Faith, Commerce, and Names: Japan's Supreme Court on Religious Organizations and Unfair Competition Law (Tenrikyo Toyofumi Kyokai Case)

Judgment Date: January 20, 2006
Court: Supreme Court of Japan, Second Petty Bench
Case Number: Heisei 17 (Ju) No. 575 (Claim for Injunction Against Use of Name, etc.)

The "Tenrikyo Toyofumi Kyokai case" (天理教豊文教会事件), decided by the Japanese Supreme Court in 2006, addressed novel questions at the intersection of religious freedom, organizational identity, and commercial law. The judgment is significant for two primary reasons: first, it clarified the extent to which Japan's Unfair Competition Prevention Act (UCPA) applies to the activities of religious corporations, particularly drawing a line between core religious functions and commercial "business." Second, it elaborated on the nature and scope of a religious corporation's right to its name, especially when balancing this against the right of another, historically related religious entity to use a name reflecting shared doctrinal origins.

A Schism and a Name Dispute: The Background

The dispute involved two religious corporations rooted in the same religious tradition.

• Religious Org. X (Plaintiff/Appellant): This was the main, well-established religious corporation (the "mother church," so to speak) founded upon the teachings of Founder A. Religious Org. X oversaw a vast network of thousands of affiliated churches across Japan. These affiliated churches typically bore names structured as "Tenrikyo [Local Identifier] Daikyokai" (Grand Church) or "Tenrikyo [Local Identifier] Bunkyokai" (Branch Church). The name "Tenrikyo," representing Religious Org. X and its teachings, was widely recognized (周知 - shūchi) in Japan.
• Religious Org. Y (Defendant/Appellee): The predecessor of Religious Org. Y was the "Tenrikyo Toyofumi Senkyojo" (a missionary station), which had been established with the consent of Religious Org. X's own predecessor entity. The "Toyofumi" part of its name was derived from the geographical location of the church. After the enactment of Japan's Religious Corporations Act, this entity formally became Religious Org. Y, a religious corporation maintaining an affiliated relationship (被包括関係 - hihōkatsu kankei) with Religious Org. X. For many years, it operated under the name "Tenrikyo Toyofumi Bunkyokai" (Tenrikyo Toyofumi Branch Church).

However, doctrinal differences emerged. The representative leader of Religious Org. Y came to believe that the teachings promulgated by Religious Org. X had diverged from the original teachings of Founder A. Consequently, Religious Org. Y adopted a policy of not adhering to the official scriptures prepared by Religious Org. X's headquarters. This led to Religious Org. Y formally dissolving its affiliated relationship with Religious Org. X.

Following this disaffiliation, Religious Org. Y amended its registered rules and changed its official name from "天理教豊文分教会" (Tenrikyo Toyofumi Bunkyokai) to "天理教豊文教会" (Tenrikyo Toyofumi Kyokai – "Tenrikyo Toyofumi Church"). Under this new name, it continued to conduct religious activities based on its interpretation of Founder A's original teachings.

Religious Org. X then filed a lawsuit against Religious Org. Y. X claimed that Y's use of the name "Tenrikyo Toyofumi Kyokai" constituted unfair competition under Article 2, Paragraph 1, Item 1 (causing confusion with X's well-known indications) and Item 2 (misappropriation of X's famous indications – though well-knownness was the primary focus) of the UCPA. X also asserted that Y's actions infringed upon X's inherent right to its name (名称権 - meishōken). X sought an injunction to prevent Y from using the name "Tenrikyo Toyofumi Kyokai" or any name including "Tenrikyo," and other remedies.

Lower Court Rulings:

• First Instance (Tokyo District Court): The District Court ruled in favor of Religious Org. X, finding that Y's use of the name did constitute unfair competition.
• Second Instance (Tokyo High Court): The High Court reversed this decision, ruling in favor of Religious Org. Y. It held that Y's activities, being purely religious, were not subject to regulation under the UCPA, and that Y's use of its name did not unlawfully infringe upon X's name rights.

Religious Org. X then appealed this High Court decision to the Supreme Court.

The Supreme Court's Judgment: Defining "Business" and Balancing Name Rights

The Supreme Court dismissed Religious Org. X's appeal, thereby upholding the High Court's decision in favor of Religious Org. Y. The judgment meticulously addressed the two main legal issues.

I. Are Core Religious Activities "Business" under the Unfair Competition Prevention Act?
The Court first considered the fundamental purpose and scope of the UCPA:

• Purpose of the UCPA: The UCPA, as stated in its Article 1 and informed by international conventions like the Paris Convention, aims to prevent acts of unfair competition and ensure fair competitive practices among businesses or "operators" (事業者 - jigyōsha) operating within a free-market trading society. It seeks to regulate competitive acts that go beyond the bounds of free and fair competition or that disrupt the overall competitive order.
• Scope of UCPA Application:
  • The UCPA should be applied broadly within fields where such a competitive order needs to be maintained. An activity is not automatically exempt from the UCPA merely because it might not be considered a "for-profit enterprise" (営利事業 - eiri jigyō) in the conventional societal sense.
  • Crucially, however, the UCPA's regulations do not extend to activities that fundamentally "cannot be evaluated as business activities within a trading society" (取引社会における事業活動 - torihiki shakai ni okeru jigyō katsudō).
• Application to Religious Corporations' Activities:
  • Core Religious Activities: The Court stated that activities such as the "execution of religious rites" (宗教儀礼の執行 - shūkyō girei no shikkō) and "activities for the propagation of doctrines and missionary work" (教義の普及伝道活動 - kyōgi no fukyū dendō katsudō) are inherently not premised on the kind of free competition within a trading society that the UCPA is designed to regulate. The concept of maintaining "competitive order" in the UCPA sense does not apply to these intrinsic religious functions. Therefore, such core religious activities cannot be evaluated as "business activities in a trading society" and are consequently outside the scope of UCPA application.
  • Activities "Indivisibly Linked" to Core Religious Functions: Furthermore, even activities that, if viewed in isolation, might appear to be revenue-generating (e.g., the publication of religious texts, lectures on doctrine) are also considered outside the UCPA's scope if they are undertaken for the primary purpose of propagating religious doctrines and are "closely and indivisibly linked" (密接不可分の関係 - missetsu fukabun no kankei) to core religious activities. It would be inappropriate to detach these from the core religious mission and treat them differently for UCPA purposes.
  • Distinction for Genuine "Profit-Making Businesses": The Court did, however, draw a line. If a religious corporation engages in what is clearly a "profit-making business" (収益事業 - shūeki jigyō – a category recognized under Article 6, Paragraph 2 of the Religious Corporations Act), such as operating a commercial parking lot, and this activity is, from a competitive standpoint, no different from similar businesses run by secular entities, then such commercial activities can fall within the scope of UCPA application.
• Meaning of "Business" (営業 - eigyō) in UCPA Art. 2(1)(i) & (ii): Based on this understanding, the Supreme Court interpreted the term "business" (営業 - eigyō) – which is part of the definition of a protected "indication of goods or business" (商品等表示 - shōhin tō hyōji) in UCPA Art. 2(1)(i) and (ii) – as necessarily presupposing a competitive relationship within a trading society.
  • Therefore, the Court concluded, "business" in this context does not include the core religious activities of a religious corporation or such ancillary businesses as are indivisibly linked thereto.
• Application to Religious Org. Y's Activities: The facts established that Religious Org. Y's activities under the name "Tenrikyo Toyofumi Kyokai" were strictly limited to core religious practices, such as daily services, monthly rites, and other annual religious events. Y was not engaged in any profit-making businesses and had no plans to start any in the near future.
• Conclusion on the UCPA Claim: Consequently, the Supreme Court held that Religious Org. Y's name, "Tenrikyo Toyofumi Kyokai," as used for these purely religious activities, did not constitute an "indication of goods or business" as defined in UCPA Article 2, Paragraph 1, Items 1 or 2. Therefore, Y's use of its name did not amount to an act of unfair competition under these provisions. The High Court's finding to this effect was affirmed.

II. On the Alleged Infringement of Name Rights (名称権 - meishōken)
The Supreme Court then addressed Religious Org. X's claim that Y's use of its name infringed X's inherent right to its own name.

• Existence of Name Rights for Religious Corporations: The Court first acknowledged that, similar to how individuals have a personality right in their personal names which protects them from misappropriation (citing a 1988 Supreme Court precedent), religious corporations also possess personality interests. Their names, as symbols of the religious corporation, are deserving of protection. Thus, a religious corporation has a right not to have its name misappropriated by other religious corporations or entities, and if this right is unlawfully infringed, it can seek remedies such as an injunction.
• Freedom to Choose and Use a Name: However, the Court also emphasized that religious corporations, as part of their personality interests, possess the "freedom to choose and use a name" (名称使用の自由 - meishō shiyō no jiyū). This freedom includes the ability to use names that concisely indicate their specific religious doctrines. This is considered reasonable and necessary because religious corporations are often primarily distinguished from one another by their unique teachings and beliefs.
• Balancing Test for Name Right Infringement Between Religious Corporations: When determining whether one religious corporation's (Org. Y's) use of a name unlawfully infringes upon another religious corporation's (Org. X's) name right, careful consideration must be given to Org. Y's freedom to use its chosen name. A simple finding of identity or similarity between the names is insufficient to establish unlawful infringement. Such a simplistic approach could unduly restrict Org. Y's religious activities and would also run contrary to the legislative policy of Japan's Religious Corporations Act (which, unlike some other areas of law, does not generally prohibit the use of identical or similar names for different religious corporations).
  The determination of unlawful infringement, the Court stated, must be based on a comprehensive consideration of various factors, including:
  • The identity or similarity of the names in question.
  • The existence and degree of well-knownness of Religious Org. X's name.
  • The actual distinguishability (or lack thereof) of the respective names in practice.
  • The history leading to Religious Org. Y's adoption and use of its name.
  • The manner in which Religious Org. Y uses its name.
• Application of the Balancing Test to the Facts:
  • The Court acknowledged that Religious Org. X's name "Tenrikyo" is indeed well-known, and its misappropriation would undoubtedly cause X considerable detriment. It also recognized that Y's name "Tenrikyo Toyofumi Kyokai" is clearly similar in structure and content to the typical naming pattern of X's directly affiliated churches (e.g., "Tenrikyo ... Bunkyokai").
  • However, several factors weighed heavily in Religious Org. Y's favor:
    • Long Historical Use: Religious Org. Y had operated under the name "Tenrikyo Toyofumi Bunkyokai" as a formal religious corporation for approximately 50 years. If one includes the period of its predecessor, the "Tenrikyo Toyofumi Senkyojo," it had used a name prominently featuring the term "Tenrikyo" (as indicative of its doctrine) for roughly 80 years.
    • Continuity and Doctrinal Expression: Y's current name, "Tenrikyo Toyofumi Kyokai," maintained a clear continuity with its long-standing previous name. Furthermore, it served to clearly express the doctrines Y followed. The Court noted that if Y wished to choose a name reflecting both its history and its doctrinal adherence, any such name would inevitably be very similar to its current one.
    • Shared Doctrinal Roots: Despite its disaffiliation from X, Religious Org. Y continued to venerate Founder A (the original founder of the Tenrikyo faith) and conduct its religious activities based on her teachings. The Court found that, in the general perception of society, the doctrines espoused by Y would still be recognized as "Tenrikyo."
    • Lack of Illicit Intent: There was no evidence suggesting that Religious Org. Y had adopted its current name with any improper motive, such as a deliberate attempt to trade on Religious Org. X's fame or to cause confusion.
  • Considering all these factors, the Supreme Court concluded that Religious Org. Y had legitimate and substantial reasons to include the term "Tenrikyo" in its name, as it was indicative of the doctrines it followed. Prohibiting Y from using such a name would significantly impede its religious activities, which would be a severe detriment to Y. The Court also observed that since the term "Tenrikyo" fundamentally denotes a set of religious teachings, it is somewhat inevitable that, as the doctrine spreads, the original organization (X) cannot maintain an absolute monopoly on the use of that term in the names of all religious bodies adhering to those teachings.
• Conclusion on the Name Right Claim: Balancing all these considerations, the Supreme Court held that even if Religious Org. X experienced some detriment from Y's use of a similar name, Y's use of "Tenrikyo Toyofumi Kyokai" did not constitute an unlawful infringement of X's right to its name. The High Court's decision to dismiss this claim was, therefore, affirmed as being consistent with this reasoning.

Significance and Broader Implications of the Ruling

The Tenrikyo Toyofumi Kyokai Supreme Court decision is a landmark for several reasons:

• UCPA and Non-Commercial Activities: It provided the first Supreme Court-level clarification on the applicability of the UCPA to religious organizations. By distinguishing core religious activities (and closely linked ancillary ones) from actual commercial "business," the Court set a boundary for UCPA's reach into non-commercial spheres. This has implications for other non-profit or non-commercial entities as well, suggesting that their core mission-driven activities might fall outside UCPA regulation if they cannot be characterized as "business activities within a trading society" aimed at maintaining a "competitive order."
• Focus on Defendant's Activities for UCPA "Business" Assessment: The PDF commentary highlights that, unlike some earlier lower court tendencies to focus on whether the plaintiff's activities constituted "business" (to determine if their indication was protectable), this Supreme Court judgment appropriately focused on whether the defendant's (Y's) activities, for which it was using the challenged name, constituted "business" under the UCPA. If the defendant's activities are not "business," then their name use for those activities isn't a "product or business indication" subject to UCPA Art. 2(1)(i) or (ii).
• Balancing Name Rights in the Religious Context: The judgment offers a nuanced approach to resolving name disputes between religious organizations, especially those with shared historical or doctrinal roots. It acknowledges the proprietary nature of an organization's name but also gives significant weight to another organization's freedom to use a name that accurately reflects its long-standing identity and doctrinal orientation, particularly in the absence of bad faith. This careful balancing act is crucial in a domain where names carry deep significance beyond mere commercial branding.
• Continuing Relevance of Common Law Name Rights: Even where the UCPA does not apply (e.g., because the defendant's activity is not "business"), the judgment reaffirms that religious corporations (and by extension, other entities) possess inherent "name rights" derived from personality interests, which can be protected under general tort law principles if unlawfully infringed.

Conclusion

The Tenrikyo Toyofumi Kyokai Supreme Court case provides vital guidance on the interface between unfair competition law, the activities of religious corporations, and the protection of organizational names. It establishes that the Unfair Competition Prevention Act is primarily designed to regulate competitive conduct within the commercial or trading sphere, and its provisions concerning "business" indications do not typically extend to the core religious activities of religious bodies. Simultaneously, the judgment recognizes the existence and importance of a religious corporation's right to its name, while also underscoring that the enforcement of this right must be balanced against another entity's legitimate freedom to use a name that reflects its historical identity and doctrinal beliefs, especially when there is no evidence of bad faith or an intent to deceive. This decision reflects a sophisticated understanding of the distinct nature of religious activities vis-à-vis commercial enterprises and offers a framework for resolving naming conflicts in a way that respects both established identity and doctrinal expression.