Announcements

James Palmer elected President of IPIC

John Macera - one of world's leading IP practitioners

Canadian Patent Rule Changes - Effective June 2, 2007

E-OPPOSITIONS ARE COMING

Three lawyers at Macera & Jarzyna Certified as IP Specialists

MARCASUR announces Eduardo Fonseca joining Moffat & Co.

John Macera listed as one of 100 best lawyers in Canada (Ontario) by BestLawyers.com and the National Post.

Coming Events

Reports on Judgments

July 2007 Euro Excellence vs Kraft - landmark parallel imports decision
June 2007 - Please Do Not Amend
November 2006 - Evergreen No More?
June 2006 - Supreme Court on Famous Trade-marks
May 2006 - Cross-Canada v. Hyundai
March 2006 - Stay Pending Appeal
February 2006 - NOT Authorizing Copyright Infringement
January 2006 - MAXImum Confusion?
January 2006 - Grey Market Chocolate
January 2006 - Cachet is not enough
December 2005 - Public Authority Limited to Canada
December 2005 - Good Vibrations
December 2005 - Does untrue material allegation in Patent Petition require willfullness?
November 2005 - LEGO Blocked
October 2005 - Invalid Patent Cannot be Infringed
August 2005 - FCA Clarifies Material Date for Considering Trademark Infringement
August 2005 - Safeguards Required for Anton Pillar Orders
August 2005 - Between about 70C and 110C is not between about 115C to 120C
August 2005 - JAVACAFÉ Not Descriptive of Coffee
July 2005 - Amended Trademark Supports Registration
July 2005 - Settlement Offers Must be Renewed on Appeal
July 2005 - Reference to Chemical Formula in Claim Not a Reference to Process
July 2005 - Europe Refuses to Expand Patent Protection to Software Patents
May 2005 - Supreme Court of Canada to Decide LEGO Blocks Case
May 10, 2005 - The First to File at the Trade-marks Office Wins!
May 2005 - Barbie Doll takes on Barbie's BBQ Restaurant at Supreme Court
February 2005 - New Trade-marks Office Practice For Composite Marks

Newsletter Archive 2002-2004

Announcements

1. James Palmer elected President of IPIC

James Palmer has been elected President of the Intellectual Property Institute of Canada (IPIC). The swearing-in ceremony took place in Vancouver, British Columbia, on October 13, 2007.

IPIC is a Canadian national association comprised of over 1,700 intellectual property professionals from Canada and abroad. IPIC is committed to the protection and promotion of intellectual property in the Canadian economy.

We applaud Jim for his achievements and efforts in the field of intellectual property and wish him every success as President of IPIC for 2007-2008.
Back to top

2. John Macera - one of world's leading IP practitioners

John Macera has been nominated by his peers as one of the world's leading practitioners in the field of trademark law. This, according to Law Business Research Limited an independent London-based publishing group which provides research, analysis and reporting on the international legal services marketplace. Law Business Research Limited own and operate the website Who's Who Legal and publish the International Who's Who of Trademark Lawyers. John Macera is listed in the 2007 edition of the Who's Who handbook.

Back to top

3. E-OPPOSITIONS ARE COMING

Moffat & Co was one of a handful of influential IP firms invited to a consultation with the Canadian Intellectual Property Office ("CIPO") on its plans to begin offering e-filing services for trade-mark opposition procedures. CIPO's objective is to permit e-filing of statements of opposition and requests for extensions of time within a year, and then to expand its e-filing services to other stages of an opposition procedure over time.

This initiative follows CIPO's success with e-filing trade-mark applications and prosecution documents.

We will advise you when opposition e-filing becomes available.

Back to top

4. Specialists Certified by the Law Society at Macera & Jarzyna

Three lawyers at Macera & Jarzyna have been certified by the Law Society of Upper Canada as Specialists in Intellectual Property Law.

John Macera, Elizabeth Elliott, and Kevin Carton are certified by the Law Society as Specialists in Intellectual Property Law. For more information on Law Society Certified Specialists, see the Law Society of Upper Canada web site at http://www.lsuc.on.ca/public/member_spec_en.shtml.

Back to top

Coming Events

Reports on Judgments

Euro Excellence vs Kraft - landmark parallel imports decision

On July 26, 2007, the Supreme Court of Canada released a landmark ruling on parallel importation and copyright law in Canada. Macera & Jarzyna, LLP acted for the intervener, Retail Council of Canada, which supported the winning appellant. The decision is a significant victory for commercial importers and represents a major win for our firm.

The following is Howard Knopf’s first take. Howard is Counsel with Macera & Jarzyna, and presented our client’s views to the Supreme Court of Canada.

Here's the Supreme Court decision in Euro Excellence v. Kraft.

Briefly, Kraft is the exclusive Canadian distributor of Côte d’Or and Toblerone chocolate bars in Canada for its parent companies. Euro imported and distributed Côte d’Or and Toblerone bars which it had acquired in Europe and which were manufactured by Kraft's parent companies. In 2002, in order to allow Kraft to pursue the present case, the parent companies registered various Côte d’Or and Toblerone logos in Canada as copyrighted artistic works and granted Kraft a exclusive licences. Kraft then demanded that Euro cease and desist distribution of any product to which the copyrighted works were affixed. When Euro refused, Kraft brought an action against Euro alleging that it had engaged in secondary infringement under s. 27(2) of the Copyright Act by importing copies of the copyrighted works into Canada for sale or distribution. There was no reliance on trademark rights.

At trial, Kraft was awarded $300,000 in damages and Euro was restrained from selling, distributing, exposing or offering for sale any copies of the copyrighted logos. Euro was also ordered to render the product non-infringing. Kraft’s motion for reconsideration was refused. The Federal Court of Appeal refused an appeal on the merits, but referred the matter of damages back to the trial judge. On hearing further submissions, the trial judge confirmed his original award. Euro appealed to the Supreme Court of Canada, which allowed the appeal with costs. Rothstein J. wrote the majority reasons, concurred in by Binnie and Deschamps JJ., with separate concurring reasons written by Fish J. and by Bastarache J., though the latter together with LeBel and Charron JJ. only concurring in the result. McLachlin C.J. and Abella J. dissented.

Here is Howard's quick analysis of this landmark decision.

1. The main judgment by Rothstein, J. (+ Binnie & Deschamps) is based upon highly technical arguments we put forward on the "hypothetical maker" doctrine, and the nature of exclusive licenses. These reasons highlight very important differences between the rights of assignees and exclusive licensees. Although some companies and their counsel may now look to use assignments as a basis to block parallel imports of goods not themselves protected by copyright, they would do well to remember why this has not been done much if at all in the past. They will need to think through the practical tax and loss of control issues, and look carefully at the reasoning of Justices Fish, Bastarache, LeBel and Charron - which suggest that even an assignee may have great difficulty in using copyright law to block parallel imports where the copyright element in question is only "incidental" to the real transaction. An intercorporate assignment may be disregarded for purposes of blocking trade in legitimate articles, and an arms length assignment means just that - an assignment. Who is going to sell the artwork in their crown jewels?

2. Fish, J. agrees with the foregoing and notes the purely nominal consideration for the intercorporate transaction and says in admitted obiter dicta that he has "grave doubts" about using IP law as "an instrument of trade control not contemplated by the Copyright Act."

3. Bastarache, J. (with LeBel and Charron, JJ.) looked at the "incidental" aspect of the work in question and that the Act was not meant to stop parallel imports where the copyright interest is merely incidental to the consumer good in question. This is not consistent with the "legitimate economic interest" of the owner or in turn the exclusive licensee. These Justices also leave the door open to application of the copyright misuse doctrine, which was unnecessary to consider in this instance and would be "best left for another day."

4. Abella, J. (with McLachlin, C.J.) basically said that the transaction was caught by the literal language of the legislation and disagreed with any judicially created limit on this meaning. Her reasoning on exclusive licenses, in particular. appears to be quite different from that of Rothstein, J.

BOTTOM LINE:

This is a major victory for those who favour free trade and real competition. The core reasoning turns mainly on the hypothetical maker doctrine and the rights (or lack thereof) of exclusive licensees.

The additional theory of "incidental" work or use and "legitimate economic interest" could be helpful in any borderline situations that may arise in the future. These theories could certainly lead to beneficial policy results in other contexts as well.

Contrary to some early analyses that are being offered, there is no magic bullet available to steer through the different judgments here to achieve - for example through an assignment - what cannot be done through exclusive licenses. Such as strategy would likely be unsound for business reasons in cases involving consumer goods not themselves protected by copyright. And the Court would likely see right through it.

The academics will have a field day with this - trying to parse the differences between the judges and in turn with previous jurisprudence from this and other high courts.

Bloomberg has a business oriented article that cuts to the chase....

There are clearly still going to be many questions ahead on the issue of grey (gray as the Americans say) marketing and parallel imports.

However, the victory today is clearly on the side of those who believe in free trade, real competition and what I argued to be a correct reading of the current Canadian Copyright Act.

I acted in this instance for the intervener, Retail Council of Canada - which supported the successful appellant and argued in favour of free trade and a competitive marketplace, where copyright law cannot be used as an artificial "strategy" to "thwart" importation of genuine products other than through an exclusive distributor's own distribution channel. However, the above views are my own.

[For more of Howard's views and observations about this case, please go to Howard's blog "Excess Copyright".]

Howard Knopf

Back to top

Please Do Not Amend

In Sun World International Inc. v. Parmalat Dairy & Bakery Inc. (2007 FC 641), Parmalat Dairy & Bakery, which sells cheese under the BLACK DIAMOND mark, was successful in its opposition against Sun World International's application for the same mark in association with plums. Sun World appealed the decision to the Federal Court.

In the Federal Court application, motivated by the Supreme Court of Canada's decision in Veuve Clicquot, Parmalat moved to amend its Statement of Opposition to add Section 22 of the Trademarks Act (depreciation of good will) as a ground of opposition.

The Federal Court ruled that a Statement of Opposition can only be filed at the Canadian Trade-marks Office for the purposes of an opposition proceeding. The Federal Court therefore has no jurisdiction to permit amendment to the Statement of Opposition. The Court finds no authority to substitute its discretion for that of the Registrar with regard to amending the Statement of Opposition. The Court did not address whether Section 22, depreciation of good will, is a proper ground of opposition.

Joseph Ulvr

Back to top

Supreme Court - Evergreen No More?

AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49. Astra, developed and sold omeprazole under the brand name Losec 20 for use in the treatment of acidic stomach conditions from 1989 until 1996, when Astra decided to remove it from the market and replace it with another formulation. Astra's patent for omeprazole then expired in 1999. In 2002, Astra obtained and registered with the Minster of Health two additional patents associated with Losec 20, but did not incorporate this new technology into any of its products.
In 1993, Apotex filed for a NOC for its generic version of omeprazole, comparing its product to Astra's 1989 version of Losec 20.
The Minister determined that Apotex was not required to address the after-issued patents and granted Apotex the NOC in 2004. On judicial review, the motions judge upheld the Minister's decision, however, the Federal Court of Appeal overturned this judgment and quashed Apotex's NOC.
The Supreme Court of Canada unanimously allowed the appeal. In its view, since Astra never incorporated the new technology into its product, and never sold the drug in Canada, it could not be used as a comparator drug by Apotex, and therefor Apotex was not required to address the newly registered patents in its NOC application.
According to the Supreme Court, the decision of the Federal Court of Appeal would reward evergreening even if the generic manufacturer (and thus the public) does not thereby derive any benefit from the subsequently listed patents. The generic manufacturer is only required to address the cluster of patents listed against submissions relevant to the NOC that gave rise to the comparator drug, in this case the 1989 version of Losec 20.
Only if AstraZeneca had brought to market a Losec 20 product pursuant to the later NOCs, and only if Apotex had made reference to that modified product for the purpose of demonstrating bioequivalence, would Apotex have been required to address the 037 and 470 patents.
Barry Hutsel

Back to top

The Supremes on Famous Trade-marks in Canada

The Supreme Court of Canada recently issued two brilliant decisions dismissing two appeals that would have - if successful - taken "famous mark" protection in Canada to a level even beyond what the big American trade-mark owners have enjoyed in their own country under the badge of what they call "anti-dilution". Readers will recall that Victoria's Secret lost a case in the US Supreme Court three years ago against an adult novelty store named Victor's Little Secret that sold "tawdry merchandise".
One appeal involved the attempt by MATTEL - owner of the BARBIE trade-mark to stop a Montreal BBQ Restaurant from calling itself BARBIE'S. The other involved an attempt by the French high end champagne maker VEUVE-CLICQUOT to stop a Montreal clothing shop chain from calling itself CLIQUOT.
The judgments were released together and were both written by Justice Ian Binnie. Although they involved different facts and legal issues, there are certain obvious common elements - the most important being the ambit of protection afforded to what are regarded as "famous" trade-marks. The Court has said that the ambit is not unlimited. BARBIE may cover dolls and perhaps more but it does not extend to restaurant services and likewise CLIQUOT may cover champagne and maybe more, but not women's clothes.
The result in no surprise to Canadian intellectual property lawyers. However, Justice Binnie, in his characteristic manner, clearly and constructively sets straight decades of sometimes confusing and even apparently contradicting case and statutory law that has left practitioners and business people perplexed. Here is my quick take on the two very important rulings:
• The fact that a trade-mark is famous is a factor - but not by any means determinative - that there can be a likelihood of confusion or deprecation of good will
• there must be real evidence of a likelihood of confusion or deprecation of good will - not just speculation - and the absence of evidence of actual confusion is relevant and may even lead to an "adverse inference". In other words, there's got to be real evidence of a likelihood of confusion - and preferably of actual confusion - in order to succeed
• confusion is assessed in the mind of the "The Casual Consumer Somewhat in a Hurry" and such consumer is to be given " a certain amount of credit" and not regarded as "completely devoid of intelligence or of normal powers of recollection or are totally unaware or uninformed as to what goes on around them."
• the farther apart or more "remote" the wares and services in question are, the safer it will be for the less famous party
• And lest anyone forget, "Unlike other forms of intellectual property, the gravamen of trade-mark entitlement is actual use. By contrast, a Canadian inventor is entitled to his or her patent even if no commercial use of it is made. A playwright retains copyright even if the play remains unperformed. But in trade-marks the watchword is "use it or lose it".
Justice Binnie has also provided a wonderful guide to trade-mark lawyers in terms of what they will need in evidence in future cases and on the use of surveys and how important it is to ask the right questions in these surveys.
[Editor: reprinted with the permission of Mr. Howard Knopf from his Weblog titled " Excess Copyright"]
Howard Knopf

Back to top

Cross-Canada v. Hyundai

Cross-Canada Auto Body Supply (Windsor) Ltd. et al. v. Hyundai Auto Canada (2006) FCA 133
In a trade-mark expungement proceeding, all of Cross-Canada's evidence consisted of substantive opinion evidence in the form of affidavits sworn by articling students and other employees of its counsel in the case. On a Motion by the respondent, the Federal Court ordered that Cross-Canada would have to engage another firm to represent it at the Hearing of the case. That decision was based on Rule 82 of the Federal Court Rules. Cross-Canada appealed that Order to the Federal Court of Appeal. A panel of the Federal Court of Appeal sustained the Federal Court judge's Order and took an even stronger position. The evidence given by the counsel's employees involved subtantive investigations and opinions, the Court held that such evidence should only be tendered by objective non-employees. Introducing such evidence by employees of the law firm will result in the evidence being granted lesser weight, if it is admissible at all, and the client should not be subjected to such a risk unless it is clearly necessary. The Court cited favorably the circumstances and conclusions set out in the decision of the Ontario Divisional Court in Essa (Township) v. Guergis; Membery v. Hill, (1993) 52 C.P.R. (3d) 372.
The Court basically held that it is improper for a solicitor to compromise his independence by acting in a proceeding in which a member of his firm has given affidavit evidence on a point of substance. In view of that fact, the Federal Court of Appeal was unwilling to interfere with the Order granted by the Federal Court, and dismissed the Appeal with costs.
N.B. The crux of the decision seems to be that the employees were providing contentious substantive evidence. The Court might very well take a different position in reference to, for example, an employee going out and purchasing goods which are freely available in the market, or simply downloading without further comment materials which can be found on the Internet.
Adele Finlayson

Back to top

Stay Pending Appeal

Remo Imports Ltd. v. Jaguar Canada Ltd. (2006 FC 188)T-1473-91 Date: 2006-02-13
Remo had sued Jaguar for trademark infringement and lost. The Court also ordered that Remo's trademark registrations be expunged. Remo was now seeking an order for a stay of the judgment pending its appeal.
The Court ordered the stay stating that Remo had satisfied the three part test: 1) serious issue; 2) irreparable harm; and 3) balance of convenience.
Regarding the issue of irreparable harm, the Court stated that Jaguar was oversimplifying how easy it would be for Remo to adapt to not being allowed to use the JAGUAR trademark. The relationship Remo has with its clients could be permanently tarnished if a stay is not ordered. Even though Remo's business may not go under if a stay is not granted, ceasing to use the trademark pending the appeal would cause significant damage to the point of causing irreparable harm.
The Court ordered that Remo deposit 20% of its gross sales value of all JAGUAR branded products, with counsel for Jaguar, to be held in trust pending resolution of the appeal. The Court also ordered Remo to deliver to counsel for Jaguar the sum of $100,000.00 in trust as security for costs of the appeal.
Barry Hutsel

Back to top

NOT Authorizing Copyright Infringement

COLUMBIA PICTURES INDUSTRIES INC. ET AL. v. SERGE GAUDREAULT
In an appeal to the Federal Court of Appeal of the dismissal by Mr. Justice Hugessen the Federal Court of a Summary Judgment Motion by the Plaintiffs, the Court declined to reverse and also examined the relationship between offences under the Radio Communications Act and copyright infringement.
The Defendant / Respondent, was arrested and charged for selling unauthorized decoders which enable purchasers to view encrypted material without having to pay the system operator's fee for the material. He was charged under the Radio Communications Act, pleaded guilty and was fined $5,000. In reliance on Section 18 of the Act, which permits persons who have an interest in the content of subscription programming signals by virtue of copyright ownership to commence a civil action to recover damages caused by a breach of certain provisions of the Act, the Plaintiffs commenced an action against Mr. Gaudreault based on the Radio Communications Act and also alleged copyright infringement. As soon as the Defendant filed his Defence, the Plaintiffs brought a Motion for Summary Judgment relying on his guilty plea in the proceedings under the Radio Communications Act to found both their statutory and infringement claims.
The Plaintiffs filed three affidavits which established that the Defendant had entered a guilty plea to offenses under the Radio Communications Act and that he had sold unauthorized decoders .In response to that evidence, Mr. Gaudreault filed his own Affidavit in which he deposed that he had pled guilty to these federal statutory offences in order to avoid the costs of a trial. His affidavit further indicated that he gave each purchaser of his decoders a notice which stated "Important Notice - the use of this device is illegal if the required fees are not paid". In this regard, he relied on the decision of the Quebec Superior Court in The Queen v. Langlais.
Mr. Justice Hugessen found the Plaintiff's evidence far too general, and noted that Mr. Gaudreault's statement in his Affidavit was sufficient to constitute evidence to the contrary within the meaning of s. 18(3) of the Radio Communications Act so that the Appellants could not rely on his guilty plea. As such, there was no evidence to establish that Mr. Gaudreault had committed the acts alleged by the Appellants, and the Motion for summary judgement was dismissed. The Federal Court of Appeal were in agreement and expressed particular concern related to the fact that there was no clear evidence as to the exact offenses which were the subject of Mr. Gaudreault's guilty plea.
Turning to the claim under the Copyright Act, the Appellants claimed that Mr. Gaudreault had infringed their copyright by authorising the infringement of others. The Court held that to succeed, the Appellants had to show that their rights had been infringed and that Mr. Gaudreault had authorised that infringement.
The Court referred to and interpreted s. 3(1) and 27 of the Act. The Court held that the Appellants were alleging an interference with their authorised arrangements to reproduce and communicate their copyrighted works to the public by telecommunications. However, the users of unauthorised decoders are neither transmitting nor reproducing copyrighted material without the consent of the copyright owner. The Court basically found nothing in the Copyright Act to ground a finding that an unauthorized decoding of encrypted signals is an act of infringement. The Court distinguished if not overturned the decision of the Federal Court in Columbia Pictures v. Frankel. The right granted in the e Copyright Act is the right to broadcast, not the right to receive a broadcast signal.
The Court further stated that the fact that unauthorized decoding is prohibited under s. 9 of the Radio Communications Act does not make it an act of infringement under the Copyright Act. As such, since there was not evidence of primary infringement, there can be no authorizing of infringement, and thus the Appellants' claim in copyright fails.
The Court cited the Supreme Court of Canada in the Law Society case to argue that a person does not authorise infringement by authorising the mere use of equipment that could be used to infringe copyright. On that basis, the Court declined to grant Summary Judgment and held that the Appellants' claim in copyright is not well-founded.
Adele Finlayson

Back to top

MAXImum Confusion - January 2006

Provigo Distribution Inc. v. Max Mara Fashion Group Srl (2005 FC 1550) T-2030-04 Date: 2005-11-17.

This was an appeal of a decision of the Trade-marks Opposition Board which found that there was a likelihood of confusion between the Applicant's applied-for trade-mark MAXI & CIE and the Respondent's registered trade-mark MAX & CO. with respect to some services.

Respondent's mark MAX & CO. was registered for a wide range of clothing. Applicant's mark MAXI & CIE (CIE is the French equivalent to CO.) was for services inherent to or incidental to the operation of a retail department businesses, a computer centre and retail optical store and opticians' and optometrists' services.

The Court overruled the Opposition Board, stating that the Board failed to take into consideration all the factors when deciding that there was a likelihood of confusion between the marks. An overlap can be found between the wares of one party and the services of another, especially when the wares associated with one mark could be sold in the retail stores associated with the other mark. But the mere fact that the wares and services of the two parties overlap is not sufficient, in and of itself, to establish a likelihood of confusion. Here, the Respondent offers high end women's fashion for wealthy customers, whereas the Applicant's stores target families looking for low prices and consumers more interested by good deals than by exclusive products. It is highly unlikely that an average consumer, having a vague or imperfect recollection of the Respondent's trade mark, would be led to believe that the wares and services associated with the Applicant's trade mark are provided by the Respondent.

The fact that Applicant's mark is for services only, and Respondent's mark is for wares only, also reduces the likelihood of confusion.

Back to top

Grey Market Chocolate - January 2006

Euro Excellence v. Kraft Canada (2005 CAF 427).

The Federal Court of Appeal recently confirmed that Euro Excellence could not sell grey market TOBLERONE and COTE D'OR chocolate bars in Canada unless they first covered up the original packaging.

Kraft Canada registered copyright in artwork that appeared on the chocolate bar wrappers, and the Federal Court determined that the sale of the chocolate bars by Euro Excellence's was copyright infringement. The Federal Court granted an injunction requiring Euro Excellence to cover up the art work on the wrapping, and also awarded damages in the amount of $300,000.

On appeal, the finding of infringement under s.27(2) of the Copyright Act (regarding sale in Canada of copies made outside of Canada) was confirmed, but the matter was sent back to the lower Court for clarification on the issue of damages.

Back to top

Cachet is not enough - January 2006

BMW Canada Inc. v. Nissan Canada Inc. (2005 FC 1708).

Background

BMW started an action against Nissan for passing off, infringement and depreciation of goodwill in its M3, M5 and M & Design trade-marks. Since 1978, BMW invested over $300 million worldwide in marketing for the "M" Brand. BMW wants to stop Nissan from piggybacking on its carefully created cachet.

Nissan owns registered trade-marks for M35 and M45, to which BMW has no objection. However, BMW believes Nissan's advertisements, such as "the M is coming", featuring a giant 'M' and small Nissan logo, constitute passing off and/or infringement.

Motion

BMW moved for an interlocutory injunction restraining Nissan from using the "M" and "M6" marks in association with Nissan automobiles. To be successful, BMW must show that it will suffer irreparable harm if the injunction is not granted. BMW argues that the cachet of its "M" brand will suffer if it becomes associated with the inferior and modestly priced Nissan Infiniti, but this deterioration of cachet cannot be measured since there was no measurement of the cachet prior to Nissan's advertising, and any measurement done now would reflect the deterioration that has already occurred.

Decision

The Court decided that irreparable damages have to be established by clear, and not speculative, evidence. BMW presented no evidence of loss of cachet, no survey evidence, and no evidence that BMW sales had been harmed. In this case the evidence is not even speculative. BMW firmly believes that its brand is being hurt but has no evidence to support that belief.

Thus, the interlocutory injunction is refused. However, the Court does recognize how important the brand is to BMW, and orders that the case be put under case management with an expedited schedule.

Back to top

Public Authority Limited to Canada - December 2005

In Canada Post Corporation v. United States Postal Service (2005 FC 1630) T-64-02 Date: 2005-11-30, Canada Post applied for judicial review of decisions of the Registrar of Trade-marks to give public notice of the adoption and use of 13 Official Marks by the United States Postal Service ("USPS"), including such marks as EXPRESS MAIL, FIRST-CLASS MAIL, and STANDARD A MAIL. The issue was whether the USPS must be and was a public authority in Canada.

The matter came down to one of statutory interpretation. The English version of subparagraph 9(1)(n)(iii) of the Trade-marks Act states that in order for a mark to be a proper Official Mark, it must have been "adopted and used by any public authority, in Canada as an official mark for wares or services".

In the French version of the same provision it states that the mark in question must have been "adopté et employé par une autorité publique au Canada comme marque officielle pour des marchandises ou services".

Thus, in the English version, there is a comma after the phrase "public authority". This results in the section being somewhat ambiguous, as it is not entirely clear as to whether the words "in Canada" are intended to modify the words "adopted and used" or "by any public authority".

Since bilingual legislation is to be interpreted by applying the shared or common meaning rule, the Court ruled that the narrower interpretation will prevail and therefore the owner of an Official Mark must be a public authority "in Canada". The Court rejected an argument based on application of the Paris Convention, stating that the Paris Convention does not apply to Official Marks, only "patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin...".

Finally the Court ruled that the USPS was not a public authority in Canada since it is not subject to the will of the electorate in Canada. Therefore, all 13 Official Marks were cancelled.

Back to top

Good Vibrations - December 2005

In Vibe Ventures LLC v. 3681441 Canada Inc. ((2005 FC 1650) T-2089-04 Date: 2005-12-05, Vibe Ventures owned a registration for the word mark VIBE, for use in association with a magazine targeted to kids and young adults in the 18-24 age group, and used the mark in the magazine in the following script:

The Respondent numbered company owned a registration for VIBE Design for use in association with clothing, included blue jeans. It's target market was the same as the magazine.

Vibe Ventures applied to expunge the registration for VIBE Design owned by the numbered company. Since Vibe Ventures had used its unregistered VIBE Design trademark prior to the application filed by the numbered company, the only issue in dispute was whether the Vibe Ventures VIBE Design mark for a magazine was confusing with the VIBE Design mark owned by the numbered company for clothing.

The Court ruled that although the word mark VIBE used by the magazine was not confusing with the VIBE Design used by the numbered company for clothing, the VIBE Design trade-mark is identical in appearance with Vibe Magazine's unregistered trade-mark script, and it is this which creates confusion in the market place, given the target audience - kids and young adults under 24. The Court stated that " ... one cannot use an identical script when targeting a specific clientele, even though one party's wares are sold at newsstands and the other's in stores."

Back to top

Does untrue material allegation in Patent Petition require willfullness? - December 2005

In Zambon Group S.P.A. v. Teva Pharmaceutical Industries Ltd. (2005 FC 1585) T-213-04 Date: 2005-11-23, Teva counterclaimed Apotex Inc. for infringement of one of its patents. In its defence, Apotex alleges that the patent is void since the petition contains a material allegation that is untrue. In general, Apotex claims that the representation in the Petition that the persons named therein were the inventors and that there was an invention, is misleading because the purported invention was, to the knowledge of the petitioners, disclosed in the prior art and was offered for sale by Teva prior to the relevant date at issue.

Teva argues that the defense is incapable of success because Apotex failed to disclose the essential element of wilfulness required under subsection 53(1) of the Act.

Subsections 53(1) and (2) of the Act read:

53. (1) A patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.

(2) Where it appears to a court that the omission or addition referred to in subsection (1) was an involuntary error and it is proved that the patentee is entitled to the remainder of his patent, the court shall render a judgment in accordance with the facts, and shall determine the costs, and the patent shall be held valid for that part of the invention described to which the patentee is so found to be entitled.

The Prothonotary concluded, and the Federal Court Judge agreed, that an argument can be made that the wording of subsection 53(1) does not require wilfulness where the validity of a patent is challenged on the basis of an untrue material allegation in the petition.

The defense will be allowed to go to trial.

Back to top

LEGO Blocked - November 2005

In Kirkbi AG and Lego Canada Inc. v. Ritvik Holdings Inc. (2005 SCC 65), The Supreme Court of Canada unanimously blocked the well-known toy manufacturer LEGO from asserting common law trade-mark rights in the shape of its famous toy bricks.

Originally protected from competition by a series of patents, LEGO’s last Canadian patent expired in 1988. Ritvik, a Montreal toy manufacturer, had begun manufacturing and marketing a line of large-size building blocks in the late 1980's. After the expiry of the last LEGO patent in Canada, Ritvik marketed a line of small bricks, which used the same geometrical pattern of stubs on top coupled with tubes underneath and were identical in size to the LEGO bricks. Over the last decade, Ritvik became a significant global competitor to LEGO.

The SCC, upheld the decisions of both the Federal Court of Appeal and Trial Division, dismissed LEGO’s appeal and held that although trade-marks, registered or not, share common legal attributes and grant exclusive rights to the use of a distinctive designation or guise, a purely functional design cannot be the basis of a trade-mark. The SCC commented that the doctrine of functionality recognizes that trade-marks law is not intended to prevent the competitive use of utilitarian features of products, but that it fulfills a source-distinguishing function. The SCC noted that trade-mark law should not be used to perpetuate monopoly rights enjoyed under now-expired patents.

The Supreme Court also held that passing off also covers negligent or careless misrepresentation, which has indirectly reversed the Ontario Court of Appeal in the Molson v. Oland Breweries Ltd. case, which upheld a lower court finding that misrepresentation required a deliberate strategy on the part of the defendant.

Lastly, the SCC found that section 7(b) of the Trade-marks Act, which creates a civil cause of action essentially codifying the common law tort of passing off, is intra vires Parliament.

To read a more detailed review click - LEGO

Back to top

Invalid Patent Cannot be Infringed - October 2005

In Schlumberger Canada Ltd. v. Trican Well Service Ltd. (2005 FC 1344) T-1007-03 Date: 2005-09-30, the Federal Court refused to grant summary judgment in favour of Schlumberger on the issue of infringement of Canadian Patent No. 2,380,311 by Trican, while at the same time remitting the issue of the validity of its patent to trial. The Court cited Libbey-Owens-Ford Glass Co. v. Ford Motor Co. of Canada Ltd. (1968), 57 C.P.R. 72 (Ex. Ct.), in pointing out that it is surely trite that an invalid patent cannot be infringed.

Back to top

FCA Clarifies Material Date for Considering Trademark Infringement - August 2005

The Federal Court of Appeal, in the recent decision of Alticor Inc. v. Nutravite Pharaceuticals Inc. (2005 FCA 269), has determined that the material date for finding whether there is infringement of a trademark under section 20 of the Trademarks Act is, in most circumstances, the hearing date. The court indicated that this provides consistency with paragraph 12(1)(d) of the Act, where the material date for finding confusion has been determined to be the hearing date.

The court, however, indicated that exceptions to the above material date could exist, and that there is no fixed time for confusion to be established. Other, more appropriate dates could exist for establishing infringement under section 20.

The court, in the same decision, further clarified that little weight should be given to Trademark Opposition Board decisions when considering infringement, as a different determination is being made with a different burden of proof.

Back to top

Safeguards Required for Anton Pillar Orders - August 2005

In the recent Ontario decision of Ridgewood Electric Ltd. (1990) v. Robbie (2005), 74 O.R. (3d) 514 (S.C.J.), Justice Corbett equated the execution of an Anton Pillar Order on an individual’s home with the execution of a search warrant, and indicated that certain safeguards need to be implemented when using this type of order.

An Anton Pillar Order is a remedy in which an individual or business is instructed by the court to allow Plaintiffs’ representatives to search its premises. It is granted in civil actions without the knowledge of the defendant where there is a strong prima facie case, very serious potential harm could occur if the order is not granted, the defendant has documents or materials to be seized, and a real danger exists that certain evidence may be destroyed.

Justice Corbett indicated that when executing the Anton Pillar order, safeguards including prior judicial authorization, execution by a peace officer properly trained in the execution of search warrants, safe retention of materials seized and careful judicial scrutiny of the execution of the order to balance the interests of both sides should be implemented.

Back to top

Between about 70C and 110C is not between about 115C to 120C - August 2005

Abbott Laboratories v. Canada (Minister of Health) (2005 FC 1093) T-1656-03, 2005-08-10, was an application by Abbott Laboratories for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Ratiopharm for Clarithromycin. Abbott asserted a patent which claimed a step that required drying at “a temperature of between about 70C and 110C". Ratiopharm’s process dried the material at 115C to 120C under a vacuum of not less than 550 mm Hg up to 12 hours. Despite expert witness testimony which stated that “about” means within 5%, and that typical oven temperatures varied by 10C, the Court decided that Ratiopharm did not infringe Abbott’s patent.

Back to top

JAVACAFÉ Not Descriptive of Coffee - August 2005

The Federal Court recently confirmed in Shell Canada Ltd. v. P.T. Sari Incofood Corp. that the mark JAVACAFÉ could be registered for food products including coffee. The Court agreed with the Opposition Board’s finding that while both "java" and "café" are words meaning "coffee", the mark JAVACAFÉ as a whole is not clearly descriptive of coffee. Further, because the mark was not clearly descriptive, it was not non-distinctive.

Back to top

Amended Trademark Supports Registration - July 2005

In Marks & Clerk v. Sparkles Photo Ltd (2005 FC 1012) the Federal Court dismissed an appeal of the Registrar’s decision to maintain a registration for the trademark NATURE'S CHOICE & Design, even though the owner had made significant changes to the mark’s design elements.

The following mark had been registered by the owner:

The following is the mark that was being used:

The owner claimed that amendments to the mark were made at the request of the Ministry of Agriculture who advised that it was against the law to use the maple leaf or the words “Nature's Choice” without the word “Co.”.

In refusing the appeal, the Court gave significant deference to the decision of the Registrar and stated the reasons given by the hearing officer in support of the decision were reasonable.

Back to top

Settlement Offers Must be Renewed on Appeal - July 2005

In WIC TV Amalco Inc. v. ITV Technologies Inc., a dispute over the trade-mark ITV, the Federal Court of Appeal found that the respondent, ITV, was not entitled to double costs for the appeal. ITV had made an offer before trial that was never accepted by WIC, and was awarded double costs for the trial on that basis. But when WIC appealed, ITV did not renew the settlement offer (possibly because the terms of the original offer were moot at that point). Therefore, while ITV could recover costs for WIC's unsuccessful appeal, this was not a case where double costs would be appropriate.

Back to top

Reference to Chemical Formula in Claim Not a Reference to Process - July 2005

In Hoffmann-Laroche Ltd. v. Mayne Pharma (Canada) Inc. (2005 FC 814), the Federal Court decided that a claim that referred to a product, by reference to a chemical formula that appeared in a prior claim, did not include the limitations for the process appearing in that other claim. The subject claim was therefore a claim for the product per se. Therefore Mayne Pharma’s allegation that its product, cefriaxone, which it claims was not produced by the same process and therefore did not infringe the patent licensed by Hoffmann-Laroche’s, was not justified, and the Court ordered that a Notice of Compliance not be issued to Mayne Pharma for its cefriaxone product.

Back to top

Supreme Court of Canada to Decide LEGO Blocks Case - May 2005

The Supreme Court of Canada is poised to render the final word on whether items with functional elements can be protected by trade-mark law and whether such trade-marks are the proper subject matter for claims of passing-off.

In Kirkbi AG and Lego Canada Inc. v. Ritvik Holdings Inc./Gestions Ritvik Inc. 2002 FCT 585; 2003 FCA 297, Kirkbi asserts unregistered trade-mark rights in the upper surface of its LEGO toy building blocks. The blocks have a pattern of raised studs used to connect one block to the under side of a second block (LEGO Indicia). Ritvik sells MICRO building blocks which can be used interchangeably with LEGO blocks. Kirkbi sues for passing off under s.7(b) of the Trade-Marks Act.

The Federal Court finds that a trademark which is primarily functional in nature cannot sustain an action for passing off under the Trade-Marks Act. The conclusion is interesting in light of the Court's findings (in obiter dicta) that Kirkbi had goodwill derived in whole or in part from the LEGO Indicia, that there was a likelihood of confusion and actual confusion in the Canadian market place, and damages. In other words, there was passing off.

In a 2:1 decision, the majority of the Federal Court of Appeal upholds the trial judge’s decision writing: “the doctrine of functionality applies in this case, and that the LEGO Indicia in question is invalid as a “trademark” because it is primarily functional.” The Court finds that Kirkbi is attempting to extend its patent monopoly on the blocks through the guise of a trademark. The dissenting opinion is that all elements of the passing-off test were met and the jurisprudence dealing with registered trademarks is not useful in considering the position of unregistered trademarks. It does not compel the conclusion that a functional distinguishing guise, that is unregistered, cannot support an action under s. 7(b).

Leave to appeal to the Supreme Court of Canada has been granted. The Supreme Court has permitted Ritvik to challenge the constitutional validity of s. 7(b) of the Trade-Marks Act, this being a new issue not previously before the lower Courts. If s. 7(b) is declared unconstitutional, the Federal Court will have limited jurisdiction to hear passing off claims.

Back to top

Barbie Doll takes on Barbie's BBQ Restaurant at Supreme Court - May 2005

The Supreme Court of Canada has agreed to hear an appeal of a decision to allow the trade-mark registration of BARBIE'S for restaurant and catering services. Mattel, the owner of the famous Barbie trade-mark for dolls lost its opposition and the appeals to the Federal Court and now takes its case to the Supreme Court of Canada.

Lawyers for Mattel argue that BARBIE'S the restaurant is likely to cause consumers to be confused with Barbie dolls. The Montreal restaurant owner contends the name BARBIE'S will make people think of ribs and not dolls. The name BARBIE'S is Australian slang for barbeque.

The law in Canada is that no matter how well known a mark is it cannot be used to create a connection that does not exist. Confusion is less likely when the wares are markedly different, even when the opponent's mark is famous. In previous cases, the trade-mark Pink Panther was permitted to be registered for beauty products even though it was a famous mark already registered by United Artists' Pictures Inc. for motion picture films. Lexus was permitted to be registered for fruit juices even though Lexus was already a famous mark registered by Toyota for cars.

The Barbie case will be heard in October and will be precedent setting on the issue of whether or not famous marks should be given broad protection under the Trade-marks Act.

Back to top

New Trade-marks Office Practice For Composite Marks - February 2005

A recent Trade-marks Office Practice Notice confirms the trend to rely more heavily on the “sound” of a mark in the consideration of descriptiveness as opposed to “appearance.” The Practice Notice comes as a response to an opposition by Best Western to an application for BEST CANADIAN MOTOR INNS & Design for hotel and restaurant services (see image below). The Registrar, and the Federal Court, found that the mark consisted of dominant descriptive words and the visual elements were insufficient to overcome the descriptiveness. The mark was refused registration.

In light of this decision, the Canadian Trade-marks Office has implemented changes to its Examination process for composite marks (those having both design and word components).

Foremostly, a composite mark is no longer registrable if it contains word elements that are clearly descriptive or deceptively misdescriptive of the wares or services with which is it proposed to be used where the words are the dominant feature of the mark. The Trade-marks Office has decreed that “dominant” means: “where the design element of the mark does not stimulate visual interest”; “if the design elements are mere visual embellishments of the letters comprising the words.” The Trade-marks Office will also consider “the size of the words and the size of the design.”

Only one element of the trade-mark may be dominant. Thus, where the Registrar has doubt concerning whether the word element or the design element is the dominant feature, the Registrar cannot deny registration on the basis of descriptiveness when sounded.

Back to top

The First to File at the Trade-marks Office Wins! - May 10, 2005

The Federal Court of Appeal in Attorney-General of Canada v. Effigi Inc. (May 10, 2005) has made Canada a “first to file” country for trade-mark applications. Now, where there are co-pending applications for confusing marks, the one with the earlier filing date should be approved for advertisement even if the other application claims an earlier date of first use. This is the complete opposite of many years of Trade-marks Office practice that favoured applications with prior use claims over those that were filed first.

As a result of the Effigi decision, it is important to advise applicants to file for their Trade-marks as soon as possible. If there is a confusing, co-pending application that has been filed first, prior use will need to be established by bringing opposition proceedings - an expensive way to have to establish entitlement to registration.

The Intellectual Property Institute of Canada (IPIC) has issued comments on the Effigi decision and seemingly holds that for the purpose of considering the filing date of applications claiming upon convention priority, s. 34 of the Act deems the date of filing of the foreign application to be the date of filing of the application in Canada. However, some practitioners are concerned that because of Effigi, an application that was filed first will trump applications based on convention priority as well as those based on prior use.

The Trade-marks Office has yet to issue a Practice Notice as to how they will implement these recent changes in the law in Examination procedures. It also remains to be seen how the Trade-marks Office will treat applications that are currently on file, but not yet advertised. An official from the Trade-marks Office has advised that trade-mark applications that have been advertised prior to the Effigi decision will not be affected.

Back to top

Europe Refuses to Expand Patent Protection to Software Patents - July 2005

The European Parliament, by an overwhelming majority, voted on July 6, 2005 to reject a proposal that would have expanded patent protection in Europe to include software patents. The proposal, which was encouraged by such large European companies as Siemens and Nokia, would have allowed a company or an individual who invented an apparatus that exploited software to protect the software component of the invention though patents.

A vote in favour of the proposal would have brought the European patent system closer in line with the United States patent system. Supporters of the proposal had argued this was necessary to keep research and manufacturing of technology products in Europe. The defeat was seen as a missed opportunity by these supporters.

Back to top