TRADE‑MARKS
Infringement
Since 1987 A&W selling “Chicken Grill” sandwich— Trade‑mark for product registered in 1988—McDonald’s selling “Chicken McGrill’ sandwich since 2001—A&W alleges trade‑mark infringement, says mark confusingly similar, defendant preyed upon marketplace goodwill— Defendant arguing A&W’s mark invalid as lacking distinctiveness—A&W’s “Chicken Grill” sells for $3.89, generates $8‑10 million in revenue per year—McDonald’s product sells for $3.49, generates $30 million per year— Prevailing view of Canadian case law that Trade‑marks Act, s. 19 prohibits only use of identical mark: Mr. Submarine Ltd. v. Amandista Investments Ltd., [1988] 3 F.C. 91 (C.A.)—Nor was there any clear support in English cases for argument use of mark encompassing another’s trade‑mark amounts to infringement—Few English cases, courts holding “identical” could extend to situations where defendant used another’s mark in combination with other words—In one such case, English Court of Appeal questioned proposition here urged for A&W, noted issue soon to be addressed by European Court of Justice—That Court held no infringement unless two elements compared same in all respects—Evidence not demonstrating prefix “Mc” so insignificant would go unnoticed by average consumer—Principal issue whether defendant’s use of “Chicken McGrill” causing confusion with A&W’s mark, contrary to Act, s. 20(1)—A&W submitting case of “reverse confusion” in that customers caused to suppose plaintiff’s goods originating with defendant—While novel argument in Canadian law, arguing reverse confusion implicitly recognized by Act, s. 6—Concept recognized in American law whereunder, according to law text author J.T. McCarthy, considered highly fact‑specific situation, arising where junior user with greater financial resources saturates market with advertising of confusingly similar mark thereby overwhelming marketplace power, value of senior user’s mark—But leading American case A&H Sportswear Co., Inc. v. Victoria’s Secret Stores, Inc., 167 F. Supp. 2d 770 (E.D. Pa. 2001) not insisting on proof of factual scenario described by McCarthy—Court explaining that, as with more typical direct confusion claim, likelihood of confusion key—Court referring to 10 factors to be considered in any confusion case, all of which to be weighed since no single one dispositive—Canadian Act sufficiently broad to cover both forward and reverse confusion, both being actionable and same criteria being applicable—No necessity for reliance on American legislation, case law or text authority—Evidence of actual confusion on part of A&W customers very weak—Survey evidence suggesting McDonald’s more likely than any other restaurant to be misperceived as “Chicken Grill” source but defendant’s expert disputed reasoning—Survey evidence not demonstra-ting confusion—Evidence revealed vast majority not associating “Chicken Grill’ with any restaurant—Statistical evidence not proving confusion—Conflicting linguistic expert evidence suggesting “Mc” prefix meaningful, significantly reducing likelihood of confusion as to product source— A&W’s “Chicken Grill’ mark neither well‑known nor associated with plaintiff while “Chicken McGrill” strongly associated with McDonald’s—Wares virtually identical, sold in environment affording purchasers little opportunity for reflection on their choices—Substantial advertising needed to establish brand awareness for such products and plaintiff not marketing its product aggressively since 1997—Defendant spent $1.2 million advertising “Chicken McGrill” in 2002— Considering nature of trade, most unlikely purchaser of “Chicken Grill” would think it came from McDonald’s even though product’s name somewhat similar to McDonald’s sandwich—Competitive nature of industry militating against potential for either forward or reverse confusion—Use of “Mc” prefix minimized likelihood of forward confusion—As for reverse confusion, nothing inherent in words “chicken”, “grill” pointing to defendant—Plaintiff’s reverse confusion allegation not established—As to depreciation of goodwill, little evidence consumers making connection between two marks or that plaintiff’s reputation damaged—Nor did claim based on loss of control of registered trade‑mark arise from these circumstances—Plaintiff free to use its mark as it sees fit; defendant not using A&W’s mark—No basis for claim of loss of goodwill—McDonald’s counterclaim, that “Chicken Grill” invalid mark for lack of distinctiveness rejected—That “Chicken Grill’ neither widely known nor readily associated with A&W not sufficient for Act, s. 18(1)(b) purposes—Not showing A&W’s mark so devoid of distinctiveness that it failed to distinguish A&W sandwich from wares of other restaurants—Trade‑marks Act, R.S.C., 1985, c. T‑13, ss. 6, 18(1)(b), 20(1) (as am. by S.C. 1994, c. 47, s. 196).
A&W Food Services of Canada Inc. v. McDonald’s Restaurants of Canada Ltd. (T‑2023‑01, 2005 FC 406, O’Reilly J., judgment dated 23/3/05, 43 pp.)