Mattel, Inc. v. 3894207 Canada Inc.

Mattel, Inc. v. 3894207 Canada Inc.
Collection
Supreme Court Judgments
Date
2006-06-02
Neutral citation
2006 SCC 22
Report
[2006] 1 SCR 772
Case number
30839
Judges
McLachlin, Beverley; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise
On appeal from
Federal Court of Appeal
Subjects
Administrative law
Intellectual property
Notes
SCC Case Information: 30839
Decision Content
SUPREME COURT OF CANADA
Citation: Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772, 2006 SCC 22
Date: 20060602
Docket: 30839
Between:
Mattel, Inc.
Appellant
v.
3894207 Canada Inc.
Respondent
Coram: McLachlin C.J. and Major,* Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.
Reasons for Judgment:
(paras. 1 to 92)
Concurring Reasons:
(para. 93)
Binnie J. (McLachlin C.J. and Bastarache, Deschamps, Fish, Abella and Charron JJ. concurring)
LeBel J.
* Major J. took no part in the judgment.
______________________________
Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772, 2006 SCC 22
Mattel, Inc. Appellant
v.
3894207 Canada Inc. Respondent
Indexed as: Mattel, Inc. v. 3894207 Canada Inc.
Neutral citation: 2006 SCC 22.
File No.: 30839.
2005: October 18; 2006: June 2.
Present: McLachlin C.J. and Major,* Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.
on appeal from the federal court of appeal
Intellectual property — Trade‑marks — Confusion — Restauranteur applying to register “Barbie’s” trade‑mark in connection with its small chain of restaurants — Manufacturer of BARBIE dolls opposing registration — Whether use of “Barbie’s” name in relation to restaurants likely to create confusion in market place with BARBIE trade‑mark — Trade‑marks Act, R.S.C. 1985, c. T‑13, s. 6 .
Administrative law — Judicial review — Standard of review — Trade‑marks Opposition Board of Canadian Intellectual Property Office — Board rejecting opposition to registration of trade‑mark — Standard applicable to Board’s decision.
The BARBIE doll is said by the appellant toy manufacturer to be an iconic figure of pop culture. The appellant opposes the respondent’s application to register its “Barbie’s” trade‑mark and a related design in association with “restaurant services, take‑out services, catering and banquet services” on the basis that some marks are so famous that “marks such as . . . BARBIE may not now be used in Canada on most consumer wares and services without the average consumer being led to infer the existence of a trade connection with the owners of these famous brands”. The Trade‑marks Opposition Board of the Canadian Intellectual Property Office (“Board”) accepted the respondent’s argument that its use of the “Barbie” name (since 1992) for its small chain of Montreal area restaurants would not likely create confusion in the marketplace with the appellant’s BARBIE trade‑mark and allowed the registration. The Board found BARBIE’s fame to be tied to dolls and doll accessories and that the respondent’s applied‑for mark, used in connection with very different products and services, was not likely to be confusing with any of the appellant’s BARBIE marks. Both the Federal Court and the Federal Court of Appeal upheld the Board’s decision. They also rejected the appellant’s application to introduce fresh evidence in the form of a survey proffered to show the likelihood of confusion between the marks.
Held: The appeal should be dismissed.
Per McLachlin C.J. and Bastarache, Binnie, Deschamps, Fish, Abella and Charron JJ.: The power of attraction of trade‑marks and other “famous brand names” is now recognized as among the most valuable of business assets. However, whatever their commercial evolution, the legal purpose of trade‑marks continues to be their use by the owner “to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others” (Trade‑marks Act, s. 2 ). A mark is a guarantee of origin and inferentially, an assurance to the consumer that the quality will be what he or she has come to expect. Nothing prevents the appellant from using its BARBIE trade‑mark to boost (if it can) sales of everything from bicycles to food products, but the question is whether the appellant can call in aid trade‑mark law to prevent other people from using a name as common as Barbie in relation to services (such as restaurants) remote to that extent from the products that gave rise to BARBIE’s fame. [2] [4]
Under s. 6(2) of the Trade‑marks Act , confusion arises if it is likely that the hypothetical purchaser — the casual consumer somewhat in a hurry — will be led to the mistaken 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”. The general class of wares and services, while relevant, is not controlling. All the surrounding circumstances must be considered, including the factors set out in s. 6(5) . In a context‑specific assessment, different circumstances will be given different weights. [51‑54]
The Federal Court of Appeal’s decisions in Pink Panther and Lexus should not be followed to the extent they suggest that, for confusion to occur, there must be “some resemblance or linkage to the wares in question”, i.e. to the wares for which registration of a trade‑mark is sought. Resemblance is clearly not a requirement under s. 6 . On the contrary, the point of the legislative addition of the words “whether or not the wares or services are of the same general class” conveyed Parliament’s intent that not only need there be no “resemblance” to the specific wares or services, but the wares or services marketed by the opponent under its mark and the wares or services marketed by the applicant under its applied‑for mark need not even be of the same general class. A trade‑mark’s fame is capable of carrying the mark across product lines where lesser marks would be circumscribed to their traditional wares or services. Each situation must be judged in its full factual context. A difference in wares or services does not “trump” all other factors, nor does the fame of a trade‑mark. The totality of the circumstances will dictate how each consideration should be treated. If, in the end, the result of the use of the new mark would be to introduce confusion into the marketplace, it should not be permitted “whether or not the wares or services are of the same general class” (s. 6(2)). [63‑65] [69‑72]
Parliament’s agreement that some trade‑marks are so well known that their use in connection with any wares or services would generate confusion does not mean that BARBIE has such transcendence. In the instant case, having regard to all the surrounding circumstances and the evidence before the Board, its decision that there was no likelihood of confusion between the two marks in the marketplace was reasonable. The onus remained throughout on the respondent to establish the absence of likelihood, but the Board was only required to deal with potential sources of confusion that, in the Board’s view, have about them an air of reality. When the relevant factors of the pragmatic and functional approach are properly considered, the standard of review applicable to the Board’s decision is reasonableness. The expertise of the Board and the “weighing up” nature of the mandate imposed by s. 6 of the Trade‑marks Act lead to that conclusion despite the grant of a full right of appeal. [25‑29] [40] [91]
BARBIE has acquired a strong secondary meaning associated with the appellant’s doll products and, on that account, has achieved considerable distinctiveness. The BARBIE mark also has deep roots and has been highly publicized over a large geographic area. The respondent’s applied‑for trade‑mark, which does not lie only in the word “Barbie” but in the totality of the effect, including the script in which it is written and the surrounding design, has become somewhat known within the area where both parties’ marks are used. The doll business and the restaurant business appeal to the different tastes of largely different clienteles. [75‑78]
Unlike the case with other forms of intellectual property, trade‑mark entitlement is based on actual use. Here, the Board did not accept that the BARBIE mark is “famous” for or distinctive of anything other than dolls and dolls’ accessories. Its assessment was supported by the evidence. If the BARBIE mark is not famous for anything but dolls and doll accessories and there is no evidence that BARBIE’s licensees are in the relevant markets using the BARBIE mark for “restaurant services, take‑out services, catering and banquet services”, it is difficult to see the basis on which a casual consumer somewhat in a hurry is likely to draw the mistaken inference. Quite apart from the great difference between the appellant’s wares and the respondent’s services, they occupy different channels of trade and the increased potential for confusion that might arise through intermingling in a single channel of trade is not present. [5] [82‑87]
The survey the appellant sought to adduce as fresh evidence was properly excluded. The issue in these opposition proceedings was the likelihood of confusion. The survey question (“Do you believe that the company that makes Barbie dolls might have anything to do with the restaurant identified by this sign or logo?”) addresses the wholly different issue of possibilities, rather than probability, of confusion. A survey that is not responsive to the point at issue is irrelevant and should be excluded on that ground alone. [44] [49]
Evidence of actual confusion would be a relevant “surrounding circumstance”. Such evidence is not necessary even where trade‑marks are shown to have operated in the same market area for a significant period of time because the relevant issue is “likelihood of confusion” not “actual confusion”. Nevertheless an adverse inference may be drawn from the lack of evidence of actual confusion in circumstances where it would readily be available if the allegation of likely confusion was justified. [55] [89]
Per LeBel J.: The Board’s decision was entitled to deference, but it had to be reasonable. On the facts of this case, as demonstrated by the analysis of the legal and factual issues in the majority’s reasons, the Board’s decision was indeed reasonable. [93]
Cases Cited
By Binnie J.
Explained: Pink Panther Beauty Corp. v. United Artists Corp., [1998] 3 F.C. 534; Toyota Jidosha Kabushiki Kaisha v. Lexus Foods Inc., [2001] 2 F.C. 15; referred to: Kirkbi AG v. Ritvik Holdings Inc., [2005] 3 S.C.R. 302, 2005 SCC 65; Aladdin Industries, Inc. v. Canadian Thermos Products Ltd., [1974] S.C.R. 845; Breck’s Sporting Goods Co. v. Magder, [1976] 1 S.C.R. 527; Consumers Distributing Co. v. Seiko Time Canada Ltd., [1984] 1 S.C.R. 583; Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, 2003 SCC 19; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R. (3d) 289; Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145; Novopharm Ltd. v. Bayer Inc. (2000), 9 C.P.R. (4th) 304; Garbo Creations Inc. v. Harriet Brown & Co. (1999), 3 C.P.R. (4th) 224; Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192; McDonald’s Corp. v. Silcorp Ltd. (1989), 24 C.P.R. (3d) 207, aff’d (1992), 41 C.P.R. (3d) 67; Lamb v. Canadian Reserve Oil & Gas Ltd., [1977] 1 S.C.R. 517; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; Moreau‑Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11; C.U.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29; Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3; Polo Ralph Lauren Corp. v. United States Polo Assn. (2000), 9 C.P.R. (4th) 51; Christian Dior, S.A. v. Dion Neckwear Ltd., [2002] 3 F.C. 405, 2002 FCA 29; Purafil, Inc. v. Purafil Canada Ltd. (2004), 31 C.P.R. (4th) 345, 2004 FC 522; Building Products Ltd. v. BP Canada Ltd. (1961), 36 C.P.R. 121; Paulin Chambers Co. v. Rowntree Co. (1966), 51 C.P.R. 153; Canadian Schenley Distilleries Ltd. v. Canada’s Manitoba Distillery Ltd. (1975), 25 C.P.R. (2d) 1; Joseph E. Seagram & Sons Ltd. v. Seagram Real Estate Ltd. (1990), 33 C.P.R. (3d) 454; Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 20 Alta. L.R. (3d) 146; Cartier Inc. v. Cartier Optical Ltd. (1988), 20 C.P.R. (3d) 68; Sun Life Assurance Co. of Canada v. Sunlife Juice Ltd. (1988), 22 C.P.R. (3d) 244; New Balance Athletic Shoes, Inc. v. Matthews (1992), 45 C.P.R. (3d) 140; National Hockey League v. Pepsi‑Cola Canada Ltd. (1992), 70 B.C.L.R. (2d) 27; McDonald’s Corp. v. Coffee Hut Stores Ltd. (1994), 55 C.P.R. (3d) 463, aff’d (1996), 68 C.P.R. (3d) 168; Unitel Communications Inc. v. Bell Canada (1995), 92 F.T.R. 161; Canada Post Corp. v. Mail Boxes Etc. USA, Inc. (1996), 77 C.P.R. (3d) 93; Coca‑Cola Ltd. v. Southland Corp. (2001), 20 C.P.R. (4th) 537; Molson Companies Ltd. v. S.P.A. Birra Peroni Industriale (1992), 45 C.P.R. (3d) 28; Molson Breweries v. Swan Brewery Co., [1994] T.M.O.B. No. 253 (QL); Toys “R” Us (Canada) Ltd. v. Manjel Inc. (2003), 229 F.T.R. 71, 2003 FCT 283; Safeway Stores, Inc. v. Safeway Insurance Co., 657 F. Supp. 1307 (1985); Gainers Inc. v. Marchildon (1996), 66 C.P.R. (3d) 308; Mr. Submarine Ltd. v. Amandista Investments Ltd. (1987), 19 C.P.R. (3d) 3; Morning Star Co‑Operative Society Ltd. v. Express Newspapers Ltd., [1979] F.S.R. 113; Klotz v. Corson (1927), 33 O.W.N. 12; Barsalou v. Darling (1882), 9 S.C.R. 677; Delisle Foods Ltd. v. Anna Beth Holdings Ltd. (1992), 45 C.P.R. (3d) 535; American Cyanamid Co. v. Record Chemical Co., [1972] F.C. 1271, aff’d (1973), 14 C.P.R. (2d) 127; Michelin & Cie v. Astro Tire & Rubber Co. of Canada Ltd. (1982), 69 C.P.R. (2d) 260; General Motors Corp. v. Bellows, [1949] S.C.R. 678, aff’g [1947] Ex. C.R. 568; Four Seasons Hotels Ltd. v. Four Seasons Television Network Inc. (1992), 43 C.P.R. (3d) 139; Coca‑Cola Co. of Canada Ltd. v. Pepsi‑Cola Co. of Canada Ltd., [1942] 2 D.L.R. 657, aff’g [1940] S.C.R. 17; Coombe v. Mendit Ld. (1913), 30 R.P.C. 709; Carson v. Reynolds, [1980] 2 F.C. 685; John Walker & Sons Ltd. v. Steinman (1965), 44 C.P.R. 58; James Burrough Ltd. v. Reckitt & Colman (Canada) Ltd. (1967), 53 C.P.R. 276; Leaf Confections Ltd. v. Maple Leaf Gardens Ltd. (1986), 12 C.P.R. (3d) 511, aff’d (1988), 19 C.P.R. (3d) 331; Danjaq, S.A. v. Zervas (1997), 75 C.P.R. (3d) 295; Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, [2006] 1 S.C.R. 824, 2006 SCC 23; Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026 (1989); Western Clock Co. v. Oris Watch Co., [1931] Ex. C.R. 64; Henry K. Wampole & Co. v. Hervay Chemical Co. of Canada, [1930] S.C.R. 336; British Drug Houses, Ltd. v. Battle Pharmaceuticals, [1944] Ex. C.R. 239; Ainsworth v. Walmsley (1866), L.R. 1 Eq. 518; ConAgra, Inc. v. McCain Foods Ltd. (2001), 14 C.P.R. (4th) 288, 2001 FCT 963; Panavision, Inc. v. Matsushita Electric Industrial Co. (1992), 40 C.P.R. (3d) 486; Freed & Freed Ltd. v. Registrar of Trade Marks, [1950] Ex. C.R. 431; Monsport Inc. v. Vêtements de Sport Bonnie (1978) Ltée (1988), 22 C.P.R. 356; Multiplicant Inc. v. Petit Bateau Valton S.A. (1994), 55 C.P.R. (3d) 372; Edelsten v. Edelsten (1863), 1 De G. J. & S. 185, 46 E.R. 72.
Statutes and Regulations Cited
Trade‑marks Act, R.S.C. 1985, c. T‑13, ss. 2 “confusing”, “trade‑mark”, 6, 7, 20, 22, 45(3), 50, 56(1), (5).
Treaties and Other International Instruments
Agreement on Trade‑Related Aspects of Intellectual Property Rights, 1869 U.N.T.S. 299 (being Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, 1867 U.N.T.S. 3), signed April 15, 1994, art. 15.
Authors Cited
Canada. Report of the Trade Mark Law Revision Committee, by Harold G. Fox, Chairman. Ottawa: Queen’s Printer, 1953.
Fox, Harold George. The Canadian Law of Trade Marks and Unfair Competition, 3rd ed. Toronto: Carswell, 1972.
Gervais, Daniel, and Elizabeth F. Judge. Intellectual Property: The Law in Canada. Toronto: Thomson/Carswell, 2005.
Gill, Kelly, and R. Scott Jolliffe. Fox on Canadian Law of Trade‑marks and Unfair Competition, 4th ed. Toronto: Carswell, 2002 (loose-leaf updated 2005, release 2).
Macquarie Dictionary, rev. 3rd ed. Sydney, Australia: Macquarie Library, 2002, “Barbie doll”.
McCarthy, J. Thomas. McCarthy on Trademarks and Unfair Competition, vol. 4, 4th ed. Deerfield, Ill.: Thomson/West, 1996 (loose‑leaf updated December 2005, release 36).
Mostert, Frederick W. Famous and Well‑Known Marks: An International Analysis. London: Butterworths, 1997.
Vaver, David. “Unconventional and Well‑known Trade Marks”, [2005] Sing. J.L.S. 1.
APPEAL from a judgment of the Federal Court of Appeal (Létourneau, Noël and Pelletier JJ.A.) (2005), 329 N.R. 259, 38 C.P.R. (4th) 214, [2005] F.C.J. No. 64 (QL), 2005 FCA 13, affirming a decision of Rouleau J. (2004), 248 F.T.R. 228, 30 C.P.R. (4th) 456, [2004] F.C.J. No. 436 (QL), 2004 FC 361, affirming a decision of the Trade‑marks Opposition Board (2002), 23 C.P.R. (4th) 395, [2002] T.M.O.B. No. 35 (QL). Appeal dismissed.
Paul D. Blanchard, Henry S. Brown, Q.C., and Lisa R. W. Vatch, for the appellant.
Sophie Picard, for the respondent.
The judgment of McLachlin C.J. and Bastarache, Binnie, Deschamps, Fish, Abella and Charron JJ. was delivered by
1 Binnie J. — The BARBIE doll is said by the appellant toy manufacturer to be an iconic figure of pop culture. And so, within limits, it is. The sale of various BARBIE products annually exceeds $1.4 billion worldwide, representing 35 percent of the appellant’s sales. The appellant advises that Canadian girls aged 3 to 11 years are given an average of two BARBIE dolls per year. The appellant therefore opposes the respondent’s application to register trade-marks in connection with its small chain of Montreal suburban “Barbie’s” restaurants on the basis that use of the name (albeit in relation to different wares and services) would likely create confusion in the marketplace. On a casual acquaintance with both marks, it is contended, there is a likelihood that consumers would think that the doll people had something to do with a restaurant called “Barbie’s”. Or, as the appellant framed its point in a consumer survey by asking the following question “Do you believe that the company that makes Barbie dolls might have anything to do with the restaurant identified by this sign or logo?” (Emphasis added.)
2 Merchandising has come a long way from the days when “marks” were carved on silver goblets or earthenware jugs to identify the wares produced by a certain silversmith or potter. Their traditional role was to create a link in the prospective buyer’s mind between the product and the producer. The power of attraction of trade-marks and other “famous brand names” is now recognized as among the most valuable of business assets. However, whatever their commercial evolution, the legal purpose of trade-marks continues (in terms of s. 2 of the Trade-marks Act, R.S.C. 1985, c. T-13 ) to be their use by the owner “to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others”. It is a guarantee of origin and inferentially, an assurance to the consumer that the quality will be what he or she has come to associate with a particular trade-mark (as in the case of the mythical “Maytag” repairman). It is, in that sense, consumer protection legislation.
3 The appellant advises that the name BARBIE and that of her “soul mate”, Ken, were borrowed by their original designer from the names of her own children. The name, as such, is not inherently distinctive of the appellant’s wares. Indeed, Barbie is a common contraction of Barbara. It is also a surname. Over the last four decades or so, however, massive marketing of the doll and accessories has created a strong secondary meaning which, in appropriate circumstances, associates BARBIE in the public mind with the appellant’s doll products.
4 The appellant’s argument is that the trade-mark BARBIE now transcends the products which originally it served to distinguish. Moreover, the appellant says, its fame goes beyond wares and services aimed at girls in the 3- to 11-year-old age group (its primary market) to the diverse products set out in various of its registrations (“[c]ologne, hand lotion and body lotion”), food products (“[s]pices, breads, cakes, cereal, coffee, crackers, flour, herbs, pies, ice cream, pizza”), as well as bicycles, backpacks, books and construction pads. Of course, nothing prevents the appellant from using its BARBIE trade-mark to boost (if it can) sales of everything from bicycles to cologne, or for that matter lawn mowers and funeral services, but the question is whether the appellant can call in aid trade-mark law to prevent other people from using a name as common as Barbie in relation to services (such as restaurants) remote to that extent from the products that gave rise to BARBIE’s fame.
5 Unlike other forms of intellectual property, the gravaman of trade-mark entitlement is actual use. By contrast, a Canadian inventor is entitled to his or her patent even if no commercial use of it is made. A playwright retains copyright even if the play remains unperformed. But in trade-marks the watchword is “use it or lose it”. In the absence of use, a registered mark can be expunged (s. 45(3)). There was no credible evidence that BARBIE has been used in Canada either by the appellant or by one of its licensees in connection with the services for which the respondent made trade-mark application, namely “restaurant services, take-out services, catering and banquet services”.
6 In opposition proceedings, trade-mark law will afford protection that transcends the traditional product lines unless the applicant shows the likelihood that registration of its mark will not create confusion in the marketplace within the meaning of s. 6 of the Trade-marks Act . Confusion is a defined term, and s. 6(2) requires the Trade-marks Opposition Board (and ultimately the court) to address the likelihood that in areas where both trade-marks are used, prospective purchasers will infer (incorrectly) that the wares and services — though not being of the same general class — are nevertheless supplied by the same person. Such a mistaken inference can only be drawn here, of course, if a link or association is likely to arise in the consumer’s mind between the source of the well-known BARBIE products and the source of the respondent’s less well-known restaurants. If there is no likelihood of a link, there can be no likelihood of a mistaken inference, and thus no confusion within the meaning of the Act.
7 The substance of the appellant’s argument (set out at para. 48 of its factum) is that “Mattel’s BARBIE trade‑marks are famous in Canada and worldwide, instantly evoking the image of the brand in the minds of consumers. Having acquired such fame, marks such as . . . BARBIE may not now be used in Canada on most consumer wares and services without the average consumer being led to infer the existence of a trade connection with the owners of these famous brands” (emphasis added). Some trade-marks may have that effect, but the Board found BARBIE’s fame to be tied to dolls and doll accessories. At this stage, its fame is not enough to bootstrap a broad zone of exclusivity covering “most consumer wares and services”. The Board was not required to speculate about what might happen to the BARBIE trade-mark in the future. It was required to deal with the respondent’s application on the facts established in the evidence.
8 The appellant relies on Professor J. T. McCarthy’s dictum, discussed below, that “a relatively strong mark can leap vast product line differences at a single bound” (McCarthy on Trademarks and Unfair Competition (4th ed. (loose-leaf)), at § 11:74). However, the evidence before the Board was that, for BARBIE, the present case was a leap too far, and that on the evidence prospective consumers will likely not infer that whoever owns the BARBIE doll trade-mark is associated in some way with the restaurants identified by the applied-for mark. This is a conclusion that was open to the Board.
9 As is permitted under s. 56(5) of the Act, the appellant sought to introduce fresh evidence before the applications judge about the likelihood of confusion but the proffered evidence was found to be unresponsive to the statutory test and on that account it was rightly rejected.
10 On this appeal, the Board’s decision should be upheld unless it is shown to be unreasonable. On the admissible evidence, the Board was not shown to be clearly wrong in its decision that the respondent restauranteur has established that it is not likely that prospective consumers will draw the mistaken inference. I would therefore affirm the reasonableness of the decision of the Board to accept registration of the respondent’s trade-mark and dismiss the appeal.
I. Facts
11 The respondent opened its first Barbie’s restaurant in Montreal in 1992. Over the years it has added two more (one of which subsequently closed). These are medium-priced “bar-and-grill” type operations, with meals including ribs, smoked meat, souvlaki, steak, chicken, seafood and pizza, much of which is barbecued (or, as the menu puts it, done on the “barbie-Q”), along with alcoholic beverages. There are also breakfast and lunch menus. The bulk of the business is sit-down clientele. The decor is predominantly geared to adults and the bar is an important feature of each location. The restaurants do offer a kids’ menu and a “kids eat free” promotion one night of the week but the Board found its target clientele to be adults. Compared to that of the appellant, it is a modest operation. Total restaurant sales for the six years 1992-1997 inclusive totalled about $11 million. Advertising expenses, including television, radio and newspaper advertising, amounted to about $616,000 for the same time period. In September 1993, an application (now assigned to the respondent) was made to register the trade-mark BARBIE’S & Design in association with “restaurant services, take-out services, catering and banquet services”. The applicant’s mark is prominently displayed on the exterior of the restaurants and on menus, napkins, matchbooks, receipts, order forms and business cards. The mark, as now applied for, looks like this:
12 There are clearly significant points of resemblance between the trade-marks of the appellant and the trade-marks applied for by the respondent. The appellant’s registered trade-mark looks like this:
BARBIE
13 The appellant’s trade-marks enjoy an extensive worldwide reputation for dolls and accessories primarily targeted at the market of 3- to 11-year-old girls. There are some adult collectors of BARBIE doll products. By 2001, sales, promotion, and advertising of BARBIE products across Canada generated annual sales revenues of approximately $75 million, annual licensing revenues of approximately $5 million, and annual advertising expenses of approximately $5 million. The appellant describes itself in these proceedings as being “in the business of building brand equity”. Licensing of the BARBIE trade-mark is commonplace and the wares or goods to which the trade-mark is attached are growing. The appellant sees licencing of the BARBIE trade-marks as an expanding and lucrative commercial opportunity. To date, BARBIE has not been used in Canada by the appellant or any of its licensees for restaurant services, take-out services, catering and banquet services. I generally will refer to the appellant’s trade-marks collectively as the BARBIE mark.
II. Relevant Statutory Provisions
14 See Appendix.
III. History of the Proceedings
A. Canadian Intellectual Property Office, Trade-marks Opposition Board (Member Herzig for the Registrar of Trade-marks) (2002), 23 C.P.R. (4th) 395
15 The Board found that both marks possessed a relatively low degree of inherent distinctiveness as they would be perceived as a nickname for or truncation of the name Barbara. Mattel’s mark was very well known in Canada when used in association with dolls and doll accessories. The trade-mark sought to be registered by the applicant restauranteur had established some reputation in the vicinity of Montreal but the length of time of use of the marks favoured Mattel. The nature of the opponent’s wares and the applicant’s services were “quite different”. Mattel’s target market is children and, to some extent, adult collectors, whereas the applicant is in the restaurant business and its primary target market is adults. The marks were essentially the same aurally and in the ideas they suggested, and the overall visual impressions of the marks were essentially the same after the fairly non-distinctive design feature of the applicant’s mark was discounted.
16 Though the opponent (now the appellant) in this case had attempted to demonstrate a connection between food and food-related products sold under its own BARBIE trade-marks and the applicant’s restaurant services, the Board did not accept the submission that there was any real connection between the two. Although the opponent was not required to show any instances of actual confusion, and it had not done so, the absence of such evidence was only one circumstance among many to be considered.
17 In the circumstances, the Board found that the respondent’s mark was not likely to be confusing with any of Mattel’s BARBIE marks at the relevant times. The Board rejected the opposition and allowed the registration.
B. Federal Court (Rouleau J.) (2004), 248 F.T.R. 228, 2004 FC 361
18 The applications judge observed that “[i]t cannot be automatically presumed that there will be confusion just because [Mattel’s BARBIE] mark is famous” (para. 40). The test was that of reasonable likelihood of confusion and the fame of a mark “could not act as a marketing trump card such that the other factors are thereby obliterated” (para. 40). All of the relevant factors listed in s. 6(5) of the Trade-marks Act had to be evaluated, and “[o]ne of the key factors in this case is the striking difference between the wares” (para. 17). He stated that “confusion is less likely when the wares are significantly different, even when the mark is well known” and that “when the wares are significantly different, this factor must be given considerable weight” (paras. 17-18). In this case, he stated “the nature of the wares, as well as the nature of the business of both parties, could not be more different” (para. 21) and “there is nothing about these restaurants that is suggestive of toys, dolls or childhood” (para. 20).
19 The applications judge rejected Mattel’s application to introduce fresh evidence in the form of a survey proffered to show the likelihood of confusion between the marks because in his view the survey “ha[d] some blatant and determinative shortcomings that undermine[d] its relevance considerably” (para. 27). The result was that the survey could not be used to establish the existence of a real likelihood of confusion. It only served to show that Mattel’s BARBIE trade-marks were indeed famous. There was no evidence of any concrete case of confusion despite the co-existence of the marks in the Montreal area for 10 years. In the result, the applications judge dismissed the appeal.
C. Federal Court of Appeal (Létourneau, Noël and Pelletier JJ.A.) (2005), 329 N.R. 259, 2005 FCA 13
20 The appellate court concluded that no error had been committed by the applications judge in rejecting the survey evidence because of the way the survey firm had framed its questions. At best, the survey results might be probative of a possibility of confusion, which falls short of the threshold of a reasonable likelihood of confusion. In the result, the conclusion of the applications judge was agreed with. The appeal was dismissed.
IV. Analysis
21 Trade-marks are something of an anomaly in intellectual property law. Unlike the patent owner or the copyright owner, the owner of a trade-mark is not required to provide the public with some novel benefit in exchange for the monopoly. Here, the trade-mark is not even an invented word like “Kodak” or “Kleenex”. The appellant has merely appropriated a common child’s diminutive for Barbara. By contrast, a patentee must invent something new and useful. To obtain copyright, a person must add some expressive work to the human repertoire. In each case, the public through Parliament has decided it is worth encouraging such inventions and fostering new expression in exchange for a statutory monopoly (i.e. preventing anyone else from practising the invention or exploiting the copyrighted expression without permission). The trade-mark owner, by contrast, may simply have used a common name as its “mark” to differentiate its wares from those of its competitors. Its claim to monopoly rests not on conferring a benefit on the public in the sense of patents or copyrights but on serving an important public interest in assuring consumers that they are buying from the source from whom they think they are buying and receiving the quality which they associate with that particular trade-mark. Trade-marks thus operate as a kind of shortcut to get consumers to where they want to go, and in that way perform a key function in a market economy. Trade-mark law rests on principles of fair dealing. It is sometimes said to hold the balance between free competition and fair competition.
22 Fairness, of course, requires consideration of the interest of the public and other merchants and the benefits of open competition as well as the interest of the trade-mark owner in protecting its investment in the mark. Care must be taken not to create a zone of exclusivity and protection that overshoots the purpose of trade-mark law. As Professor David Vaver observes:
On the one hand, well-known mark owners say that people should not reap where they have not sown, that bad faith should be punished, that people who sidle up to their well-known marks are guilty of dishonest commercial practice. These vituperations lead nowhere. One might as well say that the well-known mark owner is reaping where it has not sown when it stops a trader in a geographic or market field remote from the owner’s fields from using the same or a similar mark uncompetitively.
(D. Vaver, “Unconventional and Well-known Trade Marks”, [2005] Sing. J.L.S. 1, at p. 16)
23 The purpose of trade-marks is to create and symbolize linkages. As mentioned, s. 2 of the Trade-marks Act defines “trade-mark” to mean
(a) a mark that 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 . . . .
To the same effect is art. 15 of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, 1869 U.N.T.S. 299, which defines “trade-mark” in part as
[a]ny sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings . . . .
24 As the Court put it in Kirkbi AG v. Ritvik Holdings Inc., [2005] 3 S.C.R. 302, 2005 SCC 65, a trade-mark is “a symbol of a connection between a source of a product and the product itself” (per LeBel J., at para. 39). If, as the Board found, it is not likely that even casual consumers will make a connection between the source of BARBIE dolls and the respondent’s restaurants, then the appellant’s marks have received the protection to which the law entitles them.
25 The onus remained throughout on the respondent to establish the absence of likelihood, but the Board was only required to deal with potential sources of confusion that, in the Board’s view, have about them an air of reality.
26 The appellant’s aggressive defence of trade-mark protection is, of course, understandable. It not only seeks to exploit the BARBIE “brand equity” it has worked to establish but, like all trade-mark owners, is required by law to protect its trade-marks from piracy or risk having such marks lose their distinctiveness, and, potentially their legal protection: Aladdin Industries, Inc. v. Canadian Thermos Products Ltd., [1974] S.C.R. 845; Breck’s Sporting Goods Co. v. Magder, [1976] 1 S.C.R. 527.
27 At common law, the appellant’s recourse would have been to commence an action for “passing off” with its roots in the law of deceit. There is a good deal of that flavour about the appellant’s complaint. In its factum, it says the respondent offered “no credible explanation” for choosing the Barbie name for its restaurants which “arouses suspicion” and should be seen as “an attempt to trade on the goodwill and reputation of the famous trade-mark”. In an action for passing off, it would have been necessary for the appellant to show that the respondent restauranteur intentionally or negligently misled consumers into believing its restaurant services originated with the appellant and that the appellant thereby suffered damage (Consumers Distributing Co. v. Seiko Time Canada Ltd., [1984] 1 S.C.R. 583, at p. 601; Kirkbi, at para. 68). Quite apart from the issue of damages, the disparity between dolls and restaurant services would have posed, in the context of a passing-off action, an uphill battle and the appellant has not even tried to climb it.
28 Under the Trade-marks Act , however, the appellant’s protected commercial space is not so limited. It relies in particular on the 1953 amendments and the antecedent Report of the Trade Mark Law Revision Committee (January 20, 1953) chaired by the redoubtable Dr. Harold G. Fox, Q.C. (“Fox Report”). The appellant contends that “[t]he scope of protection of famous marks in Canada was an important justification for the enactment by Parliament and proclamation” of the amendment and notes the following passage in the Fox Report:
Some trade marks are so well known that the use of the same or similar trade marks on any wares of any kind would cause the general purchasing public to believe that the original user and owner of the trade mark was in some way responsible for the wares to which the use of the mark has been extended. [Emphasis added; p. 23.]
Parliament recognized the truth of that statement in 1953 and the subsequent experience of more than 50 years has borne out its wisdom. The problem is to apply the broad principle to particular situations in a way that is fair to all concerned.
29 In my view, with respect, the appellant’s case is based on an overgeneralization. The fact that Parliament has recognized that some trade-marks are so well known that use in connection with any wares or services would generate confusion is not to say that BARBIE has that transcendence. As the Fox Report also stated:
In a proper case this [new] ambit of protection can be widened to include the whole of the course of trade or restricted to a field limited by the use which has been made of a trade mark or trade name and the reputation acquired by it. The particular ambit of protection will in the future so far as applies to registration, be a matter for determination, having regard to all the circumstances, by the Registrar in the first instance, and by the Exchequer Court on appeal. [p. 27]
30 No doubt some famous brands possess protean power (it was submitted, for example, the distinctive red and