In This Issue

1. Apples To Oranges Comparative Advertising
2. Sounding Trade Marks
3. When The Sweat Of Your Brow Is Not Enough
4. Cowboys and Indians

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Apples To Oranges Comparative Advertising

In a recent Australian case, the Federal Court of Australia refused to subject a comparative television advertisement to a level of scrutiny any different than that applied to an ordinary advertisement.

Duracell ran a television commercial that consisted of a cartoon story about bunnies in a race, which was won by a bunny powered by a Duracell battery. The race took place over a rugged and arid landscape. One bunny was powered by a Duracell battery with the brand name visible on its back. The other bunny was powered by a black battery with no brand name on it. After the start of the race the Duracell bunny is always in front. On two occasions the exhausted non-Duracell bunny is replaced by a similar runner who emerges from a hiding place along the track.

The voice-over at the end of the commercial says, “While Duracell Alkaline keeps on running, Eveready Super Heavy Duty can’t keep up… with up to three times more power Duracell always beats Eveready Super Heavy Duty.” A superscript stated “Eveready Super Heavy Duty is a cheaper non-alkaline battery.”

In Australia the Eveready Super Heavy Duty battery is considerably cheaper than the Duracell alkaline battery. Duracell’s alkaline battery relies on superior technology to that of the carbon zinc Eveready battery and lasts longer because of this. Eveready sells both alkaline and carbon zinc batteries. While the Energizer battery is the highest selling carbon zinc battery in Australia , it is only the fifth most powerful in Energizer’s product range.

The judge who initially heard the case found that Duracell had engaged in misleading advertising. He said that the advertisement was misleading because of the omission of any reference to Energizer’s alkaline batteries, which have performance characteristics similar to Duracell’s alkaline batteries.

On appeal the court was convinced that viewers of the commercial would understand that the comparison was being made between the Duracell alkaline battery and the Eveready Super Heavy Duty battery since reference was made to this specific Eveready battery three times in the audio and in the superscript.

The commercial did not make any representations concerning the respective brands of the parties or the products which made up their respective product lines. It did no more than represent in graphic terms the power difference between two specified batteries which were in direct competition in the marketplace. In the absence of a representation that the Eveready Super Heavy Duty battery is the only competitive Eveready product, the court concluded that it was not necessary to make disclosure or reference to other competitive alkaline products.

The court was not prepared to accept that as a general proposition comparative advertising should be subjected to increased scrutiny over that given to regular advertising. Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. It encourages product improvement and innovation and can lead to lower prices in the marketplace.

In response to the argument that comparative advertising should be restricted to similar products, the court stated that so long as the factual assertions contained in the advertisement were true and not misleading half-truths, an advertiser could lawfully compare a particular aspect of its product or service with the same aspect of a competitor’s product or service. The advertiser was not obliged to provide information concerning other factors that might influence consumers choosing between the two products. A consumer, having been informed that the Duracell product lasted up to three times longer than the Eveready Super Heavy Duty battery, can make his or her own decision at the point of sale as to whether the extra power of the Duracell product is worth the higher price.

The wording of the Canadian Competition Act is similar to the legislation in Australia and it is quite possible that the same result would be arrived at by a Canadian court.

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Sounding Trade Marks

The Trade-marks Act provides that a trade mark is not registrable if, whether depicted, written or sounded, it is clearly descriptive of the character or quality of the services applied for. A recent decision of the Federal Court found that a trade mark, which when sounded, was clearly descriptive of the character or quality of the services in issue, was not registrable despite the existence of design features.

Best Canadian Motor Inns Ltd. applied to register the following trade mark:

The application was opposed by Best Western International, Inc. on the ground that the trade mark was not registrable for hotel and related services because it was clearly descriptive of the character or quality of those services.

Best Canadian argued before the Trade marks Opposition Board that even if the words “Best Canadian Motor Inns” were clearly descriptive, the mark was still registrable as a result of the other design components. The Board pointed out that the design of the maple leaf had been disclaimed and was not distinctive of any particular trader. Even though lines were used above and below the words “Best Canadian” and these words were presented in a different font and style of lettering than used for the words “Motor Inns”, the mark would be sounded by reference to the dominant words making it up and an average person would sound the mark as “Best Canadian Motor Inns”. As a result, the Board concluded that the mark was clearly descriptive or deceptively misdescriptive, when sounded of the applicant’s services in Canada and not registrable.

Best Canadian appealed to the Federal Court and filed the affidavit of the designer, who said that the presentation of the mark created a strong unified design which established an effective visual identity for Best Canadian. It was argued that if a trade mark contained words and design elements that could not be sounded, it was registrable.

The court concluded that the Act was clear in precluding the registration of a trade mark which, when sounded, was clearly descriptive and the appeal was dismissed.

It is suggested that the result in this case and similar cases should be decided on the basis of the first impression created by the mark in issue. If the substance of the mark is a design the prohibition should not apply. However, if the substance of the mark is a word or words which can be sounded, the mark should be subject to the prohibition.

As a result of this decision, it may become more difficult in the future to obtain trade mark registrations by simply adding design elements to words which are otherwise clearly descriptive of the applied for wares or services.

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When The Sweat Of Your Brow Is Not Enough

The recent decision of the Supreme Court of Canada in CCH Canadian Limited v. The Law Society of Upper Canada clarifies the meaning to be given to the term “original” in the Copyright Act.

The traditional common law position in Canada, Great Britain and Australia has been that to obtain copyright protection, the work must originate from the author in the sense that it was prepared as a result of a substantial degree of skill, industry or experience employed by the author. The application of this test results in a relatively low threshold and does not require that the work be the expression of original thought.

Some judges challenged this approach and emphasized the requirement for creativity based on a number of concepts including the civil law and U.S. case law. They said that the Copyright Act was intended to protect and reward the intellectual effort of the author and that a substantial amount of labour combined with a negligible degree of skill and judgment would not be sufficient. Skill, judgment and labour should be required before a work could be protected under the Copyright Act.

When these issues were presented to the Supreme Court of Canada, the court, like many others before it, adopted a position somewhere between these two extremes. Chief Justice Beverley McLachlin, for a unanimous court, said that for a work to be “original” it must be more than a mere copy of another work. At the same time, it need not be creative in the sense of being novel or unique but must represent an exercise of skill and judgment in the expression of an idea. Skill means in this context the use of an individual’s knowledge, developed aptitude or practiced ability in producing the work. Judgment means the use of one’s capacity for discernment or ability to form an opinion or an evaluation by comparing different possible options in producing the work. The exercise of skill and judgment will necessarily involve intellectual effort. Such an exercise must not be so trivial that it could be characterized as a purely mechanical exercise. For example, any skill and judgment that might be involved in simply changing the font of a work to produce another work would be too trivial to merit copyright protection as an “original” work. While creative works will be by definition “original”, creativity is not required to make a work “original.”

For traditional forms of expression such as novels, sculptures or plays, “originality” is typically not in issue. However, it does matter with respect to copyright protection sought for other types of works including compilations of data. The collection, digitization, verification and arrangement of material making up a compilation typically requires a significant financial investment which the owner of the compilation will wish to see protected. While owners can continue to protect their compilations through the use of encryption technologies, licences and contracts, copyright protection will no longer be available to them in many cases in light of the court’s decision.

Industry Canada and Canadian Heritage, who are jointly responsible for amending the Act, had identified database protection as a long term item for copyright reform. This decision may prompt further scrutiny and analysis in the short term particularly since the European Database Directive does provide protection for compilations, even if copyright protection is not available.

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Cowboys and Indians

A recent decision of the District Court for the District of Columbia concluded that the REDSKINS trade marks of the Washington Redskins should not have been cancelled on the basis that they “may disparage” Native Americans or bring them into contempt or disrepute.

In our summer 1999 newsletter we described the initial decision in this case. It was concluded that the trade mark registrations, which contained the word REDSKINS, should be cancelled. On appeal to the District Court it was concluded that the evidence presented to the U.S. Trade Mark Trial and Appeal Board was not sufficient to determine that at the relevant times the marks in issue disparaged Native Americans. Under the U.S. legislation the determination of whether a mark may be disparaging is made as of the registration date of the mark in issue. There was no evidence to show that the term REDSKINS was a pejorative term when the registrations issued in the 1960s and the 1970s. In addition, the court concluded that the evidence presented considered whether the term REDSKINS was disparaging in isolation rather than in the context of the use of this term as a trade mark for a professional football team. Finally, the court said that the parties attacking the registrations were barred by delay.

Under the Canadian Trade-marks Act no person shall adopt a mark consisting of any scandalous, obscene or immoral word or device. Such a prohibited mark is not registrable. The registration of such mark is invalid if the mark was not registrable at the date of registration. However, the Act does not prescribe a limitation period for bringing an application to expunge a registered trade mark. As a result, with the exception of the conclusion of the U.S. court relating to the timeliness of the attack on the registrations, a similar result could occur here.

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