Trade-marks Year In Review 2012

This review will focus on several trade-mark related decisions of the Federal Court (FC) and the Federal Court of Appeal (FCA) in 2012.

Infringement/Passing Off

Philip Morris sells MARLBORO cigarettes internationally in association with red Rooftop packaging. It began selling cigarettes in Canada using the red Rooftop design elements, but without reference to MARLBORO. Marlboro Canada issued a demand letter alleging infringement of its registered trade-mark MARLBORO. In response, Philip Morris sought a declaration that the sale of the ROOFTOP cigarettes did not contravene any of the rights of Marlboro in its MARLBORO mark. Marlboro responded with a counterclaim alleging trade-mark infringement.

Marlboro claimed that the use of the ROOFTOP design with no name called MALBORO to mind, creating a form of reverse confusion. While there was evidence of an association that some customers made between Rooftop cigarettes and Malboros, the FC held that the association was not problematic because the association was with the plaintiff's international Malboros, and not with the defendant's Canadian Malboros.

The FCA overturned the decision and found that use of the MARLBORO mark was not a requirement to establish infringement: Malboro Canada Limited v. Philip Morris Products S.A.1

The FCA held that:

While the ROOFTOP label and the MARLBORO trade-mark had no visible resemblance to each other, they resembled each other in the “idea” suggested to consumers as a result of the strong association consumers have between the ROOFTOP and MARLBORO trade-marks by virtue of their association together on products sold outside of Canada;

Such an association of “ideas” can be artificially created by circumstances such as those in this case where the association had been made by consumers in the marketplace;

The resemblance in ideas suggested by the marks was made more significant in this case because the cigarettes were, by regulation, prohibited from being placed in public view. The Court noted that “in a dark market where the trade-marks are not in view, consumers will use the same name to refer to two different products offered by two different manufacturers.”

Philip Morris argued that its trade-mark registrations for the various components of the ROOFTOP label provided a complete defence to the infringement claims. The FCA held that, while the registrations were valid, its finding of confusion was based on a consideration of the entire ROOFTOP label and not any single component. As there was no registration for the entire combination, the FCA rejected the defence. An application for leave to appeal to the Supreme Court of Canada is pending.

In BBM Canada v Research and Motion Ltd,2BBM brought an application alleging that the use of BBM by Research in Motion (RIM) constituted infringement, passing off and depreciation of goodwill in the registered trade-marks of BBM Canada. The FC disagreed and dismissed BBM Canada's application.

The FC noted the distinction in services between BBM Canada and RIM. BBM Canada is in the business of supplying impartial television and radio ratings data and analysis to Canadian broadcasters and advertisers. In contrast, RIM is a designer, manufacturer and marketer of wireless solutions for the global mobile communications market. The FC held that:

Confusion must be assessed by reference to the “average person” likely to consume the wares or services in question;

The services of BBM Canada, namely sophisticated market research, do not overlap or lead to direct competition with RIM and its BBM service;

The consumers of the services of BBM Canada are a defined group of advertisers, most of whom are long-standing members of BBM Canada. If a likelihood of confusion is to be found, it must be from among this group.

The Court found no likelihood of confusion. An appeal is pending before the FCA and was heard on January 17, 2013.

Expungement Proceedings

Mr. Hrdlicka registered the mark VRBO for use with vacation real estate listing services. In a strongly worded decision, Justice Hughes ordered the registration expunged: Homeaway.com Inc. v. Martin Hrdlicka.3

Homeaway is a U.S. company offering vacation real estate listing services under the VRBO mark. It maintained a database, physically located in the U.S., but the VRBO mark was displayed on users' computer screens in Canada and elsewhere. The FC held thata trade-mark which appears on a computer screen website in Canada, regardless where the information may have originated from or be stored, constitutes … use and advertising in Canada. The FC went on to conclude that Homeaway had established prior use of its mark in Canada. As for Mr. Hrdlicka, there was no evidence that he had ever used the mark in Canada. Further, he admitted that he was aware of Homeaway and its use of VRBO at the time he filed his application. The FC found that,[h]is intent was to extort money or other consideration...