The Curious Story of the MARLBORO Trade-mark in Canada

June, 2013

Smokers and non-smokers alike are familiar with the ‘Marlboro’ trade-mark. It’s a world famous brand of cigarettes and the best-selling brand in the world. Its red and white packaging and the Marlboro man have become iconic.

In the United States and most other countries in the world the trade-mark ‘Marlboro’ used with tobacco products is owned by Philip Morris, except, that is, in Canada. Here it’s owned by Imperial Tobacco who just happens to be Philip Morris’ biggest competitor. That dichotomy has led to years and years of litigation.

If you look up the registered trade-mark MARLBORO in the Canadian Trade-marks Office (TMDA 55,988), you’ll see that it was filed on September 1, 1932, and registered on December 27, 1932. There’s even a Hamilton connection. The registration states that the initial registrant was The Tuckett Tobacco Company Limited of Hamilton, Ontario. It seems that The Tuckett Tobacco Company had acquired some rights from Philip Morris U.S. to sell Marlboro-branded cigarettes in Canada and the company did so from 1924. In this context, courts have inferred that The Tuckett Tobacco Company had acquired the rights to the Marlboro trade-mark from Philip Morris. Eventually Imperial Tobacco came to own The Tuckett Tobacco Company and consequently the MARLBORO registered trade-mark in Canada.

In 1958 Philip Morris re-branded its Marlboro cigarettes around the world incorporating the distinctive red rooftop design. In Canada they used that same package to house their cigarettes except that they branded them with the word Matador instead of Marlboro.

For many years after Philip Morris alternated between offering to buy the trade-mark MARLBORO from Imperial Tobacco and trying to invalidate the MARLBORO trade-mark in Canada. In a 1980s case Philip Morris failed in its attempt to invalidate the MARLBORO registered trade-mark.

As you can understand the existence of the Imperial Tobacco registration for MARLBORO remains a constant irritant for Philip Morris. Most of the litigated cases have not drawn much attention until now.

A case in the Federal Court of Canada, Philip Morris Products S.A. v. Marlboro Canada Limited, 2010 FC 1099, concerned an intriguing question on which past case law gives us no guidance. Can the use of a trade-mark without a name infringe a registered trade-mark for a word?

Because of Philip Morris’ widespread marketing of the trade-mark Marlboro outside of Canada and around the world, Canadians are familiar with the trade-mark and the packaging housing that brand of cigarettes. However, in Canada Philip Morris is not permitted to use the MARLBORO trade-mark in Canada for its tobacco products. Instead, supposedly in order to maintain some continuity in Canada with its Marlboro-branded cigarettes outside of Canada, Philip Morris does use the red rooftop design here and it acquired a registered trade-mark for that design around 2005.

So, recently Philip Morris began to provide its cigarettes housed in packages virtually identical to the packages it uses in the United States, including the red rooftop design, except that it had no name. It instructed retailers to refer to the cigarettes as ROOFTOP cigarettes.

Canada has what is called a ‘dark market’ for cigarettes. This means that consumers can no longer look at the display case and point out what brand they want. Instead they have to verbalize the brand name for the clerk who will take out the appropriate brand and size of cigarettes. Overwhelmingly, despite the Philip Morris cigarettes having no brand name, when consumers asked for ‘Marlboro’ cigarettes, the vast majority of consumers meant the no-name Philip Morris cigarettes not the Imperial Tobacco MARLBORO cigarettes.

This didn’t sit well with Imperial Tobacco, so they sent a cease-and-desist letter to Philip Morris. The parties couldn’t reach an agreement. Therefore Philip Morris asked the court to make a declaration that the sale of its cigarettes without any name did not infringe the MARLBORO trade-mark of Imperial Tobacco.

At the trial court level, Imperial Tobacco argued that confusion with its MARLBORO trade-mark was indeed happening because the absence of any word mark on the rooftop package and the overall presentation and get up of the package evoked in the minds of consumers an association with the Marlboro brand used in the U.S.

The court found that there were several reasons why there was no confusion contrary to law between the Philip Morris’ no-name branded cigarettes and cigarettes branded with the trade-mark MARLBORO: (i) the MARLBORO branded cigarettes are made with a Virginia blend of tobacco whereas the no-name package cigarettes are an American blend; (ii) Imperial Tobacco distributes MARLBORO branded cigarettes differently from how Philip Morris distributes the no-name cigarettes; (iii) Philip Morris made efforts to reduce the likelihood of confusion (e.g.) telling retailers not to call their no-name cigarettes ‘Marlboro’; and (iv) any initial confusion between the two products would be diminished when through question and answer with the retailer a consumer could clarify which ‘Marlboro’ cigarettes the consumer wanted. The decision wouldn’t stand for long.

The appeal court disagreed with the lower court’s interpretation of the confusion test. It instead found that the use of the no-name package did indeed infringe the rights of Imperial Tobacco in the MARLBORO trade-mark. The court found that the fact could not be ignored that even though the Philip Morris cigarettes had no brand name, the appearance of the package gave rise to ideas in the minds of consumers one of which was that the cigarettes were related to, or were, the Marlboro-branded cigarettes that Philip Morris sells in the United States and elsewhere.

The Canadian ‘dark market’ contributed to the confusion between the two brands of cigarettes, as consumers can no longer point at a package of cigarettes, rather a product must be specifically requested. Therefore, because the Philip Morris product has no name, consumers had to refer to the product using a word or words not necessarily displayed on the product.

The court found that the combination of elements on the no-name package, such as the rooftop design, the crest with the letters “PM”, the phrase “Come to where the flavour is”, suggested to a significant number of consumers an association with the United States brand Marlboro owned by Philip Morris. And in a ‘dark market’, this caused many consumers to refer to two different products created by two different parties by the same name “Marlboro”. As a result the court found that the use of Philip Morris’ no name package did infringe the rights of Imperial Tobacco in the registered trade-mark MARLBORO because of the likelihood of confusion that exists between them.

As leave to appeal to the Supreme Court of Canada was dismissed, the standoff continues.

Conclusion

There are three things that can be taken away from this whole dispute. One, register your trade-marks as early as possible and do everything possible to maintain them. Two, be very careful about selling your trade-marks to any other party, especially a competitor. And three, doing anything that causes confusion with a registered trade-mark, even if no trade-mark or name is used, can be remedied under our law.

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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information.  You can reach Ryan at rsmith@fdhlawyers.com and (905) 287-2215.