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19 April 2000
The past year has been an interesting one in the field of trademarks law. The courts have dealt with many issues including:
The following is a summary of cases decided in 1999 that have had an important impact on Canada's trademarks law.
Official marks have long been a source of controversy due to their special status under the Trademarks Act(1). Such marks are not subject to the same standards for registration as other trademarks. Once registered, it is extremely difficult to have an official mark struck from the register.
Public authorities own certain official marks and these are governed by Section 9(i)(n)(iii) of the Trademarks Act, which reads:
"No person shall adopt in connection with a business, as a trademark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for any badge, crest, emblem or mark adopted and used by any public authority in Canada as an official mark for wares or services, in respect of which the registrar has, at the request of [the] public authority, given public notice of its adoption and use."
Several recent decisions have addressed aspects of this statutory definition.
'Public authority' defined
The Federal Court of Appeal recently affirmed the decision of the Trial Division in Big Sisters Assn of Ontario v Big Brothers of Canada(2). The Trial Division in dicta addressed the test for what constitutes a 'public authority'. The court adopted an earlier test, stating that in order to be regarded as a public authority a body:
Merely because a party is dedicated to the public good does not necessarily mean that it is under a duty to the public. Furthermore, it may not be sufficient for a court to simply rely on publication of a notice of adoption and use by the registrar as proof that the applicant is in fact a public authority.
Test for similar mark
The courts have addressed the proper test to be applied in order to determine whether a mark is so similar to an official mark that it is likely to be mistaken for the official mark. The test is whether a person familiar with the official mark, but having an imperfect recollection thereof, would, on a first impression, likely be deceived or confused by the other mark. The test is not one of straight comparison, as this implies a close and careful look at the marks in issue.
Test for adoption and use
If the owner of an official mark wishes to enforce it, the onus is on the owner to prove that the official mark was adopted and used as a trademark. Again, mere publication by the registrar of trademarks of a notice of adoption and use does not constitute conclusive evidence of such adoption and use.
The proper procedure for challenging the registration of an official mark has yet to be determined. However, the issue was raised in Magnotta Winery Corp v Vintners Quality Alliance of Canada(3). The facts of the case were as follows.
Vintners Quality Alliance of Canada (VQA) had applied to register ICEWINE as a certification mark. Magnotta had written to the VQA expressing concern about this course of action. The certification mark application by the VQA was ultimately unsuccessful. The VQA then filed an application requesting that the registrar give public notice pursuant to Section 9(1)(n)(iii) of the Trademarks Act that the VQA had adopted and used the word ICEWINE as an official mark. This application did not come to the attention of Magnotta until after publication of the notice.
Magnotta then brought a motion to the Federal Court for an extension of time to file an application for judicial review of the registrar's decision. In the alternative, Magnotta sought directions pursuant to Rule 54 of the Federal Court Rules(4) as to the procedure it should follow.
After concluding that the seeking of directions under Rule 54 did not encompass directions as to what procedure a party should use to conduct its case, the court discussed several possible alternative procedures that might be attempted.
First, Magnotta could consider bringing an application under Section 57 of the Trademarks Act(5) to have the official mark expunged from the register. However, the parties had agreed that this procedure would not be feasible, as an official mark is not technically on the register. The 'register' is defined under Section 2 of the Trademarks Act as "the register kept under Section 26". In turn, Section 26 refers to "a register of trademarks and of transfers, disclaimers, amendments, judgments and orders relating to each registered trademark"; nowhere does it refer to official marks.
Second, Magnotta could consider commencing an appeal under Section 56 of the Trademarks Act. Section 56(1) states:
"An appeal lies to the Federal Court from any decision of the registrar under this act within two months from the date on which notice of the decision was dispatched by the registrar or within such further time as the court may allow, either before or after the expiration of the two months."
The court, however, raised a question as to whether Magnotta had standing to bring such an appeal, as it was not the applicant for the Section 9(1)(n)(iii) notice.
Finally, Magnotta could consider commencing a proceeding for judicial review under the Federal Court Act(6). Section 18.1(1) states:
"An application for judicial review may be made by the attorney general of Canada or by anyone directly affected by the matter in respect of which relief is sought."
The VQA argued that Magnotta was not a person directly affected within the meaning of Section 18.1. The court did not reach a conclusion on this point, but did state that Magnotta had a direct interest in the registrar's decision.
The court ended its reasons by stating that the Court of Appeal would eventually determine the correct procedure. The court also found that the requirements for justifying an extension of time to commence a judicial review application had been met.
Regardless of what is ultimately found to be the proper procedure for challenging the issuance of official marks, it is clear that bringing an action to challenge the implicit decision of the registrar that the owners of official marks are public authorities is not the correct procedure to follow.(7)
Decisions of the registrar of trademarks can be appealed to the Federal Court pursuant to Section 56 of the Trademarks Act. Additional evidence can be adduced on appeal in accordance with Section 56(5), which reads as follows:
"On an appeal under subsection (1), evidence in addition to that adduced before the registrar may be adduced and the Federal Court may exercise any discretion vested in the registrar."
In the past, the accepted standard of review was one of correctness, despite the court recognizing that it should not lightly interfere with decisions made by hearing officers who are experienced in adjudicating trademark opposition matters.(8)
Recent decisions of the Federal Court Trial Division and the Federal Court of Appeal have re-examined the appropriate standard of review and the amount of deference to be given to the registrar.
A sliding scale
In Young Drivers of Canada Enterprises Ltd v John Chan(9), the court began by stating the standard of review as it had been enunciated by the Court of Appeal in Labatt Brewing Co v Molson Breweries, A Partnership(10). According to the Labatt Case, a lower degree of deference should be given to findings of fact concerning confusion or distinctiveness where no discretion was exercised by the registrar. The standard is one of correctness, taking into account the expertise of the registrar in regularly making such determinations of fact. It is also important to have regard to whether additional evidence has been adduced before the judge on appeal.(11)
Although the court in the Young Drivers Case did apply this accepted standard in its review of the registrar's decision at hand, Justice Lutfy suggested that:
"If the issue of confusion can properly be characterized as a matter of mixed law and fact, the standard of review may be further down the spectrum from correctness. The special knowledge and expertise of the registrar may require greater deference, where no new evidence is adduced on appeal. The determination on appeal may be closer to whether the registrar's decision is 'clearly wrong' or 'unreasonable'."(12)
These comments were prompted by the recent decisions of the Supreme Court of Canada in Canada (Director of Investigation and Research) v Southam Inc(13), Pushpanathan v Canada (Minister of Citizenship and Immigration)(14) and Baker v Canada (Minister of Citizenship and Immigration)(15). In these cases, the court stated that the standard of correctness may not be the proper standard in all cases involving appeals from administrative tribunals, and introduced a sliding scale for the scope of review.
Unreasonableness as a standard
The second recent trial-level decision dealing with the issue of the standard of review on appeal is Garbo Group Inc v Harriet Brown & Company Inc(16). Garbo Group owned a number of trademarks including GARBO Design, TGIF BY GARBO and GARBO, for use in association with women's fashion accessories. Harriet Brown applied to register the trademark GRETA GARBO for use in association with cosmetics, toiletries and eyeglasses, having inherited the rights to the name from the Greta Garbo Estate. The Trademarks Opposition Board rejected Garbo Group's opposition, finding no likelihood of confusion between the parties' marks.
On appeal, the Federal Court Trial Division took up the gauntlet thrown down by the court in Young Drivers(17) and questioned the appropriate standard of review of an administrative decision of a specialized board such as the Trademarks Opposition Board. Justice Evans stated:
"In my opinion the standard of review applied to the registrar's findings of confusion needs to be reformulated to take account of the pragmatic and functional analysis developed in contemporary administrative law jurisprudence for selecting the standard of review appropriate for the issue in dispute. In undertaking this exercise I am following the path already indicated by Justice Lutfy in Young Drivers of Canada v Chan. However, the end result of the analysis may differ relatively little from the court's established practice." (18)
The court utilized a 'pragmatic and functional analysis' and examined the wording of Section 56(5) of the Trademarks Act allowing for:
In concluding that the appropriate standard of review was not correctness, but was unreasonableness (stated to be synonymous with 'clearly wrong'), the court stated:
"To conclude, it is my opinion after weighing these factors that, despite the inclusion in the Trademarks Act of an untrammelled right of appeal and the right to adduce additional evidence, a considerable degree of deference is called for on the part of the appellate court when reviewing the registrar's finding of confusion, provided at least that no new significant new evidence has been adduced on a factual issue and it is not alleged that an error of law has been committed."(19)
Impact of additional evidence
As noted in Section 56(5), additional evidence is allowed on appeal from a decision of the registrar. The court in the Garbo Case(20) suggested that additional evidence may change the standard from 'clearly wrong' to 'correctness' with regards to that evidence, and also discussed the weighing of the significance of the additional evidence.
The court stated that if the evidence adds nothing of significance, its presence should not affect the standard of review. On the other hand, additional evidence that goes beyond what was already before the registrar should allow the court to ask whether in light of the additional evidence, the registrar reached the wrong decision. Where the additional evidence is so significant that the case before the court is fundamentally different from that before the registrar, the court may conclude that the case should be remitted to the registrar.(21)
In the result, the appeal by Garbo Group was dismissed. The court concluded that there was no reasonable likelihood of confusion between the parties' marks based on the additional evidence.
Also of interest in this regard is the decision of the Federal Court of Appeal in John Labatt Limited v Molson Breweries, A Partnership(22). This appeal was argued before the Federal Court Trial Division had rendered its decision in the Garbo Case(23), but the date of the appeal decision was subsequent to the decision in Garbo. Although the Federal Court of Appeal in Labatt did not expressly refer to Garbo, it essentially arrived at the same conclusion as the court in Garbo.
The Labatt court stated that decisions of the registrar - whether of fact, law or discretion within the registrar's area of expertise - are to be reviewed on a standard of reasonableness. However, on appeal, where additional evidence has been adduced that would have materially effected any findings of the registrar, the appeal judge must arrive at his or her own conclusion as to the correctness of the registrar's decision.(24) The Federal Court of Appeal considered the older case law regarding the standard of review (particularly Benson & Hedges Canada Limited v St Regis Tobacco Corporation(25) and McDonald's Corp v Silcorp Limited(26)) as being consistent with this more modern approach (as exemplified by the recent decisions of the Supreme Court of Canada mentioned above).
The 'drug wars' continued in 1999, as exemplified by a recent decision of the Federal Court Trial Division dealing with trademark rights in the colour of pharmaceutical products.
Technical inaccuracy invalidates application
In Novopharm Limited v Bayer Inc(27), Bayer had applied to register a trademark for the colour dusty rose as applied to circular tablets of nifedipine. The tablets were marketed under the brand name ADALAT, available by prescription only, and used for the treatment of high blood pressure and angina. Novopharm opposed the application. Although the opposition was initially unsuccessful before the Trademarks Opposition Board, Novopharm's subsequent appeal to the Federal Court was successful.
The history of Bayer's application was unusual in that several errors were committed during the application process in depicting the colour being claimed as a feature of the trademark. Claims for colour are governed by Section 28 of the Trademarks Regulations (1996)(28).
The description in Bayer's application read as follows:
"The trademark consists of the colour dusty rose applied to the whole of the visible surface of the tablets, as shown in the specimen tablet affixed to the form of the application. The tablet shown in the dotted outline does not form part of the trademark."
Bayer had filed a 10mg tablet of ADALAT with the Trademarks Office as a specimen.
The original application included a drawing of a circle with a solid line circumference and hatched with vertical lines, which designate the colour pink. Bayer sought to correct the use of the solid line circle as depicting the tablet, and filed an amended application with a drawing using a dotted line circle. However, the hatching in the circle was shown with horizontal lines, which designate the colour blue. When the application was advertised in the Trademarks Journal, the errors were compounded, as the drawing showed a circle with both a solid line circumference and horizontal hatching.
The registrar had held that these deficiencies did not invalidate the application. On appeal, Novopharm successfully relied on the wording of Section 30(h) of the Trademarks Act, which states:
"An applicant for the registration of a trademark shall file with the registrar an application containing, unless the application is for the registration only of a word or words not depicted in a special form, a drawing of the trademark and such number of accurate representations of the trademark as may be prescribed."
Novopharm relied on public policy arguments, and stated:
"There is an important public interest in ensuring the integrity of the register as a record on which individuals can rely in order to know with certainty the precise scope of the monopoly asserted through the trademark."(29)
In addition, Novopharm argued that the filing of a specimen did not overcome the problem with the errors in depiction of the trademark, as specimens can deteriorate over time.
The court agreed, concluding that Section 30(h) of the Trademarks Act had not been complied with because an accurate representation of the mark had not been provided. The court stated:
"When the most important element of a claim relates to colour, it is an error that goes to the heart of the mark to show a different colour in the drawing from that claimed in the verbal description."(30)
As for Bayer's argument that Section 28 of the Trademarks Regulations does not mandate hatching, the court stated that although this is true, where the hatching is provided and is wrong, the resulting drawing does not accurately represent the trademark, and is thus contrary to Section 30(h) of the Trademarks Act.
Non-distinctiveness invalidates application
The finding in Novopharm v Bayer is consistent with the approach taken in other decisions involving colour, shape and size of pharmaceutical products, such as Monsanto Canada v Novopharm Limited(31) and Eli Lilly and Co v Novopharm Limited(32). The court also found in favour of Novopharm on the issue of non-distinctiveness. The evidence showed that small pink round tablets for the treatment of cardiovascular conditions were common in the pharmaceutical marketplace, and that Bayer's ADALAT tablets had not become distinctive of a single source among consumers. The fact that, at the relevant time, there were no other products on the market which were interchangeable with ADALAT, although favouring Bayer, was not sufficient in and of itself to establish secondary meaning.
Since use is an important factor in defining the scope of protection accorded to trademarks, judicial pronouncements on what constitutes 'proper use' deserve consideration.
The Federal Court of Appeal recently affirmed a trial judgment with respect to its finding concerning use of marks by a distributor in a case involving Cuban cigars. In Havana House Cigar & Tobacco Merchants Ltd v Skyway Cigar Store(33), the plaintiff Havana House was the exclusive Canadian distributor for a Cuban government owned corporation which controlled all cigars manufactured by Cuban state owned factories. Havana House had obtained Canadian trademark registrations for HOYO DE MONTERREY DE JOSÉ GENER HABANA, MONTE CRISTO HABANA, DESIGN MONTECRISTO and ROMEO Y JULIETA, all being names of various types of Cuban cigars. The defendant Skyway was a retailer of cigars.
Skyway had attempted to obtain cigars through a wholesaler that in turn received its goods from Havana House. However, the wholesaler was unable to supply the required quantity to Skyway. Skyway's attempts to obtain the cigars directly from Havana House were also unsuccessful. Skyway then purchased cigars, including those bearing the above trademarks, directly from outlets in Cuba. Havana House sued for trademark infringement, and Skyway filed a counterclaim for a declaration of invalidity.
The court held that, under the circumstances, Havana House as distributor did not use the trademarks within the meaning of Section 4 of the Trademarks Act(34), and hence was not the party entitled to obtain the registration of such marks. The trial judge reviewed the case law setting forth the principle that use of a mark by a distributor inures to the benefit of the manufacturer. While recognizing that acquiescence by the manufacturer may give rise to entitlement to the marks by the distributor, such a right does not arise unless the distributor can prove that it has used the marks and that the marks have become distinctive of the distributor.(35) The court concluded that the trademarks in question, being placed on the cigars by the manufacturers and sold to many countries bearing such marks, were distinctive of the manufacturer and not Havana House as the distributor. Therefore, the marks were found to be invalid.
In a somewhat similar vein, the Federal Court of Appeal in another case examined the issue of whether resale of a licensed product constitutes use of a trademark so as to cause the vendor to become liable for trademark infringement.
The case in issue was Coca-Cola Ltd v Pardhan(36). The defendant Pardhan was a distributor of Coca-Cola purchased from the plaintiff Coca-Cola Bottling Ltd, a licensee of the COCA-COLA trademarks. Pardhan also resold Coca-Cola products outside Canada. The plaintiff alleged that the products resold by Pardhan were meant to be sold only within Canada, and had been labelled solely for the purposes of such sales. The plaintiff alleged that the selling of the products outside Canada violated the plaintiff's trademark rights.
Pardhan moved to strike the plaintiff's statement of claim(37), and successfully relied on the doctrine of first use (or the doctrine of exhaustion of rights) in doing so.
The trial judge stated that where goods have been place into channels of trade by the trademark owner, and are subsequently acquired by another party in the ordinary course of business, that other party is not liable for infringement if he later resells the goods.
The Court of Appeal agreed, stating that such activity did not constitute 'use' within the meaning of the Trademarks Act. The court noted that the purpose of the act is to prevent deception as to the source of goods bearing a mark. In this case, legitimate goods had been bought and later resold; no deception as to source had occurred. As stated by the Court of Appeal:
"Thus it can be seen that subsequent transactions in the goods in which the goods pass from one owner to another, with the trademark intact identifying the originator of the goods, cannot be said to be 'used' by the subsequent vendor for the purpose of distinguishing goods 'manufactured . . . by him' from those manufactured by another, as required by the definition of 'trademark' in Section 2."(38)
The court quoted its previous pronouncement in Smith & Nephew Inc v Glen Oak Inc(39):
"Goods which originate in the stream of commerce with the owner of a trademark are not counterfeit or infringing goods simply because they may have arrived in a particular geographical market where the trademark owner does not wish them to be distributed."(40)
The court also disagreed with the plaintiff's submission that Section 8 of the Trademarks Act gave it the right to sue for infringement once it had given notice to the defendant that the use of the product bearing the trademark was restricted.(41) The court held that Section 8 simply creates an implied warranty that the trademark affixed to the goods may lawfully be used in association with such goods. In the present case, there was no privity of contract between the parties for such a warranty to be enforceable.
Since the enactment of the formal licensing provision in Section 50 of the Trademarks Act, much jurisprudence has developed on the issue of what constitutes 'proper licensing'. The Federal Court of Appeal recently had the opportunity to address the retroactive application of the formal licensing provision in the case of TGI Friday's of Minnesota, Inc v Ken Dolan Inc(42).
The case involved an application to expunge the trademark FRIDAY'S from the register for non-use. The mark had been registered in 1973 by Friday's Ltd. The company assigned the mark in 1977 to Herman Lindy, as a result of which Lindy became the owner of the mark. Notwithstanding the assignment, the company continued to use the mark, although it was not a registered user under the statutory scheme that existed prior to the enactment of Section 50. The original decision of the registrar to expunge the mark had been made in 1980, and was based on a lack of evidence that the company (ie, the registered user) was actually using the mark.
The trial judge affirmed the registrar's decision, but the Federal Court of Appeal allowed the appeal. In doing so, the court examined the wording of Section 50(1):
"For the purposes of this act, if an entity is licensed by or with the authority of the owner of a trademark to use the trademark in a country and the owner has, under the licence, direct or indirect control of the character of quality of the wares or services, then the use, advertisement or display of the trademark in that country or as in a trademark, trade name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trademark in that country by the owner."
The court held that the plain wording of this provision indicated an intent that its application ought to be retrospective as well as prospective, unless there was an obstacle in such application. The court went on to find that the 12-year lapse of time between the registrar's decision and the enactment of Section 50 was not such an obstacle, nor was the absence of a written licence between the company and Lindy. The court found that there was sufficient evidence to support the inference that a verbal licence existed.
Special circumstances excuse non-use
In expungement proceedings brought under Section 45 of the Trademarks Act, the owner of a registered trademark is required to show that the mark has been used in Canada during the three-year period immediately preceding the Section 45 notice, and that any non-use is attributable to special circumstances. Special circumstances excusing non-use were found to exist in the recent case of Ridout & Maybee v Sealy Canada Ltd(43).
At issue was the trademark FANTASY, which had been registered by Sealy for use in association with a variety of wares, including mattresses and box springs. A notice under Section 45 was issued on October 10 1996. Therefore, Sealy was required to show use during the period October 10 1993 to October 10 1996.
Sealy provided evidence that the FANTASY mattresses and box springs were sold and displayed at Eaton's department store until November 1993. Following the termination of this product line by Eaton's, Sealy claimed it had made ongoing efforts from January 1994 to August 1996 to attempt to find another retail partner to market the products. Sealy cited difficulty in obtaining a retail distributor as a result of the downturn in the market and the drop in consumer demand for relatively high-priced items. In 1996, Sealy entered into negotiations with the Brick department store, an oral commitment was made in September 1996, and actual orders were placed in October 1996. Sealy argued that it had no intent to abandon use of its mark, and that its inability to use the mark from November 1993 to August 1996 was beyond its control.
The court found that there was evidence of Sealy's intention to resume use of the mark. The fact that Sealy took active steps prior to the date of the Section 45 notice to resume use showed that there were sales in the normal course of trade. The court found that there was satisfactory evidence that the relationship with Brick was substantial and genuine and therefore the trademark should not be expunged.
Relevance of class of wares/services
Although there are several recent cases dealing with the issue of confusion under Section 6 of the Trademarks Act, the decision of the Federal Court Trial Division in Mario Valentino SpA v Valint NV(44) is of particular interest. The court considered the applicability of a settlement agreement in the context of an opposition proceeding. The court also had some interesting comments regarding the relevant class of purchasers to consider when examining the issue of confusion.
The parties were both engaged in the design and manufacture of high-end consumer goods. The applicant, using the mark MARIO VALENTINO, specialized in wares including leather footwear, garments and fashion accessories. The opponent operated under the name VALENTINO, and specialized in women's and men's clothing and accessories. The parties had entered into a co-existence agreement, which delineated each of the fashion areas in which the companies would operate. A dispute over the application of the agreement gave rise to opposition proceedings in which Valint opposed the applications for MARIO VALENTINO in association with a variety of fashion wares.
The registrar questioned the relevance of the co-existence agreement, stating that it had no relevance to the issue of potential confusion in the marketplace. The registrar found that the trademark could not be registered. With regard to the likelihood of confusion, the registrar found that the two marks were confusing.
On appeal, Mario Valentino properly proved the agreement through affidavit evidence. Based on the agreement, Mario Valentino argued that Valint was estopped from alleging confusion. However, the court held that there was no authority to support the availability of such an equitable remedy in an opposition proceeding, or in an appeal. The Trademarks Act does not compel the enforcement of the terms of an agreement, unlike those found in labour-relations statutes. The registrar's decision that MARIO VALENTINO was merely a surname was upheld.
With regard to the likelihood of confusion, the court rejected the argument that in dealing with high-end goods, the consumer is less likely to be confused. Mario Valentino had attempted to argue that the purchasers of such goods are wealthy, sophisticated and knowledgeable people, and therefore the likelihood of confusion would be much less. The court refused to follow previous pronouncements in Bellows(45) and Ciba-Geigy(46) to the effect that consumers of more expensive goods pay more attention to their purchases and are hence less likely to be confused than consumers of everyday items. The court dismissed such a line of reasoning as being "repugnant in the present day social context" and "unsupportable by what happens according to my perspective of the real world"(47).
It will be interesting to see whether the court's comments in this case will be applied in the future to counter the traditionally accepted argument that purchasers of high-priced items pay more attention to their purchases than purchasers of everyday items, and are hence less likely to be confused.
The effect of multiculturalism
Another case that may have the effect of changing the test for likelihood of confusion with respect to trademarks which are not in either the English or French language is Cheung Kong (Holdings) Limited v Living Realty Inc(48). The mark consisted of four Chinese characters and was identified as Chinese characters, filed in association with real estate and investment services. The transliteration of these characters is CHEUNG KONG SA IP, which in English means 'long river real business'.
The application was opposed by Cheung Kong (Holdings) Limited, which was the registered owner of the Canadian trademark CHEUNG KONG, in association with specific services including real estate development and investment.
The Trademarks Opposition Board had concluded that confusion was to be determined from the perspective of the average consumer in Canada, and held that the average consumer in Canada did not understand Chinese characters; hence, there could be no confusion. On appeal, the court addressed the law relating to this issue. In Krazy Glue, Inc v Grupo Cyanomex, SA de CV(49) Justice McGillis had held that the proposed mark KOLA LOKA, which in Spanish means 'crazy glue', was not likely to be confused with the opponent's mark KRAZY GLUE. She concluded that only a minimal proportion of the Canadian population speaks Spanish so as to be able to make the translation.
The court in Cheung Kong distinguished this case on the basis that McGillis had apparently accepted evidence that less than 1% of the population spoke Spanish and also that since the product was marketed on a national basis, the average consumer should be the average Canadian. In contrast, in this case the judge took judicial notice of the fact that there is a large Chinese population in Canada, particularly in Toronto where the applicant and opponent carry on business, and also that both directed their business to members of the Chinese community. He concluded:
"In light of these facts, it would be hard to maintain that a substantial number of actual consumers were not reasonably likely to confuse Living Realty's mark with Cheung Kong's as a result of the identical and distinctive nature of the idea conveyed by the marks, particularly given the similarities of the services offered by the parties."(50)
The court went on to state:
"If it could be inferred from the evidence that a significant proportion of the likely consumers of Living Realty's clients were familiar with Chinese characters, the registrar should take this into consideration as part of the 'surrounding circumstances' when determining whether there was a likelihood of confusion with Cheung Kong's mark."(51)
The court found that the evidence supported such an inference, and held that there would be a likelihood of confusion.
In light of this case, parties who oppose applications for foreign-language marks should be prepared to adduce evidence of the market to which the wares or services are being targeted. They should also be prepared to prove that a significant number of people in that target market understand the foreign language and would be confused by the subject mark.
Although the topic of famous trademarks has had a long history in Canadian jurisprudence, the decision of the Federal Court of Appeal in United Artists Corp v Pink Panther Beauty Corp(52) has served to re-ignite the issue.
The Vogue Case
One of the first cases on famous marks to be decided subsequent to the decision in Pink Panther(53) was Advance Magazine Publishers Inc v Masco Building Products Corp(54). At issue was the likelihood of confusion between the applied-for mark VOGUE for use in association with door locks and lock hardware and the famous mark VOGUE associated with fashion and decorator magazines.
The court found that the mark VOGUE, despite being of limited distinctiveness, had become famous. As such it was afforded a greater ambit of protection, and Masco had to meet a higher threshold to establish the onus required with regard to low likelihood of confusion.
The court found that the use of VOGUE in association with door locks and door hardware could be considered connected to VOGUE in connection with fashion and decorator magazines. In the absence of evidence as to the nature of the wares or the channels of trade, it was possible that Masco's products could include high quality, stylish and decorative products such as those featured in the magazines. The court distinguished Pink Panther(55) on the basis that there was not the "gaping divergence in the nature of the wares".
The Lexus Case
The second recent case dealing with famous trademarks, in which the court also chose to distinguish Pink Pather(56), is Toyota Jidosha Kabushiki Kaisha v Lexus Foods Inc(57). This was an appeal from the decision of the Trademarks Opposition Board allowing the registration of the trademark LEXUS in association with canned fruits, canned vegetables, fruit juices and vegetable juices. Toyota had opposed this application on the basis of its trademark for LEXUS, registered for use in association with cars and related wares and services. The Trademarks Opposition Board had found insufficient evidence that Toyota's LEXUS trademark had acquired famous status.
On appeal to the Federal Court Trial Division, no new evidence was filed. However, the trail judge stated that in order to be considered famous, a trademark must be generally recognized throughout Canada as well as by most, if not all, segments of the population. The survey evidence showed that 58% of Canadians associated the mark LEXUS with a vehicle. The trial judge concluded that this survey was sufficient to demonstrate that the mark LEXUS was famous, or at least very well known. The trial judge went on to state that LEXUS was a coined term, and that in order to determine the likelihood of confusion, all surrounding circumstances must be considered. He further noted that Lexus Foods had chosen a mark identical with Toyota's famous mark, with knowledge of that mark.
The court concluded that there was a likelihood of confusion between the applied-for mark LEXUS for use in association with fruits and vegetables and Toyota's LEXUS mark for use in association with cars and related wares and services. The court expressly distinguished the Pink Panther Case(58) on the basis that that case did not deal with a coined word. The court went on to state the following:
"Additionally, the fact that the trademarks of the appellant in Pink Panther were used by its predecessors-in-title for over 30 years is a significant difference with the case at bar. It could be contemplated that a trademark, which is enjoying the beginning of the famousness, deserves an even wider ambit of protection in order to preserve this rising reputation."(59)
These comments are somewhat surprising as they suggest, in effect, that a well known mark that has not been known for a long period may deserves broader protection than a mark which has been famous for a much longer period. It appears as though the court was simply trying to find as many grounds as possible on which to distinguish the Pink Panther Case.
An interesting recent case that involved two Canadian parties who litigated over the use of domain names is Bell Actimedia Inc v Puzo (Communications Globe Tête)(60). The case involved an application for an interlocutory injunction.
The plaintiff Bell was the owner of the registered trademarks YELLOW PAGES and PAGES JAUNES, for use in the production and distribution of telephone directories, as well as the provision of business listings on the Internet. The plaintiff also alleged that it had registered several domain names, including 'yellowpages.ca', 'pagesjaunes.ca', 'canadayellowpages.com' and 'pagesjaunescanada.com'.
The defendant Puzo produced an internet-based business directory in French and had registered the domain name 'lespagesjaunes.com'. The court granted
the interlocutory injunction in favour of Bell, specifically enjoining Puzo
from using 'lespagesjaunes.com' or any other domain name confusingly similar
with this domain name. Two principles emerged from this case. First, there was
an express recognition by the court that Puzo's domain name was used worldwide
to access the defendant's web site.
Second, the defendant argued, somewhat creatively, that the plaintiff's trademark rights as asserted applied only in Canada, and that any injunction granted by the court should not enjoin the defendant from carrying on business in other French-speaking countries. The court did not expressly deal with this argument in its findings. However, coupled with the above statement regarding the worldwide nature of the Internet, the conclusion is that a Canadian court can exert international jurisdiction by enjoining use of a domain name, at least when that domain name is used by a Canadian-based entity in a way that is harming another party's Canadian trademark.
As we enter the new millennium, it will be interesting to see how far the courts go in applying some of these developing concepts in trademarks law. Will it become more difficult for an appellant in opposition proceedings to overturn the registrar's decision in the absence of significant new evidence? Will parties find creative ways to attack the status of public authorities, and hence the granting of official marks? Will the class of consumers become less relevant, and will the language they speak become more relevant when assessing likelihood of confusion? Keep watch.
Written by Stephanie Chong with the assistance of Lesley Rapaport.
For further information on this topic please contact Peter Wells at Lang Michener by telephone (+1 416 360 8600) or by fax (+1 416 365 1719) or by e-mail (firstname.lastname@example.org).
"The Federal Court has exclusive original jurisdiction, on the application of the registrar or of any person interested, to order that any entry in the register be struck out or amended on the ground that at the date of the application the entry as it appears on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark."
"Every person who in the course of trade transfers the property in or the possession of any wares bearing, or in packages bearing, any trademark or trade name shall, unless before the transfer he otherwise expressly states in writing, be deemed to warrant, to the person to whom the property or possession is transferred, that the trademark or trade name has been and may be lawfully used in connection with the wares."
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