Federal Court Weighs In On Comparative Advertising Claims

• Published date: 06 December 2023
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Trademark, Advertising, Marketing & Branding
• Law Firm: Bereskin & Parr LLP
• Author: Mr William Audet, Wynnie Chan and R. Scott MacKendrick

A notable decision of the Federal Court of Canada in Energizer Brands, LLC v. Gillette Company, 2023 FC 804 has dealt with the use of comparative performance claim labels and stickers on product packaging. It considered whether the claims made depreciated trademark goodwill, and, as well, were deceptive, false or misleading in violation of certain unfair competition provisions of the Trademarks Act as well as of the Competition Act.

Justice Fuhrer of the Federal Court found that certain statements on Duracell's packaging using Energizer's ENERGIZER and ENERGIZER MAX trademarks were likely to depreciate Energizer's goodwill in its registered trademarks, and thus awarded Energizer an injunction against Duracell prohibiting the use of Energizer's marks, together with damages in the amount of $179,000. Other statements not using the marks, but using the "bunny brand", were not found to depreciate, owing to a lack of evidence of consumer reaction to the "bunny brand" use.

Background

The dispute between Energizer (the owner of the ENERGIZER marks) and Duracell (the Gillette Company, the owner of the DURACELL mark) centered around certain comparative advertising claims found on labels and stickers affixed to DURACELL battery packaging that bore the statements: "15% LONGER LASTING vs. Energizer"; "UP TO 15% LONGER LASTING vs. ENERGIZER MAX"; "Up To 20% LONGER LASTING vs. the bunny brand"; and "Up to 15% longer lasting vs. the next leading competitive brand".

Section 22 of the Trademarks Act¹ provides that "no person shall use a trademark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto." To succeed in a claim for depreciation of goodwill, a plaintiff must meet the following four-part conjunctive test as described by the Supreme Court of Canada in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée:²

1. its registered trademark was used by the defendant with goods or services, regardless of whether they are competitive with those of the plaintiff;
2. its registered trademark is sufficiently well known to have a significant degree of goodwill attached to it, although there is no requirement that the trademark be well known or famous;
3. the defendant's use of the trademark was likely to have an effect on that goodwill (in other words, there was a linkage) and
4. the likely effect is to depreciate or cause damage to the value of the goodwill.

In this case, satisfying the second test element...