The Federal Court of Appeal in Canada recently held that a no-name cigarette package depicting registered design trade-marks, but no word mark, was confusingly similar to the word mark MARLBORO which was registered for use in association with cigarettes. The case involved unique facts, including that Canada is a “dark market” for cigarettes, meaning that tobacco products cannot be displayed in retail stores. The Court noted that this “appears to be the first time that a cigarette product has been sold in Canada (and, quite possibly, in the world) without any brand name appearing on the package”.

Background

The parties, Marlboro Canada Limited and Imperial Tobacco Canada Limited (“Imperial Tobacco”) and Philip Morris Products S.A. and Rothmans, Benson & Hedges Inc. (“Philip Morris”) have a long history of trade-mark litigation.

Philip Morris sells the top-selling cigarette product in the world in association with its MARLBORO trade-mark. In Canada, however, it does not own the rights to the MARLBORO mark and does not use that mark. The Canadian trade-mark registration for MARLBORO is owned by Imperial Tobacco, as the rights to that mark in Canada were sold to a predecessor in title to Imperial Tobacco (by a predecessor in title to Philip Morris) in 1930. The MARLBORO mark was registered in Canada in 1932 and has been continuously used since then by Imperial Tobacco and its predecessors in title.

Philip Morris has, since the late 1950’s, unsuccessfully attempted to reacquire the MARLBORO mark in Canada, through discussions to acquire the mark as well as through expungement proceedings.  Philip Morris sells its product in a package referred to as “Rooftop” due to its distinctive red rooftop design. Philip Morris owns the following Canadian registrations for the ROOFTOP Design which are based on use since 1958:

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Outside of Canada, the Philip Morris Rooftop package always depicted the word MARLBORO and was used in association with “American blend” cigarettes. In Canada, Philip Morris used all of the same elements on its Rooftop package, except for the MARLBORO trade-mark. This was replaced by the trade-mark MATADOR and, for a brief time, MAVERICK. The Rooftop package was used in Canada only in association with “Virginia blend” cigarettes.

After obtaining the following additional ROOFTOP Design registration in Canada in 2006, Philip Morris launched its no-name product in Canada.

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Imperial Tobacco responded to the no-name Rooftop product launch in Canada with a demand letter to Philip Morris, alleging that the new brand infringes its trade-mark registration for MARLBORO.  Philip Morris commenced an action seeking a declaration that the sale of Rooftop cigarettes in Canada does not contravene any rights of Imperial Tobacco in its MARLBORO registration. Imperial Tobacco responded with a counterclaim alleging infringement.

The no-name Rooftop package launched in 2006 included, for the first time in Canada, the Philip Morris crest and was used in association with “American blend” cigarettes. It also referred, for the first time in Canada, to “WORLD FAMOUS IMPORTED BLEND”. In addition, the label also included the most popular design elements and tagline associated around the world with Philip Morris’ MARLBORO trade-marks that had been used for several decades in Canada, “COME TO WHERE THE FLAVOUR IS”.

The Federal Court of Appeal held that Philip Morris’s no-name Rooftop packaging would lead to confusion among consumers in light of the known nature of its MARLBORO products outside of Canada and the similarity of that packaging to the no-name Rooftop packaging. Other factors leading to the conclusion that there would be confusion were the reference to WORLD FAMOUS IMPORTED BLEND, the fact that consumers could not see the product packaging due to the dark market and evidence that a number of consumers referred to the no-name product as “Marlboro”.

Remedy

The Federal Court of Appeal declared that the no-name Rooftop packaging infringed the rights of Imperial Tobacco in the registered tade-mark MARLBORO and ordered:

  • that Philip Morris be enjoined from using the no-name Rooftop packaging in Canada; and
  • that it deliver up or destroy all of the no-name Rooftop packaging and all advertising or other material that would offend the injunction granted.

Leave to appeal the decision to the Supreme Court of Canada has been requested.

Conclusion

Registration of the ROOFTOP Design and the mark “COME TO WHERE THE FLAVOR IS” did not constitute a defence to the claim of infringement. This novel decision based on a unique set of facts appears to broaden the potential scope of protection available to trade-mark registrants as it allows for an infringement claim based not on use of a confusingly similar word mark, but use of product packaging incorporating numerous elements that together result in confusion with a word mark.