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Round and Round: Ajit Trademark Litigation 10 Years In

Background

Hamdard Trust and Navsun Holdings have engaged in a longstanding litigation over the use of the term “Ajit” in their trade-marks and advertisements. Both parties own and publish newspapers. The Hamdard Trust newspaper is sold under the name “Ajit Daily”, while Navsun publishes under the name “Ajit Weekly”.

In the initial decision, Navsun was successful in defending against all allegations of trademark and copyright infringement, but was unsuccessful in it counterclaim that Hamdard Trust was making false and misleading statements about “Ajit Weekly”. However, on appeal, the Federal Court of Appeal found that the lower court had made reversible errors in assessing the passing-off and copyright infringement and remitted these  matters back to the Federal Court for redetermination. (See our previous post here).

The redetermination Trial Judge held that Navsun was liable for passing-off and copyright infringement with respect to its original logo and Hamdard Trust was awarded $10,000 in damages but dismissed the passing-off, trade-mark infringement, depreciation of goodwill, and copyright infringement claims with respect to the modified logo. In determining that Navsun’s new logo to not be confusingly similar with the registered mark, the redetermination Trial Judge held

[48] However, I am not persuaded that Navsun’s new logo is also confusingly similar to Hamdard’s mark. The only evidence before this Court regarding the distinctiveness of Hamdard’s logo is the “hook” above the word, which extends further to the left than if the word “Ajit” were written in a standard font. Hamdard admitted in the PSA that Navsun’s new logo was sufficiently distinct for copyright purposes.

[49] Navsun’s new logo dispenses with the stylized “hook” of Hamdard’s mark, and is now green in colour. If the new logo is sufficiently different to avoid infringing Hamdard’s copyright in the image, then it is counterintuitive to suggest it is not sufficiently different to avoid confusion in the marketplace. I agree with Navsun that it is inconsistent for Hamdard to permit use of the new logo for copyright purposes, while objecting to its use as an instance of passing off. I am therefore not satisfied that Hamdard has met its onus of demonstrating that Navsun’s new logo is confusingly similar to Hamdard’s mark.

Both parties then appealed.

Federal Court of Appeal Decision #2

The Court of Appeal held that the redetermination Trial Judge erred by applying the confusion test in assessing Hamdard Trust’s section 19 claim which is concerned with the use by a defendant of a trademark that is identical to the registered mark. The test under Section 19 is  narrower that the confusion test set out in section 20. In so doing, Court of Appeal rejected the “mental association” test, articulated by the Supreme Court in Veuve Clicquot, was the correct test to apply under section 19.

The Court of Appeal also held that the redetermination Trial Judge also erred by restricting analysis of the section 6(5) confusion factors in its application of section 20 of the Trade-marks Act. Despite listing the correct factors, the court restricted its analysis to distinctiveness and the degree of resemblance between the marks and by equating  infringement under the Trademark and Copyrights Acts, holding “[t]he criteria for copyright infringement and trademark infringement are not the same”.

The redetermination Trial Judge further erred by requiring that the marks be “confusingly similar” in order for the plaintiff to succeed in its claim for depreciation of goodwill under  section 22. Citing Veuve Clicquot the Court of Appeal held that Section 22 is “conceptually quite different” from infringement under section 20, and “does not require a demonstration that use of both marks in the same geographic area would likely lead to confusion”.

Lastly, the  Court of Appeal found that the Federal Court had erred in law in its application of the second branch of the passing-off claim under subsection 7(b) of the Trade-marks Act. Similar to its analysis under section 20, the Court of Appeal found that the Federal Court was required to consider all the confusion factors in its analysis of whether deception had occurred.

Remedy

As the litigation between the parties started 2010, both parties asked the Court of Appeal to exercise its discretion and give the judgment the Federal Court should have given as permitted by paragraph 52(b)(i) of the Federal Courts Act. The Court of Appeal refused to exercise its discretion and decide the matter, instead it remitted the matter  back to the Federal Court for a second time, holding:

[61] I appreciate the parties’ concern to be done with this litigation. But I do not consider that in the circumstances of this case, a further delay would amount to a failure of justice. The parties’ publications have now co-existed in Canada for many years, and did so for many years before the litigation was launched. This is a complex case, which still requires the determination of multiple issues. The focus of the hearing was largely on the legal errors asserted, and much less on the evidence that would support the parties’ positions if these errors were corrected. While the parties’ memoranda also set out evidentiary references, they do not address all of the factors that would need to be considered and decided: see, for example, paragraph 31 of Hamdard Trust’s memorandum responding to the cross-appeal, stating that “[t]his memorandum will not reconsider all the [subsection 6(5)] factors, but merely address the submissions made with respect to some of them in [Navsun’s memorandum in the cross-appeal].” Asking for further written submissions on evidentiary issues would be a cumbersome mechanism for obtaining answers to the evidentiary questions that would inevitably arise.

A copy of the Court of Appeal’s Reasons for Judgement may be found here.

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