Enigmatus, S.R.O. v. Playtika Ltd.

Enigmatus, S.R.O. v. Playtika Ltd.
Court (s) Database
Federal Court Decisions
Date
2024-05-17
Neutral citation
2024 FC 751
File numbers
T-2085-16
Decision Content
Date: 20240517
Docket: T-2085-16
Citation: 2024 FC 751
Ottawa, Ontario, May 17, 2024
PRESENT: The Honourable Justice Fuhrer
BETWEEN:
ENIGMATUS, S.R.O.
Plaintiff/ Defendant by Counterclaim
and
PLAYTIKA LTD., CAESARS NTERACTIVE ENTERTAINMENT LLC, AND PLAYTIKA (CANADA) INC.
Defendants
and
PLAYTIKA LTD.
Plaintiff by Counterclaim
JUDGMENT AND REASONS
(Public Version with Redaction of Confidential Version Issued May 17, 2024)
Table of Contents
I. Overview 3
II. Background 4
(1) The Parties 4
(2) The Parties’ Trademarks 5
(3) Other Related Events 7
(4) Procedural History 8
(5) Parties’ Evidence 10
(a) Defendants’ Fact and Expert Affidavits 10
(b) Plaintiff’s Fact and Expert Affidavits 11
III. Issues 13
IV. Analysis 14
A. What is the applicable test for determining whether a summary trial is appropriate for resolving this dispute? 14
B. Have the Defendants engaged in passing off within the meaning of paragraph 7(b) of the Trademarks Act, RSC 1985, c T-13? 18
(1) Applicable Principles 19
(2) Ownership Threshold 20
(3) Goodwill/Reputation 24
(4) Misrepresentation/likelihood of confusion 35
(5) Damage 49
C. Should the SLOTOMANIA Registration be expunged pursuant to section 57 of the Trademarks Act for invalidity under section 18? 50
(1) Applicable Principles 50
(2) Lack of Specificity in the Statement of Claim 51
(3) Playtika’s Entitlement to Registration of the SLOTOMANIA Mark 52
D. Is Enigmatus entitled to relief? 56
E. Has Enigmatus infringed, engaged in passing off in respect of, and depreciated the goodwill attaching to, the SLOTOMANIA Mark within the meaning of sections 19 and 20, subsection 22(1), and paragraph 7(b) of the Trademarks Act? 57
V. Conclusion 60
VI. Costs 60
(1) Applicable Principles 60
(2) Analysis 62
(a) Result of the proceeding; amounts claimed and amounts recovered – paragraphs 400(3)(a) and (b) 63
(b) Importance and complexity of the issues; amount of work - paragraphs 400(3)(c) and (g) 64
(c) Conduct that tended to shorten or lengthen the proceeding; failure by a party to admit anything that should have been admitted - paragraphs 400(3)(i) and (j) 64
(d) Whether the expense required to have an expert witness give evidence was justified – paragraph 400(3)(n.1) 66
Annex “A”: Relevant Provisions 68
Annex “B”: Particulars of Registration Nos. TMA836402 and TMA1113375 77
I. Overview [1] The Defendants, Playtika Ltd., Caesars Interactive Entertainment LLC and Playtika (Canada) Inc., bring this motion for summary trial in the context of the expungement and passing off action started by the Plaintiff, Enigmatus, s.r.o., in 2016.
[2] At the heart of the Plaintiff’s action are the questions of whether the registered trademark SLOTOMANIA, owned by the Defendant, Playtika Ltd., is confusing with the Plaintiff’s unregistered trademark SLOTOPOLY, and what consequences flow from the highly fact‑dependent circumstances of this action.
[3] For the reasons that follow, I determine that this matter is apt for disposition by way of summary trial. Further, I grant the Defendants’ motion in its entirety. The Plaintiff’s claim for expungement and passing off will be dismissed for failure to establish confusion and invalidity. As a result, the registration for SLOTOMANIA will be maintained, thus providing a complete defence to the Plaintiff’s passing off claim. The Defendants’ counterclaim also will be dismissed.
[4] Under the heading “Background,” I next provide several salient factual findings regarding the parties, their trademarks, and other related events, followed by summaries of the action’s procedural history and the parties’ evidence on this motion. A statement of the applicable issues then will precede and inform the analysis.
[5] See Annex “A” to these reasons for relevant legislative provisions.
II. Background (1) The Parties
[6] The Plaintiff, Enigmatus, s.r.o. [Plaintiff or Enigmatus], is a corporation of the Czech Republic and an online and mobile game developer. The Plaintiff was incorporated in 2009. Its business grew from the business activities of a group of companies with common ownership, Interactive One s.r.o [Interactive One], I3 CZ s.r.o. [I3 CZ], and Crystal Dynamic Ltd. [Crystal Dynamic] [collectively, for convenience of reference only, the Enigmatus Related Companies]. Until Crystal Dynamic ceased operations in 2019, Interactive One and I3 CZ used Crystal Dynamic to enter into contracts outside the Czech Republic. All four companies have or had overlapping shareholders.
[7] The Defendant, Playtika Ltd. is an Israeli company and, similarly, a developer of online and mobile games. Playtika (Canada) Inc. is a Canadian corporation headquartered in Montréal, Québec. Playtika Ltd. and Playtika (Canada) Inc. are indirect subsidiaries of Playtika Holding Corp.; all three companies are part of the Playtika group of companies. According to Playtika Ltd., Playtika (Canada) Inc. has not carried on any business related to the SLOTOMANIA game. Unless referred to by its full name, Playtika Ltd. thus will be referred to as “Playtika” from this point onward in these reasons.
[8] The Defendant, Caesars Interactive Entertainment LLC [Caesars], is a subsidiary of Caesars Growth Partners, LLC, which is a joint venture between Caesars Acquisition Company and Caesars Entertainment Corporation. Playtika formerly was a subsidiary of Caesars. Prior to the commencement of the claim, Caesars sold its interest in Playtika. Both before and after the sale, Playtika and Caesars have been parties to cross-marketing agreements.
(2) The Parties’ Trademarks
[9] The parties’ respective trademarks have coexisted in the competitive market for online casino and slot-themed games for at least 12 years, without any demonstrated instances of actual confusion.
[10] The word mark SLOTOMANIA [SLOTOMANIA Mark] is registered under registration No. TMA836,402 dated November 14, 2012 in the name of Playtika Ltd. [SLOTOMANIA Registration]. The SLOTOMANIA Mark was applied for on May 12, 2011 under application No. 1,527,704 for use in association with online computer and video game related goods and services.
[11] Playtika also has obtained more recently registration No. TMA1,113,375 for the SLOTOMANIA Logo (colour), shown below, dated November 5, 2021 for use in association with online computer and video game related goods and services [SLOTOMANIA Logo]. The latter is not part of the Plaintiff’s expungement claim.
[12] From this point forward, I will refer to the SLOTOMANIA Mark and the SLOTOMANIA Logo collectively as the SLOTOMANIA Marks. See Annex “B” to these reasons for the particulars of Playtika’s trademark registrations for the SLOTOMANIA Marks.
[13] Enigmatus asserts rights in the unregistered word mark SLOTOPOLY and design mark SLOTOPOLY & Design shown below [collectively, the SLOTOPOLY Marks], that it acquired from the Enigmatus Related Companies.
[14] Interactive One’s Managing Director, Václav Dejčmar, acquired the domain slotopoly.com in 1999 and transferred it to Enigmatus on January 11, 2010 via a Transfer Agreement between these companies, which also encompassed “product names, logos including their graphic design.”
[15] Enigmatus has applied to register the SLOTOPOLY Marks in Canada under application Nos. 2,217,410 and 2,217,409, both filed on October 20, 2022, for the word mark and the design mark respectively. Enigmatus previously applied to register the word mark SLOTOPOLY in Canada under application No. 1,710,683 filed on January 14, 2015. Opposed by Hasbro, Inc. and Playtika, Enigmatus abandoned the latter application during the opposition proceedings. I note that Enigmatus launched this action approximately one month after Playtika opposed application No. 1,710,683.
(3) Other Related Events
[16] Enigmatus previously has attempted to register the SLOTOPOLY Marks, as well as Playtika’s SLOTOMANIA Mark.
[17] Enigmatus registered SLOTOPOLY with the United States Patent and Trademark Office [USPTO] on January 8, 2013 under registration number 4273348 for entertainment services, namely, providing online computer and electronic games, which may be played on cellular, handheld and wireless devices. The registration is the subject of a Petition for Cancellation filed by Hasbro, Inc., which alleges confusion with Hasbro’s well-known trademark MONOPOLY.
[18] Playtika sent a demand letter dated November 25, 2013 to Enigmatus requesting that Enigmatus immediately cease all use of SLOTOPOLY, agree in writing that it will not use, register, or attempt to register the mark in the future, and cancel its federal registration for SLOTOPOLY in the United States.
[19] By letter dated July 1, 2014, Enigmatus disagreed with Playtika’s position and indicated that it is prepared to defend its trademark rights.
[20] In a letter dated November 28, 2014, Enigmatus wrote to Playtika seeking to work “together … to resolve these matters to our mutual business satisfaction.” Mr. Jan Kopinec, principal of Enigmatus, affirmed that he received no response to this letter, nor to his follow up letter dated January 12, 2015. The Defendants did not dispute this.
[21] On August 28, 2014, Enigmatus applied to register the SLOTOMANIA Mark in its own name in the European Union, which was refused on January 20, 2015. Enigmatus also applied to register the SLOTOMANIA Mark on July 8, 2014 in the United Kingdom, which was opposed by Playtika and refused on April 7, 2015.
[22] In addition, Enigmatus or its principal, Mr. Kopinec, obtained two domain names in 2014 containing “slotomania,” namely www.slotomania.name and www.slotomania.land. About a year later, these domain names redirected to slotopoly.com.
(4) Procedural History
[23] Below is a brief summary of the procedural history of this action, which is described more extensively in the Defendants’ Affidavit of Anna Antonetti, dated December 16, 2022.
[24] The Plaintiff commenced this proceeding by way of Statement of Claim filed on December 2, 2016 and served on December 16, 2016. The pleadings stage was completed substantially by September 2017, with some amendments being made in October 2019 and, again, in late 2022 and early 2023.
[25] The discovery process in this matter was protracted, spanning about five years from the initial exchange of affidavits of documents in 2017. In an order dated April 11, 2022, further to a notice of status review dated March 17, 2022, Justice Aylen referred to the Plaintiff’s repeated delays in advancing the proceeding.
[26] To date, the Plaintiff has posted security for costs totalling $164,000.
[27] I also note that the Defendants, in the normal course, made a Request to Admit to which the Plaintiff responded with an identically worded response to each of the 119 requests as follows: “The Plaintiff refuses to admit the truth of this fact at this date on the basis that it is not in full context, the pleadings are subject to amendment, and the evidence for the summary trial has not been delivered.”
[28] Having reviewed the facts put to the Plaintiff, I find the response to the Defendants’ Request to Admit was essentially unresponsive and in many instances unwarranted. Many, although not all, of the facts the Defendants sought to have admitted are verifiable in public records, such as a date of incorporation, a date of filing of an application or a date of registration. The Plaintiff’s conduct in this regard does not aid the work of the Court and is strongly discouraged.
[29] While I acknowledge the professional responsibility of counsel to advocate resolutely on behalf of their clients, this should not devolve into pointless procedural wrangling at every opportunity.
[30] As a further example, the Defendants corresponded with the Court in advance of the hearing of the motion to address the issue of maintaining, during the hearing, confidentiality of documents and information previously designated and filed with the Court as Confidential or Highly Confidential pursuant to the November 8, 2019 Confidentiality Order. There ensued a direction from the Court about the appropriate approach to the issue and a comprehensive response from the Defendants. Although the Plaintiff seemingly consented to the Defendants’ initial approach, it then took no position on the response and failed to elucidate on the rationale for this position to the satisfaction of the Court at the hearing. As a consequence, instead of the issue having been disposed of summarily in advance of the hearing, it occupied the opening of the three-day motion until, after hearing from the parties, the Court finalized and delivered the June 27, 2023 Confidentiality Order from the bench.
(5) Parties’ Evidence
[31] Below is a brief summary of each side’s evidence on this motion.
(a) Defendants’ Fact and Expert Affidavits
[32] Itai Sela Saldinger is the Director of Intellectual Property of Playtika. He provides evidence about Playtika’s business, the SLOTOMANIA game, including its marketing, and Playtika’s relevant trademarks. Most of the uses of SLOTOMANIA evidenced by exhibits to the Saldinger affidavit show the SLOTOMANIA Logo, in addition to the SLOTOMANIA Mark (i.e. the word mark). In addition, Mr. Saldinger alleges bad faith conduct by the Plaintiff throughout the course of this litigation. Mr. Saldinger was cross-examined.
[33] Dr. Shana Poplack provides an expert opinion as a sociolinguistic expert on the degree of resemblance between the trademarks SLOTOPOLY and SLOTOMANIA, as concerns appearance, sound and ideas. Dr. Poplack was cross-examined.
[34] Jessica San Agustin is a private investigator and was retained by Defendants’ counsel to access various pages on online and mobile platforms related to online and mobile games, to investigate the accessibility and availability of those games through those platforms and to obtain screencaptures of the pages that she accessed. She was cross-examined.
[35] Elizabeth Dingman is a reference librarian employed by Defendants’ counsel. She provides evidence regarding the dictionary definitions from various reference sources for the words mania, matey, bots, mafia, slot, and slot machine. She was not cross-examined.
[36] Mary P. Noonan is a trademark searcher employed by Defendants’ counsel. She provides evidence of a search of the Canadian trademarks register for all active trademark applications, registrations, or section 9 marks that include the word SLOT. She was not cross-examined.
[37] Anna Antonetti is a legal assistant employed by Defendants’ counsel. She provides a timeline of events and steps in this action. She was not cross-examined.
(b) Plaintiff’s Fact and Expert Affidavits
[38] Jan Kopinec is the Head of Executive of Enigmatus. He provides evidence regarding Enigmatus and its related companies, the SLOTOPOLY game and its various forms, the conception and marketing of the game, and the financial impact of the Defendants’ alleged trademark passing-off and infringement activities. Mr. Kopinec was cross-examined.
[39] Isaac Pflaum is an expert in technical software product and data analysis. He provides an analysis of data logs of the slotopoly.com domain and whether the Slotopoly application was developed, tested, distributed, and promoted in a manner consistent with the generally accepted practices between 2000 and 2010. Mr. Pflaum was cross-examined.
[40] Jessie Stricchiola is an expert in the fields of digital marketing and online advertising, search engine optimization, paid search advertising, web analytics, and website design and development. She provides evidence regarding Internet domain ownership and the nature of the relationship between Enigmatus and the Enigmatus Related Companies, in addition to Slotland. Ms. Stricchiola was not cross-examined.
[41] Stefan Dollinger is a Professor of English Linguistics at the University of British Columbia. He was asked to provide an expert opinion as to the degree of resemblance between the trademarks SLOTOPOLY and SLOTOMANIA as to appearance, sound, and ideas suggested, and to comment on whether he agrees with the findings, opinions and conclusions in the Poplack affidavit. Professor Dollinger was cross-examined.
[42] Václav Dejčmar is the Managing Director of Interactive One, a company related to Enigmatus. He provides information regarding his involvement in Enigmatus and his company’s relationship with Enigmatus, including the transfer of Interactive One’s slotopoly.com domain to Enigmatus. Mr. Dejčmar was cross-examined.
[43] Jiří Kocik is a lawyer in Czech Republic who drafted the Transfer Agreement between Interactive One and Enigmatus regarding the transfer of the slotopoly.com domain. He was not cross-examined.
III. Issues [44] Against the above backdrop, I find that this motion and the summary trial raise the following issues for the Court’s determination:
(1)What is the applicable test for determining whether a summary trial is appropriate for resolving this dispute?
(2)Have the Defendants engaged in passing off within the meaning of paragraph 7(b) of the Trademarks Act, RSC 1985, c T-13?
This question raises the following more granular issues:
Does Enigmatus own valid and enforceable trademark rights, including reputation, in the SLOTOPOLY Marks?
Has there been a misrepresentation or likelihood of confusion resulting from the use of the SLOTOMANIA Mark?
Has Enigmatus suffered any damage or likely damage from the use of the SLOTOMANIA Mark?
(3)Should the SLOTOMANIA Registration be expunged pursuant to section 57 of the Trademarks Act for invalidity under section 18?
(4)Is Enigmatus entitled to relief?
(5)Has Enigmatus infringed, engaged in passing off in respect of, and depreciated the goodwill attaching to, the SLOTOMANIA Mark within the meaning of sections 19 and 20, subsection 22(1), and paragraph 7(b) of the Trademarks Act?
IV. Analysis A. What is the applicable test for determining whether a summary trial is appropriate for resolving this dispute? [45] Rules 213 and 216-219 of the Federal Courts Rules, SOR/98-106 [Rules] apply to motions for summary trial. In particular, “[i]f the Court is satisfied that there is sufficient evidence for adjudication, regardless of the amounts involved, the complexities of the issues and the existence of conflicting evidence, the Court may grant judgment, either generally or on an issue, unless it would be unjust to do so”: ViiV Healthcare Company v Gilead Sciences Canada, Inc, 2020 FC 486 [ViiV FC] at para 12, aff’d 2021 FCA 122 [ViiV FCA], citing subrule 216(6).
[46] This Court previously has held that a “summary trial is appropriate where the issues are well defined, the facts necessary to resolve the issues are already in evidence, credibility issues can be resolved, and the questions of law can be dealt with as they could be after a full trial” [citations omitted]: Eli Lilly v Apotex, 2022 FC 1398 [Eli Lilly] para 5. Further, the party seeking summary trial, here Playtika, has the burden of showing that summary trial is “appropriate,” in the sense of whether it should proceed: ViiV FC, above at para 19.
[47] The Defendants argue that the record is complete on their motion for summary trial, resulting in efficiency by avoiding a full trial. Noting that the determination of the suitability for summary trial should be made in the context of the motion for summary trial itself, I agree: Viiv Healthcare Company v Gilead Sciences Canada, Inc, 2020 FC 11 at para 20, aff’d ViiV FCA, above. I find it hard to imagine what other evidence the parties would assemble, apart from live testimony, were the Defendants’ motion unsuccessful in this regard: Collins v Canada, 2014 FC 307 at para 31. Further, in my view, there are no serious questions of credibility here that require resolution based on live testimony: Deegan v Canada (Attorney General), 2019 FC 960 [Deegan] at para 211, aff’d 2022 FCA 158.
[48] In other words, I am not persuaded that, in the case before me, “the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication”: Hryniak v Mauldin, 2014 SCC 7 [Hryniak] at para 33. Indeed, the parties spent most of their time addressing the merits of the questions in issue in the summary trial, as opposed to whether the summary trial should proceed at all. More to the point, the Plaintiff did not dispute that the matter could be resolved through a summary trial. That said, the lack of opposition to the motion in itself does not end the Court’s enquiry about the appropriateness of a summary trial.
[49] The Defendants further argue, and I agree, that the summary trial motion is about the legal conclusions that the Court can draw from the facts established by the evidence: Deegan, above at para 211. I add that the question of fairness “is not [about] whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute”: Hryniak, above at para 50. Although the Hryniak case arose from a summary judgment motion, in my view the above principles are equally applicable to a motion for summary trial. I am satisfied that I can find the necessary facts in the record before me and apply the relevant legal principles to resolve the dispute.
[50] Having determined that the summary trial of this action should proceed, I turn next to the question of the applicable burden of proof. Proceeding with a summary trial, where the moving party is a defendant, adds a procedural layer of complexity to the burden of proof, in my view. The defendant moving party typically leads with their evidence and arguments, instead of the plaintiff, as would be the case at trial.
[51] That said, I am satisfied that the burdens for determining the merits of the summary trial reflect those of the underlying action: Steelhead LNG (ASLNG) Ltd v ARC Resources Ltd, 2022 FC 998 [Steelhead] at para 32, aff’d 2024 FCA 67, citing Janssen Inc v Pharmascience Inc, 2022 FC 62 [Pharmascience] at paras 46-62, aff’d 2024 FCA 10; Janssen Inc v Apotex Inc, 2022 FC 107 [Apotex] at paras 50-52, aff’d 2024 FC 9.
[52] In my view, this makes sense especially where the entirety of the underlying action is before the Court, as here, in the summary trial. This is to be contrasted with the situation in Eli Lilly, above at para 7, for example, where the defendants (moving parties) raised a narrower issue in their notice of motion and the trial judge, Justice St-Louis, thus was of the view that she was limited on the summary trial to the specific issue raised in the notice of motion.
[53] Later, in Gentec v Nuheara IP Pty Ltd, 2022 FC 1715 [Gentec], the same trial judge (as in Eli Lilly) noted that “[t]he parties each raised on the Motion what they raised in the underlying litigation,” with the result that “[t]he party making an assertion must prove it by relevant evidence and the application of appropriate law”: Gentec, above at para 38. Although this principle is attributed to ViiV FC, it stems in turn from Teva Canada Limited v Wyeth and Pfizer Canada Inc, 2011 FC 1169 [Teva] at para 36, rev’d on other grounds 2012 FCA 141, where former Justice Hughes states in the same paragraph that “[o]nce the matter is before the Court for determination by summary trial, the usual burden in a civil trial applies.”
[54] To the extent that Justice Manson’s earlier decision in ViiV FC has been interpreted as holding generally that “the burden of proof …pertains to what is raised in the motion for summary trial, not to what is raised in the underlying action” (see Mud Engineering Inc v Secure Energy (Drilling Services) Inc, 2022 FC 943 [Mud Engineering] at paras 6, 17-18), I disagree for the reasons articulated by Justice Manson in Steelhead, Pharmascience and Apotex.
[55] Given that the “competing” lines of cases, ViiV FC and Mud Engineering on the one hand, and Steelhead, Pharmascience and Apotex on the other, involve appeals that were dismissed (with the exception of Mud Engineering), in my view it lies with the Federal Court of Appeal to resolve the matter in a future appeal. Further, this is consistent with the Plaintiff’s position on this issue in oral submissions: “we await clarification from the Federal Court of Appeal on the correct approach.”
[56] In the meantime, I note that there is common ground in Mud Engineering (at para 17) and Steelhead (at para 34) that, on a motion for summary trial, both parties are required to put their best foot forward. In other words, they must prove their asserted positions “by relevant evidence and the application of appropriate law”: Teva, above at para 36. In the end, it falls to the Court to determine the legal consequences that flow from the established facts: Deegan, above at para 211.
[57] With the foregoing in mind, and agreeing with the Defendants, I conclude that Enigmatus bears the burden of establishing passing off, as well as the invalidity of the SLOTOMANIA Registration. In other words, Enigmatus must prove the essential elements of its action, while the Defendants have the burden of proving any affirmative defences.
[58] Although neither party disputes that a valid and subsisting trademark registration is a complete defence to an action for passing off, they both addressed the Plaintiff’s passing off claim before dealing with the issue of the validity of the SLOTOMANIA Registration. I thus will address the passing off claim first, followed by the expungement claim. My findings on the passing off claim will have a bearing on the Defendants’ counterclaim.
B. Have the Defendants engaged in passing off within the meaning of paragraph 7(b) of the Trademarks Act, RSC 1985, c T-13? [59] Stated simply, I am not persuaded Enigmatus has shown that Playtika has engaged in passing off. As explained below, I find that Enigmatus has not established sufficient goodwill or reputation in its SLOTOPOLY Marks. Regardless, I further find that Enigmatus has not demonstrated that SLOTOMANIA is likely to be confused with SLOTOPOLY.
[60] I add that, in my view, the action against Caesars is without foundation. While Caesars was the parent company of Playtika at one time, I find that it was not involved in the present dispute. Neither was Playtika (Canada) Inc. for that matter.
[61] After a discussion of the applicable principles, I consider the threshold question of enforceable rights (i.e. Enigmatus’ alleged ownership of SLOTOPOLY), followed by an analysis of the asserted goodwill or reputation in SLOTOPOLY and then a confusion analysis. In light of my findings on these two elements of passing off, I decline to consider the issue of likely damage.
(1) Applicable Principles [62] In paragraphs 47-51 of Sadhu Singh Hamdard Trust v Navsun Holdings Ltd, 2021 FC 602 [Hamdard Trust], I summarized the general principles applicable to a claim for passing off under paragraph 7(b) of the Trademarks Act.
[63] The three essential elements of a passing off claim are (1) the existence of goodwill or reputation attached to a plaintiff’s goods or services, (2) a misrepresentation to the public by the defendant resulting in deception, and (3) damage or likely damage suffered by the plaintiff: Hamdard Trust, above at para 48, citing Ciba-Geigy Canada Ltd v Apotex Inc, [1992] 3 SCR 120 at 132. I deal with each element in turn below.
[64] A fundamental or minimum threshold to establishing goodwill or reputation is the existence of enforceable trademark rights: Hamdard Trust, above at para 49.
[65] Further, the determination of the issue of deception to the public involves a consideration of the likelihood of confusion under section 6 of the Trademarks Act: Hamdard Trust, above at para 51.
[66] According to paragraph 7(b) of the Trademarks Act, the relevant date for assessing whether passing off has occurred is the time when Playtika began to direct attention to its goods, services or business in a manner likely to cause confusion in Canada. The date of first use of the SLOTOMANIA Mark in Canada claimed in the SLOTOMANIA Registration (for the goods (1) and the services) and established at trial, is December 16, 2010. I thus will use this date in connection with the passing off analysis.
(2) Ownership Threshold [67] I find that, on a balance of probabilities, Enigmatus has established the requisite ownership of the SLOTOPOLY Marks, at least as of December 16, 2010.
[68] I agree with the Defendants that no trademark rights flow to Enigmatus based on use of the slotopoly.com domain in itself, that is, as a domain name as opposed to a trademark. I am not persuaded, however, that the Transfer Agreement, when considered against the backdrop of the Plaintiff’s evidence in this regard, is insufficient to show ownership of the SLOTOPOLY Marks.
[69] Although the Transfer Agreement dated January 11, 2010 from Interactive One to Enigmatus was first disclosed to the Defendants only in March 2023, after they brought this motion for summary trial, I note that the Defendants did not cross-examine Jiří Kocik, the lawyer who prepared the Transfer Agreement, and who provided a sworn affidavit and an invoice for his services. The invoice is dated February 1, 2010.
[70] The Defendants take issue with the contract dated August 5, 2004 between Crystal Dynamic and a licensee that describes Crystal Dynamic as the “owner of all rights, title, and interests” of the Slotopoly Application(s) (as the term “Application(s)” was defined in the contract). At the hearing of this motion, the Defendants argued that there was no agreement or contract between Crystal Dynamic and Interactive One assigning the rights to Slotopoly back to Interactive One, thus resulting in doubt about Interactive One’s ownership of the SLOTOPOLY Marks as of the date of the Transfer Agreement.
[71] I note, however, that Mr. Dejčmar affirmed that Crystal Dynamic was a company incorporated in Saint Christopher and Nevis for the purpose of contracting with companies in commonwealth jurisdictions, and that he and a Mr. Votava each own 50% of the company.
[72] Further, Mr. Dejčmar affirmed his intention that all rights, goodwill, and reputation of the SLOTOPOLY Marks remain with Interactive One before the Transfer Agreement. He also confirmed that I3 CZ and Crystal Dynamic have always cooperated with and operated under Interactive One’s control.
[73] In addition, Mr. Kopinec confirmed that prior to the Transfer Agreement, Crystal Dynamic and I3 CZ had a licence to use the slotopoly.com domain and the SLOTOPOLY Marks, but the ownership had never been transferred to Crystal Dynamic or I3 CZ. Mr. Dejčmar deposed to this in his affidavit. During the hearing, Enigmatus pointed out that Mr. Kopinec and Mr. Dejčmar were not cross-examined on the existence of a licence between Interactive One and I3 CZ and/or Crystal Dynamic.
[74] Although the 2004 contract on its face contradicts the assertion of a licensing arrangement between Interactive Once and Crystal Dynamic at that time, the Defendants have not pointed to any documents or testimony where Mr. Kopinec or Mr. Dejčmar admit that Interactive One was not the owner of the rights in SLOTOPOLY at the time of the Transfer Agreement in January 2010.
[75] In the circumstances, I find that there essentially was no material break in ownership or the chain of title from Interactive One to Enigmatus. In reaching this conclusion, I take into account the intention of these companies to work in an interrelated manner, as well as an implied licence, as described below, from Interactive One to Crystal Dynamic and I3 CZ to use the SLOTOPOLY Marks as affiliated companies (i.e. the Enigmatus Related Companies).
[76] Although there is no evidence of written licensing arrangements between Interactive One and Crystal Dynamic and/or I3 CZ, I note that a licence to use a trademark can be inferred: Live! Holdings, LLC v Oyen Wiggs Green & Mutala LLP, 2019 FC 1042 at para 50. The Plaintiff here has provided evidence to substantiate a licence relationship, including the names of the asserted licensees, Interactive One, I3 CZ, and Crystal Dynamic, their shareholders, affidavit evidence and testimony from Mr. Dejčmar, the part-owner of all three of these companies, and detailed information regarding the companies’ involvement and activities with the SLOTOPOLY Marks.
[77] The Defendants take issue with Mr. Kopinec’s statement in his affidavit that “for corporate and VAT tax planning and organizational reasons, Interactive One remains the technical legal owner of the Slotopoly.com domain,” even though Enigmatus has been managing the slotopoly.com website since the incorporation of Enigmatus.
[78] Mr. Kopinec was asked on cross-examination “What does that mean that Interactive One is the technical legal owner?” and Mr. Kopinec replied “I think it means about what implies this contract. That simply the account, per the domain was hosted, was the account of Interactive One.” Mr. Kopinec responded that Enigmatus became the registrant for slotopoly.com on December 18, 2013, but Interactive One remains the host of the domain. He further clarified that Interactive One has no ownership of slotopoly.com but, in Europe, because Interactive One is the host, it could be considered property of Interactive One that is bound by contract with Enigmatus.
[79] I am persuaded by the Plaintiff’s submissions during the hearing of this matter, namely that the Transfer Agreement contemplates continuing cooperation between Enigmatus and Interactive One, and that there is no inconsistency between the testimonies of Mr. Kopinec and Mr. Dejčmar in this regard.
[80] For example, the Transfer Agreement states that it involves the sale and transfer from Interactive One to Enigmatus, the Slotopoly domain, product names, logos including their graphic design, marketing campaign designs, software licences, customer databases, usage statistics, and all other related intellectual property rights.
[81] It also stipulates that although Interactive One and Enigmatus will continue to cooperate in the operation and development of the Slotopoly products, Enigmatus has the exclusive right to operate the Slotopoly products and to develop them.
[82] The Transfer Agreement further indicates that the cooperation means assistance in the transfer of technical know-how, processing of customer databases, evaluation of marketing campaigns already conducted, management of Internet domains, and possibly other activities as agreed to by the parties.
[83] In my view, the above provisions are indicative that Enigmatus has the right to exercise the control over the character or quality of the SLOTOPOLY products, while the cooperative efforts do not go to control but rather are more advisory in nature. In the circumstances, I am satisfied that there is sufficient evidence to determine, on a balance of probabilities, that the Plaintiff has established the requisite ownership and control in respect of the SLOTOPOLY Marks.
(3) Goodwill/Reputation [84] Notwithstanding crossing the ownership threshold, I find that Enigmatus has not established sufficient goodwill or reputation in its SLOTOPOLY Marks in Canada to succeed in its passing off claim.
[85] Enigmatus alleges that, prior to its incorporation in 2009, the reputation and goodwill in the SLOTOPOLY Marks arose from the adoption and use of the slotopoly.com domain and the launch and running of the SLOTOPOLY mobile app. I deal with each in turn below.
(a) Slotopoly.com Domain [86] Contrary to the Plaintiff’s submissions, use of a domain name per se, in my view, is not in itself trademark use, even if it resolves to a website that promotes goods and services.
[87] This Court’s decision in Salam Toronto Publications v Salam Toronto Inc, 2009 FC 24 [Salam] is of no assistance to the Plaintiff. There, the issue facing the Court was whether the defendant’s use of the plaintiff’s registered trademark SALAM TORONTO in trade names, including domain names, and on the defendant’s website, could infringe the plaintiff’s registered trademark.
[88] Subsection 6(4) of the Trademarks Act, whether prior to June 17, 2019 when the action presently before me was commenced or after, contemplates confusion between a trademark and a trade name if the use of both “in the same area would be likely to lead to the inference that the goods or services associated with the business carried on under the trade name and those associated with the trademark are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.”
[89] In other words, the context for the analysis in paragraph 40 of Salam was whether a third party’s use of a plaintiff’s trademark in the manner described (i.e. as or in a trade name) could constitute infringement of the registered trademark under subsection 6(4) of the Trademarks Act. This is something different than whether a plaintiff’s use of its own domain name as such constitutes trademark use, within the meaning of sections 2 (i.e. the definition of a “trademark,” which was not considered in Salam) and 4, or only trade name use. This distinction was drawn readily in subsequent opposition decisions that considered Salam. See, for example, 9333-4266 Québec inc v Clearsurance, Inc, 2020 TMOB 138 at paras 44-45, and Opus Corporation v HomeOpus Inc, 2017 TMOB 57 at paras 37-38, 42-43.
[90] Here, Enigmatus submits that evidence of a user landing on a static webpage displaying the trademark SLOTOPOLY establishes use of the trademark SLOTOPOLY via the domain name slotopoly.com. I disagree.
[91] According to Mr. Kopinec, the slotopoly.com domain was used from 1999 until 2012 to provide cached static content from the SLOTLAND platform to slotopoly.com customers. The platform is accessible via the slotland.com website, which is owned and operated by Slotland Entertainment SA, and involves a mix of play-for-fun games and real money gambling. Slotland Entertainment is unrelated to either the Plaintiff or one of the Enigmatus Related Companies. Users who wanted to play the SLOTLAND games were directed or redirected to the slotland.com website.
[92] More to the point, I find that during that time, from 1999 until 2010 when SLOTOMANIA games became available online (i.e. December 16, 2010), and through to April 25, 2014, there were no SLOTOPOLY branded games available for a user to play at www.slotopoly.com (although such games were available via mobile and Facebook apps). Instead, SLOTLAND branded games, that is the product of another company, could be accessed via the slotopoly.com domain name through direction or redirection to www.slotland.com.
[93] Even if the static webpage displaying SLOTOPOLY could be viewed as advertising of some sort for electronic games, advertising generally is not considered use of a trademark with goods, while advertising alone is not considered sufficient use of a trademark with services. Some aspect of services must be performed or delivered (or available for performance or delivery) in Canada: Miller Thomson LLP v Hilton Worldwide Holding LLP, 2020 FCA 134 at para 7; AT&T Intellectual Property II, LP v Lecours, Hebert Avocats Inc, 2017 FC 734 at para 13.
[94] Further, I agree with the Defendants that the slotopoly.com registration or user logs analyzed by the Plaintiff’s expert affiant, Isaac Pflaum, at best show that some Canadians may have reached the SLOTLAND platform from slotopoly.com. I accept that, once there, the users would have registered for SLOTLAND branded gaming services through a registration page on www.slotland.com. Mr. Pflaum’s analysis identified only 408 users who originated from Canada of 3,785 total worldwide users data from 1999-2010 that Mr. Pflaum asserts he validated.
[95] I add that the Defendants do not take issue with the authenticity of the registration or user logs, unlike the i