Federal Court Decisions

 

 

Date: 20121205

Docket: T-833-12

Citation: 2012 FC 1430

Ottawa, Ontario, December 5, 2012

PRESENT:    The Honourable Mr. Justice Scott

 

 

BETWEEN:

	THE DRIVING ALTERNATIVE INC
		Plaintiff
	and
	AMANDA JARVIS dba KEYZ PLEEZZ
		Defendant

 

           REASONS FOR ORDER AND ORDER

 

I.          Introduction

 

[1]               This proceeding is an Action for trade-mark infringement, passing off and depreciation of goodwill wherein the Plaintiff alleges that the Defendant has infringed and continues to infringe the Plaintiff’s registered trade-mark KEYS PLEASE, as the result of the Defendant’s operation of an alternative driving service in association with the trade-mark and trade-name KEYZ PLEEZZ.

 

 

II.        Procedural history

 

[2]               A Statement of Claim was issued on April 24, 2012, against the Defendant.

 

[3]               Immediately following the issuance of the Statement of Claim on April 24, 2012, Canadian Process Serving Ottawa [CPSO], a professional process serving organization, was contacted to have an agent located in Oshawa, Ontario, to effect service on the Defendant, Amanda Jarvis, doing business as KEYZ PLEEZZ, at 178 Beatty Avenue, Oshawa, Ontario, L1H 3B2, the business address given on the Defendant’s Business Name Registration.

 

[4]               The Plaintiff experienced substantial difficulty in effecting personal service on the Defendant since the individual who answered the door refused to accept service and returned the Statement of Claim to the agent who was attempting to serve the document.

 

[5]               Between May 17 and May 20, 2012, an employee of the Plaintiff, THE DRIVING ALTERNATIVE, INC., telephoned KEYZ PLEEZZ in Oshawa on three separate occasions, at the telephone number provided on the Defendant’s website and in each instance received a recorded greeting confirming that the caller had reached Keys Please or Keyz Pleezz. The said employee then looked up the phone number on her iPhone Search Engine and received the following information:  Keyz Pleezz (289) 927-7590 located at 178 Beatty Avenue in Oshawa, ON, L1H 3B2.

 

[6]               On May 22, 2012, the process servers were instructed to attempt again to serve the Defendant with the Statement of Claim in Oshawa, Ontario. The agent in Oshawa, Ontario attended at the address over the weekend without success. On May 29, 2012, a further attempt to effect service was made at 178 Beatty Avenue, Oshawa, Ontario.

 

[7]               Repeated attempts were made to serve the Statement of Claim and it was not until June 10, 2012 that the process server again attended at 178 Beatty Avenue and successfully delivered the Statement of Claim document to Mr. Picton. An affidavit of service was signed by Sheila Garnett of the Town of Courtice, in the Regional Municipality of Clarington and dated June 21, 2012.

 

[8]               A further copy of the Statement of Claim was addressed by regular mail to Amanda Jarvis, 178 Beatty Avenue, Oshawa, ON, L1H 3B2, on June 21, 2012. On July 26, 2012, Plaintiff’s counsel was advised by the Federal Court Registry that the Statement of Claim, sent by regular mail to the Defendant, had been returned to the Federal Court. The original envelope addressed to Amanda Jarvis had been opened and the phrase “NOT AT THIS ADDRESS” was hand-written adjacent to the address on the front of the envelope.

 

[9]               As a result of the foregoing, the Plaintiff brought a Motion before this Court under Rule 147 of the Federal Courts Rules, SOR/98-106, requesting validation of the service which had already been effected, and Rule 136, permitting the substituted service of the Statement of Claim and other documents by registered and regular mail.

 

[10]           By order of Mr. Justice Beaudry of this Court, it was held that the Defendant had been avoiding service, that the service previously effected was valid service pursuant to Rule 147 and that further documents could be validly served by addressing such documents by registered and regular mail to the address given on the Defendant’s Business Name Registration.

 

[11]           The Defendant was thus validly served with the Statement of Claim when service was effected by the service of the document on an adult person at the Defendant’s home and business address. As stated in the affidavit of service of Sheila Garnett dated June 21, 2012 and filed in this Court, the said valid service was effected on June 10, 2012.

 

[12]           The Defendant has not filed or served a Statement of Defence or any other documentation and as such, is in default pursuant to the provisions of Rules 204 and 210 of the Federal Courts Rules.

 

[13]           The Plaintiff, seeks and order

(a)                enjoining the Defendant, her servants, agents employees, representatives distributors, licensees and all those over whom she exercises control from using or advertising the trade-mark KEYZ PLEEZE or any other trade-mark or trade-name which is confusingly similar, either visually or phonetically, to the Plaintiff’s registered trade-mark KEYS PLEASE;

(b)               condemning the Defendant to deliver up to the Plaintiff or destroy under oath any signage, labelling, documents, advertising or any other matter in the possession or control of the Defendant, the use of which would offend the injunction set out in the previous paragraph;

(c)                condemning the Defendant to pay the Plaintiff’s damages in the amount of $70,000 (CDN) plus interest thereon in excess of the prime rate, as of the date that the Defendant first commenced use of the trade-mark KEYZ PLEEZE;  and

(d)               condemning the Defendant to pay the Plaintiff it’s costs on an enhanced basis pursuant to Column 5 including HST thereon, in view of the Defendant’s avoidance of service which resulted in additional legal costs and disbursements for the Plaintiff; and to pay pre-judgment and post-judgment interest, as well as all applicable taxes on the award of damages and costs.

 

III.      Facts

 

[14]           The Plaintiff is the owner of the trade-mark KEYS PLEASE registered under No. TMA 570,390 in association with: “Providing professional designated driving services, namely meeting customers at predetermined locations and driving them to their destination in their own vehicles; providing taxi, limousine and chauffeur services.”  The Plaintiff’s designated driving services under its registered trade-mark have been continuously offered in Canada since August 28, 1997 as evidenced by the certified copy of Registration No. TMA 570,390 filed.

 

[15]           The Plaintiff has also continuously advertised its services since the inception of the company in 1997. The Plaintiff advertises its services through posters and handouts, as well as on its website. The Plaintiff also communicated with its current and potential clients through Facebook, as well as having a 1-866 telephone number (as evidenced by the Greenwood Affidavit, paras 9-14, Plaintiff’s Motion Record [PMR], pages 27-28).

 

[16]           In addition to providing designated driving services itself under the trade-mark KEYS PLEASE since 1997, the Plaintiff also licensed the trade-mark and continues to offer franchise opportunities throughout Canada. Since the inception of its services under the KEYS PLEASE mark, the Plaintiff and its licensees have had sales in excess of 15,000,000 (15 million) dollars in Canada and have expended substantial sums in advertising their services under the trade-mark (Greenwood Affidavit, paras 3-5 and 23, PMR, page 26).

 

[17]           During the month of February 2012, the Plaintiff became aware that the Defendant had opened a business in Oshawa, Ontario, offering designated driving services to the public under the trade-mark KEYZ PLEEZZ (Greenwood Affidavit, paras 15-16, PMR, page 28).

 

[18]           The Plaintiff began to investigate the matter and discovered that on February 3, 2012, the Defendant registered the business name, Keyz Pleezz pursuant to the Business Names Act of Ontario, RSO 1990, c B.17. In that document, the Defendant’s activities are described as “designated driving service” (Allen Affidavit, para 3, Exhibit 1, Plaintiff’s Motion Record [PMR], Tabs F and F1, pages 135, 140-142;  Greenwood Affidavit, paras 16-17, PMR, Tabs D and D6, pages 28, 91-100).

 

[19]           The Plaintiff also discovered that the Defendant was advertising its services on the internet and on Facebook under the trade-mark KEYZ PLEEZZ and had begun placing posters bearing the mark in retail outlets, restaurants, bars and entertainment outlets in the Oshawa/Durham area. It was also found that when potential customers call the Defendant’s business telephone number, the Defendant identifies her business as KEYZ PLEEZZ which is a phonetic equivalent of and is indistinguishable from the Plaintiff’s registered trade-mark KEYS PLEASE. The Defendant also describes her services as alternate or designated driving services on the telephone (Greenwood Affidavit, paras 16 and 17, Exhibit 6, PMR, Tabs D, D6, pages 28, 91-100;  Philips Affidavit, paras 1-10, Exhibits 1-2, PMR, Tabs C, C1 and C2, pages 12-24).

 

[20]           The Plaintiff, on learning of the Defendant’s activities, immediately instructed counsel to send out a cease and desist letter requesting that the Defendant cease infringing the Plaintiff’s trade-mark. Two cease and desist letters were sent to the Defendant who declined to cease the use of the trade-mark KEYZ PLEEZZ (Greenwood Affidavit, paras 16 and 17, Exhibits 7 and 10, PMR, Tabs D, D7, D10, pages 28, 101-116, 127-128).

 

[21]           In the face of the Defendant’s refusal to cease using the offending trade-mark, the Plaintiff commenced an action on April 24, 2012. The proceeding is an Action for trade-mark infringement, passing off and depreciation of goodwill wherein the Plaintiff alleges that the Defendant has infringed and continues to infringe the Plaintiff’s registered trade-mark KEYS PLEASE, as the result of the Defendant’s operation of a designated driving service in association with the trade-mark and trade-name KEYZ PLEEZZ (Statement of Claim, PMR, Tab G, pages 163-178).

 

IV.       Relevant legislation

 

[22]           The applicable sections of the Trade-marks Act, RSC 1985, cT-13 [Trade-marks Act], are appended to this decision.

 

V.        Analysis

 

Section 19 – Right to exclusive use of the Plaintiff’s trade-mark

 

[23]           “The registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services” (Trade-marks Act, s 19).

 

[24]           Since the Plaintiff’s trade-mark, as defined above, is validly registered in respect of providing wares, and professional designated driving services, namely meeting customers at predetermined locations and driving them to their destinations in their own vehicles, the Plaintiff has the exclusive right to the use, throughout Canada, of such wares and services.

 

Section 20 – Infringement

 

[25]           Section 20 specifies that the right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to the use under the Trade-marks Act, who sells, distributes and advertises, in this case, services in association with a confusing trade-mark and trade-name.

 

[26]           In the present case, the evidence adduced establishes that the Defendant has not used the trade-mark exactly as registered. She has taken the Plaintiff’s registered trade-mark and has made a slight graphic amendment to change the word KEYS to KEYZ and the word PLEASE to PLEEZZ. However, from an auditory and connotational point of view, the respective marks of the parties are identical.

 

[27]           For the purposes of, inter-alia, section 20 of the Trade-marks Act, a trade-mark or trade-name is confusing or likely to cause confusion 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 (Trade-marks Act, ss 6(1)).

 

[28]           More particularly, “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 [business], whether or not the wares or services are of the same general class” (Trade-marks Act, ss 6(2)).

 

[29]           Additionally, with respect to passing off, subsection 7(b) of the Trade-marks Act prohibits a person from directing attention to his wares or services in such a way as to cause or be likely to cause confusion when that person initiates the activity in question in respect of the wares, services or business of the other.

 

[30]           Having reviewed the evidence adduced by Plaintiff, in particular the affidavits of Phillips (paras 3-9) and Greenwood (paras 16 and 17), the Court is satisfied that the Defendant’s use of KEYZ PLEEZZ, in advertisements, posters, internet, distributed in the Oshawa/Durham market place and in answering the phone caused confusion, and likely lead to the inference that the services offered were that of the business carried by the Plaintiff.

 

[31]           As stated on numerous occasions by this Court to determine whether a trade-mark is confusing, that is whether concurrent use will likely lead a purchaser to believe that the associated services, in this case, come from the same source, the surrounding circumstances, particularly the five major factors as prescribed under subsection 6(5) of the Trade-marks Act, must be taken into account (Haw Par Brothers International Ltd v Canada (Registrar of Trade Marks) (1979), 48 CPR (2d) 65 (FCTD) at p 70).

 

[32]           These five major factors to be considered by the Court in determining whether trade-marks or trade-names are confusing as prescribed under subsection 6(5) of the Trade-marks Act, are:

               (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.

 

[33]           It is evident, as the Court reviewed the evidence adduced by the Plaintiff, that the Defendant did create confusion, particularly in that the Defendant’s name sounds exactly the same (see Ortho Pharmaceutical Corp. v Mowatt & Moore Ltd et al. (1972), 6 CPR (2d) 161).

 

[34]           It is also important to note that in the present case, the nature of the services rendered by the Defendant is exactly the same as the Plaintiff’s.

 

[35]           Finally, the Defendant’s avoidance of service and its failure to respond to the cease and desist letter from the Plaintiff, and more importantly, her deliberate advertisement in a Facebook page shows knowledge and deliberate intent to infringe and pass off.

 

[36]           The Defendant’s conduct is prohibited by subsection 7(c) of the Trade-marks Act.

 

[37]           As stated in this Court’s jurisprudence, the assessment of damages in the case of infringement or passing off is:

“…On the question of the measure of damages it has been held that the defendant is liable for all loss actually sustained by the plaintiff that is the natural and direct consequence of the unlawful acts of the defendant, including any loss of trade actually suffered by the plaintiff, either directly from the acts complained of or properly attributable thereto, that constitute an injury to the plaintiff's reputation, business, goodwill or trade. Speculative and unproven damages must be deleted from the calculation. The court will estimate the damages on the same basis as would a jury and damages may take into contemplation injury to the plaintiff's goodwill, for the court, acting as a jury and applying ordinary business knowledge and common sense, is entitled to consider that there cannot be deceptive trading without inflicting some measure of damage on the goodwill. Difficulty in assessing damages does not relieve the court from the duty of assessing them and doing the best it can. The court is entitled to draw inferences from the actions of the parties and the probable results that they would have. If damages cannot be estimated with exactitude, the best reasonable estimate must be made.” (Ragdoll Productions (UK) Ltd v Jane Doe (2002), 21 CPR (4^th) 213 (FCTD) at para 40)

 

[38]           In this instance, the only evidence of damages is found in the affidavit of Ginger Greenwood at para 26, where she states:

“The alternative driving service business is a highly competitive business and the presence of the Defendant’s business in the marketplace limits [the Plaintiff’s] ability to franchise in Oshawa-Durham and in neighbouring communities. Were [the Plaintiff] to franchise [its trade-mark in that] area, in view of the population of Oshawa, the costs for purchasing a franchise would be in the amount of $32,000 [CDN], with annual royalties of $38,000 [CDN] based on minimum sales of $5,000 per week. As a result of the Defendant’s activities, [the Plaintiff’s] company is thus being deprived of that business opportunity” (Greenwood Affidavit, para 26, PMR, Tab D, page 30).

 

[39]           The Plaintiff has not adduced any evidence to establish clearly that a franchise in Ontario, and more specifically in the Oshawa/Durham area, would generate average sales of $5,000 per week.

 

[40]           The Plaintiff has been in operation for 15 years, starting in 1997. Over that period, it has generated sales revenues in excess of 15 million dollars. Thus, it averages revenues of 1 million dollars per year for the services if offers directly or through franchisees in Alberta, British Columbia, Manitoba and Ontario. The revenues generated by each franchisee are not specified.

 

[41]           This Court therefore evaluates the damages suffered by the Plaintiff at $50,000 and not $70,000 as claimed, because of the lack of evidence that a franchise in the Oshawa/Durham area would necessarily generate weekly revenues of $5,000, more so in view of the fact that there are already two competitors operating in that area (see Greenwood Affidavit, para 16). This amount of $50,000 also includes damages to the goodwill of Plaintiff.

 

[42]           The Plaintiff also seeks costs on an enhanced basis pursuant to Column 5, including HST thereon. The Court does not find that the avoidance of service by the Defendant warrants the imposition of such a measure as the complexity of the case was not increased from said actions.

ORDER

THIS COURT ORDERS that

1.                  The Defendant is hereby enjoined by herself, her servants, agents employees, representatives distributors, licensees and all those over whom she exercises control from using or advertising the trade-mark KEYZ PLEEZZ or any other trade-mark or trade-name which is confusingly similar, either visually or phonetically, to the Plaintiff’s registered trade-mark KEYS PLEASE.

2.                  The Defendant shall deliver up to the Plaintiff or destroy under oath any signage, labelling, documents, advertising or any other matter in the possession or control of the Defendant, the use of which would offend the injunction set out in the preceding paragraph.

3.                  The Defendant shall pay the Plaintiff’s damages in the amount of $50,000 (CDN) plus interest, as of the date that the Defendant first commenced use of the trade-mark KEYZ PLEEZZ.

4.                  The Defendant shall pay the Plaintiff its costs, including HST thereon, and interest, as well as all applicable taxes on the award of damages and costs, as set out in this Order.

 

 

"Andre F.J. Scott"

ANNEX

 

Subsections 6(1), 6(2), 6(5) and sections 7, 19, 20 and 22 of the Trade-marks Act, RSC 1985, cT-13, provide as follows:

 

 

FEDERAL COURT

 

SOLICITORS OF RECORD

 

 

DOCKET:                                         T-833-12

 

STYLE OF CAUSE:                        THE DRIVING ALTERNATIVE INC.

                                                            v

                                                            AMANDA JARVIS dba KEYZ PLEEZZ

 

 

 

MOTION IN WRITING CONSIDERED AT OTTAWA, ONTARIO, PURSUANT TO RULE 369

 

REASONS FOR ORDER

AND ORDER:                                  SCOTT J.

 

DATED:                                            December 5, 2012

 

 

 

WRITTEN REPRESENTATIONS BY:

 

John S. Macera

FOR THE PLAINTIFF

 

 

SOLICITORS OF RECORD:

 

MACERA & JARZYNA, LLP Ottawa, Ontario	FOR THE PLAINTIFF
Amanda Jarvis Oshawa, Ontario	FOR THE DEFENDANT (ON HER OWN BEHALF)