When people say “Old is gold”, it is not without reason. Today, where heritage is not merely an outdated identity, it rather triggers nostalgia, and emotionally appeals to the psyche of people, with a visit down memory lane bringing a yearning to associate with it, at least from a branding perspective. Past is certain, and perhaps this makes it attractive in the unpredictable present and tomorrow.
BRANDS ARE ALIVE
Top that with the life cycle of brands that may easily be equated to that of humans. Just as we grow old, brands do, too. Some survive longer than others, while some become immortal and some are never found again. While there are others that had long disappeared and made a comeback from the past, there are few such brands because of the challenges that rebranding and relaunching they are likely to face, as well as dealing with the reason for vanishing.
But imagine a world that exists apart from the real world, one that carries the potential of continuing legacies of the past by allowing people to convert their brands to virtual assets and tune in whenever they like. The digital boon is currently engaging this world, that is, the metaverse, and that space promises brand survival and revival.
WHY BRING THEM BACK?
Dormant brands may be a promising proposition for revival subject to the identification of lacunae that led to acquittal from the market in the first place, and a foolproof attempt to keep pace with the market trends and association with consumers. Branding is no more limited to catering for the “requirements” of a consumer, but goes beyond to create that requirement.
Typically, brands that are considered for relaunch either come back with the same goods or services as were originally offered, although with improved quality, or the brand launches with diversification to newer segments. Either way, the offered products or services carry the established goodwill and reputation from the old days, a pivotal requirement for the success of a brand.
Re-visioned products base their importance on the changing expectations and needs of the present modern day. A heritage brand, as much as it carries the past, is also required at the same time to keep pace with the present in terms of offering products or services fit for use in modern ways. For example, if old products or services are not appealing to Gen-Z, an assessment and alteration would be required to recreate a brand persona that resonates with young potential consumers promising the brand to be evocative of new-age ideas.
An old brand inherently carries cumulated recognition and equity from past times, making the task of earning credibility easier. Thus, carrying the potential of the better of both worlds, heritage brands may be the next in branding strategy today.
Apart from the legacy, bringing back an old brand in the real world may be a comparatively economic friendly activity, especially in light of the deep-pocket investments the launch of a new brand entails. While launching the range of new products or services may require advocacy of it containing new-age ideas and requirements, the intrinsic brand value continues from the past experience of having accumulated a reputation and a sense of time lost without the brand.
For instance, the HMT wristwatch at one time was a prized possession by millions of Indians. Although several brands have introduced varied segments of smartwatches, one better than the other, HMT remains a sweet memory for many who may make a ready market, in case it were to come back with updated new tech products.
Of course, apart from the economic factor, the emotional aspect of bringing back heritage brands is nostalgia marketing of brands, one which is very well received in today’s times. For instance, the comeback of the iconic Moto Razr, with imbibed new-age technology, had many awaiting its launch merely on the basis of nostalgia for the brand like no another product.
The collaboration of Mahindra, which brought back the Jawa bikes to India and also to its original homeland, the Czech Republic, after years of absence is another example to corroborate the welcoming revival of heritage brands. From what was a hit in the 1970s to the 1980s and glorified in Indian cinema, it went amiss for many years only to be brought back stronger with the rebranding line, “Life comes full circle for Jawa”.
OPPORTUNITIES IN VIRTUAL SPACE
Apart from the real world we are currently living in, a parallel virtual world is being crowded with several brands and consumers joining the bandwagon to mark a presence in the metaverse. There is a lot of activity in this space, which is also commercially leveraging. Some brands have collaborated with others to monetise their IP, while others have launched virtual stores selling virtual goods.
Celebrities are also using this space for commercial advantages or gains, and trading in non-fungible tokens (NTFs) has been peaking interest from the public as well. For instance, several artworks have been sold as NFTs for thousands of dollars.
NFTs are digital assets representing real items such as art, poems, music, compilations, pictures, lyrics, videos and the like. These are bought and sold online, usually using cryptocurrencies, and are generally encoded with similar software as that used by the cryptocurrencies. Plenty has been discussed about what NFTs are, and the metaverse, and while these seem to be hot topics at the moment, their full potential is yet to be realised to understand the extent of opportunities one can expect in the virtual world. Yet, if one were to extend the principles of branding and functioning to augmented virtual reality, there is much a brand can achieve – even those that may no longer be in existence in the real world anymore.
REVIVAL IN META WORLD
With the activities going on in the virtual space, it is interesting to note that while the real world is moving forward, the virtual world where there are NFTs is making it possible to mint money from past preserves by embracing old ways. For instance, the Hindustan Times that was founded in 1924 and carries in its records golden moments of India’s history is entering the virtual space.
The Times is offering NFTs of its original historic stories and images, allowing consumers to enjoy the pride of buying and keeping records of these historic moments. Several other brands have dipped their toes in the metaverse, too, with an aim to monetise different things which, as we discussed, include old preserves, art, pre-existing records and so on.
FROM OLDEN TO GOLDEN
Few of the factors that are relevant to the phasing out of a brand generally include competition and its inability to keep pace with technological advancements. While this may be so in the real world, virtual reality may be a platform for potential consumers to rekindle their interest in outdated brands on the basis of nostalgia. One of the major expenses of business houses is the cost of real estate.
The bonus of conducting business in the metaverse with NFTs is the economic advantage of not spending on fancy and elaborate office space. Not only that, the costs saved on actual inventory production are also of significance apart from products on shelves not having a demand. Coupled with the fact that what you sell in the metaverse need not be new, a brand can review its kitty of past accomplishments to continue the generation of revenue from the products that may not even be in existence in the real world, but a mere memory.
While there is no specific legislation that could cover the sale of NFTs, the applicability of existing business laws is debated with smart contracts as the meta-guiding base. As “programmes stored on a blockchain that run when predetermined conditions are met”, smart contracts eliminate the intermediaries’ involvement, leading to automatic execution of agreements.
However, since NFTs are usually brought through cryptocurrencies, the subject of which is still speculative in India, the future of NFTs to date seems to depend on the many legislative proposals in the pipeline surrounding digital developments. That said, from a holistic view, it appears that the meta world bubble is here to last, and while it does brands have an opportunity to revive themselves in the virtual space without the requirement of much investment.
Obtaining trademark rights in Japan requires filing an application for trademark registration with the Japan Patent Office (JPO). In total, 135,313 trademarks were registered in 2020 and the average time necessary for completing registration was about 11 months (FY2020). Japan uses the first-to-file system and is a member of the Madrid Protocol, an international system for obtaining trademark protection for many countries with a single application.
Trademark rights are a type of industrial property rights and protect, for instance, “marks” and “naming” attached to goods and services as properties of the owner. Trademarks may include characters, figures, symbols, three-dimensional shapes and any combination of these. In addition, as of April 2015, sound marks, motion marks, hologram marks, colour marks and position marks can also be registered as trademarks.
On the other hand, taste trademarks, aromatic trademarks and tactile trademarks cannot be registered under Japan’s Trademark Act.
REQUIREMENTS AND REFUSALS
After submitting a registration application, formality and substantive examinations are made by the JPO. For registration acceptance, trademarks must not align with any conditions for refusal of registration. The following trademarks cannot be registered:
(1) Trademarks used in connection with goods and services of an applicant that cannot be distinguished from those of other persons. Examples include: common names of goods or services customarily used trademarks, trademarks solely consisting of an indication of origin or quality of goods, etc., common surnames or the name of a judicial person, very simple and common marks, and trademarks by which consumers are not able to recognise the goods or services as those pertaining to a business of a particular person. However, exceptions are stipulated in article 3(2).
(2) Trademarks against the public interest. Examples include: trademarks identical with or similar to an indication used by a non-profit organisation and others (e.g. the Red Cross); trademarks likely to harm public order and morality, such as obscene or outrageous characters; and trademarks likely to mislead as to the quality of the goods or services.
(3) Trademarks that cannot be registered from the perspective of private interest. Examples include: trademarks containing the portrait or name of another person; trademarks identical with or similar to another person’s well-known trademark; trademarks identical with or similar to a registered trademark of another person filing a prior application; trademarks identical with a registered defensive mark of another person; trademarks likely to cause confusion as to the source or origin of goods or services; and trademarks using another person’s famous trademark for unfair purposes.
The term of trademark rights terminates 10 years from registration date, but may be renewed as often as required by filing a renewal application by the expiration date upon payment of a regular fee, or application witihin six months after the expiration date upon payment of an additional fee. Currently, applications made beyond the six-month period after the expiration date are possible only if the right holder has a justifiable reason for a late application. However, a recent revision of the Trademark Act eases this requirement. When the revision takes effect, it will be sufficient to prove that failure to apply for renewal within the designated period was unintentional.
RIGHTS AND LIMITATIONS
The basic effect of a trademark right is that anyone infringes it by using a mark identical or similar to the registered trademark for goods or services identical or similar to the designated goods or services for their business – unless they obtain permission from the trademark right holder.
However, to achieve a balance that allows for smooth economic activity, there are some limitations on the enforcement of trademark rights. Article 26 of the Trademark Act provides that a trademark right has no effect on any of the following trademarks:
- Trademarks indicating one’s name, or well-known pen name, etc. in a commonly used manner
- Trademarks indicating a common name, location of provision, or certain quality of goods or services in a commonly used manner;
- Trademarks customarily used for designated goods or services;
- Trademarks solely consisting of characteristics or features (designated by a cabinet order) indispensable for certain goods; and
- Trademarks not used in a manner recognisable by consumers as goods or services pertaining to the business of a particular person.
To prove infringement by a third party, it is necessary to show such marks are used in its business. Thus, a trademark right holder is unable to enforce its right against someone who privately imports, for instance, an imitation product with a mark identical or similar to a registered trademark.
In addition, preventing a foreign business entity from selling imitation products directly to individual customers in Japan through exercising a trademark right has been notoriously difficult – not least due to interpretational issues on who the importer is (i.e. the user of the mark). Increasing cross-border e-commerce has created a situation where this problem can no longer be overlooked.
To deal with this issue, a Trademark Act amendment promulgated in May 2021 includes the new article 2(7), providing that the “act of importing includes an act of a person in a foreign country causing another person to bring the product into Japan from the foreign country”.
This amendment will enable customs officers to seize imitation products with a mark identical or similar to a registered trademark sold by foreign entities directly to individual customers in Japan – for example, mailing a package. This amendment is supposed to take effect within 18 months from promulgation.
CANCELLATION FOR NON-USE
A third party may file a petition to cancel a trademark registration at the JPO if the trademark has not been used for three years or more, according to article 50(1). The trademark right holder bears burden of proof to show actual use of the trademark by the right holder or licensee. In addition, if the trademark is used only within three months prior to the petition filing for cancellation – and the petitioner proves the trademark was only used after becoming aware the petition would be filed – the trademark right holder cannot avoid cancellation.
REMEDY AGAINST INFRINGEMENT
A trademark right holder may claim an injunction against an infringer and compensation for damages. Article 38 of the Trademark Act provides a presumption of the amount of damages to help alleviate the difficulty a trademark right holder may have in proving the actual amount of damages caused by the infringement.
This presumption provides three types of damages: (1) amount of profit the trademark right holder would have received without infringement; (2) amount of the infringer’s profit derived from the infringement; and (3) so-called “reasonable royalty” expected from the infringer if the trademark had been licensed (please see article 38(1) to (3) for the details).
Recent revision of these presumptions took effect in April 2021, increasing the presumptive amount a trademark holder can receive due to infringement. With regards to (1), the quantity of products at issue used in calculation was previously limited to a trademark right holder’s capacity for sale and manufacturing. However, the recent revision enables a trademark right holder to seek “reasonable royalty” damages for an amount exceeding such capacity.
In addition, with regards to (3), the recent revision allows the court to take into consideration compensation that would be obtained on the premise that the trademark right had been infringed. In other words, the court can decide a royalty rate higher than the parties would have agreed before the infringement becomes certain.
TYPES OF LICENCES
Types of trademark licences are divided mainly into exclusive licences (senyo shiyoken) and non-exclusive licences (tsujo shiyoken). A non-exclusive licence is, as a contractual arrangement, divided mainly into monopolistic non-exclusive licences (dokusenteki tsujo shiyoken) and non-monopolistic non-exclusive licences (hi dokusenteki tsujo shiyoken).
Registration is required for an exclusive licence to take effect. Once an exclusive licence is established, even the trademark right holder is not allowed to use the trademark within the scope of the exclusive grant of rights. In addition, an exclusive licensee has the right to seek an injunction and damages – within the scope of the licence agreement – in its own name with respect to infringement by a third party.
For a non-exclusive licence to be established, registration is not required. However, it is advisable to note that unlike licences for patent rights, design rights and copyrights, registration of a non-exclusive licence of a trademark right is necessary as a requirement for perfection in cases where the trademark right is transferred to a third party.
A non-monopolistic non-exclusive licensee does not have the right to seek an injunction or damages in its own name, while a monopolistic non-exclusive licensee is considered to have the right to seek damages in its own name – although it is not necessarily clear whether it has the right to seek an injunction, and the requirements for such injunction.
OH-EBASHI & PARTNERS
Kishimoto Building, 2F, 2-2-1, Marunouchi,
Tokyo 100-0005, Japan
Tel: +81 3 5224 5566
Trademark protection is obtained through registration. In addition, Taiwan follows the first-to-file system. The following types of marks are registrable: trademarks for both goods and services; collective marks; certification marks; collective trademarks for both goods and services; and all distinctive signs.
In addition, according to the IP Office of Taiwan’s Examination Guidelines on Non-traditional Trademarks, smells, patterns and positions are also registrable, although tactile and gustatory signs are only registrable as a trademark exceptionally.
Application is filed at the IP Office. Multiple-class applications are possible, and foreign applicants without domicile or business offices in Taiwan need a local agent. However, a legalised or notarised power of attorney is not required, and foreign applicants do not need a domestic company or domicile registration.
The application process includes a formal examination of absolute grounds (e.g. distinctiveness) and relative grounds (e.g. likelihood of confusion). Signs without innate distinctiveness can be registered if distinctiveness has been acquired through use.
OPPOSITION PERIOD AND DURATION
The opposition period is three months from publication date of trademark registration. Trademark registration is valid for 10 years from the registered publication date, and renewable for the following 10 years.
A trademark may be renewed within six months preceding the expiry date. The grace period for trademark renewal is six months from the registration expiry date, after which the trademark registration automatically lapses.
A lapsed mark cannot be restored. However, if the owner has failed to comply with the grace period for renewal due to an act of God or any cause not attributable to the owner, the trademark owner may apply for restoration within 30 days from the day following the date on which the cause vanishes.
No application for restoration may be made beyond one year after the failure to comply with the grace period for renewal. A lapsed trademark may be re-registered in the name of a third party at any time if the renewal application is not filed within the grace period.
If a trademark has not been used for three years from registration publication date, or not used later for a continuous period of three years without justifiable cause, the IP Office may ex officio or at the request of a third party cancel the trademark registration.
The party alleging non-use of a trademark needs to provide prima facie evidence upon petitioning for cancellation of the trademark registration. The trademark owner bears the burden of proving trademark use after cancellation proceeding is initiated. In addition, the party alleging non-use of a trademark is not required to prove a legitimate interest in the trademark cancellation.
Use is only required to be done in Taiwan. Trademark use, according to the Trademark Act, means use for marketing purposes in any of the following situations to enable relevant consumers to recognise it as a source-identifier:
- Applying trademark on goods or associated packaging;
- Possessing, displaying, selling, exporting or importing the above-mentioned goods;
- Applying trademark on articles relating to services provided; and
- Applying trademark on commercial documents or advertisements relating to goods or services.
- Use of a mark on digital video or audio, electronic media, the internet or other media also constitutes use of the trademark, with use not necessarily continuous. Sporadic, intermittent or one-off use suffices.
- Using a similar or related trademark does not necessarily suffice.
Use in a form different from that registered constitutes use of the trademark only if minor changes have been made, and the changes do not alter distinctive parts of the trademark.
Use of the mark in a different form does not constitute use if:
- A coloured trademark is changed to a black and white one;
- The colours of a coloured trademark are changed; or
- Only a part of a trademark has been used.
In Taiwan, a licence agreement may be concluded in writing or orally. It is permitted to license an unregistered trademark. A registered trademark may be licensed for all or part of the designated goods or services.
A licence may be exclusive or non-exclusive. If a registered trademark is assigned after the licence has been entered into the register, the assignee is still bound by the licence agreement. The sale of a registered trademark does not automatically terminate the licence if the licence of the registered trademark is entered in the register.
The Trademark Act provides for the following:
(1) If a trademark is assigned subsequent to the recordal of a trademark licence, the assignee shall be bound by the licence agreement.
(2) An exclusive licensee has the right to exclude the trademark owner and any third party from using the licensed trademark.
(3) An exclusive licensee has the right to sublicense the trademark.
(4) A trademark owner may abandon his rights. However, if a licence or a pledge has been entered in the register, the trademark owner shall obtain the consent of the licensee or the pledgee.
There are provisions in the Trademark Act for the recordal of a trademark licence. The recordal of a trademark licence is voluntary, but it becomes effective against third parties only after it is recorded at the IP Office. The recordal must be applied before the expiration of the trademark registration. The licence period may exceed the registration period.
In this case, if the trademark registration is renewed within the renewal deadline, the licence need not be recorded again – and if the trademark registration is not renewed within the renewal deadline, the licence recordal will lapse with the lapse of the registration. However, the licence agreement for the unregistered trademark will still be effective between the licensor and the licensee.
There are no statutory provisions prescribing the form or content of a licence agreement. A request to record a trademark licence in the register shall be made by the trademark owner or the licensee by filing a written request specifying the following:
(1) Name, address of domicile or business establishment, nationality or locality of the trademark owner and licensee, and, if any, name of the representative;
(2) Name and address of domicile or business establishment of the agent, if any;
(3) Registration number of the trademark;
(4) Whether the licence is exclusive or non-exclusive;
(5) Date when the licence took effect and, if any, will be terminated;
(6) Where the licence is for part of the designated goods or services, the list of such goods or services and the classes; and
(7) Where the licence is for a particular locality, the name of that locality.
The licence agreement determines when the licence becomes effective. The licence becomes enforceable against third parties upon the date when the licence recordal is published in the official gazette. An unrecorded licence is not required to be published.
There is an evidentiary presumption that the trademark use of a recorded licensee is legal. A non-exclusive licensee may not join the trademark owner’s infringement proceedings unless the trademark owner petitions the court for third-party participation.
The Trademark Act provides that an exclusive licensee has the right to initiate infringement proceedings in its own name, unless the licence agreement provides otherwise. The licensee does not need to cite the trademark owner as co-defendant in any such proceedings.
DEEP & FAR ATTORNEYS-AT-LAW
13/F, 27 Sec. 3, Chung San N. Rd.
Taipei 104, Taiwan
Tel: +886 2 25856688 Ext. 8187