Last week, complaints from some prominent brands forced the City of Toronto to pull its anti-littering ad campaign. The creative ads each put together packages from two discarded products to spell unflattering words, the idea being that "littering says a lot about you." Words included "Lazy" and "Low Life."
But wait, isn't there a legal exemption for satire, parody and criticism? Couldn't the city have kept its ads up, even if some companies were not happy with how their trademarks were used? After all, if those ads could be considered clever parody on consumer culture and littering, perhaps they could be considered "fair dealing."
The concept of fair use comes from copyright law, but trademarks law and copyright law are not the same thing. And parody is not a good defence for the misuse of a trademark, explained Cynthia Rowden, a partner at Bereskin & Parr LLP.
"If you show trademarks in a bad light, chances are the brand owner will complain," she said.
That's because the idea behind trademark law is that the value of a brand is so inextricably tied to a company's goodwill – depreciating that goodwill can have a real impact on business.
For that reason, competitive advertising has been subject to a great deal of debate, and litigation. Companies that want to sell their product by denigrating the competitor can run into problems if they use competing trademarks. The law in Canada makes it more difficult to do this kind of advertising here than in the U.S., Ms. Rowden explained.
(Trademark rights have some reasonable limits: bona fide use of a personal name is not infringing, so a real Mr. Kellogg can use his name without infringing the Kellogg's mark. Similarly, bona fide use of a geographic or descriptive name is not infringing, so someone can refer to goods or services as coming from Hollywood, assuming they do, even though that is a clothing brand, subject to such use not depreciating goodwill.)
The Trademarks Act says that "no person shall use a trademark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto."
Copyright, on the other hand, is a different concept: when a book is written, for example, its material can be used in certain ways. Copyright law reflects that. Same for photographs and other artistic works all generally protected by copyright law, and thus subject to the fair use exceptions in the Copyright Act.
But parody has failed before as a defence in the case of trademarks. For example, in 1997, during a labour dispute in Nova Scotia, union representatives used an image drawn to look like the Michelin man, a.k.a. Bibendum, in their campaign materials. Pamphlets featured the mascot "arms crossed, with his foot raised, seemingly ready to crush underfoot an unsuspecting Michelin worker," according to court documents.
An attempt to use parody as a defence to trademark infringement or depreciation of goodwill in that case was unsuccessful. The union was ordered to destroy all materials that used the Michelin man.
The spectre of legal repercussions meant that the City of Toronto agreed to simply retract its advertising.
Before the littering campaign was launched last month, the City of Toronto did not secure permission to use the trademarks for products including Nestlé SA's Drumstick ice cream, Red Bull energy drinks, PepsiCo's Gatorade and Mars Inc.'s Lifesavers.
"Concerns were raised by various companies about the use of their trademarks and the potentially damaging effect to their brands," the city's director of strategic communications, Jackie DeSouza, said last week.
She did not specify which brand owners complained.