Recent Decisions February 2001
I.FEDERAL COURT DECISIONS
(a)Patents
1.Dek-Block Products v. Patio Drummond,Summary Judgment/ Patent Infringement/Reissued Patent/Alleged Agreement/Credibility
Motion for summary judgment seeking to dismiss Dek-Block's statement of claim in an action for infringement of a reissued patent. Patio Drummond claims that the reissued patent is null and void. The patent, which is for a concrete base, initially was limited by requiring a rectangular central socket. After being put on notice of Dek-Block's rights, Patio Drummond redesigned its concrete bases to include a circular central socket, Dek-Block's counsel having indicated during settlement discussions that such a socket would not infringe his client's patent. Dek-Block subsequently reissued its patent to remove the limitation to a rectangular central socket and advised Patio Drummond that the redesigned bases infringed its reissued patent.
Held: Motion dismissed. The Court considered whether a genuine issue for trial existed with respect to 2 points: whether there was a binding agreement, made before the reissue, that extends to preclude Dek-Block from bringing this action; whether the application for reissue was based on fraudulent representations. It is doubtful that an agreement exists because the alleged acceptance did not correspond substantially to the alleged counteroffer, as required by the applicable law of the Civil Code of Québec. Patio Drummond's case concerning the validity of the reissued patent is based on the assumption that the inventor lied; a finding concerning this issue of credibility must be reserved for the trial judge.
2.AB Hassle et al. v. The Minister of National Health and Welfare et al., December 15, 2000, FCTD (Tremblay-Lamer J.) Prohibition/Patented Medicines (Notice of Compliance) Regulations
Application for an order prohibiting the Minister from issuing an NOC to RhoxalPharma in respect of omeprazole tablets until after the expiry of the omeprazole patents.
Held: Application allowed. The claims in the patents are directed to pharmaceutical preparations comprising a core region containing the drug, a subcoating disposed on the core region, and an enteric coating disposed on the subcoating. RhoxalPharma asserted that the patents would not be infringed, because its tablets did not contain an inert subcoating. However, expert evidence introduced by the applicants suggested that a subcoating spontaneously forms at the time the enteric coating is applied. This evidence was given great weight, in view of the expert's qualifications, experience and consistency on cross-examination. The allegation of non-infringement in respect of the patents could not be justified on the factual and legal basis set out in the detailed statement accompanying the notice of allegation. The Court could not consider new factual and legal matters that were not set out in RhoxalPharma's detailed statement.
3.Apotex v. Zeneca Pharma et al., December 19, 2000, FCA (Strayer J.A., Linden J.A., Sexton J.A.) Setting Aside Judgment/Rule 399/Jurisdiction/Patented Medicines (Notice of Compliance) Regulations
Motion by Zeneca Pharma and Merck asking the Court of Appeal to set aside its earlier judgment because of “a matter that arose… subsequent to the making of the order…” under r. 399(2), to quash the NOC issued to Apotex and to restore a previous prohibition order. In the alternative, the moving parties sought an injunction and related orders to limit the sale of the medicine by Apotex.
Held: Motion dismissed. The scheme established by the Patented Medicines (Notice of Compliance) Regulations does not replace the private rights of action open to patentees to protect themselves against infringement. The conclusion of the Court to set aside the orders of prohibition was correct at the time it was reached. The Court had specifically recognized that future changes in facts might lead to an ordinary action for infringement. The evidence presently before the Court was not a “new matter” which would have brought about a different result at the time judgment was issued. Rule 399 cannot be used as a vehicle for revisiting judgments every time a change in facts occurs. Therefore, there is no basis for quashing the NOC nor to restore the prohibition order. As for the alternative remedies, including injunctive relief, there is no continuing jurisdiction in this matter. The Court is functus officio as regards its earlier judgment or its modification other than as authorized by the Rules such as 397 and 399.
4.Hoffmann-La Roche v. Kirin-Amgen and Janssen-Ortho, December 20, 2000, FCA (Stone J.A. Isaac J.A., Sharlow J.A.) Appeal/Patent Infringement/Invalid for Insufficiency/Section 27(3) Patent Act/Relevant Date for Construing Patent/Expert Witnesses
Appeal from a decision finding infringement of the respondent's patent for human erythropoietin. The appellant's position was that the patent is invalid for insufficiency because it does not comply with s. 27(3) of the Patent Act
Held: Appeal dismissed. The Trial Judge did not err in holding that "human urinary EPO" was sufficiently described in claim 1 and the patent; the teaching of the disclosure at p. 64 of the patent made reference to "pooled-source human urinary extract" and expert evidence at trial supported the conclusion that a person skilled in the art/science would realize that only "pooled-source" human urinary EPO would be appropriate for the comparison. It does not matter that human urinary EPO has a range of molecular weights as the patent provides for the side-by-side comparison of two substances; if the recombinant EPO being compared to the human urinary EPO runs afoul of claim 1, the patent is infringed - it does not matter how the recombinant EPO might compare to other human urinary EPO. The Trial Judge did not err in construing the patent as of the date it was issued.
The Court expressed the view that it was inappropriate for the Trial Judge to have criticized one expert witness as having been engaged in unethical conduct, but held that there was no basis on which to interfere with her assessment of the expert witnesses.
5.SmithKline Beecham Pharma et al. v. Apotex and the Minister of Health, January 4, 2001, FCA (Stone J.A., Noël J.A., Evans J.A.) Appeal/Patented Medicines (Notice of Compliance) Regulations/Notice of Allegation/ Common Law Presumption/Effect of Concession in Expert Affidavit
Appeal from a decision dismissing SmithKline's application under the Patented Medicines (Notice of Compliance) Regulations for an order prohibiting the Minister of Health from issuing an NOC to Apotex for its paroxetine hydrochloride tablets until the expiry of the patent.
Held: Appeal dismissed. The detailed statement of the legal and factual basis for the notice of allegation is intended to place the patentee in the position of deciding whether or not to oppose the issuance of an NOC. Here, the notice of allegation was sufficiently substantiated by the detailed statement. SmithKline appears to have well understood the issue raised by the detailed statement, particularly in view of the evidence that it filed in support of its application. In addition, SmithKline contended that a common law presumption operated in its favour, because Apotex had failed to disclose information about its tableting process that was within the exclusive knowledge of Apotex. There are two conditions precedent to the application of the presumption: that the required information was not adduced in evidence by Apotex, and that SmithKline did not have available other means of accessing it. The common law presumption cannot aid SmithKline, because no attempt was made to obtain this information or to compel its production. Finally, SmithKline argued that its evidentiary burden had been met by an unqualified concession in an expert affidavit introduced by Apotex. The concession in this affidavit was made by reference to experiments conducted by SmithKline's experts, which the motions judge found to be unreliable and inconclusive, and therefore nothing flowed from the concession.
(b)Trade Marks
1.Cordon Bleu International v. Renaud Cointreau, September 6, 2000, FCTD (Rouleau J.) Section 45 Appeal/Sufficiency of Evidence Appeal from a s. 45 decision expunging several registrations of the trade mark CORDON BLEU for various wares.
Held: Appeal allowed in part. Based on new evidence filed before the Court, certain of the registrations were reinstated. However, use of the mark on products consisting primarily of beef (such as meatball stew, boeuf bourguignon, meatloaf) is insufficient to maintain a registration for the wares "beef". In addition, use of the mark on a pâté that contains veal as a secondary ingredient is insufficient to maintain a registration for "veal-based pâtés" because, giving the words their usual meaning, a veal-based pâté should contain veal as its primary ingredient.
2.Lifescan and Lifescan Canada v. Novopharm, November 10, 2000, FCTD (Lemieux J.) Interlocutory Injunction/ Irreparable Harm/Delay/Standing
Application for an interlocutory injunction to restrain the use of the trade mark ONE TOUCH. Lifescan Canada is licensed by Lifescan's parent to use the parent's ONE TOUCH mark in Canada. ONE TOUCH is registered for a glucose measuring device and test strips that are used with that device. The respondent sells test strips under the mark NOVO GLUCOSE that can be used only with the ONE TOUCH device. Packaging and inserts that accompany the NOVO GLUCOSE strips state that they are for use with the ONE TOUCH device and indicate that the respondent is not the owner of the ONE TOUCH trade mark.
Held: Application dismissed. Lifescan's evidence does not clearly show that harm would result, let alone irreparable harm. The evidence of loss of brand equity and reputation were based on limited information. The loss of reputation that might arise if the respondent's product is defective cannot be accepted as more than speculation given that the respondent's product has been granted an NOC. The concern that the applicant would suffer financial damage should the respondent's strips become a low-cost alternative under the provincial formularies is both speculative and irrelevant. Whether the strips should receive low cost alternative status is a matter of provincial government fiscal and health policy which this Court cannot thwart on the basis of its impact on Lifescan's profits. The balance of convenience favours the respondent for several reasons, including the unreasonable delay in bringing on this application (the application was first made returnable on May 15, 2000, the statement of claim was filed in April 1999, and the respondent began marketing its strips at the end of the previous year). The Court declined to deny Lifescan standing in respect of the trade mark issue but noted that it might encounter serious problems later on due to the fact that it is not the registered owner of the mark, the owner is not a party to the action, and the requirements of s. 50 might not be satisfied.
3.Maple Leaf Meats v. Consorzio Del Prosciutto Di Parma, November 28, 2000, FCTD (O'Keefe J.) Challenges to Published Official Marks
Maple Leaf Meats appealed the decision of the Registrar to publish notice of the adoption and use of PARMA & Design as an official mark by Consorzio Del Prosciutto Di Parma (a consortium of approximately 210 Italian ham producers from the province of Parma in Italy). Maple Leaf Meats owned a registration for PARMA for various food products including ham, which was first used in the 1960s, and this registration blocked the consortium's attempt to register PARMA & Design as a certification mark in Canada. The evidence showed that PARMA HAM in Italy was reserved for ham meeting strict quality controls and production standards set by the consortium. Maple Leaf Meats argued that the consortium was not a “public authority” and that the PARMA & Design mark had not been “adopted or used” by the consortium since it appeared on the wares of third parties. In terms of relief, Maple Leaf Meats sought a declaration that the consortium was not a public authority and that the public notice was void and of no force or effect. Maple Leaf Meats also asked the Court to order the Registrar to publish a retraction of the public notice and that a copy of the Court's judgment be annexed to the records of the Trade-mark Office.
Held: The appellant did not have standing to pursue an appeal under s. 56(1) of the Trade-marks Act as it was not a party to the proceeding before the Registrar. However, this was not the end of the matter since at the hearing Maple Leaf Meats (without admitting that it did not have a right of appeal) asked O'Keefe J. to convert its appeal into an application for judicial review should he find that no right of appeal existed. Although O'Keefe J. denied this request, he stated that his decision with respect to the unavailability of an appeal did not serve to bar Maple Leaf Meats from making an application for an extension of time to file a judicial review application or to make a motion to convert its appeal to a judicial review. O'Keefe J. opined this was only fair, since Maple Leaf Meats had raised the issue of judicial review and conversion at the hearing before him. Because of his disposition of the appeal, it was not necessary for O'Keefe J. to deal with the other issues raised in the Notice of Appeal.
4.Hotels Confortel v. Choice Hotels International, December 7, 2000, FCA (Létourneau, J.A., Dé cary, J.A., Noël, J.A.) Opposition Appeal/Evidence not before Registrar/Survey Evidence
Appeal from Trial Division's decision to reverse Opposition Board decision to allow registration of opposed mark CONFORTEL. The opponent had not filed any evidence before the Opposition Board. The Board had reached its decision, based upon a grammatical and phonetic analysis of the competing marks, that the burden to show a reasonable likelihood of confusion had not been met. The opponent provided significant and substantial evidence before the Trial Division, notably that the suffix “TEL” commonly indicated hotel services and that no one save the opponent used the word “COMFORT” as part of their trade mark in the hotel services industry. Part of this evidence included a survey.
Held: Appeal dismissed. Based on the new evidence, the Trial Judge could have concluded that the probability of confusion between the two marks had been properly established. The survey evidence presented did not meet the minimum standards of reliability as set out in the book Trial by Survey: Survey Evidence and the Law by R. Corbin, R.S. Jolliffe and A.K. Gill. Consequently, it had no probative value and should not have been considered by the Trial Judge in his decision. Nevertheless, this was a moot point since a reading of the decision of the Trial Judge indicated that the survey evidence was used simply to reinforce a conclusion arrived at by other means and that his decision would have been the same even in the absence of the survey.
5.Canada Post v. Paxton Developments, December 8, 2000, FCTD (Pelletier J.) Opposition Appeal/Confusion/ Survey Evidence/Average Consumer
Appeal of decision that rejected the appellant's opposition to an application to register VIDEO MAIL for telecommunications services. The Registrar held that the average consumer would be more likely to associate VIDEO MAIL with “voice mail” or “e-mail” than with the opponent's marks FAXMAIL, LASERMAIL and ADMAIL. On appeal, Canada Post filed survey evidence concerning the reaction of consumers to the VIDEO MAIL mark. The respondent did not participate in the appeal but advised the Court that it maintained the validity of its registration.
Held: Appeal allowed. To the extent that the Opposition Board based its conclusions upon its assessment of what the “average” consumer might think, it erred; the average consumer is misled if the majority of consumers is misled but the Act does not require a majority of consumers to be misled to support a finding of confusion. Confusion may be found if a substantial number of consumers are misled, i.e. more than enough to pass any de minimis threshold but less than a majority. The survey evidence showed that 9% of consumers thought that Canada Post was the likely provider of VIDEO MAIL telecommunication services. Higher percentages thought that the provider was either Rogers or a telephone company. The Court posed the question of whether the determination of a “substantial number of consumers” is affected by the finding that a larger group of consumers incorrectly identifies some other company as the source and concluded that it did not; a proportion is no less significant because the same proportion is achieved by others. The Registrar therefore erred in finding that the respondent's mark was not suggestive of the appellant's services but rather of services such as voice mail or e-mail.
6.Rolls-Royce et al. v. Ian D. Fitzwilliams et al., December 11, 2000, FCTD (Blanchard J.) Amendment of Statement of Claim/Interlocutory Injunction/Irreparable Harm
Motion to amend statement of claim and for interlocutory relief. An injunction exists prohibiting the defendant from communicating with any parties in respect of his assertions of intellectual property rights in the ROLLS-ROYCE name but Mr. Fitzwilliams has commenced a new campaign of correspondence and threatened legal proceedings with the plaintiffs and third parties.
Held: Motion allowed. The requirements for amending the statement of claim have been met and no prejudice will be suffered by the defendant as a result of the amendment. The letters sent by the defendant will cause irreparable harm to the plaintiff's brand. Where a threatening tone has been used, the letters can damage valuable business relationships. Where the tone was not threatening, the assertions made may have been inconsistent with the desires of the owners and therefore caused harm that is not reparable after the fact.
7.Eli Lilly and Eli Lilly Canada v. Novopharm, December 19, 2000, FCA (Desjardins J.A., Sexton J.A., Sharlow J.A.) Appeal/Passing Off/Section 7(b)/Trade Dress of Pharmaceutical Products/Likelihood of Confusion/Relevant Universe/ Section 50
Appellants seek to reverse the judgment that dismissed their claims that the respondent had passed off their generic fluoxetine hydrochloride capsules as the appellant's PROZAC brand capsules, contrary to s. 7(b) of the Trade-marks Act. The Trial Judge found that the appellants had not proven that the size, shape and colour of their PROZAC brand capsules had acquired a secondary meaning, that there was no likelihood of confusion, and that there were no valid licences concerning the use of the size, shape and colour of the PROZAC capsules as a trade mark. The key issues on appeal were whether the Trial Judge correctly applied the decision in Ciba-Geigy Canada Ltd. v. Apotex Inc. [1992] 3 S.C.R. 120, 44 C.P.R. (3d) 289 (F.C.T.D.) and the rules of passing off and whether she erred in her appreciation of the licensing arrangement between the appellants.
Held: Appeal dismissed. The Ciba-Geigy decision stands for 2 propositions: the target clientele or the relevant universe in the pharmaceutical field includes the patient (although it was unclear if the Court meant a patient to be anyone who has an actual or potential, immediate or remote, connection with the product or just someone who has been given a prescription for the product); and the general rules in a passing off action apply to the prescription drug market without any difference or exception. Ciba-Geigy does not stand for the proposition that pharmaceutical manufacturers cannot adopt the trade dress of capsules already found in the market, but that they cannot do so if the prescription drug has acquired distinctiveness and the copying is likely to lead to confusion. The appearance of a prescription drug does not in every case constitute a trade mark right.
Whether the relevant universe was a narrow one, as submitted by the appellants, or a larger one, including potential patients, makes no difference here as the Trial Judge arrived at the same conclusion with regard to each of the survey groups. The Trial Judge's finding that many consumers will associate the capsule's appearance with the character of the medicine and not its trade source does not warrant intervention.
The Trial Judge correctly directed herself to the question of whether the evidence established that there was a likelihood of confusion that surpassed the de minimus standard; her use of the words "no significant likelihood of confusion" does not mean that she did not apply the proper legal test.
Obiter: The direction to use the trade dress given by Lilly to Lilly Canada and the element of control retained by Lilly which was explicit in a 1991 agreement was sufficient to trigger the retroactive effect of s. 50; it does not matter that the 1991 agreement did not grant a right with respect to the shape, size and colour of the capsule.
8.Island Oasis Canada v. Island Oasis Frozen Cocktail, December 21, 2000, FCA (Létourneau, J.A., Décary, J.A., Noël, J.A.) Interlocutory Injunction/Confusion with Uncontested Registered Mark/Irreparable Harm/Costs
Appeal of decision refusing to grant an interlocutory injunction. The appellant claimed that the Trial Judge had erred in not finding irreparable harm where their uncontested registered mark was being infringed. The appellant also claimed that the Trial Judge had erred in awarding costs on the grounds that it was a frivolous motion.
Held: Appeal denied as to interlocutory injunction and granted as to costs. Proof of irreparable harm sufficient to grant an interlocutory injunction requires clear and non-speculative evidence. The fact that a registration is uncontested does not mean that a mere claim of confusion with this registered mark leads to irreparable harm; to so find would require an injunction any time that the owner of a registered trade mark asked for one.
Costs in an interlocutory injunction motion should generally follow the outcome of the main case, unless the judge is convinced that the motion should not have been brought. The appellant's claim of irreparable harm was not absurd or frivolous. Considering the uncertainty as to the legal question presented and the short duration of the oral hearing, the Trial Judge erred in awarding costs. The Trial Judge also erred in finding delay as a pertinent factor in assessing costs in this action since she seemed to have ignored the relevant factor that the appellant only felt a probability of irreparable harm when the respondents penetrated the Québec market, the primary market of the appellant.
(c)Copyright
1.Nell Wing et al. v. Ellie Van Velthuizen, November 20, 2000, FCTD (Nadon J.) Copyright Infringement/Inheriting Copyright/Statutory Damages
Application for: a declaration that the applicant owns the copyright in "The Diary of Two Motorcycle Hobos" and that the respondent has infringed such copyright; delivery up of all infringing copies in the respondent's control; rectification of the Register of Copyrights by expungement of the respondent's registration; an injunction restraining the respondent from infringing the copyright; and statutory and punitive damages. The author of the diary registered it as an unpublished work on the U.S. copyright register. Nell Wing inherited the copyright. The respondent came into possession of a copy of the diary and published it and registered the copyright in Canada.
Held: All remedies granted. Although the respondent's actions were based on a complete misunderstanding of copyright law, the respondent has clearly infringed the applicant's copyright. Ignorance of the law is not a defence. Since the respondent's publication of the work was without the owner's consent, the work remains an unpublished work for the purposes of the Copyright Act and so the term of copyright protection is 50 years following the year of the author's death. Copyright can pass under a will to residuary legatees even if the will makes no express mention of copyright. Statutory damages awarded pursuant to s. 38.1 of the Act because the respondent's conduct was reprehensible once she received notice of her infringement and refused to cease infringing.
(d) Practice
1.Bell Canada v. U S West et al., and Sonigem Products v. U.S. West et al., June 16, 2000, FCTD (Morneau P.) Third Party Claim Against Co-Defendants/Section 8 of the Trade-marks Act/Warranty of Lawful Use
Motion by defendant Sonigem Products under r. 194(a) to commence a third party claim against the other two defendants listed with it in the principal action, which concerned the infringement by the defendants of a group of trade marks owned by the principal plaintiff Bell Canada. Remedy sought was based on s. 8 of the Trade-marks Act, and the transfer to Sonigem of ownership in telephones bearing the US West mark for distribution in Canada to its customers. Only one of the two other defendants challenged the leave sought, but did not enter any evidence to cast doubt on the transfer.
Held: Motion granted nunc pro tunc. The fact that Sonigem was seeking damages pursuant to s. 8 for loss of revenue and profit not made as a result of sales which it could not make did not alter the propriety of granting Sonigem the leave it was seeking. First, the damages Sonigem claimed under s. 8 also covered injury to its reputation and goodwill. Second, it is at the time of transfer that s. 8 imposes a statutory warranty that the mark “has been and may be lawfully used”. The fact that the property transferred may not have been ultimately sold by the beneficiary of the warranty to its retail customers did not in any way prevent the warranty from applying against the warrantor. Third, there was no basis in the evidence for concluding that Sonigem's action against the defendants was primarily a matter of contract, thereby divesting the Court of any jurisdiction over the subject matter of the joinder. Deadline for service and filing of the defendants' defences was to run from date of the order.
2.Ciba Geigy Canada v. Novopharm, November 10, 2000, FCTD (Giles A.S.P.) Amendment of Style of Cause due to Amalgamation
The plaintiff amalgamated with other companies into a continuing company and the continuing company changed its name. The parties disputed how the plaintiff should be identified in the amended style of cause.
Held: It was incorrect to state that the continuing company was formerly known as the original plaintiff. The continuing company was formerly not known, or if known was known by the names of each of its constituent parties, not any one of them. The statute under which the company existed and the cases vested the continuing company with the assets and liabilities of the predecessor companies. There was no need to refer to precursors of the plaintiff in the style of cause.
3.Danica Imports v. Stor-Tex Importers, November 10, 2000, FCTD (Giles A.S.P.) Specially Managed Proceeding/ Geographic Distance between Parties' Solicitors
Motion by defendant seeking an order that the proceeding be specially managed. The parties' solicitors were in Toronto and Vancouver, and the defendant submitted that this added to the expense and time taken with motions. Defendant was of the view that only by arranging for special management could the defendant become entitled to have motions by teleconference. Plaintiff opposed the motion and submitted that there must be special reasons to upset the schedule of steps provided in the Rules by ordering special management.
Held: There was no reason to order the proceeding specially managed, although a further motion could be brought if a lack of co-operation developed. A specially managing judge or prothonotary has no greater need nor ability to extend time than a non-managing judge or prothonotary if properly moved (save of course that a non-case managing prothonotary cannot change a time limit set by a non-case managing judge). Similarly, a case management judge or prothonotary has no greater facility to hear a motion by conference call.
4.Merck & Co. et al. v. Apotex, November 10, 2000, FCTD (Morneau P.) Motion to File "Amended Amended" Statement of Defence and Counterclaim
Motion under r. 75 for leave to file an “amended amended” statement of defence and counterclaim (the amended defence).
Held: Motion granted. The general principles set out in Canderel Ltd. v. Canada (1993), [1994] 1 F.C. 3 (C.A.) and Raymond Cardinal et al. v. Her Majesty the Queen, unreported, F.C.A. January 31, 1994 were paramount in determining the motion. It could not be said that the motion was such as would prevent a speedy resolution of the case, nor that the amendments requested would significantly broaden the litigation between the parties. Overall, the amendments requested could not be seen as resulting in prejudice that would not be compensable or as being purely a delay tactic. At time motion brought, the case had not even reached the stage of examinations for discovery, although the initial statement of claim was dated December 31, 1996. Since that time, the plaintiff's statement of claim had been amended four times, the last time in August 2000, and those amendments were not purely cosmetic in nature. The parties had recently (in June) exchanged affidavits of documents, and the plaintiff had sent some documents to the defendant in September. Moreover, the parties and especially the plaintiffs had brought numerous motions. It could also not be seriously argued that the amendments were an attempt to complicate or cloud the issues, since the statement of claim already attacked the patent claims at issue in the amendments. Also, various proceedings between the parties over the last several years could not be relied upon by the plaintiffs to argue that the defendant should have been aware of, and added, certain grounds of defence long before. Delay in asserting a ground of defence is not in itself fatal, and the plaintiffs had not proved that such grounds would cause them prejudice that would not be compensable in damages. In any event, in view of the other proceedings between the parties, the plaintiffs could not claim to be surprised by the inclusion of these grounds of attack. Finally, a review of the different categories of amendments showed that it was clear and obvious that the purpose of the amendments was to determine the real questions in controversy between the parties: in this case, the possible grounds of invalidity with respect to the patent at issue. In keeping with the general rule in Canderel, the defendant bore the costs of the motion.
5. Wal-mart Stores and Wal-mart Canada v. Crazy Lee's et al., December 4, 2000, FCTD (Giles A.S.P.) Claims for Damages to Goodwill/Better Affidavit of Documents
Defendant sought a better affidavit of documents in connection with the plaintiffs' claim for damages to its goodwill. The plaintiff had filed various affidavits, which were used, in a successful motion for summary judgment that mentioned sales and advertising figures. The plaintiffs had not listed the documents that enabled the affiants to swear to their various quantitative statements.
Held: Motion granted. Although there have been cases where damages were awarded for diminution of goodwill when no comparative figures showed such diminution, the plaintiffs had stated that they intended to rely on the affidavits which showed quantities in fairly precise amounts (so precise that it was doubted that they came from memory). If the affidavits were relevant, so might be the documents showing the quantities sworn to by the affiants. The listing of the affidavits does not prove the relevance of them or their content. The plaintiffs were given 15 days to comply, although if the figures were audited figures, nothing behind the audited figures needed to be produced at this stage. Costs for the preparation of documents for this motion to the defendants in any event of the reference.
6. Almecon Industries v. Anchorteck, December 6, 2000, FCTD (Blanchard J.) Supplementary Affidavits of Documents/ Threshold for Waiver of Privilege/Settlement Agreements between the Plaintiff and Third Parties
The defendant brought a motion under r. 227 for an order compelling the plaintiff to serve and file an accurate and complete supplementary affidavit of documents. The defendant's motion specifically requested draft versions of settlement agreements between the plaintiff and two third parties, and related correspondence or other communications. The defendant argued that the documents were directly relevant to its allegation that the plaintiff had made misleading statements contrary to s. 7(a) of the Trade-marks Act and its claim for punitive damages, and that the privilege rule applicable to settlement negotiations was not applicable. The defendant also argued that the plaintiff had relied on false and misleading allegations that the defendant's plug infringed the plaintiff's patent, and the threat of a legal action with respect thereto, to secure an unlawful and improper agreement from one of the third parties. The defendant also argued that such conduct harmed the defendant's sales of non-impugned plugs. The defendant argued that it needed to see all draft versions of the settlement agreement between the plaintiff and one of the third parties in order to prove such allegations.
Held: Motion denied with costs in the cause. Privilege applies to protect documents given and prepared by parties in negotiations leading to settlement, but does not extend to situations where parties advance their interests at the expense of another, nor to shield evidence of misrepresentation or of dishonest dealing. The threshold to be met in order for privilege to be waived is shown in Bertram v. Canada (1995), 191 N.R. 218 (C.A.). Here, there was no evidence to suggest that the plaintiff, at the time of the settlement negotiations, had anything but an honest belief that there was patent infringement; as such, the settlement was not based upon a misleading statement but was based on two parties conducting hard negotiations and coming to a mutually acceptable settlement agreement. The defendant had not made a prima facie case that would permit the Court to allow an exception to the claim for privilege.>
Note: the plaintiff brought a similar motion for a supplementary affidavit of documents (on the same day) but under rules 222, 223 and 225-9. The plaintiff's motion requested certain documents relating to the defendant's sales of the “non-impugned” plugs before and after one of the plaintiff's third party settlement agreements. The defendant's counsel had advised the plaintiff that it would provide such documentation in the possession of the plaintiff. Accordingly, the plaintiff's motion was granted. No costs awarded.
7.Mamar v. Results Marketing, December 11, 2000, FCTD (Pinard J.) Contempt of Court/Effect of Settlement of Underlining Action
Motion requiring the defendant to show cause as to why it should not be held in contempt. Action underlining the Contempt Application had been settled, and the parties indicated that they wanted to see the Contempt Application withdrawn and terminated.
Held: The settlement of the conflict between the parties is far from sufficient reason to justify the Court exercising its discretion to terminate contempt of court proceedings. The decision in Canada Post Corporation v. C.U.P.W., T-1944-87, March 30, 1988 (FCTD) was cited. Motion adjourned pro forma at the Vancouver sitting of the Court on January 22, 2001, in order to allow counsel for the plaintiff to serve and file a Notice of Motion, made returnable in the same city and on the same date, to have this Court exercise its discretion to terminate the contempt of court proceedings in this matter.
8.Contour Optik v. Hakim Optical Laboratory, December 13, 2000, FCTD (Lemieux J.) Additional Security for Costs/Appeals - Discretion de Novo/Solicitor-Client and Party-and-Party Costs
The plaintiff (a corporation incorporated outside of Canada) appealed an order of Giles A.S.P., which granted the defendant's motion for additional security for costs until the end of discoveries from $5,000 to $27,000 including GST and PST and the amount of $1,000 for the motion before him as costs to the defendant. The action was for infringement of a Canadian patent relating to magnetic clip-on sunglasses. The Senior Associate Prothonotary had before him an affidavit sworn by a senior partner of the firm representing the defendant, to which was appended a draft bill of costs estimating until the end of discoveries the costs likely to be taxed if successful at trial. The affiant had not been cross-examined. The plaintiff argued that the costs were clearly excessive, unreasonable, speculative and contrary to the amount of costs established by the jurisprudence of this Court in patent infringement cases involving straightforward mechanical patents. The difficulty in the appeal was that it was not clear why the amount requested by the defendant had been cut back by the Prothonotary by $11,000.
Held: Appeal dismissed. Citing the FCA decision in Canada v. Acqua-Gem Investments Ltd., [1993] 2 F.C. 425, Lemieux J. held that the Court could not exercise a discretion de novo, since the question of increased security for costs was not a question vital to the final issue of the case. The facts did not support the conclusion that the Senior Associate Prothonotary's order was clearly wrong because he exercised his discretion based on an error of law in applying a wrong principle or he misapprehended the facts. The cases relied upon by the defendant were of limited assistance, since they were decided before the changes to the Federal Court Rules in 1998, and a distinction can be drawn between patent infringement and patent impeachment. The plaintiff's request for costs on a solicitor-client basis was denied, since the conduct of the defendant had not been reprehensible, scandalous or outrageous [citing Young v. Young, [1993] 4 S.C.R. 3]. Similarly, the defendant's request for costs on a party-and-party basis payable forthwith under r. 401(2) was also denied, since the defendant's appeal was not frivolous, vexation or abusive. Costs were awarded at $1500.
9.Dupont Canada v. Emballage St-Jean, December 13, 2000, FCA (Richard, J.A., Chief Justice) Privilege/Test Results/Specific Questions Directed to Specific Allegations of Fact
Appeal from the Order of the Motions Judge dismissing an appeal of a part of an Order of the Prothonotary which required the plaintiff to answer certain questions on discovery. The action was for infringement of a Canadian patent relating generally to pouches that are filled with flowable material such as milk and, in particular, to the film from which such pouches are made. The questions at issue related to the plaintiff's knowledge of certain characteristics (composition and density) of the defendant's film. The plaintiff had objected on the basis of privilege. In preparation for and during the conduct of this litigation, the plaintiff's inhouse lawyer had requested that technical tests and experiments be done on the defendant's film to assist her and the plaintiff's outside counsel in determining whether it infringed the plaintiff's patent. The Prothonotary had ordered the plaintiff to answer these questions, and the Motions Judge had dismissed its appeal with costs.
Held: Appeal dismissed with costs. Citing the decision in Susan Hosiery v. Minister of National Revenue [1969] 2 Ex. C.R. 27, the FCA held that neither litigation privilege nor solicitor-client privilege afforded a privilege against the discovery of facts that are or may be relevant to the determination of facts in issue. The more recent decision of the Nova Scotia CA in Global Petroleum v. CBI Industries et al. (1998), 172 NSR [2d] 326 was cited for the principle that privilege could not be used to protect facts from disclosure if those facts were relied on by a party in support of its case, even if such facts were discovered through a solicitor or as the result of a solicitor's direction. The FCA distinguished four decisions of the FCTD which supported the position that test results are protected by privilege. The basis for the distinction was that the defendant had not asked a question directed generally to test results nor sought the production of a document containing such test results; rather, the defendant asked a specific question directed to a specific allegation of fact relied upon by the plaintiff in its statement of claim.
10.Jonathan Boutique pour Hommes v. Jay-Gur International, December 20, 2000, FCTD (Blanchard J.) Conflict of Interest/ Removal of Solicitors of Record/Effect of Delay on Damages
Motion to remove Speigel Sohmer as solicitors of record for the plaintiff. The president of the defendant had met with a lawyer from Speigel Sohmer in 1996. The defendant retained the services of this lawyer to handle some tax planning regarding the company, and other estate issues, but only after the lawyer assured him that a trade mark infringement suit launched against the defendant company by Speigel Sohmer on behalf of the present plaintiff would be transferred to another firm. The litigation file was transferred, and until the summer of 1997 the lawyer from Speigel Sohmer acted as counsel to the defendant. In the exercise of his mandate, the lawyer received confidential information about the defendant's expenses, sales figures, taxation structure, and business strategies, and attended at least one meeting where the agenda listed sales figures, customers lists and business strategies with respect to the product line featuring the trade mark at issue in the litigation. In 1998, the firm to which the litigation file had been transferred developed a conflict of interest, and in 1999, at the request of the plaintiff, a new lawyer with Speigel Sohmer took over the case. The defendant delayed 18 months before bringing this motion.
Held: The firm was in a conflict of interest and ought to be removed as solicitors of record for the plaintiff. The test, established by the SCC in Macdonald Estates v. Martin, [1990] 3 SCR 1235 was twofold: did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand, and if so, was there a risk that it will be used to the prejudice of the client? The burden lay with the plaintiff's counsel. With respect to the second issue, the SCC had accepted that a strong inference should be drawn that lawyers who work together share confidences. Here, no formal segregation of the file was implemented, and so Blanchard J. was not convinced that all reasonable measures were taken by the “tainted” lawyer or his firm to ensure that no disclosure would be made. As for the defendant's delay, the delay could not cure the conflict of interest. However, the delay was relevant in that the plaintiff would likely incur additional expense in retaining and instructing new counsel. The defendant was ordered to pay the plaintiff forthwith after taxation its solicitor-client costs incurred from the date the plaintiff filed its notice of change of solicitors to the date on which the present motion was filed. The plaintiff was granted 30 days to retain new solicitors and for their new solicitors to review the file. The timetable for the continued conduct of the action was revised accordingly.
11.Viacom Ha! et al. v. Jane Doe et al., December 20, 2000, FCTD (Pelletier J.) Default Judgment/Nominal Damages - Individual Liability, or Joint and Several
Motion for default judgment against three defendants, a Québec numbered company, and two individuals. The amount claimed by way of damages was $6,000 per defendant, which implied that the plaintiff's view was that the defendants were individually infringing the plaintiff's intellectual properties in a retail business. All three defendants were served at the same location on the same day. One of the individual defendants claimed to be half owner of the corporate defendant. The affidavit material was silent as to the status of the other individual defendant. The issuance of the review order established on a prima facie basis that counterfeit goods were being offered for sale from the premises. The defendants did not defend, and as a result could be taken to have admitted their involvement in the infringement. The conventional measure of nominal damages for the sale of counterfeit goods of the nature in question here from fixed retail premises is $6,000. The question was whether that amount was payable by each of the defendants, or whether it should be payable by them jointly and severally.
Held: Judgment to issue against the defendants jointly and severally. In circumstances of cases where a number of persons are found to be engaged in a business which is selling counterfeit goods, and where it is not possible to distinguish the individual contribution to the harm caused, and in the absence of any exculpatory plea on the part of any of them, it did not seem unfair to assess liability on a joint and several basis. In any event, it seemed fairer than finding each defendant individually liable for the full amount of the conventional award for nominal damages, when it appeared that there was only one undertaking or business which was causing the damage.
II. OTHER COURT DECISIONS
1. Airline Seat Co. (c.o.b.a. Canadian Affair) et al. v. 1396804 Ontario et al., July 10, 2000, OSCJ (Mesbur J.) Passing Off/Domain Names/Striking Pleadings
Motion by defendants to strike an action for damages for defamation and passing off because the claims disclose no cause of action. The plaintiff owns the website www.canadian-affair.com. The defendants, competitors of the plaintiff, have obtained the domain name www.canadianaffair.com and have published allegedly defamatory words on such website.
Held: Motion dismissed. The claim for passing off should not be struck. The plaintiffs have pleaded the existence of goodwill, actual or potential damage, and misrepresentation and deception. While the claim may be close to nothing more than a pleading of a conclusion of law, and may hint at being defamation dressed up as passing off, the Court could not find it plain and obvious, or beyond doubt, that the claim for passing off discloses no reasonable cause of action.
2.Upper Beach Village v. Upper Beach Village Estates, November 10, 2000, OSCJ (Swinton J.) Interlocutory Injunction/Irreparable Harm/Passing Off
Motion for an interlocutory injunction to restrain the respondent from using the name "Upper Beach" in conjunction with its real estate development project. The applicant has sold houses under the name Upper Beach Village for over two years. The respondent began selling houses in the same geographic area under the name Upper Beach Village, but changed its name to Upper Beach Estates after the litigation was begun. The respondent still distributes some of its old materials bearing the name Upper Beach Village. The applicant bases its action on the tort of passing off.
Held: Injunction denied but respondent ordered to cease distributing old materials bearing name Upper Beach Village within 30 days. The term UPPER BEACH has a geographical significance. There is no evidence that any potential home purchaser has been confused by the operation of the two companies. The word ESTATE versus VILLAGE serves to distinguish them, as does the differences in their logos, the price and styles of their homes, and their marketing techniques. A strong case of passing off has therefore not been shown. In addition, irreparable harm has not been shown. There is no evidence of harm resulting from confusion among traders or purchasers about the applicant's and respondent's businesses. If anything, the applicant may benefit from the respondent's marketing activities, which bring potential buyers to the geographical area.
3.C.I. Covington Fund v. Jeffrey A. White et al., December 1, 2000, OSCJ (Swinton J.) Oppression Remedy/Ownership of Intellectual Property/Constructive Trust/ Fiduciary Obligation/Due Diligence
Application by Covington, as a creditor and shareholder of the corporate respondent Delta, for an oppression remedy against the respondents pursuant to s. 248 of the OBCA. The application arises following the bankruptcy of Delta and the claim by Jeffrey White, president and controlling shareholder of Delta, that certain intellectual property belongs to him personally, rather than to the corporation. White developed the inventions while he was an employee of Delta and patent applications were filed in his name.
Held: Delta is the beneficial owner of the technology and related patents and patent applications and these patents and patent applications are to be assigned to it. The oppression remedy protects the reasonable expectations of corporate stakeholders. Investors and lenders should be able to rely reasonably on public statements of a corporation made in various legal and corporate documents. Many references in the Business Plan and the financial statements suggested that Delta owned the technology. Although White is the principal shareholder and director of a small, closely held company, there is no dispute that his role in the company was to develop the technology. He chose to use the corporation to solicit funding and to use that funding to develop the technology, but having done that, he sought to keep for himself personally the benefit of that corporate investment in the technology despite his duty of good faith to the corporation. Given the representations about ownership that led Covington to invest in the company, the fact that White's principal employment obligation was research and development with respect to the technology, and White's use of the corporation's resources to develop the technology, Delta should properly be regarded as the owner of the patents and patent applications. In view of White's fiduciary obligations to the company, this is a case where a constructive trust is the necessary remedy to protect the corporation's proprietary right and to provide a remedy to the applicant for the oppressive conduct.
Counsel for the respondents argued that the applicant could have easily determined that White held the patent applications in his name. Whether or not an opinion from legal counsel for Covington on the ownership of the intellectual property should have been obtained is not the issue here. This is not a case of professional negligence, nor of negligent misrepresentation in tort involving non-contracting parties, where reasonableness of reliance would be an issue.
4.Seaward Kayaks v. Klaas Ree, December 15, 2000 BCSC (Shabbits J.) Interlocutory Injunction/Copyright Infringement/ Confidential Information
Application for an interlocutory injunction to restrain the defendant from using its trade secrets, and from infringing its copyright by manufacturing the "SmartRudder". The defendant, the father of the president of the plaintiff, was employed by the plaintiff for a short period of time. The defendant denies that his position as the plaintiff's employee made him a fiduciary. The plaintiff did not have the defendant sign the standard confidentiality agreement that all other employees had to sign because of the father-son relationship. The defendant submits that since the plaintiff has produced more than 50 rudders, it is not an infringement of The Copyright Act for him to reproduce the design of the plaintiff's rudder.
Held: Injunction granted. The question of whether the defendant obtained information in a way that makes it tortious for him to use that information for his own gain after his employment with the plaintiff ended, is a serious and fair question to be tried. The plaintiff's potential losses if the injunction is not granted amount to irreparable harm. If an injunction is not granted, and the plaintiff then succeeds at trial, it may not be able to reestablish its market presence. The plaintiff has undertaken to compensate the defendant in damages for loss he sustains because of the interlocutory injunction, if the defendant succeeds at trial. In the event that the defendant succeeds at trial, he will be able to recommence his manufacturing business, starting from virtually the same market presence that he now has since his business is only several months old. The overwhelming balance of convenience favours the plaintiff. The defendant's argument that the plaintiff may no longer claim copyright protection, having failed to obtain protection under the Industrial Design Act, may prevail at trial. However, the plaintiff's allegation that the defendant wrongfully used the plaintiff's confidential information, and that he breached the confidentiality required by the terms of his employment, cannot be lightly cast aside.
5. Free World Trust v. Électro Santé et al., December 15, 2000, SCC (Binnie J.) Patent Infringement/Purposive Claims Construction/Anticipation
Patent infringement case. Appeal from finding of non-infringement. Primary issue on appeal to the SCC was the extent to which a patent monopoly protects the substance or the spirit of an invention vs. what is literally described in the written claims. A secondary issue was anticipation as the basis for an invalidity defence. The appellant owned two patents, both of which related to an apparatus that bombarded different parts of the human body with low frequency electro-magnetic waves, with the amplitude and frequency of the waves being controlled by “circuit means”. The respondent had developed and marketed an apparatus which achieved similar therapeutic purposes, but employed different technology (it used a “micro-controller” instead of “circuit means”). The appellant acknowledged the difference, but argued that the end result was the same and therefore that its monopoly was infringed. The respondent denied infringement, and argued that all the essential elements of appellant's inventions had been disclosed in a publication, which predated the patent application by 4 years. (The appellant had actually cited this article as prior art in the specification of the patent.
Held: Appeal dismissed. Regarding the first issue, the SCC adopted the purposive construction applied by the House of Lords in Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 183), and the F.C.A. in O'Hara Manufacturing Ltd. v. Eli Lilly & Co. (1989), 26 C.P.R. (3d) 1. The SCC stressed that this approach was not only fair to the patentee, but also provided predictability to competitors. The SCC opined that the purposive interpretation adheres to the language of the claims, and requires the court to identify particular descriptive words or phrases in the claims that describe the “essential” elements of the invention. There is no infringement if an essential element is different or omitted, but there may be infringement if non-essential elements are substituted or omitted. The SCC held that the identification of elements as essential or non-essential must be made:
(1) on the basis of the common knowledge of a worker skilled in the art to which the patent relates;
(2) as of the date the patent is published (under current provisions of the Patent Act, this is the date on which the patent is “laid open”);
(3) having regard to whether or not it was obvious to the skilled reader at the time the patent was published that a variant of a particular element would not make a difference to the way in which the invention worked (this factor was addressed more particularly in the Whirlpool v. Camco decision released concurrently and discussed below); or
(4) according to the intent of the inventor, expressed or inferred from the claims, that a particular element was essential irrespective of its practical effect;
(5) without, however, resorting to extrinsic evidence of the inventor's intention (the SCC expressly rejected the intervener's contention that the prosecution file history - e.g. the negotiations over the wording of the claims leading up to the issuance of the patent - should be admitted for the purpose of proving the patentee's intent).
Applying the purposive test, the SCC held that there had been no infringement in the case at bar. The SCC found that the ingenuity of the patent lay not in the identification of a desirable result but rather in teaching one particular means to achieve it. The use of “circuit means” was found to be an essential element (in fact the “core” of the invention). The SCC concluded that since the respondent used a “microcontroller”, the respondent's apparatus performed the same function, but in very different way.
Regarding the second issue, the SCC defined the test for anticipation as follows: one must be able to look at a single prior publication and find in it all the information which, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill; in other words, the prior publication must contain so clear a direction that a skilled person reading and following it would in every case and without possibility of error be led to the claimed invention. Applying the test to the case at hand, the SCC found that the article did not address, let alone solve, technical problems dealt with in the patents, and that although various components were known to persons skilled in the art, the inventor had brought the elements together to achieve a new, useful and ingenious result.
6. Whirlpool v. Camco, December 15, 2000, SCC (Binnie J.) Patent Infringement/ Purposive Claims Construction/Double Patenting
Appeal from finding of patent infringement. The primary issue on appeal to the SCC was whether a “purposive construction” was the proper approach to claims construction both for infringement and validity. A secondary issue was the test for the invalidity defence of double patenting. The respondent had developed an ingenious dual action agitator for clothes washing machines. The agitator utilized the bottom portion of the shaft for the usual oscillating motion back and forth, but added an upper sleeve that was designed to work as a helical auger. The auger rotated only in one direction like a post-hole digger and propelled water and clothing downwards onto the oscillating vanes of the lower agitator to produce more uniform scrubbing. This development resulted in three Canadian patents. In the first patent, the dual agitator was powered by a drive shaft, and in the second, the drive shaft was replaced by a clutch mechanism. The trial judge had found that both of these patents required the vanes on the lower agitator to be rigid. In the third patent, flexible vanes were substituted for rigid vanes; also, a choice of drive modes was available, one where the upper auger was driven “intermittently” and the other where it was driven continuously.
Held: Appeal dismissed. With respect to the first issue, the SCC held that a purposive construction applies not only to infringement but also to the issue of validity. The SCC added that it was permissible to look at the rest of the specification including the drawing to understand the meaning of a term in a claim, but not to enlarge or contract the scope of the claim as written and thus understood. The SCC also stressed that a ”dictionary” approach to claim construction was wrong, since the claims were not addressed to grammarians, etymologists or to the public generally, but rather to skilled workers sufficiently versed in the art to which the patent related to enable them on a technical level to appreciate the nature and description of the invention. The SCC opined that a purposive analysis was not a departure from earlier jurisprudence in the U.K. and Canada. Regarding the second issue, the SCC stated that the prohibition against double patenting involved a comparison of the claims in the patents at issue. The question, however, was how close the claims in the subsequent patent had to be in order to justify invalidation. The SCC held that there were two branches to the prohibition of double patenting: (1) “same invention” double patenting, where the claims are identical or conterminous; and (2) “obviousness” double patenting, which is a more flexible and less literal test that prohibits issuance of a second patent with claims that are not “patentably distinct” from those of the earlier patent.
Ultimately, the patent was found to be valid and infringed. Regarding validity, the SCC found that the first branch of double patenting did not apply, and that under the second branch, the appellant had failed to displace the statutory presumption of validity. On the issue of infringement, although the evidence was not very satisfactory, the SCC considered the evidence to support an inference of infringement. Since the appellants had elected not to call any evidence on this point, the SCC concluded that in the absence of evidence to contrary, it had been open to the judge to find infringement.
7. Whirlpool v. Maytag, December 15, 2000, SCC (Binnie J.) Patent Infringement/Purposive Claims Construction/ Double Patenting
This was a companion case to Whirlpool v. Camco, discussed above. The same patent relating to clothes washing machines was at issue. Maytag had conceded infringement, but denied the patent's validity on the basis of double patenting. The appeal in this case had been heard by the F.C.A. at the same time as the Camco appeal. The FCA had dismissed both appeals with a single set of reasons. The appeals in this case and the Camco case were again heard together.
Held: Appeal dismissed. For the reasons set out in the Camco case, the attack on the validity of the patent was dismissed. Since Maytag had conceded infringement, infringement was a non-issue.
III. OPPOSITION BOARD DECISIONS
1.Telpro Investments v. Hemingway's Restaurant, November 9, 2000 (Partington) Confusion/Section 30(b)/Effect of Amalgamation
Use-based application for HEMINGWAY'S for restaurant and bar services. Opposition based, inter alia, on s. 30(b) because the applicant could not have used the mark since 1982 because the applicant did not exist in 1982 as it was created by a subsequent amalgamation and s.16 (1)(a) due to confusion with the mark HEMINGWAY'S previously used by the opponent in the operation of a restaurant, tavern and dining lounge.
Held: Application refused due to the likelihood of confusion. The s. 30(b) ground failed because an amalgamating corporation under the Business Corporations Act is not a predecessor in title for the purposes of the Trade-marks Act.
2.Joop! v. Taboh Holdings, November 15, 2000 (Herzig) Confusion
Use-based applications for OOPS! and OOPS! Design for footwear and related retail selling services. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark JOOP! registered for cosmetics, clothing and shoes.
Held: Applications refused.
3.Fruit of the Loom v. Importations Exportations Lam, November 21, 2000 (Martin) Confusion
Proposed-use application for BÉBÉ FRUIT BABY >for children's toys namely dolls. BÉBÉ and BABY disclaimed. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark FRUIT OF THE LOOM registered for clothing and related items such as diaper pins, teethers and toys.>>>
Held: Opposition rejected because there is little resemblance between the marks and the opponent has not used its mark for toys.
4.Buffalo-Eastcantra v. Sarafina Investments, November 27, 2000 (Partington) Confusion
Application for BUFFALO based on use for socks and on proposed use for footwear, hosiery, underwear, luggage, jewelry, linen and packsacks. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark BUFFALO & Design registered for various school-type supplies including school bags. The opponent only opposed the application in relation to "packsacks".
Held: Application refused with respect to "packsacks". Confusion likely given the resemblance between the marks and the similarity between packsacks and school bags.
5.Deutsche Telekom v. Esker, November 27, 2000 (Partington) Confusion
Proposed-use application for TUN NET Design for computer software for connecting PCs in heterogeneous networks. Opposition based, inter alia, on s. 16(3)(b) due to confusion with the mark TNET for computer hardware and software and telecommunications equipment.
Held: Application refused. Bearing in mind that the applicant did not file any evidence or argument, it failed to meet its legal burden.
6.Artel v. Cuisine de France, November 27, 2000 (Partington) Confusion
Application for CUISINE DE FRANCE & Design for bakery products based on use and registration abroad and proposed use. CUISINE and FRANCE disclaimed. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark CUISIFRANCE & Design registered for precooked meals.
Held: Opposition rejected. Although there may be an overlap in the channels of trade of the parties, confusion is not likely because the opponent's mark is weak and has not been shown to have acquired any significant reputation. The opponent's mark possesses little inherent distinctiveness as it would be perceived as comprising a telescoping of the words CUISINE and FRANCE which are descriptive of precooked meals. Bakery products and precooked meals would not be sold in the same area of a grocery store.
7.Kraft v. ConAgra Grocery Products, November 27, 2000 (Bradbury) Descriptiveness/Material Date re Section 14
Application for JUICY GELS for fruit-flavored snack foods namely fruit-flavored carrageenan-based gel snacks based on use and registration abroad and proposed use. GELS disclaimed. Opposition based, inter alia, on s. 12(1)(b). During the proceedings, the applicant claimed the benefit of s. 14.
Held: Application refused. The mark is clearly descriptive of the character of the wares as the wares are gels that contain juice. Regarding s. 14, the Hearing Officer reviewed the case law concerning the appropriate material date (date of filing of application versus date of disposition) but found it unnecessary to apply either date as the evidence filed in support of the s. 14 claim did not show use by the applicant.
8.Canadian Duty Free Distributors v. Logotex, November 27, 2000 (Bradbury) Section 30(b)/Confusion
Use-based application for CANADA COUNTRY for clothing etc. and the operation of a retail business providing embroidery and screen-printing services to the public. CANADA disclaimed. Opposition based, inter alia, on s. 30(b) because the applicant has not used the mark since the date claimed and s. 12(1)(d) due to confusion with the mark KID'S COUNTRY CANADA & Design registered for a variety of wares including clothing and the operation of a wholesale distribution business dealing with gift, novelty and souvenir items.
Held: Application refused with respect to wares; opposition rejected with respect to services. Confusion likely with respect to the wares because the applicant's mark is an inherently weak mark that has not been strengthened through significant use and Canadians, with an imperfect recollection of KID'S COUNTRY CANADA & Design children's clothing might assume that CANADA COUNTRY adult clothing shares a common source. The s. 30(b) ground failed, even though the invoices filed by the applicant did not support the alleged date of first use, because the applicant stated that the invoices filed were merely representative. During its cross-examination of the applicant's affiant, the opponent did not establish that the invoices filed included the first. The applicant's evidence was therefore not "clearly inconsistent" with the claim of first use set forth in its application.
9.Boutique Tristan & Iseut v. Joe America, November 30, 2000 (Partington) Confusion
Proposed-use application for JOE AMERICA for clothing and housewares. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark AMERICA registered for clothing.
Held: Opposition rejected with respect to housewares because such wares bear no similarity to the opponent's wares. Application refused with respect to clothing because the marks are similar, the wares overlap, and the opponent has made relatively extensive use of its mark.
10.Lawler Foods v. Nestlé, December 4, 2000 (Partington) Confusion
Proposed use applications for SEDUCTION and NESTLE SEDUCTION for chocolate bars. Oppositions based, inter alia, on s. 12(1)(d) due to confusion with the mark SEDUCTION registered for cakes.
Held: Oppositions rejected. The applicant has met the legal burden on it in respect of the issue of confusion in view of the differences in the wares and the nature of the trade and the evidence of at least some use of the third party mark SEDUCTIONS in association with ice cream, which was sold in close proximity to cakes in at least one retail outlet visited by the applicant's affiant.
11.Insight Holdings v. Insite Real Estate Information Systems, December 4, 2000 (Partington) Confusion
Use-based application for REAL INSITE for various printed matter related to the advertisement, listing, valuation and analysis of the financial performance as an investment of commercial real estate and providing information, facility performance, and advertising services relating to commercial real estate for others… Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark INSIGHT registered for developing, designing, planning, constructing, marketing, selling and managing of residential and commercial properties, real estate projects and/or real estate developments.
Held: Application refused. Bearing in mind that the applicant filed no evidence or argument, it failed to meet the legal burden on it with respect to the issue of confusion given the resemblance between the marks as applied to related wares and services.
12.The Blue Note Restaurant v. Bensusan Restaurant, December 4, 2000 (Bradbury) Confusion/Unlawful Use/Passing Off/Onus
Application for BLUE NOTE & Design for restaurant and cabaret services based on use and registration abroad. Opposition based, inter alia, on s. 16(2)(a) due to confusion with the mark BLUE NOTE previously used by the opponent for a restaurant and cabaret. The applicant agreed that there was a likelihood of confusion between the marks but argued that the opponent ought not to be allowed to rely on its use of its mark because such use was unlawful.
Held: Application refused. The Hearing Officer was reluctant to make any finding concerning whether or not the opponent's use constituted passing off in the absence of not only a court decision finding passing off but also of any action having been commenced pleading passing off. She distinguished prior cases where the Opposition Board considered whether use of a mark contravened s. 7 or provisions of other legislation on the basis that such cases concerned "unlawful use" by the applicant, not the opponent; given the burden in opposition proceedings, the opponents in those cases needed to only establish a prima facie case of unlawful use by the applicants whereas here any doubt as to whether the opponent's use was unlawful must be resolved against the applicant. There was relatively little evidence of the applicant having a reputation in the geographic area where the opponent operated and no evidence from Canadians that they would think that the opponent's services were associated with the applicant, causing the Hearing Officer to have doubts as to whether the opponent was guilty of passing off.
13.Bensusan Restaurant v. The Blue Note Restaurant, December 4, 2000 (Bradbury) Confusion/Deemed Abandonment of Application/Section 38(7)(b)/Section 47
Use-based application for THE BLUE NOTE for restaurant and cabaret services. Opposition based, inter alia, on non-distinctiveness because the applicant's mark does not distinguish its services from the opponent's BLUE NOTE services which have become well known in Canada. The opponent also argued that the application became irrevocably abandoned when the applicant failed to file evidence or a statement that it did not intend to file evidence in a timely manner, and that the Registrar lacked jurisdiction to subsequently grant a retroactive extension of time.
Held: Application refused. The opponent's mark had become known sufficiently through newspaper articles to negate the distinctiveness of the applicant's mark.
Section 47 gives the Registrar an unfettered discretion to grant an extension of time, including a retroactive extension of time. In general, the Registrar can reconsider a deemed abandonment after the statutory time limit has passed but before the notice of the deemed abandonment has been sent, regardless of whether or not there has been any error.
14.Sears Canada v. American Sporting Goods, December 7, 2000 (Partington) Confusion
Use-based application for NEVADOS for footwear. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark NEVADA registered for clothing and footwear.
Held: Application refused. Confusion likely given the degree of similarity between the marks as applied to overlapping wares which could travel the same channels of trade.
15.Wakefield Realty v. Cushman & Wakefield, December 8, 2000 (Martin) Confusion
Proposed use applications for CUSHMAN & WAKEFIELD and CUSHMAN & WAKEFIELD & Design for real estate brokerage services. CUSHMAN disclaimed. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark WAKEFIELD & Design registered for real estate services.
Held: Applications refused. Confusion likely given the resemblance between the marks, the overlap in the services and trades of the parties and the reputation associated with the opponent's mark.
16.Alberta Dental Service v. John Labatt, December 13, 2000 (Martin) Confusion/Connection Between Trades
Use-based application for QUIKCARD for operation of a consumer identification system as part of a system for the retail sale of beverages. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark QUIKCARD & Design registered for operation of a dental benefits plans; administration and management of dental benefits plans and insurance plans.
Held: Opposition rejected. Confusion not likely in view of the wide disparity in the services, trades, and business of the parties. The fact that parties may occasionally advertise in the same venue does not, by itself, point to a connection between their trades. Although the opponent submitted that there is a connection between the parties' services since both cover a card-based system used to pay for wares/services, it is the statements of services that govern and they do not refer to a card-based service.
17.Rockport v. A. Loren Sales, December 18, 2000 (Herzig) Confusion
Use-based application for ROCK POINT for apparel belts, shoes, key-tags, handbags and wallets. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark ROCKPORT registered for shoes, handbags, wallets and clothing.
held: application refused. confusion likely in view of the close match between the parties' wares, the resemblance between the marks and the reputation for the opponent's mark.
18.Hudson's Bay v. Michael Friedman, December 18, 2000 (Partington) Confusion
Proposed-use application for HOBBY HORSE & Design for infants' and children's feeding bottles… and toys. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark BUNDLE OF JOY & Rocking Horse Design registered for children's wearing apparel.
Held: Application refused. In view of the resemblance in appearance between the marks as applied to related wares that could travel through the same channels of trade, the applicant has failed to meet the legal burden on it to show that there would be no reasonable likelihood of confusion.
19.Asahi Kogaku Kogyo v. Pentax, December 21, 2000 (Herzig) Confusion
Proposed-use application for PENTAX & Design for hydraulic and centrifugal pumps, with the exclusion of those for boat engines and for diesel engines larger than 10 hp. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark PENTAX registered for cameras, medical and scientific instruments.
Held: Opposition rejected. Confusion not likely due to the divergence between the parties' wares and the fact that the applicant's wares are purchased by sophisticated buyers. The nature of the parties' wares and their trade are quite distinct. Although some of the opponent's wares include pumps, the pumps are not separate units but rather are integrated into delicate medical instrumentation which would be used exclusively in a hospital setting. The applicant's pumps are industrial strength and are sold to building contractors or large-scale farming organizations. Owing to the nature of the applicant's pumps, they would only be ordered after a careful consideration of the pump's technical specifications.
IV.SECTION 45 DECISIONS
1.Gowling, Strathy & Henderson v. R. Reusse Construction, November 23, 2000 (Bradbury) Sufficiency of Evidence
PARKWAY CORPORATE CENTRE registered for planning, designing, constructing, promoting, developing, managing, leasing, servicing and operating commercial properties and real estate projects including multiple and diversified retail stores and outlets, restaurants, offices and professional suites, parking facilities, sports and physical fitness facilities, and providing all such services relating to the operation of a commercial mixed-use real estate project.
Held: Registration restricted to promoting, developing, managing, leasing, servicing and operating commercial properties and real estate projects including multiple and diversified offices and professional suites, parking facilities, and providing all such services related to the operation of a commercial mixed-use real estate project. Regarding the other services, the affiant stated that they were either performed during the development of its existing buildings or will be performed once its existing buildings are rezoned and where the opportunity arises. They were therefore not used during the relevant three year period and no special circumstances were provided justifying their non-use.
2.Wrangler Apparel v. Pacific Rim Sportswear, December 4, 2000 (Bradbury) Ambiguous Evidence/Ordinary Commercial Term
BRITTANIA registered for jeans and shirts.
Held: Registration expunged. The evidence showed one sale of pants in association with the mark. The registrant's affiant never referred to the pants as jeans and the pair of pants provided as an exhibit were not what the Hearing Officer considered to be jeans. Conflicting definitions of “jeans” were put forward in the written arguments. The onus is on the registrant to make a correlation between the wares shown to be in use and the registered wares. The failure of the affiant to indicate whether “jeans” are the ordinary commercial term for the pants sold was treated as an ambiguity to be interpreted against the interests of the affiant.
3.Fetherstonhaugh v. Conagra, December 20, 2000 (Bradbury) Dead Wood/Liable to be Expunged
KID CUISINE registered for frozen prepared meals consisting of a chicken, cheese, beef or fish entree with side dishes of vegetables and fruit with additional fruit or bakery goods as desserts sold as a unit; frozen prepared meals consisting of a pasta based entree with side dishes of vegetables and fruit with additional fruit or bakery goods as dessert sold as a unit.
Held: Registration expunged. The registrant began promoting KID CUISINE products in Canada approximately one month before the issuance of the s. 45 notice and provided invoices showing sales approximately two months after the notice. The mark had been registered for 6 years in Canada and had been in use in the United States for ten years. The registrant did not argue special circumstances justifying non-use but instead focused on the purpose of s. 45, arguing that the evidence of use after the s. 45 notice shows that the mark is not dead wood. The Hearing Officer held that the evidence did not satisfy the statutory provisions of s. 45 and the registration was therefore liable to be expunged. The registrant argued that the Registrar has discretion to maintain a registration that is liable to be expunged under s. 45 but the Hearing Officer was not so convinced.
The Hearing Officer distinguished certain case law on the basis that the present case is not one of resumed use and noted the long period of non-use. The Hearing Officer also held that the use shown of the mark was not in association with the registered wares, due to the absence of fruit in the wares sold.
V. FOREIGN DEVELOPMENTS
(a) Patents
Australia Legislation
The Australian Government has amended the Patents Act to provide for an “innovation patent.” It is expected that the law will come into force in May 2001.
The innovation patent system will replace the present petty patent system. Innovation patents are expected to cover incremental developments that cannot be protected by a standard patent. As opposed to a standard patent that requires an inventive step an innovation patent requires an innovative step. An innovative step will be regarded as being provided if a development in a product or process from what already exists makes an actual or substantial contribution to how the product or process works. Prior art, however, is the same as for a standard patent (namely a publication publicly available anywhere in the world and use that has occurred in Australia will apply).
The maximum number of claims allowable in an innovation patent will be five.
Innovation patents will be subject to formality examination only, including a check that the claims are directed to patentable subject matter. Unless requested, there is no search or substantive examination. However, it will only be possible to initiate proceedings for infringement and send demand letters after the innovation patent has been certified as being examined. Accordingly, after grant, the patentee can voluntarily request examination.
