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Energy & Natural Resources
In order to help achieve the goal of carbon neutrality by 2050, the Ministry of Economy, Trade and Industry (METI) has decided to develop a green innovation fund of Y2 trillion as part of the New Energy and Industrial Technology Development Organisation. METI has noted that the fund should focus on providing support to companies engaging in fields which have significant policy effects and require long-term, continuous funding support measures for research and development projects in order to reach implementation.
In June 2020 a bill was enacted pursuant to which the Japanese authorities can withhold a portion of payments under a power purchase agreement that will instead be placed in a reserve to cover decommissioning costs. While the final decommissioning regulations have not yet been published, a detailed outline of the regulations was recently published for public comment.
Biomass-fuelled power generation facilities continue to play an important role in Japan's renewable energy portfolio. While the requirements in this respect are complex, interest in biomass renewable energy remains strong. Further, it is anticipated that as the sustainability rules applicable to woody and agricultural biomass fuels are settled, interest and investment in the biomass industry will continue to accelerate. This article provides an overview of the sustainability rules applicable in Japan.
A significant component of the recently approved Proposal to Amend the Electricity Business Act for the Purposes of Establishing a Resilient and Sustainable Electricity System is the nullification of feed-in tariff (FIT) certificates. The Ministry of Economy, Trade and Industry (METI) has recently published a series of notices that provide further clarity on how the nullification will take effect and METI's intention to create exemptions for certain FIT certificate holders.
The Committee on Procurement Price Calculation of the Ministry of Economy, Trade and Industry recently announced a recommendation to set the maximum procurement price that bidders may propose in their development plans for offshore wind renewable energy power generation facilities at Y29 per kilowatt hour. This recommendation reduces the standard procurement price by approximately 20%. The reduction is not expected to affect the pre-tax internal rate of return for developers.
The government recently commenced the first tender process under Japan's new offshore wind law for a floating wind project off the coast of Goto City. This article summarises the key elements of the Occupancy Guidelines for the Goto Offshore Area which, although specific to the Goto project, provide insight as to the Japanese authorities' general approach towards the implementation of the offshore wind law and how the tender processes for the other identified sites will proceed.
The proposed amendment to the Act on Special Measures Concerning the Procurement of Renewable Energy-Sourced Electricity by Electric Utilities will introduce a feed-in premium (FIP) programme. The proposed FIP programme provides that power producers will receive a premium in addition to the market price for the electricity which they generate instead of the fixed electricity price determined by the Ministry of Economy, Trade and Industry under the current feed-in-tariff programme.
In 2017 the Civil Code, which was enacted in 1896, was substantially amended for the first time in more than a century. Although the amendments, which came into effect on 1 April 2020, cover a broad range of issues, many were made to reflect existing case law and commonly accepted interpretations of the pre-amended Civil Code. However, there are some changes which may affect current practices in the energy sector.
Since April 2018, the Ministry of Economy, Trade and Industry (METI) has required business operators involved in solar power generation to set aside a certain amount of funds in preparation for the decommissioning of solar power plants. However, as of January 2019, less than 5% of business operators had complied with this rule. As such, METI established a working group to tackle the problems with the discretionary decommissioning reserve regime.
It appears inevitable that the coronavirus pandemic will affect Japan's solar energy industry. For example, China's public health measures may have an adverse effect on the shipment of photovoltaic modules and other equipment manufactured there, on which many Japanese developers rely. Further, if the government declares a national emergency, this may inhibit engineering, procurement and construction contractors' ability to perform their obligations to develop and construct solar projects.
Cabinet recently approved the Proposal to Amend the Electricity Business Act for the Purposes of Establishing a Resilient and Sustainable Electricity System. The bill introduces a feed-in premium programme, under which energy developers developing projects after April 2022 may receive a certain premium on top of the market price for the electricity that they generate.
Japan's mining industry has recently enjoyed renewed interest thanks to technological advancements that have identified or made accessible various significant on-shore and offshore mineral deposits. This article examines the Mining Law – established in 1950 – and its application. Notably, the law distinguishes between minerals generally and those that are determined by the Ministry of Economy, Trade and Infrastructure to be especially important to the Japanese economy.
The Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism recently designated an area off the coast of Goto City as the first zone dedicated to the promotion of offshore wind projects under the Act Promoting the Use of Marine Areas for the Development of Marine Renewable Energy Generation Facilities. This designation is unique in that, of the 11 areas initially considered, Goto City was the only sea area where floating wind power generation was proposed.
The Ministry of Economy, Trade and Industry is considering the introduction of a power generation base fee for feed-in tariff (FIT) eligible power generation companies. The wheeling charge could affect current FIT-certified projects as well as future FIT-eligible projects. It is understood that the ministry is aiming to introduce this fee in 2023.
Although Japan has significant offshore renewable energy output potential, a number of issues – both systemic and technological – have hindered efforts to develop its offshore renewable market. With the introduction of the Act on Promoting the Use of Marine Areas for the Development of Marine Renewable Energy Generation Facilities, the government aims to develop such offshore renewable energy capacity and encourage and facilitate the development of offshore renewable projects in Japan.
The IP High Court recently confirmed the Japan Patent Office (JPO) Trial and Appeal Board's decision to dismiss Starbucks Corporation's request to invalidate a trademark which had a similar composition to that of its own. To prove that the composition of its trademark was well known and characteristic, Starbucks conducted a survey through a research company using an image that had undergone mosaic processing. However, the JPO and the IP High Court found that the survey was inappropriate.
The reformed Design Act came into force in 2020. This act expands the scope of protection for graphic images, meaning that they need not be recorded or displayed on articles (eg, computers or smartphones) to be considered protectable designs. According to statistics from the Japan Patent Office, 685 such applications had been filed as of January 2021.
In the past decade, the Japanese manga and entertainment industries have been severely damaged by pirate sites which typically operate on servers located in jurisdictions lacking sufficient copyright protection. To address these issues, the 2020 revisions to the Copyright Act introduced new measures to crack down on leech websites and expand the scope of illegal downloading.
The development, production and provision of therapeutic medications, vaccines, medical devices and infection control products are necessary to diagnose, prevent, contain and treat COVID-19. Patent owners and other IP rights holders must therefore cooperate with each other and support new ideas to prevent the spread of COVID-19 without hindering development in the IP sector. To this end, an IP-related solution was recently announced in Japan – namely, the Open COVID-19 Declaration.
As the Civil Code is the basic private law in Japan, the amended version will have a significant impact on the legal aspects of people's lives and their business relationships. Moreover, many of its provisions will affect IP licence agreements. This article addresses these provisions in greater detail, including in relation to non-conformity in contract subject matter, contract cancellation and pre-formulated terms and conditions.
The Ministry of Economy, Trade and Industry recently announced on its website that a Cabinet Order of 1 November 2019 had declared that the revised Design Act would come into force on 1 April 2020. This article provides a summary of the revised act's expanded scope of IP protection for building and interior designs.
The Ministry of Economy, Trade and Industry recently announced on its website that a Cabinet order of 1 November 2019 had declared that the reformed Design Act will come into force on 1 April 2020. Under the revised act, the scope of what constitutes a protectable design will be expanded; however, protection will be limited to commercial activities and not extended to using graphic images registered as designs for private activities.
Japan's patent litigation system has often been said to offer insufficient protection to patentees. As such, recent amendments to the Patent Act aim to improve the effectiveness of the patent litigation system and make it more favourable to patentees (especially small and medium-sized enterprises and start-ups) by introducing a new evidence collection system and a new methodology for calculating damages.
A recent IP High Court case concerned the cancellation of a trademark registration due to a non-exclusive licensee's improper use of the registered mark. Cases regarding cancellation based on Article 53 of the Trademark Act are rare, and cases in which requests to cancel a trademark registration on this basis are granted are even more so. As such, this case is an interesting example of how the IP High Court determines improper use of a registered trademark.
The Ministry of Economy, Trade and Industry recently announced that the Cabinet has approved the Bill for the Reform of the Patent and Design Acts, which will now be submitted to the Diet. This article provides a summary of the reformed Design Act, which has – among other things – expanded the scope of protected designs, improved the related design system and increased the duration of design rights.
In Japan, Customs can seize goods during export or import where they infringe various IP rights. If Customs suspects that certain goods infringe IP rights, it will initiate an identification procedure and notify both the importer and the IP rights holder. If the goods are found to infringe IP rights and no voluntary disposal measures were taken during the protest period, Customs may confiscate and destroy the infringing goods.
Collecting, analysing, combining and processing large amounts of information is critical to the development of the information industry, as exemplified by the Internet of Things, Big Data analytics and artificial intelligence. However, since information often includes copyrighted works, its use can constitute copyright infringement even where there is no harm to the copyright owner. To resolve these problems, acts amending the Copyright Act and the Unfair Competition Prevention Act were recently enacted.
In a recent case, Red Bull AG claimed that a trademark registered by Korean company Bullsone Co, Ltd should be invalidated due to the likelihood of confusion as to the source of the designated goods. A notable point in this case was the difference in position taken by the Japan Patent Office Trial and Appeal Board and the IP High Court with regard to the relevant trademarks and the evidence to be considered when determining the well-known status of the cited mark.
A Japanese company recently claimed that a Chinese company's trademark should be invalidated due to its similarity with the plaintiff's trademarks and the likelihood of confusion as to the source of the designated goods. Although the Japanese Patent Office Trial and Appeal Board rejected the plaintiff's claims, the IP High Court overturned this decision. The conclusive factor in the case was the way in which the similarity of marks should be assessed when they are intended to be stitched on certain goods.
The Tokyo District Court recently rendered its judgment in a patent infringement case regarding fintech-related technologies. This case has been widely reported on in Japan because both parties are major venture businesses and leaders in the Japanese fintech market. This case is also notable as the defendant's cloud-based accounting system involved machine-learning technologies and disputes of this nature are expected to increase.
The registrant in a recent case registered the trademark FRANCK MIURA in Japanese katakana and Chinese characters with regard to its lookalikes of Franck Muller's well-known luxury watches. However, while the watch designs resembled each other in their entirety, the design similarities were not at issue in this case. Rather, the case centred on the similarity of, and the likelihood of confusion between, the trademark and three prior FRANCK MULLER marks.
The Trademark Law and its related regulations govern the registration and protection of trademarks in Japan. The Examination Guidelines for Trademarks also play an important role in the examination of trademark applications at the Japan Patent Office. Revisions to the examination guidelines are underway and additional revisions (eg, guidelines on judging the similarities between trademarks) are under discussion.
When used consistently, package designs can act as brand symbols and identifiers. As such, they are increasingly valuable to brand owners. However, if a package design is used or imitated by third parties, its value to the brand will decrease and may even disappear. In order to prevent third-party use or imitation, brand owners should protect their package designs. The simplest way to do so is to obtain an industrial design or trademark registration.
Suntory Holdings KK and Asahi Breweries, Ltd recently reached an amicable settlement based on the IP High Court's advice. Suntory, which owned the patent for a non-alcoholic beer-flavoured drink, had brought proceedings against Asahi, alleging that its manufacture and sale of the non-alcoholic beer Dry Zero constituted patent infringement. Although details of the settlement are confidential, it is believed to have been favourable to Asahi.
Recent patent law amendments have made it easier for employers to retain exclusive rights to employee inventions. The amendments enable employers to abolish employees' patent rights to inventions created during the course of their employment. In addition, new government guidelines aim to reduce ambiguities concerning payments that should be made to employee inventors when abolishing these rights.
The IP High Court has upheld a Tokyo District Court decision that denied legal protection of catchphrases used to promote the plaintiff's English language school. The court ruled that the catchphrases were "ordinary and common" expressions and thus not eligible for copyright protection; further, they could not be protected as indications of goods under the Unfair Competition Prevention Law or under general tort law pursuant to the Civil Code.
The IP High Court has upheld the Japan Patent Office decision that rejected the non-use cancellation action sought against the registration for the trademark EUROPEAN (in Japanese katakana) with respect to the designated goods "coffee and cocoa, coffee beans" in Class 30. However, the decision has been widely criticised, with many contending that the mark should have been cancelled for lack of distinctiveness.
The Tokyo District Court recently issued a decision under the Unfair Competition Prevention Law, holding that the defendant's sale of ladies' apparel with a similar configuration to that of the plaintiff constituted an act of unfair competition. The court ordered the defendant to pay compensation of damages, but refused to order the defendant to advertise an apology.
The IP High Court has upheld the Japan Patent Office (JPO) trial decision rejecting the unfair use cancellation action brought against the SENTCOMEX trademark used for footwear. The court ruled that the defendant's use of its SENT COMEX trademarks – which the plaintiff alleged to be similar to its own COMEX trademark used for mules and sandals – did not cause confusion with the plaintiff's goods.
Many patent infringement cases involve several defendants, such as manufacturers and resellers of infringing goods. A recent case before the IP High Court illustrates the factors that must be considered in establishing joint tortfeasor liability in patent infringement suits. In particular, an objective – rather than subjective – connection among the tortfeasors must be proved to hold them jointly liable.
A recent case clearly shows the difficulty faced by plaintiffs in substantiating infringement of breeders' rights under the Plant Variety Act. It also highlights the act's lack of a provision similar to Article 104-3(1) of the Patent Law, which provides that in patent infringement litigation, the patentee should not exercise its right against the other party where it is recognised that the patent should be invalidated.
The IP High Court has upheld the Japan Patent Office's rejection of the trademark ASAMAYAMA ('Mount Asama' in Japanese) for beer. Notably, the court ruled that ASAMAYAMA was not a distinguishable mark, even though a previous registration existed for the mark ASAMAYAMA for similar designated goods.
Following an IP High Court decision which admitted assumed damages for patent infringement under Article 102(2) of the Patent Law, the Tokyo District Court likewise admitted the application of Article 102(2) in a recent case. However, the court also admitted a repudiation of the assumption under Article 102(2) and thus accepted a reduction in damages suffered by the patent owner.
The IP High Court has upheld a Japan Patent Office decision cancelling the trademark NURSE®/HEART/NURSE HEART for unfair use for magazines. The court ruled that the trademark owner's subsequent use of the HEART and HEART® marks, which were similar to the petitioner's HEART NURSING trademarks, intentionally caused confusion with the petitioner's magazine.
There has long been disagreement among IP scholars and the courts as to whether Article 102(2) of the Patent Law applies in the determination of damages where the patent owner does not practise or work the patented invention in question. An IP High Court decision has provided welcome clarity on the matter, but has also raised further questions.
The IP High Court recently upheld the Japan Patent Office's refusal to grant Intel Corporation's request to invalidate the registration for the INTELGROW trademark for construction-related goods and services. However, there has been much criticism of the court's decision, and it is believed that the court's reasoning would not withstand the further criticism of foreign observers of international trademarks.
The IP High Court has affirmed a Japan Patent Office trial decision that admitted a cancellation action for unfair use against the registration for the mark MULTIPROGREENS/ MULTIPROGREEN (in Japanese Katakana) for designated goods in Class 30. The court ruled that the use by the trademark owner of its mark was intentional and caused confusion with the goods handled by the petitioner.
The IP High Court recently reversed a Japan Patent Office trial decision that refused to invalidate the trademark registration for the mark TARZAN (in Japanese Katakana) for "plastic processing machines and apparatus, automatic extruding robot for plastic extruding machines and chuck (machine elements)" in Class 7. The court invalidated the mark for being liable to "contravene public order or morals".
The IP High Court has reversed a trial decision in which the Patent Office had declined to invalidate the registration for the trademark LAMBORMINI for the designated goods related to automobiles. In view of the court's findings, the Patent Office is likely to be more flexible in its analysis, which could be bad news for applicants attempting to exploit famous foreign brands.
In upholding the rejection of a claim against the owner of a 'virtual mall', the IP High Court has confirmed that trademark owners may, in certain circumstances, obtain injunctions and damages against managers and operators of shopping websites. The decision can be seen as an application to trademark infringement of the 'karaoke theory' now prevalent in copyright infringement cases in Japan.
As technology has become more sophisticated, there has been a trend towards open innovation, whereby a number of companies share technologies for research, development and production. Amendments to the Patent Act are a response to the changes in the innovation environment and enhance the user-friendliness of patent procedures.
The IP High Court has reversed a trial decision in which the Patent Office had rejected the registration of a three-dimensional trademark for the bottle used for Jean Paul Gaultier Classique perfume products. The decision is a strong indication that the court will take the same position on the applicability of the distinctiveness provisions of Article 3(2) in future cases.
The IP High Court recently ruled on the first case to consider whether a mark should be registered under the system of special collective trademarks for geographical names. As a result of this case, it is likely to become more difficult to obtain registration under the system if the marks involved are considered famous and are already sufficiently generic.
Where employees or ex-employees demand payment for inventions, the method of calculating reasonable value is a crucial issue - uncertainty can obstruct management strategies, cast doubt on mergers and acquisitions and expose a company to the risk of lawsuits. Companies should consider key case law and the revised Patent Law provisions in seeking to minimise their risk.
IP rights holders enjoy legal protection under laws other than the Trademark Law in Japan. However, they should carefully investigate the facts and analyse the legal situation before taking action against third parties. Companies that deal with pharmaceutical products should pay particular attention to the various different laws and regulations affecting the sector.
The Japanese courts have acknowledged in several cases that a common name may acquire distinctiveness as an indication of goods or business by acquiring secondary meaning. However, a recent case demonstrates that it is generally difficult to prove that a common name has acquired sufficient distinctiveness.
The IP High Court has reversed a Patent Office decision allowing the invalidation of the trademark registrations owned by the Ethiopian government for the marks SIDAMO and YIRGACHEFFE for coffee and coffee beans. The court ruled that the marks are not merely geographical names indicating origin, but are recognized among dealers and consumers as brand names or types of high-quality coffee bean from Ethiopia.
The IP High Court has reversed a Patent Office decision that rejected a non-use cancellation action against the registration of a 'smiley face' device trademark - the defendant had sought to avoid the cancellation of its registration by showing use by a
non-exclusive licensee. IP High Court judges will now take a stricter line in determining valid use of a trademark in the non-use cancellation cases that they hear on appeal.
The Trademark Law and its regulations govern the registration and protection of trademarks in Japan. However, the full framework for trademark issues does not end there. Among other things, this update considers the basis of protection for registered and unregistered marks, procedural and enforcement issues and ownership changes and rights transfers.
In the context of registering an extension of patent rights while approval is acquired for safe use, Japan has no equivalent of Section 156 of the US Patent Act, which explicitly restricts the scope of the patent subject to the extension by using the technical term 'active ingredient'. The IP High Court has rejected the Patent Office's previous practice and a number of previous court decisions on the subject.
The IP High Court has reversed a decision invalidating a trademark registration for the mark LOVECOSME, rejecting claims of similarity to various registered trademarks for LOVE. This case shows the potential difficulties in Patent Office or court interpretations involving trademarks in English or Japanese katakana characters, as English words may be recognized or considered differently in Japanese society.
The Supreme Court has ruled that a motion for a secrecy protection order may be allowed as part of a provisional injunction to suspend infringement of a patent right or exclusive licence, as such a case may fall within the meaning of the term 'litigation relating to the infringement of a patent right or exclusive licence' under Article 105(4) of the Patent Law
The IP High Court has modified a decision in a copyright infringement case in which the Tokyo District Court had upheld claims of damages and unjust enrichment against the government. The appeal court held that although the Legal Affairs Bureau had lent books of maps to visitors and provided space for photocopiers with which the books could be copied, the government had not profited from such activities.
The IP High Court has reversed a Patent Office trial decision that had rejected the registration of the Coca-Cola bottle as a three-dimensional trademark. Although an earlier case involving the MINI MAGLITE trademark showed that a three-dimensional shape of a product can be registered, this decision represents the first application of the same principle to a three-dimensional container of goods.
A new law is intended to amend the registration system for patent and utility model licences; it also extends the period for filing an appeal and reduces certain annual fees and registration fees. The former measure is intended to promote the strategic use of IP rights, while the latter measures are intended to encourage their timely and effective protection.
The IP High Court upheld a Patent Office trial decision that rejected the applicant's proposed amendment of a patent claim from a product claim to a process claim. The court ruled that even where an invention is described in the form of a product-by-process claim, it must be classified as an invention of a product and cannot be amended to an invention of a process.
The Law on Special Measures for Industrial Revitalization is to be further amended by Law 36/2007. Among other things, the amendment introduces a non-exclusive patent licence registration system. Where a licensing agreement complying with certain requirements is registered in the Specified Non-exclusive Licences Register, the licences covered by the agreement will be effective against third parties.