Episode 35

In a lawsuit filed by ZOOM Corporation, a Japanese audio equipment manufacturer, against Zoom Video Communications, Inc. (hereinafter referred to as Zoom Inc.) and its Japanese distributor, alleging that the logo for the online meeting system "Zoom" was similar to ZOOM's own logo and infringed its trademark rights, the Tokyo District Court ruled on April 24th that Zoom Inc. must pay approximately 166.2 million yen and the distributor approximately 16.1 million yen. The court did not grant the order to cease using the logo. Note that this ruling, although more than a month has passed since the judgment, has not been published on the Supreme Court's case law search site; therefore, this explanation is based on media reports.
ZOOM Corporation is a company that develops and sells electronic and audio equipment. In 2005, it applied for a trademark for its logo, a stylized version of the four letters "ZOOM," which was registered the following year.
Meanwhile, Zoom Inc. was established in the United States in 2011 and displays the "Zoom" logo, representing its service name, on its software screens and web pages.
The plaintiff had previously stated on its website that, due to the defendant's actions, its customer support phone and email lines were inundated with inquiries regarding video conferencing services starting around October 2019. Furthermore, in June 2020, following ZVC's earnings announcement, the company's stock price hit the upper limit for two consecutive days due to name confusion, before plummeting. This not only disrupted the plaintiff's business operations but also caused damage to innocent third-party investors. The plaintiff had previously published this information on its website, but it has since been removed.
The judgment pointed out that both companies use stylized "ZOOM" or "Zoom" lettering, and that the pronunciation and meaning of "zoom" are the same. The court concluded that, "overall, the logos of both companies are somewhat similar," and therefore found Zoom's logo to have infringed ZOOM's trademark rights.
However, as a result of the widespread adoption of Zoom's online conferencing services following the COVID-19 pandemic, the court determined that there was no longer a risk of general users confusing the two companies after July 2020. Therefore, while ordering Zoom Inc. to pay an amount equivalent to the license fees for past trademark infringements, it did not order Zoom Inc. to cease using the logo.
Incidentally, the object of trademark protection is not the trademark itself, but the business goodwill embodied in the trademark (Trademark Law Article 1). In this regard, the investigator's commentary in the Kozosushi case (Supreme Court Judgment of March 11, 1997, Case No. 1102 (O) of 1994, Third Petty Bench, Minshu Vol. 51, No. 3, p. 1055) is relevant.
"Different considerations are necessary when dealing with rights such as patents and utility model rights compared to trademark rights. Specifically, in the case of patents and utility model rights, they possess creative value in themselves, and infringing products utilize these rights in their performance, effectiveness, etc. Therefore, a portion of the sales of infringing products inevitably corresponds to the consideration for the patent rights. Furthermore, the sale of infringing products signifies the existence of demand for products that embody the said patent rights, and the very fact that infringing products are being sold indicates the existence of demand for the granting of licenses for said patent rights.
In contrast, trademark rights do not possess creative value in themselves; they only acquire a certain value when linked to the business reputation of the company or other entity that produces the goods. That is, the sale of goods bearing a trademark does not immediately mean that the trademark contributed to sales, nor does the sale of goods necessarily mean that there is demand for licenses to use that trademark." (Same judgment, Supreme Court Case Commentary, Civil Cases, 1997 (Part 1)) (Page 370)
In this lawsuit, the defendant, Zoom, Inc., is a corporation established in the United States, and the "Zoom" logo attached to its online meeting system quickly became a well-known trademark. Zoom, Inc. has no incentive to obtain a license for ZOOM Corporation's trademark in Japan.
However, it is also true that ZOOM Corporation suffered damages due to consumer confusion and misidentification of the two logos.
Therefore, ZOOM Corporation should have requested Zoom, Inc. to include a misleading/confusion prevention notice when inquiries about its video conferencing service were received, and Zoom, Inc. should have indicated on its software screens and web pages that it is unrelated to ZOOM Corporation.
If ZOOM Corporation did not request Zoom, Inc. to include a misleading/confusion prevention notice, then the consumer confusion and misidentification are ZOOM Corporation's responsibility.
If ZOOM Corporation requested Zoom Inc. to implement a misleading or confusing trademark indication, and Zoom Inc. failed to comply, this would constitute "infringement of another person's rights or legally protected interests through intent or negligence" (Article 709 of the Civil Code), thus establishing a general tort.
This case should not be handled under trademark law, particularly regarding license fees (Article 38, Paragraph 3 of the Trademark Law), but rather under general tort law (Article 709 of the Civil Code). The judgment in this case suggests a lack of competence on the part of the judge.