Stork Market Inc. v. 1736735 Ontario Inc. (Hello Pink Lawn Cards Inc.)

Stork Market Inc. v. 1736735 Ontario Inc. (Hello Pink Lawn Cards Inc.)
Court (s) Database
Federal Court Decisions
Date
2017-08-22
Neutral citation
2017 FC 779
File numbers
T-1447-11
Decision Content
Date: 20170822
Docket: T-1447-11
Citation: 2017 FC 779
Toronto, Ontario, August 22, 2017
PRESENT: The Honourable Mr. Justice Southcott
BETWEEN:
THE STORK MARKET INC
AND RICCARDO FRONTE
Plaintiffs/
Defendants by Counterclaim
and
1736735 ONTARIO INC
O/A HELLO PINK LAWN CARDS INC AND
CIPRIANO PRIMICIAS III
Defendants/
Plaintiffs by Counterclaim
JUDGMENT AND REASONS
I. Overview
[1] This decision results from a trial of claims and counterclaims related to intellectual property rights between two companies, and their principals, active in the lawn sign business in the Greater Toronto Area [GTA] and other parts of southern Ontario. Specifically, the Plaintiffs claim infringement of registered trade-marks of two images of a stork holding a baby above its head under a banner announcing, respectively, “It’s a Girl” and “It’s a Boy”. The Plaintiffs also assert a claim for passing off under s. 7(b) of the Trade-marks Act, RSC 1985, c T-13 and a claim for copyright infringement. These claims all arise from the Defendants’ use and advertisement of lawn signs displaying images of a stork in a similar posture. The Defendants deny that their stork images infringe the Plaintiffs’ rights and seek a declaration that the Plaintiffs’ trade-mark registrations are invalid and an Order expunging those registrations.
[2] For the reasons explained below, I have found that the Plaintiffs’ trade-mark registrations are valid and have been infringed by the corporate Defendant, contrary to the Trade-marks Act. The claim by the corporate Plaintiff for passing off under s. 7(b) of the Trade-marks Act also succeeds, again against the corporate Defendant. The Plaintiffs have not convinced me that the individual Defendant has any personal liability for the claims under the Trade-marks Act. Nor have they convinced me that the Defendants have infringed the copyright of the individual Plaintiff in his stork images.
[3] The Plaintiffs’ success in their trade-mark infringement and passing off claims results in an award of $30,000 damages to the corporate Plaintiff, injunctive relief and an Order for destruction or delivery up under s. 53.2 of the Trade-marks Act. The claims and counterclaims are otherwise dismissed.
II. Background
[4] The Plaintiffs are an Ontario incorporated company called The Stork Market Inc. [Stork Market] and its owner-operator, Mr. Riccardo Fronte. In November 2009, Stork Market commenced its business, which consists solely of renting what the parties refer to as “lawn storks”, i.e. large signs depicting a stork and a newborn baby, intended to be placed on a customer’s front lawn to announce the birth of a child or a related event. Stork Market’s lawn storks all display one of two images. Both images include a location at which information such as a baby’s name, birth date and weight can be displayed. Other than this customization, Stork Market’s two images are identical, with the exception that the top of one image displays a pink banner with the words “It’s a Girl” and the top of the other displays a blue banner with the words “It’s a Boy”.
[5] The two images employed by Stork Market on its signs [the Stork Market Images] were designed in the fall of 2007 by Mr. Russell Challenger, who is a commercial artist and a long-time friend of Mr. Fronte. In November 2012, after the commencement of this lawsuit, Mr. Challenger and Mr. Fronte entered into an agreement entitled Copyright Assignment and Moral Rights Waiver [the Copyright Assignment] under which Mr. Challenger assigned to Mr. Fronte his copyright in the stork images he designed, effective as of the time of their creation.
[6] On November 30, 2009, Mr. Fronte also applied for registration of these two images as trade-marks under the Trade-marks Act. As a result, these images were registered as trade-marks in Mr. Fronte’s name [the Fronte Marks] under No. TMA 794,667 and No. TMA 794,672, with a registration date of April 4, 2011 [the Registrations]. The Registrations refer to goods and services in connection with which the marks are used as, respectively, “lawn ornaments, namely lawn storks” and “7 day rental service of the Stork image on a wooden plank, planted on the front lawn of the customer’s home, for the purpose of announcing the birth of their child or children.” The Fronte Marks appear as follows in the Registrations, along with descriptions of the colours employed in the marks:
[7] Shown in colour, the Stork Market Images appear as follows:
[8] The Defendants are an Ontario corporation named 1736735 Ontario Inc., which operates under the name Hello Pink Lawn Cards Inc. [Hello Pink], and its sole director, officer and shareholder, Mr. Cipriano Primicias III. Mr. Primicias was self-represented at the trial and served as Hello Pink’s representative pursuant to leave granted by Prothonotary Milczynski in an Order dated June 25, 2014. Hello Pink commenced business in July 2007. Like Stork Market, Hello Pink is in the business of rental and installation of lawn signs for special occasions. However, while it rents lawn storks intended to celebrate births, it also rents signs related to a variety of other occasions, such as birthdays, anniversaries and graduations.
[9] At the commencement of Hello Pink’s business operations, its sign inventory included two stork images, one announcing the birth of a boy and the other announcing the birth of a girl. These signs were purchased on eBay from suppliers in the Pennsylvania area, and as part of the purchase Mr. Primicias also acquired an exclusive Canadian licence to use the images on the signs. Mr. Primicias described them as “traditional” stork images, depicting a stork carrying a baby in its beak. The traditional images employed by Hello Pink on its lawn storks from the beginning of its business, currently referenced in Hello Pink’s inventory as “GS2-Bird 2” and “BS2-Bird 2” [the Original Hello Pink Images], appear as follows:
GS2-Bird 2
BS2-Bird 2
[10] In or about June 2010, Hello Pink began renting lawn signs with new stork images, again employing both “girl” and “boy” versions, along with signs with the Original Hello Pink Images and the rest of its inventory related to other special occasions. Details surrounding the decision to develop the new stork images are addressed later in these Reasons. It is the use of these new stork images, referenced in Hello Pink’s inventory as “GS2-Bird 1” and “BS2-Bird 1” [the New Hello Pink Images], which gives rise to the Plaintiffs’ claims. The New Hello Pink Images appear as follows:
GS2-Bird 1
BS2-Bird 1
[11] After becoming aware of Hello Pink’s lawn signs using the New Hello Pink Images, which Mr. Fronte considered to be copies of the Stork Market Images, he telephoned Mr. Primicias. Mr. Fronte asked him to stop using the New Hello Pink Images, and Mr. Primicias refused. The Plaintiffs’ counsel subsequently sent a “cease-and-desist” letter to Hello Pink on August 15, 2011, along with a follow-up email to Mr. Primicias on August 29, 2011. The Defendants did not respond to this correspondence, and the present litigation ensued.
III. Witnesses
[12] Three witnesses testified in support of the Plaintiffs’ claims. Mr. Fronte testified as to the development of the Stork Market Images by Mr. Challenger, the registration of the Fronte Marks, the commencement and development of Stork Market’s business, how Mr. Fronte became aware of Hello Pink’s use of the New Hello Pink Images, and the subsequent assertion of the claims that are the subject of this action. Mr. Challenger testified as to his role in the development of the Stork Market Images, including the creative process by which the images were developed. The Plaintiffs’ third witness was a former customer, Ms. Wendy Pitblado, who gave evidence which the Plaintiffs argue demonstrates actual confusion between the New Hello Pink Images and the Fronte Marks. These witnesses were all cross-examined by Mr. Primicias.
[13] Mr. Primicias was the sole witness for the Defendants. He testified as to the commencement and development of Hello Pink’s business, the procurement of the Original Hello Pink Images, how he became aware of Stork Market’s lawn signs employing the Stork Market Images, the development of the New Hello Pink Images, and the subsequent communications between the parties prior to commencement of this action. Mr. Primicias was cross-examined by the Plaintiffs’ counsel.
[14] The Plaintiffs also tendered into evidence certain excerpts from Mr. Primicias’ discovery examination, and the parties tendered a Joint Book of Documents. The parties agreed to the authenticity of the documents and that all documents in the Joint Book would form part of the evidentiary record. Although there was no agreement between the parties that the documents were necessarily admitted for the truth of their contents, the nature of the documents and their use at trial is such that this is not significant.
[15] Beyond this general overview of the evidence, details of specific pieces of evidence are discussed below where relevant to the Court’s analysis of the issues in dispute.
IV. Issues
[16] In broad strokes, the issues in this action are the validity of the Registrations of the Fronte Marks and whether the Defendants, or either of them, are liable to the Plaintiffs, or either of them, for infringement of the Fronte Marks, passing off, or infringement of Mr. Fronte’s copyright in the images designed by Mr. Challenger. However, based on the parties’ pleadings and arguments, I would subdivide the issues as follows:
Are the Registrations of the Fronte Marks valid?
If so, have the New Hello Pink Images been used as trade-marks?
If so, have the Defendants infringed the Plaintiffs’ rights under ss. 19 and 20 of the Trade-marks Act?
Did the Defendants violate s. 7(b) of the Trade-marks Act?
Are the Stork Market Images subject to copyright owned by Mr. Fronte?
If so, did the Defendants infringe this copyright?
If the Plaintiffs succeed in establishing any of the causes of action asserted, to which remedies are the Plaintiffs entitled?
V. Analysis
A. Are the Registrations of the Fronte Marks valid?
[17] The Defendants raise two arguments in support of their position that the Registrations are invalid and should be expunged. They take the position that the Registrations are not distinctive of a single source and that the subject matter of each Registration is primarily functional and/or merely ornamental.
(1) Not Distinctive of a Single Source
[18] The Defendants note that the Registrations are in the name of Mr. Fronte but that the Fronte Marks were used only by Stork Market. They argue there is no indication that Mr. Fronte licensed Stork Market to use the Fronte Marks or that Mr. Fronte exercised any control over the quality of the wares or services of Stork Market in connection with which the Fronte Marks were used.
[19] The Defendants are correct that there was no evidence adduced at trial as to a written or express license agreement between the Plaintiffs related to the use of the Fronte Marks. However, the Plaintiffs argue that the applicable jurisprudence supports a conclusion that the Fronte Marks were used by Stork Market under an implied oral license from Mr. Fronte. This argument relates to the application of s. 50(1) of the Trade-marks Act, which deems use of a mark by a licensee to be use by the registered owner, provided that the owner has direct or indirect control over the character or quality of the wares or services in question.
[20] I accept the Plaintiffs’ proposition that the required license need not be in writing and that, where the owner of a trade-mark also controls a closely held corporation that uses the mark, an inference may be drawn that the corporation uses the mark under oral license from the owner, with the owner asserting the requisite control over the character or quality of the wares or services (see TGI Friday’s of Minnesota Inc v Canada (Registrar of Trade Marks) (1999), 241 NR 362 (FCA); Fairweather Ltd v Registrar of Trade-marks, 2006 FC 1248; Smart & Biggar v Powers (2001), 16 CPR (4th) 276 (TM Bd)).
[21] The Statement of Claim alleges that Mr. Fronte is the sole director, officer and shareholder of Stork Market. The Plaintiffs did not adduce evidence explicitly addressing Stork Market’s corporate structure. However, Mr. Fronte testified that he is the owner–operator of Stork Market and, other than one week during which his brother performed the delivery of lawn signs, its sole employee. It is clear from Mr. Fronte’s testimony that he started and runs the company. In accordance with the applicable jurisprudence, I find that this is an appropriate case in which to infer an oral license from Mr. Fronte to Stork Market and that Mr. Fronte exercises the requisite control over the wares and services. Therefore, the Plaintiffs have the benefit of s. 50(1) of the Trade-marks Act, and the Defendants’ argument that the Fronte Marks are not distinctive of a single source does not represent a basis to find that the marks are invalid.
(2) Primarily Functional/Merely Ornamental
[22] Referencing the descriptions of the relevant wares and services in the Registrations, the Defendants’ position is that, if the stork image was removed, the wares would no longer function as “lawn storks” and the services would no longer function as “rental services of the Stork image on a wooden plank”. They argue that the subject matter of the Registrations is primarily functional and/or merely ornamental and that registration as a trade-mark is therefore precluded by the doctrine of functionality.
[23] This doctrine was explained by the Supreme Court of Canada in Kirkbi AG v Ritvik Holdings Inc, 2005 SCC 65 [Kirkbi], as follows at paragraphs 42-44:
42 The doctrine of functionality appears to be a logical principle of trade-marks law. It reflects the purpose of a trade-mark, which is the protection of the distinctiveness of the product, not of a monopoly on the product. The Trade-marks Act explicitly adopts that doctrine, when it provides, at s. 13(2), that the registration of a mark will not interfere with the use of the utilitarian features it may incorporate:
13. …
(2) No registration of a distinguishing guise interferes with the use of any utilitarian feature embodied in the distinguishing guise.
43 In these few words, the Act clearly recognizes that it does not protect the utilitarian features of a distinguishing guise. In this manner, it acknowledges the existence and relevance of a doctrine of long standing in the law of trade-marks. This doctrine recognizes that trade-marks law is not intended to prevent the competitive use of utilitarian features of products, but that it fulfills a source-distinguishing function. This doctrine of functionality goes to the essence of what is a trade-mark.
44 In Canada, as in several other countries or regions of the world, this doctrine is a well-settled part of the law of trade-marks. In the law of intellectual property, it prevents abuses of monopoly positions in respect of products and processes. Once, for example, patents have expired, it discourages attempts to bring them back in another guise.
[24] As noted in the above quotation, the functionality doctrine is adopted in s. 13(2) of the Trade-marks Act, by reference to a “distinguishing guise”, which is defined in s. 2 as follows:
distinguishing guise means
signe distinctif Selon le cas :
(a) a shaping of goods or their containers, or
a) façonnement de produits ou de leurs contenants;
(b) a mode of wrapping or packaging goods
b) mode d’envelopper ou empaqueter des produits,
the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish goods or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others;
dont la présentation est employée par une personne afin de distinguer, ou de façon à distinguer, les produits fabriqués, vendus, donnés à bail ou loués ou les services loués ou exécutés, par elle, des produits fabriqués, vendus, donnés à bail ou loués ou des services loués ou exécutés, par d’autres.
[25] Kirkbi involved an action for passing off brought by the manufacturer of LEGO toys after its patents expired. Kirkbi argued that the geometric pattern of raised studs at the top of LEGO bricks represented an unregistered trade-mark and sought to prevent its competitor, Ritvik, from manufacturing and selling bricks interchangeable with LEGO. Kirkbi was unsuccessful before the Federal Court, the Federal Court of Appeal, and the Supreme Court of Canada. In rejecting Kirkbi’s argument that the configuration of its bricks was subject to trade-mark protection, the Supreme Court quoted with approval, at paragraph 60, the following portion of the decision of the Federal Court of Appeal:
Indeed, in my view, subsection 13(2) reinforces the concept that the doctrine of functionality invalidates a mark which is primarily functional. It makes clear that the public is not constrained from using any utilitarian features of a distinguishing guise. It follows that if a distinguishing guise is wholly or primarily functional, then the public is not constrained from using the distinguishing guise in its entirety. Thus a distinguishing guise which is primarily functional provides no rights to exclusive use and hence no trade-mark protection. In other words the fact that the distinguishing guise is primarily functional means that it cannot be a trade-mark. The appellants have simply misconstrued subsection 13(2). [para. 59]
[26] I also note the analysis by this Court in the subsequent decision in Crocs Canada Inc v Holey Soles Holdings Ltd, 2008 FC 188 [Crocs], at paragraphs 18 to 19, to the effect that the text of s. 13(2) of the Trade-marks Act suggests a policy choice by the legislature to permit some functional or utilitarian features in a mark so long as they do not create a monopoly in relation to the function. Crocs involved a passing off claim by Crocs Canada Inc. against a competitor which manufactured foam shoes that, like the plaintiff’s product, had holes in the upper surface and vents on the side. The defendant moved for summary judgment, seeking dismissal of the claim on the basis that it was barred by the doctrine of functionality. Justice Hugessen noted that whether the design and pattern of the holes and vents is primarily functional is one of fact, not to be decided on a summary judgment motion. In dismissing the motion, Justice Hugessen also noted that there was evidence that the holes and vents performed a function, but that there was no evidence linking that function to the pattern and arrangement of those holes and vents, and that it would be open to the Court at trial to find that the pattern and arrangement constituted a distinguishing guise. Justice Hugessen further observed that, while this would require further examination at trial, it was noteworthy that other manufacturers had been able to use some of the purely functional features of the plaintiff’s shoes without mimicking their get up.
[27] I have difficulty concluding that the Fronte Marks offend the doctrine of functionality as described in Kirkbi or Crocs. One cannot characterize the marks as a distinguishing guise, as they represent neither a shaping of goods or their containers nor a mode of wrapping or packaging goods, and the Plaintiffs’ claims certainly cannot be characterized as an effort to assert a protection that would more properly be the subject of a patent. I cannot conclude that the marks are primarily functional within the meaning of the case law.
[28] Moreover, even if one were to consider the doctrine of functionality more broadly, as a principle applicable even where the law of patents has no application, intended to ensure that trade-marks law is not employed to prevent the competitive use of utilitarian features of products, I cannot conclude the protections afforded by the Registrations to the Fronte Marks create the sort of anti-competitive effect about which the doctrine is concerned. I note that, in support of their argument, the Defendants referred the Court to articles analysing decisions of courts in the United States, applying what is described as the doctrine of “aesthetic functionality”. This appears to represent an application of the doctrine of functionality, not in relation to the technical function of a product’s features, but rather in relation to the product’s aesthetic qualities. For instance, one of the articles submitted by the Defendants (see Rachel Rudensky, “Aesthetic Functionality After Louboutin”, (2013) 68:7 INTABulletin) referred to the decision in Christian Louboutin S.A. v Yves Saint Laurent America, Inc, 7 F Supp (2d) 445 (SDNY 2011), in which the trial court held that Louboutin’s marketing of women’s shoes with red lacquered soles, despite being instantly recognizable as Louboutin’s product, did not attract trade-mark protection. The Court concluded that the colour was aesthetically functional, serving the non-trade-mark functions of decoration and beauty.
[29] This decision was reversed by the Second Circuit (Christian Louboutin S.A. v Yves Saint Laurent America, Inc, 696 F (3d) 206 (2d Cir 2012)) [Louboutin], holding that there is no legal prohibition against colour serving as trade-mark and that a determination of aesthetic functionality involves consideration whether protecting the aesthetic element in question would significantly undermine a competitor’s ability to compete.
[30] Another article submitted by the Defendants analysed decisions of the Ninth Circuit Court of Appeals in the United States, applying the doctrine of aesthetic functionality, although the article criticized much of that jurisprudence and described the Ninth Circuit’s application of this doctrine as out of step with other US courts (see Nancy Clare Morgan, “Aesthetic Appeal”, Los Angeles Lawyer (February 2012) 34.
[31] It is therefore difficult to assess from the authorities identified by the Defendants the extent to which the doctrine of aesthetic functionality forms part of US law or exactly how that doctrine is formulated and applied. Nor have the parties identified any instances of this application of the doctrine of functionality in Canadian law. Furthermore, even applying this doctrine as apparently formulated by the Second Circuit Court of Appeals in Louboutin would not particularly assist the Defendants in the case at hand. As will be canvassed in more detail below in my analysis of the likelihood of confusion between the parties’ respective stork images, Mr. Fronte testified as to the commercial success of the signs employing the Stork Market Images. His designer, Mr. Challenger, also testified as to the emotional reaction his design was intended to achieve. While this evidence speaks to the commercial merits of the Plaintiffs’ product employing the Stork Market Images, I do not consider that evidence, or any other evidence adduced at trial, to support a conclusion that the particular design elements of the Stork Market Images are essential or sufficiently important to success in the lawn stork business, such that affording trade-mark protection to those images would significantly undermine a competitor’s ability to compete.
[32] I note Mr. Primicias’ testimony that his objective in designing the New Hello Pink Images was to accommodate the inclusion of a customizable baby, i.e. a baby with a range of different attire customized to be meaningful to the parents. He explained that this commercial objective prompted the development of the New Hello Pink Images, with a clothed baby positioned on the stork’s shoulder rather than in the traditional position wrapped in a bag or blanket held in the stork’s beak. When asked in cross-examination about elements of the New Hello Pink Images which are similar to the Stork Market Images, Mr. Primicias testified that the stork’s splayed stance was a function of the fact the stork is supporting the baby and that positioning the stork on a patch of grass was necessary to hide the sign’s hardware. Mr. Primicias also considered it critical that the new design include a banner or plaque large enough to hold the announcement “It’s a Girl” or “It’s a Boy” and another area for information about the baby. He testified that the use of customizable clothing for the baby meant that the baby’s information could not be positioned on the baby itself and therefore had to be placed on a sign hung around the stork’s neck. This left the location above the stork’s head as the only available position for the “It’s a Girl/Boy” announcement. Therefore, the wings were raised above the stork’s head to hold the announcement.
[33] In essence, the Defendants argue that the design elements of the New Hello Pink Images which the Plaintiffs argue to be confusingly similar to the Stork Market Images are a function of the commercial objective of incorporating a customizable baby. They also submit that the raising of the hands or wings is a common celebratory gesture which is aesthetically functional and that competitors of the Stork Market must be free to use. With respect, I cannot accept these arguments as a basis to conclude that affording trade-mark protection to the Stork Market Images would significantly undermine competitors’ ability to compete. My analysis of the degree of resemblance between the parties’ images, and the other aspects of the confusion analysis, follow later in these Reasons. However, for purposes of addressing the present issue, I note that the documentary evidence introduced by the parties includes a large number of quite varied “traditional” stork images, and the Defendants have not convinced me that the commercial objective of a customizable baby, or any other ingredient of a commercially successful lawn stork, requires the use of the Plaintiffs’ design elements in a manner that is confusingly similar to the Stork Market Images.
[34] Finally, I am conscious that the images for which the Plaintiffs claim trade-mark protection are themselves an integral part of Stork Market’s products and services. However, the Defendants have not cited any authority to support a conclusion that this disentitles the Plaintiffs to such protection. I take from the Crocs decision that a product can have features which serve a utilitarian function and also serve the trade-make function of identifying the source of the product, without necessarily invalidating the mark. In the present case, while the Stork Market Images form part of Stork Market’s products and services, they also serve a source-distinguishing function. Section 4(2) of the Trade-marks Act (reproduced in the next portion of these Reasons) provides that a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services. Mr. Fronte’s evidence establishes that Stork Market has used the Stork Market Images as branding on its website and a variety of other promotional materials, including business cards, pamphlets distributed at trade shows, flyers distributed throughout the GTA, posters employed in connection with hand sanitizers in hospitals and, at one stage in the company’s operations, a vehicle with the Stork Market Images applied as decals to the sides.
[35] In conclusion on the first issue, I find no basis to declare the Registrations of the Fronte Marks invalid. As between the parties to this proceeding, the Registrations are valid.
B. Have the New Hello Pink Images been used as trade-marks?
[36] The Defendants take the position that the New Hello Pink Images have not been used as trade–marks and that there can therefore be no violation of ss. 19, 20 or 22 of the Trade-marks Act.
[37] Sections 4(1) and (2) of the Trade-marks Act deem a trade-mark to be used in connection with goods or services in the following circumstances:
When deemed to be used
Quand une marque de commerce est réputée employée
4 (1) A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed or it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred.
4 (1) Une marque de commerce est réputée employée en liaison avec des produits si, lors du transfert de la propriété ou de la possession de ces produits, dans la pratique normale du commerce, elle est apposée sur les produits mêmes ou sur les emballages dans lesquels ces produits sont distribués, ou si elle est, de toute autre manière, liée aux produits à tel point qu’avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
Idem
Idem
(2) A trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.
(2) Une marque de commerce est réputée employée en liaison avec des services si elle est employée ou montrée dans l’exécution ou l’annonce de ces services.
[38] The Defendants are correct that a trade-mark must be used as a trade-mark in order to give rise to remedies under the Trade-marks Act. They cite Compagnie Générale des Etablissements Michelin – Michelin & Cie v National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW – Canada) (1996), [1997] 2 FCR 306 (FCTD) [Michelin], in which Michelin argued that CAW violated its trade-mark in Bibendum (Michelin’s marshmallow-like mascot) by including a drawing of him in their organizing literature. Justice Teitelbaum found that this use did not infringe Michelin’s trade-mark because CAW was not using Bibendum as a trade-mark to distinguish goods or services from those of others.
[39] I also appreciate that, as is the case with Stork Market, the stork images used by Hello Pink are an integral part of its products and services. However, the evidence establishes that, as is the case with Stork Market, Hello Pink’s images also serve a trade-mark function of distinguishing its goods and services from those of others. In connection with Hello Pink’s services, Mr. Primicias’ evidence is that its website is its main advertising vehicle, on which the New Hello Pink Images appear. It has also advertised on Kijiji and at a local hospital, employing images of its storks with information as to how to contact Hello Pink. Indeed, the products themselves, displaying the New Hello Pink Images, include contact information for the company. Mr. Primicias confirmed that the lawn signs themselves act as a form of advertisement.
[40] Whether Hello Pink regarded its use of the New Hello Pink Images as fulfilling a trade-mark function is not determinative of the question whether the images were used as trade-marks. As held by the Federal Court of Appeal in Tommy Hilfiger Licensing, Inc v International Clothiers Inc, 2004 FCA 252, at paragraph 40, irrespective of a party’s intentions, the question is whether a mark was used to denote the origin of a party’s wares or used in such a way as to serve the purpose of indicating origin. Based on the evidence referenced above, my conclusion is that the New Hello Pink Images, while part of the products and services themselves, do also serve the purpose of indicating the origin of those products and services and have therefore been used as trade-marks.
C. Have the Defendants infringed the Plaintiffs’ rights under ss. 19 and 20 of the Trade-marks Act?
[41] Section 19 of the Trade-marks Act grants the owner of a registered trade-mark the exclusive right to use the mark throughout Canada in respect of the goods and services for which the mark is registered. Section 20 provides that the right of the owner of a registered trade-mark to its exclusive use is deemed to be infringed by a person who is not entitled to the use of the trade-mark who sells, distributes or advertises any goods or services in association with a confusing trade-mark.
[42] As a preliminary matter, I note that, while Mr. Fronte is the registered owner of the Fronte Marks, I have found that the marks were used by Stork Market under an implied oral license from Mr. Fronte. As a result, both of the Plaintiffs (Mr. Fronte as owner and Stork Market as licensee) have rights under the Trade-marks Act to claim for infringement of the Fronte Marks (see Tonka Corp v Toronto Sun Publishing Corp (1990), 41 FTR 56) although, as noted later in these Reasons, there is a distinction between the positions of the two Plaintiffs when it comes to consideration of damages.
[43] The factors to be considered, when determining whether trade-marks are confusing, are prescribed as follows by s. 6(5) of the Trade-marks Act:
What to be considered
Éléments d’appréciation
(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
(5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l’espèce, y compris :
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus;
(b) the length of time the trade-marks or trade-names have been in use;
b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage;
(c) the nature of the goods, services or business;
c) le genre de produits, services ou entreprises;
(d) the nature of the trade; and
d) la nature du commerce;
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu’ils suggèrent.
(1) Degree of Resemblance
[44] As explained by the Supreme Court of Canada in Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 [Masterpiece], at paragraph 49, the degree of resemblance is the statutory factor that is often likely to have the greatest effect on the confusion analysis and has been suggested to be the factor with which most confusion analyses should start. Consistent with this approach, Mr. Primicias’ testimony and much of the Defendants’ cross-examination of the Plaintiffs’ witnesses and the Defendants’ argument focused upon differences between the Stork Market Images and the New Hello Pink Images. However, as correctly argued by the Plaintiffs, it is important to bear in mind that the test for confusion has been articulated as a matter of first impression, not the result of a careful examination of competing marks or a side-by-side comparison. As expressed by Justice Rothstein at paragraph 40 of Masterpiece:
[40] At the outset of this confusion analysis, it is useful to bear in mind the test for confusion under the Trade-marks Act. In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824, Binnie J. restated the traditional approach, at para. 20, in the following words:
The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the [mark], at a time when he or she has no more than an imperfect recollection of the [prior] trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks.
Binnie J. referred with approval to the words of Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192, at p. 202, to contrast with what is not to be done — a careful examination of competing marks or a side by side comparison.
[45] Under cross-examination, Mr. Fronte and Mr. Challenger acknowledged various differences between the Stork Market Images and the New Hello Pink Images. The stork in the Stork Market Images is not clothed, other than wearing a delivery hat and a bow tie. The stork in the New Hello Pink Images is wearing a tuxedo jacket, vest, top hat and bow tie. The stork in the Stork Market Images has feather-like fingers, while the Hello Pink Stork has fingers with human traits. The announcement above the stork’s head in the Stork Market Images is on a banner, surrounded by stars, while the announcement above the stork in the New Hello Pink Images is on a flag, without any stars. There are also differences in the babies shown in the images, in that the baby in the Stork Market Images is covered in a blanket and is held up by the stork’s wings, while the baby in the New Hello Pink Images is shown from its head to its feet, cradled in one of the stork’s wings. Also, unlike the Stork Market Images, the New Hello Pink Images include different possible babies, distinguishable by their clothing or accessories. The Defendants argue these differences to demonstrate a low degree of resemblance between the parties’ respective images.
[46] In contrast, the evidence adduced by the Plaintiffs focused upon the similarities between the Stork Market Images and the New Hello Pink Images. The graphic designer hired by Mr. Fronte, Russell Challenger, testified that Mr. Fronte had directed him to design an image that would have a particular emotional impact, invoking a sense of celebration. Mr. Challenger explained the design choices that he made in an effort to achieve that emotional impact, being the upstretched arms, raising the baby in the air, the large banner surrounded by stars, and the skinny legs, overall creating a top-heavy shape akin to a trophy. When asked about his reaction when he was first shown the New Hello Pink Images, he testified he regarded them as directly inspired by his work. He referred to the arms reaching up with feathers coming out, the elevated banner with the announcement, the cartoonish nature of the character, the baby being displayed in a different manner than the traditional stork images, the legs in the center of the image, and the grass at the bottom. The Plaintiffs argue these similarities to demonstrate a high degree of resemblance between the parties’ respective images.
[47] In analyzing the degree of resemblance between the relevant images, I do not consider any of the above evidence, adduced by either the Plaintiffs or the Defendants, to be particularly probative. As explained in Masterpiece, the test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry. I do not regard the application of this test to be particularly assisted by the evidence of the parties’ witnesses as to what they regarded the similarities and differences to be. This observation applies to the evidence of the parties themselves, as well as to that of Mr. Challenger, notwithstanding his expertise as a designer. While I recognize that there was no effort to formally qualify Mr. Challenger as an expert, I am conscious of the explanation at paragraphs 75 to 77 of Masterpiece that expert opinion evidence is admissible to assist with the confusion analysis only if it provides information which is likely to be outside the experience and knowledge of the Court. I raise this because it underlines the point that it is the Court which must assess the degree of resemblance between the relevant marks, employing the principles derived from the applicable jurisprudence. However, in doing so, I have considered the parties’ arguments in support of thei