I was flying on Harbour Air the other day, and as we made our way over North Vancouver, I looked down to see a restaurant area with yellow umbrellas in the patio area. My first thought at the time was: is that a Cactus Club? The distinct yellow umbrellas in what appeared to be a seating area called to mind this restaurant chain. Trademarks are a mark or sign that is in use”[1] to direct consumers to where they want to go and what they want to buy.[2] As such, trademark law is a form of consumer protection in that it prevents consumers who want to buy one product from accidentally purchasing another one that looks strikingly similar. Companies who think that another company is using their product to gain a profit can be successful under the tort of passing off under s.7(b) of the Trademarks Act.
While there is no evidence of a registered trademark on the yellow umbrellas, there is obviously existence of some goodwill. The nature of goodwill involves a reputation in association with a business or product – trademark law protects the business owner in that it attempts to prevent one corporation from profiting off the hard work and reputation of another. In the case of Ciba-Geigy Canada Ltd. v. Apotex Inc.[3],the “get up” of a product was defined to include the shape, size, and color of a product that consumers associate with a certain product coming from a certain source. To be successful in this claim, the plaintiff was required to prove to the court that the “get-up” of their product had distinctive goodwill attached to it, and in producing a similar looking pill that was intended to treat the same illness, Apotex caused confusion to doctors and pharmacists.[4] As such, should a restaurant chain separate from Cactus Club use yellow umbrellas on their patio, they could be open to a claim that the “get-up” of the four sided, yellow umbrellas have a certain shape, size, and colour that is associated with the chain. As such, the presence of the umbrellas could attract consumers seeking to eat at Cactus Club and inadvertently entering a different restaurant.
This type of confusion is referred to as initial interest confusion. While initial interest confusion is not guided under the law in Canada, it is in the US. This concept was introduced in the case of Brookefield Communications Inc. v. Westcoast Entertainment Corp.[5] , and involves the confusion that comes into play when a consumer is the victim of one product being represented as another, or in other cases, as coming from the same source as another.[6] In domestic law, the concept was introduced in the case of BCAA v Office and Professional Employee’s Intntl Union[7] , where a website created by a striking union was accused of passing of on the reputation of the employing company. If initial interest confusion is established, the second branch of passing off would be determined, which is to say that there would be confusion due to the second restaurant appearing to the outset to be a Cactus Club. The “test person” for this confusion is a hurried, casual consumer.[8] Hungry people tend to pay a little less attention and as such occurrences of confusion may be higher!
The final element for a successful claim under the tort of passing off is damages. Damages could be made to the chain’s reputation if the consumer has a poor experience at the secondary restaurant. Under A G Spalding and Brothers v A W Gamage Ltd[9], it was recognized that consumers who have one bad purchasing experience may never use that company’s product again. Damages could be to the chain’s profits if someone seeking Cactus Club wanders into the secondary restaurant. Under Ray Plastics Ltd v Dustbane Products[10],it was held that damages can include loss of products in this nature.
Remedies that Cactus Club could seek if another restaurant was using the yellow umbrellas to pass off on their reputation could include damages, disgorgement, injunctions, or wares. This is to say the other restaurant would likely have to get some different coloured umbrellas!
This would not be the first claim of passing off by a company in the restaurant industry. The Mr. Submarine company sued Amandista Investments in an effort to prevent them from using the trademark of “Mr. Sub’s and Pizza” as it was held by the plaintiff that the similarity of the name and appearance of the name were confusing.[11] “Mr. Submarine” was displayed in CooperBlock writing and primarily serviced walk in customers. “Mr. Subs and Pizza” was in hot dog lettering and primarily was a delivery service. The court held that while the names had some similarities, there was not enough overlap to establish a confusion claim, especially because the fonts, font sizes, and bolded words differed so greatly.[12] This claim failed due to lack of confusion, and infers that the similarities between two restaurants with yellow umbrellas would actually have to be pretty striking to yield a successful claim.
This is not the only evidence of these types of claims in the service industry. Fox restaurant made a similar claim against 43 North Restaurant Group, claiming that they had copied the name and concept of the plaintiff’s restaurants.[13] This case is significant for this article as the court did allow that companies in the service industry can in fact trade on the goodwill of another’s restaurant’s appearance including its “theme or concept, is capable of attracting intellectual property protection.”[14] This claim failed because of deficiencies in the claim, but concludes that significant copying could result in a service industry passing off claim. Summarily, while the yellow umbrellas are not indicative of a open-and-shut passing off case, they could be the jumping off point for one.
[1] Trademark Act s.2
[2] Mattel Inc v 38947207 Canada Inc. [2006] SCC 22
[3] [1992] 3 SCR 120
[4] Ciba-Geigy
[5] 174 F.3d 1036 (9th Cir. 1999)
[6] BCAA et al v. Office and Professional Employee’s Int. Union et al. [2001] BCSC 156 [BCAA]
[7] (2001) 10 CPR (4th) 423
[8] Mattel [56]
[9] (1915) 32 RPC 273
[10] [1994] OAC 74
[11] Mr. Submarine Ltd. v Amandista Investments (Ltd.) [1986] 6 F.T.R. 189 (TD) [Mr. Submarine]
[12] Mr. Submarine [20]
[13] Fox Restaurant Concepts LLC v 43 North Restaurant Group Inc. 2022 FC 1149 (CanLII), <https://canlii.ca/t/jr6r3>, retrieved on 2024-04-20 [Fox Restaurant]
[14] Fox Restaurant [44]
Copyright & Social Media
Communications Law