An earlier blog reported that the organizers of the Beijing 2008 Olympic Games have threatened legal action against pranksters who mock the Olympic brand through the use of spoofs or parodies on the Internet.

We do not propose to comment on trademark law in China. However, a review of the Canadian law indicates that in the Canadian trademark context, legal actions against pranksters poking fun, even with malice, are not likely to be successful. The Canadian Trade-marks Act is of little assistance if the pranksters do not use the marks for a commercial purpose or if the marks have been humourously altered to the extent that it is apparent to the average person that the parodies are not the work of the trademark owners.

In bringing an action the trademark owner must prove that there has been, pursuant to section 22 of the Trade-marks Act (the “Act”), a depreciation of the goodwill attaching to the owner’s registered trademark. Given the wording of section 22, there must also be commercial use of the mark.

In the leading case of Cie Générale des Éstablissements Michelin-Michelin & Cie v. C.A.W. – Canada (1996), 71 C.P.R. (3d) 348 (F.C.T.D.) (“the Michelin case”), the defendant attempted to unionize the workers of Michelin North America (Canada) and handed out pamphlets to employees parodying the Michelin corporate logo, namely the Michelin Tire Man, a beaming marshmallow-like rotund figure composed of tires. The pamphlets depicted a broadly smiling Michelin Tire Man with arms crossed, his foot raised, seemingly ready to crush underfoot an unsuspecting Michelin worker together with the caption, “Bob, you better move before he squashes you”.

The Court held that handing out pamphlets to recruit members into a trade union did not qualify as a commercial activity (i.e. use in association with wares or services) under section 4 of the Act. Moreover, the use of the trademark as a parody could not be said to depreciate the goodwill of the registered mark under section 22 because the menacing depiction was not likely to confuse the average customer that the altered mark originated with the registered owner. It is worth noting, however, that the plaintiffs were successful with their claim of copyright infringement in respect of which the Court ruled that parody was not a form of criticism, a defense to copyright infringement under what is now Section 29 of the Copyright Act.

The Michelin case was followed in British Columbia Automobile Assn. v. Office and Professional Employees’ International Union Local 378 2001, BCSC 156. This was another labour relations situation where the Court ruled that the use by the defendant of the plaintiff’s trademark for the non-commercial provision of information on the Internet did not constitute depreciation of the goodwill of the registered trademark even though one of the purposes of the website was to discourage members of the public from doing business with the plaintiff. The defendant was entitled to express its position and speak freely provided it did not violate section 22 of the Act and that “to accept the plaintiff’s argument, that the reference to an employer’s trade-mark to identify a Union site depreciates goodwill associated with that trade-mark would be a result that goes far beyond what Parliament intended by s. 22”.

An earlier case provides an illustration of a true commercial use. In Source Perrier (Société Anonyme) v. Fira-Less Marketing Co. Limited [1983], 2 F.C. 18 (T.D.), the defendant sold bottled water for $1.00 under the name “Pierre Eh”, a humourous reference to the Canadian Prime Minister at the time. The bottles were designed to resemble those used by the plaintiff, but included a disclaimer that the bottles were not to be confused with those of the plaintiff.  The Court found that this use led to depreciation of the plaintiff’s goodwill because the defendant’s commercial spoof of the plaintiff’s marks and image tended “to dilute the quality of the plaintiff’s trade-marks, to impair its business integrity established over the years, and to cause injury to its goodwill”.

Thus, trademark owners, before pursuing pranksters, will want to determine whether there is commercial use of a registered trademark, or, possibly, an infringement of copyright. Otherwise, the trademark owner may be forced to see (and live with) the humourous side of a prankster’s efforts.

There were three cases out of the Federal Court in December 2006 that are of interest.

In Omega Engineering, Inc. v. Omega SA, 2006 FC 1472, the Applicant was the owner of the trade-mark OMEGA and three related marks for use in association with scientific and industrial clocks and timers, amongst other measuring instruments used in science and industry. The Respondent was the owner of the mark OMEGA & Design for use in association with, among other things, “appareils techniques et scientifiques pour l’électricité, l’optique, la télégraphie, le cinéma, la radio, la téléphonie, la télégraphie, nommément: la cellules photo-électriques, portails à contact, compteurs enregistreurs sur bande de papier, pistolets de start à contacts électriques” (roughly translated as “scientific and technical instruments for electricity, optics, the cinema, radio, telegraph and telephone, namely photocells, contact points, recording meters on paper tape, starting guns with electrical contacts”). The Applicant sought to have the registration for OMEGA & Design amended to change the general description to another general classification or, alternatively, have the mark removed from the Register on the basis that it had been abandoned.  Interestingly, the Respondent had registered its mark in 1895 and had commenced separate opposition proceedings as against the Applicant. The Applicant had initially brought a section 45 proceeding (“non-use”) seeking to expunge the registration for OMEGA & Design. That application proceeded to the Federal Court of Appeal where the Court found that the mark could not to be expunged for non-use and that the trial judge could not amend the statement of wares on a section 45 proceeding.

The Applicant’s further application also failed. The Court held that there was evidence that the Respondent’s wares fell within the general classification and it was not open to the Court on a section 57 proceeding to substitute another general description of the wares. The latter could only be achieved in the course of opposition proceedings. The Court also concluded that the Respondent’s mark had not been abandoned and that there was use of OMEGA & Design with the specific wares that followed the general classification.

In International Taekwon-Do Federation et al. v. Choi et al., the International Taekwon-Do Federation (ITF) and its Canadian affiliate, the Canadian Taekwon-Do Federation International (CTFI), brought a section 57 (expungement) application arguing that the trade-marks registered by the Respondents were invalid (TAE KWON-DO & Design, along with 3 others). The Respondents were a former officer of the ITF and a joint venture between him and his father, the original founder of the ITF. The Court agreed that the marks were invalid, noting that the Respondents were not entitled to register the trade-marks because they would be confusing with marks that had been previously used by the Applicants. Also, any use that the Respondents might have made of the marks would have been use on behalf of the Applicants given that the individual Respondent and his father were officers of the ITF and had a fiduciary duty towards it. Moreover, the marks could not be said to be distinctive of the Respondents’ wares or services given the Applicants’ prior use of the same marks. The Court also noted that an importer or agent has no right to register a trade-mark owned by a foreign principal under his own name and for his own benefit. In this regard, the Court relied on Citrus Growers Assn. Ltd. v. William D. Branson Ltd. (1990), 36 C.P.R. (3d) 434.

In Jagotec AG v. Riches, McKenzie & Herbert LLP, the Applicant successfully appealed a decision of the Registrar of Trade-marks to expunge its mark under section 45 for non-use. On the Appeal, the Applicant was entitled to file additional evidence that was not before the Registrar of Trade-marks. Although the evidence was from the original owner of the mark and not the Applicant itself, there was evidence that in the three years prior to the section 45 proceeding being commenced, the trade-mark was used through the sale of the wares in Canada in containers or packages bearing the words VISIBLE YOUTH.

There were five Canadian trade-mark cases of note in October. Interestingly, in four of them the Federal Court allowed appeals from the Opposition Board and in three of those cases the appeal was allowed on the basis of new evidence allowed to be filed at the appeal stage.

City Optical Holdings Inc. v. The United States Shoe Corporation was an appeal from a decision of the Opposition Board which refused registration of THE INVINCIBLES for use in association with eyeglass lenses and related wares on the basis that it was confusing with the opponent’s mark, INVISIBLES for  ophthalmic (sic) lenses. The Applicant filed further evidence on appeal, as it was entitled to do. The Opponent chose not to contest the appeal. The Court allowed the appeal on the basis of the further evidence since there was no evidence of actual confusion and different channels of trade.

The appeal from the Registrar in Minolta-QMS, Inc. v. Tsai was also allowed, again on the basis of new evidence filed on appeal. Minolta’s opposition to the registration of MAGICOLOR in association with electrical wire, namely shielded, unshielded and insulated electric wire, cable and cord was dismissed by the Opposition Board. Minolta had not filed evidence in chief and the Board ruled that much of the evidence filed in reply by Minolta was not proper reply evidence. On the basis of the new evidence filed on appeal, it was clear that as of the date Minolta filed its opposition the MAGICOLOR mark was not distinctive, Minolta having had previous use.

In Fairweather Ltd. v. Registrar of Trade-marks, the Court, also on the basis of new evidence allowed on appeal, set aside the Registrar’s decision under section 45 expunging Fairweather Ltd.’s mark TARGET APPAREL. Fairweather had acquired the mark following the receivership of another company and the Opposition Board was not satisfied that the mark had been used or that there was a serious intention to use the mark. The new evidence on appeal demonstrated that Fairweather had taken concrete steps, including the development of artwork by employees of a related company. There were also actual sales, although these were subsequent to the issuance of the section 45 Notice.

In Smart & Biggar v. Jarawan the Court allowed the appeal from the Opposition Board’s decision that the Registrant of the mark, AL-RIFAI ROASTERY (MAHMASAT) had demonstrated use in the last three years in accordance with section 45 of the Trade-marks Act. The Court noted that the standard of review was one of reasonableness.  Given the vague and imprecise Affidavit filed by the Registrant, it was not reasonable for the Hearing Officer to have concluded there was use.

Petrillo v. Allmax Nutrition Inc. was a motion for summary judgement. The Court concluded that no genuine issue for trial existed against the personal defendant Mr. Kichuk for the alleged infringement of the ISO-FLEX trade-mark. The Court examined the law regarding the personal liability of directors and officers and the principles governing summary judgement, concluding there was no evidence to support the assertions in the Statement of Claim that Mr. Kichuk incorporated his companies or pursued a course of conduct through the companies intended to infringe the Plaintiff’s trade-mark.

There are two trade-mark cases from the Canadian Courts in September 2006 of interest to readers.

In Cafe’ Do Brasil, S.p.A. v. Walong Marketing Inc., the Federal Court agreed with the applicant, an Italian food products company, and expunged a registered trade-mark owned by the respondent. The respondent’s registered trade-mark, KIMBO, was identical to the trade-mark that the applicant had obtained a registration for in Canada in 1990 and had used in Canada since 1992. In 2003, the applicant filed an application to expand the registration of its KIMBO trade-mark, but was informed that the Canadian Trade-mark Office objected to the registration of its KIMBO trade-mark in relation to the additional wares because it was confusing with a KIMBO trade-mark owned by the respondent. The record disclosed that expungement proceedings had been initiated in 1999 which resulted in the expungement of the applicant’s KIMBO trade-mark. However, the applicant had not received actual notice of the expungement proceedings in 1999. The Court held that the application was properly before it since the applicant met the definition of an “interested person”, having not received actual notice of the expungement proceedings. The Court further held that at the time of the first use of KIMBO by the respondent’s predecessor company in 1995, there was a reasonable likelihood of confusion between the two parties’ trade-marks. As a result, the respondent was not entitled to register its trade-mark and it was therefore invalid and was expunged from the Register.

In Community Credit Union Ltd. v. Registrar of Trade-marks, the Federal Court refused to set aside the Registrar of Trade-marks’ refusal to register the trade-mark COMMUNITY CREDIT UNION. With regards to the “clearly descriptive” ground of opposition, the Court held that it was not unreasonable for the Board not to have considered this ground. The Court further stated that if they were wrong in this regard, it was satisfied that the mark was clearly descriptive of the character of the services to be provided by the applicant in association with its use, and that registration of the mark COMMUNITY CREDIT UNION would remove the word “community” from the vocabulary available to others providing credit union services. With regards to distinctiveness, the Registrar had concluded that the mark was inherently non-distinctive because there were numerous credit unions in Canada that used “Community Credit Union” in their trade-marks or trade names. While a mark may become distinctive in a particular geographical area, the court held that there was considerable evidence before them and before the Registrar that the mark was commonly used within the trade in every region and that circumstances pointed to an absence of distinctiveness.

Summer is a quiet time for the Canadian courts. Looking back at July and August, there are three decisions that deserve a brief summary:

In Ratiopharm Inc. v. Laboratories Riva Inc., the Federal Court dismissed the plaintiff’s action alleging infringement of its registered Canadian trade-mark. The plaintiff sold a codeine based cough syrup under the mark CALMYLIN, while the defendant sold a similar codeine based product under the mark DAMYLIN. At trial there were two issues to be heard: (1) Did the plaintiff have standing to sue? and (2) Is DAMYLIN likely to be confused with CAMYLIN within the meaning of section 20 of the Trade-marks Act? With regards to standing, the court held that the license requirements of the Trade-marks Act had been satisfied and as such and the plaintiff had standing to commence an action for trade-mark infringement. With regards to the issue of confusion, the court held that there was no likelihood of confusion between CAMYLIN and DAMYLIN in the mind of the average consumer, even if hurried. The plaintiff’s action for trade-mark infringement was dismissed.

In DJang v. Ji, a decision of the British Columbia Supreme Court, the plaintiffs sought an interlocutory injunction restraining the defendants from marketing certain herbal products under names for which the plaintiffs had registered Canadian trade-marks. The plaintiffs also alleged passing off and a breach of the British Columbia Trade Practice Act. The Court applied a two-pronged test for granting interlocutory injunctions, holding that while there was a fair question to be tried, the balance of justice and convenience did not favour the injunctive relief sought by the plaintiffs since there was no convincing evidence of the totality of factors to establish irreparable harm. In the end, the Court declined to grant the interlocutory injunction.

Tradition Fine Foods Ltd. v. Group Tradition’l Inc., was an appeal to the Federal Court from a decision of the Trade-marks Opposition Board (the “Board”). The Board had rejected the applicant’s opposition to the respondent’s registration of BAGEL TRADITION’L and design. Upon reviewing the Board’s decision, the Court held that it was open to the Board to dismiss the applicant’s opposition on the ground of confusion. The Court found there to be almost no points of resemblance between the applicant’s TRADITION and TRADITION FINE FOODS trade-marks and the respondent’s proposed trade-mark when the trade-marks were considered in their totality. In the Court’s view, the Board had properly considered all the factors set out in subsection 6(5) of the Trade-marks Act. The Court further held that the applicant had not met its burden of proving that the word “TRADITION’L” or the imagery of the bagel and wheat sheaves was clearly descriptive of the intrinsic quality of bagels.