Mcinnes Natural Fertilizers Inc. v. Bio-Lawncare Services Inc., 2004 FC 1027

Date: 20040722

Docket: T-937-03

Citation: 2004 FC 1027

BETWEEN:

LES ENGRAIS NATURELS McINNES INC./

McINNES NATURAL FERTILIZERS INC.

Plaintiff

- and -

BIO-LAWNCARE SERVICES INC.

and

MRL HORTICULTURAL SERVICES

and

MITCHELL LEVINE

Defendants

MARTINEAU J.

REASONS FOR JUDGMENT

[1]        This is a motion by the plaintiff Les Engrais Naturels McInnes Inc. / McInnes Natural Fertilizers Inc. for a judgment by default against the respondents Mitchell Levine, Bio-Lawncare Services Inc. and MRL Horticultural Services.

[2] Rule 210 of the Federal Court Rules, 1998, SOR/98-106, provides the following:

[3]        Unlike certain procedural systems, allegations which are not admitted in this Court are deemed to be denied (Rule 184). A judgment by default cannot be obtained simply [TRANSLATION] "in view of the pleadings". If the allegations set out in a statement of claim are not admitted, they remain allegations, and there is no proof of their veracity or accuracy if no affidavit is filed (Chase Manhattan Corp. v. 3133559 Canada Inc., [2001] F.C.J. No. 1626 (F.C.T.D.) (QL), 2001 FCT 895). Under Rule 210, there are two stages: (1) first, the plaintiff must establish that the defendant is "in default" (which is the case if he has not filed his defence within the deadline specified in Rule 204 or any other deadline set by order of the Court); and (2) second, it is necessary to determine whether the evidence in support of the motion makes it possible to grant the judgment sought (if not, the action may be dismissed or certain conclusions may be rejected by the Court).

[4]        The first condition in Rule 210 has been met. In the case at bar, the evidence in the record indicated that three copies of the plaintiff's statement of claim and amended statement of claim were served personally on the defendant Mitchell Levine, for himself, and as director and officer of MRL Horticultural Services and Bio-Lawncare Services Ltd. Following service of these pleadings, the defendants failed to file a defence within the deadline specified in Rule 204. Consequently, the defendants were in default in filing their defence to the action. Further, the affidavit evidence filed in support of the motion indicated that in the case at bar there had been an ongoing and deliberate infringement of the plaintiff's right in the trade-mark BIO-LAWN.

[5]        Under section 3 of the Trade-Marks Act, R.S.C. 1985, c. T-13 (the Act), a trade-mark is deemed to have been adopted by a person when that person or his predecessor in title commenced to use it in Canada or to make it known in Canada or, if that person or his predecessor had not previously so used it or made it known, when that person or his predecessor filed an application for its registration in Canada. In the case at bar, according to the evidence in the record the plaintiff is owner of the trade-mark BIO-LAWN, registered as No. TMA566,511 on August 27, 2002. Additionally, the plaintiff and its predecessors in title have also used the trade-mark BIO-LAWN since July 1998 for the following wares and services:

(a) wares:                     fertilizers and natural ameliorants for lawns and trees;

(b) services:                  spreading these wares on contract (fertilizers and natural ameliorants for lawns and trees).

[6]        We should also mention that the plaintiff's products are sold in Canada in different markets. In particular, since 1993, the plaintiff has sold its products in Ontario under the trade-mark BIO-LAWN, inter alia in the municipalities of Bolton, Timmins, Burgessville, London, St. Catharines, Cumberland, Richmond Hill and greater Toronto. At the same time, the defendants offer in Ontario, especially in the Toronto area, the same type of services and wares as the plaintiff, that is, services for maintaining and caring for lawns, and retail sales of lawn fertilizers.

[7]        Under section 20 of the Act, a trade-mark is deemed to have been infringed when a person not entitled to its use sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name. In the case at bar, according to the evidence in the record, between August 17, 2001 and January 2, 2002, the defendant Mitchell Levine operated a sole proprietorship under the trade-name BIO-LAWN, as appears in a certified copy of registration No. 110872330 pursuant to the Business Names Act, R.S.O. (1990), c. B-17. Subsequently, on January 2, 2002, the defendant Mitchell Levine incorporated his business under the Business Corporations Act, R.S.O. (1990), c. B-16, and the trade-name of the business was Bio-Lawn Ltd., as appears in the "Corporation Profile Report". In October 2002, the plaintiff through its counsel notified the latter that the trade-name had to be changed. A further notification was sent to the defendants in March 2003 requiring them to cease using the trade-mark BIO-LAWN and any other mark confusing therewith. Use of the trade-mark BIO-LAWN in association with the sale of fertilizer was also carried out by the defendant on its Internet site and on its vehicle with advertising signs. On June 20, 2003, after the action at bar was served, the defendant Bio-Lawn Ltd. changed its trade-name to that of Bio-Lawncare Services Inc. Additionally, according to the evidence in the record, the defendant Bio-Lawncare Services Inc. presented itself to the public on the Internet site as a division of MRL Horticultural Services, and this explains why the latter was added as a defendant.

[8]        According to the evidence in the record in the case at bar, the use of the mark BIO-LAWN and logo by the defendants without the plaintiff's consent is such as to cause confusion with the plaintiff's registered mark according to the tests laid down in subsections 6(2) and (5) of the Act, and as the latter have been applied by the courts (Miss Universe, Inc. v. Bohna (1994), 176 N.R. 35 (F.C.A.), (1994), 58 C.P.R. (3d) 381 (F.C.A.), at 387). The use of a trade-mark creates confusion with another trade-mark when the use of both marks is likely to lead to the conclusion that the wares associated with the trade-marks are made or sold by the same person. That is the case here in Ontario, and in particular in the Toronto area.

[9]        It is true that the defendant Bio-Lawn Ltd. altered its trade-name to add, in much smaller lettering, the words "care Services Inc.", so as to get Bio-Lawncare Services Inc., leaving the mark BIO-LAWN clearly visible. Nevertheless, I feel that this change is insufficient to avoid the latter creating confusion with the plaintiff's registered mark BIO-LAWN. I also consider that the distinction in the logo used by the defendant ("o" replaced by a globe) is not sufficient to distinguish the two marks, chiefly on account of the fact that the two marks are phonetically identical and in the ideas it suggests.

[10]      In view of the fact that the Court has before it an ongoing and deliberate infringement of the plaintiff's right in the mark BIO-LAWN, the issuing of an injunction would seem to be indicated in the circumstances. At the same time, there is no evidence of damages or loss of profits in the record. Additionally, the plaintiff did not establish to the Court's satisfaction that customers ceased doing business with it because of the confusion of the trade-marks or trade-names or that this led to any loss of market share. Further, considering the tests laid down by the courts (in particular Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085, at para. 27 (S.C.C.), (1989), 58 D.L.R. (4th) 193), this is not a case in which the imposition of punitive damages appears to be necessary. On the other hand, considering all the factors indicated in Rule 400, including the defendants' conduct before and after the service of the pleadings and the exhibits in the record, the Court is inclined to award costs to the plaintiff on a solicitor-client basis. The allocation of a general amount seems proper in the circumstances. Consequently, in the exercise of its discretion, and having reviewed the exhibits in the record, the Court sets and awards to the plaintiff the sum of $6,000 as costs, which will be payable by the defendants in addition to Court costs and other assessable disbursements.

OTTAWA, ONTARIO

JULY 22, 2004

Certified true translation

Suzanne M. Gauthier, C Tr, LLL

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKET:                                                       T-937-03

STYLE OF CAUSE:                                       LES ENGRAIS NATURELS McINNES INC./McINNES NATURAL FERTILIZERS INC. v. BIO-LAWNCARE SERVICES INC. and MRL HORTICULTURAL SERVICES and MITCHELL LEVINE

WRITTEN MOTION HEARD WITHOUT APPEARANCE BY PARTIES

REASONS FOR JUDGMENT BY: THE HONOURABLE MR. JUSTICE MARTINEAU

DATED:                                                          July 22, 2004

WRITTEN SUBMISSIONS BY:

Fontaine Désy                                                   FOR THE PLAINTIFF

SOLICITORS OF RECORD:

Fontaine Désy                                                   FOR THE PLAINTIFF

Sherbrooke, Quebec