II - Le droit des marques de commerce

10. Lionel Bently et Brad Sherman, Intellectual Property

11. [History and Passing-off action (the notion of goodwill)]

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  TMs initially indicated ownership, then quality, then became independent assets and marketing tools. Now beginning to take on status and have a role in identity.
  
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  Intially, protection was from deceit: if a trader had used a mark, deliberatue use of it by another was a tort. This was basis for “passing off.” P/o required misrepresentation which deceived customers (confusion). No right in symbol per se, but in the goodwill it communicates (g/w: intangible property - magnetism of a product; benefit and advantge of good name, reputation; power to attract customers (IRC v Muller, Lord McNaghten).
  
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  P/o expanded to services and licensing. Attractive b/c CML remedy. Had to prove: (i) claimant has g/w; (ii) dfdnt made misrep likely to deceive the public; (iii) misrep damages g/w of claimant.
  
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  P/o did not become general action for misappropriation of intangible value/unfair competition in CML: Registry of marks developed in response to demands by traders. Protection prior to use becomes possible.
  
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  New functions of TM challenge scope of old Acts. Schechter: TM should be a species of property, injury is erosion of identity in public mind. This has been synthized into modern statutes.
  

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  Distinguishing traders is not the same as describing the product. Courts do not grant control over descriptive words. Exception: words are distinctive in fact or have taken on a secondary meaning which is the result of the trader's production of the goods or services bearing the descriptive words (length and cost of advertising are relevant in showing secondary meaning). End of protection can come about if a patent term comes to an end or if the descriptive word becomes general usage for the product w/o referring to its source in particular
  
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  Places and names aren't protected. Exception: unless they have a secondary meaning.
  
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  It is unlikely that new competitors would be able to bring a passing-off action until they are in the market for long enough allowing public to build up mental associations. Tells us rights are acquired gradually.
  
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  Can acquire g/w through packaging, esp in foreign language mkts and if customers are illiterate (must show get-up is distinctive, which is tough to do if it relates to the shape and function of products b/c those are often qualities that motivate purchase as much or more as the source of the product).
  
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  Possible to have g/w in an advertising style.
  
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  Possible to have g/w in celeb voice, image, likeness
  

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  Must be in a business activity to have g/w, although this is interpreted broadly (charities)
  
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  Claimant must be trading. Exception (quite restrained): substantial pre-trading publicity.
  
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  Possible to generate g/w very rapidly.
  
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  G/w must be attached to a business that currently exists, although this is limited in practice if there is an association made by the public that survives the business and if the business intends to resume trading.
  

1. Seiko Time v Canada (PG), (1984) 1 RCS 583

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  Trial judge concluded that marketing watch w/o other elements of the “product” created confusion
  
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  Problem with confusion argument: if valid, S gains a monopoly.
  
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  Also: the basic CML ppe is free trading. P/o is an exception to this. Must be careful in expanding exceptions. Not all damage caused by competition is protectede at CML. Comp is good.
  

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  Selling merchandise or carrying on business under a name or mark that will mislead the public into believing that the merchandise or business is that of another
  
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  Potential exception to principle of free trading meant to protect the property another person has in goodwill.
  

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  Test: whether resemblance is so great as to decieve the ordinary customer acting with the caution usually exercised in such transaction, so that he may mistake one product for the other.
  
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  Facts don't fit. Watch is from same source. Nothing pretending to be something else. Contention that CD passes off other elements of product, like pont of service sale, are rejected. The effect would be to give S monopoly.
  
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  Interlocutory judgment eliminated confusion
  

Need (i) a misrep (ii) made by a trader in course of trade (iii) to prospective customers (iv) calculated to injure another trader (v) that cause actual damage to business or goodwill. Damage to goodwill is the key. None here.

(a) saying discontinued product is new and improved one: dishonest and unfair trade

2. T-Rex Véhicules Inc c 6155235 Canada Inc, 2008 QCCA

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  Objectives of protection are to distinguish and decrease confusion. No protection was sought for the design. Design would have had to be registered. (QC?) There is an administrative process that confers the benefit of a perpetual monopoly in the case of TM.
  
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  Visual appearance can be protected if it distinguishes, is used, and doesn't unrsbly decrease competition.
  
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  Limits to protection of visual appearance: statutes; get-up which rests solely in the configuration of the product (TM is not meant to protect an entire product but to asure the authenticity of a mark); functional aspects of get-up and aesthetic functionality.
  

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  Shell of the original vehicle, the T-Rex, is functional. Not distinctive.
  

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  L'existence d'un achalandage, la déception, du public due à la représentation trompeuse et des dommages actules ou possibles pour le demandeur.
  
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  T-Rex cars have a certain notoriety. This is the reason that it was copied.
  
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  The cars do look remarkably similar but they are still different w/ respect to price, authorisation needed to register for insurance, and in that T-Rex is ready to drive while G-2 is a kit car. Consumers will see the difference between the two.
  

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  Can protect mark with trademark or passing off (A. 7 TM Act, below).
  
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  Thinks chassis and body are distinctive as a sign.
  

All designs are registrable under s. 30(h) of the TM Act and 25(c) of TM regulation. Chamberland focuses too much on the precision of the mark; the real concern is protection of consumers.

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  “un signe distinctif qui est principalement fonctionnel ne confère aucun droit à un emploi exclusif et il n'accorde pas la protection qu'offre une marque de commerce.”
  
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  Things which are distinctive and also functional can benefit from TM protection if they are not entirely functional.
  
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  Design of T-Rex is not the only one imaginable, it in itself deserves protection.
  

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  See s. 12, below. General registrability.
  
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  Exception: a “distinguishing guise” is not registrable if it has the effect of unreasonably restricting the development of an art or an industry. See s. 13 below.
  

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  Il est interdit de permettre la vente de marchandises en la faisant passer pour celles d'une autre entreprise.
  
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  Reason for this principle: to protect the consumer.
  
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  There was no evidence of confusion in this case. The proof just doesn't show it, and only 113 had been sold in Quebec.
  

No person shall

1. 
   make a false or misleading statement tending to discredit the business, wares or services of a competitor
   
2. 
   direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another; (passing-off!)
   
3. 
   pass off other wares or services as and for those ordered or requested;
   
4. 
   make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to
   

5. 
   do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada
   

1. 
   a word that is primarily merely the name or the surname of an individual who is living or has died within the preceding thirty years; NAMEs
   
2. 
   whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin; DESCRIPTION, QUALITY
   
3. 
   the name in any language of any of the wares or services in connection with which it is used or proposed to be used;
   
4. 
   confusing with a registered trade-mark; CONFUSION
   
5. 
   a mark of which the adoption is prohibited by section 9 or 10;
   
6. 
   a denomination the adoption of which is prohibited by section 10.1;
   
7. 
   in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication; GEOGRAPHICAL INDICATIO
   
8. 
   in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication; and
   
9. 
   subject to subsection 3(3) and paragraph 3(4)(a) of the Olympic and Paralympic Marks Act, a mark the adoption of which is prohibited by subsection 3(1) of that Act.
   

1. 
   it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application for its registration; and PRIOR USE
   
2. 
   the exclusive use by the applicant of the distinguishing guise in association with the wares or services with which it has been used is not likely unreasonably to limit the development of any art or industry. DEVELOPMENT OF INDUSTRY
   

12. Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65

(2) Can the “Lego indicia” form the basis of a trademark for a passing-off action under s. 7(b)?

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  R claims that s. 7(b) is not connected to the TM registration scheme in the Act  for this reason, it would not be valid under s. 91(22)/(23)
  
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  Patents (s. 91(22)) and copyrights (s. 91(23)) are explicitly allocated to Parliament, as is trade and commerce (s. 91(2))
  
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  City National Leasing (1989): the mere fact that a provision codifies a civil cause of action does not necessarily render it ultra vires Parliament
  
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  AG Ontario v. AG Canada (1937): JCPC confirmed Parliament’s ability to enact TM legislation
  
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  Kitkatla Band v. BC (2002) set out test for whether impugned provision is in Parliament’s power to enact: (a) Does it intrude into provincial head of power, and to what extent? (b) If it does, is it nevertheless part of a valid federal legislative scheme? (c) If yes, is it sufficiently integrated with that scheme?
  

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  Section 7(b) codifies the CML tort of passing off
  
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  Appears to encroach on provincial power but it is remedial rather than creating a general cause of action (City National Leasing); its application is limited; Parliament may create civil causes of action where measures are warranted
  

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  TMA valid exercise of Parliament’s general trade and commerce power  91(2) Constitution Act.
  
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  Act establishes regulatory scheme for registered and unregistered TMs (primary diff: registration more rights)
  
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  Protection of unregistered TMs integral to legitimacy, legal standards, and efficacy of registered TMs
  
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  Concerned with TMs as a whole, rather than in one industry
  
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  Did not intend to create two separate enforcement regimes for registered and unregistered marks
  

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  Only minimally intrudes into provincial jurisdiction over P&CR
  
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  Functional relation of s. 7(b) to Act is apparent; passing-off action has a clear role without which there would be a gap in protection
  
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  Section 7(b) is thus within Parliament’s competence
  

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  Patent law protects new products/processes; exchanges time-limited monopoly for disclosure
  
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  TM law focuses on distinctiveness of marketing; goal is that consumers know what they are buying
  
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  Foundation of a TM is distinctiveness, because only this allows identification - symbol of connection between source and product
  
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  K’s patent monopoly was essential for building up and preserving Lego’s market share; many came to associate Lego with the locking system of bricks
  
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  K’s alleged distinguishing guise is a set of technical/functional characteristics formerly protected by its patents
  
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  Registration of a TM is not to interfere with use of its utilitarian features
  
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  Act s. 13(2) recognises that it does not protect the utilitarian features of a distinguishing guise
  
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  K claims that the above is true of registered TMs, but not of unregistered TMs – but registration does not change the nature of the mark; just grants more effective rights against third parties by facilitating proof of title
  
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  R’s marketing operations are legitimate; K is complaining about existence of competition
  
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  K’s alleged product distinctiveness consists precisely of process and techniques now common to the trade