Archive for March, 2014

Ok… so BlackBerry Can Patent a Keyboard!

As a follow-up to our earlier post (Can BlackBerry Patent a Keyboard?), a US court on Friday issued a preliminary injunction in a dispute between the BlackBerry maker and start-up Typo Products LLC which sells a snap-on keyboard for the iPhone.

The preliminary court order prohibits Typo from the sale of its keyboard products in the US, pending outcome of the case at trial. Typo Products has indicated it will appeal. A preliminary injunction is not determinative but certainly provides an early advantage to BlackBerry as the patent holder.

Stay tuned.

Calgary – 08:00

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Trade-mark Confusion: Is One Letter Enough of a Difference?

BIG BITE vs. BIT BITE.

These two marks were assessed in the recent case of 7-Eleven, Inc v BitBite Foods Inc. , 2014 TMOB 16 (CanLII), for snack food products. BitBite Foods filed an application to register the BIT BITE design at right in connection with a variety of food products. 7-11 opposed the application on the basis of their family of BIG BITE marks, including BIG BITE (TMA728,674), 1/3 LB. BIGGEST BIG BITE (TMA593,755), SMOKIE BIG BITE (TMA393,436), and SUPER BIG BITS (TMA602,497), also in association with food products. The 7-11 marks included the BIG BITE Design (TMA405,449) at left.

bigbite.pngbitbite.pngEssentially, both marks were associated with food products, both marks featured a stylized “bite” design element, and the marks were virtually identical except for a single letter. 7-11 argued that their marks were all registered and had been used in Canada since the 1990s. The BIT BITE mark by comparison was applied for on the basis of “proposed use” meaning it has not yet been used in Canada.

How did the board decide this case?

The test for trade-mark confusion in Canada is one of “first impression and imperfect recollection.”  The Trade-marks Act is clear that confusion will result if two trade-marks are used in the same area and would lead a consumer to infer that the products sold under the two marks are manufactured or sold by the same company. Courts in Canada will assess a number of factors when judging two marks:

  • the distinctiveness of the two marks
  • the length of time each mark has been in use
  • the nature of the products or business
  • the nature of the trade
  • the degree of resemblance between the two trade-marks in appearance and sound or in the connotations.

It is important to note that these factors are not an exhaustive list, and courts are not obliged to give each factor equal weight. The Trade-marks Opposition Board in this case assessed these factors and also weighed the state of the Register and the state of the relevant marketplace.

After assessing all of these factors, the board concluded that marks do share similarities in appearance and when sounded, but the board “found a significant difference between the parties’ marks as a whole, in ideas suggested; a difference, given the simplistic nature of the word components of the parties’ marks, that is readily apparent to the average consumer. “… and the 7-11 “BIG BITE marks are not inherently strong and that the evidence clearly demonstrates that the words BIG and BITE are commonly used in the trade” …therefore “the differences between the parties’ marks [are] sufficient to distinguish them.”

7-11’s opposition was dismissed. One letter was enough of a difference in this case.

Calgary – 07:00 MDT

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International Breach of Copyright

Copyright in Canada is a function of the Copyright Act – without that law, there would be no copyright. How does Canadian copyright law interact with the copyright law in other countries?

In Active Operations Management (AOM) NA Inc. et al v. Reveal Group, 2013 ONSC 8014 (CanLII) (a law-school-exam-question of a case if ever there was one),  the court dealt with a claim by an Ontario company of infringement within Canada of UK copyright, by another Ontario company controlled by an Australian resident, Mr. Crouch.

The claim by AOM reads like a software vendor’s nightmare. AOM is the Canadian distributor of certain software developed in the UK. According to the allegations by AOM, Mr. Crouch copied elements of the software and a business method when he worked for an Australian licensee of the UK software. Mr. Crouch started a company in Canada and then allegedly used that as a vehicle to market a replica version of the UK software and the corresponding method in Canada.  With this (Canadian) copied version of the (UK) software , Mr. Crouch allegedly lured customers away from AOM. AOM filed a lawsuit alleging breach of copyright, misappropriation of trade secrets, interference with contractual relations, unjust enrichment and misappropriation of goodwill.

Remember, AOM was not the owner of the (UK) copyright – it was merely a distributor. The question for the court was whether AOM could maintain a copyright infringement lawsuit in Canada. To complicate matters, the “software” and the “method” were owned by two different (UK) owners. AOM added these owners to the lawsuit, but did not make the specifics clear in their claim.

As the court put it: “Copyright is a very specific right attaching to a ‘work’… Copyright cannot attach to an idea such as a method.  It can of course attach to the manuals or other material in which the method is described.  Similarly with computer software, copyright can attach to source code, to a graphic user interface, to manuals and to other material as defined in the Act.  Copyright cannot attach simply to what a computer program does.  The plaintiff must specify what it is that is covered by copyright and what it alleges has been done that gives rise to the statutory remedies.

The lessons for business?

  • Software vendors from outside Canada should know that, by virtue of international copyright conventions and treaties, international copyright can be enforced under Canadian copyright law;
  • The Canadian Copyright Act permits someone other than the copyright owner to sue for infringement of copyright – as long as that person has appropriate rights (such as a local distributor, as in this case). Here, AOM appeared to have rights to maintain the copyright infringement lawsuit, but did not specify its rights with enough clarity in the claim. Ensure that the chain-of-title is clear in the claim itself;
  • Regarding the additional claims – in particular, the trade-secret misappropriation – the court had this guidance: “It would be ludicrous …to compel a plaintiff to set out a trade secret with precision in the pleading.  To do so would destroy the secret itself. A trade secret is valuable precisely because it is secret.  It may be that information will have to be provided at the production and discovery stage but at that point the proprietor of the secret may seek confidentiality orders and to the extent that those details must be put into evidence may seek a sealing order.”

Calgary – 07:00 MT

Trader Joe’s vs. Pirate Joe’s Update

The very popular US grocery retailer Trader Joe’s has a following among Canadian consumers. Capitalizing on this popularity north of the border, a Vancouver entrepreneur has made it his business to buy genuine Trader Joe’s-branded merchandise in the US, and re-sell the products in a retail location in Vancouver under the banner  Pirate Joe’s. Citing Lanham Act trademark infringement, TJs sued the Canadian businessman in Washington State (appealed that decision  to the US Federal Circuit Court of Appeals.

While this appeal will run its course under US legal principles, it is worth noting the law on “parallel importation” in Canada.

Parallel importation or “grey marketing” is the importation into Canada of genuine products, which fall outside the brand owner’s established channels. These are not knock-offs or counterfeits, but rather legitimate products imported through a channel “parallel” to the brand owner’s preferred distribution routes (or, in the case of Trader Joe’s, where the brand owner has no established trading network in Canada at all).

There are two main intellectual property tools to attack parallel importation, and unfortunately for brand owners, both of them can be problematic in Canada:

  1. Trade-marks: Brand owners sometimes try to rely on their trade-mark rights in Canada (Trader Joe’s may have some reputation in Canada through spill-over advertising). In parallel import cases, any claim of trade-mark infringement in Canada is likely to face challenges in light of decisions like Coca-Cola Ltd. vs. Pardhan, which dealt with the export of genuine Coca-Cola products (I wrote a case commentary on this decision for Canadian International Lawyer, June 2000);
  2. Copyright: In the Euro Excellence case (Euro Excellence Inc. vs. Kraft Canada Inc.), the brand owner attempted to employ copyright law to stop parallel imports of genuine Toblerone-branded chocolate bars into Canada. On appeal, the Supreme Court of Canada ruled that the Copyright Act could not be used to block the parallel imports.

Stay-tuned to see where this case leads in the US appeal.

Calgary – 07:00 MST

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