On November 26, 2013, the Federal Court issued its decision in
Trans-High Corporation v. Hightimes Smokeshop and
Gifts Inc. The proceeding, which claimed trademark
infringement, passing-off and depreciation of goodwill, was brought
by the applicant, Trans-High Corporation (Trans-High) by way of a
summary application to the Federal Court. This option (which
sees evidence confined to affidavit evidence, and no rights of
discovery) was confirmed to be available by the Federal Court of
Appeal in its 2011 decision in BBM Canada v. Research in Motion Limited. The
respondent, Hightimes Smokeshop and Gifts Inc. (Hightimes
Smokeshop), did not file any submissions in the proceeding or
appear at the hearing.
In upholding the claims for trademark infringement and
passing-off, the Court found that Hightimes Smokeshop had infringed
Trans-High's trademark "HIGH TIMES", which has been
registered in Canada since 1980 for use in association with
magazines. The Court found that Trans-High had tendered
sufficient evidence to show a likelihood of confusion between its
use of the mark in association with High Times magazine and website (with
a focus on medical and recreational uses of marijuana) and
Hightimes Smokeshop's retail sale of marijuana-related
paraphernalia and merchandise. However, the Court declined to
find depreciation of goodwill, citing insufficient
evidence. In particular, the Court noted that the
evidence of volume of sales and depth of market penetration of
magazines and related wares sold by Trans-High in Canada was
limited, as was evidence in respect of the extent of advertising
and publicity accorded to Trans-High's HIGH TIMES
trade-mark. Further, there was little evidence of the degree
of inherent or acquired distinctiveness of the HIGH TIMES
trade-mark, and the products associated with the mark were confined
to a specialized channel of trade.
Evidentiary issues were also at play when the Court refused to
award the $200,000 in damages claimed by Trans-High. The
claimed amount purported to include the license fee Trans-High
would have charged Hightimes Smokeshop to operate a 1500 square
foot retail store under the HIGH TIMES brand in a major tourist
centre such as Niagara Falls. The Court noted that by
deciding to proceed by way of application, Trans-High chose to
forego any opportunities for discovery, to compel further and
better information concerning depreciation of goodwill of its HIGH
TIMES trade-mark by reason of the activities of Hightimes
Smokeshop, as well as to elicit facts relating to damages caused by
While recognizing that it is difficult to quantify damages when
a respondent refuses to participate in a proceeding, Mr. Justice
Manson found no evidence to support the quantum of possible license
fees and damages, other than a "bald assertion" in
affidavit evidence filed by Trans-High. Noting that
Trans-High had never granted any voluntary licenses, the Court
found that the "amount of damages requested is purely
speculative", and a damages claim must be based on more than
That said, the court did allow damages in the amount of $25,000,
given the apparent wilful infringement of Hightimes Smokeshop, its
failure to even acknowledge High Time's trademark rights or to
negotiate any form of settlement or to participate in the
Court's process. The Court also fixed costs in the
sum of $30,000, and ordered the transfer of the domain name www.hightimesniagarafalls.com.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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