Canada: Top Trademark Cases In 2017

Last Updated: January 26 2018
Article by John McKeown

There are many decided cases each year concerning trademarks. Many of the cases involve a determination of the potential for confusion between competing marks and turn on their own facts. However, there are cases that provide help to lawyers and agents and their clients in assessing their rights. 2017 produced a number of interesting cases which provide insights concerning the granting of injunctions, the impact of the Google AdWords and AdSense programs, carrying out a confusion analysis, the distinctiveness of pharmaceutical marks, showing trademark use and proving passing off. A summary of key cases follows.

  1. In Sleep Country Canada Inc. v. Sears Canada Inc.1 granted an interlocutory injunction on the basis, among others, that there was no possibility of quantifying the plaintiff's losses and that they were irreparable.
  2. In Argos Limited v. Argos Systems Inc.2 the parties used the Google AdWords and AdSense programs. At all material times under to the terms of the programs the plaintiff granted not only to Google but also to the defendant such rights as were necessary for Google and the defendant to operate Google's programs. When the plaintiff alleged infringement of its trademark the judge found that the plaintiff expressly and unequivocally consented to the defendant's use of the trademark in the defendant's domain name together with the display of the plaintiff's advertisements on the defendant's website or on the AdWords terms.
  3. In Dimock Stratton LLP v. Sharp Kabushiki Kaisha3 it was found that the registrar has a discretion to grant a request for an extension in section 45 proceedings and can request additional information if required to make a just decision. Such decisions will only be reconsidered at the hearing stage if there is been an error of law or an error in the interpretation of the facts.
  4. In Benjamin Moore & Co. Limited. v. Home Hardware Stores Limited. 4 the Federal Court of Appeal said that in an opposition where an opponent asserts that the applied for mark is confusing with a number of the opponent's marks, the confusion analysis must be undertaken on a mark to mark basis at the appropriate material date. An allegation of a "family of marks" is relevant to the analysis but does change the obligation to carry out the analysis on a mark to mark basis.
  5. In Merial LLC v. Cross Vetpharm Group Ltd.5 the Trademark Opposition Board said that if a proposed trademark for a pharmaceutical product was highly similar to the name of the active ingredient in the product formulation an ordinary consumer of the product may perceive the mark as a reference to the ingredient rather than a source identifier and lacking distinctiveness.
  6. In United Airlines, Inc. v Cooperstock6 the Federal Court found that the defendant`s criticism site provided a service to the public and defendant`s use of a mark that was confusing with the plaintiff`s mark was trademark use.
  7. In Diageo Canada Inc. v. Heaven Hill Distilleries, Inc.7 the Federal Court confirmed that in an action for passing off the plaintiff must show that the defendant has made a misrepresentation to the public leading or likely to lead the public to believe that the goods or services offered by the defendant are the goods or services of the plaintiff. Typically this element requires that the plaintiff establish confusion in the minds of the public as a likely consequence by reason of the sale, or offering for sale, by the defendant of a product not that of the plaintiff's making, under the guise or implication that it was the plaintiff's product or the equivalent. Survey evidence is admissible in such a case.
  8. In Equustek Solution Inc. v. Google Inc. 8 Google appealed to the Supreme Court of Canada. Google argued, among other arguments, that the injunction issued against it requiring the world wide removal of references to the defendant's websites was unnecessary to prevent irreparable harm, and that it was not effective. It was also argued that as a non-party, it should be immune from the injunction.

    Regarding the argument that non-parties should be immune the Court said it was well established injunctive relief can be ordered against someone who is not a party to the underlying lawsuit.9 The test for granting an interlocutory injunction in this context has not changed since injunctions may be issued in all cases in which it appears to the court to be just or convenient that the order should be made on terms and conditions the court thinks just.

    The Court referred by analogy to Norwich orders and Mareva injunctions. Norwich orders can compel non-parties to disclose information or documents in their possession required by a claimant. Norwich orders have increasingly been used in the online context by plaintiffs who allege that they are being anonymously defamed or defrauded and seek orders against Internet service providers to disclose the identity of the perpetrator. Norwich disclosure may be ordered against non-parties who are not themselves guilty of wrongdoing, but who are so involved in the wrongful acts of others that they facilitate the harm.

    Mareva injunctions are used to freeze assets to prevent their dissipation pending the conclusion of a trial or action. A Mareva injunction that requires a defendant not to dissipate his or her assets sometimes requires the assistance of a non-party, which in turn can result in an injunction against the non-party if it is just and equitable to do so.

    Much like aNorwich order or a Mareva injunction against a non-party, the interlocutory injunction granted flowed from the necessity of Google's assistance to prevent the facilitation of the defendants' ability to defy court orders and do irreparable harm to Equustek. Without the injunctive relief, Google would continue to facilitate that ongoing harm.

    The Court said that the problem was occurring online and globally. The Internet has no borders - its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates - globally.

  9. In Venngo Inc. v Concierge Connection Inc.10 the Federal Court of Appeal confirmed that in a confusion analysis one of the statutory factors to be to be considered is the `nature of the trade`. This factor is concerned with the channels of trade or the relevant consumer markets that are exploited by the parties. What is being sold, how and where it is sold, to whom it is sold and the nature of the trading environment generally should be considered.
  10. In The Stork Market Inc. v. 1736735 Ontario Inc.11 the plaintiff in an infringement action relied on a registration of a stork shaped sign used in association with services relating to the rental of signs to announce the birth of a child. The defendant who was using a similar type of sign alleged the registration was invalid on the grounds the mark was functional. The Trademarks Act deals expressly with the functionality of a distinguishing guise but it is well established that a similar concept applies to a regular trademark. If the functionality relates either to the trademark itself or to the wares this is inconsistent with registration. However, if the functionality is secondary or peripheral with no essential connection to the wares this will not be a bar to registration.

    Trademark protection is not available for a mark or get up that is "purely" functional. It does not exclude from protection a mark which displays functional features if they create no monopoly of the function.

    The Judge said that the registrations did not represent a shaping of goods or their containers or a mode of wrapping or packaging goods. In addition the plaintiffs' claims could not be characterized as an effort to assert a protection that would be the subject of a patent. As a result the judge concluded that the marks were not primarily functional.

    The judge also said that a product can have features which serve a utilitarian function and also serve the trademark function of identifying the source of the product, without invalidating the mark. While the images formed part of the plaintiffs' product and service, they also served a source-distinguishing function.

  11. In Les Marques Metro / Metro Brands S.E.N.C. v. 1161396 Ontario Inc.12 the court said that requirements for an application concerning use were twofold: (1) that the trademark application be for a trademark that has been used in Canada; and (2) that the application contain the date of first use for each of the general classes of goods or services described in the application.

    The Act is clear that only a date of first use of the mark in association with each general class of goods or services must be provided - i.e. the second requirement. However, an ambiguity remains with regards to the first requirement: does the Act's first requirement that the application be based on use of the trademark in Canada imply that all goods in the application must have been used as of the relevant date? It was found that while the Act requires that a date of first use be provided with regards to each general class of goods or services, the mark must have been used in association with each of the specific goods or services identified in the general class prior to the applicant's filing date.

  12. In Group II International Ltd. v. Travelway Group International Ltd.13 the defendant was using variants of its registered mark that were similar to the plaintiff`s registered marks (the Modified Logos) but the trial judge was not convinced they were confusing and dismissed the action. On appeal the Federal Court of Appeal said in considering whether the Modified Logos used by the defendant were separate trademarks, the applicable legal principle was that a variant is part of the registered mark if it retains the dominant features of the registered mark. In this case the defendant made a series of changes to its triangle mark, some more subtle than others, and all of which more closely resemble the plaintiff`s cross mark. However, none of the changes either separately or together take away the dominant features of the defendant`s triangle mark which is a cross on a background with a contrasting border. The omission of the "S" was not a dominant element of the marks. The court also found that the trial judge`s confusion analysis was flawed on several grounds and it was not appropriate to carry out a separate analysis concerning the Modified Logos. The analysis should take into account the defendant`s triangle mark, as registered, and the Modified Logos. When the court did this they concluded the respective marks were confusing and allowed the appeal which was predicated on expunging the defendant's registration.
  13. In Estee Lauder Cosmetics Ltd. v. Loveless14 in an appeal from a decision in section 45 proceedings additional evidence clarified that samples of the cosmetics in issue were provided to retailers during the relevant period to generate sales. Case law has established the distribution of samples will be evidence of use only if there are later sales of the goods in issue. Since Estee Lauder Cosmetics Ltd. showed that it obtained orders for the goods after the distribution of the samples this established use of the mark.

Footnotes

1. 2017 FC 148 (F.C.) following Jamieson Laboratories Ltd. v. Reckitt Benckiser LLC 2015 FCA 104 (F.C.A.)

2 [2017] EWHC 231 (U.K. Ch).

3. (2017), 145 C.P.R. (4th) 298 (T.M.O.B.).

4. 2017 FCA 53(F.C.A.) at paragraph 23.

5. (2017), 146 C.P.R. (4th) 239 (T.M.O.B.)

6. 2017 FC 616

7. Diageo Canada Inc. v. Heaven Hill Distilleries, Inc. 2017 FC 571 following Consumers Distributing Co. v Seiko, [1984] 1 SCR 5 83 at 601.

8. Google Inc. v. Equustek Solutions Inc. 2017 SCC 34

9. Google Inc. v. Equustek Solutions Inc. 2017 SCC 34

10. 2017 FCA 96, 146 C.P.R. (4th) 182.

11. 2017 FC 779.

12. 2017 FC 806.

13. 2017 FCA 215.

14. 2017 FC 927.

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.

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