BMW, Nissan in trade-mark collision

For the London Free Press - July 23, 2007 Read this on Canoe

UPDATE: A reader pointed out that since this article was written, the Federal court of Appeal overturned the section 7 finding, saying that BMW had not "used" the "M" mark. Thus BMW was not successful in stopping Nissan from using any of the "M" marks. Read the decision.

Two auto giants recently sparred in court over several trade-marks. The dispute between BMW and Nissan arose over the letter M and its design.

BMW uses the M combined with a number or a word as a trade-mark for its M-class line of luxury vehicles, parts and accessories. Nissan uses the M for a line of cars under its Infiniti luxury line.

BMW was successful in part after the Federal Court found that BMWs proprietary rights in its M, M3, M5, M6 and "M and design" were violated contrary to section 7 (b) of the Trademarks Act. Nissan was liable under this section of the Act with respect to BMW's unregistered marks M and M6.

Section 7 essentially makes it illegal to pass off your wares as another's, or to cause confusion between your wares and another's.

BMW objected to the use by Nissan of the letter M standing alone in its advertisements and the use of M6 for a sports package developed for the Infiniti G35 or any other use of the letter M. The court found Nissan's use of the letter M in 2005 and the descriptor M6 created a likelihood of confusion between the sources of the wares of both BMW and Nissan.

However, BMW was unsuccessful in claiming Nissan was liable for infringement and depreciation of goodwill under sections 20 and 22 of the Act. The judge felt that Nissan did not infringe BMW's registered trade-marks M3, M5 and M and design after numerous witnesses were able to distinguish the marks. The witnesses' initial inference did not create any lingering confusion with respect to the source of the wares in any sense that would have confused their vehicle purchasing process.

BMW's goodwill was not significantly affected.

A large factor in the decision was the perspective the judge took in assessing the likelihood of a "mistaken inference." He did not take the perspective of a casual consumer somewhat in a hurry.

Rather, he considered the process as the buyer of a luxury, high-performance vehicle. The latter considers many more details and is more systematic in the buying process than the hurried buyer with an imperfect recollection of details.

In other words, trade-marks can be more alike for luxury cars than for breakfast cereal.

The case is under appeal. No doubt the appeal will see both parties suggesting the different results under the two different sections are difficult to rationalize -- but, of course, each picking a different one to support.

The partial judgment and order in favour of BMW has been stayed pending the appeal.