47.
licensees and assignees of the intellectual property in question, who on their part undertake obligations to the licensor or assignor. Those rights of the intellectual property owner may properly be regarded as proprietary in nature for the purposes of s 51(xxxi) of the Constitution.
The rights mentioned in respect of registered trade marks are in substance, if not in form, denuded of their value and thus of their utility by the imposition of the regime under the Packaging Act. Section 28 of the Packaging Act goes to some lengths to preserve registrations against attack under the TMA by reason of non-use necessitated for compliance with the Packaging Act. Nevertheless, whilst the registration, like the weekly tenancy of Mr Dalziel, may remain, it is impaired in the manner just described.
In Mattel Inc v 3894207 Canada Inc[1] Binnie J said that registered trade marks operated "as a kind of shortcut to get consumers to where they want to go, and in that way perform a key function in a market economy". The system established by the Packaging Act is designed to give the opposite effect to trade mark use, namely by encouraging consumers to turn away from tobacco products even if that otherwise is where they would "want to go". This is achieved by the contraction of device trade marks to the bare brand name and the required appearance of brand names, including those separately registered as word marks, in small print against a background of unattractive colour. A licensee or assignee, at peril otherwise of contravening the offence provisions in Ch 3 of the Packaging Act, would be enabled to exercise a licence or enjoy the assignment only in this constrained manner. The result is that while the trade marks remain on the face of the register, their value and utility for assignment and licensing is very substantially impaired.
The situation is even more drastic as regards the BAT Copyrights, the BAT Patent and the BAT Design at stake in the BAT Matter. Use of the artistic works on retail packaging of tobacco products is denied by the operation of s 20(3) of the Packaging Act. Use of the BAT Design would conflict with s 18(1) of the Packaging Act and exploitation of the BAT Patent would conflict with reg 2.1.1(2) of the Packaging Regulations.
The circumstances just described are sufficient to render the operation of the Packaging Act a "taking" of these items of intellectual property.
The situation respecting goodwill associated with the get-up of the packaging of tobacco products requires further consideration. This is because, unlike the statutory species of intellectual property just described, the common law restricts the exploitation of goodwill by its assignment. At common law the
- ↑ [2006] 1 SCR 772 at 788.
