2011

Trademark Expungement Proceedings: Standing as a “Person Interested”

By In Case Law, Protection & Enforcement

In McCallum Industries Ltd. v. HJ Heinz Co. Australia Ltd., the Federal Court dismissed the applicant’s action to expunge the respondent’s trademark under s. 57(1) of the Trade-marks Act.

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. Read more

Trademark Interlocutory Injunction Denied to Target

By In Case Law, Famous Marks

In Target Brands Inc. v. Fairweather Ltd., the Federal Court of Canada refused to grant the interlocutory injunction sought by the American retail chain, this recent application being part of a continuing battle.

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.

Counterfeit Goods: Significant Statutory and Punitive Damages

By In Famous Marks, Protection & Enforcement

We have been following the line of cases dealing with counterfeit goods and the resulting damage awards, and note the most recent case from the Federal Court makes clear that a tougher approach to trademark  and copyright infringement can now be expected in Canada.  In Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., the Court awarded significant damage awards as well as punitive damages against the three defendant companies and their principals.

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.

Certification Marks: Decision Affirmed by Court of Appeal

By In Case Law, Registration

An earlier blog discussed a Federal Court decision, agreeing with a decision of the Registrar of Trade-marks and preventing the registration of a certification mark, HALLOUMI, in association with cheese.  In The Ministry of Commerce and Industry of the Republic of Cyprus v. International Cheese Council of Canada, the Federal Court of Appeal affirmed the decision.

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.

Sunrise For .xxx Domains Is Now Open

By In Domain Names, Protection & Enforcement

As reported in our recent Knowledge Bytes publication, today marks the beginning of the Sunrise period for the new .xxx domain.   Owners of registered trademarks who are not part of the adult entertainment industry may and should apply to block their registered marks from becoming part of a domain name with the new .xxx generic top level domain.  This Sunrise period is in effect until October 28, 2011.  Different Registrars are charging different amounts for this service, so shop around.

CIPO Approves New Wares and Services Descriptions

By In Legislation, Registration

The Canadian Intellectual Property Office (CIPO) today announced the approval of over 500 new or changed wares (goods) and services descriptions in its online Wares and Services Manual.   This is the Manual that the CIPO Examiners refer to when reviewing applications for registration of trade-marks under the Trade-marks Act (the Act).   Under Section 30(a) of the Act, an applicant is required to describe its claimed wares and services in ordinary commercial terms. 

While certainly not exhaustive of all of the descriptions that an Examiner will consider to be acceptable, if an applicant’s wares and services can fit within the approved descriptions in the Manual, the processing of the application is likely to be much smoother.  

The complete list of descriptions that were approved as of today can be accessed by typing the query “2011-09-07” as a search term in the online Wares and Services Manual.  These changes relate almost entirely to descriptions of wares, with only a few new service descriptions.  Notable changes to the services descriptions include “online social networking services”, “real estate development” and “resort services”.  This is somewhat disappointing in that rapid ongoing changes in online service delivery (e.g. social media, cloud computing, outsourcing and the like) and technology continue to far outpace changes to the Wares and Services Manual and challenges often arise in attempting to obtain approval for descriptions of new wares and services.

Practitioners continue to eagerly await the implementation of many new wares and services descriptions called for in the Trilateral Agreement – see our earlier post on this topic.