Date: 20110222
Docket: T-1630-10
Citation: 2011
FC 212
Vancouver, British
Columbia,
February 22, 2011
PRESENT: The Honourable Mr. Justice Shore
BETWEEN:
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AQUASMART TECHNOLOGIES INC.
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Plaintiff
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and
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ROBERT KLASSEN
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Defendant
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REASONS FOR ORDER AND ORDER
I. Introduction
[1]
This
is an action claiming relief under the Trade-marks Act for the
infringement of the Plaintiff’s registered
trade-mark AQUASMART & Design arising from the Defendant’s unauthorized
use of the trade-mark/trade-name AQUASMART.
[2]
The
Plaintiff is the owner of the registered trade-mark AQUASMART & Design for
use in association various water-related products, including water
purifiers. The Plaintiff uses its trade-mark in association with products
distributed throughout Canada by telephone and
Internet mail-order, as well as through a cross-country network of retailers.
The Plaintiff has used its trade-mark for nearly 26 years (since at least as
early as August 1, 1991). The Plaintiff has acquired a valuable reputation and
goodwill in its trade-mark due to its long time and extensive usage and
advertising.
[3]
The
Defendant carries on business selling water purification systems in Ontario by way of in-home
sales presentations. Without the Plaintiff’s authorization, the Defendant
adopted and used in association with his business and water-purification
systems sold by it the trade-mark/trade-name AQUASMART, which is confusing with
the Plaintiff’s trade-mark. The Defendant claims to have changed his
trade-name, but it is still necessary to address in this action the Defendant’s
past unauthorized uses of the confusing trade-mark/trade-name and the
Defendant’s potential future use of the confusing trade-mark/trade-name.
[4]
The
Defendant has used a trade-mark/trade-name that is confusing with the
Plaintiff’s trade-mark, and the Defendant is thus deemed to have infringed the
Plaintiff’s right to the exclusive use of its registered trade-mark
contrary to Section 20 of the Trade-marks Act, R.S.C. 1985, c. T-13. On this
motion, the Plaintiff does not seek relief in respect of the allegations in the
Statement of Claim that pertain to sections 7(b), 7(c) and 19 of the Trade-marks
Act.
[5]
The
Court agrees and on the basis of the evidence is in accord with the position of
the Plaintiff which it accepts. This is an appropriate case for default
judgment. After being served personally with the Statement of Claim, the
Defendant had failed to file a Statement of Defence in the time allowed
for doing so. The Plaintiff has very ably through its counsel, Mr. Jeffrey W.
Robinson, led evidence that enables the Court to find, on a balance of
probabilities, that there is liability, and that establishes the Plaintiff‘s
entitlement to the relief claimed. Due to the Defendant’s failure to
participate in these proceedings, the Plaintiff has been unable to adequately
develop a factual basis for entitlement to a particular amount of damages. The
Plaintiff has thus proposed that the Court order lump-sum damages in accordance
with the scale customarily applied by the Federal Court in analogous cases.
II. Background
A. The Plaintiff’s business and reputation in the AQUASMART trade-mark
[6]
The
Plaintiff is the owner of the trade-mark AQUASMART & Design (the Registered
Mark) registered under number TMA437,536 on December 30, 1994 for various
water-related products, including water purifiers (the Plaintiff’s Wares). The
Registered Mark is depicted below.
(Reidel
Affidavit, Exhibit “A”; Testa Affidavit, para. 4, Exhibit “A”)
[7]
Since about 1991, the
Plaintiff or its predecessor Emily Testa Marketing Ltd. has carried on a
business in Canada selling the Plaintiff’s
Wares. Since at least as early as 1991, the Registered Mark has been marked on
the Plaintiff’s Wares, and/or on the packages in which those wares are
distributed, at the time possession of those wares is transferred, in the
normal course of trade. Since August 1997, the Plaintiff has carried on this
business in association with the trade-name Aquasmart Technologies Inc. (the
Plaintiff’s Trade-name) (Testa Affidavit, paras. 4, 6-7, Exhibits “B”, “C”).
[8]
The
Plaintiff markets its water-related products to household consumers. Since at
least as early as 1991, the Plaintiff has sold its products directly to
household consumers by telephone order. The Plaintiff also sells its
water-related products through its own retail showroom in Burnaby, B.C. and
through retailers in each of Canada’s provinces (Testa Affidavit, paras. 8-10, Exhibit “D”).
[9]
Since
at least as early as September 1997, the Plaintiff has promoted and sold its
products to the public on a Web site at www.aquasmart.com. At all times
since September 1997, the Web site at www.aquasmart.com has displayed the
Registered Mark and the Aquasmart Trade-name, and provided information about
the Plaintiff’s water-related products. Since June 2009 the Plaintiff’s Web
site has had the capability for customers to purchase the products on-line (Testa
Affidavit, para. 11, Exhibit “E”).
[10]
The
Plaintiff has not sold its products using in-home sales presentations. The
Plaintiff has not conducted water tests of prospective customers’ water as
part of a sales presentation or otherwise (Testa Affidavit, para. 12).
[11]
Since
1985, the Plaintiff has promoted and sold its products through tradeshows which
target the health and wellness market. In 2010, the Plaintiff maintained a
booth for the sale and promotion of its products at nine tradeshows in British Columbia, Manitoba and Ontario. This is typical of the
Plaintiff’s tradeshow activity over the years (Testa Affidavit, para. 13, Exhibit
“F”).
[12]
Since
1990, the Plaintiff has run an advertisement in every monthly issue of the
Canadian edition of Alive magazine, Canada’s leading national magazine in the field
of health and wellness. In 2010, the Plaintiff spent more than $18,000 on
advertising in Alive magazine. The current readership of Alive
magazine is in excess of 500,000 individuals monthly (Testa Affidavit, paras.
14-15, Exhibits “G”, “H”, “I”).
[13]
Over
the years, the Plaintiff has had substantial sales in Canada of its water-related
products bearing the Registered Mark. In each of the past five years, the
Plaintiff has sold its products directly to more than 10,000 unique customers.
The Plaintiff has also had substantial sales in the geographic vicinity of St. Catharines, Ontario. In 2010 alone, the
Plaintiff sold its products directly to more than 60 customers who provided
contact phone numbers having a 905 area code, which area code includes St. Catharines, Ontario (Testa
Affidavit, paras. 16-17).
[14]
The
Plaintiff has been recognized for the quality of its products and business and
regularly receives testimonials from its customers (Testa Affidavit, para. 19, Exhibits
“E”, “J”).
[15]
The
Plaintiff has not provided licence or consent to the Defendant to use or trade
under the Registered Trade-mark, the Plaintiff’s Trade-name or any trade-mark
or trade-name that includes the word “Aquasmart” (Testa Affidavit, para. 43).
B. The Defendant’s business and use of
the AQUASMART name
[16]
The
Defendant is an individual who registered the business name AQUASMART for a
sole proprietorship carrying out the activity of “WATER TREATMENT SALES AND
SERVICE” in Ontario (Reidel Affidavit,
Exhibit “B”).
[17]
The
Defendant has carried on a business in St. Catharines, Ontario, that offers to
sell, sells and installs water-purification systems (Brenchley Affidavit,
paras. 2-6;
McKeown Affidavit, paras. 7-8, 10-14, Exhibits “C”-“E”; Elizabeth Jansen Affidavit,
paras. 7, 10-11, Exhibits “C”, “E”).
[18]
The
Defendant, through his employees, has offered to sell and sold
water-purification systems in Canada in association with the trade-mark/trade-name AQUASMART. In
particular, the Defendant, through his employees, has presented members of
the public with business cards, product literature and sales invoices that all
bear the trade-mark/trade-name AQUASMART. The Defendant has also used the
trade-mark AQUASMART by including it in the body of the Defendant’s sales
invoices in association with the products being sold thereby (Brenchley
Affidavit, para. 2-4, Exhibits “A”, “B”, “C”; McKeown Affidavit, para. 11).
[19]
The
Defendant, through his employees, has verbally used the trade-mark/trade-name
AQUASMART to refer to both the Defendant’s business and water-purification systems
that it offers for sale (Brenchley Affidavit, para. 3; McKeown Affidavit, para.
11).
[20]
The
Defendant, through his employees, has installed water-purification systems in Canada in association with the
trade-mark AQUASMART. In particular, the Defendant, through his employees, has
presented purchasers of the Defendant’s water-purification systems with
warranty certificates, bulletins and letters from the Defendant that all bear
the trade-mark AQUASMART, at the time of installation of those systems (Brenchley
Affidavit, para. 6, Exhibits “D”, “E”, “F”).
[21]
Vehicles
used by employees of the Defendant who install the Defendant’s
water-purification systems have been outfitted with signs bearing the
trade-name AQUASMART (McKeown Affidavit, para. 17).
[22]
The
Defendant has used the trade-name AQUASMART to identify his business in online
job-postings (Testa Affidavit, Exhibits “O”, “Q”, “R”, “W”; McKeown Affidavit,
Exhibit “A”; Elizabeth Jansen Affidavit, Exhibit “A”).
[23]
Signs
bearing the trade-name AQUASMART have been displayed to the public at the
Defendant’s place of business (Rene Jansen Affidavit, paras. 6, 8; Elizabeth
Jansen Affidavit, para. 14).
[24]
The
Defendant’s business has been listed under the trade-name AQUASMART in the canada411.ca
online telephone directory. Telephone calls to phone numbers linked to the
Defendant’s business have been answered by recorded messages that identify the
receiving party with the name AQUASMART (Testa Affidavit, paras. 34-35, 40).
[25]
Advertisements
promoting the Defendant’s business posted on YouTube feature the
trade-name/trade-mark “Aquasmart” audibly and/or visually. In these videos, the
Defendant appears personally, and refers to water treated with his business’s
water-purification systems as “Aquasmart water”. In one of the videos, the
Defendant is identified as “Robert Klassen President/CEO Aquasmart”. The
YouTube caption to this video reads, in part, “Aquasmart Water Purification
Systems are the only way to combat all the different bacteria and chemicals we
find today in our municipal drinking water.” (Testa Affidavit, paras. 37-38,
Exhibits “T”, “U”, “V”.)
C. Actual confusion
arising from the Defendant’s activities
[26]
The
Defendant’s use of the AQUASMART name has caused members of the public to
falsely conclude that the Defendant and his business are associated with the
Plaintiff. The Plaintiff has been contacted by disappointed purchasers of the
Defendant’s water-purification systems, by the Defendant’s former employees who
believe the Defendant has treated them unfairly, and by the father of a
prospective employee of the Defendant who was suspicious of the Defendant’s
business, all of whom were under the impression that the Defendant and his
business were associated with the Plaintiff (Testa Affidavit, paras. 20-22, 24-26,
37, 40-42, Exhibits “K”, “L”, “N”, “X”; Brenchley Affidavit, paras. 10-13; Rene
Jansen Affidavit, paras. 3-5)
D. The Defendant’s
persistent violations of the Plaintiff’s trade-mark rights
[27]
After
the Defendant reacted aggressively to an initial complaint from the Plaintiff’s
president about the Defendant’s violation of the Plaintiff’s trade-mark rights,
counsel for the Plaintiff contacted the Defendant on July 7, 2010. The
Defendant then acknowledged to Plaintiff’s counsel that he would need to obtain
legal advice and make some changes to the name of his business. On July 29,
2010, Plaintiff’s counsel again contacted the Defendant, who told Plaintiff’s
counsel that he would be a seeing a lawyer and had reserved a new name for his
company. Thereafter, the Defendant failed to answer or return telephone calls
from Plaintiff’s counsel until served with the Statement of Claim in this
action (Testa Affidavit, para. 27).
[28]
The
Defendant was personally served with the Plaintiff’s Statement of Claim in this
action on October 8, 2010. On November 18, 2010, the Defendant informed
Plaintiff’s counsel that in regard to the Defendant’s use of the AQUASMART
trade-mark/trade-name, except for a voicemail message on the Defendant’s
personal cell phone, “everything else” had been changed (Kuiper Affidavit,
paras. 1-2; Testa Affidavit, para. 36).
[29]
The
Defendant’s use of the AQUASMART trade-mark/trade-name continued after he was
made aware of the Plaintiff’s trade-mark rights, after he told Plaintiff’s
counsel that he had reserved a new name for his company, after the Statement of
Claim in this action was served on him, and after he told Plaintiff’s counsel
that he had changed the name of his business (Testa Affidavit, paras. 28, 32-35,
37-40, Exhibits “O”, “Q”, “R”, “T”, “U”, “V”, “W”; McKeown Affidavit, paras. 2-4, 8-9, 11-12, 17,
Exhibits “A”-“F”, “H”; Elizabeth Jansen Affidavit, paras. 2-4, 7-11, 14).
E. Damage suffered by
the Plaintiff
[30]
The
Plaintiff learned of the Defendant’s violations of the Plaintiff’s trade-mark
rights through a complaint about the Defendant made by a customer of the
Defendant. It is apparent that the Defendant’s businesses practices have
engendered considerable ill will towards the Defendant (Testa Affidavit, paras.
20-26,
32, 40-42, Exhibits “K”, “M”, “L”, “P”, “X”).
[31]
The
Defendant has, apparently, been deceitful in his dealings with customers and
employees. In particular, the Defendant has encouraged his employees to promise
certain “bonus” products valued at more than $5,000 in order to persuade
customers to purchase water-purification systems, personally affirmed these
promises to customers who have purchased water-purification systems, and then
failed to deliver the promised products (McKeown Affidavit, para. 8, Exhbit
“C”; Elizabeth Jansen Affidavit, para. 7, Exhibit “C”; Brenchley Affidavit,
paras. 3, 7-9, 14; Testa Affidavit, Exhibit “X”).
[32]
The
Defendant, or someone in his office, has apparently falsely copied a signature
onto a sales contract (McKeown Affidavit, paras. 12-14, Exhibit “G” and “H”).
[33]
The
Defendant has also offered an illusory “wage guarantee” to his employees (McKeown
Affidavit, paras. 10, 18, Exhibits “A”, “D”).
[34]
The
Defendant has also encouraged his employees to make suspect product and health
claims and use high-pressure sales tactics when offering to sell water
purification systems in association with the AQUASMART trade-mark (McKeown
Affidavit, para. 8, Exhibit “C”; Elizabeth Jansen Affidavit, para. 7, Exhibit
“C”).
[35]
Members
of the public have falsely concluded that the Defendant is associated with the Plaintiff
by virtue of the Defendant’s use of the AQUASMART trade-mark/trade-name. The Defendant’s
activities have led at least one of the Defendant’s customers to warn friends
and family members against dealing with a business named “Aquasmart” (Brenchley
Affidavit, para. 13; Testa Affidavit, paras. 20-26, 40-42, Exhibits “K”, “M”,
“L”, “X”).
[36]
The
Defendant’s activities have prompted a public sharing of their negative
opinions of the Defendant via messages posted on the Internet. In these
messages, the AQUASMART trade-mark/trade-name is identified with the Defendant
(Testa Affidavit, paras. 23, 25, Exhibits “M”, “N”).
[37]
The
Defendant has carried out these activities in a geographic area in which the
Plaintiff currently has customers (Testa Affidavit, para. 17).
F. Facts in support
of an order for default judgment
[38]
On
October 7, 2010, the Plaintiff filed its Statement of Claim in this action (Statement
of Claim in Federal Court No. T-1630-10).
[39]
On
October 8, 2010, the Statement of Claim was served personally on the Defendant
in Canada (Kuiper Affidavit,
paras. 1-2).
[40]
As
of February 16, 2011, no Statement of Defence has been filed in this action.
III. Issues
[41]
The
issues are as follows:
1. Is
the Defendant in default under Rule 210 of the Federal Courts Rules for
not having a filed a defence within the deadline set by Rule 204 of the Federal
Courts Rules?
2. On
a motion for judgment under Rule 210 of the Federal Courts Rules, what
is the Plaintiff’s burden to establish its entitlement to the relief claimed?
3. Does
the evidence in support of the motion make it possible to grant the judgment
sought under Rule 210 of the Federal Courts Rules? In particular, does
the evidence show, on a balance of probabilities that Canadian Trade-mark
Registration No. TMA437,536 is valid and has been infringed by the Defendant?
4. What
is the appropriate quantum of damages?
IV. Analysis
(1) Is the Defendant
in default under Rule 210 of the Federal Courts Rules for not having
filed a defence within the deadline set by Rule 204 of the Federal Courts
Rules?
[42]
To
establish that a Defendant is in default under Rule 210 of the Rules,
the Plaintiff must establish that the Defendant was served with the Statement
of Claim and has not filed a defence within the deadline specified in Rule 204
of the Federal Courts Rules, SOR/98-106 (Rule 210, Federal Courts
Rules; Louis Vuitton Malletier S.A. v. Yang, 2007 FC 1179,
62 C.P.R. (4th) 362.
[43]
A
Defendant served in Canada with a Statement of
Claim has 30 days to file a Statement of Defence (Rule 204(a), Federal
Courts Rules).
[44]
The
Defendant was served personally in Canada with the Statement of Claim on October 8, 2010.
The deadline under Rule 204 of the Federal Courts Rules for the
Defendant to file his Statement of Defence expired on November 8, 2010. As of
February 16, 2011 the Defendant had not filed a Statement of Defence (Kuiper
Affidavit, paras. 1-2; Reidel Affidavit, Exhibit “D”).
(2) On a motion for judgment under
Rule 210 Federal Courts Rules, what is the Plaintiff’s burden to
establish its entitlement to the relief claimed?
[45]
On a
motion for default judgment where no defence has been filed, every allegation
in the Statement of Claim must be treated as denied. Evidence must be led that
enables the Court to find, on a balance of probabilities, that there is
liability. The Plaintiff must establish its entitlement to the relief claimed
by affidavit evidence (Louis Vuitton
Malletier S.A. v. Yang, 2007 FC 1179,
62 C.P.R. (4th) 362; Ragdoll Productions (UK) Ltd. v. Jane Doe,
2002 FCT 918, 21 C.P.R. (4th) 213).
(3) Does the evidence in support
of the motion make it possible to grant the judgment sought?
[46]
At
issue in this motion is the Plaintiff’s claim that the Defendant infringed the
Plaintiff’s right to the exclusive use of the Plaintiff’s registered trade-mark
contrary to Section 20 of the Trade-marks Act (Section 20, Trade-marks
Act).
(a) Does the evidence show, on
a balance of probabilities, that Canadian trade-mark registration No.
TMA437,536 is valid and owned by the Plaintiff?
[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).
(b) Does the evidence show, on
a balance of probabilities, that Canadian trade-mark registration No.
TMA437,536 has been infringed?
[48]
Section
19 of the Trade-marks Act provides that subject to sections 21, 32 and
67 of the Trade-marks Act, the registration of a trade-mark in respect
of any wares or services, unless shown to be valid, 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 and services. Section 20(1) of the Trade-Marks
Act provides that the right of the owner of a registered trade-mark to its
exclusive use shall be deemed to be to be infringed by a person who sells,
distributes or advertises wares or services in association with a confusing
trade-mark or trade-name (Sections 19 and 20, Trade-Marks Act).
[49]
“Confusing”
when applied as an adjective to a trade-mark or trade-name, means a trade-mark
or trade-name the use of which would cause confusion in the manner and
circumstances described in Section 6 (Section 2, Trade-marks Act).
[50]
Confusion
is dealt with in Section 6 of the Trade-marks Act, which provides as follows:
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.
(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.
(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.
(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.
(5) In determining
whether trade-marks or trade-names are confusing, the court or the Registrar,
as the case may be, shall have regard to all the surrounding circumstances
including
(a) the
inherent distinctiveness of the trade-marks or trade-names and the extent
to which they have become known;
(b) the
length of time the trade-marks or trade-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.
(Section 6, Trade-marks Act)
[51]
The section 6(5)
list of circumstances is not exhaustive and the circumstances need not be given
equal weight, but rather different circumstances will be given different weight
depending on the context of a particular case (Mattel, Inc. v. 3894207
Canada Inc., 2006 SCC 22, paras. 51 and 54).
[52]
The
assessment of whether or not there is a likelihood of confusion is to be
measured from the perspective of the average hurried consumer having an
imperfect recollection of the first mark who might encounter the applicant’s
mark in the marketplace in association with the applicant’s wares. The average
consumer is owed a certain amount of credit; one must not proceed on the
assumption that the average consumer is devoid of intelligence or of normal
powers of recollection or are totally unaware or uninformed as to what goes on
around them (Mattel , paras. 56, 57).
[53]
It
is not necessary for the Plaintiff to prove the Defendant’s intent to infringe.
A 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 C.P.R. (3d)
488 (F.C.T.D.)).
[54]
The
evidence in support of this motion establishes that the Defendant has,
personally or through his employees, advertised, offered to sell, sold and
installed water-purification systems in association with the
trade-mark/trade-name AQUASMART. From a consideration of the surrounding
circumstances, it is clear that the trade-mark/trade-name AQUASMART, as it has
been used by the Defendant, is confusing with the Registered Mark.
(i) Section
6(5)(e) - Degree of Resemblance Between the Marks (Appearance, Sound or
Ideas Suggested)
[55]
While
Section 6(5) directs that all circumstances are to be taken into account when
assessing the likelihood of confusion, the degree of resemblance between the
trade-marks in appearance, sound and meaning suggested by them is usually the
most important (Beverly Bedding & Upholstery Co. v. Regal Bedding Ltd. (1980),
47 C.P.R. (2d) 145 at 149 (F.C.T.D.).
[56]
To
constitute confusion it is not necessary that every part of a trade-mark is
copied; it is sufficient if enough is copied to have a tendency to confuse the
public (K. Gill and R.S. Joliffe, Fox on Trade-marks and Unfair
Competition, 4th ed. (looseleaf) (Carswell, Toronto) at p. 8-56).
[57]
As specified
above, the Registered Mark contains the word element AQUASMART, which is
identical to the AQUASMART trade-mark/trade-name used by the Defendant. This is
accordingly a high degree of resemblance in appearance. Since the word element
AQUASMART is the only word element in the Registered Mark, there is an
identical resemblance in sound between the Registered Mark and the AQUASMART
trade-mark/trade-name used by the Defendant.
[58]
This
factor weighs strongly in favour there being a likelihood of confusion between
the Defendant’s various trade-marks/trade-names and the Plaintiff’s Registered Mark.
(ii) Sections
6(5)(c) and 6(5)(d) - Nature of the Wares and the Trade
[59]
The
Defendant advertises, offers to sell, sells and installs wares covered by the
Plaintiff’s Trade-mark Registration, namely water-purifiers. The Defendant and
Plaintiff both sell their products to the same market segment, namely household
consumers. The direct overlap in the wares and target markets strongly suggests
a likelihood of confusion.
(iii) Sections
6(5)(b) – The Length Of Time The Trade-marks Have Been Used
[60]
The
Plaintiff has filed a certified copy of the record of its trade-mark
registration, which is evidence of the facts set out therein and that the
Plaintiff is the owner of the registered mark. The Plaintiff’s
registration evidences its use of its trade-mark since as early as August 1,
1991 (Section 54, Trade-marks Act; Reidel Affidavit, Exhibit “A”).
[61]
In
comparison, the Defendant appears to have used the trade-mark/trade-name AQUASMART
no earlier than May 2010 (Reidel Affidavit, Exhibit “B”).
[62]
The
Plaintiff’s evidence demonstrates that in the short time which the Defendant
has used the AQUASMART trade-mark/trade-name, there have been several instances
of actual confusion. Though the Plaintiff need not prove actual confusion,
evidence of actual confusion lends significant weight to the Plaintiff’s
argument and thus to the outcome of the matter (Mr. Submarine Ltd. v.
Amandista Investments Ltd. (1987), 19 C.P.R. (3d) 3 at 14 (C.A.)).
[63]
In
particular, the Plaintiff has provided direct evidence that the Defendant’s use
of the AQUASMART trade-mark/trade-name led to the inference that the
Defendant’s products and business were associated with the Plaintiff. This
“reverse confusion” in which consumers seeing the mark of the senior user
(the Plaintiff) believe it to come from the junior user (the Defendant), is
actionable by the senior user under the definition provided by Section 6(2) (K.
Gill and R.S. Joliffe, Fox on Trade-marks and Unfair Competition, 4th
ed. (looseleaf) (Carswell, Toronto) at p. 8-4; A & W Food
Services of Canada Inc. v. McDonald’s Restaurants of Canada Ltd., 2005 FC
406, paras. 23-33).
[64]
The
Affidavit of Ms. Emily Testa additionally provides circumstantial evidence of
actual confusion. The fact that members of the public, in attempts to contact
the Defendant, have contacted the Plaintiff due to the Defendant’s use of a
mark confusingly similar to the Registered Mark is circumstantial evidence that
the Defendant’s use of the AQUASMART trade-mark/trade-name has led to
inferences that the Defendant’s service and business are performed by the
Plaintiff.
[65]
The
Plaintiff’s long and extensive use of the Registered Mark, the relatively short
period of time over which the Defendant has used the AQUASMART
trade-mark/trade-name, and the several instances of actual confusion shown by
the evidence strongly favour a likelihood of confusion.
(iv) Section
6(5)(a) - Inherent Distinctiveness And Extent To Which The Marks
Have Become Known
[66]
With
respect to inherent distinctiveness, invented or coined words are strong,
inherently distinctive trade-marks which are entitled to a wide scope of
protection while marks comprised of descriptive terms are weak marks
entitled to only a narrow ambit of protection such that small differences will
be sufficient to distinguish them (Weetabix of Canada Ltd. v. Kellogg Canada
Inc., 2002 FCT 724, para. 42).
[67]
The
Registered Mark contains the word element AQUASMART, which is a coined
portmanteau of the words AQUA and SMART. The word element AQUASMART is
suggestive, rather than descriptive of the Plaintiff’s wares. As such, the
Registered Mark is inherently distinctive, and entitled to a wide scope of
protection.
[68]
With
regard to the extent to which the marks/names have become known, there can be
little doubt that the Plaintiff’s Registered Mark is known to a much greater
extent than the Defendant’s mark/name. The Plaintiff has advertised its
trade-mark extensively, and has done so through various means, including
advertisements in Canada’s leading health and
wellness magazine, tradeshows booths, a Web site, and exterior and interior
signage at its retail store. The Plaintiff spent approximately $18,000 in
magazine advertising in 2010, and in recent years has had more than 10,000
unique customers annually. Through this extensive advertising and use, the
Plaintiff’s mark has undoubtedly become known to a considerably greater extent
than any of the Defendant’s mark, which were all used for relatively short
periods of time.
V. Remedies
[69]
The
relief sought in the terms of the Order sought has been established for actions
of this type and therefore is granted.
[70]
The
injunctive and delivery relief sought is within the parameters of relief that
the Court awards in cases where a person has contravened the Trade-marks Act
(Section 53.2, Trade-marks Act).
[71]
Concerning
monetary relief, the Court may make an order for the recovery of damages or profits.
As the Defendant has not participated in these proceedings, the Plaintiff has
been denied discovery, and thus left without a practicable method of accurately
determining the true scope of the Defendant’s infringements and profits; however,
it is not necessary to prove actual damages with certainty. Once a plaintiff
has proven infringement and that damage has occurred, it is entitled to the
court’s best estimate of those damages without necessarily being limited to
nominal damages (Section 53.2, Trade-marks Act; Ragdoll Productions
(UK) Ltd. v. Jane Doe, 2002 FCT 918, 21 C.P.R. (4th) 213 at paras. 40-45; Louis Vuitton
Malletier S.A. v. Yang, 2007 FC 1179, 62 C.P.R. (4th) 362 at para. 28).
[72]
Where
defendants’ activities have made accurate assessments of trade-mark
infringement damages impractical, the courts’ assessments of plaintiffs’
damages have been guided by the scale of the defendants’ activities. In
particular, past decisions of the court have defined a scale that sets
appropriate plaintiffs’ damages, in 1997 dollars, at $3,000 in the case of
street vendors and flea market operators, $6,000 in the case of sales from
fixed retail premises, and $24,000 in the case of manufacturers and
distributors. The court has recognized that this scale should be adjusted for
inflation, and that finer gradations may be possible (Oakley, Inc. v. Doe
(2000), 8 C.P.R. (4th) 506 at para. 3; Ragdoll Productions, supra,
at para. 48; D. & A.'s Pet Food'n More Ltd. v. Seiveright, 2006 FC
175, 48 C.P.R. (4th) 281 at para. 9).
[73]
One
case has also applied a multiplier to the scale amount based on the number of
distinct infringing activities proven by the plaintiff. In that case, the court
awarded damages of $87,000, as calculated by multiplying six distinct
infringements by an inflation-adjusted award of $6,000 (Louis Vuitton, supra,
at para. 43).
[74]
In
the circumstances, it is submitted that it is appropriate to award the
Plaintiff damages on the conventional scale, in the amount of $15,597.35,
which in today’s dollars is equivalent to $12,000 1997 dollars. This amount is
appropriate having regard to the proven scale and character of the
Defendant’s activities, including that:
·
the Defendant carried on business five-days per week from
physical premises identified with signs bearing a
trade-name that infringed the Plaintiff’s Registered Mark;
·
the Defendant’s business involved the use of vehicles identified
with signs bearing a trade-name that infringed the Plaintiff’s Registered
Mark;
·
the Defendant employed a network of “dealers” to distribute wares
in association with a trade-mark/trade-name that infringed the
Plaintiff’s Registered Mark;
·
the Defendant’s wares were expensive, the evidence showing
per-unit costs of approximately $2,800 and $5,600;
·
the Defendant continued in the use of a trade-mark/trade-name
that infringed the Plaintiff’s Registered Mark after he was made aware of the
Plaintiff’s trade-mark rights, after he told Plaintiff’s counsel that he had
reserved a new name for his business, after the Statement of Claim in this
action was served on him, and after he told Plaintiff’s counsel that he had
changed the name of his business;
·
as per the evidence, the Defendant’s business practices, which
can be described as reprehensible, have generated significant ill will, and, as
a result of the Defendant’s use of a trade-mark/trade-name that infringed
the Plaintiff’s Registered Mark, this ill will has been linked to the
Plaintiff and thereby diminished the Plaintiff’s goodwill (Reidel Affidavit,
Exhibit “C”).
[75]
The
Plaintiff also seeks lump-sum costs, on a solicitor-client basis, for the
action as part of the Order for Default Judgment. The Court has recently
awarded costs on a solicitor-client basis in cases where the Defendant has
flagrantly and deliberately disregarded the Plaintiff’s intellectual property
rights and failed to defend the action. On this basis, the Plaintiff seeks an
award of costs and disbursements totalling $10,000 (Rule 400, Federal Court
Rules, 1998; Microsoft Corporation v. PC Village Co. Ltd., 2009 FC
401 at para. 46; Louis Vuitton, supra, at para. 59.
ORDER
THIS COURT ORDERS that:
1. Default judgment be hereby granted in this action
in favour of the Plaintiff.
2. It be hereby
declared that the Defendant has infringed Canadian Trade-mark Registration
No. TMA437,536 contrary to Section 20 of the Trade-marks Act.
3. A permanent
injunction be hereby granted restraining the Defendant, his
employees, agents, or otherwise from:
(a) infringing
Canadian Trade-mark Registration No. TMA437,536;
(b) using, as or
as part of a name, trade-mark, trade-name, Internet domain name or otherwise
in association with the Defendant’s wares, services and/or business, the business
name or trade-mark AQUASMART or any other trade-mark or trade-name which is
confusing with, or likely to be confused with, the trade-mark registered under
No. TMA437,536;
(c) directing
public attention to the Defendant’s services or business in such a way as to cause
or be likely to cause confusion in Canada between the Defendant’s wares,
services or business and the wares, services or business of the Plaintiff;
(d) passing off
the Defendant’s wares or services as and for those of the Plaintiff; and
(e) falsely
suggesting any association between the Defendant’s wares, services and/or
business and those of the Plaintiff;
4. The Defendant
shall destroy under oath or deliver up to the Plaintiff all signage, wares,
advertising materials, literature or other material under the power or control
or in the possession or custody of the Defendant which are in violation of any
of the foregoing injunctions.
5. The Defendant
shall pay an amount of $15,597.35 to the Plaintiff in respect of damages within
thirty (30) days from the service of this Order (as per the jurisprudence cited
in paragraphs 72 and 73 above).
6. The Defendant
shall pay $10,000 to the Plaintiff in respect of solicitor-client costs and
disbursements within thirty (30) days from the service of this Order.
“Michel M.J. Shore”
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