BMW Canada Inc. v. Nissan Canada Inc.

BMW Canada Inc. v. Nissan Canada Inc.
Court (s) Database
Federal Court Decisions
Date
2007-03-07
Neutral citation
2007 FC 262
File numbers
T-1395-05
Decision Content
Date: 20070307
Docket: T-1395-05
Citation: 2007 FC 262
BETWEEN:
BMW CANADA INC.
BAYERISHE MOTOREN WERKE AKTIENGESELLSCHAFT
Plaintiffs
and
NISSAN CANADA INC.
Defendant
REASONS FOR JUDGMENT
MACKAY D.J.
[1] The Plaintiffs seek relief by declaration, by injunction and in damages or loss of profits, to redress the Defendant’s alleged infringement, and depreciating the value of the goodwill, of certain registered trade-marks, contrary to ss. 20 and 22 respectively of the Trade-Marks Act, R.S.C. 1985, c. T-13 as amended, (the Act).
[2] They also seek declaratory relief against the use by the Defendant of the trade-marks M and M6 which use is said to violate the Plaintiffs’ proprietary rights in the trade-marks M, M3, M5, M6 and M and Design, contrary to paragraph 7(b) of the Act. The defendant’s use of the marks M and M6 in association with automobiles, in advertising, promoting, offering for sale and selling automobiles, parts and accessories, is alleged to cause confusion concerning the sources of the wares of the Plaintiffs and those of the Defendant.
[3] For the reasons that follow, I conclude that the plaintiffs’ claim under s. 20 of infringement of their exclusive rights in certain registered trade-marks is not established, and that their claim under s. 22 for depreciation of the value of goodwill attaching to the same registered trade marks by the defendant’s use of the marks M and M6 is not established. I do find, however, that the defendant’s use of the letter M, alone, in form similar to that of the plaintiffs’ trade-mark M, alone, and its use of M6 as a package for modifying one of its vehicles, cause confusion in Canada between the sources of the wares of the defendant and the wares of the plaintiffs.
BMW – its cars and trade-marks
[4] The Plaintiffs are BMW Canada Inc. (BMW Canada), incorporated under the laws of Canada, a wholly owned subsidiary of the other Plaintiff, Bayerische Motoren Werke Aktiengesellschaft (BMW AG), a company incorporated pursuant to the laws of Germany. The two companies together are here referred to as BMW. BMW is known throughout Canada as a major supplier, and the German parent corporation is known throughout much of the world as a major manufacturer and supplier, of automobiles, parts and accessories. BMW has manufactured, sold, distributed and promoted a number of models of automobiles, parts and accessories through BMW Canada. BMW’s vehicles are widely known for high quality craftsmanship in their production and for their high performance.
[5] Within BMW AG is a wholly owned, separate corporation, BMW M GmbH, originating in 1972 as BMW Motorsport GmbH, known within BMW simply as M, with its own directing staff and its own research and some manufacturing facilities. Its primary function is to adapt advanced automobile technology from BMW’s racing cars for use in especially high performance cars produced for regular highway use for the high end, or expensive, consumer market. These cars, produced by extensive adaption from some of BMW’s regular models, originally by BMW M GmbH but more recently as directed by M on BMW’s regular assembly lines, are known as “M cars” within BMW.
[6] For these cars BMW uses the letter M combined with a number or a word in trade-marks applied to particular lines or series of vehicles. Those automobiles and the parts and accessories for BMW models are produced, and sold at higher cost than regular models, with a cachet of exclusiveness among their owners and within BMW. That cachet is enhanced, it is thought by BMW representatives, by restricting M car production so that buyers of these cars must order a vehicle some months in advance of delivery. New M cars are not readily available for purchase in the showrooms of dealers without a prior order for future delivery.
[7] BMW AG is the owner of numerous trade-marks which BMW Canada has been licensed to use in this country. Among BMW AG’s claims to ownership of trade-marks, of particular interest in this action are M, M3, M5, M6, and M and Design, which are said to have been used in association with automobiles, parts and accessories in Germany and in Canada. Among those marks BMW AG owns the following registered Canadian trade-marks, all for use in relation to wares, i.e. automobiles and parts:
Registration TMA 544, 922 (for M3)– issued May 11, 2001
M3
Registration TMA 561, 482 (for M5) – issued May 7, 2002
M5
Registration TMA 336, 985 (for M and design) – issued February 12, 1998
(drawing is lined for colours blue, purple and red)
[8] The marks M and M6, are said to have been used in Canada and both are currently the subjects of applications for registration by BMW.
[9] BMW AG also owns other registered marks in Canada which include as one element the letter M. These are the marks: M SERIES (Registration TMA 614,701, issued July 13, 2004) for automobiles and their constituent parts; M POWER design (Registration TMA 329,972, issued July 10, 1987) (with horizontal color bars in blue, purple and red for the design M POWER) for automobiles and their constituent parts, namely engines; M‑THE MOST POWERFUL LETTER IN THE WORLD (Registration TMA 664,704 dated May 19, 2006), and M-THE MOST POWERFUL LETTER (Registration TMA 664,875 dated May 24, 2006), both for automobiles and their constituent parts, and for services: organization of car racing and car club events.
[10] In 2005 and 2006 BMW applied for registration for additional marks including: M NIGHT (Application 1,269,440, filed August 22, 2005 and revised February 6, 2006) for retail services in the field of automobiles, motorcycles, and parts and accessories therefore, retail services in the field of fashion accessories, life style articles, sporting articles and clothing, organizing and hosting of automobile theme parties and celebrations; M (Application No. 1,271,794 filed September 13, 2005) in relation to automobiles and their parts and to automotive retail services; M ROADSTER and M COUPE (Applications 1,273,588 and 1,273,589, both filed September 27, 2005) both for automobiles and parts; M SPORT PACKAGE and M EXECUTIVE PACKAGE and M PERFORMANCE EDITION (Application numbers 1,274,093 and 1,274,092 and 1,274,333 respectively, all filed September 30, 2005) all for automobiles and their parts; and M6 (Application No. 1,244,305 filed April 6, 2006 revised May 2, 2006) for automobiles and parts. All of these applications for registration by BMW, including those for M alone and M6 which are specifically at issue in this case, were filed after commencement of this action by BMW.
[11] BMW has also used the letter M in association with certain automobile parts and accessories, including 16 different “M parts”, e.g., M Suspension, M Sports Seats, M steering wheel, M wheels, and with the special packages known as M Sport Package, M Performance Edition, and M Executive Package. Each package consists of M parts and accessories to “dress” a regular BMW car to look, or to perform, in some respects like an M car. The use of the letter M in trade-marks and on these products and packages is considered by BMW as a sign of the strength and reputation of its M trade-mark.
[12] The various M marks used by BMW AG are known within BMW as the “Family of M trade-marks”. The M6 and the M and design trade-marks are said to have been used in Canada as early as 1986 at least in advertising, and the M3, M5 and M trade-marks are said to have been used in Canada as early as 1987.
[13] The first M car manufactured and sold was the M1 model, in 1978. In Canada the first M car promoted and sold was the M6 car in 1987, followed by the M3 and the M5. In the 1990’s the M corporation began producing M-individual cars, each produced on a customized order with selected materials and parts for an individual customer. In recent years BMW has promoted and sold a variety of M cars, not all series in a given year. In Canada, M cars sold in 2006 included the M3 Coupe, the M3 Convertible, the M3 Cabriolet, the M5, M6, M6 Convertible, M Roadster and M Coupe.
[14] BMW M cars bear the M and design mark (three coloured forward slash marks followed by a forward sloping M (i.e. as depicted above for TMA 336,985, sometimes depicted in the design mark with the M as a scroll letter, and sometimes in written text as ///M)). This mark is on the shift lever, the lower portion of the steering wheel, the wheels, the rear trunk lid, the dashboard, the kick plate, and the M cars also bear the BMW logo (a roundel with white and blue alternating quarters of a circle surrounded by a double ring containing the letters BMW), which appears at the centre front, at the centre rear of the vehicle, and also at the centre of the steering wheel. The cars are not marked with any stand-alone M letter mark and, of course, they do not bear any mark registered or claimed by Infiniti.
[15] BMW believes that because of its sales and promotions, these vehicles have come to be widely known and generally referred to, not only within BMW but also in their market, particularly by auto journalists and car enthusiasts, as “M cars”. BMW representatives also believe, but they have no records to support the belief, that success in advertising, sales and performance of its M cars and parts enhances sales and reputation of its regular vehicles. In their view the promotion and sale of M cars creates a halo or an aura effect which benefits its marketing of regular BMW cars.
Nissan – its Infiniti cars and trade-marks
[16] The defendant, Nissan Canada Inc. is incorporated pursuant to the laws of Ontario. It is also in the business of selling, distributing and promoting automobiles and accessories in Canada. Infiniti is a luxury division within Nissan through which the Defendant sells its Infiniti cars, including its reasonably expensive M35 and M45 model automobiles which are promoted as high performance vehicles.
[17] The defendant, Nissan Canada Inc., is the licensee of a number of registered Canadian trade-marks, including registration No. 612,708 for M45 (registered June 15, 2004), and registration No. 640,144 for M35 (registered on May 19, 2005), both for use in association with motor vehicles, namely automobiles, trucks, vans, sport utility vehicles, and structural parts thereof. The two marks are used for two series of Infiniti vehicles, the M35 and the M45 that have generally similar manufactured bodies but with different engines. Both marks are registered in the name of the parent company of Nissan Canada Inc., i.e., Nissan Jidosha Kabushiki Kaisha, of Japan. Within Nissan Canada Inc. cars bearing these trade-marks are known as Infiniti M vehicles, and they have been referred to by some automobile journalists as M cars or Infiniti M cars.
[18] After this action commenced, in 2006 Nissan, the parent company, also applied for Canadian registered trade-marks for the marks M20, M37, M40, M48, M50, M55 and M56, each for use in association with motor vehicles, namely automobiles, trucks, vans, sport utility vehicles and structural parts therefore. These marks, if obtained, are said to be intended to be used to reflect various engine sizes contemplated to be installed in future Infinity M vehicles.
[19] Since January 2005, Infiniti has offered 3 models of Infiniti M vehicles in Canada, the M35, the M35X (an all-wheel drive vehicle), and the M45. In addition to the badge of its appropriate trade-mark, each of the Infiniti M cars has the Infiniti logo on the centre of the front grill and the name Infiniti on the back of the car. Infiniti M vehicles are not marked with a stand-alone M, or any trade-mark claimed by BMW.
[20] In 2005 and 2006 in bill board, newspaper and television advertising of its new Infiniti M vehicles Nissan Canada used the letter M standing alone, sometimes with an automobile outlined above a stylized partial letter, i.e., the upper portion of the letter M, not readily identified as the letter M but described at trial as a large M flowing off the bottom of the advertisement. Some of these advertisements omitted the letter “M” in words such as “outperfor_” and “do_inate”. Some of that advertising stated that “the M is coming”, later ads stated “the M is here”, then “The 2006 M” and “The 2007 M”. All of these “teaser” ads included Infiniti’s logo and, in smaller type font, the name Infiniti. The M alone symbol used by Infiniti in its advertising has also been used on banners designating Infiniti displays at auto shows.
[21] In form that symbol, the M, has been comparable to a similar M alone symbol used by BMW in recent years in some advertising, in promotional brochures, and on banners, tickets and advertising used for “M Night”, a Montreal event, annually from 2001 to 2005, coincident with the Formula One race there, to promote BMW’s M cars. Both manufacturers have used the letter as an upper case or capital M with vertical legs. As we have seen BMW also uses the letter M as an element in marks with numbers or words or in its M and design trade-mark, but in the last of those the letter is forward sloping or in script rather than in vertical print.
[22] Infiniti also uses the “M6” to designate a sports package, optional for purchasers of the Infiniti G35, to upgrade the standard Infiniti vehicle. The M6 package was introduced a few years after BMW’s M6 vehicle was sold in Canada at a time when the only M6 cars available in this country would have been used, or pre-owned, vehicles. Neither M6 nor M alone is the subject of an application for registration as a trade-mark in Canada by Nissan.
[23] Nissan’s Infiniti vehicles are classified by the manufacturer in 3 series, those classed as G, those of medium range and price classed as M, and the most expensive class is Q. The M35 and M45 vehicles are not generally considered, even within Nissan, as competitive in high performance and price with BMW M cars. They are considered as luxury vehicles and are compared with regular BMW vehicles usually of the 5 series.
Relief sought by the plaintiff
[24] At the root of the plaintiff’s concerns is the use by Infiniti of brochures, banners and advertisements using the letter M alone in association with automobiles. The various forms of relief sought by BMW in this action exclude any claim against Nissan for its use of its registered Canadian trade-marks M35 and M45, but the relief sought is directed against any other use of the letter M by Nissan Canada Inc. In particular BMW objects to the use by Nissan of the letter M standing alone in its advertisements, and the use of M6 for a sports package developed for the Infiniti G35, or any other use of the letter M. The relief sought by BMW includes declaratory relief that the Defendant:
(a) is deemed to have infringed BMW’s rights in relation to registered trade-marks M3, M5 and M and design, contrary to s. 20 of the Act;
(b) has depreciated the value of good will attaching to those same registered trade-marks, contrary to s. 22 of the Act; and
(c) by use of the trade-mark M and use of the trade-mark M6 violates the Plaintiffs’ proprietary rights in the trade-marks M, M3, M5, M6, and M and Design, contrary to s.7(b) of the Act.
[25] The Plaintiffs also seek an injunction against the Defendant’s use of trade-marks that would adversely affect the Plaintiffs’ trade-mark rights, an order for delivering up or destruction of all materials that may offend the terms of any injunction granted. Damages, or profits of the defendant, arising as a result of trade-mark infringement or depreciation of the value of registered marks, and interest before and after judgment at a rate greater than the prevailing prime rate, are also claimed, to be determined in accord with a bifurcation order, made before trial, providing for severance of issues of damages or any accounting profits, if necessary. Finally, costs are requested on a solicitor and client basis.
The significance of the M mark for BMW
[26] As we have seen the letter M is an element in numerous trade-marks registered or applied for in Canada by BMW. It is highly prized as a symbol by BMW and the letter, M alone, appears in promotional brochures of the plaintiffs, in films, in corporate publications including books about BMW’s M cars and products, and in product guides used by dealers and for internal ordering. It is also used in banners mounted for celebrating “M Night” in Montreal, as we have noted, and for “M Tours” at various locations in major Canadian centres, where M-cars and their owners are major attractions. Thus, in promotion of its M cars, the letter M has been used by the plaintiffs in Canada for some years. In that and in advertising and promotion activities BMW policy directs that the general corporate mark, its logo, i.e., the BMW roundel, or other registered trade-mark accompany an M used, and one or more other marks generally accompany a stand-alone letter M when used in BMW materials.
[27] It has not been used, by itself, as a trade-mark on any of BMW’s M cars, but in addition to registered trade-marks, such as M3 or M5 those cars are marked with the M and design mark, sometimes referred to at trial as the “M badge”.
[28] It is to be remembered that the letter M alone, is not a registered trade-mark of BMW although application for registration was made, as noted earlier, in September 2005. M and the M and design registered mark, both sometimes referred to at trial as the “M mark”, or the “M Brand” as we shall see, are the bases of BMW’s claims against the defendant. The letter M is said to characterize the core of BMW. In the words of Professor Ulrich Bruhnke, President of BMW M GmbH, with worldwide responsibility for M cars:
M is the DNA of BMW. If you reduce to its core, then it is the M, and M stands for motor, engine in German language, for the man, for emotion, for motor sports, and it is the name of our brand. We will not have the situation that others use our brand, our energy we put into this brand and our success.
If you want to be successful, you have to find your own way, not to copy another one. That is why I am here. (Transcript, p. 539)
Joseph Lawrence, Director of Marketing, BMW Canada Inc., described the “M brand” thus:
The M brand is BMW’s highest… represents BMW’s highest performance and most exclusive vehicles that we market.
The interesting thing about the M brand, it is not simply a simple designation that has been chosen out of thin air; rather, it has its heritage with BMW Motorsport, and that is where the M comes from, is Motorsport.
It is a racing heritage. It has been developed over 30-some-odd years and has earned a very hard-earned reputation among car enthusiasts and among the automotive community in general, even non-enthusiasts I would say, as exceptionally high-performance vehicles (transcript, p.878).
[29] BMW’s internal emphasis on its M brand, reflected in its development of M vehicles, parts and packages, its marketing and promotion of those and of accessories and sports clothing, appears widely accepted by auto journalists and at least some luxury car enthusiasts, including purchasers of BMW cars, sometimes called “Beemers”, in Canada.
[30] Jim Kenzie, a long-time auto journalist, who is featured in newspaper, magazine, radio and television broadcasting, who is also a licensed race car driver, submitted a report, and testified, as an expert commentator on the car industry in Canada and the reputation of BMW’s M cars. His views on the high reputation of BMW and its M cars for quality performance and handling in driving are supported by the comments of other auto journalists in Canada, some of whose articles are exhibits to his report. Those same views are supported by the testimony of certain fact witnesses whose primary testimony concerned their reactions to Infiniti advertisements which featured the letter M. And those views were not seriously disputed by the testimony of Jacques Duval, another leading Canadian auto journalist from Québec who testified for the defendant, Nissan. Mr. Duval did not disagree with the view that BMW’s M cars were known as quality vehicles with high performance standards, which had been recognized by a number of awards in the automobile industry, as had the automobiles produced by others.
[31] With respect for his views generally, I do not accept the opinion expressed by Mr. Kenzie, without reference to supporting evidence, that “the Canadian public associates the M trade-mark and the M badge [i.e., the M and design trade-mark] with cars that come from BMW”. Without some evidence it is not within his recognized expertise as a journalist to be a spokesperson for “the Canadian public”. I note it is Mr. Duval’s opinion that, while auto journalists and enthusiasts may associate M symbols with BMW, that is unlikely to be reflected among the public at large, for relatively few BMW- M cars have been sold in Canada compared with other luxury high performance vehicles, and in his opinion BMW has not advertised its M cars and parts in newspapers or media directed to the general public. Rather that advertising has been in automobile magazines for car enthusiasts and in BMW’s promotional brochures, intended for an audience of luxury car enthusiasts.
[32] Mr. Kenzie’s report does include two other matters worth note. The first is that until Nissan’s advertisements commencing in 2005 for its M35 and M45 cars he was unaware of any other automaker than BMW who used an M alone in advertisements, brochures and promotions of its vehicles. Mr. Duval however, provides some evidence of numerous other automobile manufacturers that use the letter M, in corporate logos, (i.e., Mazda, Mercury, Maybach all use stylized M’s in registered trade-mark logos). Others use the letter M, in conjunction with other letters or numbers in reference to particular classes or models of their vehicles (e.g. Chrysler, Ferrari, Acura, Mazda and Mercedes-Benz). The letter M is also used with numbers or letters in trim designations on many vehicles, and in some of those combinations it is a symbol that the vehicle so marked has a manual transmission. In short the letter M is used to designate models, or particular trimmed vehicles, by a number of auto-manufacturers.
[33] I note here for completeness of described uses, that Dr. Pham, an expert who testified for BMW on the significance of brands in marketing, described the plaintiffs’ use of the “M brand” as a genuine brand of the range kind, descriptive of BMW’s whole variety of M vehicles, known for their high performance and the quality of the craftsmanship that produces them.
[34] The second additional matter noted by Mr. Kenzie is that after Nissan’s promotions of its M35 and M45 vehicles, commencing in 2005, he and some other auto journalists began to refer to the two Infiniti M vehicles as “M cars”, as they had done for some time with reference to BMW’s M cars. In my opinion the references of journalists to these cars are not significant in a legal sense for the trade-mark claims of the parties here.
[35] I review the evidence of certain fact witnesses who may be described as BMW and luxury car enthusiasts when I consider the issue of confusion alleged by BMW. Here it is sufficient to note that those witnesses, Messrs. Tennyson, Tam, Lee, Degobbi and Sawhney, all of them admirers, and four of them owners, of BMW M cars, testified that they associated the letter M with automobiles produced by one company, BMW.
[36] Before reviewing that evidence and the evidence of two expert witnesses called on behalf of BMW, it is useful to review the manner in which the trade-marks here in issue are used by BMW. The Canadian registered trade-marks M3, M5 and M and design are used in the marking of M3 and M5 classes of vehicles, and M and design is also used as a mark on all other M cars, and possibly on some M parts, on accessories and clothing. They are also used, as appropriate, in advertising and promotion of M cars, parts and accessories. The trade-mark M, by itself, has appeared in Canada only in limited BMW M car advertising, in magazines, on television, in brochures, promotional banners, occasional books, tickets and other items, generally with a companion trade-mark of BMW, i.e. the BMW roundel or one of its other trade-marks.
[37] The letter M is of course used in many BMW trade-marks, registered and not yet registered, in association with numbers, letters or words. But that extensive use of the letter is not, in my view, equivalent to use of M alone as a trade-mark even if the extensive use of the letter M gives some comfort to BMW when its officers speak of its family of M marks or its “M brand”. A brand so described is not in this case a trade-mark. Unless otherwise persuaded, the use of the letter M in other trade-marks, whether registered, such as M3 and M5, or not registered such as M6, M- the Most Powerful Letter, is not the same as use of the letter M alone as a trade-mark. Whether inclusion of the letter M as an element in M and design, a registered and much used mark, can be treated as use of the letter M alone, as a mark, a submission urged by BMW, is examined separately after considering the evidence of expert witnesses.
Expert witnesses
[38] The plaintiffs called Mr. George Mantis, principal of the Mantis Group, a marketing research and consulting firm of Chicago, to testify in relation to a survey he had undertaken and on which he reported in writing. “Assessing Whether the ‘M and Design Mark’ in Association with Automobiles has Achieved a Reputation in Canada” is his study, an exhibit before the Court, reporting on a survey completed in response to a request from counsel for BMW.
[39] Interviewees ultimately included were 29 persons selected after preliminary screening at 3 shopping malls, and 92 persons interviewed after preliminary screening by telephone interviews from a large Canada-wide data base of prospective interviewees, developed and retained by a Canadian-based surveying company. Those interviewed resided in four major populations centres, i.e. Montreal, Toronto, Calgary, Vancouver. Key qualifications for the population segment included after preliminary screening, were that the person interviewed be 40 years of age or more, who in the last 24 months purchased or leased (or someone else in their household purchased or leased) an automobile costing $65,000 or more, and/or within the next 12 months are (or someone else in their household is) likely to purchase or lease an automobile costing $65,000 or more, and who was, or will be, involved in deciding which brand of automobile was/will be likely to be purchased or leased. Those interviewed were questioned about their impressions and recollections when they were shown the BMW M and design mark and a hypothetical Y design mark.
[40] The survey was described by Mr. Mantis as a non-probability study designed to be representative of the relevant population, i.e. the segment to which the purchase of a luxury car, including a BMW M car would appeal. That population was defined for this study by the screening questionnaires about qualifications of prospective interviewees, qualifications that were selected, in consultation with counsel for BMW, by Mr. Mantis, based on his extensive experience in conduct of numerous surveys over nearly 40 years. That experience included surveys for litigation proceedings. The decision to seek interviewees by two methods, i.e. by preliminary screening of mall patrons selected on a random basis and by telephone screening of persons listed in a survey database, was made before the survey was initiated, because of a concern that random selection of mall patrons would yield a low return of interviewees, a result that was borne out in practice.
[41] Professor Kenneth Deal, Chairman of Strategic Market Leadership and Health Services Management in the De Groote School of Business at McMaster University, and President of market POWER research inc. was called as an expert by the defendant Nissan. His report, of his opinion on the claims advanced by BMW, was supplemented by an affidavit and testimony, setting out his assessment of the survey completed by Mr. Mantis. He found much at fault about the methodology, including the definition and justification of the universe of respondents selected, and the combining of data from two sampling methods, the small size of the sample and the processes of validation used in the survey. In his view, conclusions of that survey were unsupported. Not all of Professor Deal’s criticism is persuasive in my view, for some is based on less than full consideration of the methodology used since he was not present to hear the testimony, including the cross-examination, of Mr. Mantis which dealt with some of the matters of concern to Professor Deal.
[42] In my opinion it is unnecessary for this case to determine whether the opinions expressed by Mr. Mantis should be ignored entirely, as Professor Deal urged. While it is true that the survey population was small and did not purport to be representative of the Canadian population at large or even of the population in the major cities where the survey interviews were conducted, the stated purpose of the Mantis study (Exhibit p.1) was
…to determine whether the “M and Design” mark in association with automobiles has achieved a reputation in Canada and functions as a source identifier. Specifically, the study is designed to assess whether and, if so, to what extent relevant consumers associate the “M and Design” mark with automobiles made or put out by one company and in particular, BMW.
[43] Among Mr. Mantis’ findings were that 62 or 51.2% of the 121 persons counted in the survey associated the M and design mark with automobiles made or put out by one company, and of that 62 persons, 42 persons, i.e. 67.7 percent of those who associated that mark with one company, (or 34.7% of the total 121 interviewees), associated the M and design mark with BMW as a single source.
[44] On the bases of these findings and his experience and education, Mr. Mantis’ first opinion is:
That the “M and Design” mark has achieved a reputation in Canada and is an indicator of source. An appreciable number of relevant consumers associate the “M and Design” mark with automobiles made by one company, particularly BMW.
Serious criticism about the qualifications of those interviewed for the Mantis’ survey was limited primarily to his failure to describe in his report the basis for the qualifications he had selected, and to the effective exclusion of Infiniti M35 prospective purchasers from the group surveyed because of the minimum price level, $65,000, of automobiles that might be considered. I accept that the qualifications were reasonably appropriate to identify recent or prospective purchasers of expensive luxury automobiles at the base price level of BMW M cars. I accept that the survey does demonstrate that among the group so identified an appreciable number, one third of them, associated the M and design mark with automobiles made by BMW. That was significantly more than any other source identified.
[45] I do not accept Mr. Mantis’ second opinion, expressed in the conclusion to his report as further explained in his testimony (transcript p.785) that in referring to “the M mark” he meant M alone. His second opinion is:
Based on my analysis of the verbatim responses, it is also my opinion that the M mark, is an indicator of source. An appreciable number of relevant consumers explicitly mention M or M series as the basis for associating the “M and Design” mark with BMW.
[46] This latter opinion was not within the purpose of Mr. Mantis’ study. In his survey no questions were asked of any respondent about an “M mark”. The number who referred to “M” or “M series” as the basis for associating the M and design mark with BMW, 28 of 121 respondents counted, does not, in my view constitute an appreciable number. It is less than ¼ of the total respondents and 9 or more of those in that 28 stated the reason for their association of the M and Design mark with BMW was the “M series” rather than the “M” alone. Those who specified “M” alone as the basis of their identification with BMW, constitute less than a dozen or about 10% of the total interviewed. Moreover, as pointed out by Dr. Alain d’Astous, who testified for the defendant, those who did identify the letter M, like others interviewed, did so after two questions that he described as leading, for they referred to the letter in the M and design mark shown to interviewees as the focus of their attention. In sum, while some of those interviewed identified the “M” as the basis for associating the M and design mark with BMW, I am not persuaded that it was an appreciable number who did so.
[47] A second specialist expert witness called by the plaintiffs was Dr. Michel Tuan Pham, Professor of Business (Marketing) of Columbia University, where he serves as faculty Director of the University’s Strategic Marketing Management Program. His expertise is in the area of consumer behaviour and consumer psychology and he is knowledgeable about the use of brands in marketing. He was asked to report, and he did so in writing, on several matters arising in relation to Nissan’s use of the letter M alone in its marketing of the Infiniti M35 and M45 vehicles. His opinions on two of those matters, i.e. the likelihood of confusion, and the likelihood of depreciation of goodwill of the BMW M brand and the overall BMW brand, I leave for later discussion in relation to those two bases of relief claimed in this action.
[48] Brief reference has been made to Dr. Alain d’Astous, a senior Canadian scholar in Business Administration, a specialist in Marketing, who is Associate Director, Academic Affairs and Strategic Planning, Haute École Commerciale, Montreal. An expert witness called by the Defendant in rebuttal of Dr. Pham’s report and testimony, he was critical of Dr. Pham’s opinions and the methods on which those were based. He was particularly critical of the lack of empirical evidence to support Dr. Pham’s conclusions about the significance of the letter M in the M and design mark, and to support identification of that letter with BMW by journalists and prospective consumers interested in BMW M cars. That lack of empirical evidence, in his view, was a serious flaw to accepting Dr. Pham’s assumptions about consumers’ associative memory networks in regard to the use of M in Infiniti advertisements and in regard to the element M as used in the BMW M and design trade-mark.
[49] Dr. d’Astous cautioned against acceptance of Dr. Pham’s opinion that it is the letter M that consumers identify and store in memory on observing the M and design mark. Moreover, in his view the assumption underlying evidence of Dr. Pham, that there is a general M concept in the memories of consumers, or that the Infiniti M is associated with the BMW M, is speculative without empirical evidence. The only such evidence referred to by Dr. Pham, i.e., the survey by Mr. Mantis, is weak support, in the view of Dr. d’Astous, because of the few respondents who referred to M alone as the basis of their association of the M and design mark with BMW.
[50] A key element for Dr. Pham’s report relates to his conclusions that “In the ///M trade mark, it is the letter M that consumers primarily associate with the trade mark”, and that “BMW’s M brand is a genuine brand of the range kind that has a significant reputation in the market place”. In the latter conclusion it is not clear whether the “M brand” he refers to is the letter M or the M and design trade-mark, for he specifically states that he refers to both as the “M brand” since in his view they are interchangeable. While Dr. Pham sets out four considerations to support that conclusion about the nature of the brand, those considerations are mainly assumptions which he does not support with evidence and some of them are purely speculative, without an evidentiary basis according to Dr. d’Astous.
[51] Dr. Pham’s evidence was helpful in understanding generally the importance of brands, the role of BMW’s brands, consumers’ memory for brands, and the organization of memory as that may be described by an associative network. All of that may have significance for the marketing of goods. Yet I am persuaded by the arguments of Dr. d’Astous that the bases for Dr. Pham’s conclusions of particular significance in this action, those concerning the M alone mark claimed by BMW and its use as represented in the M and design mark, are not persuasive as grounds for legal consequences.
[52] It is significant, in my opinion, that both Mr. Mantis and Dr. Pham, conclude, without reference to persuasive evidence, that the M and design mark, shown to those interviewed in Dr. Mantis’ survey can constitute an “appreciable number” (Mantis phrase) or a reliable group “among consumers familiar with that trade-mark” (Dr. Pham’s phrase) who consider and verbalize the mark (i.e. M and design) as “M”. That consideration and reference is then considered to be synonymous with use of the M alone mark. In my view the associative memory nodes of consumers, not established by empirical evidence, cannot be the basis for legal implications of trade-mark use.
[53] Dr. Pham sets out his belief early in his report (at paragraph11) that for consumers familiar with the ///M (M and design) trade-mark, it is the letter M rather than the pictorial aspect of the mark that is identified with the mark. He sets out four grounds for that belief, one of which, the comparison of the space taken by the letter M and the space taken by other element of the design, is directly contradicted by Dr. d’Astous, and two others are said by the latter, in the absence of empirical data, to be speculative assumptions. Dr. Pham also sets out his conclusion that “the ///M trade-mark is interchangeable with the M trade-mark as both are equally representative of the M brand, and I will refer to both as the M brand in the remainder of this report”(at paragraph 13).
[54] That descriptive collective reference for more than one trade-mark may be useful for considering BMW’s marketing arrangements and its brands used to identify its products. But as earlier noted, the “M brand” as identified by Dr. Pham is not itself a trade-mark. His report, dealing with two key trade-marks here in issue, leaves some doubt about which of those trade-marks are intended by a number of his considerations.
[55] This leads me to an underlying issue in this case. The conclusions of Mr. Mantis and Dr. Pham concerning the significance of the letter M in the M and design mark for association of that mark with BMW and its vehicles, are relied upon by BMW, at least in part, as a basis for its claims. In opening comments at trial counsel for BMW referred to the use of the letter M in its advertising and then said:
We also claim that when BMW uses the M and Design mark, it is also using the trade-mark M, as well (transcript, p. 6).
[56] That position is elaborated in Plaintiff’s Supplementary Memorandum relying on the evidence of Dr. Pham and his associative network of the M mark by consumers who observe the M and design mark. The letter M is said to be a highly recognizable and familiar shape and pattern which, when seen by consumers observing the M and design mark would be encoded by them. Notice of the association of the M mark, i.e. in the memories of consumers, from the M and design mark is then said to satisfy the use requirements for a trade-mark under s. 4 of the Act. I am not persuaded that is the case. Section 4 deals with use, in association with wares, of a trade-mark if at the time of transfer of the property in or possession of the wares, the trade-mark appears on the wares or their packages or is otherwise so associated with the wares that notice of th