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

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

TRADEMARK CASES

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 "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.

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.

INDUSTRY NEWS

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 Mondaq.com.

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

Similar Articles
Relevancy Powered by MondaqAI
Alexander Holburn Beaudin + Lang LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Alexander Holburn Beaudin + Lang LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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