A bittersweet default judgment for Honey
The Federal Court granted default judgment in favour of Heather McDowell, owner of Toronto-based fashion boutique Honey, against the online boutique “A Drip of Honey” for trademark infringement and passing off. The Court found sufficient evidence to support claims under section 20 and paragraph 7(b) of the Trademarks Act, resulting in an award of nominal damages, a permanent injunction, and delivery up.
However, the Court declined to award costs and rejected claims under sections 19, 22, and 7(c), noting that the plaintiff’s submissions were disorganized and unhelpful, did not cite to the correct legal test for any of the alleged causes of action, and provided no substantiation for the remedies sought.
With respect to infringement, the Court found the defendant’s marks were not identical to the plaintiff’s Honey Marks and did not infringe under section 19 of the Trademarks Act. The Court only considered whether the defendant’s marks infringed the plaintiff’s word mark (HONEY) under section 20 of the Trademarks Act, because an owner is permitted to use a word mark in any size and with any style of lettering, colour, or design.
The Court found a strong resemblance between the parties’ marks, supporting a finding of confusion. The Court found that “honey” is the dominant word in the defendant’s marks, and the phrase “a drip of” is merely a qualifier to the subject “honey”. Comparing this dominant element in the parties’ marks, the Court held that they are identical in appearance and sound, and the core ideas suggested by the marks are similar.
The inherent distinctiveness of the plaintiff’s mark, length of use of the plaintiff’s mark, and similar nature of the parties’ goods also supported a finding of confusion. There was no evidence to determine if the defendant’s marks were known or how long they had been in use.
With respect to passing off, the Court highlighted the threshold issue that the plaintiff must establish: a valid and enforceable trademark at the time the defendant began drawing public attention towards its goods or services. The Court determined that the defendant began its operations around November 8, 2020, when it created and began advertising on its Facebook page. As the plaintiff had used the Honey Marks since 2003, the Court found the threshold requirement for passing off was satisfied.
The plaintiff established goodwill or reputation attached to the Honey Marks given their use and sales over $11M over the last ten years. The plaintiff also established a likelihood of confusion, as discussed above. Finally, the Court held potential damages resulting from a loss of control over the plaintiff’s goodwill were sufficient to support a claim in passing off.
The Court rejected the plaintiff’s claim under paragraph 7(c) of the Trademarks Act, given her lack of submissions on this issue. And, despite finding a likelihood of confusion under section 20, the Court rejected the plaintiff’s claim under section 22 because she had not established that the casual observer would recognize the defendant’s marks as the Honey Marks or make the necessary link, connection, or mental association to the Honey Marks.
The Court ordered a permanent injunction and delivery up, including transfer of ownership of the “adripofhoney.ca” domain name. The Court also awarded $10,000 in nominal damages. However, the Court declined to award costs given the lack of evidence of the defendant’s conduct or the plaintiff’s costs, and the plaintiff’s partial success in the proceeding.
A copy of the decision can be found here.