That is Going to Cost You: Willful Infringement of Trade-mark and failure to participate in Court proceeding results in cost sanctions

On October 24, 2014, Justice Noël of the Federal Court, released the Reasons for Judgment on a motion for default judgment in Source Media Group Corp. v. Black Press Group. Source Media sought relief under the Trade-marks Act for infringement of the Plaintiff’s registered trade-mark, NEW HOME LIVING.

Both the Plaintiff and the Defendants were using the mark on their respective real estate and lifestyle websites/publications. When the Plaintiff was made aware of this fact, they sent a letter to the Defendants dated November 15, 2012 requesting that they cease use of the registered mark immediately. The Defendants removed the mark from their print publication, but continued to use the mark (with only some slight changes) on their website until January 2014.

The Plaintiff sued the Defendants for trade-mark infringement and the Defendants failed to file a Statement of Defence.

Justice Noël addressed 5 issues: (1) whether the Defendants infringed the Plaintiff’s registered trade-mark contrary to sections 19 and 20 of the Trade-marks Act; (2) whether the Defendants directed public attention to their wares, services or business in such a way as to cause or be likely to cause confusion in Canada between their wares, services, or business and the wares, services or business of the Plaintiff; (3) whether the Defendants used the registered trade-mark in a manner that was likely to depreciate the value of the goodwill attaching thereto; (4) whether the Defendants properly included confidential settlement discussions between the parties in their submissions on this motion; and (5) whether the Defendants were liable to the Plaintiff for damages and costs, and if so, in what amount.

With respect to the first two issues, the Court stated that it was irrelevant that the Defendants publication was produced in the Chinese language, and held that the test set out by the Supreme Court of Canada in Masterpiece was satisfied given that that Defendants were using the Plaintiff’s registered mark in association with the same wares and services: home and real estate. The Court concluded that the Defendants’ infringed the Plaintiff’s trade-mark until December 2012 for the written publication, and until January 2014 with respect to the website. The Court also held that the Defendants passed off their publication, both in print and online, as being associated or connected to the Plaintiff’s trade-mark.

The Court held that there was insufficient evidence to establish any depreciation of goodwill in the Plaintiff’s trade-mark.

The Court re-iterated the general principal that information relating to settlement is protected by privilege, and as no overriding public interest justified disclosure, the settlement discussions in the Defendants’ submissions was improper.

Damages of $15,000 were awarded. Justice Noël also held that given that the Defendants had not meaningfully participated in the proceeding (except settlement discussions), and given that they knew about the Plaintiff’s trade-mark in December 2012, but failed to remove it from their website until January 2014, costs were awarded in a lump sum of $13,000.

A copy of the Judgment and Reasons may be found here.