Maintained by Clark Wilson LLP

Trademark Confusion or Chalk and Cheese

As the owner of a HÖRST brand shirt and a cyclist, I might be inclined to think there is a connection between HÖRST shirts and HORST WATERPROOF cycling bags. But I would fail to realize that HÖRST is a common German name and that I may not be a typical Canadian consumer.

A recent Québec case, Octeau et al v. Kempter Marketing Inc., illustrates that identical or similar names do not necessarily mean there is infringement, absent use in association with similar wares and for a similar purpose.

The Plaintiff had three registered Canadian trademarks, HÖRST DÜSSELDORF & Design, CULT HÖRST and H HÖRST & Design, for use in association with an extensive line of clothing. The Defendant manufactured and distributed sporting goods, including high-end cycling and ski products and introduced the HORST WATERPROOF, a waterproof cycling bag named in honour of Horst Kempter, the founder of the company.

The judge noted that there was no attempt by the Plaintiff to prove the Defendant was selling any product “comparable in either style, nature or purpose” to the Plaintiffs’ products. He also pointed out the absence of any evidence that the Defendant sold any product resembling a product produced and sold by the Plaintiff. There was also no evidence of any person drawing a connection between the Plaintiffs’ and the Defendant’s businesses.

The judge reviewed the test for confusion, noting the discussion in Mattel, Inc. v. 3894207 Canada Inc. (the Barbie case) that trademark law affords protection that transcends the traditional product lines, but the issue is whether confusion arises.

What the Plaintiff failed to prove was confusion. In Veuve Cliquot Ponsardin et al v. Boutiques Cliquot Ltée et al Justice Binnie concluded that “luxury champagne and mid-priced women’s wear are as different as chalk and cheese”, a comparison that also applies to HÖRST shirts and HORST WATERPROOF cycling bags.

Round 2 Won By Scotch Whisky Association

As a follow up to earlier postings on the ongoing battle between the Scotch Whisky Association (the “Association”) and the Canadian distillers of GLEN BRETON single malt whisky, the Association is reporting today that it has won its appeal to the Federal Court of Canada.

The Trade-marks Opposition Board denied the Association’s opposition to the application by Glenora Distilleries of Nova Scotia to register the mark GLEN BRETON, on the basis that, in the Opposition Board’s view, Canadians would not be confused by the use of the word GLEN in the mark, such that they would think they were purchasing Scotch Whisky. The Association appealed that decision to the Federal Court.

During the appeal, the Association produced evidence that GLEN BRETON was misdescribed in various retail outlets, newspaper articles, pricelists, menus and websites as a Scotch Whisky and the Federal Court agreed with its submissions that Canadian consumers would likely be confused that they were purchasing a Scotch Whisky when that was not the case.

Stay tuned for Round 3 of this battle, as CBC reports that Glenora Distilleries is already planning to file an appeal of the Federal Court decision.

Opposition and Expungement Proceeding Info Added to CIPO’s Online Database

Following up on an announcement we told you about a few weeks ago, the Canadian Intellectual Property Office has now added information respecting pending trademark opposition and Section 45 (summary expungement) proceedings to its online database.

Working with the information over the last several days, our experience has been that it is a little out of date, relative to the actual status of proceedings. Nonetheless, CIPO’s decision to enhance public access to this information will be beneficial to trademark owners, brand advisors, and their counsel.

Appeal saves CANADA DRUGS

The recent Federal Court of Appeal decision in Thorkelson v Pharmawest Pharmacy Ltd. overturned an earlier Federal Court decision which ordered the expungement of the trademarks CANADADRUGS.COM and CANADA DRUGS. On appeal, the court found that the evidence was not capable of establishing that the trademarks in issue were clearly descriptive or deceptively misdescriptive of the character or quality of the services provided by the online phramacy business controlled by the Appellant.

The Federal Court judge who ordered the expungement was found to have decided the case on the basis of his own interpretation of the meaning of the words “Canada” and “drugs” when used in association with an online pharmacy business, as well as the inferences he drew, without any evidence, about what consumers would or would not understand.  The Appeal Court in setting aside the expungement concluded that the phrase “Canada Drugs” did not have any known meaning at the time of the earlier decision and accordingly, was not “clearly descriptive” or “deceptively misdescriptive” under Section 12 (1) (b) of the Trade-marks Act. To come within the prohibition under section 12 (1) (b), the trademark must initially be found to be descriptive and then be found to mislead the public as to the character of the quality of the wares. The test applied is whether the general public in Canada would be misled concerning the product with which the trademark is associated.

Distinguishing Guise or Partly Functional?: Trial Required

In Crocs Canada Inc. v. Holey Soles Holdings Ltd. the Defendants, Holey Soles, sought summary judgment dismissing Crocs Canada’s claim of copyright infringement and passing-off under the Trade-marks Act. At issue was plastic footwear sold by Crocs Canada. The footwear features distinctive holes placed in the upper portion, as well as side venting.

Prior to 2004, Holey Soles and other companies had been allowed to sell Crocs Canada’s shoes under their own brand names. When that arrangement ended, Holey Soles began selling shoes similar in style, but manufactured for Holey Soles in China.

In seeking a summary judgment, Holey Soles argued that Crocs Canada’s claim disclosed no triable issue because the doctrine of functionality precluded the assertion of any trademark right. Both parties relied on the 2005 “Lego case” (Kirkbi AG et al. v. Ritvik Holdings Inc.) in which the Supreme Court of Canada concluded that the shape of the building blocks was purely functional and not a distinguishing guise.

Here, the Court noted that the circles and semicircles on the shoes did have a functional role namely, to allow air and water in and out of the shoes.

However, the Court also noted that the decision in Lego did not rule out the possibility of trademark protection for a design that was only partly functional. Given this, the Court here concluded the summary judgment application could not succeed. The question whether the design and pattern of the circles and semicircles on Crocs Canada’s shoes was sufficiently functional so as to support distinguishing guise claims, was a question of fact that required a trial.

More Champagne, anyone?

We recently reported on the difficulties in registering wine trademarks consisting of names of geographic locations. The Federal Court of Canada (Trial Division) concluded that geography was one of the most important considerations of the average consumer when purchasing a wine. Accordingly, the registration of a trademark consisting of a geographic description unfairly prevented other local winemakers from listing that place of origin on their brands. As all good wine gurus know, it is the land, air, water and weather where grapes are grown that make each wine unique. Geographic location is a huge selling point for exclusive brands, as is evident with the popularity of real French champagne.

For more than eight decades, only 319 select vineyards within specific boundaries of north-eastern France had the right to brand their sparkling white wines as “champagne“. But now, due to the increasing demand for champagne from China and Russia, the Institut national de l’origine et de la qualite, which governs the Appellation d’Origine Controlee designation for champagne, is set to expand the appellation’s boundaries. The move is expected to provide a windfall for the lucky vintners whose vineyards happen to lie within the expanded region and highlights the value of a trademark consisting of a geographic location. Worldwide exports of champagne hit an all time record in 2007.

The name champagne is legally protected in most countries in order to prevent sparkling wines from outside the Champagne region of France from using the brand. Until two years ago, US winemakers, in particular, capitalized on the popularity of the brand and commonly sold sparkling wines under the name “California Champagne”, ignoring the outcries from indignant French viticulturists. But now, only a few older grandfathered brands in the US may use the name “champagne” in a move to correctly label US sparkling wines as “sparkling wines”. In 2003, Canada and the European Union entered into an agreement which committed the parties into protecting each others’ geographical indications for wines and spirits and the use of the term “Canadian Champagne” will cease after December 31, 2013.

Last year, the wine regions of Sonoma County and Paso Robles, California; Chianti Classico, Italy; Tokaj, Hungary; and Victoria, and Western Australia, Australia added their names to a growing list of signatories of the Joint Declaration to Protect Wine Place & Origin, a set of principles aimed at educating consumers about the importance of location to winemaking.

Trademark Appeals: Stays and Service Requirements

A recent blog noted that a failure to obtain a stay of a Federal Court judgment when an appeal to the Federal Court of Appeal is sought, means the Registrar of Trademarks will act in accordance with the Federal Court judgment, which may be contrary to what the appellant is seeking before the Court of Appeal.

A recent Practice Notice from the Trademarks Office clarifies the issue. Section 50 of the Federal Courts Act allows the Federal Court and the Federal Court of Appeal to stay proceedings. If there is an appeal from the Federal Court to the Federal Court of Appeal, the Registrar, absent a stay, must act in accordance with the judgment of the Federal Court.

There is, however, an exception in the case of opposition and section 45 procedings. If there is an appeal to the Federal Court of Appeal the Registrar will not treat the Federal Court decision as final because it must, pursuant to sections 39(1) and 45(5) of the Trade-marks Act, act in accordance with “the final judgment given in the appeal”.

Thus, where there is an appeal from the Federal Court to the Federal Court of Appeal, it is important to consider whether an opposition or section 45 proceeding is at issue, and if not, obtain the requisite stay.

The Practice Notice also provides guidance regarding the service of court documents on the Registrar.

Where a decision of the Registrar is appealed under section 56 of the Trade-marks Act or where judicial review of a Registrar’s decision is sought, the Registrar must be served personally. This is best effected by leaving the document with an employee of the Executive Office who is authorized to accept service.

All Notices of Appeal filed with the Federal Court must also be filed with the Registrar. These may be transmitted by any means, but failure to comply with sections 56(1), (2) and (3) of the Act, including the filing requirement, may render the appeal a nullity.