Case Law

Hockey Nostalgia and Trademarks in Québec

By In Branding, Case Law

A recent discussion of the Federal Court of Appeals shows that Québec City’s former National Hockey Team, the Quebec Nordiques, continues to attract the nostalgia of the city’s population.

In Accessoires D’Autos Nordiques v. Canadian Tire Corp., the Federal Court of Appeal refused to overturn a Federal Court decision and allowed Canadian Tire’s application to register the mark NORDIC & Snowflake Design for use in association with tires.

Accessoires D’Autos Nordiques had successfully opposed Canadian Tire’s application before the Trademark Opposition Board, on the basis of Accessoires’ previously registered and previously used NORDIQUES trademark and trade-name, used in association with automobile parts and accessories.

The Opposition Board refused Canadian Tire’s application on the basis that the trademarks NORDIC and NORDIQUES were phonetically identical to a monolingual French speaking person, and accordingly, constituted confusion under section 6(5) of the Trade-marks Act. The Trial Division and the Court of Appeal concluded, however, that when considering the possibility of confusion between two trademarks, each particular trademark must be considered as a whole and not broken into its component parts to highlight differences. The Appeal Court agreed that the evidence presented by Canadian Tire showed that the trademark NORDIC evoked amongst the French speaking population in Québec, the name of the now-defunct Naitonal Hockey Team league, Quebec Nordiques, and not the tire-concessionaire’s trade-mark NORDIQUES. The Appeal Court held that as the two trademarks were dissimilar in appearance and brought to mind different ideas, on the balance of probabilities, registration of the NORDIC trademark was unlikely to create confusion.

The decision highlights the danger in choosing a trademark which is already well-known in respect of other wares or services. As the Appellant in this case discovered to its peril, the general public associated the trade-mark with Québec City’s former National Hockey Team, rather than with the Appellant’s wares and services.

More On Section 45

By In Case Law, Registration, Trademark Oppositions

Last week we reported on a decision of the Federal Court, Trial Division. The Federal Court of Appeal has also handed down a recent section 45 decision referring to the section as the “‘use it or lose it’ provision for removing ‘deadwood’ from the Register”.

In Bereskin & Parr v. Fairweather Ltd. the Court refused the appeal on the basis that the trial judge’s application of the law to the undisputed facts disclosed neither a palpable and overriding error on a question of mixed fact and law, nor a readily extricable error on a question of legal principle.

The trial judge had allowed the appeal from the Registrar of Trade-marks decision to expunge the trademark TARGET APPAREL for use in association with “men’s clothing, namely, suits, pants, jackets and coats”. The trademark had been acquired by Fairweather Ltd. from another company. In front of the Registrar, Fairweather had failed to produce evidence demonstrating a serious intention to use the mark. Such evidence can constitute special circumstances and excuse the absence of actual use in the preceding 3 years. However, when Fairweather appealed under section 56 of the Trade-marks Act, it filed new evidence (which is allowed on a section 45 appeal) and provided the judge with preliminary design and artwork showing an ongoing intention to use the mark. There was also evidence of sales after the date of the section 45 notice that gave credibility to the evidence of an intention to use. Thus, use was established.

Clear Evidence of Use Required: Section 45 Appeal Allowed

By In Case Law, Registration

Section 45 of the Trade-marks Act allows the Registrar, at the written request of any person, to give notice to the registered owner of a trademark requiring the registered owner to furnish, within three months, an Affidavit or Statutory Declaration showing that the trademark has been used in association with each of the wares and services specified in the registration during the preceding three-year period.

In 88766 Canada Inc. v. Monte Carlo Restaurant Limited Justice Pinard of the Federal Court allowed an appeal from the decision of the Registrar of Trade-marks and expunged the mark. The mark at issue was MONTE CARLO that was registered for use in association with the wares “pizza and spaghetti” and the services “operation of a restaurant, food take-out and catering, operation of a bar and operation of a banquet hall”. On the basis of the Affidavit evidence furnished by the owner of the mark, the Registrar struck out only “operation of a bar and operation of a banquet hall”.

The Court first noted, given there was no new evidence filed on the Appeal (an option where there is an appeal from a section 45 mark), that the standard on the Appeal was one of reasonableness. The Court then reviewed the Affidavit furnished by the registered owner and concluded that it did not clearly establish use during the relevant period. Thus, the mark was struck from the registry.

It was not sufficient to simply establish that advertising materials had been distributed in the previous five years.  The Court noted that there was nothing specifically stated regarding distribution during the preceding three-year period and noted that it was up to the owner of the mark to provide clear proof regarding use. The Court also referred to BMW Canada Inc. v. Nissan Canada Inc., a case that we previously commented on, for the proposition that the appearance of a trademark in an advertisement does not constitute use in association with wares unless the advertisement is distributed at the time of the transfer of the property in or the possession of the wares.

Damages for Counterfeit Goods – A Significant Award

By In Case Law, Famous Marks, Protection & Enforcement

Louis Vuitton Malletier S.A. et al v. Yang et al. provides a useful analysis of the damages that can be awarded against a Defendant trading in counterfeit goods.

In this case, the owners of the well-known brand had been attempting since 2001 to stop the sale of counterfeit goods at K2 Fashions, a Richmond, British Columbia retail store, having obtained two previous judgments, having sent numerous letters and having made a number of seizures. This latest action, against the persons who controlled and operated the business and premises, was not defended and the Plaintiffs brought a motion for default judgment, including an assessment of damages.

The Federal Court concluded that the Defendants had been properly served and the time to file a defence had expired. The Court was also satisfied that infringement was established.

The Court then assessed damages for both copyright and trademark infringement.  

The Plaintiffs had elected an award of statutory damages pursuant to section 38.1 of the Copyright Act. After considering the relevant factors set out in section 38.1(5) (the good or bad faith of the Defendant, the conduct of the parties during the proceedings and the need to deter other infringements of the copyright in question), the Court concluded that the Plaintiffs were entitled to the statutory maximum of $20,000.00 for each of the two copyrighted works at issue.

With regards to trademark infringement, the Court concluded that it could not quantify the damages suffered by the Plaintiffs, it being difficult to determine what depreciation of goodwill or loss of sales may have occurred.

The Court chose instead to assess the profits made by the Defendants “based on the best available evidence, reasonable inferences, the Plaintiffs’ experiences in similar situations and a dose of common sense”. However, since its estimate of $76,000.00 was only the minimum, the Court applied a “nominal award per infringing activity” and assessed damages at $87,000.00. To this the Court also added punitive damages of $100,000.00, being satisfied that the requisite elements were present (conduct that was planned and deliberate, outrageous conduct over a lengthy period of time, an attempt to conceal, an awareness by the Defendants that they were wrong, and profiting from the misconduct).

Finally, the Court awarded solicitor and client costs of $36,699.14, given the Defendants’ intentional infringement and ongoing behaviour that was “scandalous and outrageous”.

The total judgment amounts to $263,699.14.

A Globe & Mail article notes that this is believed to be the “highest amount ever awarded in an undefended action involving counterfeit goods”. Clearly, the Court is sending a message that counterfeiting should and will be treated harshly.

The Federal Court of Appeal Rules on Appeals from Decisions of the Registrar

By In Case Law, Registration

In Sadhu Singh Hamdard Trust v. The Registrar of Trade-marks, the Federal Court of Appeal refused to interfere with a decision of the Registrar allowing the registration of a trademark, particularly where the Appellant had not exercised another more appropriate remedy.

When the trademark at issue was advertised the Appellant requested a two-month extension to file a Statement of Opposition. However, the request for an extension was overlooked by the Registrar and the trademark was allowed.

The Appellant then sought to appeal the Registrar’s decision to the Federal Court under section 56 of the Trade-marks Act. The Trial Court concluded there was no decision of the Registrar to be challenged and the Federal Court of Appeal agreed.

The Appellant had failed to invoke its right under section 39(3) of the Act which specifically provides that the Registrar may withdraw an allowance where it has failed to consider a previously filed request for an extension of time to file an opposition.

The Appellant, relying on the earlier case of Ault Foods v. Canada (Registrar of Trade-marks), argued that it was still open to the Court to rely on its discretionary power under section 18 of the Federal Court Act and set aside the registration.

However, the Court of Appeal noted that following Ault Foods, the Trade-marks Act was amended so as to add section 39(3).

The Court also noted that in seeking to set aside the Registrar’s decision the Appellant was in effect seeking expungement, which required a challenge on substantive grounds under section 57. In Bacardi & Co. v. Havana Club Holding S.A. the Court held that a registration may not be brought into question in the course of opposition proceedings, which was what the Appellant was seeking to do by appealing the Registrar’s decision under section 56.

Fashionable, But No Injunction

By In Case Law, Protection & Enforcement

In Nada Fashion Design Inc. v. Designs by Nada et al., the Plaintiff sought an interlocutory injunction against the Defendants a few days before the Plaintiff and Defendants were to participate in Toronto’s L’Oréal Fashion Week. The Plaintiff alleged that it had prior use of the trademark NADA, although it had only recently applied to register the mark, and that the Defendants’ use of BY NADA and NADA YOUSIF constituted passing-off.

The Court applied the three-part test to determine whether an interlocutory injunction was warranted:

(1) the existence of a serious issue to be tried;
(2) the existence of irreparable harm if the injunction is not granted; and
(3) that the balance of convenience favours the granting of the injunction.

With regards to the first part of the test, the Court focused on whether, with regards to passing-off, there was likely to be confusion, concluding confusion was likely with BY NADA, but not with NADA YOUSIF.

However, with regards to the second part of the test, the Court decided that the Plaintiff had not provided the “clear evidence” necessary to establish irreparable harm. The Plaintiff’s allegations with regards to the importance of a brand in the fashion industry and its negotiations with major retailers was not sufficient. Thus, there was no irreparable harm and the balance of convenience favoured the Defendants.

No interlocutory injunction was granted and whether the Plaintiff continues with its action remains to be seen.

Passing Off: Like Father Like Daughter?

By In Case Law, Protection & Enforcement

In Stenner v. ScotiaMcLeod, a recent decision of the British Columbia Supreme Court, the Plaintiff successfully established that his surname used in association with financial services was a valid trademark and that the Defendants’ use of the name constituted passing-off. 

The Plaintiff was a well-known Vancouver-based investment advisor and financial consultant with his own radio show. He worked under contract with the National Bank where investment and financial services were provided by a team that included his daughter and her husband. The daughter’s surname was Stenner-Campbell. In 2002 the Plaintiff negotiated unsuccessfully with his daughter to sell her his book of business. That book of business was instead sold to another National Bank employee for $61 million. The daughter and her husband then joined ScotiaMcLeod, a rival investment firm, began soliciting clients and started a radio show using the Stenner name. The Plaintiff then commenced an action against his daugther and her husband.

Among other relief, the Plaintiff claimed breach of fiduciary duty and passing-off and sought an injunction to prevent the Defendants from using STENNER with any of INVESTMENT, TEAM or FINANCIAL. The Plaintiff had successfully applied to register the STENNER trademark, but the application was only filed after the lawsuit was commenced.

The Court concluded that there was no breach of fiduciary duty because the daughter in particular was not a key employee of the Plaintiff’s team. Moreover, under British Columbia law, a former employee could solicit customers so long as he or she did not take and use confidential information or trade secrets of the former employer.

However, the Court also concluded that passing-off was established since the Defendants’ use of Stenner-Campbell in print and on radio created confusion, depending on the context and a person’s prior experience with the financial world. There was a benefit to be derived by the Defendants’ use of the name and the daughter did nothing to avoid confusion by also using her given name, Vanessa. However, with regards to damages, the Court reasoned that because the passing-off due to confusion with STENNER had diminished greatly over time, 10% of the Defendants’ gain to trial, and 5% for a further five years after, was the appropriate measure.

The Court also issued a permanent injunction with regards to the Defendants’ use of the domain name www.stennerteam.ca and required that domain name to be transferred to the Plaintiff. However, no injunction was issued regarding the use of STENNER with INVESTMENT, TEAM, or FINANCIAL, since it would be too broad.

The decision has now been appealed to the British Columbia Court of Appeal and we will report if there is a further ruling.