Trademarked Stork Upheld in Canadian Copyright Case

A recent trademark infringement case between Stork Market Inc v. 1736735 Ontario Inc. (Hello Pink Lawn Cards Inc), 2017 FC 779 has resulted in a win for the plaintiff and retribution in the amount of $30,000.  The copyright and trademark case deals with competitors in the business of renting and installing lawn signs for special occasions such as birthdays, anniversaries, and graduations. The trademark infringement case is based on claimed infringement of Stork Market Inc. and its registered trademarks of two images of a stork holding a baby above its head and under a banner that states the sex of the baby (shown below).

BACKGROUND

Mr. Russell Challenger designed the two images (shown above) used by the plaintiff Stork Market Inc. in 2007. Mr. Challenger is a commercial artist and a long-time friend of Mr. Riccardo Fronte, owner and operator of The Stork Market Inc. The artist assigned the copyright of the images to Mr. Fronte in November of 2009. Mr. Fronte then applied for registration of the two images under the Trade-marks Act. By April of 2011 the images were officially registered under Mr. Fronte’s name.

The defendant and sole director, officer, and shareholder of Hello Pink lawn Cards Inc., Mr. Cirpriano Primicias III was self-represented at trial.

While Mr. Fronte specializes in signage related to new births, Hello Pink specializes in signage for numerous celebratory occasions.

Mr. Primicias, the defendant, purchased two signs announcing the birth of the baby and its sex on eBay from suppliers in Pennsylvania area. These signs (shown below) were not being contested in the case.

However, in 2010 Hello Pink began renting lawn signs with new stork images (shown below). It was these signs that were alleged to infringe the plaintiff’s trademarked signage and put the copyright of the signage into question.

Mr. Fronte called the defendant to request he stop using the signs. Upon the defendant’s refusal a cease-and-desist letter was sent in August of 2011.

Subsequently litigation began with three witnesses testifying to the development of the plaintiff’s copyrighted signage, the registration of the Plaintiffs’ marks and to actual confusion. Mr. Primicias on the other hand was his own sole witness.

CASE ANALYSIS

Based on arguments from both parties the issues are as follows:

1. Are the Registrations of the Fronte Marks valid?

The judge found that the registration was valid, because Mr. Fronte was the sole owner and operator of his business. The Court held that in such a case an oral license used by Stock Market is sufficient. Thus, the plaintiff had the benefit of s. 50(1) of the Trade-marks Act, and the defendants’ argument that the images were not distinctive of a single source did not give a basis to find them invalid.

The doctrine of functionality explained by the Supreme Court of Canada in Kirkbi AG v Ritvik Holdings Inc, 2005 SCC 65 (CanLII) [Kirkbi], says that the Act recognizes that it does not protect the utilitarian features of a distinguishing guise. Trademark law doesn’t prevent the competitive use of utilitarian features of products, but that it fulfils a source distinguishing function. A single individual or business cannot monopolize the actual physical product such as a lawn sign.

In Kirkbi, the manufacturer of LEGO toys, the plaintiff was unsuccessful in arguing before the Federal Court, the Federal Court of Appeal, and later the SCC that the configuration of its bricks was subject to trademark protection. The SCC ruled the public is not constrained from using any utilitarian features of a distinguishing guise. In other words the fact that the distinguishing guise is primarily functional means that it cannot be trademarked.

In this case, the defendant argued that the design elements of the New Hello Pink Images were a function of the commercial objectives of incorporating a customizable baby and the raising of the hands or wings is a common celebratory gesture that is aesthetically functional. However, after looking over a large number of ‘traditional’ stock images the judge was not convinced that the commercial and functional objectives of the customizable baby lawn signs of the defendant – confusingly similar to plaintiff’s trademarked imagery of the stock – were sufficient.

Furthermore, the defendant did not cite any authority to support that the plaintiff should be disentitled to copyright and trademark protection of the lawn signage imagery.

2. Have the New Hello Pink Images been used as trademarks?

It was argued that the New Hello Pink images were not used as trademarks and therefore cannot be in violation of the law.  Compagnie Générale des Etablissements Michelin – Michelin & Cie v National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW – Canada) (1996), 1996 CanLII 11755 (FC), [1997] 2 FCR 306 (FCTD) [Michelin] was cited to establish the former.

However, the judge found that Hello Pink’s images also serve a trademark function of distinguishing its goods and services from those of others. The signs were advertised on the main website of the business, on Kijiji, at a local hospital, and Mr. Primicias also confirmed that the lawn signs themselves serve as a form of advertisement.

3. Have the Defendants infringed the Plaintiffs’ rights under ss. 19 and 20 of the Trade-marks Act?

Infringement under the Trade-marks Act, Section 19 of the Trade-marks Act grants the owner of a registered trademark the exclusive right to use it throughout Canada. Section 20 provides that the right of the owner of a registered trademark to its exclusive use is deemed to be infringed by a person who is not entitled to use the trademark to sell, distribute or advertises any goods or services in association with that trademark. Tonka Corp v Toronto Sun Publishing Corp (1990), 41 FTR 56, was cited to establish Mr. Fronte had the implied oral license with respect to copyright and the right to claim infringement.

4. Did the Defendants violate s. 7(b) of the Trade-marks Act?

Here the court found that there may have been actual or at least potential damage due to the confusion in the marketplace where the two parties were the only two companies in direct competition with each other. Mr Fronte’s business experienced rapid growth and success in its inception in part due to the signage imagery. It declined somewhat after three years of operations when the New Hello Pink imagery made its appearance.

5. Are the Stork Market Images subject to copyright owned by Mr. Fronte?

The plaintiff confirmed at the trial that Mr. Fronte asserts ownership of copyright in the Stork Market and the copyright claim. However, because neither of the parties raised the issue of copyright before the court dismissed the plaintiff’s copyright claim for unrelated reasons.

6. If so, did the Defendants infringe this copyright?

A striking similarity between two works alone is not sufficient to prove plagiarism, there must be evidence of access to the copied work or a connection between the two works for a court to find that the infringement has occurred. Accordingly, the court held that the defendant did not infringe Mr. Fronte’s copyright. While Mr. Primicias had potential access to the plaintiff’s signage imagery, the similarities were not so alike that the judge could support a finding of copyright infringement.

7. If the Plaintiffs succeed in establishing any of the causes of action asserted, to which remedies are the Plaintiffs entitled?

The Court held that the plaintiff had established a cause of action for trademark infringement and Stork Market had established its passing off claim, however the damages were suffered solely by the the company Stork Market, not Mr. Fronte personally. The Court ordered an award for damages of $30,000 to Stork Market and that Hello Pink destroy all materials relating to the trademark infringement.