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By: Shereen Hamdy

What is the proper test for confusion when deciding trade-mark infringement and passing off cases? Is it sufficient that consumers think that the two products come from the same source?.

The Ontario Court in Kraft Jacobs Suchard (Schweiz) AG v Hagemeyer Canada Inc., [1998] O.J. No. 415, held that in determining the test for confusion it is enough that consumers think that the two products come from the same source.

The plaintiff, Kraft Jacobs Suchard (Schweiz) ("Kraft") is the manufacturer of the Toblerone chocolate bar and Kraft Canada Inc. is the exclusive importer of Toblerone bars in Canada. The plaintiff is the owner of Canadian trade-marks for the "Tread Design" (the triangular peaks), "Triangular Design", "Toblerone Design" and "Toblerone" mark.

The defendant, Hagemeyer Canada Inc. ("Hagemeyer") is the former exclusive Canadian distributor of Toblerone bars. The distribution agreement was lawfully terminated effective January 1, 1997. Immediately following the termination of the agreement, the defendant developed a milk chocolate confectionery product called ALPENHORN for distribution in Canada. The Alpenhorn bar came in a triangular package, had bite-sized sections called "treads" or "peaks", and consisted of the same ingredients as the Toblerone bar. Although their shapes were similar, they were not identical: the Alpenhorn peaks had a more rounded appearance. Additionally, the overall packaging was of a different colour. The chocolate bars were sold in the same channels of trade, namely major department stores, mass merchandisers, grocery stores and drug stores. In some cases, both chocolate bars were sold side by side on retailers' shelves.

Kraft brought an action in the Ontario Court seeking a summary judgment. Hagemeyer brought a cross motion to dismiss the case. Judgment was granted to Kraft as Mr. Justice Williams Festeryga found that the packaging and shape of the products were very similar in appearance.

Both parties retained experts to conduct surveys on the issue of "confusion" in the marketplace.

Hagemeyer argued that the public is confused only if they perceive the products to be the same. Hagemeyer's survey question was, "Looking at these (referring to the Alpenhorn display), do you think the Alpenhorn bar is an actual Toblerone bar, or do you have no opinion?

Kraft argued that the test for confusion is not whether people think the products are actually the same, but rather it is a question of whether the consumers believe that the products may come from the same source. Thus, Kraft's survey question looked at source confusion: "Which company do you believe puts out the brand of chocolate product you just saw?"

The Court preferred Kraft's expert survey over that of Hagemeyer. The Court held that whether the claim is for trade-mark infringement or passing off, the proper legal test for confusion is "source confusion" (i.e. confusion as to source) rather than "product confusion":

The resemblance or similarity of wares or services is no longer the controlling criteria, but is only one of the surrounding circumstances which Section 6(5) requires to be considered.

Based on Kraft's survey, the Court concluded that there existed the likelihood of confusion as a significant percentage of the public thought the two products were made by the same company.

A permanent injunction against the sale of the Alpenhorn bar and delivery up of all infringing material was ordered by the court. An appeal was contemplated, but the case has been settled.

Contact Marijo Coates for more information on the protection or enforcement of Trade-marks and Trade Dress.

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