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.

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.

Two recent Canadian cases may be of interest to our readers.

In the first, because the Defendant had not yet used the alleged infringing trademark and because the Registrar of Trade-marks had not yet made a decision regarding the Defendant’s applications to register the mark at issue and expunge certain of the Plaintiffs’ marks, the British Columbia Supreme Court refused the Plaintiffs’ summary trial application – Price Costco International, Inc. et al. v. Welcome Warehouse Ltd.. Costco, the international “big box” retailer, alleged that the Defendant, a local British Columbia company, would be passing off and infringing the Plaintiffs’ registered trademarks (which included PRICE CLUB PRICE COSTCO, PRICE COSTCO & Design, COSTCO Design and COSTCO WHOLESALE & Design) if the Defendant proceeded to use PRICECO WAREHOUSE. The Defendant had applied to register its mark on the basis of proposed use, which the Plaintiff opposed. The Defendant also brought proceedings to expunge PRICE CLUB, PRICE COSTCO and PRICE COSTCO & Design.

Notwithstanding the Plaintiffs’ survey evidence demonstrating confusion, the court declined to grant declaratory or injunctive relief since there was no evidence of any actual infringement or damage by the Defendant.

With regard to the second case, we earlier reported the decision in Sun World International Inc. v. Parmalat Dairy and Bakery Inc. in which the prothonotary agreed with the Registrar of Trade-marks that the statement filed in opposition to the registration of a trademark could not be amended after the Registrar had decided the merits of the registration. This decision was appealed further, to a Federal Court judge, who handed down a decision in late August, agreeing with the prothonotary.