Docket: A-128-16
Citation:
2017 FCA 215
|
CORAM:
|
DE MONTIGNY J.A.
GLEASON J.A.
WOODS J.A.
|
|
BETWEEN:
|
|
GROUP III INTERNATIONAL LTD., HOLIDAY GROUP INC.
and WENGER
S.A.
|
|
Appellants
|
|
and
|
|
TRAVELWAY GROUP
INTERNATIONAL LTD.
|
|
Respondent
|
REASONS
FOR JUDGMENT
WOODS J.A.
[1]
The parties in this appeal all have an association
with luggage and bags sold in Canada to which are affixed trademarks featuring
a cross reminiscent of the Swiss flag. The appellants sought to enforce their
trademarks by applying to the Federal Court for a declaration of infringement
and other relief under the Trade-marks Act, R.S.C. 1985, c. T-13 (the
Act). The application before Justice St-Louis was not successful, largely on
the basis that the appellants were not able to establish a likelihood of
confusion with the respondent’s marks (2016 FC 347). The appellants have
appealed this judgment (the Decision) to this Court.
A.
Background facts
(1)
The appellants and the Wenger marks
[2]
There are three appellants, Wenger S.A., Group
III International Ltd., and Holiday Group Inc.
[3]
Wenger S.A. is a Swiss company that has been
associated with the famous Swiss army knife for over 100 years. At least since
the 1970s, Wenger has used “a logo comprised of a cross
in a rounded quadrilateral and surrounded by an inlaid border. … The [logo] is
typically presented featuring a white or metallic cross and border, set against
a black or red background” (Decision, para. 7).
[4]
In Canada, Wenger has registered three
trademarks (the Wenger marks) that incorporate this logo for use in association
with luggage and bags. The trademarks are depicted below.
In these reasons, the mark on the left will
be referred to as the “Wenger cross mark”.
[5]
Group III International Ltd. is the master
global licensee of the Wenger marks in relation to luggage and bags.
[6]
Holiday Group Inc. was established in 1952, is
based in Montreal, and is Canada’s largest supplier of luggage and soft bags.
It has an exclusive arrangement with Group III International Ltd. to distribute
Group III’s luggage and bags in Canada which bear the Wenger marks. The wares
are typically manufactured in Asia.
[7]
The appellants began using the Wenger marks in
association with luggage and bags sold throughout Canada in 2003, the wares often
being advertised under the SWISSGEAR brand. The marks were registered between
2007 and 2012.
(2)
The respondent and the Travelway marks
[8]
The respondent, Travelway Group International
Inc., is a Canadian corporation established in the late 1970s with a head
office in the Province of Quebec. It is best known in Canada as a distributor
of luggage and travel related products. As with the appellants’ luggage, the
respondent’s is also manufactured in Asia.
[9]
In 2008, the respondent entered into an
arrangement with an unrelated Swiss company to use its branding “Swiss Travel
Products.” The Swiss company owns a design mark registered in Canada that
incorporates this brand. However, the respondent uses only the words and not
the registered design.
[10]
Also around 2008, the respondent developed and
applied for registration of two trademarks for use in connection with luggage
and related products (the “Travelway marks”). They are reproduced below.
In these reasons, these marks will be
referred to as the “Travelway cross mark” and the “Travelway triangle mark.”
[11]
The respondent received registration of these
marks in 2009 and commenced use on luggage in the same year.
[12]
In addition to using marks with a cross similar
to the Swiss flag with an “S” in the middle, the respondent further emphasized
the “Swiss-ness” of the wares by using its “Swiss Travel Products” branding.
In addition, for a period of time the respondent also made some specific claims
of connections with the wares to Switzerland which were false.
[13]
By 2012, the Travelway triangle mark was being displayed
with several modifications. Each modification, as listed below, increased the
resemblance with the Wenger cross mark.
•
The cross shape was narrower and longer.
•
The shape of the triangle background was less
pronounced.
•
The background was displayed in either red or black.
The tone of red was similar to that frequently used in the Wenger cross mark.
•
The border of the triangle was modified to be
less prominent, to have a uniform thickness, and to be metallic.
•
The “S” was sometimes etched in metal in a
manner that resulted in the “S” being difficult to see.
•
The “S” was omitted altogether in the luggage
zipper pulls.
The last two modifications, only applied to
the Travelway triangle mark, are referred to in these reasons as the
“Disappearing S” and the “Missing S”.
[14]
More recently, the respondent’s luggage was
further modified to incorporate lining that is branded in a manner similar to
linings used by the appellants.
(3)
Examples of luggage
[15]
Appendix A provides coloured photographs of the
respondent’s Disappearing S and the Wenger cross mark as displayed on luggage.
B.
The Federal Court decision
[16]
The appellants commenced an application in the
Federal Court pursuant to Rule 300 of the Federal Courts Rules. Several types
of relief were sought, including an injunction and damages for trademark
infringement and passing off.
[17]
The central issue in the application was whether
the respondent’s marks are confusing with the appellants’ marks. The Federal
Court concluded that “from the perspective of the
average consumer somewhat in a hurry, the Travelway marks as used on its
luggage and bags are not likely to confuse the consumer and to lead him to
conclude that those luggage and bags are manufactured or sold by the same
entity as the Wenger luggage and bags” (Decision, para. 126).
[18]
This conclusion applied to all the respondent’s
marks. This included not only the Travelway marks, as registered, but also the
versions known as the Missing S and Disappearing S which the Federal Court
considered as separate, unregistered marks.
[19]
As for the Travelway marks, as registered, the
Federal Court concluded that the lack of resemblance between these marks and
the Wenger marks was a sufficient factor in itself to conclude that there was
no likelihood of confusion. According to the Court, this was dispositive of the
issue and it was not necessary to consider other factors.
[20]
As for the marks that the Federal Court
considered unregistered, the Missing S and the Disappearing S, the Federal
Court concluded that there was a greater resemblance between these and the
Wenger marks. The Federal Court then proceeded to consider other factors and
concluded that there was also no likelihood of confusion with the unregistered
marks.
[21]
Although the Federal Court considered other
issues, which are mentioned below, the finding on confusion was central to the
decision and would have resulted in the application being dismissed in its
entirety.
C.
Issues, standard of review, and relief sought
[22]
The issues raised in this appeal are:
1.
Did the Federal Court err in concluding that there
was no likelihood of confusion?
2.
Did the Federal Court err in concluding that there
was no passing off?
3.
If the Federal Court did err, what is the
appropriate relief?
[23]
The standard of review in this appeal is the Housen
standard of appellate review. Questions of law are to be determined on a
standard of correctness; questions of fact, and mixed fact and law, are to be assessed
on a standard of palpable and overriding error: Masterpiece Inc. v. Alavida
Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387, at para. 102; Housen
v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. “Palpable”
means an error that is obvious and “overriding”
means an error that affects the outcome of the case.
[24]
It is useful to set out the relief sought by the
appellants. In their memorandum, the appellants seek to have the Decision set
aside and request:
•
a declaration that the respondent has infringed
the Wenger marks;
•
a permanent injunction restraining the
respondent from infringing the Wenger marks, and in particular from using the
Travelway marks, including the Missing S and the Disappearing S, in association
with any wares in the registrations of the Wenger marks;
•
an order striking the registrations of the
Travelway marks from the Register;
•
an order requiring the respondent to destroy or
to deliver up to the appellants all wares, packages, labels, and advertising
materials marked with the Travelway marks, including the Missing S and the
Disappearing S, in its possession, power, or control;
•
an order for the payment of damages or, as the
appellants may elect, an accounting and disgorgement of the respondent’s
profits, and an order directing a reference to determine the quantum of damages
and/or profits; and
•
costs of the application and the appeal.
D.
Analysis
(1)
Confusion
[25]
Whether the Travelway marks are confusing with
the Wenger marks is the central issue in this appeal. It is useful to briefly
outline the test for determining confusion.
[26]
Under subsection 6(2) of the Act, the use of one
trademark causes confusion with another if the use of both trademarks in the same
area would be likely to lead to the inference that the goods have the same
source. Subsection 6(2) provides:
|
6 (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 goods or services associated with those
trade-marks are manufactured, sold, leased, hired or performed by the same
person, whether or not the goods or services are of the same general class.
|
6 (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 produits
liés à ces marques de commerce sont fabriqués, vendus, donnés à bail ou loués,
ou que les services liés à ces marques sont loués ou exécutés, par la même
personne, que ces produits ou ces services soient ou non de la même catégorie
générale.
|
|
…
|
[…]
|
[27]
The applicable legal test is well known and is
described by the Supreme Court of Canada in Masterpiece Inc., at para.
40:
[40] At the outset of this confusion
analysis, it is useful to bear in mind the test for confusion under the Trade-marks Act. In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824, Binnie J. restated the traditional approach, at para. 20, in the
following words:
The test to be applied is a matter of
first impression in the mind of a casual consumer somewhat in a hurry who sees
the [mark], at a time when he or she has no more than an imperfect recollection
of the [prior] trade-marks, and does not pause to give the matter any detailed
consideration or scrutiny, nor to examine closely the similarities and
differences between the marks.
[28]
Subsection 6(5) of the Act provides that a court
“shall have regard to all the surrounding
circumstances”, including: (a) inherent and acquired distinctiveness of
the marks, (b) length of time in use, (c) nature of the goods, (d) nature of
the trade, and (e) degree of resemblance.
[29]
The confusion analysis is to be done on a
mark-to-mark basis (Masterpiece Inc., paras. 42-48).
[30]
The appellants submit that the Federal Court made
significant errors in its confusion analysis. I first consider whether the
Federal Court erred in concluding that the Travelway triangle mark is not
confusing with the Wenger cross mark.
(2)
Did the Federal Court err with respect to the
Travelway triangle mark?
[31]
As mentioned above, in considering whether the
Travelway triangle mark leads to confusion, the Federal Court discussed only
the resemblance factor. The appellants submit that this is a reviewable error
because a court is required by subsection 6(5) of the Act to consider all
surrounding circumstances.
[32]
The appellants also suggest that the Federal
Court made a reviewable error in treating the Disappearing S and the Missing S
as separate unregistered marks.
[33]
I agree with the appellants on both counts.
[34]
As for the Federal Court considering only the
factor of resemblance, this is contrary to the requirement in subsection 6(5)
of the Act that a court must consider all surrounding circumstances, including the
factors that are specifically listed in that provision.
[35]
It may be that the Federal Court actually had
regard to other relevant factors that were not mentioned in the Decision. It
may have concluded that the marks were so dissimilar that the lack of
resemblance trumped all other factors. If this is the case, this was a palpable
and overriding error in my view. The Travelway triangle mark and the Wenger
cross mark clearly bear a striking resemblance. Other surrounding circumstances
needed to be carefully considered and weighed in the confusion analysis.
[36]
As for the Federal Court’s finding that the
Disappearing S and the Missing S were separate unregistered marks, my reasons
for concluding that this was a reviewable error are considered in the next
section.
(a)
Are the Missing S and Disappearing S separate
trademarks?
[37]
In considering whether the Disappearing S and
the Missing S are separate trademarks, the applicable legal principle is that a
variant is part of the registered mark if it retains the dominant features of
the registered mark:
•
“The practical test to
be applied in order to resolve a case of this nature is to compare the trade
mark as it is registered with the trade mark as it is used and determine whether
the differences between these two marks are so unimportant that an unaware
purchaser would be likely to infer that both, in spite of their differences,
identify goods having the same origin” (Registrar
of Trademarks v. Compagnie Internationale pour l’Informatique CII Honeywell
Bull (1985), 4 C.P.R. (3d) 523 at 525 (F.C.A.)).
•
The variant does not depart from the mark as
registered where “the same dominant features are
maintained and the differences are so unimportant as not to mislead an unaware
purchaser” (Promafil Canada Ltée v. Munsingwear Inc. (1992), 44
C.P.R. (3d) 59 (F.C.A.) at 70-71).
•
“The deviations from the
registered design must not change the distinctiveness of the mark; it must
retain its dominant features” (Pizzaiolo
Restaurants Inc. v. Les Restaurants La Pizzaiolle Inc., 2016 FCA 265 at
paragraph 16).
[38]
Before the Federal Court, all parties took the
position that the Missing S and Disappearing S were not separate trademarks but
merely variations of the Travelway marks that are registered. Despite this, the
Federal Court treated the marks as separate unregistered marks.
[39]
It is not clear how the Federal Court reached
this conclusion as it did not explicitly identify this as an issue or provide
any analysis. In light of this, the Court does not have access to the
underlying reasons of the Federal Court and cannot give this conclusion any
deference: Crudo Creative Inc. v. Marin, 90 O.R. (3d) 213 (Div. Ct.).
[40]
In my view, there is no reason to depart from
the agreed position of the parties at the Federal Court that the Missing S and
Disappearing S are merely variants of the Travelway triangle mark as it is
registered. As discussed above, the respondent has made a series of changes to
the Travelway triangle mark, some more subtle than others, and all of which
more closely resemble the Wenger cross mark. However, none of the changes
either separately or together take away the dominant features of the Travelway
triangle mark which are a cross on a background with a contrasting border.
[41]
It is worth mentioning in particular the “S” in
the centre of the Travelway triangle mark as it is registered. This feature is
omitted in the Missing S and is significantly downplayed in the Disappearing S.
In my view, this is not a dominant element of the mark; it merely reinforces
the idea of “Swiss-ness” that is suggested already by the resemblance to the
Swiss flag.
[42]
With respect, the Federal Court made a
reviewable error in treating the Missing S and Disappearing S as separate
trademarks. They are permissible variants of the Travelway triangle mark.
[43]
This finding is relevant to this appeal because
if the variants are likely to cause confusion with the Wenger marks, then the registered
mark will also likely cause confusion.
[44]
In light of this conclusion, it is not appropriate
to undertake a separate confusion analysis with respect to the Missing S and
Disappearing S. The analysis should take into account the Travelway triangle
mark, as registered, as well as the variants. Since the Federal Court did not
undertake this analysis, in the interests of judicial economy I will now
proceed to do so.
(b)
Weighing of surrounding circumstances
[45]
The framework for determining whether one
trademark is confusing with another is set out in section 6 of the Act. In
general, the test to determine confusion is whether the use of both marks in
the same area would be likely to lead to the inference that the relevant goods
or services are manufactured, sold, leased, hired, or performed by the same
person.
[46]
Subsection 6(5) sets out the considerations to be
taken into account in this determination. All the surrounding circumstances are
to be considered, including:
|
(a) the inherent
distinctiveness of the trade-marks or trade-names and the extent to which
they have become known;
|
a) le caractère distinctif inhérent des
marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont
devenus connus;
|
|
(b) the length of time the trade-marks or trade-names have been
in use;
|
b) la
période pendant laquelle les marques de commerce ou noms commerciaux ont été
en usage;
|
|
(c) the nature of the
goods, services or business;
|
c) le genre de produits, services ou
entreprises;
|
|
(d) the nature of the
trade; and
|
d) la nature du commerce;
|
|
(e) the degree of resemblance between the trade-marks or
trade-names in appearance or sound or in the ideas suggested by them.
|
e) le degré de ressemblance entre les
marques de commerce ou les noms commerciaux dans la présentation ou le son,
ou dans les idées qu’ils suggèrent.
|
[47]
I would comment first that there is a very
strong resemblance between the Travelway triangle mark and the Wenger cross
mark. This is starkly demonstrated by evidence consisting of physical examples
of luggage that display the Wenger cross mark in metal and the Travelway
triangle mark in metal with the Disappearing S variant. It is very difficult to
discern a difference in these marks unless one scrutinizes them very closely,
which is not the applicable test.
[48]
In my view, the Travelway triangle mark and the
Wenger cross mark are so strikingly similar that other relevant circumstances
would have to be strongly in the respondent’s favour to find no likelihood of
confusion. As discussed below, this is not the case.
•
Paragraph 6(5)(a) – Neither the Wenger cross
mark nor the Travelway triangle mark are inherently distinctive, but the Wenger
cross mark has significant acquired distinctiveness as a result of many years
of strong sales in Canada. This factor favours the appellants.
•
Paragraph 6(5)(b) – The factor of length
of time in use favours the appellants because they commenced use in 2003 and
respondent commenced use in 2009.
•
Paragraph 6(5)(c) – The nature of the
goods factor favours the appellants because the goods are essentially the same.
•
Paragraph 6(5)(d) – The nature of trade
also favours the appellants because the channels of trade are the same.
[49]
As a result, in my view all the surrounding
circumstances listed in subsection 6(5) are in favour of a finding of
confusion.
[50]
In the Federal Court’s analysis of the
Disappearing S and Missing S, in which all factors were considered, the Federal
Court determined that there was no confusion. To reach this conclusion, the
Court must have given significant weight to factors that it considered in the
respondent’s favour. Some of these are discussed below.
[51]
The Federal Court considered as one of the
surrounding circumstances that the Missing S is only displayed on small zipper
pulls. It concluded that this detail was unlikely to be noticed by the consumer
somewhat in a hurry because of its size and the fact that the respondent’s
luggage and bags always display other logos as well (Decision, para. 120).
[52]
With respect, this analysis does not apply the
correct legal principle. The Federal Court only considered the Missing S
variant as it is actually displayed. It should have considered other possible
uses of the mark, including larger sizes (Masterpiece Inc., para. 59).
[53]
As for the Federal Court’s consideration that
Travelway’s luggage and bags always display other logos, even if this is a
relevant factor, it would only assist the respondent if the other logos served
to differentiate the wares. I am not satisfied on the evidence that this was
the case. To the contrary, the other logos included the Travelway cross mark
and the “Swiss Travel Products” branding. These logos increase the confusion
rather than lessen it.
[54]
Second, the Federal Court rejected the
appellants’ submission that the Wenger cross mark had acquired distinctiveness
from being a unique identifier of luggage and bags emanating from Wenger and
continuing the tradition of the Swiss army knife. The Court comments that there
are other third parties that use a similar logo, and mentions that one of them,
Victorinox, also has a tradition linked with the Swiss army knife. In its
submissions, the respondent also mentions a similar logo used by the well-known
brand, Strellson.
[55]
It was open to the Federal Court to reduce the
weight of the acquired distinctiveness factor in light of the existence of other
trademarks resembling the Swiss flag. On the other hand, this factor does not
completely erode the acquired distinctiveness of the Wenger cross mark that it
has gained through years of strong sales. I would note in particular that the
only trademarks referred to in the evidence with features similar to the Wenger
cross mark are the Travelway and Victorinox marks. Further, there was no
evidence that Victorinox associated its mark with luggage in Canada during the
period at issue.
[56]
Accordingly, in my view the factor of acquired
distinctiveness is clearly in the appellants’ favour.
[57]
For the reasons above, I have concluded that a
palpable and overriding error was made by the Federal Court in its conclusion
that there was no likelihood of confusion between the Travelway triangle mark
and the Wenger cross mark. Primarily, the Federal Court failed to give
sufficient weight to factors in the appellants’ favour, as discussed above, and
it erred in giving significant weight to factors in the respondent’s favour.
The evidence demonstrates a strong likelihood of confusion between the
Travelway triangle mark and the Wenger cross mark.
[58]
I now turn to the confusion analysis with
respect to the Travelway cross mark.
(3)
Did the Federal Court err with respect to the
Travelway cross mark?
[59]
The Federal Court’s analysis with respect to the
Travelway cross mark was the same as for the Travelway triangle mark. On the
basis that there was a lack of resemblance, the Federal Court concluded that
there was no confusion with the Wenger marks. The Travelway cross mark is
reproduced in paragraph 10 above.
[60]
In my view, the failure of the Federal Court to
undertake a consideration of all surrounding circumstances was also a
reviewable error with respect to the Travelway cross mark. Although the
similarities between the marks are not as great as they are with the Travelway
triangle mark, the resemblance is certainly strong enough to require a weighing
of all surrounding circumstances.
[61]
With the exception of resemblance, the
consideration of the surrounding circumstances with respect to the Travelway
cross mark is virtually the same as it is for the Travelway triangle mark. For
example, Travelway commenced using the marks almost at the same time, and the
marks are displayed on the same wares. The consideration of distinctiveness is
the same, as is the nature of trade.
[62]
Resemblance is the only factor in which there is
a material difference between the Travelway marks. A number of considerations
are relevant to this analysis.
[63]
First and foremost, the ideas suggested by the
Travelway cross mark and the Wenger cross mark are the same – the idea of “Swiss-ness.”
Both marks incorporate a cross reminiscent of the Swiss flag and Travelway’s
mark emphasizes this by adding an “S.” This is a significant factor that gives
a strong resemblance in this particular case.
[64]
In addition, it is worth mentioning that the
Travelway cross mark could be varied as the Travelway triangle mark had been.
Such possible variations should not be ignored (Masterpiece Inc., para.
51-59). In particular, the “S” could be removed, and the cross could be
displayed on a background and border as long as these are not distinctive
features (Pizzaiolo Restaurants Inc., at para. 26).
[65]
In considering the entire circumstances, there
is in my view a likelihood of confusion with respect to the Travelway cross
mark as well.
[66]
I now turn to consider confusion relative to the
other two Wenger marks.
(4)
Did the Federal Court err with respect to other
Wenger marks?
[67]
The analysis above focusses on the Wenger cross mark.
As for the other two Wenger trademarks reproduced in paragraph 10 above, which comprise
the Wenger cross mark accompanying the respective lettering, “WENGER” and “SWISS
GEAR”, the confusion analysis is similar. A casual consumer somewhat in a hurry
is likely to be confused as to the source of the Travelway marks, since the
consumer is likely to believe that these marks are associated with the appellants’
branding, namely WENGER or SWISS GEAR.
(5)
Conclusion on confusion
[68]
As a result of palpable and overriding errors by
the Federal Court and in light of the findings above with respect to confusion,
I would conclude that each of the Travelway marks is confusing with each of the
Wenger marks.
(6)
Did the Federal Court err in finding no passing
off?
[69]
The appellants submit that the respondent has
passed off its own goods as the appellants’ contrary to section 7 of the Act.
The relevant provision is paragraph 7(b) which reads:
|
7 No person shall
|
7 Nul ne
peut :
|
|
…
|
[…]
|
|
(b)
direct public attention to his goods, 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 goods, services or business and
the goods, services or business of another;
|
b)
appeler l’attention du public sur ses produits, 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
produits, ses services ou son entreprise et ceux d’un autre;
|
|
…
|
[…]
|
[70]
The concept of passing off was described by the
Supreme Court of Canada in Consumers Distributing Co. v. Seiko Time Canada
Ltd., [1984] 1 S.C.R. 583, at p. 601:
… attention should
be drawn to the fact that the passing off rule is founded upon the tort of
deceit, and while the original requirement of an intent to deceive died out in
the mid-1800’s, there remains the requirement, at the very least, that
confusion in the minds of the public be a likely consequence by reason of the
sale, or proffering for sale, by the defendant of a product not that of the
plaintiff’s making, under the guise or implication that it was the plaintiff’s
product or the equivalent.
[71]
The required elements of passing off were correctly
set out in the Federal Court decision: (1) the existence of goodwill associated
with the distinctiveness of the product, (2) misrepresentation by the
respondent creating confusion, and (3) actual or potential damage to the
appellants: Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65, [2005] 3
S.C.R. 302, at paragraphs 66-68.
[72]
The Federal Court found in favour of the
respondent on all three elements and rejected the appellants’ allegation of
passing off.
[73]
The issue is whether the Federal Court made a
reviewable error in these findings. The Housen standard of review applies.
(a)
Has goodwill been established?
[74]
The goodwill element in passing off requires
that the appellants establish that there is goodwill attached to the wares by
association with the Wenger trademarks (Ciba-Geigy Canada Ltd. v. Apotex
Inc., [1992] 3 S.C.R. 120, at p. 132).
[75]
The Federal Court rejected the appellants’
submission that goodwill had been established by their high level of sales
since 2003 and by the significant royalties that had been paid by Group III and
Holiday. The Court concluded that goodwill had been diluted by Victorinox’
similar trademark, and noted that there was no evidence that the appellants’
wares were sold at a premium to other brands of luggage (Decision, paras.
129-130).
[76]
This finding is one of mixed fact and law for
which the standard of review is palpable and overriding error.
[77]
In my view, the Federal Court did make such an
error in finding an insufficient level of goodwill. The appellants’ wares are
in the niche area of luggage and bags. They have an established business with
significant sales and they actively promote their brand. It only makes sense
that there would be goodwill attached to their trademarks.
[78]
The factors that the Federal Court took into
account do not support a conclusion of no goodwill, or insufficient goodwill. The
fact that Victorinox uses a similar trademark does not mean that there is no
goodwill associated with the Wenger marks. Further, selling wares at a premium
over other brands is not a prerequisite to finding goodwill. Goodwill is commonly
associated with trademarks. It cannot be concluded that there is no goodwill
simply on the basis of a comparison between the wares of the appellants and the
wares of others.
[79]
It was a palpable and overriding error for the
Federal Court to conclude that the goodwill element has not been established.
(b)
Has misrepresentation been established?
[80]
In the context of passing off, misrepresentation
is considered as conduct that likely creates confusion in the public. As
mentioned above, the misrepresentation need not be wilful (Kirkbi AG, at
para. 68).
[81]
The Federal Court determined that this element
had not been satisfied because confusion had not been established. In light of
my conclusion that confusion is likely, it is appropriate for this Court to
consider whether misrepresentation has been established.
[82]
In my view, the evidence clearly establishes
that there has been misrepresentation. From the time that the respondent’s
wares first entered the marketplace in 2009, the Travelway marks were quite
similar to the Wenger marks. The resemblance was subsequently made stronger by
several modifications to the Travelway triangle mark. The result is that the
Travelway triangle mark and the Wenger marks are strikingly similar,
particularly when displayed as the Disappearing S variant. In addition, the
respondent associated its wares with Swiss-ness, as the appellants had done,
and some of these claims were false. The only connection between the respondent
and Switzerland revealed by the evidence is a branding arrangement with a Swiss
corporation that allows the respondent to use the words “SWISS TRAVEL
PRODUCTS.” Accordingly, the respondent not only has used very similar trademarks
but it made other claims of Swiss-ness that would have exacerbated the
confusion in the public’s mind. Misrepresentation has clearly been established.
(c)
Has damage or likelihood of damage been
established?
[83]
The Federal Court did not discuss damage, the
third element of passing off, in light of its conclusion that the first two
elements had not been established. It is therefore appropriate to do so.
[84]
The appellants and the respondent are direct
competitors in the market for luggage and bags in Canada. Their wares are very
similar and are sold largely through the same retail outlets. In these
circumstances, it only makes sense to infer a likelihood of loss of sales and
business by the respondent’s misrepresentation (Orkin Exterminating Co. Inc.
v. Pestco Co., 50 O.R. (2d) 726, 19 D.L.R. (4th) 90 (Ont. C.A.)).
[85]
In my view, the element of damage is also
established.
(d)
Conclusion on passing off
[86]
In light of these findings, I would conclude the
appellants have established passing off contrary to paragraph 7(b) of
the Act.
(7)
Relief
[87]
In light of the conclusions above, I would allow
the appeal, set aside the judgment of the Federal Court, and provide the additional
relief as discussed below.
(a)
Declaration of infringement
[88]
The appellants seek a declaration that the
respondent has infringed the Wenger marks. The applicable provision is
paragraph 20(1)(a) of the Act which reads:
|
20 (1) The right
of the owner of a registered trade-mark to its exclusive use is deemed to be
infringed by any person who is not entitled to its use under this Act and who
|
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
qui est non admise à l’employer selon la présente loi et qui :
|
|
(a)
sells, distributes or advertises any goods or services in association with a
confusing trade-mark or trade-name;
|
a) soit vend, distribue ou annonce des
produits ou services en liaison avec une marque de commerce ou un nom
commercial créant de la confusion;
|
|
…
|
[…]
|
[89]
In light of the conclusion above with respect to
confusion, I would grant the declaration requested.
(b)
Permanent injunction
[90]
The appellants also seek a permanent injunction
restraining the respondent from infringing the Wenger marks, and in particular,
from using the Travelway marks in association with any wares listed in the
Wenger marks’ registrations.
[91]
I would agree with the appellants that a
permanent injunction is appropriate to ensure that infringement will not occur
in future. The injunction should apply to the Travelway marks used in
association with any wares listed in the registrations of the Wenger marks.
(c)
Delivering up wares
[92]
The appellants seek an order requiring the
respondent “to destroy or to deliver up to the
appellants all wares, packages, labels and advertising materials marked with
the [Travelway marks] in its possession, power or control.”
[93]
I agree that this remedy is appropriate and
would grant such an order with respect to wares listed in the registrations of
the Wenger marks.
(d)
Expungement
[94]
The appellants seek an order striking the
Travelway marks from the register pursuant to subsection 57(1) of the Act. This
provision reads:
|
57 (1) The Federal Court has
exclusive original jurisdiction, on the application of the Registrar or of
any person interested, to order that any entry in the register be struck out
or amended on the ground that at the date of the application the entry as it
appears on the register does not accurately express or define the existing
rights of the person appearing to be the registered owner of the mark.
|
57 (1) La Cour fédérale a une
compétence initiale exclusive, sur demande du registraire ou de toute
personne intéressée, pour ordonner qu’une inscription dans le registre soit
biffée ou modifiée, parce que, à la date de cette demande, l’inscription
figurant au registre n’exprime ou ne définit pas exactement les droits
existants de la personne paraissant être le propriétaire inscrit de la
marque.
|
|
…
|
[…]
|
[95]
The appellants suggest that this order is
appropriate because “the trade-marks were not
distinctive when these proceedings commenced, and [the respondent] was not the
person entitled under s 16(3) to registration of the trademarks because, at the
date of filing, the marks were confusing with the [Wenger marks] as previously
used and made known in Canada.” (Appellants’ memorandum of fact and law
at para. 103.)
[96]
I would refer this issue to the Federal Court to
decide after hearing further submissions. In the context of this appeal with time
limitations, the parties’ submissions were understandably truncated on this
issue.
(e)
Damages
[97]
The appellants seek damages. I would refer the
matter of damages to the Federal Court to determine whether damages are recoverable
and, if so, the amount of damages and the appropriate procedure for determining
them.
[98]
The Federal Court may wish to consider whether a
reference is appropriate to facilitate this determination. The respondent
submitted that a reference is not appropriate as this matter was instituted as
an application rather than an action. This should not be a bar to proceeding by
way of reference, and the Federal Court should determine the procedure that is
most appropriate.
(f)
Costs
[99]
I would award costs to the appellants in this
Court and below.
“Judith M. Woods”
“I agree
Yves de Montigny J.A.”
“I agree
Mary J.L. Gleason J.A.”
APPENDIX A
WENGER CROSS MARK
(Appeal Book,
Vol. 2, p. 338)
TRAVELWAY
TRIANGLE MARK (Disappearing S)
(Appeal Book,
Vol. 2, p. 468)
Email this Content