.CA Domain Names Held To Be Personal Property

A recent Ontario Superior Court of Justice decision (Court File No. CV-13-480391) has held that .CA domain names are personal property and as such are subject to the rules that govern any other type of personal property, including those against wrongful conversion.  Perhaps more importantly, the case appears to stand for the proposition that title in .CA domain names exists independently of the registration of those domain names.

17 .CA domain names were in issue,  including mold.ca and mould.ca.  All were registered by Mr. Sullivan in his own name for the benefit of a company that he co-founded with Mr. Dalrymple, called Mold.Ca Inc.  (Mold.Ca Inc.)  The business of Mold.Ca Inc., not surprisingly, involves  mold inspection and removal services in the Greater Toronto area.  Sullivan purchased the domain names using the company’s credit card but listed himself as the Registrant of all of the domain names, rather than Mold.Ca Inc., unbeknownst to Dalrymple. 

Sullivan parted ways with Dalrymple and Mold.Ca Inc. a year later, while Mold.Ca Inc. continued to carry on its business, as before.  Unbeknownst to Dalrymple, Sullivan retained the domain name registrations and the passwords for the domain name registrations and then subsequently transferred the domain name registrations to a third party (Romelus).   Once Dalrymple found out about the above events, he commenced a Canadian Internet Registration Authority (CIRA) Dispute Resolution Proceeding (CDRP) against Romelus.  The CDRP proceeding were unsuccessful because there was no evidence that the domain names had been registered by Romelus in bad faith (they hadn’t been), nor was there evidence that they were being used for other than legitimate purposes by Romelus.

Following the failed CDRP proceeding, Romelus transferred the domain names back to Sullivan and Sullivan began using them in a competing business to that of Mold.Ca Inc.  Undaunted by its loss in the CDRP, this turn of events led to Mold.Ca Inc. to commence proceedings in the Ontario Superior Court of Justice.  Finding in favour of Mold.Ca Inc., the Court held that “the issue is a simple matter of property law”, whereby title to the domain names belongs to the company, which had been wrongly converted by Sullivan.  The Court therefore ordered that all of the domain names, including all administrative information and passwords, be transferred to Mold.Ca Inc.

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Cigars and Alcohol: Confusing Trademarks

Tequila Cuervo, S.A.(“Cuervo“) filed an application in the Canadian Intellectual Property Office for the registration of the trademark LAZARO COHIBA based on proposed use in Canada with alcoholic beverages. Empresa Cubano Del Tabaco (“Empresa“), a distributor of tobacco related products that predominately distributes cigars and holds the COHIBA trademark, opposed the application on several grounds, including the likelihood of confusion.

The Trade-marks Opposition Board, in a decision rendered September 30, 2008, rejected all of the grounds of opposition and in doing so placed considerable weight on the fact that Empresa had not established an extensive reputation for its mark.  Also relevant was the differences between the wares of the parties, as well as the channels and trades of the parties. Empresa appealed the Board’s decision to the Federal Court of Canada, submitting new evidence with respect to the above two issues.

On the reputation issue, Empresa submitted expert evidence of Cohiba cigar’s iconic brand status, noting that this brand was featured in television shows, movies and other media forms. This evidence was corroborated by other affidavit evidence establishing that the Cohiba cigar brand had been featured in magazines and other media content that had been circulated throughout Canada. On the distinctiveness issue, expert evidence was tendered to establish that users of tobacco and alcohol often consume both products, and that the use of one involves the use of the other. On this latter issue, new evidence was submitted by Empresa showing that many stores sold both hard alcohol and cigars.

In its October 4, 2013 decision, the Federal Court, in light of this new evidence, reversed the Board’s decision and held that the test for confusion had been met. The Court first noted that Empresa’s cigar sales in Canada were not insignificant and accepted the evidence establishing that the COHIBA cigar brand had an iconic status. On this latter point, the Court noted that “personal ownership or use of the product is not essential to the awareness or knowledge of a trade-mark.”

With respect to the distinctiveness issue, the Court held that the sale of cigars and spirits in many stores across Canada was not particularly persuasive on its own. However, the Court noted that,

[t]he reason why the proximity of cigars and alcohol is important for the analysis only becomes apparent upon examination of the relationship between smoking and alcohol. This is where the [expert evidence] is very helpful.

The Court accorded significant weight to the fact that a smoker subjectively relates alcohol to cigars, and therefore, a “predisposition for confusion” exists. Moving forward, it remains to be seen how far this reasoning can be taken. Does such a predisposition exist with wine and cheese, particularly in those parts of Canada where they are available in the same store?

Thus, the iconic status of COHIBA, coupled with the close relationship between sales of alcohol and tobacco led the Court to conclude that there was confusion.

Amendments to Trade-marks Act Re-introduced in Parliament

On October 28, 2013, the government introduced Bill C-8, An Act to Amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts.  The short title of Bill C-8 is the Combating Counterfeit Products Act

Bill C-8 is the same as Bill C-56 which was introduced in the previous session of Parliament but did not proceed when Parliament was prorogued.  We previously commented on Bill C-56

Bill C-8 will likely move quite quickly through the House of Commons.  It has already passed second reading and will now go to the Standing Committee on Industry, Science and Technology.