Instances of Design Trouble

Question 1: We have registered a design of one of our products. Can we produce and sell another product whose design is derived from the registered design? In such a case, do we infringe design rights of others?

Article 23 of the Design Act stipulates as follows: "A holder of design right shall have the exclusive right to work the registered design and designs similar thereto as a business."

This means that in principle, you do not infringe others' design rights as long as that product (which you produce and sell) falls within the scope of "a design similar to the registered design".

Whether or not the product falls within the scope of "a design similar to the registered design" can be determined as follows. For example, assuming that the registered design is a Related Design of another design, such a registered design is determined as being similar to the Principal Design if the registered design is derived by altering the shape of the Principal Design.　In contrast, if the registered design is NOT a Related Design of another design, it is difficult to define the scope of "a design similar to the registered design". In such a case, you can request (i) a Patent Attorney to issue an expert opinion or (ii) the JPO to issue an advisory opinion*1 on whether or not the product that you produce and sell falls within the scope of "a design similar to the registered design".

Please note that in a case where your registered design uses or is in conflict with*2 another person's registered design, you can work such a registered design only in a limited manner, even if you are the right holder of your registered design.

*1 Advisory opinion

Upon request, Appeal Examiners of the JPO determine and issue an advisory opinion on similarity between a registered design and a design in question.

• (a) The JPO issues such an advisory opinion from the fair and even-handed position.
• (b) Results can be obtained in three month at the earliest.
• (c) The fee for requesting the JPO to issue the advisory opinion is as low as 40,000 yen per case.
• (d) Although the advisory opinion has no legally binding power, it is an official opinion issued by the JPO and corresponds to an expert opinion. Thus, the advisory opinion is socially, practically, and sufficiently considered as one of authoritative determinations.

*2 Use and Conflict

Example of Use
In a case where, for example, a design of a complete product entirely includes another design as a component of the complete product, the right holder of the design of the complete product can work that design only in a limited manner.
The following briefly introduces one of well-known precedents (called "Student-desk case") in which "use" was at issue.  

(Judgement of Court)
The design of the later application is configured such that shelves are attached to a main body that resembles the design of the prior application (prior design). Thus, the court judged that the design of the later application uses the prior design, and thus infringes the right of the prior design (Syowa 45 (1970) (WA) Decision No. 507).  

• Example of Conflict In a case where (i) a registered trademark of another person is incorporated into a design as a constituent element and (ii) work of that design causes the registered trademark to be used for a designated article etc. designated by that registered trademark, the design is recognized as being in conflict with the registered trademark.
  Since the right of a trademark is effective only to a designated article etc. of that trademark, no conflict arises as long as the product of the design has no relevance to a designated article etc. of the registered trademark.

Question 2: We found a third party producing and selling, without our consent, a product that is clearly similar to our product. How can we stop them?

Resolution by Interested Parties

• You may send a letter of warning to the infringer so as to negotiate for stopping the infringement. The infringer who has received the letter is likely to voluntarily stop the infringement, but may not respond to compensation for damages.
  As such, this measurement is intended only to ask the infringer to voluntarily stop the infringement, and cannot force the infringer to stop the infringement.
  It should be noted that, through such a measurement was taken, the infringer may not stop the infringement and continue making the infringement, expanding the damages.
  Assume that (i) you presume that the adverse party is infringing your design right and sends the letter of warning to the adverse party's clients but (ii) the actions of the adverse party in reality do not fall under the infringement or the design right based on which the letter was prepared is later invalidated.
  In such a case, the action of sending the letter to the adverse party's clients may fall under the business interference, allowing the adverse party to claim compensation against you and compounding the dispute.
  Thus, if you intend to prepare such a letter of warning, it is necessary to carefully consider (i) to whom you are going to send the letter and (ii) what should be stated in the letter.
  In order to have an advantage over the negotiation, you may consider acquiring an expert opinion from a Patent Attorney or utilizing the advisory opinion system to as to use such opinions for the negotiation.

Resolution by Third Party

• Mediation System
  In this system, a third party is allowed to be a mediator who presents a mediation plan upon hearing arguments of both parties in the conflict, so that the parties can make a settlement under the mediation plan.
  Mediation is intended to facilitate settlement between the parties through the mediator. However, since mediation is not concluded as long as a settlement is reached by both parties in conflict, it sometimes does not work. It should be noted that, if any of the parties do not consent to the settlement, the mediation is simply terminated.
  The mediation system does not fall under the Judicial Openness Principle. Thus, in a case where both parties in conflict wish to keep the dispute secret, the mediation system is convenient.
• Arbitration System In this system, a third party is allowed to be an arbitrator who makes determination on the arbitration under an arbitration organization upon hearing arguments of both parties in the conflict.
  This system differs from the mediation arranged by organizations other than the court in that, once both parties in the conflict agrees to use the arbitration system, the determination on the arbitration made by the arbitrator has a legal force as with the court decision.
  Thus, the arbitration system may allow you to quickly finish the dispute through a procedure that is comparatively simpler than the court procedure.
  The arbitration system also does not fall under the Judicial Openness Principle. Thus, in a case where both parties in conflict wish to keep the dispute secret, the arbitration system is convenient.

Resolution by Court

• Request of Injunction
  In order to seek injunction against design right infringement, the holder of a design right may take the following measures:
  1. Filing a request for stopping the infringement.
  2. Filing a request for preventing the infringement.
  3. Demanding measures necessary for prevention of the infringement including the disposal of products constituting such act of infringement and the removal of facilities used for the act of infringement.
  * The measure 3 can be requested only in a case where the measure 1 or 2 is taken.
  * In a case where secrecy is requested for an infringed design right, the holder of that design right cannot demand injunction unless the holder gives warning with documents stating matters regarding the design (Article 37(3) of the Design Act).
  * In a case where infringement against your design right is becoming so realistic as to cause damages soon and you need to urgently take measures, you may request a temporary injunction from the Court so as to seek suspension of the infringement.
• Request of Compensation for Damages
  You can claim compensation for damages against an infringer who produces and sells products that infringe your design right.
  In order to claim compensation for damages, it is necessary to prove many evidences, some of which may be too difficult to be proven in some cases. Thus, Article 39 of the Design Act stipulates how to presume amount of damages so that burden of proof with regard to the amount of damages will be reduced.
  The Design Act presumes that the infringer committed the infringement with negligence*, so that the holder of the design right can more easily claim compensation for damages against the infringer.
  *It should be noted that this presumption is not applied in a case where the secrecy is requested for an infringed design right.
• Request of Compensation for Unjust Enrichment
  In some cases, the holder of a design right can claim compensation for unjust enrichment.
• Request of Measures to Restore Credibility
  If the infringer has damaged business credibility of the holder of the design right as a result of intentional or negligent infringement of that design right, the Court may order, upon request of the holder, the infringer to take measures to restore the credibility of the holder.
  More specifically, if the Court recognizes that the business credibility of the holder of the design right is damaged by low-quality copies, the Court may order, upon request of the holder, the infringer to publish an apology or the like.
• Demand of Criminal Charge
  The Design Act stipulates that an infringer who produces and sells, without consent, a product that is clearly similar to another company's product shall be punished by imprisonment with work for a term not exceeding 10 years or a fine not exceeding 10,000,000 yen or combination thereof.
  Thus, demand of criminal charge can also be taken into consideration in a case where your design right is infringed.
  If the infringer is a judicial person, in addition to the offender who actually committed the infringement, the judicial person to which the offender belongs will also be punished by a fine.