A Leading Canadian IP Case: Famous Trade-marks and the Depreciation of Goodwill

Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23 Veuve Clicquot Ponsardin, Maison fondée en 1772 (Veuve), markets high-end wines and alcoholic beverages, and is particularly known for its champagnes. Veuve registered a series of trade-marks that included the word "CLICQUOT" for use on its products. A mid-priced women's clothing store opened at six locations in Quebec and Eastern Ontario under the name "Les Boutiques Cliquot". The operators of these clothing stores (Boutiques Cliquot) registered the marks CLIQUOT and CLIQUOT “UN MONDE À PART", which they had used since 1995. One of the operators of the stores had chosen to use CLIQUOT when she saw an advertisement for Veuve’s products in a magazine. The word CLICQUOT had attracted her attention because it reminded her of the expression “ça clique” (French for “this is great”), which was the reason for the different spelling from Veuve's trade-marks. The champagne maker sued the clothing store owners on two bases: trade-mark infringement and depreciation of the value of goodwill. The Supreme Court of Canada (SCC) unanimously found in favour of the defendants Boutiques Cliquot on both issues. On the issue of infringement, the SCC held that although CLICQUOT carried “an aura” beyond alcoholic beverages or champagne, Veuve had failed to meet the "likelihood of confusion" test to establish infringement. The SCC concluded that, on the evidence presented, consumers are unlikely to associate CLICQUOT, as a luxury brand, with a chain of mid-priced clothing stores. As a result, they would not likely be confused into thinking that the clothing stores and the products they sold were from the same source as the champagne. The SCC also found that Veuve failed to show that the use of CLIQUOT in the marketplace would depreciate the CLICQUOT trade-marks. While again recognizing that CLICQUOT carried “an aura” beyond the products it is generally associated with, the SCC found that, in this case, there was no evidence indicating that consumers made any association or mental connection between Veuve's trade-marks and the ones used by Boutiques Cliquot. Without this mental connection, it was not possible for Boutiques Cliquot to depreciate Veuve’s CLICQUOT trade-marks. Hung Nguyen discusses how this case is significant in his trade mark practice: “The Veuve Clicquot case is important to me for two reasons. First, it confirmed that there is no absolute protection for famous trade-marks in Canada. Fame is but one factor that must be weighed against all the surrounding circumstances. In other words, fame does not ‘trump’ all factors. Second, it clarified the Canada’s anti-dilution provision (section 22), and noted that the exact trade-mark need not be used by the defendant for there to be dilution. In other words, dilution is still possible even if the defendant’s mark varies slightly from the registered mark of the plaintiff, such as CLIQUOT and CLICQUOT.” Summary by: Cheryl Cheung