175 F.3d 266 (2nd Cir. 1999), 97-9611, Otokoyama Co. Ltd. v. Wine of Japan Import, Inc.

Docket Nº:Docket No. 97-9611.
Citation:175 F.3d 266
Party Name:50 U.S.P.Q.2d 1626 OTOKOYAMA CO. LTD., a Japanese Corporation, Plaintiff-Counter-Defendant-Appellee, v. WINE OF JAPAN IMPORT, INC., A New York Corporation and Does 1 through 50, inclusive, Defendant-Counter-Claimant-Appellant.
Case Date:April 29, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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175 F.3d 266 (2nd Cir. 1999)

50 U.S.P.Q.2d 1626

OTOKOYAMA CO. LTD., a Japanese Corporation,



WINE OF JAPAN IMPORT, INC., A New York Corporation and Does

1 through 50, inclusive,


Docket No. 97-9611.

United States Court of Appeals, Second Circuit

April 29, 1999

Argued June 16, 1998.

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[Copyrighted Material Omitted]

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Arlana S. Cohen, Liddy Sullivan Galway Begler & Cohen, P.C., New York, N.Y. (Kent B. Goss, Valerie M. Goo and Yuji Iwanaga, Pillsbury, Madison & Sutro, L.L.P., Los Angeles, CA, Of Counsel), for Plaintiff-Counter-Defendant-Appellee.

Michael A. Cornman, Schweitzer Cornman Gross & Bondell LLP, New York, N.Y., for Defendant-Counter-Claimant-Appellant.

Before: MINER, McLAUGHLIN, and LEVAL, Circuit Judges.

LEVAL, Circuit Judge:

This is a trademark dispute between two importers of Japanese sake. Otokoyama Co. Ltd., the registered owner of four U.S. trademarks for the word "otokoyama" and Japanese language pictograms signifying that word, filed suit against Wine of Japan Import, Inc., alleging, inter alia, that defendant infringed its trademark in violation of the Lanham Act, 15 U.S.C. § 1051 et. seq., by importing a brand of sake labelled "Mutsu Otokoyama." Defendant counterclaimed, seeking to cancel plaintiff's trademarks under § 14 of the Lanham Act, 15 U.S.C. § 1064. Defendant contended that 1) otokoyama is a generic term signifying a type of sake and is therefore ineligible for trademark protection, and 2) plaintiff's trademarks were "obtained fraudulently" within the meaning of 15 U.S.C. § 1064(3).

After a hearing, the district court granted plaintiff's motion for a preliminary injunction. On appeal from that order, defendant argues that the district court erred when it refused to consider evidence of the meaning and usage of otokoyama in Japan and refused to consider a ruling of the Japanese trademark office denying plaintiff's application for trademark protection on the ground that otokoyama is generic. We agree that the district court erred in both respects. Applying the correct legal standard and crediting defendant with the improperly excluded evidence, we find that defendant raises sufficient doubt as to the validity of plaintiff's trademark to overcome plaintiff's showing of likelihood of success. We therefore vacate the preliminary injunction.


Plaintiff, a Japanese corporation, has been brewing sake--a Japanese wine made from fermented rice--on the northern island of Hokkaido since the 1930s. In Japan, its sake is sold under the name "Hokkai Otokoyama," Hokkai being a reference to the island of Hokkaido. Since 1984, plaintiff has imported its sake into the U.S., where it is marketed and sold as "Otokoyama" brand sake. Plaintiff registered the English transliteration of otokoyama and three trademarks of Japanese pictograms comprising otokoyama with the U.S. Trademark Office.

Defendant is a domestic corporation, which imports various brands of sake into the U.S. Defendant's importation and sale of sake under the designation "Mutsu Otokoyama," begun in or around 1997, is the subject of this suit. As noted, plaintiff claims the defendant's use of otokoyama infringes plaintiff's trademark, while defendant claims that because otokoyama is a generic word for a type of sake, it is not eligible for use as a trademark for sake.

In Japanese pictograms, the word otokoyama is comprised of the characters for "man" and "mountain." The parties dispute the meaning and history of the word in relation to sake, but they agree that its use in Japan in relation to sake dates back at least to the Edo period, which began in the seventeenth century. Paintings from the period show samurai warriors drinking from sake barrels displaying the characters for otokoyama. In Japan, between ten and twenty brewers in addition to plaintiff designate sake as "otokoyama," often (like plaintiff) adding a geographical modifier.

Plaintiff has been unsuccessful in its attempts to obtain trademark rights in Japan

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for otokoyama. In 1962 (then doing business under the name Yamazaki Shuzo K.K.) plaintiff sought to register the characters for "Hokkai Otokoyama" as a trademark in Japan. The application was rejected, and in 1966 the Japanese Patent Office ("JPO") affirmed the rejection. The JPO issued a written decision, whose exact translation is disputed, 1 but which apparently signified that the word otokoyama was not eligible for trademark protection because of its longstanding use as a designation for sake by other traders in the industry.

In 1984, plaintiff became the first company to market sake labelled otokoyama in the United States. Two years later, plaintiff petitioned the United States Patent and Trademark Office ("USPTO") to register the Kanji characters for otokoyama. In processing plaintiff's application, the USPTO asked plaintiff to provide an English translation of the characters. Plaintiff responded with a sworn statement that "to applicant's knowledge, the mark is an arbitrary, fanciful term. Accordingly, the mark cannot be translated." The USPTO granted plaintiff's request to register the mark in 1988.

Between 1992 and 1995, plaintiff sought and obtained U.S. registrations for three other otokoyama trademarks: one each for the Katakana and Hiragana 2 characters for otokoyama, and one for the English transliteration. Again the USPTO asked for English translations, to which plaintiff again responded in sworn declarations that otokoyama is "an arbitrary, fanciful" term that "has no meaning and cannot be translated."

In April, 1997, plaintiff wrote to defendant demanding that it cease importation, distribution, advertisement and sale of "Mutsu Otokoyama." Defendant replied that it believed plaintiff's trademarks were invalid, and refused.

Plaintiff filed suit, alleging trademark infringement, unfair competition, and false designation of origin under the Lanham Act, as well as state law violations, and moved for a preliminary injunction. As noted, defendant challenged the validity of plaintiff's trademarks on two grounds: first, that otokoyama is a generic term for a type of sake, and second, that plaintiff secured its U.S. registrations by fraudulent misrepresentations that concealed from the USPTO otokoyama's usage as a generic term in Japan.

At the preliminary injunction hearing, the court declined to consider any meaning the word otokoyama might have outside the United States, stating that "[t]he meaning of a term outside of the United States is irrelevant" to a determination of entitlement to the protection of the U.S. trademark laws. Otokoyama Co. Ltd. v. Wine of Japan Import, Inc., 985 F.Supp. 372, 376 (S.D.N.Y.1997). The court also declined to consider defendant's proffer of the 1966 decision of the Japanese Patent Office which denied plaintiff's request to register otokoyama in Japan. Id. at 375. Concluding that plaintiff had shown both irreparable harm and likelihood of success on the merits, the court granted the preliminary injunction. Id. at 379.

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A party seeking a preliminary injunction must establish that 1) absent injunctive relief, it will suffer irreparable harm, and 2) either a) that it is likely to succeed on the merits, or b) that there are sufficiently serious questions going to the merits to make them a fair ground for litigation, and that the balance of hardships tips decidedly in favor of the moving party. See Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 (2d Cir.1997). The plaintiff in a trademark infringement action establishes a likelihood of success by showing both 1) a legal, exclusive right to the mark, and 2) a likelihood that customers will be confused as to the source of the infringing product. See Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir.1986). To prove likelihood of success below, plaintiff showed that since 1984 it had been importing and selling its sake in the United States under the label "otokoyama," that it had registered this trademark with the USPTO, and that it had successfully protected the mark against unauthorized use by others.

We review a district court's decision to grant or deny a preliminary injunction for abuse of discretion, which is shown if, inter alia, the district court applies the incorrect legal standard. See Genesee Brewing Co., 124 F.3d at 142. Because the court applied the wrong legal standard and excluded relevant evidence favorable to the defendant's claim, we vacate the injunction.

Defendant contends the district court erred in refusing to consider evidence that otokayama is a generic term for sake, or a type of sake, in the Japanese language as spoken in Japan, and that the district court erred in excluding the decision of the Japanese Patent Office. (JA. 847) We agree with defendant that the district court was mistaken in its understanding of the potential significance of the meaning of otokoyama in the Japanese language. We also agree with the defendant that the ruling of the Japanese...

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