GlobalReport

Global Report: North America
CANADA: Federal Court of Appeal Endorses
Punitive Damages
The Canadian Federal Court of Appeal (FCA)
has endorsed the awarding of significant punitive
damages in a decision in the case of Lam
v. Chanel S. de. R.L., 2016 FCA 111, which
was handed down on April 11, 2016. This is
noteworthy because punitive damages are relatively
rare in Canada. In the same decision, the
FCA also endorsed the use of summary trial in
cases involving counterfeit goods.
The appellant, a repeat infringer who flouted
previous awards of the court, continued to deal
in knock-off Chanel merchandise after purporting
to sell her business to her children. In light
of some ambiguity in the trial judge’s decision,
the case was ultimately sent back to the trial
judge for redetermination.
The FCA confirmed both the appropriateness
of an award of nominal damages in cases
involving counterfeit goods and the awarding of
CA $8,000 per act of infringement to both the
trademark owner and its Canadian licensee.
More specifically, the FCA held, “The authorities
support a nominal damages award in a
case like this, where the defendants are uncooperative,
proof of actual damages is difficult
and it is hard to estimate the harm done to the
trade-mark owner’s goodwill through the sale
of inferior quality goods.” Para 17.
In endorsing an award of significant punitive
damages the FCA identified the factors that
warrant an award of significant punitive damages
as including: the need for deterrence, compensatory
damages being calculated on a nominal
basis due to the nature of the appellant’s
infringing acts, repeated violations, flouting of
court orders, and the attempts of the appellant
to obscure their involvement. Para 26.
This decision clears the way for future cases
involving counterfeit goods to proceed by way
of summary trial. The FCA held that “[c]ases
like the present, involving ongoing sales of
counterfeit goods by a defendant that seeks to
put forward a specious defense, are particularly
well-suited to being decided by way of
summary trial.” Para 16.
In a summary trial, almost all of the evidence is
in writing. The availability of summary trial is a
discretionary decision based upon a number of
factors, including whether credibility is at issue.
Contributor: Tamara Ramsey
Chitiz Pathak LLP, Toronto, Canada
Verifier: Timothy O. Stevenson
Smart & Biggar/Fetherstonaugh, Ottawa, Canada
INTA Bulletins Law & Practice—North America
Subcommittee
UNITED STATES: TTAB Refuses to Register Mark Used
in Selling State-Legalized Marijuana
The U.S. Trademark Trial and Appeal Board
(the Board) affirmed the refusal to register the
mark HERBAL ACCESS for “retail store services
featuring herbs” in the matter of In re Morgan
Brown, Serial No. 86362968 (T.T.A.B. July 14,
2016) (precedential). The Board based the refusal
to register on its finding that the services
at issue were illegal under federal law, so it
was not being used in lawful commerce.
The applicant’s own specimen of use demonstrated
that the applicant’s retail store was
engaged in the business of selling marijuana in
Washington State. While the Board noted that
marijuana has been legalized for adults in the
state, it found this state legalization immaterial
in light of the continued federal prohibition on
possession of marijuana under the Controlled
Substances Act, 21 U.S.C. §§ 801, et seq. It
held that federal registration requires the mark
to be used in commerce lawful under federal
law.
The Board also rejected the applicant’s argument
that the services which were listed on
the application, “retail store services featuring
herbs,” were themselves legal under federal
law. The Board found that there was objective
evidence that marijuana is considered a “herb”
and, accordingly, its sale would be covered by
the registration of the mark if it were allowed.
As the Board found this to be impermissible
under federal law, it denied registration.
Contributor: Richard Rivera
Gambrell & Russell, LLP, Jacksonville, Florida
Verifier: Cynthia Moyer
Fredrikson & Byron P.A., Minneapolis, Minnesota
Mr. Rivera and Ms. Moyer are members of the
INTA Bulletins Law & Practice—North America
Subcommittee.
UNITED STATES: Important New U.S. TTAB
Rules to Know for 2017
In an effort to provide more efficiency and
clarity to proceedings, conform rules to current
practice, and codify case law, the U.S. Patent
and Trademark Office (USPTO) published
Miscellaneous Changes to Trademark Trial and
Appeal Board Rules of Practice, 81 Fed. Reg.
69950 (Oct. 7, 2016) (Final Rules Notice),
effective for all cases filed and pending as
of January 14, 2017 (collectively, Amended
Rules). The Amended Rules mark the most
significant changes to practice before the
Trademark Trial and Appeal Board (TTAB) since
2007. A summary of some of the key rule
changes for inter partes proceedings before
the TTAB are discussed below.
All Submissions Must Be Filed through ESTTA
The TTAB’s filing system, the Electronic System
for Trademark Trials and Appeals (ESTTA) was
launched in 2002, and the vast majority of submissions
are currently made through ESTTA.
Under the Amended Rules, all submissions
must be filed through ESTTA unless extraordinary
circumstances or technical difficulties
prevent filing through ESTTA. In such cases,
which should be rare, a party may file on paper
pursuant to the procedures outlined in these
Amended Rules. However, extensions of time to
oppose and notices of opposition against applications
under Section 66(a) of the Trademark
Act, 15 U.S.C. Section 1141f(a), must be filed
through ESTTA, with no exceptions.
Change in Service Requirements
The TTAB, not the plaintiff, will now serve the
complaint on the defendant in an opposition or
cancellation proceeding by email or to the correspondence
address of record for the parties,
attorneys, or domestic representatives under
37 C.F.R. Sections 2.105(a)–(c) and 2.113(a)–
(c). The notice of institution will include a
web link or web address for the defendant to
access the electronic proceeding record. If the
notice of institution is returned to the TTAB as
undeliverable, additional notice may be given
by publication in the Official Gazette under 37
C.F.R. Section 2.118.
continued on page 36
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