Date:
20121205
Docket:
T-833-12
Citation:
2012 FC 1430
Ottawa, Ontario,
December 5, 2012
PRESENT: The
Honourable Mr. Justice Scott
BETWEEN:
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THE DRIVING ALTERNATIVE INC
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Plaintiff
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and
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AMANDA JARVIS dba KEYZ PLEEZZ
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Defendant
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REASONS FOR ORDER
AND ORDER
I. Introduction
[1]
This
proceeding is an Action for trade-mark infringement, passing off and
depreciation of goodwill wherein the Plaintiff alleges that the Defendant has
infringed and continues to infringe the Plaintiff’s registered trade-mark KEYS
PLEASE, as the result of the Defendant’s operation of an alternative driving
service in association with the trade-mark and trade-name KEYZ PLEEZZ.
II. Procedural
history
[2]
A
Statement of Claim was issued on April 24, 2012, against the Defendant.
[3]
Immediately
following the issuance of the Statement of Claim on April 24, 2012, Canadian
Process Serving Ottawa [CPSO], a professional process serving organization, was
contacted to have an agent located in Oshawa, Ontario, to effect service on the
Defendant, Amanda Jarvis, doing business as KEYZ PLEEZZ, at 178 Beatty Avenue,
Oshawa, Ontario, L1H 3B2, the business address given on the Defendant’s
Business Name Registration.
[4]
The
Plaintiff experienced substantial difficulty in effecting personal service on
the Defendant since the individual who answered the door refused to accept
service and returned the Statement of Claim to the agent who was attempting to
serve the document.
[5]
Between
May 17 and May 20, 2012, an employee of the Plaintiff, THE DRIVING ALTERNATIVE,
INC., telephoned KEYZ PLEEZZ in Oshawa on three separate occasions, at the
telephone number provided on the Defendant’s website and in each instance
received a recorded greeting confirming that the caller had reached Keys Please
or Keyz Pleezz. The said employee then looked up the phone number on her iPhone
Search Engine and received the following information: Keyz Pleezz (289)
927-7590 located at 178 Beatty Avenue in Oshawa, ON, L1H 3B2.
[6]
On
May 22, 2012, the process servers were instructed to attempt again to serve the
Defendant with the Statement of Claim in Oshawa, Ontario. The agent in Oshawa, Ontario attended at the address over the weekend without success. On May 29, 2012,
a further attempt to effect service was made at 178 Beatty Avenue, Oshawa, Ontario.
[7]
Repeated
attempts were made to serve the Statement of Claim and it was not until June
10, 2012 that the process server again attended at 178 Beatty Avenue and
successfully delivered the Statement of Claim document to Mr. Picton. An
affidavit of service was signed by Sheila Garnett of the Town of Courtice, in the Regional Municipality of Clarington and dated June 21, 2012.
[8]
A
further copy of the Statement of Claim was addressed by regular mail to Amanda
Jarvis, 178 Beatty Avenue, Oshawa, ON, L1H 3B2, on June 21, 2012. On July 26,
2012, Plaintiff’s counsel was advised by the Federal Court Registry that the
Statement of Claim, sent by regular mail to the Defendant, had been returned to
the Federal Court. The original envelope addressed to Amanda Jarvis had been
opened and the phrase “NOT AT THIS ADDRESS” was hand-written adjacent to the
address on the front of the envelope.
[9]
As
a result of the foregoing, the Plaintiff brought a Motion before this Court
under Rule 147 of the Federal Courts Rules, SOR/98-106, requesting
validation of the service which had already been effected, and Rule 136,
permitting the substituted service of the Statement of Claim and other
documents by registered and regular mail.
[10]
By
order of Mr. Justice Beaudry of this Court, it was held that the Defendant had
been avoiding service, that the service previously effected was valid service
pursuant to Rule 147 and that further documents could be validly served by
addressing such documents by registered and regular mail to the address given
on the Defendant’s Business Name Registration.
[11]
The
Defendant was thus validly served with the Statement of Claim when service was
effected by the service of the document on an adult person at the Defendant’s
home and business address. As stated in the affidavit of service of Sheila
Garnett dated June 21, 2012 and filed in this Court, the said valid service was
effected on June 10, 2012.
[12]
The
Defendant has not filed or served a Statement of Defence or any other
documentation and as such, is in default pursuant to the provisions of Rules
204 and 210 of the Federal Courts Rules.
[13]
The
Plaintiff, seeks and order
(a)
enjoining
the Defendant, her servants, agents employees, representatives distributors,
licensees and all those over whom she exercises control from using or
advertising the trade-mark KEYZ PLEEZE or any other trade-mark or trade-name
which is confusingly similar, either visually or phonetically, to the
Plaintiff’s registered trade-mark KEYS PLEASE;
(b)
condemning
the Defendant to deliver up to the Plaintiff or destroy under oath any signage,
labelling, documents, advertising or any other matter in the possession or
control of the Defendant, the use of which would offend the injunction set out
in the previous paragraph;
(c)
condemning
the Defendant to pay the Plaintiff’s damages in the amount of $70,000 (CDN)
plus interest thereon in excess of the prime rate, as of the date that the
Defendant first commenced use of the trade-mark KEYZ PLEEZE; and
(d)
condemning
the Defendant to pay the Plaintiff it’s costs on an enhanced basis pursuant to
Column 5 including HST thereon, in view of the Defendant’s avoidance of service
which resulted in additional legal costs and disbursements for the Plaintiff;
and to pay pre-judgment and post-judgment interest, as well as all applicable
taxes on the award of damages and costs.
III. Facts
[14]
The
Plaintiff is the owner of the trade-mark KEYS PLEASE registered under No.
TMA 570,390 in association with: “Providing professional designated
driving services, namely meeting customers at predetermined locations and
driving them to their destination in their own vehicles; providing taxi,
limousine and chauffeur services.” The Plaintiff’s designated driving services
under its registered trade-mark have been continuously offered in Canada since August 28, 1997 as evidenced by the certified copy of Registration No.
TMA 570,390 filed.
[15]
The
Plaintiff has also continuously advertised its services since the inception of
the company in 1997. The Plaintiff advertises its services through posters and
handouts, as well as on its website. The Plaintiff also communicated with its
current and potential clients through Facebook, as well as having a 1-866
telephone number (as evidenced by the Greenwood Affidavit, paras 9-14,
Plaintiff’s Motion Record [PMR], pages 27-28).
[16]
In
addition to providing designated driving services itself under the trade-mark
KEYS PLEASE since 1997, the Plaintiff also licensed the trade-mark and
continues to offer franchise opportunities throughout Canada. Since the inception of its services under the KEYS PLEASE mark, the Plaintiff and
its licensees have had sales in excess of 15,000,000 (15 million) dollars in
Canada and have expended substantial sums in advertising their services under
the trade-mark (Greenwood Affidavit, paras 3-5 and 23, PMR, page 26).
[17]
During
the month of February 2012, the Plaintiff became aware that the Defendant had
opened a business in Oshawa, Ontario, offering designated driving services to
the public under the trade-mark KEYZ PLEEZZ (Greenwood Affidavit, paras 15-16,
PMR, page 28).
[18]
The
Plaintiff began to investigate the matter and discovered that on February 3,
2012, the Defendant registered the business name, Keyz Pleezz pursuant to the Business
Names Act of Ontario, RSO
1990, c B.17. In
that document, the Defendant’s activities are described as “designated driving
service” (Allen Affidavit, para 3, Exhibit 1, Plaintiff’s Motion Record [PMR],
Tabs F and F1, pages 135, 140-142; Greenwood Affidavit, paras 16-17, PMR, Tabs
D and D6, pages 28, 91-100).
[19]
The Plaintiff
also discovered that the Defendant was advertising its services on the internet
and on Facebook under the trade-mark KEYZ PLEEZZ and had begun placing posters
bearing the mark in retail outlets, restaurants, bars and entertainment outlets
in the Oshawa/Durham area. It was also found that when potential customers call
the Defendant’s business telephone number, the Defendant identifies her
business as KEYZ PLEEZZ which is a phonetic equivalent of and is
indistinguishable from the Plaintiff’s registered trade-mark KEYS PLEASE. The
Defendant also describes her services as alternate or designated driving
services on the telephone (Greenwood Affidavit, paras 16 and 17, Exhibit 6,
PMR, Tabs D, D6, pages 28, 91-100; Philips Affidavit, paras 1-10, Exhibits
1-2, PMR, Tabs C, C1 and C2, pages 12-24).
[20]
The
Plaintiff, on learning of the Defendant’s activities, immediately instructed
counsel to send out a cease and desist letter requesting that the Defendant
cease infringing the Plaintiff’s trade-mark. Two cease and desist letters were
sent to the Defendant who declined to cease the use of the trade-mark KEYZ
PLEEZZ (Greenwood Affidavit, paras 16 and 17, Exhibits 7 and 10, PMR, Tabs D,
D7, D10, pages 28, 101-116, 127-128).
[21]
In the face
of the Defendant’s refusal to cease using the offending trade-mark, the
Plaintiff commenced an action on April 24, 2012. The proceeding is an Action
for trade-mark infringement, passing off and depreciation of goodwill wherein
the Plaintiff alleges that the Defendant has infringed and continues to
infringe the Plaintiff’s registered trade-mark KEYS PLEASE, as the result of
the Defendant’s operation of a designated driving service in association with
the trade-mark and trade-name KEYZ PLEEZZ (Statement of Claim, PMR, Tab G,
pages 163-178).
IV. Relevant
legislation
[22]
The
applicable sections of the Trade-marks Act, RSC 1985, cT-13 [Trade-marks
Act],
are appended to this decision.
V. Analysis
Section 19 –
Right to exclusive use of the Plaintiff’s trade-mark
[23]
“The
registration of a trade-mark in respect of any wares or services, unless shown to be invalid,
gives to the owner of the trade-mark the exclusive right to the use throughout
Canada of the trade-mark in respect of those wares or services” (Trade-marks
Act, s 19).
[24]
Since
the Plaintiff’s trade-mark, as defined above, is validly registered in respect
of providing wares, and professional designated driving services, namely
meeting customers at predetermined locations and driving them to their
destinations in their own vehicles, the Plaintiff has the exclusive right to
the use, throughout Canada, of such wares and services.
Section 20 –
Infringement
[25]
Section
20 specifies that the right of the owner of a registered trade-mark to its
exclusive use shall be deemed to be infringed by a person not entitled to the
use under the Trade-marks Act, who sells, distributes and advertises, in
this case, services in association with a confusing trade-mark and trade-name.
[26]
In
the present case, the evidence adduced establishes that the Defendant has not
used the trade-mark exactly as registered. She has taken the Plaintiff’s
registered trade-mark and has made a slight graphic amendment to change the
word KEYS to KEYZ and the word PLEASE to PLEEZZ. However, from an auditory and
connotational point of view, the respective marks of the parties are identical.
[27]
For
the purposes of, inter-alia, section 20 of the Trade-marks Act, a
trade-mark or trade-name is confusing or likely to cause confusion with another
trade-mark or trade-name if the use of the first mentioned trade-mark or
trade-name would cause confusion with the last mentioned trade-mark or
trade-name (Trade-marks Act, ss 6(1)).
[28]
More
particularly, “the use of a trade-mark causes confusion with another trade-mark
if the use of both trade-marks in the same area would be likely to lead to the
inference that the wares or services associated with those trade-marks are
manufactured, sold, leased, hired or performed by the same [business], whether
or not the wares or services are of the same general class” (Trade-marks Act,
ss 6(2)).
[29]
Additionally,
with respect to passing off, subsection 7(b) of the Trade-marks Act
prohibits a person from directing attention to his wares or services in such a
way as to cause or be likely to cause confusion when that person initiates the
activity in question in respect of the wares, services or business of the
other.
[30]
Having
reviewed the evidence adduced by Plaintiff, in particular the affidavits of
Phillips (paras 3-9) and Greenwood (paras 16 and 17), the Court is satisfied
that the Defendant’s use of KEYZ PLEEZZ, in advertisements, posters, internet,
distributed in the Oshawa/Durham market place and in answering the phone caused
confusion, and likely lead to the inference that the services offered were that
of the business carried by the Plaintiff.
[31]
As
stated on numerous occasions by this Court to determine whether a trade-mark is
confusing, that is whether concurrent use will likely lead a purchaser to
believe that the associated services, in this case, come from the same source,
the surrounding circumstances, particularly the five major factors as
prescribed under subsection 6(5) of the Trade-marks Act, must be taken
into account (Haw Par Brothers International Ltd v Canada (Registrar of
Trade Marks) (1979), 48 CPR (2d) 65 (FCTD) at p 70).
[32]
These
five major factors to be considered by the Court in determining whether
trade-marks or trade-names are confusing as prescribed under subsection 6(5) of
the Trade-marks Act, are:
(a)
the
inherent distinctiveness of the trade-marks or trade-names and the extent to
which they have become known;
(b)
the
length of time the trade-marks or trade-names have been in use;
(c)
the
nature of the wares, services or business;
(d)
the
nature of the trade; and
(e)
the
degree of resemblance between the trade-marks or trade-names in appearance or
sound or in the ideas suggested by them.
[33]
It
is evident, as the Court reviewed the evidence adduced by the Plaintiff, that
the Defendant did create confusion, particularly in that the Defendant’s name
sounds exactly the same (see Ortho Pharmaceutical Corp. v Mowatt & Moore Ltd
et al.
(1972), 6 CPR (2d) 161).
[34]
It
is also important to note that in the present case, the nature of the services
rendered by the Defendant is exactly the same as the Plaintiff’s.
[35]
Finally,
the Defendant’s avoidance of service and its failure to respond to the cease
and desist letter from the Plaintiff, and more importantly, her deliberate
advertisement in a Facebook page shows knowledge and deliberate intent to
infringe and pass off.
[36]
The
Defendant’s conduct is prohibited by subsection 7(c) of the Trade-marks
Act.
[37]
As
stated in this Court’s jurisprudence, the assessment of damages in the case of
infringement or passing off is:
“…On the question of the measure of damages it has been
held that the defendant is liable for all loss actually sustained by the
plaintiff that is the natural and direct consequence of the unlawful acts of
the defendant, including any loss of trade actually suffered by the plaintiff,
either directly from the acts complained of or properly attributable thereto,
that constitute an injury to the plaintiff's reputation, business, goodwill or
trade. Speculative and unproven damages must be deleted from the calculation.
The court will estimate the damages on the same basis as would a jury and
damages may take into contemplation injury to the plaintiff's goodwill, for the
court, acting as a jury and applying ordinary business knowledge and common
sense, is entitled to consider that there cannot be deceptive trading without
inflicting some measure of damage on the goodwill. Difficulty in assessing
damages does not relieve the court from the duty of assessing them and doing
the best it can. The court is entitled to draw inferences from the actions of
the parties and the probable results that they would have. If damages cannot be
estimated with exactitude, the best reasonable estimate must be made.” (Ragdoll
Productions (UK) Ltd v Jane Doe (2002), 21 CPR (4th)
213 (FCTD) at para 40)
[38]
In
this instance, the only evidence of damages is found in the affidavit of Ginger
Greenwood at para 26, where she states:
“The alternative driving service business is a
highly competitive business and the presence of the Defendant’s business in the
marketplace limits [the Plaintiff’s] ability to franchise in Oshawa-Durham and
in neighbouring communities. Were [the Plaintiff] to franchise [its trade-mark
in that] area, in view of the population of Oshawa, the costs for purchasing a
franchise would be in the amount of $32,000 [CDN], with annual royalties of $38,000
[CDN] based on minimum sales of $5,000 per week. As a result of the Defendant’s
activities, [the Plaintiff’s] company is thus being deprived of that business
opportunity” (Greenwood Affidavit, para 26, PMR, Tab D, page 30).
[39]
The
Plaintiff has not adduced any evidence to establish clearly that a franchise in
Ontario, and more specifically in the Oshawa/Durham area, would generate
average sales of $5,000 per week.
[40]
The
Plaintiff has been in operation for 15 years, starting in 1997. Over that
period, it has generated sales revenues in excess of 15 million dollars. Thus,
it averages revenues of 1 million dollars per year for the services if offers
directly or through franchisees in Alberta, British Columbia, Manitoba and Ontario. The revenues generated by each franchisee are not specified.
[41]
This
Court therefore evaluates the damages suffered by the Plaintiff at $50,000 and
not $70,000 as claimed, because of the lack of evidence that a franchise in the
Oshawa/Durham area would necessarily generate weekly revenues of $5,000, more
so in view of the fact that there are already two competitors operating in that
area (see Greenwood Affidavit, para 16). This amount of $50,000 also includes
damages to the goodwill of Plaintiff.
[42]
The
Plaintiff also seeks costs on an enhanced basis pursuant to Column 5, including
HST thereon. The Court does not find that the avoidance of service by the
Defendant warrants the imposition of such a measure as the complexity of the
case was not increased from said actions.
ORDER
THIS
COURT ORDERS that
1.
The
Defendant is hereby enjoined by herself, her servants, agents employees,
representatives distributors, licensees and all those over whom she exercises
control from using or advertising the trade-mark KEYZ PLEEZZ or any other
trade-mark or trade-name which is confusingly similar, either visually or
phonetically, to the Plaintiff’s registered trade-mark KEYS PLEASE.
2.
The
Defendant shall deliver up to the Plaintiff or destroy under oath any signage,
labelling, documents, advertising or any other matter in the possession or
control of the Defendant, the use of which would offend the injunction set out
in the preceding paragraph.
3.
The
Defendant shall pay the Plaintiff’s damages in the amount of $50,000 (CDN) plus
interest, as of the date that the Defendant first commenced use of the
trade-mark KEYZ PLEEZZ.
4.
The
Defendant shall pay the Plaintiff its costs, including HST thereon, and
interest, as well as all applicable taxes on the award of damages and costs, as
set out in this Order.
"Andre F.J.
Scott"
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