Date: 20010125
Docket: T-305-98
OTTAWA, ONTARIO, JANUARY 25, 2001
BEFORE: BLAIS J.
BETWEEN:
SOCIÉTÉDES LOTERIES DU QUÉBEC
Plaintiff
- and -
CLUB LOTTO INTERNATIONAL C.L.I. INC.
Defendant
REASONS FOR JUDGMENT AND JUDGMENT
[1] The plaintiff brought an action by a declaration filed on February 24, 1998 seeking a permanent injunction and damages against the defendant for use of the plaintiff's trade-marks.
FACTS
[2] The plaintiff exists inter alia to administer and manage lottery systems (hereinafter "lotteries"). The plaintiff has instituted a series of lotteries and adopted, developed and used several trade-marks and official marks.
[3] Three official marks are especially important in the case at bar, namely LOTTO 649 & Design (application No. 901 432), LOTTO 6/49 & Design (application No. 901 428) and 6/49 (application No. 901 444), hereinafter "the official marks".
[4] LOTTO 6/49 was introduced to Canada by the plaintiff in June 1982. Players in the LOTTO 6/49 lottery purchase from an authorized retailer a ticket costing $1 and having six numbers selected by the players. The winning numbers are determined by a draw and players who have the corresponding combination of numbers on their ticket win a prize.
[5] LOTTO 6/49 has met with and continues to have overwhelming success, as indicated by the sales made by this lottery. On March 31, 1997 the cumulative sales made by LOTTO 6/49 were over $7,500,000,000. Just for the period from April 1, 1996 to March 31, 1997, sales made by LOTTO 6/49 were over $550,000,000.
[6] The value of the prizes received by LOTTO 6/49 winners exceeded $260,000,000 for the period from April 1, 1996 to March 31, 1997.
[7] Because of the unquestioned success of LOTTO 6/49, the official marks have an enviable reputation and are closely associated with the plaintiff.
[8] The defendant is a customer of the plaintiff. It buys from an authorized dealer of the plaintiff $84 combination tickets which are available to any individual and which it holds in trust for the members of its groups.
[9] The plaintiff alleged that the defendant indicated in its advertising material that it formed groups of lottery ticket buyers who wished to increase their chances of winning the top prize in the Canadian 6/49. To do this, the defendant indicated that it formed groups of 32 members and purchased and held in trust for those groups a combination ticket of nine numbers, which produced 84 combinations of six numbers.
[10] According to the plaintiff, the defendant's advertising asserted that the defendant's system made it possible to maximize chances of winning the LOTTO 6/49 top prize over 84 times, namely one chance out of 166,474 rather than one chance out of 13,983,816 with a six-number ticket.
PLAINTIFF'S ARGUMENTS
[11] The plaintiff alleged that because of the publication of the official marks, the plaintiff had the exclusive right to use them and authorize their use in Canada. The plaintiff further added that no one other than the plaintiff could adopt or use a prohibited mark within the meaning of s. 9 of the Trade-Marks Act, R.S.C. 1985, c. T-13, in respect of a business, as a trade-mark or otherwise.
[12] The plaintiff maintained that use of the LOTTO 6/49 and 6/49 marks by the defendant in the advertising relating to its business which was issued to purchasers of LOTTO 6/49 tickets and the use of 6-49 tended to create confusion with the plaintiff's official marks.
[13] The plaintiff further indicated that the defendant praised the merits of its statistical software which, according to the defendant, made it possible to select the "hottest" numbers since the LOTTO 6/49 lottery was created and so increase the chances of winning.
[14] The plaintiff argued that in the course of its activities the defendant also reproduced a substantial portion of the content of the plaintiff's group agreements without entitlement and without prior authorization.
[15] The plaintiff's group agreements are literary works protected by the copyrights held by the plaintiff.
[16] The advertising issued by the defendant also includes illegal reproductions of all or a substantial portion of the LOTTO 6/49 lottery ticket.
[17] The LOTTO 6/49 lottery tickets are also literary and artistic works protected by the copyrights held by the plaintiff.
[18] The plaintiff maintained that by its activities the defendant was causing serious injury to the good will associated with the plaintiff's official marks and reputation.
[19] The plaintiff further maintained that the defendant's activities were likely to mislead members of the public by wrongly suggesting that it was authorized by the plaintiff to engage in such activities.
[20] The defendant's activities were also likely to mislead members of the public by wrongly suggesting that they could increase their chances of winning the LOTTO 6/49 lottery, and thereby also infringed the integrity of the LOTTO 6/49 lottery which was based on the selection of winning numbers on a purely random basis.
[21] In particular, the defendant's activities tended to suggest that the selection of winning numbers could be manipulated, thus giving the impression that the defendant's members had an advantage as compared with the general public.
[22] The plaintiff maintained that by its activities the defendant created confusion between its services and those of the plaintiff. The plaintiff is currently offering, through a selection slip known as "combination slip", an opportunity for a purchaser to increase the number of prizes won and not an opportunity for a purchaser to increase his or her chances of winning.
[23] The plaintiff maintained that the defendant's activities are illegal. They consist of false or misleading statements the effect of which is to discredit the plaintiff's products and services and also constitute unfair competition and trade-mark infringement, contrary to paragraphs 7(a), (b) and (c) of the Act.
[24] The use by the defendant of the official marks in its advertising material or otherwise is prohibited within the meaning of sections 9 and 11 of the Act.
[25] The defendant's actions also constitute an infringement of the copyrights held by the plaintiff over its group agreement and its LOTTO 6/49 lottery tickets, contrary to sections 3 and 27 of the Copyright Act, R.S.C. 1985, c. C-42.
[26] Despite letters of warning from the plaintiff, the defendant continues to illegally use the 6/49 and LOTTO 6/49 marks and to reproduce the plaintiff's material without authorization.
[27] The plaintiff is suffering serious injury as a result of the defendant's activities.
DEFENDANT'S ARGUMENTS
[28] The defendant contended that it is helping to increase the plaintiff's good will. Although not required to do so, the defendant buys all his tickets in Quebec from Loto-Québec, although some 25 percent of its customers come from outside Quebec and even from other countries.
[29] In this regard, the defendant added that several of its members had bought virtually no tickets in the 6/49 lottery before becoming members.
[30] The defendant noted that its purposes and advertising are clear and specific: getting people to form a buyer's club so they could profit as a group from the many advantages of the expensive $84 combination tickets.
[31] According to the defendant, its documentation is clear, specific and straightforward on its face.
[32] The documentation referred to use of statistical software which seeks to identify the "hottest" numbers, namely the numbers drawn most often and those drawn least often. To the defendant, this is another way of maximizing chances of winning, not another means of increasing chances of winning, as the plaintiff suggested.
[33] The defendant uses the words "6/49" and "LOTTO 6/49" most frequently in conjunction with the word "Canadian" to designate the specific product distributed by the plaintiff in Quebec. Moreover, that product is available without restriction throughout Canada and the defendant undertakes to purchase it for members of its groups for each four-week period or eight consecutive draws, to the exclusion of any other 6/49 lottery throughout the world.
[34] The defendant wishes to offer its services of group fiduciary management not only at the provincial and national levels, but also the international level. Accordingly, the defendant explained that in order to avoid any confusion with the many other 6/49 lotteries throughout the world, it makes a point of mentioning that it manages group services for (active or potential) players in the Canadian 6/49 lottery.
[35] The defendant maintained that in view of the purpose of its business it could only designate the product it purchases by name, so as to remove any possibility of confusion.
[36] The defendant submitted its marketing plan to the federal Competition Bureau well before putting it into operation. Further, the defendant's record has been reviewed by several other bodies, including the Consumer Protection Agency and the Quebec Commission des valeurs mobilières, which found absolutely nothing illegal in the statements contained in its documentary material.
[37] The plaintiff is one of five distributors of the Canadian 6/49 in Canada. They are governed by the by-laws of the Interprovincial Lottery Corporation. That corporation has never objected to the defendant's activities in any way whatever.
[38] The defendant's activities are quite different from those of the plaintiff and the defendant's literature proves that no confusion is possible.
[39] Although the plaintiff's group purchase agreement and the defendant's group participation agreement have similar objectives, the defendant maintained that they are completely different; further, the agreement for group participation in a group formed by the defendant contains no plagiarism and is in no way contrary to the Copyright Act.
[40] The plaintiff's fears are entirely unfounded and its interpretations only the result of its desire to prevent any organized group purchase, which is not prohibited as such by any legislation or by any by-laws of the defendant or the Interprovincial Lottery Corporation Inc.
[41] The defendant maintained that it is suffering serious injury from the defamatory allegations by the plaintiff's Service des communications and the latter's dilatory procedure.
[42] The defendant suggested that the use made by the plaintiff of its official marks is inconsistent with the spirit and letter of section 9 of the Trade-Marks Act and that, as the said plaintiff does not have "clean hands", it cannot seek an injunction.
ORDER REQUESTED
[43] In its re-amended statement of claim the plaintiff asked for:
[TRANSLATION]
1. A permanent injunction directing the defendant, its officers, directors, representatives and any other person having knowledge of this order, subject to all legal penalties to:
(a) cease any use as a trade-mark or otherwise of the plaintiff's official marks, including the marks LOTTO 6/49 or 6/49 and 6-49 or any other mark or expression that may create confusion with the plaintiff's official marks;
(b) cease offering, selling or marketing in any way whatsoever, directly or indirectly, products and services having any advertising, including any advertisement, brochure, sign or other material referring to the official marks LOTTO 6/49 or 6/49 or to 6-49 or any other mark or expression which may create confusion with the plaintiff's official marks;
(c) withdraw from the market any advertising or other documentary material in its possession or under its control referring to the official marks LOTTO 6/49, 6/49 or to 6-49 and to any other mark or expression which may create confusion with the plaintiff's official marks;
(d) cease making any false or misleading statements in any advertising or other documentary material which may have the effect of discrediting the plaintiff's business, including statements capable of misleading the public as to their chances of winning the LOTTO 6/49 lottery;
(e) cease reproducing the plaintiff's documentary material, in whole or in part, including its group agreements, in any form whatsoever;
(f) cease reproducing the plaintiff's LOTTO 6/49 lottery tickets in whole or in part in any form whatsoever;
(g) withdraw from the market any advertising or documentary material in its possession or under its control which involves the reproduction of the plaintiff's documentary material in whole or in part, including its group agreements;
(h) withdraw from the market any advertising or documentary material in its possession or under its control that consists of the reproduction of the plaintiff's LOTTO 6/49 lottery tickets in whole or in part; and
(i) refrain from seeking to encourage, assist or authorize any person in any way whatsoever to commit or attempt to commit the aforementioned acts.
2. Damages for the infringement of the plaintiff's official marks, the diminution of the good will associated with the official marks, the unfair competition and infringement of the plaintiff's copyrights, or alternatively, at the election of the plaintiff, the payment of profits illegally made by the defendant, with interest.
3. The payment of the plaintiff's costs on a solicitor-client basis, including all costs of expert witnesses.
[44] The defendant simply asked that the action be dismissed.
POINTS AT ISSUE
[45] 1. Did the defendant adopt or use in connection with a business, as a trade-mark or otherwise, the official marks of the plaintiff or a mark so nearly resembling them as to be likely to be mistaken for the official marks, contrary to sections 9 and 11 of the Trade-Marks Act?
2. Did the defendant's activities constitute unfair competition contrary to paragraphes 7(a), (b), (d)(i) and (e) of the Trade-Marks Act?
3. Did the defendant infringe the plaintiff's copyrights by reproducing in whole or in part the plaintiff's lottery tickets and the plaintiff's group agreements and tables, contrary to sections 3 and 27 of the Copyright Act?
4. Should a permanent injunction be granted against the defendant?
ANALYSIS
1. Did the defendant adopt or use in connection with a business, as a trade-mark or otherwise, the official marks of the plaintiff or a mark so nearly resembling them as to be likely to be mistaken for the official marks, contrary to sections 9 and 11 of the Trade-Marks Act?
[46] Section 9(1) of the Trade-Marks Act provides:
| Prohibited marks 9. (1) No person shall adopt in connexion with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, (n) any badge, crest, emblem or mark
(iii) adopted and used by any public authority, in Canada as an official mark for wares or services,
in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority, as the case may be, given public notice of its adoption and use . . . |
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Marques interdites 9. (1) Nul ne peut adopter à l'égard d'une entreprise, comme marque de commerce ou autrement, une marque composée de ce qui suit, ou dont la ressemblance est telle qu'on pourrait vraisemblablement la confondre avec ce qui suit :
n) tout insigne, écusson, marque ou emblème : (iii) adopté et employé par une autorité publique au Canada comme marque officielle pour des marchandises ou services,
à l'égard duquel le registraire, sur la demande de Sa Majesté ou de l'université ou autorité publique, selon le cas, a donné un avis public d'adoption et emploi . . . |
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[47] Section 11 provides:
| Further prohibition 11. No person shall use in connection with a business, as a trade-mark or otherwise, any mark adopted contrary to section 9 or 10 of this Act or section 13 or 14 of the Unfair Competition Act, chapter 274 of the Revised Statutes of Canada, 1952. |
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Autres interdictions 11. Nul ne peut employer relativement à une entreprise, comme marque de commerce ou autrement, une marque adoptée contrairement à l'article 9 ou 10 de la présente loi ou contrairement à l'article 13 ou 14 de la Loi sur la concurrence déloyale, chapitre 274 des Statuts revisés du Canada de 1952. |
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[48] The question is whether the defendant adopted or used the plaintiff's official marks, as a trade-mark or otherwise.
[49] The parties reached preliminary agreements on filing a list of admissions, which was filed at the start of the hearing as No. PD-1, and a joint list of documents containing 25 parts, which were filed at the start of the hearing as No. PD-2.
[50] The plaintiff confined itself to the exhibits filed and chose not to call any witnesses.
[51] The defendant called Claude Bécotte, the defendant's president and general manager.
[52] According to Mr. Bécotte's testimony, and also according to the various exhibits entered in the record, in particular Exhibits PD-2(1), (2) and (3), which are trade-mark certificates of registration, and further according to Exhibits PD-2(12), (13), (14), (15), (16), (17), (18), (19) and (20), there is no doubt that the defendant used the plaintiff's official marks, or marks very similar to those of the plaintiff, in the course of its business.
[53] In fact, this question was admitted by the defendant's president.
[54] The defendant's business involved purchasing $84 "combination" lottery tickets and holding them in trust on behalf of customers recruited by the defendant's representatives.
[55] Since it was lottery tickets issued by the plaintiff that were purchased by the defendant, which then held them in trust for its customers, the defendant had no choice, in recruiting its representatives and the members of its club, but to clearly identify the official marks legally held by the plaintiff.
[56] On the question of the adoption of the plaintiff's official marks by the defendant, as prohibited by section 9 of the Trade-Marks Act, section 3 indicates when a trade-mark is deemed to have been adopted.
[57] Section 3 reads as follows:
| A trade-mark is deemed to have been adopted by a person when that person or his predecessor in title commenced to use it in Canada or to make it known in Canada or, if that person or his predecessor had not previously so used it or made it known, when that person or his predecessor filed an application for its registration in Canada. |
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Une marque de commerce est réputée avoir été adoptée par une personne, lorsque cette personne ou son prédécesseur en titre a commencé à l'employer au Canada ou à l'y faire connaître, ou, si la personne ou le prédécesseur en question ne l'avait pas antérieurement ainsi employée ou fait connaître, lorsque l'un d'eux a produit une demande d'enregistrement de cette marque au Canada. |
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[58] Accordingly, a person is deemed to have adopted a trade-mark when it has commenced using that trade-mark in Canada. Consequently, as it was clearly established at the hearing that the defendant began using the plaintiff's marks as a trade-mark or otherwise, it is deemed to have adopted those official marks as a trade-mark.
[59] The word "use" is defined by the Trade-Marks Act as follows:
| "use", in relation to a trade-mark, means any use that by section 4 is deemed to be a use in association with wares or services . . . |
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"emploi" ou "usage" À l'égard d'une marque de commerce, tout emploi qui, selon l'article 4, est réputé un emploi en liaison avec des marchandises ou services . . . |
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[60] Section 4 provides:
| 4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
(2) 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. |
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4. (1) Une marque de commerce est réputée employée en liaison avec des marchandises si, lors du transfert de la propriété ou de la possession de ces marchandises, dans la pratique normale du commerce, elle est apposée sur les marchandises mêmes ou sur les colis dans lesquels ces marchandises sont distribuées, ou si elle est, de toute autre manière, liée aux marchandises à tel point qu'avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
(2) Une marque de commerce est réputée employée en liaison avec des services si elle est employée ou montrée dans l'exécution ou l'annonce de ces services. |
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[61] In Cie générale des établissements Michelin-Michelin & Cie v. CAW-Canada (1996), 71 C.P.R. (3d) 348 (F.C.T.D.), Teitelbaum J. indicated at 359, concerning the word "use":
Section 2 offers definitions of certain terms employed throughout the Trade-marks Act. The most crucial for the current case are the definitions of "trade-mark" and "use". The purpose behind the use of a trade-mark is key to the definition of a trade- mark.
2. . . .
"trade-mark" means
(a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others,
To qualify as "use as a trade-mark", therefore, the mark must be used for the purpose of identifying or pinpointing the source of the goods and services. In other words, to use a mark as a trade-mark, the person who used the mark on the goods or in connection with the services must have intended the marks to indicate the origin of the goods or services.
The term "use" in section 2 is defined specifically in relation to a trade-mark to mean "any use that by section 4 is deemed to be a use in association with wares or services".
Section 4 reads:
4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
(2) 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.
In effect, section 4 states that to "use" a trade-mark for both wares and services, the first element of proof is that the infringing party used the mark "in association" or in connection with its own wares or services. Section 4 offers different criteria for determining the association for wares and services. The term "services" is not defined in section 2 but wares are defined to include "printed publications". For wares, under subsection 4(1), there are seemingly more strenuous elements of proof for "use in association". They are that: (1) the infringer transferred or possessed the property with the owner's marks in the normal course of trade; and (2) that notice of the association was given to the person receiving the wares either through the presence of the plaintiff's mark on the goods themselves, the packaging, or being in some other manner associated with the wares. For services, the association with the plaintiff's mark is seemingly done in a more straightforward fashion since it is sufficient under subsection 4(2) to prove "use" of the trade-mark if it is: (1) used or displayed in; (2) the performance or advertising of the services.
[62] In the case at bar, the defendant is offering the services of managing LOTTO 6/49 tickets in trust. It was clearly shown that the plaintiff's official marks were used or displayed in the performance or advertising of the defendant's services.
[63] Accordingly, the defendant is deemed to have used the plaintiff's official marks in association with its services.
[64] In Canadian Olympic Association v. Konica Canada Inc., [1991] F.C.J. No. 1153 (F.C.A.), the Federal Court of Appeal indicated:
The prohibition in section 9 is against "adoption", which may be shortly described as first use in Canada [see note 2 below]. The prohibition in section 11 is against "use". Thus, under either section, the definition of "use" is critical . . .
. . . . .
In so far as the wares distributed by the respondent are the books themselves, there can simply be no question that the word "Olympic" is used as a trade-mark within the meaning of subsection 4(1): it is marked on the wares themselves for the purpose of distinguishing them. Given, however, that the book is a promotional item and contains on its inside front cover and inside and outside back covers advertising for the respondent's films and cameras, and in so far as the latter are wares dealt in by the respondent, I think that the word "Olympic" is being used in association with those wares as well. If the appellant's marks were registered, as opposed to official, marks, the respondent's advertisements would clearly be caught by section 20. While not all use in advertising is use "in association with" wares "so as to distinguish" them [see note 3 below], some such uses are [see Wembley Inc. v. Wembley Neckwear Co. (1948), 7 Fox P.C. 244 (Ont. C.A.)]. Here the association between the mark and the wares is so close and so clearly related to their sale (notably in the coupons offering discounts on the price of the wares) that I am satisfied that the mark is used by the respondent as a trade-mark in association with them.
I conclude, therefore, on this aspect of the matter, that the respondent has used the appellant's official marks as a trade-mark for its books and for its films and cameras and that such use has been in connection with the respondent's business.
As indicated earlier, the learned Trial Judge found that Konica's use of the official marks in connection with its business was "otherwise" than as a trade-mark. I would simply indicate here that I would not wish to be taken as necessarily disagreeing with that finding; it is not incompatible with my further view that the uses that I have indicated constituted use as a trade-mark as well.
[65] On the facts before me, it appears that the defendant used the plaintiff's official marks as trade-marks for its services and that that use was made in respect of the defendant's business. The defendant thus appears to fall within sections 9 and 11 and to be covered by those sections. It therefore cannot adopt or use the plaintiff's official marks.
[66] If there was still the slightest doubt as to the adoption or use of official marks as trade-marks, the provisions of section 9 amply cover any such uncertainty. It is worth repeating that section 9 of the Trade-Marks Act states that "no person shall adopt in connexion with a business, as a trade-mark or otherwise . . .".
[67] The decisions of the courts have clarified the scope of this provision.
[68] The word "otherwise", or "autrement" in the French version of the Trade-Marks Act, was interpreted by Denault J. in Canadian Olympic Association v. Konica Canada Inc., [1990] 2 F.C. 703 (F.C.T.D.).
[69] It is worth noting that that case was appealed, but the Federal Court of Appeal did not disagree with the trial judge on the interpretation of the word "otherwise".
[70] In Canadian Olympic Association v. Konica Canada Inc., [1990] 2 F.C. 703 (F.C.T.D.), Denault J. indicated:
Furthermore, I reject the defendant's argument as to the unconstitutionality of sections 9 and 11. Counsel for the defendant relied heavily on the meaning he ascribed to the words "or otherwise". He submitted that the defendant's use of the mark "Olympic" was otherwise than as a trade mark, as it was part of the title that was stipulated for the book in its licensing agreement with the publisher. The defendant submits it had no choice under its contract but to use the title and sub-title already in use by the publisher. Then the defendant submitted that in prohibiting the use of the word "Olympic" other than as a trade mark Parliament has overstepped its jurisdiction, and gone beyond its trade and commerce power and infringed upon the province's jurisdiction over property and civil rights. The defendant states that if the words "or otherwise" are interpreted as the plaintiff suggests so as to interfere with its legitimate contractual agreement with the publisher of its premium addition of the Guinness book, then the Court is condoning an ultra vires intention of Parliament. Counsel went so far as to suggest that the present wording of the statute prohibits any use, even every day common parlance uses, of official marks. With respect I do not think the Act makes any such provision. The words "or otherwise" have to be interpreted in their context. When properly interpreted, the words cannot have the ultra vires character which the defendant has imputed to them. I would recall here the opening words of both sections 9 and 11, which are as follows:
No person shall adopt, in connection with a business, as a trade mark or otherwise . . .
The words "as a trade mark or otherwise" merely reinforce the main qualifier in those sections which are [sic] the words "in connection with a business". Thus the words "or otherwise" actually mean "or in connection with a business in any other way". The sections do not prohibit uses which have no commercial purpose. In fact I would think that they do not even prevent the use of marks unless the use of that mark is primarily for a business purpose. Counsel for the plaintiff suggested that if the plaintiff so desired it could sue Guinness itself, or anyone else who used its official marks in an editorial context, but that as a matter of internal policy the Canadian Olympic Association did not contest the use of its marks in an editorial context. I have some doubts as to whether the plaintiff could actually succeed if it reversed its policy and launched such actions. While our news media and publishing industry may be strongly influenced by market incentives, I tend to think the courts must initially proceed on the assumption that their primary motivation is not profit.
The defendant Konica however is a manufacturer of photographic equipment and wares; its foray into the field of Canadian publishing, it may safely be assumed, is primarily in order to promote its own products. Thus it is a use "in connection with a business" albeit otherwise than as a trade mark. The defendant was required under its licensing agreement to use the title and sub-title it did, containing as they do words which may appear to be the official marks of the plaintiff.
[71] On the word "otherwise", the Federal Court of Appeal has indicated, also in Konica:
In the second place, the respondent alleged that the words "or otherwise" as they appear in sections 9 and 11 of the Trade-marks Act were ultra vires of [sic] the Parliament of Canada as they are unlimited in application and can operate so as to restrict freedom of speech and to restrain the exercise of ordinary civil rights within the provinces. The Attorney General of Canada sought and obtained leave to intervene on this point but we did not find it necessary to call upon him. In my view, a reading of the plain words of sections 9 and 11 in their context restricts the scope of the words "or otherwise" to use of an official mark, or one so nearly resembling it as to be likely to be mistaken for it, in connection with a business. When so read, the prohibition is functionally related to the regulatory scheme of the Act as a whole. Its purpose is manifestly to round out and complete that scheme and it is not ultra vires. [See, in the same vein, this Court's decision with regard to another section of the Act in Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd. (1987), 14 C.P.R. 3rd 314.]
[72] In my view, if it could not be shown that the defendant is using official marks as trade-marks, its actions would fall under the word "otherwise". The defendant is using the official marks in connection with its business so as to identify and distinguish the products. To repeat the words of Denault J. in Konica, the defendant has adopted the plaintiff's marks "in connection with a business in any other way".
[73] The plaintiff maintained that the defendant is using marks similar to its official marks, like the mark 6-49. In this regard, section 9 provides that no person shall adopt, as a trade-mark or otherwise, marks so nearly resembling official marks as to be likely to be mistaken for them.
[74] The test of resemblance was explained by Denault J. as follows:
Secondly, I accept that the title and subtitle of the defendant's book so nearly resemble as to be likely to be mistaken for some of the official marks registered by the plaintiff. The defendant did not strongly contest that point. Furthermore, it was established by the Registrar in The Queen v. Kruger ([1978), 44 C.P.R. (2d) 135 (Reg. T.M.), at page 139 that the resemblance test in subparagraph 9(1)(n)(iii) of the Act is even less stringent than the test for confusion. Resemblance of the official mark and the adopted mark is the only factor to be considered, other considerations deemed relevant in trade-mark cases, such as those listed in subsection 6(5) are not relevant in this case. Based on the foregoing, I find that the resemblance test has been met.
[75] In Johnny Carson v. William A. Reynolds, [1980] 2 F.C. 685 (F.C.), at 690, it was Mahoney J. who explained the scope of the protection provided by subparagaph 9(1)(n)(iii) of the Trade-Marks Act:
[Section 9(1)] is clearly aimed at the prohibition of the commercial exploitation of a range of institutions, none of which would appear amenable to injury in their commercial interests, if any, by such exploitation. It is an absolute prohibition not dependant upon proof of injury or damage.
[76] In Insurance Corporation of British Columbia v. Registrar of Trade-Marks, [1980] 1 F.C. 669 (F.C.), at 683, Cattanach J. went further:
The logical consequence of the prohibition of the adoption and use of any mark as a trade mark or otherwise consisting of or resembling any of the devices mentioned in section 9 is to reserve the persons and bodies mentioned the exclusive user of those devices.
[77] Later, at 684:
I fully realize the consequences. A public authority may embark upon a venture of supplying wares and services to the public and in so doing adopt an official mark. Having done so then all other persons are precluded from using that mark and, as a result of doing so, on its own initiative, the public authority can appropriate unto itself the mark so adopted and used by it without restriction or control other than its own conscience and the ultimate will of the electorate expressed by the method available to it.
[78] I therefore agree with the suggestion by counsel for the plaintiff that the official marks were thus created for the purpose of reserving their exclusive user to public authorities and that the protection given to official marks is much wider than that given to registered trade-marks by the addition of the words "or otherwise".
[79] As to the protection given to the public authorities in respect of official marks, the commercial exploitation by third parties of such official marks has already been dealt with in Techniquip Ltd. v. Canadian Olympic Association, [1998] F.C.J. No. 280 (F.C.T.D.), at 11:
In my view, the intent of section 9 is to remove all the kinds of marks as listed above from the field of trade or business. It is to preclude any person from capitalizing on any well known, respected public symbol and adopting it for his own wares or services. These emblems, badges or crests are associated with public institutions, not involved in trade or business, but which nevertheless are deemed to be invested with respectability, credibility and other civic virtues. Section 9, in a sense, ensures that these symbols do not become pawns of trade or proprietorship.
[80] In The Queen in Right of British Colombia and Expo 86 Corporation v. Mihaljevic et al. (1986), 10 C.P.R. (3d) 374 (B.C.S.C.), at 374, Wallace J. explained the justification for reserving to a public authority the exclusive use of its official marks:
The justification for reserving to the public authority the exclusive use of an "official mark" is readily apparent from the circumstances of the present case. The province, through the Expo 86 Corporation, has expended vast sums to promote and conduct an international exposition. Without such effort and expenditure the mark EXPO 86 and related marks would not have any commercial value. Licensing the use of the mark EXPO 86 and other related marks is one way the Expo 86 Corporation may recoup some of the expenditures it has incurred. However, the right to licence the use of the official mark to other organizations would be valueless if an entrepreneur could sit on the sidelines and await the commercial development of the mark by the corporation and then market his wares, using the mark developed at the expense of the corporation, without being required to pay the corporation for that privilege.
[81] Counsel for the defendant suggested that registration of an Official Mark under section 9 should be reserved more for the protection of official marks of a public nature such as national flags, crests or emblems.
[82] Counsel for the defendant suggested, most ably I might add, that the very form of section 9 of the Act leaves little scope for the commercial use that might be made of any mark adopted and used by a public authority as an Official Mark for wares or services.
[83] Counsel concluded that the plaintiff's activities, which involve selling lottery tickets, are a commercial activity inconsistent with the provisions of subparagraph 9.1(n)(iii) and that as this purely commercial use of selling lottery tickets at retail is not consistent with the spirit of the provision in subparagraph 9.1(n)(iii) it would be a bar to the plaintiff claiming protection for its official marks by an order for an injunction.
[84] Although this argument drew the Court's attention and also led it to reflect on the scope of the provisions applicable in the case at bar, the argument does not hold water and the very wording of the provisions of the Act, in particular section 9, is quite clear. If the defendant had wanted to challenge a wrongful use of an official mark legally held by the plaintiff, this Court is surely not the proper forum to deal with it and the defendant's argument must be dismissed.
[85] It thus seems clear that the defendant is using the plaintiff's official marks for commercial purposes. In this regard, its information guide (Exhibit PD-2, tab 12) explains:
[TRANSLATION]
(Club Lotto)
is made up of lottery players who wish to maximize their chances of winning the Canadian 6/49 GRAND PRIZE.
(My emphasis.)
[86] The plaintiff was quite right to say that the LOTTO 6/49 lottery is at the very core of the defendant's business, and this was admitted by Claude Bécotte, the defendant's president:
[TRANSLATION]
Q. In order to sell shares in your business, is it true that you do not do promotion or you do not have to involve yourself in the description of the 6/49 lottery?
A. Absolutely. Then if I want to sell . . . if I want to sell shares in the Club, the idea of giving us authority to manage a group share in trust - I absolutely must tell them what product we are going to buy.[1]
[87] I am therefore persuaded that the reply to the first question is yes.
2. Did the defendant's activities constitute unfair competition contrary to paragraphs 7(a), (b), (d)(i) and (e) of the Trade-Marks Act?
[88] Section 7 of the Trade-Marks Act provides:
| 7. No person shall
(a) make a false or misleading statement tending to discredit the business, wares or services of a competitor;
(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;
(c) pass off other wares or services as and for those ordered or requested;
(d) make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition, (ii) the geographical origin, or(iii) the mode of the manufacture, production or performance of the wares or services; or
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada. |
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7. Nul ne peut :
a) faire une déclaration fausse ou trompeuse tendant à discréditer l'entreprise, les marchandises ou les services d'un concurrent;
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;
c) faire passer d'autres marchandises ou services pour ceux qui sont commandés ou demandés;
d) utiliser, en liaison avec des marchandises ou services, une désignation qui est fausse sous un rapport essentiel et de nature à tromper le public en ce qui regarde : (i) soit leurs caractéristiques, leur qualité, quantité ou composition, (ii) soit leur origine géographique,
(iii) soit leur mode de fabrication, de production ou d'exécution;
e) faire un autre acte ou adopter une autre méthode d'affaires contraire aux honnêtes usages industriels ou commerciaux ayant cours au Canada. |
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[89] The following definitions apply to section 7 of the Trade-Marks Act.
| "confusing", when applied as an adjective to a trade-mark or trade-name, means a trade-mark or trade-name the use of which would cause confusion in the manner and circumstances described in section 6; |
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"créant de la confusion" Relativement à une marque de commerce ou un nom commercial, s'entend au sens de l'article 6. |
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| "person" includes any lawful trade union and any lawful association engaged in trade or business or the promotion thereof, and the administrative authority of any country, state, province, municipality or other organized administrative area; |
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"personne" Sont assimilés à une personne tout syndicat ouvrier légitime et toute association légitime se livrant à un commerce ou à une entreprise, ou au développement de ce commerce ou de cette entreprise, ainsi que l'autorité administrative de tout pays ou État, de toute province, municipalité ou autre région administrative organisée.
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| "wares" includes printed publications. |
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"marchandises" Sont assimilées aux marchandises les publications imprimées.
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[90] Section 6 indicates when a trade-mark or trade-name creates confusion:
| 6. (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.
(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.
(3) The use of a trade-mark causes confusion with a trade-name if the use of both the trade-mark and trade-name in the same area would be likely to lead to the inference that the wares or services associated with the trade-mark and those associated with the business carried on under the trade-name are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.
(4) The use of a trade-name causes confusion with a trade-mark if the use of both the trade-name and trade-mark in the same area would be likely to lead to the inference that the wares or services associated with the business carried on under the trade-name and those associated with the trade-mark are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.
(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including (a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known; (b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them. |
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6. (1) Pour l'application de la présente loi, une marque de commerce ou un nom commercial crée de la confusion avec une autre marque de commerce ou un autre nom commercial si l'emploi de la marque de commerce ou du nom commercial en premier lieu mentionnés cause de la confusion avec la marque de commerce ou le nom commercial en dernier lieu mentionnés, de la manière et dans les circonstances décrites au présent article.
(2) L'emploi d'une marque de commerce crée de la confusion avec une autre marque de commerce lorsque l'emploi des deux marques de commerce dans la même région serait susceptible de faire conclure que les marchandises liées à ces marques de commerce sont fabriquées, vendues, données à bail ou louées, ou que les services liés à ces marques sont loués ou exécutés, par la même personne, que ces marchandises ou ces services soient ou non de la même catégorie générale.
(3) L'emploi d'une marque de commerce crée de la confusion avec un nom commercial, lorsque l'emploi des deux dans la même région serait susceptible de faire conclure que les marchandises liées à cette marque et les marchandises liées à l'entreprise poursuivie sous ce nom sont fabriquées, vendues, données à bail ou louées, ou que les services liés à cette marque et les services liés à l'entreprise poursuivie sous ce nom sont loués ou exécutés, par la même personne, que ces marchandises ou services soient ou non de la même catégorie générale.
(4) L'emploi d'un nom commercial crée de la confusion avec une marque de commerce, lorsque l'emploi des deux dans la même région serait susceptible de faire conclure que les marchandises liées à l'entreprise poursuivie sous ce nom et les marchandises liées à cette marque sont fabriquées, vendues, données à bail ou louées, ou que les services liés à l'entreprise poursuivie sous ce nom et les services liés à cette marque sont loués ou exécutés, par la même personne, que ces marchandises ou services soient ou non de la même catégorie générale.
(5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l'espèce, y compris: a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus; b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage; c) le genre de marchandises, services ou entreprises; d) la nature du commerce; e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent. |
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[91] H. G. Richard explains s. 7 of the Act in Canadian Trade-marks Act - annotated, rev. ed., Toronto, Carswell.
[92] On paragraph 7(a) H.G. Richard indicates, at p. 7-3, vol. 1:
Section 7(a) is a statutory equivalent of the common law tort of slander of title or injurious falsehood; malice or an intent to injure are not necessary elements in order to establish a breach of section 7(a).
[93] He goes on to analyse paragraph 7(b):
Section 7(b) is a statutory statement of the common law action of passing-off which is a form of misrepresentation whereby a trader takes "a free ride" on another person's goodwill by pretending that his wares, services or business are those of that other person. See MacDonald v. Vapor Canada Ltd. at 147, supra.
Any action by a trader which is likely to raise confusion in the mind of a consumer with respect to the source of his wares, services, or business may constitute an act of passing-off; "intention" does not consitute an element of a breach of section 7(b).
Under section 7(b) passing-off may be accomplished by different means: use of a confusing trade mark, trade name, get-up, signs, advertising, etc. Once a trader can prove that his services or business are recognized in the market-place by distinctive indicias, no other trader can use such indicias in a way to cause or likely to cause confusion. In order for the plaintiff to succeed in an action of passing-off, he must establish:
1- a proprietary right,
2- an invasion of the right, and
3- that the plaintiff has suffered or is likely to suffer damages due to the invasion of that right.
[94] In Anne of Green Gables Licensing Authority Inc. v. Avonlea Traditions Inc., [2000] O.J. No. 740, Wilson J. indicated:
"Passing-off" is a tort which arises in the content of trade-mark and copyright law. Justice Van Camp in the Crocodile Dundee case adopted the traditional test for the tort of passing-off as stated by Lord Diplock in Erven Warnink B.V. v. J. Townsend & Sons (Hull) Ltd., [1979] A.C. 731, [1979] 2 All E.R. 927 (H.L.), at 742 A.C., 932-3 All E.R. The following are the essential elements of that test:
1) a misrepresentation,
2) made by a trader in the course of trade,
3) to prospective customers of his or ultimate consumers of goods or services supplied by him,
4) of which a reasonably foreseeable consequence is that the misrepresentation will injure the business or goodwill of another trader, and
5) which causes actual damage to a business or goodwill of the trader by whom the action is brought.
Passing-off is prohibited by the Trade-marks Act at section 7 . . .
In order to found an action for passing-off, a plaintiff must meet the threshold of establishing that the name or trade-mark on which she relies has acquired goodwill or a public reputation in association with her goods or services: H.P. Bulmer, Ltd. and Showerings Ltd. v. J. Bollinger S.A., [1978] R.P.C. 79 at 117 (C.A.), Goff L.J. In Paramount, supra, Van Camp J. held that the defendant had not affected the plaintiff's goodwill related to its product, but rather to its licensing business.
Van Camp J. also relied on an Australian decision again dealing with the well known "Crocodile Dundee" character in the context of passing-off. Van Camp J. notes in Paramount at page 581 that in Hogan v. Koala Dundee Pty Ltd. (1988), 83 A.L.R. 187 (F.C.Gen.Div.), Pincus J. held that passing-off extends to cover the wrongful appropriation of reputation or "the wrongful association of goods with an image properly belonging to a person." Justice Pincus further states that "[t]he person may bring a passing-off suit in respect of an image including a name which is not connected with any business carried on by that person."
. . . . .
I conclude that the plaintiffs have met the threshold of proving the Anne of Green Gables name and trade-mark had acquired goodwill, or a public reputation. Further, I conclude that the plaintiff has proved the requisite five elements of the common law tort of passing-off. As well, the parallel statutory requirements of subsections 7(a) and (b) of the 1985 Trade-mark Act have been breached. Avonlea has misrepresented to customers explicitly or implicitly that the product is authorised by the Heirs or by the Anne Authority. Avonlea's actions have injured the business reputation of the Heirs and the Anne Authority and caused foreseeable damage to the business and goodwill of the Anne Authority.
[95] On paragraph 7(c), H.G. Richard indicates:
Section 7(c) prohibits the substitution of wares or services as and for those ordered or requested.
The facts giving rise to a cause of action under section 7(c) may also give rise to a civil action for a breach of contract. For example, if a trader delivers to a buyer wares of services different from those ordered or requested, the buyer may ask for the cancellation of the contract.
[96] Paragraph 7(d) is explained as follows:
Section 7(d) is directed to the protection of the public. In accordance with section 7(d), no one shall deceive the public by offereing wares or services under the cloak of representations that are false in a material respect and likely to mislead the public with respect to the character, quality, quantity or composition of wares or services, or in respect of their geographical origin, mode of manufacture, production or performance.
Depending on the facts, a breach of section 7(d) may also give rise to a cause of action based on a breach of contract.
[97] Finally, H.G. Richard says regarding paragraph 7(e):
In the past, section 7(e) was relied on in order to obtain relief from business practices contrary to honest industrial or commercial usage in Canada, such as a breach of confidence of an employee, misappropriation of confidential knowledge or trade secrets, industral expionage and the like.
[98] I have carefully reviewed each of the paragraphs of section 7 of the Trade-Marks Act. In this connection it is difficult to conclude that the defendant's commercial activities constitute unfair competition in the usual sense encountered in commercial practice.
[99] Only the plaintiff issues, sells and distributes LOTTO 6/49 tickets.
[100] The defendant, as clearly demonstrated both by documents and by the precise and detailed testimony of Mr. Bécotte, does not undertake to issue lottery tickets, but purchases all its tickets from the plaintiff and even in some measure enables the plaintiff to sell more lottery tickets as a result of its activities.
[101] Although the method selected by the defendant of getting people together to make up its club and using the multi-tier method as a marketing approach for its representatives may seem highly questionable in the circumstances, there does not seem to be any need to discuss this particular aspect of the matter, as to either its legality or even its legitimacy.
[102] However, it is worth undertaking an analysis of the actions taken by the defendant.
[103] Essentially, in its advertising the defendant states that by using a statistical software the numbers selected by the member groups in its club will be chosen from the "hottest" numbers in order to "maximize" chances of winning.
[104] Mr. Bécotte, the defendant's representative, was questioned on this at length and it would appear that essentially the statistical software identifies the numbers which have come up most often in the past and which would therefore be likely to be most often selected when subsequent draws are made.
[105] This point was admitted by the defendant and does not in any way alter the general view that the fundamental principle of the 6/49 lottery is that the selection of winning numbers is completely random.
[106] It was admitted by both parties that there is no means or software by which a person can select numbers which are most likely to come up in subsequent draws.
[107] However, it is possible that people might be interested in obtaining lottery tickets with numbers that have been drawn most often in the past, as they might thus have the impression that they have a greater chance of winning.
[108] If the plaintiff has sold more than seven and a half billion dollars in LOTTO 6/49 tickets since its creation, I have no doubt that people could be influenced by this kind of argument which has no scientific validity.
[109] It would be going too far to suggest that the defendant made misleading representations when it suggested to possible customers that they had a greater chance of winning if they selected their future tickets from numbers which have come up most frequently in the past.
[110] On paragraph 7(a) of the Act, it does not seem possible for the Court to accept the plaintiff's allegations that the defendant made a false or misleading statement tending to discredit the business, goods or services of a competitor.
[111] On paragraph 7(b), according to the evidence submitted to the Court, it was not clearly established that the defendant's conduct could constitute an action seeking to:
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.
[112] On subparagraph 7(d)(i), the plaintiff was unable to persuade the Court that the defendant had:
[made] use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to
(i) the character, quality, quantity or composition . . . of the wares or services . . .
[113] Finally, no representation was made to the Court regarding a breach of paragraph 7(e).
[114] I examined the documents filed by the defendant and was unable to conclude that the documents filed by it were likely to mislead the public, either as to the character of the services offered by the defendant or as to the character of the products offered by the plaintiff.
[115] I therefore conclude that the defendant's activities do not constitute unfair competition pursuant to the provisions of section 7 and a negative answer must be given to question 2.
3. Did the defendant infringe the plaintiff's copyrights by reproducing in whole or in part the plaintiff's lottery tickets and the plaintiff's group agreements and tables, contrary to sections 3 and 27 of the Copyright Act?
[116] Section 3 of the Copyright Act provides:
| 3. (1) For the purposes of this Act, "copyright", in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right
(a) to produce, reproduce, perform or publish any translation of the work,
(b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work,
(c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise,
(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,
(e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work,
(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,
(g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan,
(h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program, and
(i) in the case of a musical work, to rent out a sound recording in which the work is embodied,
and to authorize any such acts. |
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3. (1) Le droit d'auteur sur l'oeuvre comporte le droit exclusif de produire ou reproduire la totalité ou une partie importante de l'oeuvre, sous une forme matérielle quelconque, d'en exécuter ou d'en représenter la totalité ou une partie importante en public et, si l'oeuvre n'est pas publiée, d'en publier la totalité ou une partie importante; ce droit comporte, en outre, le droit exclusif :
a) de produire, reproduire, représenter ou publier une traduction de l'oeuvre;
b) s'il s'agit d'une oeuvre dramatique, de la transformer en un roman ou en une autre oeuvre non dramatique;
c) s'il s'agit d'un roman ou d'une autre oeuvre non dramatique, ou d'une oeuvre artistique, de transformer cette oeuvre en une oeuvre dramatique, par voie de représentation publique ou autrement;
d) s'il s'agit d'une oeuvre littéraire, dramatique ou musicale, d'en faire un enregistrement sonore, film cinématographique ou autre support, à l'aide desquels l'oeuvre peut être reproduite, représentée ou exécutée mécaniquement;
e) s'il s'agit d'une oeuvre littéraire, dramatique, musicale ou artistique, de reproduire, d'adapter et de présenter publiquement l'oeuvre en tant qu'oeuvre cinématographique;
f) de communiquer au public, par télécommunication, une oeuvre littéraire, dramatique, musicale ou artistique;
g) de présenter au public lors d'une exposition, à des fins autres que la vente ou la location, une oeuvre artistique - autre qu'une carte géographique ou marine, un plan ou un graphique - créée après le 7 juin 1988;
h) de louer un programme d'ordinateur qui peut être reproduit dans le cadre normal de son utilisation, sauf la reproduction effectuée pendant son exécution avec un ordinateur ou autre machine ou appareil;
i) s'il s'agit d'une oeuvre musicale, d'en louer tout enregistrement sonore.
Est inclus dans la présente définition le droit exclusif d'autoriser ces actes. |
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[117] Subsection 27(1), for its part, indicates what constitutes an infringement of copyright:
| 27. (1) It is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.
(2) It is an infringement of copyright for any person to
(a) sell or rent out,
(b) distribute to such an extent as to affect prejudicially the owner of the copyright,
(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public, (d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or
(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),
a copy of a work, sound recording or fixation of a performer's performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it. |
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27. (1) Constitue une violation du droit d'auteur l'accomplissement, sans le consentement du titulaire de ce droit, d'un acte qu'en vertu de la présente loi seul ce titulaire a la faculté d'accomplir.
(2) Constitue une violation du droit d'auteur l'accomplissement de tout acte ci-après en ce qui a trait à l'exemplaire d'une oeuvre, d'une fixation d'une prestation, d'un enregistrement sonore ou d'une fixation d'un signal de communication alors que la personne qui accomplit l'acte sait ou devrait savoir que la production de l'exemplaire constitue une violation de ce droit, ou en constituerait une si l'exemplaire avait été produit au Canada par la personne qui l'a produit : a) la vente ou la location;
b) la mise en circulation de façon à porter préjudice au titulaire du droit d'auteur;
c) la mise en circulation, la mise ou l'offre en vente ou en location, ou l'exposition en public, dans un but commercial;
d) la possession en vue de l'un ou l'autre des actes visés aux alinéas a) à c);
e) l'importation au Canada en vue de l'un ou l'autre des actes visés aux alinéas a) à c).
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[118] It must first be determined whether the plaintiff in fact has copyrights to the lottery tickets and the group agreements and tables.
[119] On the reproduction of the plaintiff's LOTTO 6/49 lottery tickets by the defendant, the latter's president admitted that, in particular, the advertising set out at tab 17 of Exhibit PD-2 was a copy of LOTTO 6/49 tickets, an example of which appeared at tab 4 of Exhibit PD-2.
[120] As the parties had already admitted in paragraph 2 of the admissions filed at the hearing that the plaintiff was the owner of copyrights in these LOTTO 6/49 lottery tickets, I have no hesitation in concluding that the defendant infringed the copyrights owned by the plaintiff.
[121] The defendant's tables of combinations in the exhibits set out at tabs 18 and 19 of Exhibit PD-2 reproduce almost in full a part of the table appearing on the plaintiff's "Combination" ticket, which was itself filed as tab 5 of Exhibit PD-2.
[122] Although the tables set out in the documents filed in tabs 12, 13, 14, 15 and 16 were altered in part, they essentially represent a reproduction of the table appearing in the plaintiff's "Combination" ticket at tab 5 of Exhibit PD-2.
[123] It was previously admitted, in accordance with the list of admissions filed herein, that the plaintiff is the owner of copyrights in the table of combinations (except for the results of the mathematical calculations) reproduced in Appendix B.
[124] According to precedent, there are two conditions for an infringing copy to exist: first, a connection must be established between the original work and the copy, that is it must be possible to show that the original work is the actual source of the copy. Secondly, it must be shown that sufficient objective resemblances exist between the original work and the copy for the latter to be regarded as a reproduction or adaptation of the original, though not necessarily completely identical.
[125] It seems clear that the defendant had access to the plaintiff's table of combinations, and in some cases used the same layout for the table. It was even admitted by the defendant's representative that the latter used the plaintiff's documents to prepare the defendant's tables.
[126] Consequently, I have no hesitation in concluding that this reproduction by the defendant of the plaintiff's combination table was done without right or authorization and that this constitutes an infringement of the plaintiff's copyrights in its combination table.
[127] The plaintiff further argued that the defendant reproduced a substantial part of the Loto-Québec group agreements in the documentation provided to its members, without right or prior authorization. The plaintiff maintained that it is owner of the copyrights in the group agreement set out in Appendix A, in the list of admissions filed at the hearing.
[128] First, the plaintiff was right to say that the defendant had access to the plaintiff's group agreement, as was admitted by the defendant's president in the examination for discovery:
[TRANSLATION]
Q. O.K. The participation agreement which is included in your presentation guide . . .
A. Yes.
Q. . . . who originated it?
A. I did it, from beginning to end. I took the one from Loto-Québec and said "If our members find it is too costly at $70, they will have an opportunity to form a group under a ball" - what we call a ball, in a position. We then gave them a model group which . . . it's simple, we took general features that were in the other one, we put on our own specifications and then it became ours, because it was not identified with Loto-Québec in any way.
Q. O.K. When you say "the other one", you are speaking of . . .
A. The Loto-Québec one.
Q. . . . the Loto-Québec group agreement.
A. Yes, yes, yes, yes.
Q. O.K.
A. We hereby . . . we copied that . . . we hereby . . . we copied that.[2]
[129] Comparing the plaintiff's group agreement with that of the defendant certain similarities may be noted, such as:
[TRANSLATION]
- The Loto-Québec group agreement indicates: "We the undersigned hereby declare that we are the joint owners in the proportions stated beside our respective names of the lottery tickets having the numbers mentioned below". The Club Lotto group agreement is to the following effect: "We the undersigned hereby declare that we participate jointly with the following member in the Club Lotto C.L.I.: , having PIN number: , in the proportions stated beside our respective names, in the purchase of a share in one of the Club Lotto C.L.I. groups".
- The Loto-Québec group agreement states "If one or more of these tickets is a winner, we undertake to share the prize(s) in the proportions stated below". Club Lotto states "If his or her participation in a C.L.I. group is successful, the member undertakes, and we undertake, to share the winnings in the proportions stated below".
- The Loto-Québec group agreement states: "We authorize to purchase tickets in our names, endorse the tickets in trust for the group and make a division as stated below". In the same way, Club Lotto indicates in its group agreement that "We authorize this member of Club Lotto C.L.I. to participate in his or her name in trust for and on behalf of all the members of the group which we form on this date for the duration of the "Certification of Participation" which Club Lotto C.L.I. shall send this member, our agent".
- The Loto-Québec group agreement mentions that "This agreement is only binding on the undersigned and the trustee. We acknowledge that Loto-Québec is not bound by these terms and, despite what is stipulated herein, will make payment of prizes to the name(s) printed on the reverse of the winning tickets". In the case of Club Lotto, it states: "This agreement is only binding on the undersigned and our trustee. We acknowledge that Club Lotto International C.L.I. is not bound by the terms hereof and, despite what is stipulated herein, we acknowledge that Club Lotto C.L.I. shall make any payment to its member, the trustee of our group".
- Under the space reserved for signatures, the Loto-Québec agreement indicates: "Signature of official in trust certifying acceptance of the aforementioned". In the same way, Club Lotto states in the space reserved for signatures: "Signature of official in trust certifying acceptance of the foregoing".[3]
[130] Further to the admission by Mr. Bécotte to which I referred earlier, and in light of the similarities identified in the preceding paragraphs, I have no hesitation in concluding that the defendant's group agreement is only a disguised imitation of the plaintiff's group agreement. Consequently, I have no hesitation in concluding that the defendant infringed the plaintiff's copyrights in its group agreements.
4. Should a permanent injunction be granted against the defendant?
[131] It is important to note at the outset that the parties agreed that the liquidated damages, if awarded, would be set at $1 and that if the plaintiff was successful it did not intend to claim further amounts as damages.
[132] The parties further agreed that they were consenting to a waiver of the reference previously ordered by the prothonotary Morneau on damages, as that reference is now pointless.
[133] That leaves the only valid remedy claimed by the plaintiff, namely a permanent injunction. In view of the evidence heard and the conclusions at which the Court has arrived on the infringement of the plaintiff's copyrights and the illegal use of the official marks which are the property of the plaintiff, I have no hesitation in concluding that the plaintiff is entitled to compensation and consequently that a permanent injunction should be granted.
[134] The Court accordingly:
1. issues a permanent injunction directing the defendant, its officers, directors, representatives and any other person having knowledge of this order, subject to all legal penalties, to:
(a) cease any use as a trade-mark or otherwise of the plaintiff's official marks, including the marks LOTTO 6/49 or 6/49 and 6-49, and of any other mark or expression that may create confusion with the plaintiff's official marks;
(b) cease offering, selling or marketing in any way whatsoever, directly or indirectly, products and services having any advertising, including any advertisement, brochure, sign or other material referring to the official marks LOTTO 6/49, 6/49 or to 6-49 and any other mark or expression which may create confusion with the plaintiff's official marks;
(c) withdraw from the market any advertising or other documentary material in its possession or under its control referring to the official marks LOTTO 6/49, 6/49 or to 6-49 and to any other mark or expression which may create confusion with the plaintiff's official marks;
(d) cease reproducing, in whole or in part, the plaintiff's documentary material, including its group agreements, in any form whatsoever;
(e) cease reproducing the plaintiff's LOTTO 6/49 lottery tickets in whole or in part in any form whatsoever;
(f) withdraw from the market any advertising or documentary material in its possession or under its control which involves the reproduction of the plaintiff's documentary material in whole or in part, including its group agreements;
(g) withdraw from the market any advertising or documentary material in its possession or under its control that consists of the reproduction of the plaintiff's LOTTO 6/49 lottery tickets in whole or in part; and
(h) refrain from seeking to encourage, assist or authorize any person in any way whatsoever to commit or attempt to commit the aforementioned acts;
2. orders the defendant to pay the plaintiff liquidated damages set in the amount of $1 for infringement of the plaintiff's official marks, depreciation of the good will associated with the official marks and infringement of the plaintiff's copyrights;
3. orders the defendant to pay costs.
Pierre Blais Judge
OTTAWA, ONTARIO
January 25, 2001
Certified true translation
Suzanne M. Gauthier, LL.L. Trad. a.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT No.: T-305-98
STYLE OF CAUSE: SOCIÉTÉ DES LOTERIES DU QUÉBEC
v.
CLUB LOTTO INTERNATIONAL CLI INC.
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: January 8, 2001
REASONS FOR JUDGMENT AND JUDGMENT
DATED: January 25, 2001
APPEARANCES:
Léanne Souquet FOR THE PLAINTIFF
& Johanne Gauthier
Denis Racine FOR THE DEFENDANT
SOLICITORS OF RECORD:
Ogilvy, Renault FOR THE PLAINTIFF
Montréal, Quebec
Bussières, Boulanger, Racine FOR THE DEFENDANT
& Langevin, Attorneys
Sainte-Foy, Quebec
[1] Examination for discovery of Claude Bécotte, held on October 21, 1998, pp. 156-157.
[2] Examination for discovery of Claude Bécotte, held on October 21, 1998, at pp. 185-186.
[3] - Loto-Québec group purchase agreement, Exhibit PD-2, tab 9.
- Club Lotto group participation agreement, at p. 6, Exhibit PD-2, tab 15.