Date: 19990507
Docket: T-1180-97
BETWEEN:
WAL-MART STORES, INC. and
WAL-MART CANADA INC.
Plaintiffs
- and -
| CRAZY LEE"S (ST. CATHERINES) LIMITED, CRAZY LEE"S (TORONTO) LIMITED, CRAZY LEE"S (WELLAND) LIMITED, CRAZY LEE"S (WESTERN) LIMITED, CRAZY LEE"S (PICKERING) LIMITED, CRAZY LEE"S (PORT COLBORNE) LIMITED, CRAZY LEE"S (RICHMOND HILL) LIMITED, CRAZY LEE"S (SIMCOE) LIMITED, CRAZY LEE"S (SOUTHERN) LIMITED, CRAZY LEE"S (ONTARIO) LIMITED, CRAZY LEE"S (OSHAWA) LIMITED, CRAZY LEE"S (OTTAWA) LIMITED, CRAZY LEE"S (PEEL) LIMITED, CRAZY LEE"S (PENNINSULA) LIMITED, CRAZY LEE"S (MISSISSAUGA) LIMITED, CRAZY LEE"S (NEWMARKET) LIMITED, CRAZY LEE"S (NIAGARA) LIMITED, CRAZY LEE"S (NORTHERN) LIMITED, CRAZY LEE"S (NORTHWOOD) LIMITED, CRAZY LEE"S (HAMILTON) LIMITED, CRAZY LEE"S (INTERNATIONAL) LIMITED, CRAZY LEE"S (KAWARTHA) LIMITED, CRAZY LEE"S (LONDON) LIMITED, CRAZY LEE"S (MIDLAND) LIMITED, CRAZY LEE"S (BARRIE) LIMITED, CRAZY LEE"S (CLEARANCE CENTRE) LIMITED, CRAZY LEE"S (EASTERN) LIMITED, ARON LEE HABERMAN (a.k.a. Lee Aron Haberman) and TITANTEX INCORPORATED |
Defendants
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is an application on behalf of the plaintiffs for a summary judgment, a declaration that the defendants have infringed the rights of the plaintiffs and finally, a permanent injunction restraining the defendants.
FACTS
[2] The plaintiffs WAL-MART Stores and WAL-MART Canada Inc. are corporations which carry on business operating as a large retail department store chain in Canada.
[3] The Crazy Lee defendants carry on business as retailers and the defendant Haberman is the sole principal director and officer of each of the corporates Crazy Lee defendants and is the president, the secretary and the treasurer of each of the Crazy Lee defendants.
[4] WAL-MART is the owner in Canada of trade-mark "WAL-MART", Registration No. TMA 502,605. WAL-MART is also the owner in Canada of trade-mark "WALMART", Registration No. TMA 430,385. WAL-MART is also the owner in Canada of trade-mark "ATHLETIC WORKS", Registration No. TMA 476,361.
[5] The date of registration for trade-mark "WAL-MART", Registration No. TMA 502,605, is October 21, 1998. The date of registration for trade-mark "WALMART", Registration No. TMA 430,385, is July 15, 1994. The registration date of trade-mark "ATHLETIC WORKS", Registration No. TMA 476, 361, is May 15, 1997.
[6] The two parties have filed affidavits and they decided not to cross-examine on those affidavits.
[7] From those affidavits, I understand that WAL-MART placed an order, in the fall of 1996, with specific terms and conditions to Titantex Inc. Titantex Inc. could not and did not fulfill its obligations under the order and as a result, WAL-MART cancelled the order.
[8] On or about March of 1997, an order was placed on behalf of the corporate Crazy Lee defendants with Titantex Inc. for these articles rejected by WAL-MART.
[9] In April 1997, Crazy Lee"s offered for sale and sold clothing having attached priced tickets that prominently displayed the trade-mark WAL-MART and the trade-mark ATHLETIC WORKS.
[10] As soon as the plaintiffs became aware that Crazy Lee"s were offering for sale and selling clothing which displayed the WAL-MART trade-marks on the price tickets, the plaintiffs" solicitors sent a written demand on April 28, 1997, to Crazy Lee"s to stop unauthorized use and advertising any product in association with the trade-marks.
[11] Under reception of this letter, Mr. Haberman, president of the defendants Crazy Lee"s, decided to fax a memo on April 29, 1997, to all Crazy Lee"s stores with a copy of the solicitor"s letter suggesting to all stores managers to post the solicitor"s letter with the memo and show them to the customers, when selling, the items with WAL-MART tags.
[12] From the evidence, I understand that Mr. Haberman, president of the defendants Crazy Lee"s informed Titantex Inc. that all WAL-MART "tickets" were removed from garments by May 12, 1997; but, on the other hand, we also have evidence from WAL-MART employees that merchandise with WAL-MART tags were sold in early June 1997.
[13] Nevertheless, sale of merchandise with WAL-MART tags on them by Crazy Lee"s in their departmental stores has been admitted and it is not an issue.
[14] Counsel for plaintiff WAL-MART suggests that the points in issue are whether there exists a genuine issue to be tried and whether the only genuine issue to be determined is that of quantum of damages.
[15] Counsel for the defendants Crazy Lee"s suggests that the test for summary judgment is not met.
[16] Counsel for the defendants Crazy Lee"s also suggests that there is no infringement and no passing off particularly because the trade-marks were not registered at the time those garments were sold in the Crazy Lee"s stores.
[17] Counsel for the defendants Crazy Lee"s also surprisingly pretends that merchandise sold by Crazy Lee"s was WAL-MART merchandise.
ANALYSIS
[18] In my opinion, it is clear that the defendant Crazy Lee"s stores have sold merchandise with tags of WAL-MART on them.
[19] The registration of the trade-marks in the present case does not matter because even after Crazy Lee"s representatives knew that they were selling merchandise with WAL-MART tags on them, they continued to do it.
[20] There is sufficient evidence to show that the rights of the plaintiffs were infringed and that confusion was created by the attitude of the defendant Crazy Lee"s stores.
[21] Answering the question whether there exists a genuine issue to be tried, the answer is no.
[22] The only question that rests with the Court is whether there are damages and what is the quantum of those damages.
[23] In my opinion, it is totally appropriate to render a summary judgment in this instance and order a reference to determine the quantum of the damages.
TEST FOR SUMMARY JUDGMENT
[24] The test for summary judgment is whether there is a genuine issue for trial which arises from the claim of defence.
[25] I consider that the defendants beared an evidentiary burden to put evidence before the Court to show the existence of issues requiring trial; it is not the case here and with the admission and a clear evidence of infringement of the rights of the plaintiffs, there is no doubt, in my mind, that the plaintiffs are entitled to summary judgment with respect to the claim.
[26] There is clear evidence that there is passing off pursuant to section 7(b) of the Act.
[27] In order to come under section 7(b), a plaintiff must meet a test in three dimensions.
[28] It has to direct public attention to the wares in such a way as to cause or be likely to cause confusion in Canada at the time commenced so to direct attention to them; the three elements must be met.
[29] I have no doubt that this test has been met in this particular case regarding clothing with price tickets displaying the trade-mark WAL-MART, where at the store entrance the defendants posted the letter and the memo to draw the customers" attention to it and the admissions by the defendants Crazy Lee"s that they have sold clothing with priced tickets with trade-mark WAL-MART thereon.
[30] It is also clear in my mind that the defendants" activities had the effect to depreciate the value of the plaintiffs" good will.
[31] Relating to the liability of the defendant Haberman, it is admitted that the defendant Haberman is the sole principal director and officer of each of the corporate Crazy Lee"s defendants.
[32] The defendant Haberman has participated directly in the facts, sending himself a memo to all stores asking them to post the letter and the memo, he was then totally aware of the situation and everything was done with his authorization.
[33] Finally, given those circumstances, it is appropriate to issue a permanent injunction.
[34] Accordingly, the motion for summary judgment is allowed.
THIS COURT:
| - DECLARES that the defendants have infringed the rights of WAL-MART Stores Inc. to the exclusive enjoyment of the WAL-MART trade-marks, contrary to section 19 of the Trade-Marks Act, R.S.C. 1985, c. T-13; |
| - DECLARES that the defendants are deemed to have infringed the rights of WAL-MART Stores, Inc. to the exclusive enjoyment of the WAL-MART trade-marks, contrary to section 20 of the Act; |
| - DECLARES that the defendants have infringed and are deemed to have infringed the rights of WAL-MART Canada Inc. as exclusive licensee in Canada of the WAL-MART and WAL-MART trade-marks; |
| - DECLARES that the defendants have depreciated the value of the goodwill of the WAL-MART trade-marks, contrary to section 22(I) of the Act; |
| - DECLARES that the defendants have passed off the infringing wares for the wares of WAL-MART Stores, Inc. and WAL-MART Canada Inc., contrary to section 7(b) of the Act; |
| - ISSUES a permanent injunction restraining each of these corporate defendants by their officers, directors, servants, employees, agents and all those over whom they exercise control or with whom they act in concert, and HABERMAN, from: |
| 1) Infringing the rights of WAL-MART Stores, Inc. to the exclusive enjoyment of the WAL-MART and WAL-MART trade-marks under section 19 of the Act; |
| 2) Infringing the rights of WAL-MART Stores, Inc. to the exclusive enjoyment of the WAL-MART and WAL-MART trade-marks under section 20 of the Act; |
| 3) Infringing the rights of WAL-MART Canada Inc. as the exclusive licensee in Canada of the WAL-MART and the WAL-MART trade-marks; |
| 4) Selling, offering for sale and advertising in Canada wares in association with the WAL-MART and WAL-MART trade-marks; |
| 5) Passing off their wares as and for the wares of the plaintiffs, and from enabling others to do so. |
| - ORDERS the defendants to deliver up to the plaintiffs, on oath, the infringing wares and all materials in the care, custody or control of the defendants, including any price tickets bearing the WAL-MART trade-mark, that offend in any way against such orders made herein; |
| - REFERS to a judge or other persons designated by the Chief Justice pursuant to Rule 153 to evaluate the damages from the defendants for trade-mark infringement and passing off, including exemplary damages; |
| - WITH COSTS to the plaintiffs on a solicitor and client basis. |
Pierre Blais
Judge
OTTAWA, ONTARIO
May 7, 1999
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