Beer, Trademarks and the Jurisdiction of the Opposition Board

Molson Canada 2005 v. Anheuser-Busch, Incorporated, a decision of the Federal Court and another case in an ongoing “beer war”, provides an interesting analysis of the jurisdiction of the Opposition Board. The Opponent before the Opposition Board, Molson, through a predecessor in title, held the registered trademark for the label for Standard Lager:

Standard Lager Mark

(“the Standard Lager Mark”) a beer continuously sold in Canada since 1926, but almost exclusively in the province of Manitoba. Anheuser-Busch, the Applicant before the Opposition Board, had two labels that were registered as trade-marks:

Registered Anheuser-Busch Marks

(“the Registered Anheuser-Busch Marks”). The opposition arose when Anheuser-Busch sought to register an “updated” version of its two previously registered marks (“the Proposed Anheuser-Busch Marks”).

The Federal Court reviewed the litigation history arising in respect of the earlier registered marks, including a 1986 Federal Court of Appeal decision, Carling O’Keefe Breweries of Canada Ltd. v. Anheuser-Busch Inc., which concluded that the Standard Lager Mark and the Registered Anheuser-Busch Marks were confusing, that there was some sort of impropriety when the Standard Lager Mark was originally registered in 1929 since it was inspired by and designed with knowledge of the BUDWEISER label, but Carling (Molson’s predecessor in title) could rely on the equitable defence of laches and thus there was no basis for expunging either the Standard Lager Mark or the Registered Anheuser-Busch Marks.

The Opposition Board allowed the registration of the Proposed Anheuser-Busch Mark as it applied to clothing since Molson had not established that the ambit of protection accorded to the Standard Lager Mark included wares other than beer. With regards to use in association with beer the Opposition Board determined that it could limit the scope of protection afforded the Standard Lager Mark since the Court of Appeal had determined it was wrongfully obtained. Thus, Molson’s opposition with regards to use in association with beer was rejected.

The Federal Court disagreed and allowed the opposition with regards to use in association with beer. The Court was particularly concerned that the Opposition Board had exceeded its jurisdiction, since it is limited in an opposition proceeding to determining if a trademark is or is not registrable. Thus, for example, if there is a confusing mark on the register, the new mark cannot be registered. However, if the existing registration of an invalid trademark is interfering with the registration of a new trademark, it is up to the applicant for the new mark to take the necessary steps, usually an expungement application to the Federal Court, to get the register corrected. In an opposition proceeding, the validity of an opponent’s registered mark is not in issue.

The Federal Court was concerned that the Opposition Board could not limit the ambit of protection afforded the Standard Lager Mark on the basis that the Court of Appeal had questioned the lawfulness of the registration. Indeed, the Court of Appeal had not found the registration of the Standard Lager Mark was unlawful, but had instead found that the registration was not a nullity. Thus, Molson was relying on a valid registration and the question to be answered was whether the Proposed Anheuser-Busch Mark was confusing with the Standard Lager Mark. The Federal Court concluded they were confusing, applying the test in section 6(5) of the Trade-marks Act and giving particular weight to two surrounding circumstances: (1) that the Court of Appeal had found the Registered Anheuser-Busch Marks confusing; and (2) an acknowledgement in the Memorandums of Fact and Law filed by both the parties that the marks were confusing.

The beer wars continue and we may very well see an appeal.

“Bad Faith” Decisions Bad News for Trademark Applicants?

The following article, authored by Jeffrey Vicq, was originally posted on the IPiloguea co-operative blog hosted on the IP Osgoode website of York University’s Osgoode Hall Law School.

Those of us who provide trademark prosecution and counselling services—and particularly those of us who work with clients that have multi-national trademark portfolios—know that clients are sensitive to developments not only in Canadian practice, but also in other key markets around the world.  Many of my clients were concerned about a line of United States cases, decided over the last several years, that regarded innocent filing errors in applications, renewal forms, and other correspondence with the US Patent and Trademark Office as attempts to perpetrate a fraud on the Office, justifying refusal, expungement, or some other highly punitive penalty.  These decisions had effectively broadened the notion of “fraud” on the USPTO to include innocent mistake and negligence.

However, it appears generally acknowledged that this trend halted in 2009 with a decision titled In re Bose Corp. In the most general terms, Bose served to restore the concept of fraud on the Office to a more conventional meaning.  Now, only if an applicant knowingly makes a false, material representation with the intent to deceive does their action rise to the level of fraud, meriting harsh punishment.

However, I am becoming concerned we may be seeing the start of a trend in Canada toward permitting challenges to applications for alleged lack of good faith akin to what our US friends experienced pre-Bose.  In decisions released over the last two years, the Canadian Trade-marks Opposition Board appears to be breathing new life into the ability of opponents to challenge applications on the basis of good faith. Read more

A Confusing Trademark VIBE

In Vibe Media Group LLC v. Lewis Craig Trading as VIBETRAIN the Federal Court of Canada set aside a decision of the Opposition Board and allowed the opposition to the application to register the mark VIBETRAIN.  The application was based on proposed use in Canada in association with wares and services that included sound recordings, printed promotional materials, magazines, clothing and souvenir items and entertainment services involving the provision of musical and entertainment performances in live, television, video and Internet media.  The opponent was a company with which Quincy Jones had an association and held the trademark rights, including an application and two pending applications, for VIBE, a popular magazine focusing on urban culture.

The Opposition Board member found that “vibe” was not inherently distinctive, relying on an earlier decision of the Court, Vibe Ventures LLC v. 3681441 Canada Inc.  The Board also found that VIBETRAIN consisted of two ordinary dictionary words that were disconnected from their respective meanings and which, when juxtaposed, were inherently distinctive.  The Board member referred to the Oxford English Dictionary for the definition of “vibe”.  Before the Court, the  Opponent argued that other dictionaries did not define “vibe” and it was therefore not an ordinary dictionary word.

On appeal, the Court found that “vibe” may no longer be inherently distinctive, but through continuous use it had become suggestive of the Opponent’s magazine, something the Board had acknowledged in its decision.  The Opponent also submitted new evidence on the appeal to show that the word “train” suggested a series of musical performances, that no other magazine titles in Canada began with VIBE and that VIBE had been used in Canada with programs, websites, books and recordings related to music.

The Court concluded there was a broad overlap in the music, culture and clothing wares and services that the VIBE and VIBETRAIN trademarks sought to identify, as well as similar channels of trade, since both targeted people with an interest in music, entertainment and culture.  Thus, there was a likelihood of confusion for a “casual consumer somewhat in a hurry”.

Confusing CANNABIS CULTURE

The Friendly Stranger Corporation v. Avalon Sunsplash Ltd.was an appeal of a decision of the Trade-marks Opposition Board refusing several trademark applications filed by the Applicant.  The Applicant sells products related to hemp and marijuana through its Toronto store, The Friendly Stranger Cannabis Culture Shop, and sought to register CANNABIS CULTURE SHOP, CANNABIS CULTURE SHOP & Design and FRIENDLY STRANGER CANNABIS CULTURE SHOP & Design.  The Opponent, Avalon Sunsplash Ltd., publishes a bi-monthly magazine called “Cannabis Culture”, operates a store in Vancouver and maintains a website at cannabisculture.com.

The Opposition Board had concluded that “the distinctiveness of the Opponent’s mark was sufficient to negate the distinctiveness of the applied for mark”.  Notwithstanding additional evidence filed on appeal, the Federal Court agreed, noting the similarity of the wares and services, and that the only difference between the Applicant’s mark, CANNABIS CULTURE SHOP, and the Opponent’s mark, CANNABIS CULTURE was the use of the word “shop”, which was not in itself inherently distinctive.

The Opposition Board had also refused FRIENDLY STRANGER CANNABIS CULTURE SHOP on a balance of probabilities, since it resembled the Opponent’s mark and both parties targeted the same market.  However, the Federal Court was satisfied that this mark should be allowed since additional evidence shifted the emphasis to the words “Friendly Stranger” from “Cannabis Culture Shop”.

The Court also considered section 6(2) of the Trade-marks Act, which provides that a trademark causes confusion with another trademark if the use of both trademarks in the same area would lead to the inference that the wares or services associated with the trademarks are marketed by the same person.  On this point the Court referenced the finding in United Artist Corp. v. Pink Panther Beauty Corp. [1998] F.C.J. No. 441 that “the question posed by [section 6(2)] does not concern the confusion of the marks, but confusion of goods or services from one source as being from another source”.  Although the wares of the parties were similar, the Court was satisfied there was also no confusion as to source since the marketplaces were very different.  Friendly Stranger Cannabis Culture shop had a strong presence in Toronto, while the Opponent’s marketplace was Vancouver.  Moreover, the internet sales were only a small fraction of what was sold in the stores and the domain names of the parties were very different.  Presumably, if the Opponent had had a stronger internet presence the Court might have found confusion on the basis of section 6(2) since it would have then been difficult to differentiate the “marketplaces” in Vancouver and Toronto.  However, this was not the case.

Malcolm Parry’s VANCOUVER LIFE Fails to Impress Federal Court

The Federal Court recently issued its decision in Sim & McBurney v. Malcolm Parry.  This case was an appeal by Sim & McBurney from a decision of the Trade-marks Opposition Board, relating to Sim & McBurney’s Section 45 challenge to society columnist Malcolm Parry‘s trade-mark VANCOUVER LIFE.  Toronto Life Publishing Company Limited (represented by Sim & McBurney) has a pending application to register VANCOUVER LIFE for similar wares and services.
 
Under Section 45 of the Trade-marks Act, at the request of a third party, the Registrar may require a trade-mark owner to show that the registered mark has been used in association with the wares or services specified in the registration within the past three years.  The Registrar found that there had been no use of the trade-mark VANCOUVER LIFE in association with the specified services and most of the specified wares, but maintained the registration in part, finding there had been use of the trade-mark in association with “editorial/advertising inserts into publications and periodicals”.  Sim & McBurney appealed this decision and sought to have the trade-mark expunged in association with all registered wares.  Read more

Evidentiary Omissions Lead to Trademark Appeal

The recent Federal Court case of Sanders v. Smart & Biggar Intellectual Property and Technology Law is a good example of the difference that well prepared evidence can make.  The Trademarks Opposition Board expunged the applicant’s trade-mark, “UGGLY BOOTS” pursuant to section 45 of the Trade-marks Act because the applicant had not demonstrated use of the trademark in Canada.  The Board found that the applicant’s evidence was “rampant with ambiguities” and omissions. 

The applicant appealed to the Federal Court pursuant to section 56 of the Act.  The applicant was allowed to present new evidence and the appeal was treated as a new hearing.  The applicant’s new evidence consisted of the affidavits of five clients, which all showed the transfer of wares with the trademark.  The affidavits also attached invoices proving the transfers took place.  The Court found that this new evidence went beyond mere allegations of use, noting that the applicant was only required to produce “evidence of a single sale, whether wholesale or retail, in the normal course of trade” so long as the sale was not deliberately manufactured or contrived to protect the registration of the trademark.  In applying the principle of use “in the normal course of trade”, the Court also noted that good faith is presumed when there is no evidence challenging the affiant’s credibility.  Thus, the Court found in the applicant’s favour, something the Board might have done if better evidence had been presented at first instance.

Non-Use of a Trademark – Evidence of Special Circumstances Required

Jose Cuervo S.A. de C.V. v. Bacardi & Company Ltd. and the Registrar of Trade-marks was the second time that Bacardi had sought summary expungement, pursuant to section 45 of the Trade-marks Act, of the trade-mark CASTILLO for use in association with rum. This time, the Federal Court Trial Division agreed with the Registrar and expunged the mark for non-use. At issue before the Federal Court was the standard of review and whether special circumstances justified the non-use.

In the course of the earlier expungement action, the Appellant’s predecessor in title to the trademark had, on appeal, produced evidence of a sale of 41 cases of CASTILLO rum on November 21, 1994 to the Ontario Liquor Control Board. Thus, in Quarry Corp. v. Bacardi & Co (1996) 124 F.T.R. 264, the Court concluded the transaction was in the normal course of trade and set aside the Registrar’s decision to expunge. On further appeal, the Federal Court of Appeal upheld the Trial Division’s decision, but commented that a “single sale divorced from all context” would not normally be sufficient use. In other words, a single sale contrived to protect a trademark was not sufficient.

On October 26, 2005, at Bacardi’s request, the Registrar again issued a section 45 notice requiring evidence of use within the previous three years. The manager of Jose Cuervo’s legal department provided an affidavit dated June 23, 2006 attaching the invoice of November 21, 1994 evidencing the sale to the Ontario Liquor Control Board and an invoice of November 24, 1999 evidencing 100 cases sold to the Alberta Liquor and Gaming Commission (neither sale being within the 3-year limit). The manager also deposed that the Appellant had undertaken a new marketing strategy in 2002 to incorporate a secondary trademark, COHIBA, into the label (owned by a related company), but the co-branding strategy had triggered a worldwide dispute, including threatened litigation that was not yet resolved.

The Registrar concluded there was no use within the requisite 3-year period and, while threatened litigation might be a reasonable excuse for a short period, six years was not reasonable. Relying on the reasoning in Scott Paper Ltd. v. Smart & Biggar (previously discussed) the Registrar concluded that there were no special circumstances.

On appeal, Jose Cuervo provided an affidavit stating that it had resumed use of CASTILLO on August 4, 2008 and attached an invoice for a consignment to the Alberta Liquor and Gaming Commission. The Court noted that the standard of review should be resonableness. The new evidence was not such that it would have affected the Registrar’s decision (being evidence of use well after the 3-year limit) and therefore the standard of review was not correctness.

The Court affirmed the Registrar’s decision, noting that Jose Cuervo produced no evidence as to why the co-branding could not be suspended, stating that it ws “illogical to suspend the use of a valid Canadian trade-mark because of a threat of impending trade-mark litigation with respect to a secondary trade-mark”. The decision to suspend use of CASTILLO in Canada was voluntary and a trade-mark dispute over a secondary mark did not constitute exceptional circumstances.