Brexit Impact on Trademarks

Recent Trademark Cases of Interest - Part 2

Several additional trademark decisions of interest from the past two years include cases concerning the treatment of software downloaded from the Internet (goods not services), a very rare order for jail time as a result of trademark infringement, and the use of a variation of a registered trademark.

Specialty Software Inc. v. Bewatec Kommunikationstechnik GmbH  2016 FC 223

Specialty Software had registered the mark “MEDINET” in association with computer software programs in relation to wares in 1991, which was later assigned to Medinet Health Systems Inc. in 2011. In 2013, Bewatec Kommunikationstechnik initiated proceedings to expunge the mark.  To maintain the registration, Specialty had to show evidence of use of the mark between November 22, 2010 and November 22, 2013. Specialty failed to file any evidence, and the mark was expunged.

Specialty appealed, and presented evidence of use. Specialty’s software was originally sold on disks, and was later made available for download over the internet. Bewatec argued that this change meant that Specialty was now providing a service instead of wares/goods. The Judge disagreed, and held that Specialty never actually sold the software itself; it sold an entitlement to obtain access to it by way of licenses. The disks merely represented the means by which the transfer of the wares/goods occurred. The real goods were, and continued to be, the licenses.

Trans-High Corporation v. Hightimes Smokeshop  2015 FC 1104

In November 2013, Hightimes Smokeshop was found to have infringed Trans-High Corporation’s “HIGH TIMES” trademark. Despite knowledge of the judgment, the Hightimes continued to use the mark on its shop signage, sales receipts and printed materials. On June 18, 2015, Hightimes and its Officer and Director, Ameen Muhammad each pleaded guilty to five counts of contempt, which resulted in the issuance of a Contempt Order that imposed fines, costs and possible imprisonment for Mr. Muhammad if payments were made in accordance with the order.

No payments of the amounts owed to Trans-High were made, nor did Hightimes pay into Court the fine that was owed under the Contempt Order. Trans-High brought an ex parte motion to enforce the Contempt Order.

The Judge found that Hightimes and Mr. Muhammad had had numerous chances to offer an explanation for their failure to pay, or to demonstrate an inability to pay, and had exhibited a brazen indifference towards the rights of Trans-High and the authority of this Court. The motion was granted, and Mr. Muhammad was ordered to be arrested and imprisoned for a period of not less than 14 days and remain imprisoned until all fines, costs, and other amounts owing under the Contempt Order and the prior judgment had been paid in full.

Trademark Tools Inc. v. Miller Thomson LLP   2016 FC 971

TradeMark Tools Inc. owned the LOGIX design trademark.  Proceedings were initiated to expunge its mark, and to maintain the registration TradeMark Tools had to submit evidence of use for the period from December 19, 2011 to December 19, 2014. The registration was expunged for failure to show use after several time extensions had been granted.

TradeMark Tools appealed, and presented evidence of use.  The mark as registered included a colour claim, and was described as a rectangular bar with a long vertical axis with the text “LOGIX” depicted as shown on the right:

TradeMark Tools’ evidence of use included an affidavit with attached invoices and product depictions, which the affiant stated “use a slightly updated LOGIX trademark”. The Judge acknowledged the jurisprudence that use of a variant of a registered trademark will be considered use of the mark if the variant is not “substantially different” from the registered mark and the “dominant features” of the trade-mark have been preserved.

The updated Logix mark differed from the mark as registered in a number of ways including: different background colors. different colours for the letters, different fonts, the letters are lower case, the distinctive punctuation for the “o” and “i” were missing, the 2 rectangular boxes framing the word logix were absent and the word logix was displayed vertically. The Judge found that the mark was therefore substantially different, and upheld the expungement.

Recent Trademark Cases of Interest - Part 1

Week 1

There were a number of interesting trademark decisions during the past two years, which included the Federal Court granting a rare interlocutory injunction, and providing more clarity regarding place of origin under paragraph 12(1)(b) of the Trademarks Act, which led to the issuance of a new practice notice by the Registrar.

Jamieson Laboratories Ltd v Reckitt Benckiser LLC, 2015 FCA 104

Schiff Nutrition International owned the Canadian mark, “MEGARED” which registered in March of 2011 in association with a line of omega-3 products. The Canadian registration was based on Schiff’s U.S. registration, and Schiff was yet to launch these goods in Canada. In 2012 Reckitt Benckiser wanted to enter the Canadian market and was in acquisition talks with Schiff and Jamieson, and decided to acquire Schiff. In February 2013, Jamieson registered the mark “Omega Red” for “vitamins, minerals, nutritional supplements and dietary supplements” and then launched the new brand in June in Canadian stores. This launch prompted Reckitt to send two warning letters, even though they had yet to launch their “MEGARED” brand in Canada.

In October 2014, Reckitt commenced an action to enforce its trademark rights against Jamieson, which was followed soon after by a motion for an interlocutory injunction. An interlocutory injunction is a court order that forces or compels the other party to stop a certain act until the issue at trial is decided. In a rare decision, the Federal Court granted the injunction, which was upheld on appeal. A party seeking an interlocutory injunction is required to satisfy the three part test set out in RJR -- MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311: 1) a serious issue to be tried, 2) the party seeking the injunction will suffer irreparable harm if the injunction is not granted; and 3) the balance of convenience favours the party seeking the injunction.

The Federal Court of Appeal held irreparable harm would occur if the interlocutory injunction was not granted because Reckitt would never have opportunity to the market its MEGARED line of goods in the absence of Jamieson’s infringing behaviour. Loss of distinctiveness and confusion with Reckitt’s MEGARED mark were also cited as additional reasons.

MC Imports Inc. v. AFOD Ltd., 2016 FCA 60.

MC Imports Inc imports and sells food products under the trademark Lingayen. Lingayen is also a municipality in the Philippines known for shrimp paste products characterised by their aroma and flavour. MC Imports commenced an action against AFOD alleging infringement its trademark. AFOD imports and sells shrimp paste products and other fish paste products. AFOD’s imported products included 49 cases of bagoong alamang, a type of fish sauce, and 49 cases of bagoong guisado. The labels from these products were marked with the AFOD’s trademark Napakasarap, which also included the words “Lingayen Style” in smaller script, immediately below the trade-mark.

At trial, MC Import’s mark was held to be invalid.  The Judge found that since the goods did originate from Lingayen, the mark was clearly descriptive of the product’s place of origin and the perspective of the ordinary consumer was not relevant.

The decision was upheld on appeal. The Federal Court of Appeal held if a trademark is a geographic name that refers to the actual place of origin of the goods or services with which the trade-mark is associated, it is clearly descriptive of place of origin within the meaning of paragraph 12(1)(b) of the Act. The Court noted that it should remain open to all businesses to describe the origin of what they are selling, even if the ordinary consumer may not be previously familiar with that place.