New Guidance From The Federal Court Regarding Comparative Advertising Claims In Canada

• Published date: 08 August 2023
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Trademark, Advertising, Marketing & Branding
• Law Firm: Bereskin & Parr LLP
• Author: Ms Wynnie Chan, R. Scott MacKendrick and William Audet
• topic: Advertising Law,Trademark,Intellectual Property,Civil Procedure

A summary of the findings

After much anticipation, a notable decision concerning comparative advertising claims in Canada was recently issued by the Federal Court of Canada in Energizer Brands, LLC v. Gillette Company, 2023 FC 804. The case dealt with whether the use of comparative performance claim labels and stickers on packaging depreciated trademark goodwill contrary to section 22 of the Trademarks Act, and whether the claims were deceptive, false or misleading in violation of certain unfair competition provisions of the Act as well as of the Competition Act.

Justice Fuhrer of the Federal Court found that statements on Duracell's packaging using ENERGIZER and ENERGIZER MAX were likely to depreciate the goodwill of Energizer's registered trademarks, and thus awarded Energizer an injunction against Duracell prohibiting the use of Energizer's marks and damages in the amount of $179,000. The stickers - which did not use Energizer's registered trademarks - were found not to depreciate and, as well, were not deemed to be offensive, deceptive, false or misleading contrary to the Trademarks Act and Competition Act.

Background

The dispute between Energizer 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 following statements:

• 15% LONGER LASTING vs. Energizer
• UP TO 15% LONGER LASTING vs. ENERGIZER MAX
• Up To 20% LONGER LASTING vs. the bunny brand
• Up to 15% longer lasting vs. the next leading competitive brand

Section 22 of the Trademarks Act 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:

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...