In Albian Sands Energy Inc. v. Positive Attitude Safety System Inc. (2005 FCA 332), the Federal Court of Appeal granted a motion for summary judgment to dismiss allegations of passing off, pursuant to paragraph 7(b) and (c) of the Trademarks Act (the “Act”).
In a unanimous decision, the Federal Court of Appeal determined that the motions Judge had erred in not granting summary judgment in favour of the Defendants. The Court stated that in order for there to be a contravention of paragraph 7(b) of the Act, evidence of confusion or a likelihood of confusion as defined in subsection 6(2) of the Act is necessary. The Court further stated that confusion would only arise from the use of a trademark in relation to goods, in the “normal course of trade” as defined in subsection 4(1) of the Act.
In its analysis, the Court noted that the motions Judge had made a finding of fact that any use of appellants’s trademarks was exclusively internal to the appellants. Furthermore, the appellants did not sell, rent out, expose, nor offer for sale or rental the allegedly infringing goods. Due to the absence of external trading activity, there was no trademark “use”. Consequently, the Court held that no contravention of paragraph 7(b) or 7(c) was possible, and granted summary judgment.
This decision is significant to Canadian trademark law as this case establishes that internal use of a trademark within a company does not constitute use in association with wares, as defined in subsection 4(1) of the Act, unless the use is in the normal course of trade.
This case explicitly states that in order to find passing off under paragraphs 7(b) and 7(c) of the Act, section 4 “use” must exist. This requirement creates a seeming difference between statutory passing off under the Act and passing off under the common law, despite existing earlier Canadian jurisprudence that indicates that section 7(b) of the Act merely codifies the common law test of passing off.
The Plaintiff was successfully represented by Michael D. Manson of our Vancouver office, and Nicholas Fyfe Q.C., Of Counsel.
Mark K. Evans and Rex M. Shoyama, Toronto
(This article originally appeared in the World Trademark Law Report’s October 2005 issue.)