Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée

Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée
Collection
Supreme Court Judgments
Date
2006-06-02
Neutral citation
2006 SCC 23
Report
[2006] 1 SCR 824
Case number
30398
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
Intellectual property
Notes
SCC Case Information: 30398
Decision Content
SUPREME COURT OF CANADA
Citation: Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, [2006] 1 S.C.R. 824, 2006 SCC 23
Date: 20060602
Docket: 30398
Between:
Veuve Clicquot Ponsardin, Maison Fondée en 1772
Appellant
and
Boutiques Cliquot Ltée, Mademoiselle Charmante Inc.
and 3017320 Canada Inc.
Respondents
and
International Trademark Association
Intervener
Coram: McLachlin C.J. and Major,* Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.
Reasons for Judgment:
(paras. 1 to 71)
Binnie J. (McLachlin C.J. and Bastarache, LeBel, Deschamps, Fish, Abella and Charron JJ. concurring)
* Major J. took no part in the judgment.
______________________________
Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, [2006] 1 S.C.R. 824, 2006 SCC 23
Veuve Clicquot Ponsardin, Maison fondée en 1772 Appellant
v.
Boutiques Cliquot Ltée, Mademoiselle Charmante Inc.
and 3017320 Canada Inc. Respondents
and
International Trademark Association Intervener
Indexed as: Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée
Neutral citation: 2006 SCC 23.
File No.: 30398.
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 — Depreciation of goodwill — Owner of well‑known VEUVE CLICQUOT trade‑mark for wine and champagne seeking to stop small group of women’s wear shops from using registered trade‑mark CLIQUOT — Whether use of CLIQUOT name in relation to women’s clothing store likely to create confusion in marketplace with VEUVE CLICQUOT trade‑mark — Whether such use likely to depreciate value of goodwill attaching to VEUVE CLICQUOT trade‑mark — Trade‑marks Act, R.S.C. 1985, c. T‑13, ss. 6 , 20 , 22 .
Among those with champagne tastes, the brand of Veuve Clicquot Ponsardin is considered among the very best. It has been building its fine reputation with the drinking classes since before the French Revolution. The VEUVE CLICQUOT trade‑mark has also appeared on a range of promotional items, not offered for sale in Canada, including fashion wares for women and men. It is undoubtedly a famous trade‑mark that deserves wide protection not only from free‑riders but from those who, without any intention of free‑riding, nevertheless use in their own business distinguishing marks that create confusion or depreciate the value of the goodwill attaching to those of the appellant.
The appellant seeks to stop the respondents’ group of six women’s wear shops in Quebec and eastern Ontario from using the trade‑name Cliquot and the respondents’ own registered trade‑marks Cliquot and Cliquot “Un monde à part”, and to have these trade‑marks expunged from the Register. The appellant claims that consumers will likely be confused to the point of thinking that the women’s clothing and the champagne originate with the same source, thereby infringing the appellant’s registered trade‑marks contrary to s. 20 of the Trade‑marks Act . It further claims that even if the respondents’ use is not confusing, that use nevertheless depreciates the value of the goodwill attaching to its mark, contrary to s. 22 of the Act. The Federal Court concluded that the appellant was not entitled to expungement. Taking all the surrounding circumstances into account, the trial judge found there was little, if any, risk of confusion as to source. She also found that the use by the respondents of their registered trade‑marks did not reduce the value of the goodwill attaching to the appellant’s VEUVE CLICQUOT mark. The Federal Court of Appeal upheld the decision.
Held: The appeal should be dismissed.
The question whether there exists a likelihood of confusion is largely one of fact. Since this is an infringement claim rather than an opposition proceeding, the onus was on the appellant to prove such likelihood on a balance of probabilities. Under s. 6(2) of the Trade‑marks Act , confusion occurs “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.” In every case, the factors to be considered when making a determination as to whether a trade‑mark is confusing to the somewhat‑hurried consumer in “all the surrounding circumstances” include, but are not limited to, those enumerated in s. 6(5) of the Act. The fame of the mark is not, as such, an enumerated circumstance (although it is implicit in three of the enumerated factors, namely inherent distinctiveness, the extent to which a mark has become known, and the length of time that it has been used). The trial judge’s finding that VEUVE CLICQUOT is a “famous” mark is of importance in considering “all the surrounding circumstances” because fame presupposes that the mark transcends at least to some extent the wares with which it is normally associated. However, the fact of being famous or well known does not by itself provide absolute protection for a trade‑mark. It is one factor which must be assessed together with all the others. [14] [19] [21] [26‑27]
Here, having regard to all the surrounding circumstances and the evidence before the trial judge, there is no basis to interfere with her conclusion that there was no likelihood of confusion between the two marks in the relevant markets. The VEUVE CLICQUOT trade‑mark, registered in 1899, is distinctive. The respondents’ women’s wear boutiques are also known in the area in which both trade‑marks are used. Their marks, which were introduced in 1995, are not famous. However, the difference between the appellant’s luxury champagne and the respondents’ mid‑priced women’s wear is significant. While some trade‑marks transcend the wares, services and businesses with which they were originally associated, no witness in this case suggested that the VEUVE CLICQUOT mark would be associated by ordinary consumers with mid‑priced women’s clothing. The respondents’ goods and those of the appellant also move in different channels of trade and distribution. While it was unnecessary to lead evidence of actual confusion, it is nevertheless relevant to note that no such evidence was adduced. The appellant’s expert witness did little to suggest a likelihood of confusion; at most, she speculated about possibilities. Having considered all of the surrounding circumstances the trial judge held that ordinary consumers would be unlikely to make any mental link between the marks and the respective wares and services of the parties saying that in her view “. . . it is not likely that a consumer would think the plaintiff was affiliated with the defendants or that the plaintiff had granted a third party a licence to allow it to use the distinctive part of its mark in association with a women’s clothing store”. The appellant thus failed to discharge its onus of proving a likelihood of confusion. [6] [29] [31‑37]
With respect to the s. 22 depreciation claim, the appellant says that the fame of the VEUVE CLICQUOT mark for upmarket luxury goods is such that associating the name CLICQUOT (albeit misspelled as Cliquot) with a mid‑range women’s clothing store robs the appellant’s mark of some of its lustre, blurring its powerful association with top quality luxury goods, and thereby dilutes the distinctive qualities that attract high‑end business. If the champagne mark becomes associated in the public mind with a group of mid‑price women’s clothing shops, the “brand equity” the appellant has been building in France since the 18th century, and in this country since the 19th century, would be devalued and whittled away. Again, however, the onus of proof to establish the likelihood of such depreciation rested on the appellant. Despite the undoubted fame of its mark, the likelihood of depreciation was for the appellant to prove, not for the respondents to disprove, or for the court to presume. [15]
Section 22 of the Trade-marks Act has received surprisingly little judicial attention in the more than half century since its enactment. It seems that where marks are used in a confusing manner the preferred remedy is under s. 20 . Equally, where there is no confusion, claimants may have felt it difficult to establish the likelihood of depreciation of goodwill. The two statutory causes of action are conceptually quite different. Under s. 22, a claimant must establish (1) that its registered trade‑mark was used by the defendant in connection with wares or services; (2) that its mark is sufficiently well known to have significant goodwill attached to it; (3) that its mark was used in a manner likely to have an effect on that goodwill (linkage); and (4) that the likely effect would be to depreciate the value of its goodwill (damage). Nothing in s. 22 requires a demonstration that use of both marks in the same geographic area would likely lead to confusion. The appellant need only show that the respondents have made use of marks sufficiently similar to VEUVE CLICQUOT to evoke in a relevant universe of consumers a mental association of the two marks that is likely to depreciate the value of the goodwill attaching to the appellant’s mark. Without such a link, connection or mental association in the consumer’s mind between the respondents’ display and the VEUVE CLICQUOT mark, there can be no depreciation of the latter. [38] [46] [49]
Goodwill is not defined in the Act. In ordinary commercial use, it connotes the positive association that attracts customers towards its owner’s wares or services rather than those of its competitors. A court required to determine the existence of goodwill capable of depreciation by a “non‑confusing” use (as here) will want to consider, amongst other circumstances, the degree of recognition of the mark within the relevant universe of consumers, the volume of sales and the depth of market penetration of products associated with the claimant’s mark, the extent and duration of advertising and publicity accorded the claimant’s mark, the geographic reach of the claimant’s mark, its degree of inherent or acquired distinctiveness, whether products associated with the claimant’s mark are confined to a narrow or specialized channel of trade or move in multiple channels, and the extent to which the mark is identified with a particular quality. [50] [54]
In the instant case, the trial judge was correct to reject the s. 22 claim. The appellant did not establish that the respondents had made use of marks sufficiently similar to VEUVE CLICQUOT to evoke in a relevant universe of consumers a mental association of the two marks that is likely to depreciate the value of the goodwill attaching to the appellant’s mark. First, the respondents never used the appellant’s registered trade‑mark as such. Although the use of a misspelled Cliquot would suffice if the casual observer would associate the mark used by the respondents with the mark of the appellant, the trial judge found that a consumer who saw the word Cliquot used in the respondents’ stores would not make any link or connection to the appellant’s mark. The appellant’s s. 22 claim thus fails at the first hurdle. Second, while there is clearly considerable goodwill attaching to the VEUVE CLICQUOT mark that extends beyond wine and champagne, if the casual consumer does not associate the marks displayed in the respondents’ store with the mark of the venerable champagne maker, there can be no impact on the goodwill attached to VEUVE CLICQUOT. The appellant’s mark is famous, but a court cannot assume the issue of linkage or mental association in the appellant’s favour or reverse the onus onto the respondents to disprove such linkage. “Likelihood” is a matter of evidence, not speculation, and the appellant’s expert witness did not provide much assistance on this point. Accordingly, the appellant failed to establish the third element of the s. 22 test as well. Lastly, there is no evidence of “depreciation”. While the parties agreed to an order under Rule 153 of the Federal Court Rules relieving them of any need to call evidence as to damages flowing from any infringement alleged in this case (i.e. the s. 20 claim), the essence of liability under s. 22 is precisely the likelihood “of depreciating the value of the goodwill attaching” to the claimant’s trade‑marks. The extent of any actual depreciation might be left to a reference, but likelihood of depreciation is one of the elements of the cause of action. The reference was designed to deal with the subsequent quantification of s. 20 loss or entitlement, not the necessary conditions precedent to s. 22 liability. [38] [48‑49] [55‑61] [68‑70]
The respondents argued that the 1997 registration of their trade‑mark Cliquot and Cliquot “Un monde à part” is a complete answer to the appellant’s claim. However, the appellant put the validity of the registrations in issue and sought their expungement. Had the appellant succeeded in obtaining expungement, no doubt the respondents could have argued that they ought not to be liable to pay compensation attributable to the period during which their own registrations were in effect. However, as the appellants have not succeeded on this appeal, the scope of compensation is not an issue that arises for determination in this case. [16]
Cases Cited
Followed: Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772, 2006 SCC 22; referred to: 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; Canadian Council of Blue Cross Plans v. Blue Cross Beauty Products Inc., [1971] F.C. 543; Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192; Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003); Mastercard International Inc. v. Hitachi Credit (UK) Plc, [2004] EWHC 1623; Pebble Beach Co. v. Lombard Brands Ltd., [2002] S.L.T. 1312, [2002] ScotCS 265; DaimlerChrysler AG v. Alavi, [2001] R.P.C. 42, [2000] EWHC Ch 37; Baywatch Production Co. v. Home Video Channel, [1997] F.S.R. 22; Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101; Clairol International Corp. v. Thomas Supply & Equipment Co., [1968] 2 Ex. C.R. 552; Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (2002); Tiffany & Co. v. Boston Club, Inc., 231 F.Supp. 836 (1964); Polaroid Corp. v. Polaraid, Inc., 319 F.2d 830 (1963); Exxon Corp. v. Exxene Corp., 696 F.2d 544 (1982); Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200 (1979); Edgar Rice Burroughs, Inc. v. Manns Theatres, 195 U.S.P.Q. 159 (1976); Mattel Inc. v. Jcom Inc., 48 U.S.P.Q.2d 1467 (1998); Toys “R” Us Inc. v. Akkaoui, 40 U.S.P.Q.2d 1836 (1996); Anheuser‑Busch Inc. v. Andy’s Sportswear Inc., 40 U.S.P.Q.2d 1542 (1996).
Statutes and Regulations Cited
Federal Court Rules, 1998, SOR/98-106, rule 153.
Federal Trademark Dilution Act of 1995, H.R. Rep. No. 104‑374 (1995), reprinted in 1995 U.S.C.C.A.N. 1029.
Lanham Trade‑Mark Act, 15 U.S.C.A. §§ 1051 et seq.
Trade‑marks Act, R.S.C. 1985, c. T‑13, ss. 2 “confusing”, 4(1), (2), 6(1), (2), (5), 7, 18, 19, 20, 22, 53.2.
Trade Marks Act 1994 (U.K.), 1994, c. 26, arts. 5, 10.
Trademark Dilution Revision Act of 2006, H.R. 683, 109th Cong. (2006).
Authors Cited
American Law Institute. Restatement (Third) of Unfair Competition § 25, cmts. b, e. St. Paul, Minn.: American Law Institute Publishers, 1995.
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, vol. 1, 2nd ed. Toronto: Carswell, 1956.
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).
International Trademark Association. The Protection of Well‑Known Marks In the European Union, Canada and the Middle East: A Country and Regional Analysis. New York: INTA, October 2004.
Lindley & Banks on Partnership, 18th ed., by R.C. I’Anson Banks. London: Sweet & Maxwell, 2002.
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.
New Shorter Oxford English Dictionary, 5th ed. Oxford: Oxford University Press, 2002, “depreciate”.
Robinson, Christopher. “The Canadian Trade Marks Act of 1954 — A Review of Some of Its Features” (1959), 32 C.P.R. 45.
International Documents
European Communities. Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community Trade Mark, [1994] O.J. L. 11/1.
European Communities. First Directive 89/104/EEC of the Council, of 21 December 1988, to Approximate the Laws of the Member States Relating to Trade Marks, [1989] O.J. L. 40/1, arts. 4, 5.
APPEAL from a judgment of the Federal Court of Appeal (Desjardins, Noël and Nadon JJ.A.) (2004), 35 C.P.R. (4th) 1, [2004] F.C.J. No. 733 (QL), 2004 FCA 164, affirming a decision of Tremblay‑Lamer J. (2003), 232 F.T.R. 11, 28 C.P.R. (4th) 520, [2003] F.C.J. No. 148 (QL), 2003 FCT 103. Appeal dismissed.
Jacques A. Léger, Q.C., Barry Gamache and Marie‑France Major, for the appellant.
Louis Coallier and Alexandre Ajami, for the respondents.
Scott Jolliffe and Kevin Sartorio, for the intervener.
The judgment of the Court was delivered by
1 Binnie J. — Among those with champagne tastes, the brand of Veuve Clicquot Ponsardin is considered among the very best. It has been building its fine reputation with the drinking classes since before the French Revolution. Much credit is given to the efforts of the redoubtable Nicole Ponsardin Clicquot, widowed at the age of 27, who defied the convention of the day by taking the helm of her late husband’s small Champagne house in 1805 and has ever since been celebrated as La Veuve (the widow) and La Grande Dame de la Champagne (the grande dame of champagne). She lived almost 90 years and died in 1866. The venerable house of champagne has registered numerous marks in Canada on the Veuve Clicquot theme, including La Grande Dame. The appellant now seeks to stop the respondents’ small group of six women’s wear shops in the Québec, Sherbrooke, Montréal and Ottawa regions from using the trade-name Cliquot and the respondents’ own registered trade-marks Cliquot and Cliquot “Un monde à part” and to have these trade-marks expunged from the Register. The trade-marks of the appellant and respondents have co-existed in Quebec and eastern Ontario for about 10 years. The appellant claims that consumers will likely be confused that the women’s clothing and the champagne originate with the same source, thereby infringing the registered trade-marks of the appellant contrary to s. 20 of the Trade-marks Act, R.S.C. 1985, c. T‑13 . The appellant further claims that even if the use by the respondents is not confusing, it nevertheless depreciates the value of the goodwill attached to the appellant’s marks, contrary to s. 22 of the Act.
2 Within its wide circle of admirers, VEUVE CLICQUOT is undoubtedly famous and its trade-mark deserves wide protection not only from free-riders but from those who, without any intention of free-riding, nevertheless use in their own business distinguishing marks which create confusion or depreciate the value of the goodwill attaching to those of the appellant. In this case, however, the trial judge found that taking into account all the surrounding circumstances, there was little (if any) risk of confusion as to source. As to the alleged depreciation of the value of the goodwill, there was no evidence of any likelihood that as a result of the respondents’ use of Cliquot or Cliquot “Un monde à part”, the power of the VEUVE CLICQUOT mark to identify and distinguish the appellant’s products was lessened, or that its brand image was tarnished, or that the goodwill attaching to its brand was otherwise devalued or diluted. In the result, the trial judge was not persuaded that use by the respondents of its marks violated s. 22 of the Act. The Federal Court of Appeal agreed. Accordingly, the courts below concluded that the appellant had not, on the evidence, established either claim. I agree with that conclusion. Accordingly, the appeal should be dismissed.
I. Facts
3 The appellant, Veuve Clicquot Ponsardin, Maison fondée en 1772, operates under its own name and under associated trade-names, the business of making, distributing and selling wines and alcoholic beverages, notably champagne, across Canada and in many countries of the world. Its Canadian trade-mark registrations include VEUVE CLICQUOT, VEUVE CLICQUOT PONSARDIN, PRIX VEUVE CLICQUOT and LA GRANDE DAME and distinctive designs utilizing those words (all of which I will refer to collectively as the VEUVE CLICQUOT mark) for wines and champagne. The trade-marks, or variants thereof, have been used in connection with these products in Canada since at least 1899. More recently, VEUVE CLICQUOT has appeared on a range of promotional items (not offered for sale in Canada) including fashion wares such as vests, scarves and women’s dresses and, for men, ties, bow ties and waistcoats.
4 The appellant called evidence that its marketing strategy was to some extent aimed at women, and there was evidence of different events in Canada held to associate its brand with women of achievement (including a prize for the Business Woman of the Year in the 1980s). The appellant called an expert to discuss the importance of trade-marks in relation to luxury goods like champagne. The expert noted the potential expansion of trade-marks (or “brands”) like VEUVE CLICQUOT into other luxury markets. According to this witness, “If a mark in the luxury field is associated with products of a quality lower than the quality of its original sector, such a mark is likely to lose its prestige as a luxury mark.” The Court heard evidence that the VEUVE CLICQUOT trade-mark lends itself to an expansion beyond the products with which it was originally associated because it exhibits the four relevant fundamental characteristics of elasticity and mark extension, namely credibility, relevance, differentiation and elasticity. The issue was whether use by the respondents of the trade-mark Cliquot for their women’s clothing stores could lead a purchaser having an imperfect recollection of the appellant’s mark to confuse the one mark with the other. If so, the mistaken inference would thereby diminish the capacity of the appellant’s mark to identify and distinguish the appellant’s goods.
5 The respondents operate stores under the names Les Boutiques Cliquot and Cliquot at six locations in Quebec and Ottawa retailing women’s clothing in the mid-priced range targeted largely at career women. The second respondent, Mademoiselle Charmante Inc., is the registered owner of the trade-mark Cliquot and Cliquot “Un monde à part” which it has used since 1995. These marks were registered on August 1, 1997. The word “Cliquot” appears on the exterior sign at each of these locations, on bags and wrapping as well as on business cards and invoices, but not on the clothing itself. Under s. 19 of the Act, the respondents’ marks are presumptively valid, and entitles them to use the marks as described above.
6 The appellant’s expert, Ms. Monique Abitbol, testified that she had visited one of the respondents’ stores and felt that [translation] “this shop seems to put on airs of luxury without actually being a luxury shop”. (That was the substance of her commentary on the respondents. She did not venture an opinion on the impact of their use of trade-marks. Another witness, Yves Simard, purported to do so, but his evidence on this point was ruled unexpert and inadmissible.) While it was unnecessary to lead evidence of actual confusion, it is nevertheless relevant to note that no such evidence was adduced by the appellant in this case, leaving proof of the likelihood of both confusion and depreciation in the hands of the expert witnesses. Apart from Ms. Abitbol and Mr. Simard, none of the appellant’s witnesses addressed these issues.
7 Both the owner and the buyer of the respondents testified. The latter testified that she had seen an advertisement for the appellant’s products in a magazine and that the word CLICQUOT had attracted her attention because it reminded her of the expression “ça clique” (“this is great”) (hence the different spelling). The former said he liked the idea and contacted his lawyer before commencing use of the trade-mark Cliquot and that he had been advised that such use presented no legal difficulties. As stated, the Registrar subsequently approved the marks for registration. A witness for the appellant testified that the respondents’ application had not come to its attention prior to registration.
II. Relevant Statutory Provisions
8 See Appendix.
III. History of the Proceedings
A. Relevant Interlocutory Proceedings
9 The appellant instituted these proceedings on November 5, 1998. Eventually, the parties consented to an order permitting them “to proceed to trial without adducing evidence upon any question as to the damages and accounting of profits flowing from any infringement alleged in this case” (emphasis added). No such order was sought or granted in relation to the s. 22 depreciation claim.
B. Federal Court (2003), 28 C.P.R. (4th) 520, 2003 FCT 103
10 On the basis of the evidence before the court, Tremblay-Lamer J. concluded that (i) the advertisement seen by the respondents’ buyer could not have been any other than the appellant’s; (ii) the distinctive aspect of the appellant’s trade-marks is the word CLICQUOT; (iii) the appellant’s promotional wares covered a nondescript group of items only some of which could be regarded as for women (scarves and nightgowns). These articles were only offered for promotional purposes and the evidence did not establish that the plaintiff developed any strategy by which its mark was the subject of an extension into the fashion field or that it contemplated extending it into women’s clothing in the future; (iv) women constitute a market targeted by the appellant; (v) the appellant had not altered its trade-marks since their origin so as to extend them to other goods; (vi) the appellant’s evidence had not established any connection with the fashion world.
11 The trial judge acknowledged that, for confusion to occur, it was not at all necessary that the wares belong to the same general category. The appellant’s trade-marks are inherently distinct and are entitled to a broad measure of protection. Moreover, the word CLICQUOT being the key element of the trade-mark, “I feel that there is a great degree of resemblance between the marks of the plaintiff and those of the defendants” (para. 66). However, she noted “there is no connection between the plaintiff’s activities and those of the defendants” (para. 74). She noted, as well, that the role of the court was to take each of the factors in s. 6(5) into account “appropriately” and that “[t]he fact of being well known does not by itself provide absolute protection for a trade-mark. It is one factor which must be assessed together with all the others” (para. 75). On that basis, she found, “it is not likely that a consumer would think the plaintiff was affiliated with the defendants or that the plaintiff had granted a third party a licence to allow it to use the distinctive part of its mark in association with a women’s clothing store” (para. 76 (emphasis added)). She referred in this respect to the decisions of the Federal Court of Appeal in Pink Panther Beauty Corp. v. United Artists Corp., [1998] 3 F.C. 534, and Toyota Jidosha Kabushiki Kaisha v. Lexus Foods Inc., [2001] 2 F.C. 15 (“Lexus”).
12 The trial judge then turned to the arguments of the appellant that the use by the respondents of the trade-mark Cliquot depreciates the value of the goodwill attached to the appellant’s VEUVE CLICQUOT marks. She noted that the clothing sold by the respondents did not carry the label Cliquot. The respondents’ products as such were therefore not associated with the appellant’s trade-mark. Referring to her finding that confusion was not at all likely, the trial judge stated that “[a]lthough confusion is not the test laid down in s. 22, I consider that it [confusion] is still necessary for there to be an association between the two marks. In other words, a consumer has to be able to make a connection between the parties in order for there to be depreciation of the goodwill attaching to the trade-mark” (para. 94). In support of this conclusion, she cited Canadian Council of Blue Cross Plans v. Blue Cross Beauty Products Inc., [1971] F.C. 543 (T.D.). In the absence of any connection between the two trade-marks, however, the trial judge concluded that “the defendants’ trade-marks do not depreciate the value of the goodwill attaching to the trade-mark CLICQUOT, and that there has been no breach of s. 22 of the Act” (para. 97). The appellant was not entitled to expungement.
C. Federal Court of Appeal (Desjardins, Noël and Nadon JJ.A.) (2004), 35 C.P.R. (4th) 1, 2004 FCA 164
13 Noël J.A., writing for a unanimous court, concluded that the findings of the trial judge were supported by the evidence, and she had properly applied the law relating to confusion as laid down in Pink Panther and other cases. With respect to the claim under s. 22, he noted it was not established before the trial judge that the use by the respondents of their marks was likely to diminish the value associated with the appellant’s marks (para. 10). For these reasons, the appeal was dismissed.
IV. Analysis
14 This case is all about “famous” trade-marks. While less-than-famous trade-marks largely operate in their circumscribed field of wares, services and businesses, it is argued that “famous” marks transcend such limitations, and that broad effect must be given to the owner’s remedies in respect of likely confusion in the marketplace (s. 20 ) and likely depreciation of the value of the goodwill (s. 22) with that transcendence in mind. With respect to the s. 20 infringement claim, the fame of VEUVE CLICQUOT is such, the appellant says, that consumers who walk into the respondents’ women’s clothing shops will likely be confused into believing the dresses and fashion apparel come from the same source as the champagne, even though the type of product is very different, the products flow in different channels of trade and the registered trade-marks do not appear on the respondents’ garments. Regardless of these differences, fame conquers all, and the appellant seeks expungement of the respondents’ marks and an injunction. Whether or not there exists a likelihood of confusion is largely a question of fact. As this is an infringement claim (rather than an opposition proceeding before the Trade-marks Opposition Board), the onus was on the appellant to prove such likelihood on a balance of probabilities.
15 With respect to the s. 22 depreciation claim, the appellant says that the fame of the VEUVE CLICQUOT mark for upmarket luxury goods is such that associating the name CLICQUOT (albeit misspelled as Cliquot) with a mid-range women’s clothing store robs the appellant’s mark of some of its lustre, blurring its powerful association with top quality luxury goods, and thereby diluting the distinctive qualities that attract high-end business. If the champagne mark becomes associated in the public mind with a group of mid-priced women’s clothing shops, the “brand equity” the appellant has been building in France since the 18th century, and in this country since the 19th century, would be devalued and whittled away. Again, however, the onus of proof to establish the likelihood of such depreciation rested on the appellant. Despite the undoubted fame of the mark, the likelihood of depreciation was for the appellant to prove, not for the respondents to disprove, or for the court to presume.
16 The respondents say that the 1997 registration of their trade-mark Cliquot and Cliquot “Un monde à part” is a complete answer to the appellant’s claim. I do not agree. The appellant has put the validity of the registrations in issue and seeks expungement. Were the appellant to succeed in obtaining expungement, no doubt the respondents could argue that they ought not to be liable to pay compensation attributable to the period during which their own registrations were in effect. However, as the appellant has not succeeded on this appeal, the scope of compensation is not an issue that arises for determination in this case.
17 I will deal with each of the appellant’s claims in turn.
A. Infringement: The Creation of Confusion in the Marketplace
18 As discussed in the companion case of Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772, 2006 SCC 22, released concurrently, the purpose of trade-marks is to function as a symbol of the source and quality of wares and services, to distinguish those of the merchant from those of another, and thereby to prevent “confusion” in the marketplace. Confusion is to be understood, however, in a special sense. Parliament states in s. 6(1) that confusion occurs
if the use of the [appellant’s] trade-mark or trade-name would cause confusion with the [respondents’] trade-mark or trade-name in the manner and circumstances described in this section.
19 Such confusion occurs, we learn in s. 6(2)
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.
20 The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot on the respondents’ storefront or invoice, at a time when he or she has no more than an imperfect recollection of the VEUVE CLICQUOT trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks. As stated by Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192, at p. 202:
It is no doubt true that if one examines both marks carefully, he will readily distinguish them. However, this is not the basis on which one should decide whether there is any likelihood of confusion.
. . . the marks will not normally be seen side by side and [the Court must] guard against the danger that a person seeing the new mark may think that it is the same as one he has seen before, or even that it is a new or associated mark of the proprietor of the former mark.
(Citing in part Halsbury’s Laws of England, 3rd ed., vol. 38, para. 989, at p. 590.)
21 In every case, the factors to be considered when making a determination as to whether or not a trade-mark is confusing to the somewhat-hurried consumer “in all the surrounding circumstances” include, but are not limited to, those enumerated in s. 6(5) of the Act. These are: “(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”. The list of circumstances is not exhaustive and different circumstances will be given different weight in a context-specific assessment, as discussed in Mattel.
22 The appellant is now part of the Louis Vuitton luxury goods group. As one of its witnesses put it, [translation] “We are craftspeople of luxury goods.” The appellant exports 85 percent of its production worldwide to 100 or so countries and, making the most of its roots in France’s ancien régime, the marketing of the appellant’s champagne evokes aristocratic associations tinged with post-revolutionary romanticism. It is proudly said, for example, that in 1814 La Veuve was able to smuggle a shipment of her champagne to Russia, breaking a European blockade and ensuring that her champagne would be the first to reach the Imperial Court of Alexander I at Saint Petersburg. The appellant led evidence that people associated with the appellant commonly refer to the company as CLICQUOT and the champagne itself is sometimes called simply CLICQUOT.
23 The appellant called Ms. Abitbol, an expert in luxury brands, who affirmed the fame of the appellant’s marks but also acknowledged that she was unaware of the mark being utilized by the appellant for anything other than champagne. She felt it had the potential for broader exploitation in the luxury goods market. She cited the definition of “luxe” (luxury) in Le Petit Robert as a [translation] “[l]ifestyle characterized by lavish spending to purchase non-essential goods out of a taste for ostentation and greater well-being” but in her view, the concept of “luxe” had lost some of its narrow somewhat snobbish connotation in recent years.
24 The respondents’ stores, on the other hand, sell clothing that is marketed as good value rather than ostentatious, appealing to the career woman rather than grandes dames. Mr. Harvey Kom testified that the “target customers” of the respondents’ boutiques are
A. . . . young missy woman from twenty-five (25) to sixty (60) or fifty (50) years old, and with nice clothes with brand names.
Q. Brand names such as . . .?
A. Well, at that particular time we had Jones, we have Conrad C, we have Spanner, we have Luta, we have Simon Chang, we have Steelman. . . .
. . .
Q. . . . Do you sell fur coats in . . .
A. No, we don’t.
Q. Does the word “Clicquot” appear on any of the clothing in any of your Cliquot Boutiques?
A. It does not appear in any of the clothing.
Q. What is on the label of the clothing?
A. Either the manufacturer or the importer or their trade name.
25 The respondents’ stores sell dresses, coats, sweaters, blouses, pants, jackets, belts, scarves and pins. Its wares do not intermingle with those of the appellant:
Q. And had you ever offered for sale in your boutiques any Champagne, Sparkling Wines, Beer or any other type of alcoholic drink?
A. Not at all.
Q. Have you ever seen women’s clothing offered for sale in any of the liquor stores in Canada that you have visited?
Q. Not at all.
26 The finding that VEUVE CLICQUOT is a “famous” mark is of importance in considering “all the surrounding circumstances” because fame presupposes that the mark transcends at least to some extent the wares with which it is normally associated. The evidence is clear that VEUVE CLICQUOT carries an aura of luxury which may extend outside the wine and champagne business, and may (as the appellant’s expert stated) evoke a broad association with luxury goods. However, the same appellant’s expert testified that the respondents’ stores were not in the luxury class, and the question before the trial judge was whether potential shoppers in that mid-priced market, per