Canada: 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)

Last Updated: July 31 2014
Most Read Contributor in Canada, November 2017

Edited by Chantal Saunders and Beverley Moore , Adrian Howard and Ryan Steeves


Court Grants Motion for Summary Judgment, including Solicitor and Client Costs for "Willful Blindness" in Ongoing Infringement

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.

Expungement and Permanent Injunction Ordered in Respect of the Trade-mark THE ATHLETIC CLUB & DESIGN

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)."

Appeal Dismissed: No Passing Off, No Violation of Official Mark Provisions for Incorporating Acronym and Official Mark into Domain Names

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 "" and owns the domain names ( and ( 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 '' 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.

Application for a registration based on proposed use, then amended on basis of prior registration in USA, not a ground for expungement

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.

About BLG

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions