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Joint Business Ventures do not Equate to Shared Ownership of IP

Corey Bessner Consulting Inc. (c.o.b. Core Consultants Realty) v. Core Consultants Realty Inc., 2020 FC 224 dealt with a soured business relationship and the resulting dispute over ownership and use of the jointly-used trademarks.

The Plaintiff is a commercial realty consulting and brokerage doing business in Montreal as Core Consultants Realty. The main Defendant, Core Consultants Realty Inc., is a commercial realty consulting and brokerage in Toronto.

The Plaintiff had designed and used the CORE CONSULTANTS REALTY mark and related logo since launching its business in mid-2015. In late 2015, the parties began discussing a business alliance involving a national brokerage under a common brand. The Defendant emailed the Plaintiff in December 2015 with a proposed summary of the business arrangement. The email contained general, proposed terms including that the partners “would own equal share of intellectual property.” The Plaintiff did not respond to the email. The parties continued to discuss and structure their business relationship. The Defendant launched its business in 2016. The parties thereafter operated (mainly in their respective cities) sharing the logo, website, social media accounts, branding, customer databases, and certain expenses.

The relationship deteriorated and, in 2018, the Plaintiff demanded that the Defendants immediately cease use of the Plaintiff’s trademarks and change the Corporate Defendant’s name. The Defendants argued that the trademarks were jointly owned in accordance with the December 2015 email. They asserted that the terms were accepted by failing to reject the email and through the Plaintiff’s subsequent conduct implementing the business alliance largely in accordance with the email’s terms. The Defendants argued that the Plaintiff was estopped from disputing their right to continued use of the marks.

Justice Walker held that the marks were owned by the Plaintiff. The email was “a proposal only” and estoppel did not apply. The Plaintiff never provided written agreement to the terms and the evidence established that it had actually expressed concern to the Defendants about the proposed terms. Despite moving forward with an alliance that mirrored some aspects of the email, there was no evidence of a promise made by conduct that an ownership interest would be assigned in the marks. Indeed, the Plaintiff maintained effective control over the use of the marks because no changes could occur without its consent.

Justice Walker found that the Defendants’ use of the marks from 2016 to 2018 was authorized by an implied license. The case law establishes that a licensing agreement may be inferred and a written license agreement in respect of the use of a mark is not required (the Court relied on Cushman & Wakefield Inc. v Wakefield Realty Corp., 2004 FC 210; aff’d 2004 FCA 415, and Allianz Global Investors of America LP v Middlefield Capital Corporation, 2014 FC 620).

It was clear from the business relationship that the Defendant was authorized to use the marks in connection with its commercial realty brokerage in Toronto. However, the Plaintiff was entitled to revoke that license. It did so in 2018. The Defendant’s argued that the license was irrevocable and perpetual. The Court found that “[t]he Defendants have pointed to no evidence to this effect, nor is their argument commercially reasonable.”

The Defendants’ use of the mark following revocation of the license in 2018 constituted infringement and passing off. The Court’s analysis on these issues was rather short, as the elements were clearly established. The Court held that the Plaintiff was entitled to permanent injunctive relief to terminate the Defendants’ use of the CORE CONSULTANTS REALTY mark and to restrain the Defendants from conducting activities that infringe the Plaintiff’s rights.

A copy of the decision can be found here.