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B LAW402 (43)

Pink Panther .doc

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Business Law
B LAW402
Elaine Geddes

Pink Panther Beauty Corp. v. United Artists Corp. (C.A.) 1998 Federal Court of Appeal Respondent's trade-mark "The Pink Panther" (from the comedy films with Peter Sellers as Inspector Clouseau), the subject of the case herein, has been, for over thirty years, registered for use in Canada in association with the entertainment business. In 1986, the appellant, Pink Panther Beauty Corporation, applied to register the trade-mark "Pink Panther" for proposed use in association with hair care and beauty product supplies, and in the operation of a business dealing in their distribution, and instructing and educating others in their distribution. In the opposition proceeding, the Registrar of Trade-marks found that, given the completely disparate nature of the wares, services and trades of the parties, there was no likelihood of confusion between the marks. On appeal from that decision, the Trial Judge found that, since the mark was very famous and, therefore, worthy of a wide ambit of protection, the differences in the nature of the wares and of the trades of the appellant and the respondent were less significant than they might otherwise be in the determination of the likelihood of confusion. He found in favour of the respondent. This was an appeal from that decision. Linden J.A.: This appeal raises the question of how far the Trade-marks Act will go to protect famous trade-marks where those marks are used in relation to completely different wares or services. The respondent, United Artists Corporation, is the owner of three trade-marks registered in Canada. The mark that is the subject of the case before this Court"the words "The Pink Panther" is registered for use in association with "phonograph records; motion picture films; film leasing and distribution services; entertainment services by means of motion picture films". In addition, there are two drawings of a panther which are also registered as trade-marks. These latter two trade-marks are not the subject of this case. Other marks owned by the respondent in Canada were not raised in opposition and are not relevant to this appeal. Notably, there was no trade-mark registered by the respondent in relation to beauty products. Pink Panther Beauty Corporation, the appellant, was incorporated to sell hair care and beauty supplies under its own name, to be made available through beauty salons. On February 19, 1986, it applied to register the trade-mark "Pink Panther" (without the definite article) for proposed use in Canada in association with a wide variety of hair care and beauty product supplies, and in the operation of a business dealing in the distribution of hair care and beauty product supplies, and instructing and educating others in the distribution of hair care supplies and beauty products. The respondent opposed the registration. The Registrar decided, that there was no likelihood of confusion between the marks. He determined that the opponent's mark was not well-known in Canada, placing much emphasis on the difference in the goods and services used by United Artists as opposed to those proposed by Pink Panther Beauty Corporation. Explaining his decision, he said: Notwithstanding that the marks at issue are virtually identical, I have considered that the wares, services and trades of the parties are completely disparate and that the opponent failed to evidence any current reputation for the registered mark in Canada. Contrary to the Registrar's decision, the Trial Judge found the mark to be very famous and, therefore, worthy of a wide ambit of protection. Moreover, he placed weight on the fact that it had been in use in Canada for over thirty years. As well he thought that the marks were virtually identical. He did recognize that the nature of the wares or services, as well as the nature of the trade, was quite divergent. Pink Panther Beauty Corporation appeals that decision to this Court. The essential question in this case is whether the Trial Judge was correct in concluding that there was a likelihood that the appellant's mark would, in the mind of the average consumer, be confusing with the mark of the respondent. The law has been codified in section 6 of the Trade-marks Act which reads: 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) 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. . . . (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 (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them. In an application to the Registrar, the onus is on the applicant to show that there is no likelihood of confusion with the registered trade-mark in the mind of the average consumer. The onus remains on the applicant for registration in opposition proceedings just as it was on the application to the Registrar. The protection of trade-marks as property is based in the common law action for passing off. Historically, the marketplace has been very concerned with guaranteeing consumers the quality of goods that they had come to rely upon in the course of trade. To further that guarantee, the common law developed the tort of passing off, which helped to assure that a person was representing his or her goods as being his or her own goods and not the goods of someone else. A necessary element of the tort of passing off was always an attempt to deceive. When this attempt to deceive caused confusion and damage, it was actionable. While the rationale for the tort was to protect the public, it was not the consumer who sued, but the owner of the trade-mark who brought the action, thereby protecting the public, as well as its own interest. Today, even though the common law remedies are still available, trade-marks are protected statutorily and the action for passing off has been codified in paragraph 7(c) of the Act. The Act however, offers a wider ambit of protection than the old common law. First, the plaintiff in an infringement proceeding (or the opponent in an opposition proceeding) need not show that the goods or services are marketed in the same area as the old common law did. The registered trade-mark is valid across Canada and, along with it the owner possesses the right to its exclusive use in association with specified wares or services nationwide. As well, no damages need to be proven, nor indeed must an attempt to deceive be made out in order to succeed. It has been suggested that the common law action sought to protect the consumer's expectation of quality which resided in those marks. What the registered mark does nowadays is to ensure that the wares or services are the wares and services of a particular person and no one else, that is, the source of the goods is guaranteed. The question posed by the existence of intellectual property regimes has been defined as one of where to draw the line between the right to copy and the right to compete. This is a question about what is truly worthy of the status of property and what is in reality an element of the marketplace which should be open to all competitors to use in their efforts to succeed. I find this question a profitable one to keep in mind. For example, Henderson discusses the rationale behind protection for certain things and not others. He wrote: 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. And, most importantly, ideas, per se , are relatively useless. When deciding property issues it is always a matter of balancing the public right to competition with the private right to ownership. I do not find that this is limited to questions of intellectual property; an owner does not have unlimited rights with respect to personalty or realty. Consideration of the public interest is advanced through statute and through the common law (e.g. the tort of nuisance). When considering these types of questions the Court must be cognizant of the fact that the market relies on individuals who, through their labour and ingenuity, bolster the strength of our economy. That strength benefits us all. We must be careful when we determine property rights so that the line is drawn fairly between the right to the exclusive use of an idea and the right of individuals to compete and earn a livelihood. This dilemma is neatly summarized by Madam Justice McLachlin when she says: We must stop thinking of intellectual property as an absolute and start thinking of it as a function"as a process, which, if it is to be successful, must meet diverse aims: the assurance of a fair reward to creators and inventors and the encouragement of research and creativity, on the one hand; and on the other hand, the widest possible dissemination of the ideas and products of which the world, and all the individuals in it, have such great need. A person may propose a mark for registration, but, until it has been used, the trade-mark cannot be registered. That "use" is a defined term in the Act and does not refer to a state of being in operation. Subsection 4(1) states the following: 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 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. What is important is that the trade-mark be associated in the minds of the public with the goods produced by the trade-mark owner. It is the association of a trade-mark with a particular source which is the key to understanding the rights protected by the Act. This notion of source in relation to the goods is also fundamental to the definition of "distinctive" set out in the Act. Section 2 defines that term in this way: 2. . . ."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. Again, the Act makes clear that what is being protected is not the exclusive right to any mark that a person might think of, but the exclusive right to use it in association with certain products or services. Where there is no use of the mark, or where the consumer is unable to rely on the mark to distinguish one person's products or services from another person's products or services, then no protection is warranted. The right of exclusive use of the trade-mark granted by section 19 is valid only with respect to the wares and services stated in the registration. Section 20 of the Act prohibits the use of trade-marks which are confusingly similar to registered trade-marks, and their use is deemed to be an infringement. The question of confusion refers us back to section 6 of the Act. A trade-mark is a mark used by a person to distinguish his or her wares or services from those of others. The mark, therefore, cannot be considered in isolation, but only in connection with those wares or services. This is evident from the wording of subsection 6(2). The question posed by that subsection does not concern the confusion of marks, but the confusion of goods or services from one source as being from another source. It is for this reason that marks which rely on geographic origins or generally descriptive words (e.g. the fictional marks Pacific Coffee or Premium Soda) are not afforded a wide ambit of protection. Even though proposed marks might be similar to them, the public is not likely to assume that two products that describe themselves as being "Pacific" or "Premium" necessarily originate from the same source. Because confusion is not likely, protection is not necessary. This concentration on the source of the wares or services must inform any consideration of section 6 of the Act. Six factors are enumerated: five specific and one general one. I shall briefly discuss each one of them in turn. The five specific considerations that must be considered indicate that the Court must balance the right of the trade-mark owner to the exclusive use of his or her mark, with the right of others in the marketplace to compete freely. (a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known The first item listed under subsection 6(5) is the strength of the mark. This is broken down into two considerations: the inherent distinctiveness of the mark, and the acquired distinctiveness of the mark. Marks are inherently distinctive when nothing about them refers the consumer to a multitude of sources. Where a mark may refer to many things or, as noted earlier, is only descriptive of the wares or of their geographic origin, less protection will be afforded the mark. Conversely, where the mark is a unique or invented name, such that it could refer to only one thing, it will be extended a greater scope of protection. Where a mark does not have inherent distinctiveness it may still acquire distinctiveness through continual use in the marketplace. To establish this acquired distinctiveness, it must be shown that the mark has become known to consumers as originating from one particular source. In Cartier, Inc. v. Cartier Optical Ltd./Lunettes Cartier Ltée, Dubé J. found that the Cartier name, being merely a surname, had little inherent distinctiveness, but, nevertheless, it had acquired a great deal of distinctiveness through publicity. Likewise in Coca-Cola Ltd. v. Fisher Trading Co., the Judge found that the word "Cola" in script form had become so famous that it had acquired a very special secondary meaning distinctive of the beverage, and was, therefore, worthy of protection. (b) length of time in use The length of time that a mark has been used is obviously a factor which will contribute to confusion on behalf of the consumer in determining the origin of wares or services. A mark that has been in use a long time, versus one newly arrived on the scene, is presumed to have made a certain impression which must be given some weight. It is important to remember that "use" is a term defined by the Act and, therefore, has a special meaning. (c) nature of the wares, services or business Clearly, where trade-marks are similar, the degree to which the wares or servi
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