File No. 893.54/311.

Consul General Sammons to Minister Reinsch.

No. 374.]

Sir: I have the honor to enclose herewith a copy of a self-explanatory letter, on the subject of infringement of trade-marks, from the Japanese Consul General at this port.

It would seem the part of practical business prudence for American manufacturers who produce goods that at present or in the future may find a market among Oriental peoples to examine the question of trade-mark registration in the Far East. In a number [Page 232] of instances American goods that heretofore found a growing demand have been wholly or partially crowded out by imitations or as the result of the use of trade-marks or “chops “that are palpably infringements.

These imitations and infringements are not entirely confined to Japan or the Japanese. For instance, it appears that a number of years ago an action was brought against certain Chinese for selling a brand of condensed milk (Borden’s) which was labeled with a trade-mark that was considered an infringement of the American original. In that case the German agents endeavored, through the German Consul General, to interfere on the ground that the trademark under which the Chinese were selling the goods had been registered in Germany, but so far as I can ascertain no authentic proof was presented and the native dealer was duly fined in the Mixed Court.

While in some instances other nationals have been concerned in imitations and infringements, the bulk of this kind of interference with legitimate trade comes from Japan and the Japanese.

Soon after I took over charge of this Consulate General, a number of trade-mark cases were brought up, and in some instances it was alleged that the spurious designs were registered in Japan. Ultimately the Japanese Consul General acquiesced in Mixed Court procedure which would be calculated to fine Chinese who were guilty of selling goods under trade-marks that were in infringement of American designs; that is to say, where the American trade-mark in question was not duly registered in Tokyo, either by Japanese or Americans.

More recently the Chesebrough Manufacturing Company, manufacturers of American vaseline, instituted action through its New York attorney and an agent here in Shanghai, who applied to an American law firm (Fleming and Davies), with the result that a quantity of vaseline imported into Shanghai from Japan and bearing trade-marks that apparently were intended to deceive the purchaser into the belief that they represented American goods were seized and brought into the Mixed Court.

When this matter was about to be brought up in the Mixed Court, the Japanese Consul General requested (a) that the Japanese assessor be allowed to sit with the American and Chinese officials and (b) that in any instance where Japanese goods, even where covered by a trade-mark that is an imitation of the American label but where the certificate of registration had been granted by the Tokyo authorities, no further Mixed Court action should be attempted, and that the complainants proceed to make application to the Japanese registration office. Finally the Japanese Consul General withdrew his request to have his assessor participate in the judgment and merely requested that he might be allowed to sit and observe the procedure. It is customary on the part of members of the Consular Body to admit the right of any assessor to sit and merely watch the Mixed Court procedure in any case where the Consul General makes the request and asserts an interest therein on the part of his nationals.

After a number of conferences with the Japanese Consul General, he agreed to write the letter, a copy of which I enclose, according [Page 233] to which he was to have about two weeks to bring the questions involved before his higher authorities in Tokyo with a view, as he has agreed, to having the trade-marks that are palpably an infringement of American rights canceled.

In the meantime I have endeavored to expedite matters and provide a practical course of procedure for the future by seeking to arrange with the Japanese Consul General to proceed without delay in Mixed Court cases involving trade-mark infringements and to fine the Chinese retailers provided no certificate of registry is forthcoming; and if there is a certificate of registry to then refer the matter to the higher authorities at Tokyo or Washington to determine questions of canceling the imitation registration, priority of use, et cetera. The Japanese Consul General has agreed to this in principle, but I fear that when the plan is put into operation he will again object to summarily arraigning Chinese sellers of Japanese goods that bear trade-marks that are infringements of American rights.

The Japanese Consul General indicates the belief that it would be an unusual procedure to attempt to have the Mixed Courts here pass upon the rights of Japanese who are selling goods under trade-marks registered by his Government in Toyko, even though such trademarks may, in fact, be infringements of prior American rights as registered at Washington (but not at Tokyo). The American lawyers concerned, however, have urged summary action and this I have been constrained to avoid in cases where the alleged infringement is supported by a Japanese certificate of registration at Tokyo. Assuming this attitude to be sound, I now seek, on behalf of American manufacturers, to show to the Chinese dealers to what extent the pirating of trade-marks has been carried and to fine them as quickly as possible in instances where the imitation has not been registered.

Coupled with the above outline of procedure and an understanding as to how prompt action may be obtained, I respectfully urge that American trade-marks be properly registered at Tokyo.

It is further assumed, generally, that a provisional registration of trade-marks, for China, with the commissioner of customs at Shanghai does not, for the time being at least, affect the status of duly registered trade-marks in Washington and in Tokyo. Also, in a legal sense, until evidence is produced to the contrary, it seems to be assumed that the Japanese Consul General is sustained in his declaration that he may bring Mixed Court action against Chinese for selling American goods under an original trade-mark which, although duly registered by Americans in Washington, has never been registered by Americans in Tokyo but which, or an imitation or infringement thereof, has been registered by Japanese at the latter capital. Moreover, until or unless the Japanese registration of the infringement or imitation is canceled, they claim the right to proceed to sell their goods in China on an equal basis with the original and genuine American product, regardless of priority of use, et cetera.

The Japanese Consul General has today requested further time—a week or more—in which to secure instructions from Tokyo before action is taken in the vaseline cases. I am granting this extension but, ultimately, I look forward to showing to the Chinese dealers, through Mixed Court procedure, that the Japanese certificates of [Page 234] registration of trade-marks in cases of this kind palpably infringe our rights and that pending the placing of the matter before the higher authorities (at Tokyo or Washington) with a view to canceling the same, proceedings will be held in abeyance. Even though the registration is not canceled, I am hopeful that this plan of procedure will effectually do away with further immediate attempts, at least, to sell such goods in this market. In addition to the above procedure, I hope it may be possible to proceed at once to fine Chinese dealers who are selling goods under infringements or imitations of our trade-marks, even though the same may not be registered by our people at Tokyo. In the vaseline cases it appears that some imitations are not supported by Japanese certificates of registration. In these cases the Japanese Consul General wishes action held in abeyance pending instructions from the Tokyo Foreign Office regarding all the questions involved.

It is gratifying to note that in many instances American trademarks are now being forwarded to this office in connection with provisional registration with the Chinese commissioner of customs here. While there are no regulations in force in China governing infringements of trade-marks, et cetera, by Chinese, it has been found that protection against infringement by Chinese can be obtained in many instances by representations to the local authorities by the American consular representative nearest the place or places where the violation was practiced. In these cases proclamations and administrative measures promulgated by the local authorities were the means of protection afforded.

However, as intimated in the body of this despatch, this provisional registration is not accepted as affording protection to American trade-marks when the same have been infringed by the Japanese and when such trade-marks have not been duly registered at Tokyo.

In case there should be any objection to the procedure now being followed here, and as herein outlined for the future, I respectfully request to be advised thereof without delay, by telegraph, if necessary.

I have [etc.]

Thomas Sammons.

The Japanese Consul General to Consul General Sammons.

Sir: With reference to the case against certain Chinese merchants relating to the marketing of the Japanese-made vaseline bearing the trade-mark properly-registered at the American Patent Office by Messrs. Chesebrough & Co., on one hand, and also registered in Japan separately by Mr. Matsumoto on the other hand, I beg to state that although the case, as it is proposed, is apparently a case between the Chinese merchants and an American firm, the matter itself is a question relating to the protection of a trade-mark in China which trade-mark carries legitimately both the American and Japanese nature at the same time. Consequently I consider it more advisable for the benefit of our countries to weigh, examine and judge the case in the light of the treaty of 1908,68 existing between our countries relating to the mutual protection [Page 235] of patents, trade-marks, etc., in China, which treaty, methinks, at least its spirit, aimed at to cover such a case as we are now confronted.

Moreover, if a judgment were once handed down by the Mixed Court over such a matter, it can not but have a serious bearing on the future trade of Japan as well as America with China, whatever the judgment may be. As I have, therefore, wired to the home authorities in order to be informed of their opinion on the matter, it is requested that you be kind enough to exercise your influence over the complainant not to let him take any action until after about two weeks from now when I expect word may come from the home Government.

In closing I beg to remind you also that in case Messrs. Chesebrough will push his case without first taking the proper procedure to cancel the registration of trade-mark in Japan of Mr. Matsumoto, it is feared that the latter may be compelled to take the same action in the Mixed Court against the Chinese who handle the American goods bearing the trade-mark now at issue, and great entanglement may consequently ensue from such an action which will prove detrimental equally to the interest of both parties.

I have [etc.]

A. Ariyoshi.