If the health of an industry is measured by the litigation it spawns, then the app and gaming economy is going strong:

• Copyright: Fantasy Flight Publishing has sued a European app-developer, Puffin Software, for alleged infringement of copyright in a medieval-themed game (Fantasy Flight Publishing, Inc. v. Puffin Software et al. U.S. District Court, District of Minnesota Case No. 11-cv-01928, Filed July 15, 2011). Fantasy Flight claims that Puffin’s iPad title “Viking Lords” is an infringement of copyright in the board game BattleLore owned by Fantasy Flight. In the claim, Puffin allegedly approached Fantasy Flight to pitch an iPad version of BattleLore, and when there was no uptake, Puffin decided to go ahead and publish the game under its own title.  The case will involve an analysis of the elements of each game, and a breakdown of functional and original elements, as in the Sony case (below).
• Patent: App-developer Zynga has been sued in Segan LLC v. Zyna Inc. for alleged infringement of Segan’s U.S. Patent No. 7,054,928, which was issued for a system for accessing “enhancement content” on the internet. The claim alleges that Zynga titles such as FarmVille, PetVille, and FrontierVille infringe the patent.
• Copyright: In Dath v. Sony Computer Entertainment America Inc., the US Ninth Circuit Court of Appeals upheld the lower-court decision in a copyright infringement case involving the Sony PS2 and PSP title “God of War”. The plaintiffs alleged that Sony infringed copyright in their written works about war between Sparta and Athens. The plaintiffs could not show actual copying, so they had to rely on the US concept of access and substantial similarity. Remember, copyright does not protect ideas, but merely the form and expression of ideas. In this case, there was no substantial similarity of expression of ideas. In this analysis, the court reviewed elements of expression such as plot, themes, dialogue, mood, settings and characters, and concluded that the works were not similar and no infringement occurred. 

Calgary – 07:00 MDT

 

In our earlier post (Myriad Issues: Patentability of Isolated DNA), we reviewed the US decision which causes ripples through the life sciences world by deciding that isolated DNA sequences were not patentable subject matter since they were “products of nature”. Myriad’s invention covers two isolated human genes, BRCA1 and BRCA2, and mutations in these genes are associated with a predisposition to breast and ovarian cancers. The recent decision by the US Federal Circuit Court of Appeals in The Association For Molecular Pathology v. USPTO & Myriad has reversed the lower court’s finding. The appeals court held last week that isolated DNA can be proper subject matter for patentability, provided the invention meets other criteria such as novelty and non-obviousness. Here, the inventors had isolated the DNA sequences and in doing so had changed the DNA through inherently transformative steps, thus bringing the invention into patent-eligible subject matter. 

Calgary – 07:00 MDT

 

 

In a recent Federal Court of Appeal decision in Canada (Corlac Inc. and National Oil Well Canada Ltd. v. Weatherford Canada Ltd., 2011 FCA 228) the court clarified whether there is a general duty of good faith on the part of patent applicants in Canada. Paragraph 73(1)(a) of the Patent Act is clear that a patent application is considered abandoned if the applicant does not “reply in good faith” to the examiner. However, once the patent issues, any “good faith” duty is extinguished since the duty relates only to good faith in the prosecution of the patent application. The court has clarified that any alleged breach of this duty cannot be used to attack the validity of an issued patent. Post-issuance, other remedies must be used, such as section 53(1), for allegations of misrepresentation.

In Canada, this clarification of the law helps to allay fears that an “inequitable conduct” doctrine was creeping into Canadian law (for example, G.D. Searle & Co.  et al. v. Novopharm Limited et al. (in 2007) and Janssen-Ortho Inc. v. Apotex Inc. (in 2008) both explored these concepts).

This marks a distinction from US patent law, where the inequitable conduct doctrine can be used to attack an issued patent. Even in the US, the United States Court of Appeals for the Federal Circuit in Therasense, Inc. v. Becton, Dickinson and Company (Fed. Cir. 2011), has scaled back the impact of this approach, calling it the “atomic bomb” of patent law. In patent law, this is one bomb that has been defused in Canada.

Calgary – 07:00 MDT

 

 

Can you get a trade-mark for .doc, .pdf or other file extensions? To follow up on our earlier post (Can File Extensions be Trade-marked?), in the US, the answer is “No”, as the makers of AutoCAD software discovered in 2009, when they tried to enforce a trade-mark for the file extension .dwg (referring to “drawing”), which is the file format for the AutoCAD software product. There, the Court made it clear that file extensions are functional and thus cannot be enforced as trade-marks. Autodesk has also failed to obtain a registration for the mark DWG at the USPTO because DWG is descriptive of software which assists in the creation of drawings which use a .dwg file extension. So far, their application to register DWG has been denied for these reasons. 

In Canada, the answer is apparently “Yes” since Autodesk has obtained a registered trade-mark for the mark DWG for use in association with “Computer programs and software in the field of computer aided design and instruction manuals sold as a unit.”  Canadian law generally accords with US law on the subject of descriptiveness and functionality.  In the Supreme Court’s famous decision in Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 (CanLII), (the Lego case), the Court was clear that Lego building blocks are not protectable as trade-marks in Canada, on the grounds that the shape of the blocks is purely functional in nature, and the Trade-marks Act is clear that descriptive marks are not registrable. Why this analysis does not apply to file extensions is not clear, but any attempt by Autodesk to assert a trade-mark infringement claim against a functional or descriptive use of .dwg as a file extension would likely run into that defence.

 

 

The Canadian Internet Registration Authority (CIRA) has announced a new CDRP Policy and Rules, which will take effect August 22, 2011. Under the new dispute resolution procedure, the online filing system has been streamlined and some concepts have been updated to bring them in line with the UDRP. Among the other changes are:

1. Test for what is “Confusingly Similar” The Policy uses a test of “narrow resemblance” to determine whether one domain name is confusingly similar to a trade-mark. This moves the test away from Canadian trademark law concepts, and implements a uniform standard to be used by all arbitrators.
2. “Commercial Gain” is now a factor to determine “bad faith”.
3. Generic Domain Names. Previously, panelists had imposed a requirement to use generic domain names in order to establish a legitimate interest. This has been removed.

CIRA’s summary of the changes can be found here  

Related Reading: Domain Names in Canada: Don’t Mess with the UFC

Calgary – 07:00 MDT

 

In a recent US decision (Murphy v. Millenium Radio, 2011 WL 2315128 (June 14, 2011)), the Third Circuit Court of Appeals decided that removing the name of a photographer from a photo constitutes a violation of the DMCA. In this case, a photographer took pictures of two local radio personalities for publication in a magazine. The photo was later scanned and uploaded by the radio station, but in the scanning process, the photographer’s name was cropped out, without the artist’s authorization. The court found that this breached § 1202 of the DMCA which deals with “Integrity of copyright management information”.

In Canada, this would be covered by Section 14.1 of the Copyright Act, which addresses “moral rights”. Under this heading, an author or creator of a work has the right to be associated with the work as its author by name, or under a pseudonym, or the right to remain anonymous. Tampering with the right of a photographer to be associated with the work would infringe moral rights in Canada.

Calgary – 07:00 MDT

There is an ongoing brand battle between the large American retailer Target and Canadian retailer Target Apparel over the Canadian rights to the TARGET trade-mark.  This is one of those disputes that is becoming more well-known than the brands themselves. Of the first dozen hits in a Google search for “Target Apparel”, 10 of them are related to the lawsuit rather than the actual products. In the case of Target Brands Inc. v. Fairweather Ltd. the US retailer applied to a Canadian court to block all use of the TARGET APPAREL brand in Canada pending the outcome of the lawsuit. In a recent decision in Canadian Federal Court, the court refused to grant the interim injuction against the Canadian retailer, saying the US company failed to prove that it will suffer “irreparable harm” if the Canadian company continues to use the TARGET APPAREL mark.  So the Canadian company will continue to use the mark while the matter goes to trial… or is settled.

One interesting element that came out of this decision was Target’s practice of licensing the little guys. Possibly in preparation for litigation, the US retailer went around to other small Canadian retailers who were using “Target” as part of their business name. Some of these users were confronted by Target and entered into license agreements where they acknowledged Target’s ownership of the TARGET mark, and were given a licence to continue using the name. This applied, for example, to Target Food Stores & Gas Ltd., which operates two small convenience stores now licensed by Target Brands Inc.  While this wasn’t conclusive in the injunction application, the court noted that Target’s practice of licensing small businesses using the TARGET mark did undercut its argument that it was harmed by the perception that Target Apparel stores were somehow linked with Target.

Calgary – 07:00 MDT

 

In Louis Vuitton Malletier S.A. et al. and Singga Enterprises (Canada) Inc., the Federal Court sent a strong message to counterfeiters. This is a case of infringement of copyright and trade-mark rights, arising from the sale of counterfeit copies of Louis Vuitton and Burberry handbags through online sales and operations in Vancouver, Calgary and Edmonton. The Trade-marks Act provides for an award of damages or profits in relation to the sale of infringing goods. The Copyright Act provides for an award of both damages and profits from the sale of infringing goods, or statutory damages between $500 to $20,000 per infringed work. In this case, the Federal Court awarded Louis Vuitton and Burberry a total of over $2.4 million in damages against the defendants, catching both the corporate and personal defendants in the award.  

Related Reading: Retail Therapy for Brand Owners: Counterfeit Goods & Director Liability 

Calgary – 07:00 MDT

 

 

In the US, a few updates on the patent front:

• The House version of the patent reform legislation passed (the Leahy-Smith America Invents Act ) in late June, with broad support. You may recall that the US Senate passed its own version of the patent reform bill in March. The House and Senate bills must now be reconciled, with another vote on compromise legislation before it becomes law.
• In a recent US decision, a court found that “induced infringement” can be established without showing actual knowledge of the infringed patent.  “Induced infringement” under US patent law traditionally requires that a party actually knows that the infringed patent exists.  In Global-Tech Appliances, Inc. v. SEB S.A. (PDF), the US Supreme Court decided that wilful blindness will be enough to establish induced infringement. Canadian inventors should be aware that actively ignoring information or taking deliberate actions to avoid learning of a competitors patent will not help in avoiding a finding of induced infringement, and thorough patent searching is required when developing patentable inventions.

Related Reading: Willful Blindness of a Patent Is Sufficient to Show Knowledge of That Patent for Purposes of Induced Infringement (Licensing Executives Society)

Calgary – 07:00 MT

What constitutes “use” of a trade-mark in Canada? Under Canadian trade-mark law, a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services. 

The Federal Court of Canada decision in TSA Stores Inc. v. Registrar of Trade-marks (2011 FC 273) adopts a liberal definition of “use”. 

TSA owns the registered mark THE SPORTS AUTHORITY in association with retail-store services in Canada. It operated six stores in Canada, but the stores were closed in 2000. It tried to maintain the validity of its mark by relying on display of the mark on a website that was accessible from Canada. In this case, TSA was able to show “use” of the mark through the operation of an information website through which US online sales were possible, but which did not permit Canadian sales. The court reasoned that “services” is a broad term and as long as some consumers or purchasers receive a benefit from an activity, then it qualifies as a “service” for the purpose of showing use of a mark. In other words, for services, use of a mark need not involve any sales or advertising, and could be established by any incidental activity by which some members of the Canadian consuming public receive a benefit.

What happens if we couple this with the decision in Masterpiece. Does this mean that any website on the internet which is accessible in Canada from which some Canadians derive some benefit, may establish trade-mark “use” in Canada? And is such use sufficient to invalidate a registered mark in Canada if it pre-dated the date-of-first-use of the registered mark?  Arguably, this would only apply in the case of services, but it certainly appears to lower the bar to establishing use in Canada and makes it difficult for trade-mark owners to assess the risks when filing a trade-mark application. This seems to raise more questions that it settles, and further clarity is required from the courts on this question.

Calgary – 07:00 MT

 

A patent owner, VS Technologies LLC, claims that Twitter has infringed its patent, and the company sued Twitter in the State of Virginia.

When Twitter users sign-on, they agree to certain Terms of Service. These Terms of Service specify that any claims by a user must be litigated in California. The inventor of the patent signed-on as a Twitter user, so Twitter claimed that the patent infringement suit should be moved from Virginia to Twitter’s home jurisdiction of California, based on the forum selection clause in the Terms of Service.

A recent US decision VS Technologies LLC v. Twitter Inc. has blocked this transfer request, reasoning that these Terms of Service do not govern patent infringement claims, that VS Technologies never assented to the Terms of Service, and that the patent owner is not seeking to enforce the Terms of Service. The court also made it clear that it did not want to establish a precedent that would apply to all social networking patent infringement claims.  

Business lessons? Online service-providers, social-networking sites and cloud-computing services should take note that forum-selection clauses do not necessarily provide blanket coverage. Forum-selection clauses have been upheld for other purposes – for example, if the claim arises in connection with a complaint over some part of the service itself – but this type of clause should not be relied upon as a defence against patent claims.

Calgary – 07:00 MT

 

This is the last in our series on the recent landmark SCC decision in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27. There is one point that is worth emphasizing from this decision, and that relates to the question of when an earlier common-law or unregistered mark can trump a later registered mark. 

Bear with me as we get into the thickets of the Canadian Trade-marks Act. The SCC decision to expunge a registered mark rested in part on the analysis that prior “use” under Section 16(a) of the Act was sufficient to displace the later registration. To put this another way, use since 2007 of the trade-mark XYZ (No. 1) for shoes can be used to challenge and cancel a registration for the trade-mark XYZ (No. 2) for shoes, when that later registration of XYZ (No. 2) was based on use since 2009. With me so far? This comes straight out of the reference in the decision: “Because Masterpiece Inc.’s use preceded Alavida’s proposed use, Alavida was not entitled under s. 16(3) to registration of its trade-mark.” The ambit of Section 16(3) includes not only a mark that has been used in Canada, but also a mark that has been made known in Canada; and it includes any trade-name that had been previously used in Canada. The term “made known” has a special meaning. A mark is “made known” only if it is used outside Canada and (1) the associated products are distributed in Canada, or (2) the associated products or services are advertised in print or through “radio broadcasts ordinarily received in Canada”, and it has become well known in Canada by reason of the distribution or advertising. So this test has to be met in order for an earlier mark that is simply “made known” to trump a later registration.

It’s also worth noting that previous use or making known of a confusing trade-mark will not invalidate a registration if that mark or trade-name has been abandoned, and it’s up to the owner of the earlier mark to establish that he had not abandoned the confusing trade-mark or trade-name. 

Lessons for business?

• Full trade-mark clearance searches are an essential step before you apply to register your mark. However, to be effective these searches must include common-law sources that can catch marks that are used or “made known”. Even then, it’s important to understand that a search cannot necessarily reveal whether such a mark would meet the test described above, and further research may be required.

Calgary – 07:00 MT

 

Canadian trade-mark owners can register their marks in the United States, through the USPTO . It’s important to remember that, as a Canadian business, registration of your mark in Canada does not afford any protection or trade-mark rights in the US, so a separate US application must be filed.  After application and registration of your mark, a declaration is required at the 5-year mark. This is known as a Section 8 & 15 combined declaration, which requires the trade-mark owner to file specimens to show that the mark has been used in the US. Here’s a tip: When preparing your initial trade-mark application and designing packaging and labelling for the products, it’s important to keep in mind the eventual requirement to file specimens of use, to ensure that the specimens of the mark-as-used will show use of the mark-as-registered.

Consider the case of the TTAB decision in In re E.A. Sween Company, where the applicant registered the mark DELI EXPRESS SAN LUIS for sweet rolls (shown at left). However, the specimen of use showed use of the DELI EXPRESS mark as a visually distinct mark in red, in the top left corner of the package label, and the words SAN LUIS to the right, separated spatially in such a way that the TTAB concluded that the two marks conveyed “two separate commercial impressions.” Thus, the applicant’s drawing of the mark as registered was not considered a “substantially exact representation” of the mark as used in commerce.

Contact Field Law for assistance with screening, filing and registering US trade-marks.

Calgary – 07:00 MDT 

 

 

 

Apple Inc. has a well-known family of iMarks registered in Canada, the US and around the world, including iTunes, iMac, iPhone, iPod and iPad. In Canada, it has even applied to register the iPad screen as a trade-mark under Application No. 1488599 (the IPAD TRADE DRESS ICON SCREEN Design) as well as the iPhone graphic (shown at right), under Application No. 1481515.

• The latest addition to the family is the iCloud mark. In the US, a company called iCloud Communications has sued Apple for alleged trade-mark infringement in the US District Court in Arizona. (See a copy of the Complaint Here). iCloud Communications claims use since 2005, though it does not have any registered marks. Prior to launching its new iCloud service, Apple bought the domain name icloud.com from Xcerion AB, a Swedish cloud-computing company, and there’s a pretty good bet that Apple has also acquired Xcerion’s registered US mark for ICLOUD which claims a priority date of November 29, 2007, for use with information management software.  Though the registration is still in the name of Xcerion, an Apple inhouse lawyer is named as the attorney of record. This strategic acquisition would allow Apple to rely on the earlier use claimed by this mark.
• In a recent Canadian case, Apple was the earlier user – in this case, it used its family of registered iTunes marks to oppose the application for the mark TUNECARDZ by Digi Media Cardz Inc., a BC company, for use with collectible cards allowing the card owner to download music. In the decision released by the Trade-marks Opposition Board (TMOB) (Apple Inc. v Digi Media Cardz Inc., 2011 TMOB 72 ), Apple prevailed by showing confusion between TUNECARDZ and its registered Canadian marks ITUNES and ITUNES MUSIC CARD for music downloads.

Apple has a long history of fighting strategic trade-mark battles, including for its core brand APPLE, starting in 1978, against Apple Records), against Cisco for its now-iconic iPhone trade-mark , and against Fujitsu, for the iPad trade-mark. Lessons for business? In many of these cases, the mark was already owned by someone else when Apple decided it was going to be an Apple brand.  This history is, in many ways, a reflection of the company’s approach to business: they did not invent tablet computing, smartphones, online music sales or the MP3 player. They simply stepped in, elbowed the early movers aside, and took over the top position. 

Calgary – 07:00 MT

 

Here’s something that we’re likely to see more of: the app patent dispute. Mobile apps are regularly mixed up in copyright or trade-mark complaints, trade secret disputes (occasionally), and privacy issues (often). In Lodsys LLC. V. Combay Inc. et al., an allegation of patent infringement has been levelled at a group of iPhone, iPad and Android app developers, including the publishers of the popular titles “Twitterific”, “Quickoffice” and “Mega Poker Online Texas Holdem”. According to the complaint, the targeted apps infringe a method patent owned by Lodsys, entitled “Methods and systems for gathering information from units of a commodity across a network” (US Patent #772,078). One defence to such an allegation is that the patent is licensed by the alleged infringer, and that’s where Apple comes in. Apple has reportedly intervened to raise the defence that the use by the app developers is covered by a license that Apple previously negotiated with the patent owner.  Another defence is that the patent in question is invalid and another company in an unrelated lawsuit is challenging the validity of Lodsys’s patent portfolio.

Calgary – 07:00 MT

 

In our earlier post – Intellectual Property & Agriculture – we reviewed the issues around patented herbicide-resistant seeds. A recent Federal Court of Appeal decision deals with patented machinery in the agriculture industry. To be patentable, an invention cannot be obvious to someone who is skilled in that industry. In other words, the invention must be “non-obvious”. In Bridgeview Manufacturing Inc. v. Central Alberta Hay Centre 2010 FCA 188, the court reviewed the question of whether a particular bale processor infringed the patent owned by Bridgeview. The alleged infringer fought back by saying the patent was invalid due to obviousness.  In Canada, the court uses a four-part test to determine whether a patent is invalid for obviousness:

1. Identify the hypothetical “person skilled in the art” and the relevant common general knowledge of that person. 
2. Identify the “inventive concept” of the patented claim .
3. Are there any differences between the “state of the art” and the “inventive concept” of the claim in the patent?
4. Viewed without any knowledge of the alleged invention as claimed, would those differences be obvious to the “person skilled in the art” or do they require any degree of invention?

By this analysis, the court found that the patent was not invalid for obviousness and the appeal was allowed on that point.

Calgary – 07:00 MT 

 

 

Artists mash-up images, text and audio all the time and have been doing so for many years. When is “appropriation” considered “transformative”?  If you use someone else’s image to create something, is the new work simply a copy of the original image, or is it transformed into a new original work of art? 

If it’s just a slavish copy, then you need consent of the owner of the original image. Without that consent, you might be infringing copyright.  If it’s transformative, then is the appropriation forgiven since it results in something new and original?

Consider the case of photographer Patrick Cariou and appropriation artist Richard Prince. Earlier this year, a US District Court sided with Cariou in his copyright claim against Prince, based on Prince’s use of Cariou’s photographs of Rastafarians. The court was clear that the scope of Prince’s copying was substantial compared with the “slight transformative value”. In other words, there was a whole lot of appropriation and not much transformation. As a result, the fair use defence didn’t hold up.

The next question is the obvious one: where is the line between the two?  Andy Warhol made a career out of appropriation. His works - which borrowed everything from Campbell’s soup cans to press photos of Jackie Kennedy - were the subject of numerous complaints and lawsuits, all of which reportedly settled out of court. Artist Jeff Koons has also made a successful career out of transformative works, though he has often fallen on the wrong side of court decisions. In the 2006 US Court of Appeals decision in Blanch v. Koons, Koons successfully raised a “fair use” defence. This claim arose from the use of an image of the plaintiff’s copyright-protected photograph in a Koons collage painting entitled “Easyfun-Ethereal”. The court considered this use to be highly transformative, where the original image was used as “raw material” for a completely different type of work.

Calgary – 07:00 MT

 

Last week the US Supreme Court (SCOTUS) released its decision in the long-running patent infringement case between i4i, a Canadian software company, and Microsoft. (We’ve been following the case here). Microsoft has now run out of legal options. At trial, the jury found that Microsoft willfully infringed i4i’s software patent and that Microsoft failed to prove invalidity of the patent.  Microsoft appealed the original trial decision. That appeal was dismissed. Microsoft filed another appeal for a en banc re-hearing. That appeal was dismissed. Microsoft challenged the validity of the i4i patent. The patent was upheld, and the USPTO denied Microsoft’s second application for a re-examination. Microsoft appealed up to the SCOTUS and that appeal has now been dismissed (see the full decision here). In the US, the Patent Act is clear that a patent is presumed to be valid and in order to establish invalidity, the party who is challenging the patent must present “clear and convincing evidence”. Microsoft failed to provide such evidence and the original infringement decision stands.

One of the interesting elements of the case was Microsoft’s allegation that i4i had previously sold software (known as S4) which embodied the patented invention. If true, this would have impacted the validity of the patent that Microsoft had infringed. The S4 source code had been destroyed years before the patent infringement litigation, so evidence came from S4’s two inventors, both of whom testified that the S4 software did not embody the invention claimed in the infringed patent.  Microsoft now has to face the $290 million damage award and permanent injunction that bars the sales of certain versions of Microsoft Word.

Calgary – 07:00 MT 

It’s worth reviewing the concept of confusion in this landmark case. Confusion is a central concept in Canadian trade-mark law. 

The Supreme Court of Canada’s (SCC) decision in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 made it clear that, when comparing two trade-marks, the test for confusion is based upon the hypothetical assumption that the marks are used in the same geographical area, regardless of whether this is actually the case.  For the owner of a registered mark to enjoy exclusive use throughout Canada, that mark can’t be confusing with another trade‑mark anywhere in the country (registered or unregistered).  The actual location where the marks are used is not relevant for the purpose of this test, since the court assumes for the purpose of the test that the marks were used in the same place.

Next, remember it is the use of a trade‑mark and not registration itself that confers priority and the exclusive right to the trade‑mark in Canada.  For the first person to use a mark in Canada, trade-mark rights are granted in two ways.  First, you can earn the right to register a trade‑mark when you are the first user of that mark.  Second, you can also oppose applications of other marks, or apply to cancel someone else’s registration, based on your earlier use of a confusing trade‑mark. 

Calgary – 07:00 MT

 

 

Last week the Supreme Court of Canada (SCC) released a significant trade-mark decision in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27.  It represents a major review of the legal concept of “confusion” in trade-mark law, as well as the vexing question of registered versus unregistered or “common law” trade-mark rights.

In this case, Masterpiece starting using its MASTERPIECE brand in 2001 in Calgary, Alberta, for retirement residences. However, the brand owner did not register the marks. A few years later, another company, Alavida, based in Ottawa, Ontario, applied to register the mark MASTERPIECE LIVING for similar services, and that application matured to registration in 2007, claiming use since 2006. So we have unregistered marks used since 2001 in Calgary, and a registered mark used since 2006 in Ottawa. Which one should prevail? 

The SCC agreed with Masterpiece that Alavida’s registered mark (the later one, based in Ottawa) should be cancelled, based on confusion with the earlier unregistered mark. This is because the later registered mark failed to survive the confusion analysis, on the assumption that both marks are used in the same geographic area. In reality, the marks were never used in the same region. However, for an owner of a registered trade-mark to have exclusive rights to the trade-mark across Canada, that mark cannot be confusing with another previously used trade-mark anywhere in Canada.  Even if that previously used mark is not registered.  Put another way, an unregistered trade-mark in Canada can be the basis of a challenge to a registered mark.  

Lessons for business:

• This case makes it clear that common-law trade-mark rights are enforceable in Canada. That’s good news for brand owners. However, it’s also important to remember that with an earlier application and registration, Masterpiece would have avoided this lengthy and costly battle since their registration would have blocked the later entry of Alavida’s trade-mark application.
• The importance of effective trade-mark searching is critical to a successful trade-mark application. Consider clearance searches and an availaibility opinion as part of your risk mitigation strategies for the launch of a new brand, or the registration of a long-standing unregistered mark.

Calgary – 07:00 MST