POTENZA decision: where you sell matters as much as what you sell

As demonstrated by the decision of the Federal Court of Canada In Bridgestone Corporation v Campagnolo SRL (2014 FC 37), the distinction between probable and possible overlap in the channels of trade can be the difference between winning and losing an argument against confusion.

Bridgestone Corporation, a well-known automotive company, owns registrations for the trademarks POTENZA for tires, tubes and inner wheels, and POTENZA RE92 for tires and inner tubes.

Bridgestone opposed an application by Campagnolo SRL to register the trademark POTENZA for bicycle parts and accessories specifically excluding tires, brakes, wheels, rims and spokes. Bridgestone’s opposition was based on, among other things, a likelihood of confusion between Campagnolo’s trademark and its POTENZA and POTENZA RE92 marks. Bridgestone was unsuccessful in its opposition before the registrar of trademarks and appealed the decision to the Federal Court of Canada.

In Canada, the likelihood of confusion between two marks is primarily dependent on an assessment of five factors:

1. inherent distinctiveness of the marks and the extent to which they are known; 
2. the length of time the marks have been used in Canada;
3. the nature of the goods;
4. the channels of trade; and
5. the degree of resemblance between the trademarks and the ideas suggested by them.

While the court and the registrar held that Bridgestone was successful in proving factors (1), (2) and (5) in its favour, both found that factors (3) and (4) favoured Campagnolo to such an extent that it tipped the overall confusion analysis in Campagnolo’s favour. 

After rejecting any new evidence that Bridgestone had filed in support of its appeal and deciding to review the registrar’s decision based on a standard of reasonableness, the court found that the respective goods of the parties were sufficiently different. The exclusion of tires and wheels in Campagnolo’s application, as well as a lack of evidence of use of the POTENZA marks by Bridgestone in association with bicycles or bicycle accessories, was found to adequately support this argument.

Agreeing with the registrar, the court rejected Bridgestone’s position that the parties’ goods could be sold in the same channels of trade since neither party had expressly limited the channels of trade in which their respective goods could be sold. Critical to this finding was affidavit evidence that the POTENZA-associated goods were only sold in high-end bicycle shops. The court held that only “predictable and usual” and probable channels of trade had to be considered; hypothetical or possible channels of trade were not to be considered. The current channels of trade for Campagnolo’s goods (ie, high-end bicycle shops) were found sufficiently indicative of the probable channels of trade.

The court did, however, go a step further and find the purchasers visiting the types of stores that Campagnolo’s goods were sold in would be sophisticated enough to differentiate between the goods even if Bridgestone was to eventually sell bicycle tires in Canada. It is unclear whether the court considered the scenario where Bridgestone would sell its tires in the same or similar types of high-end bicycle shops as Campagnolo, or whether it simply assumed that Bridgestone’s goods would naturally be sold in a separate set of stores. It is surprising that the court made such a finding when the average consumer in this case was found to be a “casual consumer somewhat in a hurry”.

Bridgestone had until February 27 2014 to file an appeal with the Federal Court of Appeal.

Sanjukta Tole, Sim IP Practice, Toronto