Battle Royal(e): Use Of Trademarks Beyond Sales Representative Agreement Constitutes Infringement And Passing Off; SCC Dismisses Appeal

• Published date: 10 May 2021
• Subject Matter: Intellectual Property, Real Estate and Construction, Trademark, Real Estate
• Law Firm: Clark Wilson LLP
• Author: Ms Caroline Camp

On May 6, 2021, the Supreme Court of Canada (SCC) dismissed an application for leave to appeal in the case of Dong, et al. v. Royal Pacific Real Estate Group Ltd., et al., 2020 BCCA 323 (39550). The lower courts in the Province of British Columbia, both at the trial level and on appeal, had held that the appellant's use of certain licensed trademarks owned by the respondent, outside of the precise terms of the parties' Sales Representative Agreement, constituted infringement and passing off; as a result of the SCC's dismissal, the BC Court of Appeal decision now stands.

This case serves as a good reminder for licensees to carefully review trademark license provisions in sales representative, product distribution and similar agreements for their specific terms relating to permitted use of relevant trademarks - and to consider the risks of using such trademarks outside the activities specifically permitted in such agreements.

The respondent in this case is a well-known, Vancouver-based real estate company "Royal Pacific Group" (consisting of Royal Pacific Real Estate Group Ltd. and Royal Pacific Realty (Kingsway) Ltd.), owner of the registered trademark ROYAL PACIFIC Logo and the unregistered trademarks ROYAL PACIFIC and ROYAL PACIFIC REALTY (collectively, the "Trademarks"). In 2012, Royal Pacific Group entered into a Sales Representative Agreement (the "SRA") with the appellant, Mr. Steven Dong (the "Mr. Dong"), pursuant to which Mr. Dong was licensed to act as a real estate representative for Royal Pacific Group.

However, in 2013, Royal Pacific Group discovered that Mr. Dong had, without the knowledge or consent of Royal Pacific Group, launched a separate referral platform for real estate professionals under the name "Bliip Box". The website for this service used the domain name royalpacific.co and displayed the Trademarks. Mr. Dong was also sending emails to third parties containing the Trademarks and the following language: "Royal Pacific Realty is one of BC's largest brokerages and now we are looking to endorse local businesses on our Bliip Box."

Shortly after this discovery, Royal Pacific Group sent a cease and desist letter to Mr. Dong, demanding that he take down the website and cease using the domain name royalpacific.co. When there was no immediate compliance, Royal Pacific Group also sent notice of termination of the SRA. However, Mr. Dong continued to operate the website at royalpacific.co as well as a related Facebook page (royalreferrals)...