Date: 20021212
Docket: T-184-99
Neutral citation: 2002 FCT 1294
BETWEEN:
CANADIAN BUSINESS SCHOOL INC.,
Plaintiff,
- and -
SUNRISE ACADEMY INC.,
Defendant.
[1] Both parties are Canadian owned and operated colleges that provide services in Canada. Each offers business courses, but each also provides other types of courses. Both operate under the name "Canadian Business College". The issue is whether the plaintiff, Canadian Business School Inc., had acquired reputation and goodwill in the name "Canadian Business College" such that the defendant, Sunrise Academy Inc. (Sunrise), at the time of its use of the name "Canadian Business College", directed public attention to its services and business in such a way as to cause or be likely to cause confusion between its services and business and those of the plaintiff.
[2] This matter is about unfair competition and is framed as a statutory passing-off action pursuant to paragraph 7(b) of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended (the Act). Paragraph 7(b) reads:
| 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; |
[3] The facts, agreed to by the parties, are set out in the agreed statement of facts attached to these reasons as Schedule "A". They are summarized here for ease of reference.
[4] Mazher Jaffery has been the sole shareholder and director of the plaintiff Canadian Business School since its incorporation in 1992. Canadian Business School has, continuously since 1992, offered educational courses of study in the areas of business, computers, computer technology and interactive multi-media technology. Some of the courses offered by Canadian Business School fell under the auspices and control of the provincial ministerial authority governing vocation schools (the ministerial authority). As a result of the ministerial authority's policy, the plaintiff was not authorized to use the name "college" with respect to certain courses offered that were subject to the ministerial authority. In 1998, the policy was changed regarding the use of the word "college". Specifically, the ministerial authority permitted vocational schools in Ontario to use the word "college" in their names or as a word that they used to describe themselves. The 1998 change has continued and is presently operative.
[5] In June, 1998, the plaintiff, for publicity purposes, published and distributed a pamphlet in relation to its participation in COMDEX, Canada's largest computer-related show, which occurred in July, 1998. The pamphlet included the name "Canadian Business College". The plaintiff used the name "Canadian Business College" in its student newsletters from at least as early as July, 1998. The plaintiff used letterhead, upon which the name "Canadian Business College" appeared, since July, 1998. Business cards with the name "Canadian Business College" were first used by Mr. Jaffery in July, 1998. The plaintiff granted its first certificates under the name "Canadian Business College" in July 1998 and in August it began using registration forms with the name "Canadian Business College" at the top. In September, 1998, the plaintiff began granting "Canadian Business College" diplomas. On September 18, 1998, the plaintiff registered the name "Canadian Business College" with the Ontario Ministry of Consumer and Commercial Relations. The plaintiff's registration was subsequent to the defendant's registration of the name "Canadian Business College".
[6] By correspondence dated September 17, 1998, the plaintiff informed the Ontario Ministry of Education and Training that it proposed, as of that date, to use the word "college", instead of the word "school", in its name. The plaintiff also advised that its current name was "Canadian Business School Inc." and that its proposed name was "Canadian Business College (A Division of Canadian Business School Inc.)". The stated objective regarding the proposed name change was:
To establish in client minds that they are attending a registered Career College, moreover place the word college on diplomas so that those students who are in the process of looking for jobs can market themselves as having attended a college, and that they hold a college diploma. Thus add merit to the diplomas and make it easier for the students to find jobs.
[7] By correspondence dated September 18, 1998, the Ontario Ministry of Education and Training informed the plaintiff that the Ministry had no objection to the use of the word "college" in the proposed name "Canadian Business College" and provided conditional approval for use of the name.
[8] The plaintiff is a "career college" and offers business courses. It is a vocational school and from 1992 until 1998, offered some courses that were governed by the ministerial authority. From 1992 until 1998, courses offered by the plaintiff that were governed by the ministerial authority increased in proportion to courses that were not so governed.
[9] Parviz Amini has been president and owner of Sunrise since its inception in 1996. Under Sunrise, the defendant operates a licensed employment agency, which began operating in 1996, and a private vocational school, which began operating in 1997. The defendant is a "career college" and offers business courses. Under the private vocational school, the defendant has offered various programs in relation to health as well as information technology.
[10] When it began operating as a school in 1997, Sunrise primarily offered health courses. Later that year, it added information technology courses. The defendant offered certificates in computer courses such as "Windows", "Office Package", keyboarding and the like. Courses were offered in office administration, as well as in computerized accounting, business application and programming. The diploma program in office administration was first offered in 1998 and the other three courses were also offered in 1998, following registration with the ministerial authority, of the operating name "Canadian Business College" under Sunrise Academy Inc. on September 14, 1998. The Ministry of Education and Training forwarded correspondence dated August 19, 1998, to the defendant in the same language as the correspondence it forwarded to the plaintiff on September, 18, 1998. To the extent that the plaintiff says that the September 18th correspondence granted it permission or approval to use the word "college", the August 19th correspondence granted the same permission or approval to use the word "college" to the defendant.
[11] The defendant had its insurance bond (endorsement no.2) changed as of September 18, 1998 to name as the insured, "Sunrise Academy Inc. o/a Canadian Business College". The only use made of the trademark CANADIAN BUSINESS COLLEGE, prior to obtaining the registration on October 28, 1998, was an advertisement in the newspaper Filipiniana in September, 1998, and an advertisement in the Toronto Sun newspaper on October 20, 1998. The latter appeared on the same page as an advertisement of the plaintiff. As late as October, 1999, the defendant's website at www.cbcollege.com bore a banner advertisement that stated "Sunrise Academy is merging with Canadian Business College".
[12] The defendant and the plaintiff are offering many identical courses all in association with the identical trademark CANADIAN BUSINESS COLLEGE. The defendant is concerned about the confusion between the defendant's and the plaintiff's use of CANADIAN BUSINESS COLLEGE and agrees that having two vocational schools operating under the same name in the same geographical region, offering the same courses, is likely to create confusion among students. The plaintiff's enrolment numbers from July 1 to June 30 were as follows: 1995-1996, 443 students; 1996-1997, 522 students; 1997-1998, 533 students and 1998 -1999, 399 students.
[13] The plaintiff called three witnesses at trial: Mazher Jaffery, Muna Mohammed and Robert Mannisto. Mr. Jaffery's evidence was historical and tracked his activities beginning with his arrival in Canada in 1982. He traced the development of Canadian Business School from its inception in 1992 to its present day status. Mr. Jaffery testified regarding the extensive course selection offered by the plaintiff and of its training partnerships with Oracle and Microsoft, which it entered in 1995. Insofar as the use of the name "Canadian Business College" is concerned, Mr. Jaffery's evidence was to the effect that the plaintiff had used the name "Canadian Business College" since 1992. In 1996, the plaintiff mentioned "Canadian Business College" in its website, it started answering the phone as "Canadian Business College" and in 1996 or 1997 "Canadian Business College" showed up on call display telephones. The name "Canadian Business College" was referred to on pamphlets and newsletters that the plaintiff sent to companies and individuals. Mr. Jaffery testified that in June, 1998, the plaintiff was in the process of making a final transition to one name, "Canadian Business College", on the premise that it was "easier for us and for everyone else" and that the transition was complete by early summer, 1998. A number of documents were introduced to support Mr. Jaffery's evidence that the plaintiff had used the name "Canadian Business College" prior to September, 1998.
[14] Mr. Jaffery also gave evidence regarding the confusion that exists in relation to the plaintiff's and the defendant's use of the same name. He related incidents, which were largely hearsay evidence received from his staff, regarding a particular student who had confused the schools, regarding Human Resources and Development (HRDC) employees being unable to distinguish between the two schools, regarding confidential government documents being faxed to the wrong school and regarding newspaper staff confusing the schools in relation to advertisements. Essentially, Mr. Jaffery's evidence with respect to confusion was that "everybody is confused". He spoke unfavourably about the defendant's school being located across the street from the HRDC office and about its amenities.
[15] Muna Mohammed has been employed by the plaintiff since 1999, initially as receptionist-administrator and for the past year as office manager. Her duties include manning the telephones, dealing with students' registrations, data entry, filing and the general administrative requirements of working with students on a daily basis. Since assuming the position of office manager, her duties have not changed but she has assumed more responsibility co-ordinating, scheduling and counselling students. Ms. Mohammed's evidence related to the confusion that has resulted from the plaintiff's and the defendant's use of the same name. She referred specifically to confusion for students, for the general public, for HRDC and with respect to the Ontario Student Assistance Program (OSAP). She spoke about a training seminar sponsored by OSAP, which she attended on August 24, 2001. Upon her arrival, she was advised that her co-workers were already present. Unknowingly, the person was referring to representatives of the defendant. Ms. Mohammed stated that everyone in attendance was uncomfortable and confused. Ms. Mohammed also testified that for funding from HRDC, students must review three different schools, fill out forms, compare the schools and choose one. Upon selection, the school of choice forwards an acceptance letter regarding the student and funding is received approximately six weeks later. When a student chooses the plaintiff, HRDC calls and notifies the school that the student has been approved and that a contract will follow. Difficulty ensues when new HRDC employees, not aware of the differences between the plaintiff"s school and the defendant's school, contact the wrong school. Ms. Mohammed stated that such errors occur approximately once per month.
[16] Ms. Mohammed also related examples of confusion arising from telephone calls when potential students inquire about courses at the St. Clair campus (the defendant's school) and when people call for Mr. Amini, his wife or another of the defendant's employees. Additionally, the OSAP website does not distinguish between the plaintiff's school and the defendant's school. Students applying for financial assistance choose the plaintiff"s school and then see the St. Clair school on the OSAP website and think that it is the plaintiff's campus.
[17] Robert Mannisto was offered as an expert in differential accounting as a method of calculating profits. His affidavit evidence was tendered without objection and his attendance at trial was for the purpose of explaining the contents of his affidavit. In a nutshell, Mr. Mannisto's evidence was that he did not have sufficient financial disclosure from the defendant to enable him to draw any conclusions as to those expenses that could properly be deducted from revenues in a calculation of the defendant's profits, using the differential accounting method.
[18] The defendant's only witness was Parviz Amini, president and owner of the defendant. As with Mr. Jaffery, Mr. Amini's evidence was historical in the sense that it tracked his activities since his arrival in Canada in 1990 and his establishment of Sunrise in 1996, initially as an employment agency and in 1997, as a vocational school. Mr. Amini testified that the name Sunrise Academy Inc. did not truly describe the nature of the school business, therefore in May or June, 1998, he began searching for a more appropriate name. He researched the Toronto white pages, the yellow pages, the newspapers, the employment news, the business section and the directories that related businesses used for advertising. He was considering a number of names but wished to choose a name that was not registered anywhere. He testified that he chose "Canadian Business College" because he felt that it described the nature of the business in that anyone would realize that it is a college offering education. It described the business because it offers courses that lead to a job market in that it creates employment for the students. Lastly, because he (Mr. Amini) is Canadian and all attending students are in Canada, the name Canadian was appropriate. Mr. Amini stated that after researching, he inquired with the Ministry of Education and Training to ascertain the requirements to use the name. As a result of his inquiries, he registered an operating name with the Ministry of Consumer and Commercial Relations and obtained a rider on the defendant's insurance bond.
[19] Mr. Amini testified that he was aware of the plaintiff Canadian Business School but was not aware that the plaintiff used the name "Canadian Business College" until he received a telephone call and a cease and desist letter with respect to the defendant's use of the name "Canadian Business College". After receipt of the approval from the Ministry of Education and Training, the defendant applied to the ministerial authority for registration. The registration was granted on October 28, 1998. In the meantime, the defendant advertised the school as "Canadian Business College" in the newspaper Filipiniana in September and in the Toronto Sun on October 20th. Mr. Amini tendered documents to establish that his school was the only school registered with the ministerial authority using the name "Canadian Business College" as of March 2, 1999. He additionally tendered various documents evidencing the distinction between the logo of his school and the logo of the plaintiff's school.
[20] The law regarding the action of passing-off can be briefly summarized. Paragraph 7(b) of the Act is a statutory codification of the common law action of passing-off: MacDonald v. Vapour Canada Ltd. (1976), 22 C.P.R. (2d) 1 (S.C.C.) (MacDonald).
[21] The doctrine of passing-off was recognized as a distinct cause of action in the 19th century. The basis for the doctrine is that a man is not to sell his own goods under the pretence that they are the goods of another man . . . he cannot therefore be allowed to use names, marks, letters, or other indicia, by which he may induce purchasers to believe that the goods which he is selling are the manufacture of another person: Perry v. Truefitt (1842), 49 E.R. 749. The action consisted of a misrepresentation to the effect that one's goods or services are someone else's, or sponsored by or associated with that other person. It is effectively a 'piggybacking' by misrepresentation: Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd. (1987), 14 C.P.R. (3d) 314 (F.C.A.).
[22] Trade mark rights are only acquired through adoption and use, not only at common law, but under the three successive Canadian statutes dealing with trade marks: Fox, Harold G., The Canadian Law of Trade Marks and Unfair Competition, 4th ed., looseleaf (Toronto: Carswell 2002) at p. 3-3. The three necessary components of a passing-off action are the existence of goodwill, deception to the public due to a misrepresentation and actual or potential damage to the plaintiff: Ciba-Geigy Canada Ltd. v. Apotex Inc. (1992), 44 C.P.R. (3d) 289 (S.C.C.) (Ciba-Geigy).
[23] Passing-off occurs when a company's business reputation or goodwill will likely be injured by a misrepresentation in which a competitor creates an illusion of sameness or similarity to its wares causing confusion in the consumer: Molson Canada v. Oland Breweries Ltd. (2002), 11 C.P.R. (4th) 199 (Ont. S.C.). The term "goodwill" means the "fixed and favourable consideration of customers arising from established and well-conducted business . . . It means every positive advantage that has been acquired by a proprietor in carrying on his business, whether connected with the premises in which the business is conducted, or the name under which it is managed, or any other matter carrying with it the benefit of the business: 599960 Ontario Inc. v. Taylor Steel Inc. (2000), 4 C.P.R. (4th) 135 (Ont. S.C.) citing Black's Law Dictionary, 5th ed. The law of goodwill exists not only to protect the interests of traders but also to protect the public: Enterprise Rent-A-Car Co. v. Singer (1996), 66 C.P.R. (3d) 453 (F.C.T.D.) aff'd. (1998) 79 C.P.R. (3d) 45 (F.C.A.).
[24] The plaintiff's name or mark must be distinctive of the plaintiff's business for distinctiveness is the very essence of a trade mark at common law and under the Act. Without distinctiveness, there is no protectable right: Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. (1982), 64 C.P.R. (2d) 1 (S.C.C.). In cases where the elements of a trade mark or trade name are susceptible to dictionary meanings, and are not coined or invented words, it is open to the plaintiff to show that it has built up a distinctive reputation and goodwill for itself in association with the trade mark, such that the mark now has a secondary meaning: Canadian Board for Certification of Prosthetists and Orthotists v. Canadian Pharmaceutical Association (1985), 5 C.P.R. (3d) 236 (Ont. H.C.).
[25] The essence of the action is not in the mere copying of the plaintiff's goods or symbols; it lies in the representation by the copier that its goods are those of the plaintiff: Gunnard Co. v. Regal Home Products Inc. (1986), 13 C.P.R. (3d) 335 (Ont. H.C.). The defendant need not have intended to misrepresent: Ciba-Geigy. It is essentially a cause of action arising out of confusion: Serville v. Constance (1954), 71 R.P.C. 146 (Ch.D.). The relevant market for the purposes of the issues involved in passing-off actions includes all persons who are affected by the passing- off: Ciba-Geigy.
[26] The doctrine is not designed to prevent carelessness, ignorance or misinformation on the part of the consumer: Stiga Aktiebolag v. S.L.M. Canada Inc. (1990), 34 C.P.R. (3d) 216 (F.C.T.D.); Canadian Schenley Distilleries Ltd. v. Canada's Manitoba Distillery Ltd. (1975), 25 C.P.R. (2d) 1 (F.C.T.D.). The cause of action does not give the plaintiff the right to impose or engage in unreasonable restraints of trade and the courts must be vigilant in providing protection from lost opportunity from unfair and overly restrictive restraint of trade. The balance is often one of common sense and judgment in the finding of facts as to the existence of the elements of goodwill, misrepresentation and confusion: Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 56 C.P.R. (3d) 129 (Alta. Q.B.) aff'd. (1996), 67 C.P.R. (3d) 444 (Alta. C.A.).
[27] The crux of this matter, as stated at the outset of these reasons, is whether the plaintiff had acquired reputation and goodwill in the name CANADIAN BUSINESS COLLEGE such that the defendant, at the time of its use of the same name, directed attention to its services and business in such a way as to cause or be likely to cause confusion between its services and business and those of the plaintiff.
[28] The defendant maintains that its use of the name "Canadian Business College" was adopted without knowledge of the plaintiff's use and that any use made by the plaintiff before the defendant's use was not sufficient to create any right of exclusive use in the plaintiff.
[29] The parties agreed that the relevant market, for purposes of this action, is comprised of students interested in taking or registering for vocational courses in the greater Toronto area. The plaintiff concedes that some elements of the trade mark or trade name CANADIAN BUSINESS COLLEGE are somewhat descriptive or at least suggestive but does not admit that as a whole the trade mark is clearly descriptive of the services provided. The defendant, on the other hand, took considerable time to detail the listings in the National Career Colleges of Canada directory specifically, the number of businesses using the words "business college" as well as the number of businesses using the word "Canadian". Interestingly, there appear to be only two institutions that use the identical phrase CANADIAN BUSINESS COLLEGE and they are the plaintiff and the defendant. While not conceding that the phrase as a whole is descriptive, the plaintiff nonetheless maintained that the words CANADIAN BUSINESS COLLEGE mean more than simply a school located in Canada that offers courses that may be used in business or to develop a business. In this action, the words mean the educational services offered by the plaintiff. In short, the plaintiff contends that the trade mark is not generic. Rather, it has a secondary meaning that had become paramount as of the date of the alleged passing-off and had come to denote the plaintiff exclusively.
[30] There is also a dispute as to the relevant date. The plaintiff maintains that the evidence shows that the defendant commenced its use of the trade mark and trade name CANADIAN BUSINESS COLLEGE in October, 1998, whereas the defendant maintains that it first directed public attention to its services and business by the advertisement in the Filipiniana newspaper that was distributed to the public in September, 1998. The plaintiff, notes the defendant, complained of this ad.
[31] The wording of paragraph 7(b) of the Act refers to directing attention to services. I find that the defendant first directed attention to its services when it advertised in the Filipiniana newspaper in September, 1998. I am reinforced in my finding by the provisions of subsection 4(2) which provide that a trade mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.
[32] Mr. Jaffery and Mr. Amini, in giving evidence, made every effort to present that evidence in the best possible light for each of their respective businesses. Both were prone to exaggeration although Mr. Amini was less so than Mr. Jaffery. Mr. Amini did testify, at trial, that he first began researching for a different name in May or June, 1998, but had previously stated on discovery that it was June or July, 1998. Since I have no way of determining with certainty when Mr. Amini first began his research, I will assume that his memory would be fresher at the time of discovery and I, on that basis, find that it was late June or early July of 1998. I accept Mr. Amini's evidence that while he was aware of the plaintiff, he knew the plaintiff as "Canadian Business School" and not as "Canadian Business College" and I find that he adopted the name "Canadian Business College" without knowledge of the plaintiff's use of it. His actions regarding provincial ministerial approvals and registrations, supported by the appropriate documentation, are consistent with his evidence.
[33] Mr. Jaffery's evidence was that the plaintiff had used "Canadian Business College" in conjunction with "Canadian Business School" since 1992 and that by 1996, his school "Canadian Business College" was becoming known throughout the greater Toronto area to students interested in specialized educational courses. He testified that suppliers and corporate partners regularly referred to the plaintiff as "Canadian Business College" and that by 1996, the use of "Canadian Business College" became more pronounced and the more dominant trade mark. Various documents were tendered in support of his position. He further testified that by the summer of 1998, the transition to one name, "Canadian Business College", was complete and that "Canadian Business College" was the name that the plaintiff used in communicating with its students. As counsel put it, CANADIAN BUSINESS COLLEGE had become the plaintiff's identity, its method of communicating with students and the name by which its reputation in the greater Toronto area was known by its market.
[34] Mr. Jaffery's evidence did not withstand cross-examination in this regard nor did the tendered documents lend support to his evidence. Specifically, a bundle of documents was submitted comprised of invoices and shipping letters. All documents relate to the year 1997 and all relate to a single U.S. supplier. With one exception, the documents refer to the plaintiff as "Datahaus/Canadian BSN College". In the bundle, the only document which refers to "Canadian Business College" is one of two bank drafts from the plaintiff showing the sender as "Canadian Business College Datahaus, Customer #771". A lengthy, full-page advertorial that appeared in the Employment News and the Toronto Sun in January, 1996 was also tendered. The page contains several references to "Canadian Business School" and "Canadian Business School Interactive Multimedia". The only reference to "Canadian Business College" is an innocuous one that appears three lines from the bottom of the page. There was also a brochure prepared in June, 1997, for a graduation ceremony. The focal point of the brochure is a large photograph of a man and a woman viewing a computer monitor. Prominently displayed on the top right side is a logo (a small man in front of a computer) and the words "Canadian Business School". At the bottom, the words "Canadian Business College" appear, but are less obvious than the words at the top. This brochure was distributed at the graduation ceremony but Mr. Jaffery gave no evidence regarding that distribution. He was unable to relate how many, if any, brochures were distributed or to whom.
[35] The remaining documents are dated 1998 or later and I will have more to say about them. Insofar as the plaintiff's use of the trade mark CANADIAN BUSINESS COLLEGE pre 1998 is concerned, other than the testimony of Mr. Jaffery, there is no evidence of the plaintiff's use. No witnesses gave evidence regarding knowledge of "Canadian Business College" or its reputation.
[36] Based on the evidence, I find that the plaintiff referred to itself by a number of names including "Canadian Business School Inc.", "Canadian Business School Interactive Multimedia", "Datahaus" and "Canadian Business College". The primary name used by the plaintiff was "Canadian Business School" and the plaintiff's logo appeared alongside the phrase "Canadian Business School". The use of "Canadian Business School" was consistent, use of the other names was not. References to "Canadian Business College" that did appear were innocuous or minimal. The plaintiff has not established that goodwill existed in association with its use of the name "Canadian Business College" between 1992 and 1998.
[37] The remaining documents tendered by the plaintiff show more extensive use of the name "Canadian Business College". Mr. Jaffery's evidence was that the decision to use only one name was made in June, 1998. On direct examination, he testified that the transition to one name was complete by early summer. He qualified his answer on cross-examination and stated that the transition was completed by September 18, 1998. Again, his evidence did not withstand cross-examination. Specifically, "Canadian Business College" was not listed in either the white or the yellow pages of the telephone directory for 1998-1999. The first listing occurred in 1999-2000. The plaintiff's course calendar for 1998-1999 consists of 39 pages. Of the 39 pages, 6 contain course descriptions with the name "Canadian Business College" at the top of the page. A copy of a Toronto Sun advertisement at the rear of the calendar refers extensively to "Canadian Business College" and the cover page is entitled "Canadian Business College Course Calendar". All remaining 31 pages bear the name "Canadian Business School" alongside the logo, at the top of each of the pages.
[38] There was a newsletter dated June 29, 1998, which was forwarded to students and alumni extending an invitation to Comdex by "Canadian Business School" on behalf of "Canadian Business College" and "Canadian Business School Interactive Multimedia". There was additionally a Comdex pamphlet prepared in July, 1998, advertising Microsoft Certificate programs. It was titled "Canadian Business College" and the logo appeared beside it. Finally, letterhead, business cards and certificates granted between July 10 and September 26, 1998 were tendered. Aside from the certificates that I assume were awarded to the 17 named recipients, there was no specific evidence regarding distribution of any of the documents.
[39] Much of the documentary evidence tendered relates to dates after September, 1998. The one document, post September, 1998, which causes me concern is the correspondence from Yvonne Bogorya, Regional Administrator, Ontario Ministry of Training, dated February 5, 2002, and forwarded to "Canadian Business College". That correspondence confirms that "Canadian Business School Inc., operating as Canadian Business College", is registered and approved as a private vocational school under the Private Vocational Schools Act. It goes on to state that "Canadian Business College" was registered with the PVS unit of the Ministry in 1993 (Toronto campus) and 1996 (Scarborough branch approved). My concern lies with the direct contradiction between the correspondence and the evidence of both parties. The document contradicts the pre 1998 ministerial policy and flies in the face of the March 2, 1999 correspondence that was forwarded to Mr. Amini from the same department. The author of the letter was not called as a witness, and in the absence of some explanation regarding the noted contradictions, I do not assign any weight to this document.
[40] As stated earlier, I find that the defendant began researching for an appropriate name for its business school operation in late June or early July, 1998. In August, Mr. Amini made his first inquiry to the provincial authorities and received conditional approval to use the name "Canadian Business College". In September, 1998, the defendant advertised "Canadian Business College" in the Filipiniana newspaper and also applied for provincial registration of "Canadian Business College". The defendant proceeded with the remaining requirements relative to provincial authorizations and offered diploma courses under the name "Canadian Business College" on October 28, 1998.
[41] The plaintiff in June, 1998, decided that it would operate under the name "Canadian Business College", having previously operated as "Canadian Business School Inc.". It took steps towards that objective during the months of June, July and August, 1998. Those steps did not include communications, at that time, with the provincial authorities. The plaintiff prepared a newsletter, an advertisement and had letterhead and business cards printed. It granted "Canadian Business College" certificates (but not diplomas) to students beginning July 10, 1998. Diplomas were issued under the name "Canadian Business College" after September 18, 1998.
[42] The time frame is narrow and the evidence is scant. Many of the steps taken by each of the parties were taken concurrently. I am to be concerned with "use". There is insufficient evidence before me to enable me to infer that the plaintiff had, in September 1998, the requisite reputation and goodwill in the name CANADIAN BUSINESS COLLEGE such that the defendant, by its use, could be considered to be "piggybacking" by misrepresentation. The plaintiff has not established the requisite goodwill.
[43] Plaintiff's counsel took exception to the defendant's references to unauthorized use by the plaintiff of the name "Canadian Business College" viz. the Ontario provincial legislation. In my view, the "legality" of the use of the name is not in issue here. The only relevance, of compliance with provincial legislation, is to corroborate the evidence given, i.e., the actions may be consistent with the representations and therefore go to credibility.
[44] There are three additional submissions made by the plaintiff that require comment. First, counsel urged me to find that the defendant's mere choosing of the identical name, in the absence of any other reasonable explanation, gives rise to an inference that the plaintiff had, in fact, established a reputation. The short answer is that the defendant did offer an explanation and I consider it to be reasonable.
[45] Second, counsel contended that the establishment of confusion establishes the existence of goodwill, "if people are confused, obviously there was a reputation there". I do not accept counsel's statement as a general proposition of law. Each case turns on its own facts. There may be situations where confusion will illustrate a pre-existing reputation, but that is not the situation here. The law is settled that where a name is highly descriptive, there is an inevitable risk of confusion. This does not lead to the conclusion that one of the users enjoys the requisite reputation to found a passing-off action. If, by some strange and mere coincidence, two businesses, unbeknownst to each other, commence operations on the same day under the same name, which of the two would reap the benefit of the reputation and goodwill in the face of confusion? To the extent that the authorities referred to by the plaintiff correlate confusion to goodwill, I note that the analysis and determination regarding goodwill preceded any such correlation being drawn.
[46] Third, counsel stated that the Court's primary concern is the protection of the public from confusion. That is true. However, it is true in the context of preventing deception with respect to a goodwill that exists or, as stated in Ciba-Geigy, it is so that "the purchasing public will not be enticed into buying A's product when it wants B's product". At the end of the day, the plaintiff's proposition comes down to a question of whether in circumstances where confusion exists, the Court should protect the public from that confusion despite the fact that the plaintiff has not established the existence of goodwill. I think not.
[47] The circumstances here are unfortunate. It is rare for an identical name to be used in the same geographic area in relation to the same target group. However, the confusion was not as pronounced as it appeared at first blush. The OSAP website, for example, contains a paragraph that specifically advises, "there may be more than one school with the same name". The reference to newspaper staff confusing the schools with respect to advertisements related to a single incident. The evidence in relation to the student confusing the schools is, in and of itself, confusing. It was the only specific example provided by the plaintiff and it is not at all clear that the student had confused the plaintiff's and the defendant's schools. The evidence related more to the student's reaction to failing the plaintiff's aptitude tests than it did to confusion. Nonetheless, confusion does exist here and will undoubtedly continue to exist. That is not a reason to grant one party a monopoly.
[48] I would add only that some confusion may be alleviated by co-operation between the parties regarding misdirected telephone calls and correspondence. Such co-operation is delicate, sensitive and difficult to implement while in the throes of litigation, but may be more attainable upon its completion. While the parties use the same name, they have much to distinguish them. They are different schools operating at different addresses. They have distinctly different logos, letterhead and signage. One would be hard pressed to confuse one with the other when viewing their respective advertisements. The plaintiff may well feel that a transition from "Canadian Business School" to "Canadian Business College", in the face of the change in ministerial policy, was a natural one and that may well be so. The difficulty is that the plaintiff had not established the necessary reputation or goodwill in the name CANADIAN BUSINESS COLLEGE at the relevant time.
[49] Since the plaintiff has not been successful, I need not deal with the issue of damages or accounting of profits.
[50] The action is dismissed with costs to the respondent.
__________________________________
Judge
Ottawa, Ontario
December 12, 2002
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: T-184-99
STYLE OF CAUSE: CANADIAN BUSINESS SCHOOL INC.
Plaintiff
- and -
SUNRISE ACADEMY INC.
Defendant
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: MONDAY, SEPTEMBER 9, 2002
REASONS FOR ORDER BY: LAYDEN-STEVENSON J.
APPEARANCES BY: Ms. Nancy Miller
Mr. Christopher Kvas
For the Plaintiff
Mr. Dan Hitchcock
For the Defendant
SOLICITORS OF RECORD: Ms. Nancy Miller
Mr. Christopher Kvas
KVAS MILLER EVERITT
Toronto, Ontario
For the Plaintiff
Mr. Dan Hitchcock
RICHES MCKENZIE & HERBERT LLP
Toronto, Ontario
For the Defendant
SCHEDULE "A"
to the
Reasons for Order dated December 12, 2002
in
CANADIAN BUSINESS COLLEGE INC.
v.
SUNRISE ACADEMY INC.
T-184-99
Agreed Statement of Facts
For the purposes of the trial of this action, the parties are in agreement with the following facts:
1. The Plaintiff, Canadian Business School Inc., was incorporated in 1992.
2. From 1992, Mazher Jaffery has been the sole owner and sole director of Canadian Business School Inc.
3. Canadian Business School Inc. has continuously since 1992 offered educational courses of study in the areas of business, computers, computer technology and interactive multi-media technology.
4. The appropriate Ministerial authority governing vocational schools changed its policy in 1998 with respect to the use of the word "College" in the name of a vocational school.
5. With respect to the activities of the Plaintiff which came under the auspices and control of the appropriate Ministerial authority governing vocational schools, from 1992 until the change of policy of the appropriate Ministerial authority governing vocational schools in 1998, the Plaintiff did not have permission from the Ministerial authority to use the name "College" in its name in respect of courses offered which were governed by the appropriate Ministerial authority governing vocational schools.
6. Beginning in 1998, and continuing to date, the appropriate Ministerial authority governing vocational schools in Ontario permitted vocational schools in Ontario to use the word "College" in the name of a vocational school or as a word that vocational schools may use to describe themselves.
7. The Plaintiff published and distributed a pamphlet in June 1998 with respect to publicity surrounding the participation by Canadian Business College in the COMDEX show, Canada's largest computer-related show, which took place in July 1998. The pamphlet includes the name Canadian Business College.
8. The Plaintiff's name "Canadian Business College' has been used in the Plaintiff's student newsletters from at least as early as July 1998.
9. The Plaintiff has used letterhead on which the name "Canadian Business College' appeared since July 1998.
10. Business cards using the name Canadian Business College were first used by the Plaintiff in July 1998.
11. The first certificates granted under the name Canadian Business College were granted by the Plaintiff in July 1998.
12. The Plaintiff first started using registration forms with the name Canadian Business College at the top in August 1998.
13. The Plaintiff began granting Canadian Business College diplomas in September 1998.
14. The Plaintiff registered the business name Canadian Business College with the Ontario Ministry of Consumer and Commercial Relations on September 17, 1998.
15. The Plaintiff registered the business name Canadian Business College with the Ontario Ministry of Consumer and Commercial Relations after the Defendant had registered the name CANADIAN BUSINESS COLLEGE with the Ontario Ministry of Consumer and Commercial Relations.
16. By letter dated September 17, 1998 the Plaintiff wrote to the Ontario Ministry of Education and Training advising that the Plaintiff was proposing as of that date to use the word College instead of School in its name; and the Plaintiff advised at that time that its Current Name was "Canadian Business School Inc." and that its Proposed Name was "Canadian Business College (A Division of Canadian Business School Inc.)".
17. In the letter dated September 17, 1998 the Plaintiff explained that the objective of the proposed name change was:
To establish in client minds that they are attending a registered Career College, moreover place the word college on diplomas so that those students who are in the process of looking for jobs can market themselves as having attended a college, and that they hold a college diploma. Thus add merit to the diplomas and make it easier for the students to find jobs.
18. By letter dated September 18, 1998 the Ontario Ministry of Education and Training advised the Plaintiff that the Ministry had no objection to the use of the word "college" in the proposed name "Canadian Business College" and provided a conditional approval to use the name.
19. The Plaintiff is a "career college".
20. The Plaintiff offers business courses, that is courses relating to business.
21. The Plaintiff is a vocational school.
22. From 1992 until 1998, the Plaintiff offered courses which were governed by the Ministerial authority governing vocational schools.
23. From 1992 until 1998, the proposition of courses offered by the Plaintiff which were governed by the appropriate Ministerial authority governing vocational schools to courses which were not governed by such Ministerial authority increased.
24. Parviz Amini is the President of the Defendant, Sunrise Academy Inc.
25. Mr. Amini has been at Sunrise Academy since 1996, and he has always had the position of President and owner.
26. The Defendant offers business courses, that is courses relating to business.
27. Under Sunrise Academy Inc. the Defendant operates a licensed employment agency which started in 1996 and a private vocational school which began operations in 1997.
28. The Defendant is a "career college".
29. Under the private vocational school, the Defendant has operated different programs in health, as well as in information technology. In 1997 when it began operating as a school, primarily health courses were offered by the Defendant.
30. Later in 1997, information technology courses began to be offered. Sunrise Academy Inc. offered certificate courses in computer courses, such as Windows, Office Package, keyboarding and the like. Courses were introduced in office administration as well as three other courses, namely computerized accounting, business application, and programming. With respect to these three courses, the diploma program in office administration was first offered in 1998, and the other three courses were also first offered in 1998 following registration with the Private Vocational Schools Unit of the Ministry and Education and Training of the operating name "Canadian Business College" under Sunrise Academy Inc. on October 28, 1998.
31. Mr. Amini, the President of the Defendant, maintained files with respect to the business activities and printed materials of the Plaintiff, as well as other competitors, dating back to 1996.
32. The name CANADIAN BUSINESS COLLEGE was first registered by Sunrise Academy Inc. with the Ministry of Consumer and Commercial Relations on September 14, 1998.
33. The Ministry of Education and Training sent to the Defendant a letter dated August 19, 1998 which is in the same language as the letter identified above at item 16 sent by the Ontario Ministry of Education and Training to the Plaintiff.
34. To the extent that the Plaintiff says that the letter dated September 18, 1998 from the Ministry of Education and Training to the Plaintiff granted permission or approval to the Plaintiff to use the word "college", the letter of August 19, 1998 from the Ministry of Education and Training to the Defendant granted the same permission or approval to the Defendant to use the word "college".
35. The Defendant had its insurance bond (Endorsement No. 2) changed as of September 18, 1998 to refer to the name of the Defendant as insured as "SUNRISE ACADEMY INC. O/A CANADIAN BUSINESS COLLEGE".
36. On September 30, 1998, the Defendant wrote a letter to the Ministry of Education and Training, Private Vocational Schools asking the Ministry to change its records to show that the Defendant had added the operating name "Canadian Business College".
37. The only use made of the trademark CANADIAN BUSINESS COLLEGE prior to obtaining the registration on October 28, 1998 was an advertisement which appeared in the newspaper Filipiniana in September 1998, and an advertisement in the Toronto Sun newspaper on October 20, 1998 which appeared on the same page as the Plaintiff's advertisement.
38. The Defendant is offering many of the identical courses that the Plaintiff is offering all in association with the identical trademark CANADIAN BUSINESS COLLEGE.
39. Sunrise Academy Inc. is concerned about the confusion between the Defendant's and the Plaintiff's use of CANADIAN BUSINESS COLLEGE, and admits that there is a likelihood of confusion.
40. As late as October, 1999, the Defendant's website at www.cbcollege.com bore a banner advertisement which stated "Sunrise Academy is merging with Canadian Business College".
41. The Defendant agrees that having two vocational schools operating under the same name in the same geographical region, offering the same courses, is likely to create confusion among students.
42. The Plaintiff's enrollment figures were as follows:
July 1, 1995 - June 30, 1996 - 443 students
July 1, 1996 - June 30, 1997 - 522 students
July 1, 1997 - June 30, 1998 - 533 students
July 1, 1998 - June 30, 1999 - 399 students