The Iceberg Mark (Hyozan-jirushi) Case: Japan's Supreme Court on Judging Trademark Similarity

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read
The Iceberg Mark (Hyozan-jirushi) Case: Japan's Supreme Court on Judging Trademark Similarity

Judgment Date: February 27, 1968
Court: Supreme Court of Japan, Third Petty Bench
Case Number: Showa 39 (Gyo-Tsu) No. 110 (Action for Rescission of a JPO Appeal Board Decision Regarding Rejection of a Trademark Application)

The "Hyozan-jirushi" (氷山印 - Iceberg Mark) case stands as a seminal decision in Japanese trademark law, issued by the Supreme Court in 1968. It established foundational criteria for determining the similarity of trademarks, particularly emphasizing a holistic assessment that goes beyond a simple comparison of individual elements. The Court underscored the importance of considering a trademark's appearance, concept (idea/meaning), and pronunciation—often referred to as the "three aspects"—in conjunction with the actual circumstances of trade for the goods in question. This ruling has since become a cornerstone for analyzing trademark similarity in both registration proceedings and infringement litigation in Japan.

The Marks in Contention and the Initial Dispute

The case originated when Company N (legally Nittobo Co., Ltd.) filed an application for a trademark (the "Applied Mark"). This mark was a composite design, featuring:

  • A graphical device representing an iceberg.
  • The Japanese characters "硝子繊維" (Garasu Sen'i, meaning "glass fiber").
  • The characters "氷山印" (Hyozan-jirushi, meaning "Iceberg Mark").
  • The characters "日東紡績" (Nittobo, Company N's name).
  • Specific color elements.
    The designated goods for this Applied Mark were "glass fiber yarn," which fell under the old Class 26 of goods.

The Japan Patent Office (JPO) rejected Company N's application. The rejection was based on the then-effective old Trademark Law Article 2, Paragraph 1, Item 9 (corresponding to the current Article 4, Paragraph 1, Item 11), which prohibits the registration of a trademark that is identical or similar to another person's prior registered trademark used on identical or similar goods. The JPO cited a prior registered trademark (the "Cited Mark") consisting solely of the hiragana characters "しょうざん" (Shozan). The designated goods for the Cited Mark were "yarn," also under the old Class 26, a category which encompassed Company N's "glass fiber yarn."

Company N appealed the examiner's rejection to the JPO's appeal board, but the board upheld the initial decision, finding the Applied Mark similar to the Cited Mark. Dissatisfied, Company N filed a lawsuit with the Tokyo High Court seeking the cancellation of the JPO appeal board's decision.

The Tokyo High Court's Reversal: Emphasis on Trade Realities

The Tokyo High Court sided with Company N and overturned the JPO's decision. The High Court's reasoning focused significantly on the actual trade circumstances surrounding "glass fiber yarn":

  • Pronunciation: The High Court acknowledged that the Applied Mark would likely be pronounced as "Hyozan-jirushi" (Iceberg Mark) or simply "Hyozan" (Iceberg). The Cited Mark "しょうざん" would be pronounced "Shozan" or potentially "Shozan-jirushi" (Shozan Mark). While acknowledging some phonetic closeness, the court moved beyond a simple sound comparison.
  • Goods Similarity: It was undisputed that "glass fiber yarn" (Applied Mark's goods) was a type of "yarn" (Cited Mark's goods).
  • Standard for Similarity Assessment: The court posited that trademark similarity, particularly phonetic similarity, should ultimately be judged by whether it is likely to cause misidentification or confusion as to the source of the goods, taking into account the realities of the marketplace for those specific goods.
  • Specific Trade Circumstances for Glass Fiber Yarn: The High Court found that glass fiber yarn was a specialized and relatively expensive product. It was not typically sold directly to the general public but rather transacted among a specific and knowledgeable range of traders. In such a specialized trade environment, traders would rarely rely solely on the pronunciation of a trademark to identify it, ascertain the product's source, or recognize its quality. The risk of confusion arising from unclear pronunciation, which might occur in transactions involving a wide and diverse array of traders or general consumers, was deemed minimal for glass fiber yarn.
  • A More Flexible Approach to Phonetic Comparison: Given these specific trade conditions, the High Court concluded that a "relatively relaxed" approach to comparing the phonetic aspects of the trademarks was appropriate. It argued that a rigid, sound-only comparison was insufficient; instead, the overall impression derived from all constituent elements of the mark (device, letters, colors) should be considered.
  • Conclusion of Non-Similarity: Based on this comprehensive analysis, the Tokyo High Court found that there was no likelihood of misidentification or confusion as to the source of the goods. It held that, when viewed in the context of actual trade practices for glass fiber yarn, the Applied Mark and the Cited Mark were not confusingly similar, even if their pronunciations shared some degree of closeness.

The JPO appealed this High Court decision to the Supreme Court.

The Supreme Court's Definitive Framework for Trademark Similarity

The Supreme Court dismissed the JPO's appeal, thereby affirming the Tokyo High Court's decision to allow the registration of the Applied Mark. In doing so, the Supreme Court laid down a clear and influential framework for assessing trademark similarity:

1. The Ultimate Test: Likelihood of Confusion as to Source
The Court began by stating the fundamental principle: "The similarity or dissimilarity of trademarks should be determined based on whether there is a likelihood of misidentification or confusion as to the source of the goods when the compared trademarks are used on identical or similar goods." This aligns the assessment of trademark similarity directly with one of the core purposes of trademark law – the prevention of source confusion in the marketplace.

2. Holistic Assessment: Appearance, Concept, and Pronunciation (The "Three Aspects")
The Supreme Court elaborated that determining this likelihood of confusion requires a holistic (or overall) assessment. One must consider "the impression, memory, association, etc., that a trademark, when used on such goods, conveys to traders through its appearance (外観 - gaikan), concept or idea (観念 - kannen), and pronunciation (称呼 - shōko)." These three elements are often collectively referred to as the "three aspects" or "three-point observation" in Japanese trademark practice.

3. The Crucial Role of Specific "Trade Circumstances"
Crucially, the Court emphasized that this holistic assessment should not occur in a vacuum. Instead, "to the extent that the actual circumstances of trade for the goods can be clarified, the judgment should be based on those specific trade circumstances (具体的な取引状況 - gutaitekina torihiki jōkyō)." This injects a vital element of commercial reality into the similarity analysis.

4. One Aspect of Similarity is Not Conclusive
The Supreme Court provided a critical clarification on how to weigh the "three aspects": "Similarity in appearance, concept, or pronunciation of a trademark is merely a prima facie indicator (一応の基準 - ichiō no kijun) that gives rise to a presumption of a risk of misidentification or confusion as to the source of the goods when the trademark is used."
Therefore, the Court stated, "even if trademarks are found to be similar in one of these three aspects, they should not be deemed similar trademarks if they are markedly different in the other two aspects AND, due to other trade circumstances, etc., there is no discernible risk of causing misidentification or confusion as to the source of the goods."

5. Application to the Hyozan-jirushi Facts
Applying this framework, the Supreme Court affirmed the High Court's findings:

  • Trade Circumstances for Glass Fiber Yarn: The Court acknowledged that the Applied Mark was designated solely for "glass fiber yarn" and its overall composition made it clear it was not intended for other types of goods. It endorsed the High Court's consideration of the actual trading conditions for glass fiber yarn, specifically the finding that traders in this specialized field "rarely identify the trademark, and by extension, recognize the source or quality of the goods, solely by the trademark's pronunciation." In such a context, the Supreme Court agreed that a "relatively relaxed interpretation of the comparison of pronunciation" was permissible without risking source confusion. The JPO's contention that these trade circumstances were merely localized or temporary phenomena was dismissed for lack of supporting evidence; these were the prevailing conditions at and after the time of Company N's application.
  • Comparing the Marks:
    • Appearance: The Court noted the clear visual differences: Company N's Applied Mark was a complex combination including an iceberg device and the characters "硝子繊維," "氷山印," and "日東紡績," while the Cited Mark consisted only of the hiragana characters "しょうざん."
    • Concept (Idea/Meaning): It was undisputed that the Cited Mark "しょうざん" did not evoke the concept or meaning of an iceberg, making the marks markedly different in this aspect.
    • Pronunciation: The Applied Mark was pronounced "Hyozan-jirushi" or "Hyozan," and the Cited Mark "Shozan-jirushi" or "Shozan." The Supreme Court acknowledged that the High Court considered these pronunciations "relatively close" ("よし比較的近似する"). However, it interpreted the High Court's reasoning as emphasizing that one should not simply extract and compare isolated sounds but should consider the overall phonetic impression arising from the marks' entire compositions, especially in light of the significant differences in appearance and concept. The High Court had found the phonetic differences still discernible.
  • Overall Conclusion: Given the "special trade circumstances" for glass fiber yarn, where pronunciation played a lesser role in identification, and coupled with the "marked differences" in appearance and concept, the Supreme Court agreed that any residual phonetic similarity between "Hyozan" and "Shozan" was insufficient to cause a likelihood of confusion as to the source of goods. The marks, considered holistically, were deemed dissimilar.

Legacy and Implications of the Hyozan-jirushi Ruling

The Hyozan-jirushi case is recognized as a leading judgment that has profoundly shaped the analysis of trademark similarity under Article 4(1)(xi) (and its corresponding provisions in later iterations of the law) in Japan. Its principles are consistently followed in subsequent case law and have become integral to JPO examination practice.

Key takeaways and implications include:

  • Primacy of "Likelihood of Confusion": The ruling firmly established that the assessment of trademark similarity is not an abstract exercise but is fundamentally tied to the likelihood of source confusion in the marketplace.
  • The "Three Aspects" as a Framework, Not a Rigid Test: While appearance, concept, and pronunciation are crucial analytical elements, the case emphasized that they must be considered integrally and holistically, rather than as a mechanical checklist. A mark's overall impression, the memories it evokes, and the associations it triggers are all part of this comprehensive evaluation.
  • Conditional Role of Single-Aspect Similarity: The judgment clarified that similarity in just one of the three aspects does not automatically render trademarks similar overall. If the other two aspects are substantially different, and particularly if the actual trade circumstances mitigate any risk of confusion, the marks may still be found dissimilar. This was pivotal in the Hyozan-jirushi case itself, where phonetic closeness was outweighed by other factors.
  • Elevated Importance of "Trade Circumstances" (Torihiki no Jitsujō): This case significantly highlighted the role of real-world market conditions in the similarity assessment.
    • Factors such as the nature of the goods (e.g., specialized vs. mass-market, expensive vs. inexpensive), the characteristics of the relevant consumers or traders (e.g., experts with heightened attention vs. general consumers), and the typical methods of purchasing and identifying goods in a particular sector are all relevant.
    • The "trade circumstances" considered in ex parte registration proceedings (like this case) tend to be those of a more universal or enduring nature for the goods in question, rather than fleeting or highly localized phenomena.
    • This principle of considering trade circumstances has been extended to other contexts, including trademark invalidation trials and trademark infringement lawsuits. However, in infringement litigation, where specific instances of use are being examined, the "trade circumstances" considered can be even more individualized and concrete than in registration proceedings.
    • There is an observed trend in Japanese case law since Hyozan-jirushi for courts to place increasing emphasis on specific trade realities, sometimes leading to a relative diminishing of the weight given to a purely abstract "three aspects" comparison.

Conclusion

The Hyozan-jirushi (Iceberg Mark) case marked a significant step towards a more nuanced, practical, and context-aware standard for determining trademark similarity in Japan. By mandating a holistic assessment that integrates the traditional "three aspects" of appearance, concept, and pronunciation with a careful consideration of actual trade circumstances, the Supreme Court provided a flexible yet principled framework. This approach aims to ensure that the legal determination of trademark similarity accurately reflects the realities of the marketplace and effectively serves the core trademark law objective of preventing consumer confusion as to the source of goods. While the application of "trade circumstances" can sometimes lead to complex factual inquiries and varying outcomes depending on the specific evidence presented, the foundational principles laid down in Hyozan-jirushi continue to guide Japanese trademark law and practice.