Both the applicant and the respondent produced canned and processed meat products in Canada, the applicant under the name “PALM & Device“, and the respondent under the name “OX & PALM”. The applicant was granted a trademark in July 2003, while the respondent was granted a trademark in October 2005.

Section 57(1) allows “any person interested” to apply to the Federal Court for an order that any entry in the register be struck out or amended on the grounds that at the date of the application the entry as it appears on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the trademark. The applicant sought expungement of the respondent’s trademark on the grounds that the trademark was confusing to the public, that the respondent was not the person entitled to secure registration of the trademark, and that the trademark was non-distinctive.

The Court dealt first with the issue of whether the applicant was a “person interested” such that it had standing under s. 57(1). The phrase “person interested” is defined in s. 2 of the Trade-marks Act. A corporation such as the applicant is a “person interested” if it may be affected by any entry on the register or reasonably apprehends that it may be affected by any act or omission, or contemplated act or omission under or contrary to the Trade-marks Act. Ultimately, the Court found that the applicant was not a “person interested” because the applicant did not initially oppose the registration of the respondent’s trademark, because it waited until near the end of the 5-year deadline provided by s. 17(2) of the Trade-marks Act, and because it did not establish that its business had suffered as a consequence of the registration of the respondent’s trademark. Simply carrying on the same business and targeting the same consumers were found to be insufficient to show that the applicant was affected by the respondent’s trademark. In addition, the court found that the nearly five-year delay in bringing the action was indicative that the respondent’s trademark did not cause the applicant to suffer any harm.

Despite the Court’s finding that the applicant was not a “person interested”, it acknowledged the de minimis threshold for that issue and proceeded to discuss the remainder of the applicant’s claims. In considering whether the trade-marks of the applicant and the respondent were confusing, the Court applied the test in s. 6(5) of the Trade-marks Act. In addition to finding that the two trademarks bore little resemblance to one another in appearance, sound and idea, the Court also found that the co-existence of the two trademarks in the United States since 1998 was support for the conclusion that the trademarks did not create confusion.

The Court concluded by finding that the respondent’s trademark was distinctive both because it was adapted to distinguish, and because it actually distinguished. This finding was based on the uniqueness of the respondent’s trademark and the fact that it was a recognized brand name within its target community.

The Court was satisfied that the Respondent was the person entitled to secure the registration of the OX & PALM trademark. The applicant’s claim was dismissed with costs.

In 2002, Target’s counsel initiated proceedings under s. 45 of the Trade-Marks Act to cancel INC’s trade-mark registration for TARGET APPAREL. The Registrar of Trade-marks issued a notice on April 2002 requiring INC to show use of the trade-mark registration in Canada. INC filed an affidavit on its use of the trade-mark in response to the s. 45 notice. The Registrar of Trade-marks held that the evidence was insufficient to show use. INC appealed the Registrar’s decision and the Federal Court reversed that decision on October 19, 2006. Target’s counsel appealed to the Federal Court of Appeal, which affirmed the Federal Court decision on November 26, 2007.

Target claimed that they only became aware of INC’s use of TARGET APPAREL as a store name in June 2010. Its counsel sent a letter to INC objecting to the use of the TARGET trade name on August 3, 2010. Again, Target commenced a s. 45 proceeding to cancel the trade-mark registration of TARGET APPAREL. The Registrar of Trade-marks has issued another notice to INC under s. 45 of the Trade-marks Act on July 30, 2010, and the proceeding is currently underway.

Target also requested an injunction for the months leading up to the trade-mark dispute trial, scheduled to begin in November 2012.

The Court set out and applied the three-step test for applications for interlocutory injunctions. Although the Court found the first requirement of a serious question to be tried had been met, the question of irreparable harm to the Plaintiff was answered in the negative.
The Court found the Plaintiff’s submission on irreparable harm, advanced on the basis of a marketing theory about “sincere” and “exciting” brand personalities, difficult to assess. The Court noted, where expert evidence is provided by affidavit and is challenged in the course of the proceedings, the assessment of such expert evidence is best left for the fullness of a trial where review of qualifications and in-court testimony, direct, cross-examination and redirect, are present.

In deciding the question of irreparable harm, the Court held that the level of confusion among prospective customers to be a matter of debate, the expert opinions required closer examination and assessment, and the time to trial was relatively short. Resultantly, Target had not proved on balance of probabilities that it would suffer irreparable harm during the intervening months until a decision is rendered at trial.

The Court further considered the issue of the balance of convenience and determined that the balance favoured INC. In looking back upon the chain of events, the Court noted that INC did not begin expansion with the Target Apparel stores until after the Federal Court of Appeal decision in its favour. At that point, Target had not yet announced its expansion into Canada. The Court held that INC’s decision was not the sort of risk that should be met with the Court’s disapproval. They had taken precautionary steps in the face of Target’s claims: they had inscribed a red maple leaf in a circle rather than using a red bull’s-eye; posted a disclaimer to the effect that it is not Target; and undertaken to maintain records of sales while the litigation is continued. 

No evidence was presented to suggest that Target would be prevented or delayed from opening Target stores in Canada, but the granting of the requested injunction would result in INC having to remove and replace its signage for all stores. Such removal and replacement would not only be costly, but may also suggest instability to INC’s customers, having significant consequences for the company. Consequently, the balance of inconvenience, as it was described by the Court, lay with INC rather than Target. Presumably the matter will now proceed toward trial in November 2012.

The Trade-marks Act defines a certification mark as a type of trademark and sets up a specific regime for its adoption and registration by a person not engaged in the manufacture, sale, leasing or hiring of the wares or services in question, who wishes to license others to use the marks.  With wares a certification mark is intended to signify character or quality, working conditions, the class of persons producing the wares or the area they are produced.

The opponent successfully established that HALLOUMI could not be registered pursuant to section 12(1)(b) of the Trade-marks Act, which precludes registration of a mark contrary to section 10, namely a mark that has by ordinary and bona fide usage become recognized in Canada as designating, among other things, a kind of wares.  The evidence established such usage with regards to the cheese at issue.

On appeal to the Court of Appeal, the Cyprus Ministry of Commerce and Industry argued that the relevant date for an opposition based on section 10 was other than the date of the Registrar’s decision and that the judge had failed to apply the proper burden of proof and assess the evidence.  However, none of these arguments succeeded and the registration was not allowed.

First, a recap of the basic facts.  Alavida obtained a registration of the mark MASTERPIECE LIVING in Canada in 2007 for use in association with various real estate related services.  Its application was filed in December of 2005, based on proposed use of the mark in Canada.  Alavida commenced use of the mark in January of 2006.   Masterpiece Inc. didn’t oppose Alavida’s application, but instead sought to expunge Alavida’s registration, after it issued, on the basis, among other things, that Masterpiece Inc. had used the same or a similar mark in Canada in association with the same or similar services, prior to Alavida’s application being filed and prior to Alavida’s use of the mark in Canada.

At the Trial Division and in the Federal Court of Appeal, Alavida won and its registration was maintained, on the basis of the argument that Masterpiece Inc.’s prior use of the same mark for the same services, even if proven, was limited in time and space and was in a different part of Canada (Alberta) than where Alavida used its mark (Ontario) and that the geographic location of any alleged prior use was a factor to be looked at in determining likelihood of confusion – in essence importing into the analysis, a common law passing off test.

This result was contrary to what most practitioners in Canada assumed the test to be for likelihood of confusion in the context of non-entitlement, based on the wording of the Trade-marks Act, which makes no express reference to the geographic location of prior use in the relevant provisions of the Act.

In today’s decision, the Supreme Court allowed the appeal and held that Alavida’s registration should be expunged on the basis that Alavida’s mark, at the time its application was filed, was confusing with a mark that had previously been used anywhere in Canada by Masterpiece Inc.

Speaking for the unanimous Court, Rothstein J. stated: “In order for the owner of a registered trade-mark to have exclusive use of the trade-mark throughout Canada, there cannot be a likelihood of confusion with another trade-mark anywhere in the country.”

A recent Globe & Mail article reports that PETA had been distributing postcards in a number of bars in Toronto, with plans to roll out the campaign across the country.  The postcards pictured on one side, a cartoon featuring a seal sitting at a bar and asking  the bartender for “Anything but a Canadian Club”.  The other side of the postcard featured a photograph of a hunter about to club a seal.

The North American distributor of Canadian Club Whisky didn’t see the humour in PETA’s cartoon and sent a cease and desist letter, claiming that the publication had caused degradation of Canadian Club’s corporate image and damage to its brand and trademark.

In response to the demand letter PETA agreed not to send out more postcards and to remove the cartoon from its website.   Notwithstanding its compliance with the demand, a spokesperson for PETA argued that it had the doctrine of fair use on its side, to permit the use of trademarks for parody or satire.  Unfortunately for PETA, fair use is a U.S. doctrine that doesn’t apply in Canada in the context of either copyright or trademarks.

At issue was whether the use of keyword advertising by VCC, which is the operator of a private college, was offside the provisions of a Bylaw of the Agency, which is a regulatory body created by the Private Career Training Institutions Act of British Columbia.  The Bylaw in question states that an institution such as VCC “must not engage in advertising … that is false, deceptive or misleading.  Deceptive advertising includes but is not limited to an oral, written, internet, visual, descriptive or other representation that has the capability, tendency or effect of deceiving or misleading a consumer“.   The Agency went further and issued a guideline for interpretation of this Bylaw which specifically stated that keyword advertising and other similar practices would constitute false, deceptive or misleading activity.

In this case VCC purchased keywords of competitor institutions, so that when someone entered the name of the competitor in a GOOGLE or YAHOO! search, as well as the organic search results that would turn up for the competitor, such searches would also turn up prominent sponsored links or advertisements for VCC at the top of or to the right of the organic search results.  The Agency brought the initial action in the Supreme Court of British Columbia, seeking an injunction against the keyword advertising of VCC, relying on the Bylaw.

We reported on the trial decision in this case in an earlier post.  The trial Judge found that VCC’s keyword advertising was not in contravention of the Bylaw.   In coming to that conclusion, the Judge relied on various factors and reasoning.  One such factor was the Judge’s finding that the meaning of the word “misleading” in this consumer protection legislation could be discerned from Canadian jurisprudence on the issue of confusion in trademark law.   Another factor was an analogy that the keyword advertising in issue was akin to one competitor putting its ad in the YELLOW PAGES directory on the same page as an ad or listing for a competitor.

The Court of Appeal agreed, for some of the reasons raised by the Trial Judge, that VCC’s activity was not false, deceptive or misleading activity, such that it was offside the relevant legislation.  The Court of Appeal did not, however agree that a trademark analysis was relevant to the decision and it also held that the analogy of keyword advertising to a YELLOW PAGES ad was not correct given the differences in the technology involved in each activity.

We’ll let you know if there is an Appeal of this decision to the Supreme Court of Canada - highly unlikely given that all three Justices of Appeal concurred.  In the meantime, we’ll have to wait for a keyword advertising case where trademark issues are front and centre.

The Applicant’s new affidavit sought to introduce evidence that employees of the company had included promotional flyers bearing the trademark at issue when shipping other goods to customers.  On cross-examination the deponent acknowledged he was not personally involved with the flyers.  The Federal Court concluded that this evidence met the criteria of reliability and necessity required by the Supreme Court of Canada decision, R. v. Smith, particularly in the context of section 45 proceedings which are intended to be expeditious and straightforward.  The Court noted that other cases had accepted the reliability of evidence given by individuals who operate businesses.  The evidence was also necessary since requiring evidence from several employees would not be consistent with the summary procedure intended for section 45 proceedings.

The Court was also satisfied that the new evidence would have affected the Registrar’s decision.  The affidavit before the Registrar had used the present tense when explaining that promotional flyers were sent out and the Registrar could only conclude that the procedure was in place at the time the affidavit was sworn and not during the earlier three-year period at issue in the section 45 proceedings.  The new evidence specifically addressed that oversight.

Finally, given the low threshold of use required for a section 45 proceeding, the Court was satisfied that the trademark was used as registered. The use of a surrounding square and the addition of three letters connoting a product model identifier did not mean the trademark was not used as registered.

By way of background, Glaxo registered its mark (depicted right, below) in May of 2007. A collection of generic drug manufacturers brought a Federal Court application to expunge the mark about 6 months later, alleging that the mark was not distinctive.

In its decision, the Federal Court concluded that for the mark to be distinctive the constituency of consumers for the inhaler (including physicians, pharmacists and patients) must relate the trade-mark to a single source, and thereby use the mark to make their prescribing, dispensing and purchasing choices. In market sectors where purchasing decisions are made by or on the advice of professionals, commercial distinctiveness of such marks will be inherently more difficult to establish: such persons will make purchasing or prescription decisions based on the specific properties of the product, and not on the packaging or marks associated with those products.

However, the Court went further to suggest that the distinctiveness of a mark based on colour and shape may also be diminished by its association with a registered trade-name, noting that “where a pharmaceutical product is always used in direct association with a well-known word-mark, the risk of customer confusion will be diminished, if not entirely absent, where a look-alike product is presented for purchase with a different brand name.”

In this case, because the Glaxo inhaler was always labelled with other indicators of source, the Court concluded that Glaxo’s evidence was not sufficient to support its claims the mark was distinctive – largely because it had adduced only a small amount of evidence regarding the extent to which the mark, independent of other factors, served to lead the relevant constituency to decisions about prescribing, dispensing and purchasing.  The Court concluded that while colour and shape may help patients identify what is inside the device, they do not necessarily serve as a signifier of source – and in any event, do not play this function at the point of sale.

This decision was upheld at the Federal Court of Appeal: there, in a brief decision the Court stated that it could not identify any palpable or overriding errors in the underlying decision to merit disturbing the lower court’s findings.

This case provides a stark reminder of the challenges associated with adducing evidence to support the use and distinctiveness of marks that are constantly used in tandem with other indicators of source – whether other marks, trade names or the like.  In such cases, it may prove difficult to establish the extent to such mark serves to act as an indicator of source, separate and apart from those other indicators – and this will be particularly true where the mark in question may be viewed as a secondary indicator (whether for reasons of design, the means by which the target constituency selects products, or otherwise).

Glaxo has now sought leave to appeal to the Supreme Court of Canada. We’ll keep you posted on the progress of the case.

The Registrar had refused registration of this mark on the basis that it was clearly descriptive of the character of the claimed services, contrary to S. 12(1)(b) of the Trade-marks Act.   On appeal, the Federal Court agreed, finding that the word TEACHERS’ in its plural and possessive form, is a distinguishing feature, and therefore the character, of this pension plan because it is a pension plan for teachers.  It clearly describes a prominent characteristic of the wares or services provided.  According to the Court, providing the applicant with a monopoly on the use of this word would prevent other pension or financial services targeted to or belonging to teachers within Ontario or in other provinces and territories from using the term.

This dispute highlights the need for businesses, restaurant and otherwise, to register their trademarks in Canada and to register them sooner rather than later, since once a registration issues, it grants the registered owner the exclusive right to use that mark or one that is confusingly similar, throughout Canada in association with the claimed goods and services, even if that owner has only used its mark in one city or region of Canada.

In this case, the Vancouver owner waited until May of 2009 to file applications to register its SALT TASTING ROOM  and SALT marks, even though it claims in both applications to have used those marks since July of 2006.   Because of the timing of the start up of the Toronto restaurant and the current status of those applications, the position of the parties is murkier than it might otherwise be.  What further muddies the waters are several prior registrations for marks in Canada that include the word “Salt” that are registered to other entities.

As another recent article notes, the restaurant industry is no stranger to trademark issues, including the lawsuit recently launched by the Wild Wing restaurant chain in Aurora, Ontario against Buffalo Wild Wings, a United States franchise operator that is expanding into Canada.

The fact that the Salt story involves restaurants in Vancouver and Toronto is also of interest, given that we are waiting to hear how the Supreme Court of Canada will rule in Masterpiece Inc. v. Alavida Lifestyles Inc. where one of the issues is the likelihood of confusion between similar marks used in two geographically distinct areas; in that case, in the context of the ability of an earlier user’s ability to block a later user’s application for registration.