Maintained by Clark Wilson LLP

MACDIMSUM: Challenging a Family of Marks

In Cheah v. McDonald’s Corporation, the Federal Court of Canada held that MACDIMSUM is likely to be confusing with the MacDonald’s family of trademarks.  Focusing on the evidence presented, the Court distinguished several earlier cases in which McDonald’s failed to preclude other businesses from using the MC or MAC prefix, including McDonald’s Corporation v. Silcorp Ltd (1989) and McDonald’s Corporation v. Coffee Hut Stores Ltd (1996), where McDonald’s failed to prevent the use of MAC for convenience stores and MCBEAN for a coffee business.  In Cheah, the Applicant, who was self‑represented, did not meet the onus on him to prove the mark was registrable.  It was also important that the application was simply for the word MACDIMSUM and not for that word in any particular type style or in combination with any other word or design.  Since a proposed use application was at issue, the Court stated that it must remain open to the fact that the trademark could potentially be used in any type style, with any combination of words or design, and in any trade environment as may present itself from time to time.

The Applicant failed to present any evidence of actual use and during cross‑examination he acknowledged he had not yet finalized plans regarding use.  McDonald’s’ evidence focused on its family of marks and included affidavits regarding McDonald’s “four score” trademarks, use and advertising in Canada, as well as an expert survey. 

In dismissing the appeal, the Court stated that the evidence presented regarding use or intended use is critical to a decision such as this.  While the respondent McDonald’s Corporation presented considerable evidence to oppose the registration of the word MACDIMSUM, the Applicant presented little probative evidence throughout the proceedings.  The Court also accepted the survey that McDonald’s presented, which involved showing certain members of the public a card bearing the word MACDIMSUM, and others a card bearing the word MAZDIMSUM.  Based on the results, the expert concluded that a statistically significant portion of consumers would identify the McDonald’s as the source of the MACDIMSUM food products.

The Court also found that the Applicant’s evidence of the use of MC and MAC in other jurisdictions was largely hearsay and did not establish dilution in Canada.  Finally, the Court found no merit in the Applicant’s assertion that he was being bullied, noting that the McDonald’s counsel was proper and courteous.  Instead, a hint of the Applicant’s true intention was to be found in a letter in which he suggested the possibility of “a global MACDIMSUM partnership”.

A Clearly Descriptive Engineering Trademark

In the recent case of Continental Teves AG & Co v. Canadian Council of Professional Engineers, the Federal Court of Canada dismissed an appeal of the Trade-mark Opposition Board’s refusal to register a mark.  The original application was brought by Continental Teves, a foreign corporation, to register the words ENGINEERING EXCELLENCE IS OUR HERITAGE for use as a trade-mark in Canada in association with wares, namely brake pads and rotors for land vehicles.  The Canadian Council of Professional Engineers (the “Council”), a national organization of the 12 provincial and territorial associations that license and regulate Canadian engineers, opposed the application.  It is the Council’s policy to oppose trademarks which consist of or include the term “engineering” in order to both protect the integrity of the titles of Canadian engineering professionals and to protect the public.

At issue on the appeal was whether the Hearing Officer erred in finding that the mark:

1. Was not clearly descriptive of the character or quality of the wares, based on section 12(1)(b) of the Trade-Marks Act;

2. Was deceptively misdescriptive of the character or quality of the wares, based on section 12(1)(b) of the Act; and

3. Was not distinctive of the wares based on the section 2 definition of “distinctive”.

Regarding the section 12(1)(b) prohibition on registering “clearly descriptive” and “deceptively misdescriptive” marks, the Court came to the same result, that the mark was not registrable, although for opposite reasons.  A mark is not registrable if it is either “clearly descriptive” or “deceptively misdescriptive”.  Whereas the Hearing Officer found the mark to be not clearly descriptive yet deceptively misdescriptive of the persons employed in the production of the wares, the Court found the converse – that the mark was “clearly descriptive” yet not “deceptively misdescriptive”.

Informing this reversal was the additional affidavit evidence from one of Continental Teves’ vice presidents, stating that the company employs a substantial number of engineers in the production of the wares in question and had done so for decades.  However, the Court also noted that nothing in the evidence established whether Canadian engineers were involved although it appeared that none were.  This additional evidence was enough to change the mark’s characterisation from “not clearly descriptive” to “clearly descriptive”  since it established that engineers were involved and the mark was therefore a clear description of the manner in which the wares are designed and produced.  Nothing in the evidence established whether the engineers involved were Canadian, but this did not matter since there was no evidence indicating or suggesting that the average consumer, on encountering the mark, would believe the wares were designed or produced by Canadian engineers.  Thus, the mark was not deceptively misdescriptive according to the Court.  The decision appears to be at odds with the earlier decision in Canadian Council of Professional Engineers v. Kelly Properties LLC, but in that case the Applicant was seeking to use KELLY ENGINEERING RESOURCES in association with employment services, which implied that Canadian engineers were involved since the services were being offered in Canada and only a licensed Canadian engineer could offer such services.

The Court came to the same result as the Hearing Officer on the finding of a lack of distinctiveness, noting that distinctiveness is “the very essence of a trademark” since it allows a consumer to identify the source of goods.  Continental Teves failed to meet its onus to prove the mark was distinctive of the wares in the face of the Council’s evidence showing the use of the phrase “engineering excellence” in Canada and abroad in multiple contexts.

Finally, the Court noted the Council was “zealous” in protecting the exclusivity of the words “engineer” and “engineering”, although this was not an endorsement or disapproval of the approach but only an observation regarding the policy.

Trademark Evidentiary Issues / Colour as a Trademark

JTI Macdonald TM Corp. v. Imperial Tobacco Products Limited, a recent decision of the Federal Court, includes interesting findings regarding the introduction of additional evidence on appeals, colour constituting a trademark rather than a distinguishing guise and the evidence necessary to establish non-distinctiveness.

Imperial Tobacco applied to register “the colour orange applied to the visible surface of the packaging as shown in the attached drawing”, namely a drawing of a cigarette package.  JTI-Macdonald opposed the application and, being unsuccessful before the Opposition Board, appealed to the Federal Court.  The Federal Court agreed with the Board and rejected the various grounds of opposition.

The Court applied a standard of reasonableness, rather than correctness, when considering the appeal, given that the issues were mixed fact and law and within the expertise of the Board.  On an appeal from the Opposition Board a party is entitled to introduce new evidence and if that evidence would have “materially affected” the Board’s findings, the standard of review is one of correctness.  However, in this case, the Court concluded that the additional evidence that JTI-Macdonald sought to introduce merely provided additional examples of products rejected by the Board in its analysis of distinctiveness and therefore would not have affected the Board’s decision. 

The Court also considered the issue whether the applied for colour formed part of a mode of wrapping or packaging so as to constitute a distinguishing guise.  The Court noted that what was applied for was the colour orange applied to the packaging.  The colour was claimed separately and was not just an element of the packaging. Thus, the Board reasonably concluded that the colour was not part of the wrapping or packaging and could be claimed alone as a trademark.

With regards to the evidence necessary to establish distinctiveness, the Court noted that the relevant date for establishing a lack of distinctiveness is the date of the filing of the opposition.  Some of JTI-Macdonald’s evidence was from the period prior to the date when the opposition was filed and was therefore not probative.  As well, a number of the products relied on by JTI-Macdonald to establish non-distinctiveness either lacked sales data or had very low sales figures and did not assist.

In the end none of the grounds of opposition were accepted by the Board or the Court and the trademark was allowed to proceed to allowance.

A Professional Designation Can Be A Certification Mark: Canada’s Federal Court

In a decision rendered earlier this year, Ontario Dental Assistants Association v. Canadian Dental Association, the Federal Court of Canada held that a professional designation could function as a certification mark, although not  in the case at hand.

The case was an appeal from a decision of the Trademarks Opposition Board (TMOB) allowing the Canadian Dental Association’s opposition to the registration of the certification mark “CDA”.  The Ontario Dental Assistants Association (ODAA) had applied to register the certification mark “CDA” in association with dental assisting services, and more particularly to denote a dental assistant that possessed specific qualifications as approved by the ODAA.  The ODAA alleged use in Canada since at least as early as 1965.

The TMOB denied the registration of “CDA” as a certification mark on the basis that a professional designation could not function as a certification mark and consequently the acronym “CDA” could not be said to have been used as a certification mark from the time claimed by ODAA in its application.  The TMOB also held that the certification mark “CDA” was not distinctive enough to be registered, given its use by the Canadian Dental Association as an acronym to refer to itself.

On appeal, the Federal Court focused on paragraph (c) of the definition of “certification mark” in section 2 of the Trade-Marks Act: “means a mark that is used for the purpose of distinguishing or so as to distinguish wares or services that are of a defined standard with respect to… (c) the class of persons by whom the wares have been produced or the services are performed… from wares or services that are not of that defined standard.”

The Court held that the definition must be viewed in the context of the Act as a whole and listed the criteria a certification mark must meet, namely: not be clearly descriptive or deceptively misdescriptive of the wares or services; be distinctive; not be used by the owner, but only by authorized licensees; not be confusing with a registered or previously applied for trade-mark or trade name; and be used in accordance with section 4 of the Act which includes, with respect to services, use or display in the advertising of the services.  The Court disagreed with a 1988 Opposition Board decision, Life Underwriters Association of Canada v. Provincial Association of Quebec Life Underwriters, which suggested that a professional designation could never serve as a valid certification mark, and found that there is nothing in the Act to preclude a valid certification mark from being registered for a professional designation, so long as the mark satisfies the listed criteria.

Despite this finding, the Court dismissed the ODAA’s appeal on the grounds that the ODAA had not established use of the acronym “CDA” as a certification mark since as early as 1965.  Documents issued by the ODAA to dental assistants did not constitute use by licensees or certified users and name tags evidenced use by dental assistants to show their membership in the association, but not to distinguish the services performed.  Moreover, the mark was not distinctive given its use by the Canadian Dental Association.

Thus, while the ODAA was not successful, it is now clear that a professional designation could constitute a certification mark, if the criteria are met.

Trademark Interlocutory Injunction Denied

A recent decision of the Saskatchewan Court of Appeal, setting aside the interlocutory injunction granted by the Chambers judge, illustrates how difficult it is to obtain an interlocutory injunction absent convincing evidence that satisfies the three part test for an interlocutory injunction.  In Kulyk v. Wildman (Weight Loss Forever Consulting), the Saskatchewan Court of Queen’s Bench granted the plaintiff an interlocutory injunction precluding the defendant from using or carrying on business under the plaintiff’s alleged business name and trademark, “Global Healthcare Connections” and directing the defendant to remove all references to the plaintiff’s mark on social media sources.  In assessing the plaintiff’s application, the Chambers judge looked to Potash Corp. of Saskatchewan Inc. v. Mosaic Potash Esterhazy Limited Partnership which set out the well‑established test for an interlocutory injunction:  

(1) the strength of the plaintiff’s case;

(2) the presence of a meaningful risk of irreparable harm if the injunction is not granted; and,

(3) whether the balance of convenience favours the granting of the injunction. 

The Court of Appeal allowed the appeal and held that the plaintiff’s application for injunctive relief was based on the common law tort of passing off, which in turn, required evidence of goodwill, deception of the public due to misrepresentation, and actual or potential damage to the plaintiff.  The Court stated that the plaintiff’s case was weak because she failed to put forth any evidence to establish the existence of goodwill associated with the name Global Healthcare Connections.  The plaintiff’s affidavit referred to various steps she had taken to launch her business, but it also stated that she had had difficulty launching her business because of the defendant’s actions.  Thus, there was no evidence that the plaintiff or her services were known in the market.

The Court found it unnecessary to assess the remaining elements of the common law tort, although it did comment on these.  With respect to the element of irreparable harm, the Court disagreed with the Chambers judge’s finding that the plaintiff had suffered loss of business, finding instead, that the similarity between the names used by the parties would likely result in a benefit rather than harm to the plaintiff’s business.  Noting that a balance of convenience analysis could be “compendious”, the Court was satisfied that the balance of convenience also favoured the defendant, given the weakness of the plaintiff’s case and given that irreparable harm favoured the defendant.  Thus, the Chambers judge’s decision could not stand.

Injunction for Trademark Infringement: Québec

In Solutions Abilis Inc. v. Groupe Alithis Inc., the Québec Superior Court granted the plaintiff an interlocutory injunction precluding the defendant from using ALITHIS as part of its corporate name or trade name or as a trademark.  The test for an interlocutory injunction in Québec turns on whether the rights which the plaintiff invokes are clear, doubtful or non-existent.  If those rights are clear an injunction should be granted if serious harm would otherwise result.  If those rights are doubtful the court must also consider the balance of convenience.  This test is similar, although not identical, to the test used in the common law provinces where the courts must consider whether there is a serious issue to be tried, irreparable harm and the balance of conclusive irreparable harm. 

After setting out the test the Court then considered the plaintiff’s trademark rights, starting from the premise that trademarks are a guarantee of origin and intended to protect the public by indicating the source of the goods and services.  The Court then focused on whether there was confusion, finding that the plaintiff’s marks,

 abilis it           abilis ti

were inherently distinctive, since the included word, ABILIS, was a coined term with 3 syllables that created a strong sonority – “ab-il-is” and because of the use and position of the “it” and “ti” symbols in the marks.  The defendant’s mark,

alithis

 also used 3 syllables and a symbol.

The length of time also favoured the plaintiff and the nature of the trade was similar, namely computer consulting services.  The Court was not willing to accept the defendants’ argument that persons purchasing computer services would take time to determine the source, noting that initial interest confusion was sufficient and might, among other things, result in the plaintiff not being invited to bid for a potential customer’s work.  The Court was also convinced there was a sufficient degree of resemblance, referencing a number of Québec cases where the degree of resemblance led to a finding of confusion even where the goods or services were different. 

Since the likelihood of confusion was clear, a loss of goodwill and clientele were presumed and therefore the injunction was granted.  A decision regarding the balance of convenience was not necessary, but the Court noted, in the event of an appeal, that it favoured the plaintiff, particularly given the shorter period of time the defendants had been in the market.

Punitive Damages: Trademark and Copyright Infringement

The most recent case from the Federal Court continues the Court’s tough stance with respect to trademark and copyright infringement in Canada. 

In Harley-Davidson Motor Co. Group LLC v. Manoukian, the Court awarded significant compensatory and punitive damages against the Defendant company and its principal.

The Plaintiffs, H-D Michigan, LLC (“MI”), Harley-Davidson Motor Company Group, LLC (“MCG”) and Harley-Davidson Company, Inc. (“MCI”), hired an investigator to conduct an investigation into the alleged manufacture, offering for sale and sale of counterfeit Harley-Davidson clothing by the Defendants.  The investigator attended two separate locations of the Defendants.  While in attendance at both locations, the investigator was shown and purchased a number of counterfeit items including t-shirts, cloth and leather jackets and hooded sweatshirts, all of which contained unauthorised productions of the Harley-Davidson trademarks.

The Court was satisfied the matter could proceed on a motion for summary judgment.  In determining the damage award, the Court noted that where Defendants provide no records to substantiate the manufacture and sale of counterfeit wares, it is difficult to assess damages.  However, in these circumstances, the Court will apply a minimum compensatory damage award on a per infringing activity basis.

Following such cases as Ragdoll Productions (UK) Ltd v. Jane Doe and Oakley Inc. v. Jane Doe, the Court awarded damages for trademark infringement of $3,625 for each of the three occasions on which the Defendant was observed selling counterfeit goods at a flea market and $7,250 for each of the two occasions on which the Defendant was observed selling wares from a fixed retail establishment.  As the Plaintiffs were seeking damages on behalf of the trademark owner, MI, and the licensee/distributor, MCI/Fred Deeley, these amounts were doubled for a total of $65,250, payable jointly and severally by the Defendants.

In addition, although the Defendants’ lack of records made an accurate assessment of profits impossible, the Court found that the Plaintiffs were entitled to punitive damages of $50,000 to sanction the “blatant disregard” of the law by the Defendant.  In awarding the punitive damages, the Court noted that the Defendants had been offering for sale and selling counterfeit Harley-Davidson merchandise since as early as October 2006, and continued to do so despite the cease and desist letter served on the Defendants in 2010.  The Court also noted that there was evidence that the Defendant Manoukian, was well aware of the illegal nature of his trade.

The Court refused to award solicitor-client costs, since the evidence that the Defendants had missed a number of deadlines was not the kind of conduct attracting solicitor-client costs.  Further, the Defendants’ unjustifiable and inexcusable violation of the Plaintiff’s rights was covered by the punitive damages.