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.

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.

For example, the Vancouver Province is reporting that the Boston Pizza chain has temporarily (and wisely) rebranded itself as Vancouver Pizza, for the duration of the series. 

Earlier in the playoffs, a local automobile dealership that was using the phrase “Go Canucks Go” and the team’s logo on the window of the dealership premises, received a cease and desist letter from the offices of the National Hockey League, demanding that the references to the CANUCKS word mark and logo be removed from their window.

No doubt as the series cranks up, other local businesses will find equally creative ways to get in on the action.

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.

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.

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.

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.

The Court found that although Target’s trademark was valid as of January 2007, it was not durable and lost its distinctiveness when Target failed to re-open open a market by 2009.  However, the Court proceeded to find that Lions’ actions in 2008 were confusing to visitors (but not to vendors) of the market in breach of section 6(5) of the Trade-marks Act.  The Court found that since Lions had lost money operating its market, there could be no accounting of profits but only an award of $15,000 in damages for copyright infringement and the tort of passing off.  The Court held Paul Cheung jointly liable with Lions and issued an injunction preventing Paul Cheung and Lions from operating their market in a manner which was a “substantial reproduction” of Target’s site plan.

Paul Cheung and Lions appealed the Court’s decision and a 15 page judgement was issued by the Federal Court of Appeal on October 5, 2010.  Paul Cheung and Lions contended that the Federal Court was mistaken in finding that Target had a valid enforceable trademark, and that Target suffered damage, both of which are necessary for a court to have jurisdiction to entertain a claim for passing off under the Trade-marks Act (the existence of goodwill and deception due to misrepresentation being the other requirements).  Further, Paul Cheung and Lions argued that the Federal Court was mistaken in finding them jointly and severally liable and in enjoining them from operating their market.  Target cross appealed claiming that the Federal Court was mistaken in finding that its trademark lost its distinctiveness by 2009 and in awarding inappropriate injunctive relief.

The Court of Appeal quickly disposed of the appeal with respect to the existence and durability of Target’s trademark by holding that these were questions of fact that could only be overturned by an appellant court in the case of an overriding error by the trial court, which did not exist in this case.  The Court of Appeal proceeded to address the issue of whether Target had suffered damage.  Paul Cheung and Lions argued that there was no damage to Target because it had ceased to operate its market before any infringement of its trademark had taken place and that potential damage did not satisfy the test for passing off.  However, the Court of Appeal found that there was damage caused to Target because it lost control over the “impact of its trade name” and a “potential impediment to its using its trade mark when re-entering [business]” was created.  Therefore, the Court of Appeal did not decide whether mere potential damage satisfied the test for passing off.

The Court of Appeal found that Paul Cheung could be held jointly liable with Lions because even before Lions was incorporated, he undertook “wilful and knowing pursuit” of a course of action that was likely to constitute infringement of Target’s intellectual property rights.

With regards to the scope of the injunction against Paul Cheung and Lions it was held that the Trade-marks Act did not allow an injunction against further operation of the market in any manner, but only against further infringement of Target’s intellectual property.  The Court of Appeal modified the wording of the injunction accordingly.