Maintained by Clark Wilson LLP

Trader Joe’s trying to make Pirate Joe’s “walk the plank” in U.S. trade-mark case

In the ongoing dispute between Michael Hallatt, a Vancouver businessman, and U.S. based retailer Trader Joe’s, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) has overruled the 2013 decision of the U.S. District Court for the Western District of Washington (the “District Court”) not to hear Trader Joe’s claim against Hallatt for, among other things, trade-mark infringement, dilution, unfair competition and false advertising.

The dispute arose out of Hallatt’s purchase of products from Trader Joe’s stores in the U.S., particularly in the state of Washington, for resale in Canada (there are no Trader Joe’s stores in Canada).  Hallatt has and continues to mark up and re-sell Trader Joe’s products at his store in Vancouver, named Pirate Joe’s.

The goods are not counterfeit, and the source of the products being sold is not in dispute – the packaging on the products bears Trader Joe’s trade-marks, and Hallatt states on his website that he sells Trader Joe’s products.  Hallatt expressly states on his website that he is not an authorized or affiliated distributor or reseller of Trader Joe’s.  Nevertheless, Trader Joe’s took the view that Hallatt’s conduct violated its U.S. trade-mark rights under the U.S. Lanham Act, and in 2013 it brought a claim against Hallatt in the District Court.

Taking the view that any unlawful conduct by Hallatt would have taken place in Canada rather than the U.S., and that Hallatt’s activities did not cause a cognizable injury to Trader Joe’s in the U.S. or an effect on American foreign commerce, the District Court judge decided in October 2013 that the Court had no subject matter jurisdiction to hear Trader Joe’s claims.  Trader Joe’s appealed that decision to the Ninth Circuit.

The Ninth Circuit disagreed with the District Court judge, opining instead that Hallatt’s activities could affect the goodwill and value of the Trader Joe’s brand in the U.S., and accordingly, its U.S. trade-mark rights.  The Ninth Circuit concluded that the Lanham Act does apply to Hallatt’s allegedly infringing conduct, and in the result, remanded the case back to the District Court for further proceedings.

We will be keeping an eye on this trade-mark case that is likely of particular interest to cross-border shoppers.

In no mood for charity: Federal Court confirms that charities are not necessarily public authorities

The Federal Court of Canada recently confirmed in Starbucks (HK) Limited v. Trinity Television Inc., 2016 FC 790 (the “Decision”) that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority for the purpose of obtaining an official mark.

(For a discussion about official marks and their interplay with regular trade-marks, please see this previous post on our blog.)

The facts leading up to the Decision are straightforward: in 2013, Starbucks (HK) Limited (“Starbucks”) filed an application to register the trade-mark NOW TV & Design.  During prosecution, an official mark for NOWTV, owned by Trinity Television Inc. (“Trinity”), was cited against the Starbucks application.  In response, Starbucks commenced a judicial review application against the Registrar’s decision – made in June 2001 – to give public notice of the adoption and use of NOWTV as an official mark.

In the result, the Court quashed the Registrar’s decision to grant NOWTV as an official mark to Trinity, clearing the path for Starbucks to move ahead with its application.  Of particular interest were the following points made by the Court:

– the law is now clear that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority; and

– it would be patently unfair and completely contrary to the interest of justice if an entity that is not a public authority was permitted to enjoy the exceptional rights conferred on the holder of an official mark.

As a potential point of distinction when it comes to the precedential value of this case, it is noteworthy that Trinity did not participate in the judicial review application; indeed, the Court was advised by counsel for Starbucks that a former president and director of Trinity had advised that Trinity had sold its business to Rogers in 2005.  That being said, given how easily the Court arrived at the conclusion that charitable status does not necessarily equate to being a public authority, it seems unlikely that Trinity’s participation would have changed the result.

From a practical perspective, the Decision serves as a timely reminder to trade-mark applicants that, while robust, official marks can nevertheless be challenged and removed under the right circumstances.  Where an official mark has been cited during prosecution of a regular trade-mark application, it is important to carefully scrutinize the official mark, in order to ascertain any potential vulnerabilities that could lead to its removal.

On the other hand, the Decision is also a reminder to charities holding official marks that those official marks may potentially be at risk, if challenged via judicial review.  To mitigate that risk, those charities ought to consider filing regular applications to register their trade-marks.

What’s Your Evidence? The Danger of Hearsay Evidence in IP Litigation

In Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, the Federal Court of Appeal (“FCA”) recently overturned a substantial damages award in a pharmaceutical patented medicines action on the basis that the trial judge admitted improper hearsay evidence. This is an important reminder that the hearsay rule of evidence is alive and well.

At trial, only one witness was called to testify in support of damages and he did not have actual firsthand knowledge of the purported facts to which he was testifying. Instead the witness could only testify to the oral and written statements of others.  The FCA ruled that this evidence was hearsay, and therefore inadmissible.

Hearsay evidence is an oral or written statement made by a party who has not come to court to testify. An example of oral hearsay is a witness testifying that “John told me he would give me $100”. This is hearsay because the author or speaker of these statements is not present in court to testify to the truth of the statement. Whether or not the statement is admissible depends on the use of that statement. If the purpose of calling the hearsay evidence is to prove the truth of the statement, then the statement is inadmissible. Therefore, in this example, the proper way to prove that John would give the witness $100 is to call John as a witness to testify to the truth of that statement; otherwise, the statement cannot be used to prove that John would have given the witness any money.

Despite the recent trend of some courts and tribunals to relax the rules of evidence regarding the admissibility of hearsay evidence to allow for more flexibility, here, the Federal Court took a more strict and traditional analysis.

As a result, parties to intellectual property disputes must be aware of the potential inadmissibility of hearsay when collecting evidence. This is particularly germane in trade-mark disputes where evidence of confusion generally comes from second hand sources. The proper collection and documentation of this evidence can make or break a successful infringement or opposition proceeding.

Trade-mark holders should be proactive when presented with evidence of confusion. It may not be enough for a representative of the company to swear an affidavit that the company received phone calls from those who say they confused the company’s trade-mark with another. The better evidence is directly from each of those callers who can testify first hand to their confusion. Where feasible, trade-mark holders should have a process in place to document the names and contact information of witnesses and the details of any evidence of confusion. This way, individuals able to give first hand evidence can be contacted if the matter proceeds to litigation or an opposition proceeding. If such evidence is not properly preserved, a trade-mark holder may be left with no admissible evidence to prove its claim.

Nuthin’ but a Leaf Thang – Toronto Maple Leafs take issue with Snoop Dogg’s trade-mark application for LEAFS BY SNOOP Logo

Maple Leaf Sports & Entertainment Partnership (“MLSE”), the parent company of the National Hockey League’s Toronto Maple Leafs, has requested an extension of time to oppose a U.S. trade-mark application filed by one Calvin Broadus – better known as Snoop Dogg (“Snoop”) – for a logo featuring the words LEAFS BY SNOOP on a leaf-shaped background.

MLSE is the owner of numerous trade-mark applications and registrations in Canada and the U.S. for different iterations of the Toronto Maple Leafs logo, for use with a variety of clothing and souvenir related goods.

For side-by-side comparison, below is Snoop’s logo next to the most recent version of the Toronto Maple Leafs logo.

Mark Image               Mark Image

Snoop’s application covers the goods “cigarette lighters not made of precious metals”.  Snoop also owns a word mark application for LEAFS BY SNOOP, although that application will not be published for opposition by the U.S. Patent and Trademark Office until July 19, 2016.

More information about Snoop’s LEAFS BY SNOOP products is available at his website dedicated to that brand.  Interestingly – and perhaps not surprisingly – the products on the website appear to be cannabis and food products including cannabis.

Snoop also owns a Canadian application to register the words LEAFS BY SNOOP for a broader category of goods, including clothing-related products, edible oils, jams, candies, and live plants.  (Although the Canadian Intellectual Property Office (“CIPO”) is usually known for being strict when it comes to the specificity of goods listed in trade-mark applications, in this case, it did not ask Snoop to provide further specificity as to the “edible oils and jams”, nor the “live plants”.)

Snoop’s Canadian application was advertised for opposition on June 8, 2016.  At this time, it is unclear whether MLSE has opposed – or requested an extension of time to oppose – Snoop’s Canadian application.

TSN, the source that broke news of this potential dispute, reached out to lawyers for both MLSE and Snoop, but did not receive a response.  An IP lawyer at the New York University School of Law provided TSN with his thoughts on the matter, generally opining that MLSE would likely face a tough road should it proceed with its opposition in the United States.

The intersection of pop culture and trade-marks is always a fascinating topic for us here at the Canadian Trademark Blog, and we will be watching with interest to see if this leads to an actual opposition-izzle.

New Fee Proposal for Trademarks in Canada

The Canadian Intellectual Property Office (CIPO) has published a Fee-for-service proposal (the Proposal), seeking public input by July 5, 2016.  As previously reported on this blog, the Canadian government significantly amended the Trade-marks Act (the Act) in 2014, in order for Canada to accede to the Singapore Treaty, the Nice Agreement and the Madrid Protocol. Those amendments have not yet come into force, however, pending the adoption of new Regulations on various matters, including fees.  The Proposal is the first step in adopting new Regulations on the fees that will be applicable.

The two most significant changes in the Proposal are that:

– there will be one fee payable at the time an application is filed with CIPO, while the current requirement for payment of a registration fee will be done away with; and

– the application fee will include only one Nice Class of goods or services.  Additional fees will be payable for each additional Class of goods/services that an applicant wishes to include in the application.

The proposed fees themselves will be in line with what applicants are currently used to in Canada, with reductions in some cases, particularly if the application covers only one Class of goods/services.  Having said that, applications that contain more than two Classes of goods/services will face higher fees.  Renewals will similarly be based on the principle of one fee for one Class of goods/services, with additional fees payable for additional Classes of goods/services.  There will also be additional fees payable for applications and renewals that are filed on paper as opposed to online.

Also included in the Proposal are new proposed service standards for issuance of Filing Notices and processing of Renewal requests. The Renewal request processing standard will be different, depending on whether or not the goods/services have previously been grouped into Nice Classes.

CIPO has asked for public input on the Proposal by July 5, 2016 and depending on what complaints might be received by then, an independent advisory panel could be appointed by August 15, 2016.  We will publish further posts regarding the status of the Proposal as matters progress.

Proposed New French Language Requirements in Québec

As discussed in our previous blog entry, after losing the battle in court over the requirement that businesses must add French language to English trade-marks displayed on signage outside their stores, in June 2015 the Québec government announced its intention to make modifications to Québec’s Regulation respecting the language of commerce and business (“Regulation”).

As recently reported in the media, the Québec government has just announced the proposed changes to the Regulation, the stated purpose of which is to ensure that commerce in Québec has more of a French language presence. The proposed changes require businesses to ensure that when trade-marks in languages other than French are used on exterior signage (as defined by the proposed rules), a French language component is displayed on the site as well. The proposed amendments set out the circumstances in which the new rules will apply, including when the trade-mark is displayed on interior signage that is intended to be seen from the outside, or when exterior signage is located in a mall or shopping centre complex.

The French language component may take the form of a slogan, a generic term or description, or other information concerning the products and services offered by the business. The proposed rules do not require that the French component be predominant over the non-French trade-mark, but they require that the French component be permanently visible in a manner similar to that of the non-French trade-mark being displayed, and be legible in the same visual field as the trade-mark.

A helpful illustration of acceptable and non-acceptable signage under the proposed changes can be found here.

A 45 day period for public feedback on the proposed amendments commenced on May 4, 2016. We will report again when there is a further update. In the meantime, brand owners using trade-marks in languages other than French in Québec should start considering how they will comply with the new French language requirements, assuming those requirements are passed into law, and whether their proposed strategy necessitates any changes to their current Canadian trade-mark portfolio.

 

 

Federal Court of Appeal considers “special circumstances” in appeal of trade-mark expungement

In a recent decision of the Federal Court of Appeal (“FCA”), the FCA took the rare opportunity to consider an appeal from a section 45 expungement proceeding. In One Group LLC v Gouverneur Inc, the FCA reviewed the Registrar’s decision not to expunge One Group LLC’s (“One Group”) trade-mark registration for STK (the “Mark”) on the basis of non-use, as well as the subsequent Federal Court (“FC”) decision to overturn the Registrar’s ruling.

One Group operates high end restaurants using the Mark outside of Canada.  In preparation for a new restaurant in Toronto, One Group registered the Mark in Canada. However, due to failed discussions with hotels and developers, a Toronto restaurant never materialized.

In due course, Gouverneur Inc. (“Gouverneur”) brought a section 45 proceeding, alleging that One Group failed to use the Mark in the three preceding years. The Registrar refused to expunge the Mark on the basis that there were special circumstances that excused the non-use, namely that the non-use was not in the control of One Group, and that there was evidence that One Group was close to coming to an agreement with a hotel chain which would see the Mark used in Canada.

Gouverneur appealed to the FC on the basis that the Registrar misunderstood or misapplied the test for special circumstances. The FC agreed and overturned the decision of the Registrar on the basis that it was not a reasonable finding that special circumstances excused the non-use of the Mark, and ordered the Mark expunged.

One Group then appealed to the FCA. In a relatively brief decision, the FCA allowed the appeal and reinstated the ruling of the Registrar.

This decision highlights a number of points:

  • First, the FCA emphasized that deference must be given to the Registrar in expungement proceedings, as well as in those instances where the Registrar is applying its “home statute”. As a result, courts should not disturb the Registrar’s findings of fact except in those circumstances where such findings are clearly not correct.
  • Second, it appears that there is a general willingness of the Registrar to preserve registrations. Hence, to the extent the Registrar makes factual findings in support of preserving a registration, the court’s deference to those findings on an appeal presents a potentially difficult hurdle to overcome.
  • Third, this case is a reminder that there is a “special circumstances” exception to non-use which can be used to preserve registrations. The criteria for determining if “special circumstances” exist are:

– the length of time during which the trade-mark has not been used;

– whether the reasons for non-use were beyond the registered owner’s control; and

– whether the registered owner has a serious intention to shortly resume use of the trade-mark.

Whether special circumstances exist will be determined by the Registrar from the evidence. Such findings, as stated above, will be given deference by the courts.

With this deference in mind, the FCA found no error in the Registrar’s decision that justified judicial intervention, and restored the decision of the Registrar.