894.542/8–1948
The Acting Political Adviser in Japan (Sebald) to the Secretary of State
[Received September 2.]
Sir: I have the honor to transmit copies of this Headquarters’ memorandum of July 29, 1948 to the Japanese Government1 entitled “Trademarks, Trade Names, and Company Names and Marks used in Common by Companies in the Same Chain of Capital with Designated Holding Companies and Designated Excessive Concentrations.”
The enclosed directive requires the Japanese Government to amend by Cabinet Order Imperial Ordinance No. 567 of 1946, to the end [Page 995] that the Holding Company Liquidation Commission may prohibit any company from using a trademark or trade name when it was heretofore been used in common by a holding company designated for dissolution and by its affiliates or subsidiaries, or when it has been used in common by companies designated as excessive economic concentrations scheduled for reorganization and by other members of the same combination of capital. Certain family and company names are specifically listed as being liable to such injunction.
The Japanese Government is further required to enact legislation removing from eligibility for registration and exclusive use under the Trademark Law or the Commercial or Civil Codes any mark the use of which by previous owners has been enjoined by the Holding Company Liquidation Commission. Pending such legislation, the measure is to be enforced by Cabinet Order.
The instruction was prepared, according to officers of the Anti-Trust and Cartels Division of this Headquarters, upon the theory that the exclusive use of the trademarks of well-known combinations by their successor companies would serve to perpetuate the benefits of monopolies which it is the policy of this Headquarters to destroy. It was further decided that the best way to prevent such lingering abuses would not be to ban the marks completely and thus leave them intact at the end of the Occupation, but rather to debase them by allowing free and unrestricted use by any and all companies. Thus the HCLC, it is expected, will ban the use of the trademarks in question by Zaibatsu successors, at the same time destroying the future prestige of such marks by throwing them open to the public.
The Anti-Trust and Cartels Division realizes that the directive as drafted may possibly lead to defrauding the public. The Division feels, however, that the Holding Company Liquidation Commission has been given sufficient power to act should such abuses become widespread.2
Respectfully yours,