Excuse me for a minute, while I write about some of my favorite things: Outdoor apparel, Intellectual Property Law and Paleontology
“You will never look at the world in the same way after you study IP law” remarked a family friend (and now retired entertainment lawyer) when I told him about my upcoming enrollment in IP Law. At the time, I didn’t quite grasp what he was saying.
Twelve IP classes later, and I am now beginning to understand what he meant.
On my morning walk down Kitsilano’s 4th Avenue , I noticed a new outdoor apparel store named “TERREX”. It got me thinking, this logo looks a lot like that of one of my favorite outdoor clothing brands- Arc’teryx. ( The IP thinking cap was on). I continued on my walk, and then BAM, just 3 doors down- an actual Arc’teryx store. The distinctive mark, featuring a fossil hovered above. At this point, I was thinking: who owns this TERREX? Are they stupid? They are practically asking to be
sued!
It turns out TERREX is owned by Adidas, and in September of this year the parent company of Arc’teryx (Amer Sports Canada Inc.) filed a motion to oppose Adidas’ US trademark. Amer Sports Canada Inc. is seeking an injunction to stop Adidas from using the TERREX brand for both its brick-and-mortar retail stores and online stores. In addition,
is seeking damages for loss of profits against Adidas. The verdict is still pending, but here’s my take on how I anticipate a Canadian Court would rule on the matter. (Assume TERREX is applying for trademark protection in Canada)
Jurisdiction
s57 (1)TMA gives the Federal Court exclusive jurisdiction to order that any entry in the register be stuck out or amended
Substance of the Case
The issue for the Court to consider is whether the use of both TERREX and Arc’teryx in the same area likely lead to confusion? The relevant statute to consider is S12(1)(d), 6(2) and 6(5). A Trademark (TM) is not registrable if it is likey to cause confusion with another registered TM (12(1)(d). s6(2) & (5)TMA lay out the factors the court will consider in determining whether “confusion’ is likely to arises.
On the Matter of Confusion
In Consideration of s6(5) the Courts would look to the following. The Arc’teryx mark is inherently distinctive.Named after ARCHAEOPTERYX LITHOGRAPHICA, the first reptile to develop the feather for flight, its mark , reflects this, with a distinct bird fossil featuring prominently before the words “Ark’teryx”. Ark’Teryx, was established in Vancouver in 1989, and has become a market leader in high-quality Outdoor clothing, both in Canada and abroad. While TERREXs’ mark was first promoted in Canada in June 2022, with the opening of its first, and only store in Kitsilano. Both Arc’teryx and TERREXs’ business involve selling performance outdoor clothing. The two brands also share a similar cliental. TERREX aims to provide clothing for “outdoor enthusiasts chasing adventure”, and Arc’teryx target is “mountain enthusiasts, especially climbers, hikers and skiers.” Based on these factors, it would not be fanciful for a reasonable person to infer the goods associated with those trade-marks belong to the same source.
On the matter of resemblance s 6(5)(2).
Analogous to the Possum Lodge Case, here, the TERREX mark when viewed in its entirety bears a high degree of resemblance to that of Arc’teryx. The fonts are almost identical. Both marks are on a slight tilt in bold capital letters. The names even sound the same when pronounced. The Court would also consider the degree to which the marks differ (Promafil Canada Ltée v. Munsingwear Inc). Adidas, would likely argue that confusion is unlikely given the use of their well-known trademarked triangle logo within the TERREX mark. However, Adidas’s decision to incorporate their triangular mark, resembling a stylized letter ‘A,’ alongside the word “TERREX” means their mark bears a greater resemblance to ‘A Terrex.’ And is therefore more like Arc’Teryx.
Note:
Arc’teryxs’ case would be strengthened if they could provide evidence of actual confusion. If I was Arc’teryxs’ legal team I would be sending undercover consumers (UC) into TERREXs’ 4th avenue store to ask the staff (S) questions, in the hope that it would yield the following:
UC: IS this Arc’teryx?
S: No, this is Adidas’ outdoor label. Arc’teryx is a few doors down.
UC: Wow, your logos look similar. This must happen all the time?
S: Yes, we have at least 10 people a week come in and ask the same question
Conclusion
In accordance with the relevant statutes and case law, the Court will likely strike down Adidas’ registration of the TERREX mark on the basis that it would cause confusion with Arc’teryxs’ registered mark.
…
It will be interesting to see how the US Court decides on the issue.
P.S.
After doing a little digging, it turns out that Adidas use to own Ark’Teryx (2001-2005). Knowing that, Adidas should (REALLY) have known better.
Communications Law
WHAT A CASE!!
Admittedly I should be studying so it will be a quick comment…but what better way to spend a snowy Saturday looking up case law.
So…indeed Act’teryx is annoyed with Adidas. Here is a link to the notice of opposition that it filed with the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board on August 21,2023 https://ttabvue.uspto.gov/ttabvue/v?pno=91286788&pty=OPP&eno=4
looks like Terrex (Adidas) has had a TM since 2008. There was an opposition to their TM but it was with Terra Nova Shoes – but it was resolved. Arc’teryx’s has been in place since 1992. Here is the TM database link https://ised-isde.canada.ca/cipo/trademark-search/srch?lang=eng&payload=%7B%22domIntlFilter%22%3A%221%22%2C%22searchfield1%22%3A%22all%22%2C%22textfield1%22%3A%22arc%27teryx%22%2C%22display%22%3A%22list%22%2C%22maxReturn%22%3A%22500%22%2C%22nicetextfield1%22%3Anull%2C%22cipotextfield1%22%3Anull%7D&pageNum=0&pageLen=50
Clearly I need a life. Thanks for the refresher on confusion!
Doris
This is such an amazing post – thanks so much for sharing! I remember walking pass these stores myself and having a moment of confusion. It’s interesting how terrax even copied the outside of Art’teryx – almost wanting consumers to be confused.
I am curious about a passing off argument here as well.
1. Goodwill: Arc’teryx is originally from Vancouver, so there is a particular goodwill established in Vancouver. This perhaps would be less of an issue elsewhere, but in Vancouver Arc’teryx does has a regional goodwill lacking in other places. Goodwill should apply to a store, and not just the products. That’s what happened with Pirate Joes, as we discussed in class. The goodwill includes the get-up, which is how the product is presented. It’s how the customer first interacts with the product. The store front and the arrangement of the store itself is what the shopper first sees before interacting with the actual products.
A counter argument here would be generalization. Again, I am not too familiar with Arc’teryx, but it might not unique. I am thinking of Mountain Equipment Co-op, another Vancouver company, but almost 20 years older than Arc’teryx. If they have similar stores and brands, then I don’t think Arc’teryx can claim the goodwill. Rather, they might have infringed on Mountain Equipment Co-op’s goodwill and now it’s generic.
2. Misrepresentation leading to confusion: The similar looking name, and the fact the stores are so close to another does raise possible issue of confusion. If you think of the “shopper in hurry” type of person and want to get some Arc’teryx outdoor wear, it is reasonable possible to mistake stores. As BCSC said in the BCAA case at para 212: “A casual or hurried observer who had seen the BCAA site might well be confused that this was a BCAA sponsored site because of the striking visual similarities: the colour, the size of the font and the placement of the logos.” Replace the word site with store, and this is what happens here. The misrepresentation does not need to be intentional, but can be careless. Opening up a similar store three doors done seems careless.
The counter argument is if we use the sophisticated shopper model. As you said, a favourite thing of yours is outdoor apparel, and you were able to spot the difference between the stores quite easily. You were not confused. However, as the BCSC said in BCAA, even if the more sophisticated shopper is even partially confused, it could be enough: “I expect that shortly after starting to examine the site, it would be apparent to the internet user that it was not a BCAA site but that recognition would not be immediate.” It sounds like you were initially confused for a least a moment. You did figure it out, but that moment of uncertainty appears to be sufficient for passing off, at least for the BCSC. This seems like an application of the Initial Interest Confusion. You didn’t go and buy anything from the Adidas store, but the confusion got you interested. It even motived you to write about it. If you apply initial interest confusion, this should tip the scale towards misrepresentation.
3. Damage: Here, Arc’teryx could argue loss of sale. If they want an injunction, they don’t need to show actual loss, only potential loss.
Overall, I think the fatal element here for a passing off argument is the generalization. Although Arc’teryx is popular in Vancouver, it surely can’t claim to be the only outdoor apparel store with a unique presentation. Either Arc’teryx acquiesced the get-up a while ago, or they never had goodwill to begin with.