Tuesday, January 8, 2013

Driving Alternative Inc. v. Jarvis, Federal Court Trial Division, 5 December 2012

Tuesday, January 08, 2013

The Federal Court holds that KEYS PLEEZZ is confusing and infringes upon the plaintiff’s mark KEYS PLEASE, but reduces the amount of damages for lack of adequate evidence to support the damages requested by the plaintiff. 

This was an action for trademark infringement, passing off and depreciation of the plaintiff’s goodwill. The plaintiff registered the trademark KEYS PLEASE in 1997 in association with designated driving services. The plaintiff’s company advertises extensively in print and on the internet, and operates through franchises in four provinces.  In early 2012, the defendant registered the business name KEYS PLEEZZ and started offering and advertising the same services as the plaintiff in the Oshawa area.  

In the lead-up to the trial, the defendant repeatedly avoided service of the plaintiff’s documents and did not respond to two cease and desist letters. Nor did she file a statement of defense. 

The Federal Court held that the defendant’s trademark KEYS PLEEZZ did in fact cause confusion and infringe upon the plaintiff’s mark.  Although the defendant made a slight graphic amendment to the mark, from an auditory and connotational point of view, the marks were identical.

In determining whether the mark created confusion, the Court considered the five factors subscribed under subsection 6(5) of the Trademarks Act. It stated that ‘the defendant’s avoidance of service and its failure to respond to the cease and desist letter from the plaintiff, and more importantly, her deliberate advertisement in a Facebook page shows knowledge and deliberate intent to infringe and pass off.’

However, on the issue of damages the Court did not agree exactly with the plaintiff. The plaintiff had requested damages of $70,000, calculated on the basis of a franchise price of $32,000 and annual royalties of $38,000, assuming that the franchise would have minimum weekly sales of $5000. The plaintiff claimed that, as a result of the defendant’s operation, it was deprived of a business opportunity in the Oshawa area worth $70,000.  But the plaintiff did not provide any evidence to establish that a franchise in the Oshawa area would in fact generate $5000 per week, and it did not provide any evidence as to how much its existing franchises generated.  

As a result of the plaintiff’s failure to provide evidence to establish a franchise’s weekly revenue, and especially in view of the fact that two competitors already operated in the Oshawa area, the Court reduced the amount of the damages to $50,000, although it did not explain exactly how it reached at this amount. The damages awarded also included damages to the plaintiff’s goodwill.