Canada gained two new intellectual property laws in June: the Olympic Marks legislation, (officially Bill C-47, the Olympic and Paralympic Marks Act) which provides a new species of “super-protection” for Olympic trade-marks, and a new anti-camcording law, which amends the Criminal Code to prohibit unauthorized recording of a movie (officially Bill C-59).

Calgary – 11:00 MST 

In a recent decision under the CIRA Domain Name Dispute Resolution Policy (CDRP)  (McKee Homes Ltd. vs. Gerlinde Honsek , June 25, 2007), unsatisfied homeowners wanted to set up a customer complaint site directed at the contractor who built their home.   The stated intent of the site was to provide a forum for customers to detail their buying experience “from a customer point of view”. 

The domain name mckeehomes.ca was identical to the contractor’s trade mark MCKEE HOMES and the contractor launched a complaint under the CDRP.  The arbitration panel found that the registrant lacked legitimate interests in the domain name despite the stipulation in the CDRP that legitimate interests can be established if the use is for criticism. 

The panel decided that “The Registrant can achieve her objective of criticism by adopting a domain name that is not identical to Complainant’s mark, or that does not otherwise suggest some type of connection with the Complainant.”  The whole point of a criticism or complaint site is that it does suggest some type of connection to the subject matter of the critique.  How close can a domain name be to the trade-mark and still be able to take advantage of the “criticism” exception in the CDRP?  That is left to future decisions.  

 

Calgary –  10:30 MST

The dot-asia top-level domain (for example: www.yourcompany.asia) is the Asian cousin of the dot-eu domain which was launched for Europe in 2006. The new dot-asia domain will be introduced in phases, starting in October 2007. 

According to the preliminary information provided by the registrar, anyone can be a registrant for dot-asia domains.  In order to satisfy the eligibility requirements, one of the associated contacts for the applied domain must be a “legal entity in Asia” which means either a natural person or an organization such as a corporation within the Asia-Pacific region as defined by ICANN.

Trade-mark owners whose trade-marks were applied for in the designated Asia-Pacific region prior to March 16, 2004 will be eligible for advanced registration during the dot-asia sunrise period . Canadian companies with trade-marks in Asia should review their eligibility and consider submitting their applications to take advantage of the sunrise period.  This kind of preventive measure can save significant costs when compared with chasing cybersquatters after the general registration opens.

 

Calgary – 14:35 MST

In a trade-mark battle between Hyundai and its Canadian auto-parts manufacturer, Hyundai has scored a victory (Cross-Canada Auto Body Supply (Windsor) Limited v. Hyundai Motor America 2007 FC 580 (CanLII)).  Hyundai is the subsidiary of the well-known Korean auto manufacturer, and is engaged in a trade-mark infringement lawsuit with its Canadian auto-parts maker, Cross-Canada Auto Body Supply.  As part of its defence strategy in the infringement lawsuit, Cross-Canada tried to exploit a vulnerability in Hyundai’s Canadian marks.  Cross-Canada used this vulnerability to launch an attack on the validity of five of Hyundai’s trade-marks.  This can be an effective strategy: If Cross-Canada could win an order that the Hyundai marks were invalid, then Hyundai’s infringement lawsuit would fail.  

Ultimately, Hyundai beat back this challenge by tendering expert survey evidence of the public’s perception of the Hyundai marks.  Survey evidence of this type is not cheap, but when a company’s core marks are at stake, this kind of expenditure is necessary.  Hyundai convinced the court with this evidence and upheld the validity of all but one of its marks.

The lessons for business?

• In trade-mark litigation, an effective defence strategy will include all options, including expungement proceedings, and (of course) possible settlement;  
• For the trade-mark owner, expert evidence can be critical to convince the court of the public’s perceptions of the mark.
• Preventive measures (in Hyundai’s case, recording the assignment of the trade-marks earlier could have reduced their vulnerability) are always cheaper than reactive measures.

 

 

Calgary – 12:34 MST

 

 

 

 

 

Decide for yourself: if you see these two products on the grocery store shelf, will you be confused and mistakenly buy generic “Sucralose”, thinking it’s brand-name SPLENDA?

 

 

McNeil Nutritionals, the makers of SPLENDA brand artificial sweetener, lost in court (McNeil Nutritionals, LLC v. Heartland Sweeteners LLC, 2007 WL 1520101 (E.D. Pa.)) in its attempt to block the sales of a competitor’s product.  McNeil alleged that the competitor’s brand infringed on the SPLENDA trade dress with its distinctive yellow packaging and graphics.  Heartland makes private-label sweeteners for a number of retailers, including Giant, Stop & Shop, Food Lion, and Safeway.  The private-label packaging is also yellow, with blue font and white coffee-cup graphics.

The court disagreed with McNeil and denied the injunction application.  One of the court’s findings was that health-conscious consumers who purchase sugar alternatives will take care in making buying decisions and therefore won’t be easily confused.  In Canada, the factors considered by the courts are:

• the existence of good-will in the trade dress or trademark;
• deception of the public due to a misrepresentation, and
• actual or potential damage to the plaintiff.

McNeil’s bid to shut-down a competitor demonstrates the importance of brand recognition in a competitive marketplace.

 

 

Calgary – 11:30 MST

Microsoft’s acquisition last week of aQuantive for $6 billion in cash shows the lengths that technology companies will go to muscle into the online advertising market.  Microsoft paid a substantial premium at $66.50 per share, compared with aQuantive’s closing price on Thursday of $35.87 per share.  The deal follows on the heels of Google’s $3.1 billion acquisition of DoubleClick Inc. in April.  A pair of recent US decisions considered the law relating to search engines and online advertising:

In Site Pro-1, Inc. v. Better Metal, LLC (E.D.N.Y. May 9, 2007), the court decided that keyword triggering and metatag usage in online advertising does not qualify as trademark use and therefore cannot constitute infringement.  For the court, the question was whether the trademark was placed visibly on any goods, displays, containers, or advertisements – if the trademark was not displayed to consumers, no infringement could take place.  This analysis differs from decisions elsewhere in the US, so the debate continues. 

In Perfect 10, Inc. v. Amazon.com, Inc. (9th Cir. May 16, 2007), the Court of Appeal decided that Google’s display of thumbnail images in search results should be considered “fair use” and therefore did not constitute copyright infringement.  While this decision is generally considered good for search engines, the court also left open the question of contributory infringement, and when search engines can take advantage of the defences available under the DMCA .

 

Calgary – 11:45 MST

Maybe imitation is the sincerest form of flattery.  It also may be the most profitable. 

There is much debate about the enforcement of intellectual property rights in China.  Canadian companies engaging in business there require lawyers with local contacts and expertise to manage the various aspects of intellectual property protection: everything from confidentiality agreements governing the use of manufacturing specifications to software piracy and trade-mark enforcement. 

Witness the state-owned Shijingshan Amusement Park which is a full-fledged knock-off of a Disney-style Magic Kingdom outside Beijing (pictures and video here).  Their catchy slogan is self-explanatory: “Disneyland is too far.”

 

Calgary – 15:35 MST

One year ago, the dot-eu domain was launched.  Now, more than 2.5 million registrations later, it is worth reviewing this European-level domain.  For Canadian businesses the dot-eu domain is available where they meet the test for eligibility:  registrants must be a company having its registered office or principal place of business within the EU, or an organisation established within the EU, or an individual resident in the EU. 

With any top-level domain, there are hundreds of disputes and in this case they are managed by the Czech Arbitration Court .

One recent dispute involved a complaint by the owners of the famous ESPRIT trade-mark over the registration of the domain name esprit.eu. The Arbitration Decision ordered the domain name to be transferred back to ESPRIT, even though the word is a generic dictionary word (it means “spirit” in French). The trade-mark owner was able to establish the required elements that the domain name was identical to the Complainant’s mark, and the registrant lacked legitimate interests in the domain name. Having established a lack of legitimate interests, the “bad faith” element was not required under the dot-eu regulations.

 

Calgary – 19:40 MST

There are no shortage of studies ranking the value of brands – usually Coca-Cola is at or near the top and the rest of the world’s brands jockey for position after that.  This time around, Google has edged into first place – maybe a sign of the times.

In the latest study, a Canadian company has made the top 100. The study pegs the brand value of the Royal Bank of Canada at US$13.6 billion, number 39 on the top-100, ahead of popular consumer brands like Pepsi, Nike and Sony. 

Another Canadian favourite, Tim Horton’s, is ranked number 5 in the fast-food category, beating out international franchise icons like Pizza Hut and Burger King. 

While this doesn’t mean that Tim’s or RBC has generated the kind of international recognition enjoyed by Nike, Sony or Pizza Hut, it does mean that some Canadian brands generate enough income for their owners that they are ranked in the big leagues.  If you have recently paid a “convenience fee” at an RBC ATM to get cash to pay for your double-double, then you are doing your part to help Canadian brands.

 

Calgary – 14:24 MST

 

A trade-mark battle over the letter “M” has finally made its way through court, resulting in an injuction against Nissan Canada for passing off.  The Federal Court has issued its decision in BMW Canada Inc. vs. NISSAN Canada Inc. in March 2007.  BMW sued Nissan for infringement of its “M” family of trade-marks, alleging that the use of the letter “M” by Nissan in connection with its Infiniti luxury cars constituted trade-mark infringement and passing off.  BMW’s lawyers compiled survey evidence to show the extent of the reputation of the “M” trade-mark in Canada.  The Court was not convinced that Nissan’s use of the letter “M” met the test for infringement, but agreed with the allegation regarding passing off.  There is a three-part test for passing-off :

• the existence of goodwill,
• deception of the public due to a misrepresentation and
• actual or potential damage to the plaintiff.

The judge was convinced and issued an order to stop Nissan in its tracks.  Nissan promptly applied for a stay of the injunction.

The lessons for business?  Trade-mark searches will uncover potential issues with competitor’s marks and experienced counsel can assist in interpreting the search results and providing guidance.  The cost of rebranding (let alone damages) makes a trade-mark search look like a pretty good preventative measure.

 

Calgary – 15:50 MST

As Canadian companies branch out into foreign markets, it is inevitable that they will confront local trade-mark issues.  It even happens to the titans of the brand-name world. Lawyers for Starbucks Corp. are attempting to stop a new chain of coffee shops in India.  The chain is the brainchild of Shahnaz Husain, an Indian businesswoman, who  plans to use the trade-mark “Starstruck“.

Starbucks is concerned that a coffee-shop chain with a similar name will eat into local market share.  There are plenty of Canadian examples. Take the profusion of knock-offs of Canadian wine  in the Chinese market. A few local wine labels famously billed themselves as ”Whistler Estates, Canada ice wine” and “Toronto Ice Wine”.  The local effect is to erode market share for Canadian companies selling the genuine article.

Addressing international trade-mark issues requires:

• an awareness of the local business environment including the connotations of your trade-mark in the local language and culture;
• an awareness of the local options available for trade-mark protection and dispute resolution; and
• access to expertise in local trade-mark law.

Calgary – 14:52 MST

In a decision released last week, the domain name yellowpage.ca walked away from a challenge mounted by the Yellow Pages Group Co.

In Yellow Pages Group Co. v. Coolfred Co.  (March 13, 2007), the three-member panel reviewed a complaint by the owners of the famous YELLOW PAGES family of trade-marks.  In its complaint, the trade-mark owner alleged that an Ontario registrant registered the domain name yellowpage.ca in violation of the dispute resolution policy.  To succeed, the complainant had to establish three things:

• that the domain name is identical or confusingly similar to the complainant’s trade-mark;
• that the registrant has no legitimate interest in the disputed domain name; and
• that the domain name was registered in “bad faith”.

The trade-mark owner was able to meet the first two tests but failed on the third. Despite creative arguments to paint the registrant as a career cybersquatter, the complainant failed to convince the panel that the domain name was registered in bad faith.  The complaint was dismissed and the registrant held on to the domain name. 

One other point is worth noting: Under paragraph 4.6 of the CDRP, a $5,000 penalty may be imposed on unsuccessful complainants who are engaged in reverse hijacking of domain names.  In this case, the registrant countered with its own claim that Yellow Pages Group should be obliged to pay out the $5,000 to defray the registrant’s costs.  Such a counter-claim can only succeed where the complainant mounted its challenge “unfairly and without colour of right”.  The panel correctly denied this relief, but it serves as a useful reminder of the potential costs of failed complaints.

Calgary – 12:35 MST

 

 

The owner of the trade-mark CHEAP TICKETS has struck out in Canadian Federal Court in a decision handed down on March 2, 2007. This is the second blow, coming after the owner’s loss in a 2003 domain name arbitration decision.  

In Emall.ca Inc. v. Cheap Tickets and Travel Inc. (2007 FC 243), the court dealt with a challenge brought by Emall that the trade-mark CHEAP TICKETS, owned by Cheap Tickets and Travel Inc., was too descriptive or generic to function as a valid trade-mark.  Trade-mark law insists that a trade-mark must be distinctive of the products or services of the trade-mark owner.  Where the trade-mark is descriptive of the products or services themselves or is so generic that it fails to distinguish the owner’s products or services, it can’t function as a trade-mark (just like SHREDDED WHEAT can’t be used as a trade-mark for shredded wheat cereal).  The court agreed with Emall’s challenge and concluded that the trade-marks should never have been registered in the first place.  The registered trade-marks were ordered struck from the register.

In 2003, Cheap Tickets and Travel Inc. launched an unsuccessful CDRP challenge to Emall’s registration of the cheaptickets.ca domain name.  Emall’s lawyers defended, claiming that the trade-mark was generic and that the complaint constituted an attempt to hijack the domain name.  In the arbitration decision, the panel agreed with Emall and dismissed the complaint since the domain name was registered before the Complainant had any rights to the CHEAP TICKETS trade-mark. 

 

Calgary – 14:35 MST

Proposed legislation has been introduced to focus specifically on the protection of Olympic trade-marks.  The Olympic and Paralympic Marks Act (Bill C-47), introduced last week, will attempt to prevent unauthorized use of the Olympic trade-marks by anyone other than corporate licensees who have paid handsomely for the privilege of associating themselves with the 2010 Games.  Oops, I just used two protected words which appear in the Bill, along with Winter, Gold, Silver, Bronze, Medals and Canada’s Games.  In my earlier post, I queried why such legislation was required in light of the extraordinary protection already provided under Section 9 of the Trade-marks Act.  Other commentators have also expressed concern over this special-interest legislation. If passed, the law will grandfather all potentially infringing uses which were in use prior to March 2nd.  Enforcement will be interesting to watch. 

 Calgary – 15:06 MST   

Apple and Cisco announced yesterday that they have inked a Settlement Agreement on the use of the iPhone trademark.  Under the agreement, both companies are free to use the iPhone trademark on their products throughout the world.  Pending lawsuits will be dismissed. 

For the two companies to use the same trademark in the same channel of trade and still maintain distinctiveness for the purposes of trademark law they will have to tread carefully: Cisco could license the use of the trademark to Apple, or Apple could license it to Cisco or they could set up a separate holding company to own the trademark and license it out to both companies.  Financial details are confidential, so we can only speculate about the price Apple had to pay for coming late to this trademark game.

Calgary – 15:46 MST

 

In an earlier post we answered some common questions about trade-marks. Here are a few more practical issues about usage guidelines:

Q: What are “trade-mark usage guidelines”?

A: A set of “trade-mark usage guidelines” is like a rule-book on how a trade-mark should be used and displayed. These guidelines are designed to guide those who might not otherwise know (or care about) the specifics of how the trade-mark should appear. Guidelines of this type might specify the type of font, the particular colours which should be used, the size and relative position, and the placement of the trade-mark in relation to other elements on the label, or page or ad copy. They should go into enough detail to direct someone in the proper and consistent use of the trade-mark.

Q: Why are they necessary?

A: Trade-mark usage guidelines are necessary because consistency in the appearance of the trade-mark is very important to maintain the validity and strength of the mark over time. If a trade-mark changes too much over time or is inconsistent in the way it is used, it may lose distinctiveness and be open to attack by competitors. Look at the distinctive script used in the Coca-cola trademark. It has been used in the same way since the 1880s and strict guidelines ensure that the relative size, colour and shape of the script remain consistent across time and across a multitude of uses, from bottle and pop can labels to every conceivable type of spin-off merchandising.

Q: When would trade-mark usage guidelines be necessary?

A:  Trade-mark usage guidelines are necessary when others within your company, or others outside your company who are licensed to use your mark, need to reproduce the trade-mark regularly in the course of advertising, labelling, packaging or corporate communications. It is a way of setting and maintaining certain standards when you don’t have direct control over the use of the mark. Here are a few examples: In a large company, guidelines can be distributed to the marketing department, so that the person in charge of the online advertising can be reading from the same set of standards as someone producing corporate T-shirts, or someone sending instructions to an ad agency producing magazine ads or the intern designing the annual report. These are all uses that technically take place within the company or within the direct control of the company. Another trade-mark owner may have franchised its business model so that a hundred individual franchisees all use the mark for their own local advertising across the country or in different countries. Usage guidelines will ensure brand consistency across the entire franchise. Guidelines can also be useful for resellers, authorized distributors or service providers.

Q: Can you give me some tips on trade-mark usage guidelines?

A: Yes, when developing trade-mark usage guidelines, you should keep in mind several things: Who is your audience? Present your guidelines in a way that makes sense for those using the mark. It may make sense to keep the guidelines confidential within the company. It may make sense to publish guidelines on the internet, if that is the most effective way to protect the integrity of the brand. Your marketing department may simply need some basic guidance by email, with a designated “official” file attachment containing the approved form of the mark. Or, you may need a more involved explanation of trademark usage. Some companies prepare detailed guidelines that explain exactly what to do and what not to do. Also, look at what marks you are trying to control. Make sure you list and identify the marks governed by the guidelines. Some marks may not need to be covered by the guidelines. Sone marks may be old forms of the trade-mark that you wish to phase out in favour of a new colour scheme or style as part of a controlled evolution to a new brand.

For a few examples of effective trade-mark usage guidelines, see:
Sun Microsystems
Macromedia
Apple

Calgary – 00:06 MST

Cisco has agreed to temporarily suspend its litigation against Apple and talk about possible settlement of the iPhone trademark dispute. Cisco doesn’t appear to be backing down if its recent New York Times ad is any indication of its approach. In early February, Cisco took out a full-page ad for its own iPhone-branded device. Nevertheless, rumours are now circulating that a settlement with Apple is in the works. Perhaps Steve Jobs is in the mood to get along. A few weeks ago Apple arrived at another settlement with Apple Records in the decades-long dispute about their overlapping use of the Apple logo.

Calgary – 14:17 MST

Any owner who has tried to stop copyright and trade-mark infringement can attest to the difficulty of pursuing an effective practical remedy; websites come and go, distributors of pirated software disappear and rematerialize under a different name, and servers are taken down merely to pop up in a different jurisdiction.

Microsoft Canada can chalk up a win in a recent Canadian Federal Court decision (Case name: Microsoft Corporation v. 9038-3746 Quebec Inc., 2006 FC 1509).  In the decision, the Federal court slapped a Quebec-based distributor of pirated Microsoft software with a $700,000 damage award for copyright and trade-mark infringement.  The award was based on the maximum statutory damages under the Copyright Act of $20,000 per infringement, for a total of half a million dollars, plus punitive damages of $200,000.  Cerrelli, the director of the corporate defendant was personally liable with the corporation, due to his personal involvement and knowledge of the infringement.  The total damages may not come close to Microsoft’s actual loss in sales, nor the infringer’s profits, but the number is enough to drive a point home.

This case underscores two points: there can be a practical and effective remedy for copyright infringement, with a carefully prepared case. Secondly, directors can and will be held personally liable with their corporations, when the circumstances are right.  

 

Calgary – 11:20 MST

Wired has picked up on the Canadian site zunior.com which operates an online music store dedicated to Canadian independent music.  The obvious question is whether the name ZUNIOR may be confusingly similar with the ZUNE trade-mark of Microsoft fame.   

According to Wired, Dave Ullrich isn’t worried: “We’ve been selling digital music [since] 2004… well before the Zune.  I always assumed someone there [at Microsoft] must have heard of us, but maybe not.  [When] I heard of the Zune, I immediately applied for copyright but I don’t really know if it matters.”

He means trade-mark, not copyright.  But anyway, he’s got the right form of protection, even if the wrong terminology.  Whether this is on Microsoft’s radar screen is anybody’s guess but chances are, it is.  Would Microsoft take a run at him?  On the face of it, they shouldn’t be entitled to if he’s been using it since 2004.  But this wouldn’t be the first time they used the force of legal persuasion, even when trade-mark law isn’t technically on their side.  They shut down an attempt to trade-mark MICROSOFT for use with soft contact lenses, even though it’s safe to say they’ll never be in the contact lens business. 

Calgary - 13:08 MST

In what is the first jury conviction of a “phisher” under the US CAN-SPAM Act of 2003, Jeffrey Goodin faces significant jail time when the case goes to sentencing in June, 2007.  Goodin used an elaborate phishing scheme to defraud AOL users out of sensitive credit card and personal information.  Aside from the obvious financial harm done to victims whose credit card information is harvested and misused, this kind of scheme invariably includes trade-mark infringement and other intellectual property rights violations.  In this case, Goodin sent authentic-looking email (displaying the AOL trade-mark) to AOL customers posing as AOL’s billing department.  Victims were directed to a fraudulent web page (also displaying AOL trade-marks), where their credit card information was collected.

While there is no anti-spam legislation in Canada, the problem is just as pervasive here as it is south of the border.  A few weeks ago, the Federal Department of Finance issued a news release warning of an email fraud scheme in which a phisher tried to lure victims to disclose personal financial information through a “tax refund request” form.  This is just one example among many of the overlap of privacy rights, internet law and intellectual property law in the world of phishing.

Calgary – 22:28 MST