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The Cassels Brock Report

The Cassels Brock Report - May 2011

Published: 05/25/2011

By Leonard Glickman, Shane Hardy, Bernice Karn, John McKeown

In This Issue

  1. The Distinctiveness of a Trade-mark is Not Static
  2. Online Trade-mark Use
  3. An Ethical Dilemma
  4. Data Security – The Case Against Cloud Computing
  5. Deal or No Deal: Copyright Protection in Television Formats
  6. User Generated Content: Recent Developments in Canada and the US (Article)
  7. The Glamorous World of Trade-marks
  8. Trade-mark Bullies Revisited

The Distinctiveness of a Trade-mark is Not Static

By John McKeown

A recent decision of the Trade-marks Opposition Board shows how the distinctiveness of a trade-mark can change and affect the outcome of an opposition.

Round One 

In January of 1999, Kelly Properties, Inc. filed an application to register the trade-mark KELLY ENGINEERING RESOURCES. The application was based on proposed use of the trade-mark in Canada in association with personal employment services. The applicant disclaimed the words ENGINEERING RESOURCES apart from the trade-mark.

The application was opposed by the Canadian Council of Professional Engineers.

Numerous grounds of opposition were raised but the primary grounds were that:

  1. The alleged trade-mark was clearly descriptive or deceptively misdescriptive of the character or quality of the services in association with which it was proposed to be used or the conditions of or the persons employed in their production;
      
  2. The trade-mark was not distinctive since it was not adapted to distinguish nor does it distinguish the services in association with which it was proposed to be used from the services of others, including engineers with the surname “Kelly” and entities that are lawfully registered to practise engineering in Canada.

The Hearing Officer stated that the issue of whether a mark is clearly descriptive must be considered from the point of view of the average purchaser of the services. The mark must not be dissected into its component elements and carefully analysed but must be considered in its entirety as a matter of first impression. It was concluded that the mark, being a combination of a name and descriptive words was in its entirety not clearly descriptive of the character or the quality of the services. In addition, it was concluded that the mark as a whole was not clearly descriptive of the conditions of the persons employed in the production of the services.

With respect to the non-distinctiveness ground, the hearing officer referred to cases that had established that a trade-mark that consists of a surname and a descriptive term is not distinctive because such a mark as a whole is not adapted to distinguish the services of the applicant from the like services of others bearing the same surname.

Whether KELLY was viewed as a surname or a first name, it was found that the applicant’s mark, being a combination of a name and a non-distinctive term, was not inherently adapted to distinguish the services of the applicant from similar services of others who also bear the name “Kelly”. In addition, the applicant’s evidence did not allow the hearing officer to conclude that the mark had acquired distinctiveness in Canada. As a result the application was dismissed.

Round Two

Undaunted by this adverse decision, the applicant continued to widely use its mark in Canada and subsequently filed a trademark application in June of 2004 for the same mark in association with the same services based on use in Canada since April 1999. The application was opposed a grounds of opposition similar to the grounds in the first opposition.

Both parties filed substantial evidence similar to that filed in the previous opposition but the applicant filed evidence to show that the applied-for mark had been widely used in Canada in association with the applied for services.

As in the case of the initial opposition, the Hearing Officer in this opposition also concluded that the applied-for mark was not clearly descriptive. The Hearing Officer emphasised that the mark related to services that the public would not expect to be provided by engineers and ENGINEERING was not a significant part of the mark.

The material date to determine the non-distinctiveness ground of opposition was the date of the filing of the statement of opposition, which occurred in February of 2005.

The Hearing Officer referred to the evidence filed by the applicant which established that employment services had been provided and advertised in Canada in association with the word KELLY. The evidence also showed that significant sums had been spent on advertising and marketing. As a result it was found that ample evidence had been filed to show that KELLY had acquired distinctiveness such that the mark as a whole functioned to distinguish the services of the applicant from similar services of others. In light of this conclusion the opposition was dismissed and the application allowed.

Comment

The case show that the distinctiveness of a trade-mark can change with time. A mark which is not inherently distinctive may acquire distinctiveness through use. Conversely, a mark which was distinctive can lose its distinctiveness through misuse or mismanagement.  

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Online Trade-mark Use

By John McKeown

A recent decision of a United Kingdom court considered whether the defendant’s use of the plaintiff’s trade-marks on the defendant’s websites, allegedly operating from Florida, constituted “use” of the trade-marks in the United Kingdom. 

The Facts

The plaintiff distributes YELLOW PAGES directories in the UK. It also operates an on-line directory service and a telephone directory service. The plaintiff contended that the defendant had infringed its registered trade-marks and committed acts of passing off. 

The heart of the dispute related to two websites. The defendant did not deny that it used the plaintiff’s trade-marks on its website pages but asserted that the websites were not UK based and not within the jurisdiction of the UK courts. The defendant said they operated and conducted transactions in the United States. The trade-marks in issue were generic in the United States but validly registered in the United Kingdom.

The Approach of the UK Courts

There have been a number of UK cases dealing with this issue which have established the following principles. First, the mere fact that a website can be accessed anywhere in the world does not mean, for trade-mark purposes, that the law should regard trade-marks referenced on the site as being used everywhere in the world. It all depends on the circumstances, particularly the intention of the website owner and what the reader will understand if they access the site. For example, if a fishmonger in a town in England listed wares and prices on a website for local delivery it could not be said that the fishmonger was trying to sell fish to the whole world or even the whole country. A customer from another country who came across the site would readily determine that it was not for them and move on.

Second, the idea of “use” within a geographical area requires some active step in that area on the part of the user that goes beyond providing facilities that enable others to bring a mark into the area. However, if persons in the United Kingdom seek a mark on the Internet in response to direct encouragement or advertisement by the owner of the mark, the result may be different. In such a case the advertisement or the encouragement by itself is likely to be sufficient to establish the necessary use. 

In summary it is clear that placing a mark on the Internet from a location outside the UK can constitute use of that mark in the UK. The Internet is a powerful means of advertising and promoting goods and services within the UK even though the provider of such goods and services is based abroad. 

The fundamental question is whether or not the average consumer of goods or services in issue within the UK would regard the advertisement and the website as being aimed or directed at them. All material circumstances must be considered, including the nature of the goods or services, the appearance of the website, whether it is possible to buy goods or services from the website, whether or not the advertiser has in fact sold goods or services in the UK through the website or otherwise, and any other evidence of the advertiser’s intention.

The Decision

After considering all of the relevant evidence, the Trial Judge concluded that the average consumer of the services in issue within the UK would regard the websites as being directed at them and the plaintiff’s claims for infringement and passing off were allowed.

Comment

To date this particular issue has not yet been considered by a Canadian court. However, the UK approach reflected in this decision has been followed in a number of other countries and will be persuasive in Canada. 

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An Ethical Dilemma

By John McKeown

A recent decision of the Federal Court deals with the ethical dilemma that counsel for the plaintiff found themselves in relating to evidence that had been presented to the Court as part of the plaintiff’s claim.

The Facts

The plaintiff’s action asserted a claim for patent infringement. The defendants, as part of their attack on the validity of the patent in issue, asserted that there had been inequitable conduct by the plaintiff’s predecessors that invalidated the patent. In substance, it was alleged that the Canadian Patent Office was mislead on the issue of prior art because the United States Patent and Trademark Office (“USPTO”) was given deliberately false and misleading evidence by the inventor. The alleged fraud on the USPTO resulted in the Canadian Patent Office being mislead as well.

The defendant asserted that the inventor retained a patent agent in Texas who then raised prior art that was adverse to the plaintiff’s claim. It was suggested that as a result, the inventor went to another patent agent, failed to disclose the prior art that had been disclosed and filed an application without making any disclosure.

At trial the inventor testified that while he had a minor telephone conversation with the first agent, he did not meet with him or provide him with any documents. As a result of unrelated litigation in Texas, the defendant obtained the first agent’s file. This file suggested a different version of the events than that before the Court relating to the nature and extent of the contact between the inventor and the first agent and information disclosed including drawings, notes and other items.

After the trial in the action was concluded and the decision was under reserve, the defendants became aware of the first agent’s file and brought it to the attention of counsel for the plaintiff.

Rules of Professional Conduct

The Rules of Professional Conduct provide that when acting as an advocate, a lawyer must represent the client resolutely and honourably within the limits of the law, while treating the Court with candour, fairness, courtesy, and respect. In addition, when acting as an advocate, a lawyer must not  knowingly assist or permit the client to do anything that the lawyer considers to be dishonest or dishonourable. 

Rule 4.01(5) of the Rules provides that a lawyer who has unknowingly done something that if done would have been in breach of the rules and who discovers it, shall disclose the error or omission and do all that can reasonably be done in the circumstances to rectify it. 

Faced with this dilemma, plaintiff’s counsel wrote to the court and advised that pursuant to rule 4.01(5), they wished to correct evidence which, unknowingly, had been presented to the Court and which had since been discovered to be potentially inaccurate. It was also said that as a result of reviewing the first agent’s file, the inventor had a different recollection of the events than his testimony before the Court disclosed. The letter went on to describe the inventor’s revised evidence based on the first agent’s file and an explanation for his faulty memory.

Motion To Re-Open The Trial

The defendant brought a motion to re-open the trial and compel the inventor to testify and be subject to cross-examination.

The Trial Judge observed it would be curious if the Rules of Professional Conduct imposed an obligation on counsel to advise the court of inaccurate evidence and the Court was not expected to take action to ensure the accuracy of the trial record. A letter from counsel concerning the corrected evidence might not be sufficient where cross-examination should take place and the Court would be required to access credibility of the witness on this new recollection.

There are no cases dealing on the issue of re-opening a trial after argument but before judgment and reasons have been given. However, there are cases that deal with the situation after a judgment has been pronounced.

In such cases  it has been established that re-opening is a matter of broad discretion but one which must be exercised sparingly and cautiously. In this regard, two of the factors considered are:

1. Would the evidence, if presented at trial, change the result?

2. Could the evidence have been obtained before trial by the exercise of reasonable diligence?

After reviewing these factors, the Trial Judge indicated that the primary concern must be the integrity of the trial process and allowed the trial to be re-opened.

Comment

It is difficult to be critical of counsel for the plaintiff in not vigorously seeking the first agent’s file since they relied on their client’s story that it was not relevant. The defendants’ counsel asserted invalidity and the onus of proof was on the defendant to prove it. It would be in the interest of all the parties to have the first inventor’s file produced at the earliest opportunity. 

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Data Security – The Case Against Cloud Computing

By Bernice Karn

Introduction

From a legal perspective, the need for data security by cloud users is a given. The user wants the data to be secure, period. At its most basic level, this means that the data entrusted to a cloud provider should not be subject to unauthorized access or disclosure or to modification or corruption. However, other risks are also inherent in cloud computing. This paper takes the position that, in spite of the perceived economic advantages of cloud computing such as scalability, speed to market, lack of capital investment by the user, and leaving computing functions to the experts (i.e., cloud providers) key business should never be entrusted to the cloud.

What Does “Cloud Computing” Mean?

Although definitions of cloud computing vary among experts in the field, the National Institute of Standards and Technology (“NIST”) in the U.S. defines cloud computing in terms of characteristics, service models and deployment models.2  According to Peter Mell and Tim Grance of NIST, cloud computing means “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”3 

Characteristics

NIST describes five characteristics of cloud computing that attract users. The five characteristics identified by NIST are:

  1. Cloud computing is an “On Demand” service. Classifying a service as “on demand” means that the user can unilaterally provision computing capabilities automatically without the need for any human interaction with each service’s provider. So, through the user interface the user may be able to order additional network storage space or possibly schedule server time.
     
  2. Broad network access. Whether the user is accessing infrastructure, platforms or software, all are available over the network and accessed through standard mechanisms that promote use by various types of thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).
     
  3. Resource pooling. The cloud provider uses a multi-tenant model to pool computing resources. These resources, both physical and virtual, are dynamically assigned and reassigned according to consumer demand. In addition, the resources may be varied by type of equipment and may be located in any number of disparate jurisdictions.
     
  4. Rapid elasticity or scalability. In a cloud computing model, the computing resources can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in as required by user demand.
     
  5. Measured Service. Cloud systems have the ability to measure the service and therefore control and optimize resource use (e.g., storage, processing, bandwidth, and active user accounts). This monitoring and control ability provides transparency for both the provider and consumer of the utilized service.

Other widely recognized benefits of cloud computing include: the cost savings of using a multi-tenant model; centralization of resources making maintenance, sustainability, management and control of resources easier; the perceived environmental benefits of building and operating fewer servers; standardized and hardened images offering better resilience against malicious attacks, and leaving the operation of sophisticated systems to the experts (i.e., the cloud provider).

Service Models

NIST has identified three “service models” through which cloud computing is offered. They are:

  1. SaaS  The concept in “Software as a Service” is the simple use of the cloud provider’s applications running on a cloud infrastructure. The user does not manage or control the underlying cloud infrastructure such as the network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings. This is a very “commercial off the shelf” example of cloud computing.
     
  2. PaaS  The next layer of complexity in cloud computing, “Platform as a Service”, as far as the user is concerned, is to deploy onto the cloud infrastructure consumer-created or acquired applications using programming languages and tools supported by the provider. As in the case of a SaaS model, the user does not manage or control the underlying network, servers, operating systems, or storage, but in the case of a PaaS model, the user does have the ability to control the deployed applications and potentially application hosting environment configurations.
     
  3. IaaS  The most comprehensive model of cloud computing is known as “Infrastructure as a Service”. In this model, the provider supplies the required processing, storage, networks, and other fundamental computing resources and the user is able to deploy and run any software that it may require, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls). 

Deployment Models

Finally, NIST identifies four different types of deployment models for the foregoing service models. These deployment models are:

  1. Private cloud. The cloud infrastructure is operated solely for one organization. It may be managed by the organization or a third party and may exist on premise or off premise. Arguably this may be the most secure type of infrastructure, depending on the nature of the controls deployed and the diligence of the operator.
     
  2. Community cloud. In this model, the cloud infrastructure could be shared by several organizations and supports a specific community or interest group that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
     
  3. Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
     
  4. Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).
Click here to view the full article.

This article is also appeared in the May edition of the Privacy Law Review published by LexisNexis.

[1] The author gratefully acknowledges the assistance of Rashesh Mandani, Student-At-Law in the preparation of this paper.

[2] Peter Mell & Tim Grance, The NIST Definition of Cloud Computing (2009), online:  National Institute of Standards and Technology <http://csrc.nist.gov/groups/SNS/cloud-computing/cloud-def-v15.doc>.

[3] Peter Mell & Tim Grance, “Effectively and Securely Using the Cloud Computing Paradigm” (Presentation delivered at the National Institute of Standards and Technology, 7 October 2009), online:  NIST <http://csrc.nist.gov/groups/SNS/cloud-computing/cloud-computing-v26.ppt#313,81>.

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Deal or No Deal: Copyright Protection in Television Formats

By Leonard Glickman

The licensing of television formats is a huge business, generating billions of dollars worldwide. Local versions of shows such as Pop Idol, Big Brother, Got Talent, X Factor, Wipeout and Deal or No Deal have been produced and broadcast around the globe. Whether or not television formats are unprotectable ideas or protectable works under copyright law is an open question.

Judicial opinion on this question is divided. In the UK,  the case most-often cited on format rights is Green v. Broadcasting Corporation of New Zealand  [1989] R.P.C. 700 (Privy Council) (“Green”). In Green, the court denied copyright protection to the UK talent show “Opportunity Knocks” on the basis that the show format was merely an idea for a game show and therefore not protectable under copyright law.

This approach is also reflected in two cases involving the weight loss reality program The Biggest Loser: Latimore v. NBC Universal, Inc. et al, 07 CIV 9338 (AKH) (SDNY Feb. 22, 2011) (“Latimore”) and Milano v. NBC Universal, Inc. et al, No. CV 06-3237-GAF (United States District Court, CD California) (“Milano”). In both cases, the courts granted summary judgment in favour of NBC and dismissed the claims of individuals alleging NBC infringed their copyright in similar show formats. In Milano, the court stated that the plaintiffs “FAT to PHAT” treatment did not meet the originality threshold to be protectable under copyright law and noted that several reality weight loss programs were already in the public domain before the plaintiff’s treatment was written. Although the “FAT to PHAT” treatment and The Biggest Loser contained similarities, the similarities were in elements that were not protectable. Similarly, in Latimore, the court found there was no substantial similarity between The Biggest Loser and the protectable elements of Latimore’s treatment for a weight loss reality program called “Phat Farm”. The only similarities between the two works were the generic idea of a weight loss show and the scenes a faire (expressions that are standard or common to a particular topic) that flowed from that idea, none of which were protectable. The plaintiffs met a similar fate in CBS Broadcasting, Inc. v. ABC, Inc. (SDNY, January 13, 2003) where the court rejected CBS’ claim that the ABC show “I’m A Celebrity Get Me Out Of Here” infringed CBS’ copyright in its Survivor format, and in Castorina v. Spike Cable Networks, Inc. (Dist. Court, E.D. New York, March 24, 2011), where the court rejected the plaintiff’s claim that the copyright in their treatment for a sports-themed reality show entitled “Two Left Feet” was infringed by the defendant’s sports-themed reality show called “Pros v. Joes”.

Big Brother has also been the subject of copyright disputes. In Castaway Television Productions Ltd. and Planet Productions Limited v. Endemol (unreported, Dutch Supreme Court, April 16, 2004), the producers of Survivor claimed that its format was  entitled to copyright protection as a result of its unique combination of elements and alleged that Big Brother infringed the copyright in Survivor. The Dutch Supreme Court held that the Survivor format was protectable as a copyrighted work but denied there was substantial similarity between the two shows. In a Brazilian case, Endemol v. TV SBT (unreported, 2004, Brazil) the court held that Big Brother was protected under Brazilian copyright law and found there was substantial similarity between Big Brother and the Brazilian copycat show Casa Dos Artistas.

In Canada, there is no copyright in ideas per se, only in the tangible expression of those ideas. Section 5(1) of the Copyright Act (the “Act”) states that copyright subsists in every original literary, dramatic, musical and artistic work. Section 3(1) of the Act provides that copyright in relation to a work “means the sole right to produce or reproduce a work or any substantial part thereof in any material form whatever...”. Section 27(1) of the Act states “it is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything by this Act only the owner of the copyright has the right to do”.

How have format rights cases been decided in Canada?  In Hutton v. Canadian Broadcasting Corp. [1989] A.J. No. 1193 (Alta. Q.B.) (“Hutton”), the plaintiff, Douglas Hutton, created and co-produced a video countdown show with the CBC called Star Chart. Three years after the cancellation of Star Chart, the CBC produced Good Rockin’ Tonight (“GRT”), another video countdown show featuring Terry David Mulligan, the host of Star Chart. Hutton commenced an action for copyright infringement. The court found that, unlike GRT, Star Chart satisfied the definition of a dramatic work and had sufficient originality to be protected as a copyrighted work. The court noted a number of similarities between the two programs but concluded such similarities relatively unimportant. The similarities included the host, the number of commercial breaks and proportionality to the length of each program, the number of videos shown in each show, the playing of more than one video back to back and the fact that both shows featured countdowns. In terms of dissimilarities, the programs were of different lengths, (Star Chart was a half hour program, GRT was one hour or more), no interviews were done in Star Chart but extensive use of interviews was made in GRT, there was very little or no viewer participation in Star Chart but a substantial amount in GRT, and Star Chart did not offer an announcement of coming events in the area, but GRT did. In conclusion, the court stated “although the evidence demonstrated similarities between the shows, they have also revealed some important dissimilarities which, in my view, outweigh the similarities (qualitatively speaking) and demonstrated the programs were dissimilar”. Accordingly, the plaintiff’s copyright infringement claim was dismissed.

In Cummings v. Global Television Network Quebec, Limited Partnership [2005] Q.J. No. 6707 (Que. S.C.), the plaintiff alleged that the defendant copied his concept for a television show centred around a musical performance competition. The plaintiff had submitted to the defendants an outline for a show entitled “Dreams Come True” prior to the defendant’s production of a show called “Popstars”. The court found that the plaintiff’s concept, which had never been produced, possessed insufficient details to be an original work and was therefore not entitled to copyright protection. Although this disposed of the copyright claim, the plaintiff also alleged delictual (extra-contractual) infringement of his rights in the Dreams Come True concept under the Quebec Civil Code and the court therefore undertook a substantial similarity analysis. The court found that the similarities between the two shows were generic and unimportant in nature and that it was impossible to consider them copies. These generic similarities included seeking amateur singers and dancers and using coaches in order to improve their skills, producing a record with chosen artists and the eventual organization of a Canadian tour. As in Hutton, the court found the differences between the two concepts to be more important than the similarities. Popstars was only open to young performers rather than musicians, singers, composers, lyricists and dancers of all ages. The Popstars show clearly picked winners and losers whereas the plaintiff’s concept was a no-win no-lose contest. Moreover, the Popstars show focused significantly more on the careers of the winners than the Dreams Come True concept contemplated. The court also agreed with the defendants that a key element of the Popstars program was the “behind the scenes” elements which made the show more of a docu-drama or docu-soap than a singing competition. The trial decision was upheld by the Quebec Court of Appeal [2007] J.Q no. 1730 (C.A.).

It is clear that from the foregoing that certain jurisdictions are reluctant to grant copyright protection to television formats and those that have recognized television formats as copyrighted works have been reluctant to allow format owners to successfully assert their rights in copyright infringement proceedings against third parties. This has led to the establishment of the Format Recognition And Protection Association (FRAPA), an international association dedicated to the protection of formats and lobbying for statutory recognition of format rights. Unless and until format rights have been statutorily recognized, television formats that are unique in concept and have distinctive protectable elements will be afforded a greater scope of protection. As I noted in my recent article on trade-mark rights and format titles (Tuning in to the Dangers – Protecting Television Formats, World Trademark Review, February/March 2011) protecting the brand of the format and being first to market with that brand can be just as important if not more important than protecting and fighting an uncertain battle to enforce copyright in the format.

This article originally appeared in the May 6, 2011 issue of The Lawyers Weekly published by LexisNexis Canada Inc. 

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User Generated Content: Recent Developments in Canada and the US (Article)

By Leonard Glickman

The proliferation of user generated content (UGC) in recent years has raised traditional legal issues, such as copyright infringement, defamation and violation of privacy rights, in a novel context. Recent Canadian and US court decisions on such issues are relevant to a myriad of stakeholders, including content owners, persons who upload UGC and corporations that operate websites to which UGC is posted. Click here to read more.

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The Glamorous World of Trade-marks

By Shane Hardy

A recent decision of the Canadian Trade-marks Opposition Board raised some novel issues surrounding the types of evidence required to be filed and the categories of wares that might raise a likelihood of confusion. The decision raises issues of concern for those involved in the fashion industry and provides lessons regarding the evidence required in order to succeed in a Canadian opposition proceeding.

The case of Advance Magazine Publishers Inc. v. Beauty Bank Inc. (2010), 89 CPR (4th) 264 saw Advance Magazine Publishers Inc. oppose an application for the trade-mark GLAMOURAZZI that was filed by Beauty Bank Inc. Beauty Bank’s trade-mark application covered a broad range of cosmetic and fragrance-type goods. Advance based its opposition primarily upon the basis that the GLAMOURAZZI mark was not registrable since it was confusingly similar to the trade-mark GLAMOUR which had been previously registered in association with, among other things, a periodical magazine. While Advance claimed some technical grounds of opposition, the following were the substantive grounds relied upon by Advance:

  1. Beauty Bank was not entitled to register the GLAMOURAZZI mark since it was confusing with the GLAMOUR mark that had previously been used in Canada.
     
  2. Beauty Bank’s alleged mark was not registrable since it was confusingly similar with the trade-mark GLAMOUR that had previously been registered in Canada by Advance.
     
  3. The GLAMOURAZZI mark was not distinctive (and could not be properly registered) given the prior use of the trade-mark GLAMOUR by Advance.

Hearing Officer Sprung correctly indicated that the Opponent had to meet an initial burden by adducing sufficient admissible evidence from which it could reasonably be concluded that the facts alleged to support each ground of opposition actually existed.

With respect to the allegation that the GLAMOURAZZI mark was not entitled to be registered, the Hearing Officer noted that Advance had the initial responsibility to show that its mark had been used in Canada prior to the filing date of the GLAMOURAZZI mark. In an interesting strategic move, Advance did not file any evidence to show use of its trade-mark in Canada. Rather, Advance argued that the Federal Court of Canada had determined in a 2009 decision that the GLAMOUR mark had, in fact, been used in Canada. In addressing this assertion, the Hearing Officer noted that this was an unreasonable approach to take since it would prejudice Beauty Bank in the proceeding since Beauty Bank would be unable to respond to such evidence and since the veracity of such evidence could not be tested by cross-examination. As a result of this finding, the Hearing Officer determined that the ‘entitlement’ ground of opposition must fail.

Turning to the argument that the GLAMOURAZZI mark was not ‘registrable’ because it was confusing with the previous registrations obtained by Advance, the Hearing Officer determined that Advance had met its initial onus by filing particulars of its registrations for the trade-mark GLAMOUR. As a result, the onus in the proceeding shifted to Beauty Bank to convince the Hearing Officer that there was no likelihood of confusion between the GLAMOURAZZI and GLAMOUR marks. In determining that there was no likelihood of confusion, the Hearing Officer determined that the GLAMOUR trade-mark was not inherently strong and that, as a result of the filing of no evidence of use, she could not determine that the mark had acquired distinctiveness in Canada. On the other hand, the Hearing Officer determined that the GLAMOURAZZI mark had some inherent distinctiveness since it is a coined term and since the addition of the element “azzi” created a relationship with the word and idea of “paparazzi” which was determined to be quite different from the word “glamour” alone.

The Hearing Officer also addressed Advanced’s argument that there was an overlap in the wares and trade of the parties since both were involved in a commercial endeavour associated with beauty and a “culture of glamour”. The Hearing Officer, however, was not prepared to find that there would necessarily be an overlap with all types of products related to beauty. While the Hearing Officer might have been prepared to assume that both parties’ goods were sold in the same type of retail stores (no actual evidence was actually filed on that issue), there was no basis for finding that the goods would be sold in the same sections or in close proximity to each other.

In concluding, the Hearing Officer determined that there was no likelihood of confusion in this case and dismissed the opposition.

There are lessons that brand owners can take from this decision. In short, there is a possibility that the Hearing Officer might have come to a different conclusion had clear evidence showing use of the trade-mark GLAMOUR been filed. In a typical Canadian opposition proceeding, the evidence filed by the opponent is critical in securing a finding of confusion. This decision (while not binding on a Canadian Court) certainly suggests that relying upon a previous finding of ‘use’ of a trade-mark in Canada will not suffice. While this puts an opponent to the additional task and expense of collecting and filing clear evidence, it is a worthwhile endeavour to undertake when opposition decisions can have a clear impact upon strategic business decisions.

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Trade-mark Bullies Revisited

By John McKeown

The United States

As mentioned in the February edition of the Cassels Brock report, the Secretary of Commerce of the United States recently launched a study on the extent to which small businesses may be harmed by the litigation tactics of trade-mark owners attempting to enforce trade-mark rights beyond a reasonable interpretation of the scope of those rights.

A Report has been released and is available by clicking here. The Report provides a useful summary of US trade-mark law relating to policing and enforcing trade-mark rights.

It was observed that abusive litigation tactics, in the sense of those tactics employed in litigating a civil action through to trial, did not appear to be a significant problem, since historically only approximately 1.5% of all trade-mark cases filed ever reach trial and the majority are disposed of before a case reaches the pre-trial phase.

To the extent trade-mark owners engage in tactics unwarranted by a reasonable interpretation of the scope of the rights they actually possess, it was said that the root of any problem that may exist were the tactics engaged in during pre-litigation or pre-trial enforcement efforts.

The Report concluded that it was unclear whether small businesses were disproportionately harmed by enforcement tactics that are based on an unreasonable interpretation of the scope of an owner’s rights. The answers received in response to request for comments reflected a diverse range of views.

Ultimately it was said because trade-mark enforcement is a private property rights litigation issue, if abusive tactics are a problem, such tactics may best be addressed by the existing safeguards in the litigation system and ensuring that aggrieved parties to the extent possible obtain appropriate legal advice.

Comment

The Report has been criticized for not providing any useful solutions. However Canadian Courts do seem to have sufficient jurisdiction to control abuses in litigation in pre-trial proceedings and at trial.

It remains to be seen whether anything can or should be done concerning tactics engaged in during pre-litigation. I recall the comment of an experienced trial Judge made during the course of hotly contested proceedings that the commercial world is a hard world. Perhaps it would be best to leave it at that and not intervene in any formal way.

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