The past two months have been marked by
unprecedented turmoil for the British royal family, after the announcement by
the Duke and Duchess of Sussex, Prince Harry and Meghan Markle, that they would
step down as senior members of the royal family and entertain their own
financial independence. Under a new working arrangement, they will be free to
earn professional income and will have more liberty to pursue their charitable
endeavours. Further details on the specific arrangements can be found here.
In anticipation of their new
projects, a trademark application and a domain name registration for SUSSEX
ROYAL had been sought in the UK. Following a recent intervention by Her Majesty
the Queen herself, however, the use of the term “royal” has now been
disallowed. Since the Duke and Duchess of Sussex would no longer be serving as
“royal” members and representatives, as they gave up their royal duties, then
there was no justification for them to further use this term. The UK trademark
application for SUSSEX ROYAL was thereby withdrawn.
Key Estate Planning
Considerations for Individuals with Intellectual Property (Part II: Trademarks)
This
is the second entry in a three-part blog series about the interaction between
estates law and intellectual property law. Part I introduced Ontario’s succession
law regime, and provided an analysis of estates law vis-à-vis copyright law.
Part II will apply this analysis to trademark law. Finally, Part III will
examine this area in relation to patent law, as well as provide some concluding
thoughts and considerations.
Trademarks
In the previous blog entry in this
series, we looked at Ontario’s succession law regime. We also applied this
regime to the provisions in the Copyright
Act that related to the assignment of one’s copyright after their death.
This week, we will take the same approach and apply it to trademark law, which
definitely has some considerations that distinguish it from copyright law.
A trademark is a combination of letters,
words, sounds or designs that distinguishes one company’s good or services from
those of others in the marketplace. A trademark
is mostly a business-related form of intellectual property, as it often
signifies a company’s goods, services, reputation and brand.
A trademark can be registered
in the name of an individual, or in the name of a corporation. As opposed to
copyrights, which are more related to works of art and entertainment,
trademarks pertain to the operation of a business. As such, it may make more
sense for a variety of reasons, including from an estate planning perspective,
to register a trademark in the name of a corporation. In doing so, a testator
could transfer the shares of that corporation to a beneficiary, and that
beneficiary would in effect own the trademark because they control the
corporation that is the registered owner of said trademark.
The Trademarks Act is the key piece of legislation in this respect,
and it contains multiple provisions relevant for the purposes of estate
planning. The first is Subsection 48(1), which allows for the transfer of trademarks,
whether registered (in which case CIPO requires a fee of $100) or unregistered. On that note, as
with copyrights, trademarks also do not need to be registered. By the same
token, registration of a trademark is prudent, as registering a trademark help
more effectively enforce trademark rights against third parties.
Unlike copyrights, however, the ownership
of a trademark is not subject to the same types of term limitations. As per
Subsection 46(1) of the Trademarks Act,
the registration of a trademark is valid for an initial period of 10 years, and
can be renewed for any number of subsequent 10-year periods as long as the
owner pays the renewal fee ($400 for the first class of goods or services to
which the request for renewal relates, and $125 for each additional class).
However, the registration must occur within six months after the expiry of the
initial or renewal period (although there are certain avenues for extending
this timeline).
All that being said, individuals planning
their estates should be weary of the common law rule against the partial
assignment of trademarks. The Exchequer Court of Canada held in Great Atlantic & Pacific Tea Co. v.
Canada (1945), [1945] Ex CR 233, 5 CPR 57 that if a person owns a
registered trademark for use in Canada in association with certain goods, they
cannot validly assign the trademark unless they also assign the whole of the
goodwill of the business carried on by them in Canada in association with such
wares. As such, an individual should avoid assigning a trademark to one
beneficiary and the business with which said trademark is associated to a
different beneficiary.
This principle only further supports the notion that registering a trademark in the name of a corporation and then gifting the shares of a corporation to a beneficiary is an effective way of managing a trademark for the purposes of estate planning. Trademark assignment can be a complicated legal area, so it is best for a testator not to separate the trademark from the business with which it is associated.
Interlocutory injunctions remain difficult
to obtain in trademark infringement cases. To obtain an interlocutory
injunction, the moving party must satisfy a three-part test. A party must show
that: (1) a serious issue has been
raised; (2) irreparable harm will result if the injunction is not granted; and
(3) the balance of convenience favours the moving party. Over the years parties
seeking injunctive relief in trademark infringement cases have faced difficulty
satisfying the irreparable harm branch of the test. In order to satisfy the
court that irreparable harm will result, the court requires clear and
non-speculative evidence of harm that could not be compensated for by an award
of damages at trial. This has proven to be difficult for parties for among
other reasons, the fact that often in these cases it is in fact possible to
quantify the harm that has and/or will be done and accordingly compensate the moving
party through an award of damages at trial. Canadian courts have recently
provided more insight on the evidence required to support a request for
injunctive relief.
In the 2017 decision of Sleep Country Canada Inc. v. Sears Canada
Inc., 2017 FC 148, Sleep Country Canada Inc. (“Sleep Country”) was granted
an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent
Sears from using its slogan: “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE
ELSE”, pending the final determination of Sleep Country’s trademark
infringement action against Sears. Sleep Country alleged that Sears’ slogan
infringed Sleep Country’s trademarked slogan of “WHY BUY A MATTRESS ANYWHERE
ELSE”. The court accepted Sleep Country’s arguments and found that on a
balance, there was a likelihood of confusion between the time of the motion and
the disposition of the infringement action and that this confusion would result
in lost sales as a result of consumers being less aware and familiar of the
slogan’s association to Sleep Country. The court found that these associations
would consequently result in a loss of distinctiveness for the brand of Sleep
Country and this would in turn have an effect on the goodwill established by
Sleep Country.
The
revised Trademarks Act came into
force on June 17, 2019 and brought new waves of changes to the trademark legal
landscape in Canada. The Act is now
more harmonized with international practices and standard procedures of
trademark law by adhering to international treaties and implementing the International Classification of Goods and
Services for the Purposes of the Registration of Marks (Nice classification)
and the Madrid Protocol for trademark
applications with the World Intellectual Property Association, allowing access
to more than 100 jurisdictions worldwide in a single application.
Non-Traditional Trademarks
To align
Canadian trademark law with international standards, the revised Act now recognizes new non-traditional
trademark signs, such as colours, three-dimensional shapes, holograms, moving
images, modes of packaging goods, sounds, scents, tastes, textures and the
positioning of a sign. This amendment opens the door for businesses in the
Canadian market to let creativity run free and protect innovative forms of
marketing.
Copyright
and trade-mark owners whose IP is infringed may seek a variety of remedies
against the perpetrators, including damages, injunctive relief and legal costs.
Psychologically though, destruction and delivery up may provide the most
satisfaction. Specifically provided for in the respective statutes, these remedies allow the successful plaintiff
to either compel the infringer to destroy the counterfeit items under oath or
actually take possession of them. In this post, we survey destruction and
delivery up orders granted and denied in 2019. Overall, the year’s rulings are
mixed, demonstrating that even as the victim of infringement, “you can’t always
get what you want.”
Luxury Goods
Luxury
goods are common targets for counterfeiters, as this year’s crop of destruction
and delivery up orders illustrates. Appearing four times before the Federal
Court was Nathalie Marie Tobey, aka Nathalie Henrie. Operating out of a
clandestine retail establishment on Old Yonge Street, Ms. Tobey was accused of
selling counterfeit Givenchy, Louis Vuitton, Dior and Celine merchandise. Her defence was essentially that a
well-informed member of the public would not confuse the goods she was selling
with the plaintiffs’. Justice Norris dismissed this defence as having “no hope
of success whatsoever,” before ordering the delivery up of all goods bearing
the plaintiff’s subject trademarks, at least, those not already seized by the
Toronto Police Service.
