Infringement, Expungement, No Damages—Oh My!

The latest chapter in the Group III International Ltd. v. Travelway Group International Ltd. saga has closed. The Federal Court has ordered Travelway's trademark registrations expunged for invalidity, but has ordered no damages or accounting of profits to Wenger S.A. (2019 FC 1104). This result assuages some of the uncertainty created by the underlying Federal Court of Appeal decision that had left two registered but confusing trademarks on the Register, suggesting that where confusion is found, expungement (if sought) should follow. Moreover, this result suggests that registered trademark owners can shelter their infringing use under the section 19 defence as long as the trademark registrations are not invalid ab initio.

The Federal Court of Appeal ("FCA") ruled nearly two years ago (2017 FCA 215) that use by Travelway of modified versions of its registered trademarks that included a Swiss cross-design in association with luggage infringed and passed off on Wenger's registered trademark rights in its own Swiss cross-design used in association with luggage. It overturned the Federal Court's initial decision, which found that no infringement or passing off occurred by Travelway's use (2016 FC 247). The FCA granted Wenger, amongst other things, a permanent injunction prohibiting Travelway from using its own registered trademarks on its luggage products. The FCA did not, however, order expungement of Travelway's trademark registrations or any monetary relief — instead returning these questions to the same Federal Court judge as had issued the initial decision on Travelway's infringement and passing off in 2016.

Our article discussing the FCA's 2017 decision, and the underlying facts of the case, is available here.

The FCA's referral back to the Federal Court on the issue of invalidity created a rather perplexing outcome: registrations for trademarks found to be confusing were nevertheless allowed to co-exist on the Trademarks Register awaiting this later decision. Although the FCA had not explicitly stated that the Travelway registrations were invalid, the Federal Court Judge held such outcome had to be implied and that the marks "must be expunged". The FCA had found passing off, and the case law clearly establishes that under section 19 of the Canadian Trademarks Act, a trademark registration is an "absolute defense" to a passing off claim, but the FCA made no indication it intended to depart from such case law.

To expunge the Travelway...