Digests

Tommy Hilfiger Licensing Inc. v. International Clothiers Inc.

T-2036-95

2003 FC 1087, MacKay J.

19/9/03

30 pp.

Plaintiffs allege passing-off of defendant's wares for those of plaintiffs and infringement by defendant of two of their registered trade-marks, both for same Crest design but each in relation to two different wares, articles of clothing--Plaintiffs also allege infringement of their registered copyright, for same Crest design--Defendant denies infringement, alleges registrations of trade-marks and of copyright in issue invalid --Defendant seeks not only action be dismissed with costs, but also, by counterclaim, that Crest trade-mark registrations and Crest copyright registration be expunged from respective registries, and they seek solicitor-client costs--For purpose of action, parties agreed upon extensive statement of facts-- Plaintiffs' claims in relation to trade-mark infringement fourfold: (1) that defendant infringed plaintiffs' rights under Trade-marks Act (Act), s. 19; (2) that defendant infringed trade-mark interests under Act, s. 20 by use of its confusing crest design; (3) that defendant's use of crest design likely to have effect of depreciating value of goodwill attaching to plaintiffs' trade-marks contrary to Act, s. 22; (4) that defendant, by use of crest design, responsible in damages for loss suffered by plaintiffs as result of defendant's passing-off of wares as those of plaintiffs--Before considering individual claims, useful to consider defence and counterclaim by International Clothiers Inc. (INC), which says Tommy Hilfiger Licensing Inc's (THLI's) Crest Design not validly registered as trade-mark as it has not been used to distinguish plaintiffs' wares from those of others--Trade-mark has long been used and still affixed to substantial portion of plaintiffs' wares, not as mere ornament but as means of distinguishing wares from those of others--Further, despite existence of other crest designs, used as trade-marks or simply as crests or ornaments by others, at time of plaintiffs' action and when defence and counterclaim filed, plaintiffs' Crest Design through continual, extensive use had acquired distinctiveness--Thus, plaintiffs' Crest Design trade-marks not invalidly registered or nor had they lost distinctiveness when validity of registration questioned by defence and counterclaim of INC--In result, counterclaim dismissed--Act, s. 19 confers on owner of registered trade-mark, unless invalid, exclusive right to use throughout Canada of trade-mark in respect of wares or services associated with trade-mark--Defendant's crest design, as appearing on polo shirts of INC, not identical to plaintiffs' registered Crest Design, therefore not use of plaintiffs' Crest Design--Defendant further urges it did not infringe plaintiffs' interests under s. 19 or s. 20 because not using crest as trade-mark; rather, crest mere ornamentation on INC's wares--No evidence INC used its crest design as trade- mark, to distinguish its wares from those of others--Any conclusion they intended design to be trade-mark can only be inferred from facts both shorts purchased for sale in 1995 and short sets purchased in 1998 had crest design similar to that used by plaintiffs on generally similar articles of men's shirts and boys' short sets--That inference not supported by other considerations--No evidence any other wares sold by INC, apart from two lots, of shirts and short sets, had embroidered or fixed upon them Crest Design of plaintiffs or crest design that might be considered to be confusing with that used by plaintiffs--Crests appearing on shirts and short sets here in issue not included on those wares and not used in sale of those wares by INC for purpose of distinguishing them from wares of others--Mark not used by defendant as trade-marks-- However, if defendant had been found to use its crest design as trade-mark in relation to shirts and short sets, that use would have created likelihood of confusion in mind of consumer, aware of plaintiffs' Crest Design trade-mark but remembering it imprecisely--Turning to plaintiffs' claim defendant's crest designs, on polo shirts and short sets had effect of depreciating value of goodwill attached to plaintiffs' registered trade-marks under Act, s. 22(1)--Plaintiffs acknowledge weight of case law limits application of s. 22(1), as in case of claims under ss. 19, 20, to situations where defendant has used plaintiffs' registered trade-mark as provided by ss. 2, 4, though no need to prove that use as trade-mark to distinguish defendant's wares from those of others--On basis of case law, s. 22(1) does not include present case where defendant has used plaintiffs' registered Crest Design trade-mark on defendant's wares but no evidence supporting that was done to distinguish defendant's short sets --Plaintiffs' final claim in trade-mark infringement in relation to Act, s. 7(b) offence of passing-off--Evidence clearly supports conclusion plaintiffs had indeed established significant goodwill or reputation for their various registered trade-marks, by reason of their substantial sales in Canada, as well as in United States, in market for life-style clothing for men and boys--Further, defendant likely to cause confusion in mind of consumer in marketplace who was aware of plaintiffs by sale of wares bearing defendant's crest design-- Evidence of plaintiffs' perceived damages exists and provided by Tommy Hilfiger Canada officer responsible for Hilfiger sales in Canada, who had reports from retail vendors of Hilfiger product--In conclusion, plaintiffs' claim established defendant directed public attention to its wares, services or business in such way as to likely cause confusion in Canada between those wares, services or business and wares, services or business of plaintiffs--By so doing, defendant violated prohibition established by Act, s. 7(b)--Regarding plaintiffs' claim for infringement of copyright, pursuant to Copyright Act, s. 3(1), plaintiffs' claim sole right to produce or reproduce their Crest Design, artistic work registered and certified under registration No. 448012--Under Copyright Act, s. 27(2), only person who has knowledge or constructive knowledge of copyright infringement responsible for infringement of work--Here, sale of shirts bearing defendant's crest in 1995 did not constitute copyright infringement-- However, upon amendment of statement of claim by plaintiffs in 1995 to include claim for infringement of copyright, INC, defendant, had notice of existence of plaintiffs' Crest Design copyright--Plaintiffs' ownership of copyright not affected by absence of evidence on their part concerning authorship of design--Crest design appearing on short sets substantially similar to plaintiffs' Crest Design copyright and by sale of short sets, INC sold or distributed copies of work it should have known infringed plaintiffs' copyright Crest Design-- Copyright subsists in plaintiffs' Crest Design as evidenced by certificate of registration--In result, defendant's defence against copyright infringement and counterclaim for order striking registration, from records of Copyright office, unsuccessful--In summary, plaintiffs' claims allowed in part, in respect of claim against defendant for passing-off-- Plaintiffs' claim against defendant for infringement of copyright allowed with respect to INC's sales of boys' short sets in 1998--Request of plaintiffs for declaration that two trade-marks here in issue allowed, and further, copyright subsists in plaintiffs' Crest Design, owne d by THLI, as registered by certificate issued as No. 448012, dated November 29, 1995--Defendant's counterclaims for orders dismissing plaintiffs' action and for costs on solicitor-and- client basis dismissed--Plaintiffs' request for injunction allowed--Plaintiffs' claim for damages allowed, for injury caused by defendant in amount to be settled by Court by supplementary order--Plaintiffs shall have pre-judgment and post-judgment interest--Plaintiffs' request for order directing defendant to deliver up to plaintiffs, or destroy under oath all wares and associated materials, use of which would violate rights of plaintiffs dismissed--Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2, 4, 7(b), 19 (as am. by S.C. 1993, c. 15, s. 60), 20 (as am. by S.C. 1994, c. 47, s. 196), 22--Copyright Act, R.S.C., 1985, c. C-42, ss. 3 (as am. by S.C. 1997, c. 24, s. 3), 34.1 (as enacted idem, s. 20).