Federal Court Dismisses Trade Mark Infringement Suit: No Actual Confusion of Co-Existing Marks

In Scott Technologies, Inc. v. 783825 Alberta Ltd., 2015 FC 1336, Justice Zinn dismissed all of the plaintiff’s allegations of trademarks infringement and passing off against the defendants. The main trademark at issue was the word mark SCOTT.

The Plaintiff

The plaintiff, Scott Technologies, traces its corporate history back many decades to a company started in 1932. Scott Technologies also developed the first North American self-contained breathing apparatus [SCBA]. The device is marketed and sold to fire and security customers. In the early 2000s Tyco International acquired Scott Technologies and placed it within its fire and security division. While Scott Technologies continues to remain one of two major manufacturers and suppliers of SCBA, they do not directly sell their SCBA in Canada; rather they have numerous distributorship agreements with business across Canada.

The Defendant

The defendants’ began their business in 1995 and were initially known as “Scott Safety Supply Services,” describing the business as “fire extinguisher sales and maintenance.” Eventually, the defendants expanded their services to include “S.C.B.A. Service & Rentals.” In 2000, the defendant, Scott Safety Supply Services Ltd. entered into an “in-house repair agreement” with the plaintiff, Scott Technologies, giving it “the right to inspect, repair, and service” the Scott SCBA it owned. The plaintiff terminated the agreement in 2003. Over the years, the defendant, Scott Safety Supply Services Ltd., used various logos and abbreviated its trade name to “Scott Safety”.

The Dispute

Sometime in 2011, Tyco International decided to rebrand its fire and security division internationally as Scott Safety. Also in 2011, the plaintiff sent a letter to the defendants demanding that it “discontinue all use of the trade-mark and tradename SCOTT alone or as part of any trade-mark, trade name or any other commercial designations in association with your business.” Subsequently, the plaintiff commenced this proceeding alleging that that the defendant had:

• Caused confusion, contrary to section 7(b) of the Trade-marks Act;
• Passed off its services as those of the plaintiff, contrary to 7(c) of the Trade-marks Act;
• Infringed the plaintiff’s registered trade-mark, contrary to sections 19 and 20 of the Trade-marks Act; and
• Depreciated the value of the plaintiff’s goodwill, contrary to section 22 of the Trade-marks Act.

No Actual Confusion

Justice Zinn noted that the test for confusion is one of first impression and imperfect recollection by the relevant consuming public. Justice Zinn then embarked on an analysis of the non-exhaustive list of criteria outlined in Section 6(5) of the Trade-marks Act that a Court should consider when determining whether a trade-mark is confusing.

Justice Zinn found that factor 6(5)(a), inherent distinctiveness, favored the defendant as the word “Scott” was a common name lacking inherent distinctiveness while factor 6(5)(e), the degree of resemblance, slightly favoured the plaintiff because “Scott” resembles “Scott Safety”. The remaining factors did not unambiguously favour either. In light of this ‘tie’, Justice Zinn noted that the most important contextual factor to then consider is the lack of actual confusion as outlined, by the Supreme Court of Canada, in Mattel (at para. 55).

After weighing the evidence Justice Zinn found that there was no conclusive proof of actual confusion between “Scott Safety” and the plaintiff’s trademark SCOTT, especially when both marks co-existed on the market for many years. Justice Zinn stated that:

[71] The facts in this case are clearly much closer to Mr Submarine than to Absolute. The parties have both been marketing their products to customers in the oil patch for several years. If customers were likely to be confused by the defendants’ use of the mark “Scott Safety,” one would expect to find evidence of their confusion. I agree with the defendants that the evidence of actual confusion in this case is extremely weak.

…

[79] There is no real evidence of confusion despite the fact that the defendants’ business has operated in a market in which the plaintiff has been doing business for more than 20 years. There is little meaningful confusion and thus no infringement of the plaintiff’s trade-marks, nor has there been any passing off.

No Depreciation of Goodwill

Justice Zinn also dismissed the plaintiff’s allegation that the defendants have depreciated their trademark contrary to section 22(1) of the Trade-marks Act. The plaintiff had failed to offer any evidence that it has or had lost any sale impacted by the defendants’ trademark. In fact, the plaintiff admitted that there had been no such loss.

In the Alternative…

Justice Zinn noted that even if he had found that the defendants had breached the plaintiff’s trademark SCOTT, he would not have awarded any damages in light of the plaintiff’s candid admission that there have been none. Furthermore, the Justice Zinn would have not provided any injunctive relief, noting that:

[84] …That relief is equitable and discretionary. Here, the plaintiff has long known of the use by the defendants of “Scott Safety” and it was even warned some years ago by Mr. Roy to keep an eye on that business; but it did nothing – nothing until it decided to globally rebrand itself as Scott Safety – the defendants’ very trade-mark. A business cannot lie in the weeds, allowing another to carry on and invest in and grow its business, and then spring up and enlist the aid of the court when it suits its purposes, claiming it has been unfairly treated. In this case, if there is any unfairness, it is that the defendants were unfairly treated by the plaintiff when it decided to use the same name the defendants had been using in excess of 20 years.

Therefore, the Court dismissed all of the plaintiff’s claims and awarded the defendants their costs.

Justice Zinn’s decision is available here.