Date:
20131126
Docket: T-1004-13
Citation: 2013 FC 1190
Ottawa, Ontario,
November 26, 2013
PRESENT: The
Honourable Mr. Justice Manson
BETWEEN:
|
|
TRANS-HIGH CORPORATION
|
|
|
|
Applicant
|
|
and
|
|
|
HIGHTIMES SMOKESHOP AND GIFTS
INC
|
|
|
|
Respondent
|
|
|
|
|
REASONS FOR JUDGMENT
AND JUDGMENT
[1] This is an application
relating to alleged contraventions of section 7(b), 19, 20 and 22(1) of the Trade-marks
Act, C 1985, c T-13 [the Act], by the Respondent.
I. Issues
[1]
The
issues raised in the present application are as follows:
A. Whether
the Respondent:
i) Infringed
the Applicant’s registered trade-mark HIGH TIMES, and trade-mark registration
TMA 243,868, contrary to ss. 19 and 20 of the Act;
ii) 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 Applicant, contrary to s. 7(b) of the
Act;
iii) Used the
Applicant’s registered trade-mark HIGH TIMES 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
iv) Is liable to the
Applicant for damages and costs and if so, in what amount?
II. Background
[2]
The
Applicant, Trans-High Corporation, is the owner of the HIGH TIMES trade-mark
for use in association with magazines, and trade-mark registration TMA 243,868
in respect thereof. Use of the HIGH TIMES trade-mark commenced in Canada as early as 1982, and has continued until today. The High Times Magazine [the
Publication], is a monthly periodical which focuses, according to the affidavit
of Trans-High Corporation president Mary McEvoy, on the “interests of
counterculture, including, but not limited to, the medical and recreational
uses of marijuana.” A review of the Applicant’s application record shows that
the use of marijuana is indeed a strong focus of the Publication, which began
selling in 1974 in the United States, and in Canada from 1982. The Publication
has been featured or referenced in news articles appearing in Canadian
publications since as early as 1993.
[3]
According
to Ms. McEvoy’s affidavit, the Applicant also sells various goods bearing the
HIGH TIMES trade-mark in Canadian retail stores, via mail-order, at festivals,
and through the internet. These goods include ashtrays, lighters, DVDs,
tee-shirts and caps. The Applicant has signed a number of agreements for
distribution of the Publication and the various goods bearing the HIGH TIMES
trade-mark, as shown in various exhibits to the affidavit of Ms. McEvoy. The Publication
has not only been sold in retail outlets in Canada, but also by way of
subscriptions since 1986.
[4]
The
Applicant has also has operated the website “www.hightimes.com” since 1996 and
Canadians have had access to the website and goods for purchase on the website
since that time.
[5]
Finally,
the Applicant’s HIGH TIMES trade-mark has also been used in relation to books,
festivals, event sponsorships and video/film production, although there is
little evidence of those activities taking place in Canada.
[6]
According
to evidence obtained through a private investigation conducted on behalf of the
Applicant, the Respondent Hightimes Smokeshop and Gifts Inc. [Hightimes
Smokeshop] sells an extensive array of smoking and marijuana-related
accessories in a retail space of approximately 1,500 square feet [the Shop].
The private investigator characterizes the Shop as “…an unimpressive, lower-end
retail operation. It did not give off a professional or mid to high-end retail
atmosphere.” Upon purchasing some items from the store, the staff member was
unable to provide the private investigator with a receipt.
[7]
Hightimes
Smokeshop has been incorporated since March 29, 2006. The Respondent operates a
retail shop named “High Times Smoke Shop & Gifts” in Niagara Falls, Ontario. The words “High Times” are present in large signage on the store front,
accompanied by smaller font for the “Smoke Shop & Gifts” component of the name.
The font used for the words HIGH TIMES is very similar to the font used by the
Applicant for HIGH TIMES in its magazines and on wares sold by the Applicant.
[8]
In
addition, according to a business card obtained at the Shop, the Respondent
also operates a website at the address “www.hightimesniagarafalls.com.” This
website appears to be inactive.
[9]
Hightimes
Smokeshop was sent a demand letter dated April 22, 2013, with an offer of
settlement. This letter included reference to prior failed attempts at contact
regarding the alleged trade-mark infringement, passing off and depreciation of
the Applicant’s goodwill in the registered trade-mark HIGH TIMES.
[10]
The
Respondent did not file any submissions in this proceeding or appear at the
hearing, notwithstanding being properly served in June, 2013.
III. Analysis
[11]
In
BBM Canada v Research in Motion Limited, 2011 FCA 151, it was held that
trade-mark owners may bring an infringement action, passing off action or
depreciation of goodwill action, by way of a summary application to the Federal
Court, based on affidavit evidence, in the right circumstances.
[12]
At
the outset of this hearing, I raised the issue with the Applicant’s counsel
that by deciding to proceed by way of application, the Applicant chose to
forego any opportunity for discovery, to compel further and better information
concerning depreciation of goodwill of the Applicant’s HIGH TIMES trade-mark by
reason of the Respondent’s activities, as well as to elicit facts relating to
damages caused by these activities.
[13]
Nevertheless,
having considered the Applicant’s evidence, consisting of the affidavits of Ms.
McEvoy and Les Vass, I find the following.
(i) & (ii) Trade-mark and
Infringement and Passing Off
[14]
The
test to determine if the Respondent’s name HIGH TIMES is confusing with the
Applicant’s registered mark HIGH TIMES is to consider whether, as a matter of
first impression, “a casual consumer somewhat in a hurry” who sees the
Respondent’s trade name or trade-mark, and has no more than imperfect
recollection of the Applicant’s trade name or trade-mark, would be likely to
think that the Respondent’s wares or services would be from the same source as
the Applicant, regardless of whether the parties’ wares or services are of the
same general class (Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC
27, at paras 39-45).
[15]
In
analysing trade-mark confusion, the Court must have regard to all relevant
surrounding circumstances, as set out in s. 6(5) of the Act:
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 or 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.
[16]
The
length of time in use and extent to which the parties’ trade-marks have become
known both weigh in favour of the Applicant. The Applicant’s mark HIGH TIMES
has been registered and in use for decades. It is well-known in Canada to relevant consumers in the counterculture community, both as a magazine and as a
source of related wares and services including smoking accessories. The
Respondent’s Shop has only been confirmed to have operated for a relatively
short time, and there is no evidence as to the extent to which it has become
known.
[17]
There
is also clear overlap between the Applicant’s magazine business and related wares
sold through its magazines, retail outlets, and on the website, and the wares
sold in the Respondent’s Shop. The customers and communities targeted by both
parties are the same or very similar. Both parties also sell their wares
through traditional retail channels.
[18]
The
Applicant’s HIGH TIMES trade-mark is the same as the Respondent’s use of HIGH TIMES,
as the prominent and only distinctive portion of HIGH TIMES Smokeshops and
Gifts Inc.
[19]
I
find that there is sufficient evidence to show that there is a likelihood of
confusion between the Applicant’s use of its trade-mark HIGH TIMES for its
magazines and related wares sold through its magazines and website “www.hightimes.com,”
and the Respondent’s prominent use of HIGH TIMES on its storefront and the use
of the cannabis motif and sale of counterculture wares in its store is very
similar to or the same as the Applicant’s motif and wares sold in Canada.
[20]
As
well, there is a sufficient reputation in Canada established by the Applicant’s
evidence and a likelihood of deception, causing damage to the Applicant’s
reputation and business, by the unauthorized use of HIGH TIMES by the
Respondent on its storefront and within its store.
[21]
As
such, the Respondent has infringed the Applicant’s HIGH TIMES trade-mark,
contrary to sections 19 and 20 of the Act, and has passed off its business and
wares as being somehow associated or connected with the Applicant’s business
and wares, or that its use has been approved by the Respondent, contrary to
section 7(b) of the Act.
(iii) Depreciation of
Goodwill – Section 22
[22]
The
Supreme Court of Canada considered section 22 of the Act and held that goodwill
attaching to a trade-mark may be depreciated by a non-confusing use, where the
fame and goodwill of the trade-mark transcends the wares or services with which
the mark is usually associated or used. The Court will look at the degree of
recognition of the mark within the relevant universe of consumers and ask the
question “Is depreciation likely to occur?” (Veuve Clicquot Ponsardin v
Boutiques Cliquot Ltée, 2006 SCC 23).
[23]
In
this case, there is insufficient evidence before me to make a finding of
depreciation of goodwill under section 22 – the evidence of volume of sales and
depth of market penetration of magazines and related wares sold by the
Applicant in Canada is limited, as is the extent of advertising and publicity
accorded to the Applicant’s HIGH TIMES trade-mark. Further, there is little evidence
of the degree of inherent or acquired distinctiveness, and the products are
certainly confined to a specialized channel of trade.
(iv) Damages and Costs
[24]
The
Applicant claims $200,000 in respect of damages, including the license fee it
would have charged the Respondent or any other licensee to operate a 1,500
square foot counterculture retail store under the HIGH TIMES brand in a major
tourist centre such as Niagara Falls, Ontario.
[25]
Firstly,
there is no evidence to support this quantum of possible license fees and
damages, other than a bald assertion by the Applicant’s affiant. While I
appreciate it is difficult to quantify damages when a Respondent refuses to
participate in a proceeding and there is no evidence of sales, profits, or
valuations, the amount of damages requested is purely speculative and no
voluntary licenses to other parties have ever been granted by the Applicant.
[26]
However,
given the evidence of Ms. McEvoy, the apparent wilful infringement by the
Respondent and the failure of the Respondent to even acknowledge the
Applicant’s trade-mark rights, or to negotiate any form of settlement, as well
as failure to participate in the Court’s process, I find that damages in the
amount of $25,000 is reasonable in the circumstances.
[27]
I
also accept the Applicant’s submissions with respect to costs being fixed in
the sum of $30,000.
JUDGMENT
THIS
COURT’S JUDGMENT is that:
1.
The
Respondent has:
a. Infringed
and is deemed to have infringed the Applicant’s HIGH TIMES trade-mark (Reg. No.
TMA243,868), contrary to section 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 Applicant, contrary to section 7(b) of
the Act.
2.
The
Respondent and its parent, affiliate, subsidiary and all other related companies
and businesses and all of their respective and collective officers, directors,
employees, agents, successors and assigns, as well as all others over whom any
of the foregoing exercise authority, are hereby permanently enjoined from:
a. Selling,
distributing or advertising wares or services in association with the Applicant’s
registered HIGH TIMES trade-mark or with any other trade-mark or trade-name
that is likely to be confusing with the Applicant’s HIGH TIMES trade-mark,
including any mark or name that is or that includes the element “HIGH TIMES”;
b. Directing
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, service or business of the Applicant contrary to s. 7(b) of the Act,
by adopting, using or promoting “HIGH TIMES” or “HIGHTIMES” as or as part of
any trade-mark, trade name, trading style, meta-tag (or other internet search
engine optimization tool or device), corporate name, business name, domain name
(including any active or merely re-directing domain name); and
3.
The
Respondent shall deliver-up or destroy under oath any wares, packages, labels and
advertising materials in its possession, power or control, as well as any dies
used in connection therewith, that bear the Applicant’s HIGH TIMES trade-mark
or any other trade-mark or trade name confusingly similar thereto or that are
or would be contrary to this Judgment, in accordance with s. 53.2 of the Act;
4.
The
Respondent shall transfer to the Applicant or their counsel within thirty (30)
days of the date of this Order, ownership and all rights of access,
administration and control for and over the domain name “www.hightimesniagarafalls.com,” together with
any other domain name registered to the Respondent, containing “HIGH TIMES”,
“HIGHTIMES” or any confusingly similar trade-mark and shall otherwise take any
and all further steps necessary to complete such transfer in a timely manner
thereafter, including directing the applicable Registrar(s) to transfer
ownership and all rights of access, administration and control for and over all
such domain names to the Applicant;
5.
The
Applicant is awarded damages in the sum of $25,000 for the Respondent’s
trade-mark infringement and passing-off, plus applicable H.S.T., along with
pre-judgment and post-judgment interest in accordance with the Federal
Courts Act;
6.
The
Applicant is awarded its costs of the Application, which costs are fixed in the
lump sum of $30,000 and are payable forthwith by the Respondent.
"Michael D.
Manson"
Email this Content