The Supreme Court of Canada has today issued two landmark decisions, thereby providing a somewhat broader scope of protection for famous trademarks in Canada.
In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée (2006 SCC 23) (“Veuve Clicquot”), the famous champagne manufacturer sued a small chain of Quebec-based clothing retailers that have been operating under the names CLIQUOT and LES BOUTIQUES CLIQUOT since 1995.
In Mattel v. 3894207 Canada Inc. (2006 SCC 22), a Montreal-area restaurant owner had filed an application to register the trademark BARBIE’S & Design (SN 736898) in association with “restaurant services, take-out restaurant services, [and] catering and banquet services”, based upon use in Canada since 1992. The Federal Court, at trial and on appeal, had dismissed both famous brand owners' cases, as it held that there was no reasonable likelihood of confusion due to the differences in the parties' wares and services.
The Supreme Court of Canada today dismissed these appeals, and ruled against both famous brand owners. However, the Supreme Court stated that its decisions were based upon the facts and evidence in these particular cases, which included the absence of any instances of actual confusion, and the finding that the allegations of confusion were speculative.
Importantly, the Supreme Court emphasized that a difference in wares or services does not "trump" all other factors. Rather, it stated that all surrounding circumstances – including the factors listed in section 6 of the Canadian Trademarks Act – must be considered, and "different factors will be given different weight in different situations".
In so finding, the Supreme Court explicitly held that the Federal Court of Appeal erred in previous decisions in Pink Panther and Lexus, in stating that the difference in the parties' wares or services will always be a consideration, and that there must be some "resemblance" between the respective wares or services.
The Supreme Court held that VEUVE CLICQUOT and BARBIE are famous marks, but also noted that "Famous marks do not come in one size". Depending upon the inherent nature of the mark and its associated goodwill, some famous marks are less likely to have a scope of protection that extends to unrelated wares or services. On the other hand, famous marks that are inherently strong or that have become famous in various business areas are more likely to be given an expansive scope of protection. Thus, fame does not necessarily conquer all, and confusion remains very much a question of fact.
In Veuve Clicquot, the Supreme Court also reviewed the concept of depreciation of goodwill of a registered trademark, pursuant to section 22 of the Canadian Trademarks Act. As noted by the Supreme Court, this anti-dilution remedy – which is not based upon confusion – has "received surprisingly little judicial attention" since its enactment more than 50 years ago.
The Supreme Court identified four factors that need to be established under section 22, namely that:
- the claimant’s registered trademark was used by the defendant in connection with wares or services, regardless of whether such wares and services are competitive with those of the claimant. The Supreme Court emphasized that the defendant may be liable, even if it does not use an identical mark to that registered by the claimant, so long as the mark is sufficiently similar to evoke a mental association. By not requiring the marks to be identical, the Supreme Court has resolved an unsettled issue, and has expanded the applicability of this cause of action.
- the claimant’s registered trademark is sufficiently well known to have significant goodwill attached to it. The Supreme Court noted that, unlike anti-dilution laws in some other jurisdictions, the trademark need not be famous.
- the claimant’s mark was used in a manner likely to have an effect on that goodwill. The Supreme Court stated that, while the test is not one involving confusion, there must be a likelihood that consumers have a "mental association" or "linkage" between the parties' marks.
- the likely effect would be to depreciate the value of or damage the claimant's goodwill.
While the Supreme Court held that Veuve Clicquot's evidence was not sufficient to prevail on this basis, this decision could lead to an increase in anti-dilution actions based on section 22.
Mark K. Evans, Toronto