Apparently, Captain Morgan has not found imitation to be the sincerest form of flattery and in a swashbuckling face-off, has forced Admiral Nelson to retreat from the liquor store shelves.

A Federal Court decision rendered on June 12, 2017 found that the ADMIRAL NELSON brand of rum featuring a fanciful depiction of Vice Admiral Horatio Lord Nelson on each variety infringes on a family of CAPTAIN MORGAN trade-marks containing a fanciful depiction of Sir Henry Morgan, a 17th century privateer. Diageo Canada Inc., a subsidiary of London-based Diageo plc, owns the CAPTAIN MORGAN trademarks and brought the action in 2014 against Heaven Hill Distillers Inc., owner since 2011 of the ADMIRAL NELSON brand of rum.

A determining issue in this case was trade dress, which refers to characteristics of the visual appearance or overall image of packaging and products. Diageo was of the opinion that “Heaven Hill’s use of blatantly confusing trade dress, including blatantly confusing historical character, in connection with the sales of the ADMIRAL NELSON rum brand is clearly intended to mimic the CAPTAIN MORGAN brand to trade upon the brand’s goodwill and create consumer confusion”, whereas Heaven Hill claimed that Diageo had brought the action in an attempt to limit and stifle competition with CAPTAIN MORGAN rum products in the Canadian market.

While the Court found there was little scope for confusion between the wording ADMIRAL NELSON’S and CAPTAIN MORGAN when spoken, a likelihood of visual confusion between the fanciful depictions of an historical naval figure wearing a nautical uniform with buttons and a cape as represented by each of the ADMIRAL NELSON’S and CAPTAIN MORGAN characters was considered to exist. The Court concluded there would be a likelihood of confusion from the perspective of the somewhat hurried consumer who would not pause to examine the points of similarity or difference between the marks. This “illusion of sameness” would lead to confusion as to source.

In Canada, unregistered trade dresses can be protected at common law through the tort of passing off. In order to prove their case, Diageo demonstrated the existence of goodwill in the trade dress through extensive sales, promotion, marketing and advertising over decades of use, showing the acquired fame of the CAPTAIN MORGAN character. The ADMIRAL NELSON character had few visible features identifiable with its namesake, the degree of resemblance to the CAPTAIN MORGAN character being much higher. Diageo successfully proved that Heaven Hill had passed off its ADMIRAL NELSON’S rum products as those of Diageo’s CAPTAIN MORGAN rum products so as to cause confusion between the brands.

As a result, Mr. Justice Boswell’s judgment bars further sales in Canada of the full range of Heaven Hill rum products with the Admiral Nelson character including any other bottle that could be confused with CAPTAIN MORGAN rum. All bottles of the ADMIRAL NELSON’S brand in Canada are to be destroyed and Heaven Hill will be liable for damages, the amount not yet determined. The decision, Diageo Canada Inc v Heaven Hill Distilleries, Inc, 2017 FC 571, can be viewed at: http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/231929/index.do

It will be interesting to follow the development of trade dress issues in Canada given the upcoming legislative changes to the Trade-marks Act, which are anticipated to broaden trade dress protection when brought into force. Stay tuned!