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Publication

title

The State of Famous Marks in Canada

DATE

June 7, 2006

EXPERTISE

Intellectual Property, Trade-marks

On June 2, 2006, Canada's highest court, the Supreme Court of Canada, allowed the mark CLIQUOT, used in relation with women's clothing boutiques, to co-exist in the marketplace with the famous VEUVE CLICQUOT branded champagnes, and allowed the mark BARBIE'S & DESIGN to be registered over the objections of Mattel Inc., the owner of the famous BARBIE trade-mark for dolls.

The Issue

Canada has a registration system for trade-marks, which is based on wares and services: the owner of a trade-mark can obtain the exclusive right to use its trade-mark, across the country, by obtaining a trade-mark registration. In the case of a famous mark, the following questions arise: should the scope of protection afforded the trade-mark extend beyond the wares or services in relation to which it is registered? Would extending such protection negate the basis of the Canadian trade-mark registration system, which is "wares/service" based? What of those who ride on a famous trade-mark's coat-tails to sell unrelated wares or services?

Background

In 1998, the Canadian Federal Court of Appeal[1] allowed the trade-mark PINK PANTHER to be registered in association with beauty products, over the objection of United Artists Corporation, the owner of the famous PINK PANTHER mark, registered in association with motion pictures. The Court held that the difference between the parties' services was such that there was no likelihood of confusion between the two marks. In other words, a patron of the PINK PANTHER beauty parlour would be unlikely to think that the hairdressing services she received were provided by United Artists Corporation.

THE SUPREME COURT DECISIONS

In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée,[2] while recognizing the trade-mark VEUVE CLICQUOT as famous, the Supreme Court dismissed the infringement action brought by the champagne purveyor against the chain of clothing boutiques. At the heart of this decision was the difference between the parties' wares and services. In the words of the Court: "Luxury champagne and mid-priced women's wear are as different as chalk and cheese",[3] so that there would be no link between the two marks in the "somewhat hurried" consumer's mind. As a result, both the plaintiff's infringement action and its recourse for depreciation of the goodwill of its famous mark failed.
In Mattel Inc. v. 3894207 Canada Inc.,[4] the Supreme Court did not as strongly endorse the fame of the BARBIE trade-mark, even going so far as to suggest that ".the association of the BARBIE doll with food might be taken as a warning of blandness",[5] and allowed the registration of the trade-mark BARBIE'S & DESIGN on the ground that there was no likelihood of a link in the consumer's mind between the source of the well-known BARBIE products and the source of the less well-known BARBIE'S restaurants.[6]

Canadian law is therefore that fame does not, in and of itself, provide absolute protection for a trade-mark. Fame may, in some instances, result in a mark having a broader scope of protection. Fame is one factor to be considered with all other factors. However, these two decisions make it clear that the question of whether a famous mark is entitled to a broader scope of protection depends on the facts. In particular, in these two decisions the potential customers and the channels of trade were different (mid-range women's retail clothing chain versus exclusive, high priced champagne,[7] restaurants offering bar services and late hours versus girls' dolls[8]). Furthermore, evidence of actual confusion (or of a likelihood of confusion) was not adduced in either case.

HIGHLIGHTS FOR TRADE-MARK OWNERS

Recognition of the possibility of crossing product lines: The Court suggested that some famous marks, such as WALT DISNEY, may indeed transcend product line differences[9] and that, while the differences between products may be a significant obstacle, fame is capable of carrying a mark across product lines.[10]
"Famous marks do not come in one size": The Court recognized that some famous marks may have very specific product connotations and not have their reach extend beyond that product line.[11] In the words of the Court: "Buckley's cough mixture is advertised as effective despite its terrible taste, not, one would think, a brand image desirable for restaurants".[12]
Difference in wares/services is not an absolute defence: The Court has left open the possibility that different fact patterns could yield a different result. Indeed, the Court held that each situation must be judged in its full factual context and that a difference in wares or services does not deliver a knockout blow.[13] The Court confirmed that if the new mark introduces confusion into the marketplace, it should not be permitted, whether or not the wares are of the same general class.[14]
Duty on trade-mark owners to police the marketplace: The Court explicitly recognized the legal obligation incumbent upon trade-mark owners to protect their trade-marks from piracy or risk having their marks lose their distinctiveness and, potentially, their legal protection.[15]
Absence of evidence of confusion not necessarily fatal: In cases where there has been co-existence in the marketplace, while the absence of evidence of actual confusion may lead to an inference that there is no likelihood of confusion, a likelihood of confusion may nevertheless be found.[16]
Depreciation of goodwill: The Court recognized that the statutory cause of action for depreciation of goodwill provided for in section 22 of the Trade-marks Act is quite different from the cause of action for infringement. A demonstration of confusion is not required for depreciation; rather, evidence of a likelihood of depreciation¾which includes a probable association of the two marks in the consumer's mind¾must be advanced to establish the cause of action.[17] In other words, no probable link, no depreciation.

THE LESSONS TO BE LEARNED

The importance of evidence: In Veuve Clicquot, the Court noted that there was no evidence that the VEUVE CLICQUOT mark would be associated by ordinary consumers with mid-priced women's clothing.[18] On this point, the Court noted that evidence of a mere possibility of confusion, as opposed to evidence of a probability or likelihood of confusion, does not suffice.
Structuring of surveys: In Mattel Inc., the question "Do you believe that the company that makes BARBIE dolls might have anything to do with this sign or logo" was the wrong question and was also held by the Court to be directed to the mere possibility of confusion, not the likelihood or probability of confusion which was required to be established.[19] Furthermore, the Court disapproved of the fact that the survey conducted by Mattel Inc. excluded anyone who was even aware of the BARBIE'S restaurants.[20]

THE BATTLE IS NOT OVER

In spite of the results for Veuve Clicquot Ponsardin and Mattel Inc., these decisions are rather favourable for famous marks. The very fact-driven nature of these decisions leaves the door open to different outcomes, as was already the case in the Federal Court of Canada's decision earlier this year in Remo Imports Ltd. v. Jaguar Cars Ltd.[21] (where the manufacturer of the famous cars successfully enjoined the 20 year old use and expunged registrations by Remo Imports Ltd. of the mark JAGUAR in association with leather goods). In that case, the difference between the wares of the parties was overcome by the fact that leather goods were proven to be within Jaguar Cars Limited's natural zone of expansion. That decision has been appealed to the Federal Court of Appeal. The last word may not yet have been said on the subject of famous marks in Canada.

[1]. Pink Panther Beauty Corp. v. United Artists Corp. [1998] 3 FC 534 at paras. 50-51 (Federal Court of Appeal) Isaac C.J., Linden, McDonald JJ.A.

[2]. [2006] SCC 23.

[3]. Veuve Clicquot, at para. 31.

[4]. [2006] SCC 22.

[5]. Mattel Inc., at para. 79.

[6]. Mattel Inc., at paras. 6, 83.

[7]. Veuve Clicquot, at para. 24.

[8]. Mattel Inc., at paras. 11, 30.

[9]. Veuve Clicquot, at para. 32.

[10]. Mattel Inc., at para. 63, 78.

[11]. Veuve Clicquot, at para. 32.

[12]. Veuve Clicquot, at para 32.

[13]. Mattel Inc., at para. 72.

[14]. Mattel Inc., at para. 63.

[15]. Mattel Inc., at para. 26.

[16]. Mattel Inc., at para. 55.

[17]. Veuve Clicquot, at paras. 38, 46.

[18]. Veuve Clicquot, at para. 33.

[19]. Mattel Inc., at para. 44.

[20]. Mattel Inc., at para. 48.

[21]. [2006] FC 21.

The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault LLP or any member of the firm on the points of law discussed.

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