mario-maricar

Case of Appeal Seeking Injunction Against Act of Unfair Competition (The “MariCar” Case)

1bbbb

The first blog article just arrived from our client JP TM Attorney Mr. Shoji Nakamura from Markstone IP Attorneys!

Case of Appeal Seeking Injunction Against Act of Unfair Competition (The “MariCar” Case)

Intellectual Property High Court, May 30, 2019 Judgment, 平成30(ネ)10081 Case of Appeal Seeking Injunction Against Act of Unfair Competition (The “MariCar” Case) (darts-646-349-G-ja)

Summary

Nintendo, a major player in the gaming industry, brought a lawsuit seeking an injunction and compensation for damages against a company that runs a rental service for street-legal go-karts*. The company was using signs, etc., containing “マリカー” (“MariCar” in Japanese katakana characters), etc., and was posting images of people wearing Nintendo game character costumes online. On May 30, 2019, the Intellectual Property High Court, which was the court of appeal, issued an interlocutory judgment in line with that of the first trial, stating that the actions of the company correspond to acts of unfair competition. The content of this judgment was more in line with Nintendo’s claims than that of the judgment from the first trial.

This article will focus on the differences between the decisions in the first trial and in this judgment.

* This service provides an experience in which users wearing the costumes of characters from Nintendo’s “マリオカート” (“MARIO KART” in Japanese katakana characters) game (https://www.nintendo.com/games/detail/mario-kart-8-deluxe-switch/) drive a go-kart on public roads. See the CNN Travel site for further details:
https://edition.cnn.com/travel/article/maricar-tokyo/index.html

Case Summary

1. The Parties

Plaintiff in the First Trial: Nintendo Co., Ltd. (the “Plaintiff”)
Defendant in the First Trial: Mari Mobility Development Inc. (the “Defendant”)

2. Plaintiff Indications

Plaintiff Text Indications MARIO KART and マリオカート

マリカー

Plaintiff Representations * The Plaintiff’s representations include illustrations of characters such as Mario, Luigi, Yoshi and King Bowser Koopa.

Examples of such illustrations are shown below (excerpt from List of Plaintiff Representations from the annex to the judgment from the first trial).

Mario

mario-maricar

 

3. Defendant Marks

Defendant Mark No. 1 No. 1-1マリカー

No. 1-2 MariCar

No. 1-3 MARICAR

No. 1-4 maricar

Defendant Mark No. 2 * Defendant Mark No. 2 includes costumes worn by characters such as Mario, Luigi, Yoshi and King Bowser Koopa, and a Mario display figure.

Examples of the above are shown below (excerpt from List of Defendant Marks No. 2 from the annex to the first judgment).

Mario Costume Mario Display Figure
Mario Costume-maricar
Mario Display Figure-maricar

 

 

4. Major Actions by the Defendant

From June 2015, the Defendant ran a business that involved renting out street-legal go-karts (“Go-Karts”) (the “Rental Business”), which included the following actions.
a) Use of Defendant Marks No.1-1 to 1-4 on websites and in advertising.
b) Use of photographs on the Rental Business website showing people wearing Mario costumes, etc. (Defendant Mark No. 2).
c) Uploading of videos to YouTube featuring people wearing Mario costumes, etc., (Defendant Mark No. 2) driving Go-Karts.
d) Having employees wearing Mario costumes, etc., (Defendant Mark No. 2) lead customers on Go-Kart tours as part of the Rental Business.
e) Placement of a Mario display figure (Defendant Mark No. 2) in the shop.

5. The Issues

Although there are many points of contention in this case, the main issues are whether or not the Plaintiff’s indications correspond to an indication of goods or business as determined under the Unfair Competition Prevention Act, and whether or not the act of using the Defendant’s marks corresponds to unfair competition as described in Article 2, Section 1, Paragraph 1 or 2 of the Unfair Competition Prevention Act.

6. The First Trial (Tokyo District Court, September 27, 2018 Judgment, 平成29(ワ)6293 (darts-732-656-F-ja)

(1) Relevance of Plaintiff Indications as an Indication of Goods or Business

a) Plaintiff Text Indication “マリカー”

The Court held that the Plaintiff text indication “マリカー” was “widely known among people throughout Japan with an interest in games” and acknowledged that “マリカー” is a well known indication of goods or business.

However, as the degree to which it is well known is limited to people who understand the Japanese language, the Court did not accept that it is widely known among those who do not understand the Japanese language.

b) Plaintiff Representations

The Court acknowledged that Plaintiff representations relating to characters such as Mario, Luigi, Yoshi and King Bowser Koopa are well known indications of goods or business among people in Japan and among people who live overseas but visit Japan.

(2) Relevance of Article 2, Section 1, Paragraph 1 or 2 of the Unfair Competition Prevention Act with Regard to Each Action

a) Use of Defendant Marks No.1-1 to 1-4

Applicable Provisions: Article 2, Section 1, Paragraph 1 of the Unfair Competition Prevention Act

With regard to Defendant Mark No. 1-1 “マリカー,” the Court held that it is identical to the Plaintiff text indication, and that there is the possibility that Defendant Marks No. 1-2, 1-3 and 1-4 could be recognized as being similar to the Plaintiff text indication “マリカー.”

In light of the above, the Court also held that there is a strong correlation between the Plaintiff’s product (i.e. game software), and the Rental Business of the Defendant, and decided that there is the possibility of confusion between the two.

However, with regard to the scope of the injunction, on the basis of the above-mentioned decision that “マリカー” cannot be acknowledged as being well known among people who do not understand the Japanese language, the injunction was not granted with regard to websites and advertising containing only foreign languages.

b) Use of Defendant Mark No. 2

Applicable Provisions: Article 2, Section 1, Paragraph 1 of the Unfair Competition Prevention Act

The Court held that people wearing character costumes is suggestive of the characters from the game series Mario Kart, meaning that prospective customers of the Rental Business may be confused.

With regard to the Mario display figure, the Court decided that it is similar to the Plaintiff’s representation Mario, and decided that confusion may arise in the same way as mentioned above.

Therefore, the use of Defendant Mark No. 2 was prohibited in the business facilities and activities of the Defendant, and an injunction was granted with regard to the actions of the Defendant (use on websites, uploading of videos, having employees wear character costumes, placement of Mario display figures in shops and the leasing of character costumes).

Judgment Summary

In light of the rulings in the first trial, the appeal court concluded the following.

1. Relevance of Plaintiff Indications as an Indication of Goods or Business

a) Plaintiff Text Indication “マリオカート”
The Court acknowledged that the Plaintiff text indication “マリオカート” represents the popular kart racing game of the Plaintiff, constituting a “famous indication of goods or business” as mentioned in Article 2, Section 1, Paragraph 2 of the Unfair Competition Prevention Act, and that this status still prevails.
In addition, the Court also acknowledged that the English indication “MARIO KART” is a “famous indication of goods or business” of the Plaintiff not only among consumers in Japan, but also overseas.
b) Plaintiff Representations
The Court acknowledged that the Plaintiff representations (characters) Mario, Luigi, Yoshi and King Bowser Koopa correspond to “famous indication[s] of goods or business.”

2. Relevance of Article 2, Section 1, Paragraph 1 or 2 of the Unfair Competition Prevention Act with Regard to Each Action

a) Use of Defendant Marks No. 1-1 to 1-4
Applicable Provisions: Article 2, Section 1, Paragraph 2 of the Unfair Competition Prevention Act
The Court decided that Defendant Mark No. 1 is similar to the Plaintiff text indication due to the similarity in appearance and pronunciation, and the commonality of the concept.
Therefore, the Court concluded that the Defendant’s actions, including use on websites, etc., written only in foreign languages, correspond to acts of unfair competition.
b) Use of Defendant Mark No. 2
Applicable Provisions: Article 2, Section 1, Paragraph 2 of the Unfair Competition Prevention Act
With regard to people wearing character costumes, the Court found that this is similar to Plaintiff representations because they are similar in appearance to the Plaintiff’s representations, and because Mario Kart is a kart racing game featuring Mario and Yoshi, etc., that is famous among consumers both within Japan and overseas, and therefore decided that this corresponds to Article 2, Section 1, Paragraph 2 of the Unfair Competition Prevention Act.
In addition, the Court also acknowledged that the Mario display figure is similar to the Plaintiff representation Mario, and decided that the act of placing the Mario display figure in a shop corresponds to Article 2, Section 1, Paragraph 2 of the Unfair Competition Prevention Act.

Comments

This decision is an interlocutory judgment from the appeal trial, and only considered matters that form the basis for the injunction and compensation, such as whether or not the actions of the Defendant correspond to acts of unfair competition. The final judgment is expected to be rendered after a trial is held to set the amount of compensation.
This judgment differs from that of the first trial in terms of the findings regarding the degree to which the Plaintiff’s text indications are acknowledged to be comparatively well known/famous, and the extent of customers, etc. These differences are outlined below (Table 1).

Table 1. Comparison of Judgments from the First Trial and this Judgment

Point of Contention First Trial Current Judgment
Applicable Provisions

Unfair Competition Prevention Act Article 2, Section 1, Paragraph 1

Applicable Provisions

Unfair Competition Prevention Act Article 2, Section 1, Paragraph 2

Defendant Mark No. 1 Degree to which Plaintiff text indications are well known/ famous 1) マリカー (“MariCar” in Japanese katakana characters)

Well-known among people in Japan with an interest in games.

However, not well known among people who do not understand the Japanese language.

 

1) マリオカート (“Mario Kart” in Japanese katakana characters)

Famous in Japan.

2) MARIO KART

Famous in Japan, and

Famous among customers overseas.

3) マリカー (“MariCar” Japanese katakana characters)

Well-known among customers in Japan.

Similarity between Plaintiff Text Indications and Defendant Marks 1) Plaintiff Text Indication “マリカー”

      vs.

  Defendant Mark “マリカー”

  Decision regarding similarity: Identical

 

2) Plaintiff Text Indication “マリカー”

     vs.

   Defendant Marks “MariCar”, “MARICAR” and “maricar”.

   Decision regarding similarity: Similar

1) Plaintiff Text Indication “マリオカート”

      vs.

  Defendant Mark “マリカー”

  Decision regarding similarity: Similar

 

2) Plaintiff Text Indication “MARIO KART”

     vs.

   Defendant Marks “MariCar”, “MARICAR” and “maricar”.

   Decision regarding similarity: Similar

Possibility of Confusion Possibility of confusion

(Makes customers think of the Plaintiff text indication “マリカー” and misleads them regarding the relationship between the Rental Business and the Plaintiff.)

No decision

 

Defendant Mark No. 2 Plaintiff Representations Well Known/Famous Well known Famous
Similarity between Plaintiff Representations and Defendant Marks Similar

(Marks are suggestive of characters from the game series Mario Kart.)

Similar

(Customers of the Rental Business could associate people wearing character costumes and riding Go-Karts with Plaintiff representations.)

Possibility of Confusion Possibility of confusion

(It is possible to mislead customers into thinking that the Plaintiff and the Defendant are involved in the same business as a group, or that the Defendant has signed a licensing agreement.)

No decision

 

Firstly, in this judgment, the Plaintiff text indications being considered to determine whether they are well known/famous are “マリオカート,” “MARIO KART” and “マリカー.” The court recognized “マリオカート” and “MARIO KART” as being famous and “マリカー” as being well known.

It is suspected that the Court recognized “マリオカート” and “MARIO KART” as being famous because they acknowledged the fact that such indications are used not only in the gaming industry, but are also licensed for use in other fields that are hardly related to games.

In this respect, the judgment differs from that of the first trial where “マリカー” was acknowledged as only being well known.

And because the Plaintiff text indications were acknowledged to be famous, whereas the applicable provisions in the first trial were Article 2, Section 1, Paragraph 1 of the Unfair Competition Prevention Act, in this judgment they were changed to Paragraph 2.

While Article 2, Section 1, Paragraph 1 of the Unfair Competition Prevention Act regulates actions causing “confusion with another person’s goods or business by using an indication of goods or business.”, it is clear that Paragraph 2 of the same is advantageous for the Plaintiff as it regulates the use of an indication of goods or business that is identical or similar to another person’s famous indication of goods or business without the requirement of causing confusion.

This is especially significant in that it makes the Defendant’s claim of “no possibility of confusion” based on the existence of disclaimers, in both English and Japanese stating that they are unrelated to Nintendo, meaningless.

Furthermore, in this judgment the court decided that the Plaintiff text indications “マリオカート” and “MARIO KART” and Defendant Mark No.1 are similar.

From the perspective of the court deciding whether or not the actions correspond to acts of unfair competition, based on the fame of “マリオカート” and “MARIO KART” and the degree of similarity with the Defendant marks, it seems that the court placed a slight emphasis on conceptual similarity, which is why similarity was acknowledged.

In terms of the degree of consumer awareness, while in the first trial the Plaintiff indications were not acknowledged to be well known among people who could not understand the Japanese language, in this judgment, “MARIO KART,”, which is the English representation of “マリオカート,” was acknowledged as an indication of goods or business, and “MARIO KART” was acknowledged to be famous among consumers both within Japan and overseas.

As having websites, etc., in only foreign languages, which were not recognized in the first trial, was acknowledged to be an act of unfair competition, this decision will lead to an expansion in the scope of injunctions.

On the other hand, it is thought that there will be little effect on the amount of compensation due to the increase in the degree of consumer awareness regarding the fame of Plaintiff text indications. This is because in the first trial, on the basis that Plaintiff representations (character costumes) were acknowledged to have strong customer appeal, actions relating to people who did not understand the Japanese language were not excluded from the basis for calculating the amount of compensation.

This time the plaintiff sought an increase in the amount of compensation for damages, but because the interlocutory judgment acknowledged the plaintiff’s indication itself to be famous, and the actions of the defendant were ongoing even after the first trial judgment, there is the real possibility that the amount of compensation will be increased.

The plaintiff also claimed infringement of copyrights. Although this attracted some attention due to its relationship with fashion law, as the aim of the plaintiff was achieved through the application of the Unfair Competition Prevention Law, the court did not make a decision on this aspect.

The point to note about this judgment is that in terms of indications relating to products concerning games, etc., an injunction was granted not only with regard to the name of the game, but also with regard to the use of embodiments (costumes), including character representations. As the Japanese game and anime industries grow, this is thought to be a significant judgment in that it shows one of the possibilities for protecting the commercial use of characters.

2bbbb 3bbbb 4bbbb bbbb

Passionate about IP?

Reach out to us about becoming a featured author on our blog: