Since I spent most of my legal education in Switzerland and was now able to learn about some Canadian law approaches during my exchange term, I would like to turn the tables and, as my final project, familiarize you with a topic of Swiss IP law based on some of the cases we have just touched on in class (and could be looked up in the casebook as well).
Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 [Masterpiece] is suitable for a comparison to Swiss law as it illustrates a systemic difference between our two legal systems in intellectual property, in particular trademark law.
Masterpiece
This case is usually raised to support BINNIE J.’s ruling in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23 [Veuve Clicquot], when he considered the applicable test for confusion under the Trademarks Act, RSC 1985, c T-13, at para. 20 as “the test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry (…).”[1] However, the case also nicely illustrates how Canadian trademark law deals with a newly registered trademark that competes with an existing unregistered trademark.[2]
Masterpiece involves two companies that are both active in the retirement residence industry, but in different provinces. Masterpiece Inc. has been operating in Alberta for several years using various trademarks, such as “Masterpiece the Art of Living”, without registering any of them. Meanwhile, Alavida Lifestyles Inc. (“Alavida”) enters the retirement residence industry in Ontario and consequently registers the trademark “Masterpiece Living”. Apparently, Masterpiece Inc. (n.b. then also started to use the identical registered mark) argued that the registration was invalid and should be expunged because Alavida’s registration would confuse consumers.[3]
In the decision, written by ROTHSTEIN J., the first reference was to common law, where it was use of a trademark that conferred the exclusive right.[4] He then referred to several provision of the Trademarks Act, in particular s 40(2), which stated that an applicant for registration must file a declaration demonstrating that the proposed trademark has been in fact in use.[5]
The Supreme Court ultimately ruled that Alavida was not entitled to register its trademark “Masterpiece Living” because Masterpiece Inc. had preceded Alavida in its proposed use, and ordered the Registrar to expunge the registration.[6] Canadian trademark law is therefore based on a system of first use.[7]
Trade Mark Protection Act
In Swiss trademark law, the corresponding issue is addressed in the Federal Trade Mark Protection Act (TmPA), SR (Systematische Rechtssammlung [systematic collection of law]) 1992, 232.11, at art 6: “A trade mark right belongs to the person who first files the trade mark”. In Switzerland, a “first-to-register” system applies[8]; the priority of a trademark right should be clearly evident from the register and not depend on any earlier use of another sign.[9] Priority therefore lies with the party who registered the trademark first.[10]
Masterpiece would be decided the other way around; as a rule, a Swiss court would have to protect Alvida’s trademark because it was registered first. While the Canadian law is more in line with actual events (“first come, first served”), the Swiss approach offers legal certainty because in most cases, the entries in the public register can be trusted.[11]
However, if the interests of the users and registrants involved are to be taken into account in a balanced way, a mixture of the two systems cannot be avoided.[12] In Switzerland, for example, “a trade mark that is well known (…)” prevents the registration of similar or identical signs (without being registered), which is – exceptionally – a first use approach.[13] In other words, the Swiss first-to-register system is consequently “broken” in certain places and does not apply exclusively.
Particularly well protected in Switzerland are so-called “famous trademarks” with TmPA art 15 at para 1: “The proprietor of a famous trade mark may prohibit others from using his trade mark for any type of goods or services (…)”. If one were to apply this Swiss provision to the Canadian decision Veuve Clicquot – which together with Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22 [Mattel] represents the Supreme Court of Canada’s approach to famous trademarks[14] – one can assume that under Swiss law (at least) Veuve Clicquot would have been decided differently – in favor of appelling Veuve Clicquot Ponsardin.[15] Veuve Clicquot involved women’s clothing stores whose trade names, “Les Boutiques Cliquot” and “Cliquot”, were protected by the Supreme Court of Canada on the grounds that consumers seeing those names would not make the connection to the appellant, the famous champagne house.[16] By contrast, the Swiss TmPA at art 15 para 1 seems to be more geared towars protecting famous trademarks from possible exploitation.
Comparison
Im my opinion, these rules, both the priority of registration and the handling of well-known and famous trademarks, lead to the impression that established market participants, large companies or corporations, in Switzerland receive preferential treatment under trademark law. A company that already owns a registered trademark is better protected in its business activities than a young, innovative company that is still looking for its niche. With greater public “fame”, protection even extends to other business areas.[17] In Canada, meanwhile, large companies as owner of famous trademarks were rarely protected from other businesses using similar tradenames.[18] It seems that the preference for established companies is less pronounced in Canadian law. However, all Canadian businesses must research the marketplace, particularly their competitors, to ensure that their chosen mark is not confusing with any existing trademarks.[19] On the other hand, this should be easier for an established company – comparing the resources available – than for a start-up, for example.
However, Canada has also somewhat weakened its system of first use: With the 2014 amendments to the Trademarks Act, s 40(2), among others, was revised, so that now filing a declaration of use within six months of registration is no longer required.[20] Critics argue that by removing use as a prerequisite to registration, stockpiling of trademarks by those who may have no clear plans to use them will increase.[21]Here, too, the development of the law seems to be moving in the direction of strengthening registration.
In conclusion, it can be said that both Canada and Switzerland are likely to strive for a middle way between the two systems, first use and first registration, in the long term – at least a conformity here!
(Featured image created with canva.com)
[1] Cf. e.g. I. Tsui, “Masterpiece Inc v Alavida Lifestyles Inc: Much Confusion About Trademark Registration” (28 December 2014) https://canliiconnects.org/en/commentaires/35028 at para 10.
[2] See Masterpiece at paras 34-65.
[3] Id. at paras 1-13.
[4] Cf. Partlo v. Todd, (1888) 17 SCR 196 at p 200.
[5] Masterpiece at paras 35-38.
[6] Id. at para 113.
[7] Hagen et al. at p 442; P. Fehlbaum, “L’usage et la notoriété d’une marque au Canada et en Suisse” (2013) 195-211 sic! at p 195.
[8] Ibid.
[9] C. Gasser, «Vorbemerkungen Art. 5-9» [preliminary remarks arts 5-9] in M. Noth, G. Bühler & F. Thouvenin, eds, Markenschutzgesetz (MSchG) [Trade Mark Protection Act (TmPA)], 2nd ed (Stämpfli, 2017) at para 2.
[10] C. Gasser, «Art. 6» [art 6] in M. Noth, G. Bühler & F. Thouvenin at para 2.
[11] Cf. C. Gasser, preliminary remarks arts 5-9 at para 2.
[12] Cf. ibid.
[13] TmPA at art 3 para 2 cl a; cf. Gasser, art 6 at para 3.
[14] Hagen et al. at p 527.
[15] Cf. Fehlbaum at pp 207-208; Mattel, however, allowing a restaurant chain called “Barbie’s” (like the famous doll) to register its tradename, would probably not be decided differently in Switzerland, as “Barbie” as common contraction of Barbara (cf. also Mattel at para 3) does not seem to deserve the same protection as a distinctive sign like “Veuve Clicquot”, Fehlbaum at p 207.
[16] Veuve Clicquot esp. at paras 3-5, 49 & 56-61.
[17] Cf. ATF [Arrêts du Tribunal fédéral] 130 III 748 (“Nestlé”) and ATF 124 III 277 (“Nike”).
[18] See Mattel at para 92 and Veuve Clicquot at para 70.
[19] Hagen et al. at p 442.
[20] Ibid.; cf. now s 45 (1) Trademark Act instead.
[21] Hagen et al. at p 442.
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