“Flick My Bic”



“FLICKMYBIC”

by
HuguesG.Richard
LEGERROBICRICHARD,Lawyers
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
1001Square-Victoria-BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.:(514)9876242-Fax:(514)8457874
www.robic.ca-info@robic.com
Whenasloganoratrademarkbecomestoofamous,theremightbesome
downsidestosuchsuccess.ThisisatleastwhatBICInc.musthavefeltafter
theSuperiorCourtoftheProvinceofQuebec,districtofMontreal
condemnedittopayasumofapproximately$200,000.00mainlybecauseit
authorizedtheuseofitsnamebyagroupofnonescrupulouspromoters
therebytransmittingtothepublicatlargeamessagethattheprogramin
whichitwasco-operatingwaslegitimate.AccordingtothetrialJudge,BIC’s
faultwasoneofomissioninfailingtocheck.
FortunatelyforBICtheCourtofAppealoftheProvinceofQuebecina
unanimousjudgmentgivenonApril21,1989(CourtofAppealNo.09-001492-
859)disagreedwiththeTrialJudgeandconsideredthatBIChadno
obligationtocheck.Onappeal,itwasconsideredcommongroundthatthe
Respondentswerethevictimsofawellorchestratedconspiracytodefraud.
Thefraudconsistedofaschemetoconvincemembersofthepublictoinvest
inthepurchaseofcoin-operatedvendingmachines.Advertisementswere
placedCanadawide.Theadspromisedasuccessfulbusinessopportunity,
largeprofits,minimumlabour,guaranteedlocations,…inmarketingcigarette
lightersfromcoin-operatedmachines.Mostofthesepromisesnevermatured
andtheinvestorslostwhatevermoneytheyhadinvested.
In1980,oneofthepromotershadsecuredfromBICpermissiontouseits
name,itslogotype(logo)andsalesslogan”FLICKMYBIC”inadvertisements,
thetextor”copy”forwhichwasapprovedbyBICInc.Thepromotersdidnot
quailatusingtheBICtrademarkonmanyitemsandinmanyapplicationsnot
approvedbyBICInc.Theseincluded,memostopurchasers,application
forms,installationsheets,letterheads,blankbusinesscards,office
identificationdevicesandothers.
NeithertheAppellantnorRespondentscontestedthefindingoffactbythe
trialcourtthattherewascontractualobligationimposedonBICasaresultof
itshaving”heldout”toRespondentsthatthepromoterswereitsmandataries.



ThetrialcourtbaseditscondemnationofAppellantsquarelyonthefaultof
omission:”BIC’sfaultwasoneofomissioninfailingtocheck.”Thefindingofa
faultof”omissiontocheck”isonlytenableinthecircumstances,ifthefault
committedbythepromoterswasforeseeablebyBIC.
Therewasnoindicationatthetimetheapprovalwasgivenfortheuseofthe
BIClogoandpromotionalmaterialthatthepromoterswereengagedina
fraudulententerprise.TherewasnocontractualobligationconstrainingBICto
examinethebonafides
ofthepromotersvis-à-visthesubdistributors,and,
therewasnoevidencethatwouldrequireareasonablepersontocometoa
stateofalertorvigilancebecauseoftheforeseeablepossibilitythata
criminalfraudwastobeperpetrated.
EvenafterapprovalwasgivenforuseoftheBIClogo,therewasnoindication
thepromoterswerehavingdifficultywiththesubdistributorstheyhad
obtainedcommitmentsfrom.TheCourtofAppealconcludedthatinthe
absenceofanygroundtosuspectcriminalfraudprovidinggroundsfor
vigilanceandalertness,itwasunabletoconclude,asdidthetrialcourt,that
BICInc.wasliableforforeseeabledamagesduetoitsfailuretoactto
preventacriminalfraudtheyhadnoreasontosuspectexisted.
BeforetheCourtofAppeal,Respondentpreferredinargumentstooverlook
thefindingoffaultrelieduponbythetrialcourtandtobasetheirclaimon
thetheorythatBICauthorizedthepromoterstouseitstrademarkwhich
authorizationconstitutedalicenseduse.Respondents’relianceuponthe
trademarkentitledthemtoassumethatthepromotersschemewaswithin
thenormsofqualityandreliabilityusuallyassociatedwithBICproducts,
accordingtothisargument.BIC’sliabilitywassaidtoarisefromitsfailure,as
ownerofthetrademark,toensurethatthiswasso.
ThetheoryproposedbyRespondentsisfoundedonanumberofdecisions
basedontextsoflawandjurisprudenceforeigntothelawofQuebec,and
foreigntoCanadianpatentandtrade-marklaw.
Itisalsofoundedonthesuggestionthatthepromoterswerelicensedusersof
theBICtrademark,whichwasmanifestlynotthecase.Infactaproposal
thatalicenseagreementbeenteredintowasneverconsummated,and
relianceonthetermsoftheproposeddraftlicenseagreementisofno
assistancehere.Nolegalauthoritywascitedthatwouldallowoneto
concludethatthefactshereconstituteadefacto
licensingagreement.In
anyevent,suchlicensingagreement,accordingtotheauthorities,goto
guaranteeconsumerslegitimacyoftheproductasbeingtheoneitis
representedtobe.



TheschemeoftheTrade-MarkAct,invokedhereistoprovideprotectionto
theowneranduserofthetrademarkandthepenaltyforitsfraudulentuse,is
tolosethatprotection.
Thereis,furthermore,noevidenceinthepresentcasethatAppellantdidnot
retaincontroloverthecharacterandqualityofthegoodssoldunderthe
mark.ThecharacterandqualityofthelighterssoldbyBICarenotputin
questionhere.
TheacceptanceinthiscasethatallRespondentsknewtheyweredealing
withthepromoters,andnotwithBIC,thattherewasno”holdingout”thatthe
promotersweremandatariesofBIC,andthatRespondentswerebuying
equipmentandservicesnotmanufacturedorprovidedbyBICeliminatesthe
necessityofexaminingtheapplicationoftrademarklawsdirectedto
preventingconfusioninthemindoftheconsumers,and,insomejurisdictions
permittingawardsfordamagesagainstfranchisorsandotherexploitersof
trademarkswhoallowthatconfusiontoexist.Thecourtofappealsawno
meritintheargumentdrawnfromsection49(todaysection50)oftheTrade-
MarksAct.Itistruethattheuseofthetrademarkbyaregistereduser,forall
purposesoftheAct,hasthesameeffectasusebytheregisteredowner.Itis
quiteanotherthinganditinvolvesalargeandunwarrantedextensionofthis
principletosaythat,becausearegistereduserusesamark,theownerofitis
forpurposesoftheAct,engagedinsupplyingservices.
Basedontheabove,thecourtallowedtheappeal.
Publishedat(1989),4W.I.P.R.212-213underthetitleOwnerofTrade-MarkNot
LiableForPromoters,FraudulentScheme.
LEGERROBICRICHARD,1989.



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