Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V.

Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V., Federal Court of Appeal, 7 December 2012

When is the appearance of a mark in an invoice considered use of the trademark in association with wares for which the invoice has been issued?

This appeal boiled down to the question of which one of the parties was the first to use the mark HORTILUX in association with their wares, and the main evidence used to make that determination of use was an invoice issued by Hortilux Schreder in which it used the mark HORTILUX in connection with its wares.

Isawaki’s claimed date of earliest use was October 1997 when it gave two samples of its wares to a Canadian retailer, for no consideration.  Hortilux Schreder, on the other hand, produced an invoice dated August 1997, which was issued for the sale of its wares and contained the word HORTILUX on the top of the invoice. 

The Trademark Opposition Board (TMOB) decided that use of the word HORTILUX in Hortilux Schreder’s invoice did not establish use, because the mark appeared on top, and not in the body, of the invoice. The TMOB did not, however, review the jurisprudence on this point and did not explain the rationale for its decision. 

On appeal, the Federal Court judge reversed the TMOB’s decision.  The judge found that the TMOB could not have reasonably concluded that Isawaki’s transaction in October 1997 was use of the mark in the normal course of trade, as required by Subsection 4(1) of the Trademarks Act. He also found that Hortilux Schreder’s invoice did amount to use of the mark.

In so deciding, the judge reviewed the important factors established by the jurisprudence, and compared them to the invoice. Among these factors were the following: the word HORTILUX appeared in large and stylized font and was prominent and different from the rest of the text in the invoice; even though HORTILUX appeared at the top of the invoice, it was clear that it was used as a trademark and not as a company name; the recipient was familiar with the wares and he would understand that HORTILUX was distinguishing the source of the wares; there were no other wares and no other trademarks in the invoice; etc.

On appeal to the Federal Court of Appeal, Isawaki raised a concern that the Federal Court judge’s decision was inconsistent with an earlier decision of the same judge on the same issue, in the case of Tint King of California Inc. v Canada (Registrar of Trade-marks). In that case, the judge had stated that

 If a trade-mark is placed at the top of the invoice, with no use in the body of the invoice, the use will not generally be in association with the invoiced wares.

The Court of Appeal, however, pointed out the Tint King principle is the general rule, but it is not without exceptions, and it cited cases in which the placement of a trademark on top of an invoice was found to be evidence of use of the mark in association with the wares.

The Court found that the TMOB’s decision was not reasonable because it had simply applied the general rule without explaining its reasons for doing so.  The Court went on to say that, in view of the fact that the judge had reviewed the jurisprudence setting out both the general rule and the exceptions and had made a reasoned decision, the court did not find a reviewable error on the part of the judge, and thus upheld his decision.


By: Nazanin Ghaissarnia 

Non-Solicited Invoices and Notices Relating to Your Patents And Patent Applications

A number of our clients have received invoices and fee notices which on their face appear to be from an intellectual property office (for example CIPO, WIPO or the German Patent and Trademark Office) but are either from third party service providers or scam artists.  Should you receive an invoice or notice relating to your patents and patent applications, prior to taking any action with respect these invoices and notices, we strongly recommend that you contact your Patent Agent to ensure that these invoices and notices are legitimate.

By: Claire Palmer

Google promises to act fairly when licensing Standard-Essential Patents

Last week the U.S. Federal Trade Commission (FTC) announced that it would not pursue an antitrust lawsuit against Google Inc. after a two year investigation. The FTC ruled on two distinct issues namely the first being whether the company had provided favorable rankings for its own proprietary advertisements in its search engine algorithms, and secondly whether Google was in compliance with the fair, reasonable, and non-discriminatory (FRAND) terms with respect to licensing of their “standard-essential patents”. This article speaks to the second issue. 

In the technology industry some patents earn the distinction of being deemed “standard-essential patents”. In other words, working the invention in the patent is required in order to comply with industry set technical standards. Owners of such standard-essential patents must allow for fair licensing to third parties in order to provide a gateway of interoperability of building technology on these standards. 

The fair licensing scheme, as mentioned previously, is stated to be fair, reasonable, and non-discriminatory (FRAND). There is neither US legislation nor express direction in jurisprudence to define each of these terms; however, Professor Mark Lemley of Stanford University added interpretation in front of the United States Senate Committee on the Judiciary. Therefore with limited interpretation, such a regime is murky to interpret and continues to be an evolving area of law. 

The FTC took the initial position that Google was not in compliance with FRAND principles prejudicing competition. Accordingly, FTC Chairman Jon Leibowitz stated:  

“Google’s unfair conduct threatened to block consumers’ access to critical electronic devices including laptops, tablet computers, smartphones and gaming systems, or it could have increased the cost of these products by requiring manufacturers to pay higher licensing fee which then would have been passed on to consumers,” 

Last year Google acquired Motorola Mobility principally for their 17000+ patents within the mobile technology space. Numerous patents within this acquired portfolio were deemed to be standard-essential patents with respect to allowing devices such as smartphones, tablets, and personal computers to effectively connect to wireless networks. Recognizing this issue, Jon Leibowitz stated:  

“These essential patents and others like them are the cornerstone of the system of interoperability standards that ensure that wireless internet devices and mobile phones can talk to each other,” 

Competitor products such as various other smartphone providers would be unfairly prejudiced without fair licensing agreement and limit their commercial viability in the field. 

Google entered into a legally binding consent decree affirming that it would abide by the FRAND principles and provide fair licenses for third parties with regards to Google’s standard-essential patents.

Many view the outcome of this investigation as incremental improvement for the clarity of this specialized area of patent law. Furthermore, this may serve to be a template for other technology patent licensing cases which arise and providing guidance to issues regarding equitable licensing schemes for standard-essential patents, and potentially reducing avoidable issues in litigation.

By: Kamaldeep Sembi
 

Driving Alternative Inc. v. Jarvis, Federal Court Trial Division, 5 December 2012

The Federal Court holds that KEYS PLEEZZ is confusing and infringes upon the plaintiff’s mark KEYS PLEASE, but reduces the amount of damages for lack of adequate evidence to support the damages requested by the plaintiff. 

This was an action for trademark infringement, passing off and depreciation of the plaintiff’s goodwill. The plaintiff registered the trademark KEYS PLEASE in 1997 in association with designated driving services. The plaintiff’s company advertises extensively in print and on the internet, and operates through franchises in four provinces.  In early 2012, the defendant registered the business name KEYS PLEEZZ and started offering and advertising the same services as the plaintiff in the Oshawa area.  

In the lead-up to the trial, the defendant repeatedly avoided service of the plaintiff’s documents and did not respond to two cease and desist letters. Nor did she file a statement of defense. 

The Federal Court held that the defendant’s trademark KEYS PLEEZZ did in fact cause confusion and infringe upon the plaintiff’s mark.  Although the defendant made a slight graphic amendment to the mark, from an auditory and connotational point of view, the marks were identical.

In determining whether the mark created confusion, the Court considered the five factors subscribed under subsection 6(5) of the Trademarks Act. It stated that ‘the defendant’s avoidance of service and its failure to respond to the cease and desist letter from the plaintiff, and more importantly, her deliberate advertisement in a Facebook page shows knowledge and deliberate intent to infringe and pass off.’

However, on the issue of damages the Court did not agree exactly with the plaintiff. The plaintiff had requested damages of $70,000, calculated on the basis of a franchise price of $32,000 and annual royalties of $38,000, assuming that the franchise would have minimum weekly sales of $5000. The plaintiff claimed that, as a result of the defendant’s operation, it was deprived of a business opportunity in the Oshawa area worth $70,000.  But the plaintiff did not provide any evidence to establish that a franchise in the Oshawa area would in fact generate $5000 per week, and it did not provide any evidence as to how much its existing franchises generated.  

As a result of the plaintiff’s failure to provide evidence to establish a franchise’s weekly revenue, and especially in view of the fact that two competitors already operated in the Oshawa area, the Court reduced the amount of the damages to $50,000, although it did not explain exactly how it reached at this amount. The damages awarded also included damages to the plaintiff’s goodwill.

By: Nazanin Ghaissarnia 

 

No Need to Fear a Green Christmas

Environment Canada’s weather forecast for Christmas is bleak. I am saddened to report that most of Canada will have a Green Christmas according to CTV News. 

Never fear there are options available as evidenced by a review of the Canadian Intellectual Property Patent Database. A search of the database using the term “snow making” revealed 47 patents and applications directed to making snow. 

They include Canadian Patent No 2,237,428 entitled a “METHOD AND APPARATUS FOR MAKING SNOW” which is directed to a snow making tower that discharges pressurized air and water through nozzles to form plumes of atomized water for producing snow in subfreezing conditions. 

There are also options available to those individuals that would rather stay inside, including Canadian Patent No. 1,332,517 entitled “SNOW MAKING EQUIPMENT” which is directed to methods and equipment for making snow in an indoor environment over extended period. 

Regardless of what your plans are for over the holiday season, we at www.CanadaIPblog.com wish you a safe and happy holidays and a prosperous New Year.

By Claire Palmer

When Inventors Don't Get Along: Baksh v. Probiohealth, LLC, 2012 FC 1388

The Federal Court of Canada recently reviewed the decision of the Commissioner of Patents to remove Mr. Bing Baksh as a named inventor on Canadian Patent Application No. 2, 503,510 (‘the ‘510 application). A copy of the decision can be found at the following link: 

http://decisions.fct-cf.gc.ca/en/2012/2012fc1388/2012fc1388.html 

This is an interesting decision with respect to whom the Patent Office can communicate with respect to a patent application and in particular with respect to changes in inventorship. Perhaps most interestingly, this case highlights that the Canadian Patent Act does not provide a mechanism or forum to address all issues relating to inventorship and ultimately ownership of the inventions claimed in an application. 

The issues addressed in this decision can perhaps be distilled down to the following - What recourse within the context of the Patent Act does a named inventor have to prevent their removal from the patent application? Or rephrased – Does a named inventor have a legitimate expectation that he/she could make submissions to the Commissioner of Patents in relation to requests by the authorized correspondent to have them removed as an inventor. 

The Federal Court determined that the inventor “could not have had a legitimate expectation that he would have an opportunity to make submissions.” (Paragraph 30). The reasons for this are 1) Rule 6(1) limits who the Commissioner of Patents can communicate with respect to a pending application and 2) Section 31(3) of the Patent Act does not provide for submission of affidavits by the inventor that is being removed. 

In particular, for patent applications where the Applicant is not the inventor, Rule 20(1) requires that the Applicant appoint a patent agent to prosecute the application. The ‘510 application was filed in the name Probiohealth with Gowling Lafleur Henderson appointed as patent agent. 

To whom the Commissioner of Patents can communicate with respect to a pending application is set forth in Section 6(1) of the Patent Rules. Section 6(1) states: 

6. (1) Except as provided by the Act or these Rules, for the purpose of prosecuting or maintaining an application the Commissioner shall only communicate with, and shall only have regard to communications from, the authorized correspondent. The authorized correspondent is defined in Section 2 of the Patent Rules as follows: “authorized correspondent” means, in respect of an application, 

(a) where the application was filed by the inventor, …. 

(b) … 

(c) where paragraphs (a) and (b) do not apply, a patent agent appointed pursuant to section 20;

Accordingly, for the ‘510 application Gowlings was the authorized correspondent and therefore the Commissioner of Patents only had authority to communicate with them and had no discretion to communicate with or accept submissions from Mr. Baksh. 

It is apparent from this case that the Patent Act does not provide recourse to named inventors during an inventorship dispute with the Applicant. That being said, depending on the fact situation, it does not mean that there are no options available to such inventors, this is especially true if there are contracts or agreements in place that govern the relationship between the parties thereby providing jurisdiction to the provincial courts.

By Claire Palmer

Bill to Amend Patent Act Defeated

Last week Bill C-398, a Private Member’s Bill which if had passed into law would have amended the Patent Act to make it easier for Generic Companies to manufacture and export patented medicines to developing and least-developed countries to help combat HIV/AIDS, tuberculosis, malaria among other epidemics was defeated at second reading by a vote of 148 to 141. The full text of the bill can be found at: http://parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5391829. 

The defeat of this bill was a disappointment to many including Grandmothers Advocacy Network and the Canadian HIV/AIDS Legal Network. Grandmothers Advocacy Network and the Canadian HIV/AIDS Legal Network.UNICEF Canada, Grandmothers Advocacy Network and the Canadian HIV/AIDS Legal Network, among others and has been heavily criticized in the press with some describing it as “immoral” or a “travesty”. See links below: 

http://www.theglobeandmail.com/news/politics/second-reading/tory-defeat-of-generic-drug-bill-is-immoral/article5852811/ 

http://grandmothersadvocacy.org/Type/bill-c398/ 

http://www.unicef.ca/en/press-release/unicef-canada-disappointed-bill-c-398-%E2%80%93-medicines-for-all-legislation-%E2%80%93-does-not-pass- 

http://www.aidslaw.ca/publications/interfaces/downloadFile.php?ref=2096 

As a patent professional, I can’t help but wonder if the defeat of this bill and the associated negative press will do damage to efforts to improve patent protection for pharmaceuticals in the Canadian market. The question is in the long term, would Innovators have gained more (in terms of public goodwill for innovation) if this bill had passed.

By Claire Palmer