Battle continues over M marks

In a further development to a case involving car manufacturers BMW Canada Inc and Nissan Canada Inc, the Canadian Federal Court of Appeal has granted Nissan a stay pending its appeal against an injunction preventing its use of the marks M and M6.

In emergency hearings, the Federal Court of Appeal heard Nissan's plea that it would suffer irreparable harm from having to stop using the marks in its marketing materials. The court focused on the following aspects of threatened harm:

• Nissan being unable to rely on its 'family branding' in promoting the INFINITI M family of marks, which is the practice of luxury car makers. Nissan convinced the court of plans to continue designating models this way if it is successful on appeal; the court said inconsistent branding could leave a negative image in consumers' minds.
  
  
• Nissan would be unable to redistribute favourable review articles mentioning Infiniti M cars. Such reviews are important sources of information for car buyers.
  
  
• Nissan would have to incur expenses to re-work its brochures, websites and other marketing materials. BMW had not provided an undertaking for these damages.
  

The court agreed with Nissan that the damage to Nissan's financial situation and reputation arising from the injunction would amount to "irreparable harm".

As earlier reported, the lower court had granted BMW's request for an injunction following a trademark infringement and passing off trial (see BMW and Nissan battle over M and M6 marks). BMW's case succeeded on the passing off allegation. BMW had complained of two mid-class models within Nissan's luxury division, the Infiniti M35 and M45, on sale in Canada since 2005. Nissan also used the term M6 to signify an upgrade package of its standard model (an apparent reference to manual six-speed transmission).

Nissan's success on the stay motion means that Nissan will not need to comply with the lower court's injunction until after an appeal on the merits is heard (currently scheduled for June 19 2007).

The stay of judgment, a rare remedy, is noteworthy and perhaps signifies a reluctance of the appeal court to accept the lower court's ruling on the finding of passing off.

Yuri Chumak and R Scott MacKendrick, Ogilvy Renault LLP, Toronto