No presumed damages in a passing off action, Federal Court of Canada Rules

N
OPRESUMEDDAMAGESINAPASSINGOFFACTION,FEDERALCOURTOF
CANADARULES

STELLASYRIANOS*
LEGERROBICRICHARD,
LLP
L
AWYERS,PATENT&TRADEMARKAGENTS
Inarecentdecision,theFederalCourtofCanadaconsideredanApplicant’srequest
forinjunctivereliefclaimingpassingoffofitsunregisteredtrade-mark
“PharmaCommunications”inlightofRespondent’suseofitsbusinessname
“PharmaComm”,contrarytosubsection7(b)oftheTrade-marksAct
[PharmacommunicationsHoldingsInc.v.AvenciaInternationalInc.,2008FC8286
(T-2278-06)July2,2008].
Background
TheApplicant,PharmacommunicationsHoldingsInc.,incorporatedsinceSeptember
26,1995,hadlicenseduseofitsunregisteredtrade-mark“PharmaCommunications”
toarelatedentity,PGI,alsoincorporatedsince1995.TheApplicantalsoallegedthe
trade-mark“PharmaCommunications”hadbeenusedbyitspredecessorcorporations
sinceDecember1982andthatthetrade-markhasalwaysbeenusedinassociation
withtheprovisionofmarketing,advertisingandrelatedconsultingservicestothe
pharmaceuticalindustryinCanada.AsforPGI,accordingtotheApplicant,itisa
marketingcompanyforpharmaceuticalcompaniesinCanada,anichemarketof
approximately100companies.
TheRespondent,AvenciaInternationalInc.wasincorporatedonJanuary20,2004
andregisteredthebusinessname“PharmaComm”onDecember2,2004andsince
then,hasbeenoperatingunderthatname.Avenciasubmitsitisanadvertising
agencywhichincludesbrandconsultation,mediaadvertising,productpromotionand
salestechniquesservicestoitsclients.
AccordingtoAvencia,PGIisadistributioncompany.Despitethedifferent
characterizationsbythepartiesofPGI’sactivities,theyseemedtoagreethatPGI’s
businessincludesthedisseminationofinformationaboutitsclient’sproductsto
healthcareworkersbymeansofdirectmarketingaswellasacall-centre.Theparties



















































©CIPS,2008.*Lawyer,StellaSyrianosisamemberofLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirmof
lawyers,andpatentandtrademarkagents.PublishedintheAugust2008issueoftheWorld
IntellectualPropertyReport.Publication142.219.

2
alsoseemtoagreethatPGIgathersdataontheprescribingneedsandpracticesof
medicalpractitionerswhichitmakesavailabletoitsclientsviaaspecificwebsite.
TheIssue
TheCourtonlydealtwiththeissueofwhetherornotAvenciawasliableforstatutory
passingoffundersection7(b)oftheTrade-MarksActasconcernedontheonehand,
itsuseofthebusinessnamePharmaCommandontheother,Applicant’suseofthe
trade-mark“PharmaCommunications”.
Componentsofapassingoffaction
TheFederalCourtconsideredthecriteriatobeestablishedinapassingoffaction,
providedthataplaintifffirstestablishesitsrighttoavalidandenforceabletrade-mark:
1.agoodwillorreputationattachedtoplaintiffsgoodsorservices;
2.deceptiontothepublicduetoamisrepresentation;
3.theplaintiffhasorislikelytohavesuffereddamages.
Inanalysingthecriteria,theCourtfirmlystatedthatitwasunnecessarytoconsiderif
theApplicanthadavalidandenforceabletrade-marknorifthefirsttwoelementstoa
passingoffactionwedemonstratedbecausetheApplicantclearlyfailedtomeetthe
thirdcriteriaregardingactualorpotentialdamages.
Onthematterofthisthirdelement,theFederalCourtreferredtotheFederalCourtof
AppealdecisioninBMWCanadaInc.v.NissanCanadaInc.,2007FCA255(CanLII),
2007FCA255atpara.35,60C.P.R.(4th)181,whereintheFederalCourtofAppeal
statedthatactualorpotentialdamagescannotbepresumedandtheremustbe
evidenceprovingsame.TheFederalCourtadditionallymadereferencetoanother
FederalCourtofAppealdecision:RemoImportsLtd.v.JaguarCarsLtd.,2007FCA
258(CanLII),2007FCA258atpara.90,367N.R.177).
InrejectingtheApplication,theFederalCourtheldthattheApplicantwas
unsuccessfulinestablishingtheconditionsforpassingoffnotonlybecauseithad
madenomentionofactualorpotentialdamagesinitsNoticeofApplicationnorinits
MemorandumofFactandLawbutalsobecauseoftheabsenceofanyevidencewith
regardtopotentialoractualdamagestotheApplicant.
Asforinjunctiverelief,inlightofitsfindingsonpassingoff,theFederalCourtdidnot
dealwiththisaspectbutitdidbrieflymentiontheconditionsforsuchreliefhadnot
beenmet.

3
Conclusion
Thiscaseisahelpfulreminderofthefundamentalcriteriarequiredinapassingoff
action.FortheseasonedIPpractitioner,theCourtsdecisionthatpassingoffhadnot
occurredillustratesonceagainthedifficultiesencounteredinpassingoffcases,
particularlyasconcernstheelementofactualorpotentialdamages.Therefore,itis
importanttoweighaplaintiff’soptionspriortotakingsuchanactionascareful
considerationmustbegiventothissubstantiverequirement.Caselawdictatesthat
litigantsoftenfaceanuphillbattleintheirquestforsuchreliefandwithoutpresumed
actualorpotentialdamagesapplicabletosuchcases,itappearsthatclimbmay
continuetobesomewhatmorechallenging.

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