Clark Wilson

Trademark Interlocutory Injunction Denied

By In Case Law, Protection & Enforcement, Trademark Oppositions

A recent decision of the Saskatchewan Court of Appeal, setting aside the interlocutory injunction granted by the Chambers judge, illustrates how difficult it is to obtain an interlocutory injunction absent convincing evidence that satisfies the three part test for an interlocutory injunction.  In Kulyk v. Wildman (Weight Loss Forever Consulting), the Saskatchewan Court of Queen’s Bench granted the plaintiff an interlocutory injunction precluding the defendant from using or carrying on business under the plaintiff’s alleged business name and trademark, “Global Healthcare Connections” and directing the defendant to remove all references to the plaintiff’s mark on social media sources.  In assessing the plaintiff’s application, the Chambers judge looked to Potash Corp. of Saskatchewan Inc. v. Mosaic Potash Esterhazy Limited Partnership which set out the well‑established test for an interlocutory injunction:  

(1) the strength of the plaintiff’s case;

(2) the presence of a meaningful risk of irreparable harm if the injunction is not granted; and,

(3) whether the balance of convenience favours the granting of the injunction. 

The Court of Appeal allowed the appeal and held that the plaintiff’s application for injunctive relief was based on the common law tort of passing off, which in turn, required evidence of goodwill, deception of the public due to misrepresentation, and actual or potential damage to the plaintiff.  The Court stated that the plaintiff’s case was weak because she failed to put forth any evidence to establish the existence of goodwill associated with the name Global Healthcare Connections.  The plaintiff’s affidavit referred to various steps she had taken to launch her business, but it also stated that she had had difficulty launching her business because of the defendant’s actions.  Thus, there was no evidence that the plaintiff or her services were known in the market.

The Court found it unnecessary to assess the remaining elements of the common law tort, although it did comment on these.  With respect to the element of irreparable harm, the Court disagreed with the Chambers judge’s finding that the plaintiff had suffered loss of business, finding instead, that the similarity between the names used by the parties would likely result in a benefit rather than harm to the plaintiff’s business.  Noting that a balance of convenience analysis could be “compendious”, the Court was satisfied that the balance of convenience also favoured the defendant, given the weakness of the plaintiff’s case and given that irreparable harm favoured the defendant.  Thus, the Chambers judge’s decision could not stand.

Injunction for Trademark Infringement: Québec

By In Branding, Case Law, Protection & Enforcement, Uncategorized

In Solutions Abilis Inc. v. Groupe Alithis Inc., the Québec Superior Court granted the plaintiff an interlocutory injunction precluding the defendant from using ALITHIS as part of its corporate name or trade name or as a trademark.  The test for an interlocutory injunction in Québec turns on whether the rights which the plaintiff invokes are clear, doubtful or non-existent.  If those rights are clear an injunction should be granted if serious harm would otherwise result.  If those rights are doubtful the court must also consider the balance of convenience.  This test is similar, although not identical, to the test used in the common law provinces where the courts must consider whether there is a serious issue to be tried, irreparable harm and the balance of conclusive irreparable harm. 

After setting out the test the Court then considered the plaintiff’s trademark rights, starting from the premise that trademarks are a guarantee of origin and intended to protect the public by indicating the source of the goods and services.  The Court then focused on whether there was confusion, finding that the plaintiff’s marks,

 abilis it           abilis ti

were inherently distinctive, since the included word, ABILIS, was a coined term with 3 syllables that created a strong sonority – “ab-il-is” and because of the use and position of the “it” and “ti” symbols in the marks.  The defendant’s mark,

alithis

 also used 3 syllables and a symbol.

The length of time also favoured the plaintiff and the nature of the trade was similar, namely computer consulting services.  The Court was not willing to accept the defendants’ argument that persons purchasing computer services would take time to determine the source, noting that initial interest confusion was sufficient and might, among other things, result in the plaintiff not being invited to bid for a potential customer’s work.  The Court was also convinced there was a sufficient degree of resemblance, referencing a number of Québec cases where the degree of resemblance led to a finding of confusion even where the goods or services were different. 

Since the likelihood of confusion was clear, a loss of goodwill and clientele were presumed and therefore the injunction was granted.  A decision regarding the balance of convenience was not necessary, but the Court noted, in the event of an appeal, that it favoured the plaintiff, particularly given the shorter period of time the defendants had been in the market.

Punitive Damages: Trademark and Copyright Infringement

By In Branding, Counterfeit goods, Famous Marks, Foreign Protection, Protection & Enforcement

The most recent case from the Federal Court continues the Court’s tough stance with respect to trademark and copyright infringement in Canada. 

In Harley-Davidson Motor Co. Group LLC v. Manoukian, the Court awarded significant compensatory and punitive damages against the Defendant company and its principal.

The Plaintiffs, H-D Michigan, LLC (“MI”), Harley-Davidson Motor Company Group, LLC (“MCG”) and Harley-Davidson Company, Inc. (“MCI”), hired an investigator to conduct an investigation into the alleged manufacture, offering for sale and sale of counterfeit Harley-Davidson clothing by the Defendants.  The investigator attended two separate locations of the Defendants.  While in attendance at both locations, the investigator was shown and purchased a number of counterfeit items including t-shirts, cloth and leather jackets and hooded sweatshirts, all of which contained unauthorised productions of the Harley-Davidson trademarks.

The Court was satisfied the matter could proceed on a motion for summary judgment.  In determining the damage award, the Court noted that where Defendants provide no records to substantiate the manufacture and sale of counterfeit wares, it is difficult to assess damages.  However, in these circumstances, the Court will apply a minimum compensatory damage award on a per infringing activity basis.

Following such cases as Ragdoll Productions (UK) Ltd v. Jane Doe and Oakley Inc. v. Jane Doe, the Court awarded damages for trademark infringement of $3,625 for each of the three occasions on which the Defendant was observed selling counterfeit goods at a flea market and $7,250 for each of the two occasions on which the Defendant was observed selling wares from a fixed retail establishment.  As the Plaintiffs were seeking damages on behalf of the trademark owner, MI, and the licensee/distributor, MCI/Fred Deeley, these amounts were doubled for a total of $65,250, payable jointly and severally by the Defendants.

In addition, although the Defendants’ lack of records made an accurate assessment of profits impossible, the Court found that the Plaintiffs were entitled to punitive damages of $50,000 to sanction the “blatant disregard” of the law by the Defendant.  In awarding the punitive damages, the Court noted that the Defendants had been offering for sale and selling counterfeit Harley-Davidson merchandise since as early as October 2006, and continued to do so despite the cease and desist letter served on the Defendants in 2010.  The Court also noted that there was evidence that the Defendant Manoukian, was well aware of the illegal nature of his trade.

The Court refused to award solicitor-client costs, since the evidence that the Defendants had missed a number of deadlines was not the kind of conduct attracting solicitor-client costs.  Further, the Defendants’ unjustifiable and inexcusable violation of the Plaintiff’s rights was covered by the punitive damages.

No Trademark Monopoly: Red Horse / Black Horse

By In Branding, Registration, Trademark Oppositions

Red Horse Black Horse

In January 2013 the Federal Court considered whether an ordinary beer drinking consumer, on hearing the words RED HORSE, would likely think that RED HORSE must be a beer made by the same company that makes BLACK HORSE.  The Court’s response: “unlikely”.

This decision was reached in San Miguel Brewing International Ltd v. Molson Canada, in which the Federal Court allowed an appeal by San Miguel from the refusal of the Trade-Mark Opposition Board to register San Miguel’s RED HORSE trademark and horse head design.

In the proceedings before the Board, the Member analysed the surrounding circumstances to determine whether the RED HORSE mark was confusing with the  BLACK HORSE trademark in the minds of the relevant consumer.  The Member found that the RED HORSE mark had noteworthy design features, but the word HORSE in the mark rendered it too similar to the BLACK HORSE mark.  Accordingly, the Board denied registration on the basis of confusion.

On appeal, Justice Phelan of the Federal Court applied the well-established test set out in the Supreme Court of Canada decision of Masterpiece  Inc. v. Alavida Lifestyles Inc., emphasizing that one has to: (1) look at the mark as a whole and not tease out each portion of the mark; (2) approach confusion on the basis of first impression, from the perspective of the average person who goes into the market; and (3) use common sense.  The average consumer being the “‘ordinary harried purchaser’ – neither the ‘careful diligent purchaser’ nor the ‘moron in a hurry'”.  Justice Phelan held that the ordinary purchasers in this case were beer drinkers “sensitive to the names of beers and to what they know and like”.  The ordinary purchaser was not the “non-beer drinking life partner who is asked to pick up beer”.

In reversing the Board’s decision, the Court concluded that one look at the labels above, and common sense, was “sufficient to dispel any notion of confusion”.  The Court then went on to state that the Member did not consider that in refusing to register the RED HORSE trademark, Molson was effectively being granted a trademark monopoly over the word HORSE of any colour in relation to beer.  The breadth of that monopoly was found to be unreasonable.

It is clear that Justice Phelan looked at the marks as a whole, including the design element.  It is also of note that he focused on a beer-drinking consumer and not just an average consumer.  However, it is the concern about granting a monopoly that is most interesting.

An Interplay of Canadian Official Marks and Canadian Trademarks

By In Protection & Enforcement, Registration

A February 2010 blog, “Professional Designations and Abbreviations, Acronyms and Initials” discussed the summary judgment and permanent injunction obtained by the College of Traditional Chinese Medicine Practitioners and Acupuncturists of British Columbia (“the College”) against the Council of Natural Medicine College of Canada (“the Council”) pursuant to which certain trademarks which the Council had registered, such D.C.T.M (DOCTOR OF TRADITIONAL CHINESE MEDICINE) and REGISTERED D.P.C.M, were expunged on the basis that the marks were clearly descriptive or deceptively misdescriptive (contrary to s.12(1)(b) of the Trade-Marks Act) and recognised in Canada as designating the services of doctors of Traditional Chinese Medicine and acupuncturists (and therefore contrary to s.10).  The Council was also enjoined from registering similar trademarks.  The Council appealed this decision, but subsequently discontinued the appeal.

The Council did, however, bring an application for judicial review asking the Federal Court to set aside the notice given by the Registrar of Trade-marks of the adoption and use by the College of various official marks, including D.C.T.M (DOCTOR OF TRADITIONAL CHINESE MEDICINE) and REGISTERED D.P.C.M.  Section 9(1)(n)iii) grants protection to “any public authority” in Canada that adopts and uses a mark and in respect of which the Registrar of Trade-marks has given notice.  In Council of Natural Medicine College of Canada v. College of Traditional Chinese Medicine Practitioners and Acupuncturists of British Columbia the Federal Court concluded that the official marks were valid and that section 9(1)(n)(iii) was constitutional.

As explained in the decision, the Council is a private non-profit company incorporated under federal legislation which created educational programs in traditional Chinese medicine.  The courses were offered by affiliated private schools.  Prior to the earlier Federal Court decision the Council also entered into trademark licence agreements with the graduates of its programs.  The College, however, had been established under the British Columbia Health Professions Act to regulate the practice of traditional Chinese medicine, including the titles that could be used by practitioners.  Read more

Both Here and There: Trademark Use on Websites Available in Canada

By In Case Law, Registration

According to a December, 2012 decision of the Federal Court, HomeAway.com, Inc v. Hrdlicka, “a trade-mark which appears on a computer screen website in Canada, regardless where the information may have originated from or be stored, constitutes for Trade-marks Act purposes, use and advertising in Canada.”  This broad statement suggests that the appearance of a trade-mark on a computer screen is sufficient whether or not services are available or performed in Canada.  However, the decision is best understood in context. 

HomeAway.com, which acquired and now operates the well known Vacation Rentals by Owner or VRBO website at VRBO.com, sought to expunge the trade-mark VRBO which Hrdlicka had applied to register in 2009 for use in association with services described as “vacation real estate listing services”.  HomeAway.com sought to establish prior use of VRBO.  HomeAway.com had a computer presence in Canada, but no physical presence.  In analyzing section 4(2) of the Act which states that “a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services”, the Court noted that there was little jurisprudence regarding use by means of a computer screen display.  The Court then adopted the concept that an activity can be “both here and there” from a series of earlier cases involving tax, criminal activity and copyright and sought to interpret section 4(2) “in a manner consistent with modern day realities”, namely “that information which is stored in one country can be said to exist in another; in this case Canada.”

The Court then went on to describe the HomeAway.com business as being “advertising, on its website, homes, apartments and the like owned by third persons who wish to rent them to others”, suggesting that HomeAway.com offers the same services as the Classifieds section of a newspaper.  The Court used the accessing of properties in “Montreal” and “Niagara-on-the-Lake” as examples of how the website might be used.  It is not clear whether there was actual evidence before the Court of Canadians posting and accessing properties on the website, but presumably this was available.

In the circumstances, Hrdlicka’s registration was expunged in light of HomeAway.com’s prior use, the absence of any use by Hrdlicka until 2012 and evidence that Hrdlicka was trying to sell his trade-mark to HomeAway.com.

The question now is whether the mere appearance of a trade-mark in advertising available on a website in Canada is enough to constitute use in association with services.  However, when the statement from the Federal Court is read in context, it would appear that the services must be available to or accessed by Canadians.  Some further case law may be necessary to clarify this point.

Invoices Evidencing Use and Abandoning Use of Trademarks

By In Trademark Oppositions

A decision from the Federal Court of Appeal, Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V, provides some useful commentary regarding invoices as evidence of trademark use and regarding the issue of abandonment. 

Hortilux opposed Iwasaki’s application to register HORTILUX in association with electric lamps.  The Opposition Board accepted October 1997 as Iwasaki’s date of first use and concluded that the invoices submitted by Hortilux did not establish use prior to October 1997, although no reasons were provided byt the Board on this particular issue.  No additional evidence on this point was provided on appeal, but the Federal Court judge, applying a standard of reasonableness, reviewed the case law and concluded that Hortilux did have use prior to October 1997.  The Court of Appeal concluded there was no reason to interfere with the judge’s decision. 

The Court of Appeal quoted the judge’s earlier decision that “if a trademark is placed at the top of the invoice, with no use in the body of the invoice, the use will not generally be in association with the invoiced wares…”, but agreed that there were exceptions to this general rule, noting the judge’s reasons for drawing an exception in this case: the trademark was prominent on the invoice, appearing in large font and with design elements; it was clear that HORTILUX was not simply the trade name, particularly when Hortilux B.V. appeared separately; the recipient was the distributor and would therefore have understood that HORTILUX referenced the source of the reflectors; the reflectors were the only goods referenced in the invoices and no other trademark appeared on the invoices.

Having found use prior to October 1997, the Federal Court judge also had to consider whether the mark had been abandoned by Hortilux at the time Iwasaki’s application was advertised (a point that the Board Member did not need to address).  The Court of Appeal agreed that when applying the test in section 16(5) of the Trade-marks Act – whether at the time an application is advertised, a confusing trademark has been “abandoned” – there must be evidence of an intention to abandon. If the failure to use has continued for a long period of time, this may amount to evidence of an intention to abandon absent evidence to the contrary.  However, in this case there was affidavit evidence stating that Hortilux did not intend to abandon the mark.  This evidence did not amount to evidence of use but that was not necessary.  Thus, the judge had made no overiding error and Hortilux succeeded on its appeal.