mckeown's brand management in canadian law …...thomas pink limited ("thomas pink")...
TRANSCRIPT
BRAND MGT. NWS. 2014-02
Intellectual Property Newsletters
May 2014
— McKeown's Brand Management in Canadian Law Newsletter
John McKeown
© Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All
rights reserved.
Contents
I. Headlines
I.1 Canadian Trademark Reform
I.2 All-important IP Audits
I.3 Declarations of Non-infringement
I.4 When is an Actor an Author?
I. — Headlines
I.1 — Canadian Trademark Reform
The Conservative Government has been increasing its efforts to amend the provisions of the Trade-
marks Act. Presumably this is being driven by the negotiation of the Comprehensive Economic and
Trade Agreement (CETA), the free trade agreement between Canada and the European Union.
Bill C-8
This Bill was first introduced in March 2013 as Bill C-56 but that Bill died on the order paper. It was
subsequently reintroduced as Bill C-8 in October 2013. The short title of the Bill is the Combating
Counterfeit Products Act1 since the first portion of the Bill deals with counterfeit products and border
protection measures. However, the Bill also includes a number of amendments to the Trade-marks
Act. The amendments include the following matters, among others:
• A new definition of a certification mark which would allow an applicant to apply on the basis
of proposed use;
• Deletion of the term "mark" and its replacement by the term "sign" which would be defined to
include "a word, a personal name, a design, a letter, a numeral, a colour, a figurative element,
a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a
sound, a scent, a taste, a texture and the positioning of a sign." This would significantly
broaden the scope of the scope of what could be registered as a trademark;
• An express right to deny the registration of a trademark if, in relation to the goods or services
in association with which it is used or proposed to be used, its features are dictated primarily
by a utilitarian function;
• During the examination of a pending application an examiner would be entitled to consider
the inherent distinctiveness of the applied for trademark, to request that evidence be filed to
show that the trademark is distinctive and to refuse the application if not satisfied the
trademark was distinctive;
• It would be possible to divide an application so that a divisional application could be
prosecuted separately;
• Opposition procedures would be amended to attempt to speed up the process;
• The Federal Court would have jurisdiction to expunge the registration of a trademark, on the
application of any interested person, if the court decided that the registration was likely to
unreasonably limit the development of any art or industry;
• The limitations on the assignment of associated trademarks contained in the Act would be
removed;
• The Registrar would have jurisdiction, on application by the registered owner of a trademark
made to make amendments to the register to a) merge divisional registrations of the
trademark that stem from the same original application, b) within six months after an entry in
the register is made, correct any error in the entry that is obvious from the documents relating
to the registered trademark.
The Five IP Treaties
On January 27, 2014 the Minister of Foreign Affairs tabled five IP treaties in the House of Commons:
• the Protocol Relating to the Madrid Agreement Concerning the International Registration of
Marks;
• the Singapore Treaty on the Law of Trademarks;
• the Nice Agreement Concerning the International Classification of Goods and Services for
the Purposes of the Registration of Marks;
• the Geneva Act of the Hague Agreement Concerning the International Registration of
Industrial Designs ("Hague"), and
• the Patent Law Treaty.
This is the first procedural step towards ratification and implementation of these treaties. However, it is
indicative of fairly significant changes to Canadian IP laws and a harmonization of those laws with the
laws of a considerable number of countries. The Treaties can only be ratified after the changes have
been made to the relevant legislation.
Bill C-31
The Government next introduced Bill C-31, to implement certain provisions of the budget tabled in
Parliament on February 11, 2014 and other measures.2 This Bill includes division 25 of Part 6 which
will amend the Trade-marks Act to in broad terms to, among other things:
• change the name of the Act to the Trademarks Act;
• make that Act consistent with the Singapore Treaty on the Law of Trademarks;
• add the authority to make regulations for carrying into effect the Protocol Relating to the
Madrid Agreement Concerning the International Registration of Marks;
• simplify the requirements for obtaining a filing date in relation to an application for the
registration of a trademark;
• eliminate the requirement to file a declaration of use of a trademark before registration;
• reduce of the term of registration of a trademark from 15 to 10 years; and
• adopt the classification system established by the Nice Agreement Concerning the
International Classification of Goods and Services for the Purposes of the Registration of
Marks.
Bill C-31 covers all of the amendments introduced in Bill C-8 and adds additional provisions. It is not
clear why the two Bills were introduced so closely in time to each other and why the potentially
significant changes of Bill C-31 would be included in an omnibus Bill implementing a budget. The
trademark provisions of each Bill are not completely consistent so we will have wait until the intentions
of the Government are clarified. There are 101 subsections in Bill C-31 which coordinate amendments
contained in Bill C-8.
Unfortunately, Bill C-31 contains provisions which will allow an applicant for a trademark to obtain a
registration without any requirement to specify a date of first use of the trademark in Canada. There
are significant concerns with respect to the potential negative impact that such a change will have on
the Canadian trademark system.
It seems there is a lengthy history in the part of the government in not agreeing to changes to Bills
implementing a budget, so we may be stuck with these changes.
I.2 — All-important IP Audits3
It is now well established that the most valuable assets of a twenty-first century business consist of its
intellectual property, including its trade marks, copyrights, patents or confidential information. An IP
audit helps in identifying, protecting and managing these assets.
In broad terms, an IP audit is conducted to identify the company's IP assets and ensure that the assets
are being appropriately protected, managed and valued. An audit is a useful management tool at any
time, but may be prompted by a significant financing, the recognition that IP assets are not sufficiently
protected, or a recognized management need to develop strategies that will maintain and improve the
company's market position.
In order to carry out an IP Audit, a systematic review is conducted of the IP assets owned, licensed or
used by a business. In many cases it will be found that some of those assets are not protected
appropriately and are also under-utilized. An assessment may also reveal whether a business's
current activities infringe the rights of third parties.
In some cases businesses lack the necessary resources to undertake a complete and exhaustive
audit. In such cases, the review can be more limited. But the need to do one cannot be safely ignored.
The IP Audit process can also determine the value of IP assets. Financial value provides a signal for
how to manage various IP assets in the future. As it is said, if you don't measure it, you can't manage
it.
Once the audit has been completed, a strategy can be developed to ensure that IP assets are
appropriately protected and utilized. For example, if the company's primary asset is confidential
information and know-how, then essential steps should be taken to ensure that such material is
protected within the company and in the hands of business associates, suppliers and customers.
Frequently, businesses lose sight of how important their intellectual property is, or they may never
have developed an appreciation of it in the first place. Trade marks are a case in point. For a company
selling its goods in association with a trade mark, the trade mark may be the key asset of the business.
It needs to be registered, used and monitored for potential infringements. Registration and continuous
monitoring give a company more freedom and ease in protecting and leveraging its trade marks. IP
Audits are more than just legal or financial exercises. In some instances business and marketplace
input concerning brand management or valuation of IP assets may be required. We are well positioned
to co-ordinate such input.
This is just a very brief overview of the IP Audit process. Every business should consider implementing
one.
I.3 — Declarations of Non-infringement
The Facts
The Parties
Thomas Pink limited ("Thomas Pink") is a part of the Louis Vuitton Moet Hennessy group ("LVMH").
Thomas Pink is an international luxury shirt brand. Thomas Pink sells shirts for men and women and
silk ties, tailoring, knitwear and accessories.
Thomas Pink's branded goods are sold in Canada and it owns a number of registered trades marks
the majority of which include the word "PINK" in a block-letter design format or in combination with
other words such as THOMAS PINK.
Victoria's Secret Stores Brand Management Inc. and Victoria's Secret (Canada) Corp. (collectively
"Victoria's Secret"), sell women's intimate and other apparel, beauty and personal products and
accessories in association with the trade mark VICTORIA'S SECRET in Canada.
Victoria's Secret owns a number of Canadian registered trade marks and applications, some of which
are for VICTORIA'S SECRET alone; some include the word PINK in addition to other words such as
VICTORIA'S SECRET. One of the applications is for the word PINK alone in a block-letter design for
use with a broad range of products; including personal care products and clothing - including shirts.
The examiner in that application issued a report taking the position that the applied for mark was
confusing with Thomas Pink's registered mark consisting of the word PINK.
The Proceedings
On May 10, 2013 Thomas Pink sued Victoria's Secret U.K. Limited in the United Kingdom, a company
related to Victoria's Secret Stores Brand Management, Inc. for alleged infringement of its PINK trade
marks. In its defense Victoria's Secret alleged that there had been no instances of confusion between
the Thomas Pink's business and the business of Victoria's Secret in either the United States of
America or Canada.
Shortly thereafter Victoria's Secret brought an action in Canada in the Federal Court for, among other
things:
(1) a declaration that Victoria's Secret's use of PINK, VICTORIA'S SECRET PINK and related
"PINK" trade marks and trade names in association with a specific list of wares and services
was not contrary to the Trade-marks Act, with regard to Thomas Pink's registered Canadian
trade marks, and
(2) an injunction restraining Thomas Pink from instituting, prosecuting or threatening any
action against Victoria's Secret or any of its affiliates with respect to Victoria's Secret's use of
the VICTORIA'S SECRET PINK marks.
Thomas Pink brought a motion for an order dismissing the action on the basis that Victoria's Secret did
not have standing to bring the action since they were not "interested persons" within the meaning of
the Trade-Marks Act.
The Decision4
The Act defines a "person interested" as including any person who is affected or reasonably
apprehends that he may be affected by any entry in the register. Section 53.2 of the Act, which was
the principal focus of the question of law in issue, provides that "any interested person" may seek an
order where it appears that there has been any act (which) has been done contrary to the Act.
The Judge who heard the motion decided that the provisions of the Act should be construed in a
manner which promotes access to it and that the threshold for determining whether a person is a
"person interested" was low. Such a person need only demonstrate a reasonable apprehension that a
commercial interest that it has, or may have, may be affected.
The Judge then concluded that Victoria's Secret had a "reasonable apprehension" that their Canadian
commercial activities may be challenged by Thomas Pink by litigation or otherwise, under the Act.
Comment
The approach taken in this case seems to be influenced by the U.S. practice were the parties rush to
bring the first proceeding. The benefits of such an approach include the following:
a) an opportunity to resolve infringement issues so the plaintiff can resume its normal
business activities;
b) a potentially favourable choice of venue or jurisdiction, and
c) control over the timing of the suit.
It remains to be seen how effective such a strategy will be in Canada where the vast majority of trade
mark litigation is dealt with in the Federal Court. In addition, there are some negative consequences of
this approach including the following:
a) bringing such an action almost certainly guarantees a counterclaim alleging infringement
will be filed by the defendant, and
b) the onus of proof will be on the plaintiff to show that confusion between the parties'
respective marks is not likely.
I.4 — When is an Actor an Author?
A recent U.S. case raises some interesting copyright issues concerning the rights of actors who
appear in a film.
The Facts
The plaintiff, an aspiring actress, answered a casting call for a low-budget amateur film. The working
title of the film was "Desert Warrior" which was to be an adventure film set in ancient Arabia. The writer
and producer cast the plaintiff in a minor role. She was given four pages of the script in which her
character appeared and paid approximately $500 for three-and-a-half days of filming. The producer did
not obtain any formal assignment of copyright or other applicable consent or waivers from the plaintiff.
The "Desert Warrior" never materialized and instead, the plaintiff's scene was used in an anti-Islamic
film titled the "Innocence of Muslims". The plaintiff first saw the "Innocence of Muslims" after it was
uploaded to YouTube.com. She discovered that her performance had been partially dubbed over so
that she appeared to be asking whether the Prophet Mohammed was a sexual deviant.
After the film aired on Egyptian television, there were protests that generated worldwide news
coverage. An Egyptian cleric issued afatwa, calling for the killing of everyone involved with the film and
the plaintiff soon began receiving death threats. She responded by taking a number of security
precautions and asking that Google remove the video from YouTube.
The Takedown
The plaintiff filed a series of takedown notices under the Digital Millennium Copyright Act. When
Google resisted the plaintiff applied for a temporary restraining order seeking removal of the film from
YouTube, claiming that the posting of the video infringed her copyright in her performance.
The District Court
The District Court refused to grant the order because the plaintiff failed to show that the requested
preliminary relief would prevent any alleged harm and was unlikely to succeed on the merits because
she had granted the producer an implied license to use her performance in the film.
The Appeal
The plaintiff appealed to the United States Court Of Appeals for the Ninth Circuit. The majority of the
court found that the plaintiff could assert a copyright interest only in the portion of "Innocence of
Muslims" that represented her individual creativity, but even if her contribution was relatively minor, it
was not de minimis. This was sufficient for purpose of seeking preliminary relief.5
The court said nothing in the Copyright Act suggests that a copyright interest in a creative contribution
to a work simply disappears because the contributor doesn't qualify as a joint author of the entire work.
Where the artistic contribution is fixed, the key question remains whether it's sufficiently creative to be
protectable.
Google argued that Garcia didn't make a protectable contribution to the film because the
writer/producer wrote the dialogue she spoke, managed all aspects of the production and later dubbed
over a portion of her scene. The court did not agree and said that an actor does far more than speak
words on a page; he must live his part inwardly, and then give to his experience an external
embodiment. The embodiment includes body language, facial expression and reactions to other actors
and elements of a scene. The court found that Garcia's performance satisfied the minimal degree of
creativity required under U.S. law to obtain copyright protection.
The Court found that the plaintiff granted the producer an implied license to use her contribution to the
film but the license was not unlimited. The plaintiff was told she would be acting in an adventure film
set in ancient Arabia. The "Innocence of Muslims" differs so radically from anything the plaintiff could
have imagined when she was cast that it could not possibly be authorized by any implied license she
granted to the producer.
Finally, the Court found that the plaintiff had shown irreparable harm and if there was any doubt about
it, it was best to err on the "side of life".
The Canadian Position
It is interesting to consider the facts of this case and how a similar case in Canada might be resolved.
There is no equivalent of theDigital Millennium Copyright Act in the sense of there being a takedown
procedure. In Canada takedowns are only possible if the website operator makes provision for
takedowns in the terms of use of the site.
The plaintiff's rights under the Canadian Copyright Act as an author are not clear. The Copyright
Act provides that a "dramatic work" includes any piece for recitation, or acting form of which is fixed in
writing or otherwise. As a result it can be argued that the plaintiff's contribution to the scene resulted in
her being an author of the dramatic work subsisting in her contribution to the scene.
To the extent that the plaintiff could be categorized as author, she would be entitled to moral rights.
Under the Copyright Act an author's right to the integrity of a work is infringed only if the work is, to the
prejudice of the owner or the reputation of the author, distorted or otherwise modified or used in
association with a cause. This right is substantially broader than similar rights available to an author in
the United States.
Comment
The decision of the Ninth Circuit in this case has attracted a significant amount of criticism in the U.S.
A similar result is possible in Canada but not certain. However, there is considerable merit in erring on
the "side of life".
Footnotes
1 As of April 2014 the Bill has been given second reading and the report stage has been concluded. Its
status can be tracked online:
http://www.parl.gc.ca/LEGISInfo/BillDetails.aspx?Language=E&=1&=6266835.
2 As of April 2014 the Bill has been given first and second reading. Its status can be tracked online:
http://www.parl.gc.ca/LegisInfo/BillDetails.aspx?Language=E&=1&=6483626.
3 This article was co-written by Dr. Ruth M. Corbin, Chair of CorbinPartners Inc. and Adjunct Professor
at Osgoode Hall Law School. CorbinPartners customizes IP Audit documents to industry, government
and education sectors, and develops benchmarks for assessing the marketplace value of IP assets.
4 Victoria's Secret Stores Brand Management Inc. v. Thomas Pink Ltd. (2014), 2014 CarswellNat 84,
2014 FC 76, 117 C.P.R. (4th) 83 (F.C.) .
5 Garcia vs. Google Inc et al., 9th U.S. Circuit Court of Appeals, No. 12-57302.