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COMPARATIVE ADVERTISING SUMMARY

Clairol case - - Wares - - 1968

The Plaintiff sought relief for passing off, trade-mark infringement and depreciation of goodwill under Section 22 of the Trade-marks Act.

Section 7(d) and (e) failed, inter alia, because no one would be mislead by what was stated.

The trade-mark infringement claim failed since Revlon was not “using” Clairol’s registered trade-marks for the purpose of distinguishing its goods - - i.e., as a trade-mark

The Section 22 claim was successful. The “use” of the trade-mark on the packaging was a violation of Section 22 since the “use” of the registered trade-mark fell within the definition of Section 4 of the Trade-marks Act, and involved “a course of conduct which would be likely to depreciate the goodwill attaching to the Plaintiffs’ marks” - - that conduct being encouraging buyers to switch from the Plaintiff’s wares to purchasing the buyers wares

However, printing the Plaintiff’s registered trade-marks on the comparative shade charts of the Defendant’s brochures was not found to be a “use” of such trade-marks within the meaning of Section 4.

The Clairol case was controversial as it may be interpreted as distinguishing between comparative advertising done in connection with wares, and comparative advertising done in connection with services. The discrepancy may derive from the definition of use of a trade-mark in association with wares, as compared with the definition of use of a trade-mark in association with services.

Eye Masters - - Services - - 1992

An interlocutory injunction issued against the Defendant for its comparative optical services advertising campaign, as the Court found there to be a serious triable issue.

The Defendant compared the Plaintiff’s optical services unfavourably with its own on price.

While the judge suggested that the Court’s “initial view was to think that the activity in question would not infringe that right” (i.e., the exclusive right to use under Section 19 of the Trade-marks Act), and while the judge felt that it was “at least arguable that the advertisement [was] directed at the goodwill of the business not the goodwill of the trade-mark” - - - it granted interlocutory relief as the judge felt the “legal issue which underpins the dispute in this case has not been resolved” - - i.e., whether comparative advertising in respect to services was actionable.

The question therefore of use of the trade-marks in comparative advertising in respect to services is an open question.

Future Shop Ltd. et al v. A. & B. Sound Ltd. etc., 1994 CanL11 1068 (BC S.C.); 55 C.P.R. (3d) 182

Please note that this is not the case given in your materials.

FACTS:

The Plaintiff and Defendant were each involved in the retail sale of electronic products.

The Defendant highlighted its “low” prices in comparison with those of its competition by advertisements.

The Plaintiff applied for interlocutory relief under Sections 19 and 22 (1) to restrain the Defendant from referring to the Plaintiff’s trade-marks in comparative advertising. Its request was denied, notwithstanding that Future Shop had met the threshold test. It was denied on the basis that the balance of convenience favoured refusal of the injunction.

The Court opined that Section 22 is a “unique provision capable of substantially divergent interpretation. Broad interpretation “would preclude comparative pricing, at least of services, and prohibit comparative price ads of a type that are commonplace in contemporary retail advertising of price-sensitive products”.

The Court pointed out that no appellate court in Canada has definitively interpreted Section 22.

What is interesting about the case is the following statement in obiter by the Court:

“The question, depending on the evidence in a particular case, is whether the use the competitor’s trade-mark is for a purpose which stresses the similarities or the differences with the trademarked competition. If the purpose is to stress the similarities, the value of the goodwill associated with the trademark is appropriated in a manner contrary to the intent of Section 22. If use stresses the differences with the trademark, then the use is for the purpose of distancing the trademarked ware or service and Section 22 is not offended”.

APPEALS FROM SECTION 45 DECISIONS BY THE REGISTRAR OF TRADE-MARKS

If no further evidence is filed on Appeal, it is a question of law. The standard of review is correctness. The issue becomes - - was there a factual basis for the finding. A decision can be overturned if the Appellant proves there was no evidence (facts) to support the finding.

If further evidence is filed on Appeal, it becomes essentially a whole new hearing. It is then a question of fact and law.