Top Trademark Cases From The Canadian Courts In 2015

Last year we saw the Canadian Courts release trademark decisions that granted a rare interlocutory injunction, issued jailed sentences for failure to comply with injunctive relief, grappled with trademark and internet issues, considered use and facts that excuse non-use of trademarks or require use of French language terms, and also addressed descriptiveness and non-traditional marks. Here's our pick of 2015's most important Court cases and legislative developments:

Rare Injunction Granted

Jamieson Laboratories Ltd. v Reckitt Benckiser LLC and Reckitt Benckiser (Canada) Limited (2015 FCA 104)

Pre-trial injunctive relief is very rarely granted in Canadian trademark cases, as the harm caused by the infringing activity is generally not seen by the Federal Court to be irreparable in nature. The rather unique facts in this case, where the trademark registration owner had not used the trademark in Canada before the infringement occurred, provided the Federal Court with the opportunity to find irreparable harm. This decision potentially signals how impending changes to the Trade-marks Act, which changes specifically provide for registration without use, may impact the enforcement of those registrations.

In 2011, Reckitt Benckiser acquired, by assignment, a registration for the mark MEGARED. While the predecessor had used the mark in the United States, use in Canada had been delayed for various purported reasons, including Health Canada approvals and issues relating to the change in ownership. The registration covered omega-3 fatty acid supplements, and had been used in the US by the predecessor on fish oil supplements made from "red" krill. The product was widely advertised and promoted, including on television programs emanating from the US.

Reckitt Benckiser launched MEGARED supplements in late 2013/early 2014. However, in summer 2013, another major Canadian supplier of supplements, Jamieson, reintroduced an existing krill-oil supplement under a new mark, Omega RED. Both products are shown below.

Reckitt Benckiser commenced an action for infringement in October 2014, and a month later sought an application for an interlocutory injunction, now more than 18 months after Jamieson's launch. The injunction was granted notwithstanding the apparent delay, and maintained on appeal. On the issue of evidence of irreparable harm, the Federal Court of Appeal confirmed that, in general, where damages cannot be quantified or are incalculable, "those losses can be considered irreparable". The Federal Court of Appeal also noted that where the party seeking to enforce its mark enters the market after the alleged infringer, to hold a Plaintiff to the onus of proving damages, such as lost sales or other marketplace loss, should not be necessary, when "the only market environment in which the plaintiff has ever operated has been one in which the alleged infringer has operated as well".

Counterfeiting Denounced

Chanel S. de R.L. v. Kee (2015 FC 1091)

By summary trial, Chanel succeeded against a family engaged in counterfeiting who had tried to avoid the consequences of an earlier settlement and Court (consent) order by an inter-family transfer of the business.

The Federal Court saw Chanel's trademark rights as being blatantly disregarded by the family's sale of counterfeit fashion accessories bearing Chanel's marks; the Court also saw the Court process and its orders being disregarded, as the related corporate defendant, who had earlier sold such counterfeit goods, had settled an earlier action brought by Chanel, which settlement included a consent order. Against these "egregious" activities, the Court saw nominal damages as insufficient "to denounce and deter". The Court ordered $64,000 in nominal damages for eight infringing events, $250,000 in punitive damages and $66,000 in costs (the latter being 60% of Chanel's actual out-of-pocket costs).

Confusion: Co-existence, Extent of Use and Drawing an Adverse Inference

Scott Technologies Inc. v. 783825 Alberta Ltd. (2015 FC 1336)

The Federal Court, referring to the Supreme Court of Canada's decision in Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, recognized that in cases where there is longstanding and extensive co-existing use of two marks, the absence of evidence of confusion can be an important factor in assessing the likelihood of confusion.

Scott Technologies brought an action for trademark infringement, passing off and depreciation of goodwill in relation to its registered trademarks, including the SCOTT mark, for breathing equipment marketed and sold to fire departments, against a fire extinguisher sales and maintenance business that had used its Scott Safety name for many years.

Having found that Scott Technologies had produced no substantial evidence of actual confusion, the Federal Court saw, where the other confusion factors were notionally tied, that the lack of evidence of actual confusion was the "most important contextual factor". The Court went on to comment "the fact that something [confusion] did not occur suggests, other things being equal, that it was not likely to occur". The Court also noted that the extent to which a court may draw a non-confusion inference from a lack of evidence of actual confusion...