The Driving Alternative Inc. v. Keyz Thankz
Inc., 2014 FC 559 This was a motion for summary judgment by the Plaintiff, who
sought relief for trade-mark infringement, passing off,
depreciation of goodwill, and likelihood of confusion. The
Defendants filed no material in response to this motion. The Plaintiff owned two registered trade-marks, KEYS PLEASE and
THE DRIVING ALTERNATIVE, for use in association with (among other
things) driving services. The Plaintiff has operated business out
of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario.
For a brief time, the Defendants were licensed to operate a
franchise using the Plaintiff's trade-marks in Ontario. The
license was terminated by the Plaintiff for non-payment of
royalties. However, subsequent to the termination of the license,
the Defendants continued to operate a driving service under the
mark KEYZ PLEAZE. The Plaintiff became aware of this, and demanded
that the Defendants cease and desist using all confusing marks. In
response, the Defendants signed an undertaking to "cease
using... all use of any trademarks causing or potentially causing
confusion" with the Plaintiff's trade-marks, as well as
the marks KEYZ PLEAZE and KEYS PLEZE. However, after signing the
undertaking, the Defendants incorporated the corporate Defendant
KEYZ THANKZ and operated a driving service in Ontario under that
name. The Plaintiff once again sent the Defendants a cease and
desist letter, to which the Defendants refused to comply. There was some dispute over the applicable limitation period:
the Defendants argued it was 2 years (under the Limitations Act
of Ontario), while the Plaintiff submitted it was 6 years
(under the Federal Courts Act). The Court agreed with the
Plaintiff, since the cause of action in this proceeding did not
arise exclusively within the province of Ontario, and since the
Defendants caused damage to the Plaintiff beyond Ontario. The Court
stated that "it seems unjust to bar, by way of a provincial
statute of limitations, national trade-marks rights of the
Plaintiff." The Court found that the Plaintiff established its cause of
action under each claimed ground, including trade-mark
infringement, likelihood of confusion, passing off and depreciation
of goodwill. The Court also found one of the personal Defendants
liable (in addition to the corporate Defendant) since, on
discovery, he stated "I am the company" and "I
oversee everything". With respect to damages, the Plaintiff claimed $350,000, a
figure that it argued would have been payable to it, as royalties,
by the Defendant during the relevant period. The Defendants argued
that any award of damages should be mitigated by the fact that the
Plaintiff failed to exercise its rights for approximately 5 years,
and since the Plaintiff had no franchise in Ontario since 2005. The
Court accepted that these factors weighed against the amount of
damages sought by the Plaintiff. However, since the Defendants did
not cross-examine any of the Plaintiff's affiants, nor file any
rebuttal evidence, the Court drew an adverse inference in this
regard against the Defendants. Therefore, the Court accepted the
Plaintiff's estimate and awarded damages in the amount of
$25,000 for each of the years of infringement, for a total damage
award of $225,000. In addition, due to the Defendants'
"lack of regard" for the Court's process resulting in
"unduly lengthened proceedings", and their "willful
blindness to their ongoing infringement", the Court awarded
solicitor and client costs to the Plaintiff. Ottawa Athletic Club Inc. v. The Athletic Club
Group Inc. et al., 2014 FC 672 The Ottawa Athletic Club ("OAC") brought an
application under s. 57 of the Trade-marks Act (the
"Act") to expunge the trade-mark THE ATHLETIC
CLUB & DESIGN (the "Trade-mark") from the Register.
The OAC has operated a fitness facility in Ottawa since at least
1976. The Athletic Club first opened in London, Ontario in 1997,
then opened facilities in a number of other cities including Ottawa
in 2010 and 2011. The Trade-mark was applied for in 2003 and
registered in 2005. The Registration disclaimed the right to the
exclusive use of the words ATHLETIC CLUB. The OAC sought to strike
the Trade-mark on a number of grounds, and also sought a permanent
injunction against the Athletic Club. The OAC alleged that the Athletic Club was not entitled to
register the Trade-mark as a result of section 16(1)(a) and (c) of
the Act. However, it was noted by the Court that five year
limitation period in section 17 had passed. The OAC thus argued
that section 17(2) applied in that the person who adopted the
Trade-mark did so with the knowledge of the OAC. The Court found
that the OAC did not establish this knowledge on the part of the
Athletic Club after considering a number of arguments, including
whether an adverse inference should be drawn by the Court because
the two individuals who adopted the Trade-mark did not provide
affidavits. The Court declined to draw an adverse inference,
concluding that "the authorities are clear in my view that
while an adverse inference can strengthen weak evidence or turn a
prima facie case into a conclusive one, it cannot enable
the party bearing the burden of proof to overcome a complete lack
of evidence on the point at issue. There must be a case to answer
before the Respondent is required to introduce the best evidence or
risk an inference that it does not favour their position." The
Court found that the OAC did not present a case for the Athletic
Club to answer in respect of their knowledge of the OAC. The Court
also considered whether to impute knowledge as a result of the
solicitor's knowledge, but decided that there was not
sufficient evidence to establish that the information was material
to the incorporation of the Athletic Club in London or that a duty
to inform arose. As a result, the OAC's arguments pursuant to
section 16(1)(a) and (c) failed. The OAC also alleged that the Trade-mark was not registrable at
the date of registration pursuant to section 12(1)(b) of the
Act. The Court found that the Trade-mark, when sounded, is
clearly descriptive of the wares and services with which it is
associated. In defence, the Athletic Club argued acquired
distinctiveness. The Court found that the evidence did not
establish distinctiveness. As a result, the Court found that the
Trade-mark should be expunged. The Court also found that the OAC
has shown that the Trade-mark contravened section 12(1)(c) of the
Act and was therefore not registrable. With respect to the OAC's arguments in accordance with
section 10 of the Act, the Court concluded that the
evidence was sufficient to establish that the term "athletic
club" had been used extensively in Canada had a
well-understood meaning within the industry. The Court found that
the OAC established that the Trade-mark is prohibited under section
10, as well as 11 and 12(1)(e). The Court ordered the expungement
of the Trade-mark as well as a permanent injunction on the basis
that "a mark that offends s. 10 is one that "no person
shall adopt" (s. 10) and "[n]o person shall use in
connection with a business" (s. 11)." Insurance Corporation of British Columbia v.
Stainton Ventures Ltd., 2014 BCCA 296 ICBC adopted a number of official marks, including the acronym
"ICBC". Stainton Ventures Ltd. (Stainton) operates a
commercial website called "ICBCadvice.com" and owns the
domain names (icbcadvice.com) and (icbcadvice.ca). ICBC believed
Stainton was using its official mark without authorization, and
commenced an action in the Supreme Court of British Columbia
seeking a declaration to that effect and various orders, including
one requiring transfer of the domain names to it. Following a
summary trial, the Court dismissed the majority of ICBC's
claims (decision here). In particular, the Court refused to
grant an injunction, or to require the transfer of the domain
names. It is from those refusals that ICBC appealed. ICBC argued that the trial judge erred by failing to apply the
correct tests for determining breaches with respect to passing-off.
It further argued that the judge erred in finding the use of the
websites did not violate the Trade-marks Act or amount to
passing off. The Court of Appeal held that "even if there is some
resemblance between 'ICBCadvice.com' and ICBC's family
of marks, the average Internet user with an imperfect recollection
of ICBC's marks would not likely be mistaken by the domain
name." The Court of Appeal also held that it would be
understood that a domain name which, in part, contains the name of
a business or its acronym will not necessarily be affiliated with
or endorsed by that business. In the Court of Appeal's view,
the most that person would conclude is that the website likely had
something to do with the corporation. Therefore, the Court of
Appeal agreed with the trial judge that the websites did not
contravene sections 9 and 11 of the Trade-marks Act. For
similar reasons, the Court of Appeal also rejected ICBC's
arguments with respect to passing-off. The appeal was
dismissed. Coors Brewing Company and Molson Canada 2005
v. Anheuser-Busch, LLC, 2014 FC 716 Coors has argued that a recent decision of the Federal Court
(The Thymes, LLC v Reitmans Canada Limited,
2013 FC 127) means Anheuser could not apply for a
registration in Canada based on intended use and then amend the
application to rely on a USA application. The Federal Court
disagreed, and dismissed the application for expungement. As background, the Court found that Anheuser had filed a
trade-mark application in the USA for GRAB SOME BUDS, based on
intended use. Anheuser commenced use in the USA on September 24,
2010, and received registration on March 8, 2011. In Canada,
Anheuser filed on September 14, 2010, based on its intent to use
the mark in Canada. On February 9, 2011, before the application was
advertised, Anheuser amended its application to withdraw the
proposed use in Canada as the basis for registration and
substituted the prior registration or application for registration
in the USA as the basis. The Court distinguished the earlier Thymes decision,
holding that the bases for expungement under section 57 are
narrower than those which might give rise to a successful
opposition under section 38. The Court further found that none of
the four statutory grounds for invalidating a registration were
present here, and there were no misstatements made that can form
the basis of a ground of invalidity. The BLG Life Sciences Group has published
LIFESIGNS: Life Sciences Legal Trends in
Canada, a Report on Intellectual Property, Litigation,
Corporate Commercial legal trends and industry developments in
Canada. The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.TRADEMARK CASES
Court Grants Motion for Summary Judgment, including Solicitor
and Client Costs for "Willful Blindness" in Ongoing
Infringement
Expungement and Permanent Injunction Ordered in Respect of the
Trade-mark THE ATHLETIC CLUB & DESIGN
Appeal Dismissed: No Passing Off, No Violation of Official Mark
Provisions for Incorporating Acronym and Official Mark into Domain
Names
Application for a registration based on proposed use, then
amended on basis of prior registration in USA, not a ground for
expungement
INDUSTRY NEWS
ARTICLE
31 July 2014
Court Grants Motion For Summary Judgment, Including Solicitor And Client Costs For "Willful Blindness" In Ongoing Infringement (Intellectual Property Weekly Abstracts Bulletin: Week Of July 28th, 2014)
The Plaintiff owned two registered trade-marks, KEYS PLEASE and THE DRIVING ALTERNATIVE, for use in association with (among other things) driving services.