Docket: T-1919-13
Citation: 2014 FC 372
Ottawa, Ontario, April 17, 2014
PRESENT: The Honourable Madam Justice Bédard
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BETWEEN:
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TEAVANA CORPORATION
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Plaintiff
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and
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TEAYAMA INC.
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Defendant
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REASONS
FOR ORDER AND ORDER
[1]
The plaintiff, Teavana Corporation [Teavana], a
corporation having its business office in Atlanta, Georgia, United States of America, supplies loose-leaf teas and tea-related merchandise and services online
and throughout North America. In November 2013, it instituted an action under
the Trade-marks Act, RSC 1985, c T-13 [Act] for
trade-marks infringement, passing off and depreciation of goodwill against the defendant,
Teayama Inc. I am seized with an ex parte motion filed by Teavana under Rule
369 of the Federal Courts Rules, SOR/1998-106 [Rules], for a
default judgment against the defendant.
[2]
The plaintiff’s statement of claim was filed on
November 21, 2013, and it appears from the evidence on record, that is was
served upon the defendant on November 22, 2013. The defendant has failed to
file and serve a statement of defence, or any other documentation, within the
time prescribed by the Rules. Therefore, the plaintiff has satisfied the
requirement for bringing an ex parte motion for a default judgment on
the statement of claim pursuant to Rules 210 and 369 of the Rules.
[3]
Teavana is seeking the following relief by way
of its motion for default judgment:
(a) A declaration that the plaintiff is the party exclusively entitled
to use the “TEAVANA” trade-mark, or any confusingly similar variant thereof, in
Canada, on and in connection with “(1) online retail store services and mail
order services featuring teas, tea accessories, baked goods, electric and
non-electric appliances, house wares, glassware, giftware, plates, bowls,
storage containers, clothing, candles, musical recordings and books; and (2)
retail stores and mail order services featuring teas, tea accessories, baked
goods, electric and non-electric appliances, house wares, glassware, giftware,
plates, bowls, storage containers, clothing, candles, musical recordings and
books;
(b) A declaration that the defendant has directed public attention to
its business and wares, namely, loose-leaf teas and tea-related services and
merchandise, contrary to the provisions of Section 7(b) of the Act;
(c) A declaration that the defendant has passed off its business and
products as and for those of the plaintiff contrary to the provisions of
section 7(c) of the Act;
(d) A declaration that the defendant has made use, in association with
its tea-related services and merchandise, of a description that is false in a
material respect and likely to mislead the public as to the character, quality,
composition and the mode of the manufacture, production and performance of its
tea-related services and merchandise contrary to the provisions of section 7(d)
of the Act;
(e) A declaration that the defendant has acted and adopted a business
practice contrary to honest industrial or commercial usage in Canada contrary
to the provisions of section 7(e) of the Act;
(f) A declaration that the plaintiff’s trade-mark have been infringed by
the defendant contrary to the provisions of section 19 of the Act;
(g) A declaration that the plaintiff’s trade-marks are deemed to have
been infringed by the defendant contrary to the provisions of section 20 of the
Act;
(h) A declaration that the defendant has acted in a manner that is
likely to have the effect of depreciating the goodwill attaching to the
plaintiff’s trade-marks contrary to the provisions of section 22(1) of the Act;
(i) A declaration that the defendant has unlawfully interfered with the
plaintiff’s economic interests;
(j) A declaration that the defendant has been unjustly enriched and that
the plaintiff has experienced a corresponding detriment;
(k)
An injunction (interim, interlocutory and
permanent), restraining the defendant, its officers, directors, servants,
agents and all those over whom it exercises control or with whom it acts, from:
i.
using descriptions that are false or misleading
for the purpose of promoting its products or business interests;
ii.
acting in a manner which constitutes unjust
enrichment; and
iii.
unlawfully interfering with the plaintiff’s
economic interests.
(l)
An injunction (interim, interlocutory and
permanent), restraining the defendant, its officers, directors, servants,
agents and all those over whom it exercises control or with whom it acts, from
infringing the plaintiff’s trade-mark by:
i.
directing public attention to the defendant’s
tea-related services and merchandise or business in such a way as to cause or be
likely to cause confusion between its tea-related services and merchandise or
business, and the tea-related services and merchandise or business of the
plaintiff;
ii.
passing off the defendant’s business or products
as the business or products of the plaintiff;
iii.
making use, in association with its tea-related
services and merchandise, of a description that is false in any material
respect and likely to mislead the public as to the character, quality,
composition and the mode of the manufacture, production and performance of its
tea-related services and merchandise;
iv.
acting and adopting business practices contrary
to honest industrial or commercial usage in Canada;
v.
using the plaintiff’s trade-marks in association
with the defendant’s provision of tea-related services and merchandise; and
vi.
acting in a manner that is likely to have the
effect of depreciating the goodwill attaching to the plaintiff’s trade-mark.
(m) An order
requiring the defendant to deliver up forthwith or destroy under oath, at the
option of the plaintiff, all tea-related merchandise packaging and associated
displays, literature, documents, brochures, advertisements, signs, invoices or
any other matter in its possession or under its control bearing the plaintiff’s
trade-marks or any words confusingly similar thereto or otherwise contrary to
any injunction granted herein;
(n)
Damages in the amount of $25 000, comprising:
i.
damages for loss of profit or an accounting of
profits, including those damages arising from the defendant’s infringement of
the plaintiff’s trade-marks;
ii.
damages associated with the defendant’s unjust
enrichment;
iii.
damages associated with the defendant’s
interference with the plaintiff’s economic interests;
iv.
damages associated with the defendant’s
reduction of the goodwill associated with the plaintiff’s trade-mark.
(o) Pre-judgment and post-judgment interest; and
(p)
Costs of this action on a solicitor and client
basis.
Analysis
[4]
On a motion for a default judgment, all
allegations of the statement of claim are to be taken as denied and the
plaintiff bears the onus, and must lead evidence, establishing, on a balance of
probabilities, the claims set out in its statement of claim and its entitlement
to the relief that it is seeking (Ragdoll Productions (UK) Ltd v Jane Doe (TD),
[2003] 2 FC 120, 2002 FCT 918 at paragraph 24 [Radgoll]; Aquasmart
Technologies Inc v Klassen, 2011 FC 212, [2011] FCJ No 256 at paragraph 45
[Aquasmart].
[5]
In support of its motion for default judgment,
the plaintiff has filed the affidavit of Mr. John Aylward, its Vice
President-Marketing, along with the following exhibits:
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Exhibit A: A copy of the registration details of
its registered trade-mark for TEAVANA (TMA 778,428);
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Exhibit B: Excerpt from the Canadian
Intellectual Property Database in relation with the plaintiff’s trade-marks applications
for TEAVANA and TEAVANA and Design (respective application numbers 1,609,803
and 1,626,316);
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Exhibit C: A screen shot of the defendant’s
website homepage;
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Exhibit D: a screen shot of the plaintiff’s
website homepage.
[6]
It appears from the evidence that the plaintiff
operates a business that sells loose-leaf teas and tea accessories online and
throughout North America, including in Canada. Its merchandise is offered
online and at retail stores. The defendant, Teayama Inc., also carries on a
business that sells teas and tea accessories and tea-related merchandise in Canada through its website.
[7]
The plaintiff is the owner of the registered
trade-mark in Canada for TEAVANA in relation with the following services:
(1) Online retail store services and mail order
services featuring teas, tea accessories, baked goods, electric and
non-electric appliances, house wares, glassware, giftware, plates, bowls,
storage containers, clothing, candles, musical recordings and books.
(2) Retail stores and mail order services featuring
teas, tea accessories, baked goods, electric and non-electric appliances, house
wares, glassware, giftware, plates, bowls, storage containers, clothing,
candles, musical recordings and books.
[8]
The registration of the trade-mark was approved
by the Canadian Intellectual Property Office on June 28, 2006, and was
advertised in the Trade-marks Journal on August 2, 2006. The trade-mark has
been used in Canada at least since May 2002 on Services (1).
[9]
The plaintiff has two pending trade-mark registration
applications in relation with other tea related wares and services; application
number 1,609,803 for the trade-mark TEAVANA, and application number 1,626,316
for the trade-mark TEAVANA and design.
[10]
I will now examine the specific claims and
relief sought by the plaintiff.
Section 19 – Right
to exclusive use of a trade-mark
[11]
Section 19 of the Act provides for a
right to the exclusive use of a registered trade-mark:
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19. Subject to sections 21, 32 and 67, 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.
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19. Sous réserve des articles 21, 32 et
67, l’enregistrement d’une marque de commerce à l’égard de marchandises ou
services, sauf si son invalidité est démontrée, donne au propriétaire le
droit exclusif à l’emploi de celle-ci, dans tout le Canada, en ce qui
concerne ces marchandises ou services.
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[12]
Of the three trade-marks referenced in this
proceeding, only one is a registered trade-mark. Given that the plaintiff’s
trade-mark TEAVANA is validly registered in respect of tea-related wares and
services, the plaintiff has, in accordance with section 19 of the Act,
the exclusive right to the use throughout Canada of the trade-mark TEAVANA in
relation with the following services:
(1) Online retail store services and mail order services
featuring teas, tea accessories, baked goods, electric and non-electric
appliances, house wares, glassware, giftware, plates, bowls, storage
containers, clothing, candles, musical recordings and books.
(2) Retail stores and mail order services featuring
teas, tea accessories, baked goods, electric and non-electric appliances, house
wares, glassware, giftware, plates, bowls, storage containers, clothing,
candles, musical recordings and books.
[13]
The evidence supports the plaintiff’s claim for
a declaration of its right to exclusively use its trade-mark.
Section 20
infringement
[14]
According to section 20 of the Act, the
right of the owner of a registered trade-mark to its exclusive use is deemed
infringed if a person not entitled to use the trade-mark, sells, distributes or
advertises wares or services in association with a confusing trade-mark or
trade-name.
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20. (1) 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 its use under this Act who sells, distributes or
advertises wares or services in association with a confusing trade-mark or
trade-name, but no registration of a trade-mark prevents a person from
making.
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20. (1) Le droit du
propriétaire d’une marque de commerce déposée à l’emploi exclusif de cette
dernière est réputé être violé par une personne non admise à l’employer selon
la présente loi et qui vend, distribue ou annonce des marchandises ou
services en liaison avec une marque de commerce ou un nom commercial créant
de la confusion. Toutefois, aucun enregistrement d’une marque de commerce ne
peut empêcher une personne :
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(a) any bona fide use of
his personal name as a trade-name, or
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a) d’utiliser de bonne foi son nom personnel
comme nom commercial;
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(b) any bona fide use,
other than as a trade-mark,
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b) d’employer de bonne foi, autrement qu’à
titre de marque de commerce :
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(i) of the geographical name of his place
of business, or
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(i) soit le nom
géographique de son siège d’affaires,
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(ii) of any accurate description of the
character or quality of his wares or services,
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(ii) soit toute
description exacte du genre ou de la qualité de ses marchandises ou services,
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in such a manner as is not likely to have
the effect of depreciating the value of the goodwill attaching to the
trade-mark.
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d’une manière non
susceptible d’entraîner la diminution de la valeur de l’achalandage attaché à
la marque de commerce.
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(2) No registration of a trade-mark
prevents a person from making any use of any of the indications mentioned in
subsection 11.18(3) in association with a wine or any of the indications
mentioned in subsection 11.18(4) in association with a spirit.
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(2)
L’enregistrement d’une marque de commerce n’a pas pour effet d’empêcher une
personne d’utiliser les indications mentionnées au paragraphe 11.18(3) en
liaison avec un vin ou les indications mentionnées au paragraphe 11.18(4) en
liaison avec un spiritueux.
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[15]
The plaintiff is the registered owner of the
TEAVANA trade-mark. As such, the sale, distribution, or advertising of wares
and services associated with a confusing trade-mark or trade-name will be
deemed to be an infringement of the plaintiff’s right in its trade-mark.
[16]
Therefore, in this case, I must determine if the
evidence establishes that the defendant’s use of the trade-mark/trade-name
TEAYAMA is confusing with the plaintiff’s trade-mark TEAVANA.
[17]
As indicated by the Supreme Court of Canada in Veuve
Clicquot Ponsardin v Boutique Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824
at paragraph 20 [Veuve Clicquot], the test for confusion “is a matter of
first impression in the mind of a casual consumer somewhat in a hurry who sees
the [trade-mark] …, at a time when he or she has no more than an imperfect
recollection of the [other trade-mark], and does not pause to give the matter
any detailed consideration or scrutiny, nor examine closely the similarities
and differences between the marks”.
[18]
This test for confusion is set out in section 6
of the Act. According to subsections 6(1) to 6(4) of the Act, a
trade-mark or a trade-name is confusing with another trade-mark or trade-name
in the following circumstances:
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6. (1) For the purposes
of this Act, a trade-mark or trade-name is confusing 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 in the
manner and circumstances described in this section.
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6. (1) Pour
l’application de la présente loi, une marque de commerce ou un nom commercial
crée de la confusion avec une autre marque de commerce ou un autre nom
commercial si l’emploi de la marque de commerce ou du nom commercial en
premier lieu mentionnés cause de la confusion avec la marque de commerce ou
le nom commercial en dernier lieu mentionnés, de la manière et dans les
circonstances décrites au présent article.
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(2) 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 person, whether or not the wares or services are of the
same general class.
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(2) L’emploi d’une
marque de commerce crée de la confusion avec une autre marque de commerce
lorsque l’emploi des deux marques de commerce dans la même région serait
susceptible de faire conclure que les marchandises liées à ces marques de
commerce sont fabriquées, vendues, données à bail ou louées, ou que les
services liés à ces marques sont loués ou exécutés, par la même personne, que
ces marchandises ou ces services soient ou non de la même catégorie générale.
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(3) The use of a trade-mark causes
confusion with a trade-name if the use of both the trade-mark and trade-name
in the same area would be likely to lead to the inference that the wares or
services associated with the trade-mark and those associated with the
business carried on under the trade-name are manufactured, sold, leased,
hired or performed by the same person, whether or not the wares or services
are of the same general class.
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(3) L’emploi d’une
marque de commerce crée de la confusion avec un nom commercial, lorsque
l’emploi des deux dans la même région serait susceptible de faire conclure
que les marchandises liées à cette marque et les marchandises liées à
l’entreprise poursuivie sous ce nom sont fabriquées, vendues, données à bail
ou louées, ou que les services liés à cette marque et les services liés à
l’entreprise poursuivie sous ce nom sont loués ou exécutés, par la même
personne, que ces marchandises ou services soient ou non de la même catégorie
générale
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(4) The use of a trade-name causes
confusion with a trade-mark if the use of both the trade-name and trade-mark
in the same area would be likely to lead to the inference that the wares or
services associated with the business carried on under the trade-name and
those associated with the trade-mark are manufactured, sold, leased, hired or
performed by the same person, whether or not the wares or services are of the
same general class.
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(4) L’emploi d’un nom commercial crée de
la confusion avec une marque de commerce, lorsque l’emploi des deux dans la
même région serait susceptible de faire conclure que les marchandises liées à
l’entreprise poursuivie sous ce nom et les marchandises liées à cette marque
sont fabriquées, vendues, données à bail ou louées, ou que les services liés
à l’entreprise poursuivie sous ce nom et les services liés à cette marque
sont loués ou exécutés, par la même personne, que ces marchandises ou
services soient ou non de la même catégorie générale.
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[19]
Furthermore, in order to determine if the
defendant’s trade-name/trade-mark TEAYAMA is confusing with the plaintiff’s
trade-mark TEAVANA, the Court must have regard to all relevant surrounding
circumstances, as set out in subsection 6(5) of the Act, including:
(a)
the inherent distinctiveness of the marks or
names and the extent to which they have become known;
(b)
the length of time the marks 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.
[20]
The surrounding circumstances listed in
subsection 6(5) of the Act are not exhaustive. The circumstances need
not be given equal weight but rather, different circumstances will be given
different weight depending on the context of the case (Mattel Inc v 3894207
Canada Inc, 2006 SCC 22 at paragraphs 51 and 54).
[21]
Furthermore, it is not necessary for the
plaintiff to prove that the defendant had the intention to infringe. The
defendant’s intention has no relevance to the question of infringement (Kun
Shoulder Rest Inc v Joseph Kun Violin and Bow Maker Inc, (1997) 76 CPR (3d)
488 (FCTD)).
[22]
The evidence filed by the plaintiff does not
allow the Court to adequately assess every element set out in subsection 6(5)
of the Act.
Paragraph 6(5)(a):
inherent distinctiveness of the trade-mark or the extent to which it has become
known
[23]
In its written submissions, the plaintiff
advocates as follows in favour of the inherent distinctiveness of its
trade-mark:
By virtue on the Plaintiff’s extensive use, advertising
and promotion of its products under the TEAVANA brand, Teavana’s trade-mark has
become well-known and associated with the high quality tea-related service and
merchandise offered by the Plaintiff. The Plaintiff has used the TEAVANA
trade-mark in Canada since at least as early as May 2002. The Plaintiff has an
online presence in Canada and operates over 60 prominent retail outlets
throughout Canada.
By contrast, the Defendants have only used the
TEAYAMA mark within the past 3 years online through its website. The mark is
not inherently distinctive from the Plaintiff’s trade-mark. To the Plaintiff’s
knowledge, the Defendant’s mark has not become well-known or acquired any
secondary meaning.
[24]
Several of these assertions are either not
supported by any evidence or supported by insufficient evidence. There is
evidence of use of the plaintiff’s trade-mark since at least 2002. There is
also sufficient evidence that establishes that the plaintiff sells its
merchandise online through its website www.teavana.com. However, beside bald
assertions in Mr. Aylward’s affidavit, there is no convincing evidence that
TEAVANA trade-mark has become well known and that it is associated with the
high-quality tea-related service offered by the plaintiff. Further, there is no
evidence to support the allegation that the plaintiff operates over 60 retail
outlets in Canada. In addition, there is no evidence to support the assertion
that the defendant has only used its mark TEAYAMA for 3 years, and that it has
not become well-known and has not acquired any secondary meaning.
[25]
Therefore, I find that there is insufficient
evidence to conclude that this factor favours the plaintiff.
Paragraph 6(5)(b):
Length of time the trade-mark/trade-name has been in use
[26]
The comments above similarly apply to this
factor. The evidence establishes that the plaintiff has been using its trade-mark
since 2002 on Services “(1): Online retail store services and mail order
services featuring teas, tea accessories, baked goods, electric and
non-electric appliances, house wares, glassware, giftware, plates, bowls,
storage containers, clothing, candles, musical recordings and books”. There is
no evidence as to when the defendant started using the mark TEAYAMA. The
allegation that the defendant was incorporated in August 2011 and that its
website domain through which it conducts its activities was also registered in
August 2011 is not supported by any evidence. This factor is therefore
inconclusive.
Paragraph
6(5)(c): Nature of the wares, services or business
Paragraph 6(5)(d): Nature of the
trade
[27]
I agree with the plaintiff that the wares and
services advertised and offered by the defendant under the TEAYAMA
trade-mark/trade-name are very similar and are of the same nature (teas and tea
accessories) to those offered by the plaintiff under the trade-mark TEAVANA,
and that both parties use the same channels of distribution, namely online
services. Therefore, this factor clearly favours the plaintiff.
Paragraph 6(5)(e): Degree of resemblance between the trade-mark/trade-name
in appearance or sound or ideas suggested
[28]
In a recent decision of the Supreme Court of
Canada, Masterpiece Inc v Alavida Life-Styles Inc, 2011 SCC 27, Justice
Rothstein stipulated the following at paragraph 49:
In applying the s. 6(5) factors to the question
of confusion, the trial judge conducted his analysis in the order of the
criteria set forth in s. 6(5), concluding with a consideration of the
resemblance between the marks. While it is no error of law to do so, the degree
of resemblance, although the last factor listed in s. 6(5), is the statutory
factor that is often likely to have the greatest effect on the confusion
analysis (K. Gill and R. S. Jolliffe, Fox on Canadian Law of Trade-marks
and Unfair Competition (4th ed. (loose-leaf)), at p. 8-54; R. T. Hughes and
T. P. Ashton, Hughes on Trade Marks (2nd ed. (loose-leaf)), at s.74, p.
939). As Professor Vaver points out, if the marks or names do not resemble
one another, it is unlikely that even a strong finding on the remaining factors
would lead to a likelihood of confusion. The other factors become significant
only once the marks are found to be identical or very similar (Vaver, at p.
532). As a result, it has been suggested that a consideration of resemblance is
where most confusion analyses should start (Vaver, at p. 532). [my emphasis]
[29]
Hence, the degree of resemblance was found by
the Supreme Court of Canada to have “the greatest effect on the confusion
analysis”. I agree with the plaintiff that the defendant’s trade-mark, TEAYAMA
is very similar to its trade-mark TEAVANA, in appearance and sound. Considering
the nature of the services associated with both trade-marks, they are also very
similar in the ideas that they suggest. They both connote that the parties are
operating a tea-related business. Therefore, this factor favours the plaintiff.
Other surrounding circumstances
[30]
The plaintiff alleges that because of its
notoriety in Canada as a premier tea provider of services and merchandises, it
is unlikely that the defendant was unaware of its use of a confusing
trade-mark. With respect, this allegation is only supported by a bald assertion
in Mr. Aylward’s affidavit which I find clearly insufficient to support the
plaintiff’s allegation.
[31]
In summary and despite the deficient evidence
provided by the plaintiff, I find that there is still sufficient evidence,
namely concerning the nature of the services provided by both parties, the
nature of their trades and the similarity between both trade-marks, to conclude
that there is a likelihood of confusion between the plaintiff’s use of its
trade-mark TEAVANA in relation with its activities of online retail store
services featuring teas and tea accessories and the online services offered by
the defendant. As such, I conclude that the defendant has infringed the
plaintiff’s TEAVANA trade-mark, contrary to section 20 of the Act. More
specifically, the defendant has infringed the plaintiff’s exclusive right to
use its TEAVANA trade-mark in relation to online retail services featuring teas
and tea-related accessories.
Statutory passing
off – Subsections 7(b) and 7(c) of the Act
[32] Subsections
7(b) and 7(c) of the Act read as follows:
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7. No person
shall
[…]
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7. Nul ne peut:
[…]
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(b) direct public attention to his
wares, services or business in such a way as to cause or be likely to cause
confusion in Canada, at the time he commenced so to direct attention to them,
between his wares, services or business and the wares, services or business
of another;
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b) appeler
l’attention du public sur ses marchandises, ses services ou son entreprise de
manière à causer ou à vraisemblablement causer de la confusion au Canada,
lorsqu’il a commencé à y appeler ainsi l’attention, entre ses marchandises,
ses services ou son entreprise et ceux d’un autre;
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(c) pass off other wares or
services as and for those ordered or requested
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c) faire
passer d’autres marchandises ou services pour ceux qui sont commandés ou
demandés;
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[32]
For the same reasons set out in relation to the
section 20 violation, I am of the view that there is sufficient evidence to
conclude that the respondent has directed public attention to its wares and
services in such a way to cause or likely to cause confusion in Canada with the
tea-related online services offered by the plaintiff in relation with its trade-mark
TEAVANA. Therefore, the defendant has violated subsection 7(b) of the Act.
[33]
However, I am not ready to conclude, based on
the evidence on record, that the defendant has passed off its online retail
services of teas and teas-related accessories as being somehow associated or
connected with the plaintiff’s business in relation to the use of its
trade-mark TEAVANA.
[34]
In addition, I find that there is insufficient
evidence of use of the plaintiff’s trade-marks that are pending registration.
Mr. Aylward’s affidavit is silent as to the use of these marks and the
application record is insufficient to establish use of the trade-marks as the
trade-mark has not yet been registered (Aquasmart at paragraph 47):
A copy of the record of the registration of a
trade-mark purporting to be certified to be true by the Registrar is evidence
of the facts set out therein and that the person named therein as owner is the
registered owner of the trade-mark for the purposes and within the territorial
area therein defined (Section 54(3), Trade-marks Act).
[35]
The plaintiff has not made any submissions in
regard to its claims under subsections 7(d) and 7(e) of the Act.
I note in any event, that there is no evidence to support a conclusion in
relation to subsection 7(d) of the Act and that subsection 7(e)
of the Act has been held constitutionally invalid (MacDonald v Vapor
Canada Ltd, [1977] 2 S.C.R. 134; see also Kirkbi AG v Ritvik Holdings
Inc, [2005] SCJ No 66 at paragraph 34).
Depreciation of
goodwill – Section 22
[36]
I find that there is insufficient evidence
before me to make a finding of depreciation of goodwill under section 22 of the
Act and in accordance with the threshold set out by the Supreme Court of
Canada in Veuve Clicquot. The evidence does not support a finding that
the plaintiff’s trade-mark has acquired goodwill and that the defendant’s use
of the trade-mark/trade-name TEAYANA has depreciated the plaintiff’s goodwill.
Damages and costs
[37]
The plaintiff claims $25 000 in respect of
damages. Section 53.2 of the Act provides that a successful plaintiff
may seek damages or an accounting of profits as one of the available remedies:
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53.2 Where a court
is satisfied, on application of any interested person, that any act has been
done contrary to this Act, the court may make any order that it considers
appropriate in the circumstances, including an order providing for relief by
way of injunction and the recovery of damages or profits and for the
destruction, exportation or other disposition of any offending wares,
packages, labels and advertising material and of any dies used in connection
therewith.
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53.2 Lorsqu’il est
convaincu, sur demande de toute personne intéressée, qu’un acte a été
accompli contrairement à la présente loi, le tribunal peut rendre les
ordonnances qu’il juge indiquées, notamment pour réparation par voie
d’injonction ou par recouvrement de dommages-intérêts ou de profits, pour
l’imposition de dommages punitifs, ou encore pour la disposition par
destruction, exportation ou autrement des marchandises, colis, étiquettes et matériel
publicitaire contrevenant à la présente loi et de toutes matrices employées à
leur égard.
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[38]
In Ragdoll, at paragraph 40, the Court
noted the following in relation to the proper basis for the assessment of
damages in the case of infringement or passing off:
Given that infringement of trade-marks has been
proved, how are damages to be determined? This is how the question was
addressed in Aluminum Co of Canada Ltd et al v Tisco Home Building Products
(Ontario) Ltd et al (1977), 33 CPR (2d) 145 (FCTD) where the following
appears, at pages 163-164:
I believe that the proper basis of
assessment is set out in Fox's Canadian Law of Trade Marks and Unfair
Competition, at pp. [page140] 648-9, where he states:
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.
[39]
When infringement and passing-off are claimed,
the case law has established that damages are presumed upon proof of passing-off
(Oakley, Inc v Jane Doe, [2000] FCJ No 1388 at paragraph 7 [Oakley]).
Having said that, the Court did note in Oakley as well at paragraph 8,
that “Even in a case of infringement without an allegation of passing off, the
Court may award damages for loss of goodwill without proof of actual damage”.
[40]
In the circumstances of default judgment, as in
the present case, where proof of damages is lacking, the Court specified the
following in Oakley at paragraph 10:
All this to say that the owners of intellectual
properties have a right to damages arising from the infringement of each mark
or work, which can be assessed without proof of actual damage or damage to
goodwill. Setting aside the amount of the award for a moment, it does not seem
unfair or unreasonable to approach the question of damages, in the case of
judgments in default, from the perspective of a global assessment for which, by
convention, a fixed amount is awarded.
[41]
The Court notes that, in the present case, there
is no proof of damages and that there is no evidence with respect to the
plaintiff’s sales and profits. However, the Court also recognizes that the
defendant has not participated in the present proceeding and that it leaves the
plaintiff in a position where it cannot adequately assess the extent of its
damages. The assessment of the true damages encountered by the plaintiff will
therefore remain speculative. Furthermore, there is no evidence of loss of
goodwill. Having said that, the Court clearly noted in Oakley that
damages can nonetheless be awarded. Considering that there was no evidence of
damages or loss of goodwill, and as noted in Oakley the Court can simply
fix an amount for compensatory damages as reflecting the infringement of the
plaintiff’s legal rights without any need for proof of the actual quantum of
damages. I find that, in the present case, it is reasonable to award an amount
for damages equivalent to $10 000.
[42]
The plaintiff also seeks costs on a solicitor-client
basis but the plaintiff has not provided any evidence to convince me that such
an award should be made in this case.
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