LAW SOCIETY OF UPPER CANADA TRADE MARKS 2008 – THE

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LAW SOCIETY OF UPPER CANADA TRADE MARKS 2008 – THE
LAW SOCIETY OF UPPER CANADA
TRADE MARKS 2008 – THE YEAR IN REVIEW
Daniel R. Bereskin, Q.C. and Megan Langley Grainger
Bereskin & Parr
© 2008 Bereskin & Parr
Bereskin & Parr
King Street West, 40th Floor,
Toronto, Ontario, Canada
M5H 3Y2
Phone: 416-364-7311
Fax: 416-361-1398
www.bereskinparr.com
TRADE MARKS 2008 – THE YEAR IN REVIEW
TABLE OF CONTENTS
Introduction
8-3
Passing Off
•
Crocs Canada Inc. v. Holey Soles Holdings Ltd.
•
T-Rex Vehicles Inc. v. 6155235 Canada Inc. et al.
8-7
Infringement
•
Punitive damages for counterfeit goods - Louis Vuitton Malletier S.A. v. 486353
B.C. Ltd.
8-9
Opposition
•
Good faith - Cerverceria Modelo, S.A. de C.V. v. Marcon
•
Licensed use - Air Canada v. DHL Airways, Inc.
•
Hearsay - Alpa Wood Mouldings Inc. v. Craftmaster Manufacturing Inc.
•
Cross-Canada Auto Body Follow Up - Mr. Lube Canada Inc. v. Denny's Lube
Centre Inc.
•
Material dates - Neighbourhood Toy Stores of Canada v. Educator Supplies Ltd.
•
Geographical Indications - Scotch Whisky Association v. Glenora Distillers
International Ltd.
•
Colour trade marks - Simpson Strong-Tie Co. and Peak Innovations Inc.
•
Geographical descriptiveness - Sociedad Agricola Santa Teresa Ltda. v. Vina
Leyda Limitada
8-1
•
Well known - Waltrip v. Boogiddy Boogiddy Racing Inc.
•
New ground of opposition - Parmalat Canada Inc. v. Sysco Corporation
8-28
Expungement – s. 45
•
Reliability and necessity – Bereskin & Parr v. Mövenpick-Holding
•
Deemed use for exported wares – Christopher Brett v. Molson Canada
•
Special circumstances revisited - Scott Paper Limited v. Smart & Biggar
8-34
Expungement – s. 57
•
Descriptiveness – Cheaptickets and Travel Inc. v. Emall.ca Inc.
•
Persons interested – Fairmont Resort Properties Ltd. v. Fairmont Hotel
Management, L.P.
•
8-41
•
Material date - Candrug Health Solutions Inc. v. Thorkelson
Official Marks
See You In – Canadian Athletes Fund Corporation v. Canadian Olympic
Committee
8-42
•
Unfair Competition
Canadian Copyright Licensing Agency v. The Business Depot Ltd.
8-46
Practice Notes – CIPO Practice Notices Issued in 2008
8-47
Decisions of Interest Expected in 2009
8-2
Introduction
This paper discusses a number of noteworthy passing off, infringement, opposition, and
expungement cases decided in 2008.
Passing Off
Functionality
In Crocs Canada Inc. v. Holey Soles Holdings Ltd.1 the plaintiff commenced an action
for passing off and copyright infringement against the defendant, Holey Soles Holdings,
who, it was alleged, sold “knock-off” footwear that resembled genuine Crocs products.
Crocs shoes have become very popular, and their design seems unique and easy to
recognize:
The defendant brought a motion for summary judgment on the basis that the design of
Crocs clogs is not a trade mark because the design is functional, and therefore there is no
basis for a passing off action. In addition, the defendant argued that copyright did not
subsist in the design of the clogs, becayse they were useful articles produced in numbers
greater than 50 units.
Crocs shoes or clogs are made from a “expanded ethylene” base, which expands and
flexes readily. Crocs shoes are said to prominently feature the following elements that
make up the alleged Crocs trade dress or distinguishing guise, including:
1
(2008), 64 C.P.R. (4th) 467 (FC) [hereinafter "Crocs Canada"]
8-3
1. The crown design, the raised and bumpy part at the upper edge of the top of the
clog;
2. The circles design, the holes on the top of the upper portion of the clog;
3. The semi-circles design, the vents on the side of the upper portion of the clog;
4. The nubs design, the plastic nubs found in the heel of the shoe; and
5. The tread design found on the sole.2
The circle design and semi-circle design are the two most visually prominent elements.
In April, 2004 Holey Soles began selling two models of foam shoes with holes in their
upper surface and vents on the side, raised nubs on the interior, a crown shaped design
and similar treads to those found in genuine Crocs clogs. Hugessen J. took the view that
there was “an extremely high degree of similarity” between the Crocs clogs and the shoes
sold by Holey Soles.3 The Judge also noted that the circles and semi-circles clearly have
a functional role, namely, to allow air and/or water to flow in and out of the shoe. The
question to be considered was whether the pattern of circles and semi-circles could
qualify as a distinguishing guise or get-up and therefore receive protection under the
Trade-marks Act or whether on the contrary, these elements are primarily functional and
therefore disentitled to trade mark protection.
The leading case on functionality is Kirkbi AG v. Ritvik Holdings Inc.4 In Kirkbi, the
issue before the Supreme Court was whether the shape of a LEGO brick was entitled to
trade mark protection, given that it had been proved that the design was distinctive, and
that the defendant had caused confusion resulting in damage by reason of its imitation of
the LEGO brick. The trial judge found, and the Court of Appeal and Supreme Court
agreed that there was no passing off notwithstanding proof of the requisite elements of a
passing off case, because the LEGO brick design had been found to be
"purely"
functional. Thus the Kirkbi decision confirmed that trade mark protection is not available
2
Crocs Canada, supra note 1 at ¶3
Ibid. at ¶11
4
(2005), 43 C.P.R. (4th) 385 (SCC) [hereinafter “Kirkbi”]
3
8-4
for a mark or get-up that is “purely” functional irrespective whether the traditional
grounds for supporting a passing off case had been met.
In the Crocs Canada case, Hugessen J. concluded that Kirkbi did not exclude from
protection “any and every mark which displayed some functional features”.5 The Judge
ultimately decided that the question of whether the design and pattern of the circles and
semi-circles on the plaintiff’s clogs were primarily functional is one fact, which could not
be decided at the summary judgment stage. The Judge noted that while there was
evidence that the circles and semi-circles perform a function, there was no evidence
clearly linking that function, or any function to the pattern and arrangements on the tops
and sides of the shoes, and that it would be open to the Court at trial to find that the
pattern and arrangement constitute in themselves a distinguishing guise.
The second argument made by the defendant, that Crocs clogs were useful articles that
had been produced in numbers exceeding fifty, was also dismissed. The Judge noted that
although normally copyright does not subsist in a design applied to a useful article where
the article is reproduced in a quantity of more than fifty, this does not apply to designs
that are trade marks. Since the question of whether the plaintiff’s shoe designs were a
trade mark was still an open issue, the Judge concluded that the copyright question was
not one which should be determined on summary judgment. In the result, the motion for
summary judgment was dismissed.
If the case comes to trial, the decision may help to clarify the doctrine of functionality
and in particular the issue of how to deal with a distinctive design that is a blend of
functional and non-functional features.
5
Crocs Canada supra note 1 at ¶18
8-5
When is Copying Not Passing Off?
T-Rex Vehicles Inc. v. 6155235 Canada Inc. et al.6 involved an appeal from a Quebec
Superior Court decision7 dismissing T-Rex's claim that G-2 had passed off its threewheel vehicle (as shown below):
T-Rex
G-2
The T-Rex vehicle was first sold by the appellant, an exclusive licensee, in December 1,
2004. In the fall of 2005 a virtually identical vehicle appeared in the Quebec market –
the G-2. The evidence disclosed that the G-2 was initially manufactured by copying a
used T-Rex vehicle, which was disassembled and then used to create a template of the
chassis. T-Rex filed a claim seeking an injunction against G-2 on the basis of trade mark
infringement and passing off.
The Superior Court held that T-Rex was not entitled to a monopoly in its distinguishing
guise since this would limit the development of the three wheel vehicle industry, and that
the shaping of the vehicle was essentially functional. In addition, there could be no
passing off, since buyers were well aware which source of vehicle they were purchasing.
T-Rex appealed to the Quebec Court of Appeal.
The majority of the Court of Appeal concluded that the T-Rex frame and body shape
could in fact constitute a distinguishing guise pursuant to s. 2 of the Trade-marks Act.
The shaping of the body was not wholly or primarily functional; the evidence did not
establish that only the design of the T-Rex roof, hood and lights could encase a threewheeled vehicle, and that these parts had obtained an optimal character so that "no other
6
7
(2008), 67 C.P.R. (4th) 444 (QCA) [hereinafter "T-Rex"]
2006 QCCS 6230 (CanLII)
8-6
valid design could be drawn for three-wheeler vehicles."8 Put another way, T-Rex's
objective was not to prohibit other traders from making and selling a three-wheeled
vehicle with utilitarian elements such as a roof, hood and headlights. Its objective was
simply to prohibit the respondent from copying the features of the T-Rex vehicle that
distinguish it from other three-wheeled vehicles in the marketplace.
The majority of the Court of Appeal also disagreed with the trial judge on the issue of
whether granting a monopoly in the guise would unduly restrict the development of the
industry. No expert evidence was introduced to support this claim and the majority noted
that such a claim "cannot be noted judicially"9
On the issue of likelihood of confusion, T-Rex's relatively low sales became a detriment:
Here, the condition set forth at paragraph 6(5)(a) [the inherent distinctiveness of the trade
marks and the extent to which they have become known] is not satisfied as the evidence
of knowledge by the public of the T-Rex is absent. All that we know is that 332 vehicles
were sold throughout the world between 1994 and 2006, including 113 in Quebec. Such a
small number of vehicles sold over such a lengthy period does not allow ipso facto for the
conclusion that the public was familiar with the merchandise.
Confusion of the public is related, up to a certain point, to the goodwill and the notoriety
of the merchant. Where the merchandise marked by a distinguishing guise is not known
and not associated with the origin, it is not possible to deduce that the marketing and sale
of identical merchandise will lead the consumer to confuse the two sources of the
merchandise.10
In the result, the claim for passing off failed and therefore the appeal was dismissed.
8
T-Rex, supra note 7 at para. 98
Ibid., at para. 103
10
Ibid., at paras. 114-115
9
8-7
Trade Mark Infringement
Damages for Counterfeit Goods
The case of Louis Vuitton Malletier S.A. v. 486353 B.C. Ltd.11 continues the recent
trend by Canadian courts to grant substantial damages in counterfeit suits. This case
follows a 2007 decision also involving Louis Vuitton.12
In this case, the defendants were operating stores across Vancouver under the names
Wynnie Lee Fashion and Francisca’s Fashion Club.
After conducting its own
investigations, in August 2004 the plaintiffs executed an Anton Piller Order against two
of the Wynnie Lee Fashions locations, seizing hundreds of counterfeit Louis Vuitton
products. The plaintiffs subsequently obtained a Federal Court judgment against the
defendants, in which the defendants were ordered to pay $12,000 in damages and $750 in
costs.13 Despite this Federal Court judgment, the defendants continued to sell counterfeit
Louis Vuitton merchandise.
After further investigations, during which even more
counterfeit goods were purchased at the defendants’ stores, the plaintiff entered into a
settlement agreement with Wynnie Lee, the importer of the goods being sold. The terms
of the settlement agreement required Wynnie Lee to stop selling or offering for sale any
counterfeit Louis Vuitton merchandise, and to pay the plaintiffs the sum of $6,000.14
Despite the settlement agreement the defendants continued to sell counterfeit Louis
Vuitton products. Between January 2006 and January 2008 the plaintiff made numerous
purchases and observations of counterfeit Louis Vuitton merchandise at the various
locations, which ultimately led to the present law suit for breach of contract, trade mark
infringement, passing off and copyright infringement.
11
(unreported) 2008 BCSC 799 [hereinafter "486363 B.C."]
Louis Vuitton Malletier S.A. et al. v. Yang et al. (2007) 62 C.P.R. (4th) 362 (FC). In 2008, the Federal
Court denied a motion by the defendant Yang to set aside the default judgment on the basis that she was
never served with the statement of claim and that she had no interest in the business. The Court was not
persuaded by the defendant's arguments, and the motion was denied (2008 FC 45)
13
486363 B.C., supra note 12 at ¶14
14
Ibid., at ¶21
12
8-8
The defendants defended the action and were examined for discovery, which yielded
evidence that their inventory turned over approximately three times per year.
This
enabled the Court to apply an amount of $7,250 in damages for trade mark infringement
on a "per turnover of inventory basis". In addition, since this award was intended to
reflect the activities at a single retail location for a single plaintiff, the Court extrapolated
this "per inventory turnover" award to each retail location for each of the two plaintiffs.
The Court also made an additional award of damages against the main defendant and
importer, Wynnie Lee, using $29,000 as a starting point for nominal damages against her
as an importer and then applying that amount on a "per inventory turnover" and per
plaintiff basis. The Court did, however, deduct the amount Wynnie Lee was ordered to
pay in connection with their retail sales to avoid over-compensating the plaintiffs.
The Court also awarded full statutory damages of $20,000 per work for the copyright
infringement of the various defendants.
Finally, applying the test set out by the Supreme Court of Canada in Whiten v. Pilot
Insurance Co. 15, the Court also granted $200,000 in punitive and exemplary damages
against Wynnie Lee and $100,000 in punitive and exemplary damages against the other
defendants acting in concert with Wynnie Lee. The Court also granted special costs
against these defendants, citing the deliberate and inexcusable repeat infringement of the
plaintiffs' rights and the failure of the defendants to cooperate to any significant degree in
the litigation.16 In all, the defendants were ordered to pay $980,000 to the plaintiff
flowing from their trade mark infringement and copyright infringement.
This case represents another major victory against manufacturers and sellers of
counterfeit merchandise, and appears to continue the recent trend in the courts to award
the significant damages as a deterrent.
15
16
2002 SCC 18
486363 B.C., supra note 12 at ¶89 to ¶93
8-9
Opposition Cases
Good Faith
In Cerverceria Modelo, S.A. de C.V. v. Marcon,17 the good faith of the applicant was put
in issue. According to s. 30 (i) of the Trade-marks Act, an applicant is required to state
that he is satisfied that he is entitled to use the trade mark in Canada in association with
the wares or services described in the application.
The Applicant, Marcon, applied to register the trade mark CORONA in association with
a variety of non-alcoholic beverages, coolers containing distilled spirits, and beverage
bottling services.
The application was opposed by Cerverceria Modelo based on
confusion with its registered trade marks CORONA, 18 CORONITA EXTRA,19
CORONA Design,20 and CORONA EXTRA & Design.21 The application was also
opposed on the basis that Marcon could not honestly have had the belief that he was
entitled to use the CORONA trade mark, which is well-known for beer.
Cerverceria introduced evidence that on the day Marcon filed the CORONA trade mark
application, Marcon also applied for: ABSOLUT,22 HEINEKEN,23 FINLANDIA,24
BEEFEATER,25 CANADIAN CLUB,26 COORS,27 BUDWEISER,28 JACK DANIEL'S,29
and DOM PERIGNON.30 A search of the Trade-marks Office database revealed that
Marcon also owned applications for: SENSODYNE,31 TIM HORTONS,32 SOUTHERN
17
(unreported) [2008] T.M.O.B. No. 131 [hereinafter "Cerverceria"]
TMA598,045
19
TMA428,813
20
TMA368,116
21
TMA391,068
22
Serial No. 1,168,026 (now abandoned)
23
Serial No. 1,168,025
24
Serial No. 1,168,024
25
Serial No. 1,168,023 (opposed by Allied Domecq Spirits & Wine Limited April 12, 2005)
26
Serial No. 1,168,022 (now abandoned)
27
Serial No. 1,168,021
28
Serial No. 1,168,020 (now abandoned)
29
Serial No. 1,168,016
30
Serial No. 1,168,014
31
Serial No. 1,186,813
32
Serial No. 1,186,804
18
8-10
COMFORT,33 BAYER,34 CHANEL,35 EVIAN,36 L'OREAL PARIS,37 NESCAFÉ,38 and
NESTLÉ.39
Although Marcon's original application had not been filed as evidence, given that the
material date for s. 30(i) is the application filing date, the Board considered it both
relevant and necessary to review the contents of the original application, which covered a
variety of non-alcoholic beverages and, significantly, also beer, as well as coolers and
spritzers. In his cross-examination, Marcon admitted that he was familiar with CORONA
beer when he filed his application for CORONA for various beverages including beer.
Also, Marcon admitted that had not approached manufacturers to produce any of his
applied-for wares (except bottled water and possibly coolers), that he was aware of the
established reputations of most if not all of the marks he had applied, and he had not
prepared any business plans for any of his products. In light of the foregoing, the Board
questioned "how any reasonable person would be satisfied that he/she was entitled to file
trade-mark applications for over 18 arguably well known marks for arguably related
wares and/or services."40
The onus then shifted to Marcon to show that he was satisfied that he was entitled to
monopolize the applied for mark CORONA for the applied for wares and services
throughout Canada. The only evidence filed by Marcon "demonstrating the sincerity of
the Applicant's desire to use the marks that he has applied for in Canadian commerce"
included two of his inactive trade-mark applications for the marks NUTRADENT and
ROCKLIN and his patents for dental floss and a fuel tank product. The s. 30(i) ground of
opposition accordingly succeeded. The s. 12(1)(d) ground of opposition (confusing with
the opponents registered trade marks) also succeeded, and the application was refused.
33
Serial No. 1,168,272 (now abandoned)
Serial No. 1,201,366 (opposed by Bayer Aktiengesellschaft April 24, 2007)
35
Serial No. 1,202,435 (opposed by Chanel S. de R.L. November 24, 2006)
36
Serial No. 1,188,155 (opposed by Société Anonyme des Eaux Minérales D'Evian May 15, 2006)
37
Serial No. 1,201,383 (opposed by L'Oreal July 17, 2007)
38
Serial No. 1,201,480 (now abandoned)
39
Serial No. 1,201,360
40
Cerverceria, supra note 18 at para. 36
34
8-11
The Board noted that a s. 30(i) ground should only succeed in exceptional cases, bad faith
being one of them.41 This case qualified as such an "exceptional case" since Marcon put
his good faith into question.42
Licensed Use
In Air Canada v. DHL Airways, Inc.43, DHL Airways filed applications to register
several marks comprising ASTAR and ASTAR & Des. for transportation services, more
particularly freight-related.
Air Canada opposed the applications on the basis, inter alia, that the trade marks were
not registrable because they were confusing with trade mark registrations owned by Air
Canada for STAR ALLIANCE and various STAR ALLIANCE Designs used in
association with air transportation related services and wares.
41
Cerverceria, supra note 18 at para. 30
Even though Marcon was unsuccessful in this opposition, in 2007 he was partially successful in a s. 45
proceeding against Nestlé, in which Nestlé's registration was amended to delete certain wares: Marcon v.
Société des Produits Nestlé S.A., (unreported) [2007] T.M.O.B. No. 164
43
(unreported) [2008] T.M.O.B. No. 38 [hereinafter "Air Canada"]
42
8-12
The evidence showed that while the STAR ALLIANCE or STAR ALLIANCE Design
trade marks appeared on every aircraft in Air Canada’s fleet, they also appeared on the
aircraft of Star Alliance network members,44 including Lufthansa, United Airlines, US
Airways, Air New Zealand and Air China among others. Although Air Canada is the
registered owner of the marks in Canada, many of the displays of the marks identified
other members of the Star Alliance network, with no indication as to trade mark
ownership or the existence of a license.45 In order to be valid, a registered trade mark
must be distinctive of the services of the owner exclusively. It's hard to imagine that the
use of STAR ALLIANCE signifies Air Canada's services exclusively when it is used by
so many other airlines who, one would assume, are not acting under the control of Air
Canada as to the character and/or quality of their services.
In applying the test for confusion, the Opposition Board considered that the opponent’s
marks were inherently weak, there was little evidence to support an acquired reputation
for those marks, and the opponent had allowed unlicensed use of the marks by others,
which tended to weaken the marks' distinctiveness. The differences in the actual services
and trades of the parties and the absence of confusion combined to satisfy the legal
burden on the applicant to show there was no reasonable likelihood of confusion between
its marks and those of the opponent. The oppositions thus were dismissed.
44
45
Air Canada, supra note 44 at ¶9
Ibid.
8-13
Hearsay Evidence
In Alpa Wood Mouldings Inc. v. Craftmaster Manufacturing Inc.46, the applicant filed
applications to register the trade marks CLASSIQUE SERRANA and CLASSIQUE
RODIA based on proposed use in Canada in association with construction and building
materials, namely, doors, doorframes and door facings, fibre board, composite board and
particleboard. The opponent alleged that the trade marks were not registrable because:
they were confusing with opponent’s registered trade mark CLASSIC for doors; the
applicant was not the person entitled to registration; and the applicant’s trade marks were
not distinctive of the applicant.
The opponent adduced evidence establishing that it had used its trade mark CLASSIC,
through its licensee, in association with doors since at least as early as 1995. The
applicant attempted to introduce an affidavit from a lawyer at the law firm representing
the applicant, in which the affiant relied on information provided by another associate at
the same law firm who was out of the country.47
The applicant’s lawyer did not attend at the opponent’s licensee’s places of business, but
rather related what she was told about what the other lawyer saw when she attended the
licensee’s places of business. As noted by the Opposition Board, “the applicant had
seven months to prepare its Rule 42 evidence, and there was absolutely no necessity for it
to rely on the second-hand report of a conversation one attorney had with another
attorney about a visit the latter made to two places of business located in the same city as
the attorneys and the applicant’s agent.”48 In addition, the Opposition Board considered
the information in the affidavit to be unreliable as the first lawyer was never sworn, and
there was no way of knowing how she arrived at the conclusions reported by the second
lawyer, or how and in what manner the first lawyer obtained the documents included as
Exhibit “A” to the second lawyer’s affidavit. The Opposition Board accordingly ruled
the affidavit to be inadmissible.
46
(2007), 66 C.P.R. (4th) 27 (TMOB) [hereinafter "Alpa Wood Mouldings"]
Ibid. at p. 33
48
Alpa Wood Mouldings, supra note 47 at p. 35
47
8-14
The Opposition Board considered the trade marks under review to cover identical wares,
namely, doors, or wares closely related to doors. The marks were considered to be very
similar in appearance, in that they both contained the words CLASSIQUE or CLASSIC
in the first portion of the marks.
The Opposition Board did not consider that the
additions of the words SERRANA or RODIA to the applicant’s marks enhanced the
distinctiveness of those marks sufficiently to distinguish them from the opponent’s mark.
In addition, since the opponent sold different profile doors under its CLASSIC trade
mark, it was likely that consumers would interpret doors marketed as CLASSIQUE
SERRANA and CLASSIQUE RODIA as new and different profiles of the opponent’s
CLASSIC series of doors.
Given that the applicant’s affidavit was ruled inadmissible, no admissible evidence had
been filed to demonstrate that the word CLASSIC is a common component of trade
marks used in association with building supplies. In the result, the applicant failed to
demonstrate that there would be no likelihood of confusion between the marks, and the
oppositions succeeded.
In Cross-Canada Auto Body Supply (Windsor) Ltd. v. Hyundai Auto Canada,49 it was
held that a solicitor may use affidavits of colleagues, students and employees only for
non-controversial matters not central to the main issue in the case. In Mr. Lube Canada
Inc. v. Denny's Lube Centre Inc.50 this issue was raised once again.
The applicant filed a trade mark application for the mark ARE YOU DUE FOR A
CHANGE?
Mr. Lube opposed this application, in part because it was allegedly
confusing with the opponent's registered trade marks, including TIME FOR A
CHANGE?
49
50
2005 FC 1254, (2005), 43 C.P.R. (4th) 21
(unreported) [2008] T.M.O.B. No. 84 [hereinafter "Mr. Lube"]
8-15
The applicant filed evidence by the executive assistant to the applicant’s trade mark
agent.
The affiant conducted a state of the Register search to locate marks which
included the word CHANGE or OIL for oil related wares or services. Apart from the
opponent’s registrations, the affiant located eight registrations standing in the name of
seven different owners for trade marks which included either or both the words
CHANGE and OIL for automotive maintenance services.
The opponent’s agent submitted that in view of the decision in Cross-Canada,51 this
affidavit should not be considered because it was sworn by an employee of the
applicant’s trade mark agent. The Opposition Board, however, considered that the CrossCanada case was distinguishable because it dealt with the application of Rule 82 of the
Federal Courts Rules to evidence submitted before the Court by a parties’ solicitor. As
the Board noted:
In the present case the parties are represented by registered trade mark agents and there is
no equivalent provision in the Trade-marks Regulations governing the conduct of such
agents.
Furthermore if there is a remedy available to the opponent in this case,
presumably it would have been by way of motion before the Federal Court seeking to
substitute a new registered trade mark agent for the one currently of record as was done
the Cross-Canada case. Thus, even if there is merit in the opponent’s argument, it would
not necessarily mean the removal of the [applicant's] affidavit from the record. Finally,
the [applicant's] affidavit does not comprise contentious opinion evidence of the type
adduced in the Cross-Canada case. Consequently, I have given full consideration to that
affidavit.52
In the result, the Opposition Board found that the applicant failed to show on a balance of
probabilities that its proposed trade mark ARE YOU DUE FOR A CHANGE? is not
confusing with the opponent’s previously used mark TIME FOR A CHANGE? The
application was refused.
51
52
supra note 50
Mr. Lube, supra note 51 at ¶11
8-16
Material Dates
Neighbourhood Toy Stores of Canada v. Educator Supplies Ltd.53 involved an
opposition by Neighbourhood Toy Stores against the application to register the trade
mark CANADA’S NEIGHBOURHOOD TOY STORE based upon use in Canada in
association with educational supplies, stationery, educational materials, games, and
educational toys and kits as well as the retail sale of educational toys, arts and crafts kits
and paint sets.
The opposition was based both on non-entitlement and non-
distinctiveness.
With respect to the non-entitlement grounds of opposition, the opponent pleaded that the
applicant was not the person entitled to registration on the basis that the mark was
confusing with the mark and name NEIGHBOURHOOD TOY STORES OF CANADA,
which had previously been used in Canada by the opponent in association with promoting
independent neighbourhood toy stores and toy products, operation of an on-line retail toy
store, support services for toy retailers, publication of toy catalogues and operation of a
website providing information related to toy stores and toy products.
The Opposition
Board, in applying the test for confusion, concluded that in view of the overlap in the
nature of the parties’ businesses and channels of trade and the high degree of resemblance
between the marks, the applicant failed to meet the legal burden upon it to show that, on a
balance of probabilities, confusion between the marks was unlikely as of the applicant’s
date of first use (emphasis in the original).54
The opponent also pleaded that the mark did not distinguish and was not adapted to
distinguish the wares and services of the applicant from the services of the opponent.
The material date for assessing the issue of distinctiveness is considered to be the date the
statement of opposition was filed.
The present case is unusual in that the applicant’s circumstances had changed
significantly between the material date of assessing the issue of entitlement (i.e. the
53
54
(unreported) [2007] T.M.O.B. No. 150 [hereinafter "Toy Stores"]
Toy Stores, supra note 54 at ¶42
8-17
applicant’s date of first use) and the material date for assessing the issue of
distinctiveness (i.e. the date of filing the statement of opposition).
The applicant’s evidence showed that it had used its mark extensively across Canada
since the former date, and the mark had therefore become known to a much larger extent
across Canada than the opponent’s mark and name.
As a result of this change in
circumstances, the Opposition Board considered that another surrounding circumstance
that must be considered as of the later material date was the lack of confusion between
the two marks despite their co-existence in Canada for over four years. The Opposition
Board therefore concluded that the absence of any evidence of actual confusion was a
strong indication of the absence of a reasonable likelihood of confusion between the
marks and names of the parties. Therefore, as of the filing date of the statement of
opposition (emphasis in the original), the applicant’s mark distinguished its wares and
services from those of the opponent, and the distinctiveness ground of opposition failed.55
In the result, however, because the applicant was found to be not entitled to registration
of the mark as of the date of filing the application, the application was rejected.
Geographical Indications
In Scotch Whisky Association v. Glenora Distillers International Ltd.,56 the applicant
had applied to register the trade mark GLEN BRETON in association with single malt
whisky. The application was opposed by the Scotch Whisky Association on the basis
that the mark was deceptively misdescriptive of the place of origin of the whisky and its
character or quality, and on the basis that the word "GLEN" had become recognized as
designating goods of a particular kind and origin, namely, scotch whisky. The Registrar
rejected the opposition, concluding that use of GLEN BRETON as a trade mark would
not be likely to mislead consumers, and that Canadian consumers had not yet been
educated to associate the word "GLEN" solely with scotch whisky. In addition, the word
"GLEN" was not distinctive, since it formed part of many other registered trade marks.
55
56
Ibid. at ¶49
2008 FC 425; (2008), 65 C.P.R. (4th) 441 (FC) [hereinafter "Glenora Distillers"]
8-18
On appeal to the Federal Court, both parties filed new evidence, which the Court
considered would have led the Registrar to a different decision, had the evidence been
available:
There is no evidence in the record that before the year 2000, the year in which Glenora
applied for its trade mark, there was ever a whisky sold in Canada which had "Glen" as
part of its name that wasn't a scotch whisky. Indeed, Scottish "Glens" have been sold in
Canada since at least 1888, as Glenlivet's trade mark of that year was based on prior use.
In 2000, there were some 22 "Glen" whiskies sold in Canada, each and every one of them
scotch, and all but one, Glengarry which had minimum sales, single malts. I am,
therefore, satisfied that Glen Breton is not registrable under section 12(1)(e) of the Act
because its adoption is prohibited by section 10 as no person shall adopt a mark as a
trade-mark if it has by "ordinary and bona fide commercial usage become recognized in
Canada as designating the -- place of origin -- of any wares -- of the same general
class".57
In short, Harrington J. concluded that the mark was unregistrable not because a "GLEN"
is Scottish, but because the word had been in long use in Canada by Canadian distillers of
Scotch whisky, to the exclusion of all others.58 An appeal has been filed in this case. 59
Interestingly, the Court found that the use of GLEN BRETON was not deceptively
misdescriptive, which is somewhat puzzling considering that there was evidence of
potentially misleading restaurant and bar menus.
Colour Trade Marks
Simpson Strong-Tie Co. and Peak Innovations Inc., have been involved in a series of 11
opposition proceedings (and appeals) covering 31 separate applications for trade marks in
colours.60
57
Ibid., at 447
Glenora Distillers, supra note 57 at 449
59
Notice of appeal filed April 29, 2008 (Court File # A-194-08)
60
Simpson Strong-Tie Co. v. Peak Innovations Inc.:
58
8-19
The applications in question are similar in that they all cover marks consisting of a
specified colour (e.g. the colour green, or the colour grayish green (PANTONE #5636C))
as applied to the whole of the visible surface of a particular object shown in the drawing.
The drawings in each case are lined for the colour, and include such objects as Deck
Board Fasteners, Post Anchors, Heavy Duty Spikes, Adjustable Post Supports, Post
Holders, and Threaded Rods, among many others.
The oppositions were based, inter alia, on s. 12(1)(d) due to confusion with trade marks
registered by the opponent for industrial and commercial fasteners e.g. bolts, nuts,
screws, rivets, pins, cotter pins, and on s. 30(b), s. 2 and s. 4 of the Act because the marks
are not the proper subject for a trade mark but rather are functional and utilitarian.
The oppositions were rejected. The s. 12(1)(d) grounds failed in view of the inherent
weakness of the respective marks, the absence of acquired reputation for the opponent’s
marks, and the limited degree of resemblance between the marks. With respect to the
argument that the applied for marks were not proper trade marks since they are merely
functional and utilitarian, the Opposition Board noted that color applied to the whole of
the visible surface of an object can function as a trade mark.61 Although in at least one of
the oral hearings the opponent's agent submitted that the applied-for colour may function
as a rust-inhibitor, because the opponent failed to submit any evidence establishing the
"solely or primarily functional" nature of the applicant's marks, this ground of opposition
also was unsuccessful.
(2007), 62 C.P.R. (4th) 390 (TMOB) – covering 2 applications
(2007), 66 C.P.R. (4th) 48 (TMOB) – covering 2 applications
(unreported) [2007] T.M.O.B. No. 165 – covering 2 applications
(unreported) [2007] T.M.O.B. No. 167 – covering 4 applications
(unreported) [2007] T.M.O.B. No. 175 – covering 3 applications
(unreported) [2007] T.M.O.B. No. 207 – covering 4 applications
(unreported) [2008] T.M.O.B. No. 75 – covering 2 applications
(unreported) [2008] T.M.O.B. No. 76 – covering 2 applications
(unreported) [2008] T.M.O.B. No. 77 – covering 2 applications
(unreported) [2008] T.M.O.B. No. 78 – covering 4 applications
(unreported) [2008] T.M.O.B. No. 79 – covering 4 applications
61
See Smith, Kline & French v. Canada (Registrar of Trade Marks), [1987] 2 F.C. 633 (F.C.T.D.)
•
•
•
•
•
•
•
•
•
•
•
8-20
Although a s. 30(h) ground was not pleaded (i.e. that the trade mark was not properly
described in the drawings), the Registrar commented that a reasonable interpretation of
the drawings suggests that the relative dimensions of the objects shown can be
determined from the single views provided; there is no requirement for the applicant to
restrict the marks claimed to a specific size. Although the opponent did not plead that the
marks are unregistrable because they are distinguishing guises, the Registrar expressed
sympathy with the position that the applicant’s marks should be considered to be a
shaping of the wares and thus distinguishing guises, or the Trade-marks Act should have
a provision akin to s. 12(2) or 13(1) to ensure that distinctiveness in fact is established
before granting a registration.
At a late stage in the proceedings, the opponent requested leave to amend the statements
of opposition in several of the proceedings to include a ground specifically based on nonconformity with s. 30(h) of the Trade-marks Act. This request was refused, and the
opponent filed an application for judicial review, which was denied. The opponent
further appealed to the Federal Court,62 and again, its appeal was dismissed, on the basis
that "there is an inherent unfairness to allow a litigant to 'save up' new grounds on
appeal".63 The decisions were further appealed to the Federal Court of Appeal,64 where
the respondent brought an application for an order striking the appellant's Notice of
Appeal.
The Court of Appeal concluded that the Federal Court ruling, like the
Prothonotary's ruling being, was interlocutory in nature, and therefore the appellant had
10 days from the date of the Federal Court judge's pronouncement to bring their appeal.
The Notice of Appeal was filed out of time, and accordingly it was struck.
The opponent has filed applications for judicial review of the opposition decisions in
each case.65 66
62
(2008), 66 C.P.R. (4th) 255 (FC)
Ibid., at para. 10
64
2008 FCA 235 (appeal of Court File # T-1570-07) and 2008 FC 236 (appeal of Court File # T-1571-07)
65
Court File # T-1122-08 to T-1135-08; T-272-08 to T-276-08; T-159-08 to T-160-08; and T-2245-07 to
T-2250-07.
66
See also: Lamson & Sessions Co. v. Royal Group, Inc., (unreported) [2008] T.M.O.B. No. 118 for
Junction Box Design (green) [opposition rejected]; Lamson & Sessions Co. v. Royal Group, Inc.,
(unreported) [2008] T.M.O.B. No. 119 for Junction Box Colour Plate (white) [opposition rejected];
63
8-21
Geographical Descriptiveness
In Sociedad Agricola Santa Teresa Ltda. v. Vina Leyda Limitada,67 the Federal Court
considered the scope of paragraph 12(1)(b) of the Trade-Marks Act, which provides that a
trade mark is not registrable if the mark is, when written or sounded, “either clearly
descriptive or deceptively misdescriptive in the English or French language of the
character or quality of the wares or services in association with which it is used or
proposed to be used or of the conditions of or the persons employed in their production or
of their place of origin."
The applicant, a wine producer from the Leyda Valley region of Chile, had filed to
register the trade mark LEYDA in association with wine. The application was opposed
by two other Chilean wine producers (from the same valley) on the basis that the appliedfor mark was clearly descriptive of the place of origin of the wares, contrary to s. 12(1)(b)
of the Act. The opposition was rejected; the Opposition Board held that although wine
was produced in the Leyda Valley, the valley had not been designated by the Chilean
government as an appellation of origin.
Because the phrase "clearly descriptive"
modified the meaning of the term "place of origin," the Registrar felt that there was
insufficient evidence that the average Canadian would believe that LEYDA branded wine
was from the Leyda Valley.
The opponents appealed the decision to the Federal Court, and filed new evidence that
showed that the term "Valle de Leyda" had been designated an appellation of origin in
2002 by the Chilean Ministry of Agriculture.68 In overturning the Opposition Board's
decision, Harrington J. noted:
Lamson & Sessions Co. v. Royal Group, Inc., (unreported) [2008] T.M.O.B. No. 122 for Junction Box
Colour Plate Device (yellow) [opposition rejected]; Lamson & Sessions Co. v. Royal Group, Inc.,
(unreported) [2008] T.M.O.B. No. 123 for Junction Box Colour Plate (red) [application refused]; and
Lamson & Sessions Co. v. Royal Group, Inc., (unreported) [2008] T.M.O.B. No. 124 for Junction Box
Design (blue) [application refused].
67
2007 FC 1301; (2007), 63 C.P.R. (4th) 321 (FC) [hereinafter "Vina Leyda"]
68
This was subsequent to the April 2001 filing date of the LEYDA trade mark application in Canada
8-22
I hasten to add that, in my opinion, the facts of whether a name signifies a geographical
area and whether that area produces wine are not contingent upon a government decree.
While there may be such agricultural laws in force in France, Italy and Chile, there may
not be in other places such as Canada, the United States and Australia. The fact of the
matter is, beyond doubt, that Leyda is a place in Chile where wine was produced at the
time the application for registration was made in 2001.69
Since section 12(1)(b), at least as far as "place of origin" is concerned, is not dependent
on the knowledge, or lack thereof, of the average Canadian consumer,70 the mark clearly
referred to the wine's place of origin, and it was not registrable as a result.
On a policy level, the Court noted: "geography is one of the most important
considerations in assessing whether one should try a new wine."71 Allowing the
respondent to register LEYDA, and thereby prevent others in the region from referring to
their wine's place of origin on labels or promotional literature, would give the respondent
an unfair competitive advantage.
Harrington J. did note that although a trade mark that describes a place of origin might be
registrable if it had been used and/or become distinctive at least as early as the time at
which the application for registration was filed, such a caveat could not help the
application before him, as the trade mark LEYDA had not been used in Canada before
the application was filed, nor had it become distinctive.72 The appeal was allowed and
the application to register the trade mark LEYDA was refused.
69
Vina Leyda, supra note 68 at 323
Ibid., at 324
71
Ibid. at 325
72
This point helped to distinguish Vina Leyda from Consorzio del Prosciutto di Parma v. Maple Leaf
Meats Inc., (2001), 11 C.P.R. (4th) 48 (FCTD), in which the trade mark PARMA had been used in Canada
for 39 years, 26 of which as a registered trade-mark, thereby putting s. 12(2) into play
70
8-23
Well Known
The meaning of "well known" was considered in Waltrip v. Boogiddy Boogiddy Racing
Inc.73 In this case the applicant, Boogiddy Boogiddy Racing Inc., filed an application to
register the trade mark BOOGITY BOOGITY BOOGITY based upon proposed use of
the Mark in Canada in association with clothing and promotional items, and with the
retail sale of such wares. Darrell Lee Waltrip opposed the application.
The evidence showed that the opponent was a professional NASCAR sports car racer.
Since 2001, he has been a broadcast analyst and commentator for FOX Sports Network.
In the spring of 2002, he coined the expression BOOGITY BOOGITY BOOGITY at the
start of a NASCAR race and has announced this phrase continuously on FOX broadcast
programs at the start of all races during the NASCAR regular seasons. Waltrip has been
referred to as "Mr. Boogity" or "Boogity Man", and also owned an application for
Canadian trade mark BOOGITY BOOGITY BOOGITY.74
In the present case, the evidence showed that NASCAR races are widely viewed in
Canada, and are enjoying a growing popularity in Canada. While it could be assumed that
many fans have heard the signature phrase "BOOGITY BOOGITY BOOGITY" at the
start of a race, it was not shown that a significant number of Canadians would associate
this phrase with Darrell Waltrip, or would even know who Darrell Waltrip is by name.
Given that the evidence furnished was insufficient to establish a significant public
reputation for Darrell Waltrip in Canada, the Opposition Board was not satisfied that the
average person buying a BOOGITY BOOGITY BOOGITY product or service would
assume the product or service was connected with Darrell Waltrip, and therefore the
ground of opposition based on s. 9(1)(k)75 was unsuccessful. 76
73
(2007), 64 C.P.R. (4th) 357 (TMOB) [hereinafter "Waltrip"]
Serial no. 1,242,359, registered October 31, 2005 under TMA651,976
75
Section 9(1): No person shall adopt in connection with a business, as a trade mark or otherwise, any
mark consisting of, or so nearly resembling as to be likely to be mistaken for,
(k) any matter than may falsely suggest a connection with any living individual…
76
Waltrip, supra note 74 at ¶15
74
8-24
With respect to the evidence showing the use of the phrase BOOGITY BOOGITY
BOOGITY at the start of NASCAR races broadcast in Canada, the reference to Mr.
Waltrip and his signature phrase in various magazine articles and sports news, and
references to Mr. Waltrip in various website articles describing NASCAR's growing
popularity in Canada, the Board was able to infer that some Canadians would have
associated the phrase BOOGITY BOOGITY BOOGITY with entertainment services,
namely the provision of sports broadcast commentary via television. However, neither
the reference to the phrase BOOGITY BOOGITY BOOGITY during a sports broadcast,
nor the references to the phrase in website and magazine articles are "advertising" within
the meaning of section 5 of the Act, and therefore the evidence did not support a finding
that Opponent's mark had become "made known" in Canada within the meaning of
section 5 of the Act.77 This ground of opposition therefore also failed.78
However, the Opposition Board did hold that Mr. Waltrip’s mark had become known in
Canada to the extent necessary to support the ground of opposition alleging nondistinctiveness of the applicant's mark. The applicant failed to prove on a balance of
probabilities that confusion between the applied for mark and Waltrip’s mark was
unlikely, and therefore the application was refused on this basis.79
In Parmalat Canada Inc. v. Sysco Corporation,80 Parmalat had sought leave to amend its
statement of opposition to include an additional ground of opposition based on s. 30 (i) of
the Trade-marks Act on the basis that the applicant could not have been satisfied that it
had the right to use the trade mark in Canada because such use would have been in
violation of s. 22 of the Trade-marks Act, which proscribes dilution of a registered trade
77
Section 5: A trade-mark is deemed to be made known in Canada by a person only if it is used by that
person in a country of the Union, other than Canada, in association with wares or services, and
(a) the wares are distributed in association with it in Canada, or
(b) the wares or services are advertised in association with it in
(i) any printed publication circulated in Canada in the ordinary course of commerce
among potential dealers in or users of the wares or services, or
(ii) radio broadcasts ordinarily received in Canada by potential dealers in or users of the
wares or services,
and it has become well known in Canada by reason of the distribution or advertising.
78
Waltrip, supra note 74 at ¶23
79
Ibid. at ¶33
80
2008 FC 1104 [hereinafter "Parmalat"]
8-25
mark. The issue of dilution was dealt with extensively by the Supreme Court of Canada
in Veuve Clicquot Ponsardin, Maison Fondee en 1772 v. Boutiques Cliquot Ltee.81.
The proposed new ground of opposition is follows:
Pursuant to paragraph 38(2)(a) of the Trade-marks Act, the application does not comply
with Section 30(i) of the Act, because the applicant could not, at the date of filing of the
application, have been satisfied that it was entitled to use the trade-mark in Canada since
such use would be unlawful in that at the date of filing the application, the applicant was
aware of the confusingly similar BLACK DIAMOND trade-marks of the opponent, due
to the extensive use and advertising of those trademarks in Canada by the opponent and
its predecessors in title in association with a wide variety of food products, and in that
such use was and is likely to have the effect of depreciating the value of the goodwill
attaching to the registered trade-mark BLACK DIAMOND owned by the opponent and
registered under No. UCA02073, contrary to Section 22(1) of the Act.82
The Hearing Officer, in rejecting Parmalat's application for leave to amend its statement
of opposition, said: "I do not interpret Veuve Clicquot to support a contention that a new
ground of opposition can now be raised under s. 38(2) of the Act…The Supreme
Court…may have issued some guidelines regarding what needs to be established in order
to conclude that there is depreciation of the goodwill of a trade-mark, but this is not the
issue to be decided in our case."83 In the result, the Opposition Board concluded that s. 22
was not a proper ground of opposition.
On appeal, the Federal Court found that the circumstances of the decision justified
judicial review despite the fact that the refusal to amend a statement of opposition is
typically an interlocutory decision not normally subject to review. The Court considered
that special circumstances existed in this case, since no other adequate remedy was
available to Parmalat because the Court did not have the jurisdiction to deal with an issue
not found in the statement of opposition.84
81
2006 SCC 23 [hereinafter "Veuve Clicquot"]
Parmalat, supra note 81, at para. 9
83
Ibid., at para. 15
84
Parmalat, supra note 81 at paras. 24-25
82
8-26
The Federal Court also concluded that the appropriate standard of review was correctness
on the basis that the Board erred in law by rejecting Parmalat’s application for leave to
amend its statement of opposition.
The Opposition Board had concluded that, as a matter of jurisdiction, it had no authority
to inquire into issues of depreciation under s. 22. The Federal Court disagreed with the
Board's characterization of the question, noting:
The issue before [the Board] was not whether on a stand alone basis section 22 of the Act
could form the grounds of opposition but rather whether section 38(i) of the Act could
have resorted to section 22 of the Act to sustain an opposition on the grounds the
requirement of section 30(i) were not respected because, in the particular circumstances
of this application for the registration of the trade-mark BLACK DIAMOND the
applicant for registration Sysco could not have been satisfied that it was entitled to use
the trade-mark in Canada in association with the wares described in the application
because such use would likely to have the effect of depreciating the value attaching to
Parmalat’s registered trade-mark BLACK DIAMOND contrary section 22 of the Act.85
[emphasis added]
The judicial review was allowed, but the Court refused Parmalat’s submission to consider
the matter de novo, and referred Parmalat’s application to include an additional ground of
opposition back to the Board for reconsideration by a different member.
Although the situation is not yet clear, the decision does suggest that, in appropriate
cases, s. 30 (i) of the Trade-marks Act could be invoked where the proof would be based
on violation of s. 22. Even though this requires the Opposition Board to make a
determination that there has been or would likely be a breach of s. 22 of the Act, arguably
this is no different from the Board's approach in other situations in which the breach of a
Federal statute is used to base a ground of opposition under s. 30(i).86 That said, proving
dilution or likelihood of dilution is not easy, and it would truly be an exceptional case
85
Ibid., at para. 38
See, for example, Canada Post Corp. v. Butterfield & Daughters Computers Ltd. (2008), 68 C.P.R. (4th)
280 (TMOB) in which the Opposition Board found that a ground of opposition based on s. 30(i) succeeded
after concluding that Canada Post had introduced sufficient evidence for the Board to be able to conclude
that the applicant's use of its mark WEBPOST would be in contravention of s. 58 of the Canada Post
Corporation Act.
86
8-27
where such a ground would succeed in circumstances where the opponent failed to prove
likelihood of confusion with a prior mark of the opponent.
Section 45 Expungement Proceedings
Reliability and Necessity
Bereskin & Parr v. Mövenpick-Holding87 involved the trade mark RESTAURANT
MÖVENPICK MARCHÉ & Design registered in association with hotel and restaurant
services, consulting to hotels and restaurants.
The registrant filed evidence of use including a photograph of a staff member from the
relevant period in a uniform bearing the trade mark, as well as extracts from the Internet
Archive purporting to show the availability of Mövenpick's website as well as how the
website looked during the relevant period. The registrant also filed excerpts from thirdparty websites attesting to the performance of the services during the relevant period,
among other evidence.
The Hearing Officer concluded that although use had been shown of the registrant's mark
in association with restaurant services and the operation of restaurants, there was no
evidence of use of the mark with hotel services (nor was there evidence of any special
circumstances excusing the absence of use with respect to hotel services).
The
registration was accordingly amended to delete hotel services and consulting to hotels
and restaurants.
The Hearing Officer took an interesting approach towards Internet Archive evidence.
The Hearing Officer noted:
… the evidence pertaining to Mövenpick’s Canadian website during the relevant
period, namely, Exhibits B and C, was archived from a third-party web site (the
“WaybackMachine”) and does not come from Mövenpick's business records nor
from [the witness'] personal knowledge.88
87
88
(2008), 69 C.P.R. (4th) 243 (TMOB) [hereinafter "Mövenpick"]
Mövenpick, supra note 88 at 248
8-28
Accordingly the printouts from the Internet Archive (as well as the printouts from third
party websites) constituted inadmissible hearsay.
The Registrant argued that the case of ITV Technologies, Inc. v. WIC Television Ltd., 89
which has been long relied upon as supporting the admissibility of evidence from the
Internet Archive, even though it is hearsay, supported the inclusion of this evidence. The
Hearing Officer concluded:
…this particular case is clearly distinguishable, as the necessity of the archiving site was
established and its use during trial was permitted “under reserve” to retrieve documents
that had already been produced at discovery. In the present case, [the affiant] has not
explained why it was necessary to furnish evidence of use of the mark through a thirdparty website and the reliability of such evidence cannot be ascertained. Although
hearsay evidence may be admissible, where the tests of reliability and necessity have
been met, such is not the case in the present proceedings, as the Registrant has failed to
address these exceptions to the hearsay rule.90
This case signals a possible return to a more stringent application of the hearsay rule in
proceedings with the Trade-marks Office. When preparing evidence practitioners should
be cognizant of the requirement of explaining the reliability and necessity of such
evidence when they seek to introduce printouts from the Internet such as the Internet
Archive. This case has been appealed.91
Deemed Use for Exported Wares
When providing evidence of use in association with exported wares in a section 45
summary expungement proceeding, it is important to establish that the use has occurred
in the course of a commercial transaction.
89
(2003), 29 C.P.R. (4th) 182 (FCTD)
Mövenpick, supra note 81 at p. 249
91
Notice of Application filed November 24, 2008, Court File No. T-1819-08
90
8-29
In Christopher Brett v. Molson Canada,92 the registrant filed as evidence of use of its
CELEBRATION trade mark (in association with beer, ale, lager, porter and stout) a
shipping waybill, a bill of lading and an excise duty entry form relating to a 'shipment'
which included a case of 24 bottles of CELEBRATION beer from Molson to Coors
Burton Brewery, in the United Kingdom. The registrant also filed a copy of a sample
label, upon which the trade mark was clearly marked. The registrant stated in its affidavit
that CELEBRATION brand beer was exported bearing labels as shown, and that the
labels were affixed to the bottles prior to export from Canada.
The Hearing Officer concluded, relying on Molson Companies Ltd. v. Moosehead
Breweries Ltd.,93 that the export of a single item bearing the trade mark in question can
be sufficient to meet the requirements of use of a trade mark94 provided that the export is
in the nature of a commercial transaction.
In reviewing the evidence, the Hearing Officer noted that the waybill did not identify the
beer that was shipped by brand, and accordingly it could not be evidence of use of the
mark. Similarly, a bill of lading and excise form (that had not been completed) did not
support the registrant's claim to have exported the subject wares. All of the above-noted
documents were said in the affidavit to relate to a "shipment" which included
CELEBRATION brand beer. In the Hearing Officer's view, however, a "shipment" is not
necessarily a commercial transaction. This conclusion was supported by the fact that
nowhere in the registrant's affidavit did the affiant actually state that the documents were
related to the "sale" of beer.
The Hearing Officer concluded that in the absence of additional documents or a sworn
statement by the affiant such as to provide sufficient evidence of a required commercial
transaction, she was unable to conclude that deemed use in Canada had been established
92
(unreported) [2008] T.M.O.B. No. 29
(1990), 32 C.P.R. (3d) 363 (FCTD)
94
As defined in section 4 of the Trade-marks Act
93
8-30
such as to meet the requirements of s. 4(3) of the Act.95 The mark was accordingly
expunged.
Special Circumstances Revisited
Scott Paper Limited v. Smart & Biggar96 addressed the question of special circumstances
excusing non-use.
On April 29, 2002, the Registrar, at the request of Smart & Biggar, gave notice to Scott
Paper to show whether the registered trade-mark VANITY had been used in Canada in
the three years preceding the giving of the notice, and if not, to show the date of last use
and the reasons for the absence of use.
Scott Paper responded by filing the affidavit of its Marketing and Legal Affairs Manager,
who deposed as to Scott Paper's plans and activities with respect to the trade mark in
question. That affidavit did not provide the date of last use of the trade mark in Canada,
nor did it provide any reason for the absence of such use. Instead, the affidavit set out that
as of the date of the section 45 notice, plans were already well underway to commence
use of the mark in 2002 and that, as of the date of the affidavit, October 28, 2002, such
sales had already begun.
The Senior Hearing Officer considered that the last date of use was 13 years prior to the
date of the decision, and found that the reason for non-use was a deliberate and voluntary
decision of the registered owner. However, the Senior Hearing Officer considered that
the registered owner had a serious intention to resume use of the trade-mark, which
amounted to special circumstances within the meaning of s. 45 of the Trade-marks Act,
and therefore the mark was not expunged.
95
Section 4(3): A trade-mark that is marked in Canada on wares or on the packages in which they are
contained is, when the wares are exported from Canada, deemed to be used in Canada in association with
those wares
96
2008 FCA 129; (2008), 65 C.P.R. (4th) 303 (FCA) [hereinafter "Scott Paper"]
8-31
On appeal, the trial judge quoted from the reasons of the Court in Harris Knitting
Mills,97 emphasizing the passage which says: "... It is difficult to see why an absence of
use due solely to a deliberate decision by the owner of the mark would be excused."98
This portion of Harris Knitting Mills appears to have been ignored by the Senior Hearing
Officer in her decision. The trial judge concluded that the Senior Hearing Officer had
erred in applying the law to the facts in finding that a 13-year period of deliberate nonuse could be excused by a registrant's intention to use the mark in the near future. In the
circumstances, the judge found that the Senior Hearing Officer's decision was not
reasonable, and the mark was ordered to be expunged. The registrant appealed to the
Court of Appeal.
The Court of Appeal asked:
Does evidence of an intention to resume use of a trade-mark which has been absent from
the marketplace for some 13 years, coupled with evidence of a single sale transaction
amount to "special circumstances" that justify the absence of use of the trade-mark for the
purposes of section 45 of the Trade-marks Act? The Senior Hearing Officer before whom
this matter was raised found that it did. On appeal, pursuant to subsection 56(5) of the
Act, Strayer D.J. asked the rhetorical question "Would one excuse a truant schoolboy for
an absence of a month because, when confronted, he demonstrated that although he had
no explanation for his past absences he genuinely intended to go to school the next
week?" ...99
Pelletier J.A. considered the question to be an apt one, and the Court of Appeal upheld
the decision of the Federal Court, holding that deliberate non-use of a trade mark cannot
be justified by reason of a registrant's intention to use it in the near future.
In upholding the Federal Court decision, the Court of Appeal clarified the law on special
circumstances that may excuse non-use of a registered trade mark under s. 45(3) of the
97
Canada (Registrar of Trade Marks) v. Harris Knitting Mills Ltd. (1985), 4 C.P.R. (3d) 488 (FCA)
Ibid. at p. 493
99
Scott Paper, supra note 97 at para. 1
98
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Trade-marks Act.100 The Court of Appeal noted that the case law had evolved in the
direction of treating plans for resumption of use as a special circumstance excusing nonuse. However, the Court of Appeal returned to the seminal case on this issue, Harris
Knitting Mills, carefully reviewed the reasoning, and extracted four core principles:
(1) The general rule is that absence of use is penalized by expungement;
(2) There is an exception to the general rule where the absence of use is due to
special circumstances;
(3) Special circumstances are circumstances not found in most cases of absence of
use of the mark; and
(4) The special circumstances which excuse the absence of use of the mark must be
the circumstances to which the absence of use is due.
According to the Court of Appeal, the fourth factor was dispositive of the appeal. Since
special circumstances may only excuse non-use where they refer to the actual reason for
non-use, it follows that the intention to resume use cannot constitute special
circumstances, as it is irrelevant to the reasons for the prior non-use.101
The Court of Appeal also noted that the Senior Hearing Officer had relied on the case
Oyen Wiggs Green & Mutala v. Pauma Pacific Inc.102 that held that an intention to
resume use could qualify as special circumstances excusing non-use. However, the Court
of Appeal expressly overruled such jurisprudence, on the ground that it was
irreconcilable with both the words of the Trade-marks Act and the leading case of Harris
Knitting Mills.
100
Section 45(3): Where, by reason of the evidence furnished to the Registrar or the failure to furnish any
evidence, it appears to the Registrar that a trade mark, either with respect to all of the wares or services
specified in the registration or with respect to any of those wares or services, was not used in Canada at any
time during the three year period immediately preceding the date of the notice and that the absence of use
has not been due to special circumstances that excuse the absence of use, the registration of the trade mark
is liable to be expunged or amended accordingly
101
Scott Paper, supra note 97 at ¶28
102
(1999), 84 C.P.R. (3d) 287 (F.C.A)
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Section 57 Expungement Proceedings
Descriptiveness
In 2008 the Federal Court of Appeal delivered its judgment in the case of Cheaptickets
and Travel Inc. v. Emall.ca Inc.103
The parties have a history of conflict going back many years. In 2003, Cheap Tickets
tried to use the CDRP104 to stop Emall from using its <cheaptickets.ca> domain name.105
This attempt failed and thereafter Cheap Tickets commenced a trademark infringement
action against Emall in the Supreme Court of British Columbia.106
Emall then
commenced an action in the Federal Court of Canada to expunge Cheap Tickets’ CHEAP
TICKETS and CHEAP TICKETS AND TRAVEL & DESIGN trade marks107 on the
basis that the marks were clearly descriptive.
The Court held, as a matter of first impression, that the marks were clearly descriptive of
the travel agency services provided by the Respondent:
A trade mark, as noted above, does not become other than descriptive by virtue of the fact
that it may be somewhat inaccurate. It is sufficient if it gives the impression of the nature
or function of the goods or services in connection with which it is used. The impression
these trade marks give is that the Respondent provides access to travel services at
normally advantageous rates. I do not think it particularly relevant that the Respondent
provides other services such as responding to inquiries about tourism or the booking of
hotel accommodation or car rentals, which may or may not involve anything that could
be called a “Ticket”.108
103
2008 FCA 50; (2008), 68 C.P.R. (4th) 381 (FCA) [hereinafter "Cheaptickets"]
"CIRA Domain Name Dispute Resolution Policy"
105
(2003), 25 C.P.R. (4th) 105 (CIRA)
106
Cheap Tickets and Travel (Canada) Inc. v. Emall.ca Inc. et al. 2005 BCSC 815
107
Emall.ca and Emall.ca Inc., c/o/b as Cheaptickets.ca v. Cheap Tickets and Travel Inc. 2007 FC 243,
(2007), 56 C.P.R. (4th) 81 (FC) [hereinafter "Cheaptickets FC"]
108
Ibid., at ¶ 12
104
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Respondent admitted that it used "Cheap Tickets" and "Cheap Tickets and Travel" as
descriptors of the services it provided.
Having found that the marks were descriptive and should never have been registered, the
Court declined to consider whether the marks had acquired distinctiveness by the time of
the application. In the result, the marks were ordered expunged. The case was appealed
to the Federal Court of Appeal.109
The Registrar of Trade-Marks had given effect to the expungement order approximately
17 days after the order was made, before the expiry of the appeal period for the order.
Cheaptickets had not asked either the Federal Court trial division judge or the Court of
Appeal for a stay of the order. It appears that, contrary to Cheaptickets' understanding,
the Registrar has no policy of deferring the execution of an expungement order until all
rights of appeal are exhausted.
Section 52 of the Federal Courts Act defines the powers of the Court of Appeal in
appeals. In the case of an appeal from the Federal Court, subparagraph 52(b)(i) provides
that the Court of Appeal may: "(i) dismiss the appeal or give the judgment and award the
process or other proceedings that the Federal Court should have given or awarded […]".
The Court of Appeal concluded that a fair reading of this section means that where the
order under appeal is an expungement order, the Court may either dismiss the appeal (in
which case the expungement order would stand), or allow the appeal. If the appeal is
allowed, the Court may go further and, making the order the Federal Court should have
made, dismiss the application for expungement. If that order is made after the
expungement has occurred, the Registrar of Trade-Marks would be required, upon
receiving notice of the order, to reverse the expungement and, in effect, re-instate the
registration of the trade mark.110
109
Cheaptickets, supra note 104
110
Ibid., at ¶8
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Cheaptickets attempted to argue that the registration of a trade mark is presumptively
valid.
The Court of Appeal agreed that although there may be some presumption
established by s. 19 of the Trade-marks Act, Cheaptickets was trying to push the
presumption too far:
The presumption of validity established by section 19 of the Trade-Marks Act is
analogous to the presumption of validity of a patent in section 45 of the Patent Act,
R.S.C. 1985, c. P-4. In Apotex Inc v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153,
Justice Binnie characterized that presumption as weakly worded, and he explained (at
paragraph 43) that the presumption adds little to the onus already resting, in the usual
way, on the attacking party. What that means, in my view, is that an application for
expungement will succeed only if an examination of all of the evidence presented to the
Federal Court establishes that the trade mark was not registrable at the relevant time.
There is nothing more to be made of the presumption of validity.111
Cheaptickets also argued that the trial judge had erred in determining that the trade marks
were “clearly descriptive” within the meaning of s. 12(1)(b), because they are at most
merely suggestive of the character or quality of the services offered by Cheaptickets. The
Court of Appeal concluded this is a question of mixed fact and law that would not be
disturbed on appeal in the absence of palpable and overriding error, or a readily
extricable error of law, neither of which were present.
Cheaptickets also argued that the trial judge should have considered s. 12(2),112 which
allows for the registration of a clearly descriptive mark that has acquired distinctiveness
as at the date the application was filed. The Court of Appeal agreed with Cheaptickets
that the trial judge did not mention s. 12(2).
However, the Court of Appeal concluded
that, although it may have been an error, if so, the error was inconsequential: "The record
discloses no evidence that is reasonably capable of supporting Cheaptickets’ submission
111
Cheaptickets, supra note 104 at ¶12
Section 12(2): A trade-mark that is not registrable by reason of paragraph (1)(a) or (b) is registrable if it
has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the
date of filing an application for its registration
112
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that the trade marks had acquired distinctiveness as of the date on which the applications
for registration were filed."113
Finally, Cheaptickets argued that the trial judge failed to consider the unique and
distinctive aspects of the CHEAP TICKETS AND TRAVEL & DESIGN mark separate
and apart from the CHEAP TICKETS mark. The Court of Appeal dismissed this
argument on the basis that the challenge to the registrability of the trade marks was based
on the use of the words CHEAP TICKETS as an integral part of Cheaptickets’ registered
trade marks, and there was no evidence that Cheaptickets has ever disclaimed, or
indicated a willingness to disclaim, the words CHEAP TICKETS as used in the CHEAP
TICKETS AND TRAVEL & DESIGN mark.
The appeal was dismissed.
Persons Interested
In Fairmont Resort Properties Ltd. v. Fairmont Hotel Management, L.P.114 Fairmont
Resort Properties Ltd. ("Resorts") filed an application to strike three registrations owned
by Fairmont Hotel Management, L.P. ("Hotels") from the Trade Marks Register, namely
the FAIRMONT word mark and the following two design marks:
Section 57(1) of the Trade-marks Act allows “any person interested” to apply to the
Federal Court for an order that “any entry in the register be struck out or amended on the
grounds that at the date of the application the entry as it appears on the register does not
113
114
Cheaptickets, supra note 104 at ¶21
2008 FC 876; (2008), 67 C.P.R. (4th) 404 (FC) [hereinafter "Fairmont"]
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accurately express or define the existing rights of the person appearing to be the
registered owner of the mark.”
The phrase “person interested” is defined in s. 2 of the Trade-marks Act. An applicant is
a “person interested” if it may be affected by any entry on the register or reasonably
apprehends that it may be affected by any act or omission contemplated act or omission
under or contrary to the Trade-marks Act.115
Despite the low threshold, the applicant was found not to be a “person interested”. The
applicant had waited almost five years after the registration of the Hotel Marks to
commence the proceeding.
The Court was unsympathetic to the applicant’s claims that this was due to an oversight
of their lawyers. Until quite recently, the applicant’s actions demonstrated that it did not
perceive itself to be affected by the entry of the Hotel Marks on the register or by the
other businesses located near Fairmont Hot Springs, British Columbia, using the word
“Fairmont” in their business name. Resorts had not used the word FAIRMONT in a trade
mark sense but rather, as have numerous other businesses, as a geographical descriptor of
a region of British Columbia. Resorts had never applied for registration of a trade mark
consisting of or incorporating the word Fairmont, and it did not oppose the registration of
the Hotel marks. In short, Resorts simply did not act as if it perceived itself to be a person
affected, or who reasonably apprehended that it might be affected by the registrations.116
Although this finding was sufficient to dispose of the application, the Court also
dismissed the other issues raised by Resorts.
115
The standard to be met is that of a de minimis threshold: see Omega Engineering, Inc. v. Omega SA
2006 FC 1472 at ¶11
116
Fairmont, supra note 115 at ¶53-55
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Material Date in Descriptiveness Cases is the Key to Evidence
Federal Court of Appeal recently allowed a trade mark owner's appeal and restored the
registrations for the trade marks CANADADRUGS.COM and CANADA DRUGS that
had been expunged by the Federal Court in proceedings brought under subsection 57(1)
of the Trade-marks Act.117
In that case, The Court concluded that, as a matter of first impression and common sense,
and considered in association with the services, the marks described the services provided
– that is, pharmaceuticals from Canada.118
In light of the habits of the ordinary consumer, the Court reasoned that the phrase
"Canada Drugs" must be considered with respect to Internet search engines and search
terms, which would be consumers' primary method of locating such products online. A
consumer trying to find a pharmacy in Canada may very well search using the keywords
"Canada" and "drugs", two generic terms which would describe many businesses.
Accordingly, the Court concluded that to permit this combination of words common to
the trade to be trademarked would result in an undue disadvantage for legitimate
competitors.119
In addition, the Court concluded that the marks were deceptively misdescriptive since the
prescriptions were not always filled by a Canadian pharmacy, and the only consistent
Canadian connection appeared to be that the Respondent had a Canadian office where the
orders were processed. The Court reasoned that Canadian consumers would trust the
prescription fulfillment of a Canadian pharmacy more than that from other countries, and
therefore, on balance of probabilities, "the ordinary consumer would think that there is a
117
Candrug Health Solutions Inc. v. Thorkelson (2007), 60 C.P.R. (4th) 35 (FC) [hereinafter "Candrug"]
Ibid., at ¶ 39
119
Ibid., at ¶ 40. The Court reached the same conclusion with respect to CANADADRUGS.COM because
the terminator ".com" is so common in Internet oriented trade marks that it had lost any meaning it once
had, and without this, the remainder is "merely a conflation of 'Canada' and 'drugs'."
118
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greater connection to Canada than merely the location of the office, such as the origin of
the drugs themselves or, at a minimum, the dispensing services."120
The registrant appealed.121 After the appeal was filed, the parties reached a settlement and
Pharmawest ceased its participation in the registrant's appeal.
After summarizing the evidence before the Court most relevant to the issues raised in the
appeal, Sharlow J.A. concluded that the record on the appeal contained no evidence that
was capable of establishing that, as of May 20, 2003 (the date the trade marks were
registered), the trade marks in issue in this case were clearly descriptive or deceptively
misdescriptive of the character or quality of the services provided by the online pharmacy
business controlled by the registrant. It was not clear from the judge's reasons whether
and to what extent he relied on any of that evidence, but Sharlow J.A. concluded that any
such reliance would have been misplaced:
There is a place in cases of this kind for a judge to apply his own common sense, with the
assistance of dictionaries, as to the meaning of ordinary words and phrases. However, it
cannot fairly be said that on May 20, 2003, the phrase "Canada Drugs", which is the
phrase at the core of both of the trade marks in issue in this case, had a known
meaning.122
The appeal was allowed and the marks were restored to the Register. This case serves as
a reminder of the importance of maintaining the material date in mind when filing
evidence: in this case the material date was May 20, 2003, and the evidence was not
sufficient, as at the material date, to show that the marks were descriptive. Had the
material date been later, the conclusion might have been different.
120
Candrug, supra note 118 at ¶ 43
Thorkelson v. Pharmawest Pharmacy Ltd. 2008 FCA 100; (2008), 64 C.P.R. (4th) 431 (FCA)
[hereinafter "Candrug FCA"]
122
Ibid., at ¶15
121
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Official Marks
The Court of Appeal decided an appeal and cross-appeal in the controversial case See
You In – Canadian Athletes Fund Corporation v. Canadian Olympic Committee.123
The trial judgment124 involved four trade mark applications of the SYI Fund based on
proposed use. Ten months after these applications were filed, and while they were still in
the examination stage, the Canadian Olympic Committee requested that public notice be
given of the identical official marks. In support of its requests, the COC filed evidence to
establish that it was a public authority pursuant to the test in Ontario Association of
Architects125. As to adoption and use, however, the COC filed nothing more than a letter
from its counsel stating that the respective mark “has been adopted and used as an official
mark by the Canadian Olympic Committee for wares and services in Canada”.
Despite the SYI Fund's pending applications, the Registrar gave public notice of the use
and adoption of the COC's official marks in October, 2004. The SYI Fund accordingly
filed an application for judicial review seeking to have the s. 9 public notice quashed. At
trial, the Court held that the COC did not satisfactorily prove that it had adopted and used
its official marks, and the decision of the Registrar to publish the marks was quashed.
Turning to what it called the "peculiarity" of the proceeding, the Court of Appeal
considered the appeal by the SYI Fund, which had been successful below and had
obtained the relief which it had sought, namely that its application for judicial review be
granted and the Registrar's decision set aside. The Applications Judge based his decision
on his finding that the COC had not established its adoption and use of the marks.
However, he rejected another argument advanced by the SYI Fund in support of the
application for judicial review, namely that the COC was a licensee of the mark from the
International Olympic Committee. Counsel for the SYI Fund argued that the Judge had
123
2008 FCA 124; (2008), 65 C.P.R. (4th) 421 (FCA) [hereinafter "Canadian Athletes Fund"]
See You In – Canadian Athletes Fund Corporation v. Canadian Olympic Committee 2007 FC 406
(2007), 57 C.P.R. (4th) 287 (FC)
125
Ontario Association of Architects v. Association of Architectural Technologists of Ontario (2002), 19
C.P.R. (4th) 417 (F.C.A.)
124
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erred in this latter conclusion and urged the Court of Appeal to make findings in favour
of the appellant on the issue. This, the Court of Appeal declined to do:
A party who has obtained the relief it sought is not normally entitled to appeal against the
judge's reasons. We see no basis for making an exception in this case, however useful to
the appellant a ruling in its favour may possibly be in the future.126
The COC cross-appealed, arguing that the Applications Judge had committed a
reviewable error in finding that the COC had not "adopted and used" the marks prior to
the decision of the Registrar to publish them as official marks, as required by section 9 of
the Trade-marks Act. The Judge found, and counsel for the COC agreed, that, for the
purpose of section 9 of the Trade-marks Act, "use" must involve a public display of the
marks in question. Counsel for the appellant conceded that the only relevant evidence of
"use" by the COC in the relevant time period concerned pen and flashlight sets with the
COC logo and the marks in question, which the COC had ordered. However, even if the
COC had received the pen and flashlight sets before the publication date, the Court of
Appeal concluded that the evidence regarding their distribution to the public by the COC
was so equivocal that the Judge's conclusion that the COC had not established that it had
"used" the marks does not constitute palpable and overriding error.
The appeal and cross-appeal were both dismissed.
Unfair Competition – s. 7(a)
The decision in Canadian Copyright Licensing Agency v. The Business Depot Ltd. 127
involved the appeal of a Prothonotary's order striking out Business Depot's counterclaim
based on s. 7(a)128 of the Trade-marks Act.
126
Canadian Athletes Fund, supra note 124 at ¶8
(unreported) 2008 FC 737 [hereinafter "Access Copyright"]
128
Section 7: No person shall
(a) make a false or misleading statement tending to discredit the business, wares or services of a
competitor
127
8-42
The Prothonotary struck out the Counterclaim with leave to amend and held that “[t]he
counterclaim simply does not plead material facts sufficient to support a cause of action
under Section 7(a) of the Trade-marks Act”.129
The plaintiff, the Canadian Copyright Licensing Agency ("Access Copyright") alleged in
its Statement of Claim that Business Depot, through its offering of photocopying
services, had engaged in both direct copyright infringement and the authorization of
copyright infringement over a period of several years. In its Statement of Defence,
Business Depot defended the infringement claim on the basis, inter alia, that it allows its
employees to make copies of works only for patrons who represent that they own the
copyright in a particular work or have the permission of the copyright owner to copy the
work, that it is not necessary to have a license from Access Copyright to offer
photocopying services to the public, and that any copying by Business Depot customers
constituted fair dealing pursuant to section 29 of the Copyright Act.
Access Copyright issued a press release summarizing the claims being asserted against
the defendant in this action, which was posted on Access Copyright's website:
FOR IMMEDIATE RELEASE :
Access Copyright Sues Staples/Business Depot for Copyright Infringement
November 15, 2007
Toronto, ON – Access Copyright, an organization representing the copyright of almost
9,000 Canadian writers and publishers is suing Staples/The Business Depot for copyright
infringement.
The lawsuit, filed by Access Copyright, contains the largest claim to arise from copyright
infringement of published works in Canada.
129
Access Copyright, supra note 128 at ¶1
8-43
The lawsuit seeks $10 million in damages, including a claim for punitive damages.
Staples/Business Depot is a sizeable, for-profit organization that has built part of its
business through a lucrative service that exploits the published works of authors,
photographers and publishers. Companies that photocopy illegally are effectively taking
money directly out of the pockets of creators and publishers who depend on book sales
and copyright royalties for their livelihood.
“Companies that profit from illegal photocopying are undermining the work of others”,
said Maureen Cavan, Executive Director of Access Copyright. “Staples/Business Depot”
is no different from those organizations that profit from illegally downloading copyright
protected music or the unauthorized sharing of videos and published works on the
internet.”
Access Copyright has been continuously investigating Staples/Business Depot since 1998
in response to concerns raised by creators and publishers over infringement activities.
Despite repeated attempts by Access Copyright to reach a settlement and come to an
amicable resolution, Staples/Business Depot has made no perceivable changes to their
business practices.
Access Copyright, The Canadian Copyright Licensing Agency, is a not-for-profit
organization founded by Canadian creators and publishers to meet the needs of users of
copyright protected works, while ensuring fair compensation for that use. Access
Copyright works with organizations in all sectors to help them operate legally by
providing access to licences that allow for the legitimate use of published copyright
protected materials.
Business Depot alleged in its Counterclaim that some of the statements in the plaintiff's
press release were "false and misleading", "tend to discredit the business, wares and
services" of Business Depot, and have "damaged the corporate image, reputation and
goodwill" of the defendant.
As a result, Business Depot claimed against Access
Copyright general damages in the amount of $1 million pursuant to section 7(a) of the
Trade-marks Act, as well as aggravated, exemplary and punitive damages, and an
8-44
injunction prohibiting the plaintiff from making any statements that the defendant is
infringing any copyright.
The Court reviewed the wording of s. 7(a) and considered that the “competitor”
requirement is a fundamental element of the section. There was, however, no allegation
in the counterclaim that the plaintiff is in any way a “competitor” of the defendant, and
therefore on its face, the counterclaim was deficient as it failed to allege on of the
constituent elements of the statutory prohibition.130
Comparing the activities of Access Copyright (a non-profit organization acting as a
collective of copyright owners), and Business Depot (a retailer), and citing references
from West’s Law and Commercial Dictionary in Five Languages and the Pocket
Dictionary of Canadian Law, the Court rejected Business Depot’s argument that the
parties were competitors, as they did not compete for the same customers, by selling the
same products, in the same marketplace.131
Although this finding was sufficient to dispose of Business Depot's appeal, the Court
went on to consider the second reason given by the Prothonotary for striking the
counterclaim - his conclusion that the cause of action, pursuant to s. 7(a) of the Trademarks Act, must relate to a false and misleading statement made in respect of a trade
mark or other intellectual property.
Section 7(a) of the Trade-marks Act creates a cause of action that is similar to the tort of
slander of title or injurious falsehood and has the same requirements: (a) a false and
misleading statement; (b) tending to discredit the business, wares and services of a
competitor; and(c) resulting damage. The Supreme Court of Canada has held, however,
that the scope of section 7(a) must be further “read down” in order to be constitutionally
valid: s. 7(a) can only be a constitutionally valid enactment of the federal Parliament if it
is limited to “rounding out” the regulatory scheme in the Trade-marks Act. In other
130
131
Access Copyright, supra note 128 at ¶18
Ibid. at ¶23
8-45
words, for section 7(a) to be valid, its application must be limited to creating a cause of
action relating to false and misleading statements made about a trade-mark or other
intellectual property owned by the claimant. 132 Despite arguments by Business Depot to
the contrary, the Court concluded that there was no allegation that any statement by
Access Copyright related to any trade mark or intellectual property owned by Business
Depot, and therefore the counterclaim and appeal were dismissed.
Practice Notes – Practice Notices Issued in 2008
Updated Correspondence Procedures [November 27, 2008]
This practice notice provides an update on correspondence procedures with the Canadian
Intellectual Property Office, including identifying designated establishments, registered
mail service, electronic correspondence and facsimile correspondence.
Service of Documents on the Registrar of Trade-marks [January 23, 2008]
This practice notice describes the appropriate manner in which to serve documents on the
Registrar of Trade-marks.
•
Personal Service: Where a document is required to be personally served on the
Registrar, personal service may be effected by:
o Attending at the Canadian Intellectual Property Office and personally
leaving the document with an employee in the Executive Office of the
Registrar who is authorized to accept service on behalf of the Registrar.
OR
o Rule 133 of the Federal Courts Rules provides that personal service of
originating documents on the Registrar may be effected by filing the
originating document and two copies of it with the Federal Court Registry.
•
All notices of appeal filed in the Federal Court appealing a decision of the Registrar
must also be filed with the Registrar (ss.56(2)of the Trade-marks Act). The
requirements under subsections 56(1), (2) and (3) of the Trade-marks Act are
132
Access Copyright, supra note 128 at ¶27
8-46
obligatory in nature and a failure to comply with this provision may render the appeal
a nullity.
•
Non-personal Service: Where a document is not required to be personally served,
service may be effected on the Registrar by sending the document to the Canadian
Intellectual Property Office, attention IC Legal Services, at the address provided in
the Practice Notice. Non-personal service may include, where the applicable rules of
court allow: mailing the document, delivering the document by courier or transmitting
the document by facsimile (see for example Rules 138 -143 of the Federal Courts
Rules).
COMING SOON: Update to Practice in Trade-mark Opposition Proceedings
•
Public consultation on the new practice took place from September 4, 008 – October
24, 2008.
•
The proposed practice notice entitled Practice in Trade-mark Opposition Proceedings
will be amended to reflect decisions taken by CIPO as a result of comments received
from stakeholders during the consultation period. The revised Practice in Trade-mark
Opposition Proceedings will be posted in January 2009 on CIPO’s website’s in the
What’s New section, the TMOB page, as well as in CIPO’s e-Newsletter and it is
expected that the Practice in Trade-mark Opposition Proceedings will be published in
the Trade-marks Journal and come into effect in February 2009.
Decisions of Interest Expected in 2009
•
Trial of Crocs Canada Inc. v. Holey Soles Holdings Ltd. [Not yet scheduled: Court
File No. T-161-05];
•
Further appeal of Scotch Whisky Association v. Glenora Distillers International Ltd.
[Scheduled to have been heard December 17, 2008: Court File No. A-194-08];
•
Appeals of Simpson Strong-Tie Co. and Peak Innovations Inc. [Not yet scheduled:
Court File Nos. T-1122-08 to T-1135-08; T-272-08 to T-276-08; T-159-08 to T-16008; and T-2245-07 to T-2250-07];
8-47
•
Appeal of Bereskin & Parr v. Mövenpick-Holding [Not yet scheduled: Court File
No. T-1819-08].
8-48