Date: 20000602
Docket: T-238-00
BETWEEN:
WEIGHT WATCHERS INTERNATIONAL, INC.
Appellant
- and -
VALE PRINTING LIMITED, and
THE CANADIAN INSTITUTE OF CULTURAL AFFAIRS
carrying on business as ICA CANADA
Respondents
REASONS FOR ORDER
HENEGHAN J.
[1] This is a motion by Weight Watchers, Inc. (the "Plaintiff") to add OntarioStar Aircraft Company Incorporated ("OntarioStar") and Manfred Humphries ("Humphries") as Defendants. In this motion, the Plaintiff also seeks an interim and interlocutory injunction restraining OntarioStar and Humphries from transferring any rights in the wwcompanion.net and wwcompanion.com websites to a third party and violating the Plaintiff"s trade-mark rights by using the marks "WEIGHT WATCHERS" or "WW". The Plaintiff further seeks an order requiring OntarioStar and Humphries to preserve all material relating to the wwcompanion.net website or to the domain names, wwcompanion.net and wwcompanion.com.
[2] This motion arises in the context of an action for trade-mark infringement, statutory passing-off and depreciation of goodwill stemming from ICA CANADA"s alleged display of the trade-mark WEIGHT WATCHERS and the term "WW" on the internet websites with the domain names, wwcompanion.net and wwcompanion.com. The Plaintiff claims that ICA CANADA no longer controls the websites or owns the domain names for the websites. It is for these reasons that the Plaintiff seeks to add OntarioStar and Humphries as Defendants, and why the Plaintiff seeks an interim and interlocutory injunction against OntarioStar and Humphries.
[3] Prior to the transfer of the websites from ICA CANADA to OntarioStar and Humphries, the Plaintiff wrote a demand letter to ICA CANADA. In a letter addressed to the Plaintiff and dated November 29, 1999, counsel for ICA CANADA responded by indicating, inter alia, that they had instructed ICA CANADA to cease and desist from using the WEIGHT WATCHERS trade-mark immediately and that they had been advised by ICA CANADA that the ww.companion.net website would be shut down by November 30, 1999. The affidavit of Mark L. Robbins indicates that, as of February 15, 2000, the ww.companion.net website had not been terminated but that explicit references to the Plaintiff"s trade-mark had been discontinued.
[4] The Plaintiff was satisfied with the above situation pending the outcome of the litigation. However, the Plaintiff now brings this motion because, as a result of the transfer of ownership and control of the websites to OntarioStar and Humphries, the Plaintiff fears they will display the WEIGHT WATCHERS trade-mark when they recommence operation of the website. The Plaintiff also fears that the transfer of ownership of the website and the domain names was executed in order to avoid the effect of any court order to be issued against ICA CANADA in the action initiated against ICA CANADA for trade-mark infringement, passing-off and depreciation of goodwill.
[5] The Plaintiff claims that since the time of the transfer on January 27, 2000, OntarioStar and Humprhies have refused to undertake not to commence the acts which the Plaintiff contends violate its trade-mark rights. OntarioStar and Humphries also refuse to undertake not to transfer ownership of the website and the domain names to another party.
Amendments to add new Defendants
[6] Rule 104 (1)(b) of the Federal Court Rules, 1998 stipulates:
| 104. (1) At any time, the Court may (b) order that a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the proceeding maybe effectually and completely determined be added as a party, but no person shall be added as a plaintiff or applicant without his or her consent, signified in writing or in such other manner as the Court may order. |
104. (1) La Cour peut, à tout moment, ordonner : b) que soit constituée comme partie à l'instance toute personne qui aurait dû l'être ou dont la présence devant la Cour est nécessaire pour assurer une instruction complète et le règlement des questions en litige dans l'instance; toutefois, nul ne peut être constitué codemandeur sans son consentement, lequel est notifié par écrit ou de telle autre manière que la Cour ordonne. |
[7] The first issue to be addressed is the Plaintiff"s motion to amend the pleadings to add both OntarioStar and Humphries as Defendants. On January 27, 2000, ICA CANADA and OntarioStar, through its principal Humphries, executed an agreement to transfer ownership of the wwcompanion.net website and the domain names wwcompanion.net and wwcompanion.com to OntarioStar. Based on this transfer it would seem logical to add OntarioStar and Humphries as parties given that their presence is necessary to ensure that the matters in dispute are effectually and completely determined.
[8] With respect to the motion for an interim and interlocutory injunction, the Plaintiff is seeking an interlocutory injunction restraining OntarioStar and Humphries from:
| i) transferring any rights to the wwcompanion.net website or to the domain names wwcompanion.net or wwcompanion.com to a third party: |
| ii) using or displaying, without the authority of the Plaintiff, the trade marks "WEIGHT WATCHERS" or "WW". |
| iii) use of the domain names wwcompanion.net and wwcompanion.com; |
[9] In order to understand the present motion, it is important to understand the nature of the companion site. In his affidavit, Humphries describes the companion website as a website providing a world-wide forum for discussion and mutual support for individuals with interests in weight loss or control. Humphries explains that the companion content is created by and exchanged between subscribers to companion. However, Humphries also states that there is access to companion for individuals who are not subscribers.
[10] I will first deal with the availability of an interim and interlocutory injunction restraining OntarioStar and Humphries from using the domain names wwcompanion.net and wwcompanion.com. Based on the evidence before me, I cannot conclude that the term "WW" is a trade-mark of the Plaintiff. Without proof of a right in the term "WW", there is no basis on which I could grant an interim and interlocutory injunction restraining the Defendants from using the domain names ww.companion.net and wwcompanion.com.
[11] Nevertheless there is evidence on which I can conclude that WEIGHT WATCHERS is a registered trade-mark of the Plaintiff. I will next look at the availability of an interim and interlocutory injunction relating to the transfer of rights in the websites or in the domain names to a third party as well as an interlocutory injunction relating to the use and display of the trade-mark WEIGHT WATCHERS.
[12] It appears that as a consequence of the transfer of the websites to OntarioStar and Humphries, counsel for the Plaintiff has argued this whole motion for interim and interlocutory injunction under Rule 377 of the Federal Court Rules, 1998. Rule 377 provides for the preservation of property that is the subject-matter of a proceeding. Rule 377 states:
| 377. (1) On motion, the Court may make an order for the custody or preservation of property that is, or will be, the subject-matter of a proceeding or as to which a question may arise therein. |
377. (1) La Cour peut, sur requête, rendre une ordonnance pour la garde ou la conservation de biens qui font ou feront l'objet d'une instance ou au sujet desquels une question peut y être soulevée. |
[13] In applying Rule 377, it is necessary to have regard to the test established for interlocutory injunctions which are governed by Rule 373 of the Federal Court Rules. In Perini America Inc. et al v. Alberto Consani North America Inc. et al. (1992), 57 F.T.R. 139 (T.D.), Justice Rothstein wrote:
| The law respecting applications under Rule 470 has been outlined in Societe pour l'administration du Droit de Reproduction Mecanique des auteurs, Compositeurs et Editeurs (S.D.R.M.) v. Trans World Record Corp. (1975), 39 C.P.R. (2d) 66, [1977] 2 F.C. 602, 17 N.R. 162 (C.A.) where at p. 67 Pratte J. states: |
| It should be borne in mind that Rule 470, which is in this respect similar to the Rules dealing with interlocutory injunctions, is a provision the sole purpose of which is to maintain the status quo by ensuring the preservation of property that is the subject-matter of an action. |
| This being the case it is necessary to have regard to those tests that have been established for interlocutory injunctions. The tests were originally formulated in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.), and are now well-known. The tests were adopted by the Supreme Court of Canada in Metropolitan Stores (M.T.S.) Ltd. v. Manitoba Food & Commercial Workers, Local 832 (1987), 38 D.L.R. (4th) 321, [1987] 1 S.C.R. 110, 87 C.L.L.C. 14,015 sub nom. Manitoba (A.-G.) v. Metropolitan Stores (M.T.S.) Ltd. They are: |
| (a) has the applicant demonstrated a prima facie case, or at least a serious question to be tried; |
| (b) has the applicant demonstrated that unless the injunction is granted, it will suffer irreparable harm that is not susceptible to, or is difficult to compensate in damages, and |
| (c) with which party does the balance of convenience lie. |
| In Turbo Resources Ltd. v. Petro Canada Inc. (1989), 24 C.P.R. (3d) 1, [1989] 2 F.C. 451, 22 C.I.P.R. 172, the Federal Court of Appeal found that with regard to the first test, the threshold of "a serious question to be tried" is the appropriate standard in intellectual property cases. In Imperial Chemical Industries PLC v. Apotex Inc. (1989), 27 C.P.R. (3d) 345, [1990] 1 F.C. 221, 26 C.I.P.R. 1, further guidance as to the nature of this standard was provided by the Federal Court of Appeal. Heald J. A. writes at pp. 348-9: |
| All that is required at this juncture, is that the court be satisfied that: "the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried." I agree particularly with the statement by Lord Diplock (p. 407) that: [page63] |
| "It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at trial."1 |
[14] Therefore, in light of the above, the question which must be answered is whether the transfer of rights in the websites and the domain names to a third party meets the requirements of the three part test set out in Perini America, supra.
The Domain Names
[15] There is no evidence on which this Court could order OntarioStar and Humphries not to transfer the domain names to a third party. The domain names wwcompanion.net and wwcompanion.com in themselves do not violate the Plaintiff"s WEIGHT WATCHERS trade-mark. Moreover, for the purposes of this motion, the Plaintiff has not submitted any evidence on which I could conclude that the Plaintiff"s have a right over the term "WW" or that "WW" has acquired a secondary meaning. Accordingly, the mere fact that the domain names contain the term "WW" is insufficient for me to grant the order impeding OntarioStar and Humphries from transferring the domain names.
The Websites
[16] The Plaintiff seeks an interim and interlocutory order enjoining the OntarioStar and Humphries from transferring any rights in the wwcompanion.net and the wwcompanion.com websites to a third party. As result of the fact that the evidence submitted in support of this motion concentrates solely on the website wwcompanion.net, my analysis and Order will be limited to the website wwcomapanion.net.
[17] The Plaintiff submits that there is a serious issue to be tried that is neither frivolous nor vexatious. The Plaintiff states that the serious issue stems from the unauthorized use and display of the WEIGHT WATCHERS trade-mark on the wwcompanion.net website. The Plaintiff urges that the website, although not controlled by the Plaintiff, purported to give special privileges to "weight watchers members". The Plaintiff relies on sections of 7(b), 19, and 20 of the Trade-marks Act R.S.C. 1985, c. T-13 as amended. These sections read as follows:
| 7. No person shall (b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another; |
7. Nul ne peut : b) appeler l'attention du public sur ses marchandises, ses services ou son entreprise de manière à causer ou à vraisemblablement causer de la confusion au Canada, lorsqu'il a commencé à y appeler ainsi l'attention, entre ses marchandises, ses services ou son entreprise et ceux d'un autre; |
| 19. Subject to sections 21, 32 and 67, the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services. |
19. Sous réserve des articles 21, 32 et 67, l'enregistrement d'une marque de commerce à l'égard de marchandises ou services, sauf si son invalidité est démontrée, donne au propriétaire le droit exclusif à l'emploi de celle-ci, dans tout le Canada, en ce qui concerne ces marchandises ou services. |
| 20. (1) The right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name, but no registration of a trade-mark prevents a person from making (a) any bona fide use of his personal name as a trade-name, or (b) any bona fide use, other than as a trade-mark, (i) of the geographical name of his place of business, or (ii) of any accurate description of the character or quality of his wares or services, in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade-mark. |
20. (1) Le droit du propriétaire d'une marque de commerce déposée à l'emploi exclusif de cette dernière est réputé être violé par une personne non admise à l'employer selon la présente loi et qui vend, distribue ou annonce des marchandises ou services en liaison avec une marque de commerce ou un nom commercial créant de la confusion. Toutefois, aucun enregistrement d'une marque de commerce ne peut empêcher une personne : a) d'utiliser de bonne foi son nom personnel comme nom commercial; b) d'employer de bonne foi, autrement qu'à titre de marque de commerce : (i) soit le nom géographique de son siège d'affaires, (ii) soit toute description exacte du genre ou de la qualité de ses marchandises ou services, d'une manière non susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à la marque de commerce. |
[18] Following a careful review of the evidence demonstrating the state of the website on or around November 22 and 23, 1999, I am satisfied that there is a serious issue to be tried.
[19] With respect to irreparable harm, the Plaintiff has argued this application quia timet. The Plaintiff submits that it will suffer irreparable harm if the rights to the website are transferred to a third party, thereby avoiding any order this Court might grant in the main action initiated by the Plaintiff. According to the Plaintiff, damages would not prove to be an effective remedy if the website is transferred in such a way as to evade an order of this Court.
[20] A transfer of the website to a third party, having the practical result of avoiding any order this Court might grant against the Defendants, does, in my opinion, constitute irreparable harm.
[21] Finally, the Plaintiff states that in assessing the balance of convenience, when other factors appear to be evenly balanced, it is prudent to take such measures as will preserve the status quo. (See:Perini America, supra.) I agree with the Plaintiff. Thus, it is my opinion that the balance of convenience favours the Plaintiff.
[22] I am satisfied that the Plaintiff has fulfilled the three prongs of the three-part test. ICA CANADA has transferred the rights in the website to OntarioStar and Humphries. Another transfer could effectively impede the Plaintiff from obtaining a permanent injunction.
[23] Accordingly, for the above reasons, an order shall issue directing that the Defendants, ICA CANADA, OntarioStar and Humphries, shall not transfer or assign any of its interests in the website wwcompanion.net or its contents to a third party pending the resolution of the main action initiated by the Plaintiff against the Defendants. It is also ordered that the Defendants produce for the Plaintiff in hard copies and digital copies, all evidence, regardless of form, relating to their alleged use of the Plaintiff"s trade-mark WEIGHT WATCHERS on the wwcompanion.net website. A copy shall also be deposited with the Registry of this Court.
[24] The final issue to be addressed is whether the Plaintiff should be granted an interlocutory injunction as a result of OntarioStar and Humphries unauthorized use or display of the Plaintiff"s trade-mark WEIGHT WATCHERS. Although the Plaintiff has argued this issue under Rule 377, it is my opinion that it is more appropriate to determine this issue under Rule 373. Rule 373 is the appropriate rule for seeking an interlocutory injunction to enjoin OntarioStar and Humphries from any alleged unauthorised use and display of the WEIGHT WATCHERS trade-mark. I will not address any alleged use or display of the term "WW" because, as noted earlier, there is no evidence on which I could find that the Plaintiff has any trade-mark rights in the term "WW".
[25] Rule 373 reads:
| 373. (1) On motion, a judge may grant an interlocutory injunction. (2) Unless a judge orders otherwise, a party bringing amotion for an interlocutory injunction shall undertake to abide by any order concerning damages caused by the granting or extension of the injunction. |
373. (1) Un juge peut accorder une injonction interlocutoire sur requête. (2) Sauf ordonnance contraire du juge, la partie qui présente une requête pour l'obtention d'une injonction interlocutoir s'engage à se conformer à toute ordonnance concernant les dommages-intérêts découlant de la délivrance ou de la prolongation de l'injonction. |
| (4) A judge may order that any evidence submitted at the hearing of a motion for an interlocutory injunction shall be considered as evidence submitted at the hearing of the proceeding. |
(4) Le juge peut ordonner que la preuve présentée à l'audition de la requête soit considérée comme une preuve présentée à l'instruction de l'instance. |
[26] The three part test first set out in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.) is the test which is to be applied in determining whether an interlocutory injunction should be granted. This test examines whether there is a serious issue to be tried, whether the applicant will suffer irreparable harm and finally, the balance of convenience is assessed is determining whether an interlocutory injunction should be granted. (See: Manitoba (A.G.) v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R 110 and RJR-Macdonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311).
[27] It is necessary to look at the contents of the webpage itself to determine if there is a serious issue to be tried. ICA CANADA transferred "ownership and control" of the website to OntarioStar and Humphries.
[28] Based on the evidence submitted, it appears that on or around November 22 and 23, 1999, the wwcompanion.net webpage did contain some references to the WEIGHT WATCHERS trade-mark. However, from the evidence submitted, it appears that on February 15, 2000, a date which is subsequent to the transfer from ICA CANADA to OntarioStar and Humphries, a visitor to this same website would find the following message:
| Companion cannot register new subscribers at this time dur to temporary technical difficulties. Please leave us your name and eMail address and we will contact you when registration is once again available.2 |
There is no reference to the trade mark WEIGHT WATCHERS.
[29] Given that the current owners of the website wwcompanion.net have not operated the website since the transfer, it is impossible to determine if the contents of the website raise a serious issue to be tried. All that can be said at this time is that there is the potential for a serious issue to be tried, given that OntarioStar and Humphries could resume operation of the website as it was on November 22 and 23, 1999.
[30] Accordingly, based on the evidence before me and for the purposes of this motion, I have determined that there is no serious issue to be tried with regard to OntarioStar"s and Humphries" alleged unauthorized use and display of the trade mark WEIGHT WATCHERS.
[31] The motion for an interim and interlocutory injunction is granted in part in accordance with these reasons.
| "E. Heneghan" |
| J.F.C.C. |
OTTAWA, Ontario
June 2, 2000
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