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.

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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.

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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.

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intellectuelleetdestechnologiesdel’informationetdescommunications
(incluantlesservicesd’agentsdebrevetsetdemarquesdecommerce)
demêmequedesservicesjuridiques.

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utilitaires;marquesdecommerce,marquesdecertificationetappellations
d’origine;droitsd’auteur,propriétélittéraireetartistique,droitsvoisinsetde
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pharmaceutiquesetobtentionsvégétales;secretsdecommerce,know-howet
concurrence;licences,franchisesettransfertsdetechnologies;commerce
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agroupoflawyersandofpatentandtrademarkagentsdedicatedsince1892to
theprotectionandthevalorizationofallfieldsofintellectualproperty:patents,
industrialdesignsandutilitypatents;trademarks,certificationmarksand
indicationsoforigin;copyrightandentertainmentlaw,artistsandperformers,
neighbouringrights;computer,softwareandintegratedcircuits;
biotechnologies,pharmaceuticalsandplantbreeders;tradesecrets,know-
how,competitionandanti-trust;licensing,franchisingandtechnology
transfers;e-commerce,distributionandbusinesslaw;marketing,publicityand
labelling;prosecutionlitigationandarbitration;duediligence.
®/MD

COPYRIGHTER
TM/MC

IDEASLIVEHERE
®/MD

ILATOUTDEMÊMEFALLUL’INVENTER!
®/MD

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NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
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PATENTER
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