Maintained by Clark Wilson LLP

Sharing a Trademark: The Legal Problems

For many years, CHAPMANS has been a well-known trademark in the Vancouver clothing trade. However, the mark has been used by two companies, a situation that can lead to problems, as evidenced by a recent decision of the British Columbia Court of Appeal.

In Edward Chapman Ladies’ Shop Limited v. Edward Chapman Limited the Court of Appeal upheld the trial judge’s decision in favour of Edward Chapman Ladies’ Shop Limited, permanently restraining Edward Chapman Limited from selling ladies’ clothing and accessories in association with the names Edward Chapman, Chapman’s, Edward Chapman’s Limited or similar names, except where at least equal prominence is given to the additional name, Chapy’s.

In 1959, the Edward Chapman retailing clothing business in Vancouver was divided between two corporate entities: Edward Chapman Limited to continue with the sale of men’s clothing and Edward Chapman Ladies’ Shop Limited to carry on the sale of women’s clothing. The two companies cooperated in their marketing, jointly buying advertising space and clothing labels bearing the EDWARD CHAPMAN name and a crown logo until relations soured in 1982.  

In 1982, Edward Chapman Limited opened up a women’s wear division under the name CHAPY’S. Edward Chapman Ladies’ Shop Limited objected that this was contrary to the spirit of the 1959 contract that divided the two companies, but ultimately, did not pursue legal action as it understood that Edward Chapman Limited’s women’s wear business would operate under the trade name CHAPY’S. An uneasy co-existence continued until, in 2002, Edward Chapman Limited opened a new shop which sold both men’s and women’s clothing under the name EDWARD CHAPMAN LIMITED and did not use the name CHAPY’S.

In response, Edward Chapman Ladies’ Shop Limited commenced an action in April 2003 alleging that by Edward Chapman Limited using the CHAPMAN names and crown logo in association with the sale of ladies’ wear it was passing off its products and services as those of Edward Chapman Ladies’ Shop Limited in violation of section 7(b) of the Trademarks Act.

The trial judge held that Edward Chapman Ladies’ Shop Limited established the elements of its passing off action since it had developed a distinctive reputation for fine women’s clothing under its corporate name, as well as the names CHAPMAN’S and EDWARD CHAPMAN’S. Edward Chapman Limited’s decision to drop the name CHAPY’S and market women’s clothing under the name EDWARD CHAPMAN had been made primarily to take advantage of the plaintiff’s established goodwill. The plaintiff suffered damage due to the risk of harm to, and loss of control over, its goodwill or reputation.

In upholding the decision of the trial judge, the Court of Appeal held that the parties in 1959 intended Edward Chapman Ladies’ Shop Limited to receive the exclusive right to sell ladies’ wear and accessories using the EDWARD CHAPMAN and CHAPMAN’S names and Edward Chapman Limited’s dropping of the CHAPY’S name had the effect of “elbowing out” Edward Chapman Ladies’ Shop Limited or increasing the risk of confusion in the market.  Therefore, the Court of Appeal held that Edward Chapman Ladies’ Shop Limited could properly sue for passing off and the permanent injunction was the appropriate remedy. The Court of Appeal also held that having jointly used and jointly benefited from the use of the crown logo and the notation, “Established 1890”, neither party could exclude the other from using them in association with their respective businesses.  

No New Grounds of Opposition on Appeals from the Registrar of Trademarks

Sun World International Inc. v. Parmalat Dairy & Bakery Inc. concerned a procedural issue, namely a “novel application” to amend a Statement of Opposition to add section 22 of the Trademarks Act (depreciation of goodwill).

The respondent, Parmalat, had successfully opposed the applicant’s (Sun World’s) trademark BLACK DIAMOND for use in association with fresh fruit and vegetables, narrowed to plums. The Registrar of Trademarks concluded that use of the mark at the relevant date had not been established and that the applicant had not demonstrated there would be no reasonable likelihood of confusion. The applicant then appealed to the Federal Court pursuant to section 56 of the Trademarks Act.

Section 56(5) allows for the introduction of new evidence. On the appeal the applicant filed new evidence and the respondent in turn sought to amend the Statement of Opposition and file new evidence.

The Prothonotary hearing the matter concluded that section 56 of the Trademarks Act allowed fresh evidence on issues that were before the Registrar, but the de novo jurisdiction of the Court under section 56 was otherwise restrained. Thus, the Statement of Opposition could not be amended on appeal.

Olympic Trademark Legislation Closer to Becoming Law

Following up on an earlier story regarding the unique aspects of Bill C-47, we note that the Olympic and Paralympic Marks Act, has now received Royal Assent. We understand that the legislation has not yet come into force by order of the Governor in Council, as required by section 15 of the Act, and that regulations are contemplated.

While similar legislation has been enacted in other Olympic host countries in recent years, the removal of the normal requirement that the Canadian Olympic Committee, the Canadian Paralympic Committee or the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (“VANOC”) prove irreparable harm in order to obtain an injunction has certainly raised some eyebrows in the legal community.

The controversy noted earlier continues, as evidenced in an article in the Globe and Mail, “Olympics Bill Toughens Trademark Muscle“.

EcoDensity and the Mayor

An Article in the Vancouver Sun this past weekend raises questions about why the Mayor of the City of Vancouver has applied to register in his own name, the mark ECODENSITY for a housing density initiative that is funded and run by the City. The Mayor indicates in the story that he filed the proposed use application a few days before the initiative was publicly unveiled in order to stop others from doing so.

As the mark was not used by the City at the time the Mayor’s application was filed, the City would have been unable to properly request at that time, that the Registrar give public notice of the City’s adoption and use, as a public authority, of the mark as an Official Mark, pursuant to Section 9 of the Trade-marks Act. Official Mark requests are commonly submitted by all levels of government in Canada, including the City of Vancouver itself, to protect what they consider to be their proprietary marks.

An alternative to filing an application in the Mayor’s own name, would have been to file the proposed use application in the name of the City, as such an application doesn’t require prior adoption and use by the City. It’s also not clear why, now that the City has publicly started promoting its EcoDensity Plan, it has not submitted an Official Mark Request to the Registrar.

In a follow up story today, the Vancouver Sun reports that Vision Vancouver, the opposition civic party, will request an extension of time to oppose the Mayor’s application on or before the deadline to do so.

Establishing a Trademark’s Distinctiveness: Recent Case Law

In Cross-Canada Auto Body Supply (Windsor) Limited v. Hyundai Motor America, the Applicant (the reseller of automotive parts and accessories and the Defendant in an ongoing trademark action brought by the Respondent) sought to expunge five of the Respondent’s trademark registrations: HD Design, HD & HYUNDAI Design, HMC Design, HYUNDAI and SONATA. In 1985 the Respondent’s parent company had assigned three of the marks to the Respondent’s predecessor, which in turn assigned the marks to the Respondents, in 1996, but the assignment was only registered in August 2004. The other two marks were assigned to the Respondent in September 2004.

The Applicant argued that the marks were not distinctive of the Respondent, the relevant date for determining distinctiveness in this case being the date the expungement action was commenced, because the the consuming public was not advised during the 1985 -2004 period of the change in ownership.

The Court noted that distinctiveness is the cardinal requirement of a trademark and it is a question of fact whether a clear message has been given to the public that the wares associated with the mark are those of the trademark owner and not those of another party. Relying on survey evidence, the Court concluded that the purchasing public was not confused about the source of the wares and always understood the Respondent to be the source of the vehicles, even though they were sold through dealers.

Moreover, since 1985 the Respondent and its predecessor, although they had not officially registered the assignment, had built up goodwill through extensive advertising.

The Court distinguished the Respondent’s situation from the earlier cases (Wilkinson Sword (Canada) Ltd. v. Juda and Breck’s Sporting Goods Co. v. Magder ) where a transfer of marks by a foreign parent company to its Canadian subsidiary and sales in Canada by a third party of wares purchased from the parent company resulted in a loss of distinctiveness. In the earlier cases there was no evidence that the source of the goods had become identified with the Canadian subsidiary. In this case, however, the Court was convinced by the expert evidence that the consuming public identified the source of the goods as the Canadian subsidiary.

There was delay in the registration of the assignment, but no reliable evidence of any public confusion that the source of the goods was other than the Respondent.

The Court was, however, convinced that one of the marks had been abandoned, not having been used in Canada for a long time and there being no justifiable excuse for non-use. The other four marks had not been abandoned and thus the Respondent was successful and awarded costs.

CAPTAIN CANUCK Trademarked and Riding the Skytrain

A recent story in the Vancouver Sun explains that the most recent manifestation of the comic book hero, Captain Canuck, is a Surrey British Columbia RCMP officer named David Semple.  Captain Canuck, a complicated character that has appeared in at least two other manifestations since his original introduction in 1975, is the creation of Richard Comely of Cambridge, Ontario.

For anyone else who thinks it is a clever idea, Mr. Comely has already registered CAPTAIN CANUCK as a trademark, has registered the domain name captaincanuck.com and has optioned the film rights.