Archive for October, 2013

Vulnerabilities of Descriptive Marks

A trade-mark must be distinctive – if it is not, it is at risk of being unregistrable, and if for some reason it is registered, it is vulnerable to attack by a competitor.

In Bodum USA, Inc. v. Meyer Housewares Canada Inc. 2013 FCA 240 (appeal from 2012 FC 1450), Bodum USA, Inc. sued Meyer Housewares Canada Inc. in the Federal Court for infringement of the registered trade-mark “FRENCH PRESS” (TMA 475,721) as well as for passing off, and depreciation of goodwill. Bodum lost at the trial level, appealed that decision, and the court made short work of Bodum’s appeal. The appeal was dismissed because the trade-mark “FRENCH PRESS” for non-electric coffee makers is descriptive – it is a generic term applied to all such coffee makers, and the registration probably never should have issued in the first place. By seeking to enforce its descriptive mark against a competitor, Bodum rolled the dice and risked losing any enforceable rights to the mark. In this case, Bodum lost and the court concluded: “The registration is invalid because the term was and is in ordinary and bona fide commercial use as a generic term.” Ouch.

The lessons for business:

  • Consult a trade-mark agent to obtain advice on registrability and protectability of your trade-mark, to avoid the problems faced by Bodum’s mark;
  • While this case is not precedent-setting, it does confirm Canadian law on trade-mark distinctiveness.
  • Note that this litigation is part of a broader IP battle between these competitors. Maybe not as sexy as the smartphone wars between Apple and Samsung, but you might call this a coffee clash: the two companies have faced off in intellectual property litigation in Canada and the US. See this post  for additional analysis of the patent infringement fight over the design of the french press coffee maker.

Calgary – 07:00 MDT

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Who is Liable: App Stores or App Developers?

The app economy is, by most estimates, equivalent in size to the GDP of a small country: $15 billion in 2012, projected to mushroom to $74 billion by 2016. All that economic activity inevitably breeds litigation. In what appears to be a case of first impression in the US, a federal court looked at the issue of whether the app store is liable for the apps it distributes, or the app developer.

The case of Evans v. Hewlett-Packard Co., 2013 WL 4426359 (N.D. Cal. Aug. 15, 2013), the court looked at the liability of Hewlett-Packard for a third-party app which allegedly infringed trade-mark rights.

This case hinges on an interpretation of Section 230 of the Communications Decency Act (47 U.S.C. §230), 1996 legislation which provides immunity for providers of an “interactive computer service”, such as ISPs and website operators. The court decided that HP, as the operator of the app store, does qualify for immunity under this legislation, putting the app store into the same category as ISPs.

Remember, the Communications Decency Act  is US legislation, not Canadian. However, Canadian app developers should take note of this decision, as most Canadian developers seek to market and sell their apps in the US.

Other app case are pending, such as this claim (Pirozzi v. Apple, Inc., 12-cv-01529-JST (N.D. Cal. Aug. 3, 2013)) which is proceeding against Apple, for violation of privacy rights. Stay tuned.

Calgary – 07:00 MDT

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Keeping Secrets: Trade Secrets and Confidentiality Agreements

My article on Keeping Secrets: Trade Secrets and Confidentiality Agreements is published in the latest issue of The Advisor. This article reviews confidentiality agreements and the decisions in Convolve, Inc. and Massachusetts Institute of Technology v. Compaq Computer Corporation and Seagate Technology, LLC  and Plaza Consulting Inc. v. Grieve.

Calgary – 07:00 MDT

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Official Marks and Kermode Bears

image002.gifThe Kermode bear is a rare species of Canadian black bear, native to the beautiful province of British Columbia.

The recent case of City of Terrace v Canadian Pacific Phytoplankton Ltd., 2013 TMOB 156 brings the iconic animal into the realm of trade-mark law. The City of Terrace, B.C. is the owner of the official mark KERMODE BEAR and the City opposed the application for the KERMODE WARRIOR design mark (at left), applied for by Canadian Pacific Phytoplankton Ltd. An official mark is, in its own turn, a rare species of Canadian trade-mark which, under Section 9 of the Trade-marks Act, is accorded special rights and remedies. Public authorities such as governments and universities can give notice of the adoption of an “official mark”, after which it cannot be used or registered as a trade-mark by others. Think of government coats of arms, university names and crests, that sort of thing. In this case, the official mark claimed by the City of Terrace is comprised of the words KERMODE BEAR, and the City opposed the trade-mark KERMODE WARRIOR for various consumer products, such as dietary supplements, beverages and shampoos.

The Court said: “As stated in section 9(1)(n)(iii) of the Act, the test to be applied is whether or not the Applicant’s mark consists of, or so nearly resembles as to be likely to be mistaken for, the official mark. The case law has interpreted “consisting of” in section 9 to mean “identical to”. Regarding the resemblance test set out in section 9, the case law indicates that it should be applied as a matter of first impression and imperfect recollection…”

The Court came to the conclusion that the marks were not identical, and the opposition was rejected.

In this case, the official marks did not prevail, and the KERMODE WARRIOR applications were allowed to proceed.

Calgary – 07:00 MDT

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Canadian Privacy Law Update

The club of Canadian provinces with private-sector privacy legislation welcomes a new member this year: Manitoba has passed the The Personal Information Protection and Identity Theft Prevention Act (PIPITPA), joining B.C., Alberta and Quebec. In other provinces, the federal Personal Information Protection and Electronic Documents Act governs private sector privacy. Of course, most provinces have enacted some form of public sector privacy law, and many also have health-information laws. The Manitoba private-sector law follows the consent-based privacy regime of other Canadian provinces.

This law has yet to be proclaimed into law. Stay tuned.

Calgary – 07:00 MDT

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How to Lose Trade-mark Rights

The old dictum “use it or lose it” has been applied countless times to trade-mark law (…and French as a second language) for the very good reason that it neatly sums up the ongoing requirement to put registered marks into actual commercial use in order for trade-mark rights to be maintained. A registered trade-mark is not a guaranteed ironclad bundle of rights. It is vulnerable to an attack (usually by a competitor) based on non-use.

In Canadian trade-mark law, these attacks are known as Section 45 proceedings. As the court recently summed it up: “Unlike other pieces of intellectual property, if a trade-mark is not used, it may be expunged from the register.”  Under Section 45 of the Trade-Marks Act, the registered owner of a trade-mark can be compelled to provide evidence that the trade-mark was in use in Canada at any time during the previous three years. No evidence, no trade-mark.

In the recent case of Medos Services Corporation v. Ridout and Maybee LLP, 2013 FC 1006, the court reviewed a Section 45 challenge to the mark MEDOS. The trade-mark owner asserted its rights by tendering evidence such as various bills, receipts and correspondence, none of which convinced the court.

Remember:

  • The burden on the trade-mark owner is not very high: The proceeding is “simply an opportunity for the registered owner to show, if he can, that his mark is in use or if not, why not.”
  • Invoices or receipts which do not show the mark are of no use in Section 45 proceedings. The evidence must show “use” of the registered mark for sales of the specific products or services listed in the registration.
  • It is not enough to show correspondence with a supplier or customer which might lead to future sales. There must be evidence of actual sales.
  • The court said: “Evidence of use can take the form of a single commercial transaction in the ordinary course of business.”

Keep track of your trade-mark use and maintain accurate records. The well-prepared trade-mark owner will be able to fend off a Section 45 challenge with relative ease. The unprepared owner will have a much harder time, and as in the MEDOS case, may face expungement of the mark.

Calgary – 07:00 MDT

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