Invisible Branding Constitutes Trade-Mark Infringement

In Imperial Tobacco Canada Limited v Philip Morris Products SA, the Canadian Federal Court of Appeal (Court of Appeal) recently set aside the judgment of the Federal Court that Philip Morris’ use of the “ROOFTOP Design Trade-Mark” in association with cigarettes does not infringe any rights Imperial Tobacco may have under the Trade-Marks Act (Act). The Court of Appeal ruled that the no-name packages (red, gold and silver version) infringe Imperial Tobacco’s rights in the registered trade-mark MARLBORO pursuant to section 20 of the Act. Marlboro Canada and Imperial Tobacco have owned rights to the trade-mark MARLBORO in Canada since the 1920s. During that period, Philip Morris gained popularity in the United States by marketing its famous cigarette brand, Marlboro. To enter the Canadian market, it launched Canada-only brands, Maverick and Matador, which were accompanied by their famous “rooftop design” packaging but did not infringe Imperial Tobacco’s trade-mark rights in MARLBORO. The dispute arose when, in 2006, Philip Morris marketed cigarette packages with no brand name but which displayed the famous rooftop design feature. Imperial Tobacco argued that such packaging conveyed the idea of MARLBORO and presented evidence that retailers mistakenly supplied the Philip Morris brand when asked for Marlboro, demonstrating confusion between the two brands. However, despite this evidence, Justice de Montigny in the Federal Court ruled that confusion was not created because the word Marlboro was not used and there was no inherent meaning in the design. The Court of Appeal disagreed with Justice de Montigny’s finding that only “inherent” ideas could give rise to trade-mark confusion. Relying on case law, the Court of Appeal found that resemblance in ideas was not restricted to a resemblance between the dictionary meanings of different words and that other suggestions acquired through marketing or use in a particular way could lead to an infringement. The Court of Appeal clarified that the cigarettes market is “a dark market” and if the trade-marks are not in view, consumers will use the same name to refer to two different products offered by two different manufacturers. Thus, the omission of the brand along with cues such as “world famous imported blend” may evoke the idea of Marlboro. By considering these surrounding circumstances and adopting a purposive and contextual interpretation of the Act, the Court of Appeal concluded that there is a likelihood of confusion between the sources of the products under review if both MARLBORO and Philip Morris’ no-name packages are used in Canada. As a remedy, the Court of Appeal issued a permanent injunction restraining Philip Morris from selling, distributing or advertising cigarettes in association with the no-name packaging in Canada. Further, the Court of Appeal dismissed Philip Morris’ attack on the validity of Imperial Tobacco’s registration and found that the trade-mark registrations of Philip Morris for its Rooftop Designs does not provide a valid defense to infringement because the designs do not contain the confusing cues carried in the actual packaging. This landmark decision may yet be appealed to the Supreme Court of Canada but, for now, it may encourage registered trade-mark owners to target competitors which evoke the idea or essence of well-recognized brands without actually using the key marks. Summary by: Sumaiya Sharmeen