Docket: T-1383-13
Citation:
2014 FC 1014
Ottawa, Ontario, October 24,
2014
PRESENT: The
Honourable Mr. Justice S. Noël
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BETWEEN:
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SOURCE MEDIA GROUP CORP.
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Plaintiff
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and
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BLACK PRESS GROUP LTD. AND LISA FARQUHARSON
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Defendants
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JUDGMENT AND REASONS
I.
Introduction
[1]
This is a motion for a default judgment claiming
relief under the Trade-marks Act, RSC, 1985 c T-13 (the Act)
for the infringement of the Plaintiff’s registered trade-mark NEW HOME LIVING
(Registration Number TMA693,289) arising from the Defendants’ unauthorised use
of the trade-mark NEW HOME LIVING. Pursuant to the Order of Prothonotary
Lafrenière dated August 11, 2014, the Defendants were granted a last minute
extension of time to file their responding motion record, which they did. On
October 7, 2014, counsel for the Plaintiff filed a motion for an Order pursuant
to Rule 312 of the Federal Courts Rules, SOR/98-106 granting leave to
file the August 29, 2014 affidavit of Richard MacQuarrie and to consider it as
rebuttal submissions. No responding material was submitted by the Defendants.
Having reviewed the submissions, the motion is granted. It is worth noting that
the Defendants did not file a Statement of Defence to the amended statement of
claim. Furthermore, this Court dealt with the motion without appearance of
counsel.
II.
General Facts and Summary of the Submissions
of the Parties
[2]
The Plaintiff, Source Media Group Corp. (“Source
Media”) is the owner of the mark NEW HOME LIVING. The trade-mark has been continuously
used in Canada by the Plaintiff since January 2006 and is a registered
trade-mark since August 2, 2007. It has also been promoted on the Plaintiff’s
website “newhomelivingonline.com” since early 2008. The domain name was
registered on July 18, 2007. The Plaintiff became aware of the Defendants’ use
of the online publication “newhomelivingbc.com” and its printed publication “New
Home Living” in 2012.
[3]
The Defendant, Black Press Group (“BPG”), is a
large publishing company that uses “New Home Living BC”. The Defendant, BPG and
its publisher Lisa Farquharson, started utilizing NEW HOME LIVING, in a printed
publication and an online publication in August 2011, after the Plaintiff’s
adoption and registration of the mark NEW HOME LIVING and the Plaintiff’s use
of the domain name on the website “newhomelivingonline.com”. The Defendants
also created Twitter and Facebook accounts referring to “New Home Living BC”.
[4]
The Plaintiff has never authorised the
Defendants to utilize its registered trade-mark nor any confusingly similar
marks. The Plaintiff is of the opinion that the phrase “New Home Living BC” and
the Defendants’ website are confusing with Source Media’s trade-mark NEW HOME LIVING.
For instance, the Plaintiff was contacted by media marketing representatives in
British Columbia inquiring whether the publication of New Home Living had
expanded into the Vancouver area.
[5]
The Plaintiff’s wares and services are related
to a magazine in the English language used mainly in association with new
residential home purchasing and real estate, along with decorating, styles,
improvement, maintenance, investment, construction, landscaping and gardening and
for services such as advertising and publishing. It is focused in Alberta, more specifically in Calgary, and is looking into expanding into British Columbia.
[6]
The Defendants’ magazine is printed largely in
Chinese and presents itself as being a monthly lifestyle and real estate
magazine, dealing also with fashion, luxury and restaurants. It is being
distributed in the Metro Vancouver area while its website has a broader reach.
It targets new and established immigrants from China. Although the language
used by the Defendants in its publications is Chinese, the Defendants also use
the exact reproduction of the Plaintiff’s registered mark NEW HOME LIVING in
English in a predominant way.
[7]
The Defendants are alleged to have directed
public attention to the Defendants’ Black Press Group’s publications, wares, services
and business in such a way as to cause or likely to cause confusion in Canada
between the Defendants’ wares, services and business and those of the
Plaintiff, contrary to section 7(b) of the Trade-marks Act. The
Defendants are also alleged to have used a trade-mark that is confusing with
the Plaintiff’s trade-mark. The Defendants are alleged to have infringed the
Plaintiff’s right to the exclusive use of its registered trade-mark contrary to
section 20 of the Trade-marks Act. Further, the Defendants are also
alleged to have passed off their wares and services as those of the Plaintiff,
and have misappropriated the goodwill of the Plaintiff’s registered trade-mark
contrary to the provisions of section 22 of the Act.
[8]
As a result of these activities, the Plaintiff
submits that it has suffered injury and damage, including unfair competition,
loss of business and reputation, the loss of distinctiveness and goodwill of
the trade-mark. It is also submitted that the Defendants’ behaviour shows a
deliberate, knowledgeable, wilful intent to misuse the trade-mark or
alternatively disregard of the Plaintiff’s right. Finally, the Plaintiff
submits that the Defendants disregarded the demand letters and these proceedings;
but also improperly disclosed privileged settlement discussions. Therefore, the
Plaintiff is claiming total damages in the $15,000.00 to $25,000.00 range plus
costs on a full indemnity basis.
III.
Issues
[9]
The issues being raised in the present
proceedings are as follows:
1. Whether the Defendants:
a) Infringed the Plaintiff’s registered trade-mark NEW HOME LIVING
contrary to ss. 19 and 20 of the Act;
b) Directed public attention to its wares, services or business in such
a way as to cause or be likely to cause confusion in Canada, at the time it
commenced so to direct public attention to them, between its wares, services or
business and the wares, services or business of the Plaintiff contrary to
section 7(b) of the Act;
c) Used the Plaintiff’s registered trade-mark NEW HOME LIVING in a
manner that is likely to have the effect of depreciating the value of the
goodwill attaching thereto, contrary to s. 22(1) of the Act; and
d) Are liable to the Plaintiff for damages and costs, and if so, in
what amount?
IV.
Analysis
[10]
The affidavit of the Defendant Lisa Farquharson,
the Account Manager (“the Manager”) for the other Defendant
BPG is telling. The Manager, on behalf of BPG, having personal knowledge of the
facts and matters in this procedure, makes the following admissions and
comments:
1. BPG launched the publication of New Home Living in print form and
online via the website: www.newhomelivingbc.com;
2. The New Home Living publications dealt with Real Estate and new life
style in the Chinese language for new, established immigrants in Vancouver and
lower mainland of British Columbia;
3. The Plaintiff’s New Home Living magazine is in the English language
and deals with Real Estate (see Exhibit A of the Affidavit) located in the Calgary area;
4.
BPG was not aware of the Plaintiff’s
registered trade-mark of “NEW HOME LIVING” until it
received a letter from the Plaintiff’s counsel dated November 15, 2012;
5. Following receipt of this letter, BPG continued to publish in
Chinese under a different name (Enjoy living – Vancouver style) but continued
to use the website reference: www.newhomelivingbc.com in its publication. It
stopped using the website reference in January 2014;
6. BPG instructed counsel on November 14, 2014 to settle the
proceedings and made three offers of settlement without success.
[11]
The Plaintiff has a valid trade-mark
registration, of “NEW HOME LIVING”, since August
2007 for its wares and services related to a magazine dealing with real estate
which has been promoted online on “newhomelingonline.com”.
[12]
For the purposes of infringement and
passing off, the test to be applied is if “a casual
consumer somewhat in a hurry” seeing the
Defendants’ trade-name would likely consider, having a general imperfect memory
of the Plaintiff’s registered trade-mark, that the Defendants’ wares or
services are of the same class (see Masterpiece Inc. v Alavida Lifestyles
Inc., 2011 SCC 27, at paras 39-45). In analysing this, a Court must
consider the relevant circumstances pursuant to section 6(5) of the Act:
1.
The inherent
distinctiveness of the trade-marks and the extent of their existence;
2.
The length of time
the trade-mark was used;
3.
The nature of the
wares, services or business;
4.
The nature of the
trade;
5. The degree of resemblance between the trade-marks
or trade-names in appearance or sound or in the ideas suggested by them.
[13]
As seen above, the Defendants admit that the
exact registered trade-mark of the Plaintiff was used beginning in August 2011 when BPG launched the publication New Home Living in
print form and online via the website “www.newhomelivingbc.com.” The Manager also admits that BPG’s New Home Living was
launched as a new lifestyle and real estate magazine. The Defendants admit using
the same registered trade-mark of the Plaintiff, NEW HOME LIVING, up until December
2012, in association with some of the same wares and services: home and real
estate magazine.
[14]
The Manager also admits that on or about
December 2012, it stopped using “New Home Living” on its publication (for the
name: Enjoy living – Vancouver style), but continued to use a reference to the
web site www.newhomelivingbc.com. It only stopped using the reference in
January 2014. The Plaintiff has presented evidence that shows that the Defendants
continued to use the reference which redirects to another website which is
directed to some of the same class of wares and services as the Plaintiff’s registered
trade-mark (see affidavit of Richard MacQuarrie, August 29, 2014). It goes
without saying that the addition of BC to the domain name does not make it
distinct from the registered trade-mark and it can only add to the confusion
that it creates between the registered trade-mark of the Plaintiff and the
domain name being used. Furthermore, the Plaintiff’s registered trade-mark extends
to use across Canada (since August 2007 and has been using it actively since
early 2006) as stated by section 19 of the Trade-marks Act and as specified
by the Supreme Court of Canada in Masterpiece Inc., supra, regardless of
the location of the use of the trade-mark in Canada.
[15]
It is important to note that the Defendants still continued
to use a confusingly similar domain name to that of the Plaintiff, “newhomelivingbc.com”,
which redirects to another of the Defendants’ publication, Vancouver Boulevard,
in relation to the same wares and services of the Plaintiff’s registered
trade-mark. In fact, the Defendants did not cease to use the domain name “newhomelivingbc.com”
in 2012 after receiving the Plaintiff’s demand letters, but renewed the domain
name on June 1, 2013. The Defendants therefore continued to perpetuate
confusion with the Plaintiff’s trade-mark up until at least January 2014.
Therefore, the Defendants have infringed, as admitted, the Plaintiff’s
trade-mark for some of the same wares and services until December 2012 for the
publication and continued to use the domain name as a reference until at least
January 2014. Furthermore, the Defendants have passed off their publication,
both in print and online form, as being associated or connected to the
Plaintiff’s trade-mark.
[16]
As a last comment on these issues, the fact that
the Defendants’ publication and online website was in the Chinese language does
not diminish the predominance the Defendants gave in English to the registered
trade-mark.
[17]
The Plaintiff also submits that the Defendants
should not have included settlement discussions in their submissions, as these
were subject to a settlement privilege. Specifically, the affidavit of Richard
MacQuarrie submitted by the Plaintiff states that the parties had engaged in
settlement discussions, but, without revealing the content of those discussions,
he mentioned that the parties could not reach an acceptable resolution
(affidavit of Richard MacQuarrie, page 5 at para 34). The affidavit of the
Manager states that BPG instructed their legal counsel to initiate settlement
discussions, which they did. The Defendants also provided a letter (via email)
from the Plaintiff’s counsel which discusses an offer made by the Defendants. The
Manager’s affidavit also refers to three (3) offers made (affidavit of Lisa
Farquharson page 2 at paras 11 to 13).
[18]
It is a well known principle that information
relating to settlement discussions are protected by a settlement privilege.
Settlement discussions are important to the judicial process and must be
protected unless an overriding public interest can be identified. The
jurisprudence has described the settlement privilege in the following way:
“Settlement privilege exists to support the
public interest in encouraging parties to resolve disputes without recourse to
litigation. It protects information, particularly admissions, shared between
parties in the course of negotiations. There are limited exceptions to settlement
privilege, including where disclosure is necessary to serve another, overriding
public interest” (Mohawks of the Bay of Quinte v. Canada (Minister of Indian Affairs and Northern Development), 2013 FC 669, [2013] 4
C.N.L.R. 196)
[19]
In the present proceedings, there is no
overriding public interest that would justify disclosure and, furthermore, the
privilege was not waived by the Plaintiff. The Defendants, in order to show
that they had participated in the proceedings disclosed information pertaining
to the settlement discussions. It did not have to disclose some of the content
of the settlement discussions in order to show participation. They could have
limited their comments to the fact that they participated in settlement
discussions. Such disclosure, as made by the Defendants, breaches the settlement
privilege and should not be encouraged.
[20]
As for the depreciation of goodwill pursuant to
section 22 of the Act, there is insufficient evidence before me to support a
finding of depreciation of goodwill. There is no evidence of the value of sales
or market valuation that could be helpful in dealing with this issue (see Veuve
Clicquot Ponsardin v Boutiques Cliquot Ltée, 2006 SCC 23).
[21]
For all the foregoing reasons, this Court
concludes that the Defendants did infringe the Plaintiff’s trade-mark pursuant
to sections 19 and 20 of the Trade-marks Act, and has passed off its
business and wares as being in some way connected or associated with the
Plaintiff’s business and wares, contrary to section 7(b) of the Act. No finding
can be made on the depreciation of goodwill for the reasons mentioned above.
V.
Damages
[22]
The Plaintiff did not submit evidence that could
justify the granting of serious, important damages. It limited itself to a
factual demonstration of the infringement, the confusion created and the
passing-off, but did not submit evidence of loss of revenues, profits or
clients, except for communications received from a media marketing
representative and a customers’ spokesperson to say that the Plaintiff was
expanding in the Vancouver area after having seen the Defendants’ publications.
[23]
Having said that, it is now known that the Defendants,
being publishing professionals, have infringed through publication of the
Plaintiff’s trade-mark for a little more than two years and have kept on using
the trade-mark online via the website: www.newhomelivingbc.com until January
2014. By using and insisting in using the trade-mark, the Defendants
demonstrated a reproachable attitude. Such a behaviour can only add to the damages
of infringement sought. The Question is how much should be awarded when
considering the lack of evidence on this matter. As noted above, no evidence of
loss and goodwill was submitted.
[24]
The Plaintiff submits that a damage award in the
$15,000 and $25,000 range would be adequate and cites Aquasmart
Tecchnologies Inc. v Robert Klassen, 2011 FC 212, [2011] FCJ No 256 [Aquasmart]
and Trans-High Corporation v Hightimes Smokeshop and Gifts Inc., 2013 FC
1190, [2013] FCJ No 1306 [Hightimes] as supporting case law. In Aquasmart,
the Plaintiff started using its mark in 1991 and registered it in 1994. Also,
the Defendants’ business practices in that case were found to be ill will and
diminished the Plaintiff’s goodwill. Justice Shore awarded damages in the
amount of $15,597.35. In Hightimes, Justice Manson found that the
Respondent infringed the Applicant’s trade-mark contrary to sections 19 and 20
of the Trade-mark Act, while also acting contrary to section 7(b)
of the Trade-mark Act and awarded damages in the amount of $25,000. In
that case, there was an apparent wilful infringement and a failure by the
Respondent to even acknowledge the Applicant’s trade-mark. In our case, when
the Defendants were told to stop using the trade-mark on their publication,
they did. As for the website reference, the registered trade-mark was used until
January 2014. Having already noted that the Plaintiff did not present any
factual evidence to support their damages sought, I also have to consider the Defendants’
attitude of persistently using the registered trade-mark, therefore, I find
that damages in the amount of $15,000.00 are reasonable.
[25]
As seen above, the Plaintiff also submits that the
Defendants’ inclusion of documents pertaining to settlement discussions between
the parties is inappropriate and should attract cost sanctions. In Trevor
Nicholas Construction Co. v Canada (Minister of Public Work), 2005 FC 1201,
cited by the Plaintiff, the Order of Justice Von Finckenstein stated “The Plaintiff is prohibited from raising the terms of the
settlement in Court […] and in any future proceedings without prior leave of
this Court.” No cost sanctions were awarded. While I agree with the
Plaintiff that the Defendants’ actions were inappropriate, I do not find that
the Defendants’ conduct rises to a level where cost sanctions are necessary. It
may be that the Defendants disclosed more of the settlement discussions in
order to show that they meaningfully participated in the proceedings. More is
said on this in the following paragraph.
VI.
Costs
[26]
As for costs, the Plaintiff seeks legal costs on
a full indemnity basis. Pursuant to Rules 400, 400(4) of the Federal Courts
Rules, in addition to my earlier findings made against the Defendants, I
consider that the Defendants have not meaningfully participated in the
proceedings. They limited themselves to having settlement discussions. They did
not file a Statement of Defence to the Amended Statement of Claim and at the
last moment obtained, on an exceptional basis, leave to file a motion record.
These proceedings should not have gone that far. As seen above, upon receipt of
the demand letter, the Defendants, in December 2012, ceased using the
registered trade-mark on the publication, but kept on using the registered
trade-mark reference at least until January 2014. Therefore, exercising my
discretion, I grant costs to a lump sum amount of $13,000.00 in favour of the
Plaintiff.
[27]
As for pre and post judgment interests, no
specific submissions were made. I will therefore grant only post judgment
interest at 5%, not compounded as established by section 4 of the Interest
Act, RCS, 1985 c I 15 (the “Interest Act”).
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