2010 QCCS 3901 (August 26, 2010), permission to appeal granted, 2010 QCCA 1637 (September 10, 2010)
Overview
The Superior Court of Quebec dismissed an action for trademark infringement and depreciation of goodwill as manifestly unfounded and frivolous and, pursuant to a verbal motion made at the end of trial, condemned the plaintiffs to pay the defendants $25,000 in punitive damages and $100,000 in extrajudicial fees and costs pursuant to Quebec’s new anti-SLAPP provisions (articles 54.1-54.6 of the Code of Civil Procedure (CCP)).
Abstract
The Superior Court of Quebec dismissed the plaintiffs' (Industries Lassonde Inc. and A. Lassonde Inc., hereinafter collectively "Lassonde") action for trademark infringement and depreciation of goodwill. The plaintiffs commercialize, inter alia, juices and fruit drinks in association with the registered trademark OASIS. The defendant, L’Oasis D’Olivia Inc. ("Olivia"), imports, sells and distributes body care products in association with the trademark OLIVIA’S OASIS & DESIGN. The plaintiffs sought injunctive relief to enjoin the defendant from using its trademark, for an accounting for profits, and for $20,000 in exemplary damages. Based on a finding of "glaring dissimilarity" between the trademarks and the difference between the parties' products, the Superior Court dismissed the plaintiffs' infringement and depreciation actions as frivolous and unfounded. Moreover, on the basis of Quebec’s new anti-SLAPP ("Strategic Lawsuit Against Public Participation") provisions meant to prevent improper use of the courts, the Court held given its findings that the action was excessive and abusive and condemned the plaintiffs to pay the defendant $100,000 in extrajudicial fees and costs as well as $25,000 in punitive damages.
Case summary
Facts. Lassonde commercialize alimentary products, especially juices and fruit drinks, in association with several trademarks, including OASIS, a well-known and leading juice brand in Quebec. This trademark has been used continuously by Lassonde in various incarnations since 1965.
Olivia was incorporated in 2003 and has been commercializing olive oil–based body care products since November 2004. On August 2, 2005, Olivia filed an application to register the trademark OLIVIA'S OASIS & DESIGN in association with various body care products, which was opposed by Lassonde.
On July 10, 2006, Lassonde instituted an action in the Superior Court of Quebec seeking an injunction to enjoin Olivia from using its trademark, an accounting of the profits realized pursuant to sales of products sold in association with the trademark, and $20,000 in punitive damages. Olivia contested the action and, based on relatively new provisions of the CCP termed "anti-SLAPP" provisions, made a verbal motion at the end of the trial for the plaintiffs to be condemned to pay the defendant’s legal fees incurred both in the action before the Superior Court of Quebec and the opposition before the Trademarks Opposition Board ("Opposition Board").
On July 26, 2010, the Opposition Board dismissed Lassonde's opposition and granted Olivia's application to register the trademark OLIVIA'S OASIS & D.
The trademarks at issue, as reproduced in the Superior Court of Quebec judgment, are:
Plaintiffs' trademark Defendant's trademark
Analysis.
- Infringement. The plaintiffs based their action on sections 20 and 22 of the Trademarks Act ("Act") alleging trademark infringement and depreciation of goodwill attached to their trademark.
The Court held that the defendant did not infringe the plaintiffs' trademark, nor did it depreciate the value of the goodwill attached to it by using its trademark OLIVIA’S OASIS & DESIGN. Notably, the Court found no visual resemblance but rather a "glaring dissimilarity" between the trademarks as well as an important difference between the products in question and a lack of actual confusion. This led the Court to hold that "it is highly unlikely that there can be any likelihood of confusion" between the trademarks.
Notably, in analyzing the factors enumerated in section 6(5) of the Trademarks Act, the Court stressed that the OASIS trademark did not possess inherent distinctiveness and had been used by numerous others and that the wares in question were: of a different nature and use, priced differently, directed to different consumers, and found in different locations of a given store.
The Court also held that the plaintiffs had failed to prove any mental association between the trademarks, stating that the defendant's products had always been of high quality and marketed tastefully, resulting in no negative reflection or impression that could tarnish the plaintiffs' products or trademark.
- Plaintiffs' improper use of procedure. Through a verbal motion made at the end of the trial, the defendant invoked the relatively new anti-SLAPP provisions of the CCP, namely articles 54.1 to 54.6, seeking that the plaintiffs be condemned to pay the legal fees and costs incurred before both the Superior Court of Quebec and the Opposition Board.
Although the Court seemed to accept that there had been no unnecessary or extraneous proceedings and that Lassonde has the obligation to be vigilant in the protection of its trademark rights, the Court nevertheless found that it was "obvious from the record and evidence that the Plaintiffs unnecessarily pursued a claim they knew or should have known would not succeed" and even seemed to conclude that the infringement and depreciation of goodwill action was entirely unnecessary given the opposition proceeding instituted before the Opposition Board.
The Court noted that the plaintiffs had sent a menacing cease & desist letter, sought intimidating conclusions, made certain misleading allegations regarding prior litigation pertaining to their OASIS trademark, and failed to disclose another decision regarding their OASIS trademark that had not been decided in their favour.
The Court ultimately concluded that "the Plaintiffs, using their economic power and experience used a shotgun approach to attack Defendant simultaneously on several fronts with their full might, attempting by the present proceedings to intimidate and thwart Defendant from its legitimate use of its trade name and trademark."
In light of such findings, pursuant to article 54.4 of the CCP, the Court condemned the plaintiffs to pay punitive damages in the amount of $25,000 and legal fees and costs in the amount of $100,000. This amount was based solely on the testimony of the defendant's President and would appear to include costs incurred in the opposition proceeding. The Court even went so far as to reserve the defendant's right to claim further damages, including additional legal fees and costs.
Conclusion
This case demonstrates the willingness of the Superior Court of Quebec to apply the relatively new anti-SLAPP provisions of the CCP to what they consider frivolous and abusive actions constituting improper use of procedure before the Court. However, it is important to note that, not surprisingly, permission to appeal this decision was granted on September 10, 2010. As such, although it is a factor to consider when deciding whether to institute a trademark infringement or depreciation of goodwill action before the Superior Court of Quebec, it should not be given undue precedential value before its final disposition on appeal.