A decision of the Federal Court illustrates important lessons concerning choosing a mark and trademark infringement. https://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/495909/index.do
The defendant wished to use the HOSTESS mark in association with bread and rolls. The defendant applied for the trademark HOSTESS in association with the goods bread, bread rolls, bagels, and the wholesale distribution of bread, bread rolls, and bagels. The defendant could not overcome examiner reports claiming the applied mark was confusing with the plaintiff’s registered HOSTESS Word Mark. This mark was widely used in association with cakes and sufficiently well known to have significant goodwill attached to it.
Undeterred, the defendant imitated the section 45 proceedings and began to use the mark in association with bread and buns.
The plaintiff brought an action for infringement of its marks and subsequently a motion for summary trial. The parties agreed the facts were sufficiently set out in affidavits and their exhibits, and the matter proceeded on this basis.
The plaintiff primarily relied on registration for the trademark HOSTESS as a wordmark (the HOSTESS Word Mark). The mark was registered in 1925. When this matter was heard, the HOSTESS Word Mark was registered for use in association with the goods consisting of rolls, cakes and biscuits. The plaintiff also owned registrations relating to design versions of the Word Mark.
The Section 45 Proceeding
The Judge initially considered the impact of the decision in the section 45 proceeding. The Hearing Officer’s decision had not been released when the matter was initially heard but was released before the Judge issued his decision.
The Hearing Officer maintained the registration for the goods cakes while expunging the goods rolls and biscuits from the registration. The summary trial motion was largely unaffected by the Hearing Officer’s decision. The plaintiff’s evidence and primary arguments were all directed to the plaintiff’s registration and use of the HOSTESS Mark in association with cakes and snack cakes.
Next, the Judge considered the defendant’s counterclaim, which alleged the plaintiff’s trademarks were invalid based on non-distinctiveness under paragraph 18(1)(b) of the Act. Again, the onus was on the defendant to show that registration was not valid. The defendant showed four other traders who owned HOSTESS-related registrations for different food products that co-existed on the register. However, the defendant filed no evidence of the use of these other registrations.
The Judge said that two registrations contain other word elements that added points of distinction compared to the plaintiff’s HOSTESS Word Mark. None of the registrations were for food products, particularly the cakes and other pastries in the plaintiff’s registration. The presence of a few other traders with HOSTESS-formative marks on the register for other food products was far from sufficient to show that the plaintiff’s HOSTESS Word Mark did not distinguish products it was used in association with from those of others.
The judge observed there may be infringement even where a defendant sells a good not listed in the registration and even if those goods are not in the same general class. Paragraph 20(1)(a) of the Trademarks Act states that the exclusive right granted by section 19 is deemed infringed by anyone who sells, distributes or advertises goods or services in association with a confusing trademark or trade name. A trademark or trade name is “confusing” with another trademark if using both in the same area “would be likely to lead to the inference that the goods or services associated with [them] are manufactured, sold, leased, hired or performed by the same person, whether or not the goods and services are of the same general class or appear in the same class of the Nice Classification.”
The determination is made after considering “all the surrounding circumstances,” including, in particular, the list of circumstances set out in subsection 6(5) of the Trademarks Act:
(a) the inherent distinctiveness of the trademarks and the extent to which they have become known;
(b) the length of time the trademarks have been in use;
(c) the nature of the goods, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trademarks, including in appearance or sound or the ideas suggested by them.
The Judge reviewed the application of these factors in a detailed fashion. Three matters were of particular importance. First, the defendant relied on the state of the register to argue that that different HOSTESS-formative trademarks can co-exist on the register in respect of different food products and that the word HOSTESS is not highly inherently distinctive when used in association with food products. Second, the Judge said that the state of the register is an indicator of the state of the marketplace, suggesting that a consumer could distinguish between the marks of different traders based on small differences where the market is crowded with similar marks. However, without evidence of the extent of use of the marks, it is difficult to draw a meaningful inference of common adoption of the HOSTESS mark in the trade, such as to reduce the likelihood of confusion.
Second, regarding the nature of the goods, the judge said there were substantial similarities between the defendants' sliced bread and bun products and the cakes identified in the HOSTESS Word Mark. As the plaintiff pointed out, both are not just food products but fall within a narrower category that might be described as “bakery products” or “baked goods.” This similarity is underscored by the evidence that showed such products are often sold near each other in retail outlets, whether in the same or adjoining aisles.
Third, both cakes and the breads are “run-of-the-mill consumer wares” that are taken “from a supermarket shelf,” on which a consumer would spend less time than for a luxury item. This further suggests that a consumer would be less attuned to differences in the trademarks or the goods than might be the case for other items or channels of trade.
The Judge concluded that using the defendant’s HOSTESS trademark in association with its bread products in the same area as the cakes identified in the plaintiff’s HOSTESS Word Mark would likely lead to the inference that the same person sells the goods. Effectively identical marks, being used on very similar goods, in a retail context where the goods are sold in the same channels, would commonly be seen near each other. As a result, consumers would spend less time, which was likely to create confusion.
This decision raises two continuing themes. First, it does not pay to be overly optimistic or aggressive concerning the potential availability of a mark. Given the nature of launching a mark and the associated time, effort and expense involved, some prudence is required. Second, you cannot build a solid foundation on sand.
Second, if you are involved in litigation relating to a trademark, you need to carefully consider the evidence required to support the positions you wish to take. That means when the distinctiveness of a mark is involved presenting marketplace evidence on a consumer level to show the mark is not distinctive. Similar considerations apply to the state of the register evidence.
If you have questions, don't hesitate to get in touch with me at firstname.lastname@example.org.
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.
Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
A version of this article originally appeared in the Lawyer’s Daily published by LexisNexis Canada Inc.