In the September 2016 newsletter we referred to a decision of the Federal Court that reached a surprising result concerning a claim for infringement of a registered trademark. An appeal from that decision has now been allowed.
The Facts
Wenger S.A. (“Wenger”) is a Swiss company, which over a hundred years ago received a contract from the Swiss army to produce multi-function knives for its soldiers. The knives became famous and known as “Swiss army knives”.
In the early seventies, Wenger adopted a trademark consisting of a cross in a rounded quadrilateral surrounded by an inlay border. Typically the cross is presented in white against a red or black background. The design is reproduced below.
(the “Wenger Cross mark”)
Wenger uses the Wenger Cross mark and related variants throughout Canada in association with luggage and bags and owns trademark registrations for its marks.
Travelway Group International Inc. (“Travelway”) was founded in the late 1970s. It mainly manufactures and distributes luggage and travel related products under its own trademarks or as a licensee for others.
Travelway was involved in a strategic alliance with an unrelated Swiss company and agreed to assist in designing products for its Swiss travel products brand. Travelway developed two new logos for which it obtained registrations in the form set out below for use with luggage and related products:
the (“Travelway cross mark”) and the (“Travelway triangle mark”).
The Dispute
Wenger alleged that in February of 2012 Travelway modified the logos appearing on its luggage and bags. The prominent “S” feature was altered making the “S” difficult to see. The modified logos are reproduced below:
the (“Modified Logos”).
Wenger instituted an application to the Federal Court seeking a declaration that Travelway had infringed the Wenger Cross Logo and variants and related relief and an order expunging the two registrations owned by Travelway.
The Federal Court Decision
The claim for expungement asserted that the Travelway trademarks were not distinctive when the proceedings were commenced, and that Travelway was not the person entitled under s 16(3) of the Trade-marks Act to registration of the trademarks because, at the date of filing, the marks were confusing with the Wenger marks which had been previously used in Canada.
The Federal Court said that Travelway’s registered trademarks did not create the same impression nor did they closely resemble Wenger’s Cross mark and were unlikely to create confusion. The ‘S’ in both marks and the triangular shape of the second registered mark acted as distinguishing elements. This finding was sufficient to deal with the alleged claim for expungement.
With respect to the claim for infringement based on the use of the Modified Logos, the judge carried out a more detailed confusion analysis on the basis that Modified Logos were separate unregistered marks.
When the judge considered the inherent distinctiveness of the Wenger Cross mark and the extent to which it had become known, she referred to third parties’ using a white cross and said that there was no evidence that consumers identified the Wenger Cross mark as being unique to and distinctive of Wenger. It was concluded that consumers were not likely to know the Wenger Cross mark as originating from one source, i.e. Wenger.
The judge said that the Modified Logos had coexisted with the Wenger Cross mark since 2012 and there was little or no evidence of confusion.
The court also referred to the fact that the Modified Logos had been used exclusively on the zipper pulls. The judge said that the zipper pulls were quite a small part of the luggage and bags and the average consumer likely would not even notice this detail.
The court was satisfied that from the perspective of the average consumer somewhat in a hurry, the Modified Logos used on luggage and bags by Travelway would not likely confuse consumers or cause consumers to conclude that the luggage and bags were manufactured or sold by the same entity that sold the Wenger brand luggage and bags.
The Appeal
The Federal Court of Appeal did not agree with this approach. First, in considering whether the the Modified Logos used by Travelway were separate trademarks, the applicable legal principle was that a variant is part of the registered mark if it retains the dominant features of the registered mark. In this case Travelway made a series of changes to the Travelway triangle mark, some more subtle than others, and all of which more closely resemble the Wenger cross mark. However, none of the changes either separately or together take away the dominant features of the Travelway triangle mark which is a cross on a background with a contrasting border. The omission of the “S” was not a dominant element of the marks.
Second, the court found that the trial judge confusion analysis was flawed on several grounds and it was not appropriate to carry out a separate analysis concerning the Modified Logos. The analysis should take into account the Travelway triangle mark, as registered, and the Modified Logos.
In the interest of judicial economy the Federal Court of Appeal carried out a confusion analysis. The Court started by observing there was a very strong resemblance between the Travelway triangle mark and the Wenger cross mark. This was demonstrated by evidence consisting of physical examples of luggage that display the Wenger cross mark and the Modified Logos. It was very difficult to discern a difference in these marks unless one scrutinized them very closely, which is not the applicable test. All of the surrounding statutory factors were in favour of a finding of confusion.
The Court disagreed with the comment concerning the zipper pulls and said all uses should be considered. Further there was no evidence that third parties were using similar logos in association with luggage. While third party use could reduce the weight of the acquired distinctiveness factor this did not completely erode the acquired distinctiveness of the Wenger cross mark that it has gained through years of strong sales.
Finally, the Court carried out a separate confusion analysis concerning the Travelway cross mark and found it too was confusing with the Wenger Cross mark.
Because of its conclusions the Court allowed the appeal and granted Wenger the relief it had initially sought including an injunction and delivery up. The claim for expugnement was referred to the Federal Court to be decided since there had not been sufficient time to deal with this issue in the time allotted for the hearing of the appeal.
Comment
The trial decision in this case seemed questionable and the Federal Court of Appeal has intervened in a significant way. The approach of the Court concerning the use of variants provides a useful model for future cases.
The decision is confusing regarding the treatment of the claim for expugnement which is not mentioned in the decision until the referral of this issue. Under the Trademarks Act the registration of a trademark in respect of any goods or services, unless shown to be invalid, gives to the owner of the trademark the exclusive right to the use throughout Canada of the trademark in respect of those wares or services. As a result unless the Travelway registrations were void ab initio Wenger’s claims for relief should not be effective until the registrations are ordered to be expunged.
John McKeown
Goldman Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.