Beyond Direct Deception: Japan's Supreme Court on 'Broad-Sense Confusion' in Trademarks (L'AIR DU TEMPS Case)

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read
Beyond Direct Deception: Japan's Supreme Court on 'Broad-Sense Confusion' in Trademarks (L'AIR DU TEMPS Case)

Judgment Date: July 11, 2000
Court: Supreme Court of Japan, Third Petty Bench
Case Number: Heisei 10 (Gyo-Hi) No. 85 (Action for Rescission of a Trial Decision)

The "L'AIR DU TEMPS" case (referred to in Japanese as the レールデュタン事件 - Rēru Dyu Tan Jiken) is a landmark decision by the Japanese Supreme Court that significantly broadened the understanding of "likelihood of confusion" under Article 4, Paragraph 1, Item 15 of the Japanese Trademark Law. This ruling formally recognized that "confusion" extends beyond the misidentification of product source (narrow-sense confusion) to also include misapprehensions about affiliation, sponsorship, or other business relationships between entities (broad-sense confusion). This has had a profound impact on the protection afforded to well-known trademarks in Japan.

Background of the Dispute: Perfume vs. Accessories

The appellee, Company Y, was the owner of a registered trademark consisting of the Katakana characters "レールデュタン" (Rēru Dyu Tan), written horizontally. This trademark was registered for designated goods classified as "personal ornaments, and other goods belonging to this class."

The appellant, Company X, was the owner of a trademark consisting of the Roman letters "L'AIR DU TEMPS," also written horizontally (hereinafter "Cited Trademark"). The Cited Trademark was registered for "perfumery, and other goods belonging to this class." Company X had been using the marks "L'air du Temps" and "レール・デュ・タン" (Rēru Dyu Tan) (collectively, the "Used Trademarks"), as well as the Cited Trademark, on its perfume products.

At the time Company Y filed its application for the "レールデュタン" trademark, Company X's Used Trademarks and Cited Trademark had achieved considerable fame in Japan among perfume dealers and consumers interested in high-end perfumes. These marks were recognized as indicating one of Company X's specific perfume lines.

Company X initiated an invalidation trial against Company Y's trademark registration, specifically for the designated goods: "toiletry tools, personal ornaments, head ornaments, bags, [and] pouches." The basis for the invalidation claim was Article 4, Paragraph 1, Item 15 of the Trademark Law, which prohibits the registration of trademarks that are "likely to cause confusion with goods or services pertaining to another person's business."

The Japan Patent Office (JPO) dismissed Company X's invalidation request. Company X then appealed this decision to the Tokyo High Court. The High Court also ruled against Company X, dismissing its appeal. The High Court acknowledged that Company X's marks were famous among specialized perfume dealers and consumers of luxury perfumes, often used as a "pet mark" (a mark identifying a specific product line). However, it found that these marks were not generally well-known to the broader public. Furthermore, the High Court opined that Company Y's trademark "レールデュタン" did not share the same pronunciation as Company X's Roman-letter Cited Trademark "L'AIR DU TEMPS." Based on these findings, the High Court concluded there was no likelihood of consumers being confused as to the source of the goods.

Company X subsequently sought and was granted a final appeal to the Supreme Court.

The Supreme Court's Landmark Pronouncements

The Supreme Court overturned the Tokyo High Court's decision and, in a move of self-judgment (jihan), cancelled the JPO's original trial decision, effectively upholding Company X's invalidation claim. The Court's reasoning provided critical clarifications on the scope and application of Article 4(1)(xv).

I. Defining "Likelihood of Confusion" to Include Broad-Sense Confusion

The Court first addressed the meaning of "a trademark likely to cause confusion with goods or services pertaining to another person's business" as stated in Article 4(1)(xv). It declared that this phrase encompasses more than just the narrow scenario where a trademark, when used on its designated goods or services, is likely to cause consumers to misidentify those goods or services as originating directly from that other person (narrow-sense confusion).

Crucially, the Supreme Court held that the provision also includes trademarks likely to cause consumers to misidentify the goods or services as originating from a business operator that has a close commercial relationship with the other person—such as a parent company, subsidiary, affiliated company, or a member of a corporate group conducting merchandising activities under the same brand identity. This is what is referred to as "broad-sense confusion."

The Court provided a robust rationale for this inclusive interpretation:

  • The fundamental purpose of Article 4(1)(xv) is to prevent unfair practices like "free-riding" (exploiting the goodwill of well-known or famous marks) and "dilution" (weakening the distinctiveness or value of such marks).
  • It also aims to protect the essential source-identifying function of trademarks, thereby safeguarding the business goodwill of legitimate trademark users and protecting the interests of consumers.
  • Given the evolution of modern business and markets—including corporate diversification, the formation of enterprise groups unified by common branding strategies, and the rise of powerful famous brands—it is necessary to interpret Article 4(1)(xv) broadly to protect the legitimate interests of those who use well-known or famous marks. This protection, the Court reasoned, must extend to preventing the registration of trademarks that pose a risk of broad-sense confusion.

This was the first time the Supreme Court explicitly confirmed that broad-sense confusion falls within the ambit of Article 4(1)(xv), thereby endorsing what had been a developing practice in lower courts and at the JPO. This interpretation also brought trademark law into alignment with established principles in unfair competition law (specifically, the Unfair Competition Prevention Act, Article 2, Paragraph 1, Item (i)), which had already recognized broad-sense confusion.

II. Comprehensive Factors for Assessing "Likelihood of Confusion"

The Supreme Court then laid out a comprehensive set of factors to be considered when assessing the likelihood of confusion:

  • The degree of similarity between the challenged trademark and the other person's mark (or indication).
  • The degree of fame or well-known status and the originality of the other person's mark.
  • The degree of relatedness in nature, use, or purpose between the designated goods or services of the challenged trademark and the goods or services pertaining to the other person's business.
  • The commonality of traders and consumers for these respective goods or services.
  • Other relevant trade practices and circumstances.

The Court emphasized that the determination of whether a likelihood of confusion exists must be made comprehensively, taking all these factors into account. Furthermore, this judgment should be made from the perspective of the traders and consumers of the designated goods or services of the challenged trademark, based on the degree of attention ordinarily paid by such persons. The level of ordinary attention can, of course, vary depending on the nature of the goods or services in question.

III. Application of the Principles to the "L'AIR DU TEMPS" Facts

Applying these principles to the specific facts of the case, the Supreme Court found a clear likelihood of broad-sense confusion:

  • Mark Similarity: Company Y's trademark "レールデュタン" was, at a minimum, identical in pronunciation (shōko) to one of Company X's Used Trademarks, "レール・デュ・タン," and also bore a visual resemblance. Moreover, considering the spelling of Company X's Cited Trademark ("L'AIR DU TEMPS") and its designated goods (perfume), the Court found it reasonable to conclude that the pronunciation "レールデュタン" (Rēru Dyu Tan) would arise from a French reading of the Cited Trademark. Therefore, Company Y's mark was also deemed identical in pronunciation to the Cited Trademark. This directly contradicted the High Court's finding on phonetic similarity.
  • Fame and Originality of Company X's Marks: The Court acknowledged that Company X's Used Trademarks and Cited Trademark were famous among perfume dealers and consumers interested in high-end perfumes, serving to identify one of Company X's perfume products. These marks were also considered original.
  • Relatedness of Goods and Consumer Overlap: The Court found a very close relationship between perfumes (Company X's goods) and the goods for which Company Y's trademark was challenged by Company X (specifically, "toiletry tools, personal ornaments, head ornaments, bags, [and] pouches"). This relatedness stemmed from their shared primary use in women's adornment. Consequently, a significant overlap in the consumer base for these product categories was recognized.
  • Conclusion on Confusion: Based on these circumstances, the Supreme Court concluded that if Company Y's trademark "レールデュタン" were used on the specified goods (toiletry tools, ornaments, bags, etc.), there was a tangible likelihood that traders and consumers would experience broad-sense confusion. That is, they would likely misidentify these goods as pertaining to the business of an operator having a close affiliation or relationship with Company X.
  • "Pet Mark" Status Irrelevant: The Court also noted that the fact Company X's marks were used as "pet marks" (i.e., for a specific product line rather than as an overarching house mark) did not alter this conclusion, given the established fame of those marks and the close connection between the respective product categories.

Broader Implications and Context of the Ruling

The L'AIR DU TEMPS decision has had a lasting impact on Japanese trademark practice.

  • Article 4(1)(xv) as a Flexible "Catch-All": This provision is recognized as a general, comprehensive clause for preventing the registration of trademarks likely to cause confusion, complementing the more specific scenarios outlined in Articles 4(1)(x) through 4(1)(xiv). Unlike some of those more specific items (e.g., items 10 and 11), Article 4(1)(xv) does not strictly require similarity of the marks themselves, nor similarity of the goods or services, as prerequisites for its application. It can be invoked in various situations, including:
    • When marks are similar, but goods/services are dissimilar.
    • When marks are dissimilar, but goods/services are similar.
    • Even when both marks and goods/services are dissimilar, if specific trade circumstances nevertheless give rise to a likelihood of confusion.
      Due to this flexibility, Article 4(1)(xv) is particularly relevant and frequently applied when the senior (other person's) mark is famous, even if it is not registered.
  • Nature of "Likelihood": The "likelihood of confusion" under this provision refers to an abstract risk or an objective probability of confusion occurring. It does not require proof of actual instances of confusion or an imminent danger of such confusion.
  • Timing of Assessment (Critical Point): According to Article 4, Paragraph 3 of the Trademark Law, the determination of whether a trademark falls foul of Article 4(1)(xv) is made as of the time of the trademark application. This means that even if a likelihood of confusion might exist at the later time of examination or an appeal decision, the mark can still be registered if such likelihood of confusion did not exist when the application was initially filed.
  • Alignment with JPO Examination Guidelines: The JPO's Trademark Examination Guidelines reflect the principles affirmed by the Supreme Court. They list factors for assessing likelihood of confusion under Article 4(1)(xv) that are broadly consistent with those articulated by the Court: (1) degree of similarity between the applied-for mark and the other party's mark; (2) degree of public awareness of the other party's mark; (3) whether the other party's mark is a coined word or has a striking construction; (4) whether the other party's mark is a house mark; (5) possibility of business diversification by the other party; (6) relatedness between the goods/services; and (7) commonality of consumers and other trade circumstances. The guidelines also note that the fame of the other party's mark does not necessarily have to be nationwide; local fame can be sufficient, although in such cases, its interplay with the other factors becomes more critical.
  • Practical Significance in Invalidation Trials: Article 4(1)(xv) is a frequently cited ground for seeking trademark invalidation. Disagreements between JPO trial decisions and subsequent court rulings in such cases often stem from differing assessments of mark similarity (particularly for composite marks), the perceived degree of fame of the cited senior mark, or diverging interpretations of actual trade practices and conditions.

Conclusion

The Supreme Court's judgment in the L'AIR DU TEMPS case represents a significant development in Japanese trademark law. By explicitly endorsing the concept of "broad-sense confusion" under Article 4, Paragraph 1, Item 15, the Court substantially strengthened the protection available to owners of well-known and famous trademarks. This decision recognizes the complex ways in which consumers can be misled in modern, multifaceted markets, extending protection beyond simple source misidentification to encompass erroneous assumptions about corporate affiliations, sponsorships, or other commercial relationships. The comprehensive framework of assessment factors laid down by the Court continues to guide the JPO and lower courts in navigating these intricate issues of trademark law.