Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée., 2003 FCT 103

Date: 20030130

Docket: T-2080-98

Neutral citation: 2003 FCT 103

Ottawa, Ontario, January 30, 2003

Before: Danièle Tremblay-Lamer J.

BETWEEN:

VEUVE CLICQUOT PONSARDIN,

MAISON FONDÉE EN 1772

Plaintiff

and

LES BOUTIQUES CLIQUOT LTÉE

and

MADEMOISELLE CHARMANTE INC.

and

3017320 CANADA INC.

Defendants

REASONS FOR ORDER AND ORDER

[1]        This is primarily an action for the infringement of registered trade marks, unfair competition and the tort of passing-off, based essentially on the provisions of the Trade Marks Act, R.S.C. 1985, c. T-13 ("the Act"). Alternatively, the plaintiff is asking that the defendants' marks be struck out.

[2]        The plaintiff, VEUVE CLICQUOT PONSARDIN, MAISON FONDÉE EN 1772, operates under this name and under the trade name VEUVE CLICQUOT PONSARDIN a business in the field of manufacturing, selling, distributing and exploiting alcoholic wines and beverages, in particular champagne, in Canada and in many other countries of the world.

[3]        The defendants operate a business retailing women's clothing. They carry on their commercial activities under the names LES BOUTIQUES CLIQUOT and CLIQUOT.

[4]        There are six "LES BOUTIQUES CLIQUOT" stores located in Ontario and Quebec.

[5]        The word CLIQUOT appears on bags containing wares sold in LES BOUTIQUES CLIQUOT, and on business cards and invoices issued by the defendants.

[6]        The wares sold in LES BOUTIQUES CLIQUOT come from the same suppliers as those sold in the defendants' other boutiques, operated under the trade names MADEMOISELLE CHARMANTE, COLETTE, CADANCE PETITE and CHARMANTE PETITE.

[7]        The co-defendant MADEMOISELLE CHARMANTE INC. is a holder of registered trade marks for CLIQUOT (word) TMA 479,359 and CLIQUOT "UN MONDE À PART" TMA 479,367 registered on August 1, 1997.

[8]        The plaintiff maintained that it is the holder of several registered trade marks including the word CLICQUOT, in particular:

[TRANSLATION]

TMDA 13870 dated July 15, 1909 for the mark V. CLICQUOT P. WERLE ( & design);

TMA 242,785 dated April 11, 1980 for the mark VEUVE CLICQUOT (words);

TMA 246, 008 dated June 6, 1980 for the mark CLICQUOT ROSÉ ( & design);

TMA 362,131 dated November 3, 1989 for the mark VEUVE CLICQUOT PONSARDIN (words);

TMA 401,553 dated August 21, 1992 for the mark VEUVE CLICQUOT PONSARDIN ( & design);

TMA 434,667 dated October 21, 1994 for the mark LA GRANDE DAME ( & design);

TMA 440,738 dated March 24, 1995 for the mark VEUVE CLICQUOT PONSARDIN ( & design).

[9]        According to the plaintiff these marks have been used as trade marks, in particular, for the marketing of champagne wines, but also for the distribution for promotional purposes for many years in Canada of a vast range of products and fashion articles such as jackets, scarves, silk scarves and dresses for women, ties, bow ties and vests for men.

[10]      In accordance with the "brand extension" theory, the plaintiff argued that the mark CLICQUOT should be given wider protection in areas of activity other than the production and distribution of champagnes.

[11]      According to the plaintiff, the use of CLIQUOT or CLIQUOT "UN MONDE À PART" by the defendants is a conversion of the plaintiff's marks within the meaning of s. 20 of the Act, inter alia, and a dilution of the said mark within the meaning of s. 22 of the Act.

[12]      The plaintiff sought an injunction to end the use of the marks CLIQUOT and CLIQUOT "UN MONDE À PART", or any variation thereof, by the defendants. Further, it asked that the registrations of these marks be struck out.

[13]      The defendants maintained that their marks did not give rise to confusion with the plaintiff's marks since they were used exclusively in connection with the operation of boutiques for the retailing of women's clothing and accessories: the distribution channels for each of the two groups were so different that there was no possibility of confusion.

Evidence

[14]      Christian Maille, export director, testified that the plaintiff, a major producer of champagnes, had claimed use of its CLICQUOT marks for at least four centuries. Although the plaintiff's origins date back to 1772, it was largely due to the personality of Mme. Clicquot, known as the "Grande Dame", that the company made a significant expansion. In the witness' opinion, this feminine presence in the plaintiff's history had an impact on the choice of strategy developed by the plaintiff to sell and promote its products.

[15]      Mr. Maille and Ms. Harrison, the plaintiff's representatives in Canada, referred to various events in Canada which link the plaintiff to a woman's world.

[16]      For example, at the time of the bicentenary of the founding of the champagne firm in 1972, the plaintiff offered a prize for the businesswoman of the year. The prize was issued four times, in 1982, 1984, 1986 and 1988, to women with completely different interests, and some were invited to the 30^th anniversary celebration of the prize in Paris.

[17]      Ms. Harrison also testified that the plaintiff did advertising in magazines targeting the female population, and had several times sponsored the international competition of young fashion designers in Montréal and prestigious events attended by women.

[18]      The plaintiff also used promotional materials to make itself known, such as ball point pens, key chains, covers and cloths (Exhibit P-4), but also VEUVE CLICQUOT scarves. Mr. Maille and Ms. Harrison testified that Canadian consumers asked where to get the scarves, which might warrant the plaintiff eventually considering an extension of its mark for the marketing of its products.

[19]      Mr. Maille testified that the plaintiff's marketing plan for 1994 to 1999 referred to the link between the plaintiff's various marks and events connected to a woman's world.

[20]     Mr. Lamont, an advertiser, testified for the plaintiff about his involvement in producing the defendants' plastic bags (Exhibit P-12a). The use of a globe suggested the idea of get-away travel. This was the theme suggested to him by Ms. Gauthier. It was Mr. Lamont who chose the calligraphy for the words "Charmante, Cliquot, Colette and Cadence", the names of the defendants' various boutiques.

[21]      Two expert witnesses testified for the plaintiff, including Ms. Abitbol, an expert on strategy in the luxury field. She testified about the luxury industry and its particular characteristics, especially as to the importance of trade marks in the luxury field. The image of a mark is crucial in this field and the owner of a mark must ensure that his mark's prestige is maintained. Any shift to a new product must be made cautiously. If a mark in the luxury field is associated with products of a quality lower than the quality of its original sector, such a mark is likely to lose its prestige as a luxury mark. Ms. Abitbol cited the case of "Cardin", whose mark was associated with a range of products of very unequal quality, and the result was that the PIERRE CARDIN mark lost its prestige and credibility as a luxury mark.

[22]      VEUVE CLICQUOT champagne is firmly established in the luxury field. In Ms. Abitbol's submission, the marks "Veuve Clicquot" and "Clicquot" are capable of being extended to other associated products or services in the luxury field, in particular those in women's fashions, so long as the extension is in keeping with the specific requirements of the luxury industry and is subject to control to preserve the mark and its image.

[23]      The plaintiff's second expert witness, Yves Simard, vice-president, trade mark strategy, with Nolin Branding & Design, an expert in mark management, testified about the elasticity of marks and the potential for their extension into other areas.

[24]      Mr. Simard explained in his affidavit that the purpose of marketing is to present goods and services, while branding has to do with the value that a mark assumes in the mind of the consumer.

[25]     In the field of branding, a mark is defined as a distinctive name and/or symbol the function of which is to identify the goods or services of a seller or group of sellers, and to differentiate them from those of the competition. Accordingly, a mark indicates the origin of a product to consumers and protects those consumers and producers from possible competitors trying to offer products which appear to be identical.

[26]      The mark facilitates purchasing decisions by helping consumers to process, interpret and maintain large quantities of information about the product. The presence of marks allows a relationship of trust to be built up with consumers.

[27]      Apart from the physical characteristics of products, marks may increase consumers' satisfaction (or dissatisfaction) when using the product. A strong mark has the potential of adding to the product value exceeding its physical characteristics.

[28]      Mr. Simard explained the concepts of elasticity and mark extension, which involve the introduction of an existing mark into a class of products or services with which it had not so far been concerned.

[29]      This practice of extension allows marks to reach new consumers and/or increase consumption by those who remain faithful to the mark, by offering them new products under the mark. Additionally, an extension may enhance the image of a mark and remove it from a long-established market in which products have become commodities.

[30]      There are two types of mark extension: extension by proximity or continuity and discontinuous extensions. The former are extensions adjacent to the initial territory, while the latter are associated with a state of mind or value making possible a real diversification beyond the categories.

[31]      Mr. Simard identified various factors facilitating mark extension, such as credibility, relevance, differentiation and elasticity of the mark. He concluded that the mark CLICQUOT lent itself to mark extension since it appeared to meet the four basic requirements.

[32]      With regard to the impact of use of the name "Cliquot" on the mark CLICQUOT, he felt it was reasonable to think that from a branding standpoint a consumer who had some familiarity with the CLICQUOT mark would assume that CLIQUOT women's clothing stores were initially connected in some way with the CLICQUOT mark of VEUVE CLICQUOT PONSARDIN.

[33]      In so far as the VEUVE CLICQUOT PONSARDIN company had no control over the marketing or the quality of the products offered, or the provision of services, this misapprehension by the consumer was likely to have a negative impact on the image of the CLICQUOT mark and the general reputation of the VEUVE CLICQUOT PONSARDIN company.

[34]      Mr. Simard considered that this situation adversely affected the VEUVE CLICQUOT PONSARDIN company's ability to eventually operate a business with its mark in a market where stores with the name CLIQUOT existed simultaneously. It was particularly difficult to effectively promote such a name.

[35]      Counsel for the defendants objected to Mr. Simard's opinion about the impact of use of the name "Cliquot" on the mark CLICQUOT, on the basis that the opinion went beyond Mr. Simard's area of expertise. I allow the defendants' objection. Mr. Simard is not familiar with the luxury or the fashion fields, and did not have any opinion survey as a basis for determining the mark's impact on the consumer. His expertise in branding did not qualify him to assess the consumer's reaction and the possibility of confusion with the defendants' stores.

[36]      The defendants' evidence rested primarily on the testimony of Jacqueline Gauthier, purchaser for the defendants, and Harvey Kom, the defendants' owner.

[37]      Ms. Gauthier testified that she saw advertising in a magazine with green and yellow colouring and, a few pages later, bags. She explained that the word "Clicquot" drew her attention because customers coming into their stores often used the phrase "Ça clique" [it's great]. She also indicated that she had discussed this choice of name with Mr. Kom. I note that in her examination for discovery on August 19, 1999 Ms. Gauthier testified that she saw the word "Clicquot" on handbag advertising. Also in her examination for discovery, she indicated that in the advertising she had seen it was the word "Clicquot" which attracted her attention.

[38]      Mr. Kom testified that before using the mark "Cliquot" he checked with his lawyer at that time, who confirmed that there was no problem using the word "Cliquot". He mentioned that none of the clothing sold in his "Cliquot" stores bore the mark "Cliquot". He explained that he did not have high-class clothing stores, but medium-range/bridge stores which were designed for the career woman. He also added that he had never sold champagne, wine or alcoholic beverages in his stores.

[39]     Mr. Baillot, the legal director employed by the plaintiff, testified briefly for the defendants. He testified that the company Compumark did world-wide surveillance for the plaintiff's marks. Until late 1999 this administrative surveillance was limited to class 33 (alcoholic beverages), since in general the plaintiff's distributors, and in particular the Canadian agent United Distillers in Canada, were required to maintain surveillance of their market. It was as a result of this surveillance that use of the name "Cliquot" by the plaintiff's shops was discovered.

[40]      Since late 1999 the surveillance of the plaintiff's marks has included all classifications.

[41]      Caroline Lemoyne, an employee of the Pouliot Mercure firm at the relevant time, from 1991 to 2000, testified that she was working at the time in the marks protection field. In 1996 she did a computer check for the defendants on the mark "Clicquot". The name VEUVE CLICQUOT PONSARDIN came up. She said that she generally informed the client in writing when she saw a problem, and did not do so in that case.

[42]      After reviewing all the testimony and the exhibits filed, and in particular the advertising pamphlets, magazines, clothing and promotional items, I have made the following findings of fact.

[43]      The evidence showed that Ms. Gauthier could not have seen anything other than VEUVE CLICQUOT PONSARDIN advertising, since there was no other advertising using the word CLICQUOT in the fashion magazines at the time.

[44]      Ms. Gauthier also testified that it was the word "Clicquot" alone which attracted her attention. Her testimony established that the distinctive aspect of the plaintiff's marks is the word "CLICQUOT".

[45]      The plaintiff's promotional items cover a nondescript group of items only some of which can be regarded as for women (scarves and nightgowns). However, these articles were only offered for promotional purposes and the evidence did not establish that the plaintiff developed any strategy by which its mark was the subject of an extension into the fashion field or that it contemplated [TRANSLATION] "extending it" into women's clothing in the future.

[46]      The fact that some consumers may buy a VEUVE CLICQUOT scarf does not establish the plaintiff's intention to extend its mark into the fashion field. The scarf remains a promotional article and nothing more.

[47]      The sponsorship of fashion events and advertising in fashion magazines read by women establish that women are a market targeted by the plaintiff for the consumption of its champagne, and is not evidence that it wished to extend its marks into the fashion industry, which would have had to be reflected in its strategic plans.

[48]     Mr. Maille could not indicate a single thing in the plaintiff's strategic plans targeting the women's market.

[49]      The plaintiff has not altered its trade marks since their origins so as to extend them to other goods.

[50]     The plaintiff purchased Givenchy perfumes in 1981, but after being acquired by the LVMH group in 1987 it divested itself of Givenchy perfumes. That is a strong indication that it did not intend to extend its marks to products other than champagne.

[51]      The plaintiff's evidence did not establish any connection with the fashion world, simply that women were a market targeted by the plaintiff.

ANALYSIS

[52]      Section 20 of the Act provides that the right to exclusive use is deemed to be infringed by a person not entitled to such use under the Act who sells, distributes or advertises wares in association with a confusing trade mark:

[53]      Under s. 20 it is not necessary for the wares to be in the same general category. InMiss Universe Inc. v. Bohna, [1995] 1 F.C. 614 (F.C.A.), Décary J.A. said at 625:

For a likelihood of confusion to be found, it is not necessary that the parties operate in the same general field or industry, or that the services be of the same type of quality. Trade-marks for wares and services of one quality intended for one class of purchasers may be confusing with trade-marks for wares and services of a different type or quality, intended for a different class of purchasers.

[54]      The use of a trade mark creates confusion with another trade mark when the use of the two marks is likely to give the impression that the wares used in association with these trade marks are made or sold by the same person. In United States Polo Assn. v. Polo Ralph Lauren Corp., [2000] F.C.J. No. 1472, Malone J. said the following at para. 18:

. . . the question is whether the ordinary consumer will, on seeing the later mark, infer as a matter of first impression that the wares with which the second mark is used are in some way associated with the wares of the earlier.

[55]      To decide whether trade marks create confusion, the Court must look at all the circumstances of the case, including those set out in subsection 6(5) of the Act:

[56]      I will therefore apply each of these tests to the facts in the case at bar.

The inherent distinctiveness of the trade marks

[57]      The first point to be considered is whether the mark is well established. This Court has held that trade marks containing words that suggest the wares or services offered by their owner are considered as weak marks which are accordingly only entitled to a low level of protection (SkyDome Corp. v. Toronto Heart Industries Ltd., [1997] F.C.J. No. 275). Further, a trade mark with a word in current use has an inherently lower distinctiveness and the degree of protection granted by the Court is limited (Clorox Co. v. Sears Canada Inc., [1992] 2 F.C. 579 (T.D.)). On the other hand, a trade mark made up of a unique or invented word has inherently much greater distinctiveness and deserves more extensive protection (Pink Panther Beauty Corp. v. United Artists Corp., [1998] 3 F.C. 534 (F.C.A.)).

[58]      I feel that the plaintiff's marks VEUVE CLICQUOT and CLICQUOT have significant inherent distinctiveness and deserve extensive protection. The word "Clicquot" is invented and the evidence showed that apart from the defendants' marks there was no similar mark on the market in Canada.

Length of use

[59]      The period during which a mark has been in use is a factor which may create confusion about the origin of wares or services. As compared with a newly emerging mark, a mark which has been used for a long time is deemed to have made a certain impression on consumers.

[60]      In the case at bar, I consider that this criterion of assessment favours the plaintiff. The latter's registration TMA 242,785 for the mark VEUVE CLICQUOT indicates a claim of use of the mark in Canada for champagnes since at least 1899. At the same time, the defendants are claiming much more recent use for the marks CLIQUOT and CLIQUOT "UN MONDE À PART", namely use since 1995.

The degree of resemblance between the trade marks

[61]      When the Court is confronted with similar marks, it must assess the impression those marks have made on the public. In general, it must look at a mark as a whole, and not dissect it and make a detailed examination of it. However, it is still possible to identify characteristics which are likely to be conclusive in determining the public's perception.

[62]      The plaintiff argued that there was a great degree of similarity between its trade marks and those of the defendants. Although the defendants' marks are CLIQUOT and CLIQUOT "UN MONDE À PART", the plaintiff argued that the word "Cliquot" is the key aspect of these trade marks. The plaintiff further maintained that the fact the plaintiff's mark is written "Clicquot" and the defendants' mark is written "Cliquot" does nothing to eliminate the confusion. I agree that the evidence supports this argument.

[63]      The plaintiff's evidence established that magazines and advertising use the word "Clicquot" only to refer to the plaintiff's products.

[64]     The best evidence comes from the testimony of Ms. Gauthier, who testified that it was only "Clicquot" that she saw and retained.

[65]      On the second point, it should be noted that the test for confusion between trade marks must be considered from the standpoint of the consumer, who is not on his guard and who simply has an imperfect memory of having seen or heard the infringed mark (Culinar Inc. v. Gestion Charaine Inc., [1987] F.C.J. No. 633). Consequently, the fact that the plaintiff's mark is written "Clicquot" and the defendants' mark is written without the letter "c" does nothing to eliminate the risk of confusion so far as the consumer with an imperfect memory of the trade marks is concerned.

[66]      Consequently, I feel that there is a great degree of resemblance between the marks of the plaintiff and those of the defendants.

The nature of the wares, services or businesses and the nature of the trade

[67]      When trade marks are similar the degree of resemblance between the wares bearing those marks is an important factor in determining whether there is a likelihood of confusion. In the case at bar, the plaintiff's trade marks are registered in association with champagnes. The defendants' marks, on the other hand, are registered in association with the retailing of women's clothing.

[68]      The plaintiff maintained that the evidence showed a consistent connection between its activities and those having to do with the world of fashion. In this respect, in the plaintiff's submission, there is neither a great gulf nor even a small one between its activities and those of the defendants, simply a bridge. I do not feel that the evidence supports such a claim.

[69]     The fact that the plaintiff has done advertising in women's magazines does not suffice to establish a bridge between the plaintiff's principal activity and that of the defendants. As I indicated earlier, the evidence was that women are only one market targeted by the plaintiff as consumers of its champagne. There is no indication that the plaintiff intends to extend its trade marks to the world of fashion.

[70]      The plaintiff noted that it sells various clothing articles in the store it operates in Reims and that those articles are also sold on the site operated by the American subsidiary Clicquot Inc. in the U.S. In my opinion, the fact that the plaintiff sells some promotional articles does not establish that a connection exists between its activities and those of the defendants. Those items remain promotional articles and nothing more.

[71]      I also reject the plaintiff's argument that its trade mark is elastic and that it is possible for it to be extended into the fashion field in future. A similar argument was dismissed by this Court in Seagram (Joseph E.) & Sons Ltd. v. Registrar of Trademarks (1990), 38 F.T.R. 96. In that case, the plaintiff was arguing that the general trend toward diversification in business might lead the consumer to assume that its liquor business was connected to the respondent's real estate brokerage. MacKay J. dismissed that argument. At para. 35, he said the following:

[...] I do not agree with this proposition. In my view, consideration of future events and possibilities of diversification is properly restricted to the potential expansion of existing operations. It should not include speculation as to diversification into entirely new ventures, involving new kinds of wares, services or businesses.

[72]      Despite the expert testimony of Mr. Simard that an extension of the mark CLICQUOT to other associated luxury fields is plausible, I feel that the evidence did not show that the plaintiff intended to exploit any areas other than that of champagne. If the plaintiff really intended to extend its marks to the fashion field, its strategic plans would have reflected that.

[73]      In this regard, the fact that the plaintiff dropped Givenchy perfumes when it was acquired by the LVMH group in 1987 is a strong indication that it does not intend to extend its marks to any products other than champagne.

[74]      For all these reasons, I consider that there is no connection between the plaintiff's activities and those of the defendants.

All the surrounding circumstances

[75]      Subsection 6(5) of the Act provides that a court should look at all the relevant factors listed and make a decision which takes each one appropriately into account. Although I have found that the mark "Clicquot" is well known and unique, and deserves extensive protection, that is not conclusive. The fact of being well known does not by itself provide absolute protection for a trade mark. It is one factor which must be assessed together with all the others.

[73]      I feel that the key factor is the significant difference between the plaintiff's wares and those of the defendants. The plaintiff is well known for its champagnes, while the defendants operate women's clothing stores. The plaintiff's activities and those of the defendants are so different that there is no risk of confusion in consumers' minds. In my opinion, it is not likely that a consumer would think the plaintiff was affiliated with the defendants or that the plaintiff had granted a third party a licence to allow it to use the distinctive part of its mark in association with a women's clothing store.

[77]      In Toyota Jidosha Kabushiki Kaisha v. Lexus Foods Inc., [2001] 2 F.C. 15 (F.C.A.), the question was whether the appellant could register the mark "Lexus" in association with preserves, although that mark was registered by the respondent and used in association with automobiles. The Federal Court of Appeal held that the mark was registrable because there was no risk of confusion. At para. 10, the Court said the following:

Another matter on which the Trial Judge seemed to have placed great weight was the fact that the word Lexus was a "coined word". While that may well be a factor worth considering in deciding whether there might be confusion, it cannot control the outcome of the case. Ordinary words used in trade-marks in relation to certain wares can be used in relation to other wares if there is no confusion in the circumstances. Similarly, coined words may also be so used as long as no confusion results. The legislative provisions are controlling, not the fact that a trade-mark owner has obtained registration of a new word coined by it.

[78]      A similar conclusion was reached in Pink Panther Beauty Corp., supra. In that case the appellant sought to register the trade mark "Pink Panther" for a proposed use in association with beauty products. The Court found no connection between the parties' products and services, and consequently held that there was no risk of confusion. The deciding factor was the enormous difference between the type of wares and the nature of the appellant's and the respondent's businesses. At para. 51, the Court said the following:

United Artists produces movies. It does not manufacture or distribute beauty products. United Artists' products are not likely to be made available in the same places of trade as the appellant's products. Shampoo is not sold in movie theatres or video stores. Videos are not available in beauty parlours. These are facts recognized by the Trial Judge, but they bear emphasizing. What the Trial Judge did not give sufficient weight to is that, not only were the wares in each case completely disparate, but there is no connection whatsoever between them. As I stated earlier, where no such connection exists a finding of confusion will be rare.

[79]      The plaintiff sought to distinguish the case at bar by arguing that a connection had been clearly established between the field of women's fashions and the plaintiff's activities. I also reject that argument for the reasons already mentioned.

[80]      In light of the great difference between the parties' wares in the case at bar, I consider that the defendants' trade marks CLIQUOT and CLIQUOT "UN MONDE À PART" do not create any confusion with those of the plaintiff. Consequently, use of those trade marks is not infringement of the plaintiff's marks within the meaning of s. 20 of the Act.

[81]      The plaintiff further argued that the use of the mark "Cliquot" by the defendants was a breach of paragraphs 7(b) and (c) of the Act. Paragraph 7(b) provides that no person shall direct public attention to wares in such a way as to cause confusion between his wares and those of another, while paragraph 7(c) prohibits anyone passing-off other wares for those requested:

[82]      Paragraph 7(b) is a statutory statement of the tort of passing-off. This is a form of misrepresentation by which a businessman profits from someone else's goodwill gratuitously by pretending that his products, services or business are those of the other person ([1977] 2 S.C.R. 134">MacDonald v. Vapor Canada Ltd., [1977] 2 S.C.R. 134).

[83]      In order to succeed in an action for passing-off, a plaintiff must establish three points: the existence of goodwill, the deceptive representation which has misled the public and actual or potential damage to the plaintiff (Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120).

[84]      The right to be protected against deceptive marketing is associated with the distinctiveness acquired by use of a name, mark or product. That distinctiveness is due to the fact that the business or product has over time acquired well-established goodwill in the market. In the case at bar, I am satisfied that the evidence showed that the plaintiff's mark CLICQUOT is a distinctive mark which possesses goodwill in connection with the sale of champagnes. However, I am not persuaded that the evidence showed that this mark has any goodwill in the women's fashion industry.

[85]      Despite the plaintiff's submissions, I feel there is no connection between its wares and the women's fashion industry. As I indicated earlier, the evidence showed that the plaintiff's association with the world of fashion was limited to targeting the female market as a consumer of its champagne products.

[86]      I further consider that no confusion would be likely to result from the use of the mark "Cliquot" by the defendants. The rule is that there is a risk of confusion when a business uses the name, trade mark or packaging of a product so as to create confusion in the minds of the consumer, the impression that its business is that of another well-established business, that it is a subsidiary or that it is in some way related (United States Polo Assn., supra). In my opinion, it is not likely that a consumer would think that the stores operated by the defendants are connected to the plaintiff. The two parties' wares and distribution channels are so different that there is no risk of confusion.

[87]      Consequently, I feel that the use of the trade mark "Cliquot" by the defendants is not a breach of paragraph 7(b) of the Act. Further, in view of the difference between the plaintiff's wares and those of the defendants, I also feel that there is no breach of paragraph 7(c) of the Act.

[88]      The plaintiff further maintained that the use of the mark "Cliquot" by the defendants reduced the value of the goodwill attaching to its mark. Section 22 provides that no person shall use a trade mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto:

[89]      In Clairol International Corporation v. Thomas Supply & Equipment Company Limited, [1968] 2 Ex. C.R. 552, Thurlow J. explained the scope of this provision, at 573:

Then what is meant by "depreciate the value" of such goodwill. To my mind this means simply to reduce in some way the advantage of the reputation and connection to which I have just referred, to take away the whole or some portion of the custom otherwise to be expected and to make it less extensive and thus less advantageous. As I see it goodwill has value only to the extent of the advantage of the reputation and connection which its owner enjoys and whatever reduces that advantage reduces the value of it. Depreciation of that value in my opinion occurs whether it arises through reduction of the esteem in which the mark itself is held or through the direct persuasion and enticing of customers who could otherwise be expected to buy or continue to buy goods bearing the trade mark. It does not, however, as I see it, arise, as submitted by Mr. Henderson, from danger of loss of exclusive rights as a result of use by others as this in my view represents possible loss of exclusive rights in the trade mark itself rather than reduction of the goodwill attaching to it.

[90]      The plaintiff maintained that the case at bar is the very type of case to which s. 22 applies. The mark VEUVE CLICQUOT is a luxury mark which the defendants have appropriated in order to operate stores which give certain appearances of luxury. If a luxury mark is associated with products which do not have the quality of the products traditionally associated with that area, this may undermine the reputation and credibility of a luxury mark.

[91]      The plaintiff submitted the expert testimony of Ms. Abitbol. She cited the "Cardin" case, in which the mark PIERRE CARDIN was associated with a very broad range of products of very unequal quality, such as kitchen wares, bathroom accessories, perfumes, cosmetics, household linen and luggage. The result of these various uncontrolled associations was to cause the PIERRE CARDIN mark to lose its prestige and credibility as a luxury mark.

[92]      In my opinion, the circumstances in the "Cardin" case are different from those in the case at bar.

[93]      First, the wares offered for sale in the defendants' boutiques bear no label or other identification mentioning the name of the store, and so are not in any way identified with the word "Clicquot". In this regard, there is nothing which associates the defendants' products with the plaintiff's mark.

[94]      Further, as Ms. Abitbol explained, in the "Cardin" case the company granted several hundred licences for an extremely broad range of products of very unequal quality. This caused the PIERRE CARDIN mark to lose its prestige and credibility. In the case at bar, on the other hand, I have concluded that it is not likely that a consumer would believe that the plaintiff was affiliated to the defendants, or that the plaintiff had granted a third party a licence allowing it to use the distinctive part of its mark in association with the operation of a women's clothing store. Although confusion is not the test laid down in s. 22, I consider that it is still necessary for there to be an association between the two marks. In other words, a consumer has to be able to make a connection between the parties in order for there to be depreciation of the goodwill attaching to the trade mark.

[95]      In Canadian Council of Blue Cross Plans v. Blue Cross Beauty Products Inc., [1971] F.C. 543 (T.D.), the defendants were selling beauty products whose labels included the words "Blue Cross" and a blue-coloured cross. The plaintiffs, who had consistently used the words "Blue Cross" and the symbol of a blue cross, relied inter alia on s. 22 of the Act. Collier J. held that the fact that the parties were working in completely different fields eliminated the possibility that the goodwill attaching to the plaintiffs' mark would be depreciated. He said the following at 553-54:

[...] Assuming the defendants have in fact "used" the plaintiffs' trade mark, the blue cross symbol, I again am of the opinion that that use would not likely have the effect of depreciating the value of whatever goodwill attaches to that trade mark . [...]

. . . . .

In this case the contest is between services and wares in unrelated fields of business activity. There is no evidence of actual depreciation of goodwill nor, in my mind, any evidence from which an inference of likelihood of depreciation can be drawn.

[96]      In the case at bar the evidence was that the plaintiff's sole purpose was the sale of champagne, and that it was not interested in getting into other areas. In my view a consumer who saw the word "Cliquot" used in the defendants' stores would not make any link or connection to the plaintiff. Consequently, there will be no association between the "Clicquot" luxury mark and the defendants' "non-luxury" wares.

[97]      For all these reasons, I conclude that the defendants' trade marks do not depreciate the value of the goodwill attaching to the trade mark CLICQUOT, and that there has been no breach of s. 22 of the Act.

[98]      Alternatively, the plaintiff asked the Court to strike out the registrations TMA 479,359 (CLIQUOT) and TMA 479,367 (CLIQUOT "UN MONDE À PART") for the following reasons. First, these marks were not registrable on the date of their registration because of the confusion they created with the plaintiff's registered marks, contrary to paragraphs 12(1)(d) and 18(1)(a) of the Act. Second, the defendant CHARMANTE was not the person entitled to obtain the registrations, since on the date of their initial use these marks created confusion with the plaintiff's trade marks contrary to paragraphs 16(1)(a) and (c) and subsection 18(1) in fine of the Act. Third, these marks were not distinctive of the defendants' services at the time the proceedings to strike out were brought, contrary to paragraph 18(1)(b) and subsection (2).

[99]      I will deal with each of these grounds.

[100]    Paragraphs 12(1)(d) and 18(1)(a) of the Act indicate that registration of a trade mark is invalid if the mark creates confusion with a registered trade mark:

[101]    The test of confusion is determined by s. 6 of the Act. Since in applying the tests set out in subsection 6(5) I have concluded that the defendants' trade marks do not create confusion, I feel that its marks are valid.

[102]    On the plaintiff's second ground, paragraphs 16(1)(a) and (c) and subsection 18(1) in fine of the Act indicate that any applicant who has filed an application in accordance with s. 30 for registration of a trade mark that he has used or made known in Canada in association with wares is entitled to secure its registration in respect of those wares unless the mark is confusing with a trade mark or trade name previously used by another person:

[103]    For the reasons already stated, I consider that the defendant CHARMANTE could register its marks because there is no confusion between its trade marks and those of the plaintiff.

[104]    On the plaintiff's third argument, paragraph 18(1)(b) and subsection (2) indicates that a trade mark is invalid if it is not distinctive, that is, if it is not distinctive at the time proceedings bringing the validity of the registration into question are commenced.

[105]    The courts have held that a trade mark may become non-distinctive when it deviates from its registered form, becomes generic or part of the public domain, is improperly assigned or is improperly granted (Registrar of Trade Marks v. Compagnie Internationale pour l'Informatique CII Honeywell Bull, [1985] 1 F.C. 406 (F.C.A.); Aladdin Industries, Inc. v. Canadian Thermos Products Ltd., [1969] 2 Ex. C.R. 80; Heintzman v. 751056 Ontario Ltd. (1990), 38 F.T.R. 210; Marketing International Ltd. v. S.C. Johnson & Son Limited, [1979] 1 F.C. 65 (F.C.A.)).

[106]    In the case at bar, there is nothing in the evidence to support the argument that the defendants' marks are not distinctive. The case noted by the plaintiff, Bridgestone/Firestone Inc. v. Automobile Club de l'Ouest de la France, [1995] F.C.J. No. 851, relates to registration of a mark creating confusion and does not have to do with paragraph 18(1)(b) and subsection (2) of the Act. I also reject the plaintiff's argument that the presence of its Internet site has made the defendants' marks non-distinctive. In my opinion, the plaintiff provided no valid evidence to indicate how the defendants' trade marks had become non-distinctive.

[107]    For these reasons, I feel there is no valid basis for striking out the defendants' trade marks.

ORDER

THIS COURT ORDERS that the plaintiff's action be dismissed with costs.

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

                                SOLICITORS OF RECORD

FILE:                                                                               T-2080-98

STYLE OF CAUSE:                                                     VEUVE CLICQUOT PONSARDIN,

MAISON FONDÉE EN 1772

Plaintiff

and

LES BOUTIQUES CLIQUOT LTÉE

and

MADEMOISELLE CHARMANTE INC.

and

3017320 CANADA INC.

Defendants

PLACE OF HEARING:                                                Montréal, Quebec

DATE OF HEARING:                                                  November 18-21, 2002

REASONS FOR ORDER:                                           Danièle Tremblay-Lamer J.

DATE OF REASONS:                                                  January 30, 2003

APPEARANCES:

Jacques Léger                                                                  FOR THE PLAINTIFF

Barry Gamache

Alexandra Beshlian

Brian Riordan                                                                     FOR THE DEFENDANTS

Alexandre Ajami

SOLICITORS OF RECORD:

Léger, Robic, Richard                                                        FOR THE PLAINTIFF

Montréal, Quebec

Pouliot, Mercure                                                                FOR THE DEFENDANTS

Montréal, Quebec