Tequila Cuervo, S.A.("Cuervo") filed
an application in the Canadian Intellectual Property Office for the
registration of the trademark LAZARO COHIBA based on proposed use
in Canada with alcoholic beverages. Empresa Cubano Del Tabaco
("Empresa"), a distributor of tobacco
related products that predominately distributes cigars and holds
the COHIBA trademark, opposed the application on several grounds,
including the likelihood of confusion.
The Trade-marks Opposition Board, in a decision
rendered September 30, 2008, rejected all of the grounds of
opposition and in doing so placed considerable weight on the fact
that Empresa had not established an extensive reputation for its
mark. Also relevant was the differences between the wares of the
parties, as well as the channels and trades of the parties. Empresa
appealed the Board's decision to the Federal Court of Canada,
submitting new evidence with respect to the above two issues.
On the reputation issue, Empresa submitted expert evidence of
Cohiba cigar's iconic brand status, noting that this brand was
featured in television shows, movies and other media forms. This
evidence was corroborated by other affidavit evidence establishing
that the Cohiba cigar brand had been featured in magazines and
other media content that had been circulated throughout Canada. On
the distinctiveness issue, expert evidence was tendered to
establish that users of tobacco and alcohol often consume both
products, and that the use of one involves the use of the other. On
this latter issue, new evidence was submitted by Empresa showing
that many stores sold both hard alcohol and cigars.
In its October 4, 2013 decision, the Federal
Court, in light of this new evidence, reversed the Board's
decision and held that the test for confusion had been met. The
Court first noted that Empresa's cigar sales in Canada were not
insignificant and accepted the evidence establishing that the
COHIBA cigar brand had an iconic status. On this latter point, the
Court noted that "personal ownership or use of the product is
not essential to the awareness or knowledge of a
With respect to the distinctiveness issue, the Court held that
the sale of cigars and spirits in many stores across Canada was not
particularly persuasive on its own. However, the Court noted
[t]he reason why the
proximity of cigars and alcohol is important for the analysis only
becomes apparent upon examination of the relationship between
smoking and alcohol. This is where the [expert evidence] is very
The Court accorded significant weight to the fact that a smoker
subjectively relates alcohol to cigars, and therefore, a
"predisposition for confusion" exists. Moving forward, it
remains to be seen how far this reasoning can be taken. Does such a
predisposition exist with wine and cheese, particularly in those
parts of Canada where they are available in the same store?
Thus, the iconic status of COHIBA, coupled with the close
relationship between sales of alcohol and tobacco led the Court to
conclude that there was confusion.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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