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November 9, 2021

A bicycle by any other name is not a Harley-Davidson

By Steven Z. Raber

A bicycle by any other name is not a Harley-Davidson

Eli Varzari sold electric bicycles through the website of his store East Van Chopcycles and through YouTube videos. The website advertised an electric bike called the “Harley Davidson Willie G Edition,” noting that the handgrips, pedals, axle bolt covers, and air valve caps were “all original parts from the factory.”  His YouTube videos showed the bicycle being referred to as the “Harley Davidson Edition” built by East Van Chopcycles. Harley-Davidson trademarks were visible on the advertisements for Mr. Varzani’s bicycle, which was offered for sale for US$7,000.

Harley-Davidson trademarks are owned by H-D USA, LLC, which, in turn, licenses Harley-Davidson Canada LP to use its trademarks in Canada. Harley-Davidson trademarks are not licensed to others for the manufacture of vehicles; all Harley-Davidson motorcycles, including electric motorcycles, are manufactured by Harley-Davidson.

Harley-Davidson was not happy that Mr. Varzani was using its trademarks.  Demand letters were sent to Mr. Varzari.  He apparently changed his website so that it advertised the same electric bicycle under the name “H” edition. The reference to “original parts from the factory” was changed to “original parts from Harley Davidson.”  Further correspondence from Harley-Davidson went unanswered.

Harley-Davidson sued Mr. Varzani for trademark infringement, passing off, and depreciation of goodwill in Canada’s Federal Court.  Mr. Varzani did not defend but, under the rules of that court, in order to obtain relief, Harley-Davidson still had to prove its case. 

The judge hearing the case had no problem finding that Mr. Varzari’s advertisement of electric bicycles in association with “Harley Davidson Willie G Edition” or “Harley Davidson Edition” was likely to cause confusion with the HARLEY-DAVIDSON trademark.  There was, in the judge’s view, “little doubt a casual consumer somewhat in a hurry viewing an electric bicycle called the ‘Harley Davidson Edition’ would infer it was manufactured or sold by or under license of Harley-Davidson. Mr. Varzari’s use of this trademark infringes the HARLEY-DAVIDSON” trademark.

But what about the name change instituted by Mr. Varzani after the demand letters went out?  The judge found that “[t]he surrounding circumstances in which the ‘The ‘H’ Edition’ name is used includes (a) Mr. Varzari having previously used the name “Harley Davidson Edition,” such that the consuming public would be more likely to continue to draw the connection between the “The ‘H’ Edition” and Harley-Davidson; (b) Mr. Varzari’s promotional materials referring to “The ‘H’ Edition” immediately above reference to “original parts from Harley Davidson,” an addition to the marketing text made apparently to ensure that the consumer made the connection between the “H” and Harley-Davidson; (c) Harley-Davidson’s trademarks being frequently represented in initials, as seen in the H-D Mark, as well as its registered trademark HDMC; and (d) the bicycle continuing to be associated with other Harley-Davidson trademarks …”.

Another issue Harley-Davidson had to overcome was that Mr. Varzani’s bikes apparently incorporated genuine Harley-Davidson parts.  Was that enough to make the sale of the bicycles lawful?  After all, as the judge noted, the resale of trademarked goods lawfully acquired is not, by itself, prohibited under Canada’s Trademarks Act.  Unfortunately for Mr. Varzani, he was not simply reselling motorcycle parts bearing Harley-Davidson’s trademarks. He was found to be altering them and incorporating them into a new good in such a way that the new good, his electric bicycle, bore Harley-Davidson’s trademarks and suggested an association with the trademarks’ owner. As a result, the court concluded that Mr. Varzari’s sale of a bicycle incorporating handgrips and axle bolt covers bearing Harley-Davidson’s trademarks did not fall within the permitted resale of trademarked goods.

Although not every incorporation of a trademarked good into a new good will result in an actionable case of trademark infringement, care must always be taken to avoid the unfair use of someone else’s trademarks.  Otherwise, like Mr. Varzani, one might find oneself on the wrong end of an injunction prohibiting sales and a money judgment in favour of the trademark owner.

International trademarks? From Canada to Madrid and back

In June 2019, Canada’s trademark laws were amended and it became possible for Canadian nationals, residents and businesses to access the international trademark registration system commonly known as the Madrid Protocol.

Under the Madrid Protocol, a trademark owner first files a regular Canadian trademark application.  An availability search is recommended prior to that since a subsequent international registration is dependant on the Canadian application for five years from the date of the international registration. The owner then files an international application with the World Intellectual Property Organization (WIPO) through the Canadian trademark office, designating the other countries or regions (such as the European Union) in which the owner desires a registration.  A simple, direct hit search is recommended for each country being designated – perhaps a different mark would be suitable in certain countries.

WIPO examines the application to ensure it is complete, publishes the trademark registration, and notifies the designated trademark authorities in each of the countries and regions designated by the owner.  So far so good.

Each designated country’s trademark office then gets into the act, examining the application to see if it meets that country’s particular requirements.  Under the Madrid Protocol, these national offices have deadlines by which they must advise WIPO as to whether the application has been granted or refused in their respective jurisdictions.  If rejected, the trademark owner generally must hire local trademark agents to assist in responding to the objections raised.

The same rules apply when foreign brand owners in other countries that participate in the Madrid Protocol wish to designate Canada.  After the Canadian trademark office is notified of the designation, an examiner is assigned and the application is then dealt with under Canadian trademark law and procedures.  We are often retained to assist owners and their counsel to overcome objections raised by the Canadian examiners.

A stated advantage of the Madrid Protocol is to allow trademarks to be registered internationally, which should allow for a smoother, less costly process than filing separately in each country or region of interest to the owner.  Also, additional designations can be added to the international registration as business expands globally. As noted above, that advantage can evaporate when each designated country’s trademark office applies local laws during the examination of the application.  As such, sometimes it makes sense to file applications directly in the countries of greatest interest to the trademark owner. An informal rule of thumb is to file applications individually if you are seeking protection in five or fewer countries, or as an international application if protection is sought in more than five countries.

Steven Z. Raber, a partner of Fillmore Riley LLP, is a lawyer, registered trademark agent and trained mediator. You may reach Steven at stevenraber@fillmoreriley.com or (204) 957-8304.

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