Bonhomme, Maclean’s “meilleurs amis”

In an update to a story we shared with you a few weeks ago, a report today that the organizers of the Quebec Winter Carnival and Maclean’s magazine have reached a settlement regarding Maclean’s use of the image of Bonhomme – mascot of the Carnival – as part of a cover image promoting an article on corruption in Quebec.   While Carnival organizers confirmed the settlement and advised that they were “pleased”, specific terms of the settlement were not disclosed.

Loss of Control of Trademark Constitutes Damages for Passing Off

This blog previously reported on the Federal Court’s decision in Target Event Production Ltd. v. Paul Cheung and Lions Communications Inc. In that January 11, 2010 decision, the Court considered the trademark and copyright infringement claims of the Plaintiff, Target Event Production, which arose when the Defendants, Paul Cheung and his company Lions Communications, operated a Chinese night market beginning May 2008 in the location where Target had previously run a similar business until late 2007.  Specifically, Target’s claims were based on Lions’ use of a name similar to the “RICHMOND NIGHT MARKET” trademark owned by Target, as well as Lions’ use of a nearly identical site plan and vendor registration form.

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. Read more

Is There a Trademark Enforcement App For That?

News today that Apple is about to obtain a US trademark registration for “THERE’S AN APP FOR THAT”.

Filed in 2009, Apple’s initial application covered both wares and services.  However, following a recent division and filing of evidence of use, the USPTO approved the registration of the mark for use in association with retail store services and various online services, including app recommendations.  Additional claims pertaining to various wares and to telecommunication services remain in the divided parent application, and Apple  has obtained an extension of time to file use information on those points.  (In Canada, Apple filed an application for “THERE’S AN APP FOR THAT” this past May; it remains pending with CIPO.)

With a registration nearly in hand, it is unclear is whether Apple plans a campaign to aggressively enforce its mark.  In addition to Apple’s use, the mark and its derivatives have been widely referenced in the US – most notably by Verizon in its “There’s A Map For That” advertising campaign (intended to mock the limited coverage of Apple’s exclusive US carrier, AT&T).  An “app for that” catch-phrase generator, “App For That“, was also developed.  And writers seem to love using the phrase in their article and blog headlines.

In this light, one wonders if such uses of the mark and its derivatives reinforce or dilute the mark’s association with Apple. If the latter, Apple will have to go on the offensive to protect its rights, lest it lose them.

We’ll keep you “app”-rised of new developments.

Bonhomme’s Bad Day

There has been considerable coverage this week about the Maclean’s magazine article on alleged corruption in Quebec.  The magazine’s cover (which can be seen here) depicts the well-known mascot of the Quebec City Winter Carnival, Bonhomme Carnaval, clutching a briefcase bursting with money.

Perhaps unsurprisingly, the article quickly elicited a loud hue and cry from politicians, both federal and provincial alike.  The resulting pressure was so intense that Maclean’s publisher – Rogers Publishing – felt compelled to issue an apology, noting that both the article and the cover image promoting it had clearly rankled some readers, and expressing regret for any offence caused.

In addition to being quite eye-catching (at least for Canadians), the cover raises an interesting trademark issue.   Specifically, the association of Bonhomme Carnaval with an article on corruption might be argued to lessen the goodwill in the mascot itself.  (To be clear, there is no suggestion in the article that Carnival organizers are corrupt.)

While the Carnival owns several trademark registrations for depictions of Bonhomme, it would be difficult to argue that Bonhomme’s image was being used as a trademark, or that anyone was confused as to the source of goods following the depiction of Bonhomme on the Maclean’s cover.

Though section 22 of the Trade-marks Act contemplates an action may be brought for depreciation of goodwill, it also appears that the tests associated with such a claim would be difficult to make out for similar reasons.

Nonetheless, the Carnival is seeking advice from counsel in order to determine what action, if any, it can take to protect Bonhomme. We’ll keep you posted on whether or not this dispute gets any more (ahem) …frosty.

Contempt of Court: Compounding a Trademark and Copyright Breach

In 9038-3746 Quebec Inc. v. Microsoft Corporation the Federal Court of Appeal upheld a sentence for contempt, one of several court decisions and orders arising from trademark and copyright infringements dating back to the 1990’s. 

In the 2006 decision, Microsoft Corporation  v. 9038-3746  Quebec Inc., two corporate defendants and an individual found to be the controlling mind, Carmello Cerrelli, were ordered, jointly and severally, to pay statutory damages under the Copyright Act of $500,000 and punitive damages of $100,000 each.  Permanent injunctions were also issued enjoining the defendants from directly or indirectly infringing Microsoft’s trademarks or selling, distributing or advertising counterfeit copies of the twenty-five computer programs that were at issue in the proceedings.  Subsequently, Microsoft was also awarded costs of $1,410,000 plus the Canadian equivalent of $175,715.23 USD.

Notwithstanding these significant awards, the defendants violated the injunctions and continued to sell the software.  Microsoft brought contempt of court proceedings and Cerrelli plead guilty to: (1) violating the Court Order by selling seven counterfeit copies bearing the trademark MICROSOFT and possessing for the purpose of selling 545 counterfeit units bearing the trademark MICROSOFT; and (2) possessing for the purposes of selling 88 counterfeit units that constituted a breach of copyright.

In oral reasons the Federal Court ordered Cerrelli to pay $50,000 for each offence within 120 days, failing which he would serve a 60 day term of imprisonment.  Cerrelli appealed, but the Federal Court of Appeal found no reason to overturn the lower Court’s order, finding that there was no error in principle, failure to consider a relevant factor or overemphasis of the appropriate factors.  Moreover, the sentence was not demonstrably unfit.  The Court of Appeal referred back to the original judgment and the finding that Cerrelli “had little regard for the truth at discovery or trial” and “acted in bad faith”.  It was also noted that Cerrelli had sought to transfer his residential property for $1.00 following the judgment.  In upholding the sentence the Court of Appeal sought to “deter the offender from repeating his unlawful behaviour as well as other persons who would be tempted to commit the same offences”.

Survey On Preparation For New gTLDs

A survey is now being conducted by World Trademark Review (WTR), seeking input from marketing and trademark professionals as to their views on how industry is preparing for the impact of the new generic top level domains (gTLD) that ICANN (the Internet Corporation for Assigned Names and Numbers) appears to be pushing forward with.    The survey is supported by a number of domain name and brand protection service providers, trademark owner associations and professional marketing associations.

As previously reported on this blog, ICANN proposes to expand beyond the current gTLDs, of which there are 21, including .com, .org and .net.  Under the proposed expansion, any company will be permitted to set up its own domain registry under any term –  for example .cars, .honda, .mapleleafs, .canucks and pretty much anything else will be possible.  This development obviously has huge implications for all brand owners.

WTR’s survey is intended to provide a sense of how well prepared brand owners are for this coming change.

First Canadian Decision on Keyword Advertising

The British Columbia Supreme Court recently issued the first Canadian Court decision dealing with the use by one party of another party’s trademarks in keyword advertising.  The case involved a defendant, Vancouver Career College (Burnaby) Inc. (VCC), that provides post-secondary career training services under different business names and trademarks.  As part of its internet marketing strategy, VCC, like numerous other businesses, uses keyword advertising, whereby VCC pays search engines such as those provided by GOOGLE and YAHOO! for links to its websites to appear as “sponsored links” or “‘sponsored results” alongside the search engine’s normal search results.  In order to use keyword advertising, VCC selected certain keywords to describe its website, including the business names and trademarks of various VCC competitors.

The plaintiff, the Private Career Training Institutions Agency (Agency) is a provincial regulatory agency charged with overseeing career training institutions that operate throughout the Province of British Columbia.  Acting on complaints received from other career training institutions in the Province, the Agency sought an injunction against VCC’s practice of using the names and trademarks of those other institutions in VCC’s keyword advertising program, on the basis that such use was false, deceptive or misleading.  The Court held that VCC’s keyword advertising program was not false, deceptive or misleading and therefore no injunction was granted.

While framed as a false, deceptive or misleading advertising complaint, rather than a trademark infringement or passing off claim, the Judge in his reasons specifically referenced trade-mark and passing off concepts when looking at the issue of what is confusing or misleading in the context of alleged improper advertising.  The Judge found that what the defendants were doing did not amount to false, deceptive or misleading advertising.  The Judge also held in his reasons that: “I also accept VCC Inc.’s argument that its practice of using Keyword Advertising is no different than the time-honoured and generally accepted marketing practice of a company locating its advertisement close to a competitor’s in traditional media (e.g., placing its Yellow Pages advertisement next to or in close proximity to a competitor’s telephone number  in the same directory so that potential customers of that competitor discover there is another company offering a similar product or service and that they, the consumer, have a choice).”

The Agency has until June 28, 2010 to file an Appeal of the decision, should it choose to do so.