Trade Mark Group Newsletter

Recent Developments in Canadian Trade Mark Law

In recent months, there have been significant developments in Canadian trade mark law and practice that impact on trade mark protection strategies in Canada.

Constitutional Issues and Functional Trade Marks

On November 17, 2005, the Supreme Court of Canada issued their decision in a case brought by Kirkbi AG and LEGO Canada Inc. against Mega Bloks Inc. The plaintiffs asserted common law rights in the "LEGO Indicia" which is the appearance of the familiar array of studs that are applied to LEGO® bricks. Although the trial judge found that the LEGO Indicia was distinctive and that the activities of Mega Bloks has caused confusion, the trial judge also found that the LEGO Indicia was functional, and, as a result, the plaintiffs' case failed. On appeal, the majority of the Federal Court of Appeal held that anything that is merely functional is not entitled to trade mark protection. The Supreme Court agreed with the Federal Court of Appeal, and also found that distinctiveness and goodwill cannot flow from a product that is merely functional in nature, because that would amount to granting a perpetual monopoly in subject matter that should be free to other traders to copy.

The Supreme Court also rejected Mega Bloks' position that federal passing off law (section 7(b) of the Trade-marks Act) is unconstitutional as being ultra vires of the Parliament of Canada. The Court found that section 7(b) is a valid exercise of federal authority in rounding out the protection to be afforded to both registered and unregistered trade marks.

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Famous Marks

The Supreme Court of Canada heard two appeals on October 18, 2005 relating to famous marks. The first case deals with the mark VEUVE CLICQUOT, particularly known for champagne. The appellant, Veuve Clicquot Ponsardin, was unsuccessful in an infringement and passing off action against Boutiques Cliquot's use of the marks CLIQUOT and CLIQUOT "UN MONDE A PART" for clothing stores. The appellant argued that the fame of its VEUVE CLICQUOT marks meant that the Boutiques Cliquot trade marks were confusing, despite the difference between the goods and services. In the second case, the appellant, Mattel Inc., owner of the marks BARBIE and BARBIE'S primarily in connection with dolls, unsuccessfully opposed the respondent's application for BARBIE'S & Design in association with restaurants and catering services. The Trade-mark Opposition Board found no likelihood of confusion, given the differences in the parties' goods and services. The Federal Court and the Federal Court of Appeal both rejected Mattel's appeals.

In both cases, the Supreme Court is expected to determine the scope of protection afforded to famous marks, and to clarify the test for confusion and depreciation of goodwill. Decisions are expected in the spring of 2006.

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Entitlement

On May 10, 2005 the Federal Court of Appeal, in Attorney-General of Canada v. Effigi Inc. (2005) FCA 172, held that at the examination stage, an Examiner at the Trade-marks Office must assess entitlement strictly on the basis of application or convention priority filing dates. This decision does not, as many reports have suggested, render Canada a “first-to-file” jurisdiction. However, in light of Effigi, the

Trade-marks Office issued a Practice Notice clarifying that an applicant relying on prior use or making known over a previously filed confusing application will have to successfully oppose the earlier application. Consequently, companies considering the protection of trade marks in Canada would be well advised to get their applications on file as soon as possible. Practically, an earlier applicant whose use is clearly subsequent to a later filed application for a confusing mark will probably not maintain its application if opposed by the owner of the previously used trade mark, but such an applicant could very well take advantage of the tactical position its first filed application gives it to negotiate an advantageous settlement.

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Clearly Descriptive When Sounded

The Federal Court has clarified Canadian law and changed Canadian practice as it relates to descriptive trade marks. In Best Canadian Motors Inns Ltd. v. Best Western International Inc. (2004) F.C. 135, the Court held that a composite mark consisting of clearly descriptive words and a design element will not be registrable if the clearly descriptive words form the dominant feature, making the mark clearly descriptive "when sounded". This alters the prior practice of accepting trade marks that combined clearly descriptive words with even a modest design element, subject to a disclaimer of the descriptive words. As a result of this decision, the Trade-marks Office issued a Practice Notice outlining the factors that will be considered in assessing whether a descriptive word element is the “dominant” feature of the mark. For trade mark owners and practitioners, the aim will be to ensure they are in a position to claim that the descriptive matter in the mark is not the "dominant feature" of the trade mark.

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Proposals for Modernizing the Trade-marks Act

The Canadian Intellectual Property Office (“CIPO”) recently published proposals for modernizing the Trade-marks Act. These include the proposal that Canada join (1) the Madrid Protocol, which would allow Canadian applicants to access an international filing scheme, and (2) the Trademark Law Treaty (“TLT"), which would require Canada to harmonize its trade mark legislation with those of other member countries, most particularly regarding the classification of goods and services. Joining these two treaties may result in significant administrative costs for the Trade-marks Office, which are likely to be passed on to trade mark owners. The Intellectual Property Institute of Canada (“IPIC”) has questioned whether the associated costs outweigh the potential benefits to Canadians, and have requested further study to measure the actual costs and benefits to Canadians before adoption takes place.

CIPO also proposed a new approach to trade mark use requirements in Canada. Instead of requiring use before registration, CIPO proposes owners be required to declare or demonstrate use after registration, with additional demonstrations of use at requisite intervals thereafter. CIPO further proposes that in order to assert a trade mark registration in legal proceedings, the owner would need to satisfy post-registration use requirements or demonstrate use. This change may significantly impact the assessment of trade mark rights in Canada, and the body of Canadian trade mark jurisprudence founded on a use-based trade mark system.

CIPO also invited comment on the protection of sound, moving-images, holograms, scent, taste and colour per se as trade marks. While CIPO has been reluctant to extend protection of non-traditional trade marks, the recent proposal signals a recognition that sound and other non-traditional indicia comprise a critical component of modern branding strategies, and a willingness on the part of CIPO to consider extending statutory protection to additional forms of “non-traditional” trade marks in Canada.

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What's New with our Trade Mark Professionals …

Cynthia Rowden, a senior partner with Bereskin & Parr, was appointed President of the Intellectual Property Institute of Canada (“IPIC”) at the 79th Annual IPIC Meeting in October. She has been an active member of IPIC for many years. She has served and is currently on numerous IPIC committees relating to trade mark practice and international trade marks. Cynthia is a globally recognized leader in the trade mark field, being consistently ranked in publications such as the “2005 Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada”, and “The International Who's Who of Business Lawyers”.

Brigitte Chan has moved her trade mark practice to Bereskin & Parr's Montréal office, after having spent five years in the Toronto office. Brigitte has both civil and common law degrees, and is a registered trade mark agent practicing in all areas of trade mark law. Brigitte counsels clients in trade mark prosecution, licensing and enforcement, as well as, copyright, domain name and related Internet matters. Much of her practice involves trade mark portfolio management of Canadian and international companies, both on a domestic and international level.

Mina Chana joined Bereskin & Parr's Mississauga office in August of this year. Mina's trade mark practice focuses on conducting searches, providing opinions and advice on registrability, filing and prosecuting applications, representing clients in opposition and expungement proceedings, and trade mark infringement matters. Prior to joining Bereskin & Parr, Mina practiced exclusively in the area of intellectual property with two other Canadian firms.

Meghan Dillon joined the firm as a trade mark lawyer in August of this year. Meghan spent a summer term with Bereskin & Parr and completed her articling term with the firm. She earned her LL.B. from Queen's University, where she received numerous awards and scholarships. She is currently a member of Bereskin & Parr's trade mark, copyright/new media and regulatory, advertising & marketing practice groups.

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Speaking of IP …

In 2006, the International Trademark Association will be hosting its 128th Annual Meeting in Toronto, May 6th to 10th. The last time the conference came to Canada was 1992. Cynthia Rowden is Co-chair of this Annual Meeting.

According to the INTA website, “The International Trademark Association (INTA) is a not-for-profit membership association of more than 4,600 trademark owners and professionals, from more than 180 countries, dedicated to the support and advancement of trademarks and related intellectual property as elements of fair and effective national and international commerce”.

For more information on the INTA or the conference please visit www.inta.org.

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Last Modified:Thursday, May 8, 2008