Trademark infringement defence based on non-occurrence of damage in Japan
Trademark right holders may claim compensation for damages against infringers. When trademark rights are infringed, the right holders may claim compensation for damages based on lost royalties that they would have been entitled to receive for the use of the registered trademarks. The Supreme Court of Japan held that the infringers could avoid liability for such damages when, as a defence, they successfully allege and prove the impossibility of occurrence of damage on the part of the trademark right holders. The substance of a trademark right is to protect the business reputation of the trademark right holder by preserving the trademark’s function to identify the source of goods, and to protect general consumers by maintaining the marketing system of goods. The Supreme Court considered it the substance of trademark protection. It follows that damage would occur only if the unauthorised use of the registered trademark harmed the substance of trademark protection.