Origins of Trademarks
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history of TMs goes back to middle ages craft guilds; craftspeople would put guild mark on product to identify its quality. Eventually, TMs came to identify individual (as well as collective) enterprises as sources.
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TM protection evolved in CML as means to prevent one from pawning off his goods as those of someone else. i.e. misrepresentation or deceit.
Sherman & Bentley
Sherman and Bently, “The Making of Modern IP Law”, CB I p. 393
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trademark law was not recognized when IP law took shape in 1850s – the law as it stood remained specific and reactionary (chaotic) – (1863 Exhibitions Medals Act)
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it was a very uncertain regime but over the second half of the 19th century this area came to take shape because of a number of factors
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growing recognition and use of marks in commercial practice led to increased specialisation in this field – led to calls for recognition and registration system
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the move to establish bilateral treaties – the act of negotiating them required the law be set out in more detail – led to the intro of the trademark register and the detailed definition of a mark
Trademarks in the framework of IP Law
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growing pressure to recognize this area within the framework of IP law because of many factors
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because of shared professional bodies (patents and TM agents)
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the nature and form of international treaties
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the logic of industrial property
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there was an important points of connection between the regimes (i.e. IP including CR and patent) and TM…for the existence of the right, as an aide to interpreting TM doctrine, for the shape the system of registration should take and the language and structure to be used in TM legislation. Also TM, CR and Design dealt with similar subject matter
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at its most extreme a trademark was said to embody the personality of the creator (like CR and design rights) – John Smith
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also, TM proprietors had utilised pre-existing arrangements for CR and designs to protect themselves – registered labels as designs (pictorial nature of design and artistic copyright)
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a number of objections to recognizing TM as a form of IP
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first objection was on the basis of [lack of]creativity – TM’s dealt with pre-existing subject matter, whereas a man coming for a patent gives consideration he is giving something new to society – this would be contrary to the spirit of monopolies
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CR, patents and designs were primarily concerned with the creation and protection of property where trademarks where more concerned with forgery or fraud (no property at all) – infringement of a patent was interfering with a private right of property.
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Reddaway v. Banham
Reddaway v. Banham, [1896] H of L, CB I p. 397
Facts:
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Ptf has for many years made and sold “Camel Hair Belting”
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Dft Banham was formerly employed by Reddaway. He left the company and started his own company which manufactured belting made of the same material and called it “Camel Hair Belting”. Dft’s co had originally called its belting Arabian belting, however its customers said they would only buy the product if it was the same quality as Reddaway’s product and stamped with “Camel Hair Belting.”
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Ptf sought injunction
Issue: Can ptf obtain injunction against dft to prevent him from using the mark “camel hair belting” to market belting made out of camel’s hair?
Held: Yes
Ratio:
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Fundamental rule from Perry v. Truefitt: A man has no right to put off his goods for sale as the goods of a rival trader, and he cannot therefore, be allowed to use names, marks, letters or other indicia, by which he may induce purchasers to believe that the goods which he is selling are the manufacture of another person.
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The name of a person, or words forming part of the common stock of language, may become so far associated with the goods of a particular maker that it is possible to prove that use of them by another manufacturer w/o explanation or qualification would deceive a purchaser into the belief he was getting the goods of A when he was actually getting the goods of B.
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It is not enough to say that the dfts in this case were telling the simple truth when they sold their belting as camel hair belting. The fallacy in this lies in overlooking the fact that a word may acquire in a trade a secondary signification differing from its primary one, and that if it is used to persons in the trade who will understand it, and be known and intended to understand it in its secondary sense, it will none the less be a falsehood that in its primary sense it may be true.
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In this case, the words “camel hair” had acquired a secondary signification in connection with belting – they did not convey to relevant purchasers that the belting was made of camel hair but that it was manufactured by the ptfs. Thus, the effect of using the words in the manner in which dfts used them would lead customers to believe they were getting the product of the ptf, and thus deceive them and injure the ptfs.
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POINT: This case was the origin of “secondary meaning” protection in the law of passing-off and trademark. Where descriptive or generic words acquire a secondary meaning which leads relevant purchasers to associate those words with a particular manufacturer (source) rather than with the described or named product more generally, the use of those words by another manufacturer w/o qualification, such that it deceives relevant customers, will be enjoined.
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Name or description of product (no protection) Secondary Meaning (protection)
Unique name (protection) Becomes name of product or description of product, i.e. GENERIC (no protection)
Champagne case
Institut des Appellations d’Origine des Vins et Eaux-de-Vie v. Andres Wines Ltd., [1987] Ont. H.C.J., CB I p. 402
Facts:
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Ptf is national organization established by French law – regulates wine production, conditions, etc. Co-ptfs are companies which produce wine in the Champagne district of France
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Dfts are Cdn companies who sell sparkling wine under various names, some of which incorporate “champagne”
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Laws of France regulate production of Champagne, such that only those who produce sparkling wine in certain region and using certain methods and quality of grapes are permitted to advertise and market their wines as champagne.
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The name “Champagne” has a high reputation and renowned quality internationally and each ptf producer has a shared vested interest in the national and international goodwill and reputation of the name.
Issues:
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Whether the concept of “shared goodwill” should be approved
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Whether, in accordance with the requirements of the tort of passing off, the dfts have misrepresented their product in such a way that leads to confusion
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Whether the mark “Champagne” has become generic.
Held: 1) Yes. 2) No. 3) No.
Ratio:
Tort of passing off extends to shared goodwill
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Ptfs claim that dfts are passing off their product as “Champagne” and not as the product of one specific producer. Court must decide then whether concept of “shared goodwill” should be approved such that the 16 ptfs can have a common cause of action
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Concept of shared goodwill was approved by the House of Lords. Judgments make clear that absence of a connecting identity btwn the dfts’ goods and those of the ptfs is not fatal to a passing off claim; dfts need not have passed off their goods as those of any one of the 16 ptf champagne houses.
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The proprietary right is not in the name itself, but in the reputation or goodwill associated with it. This goodwill and reputation are shared.
Common law of passing off
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Tort of passing off has three elements: (1) reputation or goodwill in the product; (2) a misrepresentation leading to or capable of leading to deception; (3) that such misrep is likely to lead to damage to that goodwill or reputation.
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Court establishes (1) easily – “champagne” has a high reputation widely recognized the world. Each ptf has a vested shared interest in the goodwill associated with that name.
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(2) Misrepresentation resulting in a likelihood of deception:
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Misrep has always formed the basis of an action for passing off
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Sapalding: must be proven that dft’s use of the mark, name, get-up is “calculated to deceive”
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Prosser: Test laid down for passing off is whether the dft’s conduct results in a false representation which is likely to cause confusion or deception [even if no such intention]
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Court reviews the case-law from Canada and England and concludes that “a necessary, constitutive element of the tort of passing off, the very thing which causes damage to the ptf’s goodwill,is the dft’s misrepresentation of its product which is likely to cause confusion in the public’s mind between the defendant’s goods and those of the plaintiff.” Court notes also that the “extended form” of the tort has not obviated the need for proving this confusion.
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(3) Court seems to conclude that there have been no damages to ptfs’ reputation or good will b/c the concurrent sale of domestic champagnes in Ontario has not resulted in a decline in the sales of the French product. In fact, French champagne sales have continued to grow.
General use of the term “champagne” – term has not become generic
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Dfts contend that the term has become generic, that it is a general word used to describe sparkling wine, high quality and excellence (e.g. the Champagne of ginger-ales) and even a colour. Some of the ptf cos even produce sparkling wine in other countries and call it champagne (suggesting it is a name for a type of wine)
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Court concludes that evidence shows that the word champagne has acquired generic attributes. (as per above). However, at most the word has become “semi-generic”. Evidence indicates that champagne simpliciter is still in part considered and accepted as reffering to a particular and unique sparkling wine produced in France. Despite the considerable onslaught, the word “champagne” has resisted the pull; it has not yet fallen into generic use.
Evidence of no confusion btwn French and Canadian Champagne
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Court must determine whether the dfts’ conduct misleads members of the public into believing that the dfts’ champagne is either a product of France or connected/associated with the French champagne industry either directly or indirectly.
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Canadian champagne is a distinct Cdn product not likely to be confused or even compared with French champagne. Conclusion is based on:
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Many years which dft wine producers mktd Canadian champagne in Ont
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Manner in which the product is labeled – the word “Canadian” is displayed prominently in compliance with government directives.
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Cdn product is physically separated from French champagnes in LCBO stores and listed separately on restaurant wine lists
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No evidence of complaints wrt deception or misrepresentation
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Though public has increased knowledge and awareness about wine, even the most ignorant customer will likely realize the difference btwn the two products – clear labeling; different physical location; vast price differential btwn the products.
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POINT: Extended passing off (i.e. shared goodwill is protected). Modern standard for deception is confusion. Customer here not confused: clear labeling; says “Canadian”; different physical location of product; vast price differential.
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Eli Lilly v. Novopharm Ltd.
Eli Lilly and Co. v. Novopharm Ltd., [1997] F.C.T.D., CB I p. 423
Facts:
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Eli Lilly produces Prozac and its 20mg pills are half cream and half green and its 10mg pills are half green and half gray. Prozac has received a lot of attention – e.g. picture of pill on the front page of Time. Eli Lilly’s patent ran out and it is now trying to protect its product via TM.
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Apotex, a generic drug manufacturer has produced its pills with similar shape, size and colour
Issue: Have the def’s passed off their wares as wares of the plaintiff, contrary to s. 7(b) of the TM Act?
Held: No
Ratio [Reed J]:
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issue as to whether or not the def’s can use capsules that are similar is size, shape and colour to those used by the plaintiffs for the same type of product
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Ciba-Geigy changed the likelihood of passing off actions because it allowed the courts to consider the possible confusion of the ultimate consumer and not only those in the medical profession – special rule should not apply to this industry
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Notes that you cannot get a prescription w/o a doctor and doctors are not influenced by the colour of the pills they prescribe. Pharmaceutical and generic companies sell drugs to pharmacists, who are similarly not phased by the colour scheme of the medication.
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the patient has little involvement in the choosing of the drug and the overall consideration is the knowledge and recommendation of the doctor
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normally, the consumer does not see what the pill looks like at the point-of-purchase – the prescription method is not standard (some write the brand name, some the chemical name, etc. + substitution laws)
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for pharmacists, appearance is not a crucial factor…breadth of product line, reliability of supply and price are crucial factors
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this is not a situation where a consumer is self-selecting from a shelf display of differently branded products
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there is no difference in quality between the defendant’s generic drug and the plaintiff’s products (interchangeable) – only thing is different inactive ingredients
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the shape of the capsules is a standard in the industry – a two colour capsule for prescription medication is not inherently distinctive, nor is there anything inherently distinctive about the colours chosen – the defs said they chose their colours because of the association with the type and dosage of the drug (capsules are not identical in all aspects anyways)
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Survey Evidence – looking at general public
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used and revealed little evidence supporting a claim of association b/w capsule colours being the same and capsule source being the same (little association b/w the name and the colours)
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Public Policy
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plaintiff said the patients have a right to know what brand of a drug they are receiving, defendants said that having drugs of the same colour plays a safety role [elderly people who get a pill that looks different might refuse to believe that the generic will be as effective; interest in person being able to ID drugs as therapeutic equivalents]
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Section 7(b)
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"No person shall direct public attention to his wares…in such a way as to cause or be likely to cause confusion…between his wares….and the wares of another." This is the statutory incorporation of the tort of passing off, but excludes the requirement of proving an attempt to misrepresent.
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Has there been a misrepresentation?
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To succeed in passing off, the ptfs must prove a misrepresentation by the defs to prospective customers or ultimate customers. Here, the appearance of the def’s capsules does not operate to lead a customer to request the products of the def rather than those of the pl.
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The capsule appearance is not used in the market place as an identifier by reference to which the consumer chooses one brand over the other. They do not choose the product based on its appearance. They buy it because either it’s cheaper, or because the generic has been prescribed, or because it is the only product offered by their pharmacist.
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Apotex uses the same colour to show that it is therapeutically equivalent to the def's product, not to represent to the public that their products are the pl's. No intention to misrepresent.
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Is there goodwill associated with the good?
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In passing off, the pl must prove goodwill associated with its trade-mark or get-up. Goodwill arises from the fact that the trade-mark is associated in the mind of the public with the pl's goods or with one trade source. You can't just say that the def's get-up is similar to the pl's get up – it must be established that consumers have, by reason of the peculiar/ novel appearance of the goods of the pl, come to regard them as having some one trade source, but they don't need to identify that source. You must prove that your design is novel and that it is recognized in the market and has acquired a reputation.
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In this case, the pl’s have not proven that the capsule appearance has acquired the requisite reputation in the market place as a distinguishing feature of the pl's product.
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Is there likelihood of confusion?
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Additionally, the pl’s must prove the likelihood of confusion. The level of confusion varies from case to case. Here, there is no evidence of actual confusion: there is no evidence that doctors, pharmacists or nurses would be confused.
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The average consumer will either be aware that he is purchasing the generic because of the lower price, because they have been so informed or because they know that it is common practice for generics to be sold as substitutions to the name brand drugs.
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They will associate the capsule appearance with the character of medicine and not the trade source (patients are not greatly concerned with brand they consume) – if they don’t get what they want, they will be aware of it because of the label on the bottle.
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POINT: Judge follows pre-Ciba-Geigy position: ultimate consumers of drugs are medical professionals, not patients, and they don’t choose the products by reference to appearance (no goodwill/reputation), nor would they be confused by a similarity of appearance among different brands (no confusion).
Always must ask Who is the consumer? Whose confusion do we care about? Wrt drugs, medical professionals are the relevant population. [Note however that Reed does decide that the patients don’t associate appearance of Prozac with the name nor would they be confused (b/c other indicators to suggest they are getting a generic)]
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Notes (DL):
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What are the relevant factors here? health care system in Canada (substitution laws), no direct marketing in Canada, public policy concerns (with safety), shape is for efficiency reasons.
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SH: if appearance of the drug is critical to its functionality (drug won’t work if patient sees it is different, then appearance should not be protected longer than function is protected by patent.
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If survey evidence showed that customers did not associate appearance of Prozac with its name, then unlikely any drug will pass this test – Prozac was heavily marketed, appeared on cover of Time, etc.
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Result might be different in the U.S. b/c the nature of the pharma industry is different – there is direct to consumer advertising, there is no publicly funded medicine. Overall, consumers have a more prominent role to play in choosing their medications.
PASSING OFF
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Statutory basis art. 7(b) TM Act:
No person shall… (b) 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;
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What is the resource protected? words, phrases, designs, shapes, “get-up” (way product is packaged), certification marks, colours(?), sounds(?)
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How long does protection last? For as long as it is used and is associated with your wares or services; use it or lose it.
What must be established in a PO action?
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Reputation or goodwill in the trade-mark or get up, i.e. the TM or get-up is associated in the mind of the purchasing public with the ptf’s goods, or with one trade source, whether or not the public can identify that source. [SH: and public chooses product by reference to this mark]. Usually requires time or investment of $.
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Need not identify a particular source – need only identify that it is the same source.
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Can be extended or shared goodwill (i.e. not associated with one particular enterprise but with a group of enterprises (in one region or producing one specific quality of product for e.g.)
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Defense – your mark is merely descriptive or names the product. Counter – it has acquired secondary meaning. (Reckitt)
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Defense – your mark, name or get-up has become generic (this is tried but fails in Champagne)
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Defense – mark/get-up is primarily functional (Reckitt v. Borden; LEGO)
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Misrepresentation leading to or capable of leading to deception
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Don’t need intention to deceive
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Deception has become confusion (Champagne; Reckitt v. Borden). Confusion in the mind of the relevant consumer, i.e. he or she might buy dft’s goods thinking they are the ptf’s.
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Misrepresentation is likely to lead to damage to that goodwill or reputation
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Have the ptf’s become, or they likely to become, less profitable as a result of the confusion? [see other possible damages below]
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Remedies
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Lost Profits resulting from:
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Loss of Trade, Damage to reputation, harmful association, loss of opportunity to licence, inability to expand.
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Accounting of profits
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Injunction (possible b/c unfair competition has origins in equity)
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