Monday, January 14, 2013

Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V.

Monday, January 14, 2013

Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V., Federal Court of Appeal, 7 December 2012

When is the appearance of a mark in an invoice considered use of the trademark in association with wares for which the invoice has been issued?

This appeal boiled down to the question of which one of the parties was the first to use the mark HORTILUX in association with their wares, and the main evidence used to make that determination of use was an invoice issued by Hortilux Schreder in which it used the mark HORTILUX in connection with its wares.

Isawaki’s claimed date of earliest use was October 1997 when it gave two samples of its wares to a Canadian retailer, for no consideration.  Hortilux Schreder, on the other hand, produced an invoice dated August 1997, which was issued for the sale of its wares and contained the word HORTILUX on the top of the invoice. 

The Trademark Opposition Board (TMOB) decided that use of the word HORTILUX in Hortilux Schreder’s invoice did not establish use, because the mark appeared on top, and not in the body, of the invoice. The TMOB did not, however, review the jurisprudence on this point and did not explain the rationale for its decision. 

On appeal, the Federal Court judge reversed the TMOB’s decision.  The judge found that the TMOB could not have reasonably concluded that Isawaki’s transaction in October 1997 was use of the mark in the normal course of trade, as required by Subsection 4(1) of the Trademarks Act. He also found that Hortilux Schreder’s invoice did amount to use of the mark.

In so deciding, the judge reviewed the important factors established by the jurisprudence, and compared them to the invoice. Among these factors were the following: the word HORTILUX appeared in large and stylized font and was prominent and different from the rest of the text in the invoice; even though HORTILUX appeared at the top of the invoice, it was clear that it was used as a trademark and not as a company name; the recipient was familiar with the wares and he would understand that HORTILUX was distinguishing the source of the wares; there were no other wares and no other trademarks in the invoice; etc.

On appeal to the Federal Court of Appeal, Isawaki raised a concern that the Federal Court judge’s decision was inconsistent with an earlier decision of the same judge on the same issue, in the case of Tint King of California Inc. v Canada (Registrar of Trade-marks). In that case, the judge had stated that
 If a trade-mark is placed at the top of the invoice, with no use in the body of the invoice, the use will not generally be in association with the invoiced wares.

The Court of Appeal, however, pointed out the Tint King principle is the general rule, but it is not without exceptions, and it cited cases in which the placement of a trademark on top of an invoice was found to be evidence of use of the mark in association with the wares.

The Court found that the TMOB’s decision was not reasonable because it had simply applied the general rule without explaining its reasons for doing so.  The Court went on to say that, in view of the fact that the judge had reviewed the jurisprudence setting out both the general rule and the exceptions and had made a reasoned decision, the court did not find a reviewable error on the part of the judge, and thus upheld his decision.

By: Nazanin Ghaissarnia