Case Law

Battle Royal(e): Use of Trademarks Beyond Sales Representative Agreement Constitutes Infringement and Passing Off; SCC Dismisses Appeal

By In Branding, Case Law, Domain Name Disputes, Domain Names, Litigation, Protection & Enforcement

On May 6, 2021, the Supreme Court of Canada (SCC) dismissed an application for leave to appeal in the case of Dong, et al. v. Royal Pacific Real Estate Group Ltd., et al., 2020 BCCA 323 (39550). The lower courts in the Province of British Columbia, both at the trial level and on appeal, had held that the appellant’s use of certain licensed trademarks owned by the respondent, outside of the precise terms of the parties’ Sales Representative Agreement, constituted infringement and passing off; as a result of the SCC’s dismissal, the BC Court of Appeal decision now stands.

This case serves as a good reminder for licensees to carefully review trademark license provisions in sales representative, product distribution and similar agreements for their specific terms relating to permitted use of relevant trademarks – and to consider the risks of using  such trademarks outside the  activities specifically permitted in such agreements.

The respondent in this case is a well-known, Vancouver-based real estate company “Royal Pacific Group” (consisting of Royal Pacific Real Estate Group Ltd. and Royal Pacific Realty (Kingsway) Ltd.), owner of the registered trademark ROYAL PACIFIC Logo and the unregistered trademarks ROYAL PACIFIC and ROYAL PACIFIC REALTY (collectively, the “Trademarks”). In 2012, Royal Pacific Group entered into a Sales Representative Agreement (the “SRA”) with the appellant, Mr. Steven Dong (the “Mr. Dong”), pursuant to which Mr. Dong was licensed to act as a real estate representative for Royal Pacific Group.

However, in 2013, Royal Pacific Group discovered that Mr. Dong had, without the knowledge or consent of Royal Pacific Group, launched a separate referral platform for real estate professionals under the name “Bliip Box”. The website for this service used the domain name royalpacific.co and displayed the Trademarks. Mr. Dong was also sending emails to third parties containing the Trademarks and the following language: “Royal Pacific Realty is one of BC’s largest brokerages and now we are looking to endorse local businesses on our Bliip Box.”

Shortly after this discovery, Royal Pacific Group sent a cease and desist letter to Mr. Dong, demanding that he take down the website and cease using the domain name royalpacific.co.  When there was no immediate compliance, Royal Pacific Group also sent notice of termination of the SRA. However, Mr. Dong continued to operate the website at royalpacific.co as well as a related Facebook page (royalreferrals) that also displayed the Trademarks.

The BC Supreme Court (2018 BCSC 1272) held that Mr. Dong was liable for infringement and passing off, as the SRA did not grant Mr. Dong rights to use the Trademarks in connection with his Bliip Box business, which was outside the scope of his activities as a sales representative. Moreover, the judge rejected Mr. Dong’s arguments that Royal Pacific Group had provided consent or acquiesced to such use. According to the trial judge (at para. 100):

Mr. Dong has failed to appreciate the difference between his using the Trade-mark in connection with his duties as a sales representative of [Royal Pacific Group] and using it in a manner that represents that there is an association between the Royal Pacific Group and the Bliip Box technology or other businesses that Mr. Dong was pursuing.

The trial judge further noted (at para. 120-120) that, in the context of the Vancouver real estate industry, in which Royal Pacific Group has a well-recognized name and reputation:

[U]se of the domain name royalpacific.co for the website together with numerous references to aspects of [Royal Pacific Group’s] business and the fact that the webpage was offering real estate related products would have caused confusion in the mind of an “ordinary hurried consumer”, who could have confused the owner of the website with the Royal Pacific Group.

The BC Court of Appeal upheld the lower court’s decision, further dismissing a counterclaim brought by Mr. Dong that Royal Pacific Group had wrongfully denied him the right to use the Trademarks and had terminated the SRA for an unlawful purpose.  By dismissing Mr. Dong’s appeal, the SCC has tacitly agreed with the decision of the BC Court of Appeal.  The lesson arising out of this decision is that parties to agreements such as sales representative agreements, which contain provisions relating to and restricting use of trademarks, need to carefully consider whether any proposed activities will be offside the license provisions relating to such trademarks.

Bricks and Mortar or Online Order? Federal Court of Appeal decides what Constitutes Trademark “Use” in Association with Hotel Services

By In Case Law, CIPO, Trademark Practice

Over the last few decades, Courts in Canada have grappled with whether “hotel services” and “motel services” can be performed in Canada in the absence of physical hotel premises in the country. In its decision in Hilton Worldwide Holding LLP v. Miller Thomson LLP (2018 FC 89) (“Hilton Worldwide FC”),  the Federal Court of Canada (the “Court”) found that, in some circumstances, such services can indeed be performed in Canada, even in the absence of a physical hotel in Canada. On appeal to the Federal Court of Appeal (the “Court of Appeal”), in  Miller Thomson v Hilton Worldwide Holding LLP, (2020 FCA 134) (“Hilton Worldwide FCA”), the Court of Appeal agreed and affirmed most of the earlier findings of the Court. Read more

Trademark Interlocutory Injunctions: A POWERful Tool—When Available

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

As Canadian trademark practitioners know, historically it has generally been difficult to obtain interlocutory (or interim) injunctions in trademark infringement matters. This has been particularly so due to the difficulty in showing irreparable harm, if the injunction were not granted.

As the recent decision of the Alberta Court of Queen’s Bench in Corus Radio Inc. v. Harvard Broadcasting Inc., 2019 ABQB 880 shows, there may be some novel ways to argue irreparable harm, including what is essentially a consideration of ‘lost opportunity’. In this case, a trademark owner was able to convince the Court to enjoin use of similar marks by another party, notwithstanding some 15 years’ absence of use by the owner in the relevant marketplace.

Read more in this Knowledge Bytes article.

Trademark, copyright, or both?

By In Case Law, Trademark Oppositions

In her article (read here), our colleague Caroline Camp reviews the recent Trademark Opposition Board (the “Board”) case of Pablo Enterprise pte. Ltd. v Hai Lun Tang, 2019 TMOB 54. As Caroline discusses, this case serves as an important reminder that trademark and copyright protection can and do overlap. Moreover, the case confirms that the Board has jurisdiction to assess certain copyright claims within the context of a trademark opposition. Accordingly, if an applicant attempts to register a trademark which includes design elements that are already subject to third party copyright protection (registered or not), the copyright owner may oppose registration on grounds that the applicant is not entitled to use the mark because such use constitutes copyright infringement.

Distinctly (not) distinctive

By In Case Law, Litigation, Protection & Enforcement

The Supreme Court of Canada recently denied leave to appeal from the Federal Court of Appeal’s (the “FCA”) decision in Sadhu Singh Hamdard Trust v. Navsun Holdings Ltd., 2019 FCA 10 (CanLII). Caroline Camp writes about the implications of the case. Most interesting is that the FCA confirmed that intervening use of a mark by a third party, even if that use amounts to infringement of a registered trademark, can be sufficient to cause the registered mark to lose its distinctiveness and therefore become unenforceable. So the mantra “use it or lose it” is actually “use it and enforce it or lose it” in Canadian trademark practice. Read her complete article here.

A look back: What you need to remember from 2018 in trademark law

By In Case Law, Litigation

As summer comes to a close, it’s a good time to reflect on some of the significant case law developments that occurred in 2018, which have, and continue to have, an impact on Canadian trademark law and practice. Our colleague Scott Lamb is a contributor to CLE BC’s perennially anticipated Annual Review of Law & Practice, writing the Trademarks chapter. Key litigation developments from last year are succinctly summarized in an excerpt from Scott’s chapter here.

LIVE is dead in the water – The Federal Court tackles another thorny trademark use decision

By In Case Law, Litigation, Protection & Enforcement, Registration

In a recent Federal Court Trial Division decision, the trademark registration for LIVE, registered in association with, among other things, hotel, entertainment and advertising services, was expunged for non-use during the relevant three year period.  The Court reviewed a number of conflicting decisions on the use of marks in Canada in the context of non-use cancellation proceedings, where the primary service is performed outside of Canada – for example, the relevant hotel or entertainment establishment is physically located outside Canada – but some ancillary or related aspect of the services could be said to be performed in Canada – for example reservations for the hotel or for tickets to the entertainment venue could be made by Canadians while physically located in Canada.

The Court reiterated that in order for there to be use of a mark in Canada, it is essential that some aspect of the services must be offered directly to Canadians or performed in Canada and that it must be demonstrated that people in Canada obtained “some tangible, meaningful, benefit” from the use of the Mark in association with the registered service.  In expunging the registration, the Court found that “simply holding a reservation for a hotel in the US is not a tangible and meaningful benefit enjoyed in Canada, despite that it may ensure that a room will be available upon arrival.  The tangible benefit occurs only once the person leaves Canada and travels to the US and fulfills the reservation.”  A similar conclusion was arrived at in relation to entertainment services.  The advertising services were not performed for any third party, meaning there was no trademark use.

Barring an appeal, the decision is noteworthy as it appears to be counter to a recent Federal Court decision involving hotel services provided in very similar circumstances.  In this case, the Judge distinguished the earlier decision, on the basis that “Unlike in Hilton, there are no rewards points that can be used in Canada. …Rewards points could not be earned in Canada or redeemed in Canada. There is no evidence of a tangible, meaningful benefit enjoyed in Canada from making an online reservation.“