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Passing off – Section 7 of the trade-marks Act

2010-01-01

PASSINGOFF
SECTION7OFTHETRADE-MARKSACT

B
ARRYGAMACHE*
ROBIC,
LLP
L
AWYERS,PATENTANDTRADE-MARKAGENTS

A
RTHURRENAUD
BENNETJONES
L
AWYERS,PATENTANDTRADE-MARKAGENTS

6.1THEORIGINSANDEVOLUTIONOFTHETORTOFPASSINGOFF
6.1.1Originalscopeofthetort
Theconceptofpassingoffwasdevelopedinthenineteenthcentury:
…nomanisentitledtorepresenthisgoodsasbeingthegoodsof
anotherman;andnomanispermittedtouseanymark,signorsymbol,
deviceorothermeans,whereby,withoutmakingadirectfalse
representationhimselftoapurchaserwhopurchasesfromhim,he
enablessuchpurchasertotellalieortomakeafalserepresentationto
somebodyelsewhoistheultimatecustomer…[H]emustnot…make
directly,orthroughthemediumofanotherperson,afalse
representationthathisgoodsarethegoodsofanotherperson.
1

Moresuccinctly:”Nobodyhasanyrighttorepresenthisgoodsasthegoodsofsomebody
else.”
2

Theoriginalscopeofthe”passingoff”actionwasthusconcernedwithan
unauthorizeduseofatrade-mark/trade-namebelongingtoone’scompetitorsoasto
induce,inpotentialpurchasers,thebeliefthattheunauthorizeduser’sgoodswere

©CIPSetal.,2010.*Lawyerandtrade-markagent,BarryGamacheisapartnerwithROBIC,LLP,amultidisciplinaryfirm
oflawyersandpatentandtrade-markagents.PublishedaspartoftheIPBenchbook(update2009-
05-31).Publication404
1SingerManufacturingCo.v.Loog(1880)18Ch.D395(C.A.);affirmed(1882)8App.Cas.15(H.L.)2A.G.Spalding&Bros.v.A.W.GamageLtd.(1915),32R.P.C.273at283(H.L.)

2
thoseofthetrade-mark/trade-nameowner3.
Thecauseofactionwasnottriggeredunlessthecaseinvolvedcompetingtradersin
thesamelineofbusiness.
6.1.2Extendedversionofpassingoff
Thetortwas”extended”(thisexplainsthephrase”extendedformofpassingoff”seen
insomedecisions)tocurtailtheactivitiesofnon-competitorswhoadoptedthe
identicalorconfusingtrade-mark/trade-nameinassociationwithwaresorservices
whichfalselysuggestedthattheplaintiff’sanddefendant’sbusinesswere
nonethelessconnectedinsomeway.
TheHouseofLordsinSpalding
4identifiedfivecharacteristicswhichmustbepresent
inordertohaveavalidcauseofactionforpassingoff:
1)amisrepresentation;
2)madeinthecourseoftrade;
3)toprospectivecustomersofhisorultimateconsumersofgoodsor
servicessuppliedbyhim;
4)whichiscalculatedtoinjurethebusinessorgoodwillofanothertrader
(inthesensethatthisisareasonablyforeseeableconsequence);and
5)whichcausesactualdamagetoabusinessorgoodwillofthetraderby
whomtheactionisbroughtor(inaquiatimetaction)willprobablydo
so.

Thepassingofftestwasrecastin1990bytheHouseofLords
5:
Theplaintiffmustsatisfythreeelements:1)thattheplaintiffhastherequisitedegreeofgoodwillorreputationinthe
mindofthepurchasingpublic;
2)thatthedefendanthasmadeamisrepresentationtothepublic;and
3)thattheplaintiff,asaresultofthemisrepresentation,hassuffered,oris
likelytosuffer,damage.

In1992,theSupremeCourtofCanadaconfirmedthistri-partitetest.Thethree
necessaryelementsofapassingoffactioninCanadaarethus:theexistenceof
goodwill,thedeceptionofthepublicduetoamisrepresentationandactualor
potentialdamagetotheplaintiff.
6

3ErvenWarninkB.V.etal.v.J.Townsend&Sons(Hall)Ltd.etal.,[1980]R.P.C.31(H.L.)4A.G.Spalding&Bros.v.A.W.GamageLtd.(1915),32R.P.C.273(H.L.)5Reckitt&ColmanProductsLimitedv.BordenInc.&Ors,[1990]R.P.C.341(H.L.)6Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120atpara.33

3
6.1.3Currentintereststobeprotected
Thelawofpassingoffexistsnotonlytoprotecttheinterestsoftradersbutalsoto
protectthepublic:Theroleplayedbythetortofpassingoffinthecommonlawhas
undoubtedlyexpanded.…Thesimplewrongofsellingone’sgoods
deceitfullyasthoseofanotherisnotnowthecoreoftheaction.Itisthe
protectionofthecommunityfromtheconsequentialdamageofunfair
competitionandunfairtrading.
7

6.2THEELEMENTSOFTHETORTOFPASSINGOFF
6.2.1Goodwill
TheSupremeCourthasrecentlydiscussedtheconceptof”goodwill”:
8
GoodwillisnotdefinedintheAct.Inordinarycommercialuse,it
connotesthepositiveassociationthatattractscustomerstowardsits
owner’swaresorservicesratherthanthoseofitscompetitors.In
ManitobaFisheriesLtd.v.TheQueen,[1979]1S.C.R.101,atp.108,
thisCourtadoptedthefollowingdefinitionof”goodwill”:
“Goodwill”isawordsometimesusedtoindicateareadyformed
connectionofcustomerswhosecustomisofvaluebecauseitislikelyto
continue.Butinitscommercialsensethewordmayconnotemuch
morethanthis.Itis,asLordMacnaghtenobservedinInlandRevenue
Commissionersv.Muller&Co.’sMargarineLtd.[1901]A.C.217,224,
“theattractiveforcewhichbringsincustom,”anditmayreside,notonly
intradeconnections,butinmanyotherquarters,suchasparticular
premises,longexperienceinsomespecializedsphere,orthegood
reputeassociatedwithanameormark.Itissomethinggeneratedby
effortthataddstothevalueofthebusiness.
(QuotingLordMacDermottL.C.J.inUlsterTransportAuthorityv.James
BrownandSonsLtd.,[1953]N.I.79,atpp.109-110).

Thetesttoestablishwhetherornotgoodwillexistsinatrade-mark/trade-namewas
framedbytheSupremeCourtofCanadainParke,Davis&Company:
Whatisnecessaryforatraderwhoisaplaintiffinapassingoffactionto
establish?Itseemstomethat,inthefirstplacehemust,inorderto
succeed,establishthathehasselectedapeculiar–anoveldesignasa
distinguishingfeatureofhisgoodsandthathisgoodsareknowninthe
market,andhaveacquiredareputationinthemarketbyreasonofthat

7ConsumersDistributingCo.v.SeikoTimeCanadaLtd.,[1984]1S.C.R.5838VeuveClicquotPonsardinv.BoutiquesCliquotLtee,[2006]S.C.J.No.22atpara.50

4
distinguishingfeature,andthatunlessheestablishesthat,thevery
foundationofhiscasefails9.

Whenthe”trade-mark”assertedbytheplaintiffcomprisestheparticularshapeofan
object,theCourtmustbesatisfiedthattheshapeisnotpurelyfunctional
10andthat
theshapeoftheplaintiff’sproductshasacquireda”secondarymeaning”intheminds
ofthepurchasingpublic.
11

Aplaintiffmustthereforeprovetheexistenceofacommercialreputationorgoodwill
createdthroughtheexclusiveassociationofthename,markorotherindiciarelied
uponwithitsbusiness,waresorservices.Thisproofnecessitatesthattheplaintiff’s
nameormarkbedistinctiveoftheplaintiff’sbusiness,waresorservices.
Distinctivenessistheveryessenceofatrade-markatcommonlawandunderthe
Trade-marksAct-withoutitthereisnoprotectableright.
12

Atrade-markbecomesnon-distinctivewhenitdeviatesfromitsregisteredform,
becomesgenericorpartofthepublicdomainorisimproperlyassignedorlicensed
suchthatthetrade-markceasestobeindicativeofasinglesource.
13

The”singlesource”,however,neednotbeonesingleentitybutmaycomprisea
groupofentitiesundertheconceptof”sharedgoodwill”.So,forexample,allthe
makersofFrenchchampagnecouldpursueanactionforpassingoffgroundedintheir
sharedgoodwilltothemarkandappellation,CHAMPAGNE.
14

Inmostcases,thebreadthofaplaintiff’sgoodwillextendsonlytothespecificwares
andservicesinassociationwithwhichthetrade-markhasbeenused.Forexample,
thetrade-markFANTASYLANDusedabroadinassociationwithanamusementpark
hadsufficientgoodwillinCanadatosupportapassingoffclaimagainstadefendant
whoalsousedthesametrade-markinassociationwithsimilarservices.
15

9Parke,Davis&Co.v.EmpireLaboratoriesLtd.,[1964]S.C.R.351at358(S.C.C.)10Seesection5.211OxfordPendaflexCanadaLtd.v.KorrMarketingLtd.,[1982]1S.C.R.494;RayPlasticsLtd.etal.
v.DustbaneProductsLtd.(1990),75O.R.(2d)37(O.S.C.);affirmed(1994),57C.P.R.(3d)474
(O.C.A.)
12R.Scott.Jolliffe,“TheCommonLawDoctrineofPassingOff”inGordonF.Hendersoned.,Trade-
marksLawofCanada(Toronto:Carswell,1993)at206–207
13RegistrarofTradeMarksv.CompagnieInternationalepourI’InformatiqueCIIHoneywellBull,
[1985]1F.C.406(F.C.A.);AladdinIndustries,Inc.v.CanadianThermosProductsLtd.,[1962]2Ex.
C.R.80;Heintzmanv.751056OntarioLtd.(1990),38F.T.R.210;MarketingInternationalLtd.v.S.C.
JohnsonandSon,Limited,[1979]1F.C.65(F.C.A.)
14InstitutNationaldesAppellationsd’OriginedesVinsetEaux-de-Vieetal.v.AndresWinesLtd.et
al.(1987),60O.R.(2d)316(O.H.C.);affirmed(1990),740.R.(2d)203(O.C.A.)
15WaltDisneyProductionsv.TripleFiveCorp.(1992),43C.P.R.(3d)321;affirmed(1994),53C.P.R.
(3d)129(Alta.C.A.)

5
However,thegoodwillassociatedwiththattrade-markdidnotexist”atlarge”to
supportapassingoffclaimagainstthesamedefendantwhousedthesametrade-
markinassociationwithdissimilarservicesoftheoperationofahotel.
16

Incasesinvolving”famousmarks”,however,thegoodwillattachedtoafamousmark
maytranscendthespecificwaresandservicesinrespecttowhichithasbeenused
butonlyifthereisevidencethatconsumersarelikelytocometothemistaken
conclusionthatthedissimilarwaresorservicesprovidedbythedefendantareputinto
commercebyorwiththeauthorityoftheplaintiff.
17

6.2.2Deceptionduetomisrepresentation
Perhapsbecauseofthelanguageusedinformulatingtheinitialtestforpassingoff,
andnotwithstandingclearguidancefromtheSupremeCourtofCanada,
18some
Courtshaveinterpretedthesecondcriteriaasrequiringtheplaintifftodemonstrate
someintentionaldeceitfulactivity,adeliberatestrategytounfairlycompete,or
unethicalmotivesbeforetheywillfindliabilityforpassingoff.
19

TheSupremeCourtofCanadahasrecentlyre-affirmedthataplaintiffneednot
show
anyintentionalmisconduct,malafidesordeliberatedeceitfulactstosatisfythe
secondcriteria.Thedoctrineofpassingoffalsocoversnegligentorcareless
misrepresentationbythetrader.
20

Therefore,iftheTrialJudgeconcludesthatthedefendanthasadoptedanduseda
markornamewhichislikelytobeconfusedwiththeplaintiff’sdistinctivemark,name
ordesigninwhichtheplaintiffownsgoodwillorasecondarymeaning,the
requirementtoprovemisrepresentationissatisfied.Thefactthatthe
misrepresentationisinnocentisnodefence.
21

Certainly,anydeliberateconductengagedinbythedefendanttodeceivewillalways
bearelevantfactor.
22Thepresenceofsuchmisconductwillmakeiteasierforthe
plaintifftosatisfythemisrepresentationrequirement.Ifthedefendantitselfbelieves

16WaltDisneyProductionsv.FantasylandHotelInc.(1994),56CPR(3d)129(Alta.QB);affirmed
(1996),67C.P.R.(3d)444(Alta.C.A.)
17VeuveClicquotPonsardinv.BoutiquesCliquotLtee,[2006]S.C.J.No.22;Mattel,Inc.v.3894207
CanadaInc.,[2006]S.C.J.No.23
18Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992)3S.C.R.120atpara.36;ConsumersDistributing
Co.v.SeikoTimeCanadaLtd.,[1984]1S.C.R.583at601
19See,forexampleMolsonCanadav.OlandBreweriesLtd.(2002),19C.P.R.(4th)201atparas.20–
24;KirkbiAGetal.v.RitvikHoldingsInc.(2002),20C.P.R.(4th)224atparas.119,120,14220KirkbiAGv.RitvikHoldingsInc.,[2005]S.C.J.No.66atpara.6821WaltDisneyProductionsv.TripleFiveCorp.(1994),53C.P.R.(3d)129atpara.54;Mattel,Inc.v.
3894207CanadaInc.,[2006]S.C.J.No.23atpara.90
22EnterpriseRent-A-CarCo.v.Singer,[1996]2F.C.694;affirmed(1998),79C.P.R.(3d)45

6
themarkisworthyoffilching,theCourtwilllikelyconcludeitisworthyofprotection.

Inordertoestablish”misrepresentation”undereitherthecommonlaworstatutory
causeofactionforpassingoff,theCourtisguidedbythetestforconfusionsetoutin
section6oftheTrade-marksAct.

Incommonlawpassingoffactions,themisrepresentationcriteriamaybesatisfiedby
establishingconductnotinvolvingtheuseofaconfusingtrade-mark.Asdiscussedin
section3.2.2below,thestatutorycauseofactionforpassingoffisonlytriggered
whenthedefendantusesanidenticalorconfusingtrade-mark.

Ifanycustomerfor,oruserof,theplaintiff’sproductsislikelytobeconfusedbythe
defendant’smisrepresentation,thesecondcriteriahasbeensatisfied.Theconfused
personneednotbetheplaintiff’sdirectcustomer.Theeffectofthemisrepresentation
upontheultimateconsumeroftheproductmustbetakenintoaccount.Thepurpose
ofpassingoffistoprotectallpersonswhoarelikelyusersoftheproductorservice.
23

Insum,amisrepresentation,whetherdeliberateorinnocent,andwhethermadebya
competitorornot,whichhastheeffectofimpairingthegoodwillofaplaintiffby
misleadingtheplaintiff’sdirectorultimatecustomersastothesourceofthe
defendant’swares,serviceorbusiness,willsatisfythesecondcriteria.Theabsence
ofsuchlikelihoodofconfusionisfataltothepassingoffclaim.
24

6.2.3Actualorpotentialdamage
Onceaplaintiffhasestablishedagoodwillorreputationattachedtoitsgoodsor
servicesinthemindofthepublicwhichissymbolizedbyaname,word,designor
guise;andamisrepresentation(whetherornotintentional)likelytoleadthepublicto
themistakenconclusionthatthedefendant’sgoodsorservicesarethoseoforthose
authorizedbytheplaintiff,someolderauthoritiesstandforthepropositionthat
damagemaybepresumed.
25

Forexample,whenthemisrepresentationleadstotheplaintiff’slossofcontrolover
theuseofitsnameormarkorthecreationofanimpedimenttotheplaintiff’suseofits
nameormark,thethirdcriteriaissatisfied.
26

However,theFederalCourtandFederalCourtofAppealhavemorerecently

23Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.12024YvonDroletv.StiftungGralsbotchafgtetFoundationduMovementduGraalCanada2009CF1725WaltDisneyProductionsv.TripleFiveCorp.(1992),43C.P.R.(3d)321;affirmed(1994),53CPR
(3d)129atpara.84(FCA)
26OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1984),80C.P.R.(2d)153
(O.H.C.);affirmed(1985),50O.R.(2d)726(O.C.A.)

7
concludedthatwherethereisnoevidencethatthedefendants’useofitstrade-mark
hasledtotheplaintiff’slossofbusiness;orthereisnoevidencethattheplaintiffhas
suffereddamageinthesenseofalossofcontroloveritsreputation,imageor
goodwill,therequirementupontheplaintifftoprovedamagehasnotbeensatisfied.
27
AbifurcationOrderdoesnotrelievetheplaintifffromthenecessityofprovingthe
existenceofdamageasanelementofitscauseofaction.
28

6.3STATUTORYCODIFICATIONOFpassingoff
6.3.1Introduction
TheTrade-marksActprovidesaregistrationprocessthatisoneofthemoreobvious
meansParliamentchoseforprotectingtrade-marks.Undersection19oftheActand
subjecttosections21,32and67,theregistrationofatrade-mark,unlessshowntobe
invalid,givestotheownertheexclusiverighttotheusethroughoutCanadaofthe
trade-markinrespectofthewaresorservicesmentionedintheregistration.
29As
noted,however,byLeBelJ.inKirkbiAGv.RitvikHoldingsInc.,30theTrade-marks
Actisobviouslymorethanaregistrationprocessasitestablishesaregulatory
schemeforbothregisteredandunregisteredtrade-marks.
31Itisalsoconcernedwith
unfaircompetitionandtheavoidanceofconsumerconfusion.32

AnyoverviewoftheTrade-marksActwouldnotbecompletewithoutmentioningthat
theActprohibitsunfairtradepracticesandtothateffectsetsoutacodeofconduct
whichisoutlinedinsection7.Althoughnotspecificallyassociatedwiththeprotection
oftrade-marks(indeed,itdoesnotevenmentiontheword“trade-mark”),section7of
theActcompletesthevariousprotectionmechanismsofferedtotrade-markowners
throughstatutoryactionswhichclaimtheirrootsinthecommonlaw’sfirstattemptto
ensurefaircompetitionandasfarassection7(b)isconcerned,theprotectionof
goodwillgeneratedthroughtheuseoftrade-marks.
33

Section7oftheTrade-marksActreadsasfollows:7.Nopersonshall(a)makeafalseormisleadingstatementtendingtodiscreditthe

27Toys“R”Us(Canada)Ltd.v.ManjelInc.(2003),24C.P.R.(4th)449atpara.68(F.C.);Nissan
CanadaInc.v.BMWCanadaInc.etal.,2007FCA255atparas.33-37(F.C.A.);TommyHilfiger
Licensingetal.v.QualityGoodsI.M.D.Inc.et.al.(2005)267F.T.R.259atparas.137-138(F.C.)
28NissanCanadaInc.v.BMWCanadaInc.etal.,2007FCA255atparas.33-37(F.C.A.)29Bacardi&Co.v.HavanaClubHoldingS.A.(2003),32C.P.R.(4th)366atpara.22(F.C.T.D.)
(affirmedbyBacardi&Co.v.HavanaClubHoldingS.A.(2004),32C.P.R.(4th)306(F.C.A.)).
30KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.31KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atparas.28,29and31.32KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.35.33KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.63.

8
business,waresorservicesofacompetitor;(b)directpublicattentiontohiswares,servicesorbusinessinsucha
wayastocauseorbelikelytocauseconfusioninCanada,atthetime
hecommencedsotodirectattentiontothem,betweenhiswares,
servicesorbusinessandthewares,servicesorbusinessofanother;
(c)passoffotherwaresorservicesasandforthoseorderedor
requested;(d)makeuse,inassociationwithwaresorservices,ofanydescription
thatisfalseinamaterialrespectandlikelytomisleadthepublicasto
(i)thecharacter,quality,quantityorcomposition,
(ii)thegeographicalorigin,or
(iii)themodeofthemanufacture,productionorperformance
ofthewaresorservices;or
(e)doanyotheractoradoptanyotherbusinesspracticecontraryto
honestindustrialorcommercialusageinCanada.

AsLaskinC.J.notedinMacDonaldv.VaporCanadaLtd.,
34section7gives
substancetothe“UnfairCompetition”portionofthesubtitlewhichimmediately
precedesit.
35Infact,section7isnotaprovisionwhichconcernstrade-marksperse;
ratheritsaimistoprohibitbehaviourwhichisconsideredtoconstituteunfair
competitionand,inrelevantcases,toprotectthegoodwillgeneratedbytrade-
marks.
36Thisnuanceisimportantasprotectingtrade-marksperseontheonehand
andprohibitingunfaircompetitionbyprotecting,inrelevantcases,thegoodwill
generatedbytrade-marksontheotheraretwodifferentbutrelatedaspectsof
consumerprotectionrelatingtotrade-marks.
Ontheissueofprotectingtrade-marksperse–asoneaspectofconsumerprotection
–LeBelJ.notedinKirkbiAGv.RitvikHoldingsInc.,
37thatatrade-markisasymbolof
aconnectionbetweenthesourceofaproductandtheproductitself.38ForBinnieJ.
inMattel,Inc.v.3894207CanadaInc.,39atrade-markisa“guaranteeoforigin”.40It
grantsitsownerexclusiverightstotheuseofadistinctivedesignation.41Through
variousprovisions,includingaregistrationprocess,theActprotectsthissymbol.With
theregistrationofatrade-mark,anownerhasmoreeffectiverightsagainstthird
parties
42(forexample,undersection19,noonecanuseanywhereinCanadaan
identicaltrade-marktotheoneprotectedbyregistrationforwaresand/orservices

34MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.35MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at142.36KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.35.37KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.38KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.39.39Mattel,Inc.v.3894207CanadaInc.,[2006]1S.C.R.772.40Mattel,Inc.v.3894207CanadaInc.,[2006]1S.C.R.772atpara.2.41KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.58.42KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.58.

9
identicaltotheonesdescribedintheregistrationcertificate43);proofoftitleisalso
facilitated.44

Anyregisteredtrade-mark,nomatterhowitisactuallyused,allowsitsownertoenjoy
exclusiverightsacrossCanadatotheuseofthetrade-mark.Aslongasits
registrationisvalidandineffect,theownerofaregisteredtrade-markcanclaimthe
monopolyrightsgrantedundersection19,irrespectiveofthecircumstancesofuseof
itsregisteredtrade-markwhichmayvaryinindividualcases.
45Becauseofthis
generalprinciple,theredoesnotappeartobeanysupportintheActfortheconcept
ofaregisteredbutsecondarytrade-markwhoseuseisrestrictedinassociationwitha
betterknownmark.
46Asaconsequence,trade-markownerscanregisterasmany
trade-marksastheirbusinessneedsrequire,afactimplicitlyconfirmedbysection15
oftheAct.Forthisreason,atrade-markownercanusemorethanasingletrade-
marktoidentifyitswaresand/orservices.
47However,theimportantpointtounderline
hereisthateachregisteredtrade-markwillbeprotectedasanindividualasset(albeit
withitsownspecificgoodwillwhichmayvaryfromtrade-marktotrade-mark),afact
confirmedbyseveralprovisionsoftheAct.
48Notwithstandingtheadvantageof
registration,evenwithoutitsbenefit,anownercanstillclaimpropertyrightsinits
trade-mark.
49

Section7hasafundamentallydifferentconcern;itputsforwardacodeofconductfor
traders;itisnotconcernedwiththestatesanctionedmonopolygrantedbysection19.
Inrelevantcircumstances,section7(b)protectsthegoodwilloftrade-marksthrough
theprohibitionofbehaviourdescribedasunfaircompetition.
50Itsaimistoavoid
consumerconfusion,toensurethatbuyersknowwhattheyarepurchasingandfrom
whom.
51Tothateffect,itprotectsmonopoliesinrespectofnameswhichidentifythe
distinctivenessofasource.52However,attherootofthisprotectionisa“kindof

43TraditionFineFoodsLtd.v.TheOshawaGroupLimited(2005),44C.P.R.(4th)81atpara.8
(F.C.A.).
44KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.58.45Mr.SubmarineLimitedv.AmandistaInvestmentsLimited,[1988]3F.C.91at102(F.C.A.);
CompagnieGénéraledesÉtablissementsMichelin-Michelin&Ciev.ContinentalGeneralTire
CanadaInc.(2000),8C.P.R.(4th)417atpara.46(F.C.T.D.).
46CompagnieGénéraledesÉtablissementsMichelin-Michelin&Ciev.ContinentalGeneralTire
CanadaInc.(2000),8C.P.R.(4th)417atpara.46(F.C.T.D.).
47RenaudCointreau&Ciev.CordonBleuInternationalLtée(2000),11C.P.R.(4th)95,193F.T.R.
182atparas.17and34(F.C.T.D.)(affirmedbyRenaudCointreau&Ciev.CordonBleuInternational
Ltée(2002),18C.P.R.(4th)415(F.C.A.));KraftLimitedv.RegistrarofTrade-marks,[1984]2F.C.
874at879(F.C.T.D.);Mantha&Associatesv.OldTimeStoveCo.Inc.(1990),30C.P.R.(3d)574at
575(T.M.S.H.O.);A.W.AllenLtd.v.RegistrarofTrade-marks(1985),6C.P.R.(3d)270at272
(F.C.T.D.).
48Seesections19,20and22oftheAct.49KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.58.50KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.35.51KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.63.52KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.67.

10
ownership”overanamewhoseusehasgeneratedgoodwill.AsGonthierJ.indicated
inCiba-GeigyCanadaLtd.v.ApotexInc.53whenreferringtopassingoffmore
generally,thereisalinkbetweentherighttobeprotectedagainstthe“pirating”ofa
brand,trade-nameortheappearanceofaproductandakindofownershipwhichthe
manufacturerhasacquiredinthatname,brandand/orappearancebyusingthem.
54
Contrarytothemonopolygrantedbysection19whichextendsacrossCanada,even
inareaswheretheregistranthasnouseofitstrade-mark,thesemonopolies–which
section7aimstoprotect–obviouslyimplyagoodwillorreputationassociatedwitha
particularnameormark.
AuthorR.S.Jolliffepointsoutthatsection7oftheTrade-MarksActwasenactedby
Parliamentinanattempttocodifyandexpanduponexistingcommonlawremedies
forunfaircompetition,includingpassingoff.
55Parliament’sauthoritytoadopttrade-
marklegislationwhichcodifiesapassingoffactionwasrecentlydiscussedbythe
SupremeCourtinKirkbiAGv.RitvikHoldingsInc.
56

6.3.1.1ConstitutionalIssues
Whilepatentsandcopyrightareexpresslywithintheexclusivelegislativeauthorityof
theParliamentofCanada,theConstitutionAct,1867issilentwithrespecttotrade-
marks.
57TheexclusivelegislativeauthorityoftheParliamentofCanadaalsoextends
totheregulationoftradeandcommerce.InCitizensInsuranceCo.ofCanadav.
Parsons,
58theJudicialCommitteeofthePrivyCouncildescribedtwobranchesof
federalpowerunderParliament’sexclusivejurisdictioninrelationtotradeand
commerce:(1)thepoweroverinternationalandinter-provincialtradeandcommerce,
and(2)thepowerovergeneraltradeincommerceaffectingCanadaasawhole
(“generaltradeandcommerce”).
59InKirkbiAGv.RitvikHoldingsInc.,60LeBelJ.
describedhowa1937decisionofthePrivyCouncilimplicitlyruledthatenacting
trade-marklegislationfellwithinParliament’stradeandcommercepowersunder
section91(2)oftheConstitutionAct,1867:
[18]Thefederalgovernment’spowertolegislatewithrespecttotrade-
markshasneverbeenthetargetofadirectconstitutionalchallenge.
TheissuewasraisedinthePrivyCouncilina1937decisionexamining
theconstitutionalityoffederaltrade-marklegislation.ThePrivyCouncil

53Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.54Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at134.55Jolliffe,R.Scott,“TheCommonLawDoctrineofPassingOff”inGordonF.Henderson,ed.,Trade-
MarksLawofCanada,Scarborough,Ont.:Carswell,1993at205.
56KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.57ConstitutionAct,1867,section91(22)and(23).58CitizensInsuranceCo.ofCanadav.Parsons(1881),7App.Cas.96.59KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.15.60KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.

11
judgmentrelies,albeitimplicitly,onthesecondbranchofthetradeand
commercepowersunders.91(2)toconfirmParliament’sjurisdictionto
enacttrade-marklegislation:Attorney-GeneralforOntariov.Attorney-
GeneralforCanada,[1937]A.C.405.LordAtkinforthePrivyCouncil
commentedasfollows(atp.417):
NoonehaschallengedthecompetenceoftheDominiontopasssuch
legislation.Ifchallengedoneobvioussourceofauthoritywouldappear
tobetheclassofsubjectsenumeratedins.91(2),theRegulationof
tradeandcommerce,referredtobytheChiefJustice.Therecould
hardlybeamoreappropriateformoftheexerciseofthispowerthanthe
creationandregulationofauniformlawoftrademarks.
SeealsoGoodHumorCorp.ofAmericav.GoodHumorFoodProducts
Ltd.,[1937]Ex.C.R.61,atpp.75-76.MorerecentlyinRoyalDoulton
TablewareLtd.v.Cassidy’sLtd.,[1986]1F.C.357,theFederalCourt,
TrialDivisionstatedinobiterthat“[t]hejurisdictionofParliamentwith
respecttotrademarkshaslongsincebeenrecognized….[I]tmay
wellbethatthejurisdictionofParliamentovertrademarks,depending
asitdoesonfederalauthorityover‘theregulationoftradeand
commerce’(seeAttorney-GeneralforOntariov.Attorney-Generalfor
Canada,supra)isintrinsicallybroaderthanisParliament’sjurisdiction
over‘patentsofinventionanddiscovery’”(pp.374-75).
[19]TheconstitutionalityofspecificprovisionsoftheTrade-marksAct
hasbeenchallengedbutthevalidityoftheActasawholehasnever
beenconclusivelydetermined.Thecourtshaveimplicitlyrecognized
thevalidityofthisfederallegislationinseveraldecisions:see,e.g.,
VaporCanada;CityNationalLeasing;AsbjornHorgardA/Sv.
Gibbs/NortacIndustriesLtd.(1986),8C.I.P.R.232(F.C.T.D.),rev’din
part[1987]3F.C.544(C.A.)…
61
Moreover,asfurthernotedbyLeBelJ.,aFederalTrade-marksAct
whichdealswithbothregisteredandunregisteredtrade-markswouldbe
avalidexerciseofParliament’sgeneraltradeandcommercepower:
[28]…ThepartiesdonotdisputeParliament’sconstitutionalpowerto
regulateregisteredtrade-marks.Rather,itisParliament’srightto
createacivilremedyinrelationtoanunregisteredtrade-markthatisin
issue.Therespondent’spositionisthattheonlyregulatoryschemein
theTrade-marksActistheschemegoverningregisteredtrade-marks.
InmyviewthisisanincorrectcharacterizationoftheAct.TheTrade-
marksActestablishesaregulatoryschemeforbothregisteredand
unregisteredtrade-marks.
[29]Theprotectionofunregisteredtrade-marksisintegraltothe
legitimacy,legalstandardsandefficacyofregisteredtrade-marks.The
Trade-marksActisclearlyconcernedwithtradeasawhole,asopposed

61KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atparas.18and19.

12
towithinaparticularindustry.Thereisnoquestionthattrade-marks
applyacrossandbetweenindustriesindifferentprovinces.Divided
provincialandfederaljurisdictioncouldmeanthattheprovinciallaw
couldbechangedbyeachprovinciallegislature.Thiscouldresultin
unregisteredtrade-marksthatweremorestronglyprotectedthan
registeredtrade-marks,underminingtheefficacyandintegrityofthe
federalParliament’sTrade-marksAct.Thelackofacivilremedy
integratedintotheschemeoftheAct,applicabletoallmarks,registered
orunregistered,mightalsoleadtoduplicativeorconflictingandhence
inefficientenforcementprocedures.
…
[31]Thereisnoreasontobelievethattheregistrationregimeunder
theTrade-marksActwasintendedtocreatetwoseparateenforcement
regimes.TheschemesetoutintheTrade-marksActregulatesboth
registeredandunregisteredtrade-marks.Itregulatestheadoption,use,
transfer,andenforcementofrightsinrespectofalltrade-marks.If
trade-marksareintendedtoprotectthegoodwillorreputation
associatedwithaparticularbusinessandtopreventconfusioninthe
marketplace,thenacomprehensiveschemedealingwithboth
registeredandunregisteredtrade-marksisnecessarytoensure
adequateprotection.Theinclusionofunregisteredtrade-marksinthe
regulatoryschemeisnecessarytoensuretheprotectionofalltrade-
marks.TheTrade-marksActismorethansimplyasystemof
registration.
62

6.3.1.2ConstitutionalValidityofSection7
Theconstitutionalvalidityofsection7oftheTrade-marksActhasbeenchallengedon
thebasisthatitcreatescausesofactionfallingwithinprovinciallegislative
competence.Forexample,inKirkbiAGv.RitvikHoldingsInc.,
63itwasallegedthat
section7(b)oftheTrade-marksActwasultraviresthelegislativecompetenceofthe
ParliamentofCanadabecauseitwasnotlinkedorconnectedinanywaytothetrade-
markregistrationschemeoftheAct.
64

FurthertothedecisionsoftheSupremeCourtofCanadainMacDonaldv.Vapor
CanadaLtd.
65andmorerecently,inKirkbiAGv.RitvikHoldingsInc.,66itcanbe
statedthatwhilesection7(e)isunconstitutional,sections7(a),(b),(c)and(d)are,in

62KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atparas.28,29and31.63KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.64KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.14.65MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.66KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.

13
fact,constitutionalinasmuchastheygiveeffecttovalidfederallegislativesubjects,
namelytrade-marks,patentsandcopyrights.67

6.3.1.2.1Section7(a)

InMacDonaldv.VaporCanadaLtd.,
68theSupremeCourtofCanadasuggestedthat
section7oftheAct(withtheexceptionofsection7(e))wasconstitutionallyvalid
inasmuchasitroundsouttheregulatoryschemesdescribedbyParliamentinthe
exerciseofitslegislativepowerinrelationtopatents,copyrights,trade-marksand
trade-names.Iflimitedinthisway,thesubparagraphsofsection7(excludingsection
7(e))wouldbesustainable.
69Theconstitutionalvalidityofsection7(a)–intheabove
circumstances–wasunderlinedinKirkbiAGv.RitvikHoldingsInc.,70whereLeBelJ.
restatedtheSupremeCourt’searlierobservationinMacDonaldv.VaporCanada
Ltd.
71thatsections7(a),(b)and(d)wererelatedtoorconnectedtotheenforcement
oftrade-marksanddidrelatetoandgiveeffecttovalidfederallegislativesubjects,
namelytrade-marks,patents,andcopyrights.
72InLeBelJ.’srestatement,however,
trade-nameswereleftunmentioned.Yet,inKirkbi,itwasalsostatedelsewherethat
section7(b)wasitselfdirectlyconnectedtotheenforcementoftrade-marksand
trade-namesinCanada.
73

6.3.1.2.2Section7(b)

InKirkbiAGv.RitvikHoldingsInc.,
74theSupremeCourtaffirmedtheconstitutional
validityofsection7(b).Inrulingthatsection7(b)waswithinthelegislative
competenceoftheParliamentofCanadaundersection91(2)oftheConstitutionAct,
1867,theSupremeCourtrestatedthethreeparttesttodetermineiftheimpugned
legislationwaswithinParliament’sconstitutionalauthority:
(1)Doestheimpugnedprovisionintrudeintoaprovincialheadofpower,
andtowhatextent?
(2)Iftheimpugnedprovisionintrudesintoaprovincialheadofpower,isit
neverthelesspartofavalidfederallegislativescheme?
(3)Iftheimpugnedprovisionispartofavalidfederalscheme,isit
sufficientlyintegratedwiththatscheme?
75

67KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.34;seealsosection3.1.2.3below68MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.69MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at172.70KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.15.71MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at157.72KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.34.73KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.35.74KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.75KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.21.

Whilesection7(b)wasseenasencroachingonpropertyandcivilrights,whichcome
underprovincialjurisdiction,theintrusionwasseenasminimal.Onthesecondpartof
thetest,theCourtconcludedthattheprotectionofunregisteredtrade-marksinthe
regulatoryschemewasnecessarytoensuretheprotectionofalltrade-markssince
theTrade-marksActismorethansimplyasystemofregistration.Finally,onthethird
partofthetest,theCourtconcludedthatsection7(b)issufficientlyintegratedintothe
federalschemeandisthereforeconstitutionallyvalid.Tothateffect,LeBelJ.noted
thatsection7(b)providesaremedywhichconstitutesanessentialpartinthe
legislativeprotectionoftrade-marks:[33]Asoutlinedabove,s.7(b)oftheActonlyminimallyintrudesinto
provincialjurisdictionoverpropertyandcivilrights.Itisaremedial
provisionlimitedtotrade-marksasdefinedintheAct(ss.2and6).As
thisCourtobservedinVaporCanadaandtheFederalCourtofAppeal
heldinAsbjornHogardA/S,s.7(b)“roundsout”thefederaltrade-marks
scheme.Inthisregards.7(b)is,initspithandsubstance,directly
connectedtotheenforcementoftrade-marksandtrade-namesin
Canadabecauseitisdirectedtoavoidingconfusionthroughuseof
trade-marks.
…
[35]Therespondentsubmitsthatthecivilactionins.7(b)hasno
functionalconnectiontotheregisteredtrade-markschemeintheTrade-
marksAct.HavingconcludedthattheActcreatesaschemeregulating
bothregisteredandunregisteredtrade-marks,thefunctionalrelationof
s.7(b)totheschemeintheTrade-marksActisapparent.Initspithand
substance,s.7(b)isdirectlyconnectedtotheenforcementoftrade-
marksandtrade-namesinCanada:thecivilremedyins.7(b)protects
thegoodwillassociatedwithtrade-marksandisdirectedtoavoiding
consumerconfusionthroughuseoftrade-marks.AsGillandJolliffe
note:“Noprovisionofs.7ismoreinextricablylinkedtotheoverall
schemeoftheTrade-marksActthaniss.7(b)”(p.222).
[36]Unlikebreachofconfidenceandappropriationofconfidential
information(s.7(e)),thepassing-offactionplaysaclearroleinthe
federalscheme.Withoutthisprovisiontherewouldbeagapinthe
legislativeprotectionoftrade-marks.Thiswouldcreateinconsistencies
intheprotectionofregisteredandunregisteredtrade-marksandleadto
uncertainty.Section7(b)issufficientlyintegratedintothefederal
schemeand,inthisrespect,issignificantlydifferentfroms.7(e).I
concludethats.7(b)lieswithinthefederalgovernment’slegislative
competence…
76

76KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atparas.33,35,36.

15
6.3.1.2.3Section7(c)

InMacDonaldv.VaporCanadaLtd.
77theSupremeCourtofCanadasuggestedthat
section7oftheAct(withtheexceptionofsection7(e))wasconstitutionallyvalid
inasmuchasitroundsouttheregulatoryschemesdescribedbyParliamentinthe
exerciseofitslegislativepowerinrelationtopatents,copyrights,trade-marksand
trade-names.Iflimitedinthisway,thesubparagraphsofsection7(excludingsection
7(e))wouldbesustainable.
78Althoughanyreferencetotheconstitutionalvalidityof
section7(c)–intheabovecircumstances–wasomittedbyLeBelJ.inKirkbiAGv.
RitvikHoldingsInc.
79whenherestatedtheSupremeCourt’searlierobservationin
MacDonaldv.VaporCanadaLtd.80–thatsections7(a),(b)and(d)wererelatedtoor
connectedtotheenforcementoftrade-marksanddidrelatetoandgiveeffecttovalid
federallegislativesubjects,namelytrade-marks,patentsandcopyrights–hedid
mentionthatsection7(c)explicitlytargetspassingoff
81(albeitaparticularkindof
passingoffi.e.substitutingwaresorservicesforthoseorderedorrequested),thereby
suggestingthatsection7(c)wasalsoconstitutionallyvalid,withintheabovelimits.
Moreover,inMacDonaldv.VaporCanadaLtd.,
82LaskinC.J.stronglysuggestedthat
sections7(a)through7(d)(whichwouldobviouslyincludesection7(c))gaveeffectto
headsoflegislativepowerinrelationtopatents,copyrights,trade-marksandtrade-
names
83andwerethussustainabletothatextent.Finally,itistobenotedthatthe
constitutionalityofsection7(c)wasaffirmed–again,insofarasitroundsoutthe
trade-markschemeoftheAct–byMacGuiganJ.inAsbjornHorgardA/Sv.
Gibbs/NortacIndustriesLtd.
84

6.3.1.2.4Section7(d)

InMacDonaldv.VaporCanadaLtd.,
85theSupremeCourtofCanadasuggestedthat
section7oftheAct(withtheexceptionofsection7(e))wasconstitutionallyvalid
inasmuchasitroundsouttheregulatoryschemesdescribedbyParliamentinthe
exerciseofitslegislativepowerinrelationtopatents,copyrights,trade-marksand
trade-names.Iflimitedinthisway,thesubparagraphsofsection7(excludingsection
7(e))wouldbesustainable.
86Theconstitutionalvalidityofsection7(d)–intheabove

77MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.78MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at172.79KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.80MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at157.81KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.62.82MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.83MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at172.84AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314at324(F.C.A.);see
alsoDumontVins&SpiritueuxInc.v.CelliersduMondeInc.,[1992]2F.C.634at650(F.C.A.).
85MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.86MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at172.

16
circumstances–wasunderlinedinKirkbiAGv.RitvikHoldingsInc.,87whereLeBelJ.
restatedtheSupremeCourt’searlierobservationinMacDonaldv.VaporCanada
Ltd.
88thatsections7(a),(b)and(d)wererelatedtoorconnectedtotheenforcement
oftrade-marksanddidrelatetoandgiveeffecttovalidfederallegislativesubjects,
namelytrade-marks,patents,andcopyrights.
89InLeBelJ.’srestatement,however,
trade-nameswereleftunmentioned.Yet,inKirkbi,itwasalsostatedelsewherethat
section7(b)wasitselfdirectlyconnectedtotheenforcementoftrade-marksand
trade-namesinCanada.
90

6.3.1.2.5Section7(e)

InMacDonaldv.VaporCanadaLtd.,
91section7(e)wasfoundunconstitutionalbythe
SupremeCourtofCanadaasitcreatesacivilcauseofactionfallingwithinprovincial
legislativecompetence.LaskinC.J.emphasizedthepoint:
Overall,whethers.7(e)betakenaloneor,moreproperly,aspartofa
limitedschemereflectedbys.7asawhole,thenetresultisthatthe
ParliamentofCanadahas,bystatute,eitheroverlaidorextended
knowncivilcausesofaction,cognizableintheprovincialcourtsand
reflectingissuesfallingwithinprovinciallegislativecompetence.Inthe
absenceofanyregulatoryadministrationtooverseetheprescriptionsof
s.7(andwithoutcomingtoanyconclusiononwhethersuchan
administrationwouldinitselfbeeithersufficientornecessarytoeffecta
changeinconstitutionalresult),Icannotfindanybasisinfederalpower
tosustaintheunqualifiedvalidityofs.7asawholeors.7(e)taken
alone.Itisnotasufficientpegonwhichtosupportthelegislationthatit
appliesthroughoutCanadawhenthereisnothingmoretogiveit
validity.
92
…
Theplainfactisthats.7(e)isnotaregulation,norisitconcernedwith
tradeasawholenorwithgeneraltradeandcommerce.Inaloose
senseeverylegalprescriptionisregulatory,eventheprescriptionsof
theCriminalCode,butIdonotreads.91(2)asinitselfauthorizing
federallegislationthatmerelycreatesastatutorytort,enforceableby
privateaction,andapplicable,ashere,totheentirerangeofbusiness
relationshipsinanyactivity,whethertheactivitybeitselfwithinor
beyondfederallegislativeauthority.
93

87KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.88MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at157.89KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.34.90KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.35.91MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134.92MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at156.93MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at164.

17
…
Onelooksinvainforanyregulatoryschemeins.7,letalones.7(e).Its
enforcementislefttothechanceofprivateredresswithoutpublic
monitoringbythecontinuingoversightofaregulatoryagencywhich
wouldatleastlendsomecolourtotheallegednationalorCanada-wide
sweepofs.7(e).Theprovisionisnotdirectedtotradebuttotheethical
conductofpersonsengagedintradeorinbusiness,and,inmyview,
suchadetachedprovisioncannotsurvivealoneunconnectedtoa
generalregulatoryschemetogoverntradingrelationsgoingbeyond
merelylocalconcern.Evenonthefootingofbeingconcernedwith
practicesintheconductoftrade,itsprivateenforcementbycivilaction
givesitalocalcastbecauseitisasapplicableinitstermtolocalor
intraprovincialcompetitorsasitistocompetitorsininterprovincial
trade.
94

6.3.1.3Forumforsection7claims
TheFederalCourt–acreatureofstatute–hasnojurisdictionapartfromwhatis
expresslyconferredonitbyParliament;thatjurisdictioncanonlybegiventoitin
respectofanexistingbodyoffederallawwhichisessentialtothedispositionofthe
case.
95Forthisreason,theFederalCourtdoesnothavejurisdictiontoheara
commonlawactionofpassingoff.AnyjurisdictiontheFederalCourtcanhaveonthe
issueofpassingoffmustbebasedundersection7oftheActanda“trade-mark
scheme”mustbepleadedthereunderandestablishedbyevidence.
96

Provincialcourtsmayalsohearclaimsbasedonsection7oftheAct
97and,of
course,actionsbasedoncommonlawpassingoff98.Thefactthatprovincialcourts
(asopposedtotheFederalCourt)mayalsohearclaimsbasedonsection7doesnot
changethescopeofsuchclaimsassection7isconstitutionallyvalidinasmuchasit
roundsouttheregulatoryschemesdescribedbyParliamentintheexerciseofits
legislativepowerinrelationtopatents,copyrights,trade-marksandtrade-names.
99
Thelimitsintheapplicationofsection7whichrenderitconstitutional,asdiscussed

94MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at165.95DumontVins&SpiritueuxInc.v.CelliersduMondeInc.,[1992]2F.C.634at649(F.C.A.);see
section55oftheTrade-marksAct,R.S.C.1985,c.T-13.
96TopNotchConstructionLtd.v.Top-NotchOilfieldServicesLtd.(2001),13C.P.R.(4th)515atpara.
31(F.C.T.D.).
979055-6473QuébecInc.v.MontréalAutoPrixInc.,2006QCCA627(Q.C.A.)atpara.21;Dumont
Vins&SpiritueuxInc.v.CelliersduMondeInc.,[1992]2F.C.634at649(F.C.A.);seesection20of
theFederalCourtsAct,R.S.C.1985,c.F-7wheretheFederalCourt’sconcurrrentjurisdictionis
outlinedins.20(2);seealsosections52and53.2oftheTrade-marksAct,R.S.C.1985,c.T-13.
98TheRegisteredPublicAccountantsAssociationofAlbertav.TheSocietyofProfessional
AccountantsofCanada,[2000]F.C.J.No.1123atpara.7(F.C.T.D.).
99MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at172.

18
above,donotchangeforclaimsheardinprovincialcourtssincelegislation(suchas
section7)soughttobeenforcedinprovincialcourtsmust,ofcourse,belegislation
whichitwascompetentforParliamenttopass.
100Accordingly,whetheritbebefore
theFederalCourtorprovincialcourts,neithercouldhearaclaimbasedonsection7
oftheActforanyallegedviolationwhichcouldnotbetracedbacktothe
enforcementsoftheregulatoryschemesprescribedbyParliamentintheexerciseof
itslegislativepower,asdescribedabove;thiswasrecognizedbySextonJ.inKirkbi
AGv.RitvikHoldingsInc.
101whenhewrotethatwhatdistinguishesthecommonlaw
actionofpassingofffromapassingoffactionundersection7(b)isthatinthe
commonlawaction,alitigantneednotrelyonatrade-marktomakeuseoftheaction
whiletobringapassingoffactionundertheAct,onemusthaveavalidtrade-mark
withinthemeaningoftheAct.
102Thissuggeststhatclaimsbasedonpassingoffat
commonlawandsection7respectivelyarenotentirelyidenticalinscope,apointthat
willbefurtherdeveloped.
6.3.2ConditionsfortheapplicationofSection7
Section7isthesuccessorofsection11oftheUnfairCompetitionAct,1932.
103Itis
anexpandedversionofitsantecedentprovision.104Section7outlinesacodeof
conductforfaircompetitionwherecertainspecificactsareprohibited.Anactionwill
thereforelieshouldthecodeofconductbebreached.
105

AspartytotheConventionoftheUnionofParismadeonMarch20,1883
(establishedbytheParisConventionfortheProtectionofIndustrialProperty)andany
amendmentsandrevisionsthereoftowhichitisparty,Canadahasanobligationto
protectnationalsofthecountriesoftheUnionfromactsofunfaircompetition.
106In
ordertosatisfyitsobligationsundertheConvention,theTrade-marksActdetailsin
section7anexpandedlistofprohibitedacts,someofwhichwerebasedonsection
11ofthepriorUnfairCompetitionAct,1932.Section11oftheUnfairCompetitionAct,
1932wasbaseduponarticle10bis.oftheInternationalConventionfortheProtection
ofIndustrialProperty,asrevisedattheHagueonNovember6,1925.
107

Inconjunctionwithsection53.2,section7oftheTrade-marksActprovidesastatutory

100MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at140.101KirkbiAGv.RitvikHoldingsInc.,[2004]2F.C.R.241(F.C.A.).102KirkbiAGv.RitvikHoldingsInc.,[2004]2F.C.R.241atpara.38(F.C.A.).103UnfairCompetitionAct,1932,22-23GeorgeV,c.38.104MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at142.105H.G.Richardetal.,CanadianTrade-marksActAnnotated,loose-leaf,Toronto:ThomsonCarswell,
at7-2.
106H.G.Richardetal.,CanadianTrade-marksActAnnotated,loose-leaf,Toronto:ThomsonCarswell,
at7-2.
107S.&S.IndustriesInc.v.Rowell,[1966]S.C.R.419at425.

19
basisforreliefagainsttheunfairtradepracticesdescribedtherein.

TheSupremeCourtofCanadahashadtheopportunitytodescribethevarious
prohibitedactsofsection7’scodeofconduct.
6.3.2.1Section7(a)

InMcDonaldv.VaporCanadaLtd.,
108LaskinC.J.indicatedthefollowingconcerning
section7(a):
…s.7(a)istheequivalentofthetortofslanderoftitleorinjurious
falsehood,albeittheelementofmalice,betterdescribedasintentto
injurewithoutcauseorexcuse,isnotincludedasitisinthecommon
lawaction:seeFlemingonTorts(4thed.1971),atp.623.Section7(b)
isastatutorystatementofthecommonlawactionofpassingoff,which
isdescribedinFlemingonTorts,supra,atp.626as“anotherformof
misrepresentationconcerningtheplaintiff’sbusiness…whichdiffers
frominjuriousfalsehoodinprejudicingtheplaintiff’sgoodwillnotby
deprecatoryremarksbutquitetothecontrarybytakingafreerideonit
inpretendingthatone’sowngoodsorservicesaretheplaintiff’sor
associatedwithorsponsoredbyhim”.Itdiffersfrominjuriousfalsehood
inthat“itissufficientthattheoffensivepracticewascalculatedorlikely,
ratherthanintended,todeceive”.
109

IntheearliercaseofS.&S.IndustriesInc.v.Rowell,
110wherelegalwarningswere
madebyadefendanttoprotectitspatent–thatwassubsequentlydeclaredinvalid–
tocustomersoftheplaintiffwho,asaresult,sufferedseriouslossesinhistrade,
MartlandJ.offeredthefollowingcharacterizationofsection7(a)andindicatedthat
malicewasnotarelevantconsiderationinitsapplication(exceptontheissueof
damages):Thecombinedeffectofss.7(a)and52oftheTradeMarksActisto
createastatutorycauseofactionforwhichdamagesmaybeawardedif
apersonisdamagedbyfalseormisleadingstatementsbyacompetitor
tendingtodiscredittheclaimant’sbusiness,waresorservices.The
essentialelementsofsuchanactionare:1.Afalseormisleadingstatement;
2.Tendingtodiscreditthebusiness,waresorservicesofa
competitor;and
3.Resultingdamage.
111
…

108MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147.109MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147.110S.&S.IndustriesInc.v.Rowell,[1966]S.C.R.419.111S.&S.IndustriesInc.v.Rowell,[1966]S.C.R.419at424.

20
Inmyopinion,thenaturalmeaningofs.7(a)istogiveacauseofaction,
inthespecifiedcircumstances,inrespectofstatementswhichare,in
fact,falseandthepresenceorabsenceofmalicewouldonlyhave
relevanceinrelationtotheassessmentofdamages.
112

Furthermore,inRielloCanada,Inc.v.Lambert,
113StrayerJ.heldthatsection7(a)of
theTrade-marksActprecludesaregisteredpatenteefrommakinguntruestatements
astothescopeofhispatenttothedetrimentofothers;inotherwords,theprovision
seekstopreventtheabuseofrightsconferredbyfederallaw.
114Finally,section7(a)
cannotbereadasgenerallyprohibitingthemakingoffalseormisleadingstatements
tendingtodiscreditthebusiness,waresorservicesofacompetitorbutonlyas
prohibitingthemakingofsuchfalseandmisleadingstatementsinassociationwitha
trade-markorotherintellectualproperty.
115

Inordertobeactionableundersection7(a),thestatementsmustbedirectedto
personsinCanada.
116Furthermore,intheabsenceofanyproofthatthestatements
causedharm,theclaimundersection7(a)willbedismissed.117

InTheCanadianCopyrightLicensingAgencyv.TheBusinessDepotLtd.,
118de
Montigny,J.upheldaprothonotary’sdecisiontostrikeoutacounterclaimgroundedin
section7(a).Thecounterclaimwasadvancedagainstaplaintiffwhoclaimed
copyrightinfringementandwhoissuedapressreleasedescribingtheactionandthe
defendant’sactivities.Thedefendant’srealcomplaintwasthecontentoftheplaintiff’s
commentsmadeaboutthedefendant’sactivitiesinthepressrelease.Sincethe
counterclaimdidnotpleadthatthepartieswerecompetitors(theplaintiffisanot-for-
profitagencywhichpossessesandenforcesexclusivecopyrightsonbehalfofits
membersandthedefendantisasellerofbusinesssuppliesandaproviderofcopying
services),thecounterclaimhadnochanceofsuccess.Inaddition,sincethepress
releasedidnotimpugnthedefendant’sintellectualpropertyoramounttoathreatto
suethirdpersonswhomightdealwiththedefendantinrespecttotheallegedly
infringingcopiesmadeatthedefendant’spremises,thenecessaryconnection
betweentheimpugnedstatementsandintellectualpropertywasabsent.Hence,the
section7(a)claimhadnochanceofsuccess.

6.3.2.2Section7(b)

112S.&S.IndustriesInc.v.Rowell,[1966]S.C.R.419at425.113RielloCanada,Inc.v.Lambert(1986),9C.P.R.(3d)324(F.C.T.D.).114RielloCanada,Inc.v.Lambert(1986),9C.P.R.(3d)324at340(F.C.T.D.).115MattelCanadaInc.v.GTSAcquisitionsLtd.(1989),28C.P.R.(3d)534at536(F.C.T.D.).116M.K.PlasticsCorporationv.PlasticairInc.,2007FC574117M.K.PlasticsCorporationv.PlasticairInc.,2007FC574118TheCanadianCopyrightLicensingAgencyv.TheBusinessDepotLtd.2008FC737

21
InMacDonaldv.VaporCanadaLtd.,119LaskinC.J.describedsection7(b)inthe
followingfashion:Section7(b)isastatutorystatementofthecommonlawactionof
passingoff,whichisdescribedinFlemingonTorts,supra,atp.626as
“anotherformofmisrepresentationconcerningtheplaintiff’sbusiness…
whichdiffersfrominjuriousfalsehoodinprejudicingtheplaintiff’s
goodwillnotbydeprecatoryremarksbutquitetothecontrarybytakinga
freerideonitinpretendingthatone’sowngoodsorservicesarethe
plaintiff’sorassociatedwithorsponsoredbyhim”.Itdiffersfrom
injuriousfalsehoodinthat“itissufficientthattheoffensivepracticewas
calculatedorlikely,ratherthanintended,todeceive”.
120

InKirkbiAGv.RitvikHoldingsInc.,
121LeBelJ.characterizedsection7(b)inthe
followingfashion:Section7(b)createsacivilcauseofactionthatessentiallycodifiesthe
commonlawtortofpassingoff:VaporCanada,atp.147;Asbjorn
HorgardA/S(F.C.T.D.),atp.241.
122

Foritspart,inWestfairFoodsLtd.v.JimPattisonIndustriesLtd.,
123theBritish
ColumbiaCourtofAppealwrotethefollowing:Whicheverstandardoneapplies–thecommonlaworstatutory
provision–thegistoftheactionof«passing-off»isthatthedefendant
isattemptingtosellitswares,servicesorbusinessunderadescription
whichwouldmisleadcustomersoftheplaintiffintothinkingthatthey
werebuyingtheplaintiff’swaresordoingbusinesswiththeplaintiff.
124

Ifitcodifiesthecommonlawtortofpassing,doessection7(b)mirrorentirelyits
conditionsofapplication?TheSupremeCourtofCanadaoutlinedthreeconditionsin
ordertosucceedinacommonlawactionforpassingoff.Themostrecentdescription
oftheserequirementswasgivenbyLeBelJ.inKirkbiAGv.RitvikHoldingsInc.
125
whoreferredtoearliercommentsbyGonthierJ.inCiba-GeigyCanadaLtd.v.Apotex
Inc.
126:
[66]OurCourtappearstohaveadoptedthetripartiteclassificationin
Ciba-Geigy.Inthatcase,ourCourtallowedapassing-offactionin
respectoftheget-upofaprescriptiondrug.GonthierJ.reviewedsome
oftheearlierjurisprudenceandstatedthatclaimantshadtoestablish

119MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147.120MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147.121KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.23.122KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.23.123WestfairFoodsLtd.v.JimPattisonIndustriesLtd.(1990),30C.P.R.(3d)174(B.C.C.A.).124WestfairFoodsLtd.v.JimPattisonIndustriesLtd.(1990),30C.P.R.(3d)174at179(B.C.C.A.).125KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.23.126Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.

22
threeelementsinordertosucceedinapassing-offaction:
Thethreenecessarycomponentsofapassing-offactionarethus:the
existenceofgoodwill,deceptionofthepublicduetoamisrepresentation
andactualorpotentialdamagetotheplaintiff.[p.132]
[67]Thefirstcomponentisgoodwillorreputation.Theclaimantmust
establishgoodwillinrespectofthedistinctivenessoftheproduct(Ciba-
Geigy,atpp.132-33;OxfordPendaflexCanadaLtd.v.KorrMarketing
Ltd.,[1982]1S.C.R.494,atpp.504and507,perEsteyJ.).Evidence
ofgoodwillsolelyattachedtothetechniquesandprocesseswhich
createtheproductwillnotdo.Thedoctrineofpassingoffdidnot
developtoprotectmonopoliesinrespectofproductsbutofguises,get-
ups,namesandsymbolswhichidentifythedistinctivenessofasource.
[68]Thesecondcomponentismisrepresentationcreatingconfusionin
thepublic.Misrepresentationmaybewilfulandmaythusmeanthe
samethingasdeceit.Butnowthedoctrineofpassingoffalsocovers
negligentorcarelessmisrepresentationbythetrader(Ciba-Geigy,atp.
133;ConsumersDistributingCo.v.SeikoTimeCanadaLtd.,[1984]1
S.C.R.583,atp.601,perEsteyJ.).Inthisrespect,thetrialjudge’s
interpretationofthiscomponentwastoonarrowandnotconsistentwith
thejurisprudenceofourCourtorthemoderndevelopmentsofthelawof
passingoff…
127

InKirkbiAG,LeBelJ.restatedwithoutfurthercommentthethirdconditionmentioned
byGonthierJ.inCiba-Geigy,i.e.actualorpotentialdamagetotheplaintiff.Thus,a
plaintiffneednotwaitforeconomiclossesbeforeitcaninitiateitsactionforpassing
andstopconfusionthatwilleventuallyaffectitfinancially.
128

Onthefirstcondition,i.e.theexistenceofgoodwill,BinnieJ.wroteinVeuveClicquot
Ponsardinv.BoutiquesCliquotLtée
129thatgoodwillconnotesthepositiveassociation
thatattractscustomerstowardsanowner’swaresorservicesratherthanthoseofits
competitors.
130

InCiba-Geigy,GonthierJ.alsostated,onthefirstpartofthetest,thatinanypassing
offaction,theplaintiff,inordertosucceed,mustestablishthatitsproducthas
acquiredasecondarymeaning.
131

InMattel,Inc.v.3894207CanadaInc.,
132BinnieJ.confirmedthesecondandthird

127KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atparas.66,67and68.1289055-6473QuébecInc.v.MontréalAutoPrixInc.,2006QCCA627(Q.C.A.)atpara.44.129VeuveClicquotPonsardinv.BoutiquesCliquotLtée,[2006]1S.C.R.824.130VeuveClicquotPonsardinv.BoutiquesCliquotLtée,[2006]1S.C.R.824atparas.50and52.131Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at132and133.132Mattel,Inc.v.3894207CanadaInc.,[2006]1S.C.R.772;seealsoYvonDroletv.Stiftung
GralsbotchafgtetFoundationduMouvementduGraalCanada2009CF17wheretheFederalCourt

23
partsofthetestnamelythatinanactionforpassingoff,itisnecessaryfortheplaintiff
toshowthatthedefendantintentionallyornegligentlymisledconsumersinto
believingitsbusinessoriginatedwiththeplaintiffandthatthelattertherebysuffered
damage.
133

ThesethreeconditionsinitiallyoutlinedinCiba-Geigyarethosereferredtogenerally
bytheCourtswhenapplyingsection7(b).Forexample,inVeuveClicquotPonsardin
v.BoutiquesCliquotLtée,
134Tremblay-LamerJ.referredtoCiba-Geigytoreviewthe
conditionsofapplicationofsection7(b):
[82]Paragraph7(b)isastatutorystatementofthetortofpassing-off.
Thisisaformofmisrepresentationbywhichabusinessmanprofitsfrom
someoneelse’sgoodwillgratuitouslybypretendingthathisproducts,
servicesorbusinessarethoseoftheotherperson(MacDonaldv.Vapor
CanadaLtd.,[1977]2S.C.R.134).
[83]Inordertosucceedinanactionforpassing-off,aplaintiffmust
establishthreepoints:theexistenceofgoodwill,thedeceptive
representationwhichhasmisledthepublicandactualorpotential
damagetotheplaintiff(Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3
S.C.R.120).
135

However,jurisprudencealsoprovidesafewnuancesonthisissue.Asmentioned
earlier,forconstitutionalreasons,a“trade-markscheme”mustbearguedifsection
7(b)istobeapplied.Ofcourse,trade-markscomeinvariousforms:Somearemade
upofwordsonly;othersincludedesignfeatures.However,inallcases,eachis“a
symbolofaconnectionbetweenasourceofaproductandtheproductitself”
136as
LeBelJ.wroteinKirkbiAGv.RitvikHoldingsInc.137Therefore,itisonlywhenit
cannotrelyonanytrade-markthataplaintiffmustresorttothecommonlawactionof
passingoffinlieuofaclaimundersection7(b);thisiswhatSextonJ.hadinmind
whenhewrotethatwhatdistinguishesthecommonlawactionofpassingofffromthe
statutoryactionundersection7(b)isthatinthecommonlawaction,alitigantneed
notrelyonatrade-marktomakeuseoftheaction.
138Ofcourse,onemayconsiderin
whatlimitedcircumstancesthismightoccursincetheSupremeCourtofCanada
indicatedthatthedoctrineofpassingoffdevelopedtoprotectguises,get-ups,names

dismissedthesection7(b)claimbecausethesecondpartofthetesthadnotbeenmet.133Mattel,Inc.v.3894207CanadaInc.,[2006]1S.C.R.772atpara.27.134VeuveClicquotPonsardinv.BoutiquesCliquotLtée(2003),28C.P.R.(4th)520(F.C.T.D.)
(affirmedbyVeuveClicquotPonsardinv.BoutiquesCliquotLtée(2004),35C.P.R.(4th)1(F.C.A.);
affirmedbyVeuveClicquotPonsardinv.BoutiquesCliquotLtée,[2006]1S.C.R.824).
135VeuveClicquotPonsardinv.BoutiquesCliquotLtée(2003),28C.P.R.(4th)520atparas.82and
83(F.C.T.D.).
136KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.39.137KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302.138KirkbiAGv.RitvikHoldingsInc.,[2004]2F.C.R.241atpara.38(F.C.A.).

24
andsymbolswhichidentifythedistinctivenessofasource,139whichcanbedescribed
as“trade-marks”,inthebroadestsense.Toemphasizehowdistinctiveindiciacanbe
viewedasa“trade-mark”,referencecanbemadetotheU.S.caseofDallasCowboys
Cheerleaders,Inc.v.PussycatCinema,Ltd.,
140referredtobyBinnieJ.inVeuve
ClicquotPonsardinv.BoutiquesCliquotLtée,141wheretheU.S.CourtofAppealsfor
theSecondCircuitfoundthattheplaintiffhadatrade-markinthearbitrarydesignof
itsuniform.
Toillustrateacommonlawactionofpassingoffthatcouldnotbeinitiatedunder
section7(b),onemaysuggestthescenarioofaplaintiffpleadingthatadefendanthas
directedpublicattentiontoitsadvertisingservicesandtoitsdirectoriesinsuchaway
astocauseortobelikelytocauseconfusioninCanadabetweentheparties’
respectiveadvertisingservices,withoutalleginganyspecifictrade-markindicia(inthe
broadestsense).SuchwasthescenarioexaminedbyGibsonJ.inItal-PressLtd.v.
Sicoli,
142wheretheCourtconfirmedthelackofjurisdictionoftheFederalCourtwith
respecttothecommonlawactionofpassingoff;additionally,itemphasizedthat
section7canonlybeinvokedwherea“trade-markscheme”ispleadedand
establishedbyevidence.Thefollowingcircumstancesraisedbytheplaintiffdidnot
meetthelattercriteria:[149]IntheAmendedStatementofClaimfiledthe4
thofFebruary,
1998,theplaintiffallegesthatitenjoysgoodwillinthegeographicalarea
ofAlbertaandenjoysareputationasaproviderofgoodquality
telephonedirectoriescontaininginformationrelevanttothegeographical
areaofAlberta.Theplaintifffurtherpleadsthatthedefendantsdirectly
andthroughtheiragents,haveactivelymisledpotentialadvertisersto
believethattheywerepurchasingadvertisingspaceintheGuidaand
notintheDirectoriesandthatthedefendantswerethelicenseesor
successorsoftheplaintiff.Theplaintiffpleadsthattheactsandconduct
ofthedefendantswereatallmaterialtimescalculatedtodeceiveand
misleadandthattheyhaveinfactdeceivedandmisledthetradeand
generalpublic.Further,theplaintiffpleadsthatthedefendantshave
directedpublicattentiontotheiradvertisingservicesandtotheir
directoriesinsuchawayastocauseortobelikelytocauseconfusion
inCanadabetweentheiradvertisingservicesandtheadvertising
servicesoftheplaintiff.Intheresult,theplaintiffpleadsthatthe
defendantshavepassedofftheirDirectoriesandtheiradvertising
servicesasandfortheGuidasandtheadvertisingservicesofthe
plaintiff.Thus,theissueofpassing-offisraised.
…

139KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.67.140DallasCowboysCheerleaders,Inc.v.PussycatCinema,Ltd.,604F.2d200(2dCir.1979).141VeuveClicquotPonsardinv.BoutiquesCliquotLtée,[2006]1S.C.R.824atpara.66.142Ital-PressLtd.v.Sicoli(1999),86C.P.R.(3d)129(F.C.T.D.).

25
[155]Fromtheforegoing,Iconcludethatsection7oftheTrade-
marksActcanonlybeinvokedwherea”trademarksscheme”is
pleadedandestablishedbyevidence.Onthematerialandevidence
beforeme,no”trademarksscheme”iseitherpleadedorestablishedin
evidence.
143

AnothernuancecanbefoundinthewordsofMacGuiganJ.inAsbjornHorgardA/Sv.
Gibbs/NortacIndustriesLtd.,
144whodidmentionthatsection7(b)wasastatutory
statementofthecommonlawofpassingoff,145butaddedthatsection7(b)had3
elementswhichdonotentirelymirrortherequirementsofthecommonlawactionof
passingoffwhichweresubsequentlydescribedbytheSupremeCourtinCiba-Geigy
CanadaLtd.v.ApotexInc.:
146
Subsection7(b)has3elements.Itprovidesthatnopersonshall(1)
directpublicattentiontohiswares,servicesorbusiness(2)insucha
wayastocauseorbelikelytocauseconfusioninCanada(3)atthe
timehecommencedsotodirectattentiontothem,betweenhiswares,
servicesorbusinessandthewares,servicesorbusinessofanother.
Whatisdeemedtocauseconfusionisexplainedins.6,particularlyins-
ss.(2),(3)and(5),whichareasfollows:
6(2)Theuseofatrademarkcausesconfusionwithanothertrademark
iftheuseofbothtrademarksinthesameareawouldbelikelytoleadto
theinferencethatthewaresorservicesassociatedwithsuchtrade
marksaremanufactured,sold,leased,hiredorperformedbythesame
person,whetherornotsuchwaresorservicesareofthesamegeneral
class.
(3)Theuseofatrademarkcausesconfusionwithatradenameifthe
useofboththetrademarkandtradenameinthesameareawouldbe
likelytoleadtotheinferencethatthewaresorservicesassociatedwith
thetrademarkandthoseassociatedwiththebusinesscarriedonunder
suchtradenamearemanufactured,sold,leased,hiredorperformedby
thesameperson,whetherornotsuchwaresorservicesareofthe
samegeneralclass.
…(5)Indeterminingwhethertrademarksortradenamesareconfusing,
thecourtortheRegistrar,asthecasemaybe,shallhaveregardtoall
thesurroundingcircumstancesincluding:(a)theinherentdistinctivenessofthetrademarksortrade
namesandtheextenttowhichtheyhavebecomeknown;
(b)thelengthoftimethetrademarksortradenameshave

143Ital-PressLtd.v.Sicoli(1999),86C.P.R.(3d)129atparas.149and155(F.C.T.D.).144AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314.145AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314at327.146Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.

26
beeninuse;
(c)thenatureofthewares,servicesorbusiness;
(d)thenatureofthetrade;and
(e)thedegreeofresemblancebetweenthetrademarksor
tradenamesinappearanceorsoundorintheideassuggested
bythem.
147

MacGuiganJ.highlightedtheconnectionbetweentheconceptof“confusion”
mentionedinsubsection7(b)andthecriteriatomeasureconfusionbetweentrade-
marksandtradenamesinsection6.Althoughtrade-marksarenotmentionedin
section7(b)butsincetheprovisionisonlyconstitutionallyvalidinasmuchasatrade-
markschemeisargued,itwouldthenappearlogical,whenapplyingsection7(b),to
refertosection6whichoutlineswhenconfusioniscreatedbetweentrade-marks.

AcontrarypositionwasadoptedbyGibbsJ.inWestfairFoodsLtd.v.JimPattison
IndustriesLtd.
148whoindicatedthatbecausesection7(b)doesnotmakeany
referencetothenotionof“trade-marks”,thereisnoconnectionbetweensection6
andsection7andtherefore,themeritofaplaintiff’scasemustbeassessedonthe
wordingofsection7(b)alone.
149

Ofcourse,theconceptofconfusionrelatingtosourcedescribedinsection6would
notappeartoberadicallydifferentfromthe“confusion”testforthepassingoffaction
atcommonlawsincetheintenttodeceiveisnolongerarequirementthereunderas
GonthierJ.notedinCiba-GeigyCanadaLtd.v.ApotexInc.:
150

InConsumersDistributingCo.v.SeikoTimeCanadaLtd.,[1984]1S.C.R.583,this
Courtnotedatp.601thattherequirementsofapassing-offactionhaveevolved
somewhatinthelasthundredyears:…attentionshouldbedrawntothefactthatthepassingoffruleis
foundeduponthetortofdeceit,andwhiletheoriginalrequirementofan
intenttodeceivediedoutinthemid-1800’s,thereremainsthe
requirement,attheveryleast,thatconfusioninthemindsofthepublic
bealikelyconsequencebyreasonofthesale,orprofferingforsale,by
thedefendantofaproductnotthatoftheplaintiff’smaking,underthe
guiseorimplicationthatitwastheplaintiff’sproductortheequivalent.
Amanufacturermustthereforeavoidcreatingconfusioninthepublic

147AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314at330.148WestfairFoodsLtd.v.JimPattisonIndustriesLtd.(1989),24C.I.P.R.70(B.C.S.C.)(affirmedby
WestfairFoodsLtd.v.JimPattisonIndustriesLtd.(1990),30C.P.R.(3d)174(B.C.C.A.))wherethe
Courtnotedthatan“elementofdeceit”wasanessentialconditionofthecommonlawactionof
passingoff,aviewnotsharedbytheSupremeCourtofCanadaafewyearslaterinCiba-Geigy
CanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at133).
149WestfairFoodsLtd.v.JimPattisonIndustriesLtd.(1989),24C.I.P.R.70at88(B.C.S.C.).150Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.

27
mind,whetherdeliberatelyornot,byaget-upidenticaltothatofa
productwhichhasacquiredasecondarymeaningbyreasonofitsget-
up.
151

InEliLilly&Co.v.NovopharmLtd.,
152DesjardinsJ.oftheFederalCourtofAppeal
alsoconfirmedthatthetypeof“confusion”foundinsection7(b)oftheTrade-marks
Actisconfusionastosource:
[58]TheappellantsalsotakeissuewithTrialJudge’sfindingofno
“significantlikelihoodofconfusion”which,theysay,isnottheproper
legaltest.Theycorrectlypointoutthattheword“significant”isnotfound
inparagraph7(b)oftheAct.Thecaselawsurroundingthepassing-off
requires,however,evidenceofconfusionthatexceedsthedeminimis
threshold.TheTrialJudgebasedherstatementsthattheremustbe
“someevidenceadequatetosupportafindingoflikelihoodofconfusion”
andthat“Whatdegreeoflikelihoodofconfusionwillsupportapassing-
offclaimvarieswiththeparticularfactsofeachcase”uponaccurate
interpretationsoftheauthoritieswhichshecited.
[59]Therearenomagicwordstobeusedtodeterminetheleveltobe
reached.Onecanfindinthecaselawphrasessuchas“significant
likelihoodofconfusion”,“noreasonablelikelihoodofconfusion”,“real
likelihoodofconfusion”,“substantialnumber”(ofprospectiveconsumers
wouldbedeceived)and“significantpercentage”.[endnotesomitted].
[60]HerapproachisalsosupportedbythepassagefromRoche
ProductsLtd.v.BerkPharmaceuticalsLtd.,[1973]R.P.C.473,thatwas
quotedbytheSupremeCourtinCiba-Geigytotheeffectthat:

Whatmustfirstbeshownisthatasubstantialbodyofpatients
wouldhavecometo
attributetheplaintiff’sproduct,byreasonofcolour,shape,size,number,grooveon
oneside,andsomewordortheother,tosomeonetradesourceorprovenance.
[Emphasisintext.]
153

Morerecently,inPositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.,
154
PelletierJ.oftheFederalCourtofAppealhighlightedtheconnectionbetweensection
7(b)andsection6oftheTrade-marksActwhichdefinesconfusion–andevenwith
section4whichdefinesuse:[30]Beforetherecanbeacontraventionofparagraph7(b)ofthe
Trade-marksAct,theremustbeevidenceofconfusionorthelikelihood
ofconfusion.Confusioninrelationtotrade-marksisdefinedat

151Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at133.152EliLilly&Co.v.NovopharmLtd.,[2001]2F.C.502(F.C.A.).153EliLilly&Co.v.NovopharmLtd.,[2001]2F.C.502atparas.58,59and60(F.C.A.).154PositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.(2005),43C.P.R.(4th)418
(F.C.A.).

28
subsection6(2)oftheTrade-marksAct:
6…(2)Theuseofatrade-markcausesconfusionwithanother
trade-markiftheuseofbothtrade-marksinthesameareawould
belikelytoleadtotheinferencethatthewaresorservices
associatedwiththosetrade-marksaremanufactured,sold,
leased,hiredorperformedbythesameperson,whetherornot
thewaresorservicesareofthesamegeneralclass
[31]Confusionarisesfromtheuseofatrade-mark.Thedefinitionof
“use”ofatrade-markinrelationtogoodsisfoundatsection4ofthe
Trade-marksAct:
4.(1)Atrade-markisdeemedtobeusedinassociationwith
waresif,atthetimeofthetransferofthepropertyinor
possessionofthewares,inthenormalcourseoftrade,itis
markedonthewaresthemselvesoronthepackagesinwhich
theyaredistributedoritisinanyothermannersoassociated
withthewaresthatnoticeoftheassociationisthengiventothe
persontowhomthepropertyorpossessionistransferred.
[32]Useofatrade-markinassociationwithwaresrequiresthetransfer
ofpropertyingoodsinthecourseoftrade.Consequently,ifnogoods
aretransferredinthecourseoftrade,therecanbenoconfusion.The
motionsJudge’sfactualconclusionsastotheappellants’dealingwith
thePASSsystemestablishthattheappellantswerenotengagedin
tradingwithregardtothatsystem.Thereisnothingintherecordto
suggestthattheappellants’useofASESS,consideredasatrade-mark,
causedanyconfusionwiththerespondents’trade-marks.
[33]Thereisasuggestionthatthesimilaritybetweenthecontentofthe
ASESSsystemandthePASSsystemcausedconfusionbetweenthem
butconfusion,fortrade-markspurposes,isconfusionbetweentrade-
marksandbetweentrade-marksandtrade-names.Seesubsections
6(2),(3)and(4).Asaresult,iftheappellantswerenottradinginthe
PASSsystem,andifnoissueofconfusionariseswithrespectto
ASESSconsideredasatrade-mark,therecanbenoconfusionandno
contraventionofparagraph7(b).
155

Thereferencetosection4inPositiveAttitudeSafetySystemInc.istobecompared
toanearlierdecisionoftheFederalCourtofAppealinEnterpriseCarandTruck
RentalsLtd.v.EnterpriseRent-A-CarCo.,
156wheretheCourtconcludedthata
plaintiffneednotestablishthatit“adopted”itstrade-markinaccordancewithsections
3,4and5oftheTrade-marksActinordertosucceedundersection7(b):

155PositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.(2005),43C.P.R.(4th)418at
paras.30,31,32,and33(F.C.A.).
156EnterpriseCarandTruckRentalsLtd.v.EnterpriseRent-A-CarCo.(1998),79C.P.R.(3d)45
(F.C.A.).

29
[5]Counselfortheappellantsconcedesthat,underthecommonlaw,a
plaintiffinapassingoffactionneednotprovethathehasusedhismark
inCanadaorthathehasmadeitwellknowninCanada.Hesays,
however,thatthesituationisdifferentwhentheactionisbroughtinthe
FederalCourtwhichhasnojurisdictiontohearanddecideanactionfor
passingoffbasedonthecommonlaw.Itisnowestablishedthat
paragraph7(b)isconstitutionallyvalidonlyinsofarasitprotectstrade-
marks.Inspiteofthegeneralityofitsterms,thatprovisionmust,
therefore,bereadasreferringonlytotheprotectionoftrade-marks,
registeredorunregistered.Theplaintiff,inanactionunderparagraph
7(b)must,therefore,provethathe“owns”atrade-markthatisinneed
ofprotection.Itiswellknownthatatrade-markis“acquiredbyadoption
anduse”.Assections3andfollowingprescribehowamarkisdeemed
tobeadoptedforthepurposesoftheAct,itfollows,accordingto
counsel,thattheplaintiffinanactionforpassingoffunderparagraph
7(b)oftheActmustnecessarilyprovethatheisdeemedbysection3to
haveadoptedthetrade-markinquestion.
[6]Thereis,inmyopinion,anobviouserrorinthatreasoning.
[7]Section3,4and5oftheTrade-marksActdonot,ascounselforthe
appellantsassumes,prescribesubstantiverulesgoverningthe
acquisitionanduseoftrade-marks.Thesesectionsaregroupedwith
sections2and6undertheheading“Interpretation”.Section2contains
definitions.Sections3,4and5are“deeming”clauseswhichsimply
ascribeaspecialmeaningtocertainphrases.Thesethreesections
mustbeappliedininterpretingthesectionsoftheActwherethose
phrasesareused.Otherwise,theyhavenoroletoplay.
157

Itisworthmentioningthatthestatutoryclaimundersection7(b)hasatime
componentastheplaintiffmustestablishthattherewaslikelihoodofconfusionatthe
timedefendantcommencedtodirectpublicattentiontohiswares,servicesor
business.See,forexample,AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.
158
andTopNotchConstructionLtd.v.Top-NotchOilfieldServicesLtd.159

Finally,dependingontheextentofwhatisclaimedasadistinctiveguise,get-up,
nameorsymbolbyaplaintiff,considerationofnon-confusingelements,inappropriate
cases,suchasthestyleoflettering,thecolouringofsignsofthepartiesorthe
appearancesoftheparties’marksasactuallyusedonsignsandboxesisavery
relevantconsiderationinapassingoffactionatcommonlaw.
160Likewise,ina

157EnterpriseCarandTruckRentalsLtd.v.EnterpriseRent-A-CarCo.(1998),79C.P.R.(3d)45at
paras.5,6and7(F.C.A.).
158AsbjornHorgardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314at330(F.C.A.).159TopNotchConstructionLtd.v.Top-NotchOilfieldServicesLtd.(2001),13C.P.R.(4th)515at533
(F.C.T.D.).
160Mr.SubmarineLimitedv.AmandistaInvestmentsLimited.,[1988]3F.C.91at101(F.C.A.).

30
passingoffactionundersection7(b),thesefactorsarerelevantandtheCourtwill
considerallelementsonapackage,forexample,inordertodetermineifacase
undersection7(b)hasbeenmadeout.TheSupremeCourtofCanadacarriedoutthis
analysisinTartanBrewingLimitedv.TheCarlingBreweries(B.C.)Limited
161where
HallJ.wrote:Inmyviewthiscasefallstobedeterminedfromacomparisonofthe
labelsandcartonsusedbytheappellantandrespondentrespectively
andwhicharesaidtobesimilarastocauseortobelikelytocause
confusion.
…
IdonotseehowitcanbesaidthatapurchaserofPilsenerbeerwould
bedeceivedorconfusedormisledintobelievingthattheappellant’s
“Pilcan”beerwastherespondent’s“Pil”beer.Thereisjustno
appreciablesimilarityinthelabelsorcartonsthatwouldcauseorbe
likelytocauseconfusion.TherespondentdoesnotsellPilsenerbeerin
cans.TheappellantdoesnotsellitsPilsenerbeerinbottles.The
cartonsareasunalikeastobeercartonscanbe,bothinshapeand
colouring.
162

Proceedingsundersection7(b)areusuallycommencedbyStatementofClaim.
However,section53.2oftheTrade-marksActpermitsproceedingstobecommenced
bywayofapplication.Inperhapstheonlyreporteddecisioninwhichasection7(b)
claimwascommencedbywayofapplication,JusticeFrenetteoftheFederalCourt
dismissedtheapplicationonthebasisthattheapplicanthadnotledanyevidenceof
actualorpotentialdamageorevenarguedthatsuchdamagehadbeensufferedby
theapplicant.
163ThisdecisionwasaffirmedonappealtotheFederalCourtof
Appeal.164TheCourtre-affirmeditsholdinginBMWCanadathatdamageswillnot
bepresumedevenwherealikelihoodofconfusionhasbeendemonstrated.Aclaim
forstatutorypassingoffcannotsucceedintheabsenceofevidenceofactualor
potentialdamage.Thisdecisionunderscorestheemergingtrendofrecenttrade-
markdecisions,allofwhichstandforthepropositionthatevidenceofdamageis
requiredbeforeanyreliefundersection7(b)willbegranted.

6.3.2.3Section7(c)

InMacDonaldv.VaporCanadaLtd.,
165LaskinC.J.understoodsection7(c)as
outliningaprohibitionwhichalreadyexistsintheordinarylawofcontracts:

161TartanBrewingLimitedv.TheCarlingBreweries(B.C.)Limited,[1970]S.C.R.323.162TartanBrewingLimitedv.TheCarlingBreweries(B.C.)Limited,[1970]S.C.R.323at327.163PharmacommunicationsHoldingsInc.v.AvenciaInternationalInc.etal.,2008FC828164PharmacommunicationsHoldingsInc.v.AvenciaInternationalInc.etal.,2009FCA144165MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147and148.

31
Section7(c)isacuriousprovisiontobearmedwithacivilsanctionby
wayofdamageswhenonealreadyexistsintheordinarylawofcontract.
Theprovisionreferstosubstitutionofothergoodsforthoseorderedor
requested,butthereisalwaystherighttorejectupondiscoveryofthe
substitution,andifthesubstitutedgoodsareknowinglyacceptedthere
wouldappeartobenorelief.Ifs.7(c)purportstogiveadditionalrelief
evenifthesubstitutedgoodsareknowinglyaccepted,wherearethe
damages?Ordoestheprovisionenvisagedamagesarisingfromfailure
todeliverthepropergoodsintime?Ifso,thereistheusualremedyfor
breachofcontract.Icansees.7(c)inthecontextofaregulatoryregime
subjecttosupervisionbyapublicauthority,butitspresenceunderthe
sanctionofaprivatecivilremedymerelyemphasizesformefederal
intrusionuponprovinciallegislativepower.
166

However,LaskinC.J.hadpreviouslyreferredtoEldonIndustriesInc.v.ReliableToy
Co.Ltd.;
167there,section7(c)wasseenasacodifiedformofthecommonlawtortof
passingoffofone’swaresforthoseofanother:Paragraph(c),ontheotherhand,pointstoaparticularkindofpassing
off–substitutingwaresorservicesforthoseorderedorrequested,as
whenaproductmanufacturedbyAisorderedandthevendorsuppliesa
productmadebyBasansweringthedescription.
168

InPositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.,
169theFederal
CourtofAppealemphasizedthatfortheretobeaviolationofsection7(c),theremust
betradeinvolvingtrade-marks:[34]Inthesameway,theconclusionastotheabsenceofanytrading
activitywithrespecttothePASSsystemisfataltotheclaimofpassing
offcontrarytoparagraph7(c).Inorderfortheretobeaviolationof
paragraph7(c),theremustbetradeinvolvingtrade-marks.
170

Forhispart,LeBelJ.inKirkbiAGv.RitvikHoldingsInc.
171sawsection7(c)as
explicitlytargeting“passingoff”:RemediesundertheTrade-marksActrelyextensivelyonthehistorical
developmentofthetortofpassingoff.Inabroadsense,someofthe
remediesunders.7,forexamples.7(c)explicitlytarget“passingoff”.
172

166MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at147-148.167EldonIndustriesInc.v.ReliableToyCo.Ltd.(1965),54D.L.R.(2d)97(O.C.A.).168MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at152-153.169PositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.(2005),43C.P.R.(4th)418
(F.C.A.).
170PositiveAttitudeSafetySystemInc.v.AlbianSandsEnergyInc.(2005),43C.P.R.(4th)418at
para.34(F.C.A.).
171KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.62.172KirkbiAGv.RitvikHoldingsInc.,[2005]3S.C.R.302atpara.62.

InSearleCanadaInc.v.NovopharmLtd.,173theFederalCourtofAppealoutlinedthe
threeconditionsthataplaintiffmustsatisfyinordertosucceedinitspassingoff
actionundersection7(c):
Inordertosucceedinitspassing-offactionunders.7(c)oftheTrade-
marksAct,theappellantwouldhavetoshowthatitsget-uphad
acquiredasecondarymeaningorreputationinthemindofthepublic
suchthatthepublicidentifiesthatget-upwiththeappellant;oratleast
withsomemanufacturingsource,(astowhichseee.g.,JohnWyeth&
BrothersLtd.v.M&A.PharmachemLtd.,[1985]F.S.R.16(Ch.D.)at
p.29).Inaddition,confusioninthemindsofthepublicwouldneedtobe
shown.Moreover,theappellantwouldhavetoshowthattherespondent
inducedorenabledotherstopassoffitsoraldosageformulationsasthe
appellant’soraldosageformulations.
174

6.3.2.4Section7(d)

InMacDonaldv.VaporCanadaLtd.,
175LaskinC.J.describedsection7(d)inthe
followingfashion:Section7(d)appearstobedirectedtotheprotectionofapurchaserora
consumerofwaresorservices,incontrastwiths.7(a)whichinvolves
slanderoftitleorinjuriousfalsehoodquaacompetitorinbusiness.It
involveswhatIwouldtermdeceitinofferinggoodsorservicestothe
public,deceitinthesenseofmaterialfalserepresentationslikelyto
misleadinrespectofthecharacter,quality,quantityorcompositionof
goodsorservices,orinrespectoftheirgeographicoriginorinrespect
oftheirmodeofmanufacture,productionorperformance.Ifany
aggrievedpersonwouldhaveacauseofactionunders.53inrespectof
damagessufferedbyhimbyreasonofabreachofs.7(d),itwould
ordinarilybeexpectedtoarisethroughbreachofcontract.Onecan
envisage,ofcourse,astatutorytortofdeceitunders.7(d),butthis
hardlyaddstoitsconstitutionalproprietyasfederallegislation.Whether
soundingincontractorintort,itisnotlimitedtothosebasesofreliefin
respectofenterprisesorservicesthatareotherwisewithinfederal
legislativecompetence.Again,theissueofaviolationofs.7(d)couldas
easilyariseinalocalorintraprovincialtransactionasinan
interprovincialone;thereisnothingins.7(d)thatemphaisizesany
interprovincialortransprovincialscopeoftheprohibitionins.7(d)soas
toestablishsomeconnectionwithfederallegislativeauthorityunders.

173SearleCanadaInc.v.NovopharmLtd.(1994),56C.P.R.(3d)213(F.C.A.).174SearleCanadaInc.v.NovopharmLtd.(1994),56C.P.R.(3d)213at229-230(F.C.A.).175MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at148.

33
91(2)oftheBritishNorthAmericaAct.176

AlthoughLaskinC.J.referredtothelawofcontractstodescribesection7(d),the
lattercanalsobecharacterizedasthecodificationofwhatisknownastheextended
formofpassingoff.Theextensionoftheactionofpassingoffwasdescribedby
DanckwertsJ.inBollingerv.CostaBravaWineCo.(No.1)
177inthefollowing
fashion:Thereseemstobenoreasonwhysuchlicenceshouldbegiventoa
person,competingintrade,whoseekstoattachtohisproductaname
ordescriptionwithwhichithasnonaturalassociation,soastomake
useofthereputationandgoodwillwhichhasbeengainedbyaproduct
genuinelyindicatedbythenameordescription.Inmyview,itoughtnot
tomatterthatthepersonstrulyentitledtodescribetheirgoodsbythe
nameanddescriptionareaclassproducinggoodsinacertainlocality,
andnotmerelyoneindividual.Thedescriptionispartoftheirgoodwill
andarightofproperty.Idonotbelievethatthelawofpassing-off,which
arosetopreventunfairtrading,issolimitedinscope.
178

Section7(d)accordinglyprohibitstheuseofafalsedescriptionlikelytomisleadthe
publicastothecharacter,quality,quantityorcomposition,thegeographicaloriginor
themodeofmanufacture,productionorperformanceofwaresorservices.Althoughit
mightbeargued,forexample,thatthedescriptivegeographicaltermusedbymany
tradersalloriginatingfromthesameareainquestionwouldnotbeatraditional“trade-
mark”,theterminquestioncouldbemoreproperlycharacterizedasacertification
markwhichisatypeoftrade-markundersection2oftheTrade-marksAct.This
“trade-mark”presenceundersection7(d)obviouslysolvesanyconstitutional
problemsthattheabsenceofanytrade-markschemewouldcreate.

Toillustrateacommonlawactionofpassingoffthatcouldalsobeinitiatedunder
section7(d),onemaysuggestthescenarioofaplaintiffusingadescriptivebutwell
knownwordorexpressiontocorrectlydescribethegeographicoriginofhisgoods
andwhosuesacompetitorwhomisleadsthepublicbyusingthesamewordor
expressionwhichismisdescriptivewhenappliedtothedefendant’sgoods.Suchwere
thecircumstancesexaminedbyEsteyJ.inConsumersDistributingCompanyLimited
v.SeikoTimeCanadaLtd.,
179whenhereviewedtheexpandedprinciplesofpassing
offasoutlinedinBollingerv.CostaBravaWineCo.(No.1);180there,thekeyissue
waswhetherthedefendantcouldarrogatetoitsSpanishwinetheword“Champagne”
andtherebysucceedtoanybenefitswhichhadaccruedtotheplaintiffsbyreasonsof

176MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at148.177Bollingerv.CostaBravaWineCo.(No.1),[1960]R.P.C.16(Ch.Div.).178Bollingerv.CostaBravaWineCo.(No.1),[1960]R.P.C.16at31and32(Ch.Div.).179ConsumersDistributingCompanyLimitedv.SeikoTimeCanadaLtd.,[1984]1S.C.R.583.180Bollingerv.CostaBravaWineCo.(No.1),[1960]R.P.C.16(Ch.Div.).

34
theword“Champagne”havingbecomeknowninthemarketasassociatedwithwine
producedbytheplaintiffsfromgrapesgrownintheDistrictofChampagne,France.
EsteyJ.distinguishedthiscaseofpassingofffromthecaseofgreymarketingthat
wassubmittedtotheCourt:DanckwertsJ.foundthatplaintiffshaddevelopedagoodwillor
reputationinthemarketbyassociatingitsproductwiththeregionof
origin…
…
Thatextensionoftheactionofpassingoff,ifitisanextension,doesnot
reachthecircumstancesofthisappeal.InBollinger,thedefendantdid
notpassoffhisgoodsasthoseoftheplaintiffs,butdirectedattention
unfairlytohisgoodsbyassociatingthemwiththoseoftheplaintiffs,by
thedeliberateuseofanamewhichhadbecomeassociatedinthe
marketwiththegoodsoftheplaintiffs.Thedesiredimpressiononthe
mindofthewine-buyingpublicwasthattheproductofthedefendant
wasofthesamestandardofqualityandacceptanceasthewineofthe
plaintiffs.
181

EsteyJ.alsoreferredtoBollingerv.CostaBravaWineCo.No.(2)
182where,attrial,
DanckwertsJ.foundthatplaintiffhadsucceededinitsextendedactionofpassingoff:
Thedefendants’winethereforeisnotChampagne,anditisuntruthfulto
describeitassuch.Notonlyisituntruthful,butifitwassodescribed
deliberatelywiththeobjectofacquiringsalesthroughthereputationof
theworld-famousandtrueChampagne,itisdishonesttocallthe
Spanishwinebythatname.
183

Thefactthatadescriptionisfalseisnotsufficient;thedescriptionwhoseuseis
carriedoutbyadefendantmustobviouslyhaveareputationthatcausesan
erroneousimpressionastothetruecharacteristicsoftheproductbythepurchasing
public.
Finally,againinConsumersDistributingCompanyLimitedv.SeikoTimeCanada
Ltd.,
184EsteyJ.alsoreferredtothecaseofErvenWarninkB.V.v.J.Townend&
Sons(Hull)Ltd.,185whereLordDiplockspokeaboutdamagetogoodwillgained
throughthereputationofatypeofproductbyreasonofits“recognizableand
distinctivequalities”:

181ConsumersDistributingCompanyLimitedv.SeikoTimeCanadaLtd.,[1984]1S.C.R.583at605
and606.
182Bollingerv.CostaBravaWineCo.No.(2),[1961]R.P.C.116(Ch.Div.).183Bollingerv.CostaBravaWineCo.No.(2),[1961]R.P.C.116at123(Ch.Div.).184ConsumersDistributingCompanyLimitedv.SeikoTimeCanadaLtd.,[1984]1S.C.R.583at609.185ErvenWarninkB.V.v.J.Townend&Sons(Hull)Ltd.,[1980]R.P.C.31(H.L.);seealsoInstitut
nationaldesappellationsd’originedesvins&eaux-de-viev.AndrésWinesLtd.(1990),30C.P.R.
(3d)279(O.C.A.).

35
Ofcourseitisnecessarytobeabletoidentifywithreasonableprecision
themembersoftheclassoftradersofwhoseproductsaparticularword
ornamehasbecomesodistinctiveastomaketheirrighttouseit
truthfullyasdescriptiveoftheirproductavaluablepartofthegoodwillof
eachofthem;butitisthereputationthatthattypeofproductitselfhas
gainedinthemarketbyreasonofitsrecognisableanddistinctive
qualitiesthathasgeneratedtherelevantgoodwill.Soifonecandefine
withreasonableprecisionthetypeofproductthathasacquiredthe
reputation,onecanidentifythemembersoftheclassentitledtosharein
thegoodwillasbeingallthosetraderswhohavesuppliedandstill
supplytotheEnglishmarketaproductwhichpossessesthose
recognisableanddistinctivequalities.
Itcannotmakeanydifferenceinprinciplewhethertherecognisableand
distinctivequalitiesbywhichthereputationofthetypeofproducthas
beengainedaretheresultofitshavingbeenmadein,orfrom,
ingredientsproducedinaparticularlocalityoraretheresultofitshaving
beenmadefromparticularingredientsregardlessoftheirprovenance;
thoughageographicallimitationmaymakeiteasier(a)todefinethe
typeofproduct;(b)toestablishthatithasqualitieswhichare
recognisableanddistinguishitfromeveryothertypeofproductthat
competeswithitinthemarketandwhichhavegainedforitinthat
marketareputationandgoodwill;and(c)toestablishthattheplaintiff’s
ownbusinesswillsuffermorethanminimaldamagetoitsgoodwillby
thedefendant’smisrepresentinghisproductasbeingofthattype.
186

Thus,itcanbestatedthattheimportantelementstoestablishinanyclaimunder
section7(d)aretheuseofadescription(undereitheroneoftheheadingsdetailed
therein)thatisfalseandthatthisuseislikelytomisleadthepublic,whichmeansthat
thedescriptionsousedbythedefendantobviouslybenefitsfromapositive
reputation.Ontheissueofthepublicbeingmisled,aplaintiffneedonlyestablishthe
likelihoodofthisfact,notthatthepublichasactuallybeenmisled,althoughthat
evidencewouldcertainlyberelevant;asimplepossibility,however,wouldnotbe
sufficient.
187Finally,theissueofdamage,asdiscussedabove,wouldalsobe
considered.
Thus,ifawellknowngeographicalnameadvantageouslyusedbymanytradersto
correctlydescribetheirproduct(ineffect,acertificationmark)isappropriatedbya
traderwhohasnoconnectionwiththegeographicalareaatissuetosellasimilar
productwhichisthenfalselydescribedandlikelytomisleadthepublic,apassingoff
actionundersection7(d)wouldbeavailable.

186ErvenWarninkB.V.v.J.Townend&Sons(Hull)Ltd.,[1980]R.P.C.31(H.L.)at98.187Byanalogy,seeVeuveClicquotPonsardinv.BoutiquesCliquotLtée,[2006]1S.C.R.824atpara.
67.

6.3.2.5Section7(e)

InMacDonaldv.VaporCanadaLtd.,
188Laskin,C.J.describedsection7(e)as“a
formulationofthetortofconversion,perhapswritlargeandinabusinesscontext.”189

Section7(e)was,however,foundtobeunconstitutionalandcannotberelieduponas
abasisforlegalproceedings.
6.3.3QuébecCivilCodecodification
6.3.3.1Article1457oftheCivilCodeofQuébec

Article1457oftheCivilCodeofQuébecsetsoutgeneralrulesconcerningconditions
forliabilityintheProvinceofQuebec.Althougharticle1457isobviouslynotlimitedto
commerceandtrade,itisreferredtoasalegalbasisinopposingwhatwouldbe
knownatcommonlawaspassingoff.InFrench,thisconcepthasnoexact
lexicologicalequivalent,afactnotedbyGonthierJ.inCiba-GeigyCanadaLtd.v.
ApotexInc.
190EquivalentnotionsinFrenchfora“passingoffaction”werecompiled
bytheQuebecCourtofAppeal:«actionenimitationtrompeuse»,«actionenimitation
frauduleuse»and«délitcivildetromperie»werenotedbyRousseau-HouleJ.who
wroteforthemajorityinKisber&Co.Ltd.v.RayKisber&AssociatesInc.
191while
«commercialisationtrompeuse»and«délitdesubstitution»werereferredtobya
unanimousbenchinDemcoManufacturingInc.v.Foyerd’artisanatRaymondInc.
192

Article1457oftheCivilCodeofQuébecstates:
Everypersonhasadutytoabidebytherulesofconductwhichlieupon
him,accordingtothecircumstances,usageorlaw,soasnottocause
injurytoanother.
Whereheisendowedwithreasonandfailsinthisduty,heis
responsibleforanyinjuryhecausestoanotherpersonbysuchfaultand
isliabletoreparationfortheinjury,whetheritbebodily,moralor
materialinnature.
Heisalsoliable,incertaincases,toreparationforinjurycausedto
anotherbytheactorfaultofanotherpersonorbytheactofthingsinhis
custody.

188MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at149.189MacDonaldv.VaporCanadaLtd.,[1977]2S.C.R.134at149.190Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at134.191Kisber&Co.Ltd.v.RayKisber&AssociatesInc.,[1998]R.J.Q.1342(Q.C.A.)at1351.192DemcoManufacturingInc.v.Foyerd’artisanatRaymondInc.,2006QCCA52(Q.C.A.)atpara.8.

37
Althougharticle1457outlinesageneralcodeofbehaviour,ithasbeenfoundbythe
QuebecCourtofAppealthatthisprovisioncansupportintheProvinceofQuebec
whatwouldbeknownatcommonlawasapassingoffaction.

InKisber&Co.Ltd.v.RayKisber&AssociatesInc.,
193theQuebecCourtofAppeal
mentionedthatcommonlawprinciplessuchasthoseoutlinedbyGonthierJ.inCiba-
GeigyCanadaLtd.v.ApotexInc.
194areusefultodeterminewhetheradefendant
tradedunfairlyunderthegeneralprinciplesofcivilliabilityapplicableinQuebecand
outlinedintheCivilCode.

In9055-6473QuébecInc.v.MontréalAutoPrixInc.,
195theQuebecCourtofAppeal
confirmedthataplaintiffsuingforpassingoffintheProvinceofQuebecmayrelyon
section7(b)oftheTrade-marksActaswellasonarticle1457oftheCivilCodeof
Québecwhichalsoappliesinmattersofpassingoff(orasnotedbytheCourt«en
matièredecommercialisationtrompeuse»).
196Whetheraplaintiffpleadssection7(b)
oftheTrade-marksActorarticle1457oftheCivilCodeofQuébec,theCourt
indicatedthatthesamerequirementsapplyineithercase,i.e.thoseoutlinedby
GonthierJ.inCiba-GeigyCanadaLtd.v.ApotexInc.
197namely,theexistenceof
goodwill,thedeceptiverepresentationwhichhasmisledthepublicandactualor
potentialdamagetotheplaintiff.
198Proofofmaliceorfraudulentintentisnot
required.199

ThiscorrelationbetweentheCivilCodeandprinciplesofcommonlawregarding
passingoffwashighlightedasearlyas1992byGonthierJ.inCiba-GeigyCanada
Ltd.v.ApotexInc.
200whenhequotedauthorsNadeauandNadeauwhoreferredto
article1053oftheCivilCodeofLowerCanada,inforceatthetime,i.e.the
predecessorofcurrentarticle1457oftheCivilCodeofQuébecwhichcameintoforce
onJanuary1,1994.
201
Outsidethecommonlawcountriespassing-offhasnoexact
lexicologicalequivalentandingeneralisnotadelictassuch.InFrance,
forexample,itisoneaspectofunfaircompetitiontowhichcivilliability
sanctionsapply.Thepassing-offrulesinQuebecarederivedlargely
fromthecommonlaw.Remediesmaybesoughtinfederalaswellas
provinciallaw:

193Kisber&Co.Ltd.v.RayKisber&AssociatesInc.,[1998]R.J.Q.1342(Q.C.A.).194Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.1959055-6473QuébecInc.v.MontréalAutoPrixInc.,2006QCCA627(Q.C.A.).1969055-6473QuébecInc.v.MontréalAutoPrixInc.,2006QCCA627atpara.21(Q.C.A.).197Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.198Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at132.1999055-6473QuébecInc.v.MontréalAutoPrixInc.,2006QCCA627atpara.24(Q.C.A.).200Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120.201CivilCodeofQuébec,S.Q.1991,c.64;seeDécret712-93ofMay19,1993,publishedinthe
GazetteofficielleduQuébec,PartII,June2,1993,p.3589.

38
[TRANSLATION]Unlawfulorunfaircompetitioncausingan
unjustinjurytoanotherpersonfallswithincivilliabilityunderart.
1053C.C.Actionsfordamagesforunfaircompetitionareheard
undernotonlythefederallegislationbutalsothegeneral
principlesofdelictualcivilliability.
(NadeauandNadeau,Traitépratiquedelaresponsabilitécivile
délictuelle(1971),atp.221).
202

Finally,inDemcoManufacturingInc.v.Foyerd’artisanatRaymondInc.,
203the
QuebecCourtofAppealindicatedthatwhenarticle1457istobeapplied,thereare
noobstacles,whenconsideringaclaimforpassingoffintheProvinceofQuebec,to
subsumeunderthegeneralruleprovidedbythisprovisiontheelementsidentifiedby
GonthierJ.inCiba-Geigy.
204

6.4EXTRA-TERRITORIALUSESOFTRADE-NAMES/TRADE-MARKSGIVES
RISETOPROTECTABLERIGHTS

6.4.1Foreignusesmaygiverisetoprotectablerights
Trade-marksortrade-nameswhichhavebeenusedexclusivelybeyondCanada’s
borderscannonethelessbeprotectedinCanadaunderpassingofforunfair
competitionprinciples.
Inordertowarrantprotection,theextra-territorialtrade-markortrade-namemust
possessameasureofreputationorgoodwill(i.e.thatwhichattractscustom)in
Canada.
Whileatrade-markusedsolelyextra-territoriallywouldhavetobe”wellknown”in
ordertoqualifyforstatutoryprotectionundersection5oftheTrade-marksAct
205,the
requisitelevelofgoodwillwhichwillbeprotectedbytheCourtneednotbe
substantial.

202Ciba-GeigyCanadaLtd.v.ApotexInc.,[1992]3S.C.R.120at133.203DemcoManufacturingInc.v.Foyerd’artisanatRaymondInc.,2006QCCA52(Q.C.A.).204DemcoManufacturingInc.v.Foyerd’artisanatRaymondInc.,2006QCCA52(Q.C.A.)atpara.12.205Section5oftheTrade-marksActreads:
Atrade-markisdeemedtobemadeknowninCanadabyapersononlyifitisusedbythat
personinacountryoftheUnion,otherthanCanada,inassociationwithwaresorserves,and
(a)thewaresaredistributedinassociationwithitinCanada,or
(b)thewaresorservicesareadvertisedinassociationwithitin
(i)anyprintedpublicationcirculatedinCanadaintheordinarycourseof
commerceamongpotentialdealersinorusersofthewares
orservices,or
(ii)radiobroadcastsordinarilyreceivedinCanadabypotentialdealersin
orusersofthewaresorservices,
andithasbecomewellknowninCanadabyreasonofthedistributionoradvertising.

TwoseminalcasesinCanada,oneinOntario206andtheotherintheFederalCourt,207
illustratetheCourts’willingnesstoprotectthetransborderflowofgoodwill.

6.4.1.1TheOrkindecision

InOrkin,thedefendantadoptedthetrade-nameORKINExterminationCompanyin
associationwithitspestcontrolbusiness.Initially,apartfromlistingthenamein
phonedirectoriesandgovernmentalrecords(e.g.CorporateInformationActof
Ontario),thedefendantmadenopublicuseofthename.Thedefendantlaterused
theplaintiff’sORKINreddiamondlogoonitsinvoices.Thattrade-markhadbeen
usedinassociationwiththeidenticalservicesbytheplaintiff,exclusivelyintheUnited
States,forover80years.Theplaintiffwasoneofthelargestpestcontrolcompanies
intheworld.IthadadvertiseditsservicesinassociationwiththeORKINtrade-mark
inprintmedia,televisionandbillboardsintheU.S..Thetrade-markhadthereby
cometotheattentionofCanadianswhotravelledthere.

WhiletheplaintiffhadnotoffereditsservicesinCanadaandcarriedonnoother
businessinCanada,itintendedtoexpandintoCanadainthefuture.Theplaintiffhad
manycustomerswhoseprincipalresidencewasinCanadabutwhohadusedthe
plaintiff’sserviceswhilevacationingatwinterhomesintheU.S.

TheprincipalissuefortheCourtwaswhethertherecouldbeprotectablegoodwillin
Ontariowhentheplaintiffdidnotcarryonanybusinessthere.TheCourtremarked:
Tome,itseemsthatacompany’sgoodreputationinanareawhereit
doesnotcarryonbusinessislikeacapitalassetwhichhasnotyetbeen
puttowork.Iamunabletosee,andnonehasbeenpointedouttome,
anysocialoreconomicreasonwhythelawshouldnotprotectsuchan
asset.Itseemsthatitispreferablethatapersonnothavetorushinto
business,perhapsprematurely,inordernottolosehisgoodwillinan
area,andwhateverweightthelawattachestosavingthepublicfrom
beingdeceivedisonthesideofprotectingthatkindofanasset
208.

TheTrialJudgeconcludedthatitwasnotnecessarythatapersonbecarryingon
businessinCanadaforhimtohaveaproprietaryinterestwhichthelawwillprotect.

TheTrialJudgewas,however,heavilyinfluencedbythedefendant’sdeliberate

206OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1984),80C.P.R.(2d)153
(O.H.C.);affirmed(1985),50O.R.(2d)726(O.C.A.)
207EnterpriseRent-A-CarCo.v.Singer,[1996]2F.C.694;affirmed(1998),79C.P.R.(3d)45
(F.C.A.)
208OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1984),80C.P.R.(2d)153at
para.24(O.H.C.)

40
intentiontodeceiveandcreateconfusionbyadoptingtheplaintiff’strade-mark;and
thedefendant’sdeliberateintentiontoimpedetheplaintifffrombenefitingfromits
goodwillwhenitexpandeditsservicestoCanada.
209

TheTrialJudgeheldthatthenecessaryelementswhichmustbepresentinorderfor
aforeignplaintifftohaveenforceablegoodwillinOntarioare:1)goodwilland
customersinCanada;2)afutureintentiontoexpandtoCanada;3)adeliberate
attemptbythedefendanttodeceivecustomersandcreateconfusiontoimpedethe
plaintifffrombenefitingfromitsgoodwillwhentheplaintiffcametoCanada;and4)no
significantamountofgoodwillestablishedbythedefendantbyitsuseofthe
name/mark.
TheCourtofAppeal,inaffirmingtheTrialJudge’sdecision,stated:
However,aplaintiffdoesnothavetobeindirectcompetitionwiththe
defendanttosufferinjuryfromtheuseofitstrade-namebythe
defendant.Iftheplaintiff’strade-namehasareputationinthe
defendant’sjurisdiction,suchthatthepublicassociatesitwithservices
providedbytheplaintiff,thenthedefendant’suseofitmeansthatthe
plaintiffhaslostcontrolovertheimpactofitstradenameinthe
defendant’sjurisdiction.Thepracticalconsequenceofthisisthatthe
plaintiffisthenvulnerabletolosingtheOntariocustomersitnowhasas
wellasprospectiveOntariocustomers,withrespecttoservicesprovided
intheUnitedStates.Also,itcanresultinOrkinbeingpreventedfrom
usingitstrade-nameinOntariowhenitexpandsitsbusinessinto
Ontario.
210

Thecourtwasuntroubledbytherestraintimposeduponthedefendant:
Bearinginmindthat[thedefendant]hasavirtuallyinfiniterangeof
namesandsymbolsfromwhichtochoose,itisdifficulttoseethe
enjoiningofitfromusingthenameandlogoofawell-established
companyinthesamebusinessasanunreasonablerestraintonits
freedomtocarryonbusinessasitseesfit.Thepublicareentitledtobe
protectedfromsuchdeliberatedeceptionandOrkin,whichhaslaboured
longandhardandmadesubstantialexpenditurestocreatethe
reputationwhichitnowhas,whichreputationhasspreadtoOntario,is
entitledtotheprotectionofitsnamefrommisappropriation.Thespectra
ofOrkinhavingamonopolyinOntarioinitsnameanddistinctivelogo,
eventhoughitisnotnowcarryingonbusinesshere,isconsiderably
lesstroublingthanthedeceptiveuseofitsnameandsymbolby

209OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1984),80C.P.R.(2d)153at
para.28(O.H.C.)
210OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1985),50O.R.(2d)726atp.738
(O.C.A.)

41
another.…theinterestsofadishonestdefendantareentitledtoless
weightthanthoseofadefendantwhohasactedingoodfaith.211

Whilebadfaithonthepartofthedefendantalonedidnotconferacauseofactionon
theforeignplaintiff,itwasverymaterialfactortotakeintoaccountinweighingthe
parties’competinginterests.
Thethirdrequisiteelementformakingoutapassingoffcauseofaction,resulting
damage,wasmetbytheplaintiff’slossofcontrolovertheimpactofitstrade-namein
Ontarioandthecreationofanimpedimenttoitsuseofitstrade-markandtrade-name
uponenteringtheOntariomarket.
6.4.1.2MinimalreputationinCanadasufficient;norequirementfor”making
known”–theEnterprisedecision

ThefactsinEnterprise
212weresimilartothoseinOrkin.AtissueinEnterprisewas
theentitlementtousethetrade-markENTERPRISEinCanadainassociationwith
rentalcarservices.However,giventhattheplaintiffhadtoestablishrightsinatrade-
markinordertohaveacauseofactionforbreachofsection7(b)oftheTrade-marks
Act,213thedefendantattemptedtomakealegaldistinctiongroundedinsection5of
theTrade-marksAct.Sincethatsectionrequiresaforeigntrade-markownertohave
“madeknown”itstrade-markbeforeitcanacquiretheexclusiverighttoregisterthat
trade-markinCanada,thedefendantarguedthatthesame”makingknown”standard
shouldbeappliedbytheCourtindeterminingwhethertheplaintiffhadenforceable
rightstothetrade-markinCanadabeforethedefendant’sadoptionoftheidentical
mark.Sincetheevidenceclearlyshowedthattheplaintiffhaddevelopedonlya
“minimal”reputationattachedtoitstrade-markpriortothedefendant’sadoptionofthe
trade-mark,thedefendantarguedthattheplaintiffhadnoenforceablerightswhich
wereparamounttothedefendant’srightstothetrade-markwhichaccruedtothe
defendantthroughitsownsignificantuseofthetrade-markinCanadapriortothe
commencementofthelitigation.
TheCourtinEnterpriseheldthatthelevelofreputationattachedtoatrade-mark
whichwasrequiredtosucceedinsection7(b)actionwaslow.Thehigherrequired
thresholdof”makingknown”,whichgovernedtheregistrabilityofforeign(only)used
trade-marks,didnotapply.
214

ProtectablegoodwillcanthereforeexistinCanadaasaresultoftheuseofatrade-

211OrkinExterminatingCo.Inc.v.PestcoCo.ofCanadaLtd.etal.(1985),50O.R.(2d)726atp.742
(O.C.A.)
212EnterpriseRent-A-Carco.v.Singer,[1996]2F.C.694;affirmed(1998),79C.P.R.(3d)45(F.C.A.)213AsbjornHogardA/Sv.Gibbs/NortacIndustriesLtd.(1987),14C.P.R.(3d)314(F.C.A.)214EnterpriseRent-A-Carv.Singeretal.,[1996]2F.C.694atparas.61–69(F.C.)

42
markinanothercountrywherethattrade-markcomestotheattentionofCanadians,
eitherthroughuseorthroughadvertisingwhichreachesCanadians.A”minimal”or
“limited”levelofgoodwillissufficient.
215

ThedefendantalsoarguedthattheOrkindecisionrequiredtheCourttofind
deliberateorbadfaithadoptionoftheidenticalorconfusingmark.

TheCourtconfirmedthatitisnotnecessaryforaplaintifftoprovebadfaithonthe
partofthedefendanttosatisfythesecondcriteriaforpassingoff.Nonetheless,the
CourtofAppeal’sassessmentoftheevidencewasthatthedefendant”obviouslytried
toconcealtherealreasonswhichhadpromptedhimtoadoptthemark
‘ENTERPRISE'”.TheCourtquotedLordLindley,whostatedin1889:
…Onemustexerciseone’scommonsense,and,ifyouaredriventothe
conclusionthatwhatisintendedtobedoneistodeceiveifpossible,Ido
notthinkitisstretchingtheimaginationverymuchtocreditthemanwith
occasionalsuccessorpossiblesuccess.Whyshouldwebeastuteto
saythathecannotsucceedindoingthatwhichheisstrainingevery
nervetodo?
216:

Therefore,theestablishmentofaminimalorlimitedreputationassociatedwitha
trade-mark,whichiscreatedinthemindsofCanadiansthroughuseandadvertising
ofthetrade-markinaforeigncountryexclusivelyissufficienttofoundanactionfor
breachofsection7(b)oftheAct.Thesecondcriteria,misrepresentation,ismetby
establishingalikelihoodofconfusion.Theestablishmentofbadfaithorintentional
misconductisnotnecessarybutwillbeaveryrelevantfactor.Thethirdcriteria–
damage–ispresumptivelymetbytheplaintiff’slossofcontroloveritsreputationand
goodwill.
6.4.1.3Badfaithnotaprerequisite
Therehasnotbeenareporteddecisioninwhichpassingoffwasestablishedina
situationwherethedefendant’sadoptionanduseoftheconflictingtrade-markwas
freeofanybadfaithorknowingadoption.However,theprinciplesestablishedbythe
OrkinandEnterprisedecisionsapplyequallyinthe”innocentadoption”factsituation,
asconfirmedbytheSupremeCourtofCanada:Theappellantcontendedineffectthattherespondentwasadeliberate
freeriderwhohadnoreasonableexplanationforadoptingitstrade-
mark.Theobviousconclusion,arguestheappellant,isthatthe
respondentseekstoregisteramarkwhichisdesignedtopirate
whatevergoodwillitcanfromthemarkoftheappellant.…Itseemsto

215EnterpriseRent-ACarv.Singeretal.,[1996]2F.C.694atparas.56–57(F.C.)216Slazenger&Sonsv.Feltham&Co.(2)(1889),6R.P.C.531at538(C.A.)

43
methereissomejusticetothiscomplaint,buttherelevantperspective
ofsection6(2)oftheTrade-marksActisnotthatoftherespondentbut
rathertheperceptionoftherelevantmythicalconsumer.Mensreaisof
littlerelevancetotheissueofconfusion:Lexus.Ithasbeenestablished
sinceEdelstenv.Edelsten(1863),26E.R.72atpp.78-9,thatatrade-
markisaproprietaryright.If,astheappellantsays,therespondent’s
activitieshavetrespassedonthemarketingterritoryfencedoffbyits
BARBIEtrade-marks,itwouldbenodefencefortherespondentthatit
didnotintendtotrespass.Equally,however,iftherespondent’s
activitiesdidnotinfacttrespass,evidencethatitmayhavewishedtodo
sodoesnotconstituteconfusion:Fox1972),atp.403.Historically,
courtshavebeenslowtoconcludethatademonstratedpiraticalintent
hasfailedtoachieveitspurpose….
217

6.5LIMITSONPASSINGOFFREMEDY
6.5.1Publicinterestinfreecompetition
Notallharmfulcompetitionisunfairorunlawful.Mostimportant,thecountervailing
publicinterestinfreecompetitionoftendemandspriority;mostprominentlyinthe
claimtouseone’sownsurnamehonestlyinbusinessevenatthecostofsome
confusionwithacompetitor,andintheuseopentoallofgenericanddescriptive,as
distinctfromfancifulterms,unlesstheyhaveacquiredaso-calledsecondarymeaning
byexclusiveassociationwiththeplaintiff.
218

Thecommonlawprinciplesrelatingtocommerceandtradegenerallyproceedonthe
basisofarecognitionofperceivedbenefitstothecommunityoffreeandfair
competition…anyexpansionofthecommonlawprinciplestocurtailthefreedomto
operateintheopenmarketshouldbecautiouslyapproached.Thismustbethepath
ofprudenceinthisageoftheactivelegislativebranchwherethecommunity’strade
policiesareunderalmostcontinuousreview.
219

6.5.2Notrade-markprotectionforpurelyfunctionalobjects

Trade-marklawisnotintendedtopreventthecompetitiveuseofutilitarianfeaturesof
product.Anallegedmarkwhichgoesbeyonddistinguishingthewaresofitsownerto
thefunctionalstructureofthewaresthemselvestransgressesthelegitimatebounds
ofatrade-mark.
220

217Mattel,Inc.v.3894207CanadaInc.,[2006]S.C.J.No.23atpara.90218Fleming.LawofTorts(6thed)atp.676219ConsumersDistributingCo.v.SeikoTimeCanadaLtd.,[1984]1S.C.R.583220RemingtonRandCorp.v.PhilipsElectronicsN.V.(1995),64C.P.R.(3d)467at478(F.C.A.);

Thepassingoffremedywillnotavailaplaintiffwho,aftertheexpiryofitspatent,
attemptstoextendtheexpiredpatentmonopolyovertheshapeoftheinvention
throughtrade-marklawwhentheshapeissocloselyrelatedtotheinventionastobe
forallpracticalpurposesanelementessentialtomakingfulluseoftheinvention.
221

Thedoctrineoffunctionalityappliestobothregisteredandunregisteredtrade-
marks.
222Afunctionaluseorcharacteristicofaproductcannotbeatrade-mark.For
example,thegeometricpatternoftheLEGOstudsonLEGOtoybricksarenottrade-
marksbecause,iftheywerecutoffLEGObricks,thebrickswouldnotfunction–they
wouldnotfastentogetherwithanotherbrick.Thedoctrineoffunctionalitytherefore
deniestheexistenceoftrade-markrightsaltogether.Withoutasubsistingtrade-mark,
section7(b)isnotanavailablecauseofaction.Purelyfunctional”trade-marks”
cannotformthebasisofanactionclaimingpassingoffundersection7(b)ofthe
Trade-marksAct.
223

TheSupremeCourtinKirkbisummarizeditsdecisionasfollows:
Underthemodernlawofpassingoff,apassing-offactionbythe
appellantwasboundtofail.Itwouldnothavebeenabletomeetthe
firstconditionoftheaction,namelythattherebegoodwillinrespectof
thedistinctivenessoftheproduct.Theallegeddistinctivenessofthe
productconsistedpreciselyoftheprocessandtechniqueswhichwere
nowcommontothetrade.Again,Kirkbicouldnotovercomeanother
formofthefunctionalityproblem.Grantingsuchaclaiminthese
circumstanceswouldamounttorecreatingamonopolycontrarytobasic
policiesofthelawsandlegalprincipleswhichinformthevariousforms
ofintellectualpropertyinourlegalsystem.Theappellantisnolonger
entitledtoprotectionagainstcompetitioninrespectofitsproduct.It
mustnowfacetherigorsofafreemarketanditsprocessofcreative
destruction.
224

Note,however,thattheremaybeenforceabletrade-markrightsinobjectswhich
possesssomefunctionalorutilitarianfeaturessolongastheydonotcreatea
monopolyinthefunction.
225

PizzaPizzaLtd.v.Canada(RegistrarofTradeMarks),[1989]3F.C.379at381(F.C.A.);Thomas&
Betts,Ltd.v.PanduitCorp.,[2000]3F.C.3atpara.25(F.C.A.)
221Thomas&Betts,Ltd.v.PanduitCorp.etal.(2000),4CPR(4th)498atpara.23–24(F.C.A.)222KirkbiAGv.RitvikHoldingsInc.,[2005]S.C.J.No.66223KirkbiAGv.RitvikHoldingsInc.,[2005]S.C.J.No.66224KirkbiAGv.RitvikHoldingsInc.,[2005]S.C.J.No.66atpara.69225SeeCrocsCanadaInc.etal.v.HoleySolesHoldingsLtd.2008FC188wheretheFederalCourt
dismissedthedefendant’ssummaryjudgmentmotiononthebasisthattheasserteddistinguishing
guise(footwear)didnotappeartobe”purely”or”solely”functional.

45
Theshapingofthebodyofathreewheelvehiclewhichwasnotwhollyorprimarily
functionalqualifiedasadistinguishingguise226.Intheabsenceofexpertevidence,
theCourtwasunwillingtofindthatthedevelopmentofthethreewheeledvehicle
industrywouldbeundulyrestricted
227.However,giventhattheplaintiff’svehiclehad
enjoyedonlymodestsales,theshapehadnotdevelopedthenecessarygoodwillto
supportapassingoffclaim.Intheabsenceofgoodwill,therecouldbeno
confusion
228

6.5.3Registeredtrade-marksmay”trump”unregisteredtrade-markrights

Section19oftheAct
229givestheregistranttheprimafacierighttotheexclusiveuse
oftheregisteredtrade-markthroughoutCanada.
Therefore,unlessatrade-markregistrationisdeclaredinvalidundersection18,the
statutoryrightisparamounttoanyunregisteredtrade-markrightownedbyanother
party.Theregistrationofatrade-mark,unlessshowntobeinvalid,isacomplete
defencetoanactiongroundedinsection7(b)orcommonlawpassingoff.
230

Inaddition,whilethematterisnotfreefromdoubt,twoappellatedecisions
231strongly
suggestthataregistrantwhoheldavalidregistrationuntilfoundinvalidand
expungedoughtnotbeliabletopaycompensationforuseofitsregisteredmark
attributabletotheperiodduringwhichitsregistrationwasineffect.

6.5.4Commonsensetobeapplied
Thedoctrineofpassingoffisnotdesignedtopreventcarelessness,ignoranceor
misinformationonthepartoftheconsumer.Thecauseofactiondoesnotgivethe
plaintifftherighttoimposeorengageinunreasonablerestraintsoftrade.
232The
Courtsmustbevigilantinprovidingprotectionfromlostopportunityfromunfairand

226T-RexVehiclesInc.v.6155235CanadaInc.etal.(2008),67C.P.R.(4th)444(QCA)227T-RexVehiclesInc.v.6155235CanadaInc.etal.(2008),67C.P.R.(4th)444(QCA)228T-RexVehiclesInc.v.6155235CanadaInc.etal.(2008),67C.P.R.(4th)444(QCA)229Subjecttosections21,32and67,theregistrationofatrade-markinrespectofanywaresor
services,unlessshowntobeinvalid,givestotheownerofthetrade-marktheexclusiverighttothe
usethroughoutCanadaofthetrade-markinrespectofthosewaresorservices.R.S.,1985,c.T-13,
s.19;1993,c.15,s.60
230MolsonCanadav.OlandBreweriesLtd.(2002),19C.P.R.(4th)201at202,para.2(Ont.C.A.);
Jonathan,BoutiquePourHommesInc.v.Jay-GurInternationalInc.(2003),23C.P.R.(4th)492at
493,para.4(F.C.)
231RemoImportsLtd.v.JaguarCarsLtd.,[2007]F.C.J.No.999atparas.106-114(F.C.A.);Veuve
ClicquotPonsardinv.BoutiquesCliquotLtee,[2006]1S.C.R.824atPara.16
232CanadianBusinessSchoolInc.v.SunriseAcademyInc.(2002),23C.P.R.(4th)220at230,para.
26(F.C.)

46
overlyrestrictiverestraintoftrade.Thebalanceisoftenoneofcommonsenseand
judgmentonthefindingoffactsastotheexistenceoftheelementsofgoodwill,
misrepresentationandconfusion.
233

ROBIC,ungrouped’avocatsetd’agentsdebrevetsetdemarquesdecommerce
vouédepuis1892àlaprotectionetàlavalorisationdelapropriétéintellectuelledans
touslesdomaines:brevets,dessinsindustrielsetmodèlesutilitaires;marquesde
commerce,marquesdecertificationetappellationsd’origine;droitsd’auteur,
propriétélittéraireetartistique,droitsvoisinsetdel’artisteinterprète;informatique,
logicielsetcircuitsintégrés;biotechnologies,pharmaceutiquesetobtentions
végétales;secretsdecommerce,know-howetconcurrence;licences,franchiseset
transfertsdetechnologies;commerceélectronique,distributionetdroitdesaffaires;
marquage,publicitéetétiquetage;poursuite,litigeetarbitrage;vérificationdiligente
etaudit.ROBIC,agroupoflawyersandofpatentandtrademarkagentsdedicated
since1892totheprotectionandthevalorizationofallfieldsofintellectualproperty:
patents,industrialdesignsandutilitypatents;trademarks,certificationmarksand
indicationsoforigin;copyrightandentertainmentlaw,artistsandperformers,
neighbouringrights;computer,softwareandintegratedcircuits;biotechnologies,
pharmaceuticalsandplantbreeders;tradesecrets,know-how,competitionandanti-
trust;licensing,franchisingandtechnologytransfers;e-commerce,distributionand
businesslaw;marketing,publicityandlabelling;prosecutionlitigationandarbitration;
duediligence.
COPYRIGHTER
IDEASLIVEHERE
ILATOUTDEMÊMEFALLUL’INVENTER!
LAMAÎTRISEDESINTANGIBLES
LEGERROBICRICHARD
NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
PATENTER
R
ROBIC
ROBIC+DROIT+AFFAIRES+SCIENCES+ARTS
ROBIC++++

233WaltDisneyProductionsv.FantasylandHotelInc.(1994),56C.P.R.(3d)129atpara.55(Alta.
Q.B.)

47
ROBIC+LAW+BUSINESS+SCIENCE+ART
THETRADEMARKERGROUP
TRADEMARKER
VOSIDÉESÀLAPORTÉEDUMONDE,DESAFFAIRESÀLAGRANDEURDELA
PLANÈTE
YOURBUSINESSISTHEWORLDOFIDEAS;OURBUSINESSBRINGSYOUR
IDEASTOTHEWORLD
Trade-marksofROBIC,
LLP(“ROBIC”)