Energizer v. Duracell: Comparative Advertising Battery Battle
By Shany Raitsin
In the recent Energizer Brands, LLC v. Gilette Company[1] decision, the Federal Court ruled that Duracell’s use of Energizer’s registered trademarks ENERGIZER and ENERGIZER MAX (the “Energizer Trademarks”) in comparative advertising on its sticker labels depreciated the goodwill in Energizer’s registered trademarks.[2]
While the Court accepted the assertion that “…comparative advertising helps consumers make better choices…”,[3] it also reiterated the limits placed on comparative advertising through s. 22 of the Trademarks Act[4] which stipulates that no one can use a registered trademark of another in a way likely to depreciate the value of the goodwill attached to the mark.
Ultimately, the court found that the claims made in Duracell’s comparative advertising campaign were truthful and not misleading, but that their findings were used to the detriment of Energizer’s goodwill.
The deadline for the parties to appeal this decision is in September 2023.
Test for the Depreciation of Goodwill
The leading Supreme Court of Canada decision of Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée[5], outlines a four-part test for depreciation of goodwill: (1) the defendant has used the claimant’s registered trademark with goods or services, regardless whether they are competitive, with those of the claimant; (2) the claimant’s registered trademark is sufficiently well known to have a significant degree of goodwill attached to it, although there is no requirement hat the trademark be well known or famous; (3) the defendant’s use of the trademark was likely to have an effect on that goodwill (in other words, there was a linkage); and (4) the likely effect is to depreciate or cause damage to the value of the goodwill.[6]
The Average Hurried Consumer in the Marketplace
The concept of the “average hurried consumer” was also explored in this decision, with added emphasis on the fact that consumers typically only take seconds to absorb information on product packaging.[7] However, when analyzing Duracell’s comparative advertising practices and their effect on consumers, Justice Fuhrer duly pointed out that the parties did not furnish any evidence that could have potentially provided evidence of consumer reactions in the marketplace to the sticker campaign in question.[8] The absence of this evidence made it more difficult for the Court to ascertain the effect on goodwill of the Energizer brand.[9] As a consequence of the absence of this evidence, the Court was left to its “…own common sense as a potential buyer of the goods”.[10]
The Court also made an important distinction that the average hurried consumer should not be interpreted as a “moron in a hurry”, or completely naïve – deeming that consumers are more than capable of spotting a disclaimer on a product that explains something to the effect of: “results vary by device”.[11]
A Battery Battle
The sticker in question used on DURACELL AA batteries stated its product is “Up to 20% LONGER LASTING vs. the bunny brand on size 10, 13 and 312” – see depiction below.
The Court recognized that the “bunny brand” in this case was colloquially recognized to mean the Energizer brand, as the Energizer Bunny is a prominent and well-known mascot to the brand.[12] Interestingly though, the Court still sided with Duracell in verifying that its “15%” or “up to 20%” claims were not in fact false or misleading, according to the applicable testing that was provided as evidence in the case.[13]
Ultimately, the Court determined that Energizer failed to meet the third part of the four-part test, in failing to establish a link between the use of the impugned phrase and an effect on the goodwill of the brand.[14] While the “bunny brand” is well known, the Court determined that it required the consumer to take an “extra mental step” to connect the phrase to the Energizer brand.[15] The Court found that “there is a lack of evidence in the form of primary data, such as a survey, to assist the Court in determining how the average hurried consumer … would have reacted to the [sticker]”.[16]
Notably, the Court found that the evidence submitted did establish that sticker campaign endeavoured to increase Duracell’s market share (when it was already the market leader), at the expense of the next leading competitor, Energizer.[17] While there was no direct evidence that the sticker campaign disrupted Energizer’s historical capture of the market, the Court concluded that Duracell’s sticker campaign was “bandying about” with Energizer’s registered trademarks to the likely detriment of the goodwill attaching to them.
Decision
The Court granted Energizer a permanent injunction restraining Duracell from using the Energizer Trademarks and some of its stickers on battery packages, as well as damages amounting to $179,000. The Court did not award Energizer punitive damages, or accounting profits. In its conclusion, the Court noted that despite Duracell having contravened s. 22 of the Trademarks Act, it did not make any false or misleading representations or statements.
[1] Energizer Brands, LLC v. Gillette Company, 2023 FC 804 (“Energizer”) [2] Ibid., at para. 270 [3]Energizer, at para. 86, citing Petline Insurance Company v. Trupanion Brokers Ontario Inc., 2019 FC 1450 at para. 9 [4] Trademarks Act, (R.S.C., 1985, c. T-13), s.22 [5] Veuve Clicquot Ponsardin v Boutiques Clicquot Ltée, 2006 SCC 26 (”Veuve Clicquot") [6] Veuve Clicquot, at para. 46 [7] Energizer, atpara. 99 [8] Ibid., at para. 116 [9] Ibid., at para. 117 [10] Ibid., at para. 122 [11] Ibid., at para. 211 [12] Ibid., at para. 206 [13] Ibid., at paras. 206 and 214 [14] Ibid., at para. 240 [15] Ibid. [16] Ibid., at para. 156 [17] Ibid., at para. 244
