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Canadian
Intellectual
Property Bulletin
Volume 2 - April, 1996
This newsletter is not intended to constitute a legal opinion on any of the issues
discussed. Readers should seek professional legal advice on issues of concern to them - we
would be pleased to elaborate on any of the articles herein and discuss how it might apply
to specific problems. Contact us for more information.
Protecting creditors' interests in intellectual property:
Currently under consideration by the federal government is a bill which would create a
federal intellectual property security registry, similar in operation to the provincial
personal property registry systems. This would provide additional flexibility to parties
negotiating business transactions involving transfer of partial, complete or reversionary
interests in intellectual properties.
In the meantime, there are other ways of protecting a creditors' rights or remedies
against patents, trade marks, pending applications or other types of intellectual property
owned in whole or in part by debtors. These consist of manipulating licensing/borrowing
agreements along with the existing registry systems to accommodate the interests of the
creditor, and while not as streamlined as the proposed new registry system the existing
methods are able to provide a good level of protection. Please feel free to contact me if
I can be of more assistance in this area.
Trade secrets: what are they, and how can you protect them?
In many cases, a company or individual cannot protect their ideas with a patent or an
industrial design registration. This may be because their idea does not have patentable
subject matter or is made up of portions of public domain knowledge. Another important
consideration that you might undertake in determining whether or not to file a patent
application is whether or not you actually want to tell people how to copy your idea, by
filing the 'recipe' at the Patent Office. In fact in some cases, particularly where the
technology cannot be reverse-engineered, the most appropriate protection measure may be to
treat your technology, ideas or procedures as trade secrets. Other 'non-technology'
aspects of your business which can be treated as trade secrets are customer and accounting
information, marketing information and the like.
Having determined that you have a trade secret, what do you do to protect it from use
by others? In order to preserve your legal rights to your trade secrets, should that
become necessary, it will be necessary to prove that you have maintained the
confidentiality of your information. A trade secret protection program is the key to this,
regardless of the size of your organization.
Not only is it important to protect secret information and the use thereof within your
organization, one should also be vigilant in requiring the signing of confidentiality
agreements where it is necessary to disclose trade secrets to outside parties.
The use of trade secret protection is a technical area, in which I can offer
assistance. Please feel free to contact me.
Third party applying for judicial review of a decision of the Commissioner of Patents:
Cangene Corporation v. Eli Lilly and Company et al., September 26, 1995 -
Federal Court Trial Division, Jerome A.C.J.
HELD: There is no basis in the Patent Act nor any of the accompanying rules
which would give a third party standing to bring a judicial review application against a
decision of the Commissioner of Patents. The patent applicant's application and all of the
proceedings related thereto are confidential, and a decision of the Commissioner is not
available to anyone else without the express approval of the applicant. A voluntary
publication of the Commissioner's decision by the applicant cannot be considered a waiver
of the applicant's statutory rights, nor to confer any status on a third party.
Interim injunction granted in patent infringement suit on basis of defendant's
financial position:
Fromm Group Inc. v. Thinkway Trading Corp. (1995), Federal Court Trial
Division.
The plaintiff in this case sought to restrain the infringement of their patent relating
to toys by the defendant. It was not a technical infringement case - there was a serious
dispute between the parties as to the interpretation of the patent document. Generally
speaking in that case, an interlocutory injunction would not be granted on the basis that
the plaintiff could recover their damages at trial upon proof of the patent issue along
with proof of the damages - which could include retroactive damages.
The plaintiff in this case had applied for the interlocutory injunction to stop the
defendant from producing their product pending determination of the litigation, but the
injunction application was refused. Injunction was refused on the basis that it was not
clear that if the trial judgment were to go against them the plaintiff would be able to
satisfy any judgment for damages awarded against them, unlike the defendant. As such
damages would be the adequate remedy for the plaintiff at such time as they might be
awarded, whereas the defendant could potentially suffer irreparable harm if the injunction
were granted and then the judgment at trial were to go in their favor, the plaintiff being
unable to satisfy the judgment.
FOCUS ON TRADEMARKS
One of the areas in which I practice is the registration, monitoring and enforcement of
trade marks. The services offered include:
- registrability searches and opinions;
- filing and prosecution of trade mark applications in Canada or around the world through
a network of global associates;
- negotiation, drafting or review of trade mark licensing provisions in business
transactions, to preserve the trade mark holder's rights against third parties and
vis-à-vis the regulatory system;
- challenging the validity of, or launching and carrying out expungement proceedings or
infringement litigation against infringers or competitors
The following are a few of the recent court decisions of interest in the trade marks area.
Please feel free to contact me to discuss these or any other matters.
Maintaining continuous use of a trade mark in the normal course of business:
Gowling, Strathy & Henderson v. Royal Bank of Canada (1995), Federal Court
Trial Division
Registrant held a trade mark for use in association with a consumer services bulletin
related to banking. In responding to a notice under Section 45 of The Trade Marks
Act to prove use, the registrant showed use in the registrant's banking
business until 1986. They could not show continuous use in their banking business from
1986 to 1991. The Registrar of Trade Marks expunged the registration on the ground of the
failure to show any use in that time.
On appeal from the decision of the Registrar of Trade Marks, the registrant filed
further evidence of steps taken to resume use, which included some graphic design work and
preliminary distribution. The appeal was dismissed and the decision of the Registrar of
Trade Marks upheld on the basis that none of the evidence provided on appeal by the Royal
Bank showed use in the normal course of trade. The evidence before the Registrar when he
made his decision justified that original decision, and in addition, the evidence on
appeal showed that the intention was more to promote services than to use wares with
respect to the new use of the mark.
Trade mark holders should be attentive to maintenance of use of their marks within the
registered channels of trade in order to avoid such a similar application being made
successfully.
Use and infringement of trade marks in comparative advertising:
Johnson & Johnson Inc. v. Bristol-Myers Squibb Canada Inc. (1995), Ontario
General Division
The plaintiff in this case sought an interlocutory injunction to restrain the defendant
from advertising that its analgesic product was better than the plaintiff's in such a
manner that it was likely to depreciate the value of goodwill of the plaintiff's trade
mark.
The defendant had earlier been restrained by an American court from making similar
claims, but had obtained pre-approval from the Canadian Health Protection Board. The
plaintiffs knew of these claims of superiority but took no steps against the defendant for
one year. Administrative appeals were filed, but they were not pursued. The plaintiffs'
only evidence to establish the falsehood of the defendant's claim to superiority in the
products was the judgment of the American court. Furthermore, the plaintiffs had also
engaged in the advertising practice of making comparative reference to competitors' trade
marks.
HELD: application for the injunction was dismissed.
Widespread industry use of a mark or term weakening rights to exclusive use within
that channel of trade:
Oakwood Lumber and Millwork Co. Ltd. v. Classic Door and Millwork Ltd. (1995),
Federal Court Trial Division
The applicant in this case had sought to register as a trade mark the word
"colonial" for use on specialty wood trims and moldings. The application was
refused on the ground of confusion of a similar mark for bricks, along with the mark
"colonial elegance" for wooden stair moldings. The appeal from the refusal to
register the application was allowed on the basis of further evidence which showed that
the term "colonial" was in widespread use throughout the construction industry
and was used on wares and services of several other registrants. As such, there was not a
substantial likelihood of confusion shown and the registration could be allowed.
Trademarks - Costs - Expungement:
Keramchemie GmbA v. Keramchemie (Canada) Ltd. (1995), Federal Court
Trial Division.
Two weeks before a trial in a trade mark expungement proceeding, the respondent
commenced a proceeding for the voluntary abandonment of their registrations which were in
question in the trial, and the trial was adjourned. On the same day, they also went
forward to surreptitiously file new applications for virtually identical marks. On appeal,
an order was affirmed in this case awarding costs to the applicant on a solicitor and
client basis, based on the veiled conduct of the respondent.
Other Current
Issues
The following are a number of other topics in which you might be interested:
- European Union adopts a harmonized trade mark application process;
- Changes to the Copyright Act
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