Décision

Industries Lassonde inc. c. Oasis d'Olivia inc.						2010 QCCS 3901
JZ0017    SUPERIOR COURT
CANADA
PROVINCE OF QUEBEC
DISTRICT OF			MONTREAL
No:		500-17-031907-069
DATE:	August 26, 2010.
______________________________________________________________________
BY:				THE HONOURABLE	DIONYSIA ZERBISIAS, J.S.C.
______________________________________________________________________
INDUSTRIES LASSONDE INC., and A. LASSONDE INC.,
Plaintiff,
v.
L'OASIS D'OLIVIA INC.
Defendant
______________________________________________________________________
JUDGMENT
______________________________________________________________________

I  INTRODUCTION

[1]   Industries Lassonde Inc. (hereinafter "Industries") and its subsidiary A.  Lassonde Inc. (hereinafter "A. Lassonde") seek an injunction to restrain Defendant L'Oasis D'Olivia Inc. (hereinafter Olivia) from the use of its trade-mark "Olivia's Oasis with design" under sections 6, 20 & 22 of the Trade-marks Act, (R.S.C. 1985, c.T.-13, hereinafter TMA).  Based on their claim that Olivia is infringing their trade-mark "Oasis", Plaintiffs further demand an order that Olivia render an accounting of all sales generated under the trade-mark "Olivia's Oasis with design"; that Olivia be condemned to pay over the profits realized from those sales, in addition to exemplary damages of twenty thousand dollars ($20,000).

[2]   Olivia contests the action and, invoking Arts 54.1 to 54.6 C.C.P. (R.S.Q., c.C-25) requests that Plaintiffs be condemned as an abusive litigator to pay punitive damages;   damages to defray its legal fees incurred in defending this action and the legal fees incurred in contesting Plaintiffs' opposition to Olivia's application for registration of its trade-mark; and, a reservation of its rights to claim any other damages caused as a result of Plaintiffs' actions.

[3]   At issue are the following questions:

A)  whether the trade-mark "Olivia's Oasis with  design", used by Olivia to market its products, which consist of beauty products made from pure olive oil,  (notably body lotions, liquid and bar soaps, gel and beauty aids) infringes on Plaintiffs' trade-mark "Oasis" because it is likely to create confusion with Plaintiffs' mark pursuant to s.6 TMA and likely to diminish the goodwill attached to Plaintiffs' mark pursuant to s.22 TMA.

B) whether Plaintiff's action as defined in arts. 54.1 to 54.6 C.C.P. is frivolous, vexatious, prejudicial or, an attempt to defeat the ends of justice by thwarting Defendant in the lawful use of its mark, where there is a major imbalance in the financial resources of the parties, which requires the imposition of a sanction against Plaintiff for the reparation of the damages suffered therefrom by Defendant;

II  THE BACKGROUND:

A. INDUSTRIES AND LASSONDE

[4]   Industries is a conglomerate, with subsidiaries, and it is the registered holder of numerous trade-marks, notably "Oasis" and various versions of same since 1965.

[5]   A. Lassonde is a subsidiary which manufactures and sells alimentary products, especially juices and fruit drinks, under several trademarks, including "Oasis" under license from Industries to use the trade-mark since December 1999.  It has seven plants for the production of its juice products, six of which are in Canada.  It has one thousand (1,000) employees involved in that operation.

[6]   Notwithstanding that the design, colour and font of the Oasis mark has been changed several times since 1965, the trademark Oasis and its seventeen (17)  derivatives or versions have been used without interruption by A. Lassonde or its predecessors for the following products;

·        since 1965 in connection with juice and fruit drinks;

·         since 1981 in conjunction with vegetable juices;

·        since February 2000 in conjunction with spring water;

·        since July 2000 in conjunction with sorbets;

·        since November 2003 in conjunction with frozen mixes for alcoholic and non-alcoholic drinks.

[7]   A. Lassonde uses the Oasis trade-mark under its licence, under the strict control and quality standards and supervision of Industries according to the norms established by the latter, and its juices and fruit drinks have won several prizes for quality, both nationally and internationally.

[8]   The products marketed under the Oasis mark are packaged in various formats and colours which include plastic and glass containers, cardboard containers, such as tetropacks and, aluminium containers, all of different sizes and shapes, and, each product in its line has a different label.

[9]   Plaintiffs' products are marketed through its own marketing team which consists of an Executive Vice-President in Toronto; a National Vice-President of Marketing; five Regional Vice-Presidents of Marketing, each supported by a team of at least three.  The products are promoted by an on-going gamut of multi-media promotional and marketing programmes including cross-marketing, sponsorships, ads, contests, brochures and other similar vehicles. Plaintiffs' products are sold throughout Quebec in supermarkets, convenience stores, drugstores and other distribution or retail outlets.

[10]        Sales of the juices and fruit drinks under the trade-mark Oasis (including the sale of water, sorbets and drink mixes, also associated with the same trade-mark) are mostly in Quebec. From 1999 to 2006, sales generated were eight hundred and thirty-four million, five hundred and ninety-nine thousand, two hundred and thirty-two ($834,599,232) dollars whereof seven hundred and ninety-three million, two hundred and twenty-four, forty-seven  ($793,224,047) were in Quebec.  For the period 2007 to September 30, 2009, sales generated were five hundred and sixty million, four hundred and eighty-one thousand, five hundred and fifty three ($560,481,553), whereof four hundred and thirty-five million, four hundred and three thousand, zero thirty-seven ($435,403,037) were in Quebec.

[11]        Direct marketing costs for the period 2007 to 2009 were fourteen million, nineteen hundred and eighty-five dollars ($14,001,985).

[12]        There is no doubt that the trademark "Oasis" is well-known and a leading brand in Quebec.  However nationally it lags far behind other national competitors in the juice field such as Minute Maid, Ocean Spray, Dole and Welsh.

[13]        In their claim Plaintiffs invoke another trade-mark which is allegedly being compromised by Olivia and marketed under the trade-mark "Olinda" in conjunction with edible olive oil and olive oil blends which have been sold or distributed since winter 2006.  "Olinda" was registered as a trade-mark on April 26, 2006 on an application filed at the Trade-marks Office on April 14, 2005.  Little evidence has been lead as to this product, particularly as to its sales.

[14]        To sum up, the principal cause of action invoked by Plaintiffs against Defendant is based on the likelihood of confusion being caused by Defendant's trade-mark since  the products of both are sold through the same marketing channels.

[15]        Plaintiffs admit that no confusion has occurred between the respective wares of the parties, that no losses have been sustained by Plaintiffs as a result of Defendant's alleged infringement. They offer no proof of any damages sustained by them as a result of sales of Defendant's products under its Olivia's Oasis and Design mark: Plaintiffs have left that matter to the discretion of the Court.

B.  OLIVIA

[16]        Olivia was incorporated in 2003, founded by Deborah Kudzman, a former marketing and advertising executive with ten years experience in health and beauty products, and, based on her expertise and personal experience with olive oil skin products.  The corporate name "Olivia" was derived from her daughter's name, and, "Oasis" on the concept of providing or evoking a retreat, spa, or environment of calm or relaxation for women through the use of Olivia's products.

[17]        Olivia carries on the business of the importation, sale and distribution of body care products which are produced exclusively for it in Turkey, and feature pure olive oil as an essential ingredient.  Since November 2004, it has been marketing these products which consist of liquid hand wash, body wash and gels, bar soap,  body lotions, and beauty accessories in association with the trade-mark Olivia's Oasis and Leaf Design, which since spring 2005 also features an olive leaf as the apostrophe punctuation mark. The label also portrays two olives on a branch. The trade-mark always appears in green and magenta with two green olives and an olive leaf on a white background.

[18]        On August 2, 2005 Olivia filed an application to register the trade-mark "Olivia's Oasis and Design" with  the Registrar of Trade-marks, under number 1,266,852 in association with the following wares:

"(1)  Body/bath/shower washes and gels, exfoliants, massage bars, massage oil, bath oil, bubble bath, foot and body scrubs, hand lotion, body lotion, face lotion, foot cream, face cream and body cream, glycerine bars, bath salts, lip balm and face masks.

(2) Skin care products, namely liquid hand wash and bar soap."

 After having received preliminary approval from the Trade-mark Office, Olivia's application was subsequently opposed by Plaintiffs. The application and opposition were still pending when this case was heard. On July 26, 2010. The Registrar of Trade-marks granted Olivia's application and dismissed Plaintiff's opposition.[1]

[19]        Olivia's promotional materials for its line of products always mention that they contain one hundred (100) percent pure olive oil as one of the ingredients.  The products are being sold in fifteen hundred (1,500) outlets in Quebec, mostly in pharmacies and in retail warehouse merchandisers through a distribution company which has an exclusive agreement for the distribution of the products. The products are promoted by way of leaflets and flyers outlining their features; specially constructed display stands; header cards and product explanation booklets; shelf talkers; promotional samples; circulars; ads and articles appearing in magazines and newspapers; and via a website called "oliviasoasis.com".  The products have also been exhibited in tradeshows such as the Salon Nationale de la Femme/ The National Woman's Show; in a booth, featuring enlarged posters, floor displays, and promotional materials.  All of Olivia's promotional mechanisms and sales tools indicate the trade-mark Olivia's Oasis and Leaf Design and attempt to convey  the impression of  high quality products.  The target market is women between the ages of twenty-five to forty of an above-average level of income.

[20]        Although Olivia's products are sold through some of the same marketing channels as those in which Plaintiffs' wares are also sold, the placement of the products differ.  Olivia's products are always found in the non-edible, health and beauty departments of these places.

[21]        Olivia is basically a one-person operation, operated by Madam Kudzman, the guiding spirit and the jack of all trades of the company, with the assistance of her husband.  The products are imported from Turkey and are stored in a warehouse in Montreal.  For the years 2005 until the end of September 2009 the product generated sales of six hundred and eighty four thousand, nine hundred and sixteen dollars ($684,916.) from the sale of approximately three hundred thousand (300,000) units.

[22]        Up to the date of the trial, and, despite the sale of Olivia's body care products in association with its trade-mark in Quebec for a period of approximately two years prior to the institution of Plaintiff's action, sales which occurred concurrently with the sale by Plaintiffs of their fruit juices, beverages and products under their trade-mark Oasis, in  the same marketing channels, there have been no instances of actual confusion between the wares which have occurred or been brought to the attention of the parties.

III  RELEVANT STATUTORY PROVISIONS

See Appendix I

IV  THE INFRINGEMENT OF PLAINTIFFS' TRADE-MARK

[23]        A trade-mark is defined as "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": s.2 TMA.

[24]        Plaintiffs base their recourse on s. 20 TMA., (Action for Infringement of  Trademark) claiming confusion or that the likelihood of confusion exists between their mark and that of Defendant pursuant to s. 6 TMA.  Plaintiffs further claim, pursuant to s. 22 TMA, that  Defendant's use of its trademark may depreciate the value of the goodwill attached to Plaintiffs' trademark.   Accordingly, Plaintiffs request the Court to exercise its powers pursuant to s.53.2 TMA to issue an injunction restraining Olivia's use of the mark and condemning it to restitution of profits as well as exemplary damages. 

[25]        The test for confusion is found in Section 6(2) TMA:

"6.2  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."

[26]        The test is whether there is a likelihood of confusion.   

[27]        Confusion, means the confusion that would result in the manner and circumstances described in s. 6 (1)TMA and is determined pursuant to the criteria set out therein in s. 6(5) TMA:

"6.5  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 R.S., c. T-10, s.6.

[28]        The applicable principles of law with regard to confusion have been summarized in two judgments rendered by the Supreme Court of Canada on June 2, 2005:

- Mattel, Inc. vs. 3894207 Canada Inc. [2006] 1. S.C.R. 772;

- Veuve Clicquot Ponsardin, vs. Boutiques Cliquot Ltée, Mademoiselle Charmante Inc. and International Trademark Association [2006] 1 S.C.R. 824 .

[29]        Mattel deals with an opposition to the registration of a trade-mark whereas Veuve Clicquot deals with an action for infringement of a trade-mark. 

[30]        Certain key principles relating to the likelihood of confusion which are applicable to the present case may be extracted from Mattel and Veuve Clicquot.

1.  In an action in infringement of a trade-mark, based on ss. 6 & 22 TMA, the onus is on the claimant to prove, on a balance of probabilities, the likelihood of confusion and of depreciation: Veuve Clicquot, pp. 838-839, paras 14 & 15.

2.  In opposition proceedings, the onus is on the opponent of the trade-mark application to prove, on a balance of probabilities, that there is a likelihood of confusion or depreciation: Veuve Clicquot, pp. 838-839, paras 14 & 15.

 3.  The question of whether there exists a likelihood of confusion is largely one of fact.

4.  The surrounding circumstances referred to in sections s.6 (5) TMA are not comprehensive nor exhaustive; some factors or circumstances may be irrelevant. while there may be other circumstances constituting the surrounding circumstances which the Court may consider: Veuve Clicquot, p.844, para 27.

5.  Different circumstances will be given different weight in a context-specific assessment and the totality of the circumstances will dictate how each consideration should be treated and what weight it should be given: Veuve Clicquot, p. 844, para. 27, P. 841, para. 21; Mattel, p. 803, para. 55; p. 813, para 73.

6.  One surrounding circumstance that may be considered is the fame of the established mark and whether the other party is effectively riding on the coattails of the mark since fame itself can create a connection between the two marks in the mind of the consumer: Mattel, p.811, para. 70; Veuve Clicquot, p. 846, para 33.

7.  Another surrounding circumstance is whether there have been or have not been instances of confusion between the conflicting marks.  Evidence of actual confusion would be a relevant surrounding circumstances but it is not necessary, even where trade-marks are shown to have operated in the same area for a long period of time. However, an adverse inference may be drawn from the lack of evidence of confusion in circumstances where it would normally be available if the allegation of likely confusion was justified: Mattel, p. 803, para 55; p. 819, para 89; Veuve Clicquot, , p. 847, para 37.

8.  Whether or not the wares or services are of the same general class, and whether there are similarities or dissimilarities in the mark or product are also surrounding circumstances.  The resemblance of wares or services is not a requirement, nor do the wares and services have to be of the same class,  however differences in wares or services will be an important consideration. 

9.  A connection created in the mind of a consumer can be offset by a gaping divergence in the nature of the wares and trade:  Mattel,  p. 811, para 70.

10.  The surrounding circumstances of each situation and all of their input must be judged in the full factual content of every case.

[31]          The test for the likelihood of confusion, or of a mistaken inference concerning the trade-mark, is measured from the point of view of the first impression of the average casual hurried consumer, who might encounter the new mark in the marketplace, and draw a mental connection between them: Veuve Clicquot, p.840, para 20.  This perspective gives credit to the average consumer and assumes that he or she has a certain amount of intelligence and can, under normal circumstances,  distinguish between marks, labels and wares.

[32]        The  test has been defined as follows by Justice Binnie, in Mattel, p.803, paras. 56 & 57:

What, then, is the perspective from which the likelihood of a "mistaken inference" is to be measured?  It is not that of the careful and diligent purchaser. Nor, on the other hand, is it the "moron in a hurry" so beloved by elements of the passing-off bar: Morning Star Co-Operative Society Ltd. v. Express Newspapers Ltd., [1979] F.S.R. 113 (Ch.D.), at p. 117.  It is rather a mythical consumer who stands somewhere in between, dubbed in a 1927 Ontario decision of Meredith C.J. as the "ordinary hurried purchasers": Klotz v. Corson (1927), 33 O.W.N. 12 (Sup. Ct.), at p.13.  See also Barsalou v. Darling (1882), 9 S.C.R. 677, at p. 693.  In Delisle Foods Ltd., v. Anna Beth Holdings Ltd. (1992), 45 C.P.R. (3d) 535 (T.M.O.B.), the Registrar stated at pp. 538-39;

 

  When assessing the issue of confusion, the trade-marks at issue must be considered from the point of view of the average hurried consumer having an imperfect recollection of the opponent's mark who might encounter the trade mark of the applicant in association with the applicant's wares in the market-place.

And see American Cyanamid Co. v. Reco Chemical Co., (1972] F.C. 1271 (T.D.), at 1276, aff'd (1973), 14 C.P.R. (2d) 127 (F.C.A.).  As Cattanach J. explained in Canadian Schenley Distilleries, at p.5:

That does not mean a rash, careless or unobservant purchaser on the one hand, nor on the other does it mean a person of higher education, one possessed of expert qualifications.  It is the probability of the average person endowed with average intelligence acting with ordinary caution being deceived that is the criterion and to measure that probability of confusion. The Registrar of Trade marks or the Judge must assess the normal attitudes and reactions of such persons.

  Having repeated that, I fully agree with Linden, J.A. in Pink Panther that in assessing the likelihood of confusion in the marketplace "we owe the average consumer a certain amount of credit" (para.54).  A similar idea was expressed in Michelin & Cie v. Astro Tire & Rubber Co. of Canada Ltd. (1982), 69 C.P.R.  (2d) 260 (F.C.T.D.), at p. 263.

…one must not proceed on the assumption that the prospective customers or members of the public generally are completely devoid of intelligence or of normal powers of recollection or are totally unaware or uninformed as to what goes on around them.

  A consumer does not of course approach every purchasing decision with the same attention, or lack of it."

[33]        Justice Binnie continues in Mattel at p. 805, para. 58:

"The law recognizes that at the time the new trade-mark catches their eye, they will have only a general and not very precise recollection of the earlier trade-mark, famous though it may be or, as stated in Coca-Cola Co. of Canada Ltd. v. Pepsi-Cola Co. of Canada Ltd., [1942] 2 D.L.R. 657 (P.C.), "as it would be remembered by persons possessed of an average memory with its usual imperfections" (p.661).  The standard is not that of people "who never notice anything" but of persons who take no more than "ordinary care to observe that which is staring them in the face": Coombe v. Mendit Ld. (1913), 30 R.P.C. 709 (Ch. D.), at p. 717.  However, if ordinary casual consumers somewhat in a hurry are likely to be deceived about the origin of the wares or services, then the statutory test is met."

[34]        Before proceeding to a fact driven analysis of the surrounding circumstances in the present case pursuant to s. 6 (5) TMA, of what the average consumer may perceive when they encounter the two marks involved in the present matter, the Court will set out the two marks at issue.  A photo sometimes speaks volumes and much more than words.

[35]          The following is the trademark which Plaintiffs seek to protect:

[36]        The following is Olivia's mark, which Plaintiffs seek to restrain:

[37]        Visually the Court finds there is no resemblance at all between the marks: there is in fact a glaring dissimilarity.  On that basis, and on the basis of the difference of the wares, pragmatically, the Court finds that it is highly unlikely that there can be any likelihood of confusion. Indeed there has been none during the entire period that the products of both parties have been in the marketplace.  A consumer is not likely to be deceived by Defendant's mark, nor to make any connection between it and Plaintiff's mark.

[38]        Notwithstanding this finding,  the Court also concludes that, on the basis of the factors enumerated in s. 6(5) TMA, there is no likelihood of confusion between the two marks.

A.  The inherent distinctiveness of the trademarks and the extent to which they have become known (s. 6.(5). (a) TMA)

[39]        There is no inherent distinctiveness associated with the word "Oasis": "Oasis" is not a distinctive word.  It is an everyday word, found in the dictionary, not originated by Plaintiff. On that basis the word "Oasis" would normally receive less protection than would an invented or unique word which evokes a particular product.

[40]         "Oasis" has been used or appears in sixty-seven (67) trade and corporate names in Canada of which thirty-seven (37) are in Quebec; thirty (30) of the sixty-seven trade names are related to restaurants, bars, food or drink products.  There are also forty-six (46) trade-mark registrations or pending trade-mark applications in connection with the word "Oasis".

[41]        The name has not acquired a specific distinctiveness such that the word "Oasis" evokes in and by itself the conceptual notion of juices or food products.

[42]         Plaintiffs' products are sold in supermarkets, convenience stores, drug stores and pharmacies and other retail distributors, anywhere edible products are sold, on shelves with other juices and drinks or in the refrigerated section.  Over the course of the years, Plaintiffs have spent substantial sums promoting their trade-mark and penetrating the juice market, and the mark is well-known in Quebec. However, if Oasis is recognizable as a mark, it is only in association with juices and juice drinks.  There is no evidence that it is associated in any manner with olive or other oils, beauty products or soap.

[43]        As Justice Binnie states in Mattel, pages 813-814, paragraph 75: -

"Distinctiveness is of the very essence and is the cardinal requirement of a trade-mark"; Western Clock Co. v. Oris Watch Co., [1931] Ex. C.R. 64, per Audette J., at p. 67.  The word "Barbie" is an everyday expression not originated by the appellant, and on that account would normally receive less protection "than in the case of an invented or unique or non-descriptive word" (like Kleenex), per Rand J. in General Motors, at p. 691, to which one might add: "No person is entitled to fence in the common of the English or French languages and words of a general nature cannot be appropriated over a wide area": K. Gill and R.S. Jolliffe, Fox on Canadian Law of Trade-marks and Unfair Competition (4^th ed. (loose-leaf), at p. 8-56…".

[44]        The wares represented by the two marks are so different, and associated with such different products, and presented in such a different manner that they are completely dissimilar not only in resemblance, but also in the ideas suggested by them.  This is supported by Plaintiffs' admission that there have been no instances of confusion and indeed no loss or diminution of sales since the advent of Olivia's mark on the market.  Plaintiffs representatives have not even noticed Olivia's product on the shelves notwithstanding  regular "store checks" of the common sales outlets: Plaintiffs' National Vice-President of Marketing even admitted that the first time she had  seen Olivia's products was at the court hearing.

[45]        The products are also priced differently and directed to different target consumers.  Plaintiffs' juice products are priced very reasonably; are easily consumable, used on a daily basis; have early expiry dates; are often promoted and sold by retailers as loss leaders to attract consumers.  On the other hand, Olivia's products  target an above-average luxury market.  Olivia products sell at a higher price in the beauty products field; are not easily consumable; and are used over a period of months.  Thus, not only is there a difference in the price points and market, but in addition there is a difference in the notion of what the respective products represent and how they are consumed or used by the consumer.

[46]        Moreover, the Oasis trade-mark has been diluted.  In 2005 the trade-mark was changed to a new colour - bright blue, in a bold font, on a white background.  However, the mark is still found in the marketplace in other colours (red, yellow, white, green, orange) on different colour backgrounds.  Since 2005 the mark is also accompanied by the indication that it is protected, and more recently,  with a design that bears two leaves.  The mark is used on packaging of all sorts and the design and colours of the packages vary according to the products.

[47]         On the other hand, Olivia's products have been marketed consistently in a  more delicate font, with the word Olivia in green and the word Oasis in magenta, always on a white background with an olive leaf used  in place of the apostrophe.  The products identified are beauty products that are not edible  (lotions, gels, bar soap). The label mentions that the products contain pure olive oil, an idea which is supported by the olive leaf and the two olives.

B.  The Length of Time the Trademarks have been in use (s.6(5)(b) TMA)

[48]        Plaintiff's trademarks have been in use since 1965 and are used concurrently in eighteen different variations on different wares, whereas Defendant's mark has only been in use since 2004.  On the other hand,  Plaintiffs' mark has been changed on a number of occasions, the most recent one being in 2005 and these changes have not yet been fully implemented in the marketplace.  Olivia's mark, on the other hand,  has been marketed consistently in the same manner and design save for the addition of the olive leaf apostrophe in winter 2005. 

C.  The Nature of the Wares, Services and Business and Nature of the Trade (s.6.(5)(c)TMA)

[49]        Plaintiff's mark is used in connection with fruit juices and drinks i.e. edible products.  Olivia's products are identified as beauty products that are not edible: lotions, gels, bar soaps etc.  Both products are sold in supermarkets, convenience stores and retail distributors, and pharmacies.  On the one hand, Plaintiffs' products are sold in the edible section, on shelves with other drinks, or, in the refrigerated section, whereas Olivia's products are sold and marketed in the beauty and health sections of such establishments.

D.  The Degree of Resemblance between the Marks and the Ideas Suggested by Them (s. 6.(5)(d) & (e)TMA)

[50]        There is no resemblance between the marks in appearance.  Nor is there any resemblance in the idea suggested by them.  A consumer, not even an inobservant one, is hardly likely to purchase fruit juice in the beauty and health section of a retailer.  Nor will the average hurried consumer wishing to purchase beauty products such as soap, body lotions or gels, likely look for them in the refrigerator or the non-refrigerated grocery sections of the same establishments. 

E.  Depreciation of Goodwill (s.22(1) TMA)

[51]        Plaintiff has failed to prove the likelihood of a mental association between their mark and that of Olivia's that is likely to depreciate the value of the goodwill attached to their Oasis mark even if such an association is made.  Defendant's products are of high quality, and marketed in a tasteful manner such that there would be no negative reflection on the Oasis mark.  Nor is it likely that they would create a negative impression which would tarnish the aura or fame of Plaintiffs' products and mark.

F.  Summary  

[52]        After taking into consideration all of the facts and surrounding circumstances, to impute the likelihood of confusion between Plaintiffs and Defendant's mark to the average consumer would insult him or herby assuming that such consumer is completely devoid of intelligence; of normal powers of observation, recollection and recognition; or, is so totally unaware or uninformed as to the environment in which they are found, that they would be easily deceived about the origin or nature of the wares they purchase.

[53]        For these reasons, therefore the Court concludes that Plaintiffs have failed to prove on a balance of probabilities that there exists any confusion, or a likelihood of confusion between their trade-mark Oasis and that of Defendant, or, that there is any likelihood of depreciation of their mark by Defendant, and, that accordingly there has been an infringement of their rights by Defendant.

V DEFENDANT'S CLAIM FOR THE IMPOSITION OF SANCTIONS AGAINST PLAINTIFF FOR IMPROPER USE OF PROCEDURE   (Arts. 54.1 - 54.6 C.C.P.)

[54]        By verbal motion made at the end of the trial, Defendant seeks a condemnation against Plaintiffs for payment of all the legal fees it has incurred in defending Plaintiffs' present action, in contesting Plaintiffs' opposition to the registration of Defendant's trade-mark, and a reservation of its rights to claim such further damages as Defendant may have suffered in connection with defending the present action and the trade-mark registration proceeding, or, resulting therefrom.

[55]        Defendant's claim is based on the amendments of the Code of Civil Procedure which came into effect on June 4, 2009 (S.Q. 2009, c.-12) called "An Act to… prevent improper use of the courts and promote freedom of expression and citizen participation in public debate" which added arts. 54.1 to 54.6  to the Code of Civil Procedure.

[56]          Defendant argues that Plaintiffs have, in the present action, and by their opposition to the trade-mark registration, engaged in manifestly unfounded, frivolous, vexatious proceedings, excessive and unreasonable in the circumstances, in an attempt to bully it and to prevent it from the lawful exercise of its rights to use its trade-mark and to engage in business under the name of Olivia's Oasis.

[57]         Plaintiffs contest this claim on the grounds that there was a serious issue to litigate, pursued in good faith, in the lawful exercise and obligation which Plaintiffs have to protect their trade-marks and defend them from piracy; and that the proceedings were conducted in a reasonable manner, without excess or abuse.

[58]        It is true that the action as instituted on July 10, 2006 was not encumbered by unnecessary and extraneous proceedings.  It was instituted as an action for a permanent injunction without any request for a safeguard order or interlocutory injunction; the interlocutory proceedings were kept to a minimum, as were the interrogatories.  It is also true that Plaintiffs have an obligation to be vigilant, to protect their rights to their trade-mark and to assure that their rights are not pirated nor diluted, and to maintain the distinctiveness of the mark and legal protection afforded by registration of that mark.

[59]        On the other hand, was an injunction action even necessary?  Plaintiffs had already contested Defendant's application to register its trademark  before the Registrar of Trade-Marks by an opposition dated July 4, 2006.

[60]        Plaintiffs' action was preceded by a menacing letter dated January 25, 2005 demanding compliance by Defendant to Plaintiffs' demands. Seventeen (17) months later the injunction action was filed, the conclusions of which, as instituted, were daunting.  In the conclusions and notwithstanding that Defendant had denied Plaintiffs' demands, by letter dated February 8, 2005, Plaintiffs sought orders against Defendant, and its directors, officers, employees, agents to:

·        cease using the trade-mark Olivia's Oasis in any form;

·        cease drawing the attention of the public to its business or products;

·        cease using the trade-mark Olivia's Oasis on all promotional, commercial, packaging materials, stationery, etc. and to proceed to the destruction of all such materials;

·        disclose the name of all retailers to whom its products had been sold, the persons dealt with, with a detailed description of each sale;

·        recall all of its merchandise and promotional materials;

·        render a detailed accounting of all its business activities, including its revenues and expenses, from the commencement of its operations;

·        pay over to Plaintiffs all of its profits earned since the commencement of its business activities;

·        pay punitive damages of $20,000;

·        cease all proceedings to register its trade-mark with the Registrar of Trade-marks, and to withdraw its pending application;

·        change its corporate name and to withdraw therefrom the word Oasis.

[61]        Faced with such intimidating conclusions,  Defendant had a very serious case to meet. The action represented a serious threat to its existence and business activities, the defence of which required time, energy, financial resources and organisation to succeed.

[62]        The trial was conducted during a period of five days. There were pre-trial interrogatories conducted by both sides.  Plaintiffs filed forty-five undertakings; Defendant  filed thirteen undertakings;  Plaintiffs filed  six books of exhibits (fifty exhibits in all with multiple subdivisions);  Defendant filed two books of exhibits (forty-five in all);  both parties filed bound books of authorities to support their legal positions.  All of these procedures required innumerable hours to research and prepare, both by the parties and their attorneys.  The preparation for trial undoubtedly required innumerable hours of work by the attorneys, alone, and, with the representatives of their respective clients.  Such proceedings are expensive to mount and to defend.  It is not every defendant that has the wherewithal, stamina and economic resources to mount such a defence.

[63]        It is also obvious from the record and evidence that Plaintiffs unnecessarily pursued a claim they knew or should have known would not succeed.  It should have been clear to Plaintiffs from the gaping visual dissimilarities between the trade-marks; the gaping divergence in the nature of the wares, one being edible, the other being non-edible, and, their placement in different areas of the same channels of sale; the difference in the targeted clientele; the fact that they knew there had been no instances of confusion; and from their admission that they had suffered no damages as a result of the concurrent sale of Defendant's products over a period of some five years.

[64]        Moreover, Plaintiffs knew that they had no exclusive or proprietary rights to the word "Oasis".  They knew or should have known there were some forty-six (46) trade-mark applications pending before or granted by the Registrar of Trade-marks  using the word "Oasis".  They were informed of the existence of other trademarks and applications in Defendant's letter of February 8, 2005.  Plaintiff knew or should have known that throughout Canada there were numerous trade-names for businesses incorporating the word "Oasis".  Defendant led evidence that they were at least sixty-seven (67) such names, thirty-seven (37) of which were in Quebec.  Both the trade-marks and the trade-names were used in association with a variety of operations, products and services, including some in connection with restaurants, bars, food merchandisers, and food or drink products.  Furthermore Plaintiffs had filed contestations to eleven (11) trade-mark applications before the Registrar, ten (10) of which were either withdrawn or dismissed.

[65]        To compound matters, and as further evidence of their bad faith or wilful blindness, in an attempt to bolster their claim and rights, Plaintiffs allege at paragraph 18 of their action: 

«Les tribunaux ont d'ailleurs reconnu la notoriété des Marques OASIS à plusieurs reprises;

Plaintiff produced, as the alleged judicial authorities in support of their mark, three (3) cases or decisions: two (2) were settled by consent and one (1)  was a judgment pronounced by default.  Not only was this allegation of Plaintiffs misleading, but Plaintiffs actually failed to disclose the one contested judgment which is the only judicial authority concerning its mark, a case Plaintiffs actually lost.

[66]        In A. Lassonde and Fils Ltée vs. Imperial Tobacco Ltd.  (1988) 17 C.P.R. (3d) 8 at, 16 (F.C.T.D.), the Federal Court, Trial Division, dismissed Plaintiff's opposition to a trade-mark application by Imperial Tobacco Limited and ruled that:

·        Oasis was not an inherently strong mark;

·        Oasis was not inherently distinctive;

·        Oasis was a weak mark claimed by several people as a common trade-mark;

·        notwithstanding that Plaintiffs were a rapidly growing business they could not be said to have wide recognition among the Canadian public;

·        the products sought to be marketed were dissimilar and significantly distinct.

Rouleau, J. states at page 15:               

"I was in no way persuaded that the appellant's trade mark OASIS is so distinctive that it can be characterized as a strong mark.  In fact, the respondent was able to show, both before the registrar and at the hearing in this court, that the trade mark OASIS is a weak mark since it is claimed by several people and is a common trade mark."

He continues at pp. 16,17:

"As regard the requirements affecting the type of wares and the nature of the trade, I am in complete agreement with the decision by the registrar.  Like him, I do not think that the respondent's manufactured tobacco products and the appellant's fruit juices and beverages or even possibly preserves, desserts, soft drinks and candy can be confused solely because the wares all bear the trade-mark OASIS.  Tobacco and refreshments are very different types of wares: I concede that they are both consumer goods which may be found in the same commercial establishment, but their inherent characteristics, such as their containers, their components, form, taste, nutritional aspects and effects or even the way in which they are consumed, surely cannot be associated.  The type of product to be marketed under the mark OASIS is so different in the case at bar that it constitutes a significant distinction.

In my opinion there is an even greater difference in the nature of the trade in each product.  The tactics and methods used by the manufactured tobacco industry to sell its products are very different from those of the food industry.  Further, there is no resemblance between the appearance and the location of the products in a store: tobacco products are generally grouped behind a counter while foods such as fruit juice or beverages are on display stands accessible to everyone.  However, this is just an example which serves to show one of the reasons why I do not think that a reasonable person would confuse the origin of the products associated with the appellant's and the respondent's trade-marks.

Finally, as regards the degree of resemblance between the trade-marks in appearance or sound or the ideas suggested by them, they are identical.  However, more than this is necessary to create confusion: Monsieur Silencieux Ltd. v. Clinique du Silencieux du Saguenay Inc. (1972), 6 C.P.R. (2d) 23, per Pratte J.  As the writer Harold G. Fox so aptly observes at p. 173 of his text The Canadian Law of Trade Marks and Unfair Competition, 3^rd ed. (1972):

When it is contended that two words are confusing by reason of the fact that they suggest the same idea regard should be had to the nature of the words. If the words are distinctive, in the sense of being invented words, small differences will not be sufficient to distinguish them, whereas if the words are common or descriptive in meaning, they must be taken with their disadvantages. No person is entitled to fence in the common of the English language and words of a general nature cannot be appropriated over a wide area.

(My emphasis)

Taking into consideration all the preceding aspects of the case at bar, the sole resemblance between the trade  marks is not a sufficient reason for concluding that the possibility of confusion exists."

(Underlining by the undersigned)

[67]        To further bolster their claim, Plaintiffs invoke the fact that they distribute and sell edible products made out of olive oil in conjunction with the mark "Olinda".  However, the application for the trade-mark Olinda, in connection with olive oil and olive oil blends, for products which have only been distributed since the spring of 2006, was  filed after Defendant commenced marketing its products in 2004.  No evidence was actually filed to support the likelihood of confusion with this mark.

[68]        In Aliments Breton (Canada) Inc. c. Bal Global Finance Canada, 2010 QCCA 1369 , a recent unanimous judgment of the Court of Appeal of Quebec, Justice Thibault states the general principles and theory relating to the application of arts. 54.1 to 54.6 C.C.P. :

[37] Selon l'article 54.1 C.p.c., le tribunal peut en tout temps, même d'office, déclarer un acte de procédure abusif.  L'abus peut notamment résulter d'un acte de procédure manifestement mal fondé.  En vertu de l'article 54.2 C.p.c., lorsqu'une partie établit sommairement que l'acte de procédure attaqué peut constituer un abus, il y a renversement du fardeau sur l'autre partie à qui il incombe alors de «démontrer que son geste n'est pas exercé de manière excessive ou déraisonnable et se justifie en droit».  Dans ce contexte, la jurisprudence découlant des articles 75.1 et 75.2 C.p.c. demeure pertinente, particulièrement quant à la notion d'abus et à la définition d'acte de procédure manifestement mal fondée.  Sans entrer dans les détails, la jurisprudence a consacré la règle selon laquelle le rejet d'une procédure doit reposer sur la conviction du tribunal qu'elle est manifestement mal fondée [13].  La jurisprudence a aussi enseigné que le rejet doit être appliqué avec la plus grande prudence [14].  Ces précédents devront toutefois être nuancés pour tenir compte de la question du renversement du fardeau lorsque la procédure paraît abusive.  Les nouvelles dispositions vont plus loin que les anciennes en ce qu'elles visent non seulement les procédures abusives, mais aussi celles qui «peuvent» constituer un abus (article 54.2 C.p.c.) ou qui paraissent abusives (54.3 C.p.c.) et en ce qu'elles prévoient des mesures alternatives au rejet de la procédure ou non, qui constituaient les deux seules options possibles sous l'article 75.1 C.p.c. Ces mesures alternatives sont décrites à l'article 54.3 C.p.c. dont je viens de traiter.

[38]  L'article 54.3 C.p.c. permet d'imposer des conditions lorsque la procédure «est» ou «paraît» abusive.  Il est conçu pour régler une variété de difficultés susceptibles de se produire en pareille circonstance notamment pour concilier le droit d'une partie à une défense pleine et entière et celui de l'autre de na pas subir les inconvénients d'un long procès si celui-ci s'avérait inutile en raison d'une défense abusive, par exemple.  Cette disposition s'inscrit dans le contexte d'efficacité promu par les récents amendements au Code de procédure civile comme la scission d'instance (article 273.1 C.p.c.), la gestion de l'instance (article 151.1 et suivants C.p.c.) et elle respecte aussi la règle de la proportionnalité édictée à l'article 4.3 C.p.c.

[69]        In the circumstances of the present case the Court concludes that 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 trade-mark. Obviously Plaintiffs expected that, given the threat which the action represented to Defendant's very corporate existence, given that Defendant was still a fledgling business, given the projected cost of such proceedings and, given the obvious disparity in the respective power and resources of the parties, that Defendant would retreat and succumb to their demands, and cease using its mark and change its corporate name or, perhaps would ensure its survival and avoid an economically and resource draining battle by signing a licensing agreement with Plaintiffs - as others have done in the past. 

[70]        Such menacing and abusive conduct cannot be condoned with impunity.

[71]         Defendant was forced to engage in a long, difficult, and expensive costly battle, not only economically draining to the company, but also personally to its president and sole representative - a battle with no legal foundation into which it was drawn. Defendant was obliged to use its resources, and the services of its President and staff to defend itself.  By the end of the trial, according to the testimony of Defendant's President, Defendant had incurred legal fees to protect its rights, in the amount of one hundred thousand ($100,000.) This loss is without consideration of the stress such an action engendered; the effect of the proceedings on the business in general, on its finances, on the inability of the directors to focus on business development rather than on the defence of the company; the effect on Defendant's clientele; the effect on the expansion and the future of the company; the personal resources, energy and time expended by the directors to defend the action; the fees and costs of professionals other than the attorneys of record, and, resource persons, such as accountants consulted or engaged to counsel or assist Defendant.

[72]        Pursuant to art. 54.4 C.C.P., the Court may, where there is such apparent abuse order a provision for costs, or, condemn the abusive party to damages, including extrajudicial legal fees and costs, in addition to punitive damages.  Such a condemnation is warranted in the present circumstances.

[73]        Plaintiffs will be condemned to pay Defendant one hundred and twenty-five thousand dollars ($125,000). This amount represents punitive damages of twenty-five thousand dollars ($25,000).  In addition, notwithstanding the imprecise nature of the proof concerning Defendant's extra-judicial fees, the Court, given the nature, complexity and length of the proceedings, and on the basis of judicial cognizance that such complex litigation easily entails extrajudicial fees of this amount and more[2] will condemn Plaintiff to pay one hundred thousand dollars ($100,000) on account of the extrajudicial fees and costs incurred by Defendant in defence of the present action. Defendant's rights to claim further damages will be reserved, including the right to additional extrajudicial legal fees, for all damages it may have suffered as a result of the present proceedings, and, any other proceedings between the parties.

 

VI  APPENDIX

Trade-marks Act, R.S.C.,1985, c.T-13

Definitions

2. In this Act,

 

"confusing"
 

"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;

 

"trade-mark"
"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,

 

6. (1) [When mark or name confusing]  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…

 

 (5) [What to be considered] 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.

R.S., c. T-10, s. 6.

 

7. [Prohibitions] No person shall…

 (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;

 

19. [Rights conferred by registration] Subject to sections 21, 32 and 67, 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.

 

20. (1) [Infringement] 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 its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name…

 

22. (1) [Depreciation of goodwill]  No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto.

 

(2) [Action in respect thereof]  In any action in respect of a use of a trade-mark contrary to subsection (1), the court may decline to order the recovery of damages or profits and may permit the defendant to continue to sell wares marked with the trade-mark that were in his possession or under his control at the time notice was given to him that the owner of the registered trade-mark complained of the use of the trade-mark.

 

…

 

53.2 [Power of court to grant relief]  Where a court is satisfied, on application of any interested person, that any act has been done contrary to this Act, the court may make any order that it considers appropriate in the circumstances, including an order providing for relief by way of injunction and the recovery of damages or profits and for the destruction, exportation or other disposition of any offending wares, packages, labels and advertising material and of any dies used in connection therewith. 

 

Civil Code of Procedure, (Arts. 54.1 to 54.6 c.c.p.) (as amended by An Act to Amend the Civil Code of Procedure to Prevent Improper Use of the Courts, S.Q., 2009, c.12)

 (2) require undertakings from the party concerned with regard to the orderly conduct of the proceeding;

 

 (3) suspend the proceeding for the period it determines;

 

 (4) recommend to the chief judge or chief justice that special case management be ordered; or

 

 (5) order the initiator of the action or pleading to pay to the other party, under pain of dismissal of the action or pleading, a provision for the costs of the proceeding, if justified by the circumstances and if the court notes that without such assistance the party's financial situation would prevent it from effectively arguing its case.

 

54.4. On ruling on whether an action or pleading is improper, the court may order a provision for costs to be reimbursed, condemn a party to pay, in addition to costs, damages in reparation for the prejudice suffered by another party, including the fees and extrajudicial costs incurred by that party, and, if justified by the circumstances, award punitive damages.

 

If the amount of the damages is not admitted or may not be established easily at the time the action or pleading is declared improper, the court may summarily rule on the amount within the time and under the conditions determined by the court.

 

54.5. If the improper use of procedure results from a party's quarrelsomeness, the court may, in addition, prohibit the party from instituting legal proceedings except with the authorization of and subject to the conditions determined by the chief judge or chief justice.

 

54.6. If a legal person or an administrator of the property of another resorts to an improper use of procedure, the directors and officers of the legal person who took part in the decision or the administrator may be ordered personally to pay damages.

 

 VII   CONCLUSIONS

 

[74]        FOR THESE REASONS,  THEREFORE THE COURT

1.  dismisses Plaintiffs' action for an injunction and damages;

2.  maintains Defendant's defence;

3. declares that Plaintiffs have engaged in the improper use of the Court to thwart the right of Defendant to the lawful use of its corporate name and trade-mark "Olivia's Oasis with design";

4.  condemns Plaintiffs to pay to Defendant damages in the amount of one hundred and twenty-five thousand dollars ($125,000), representing twenty-five thousand dollars ($25,000) as punitive damages and one hundred thousand dollars ($100,000) on account of Defendant's extrajudicial fees and costs incurred in defence of the present action, without prejudice to and under reserve of Defendant's right to apply to the Court for such further damages, including extrajudicial fees, as it may have incurred or suffered in connection with and as a result of the present proceedings and any other actions by Plaintiffs.

5. the whole with interest from the date of this judgment, and legal costs.

 

 

 

 

		__________________________________ DIONYSIA ZERBISIAS, J.S.C.
Me Alexandre Ajami
Miller Thomson Pouliot
for the Plaintiffs
Me Normand Painchaud
Sylvestre Fafard Painchaud
for the Defendant
Date of hearing:	October 19, 20, 21, 22 & 23, 2009.