The Supreme Court of Canada has denied Philip Morris's
request for leave to appeal the precedent-setting decision of the
Federal Court of Appeal in Imperial Tobacco Canada Limited v
Philip Morris Products SA.
The case involves a unique set of facts, and a long history
between the parties.
By way of background, Philip Morris' Marlboro product, with
its well-known red-and-white ('red roof') package design,
is the top-selling cigarette in the world. However, in the 1930s, a
predecessor to Philip Morris sold the MARLBORO mark in Canada to a
predecessor of Imperial Tobacco and, since that time, a
Marlboro cigarette product has been sold that is unique to
Since the 1950s, Philip Morris has made various attempts to
reacquire the Canadian rights to the MARLBORO mark. In addition, in
the 1980s Philip Morris unsuccessfully sought to expunge the
MARLBORO registration alleging a lack of distinctiveness in view of
extensive knowledge in Canada of Philip Morris' international
Subsequently, and as a result of not having rights to the
MARLBORO mark in Canada, Philip Morris for many years sold a
product in Canada using the 'red roof' design package, but
in association with other names such as Matador or Maverick.
However, in 2006 Philip Morris launched a new product in Canada
using a package with the 'red roof' design elements but
with no brand name. This was the first time in the world that a
cigarette product was offered for sale in a package with no brand
name. Along with the 'red roof' design elements, the
package also displayed the phrase "World Famous Imported
Blend". At around the same time, Canada imposed a
'dark' market for cigarettes, as they were no longer
visible at retail and consumers had to request products by their
At first instance, the trial judge had found that there was a
significant degree of confusion with a large number of consumers as
to how to refer to the no-name trade dress, associating it with the
Philip Morris Marlboro product. However, for reasons that were
subsequently considered to be in error by the Court of Appeal, the
trial judge ultimately held that this did not constitute
infringement of the MARLBORO word mark.
The Court of Appeal overturned the trial judge's decision
and emphasised that one of the relevant factors for assessing
confusion under the Canadian Trademarks Act is "the degree of
resemblance between the trademarks... in appearance or sound or
in the idea suggested by them".
Although there was no resemblance in appearance or sound between
Imperial Tobacco's MARLBORO mark and Philip Morris'
packaging, the Court of Appeal recognised that, in a 'dark'
market where the products are not visible, consumers may ask for it
by using words that are "not necessarily displayed on the
product". The Court of Appeal also found that Philip Morris
"intentionally conveyed" this association by using the
'red roof' design elements on their packaging. The court
concluded that consumers would use the same name to refer to two
different products offered by two different manufacturers, and that
this "must necessarily result in confusion...". As a
result, Philip Morris was enjoined, ordered to destroy all
offending packaging, and to pay damages or an accounting of their
While this case involved unique and specific facts, the Supreme
Court of Canada's dismissal of Philip Morris application for
leave may open the door for enhanced protection for trademark
owners, in all areas of commerce, that seek to prevent the use of a
confusing trade dress.
The preceding is intended as a timely update on Canadian
intellectual property and technology law. The content is
informational only and does not constitute legal or professional
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$314,000 in damages, $66,000 in costs at first instance, plus solicitor-client costs on the appeal (which was found to be "without merit"). In Lam v. Chanel S. de R.L., 2017 FCA 38, the Federal Court of Appeal confirmed these awards for four instances of selling counterfeit CHANEL goods at a Toronto-area mall between 2011 and 2013
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