1. C OMBATING A MBUSH M ARKETING, G REY M ARKETING & C OUNTERFEITING U NDER J APANESE L AW ABA 2015 Asia Forum – Tokyo March 3, 2015 Akihito (“Aki”) Nakamachi akihito.nakamachi@amt-law.com Anderson Mori & Tomotsune

2. W HAT IS A MBUSH M ARKETING ? Acts to pretend or create a false impression that one is an official sponsor of, or otherwise has a certain relationship with, the targeted event (e.g., Olympic Games, FIFA World Cup Soccer) to promote its own brands, products or services Nebulous concept How it is actually done is constantly evolving and becoming more “creative” through efforts by marketers year by year, event by event Copyright 2015 Akihito Nakamachi 2

3. T YPES OF A MBUSH M ARKETING – D IRECT VS. I NDIRECT Direct Ambush Marketing Uses trademarks, characters or slogans relating to the targeted event or official goods (e.g., tickets) in connection with sale of goods and services, advertisement, marketing or other promotional activities (e.g., sweepstakes) Usually it is clear that it either infringes trademarks or otherwise violates some contract, rule or policy set forth by the event organizer Indirect Ambush Marketing No explicit use of trademarks or official goods Much more subtle and suggestive in creating the desired impression than direct ambush marketing Can take a wide variety of forms and hard to predict Copyright 2015 Akihito Nakamachi 3

4. E XAMPLES OF I NDIRECT A MBUSH M ARKETING 1996 UEFA European Championship (UK) NIKE took on UMBRO, the official sponsor of the event, by buying up most of advertising spaces and media in the nearest subway station and the neighborhood of the stadium where the quarter- finals, semi-finals and final games were held. 1998 FIFA World Cup (France) NIKE challenged ADIDAS, the official sponsor of the event, by establishing a large soccer field and facility called “Nike Park” in the middle of Paris and sold and provided various soccer-related goods and services throughout the city. Copyright 2015 Akihito Nakamachi 4

5. E XAMPLES OF I NDIRECT A MBUSH M ARKETING (C ONT ’ D ) 2012 London Olympic Games Again, by NIKE who is NOT an official sponsor Part of “Find Your Greatness” campaign – Special video clip targeted at the London Olympic Games Video clip featuring various athletes at a number of locations and facilities whose names all include “London,” such as “London, Ohio,” “London Plaza,” “Little London, Jamaica,” “London Hotel,” “London Gym,” “London Field,” “London Avenue,” “London, Nigeria” and “London, Canada” https://www.youtube.com/watch?v=zyfU6pTLrOU No litigation brought by the LOCOG (London Organising Committee of the Olympic and Paralympic Games) despite the enactment of the special statute to combat ambush marketing at the event Copyright 2015 Akihito Nakamachi 5

6. W HY IS IT B AD ? F OR W HOM ? – P OTENTIAL N EGATIVE C HAIN E FFECT Sponsors Ambush marketing substantially dilutes and lessens the value of the investment made by the sponsors of the targeted event, resulting in the declining value of sponsorship Event Organizers Declining sponsorship value results in the declining value of the event itself, negatively affecting the likelihood of commercial success of the event and all future successive events Others (athletes, audience, government, etc.) A less commercially successful event would negatively impact everyone involved in the event Copyright 2015 Akihito Nakamachi 6

7. C RITICISM & T ENSION – B ALANCING A CT Too much commercialism and regulation? Unreasonable restriction on (commercial) freedom of speech? Would it diminish the “buzz” effect for the event? Would it turn off the grass-root enthusiasm for the event? Copyright 2015 Akihito Nakamachi 7

8. J APANESE L AWS AND R EGULATIONS T HAT M AY P OTENTIALLY A PPLY TO A MBUSH M ARKETING Trademark Act Unfair Competition Act Copyright Act Other Laws and Ordinances (non-exhaustive list) Road Traffic Act Civil Aeronautics Law (Aviation Act) Minor Offenses Act Noise Control Act Building Standards Act Public Safety Ordinance Exterior Advertising Ordinance Environmental Improvement Ordinance Copyright 2015 Akihito Nakamachi 8

9. L IMITATIONS OF C URRENT J APANESE L AWS TO C OMBAT I NDIRECT A MBUSH M ARKETING Trademark Act & Unfair Competition Act Mostly inapplicable to indirect ambush marketing that does not use any mark, character or slogan owned by the event organizer or licensor as a trademark Need a new law in order to regulate a marketing language or action that only indirectly suggests or implies a relationship to the targeted event without involving any use of trademark Exterior Advertisement Ordinance The purpose of the ordinance is narrow, i.e., preservation of landscape – Will not apply effectively to indirect ambush marketing in most cases Need a new law in order to effectively regulate advertisements near facilities used for the targeted event Copyright 2015 Akihito Nakamachi 9

10. P OTENTIAL N EED FOR S PECIAL L EGISLATION FOR T OKYO O LYMPIC 2020 Commitment to the IOC made by Tokyo to effectively regulate ambush marketing Recent Examples of Special, Temporary Legislation 2016 Rio de Janeiro Olympics Enactment of Olympic Act in 2009 2014 FIFA World Cup in Brazil Enactment of General Law of World Cup in 2012 2012 London Olympics Enactment of Olympic Symbol Act in 1995 Enactment of London Olympic Games and Paralympic Games Act in 2006 2010 FIFA World Cup in South Africa Amendment to Merchandise Marks Act in 2002 Copyright 2015 Akihito Nakamachi 10

11. L ET ’ S G ET R EAL In reality, there is NO WAY to stop ALL of indirect ambush marketing plots NIKE’s “London”-themed video clip released at the 2012 London Olympic Games You just need to be able to demonstrated that you are exercising good-faith efforts to reasonably regulate such offenses to keep your sponsors and others (including the IOC) involved reasonably happy Copyright 2015 Akihito Nakamachi 11

12. G REY M ARKET /P ARALLEL I MPORT – J APANESE S UPREME C OURT D ECISION ON BBS C ASE (1997): T WO T HINGS Y OU N EED TO S TOP P ARALLEL I MPORT OF P ATENTED P RODUCTS I NTO J APAN A Japanese patent may not be used to stop parallel import into Japan UNLESS: 1. There was an agreement between the patentee (or its affiliate) and the purchaser of the patented product outside of Japan at the time of the sale of the product that it may not be imported into Japan without obtaining a separate license from the patentee ; AND 2. Clear indication of the existence of such agreement must be made on the product (to give notice to future purchasers) It does not matter whether the patentee has a corresponding patent in the country where the product was initially sold Copyright 2015 Akihito Nakamachi 12

13. H OW TO C OMBAT C OUNTERFEIT G OODS – B ASICS Stop Manufacturing Investigation Raid Working with local government, police and enforcement agencies Stop Promotion & Marketing Constant, diligent online & offline search required If warning & persuasion failed, need to take legal actions Stop Importation Working effectively with customs officials is the key Education Consumers Distributors & Shops Customs & Governments Manufacturers Copyright 2015 Akihito Nakamachi 13

14. IPR B ORDER E NFORCEMENT BY J APAN C USTOMS Japan Customs enforces goods infringing Intellectual Property Right (IPR) at the border. The exportation, importation, and transit of goods infringing IPRs are prohibited under Articles 69-2, 69-11, 30, or 65-3 of the Customs Law. Any person who has transported or attempted to transport such goods into/from Japan shall be punished under Article 109, etc. of the Customs Law. Copyright 2015 Akihito Nakamachi 14

15. P ENAL P ROVISIONS IN THE C USTOMS L AW For Individuals Who Violated the Law Any person who has exported, imported, or attempted to export or import goods infringing IPRs shall be punished by imprisonment with work for not more than ten years and/or a fine not more than ten million yen. (Paragraphs 2 and 3 of Article 108-4, Paragraphs 2 and 3 of Article 109 of the Customs Law.) Any person who has transported or attempted to transport goods infringing IPRs, or has transferred or attempted to transfer goods infringing IPRs from the importing means of transport to the exporting means of transport, shall be punished by imprisonment with work for not more than ten years, and/or a fine not more than seven million yen. (Paragraphs 2 and 3 of Article 109-2 of the Customs Law) Any person who has prepared willfully for any offence as prescribed above shall be punished. (Paragraph 5 of Article 108-4, Paragraph 5 of Article 109, Paragraph 5 of Article 109- 2 of the Customs Law) Copyright 2015 Akihito Nakamachi 15

16. P ENAL P ROVISIONS IN THE C USTOMS L AW (C ONT ’ D ) For Employers of the Offenders Where an employee or any other workers of a juridical person or an association or a foundation without juridical personality has committed an offence described above with regard to the business of the said juridical person, etc., such juridical person, etc. shall be punished by a fine as provided in the respective corresponding Articles. (Paragraph 1 of Article 117 of the Customs Law.) For IPR Infringing Goods The goods infringing IPRs may be confiscated and destroyed by Customs (Paragraph 2 of Article 69-2, Paragraph 2 of Article 69-11, Paragraphs 1 and 2 of Article 118 of the Customs Law.) Copyright 2015 Akihito Nakamachi 16

17. O VERVIEW OF A PPLICATION FOR S USPENSION TO BE M ADE TO J APAN C USTOMS What is Application for Suspension? Application for Suspension is the procedure that IPR holders request Customs to initiate Identification Procedures in the case Customs detects goods suspected of infringing their IPR in imports or exports. Application for Suspension covers patent rights, utility model rights, design rights, trademark rights, copyright & neighboring rights, plant breeder's rights, unfair competition relating to famous indication of goods, configuration of goods and access/copy control of restricted material. (Article 69-4 and 69-13 of the Customs Law, Article 62-13 and 62-17 of the Order for Enforcement of the Customs Law.) What are Identification Procedures? Identification Procedures are the procedures in which Customs makes a decision as to whether the suspected goods are infringing IPRs or not. (Articles 69-3 and 69-12 of the Customs Law, Articles 62-12 and 62-16 of the Order for Enforcement of the Customs Law.) Copyright 2015 Akihito Nakamachi 17

18. O VERVIEW OF I DENTIFICATION P ROCEDURES “Identification Procedures” are the procedures in which Customs makes a decision as to whether the suspected goods are infringing IPRs or not. (Paragraph 1 of Article 69-12 of the Customs Law, Article 62-16 of the Order for Enforcement of the Customs Law) Source: http://www.customs.go.jp/mizugiwa/chiteki/pages/c_001_e.htm Copyright 2015 Akihito Nakamachi 18

19. J APAN G OLF G OODS A SSOCIATION (JGGA) – A NTI -C OUNTERFEIT G OODS L ABEL Color-shifting function Image-flipping & filter verification functions Unique ID numbering 1. Color-shifting function 2. Image-flipping function 3. Filter verification function Source: http://jgga.or.jp/old/pdf/mohouhin.pdf Copyright 2015 Akihito Nakamachi 19

20. Thank You For Listening!! Copyright 2015 Akihito Nakamachi 20