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 Plaintiffs, Louis Vuitton and Burberry, hired a number of investigators to attend the stores and warehouses of the defendants Singga Enterprises Canada, Altec Productions and Guo (doing business as Carnation Fashion Company), as well as purchase items from their websites. While in attendance at the stores and warehouses, the investigators were shown and purchased a number of counterfeit items including handbags, sunglasses and jewellery, all of which contained unauthorized productions of the Louis Vuitton and Burberry trade-marks. The Plaintiffs were successful in showing that the defendants’ activities of manufacturing, importing, distributing, offering for sale and actual sale of bulk quantities of counterfeit and/or infringing items had been ongoing and, in the case of one of the defendants, had continued after the commencement of the proceeding and the motion for summary trial brought by the Plaintiffs.

The Court noted that none of the defendants, with the exception of the defendant Guo, had filed any materials in response to the motion or attempted to cross-examine any of the Plaintiffs’ affiants on their affidavits. Additionally, none of the defendants, again with the exception of Guo, had attended the hearing of the matter.

Following cases such as Louis Vuitton Malletier S.A. v. Lin Pi-Chu Yang and Louis Vuitton Malletier S.A. et al v. 486353 B.C. Ltd., the Court took a tough stance toward the defendants.  Noting the defendants’ knowing and wilful behaviours, the Court awarded damages for trade-mark infringement of $30,000 for each instance of infringement against the Singga defendants and defendant Guo. Resultantly, the Singga defendants were found liable for a total of $300,000 to the Louis Vuitton Plaintiffs and $180,000 to the Burberry Plaintiffs, and the Guo defendant was required to pay $180,000 to the Louis Vuitton Plaintiffs and $120,000 to the Burberry Plaintiffs.

With regard to the Altec defendants, the evidence showed a high level of importation and inventory turn-over and was held to warrant an award of damages on a turn-over basis rather than simply a per instance basis of infringement. The Altec defendants were required to pay $480,000 in damages to the Louis Vuitton Plaintiffs, and $480,000 to the Burberry Plaintiffs. Additionally, the Singga and Altec defendants were found jointly and severally liable for the activities of the Altec defendants, for which the Singga defendants received a commission, and were required to pay $60,000 to the Louis Vuitton Plaintiffs and $60,000 to the Burberry Plaintiffs.

In addition to the damages awarded for the defendants’ infringement of the Trade-marks Act, Louis Vuitton was found to be entitled to recovery of damages and profits, pursuant to the Copyright Act, in relation to infringement by each of the groups of defendants. Statutory damages for copyright infringement were awarded at the high end of the scale due to the defendants’ bad faith conduct, which was found to be dismissive of law and order, and demonstrating a necessity for deterring future infringements. The Court awarded a total of $40,000 per group of defendants.

Additionally, the Court found that the Plaintiffs were entitled to punitive and exemplary damages as against each of the defendants. Following the earlier cases referenced above, which held that punitive and exemplary damages may be awarded where a defendant’s conduct is “outrageous” or “highly reprehensible” and with little regard for the legal process, the Court awarded punitive and exemplary damages against each of the defendants. The Louis Vuitton Plaintiffs were awarded $200,000 against the Singga defendants, $250,000 against the Altec defendants, and $50,000 payable by the defendant Guo.

Finally, citing the Louis Vuitton cases mentioned above, the Court awarded solicitor and client costs due to the defendants “disrespectful disregard” for the process of the Court, and the higher legal fees and disbursements incurred by the Plaintiffs as a result.

An appeal has now been filed by the Singga defendants, which means that there may eventually be a Federal Court of Appeal decision regarding the awards. We will continue to follow this story.

As regular readers of this blog will recall, the Canadian government enacted this legislation well in advance of the 2010 Vancouver Olympic Winter Games (Vancouver Games), to provide the organizers of the Vancouver Games (VANOC) with another very useful tool in their fight against unauthorized use of numerous trademarks and symbols that are associated with the Olympics generally and more specifically those associated with the Vancouver Games.  Schedule 1 to the OPMA, which sets out various Olympic marks that are not specific to any particular Olympic Games, will remain in force.  Schedules 2 and 3 set out various marks and expressions that are specific to the Vancouver Games and as those games are now part of history, the need to protect those marks and expressions is no longer justifiable.

It was Schedule 3 in particular that raised the ire of some pundits, since it specified that a combination of words from Part 1 with words from Part 2 of that Schedule – including seemingly innocuous combinations of words such as “21st” or “Tenth”, with words such as “Winter” or “Whistler” – could be used as evidence in support of a finding that a person was promoting their business, goods or services in a manner likely to mislead the public into believing that there was an approval, authorization or endorsement by, or a business association with, the Canadian Olympic Committee (COC) or the Canadian Paralympic Committee (CPC).  This, coupled with the ability of VANOC or the COC/CPC to obtain an interlocutory injunction without having to prove that they would suffer irreparable harm, made the effect of these provisions very far reaching.

According to the story, VANOC “has serious concerns of the public being misled into believing there is an association between the 2010 Winter Games and [Scotiabank's] campaign”, though it is unclear as to the specific issues upon which VANOC’s concerns are based.

As evidenced by VANOC’s previous complaints about Lululemon’s winter marketing campaign, VANOC clearly remains concerned about ambush marketing, and is focused on protecting its sponsors.  The Royal Bank of Canada, one of Scotiabank’s competitors,  is an official sponsor of the 2010 Games.

The story indicates that Scotiabank officials and VANOC are in communication “to arrive at a mutually agreeable solution”.

The Federal Court of Appeal agreed with the finding of the lower court judge that there was “no factual foundation for the proposition that the appellant has expanded the scope of its GLAMOUR mark by having licensed this mark to third parties”, since the third parties were merely using Advance’s GLAMOUR magazine and website to advertise their own products.

The clothing line in question features various items in the national colours of Canada, the U.S., Sweden and Germany. Notably, the Canadian hoodies feature gold zippers while the zippers in the colours of other countries have silver zippers. Lululemon lost out to the Hudson’s Bay Company in its bid to be the official apparel supplier to the Canadian Olympic team for the Summer and Winter Games during the period from 2006 to 2012.

Readers of the Knowledge Bytes newsletter will be aware of the legislative hammers that are at VANOC’s disposal to enforce its trademark rights against both would-be infringers and ambush marketers alike. These include the Olympic and Paralympic Marks Act, which contains lists of specific words that either can’t be used at all, or that can’t be used in combination with other specific words–for example the combination of “Vancouver” and “2010″.

Lululemon, for its part says that it carefully did its legal homework and selected a brand that doesn’t fall afoul of any legislative prohibitions. VANOC appears to have conceded this point, indicating that it will use non-legal tactics to attempt to persuade Lululemon to back off.

As the start of the Winter Games quickly approaches, VANOC will no doubt have its hands full with other creative ambush marketing ploys. VANOC has published spectator guidelines about what will not be tolerated at the Winter Games event venues, including “Ambush marketing of any kind, distribution of leaflets, pamphlets and non-approved publications, promotional material and wearables”.

This proposal will be closely monitored by the trademark community as ICANN continues to move forward with its controversial proposal to exponentially expand the number of gTLDs.  The concern of trademark holders is that the task of protecting their brands online, which is already difficult enough with the existing gTLDs, will become prohibitively expensive.

The idea of the IP Clearinghouse was one of the recommendations outlined in the Final Report on Trademark Protection of ICANN’s  Implementation Recommendation Team (IRT).  At the recent ICANN meeting in Sydney, the IRT presented its report. The IRT Final Report was open for public comment until June 29, 2009.   ICANN might not make a final decision on the idea until late 2009, at which time it could potentially decide on a variation of the IP Clearinghouse, depending on the public comments that it receives.

Though it appears to be a moving target at the moment, the launch of the new gTLDs could potentially take place as early as February or March of 2010.

It will be interesting to see what response VANOC has to this, presumably unauthorized, use of its trademarks and copyright protected images by PETA.  Both the Copyright Act  and the Olympic and Paralympic Marks Act contain provisions permitting use of protected trademarks and works for purposes of criticism, however, in this case the criticism is of something seemingly unrelated to the 2010 Winter Olympic Games.

The PETA spoof website has already attracted criticism from the leader of the national Inuit organization in Canada.

The Court found that both marks were inherently weak as both were suggestive of their wares and services but considered whether Advance’s GLAMOUR mark had “an acquired distinctiveness through use and promotion… sufficient to warrant a wide scope of protection”.

The Court determined that while the GLAMOUR mark was well known in Canada in association with magazines (and thus had acquired distinctiveness), it was not associated with all wares and services that make up the glamour industry.  Advance argued that the wares of both parties belonged to the same general class of goods, namely cosmetic, fashion and beauty, but the Court found: “Just because cosmetic products are advertised, discussed, or otherwise featured in Advance’s magazine and related wares does not mean…  that any acquired distinctiveness of the GLAMOUR mark should extend to cover such products.”

Although the Court acknowledged that Section 6(2) of the Canada Trade-marks Act makes it clear that confusion can occur whether or not the wares or services are of the same general class, the Court found: “Even though cosmetics and magazines may be sold in the same stores, the evidence in this case shows that GLAMOUR magazine and Farleyco’s products are sold and advertised in very different ways and are purchased and used in very different ways.”

The Court rejected Advance’s appeal, finding that confusion between the two marks was unlikely: “The evidence suggests to me that consumers are repeatedly exposed to many Glamour trade marks and to the constant use of the word ‘glamour’ in the glamour industry and the marketplace it spawns.  I think it can be assumed in this context that they have become extremely adept at distinguishing between wares and services sold and associated with the word ‘Glamour’, either singly, or in combination with other words, and that they are extremely unlikely to associate Farleyco’s Halloween GHOULISH GLAMOUR products with Advance’s GLAMOUR wares and services.”