Defedant and its officers found liable for trade-mark infringement in high times case, rules Canada’s federal court
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DEFENDANTANDITSOFFICERSFOUNDLIABLEFORTRADE-MARK
INFRINGEMENTINHIGHTIMESCASE,RULESCANADA’SFEDERALCOURT
BARRYGAMACHE*
ROBIC,LLP
L
AWYERS,PATENT&TRADEMARKAGENTS
ArecentdecisionbyCanada’sFederalCourthasfoundaRespondentandits
corporateofficersliablefortrade-markinfringementbecauseoftheRespondent’s
useofHIGHTIMESonitsexteriorstoresignageandonitsonlineadvertising
materials(Trans-HighCorporationvConsciousConsumptionInc.,2016FC949(F.C.
MansonJ.,August18,2016)).
Trans-HighCorporation(“Trans-High”orthe“Applicant”)isaU.S.corporationthat
hasusedinCanadaitstrade-markHIGHTIMESforthesaleofproductstothose
interestedinthemedicalandrecreationaluseofmarijuana.Itisalsotheownerin
Canadaofregistrationsforthetrade-markHIGHTIMESinassociationwith
magazinesandforthetrade-markHIGHTIMESinassociationwithvariousservices
includingthewholesale,retaildistributionandsaleofsmokingarticles,posters,
books,tins,ashtrays,shooterglasses,bottleopeners,moneyclips,mugs,card
holders,wristbandsandplayingcards.Thesetrade-markshavebeenusedin
Canadasinceatleastthe1980s.TheApplicantalsohasapendingapplicationin
Canadaforthetrade-markHIGHTIMESinassociationwithpre-recordedCDsand
pre-recordedDVDsfeaturingvideosaboutcannabis,withcasualwearandwith
variousservicesincludingfinancialandinvestmentconsultationservicesandthe
arrangementofeducationalandinstructionalseminarsandconferencesinthefieldof
cannabis.
AccordingtotheevidenceprovidedtotheCourt,theApplicant’sHIGHTIMES
magazinehasbecomeknownforhighqualityphotographyandcutting-edge
journalismcoveringawiderangeoftopics.Whilethedecriminalizationand
legalizationofmarijuanaisoneofthosetopics,themagazine’scoverageisnot
limitedtothatissue.InlightofitsassociationwiththeApplicant’svarious
endeavours,theHIGHTIMEStrade-markhasbecomewell-knowninwhattheCourt
describedinitsreasonsasthecounterculturecommunityinCanada.
©CIPS,2016.*BarryGamacheisamemberofROBIC,LLP,afirmoflawyers,patentandtrademarkagents.
PublishedintheNovember2016issueoftheWoldIntellectualPropertyReport.Publication064.312.
2
ConsciousConsumptionsInc.(“ConsciousConsumption
s”orthe“corporate
Respondent”)isanOntariocorporationthatoperatesaretailstoreknownasthe
HeadShopinToronto.ConsciousConsumptions’registereddirector,alsobelievedto
beitsowneranddirectingmind,istheindividualRespondent,LucelenePancini,
whiletheotherindividualRespondent,DimitriosHatzoglidisisdescribedas
ConsciousConsumptions’otherowner.TheHeadShopsellssmokingarticlesand
relatedmerchandiseandalsotargetsthecounterculturemarket.Sinceatleast2012,
ConsciousConsumptionshasoperateditsestablishmentinTorontoinassociation
withthetradenameHIGHTIMES.TheusebyConsciousConsumptionsofHIGH
TIMESwasnotlimitedtotheappearanceofthemarkandnameonexteriorstore
signagebutalsoextendedtoonlineadvertisinginanefforttopromoteitsbusiness.
TheproductssoldbyConsciousConsumptionsincludeanassortmentofsmoking
andcounterculturalgoods,forexampleglasssmokingpipesandbongs.Other
productssoldincludejewelryandclothing.
TheApplicantneverauthorizedthecorporateRespondent,noritsowners,toadopt
oruseanynamethatincludesthewords“HIGHTIMES”inassociationwiththeir
commercialactivities.WhiletheApplicantmadeseveralattemptstosettlethematter
sinceSeptember2015,theRespondentsdeclinedtocomplywiththeApplicant’s
requesttoceaseanyandalluseofHIGHTIMEStodistinguishtheirbusiness.
WhenitsoughtreliefbeforeCanada’sFederalCourt,theApplicantnotonlysuedthe
corporateRespondent,italsobroughtclaimsagainstMs.PanciniandMr.
Hatzoglidis.TheCourtthereforehadtodeterminewhethertheseindividual
RespondentswereliablefortheallegedinfringementoftheApplicant’strade-mark
rights.Inordertodecidewhetherindividualsarepersonallyliablefortheinfringement
ofthecompanyforwhichtheyactasdirectingminds,theCourtreferredtothe
FederalCourtofAppeal’sdecisioninMentmoreManufacturingCovNational
MerchandiseManufacturingCo,[1978]FCJNo521,atparagraph28,wherethetest
wasdescribedasanexaminationofthecircumstances“…fromwhichitisreasonable
toconcludethatthepurposeofthedirectororofficerwasnotthedirectionofthe
manufacturingandsellingactivityofthecompanyintheordinarycourseofhis
relationshiptoitbutthedeliberate,wilfulandknowingpursuitofacourseofconduct
thatwaslikelytoconstituteinfringementorreflectedanindifferencetotheriskofit.”
TheCourtnotedthatbothMs.PanciniandMr.Hatzoglidiswereservedwithnoticeof
theCourtproceedingsinitiatedbytheApplicant.Italsounderlinedeachindividual
Respondent’srolewithinthecorporateRespondent.
Intheend,theCourtexaminedalltherelevantcircumstancestodeterminewhether
theApplicanthadestablishedthatbothindividualRespondentsactedoutsidetheir
normaldutiesinthedirectionofthecorporationRespondent;inorderwords,ithadto
rulewhethertheApplicantprovidedclearevidenceofadeliberate,wilfulandknowing
pursuitofacourseofconductlikelytoconstituteinfringementorthatreflectsan
indifferencetoitsrisk.
3
TheCourtexaminedConsciousConsumptionscorporate
documentsalongwithits
socialmediapostingsthatclearlyestablishedthattheactivitiesofbothindividual
Respondentswerenotthelegitimateexerciseoftheircorporatedutiesasofficers,
directorsorcontrollingmindsofthecorporateRespondent.Accordingly,theCourt
foundtheindividualRespondentspersonallyliableforanyinfringingactivitiesthat
werecarriedoutinthiscase.
TheCourtthenproceededtoexaminetheissueofallegedinfringementperse.Was
theRespondents’useofHIGHTIMESconfusingwiththeApplicant’sregisteredmark
HIGHTIMESfromtheperspectiveofthe“casualconsumersomewhatinahurry”
whoseestheRespondents’tradenameortrade-mark,havingnomorethanan
imperfectrecollectionoftheApplicant’strade-mark?AccordingtotheCourt,that
personwouldbelikelytothinkthatbothparties’goodsandserviceswouldoriginate
fromthesamesource.TheCourt’sconclusionwasobviouslybasedonthefactthat
theRespondentshadusedthesametrade-markastheApplicant.Moreover,both
partiestargetedthecounterculturecommunity.Theevidencealsorevealedthatboth
partiessoldtheirwaresthroughtraditionalretailandonlinechannels.
Inadditiontotrade-markinfringement,theCourtconcludedthattheRespondent
passedofftheirbusinessandgoodsasbeingassociatedwiththoseoftheApplicant.
TheCourtfurtherdecidedthattheRespondentshadusedtheApplicant’sregistered
trade-marksHIGHTIMESandHIGHTIMESinamannerthatislikelytohavethe
effectofdepreciatingthevalueofthegoodwillattachingthereto,contraryto
subsection22(1)ofCanada’sTrade-marksAct.TheCourtbaseditsfindingonthe
lossofqualitycontrolovertheApplicant’smarksasaresultoftheunauthorizeduse
ofHIGHTIMESalongwiththelow-endqualityofthegoodsmarketedbythe
Respondents.Finally,noreasonwasprovidedbytheRespondentsfortheirchoiceof
theHIGHTIMEStrade-mark.
TheCourtaccordinglyissuedaninjunctionrestrainingtheusebytheRespondentsof
theApplicant’strade-marks.TheCourtalsoorderedtheRespondentstodeliverupor
destroyunderoathanygoodsorpackagingoranyothermaterialthatexhibitedthe
Applicant’strade-marks.TheRespondentswerealsojointlyandseverallyorderedto
paytheApplicantdamagesintheamountof$25,000.00alongwiththecostsofthe
Applicant’sapplicationsetat$10,000.00.
Thiscasehighlightstherisksforthedirectingmindsofacorporationthatisinvolved
inwhatcouldbeperceivedasthedeliberate,willfulandknowingpursuitofacourse
ofactionthatislikelytoconstitutetrade-markinfringement.Inthematterbeforethe
Court,theredidnotappeartobeevenaneffortonthepartoftheRespondentsto
adoptatrade-markthatcouldbedistinguishedfromtheApplicant’sregisteredmarks.
4
5
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