Case No. 36 Haddock and Others v Board of Inland Revenue

The plaintiff tried to reduce his taxes by arguing that arts & literature should be entitled to the same benefits that trade & commerce already enjoyed for “income-tax purposes under the heading of (a) Expenses and (b) Wear and Tear of Machinery and Plant.”[1]

The court agreed on the first issue of Expenses since, “The manufacturer of soap, who makes and sells soap to the value of ten thousand pounds, at a cost to himself of eight thousand pounds, is taxed upon two thousand pounds. If there is no profit there is (in theory) no tax.”[2] This led the court to oppose the injustice whereby, “The position of the author, artist, or composer is very different. The author is taxed, practically speaking, not on profits but on receipts, on almost everything that comes into the till. … [The author] cannot write about nothing (though one or two come very near to it). The whole of life is his raw material and, like other raw material, it has to be paid for.”[3] As a result, the court answered the questions of, “[how] can a man write about Monte Carlo or Cowes unless he goes to Monte Carlo or Cowes? How is he to study and depict the gilded life of Society without constant visits to the Saveloy Grill Room, to Covent Garden, to the Riviera, and other places where Society is to be found?”[4] by pointing out that “it is not denied that if a soap-manufacturer were compelled for business reasons to visit Cowes or Monte Carlo he would be permitted to deduct the necessary expenses of the expedition when calculating his taxable income. I see no reason why [an author] should not do the same.”[5]

The court also agreed on the second issue of Wear and Tear of Machinery and Plant since, “The author’s machinery and plant are his brain and his physique, his fund of inventiveness, his creative powers. These are not inexhaustible; they are seldom rested (for the reasons given above); the strain upon them increases as the years go by, and in some cases, I understand is aggravated by late hours and dissipation. If it is proper for the soap-manufacturer to be relieved in respect of the wear and tear of his machinery and the renewal thereof (which money can easily buy), how much more consideration is owed to the delicate and irreplaceable mechanism of the writer!”[6]

After righting the unjust taxation of arts & literature vis-à-vis trade & commerce, the court did not rest but continued with a lengthy justification for its decision: “There seems to be a notion abroad (especially in Parliament, where every erroneous notion is carefully incubated) that the author deserves less generous treatment than the soap-manufacturer, on the ground that the latter is an employer of labour. … The authors, writers, and composers are in a sense the biggest employers in the country, for they are the only original creators of employment. Their books, their articles, their music must be typed and printed and bound and distributed, performed upon the stage, the wireless, the gramophone, and the screen. The publishers, printers, compositors, bookbinders, and booksellers, the actors, musicians, singers, and stagehands – nay, the very newspaper proprietors and their enormous staffs, owe their employment, their earnings, and their profits to the creative mind and technical skill of the writer, since without him their occupation would be nothing and their machines be silent. He is the producer and they an army of middlemen; he is the true creator of wealth, and they, if I may employ the genial language of a certain political party, are but parasites upon his brains and labour. Yet Parliament, in its recent Derating Act, designed to encourage and increase employment, extends the privileges of that Act to the printer and not to the author who finds employment for that printer, ‘derates’ the ‘factory’ section of a newspaper office, but not the editorial side, without which the factory would be idle and valueless. My Lord, how characteristically crass of Parliament!”[7]

Case No. 38 Rex v Cochran

Another plaintiff also protested the differential taxation of arts & literature vis-à-vis trade & commerce by refusing to pay the Entertainments Duty on theatre productions such as “a religious mime called The Miracle, an historical tragedy by the poet Shakespeare, and a comic opera written by Mr. Albert Haddock.”[8]

A most sympathetic jury agreed with the plaintiff after receiving jury instructions that sounded more like a summation of history: “The public memory is short, and the historical knowledge of many of us is defective; yet it is surprising that the newspapers of our land do not give more attention to the Entertainments Duty and more support to those who agitate for its remission or reduction. For in essence it is dangerously similar to those Taxes on Knowledge which were remitted after a protracted struggle only eighty years ago: taxes on the communication of minds, taxes on the distribution of information and ideas, taxes inimical to freedom of expression, and taxes levied with especial harshness upon the Newspaper Press.”[9]

The court generously paired its history lesson with a civic lesson: “Therefore they should ever be on their guard against any encroachments upon liberty of expression; and therefore, I repeat, it is strange if they do not show an active and fraternal interest in the struggles of the theatre. For, though they may be surprised and even indignant to hear it, there is, in the account of principle, no real distinction between the two institutions. Both are channels for the communications of minds, for the distribution and exchange of thoughts, ideas, and information. A tax upon either is a tax upon knowledge and literature.”[10]

It is no surprise that the jury agreed with the plaintiff, especially after hearing a civic warning from the court that: “The tax is levied not upon profits but upon receipts, and in that respect is almost unique. It is levied not upon gamblers, bookmakers, usurers, racecourse touts, idlers, thieves, vagabonds, card-players, misers, or moneylenders, not upon those who sit in their homes or hoard their money to the prejudice of trade and employment, not upon those who devote their time and energy to the suppression of people’s pleasure, but upon respectable, good-hearted citizens who spread happiness, instruction, and culture among their fellows and maintain many thousands in employment, either by providing or attending (and thus supporting) what are loosely called places of public entertainment. When I consider this tax I am forced to the conclusion that in the opinion of the Legislature the business of entertainment has a criminal character, or at least is so offensive that public policy demands its discouragement and gradual suppression.”[11]

Case No. 52 MacIntosh and Others vs Haddock, Haddock, Haddock, Haddock, and Haddock, Ltd

This last example of how to reduce taxes on arts & literature illustrated how the corporate system had been subsidizing trade & commerce. Mr. Haddock was a writer who “following the example of other and more prosperous writers, he turned himself into a limited company … [in the same manner as] a bootmaker turned himself into a company … [thereby taking] legitimate advantage of the laws of the land in order to ease the burden of taxation at certain points where admittedly it bears with undue severity upon the better class of author.”[12]

The court easily accepted that a corporation can write books just as it can make shoes: “A corporation has the same powers of contracting as a natural person, and if it can write a good contract why not a good poem or book? It can be sued for libel and summoned before the magistrates to answer for an obscene or blasphemous publication; so there is no danger there.”[13]

The court just as easily – and most eagerly – accepted that a corporation can own copyrighted works in perpetuity, since literary works do not enter the public domain until fifty years after their author’s death and a corporation never dies (unless it is dissolved). In doing so, the court rejected the policy argument that “by this arrangement those writers who are not corporations are placed at a disadvantage because they cannot secure such favourable terms; and together with certain publishers and others who make a cheap and profitable business of the exploitation of non-copyright works, they contend that in justice and equity the company should be dissolved.”[14] Instead, the court advised such writers to incorporate in order to join Mr. Haddock in dodging the Copyright Act![15]

A.P. Herbert’s misleading cases continue to entertain because such fiction still has much to reveal about judicial prejudices and to teach about legal processes. Perhaps this judicial satirist’s legacy will be to inspire intellectual property students to convince tax collectors this year that arts & literature can be and should be subsidized even more.

Shen Goh is an instructor and PhD candidate at Osgoode Hall Law School.

[1] AP Herbert, Uncommon Law – Being 66 Misleading Cases revised and collected in one volume (Great Britain: Redwood Burn Limited, 1979) 42 at 231.

[2] Ibid at 231-232.

[3] Ibid at 232.

[4] Ibid at 233.

[5] Supra.

[6] Ibid at 234.

[7] Ibid at 234-235.

[8] Ibid at 243.

[9] Ibid at 243-244.

[10] Ibid at 246.

[11] Ibid at 247-248.

[12] Ibid at 327.

[13] Ibid at 328.

[14] Ibid at 330.

[15] Ibid at 330-331.

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After graduating with a law degree from Oxford, A.P. Herbert decided to serve the British people by making law as a Member of Parliament instead of practising it as a lawyer. Nevertheless, he had much to reveal about judicial prejudices and to teach about legal processes in that he authored in , and were televised by the

dealt with the question of when literary criticism became defamatory. As summarized by the court, “The facts are simple enough. The defendant, Mrs. Tulip, in reviewing a recent work of Miss Clelia Trott’s, a book called Midnight, employed the following words: ‘It is no good, Miss Trott. All your murders and detectives, your vamps and mysteries, do not deceive us, charming though they are. The truth is, Miss Trott, you are a bit of a highbrow.’ Miss Clelia Trott, so far from being disarmed by the sprightly and almost complimentary manner of review, has brought an action for defamation, complaining particularly of the word ‘highbrow’, which is said to have prejudiced her professionally as a writer of disturbing narratives for railway reading or, as they are sometimes called, it appears, ‘best-sellers’.”[1] The court found for the plaintiff because it agreed that being characterized as highbrow was “so revolting that no lady or gentleman of right feeling could well submit to be named by their name without some effort to secure such protection as the law affords.”[2]

Case No. 11 Suet v Haddock was equally unforgiving in finding that commercial criticism can also be defamation. The jury was instructed as follows, “Gentlemen, in this case the plaintiff is a manufacturer, and the defendant, Mr. Haddock is among other things, an author, which fact should alone dispose you in the plaintiff’s favour; for, while the lifeblood of our country is its trade and commerce, we do not, fortunately, depend upon our literature for anything that matters.[3] … The plaintiff manufactures, among other things, a patent medicine called SINKO, which is widely advertised as having the power to remove or remedy ‘That Sinking Feeling’. Now what the defendant wrote about SINKO was brief and blunt: ‘SINKO does not remove That Sinking Feeling, for I have tried it.’ The plaintiff says that these words are defamatory and claims damages. The defendant says that the words are true, or in the alternative that they are in the nature of fair comment upon a matter of public interest.”[4] It is interesting to note that the jury in this case was instructed to award damages of £10,000 pounds for commercial criticism, whereas the previous case only awarded damages of ¼ of a penny for literary criticism. Was this the natural result of the bias favouring trade & commerce over arts & literature? Or could it also be due to another bias arising from the fact that this plaintiff was a man while the previous plaintiff was a woman?

Case No. 35 Bacon v Egg; Kidney v Egg may shed some light on the above questions. Mr. Bacon wrote a play entitled Between Ourselves. Mr. Kidney is the theatre manager who staged it. Mr. Egg is the dramatic critic who published a negative review of it: “Dialogue, deplorable; plot, puerile; characterization, childish … The fact is, Mr. Bacon does not begin to know his business; and after this production we begin to doubt whether Mr. Kidney knows his.”[5] The jury awarded damages of £10,000 pounds for this dramatic criticism[6] – the same amount a man had received for commercial criticism. Perhaps we should not hasten to compare these cases through critical feminist perspectives; after all, there is an obvious difference between characterizing a woman as “highbrow”[7] and characterizing a man as “incompetent”.[8]

As entertaining () as his misleading cases were, A.P. Herbert always remembered that they were fiction. The same cannot be said of his readers. reported Case No. 32 Board of Inland Revenue v Haddock as a real case with the heading, “A Check Can Be Written On A Cow.”[9] reported Case No. 5 Rex v Haddock to illustrate how no American court could violate “the general maxim that people cannot be punished for violating laws that have not been announced and defined”[10] by quoting the following paragraph from the offending British opinion: “‘It is a principle of English law’ said the Court of Criminal Appeal, ‘that a person who appears in a police court has done something undesirable, and citizens who take it upon themselves etc., etc., (exactly as above) … It is not for me to say what offence the appellant has committed, but I am satisfied that he has committed some offence for which he has been most properly punished.’”[11] That legal publication also indexed the fake reference of Rex v Haddock, C.C.A. miscellaneous law, Criminal Law (31) 1927.

Was that entertaining? Or was that dangerous? Just as not all that glitters is gold, not all fake news are equally tongue-in-cheek. If we do not learn about history, we will not learn from it and are doomed to repeat it.

Shen Goh is an instructor and PhD candidate at Osgoode Hall Law School.

[1] AP Herbert, Uncommon Law – Being 66 Misleading Cases revised and collected in one volume (Great Britain: Redwood Burn Limited, 1979) 42 at 43.

[2] Ibid at 52.

[3] Ibid at 66.

[4] Ibid at 68.

[5] Ibid at 224-225.

[6] Ibid at 229.

[7] Although the female’s complaint was that the term ‘highbrow’ prejudiced her professionally, the court ignored the issue completely.

[8] Although the men’s complaint was that “Mr. Egg was not invited to express an opinion at all” (Ibid at 225), the court replaced their baseless complaint with its own lengthy discussion on how an honest opinion may still be professional defamation (and decided within that discussion that arts & literature should be equal to trade & commerce): “For example, it is defamatory to use expressions reflecting upon a man in the way of his trade, profession, or calling. The law of this businesslike land is jealous to protect our professional reputations; and spoken words reflection upon them (by a special exception to the general law of slander) are actionable per se, without proof of special damage. To say of a doctor that he had no knowledge of medicine, of a solicitor that he knew nothing of the law, or of a banker that he did not know his business would without doubt be defamatory, however honestly the opinion was held and however moderately that opinion was expressed. … There cannot be one law of libel for the author and another for the financier. An imputation of profession incapacity or unfitness is as damaging to the one as it is to the other; and each must be entitled to the same remedy at law, unless we are prepared to say that the author is a kind of outlaw, of having a lower status than the solicitor or business man and entitled to a lower standard of justice. Unfortunately this view is very commonly held, and it has been encouraged by the feeble acquiescence or noble disdain of the writing profession; but in this Court it will receive no encouragement. I hold that the author, however loathsome to the ordinary citizen, is in the eyes of the law a professional man; and the newspapers must be as careful what they say about his professional fitness as they would in the case of a surgeon.”

(Ibid at 228-229) [Emphasis added].

[9] Ibid at Introduction.

[10] Supra.

[11] Supra.

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Some students break up the monotony by watching cat videos; I read . Other students forward jokes of the day; I forward quips by Professor David Vaver. Since most intellectual property students focus on copyright or patents, I will share my favourite ten “Vaverisms” on trademarks:

1. Are trademarks intellectual property? Yes. “Trademarks are commonly classified as intellectual property, but there is nothing intellectual about them at all.”[1]

2. What kind of intellectual property? An anomaly. “[T]he Supreme Court of Canada called trademarks, rather unkindly, ‘somewhat of an anomaly in intellectual property law’: unlike patents or copyright, they provide the public with nothing new or expressive, they are just ‘a kind of shortcut to get consumers where they want to go.’ Shortcuts are nonetheless valuable: ask any toll-bridge owner.”[2]

3. Do trademarks protect against unfair competition? No. “[T]he Trademarks Act’s predecessor [was] grandly – if misleadingly – called the Unfair Competition Act.”[3��

4. So, what do they do? Sound good. Sell goods. “Not only does it provide the often visual equivalent of a sound-bite but it actually sells goods.”[4]

5. Does that include protecting personality? Yes. “But there are limits. Celebrities cannot stop children or pets from being named after them, or adults from changing names to the celebrity’s. Elvis Presley eponyms keep his name alive in Canada and elsewhere. Sometimes ingloriously: see the one who, having changed his name to Elvis Presley, sued doubting Thomases, unsuccessfully, for defamation and was ultimately declared a vexatious litigant.[5]  Another in Britain became a violent offender.[6]”[7]

6. Does that include the commercial appropriation of personality? Yes. “Tell lies about them and they will sue for defamation. Tell truths about them and they will sue for breach of confidence or privacy. … Death brings no respite: fame survives the grave.”[8]

7. Can trademarks be registered? Yes. “Before applying to register a trademark, one must first devise one. There are plenty of pitfalls.”[9]

8. How can they be registered? Many ways. “The same entity may therefore, for no logical reason, protect identical symbols thrice over – as a certification mark, an official mark, and a geographical indication of origin – sometimes with a registered trademark to cover remaining features. Just to compound this confusing untidiness, registered or unregistered certification marks that have not become generic are also protectable by passing-off.”[10]

9. Can sounds be registered? If they qualify. “Nor is the sound of a rooster crowing registrable: how can that be represented graphically and clearly? ‘Cock crowing’ will not do as a description because cocks crow differently. Nor is ‘cock-a-doodle-doo’ any better, this onomatopoeia is English, differs from French and other languages, and fools no hen.”[11]

10. So, what usually happens after “getting” trademark rights? Cha-ching! “The rights can, subject to the occasional minor irritation from competition or other general laws, be bought and sold in combination, donated, or used to secure finance. They may usually be split up horizontally and vertically – by territory, time, market, and so on – and dealt with accordingly. The maximum extraction of rents is thus assured.”[12]

11. Bonus Question: Is the above a good thing? Depends on who you ask. “The so-called tragedy of the commons, where a resource is depleted by overuse, can dissolve into a tragedy of the anti-commons, where too many blocking rights lead to under-use.”[13]

It is no wonder that Professor Vaver has as many enthusiastic students [14] as . Nor any wonder that “judges cite him so often. Mr. Justice Roger Hughes has even found out how often: 9 times in the Supreme Court, seven in the Federal Court of Appeal, seven in the Federal Court and 24 in the Provincial Courts (appellate and first instance). And that is only Canada. And only in IP.”[15] And that was all pre-2010. Students and Judges alike will cheer when the invests Prof. Vaver into the Order of Canada during a special ceremony at Rideau Hall on May 12th, 2017.

To read more about Prof. David Vaver's “...leadership in intellectual property law as a scholar and mentor”, click .

U. Shen Goh is a Ph.D. Candidate working under the supervision of Professor David Vaver at Osgoode Hall Law School.  Her research focuses on whether Canadian law is adequately protecting foreign language marks.

[1] David Vaver, Intellectual Property Law: Copyright, Patents, Trademarks, 2nd ed (Toronto: Irwin Law, 2011) at 423 [Vaver].

[2] Ibid at 424.

[3] Ibid at 427.

[4] Ibid at 429.

[5] Presley v Canada (Royal Canadian Mounted Police), [1998] YJ No 139 (SC), later proceedings [2003] YC No 24 (SC).

[6] R v Elvis Aaron Presley (1985), 7 Cr App R (S) 267 (CA).

[7] Vaver, supra note 1 at 437.

[8] Ibid at 439.

[9] Ibid at 444.

[10] Ibid at 458.

[11] Ibid at 461.

[12] Ibid at 558.

[13] Ibid at 559.

[14] Student reviews on range from the gushy “Vaver is a legend when it comes to IP, I would have LOVED to take a course with him!” to the Swifty “Vaver teaches there and I would probably die to take a class with him.”

[15] Robin Jacob, “Foreword” in Catherine Ng, Lionel Bently & Giuseppina D’Agostino, eds, The Common Law of Intellectual Property: Essays in Honour of Professor David Vaver (United Kingdom: Hart Publishing Ltd, 2010) at vi.

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Air Jordan

December 8, 2016 began with newspaper headlines proclaiming: ; ; and .

Although the headlines exaggerate, the newspapers are correct about China’s top court’s decision that Michael Jordan can now claim the Chinese translation for JORDAN (written as 乔 丹 and pronounced as QIAO DAN) as his trademark and exclude others from such use. This decision is astounding for a number of reasons.

First, there is an internationally accepted standard Chinese translation for JORDAN as a country and as a name (written as 约 旦and pronounced as YUE DAN). So why would any court decide that Michael Jordan is identified specifically by the first translation? The decision is based on evidence that the Chinese media has referred specifically to Michael Jordan by the first translation since as early as the 1984 Olympics, . This evidence exposes a weakness in Michael Jordan’s case from a trademark perspective, and that is the fact that the Chinese translation was neither used by Michael Jordan nor used as a trademark. The evidence suggests that the Chinese translation was actually used by the public and used as information. Nevertheless, there is support for China’s top court’s decision that such use can enure to a specific owner in light of the American court decision of Coca-Cola v Busch.[1] The Coca-Cola Company advertised its products in association with the COCA-COLA trademark, which the public abbreviated as COKE. Since The Coca-Cola Company was not using the abbreviation, a competitor started using the abbreviation. The Coca-Cola Company stopped its competitor by persuading an American court that use of the COKE abbreviation by others should enure to it as the owner of the COCA-COLA trademark in order to avoid confusion.

Second, there is nothing distinctive about the name JORDAN. So why would any court decide that the first translation only identifies Michael Jordan and does not also identify anyone and everyone named Jordan? The decision is based on evidence that the Chinese company accused of taking the first translation from Michael Jordan : a NBA silhouette that was amended to reflect Michael Jordan’s physique, the number 23 that used to be on Michael Jordan’s basketball jersey, and the Chinese names of Michael Jordan’s children. This evidence could be dismissed on the basis that none of the registrations relate to trademarks or names actually belonging to Michael Jordan; the trademarks belong to the NBA and the names to his children. Nevertheless, there is support for China’s top court’s decision in light of academic criticism of passing off, the common law forefather of trademark infringement: “why should the court be astute to say that the defendant cannot succeed in doing that which he is straining every nerve to do?”

Third, there is at least a 10-year delay between the Chinese company registering the first Chinese translation in 2000 and Michael Jordan commencing lawsuits in 2012. So why would any court reward Michael Jordan for the inexcusable delay, especially when trademark registrations are supposed to be difficult to invalidate after passing the 5-year registration period? During that time, the Chinese company : registering almost 500 trademarks, investing over $10 million USD in annual advertising, establishing over 5,700 retail outlets, and attempting to become a publicly traded company. If it is wrong for one to benefit from Michael Jordan’s popularity, then is it not equally wrong for the other to benefit from the Chinese company’s decade of advertising? This evidence could be a reason behind China’s top court’s decision that Michael Jordan can only claim the Chinese translation for JORDAN with respect to the writing (乔 丹) but not with respect to the pronunciation (QIAO DAN). This means that although the Chinese company can no longer use the Chinese characters, it can continue to use the English Romanization by which it is also known. It can also use other Chinese characters with the same pronunciation, which will compete with and dilute the uniqueness of the Chinese translation that Michael Jordan just won.[3]

If Michael Jordan could have known that this would be the result, would he still commence the lawsuits in 2012 or would he choose to rebrand instead? His decision was probably pre-determined by the advice he sought. For example, an ad agency would know nothing of litigation but be quick to advise on rebranding. The marketing experts might realize that there is no mandatory Chinese translation for JORDAN. This means that Michael Jordan was free to ignore both the internationally accepted standard Chinese translation and the specific translation given to him by the Chinese media. He was free to create and register his own Chinese name, use it in all future communications, and publicize in future interviews that any other Chinese translations have nothing to do with him. Doing so could have neutralized the Chinese company and publicized its illegitimacy just as effectively, but without the years and fees spent on litigation. On the other hand, a law firm is not in the business of rebranding but would have ample advice on litigation. The legal experts might assume that Michael Jordan’s situation is the same as that of Jeremy Lin and Donald Trump.

Linsanity

Jeremy Lin now plays point guard for the Charlotte Hornets, the NBA team owned by Michael Jordan. When he filed applications in China for his trademarks, including JEREMY LIN and LINSANITY in English, he discovered that . His situation differs from that of Michael Jordan, however, because he does not have the option of rebranding. His Chinese name is independent, as it is neither a standard translation nor a media designation of his English name. His Chinese name is also much more personal, as it what his parents have called him since birth. Fortunately for Jeremy Lin, his boss already knows how to litigate and win a trademark case.

Trump Toilets

Donald Trump owns multiple trademark registrations in China for TRUMP, which he licensed on everything from steaks to universities. He failed to invalidate other trademark registrations in China such as and , and he was unsuccessful in invalidating a registration in 2006 for TRUMP construction services. That registration in 2006 blocked his repeated attempts for a decade to register TRUMP real estate services. His situation differs from that of Michael Jordan, however, . In light of the facts that China has a first-to-file trademark system, that the registration in 2006 is supposed to be difficult to invalidate after passing the 5-year registration period, and that TRUMP is a common word, it was nothing short of astounding . Although this happened shortly after the U.S. election, .

The two decisions illustrate that the Chinese courts struggle with foreign trademarks as much as Western courts. As countries continue to harmonize intellectual property laws and negotiate trade treaties, it is equally important for courts to make decisions that are in consistent with their own trademark practices and respectful each other’s trademark theory.

U. Shen Goh is a Ph.D. Candidate at Osgoode Hall Law School.

[1] Coca-Cola v Busch et al, 44 F Supp 405 (ED Pa 1942).

[2] NG-LOY Wee Loon, Law of Intellectual Property of Singapore (Singapore: Sweet & Maxwell Asia: 2008) at para [18.1.4].

[3] The problems and solutions associated with Chinese characters and their English Romanization are discussed in U. Shen Goh, “Branding Unfair Competition: What Foreign-Language Marks Mean for International Businesses” (2015) 15 Asper Rev Int’l Bus & Trade L.

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The Government of Canada is inviting Canadians to read and comment on the (TPP), along with the government’s , which provides an overview of how the TPP would affect Canada.

The summary that the largest trade deal in history will have little effect on Canada’s (TMA) since the trademarks section of the TPP is “in line with Canada’s existing regime”. This blog will highlight two instances where that is not the case.

How the TPP changes Canada’s trademark laws positively

The TPP’s broadening of collective marks and geographical indications may provide some benefit for certification marks. Article 18.19 of the TPP requires that Canada “provide that trademarks include collective marks and certification marks.  A Party is not obligated to treat certification marks as a separate category in its law, provided that those marks are protected.  Each Party shall also provide that signs that may serve as geographical indications are capable of protection under its trademark system.”

While the TM Act currently provides for certification marks indicating that goods or services are of a defined standard, it does not explicitly carve out protection for collective marks, which indicate membership in a group or organization. Much litigation has resulted from confusion about whether professional designations can function as certification marks. In 2013, the Federal Court of Canada the possibility that such designations merited trademark protection. This ruling may lead to further adjudication over whether a future trademark application is for the name of an occupation or profession (using CDA to identify certified dental assistants remains prohibited) or for a professional designation or acronym (using CDA to identify that the services of the certified dental assistants meet a defined standard would be permitted). Accordingly, allowing trademark owners to apply for collective marks may provide an alternative to such litigation.

Another and larger change comes from the last sentence of Article 18.19 combined with . GIs are indications that identify either where a product originates within World Trade Organization member states, or a region where the quality, reputation or other characteristic of a product is essentially attributable to that geographical origin. While the TMA currently limits GIs to a , the TPP expands the definition to include all goods. This is a welcome change for trademark owners, who circumvented that limitation by using certification marks as de facto GIs for the products that could not make the list (e.g., beer, cheeses, meats, confectionary and baked products).

Amending the TMA to both include collective marks and expand GIs may discourage the current abuse of certification marks, which will result in clarity and transparency.

How the TPP changes Canada’s trademark laws negatively

The TPP’s broadening of well-known trademarks may provide little benefit for Canadians. The first half of Article 18.22 of the TPP states:

“(1) No party shall require as a condition for determining that a trademark is well-known that the trademark has been registered in the Party or in another jurisdiction, included on a list of well-known trademarks, or given prior recognition as a well-known trademark.

(2) Article 6bis of the Paris Convention shall apply, mutatis mutandis, to goods or services that are not identical or similar to those identified by a well-known trademark, whether registered or not, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the trademark, and provided that the interests of the owner of the trademark are likely to be damaged by such use.”

The TMA currently makes no mention of well-known trademarks, and will need to be amended to define and protect the same. Such an expansion of trademark rights is dangerous for Canada because most are American. One wonders if American trademark owners need another ground upon which to strong-arm Canadians in light of recent news that the band .

The potential scope of Article 18.22 should not be underestimated. First, Article 18.22(1)’s removal of three possible conditions for determining that a trademark is well-known will result in uncertainty as to what kind of factors is left for consideration: Advertising? Sales? Surveys? Second, Article 18.22(2) is broader than the Paris Convention, which was limited to marks considered by “the country of registration or use to be well known in that country”. The dilemma created by removing any geographical jurisdiction can be illustrated by the example of two popular television shows: The Oprah Winfrey Show and A Date With LuYu (). Oprah is presumably a well-known trademark in the United States (and other foreign countries, given her popularity in Western culture) based on her . That assumption does not extend to China, where . Without any geographical jurisdiction, it is unclear if “well-known” refers to cultural significance (and must it cross country/language boundaries?) or if it is a numbers game. Third, footnote 13 of the TPP confirms that Canada “need not require that the reputation of the trademark extend beyond the sector of the public that normally deals with the relevant goods or services.” The removal of the traditional practice of limiting trademarks to their associated goods and services is troubling. The sum of the foregoing means Canadians are left with uncertain factors, no geographical jurisdiction and no internal limit to help them determine whether or not their trademarks could fall victim to well-known trademarks which had no prior registration or recognition in Canada.

As a country with a less litigious nature and fewer global brands, it appears Canada has little to gain and much to lose from such an expansion of trademark rights.

Overall analytical conclusions

Even if the Government of Canada was correct that the TPP’s trademarks section is “in line with Canada’s existing regime”, it is important for Canadians to remember that the TPP’s Investment chapter for “the revocation, limitation or creation of intellectual property rights” that the foreign investors claim are inconsistent with Article 18 of the TPP and the TRIPS Agreement. For example, .

The TPP’s trademark-related provisions will affect Canadians beyond the mere requisite changes to our TMA. In discussing how the TPP would affect Canada, we must consider the substantive effects on our government’s authority to make laws and our court’s autonomy to interpret them.

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This article proposes as a solution to this conflict among Chinese language marks a model that more realistically assesses the linguistic knowledge of the presumed trademark consumer. Using Canada as a test case, it also develops a method for filing and searching such marks that may suggest similar methods for avoiding conflicts involving foreign language marks in general.

Introduction

Law is a social construct featuring fictional characters. Criminal law applies the standard of the reasonable person to establish criminal negligence.[1] Civil law applies the same standard to establish tort liability for negligence.[2] Intellectual property also has its legal fictions. Patent law imagines a person skilled in the art to assess non-obviousness.[3] Copyright law imagines the author to assess originality.[4] Trademark law imagines the consumer to assess confusion.

The trademark consumer is split into further fictional characters – which is where the social construct starts to fall apart, because the fictional characters are arbitrarily given contradictory personalities. Examples include the sovereign versus the fool;[5] the passive consumer versus the active co-creator of value;[6] and, the illiterate consumer versus the fluent consumer.[7] Although the courts may find fictional characters helpful in explaining and deciding complex issues, courts cannot let imaginations run wild without undermining the credibility of the social construct. To this end, it is important that such fictional characters are developed in a consistent manner.

This article looks at the last aspect of trademark’s fictional character: what I call the illiterate consumer versus the fluent consumer. There is a gap in the literature when it comes to the linguistic knowledge of the trademark consumer. Most articles discussing the mind of the consumer make no mention of linguistic capability, as they focus on how a consumer perceives a mark,[8] differentiates one mark from another mark,[9] or participates in the development of a mark.[10] The articles mentioning linguistics and trademarks do not discuss foreign languages, as they centre on how trademarks communicate meaning,[11] how trademarks identify source,[12] or how trademarks express ideas.[13] The literature usually assumes a common cultural and linguistic knowledge and perspective between the trademark owner and the consumer. This article attempts to fill the gap regarding the linguistic knowledge of the trademark consumer by reviewing Canadian cases involving Chinese language marks in order to develop a workable model for assessing the consumer in cases involving trademarks in a foreign language (i.e., any language that is not one of Canada’s official languages of English or French). It then suggests how this understanding of the consumer can be applied consistently to Canadian trademark cases, trademark purpose, trademark distinctiveness, and the trademarks database.

Part I reviews Canadian trademark cases to develop a test for confusion involving foreign language marks. Part II analyzes trademark purpose to explain how the functions of foreign language marks can now range from restrictive to expansive. Part III analyzes trademark distinctiveness to explain how the meanings of foreign language marks can now range from strong to weak. Part IV reviews the Canadian Trademarks Database to develop a method for filing and searching Chinese language marks, with the hope that it can encourage similar methods for other foreign languages as well.

Featured here is the Introduction section of U. Shen Goh, “Branding Linguistics: Or What Coca-Cola and Chinese Bakeries Have in Common” (2014) 27:1 IPJ 65-116. U. Shen Goh is a Ph.D. Candidate at Osgoode Hall Law School.

[1] R. v. Creighton, [1993] 2 S.C.R. 3, quoting R. v. Hill, [1986] 1 S.C.R. 313.
[2] Vaughan v. Menlove, (1937) 132 E.R. 490 (C.P.).
[3] Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289.
[4] Jane Ginsburg, “The Concept of Authorship in Comparative Copyright Law” (January 10, 2003). Columbia Law School, Pub. Law Research Paper No. 03-51.
[4]Barton Beebe, “Search and Persuasion in Trademark Law” (2004) 103 Mich. L.Rev. 2020, 2025: “The result is that trademark apologists – and plaintiffs – tend to adduce the sovereign when they speak of the basis of protection and the fool when they speak of the scope. Trademark restrictionists – and defendants – do the reverse. They adduce the fool when they speak of the basis, and the sovereign when they speak of the scope. Both camps thus suffer from, at the same time that they seek to exploit, what amounts to a dialectic in trademark theory, in which information and persuasion each contain within themselves the countervailing force of the other.”
[5] Alex Kozinski, “Trademarks Unplugged” (1993) 68 N.Y.U. L.Rev. 960 (“The originator must understand that the mark or symbol or image is no longer entirely its own, and that in some sense it also belongs to all those other minds who have received and integrated it.”); Rochelle Cooper Dreyfuss, “We Are Symbols and Inhibit Symbols, So Should We Be Paying Rent? Deconstructing the Lanham Act and Rights of Publicity” (1996) 20 Colum. J.L. & Arts 123, p. 129 (“At the least, the purveyor and the audience should be considered co-creators of the value. If rights are determined by the existence of value, then purveyors and audience should be treated as joint authors or co-inventors.”)
[6] Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (T.D.), [1999] F.C.J. No. 1966, paras. 53-54: “Counsel for Cheung Kong was able to refer me to no decision holding that, in determining the question of confusion reasonably likely to be caused by a mark comprising foreign words or characters, the Registrar must consider the question from the perspective of an average consumer who understands the language in which the mark is expressed. Indeed, what authorities there are would seem to point in the opposite direction.”
[7] Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (T.D.), [1999] F.C.J. No. 1966, paras. 53-54: “Counsel for Cheung Kong was able to refer me to no decision holding that, in determining the question of confusion reasonably likely to be caused by a mark comprising foreign words or characters, the Registrar must consider the question from the perspective of an average consumer who understands the language in which the mark is expressed. Indeed, what authorities there are would seem to point in the opposite direction.”
[8] Lionel Bently, “From Communication to Thing: Historical Aspects of the Conceptualisation of Trade Marks as Property” in G. Dinwoodie and M. Janis, eds, Trademark Law and Theory: A Handbook of Contemporary Research (Edward Elgar Publishers, 2008).
[9] Beebe, supra note 6.
[10] Deborah Gerhardt, “Consumer Investment in Trademarks” (2010) North Carolina L.Rev., Vol. 88, No. 3.
[11] Graeme Dinwoodie, “What Linguistics Can Do for Trademark Law” in J. Ginsburg, L. Bently, J. Davis, eds, Interdisciplinary Perspectives on Trade Marks (Cambridge University Press, 2007).
[12] Ariel Katz, “Beyond Search Costs: The Linguistic and Trust Functions of Trademarks” (2010) Brigham Young University L.Rev. 1555.
[13] Laura Heymann, “The Grammar of Trademarks” (January, 20 2011). William & Mary Law School Research Paper No. 09-67.

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