Ottawa, Ontario, June 5, 2006
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
and
REASONS FOR ORDER AND ORDER
[1] This is a motion for an interlocutory injunction to prevent the Defendant from using the mark AVAIA in conjunction with a horse show in the Niagara area of Ontario. The motion is phrased as seeking an order to prevent further infringement of the Plaintiff's trade marks. Other relief was requested which is not relevant to this decision. This motion is made in the context of an action to prevent the use of the name and mark AVAIA because of its confusion with the trade mark and wares/services of CAVALIA.
[2] It is the Plaintiff's contention that the trade mark and name CAVALIA is a well-known name in the circus-type horse show business and that millions have been invested in the creation of the goodwill of the trade mark. The CAVALIA show had been seen by one of the principals of the Defendant in late 2005. The Defendant then allegedly essentially copied the name, style and horse show performance from CAVALIA and decided to put on its first show in the Niagara area, where the Plaintiff had intended to do the same. The extent of the copying went so far as to engage the same public relations firm as had been used by CAVALIA.
II. Facts
[3] The Plaintiff filed for the trade mark CAVALIA on September 25, 2003 and the trade mark was registered on February 15, 2005 in respect to entertainment performances comprised of artists, horses, music and songs.
[4] The mark CAVALIA had been used previously by another unrelated organization. The mark was abandoned in October 2002. While that mark was not in respect to an artistic equestrian show, it was in relation to equestrian equipment.
[5] The Plaintiff claims that it has invested significant time, energy and financial resources since 2002 in developing and promoting the CAVALIA trade mark and the artistic shows with which it is associated. Most of the advertising was centred in the Montreal and southern Ontario areas.
[6] In late March 2006, the Plaintiff learned that the Defendant would be putting on an artistic show over a six-month period in Ontario's Niagara region using the name AVAIA. The name of the show is actually CIRQUE NIAGARA's AVAIA.
[7] Despite warnings from the Plaintiff that the show would infringe the CAVALIA trade mark, the Defendant proceeded with the show. The AVAIA show opened on May 20, 2006 in the Niagara Fallsarea.
[8] Sometime in September or October 2005, the President and CEO of the Defendant became aware of the CAVALIA show through his Russian partners. In November 2005, the Defendant's President saw the CAVALIA show in Washington, D.C. He admitted that the name AVAIA was chosen approximately one month later.
[9] Shortly thereafter, the Defendant retained a public relations firm to develop and promote the show. Before commencing the AVAIA operation, the Defendant became aware that the public relations company was the same one that was retained years earlier by the Plaintiff for promotion of its Toronto CAVALIA show.
[10] On March 9, 2006 the Defendant filed a trade mark application for the following mark:
[11] The Defendant says that it independently developed the name for its circus and its show. That process is said to have begun in August 2005. The final result of the process was a combination of the Sanskrit word AVATA, meaning spring water as source (said to be appropriate for the Niagara Falls area) and the Latin word CAIA, meaning to rejoice or celebrate. The veracity of this description of the source of the name has yet to be tested.
[12] The Defendant claims that it then decided that the brand would be CIRQUE NIAGARA, the show would be called AVAIA, and the Defendant has been so advertising the show in that manner.
[13] The Defendant says that it has spent millions of dollars to produce and promote its CIRQUE NIAGARA's AVAIA show. It alleges that it has taken a substantial risk to develop a show at Niagara Falls because the area was not viewed as a good location for these types of circus shows - the Cirque du Soleil show in the mid-1980s was supposedly considered a failure.
[14] The Plaintiff, on the other hand, says that early in 2006 it had considered putting on the CAVALIA show in the Niagara region. Toward this end, the Plaintiff retained a business advisor and, through this advisor, had made inquiries about a Niagara location. As a result of the AVAIA show, the Plaintiff says it is impossible to open its show given the presence of the AVAIA show in the same area.
[15] The Plaintiff says that the unregistered mark AVAIA is confusing with CAVALIA by virtue of their similar sounds, number of syllables, letters, lettering, colours and style.
[16] The Plaintiff alleges that there is confusion in the public already. In that regard, the Plaintiff put in evidence the affidavit of its business advisor, Steven Nowack, which contained hearsay evidence of confusion and the affidavit of an individual Chantal Patenaude. The Plaintiff also put in the affidavit of a member of its counsel's firm which opined on confusion.
[17] In Voltige Inc. v. Cirque X Inc., 2006 FC 686, I struck the opinion evidence and pursuant to Rule 81(2), drew an adverse inference from the Plaintiff's failure in the Nowack affidavit to put in direct evidence of confusion.
III. Analysis
[18] The tripartite test for injunctive relief is well-known to the Court (RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385)
IV. Serious Issue
[19] The Plaintiff says that it has a strong case of clear and deliberate infringement of its registered trade mark, and a breach of the Trade-Marks Act, as well as strong evidence of actual confusion. It argues that the strength of its case in this regard is sufficient to lessen the effects of any weaknesses in the areas of irreparable harm and balance of convenience.
[20] While Justice Nordheimer's conclusion in Boehringer Ingelheim (Canada) Ltd. v. Pharmacia Canada Inc., [2001] O.J. No. 1911 that the three-prong test is not necessarily three separate watertight compartments may be correct, the party requesting must still make a substantial showing in each of the three factors.
[21] On this issue of "serious issue", the substance of the claim, breach of trade mark rights and confusion is a matter to be left to the trial judge. Such questions of confusion by virtue of similar sound cannot be adjudicated at this stage as much depends on the evidence of the pronunciation of the two words. The similarities in appearance are obvious; as are the distinctions in appearance. However, I do find that for purposes of this proceeding only, the Plaintiff has established a serious issue because of the low threshold for this part of the three-prong test.
[22] Even if the Plaintiff's case is, at this stage, stronger than the Defendant's on these legal issues, the Plaintiff must still address in a substantive manner the issue of irreparable harm.
V. Irreparable Harm
[23] In this case, the Plaintiff's contention of harm is generally based on the existence or probability of confusion in the market and the loss through diffusion and other such undefined concepts of its goodwill in the trade marks. I understand "diffusion" to be the scattering of the goodwill in the sense of its diminution. The precise concept has yet to be explained.
[24] The test for establishing irreparable harm in a trade mark case is referred to in Centre Ice Ltd. v. National Hockey League (1994), 53 CPR (3d) 34 (F.C.A.). The Federal Court of Appeal at page 53 of the decision set forth the following propositions of law:
· a finding of confusion between competing products does not necessarily lead to a loss of goodwill;
· the existence of confusion does not mean that there has necessarily been irreparable harm; and
· a loss of goodwill does not per se establish that the victim of the loss suffered irreparable harm.
[25] As to the existence of confusion, the Court has already found that the quality of the evidence is extremely compromised by its hearsay quality. Other than the one instance of confusion, there is no other objective and direct evidence of confusion or likelihood of confusion. The one instance of alleged confusion is insufficient to establish a broader basis for a finding of confusion. (ITV Technologies, Inc. v. WIC Television Ltd. (2005), 38 C.P.R. (4th) 481)
[26] The only evidence of harm is that of the Plaintiff's principal affiant in which he largely repeats the bold allegations of loss contained in the Statement of Claim.
[27] It is recognized that loss of good will and damage to a trade mark's value is something of a speculative exercise, at this early stage of the alleged infringement, as it attempts to address future events of loss. However, that recognition does not absolve a party from putting forward a reasonable and objective basis for present and future types of loss.
[28] In this case, the Plaintiff has put forward no evidence as to the strength of its brand, or as to its nature and scope, or its presence in the public. Yet its evidence is that before it decides to put on a show or select a location, it does research and performs market analysis. No such evidence was put before the Court.
[29] To satisfy the test of irreparable harm, there must be specific evidence that links the confusion to a loss that is not compensable by damages. There is no such link or loss established on this motion.
[30] The Plaintiff has put on shows in nine U.S. cities and three Canadian cities (Shawinigan, Montreal and Toronto). It says that the Niagara Falls area is a good market because it draws on both Canadian and U.S. markets. Given this experience with Canadian and U.S.shows (and hence "markets"), one would have thought that a sophisticated litigant should have been able to provide the Court with an indication of the nature and type (even quality) of loss based upon historical experience. One would have expected some analysis of the circumstances demonstrating that the loss is not reasonably calculable. This would have given the Court some degree of confidence that the kind of loss claimed would occur and could not be calculated.
VI. Balance of Convenience
[31] There is no evidence of the Plaintiff's market presence in the Niagara region except that it advertised in the area over a year ago. There is no evidence of any loss in the other market areas, in which the Plaintiff has been in the past, which would arise from the Defendant's AVAIA show.
[32] On the other hand, the Defendant has set up and is operating in the Niagara Falls area, and only in the Niagara Falls area. An injunction would have a direct effect on it; the absence of an injunction would have only a speculative effect on the Plaintiff.
VII. Conclusion
[33] While the Plaintiff has established that it has raised a serious issue - at least the argument in favour of the potential for confusion is clear - it fails in this motion for injunction. It cannot adequately show that it will be (or even has the likelihood of) suffering irreparable harm. It cannot show that the balance of convenience is in its favour.
[34] For these reasons, this motion will be dismissed. The Defendant will have its costs of the motion forthwith.
ORDER
IT IS ORDERED THATthis motion will be dismissed. The Defendant will have its costs of the motion forthwith.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-830-06
STYLE OF CAUSE: VOLTIGE INC.
and
CIRQUE X INC.
PLACE OF HEARING: Toronto, Ontario
AND ORDER: Phelan J.
APPEARANCES:
| Ms. Julie Thorburn Ms. Emily Larose
|
|
| Mr. Henry Lue Ms. Sangeetha Punniyamoorthy
|
SOLICITORS OF RECORD:
| CASSELS BROOK & BLACKWELL LLP Barristers & Solicitors Toronto, Ontario
|
|
| DIMOCK STRATTON LLP Barristers & Solicitors Toronto, Ontario
|