Digests

Alticor Inc. v. Nutravite Pharmaceuticals Inc.

T-1489-99

2004 FC 235, Snider J.

16/2/04

53 pp.

Infringement action, claiming "Nutravite" mark likely to be confused with plaintiffs' "Nutrilite" mark and claiming passing off based on sale, distribution by defendant of its product in association with both marks "Nutravite" and "A Perfect Blend Of Science and Nature"--Defendant, by way of counterclaim, alleging trade-mark "Nutrilite" not valid because, as of date of registration, not registrable--If trade-mark unregistrable, no possible infringement or passing off-- Therefore, validity of "Nutrilite" trade-mark dealt with first-- Trade-mark "Nutrilite" registered in Canada on March 28, 1952--At that time, Unfair Competition Act (UCA) provided word mark registrable if not name in any language of any wares in connection with which to be used (s. 26(e)) and if not descriptive of character or quality of wares in connection with which proposed to be used (s. 26(c))--Defendant presented no evidence showing word "nutrilite" known to average Canadian consumer in 1952--Various science journal articles presented from that time mainly foreign in origin and no evidence of extent of distribution in Canada--Thus, could not conclude that even Canadian scientific community familiar with word "nutrilite"--Defendant bears burden of proving trade-mark "Nutrilite" unregistrable in March 1952-- Evidence insufficient to satisfy legal onus required to invalidate trade-mark--Accordingly, counterclaim failed--As to confusion, whether defendant's use of trade-mark "Nutravite" in association with vitamin, mineral and herbal supplements causing confusion in that such use likely to lead to inference "Nutravite" products and "Nutrilite" products manufactured or sold by same person, as set out in Trade-marks Act (TMA), s. 6(2)--In assessing likelihood of confusion, must have regard to factors enumerated in TMA, s. 6(5) and to surrounding circumstances--As to inherent distinctiveness and extent to which trade-marks have become known, original trade-mark will be distinctive from inception and will receive stronger protection--However, where trade-mark lacks originality, it is less distinctive and ambit of protection afforded much less than for strong mark and registration of other marks containing comparatively small differences may be permitted--Based on lack of distinctive-ness of "Nutrilite" trade-mark and failure of plaintiffs to demonstrate mark has become well-known, this factor favours defendants--As to length of time in use, plaintiffs submitted evidence showing products sold in Canada since 1948--Best evidence of use of branded product in given market evidence of sales--1994 first fiscal year for which sales figures available--In 1994, sales of "Nutrilite" vitamins and minerals and "Nutrilite" herbals totalled $12,786,000--On basis of sales records, product continuously sold in Canada since 1994 --However, evidence prior to 1994 less helpful because consisting of anecdotes and few documentary references to Canadian sales--Nevertheless, if products in use as claimed by plaintiff, better evidence could probably have been produced--Based on evidence, products in question not used in Canada prior to 1974--Evidence suggesting earliest distribution in Canada for sale 1973 or 1974--Since defendant's products have only been sold in Canada since 1992, this 14-year market advantage favours plaintiffs--As to nature of wares, defendant admitting products of two parties identical with exception defendant not selling food bars or drinks--Thus, factor favouring plaintiffs--As to nature of trade, "Nutravite" products sold in pharmacies, retail outlets-- "Nutrilite" products not sold in retail outlets and unlikely to be sold in any other way except through multi-level marketing scheme currently in place--"Nutrilite" products inextricably linked to method of sale--Any move by plaintiffs into retail trade purely speculative--Consequently, nature of trade of "Nutrilite" products materially different from nature of trade of "Nutravite" products--Important aspect of analysis is how plaintiffs' marketing effectively defines, describes hypotheti-cal purchaser--Almost certain such purchaser would be aware "Nutrilite" products only sold through plaintiffs' multi-level marketing program and not in stores--Given bond between method of sales and products, even imperfect recollection of mark "Nutrilite" would include recollection of sales only through independent business owners--Hypothetical consumer of "Nutrilite" products going to be aware of how to buy products, as it is not in retail outlets--Possibility of confusion remote--As to degree of resemblance, pronunciation, while close, not going to cause confusion in most cases--In appearance, combination of different letters does create differences between two words--Morphology of words appears to be most holistic approach to analysing degree of resemblance--Marks bearing some resemblance to each other--Any differences, as considered in linguistic exercise, relatively minor--This could operate in plaintiff's favour because consumer with imperfect recollection could confuse two marks As to other surrounding circumstances, survey evidence indicating in spite of 10 years of co-existence, no actual instances of confusion--Further, plaintiffs' surveys not supporting conclusion likely to be confusion between two trade-marks--These findings weigh in favour of defendant--Factor warranting greatest emphasis in this case nature of trade--Combined with surrounding circumstances of commonly used prefix, "Nutri", at beginning of trade-mark and co-existence of two trade-marks for over 10 years without confusion, leading to conclusion plaintiffs not discharging burden of showing likelihood of confusion between two trade-marks--Accordingly, "Nutravite" not confusing trade-mark and no infringement of "Nutrilite" trade-mark--Finally, as to claim of passing off, plaintiffs failed to establish three necessary components--Court questioning whether goodwill could be established for mark used so inconsistently and without active promotion--Defendant's admission that it stopped using trade-mark "because the Plaintiff has laid claim to it and we don't want to infringe on the Plaintiffs' rights" not construed as admission defendant using mark to trick consumers into thinking defendant sells "Nutrilite" product--No evidence of actual damage to plaintiffs and, since defendant stopped using mark over three years ago and not intending to use it again, no potential for damage--Plaintiffs' claim dismissed and defendant's counterclaim dismissed--Trade-marks Act, R.S.C., 1985, c. T-13, ss. 6, 19 (as am. by S.C. 1993, c. 15, s. 60), 20 (as am. by S.C. 1994, c. 47, s. 196)--Unfair Competition Act, R.S.C. 1952, c. 274, s. 26.