Date: 20050307
Docket: T-1760-04
Citation: 2005 FC 325
Ottawa, Ontario, this 7th day of March, 2005
Present: THE HONOURABLE MR. JUSTICE O'REILLY
BETWEEN:
ADVANTAGE CAR & TRUCK RENTALS
Plaintiff
and
1611864 ONTARIO INC. o/a RENT FOR LESS
and ADVANTAGE RENT-A-CAR, INC.
Defendants
AND BETWEEN:
ADVANTAGE RENT-A-CAR, INC.
Plaintiff by Counterclaim
and
ADVANTAGE CAR & TRUCK RENTALS
Defendant by Counterclaim
REASONS FOR ORDER AND ORDER
[1] The plaintiff, Advantage Car and Truck Rentals, has begun an action under the Trade-marks Act, R.S.C. 1985, c. T-13 against the defendant Advantage Rent-A-Car, a large U.S. company that operates in Toronto through its affiliate, the defendant Rent for Less. The plaintiff asks the Court to issue an injunction preventing the defendants from using the name "Advantage" pending trial.
[2] I have found that the three-part test for an injunction has not been made out by the plaintiff and, therefore, must dismiss this application.
I. Issues
1. Does the Court have jurisdiction to issue an interlocutory injunction preventing the holder of a registered trade-mark from using its mark?
2. Has the plaintiff satisfied the test for an injunction?
[3] The defendants raised a third issue as to whether the plaintiff was disentitled to equitable relief because of allegedly discreditable conduct. Because of my conclusion on the second issue, it is unnecessary for me to address this point.
II. Analysis
1. Does the Court have jurisdiction to issue an interlocutory injunction preventing the holder of a registered trade-mark from using its mark?
[4] The defendant Advantage Rent-A-Car registered its trade-mark in 1995. The plaintiff once held a trade-mark for "Advantage Leasing" but failed to renew it. However, it has been carrying on business in Ontario under the name "Advantage Car and Truck Rentals" since 1991.
[5] The defendant argues that the Trade-marks Act gives it a clear right to use its trade-mark until such time as the mark is declared invalid. Given that the Court cannot rule on the validity of a trade-mark on an application for an injunction, the Court, according to the defendant, lacks any authority to enjoin use of a registered mark. Indeed, the defendant says there is no precedent for an injunction being issued under these circumstances.
[6] Section 19 of the Act provides:
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19. ...[T]he 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.
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19. ...[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. |
[7] Clearly, the Act contains a powerful expression of the rights of holders of registered marks (see, for example, Molson Canada v. Oland Breweries Ltd. (2002), 19 C.P.R. (4th) 201 (Ont. C.A.), aff'g (2001) 11 C.P.R. (4th) 199). But can the Act be read as preventing the Court from enjoining the use of a registered mark when the validity of the mark is under attack? In my view, no.
[8] An applicant for an injunction must show that (a) there is a serious legal issue to be tried; (b) there will be irreparable harm done to the applicant's interests if the injunction is not granted and (c) the applicant will suffer greater harm than the respondent: RJR-MacDonald v. Canada (Attorney General), [1994] 1 S.C.R. 311.
[9] To accept the defendants' argument would be to acknowledge, in effect, that trade-mark holders are immune from injunctions because the Act protects their rights until the mark has been definitively declared invalid. To my mind, this proposition simultaneously constricts the Court's powers to issue injunctions too greatly and broadens the protection provided by the Act too far.
[10] Generally speaking, the Court will be wary of interfering with the rights of a trade-mark holder on an injunction application. Indeed, the same cautious approach would apply to other kinds of proprietary rights. But these considerations can be accommodated within the well-established criteria for injunctive relief. According to those criteria, the Court must make a preliminary assessment of the strength of the applicant's case against the trade-mark holder and evaluate the harm to the parties' respective interests. Within that balancing exercise, it may well be that the Court will rarely find that the scale is tipped against the holder of a registered mark. Perhas this explains the paucity of precedent. Still, that is not to say that the Court lacks jurisdiction even to embark on the analysis.
[11] Further, the defendant's position would amount to reading s. 19 of the Act as if it said that a trade-mark holder has the right to exclusive use of its mark "unless and until it has been declared invalid". I would not interpret the provision so broadly as to eliminate the possibility of a trade-mark holder being the object of an injunction.
2. Has the plaintiff satisfied the test for an injunction?
[12] I have set out above the three criteria for an injunction. I find that the plaintiff has shown a serious issue but not irreparable harm. It is unnecessary, therefore, to consider where the balance of convenience might lie.
(a) Serious issue
[13] The plaintiff's case against the defendants is based on three claims: (1) The registered trade-mark "Advantage Rent-A-Car" is invalid because it was unregistrable on the date it was registered (relying on ss. 18(1)(a) and 12(1)(d) of the Act (relevant enactments are listed in the attached Annex)). This claim is based on confusion with the plaintiff's mark for "Advantage Leasing", which was current at the time the defendant applied for its mark. (2) The defendant's trade-mark lacks the essential character of distinctiveness (relying on s. 18(1)(b) of the Act). (3) The defendants have engaged in passing-off, contrary to s. 7(b) of the Act. In turn, the defendants argue that the plaintiff is infringing on the registered mark for "Advantage Rent-A-Car".
[14] I need not decide whether all of the plaintiff's claims have sufficient merit as to constitute serious issues. A single serious issue would be enough.
[15] In my view, the plaintiff has shown that there is a genuine issue about the registrability of the defendant's mark for "Advantage Rent-A-Car".
[16] The plaintiff has produced affidavit evidence showing that it owned a trade-mark for "Advantage Leasing" at the relevant time. It has also provided evidence of confusion between itself and the defendant Advantage Rent-A-Car (to be discussed further below). Indeed, the defendant admits confusion.
[17] I realize that the plaintiff no longer uses the name "Advantage Leasing", if it ever did. I also note that the plaintiff has not tendered direct proof of its ownership of the "Advantage Leasing" mark. Still, I am satisfied that the plaintiff has met the relatively low threshold of showing a serious issue to be tried. Whether there is any real merit to the plaintiff's claim can only be determined after considering the evidence that may be tendered at trial.
(b) Irreparable harm
[18] The plaintiff has provided evidence that the defendant's customers have called or arrived at the plaintiff's premises believing that they have reserved a car there. In fact, in many cases, these customers had reserved cars with the defendant Advantage Rent-A-Car on the internet, arrived at Pearson Airport, could not find the defendant or any phone number for it or its affiliate Rent-for-Less, and contacted the plaintiff after looking up "Advantage" in a telephone directory. Often these customers are vocal, angry and upset when they learn that the plaintiff has no car for them. Sometimes they accuse the plaintiff of incompetence or deception. A few have said that they would not rent a car from the plaintiff again.
[19] The plaintiff has also provided evidence that others have been confused from time to time as between the plaintiff and the defendant: an auto body shop, a hotel and persons assisting travellers at the airport.
[20] The plaintiff is concerned that if the defendants continue to use the name "Advantage" within the geographical area of the plaintiff's operations (i.e. Southern Ontario), this confusion will grow and substantially harm its reputation, goodwill and client base. Again, the defendants agree with the plaintiff that confusion exists. However, they dispute the plaintiff's contention that this confusion amounts to irreparable harm.
[21] I agree with the defendants. The plaintiff's evidence shows that customers are upset with the way the defendants have carried on business. They mistakenly believe the plaintiff is connected to the defendants. The accusations aimed at the plaintiff are intended for the defendants. It is the defendants, primarily, who suffer the harm arising from confusion and it is they who ultimately receive complaints from disgruntled travellers.
[22] This situation is certainly bothersome for the plaintiff. But I do not see any kind of harm that would not be compensable in damages if the plaintiff were to succeed at trial. The unhappy customers who have communicated with the plaintiff are persons who would only rent a car in Southern Ontario when arriving at Pearson airport after having made a reservation over the internet. The plaintiff concedes that these persons are not within its target market. The plaintiff worries that the defendants may expand and create greater overlap between the parties' channels of trade. But I have no evidence before me of that possibility. Any harm arising from that scenario would be speculative at this point in time and, therefore, not within the realm of "irreparable harm". Further, the plaintiff can minimize any harm it suffers by directing confused customers to the defendants.
[23] In summary, the plaintiff's has not shown harm of the nature or magnitude that would meet the test for irreparable harm established in the case law: Effem Foods Ltd. v. H.J. Heinz Co. of Canada Ltd., [1997] F.C.J. No. 935 (T.D. )(QL); Centre Ice Ltd. v. National Hockey League, [1994] F.C.J./A.C.F. No. 68 (C.A.) (QL); Sports Authority, Inc. v. Vineberg,[1995] F.C.J. No. 622 (T.D.) (QL). Accordingly, I must dismiss this application with costs in any event of the cause.
ORDER
THIS COURT'S ORDER IS that:
1. The motion for an interlocutory injunction is dismissed with costs in any event of the cause.
"James W. O'Reilly"
Judge
Annex
| Trade-marks Act, R.S.C. 1985, c. T-13
Prohibitions 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;
When trade-mark registrable
12. (1) Subject to section 13, a trade-mark is registrable if it is not
[...] (d) confusing with a registered trade-mark;
When registration invalid 18. (1) The registration of a trade-mark is invalid if
(a) the trade-mark was not registrable at the date of registration, (b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced,
Rights conferred by registration
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. |
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Loi sur les marques de commerce, L.R.C. 1985, ch. T-13 Interdictions 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;
Marque de commerce enregistrable 12. (1) Sous réserve de l'article 13, une marque de commerce est enregistrable sauf dans l'un ou l'autre des cas suivants_: ... d) elle crée de la confusion avec une marque de commerce déposée;
Quand l'enregistrement est invalide 18. (1) L'enregistrement d'une marque de commerce est invalide dans les cas suivants_: a) la marque de commerce n'était pas enregistrable à la date de l'enregistrement; b) la marque de commerce n'est pas distinctive à l'époque où sont entamées les procédures contestant la validité de l'enregistrement;
Droits conférés par l'enregistrement 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. |
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FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1760-04
STYLE OF CAUSE: ADVANTAGE CAR & TRUCK RENTALS
v. 1611864 ONTARIO INC. o/a RENT FOR LESS,
ADVANTAGE RENT-A-CAR, INC.
PLACE OF HEARING: TORONTO, ON.
DATE OF HEARING: February 28, 2005
REASONS FOR ORDER
AND ORDER BY: THE HONOURABLE MR. JUSTICE O'REILLY
DATED: March 7, 2005
APPEARANCES BY:
James Buchan
Stewart Hayne Plaintiff/Defendant by Counterclaim
Lynn Cassan
Christopher Desjardins Defendants/Plaintiffs by Counterclaim
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP
Barristers & Solicitors
Toronto, ON Plaintiff/Defendant by Counterclaim
Cassan McLean
Barristers & Solicitors
Ottawa, ON Defendants/Plaintiffs by Counterclaim