Both Here and There: Trademark Use on Websites Available in Canada

According to a December, 2012 decision of the Federal Court, HomeAway.com, Inc v. Hrdlicka, “a trade-mark which appears on a computer screen website in Canada, regardless where the information may have originated from or be stored, constitutes for Trade-marks Act purposes, use and advertising in Canada.”  This broad statement suggests that the appearance of a trade-mark on a computer screen is sufficient whether or not services are available or performed in Canada.  However, the decision is best understood in context. 

HomeAway.com, which acquired and now operates the well known Vacation Rentals by Owner or VRBO website at VRBO.com, sought to expunge the trade-mark VRBO which Hrdlicka had applied to register in 2009 for use in association with services described as “vacation real estate listing services”.  HomeAway.com sought to establish prior use of VRBO.  HomeAway.com had a computer presence in Canada, but no physical presence.  In analyzing section 4(2) of the Act which states that “a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services”, the Court noted that there was little jurisprudence regarding use by means of a computer screen display.  The Court then adopted the concept that an activity can be “both here and there” from a series of earlier cases involving tax, criminal activity and copyright and sought to interpret section 4(2) “in a manner consistent with modern day realities”, namely “that information which is stored in one country can be said to exist in another; in this case Canada.”

The Court then went on to describe the HomeAway.com business as being “advertising, on its website, homes, apartments and the like owned by third persons who wish to rent them to others”, suggesting that HomeAway.com offers the same services as the Classifieds section of a newspaper.  The Court used the accessing of properties in “Montreal” and “Niagara-on-the-Lake” as examples of how the website might be used.  It is not clear whether there was actual evidence before the Court of Canadians posting and accessing properties on the website, but presumably this was available.

In the circumstances, Hrdlicka’s registration was expunged in light of HomeAway.com’s prior use, the absence of any use by Hrdlicka until 2012 and evidence that Hrdlicka was trying to sell his trade-mark to HomeAway.com.

The question now is whether the mere appearance of a trade-mark in advertising available on a website in Canada is enough to constitute use in association with services.  However, when the statement from the Federal Court is read in context, it would appear that the services must be available to or accessed by Canadians.  Some further case law may be necessary to clarify this point.

Bodum Gets French Pressed by Federal Court In Trademark Dispute

Canada’s Federal Court has recently handed Bodum USA, Inc. (Bodum) another loss in its ongoing fight to enforce its trademark and other intellectual property rights in this country.  In the most recent decision, the Court has found that the Canadian Registration for the trademark FRENCH PRESS is invalid and unenforceable.  This Registration is owned by Pi Design AG (Pi), a related entity to Bodum and the licensor of the mark to Bodum in Canada and covers wares described as non-electric coffee makers.

As a result,  Bodum’s infringement claims against Meyer Housewares Canada Inc. (Meyer) over its use of the FRENCH PRESS mark have been dismissed.  Even worse for Bodum, the Registration for FRENCH PRESS has been ordered expunged on the grounds that it should never have been issued in the first place and even if it was properly registered, that Registration is now invalid on the basis that the mark is descriptive and not distinctive of Bodum as the sole source of the goods that this mark is registered in association with.

When assessing the evidence presented by the parties, the Court found that the term “French Press” was already in widespread use in North America as a generic term describing a popular type of coffee making device in 1995, which Pi was aware of when it sought to register the mark in Canada and thereby claim exclusive rights to the mark.  The Registration for this mark issued in 1997.

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In Honour of Black Friday – Big Brand Retailers Fight Quebec Language Law

CBC reports that a group of  well-known retailers, including  WALMART, COSTCO and BESTBUY, are taking the Quebec Government’s French language watchdog to Court over its recent requirement that all retailers have signs that include either a generic French name or add a slogan or explanation to reflect what they are selling.  For example, rather than featuring signage with just the well-known WALMART mark, the Quebec government wants that retailer’s signs to now read “Le Magasin WALMART” or something to that effect.

While Quebec’s French Language Charter requires the name of a business to be in French, until now this requirement hasn’t been applied to registered trademarks by the Office Québécois de la Langue Française (OQLF).  There has been some debate over the last few years about whether unregistered trademarks should be treated the same as registered trademarks in terms of this exemption.  The OQLF is now requiring all signs to include French language, whether or not registered or unregistered trademarks are involved.

For their part, the retailers (also including GAP, OLD NAVY and GUESS) argue that there has been no formal change to the applicable provision of the language law.  Further, they argue that the OQLF has no right to change the application of the existing law and that by changing its policy, it is in effect changing the law.  The retailers also point out that these are all famous brands and through extensive long term use they have come to identify the businesses behind them, such that no one in Quebec needs the assistance of the language law to know what these businesses sell or represent.

Some other popular brand owners, such as KFC or “Poulet Frit Kentucky” as it’s known in Quebec, have already opted to adopt Quebec specific branding, rather than carry on with an English business name.

A trial of this matter is unlikely to take place before the end of 2013.

RIM Wins Right To Continue Using BBM Trademark

Research in Motion Ltd. received some good news late last week, in the form of a Federal Court of Canada ruling that allows it to keep the BBM trademark for its popular messenger service.  BBM Canada, a Canadian television and radio research firm  that has been using the BBM mark for 60 years, commenced infringement proceedings on the basis that RIM’s use of the BBM mark  confused the public.  The Court disagreed, ruling that RIM’s use of the mark could peacefully co-exist with BBM’s use, which the Court said extended only to the field of broadcast measurement services.  News reports on the decisions suggest that BBM will appeal the decision.

Trademark Settlement Agreements: Lost in Translation

A recent Ontario case is a rare example of parties seeking a judicial interpretation of a trademark settlement agreement.  It also emphasizes the importance of understanding all possible translated meanings of a word before committing to refrain from using any translated versions, a challenge that often arises in a bilingual country.

In Skipper Online Services (SOS) Inc. v. 2030564 Ontario Inc., the Ontario Superior Court of Justice considered a settlement agreement that restricted Boatsmart from using translated versions of particular words.  Skipper and Boatsmart were competing companies that administered online training for the Pleasure Craft Operator Card as required by Transport Canada.  The parties had a trademark dispute regarding the words each party could use as metatags, which are “hidden keywords” affecting how the parties appear in search engine results.  The two companies entered into a settlement agreement, wherein Boatsmart agreed to refrain from using the following words or “any reversals, misspellings, translations or plurals” thereof in its metatags:  BOATER EXAM; EXAMEN DE BATEAU; EXAMEN BATEAU; BOATEREXAM; EXAMENBATEAU.

Boatsmart, however, continued to use the phrases “BOAT EXAM” and “BOATING EXAM”, both of which can be translated as “EXAMEN DE BATEAU”.  Skipper sought a declaration that Boatsmart’s continued use of “BOAT EXAM” and “BOATING EXAM” was in breach of the agreement, since the agreement plainly restricted translations of “EXAMEN DE  BATEAU”.

Boatsmart, on the other hand, contended that the agreement was ambiguous, and that the parties never intended to restrict the terms “BOAT EXAM” and “BOATING EXAM”.  It argued that the word “translations” in the agreement referred to translations into any languages other than English or French, since the agreement already included specific terms in English and French.  Boatsmart further asserted that any other interpretation would result in commercial absurdity and go beyond what was necessary for the agreement’s purpose.

The Court found that the plain meaning of the agreement restricted Boatsmart from using the translated terms of “EXAMEN DE BATEAU”, including “BOAT EXAM” and “BOATING EXAM”.  Furthermore, the Court disagreed that the agreement’s context indicated an intention to allow Boatsmart to use the terms.  The purpose of the agreement was to limit as much as possible the parties’ use of certain terms and phrases in relation to their websites, in order to affect the search engine results.  A finding that Boatsmart was restricted from using these terms did not go beyond what was necessary for the agreement’s purpose.  The application was therefore granted.

Social Media: A Lesson for Trademark Owners

A recent Quebec case and the resulting social media criticism provides a cautionary tale for trademark owners who aggressively assert their rights.  Success in the court room may in some instances have a negative impact on goodwill. Trademark owners should be taking social media into account when assessing their litigation options.

Deborah Kudzman, the founder of Olivia’s Oasis, Inc., was embroiled in a lengthy trademark dispute with Lassonde, the Quebec fruit-juice corporation. Kudzman’s company sells olive-oil based beauty products in association with the trademark OLIVIA’S OASIS & Design. Lassonde sells a line of juices in association with the trademark OASIS and other marks that include OASIS. In 2005, Lassonde commenced legal proceedings against Kudzman, alleging that Kudzman’s company was infringing its trademark rights.

In a judgment handed down in 2010, Justice Zerbisias of the Quebec Superior Court rejected Lassonde’s claim. The difference in the nature of the products, together with the visual disparities in the design of the marks, made confusion under s. 6 of the Trade-marks Act highly unlikely. Furthermore, while Lassonde’s juices and Kudzman’s beauty products were sold in some of the same stores, the placement of the OLIVIA’S OASIS products was in a completely different store section – in the non-edible, health and beauty section. Zerbisias J., in quashing Lassonde’s assertion of confusion, explained that “to impute the likelihood of confusion between Plaintiff’s and Defendant’s marks to the average consumer would insult him by assuming that such consumer is completely devoid of intelligence”.

Zerbisias J. also found that Lassonde’s action was an improper use of the legal process. Lassonde’s claim, with the unnecessary injunction application, threatening letters and overly complicated litigious conduct, was deemed to be “menacing and abusive”.  To compensate Kudzman and punish Lassonde, Kudzman was awarded $100,000 to cover her legal fees and $25,000 in punitive damages.

However, Kudzman’s story was not yet finished.  Lassonde appealed.  The Quebec Court of Appeal, while agreeing that there was no trademark infringement, reversed Zerbisias J.’s decision regarding Lassonde’s abuse of process and dismissed the $125,000 award. The Court of Appeal declined to hold that Lassonde’s behaviour was abusive, holding that Lassonde had every right to bring its trademark dispute before the court.

Little did Lassonde know, it was about to be inundated with social media criticism. La Presse, a Quebec newspaper, ran a story on April 7th, 2012 chronicling Kudzman’s battle with Lassonde. Within 8 hours, the story had been shared over 1000 times on Facebook, and #Oasis began trending in the Twittersphere, becoming the most used hashtag in Montreal that day. Hundreds of negative comments flooded Lassonde’s Facebook page. Guy Lepage, a Quebec media star, tweeted his boycott of OASIS juice products in protest to Lassonde’s actions.  Internet users reacted to the David and Goliath scenario that Kudzman’s story represented – almost universally decrying what they saw as Lassonde’s bullying tactics.

Lassonde, undoubtedly sensing a public relations nightmare, decided that same evening to offer a settlement. Although details are not available, Kudzman has assured the media that the settlement sum was similar to the amount that she was awarded in the lower-court decision – and was enough to cover the debts she had incurred during the protracted court case.

Ultimately, Lassonde’s success in the courtroom was irrelevant and it was public opinion as expressed in the social media that mattered. Whether Lassonde might have handled the litigation differently is an open question, but it is clear that owners, when enforcing trademark rights, need to consider the potential impact of social media.

I Hear You Calling – Sound Mark Applications Now Being Accepted

In a reversal of it’s long held position, the Canadian Intellectual Property Office (CIPO) has today announced that it is now accepting applications to register sound marks.  This announcement apparently comes as a result of ongoing Federal Court of Canada proceedings regarding an application filed in 1992 by Metro-Goldwyn-Mayer Studios Inc. (MGM) to register as a trade-mark in Canada, the sound of a roaring lion that precedes most, if not all, of their film productions.  

For many years, CIPO’s blanket policy has been to refuse all applications for sound marks on the basis that Section 30(h) of the Trade-marks Act requires “a drawing of the trade-mark and such number of accurate representations of the trade-mark as may be prescribed” unless the application is for a word or words not depicted in a special form.  The MGM case is the first where the issue of the registrability of sound marks has been dealt with by the Federal Court.

CIPO’s new Practice Notice on applications for sound marks states that “The application for the registration of a trade-mark consisting of a sound should:

  1. state that the application is for the registration of a sound mark;
  2. contain a drawing that graphically represents the sound;
  3. contain a description of the sound; and
  4. contain an electronic recording of the sound.”

This change of tune for CIPO comes on the heels of a recent (and still outstanding) consultation on a number of proposed changes to the Trade-marks Act Regulations, including a proposal to permit registration of non-traditional marks, such as sound marks, motion marks and holograms.  Time will tell how many applicants decide to take advantage of this change of policy.  Certainly, there are a number of well known sound marks in the marketplace and registration of such marks has been possible in other important jurisdictions, such as the United States, for many years.