- Official Journal of the International Trademark Association

Official Journal of the International Trademark Association
-
The FTDA After Moseley v. V Secret
James R. Higgins, Jr. and Scot A. Duvall
Moseley v. V Secret Catalogue, Inc.:
One Answer, Many Questions
Dale M. Cendali, Carol M. Matorin and Jeremy Maltby
Victoria’s Big Secret: Whither Dilution
Under the Federal Dilution Act?
Jonathan Moskin
Trademark Issues In Bankruptcy
Stuart M. Riback
Would Victoria’s Secret Be Protected North of the Border?
A Revealing Look at Trade-Mark Infringement and
Depreciation of Goodwill in Canada
Mirko Bibic and Vicky Eatrides
How Surveys Overestimate the
Likelihood of Consumer Confusion
Dr. John P. Liefeld
Geographical Indications and Trademarks The Road from Doha
Burkhart Goebel
Vol. 93
July-August, 2003
No. 4
Vol. 93 TMR
904
WOULD VICTORIA’S SECRET BE PROTECTED
NORTH OF THE BORDER?
A REVEALING LOOK AT TRADE-MARK
INFRINGEMENT AND DEPRECIATION OF
GOODWILL IN CANADA
By Mirko Bibic and
Vicky Eatrides*
I. INTRODUCTION
Act1 (the “Act”) was
In 1953, the Canadian Trade-marks
amended following the release of the Report of the Trade Mark
Law Revision Committee, chaired by Dr. Harold G. Fox. In
formulating the 1953 statute,
Dr. Fox had regard to the
jurisprudence of the United States, which he characterized as
having “demonstrated a growing perception of the dilution
theory.“2 Dr. Fox recognized that there could be a form of trademark “infringement” that did not necessarily result in immediate
loss of sales, but a diminution in the uniqueness of the trade-mark
that would lessen its value to the owner. An attempt was made in
Canada in 1953 to address the issue of dilution in what is now
section 22 of the Act, which pertains to the
“depreciation of
goodwill.”
In the United States, the issue of dilution3 has garnered
significant attention in recent years. For example, the U.S.
Supreme Court rendered a landmark decision in Moseley v. V
Secret Catalogue Inc.,4 where the owners of the famous trade-mark
VICTORIA’S SECRET attempted to enjoin the owners of a retail
store selling adult videos,
adult novelties and lingerie from
operating under the name VICTOR
’S LITTLE SECRET. The
* Stikeman Elliott LLP, Ottawa, Canada, Associate Member of the International
Traemark Association. Mirko Bibic is a partner in the Ottawa office who practises in the
area of intellectual property. Vicky
Eatrides is an associate in the Ottawa
office who
practises in the areas of intellectual property and antitrust law. The valuable comments of
Stuart C. McCormack of Stikeman Elliott LLP are gratefully acknowledged.
1.
Trade-marks Act, R.S.C. 1985, c.T-13, as amended.
2. H.G. Fox, The Canadian Law of Trade Marks and Unfair Competition, 3rd ed.
(Toronto: Carswell, 1972) at 340 Ihereinafter Canadian Law of Trade Marks]. See also K.
Gill & R.S. Joliffe, eds., Fox on Canadian Law of Trade Marks and Unfair Competition, 4th
ed. (Toronto: Carswell, 2002).
3. The United States Federal Trademark Dilution Act, 15 U.S.C.
§ 1125(c), generally
defines “dilution” as the lessening of the capacity of a famous mark to identify and
distinguish goods or services,
4. 123 S. Ct. 1115 (2003).
Vol. 93 TMR
905
trade-mark lawsuit that was commenced in the United States by
Energizer Holdings Inc. ( “Energizer”), and recently settled, is
another current example of a trade-mark owner in the United
States attempting to protect its brand by preventing alleged
dilution.5 Energizer
was alleging trade-mark and copyright
infringement, trade-mark dilution and unfair competition as a
result of the use by a racetrack and racing organization of the
Energizer Bunny in newspaper ads and campaign literature
criticizing a controversial legislative initiative.
This article examines the question of whether the drafters of
the Act in Canada succeeded in their goal and/or whether the
Canadian courts have clearly understood the drafters ’ intentions
in this regard. Specifically, this article examines the question by
assessing sections 19, 20 and 22 of the Act (which are the heart of
the Act ’s trade-mark infringement, passing off and depreciation of
goodwill provisions) and concludes that: (1) there have been
shortcomings in the judicial interpretation of these provisions to
date; and (2) section 22, in particular, should be amended. In
reaching its conclusion, this article places particular emphasis on
to the
the application
of the above-mentioned provisions
burgeoning area of comparative advertising, given that the most
significant Canadian judicial decisions that interpret these
provisions considered such issues.
Over the years,
Canadian judicial decisions dealing with
trade-mark infringement and enforcement have given rise to what
This
this article
calls the “traditional” interpretation.
interpretation has caused much debate and, in the authors
’
opinion, interpretative difficulties. The primary difficulty stems
from the fact that when interpreting sections 19, 20 and 22 of the
Act, many commentators,
and often the courts, have simply
adopted the reasoning from recent case law, seldom taking a step
back in an attempt to understand their true meaning and purpose.
In the authors ’opinion, the failure to conduct in-depth analyses of
the true meaning and purpose of the provisions of the Act has led
to the development of tests that often conflict with the ordinary
meaning of the language used therein, and has created
inconsistencies in the law and difficulties for practitioners when
advising clients.
In this article, the leading decisions under sections 19, 20 and
22 are analyzed in order to illustrate how these provisions have
been interpreted and the authors identify the shortcomings of the
traditional interpretation of the infringement scheme. This
analysis was conducted in order to support the authors ’contention
5. See INTA Bulletin, “In the News: Energizer Charged Up Over Unauthorized Bunny
Ads” (December 15, 2002). See also Energizer Inc., News Release, “Energizer Holdings, Inc.
Settles Lawsuit Against Coalition of Arizona, Turf Paradise and American Greyhound
Racing” (March 18, 2003).
Vol. 93 TMR
906
that there is a need to review the legislative intent and to apply
principles of textual analysis in order to interpret properly the
Act’s infringement scheme. Examination of the ordinary meaning
of the language of sections 19, 20 and 22 helps to understand and
interpret the infringement scheme. A close examination of the
language of the Act reveals the manner in which the three relevant
provisions complement each other and form a clear and complete
regime for trade-mark owners to protect their rights. These
provisions also contain checks and balances, thereby obviating the
need to create new tests and to stray from the language of the Act.
Revisiting the drafter ’s intent and undertaking a textual analysis
would not only provide practitioners and the courts with a better
understanding of the infringement scheme, but would also resolve
many of the problems that have arisen from the traditional
interpretation.
As a practical matter, an interpretation of the trade-marks
scheme based on a textual analysis often has the same result as
the traditional interpretation. However, in the authors ’opinion, in
certain cases, the traditional interpretation fails. This can be
shown by applying the traditional interpretation to typical factual
scenarios often encountered in the area of comparative advertising.
In certain cases of comparative advertising, as outlined in detail in
this article, the interpretation advocated by the authors leads to a
result.
These
divergent,
arguably
more
accurate,
yet
inconsistencies create serious difficulties when advising clients
about the infringement scheme in the Act (and in particular the
permissibility of comparative advertising).
II. THE TRADE-MARKS ACT
A. The Provisions of the Act in Question
Registered owners of trade-marks can enforce their rights
against the unauthorized use of their marks pursuant to sections
7(b), 19, 20 and 22 of the Act.6 The relevant causes of action for the
6. Unregistered trade-marks may be protected by the common law action of passing
off or by section 7 of the Act, which reads:
7. No person shall
(a) make a false or misleading statement tending to discredit the business, wares or
services of a competitor;
(b) directpublic attention to his wares, services or business in such a way as to cause or
be likely to cause confusion in Canada, at the time he commenced so to direct attention
to them, between his wares, services or business and the wares, services or business of
another;
(c) pass off other wares or services as and for those ordered or requested;
(d) make use, in association with wares or services, of any description that is false in a
material respect and likely to mislead the public as to
(i) the character, quality, quantity or composition,
907
vol. 93 TMR
purposes of this article are trade-mark infringement and the
depreciation of goodwill.
The registered owner of a mark may bring an action for trademark infringement pursuant to sections 19 and 20, and an action
for depreciation of goodwill under section 22. The relevant
provisions of the Act read as follows:
1. Definition of
“Trade-mark ”
2. [. . .] “trade-mark” means
(a) a mark that is used by a person for the purpose of
distinguishing or so as to distinguish wares or services
manufactured, sold, leased, hired or performed by him from
those manufactured, sold, leased, hired or performed by
others,
(b) a certification mark,
(c) a distinguishing guise, or
(d) a proposed trade-mark; [. _ .]
2. Definition of
“Use”
2. [. . .] “use,” .in relation to a trade-mark, means any use that
by section 4 is deemed to be a use in association with wares or
services;
********
4. (1) A trade-mark is deemed to be used in association with
wares if, at the time of the transfer of the property in or
possession of the wares, in the normal course of trade, it is
marked on the wares themselves or on the packages in which
they are distributed or it is in any other manner so associated
with the wares that notice of the association is then given to
the person to whom the property or possession is transferred.
(2) A trade-mark is deemed to be used in association with
services if it is used or displayed in the performance or
advertising of those services.
(ii) the geographical origin, or
(iii) the mode of the manufacture, production or performance of the wares or
services; or
(e) do any other act or adopt any other business practice contrary to honest industrial
or commercial usage in Canada.
[Emphasis added]. Subsection 7(b) is regarded as a cod&cation of the common law action of
passing off.
Vol. 93 TMR
908
3. Infringement
19. Subject to sections 21, 32 and 67, the registration of a
trade-mark in respect of any wares or services, unless shown
to be invalid, gives to the owner of the trade-mark the
exclusive right to the use throughout Canada of the trademark in respect of those wares or services.
********
20. (1) The right of the owner of a registered trade-mark to its
exclusive use shall be deemed to be infringed by a person not
entitled to its use under this Act who sells, distributes or
advertises wares or services in association with a confusing
trade-mark or trade-name, but no registration of a trade-mark
prevents a person from making
(a) any bona fide use of his personal name as a trade-name,
or
(b) any bona fide use, other than as a trade-mark,
(i) of the geographical name of his place of business, or
(ii) of any accurate description of the character or quality of
his wares or services,
in such a manner as is not likely to have the effect of
depreciating the value of the goodwill attaching to the
trade-mark.
(2) No registration of a trade-mark prevents a person from
making any use of any of the indications mentioned in
subsection 11.18(3) in association with a wine or any of the
indications mentioned in subsection
11.18(4) in association
with a spirit.
4. Depreciation of Goodwill
22. (1) No person shall use a trade-mark registered by another
person in a manner that is likely to have the effect of
depreciating the value of the goodwill attaching thereto.
(2) In any action in respect of a use of a trade-mark contrary to
subsection (l), the court may decline to order the recovery of
damages or profits and may permit the defendant to continue
to sell wares marked with the trade-mark that were in his
possession or under his control at the time notice was given to
him that the owner of the registered trade-mark complained of
the use of the trade-mark.
vol. 93 TMR
909
B. Brief Summary of the Traditional Approach
Courts have traditionally interpreted sections 19, 20 and 22 as
three separate causes
of action. According to the traditional
approach, section 19 is used by the owner of a registered trademark where another uses,
without authorization, the identical
trade-mark in association with the same wares and/or services as
those in respect of which the trade-mark is registered (i.e., same
trade-mark and same wares and/or services). Section 20 is invoked
to restrain the unauthorized use of a trade-mark likely to create
confusion with the registered trade-mark (i.e., confusing trademark and confusing wares and/or services). Section 22 applies
where a registered trade-mark is used by another in a manner
likely to have the effect of depreciating the value of the goodwill
attached to the mark. Although the courts have generally accepted
this traditional approach, it is the authors
’ opinion that the
statutory provisions, when viewed and read together, reveal that a
somewhat different methodology was intended and should be
adopted.
C. The Ordinary Meaning of Sections 19, 20 and 22
Section 19 ( “Rights Conferred by Registration ”) grants to the
owner of a registered trade-mark in respect of any wares or
services the exclusive right to use the trade-mark throughout
Canada in respect of those wares or services. Section 19 is
essentially a declaratory provision that does not provide for a
remedy in the event of a breach. Section 53.2, however, gives the
court the right to order an appropriate remedy where any act has
been done contrary to the Act.7
When read in this manner, and reduced to its simplest terms,
section 19 is of limited application, in that it protects only the
identical mark for use with identical wares and services.
Subsection 20(l) ( “Infringement ”) broadens the protection afforded
to a registered trade-mark owner by deeming certain behaviour to
infringe the rights granted to the owner under section 19. Thus,
according to the language of subsection
20(l), the owner of a
registered mark would simply have to establish that a third party
sells, distributes or advertises wares or services in association with
a confusing trade-mark. The third party would then be deemed to
have infringed the owner ’s exclusive right under section 19. In
7.
Section 53.2 of the Act states:
Where a court is satisfied, on application of any interested person, that any act has
been done contrary to this Act, the court may make any order that it considers
appropriate in the circumstances, including an order providing for relief by way of
injunction and the recovery of damages or profits and for the destruction, exportation
or other disposition of any offending wares, packages, labels and advertising material
and of any dies used in connection therewith.
910
Vol. 93 TMR
Culinar Inc. v. Gestion Charaine Inc., the Federal Court, Trial
Division wrote:
In proving that its rights have been infringed the plaintiff can
also count on the protection of the Act, as s. 20 creates a
presumption in favour of anyone who has a registered mark
against any person who sells, distributes or advertises services
in association with a confusing trade name, whatever the class
of wares or services.8
Interpreted in this fashion, section 19 need not be argued as
grounds for infringement. As Dr. Fox said, while section 19 “states
the exclusive right accorded to a registered trade-mark . . . section
20 . . . defines infringement. The section clearly states that this
exclusive right is deemed to be infringed ‘by a person . . . who sells,
distributes or advertises wares or services in association with a
confusing trade mark or trade name. . . .“ ‘g
Thus, section 19 confers on the trade-mark owner the right to
exclusive use, while section 20 defines infringementlO
Even if we assume that there is a cause of action under section
19, subsection 20(l) provides a broader ambit of protection and
should, in the majority of cases, subsume traditional section 19
infringement actions. Subsection 20(l) provides that no person
shall sell, distribute or advertise wares or services in association
with a confusing trade-mark or trade-name. A “confusing” mark
should include the identical mark according to the definition of
“confusing” in section 2 of the Act.11 Section 20 also covers any
8.
(1987), 19 C.I.P.R. 133 (F.C.T.D.) at 59.
9.
Canadian Law of Trade Marks, supra n.2, at 334.
10. But see Syntex
where the Court said:
v. Novopharm Ltd.
(1989), 26 C.P.R. (3d) 481 (F.C.T.D.) at 499,
While there may be more difficulty in establishing the plaintiffs claim for deemed
infringement under s. 20 of the Act, its claim under s. 19 for unauthorized use of its
property rights is more readily apparent, and is open to attack only in relation to the
validity of its registration.
However, this statement is understandable, given the circumstances of the case. First,
Syntex was an interlocutory decision and the Court did not undertake a detailed analysis of
the interpretation of sections 19 and 20. Second, the Court seemed to adopt the view that
section 19 is invoked in cases of identical marks and identical wares, which test was
obviously met in this case. Third, at the time of the decision, the case under section 20
would have been more difficult for the plaintiff to meet because of the need to prove
confusion. As it was a case involving pharmaceuticals, the Court had to deal with what had
been a longstanding debate as to whether confusion should be examined from the
perspective of the end consumer or the physicians prescribing the pharmaceuticals and the
pharmacists dispensing them. However, it should be noted that the longstanding debate
was ended in Ciba-Geigy Canada Ltd. v. Apotex Inc.,
[I9921 3 S.C.R. 120, where the
Supreme Court concluded that the target clientele or the relevant universe in the
pharmaceutical field encompasses the patient. See also Eli Lilly and Co. v. Novopharm Ltd.
(1997), 73 C.P.R. (3d) 371 (F.C.T.D.), ffa armed (ZOOO), 10 C.P.R. (4th) 10 (F.C.A.), leave to
appeal denied, [2001] S.C.C. A. No. 100.
11.
Section 2 ( “confusing ”) of the Act states:
vol. 93 TMR
911
wares or services, not just the identical wares or services (so long,
of course, as confusion is found), and should therefore be used as
the basis for any infringement action. l2
Section 22 of the Act provides a further remedy in addition to
those available under sections 19 and 20. Section 22 is a separate
cause of action that prohibits the use of a registered trade-mark in
a manner that is likely to
“depreciate the value of the goodwill
”
attached to the mark. The phrase
“depreciating the value of the
goodwill ” has been interpreted as follows:
Then what is meant by “depreciate the value ” of such goodwill.
To my mind this means simply to reduce in some way the
advantage of the reputation and connection to which I have
just referred, to take away the whole or some portion of the
custom otherwise to be expected and to make it less extensive
and thus less advantageous. As I see it, goodwill has value
only to the extent of the advantage of the reputation and
connection which its owner enjoys and whatever reduces that
advantage reduces the value of it. Depreciation of that value in
my opinion occurs whether it arises through reduction of the
esteem in which the mark itself is held or through the direct
persuasion and enticing of customers who could otherwise be
expected to buy or continue to buy goods bearing the trade
mark.13
Section 22 was enacted in 1954 to ensure that a trade-mark
owner will be in a position to seek a remedy when a trade-mark is
used by another in such a manner as would not previously have
constituted grounds for an action in infringement or passing off,
but which has the effect of bringing the trade-mark into contempt
or disrepute. ‘4 Dr. Fox described section 22 as follows:
Such a cause of action can arise where there is no competition
between the wares or services involved or where the trade
mark is used not as an indication of origin but for a totally
different purpose as, for example, comparison. . . .
“confusing, ” when applied as an adjective to
a trade-mark or trade-name, means a
trade-mark or trade-name the use of which would cause confusion in the manner and
circumstances described in section 6.
12. See the Report of the Trade Mark Law Revision Committee (January 20, 1953) at
26 Ihereinafter Revision Committee]:
In Sections 19 and 20 we have provided that an action for infringement shall lie
against any person who sells, distributes or advertises any wares or services in
association with a registered trade mark or a confusing trade mark who is not entitled
to do so under the Act.
13. Clairol International Corp. v. Thomas Supply
& Equipment Co. (1968), 55 C.P.R.
176, [1968] 2 Ex. C.R. 552, 38 Fox Pat. C. 176 [hereinafter Clairol] at 200-01.
14.
See Revision Committee, supra n.12, at 26-27.
912
Vol. 93 TMR
The purpose of the 1953 statutory provision will thus be
plainly seen. If a well known trade mark is used by any person
other than the trade mark owner in a manner that would not
previously have constituted grounds for an action either for
infringement or for passing off but that has the effect of
bringing the trade mark into contempt or disrepute in the
public mind, the trade mark owner will be in a position to seek
a remedy. Thus, competition in trade disappears as the sole
measure of relief. . . .
The intention of the Act of 1953 is to accord to the court very
broad powers of discretion in deciding questions of
infringement. Any conduct likely to have the effect of
depreciating the goodwill attaching to a trade mark is a
matter left entirely to the discretion of the court and the Act of
1953 quite properly prescribes no rules for the exercise of the
discretion. The answer will depend upon the facts of each case
and the breadth of view brought to bear on modern
commercial questions by any judge called to interpret the
section.15
Thus, section 22 may be relied upon to prevent the unauthorized
use of a trade-mark, even where sections 19 and 20 are not
applicable.
III. THE CASE LAW
A review of the leading decisions under sections 19, 20 and 22
of the Act provides an understanding of how these provisions have
been interpreted and illustrates the shortcomings of the
traditional interpretation of the trade-mark infringement (and
enforcement) law.
Clairol16 is the seminal case that interprets sections 19 and 22
of the Act. In Clairol, Mr. Justice Thurlow thoroughly reviewed
sections 19 and 22 and outlined detailed tests for each of these
provisions. Almost thirty years later, in Cie
G&&r-ale des
Etablissements Michelin-Michelin & Cie v. C.A.W.-Canada,i7 the
Federal Court revisited Clairol in very detailed reasons, and
applied the section 19 test enunciated in that decision to section 20
of the Act.
Although Clairol and Michelin have been the subject of much
discussion, authors and courts alike often adopt the reasoning in
these cases without taking a step back and attempting to
15.
Canadian Law of Trade Marks, supra n.2, at 340-42.
16.
55 C.P.R. 176.
17. Cie G&&ale des Etablissements Michelin-Michelin
(1996), 71 C.P.R. (3d) 348, [I9971 2 F.C. 306 (F.C.T.D.).
& Cie v. C.A.W.-Canada
Vol. 93 TMR
913
understand the true meaning and purpose of the provisions. A
detailed review of these cases is necessary in order to understand
the need for a textual analysis in interpreting the infringement
provisions of the Act.
A. Clairol International Corp. v.
Thomas Supply & Equipment Co.
Clairol owned trade-marks for hair dye colours and a hair
tinting process. Revlon, Clairol ’s competitor in Canada, marketed
its wares under the trade-mark REVLON. Revlon depicted
Clairol’s hair dye trade-marks on the packages of its own hair
solutions in a chart comparing hair colours. The same comparison
chart was printed on separate advertising brochures. Clairol sued
for trade-mark infringement based on sections 19 and 22 of the
Act.
1. Section 19
Mr. Justice Thurlow held that to sustain an action under
section 19, Clairol first had to prove that Revlon had
“used” the
“trade-mark” as those terms are defined in sections 2 and 4 of the
Act. The term “use” is defined in section 2 of the Act to mean “any
use that by section 4 is deemed to be a use in association with
wares or services. ” Section 4 provides that to “use” a trade-mark
for both wares and services, the first required element is that the
infringing party used the mark “in association ” or in connection
with its own wares or services. Section 4 then outlines different
criteria for determining the association for wares and services.
Subsection 4(l) sets out the elements of proof for
“use in
association” with wares: (1) that the infringer transferred the
property or possession of his wares in the normal course of trade;
and (2) that notice of the association between the wares and the
plaintiffs marks was given to the person receiving the wares
either through the presence of the plaintiffs marks on the goods
themselves, on their packaging or by being in some other manner
associated with the wares. For services, the association with the
plaintiffs mark is more straightforward, because it is sufficient to
prove “use” of the trade-mark if it is (1) used or displayed in; (2)
the performance or advertising of the services.18
18. Act, supra n.1, subsection 4(2). In order to constitute
“use” in Canada, services
must be performed in Canada and the trade-mark must be used or displayed in the
performance or advertising in Canada of the services. Porter v. Don the Beachcomber,
[1966] Ex. C.R. 982, 33 Fox Pat. C. 79, 48 C.P.R. 280.
Vol. 93 TMR
914
(a) Hair Dye Packages
As previously mentioned, Mr. Justice Thurlow applied a
twopronged test for “use”:lg (1) use “in association with ”; and (2) use
“as a trade-mark. ” With respect to the first component, he held
that the mere presence of Clairol ’s marks on Revlon ’s hair dye
packages was sufficient to constitute a “use” of the trade-marks in
association with Revlon ’s wares. 20 He then went on to consider the
second component of “use,” namely, use “as a trade-mark”:
In all cases, however, a trade mark is defined by reference to
use for the purpose of distinguishing or so as to distinguish
wares or services whether of a particular origin or of a defined
standard, from others. When, therefore, section 19 provides
that the registration of a trade mark in respect of any wares or
services gives to the owner “the exclusive right to the use of
such trade mark throughout Canada in respect of such wares
or services ” what it appears to me to confer is the exclusive
right to the use of such mark in association with such wares or
services (within the meaning of ss. 2(v) and 4) for the purpose
of the trade mark or of a defined standard from others. A use
of the mark, in association with wares or services, within the
meaning of ss. 2(v) and 4, that is not
“for the purpose of
distinguishing or so as to distinguish ” the particular wares or
services from others is not, however, as I see it within the area
of the exclusive right conferred by s. 19.21
Mr. Justice Thurlow found that the marks were not used as
trade-marks for the purpose of identifying Revlon
’s wares with
Clairol’s trade-marks. Thus, there was no infringement under
section 19 by virtue of the defendants ’ use of Clairol ’s marks on
Revlon’s packages.22
Although Revlon used the trade-marks “in association with ”
its wares, the use made of them on the packages was not a use for
the purpose of distinguishing the wares as wares of Revlon. As a
19. Clairol, 55 C.P.R. at
190-94.
20. See id. at 190:
Pausing here it is I think apparent that the presence of the plaintiffs [or plaintiffs]
marks on the defendants ’ packages is a use of those marks “in association with ” the
wares in the defendants ’packages within the meaning of section 4(l) because, and as
I see it, simply because it is marked on the packages.
21. Id. at 192.
22. See id. at 194:
[I]t is, I think, abundantly clear from looking at the packages that the marks,
Miss
Clairol and Hair Color Bath, are not intended to indicate and do not indicate to
anyone that the contents of the package are the defendants ’goods. Nor do I think it
likely that any prospective purchaser of a package of these wares would be likely to be
deceived by the presence of the marks, Miss
Clairol and Hair Color Bath as they
appear on the package, into thinking they were intended to indicate the origin of the
goods in the package.
Vol. 93 TMR
915
result, Revlon’s particular use of the trade-marks on the packages
was not a use, the exclusive right to which had been conferred on
Clairol by section 19.
(b) Advertising Brochures
In addition, Mr. Justice Thurlow found that there had been no
use “in association with” the advertising brochures:
[TJhe presence of the plaintiffs ’ marks on the comparative
shade charts of the defendants ’brochures is not a use of such
marks within the meaning of s. 4(l) since the brochures are
neither the wares themselves nor the packages in which the
wares are distributed and nothing that I would regard as
notice to any person purchasing the defendants ’wares of any
association of the plaintiffs ’marks with those wares, so far as
I am aware, ever occurs in any use to which the brochure or its
chart can be put at the time of the transfer of the property or
possession of the defendants’goods to their purchaser.23
Because the brochures were not the wares of Revlon itself, they did
not provide a means for Revlon to give notice of the association
between Clairol ’s marks and Revlon
’s wares to the persons
receiving the wares. 24 Given that there had been no use
“in
association with, ” the first prong of the test under the section 4
criteria, Mr. Justice Thurlow did not consider whether the marks
on the advertising brochures had been used “as trade-marks,” the
second prong of the test under section 19. As a result, Mr. Justice
Thurlow concluded that Clairol’s case based on section 19 failed.
2. Section 22
The other ground advanced by Clairol was that Revlon was
using Clairol’s trade-marks in a manner likely to have the effect of
depreciating the value of the goodwill associated with the marks,
contrary to subsection 22(l) of the Act. Mr. Justice Thurlow again
interpreted, the verb “use” in section 22 by reference to the
definition of “use” in section 2 of the Act. Mr. Justice Thurlow
concluded, for the reasons mentioned above, that the presence of
Clairol ’s trade-marks on Revlon
’s packages was within the
meaning of “use” in subsection 22(l), but that their presence in
Revlon’s brochures was not.
The Court went on to consider whether the use of the
plaintiffs’marks on Revlon ’s packages was use in a manner likely
to depreciate the value of the goodwill attaching to Clairol ’s marks.
Mr. Justice Thurlow found that there was a substantial body of
goodwill attached to Clairol ’s trade-marks and that the use made
23. Id. at 190.
24. Id. at 191.
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Vol. 93 TMR
by the defendants of Clairol ’s trade-marks on Revlon ’s packages
was use of them in a manner likely to depreciate the value of the
goodwill, contrary to subsection 22(l) of the Act:
The defendants have both of these trade marks on the
packages in which their wares are distributed and are thus
using the marks in association with their wares within the
meaning of s. 4. They do this for the purpose of facilitating
persons familiar with the plaintiffs’products to switch to using
their products. . . . That this is a course of conduct which
would be likely to depreciate the goodwill attaching to the
plaintiffs’ marks is, I think, obvious but even that is made
overwhelmingly clear by the fact that of all the persons
competing in the hair
colour trade it is only the plaintiffs
whose marks are used in the comparison charts on the
defendants’ packages, . . . When parties have done what is
complained of for the express purpose of taking away custom
enjoyed by competitors and persist in it I see no reason to
doubt that they are succeeding in their purpose.25
Thus, the marks were used to convince purchasers to switch from
of Clairol to wares of Revlon, thereby
purchasing wares
depreciating the value of the goodwill of Clairol in the registered
marks. Clairol was granted an injunction restraining Revlon from
using the trade-marks MISS CLAIROL and HAIR COLOR BATH
on its packages. Clairol was also awarded damages or an account
of profits in respect of such use.
B. Cie Gbnkrale des Etablissements Michelin-Michelin &
Cie v. C.A. W.-Canada
Michelinz6 is another leading case in the interpretation of
sections 19, 20 and 22 of the Act.
27 Michelin, the plaintiff tire
manufacturer, sued the defendant C.A.W. for trade-mark
infringement, depreciation of goodwill in its trade-marks and
copyright infringement.
C.A.W. conducted a campaign to unionize workers at three tire
plants of Michelin ’s Canadian subsidiary. In the course of the
union campaign, C.A.W. distributed pamphlets that reproduced
the term MICHELIN, which was a registered trade-mark of
Michelin. It also displayed Michelin ’s corporate logo and registered
trade-mark, BIBENDUM, a marshmallow-like figure, in the
pamphlets. C.A.W. made a modified version of the BIBENDUM
design in which the figure was standing ready to crush underfoot a
25. Id. at 202.
26. Michelin, 71 C.P.R.
(3d) 348.
27. For a detailed discussion of Michelin, see B. Gamache,
“Union Display of
Employer ’s Mark Does not Constitute ‘Use’of Mark ” (1997) 11 W.I.P.R. 40-42.
vol. 93 TMR
917
Michelin worker. Michelin alleged that C.A.W.‘s use of Michelin ’s
registered trade-marks constituted infringement and depreciation
of the value of the goodwill in its trade-marks, contrary to the
provisions of the Act.28
The main issue before the Court was whether C.A.W.
infringed Michelin
’s trade-marks when it depicted th
e
BIBENDUM design and used the term MICHELIN on its
unionization leaflets and information bulletins. The narrower
question was the status and validity of the Clairol decision.
1. The Two Components of Use
Under Sections 19 and 20
Michelin argued against the decision in Clairol by highlighting
the fact that section 20 does not make reference to the infringer ’s
“use” of the trade-mark. However, Mr. Justice Teitelbaum declined
at the outset to overrule and rewrite Clairol. He agreed with
C.A.W. that the traditional interpretation of “use” first elucidated
in Clairol for sections 2029 and 22 was still the law:
Section 20 was not explicitly argued in Clairol, but Justice
Thurlow’s ruling on the meaning of “use” under Section 19 also
encompasses how “use” is to be understood in relation to
Section 20 since both Section 19 and Section 20 focus on the
scope of the registered owner
’s rights. Section 22 also
addresses infringement, but it is not in explicit reference to
the owner ’s right of exclusive use. Rather, the emphasis in
Section 22 is on the infringer ’s own use in a manner likely to
depreciate the goodwill associated with the mark.30
After reviewing Mr. Justice Thurlow ’s decision in Clairol and
sections 2 and 4 of the Act, Mr. Justice Teitelbaum concluded that
there are seemingly more strenuous elements of proof for
“use in
association” with wares, as compared to “use in association ” with
services.31 Mr. Justice Teitelbaum stated:
I am satisfied that the classic Clairol analysis of use under
Section 20 is still good law. The test for
“use” in Section 20
requires two separate elements of proof from both Section 2
and Section 4. In effect, the first element taken from Section 4
is: (1) did the Defendants associate their services with the
Plaintiffs trademarks? The second element from Section 2 is:
(2) did the Defendants use the mark as a trade-mark for the
28. Michelin had originally pleaded sections 19, 20 and 22 of the Act, but confined its
oral argument to sections 20 and 22.
29. Note, however, that Mr. Justice Thurlow, in Clairol, did not formally consider
section 20.
30. Michelin, 71 C.P.R. (3d) at 359.
31. Id. at 360.
918
Vol. 93 TMR
purpose of distinguishing or identifying the Defendants
’
services in connection with the Plaintiffs wares or services?32
Thus, as per Clairol, to “use” a trade-mark, the defendant must
use it in association with its own goods or services. For there to be
use “as a trade-mark, ” the defendant must additionally use the
plaintiffs mark for the purpose of identifying the defendant ’s own
goods or services as originating with itself.33
The Court found that C.A.W. did not use the MICHELIN or
BIBENDUM trade-marks in association with any goods because
such use must be in the ordinary course of trade and the Court
held that distributing pamphlets to recruit union members does
not qualify as commercial activity for this purpose. The Act
provides that a trade-mark is deemed to be used in association
with services if it is used or displayed in the performance or
advertising of those services.
The Court held that
C.A.W.‘s
distribution of pamphlets did not qualify as “advertising” because
advertising has a commercial connotation not present in the act of
recruiting union members.
The Court further held that there was no use of Michelin
’s
marks “as a trade-mark ” by C.A.W. BIBENDUM was used as a
campaigning tool, rather than as a trade-mark, and was not used
to identify C.A.W.‘s activities with Michelin ’s trade-marks. There
was no use of the trade-mark MICHELIN because C.A.W. was
using it as an abbreviated reference to Michelin ’s corporate name,
and not to suggest that the plaintiff was the originator of the
pamphlets.
2. The Single Component of Use Under Section 22
In Clairol, Mr. Justice Thurlow held that section 22, in
contrast to section 20, only requires proof of use
“in association
with wares or services ” under the specific section 4 criteria.34 The
plaintiff is not required under section 22 to prove the additional
32. Id. at 360 [emphasis added].
33. See id. at 359, where Mr. Justice Teitelbaum explained use “as a trade-mark ”:
To qualify as “use as a trademark, ” therefore, the mark must be used for the purpose
of identifying or pinpointing the source of the goods and services. In other words, to
use a mark as a trademark, the person who used the mark on the goods or in
connection with the services must have intended the marks to indicate the origin of
the goods or services.
34. See Clairol, 55 C.P.R. at 195.96:
Rather I think the verb “use” in s. 22 is to be interpreted by reference to the definition
of the noun “use” in s. 2(v) the effect of which is to confine the application, and
therefore the prohibition, of s. 22 to a use which any person may make, in association
with goods or services, within the meaning of sections (sic) of s. 4 of another
’s
registered trade mark in such a manner as to depreciate the value of the goodwill
attaching thereto.
Vol. 93 TMR
919
element of use of the mark “as a trade-mark ” for the purpose of
distinguishing wares or services.
The plaintiff in Michelin argued that the explicit reference to
“use” in section 22 should be expanded beyond Mr. Justice
Thurlow’s interpretation in Clairol and that for section 22 to make
sense within the infringement provisions of the Act, it must
address cases such as those in Michelin. According to Michelin,
although C.A.W.‘s activities did not strictly constitute “use” of the
trade-marks in association with wares and services, the activities
of C.A.W. were still likely to depreciate the goodwill of Michelin ’s
marks. Michelin urged the Court to go beyond the rigorous section
4 criteria for “use in association ” with wares and services, so that
activities likely to depreciate the goodwill of a trade-mark did not
escape censure.35
Mr. Justice Teitelbaum rejected the plaintiffs interpretation
and reiterated that “use” is the foundation of sections 19, 20 and
22 as grounds for infringement. The secondary elements for each
ground, once the primary “use” has been established, however, are
quite different. Section 19 requires use of the identical mark for
identical wares and/or services, while section 20 requires that the
mark need only be “confusing” with the registered mark. Section
22 is even more open-ended, because the mark need not be
confusing36 so long as its use is likely to depreciate the value of the
goodwill. According to this interpretation, the grounds for
infringement move from their narrowest in section 19 to their most
expansive in section 22, but “use” remains the basic building block
for all of the grounds.37
For the reasons mentioned above, Mr. Justice Teitelbaum
found that C.A.W.‘s actions did not fall within the ambit of “use” of
marks “in association with ” wares or services under sections 20 or
22 of the Act. The Court went on to state that even if it had
determined that C.A.W. had used the trade-marks in association
with wares or services, Michelin would have failed to meet the
35.
Michelin, 71 C.P.R. (3d) at 363. This view is further discussed below.
36. However,
in the recent Federal Court of Canada decision, Veuve Clicquot
Ponsardin v. Boutique Cliquot Ltee., [2003] A.C.F. no. 148 (QL), the Federal Court stated
that while confusion is not the test presented in section 22, the Court was of the opinion
that confusion is nevertheless necessary in order for there to be an association between two
marks. In other words, a consumer must be capable of drawing an association between the
parties for depreciation to occur.
If the Court in Cliquot is attempting to graft a confusion test onto section 22, then the
authors disagree with the analysis. However, it appears that the Court moves away from
“confusion, ” in the strict sense, and adopts the notion of an
“association between the
parties.” It is unclear what the Court intended here. As can be seen in the authors ’proposed
interpretation of section 22, infra, we advocate that section 22 requires proof that the
plaintiffs mark was “used” as a “trade-mark.” While unclear, it could be that the Court
’s
reference to an “association between the marks ” is intended to refer to a defendant ’s “use” of
a plaintiffs trade-mark as a “trade-mark.”
37. Michelin, 71 C.P.R. (3d) at 364.
920
Vol. 93 TMR
section 20 requirements, because that section also requires proof of
use of the mark “as a trade-mark. ” His Lordship accepted C.A.W.‘s
submission that they were not using the BIBENDUM design or the
term MICHELIN as trade-marks to indicate that Michelin was the
source of the pamphlets and leaflets.
Because Michelin failed to establish that C.A.W. used its
trade-marks, the threshold question in sections 20 and 22, Mr.
Justice Teitelbaum chose not to dwell on the secondary elements of
each ground of infringement. 38 Mr. Justice Teitelbaum did state,
’s novel
however, that even if he had accepted Michelin
interpretation and dispensed with the need to establish
“use”
under section 20 or expanded the meaning of
“use” beyond the
section 4 criteria in section 22, Michelin would have failed on the
secondary components of each ground of infringement.3g
IV. A PROPOSED INTERPRETATION OF
SECTIONS 19,20 AND 22
The above review of Clairol and Michelin illustrates the
traditional interpretation of sections 19, 20 and 22. As previously
mentioned, however, the tests applied by the courts often conflict
with the language of the Act and can occasionally lead to strange
results.
In order to understand the true meaning and purpose of the
Act’s infringement (and enforcement) scheme, it is necessary to
temporarily set aside the jurisprudence and return to the language
of the Act. In the authors ’view, an examination of each provision
reveals its purpose and demonstrates how each of the three
sections complements, and builds upon, the others.
A. Section 19
Although the courts have traditionally interpreted section 19
as providing a basis for an infringement action, as previously
mentioned, the provision is a declaratory one that should not be
used as a statutory cause of action. For the reasons mentioned
above, the substantially broader section 20 should subsume what
have traditionally been considered section 19 actions.
38. Recall that the secondary question in section 20 is whether the mark used was
“confusing, ” and in section 22, whether the use was likely to depreciate the goodwill of the
trade-mark.
39. Although Mr. Justice Teitelbaum ruled that C.A.W. did not infringe Michelin
trade-marks, the Court went on to find that C.A.W. had infringed Michelin ’s copyright.
’s
921
vol. 93 TMR
B. Section 20
1. Problem With the Traditional Interpretation
20(l) is a generous
As previously mentioned, subsection
deeming provision whereby any person who sells, distributes or
advertises wares or services in association with a confusing mark
is deemed to have infringed the right declared by section 19 to
belong exclusively to the registered trade-mark owner. Contrary to
the test enunciated by the Court in Michelin,40 subsection 20(l), in
describing activities that are proscribed, makes no reference to the
infringer’s actual “use” of a registered mark, as that term has been
defined in the Act and subsequently interpreted:
The right of the owner of a registered trade-mark to its
exclusive use shall be deemed to be infringed by a person not
entitled to its use under this Act who
sells, distributes or
advertises wares or services in association with a confusing
trade-mark or trade-name. . . .4*
The plaintiff in Michelin argued against the application of Mr.
Justice Thurlow ’s test from Clairol. According to the plaintiff,
section 20 creates a presumption that the registered owner
’s
exclusive right is infringed where the selling, distributing or
advertising of wares or services in association with a confusing
trade-mark has occurred. Mr. Justice Teitelbaum rejected this
argument and accepted the classic Clairol two-part test, namely:
(1) did C.A.W. associate its wares or services with Michelin ’s trademarks; and (2) did C.A.W. use the mark as a trade-mark for the
purpose of distinguishing or identifying C.A.W.‘s wares or services?
Mr. Justice Teitelbaum thus concluded that the requirement of
“use” under section 20 is designed so that not all uses of trademarks belonging to another person are caught within the threads
of these infringement provisions:
The Plaintiff submitted that in the present case, Section 20
does not require proof of use. In effect, the Plaintiff denied the
validity of Justice Thurlow ’s ruling that there is an implicit
but crucial additional requirement under Section
2042 to first
prove “use” by the Defendants of the Plaintiffs trademarks.
With respect, I cannot agree with the Plaintiffs contention
40. Many cases following Michelin have confirmed the approach that section 20 claims
are limited to instances where the trade-mark is “used” within section 4. See, e.g., Coca-Cola
Ltd. v. Pardhan (1999), 85 C.P.R. (3d) 489 (F.C.A.), leave to appeal to S.C.C. denied,
[1999]
S.C.C.A. No. 338; Pepper King Ltd. v.
Sunfresh Ltd. (2000), 8 C.P.R. (4th) 485 (F.C.T.D.);
and Pro-C Ltd. v. Computer City Inc. (2001), 14 C.P.R. (4th) 441 (Ont. C.A.), leave to appeal
to S.C.C. denied, [2002] S.C.C.A. No. 5.
41. Act, supra n.1, subsection 20(l) [emphasis added].
42. However, note again that in Clairol, the Court did not consider section 20 of the
Act.
922
Vol. 93 TMR
that its novel interpretation should triumph over the holding
in Clairol simply because it obviates the need for any reference
to “use” and thereby avoids the two required elements of proof
under Section 20. Much as we might wish to sometimes do
away with the more complicated aspects of the term “use,” this
seemingly straightforward term has been qualified and given a
particular meaning by the framers of the Trade-marks Act and
the jurisprudence. In Clairol, at page 195, Justice Thurlow
was conscious of the need to craft a test for use that would not
encompass certain “common instances of the use of trade
marks in the course of trading
” such as comparative
advertisements like the colour comparison charts in Clairol. If
we imagine for an instant that the statutory definitions of
“use” as interpreted by Clairol is a net to capture acts of
infringement, the merit of Justice Thurlow
’s approach is
apparent. The net or meaning of “use” is designed so that not
all users of trademarks belonging to another person are
caught within the threads of the infringement provisions.43
In the authors ’ opinion, this interpretation of section 20 in
Michelin is flawed. First, the Court in Michelin explicitly ignored
the language of section 20, which deems a trade-mark owner
’s
rights to be infringed by a person who
sells, distributes or
advertises wares or services in association with a confusing trademark or trade-name. Section 20, in describing the activities of an
infringer that are proscribed, does not do so by reference to the
word “use.” The test applied by the courts therefore contravenes
recognized rules of statutory interpretation.
In analyzing
legislative texts, the same words must be given the same
meaning.44 In light of this principle, and the legislature
’s
preference for uniform expression, it follows that different words
appearing in the same statute should be given different
meanings.45 If the legislature intended to require a trade-mark
owner to prove “use” under section 20, it would have used the term
“use” in describing proscribed activities and not “sells, distributes
or advertises. ” In addition, the contextual analysis rule of
statutory interpretation instructs interpreters to read the
legislation in context,
including the rest of the Act.46 An
interpretation that is consistent with the context is preferred over
one that is not. An interpretation of section 20 that requires proof
of technical “use” by an infringer, even though the plain words of
section 20 do not, is inconsistent with the Act. This view is
43. Michelin, 71 C.P.R. (3d) at 361-62.
44. R. v. Zeolkowski, [1989] 1 S.C.R. 1378 at 1387.
45. R. Sullivan, Statutory Interpretation (Concord: Irwin Law, 1997) at 69
Statutory Interpretation].
46.
Id. at 28.
hereinafter
Vol. 93 TMR
923
supported by comparing section 20 to section 22, a related
provision, which explicitly refers to
“use ” in describing the
activities an infringer is prohibited from undertaking.
Second, the Court ’s reason in Michelin for interpreting section
20 to require technical “use” was to craft a test for use that would
not encompass certain
“common instances of the use of trade
the course of trading,
” such as comparative
marks in
advertisements. In so doing, the Court in Michelin attempted to
incorporate “checks and balances ” into section 20 that are already
built into the Act. In section 20, for example, while the plaintiff
need not show technical
“use” it must show that the defendant
sold, distributed or advertised wares or services in association with
a confusing trade-mark. Similarly, in section 22, while the plaintiff
need not show confusion, it must prove technical
“use.” Thus, the
provisions contain their own checks and balances, and it was
unnecessary for the Court to graft onto section 20 further checks
and balances related to the meaning of “use.”
In this regard,
as mentioned, the Court made specific
reference to the need to permit common activities such as
comparative advertisements. However, as drafted, section 20 ought
not to proscribe all comparative advertisements, given that to
sustain an action under section 20, the selling, distributing or
advertising by the defendant must be for the purpose of
distinguishing the defendant ’s own goods, which man
y
comparative advertisements do
not.47 Specifically, there was no
need to craft a more stringent test, which is not supported by the
language of the Act, since the acts that Mr. Justice Teitelbaum
was trying to exclude from the ambit of section 20 were already
distribution or
excluded by the need to prove the sale,
advertisement of wares or services in association with a
“confusing
trade-mark. ”
The Court ’s imposition of a higher burden on Michelin is
addressed in the editorial comment to section 20 of the Canadian
Trade-marks Act-Annotated. According to the Comment,
“Subsection 20(l) should be interpreted as a considerable advantage being granted by Parliament to the owner of a registered
trade-mark who should not have to prove an unauthorized
‘use of a
trade-mark ’ by a third party in order to be successful in an
infringement action. ”The owner should only have to prove that the
“defendant ‘sells, distributes or advertises wares or services in
association with a confusing trade-mark or trade-name
’ which a
fortiori should include the identical trade-mark.
” The Comment
further states:
47. D.R. Bereskin, Trade-marks Law of Canada, ed. by G.F. Henderson (Scarborough:
Carswell, 1993) at 110 hereinafter Trade-marks Law].
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Vol. 93 TMR
This interpretation of subsection 20(l) would avoid having to
discuss the meaning of “use as a trade-mark ” as it was done,
in a very unsatisfactory manner, in the Clairol case (supra). It
also would recognize that a person can be a trade-mark
“using any trade-mark ” as defined in
infringer without
sections 2 and 4 of the Act.48
This conflict between the language and the traditional
interpretation of the statutory provision creates inconsistencies in
the law and difficulties for practitioners when advising clients. In
short, although the statutory language of section 20 does not make
reference to “use” of a trade-mark (at least in describing the
infringer’s activities), to the apparent benefit of the plaintiff in an
Michelin has effectively removed this
infringement action,
advantage by requiring the plaintiff to show such “use.”
2. Proper Interpretation of Section 20
20(l)
In the authors ’ opinion, the language of subsection
simply requires a plaintiff to show that a defendant
“sells,
distributes or advertises ” wares in association with a “confusing”
mark. Thus, for example, a defendant would be deemed to infringe
the rights of a trade-mark owner if it advertised wares in
association with a confusing trade-mark, even though the
advertising of wares does not constitute
“use” of a trade-mark
pursuant to section 4. However, under the traditional
interpretation, because advertising of wares in association with a
confusing trade-mark would not constitute “use,“4g there would be
no deemed infringement.sO
C. Section 22
1. Problem With the Traditional Interpretation
Section 22 provides that no person shall use a registered trademark in a manner that is likely to depreciate the value of the
48. Robic-Leger, Canadian Trade Marks Act-Annotated, H.G. Richard, ed. (Toronto:
Carswell, 2002-Release 5) at 20-4C.
49. Note, however, that advertising of services, coupled with performance of those
services in Canada, would constitute “use.”
50. In Pro-C Ltd. v. Computer City Inc.
(2001), 14 C.P.R. (4th) 441 (Ont.
C.A.), the
Ontario Court of Appeal acknowledged, at paragraph 12, the different treatment of wares
and services:
Infringement under [section 201 is dependent upon “use” of the registered mark. In
normal parlance the word “use” is very broad and would include advertising on the
Computer City website. Under the Act this is the case for services but, importantly,
not for wares.
The Court found that Computer City
’s passive website could not constitute
“use in
association with ” wares, pursuant to section 4, because no transfer of ownership was
possible through that medium.
Vol. 93 TMR
925
goodwill attached to the mark. Unlike with section 20, here there
is no reason not to interpret the term
“use” in section 22 in
accordance with the meaning given to it in sections 2 and 4 of the
Act. However, under the traditional interpretation, while technical
“use” under sections 2 and 4 is necessary, use as a “trade-mark” for
the purpose of distinguishing does not need to be proved.51 In this
regard, Dr. Fox, in Canadian Law of Trade Marks, remarks that
“the word ‘use’ also appears in section 22 and if that word, as
defined [in the Act], is to control the application of section 19, it
would seem logical that it ought also to control the application of
section 22.“52
Like the test applied by the courts for section 20, the test for
section 22 is not consistent with recognized rules of statutory
interpretation. As previously mentioned, the same words must be
given the same meaning when analysing legislative
texts,53 and
interpreted within the context of the Act as a whole. In this regard,
the courts ’ interpretation of the term
“use” in section 22 is
inconsistent with the related provisions and the Act as a whole.
The courts have found that “use” under section 22 requires
only the first component of “use,” namely use “in association with ”
and not the second component, use “as a trade-mark.” The result of
this interpretation is that there would be no violation of section 22
if a trade-mark registered for wares were used in comparative
advertising (because advertising of wares, as has been shown, is
not use “in association with”), but section 22 might be violated if a
trade-mark registered for services were used. There is no good
policy reason for this distinction in the context of an action for
depreciation of goodwill. David Vaver explains the problem in
Intellectual Property Law:
A trade-mark associated with goods is not legally “used” when
appearing in promotional fliers or the broadcast media. In law,
the mark is “used” only at point of sale or change of possession
of the goods:
that is, on the goods themselves or their
packaging, on stands where the goods are shelved, or perhaps
in in-store catalogues. So Revlon, though forbidden to put
CLAIROL marks on its product packaging, could carry them
in comparative advertising in fliers or on television.
51. This is the second prong of the test set out by Mr. Justice Thurlow in Clairol to
establish “use ” for the purposes of a section 19 infringement, under the traditional
interpretation. Under the traditional interpretation of either sections 19 or 20, the
“use”
that must be proved for infringement must be a use
for the purpose of distinguishing the
defendant’s own goods (i.e., use as a “trade-mark ”). We agree with this second prong of the
traditional interpretation, but not the first requirement of technical “use” under section 20.
52.
Canadian Law of Trade Marks, supra n.2, at 334-35.
53. Statutory Interpretation, supra n.45.
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Vol. 93 TMR
Comparative advertising carrying a mark associated with
services is nevertheless not allowed because it technically
qualifies as “use.“54
Madam Justice Reed found this distinction
“somewhat bizarre ” in
Eye Masters Ltd. v. Ross King Holdings Ltd.55 The plaintiff in Eye
Masters had argued that Clairol stood for the principle that the
scope of protection conferred on trade-marks associated with
services is broader than the protection afforded to trade-marks
associated with wares. Others have agreed with Madam Justice
Reed:
One problem with the logic of the Clairol case is that although
there would be no violation of section 22 if a trade-mark
registered for wares were used in comparative advertising, it
would be a violation of section 22 if a trade-mark registered for
services were used in comparative advertising. Madame
Justice Reed found such a conclusion “somewhat bizarre ”; this
author respectfully agrees.56
It should be noted that Mr. Justice Teitelbaum took the
opportunity, in Michelin, to respond to Madam Justice Reed
’s
reasoning in Eye
Masters. 57 Nevertheless, courts continue to
struggle with section 22.58
54. D. Vaver, Intellectual Property Law: Copyright, Patents, Trade-marks (Concord:
Irwin Law, 1997) at 218 [footnotes omitted] [hereinafter Intellectual Property Law].
55.
at 463.
56.
Eye Masters Ltd. v. Ross King Holdings Ltd. (1992). 44 C.P.R. (3d) 459 (F.C.T.D.)
Trade-marks Law, supra n.47, at 110 [footnotes omitted]
57. Michelin, 71 C.P.R. (3d) at 364-65:
This reference to Clairol in Eye Masters by no means indicates that Justice Reed
overruled Clairol. Since Eye Masters arose out of a motion for an interlocutory
injunction, Justice Reed only analyzed the plaintiffs submission as a possible
interpretation of Clairol to see if it raised a sufficiently serious issue for the purposes
of the injunction. Unfortunately, in analyzing the plaintiffs submission in Eye
Masters, Justice Reed mischaracterized at page 462 of her decision Justice Thurlow
holding in Clairol:
’s
The argument that the scope of protection afforded to trade-marks which are
associated with services is broader than that accorded to those associated with
wares is based on the decision in Clairol International Corporation v. Thomas
Supply & Equipment Co., [1968] 2 Ex. C.R. 552. That decision held that
colour
comparison charts, which referred to a competitor
’s trade mark, whenaffued to a
packaged hair dye was an infringement of the exclusive right to use granted by
Section 19 of the Act.
Justice Thurlow had actually decided that the packages did
not offend Section 19
because the defendants in that case had not used the plaintiffs marks
“as
trademarks ” for the purposes of distinguishing their wares in connection with the
plaintiffs marks. I also take issue with the soundness of the plaintiffs submission in
Eye Masters about the ostensible greater scope of protection afforded to trademarks
used in association with services. In Future Shop Ltd. v. A. & B. Sound Ltd. (1994), 55
C.P.R. (3d) 182 [hereinafter
“Future Shop ”], Justice MacKenzie of the British
Columbia Supreme Court at page 188 expressed similar doubts that Clairol truly
supports the decision in Eye Masters:
vol. 93 TMR
927
2. Proper Interpretation of Section 22
debate.5g
Section 22 has clearly been the subject of much
provision
However, applying textual analysis and reading the
complete
together with sections 19 and 20 reveals a clear and
scheme of protection for trade-mark owners. Section 19 declares
the exclusive right of the trade-mark owner, while sections 20 and
22 are complementary causes of action.60 A trade-mark owner can
bring an action under section 22 where its trade mark is being
“used” as a “trade-mark,” but not necessarily in a confusing
manner. G1 A trade-mark owner can also bring an action under
With respect, I do not think that distinction between wares and services is
supported by Thurlow J.‘s reasons in Clairol. His illustration of the shop counter
price poster involved a price comparison analogous to the Eye Masters ad, or the
A. & B. Sound ads which stress retail pricing and price comparisons in its use of
the FUTURE SHOP trademark. In my view, the Clairol decision supports the
position of A. & B. Sound that their fair and accurate comparative price ads do not
offend s. 22(l) of the Trade-marks Act. I respectfully disagree that Clairol
supports the decision in Eye Masters.
In any event, my purpose in raising the Eye Masters case is not to exhaustively
dispute its merits. Rather, I have referred to Eye Masters to demonstrate that even
the sole judicial authority cited by the Plaintiff is hardly conclusive on the necessity of
the Plaintiffs novel interpretation of Section 20 and Section 22 of the Trade-marks
Act. Indeed, Justice Thurlow ’s decision in Clairol on the proper interpretation of
Section 20 and Section 22 of the Trade-marks Act has been cited with approval and
applied by numerous courts, including the Federal Court of Appeal in Syntex Inc. v.
Apotex Inc. (1984), l.C.P.R. (3d) 145 (F.C.A). However, as Justice MacKenzie noted in
Future Shop, (supra), at page 188, Clairol has yet to be definitively interpreted by an
appellate court.
58. For example, in Aetna Life and Casualty Co. v. Captain Normac Riverboat Inn Ltd.
(1982), 62 C.P.R. (2d) 16 (Ont. H.C.) at 19, Mr. Justice Reid stated:
Section 22(l) is, comparatively speaking, recent legislation. Its exact meaning and the
limits of its operation are yet to be settled. It may reasonably be asked whether the
word “use” in the section confines it to a certain type of use only.
Similarly, Mr. Justice MacKenzie observed in Future Shop Ltd.
v. A. & B. Sound Ltd.
(1994), 55 C.P.R. (3d) 182 (B.C.S.C.) at 188-89, that section 22 is a unique provision capable
of substantially divergent interpretation:
In so far as I am aware, it has not been definitively interpreted by an appellate court
in Canada. The broad construction pressed by Future Shop would preclude
comparative price ads of a type that are commonplace in contemporary retail
advertising of price-sensitive products, among grocery stores for example. For that
reason, I share the reservations of the merits of a broad interpretation of s. 22
expressed by Thurlow and Reed JJ. I doubt that an expansive interpretation will
ultimately prevail. But at the present state of the evolution of the jurisprudence, I
cannot say that the position advanced by Future Shop is untenable.
59. For a detailed analysis of section 22, see F. Guay,
“Pour en finir avec l ’affaire
Clairol: l ’article 22 de la
Loi sur les marques de commerce
previent-il la publicite
comparative? ” (Janv. 1999) 11 Cahiers prop. intel. 441-524 [hereinafter
“To finish with
Clairol ”].
60. Section 22 requires technical use, while section 20 does not. Section 20 requires
confusion, while section 22 simply requires the depreciation of goodwill (i.e., the defendant
use need not be a confusing one).
61. See our discussion of Cliquot, supra n.36. It should be noted that the United States
Federal Trademark Dilution Act, supra n.3, defines the term “dilution” as follows:
’s
’
Vol. 93 TMR
928
section 20 where there is no technical
“use,” but the sales,
distribution or advertisements by the alleged infringer must be in
a confusing manner. When viewed as such, Parliament ’s intentions
are clear. Each section builds on the other, and addresses different
aspects of the potential misappropriation of the registered owner ’s
rights.
A review of the provision reveals that Mr. Justices Thurlow
and Teitelbaum were bound by section 22 itself to require use “in
association with” wares and services according to sections 2 and 4
of the Act.62 However, again referring to the language of the
provision, “use” in section 22 should also require use “as a trademark” (i.e., for the purpose of distinguishing). According to one
author:
The problem is the distinction drawn by Thurlow J. that a
“use” might be within section 4(l) for the purposes of section
22, but would not be a
“use” for the purposes of section 19
unless it was a “use” for the purpose of distinguishing. In other
words, in his view the definition of “trade-mark” (requiring use
for the purpose of distinguishing) applies to section 19 but not
to section 4(l), even though the word “trade-mark” appears in
both sections. According to Thurlow J.‘s view, the purpose for
which the trade-mark is used is irrelevant in determining
“use” under section 4(l), but is highly relevant in determining
infringement under section 19. This analysis is puzzling,
because it amounts to saying that the word “use” in section 19
means one thing, and in section 4(l) “use” means something
else. This is so despite the fact that “use” is defined in section
2, and logically, the same definition should apply throughout
the Act.
the purpose of
In the author
’s view, only a use for
distinguishing can constitute a violation of either section 19 or
22. _ . . Another problem with Clairol is that it
’s hard to see
why comparative advertising should be permissible, but a
similar message on the package should not.63
The term “dilution” means the lessening of the capacity of a famous mark to identify
and distinguish goods or services, regardless of the presence or absence of(1) competition between the owner of the famous mark and other parties, or
(2) likelihood of confusion, mistake, or deception.
15 U.S.C. 5 1127.
62. Many cases following Clairol have confirmed the approach that section 22 claims
are limited to instances where the trade-mark is “used” within section 4. See, e.g., Coca-Cola
Ltd. v. Pardhan (1999), 85 C.P.R. (3d) 489 (F.C.A.), leave to appeal to S.C.C. denied,
[1999]
S.C.C.A. No. 338; Syntex Inc. v. Apotex Inc.
(1984) 1 C.P.R. (3d) 145 (F.C.A.); and British
Columbia Automobile Assn. v. Office and Professional Employees ’International Union Local
378 (2001), 10 C.P.R. (4th) 423 (B.C.S.C.).
63. Trade-marks Law, supra n.47, at 110-I 1 [footnotes omitted]
Vol. 93 TMR
929
The author concludes that, if his view is correct, it would
follow that Clairol was wrongly decided. The use of the Clairol
marks on packaging should not have been a violation of section 22,
because it was not a use for the purpose of distinguishing.
According to the author, section 22 might have application to
parody and dilution situations, but not to comparative advertising,
whether the message appears in advertising or on the packages
themselves.64
The need to prove use “as a trade-mark ” in subsection 22(l) is
supported by the language of the Act. Subsection 22(l) states that
“no person shall use a trade-mark ” in a certain manner. “Use” is
defined in section 2 of the Act only in relation to a trade-mark,
which is a mark that is used by a person
for the purpose of
distinguishing. Although there is only one definition of “use” in the
Act, Mr. Justice Thurlow has applied one definition under sections
19 and 20 and another under section 22. The rules of statutory
interpretation suggest that this method of analysis is incorrect.65
The need to prove use “as a trade-mark ” is further supported
by subsection 22(2). Subsection 22(2) permits the court to decline
to order the recovery of damages or profits and to allow the
defendant to continue to sell offending wares that were in his
possession or under his control at the time notice was given that
the owner of the trade-mark complained of the use of the
mark.66
Subsection 22(2) specifically refers to “use of a trade-mark”:
(2) In any action in respect of a use of a trade-mark contrary to
subsection (l), the court may decline to order the recovery of
damages or profits and may permit the defendant to continue
to sell wares marked with the trade-mark that were in his
possession or under his control at the time notice was given to
him that the owner of the registered trade-mark complained of
the use of the trade-mark. [Emphasis added.]
Thus, in order to succeed under section 22, a trade-mark owner
should be required to establish use “as a trade-mark.”
64. Id.
65. As mentioned above, in analyzing legislative texts, some words must be given the
same meaning. In light of the legislature ’s preference for uniform expression, it follows that
different words appearing in the same statute should be given different meanings. See
Zeolkowski, supra n.44 and Statutory Interpretation, supra n.45.
66. Subsection 22(2) goes beyond the normal discretionary powers of a court because, if
exercised, it will allow a defendant to continue selling offending wares.
Vol. 93 TMR
930
V. THE FAILURE OF THE TRADITIONAL
INTERPRETATION IN CASES OF
COMPARATIVE ADVERTISING
As previously mentioned, an interpretation of the trade-marks
scheme based on a textual analysis, in the manner suggested in
this article, often gives rise to the same results as the traditional
interpretation. However, there can be divergent results. In two
cases of comparative advertising, outlined below, the principled
interpretation we suggest leads to a divergent, yet arguably more
accurate, result.
In order to compare the results of the two interpretations and
to illustrate where the traditional interpretation fails, it is helpful
to review the required elements for each approach:
Section 20
Section 22
I
I
TRADITIONAL
?? Technical use:
(i) use “in association
with” and
(ii) use “as a trademark”
?? Confusing trade-mark
?
??
Use “in association with ”
TEXTUAL ANALYSIS
I
??
??
Selling, distributing or
advertising
Use “as a trade-mark ”
Confusing trade-mark
* No use “in association
with ”
??
??
Depreciation of goodwill
* No use “as atrademark ”
Technical use:
(i) use “in association
with” and
(ii) use “as a trade-mark”
??
Depreciation of goodwill
The following pages depict three separate charts that: (1) set
out various hypothetical comparative advertisements; (2) indicate
whether such advertisements should ideally be considered as
permissible; and (3) assess whether the advertisements would
result in section 20 or 22 infringements under the traditional
interpretation of these sections and then under the authors
’
proposed interpretation. 67 As is shown, in some circumstances, the
traditional and proposed approaches yield different results. In
other cases, both approaches fail to proscribe comparative
advertisements the authors would have considered as not being
permissible. The authors view this as problematic and a potential
solution to this problem is suggested in the concluding comments.
67. The traditional approach is based on jurisprudence, most notably Clairol, supra
n.13 and Michelin, supra n.17, while the textual analysis is based on the approach put
forward by the authors.
931
Vol. 93 TMR
Chart 1
IDEAL
RESULT
Scenario
Wares
1. “Car X:
Better
Quality
and Value
than a
NISSAN
Car ”
2. “Car X:
Just like
&SSAN
Car ”
*
Comparative
ad
permissible
(because
distinctions
are being
drawn
between the
advertiser
and NISSAN)
Comparative
ad not
permissible
(because
similarities
between the
advertiser
and NISSAN
are being
drawn)
TRADITIONAL
TEXTUAL
ANALYSIS
Section
20
infringe
ment?
Section
22
infringe
ment?
Section
20
infringe
ment?
Section
22
infringe
ment?
NO
NO
NO*
NO
NO
NO
The authors are assuming a court would not find such a use to be
“as a trademark ” because the reference to NISSAN cars is to draw differences between
Car X and NISSAN Cars, not similarities. In other words, the reference to
NISSAN is not to indicate that the advertiser is the source of NISSAN Cars;
indeed, the opposite is the intention.
** The authors are assuming a court would find such use to be confusing as both
trade-marks, Car X and NISSAN, are for use in association with automobiles.
As can be seen, under these hypothetical scenarios, the
traditional and proposed approaches yield one different result
(shaded). The authors are of the opinion that
“Just like a NISSAN
Car, ” even when used in the advertising of wares, should not be
permissible. Using the traditional approach, however, this form of
advertising would not give rise to infringement under section 20.
Recall that the advertising of wares does not constitute
“use ” of a
trade-mark pursuant to section 4. Thus, applying the traditional
interpretation, there would be no
“technical use,
” and no
infringement of section 20.
Vol. 93 TMR
932
Using an interpretation based on textual analysis, however, the
slogan “Just like a NISSAN Car ” would infringe section 20. The
legislation does not require the trade-mark owner to show
“technical
use” under section 20. Thus, in the authors ’ opinion, there is no need
to prove use “in association with. ” The provision simply requires the
“selling, distributing or advertising. ” In this case, based on our
proposed textual analysis, all of the elements of infringement under
section 20 (i.e., advertising, use “as a trade-mark ” and confusion)
exist and such advertising would not be permissible.
Chart 2
IDEAL
RESULT
TRADITIONAL
Section
20
infringement?
Scenario
Section
22
infringement?
I-
TEXTUAL
ANALYSIS
Section
20
infringement?
Section
22
infringement?
Services
1. “Garage
X: Better
and Less
Expensive
than
NISSAN
Service ”
2. “Garage
X: Just
like
NISSAN
Service ”
Comparative
ad
permissible
(because
distinctions
are being
drawn
between the
advertiser
and NISSAN)
Comparative
ad not
permissible
(because
similarities
between the
advertiser
and NISSAN
are being
drawn)
NO**
YES
NO**
MAYBE*
YES
MAYBE*
* The authors say
“maybe ” because the result would depend on whether a court
would find the advertising tag line to depreciate the trade-mark owner
goodwill.
** The authors are assuming a court would not find such a use to be
mark ” because the reference to Nissan service is to draw differences between
the service of Garage X and the service of the Nissan dealer, not similarities.
In other words, the reference to Nissan is not to indicate that the advertiser is
the source of Nissan service; indeed, the opposite is the intention.
’s
“as a trade
vol. 93 TMR
933
As can be seen under these hypothetical scenarios, the
traditional and proposed approaches might yield different results
(shaded). The authors would argue that
“Better and Less
Expensive than NISSAN Service ” should be permissible in the
advertising of services. However, according to the traditional
interpretation, which does not require use “as a trade-mark, ” such
advertising could give rise to section 22 infringement if a court
were to hold that the tag line
“Better and Less Expensive ”
depreciated goodwill. Under our proposed approach, however,
“Better and Less Expensive than NISSAN Service
” would not
constitute section 22 infringement, because there would be no use
“as a trade-mark” (i.e., for the purpose of distinguishing).
Courts have attempted to resolve this problem with the
traditional interpretation of section 22. In Future Shop,68 for
example, the British Columbia Supreme Court applied a ban on
comparative advertising only where a defendant falsely implied
some connection between the two businesses. In Future Shop, both
parties were engaged in the sale of commercial electronic products.
The plaintiff Future Shop applied for an interlocutory injunction to
prohibit the defendant A & B from distributing comparative
advertisements in which it highlighted the differences between its
prices and those of Future Shop. Future Shop claimed that the use
of its name in a comparative advertisement was likely to
depreciate the value of the goodwill attaching to the trade-mark, in
conflict with section 22.
In interpreting section 22, the Court quoted extensively from
Clairol and concluded that there was no provision similar to
section 22 in any other jurisdiction that was capable of a sweeping
ambit. In Clairol, Mr. Justice Thurlow noted that section 22 could
be interpreted to extend to comparative price lists identified by
trade-marks displayed in a poster by a shopkeeper on his counter
and concluded that section 22 was not intended to forbid legitimate
comparisons or criticisms of that kind. The Court in Future Shop
held that there was no difference in principle between a counter
display of comparative prices and a newspaper, radio or television
advertisement containing the same information:
Thurlow J. was persuaded that the injunction should be
granted, as I read his reasons, because Revlon tried to attach
colour
to its products the favourable image which the Clairol
. . . Revlon thereby sought to
chart had in the market.
capitalize on the similarities of its products to those of Clairol
and appropriate a part of the Clairol goodwill in so doing. A
comparative ad which by obvious and reasonable implication
stresses the differences between the advertiser ’s product and
that of the competition
does not attach itself to the
68.
Future Shop Ltd. v. A. & B. Sound Ltd. (1994), 55 C.P.R. 3d) 182 (B.C.S.C.).
Vol. 93 TMR
934
competitor’s goodwill in the same manner. Rather, it seeks to
distance itself from that goodwill by stressing the differences.
This would explain the contrast between the result which
Thurlow J. reached with respect to the Revlon package, which
he enjoined, and his illustration of the comparative pricing
poster, which he concluded would not offend s. 22(l).
The question, depending on the evidence in any particular
case, is whether the use of the competitor ’s trademark is for a
purpose which stresses the similarities or the differences with
the trademarked competition.
If the purpose is to stress the
similarities, the value of the goodwill associated with the
trademark is appropriated in a manner contrary to the intent
of s. 22. If use stresses the differences with the trademark, then
the use is for the purpose of distancing the trademarked ware
or service and s. 22 is not offended.69
Thus, the Court would ban comparative advertising only where a
defendant falsely implies a connection between the two
businesses.70
The authors would argue that the judicial creation of such
tests, based on the traditional interpretation, is unnecessary. As
previously mentioned, the Act contains its own checks and
balances. According to our proposed interpretation based on
textual analysis, section 22 should require use “as a trade-mark. ”
The references to a competitor ’s trade-mark in a true comparative
advertisement is typically not meant to distinguish the advertiser ’s
goods (in the sense that the competitor ’s trade-mark is used to
indicate the origin of the advertiser ’s goods), and would thus not
contravene the proposed interpretation of section 22 of the Act.
VI. CONCLUSION
The current interpretation of sections 19, 20 and 22 of the Act
has arisen out of a tendency to accept and follow judgments
without considering the purpose and reasoning of the underlying
provisions. In addition, Clairol ’s interpretation of section 22 has
been considered predominantly on interlocutory matters, a stage
at which decisions are rarely overruled.71
Taking a step back to review the provisions of the trade-marks
scheme reveals that the provisions complement each other and
69. Id. at 18687 [emphasis added].
70. See Intellectual Property Law, supra n.54, at 219, where the author suggests that
confining subsection 22(l) to cases where a common connection is falsely suggested may be
one way to save the provision from the threat of being found an unreasonable and
unjustifiable limit on the guarantee of commercial free expression under section 2(b) of the
Canadian Charter of Rights and Freedoms.
71.
“To finish with Clairol, ” supra n.59.
935
Vol. 93 TMR
form a clear and complete regime for trade-mark owners to protect
their rights. These provisions also contain checks and balances,
thereby obviating the need to create new tests and stray from the
language of the Act.
One problem remains, however, as a result of the distinction
between wares and services. Section 22 requires the plaintiff to
show “use” in order to succeed in an action for depreciation of
goodwill. As mentioned above,
subsection 4(2) differentiates
between “use” of wares and services.72 The courts have explained
the reasoning underlying this distinction:
In the case of services there are of course no wares or packages
4(2)
to which trade marks can be affixed and thus subsection
speaks of trade marks “in association with ” services, being
used, “if displayed in the . . . advertising of those services.“73
The result of the distinction in section 4 is that under either
interpretation,
section 2 2
comparative
could
prohibit
advertisements for services, but would not prohibit similar
comparative advertisements for wares that could in actual fact
have the effect of depreciating the value of goodwill.74 This is
demonstrated in Chart 3 below by crafting hypothetical
advertising “tag lines ” that the authors believe would objectively
be viewed as depreciating a trade-mark owner
’s goodwill.
Nevertheless, using either the traditional or proposed approach,
there would be no infringement of section 22 in the case of the
comparative advertising of wares.
72.
See Revision Committee, supra n.12, at 16:
The extension of trade marks to services as well as to wares, made it necessary to add
to the section defining when a trade mark is deemed to be used (Unfair Competition
Act, 1932, Section 6) a subsection relating to services, and this will now be found as
Section 4(2) of the Bill. This section provides that a trade mark is deemed to be used
in association with services if it is used or displayed in the performance, or
advertising of such services. In the case of wares, the framers of The Unfair
Competition Act, 1932, felt that the use of a trade mark should be such that
coincidentally with the transfer of the property in or possession of the wares, notice of
the trade mark association with the wares was given to the person to whom the
property or possession was transferred. So far as wares are concerned, we have
adhered to this view in Section
4(l) of the Bill, but we do not think that such coincidence of time is necessary in the case of services.
73.
at 463.
Eye Masters Ltd. v. Ross King Holdings Ltd.
(1992) 44 C.P.R. (3d) 459 (F.C.T.D.)
74. Comparative advertising is generally allowed, subject to certain conditions, in the
United States, England and other European countries, so Canada needs a clear law on
comparative advertising: “To finish with Clairol, ” supra n.59.
Vol. 93 TMR
936
( kart 3
IDEAL
RESULT
Scenario
Services
l.“Dollar
Store X: The
TIFFANY of
Dollar Stores ”
Wares
2. “Hypothetical
Pocket Watch:
The TIFFANY
of Pocket
Watches ”
Comparative
ad not
permissible
(because
similarities
between the
advertiser
and
TIFFANY
are being
drawn)
Comparative
ad not
permissible
(because
similarities
between the
advertiser
and
TIFFANY
are being
drawn)
TRADITIONAL
TEXTUAL
ANALYSIS
Section
20
infringement?
Section
22
infringement?
Section
20
infringement?
Section
22
infringement?
YES*
YES**
YES*
YES**
NO
NO
*
The authors are assuming a court would find such a use to be a confusing
one, given that the hypothetical DOLLAR STORE X trade-mark and the
TIFFANY trade-mark would both be used in association with retail store
services.
**
The authors are assuming a court would find depreciation of goodwill
through such use because of the negative association of the TIFFANY watch
with mass market dollar store services.
*** Because the hypothetical POCKET WATCH trade-mark is
used in
association with pocket watches, the authors take the view that a court
& Co.
would find this to be a confusing use on the assumption that Tiffany
would sell pocket watches bearing the TIFFANY trade-mark as well.
One possible solution to this difficulty might be to modify the
meaning of “use” in association with services in subsection 4(2) of
the Act. The problem with amending section 4, however, is that
“use” is contained in almost every substantive provision of the Act
-
1
Vol. 93 TMR
937
and an amendment to the definition would affect the meaning of
“use ” throughout the Act, including those dealing with the
registration of trade-marks. In addition, while section 22 might not
capture comparative advertising of wares, section 20 might under
the proposed approach, as illustrated in Chart 3 (see shading). An
additional problem, however, is that section 20 might not capture
such advertising if the comparative reference does not constitute a
confusing trade-mark use.
The answer, therefore, might not lie in amending section 4 of
the Act, given the problems that this would create for the trademark registration process, but in amending section 22
to remove
the reference to
“use” as a defined term. The authors would
suggest that this is consistent with what the Revision Committee
envisioned as the purpose of section 22:
A trade mark statute should be designed to protect fair
trading and, in our view, anything that depreciates the value
of the goodwill attaching to a trade mark should be prohibited.
We have, therefore, made a positive provision to that effect in
Section 22. If, therefore, a well known trade mark is used by
other than the trade mark owner in such a manner as would
not previously have constituted grounds for an action either of
infringement or passing off, but which has the effect of
bringing the trade mark
into contempt or disrepute in the
public mind, the trade mark owner will be in a position to seek
a remedy.75
Dr. Fox similarly stated that the purpose of
section 22 is to accord
to the court very broad powers of discretion in deciding questions
of infringement and that any conduct likely to have the effect of
depreciating the goodwill attaching to a trade-mark is a matter left
entirely to the discretion of the court. He suggested that there
were no prescribed rules for the exercise of the discretion and that
the answer depends upon the facts of each case.76
If the purpose of section 22 is to provide broad discretion to the
courts, then the legislature should amend the provision to remove
the reference to
“use ” in its defined sense. The courts should not
attempt to rectify shortcomings
in the law by creating
jurisprudential tests that are not supported by the legislation. This
is not only inconsistent with the letter of the law, but creates
practical problems for lawyers when advising clients, particularly
in the area of comparative advertising. In addition, it may also be
desirable to consider incorporating in the Act a defence similar to
that employed in the United States
’ Federal Trademark Dilution
Act,77 which provides that fair use of a famous mark by another
75. See Revision Committee, supra n.12, at 26.
76.
Canadian Law of Trade Marks, supra n.2, at 340-42
77. Supra n.3.
938
Vol. 93 TMR
person in comparative commercial advertising or promotion to
identify the competing goods or services of the owner of the famous
mark is not actionable.
It is by returning to basic principles in interpreting the
relevant provisions and by amending section 22 that Canada will
be able to protect VICTORIA ’S SECRET.