Clark Wilson

Non-Use of a Trademark – Evidence of Special Circumstances Required

By In Branding, Trademark Oppositions

Jose Cuervo S.A. de C.V. v. Bacardi & Company Ltd. and the Registrar of Trade-marks was the second time that Bacardi had sought summary expungement, pursuant to section 45 of the Trade-marks Act, of the trade-mark CASTILLO for use in association with rum. This time, the Federal Court Trial Division agreed with the Registrar and expunged the mark for non-use. At issue before the Federal Court was the standard of review and whether special circumstances justified the non-use.

In the course of the earlier expungement action, the Appellant’s predecessor in title to the trademark had, on appeal, produced evidence of a sale of 41 cases of CASTILLO rum on November 21, 1994 to the Ontario Liquor Control Board. Thus, in Quarry Corp. v. Bacardi & Co (1996) 124 F.T.R. 264, the Court concluded the transaction was in the normal course of trade and set aside the Registrar’s decision to expunge. On further appeal, the Federal Court of Appeal upheld the Trial Division’s decision, but commented that a “single sale divorced from all context” would not normally be sufficient use. In other words, a single sale contrived to protect a trademark was not sufficient.

On October 26, 2005, at Bacardi’s request, the Registrar again issued a section 45 notice requiring evidence of use within the previous three years. The manager of Jose Cuervo’s legal department provided an affidavit dated June 23, 2006 attaching the invoice of November 21, 1994 evidencing the sale to the Ontario Liquor Control Board and an invoice of November 24, 1999 evidencing 100 cases sold to the Alberta Liquor and Gaming Commission (neither sale being within the 3-year limit). The manager also deposed that the Appellant had undertaken a new marketing strategy in 2002 to incorporate a secondary trademark, COHIBA, into the label (owned by a related company), but the co-branding strategy had triggered a worldwide dispute, including threatened litigation that was not yet resolved.

The Registrar concluded there was no use within the requisite 3-year period and, while threatened litigation might be a reasonable excuse for a short period, six years was not reasonable. Relying on the reasoning in Scott Paper Ltd. v. Smart & Biggar (previously discussed) the Registrar concluded that there were no special circumstances.

On appeal, Jose Cuervo provided an affidavit stating that it had resumed use of CASTILLO on August 4, 2008 and attached an invoice for a consignment to the Alberta Liquor and Gaming Commission. The Court noted that the standard of review should be resonableness. The new evidence was not such that it would have affected the Registrar’s decision (being evidence of use well after the 3-year limit) and therefore the standard of review was not correctness.

The Court affirmed the Registrar’s decision, noting that Jose Cuervo produced no evidence as to why the co-branding could not be suspended, stating that it ws “illogical to suspend the use of a valid Canadian trade-mark because of a threat of impending trade-mark litigation with respect to a secondary trade-mark”. The decision to suspend use of CASTILLO in Canada was voluntary and a trade-mark dispute over a secondary mark did not constitute exceptional circumstances.

Court Considers Colour Marks

By In Case Law, Registration, Trademark Oppositions

Peak Innovations Inc. (the “Applicant”) filed 31 applications to register trademarks for various of its products, namely wood to wood and concrete and masonry connectors, most of which are used in deck building. A competitor, Simpson Strong-Tie Company Inc. (the “Opponent”) filed statements of opposition in respect of all 31 applications.

On appeal, the Federal Court recently considered two of the applications agreeing with the Opposition Board and dismissing the appeals. At issue were a mark for the colour green (Application 1,187,491) and a mark for the colour greyish-green (PANTONE 5635C) (Application 1,205,529), both as applied to fastener brackets, claiming use in association with fastener brackets for attaching deck boards.

The Opponent filed additional evidence on its appeal to the Federal Court, but the Court did not agree there was evidence of third parties in the Canadian marketplace using grey or khaki green on items for purposes that included deck building. Thus, there was no confusion.

The Court also refused to consider the Opponent’s arguments concerning non-distinctiveness, since those allegations were raised for the first time on appeal, and “while a party is open to raise new evidence on appeal, it cannot raise new issues”.

The Court also concluded that the mark was not purely or primarily functional. The Opponent, based on certain statements made during the course of cross-examination, argued that green or greyish coating was added to products primarily to reduce corrosion. However, the Court noted that the coating could be produced in many colours and, following the decision of the Federal Court in Smith, Kline & French Canada Ltd. v. Registrar, concluded that “colour applied to the whole of the visible surface of an object can function as a trademark”.

Trademark Confusion: Possible Future Confusion Not Relevant

By In Case Law, Registration

In a recent decision of Canada’s Federal Court of Appeal, Masterpiece Inc. v. Alavida Lifestyles Inc. the Appellant sought to expunge the Respondent’s registered trademark MASTERPIECE LIVING pursuant to section 18(1)(a) of the Trade-marks Act alleging that it was unregistrable as of the date of registration because it was confusing with the Appellant’s use of the same mark or similar marks.

Both the Appellant and Respondent operated in the retirement residence industry. The Respondent applied to register MASTERPIECE LIVING on December 1, 2005 on the basis of proposed use and began using the mark in January 2006. The application was granted in March 2007. The Appellant alleged it had used a series of evolving trademarks with the word “Masterpiece” beginning in 2001, and began using MASTERPIECE LIVING either in December 2005 or February 2006, depending on which exhibit was consulted. It applied to register the mark on June 29, 2006, but the application was denied on the basis that the Respondent had already applied to register the mark.

Whether the Respondent’s mark was unregistrable as of the date of registration turned on section 16(3)(a) of the Trade-marks Act which allows an applicant who has filed on the basis of proposed use to secure its registration “unless at the date of filing of the application it was confusing with (a) a trademark that had been previously used in Canada or made known in Canada by another person”. Read more

Additional Evidence and Relevant Dates on Trademark Appeals

By In Case Law, Registration, Trademark Oppositions

In Advance Magazine Publishers, Inc. v. Wise Gourmet Inc. the publisher of GOURMET magazine successfully appealed a decision of the Trade-mark Opposition Board that the use of WISE GOURMET in association with various food products and printed publications, namely cookbooks, newsletters, nutrition guides, food recipes and periodicals relating to food and nutrition was not confusing with the use of GOURMET in association with magazines and other publications.  On appeal to the Federal Court, Advance Magazine Publishers, the original Opponent, submitted two lengthy affidavits that were not before the Trade-mark Opposition Board.  Although the original Applicant chose not to participate in the appeal, the Court noted that its position still had to be considered.

Given the new evidence the appeal proceeded on a de novo, or fresh, basis and applying the test for confusion set out in sections 6(2) and (5) of the Trade-marks Act, the Court concluded there was confusion, such that WISE GOURMET could not be registered.  Although GOURMET was not inherently distinctive, its use over time had gained the Opponent a certain reputation in relation to its magazine and associated wares and services.  The mark had also been in use for a long time, while the Applicant was a new entry into the market.  The nature of the wares and services and the nature of the trade were similar.  There was also a fair degree of resemblance between the two marks since the Applicant had incorporated the Opponent’s mark, GOURMET, in its entirety, into WISE GOURMET.  While the first word, “wise”, helped distinguish the marks to some degree in terms of sound and appearance, the idea suggested by both marks was similar. Read more

VANOC Unravels Cowichan Sweater Trade-mark Tangle

By In Branding

Members of the Cowichan Tribes had the Vancouver Olympic Committee (VANOC) tied up in knots recently when it accused VANOC of stealing the Cowichan’s traditional sweater design, popularly known as the “Cowichan Sweater”. VANOC had initially asked the Cowichan Tribes to bid on the contract to supply the sweater (which is part of the Team Canada uniform) but chose instead to give the contract to an outside supplier over concerns regarding the Cowichan’s ability to deliver sufficient quantities in the required timeframe.

The Cowichan decried the move, which they saw as an infringement of their well known design. Olympic torch-relay protests were planned, but tensions quickly unravelled when VANOC and the Bay offered the Cowichan a license deal for their sweaters. As a result of these negotiations, Cowichan-made sweaters will now be available at the Bay. Cowichan knitters will be licensed suppliers to the Olympics and will be entitled to display the Olympic logos alongside Cowichan trade-marks.

The Cowichan Band Council owns several trade-marks relating to the Cowichan brand, including both Official Marks and Certification Marks. Read more

Proving a Trademark Licence

By In Case Law, Protection & Enforcement, Trademark Oppositions

3082833 Nova Scotia Company v. Lang Michener LLP and Registrar of Trade-marks illustrates the importance of providing evidence of any licences in place when confronted with a summary expungement under section 45 of the Trademarks Act:  an evidentiary burden that is not difficult to meet.

3082833 Nova Scotia Company (“3082”) owned the registered mark ENTRE NOUS for use in association with “telecommunication services, namely long distrance telephone services”.  The mark was originally owned and used by 3362426 Canada Inc. (“3362”) carrying on business as Primus Telecommunications Canada Inc. (“PTC”).  3082 acquired the mark in the course of a reorganization and the mark was used by PTC, which had become 3082’s wholly owned subsidiary.

In response to a section 45 summary expungement, 3082 put forward invoices issued by PTC as evidence of use, but the Registrar concluded that they only referred to “Primus Canada” and there was no evidence that 3362 or 3082 had used the mark and no evidence of a licence. Read more

Counterfeit Goods: Statutory and Punitive Damages

By In Case Law, Protection & Enforcement

Microsoft Corporation v. 1276916 Ontario Ltd. et al is not a trademark case.   However, it is a further illustration of Canadian courts’ willingness to award substantial statutory damages under the Copyright Act, together with punitive damages, in counterfeit goods cases.

In this case Microsoft had received ten reports of software privacy.  An investigator attended the Mississauga, Ontario store operated by the defendant numbered company and was offered a computer system with unlicensed software.  A cease and desist letter was sent, but Microsoft continued to receive piracy reports.  An investigator subsequently bought a computer system with various unauthorized software loaded on it and Microsoft commenced the action.  The action was initially defended by the defendant numbered company and its owner, but the defence was struck out after the owner failed to attend discoveries, alleged the store was out of business, when it was not, and failed to appoint new counsel.

Microsoft applied for default judgment. Read more