In Bluefoot Ventures Inc. v. Ticketmaster (c.o.b. CitySearch), the Ontario Superior Court of Justice recently had the opportunity to consider the question of whether, in the ordinary course of trade-mark licensing, it can be said that a trade-mark licensee owes a fiduciary duty to the trade-mark licensor.
The Statement of Claim in Bluefoot Ventures asserted a number of claims arising from a licensing agreement entered into between predecessors of both the plaintiff and the defendant. The plaintiff, Bluefoot Ventures Inc., is the current owner of certain rights in and to the registered mark CITYSEARCH. The previous owner of those trade-mark rights had granted an exclusive license (limited to certain applications and as to geographic reach) to the predecessors of the defendants. Through a series of name changes and mergers, the named defendants (referred to collectively herein as Ticketmaster) were the current beneficiaries of the licensed rights. Stikeman Elliott is counsel to Ticketmaster in this matter
In granting Ticketmaster's motion to strike those portions of the Statement of Claim alleging that Ticketmaster owed a fiduciary duty to Bluefoot, and that such fiduciary duty had been breached, Lederer J. reviewed the case law for determining the circumstances in which a fiduciary relationship exists.
Lederer J. identified the fundamental hallmark required to establish a fiduciary relationship as evidence of a "mutual understanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party." The Court noted that on the face of it, a contractual relationship would not be expected to lead to a fiduciary relationship, because in a negotiated contract, it is clear that the parties look after their own self-interests, and not the interests of the other side.
On the facts, the Court found that the contract under consideration in the claim reflected a purely commercial relationship. The contract, which created a license permitting Ticketmaster to use intellectual property owned by Bluefoot, sets out the rights of Ticketmaster and the consideration that Ticketmaster owed to Bluefoot in return. The Court held that the contract "does not create the duty of loyalty which is the fundamental characteristic of a fiduciary relationship." The Court also cautioned that "to recognize the possibility of a fiduciary relationship existing on the facts presented [in this case] is to acknowledge that the Court could fall into the trap of too easily recognizing the presence of these obligations where, properly understood, they ought to be found not to exist."
The Court also soundly rejected the proposition that the Trade-marks Act creates a fiduciary relationship between licensor and licensee, holding that "the Trade-marks Act and the registration of a trade-mark under that Act do not in and of themselves create a fiduciary relationship." While the Court acknowledged that there may be circumstances in which a fiduciary duty may exist in the presence of a concern arising out of the registration or use of a trade-mark, such a duty did not arise as a result of the registered trade-mark, but as a result of the underlying relationships between the parties.
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