Infringement, Expungement, No Damages ' But Disgorgement Of "Unlawful" Profits For Passing Off?

• Published date: 28 December 2020
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Bereskin & Parr LLP
• Author: Mr Joshua W. Spicer

The saga in the Group III International Ltd. v. Travelway Group International Ltd. proceeding continues, as the Federal Court of Appeal renders its decision to add yet another layer of analysis to the issues of trademark infringement, passing off, expungement and remedies (2020 FCA 210). The decision is noteworthy for two reasons. First, it affirms the protection afforded by a trademark registration against claims of trademark infringement and passing off based on use of the registered trademark. Second, it presents a circumstance where application of this very principle would have otherwise absolved the respondent of any liability, but by operation of res judicata, the Court awarded the appellant an accounting of the respondent's profits for passing off.

This is the second appeal in a case that Wenger S.A. commenced in 2013 when it brought an application against Travelway Group International Ltd. for trademark infringement and passing off by reason of Travelway's use of a Swiss cross-design in association with luggage. The Federal Court dismissed the application (2016 FC 347), however, the FCA overturned the trial level decision and granted Wenger, inter alia, a declaration of infringement and a permanent injunction against Travelway (2017 FCA 215). The FCA also referred two remedial issues to the Federal Court for further adjudication: (i) whether it is appropriate for the Federal Court to order the striking out of Travelway's own registered trademarks from the Register, and (ii) whether damages are recoverable under subsection 53.2(1) of the Trademarks Act ("Act"). Our article discussing the FCA's 2017 decision, and underlying facts, can be found here.

In 2019, the Federal Court ordered expungement of Travelway's registered trademarks, but dismissed Wenger's claim for damages (2019 FC 1104). Relying on section 19 of the Act, the Federal Court held that Wenger was precluded from obtaining damages for pre-expungement use of the infringing Travelway trademarks. Since its trademarks were registered, Travelway was entitled to the benefit and rights conferred under section 19 until FCA found them to be invalid in 2017. We have previously discussed the Federal Court's decision here.

Wenger appealed the Federal Court's decision dismissing its claim for monetary compensation, arguing that the Federal Court erred and should have found the infringing Travelway trademarks to have been always invalid and never registrable.

In its reasons, the FCA upheld the trial...