BMW and Nissan battle over M and M6 marks

In BMW Canada Inc v Nissan Canada Inc, the Federal Court of Canada has awarded BMW Canada Inc a permanent injunction preventing the use by Nissan Canada Inc of a series of M and M6 marks. However, Nissan has appealed and has asked the Federal Court of Appeal to delay the injunction until after it has been heard.

The highest performance BMW models, adapted from the German company's motorsport division, carry the letter M in combination with other letters or numbers (namely, the marks M, M3, M5, M6 and M (and design)). BMW registered certain M-formative marks, but not M per se or M6. Over the years, BMW had, however, advertised and promoted 'BMW M Night' events, and there was an 'M edition' of the 6 Series model first sold by BMW in Canada in 1987 (reissued in 2006).

In the lawsuit, BMW complained of two mid-class models within Nissan's luxury division, the Infiniti M35 and M45, on sale in Canada since 2005. The Infiniti division also used the term 'M6' to signify an upgrade package of its standard model (an apparent reference to manual six-speed transmission).

BMW failed on its statutory infringement and depreciation of goodwill claims, but succeeded on its statutory passing off claim as against Nissan's use of M and M6.

In applying the test for confusion, a requirement of statutory infringement, the Federal Court confirmed that the nature of trade was such that a prospective purchaser would spend more time prior to purchasing a big-ticket item (the ordinary perspective of the hurried purchaser with an imperfect recollection should not be used). Although there may have been some initial confusion, there was no "lingering" confusion. Considering all the surrounding circumstances, the court found no likelihood of confusion relating to BMW's registered marks.

On the depreciation of goodwill claim, the court found that there was insufficient evidence to ground the claim.

To establish statutory passing off, BMW had to prove:

• the existence of goodwill;
  
  
• deception of the public due to a misrepresentation; and
  
  
• actual or potential damage.
  

The court found that there was sufficient goodwill in BMW's M and M6 unregistered marks arising from awareness within limited special interest groups (automobile journalists and high-performance car enthusiasts) to sustain a passing off action. The court also found a likelihood of confusion directly related to Nissan's marketing activities. Moreover, the court appears to have assumed resulting damage, and has left the extent of damages open to be heard in a separate trial.

For now, Nissan need not comply with the court's order forbidding use of M and M6 as trademarks in Canada and need not deliver up for destruction any literature or other promotional materials. On March 15 2007 the Federal Court of Appeal granted Nissan a temporary stay. If Nissan ultimately succeeds on the stay motion then it will not need to comply with the court's order until after an appeal on the merits is heard. But, if Nissan loses (the stay motion or the appeal), the next stage of the case will likely be to enforce the court's order and to put a number on BMW's damages, which the trial judge hinted might be "nominal" only.

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