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I INTRODUCTION TO INTELLECTUAL PROPERTY...... 5 Gordon F. Henderson, An Overview of Intellectual Property...... 5 Posner: Economic Analysis of Law: Intellectual Property...... 15 S. L. Carter, Does It Matter Whether Intellectual Property is Property?...... 17 E. C. Hettinger, Justifying Intellectual Property...... 20 D. Vaver, “Intellectual Property Today: Of Myths and Paradoxes...... 20

II TRADEMARKS...... 24

(A) INTRODUCTION...... 24 F.I. Schechter, "The Rational Basis of Trademark Protection"...... 24 W.M. Landes & R.A. Posner, "Trademark Law: An Economic Perspective"...... 27 Standard Brands, Inc. v. Smidler...... 30

(B) WHAT IS A TRADEMARK?...... 32 1. GENERAL CONSIDERATIONS...... 32 (i) Trade names...... 32 Road Runner Trailer Mfg. v. Road Runner Trailer Co...... 32 (ii) Functionality...... 33 Smith, Kline & French Canada Ltd. v. Registrar of Trade Marks...... 34 Pizza Pizza Ltd. v. Registrar of Trade Marks...... 34 Remington Rand Corp. v. Philips Electronics NV...... 35 (iii) Distinguishing Guise...... 36 Reckitt & Colman Products Ltd. v. Borden Inc...... 36 2. STATUTORY CONSIDERATIONS – UNREGISTERABLE MARKS...... 37 (i) Name or Surname...... 37 Galanos v. Registrar of Trade Marks...... 37 (ii) Descriptive or Misdescriptive?...... 38 Provenzano v. Registrar of Trade Marks...... 38 Rothmans, Benson & Hedges Inc. v. Imperial Tobacco Ltd...... 39 Coca-Cola Co. et al. v. Cliffstar Corp...... 39 T.G. Bright & Co. Ltd. v. Andres Wines Ltd...... 40 (iii) The Name in Any Language...... 40 Jordan & Ste. Michelle Cellars v. Andres Wines Ltd...... 41 (iv) Prohibited Marks...... 42 Canadian Olympic Association v. Bio-Lab Canada Inc...... 53 Bousquet v. Barmish Inc...... 53 Institut National des Apellations d’Origine v. Brick Brewing Co., Ltd...... 56 (v) Confusing...... 59 Wyant & Co. Ltd. v. LaCour (Canada) Inc...... 62

(C) CONFUSION...... 63 1. Likelihood of confusion – General:...... 64 Professional Publishing Associates Ltd. v. Toronto Parent Magazine...... 64 Groupe Vidéotron Ltée v. Vidatron Group Inc...... 65 2. Inherent distinctiveness & the extent to which the trade-mark is known...... 66 Yoplait S.A. v. Marigold Foods, Inc...... 66 3. Nature of the wares, services or business...... 66 Miss Universe Inc. v. Dale Bohna...... 66 Polysar Ltd. v. Gesco Distributing Ltd...... 68 4. The Degree of Resemblance in Appearance, Sound or Idea Suggested...... 68 Choice Hotels International v. Hotels Confortel Inc...... 69 2 G.H. Mumm & Cie v. Cooperative Federee de Quebec...... 70 Robert Bosch GmbH v. Grupo Bler de Mexico...... 70 U.F.O. Contemporary Inc. v. Sears Canada Inc...... 71

(D) DISTINCTIVENESS...... 71 Bousquet v. Barmish Inc...... 75 Unitel Communications Inc. v. Bell Canada...... 77 Bridgestone/Firestone Inc. v. Automobile Club de l’Ouest de la France...... 79 Danjaq, SA. v. Zervias (Trading as 007)...... 80

(E) USE...... 81 1. In General...... 81 Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd...... 82 2. Use in the Normal Course of Trade...... 85 Cie General des Etablissements Michelin-Michelin & Cie v. C.A.W. Canada...... 85 Lin Trading Co. V. C.B.M. Kabushiki Kaisa...... 86 Barringer & Oyen v. Apache Communications International Corp...... 87 Professional Gardner Co. Ltd. V. Registrar of Trade-marks...... 88 3. Use in Canada...... 89 Moffat & Co. v. Le Lido...... 90 4. Comparative Advertising...... 91 Future Shop Ltd. v. A.&B. Sound Ltd...... 91 5. Non-Use and Abandonment...... 93 Labatt Brewing Co. v. Molson Breweries...... 93 Labatt Brewing Co. Ltd. v. Benson & Hedges (Canada) Ltd...... 94 Bereskin & Parr v. Unico Inc...... 95 6. Use by Licensee...... 96 Dynatech Automation Systems Inc. v. Dynatech Corp...... 98 Bereskin & Parr v. Coca-Cola Ltd...... 98 Smith, Lyons, Torrance, Stevenson & Mayer v. Pharmaglobe Laboratories Ltd...... 98

(F) PASSING OFF AND UNFAIR COMPETITION...... 99 1. Passing Off...... 99 Ervin Warnick Belsloten Venootshap v. J. Townend & Sons...... 99 Reckitt & Coleman Ltd. v. Borden Inc...... 100 Ciba-Geigy Canada Ltd. v. Apotex Inc...... 101 Eli-Lilly & Co. et al. v. Novopharm Ltd...... 102 2. Unfair Competition...... 104

III COPYRIGHT...... 105

(A) INTRODUCTION...... 106 David Vaver, The Copyright Amendments of 1977: An Overview...... 106 2. Historical Background...... 111 R.B. Bettig, Critical Perspectives on the History and Philosophy of Copyright...... 111 3. Justifications for Copyright...... 112 Article: T.J. Brennan, "Copyright Property and the Right to Deny"...... 112 Article: D. Vaver, "Rejuvenating Copyright"...... 114 4. The International Aspect...... 115 H.C. Hansen, International Copyright: An Unorthodox Analysis...... 115 M.A. Hamilton, The TRIPS Agreement: Imperialistic, Outdated and Overprotective...... 115 5. Copyright on the Internet...... 118 D.M. Cameron, IP on the I-Way...... 118 3 (B) WHAT IS PROTECTED?...... 121 1. Literary Works...... 121 (i) General...... 121 Deforges et Ramsay c. Trust Company Bank et Consort Mitchell...... 121 Ravenscroft v. Herbert and New English Library Limited...... 122 (ii) Particular Cases...... 123 a. Computer Programs...... 123 Apple Computer Inc. v. Mackintosh Computers Ltd., [1990] S.C.C...... 123 Matrox Electronic Systems Ltd. v. Gaudreau, [1993] Qué. C.S...... 125 b. Compilations...... 125 B.C. Jockey Club v. Standen...... 126 Pool v. Pawar...... 127 U & R Tax Services v. H & R Block...... 127 Tele-Direct (Publications) v. American Business Information Inc...... 128 2. Dramatic Works...... 129 Canadian Admiral Corp. Ltd. v. Rediffusion...... 129 3. Musical Works...... 131 Grignon v. Roussel...... 131 4. Artistic Works...... 132 Randall Homes Ltd. v. Harwood Homes Ltd...... 132

(C) REQUIREMENTS FOR PROTECTION...... 133 1. Expression vs. Idea...... 133 Moreau v. St-Vincent...... 133 A. Rosen, “Reconsidering the Idea/Expression Dichotomy”...... 134 2. Originality...... 138 Viceroy Homes Ltd v. Ventury Homes Inc...... 138

(D) OWNERSHIP...... 138 1. Authorship...... 140 Cummins v. Bond...... 140 2. PHOTOGRAPHS, ENGRAVINGS AND PORTRAITS...... 141 Fetherling v.Boughner...... 142 Allen v. Toronto Star Newspapers Ltd...... 143 3. Works made in the Course of Employment...... 144 Boudreau v. Lynn...... 144 Cselko Associates Inc. v. Zellers Inc...... 144 4. Licensing...... 145 Re Fondation Les Forges...... 145

(E) INFRINGEMENT OF OWNER’S RIGHTS...... 145 1. Direct Infringement...... 146 a. “Substantial Taking”...... 146 Weiss v. Prentice Hall Canada Inc...... 146 Hutton v. Canadian Broadcasting Corporation...... 147 Preston v. 20th Century Fox Canada Ltd. and Lucas et al...... 148 b. “Making a Record”...... 150 Compo Co. Ltd. v. Blue Crest Music Inc...... 150 c. Broadcasting and Recording...... 151 Tele-Metropole Inc. v. Michael Bishop...... 151 d. Authorizing Infringement...... 152 de Tervagne v. Beloeil (Town)...... 153 2. Indirect Infringement...... 156 R.. v. M. (J.P.)...... 157 4 (F) MORAL RIGHTS...... 158 Snow v. Eaton Centre...... 158 Prise de Parole v. Guérin...... 159 5

I INTRODUCTION TO INTELLECTUAL PROPERTY

What is intellectual property? What are its main divisions and features? Using the introductory reading by Henderson and your own general knowledge of the area, these readings will expose you to some of the justificatory arguments for according strong property-like rights to trade- mark, copyright and patent holders. These arguments in turn are (or should be) reflected in the contours of the various statutes and principles governing IP.

Gordon F. Henderson, An Overview of Intellectual Property Vol. 1 p.1

1. Introduction – What is Intellectual Property Law?

Some basic principles ought to be kept in mind in considering the law of intellectual property.

The first principle is that there is nothing about intellectual property law that says that copying is wrong per se. In fact, copying that which is in the public domain is not only perfectly permissible – it is to be encouraged. The act of copying can range from the making of an exact reproduction to the making of a new creation inspired by the original, but which may be virtually unrecognizable when compared to the original. IP laws not only define what constitutes a copy, but plot the line of demarcation between what may be copied and what may not be copied.

The second principle is that intellectual property law should not only provide a pension for geniuses; it should serve to inspire improvement and evolution.

The third principle is that there is no law against competition per se. The public is entitled to and needs a competitive environment. It is only when competition is unfair or injurious to the public interest that competition should be held in check. One of the principles we must remember is that contracts and acts in restraint of trade are to be viewed with great suspicion, and should be struck down in proper cases.

The principal subject matters of IP law are trade-marks, patents, industrial design, copyright, and trade secrets.

a) Trade-marks

TM exists at common law, but there is also a very important statutory basis for their existence. TM may be registered or unregistered. There is both a national and international dimension to a TM, as well as a treaty network that is very important. 6 Before the advent of the Trade-Marks Act, the common law principles governing TM evolved in order to protect the public and were consistent with what is often referred to as the “guarantee” theory of TM law. This theory emphasized that TM law should serve to help ensure that the public was receiving the quality of goods that they had come to expect.

However, the realities of modern commerce were such that it was clear that there was a need to shift the law of TM more towards the goal of protection of proprietary interests. In modern terms, we think of a TM as a symbol that distinguishes the wares or services of a manufacturer or trader through actual use, or intention to use that is quickly followed up by the actual use. This is often called the “source” theory of TM law, which holds that the purpose of the law is to enable the public to identify the source of the wares or services and to stake out a claim by the owner of the TM on use of the mark in respect of similar wares or services.

A TM is a symbol that distinguishes the wares or services of a trader from those of another. In the author’s view, the guarantee theory and the source theory are simply opposite ends of a pendulum swing. We have now moved away from the guarantee theory that was prevalent in the earlier part of the century towards the side of the source theory. However, some cases still indicate that the guarantee theory is still alive and well in Canada.

TM include distinguishing guises (such as Coke, Heinz and Perrier bottles). This is a special type of TM provided for by s.13 of the TM Act. There are also official marks, which are not TM at all, but are provided for by s.9(1)(n) of the TM Act. The system also includes “certification marks”, which are a creation of statute, and serve as “seal of approval” in certain cases.

There are critical distinctions between registered and unregistered TM. There is also a difference between TM and trade-names. The former is a mark used to distinguish the source of the goods or services while the latter is the name under which and entity carries on business.

TM derive their basis from the common law of passing-off and unfair competition. The common law is reflected, with certain important differences, in the statutory provisions of section 7 of the TM Act.

The registration of a TM confers certain procedural advantages that make registration a desirable goal. A registered TM is normally valid throughout Canada. However, a registration may be invalid for various reasons, while the unregistered TM may still be enforceable at common law. The duration of a TM, whether registered or not, can be perpetual, in principle. Given current trends in the case law concerning parallel importation, a registered TM may give rise to a cause of action that is simply not available by way of passing off, namely, the ability to restrain the importation of “genuine” goods from abroad. 7

b) Patents

Patent law is, by contrast to TM law, concerned with highly functional and practical matters relating to science and engineering. Patent law deals with the embodiment of ideas in new and useful inventions. The term of protection is relatively short, i.e. 20 years from date of application.

A patent is a monopoly given by the state to make, use or vend a product, apparatus or process that embodies an invention that meets the following criteria:

1) it must be new – and meet the tests of novelty 2) it must be useful – and meet the test of utility 3) it must fit a recognized category (i.e. art, process, machine, manufacture or composition of matter) 4) it must not be obvious. There must be an inventive step. This is a question of fact and degree.

The first three aspects are statutory – indeed they are part of the definition of an invention in section 2 of the Patent Act. The requirement of inventive step (non- obviousness) is based in case law in Canada.

The inventor’s main part of the bargain with the state is that the invention must be fully disclosed. There are absolutely no rights conferred wrt inventions that are known unless a patent application is filed and, eventually successfully pursued or prosecuted through the patent office. This requires examination by government officials and protection must be sought, essentially, on a country by country basis.

Most patent litigation inevitably addresses the validity of the patent. The patent office’s decisions wrt the criteria of patentability are revisited and dissected by the court. The court will rarely possess the technical expertise required to immediately comprehend these issues. It is for this reason that patent litigation features the expert witnesses and an extraordinary quantity of documentation. c) Industrial Designs

Industrial design law protects those features of shape, configuration, ornamentation or pattern that are applied to useful articles and appeal solely to the eye. A good example of what can be protected by an industrial design is the shape of a tea pot. Protection is dependent upon novelty as determined in the first instance by government examiners. 8 Industrial design protection lasts for a maximum of 10 years. In some cases, where a shape acquires sufficient “secondary meaning” so that it is associated with a particular source, the industrial design may become protectable as a distinguishing guise, which is a type of TM, the duration of protection of which is potentially perpetual. Secondary meaning is a TM concept that applies when a common word or symbol that is not inherently protectable (or the protection for which may have expired under industrial design law) becomes so identified with a particular source that it functions as a TM.

d) Copyright

Copyright law protects the original expression of ideas in the form of literary, artistic, dramatic or musical works. Statutes and cases have clarified that these categories include architectural works, films, and computer programs. Sound recordings are protected as if they were musical works for most, but not all purposes.

© arises automatically, extends in most cases automatically throughout the world as a result of the Berne Convention, and generally lasts for the life of the author plus 50 years. The commercial importance of © law has increased dramatically in recent years, especially for those in the entertainment and computer industries.

e) Trade Secrets

A trade secret is any subject matter or information that gives one party an advantage over another, and for which the party desiring to invoke the protection has gone to reasonable lengths to maintain the secrecy. The concept can cover secret processes, methods of doing business, and information exchanged in the course of discussion about a business deal involving a gold mine (Lac Minerals).

The courts are not uniform, however, as to the basic reasons for protecting trade secrets. The doctrines range from property law, equitable grounds, breach of confidence, fiduciary duty/constructive trust and contractual principles, whether because of an express or implied provision in the contract.

2. The Scope and Nature of Intellectual Property Protection

IP law is concerned with legal mechanisms that protect the results of the inventive, creative, and commercial endeavours of the human mind. The three most important aspects of IP law concern the scope, nature and enforcement of IP protection.

a) Scope 9 The scope means the issue of what it is that is being protected. For instance, copyright law protects literary, artistic, dramatic and musical works. The scope of copyright protection is very broad. But, while it covers the words and music of a song, it does not cover the singer’s interpretation or rendition of the song. While it covers works of sculpture, it does not extand to simple, purely utilitarian objects, such as tail pipes. b) Nature

The nature of the protection refers to the bundle of actual property rights that are given by the law. Patent protection extends to the right to make, use and vend a patended article or one made by a patended process. This is very encompassing. It is also absolute in the sense that these rights are good as against anyone who infringes the patent – even if they do so independently in complete innocence of the invention owned by the patentee. Patents are hard and expensive to get.

On the other hand, © protection does not extend to the right to use or sell a copyrighted work. It is much more limited in terms of the bundle of rights granted. It lasts a long time but it is not absolute in its coverage. A truly independent creator of an identical work is not liable, in principle, for © infringement.

TM law is fundamentally different from patent and copyright law in that it is directed at the protection of business goodwill rather than intellectual creativity. Some TM may be very artistic in their nature, but that is not directly relevant to the scope or nature of TM protection. c) Enforcement

The enforcement of IP law entails an understanding of the available mechanisms of ownership and remedy. IP law is ultimately about ideas. Having said this, the first and most fundamentally important notion that must be impaired is that IP law does not protect – and should not protect – bare ideas per se. Ideas are, after all, rather vague and even rather cheap. Anyone can have an idea that it would be a fine thing to call a beer “Canadian” or “Blue”. However, someone must expend the effort and money to actually market the product under these names and to create goodwill in the business sense.

The main reason that we do not protect ideas per se is because they are commonplace. To protect an idea at its preliminary or “bare idea” stage could stultify economic progress. IP law requires that the ideas must be developed and elaborated – a common word is embodied or utilized – before they merit protection. This is in order that progress and innovation not be inhibited by those who merely have an interesting thought, but do not follow it up with a useful or specific expression or embodiment of that thought. Nonetheless, all creativity and inventiveness does begin with imagination and abstraction. 10

3. The Property Concept

IP rights, like land rights, are also subject to certain limitations to begin with, such as term and scope and certain special limitations from time to time (such as measures to control monopoly abuse or compulsory licensing). Provided that these limitations are balanced and sound, they are justifiable and inevitable. What the state confers, the state can also take away or limit. Even when the right is conferred by the common law, the state may be justified in placing some limitation on its scope and enforcement (such as in the case of TM, personality, privacy and libel and slander laws).

IP is, depending on one’s favourite theoretician, at the least a species of or analogous to personal property or personalty (as opposed to realty), although it is important to remember that the source of this conclusion is often statutory in nature (in the SCC decision in Campo Co. (1979), Estey J. expressly indicated that © arose not by virtue of property or tort law, but solely by virtue of a statute). © may nonetheless be treated as if it is property.

Copyright law is personal property along with many kinds of property unknown to the common law such as patents, shares, government annuities… Crossley Vanes recognizes © as personal property because it is a chose in action, which is essentially equivalent to our notion that property is something that can be bought or sold.

The consequences of categorization are very important since they can be crucial in determining whether a right is inheritable as property – e.g. the right of personality. They can be crucial to the point of whether it is an act of theft or fraud to “take” the thing in question.

The concept of any kind of ownership of IP is relatively new, compared to that of land and must therefore be viewed as even more formative and subject to change.

4. The Origins of the TM, Patent and Copyright Law

a) TM Law

There are many types of TM that are not really TM in the strict sense of the word. These includes “certification” marks which are used to confer a degree of endorsement or approval in certain types of situations (e.g. the “Good Housekeeping Seal of Approval”) and appellations of origin, which refer usually to certain geographical and quality control requirements (e.g. Champagne, Bordeaux, or Cognac). These other types of marks, however, are different because they do not distinguish, or identify, the actual owner of the mark. Another type of mark that fall outside the normal purview of TM is the “official marks”. The most famous example in Canada of an official mark is “Olympic”, which is controlled by the Canadian Olympic Association. 11

Historically, TM law was intended to facilitate traffic in goods and services, but not to facilitate traffic in the mark itself. Far from being property per se, TM could not be licensed at common law. This principle rested on the principle that goods emanated from a single source. As Lord Shaw of Dunfermline expressed in Bowden Wire Ltd. v. Bowden Brake Co. (No. 1):

A TM after all, my Lords, is simply an intimation upon goods that they are the goods of the owner of the mark. That is, in one compendious phrase, the entire law of TM.

From a public interest standpoint, the present trend away from assurance to the consumer of a standard of quality of wares or services bearing a TM is regrettable. Nonetheless, there are signs that, in Canadian law, the pendulum may have begun to swing back (see Hentzman v. 751056 Ontario Ltd.).

In some respects, there are aspects of TM that concern the reputation of the goods or services to which they are applied, and that function for the benefit of the public who consumes such goods or services. This has imposed some limit on the ability of the owners to deal completely freely with the marks, especially if the mark has come to be associated with a considerable amount of goodwill. In this sense, TM share an attribute of © law, namely that moral rights belong to the author and are inherently inalienable, despite commercial pressure that would seem to indicate otherwise. However, unlike the case of goodwill in a TM, the usually proffered reason for inalienability of moral rights stems from a concern for the well-being of authors and for their public.

In some senses, it is not particularly clear that TM fall within the overall taxonomy of IP law. For one thing, many TM involve no element of creativity as such. Or, to the extent that they do involve artistic or literary creativity, they may be protected by © (i.e. certain logos, cartoon characters…). However, it is relatively axiomatic that the vast majority of TM, which are names or coined words, are not literary or artistic creation. Yet, we accept that the notion that TM are part of IP law.

Section 91 of the Canadian Constitution Act of 1982 gives the federal government exclusive authority over “Patents of Invention and Discovery” and “Copyright”. Both in Canada and in the US, the foundation for federal jurisdiction over TM law rest on theories of trade and commerce rather than IP law per se. The reason that it does fall outside the classification that gives patent and copyrights special status is probably that TM law has little to do with the creation of knowledge, science, art or literature and has much more, as its name suggests, to do with trade. We shall see how TM law alone can arguably not only effect, but perhaps even make or break the free trade movement.

In Canada, until the mid-50’s, it was clear that a TM could not be sold or licensed, absent the goodwill that went with it. The reason for this goes back to the theory that TM developed as a legal doctrine for purposes of consumer protection and this aspects is still very prevalent and ingrained in our thinking (see. Hentzman v. 751056 Ontario Ltd.). 12 Many of the issues involving appellations of origin are related to these points concerning the ambiguous origin and purpose of TM law. Appellations of origin are marks, usually consisting of a word with geographical origin, that describe products that emanate from particular regions and often, though not always, are subject to some type of licensing for factors such as quality control, process of manufacturing, composition and grade of the resulting product.

In that respect, it should be noted that the Supreme Court of Canada declined an application for leave to appeal in Institut national des appellations d’origine des vins et eaux-de-vie v. Andres Wines Ltd., a case which was brought by the French Champagne industry under the rubric of passing-off doctrines. This effectively ends the efforts of the French Champagne industry to achieve exclusive entitlement to use the word “champagne” in connection with sparkling wine in Canada.

The source theory tied the property value of a TM to its goodwill. It meant that a company could not sell or “traffic” in a mark unless the goodwill flowed with the mark. The best all around definition of goodwill is probably the one stated by Lord Macnaghten in C.I.R. v. Muller & Co. Margarine Ltd. (1901) (H.L.): “ [goodwill] is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start. Goodwill is composed of a variety of elements. It differs in its composition in different trades and on different businesses in the same trade. One element may preponderate here and another there.”

Historically, the common law tradition attempted to insist that a TM by itself was not saleable or capable of being licensed or converted from a manufacturer’s to a seller’s mark. These limitations substantially limited the potential property value of a TM. There are many reasons for this, most of which are said to stem from a policy of consumer protection, although such a motive was somewhat foreign in the law until relatively recently.

b) Patent Law

A patent in the IP sense means a grant of exclusive rights in return for the disclosure to the public of the invention. The Oxford English Dictionary defines “patent” as a license to manufacture, sell or deal in an article or commodity to the exclusion of other persons; in modern times, a grant from a government to a person or persons conferring for a certain definite time the exclusive privilege of making, using or selling some new invention.

The issue of disclosure is of absolutely fundamental importance to patent law and the concept of the grant of property. When there is insufficient disclosure, there can be no 13 patent. It has been remarked many times that “a patent is a secret that everybody knows”.

The history of the law relating to patents of inventions is inseparable from the concept of monopoly and the grant of a limited monopoly in exchange for something from the inventor, generally disclosure. The property of an inventor in his patented invention is divisible into (1) the invention, or the right to make, use and sell the new art or instrument; and (2) the monopoly, or the right to exclude others from such making, use or sale. The former exists from the moment the inventive act is completed, and may be enjoyed of or disposed of by him as he pleases. Before his inventive act is finished no property in the invention can exists, but the proposed inventor may make contracts concerning it which will operate upon it when completed, and create rights in it which can then be enforced. The latter property exists only after the patent creating the monopoly is granted and until then cannot be enjoyed by the inventor or, in any proper sense, assigned to others. But as in the case of the invention he may bind it by contracts which become operative when the patent issues, and which derive their force partly from the doctrines of the common law and partly from the statute relating to the ownership of patents.

The natural right of the public to appropriate all new ideas that may be voluntarily disclosed is no less evidence than that of the inventor to conceal them. It is a law of nature that men should profit by the discoveries and inventions of each other. This is the law which binds society together, and in obedience to which lies all the possibility of moral, intellectual and material advancement. No man lives, or can live, for himself alone. Every improvement he can make in his appearance, habits, manners, or affairs becomes a guide and stimulus to others, by following which they also can improve themselves in person or estate. To benefit by the discoveries of his fellow men is thus not only a natural right, it is also the natural duty which every man owes to himself and society; and the mutual universal progress thence resulting is the fulfilment of the earthly destiny of the human race.

Into the midst of this harmonious system of mutual rights and duties the patent privilege intrudes itself as a disturbing element. It obliterates the dividing line, drawn by the law of nature, between the relations of the inventor and the public to the new invention. It establishes an arbitrary line, based on a fixed principle, suggested by no natural analogy, and shifting toward or from the true line according to the changing theories of successive generations. c) Copyright Law

The recent history of © law has witnessed the extension of copyright protection by the courts, to hitherto unknown realms (especially in high technology) with confirmation, but in some cases, limitation, by legislatures. 14 As stated by Stephen Ladas (a respected scholar in © law): “Except in France, England and the US, the theory of © as a “Property right” appears to have been generally abandoned. It is impossible to reconcile the generally accepted characteristics of author’s right with the juristic conception of property. In addition, to the fact that © is not perpetual, as are all property rights, the essential condition of the latter is absent, i.e. the exclusive right of enjoyment of its object. Upon the publication of a work, the creation to which the © attaches becomes common to all. Furthermore, other attributes of property are absent from ©: the former may be fully ceded and assigned, while in the case of a transfer of the latter, certain rights, the moral rights, are always retained by the author: certain modes of acquisition of property, such as prescription, accession and adverse possession are inapplicable to ©; property is governed by the law of the place where this is located, while ©, under present conceptions of private international law, is governed by the law of the place where protection is sought.”

5. The International Intellectual Property System

Two of the longest and most important international treaties that relate to trade and commerce are the Paris Convention of 1883 (which deals mainly with patents and TM) and the Berne Convention of 1886 (which deals with ©). These 2 conventions remain in large part the basis for the intellectual property chapters in both the GATT and NAFTA as they currently stand.

These treaties are important because they are the background framework upon which our domestic laws have been enacted. Despite the fact that they are not part of our domestic law, they can be read by the court when our domestic law is not clear on its face.

6. Federal and Provincial Court Jurisdiction

There are many complex jurisdictional and strategic decisions involved in choosing a forum:

1. Where the action between private parties is founded or rooted in federal legislation (patent, ©, TM or industrial design), the action may be brought in the Federal Court. However, if it is not based upon a federal statute or federal law (e.g. a common law passing off action or breach of contract), it must be brought in a provincial court. The corollary is that a mixed claim (i.e. one that involves both statutory infringement and other matters such as breach of a licensing agreement) should also be brought in a provincial court. However, the taking of a separate action within the respective jurisdictions of each court is not unknown.

2. Any case involving the status of a patent, or registration of a TM, © or industrial design must be brought before the F.C. This is so because of the in rem jurisdiction aspect of such cases: the result will affect potentially everyone, not just the parties themselves because a patent or another registered IP right is effective as against all. A 15 defendant may defend an infringement action taken in a provincial court on the basis of invalidity. The decision on invalidity has effect as between the parties.

3. A decision of the FC is binding and enforceable throughout Canada; this is not the case in a decision of a provincial court.

4. The volume of IP cases in the F.C. leads to greater experience and to greater consistency.

5. The F.C. system is often faster than the provincial system for civil litigation.

6. The F.C. is well suited to actions where several provincial jurisdictions may be involved, i.e. when a defendant is carrying on business across the country or where several defendants from different provinces are involved.

7. The F.C. is a problematic forum where the case does not clearly rest upon a valid IP right under a federal statute. The classic problem arose in TM actions, where the registration of the TM was of doubtful validity. In such a case the plaintiff might be better advised to sue in a provincial court, because a passing off action would still be available to him in this forum if the registration turns out to be invalid.

Posner: Economic Analysis of Law: Intellectual Property

The law uses several devices to try to minimize the costs of duplicating inventive activity that a patent system invites:

1. A patent expires after a period of time, rather than being perpetual. This reduces the value of the patent to the owner and hence the amount of resources that will be devoted to obtaining patents.

2. Inventions are not patentable of they are “obvious”. The functional meaning of obviousness is discoverable at low cost. The lower the cost of discovery, the less necessary patent protection is to induce the discovery to be made, and the greater is the danger of overinvestment if patent protection is allowed.

3. Patents are granted early – before an invention has been carried to the point of commercial feasibility – in order to head off costly duplication of expensive development work.

4. Fundamental ideas (e.g. the law of physics) are not patentable, despite their great value. By confining patentability to “useful” inventions, the patent law identifies inventions likely to require costly development before they can be brought to market. The nonpatentability of basic discoveries, like the limited term of patents, reflects 16 more than just a concern with costs of acquiring patents, however, there are also serious identification problems.

© law resembles patent law in granting time-limited rights, but resembles trade secret law in allowing independent discovery. The reason for the latter feature may be that patents protect only inventions, which can be and are indexed in the Patent Office, while © protect an infinitude of sentences, musical phrases, details of architectural blueprints, and other minutiae of expression, making it impossible to search the entire body of pertinent copyrighted materials in order to make sure that one is not infringing; some amount of inadvertent © is thus inevitable.

The durational limitation on © is so generous (the author’s life plus 50 years) that one may wonder why the law doesn’t go the whole hog and grant perpetual copyrights. While it is natural to suppose that the scope (including duration) of IP rights represents the striking of a balance between the interests of the creators and of the users of IP, the creators themselves may benefit from the limiting of those rights. Most poems, novels, plays, musical compositions, movies and other creative works (including inventions) build heavily on earlier creative works – borrowing plot details, stock characters, metaphors, chord progressions, camera angles, and so forth from the earlier works. The greater the scope of © protection of the earlier works, the higher the cost of creating the subsequent works. So while an increase in the scope of © protection will enhance an author’s expected revenues from the sale or licensing of his own ©, it will also increase the cost of creating the works that he copyrights.

Another example of how limiting a copyright owner’s rights can actually increase the value of the © is the following: the fair use doctrine of copyright law allows a book reviewer to quote passages from the book without getting the copyright holder’s permission. This reduces the cost of book reviews and hence increases the number of book reviews, and authors as a group benefit, since book reviews are free advertising. Book reviews are particularly credible advertising because they are not controlled by the advertiser. If authors could censor the reviews of their books by denying permission to quote from them, book reviews would be no more credible that paid advertising. Author as a group would suffer from rejection of fair use for book reviews, even if an occasional author gained.

The US Supreme Court, in Sony Corp of America v. University City Studio, has held that the fair use doctrine allows the sale of video recorders for use in recording television programs, even though no royalty was paid to the © owners for the privilege of recording. Many people use their video recorders to record programs that are being shown at an inconvenient time or that they want to watch more than once. Such uses benefit the © owner even though no royalty is paid.

Posner states that the economic function of TM is, by giving assurance of uniform quality, to economize on consumer search costs. Strictly speaking, all a TM does is identify the source of a particular product or service – for example, the General Electric 17 TM identifies General Electric as the producer of the goods to which the TM is affixed. But his means the consumer knows whom to blame if his light bulb doesn’t work, so TM law gives producers an incentive to maintain quality, which in turn reduces the need for the consumer to shop as carefully as he would otherwise have to do. Even if the nominal price of a trademarked item is higher because of the producer’s investment in advertising and enforcing his mark, the total cost to the consumer may be less because the TM conveys information about quality that the consumer might find it costly to obtain otherwise.

The great challenge for TM law is to enable each producer to identify his own brand without increasing the costs to other producers of identifying and marketing their brands. The best TM from this standpoint is the fanciful mark (e.g. Kodak), an invented word, as distinct from one taken from the language. The number of possible combinations of letters to form new words is infinite, so there is no danger that a fanciful word will increase the cost to another producer of finding words to identify and market his product.

Much trickier is a “descriptive” mark. Allowing someone to use “word processor” as his TM would make it costly for competing producers of word processors to market their brands, because they could not use a compact description. So the law protects descriptive marks only if the mark has acquired “secondary meaning”, which means that the consumer has come to identify the term with a particular brand, rather that with the product as a whole (e.g. Holiday Inn).

Often when a TM good begins life as a patent or other monopoly, the TM comes to denote the good itself, rather than the source, and when that happens the TM is termed “generic” and TM protection is stripped away. Examples of TM to which this has happened are aspirin, cellophane and yo-yo. If the TM owner were allowed to exclude competitors from using the generic term to describe their brands, he would be imposing costs on them.

A TM is not time-limited, nor should it be. Were there a time limit and it expired before the producer had ceased making the trademarked item, he would have to rename the product and consumers would be confused. Because a TM cannot be sold or otherwise transferred apart from the product that it designates, a TM automatically expires when the product is discontinued.

S. L. Carter, Does It Matter Whether Intellectual Property is Property? (I, p.19)

- There are two ways to use the word "property". For the legal theorist it will mean the relevant set of legal relations, the bundle of rights which define the relationship between an individual and a resource. For the lay person, it will mean a thing (a res) which implies a single owner. 18 - Our "conversational" view of tangible property has provided us with a starting point upon which we have built the our legal theory of such property. The legal theory, although in many ways different from a lay person's theory of property, reflects many of a lay person's presumptions about property. For example, what is mine is not yours so fuck off, you can't have it you bastard.

- Intellectual property rules might not reflect those ownership presumptions because we lack the guidance (and discipline) of coping with ordinary conversation about intellectual property. And because there is no conversational discipline to force us to think of intellectual property in terms of commonsense everyday categories, we tend to think of it in ridiculous categories instead. (p.20).

- The creation of ridiculous categories gives us stupid IP doctrines such as "misuse", through which A may defend against B by claiming that she would have purchased a license except that the plaintiff, B, was charging too much money. There is no "ordinary property" contrast: A cannot get an easement of B's land simply by explaining to the court that B wanted too much money for it.

- Nevertheless, Carter thinks that even if we based our IP notions on the way we think of "ordinary property", the law of IP would not not change that much. He does give some examples of possible changes.

- Some patent law changes would include the removal of time limits or on the patentability of mathematical algorithms. The misuse doctrine would also fall.

- Copy right law would also change. We would be more apt to recognize the creator's moral rights. We would also get rid of the requirement that creativity involve something more than "sweat of the brow"; in other words, creativity would not be negatived by the way in which the invention is made. Compating this to our views concerning "ordinary property", we think that someone owns the oil patch on her land regardless of whether she was looking for it or stumbled across it. We would also rethink the doctrine of fair use so that the creator can capture even unanticipated gains. It would reflect the fact that most creators have in mind the hope of economic gain.

- Trademarks bear so few of the indicia of "ordinary property" that many IP courses omit them. The law of trademarks do reflect Locke's view of "ordinary property" rights (he thought that property rights should inhere in the act of creation because this provides an incentive to create) because they protect the creator's right to the intellectual products of the mind. But rights in a trademark do not flow from the creation of the mark but from its use. If we based TM law on our vision of "ordinary property" rights, then the creator would have rights even though he didn't use use it to distinguish his goods in commerce. He wouldn't have to use it before he obtained rights in the mark. Despite our fear of "warehousing" marks (inventing them so that no one else could use them), why shouldn't we allow registration without use? 19 - There might be a move from the "rights" of the public towards the property rights of the owner. (p.23) See the Taco case on pages 22-23.

- Carter brings up the problem of generic marks. If someone can lose a trademark because the public has now incorporated it into the market language, then the public should compensate the owner for taking away his mark (think of adverse possession). The public cannot take someone's painting and put it in a museum without compensating the owner...

- Anyhow, the incentive theory of IP might be a good idea, but it doesn't explain why IP shouldn't be considered property. Maybe we're not alone... 20

E. C. Hettinger, Justifying Intellectual Property (I, p.24)

- Edwin examines the justifiability of IP institutions, and finds them unconvincing. He favours the dissemination of IP ideas because (unlike "physical property") this does not impede the creator from personally using his creation. Everyone can use it without hampering his own use. - Also, restrictions on the free flow and use of ideas not only stifles individual growth but impedes further advancement and innovation. - He doesn't believe that people are morally entitled to the fruits of their labour (Anti-Locke, hee hee). It is just a policy decision we have made. On page 28, Edwin notes that if a person has a natural right to something does not mean that she deserves it. If you didn't work hard to create a masterpiece, then you might have a natural right to it but you might not deserve the entire market share. If you didn't work hard or make sacrifices, you should get less than the market value. - He also thinks that no IP labour can be attributable to one particular labourer, since his ideas did not form in a vacuum and depended on the ideas of those who came before him. So if we let one person (the last contributor) receive the entire market value, we ignore the contribution of all those who came before him. Boo hoo. So Ford has to give up some of its market share to the estate of the guy who invented the wheel. Boy is that caveman gonna be rich. - So even if people have a natural right to the fruits of their labour, this does not mean they should receive the entire market value of the product. - It is wasteful to let someone keep a monopoly over an idea when everyone could be using and enjoying the idea concurrently. - Although sovereignty over personal possessions is essential to dignity, it is not necessary to give an author exclusive rights over ideas if we can give her dignity through public praise or acknowledgement. "Hey, nice job. Now gimme that invention, Edison." - The utilitarian justification for IP is based on providing incentives to create: if you create, you will be rewarded for your efforts and expenses by getting rights over the creation. Edwin thinks that this impedes the diffusion of ideas. If governments rewarded creation, then there would be no need t o grant monopolies over ideas. The creator gets his cash, and we get to use his invention. - He doesn't believe that there is sufficient evidence showing that the granting of IP protection to creators necessarily provides an incentive to create, and that "substantial empirical evidence is needed" (as opposed to unsubstantial empirical evidence?). - Anyhow, he questions our justifications for IP. Copyrights are easier to justify than patents or trade secrets since at least you can use the ideas provided that you acknowledge their origins. Patents and trade secrets are inherently secret and cannot be used by others. - We must begin to think more openly and imaginatively about the alternative choices available to us for stimulating and rewarding intellectual labour.

D. Vaver, “Intellectual Property Today: Of Myths and Paradoxes 21  Vaver discusses the rationales for extending legal protection to intellectual property, and criticizes each in turn. The primary motivations for intellectual property protection are economic and moral.  The “moral” basis upon which IP protection is based flows from an argument that as a matter of natural rights, each person has a right to the product of their brain. Moreover, there is a notion that those individuals who have created something useful society should be rewarded.  Vaver examines copyright and patent law in particular to see how far they actually make a contribution to society.  He adopts an approach of questioning the “traditional” justifications which have been proposed, and by exposing them as largely myths.

I. Copyright a) Are copyrights designed to protect authors  Vaver points out that copyrights do not truly protect the “poor starving artist or painters”. In this industrialized society, most works are not created by individuals, but by teams, directed by corporations. Thus, the copyrights do not belong to the authors, but rather to the firms that employ them.  Even though royalty agreements exist, it is argued that the true benefit of copyright protection does not accrue to authors.  With respect to “moral rights” (an author’s right to have their work credited and maintained intact), these are often eroded. Vaver mentions the rare example of Michael Snow, who successfully challenged the Eaton Centre’s ability to hang Christmas decorations on his sculpture.  In most cases, business practice has been such that authors are required to waive their moral rights, which is now permitted by statute.

b) Does Copyright Law Encourage Art and Literature?  This would be true only if true works of art and literature were protected. Instead, the law does not require the work to have any merit at all. There is some sense to this, as we do not want judges deciding what has artistic merit or not.  The effect, however, is that arts and literature are trivialized: “business directories, business forms, contracts drawn by lawyers, ... all are called original literary works”. The logical conclusion of this has been the recognition of computer programs (“invisible, unreadable, utilitarian”) as literary works.  Basically, the author argues that since copyright includes so much more than works of art and literature, it is hard to see how the law encourages their creation.

c) Does Copyright Law Encourage Dissemination of Works?  Vaver argues that another myth is that copyright law encourages works to be published and disseminated.  Instead, he argues on the contrary, that the history of copyright has always been intertwined with censorship. He cites several examples of cases in which copyright has been used as a tool for preventing the publication of works, such as biographies, and the dissemination of material, such as government information, that would be beneficial of society. 22  For instance, the heirs of William Lyon Mackenzie claimed to have a copyright in his letters, and therefore prevented the publication of an autobiography based on those letters, which portrayed him in an unfavourable light.  Thus, copyright often runs counter to democratic ideals, and is often used to enclose, rather than disseminate knowledge.

II. Patents  Vaver next turns to the theory of patent law, which is to prevent others from making, using, importing or selling one’s invention.

a) Are Patents a Good Thing?  Vaver points out that many scholars, including proponents of patent law have argued that the system is flawed an in need of reform. Many argue that the effect of patent law is to concentrate wealth and raise profits rather than encouraging beneficial innovation.  Others argue that the innovation process should be as open as possible, recognizing that each invention builds upon another and is ultimately the product of societal collaboration.  Michael Golhaber has proposed that patents and copyrights be replaced by an Intellectual Claims Act, which would be administered in a policy-oriented manner.

b) Patents do not Protect “Mere” Theories  The other problem with the patent system is that discoveries themselves are not protected until they are applied and transformed into a commercial object.  There is a value system inherent in this, in that society is only willing to pay for practical results, and not for theory.  This does not coincide with the traditional justification for patents (rewards and incentives for innovation), which would require the definition of invention to be expanded.

c) The Standard of Invention is Too Low  On the other hand, Vaver argues that the standard of invention is too low, so that virtually anything is patentable, regardless of its usefulness to society.  One problems is that litigation is expensive and complicated, and therefore patents that are technically invalid are never challenged.  He argues that “mundane inventions and marginal patents” are not usually deserving of protection. For instance, he cites Posner, who ruled denied a patent on the grounds that the invention was “not the kind of contribution unlikely to be induced except by the promise of a monopoly... it would have been made anyway, and soon”.  However, the courts have demonstrated a pro-patent bias. Thus, the claim that the patent system fosters creativity is exposed as another myth.

d) Patents Should Benefit Society  In order to be consistent with the justifications for patents, it is arguable that only those inventions that can be demonstrated to substantially benefit society should be eligible for patent protection.  Vaver would place the burden of proof on the inventor to prove the societal usefulness of his invention, rather than on the individual challenging the patent, who must disprove its utility. 23

e) Pioneering Patents  Vaver also cautions against the recent trend of extending patent protection to the “frontiers of knowledge”, such as new life forms, which are patentable in the U.S.  These are unpatentable in most European systems. In Canada, the Supreme Court has made it virtually impossible for applications for such patents to comply with the requirement that the invention be fully disclosed so as to be reproducible by a third party. However, there is some indication the Patent Appeal Board may be willing to grant such patents.  Vaver argues that there is a need for an initial and ongoing scrutiny of such applications and patents.

f) Publicly Disclosing the Invention  Although one of the principles of patent law is the element of public disclosure, this is also misleading. There is a highly developed form of drafting patents, which makes them virtually incomprehensible to all except those who are experts in the relevant field.  Once again, this runs counter to the policy of patent law. If they are to form a pool of publicly available knowledge, they should be generally accessible.

g) Patents as Third World Aid?  Finally, Vaver argues in favour of an obligation on industrialized developed countries to spread their technologies to the developing world, either for free or at reduced royalties.

 In conclusion, Vaver returns to the fundamental question of whether intellectual property is “property” at all, and argues that this proposition is not necessarily obvious.  The Supreme Court of Canada has said that neither copyright nor confidential information, though sharing characteristics with traditional proprietary claims, should be classified as property either in the civil or the criminal law.  IP is fundamentally different from land: it is not a scarce resource, and is infinite in time and space. It can be used by all without depleting its value. In fact, the more use, the more valuable it may become. Indeed, by creating property rights in knowledge, it becomes artificially scarce.  Imitation is a natural behaviour: thee line where imitation becomes impermissible is one drawn for social reasons.

 Vaver concludes with some remarks and questions about what society should be concerned with if knowledge is to be classified as property.  Society should be concerned setting up a “market” for ideas, which will be sold to the highest bidder, and should be concerned about those who do not have the resources to enter that market.  Society should be concerned about the unequal distribution of intellectual property in the same way as it is concerned with the unequal distribution of traditional property. It should be concerned with preventing the concentration of copyrights and patents in few hands.  Society should be concerned about undue investment in useless technology to the detriment of more modest, but worthwhile improvements to existing technology. 24  Finally, we should recognized that copyrights and patents are part of our social and economic policy. To the extent that we seek social justice, intellectual property laws, as an important and growing part of that vision, must be scrutinized in this light.

II TRADEMARKS

After discussing some more specific justifications of trade-marks – marks, symbols, words or guises meant to distinguish one product from another’s – and some general concepts like “functionality”, we look at some specific concepts embodied in the TMA: criteria for registrations and bars thereto, description and misdescription, confusion, distinctiveness and use. The section ends with the related common law concepts of passing off and unfair competition.

(A) INTRODUCTION

Definition of trademarks as per D.L.: Distinctive words, symbols, shapes and/or guises that help us to identify certain products. It is a limited type of right that can be lost if you don't use it.

F.I. Schechter, "The Rational Basis of Trademark Protection"

Summary: This article looks at the historical underpinnings of trademark protection. It traces the roots of trademark protection and attempts to define the purpose of such protection in a more modern context.

Part I:

 The orthodox definition of the primary and proper function of trademarks was enunciated in the american case of Hanover Star Milling Co. v. Metcalf as follows: "to identify the origin or ownership of the goods to which it is affixed."

 The modern trademark has two historical roots:

1) The proprietary mark, which was optionally but usually affixed to goods by the owner, either for the benefit of illiterate clerks or in order that in case shipwreck or piracy the goods might be identified and reclaimed by the owner; 2) The regulatory production mark, which was compulsorily affixed to goods by statute, administrative order or municipal or gild regulation, so that defective work might be traced to the guilty craftsman and heavily punished, or that "foreign" goods smuggled into an area over which a gild had a monopoly might be discovered and confiscated.

 Today, defining trademarks in terms of ownership or origin has been largely discarded by courts. Given the intricacies of modern trade and the extensive distribution channels, the source or origin of the goods bearing a well known trademark is seldom known to the consumer.

 Schechter states as follows: 25 Discarding the idea that a trademark...informs the consumer as to the actual source or origin of goods, what does it indicate and with what result? It indicates, not that the article in question comes from a definite or particular source, the characteristics of which or the personalities connected with which are specifically known to the consumer, but merely that the goods in connection with which it is used emanate from the same - possibly anonymous - source or have reached the consumer through the same channels as certain other goods that have already given the consumer satisfaction, and that bore the the same trademark [emphasis added].

 The true function of trademarks can thus be described as follows:

...to identify a product as satisfactory and thereby to stimulate further purchases by the consuming public. The fact that through his trademark the manufacturer or importer may "reach over the shoulder of the retailer" and across the latter's counter straight to the consumer cannot be over-emphasized, for therein lies the key to any effective scheme of trademark protection. To describe a trademark merely as a symbol of goodwill, without recognizing in it as an agency for the actual creation and perpetuation of goodwill, ignores the most potent aspect of the nature of a trademark and that phase most in need of protection. To say that a trademark "is merely the visible manifestation of the more important business goodwill, which is the 'property' to be protected against invasion" or that "the goodwill is the substance, the trademark merely the shadow," does not accurately state the function of a trademark today and obscures the problem of its adequate protection...the trademark is not merely the symbol of goodwill but often the most effective agent for the creation of goodwill, imprinting upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfactions. The mark sells the goods. And, self-evidently, the more distinctive the mark, the more effective is its selling power [emphasis in original and added].

Part II:

 The protection of trademarks initially originated as a measure to prevent the deceit of people by the sale of defective goods and to safeguard the goodwill of the product. At Common Law, the tort of deceit was used even though it was the owner of the trademark and not the consumer that was deceived. Equity focused on protecting the owner's title rather than deceit. Eventually, equity shifted focus from the proprietary aspect to deceit as well, in the form of an action for passing off.

 Schechter summarizes the development as follows:

Equity did not continue the unqualified protection of trademarks in aid of a definite legal right of property but acted under the doctrine of "passing off" in England or of unfair competition in the United States, which was in itself but a development of the law of fraud. Its aim was simply to prevent the deceitful sale or passing off of goods made by one person or firm for goods made by another [emphasis added]. 26

 Essentially, the action required that there be more than mere diversion of trade but that there was a likelihood of confusion as to the source of the infringing goods and that the use of the infringing mark had the potential to discredit or injure the original trademark owner.

Part III:

 Schechter criticizes the approach taken by courts when analyzing trademark infringements. He feels that the protection afforded to trademarks is not sufficient (particularly in cases of very unique marks) and should go much further. He states as follows:

The more distinctive or unique the mark, the deeper is its impress upon the public consciousness, and the greater its need for protection against vitiation or dissociation from the particular product in connection with which it has been used. At the present time the courts, misconstruing,.., the rule that a trademark can only be used as appurtenant to a going business, are unwilling to base their protection of trademarks squarely upon this principle that the value of the plaintiff's symbol depended in large part upon its uniqueness.

 He does agree, however, that the approach taken by courts to give greater protection to arbitrary, coined or fanciful marks is sound. Essentially, he makes the distinction between such marks as BLUE RIBBON and GOLD MEDAL which have very little distinctiveness in the public mind and ROLLS-ROYCE, AUNT JEMIMA, KODAK, MAZDA and CORONA which "...are coined, arbitrary or fanciful words or phrases that have been added to rather than withdrawn from the human vocabulary by their owners, and have, from the very beginning, been associated in the public mind with a particular product, not with a variety of products, and have created in the public consciousness an impression or symbol of the excellence of the particular product in question."

Part IV:

 Schechter summarizes the major points of his article as follows:

(1) that the value of the modern trademark lies in its selling power; (2) that this selling power depends for its psychological hold upon the public, not merely upon the merit of the goods upon which it is used, but equally upon its own uniqueness and singularity; (3) that such uniqueness or singularity is vitiated or impaired by its use upon either related or non-related goods; and (4) that the degree of protection depends in turn upon the extent to which, through the efforts or ingenuity of its owner, it is actually unique and different from other marks.

 His main conclusion is that the preservation of the uniqueness of a trademark should constitute the only rational basis for its protection. He concludes as follows:

The owner of a distinctive mark or name invoking the protection of equity for it, obtains thereby no monopoly of goods or services; these may be freely sold on 27 their own merits and under their own trade symbols. All that the plaintiff in such cases asks is the preservation of a valuable, though possibly anonymous link between him and his consumer, that has been created by his ingenuity and the merit of his wares or services . All the rest of infinity is open to the defendant. So limited a monopoly as that cannot affect legitimate competition, and is of the very essence of any rational system of individual and exclusive trade symbols.

W.M. Landes & R.A. Posner, "Trademark Law: An Economic Perspective"

Summary: As the title suggests, this article takes a look at the benefits of trademarks purely from an economic standpoint.

 The article begins with a definition of trademarks as follows: "...a word, symbol, or other signifier used to distinguish a good or service produced by one firm from the goods and services of other firms. Thus SANKA designates a decaffeinated coffee made by General Foods..."

Benefits of Trademarks:

 The major benefit associated with trademarks is that it reduces the search costs for consumers. In other words, it allows consumers to identify the goods and/or wares they wish to buy much more efficiently. Landes & Posner state as follows:

The benefit of the [trademark] is analogous to that of designating individuals by last as well as first names, so that, instead of having to say "the Geoffrey who teaches constitutional law at the University of Chicago Law School - not the one who teaches corporations," you can say "Geoffrey Stone - not Geoffrey Miller."

 Thus, in order to maximize its economizing function, the trademark must not be duplicated. If there is a failure to enforce trademarks then 2 distinct costs are created:

1. One in the market for trademarked goods; 2. One in the market in languages.

Market for trademarked goods:

 The major benefit of trademarks is that in reducing consumer search costs, the producer must make sure that quality of the product is maintained over time and across consumers. Thus, trademark protection encourages expenditures on quality. Landes & Posner state as follows:

In short, a trademark conveys information that allows the consumer to say to himself, "I need not investigate the attributes of the brand I am about to purchase because the trademark is a shorthand way of telling me that the attributes are the same as that of the brand I enjoyed earlier."...trademarks have self-enforcing feature. They are valuable because they denote consistent quality, and a firm has an incentive to develop a trademark only if it is able to maintain consistent quality. 28

 The benefits of trademarks in lowering consumer search costs presupposes legal protection of trademarks. This could be explained as follows: The value of a trademark will be wholly dependent on the information and reputation it embodies and conveys about the quality of the firm's products. Creating such a reputation requires the producer to expend alot of resources on product quality, service, advertising, etc. Once the reputation is created, consumers will be willing to pay higher prices because of lower search costs and the assurance of consistent quality. The problem is that the cost of duplicating someone else's trademark is typically low. Thus, free- riders have an incentive to copy an established trademark and siphon off the profits from the original producer because consumers will, in the short run, assume that the trademarks are identical. Hence, legal protection is required to prevent this. Landes & Posner state as follows:

The free-riding competitor will, at little cost, capture some of the profits associated with a strong trademark because some consumers will assume, at least in the short run, that the free-rider's and the original trademark holder's brands are identical and if the law does not prevent it, free-riding will eventually destroy the information capital embodied in the trademark, and the prospect of free-riding may therefore eliminate the incentive to develop a valuable trademark in the first place.

Market in languages:

 Another benefit associated with trademark protection is that it allows for the creation of new words. Trademarks improve language in 3 ways:

1. They increase the stock of names of things, thus economizing on communication and information costs; 2. They create new generic words (e.g. kleenex); 3. They enrich the language.

 The goal of a communication system is to minimize the sum of the costs of avoiding misunderstanding and the costs of communicating. Trademarks allow us to achieve this objective by simplifying language. Landes & Posner state as follows:

The more common a term is, the more the benefits of having a single word are likely to outweigh the costs, not only because the gains from shortening the term will be greater, but also because the cost of learning and remembering a word is less if it is in common use.

 Landes & Posner give examples of efficient language rules:

1. Irregularities of grammar and spelling are more common in frequent than infrequent words; 2. Pronunciation changes faster than spelling because changes in pronunciation do not reduce the intelligibility of existing reading matter, which represents a vast and valuable capital stock of knowledge; 3. Perfect synonyms are rare, they would increase learning costs without adding to the communication resources of the language; 29 4. Pronouns, which in all languages known to us are short are an ingenious device for economizing on the length of words.

 Many more examples could be provided but the main point is that efficiency is achieved without a system of property rights in words, grammatical forms and the like. Landes & Posner state as follows:

Of particular relevance to trademarks is the fact that the creation of new words for new things seems not to be retarded by the fact that the coiner of a word can obtain no property right. Either the costs of thinking up new words are slight, or the incentives to do so, independent of any direct compensation, are great. The former seems important for proper names...and for terms of art...,the latter for trademarks - if a producer wants to market a new brand effectively, he needs a distinctive name - unless of course he is trying to pass off his brand as someone else's.

 The conclusion is that trademark protection is slightly different than patent or copyright protection in that we do not need trademark protection just to be sure of having enough words unlike patent protection where we may need it to promote creations/inventions and copyright protection to make sure we have enough books, movies and musical compositions.

Costs of Legally Enforceable Trademarks:

 These enforcement costs are typically modest particularly in cases of "fanciful" marks which have no information content except to denote a specific producer or brand. This cost, however, does not include the cost in inefficient resource allocation from driving a wedge between price and marginal cost.

 There may be a possibility that by fostering product differentiation, trademarks may create deadweight costs, whether of monopoly or excessive competition. The argument goes as follows: trademark protection may induce an owner to spend money to promote a spurious image of high quality that enables monopoly rents to be obtained by deflecting consumers from lower-priced substitutes of equal or even higher quality.

 Moreover, the following can also be the result of trademark protection:

Besides the possibility of creating monopoly rents, trademarks may transform rents into costs, as one firm's expenditure on promoting its mark cancels out that of another firm. Although no monopoly profits are created, consumers may pay higher prices, and resources may be wasted in sterile competition.

 Landes & Posner reject both of the above arguments as follows:

The implicit economic model of trademarks that is used in that law is our model, in which trademarks lower search costs and foster quality control rather than create social waste and consumer deception...The fact that two goods have the same chemical formula does not make them of equal quality to even the most coolly rational consumer. That consumer will be interested not in the formula but 30 in the manufactured product and may therefore be willing to pay a premium for greater assurance that the good will actually be manufactured to the specification of the formula. Trademarks enable the consumer to economize on a real cost because he spends less time searching to get the quality he wants.

Standard Brands, Inc. v. Smidler

Facts:

 Action by Standard Brands against Smidler for infringement of trademark and unfair competition.  Standard Brands has a registered trademark "V-8" for a drink combining eight vegetables. Smidler was selling vitamin tablets in packages marked with the symbol "V-8". The tablets contained 8 vitamins.  Standard Brands also manufactured vitamin tablets in packages but these bore the trademark STAMS.  In both Standard Brands' juice and Smidler's vitamins, "V-8" was the dominant feature of each mark.

Issues:

 Has there been a trademark infringement here? What is the goal of trademark protection?

Held: Standard Brands succeeds, there has been a trademark infringement here.

Ratio (Chase J.):

 He first agrees with the trial court that the trademark is non-descriptive. The symbol "V-8" does not in any way tell the consumer that it is a drink with eight vegetables. He states: "...when put together [i.e. V-8] as they are in the mark they are only an arbitrary and fanciful symbol chosen to designate the plaintiff's vegetable juice cocktail." He feels that by repeatedly advertising the product, Standard Brands has been able to "teach" the public that "V-8" means a vegetable cocktail.

 Chase J. states as follows:

A trade-mark is not one in gross like a patent right but is a right of user in connection with a trade or business to designate the product to which the mark is applied in that trade or business. It is the use of the mark in a going trade or business to distinguish the product of the user from that of others and not the choice of it which creates what becomes the subject of property in the mark...Consequently the plaintiff, having established such user, is entitled to be protected from the use of it by others in the same territory on goods which will be thereby confused with its product and likely to be passed off as such.

 He concludes that it reasonable to expect a vegetable producer to also manufacture vitamins. 31 The protection which the law gives the owner of a trade-mark is not confined to the goods upon which it is, or has been, used by the owner of it but extends to products which would be reasonably thought by the buying public to come from the same source if sold under the same mark.

 Standard Brands has met the burden of showing that it reasonably expect to manufacture vitamins (quite easily done since it already did produce vitamins STAMS) and therefore its action succeeds.

Ratio (Frank J., concurring but almost reads like a dissent):

 Traces the history of trademark protection. Historically, the major purpose in granting injunctions against the unfair use of trademarks was to protect consumers from deception. It was felt that this deception inflicted economic injury on the consumers.

 Over time, the courts felt that if they applied the rules too rigidly with respect to trademark protection that manufacturers would have monopolies over products. The courts, therefore, insisted that consideration be given to the overall policy of not unduly hampering competition. So, the courts would hold that a manufacturer may be initially entitled to trademark protection but that would be lost if advertising was so effective as to create a generic or descriptive designation of the type of goods with which the name is used.

 Frank J. believes that the primary purpose of trademark protection should be the manufacturer's goodwill in the product. He states as follows:

...a plaintiff, who, by use, has pre-empted a name as the symbol of a certain product, asserts that no one else, including the defendant, may, without the plaintiff's consent, use that name as a symbol of another, different, product which the plaintiff has never sold. Obviously, purchasers of the second product are not fooled into believing that it is the same as the first product. The deception, if it exists, consists merely of the erroneous belief that both products come from a common source. No harm to purchasers...results from such erroneous belief. The harm, if any, is to the plaintiff, and is said to be this: The defendant's product may be so "inferior" as to create ill-will among consumers directed against the supposed common maker of both products, with the consequence that the goodwill of the plaintiff, as maker of the first product, will be impaired...Accepting that principle as the basis of plaintiff's suit, logically plaintiff should fail, absent proof that defendant's product is actually "inferior", i.e., so shoddy or substandard that such impairment or plaintiff's goodwill is a likely result.

 In the case at bar, the plaintiff has not offered such proof and Frank J. does not believe it is entitled to governmental protection of the monopoly it claims. But since courts have not required such proof in the past, he is reluctant to require it now. He believes that the U.S. Supreme Court should rule on this issue.

 He questions whether the average consumer would be fooled into thinking that Smidler's vitamins are made by Standard Brands. He states as follows: 32

Plaintiff's real purpose seems to be not to safeguard its goodwill as maker of a vegetable-juice but to shield itself from competition with its STAM vitamin tablets. Consumers will not be advantaged by such interference with "free enterprise". One wonders whether, in such circumstances, plaintiff comes into equity with the required spotless hands.

 That being said, he nonetheless concurs with the majority opinion but with great reservation.

Addendum (D.L.'s comments on trademarks - generally):

 Why legal protection for trademarks? D.L. feels that the critical thing is the source. A trademark establishes a "consistent source". You know that if you buy the product, you will get the same quality. It protects consumers. It allows the consumer to save on search costs.

 There is also an underlying relationship between trademarks and goodwill in the product. The latter is the manufacturer's interest. Trademarks effectively and efficiently protect the manufacturer's goodwill. D.L. makes the following 3 points:

1. Trademarks protect the distinctiveness of the product and avoids confusion on the part of the consumer; 2. Trademarks benefit the manufacturer by protecting the goodwill in the product. However, there is an ancillary benefit to the consumer as mentioned above; 3. By protecting the manufacturer directly and the consumer indirectly, you are taking away rights from the competitor.

 The justification for trademarks is that they encourage people to invest in and promote the goodwill in their products. However, with trademarks you are giving a monopoly. Goodwill is critical in that it is much harder to make a case for trademark protection if there isn't an underlying case for protecting goodwill. So, there is a balancing of interests between the producers (manufacturers), competitors and consumers.

(B) WHAT IS A TRADEMARK?

1. GENERAL CONSIDERATIONS (TMA ss. 2 and 3)

(i) Trade names

Road Runner Trailer Mfg. v. Road Runner Trailer Co.

Facts:

 Dispute over the use of ROAD RUNNER TRAILER. Road Runner Trailer Mfg. Co. had registered this trademark and Road Runner Trailer Co. sought to have it expunged. 33  Road Runner Trailer Co. was arguing that ROAD RUNNER TRAILER was a trade-name and not a trademark (i.e. the name of the business and not associated with the product). As a result, the Trademarks Act should not apply. Note: trade-names are defined in s. 2 of the Act and they are protected under the CBCA or provincial corp. statute and/or the action of passing off.

Issue:

 Is ROAD RUNNER TRAILER a trade-name or trademark?

Held: It is a trademark, Road Runner Trailer Mfg. succeeds.

Ratio (Rouleau J.):

 Rouleau J. relies heavily on U.S. jurisprudence to determine the difference between trade-names and trademarks and cites from Re Walker Process Equipment Inc., an american case as follows:

Trademarks and trade names are distinct legal concepts within the ambit of the law of unfair competition. A trademark is fanciful and distinctive, arbitrary and unique. A trade name may be descriptive, generic, geographic, common in a trade sense, personal, firm or corporate. A trademark's function is to identify and distinguish a product, whereas a trade name's function is to identify and distinguish a business [emphasis added].  When a mark is part of a corporate name, it may be an indication of a trade-name but it is not a bar to being a trademark. Here, the mark appeared in greater prominence and created a distinctive element of the corporate name. The mark was attached to the goods manufactured by the co. and ROAD RUNNER TRAILER was used to distinguish the co.'s trailers from competitors. "The mark was sufficiently associated with the wares to give to the person to whom the property is transferred a sufficient distinct identity to allow the person in possession of the wares to associate the mark with them."

 One must look at the facts of each case to determine whether it is a trademark or not. Essentially, if the trademark is part of the corporate name, there is a presumption that it is a trade-name but this presumption is always rebuttable.

(ii) Functionality

This section examines whether a trademark that is also functional can be registered. Some argue that to allow registration of functional marks would in effect allow to indirectly create patents and to avoid the application of patent law. A difference between a patent and a trademark is that a patent expires after 20 years in Canada while a TM, as long as it is used, is still in force.

This argument raises the issue of the objective of a trademark. Its first purpose is to allow easy identification of the product (consumers and manufacturers). S.2 of the TM Act : distinctive  definition. It may also may be more than identification purposes. It goes as well to status (goodwill). So in addition to just saying that these are Nike shoes, the idea is that it is better to wear this clothes (consumers influence). 34 In terms of history of TM, common law developed the idea that one should not be able to sell products that are misrepresenting as being products of another. Nobody has the right to represent his goods as the goods of somebody else. Words and phrases may be protected : You deserve a break today! (KitKat).

Smith, Kline & French Canada Ltd. v. Registrar of Trade Marks

Facts: This is an appeal before the Federal Court, Trial Division. The Registrar of Trade Marks refused the registration of a “distinguishing guise”. The distinguishing guise is described as a “light green coloured coating applied to the outside of a circular bi-convex tablet” (medication). The appellant makes no claim re: the shape or the coating per se but claims “the right to the exclusive use of the distinguishing guise in the specific shape, colour and coating, limited to the wares described earlier”.

Ratio: The appeal is dismissed. The guise is not a “distinguishing guise” under the terms of s. 2 of the TMA, defined as: (a) a shaping of wares or their containers, or (b) a mode of wrapping or packaging wares the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others; Three elements form part of the claimed guise (shape, colour and coating). The applicant must establish that each element is a permissible element of a distinguishing guise. The coating of the pill cannot be: it is not a “mode of wrapping or packaging” as in par. (b). Wrapping or packaging refers to a separate covering or container. Here, the coating is not separate from the pill itself.

Professor Lametti: SK are trying to claim that it is three elements all together that form part of the ditinguishing guise : 1) shape, 2) color and 3) the green film. As the court points out, this does not fit with the definition in section 2. Applicant must establish that each of the elements he is claiming are separatly falling under the requirements of the definition provided for in section 2 of the TM Act. Green film does not count as a mode of packaging as per the dictionnary definition of packaging.

Pizza Pizza Ltd. v. Registrar of Trade Marks

Facts: The applicant wants to register his pizza delivery phone number as a TM for use in association with food, promotional items and delivery services. 967-1111 is the phone number of all 60 of Pizza Pizza’s outlets. The registrar refused the application on the basis that a phone number functions to enable a person to contact an instrument (phone), not to distinguish wares. 35

Issue: Is a phone number registerable as a trademark?

Ratio: (Pratte J.A.) The functional character of the phone number does not make it unregisterable. A functional mark is unregisterable only when it is a part of the ware and that granting a registration would in effect give the applicants a monopoly on functional characteristics of their ware.

(Urie J.A.) S. 2 of the TMA defines a trademark as (a) a mark is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others, (b) a certification mark, (c) a distingushing guise, or (d) a proposed trade mark; This trademark was adopted with the intention that it be used on all products and advertising. Such use and advertising has been extensive. This seven-digit numerical combination does serve to identify Pizza Pizza’s wares from others’. It is thus registerable, even though it also functions to enable customers to contact Pizza Pizza. It satisfies the definition of s. 2 because it is (1) a mark used by a corporation (2) that is used to distinguish wares sold by it (3) from wares sold by others. Allowing the registration would give Pizza Pizza a monopoly over that seven-digit number only for use in association with the wares and services for which the registration is granted.

Remington Rand Corp. v. Philips Electronics NV

Facts: Remington appeals from a judgement refusing to expunge four trademarks alleged to be invalid because they were functional features of an electric shaver. The distinguishing guises at issue are representations of shaver heads (triple-headed rotary electric head assembly). If Philips’ registrations are valid, it will prevent Remington form marketing triple-headed shavers.

Issue: “whether a pictorial description of a manufactured article, and in particular of some of its working parts, can be the subject of a trade mark registration”.

Judgement: The appeal is allowed. The trademarks are expunged.

Ratio: Design marks: Invalidity of a trademark on the basis of functionality has no statutory basis and is provided for only in the common law. The Imperial Tobacco Co. case from 1939 established that principle and did not allow cellophane outer wrapper with a coloured strip to be registered because the coloured strip served to indicate where the tear strip was located and facilitated the 36 opening of the wrapping. The Court also makes reference to the Pizza Pizza case and sets out the test for functionality as follows: if functionality goes to the trademark itself, or to the wares, then the mark cannot be registered. If functionality is “secondary or peripheral”, then it is not a bar to registration.

In the case at bar, allowing the trademarks to be registered would in effect give Philips a patent under the guise of trademark. The design mark depicts functional elements (three-headed equilateral triangular configuration) and is thus primarily functional.

Distinguishing guises: The argument of the trial judge is that a distinguishing guise is inherently functional because it serves to wrap a product. Therefore, it would not be a problem if a distinguishing guise were functional. However, the Federal Court of Appeal has a different reasoning. The definition of a TM in the TMA and the Pizza Pizza case indicate that “the essence of a trade mark is to distinguish the wares of a registered owner from those sold by others”. The essence of a distinguishing guise is identical to that of a design mark in that it serves the same purpose. Every form of trade mark is distinguished by its distinctiveness. Thus a distinguishing guise will be governed by the same rule of functionality as a design mark. Functionality that relates primarily to the ware will invalidate the TM. Such is the case for the distinguishing guise at issue.

Professor Lametti: If there is a functional aspect, to what extent this could be a bar to registration (as it was the case in the Pizza Pizza case). Remington’s argument is that it is basically functionnal. What is the ultimate question in this case wrt relationship between functionality and registrability? When determining whether primarily functional, then we must determine what is the tie with the product.The law of patents tries to foster incentives to create by precluding other manufacturers to use the same idea to compete against the original manufacturer who is the inventor of the TM product.

(iii) Distinguishing Guise

Reckitt & Colman Products Ltd. v. Borden Inc.

Facts: This is a case from the House of Lords (1989-90). It is a passing off action at common law. The plaintiffs have been selling lemon juice in yellow plastic squeeze packs that resemble lemons. The defendants want to market juice similarily wrapped and they try to register it. In addition, Colman takes an action in passing off : 1) goodwill or reputation attached to the goods, 2) must establish a misrepresentation that leads to or is likely to lead to confusion and 3) damages or likeliness to suffer damages.

Ratio: See section on passing off for a complete summary of the ratio. This case is a passing off action. It is relevant in this section as an example of what is a distinguishing guise. In itself, the lemon wrapper could not have been registered as a trademark. But it has achieved that statute 37 through continuous use. The issue here is not the plastic lemon itself, but the fact that it is suggestive of its content. To reach that result, the Court assumes that housewives don't read labels and that they will think they're buying JIF every time they buy juice inside a plastic melon. Such a rationale is highly surprising in 1990. The House of Lords made the assumption that : 1) women stay at home; 2) women who stay at home do the groceries shopping; 3) housewifes are too dumb to read a big fluorescent label. (Sorry for the editorial note here).

Professor Lametti: The rationale of this decision is trying to protect the consumers (housewifes who do not read the labels). Is this a functional type of packaging or is it the legitimate subject- matter of a distinguishing guise? There is no doubt that this container has a functional aspect (but only secondary functionality). It is clearly a distinguishing guise.

2. STATUTORY CONSIDERATIONS – UNREGISTERABLE MARKS

(i) Name or Surname

 s. 12(1)(a) of the Trade-Marks Act states that a trade-mark is registrable if it is not: “a word that is primarily merely the name or the surname of an individual who is living or who has died within the preceding thirty years”.

Galanos v. Registrar of Trade Marks (1982) 69 C.P.R. (2d)  Appeal from the registrar’s refusal to grant an application for the registration of the word “Galanos” as a trade mark for use in association with perfume and other such products (based on s. 12(1)(a)).  The registrar had searched telephone directories and found 5 listings of the surname Galanos. This is also the name of the applicant. The registrar had felt that the average Canadian would perceive the word to be a surname.  Evidence was also brought to show that the word “galanos” has a meaning in Spanish.  The court examines what the words “primarily merely” in s. 12(1)(a) mean. These words were taken from the U.S. Patent Act.  A test had been set out in the earlier case of Coles Book Stores, which was: “Is the primary (chief) (principal) (first in importance) meaning of the word merely (only) (nothing more than) a surname?”  In another case, Standard Oil Co., the court had made a non-exhaustive list of categories of words for trade-mark purposes: (1) dictionary words; (2) names; (3) invented words. In this case, the court adds another category, namely foreign words, which may be a subsidiary of the category of invented words.  There is no problem with registering a foreign word, the meaning of which is not known to the general public of Canada, i.e., which has no discernible meaning in English or French.  However, regardless of this, a word may NOT be registered if it is in any language the name of the wares it is to be associated with as a trade-mark.  Thus, a foreign word which is not the name of the wares and the meaning of which is not known in Canada would fall under the 3rd category of words, namely invented words. 38  Here, the word “Galanos” is a surname, but it is rare. Therefore, it is not “primarily merely” a surname. It has no meaning in either English or French.  The Canadian of ordinary intelligence and education would likely respond to the word by thinking of it as a coined, fancy or invented word. Therefore, it may be registered as a trade- mark.

 The name and surname rule in s. 12(1)(a) is a relative bar to registration. Names can become registrable by use over time. However, there is a requirement that they have become distinctive (e.g. McDonald’s). This is provided for in s. 12(2) of the Trade-Marks Act.  The purpose of the bar is that we do not want to preclude others with the same name from starting up a business under their name. Any confusion that might result is the “lesser of two evils”, even though trade-marks law is primarily concerned with preventing confusion at source.  It might be possible to protect a name when it is combined with another word. For example, the legislation might allow registration of the mark “The Donald” for an alcoholic drink. Moreover, Donald Trump would not be prevented from using his name on other products.

(ii) Descriptive or Misdescriptive?

 S. 12(1)(b) of the Trade-Marks Act prevents the registration of a mark that is: “whether depicted, written, or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin”.  Note, again, however, that s. 12(1)(b) is a relative bar to registration. A descriptive mark which has nevertheless become distinctive with respect to a certain product over time may eventually be registrable under s. 12(2).

Descriptive  One cannot simply describe where the product is from or what it is, nor can such description be misleading. E.g. a mark such as “Red Car” or “Montreal Bagels” would be unregistrable, at least until such time as it had become distinctive.

Provenzano v. Registrar of Trade Marks (19877) F.C.T.D.  Appeal from registrar’s refusal to register the mark KOOL ONE to be used in connection with beer. The refusal had been based on s. 12(1)(b) of the Act, namely that it was either clearly descriptive or deceptively misdescriptive.  In order to offend s. 12(1)(b), the word must be clearly descriptive and not merely suggestive. For it to be clearly descriptive, it must be material to the composition of the goods or product.  To be misdescriptive, it must also relate to the composition of the goods and falsely or erroneously describe something which is material when in fact it is not. 39  The court finds that the adjective “cold” when applied to beer is not in any way descriptive of the intrinsic character or quality of the product. It refers only to the state at which it may be sold and/or consumed.  It is also not misdescriptive, since no member of the public would feel deceived by the fact that the beer was not inherently cold.  Therefore, the trade-mark is registrable.

Rothmans, Benson & Hedges Inc. v. Imperial Tobacco Ltd. (1995)  Opposition to the registration of the words INSTA-KIT to be used in association with a kit for making one’s own cigarettes. The opposition was again based on s. 12(1)(b), as being clearly descriptive.  The court states that the issue is to be resolved from the point of view of the everyday user, considering the mark in its entirety (as opposed to carefully analyzing and dissecting the mark into its component parts). The test is one of first impressions.  The opponent argued that the words INSTA-KIT were an expression for the phrase “instant cigarette making kit”.  However, the “insta” has no meaning. Even if it is understood as meaning “instant”, the expression would connote a kit for making “instas” or instants, which is nonsensical.  The court finds that the expression is merely suggestive of the fact that the wares are compatible with a cigarette making kit. However, this is not the plain and unambiguous meaning of the mark, which is therefore registrable.  There is an additional “mental leap” which must be made from the mark to the meaning which it suggests.

Coca-Cola Co. et al. v. Cliffstar Corp (1993)  Opposition to the registration of LE JUICE for fruit juices and drinks. The opposition is based on s. 12(1)(c) (it is the name of the wares) and 12(1)(b) (clearly descriptive or misdescriptive).  On the first ground, the court finds that the trade-mark as a whole cannot be said to be the name of anything in the either English or French. The fact that each word means something in its respective language is irrelevant.  On the second ground, s. 12(1)(b) does not prevent the registration of a descriptive English word prefaced by a French definite article. It does not preclude the registration of a combination of English and French words, which are individually descriptive.  Here, the court is strictly applying the rule that it must look at the trade-mark as a whole, and not dissect it into its component parts.

Misdescriptive 40  s. 12(1)(b) also prohibits the registration of marks which are misdescriptive, in the sense that they are likely to mislead the consumer as to the character or quality of the wares.

T.G. Bright & Co. Ltd. v. Andres Wines Ltd. (1985) F.C.T.D.  At issue was the registration of the words BABY DUCK CANADIAN CHAMPAGNE as a trade-mark. The words CANADIAN CHAMPAGNE were already disclaimed apart from the trade-mark under s. 35 (i.e. the applicant recognized that they could not claim exclusivity to those words separately from the entire trade-mark).  The application was opposed based on s. 12(1)(e) of the Act, since it was claimed to be prohibited under s. 10: a mark that has by ordinary commercial usage become recognized in Canada as designating the kind, quality, quantity, … of any wares or services.  However, the disclaimer section makes it possible to use a word or words, as part of another trade-mark, that might otherwise be prohibited by s. 12(1).  The court states that clearly there are words which can be disclaimed, and CANADIAN CHAMPAGNE is almost a textbook case.  The court looks at other trade-marks which use the words Canadian champagne, and concludes that the mark is registrable.  The only caveat is that there may be a public interest in maintaining the purity of the register. Therefore, there may be problem if the product does not comply with the general understanding of “Canadian champagne” in the relevant industry, since the name might be misleading or misdescriptive. However, there is not as yet any accepted definition, and no evidence was brought to the court on this matter.

(iii) The Name in Any Language

A. RELEVANT STATUTORY PROVISION(S):

Registerable Trade-Marks When Trade-Mark Registerable 12(1) Subject to section 13, a trade-mark is registerable if it is not (c) the name in any language of any of the wares or services in connection with which it is used or proposed to be used

B. RELEVANT SECTIONS FROM VAVER TEXT:

C. Criteria for Registerability

Choosing a mark requires more than finding something distinctive that qualifies as a trade-mark. The mark must be registerable. Otherwise, the Trade Mark Office will reject it; and any registration, if wrongly made, is always vulnerable to being invalidated in court. 41 1) Absolute Bars

The following trade-marks are absolutely barred from registration. b) Generic Marks

 A name cannot be “the name in any language of any of the wares or services” for which it is used or proposed (12(1)(c)). - e.g. Airplane, avion, aeroplano and flugzeug cannot be registered for aircraft.  How many speakers of the language there are in Canada is irrelevant: importers or exporters from any country should not be inhibited from using whatever language they wish to denote a product or service.  The fact that the applicant first coined the name is irrelevant.  The prohibition goes further than the common law, which accepts a foreign generic word as distinctive if it was not commonly recognized as such — even if few people in Canada actually know the language or the word.

C. SUMMARY OF CASES:

Jordan & Ste. Michelle Cellars v. Andres Wines Ltd.

Facts: The applicant applied to register NOSTRANO based upon proposed use in association with wine. The opponent alleged that the application was contrary to section 12(1)(c) of the Trade- Marks Act because the applicant’s trade-mark was the name given by peasant wine producers of Italian Switzerland to a local wine.

Holding: The application was refused.

Reasoning: The parties’ evidence indicated that NOSTRANO was a type of wine product in an area of Switzerland and that the word “nostrano” is defined in an Italian language dictionary as meaning “domestic, home-grown, regional.” The applicant’s argument that section 12(1)(c) speaks of a “name in any language of any of the wares” and implies “use” in a much broader sense in that a name should be recognized throughout a country or universally as the name of the wares in a particular language involved, and not simply a use in a localized area is unsuccessful. There is no limitation in section 12(1)(c) which would limit the language so that the name would be recognized throughout a country or universally as the name of the wares in a particular language. A broad interpretation should be applied to the words “any language” appearing in section 12(1)(c). 42 While the word “nostrano” is defined in the Italian language as meaning “domestic, national home-grown, regional” the fact that the word is recognized to such an extent as to be included in an encyclopaedia of wine as designating a type of wine and therefore the name of a wine produced in the Italian area of Switzerland, is sufficient for it to fall within the prohibition of section 12(1)(c).

Principle(s): There is no limitation in section 12(1)(c) of the Trade-Marks Act which would limit the name as would be recognized throughout a county or universally as the name of the wares in a particular language. A broad interpretation should be applied to the words “any language” appearing in section 12(1)(c).

(iv) Prohibited Marks

A. RELEVANT STATUTORY PROVISION(S):

Interpretation Definitions 2. In this Act,

"Certification Mark" "Certification mark" means a mark that is used for the purpose of distinguishing or so as to distinguish wares or services that are of a defined standard with respect to (a) the character or quality of the wares or services, (b) the working conditions under which the wares have been produced or the services performed, (c) the class of persons by whom the wares have been produced or the services performed, or (d) the area within which the wares have been produced or the services performed, from wares or services that are not of that defined standard.

"Geographical Indication" "Geographical indication" means, in respect of a wine or spirit, an indication that (a) identifies the wine or spirit as originating in the territory of a WTO Member, or a region or locality of that territory, where a quality, reputation or other characteristic of the wine or spirit is essentially attributable to its geographical origin, and (b) except in the case of an indication identifying a wine or spirit originating in Canada, is protected by the laws applicable to that WTO Member.

"WTO Agreement" "WTO Agreement" has the meaning given to the word "Agreement" by subsection 2(1) of the World Trade Organization Agreement Implementation Act;

"WTO Member" 43 "WTO Member" means a Member of the World Trade Organization established by Article I of the WTO Agreement.

Unfair Competition and Prohibited Marks Prohibited marks 9(1) No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, (a) the Royal Arms, Crest or Standard; (b) the arms or crest of any member of the Royal Family; (c) the standard, arms or crest of His Excellency the Governor General; (d) any word or symbol likely to lead to the belief that the wares or services in association with which it is used have received, or are produced, sold or performed under, royal, vice-regal or governmental patronage, approval or authority; (e) the arms, crest or flag adopted and used at any time by Canada or by any province or municipal corporation in Canada in respect of which the Registrar has, at the request of the Government of Canada or of the province or municipal corporation concerned, given public notice of its adoption and use; (f) the emblem of the Red Cross on a white ground, formed by reversing the federal colours of Switzerland and retained by the Geneva Convention for the Protection of War Victims of 1949 as the emblem and distinctive sign of the Medical Service of armed forces and used by the Canadian Red Cross Society, or the expression "Red Cross" or "Geneva Cross"; (g) the emblem of the Red Crescent on a white ground adopted for the same purpose as specified in paragraph (f) by a number of Moslem countries; (h) the equivalent sign of the Red Lion and Sun used by Iran for the same purpose as specified in paragraph (f); (h.1) the international distinctive sign of civil defence (equilateral blue triangle on an orange ground) referred to in Article 66, paragraph 4 of Schedule V to the Geneva Conventions Act; (i) any territorial or civic flag or any national, territorial or civic arms, crest or emblem, of a country of the Union, if the flag, arms, crest or emblem is on a list communicated under article 6ter of the Convention or pursuant to the obligations under the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the 44 WTO Agreement stemming from that article, and the Registrar gives public notice of the communication; (i.1) any official sign or hallmark indicating control or warranty adopted by a country of the Union, if the sign or hallmark is on a list communicated under article 6ter of the Convention or pursuant to the obligations under the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the WTO Agreement stemming from that article, and the Registrar gives public notice of the communication; (i.2) any national flag of a country of the Union; (i.3) any armorial bearing, flag or other emblem, or any abbreviation of the name, of an international intergovernmental organization, if the armorial bearing, flag, emblem or abbreviation is on a list communicated under article 6ter of the Convention or pursuant to the obligations under the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the WTO Agreement stemming from that article, and the Registrar gives public notice of the communication; (j) any scandalous, obscene or immoral word or device; (k) any matter that may falsely suggest a connection with any living individual; (l) the portrait or signature of any individual who is living or has died within the preceding thirty years; (m) the words "United Nations" or the official seal or emblem of the United Nations; (n) any badge, crest, emblem or mark (i) adopted or used by any of Her Majesty's Forces as defined in the National Defence Act, (ii) of any university, or (iii) adopted and used by any public authority, in Canada as an official mark for wares or services, in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority, as the case may be, given public notice of its adoption and use; (n.1) any armorial bearings granted, recorded or approved for use by a recipient pursuant to the prerogative powers of Her Majesty as exercised by the Governor General in respect of the granting of armorial bearings, if the Registrar has, at the request of the Governor General, given public notice of the grant, recording or approval; or 45 (o) the name "Royal Canadian Mounted Police" or "R.C.M.P." or any other combination of letters relating to the Royal Canadian Mounted Police, or any pictorial representation of a uniformed member thereof.

Excepted uses 9(2) Nothing in this section prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of any mark (a) described in subsection (1) with the consent of Her Majesty or such other person, society, authority or organization as may be considered to have been intended to be protected by this section; or (b) consisting of, or so nearly resembling as to be likely to be mistaken for (i) an official sign or hallmark mentioned in paragraph (1)(i.1), except in respect of wares that are the same or similar to the wares in respect of which the official sign or hallmark has been adopted, or (ii) an armorial bearing, flag, emblem or abbreviation mentioned in paragraph (1) (i.3), unless the use of the mark is likely to mislead the public as to a connection between the user and the organization.

Further prohibitions 10. Where any mark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin or date of production of any wares or services, no person shall adopt it as a trade-mark in association with such wares or services or others of the same general class or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling that mark as to be likely to be mistaken therefor.

Further prohibitions 10.1 Where a denomination must, under the Plant Breeders' Rights Act, be used to designate a plant variety, no person shall adopt it as a trade-mark in association with the plant variety or another plant variety of the same species or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling that denomination as to be likely to be mistaken therefor.

Prohibited adoption of indication for wines 11.14(1) No person shall adopt in connection with a business, as a trade-mark or otherwise, (a) a protected geographical indication identifying a wine in respect of a wine not 46 originating in the territory indicated by the protected geographical indication; or (b) a translation in any language of the geographical indication in respect of that wine.

Prohibited use 11.14(2) No person shall use in connection with a business, as a trade-mark or otherwise, (a) a protected geographical indication identifying a wine in respect of a wine not originating in the territory indicated by the protected geographical indication or adopted contrary to subsection (1); or (b) a translation in any language of the geographical indication in respect of that wine.

Prohibited adoption of indication for spirits 11.15(1) No person shall adopt in connection with a business, as a trade-mark or otherwise, (a) a protected geographical indication identifying a spirit in respect of a spirit not originating in the territory indicated by the protected geographical indication; or (b) a translation in any language of the geographical indication in respect of that spirit.

Prohibited use 11.15(2) No person shall use in connection with a business, as a trade-mark or otherwise, (a) a protected geographical indication identifying a spirit in respect of a spirit not originating in the territory indicated by the protected geographical indication or adopted contrary to subsection (1); or (b) a translation in any language of the geographical indication in respect of that spirit.

Continued use 11.17(1) Where a Canadian has used a protected geographical indication in a continuous manner in relation to any business or commercial activity in respect of goods or services (a) in good faith before April 15, 1994, or (b) for at least ten years before that date, 47 section 11.14 or 11.15, as the case may be, does not apply to any continued or similar use by that Canadian.

Definition of "Canadian" 11.17(2) For the purposes of this section, "Canadian" includes (a) a Canadian citizen; (b) a permanent resident within the meaning of the Immigration Act who has been ordinarily resident in Canada for not more than one year after the time at which the permanent resident first became eligible to apply for Canadian citizenship; and (c) an entity that carries on business in Canada.

Exception for disuse 11.18(1) Notwithstanding sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of a protected geographical indication identifying a wine or spirit if the indication has ceased to be protected by the laws applicable to the WTO Member for which the indication is protected, or has fallen into disuse in that Member.

Exceptions for customary names 11.18(2) Notwithstanding sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of an indication in respect of a wine or spirit (a) that is identical with a term customary in common language in Canada as the common name for the wine or spirit, as the case may be; or (b) that is identical with a customary name of a grape variety existing in Canada on or before the day on which the Agreement comes into force.

Exception for generic names for wines 11.18(3) Notwithstanding sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of the following indications in respect of wines: (a) Champagne; (l) Claret; (b) Port; (m) Bordeaux; (c) Porto; (n) Chianti; (d) Sherry; (o) Madeira; 48 (e) Chablis; (p) Malaga; (f) Burgundy; (q) Marsala; (g) Bourgogne; (r) Medoc; (h) Rhine; (s) Médoc; (i) Rhin; (t) Moselle; (j) Sauterne; (u) Mosel; and (k) Sauternes; (v) Tokay.

Exception for generic names for spirits 11.18(4) Notwithstanding sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of the following indications in respect of spirits: (a) Grappa; (i) Schnapps; (b) Marc; (j) Malt Whiskey; (c) Ouzo; (k) Eau-de-vie; (d) Sambuca; (l) Bitters; (e) Geneva Gin; (m) Anisette; (f) Genièvre; (n) Curacao; and (g) Hollands Gin; (o) Curaçao. (h) London Gin;

Governor in Council amendment 11.18(5) The Governor in Council may, by order, amend subsection (3) or (4) by adding thereto or deleting therefrom an indication in respect of a wine or spirit, as the case may be.

Exception for failure to take proceedings 11.19(1) Sections 11.14 and 11.15 do not apply to the adoption or use of a trade-mark by a person if no proceedings are taken to enforce those sections in respect of that person's use or adoption of the trade-mark within five years after use of the trade- mark by that person or that person's predecessor-in-title has become generally known in Canada or the trade-mark has been registered by that person in Canada, unless it is established that that person or that person's predecessor-in-title first used or adopted the trade-mark with knowledge that such use or adoption was contrary to section 11.14 or 11.15, as the case may be.

Idem 11.19(2) In proceedings respecting a registered trade-mark commenced after the expiration of five years from the earlier of the date of registration of the trade-mark in Canada and the date on which use of the trade-mark by the person who filed the application for registration of the trade-mark or that person's predecessor-in-title has become generally known in Canada, the registration shall not be expunged or amended or held invalid on the basis of paragraph 12(1)(g) or (h) unless it is established that the person who filed the application for registration of the trade- 49 mark did so with knowledge that the trade-mark was in whole or in part a protected geographical indication.

Registerable Trade-Marks When Trade-Mark Registerable 12(1) Subject to section 13, a trade-mark is registerable if it is not (e) a mark of which the adoption is prohibited by section 9 or 10; (f) a denomination the adoption of which is prohibited by section 10.1; (g) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication; and (h) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication.

Certification Marks Registration of certification marks 23(1) A certification mark may be adopted and registered only by a person who is not engaged in the manufacture, sale, leasing or hiring of wares or the performance of services such as those in association with which the certification mark is used.

Licence 23(2) The owner of a certification mark may license others to use the mark in association with wares or services that meet the defined standard, and the use of the mark accordingly shall be deemed to be use thereof by the owner.

Unauthorized use 23(3) The owner of a registered certification mark may prevent its use by unlicensed persons or in association with any wares or services in respect of which the mark is registered but to which the licence does not extend.

Action by unincorporated body 23(4) Where the owner of a registered certification mark is an unincorporated body, any action or proceeding to prevent unauthorized use of the mark may be brought by any member of that body on behalf of himself and all other members thereof.

B. RELEVANT SECTIONS FROM VAVER TEXT:

B. What is a Trade-Mark? 50 1) Categories of Trade-Mark e) Certification Mark

 Certification marks do not distinguish one producer from another. Indeed, a producer of goods such as those covered by the registration cannot directly own a certification mark (23(1)).  Certification marks distinguishes products or services of a defined standard from others. The standard-setter owns the mark and licenses those meeting the standard to use it.  Certification marks have been stretched to encompass franchising and merchandise licensing operations. More typically, they cover appellations of origin for foods and wines (SWISS chocolate), seal of approval (the Canadian Standard Association’s CSA APPROVED mark) and union labels certifying goods made by unionized labour.  Certification marks that have not become generic are also protectable by passing-off.

C. Criteria for Registrability

1) Absolute Bars

The following trade-marks are absolutely barred from registration. c) Other Generic Symbols

 A mark that, in ordinary good-faith commercial usage, has become recognized in Canada as designating the kind, quality quantity, value, place of origin, or date of production of any product or service is unregisterable for wares or services of the same general class (10).  Denominations of plant varieties under the Plant Breeders’ Right Act also come into this category (10.1).  Any similar mark or name that would likely be mistaken for these indicators also cannot be used or registered.  Prohibited indicia in these categories may be part of a registered mark if they are used non-deceptively and made subject to an appropriate disclaimer. d) Wine and Spirit Appellations

 Marks for wines or spirits cannot include protected geographical indications listed by the Registrar, if the wine or spirit does not come from that area (12(1)(g) & (h)).  The list of geographic indications, established as a TRIPs obligation, presently allows the use of Champagne, as well as other terms commonly used in the Canadian liquor trade (11.18(3) & (4)). e) Marks Similar to Official Marks

 No mark the same as or very like an official mark can be used as a trade-mark or otherwise in business, except with its owner’s consent. 51  These marks include royal arms and crests, flags and marks adopted by public authorities — for example, Olympic marks and university emblems. f) Offensive Marks

 A “scandalous, obscene or immoral” word or device cannot be used as a trade-mark or otherwise.  A fair amount should be tolerated, since commercial expression is protected under section 2(b) of the Canadian Charter of Rights and Freedoms. g) Suggested Connection with Individuals

 Anything falsely suggesting a connection with any living person (including a portrait or signature) cannot be used or registered without his or her consent. - Nor may the portrait or signature of anyone who died less than thirty years ago be similarly used without the estate’s consent. - For portraits and signatures, the right passes to the estate and lasts thirty years after death. The individual must, however, have a significant public reputation throughout Quebec.  These provisions effectively create rights, exercisable without proof of injury or damage, in an individual’s personality or other features by which he or she may be recognized.

D. Official Marks

 Various bodies and authorities can use identifying marks and symbols that cannot be adopted by anyone else in connection with a business, as trade-marks or otherwise, without prior consent.  Neither the exact mark nor one similar as to be likely mistaken for it can be adopted.  Protection for some marks is automatic, while for others, the Registrar of Trade-Marks must first post a notice in the Trade-Marks Journal. Others still must have that notice preceded by one given to the World Intellectual Property Organization bureau in Geneva.

1) Marks Automatically Protected

 The following marks and symbols are automatically protected (sections 9(1)(a)-(d), (f)- (h.1), (i.2), (m) & (o)): - The arms, crests and standards of the royal family or anything suggesting royal, vice-regal, or governmental patronage, approval, or authority. - The Red Cross and its emblem, the Red Crescent, Red Lion, and Sun emblems, and the international civil defence sign (an equilateral blue triangle on an orange ground). - The national flags of Paris Convention and WTO countries. - The United Nations, and its official seal or emblem. - The Royal Canadian Mounted Police, any combination of letters relating to the RCMP, and any pictorial representation of uniformed RCMP member. 52 2) Marks Protected after Public Notice

 The following marks are protected once the Registrar of Trade-Marks, at the adopter’s request, gives public notice that a mark or symbol has been adopted and used (sections 9(1)(e), (n.1) & (n)): - The arms, crests, and flags of Canada, its provinces, and municipalities. - Other armorial bearings formally granted by the Governor General and publicly notified by the Registrar at the former’s request, although a use that will not likely mislead the public into connecting the user with the bearer is allowed (section 9(2)(b)(ii)). - A university’s badges, crests, emblems, and marks. - Badges, crests, emblems, and marks adopted and used by the Canadian Armed Forces. - Badges, crests, emblems, and marks adopted and used as an official mark by any Canadian “public authority” for its wares and services. - Anybody operating for the public benefit and subject to significant government control or financing may qualify under this head.

3) Foreign Official Marks

 The following symbols are banned, once they are listed with the World Intellectual Property Organization bureau in Geneva and once the list is publicly notified by the Registrar of Trade-Marks in the Trade-Marks Journal (sections 9(1)(i), (i.1) & (i.3)): - National, territorial, or civic arms, crests, and emblems of Paris Convention and WTO countries, and their territorial or civic flags. - Official signs or hallmarks indicating control or warranty adopted by such countries. - These indicia are, however, allowed on products that are not the same as or similar to those for which the indicia were adopted (section 9(2)(b)(i)). - Armorial bearings, flags, emblems, or name abbreviations of an international intergovernmental organization (e.g., UNESCO, GATT, IMF).

E. Geographical Indications

 At the insistence of European countries (particularly France) with established appellations of origin for better-class wines and food, TRIPs contains a set of provisions designed to extend worldwide protection for appellations of origin.  In Canada, the existing system of certification marks takes care of much of this obligation. TRIPs, however, required special protection for appellations relating to wines and spirits. Accordingly, Canada introduced a system in 1996 to protect “geographical indication[s]” for wines and spirits, as an alternative to certification marks.  The new system prohibits the adoption or use as a trade-mark or otherwise of any “protected” geographical indication for a wine or spirit not originating in that area. - The TMO keeps a list of these indications. 53

C. SUMMARY OF CASES:

Canadian Olympic Association v. Bio-Lab Canada Inc.

Facts: The applicant filed an application to extend the services of a trade mark registration for SWIMMER & WAVES Design to include pool and spa maintenance services based on use.

Holding: The opposition was rejected.

Reasoning: The issue was whether the applicant’s mark consists of, or so nearly resembles as to be likely to be mistaken for, one or more of the official marks relied upon by the opponent. The marks are not identical and while the marks considered in their entireties do bear some resemblance because of similar upper torso and head stylization components, the marks are from being almost the same. The applied for mark does not so nearly resemble the opponent’s mark as to be likely to be mistaken for it.

Principle(s):  The test to be applied in comparing an applied-for mark to an official mark has been discussed in the Ontario Federation of Anglers & Hunters case: [T]he test to be applied is one of straight comparison of the marks in question apart from any market-place considerations such as the wares, services or trades involved. ... In other words, is the applicant’s mark identical to, or almost the same as, the official mark?

Bousquet v. Barmish Inc.

Facts: The applicant (to expunge a registration for the trade mark CACHAREL for men’s pants) Jean Bousquet, known since 1960 as Jean Cacharel, designs clothing for men, women and chlidren sold around the world under the trade mark CACHAREL. He has acquired a reputation in the fashion world as a prominent designer under the name Jean Cacharel. The second applicant is a French company Jean Cacharel S.A. which sells clothing throughout the world under the mark CACHAREL. The applicants sold in Canada women’s clothing since 1967 and children’s clothing since 1970. They did not sell men’s clothing in Canada. 54 The respondent, Barmish, commenced the use of the mark CACHAREL in 1974 and applied for registration of it in that year. Registration was effected for men’s pants in April of 1975. It became aware of the use of the applicants in association with ladies’ wear before the registration matured. The applicants applied in 1983 to expunge the registration of Barmish alleging three grounds: 1. That the adoption of the mark CACHAREL by Barmish was prohibited because it may falsely suggest a connection with a living individual, contrary to section 9(1)(k) of the Trade-marks Act. 2. That CACHAREL was at all material times distinctive in Canada of clothing sold by the applicants. 3. That Barmish was not a person entitled to secure registration because of the previous use of the trade mark by the applicant.

Holding: The application to expunge a registration for the trade mark CACHAREL for men’s pants was dismissed.

Reasoning: Connection With Living Individual The relevant date for the purpose of considering sections 9(1)(k) and 12(1)(e) of the Trade-marks Act is the date of adoption [of the trade-mark by Barmish (which is deemed, by section 3 of the Act, to be the date of application for registration)]. On the relevant date, the applicants did not enjoy a substantial reputation in Canada for either Jean Cacharel or the mark CACHAREL to suggest a connection with the individual Jean Cacharel. The evidence does not support a finding that Jean Cacharel was famous in Canada.

Distinctiveness The applicants have not discharged the burden of demonstrating that at the material time (the time the expungement proceeding was commenced, in this case 1983) the trade mark CACHAREL was not distinctive of the wares of the respondent, Barmish. The respondent has used the mark in Canada in association with men’s pants since 1972. The evidence has not shown that the prospect of confusion in respect of the use of the mark CACHAREL on both men’s wear and ladies’ wear by different companies would be significant. In fact no evidence of actual confusion was presented. Adoption with knowledge by Barmish of the use of the mark by the applicants in France does not render the mark non-distinctive or deceptive. There must be knowledge by the Canadian registrant of the foreign mark in Canada, satisfying the court the use by the Canadian registrant would be deceptive.

Non-Entitlement Because of Prior Use This ground of invalidity is based on section 18(1)(c) of the Act, which states that a trade mark is invalid if the applicant for registration was not entitled to secure the registration, subject to section 17. By virtue of sections 16 and 17, an applicant for registration is not a person 55 entitled to secure the registration if there was previous use of the trade mark in Canada by the applicant The applicants in this case faced the added burden of establishing that the respondent adopted the trade mark with knowledge of this prior use of the applicants. Pursuant to section 17(2) of the Act, where the expungement proceedings are commenced more than 5 years after the date of registration, the applicants must establish that when the respondent adopted the trade mark, it was adopted with knowledge of the applicant’s prior use in Canada. Barmish only became aware of the use of the mark by others in Canada after the adoption of the mark. The knowledge before the registration matured is irrelevant as the relevant date for proving knowledge is the date of adoption. It cannot be concluded by objective factors that Barmish must have been aware of the prior use of the mark by others. The evidence does not establish knowledge by Barmish of the use of the mark by the applicants at the material time.

Principle(s): Connection With Living Individual  The applicant will succeed if the evidence reveals that a significant number of people in Canada associate the name Jean Cacharel with a particular living individual.  The relevant date for the purpose of considering sections 9(1)(k) and 12(1)(e) of the Trade-marks Act is the date of adoption of the trade-mark by Barmish (which is deemed, by section 3 of the Act, to be the date of application for registration).  With respect to section 9 of the Act generally, and paragraph (k) in particular, it is not necessary that the plaintiff prove damage. Section 9 provides an absolute prohibition not dependent upon proof of injury or damage.

Distinctiveness  In order to be successful on this ground, the applicant must demonstrate that the trade mark was not distinctive of the respondent’s ware at the time the expungement proceeding was commenced.  With regard to distinctiveness, the crucial factor to consider is the message that the trade mark actually conveys to the public.  Royal Doulton Tableware Ltd. v. Cassidy’s Ltd. articulated the following principle: It is to be noted that a distinctive trademark is one which links, e.g. goods with a vendor so as to distinguish them from the goods of other vendors. It is not distinctive if it simply distinguishes one design of goods from another design of goods even if one had special trade knowledge one might not know that these two kinds of goods are sold respectively by two different vendors.  For the purposes of determining the issue of distinctiveness of the respondent’s Canadian trade mark, reference has to be made to wares that are offered for sale in the Canadian market.  The question of whether a trade mark is distinctive of wares in association with which it is used by its owner is one of fact, and depends upon the circumstances as established by the evidence presented.  The burden of proof of invalidity lies on the party seeking to expunge the registration. 56  The scope of evidence a court may consider in determining distinctiveness is not confined to the actual sale of competing goods or performance of rival services in the market- place, but can include evidence of public reputation of a rival mark.  A registrant’s prior prior knowledge alone of use of a trade mark in a foreign market is insufficient to invalidate a registration. Adoption of a foreign trade mark is permissible unless (1) there has been previous use of the mark in Canada, (2) the trade mark has been deemed to be made known in Canada (under section 5 of the Act), or (3) the mark is not distinctive at the material time.

Institut National des Apellations d’Origine v. Brick Brewing Co., Ltd.

Facts: The applicant applied for the following trade mark for beer: THE COGNAC OF FINE BEER. The words “beer” and “fine” were disclaimed. The grounds of opposition were as follows: 1. Firstly, the opponent alleged that the applicant could not have been satisfied that it was entitled to use its mark in Canada because the term “cognac” in the applicant’s mark contravened the Food and Drugs Act. 2. Secondly, it was also alleged by the opponent that the trade mark was not distinctive; the use and registration of the applicant’s trade mark was calculated to deceive an mislead the public, since Cognac was a geographical indication under French law. 3. Thirdly, it was alleged that that the trade mark was not registrable pursuant to section 9(1)(d) of the Act because it consisted of the word “cognac”, and that word would lead to the belief that the applicant’s wares had been received or were produced or sold with the approval and authority of the Government of France. 4. Fourthly, the opponent argued that the mark was not registrable pursuant to section 10 of the Act as it so nearly resembled as to be likely to be mistaken for the appellation of origin, “cognac”. 5. Fifthly, the opponent alleged that the trade mark was deceptively misdescriptive of the place of origin of the applicant’s wares.

Holding: The application was refused.

Reasoning: First Ground of Opposition It was at least arguable that the applicant’s proposed use of the trade mark would be in contravention of section 5(2) of the Food and Drugs Act. It was incumbent upon the applicant to show there was no such contravention, the applicant failed to so do.

Second Ground of Opposition The opponent’s evidence established that the French Government has designated various geographical indications for French wine. However, given that cognac was a non-distinctive 57 trade term in Canada, and given that most Canadians were unaware of the particular significance of the word “cognac” as designating a brandy produced in a particular region of France, the use of that word in the contect of the applicant’s proposed mark did not render that mark non-distinctive. The second ground of opposition failed.

Third Ground of Opposition The provisions of 9(1) do not afford protection to foreign governments, therefore, the third ground of opposition fails.

Fourth Ground of Opposition With respect to the argument based on section 10 of the Act, the board held that the applicant had not adopted the prohibited mark, as the trade mark THE COGNAC OF FINE BEER did not consist only of the word “cognac”. The applicant’s mark was not likely to mislead.

Fifth Ground of Opposition The evidence did not establish that the average consumer of the applicant’s wares would be aware that cognac was only produced in the Cognac region of France and that it must meet certain production standards. Thus, it is unlikely that the average consumer would react to the trade mark THE COGNAC OF FINE BEER, for beer, as being misdescriptive.

Principle(s): First Ground of Opposition  Opposition based on non-compliance with section 30(i) of the Act have been successful where an opponent has made out a prima facie case that the applicant’s proposed use of its mark was in potential violation of a federal statute.

Second Ground of Opposition  The material time for considering the circumstances respecting the issue of distinctiveness is as of the filing of the opposition.  The onus or legal burden is on the applicant to show that its applied-for trade mark actually distinguishes or is adapted to distinguish its services from those of others throughout Canada.  There is an evidential burden on the opponent to prove its supporting allegations of fact.

Third Ground of Opposition  The material time respecting the opposition based on section 9(1) and 12(1)(e) is the date of the decision.  The onus or legal burden is on the applicant to show its compliance with section 9(1)(d).  There is an evidential burden on the opponent to prove its supporting allegations of fact.  As stated in section 9(1) of the Act, the test to be applied is the following: whether or not the applicant’s mark consists of, or so nearly resembles as to be likely to be mistaken for, the prohibited word or symbol. 58  The provisions of section 9(1)(d) of the Act do not afford protection to foreign governments.

Fourth Ground of Opposition  The opponent contends that the applied-for trade mark is not registrable pursuant to section 12(1)(e) of the Act because it contravenes section 10 of the Act. There are three specific prohibitions in section 10: 1. The first is that no one shall adopt the prohibited mark as a trade mark. 2. The second is that no one is to use a prohibited mark in a way likely to mislead. 3. The third is essentially the same one established for section 9(1). The test to be applied is, therefore, the following: whether or not the applicant’s mark consists of, or so nearly resembles as to be likely to be mistaken for, the prohibited word or symbol.

Fifth Ground of Opposition  The material time for considering the circumstances respecting the issue arising pursuant to section 12(1)(b) of the Act is the date of the decision.  The fifth issue is to be determined from the point of view of an everyday user of the ware.  The trade mark in question must not be carefully analyzed and dissected into its component parts but rather must be considered in its entirety and as a matter of first impression.

D. MISCELLANEOUS NOTES:

 Section 9 of the Act is comprised of automatically prohibited marks (also known as “strong” marks) and of marks that may become prohibited if certain steps are taken (also known as “weak” marks). - Strong Marks ( e.g. ): - 9(1)(a)-(d) - 9(1)(j)-(k) - 9(1)(f)-(h.1) - 9(1)(l)-(o)

- 9(1)(i.2)

- Weak Marks ( e.g. ): - 9(1)(e) - 9(1)(n.1) - 9(1)(i); (i.1); (i.3)

(v) Confusing

A. RELEVANT STATUTORY PROVISION(S):

Interpretation 59 Definitions 2. In this Act,

"Confusing" "Confusing", when applied as an adjective to a trade-mark or trade-name, means a trade-mark or trade-name the use of which would cause confusion in the manner and circumstances described in section 6.

When mark or name confusing 6(1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade- mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.

Idem 6(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.

Idem 6(3) The use of a trade-mark causes confusion with a trade-name if the use of both the trade- mark and trade-name in the same area would be likely to lead to the inference that the wares or services associated with the trade-mark and those associated with the business carried on under the trade-name are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.

Idem 6(4) The use of a trade-name causes confusion with a trade-mark if the use of both the trade- name and trade-mark in the same area would be likely to lead to the inference that the wares or services associated with the business carried on under the trade-name and those associated with the trade-mark are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.

What to be considered 6(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including (a) the inherent distinctiveness of the trade-marks or trade- names and the extent to which they have become known; (b) the length of time the trade-marks or trade-names have been in use; (c) the nature of the wares, services or business; (d) the nature of the trade; and 60 (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

Registerable Trade-Marks When Trade-Mark Registerable 12(1) Subject to section 13, a trade-mark is registerable if it is not (d) confusing with a registered mark

Registration of confusing marks 15(1) Notwithstanding section 12 or 14, confusing trade-marks are registrable if the applicant is the owner of all such trade-marks, which shall be known as associated trade-marks.

Record 15(2) On the registration of any trade-mark associated with any other registered trade-mark, a note of the registration of each trade-mark shall be made on the record of registration of the other trade-mark.

Amendment 15(3) No amendment of the register recording any change in the ownership or in the name or address of the owner of any one of a group of associated trade-marks shall be made unless the Registrar is satisfied that the same change has occurred with respect to all the trade-marks in the group, and corresponding entries are made contemporaneously with respect to all those trade-marks.

Validity and Effect of Registration Effect of registration in relation to previous use, etc. 17(1) No application for registration of a trade-mark that has been advertised in accordance with section 37 shall be refused and no registration of a trade-mark shall be expunged or amended or held invalid on the ground of any previous use or making known of a confusing trade-mark or trade-name by a person other than the applicant for that registration or his predecessor in title, except at the instance of that other person or his successor in title, and the burden lies on that other person or his successor to establish that he had not abandoned the confusing trade-mark or trade-name at the date of advertisement of the applicant's application.

When registration incontestable 17(2) In proceedings commenced after the expiration of five years from the date of registration of a trade-mark or from July 1, 1954, whichever is the later, no registration shall be expunged or amended or held invalid on the ground of the previous use or making known referred to in subsection (1), unless it is established that the person who adopted the registered trade-mark in Canada did so with knowledge of that previous use or making known.

Concurrent use of confusing marks 61 21(1) Where, in any proceedings respecting a registered trade-mark the registration of which is entitled to the protection of subsection 17(2), it is made to appear to the Federal Court that one of the parties to the proceedings, other than the registered owner of the trade- mark, had in good faith used a confusing trade-mark or trade-name in Canada before the date of filing of the application for that registration, and the Court considers that it is not contrary to the public interest that the continued use of the confusing trade-mark or trade- name should be permitted in a defined territorial area concurrently with the use of the registered trade-mark, the Court may, subject to such terms as it deems just, order that the other party may continue to use the confusing trade-mark or trade-name within that area with an adequate specified distinction from the registered trade-mark.

Registration of order 21(2) The rights conferred by an order made under subsection (1) take effect only if, within three months from its date, the other party makes application to the Registrar to enter it on the register in connection with the registration of the registered trade-mark.

Applications for Registration of Trade-Markets Further information in certain cases 32(1) An applicant who claims that his trade-mark is registrable under subsection 12(2) or section 13 shall furnish the Registrar with evidence by way of affidavit or statutory declaration establishing the extent to which and the time during which the trade-mark has been used in Canada and with any other evidence that the Registrar may require in support of the claim.

Registration to be restricted 32(2) The Registrar shall, having regard to the evidence adduced, restrict the registration to the wares or services in association with which the trade-mark is shown to have been so used as to have become distinctive and to the defined territorial area in Canada in which the trade-mark is shown to have become distinctive.

B. RELEVANT SECTIONS FROM VAVER TEXT:

C. Criteria for Registrability 1) Absolute Bars

The following trade-marks are absolutely barred from registration. c) Marks Confusing with a Registered Trade-Mark

 A mark confusing with an existing registered trade-mark is not registerable.  Before the Trade-Marks Office, the applicant carries the burden of showing “no reasonable likelihood” of confusion.

G. Owner’s Rights 62

4) Confusion a) Factors to Consider

A decision on whether or not likely confusion exists requires “all the surrounding circumstances” to be examined, including: (a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known; (b) the length of time the trade-marks or trade-names have been in use; (c) the nature of the wares, services, or business; (d) the nature of the trade; and (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

C. SUMMARY OF CASES:

Wyant & Co. Ltd. v. LaCour (Canada) Inc.

Facts: The applicant applied to register the trade-mark HYCLEAN, based on proposed use in Canada for “janitorial products”. The opponent alleged that the trade-mark was not registerable based on confusion with various HY-registered trade-marks. The opponent also alleged non- entitlement and non-distinctiveness based on its prior use of the registered trade-marks in Canada and on pending applications for various HY trademarks.

Holding: The application was refused

Reasoning: The most pertinent of the opponent’s registered trade-marks was HYCAM. Both trade- marks were inherently distinctive, but the applicant’s mark was not inherently strong in light of the descriptive function of the component “clean”. The evidence did not establish that either trade-mark had become known in Canada. The opponent’s wares were identical to the applicant’s. Presumably the trades of the parties would, or could, overlap. The opponent’s statement of wares was not restrictive to any particular channel of trade, so the board refused to assume that the opponents trade-mark could not cover janitorial products in the absence of any evidence to that effect. The opponent’s statement of wares encompassed all the usual channels of trade for its products. There was a fair degree of resemblance between the marks at issue, as both marks commenced with the prefix “hy” and ended with a one-syllable word beginning with the letter “C”. Given the large number of “hy” prefix marks registered and applied for by the opponent, and in the absence of evidence of similar marks owned by third parties, the board was prepared 63 to infer that this reflected the state of the market-place, and that at least a few of the opponent’s marks were in active use. To the extent that the average consumer would be aware of the opponent’s small family of “hy” prefix marks, it would be more likely to assume that a new “hy” prefix mark is a trade mark of the opponent.

Principle(s):  The onus or legal burden is on the applicant to show no reasonable likelihood of confusion between the marks at issue.  In applying the test for confusion set forth in section 6(2) of the Act, consideration is to be given to all of the surrounding circumstances including those specifically set forth in section 6(5) of the Act.

(C) CONFUSION (TMA ss. 2 and 6)

2. "confusing" when applied as an adjective to a trade-mark or trade-name, means a trade-mark or trade-name the use of which would cause confusion in the manner and circumstances descriibed in section 6;

When mark or name confusing 6. (1) For the purposes of this Act, a trade-mark or trade- name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade- name in the manner and circumstances described in this section. (2-4) ... if the use of both trade-marks in the same area would be likely to lead o the interference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class. What to be considered (5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including (a) the inherent distinctiveness of the trade-marks or trade- names and the extent to which they have become known; (b) the length of time the trade-marks or trade-names have been in use; 64 (c) the nature of the wares, services or business; (d) the nature of the trade; (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

1. Likelihood of confusion – General:

Professional Publishing Associates Ltd. v. Toronto Parent Magazine [1986] F.C. t.d. (c/b II, 34)

Facts: Two magazines, "Today's Parent" (the plaintiff) and "Toronto Parent", are born at roughly the same time (and one can infer that they each knew of the other's exitence). The former registers the mark "TODAY'S PARENT" in March 1985 based on proposed use, and begins promoting itself and looking for advertising. Meanwhile, the name "TORONTO PARENT" is registered under the Ontario Partnerships Registration Act in 1984, and the magazine acquires the mark by assignment in February 1985. "Today's Parent" sues for infringement (s. 20) and "Toronto Parent" makes a counterclaim.

Issues: 1) Is there infringement i.e. is there likelihood of confusion? YES 2) Is the mark TODAY'S PARENT invalid? YES, because it was "clearly descriptive"

Ratio: Strayer J. 1) Infringement: • The issue is not whether there has been actual confusion (althoguh there was substantial evidence of actual confusion brought), but whether there is a likelihood of confusion, as provided by s. 6(2): ... would be likely to lead to the inference that the wares ... associated with such trade marks are manufactured, sold ... by the same person ... Evidence of actual confusion is not conclusive. • "In judging the likelihood of confusion one should look at the get-up and surrounding circumstances. [...] it is necessary to consider the likelihood of confusion by those who see the two publications at different times, who hear of them orally, or who look at them casually in a doctor's office or on a news-stand." • Finds a likelihood of confusion as to the source of the 2 magazines in the Toronto area, where they are both circulate and compete for advertising. ("It is not necessary that the 2 magazines be coterminous as long as there is an area of overlap".) Noted in this regard are: similarity in general appearance (size; "To ... Parent"; etc.) and the "nature of the trade in them" (similar method of distribution; similar price etc.)

2) Validity of "TODAY'S PARENT": 65 • Finds no ambiguity in the words, and therefore that the mark is "clearly descriptive" within the meaning of s. 12(1)(b) (as is "OFF" in connection with insect repellant). Therefore, the original registration was invalid. • (Challenge based on s. 16(3)(c), that the trade-mark had been previously used in Canada, fails because "Toronto Parent" is not entitled to attack the validity as required by s. 17(1).) • It was also claimed that the original registration had become invalid on the basis that it was not distinctive within the meaning of s. 18(1)(b) by reason of the use in Canada of a number of similar trade-marks. The judge explains the provision: "it contemplates the testing of 'distinctiveness' as of the date of commencement of the action of expungement, on the premise that a mark which was not distinctive at registration may have become distinctive in the meantime through the nature of its use by its owner, or conversely that a mark which was distinctive at registration may have lost its distinctiveness because the owner has improperly allowed others to use it or acquiesced in its use by others." It is found that "Today's Parent" did not acquiesce and the use that constitutes infringement can't affect the distinctiveness of a mark. • The counterclaim based on s. 12(1)(d) fails for lack of evidence, although it is noted that the test for confusion in that section is that set out at s. 6(2) & (5).

Groupe Vidéotron Ltée v. Vidatron Group Inc. [1994] F.C. t.d. (c/b II, 39)

Facts: The plaintiff has a registered trade-mark "VIDEOTRON" of 30 years' standing in connection with its Canada-wide business of cable broadcasting, telecommunications and multi media, and has recently entered the Information Superhighway. It has spent $42 million in promoting its name in the last 3 years. The defendant has been using the trade-mamrk "VIDATRON" in Vancouver since 1989 in the field of video production and plans to launch a new multi media service in Montreal, i.e. to enter a field occupied by the plaintiff.

Ratio: Dubé J. An interim injunction is granted preventing the launch on the grounds that irreperable damage would be suffered by Videotron "if Vidatron were allowed to sow confusion in the minds of consumers, especially in Montreal where Videotron is well-known as the result of heavy advertising."

2. Inherent distinctiveness & the extent to which the trade-mark is known s. 6(5)(a)-(b)

Yoplait S.A. v. Marigold Foods, Inc. [1997] Trade Marks Opposition Board (c/b II, 41)

Facts: MF applied to register the trade mark YO-J based on use and registration in the United States and based on proposed use in Canada, in association with the wares "yogurt drink with 66 fruit juice added". The opponent alleged that the mark was not distinctive and not registrable on the basis of confusion with its registered mrak YOP, previously used iin association with milk and yogurt products.

Ratio: • The burden of proof is on the aplicant to demonstrate that there would be no reasonable likelihood of confusion within the meaning of s. 6(2). • The test for confusion is one of first impression and imperfect recollection. The factors set out at s. 6(5) in this regard are not exhaustive. • Finds that YOP is a strong mark (based on the $6 million in sales, $2 million expended on advertising, the products are sold throughout Canada and the mark is featured prominently on the labels). Considering this, and that there is a fair resemblance between the two marks, that they are equally distinctive, and that they travel through the same channels of trade, finds that the applicant has not discharged his burden.

3. Nature of the wares, services or business

Miss Universe Inc. v. Dale Bohna [1995] F.C.A. (c/b II, 44)

Facts: application for registration of "MISS NUDE UNIVERSE" in association both with "specific wares" and "specific services"; opposition by "MISS UNIVERSE", who markets similar wares & services; re. wares, opposition board agrees that confusion; appeal re. services

Issues: Is the mark confusing with a registered trade-mark (s. 12(1)(d))? YES

Ratio: Décary J.A. • notes that CONFUSION with a registered TM (12(1)(d)) & LACK of DISTINCTIVENESS (38(2)(b) & 38(2)(d)) are SEPARATE GROUNDS Comment: However, according to s. 6(5)(a), distinctiveness is relevant to a finding of confusion. re. allegation that it would be CONFUSING: s. 12(1)(d) PRINCIPLES • "... the Court must ask itself whether ~ as a matter of FIRST IMPRESSION ~ on the minds of the ORDINARY PERSON ~ having a VAGUE RECOLLECTION of that other mark or name (Coca-Cola), the use of both marks or names in the same area in the same manner is likely to lead to the inference that the services associated with those marks or names are performed by the same person, whether or not the services are of the same general class (ss. 6(2), (3) & (4))." i.e. emphasis in analysis on SIMILARITIES & not differences & must consider marks AS A WHOLE 67 • "In determining whether there is a likelihood of confusion, the Court shall have regard to ALL the surrounding circumstances, including those described in ss. 6(5)" i.e. s. 6(5) NOT EXHAUSTIVE • ONUS always on the applicant to prove on the balance of probabilities that there is no likelihood of confusion • the STRONGER the mark is, the greater the ambit of protection it should be accorded and the more difficult it will be for the applicant to discharge the onus • factors enunciated in 6(5)(a) to (e) need not be interpreted as having equal weight (Polysar) i.e. where a STRONG t.m. (i.e. one which is distinctive, "a combination of vowels, syllables and soung which has an inherent quality that conjures a direct association not only with the specific wares which might otherwise be listed in the mark's registration, but with the proprietary image of all the several or multifarious operations of its owner") is measured against a proposed mark, criteria (c) and (d) (nature of wares etc. & nature of trade) are not particularly determinative (Polysar) & must show that his t.m. is not calculated to deceive (Polysar) ON FACTS: t.j. erred in 3 respects • not enough weight given to fact that t.m. found to have "considerable distinctiveness", which has the following consequences: ~ should be accorded particularly wide scope of protection ~ higher burden imposed on applicant ~ extensive discussion of whether applicant "intended to jump on the bandwagon of an already famous mark" ~ factors 6(5)(c) & (d) not determinative • too much emphasis on differences in nature of services & trade (factors 6(5)(c) & (d)) instead of considering their similarities i.e. the likelihood of confusion if the two businesses were carried on in the same area in the same manner (s. 6(2)) & finds that the services provided are similar & t.m.s to be used in same industry or business; alleged differences re. location of pageants & qualifications for participants inconclusive in view of similarities & may change • re. s. 6(5)(e): "degree of resemblance" ~ mistakenly considered the word "nude" in isolation (which lead him to find that it was of "arresting significance which would convey to all but the most indifferent reader a profound difference")

Comment: The judgement seems to miss the point that "Miss Nude Universe" is not trying to create confusion as to source, but rather to mock the caché of Miss Universe i.e. the case may be similar to the "JOHNY" case. In this respect, the situation may be more appropriately dealt with through the legal vehicle of discrimination or misappropriation of personality.

Polysar Ltd. v. Gesco Distributing Ltd. [1985] F.C. t.d. (c/b II, 54)

Facts: GD (the applicant / respondent) applied to register the mark POLYSTAR for carpet cushioning. The opponent (appellant) relied upon its prior use of and registration of the mark 68 POLYSAR for resins used in the manufacture of carpet cushioning and upon the prior use of its trade name. The opposition was originally rejected.

Ratio: Joyal J. • The point in TIME at which the criteria in s. 6(5) are to be assessed is the date of application (see s. 3 & s. 13(1)). • Each element of s. 6(5) need not be interpreted as having equal weight. • On the "first impression" test, the marks are graphically and phonetically similar (it is the first syllable of a word which is the most important) (s. 6(5)(e)). This is the principal consideration, and each criteria need not be interpreted as having equal weight, although each is relevant here. • POLYSAR is a strong mark: ~ it is inherently distinctive (analogy to "VOGUE" and "KODAK") (s. 6(5)(a)) ~ it is the coporate name of its owner, has been used in Canada & many foreign countries since 1947 (s. 6(5)(b)), and suplies 70% of the latex requirements of Canadian industry -- and it is universally known and the purpose of the Act (as well as the passing-off remedy) is to protect such "acquired rights". Therefore, the relationship between the marks as regards the nature of the wares and the channels of trade (s. 6(5)(c) & (d)) must bear a more stringent test. Similarity in both these respects is found.

4. The Degree of Resemblance in Appearance, Sound or Idea Suggested

Legend!: mk = Mark (unregistered) tmk = Trademark TMA = Trademark Act CRA = Copyright Act RL = Relevant Legislation LAM = Lametti's comments

Class Notes:

 No one clear/coherent hierarchy among criteria listed at s.6(5) for assessing confusion.  Considerations vary on case to case basis - no real coherence in caselaw.  Use tests and intuition. Focus on similarities not differences.  BoPs will vary with strength of mark, timing, & circumstances/territory in play. Operate to privilege existing mks (rationale of privileging originality) - nb. strong tmks are also afforded greater respect in jurisprudence. Initial/prima facieburden on opposing party. Once met, BoP shifts to applicant. 69  Evidence of confusion not necessarily required only likelihood of confusion. Survey and Expert opinion evidence (provided methodologically sound) may be helpful.

Relevant Test: 1st impression of avg consumer(in a hurry) with reasonable comprehension and imperfect memory

Relevant Time: ( for Confusion) - Adoption of tmk - Is it confusing when 2nd tmk comes into existence?

Relevant Legislation: s.12(1d) A tmk is registerable if it is not (d) confusing with a registered tmk s.6 (5) When mk or name confusing - In determining whether tmks or trade names are confusing, the court or registrar, as the case may be, shall have regard to all the surrounding circumstances including:

(a) inherent distinctiveness/extent known (b) length of time in use (c) nature of wares, services, business (d) nature of trade (e) resemblance in appearance or sound or idea suggested

Caselaw:

Choice Hotels International v. Hotels Confortel Inc - 1996 - F.C. (Tdiv) - (II-58)

F: Appellant owner of t/mk COMFORT INN, registered for hotel services, contests application to register tmk CONFORTEL for hotel & other services. Used and registered his tmk 1st and alleges likelihood of confusion w/ the respondent's mk. Registrar rejects challenge on grounds mks more dissimilar than similar. Appellant appeals via (s.56 of TMA) w/ additional survey evidence of English-speaking market in tow that shows the majority of consumers w/ a vague recollection of the COMFORT INN tmk might be inclined to confuse the two.

H: Appeal Allowed (challenge successful)

RL: s.12 (1d) TMA, s. 6(5e) TMA, s.56 TMA

R: FC will usually only intervene if Registrar errs in law or 'mis-assesses' facts. When new evidence is led, however, it offers court latitude to reconsider registrar's decision. Onus on respondent to demonstrate no reasonable possibility of confusion between the mks. Relevant criterion/measure: 1st impression of avg consumer w/ imperfect recollection. Burden not discharged: use of common words/lack of intrinsic originality in COMFORT 70 INN tmk notwithstanding, similarity in sound (emphasis on importance of 1st word) and suggestion (both evoke feelings of comfort/ease) of 2 mks substantial. Survey evidence buttresses finding of reasonable possibility of confusion.

LAM: Quaere whether FTC imposing heavier burden than legislation: no "reasonable possibility" of confusion a higher standard than no "likelihood" of confusion? Lametti thinks so.

G.H. Mumm & Cie v. Cooperative Federee de Quebec - Tmk Opp Bd. - 1996 (II-62)

F: Applicant trying to register RED RIBBON as tmk for poultry products. Challenged by Mumm & Cie on grounds of confusion [12(1d) TMA] with its foreign tmks of CORDON ROUGE for champagne/wines. Mumm & Cie point to non-distinctiveness of RED RIBBON and also allege non-entitlement of applicant mk b/c of CFQ's prior use of its tmks in Canada.

H: Opposition rejected (Tmk registered)

RL: s. 6(5) TMA, s. 12 (1d) TMA, s.30 TMA

R: Non-entitlement argument under s.30 TMA rejected out of hand b/c Mumm & Cie don't lead any evidence/fail to satisfy initial BoP (nb. Unimportant-technical). In assessing issue of confusion, Board must heed all surrounding circumstances incl. those expressly set out in 6(5) TMA. Burden on applicant to show no reasonable possibility of confusion. Test of avg consumer w/ imperfect memory employed. Both mks inherently distinctive. CORDON ROUGE known to most champagne lovers, and entitled to some protection in that area, but NOT coordinate w/ protection granted "famous" tmk. Tmks dissimilar in appearance, sound, products (wares) & channels/nature of trade - only idea suggested similar.

Robert Bosch GmbH v. Grupo Bler de Mexico SA de CV - 1997 - (II-66)

F: Applicant files to register BLUE POINT mk for use re variety of electronic devices. Challenged as confusing w/ BLAUPUNKT tmk for similar wares (automotive audio) and as lacking distinctiveness required under s.2 TMA (ie. Alleged mk couldn't distinguish applicant's wares from the opponent's)

H: Opposition rejected (Tmk granted)

RL: s 12 (1d) TMA, s.30 (i) TMA, s.2 TMA 71 R: Burden on applicant to show no reasonable possibility of confusion. Avg consumer w/ imperfect memory test employed. All surrounding circumstances relevant incl. criteria at s.6(5) TMA. BLAUPUNKT older/better known of two b/c BLUEPOINT mk for proposed use. Both mks inherently distinctive. Disimilar in sound & appearance - Opponent fails to show BLAUPUNKT would be understood by avg consumer w/ avg intelligence/imperfect memory to mean Bluepoint in German. Reference to KOLA LOKA decision which did not find spanish translation of "Krazy Glue" confusing). Insufficient evidence of notoriety of BLAUPUNKT mark in Canada - unable to support claim re distinctiveness of wares. Even had it acquired such notoriety, the fact the applicant's mk wasn't found confusingly similar meant that it was capable of becoming distinctive.

U.F.O. Contemporary Inc. v. Sears Canada Inc. - Tmk Opp. Bd. - 1997 (II-71)

F: Applicant files to register UFC…FOREVER for proposed use re clothing. Opponent (UFO) challenges on basis of confusion. Both known to some extent but opponent's better known.

H: Application refused

RL: s.12(1d) TMA, s.6(5) TMA

R: Legal burden on applicant to show no reasonable likelihood of confusion. Regard to all surrounding circumstances incl s.6(5) criteria. Matter of first impression and recollection. Applicant's mk inherently distinctive but "weak" mk b/c of use of initials & "forever". Opponent's tmk inherently distinctive & in use longer. Similar appearance and sound (b/c acronym = dominant part) - disimilar idea suggested. Wares similar. Overlap in channels of trade.

(D) DISTINCTIVENESS

Trade Marks Act

s.2 Definitions “distinctive” Distinctive in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them.

s.6 When mark or name confusing (5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including: 72 a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known; b) the length of time the trade-marks or trade-names have been in use; c) the nature of the wares, services or business; d) the nature of the trade; and e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

s.18: When registration invalid (1) The registration of a trade-mark is invalid if: a) the trade-mark was not registrable at the date of registration; b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced; or c) the trade-mark has been abandoned, and subject to section 17, it is invalid if the applicant for registration was not the person entitled to secure the registration. (2) No registration of a trade-mark that had been so used in canada by the registrant or his predecessor in title as to have become distinctive at the date of registration shall be held invalid merely on the ground that evidence of the distinctiveness was not submitted to the competent authority or tribunal before the grant of the registration.

s.38(2)(d) Statement of opposition (2) A statement of opposition may be based on any of the following grounds: (d) that the trade-mark is not distinctive.

Class Notes

Distinctiveness is the very essence of a TM, whether at common law or in the Act. It allows for an easy identification of the product by the consumers and by the manufacturers as well. A TM must either “actually” distinguish firm A’s products or services from firm B’s or be “adapted so to distinguish” them (s.2 TM Act “distinctive”).1 Some marks are born distinctive. They are “adapted to distinguish” because they have the capacity without use to be accepted as TM. Invented words like KODAK, fancy designs, or arbitrary words like ELEPHANT for soap are examples. These marks are ideal candidates for applications based on proposed use.

Other marks are not so adapted to distinguish firm A’s products or services from firm 2’s. They must work hard to become distinctive in fact. Thus, PERFECT or CANADIAN, being descriptive, is not initially “adapted” to distinguish between producers. Yet, by extended use and advertising over time, such marks can acquire distinctiveness – a secondary meaning “actually”

1 It is interesting to note that distinctiveness is mentioned only as a ground of opposition or invalidation (s.38(2)(d) and s. 18(1)(b) TM Act). Inferentially, the Canadian TM Office cannot reject a mark for non-distinctiveness before advertisement. But this is partly true: some elements of distinctiveness are examined because, without them, a TM cannot exist. For example, TM Office can register only TM, and a TM must be adapted to distinguish or must actually distinguish. Moreover, descriptive, misdescriptive, and nominal marks are not registrable without proof of distinctiveness (s.2 “trade-mark” par. (a), ss. 12(1)(a)-(b) and 12(2) TM Act). 73 distinguishing a single producer from others. They can then be registered. A mark distinctive only in Montreal can be registered for the whole of Canada; its owner can block later marks that have acquired their own local distinctiveness, for the latter cannot now be distinctive in a part of Canada.

Distinctiveness can come and go, but to stay alive a TM must be distinctive whenever it is challenged. This may happen if it is opposed before registration or if, after registration, legal proceedings raising non-distinctiveness are started. A non-distinctive TM is a contradiction in terms. How non-distinctiveness comes about is irrelevant to the question of the mark’s validity. What matters is the result, the mark’s impact on the public. a) Genericism

A TM that becomes a product description falls into the language. It is no longer distinctive, hence it is no longer a TM. Examples of this: “nylon”, “gramophone” and “yo-yo”. Inadequate policing by their owners put them into the public domain. The mark “thermos” was however saved since a minority of consumers was held to be enough to save off expungement. b) Multiple Use

A mark is not distinctive if it is used simultaneously in Canada by two firms. To customers of firm A, the mark means firm A’s goods; to customers of firm B, it means firm B’s. Since it distinguishes two firms’ goods, it distinguishes neither from the other. Nobody can register in such a situation. This may occur with marks that cause confusion, not just identical marks. It may also occur where firms are under common control, although a mark used by a licensee is now considered to be used by (and so distinctive of) the mark owner if the latter directly or indirectly controls the character or quality of the marked products (s.50(1) TM Act). In Unitel Communications Inc., Bell’s registration of 800 SERVICE for telephone services were expunged, inter alia, because it had not exercised control over the way regional telephone companies used the mark Bell had licensed to them. c) Unadvertised Change of Product Origin

TM law usually cares little about changes in product or service quality: the mark owner’s self- interest is supposed to care of that. Buyers will eventually shy away from a brand whose quality is thought to have deteriorated. The public function of the mark as an attractor or repeller of custom is then fully vindicated. But some changes may make a TM non-distinctive. As soon as the consumers could potentially be confused by the change in quality, then the mark could be expunged as non-distinctive. d) Functional and Ornamental Features 74

Since TM are not substitutes for patents, the holder of a patent is not encouraged to bolster this monopoly through a TM on the same feature. So functional and ornamental features (elements that are integral to a product or that make it attractive) are not usually TM. The main issue is whether the feature is “solely, primarily or essentially” ornamental or functional. If so, it is unregistrable. Such features have included things like a triple-head design for the blades of an electric shaver (Remington Rand) and a stripe encircling a grain storage bin. In these cases, the market relied on TM found elsewhere on the product to distinguish trade source.

At bottom, only features that “unreasonably limit the development” of other trades should be denied protection. This is true of distinguishing guises recognized by the TM Act. The same principle may apply by analogy to other TM too. If other traders can compete effectively using different designs, the mark should be upheld. e) Colour

Colour can be, or be part of, a protectable TM. The blue, white, and gold oblong Visa TM for credit cards or the pink of Owens-Corning’s insulation are well-known examples. Combination of colour usually work better than a single colour because buyers may more readily recognize them as TM and allow them to become distinctive. Prototypical colours of pills (white, yellow, green) while technically registrable, may be just too common to distinguish one owner’s pills from another’s in fact (Smith Kline).

For example, pharmaceutical drug companies have sometimes persuaded courts that a patient who demands “the same again” means to receive not just a drug with the same active ingredients but the very same drug as before made by the same manufacturer. This reductionist view of patient psychology suggests that good health policy and IP law do not necessarily coincide.

Inherently distinctive vs inherently non-distinctive:

1. Inherently distinctive words and symbols are usually arbitrary and fanciful in relation to the business/wares/services with which they are used: strong trade-marks = greater ambit of protection.

 To prove distinctiveness, must show extensive use and the existence of a reputation in the mark.

2. Inherently non-distinctive marks are typically descriptive of the business or the quality or the nature of its wares/services or their basis of origin: descriptive, 75 functional in nature, inseparable from the nature/character of the business; weak trade marks = lesser ambit of protection

 Without proof of a long and extensive use leading up to the development of a secondary meaning (source indicator as opposed to merely descriptive), they may not be registrable.

Lametti speaking about Eli Lilly:

Eli Lilly licensers can give the right to use the products. The very fact that Eli Lilly licensed to someone else the right to use the same product took away the distinctiveness of the product. Lametti further noted that distinctiveness and confusion are the flip side of one another.

Case Law

Bousquet v. Barmish Inc. [1991] (F.C.T.D.) (p.23 vol. II)

Facts : The applicant Jean Bousquet (Jean Cacharel) designs clthing for men, women and children sold around the world under the TM CACHAREL. The applicant sold in Canada women’s clothing (since 1967) and children clothing (since 1970). It did not sell men’s clothing in Canada.

Barmish, the respondent, commenced the use of the mark CACHAREL in 1974 and applied for registrations of it in that year. Registration was effected for men’s pants in 1975. It became aware of the use of the applicant in association with ladies’ wear before the registration matured.

Issues :

The applicant applied in 1983 to expunge the registration of Marmish alleging : i) that the adoption of the mark CACHAREL by Barmish was prohibited because it may falsely suggest a connection with a living individual, contrary to s.9(1)(k) of the TM Act. ii) that CACHAREL was at all material times distinctive in Canada of clothing sold by the applicants, and iii) that Barmish was not a person entitled to secure registration because of the previous use of the TM by the applicant.

Holding : (only the issue of distinctiveness was considered in this summary) 76 The application to expunge the registration for the mark CACHAREL is dismissed.

The question of whether a TM is distinctive of wares in association with which it is used by its owner is one of fact, and depends upon the circumstances as established by the evidence presented. The applicant must demonstrate that the TM was not distinctive of the respondent’s wares at the time the expungement proceeding was commenced (Andres Wines Ltd. v. E. & J. Gallo Winery [1976] (CA)).

Wrt distinctiveness, the crucial factor to consider is the message that the TM actually conveys to the public (Royal Doulton Tableware Ltd. v. Cassidy’s Ltd. [1984] (F.C.T.D.)). Distinctiveness of a TM is related to source, among other things. In Royal Doulton : « It is to be noted that a distinctive trade mark is one which links, e.g., goods with a vendor so as to distinguish them from the goods of other vendors. It is not distinctive if it simply distinguishes one design of goods from another design of goods even if one had special knwoledge one might know that these two kinds of goods are sold respectively by two different vendors. Such a concept of distinctiveness would run counter to a basic purpose of the TM which is to assure the purchaser that the goods have come from a particular source in which he has confidence. »

The applicant must therefore prove that there was not a message to the public that the wares with which the TM was associated were the respondent’s. For the purposes of determining the issue of the distinctiveness of the respondent’s Canadian TM, reference has to be made to wares that are offered for sale in the Canadian market.

However, it is important to note that the attack based on non-distinctiveness is not restricted to actual performance of services in Canada. It also may be founded on evidence of knowledge or reputation of the opposing mark spread by means of word of mouth and evidence of reputation and public acclaim and knowledge by means of newspaper or magazine articles as opposed to advertising. All evidence may be considered which tends to establish non-distinctiveness.

The applicant has not discharge the burden of demonstrating that at the material time (1983) the TM CACHAREL was not distinctive of the wares of the respondent, Barmish. The respondent has used the mark in Canada in association with men’s pants since 1972. The evidence has not shown that the prospect of confusion in respect of the use of the mark CACHAREL on both men’s wear and ladies’ wear by different companies would be significant. In fact, no evidence of actual confusion was presented.

The main thrust of the applicant’s submission on distinctiveness was directed towards the motives of the respondent in applying to register the CACHAREL TM in Canada when they knew of its use in France. As indicated in Andres Wines v. E. & J. Gallo Winery, 77 one may safely say that our TM Act was not enacted to encourage in Canada the adoption of foreign registered marks, even if there were no user by the foreign registrant here. That would cause confusion and deception, just the thing that TM were supposed to avoid, and it would be a fetter upon trade, another thing quite foreign to the purposes of TM. TM legislation was designed as much for the benefit of the public, as for the users of TM.

Adoption with knowledge by Barmish of the use of the mark by the applicant in France does not render the mark non-distinctive or deceptive. A registrant’s prior knowledge alone of use of a trade mark in a foreign market is insufficient to invalidate a registration. There must be knowledge by the Canadian registrant of the foreign mark, combined with evidence of substantial reputation in relation to the mark in Canada, satisfying the court that use by the Canadian registrant would be deceptive. In other words, if the applicant could demonstrate that a substantial segment of Canadian market associated the TM with the foreign owner of the mark rather than the Canadian respondent at the material time, the mark would not be distinctive of the respondent and therefore invalid (this is called the source approach which was first applied in Royal Doulton).

Thus, the adoption of a foreign TM is permissible unless there has been previous use of the mark in Canada (previous “making known” of a TM within the meaning of s.5 TM Act) or the mark is not distinctive at the material time.

The Court was invited by the applicant to draw an inference that public reputation for Cacharel must have existed in Canada, in that the respondent would have had no other reason to adopt the mark. Combined with more evidence, the Court would have been prepared to find this argument compelling.

Unitel Communications Inc. v. Bell Canada [1995] (TM Opposition Board) (p.74 vol.II)

Facts: Bell filed an application to register 800 SERVICE based on use in association with “long distance telephone services”. The word “service” was disclaimed. The opponent alleged that 800 SERVICE was not distinctive in that it had been previously used and made known by others to describe specific long-distance telephone services.

The opponent alleged, among other things, that the applicant’s TM is not distinctive in that it does not actually distinguish the applicant’s services nor is it adapted to distinguish those services from the services of others. The alleged TM 800 SERVICE has been previously used and made known in Canada by others to describe specific long distance telephone services.

Holding: 78 While the legal burden is upon the applicant to show that its TM is distinctive, there is an initial evidential burden upon the opponent to establish the facts relied upon by it in support of this ground.

According to expert affiants, the term “800 service” was commonly used to describe a specific type of long distance service and not as a TM. Furthermore, 800 numbers were available from any telephone company in Canada and from long-distance resellers in competition with Bell.

Evidence from high-volume long-distance telephone users was also considered. Each indicated they used the term “800 service” to describe a type of service and not to identify or refer to a specific company. Survey evidence was also introduced by the opponent but, due to minor deficiencies in the survey evidence, it was accorded somewhat diminished weight. In the survey, more than 75% of the respondents considered “800 service” as a general term as opposed to a brand name. The admissibility of survey evidence and its probative value are dependant upon the relevance of the survey to the issues before the court and the manner in which the poll was conducted.

Based on its expert and survey evidence, as well as the affidavits of telecommunications managers, the Court concluded that the opponent has clearly met its initial evidential burden in respect of non-distinctiveness. Thus, the applicant (Bell) must show that it has discharged the legal burden upon it in respect of the non-distinctiveness ground of opposition.

The opponent also adduced some evidence of use of the mark 800 SERVICE by various other companies and by government organizations and regulatory authorities in Canada.

Use of the mark 800 SERVICE by companies (licensed telephone companies) other than the applicant was not deemed to have been use of the TM by the applicant (pursuant to the control of character or quality test contained in s. 50 TM Act).

The “TM” designation was used by the applicant in association with the mark 800SERVICE, however, only one such instance was dated prior to the date of the opposition and that was on an item which was only distributed internally to the applicant’s sales staff. Therefore, the applicant (Bell) failed to meet its legal burden in respect of the non-distinctiveness ground of opposition.

Bridgestone/Firestone Inc. v. Automobile Club de l’Ouest de la France [1995] (F.C.T.D.) (p.81 vol.II)

Facts: 79 The appellant applied to register the TM LEMANS in association with automobile tires. The respondent opposed the application alleging lack of distinctiveness arising from the resemblance to the mark LE MANS and LES HEURES DU MANS used to designate an automobile race held every year in Le Mans, France. The Registrar refused to register the mark. In reaching his conclusion, he accepted the argument of the opponent based on the fact that the appellant’s mark LEMANS was not distinctive at the time the statement of opposition was filed.

Holding: The relevant date in determining whether a mark is distinctive is the date when the Registrar makes his decision.

The court held that when an appeal from the Registrar’s decision essentially turns on a question of fact, the court must hesitate to reverse a decision of the Registrar, a qualified person, unless it is satisfied that his decision contains an error or that additional evidence might lead to a contrary decision.

The party who is seeking to register a TM has the onus of proving that it is distinctive, while the party who opposes registration must first prove the facts on which the opposition is based.

The court quote with approbation the following extract from the decision in Motel 6, Inc. v. No. 6 Motel Ltd. [1982] (F.C.T.D.): “A TM can neither distinguish nor be adapted to distinguish the services of a person if another person has used the mark in a foreign country and it has become known in Canada as the latter’s mark in respect of similar services. On the issue of lack of distinctiveness of a mark, although it must be shown that the rival or opposing mark must be known to some extent at least, it is not necessary to show that it is well-known or that it has been made known solely by the restricted means provided for in s.5 [TM Act]. It is sufficient to establish that the other mark has become known sufficiently to negate the distinctiveness of the mark under attack.”

Thus, the distinctiveness of a mark which is challenged by an opponent could be negated of the opponent succeeded in proving that its mark was sufficiently known. As a result, the court rejected the argument of the appellant to the effect that the concepts of distinctiveness and confusion always go together, even in the case of a statement of opposition under s.38(2)(d) TM Act. On this point, the appellant’s argument was that while it is sufficient that the opponent’s mark be known in Canada, as this court held in Motel 6, Inc., that rule does not settle the entire matter, and that mark must be known to the point that the mark becomes non-distinctive; to do this; it claimed, all the circumstances must be assessed, including those set out in s.6(5). In dealing with this argument, the court indicated that it has to be rejected since it has the effect of increasing the burden of proof on the opponent.

Even if selling tires was not, prima facie, directly associated with automobile race, it was likely that the consumer might think that the organization of that race had approved, 80 licensed or sponsored the use of the TM by a manufacturer or that, at the very least, there was a business relationship between them.

The appellant having failed in its duty to prove the distinctiveness of the mark LEMANS, its appeal ought to be dismissed.

Danjaq, SA. v. Zervias (Trading as 007) [1996] (TM Opposition Board) (p.85 vol.II)

Facts: The applicant applied for the TM 007 for restaurant services and various food wares. The opponent alleged non-entitlement, based on confusion with the TM 007, JAMES BOND 007, BOND 007 and JAMES BOND, previously used and made known in Canada by the opponent in association with: motion picture films, video cassettes and entertainment services. The opponent also alleged non-distinctiveness.

Holding: The opponent failed to evidence use or making known of any of its marks by itself in Canada for the claimed wares and services prior to the applicant’s filing date and claimed date of first use. It was apparent that the various James Bond movies were exhibited in Canada, and the videotapes of the movies were available for rental in Canada as well. The fact that James Bond films were available for rental would not establish use of any marks appearing on the video cassettes prior to the applicant’s filing date and claimed date of use. Even if the evidence has shown the availability of those films for rental prior to the material times, it would appear that any rental services performed would have been by the video rental stores and not by the opponent. On that point, and in considering the presence of TM on the jackets of video cassettes, the court held that it would be difficult to determine who the average consumer would view as being the user of the trade marks if he, in fact, would perceive them being used as trade marks at all.

Even if the opponent’s evidence could somehow be characterized as satisfying the opponent’s evidential burden, the ground of non-entitlement would still have been unsuccessful, since the marks at issue were not confusing with the opponent’s marks. Although the most relevant of the opponent’s marks (007) is identical to the applicant’s mark, the applicant’s wares, service and trades were completely different from those of the opponent. No evidence was submitted to support the opponent’s claim that it was common in the movie industry to license movie-related TM in characters for a wide variety of wares and services.

As noted by the court, even if the opponent’s second ground had been pleaded in broader terms to also include reliance on any acquired reputation for the terms “James Bond”, “Bond 007”, “007”, etc. whether used as TM or not, it would still have been unsuccessful due to the differences in the wares, services and trades of the parties. 81

(E) USE

1. In General  The relevant provisions of the Trademarks Act are ss. 2, 4, 19, 20, 22 and 49.

Definitions 2 In this Act, « use », in relation to a trade-mark, means any use that by section 4 is deemed to be a use in association with wares or services;

When deemed to be used 4 (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.

Idem (2) 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.

Use by export (3) A trade-mark that is marked in Canada on wares or on the packages in which they are contained is, when the wares are exported from Canada, deemed to be used in Canada in association with those wares.

Rights conferred by registration 19 Subject to sections 21, 32 and 67, the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services.

Infringement 20 (1) The right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name, but no registration of a trade-mark prevents a person from making (a) any bona fide use of his personal name as a trade-name, or (b) any bona fide use, other than as a trade-mark, (i) of the geographical name of his place of business, or (ii) of any accurate description of the character or quality of his wares or services, in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade-mark. 82 Exception (2) No registration of a trade-mark prevents a person from making any use of any of the indications mentioned in subsection 11.18(3) in association with a wine or any of the indications mentioned in subsection 11.18(4) in association with a spirit.

Depreciation of goodwill 22 (1) No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto.

Action in respect thereof (2) In any action in respect of a use of a trade-mark contrary to subsection (1), the court may decline to order the recovery of damages or profits and may permit the defendant to continue to sell wares marked with the trade-mark that were in his possession or under his control at the time notice was given to him that the owner of the registered trade-mark complained of the use of the trade-mark.

Change of purpose 49 If a mark is used by a person as a trade-mark for any of the purposes or in any of the manners mentioned in the definition « certification mark » or « trade-mark » in section 2, it shall not be held invalid merely on the ground that the person or a predecessor in title uses it or has used it for any other of those purposes or in any other of those manners. ______

Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd (1968) 55 C.P.R. 176 (Ex. Ct.)

Facts:

 The Clairol companies (U.S. and Canada) are the owners of MISS CLAIROL and HAIR COLOR BATH which is registered for use in association with hair tinting and coloring preparations. MISS CLAIROL has been advertised extensively and is a well-known trademark throughout Canada. Clairol had 50% market share in the beauty salon trade and 70% share in the drug, department and retail stores.  Thomas Supply is owned by Revlon and is owner of the trademark REVLON and COLORSILK for use in association with hair color preparations. REVLON is a well-known trademark throughout Canada for comestic products but there is no evidence that it is well-known for hair coloring products.  Thomas Supply’s advertising brochures and packages bore the trademarks REVLON and COLORSILK but also included color comparison charts in which both MISS CLAIROL and HAIR COLOR BATH appeared.  Clairol seeks an injunction, damages and other relief against Thomas Supply’s use of the color comparison charts incorporating Clairol’s trademarks. Clairol’s arguments are as follows:

1. that the wording of the charts and packages constituted a description that was false and likely to mislead the public as to the character, quality, geographical origin and mode of performance of the wares and constituted unfair competition within the meaning of s. 7(d) TMA (as it then read). As well, that the publication of the charts in the brochures and the 83 use of them on the packages constituted an act or practice that was unfair competition contrary to s. 7(e) TMA (as it then read); 2. that the use of the trademarks in the brochures and packages constituted infringement of the exclusive right to use throughout Canada in accordance with s. 19 TMA; 3. that the publication of the brochures and the use of the packages containing the comparative color charts in which Clairol’s trademarks appeared constituted « use » of Clairol’s trademark as to the depreciate the value of the goodwill attaching thereto in accordance with s. 22(1) TMA (as it then read).

Issue(s):

 Is this a situation of unfair competition as per s. 7(d) & (e) TMA (as it then read)?  Is the appearance of MISS CLAIROL and HAIR COLOR BATH in Thomas Supply’s brochures and packages a « use » infringing Clairol’s « exclusive right to use » as per s. 19 TMA (as it then read)?  Is the appearance of MISS CLAIROL and HAIR COLOR BATH in Thomas Supply’s brochures and packages a « use » which would depreciate the value of the goodwill in those trademarks as per s. 22(1) TMA (as it then read)?

Held:

 There is no unfair competition and s. 7(d) & (e) TMA has no application.  The presence of Clairol’s marks on the brochures do not fall within the ambit of « use ». With respect to the packages, the presence of Clairol’s marks does fall within the definition of « use » but does not fall within the ambit of « exclusive right to use ». So, s. 19 TMA has no application.  The definition of the word « use » as applied in s. 22(1) TMA does include the presence of Clairol’s marks on the packages but not the brochures. There has been a use on the packages which is likely to depreciate the value of the goodwill as per s. 22(1) TMA. So, Clairol succeeds on this last point only.

Ratio (Thurlow J.):

S. 7(d) & (e) TMA issue:

 This is a minor issue and the judge dismisses it quite quickly. He finds no evidence that the use made of MISS CLAIROL and HAIR COLOR BATH misled the public as per s. 7(d) TMA. On the issue of s. 7(e) TMA, Thurlow J. finds that there was nothing on the packages or brochures which was calculated to deceive a purchaser and as a result, there was no unfair competition here.

S. 19 TMA issue:

 The first step in the analyis is to determine whether the presence of Clairol’s marks constituted a « use » as per ss. 2 & 4 TMA. With respect to the packages, Thurlow J. states as follows: « ...[I]t is...apparent that the presence of the plaintiffs’ marks on the defendants’ packages is a use of those marks « in association with » the wares in the defendants’ packages within the meaning of s. 4(1) because,..., it is marked on the packages. »

 However, the brochures do not pass the first threshold, Thurlow J. states as follows:

To my mind, however, the presence of the plaintiffs’ marks on the comparative shade charts of the defendants’ brochures is not a use of such marks within the meaning of s. 4(1) since the brochures are neither the wares themselves nor the packages in which the wares are distributed and nothing that I would regard as notice to any person purchasing the defendants’ wares of any association of the plaintiffs’ marks with those wares, so far as I am aware, ever occurs in any use to which the brochure or its chart can be put at the time of the transfer of the property or possession of the defendants’ goods to their purchaser. 84

 The second step is to determine whether the use falls within the « exclusive right to use » definition. On that issue, Thurlow defines « exclusive right to use » as follows:

In all cases, however, a trade mark is defined by reference to use for the purpose of distinguishing or so as to distinguish wares or services whether of a particular origin or of a defined standard, from others. When, therefore, s. 19 provides that the registration of a trade mark in respect of any wares or services gives the owner « the exclusive right to use of such trade mark throughout Canada in respect of such wares or services » what it appears to me to confer is the exclusive right to the use of such mark in association with such wares or services...for the purpose of distinguishing the wares and services as being those of the user of the trade mark or of a defined standard from others . A use of the mark in association with wares or services,..., that is not « for the purpose of distinguishing or so as to distinguish » the particular wares or services from others is not,..., within the area of exclusive right conferred by s. 19.

 In analyzing the packages, Thurlow J. concludes that the use of MISS CLAIROL and HAIR COLOR BATH do not fall within the ambit of s. 19 TMA as defined above. Essentially, REVLON and COLORSILK appear prominently on the packages whereas MISS CLAIROL and HAIR COLOR BATH appear in small print. « ...I think, abundantly clear from looking at the packages that the marks, MISS CLAIROL and HAIR COLOR BATH, are not intended to indicate and do not indicate to anyone that the contents of the package are the defendants’ goods...Nor do I think it likely that any prospective purchaser of a package of those wares would be likely to be deceived by the presence of the marks,..., into thinking that they were intended to indicate the origin of the goods in the package. »

S. 22(1) TMA issue:

 The first step in the analysis is the same as that in s. 19 TMA. That is, « use » as it appears in s. 22(1) TMA has essentially the same interpretation as that found in ss. 2 and 4 TMA (see discussion under s. 19 TMA issue). Thus, the conclusion arrived at with respect to the brochures in s. 19 TMA will have the same fate here. « Use » in s. 22 TMA does not include the brochures. That said, « use » does embrace the packages.  The second step is to determine whether the use made of Clairol’s marks is a use in a manner likely to depreciate the value of the goodwill attached to those marks. Thurlow J. defines « goodwill » as follows:

...the goodwill attaching to a trade mark is,..., that portion of the goodwill of the business of its owner which consists of the whole advantage, whatever it may be, of the reputation and connection, which may have been built up by years of honest work or gained by lavish expenditure of money and which is identified with the goods distributed by the owner in association with the trade mark.

 On the interpretation of « depreciate the value » of goodwill, Thurlow states as follows:

To my mind this means simply to reduce in some way the advantage of the reputation and connection to which I have referred [see above quote], to take away the whole or some portion of the custom otherwise to be expected and to make it less extensive and thus less advantageous. As I see it, goodwill has value only to the extent of the advantage of the reputation and connection which it owner enjoys and whatever reduces that advantage reduces the value of it. Depreciation of that value in my opinion occurs whether it arises through reduction of the esteem in which the mark itself is held or through the direct persuasion and enticing of customers who could otherwise be expected to buy or continue to buy goods bearing the trade mark.

 Thurlow J. provides the following guidelines:

In short, he may not use his competitor’s trade mark for the purpose of appealing to his competitor’s customers in his effort to weaken their habit of buying what they have bought before or the likelihood that they would buy his competitor’s goods or whatever binds them to his competitor’s goods so as to secure the custom for himself, for this is 85 not only calculated to depreciate and destroy his competitor’s goodwill but is using his competitor’s trade mark to accomplish his purpose.

 Here, both MISS CLAIROL and HAIR COLOR BATH have some considerable body of goodwill attached to them. Thomas Supply is using these marks on their packages for the purpose of facilitating persons familiar with Clairol’s products to switch to Revlon’s products. This type of use is likely to depreciate the goodwill attached to Clairol’s products.

______

D.L.’s comments on the case: Feels that the judge defined « goodwill » much too widely. As well, he questions whether we even need s. 22 TMA since the problems it purports to handle could easily be dealt with under the theory of confusion.

2. Use in the Normal Course of Trade

Cie General des Etablissements Michelin-Michelin & Cie v. C.A.W. Canada (1996) F.C.T.D. (Vol. 2, p. 105)

Facts • Plaintiff’s logo trade-mark (“Bibendum”) was being used by Defendant in leaflets it was distributing to workers outside three of Plaintiff’s factories. • The leaflet contained a large rendition of Bibendum stomping on the head of a much smaller worker standing below.

Issue • Does Defendant’s use of the Bibendum figure constitute an infringement of Plaintiff’s registered trade-mark?

Held • There is no trade-mark infringement. There is a copyright infringement.

Ratio • The relevant sections of the TMA considered by the court are 20 & 22. Specifically, the court examined the meaning of the term use in both those sections. • Upholding Clairol, the court held that the meaning of “use” in sec. 19 (argued in Clairol) is the same as that in sec. 20 (argued in the present case), although the use requirement in sec. 20 is implicit - in sec. 22, the use requirement is explicit and equally as stringent. • The court looked as the definition of “trade-mark” in sec. 2, and concluded (p. 110):

“ To qualify as “use as a trademark”, therefore, the mark must be used for the purpose of identifying or pinpointing the source of the goods and services. In other words, to use a mark as a trademark, the person who used the mark on the goods or in connection with the services must have intended the marks to indicate the origin of the goods or services.” 86 • The term “use” is defined in sec. 4 to mean “any use that by section 4 is deemed to be a use in association with wares or services.” • The court felt that the classic Clairol analysis of “use” is still good law and requires two separate elements of proof from both sec. 2 and sec. 4: (1) (sec. 4 criteria) Did the Defendant’s associate their services with the Plaintiff’s trademarks?; and (2) (sec. 2 criteria) Did the Defendant’s use the mark as a trademark for the purpose of distinguishing or identifying the Defendant’s services in connection with the Plaintiff’s wares or services? • The net or meaning of “use” is designed so that no all users of trademarks belonging to another person are caught within the threads of the infringement provisions. • With respect to sec. 22, the court held that under that section it was only necessary to prove use in association with wares or services (the sec. 4 criteria). The second element of proof is not required. • Defendant’s use, in this particular case, was not in association with wares or services under sec. 20 & 22. The leaflets were not “wares” (“printed publications”) since Defendant was not in the business of printing leaflets. The leaflets did not qualify as “advertising” and were therefore not “services” (a term not defined in the TMA). Overall, while Defendant would reap some financial reward from the collection of union dues, its actions would not qualify as a commercial activity. • Furthermore, anybody reading the pamphlets would make not association between use of the trademarks and the Plaintiff. • Therefore, Defendant was not using the trademark in association with its wares or services, so there can be no infringement under sec. 20 & 22.

• Obiter: Even if the first part of the test were passed, the second part would nonetheless fail- Defendant was not using “Bibendum” to indicate that Plaintiff was the source of the pamphlets and leaflets. Defendant did not use “Bibendum” as a trademark but as a campaign tool. • There could be no mistake that Defendant was the source of the pamphlets (its logo was on the leaflet).

Lin Trading Co. V. C.B.M. Kabushiki Kaisa (1988) Ont. C.A. (Vol. 2, p. 135)

Facts • Watches manufactured by Respondent in Japan, in conjunction with “Q & Q Design” trade mark, which was registered in Japan and several countries around the world. • Appellant wished to act as Canadian distributor for Respondent’s watches. Sixty-two watches were sent to Appellant by Respondent. • Appellant now wishes to register two trade marks in Canada in connection with these watches - “Q & Q Design” and “Q AND Q”.

Issue • Can Appellant register the marks “Q & Q Design” and “Q AND Q” in Canada?

Held • Appellant is not able to register the two marks. 87

Ratio • The decision focuses of the application of sec. 16(1) TMA. Under that section, the Appellant is able to register a mark unless it is confusing with a trade mark that had previously been used in Canada (16(1)(a)). • The narrow issue is therefore whether the two marks had previously been used in Canada. • The court looked at the definition of “use” in sec. 2 and sec. 4. Much emphasis was placed on the phrase “in the normal course of trade” found in sec. 4. • Respondent had made certain transfers of the watches to Canada in 1980 and in 1981 - the latter being to the Appellant. The court concluded that these transfers were made “in the normal course of trade”. Applying the reasons of Heald, J. in Manhattan Industries, Stone, J. writes (p. 137):

“The words I have underscored plainly show that Mr. Justice Heald was not excluding from his appreciation of the phrase “in the normal course of trade” a sale by foreign trade mark owner of goods bearing his mark to a Canadian wholesaler or distributor. This is precisely what occurred in the present case. (...) I simply cannot agree with the appellant’s position that sales “in the ordinary course of trade” can exist only if shown to have occurred along the entire chain referred to by Mr. Justice Heald, ending with an ultimate consumer.”

• Therefore, since Respondent had previously used the two marks in Canada, the Appellant was unable to register the marks.

Barringer & Oyen v. Apache Communications International Corp. (1994) Trade Marks Officer (Vol. 2, p. 139)

Facts • Proceeding respecting registration of trade mark CAPTAIN CANADA. • Registrar sent a sec. 45 TMA notice to Apache requesting evidence of user.

Issue • Was the trade mark being used in Canada in association with the wares mentioned in the registration, in the normal course of trade, and during the two years immediately preceding the date of the notice? (NOTE: present sec. 45 requires use in the three years immediately preceding the date of notice)

Held • Registrant was unable to show use pursuant to sec. 4 & 45, and therefore the trademarks is expunged from the register.

Ratio • Sec. 4 requires use of the mark in association with wares. The mark was to be used in association with “comic books and magazines”. There was no evidence of use of the mark in association with magazines. 88 • Sec. 4 requires “use” in a manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred. • There was some evidence of the use of the mark CAPTAIN CANADA in a special collector’s edition of “Atlantis”. However, the trade mark is used on certain pages of Atlantis that may not be visible to the ordinary purchaser at the time of purchase of the wares. Furthermore, the packaging of Atlantis may very well prevent access to these pages at time of purchase. Therefore, there was not adequate notice of the association between the trademark and the registrant’s wares at the time of transfer, as required by sec. 4.

Professional Gardner Co. Ltd. V. Registrar of Trade-marks (1985) F.C.T.D. (Vol. 2, p. 142)

Facts • Appellant owned a registration for a trade-mark HYDROCULTURE for use in association with “plant-growing systems”. • Notice sent pursuant to sec. 44 [now 45] to show that mark was in use in Canada.

Issue • Was the Registrar correct in expunging the trade-mark for non-use?

Held • The trade-mark was not being used in Canada in the normal course of trade and therefore should have been expunged.

Ratio • The Appellant was only able to show use of the trade-mark in connection with one sale in 1978 - there was no evidence of use since that date. Furthermore, the trade-mark was not in use at the time the notice was sent (1983). • There was some vague evidence of free samples being given to the public since 1978, and that pamphlets were handed out in connection therewith. The court was not satisfied that this was use in the normal course of trade, as required by sec. 4. • The court felt that no “special circumstances” existed to excuse the absence of use, as provided by sec. 45(3). Special circumstances must involve something unusual, uncommon or exceptional arising from forces external to the voluntary acts of the registrant. • The Appellant argued that he could not find the particular kind of aggregate he wanted - he searched throughout N.A. and Europe for seven years for it. However, the court felt that this was a problem of the Appellant’s own making. Strayer, J. writes (p. 144):

“Given the breadth of that description, covering any “plant growing systems” it was surely open to the appellant to experiment with other systems besides one for which material had to be sought for some seven years. In limiting itself to the one system involving a material almost impossible to find, it voluntarily declined to use the trade mark - a trade mark which is so broad as surely to have allowed the use of some other system involving available materials. 89 Another way of putting this proposition is that the trade mark system should not have to tolerate someone registering a mark for such a broad range of wares and then precluding the use of the trade mark by others simply on the basis that the registrant cannot produce wares in a particular form on which he insists.”

• The trade-mark should be expunged for non-use, there being no special circumstances to excuse such non-use.

3. Use in Canada Considering that the law of trade-marks revolves around “use”, it is going to be relevant to know whether a party “uses” a TM, whether it is an applicant seeking to register a TM or an opponent basing its opposition on non-use. The main dispositions dealing with the definition of “use” are ss. 2, 4 and 5.

2. “use”, in relations to a trade-mark, means any use that by section 4 is deemed to be a use in association with wares or services;

When deemed to be used 4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributes or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.

When deemed to be used (2) A trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising ot those services.

Use by export (3)A trade-mark that is marked in Canada on wares or on the packages in which they are contained is, when the wares are exported from Canada, deemed to be used in Canada in association with those wares.

5. A trade-mark is deemed to be made known in Canada by a person only if it is used by that person in a country of the Union, other than Canada, in association with the wares or services, and (a) the wares are distributed in association with it in Canada, or (b) the wares or services are advertised in association with it in (i) any printed publication circulated in Canada in the ordinary course of commerce among potential dealers in or users of the wares or services, or (ii) radio broadcasts ordinarily received in Canada by potential dealers in or users of the wares or services, and it has become well known in Canada by reason of the distribution or advertising. 90 See also s. 45 for need to prove “use” (parag. 1) and effect of non-use (parag. 3).

The following case illustrates an application for expungement under s. 45.

Moffat & Co. v. Le Lido

(CB, p. 146) Trade Marks, D. Savard, Senior Hearing Officer (April 3, 1992)

Facts  Registrant owned the TM LE LIDO for both wares (perfumes, sound recordings, periodicals, etc…) and services (organization and production of entertainment, operation of a night club and restaurant in Paris, etc…)  Moffat & Co. applies to Registrar under s. 45 of TM Act for expungement of TM.  Registrant admits TM not used in Canada with regard to the wares.  Re registered services, Le Lido cabaret is referred to in travel brochures published by airline & subsidiary travel agency.

Relevant sections  2, 4, 5, 45.

Issue  Was the TM used in Canada at any time during the 3 yrs preceding the notice, and if not, were there justifying special circumstances?

Holding  TM expunged in relation to both wares (see registrant’s admission) and services.

Ratio  the actual advertising and trip organization was done by the airline & the travel agency and not by registrant.  brochures only mentioned trips might comprise admission tickets or reservations to Le Lido in Paris. Even then, it is not sure that the term LE LIDO was printed and whether it appeared as a TM or trade name.  registrant is not offering or performing any of its services in Canada under the mark nor is it performing in Canada services ancillary to the registered services.  absence of use was due to a voluntary act of registrant and such marketing decision (no use for over 11 years) does not constitute special circumstances justifying non-use for the purpose of avoiding expungement under s. 45 (N.B. There is already a built-in 3-yr grace period in s. 45 for flexibility re market conditions).

N.B. Under s. 5, the product does not need to be in Canada yet; you need either actual distribution or actual advertising. 91

When expungement proceedings are taken under s. 45:  any person can be Applicant as long as pays applicable fees;  Registrar gives notice to registered owner, who has burden of proving use during the 3-year period preceding notice;  any wares or services for which use in Canada has not been demonstrated during the period will be deleted from the registration, unless absence of use is justified by special circumstances (need to be special);  Registrant gives notice of his decision to Registrant & Applicant.

QUESTION (may be interesting for exam according to Lametti…) Would website come under s. 5(b)(i)…”printed publication circulated in Canada in the ordinary course of commerce…” Does it meet the standard concerning “advertising”?

4. Comparative Advertising The question addressed in this section is the following: Is comparative advertising considered to be “use” and is owner of TM protected against such? In order to determine “use”, we have to refer to the s. 4 definitions, and s. 4(2) deems a TM used in association with services “if it is used or displayed in the performance of advertising…” Result: comparative advertising could be caught.

Future Shop Ltd. v. A.&B. Sound Ltd. (CB p. 150) B.C. Sup. Ct. (1994)

Facts  parties are in highly competitive market (retail of electronic products);  A.& B. seek to attract customers by highlighting its low prices in comparison with competitors & refer, in advertising, to Future Shop TMs;  prices mentioned are accurate;  Future Shop relies on ss. 2, 4, 19 and 22(1) to apply for an injunction, alleging that the use of comparative advertising depreciates the goodwill attaching to their TM;  N.B. We are here dealing with services, therefore use is deemed if TM is used or displayed in advertising of such (s. 4(2)).

Holding  application for interlocutory injunction dismissed: advertising is OK.

Ratio  reference to Thurlow J. in Clairol re s. 22 not intended to forbid legitimate comparisons or criticisms as comparative price lists on a counter or references to competitors’ TMs by a sales clerk;  no difference in principle between counter display of comparative prices and media advertising with same information; 92  reconciles this case with Clairol by distinguishing it: in Clairol, Revlon was stressing the similarities between the products whereas in the present case, A. & B. distances itself from Future Shop.

When stresses similarities, trying to capitalize on others’ goodwill and appropriate it: infringemenr of s. 22; When stresses the differences: no infringement of s. 22.

Lametti’s criticism: isn’t A.& B. “criticizing Future Shop’s too high prices & trying to attract their customers?

Comparative advertising will not be caught by s. 19 test & therefore there will not be infringement under s. 20 on that basis. If we look at s. 19 test: 1) “in association with the wares” (s. 4) ------will probably meet the test; “in ordinary course of trade” (s. 4) ------will probably meet the test; 2) used “as a TM” (s. 2) ------test usually not met; 3) identical mark or confusing enough ------will usually be identical.

BUT comparative advertising might be caught by s. 22 test because the test is different: 1) “in association with the wares” and “in ordinary course of trade” (s. 4) ---- usually met; 2) depreciation of goodwill ------often met. N.B. Mark may be identical OR confusing.

It seems like Thurlow’s analysis in Clairol, merely attracting customers away, could trigger s. 22. Lametti’s comments:  thinks it is going a bit too far.  If not misleading, why not allowing it? (Revlon was not saying one was better than the other. Future Shop was not lying about the prices.)  Canada is the only place where there is a provision like s. 22.

WARES: can’t have comparative advertising on packaging because of Clairol & s. 4(1), because says “on wares themselves or on packaging”; can have comparative advertising in brochures because of s. 4(1). SERVICES: can’t have comparative advertising in brochures because of Clairol & s. 4(2), “in the performance of advertising”.

N.B. Clairol still the leading case, but keep in mind distinction between s. 4(1) & s. 4(2).

5. Non-Use and Abandonment s. 45(3): Effect of non-use: if not used in 3 years, one might challenge the TM, which may be expunged. 93 N.B. Registration is a surrogate for use. The 3-yr period is a grace period for planning, production, etc…

Factors for determining non-use within meaning of s. 45

 mere non-use does not necessarily mean abandonment;  there needs to be intention to abandon;  BUT intention MAY be inferred;  long period of non-use may be good evidence of intention but not conclusive;  adoption of new marks may show intention to abandon, but not conclusive;  not using a TM at time of renewal could be evidence of intention not to abandon.

Labatt Brewing Co. v. Molson Breweries

(COUNTRY CLUB case) (BC, p. 155) Federal Ct, Trial Division, 1992

Facts  Labatt owned TM COUNTRY CLUB (registered on Jan. 15, 1960).  July 1968, Molson applied to register TM CLUB ALE based upon use, & Labatt opposed it since as of date of opposition, COUNTRY CLUB was on the register, and said applicant’s mark was confusing, not distinctive, and that applicant was not the person entitled to registration.  Re confusion, Registrar considered date of opposition as material date and refused Molson’s application based on prior registration and on the fact that Molson did not discharge burden of proving no likelihood of confusion;  Registrar did not consider the other grounds of opposition.  Labatt’s TM was expunged between date of opposition and date of Registrar’s decision,  Molson appealed the refusal of its registration.

Issue  Had COUNTRY CLUB been abandoned by Molson?

Holding  Registrar’s decision overturned: Molson wins and can register CLUB ALE because COUNTRY CLUB was held to have been abandoned.

Ratio  material date considering registrability was wrong by Registrar: should be date of Registrar’s decision, therefore Registrar was wrong with his finding of confusion, because at date of decision, Labatt’s TM had been expunged;  material date concerning person entitled to registration was OK, i.e. date applicant’s TM was first used. Although Registrar was right concerning the issue of confusing marks, he should not have turned down Molson’s application, because as of the date of advertisement of opposed mark (CLUB ALE), Labatt’s mark had been held to have been abandoned. 94  burden of proof of non-abandonment was on Labatt and the Court found that it did not discharge such burden, it did not prove that it did not have the intention to abandon the mark.  evidence shows a change to MANITOBA CLUB & sold as such as of May 1969.  evidence points categorically to a great probability of mark not having been used in any way since 1969.  mere fact of using COUNTRY CLUB labels on kegs is not necessarily indicative of intention to maintain mark but could be an economic way of disposing of the last labels (!!!)

Labatt Brewing Co. Ltd. v. Benson & Hedges (Canada) Ltd. (BC, p. 163) Federal Court, Trial Division (1996)

Nature of procedure  Appeal from Registrar’s decision of Jan. 31, 1994 denying Labatt’s application dated May 15, 1972 for registration of COUNTRY CLUB.

Facts  Labatt sought to register COUNTRY CLUB & applied in May 1972.  Advertisement for opposition purposes on May 8, 1974.  Opposition by Benson & Hedges on July 12, 1974 (N.B. Molson’s was added as the second opponent: ref. to Labatt v. Molson).  Labatt’s application is based on use of COUNTRY CLUB in association with brewed alcoholic beverages in Manitoba since 1928, and use re bottled & draught beer since 1955.  Labatt admits having discontinued use of COUNTRY CLUB in favor of MANITOBA CLUB on bottled beer since mid-1969 but submits had continued to use COUNTRY CLUB with regard to draught beer in kegs.  The Board only considered the ground of opposition based on s. 30. It concluded that abandonment was relevant to an opposition based on s. 30 and held that the application did not comply with s. 30 because the mark had been abandoned.

Issues  (1) Can abandonment be an issue under s. 38(2) (grounds of opposition), which refers to conformity with s. 30?  (2) Had Labatt abandoned COUNTRY CLUB? (or in other words, was there “non-use” of the mark that could amount to abandonment?)

Holding and Ratio  (1) YES. Despite the absence of reference to abandonment in ss. 38(2) and 30, s. 30 requires continuous use of a TM in the normal course of trade, because of s. 30 wording (“the date from which the applicant or his named predecessors in title, if any, have so used the trade- mark…”)

 (2) NO. Court concludes no abandonment and mark can be registered. 95  Although non-use outside the normal course of trade without intention to abandon would be sufficient grounds to defeat an application, the opponent has not discharged the burden of proof imposed on it.  The only possible period of non-use of the COUNTRY CLUB mark covers draught beer and runs from May 1971 to late 1972. The Court sorts out all the confused and contradictory evidence & finally concludes that COUNTRY CLUB labels continued to be used on kegs during the said period (info on order forms was not found conclusive but Court based its conclusions on testimonies of witnesses).  Result: period of non-use of the COUNTRY CLUB mark outside the normal course of business has not been established.

Bereskin & Parr v. Unico Inc.

(CB, p. 167) Senior Hearing Officer (1994)

Facts  Unico owned TM MARCA GALLO for olive oil and tomato paste;  upon Bereskin & Parr’s request, Registrar issued a s. 45 notice to Unico to prove use.  no evidence of use re tomato paste & such wares are deleted from registration;  re olive oil: registered TM comprised words MARCA GALLO of equal size, and words pointed together in curved configuration (quite prominent) over rooster;  evidence adduced now shows use of different TM: work “marca” completely omitted from label in one case, and work “marca” very small (almost insignificant) above work “gallo” over small rooster in other case;

Sections  ss. 45, 2 & 4.

Issue  Does the use of TM as altered constitute “use”?

Holding & Ratio  Use of TM omitting word “Marca” does not constitute use of TM as registered;  Use of TM with word “Marca” in smaller print does not either constitute use because an essential feature of the TM as registered has been altered significantly; the change is not minor and the visual impact of each TM is very different. s. 38(2) gives possible grounds of opposition, does not refer to abandonment, only refers to application not conforming to the requirements of s. 30. 96 s. 30 does not either refer to necessity of non-abandonment. However, s. 30(b) mentions that, for a mark that has previously been used in Canada, the applicant must file the date from which it has so used the TM.

Judge in Benson & Hedges says that s. 30 therefore requires “continuous use of a TM in the normal course of trade” (CB, p. 165).

SUMMARY

Non-use + intention to abandon = abandonment.  might be grounds for expungement under s. 45;  s. 17(1) says burden of proof is on person challenged;  in Labatt v. Molson, Labatt tried to prove no intention but failed; Court inferred intention from use of other mark (MANITOBA CLUB) and circumstances.

Non-use in the normal course of trade (“strategic”) is not abandonment.  burden of proof on person challenged to prove no intention.

Non-use outside the normal course of trade without intention to abandon.  middle category created by Judge in Benson & Hedges;  would be sufficient grounds to defeat registration;  burden of proof would be on person challenging the registration;  in Benson & Hedges, burden of proof of non-use of TM COUNTRY CLUB outside the normal course of trade was not discharged by the opponent.

6. Use by Licensee Trade-mark Act, sections 50, 51

Licence to use trade - mark

50. (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.

Idem

(2) For the purposes of this Act, to the extent that public notice is given of the fact that the use of a trade-mark is a licensed use and of the identity of the owner, it shall be presumed, unless the contrary is proven, that the use is licensed by the owner of the trade-mark and the character or quality of the wares or services is under the control of the owner. 97 Owner may be required to take proceedings

(3) Subject to any agreement subsisting between an owner of a trade-mark and a licensee of the trade-mark, the licensee may call on the owner to take proceedings for infringement thereof, and, if the owner refuses or neglects to do so within two months after being so called on, the licensee may institute proceedings for infringement in the licensee's own name as if the licensee were the owner, making the owner a defendant.

Use of trade-mark by related companies

51. (1) Where a company and the owner of a trade-mark that is used in Canada by that owner in association with a pharmaceutical preparation are related companies, the use by the company of the trade-mark, or a trade-mark confusing therewith, in association with a pharmaceutical preparation that at the time of that use or at any time thereafter,

(a) is acquired by a person directly or indirectly from the company, and

(b) is sold, distributed or advertised for sale in Canada in a package bearing the name of the company and the name of that person as the distributor thereof, has the same effect, for all purposes of this Act, as a use of the trade-mark or the confusing trade-mark, as the case may be, by that owner.

Class Notes and Cases

- The key here is that, for the purposes of the Act, you are deemed to be "using" the mark if you have licensed the mark while maintaining direct/indirect control over the character/quality of the mark. - Note that the Act avoids the problem of "passing off" by deeming use, even though you are not actually using the mark. The common law alone would not allow the licensing of a mark. - According to the prof, the main point here is that s.50 has been strictlyinterpreted by the courts. While we are departing from the prohibition against licensing, we are requiring the licensors to mainting a great degree of control over the mark.

Dynatech Automation Systems Inc. v. Dynatech Corp II, 169

[The key here is that the ownership of a subsidiary is not sufficient in itself to be "control". The potential to control is not enough. You need de facto (actual) control.] - The trademark DYNATECH was expunged. Although it was shown that there was use of the trademark, it was not shown that the use was by the registered owner. - The registrant carried on business in Canada through subsidiaries. 98 - Control, merely by share ownership, does not satisfy s.50(1). The fact that the registrant was in a position to control the use by the licensee is not enough. There must be control in fact. - A party cannot rely on its annual report to assert public notice of an intercorporate relationship and inferred control pursuant to s.50(2). Similarly, a parent-subsidiary relationship is not enough.

Bereskin & Parr v. Coca-Cola Ltd. II, 174

[The key here is that the licensor controlled the use of the mark: the licensor ensured that the licensee did what they were required to do.] - Coke owned the trademark SPLASH registered in association with "soft drinks and beverages". - After Coke renewed the trademark, a notice was issued under s.45 requiring Coke to show use of the mark within the two years preceding the notice. Coke filed an affidavit in attempting to show such use. - Although the affidavit d/n expressly name the licensed entities, the labels (contained in the affidavit) stated that the product was "Bottled Unde Authority of Coca-Cola Ltd.". This gave notice to the public that the use of the trademark was under the authority of the registrant (Coke). Also, it was shown that Coke licenses various bottling companies, provides concentrate, supplies and strict specifications for the manufacture and sale by its licensees. Coke also maintained strict control over the character and quality of the products and the use of the trademarks.

Smith, Lyons, Torrance, Stevenson & Mayer v. Pharmaglobe Laboratories Ltd. II, 176

- The evidence showed use of the registrant's coporate name rather than that of the registered trademark. Pharmaglobe was not the registrant. - Remember the Road Runner case which stated that there is a rebuttable presumption that a company name is a trade name rather than a trade mark. The presumption can be rebutted if the mark appears in greater prominence, it created a distinctive element of the corporate name and it appeared on the wares. Here, there was no such rebuttal, since there was nothing to distinguish the mark PHARMAGLOBE from the corporate name "Pharmaglobe Laboratories Ltd." because all the words were of the same size and style of lettering. In any case, even if the word "Pharmaglobe" had been given greater prominence, it would not have been sufficient since it only appeared on an invoice. - Therefore, there was no use of the trademark, only use of the corporate name. - The evidence only identified Pharmaglobe as the parent company of the registrant. It did not show any existence of a license or the requisite control by the registrant. - Even if the evidence showed use of the trademark, the use was by Pharmaglobe and not by the registrant. 99 (F) PASSING OFF AND UNFAIR COMPETITION

1. Passing Off

 Trade-Marks Act, s. 7: No person shall (a) make a false or misleading statement tending to discredit the business, wares or services of a competitor; (b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another; (c) pass off other wares or services as for those ordered or requested; (d) make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition; (ii) the geographical origin, or (iii) the mode of the manufacture, production or performance of the wares or services; or (e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada.

 Passing-off is a common law action which is independent of statute. It is a tort, which can be enjoined.  Essentially, one should not be able to pass one’s goods off as those of someone else.  Many of the cases deal with a distinguishing guise or get-up. The plaintiff must establish a secondary meaning which has been acquired over time. Consumers must know that that guise relates to that particular product.  S. 7 of the Trade-marks Act incorporates the common law of Canada by reference.

Ervin Warnick Belsloten Venootshap v. J. Townend & Sons (1979 House of Lords)  Plaintiff manufactures a type of alcoholic drink known as “advocaat”, which is a mixture of spirits and eggs. This type of drink has become a distinct and recognizable type of beverage.  The defendant is selling a mixture of wine and eggs, using the word “advocaat”. Because of the excise laws, the cost of the wine drink is cheaper. Therefore, defendant is able to undersell the plaintiff.  The court of first instance found that the drink known as advocaat had acquired a substantial reputation and goodwill.  Lord Diplock explains that this is not an action for passing-off in its classical sense, since the plaintiff is not alleging that purchasers are being misled into believing that the defendant’s goods are, in fact, those of the plaintiff.  Rather, this is an “extended” form of passing-off. Here, the plaintiff claims that a false suggestion by the defendant that their goods are associated with the plaintiff’s (or of the same type) will damage the plaintiff’s goodwill and business. 100  This type of passing-off is a type of unfair competition. What is protected in this action is not the proprietary right in the mark, but rather the proprietary right in the business or goodwill likely to be injured by the misrepresentation.  Goodwill has been defined as “the benefit and advantage of the good name, reputation, and connection of a business”. It is what attracts customers.  Lord Diplock identifies 5 characteristics which must be present in an action for passing-off: 1) a misrepresentation 2) made by a trader in the course of trade 3) to prospective customers 4) which is calculated to injure the business or goodwill of another trader (or this is reasonably foreseeable) 5) which causes actual damage  An analogy is drawn to a line of earlier cases, in which an action for passing-off was brought against a defendant who produced goods which were not in conformity with the general understanding of the term “champagne” (i.e. a designation of geographical origin). It was held that the goodwill associated with that term was collectively held by producers, and that this was damaged by the defendant’s use of the term.  In those cases, the term referred to the geographic origin of a product and that there was a large class of producers entitled to benefit from the goodwill of the term. While this is not the case here, the reasoning is nevertheless directly relevant.  If one can define with reasonable precision the type of product that has acquired the reputation, one can identify the members of the class entitled to share in the goodwill. Here, the type of product is defined by reference to the nature of its ingredients. The class of traders capable of benefiting from it are those whose product conforms with these ingredients.  The plaintiff had a 75% share of the trade, and its business has been shown to have suffered as a result of defendant’s actions. Therefore, all characteristics for a passing-off action are present, and the injunction is granted.

Reckitt & Coleman Ltd. v. Borden Inc. (1990 House of Lords)  The plaintiff is the maker of “Jif” lemon juice, which it markets and sells in squeezable plastic containers shaped like a lemon. The defendant has begun to market its lemon juice in a similar get-up. Although the labels are different, the container is largely the same.  The court of first instance found as a matter of fact that housewives buying plastic lemons in supermarkets do not read the labels but assume that whatever they buy must be Jif.  Under the law, the lemon could not be registered as a trade-mark for lemon juice. However, due to the plaintiff’s continued use of the container, it has achieved the same result indirectly. This type of container has become distinctive of their goods.  This is an example of “classical passing-off”: no man may pass off his goods as those of another. Lord Bridge sets out 3 requirements for a successful claim: 1) plaintiff must establish a goodwill or reputation attached to the goods or services in the mind of the purchasing public by association with the identifying “get-up”, such 101 that it is recognized as being distinctive of his goods (this is the “secondary meaning” element referred to above); 2) must demonstrate a misrepresentation by the defendant to the public (whether intentional or not), leading or likely to lead the public to believe that the goods are the goods of the plaintiff; 3) must demonstrate that he suffers or is likely to suffer damage as a result.  Defendant argues that plaintiff is not seeking to protect its goodwill, but rather the product itself (i.e. plastic lemons), which may be copied in the absence of patent protection.  The court rejects this argument. Here, the problem is not the sale of plastic lemons, but rather the sale of lemon juice in containers which are suggestive of the contents. Lemon juice could be sold in other containers. So, the container is not part of the product itself, but is rather the get-up under which the plaintiff sells it.  Defendants also argued that there are enough differences between the containers to prevent confusion. Again, the court rejects this, saying where the confusion stems from is immaterial. Even though the labels may be different, the most striking part (the lemon shape) is the same and likely to lead to confusion.  Defendant attempts to argue that this container is the same as the descriptive term “lemon juice” and can legitimately be employed by it. Terms which are common to the trade give no rise to a cause of action.  However, the trial judge found that the lemon-sized container was not in general use, but was intricately associated with Jif lemon juice. Therefore, this argument fails.  In assessing whether the articles are confusing, each case is different. Customers must be taken as they are found. In this case, side-by-side comparisons do not take place, since supermarkets generally carry only 1 or 2 types of lemon juice. The trial judge found that most customers purchasing Jif juice identify it by the shape of the container, and pay no attention to the label.  Therefore, the defendants have not sufficiently distinguished their product from the plaintiff’s.

 According to Lametti, this case seems to suggest that the primary purpose of the passing-off action is to protect the proprietary interest that the plaintiff has in the good. This must be balanced against the interests of consumers.

Ciba-Geigy Canada Ltd. v. Apotex Inc. (1992 S.C.C.)  Ciba-Geigy is the manufacturer of a drug known as Lopresor. The defendants, Apotex, have been manufacturing a similar drug in the same get-up (size, shape and colour) as the plaintiff.  At issue before the court is who is the “public” to be considered in a passing-off action dealing with prescription drugs. In other words, can the court consider whether the ultimate consumer will be confused, or is it limited to considering pharmacists and physicians?  The court lists the 3 requirements for a passing-off action: (1) existence of goodwill; (2) deception of the public due to a misrepresentation; and (3) actual or potential damage. 102  The purpose of a passing-off action is to protect all persons affected. The manufacturer should be protected against any damage to his goodwill and unfair competition. Also, the public should be protected against being misled or confused, and must retain its freedom of choice.  The appearance of a product plays a crucial role in the purchase process, since it is the chief means which the manufacturer has to attract customers.  However, the court recognizes that pharmaceutical companies are limited in the creativity and means they may use to market their products. The only way they can attract attention to the product is by the capsule or tablet itself, and there are limitations with respect to size, shape, etc.  In the previous case of Ayerst, McKenna & Harrison, decided by Cory J. (in the C.A.) had held that for the purposes of a passing-off action, the customers of pharmaceutical manufacturers consist exclusively of health care professionals, and patients are not included.  However, Gonthier J. overturns Cory’s decision. Even though consumers may only have access to a drug by prescription, they nevertheless are capable of exercising a choice. Certain drugs are substitutable, and consumers may therefore have a choice as to which drug they will take.  Also, patients are able to determine based on the appearance of the drug, whether they were mistakenly given the wrong medication.  Patients are in need of protection and information just as much as ordinary consumers. To exclude them from the “public” in the passing-off action would be to deny them their rights as individuals.  The court therefore finds that consumers must not be excluded from the reasoning in an action involving the tort of passing-off.

Eli-Lilly & Co. et al. v. Novopharm Ltd. (1997 F.C.T.D.)  The plaintiff, Lilly, attempted to stop the defendants from marketing a generic version of the drug Prozac in the same green and cream-coloured capsule format.  The court recognizes the decision in Ciba-Geigy, that it is relevant to consider the ultimate consumer, the patient, in a passing-off action dealing with prescription drugs.  However, the court points out that the marketing efforts of generic drug companies are directed primarily towards physicians and pharmacists. Moreover, even though the consumer has some choice, the overriding consideration in choosing a prescription drug is the knowledge and recommendation of a doctor.  The court accepts that in this case, the views of the general public are relevant, i.e. whether a significant portion antidepressant users associate the capsule appearance with Lilly’s brand. Survey evidence is appropriate evidence in this type of case.  The court goes through an elaborate analysis of the type, quality, and results of the survey evidence submitted. There is also a detailed analysis of how drugs are marketed in Canada. It concludes that all marketing and promotional materials are aimed at doctors and pharmacists. 103  Evidence shows that a significant percentage of the population know the name Prozac and associate it with a mood altering drug. However, most people do not associate the size, shape and colour of the capsule with Lilly.  There are certain public policy considerations which the court takes into account. On the one hand, it is desirable to protect the public’s right to choose, by preventing passing-off. On the other hand, it may be better for patients, who are able to identify the type of drug (though not the brand) by its appearance: this would prevent them from taking the wrong medication by mistake.  The court finds that to the general public, the capsule does not identify a particular brand of the drug. The defendants here used the same capsule in order to identify the medicine as one which is therapeutically equivalent to that of the plaintiff, not as the plaintiff’s product itself.  The capsule appearance has not acquired the requisite reputation in the market place as a distinguishing feature of the plaintiff’s product. Moreover, there is no likelihood of confusion in the market place: in general, patients are unaware and are not greatly concerned about the brand of prescription medicines they consume.  Confusion is further limited by the fact that consumers can read the labels on the pill bottles, and that pharmacists are likely to inform them if they have substituted a different brand for their usual one.  On a final point, the fact that Eli-Lilly licensed another generic to produce and market the drug in a similar guise is significant. Trade-marks are supposed to protect the source of the product; however, allowing the capsule appearance to signify both a Lilly source and another source destroys any distinctiveness that might have existed.  Therefore, the dismisses the plaintiff’s claim.

 Although the court follows the decision in Ciba-Geigy, by its analysis of the entire industry, the consumer is assigned a limited role, and is almost taken entirely out of the picture. It is doctors and pharmacists which are most targeted by marketing and promotional efforts of pharmaceutical producers.  In doing so, the court seems to be making the argument of Cory in Ayerst, which was, however rejected in Ciba. It is hard to reconcile the two cases.

General Comments With Respect to Passing-Off  Lametti argues that even if all 3 required criteria are present in a given case, we should be careful to draw a fine line between harsh competition and passing-off. What may be morally wrong is not necessarily legally wrong.  Lametti and Vaver would both add an additional criterion to the analysis, namely that there be no reason of public policy to withhold a remedy.

 There are some significant differences between the common law action of passing-off and the protection conferred by ss. 19 and 22 of the Trade-Marks Act: 1) passing-off requires a symbol both to be used and to have gained a market reputation (“secondary meaning”), whereas an application for registration of a mark can be filed without establishing a reputation; 104 2) damages must be proven in a passing-off claim, but need not be proven under the Trade-Marks Act. There is a presumption stemming from registration; 3) the passing-off action is geographically limited to the locality of its reputation, whereas the protection of the Trade-Mark Act extends all across Canada.  Note also that s. 22(1) of the Trade-Marks Act provides statutory protection against the dilution of goodwill: No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto.  This appears to be broader than the passing-off action, which requires proof of a misrepresentation.  A passing-off action is therefore probably most useful when the trade-mark is not registered or unregistrable (as in the Coleman case).

2. Unfair Competition Not really covered in the course... 105

III COPYRIGHT

Copyright protects the form of literary, artistic, musical and dramatic works, as well as computer programmes and software. “Neighbouring rights” protects the broadcasting and transmission of such works. In theory, the idea is not protected; only the expression is. This section will look at the scope of copyright protection, infringement and moral rights.

General Overview

Copyrights apply to records, compilations, books, computer programs, performances (s.15 © Act), communication signals (s.21). The computer hardware can now be protected under the © Act. Standard for what constitutes an original work of art is applied very widely (standard is fairly low to meet). Original here is used as meaning originating from a person and not as something that must be entirely new.

Scope of © There are definite time limits. The standard rule in s.6 is the life of the author + 50 years. Since this period is pretty long, some period try to obtain a © protection even if it is in the nature of a TM protection.

© means the sole right to produce or reproduce… (s.3). So you have control over the production and reproduction of that work. That provision presumes a couple of things. What is protected is the expression, not the idea per se (it must be written down or recorded or produced…). The distinction between expression and ideas is sometimes very difficult to make. We are protecting against copying and reproducing.

Registration helps in that it gives a presumption of validity. You however have a copyright protection when you have expressed an idea (even though it is not registered).

Difference between TM and ©  Duration : © is for 50 years after the death of the author while TM is forever (to the extent that we have continuous use).  Subject matter : copyright is wider (cover more things  spectrum of human creation).

There is a number of ways to argue for and against IP : 1) Natural Rights arguments : labour, creation without wrong, or fairness flowing therefrom. 2) Freedom/autonomy/privacy 3) Utility and/or efficiency

What type of argument seems the more persuasive for TM? The utility and efficiency arguments. 106

What type of argument will help us justify copyrights? Freedom and autonomy  mostly persuasive wrt droit d’auteur. What argument are we missing? John Locke’s theory. Another argument is the labour argument which is to say that this is the product of your own labour… © is also concerned with utility and efficiency.

(A) INTRODUCTION

David Vaver, The Copyright Amendments of 1977: An Overview (p. I-105)

This is an article about the recent amendments to the Copyright Act, amendments which would have been a lot better and more appropriately worded if Vaver had made all the decisions himself (this is the flavor of the article…)

1. Introduction

Vaver talks about the 1997 amendments to the © Act, stressing the fact that all the discussions in Parliament left the average citizen quite indifferent (“the public apathy was perfectly understandable”), few people identifying with ©. In his opinion, it should not be the case because © is everywhere (buildings, advertisement pamphlets, scribbled notes, conversations?)

Result: © holders get more rights and more money, in particular record companies and performers; book wholesalers with exclusive distribution agreements get powers similar to ©; greater centrality of the role of collecting societies; limited exemption to non-profit organizations; exemptions to non-profit archives and perceptually disabled people.

2. Record producers and performers: party time!

(a) Charges for broadcasts & public performances

Record producers and performers will now get more money (50%-50%) of the extra fee when works are broadcast or performed in public, following in the footsteps of music publishers, composers & lyricists: meaning of © is expanding. Not only in Canada but also for performers & rec. co.s based in Rome member states. (not U.S. because U.S. not signatory of Rome Convention & no comparable benefits from them).

Exceptions: small broadcasters protected: $100 fee on 1st $1.25 million of annual advertising revenues; fees beyond this are phased in over 3 years.

But Act gives flat 50-year term. Vaver seems to think record producers and performers are greedy & will push for more, i.e. may even get life-plus-50 year term! 107

(b) Charges for blank audiotape

The music industry invariably blames drops in sales on unauthorized copied by people who would otherwise have bought a record. Canada has followed Europe and other countries in establishing a levy on blank audio tapes to compensate for this. Makers & importers of tapes pay a collecting society a levy on every unit sold. The © Board will decide on shares of such fund for eligible composers, lyricists, performers, record companies. Note that non-Canadian composers & lyricists are “authors” & will be eligible if from a Berne or WTO state. Only performers & record companies from states granting same benefit will be eligible.

NOTE: this levy on audio tapes is not in force yet.

Vaver points to incongruities: 1. Those who record music will be protected, but not people who are not associated with the music industry (drama, comedy, recitation). 2. Computer disks are exempt even though can be used to record & play back music. 3. Blanks sold to associations representing people with perceptual disabilities will not be subject. 4. Lots of acceptable, non-infringing uses will be penalized by the levy: tapes to record one’s own original music or a private performance, tapes to record interviews by reporters, etc…

Result: mismatch between who pays & who gets the money. Maybe more a disguised tax than forced royalty.

3. Broadcasters

There is now © in in-house originated programming and in schedules listed in TV & radio guides (“compilations of literary works”)!

The Act gives broadcasters located in Canada or a WTO or Rome Convention state a further 50- year © over unauthorized recording & reproduction of their transmissions originating from that state. N.B. This is tempered by the new liabilities related to “neighbouring rights”.

The fair dealing defence is now broadened to give broadcasters the right to use © material for “news reporting” in some circumstances.

Other exemptions allow:  a building to be freely filmed, as well as advertisements (!!!) while filming a parade;  temporary recording of a live performance (including sound) to facilitate later transmission, when broadcaster already authorized to broadcast (to be deleted within 3 days);  sound recordings owned by the broadcaster to be temporarily copied to more appropriate formats for broadcasting. 108 4. Exclusive book distributors

Book distributors with exclusive distribution agreement can prevent (?…not legible in the text) parallel imports and unauthorized distribution of books that would otherwise harm their sales. Some imports can legally slip through the net without objection from the exclusive distributors: 1 copy for use by a non-profit library,archive museum or educational institution; 2 copies for a person’s own use; any number of copies for use by a government department; any number of used books. But scientific, technical or scholarly textbooks for use for instruction in educational institutions were taken off the list… Result: since “educational institution” as used in the Act means only a non-profit institution, it seems that for-profit schools can import used textbooks without objection!

5. New or improved exceptions

Minor changes made to the current exemptions, especially with regard to newly protected matter (records, performances, broadcasts). Mainly to benefit public sector institutions. No real policy identifiable. “At times, the process resembled an auction when everyone bids for a product whose identity is known only to the auctioneer.”

(a) Classroom activities

The Act allows non-profit educational institutions, teachers and students to use material for tests and exams, copy work on to blackboards or for overhead projection, perform works live and play the radio, television or records in class. But there is no special provision for the Internet, which leaves to argument the question of whether students and faculty who access websites from the classroom or library infringe ©.

(b) Library photocopying of articles

Libraries, archives and museums can now make single photocopies of articles from newspapers and periodicals for patrons in certain cases, wothout infringing. The institution had the benefir of any fair dealing defence the patron has. The institution can photocopy defined classes of work for persons doing genuine research or private study. The allowable class is a single copy of any article published in a “scholarly, scientific or technical periodical”, but the borderline between these and the rest is vparticularly blurry.

Inter-library loans are permissible if both libraries are non-profit and based in Canada.

The Act nowhere clearly authorizes the making of a faxed or digital copy from the reprographic reproduction that alone is authorized, any more than it authorizes a library to download articles off an electronic database. 109 (c) Library collections

Another set of exemptions allows non-profit libraries, archives and museums to copy material to maintain and manage their collections. There are some requirements however, but that do not apply to copies made for “internal record-keeping and cataloguing”, “for insurance purposes or police investigations”, and “if necessary for restoration”. One may query why the exemption for copying for insurance purposes or police investigations applies only to non-profit institutions…

(d) Self-serve photocopying

Originally, non-profit educational institutions, libraries, archives and museums were exonerated from liability for infringement for having photocopying machines available on their premises for the use of patrons, so long as a notice warning off copyright infringers was posted. The Act now limits automatic exoneration to institutions that have or are negotiating a licensing arrangement with a reprographic collective. Non-licensed institutions are left with the uncertain prior law, which is probably that merely providing a photocopier for patrons to use does not make the institution an infringer just because some patron chooses to infringe, any more than a dealer who sells a gun authorizes the buyer to commit mayhem.

(e) Archives

A special exemption for non-profit archives was first introduced in committee and slightly amended later. It allows archives to make a single copy of any sort of unpublished work for someone doing research or private study. However, the depositor/copyright holder has the right to restrict copying, and the archive must comply until copyright expires.

Corporate archives, such as those kept by Bell Telephone or the Hudson Bay Co. may be outside the exemption because they probably cannot claim to be non-profit. Broadcasters, sound recordings or performances are not exempted.

In some cases (ex. correspondence between depositor and various people, possibly with photographs), it could be difficult to decide who owns ©. Archives will often have to guess and hope for the best.

(f) Perceptual disabilities

The original exceptions in Bill C-32 were narrow. They covered people who could not see or comprehend material well, but not those with hearing disabilities. The exception was widened in committee to include deaf as well as blind folk. Vaver criticizes the wording ot the sections regarding this subject; it seems that the amendments do not respond to reality. One anomaly pointed out is that the Act mentions works specially designed for a person’s needs, not preferences, therefore a person with bad eyesight who prefers to listen to tapes instead of reading large print books could not request a talking version of a book to be made. Vaver mentions that some of the anomalies may be resolved be interpreting the Act consistently with the principles of equality mandated by the Canadian Charter of Rights and Freedoms. 110

6. Remedy reform

The old remedy allowed © owners to seize and sell infringing copies, and to recover almost the entire market price of the infringer’s sold inventory. The new Act abolishes this remedy. Following the U.S., Canada allows “statutory damages”, as well as punitive damages, on which there is no ceiling; they are usually between $5,000 and $50,000, but an award of $15,000,000 was made in a patent infringement case.

Collective societies have a new made-in-Canada debt collection remedy: they can, with a few exceptions, recover 3 to 10 times the amount of any royalty a licensee has omitted to pay.

7. Photographs

The rule used to be that the first © owner of a commissioned photograph made for valuable consideration was the customer. Now, this will only apply where “the consideration was paid”. The author will therefore be the first copyright owner of a commissioned work until he is paid. When paid, the first ownership will “move” to the customer, thus resulting in two different “first owners”…Strange!

When the author is a flesh-and-blood person, the 50-year term will be retrospectively increased in some cases to the author’s life plus 50 years. But who qualifies as the author remains the same: the person who owned the physical negative or photograph at the time it was made.

8. Tehcnical reforms

Some clarifications or amendments make © more marketable or increase the power of © holders:

 © in unpublished works: life of the author plus 50 years;  exclusive licensees and exclusive sub-licensees (if written appointment) will be able to sur for infringement;  © transfers include right to sue for past infringements;  © can now be divided nore finely;  3-year period for bringing infringement proceedings runs from when the © holder discovers or should have discovered the wrong;  infringement proceedings may be brought by application instead of action.

9. Conclusion

Back to the beginning: if Vaver had decided on the amendments and drafted them himself, everything would have been much better…He talks about “100 pages of dense text” and says “It starts off clearly enough. The first line says: ‘An Act to amend the Copyright Act…’ From there, it is all downhill.” The Act’s language is not user-friendly and is often infuriatingly vague. “ a new coat of paint over the rusted bodywork…” 111 1. Historical Background

R.B. Bettig, Critical Perspectives on the History and Philosophy of Copyright (p.116 vol.II)

In the 16th century, copyright reflected the existence of newly developed print technology that allowed the “fixing” of literary works in a tangible medium (books) that could be mass produced on an unprecedented scale and then sold in the marketplace. IP laws facilitated the private appropriation of intellectual creativity, which is always based upon socially constructed knowledge and culture, in the same way that property laws in general served as the basis for the commodification of tangible property.

It has been argued that in his treatises, John Locke postulated a theory of an intellectual property right in the author: the author has a natural right in his work since he had expended his own labor in creating it. His attempt to shift the rights of intellectual property from a statutory right to a naturally given right meant in practical terms a shift of the right from the publisher to the author. Some authors did however argued that it is doubtful that Locke had intellectual creativity in mind when articulating his labor theory of property.

It is interesting to note that while Locke is struggling against the publishing monopolies that existed at that time, he is also, consequently, advancing the law of copyrights which gives the authors a certain monopoly on their creative works.

Copyright historians generally cite the Statute of Ann as the first modern copyright law. According to Ploman and Hamilton, the Statute concerned the right to copy and no more. The protection afforded was against the piracy of printed works. There was nothing in this Statute that touched upon the creative or moral rights of the author. The right protected was a property right.

In Millar v. Taylor (1769), the House of Lords recognized the common law right of authors and concluded that the Statute of Queen Anne simply provided extra protection upon publication of a work. This decision had the effect of firmly fixing the idea of copyright as an author’s right but also supported the publishers’ claim to perpetual copyrights; thus it preserved their monopoly.

In Donaldson v. Beckett (1774), the House of Lords again recognized the author’s natural copyright at common law but decided that the Statute of Queen Anne supplanted this right with a statutory right. Consequently, in the Anglo-American tradition, copyrights are governed by statute, and once a work is published it becomes subject to the limits established by the law.

In Wheaton v. Peters (1834), the US Supreme Court, which drew heavily from Donaldson, concluded that copyright was a statutory right created by Congress and was secured by following the formalities of registration, notice, and deposit. The Court 112 thereby rejected the notion that an inventor or author had a perpetual right in the patent or copyright as well as the idea that certain legal rights of authors are retained even after publication. In reaching its decision, the Corut framed copyright litigation as a matter of protecting the copyright owner’s exclusive rights to exploit and profit from effort and risk put into the work versus protecting public access to literary creativity.

By concluding that copyright was a statutory right of limited duration, the US Supreme Court struck against the notion of unlimited monopoly that a natural, perpetual right implied. Thus, once the statutory period of protection expired, the published, copyrighted works passed into the public domain. An author did retain a common law copyright, but only as long as the work remained unpublished.

2. Justifications for Copyright

Class Notes:

 Several types of justification for IP: - natural rights (just dessert for crreative labour w/out wrong), rights - freedom, autonomy, individual privacy - utility/efficiency

 CR offers wider protection than Tmk b/c the scope of human creativity is wider than what definition of Tmk will protect.

Article: T.J. Brennan, "Copyright Property and the Right to Deny" (I-127)

The "uneasy" case for copyright as property. No compelling reason to force copyright and property into separate philosophical, economic, & legal realms: copyright does not go too far in turning information into property. Copyrighted work should be regarded as property subject to public interest restrictions on exclusion and alienability that are already imposed on "naïve" property.

Property itself, as an institution, is justifiable. Locke's intrinsic value theory which perceives property as an extension of the self and justifies property as a concept on the basis that a man is entitled to appropriate the fruits of his labour, is not helpful - it has difficulty accounting for joint property/collective production without compromising the very intrinsic values of integrity/autonomy that justify granting a property right in the first place. The Coasian instrumental value theory works, however. It posits that property facilitates persons' abilities to secure efficiency by providing the excludability and alienability for consensual transactions. Read: it is an efficiency justification - property enables people to move ownership around until 113 all agreeable outcomes have been reached. Property is justified via its worth and not the claims of the property holder himself. Copyright is justifiable on same grounds.

The objections to copyright as property are threefold.

The LEGAL objection is that copyright looks like an artifact - that is while it seems natural to own land/objects, it does not seem natural to own ephemera like information. This is a reflection, in part, of the fact that property is based on the 'bottom-up' developed common law while copyright is a creature of statute imposed for public policy purposes rather than for needs created by way of individual social/economic interaction. As Dworkin notes, if one perceives common law ownership as connected to natural/fundamental rights, as opposed to statutory information rights which carry no such credential, attributing property rights to copyrighted work confers a moral status on such works that they do not deserve. In other words, information per se can and should not be owned in the same manner as "naïve" property like land/objects. Thus it is more appropriate to see copyright as an attenuated property right b/c but for the state it would not exist and it is subject to restrictions on applicability, excludability, and duration to which "naïve" property is not.

The ECONOMIC objection is that copyrighted works are public goods and equating copyright with a property right may result in too little access to the copyrighted product on a cost-benefit test. Possession of information is not rivalrous as opposed to say, possession of a car - ie. one's possession does not imply that others cannot possess it. This means that the added cost of allowing an additional person to consume such a public good is zero and anyone who values its use/consumption should be able to consume it for free. Copyright, by allowing the holder to exclude those unwilling to pay a chosen price, excludes this additional consumption. It makes the work available at an inefficiently high price. Granted, there remains the justification that creators are far less likely to produce these public goods if uncompensated for their time and trouble. The cost-benefit result in question, however, does underline why copyright is considered a necessary evil.

The SOCIAL objection is that treating a copyrighted work like property grants exclusive control to material crucial to the fuctioning of our political systems and the development of our culture and ourselves and that this is vs. the public good.

At their core, these three objections essentially perceive treating copyright as property as problematic on the basis that property cannot be modified to take such considerations into account. This basis is not supported in fact. Firstly, statutory copyright law does not possess characteristic attenuations that property law lacks. The latter has similar restrictions re alienability, duration, etc. Such regulations of copyrighted work need not deny property status to that work - rather, limiting the extent to which owners can charge inordinately high prices for their property is consistent with regarding copyrighted works as property. Furthermore, public utility regulation and civil rights law underline the fact that reduction of the level of freedom and profit a property owner may enjoy does not imply that the thing owned should not be regarded as property (eg. land developer req'd to set aside housing for low income families). 114

Granted, treating copyright as property leads to some undesirable realities like the right of the owner to exclude other from the good. However, this is not unique to copyrighted work but standard throughout the institution of private property. The potential for suppression of the desirable use of the work (eg. by others re uses the author did not intended to pursue), criticism, and open debate can be answered under the rubric of property. It is not overly problematic to presume that unintended uses are covered by copyright. The potential user can always negotiate for the right to use and if the Coasian theory holds, the licence will be granted whenever the gains to the user exceed the costs to the copyright holder. The economic outlook does support exemptions for certain uses, however, such as the right to criticize.

Article: D. Vaver, "Rejuvenating Copyright" (I-148)

Copyright is an incredibly powerful institution. Its siblings of trademark, patent, etc. are pale contenders in the protectionist stakes. It is the very attractiveness of copyright, however, that threatens it as an institution. There has developed a phenomenon of "rent-seeking" where everyone wants their activity protected by copyright and the legislatures take all comers aboard. What makes copyright a legitimate instrument of social policy is the idea that the individual deserves the opportunity of developing personally and gaining economically from the product of his or her intellectual labour, and what is good for the individual is equally good for society. By the end of the 20th century this notion introduced for books nearly 3 centuries ago has become totally degraded. The idea that anything beyond a "single straight line drawn with a ruler" is protectible by copyright as an original artistic work is indicative. Virtually anything drawn, written down, crafted, composed, or recorded in som form is offered copyright protection and overlap with trademarks and other IP instruments is permitted. The extension of copyright to the commercial domain has undermined the legitimacy of the institution. Everything is allowed and everything crudely lumped together into ill-fitting categories. Granted, few would deny that some stimulus and protection has to be offered in some commercial sectors to encourage production of goods that are easily appropriable, where copying avoids the producer's initial investment and deprives him of the opportunity to recoup and fairly profit. The question is what stimulus and what protection should be offered. The policy instrument of zero-sum budgeting offers a measured response and a way of regaining control of the copyright process. It is a return to the wisdom of the step by step, incremental approach of yesteryear which posited that there are as many laws of copyright as there are subject-matters deserving protection. It starts by presuming that the work should have no protection. A solid factual case would then be needed before protection was extended. An open mind should be maintained re duration and type of protection and the approach not simply viewed as a way of returning to the status quo ante. The result: a contoured copyright system may regain the moral centre it needs if it is to retain public respect and compliance. 115 3. The International Aspect

H.C. Hansen, International Copyright: An Unorthodox Analysis

I. INTRODUCTION

 Until recently, copyright laws throughout the world were domestically oriented. Copyright law is territorial. - Each nation determines the scope of the protection and rights subject only to bilateral and multilateral agreements, which, before the Uruguay Round of the GATT negotiations and the adoption of the agreement on Trade-Related Aspects of Intellectual Property (TRIPS), were essentially unenforceable.  Overall there were two systems: (1) the Anglo-American so-called economic system; and (2) the French and Continental authors rights system with its concomitant fascination with moral rights.

M.A. Hamilton, The TRIPS Agreement: Imperialistic, Outdated and Overprotective

I. INTRODUCTION

 Far from being limited to trade relations, correcting the international balance of trade, or lowering customs trade barriers, TRIPS attempts to remake international copyright law in the image of Western copyright law.

II. COPYRIGHT NORMS AND FREEDOM IMPERIALISM

 The TRIPS agreement is the first giant step toward globalization of intellectual property rights.  With 117 signatory countries from around the world, TRIPS is ambitious. It is also old- fashioned, Western-style imperialism. One commentator describes the TRIPS agreement as impolite. This description is too polite. - Despite its innocuous name, TRIPS does not merely further trade relations between the 117 signatories. Rather, TRIPS imposes a Western intellectual property system across the board  which is to say that it imposes presuppositions about human value, effort, and reward. And it has appeared without serious public debate over its latent political mission.  To believe in the Western version of copyright rights, one must first accept some version of the following canon: 116 (1) Individualism: Individual human creative effort is valuable. (2) Reward: Society should single out original products of expression by granting their owners proprietary rights over them. Reward is determined according to the qualities of the product; mere effort is not sufficient to deserve such reward. (3) Commodification: Products should be capable of being disassociated from their producers and sent through the stream of commerce.  By supporting the TRIPS Agreement, the United States is exporting and imposing Protestant-based capitalism.  A people must value individual achievement and believe in the appropriateness of change and originality if it is going to concede to and adopt a Western-style intellectual property regime. - Indeed, their is an intimate link between respect for individual human rights and respect for a copyright system that values and promotes individual human creative achievement.  The TRIPS Agreement, in addition to transplanting an anti-authoritarian intellectual property ethos, has sought to establish a worldwide and lively free market in intellectual property goods.

III. TRIPS IN THE ON-LINE ERA: OUTDATED AND OVERPROTECTIVE

 The on-line era, with its worldwide communications bridge, massive access capacity, and private home receipt of mountains of information, questions the existing fences and gates of intellectual property ownership and invites a reassessment of their proper placement in virtual space.

A) Universal Access Norms vs. Copyright Norms on GII

 The emerging ethos of the GII revolves around two issues: (1) Information (2) Access  Compelling policy concerns line up on both sides of the debate over copyright protection on GII: (1) On the one side, there is the value of universal access to information. (2) On the other side of the debate stands copyright law.  In the U.S. system, copyright law protects original works of authorship while providing incentives to disseminate those works to the general public. - Economic copyright permits authors to obtain monetary remedies or injunctive relief from those who substantially copy their works (in whole or in part)  Under the European model of intellectual property, copyright is a moral right protecting personality, which justifies remuneration to authors and some control over the work even after it has been sold to the public.  The goal of information access challenges copyright norms. 117 - First, information is a vague and therefore potentially misleading term. Copyright does not protect the information content of expression. Rather, it only protects the particular expression. - Secondly, copyright law also conflicts with the access norm in another way. Copyright law permits individuals through private rights of action to block access to work unless permission has been obtained and remuneration paid for the access.  Copyright law should not be abandoned in the drive to realize a worldwide system of communication and cultural exchange. - While often thought to be at odds, freedom of expression, provision of information and copyright law serve similar goals. (1) They operate together to increase the individuals capacity to challenge governments temptation to tyranny. (2) They also maximize the capacity of people to maintain their independence by constructing certain private power structures through religion, art, philosophy, politics and family. - Copyright provides a reward to those who contribute original works of authorship to the cultural store. Such original works are worthy of reward because they generate and challenge discussion, perspectives and world views.

B) The Free Use Zone and Its Construction in the On-line Era

1. Hackers

 Whatever the means of copying, copyright law erects property boundaries around intangible expression so that it can be commodified, disseminated and shared. - Those statutorily constructed barriers are more necessary than ever in the on-line universe with its copying facility. - A properly functioning copyright system rewards original expression and provides sufficient protection against unauthorized use to encourage authors to release their works into the stream of commerce. - Abandoning copyright protection in the face of the prevalent universal access norms ironically would remove incentives to disseminate works.  Technology makes copying an evil that is difficult to police.

5. Summary

 To ensure the widest possible dissemination of creative works and fair remuneration to authors, GII policymakers face two tasks: (1) to foster means of ensuring that copyright owners can enforce their copyrights, such as private collective agencies and technological means of tracing use, and - The free market is the most desirable means of accomplishing this first objective. 118 (2) to protect a free use zone that prevents copyright owners from transforming their limited monopolies into absolute monopolies. - The second objective will require domestic government and international action.  A cursory glance might suggest that universal access norms and copyright law are in irreconcilable conflict, that universal access is superficially more important than copyright protection, and therefore copyright protection should be abandoned. A more careful analysis, however, reveals that copyright law is one of the tools to ensure that there is a steady supply of original works of authorship released into the on-line stream of commerce.

4. Copyright on the Internet

D.M. Cameron, IP on the I-Way

I. INTRODUCTION

 The most useful legal rights on the Internet are copyright and trademark rights. - These two areas of law represent the most inexpensive and most easily enforced forms of intellectual property protection.

2.0 Copyright

2.2 General Principles

Originality  A work must be original to qualify for copyright but the standard of originality is not particularly high. - Usually a work will be original where it involves the creators own expression rather than copying from another source.

Compilations  In the case of compilations, the U.S. Supreme Court has ruled that a compilation must show originality in either the arrangement or the selection of its data (Feist Publications Inc. v. Rural Telephone Service Company Inc.).  Traditionally, Canadian and English courts have provided a higher level of protection to compilations; they have protected compilations on the basis of the labour spent by the creator rather than the originality of the work, which is sometimes referred to as the sweat of the brow test. - However, the definition of a compilation included in the Canadian Copyright Act in 1993 suggests that selection and arrangement of data are the key elements necessary to qualify for copyright protection. 119  In a recent Canadian case, Tele-Direct (Publications) Inc. v. American Business Information Inc., the court considered whether the Yellow Pages produced by the plaintiff could be protected under the Copyright Act as a compilation. The court focused on the particular facts of the case, concluding that Tele-Direct exercised a minimal degree of skill, judgment or labour in its overall arrangement which was insufficient to support a claim of originality in the compilation so as to warrant copyright protection.

Idea vs. Expression  A basic principle of copyright is that it will protect original expression but will not protect the general ideas or facts being expressed. - For example, in the case of a compilation of facts, copyright will prevent others from copying a substantial portion of the compilation or copying the form in which the facts are expressed. However, copyright will not prevent others from taking a particular fact from the compilation, expressing it in their own manner, and then using it for their own purposes.  Copyright does protect ideas in the limited sense that it will protect certain levels of abstraction of a work, such as the plot of a movie or book. - In the case of software, courts have ruled that copyright will protect the structure, sequence and organization of a program. - In order to qualify for protection, the abstraction must be so closely tied to the work that it may be considered part of the expression of the work.  The U.S. jurist Learned Hand proposed an influential levels of abstraction test: [Must compare] the similarities between the two works as a series of abstractions of increasing generality. If the similarities pass beyond the point of mere ideas into the realm of expression, there is infringement. The line between the idea and the expression of a work is difficult to determine and must be done on a case-by-case basis.

Copyright Act  To receive protection under the Canadian Copyright Act, the work must either be created in Canada or be created by a citizen of a group of countries who have agreed to offer reciprocal rights to Canadian authors in their countries. - Where these requirements are met, copyright arises automatically.  Registration of a work makes it easier to prove the authors copyright at a later date, but registration is not necessary in order for copyright to arise.

2.3 Copyright Infringement

Infringement  Copyright prevents the copying of all or a substantial part of the work.  Whether a portion of a work is substantial is a subjective question, which includes a consideration of both the (1) quality and the (2) quantity of the portion. 120 - There can be copyright infringement where only a small portion of the work is copied but the portion is of great qualitative importance in the original.  The intention of the defendant (person who copied) is irrelevant to the question whether infringement occurred.  There are two main types of copyright infringement: (1) Direct infringement - where the defendant has copied the whole or a substantial part of the work. (2) Contributory infringement - where the defendant has authorized another to make infringing copies of the work. - What amounts to authorizing an other to make infringing copies will depend on the facts of each case. However, merely making a method of copying available to another person may not amount to contributory infringement.

Limited Exceptions  Some limited exceptions to use copyright material without authorization is provided for by statute. - In Canada, section 27 of the Copyright Act sets out the fair dealing defence, which applies to any fair dealing with any work for the purposes of private study [or] research and any fair dealing with any work for the purposes of criticism, review or newspaper summary, if (i) the source, and (ii) the authors name, if given in the source, are mentioned. - In the United States, a more flexible and sophisticated fair use defence exists. The U.S. Copyright Act states that whether a particular use is fair use will be determined on the basis of four factors: (1) the purpose of the use; (2) the nature of the copyrighted work; (3) the amount used; and (4) the effect of the use on the commercial market for the original.

2.5 Moral Rights

 The Canadian Copyright Act grants moral rights to the author to protect the integrity of the work and the authors reputation.  Authors may assert their moral rights when a work is distorted, mutilated or otherwise modified or used in association with a product, service, cause or institution in a way that would prejudice their reputation.  Moral rights also give authors the right to have their names or pseudonyms associated with their works or, alternatively, to remain anonymous.  Moral rights exist independently of copyright and cannot be assigned to another party by the author (other than by will). However, moral rights can be waived, in whole or in part, by the author.  Moral rights appear to be intended primarily for works with a high degree of artistic expression. - Nevertheless, moral rights apply to all works protected by copyright, including commercial works such as computer programs. 121 2.6 Licensing Copyright and Moral Rights

 Due to the nature of intellectual property rights, the person who proposes to use a work in a particular way must have permission from the copyright owner which applies to the situation.

(B) WHAT IS PROTECTED?

1. Literary Works

(i) General

Deforges et Ramsay c. Trust Company Bank et Consort Mitchell

Facts : Deforges publishes in 1982 a book in three volumes, the first of which, La bicyclette bleue (BB), is allegedly a literary counterfeit of Margaret Mitchell’s famous Gone with the Wind (GW). The main part of BB is exactly the same story as the beginning of GW and the characters are extremely similar, the major difference being that BB takes place in France during World War Two while GW takes place in the U.S. during the Secession War. The end of BB and the other two volumes have nothing to do with GW and the characters evolve very differently.

Appellant’s arguments: Deforges argues that : (a) the three volumes must be taken as a whole and that they do not as a whole constitute a counterfeit of GW ; (b) the similarities between the two novels are limited and are a part of literary tradition ; (c) the borrowed elements are allowed because the two novels’ characters and plot are different or because BB is a “pastiche” of GW.

Issue : Is BB a literary counterfeit of GW?

Judgment : No. The Cour d’appel de Versailles, Chambre Civiles Réunies reverses the judgment of the Cour de Cassation and grants the appeal.

Ratio : Literary creation is the way an author uses certain characters, in a certain story, placed in a certain context ; it is each of these elements in relation with the other two that defines what cannot be reproduced without the author’s consent. Characters acting in a certain historical or social context in fact represent the author’s view of that context. 122 The characters and plot of BB are important only because of the way they are framed in the historical context of WWII. They seek only to represent the author’s view of the French mentality in that era. They are thus presented very differently from GW. Furthermore, BB is characterized by a sensuality that is not present in GW. BB is not a reproduction or a counterfeit of GW.

Margaret Mitchell’s heirs argue that their moral right has been violated. The Court rules that BB does not lack respect re: Mitchell’s name or book, on the contrary.

Ravenscroft v. Herbert and New English Library Limited

Facts: Ravenscroft wrote a non-fiction book called The Spear of Destiny. It tells the story of the Hapsburg spear and mixes historical facts with the result of meditations and encounters with Hitler. Herbert wrote a fiction thriller called The Spear, in which he uses parts of Ravenscroft’s book to make his story more realistic by adding historical elements. He acknowledges that he took facts from Ravenscroft’s book and re-wrote them to a certain extent. Where the wording is identical, he says it is because there was no other way of saying what he wanted.

Issue: Has there been a substantial copying amounting to an infringement of Ravenscroft’s copyright?

Judgment: Yes. The Court finds in favour of the plaintiff.

Ratio: The owner of a copyright has by statute the right to reproduce the work in any material form, including a substantial part thereof. There are thus two issues that need to be resolved : (1) was there copying? (2) was a substantial part of Ravenscroft’s work copied? There was indeed copying. Was it substantial?

Copyright protects skills and labour relating to the expression of ideas, but also to their selection and compilation. The facts may be available to everybody, but the author’s work in putting them together is protected.

But the author does not have a monopoly over the facts. Copyright law will apply differently to a history book and to a novel, because it is imputed that the author of a history book had the intention that the reader would use his newly acquired knowledge.

However, Ravenscroft’s book is not a typical historical work because it is not a chronology, and it mixes facts and philosophy. It represents the author’s insight on history. The Court finds that Herbert used parts of Ravenscroft’s book to save himself labour ; that the two books are competing to a certain extent ; that there was substantial copying. 123 Professor Lametti: This case is a good example of the application of © to historical facts. You can’t have © in an idea, you can only have © in the manifestation of an idea. This case shows that while you cannot have copyright in a historical fact, somebody’s particular expression of those facts could however be copyrightable. Key principle: you cannot at liberty use somebody else's labour. Is it an appropriation here of Raven’s work? It could probably have been different if, for instance, the author had put the citation right under the prologue and had not merely aknowledged, at the end, that the book was inspired on the facts from the plaintiff's book..

Lametti suggested that a reference to an academic’s argument on a given topic is not an infringement (such an argument is not © but cannot however be copied integrally). He also suggested that the volume and the uniqueness will be the criteria that will push you over the treshold of substantial infringement.

(ii) Particular Cases a. Computer Programs

Apple Computer Inc. v. Mackintosh Computers Ltd., [1990] S.C.C.

Facts : One of Apple’s programs is written in two forms : in a code of letters, numbers and symbols (assembly language) and in a binary code of 0’s and 1’s etched in the glass of a silicon chip. Mackintosh Computers copied the program contained in the silicon chip. Apple owns a copyright on the program written in assembly language.

Issue : Is the program in the silicon chip copyrightable? At issue is the interpretation of s. 3(1) of the Copyright Act, which says that copyright includes the sole right (a) to produce, reproduce, perform or publish any translation of the work; ...... (d) in the case of a literary, dramatic, or musical work, to make any record, perforated roll, cinematograph film, or other contrivance by means of which the work may b mechanically performed or delivered; Judgment : Yes. Mackintosh infringed Apple’s copyright.

Ratio : The information in the silicon chip is an exact reproduction of the program and is thus protected by the Copyright Act. Computer programs constitute a unique form of expression and are not a 124 merger between expression and idea. It is not necessary to decide whether the programs are a translation under s. 3(1)(a) or a contrivance under s. 3(1)(d).

Professor Lametti: Several level of computer language. Lower  higher level language. At the highest level, this is the actual translation into language; at the medium level, it is the assembling system; at the lowest level, this is the binary mode. Mackintosh copies the lowest level on a chip. Are we in the realm of technicalities (realm of patent)? Is it more analogous to a process than it is with a literary work? In that respect, Reid J. refers to s.3(1)(d).

How does one caracterise the assembly language (is it subject to ©)?

Higher = Go To Assembly = LD# HEX. CODE = AO Binary = 10100000

The higher level was characterized as computer language which could be ©. Computer language was held to be as protected as any other language. This is the starting point for Reid J. decision. This amount to a literary work and, consequently, it could be ©.

Wrt assembly level, we must turn to s.3.1(a) © Act  any translation. The assembly level could be thought as a translation and so on and so forth with Hex. Code and binary code. An analogy was made to morse code (translation of a morse code)  still retain the character of the original work. All these level correspond to the same version.

What would be a second option? Right to reproduce. At the CA, 3 judges are confirming the outcome of Reid J. Only 1 judge says that translation is a possibility. They relied mostly on reproduction. Hughesson J.’s argument to the effect that all the jargon here is troubling  words which refers to human beings (orders for computers…). It is not a way in which the same type of relationship in which we communicate one with another. He still come to the conclusion that it is reproduction.

SCC : Cory J. isn’t absolutely clear about who’s reasons are endorsed. Cory seems to endorse both set of reasons of Reid and the CA judges. Cory eludes to an Australian case that comes into play after Reid renders its decision. The Australian court says that this is a whole functioning process. It appears to be static literary work  however, we must look at the whole process  it is a functioning process.

Should this be the static expression of a literary work or is it rather a functionning dynamic process that makes the computer work? Hughesson dealing with tralnslation example. Australian case extract : program is not visible by the human eye… In other words, the question becomes what part of IP law should be used to protect computer chips? Should we use industrial designs? Patents? 125 Should we draw the line on what we consider to be communication : is it all form of communication (including, to the extreme, the translation of DNA) or is it only communication used by human…).

All of these cases says that wrt computer chips, we are almost mingling the notion expression of idea and the idea itself. Lametti is of the view that computer chips are rather functional (but this is not reflected clearly in cases law). In the example of computer games, the graphics and texts are © but not the actual commands given by the software to the computer.

Matrox Electronic Systems Ltd. v. Gaudreau, [1993] Qué. C.S.

Facts : The defendants are former employees of the plaintiff. The plaintiff claims that the defendants have used a computer program in violation of its exclusive copyright.

Issue : Is the defendant’s program a substantial use of a literary work? Section 5(1) of the Copyright Act provides that copyright subsists in every original copyright work ; section 2 defines literary work as including computer programs ; and computer programs are defined as ...a set of instructions or statements, expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result;

Judgment : There is no copyright infringement.

Ratio : Copyright protects the form of expression of computer programs, but not the idea they embody. Computer programs are a set of instructions that can exist in different codes on disk or in chips and that are copyrightable. All programs have in common the need to balance certain objectives like speed, efficiency, space, etc. Their originality lies in the way each balances these elements. Patent law is available to protect the idea embodied in computer programs. Copyright and patent protection should not be interpreted as overlapping.

Here, the Court rules that the plaintiff has failed to prove that any part of the “structure, sequence and organization” of his product is copyrightable. The Court seems to think that copyright law is not perfectly suited to deal with computer programming. b. Compilations

Copyright Act, s. 2.1: 126

(1) A compilation containing two or more of the categories of literary, dramatic, muscial or articstic works shall be deemed to be a compilation of the category making up the most substantial part of the compilation.

(2) The mere fact that a work is included in a compilation does not increase, decrease or otherwise affect the protection conferred by this Act in respect of the copyright in the work or the moral rights in respect of the work.

Cases and Notes

- Note that our beloved Casebook is protected by copyright since it is a compilation which is original (it required skill and labour and a Scottish exchange student to put together). -

B.C. Jockey Club v. Standen (handout I)

The appeal is upheld: the appellant infringed the copyright.

Facts:

- At trial, the appellant (creator of the Special News) was found to have infringed the copyright of the respondent's "Overnight" racetrack publication. Overnight required a "great deal of work" and included information useful for horse race bettors. It required skill, knowledge, experience, time and expense in order to accumulate the information. - It was agreed that a copyright subsisted in the respondent's publication. - The defendant stated that he was entitled to use the information and ideas contained in the appellant's publication, and that he was merely expressing those ideas in his own style and form. - The defendant claimed that copyright exists only in the literary form in which the information and ideas are expressed, and not in the information and ideas themselves.

Court:

- The form of the publications are not at all similar, and the Special News had a great deal of additional information using the appellants skill and experience. - Because of this great deal of work by the defendant, the Prof thinks that the sweat of the brow principle was infringed. We value the plaintiffs work but not that of the defendant? - Nevertheless, the court found that there was infringement since the appellant made a substantial use of all the essential facts compiled by the club, thereby appropriating the skill, judgment, work and knowledge of the respondent. - The court quotes the author Fox, who states that although there is no copyright in ideas as such, we must remember that the word ideas is limited. It does not include dramatic scenes and 127 incidents nor can it include the facts included in a compilation when those facts are novel and are the result of independent research and labour. (p.287) - Competition between publications is not decisive of infringement. Nevertheless, the court can consider this factor in determining infringement. There was no competition here. - Hutcheon J.A. agreed with Macdonald J., and added that material can sometimes become part of the public domain because of a statutory requirement to publish (I guess like a companys annual financial report to a security commission) or because of inherent circumstances and public policy (like whistle-blowing such as discovering an admission or fraud?).

Pool v. Pawar (handout I)

- Pool (plaintiff) thinks Pawar (def) is infringing the copyright he thinks he has over a real estate list he was making. - The facts are very strange here, and we eventually discover that neither the plaintiff nor the defendant actually created the original compilations. - As such, Pool did not create an original compilation which could be subject to a copyright. He did not use knowledge, skill and experience in selecting the information which appears in his publication. In preparing his publication, Pool used a sample sheet given to him by a third party. - Even though Pawar used Pools information, Pools action fails because his work was not original either.

U & R Tax Services v. H & R Block (handout I)

Facts

- The plaintiff UR and defendant Block were competitors in the tax business. - UR anticipated that the government would be late in making certain new tax forms. - Using their skill and judgment, they created a draft form that was close to the governments design. The government eventually marked up a copy of URs draft. - UR has a registered copyright in the work.

Court

- The court accepted the principle that copyright protection is given only where the work is original. Originality could come from industriousness (sweat of the brow) as opposed to creativity. - The use of information generally available will be protected if it was the result of skill, labour or judgment, not copied from others, and even though others can make their own compilation using the same material. 128 - The defendant admitted to copying some parts, so the question was how substantial that copying was. - In order to define what was substantial, the court focused on quality rather than quantity. - In general, substantial depends on: - The quality and quantity of the material taken; - The extent to which the copying hampered the plaintiffs activities and value of the copyright; - Whether the material was subject to a copyright; - Whether the material was copied in order to save time and effort; - Whether the material was used in a similar fashion as the plaintiffs. - The plaintiff argued (in vain) that it was industry practice to copy forms. - Finally, in addition to copying, a plaintiff must prove access to the copied work for there to be infringement. (p.269) If it is an independent creation, there is no infringement. = The Prof thinks this decision kind of sucks because there were only a certain number of ways the tax information could eventually be organized. Do we value first organize, first serve? Should copyright be the basis for this claim?

Tele-Direct (Publications) v. American Business Information Inc. (I, 197)

Facts:

- TD (plaintiff) compiled and published "Yellow Pages" using basic subscriber information obtained from the telephone company. In addition to including the basic subscriber information, TD's representatives would call subscribers to verify the accuracy of the info while also trying to sell extra services ("enhancements") such as additional lines, pictures, ads, etc. in the directory. In the end, 65% of listings were enhanced in such a way due to the sales pitches by TD's reps. Very often, however, the information would be identical to the basic subscriber information received from the telephone company. - TD arranged the listings under "headings", most of which were commonly used in telephone directories made by other companies. - ABI (defendant) was a database company which compiled information from various sources, including the yellow page directories. The business directories used information from TD's directories without using the "enhancements" which TD had added. - TD claimed that it had a copyright in the "get-up" or overall arrangement of its directories, and a copyright in the compilation of the information in those directories.

Court:

- There was no copyright infringement.

- In order for a compilation to warrant copyright protection, one must have a claim of "originality". The originality of work depends on the "work, taste and discretion that has entered into the composition." (p.208) Compilations in particular depend on the degree to which the 129 author exercised skill, judgment, or labour, in the overall arrangement. The court found that there was minimal skill involved in making the sales pitches "when considered in the context of overall arrangement of the compiled information". The headings used by TD were also commonplace in the industry.

- In the present case, the court found that even if TD had a copyright in the compilation, ABI did not infringe it because there was insufficient similarity between the works. The court stated that infringement occurs where there is "substantial similarity" between the works in question. In determining whether there is substantial similarity, the court excludes from consideration the portion of the work which are not protected by copyright. The court stated that there was no "objective similarity" since the ABI directory did not use the graphics or ads of TD. Also, ABI used mostly the basic subscriber information, and arranged this information according to the commonplace method of the industry.

- Another important consideration in determining the question of substantial similarity is whether the two works are in competition with one another (no). In fact, TD could not prove that it lost sales as a result of the activities of ABI.

- A final factor in determining substantial similarity is resemblance. The court found that an average lay person would observe no resemblance between the directories (ABI d/n use TD's ads or graphics).

2. Dramatic Works 2. “dramatic work” includes a) any piece of recitation, choreographic work or mime, the scenic arrangement or acting form of which is fixed in writing or otherwise, b) any cinematographic work, and c) any compilation of dramatic works;

In the definition of “choreographic work” in s. 2, whether or not the work has a story line is irrelevant. Lametti says this probably applies to other kinds of dramatic works.

Ad lib performances (e.g. game shows, mimes etc.) didn’t used to be protected because they are not “fixed in writing” but Lametti says that in the Canadian context, they will probably be protected if they are subsequently written down.

Canadian Admiral Corp. Ltd. v. Rediffusion [1954] Exchequer Court (HO)

Facts: CA (the plaintiff) bought the exclusive rights to live telecasts of Alouettes “home” games, as well as the exclusive right to televise films of the “away” games. R (the defendant), a cable company, managed to rebroadcast the games over its cable network to its subscribers and to its showroom and sales office.

Issues: 130 1) Is there a copyright in the live telecast? NO 2) Is there a copyright in the filmed “away” games? YES

Ratio: Cameron J. • Copyright is purely statutory right, which means that “no matter how ‘piratical’ the taking by one person of the work of another may appear to be, such taking cannot be an infringement of the rights of the latter unless copyright exists in that ‘work’ under the provisions of s. 3.”

Live telecasts: i) Is it a “dramatic work”? No. • “Dramatic work” as defined by s. 2, which requires that the piece be “fixed in writing or otherwise”: “for copyright to subsist in a ‘work’, it must be expressed to some extent at least in some material form, capable of identification and having a more or less permanent endurance.” • On the facts, it is found that the director of the telecasting had neither “fixed” anything nor “had anything whatever to so with the scenic arrangements of the acting form of the players participating in the football match. By the very nature of the spectacle, nothing of that sort could have been planned in advance or fixed”. Comment: Neighbouring rights such as copyright in a communication signal are now granted in the Act (s. 21), so the issue would not arise on these facts. ii) Is it a “cinematographic work” because the telecast was produced by a “process analogous to cinematography”? • No, because a telecast is transmitted through electromagnetic waves, whereas the cinematographic process involves chemicals, film and the creation of a “negative”.

Film telecasts: i) Is it a “dramatic work”? No. • A production is a dramatic or cinematographic work only if the form in which the events are represented has an original character. “The originality which is required relates to the expression of the thought. But the Act does not require that the expression must be in an original or novel form, but that the work must not be copied from another work [...]. For a work to be ‘original’, it must originate from the author; it must be a product of his labour and skill and it must be the expression of his thoughts. [...] Mere selection is not enough to create copyright.” • It was found on the facts that all that the director did “was to choose the particular play in the game -- a play in which he took no part whatsoever [...]. In the picture so seen there was no expression of his thoughts, but merely a view of what was seen by thousands of others at the playing field.” Comment: The Act no longer requires that a work be “original” for it to be a cinematographic work, the policy behind the amendment being that we don’t want judges to be arbiters of taste. ii) Is it an “artistic work”? (This did not require that the production have an original character). • Yes, because the film consists in a series of photographs. 131

3. Musical Works CA s. 1.1, 18.1

2. “musical work” means any work of music or musical composition, with or without words, and includes any compilation thereof; n.b. The definition used to be “any combination of melody and harmony”, but is now much wider.

Copyright in sound recordings 18. (1) Subject to subsection (2), the maker of a sound recording has a copyright in the sound recording, consisting of the sole right to do the following in relation to the sound recording or any substantial part thereof: a) to publish it for the first time, b) to reproduce it in any material form, and c) to rent it out, and to authorize any such acts.

Grignon v. Roussel [1991] Federal Court, trial division (c/b II, 319)

Facts: According to Grignon (the plaintiff), in 1986, he composed a work called “Chançon Numéro 7”. He distributed it to librettists, among whom Luc Plamondon, but got no response. In 1988, the singer Martine St-Clair put out a song called “Tous les juke-box”, the melody of the refrain of which was “strangely similar” to that of the plaintiff. However, the music was attributed to Roussel (the defendant) and the lyrics, to Luc Plamondon.

Issues: The following are the elements of the test applied to determine whether a plaintiff can obtain compensation for the alleged infringement of a copyright. 1) Is the plaintiff’s piece of music an original one? YES 2) Is the second work substantially the same? YES 3) Was it copied i.e. was there a causal link? YES

Ratio: 1) Originality of the work: • Burden of proof: In principle, the plaintiff must present evidence of the essential components of his action. The question is whether the plaintiff’s having registered his copyright changes this. The judge does not accept the submission that s. 53(2) creates a presumption of originality, and states that: “At the very most his copyright ... gives him a rebuttable presumption of fact.” However, it is clear from what follows that a substantial burden lies on the defendant. (The judge also notes that the parties may bring expert witnesses etc.) • “Popular songs are built upon a rather simple accepted pattern, and similarity of tone succession, which is to a certain degree inevitable in all musical compositions because of the 132 limits of the chromatic scale, is more likely to appear within this narrow pattern. Slight variation in the use of rhythm or harmony -- of accent and tempo -- may achieve originality. A musical composition is original if it is the spontaneous, unsuggested result of the author’s imagination and slight variations may achieve originality. But there must be sufficient originality to make it a new work with minor changes; it must be the result of some original or creative work.” [Editor’s note: very helpful, indeed!] • Copyright may be based on the rearrangement of existing music, a selection of common, ordinary, well-known musical materials or an adaptation for a different instrument. • On the facts, the judge finds originality and creativity, and that while the defendant had brought evidence of similar pieces, he did not establish that the plaintiff knew them.

2) Objective similarity: • There must be “sufficient objective similarity between the infringing work and the copyright work or a substantial part thereof, for the former to be properly described, not necessarily as identical with, but as a reproduction or adaptation of the latter”. • “The question of infringement is not, however, to be decided by note for note comparison, but whether the substance of the original work is taken or not. This falls to be determined by the ear as well as the eye.” i.e. it comes down to a subjective test once objective resemblances have been established • The copy was not note-for-note, but objective similarity is found based on the testimony of expert witnesses.

3) Causal connection: • The copyright work “must be the source from which the infringing work is derived. But [...] it need not be the direct source -- there must be a causal connection between the copyright work and the infringing work” i.e. the copyright work must be shown to be the cause sine qua non of the infringing work • A causal connection is found after considering a substantial amount of (circumstantial) evidence as to whether the defendant had heard the original piece & the fact that the likelihod of two such similar pieces being created independently was slim.

4. Artistic Works 2. “artistic work” includes paintings, drawings, maps, charts, plans, photographs, engravings, sculptures, works of artistic craftsmanship, architectural work, and compilations of artistic works;

Randall Homes Ltd. v. Harwood Homes Ltd. [1987] Manitoba Q.B. (c/b I, 212)

Facts: Harzan was commissioned by Randall Homes (the plaintiff) to design a tract home and created an award-winning masterpiece, unique in appearance and conception. Harwood (the defendant) had drawings prepared for another house, intentionally copying Randall’s brochure, which ended up being, if not identical, “more than substantially the same”.

Issues: Does a copyright exist in the particular design and plan? YES 133

Ratio: Ferg J. • The test is one of originality, and it is found that the house was, indeed, “distinctive and original”. In so finding, the judge stated: “Evidence indicated this house was different, was designed with flair, many distinctive features were used and its elevations, its three dimensions, produced a particularly pleasing curb appeal, that is ‘the look’.” • The standard used (based on the language of s. 2) is that of the “architectural works of art” and in this regard, the Court “need only consider the intent of the creator and its result, and need not exercise a personal aesthetic judgement. And the originality and creativeness, [...] must be key factors.” Comment: In Viceroy Homes, an analogous case, the same standard, that the architectural work have been a “work of art” was used (although the court came to a different conclusion on the facts). However, this requirement of artistry seems to have been written out of the Act.

(C) REQUIREMENTS FOR PROTECTION

1. Expression vs. Idea

Moreau v. St-Vincent (1950) Ex. Ct. (Vol. I, p. 217)

Facts • Plaintiff published and sold of a weekly sports paper called “L’Information Sportive”. • Plaintiff devised a system of distribution of prizes to subscribers for the purpose of promoting subscriptions to the paper “L’Information Sportive”. • Plaintiff received a copyright in what was called “Concours: Recrutement d’Abonnés”. • The paper was contained a weekly competition for prizes called “Concours: Recrutement d’Abonnés”. The paper was sold for 25 cents and a numbered receipt was issued to the purchaser of each copy. • The paper also contained a quiz or questionnaire relating to sports topics to be answered by the holders of subscription receipts.

• Defendant was a distributor of Plaintiff’s paper. On June 27, 1948, Defendant resigned. On the same day, he began to carry on business under the firm name “Loisir Favori”. • On May 13, 1948, Defendant registered a copyright in an original unpublished literary work called “Loisir Favori”. • On July 3, 1948, Defendant began publishing a weekly leaflet called “Mots Croisés”, which sold for 25 cents, the purchaser receiving a numbered receipt. Each issued contained a competition called “Quizz général de la publication Loisir Favori Enrg.” • Defendant solicited Plaintiff’s distributors and vendors, and even sold its paper in the same area as Plaintiff had previously found its market.

Issue 134 • Is the Defendant’s “Quizz général de la publication Loisir Favori Enrg.” a plagiarism of Plaintiff’s “Concours: Recrutement d’Abonnés” and an infringement of Plaintiff’s copyright?

Holding • The competition in Plaintiff’s paper is an idea that is in the public domain and not protected by the Act. The actual literary work, being the article or writing, is protected by the Act but was not copied by the Defendant. Therefore, there is no infringement.

Ratio (Thorson, J.) • Thorson, J. refuses to decide whether there was in fact anything original in the Plaintiff’s arrangement of elements or not. Instead, Thorson, J. proposes the following general principle (at csbk. 219):

“It is, I think, an elementary principle of copyright law that an author has no copyright in ideas but only in his expression of them. The law of copyright does not give him any monopoly in the use of the ideas with which he deals or any property in them, even if they are original. His copyright is confined to the literary work in which he has expressed them. The ideas are public property, the literary work is his own. Every one may freely adopt and use the ideas but no one may copy his literary work without his consent. (...)Thus, even if it were conceded that the plaintiff had devised a novel arrangement of elements this cannot help him for the novelty of an idea cannot be the subject of copyright protection.”

“ Just as an author has no copyright in the ideas he has expressed even although they are original, but only in his expression of them, so also no person has any copyright in an arrangement or system of scheme or method of doing a particular thing even if he devised it himself. It is only in his description or expression of it that his copyright subsists.”

• Thorson, J. concluded that the actual literary work in which the Plaintiff had a copyright was the article or writing on page 9 of each issue of “L’Information Sportive” together with the subscription receipt. It is only for this work, and not for any ideas or arrangement or system for conducting a competition expressed or described in it, that the plaintiff has any protection. To succeed, Plaintiff would need to show that his work had been copied. • Thorson, J. admits that the competitions were similar and that they made use of similar elements. And he admits that Defendant probably acquired his knowledge of the arrangement from Plaintiff and that his resignation was likely quite deliberate. But there were differences: the list of clubs were different and the results of sports contests are set out differently; Plaintiff’s questions relate to sports, while Defendant’s are of a general nature; the text of the rules and conditions are not the same.

A. Rosen, “Reconsidering the Idea/Expression Dichotomy” (1992) 26:2 U.B.C.L.R. 263 (Vol. 1, p.222)

Introduction 135 • The distinction between “idea” and “expression” has attained the status of an article of faith in copyright law, though hardly anyone seems sure what exactly, or even approximately, it is. • While the idea/expression dichotomy is necessarily vague, the author feels that there is a deeper problem here. While vagueness is not necessarily bothersome (i.e. hard to describe the distinction between a large and small object, yet the distinction is used without difficulty on a day-to-day basis), part of the opaqueness of the idea/expression dichotomy is due to the fact that it is unclear what type of distinction is at stake, and this is a problem that goes well beyond simple vagueness. • Similarly, the idea/expression dichotomy is arbitrary without being clear, definite or measurable. • The problem lies in understanding the terms “idea” and “expression” in the context of the idea/expression dichotomy.

Purpose of the Idea/Expression Dichotomy • Traditional purpose of copyright law to strike a balance between ensuring that authors, artists and other creative individuals receive just rewards for their labours, and encouraging progress in the arts for the benefit of the public at large (American law takes a more one-sided, utilitarian approach, adopting only the second part of the above - i.e. stimulate artistic creativity for the general public good). • The idea/expression dichotomy therefore fits into this traditional picture by attempting to reconcile two competing social interests: rewarding an individual’s creativity and effort (expression of idea in an original manner) while at the same time permitting the nation to enjoy the benefits and progress from the use of the same subject matter (unfettered right to use the ideas contained in creative works).

Different Meanings • In characterizing the idea/expression dichotomy, we must find a meaning that promotes the purpose of distinguishing ideas from their expression (as noted above).

Style and Content Distinction • Hettinger suggests that idea means “content of an idea” and expression means “style in which an idea is presented”; the latter is protected by copyright law, while the former is not. • The author argues that this is problematic, particularly when dealing with a more abstract and nonrepresentational work of art, where the creator’s style tends to merger with the content of the work. • Secondly, decided cases clearly indicate that copyright protection cuts across the style/content distinction; a work’s style of presentation (e.g. a compilation of material entirely in the public domain) can be subject to copyright quite as easily as its content (e.g. identical questions in two trivia games). The style/content distinction is therefore useless.

Fixed and Unfixed Ideas • Another meaning of the idea/expression dichotomy relates to the requirement that ideas must be “fixed” in a material or tangible form before they can receive copyright protection. • While fixation is an essential part of copyright law, it is not closely related to the purpose of the idea/expression dichotomy. Providing copyright protection for ideas that are entrenched in 136 enduring material form does not promote the free flow of ideas (the purpose of the idea/expression dichotomy is to ensure ideas remain in the public domain). If the idea/expression dichotomy does no more that distinguish ideas that are fixed in a relatively enduring form from those that are not, it serves only to remove an entire class of ideas - the former class - from the public domain.

Ideas and Language: The Lockean Story • Another meaning of the idea/expression dichotomy relates to the idea that ideas become “embodied” in language, and that disembodied ideas are not subject to copyright protection. • Lockean theory suggests that humans had thoughts and ideas well before they could communicate with each other by means of language. Language then became the signs of these ideas (“clothing” or “embodying” those hitherto naked ideas). • The author argues that Locke’s theory supposes that words are signs for ideas, implying that they refer to mysterious objects in our minds, rather than to objects in a social-material world (e.g. Locke would argue that the word “cat” stands for our idea of a cat, and not for the small furry animals in our living rooms). Language would then become the medium for internal soliloquies in which individuals use words to refer to their own invisible thoughts, without concern for how the same words may be used by other members of their linguistic community. The author argues that Locke’s theory on the relation between language and ideas is “radically misguided”. • The author argues that we think in words, in sentences, and in language. It is difficult to think that it is cold outside without knowing the meaning of the words “cold” and “outside”. Once we understand the socially determined meanings of words, they become part of our cognitive process of idea formation. Ideas are therefore steeped in language and language is steeped in social relationships. • The author argues that both the Lockean theory and the idea/expression dichotomy are rooted in the same untenable view that ideas are non-linguistic objects that are incidentally clothed, embodies or expressed in language. Therefore, the sought after distinction between “ideas” and their “expression” in language does not exist - it is a fiction created by the false assumption that ideas are essentially non-linguistic and are only incidentally embodied in linguistic forms.

General and Specific Ideas • Another meaning of the idea/expression dichotomy suggests that ideas are not protected by copyright because copyright does not extend to a mere unelaborated notion or general concept. Highly elaborated ideas are therefore deserving of protection. • There is a suggestion that there exists a “point” at which general ideas are distinguishable from highly developed specific ideas. However, if where we draw the line is essentially arbitrary, there is no right place to draw it; there is an indefinitely large number of gradations between general and specific ideas and, in this sense, there is no real dichotomy between ideas and their expression - only a continuum. Therefore, there is no “right” place to draw the line. The right place is wherever we decide is most convenient and most conclusive to promoting the purposes of copyright law. • Furthermore, it is also useless to search for a metaphysical point at which ideas are distinguishable from their expression because there is never a single, identifiable “idea” underlying a given work. 137 • Even though the distinction between general and specific ideas is arbitrary and conventional, it can nonetheless play a useful role in achieving a balance between the public interest in a free flow of ideas and the need to provide rewards and incentives for creative work. • The more general the idea, the more room there usually is for developing it in new directions, thereby adding to the stock of creative works available to the public. • The distinction can also play a useful role in relation to the question of incentive; i.e. usually the amount of effort that goes into developing an idea is directly proportionate to its degree of specificity and refinement. Therefore, it makes sense to protect highly specific and well- developed ideas.

• Where should the line between an idea and its expression be drawn? The line is conventional and arbitrary. It should be drawn wherever it is most convenient. It is most convenient to draw it in such a way as to promote the purposes of copyright protection, which are:

(a) to encourage a free flow of ideas for the benefit of the public; and (b) to ensure sufficient incentives for continued creativity.

These aims can ne promoted by distinguishing between “ideas” and their “expression” on the basis of whether an idea is:

(a) very general and susceptible to further development in ways that are likely to be of benefit to the public, in which case it should be retained in the public domain; or (b) already highly developed and unlikely to contain significant further creative potential, in which case the idea may reasonably be made subject to copyright protection, so as to provide incentives for continued creativity.

Merger Doctrine • Where an idea is inseparably tied to a specific form of expression, the idea can only be expressed in one form and the form adds nothing to the original idea. As such, the idea is said to “merge” with its expression. When this occurs, the form of expression is not protected by copyright. • The merger doctrine has not been well-received in Canada. • The merger doctrine assumes that some ideas can only be expressed in one or a very limited number of forms. Clearly, the number of forms in which an idea can be expressed depends on how the idea is characterized. • The author feels that the merger doctrine is a conclusionary principle. A finding that an idea has merged with its expression is no more than a decision to characterize the idea underlying a work so narrowly and with such high degree of specificity that the expression of the idea becomes a part of the idea itself. The merger doctrine thus supports whichever conclusion a court wishes to endorse, and is therefore useless.

Conclusions • We should use pragmatic criteria to distinguish ideas from their expression by employing the contrast between general and specific ideas to promote the purposes of copyright protection. 138 2. Originality CA, s. 5 See "Compilations", HO

Viceroy Homes Ltd v. Ventury Homes Inc. (1991) Ont. Ct. (Gen. Div.) (Vol. 1, p. 232)

Facts • Viceroy and Ventury are both companies that sell package homes (home kits) in Ontario. • Viceroy claims that Ventury copied four of its designs for model homes, which designs were registered pursuant to the Copyright Act.

Issues • Are the Ventury models a copy of the Viceroy models? • If so, are Viceroy’s plans, brochures and homes protected by the Copyright Act?

Holding • The Ventury models are copies of the Viceroy models. • The plans, brochures and homes did not represent a unique housing design and were therefore in the public domain, unprotected by the Act.

Ratio • The Ventury models are indeed copies of the Viceroy models. The Ventury models are substantially similar to the Viceroy models and the Ventury designers had access to the original designs (had Viceroy’s brochures when designing the models). When those two factors are present, the Court may infer that one work is the copy of another. • Under sec. 5 of the Act, a copyright subsists in, inter alia, every original artistic work. The definition of “architectural work” in sec. 2 of the present Act includes a model of a building, and the definition of “artistic work” includes plans and architectural works. In essence then, one can have copyright in plans, brochures and the home itself. • Potts, J. then launches into a lengthy discussion relating the requirement that “architectural works of art” have “an artistic character or design” (he focuses the uniqueness requirement). The present Act has replaced the definition of “architectural works of art” with “architectural work”, which definition contains no requirement that it have “an artistic character or design”. • Potts, J. concluded that the homes were not unique; they had no flair and panache, and were not distinctive or individualistic, and as such were in the public domain, unprotected by the Act.

Formalities: CA, ss. 34.1, 39, 54ff.

(D) OWNERSHIP  The relevant sections of the Copyright Act relating to ownership are ss. 13 & 14. 139 OWNERSHIP OF COPYRIGHT

Ownership of copyright 13 (1) Subject to this Act, the author of a work shall be the first owner of the copyright therein.

Engraving, photograph or portrait (2) Where, in the case of an engraving, photograph or portrait, the plate or other original was ordered by some other person and was made for valuable consideration, and the consideration was paid, in pursuance of that order, in the absence of any agreement to the contrary, the person by whom the plate or other original was ordered shall be the first owner of the copyright.

Work made in the course of employment (3) Where the author of a work was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright, but where the work is an article or other contribution to a newspaper, magazine or similar periodical, there shall, in the absence of any agreement to the contrary, be deemed to be reserved to the author a right to restrain the publication of the work, otherwise than as part of a newspaper, magazine or similar periodical.

Assignments and licences (4) The owner of the copyright in any work may assign the right, either wholly or partially, and either generally or subject to limitations relating to territory, medium or sector of the market or other limitations relating to the scope of the assignment, and either for the whole term of the copyright or for any other part thereof, and may grant any interest in the right by licence, but no assignment or grant is valid unless it is in writing signed by the owner of the right in respect of which the assignment or grant is made, or by the owner’s duly authorized agent.

Ownership in case of partial assignment (5) Where, under any partial assignment of copyright, the assignee becomes entitled to any right comprised in copyright, the assignee, with respect to the rights so assigned, and the assignor, with respect to the rights not assigned, shall be treated for the purposes of this Act as the owner of the copyright, and this Act has effect accordingly.

Assignment of right of action (6) For greater certainty, it is deemed always to have been the law that a right of action for infringement of copyright may be assigned in association with the assignment of the copyright or the grant of an interest in the copyright by licence.

Exclusive licence (7) For greater certainty, it is deemed always to have been the law that a grant of an exclusive licence in a copyright constitutes the grant of an interest in the copyright by licence.

Limitation where author is first owner of copyright 140 14 (1) Where the author of a work is the first owner of the copyright therein, no assignment of the copyright and no grant of any interest therein, made by him, otherwise than by will, after June 4, 1921, is operative to vest in the assignee or grantee any rights with respect to the copyright in the work beyond the expiration of twenty-five years from the death of the author, and the reversionary interest in the copyright expectant on the termination of that period shall, on the death of the author, notwithstanding any agreement to the contrary, devolve on his legal representatives as part of the estate of the author, and any agreement entered into by the author as to the disposition of such reversionary interest is void.

Restriction (2) Nothing in subsection (1) shall be construed as applying to the assignment of the copyright in a collective work or a licence to publish a work or part of a work as part of a collective work.

1. Authorship

Cummins v. Bond (1927) Chancery Division

Facts:

 Cummins would work herself into some type of trance or dream state whereby she would communicate with some sort of spiritual being and write, at rapid speed and in archaic English, pages and pages of text. Bond would then take the original text and reformat it by transcribing it, arranging it in paragraphs, adding punctuation and returning a copy to Cummins.  Bond compiled the original text and wanted to publish it in book form, entitled « The Chronicle of Cleophas ».  Cummins sought to: establish her right in copyright in the literary work, an injunction to restrain Bond from publishing the work in book form or any extract from it and delivery by Bond to her of texts still in his possession.  Bond argues that Cummins is not the owner of the copyright because the communication was personally addressed to him via a psychic agent so it could not be an original literary work.

Issue(s): Who is the owner of the copyright in the work?

Held: Cummins is the owner of the copyrigth.

Ratio:

 « Prima facie it is the author [of the work that is the owner of the copyright], and so far as this world is concerned there can be no doubt who is the author here, for it has been abundantly proved that [Cummins] is the writer of every word to be found in this bundle of original script [emphasis added]. »  « ...but I think I have stated enough with regard to the antiquity of the source and the language in which the communications are written to indicate that they could not have reached us in this form without the active co-operation of some agent competent to translate them from the language in which they were communicated to her into something more intelligible to persons of the present day [emphasis added] . » 141  Eve J. completely rejects Bond’s claim that he is a joint author stating that such a claim is delusional. « [Bond’s] claim to be considered a joint author is suggestive of an hallucination, for it is based upon the assertion that by his presence at the séances where the writing took place he in some way transmitted from his brain to the unconscious brain of the medium the classical and historical references which are to be found in these documents. »  Eve J. also rejects the claim that there had been a tacit agreement between Cummins and Bond to transfer the copyright to Bond. The conduct of the parties did not indicate as such.

D.L.’s comments on joint ownership: it may be possible to have joint ownership of copyright but must be more than simply dotting « i’s » and crossing « t’s ». Editing and reformatting text is not sufficient, there must be material or substantive contribution before joint ownership can be claimed. Historically, there has been a bias against joint ownership, particularly in the U.K. and Canada. In the U.S., it is much more prevalent and accepted.

2. PHOTOGRAPHS, ENGRAVINGS AND PORTRAITS

The relevant provisions are ss. 2, 10(1) & (2) and 13(2). Definitions 2 In this Act,

« artistic work » « artistic work » includes paintings, drawings, maps, charts, plans, photographs, engravings, sculptures, works of artistic craftsmanship, architectural works, and compilations of artistic works;...

Term of copyright in photographs 10(1) Where the owner referred to in subsection (2) is a corporation, the term of which copyright subsists in a photograph shall be the remainder of the year of the making of the initial negative or plate from which the photograph was derived or, if there is no negative or plate, of the initial photograph, plus a period of fifty years.

(1.1) Where the owner is a corporation, the majority of the voting shares of which are owned by a natural person who would have qualified as the author of the photograph except for subsection (2), the term of copyright is the term set out in section 6.

Author of photograph 10 (2) The person who

(a) was the owner of the initial negative or other plate at the time when that negative or other plate was made, or (b) was the owner of the initial photograph at the time when that photograph was made, where there was no negative or other plate, is deemed to be the author of the photograph and, where that owner is a body corporate, the body corporate is deemed for the purposes of this Act to be ordinarily resident in a treaty country if it has established a place of business therein. 142 (note: I have excerpted the section as it appears in the Act. That said and although I don’t portray myself as a statutory drafting expert, I believe that there should be a separate paragraph where it starts with « is deemed to be the author... ». That way, the provision would make more sense).

13(2) See above.

Fetherling v.Boughner (1978), 40 C.P.R. (2d) 253 (Ont. H.C.)

Facts:

 11 well known Canadians took pictures at a coin operated booth. The photograph was a major part of an article written by Fetherling and published in « The Canadian » magazine.  Boughner uses a technique whereby she lifts printing ink from newspapers/magazines and transfers that ink to other pieces of paper. She purchased 30 copies of « The Canadian » and used the transfer technique to lift the photographs and sold them.  Fetherling sought an interlocutory injunction restraining Boughner from using any manner, Fetherling’s photographs in any composition, advertisement or exhibit of Boughner’s work or for any other purpose.

Issue(s):

 Does Fetherling have a copyright in the strip photographs?  Does the transfer process constitute copying?

Held:

 Fetherling failed in making out a case that an interlocutory injunction is warranted here. Fetherling has not established that he has a copyright in the photographs and the transfer process is not copying.

Ratio:

 WRT to the first issue: Southey J. acknowledges that Fetherling has a copyright in the article but not necessarily the photographs used in the article. The photographs must be analyzed separately from the article. Here, the important fact is that the photographs were taken by a machine without the intervention of Fetherling as a photographer. Given that Fetherling cannot establish that he has a copyright in the strips, he cannot enforce his right against Boughner.  WRT to the second issue: The transfer process does not constitute copying because it involves the physical transfer of the picture from « The Canadian » to another document. The picture no longer appeared on « The Canadian » after the process.

D.L.’s comments on the case: Typically, under ss. 10(2) of the Copyright Act, the photographer will own the first negative or initial photograph (if no negative) and will be the owner of the copyright. In this case, Fetherling was not the photographer. He presumably entered into an agreement with the celebreties to use the photographs in his article but did not take the picture, it was a coin operated machine. Notice that s. 13(2) of the Copyright Act derogates from the general rule that the photographer is the owner if the 143 photograph was commissioned. In this case, if the photograph was commissioned and there is valuable consideration then the person who commissioned the photograph would be the owner.

Allen v. Toronto Star Newspapers Ltd. (1995), 63 C.P.R. (3d) 517 (Ont. Gen. Div.)

Facts:

 Allen, a freelancer, was commissioned and paid by Saturday Night magazine to take a picture of Sheila Copps, in black leather and sitting on a motor bike (Good Lord, what a scary image!!!!). This photograph was used on the cover of Saturday Night Magazine in the November 1985 edition. In 1990, the Toronto Star published an article whereby they reproduced the cover of the November 1985 Saturday Night magazine.  Allen hadn’t been asked his consent to the use of the photograph by the Toronto Star. He sues the Toronto Star for damages and exemplary damages for copyright infringement.

Issue(s):

 Who is the owner of the copyright in the photograph?  Does the fact that only the cover was reproduced make a difference?

Held:

 Allen owns the copyright. Reproducing the cover of the magazine is a copyright infringement. Damages awarded but no exemplary damages.

Ratio:

 Allen had no agreement with Saturday Night magazine to transfer ownership of the picture. That said, Saturday Night magazine did commission Allen to take the photograph and according to the general principle established in s. 13(2) of the Copyright Act, Saturday Night should own the photograph. However, the court accepts the argument that standard industry practice is such that the freelancer retains ownership of the copyright in the photograph unless agreement to the contrary (this is a derogation from the general rule). Here, there is no agreement to the contrary so the « freelancer rule » applies and Allen retains ownership of the copyright  As to the second issue, the Court rejects the argument that reproducing the cover of the magazine rather than the actual picture is not the same thing.

D.L.’s comments on this case: Restates the rule arising from this case as follows: the freelance photographer always retains ownership of the copyright in the photograph unless the freelance photographer and the person with whom s/he is contracting with agree that the latter will get ownership. So, the general rule is that the person who commissioned the photograph gets ownership but standard industry practice is viewed as an implied « agreement to the contrary » (see s. 13(2)) and freelancer retains ownership. D.L. questions the big double negative here and says that the rule is really not that clear. So, my restatement as I understand it is as follows:

Person who commissioned gets ownership (s. 13(2)). Standard industry practice = agreement to the contrary in s. 13(2). 144 Result: freelancer retains ownership of the copyright in photograph. But, if freelancer and person who commissioned agree that latter is to keep ownership. Result: person who commissioned gets ownership of copyright in photograph.

3. Works made in the Course of Employment  The relevant provision is s. 13(3) of the Coypright Act. See above. D.L points out the exception for journalists in s. 13(3) in that they have a right to restrain. This means that the owner of the article has the copyright but the journalist has a veto right. He also says that in the case of university professors, the ownership of the copyright will reside with the university except in the case of the publication of an article where the prof. retains ownership of the copyright.

Boudreau v. Lynn (not in casebook, D.L. mentioned it in class)

Facts: Boudreau, a student writes a paper for Lynn, a prof. at U. of O. Prof. publishes the paper in his name and excludes the student’s name. Boudreau takes action for copyright infringement. Lynn tries to argue the s. 13(3) exception in that Boudreau wrote the paper in course of employment.

Held: Boudreau was a student, writing a paper for a class. This is not a contract of services and therefore, the work was not in the course of employment.

Cselko Associates Inc. v. Zellers Inc. (1992), 41 C.P.R. (3d) 56 (Ont. Gen. Div.)

Facts:

 Zellers entered into a contract with Display Ltd. which in turn entered into a contract with Cselko to do some drawings of «Zeddy Bear » in various activity poses. Zellers were to use « Zeddy Bear » in a variety of advertising and merchandising campaigns. It was made known to Cselko that the drawings were to be used for advertising purposes and no limitation on the use of the drawings was ever discussed with Zellers.  Cselko discovers that the drawings are used extensively by Zellers in various ad campaigns. It registers a copyright in the drawings and sues Zellers for damages for breach of copyright. They argue that advertising and packaging are two different things and that art sold for use in advertising does not encompass packaging.

Issue(s): What limitations on use, if any, are to be implied in the circumstances of this case?

Held: Cselko’s action is ill-founded. Zellers wins.

Ratio:

 Court accepts that standard industry practice is such that commercial artists assign all of their rights to their client unless there is an agreement to the contrary whereby the artist expressly limits other uses. 145  On the issue of the copyright problem: s. 13(4) of the Copyright Act, one may assign the rights in copyright by written agreement only. The Court concludes, on the basis of Harold Drabble Ltd. v. Hycolite Manufacturing Co. (1928), 44 T.L.R. 264 (Chancery Div.), that the licence to use may be implied by the conduct of the parties and need not be in writing.

4. Licensing  The relevant provision is s. 13(4) of the Copyright Act. As well, ss. 67 to 77 which establish the rules regulating the collective administration of performing rights and of communication rights. I have not excerpted the latter provisions because they were too long and D.L. put very little importance on them.  Marc’s note: according to the outline, the previous case (Cselko Associates) fell under « works made in the course of employment », it would seem to me that it could also be relevant under the licensing section as well.

Re Fondation Les Forges (1994), 58 C.P.R. (3d) 119 (Copyright Board)

Facts:

 La Fondation Les Forges applied to the Copyright Board for permission to use passages from poems of Québec poets. The purpose of this initiative was to have them put on panels which would be attached to walls in Trois Rivières for a period of 30 years. The objective was to increase public awareness about Québec poets and beautify Trois Rivières (good luck!).  The Fondation conducted an exhaustive search to find the copyright owners but to no avail. It applies to the Copyright Board for a right to use the passages for a period of 30 years.

Held:

 The Board is satisfied that the Fondation has done everything possible to locate the copyright owners and as a result, it issues a non-exclusive licence to use the passages. The use is circumscribed such that the Fondation can only reproduce the passages once, must be reproduced on the panels only, cannot be reproduced in a book/collection/anthology and must provide a pamphlet with the poets’ bibliographical info. As well, the Fondation must pay a sum $80 to be set aside in trust for any potential claims of copyright owners. Latter can then approach the Copyright Board for compensation rather than the courts.

D.L.’s comments: The importance of this case lies in the fact that this is a perfect example of some other body, other than the copyright owner, that is administering the use of the copyright.

(E) INFRINGEMENT OF OWNER’S RIGHTS CA, ss. 27 CA, ss. 5, 18, 21, 19 (rights in subject matter); ss. 6 - 12 CA, ss. 44 - 45 (imports & exemptions) CA, ss. 29 - 29.2, 30, 30.6 - 30.9, 32 - 32.2 (individual exceptions); ss. 29.3 - 29-9, 30.1 - 30.5 (collective exemptions); ss. 79 - 88 (private copying) 146 1. Direct Infringement a. “Substantial Taking”

CA, s. 27

Weiss v. Prentice Hall Canada Inc. (p. II-351) Ontario Court (General Division), December 15, 1995

Facts Plaintiff wrote an article about key areas re real estate purchases in Florida. Article was published by defendant Southam Inc. in 1978. Def. McInnis wrote a book containing a section making use of plaintiff’s article. Prentice Hall published the book in 1983 & 1989 and D & T distributed some of those books to promote their services. McInnis admits having made use of W’s article under authority of an agreement with Southam. Other defendants claim innocence, saying had Southam’s permission.

Legislation CA, ss. 3, 4, 27

Issue Was there infringement of ©?

Holding Yes, McInnis’ book substantially copied Weiss’ article. Defendants all equally liable, jointly & severally (for writing, authorizing publication, publishing & selling, distributing the infringing article).

Ratio Line-by-line, word for word & general set-up comparisons show substantial copy. Although same subject-matter and similar factual elements, similarities are inevitable, but here similarities were too many and too close (order, structure, sequence of the procedures, words & phrases). Same inner form (set-up, outline) and outer form (words, etc.). Few differences are of very minor nature. Fortuitous happenstance or coincidence would be too far-fetched. On a balance of probabilities, work was copied. Court found W was owner of ©, since had only granted first-time rights, and also had moral rights. Reliance on others re © does not shield from liability. Good faith & ignorance of plaintiff’s rights are no defence either. ss. 3 & 4: © is the sole right to issue copies of a work to the public s. 27: that right is infringed when other persons issue copies to the public 147

Note on damages: difficult to assess, but considering defendants have infringed © of plaintiff, latter is entitled to damages “as will convey to the defendants the enormity of their misappropriation of the plaintiff’s literary creation”. Damages may be punitive, even exemplary.

Remember that in Tele-Direct, much of the information was copied, but the arranging was novel, no substantial copying.

In evaluating the possible in fringement, one must look at quality as well as quantity of similarities.

Person asserting the © has a prima facie case, and burden of proof is on the individual trying to show that there has been no infringement.

Hutton v. Canadian Broadcasting Corporation (p. I-237 & 242) Alberta C.A. & Queen’s Bench decisions (1992 and 1989)

Facts  Appellant conceived & produced a pilot called Star Track on which in 1980 the series Star Chart was based, co-produced between appellant & respondent.  Respondent cancelled the series as contractually entitled after 19 programmes.  Appellant retained © in SC & registered it in 1985.  In 1983, respondent produced & aired seried Good Rockin’ Tonite (GRT).  Appellants argue GRT use all the components of SC; same hose, opening, introduction of videos, countdown, closing.  Access is not disputed. Appellants allege similarities lead to inference of infringement.  Similarities: both premised on the idea of a videodisk jockey showing rock videos.

Issue  Was there substantial similarity & therefore infringement?

Holding  No infringement of ©. Appeal dismissed.

Ratio  Appellant has not established a substantial similarity of the two works when viewed as a whole and substantial similarity in the mode of expression.  Similarities are unsubstantial, largely unimportant & typical of the genre.  No causal connection between the two works.  Independent creation has been established: GRT was created by CBC personnel in response to a need of a programme resembling an earlier CBC program. Origin of the program can be traced to different sources.  Choice of same host not based on intention to copy but because best choice for the part. 148

Trial Judge in Hutton says what we are looking for in substantial similarity as a whole, without dissecting the program. One must look at the works globally. Method used in Weiss does not establish whether there is substantial similarity enough.

TEST is two-fold: 1. Factual (Grignon): extrinsic test, based on criteria which can be listed and analyzed (like Weiss). 2. Intrinsic test, based on ordinary reasonable person’s assessment. Expert testimony is helpful (as in Grignon), but not determinative; more importantly, with what is not easily classified, would go to what a reasonable person would determine if saw both programs. Also, there has to be access.

Summary of conditions for infringement

 work alledgedly copied must be original;  sufficient objective similarity between the works as a whole, or similarity of substantial part of the © work and substantial similarity in the modes of expression. Similarities must be looked at both quantitatively and qualitatively.  causal connection (which cannot exist without access): this can be achieved either by proof of copying, or inferred from substantial similarity and access. The latter may be rebutted by proof of independent creation.

N.B. Registration of a work as a dramatic work does not restrict the scope of the rights given to the © holder to the dramatic components only. Even if 2d work not a dramatic work, threre could still be © infringement.

ARE CHARACTERS ©-able?

In Michelin, the Michelin man set outin a diagram can be the subject matter of a ©. But characters are not necessarily subject to ©, as we will see in following case (depends on how distinctive they are.

Preston v. 20th Century Fox Canada Ltd. and Lucas et al Federal Court of Canada, Trial Division, November 9, 1990 (Madkay J.)

Facts  Plaintiff is a writer, producer and entrepreneur in entertainment industry. 149  Defendant is a well-konown motion picture producer, writer, director of films.  Defendants together are producers and distributors of the Star Wars trilogy, the 3d film of the series being Return of the Jedi.  Plaintiff asked a friend to write a script based on some of his notes. Friend did produce a script entitled Space Pets, including small furry animal species named Olaks and Ewoks. Friend apparently threw away such notes upon completion of the script.  Plaintiff alleges friend sent script, with covering letter (Oct. 1978) to Lucasfilm and that George Lucas used the character of the Ewok in his film The Return of the Jedi (planned from 1980, produced 1982-1983 and released may 1983) and in TV series Ewok Adventures.  Term Ewok not used in film but mentioned in the credit lines at the end.

Legal Texts  ss. 3(1)(d)(e), 13(1), 27(1)

Issues  1. Is there infringement of ©? Is there substantial similarity between the two works?  2. Is the character of the Ewok subject to ©?

Holding  1. No infringement of ©. Plaintiff has failed to establish that defendant reproduced or adapted in substantial part his script.  2. Character of Ewok as developed in plaintiff’s script not subject to ©.

Ratio  If access is proven, we have to look at infringement looking at similarities, etc. Access may be inferred if substantial similarity, but here, direct access not proven and at best would be circumstantial, considering standard practice at Lucasfilm of returning unsolicited materials with covering letter without even showing them to Lucas.  Court still rules on similarities: despite some general similarities in details depicting the Ewok, the average lay observer would find no substantial similarity in script and film (Hutton test).  Similarities re settings and scenes are not subject to © because are standard aspects of productions concerning primitive species, drawn from common pool of folklore.  In movie, only one type of Ewok, whereas in Preston’s script there are two kinds of furry creatures.  Differences in creatures themselves: size, costumes, hair, etc.  Lucas was able to explain how his Ewok evolved from Wookees, etc…  Lucas gave little direction to his artists in developing costumes, etc…  Experts testified that coincidence of both Preston & Lucas developing same Ewok name was not highly improbable.

Re ©ability of characters:  No © in a mere name.  The less developed the character, the less they can be copyrighted. 150  Characteristics of plaintiff’s Ewok in script do not delineate the Ewok sufficiently distinctly to warrant recognition as a character subject to ©.  Ewok’s character in plaintiff’s script not widely known by reason of plaintiff’s script. b. “Making a Record”

Relevant Legislation: s. 3(1d) CR includes the sole right…"in the case of literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically produced or performed" s.15 Copyright in performer's performance is the performer's re following:

(a) if not fixed to (1) to communicate it by, uh, telecommunication (2) to perform it in public (3) to fix it in any material form

(b) if it is not fixed to…see p. 436-437 (not relevant to these cases) s. 18(1) The maker of a sound recording has a CR in the sound recording, consisting of the sole right to do the following…:

(a) to publish it for the first time (b) to reproduce it in any material form (c) to rent it out, and to authorize any such acts.

Compo Co. Ltd. v. Blue Crest Music Inc. SCC - 1980 (I-289)

F: Appellant cie (Compo) Ks with Canusa Records to press records from master acetate provided by latter. Canusa had failed to obtain licence to do so from Blue Crest, the holder of mechanical rights in the copyrighted work (master acetate), and was found at trial to have breached Blue Crest's copyright. At issue is whether such liability should extend to Compo. Held not at trial on the basis that Compo were not record sellers under old s.19(1b) of the CRA and so could not have known what royalties were payable under the section. Reversed on appeal on basis that while Canusa 'caused' Compo to violate Blue Crest's copyright, it was Compo itself that 'made' the records in violation of Blue Crest's exclusive right to do so. Compo appealed to SCC on this issue.

H: Appeal dismissed. 151

R: Issue is simply did Compo make moulds/stampers - read 'make a record' - from master acetate w/thin the meaning of ss. 3 & (old) 17 of the CRA. In s.3 CRA, the verb "to make" includes physically causing the record to come into being. Compo's work did create the "means by which the work may be mechanically performed" [s.3(1d) CRA] - it thus, whether wittingly or unwittingly, violated Blue Crest's copyright. RL: s.3 CRA, s.17 (now 18) CRA

LAM: Compo is liable b/c CR is a creature of statute and readings will be literal. "Anything" in s.3 is illegal. c. Broadcasting and Recording

Tele-Metropole Inc. v. Michael Bishop - SCC - 1990 - (II-357)

F: Bishop composes song (music/lyrics) and files copy with association in UK that protects its members CRs. This assoc is affiliated w/ Canadian counterpart (CAPAC). Stevens, a singer, records song w/out Bishop's permission and publicizes it on TV shows via agreement w/ Tele- Metropole. Tele-Metropole prerecords song and broadcasts recording twice, paying appropriate broadcast fees to CAPAC which then forwarded them to Bishop. Bishop claims Tele-Metropole infringed his CR by recording song without his permission. TJ & FCA agree.

H: Appeal dismissed (CR was infringed)

R: Right to broadcast a performance under s.3(1) of the CR Act does not include the right to make an 'ephemeral recording' beforehand to facilitate the broadcast. Right to perform/record a work are separately enumerated in CRA and are distinct rights to be assigned separately. Section 3(1d) provides that CR includes sole right to make any record even if not for reproduction/sale. Any unauthorized recording is an infringement. A strict reading makes sense in that there exist explicit exemptions at s.17(2) CRA. Such a reading does not prohibit prerecording - only requires broadcaster to acquire permission w/ rights holder. While ephemeral recordings are convenient device for broadcasters and their use widespread, their use is open to abuse. It is up to legislator to make these an adjunct of broadcast rights and implement safeguards. Biship did not implicitly consent to such recordings by granting licence to CAPAC to broadcast performances of his work. The right to record was not assigned and so CAPAC could not extend it itself.

RL: s.3(1) CRA, s.17(2) CRA (now s.15)

LAM: Ephemeral recordings are now covered at 30.8 CRA. 152 d. Authorizing Infringement

A. RELEVANT STATUTORY PROVISION(S):

Copyright and Moral Rights in Works Copyright in works 3(1) For the purposes of this Act, "copyright", in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right (a) to produce, reproduce, perform or publish any translation of the work, (b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work, (c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise, (d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed, (e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work, (f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication, (g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan, (h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program, and (i) in the case of a musical work, to rent out a sound recording in which the work is embodied, and to authorize any such acts.

Infringement of Copyright Public performance for profit 27(5) It is an infringement of copyright for any person, for profit, to permit a theatre or other place of entertainment to be used for the performance in public of a work or other 153 subject-matter without the consent of the owner of the copyright unless that person was not aware, and had no reasonable ground for suspecting, that the performance would be an infringement of copyright.

B. RELEVANT SECTIONS FROM VAVER TEXT:

G. Owners Rights: Literary, Dramatic, Musical and Artistic Works

8. Authorization

 The owner can authorize any of the rights that fall under the definition of copyright.  In practice, the authorization right attaches liability to people beyond those who actually commit the infringing act. Thus, whoever grants, or purports to grant, expressly or impliedly, the right to reproduce or perform a work in public has been held to authorize the reproduction or performance. - The authorizer is then as liable as the reproducer or the performer.  Liability attaches only if the authorized act occurs, although quia timet (an injunction) relief is available where the act authorized has not yet been committed.  Courts have said that merely to provide the means of infringement is not the same as authorizing it, any more than someone selling a gun thereby authorizes a buyer to hunt without a licence or to commit a crime.

C. SUMMARY OF CASES: de Tervagne v. Beloeil (Town)

Facts: The play Pique-Nique en Ville was performed at Beloeil without the authors consent. The town of Beloeil was the owner of the cultural centre where the play was presented. Les Productions de la Coulisse Inc. was a non-profit corporation established to provide cultural activities to the residents of the town and surrounding area. It made an agreement with the producer, Bossac, who has since made an assignment in bankruptcy, to rent the Centre to him for the performance of the play. Ilial was director of the play, and Neveu the stage designer. The plaintiffs action was for copyright infringement. At the outset, Bossac and his theatrical company had also been named as defendants, but the action was discontinued as against them when Bossac declared bankruptcy. Infringement was admitted. The issue was who authorized the performance of the play within the meaning of the Copyright Act.

Holding: The action should be dismissed. 154

Reasoning: The fundamental doctrine is that the authorization of any act reserved for the author under the Copyright Act without his consent constitutes infringement. The leading decision in Canada interpreting the concept of authorization is Muzak Corp. v. Composers, Authors, etc. where the Supreme Court of Canada reaffirmed the earlier decision of Vigneux et al. v. Canadian Performing Rights Society and where it applied and laid down three principles: (1) In order to authorize, a person must sanction, approve or countenance something more than the mere use of the equipment that might possibly be used in an actual infringement of copyright; - The court makes the presumption that a person who authorized an activity authorized that activity only so far as the activity is in accordance with law. (2) In order to authorize, a person must sanction, approve or countenance more than the mere use of equipment that might possibly be used in an infringing performance but, on the other hand, a person need not go so far as to grant or purport to grant the right to perform; (3) It is possible to establish that a person has sanctioned, approved or countenanced an actual infringing activity if it is shown that certain relationships existed between the alleged authorizer and the actual infringer, or that the alleged authorizer conducted himself in a certain manner. A survey of the case law relating to the concept of authorization revealed that each case essentially turns on its facts and that the Court must give judgment on those facts. The essential element is the degree of control (often on the basis of the master-servant and employer-employee relationship) exercised by the defendants over the people who committed the infringement. In the case at bar, the producer of the play, Bossac, alone had control over the play. The other defendants were not in such a position as would have enabled them to authorize the infringement. The mere fact that the town of Beloeil and Les Productions de la Coulisse Inc. rented the hall to Bossac, even though this in a way made possible or facilitated the infringement, did not support a finding that they authorized the performance of a play which infringed copyright. They could reasonably have assumed that the purpose of renting the hall was to present a play on a lawful manner. The participation of Ilial and Neveu was strictly in their relationship as employees of Bossac. They were at all times subject to his authority.

Principle(s): 155

 Besides the rights set out elsewhere in section 3(1), the copyright owner holds the right to authorize any of these acts. Consequently, the authorization of any act reserved for the author without his consent constitutes infringement. Thus, a person reproducing a work must first obtain the consent of the owner of the copyright or any other person authorized to consent. Otherwise, he or she commits an infringement.  The person authorizing the performance of a work by mechanical means, and not the one simply providing it, is the one who is in control of the instrument. In other words, the person authorizing the performance is the person making it possible. It therefore cannot be argued that the person whose role is nothing more than to supply the means by which the public performance of the work is made possible authorizes a public performance.  An authorization can only come form somebody having or purporting to have authority and that an act is not authorized by somebody who merely enables or possibly assists or even encourages another to do an act, but does not purport to have any authority which he can grant to justify the doing of the act.  Vigneux clearly established that a defendant who simply supplies the means which make the infringement possible cannot be held liable for authorizing the infringement if he or she had no control over the means in question.  Muzak Corp. v. Composers, Authors, etc. is the leading decision in Canada interpreting the concept of authorization. - The mere fact of supplying the means which permitted a person to commit an infringement did not amount to authorization. - Unless what was done by a defendant was to sanction, approve or countenance a performance, it cannot be established that such a defendant authorized a performance or representation.  The type of conduct or relationship from which it can be concluded that a person in fact authorized the infringement, within the meaning of the Act, is primarily a question of fact which depends on the circumstances of each case. - The first factor to be considered is the degree of control that the defendant exercised over the infringer. That control must be such that he or she could prevent the infringement from being committed. - The second factor is that a reasonable person would be led to conclude that the defendant sanctions, approves or countenances the infringements, and that the defendant should have known that his or her words, actions or inaction would be seen as such by a reasonable person. - Authorization may be express or implied.  It is a question of fact in each case what is the true inference to be drawn from the conduct of the person said to have authorised the act complained of.  What constitutes the necessary type and measure of control will vary from case to case according to the circumstances and particularly the nature of the act complained of, the relationship between the alleged authorizer and the actual infringer and the means by which the infringement is carried into effect. 156

2. Indirect Infringement

A. RELEVANT STATUTORY PROVISION(S):

Infringement of Copyright Secondary Infringement 27(2) It is an infringement of copyright for any person to (a) sell or rent out, (b) distribute to such an extent as to affect prejudicially the owner of the copyright, (c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public, (d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or (e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c), a copy of a work, sound recording or fixation of a performer's performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.

B. RELEVANT SECTIONS FROM VAVER TEXT:

G. Owners Rights: Literary, Dramatic, Musical and Artistic Works

10. Distributing and Importing Infringing Copies

 Anyone can usually sell, resell and rent lawfully acquired works and non- infringing copies without worrying about copyright. - But copyright owners can control the distribution of infringing copies in Canada or unauthorized parallel imports.  Someone who knows that a work infringes copyright, or knows that it would infringe had it been made in Canada, has to get the copyright owners consent to deal with the work. - Otherwise, he infringes if he does any of the following: sells or hires out the work; exposes it by way of trade, or offers it for sale or hire; distributes it for the purposes of trade or so as to affect the owner of the copyright prejudicially; by way of trade exhibits it in public; or imports it into Canada for sale or hire. - Indeed these activities  as well as making an infringing work for sale or hire, possessing plates to make infringing copies, or performing works in public for private profit  are criminal acts that, on conviction after indictment, can attract penalties of up to a $ 1 million fine and/or five years in jail. 157

(a) Parallel Imports

 The provision that a person who handles a work, knowing that it would infringe copyright if it had been made within Canada, operates to prevent the import and commercial handling of unauthorized copies made outside of Canada.

(b) Knowledge

 Whoever personally makes or authorizes the making of an infringing copy of a work infringes. - But those who deal (by sale, hire, import, etc.) with an infringing copy that they have not personally made infringe only if they know they are dealing with infringing copies. The ignorant, careless or unsophisticated are spared.  Turning a blind eye to the obvious can amount to knowledge.  A person is assumed to have the ordinary understanding expected of persons in his line of business, unless by his or other evidence ... [the court] is convinced otherwise.

C. SUMMARY OF CASES:

R.. v. M. (J.P.)

Facts: M, a young offender, appealed a conviction for distributing infringing copies of computer software contrary to section 42(1)(c) of the Copyright Act, The appellant was an operator of a bulletin board. He organized files, determined where they would be stored and who would have access to these various areas. This included the most secure area, which contained commercial software. Those permitted access could download the commercial software. The trial court found that through his bulletin board, M. made the commercial software available for distribution and assisted in the distribution of such software. He also, on occasion, personally downloaded or distributed the programs to computers belonging to third parties. At trial M. admitted to knowledge of all elements of the offence. He was aware of applicable licence agreements and copyrights. The only defence offered was that he did not think he was breaching the licence agreements and copyrights. The only defence offered was that he did not think he was breaching the licence agreements or doing anything wrong. The trial judge found that M. was extremely knowledgeable in the areas of computers and software. The commercial programs were kept in a restricted area identified as Hackers Delight, and were only available to persons granted special status. The court refused to believe that M. did not understand that what he was doing was illegal. 158

M. appealed on the grounds that the Crown did not prove beyond a reasonable doubt that M. distributed the copyright material, that he had the requisite knowledge, or that the distribution was to an extent that it prejudicially affected the owners of the copyrights.

Holding: The appeal was dismissed.

Reasoning: M. created infringing copies of the software by placing them on the bulletin board in such a way that they were available to be used and copied by special users. He distributed copies when he accessed his computer by modem from remote sites and downloaded the programs. He also distributed copies by controlling the means and manner by which select users accessed the restricted area and by providing software to assist those users to download such software by modem. M.s knowledge, and the extent of prejudice, are questions of fact upon which there was evidence at trial. The sufficiency of that evidence is a matter for the trial judge. The trial judge did not err in law or in its application to the facts.

Principle(s):  Since, computer programs are expressly protected by the Act as literary works, and the owners of the copyrights have the sole right to communicate the work to the public by telecommunication, there can be no doubt that the appellant created infringing copies of the software by placing them on the bulletin board in such a way that they were available to be used and copied by the 16 special users.

(F) MORAL RIGHTS

Snow v. Eaton Centre

Facts : The plaintiff made a sculpture formed by 60 geese and sold it to the defendant, who then attached ribbons to the neck of the geese.

Issue : Is this a distortion, mutilation or other modification of the artist’s work that would be prejudicial to his honour or reputation under s. 12(7) of the Copyright Act?

Judgment : Yes. The defendant must remove the ribbons. “The words “prejudicial to his honour or reputation” in s. 12(7) involve a certain subjective element or judgment on the part of the author so long as it is reasonably arrived at. The ribbons do distort or modify the plaintiff’s work and his assessment that it is damageable to his reputation is reasonable. Other artists share the plaintiff’s opinion. 159

Professor Lametti: this is a relatively subjective test. Subjective appreciation by the author + objective element of seeing whether it’s reasonably arrived at.

Prise de Parole v. Guérin

Facts : Guérin published school books containing a substantial extract from the work of Doric Germain, who has assigned exclusive right to negotiate his copyright to Prise de parole. There was a clear infringement of the plaintiff’s copyright : the extracts were identified as coming from Germain’s book but no authorization was obtained. The issue revolves around damages. Prise de parole’s sales of the book decreased dramatically after Guérin started publishing extracts. Furthermore, the author argues that Guérin has impaired his work by cutting out parts, and that he would have preferred not to have his name associated with such a clumsy adaptation.

Ratio : The plaintiff’s rights were infringed under s. 27 of the Copyright Act. Under s. 34 and 35, he can claim damages for copyright infringement and for the profits made by Guérin. The damages are cumulative, not alternative. The plaintiff received an amount for loss of sales and loss of future sales. They did not get an amount for the profits made by the defendants because it was proved that there were no such profits.

The Court considered whether the author’s moral rights were infringed. S. 14.1(1) gives an author the right to the integrity of his work. This is a moral right. The author must show, under s. 28.2(1), that his work was distorted, mutilated or otherwise modified “to the prejudice of the honour or reputation of the author”. This section does not require that the plaintiff prove prejudice to his honour or reputation ; thus, it is justified to require a subjective assessment by the author of whether there was or not such a prejudice. The Court refers to Snow v. Eaton Center to establish that subjective criterion.

However, a certain objective evaluation of the prejudice based on public or expert opinion is required (like in Snow, other artists were of the opinion that the ribbons distorted the sculpture). Here, although the author has shown that his work was substantially modified without his consent and that he was distressed, he did not show objective prejudice to his reputation. He was not mocked or ridiculed, nor did he get invited to less conferences, etc.

The Copyright Act does not preclude exemplary damages. Guérin knew very well who owned the copyright and that they were not authorized to use the author’s work. The defendant deliberatly continued selling the books, even after acknowledging copyright infringement. It cannot plead ignorance nor good faith. It shows wilful and intentional disregard of the plaintiff. Exemplary damages are awarded.

*To remember : the section on moral rights is interpreted to require a subjective element but also an objective element. It is not sufficient to show that the author feels dishonoured 160 by the modification; there must be some objective evidence of a prejudice to the author’s honour or reputation. We saw in Snow that not much is required to adduce evidence regarding that objective element.

Professor Lametti: Maybe requiring the plaintiff to have been mocked by colleagues is too strong an objective standard. But looking at objective harm was well-founded.

SINCE THESE CASES : these considerations were enshrined in the CRAct. (s. 14.1, 14.2, 28.1, 28.2) Modifications, etc. Integrity Association Moral Rights

Authorship

Author’s Rights

Economic Rights

The right to integrity protects the moral right to not see a work distorted or modified without permission. It also includes the right for an author not to have his work associated with a concept or a product against his will.

S. 28.2(2) differs from the Eaton Center and Prise de Parole cases : it deems that a prejudice has occurred when there is a modification or distortion. In the caselaw, the authors had to prove objective hurt ; now the other party has to prove that the author was being unreasonable.

S. 28.2(3) gives examples of actions that will not alone constitute distortions, modifications, mutilations : ex. change in location of work, restoration in good faith.

S. 14.1 gives another moral right : the right to paternity, i.e. the right to be associated with a work as its author.

S. 14.2(2) says that you cannot assign your moral rights ; you can waive them in whole or in part but not sell them. The various moral rights are separable (i.e. you can waive some but not others).

*Assignment of copyright does not waive any moral rights.

S. 14.2(1) Moral rights subsist only as long as CR (and not forever, as they conceivably could in the civil law). They can be the object of a succession (s. 14.2(2)).

Two moral rights are not protected in Canada: 161

1) Right to divulgation (control when the work is made public) 2) Right to withdrawal (from the public eye).

In Canada, we have a hybrid system : both copyright and moral rights are in the CRAct. In our system of deemed authorship, the author is presumed to have ownership of all these rights. Remaining issues re: moral rights: 1) Relationship between those rights and personality rights : if moral rights are the same as personality rights in the Quebec civil code, a constitutional issue may arise. 2) Justifications re: copyright are based on utilitarian arguments, but moral rights are tied more closely to personhood types of arguments. Maybe we’re shifting emphasis re: justifications.

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