Marketers spend plenty of time defending their brands against copycats, but it is not often that a product copycats itself.
That is what has happened in Canada for one iconic brand: Marlboro. For more than 80 years, a different company – Imperial Tobacco – has owned the trademark for the Marlboro name in Canada. Nearly everywhere else in the world, it is sold under Philip Morris's banner. These being cigarette manufacturers, few will sympathize with the headaches this trademark spat has spawned over the decades. But the most recent legal scuffle could have important implications for brand-name marketers across the country. And it may not be over yet.
Since Philip Morris cannot use the Marlboro name in Canada, its cigarette packages look almost like Marlboro knockoffs. They use the same white background with the "rooftop" design (most famously in red, but also in gold, silver and green), the "come to where the flavour is" slogan, and even the same font on the name – all design elements that it does have the right to use in Canada. But it has to use the brand names "Matador" or "Maverick." The current problem began in 2006, when the company put out a new package: court documents call it the world's first no-name brand of cigarette. It used the same design, but with no brand name – just a descriptor, "world famous imported blend," on the side of the package.
Imperial Tobacco, Canada's Marlboro maker, cried foul. Imperial's packs use the brand name, but the design is very different from the other Marlboro, and includes a maple leaf and the word "Canadian." The problem is the global brand's creep into this country: Canadians are familiar with the other Marlboro through travels abroad and through exposure to U.S. advertising. The question in the court case, which recently reached the Federal Court of Appeals, was this: Without the "Matador" or "Maverick" label distinguishing it from Marlboro here, did the no-name version create confusion? In late June, the justice ruled that it did.
The case is complicated by the fact that Canada is a "dark market" for cigarettes – that is, except for some specialty shops, cigarettes are not displayed openly. Customers cannot point out their selection; they have to ask for a product by name. Surveys submitted as evidence in this case showed that many customers were asking for the no-name product using the Marlboro name, and many retailers also refer to them as Marlboro.
Federal Court of Appeal Madam Justice Johanne Gauthier determined that even though the "rooftop" did not use the Marlboro name, the associations that the package created in customers' minds caused confusion, and therefore infringed on Imperial's Marlboro trademark. Ms. Gauthier granted an injunction preventing Rothmans Benson & Hedges Inc. (the Canadian affiliate of Philip Morris International) from selling its cigarettes in the no-name package.
"This is a case that acknowledges the non-verbal elements of brand association," said Beth Macdonald, a counsel with McCarthy Tétrault in Vancouver who specializes in intellectual property and trademark law.
It's not enough that the packs do not have any literal resemblance: The ruling determines that a package can infringe on a trademark simply by suggesting an idea.
Ms. Macdonald believes this case has wider significance: It opens the door for other marketers to challenge the widespread practice of copycat packaging.
Examples abound: Germany-based discount grocery store chain Aldi sells the Protane brand of shampoo and conditioner in bottles similar to the well-known Pantene brand. Vaseline lotion is another product frequently seen on shelves beside similar-looking bottles for generic brand lotion. Nor is it limited to generic or store brands: In 2010, Coca-Cola Co. filed a trademark lawsuit in the U.S. against rival Pepsico Inc., claiming the design of the packaging for its Trop50 fruit juices copied the shape, style and large green caps of its Simply juice brand. They settled last year.
Creating confusion with a more well-known product can be highly valuable for a competitor, said Chun Qiu, a marketing professor at McGill University, who focuses on the subject. At most, a consumer will be misled into buying the copycat product once, but that's all a generic brand needs.
"An important value of copycat packaging is to induce product trial," Prof. Qiu said. The consumer will try the cheaper brand, and if it is close enough in performance to the name brand, the hope is that they'll choose the lower-cost version on purpose next time.
The tobacco trademark case gives brand owners a way to push back, and "create more caution in the minds" of generic brands, Ms. Macdonald said. "… The courts will now be able to look at the ideas suggested, and not just the literal ideas, but the intangible associations consumers may have."
That is, if the current decision stands. Ms. Macdonald said she would be "shocked" if Rothmans Benson & Hedges do not request leave to appeal. Chris Koddermann, the company's director of corporate affairs, said it is reviewing its legal options. (Imperial did not respond to a request for comment.) For now, it is complying. Last week it relaunched its no-name cigarette in packages that now include the brand name "Rooftop."
But while the case may hold some hope for other brands, the confusion surrounding the Marlboro brand in Canada may not be so easily resolved. When clerks in two gas stations in downtown Toronto last week were asked for Marlboros, they each reached behind the counter and pulled out the freshly redesigned packs, their name clearly displayed: Rooftop.
In Canada: Imperial Tobacco Canada Ltd. sells Marlboro. It is not the same cigarette as those sold under the famous name elsewhere, and the packaging looks completely different.
In the U.S. and internationally: Altria Group sells Marlboro through Philip Morris USA. This is the Marlboro most people think of, in the white package with the red "rooftop" design. Philip Morris International sells Marlboro everywhere else in the world where the brand is available, with similar packaging and logo as the brand sold in the U.S. Despite the similarities in name, they're not the same company: Altria spun off PMI in 2008.