VEUVE CLICQUOT decision marks setback for famous marks

In Veuve Clicquot Ponsardin v Les Boutiques Cliquot Ltée (2004 FCA 164), the Federal Court of Appeal has upheld a trial judge's decision to dismiss the plaintiff's claim that the use of the CLIQUOT mark in relation to clothing infringes and dilutes its CLICQUOT marks for champagne.

Veuve Clicquot Ponsardin produces and distributes alcoholic beverages - in particular champagne - throughout the world, including Canada. It is also the owner of many registered trademarks in Canada incorporating the name Clicquot. Its earliest registration was obtained in 1909.

In November 1998, Veuve Clicquot brought an action before the Federal Court of Canada against Les Boutiques Cliquot Ltée and Mademoiselle Charmante Inc for, among other things, trademark infringement, dilution and passing off.

The defendants operate a business retailing women's clothing under the names Les Boutiques Cliquot and Cliquot. They also directly operate six Les Boutiques Cliquot stores in Ontario and Quebec. The mark CLIQUOT appears on bags containing products sold in their stores, on their business cards and on their invoices. Mademoiselle Charmante Inc also obtained two registrations in 1997 for marks containing the name Cliquot.

The Federal Court held that there was no trademark infringement. It conceded that:

• Veuve Clicquot's trademarks have a significant inherent distinctiveness that entitles them to extensive protection;
  
  
• Veuve Clicquot has used its VEUVE CLICQUOT trademark in Canada since at least 1899, thus implying that it has made an impression on consumers; and
  
  
• there is a great degree of resemblance between Veuve Clicquot's marks and those of the defendants.

However, the court found that there was no risk of confusion in consumers' minds. While the court established that Veuve Clicquot had sold various clothing articles, it felt that they were merely promotional items and did not establish a connection between the parties' activities. The court also rejected Veuve Clicquot's argument that its trademarks are elastic and can be extended into other fields, including fashion. The court held that consideration of future events and possibilities of diversification is restricted to the potential expansion of existing operations. It should not include speculation as to diversification into entirely new ventures such as new kinds of wares, services or businesses.

The court rejected the dilution claim, finding that Veuve Clicquot's marks could only be depreciated if consumers made a connection between the parties - which was not the case.

Lastly, the court rejected the claim of passing off. It found that as the goodwill in Veuve Clicquot's marks does not extend to the fashion industry, consumers would not think that the stores operated by the defendants were connected to Veuve Clicquot.

Veuve Clicquot appealed and the Federal Court of Appeal upheld the trial court's decision.

This decision marks a setback for owners of famous marks. It also begs the question of whether, to avoid dilution, owners of famous trademarks should plan the strategic use of their signs in fields unrelated to their traditional activities in order to prevent third parties from legally using them in association with activities that are different from those traditional activities.

George Kintzos, Léger Robic Richard, Montreal