Atlanteknology - Technology News for Atlantic Canada

Three stripes and you are out

Not that it really needs to be repeated....but trade-marks really have value. Just ask Payless shoes.

A jury in Oregon recently ordered Payless shoes to pay Adidas (my favourite brand) over 300 million in damages for trade-mark violations involving the distinctive three stripes in the Adidas logo. Payless had created shoes with three stripes that looked, well, a bit too much like those Adidas has made famous.

Not every brand reaches the stage where it is worth that kind of money but on the other hand, one never knows at the outset how powerful a mark will be. Protect them early and often! Marks are valuable. Just ask Coke.

When is a whisky not a whisky?

It is a sad day …. No not because the Montreal Canadians are going to get eliminated from the Stanley Cup play-offs tonight (not that I care all that much one way or the other – except that I will get to rub the fact of it in to the wounds of my friends) but because Glenora Distillery has lost its battle at the Federal Court of Canada – the battle over whether it can use the name “Glen” in its branding.

Glenora makes and sells a fine whisky called “Glen Breton Rare”. I received a bottle for Christmas – nice stuff, not as fine as some of the top of the line whiskys from Scotland, but still quite good.

The Scotch Whisky Association of Scotland took issue with the use of the word “Glen” in the name, arguing that its use created confusion in the minds of the spirits consuming public – such that the people who consume whiskys would be confused and believe that “Glen Breton Rare” comes from Scotland (notwithstanding the fact that the names “Scotch” and “Scotland” do not appear on the labelling anywhere.

A “glen” is a narrow secluded valley, generally in a mountainous area.

So that I am not accused of being biased, there are wonderful rules in international trade-mark circles that protect geographic areas, this is true. There are also rules relating specifically to spirits. Most commonly associated with such names as “Bordeaux” and “Champagne”.

Unfortunately I have not been able to lay my hands on the actual decision, so I cannot comment on its particulars. Mt comments are general in nature.

First – get some advise before you sink piles of cash into your marketing campaign (and your brand). As the old saying goes, an ounce of prevention is worth a pound of cure – recognizing that advise comes in the form of opinions and one can never be assured that what your advisor views as logical will be viewed as such by another. Or that people will not take a swipe at you simply on strategic grounds.

Second – fight for what you believe in. Some pretty odd things have happened to cases as they wind their way up the food chain. In Glenora’s case, I suspect they will fight – the branding and the brand recognition they have built up are critical to the business.

Finally – in the case of trade-marks and issues surrounding “confusion” consider the effect of education campaigns – example in the case of Glen Breton – targeted advertising confirming the difference between Canadian and Scottish whiskys, and in particular the difference between Glen Breton Rare and “scotch whiskys” – such advertising could be effected at both the retail level to consumers and to wholesalers/distributors/restaurants. Who knows, perhaps they have already done this.

In any event, good luck to Glenora – fight the good fight.

The Dirt Shirt - The dirt is flying

On Tuesday (June 12) CBC Radio 1 ran an article about a small company on Prince Edward Island that is having some trade-mark troubles. The article, in written form, is here.

The background is this – (if I get it wrong please let me know) A chap had an idea back in the 1990’s that he would sell t-shirts stained with PEI’s distinctive red soil. The process at the time was quite simple – throw some white t-shirts in a garbage can with some soil, and stir with a paddle. The resulting shirt was called the “Dirt shirt”. The gentleman did not, unfortunately, seek to register the name “dirt shirt” as a trade-mark. In the interview he said it was because his only source of cash at the time was a $300 Canadian Tire credit card and a $2000 loan from his parents.

I actually still have one of the original dirt shirts I am proud to say.

Fast forward a number of years and the shirts are becoming popular. What happens? Well, as you can imagine, some of the other players in the tourism industry decided it was a good idea to make their own shirts stained red from the soil of PEI. Now, by itself this is not an issue. However, two problems emerged (in the mind of the “dirt short” owner). One, the competitors used names which were similar in name or style to the name “dirt shirt”. Two, the competitors did not use real soil to create the colouring in the shirts. They used dye.

Ultimately there was litigation.

Now, the CBC article appeared to be a fairly one sided description of the events and I am not going to weight in with my opinion but I will say this about the whole dirty mess (pun intended) – spending the money in the early days to do something right can be worth its weight in gold later on. If our entrepreneur had registered the phrase “dirt shirt” in the early days (and assuming it was permitted) he might not have found himself in the position he is in today. The Trade-marks Act provides some useful tools for dealing with alleged trade-mark infringement.

This is not to say that the common law (non legislation based law created by judges) does not provide some remedies – it does. However, without getting into the legalese of it all, the bottom line is that it is a far superior position to be in if you do acquire a registered trade-mark.

Now, hindsight is almost always 20/20. There is no way the guy could have known in the beginning that his business would be successful or that he would run into legal issues over the name. Having said that, had he sought help from a trade-mark lawyer, he may well have figured out how to make it happen (the trade-mark registration that is).

This has always been one of the points of this blog – to spread awareness. The reality is that there are tons of useful websites out there which discuss the topic of trade-marks and the Canadian Intellectual Property Office’s should be your starting point.

Making informed decisions – that is what it is all about.

Good luck to the “dirt shirt” man. Maybe I will frame mine and put it in my office as a discussion piece.

The great marijuana chocolate bar caper.....

You sometimes see images of trade-marks emblazoned on tee-shirts or other goods and the trade-mark has been altered in some significant way but still bears a faint resemblance to the original.

Well, an entrepreneur in California has taken the practice to a new level by selling chocolate bars and other types of candy in wrappers bearing a resemblance to various products sold by Hershey. The difference between your average Kit-Kat bar and the “KeefKat” is that the KeefKat has been laced with THC – the active ingredient in marijuana. It seems the entrepreneur ran a business selling various products relating to marijuana. (Image from  www.abclocal.go.com)

Hershey has sued him, not for trade-mark infringement – there is little likelihood the average person would be confused and think that Hershey was seeking such things – but for dilution of its trade-marks. In Canada, it is called depreciation of goodwill.

The difficulty here is that the defendant company is not actually using any of Hershey’s trade-marks. In that sense the case is similar to an earlier case where Louis Vuitton sued a company called Haute Diggity Dog for using the mark “Chewy Vuiton” together with an interlocking C and V similar to Louis Vuitton’s interlocking V and T.

Louis Vuitton lost. The only difference in this case is the association with an illegal drug. Whether that creates an opportunity to find against the defendant business will be interesting to see.

In a recent Supreme Court of Canada case, Mattel had sued a restaurant owner over the use of the name “Barbie” claiming, among other things, that the “Barbie” trade-mark was famous and that the use of the mark by the restaurant would depreciate the goodwill in the name. The Supreme Court of Canada ruled that, when looking at all the circumstances, there was no infringement because there was no confusion. The average consumer would not believe that Mattel was running a family restaurant. It is a slightly different set of circumstances than those in the KeefKat case in that the restaurant was using the same name (Barbie) that Mattel had trade-marked. Here it is a parody which is being used.

An interesting side note to the story is that the Internet has spread the story far and wide and now many more people are aware of the wacky candy than might otherwise be. There are different ways of acting to preserve rights and it is increasingly becoming obvious that a splashy lawsuit or cease and desist letter might not always be the best way to accomplish the stated goal of policing and maintaining the integrity of a trade-mark. All of which is not to say that trade-mark owners should do nothing when they see other parties use their marks, only that the twenty kilogram mallet might not be the best solution.

Spider-Man toothbrushes anyone?

I remember when Marvel Comics went bankrupt in the mid 1990s. I was at the tail end of my career as a comic book collector and I was saddened by the possibility the comic book company that brought us the Fantastic Four, Spider-Man, The Incredible Hulk, X-Men and Iron Man (my favourite) was going to die such a death. 

What a difference ten years makes. Somewhat akin to the resurrection of Apple computers when you think about it.

How did it happen? 

Among other reasons, Marvel perfected the art of licensing its trade-marks. When the first Spider-Man movie hit the silver screen in 2001, Marvel received only 5% of the $400 million dollars the movie grossed in the United States of America. The rest went to Sony. Sony had, smartly, previously purchased the theatrical rights to the comic book character.

Marvel obviously had someone in its organization who figured out that there was another way to make money from Spider-Man - by licensing the Spider-Man trade-marks and associated goodwill. In 2002, Marvel generated $155 million dollars from toys and other goods bearing the Spider-Man symbol, logo, etc.

Using this model, Marvel went on to monetize various other superhero characters and the company now generates approximately $230 million annually simply from its licensing business. Marvel is now (or was in 2006) the fourth leading licensor in the world after Disney, Warner Bros., Nickelodeon, and Viacom. Marvel has licensing arrangements for all manner of goods and services with companies ranging from Johnson & Johnson (for health and beauty products) to Microsoft (for a multiplayer online game set in the Marvel universe). 

The point I am trying to make here is that there is more to the world of intellectual property than patents and copyright. In particular, patents. The company that owns the brand Jack Daniels is one part manufacturing company and one part branding company. Indeed, Jack Daniels and other brands of that type have, in some circumstances, eclipsed the product behind the brand such that the product is sometimes purchased by consumers for the brand and not the other way around. 

Who would have thought.

Google keywords - for sale? For how long?

Have you ever typed a phrase into the Google search engine and seen various link under the heading “Sponsor results”? Have you ever wondered how that works?

Well, if you have, let me enlighten you. Google will sell you keywords. Just about any keyword as it happens. So, for example, you might be able to buy the keyword “Xerox” even though you are not the Xerox corporation. But if you are a company that sells photocopiers, what a boon to your business if your company name/link appears right at the top of the search results page when someone does a search for “Xerox”!

Of course Xerox would not be all that happy with you and might take a shot at litigating the matter. Depending on where in the world you live, such litigation might or might not be successful. So far in Canada the issue has not been addressed. In the USA there have been mixed results and in Europe the results tend to favour the companies which own the trade-marks and sue the companies which bought the keywords.

The issue here relates to trade-marks. Xerox corporation owns trade-marks relating to the name “Xerox”. So, no one else can use the name “Xerox” in association with photocopiers (among other goods and services). So, by extension why should anyone else be allowed to profit form the name “Xerox” by buying that keyword.

Unfortunately trade-mark law does not easily lend itself to solving the issue but it will, either by virtue of legal decisions or by virtue of amendments to the law. However, for the time being, you should watch out for this if you are a business and you have a valuable brand name. Someone else (ie. your competitors) could be using the name in the sense that they have purchased its use from Google.

On the other side of the coin, if you feel that the risk is worth it, you may wish to consider buying such keywords. It is certainly a risk/reward decision and not a decision which is to be taken hastily. I certainly would not recommend it but then again I am risk averse when it comes to these things.

Food for thought.

Canada - No hurry to join the Madrid Protocol

For those of you familiar with the Patent Cooperation Treaty (PCT) – whereby a single patent application can be filed for multiple jurisdictions (to boil the system down to its barest elements), the fact that Canada is not part of a similar system with respect to trade-marks may come as a surprise. Yet it is true.

The Madrid Protocol became operative on April 1, 1996 and allows an entity in a member State with an existing application in process or an already registered trade-mark on file to extend protection to such other members States as the owner wishes. The United States of America, currently Canada’s biggest trading partner, has been a member for 3 years. Indeed, the list of member States is quite extensive. Yet, Canada remains on the outside.

Now, the reasons given for this state of affairs are extensive. Indeed, the Canadian Intellectual Property Office has published articles on the topic (here and here).

The fact remains that Canada is not part of this system and, until it is, the country and its resident businesses are at a disadvantage in comparison to businesses resident in other jurisdictions. Among other disadvantages, a Canadian company that acquires a trade-mark from a company pursuant to the Madrid Protocol must incorporate a company in a member State in order to acquire that particular trade-mark.

The Canadian Intellectual Property Office has, as noted, undergone a consultation process in order to analyze what changes to the Trade-marks Act would be needed in order to allow Canada to join the “club”. However, the federal government has not put the matter on the list of pressing issues. Perhaps the political manoeuvring in Ottawa has kept the issue from being examined in depth.

Hopefully this will be rectified in the future.

Glen Breton - Whisky or Scotch Whisky?

Well, I think I will weigh in on the topic if only from a legal perspective. I have, incidentally, tried, Glen Breton (at the Farmer's Market in Halifax) and found it to be very good.

So, to bring you up to date. Glenora Distilleries of Cape Breton, Nova Scotia filed a trade-mark application in Canada for the mark "Glen Breton" in association with single malt whisky. For some reason it is a "proposed use" application even though the mark has been in use already for a number of years.

Then, the Scotch Whisky Association decides it is going to oppose the application on the basis, apparently, that people will associate Glen Breton with scotch whisky (and being, therefore, from Scotland). The opposition was denied. The Scotch Whisky Association has, however, vowed to appeal (at least according to the press).

Interestingly, no where on the bottle for Glen Breton is the word "scotch" used. So it would seem that the Scotch Whisky Association's principal argument is that the word "Glen" is inexorably linked to Scotland and, as such, reasonable people would assume Glen Breton comes from Scotland. Interestingly the Association provides a link as to importance of the name "Scotch Whisky" but no where in there is the word "Glen" mentioned.

Now of course I entered the word "glen" into Wikipedia and this is the result.

You will see that various geographic places are mentioned, some in Scotland, many not. Also interesting it the fact that the etymology of the word, in relation to a river, is Welsh. Of course Wikipedia is not determinative but it is still interesting.

All of that brings me to the World Intellectual Property Organization and the notion of geographic names and their use to distinguish foods (for example - Bordeaux). Here is an article from WIPO on the topic.

Canada has a list of wines and spirits which are protected. Here it is. Scotch Whisky is on the list. Glen is not.  The Canadian Intellectual Property Office has some good articles (here and here) on the topic of geographic indicators and trade-marks.

I have no idea how this is going to play out. I am not sure that the Association has a strong argument. However, as the old saying goes, nothing ventured nothing gained. I will keep you posted. In the meantime, happy reading.

Blackjack, Blackberry, or black and blue?

You may have seen ads for the new Samsung Blackjack smartphone type devise. When I saw one I immediately thought that the name was close enough to RIM's Blackberry to cause some concern.

And, indeed, RIM is concerned - concerned enough to sue Samsung alleging, among other things, trade-mark dilution.

One has to be careful in selecting a name for a new product or service. I definitely recommend in depth due diligence if the product/service is going to be a major one in terms of its contribution to the bottom line and/or cost to roll out. It has happened (and will unfortunately happen again and again) where a company creates some product/service, does all kinds of testing, creates the ads, has packaging lined up, the whole thing is ready.....and they discover some problem/conflict between the name of the product/service and some other product/service.

As the old saying goes - a gram of prevention is worth a kilo of cure. Words to live by.

Chinese trade-marks in Canada

I recently read an article in Canadian Lawyer magazine discussing Chinese trade-marks here in Canada (article by Paul Jones of Jones & Co.).

The article described a recent Federal Court of Canada decision that revolves around the interpretation of trade-marks that have Chinese words/symbols as an integral part of the mark.

The facts are as follows: A business that operates nursing homes in the Toronto area registered a trade-mark that contained two Chinese characters as part of the design. The characters were transliterated in the trade-mark registration.

Subsequently the business discovered another business that was using the same two characters as part of its name. An action for passing off was started by the first business.

Part of the second business’s defence was that the only the Cantonese transliteration formed part of the registration, and not the actual characters themselves.

The whole mess will be determined at trial and the particulars of the decision (which was only an application for summary judgment – ie. that there was no defence and, as such, the plaintiff was entitled to a decision in its favour) are not all that relevant except to the extent that it appears a trade-mark registration of the characters themselves may have avoided the problem.

The migration of Chinese people to the Atlantic region is certainly not significant and, when compared to the migration patterns in Vancouver and Toronto, is positively insignificant. However, for businesses which identify the Chinese market as a growth area, the lesson here is to do appropriate due diligence in selecting a trade-mark agent (whether here in Canada or otherwise) when creating/registering trade-marks which have Chinese characters as part of the mark.