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A Perk for PERKOPOLIS: Limits of Non-Statutory Trademark Invalidity

In Concierge Connection Inc v. Venngo Inc, 2015 FCA 215, the Federal Court of Appeal allowed Concierge’s appeal, with reasons delivered from the bench, and held that Concierge should not be required to produce an itemized breakdown of its revenue for an accounting of profits.

Venngo holds several trademarks containing the phrase “perks”. Between 2006 and 2008, the parties discussed, but did not enter into, a cooperative business arrangement. Venngo alleges that it disclosed proprietary information during these discussions and that Concierge subsequently began operating a similar business with a similar business model under the name PERKOPOLIS. Venngo alleges that the PERKOPOLIS mark is void ab initio due to Concierge’s fraudulent business dealings and that Concierge is therefore financially accountable for its past use of that mark.

Venngo did not move to compel answers to questions regarding financial information refused during discovery. Later, when it elected an accounting of profits, Venngo moved to compel production of information and documentation of Concierge’s revenue. Prothonotary Milczynski granted the motion, holding that “whatever the merits are for the claim for those profits, the matter is clearly in issue in the event the registration is expunged” and noting that there was no evidence that production was onerous or that it would prejudice Concierge.

Justice Diner of the Federal Court dismissed Concierge’s Rule 51 appeal. Justice Diner found that the Prothonotary’s decision was reasonable, as Venngo had raised the issue of wilful and negligent misrepresentation in the registration process.

The Federal Court of Appeal held that a trade-mark will be invalidated ab initio only if the trade-mark was obtained “by making a misrepresentation to the trade-mark office or misleading it in a material way”. Finding nothing in the pleadings to give rise to such a determination, Justice Nadon allowed the appeal and dismissed Venngo’s motion.

A copy of the decision can be found here. The decision of Diner J can be found here.