IP Report Online @ Gowlings – May 2006

Edited by Robert A. MacDonald

Contents

• Federal Court Holds in Favour of Famous JAGUAR Automobile Trade Mark - By Albert Chang

• Confusion in the Grocery Aisle - By Jay Zakaïb

• Scope of Protection for Long-standing Mark Limited to Intersection of Goods - By Katherine Dimock

• Flavourful Trade Marks may be Delicious, but not Necessarily Distinctive - By Katherine Dimock

Official Mark Development

• Federal Court Delivers Verdict Against Foreign Ownership of Official Marks - By Oksana Osadchuk

Counterfeiting News

• Canada: Response to Counterfeiting - By Monique M. Couture

• Interim Injunctions in IP Cases in Russia - By Dmitry Semenov

• Bill C-29, An Act to Amend the Patent Act, Came Into Force on February 1, 2006 - By Judy Erratt

• Trade Mark Group Continues to Take Lead in Domain Name Law

• Gowlings Launches Madrid Protocol Web Portal

• Gowlings Recognized as Canadian Intellectual Property Firm of the Year

• Gowlings Moscow Recognized as Leading IP Practice in Russia

TRADE MARKS UPDATE

One of the challenges facing owners of famous trade marks alleging a likelihood of confusion with an infringing mark has been the Federal Court's emphasis on a connection between the activities of the parties. In the recent case of Remo Imports v. Jaguar Cars, the Federal Court determined that there was a connection between luggage wares and automobiles, and expunged Remo Imports' JAGUAR trade mark registration for bags and luggage on the basis that it was confusing with Jaguar Cars' famous JAGUAR trade mark for automobiles and that it depreciated the value of the goodwill of the famous trade mark.

The Court accepted that Jaguar Cars' trade mark JAGUAR for automobiles is famous, and accordingly worthy of the breadth of protection afforded to famous marks. Furthermore, the Court determined that luggage wares and automobiles are sufficiently connected in the minds of consumers to result in a likelihood of confusion. In so doing, the Court applied the following four factors: (1) function and concurrent use, (2) industry practice worldwide, (3) actual extensions by the senior user, and (4) brand attributes. Applying the additional statutory factors set out in subsection 6(5) of the Trade-marks Act, and having regard to all the surrounding circumstances, the Court determined that Remo's trade mark was confusing with Jaguar Cars' mark.

The Court also held that Remo's use of the trade mark JAGUAR depreciated the value of the goodwill of the famous car mark through the loss of a valuable asset, lost exclusivity (dilution), tarnishment, and the possibility of deception. The Court's application of the relevant statutory provision, section 22 of the Trade-marks Act, is especially noteworthy. The Court confirmed that there must be a connection between the wares or services associated with the parties' marks; however, since section 22 requires proof of likelihood of depreciation without the need for proof of confusion, the standard of "connection" required is lower.

This decision provides a comprehensive discussion of the ambit of protection afforded to famous marks. The Court's application of the provision dealing with the depreciation of the goodwill attaching to registered trade marks is especially noteworthy, and may assist owners of famous marks in the protection of their trade marks.

For the full text of the decision see:
http://decisions.fct-cf.gc.ca/fct/2006/2006fc21.shtml

Confusion in the Grocery Aisle

The TRADITION trade mark was part of the business success of Tradition Fine Foods Ltd., a company selling frozen and unbaked products for retail resale under this mark. The Sobeys' grocery chain opened supermarkets in association with its trade marks TRADITION MARKET FRESH FOODS and MARCHE TRADITION. The Court refused to find infringement on the basis that there was no likelihood of confusion. Evidence of actual confusion from the president and receptionist of Tradition, who had fielded calls asking about the new stores and whether they were related to the baking business, was not persuasive.

In order to prove likelihood of confusion, the Plaintiff brought forth survey evidence to show an association between the Defendants' Tradition grocery store name and the Plaintiff's business. The Court did not find the survey evidence persuasive, even though the Court did not disqualify the expert testimony or its source.

Finally, the Court considered that, while some factors with respect to the likelihood of confusion may be stronger than other factors, the evidence was unpersuasive, even though the Defendants had appropriated the entirety of the TRADITION trade mark.

The decisive factor for the Court in denying the Plaintiff's prayer for relief appeared to be the fact that TRADITION was a word with little distinctiveness. Interestingly, the Defendants were able to obtain a registration incorporating the word TRADITION even though Tradition Fine Foods Ltd. already had a registration for that mark. The evidence of coexistence in the marketplace for food producers appears to have carried the day.

On appeal, the Court of Appeal concurred in the analysis and the result of the court below, finding that the issue of confusion, whether in the context of passing off or infringement, is largely a question of fact, and that the trial judge was entitled to give the weight that he did to the evidence. However, the Court of Appeal went further and also said, with respect to the ultimate conclusion, that the results of the survey evidence and of the analysis of the relevant statutory factors did not prove that there was confusion.

The Court construed section 19 of the Trade-marks Act to provide for infringement of a registered trade mark only where the right to exclusive use of the word TRADITION alone is breached. Here, the Defendants had incorporated the entirety of the trade mark TRADITION into their trade marks, which contained additional wording. Yet, this action did not offend section 19 of the Act.

The results of this case underscore two key concepts:

1. while registration grants the right of action to sue for trade mark infringement, the right may be construed narrowly where the mark is a weak one, even if the mark is adopted in its entirety; and
2. where one wants to enter a market where similar, weak trade marks co-exist, issues such as length of use and channels of trade or evidence of a business association being made that shows a likelihood of confusion will not necessarily provide relief from infringement for the aggrieved party.

For the full text of the decision see:
http://decisions.fca-caf.gc.ca/fca/2005/2005fca342.shtml

Scope of Protection for Long-standing Mark Limited to Intersection of Goods

Maison Cousin (1980) Inc. owns several registered trade marks that include the word COUSIN for various food products, including luncheon meats, sandwiches and pastries. One of these marks, MAISON COUSIN & DESIGN, has been registered for over forty years. When Cousins Submarines Inc. filed an application for COUSINS for submarine sandwiches, beverages and restaurant services, Maison Cousin opposed it, but was only partially successful, despite the overlap between the parties' products and the applicant's restaurant services. While the Trade-marks Opposition Board held that COUSINS is confusingly similar to MAISON COUSIN for submarine sandwiches, it did not agree with Maison Cousin's assertion of confusion with respect to beverages and restaurant services.

Maison Cousin unsuccessfully appealed the decision to the Federal Court, which upheld the findings of the Trade-marks Opposition Board.

In only finding an issue of partial confusion with respect to the applicant's submarine sandwiches but not beverages and restaurant services, the Court took note of the respective parties' operations. Since Cousins Submarines would be selling its products and offering services solely through restaurants, its products and services would not be offered for sale at the same locations as products originating from Maison Cousin, namely in convenience stores and grocery stores. While Maison Cousin operates its own stores, some of its bakery products are also available at third party retail outlets. However, products emanating from Cousins Submarines would not be sold in the same outlets, a fact that served to satisfy the Court that the respective channels of trade differed.

Another factor the Court considered was the fact that the Cousins Submarines mark consisted solely of the word COUSINS, as opposed to the marks of Maison Cousin, which contained more than a single element.

For the full text of the decision see:
http://decisions.fct-cf.gc.ca/cf/2006/2006cf2.shtml

Flavourful Trade Marks may be Delicious, but not Necessarily Distinctive

When choosing a trade mark for food products, companies often select a trade mark that includes a word that evokes a particular scent or flavour. As such trade marks are often considered descriptive, it may be difficult to prevent others from registering a word that is the name of a flavour or scent. Such trade marks can be less distinctive than one that contains words that are arbitrary or have no meaning in relation to the product with which they are used.

Saputo Groupe Boulangerie, owner of a registration for AH CARAMEL! for various snack products, attempted to prevent the registration of the trade mark CARAMELLA, owned by National Importers, intended to be used on a spread for cooking and baking. Saputo considered CARAMELLA to be confusing with AH CARAMEL! and it also contended that CARAMELLA lacked distinctiveness as a trade mark since Saputo also owned the trade mark CARAMEL & Design, in addition to AH CARAMEL!. In support of its position, Saputo maintained that, through a licensee, it had manufactured caramel spread since 2001, and that as a result, the AH CARAMEL! mark had become known and associated with Saputo.

In response, National Importers demonstrated that it had used CARAMELLA without any incidents of confusion since mid-1999. It also provided evidence of the existence of other marks that include the word "CARAMEL" or the letters "CARAM" for use in the food industry, in an effort to demonstrate that Saputo did not enjoy a monopoly in the word CARAMEL as part of a trade mark for food products. The Trade-marks Opposition Board agreed and dismissed Saputo's opposition. In response, Saputo appealed to the Federal Court, which upheld the decision. As the word "CARAMEL", the primary element in both AH CARAMEL! and CARAMELLA, is descriptive, the marks are weak and no likelihood of confusion exists.

Not surprisingly, this decision demonstrates that it is difficult for any one trader to claim exclusive rights in a trade mark comprised of an element or elements that are, in fact, the name of a flavour or scent, for food related items.

For the full text of the decision see:
http://decisions.fct-cf.gc.ca/fct/2005/2005fc1460.shtml

OFFICIAL MARK DEVELOPMENT

In Canada Post Corporation v. United States Postal Service, 2005 FC 1630, the Federal Court denied Official Mark protection to the United States Postal Service on the basis that it is not a public authority in Canada.

In the December 12, 2001 and January 9, 2002 editions of the Trade-marks Journal, the Registrar gave public notice of the adoption and use in Canada by the United States Postal Service of thirteen Official Marks. Canada Post Corporation applied for judicial review of the decision, and was successful in having it set aside.

Section 9(1)(n)(iii) of the Canadian Trade-marks Act precludes the adoption of any mark consisting of, or so closely resembling as to be likely to be mistaken for, an Official Mark in respect of which the Registrar has given public notice. Interpretation of this provision is problematic, however, because the English and French versions differ. The English version states that an Official Mark must have been "adopted and used by any public authority, in Canada." The French version omits the comma and refers to "a" public authority instead of "any" public authority. The Federal Court has now interpreted this provision to require that the public authority be in Canada, i.e. subject to Canadian governmental control. Mere use of the Official Mark in Canada is insufficient.

The Court found that the French version of the provision more accurately reflects Parliament's intentions, since the comma in the English version was originally absent and only inserted as an administrative act upon incorporation of the Trade-marks Act into the Revised Statutes of Canada in 1985. Moreover, while the English version can be ambiguous, the French version can have only one meaning: that the words "in Canada " modify "public authority" and not "adopted and used". (In a previous case, the Federal Court had expressed the opposite conclusion.) In addition, the narrower meaning of the French wording "a public authority", rather than "any public authority", also supports the limitation of Official Mark availability to public authorities in Canada.

Since Official Marks are largely a Canadian concept and are not addressed in the Paris Convention, the Court found no need under this treaty to extend the protection available to Canadian public authorities to nationals of other member countries.

Section 9(1)(n)(iii) confers very substantial benefits that are not available to owners of regular trade marks. Official Marks are not restricted to specific wares or services. They are not examined for confusion with prior rights, descriptiveness etc., and are very difficult to remove from the Register. Since it is Canadian trade-mark owners and the Canadian public who may be disadvantaged by the enforcement of an Official Mark, the Court concluded that Official Mark holders should ultimately be accountable to the Canadian electorate via control by a Canadian government.

For the full text of the decision see:
http://decisions.fct-cf.gc.ca/fct/2005/2005fc1630.shtml

COUNTERFEITING NEWS

Trade in counterfeit goods is a grim global phenomenon. Complex, fast moving, and sophisticated, it demands an increasing awareness worldwide. This awareness is changing the intellectual property rights landscape in Canada.

The Royal Canadian Mounted Police (RCMP) has for some years identified an established counterfeit industry in Canada. Described as an organized, international network involved in multiple criminal enterprises, it makes a substantial profit, and operates in multiple cities.

This sobering link to organized crime is coupled with a growing awareness of the serious repercussions of this trade: severe health and safety risks, genuine loss of employment opportunities, and loss of revenue (tax or otherwise).

Add to the mix Canada's consistent presence on the Special 301 Watch List, which notes that Canada's border enforcement measures "continue to be a serious concern for IP owners, who consider Canada's border enforcement measures to be inconsistent with its TRIPS obligations."

Canada has not taken this criticism lightly.

Three new arenas thus enjoy increased activity. An interdepartmental working group with various health, industry, justice, border, heritage and public safety ministries and services, has met for close to one year with the RCMP, to formulate an improved strategy. The results are expected shortly.

There is improved cooperation between law enforcement agencies relating to border protection.

Finally, brand owners are getting together to speak in one voice through the Canadian Anti-Counterfeiting Network (CACN), a coalition of individuals, companies, firms and associations. Its key objectives are lobbying for legislative change and increased resources, raising awareness, and sharing relevant information with law enforcement, private sector companies and international organizations.

How these efforts will impact the fight against counterfeit trade remains to be assessed. However, the winds are changing in Canada. Hopefully, a cold and steely current, able to dampen the enthusiasm of the counterfeit industry within these northern borders.

For more information see:
http://www.gowlings.com/resources/publicationPDFs/OLM_Dec05_MCouture.pdf

LITIGATION IN RUSSIA

The majority of intellectual property disputes, such as trade mark, trade name, domain name, patent and copyright disputes, are tried by arbitration courts in Russia. Similar to commercial courts, Russian arbitration courts are permanently functioning courts that consider economic disputes. The Arbitration Procedural Code of the Russian Federation (the "Arbitration Code"), which became effective as of September 1, 2002, provides procedural rules for litigation in the arbitration courts.

Under the Arbitration Code, a party to a dispute may bring a motion for an interim injunction, simultaneously with the statement of claim or at a later stage of litigation. Injunctions may be imposed when the applicant has proved that their absence may complicate or make impossible execution of the court judgement. Injunctions may also serve the purpose of preventing substantial damage to the applicant.

The Arbitration Code also provides for a right to move for a preliminary injunction, which is aimed at securing material of interest to the applicant before the actual statement of claim is filed. Parties who have grounds to believe that presentation of necessary evidence to the arbitration court at a later stage may be impossible or complicated are entitled to bring a motion to secure the evidence for further legal action.

The court should consider the above-mentioned motions within one day, without notice to the parties. The injunction order must be enforced immediately by the court bailiff service.

Under the Arbitration Code, the court cannot refuse and must grant an injunction when the claimant posts a deposit with the court. The court determines the amount of the deposit, which cannot be less than 50 per cent of the claim. Recent commentaries on the law and court practice show that the deposit option is not applicable in those intellectual property cases where the claim does not have a monetary value.

Arbitration court decisions and rulings, including those on interim injunctions and preliminary injunctions, are not publicly available in Russia. The decisions are available only to the parties to the disputes, although some cases have been included in publications on intellectual property matters or in legal databases. In view of the above, it is not possible to provide a comprehensive overview of court practice in granting interim injunctions in Russia. We can comment only our own practice.

In one recent patent infringement case, the arbitration court did not grant an interim injunction. An interim injunction motion attached to the statement of claim in another domain name infringement case was not satisfied either. However, that motion was satisfied at a later stage, during hearings on the merits. It appears that the courts are reluctant to grant preliminary injunctions.

We hope that the practice of implementing interim injunctions will facilitate protection of intellectual property rights in the arbitration courts. There are hopes that these measures may be used by rights owners to stop the circulation of pirated copies or to freeze infringers' assets to secure damages.

PATENTS ANNOUNCEMENT

The Canadian Patent Act has been amended (new section 78.6) to provide a 12 month period for applicants and patent holders to rectify past incorrect payments made to the Canadian Intellectual Property Office (CIPO) at the small entity rate, when the payor was not entitled to claim small entity status.

There are two groups of applicants and patent holders who should take advantage of the relief provided by this amendment. The first group is affected by the Federal Court of Appeal's 2003 ruling, in Dutch Industries Ltd. v. Canada (Commissioner of Patents), that entity size is determined once, when the patent application is first filed. Therefore, applicants and patent holders whose status changed from regular to small entity and who changed their payments accordingly should correct any payment made at the small entity rate. The second group includes applicants and patent holders who have discovered that they erroneously paid a fee at the small entity rate. The validity of their patents could be challenged and therefore, they should take advantage of this one-time period to make any corrective payments.

Beginning February 1, 2006, CIPO started receiving such payments. CIPO will review its records and the amount submitted and, as a courtesy, advise if the payment received is less than that expected. No notice will be sent if the amount received is equal to or exceeds that expected by CIPO. Refunds will not be made for any overpayment.

Further information can be found at:
http: //strategis.ic.gc.ca/sc_mrksv/cipo/patents/c-29_intro-e.html.

DOMAIN NAMES

Gowlings is pleased to announce the launch of a unique Web site offering a comprehensive review of Canadian and international domain name law.

Located at GowlingsOnDomains.com, the Web site provides a thorough review of all relevant Canadian Internet court and arbitration cases relating to domain names and trade marks, while also providing a comparative review of UDRP and U.S. law. Relevant international decisions and laws are also canvassed.

The Web site also provides useful links and helpful Internet tools.

The site is located at:
http://www.GowlingsOnDomains.com

MADRID PROTOCOL

The Gowlings Madrid Protocol Web Portal is your newest resource for information on the Madrid System and International Registrations.

Our user-friendly Portal offers general information on the Madrid System and member countries, as well as what you need to know about International Registrations — what they are, how they work, and their advantages and disadvantages, particularly as they relate to Canada.

Visit the Gowlings Madrid Portal today at:
http://www.gowlings.com/madridprotocol/

GOWLINGS NEWS

Gowlings has been named "Canadian IP Firm of the Year" for 2006 by U.K. publication Managing Intellectual Property Magazine (MIP). Gowlings is the first Canadian law firm to be awarded this honour.

The "Canadian IP Firm of the Year" is one of several newly created awards by MIP to recognize excellence in the global IP industry. MIP has for several years recognized Gowlings as a highly ranked IP firm in trade marks, copyrights and patents. The inaugural awards ceremony was held in London, England, on March 29, 2006.

"We are honoured to be the first Canadian firm to have received this recognition," said Scott Jolliffe, Gowlings National Managing Partner. "Gowlings has worked hard to establish itself as the firm of choice for IP in Canada and internationally. We are thrilled to see our efforts recognized in this way."

For the full press release see:
http://www.gowlings.com/news/index.asp?intNewsId=252
&strShowWhat=releases

Gowlings Moscow Recognized as Leading IP Practice in Russia

Gowlings Moscow and its professionals have been recognized for excellence in the practice of intellectual property throughout the Russian Federation by two U.K. publications: The Practical Law Company and Chambers and Partners.

The recently published PLC Which Lawyer? 2006 Yearbook ranks Gowlings' Moscow office as one of only two "leading" IP firms in Russia. Gowlings professionals are also singled out for their contributions to the practice. Marina Drel, head of the Firm's Moscow litigation practice, ranks as one of two "leading" IP professionals and is noted for her "particular expertise in infringement and counterfeit issues in Russia." In the "recommended" category, Vladimir Dementiev is credited with "solid patent expertise."

Chambers Global, a publication of Chambers and Partners, also ranks Gowlings Moscow among the top two leading IP firms in Russia, noting its capability as a "one-stop shop to clients – from filing right through to litigation in the general and arbitrazh courts." Patents and trade marks are considered the strongest suits of the practice, according to the guide, and Marina Drel is highlighted for her "broad experience of infringement and counterfeit issues."

For full press release see:
http://www.gowlings.com/news/index.asp?lang=0&intNewsId=261
&strShowWhat=releases

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.