Marlboro Canada Limited v. Philip Morris Products S.A., 2012 FCA 201 (Justice Pelletier; Justice Létourneau; Justice Gauthier)

Summary – In a unique set of facts, the Federal Court of Appeal held that while Philip Morris’ selling of a no-name product in Canada in a package incorporating the well-known design elements of its U.S. MARLBORO brand packaging infringed Imperial Tobacco’s registered Canadian trade-mark MARLBORO.

Background - Philip Morris is the leading cigarette manufacturer in the United States with “globally recognized cigarette brands”[1], including the brand, MARLBORO.  “[By] 1972, Marlboro cigarettes had become the most popular world-wide”.  Furthermore, by 1992, Financial World ranked MARLBORO the world’s number 1 most valuable brand with a market worth of 32 billion.[2]

A representative Philip Morris U.S. trade-mark registration and packaging is reproduced below.

Click here to view pictures.

Imagine now the fantastic scenario where in Canada, the trade-mark MARLBORO is not owned by Philip Morris but rather by a non-related company, Imperial Tobacco Canada Limited (Imperial) – due to an acquisition years ago!  This situation has led to unsuccessful attempts by Philip Morris to challenge Imperial’s entitlement to the mark.

During this time:

  1. Imperial owned Canadian trade-mark registration number TMDA55988 MARLBORO, used in association with various packaging designs including one which displays a maple leaf and the word Canadian in conjunction with the brand Marlboro;
  2. Philip Morris owned:
  • registered marks in Canada on a “roof top” design for cigarettes (see examples below):

Click here to see examples.  

  • the trade-marks MATADOR and (click here to see picture) in Canada (registration no’s. TMA376541 and TMA111226)
  • sold MATADOR brand cigarettes in Canada in limited quantities together with its “roof top” design.

In 2006, in a Canadian market entry which gave new meaning to the term “plain packaging”, Philip Morris launched cigarettes in packaging bearing the “roof top” design and a crest, but no word mark.  The principle display panel included the well-known design elements of Philip Morris’ MARLBORO trade-mark as used around the world, but no name brand.

This was the first time anywhere in the world where a manufacturer launched a cigarette product with no brand name.

The Philip Morris packaging also bore the legends, “World Famous Imported Blend” and “Come to Where the Flavour Is”.

Analysis - This product introduction provoked Imperial to sue for infringement on the theory that the no name packaging conveyed the idea of MARLBORO.  Philip Morris in turn, challenged the validity of Imperial’s MARLBORO registration on the basis of non-distinctiveness and alleged copyright infringement in its U.S. MARLBORO brand packaging.

At trial[4], neither party prevailed.  Imperial lost in part because Philip Morris never used the brand “Marlboro” on the packaging notwithstanding that an appreciable number of retailers in Canada in the present “dark market” (where retailers cannot legally expose tobacco products to the public) would hand over “rooftop” cigarettes to customers asking for MARLBORO.

Philip Morris lost because the Judge said the non-distinctive argument had already been determined in a 1987 decision, and also found insufficient similarities between the respective parties packaging to validate a copyright infringement claim.

On appeal, Philip Morris was again unsuccessful; however, the Court of Appeal found favour with Imperial Tobacco’s argument that Philip Morris’ new packaging was marketed to cause confusion.

The Court accepted that there could be a mental association between the roof top design and the brand Marlboro, given the combination of elements used by Philip Morris on its packaging. In other words, there were enough clues on the packaging to link the no name brand to Marlboro in the mind of the mythical purchaser.  Thus, “[the] combination on the no name packaging was found to be confusing”.

An appeal to the Supreme Court of Canada should not be unexpected.  The time is still open for Philip Morris to seek leave.

Practice Point - It is interesting that Philip Morris has trade-mark registrations in Canada for its roof top design yet these were found to be insufficient as a defence to infringement.

Everything about this case is clever, from the marketing initiative to the arguments before the court.  What is particularly noteworthy is that the respective companies’ packaging bore no resemblance to the other; the mark Marlboro was never visually represented to consumers by Philip Morris on its packaging, yet it was apparent that consumers were familiar with the Philip Morris brand largely based upon prior exposure outside Canada.  As a result, Canadian trade-mark owners may be asking themselves the question – Does this give hope for Canada recognizing fame more broadly than it currently does?