In the Barbie case, it was contended by Mattel, Inc., the owner of the trade-mark “Barbie” in association with dolls and accessories, that there was a likelihood that consumers would think that the restaurants had something to do with the dolls and, hence, the restaurants should not be permitted to register the name “Barbie” as a Canadian trademark in association with restaurants. In the Veuve Clicquot case, the champagne maker alleged that not only was the registration of the Cliquot trade-mark by the women's clothing chain in association with the sale of mid-market women's clothing confusing with the trade-marks held by Veuve Clicquot but that its use in association with such wares depreciated the goodwill inherent in the Veuve Clicquot brand and trade-marks. 

In dismissing the claims made by Mattel and Veuve Clicquot, the Supreme Court recognized that trade-marks and brand names are among the most valuable of business assets. The court stated that a trade-mark “is a guarantee of origin and inferentially, an assurance to the consumer that the quality will be what he or she has come to associate with a particular trade-mark (as in the case of the mythical “Maytag” repairman). It is, in that sense, consumer protection legislation.” 

Both decisions were based principally on findings of fact. In the Cliquot decision, the court recognized that Veuve Clicquot is undoubtedly famous and its trade-mark deserves wide protection. While less-than-famous trade-marks generally operate in their circumscribed field of wares and services, it was argued that “famous” trade-marks like Veuve Clicquot transcend such limitations, and that considerable effect must be given to Veuve Clicquot's remedies in respect of confusion in the marketplace and depreciation of the goodwill of Veuve Clicquot.

In Veuve Clicquot, the test to be applied on the issue of “confusion” was determined by the court as “a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot on the [Cliquot's] storefront or invoice, at a time when he or she has no more than an imperfect recollection of the Veuve Clicquot trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks”. The Supreme Court accepted the trial judge's findings that ordinary consumers would be unlikely to make any mental link between the trade-marks and the respective wares and services of the parties and, accordingly, rejected Veuve Clicquot's claim.

The depreciation argument of Veuve Clicquot was also dismissed by the court. In order to successfully invoke this argument, Veuve Clicquot had to show that the women's boutique “made use of marks sufficiently similar to Veuve Clicquot to evoke in a relevant universe of consumers a mental association of the two marks that is likely to depreciate the value of the goodwill attaching to [Veuve Clicquot's] mark”. The Supreme Court accepted the trial judge's conclusion that a consumer who saw the word “Cliquot” used in the defendant's stores would not make any link or connection to Veuve Clicquot, and, accordingly, rejected the depreciation claim.

In the Barbie case, the issue was whether the restaurant owner was entitled to registration of its trade-mark. The restaurant owner had to demonstrate that use of both trade-marks in the same geographic area would not create the likelihood of confusion (i.e. mistaken inferences in the marketplace).  The court concluded that “although a trade-mark's fame is capable of carrying the mark across product lines where lesser marks would be circumscribed to their traditional wares or services”, each situation must be judged in its full factual context. The court distinguished trade-marks from other forms of intellectual property such as patents and copyrights. It held that “Unlike other forms of intellectual property, the gravaman of trade-mark entitlement is actual use. By contrast, a Canadian inventor is entitled to his or her patent even if no commercial use of it is made. A playwright retains copyright even if the play remains unperformed. But in trade-marks, the watchword is 'use it or lose it' ”. Although Mattel argued that the licensing of the Barbie trade-mark was an expanding and lucrative commercial opportunity, the court noted that it had not used (or licensed) “Barbie” for restaurants. Accordingly, the court ruled that since the “Barbie” trade-mark had not transcended outside dolls and doll accessories and that since there was no likelihood of confusion in the marketplace having regard to all of the surrounding circumstances, it rejected Mattel's claim.

Please do not hesitate to call Justin D. Vineberg (514-841-6533) in Montréal or Matthew P. Gottlieb (416-863-5516) in Toronto if you would like further information.  

Davies Ward Phillips & Vineberg LLP, with over 235 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York and an affiliate in Paris and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients.

The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance. For particular applications of the law to specific situations, the reader should seek professional advice.