Federal Court considers whether trademark rights can subsist in arrangement of colours

Canada

Can trademark rights subsist in the arrangement of colours? In Distrimedic Inc v Dispill Inc (2013 FC 1043), the Canadian Federal Court has answered this question in the negative for situations where the colour scheme serves a purely functional purpose. 

At issue in this case was whether Distrimedic Inc’s pill dispensing and storage system infringed Dispill Inc’s patent, copyright and trademark rights. Dispill also asserted that Distrimedic had made false and misleading statements that tended to discredit the business, services and wares of Dispill.

In his careful and detailed judgment, Mr Justice de Montigny dismissed Dispill’s claim of alleged infringement of Dispill’s patent and copyright. The court also found that the evidence was far from sufficient to establish that Distrimedic or its representatives had made misleading representations with respect to Dispill’s goods.

On the trademark front, Dispill sued for passing off, alleging that Dispill’s 'packaging label colour trademark' (ie, the colours applied to the top surface of the container-sealing sheets) had become distinctive trademarks and that continued use of Distrimedic’s container-sealing sheets was likely to lead members of the public to infer that Dispill either was associated with Distrimedic or endorsed Distrimedic’s goods and services. At the outset of the decision, Mr Justice de Montigny pointed out that Dispill’s colour scheme had been the subject of a Canadian trademark application, which was ultimately refused by the registrar of trademarks.   

The first issue was whether the Dispill colour scheme constituted a trademark. Noting that the colour scheme was adopted primarily, or entirely, to identify a specific moment of the day when the pill contained in a blister pack must be taken, the court held that the colour scheme served a purely functional purpose. Moreover, the court rejected Dispill’s assertion that the colour scheme had acquired distinctiveness through use and public recognition based on the court’s finding that the relevant public, being pharmacists and administrators of nursing homes, were unlikely to be influenced by colours or to confuse two products because of a similar colour scheme.

In obiter, the court considered whether Distrimedic “used” the colour scheme within the meaning of the Canadian Trademarks Act, RSC 1985, c T-13, which requires that “use” in association with goods be “in the normal course of trade”. The court noted that the handing out of free samples of its product by Distrimedic, which formed the basis of the alleged infringement of Dispill’s colour scheme trademark, did not amount to “use” of the mark since the “normal course of trade” would require some payment or exchange. This would exclude the use of a mark in situations where the goods are given away for free or donated. 

In further obiter commentary, the court found that there was no evidence of actual confusion. In coming to that conclusion, the court relied once again on the characteristics of the targeted customers of the container-sealing sheets. The court held that professionals, such as pharmacists and nursing home administrators would be less likely than the general public to confuse two competing products.

As a result, the court reasoned that Dispill had failed to demonstrate any of the elements necessary for an action in passing off to succeed and dismissed Dispill’s trademark infringement claim in its entirety.

Distrimedic should serve as a reminder to businesses - and their advisors - seeking to protect their trademarks and trade dress of the importance of the requisite distinctiveness of a mark, and of the corollary that trademark protection does not extend to purely or primarily functional marks. In addition, Distrimedic underlines the significance of the characteristics of the customer group to which the product is marketed to the determination of the likelihood of confusion by the relevant public. Although the court’s conclusions respecting the normal course of trade and the relevant public might not apply in every case, these factors should always be carefully addressed in any litigation involving trademarks.

Gordon J Zimmerman and Tamila Ivanov, Borden Ladner Gervais LLP, Toronto

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