The Federal Court holds that KEYS
PLEEZZ is confusing and infringes upon the plaintiff’s mark KEYS PLEASE, but
reduces the amount of damages for lack of adequate evidence to support the
damages requested by the plaintiff.
This
was an action for trademark infringement, passing off and depreciation of the
plaintiff’s goodwill. The plaintiff registered the trademark KEYS PLEASE in
1997 in association with designated driving services. The plaintiff’s company
advertises extensively in print and on the internet, and operates through
franchises in four provinces. In early
2012, the defendant registered the business name KEYS PLEEZZ and started
offering and advertising the same services as the plaintiff in the Oshawa area.
In
the lead-up to the trial, the defendant repeatedly avoided service of the
plaintiff’s documents and did not respond to two cease and desist letters. Nor
did she file a statement of defense.
The Federal Court held that the defendant’s trademark KEYS PLEEZZ
did in fact cause confusion and infringe upon the plaintiff’s mark. Although the defendant made a slight graphic
amendment to the mark, from an auditory and connotational point of view, the marks
were identical.
In determining whether the mark created confusion, the Court
considered the five factors subscribed under subsection 6(5) of the Trademarks Act. It stated that ‘the defendant’s
avoidance of service and its failure to respond to the cease and desist letter
from the plaintiff, and more importantly, her deliberate advertisement in a
Facebook page shows knowledge and deliberate intent to infringe and pass off.’
However,
on the issue of damages the Court did not agree exactly with the plaintiff. The
plaintiff had requested damages of $70,000, calculated on the basis of a
franchise price of $32,000 and annual royalties of $38,000, assuming that the
franchise would have minimum weekly sales of $5000. The plaintiff claimed that,
as a result of the defendant’s operation, it was deprived of a business
opportunity in the Oshawa area worth $70,000.
But the plaintiff did not provide any evidence to establish that a
franchise in the Oshawa area would in fact generate $5000 per week, and it did
not provide any evidence as to how much its existing franchises generated.
As a
result of the plaintiff’s failure to provide evidence to establish a
franchise’s weekly revenue, and especially in view of the fact that two
competitors already operated in the Oshawa area, the Court reduced the amount
of the damages to $50,000, although it did not explain exactly how it reached
at this amount. The damages awarded also included damages to the plaintiff’s
goodwill.