Written by Dominique T. Hussey, L.E. Trent Horne and Jeilah Y. Chan
A single product can, in some circumstances, attract more than one form of intellectual property (IP) protection. For example, if functioning as an indicator of source, a product itself can attract trademark protection while an original design appearing on the product can attract copyright protection. To maximize protection against would-be competitors and infringers, every business should identify, protect and assert all applicable IP rights in its key products.
The Stork Market Inc. v. 1736735 Ontario Inc., 2017 FC 779
In Stork Market, the parties were competitors in the business of renting “lawn storks”, i.e., large signs depicting a stork holding a newborn baby, that are placed on a customer’s lawn to announce the birth of a child.
Stork Market’s sole officer and shareholder owned two trademark registrations for the appearance of the signs. Each featured a stork with feet spread apart, wings raised, and a banner reading “It’s a Girl!” or “It’s a Boy!”. Stork Market claimed that signs rented out by a competitor were close copies of its designs, and infringed its trademark and copyright rights.
The Court rejected the defendants’ assertion that the trademarks had lost distinctiveness because there was no written licence from the trademark owner to Stork Market. As the owner of the registrations was the sole officer and shareholder of Stork Market, the existence of an oral licence was inferred. The use of the marks by Stork Market was therefore deemed to be use by the owner, preserving the validity of the registrations.
The defence that the registrations were invalid because they were primarily functional was also rejected. The Court found that the registrations did not represent the shaping of the goods or a mode of packaging, nor did they attempt to assert protection over what would properly be the subject of a patent. Given the many ways in which a stork could be represented, the registrations did not significantly undermine a competitor’s ability to compete, or otherwise have an anti-competitive effect.
The competing stork designs were very similar. Supported by evidence of actual confusion, the defendants were found liable for infringing the rights granted by the trademark registrations, and also passing off. The Court dismissed the claims for copyright infringement, preferring the defendants’ evidence that the competing stork designs were original works and not copied from the Stork Market designs.
The case illustrates that having clear title to both trademarks and copyright offers superior protection against competitors, particularly for works or designs that are central to the success of a business. Trademark infringement can be established without evidence of copying, and copyright infringement can be established without evidence of likely consumer confusion. Notably, while the plaintiff here prevailed in the absence of a written licence, businesses are best served by having all trademark licences in writing, particularly where corporate relationships are more complex.
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