indications of type or quality are shown larger and in more conspicuous places on the packaging of goods than other indications, including even trademarks. Moreover, some companies who do not own trademarks appealing to consumers show only merely generic names and indications of type or quality largely on the goods. In other words, we can say that trademarks are not always shown on products or the packaging thereof.

Considering i) the above trade circumstances in the field of food and beverages, ii) that “EUROPEAN COFFEE in two lines” is shown in the same form of letters of the same size and has unity in appearance as a whole, and iii) that the indication showing a registered trademark can be regarded as being attached at the side of the whole “EUROPEAN COFFEE in two lines”, not only “EUROPEAN”, and so on, I do not think that this decision by the IPHC making much only of the above a) through c) is sufficiently persuasive.

2.  Issue No. 2

The Trademark Act of Japan, Article 50, provides that use of “trademarks regarded to be generally accepted as identical with the registered mark” should be considered as use of the registered trademark in cancellation trials based on non-use.

Regarding the issue No. 2, the IPHC held that the part “COFFEE” of “EUROPEAN COFFEE in two lines” is merely a generic name and descriptive, and therefore, use of “EUROPEAN COFFEE in two lines” is regarded as use of “trademarks regarded to be generally accepted as identical with the registered mark, EUROPEAN in Katakana”.

However, considering i) that “EUROPEAN COFFEE in two lines” has unity in appearance as a whole, ii) that it is obvious from the defendant’s trade situation that it has used “EUROPEAN COFFEE” as a whole, and has not used “EUROPEAN” alone, iii) that the IPHC admitted that an idea of “European tasting coffee”, “coffee using deeply roasted beans”, “bitter coffee”, or “rich coffee”, namely an idea different from that arising from “EUROPEAN” alone, arises from “EUROPEAN COFFEE in two lines” as a whole, and iv) that the indication of a registered trademark can be regarded as being attached at the side of “EUROPEAN COFFEE in two lines” as a whole, not only “EUROPEAN”, I think that in this case, the IPHC should have denied use of the trademark regarded to be generally accepted as identical with the registered mark as provided for in Article 50 of the Act.

On the other hand, in relation to the Issue No. 1, the IHPC listed the plaintiff’s use of “EUROPEAN” as an example that the term “EUROPEAN” is used merely as an indication of a type (quality) of coffee, but not used as a trademark (the plaintiff had used “EUROPEAN” together with its trademark “GEORGIA” which is a famous coffee brand in Japan). It seems that the IPHC suggested that even if the defendant exercises its trademark right for “EUROPEAN in Katakana” against the plaintiff’s use of “EUROPEAN”, such use would not constitute trademark infringement. I think that the IPHC’s judgment was very thoughtful in that the IPHC has decreased the risk of a possible trademark infringement lawsuit by revealing its opinion regarding possible infringement expressly, though it was reluctant to cancel the registration based on the relaxed standards of the cancellation trial. Also, if the IPHC had made a decision to cancel the registration, the defendant may have appealed to the Supreme Court. The conclusion made by the IPHC may have been the best choice from the viewpoint that any dispute between both parties can be stopped or avoided in advance.