M marks ruling reversed

In BMW Canada Inc v Nissan Canada Inc, the Canadian Federal Court of Appeal has overturned a trial decision which had favoured claimant car maker BMW Canada Inc and prevented Nissan Canada Inc from using a series of M and M6 marks. This decision follows an earlier ruling whereby the appellate court had stayed the judgment against Nissan pending hearing of the appeal.

The appellate court found that the trial judge made several errors relating to the evidence and the law in ruling that Nissan had committed passing off. For example, the appellate court found that the trial judge erred by engaging in the passing off analysis without first establishing whether BMW had used the marks at issue (M and M6 marks). The trial judge had ruled that there was use of the M mark stemming from certain of BMW's advertising and promotional material. The appellate court reasoned that this evidence was inconclusive since most of the material would not have been given to purchasers at the time of sale. As such, there was no 'use' of the M and M6 marks.

The appellate court also found that the trial judge erred in his application of the passing off test, which requires:

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

Specifically, the court observed that the trial judge was wrong to assume resulting damage. Though the case was subject to a bifurcation order (ie, an order that the issue of quantum of damages was reserved to a separate hearing, if necessary), it was not open to the trial judge to presume the existence of damages.

For background discussion of this case, see Battle continues over M marks and BMW and Nissan battle over M and M6 marks.

Yuri Chumak, Cameron MacKendrick LLP, Toronto