The Federal Court recently decided against BBM Canada ("BBM") in its first ever ruling on an "application" to the Court for trademark infringement, passing-off and depreciation of goodwill, in BBM Canada v. Research In Motion Ltd. 2012 FC 666.
Proceedings for trademark infringement, passing-off and depreciation of goodwill are within the concurrent jurisdiction of the Federal Court and the superior courts of the provinces of Canada. Such proceedings are typically brought by way of an "action," which in the Federal Court is governed by specific provisions that provide for an exchange of detailed pleadings between the parties, documentary and oral discoveries, various interim motions and ultimately a trial involving oral testimony. While the Federal Court attempts to ensure that the trial on a given action is heard within two years of commencement of the action, in reality it often takes much longer for an "action" to proceed to trial.
In addition to "actions," the Federal Court also allows for proceedings to be brought by way of "application," which provides for a more summary and expeditious determination of the proceeding by way of affidavit evidence rather than oral testimony. "Applications" in the trademark context have traditionally involved appeals from decisions of the Registrar of Trademarks and validity challenges of registered trademark registrations. An application generally provides for a fast track determination of the issues at hand, within a few months depending on the circumstances. The "application" procedure had not previously been used by trademark owners to resolve disputes involving claims of trademark infringement, passing-off and/or depreciation of goodwill.
In the present case, BBM brought proceedings, commenced in August 2010, by way of "application" in the Federal Court, in which it claimed that Research In Motion Limited ("RIM"), in using the acronym BBM for its Blackberry Messenger service, had infringed BBM's trademark BBM, which had been used in Canada since 1944 in association with the measurement of circulation, coverage and audience of all types of advertising media. As a part of its application, BBM sought damages, declaratory and injunctive relief for infringement, depreciation of goodwill and passing-off.
Rather than providing for a quick, summary resolution within a few months, and perhaps not surprisingly given the previously untested use of the application process in infringement disputes, the proceeding advanced through a series of motions to the Court where the parties fought over whether or not BBM was entitled to, or should in the circumstances of the case, proceed by way of application rather than action.
On motion by RIM, a Federal Court judge initially ordered that BBM could not proceed by way of application, and ordered that the matter proceed as an action (under the Federal Court Rules ("Rules") relating to actions) and that the Notice of Application would serve as a Statement of Claim (as the originating document required for an action).
As reported in the July/August 2011 issue of Canadian ReMARKS, BBM appealed the finding to the Federal Court of Appeal, and was rewarded with a ruling by the Federal Court of Appeal (BBM Canada v. Research In Motion Limited, 2011 FCA 151 (May 5, 2011)) that BBM could indeed, under the Rules and the relevant section of the Trademarks Act, proceed by way of application. The Court of Appeal did, however, state in obiter that, notwithstanding the ability of a litigant to bring a proceeding for infringement by way of application, the fact that a litigant may choose to do so does not mean that every case is amenable to adjudication by application. Therefore, having consideration to the relief sought, the extent credibility is an issue and the need for discovery, proceeding by application may in certain circumstances be inappropriate, and motions may be brought to challenge the appropriateness of proceeding by application.
Taking its cue from the Court of Appeal, RIM brought a motion to convert the application to an action. RIM's motion was dismissed by the Court in a ruling in July 2011 (BBM Canada v. Research In Motion Limited, 2011 FC 960), and the proceeding continued by way of application.
The application finally came on for hearing in January 2012, just under one and a half years from commencement of the application. While not an ideal "summary" time frame, the clarification obtained from the Court in its rulings on procedural points will hopefully allow for future applications of this type to proceed much more expeditiously, with final decisions being rendered within months rather than years.
Unfortunately for BBM, while it was successful in forcing its proceeding through the Federal Courts by way of application, it was not ultimately successful in its claim of trademark infringement, passing off and depreciation of goodwill. On the merits of the application, the Court found that confusion between the trademarks was unlikely, even though the trademarks were identical, as the wares and services provided by BBM and RIM varied significantly.
The Court found that, while the BBM trademark may have acquired distinctiveness in its specific brand of broadcast measurement services (impartial measurement of rating data and sophisticated market research) within the broadcasting and advertising industries, the extent to which the trademark had become known was limited, as it did not advertise with the public in general and it was prohibited, by its own Rules and Regulations, from being mentioned in broadcasting media. BBM's relevant universe of consumers, which it held did not include "recruits" from the public who record their television viewing and radio listening habits, was held to be limited to the consumers of BBM's services, i.e. advertisers, advertising and broadcast agencies.
In contrast, the Court noted that RIM did not engage in data collection or research in competition with BBM, but rather that RIM manufactured smartphones and related applications, such as the BlackBerry Messenger, which was intended for a broad range of consumers from among the general public. Further, the Court noted that RIM's promotion of BBM was always accompanied by its own name and reference to BlackBerry devices.
After also noting that acronyms are generally entitled to a narrow ambit of protection, and that BBM's customers were sophisticated and well-defined such that the usual assessment of confusion based on the "hurried consumer" would not apply, the Court concluded that BBM was only entitled to a narrow ambit of protection in its specific brand of broadcast measurement services.
As the Court found no likelihood of confusion, BBM's claim for trademark infringement was rejected. Similarly, the Court held that BBM had failed to establish passing-off and depreciation of goodwill.
This proceeding, while unsuccessful for BBM, has opened the door for trademark owners to bring proceedings for infringement, passing-off and depreciation of goodwill by means of an "application" to the Court, given that the Federal Court of Appeal and the Federal Court have clearly established that a trademark owner is entitled to bring such an application, and that the Court will not convert the proceeding to an action as a matter of course. Such applications, heard and resolved summarily and relatively quickly, on the basis of affidavit evidence, will allow trademark owners, in the right circumstances, to resolve trademark infringement matters in Canada in a more expeditious and cost-effective way.
However, care must always be taken in selecting matters that may be appropriate for determination under the application process, which does not allow for any discovery of the parties involved and is based wholly on affidavit evidence and cross-examination of the same. For example, where it is important for a party to conduct discoveries and/or obtain admissions to build its case, or where credibility may be too difficult to resolve summarily, proceeding by way of application may not be appropriate and may well be subject to conversion to an action with potential cost consequences. It is also important that the trademark owner be confident that it can properly establish the whole of its case on affidavit evidence alone.
Karen F. MacDonald, Vancouver
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