Canadian Intellectual Property Bulletin

Volume 6 - August, 1998

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.

Perform United States trademark searches on the Internet:

The United States Patent and Trademark Office has launched a new pilot project allowing anyone with access to the Internet to access and search their database of pending and issued United States trademarks without charge. The database can be searched for pending applications, active registrations, expunged and abandoned registrations, and abandoned applications. Moreover, the database can be searched in particular fields such as mark, owner, wares or services. Images of design marks are also included in the database. This database is accessible by a link from our homepage.

This new USPTO service coupled with the Canadian Intellectual Property Office database site launched earlier this year will allow you to do pre-screening searches in both Canada and the U.S. in advance of product launches, gain competitive information or otherwise search for marks already issued or pending in the U.S. or Canada. While you may still wish to have a trademark professional review your search results in advance of incurring significant costs in reliance thereon, we encourage you to try this new service.  

Maintaining trademark use priority

Gesco Industries Inc. v. Sim & McBurney (1997), 76 C.P.R. (3d) 289, Federal Court Trial Division, Wetston J.

The issue of proper use of a trademark once a trademark registration is sought or obtained, in order to maintain or preserve such a registration, often arises. In this particular case a proceeding was initiated against the appellant’s registration for "Stainshield" for use on the service of stain resistant carpet treatments. The respondents alleged that the appellant was not using the mark on the services for which the registration had been obtained and that the registration should be vacated in favor of their own client.

The evidence showed that the mark was being used in association with wares - namely, carpets - but not in particular association with the services outlined in the registration.

HELD: Section 45 of the Act is intended to provide a mechanism by which the registered owner can be compelled to demonstrate a continuing interest in the mark, by providing some evidence of ongoing use of the mark. In this case the evidence showed some use of the mark over the period and even though it was not attributable to the precise services for which it was registered, it did demonstrate the owner’s intention to maintain the proper use of the mark. The registration was upheld. In a section 45 proceeding it was not appropriate for the Registrar to review the use in terms of validity of the registration, rather only to ascertain that some use of the mark was being made. There are alternative sections in the Act to deal with such a challenge of validity.

Mark holders should review their portfolios periodically with their trademark advisor in order to ensure that proper use is being made of marks which it is intended to keep. This periodic review may also yield registrations which can be abandoned, reducing the overall cost of portfolio maintenance.

Conversely, parties wishing to challenge the marks of competitors for improper or non-existent use do have means available to them to do so under the Trademarks Act.

Flexi-Coil v. Bourgault Industries - Federal Court opines in patent infringement case, stressing importance of proof of date of invention:

The Trial Division of the Federal Court of Canada handed down their long-awaited decision in this patent infringement case on February 27, 1998.

The parties to the lawsuit are two of the leading producers of air seeding equipment in the world and compete for a large portion of the agriculture and farm implement market. During the late 1980's, both companies had developed and begun to sell a type of packer which provided complete packing behind an "air seeder" enabling a high disturbance one-pass seeding system. The one pass seeding system offers farmers significant economic advantage in that farmers are able to seed more land in less time using less manpower to do so. The benefit of the two packers at the center of this dispute was that each had been designed to facilitate easy transportation by folding the wings up and locking them into place. The addition of a two axis pivot on the frame and the use of hydraulic mechanism to lift the wings made this endeavor possible. Bourgault Industries named their packer the Wing Type Packer and began manufacturing and selling it as of October of 1988 while Flexi-Coil put its System 75 on the market in Canada in February 1989.

Bourgault filed a patent application and was awarded Canadian Patent Ser. No. 1,277,863 in December of 1990. In November, 1996, following attempts to stop the production of the Flexi-Coil model on the basis that it infringed their patent, Bourgault commenced legal action for patent infringement against Flexi-Coil. Flexi-Coil responded that it had not done so and furthermore Bourgault patent was invalid.

HELD: In his decision, Justice Campbell noted that the onus to prove that the patent was invalid lay with the defendant, Flexi-Coil. Generally, a patent will not be valid if it can be shown that the invention was previously known or used by another, had been described in any patent or publication material within two years of the patent application, and in public use or on sale in Canada for more than two years before the patent application. In his careful analysis of the validity of the patent in question, Justice Campbell ascertained that Bourgault Industries had been the first to invent as they had a workable prototype as of August 1988. He determined that Flexi-Coil could not have been found to have reached a similar stage until at least two months later. He also determined that the invention had not be previously described in any patent or publication. At trial, Flexi-Coil was not successful in meeting the burden of proof and Justice Campbell found that Bourgault Industries patent was valid and enforceable against Flexi-Coil.

Justice Campbell then moved on to address the matter of whether Flexi-Coil had infringed the Bourgault patent. In doing so he reviewed the test for patent infringement which he identified as "whether persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variant found in the Flexi-Coil 75 would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked". Essentially he sought to determine if there were any variations in Flexi-Coil’s System 75 that would differentiate it from the claims alleged to have been infringed in the patent.

In applying the test to the each of claims in question, Justice Campbell found no variation between System 75 and the specified claims in the patent. In finding in favor of Bourgault Industries, Justice Campbell awarded damages and granted to Bourgault the requested declaration, injunction, delivery up, post-judgment interest and the costs of the action.

We bring this particular case to the attention of our clients because in addition to the broad canvass of most patent validity and infringement issues provided by the decision, the case at the end of the day was dependent upon a finding of the date of invention for Bourgault’s machine having been a few months in advance of the machine introduced by Flexi-Coil. This stresses the need for clients in the technology field to ensure that they have proper procedures in place to maintain and document the date of first invention of various items for which patent applications may be filed at a later date ,as well as maintaining proper invention records insofar as they might be used against a competitor granted a patent monopoly on a piece of technology which you have potentially previously invented. We will be pleased to assist you with the implementation of a proper inventorship record system.

On the international front - points of interest to Canadian clients:

Trademark rights in basic color combinations - trade dress - fashion industry:

In light of the significant broadening of the boundaries of traditional trademarks to include colors, sounds, restaurant designs and even smells are capable of acquiring sufficient distinctiveness in association with goods or services so as to acquire trademark status, there is an interesting case worth noting in the United States.

Abercrombie and Fitch v. American Eagle Outfitters is a trademark infringement action within which Abercrombie alleges that American Eagle has infringed their trademarks by using, amongst other things, an "AE" logo on apparel which allegedly resembles the "AF" logo used by Abercrombie. American Eagle is also alleged to have copied Abercrombie’s clothing designs. Issues raised by this case are whether or not there is inherent distinctiveness in basic clothing color combinations, if such combinations are widely used in the industry. A complicating factor in this particular case is that Abercrombie’s designs have in turn been called lower-priced versions of styles marketed by higher end clothing retailers such as Ralph Lauren.

There are few cases on point in the apparel industry to guide the courts in deciding this case. Consumer industry companies in areas such as apparel, food products or other consumer goods might take note of this case and consider whether or not they have particular identifying characteristics other than words or logos which are used to identify their goods, and if so, do they want to attempt to protect them. 

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