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Star power protection

Harley-Davidson case illustrates how a well-known trademark can actually decrease brand confusion
By John Simpson
July 04 2014 issue

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It pays to be famous. Nowhere is this truer than in trademark law. Consider the Federal Court of Canada’s recent decision in H-D USA v. Berrada [2014] F.C.J. No. 232.

The defendant in this case owned a Canadian trademark registration for “Screaming Eagle” associated with clothing stores and had also been selling Screaming Eagle-branded clothing in Canada continuously for 20 years. On almost any other day, that would defeat a later entrant’s claim for entitlement to sell “Screamin’ Eagle”-branded clothing in Canada — unless that later entrant was as famous as Harley-Davidson, the iconic American motorcycle company.

Justice André Scott found that there was no reasonable likelihood of confusion between the defendant’s Screaming Eagle trademark and the Harley-Davidson’s Screamin’ Eagle trademark that the latter had more recently started using in Canada with clothing and accessories. The court assessed the likelihood of confusion from the perspective of “the prime consumer” of Harley-Davidson’s Screamin’ Eagle clothing who (almost by definition) would be familiar with the motorcycle company and its various brands.

Noting that Harley-Davidson is one of the most famous trademarks in the world, the court reasoned that “[t]he average Harley-Davidson owner, who seeks Screamin’ Eagle clothing, also looks for the [Harley-Davidson] bar and shield logo and the distinctive orange and black colouring associated with Harley-Davidson.” The court concluded that the likelihood of confusion between the two trademarks in these circumstances would be “improbable if not impossible.”

Canadian trademark law, unlike U.S. trademark law, does not specifically define what constitutes a “famous” trademark. Very generally, it refers to a trademark that is so well known that consumers are likely to associate it with more than just the category of goods or services with which it is used. Fame has become somewhat of a nuclear weapon in Canadian trademark litigation. For instance, in another recent Federal Court decision (the COHIBA cigar case) the famous plaintiff was not only entitled to an exceptionally broad-scope protection for its marks but also to more relaxed evidentiary requirements to prove the notoriety of its trademark (i.e. popular media references, instead of expensive expert surveys).

The Screamin’ Eagle case is an interesting addition to the growing body of “famous” trademark cases in Canada for a few reasons.

First, it demonstrates how fame can negate the likelihood of confusion — the reverse of the more typical situation where the fame of a plaintiff’s trademark makes confusion with the defendant’s non-famous trademark more likely rather than less likely. In this case, the court found that confusion between the defendant’s Screaming Eagle trademark and Harley-Davidson’s Screamin’ Eagle was diminished because the latter is inextricably associated with the famous Harley-Davidson trademark and branding indicia. This shows how a non-famous sub-brand can benefit from the fame and goodwill of a house brand, not only from a marketing perspective but from a legal perspective as well.

Second, the case includes a very thorough application of section 22 of the Trade-marks Act which prohibits the use of any trademark in a manner that depreciates the value of the goodwill in a registered trademark. The defendants claimed that Harley-Davidson’s use of Screamin’ Eagle was likely to depreciate the goodwill in their  Screaming Eagle trademark.

The court rejected this claim. Considering the fame of the Harley-Davidson brand, the court found it more likely that the defendant’s trademark would be associated with (and therefore more likely to depreciate the value of the goodwill in) Harley-Davidson’s trademarks than the other way around. And any goodwill in the defendant’s trademark would be outweighed by the “greater brand recognition and fame” in Harley-Davidson’s trademarks.

Third, the case is a good example of how the intentions of a party alleging trademark infringement or “passing off” can be relevant. In addition to their section 22 claim, the defendants claimed that Harley-Davidson should be enjoined from selling its Screamin’ Eagle merchandise in Canada on the basis that it was misleading consumers and passing off its merchandise as being associated with the defendants and their products. Justice Scott questioned the defendants’ good faith in pursuing this claim, noting evidence that the defendants had deliberately tried to associate themselves and their brand with Harley-Davidson and to trade on its fame and goodwill. As a result, and quite aside from the  defects in their case, the defendants were denied any equitable relief  or injunction against the plaintiff, Harley-Davidson.

But for the fame of Harley-Davidson and the brand, this case would almost certainly have had the opposite result. There is no question that the Screamin’ Eagle used on clothing is confusing with Screaming Eagle used with clothing and clothing stores. However,  fame changes everything — in life as well as in trademark law.

John Simpson is the principal of Shift Law, an intellectual property and new media law boutique.

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