As our first newsletter, we would like to introduce the “Consent System” for trademark registration, which came into effect on April 1 last year. Previously, under Japan’s trademark examination process, when a previously filed identical or similar trademark with identical or similar goods or services already existed, subsequent trademark applications would be denied registration, even if there was consent for the filing of the latter filed trademark from the applicant/right holder of the prior trademark, unless the latter filed trademark was applied by a subsidiary or a parent company of the prior trademark (Trademark Act, Article 4, Paragraph 1, Item 11). Therefore, to register the latter filed trademark, applicants could only avoid rejection by employing a strategy known as “assign-back.” This involved transferring the application or registration ownership to either the senior or junior trademark applicant, obtaining registration approval, and then returning the ownership to its original state.

However, if there were three or more right holders of the prior trademark, consolidating ownership under a single entity proved challenging. Furthermore, as other jurisdictions, including the EU, had already implemented consent systems, the rigidity of Japan’s system—where a temporary transfer of trademark rights was required for a similar latter filed trademark to be registered—drew criticism. These circumstances led to calls for a review and change of the system to better protect valuable intellectual property rights.

In response, Japan introduced the “Consent System” under Article 4, Paragraph 4 of the Trademark Act last April. However, under this article, JPO (Japan Patent Office) examiners retain the discretion to deny trademark registration if they determine that consumers may misidentify or confuse the source of the goods or services, even if consent is obtained from the applicant or right holder of the prior trademark. To determine the likelihood of confusion between the prior and latter filed trademarks, examiners are expected to consider three primary factors: (i) the current use status of both trademarks, (ii) any agreements between the parties aimed at preventing confusion, and (iii) any indications that future confusion regarding the source of goods or services of both trademarks is unlikely. Examples under (i) include the commonality of customer base for designated goods or services, similarity in price range, and the degree to which regions of use overlap. As for (iii), it may involve examining whether there is an agreement between the parties not to alter the current use status of the trademarks in the future.

The effectiveness of the Consent System will become clearer as more cases accumulate under the new framework. However, as Japan has opted for a partial rather than a full consent system—one that does not automatically exempt prior trademarks from being an obstacle if consent is obtained but leaves room for examiner discretion—the practical scope of the Consent System remains uncertain. Therefore, to ensure registration success, it may still be advisable to pursue an assign-back strategy whenever possible.

If you have clients interested in filing trademark applications in Japan using these new systems, please feel free to reach out to us.