1429539 Ontario Ltd. v. Café Mirage Inc. et al., 2011 FC 1290

• Judge: Mandamin, J.
• Court: Federal Court (Canada)
• Case Date: January 31, 2011
• Jurisdiction: Canada (Federal)
• Citations: 2011 FC 1290;(2011), 399 F.T.R. 186 (FC)

1429539 Ont. v. Café Mirage Inc. (2011), 399 F.T.R. 186 (FC)

MLB headnote and full text

Temp. Cite: [2011] F.T.R. TBEd. NO.039

1429539 Ontario Limited (plaintiff) v. Café Mirage Inc., BDD Solutions Inc., Michael Bachour, and Amy Salam (defendants)

(T-82-05; 2011 FC 1290)

Indexed As: 1429539 Ontario Ltd. v. Café Mirage Inc. et al.

Federal Court

Mandamin, J.

November 9, 2011.

Summary:

A business corporation, 1429539 Ontario Ltd., franchised a restaurant concept named The Symposium Café. The corporation held the registered trademark "The Symposium Café", and other trademarks related to the concept. A creditor (Kotsos) seized four of the Cafés for non-payment on a promissory note. The ensuing litigation was settled. Under the Minutes of Settlement, the assets of two of the Cafés were transferred to Kotsos who was entitled to sell them within or outside the Symposium Café franchise system. Kotsos sold the assets to BDD Solutions Inc. (BDD). BDD and its principals, Bachour and Salam, declined to join the Symposium Café franchise system, and operated the two Cafés under the name of Café Mirage, while retaining the appearance, trade dress, trademarks and menus of the Symposium Café. The corporation sued Café Mirage, BDD, Bachour and Salam for infringement of its trademarks, infringement of copyright of the Symposium Café menus, injunctive relief, damages, and costs.

The Federal Court concluded that the corporation was entitled to judgment for infringement of its trademarks and copyright, injunctive relief with respect to infringement, and damages for infringement of its trademarks and copyright. Punitive damages were not warranted. The court dismissed the claim against Salam.

Company Law - Topic 312

Nature of corporations - Lifting the corporate veil - Principals - "Directing mind and will" of company - The plaintiff franchised a restaurant concept and held the registered trademark "The Symposium Café" - BDD Solutions Inc. and its principals, Bachour and Salam (the defendants), declined to join the plaintiff's franchise system - The defendants operated two Cafés under the name of Café Mirage, while retaining the appearance, trade dress, trademarks and menus of the Symposium Café - The plaintiff submitted that Bachour and Salam were jointly liable with the corporate defendants for their involvement in activities infringing the plaintiff's trademarks and copyright - The defendants submitted that there was no basis for piercing the corporate veil to find the individual defendants liable - The Federal Court found the plaintiff had not proven that Salam was closely involved with the corporate defendants - As such, she was not required to testify, and no basis existed for making an adverse inference about her involvement - The evidence of Bachour's involvement was much different - Most importantly, Bachour himself did not separate his involvement from that of his companies, stating "the companies are me" - The court concluded that Bachour was directly involved in the infringing use of the trademarks and copyright, and found him personally liable along with the corporate defendants - See paragraphs 133 to 144.

Copyright - Topic 4401

Infringement of copyright - General principles - General - The Federal Court discussed the general principles of copyright infringement - See paragraphs 96 to 99.

Copyright - Topic 4491

Infringement of copyright - Acts constituting an infringement - Copying or using signs, designs, logos, etc. - The plaintiff contended it had copyright on its Symposium Café menus - It submitted the defendants had made use of the plaintiff's copyright protected menus at the defendants' two Cafés without consent, thereby infringing its copyright - The plaintiff further submitted the defendants copied the new Symposium Café menu and thus infringed the plaintiff's copyrights with respect to that menu - The Federal Court held that the plaintiff had copyright in the menus - The creation of the Symposium Café menu involved an exercise of skill and judgment that was not so trivial that it could be characterized as a purely mechanical exercise - Given the degree of copying of the new Symposium Café menu, the court was satisfied that infringement of copyright was proven - The defendants committed primary infringement - Statutory damages were assessed with respect to the menus at $7,500 - See paragraphs 100 to 124, 156 and 157.

Copyright - Topic 4586

Infringement of copyright - Remedies - Damages - [See Copyright - Topic 4491 ].

Trademarks, Names and Designs - Topic 1806

Trademarks - Infringement - Test - Confusion with other marks (incl. reverse confusion) - Both parties operated restaurants in the Toronto area - They provided the same food and service targeting the same clientele (customers who were going to a restaurant for a sit down meal) - The plaintiff's trademarks involved the prominent featuring of a well-known public work of art ("School of Athens") coupled with antiqued marble wall patterns, a circular display counter and tiles, with trademark names and expressions associated with restaurant services (the trade dress) - The defendants used the School of Athens mural with the plaintiff's trademarked expression "Redefining the Café Experience" - The plaintiff's first use of the trademarks went back to 1999; the defendants' usage of the trade dress commenced in 2004 - The Federal Court set out the required approach to a confusion analysis pursuant to s. 6(5) of the Trade-marks Act, and applied that criteria to the present case - In the end result, the court concluded that the defendants infringed the plaintiff's trademarks and that the infringement was ongoing at the time of the hearing of this matter - See paragraphs 73 to 95.

Trademarks, Names and Designs - Topic 1816

Infringement - Remedies - Damages - [See Trademarks, Names and Designs - Topic 3010 ].

Trademarks, Names and Designs - Topic 1819

Infringement - Remedies - Injunctions - The plaintiff and the defendants operated restaurants in the Toronto area, namely, Symposium Cafés (the plaintiff) and Café Mirage (the defendants) - They provided the same food and service targeting the same clientele - The plaintiff's trademarks involved the prominent featuring of a mural ("School of Athens") coupled with antiqued marble wall patterns, a circular display counter and tiles, with trademark names and expressions associated with restaurant services (the trade dress design) - The defendants used the School of Athens mural with the plaintiff's trademarked expression "Redefining the Café Experience" - The Federal Court granted injunctive relief to protect the plaintiff's intellectual property - The School of Athens was the most critical component of the trade dress design - Removal of the mural from the Café Mirage trade dress would dispel any confusion with the Symposium Cafés - Accordingly, the defendants were enjoined from displaying the School of Athens in the Café Mirage restaurants, menus, and in any signage, posters, internet websites or otherwise - The defendants were also prohibited from any use, publication or printing of the plaintiff's trademarks - See paragraphs 145 to 151.

Trademarks, Names and Designs - Topic 3006

Trademarks - Infringement actions - Approach used by court to determine if trademark infringed - [See Trademarks, Names and Designs - Topic 1806 ].

Trademarks, Names and Designs - Topic 3010

Trademarks - Infringement actions - Acquiescence or delay - The plaintiff franchised a restaurant concept named The Symposium Café - It held the registered trademark "The Symposium Café", and other trademarks related to the concept - A creditor (Kotsos) seized four of the Cafés - The ensuing litigation was settled - Under the settlement agreement, the assets of two of the Cafés (the Sheppard and Kennedy Cafés) were transferred to Kotsos who was entitled to sell them within or outside the Symposium Café franchise system - Kotsos sold the assets to BDD Solutions Inc. - BDD declined to join the Symposium Café franchise system, and operated the two Cafés under the name of Café Mirage, while retaining the trademarks of the Symposium Café - The plaintiff sued for infringement and sought damages calculated in the equivalent of a monthly franchise fee for the duration of infringement - The defendants (BDD, its principals and Café Mirage) submitted they were entitled to raise the defence of acquiescence because the plaintiff had consented to the use of the trademarks - They asserted that BDD bought all of the assets that Kotsos possessed, including the trademarks - The Federal Court held that the defendants did not acquire the right to unrestricted use of the plaintiff's trademarks when they purchased the assets of the Sheppard and Kennedy Cafés - The right they acquired was to use the trademarks within the Symposium Café franchise and that right ceased when they declined to join the franchise and the Symposium Café Group served notice to desist - A global award of $30,000 was appropriate, given the plaintiff's evidence that the franchise fee had been variable over time - See paragraphs 59 to 72, 152 to 155.

Trademarks, Names and Designs - Topic 3012

Trademarks - Infringement actions - Evidence - Proof of confusion - [See Trademarks, Names and Designs - Topic 1806 ].

Cases Noticed:

Mattel Inc. v. 3894207 Canada Inc. et al., [2006] 1 S.C.R. 772; 348 N.R. 340; 2006 SCC 22, refd to. [para. 50].

Boston Pizza International Inc. et al. v. Boston Market Corp. et al. (2003), 238 F.T.R. 1; 2003 FC 892, refd to. [para. 60].

Veuve Clicquot Ponsardin v. Boutiques Cliquot ltée et al., [2006] 1 S.C.R. 824; 349 N.R. 111; 2006 SCC 23, refd to. [para. 79].

Philip Morris Products S.A. et al. v. Marlboro Canada Ltd. et al. (2010), 374 F.T.R. 213; 90 C.P.R.(4th) 1; 2010 FC 1099, refd to. [para. 80].

ITV Technologies Inc. v. WIC Television Ltd. (2003), 239 F.T.R. 203; 29 C.P.R.(4th) 182; 2003 FC 1056, refd to. [para. 82].

United States Polo Association v. Polo Ralph Lauren Corp. et al. (2000), 286 N.R. 282; 9 C.P.R.(4th) 51 (F.C.A.), refd to. [para. 89].

Alticor Inc. et al. v. Nutravite Pharmaceuticals Inc. (2005), 339 N.R. 56; 257 D.L.R.(4th) 60; 2005 FCA 269, refd to. [para. 92].

CCH Canadian Ltd. et al. v. Law Society of Upper Canada (2002), 289 N.R. 1; 18 C.P.R.(4th) 161; 2002 FCA 187, revd. in part [2004] 1 S.C.R. 339; 317 N.R. 107; 2004 SCC 13, refd to. [paras. 111, 122].

Mentmore Manufacturing Co. and Rotary Pen Corp. v. National Merchandise Manufacturing Co. (1978), 22 N.R. 161; 89 D.L.R.(3d) 195; 40 C.P.R.(2d) 164 (F.C.A.), refd to. [para. 135].

Monsanto Canada Inc. et al. v. Rivett et al. (2010), 408 N.R. 143; 87 C.P.R.(4th) 383; 2010 FCA 207, refd to. [para. 143].

2 for 1 Subs Ltd. v. Ventresca et al., [2006] O.T.C. 350; 48 C.P.R.(4th) 311; 17 B.L.R.(4th) 179 (Sup. Ct.), refd to. [para. 152].

Telewizja Polsat S.A. et al. v. Radiopol Inc. et al. (2006), 292 F.T.R. 195; 52 C.P.R.(4th) 445; 2006 FC 584, refd to. [para. 162].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, appld. [para. 163].

2703203 Manitoba Inc. v. Parks et al. (2006), 239 N.S.R.(2d) 348; 760 A.P.R. 348; 47 C.P.R.(4th) 276; 2006 NSSC 6, revd. in part (2007), 253 N.S.R.(2d) 85; 807 A.P.R. 85; 57 C.P.R.(4th) 391; 2007 NSCA 36, refd to. [para. 164].

Louis Vuitton Malletier S.A. et al. v. Yang et al., [2007] F.T.R. Uned. 803; 62 C.P.R.(4th) 362; 2007 FC 1179, refd to. [para. 165].

Apotex Inc. and Novopharm Ltd. v. Wellcome Foundation Ltd. (1998), 159 F.T.R. 233; 84 C.P.R.(3d) 303 (T.D.), refd to. [para. 168].

Hamilton v. Open Window Bakery Ltd. et al., [2004] 1 S.C.R. 303; 316 N.R. 265; 184 O.A.C. 209; 2004 SCC 9, refd to. [para. 169].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-42, sect. 3(1) [para. 101]; sect. 27(1), sect. 27(2) [para. 102]; sect. 34.1(1) [para. 103].

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 6(5) [para. 55]; sect. 7(b), sect. 7(c) [para. 54]; sect. 20(1) [para. 56].

Authors and Works Noticed:

Vaver, David, Intellectual Property Law: Copyright, Patents, Trade-marks (2nd Ed. 2011), p. 58 [para. 97].

Counsel:

Owen James Thompson, for the plaintiff;

Eric M. Wolfman, for the defendants.

Solicitors of Record:

Owen Thompson, Toronto, Ontario, for the plaintiff;

Eric Wolfman, Toronto, Ontario, for the defendants.

This action was heard at Toronto, Ontario, on January 31, 2011, by Mandamin, J., of the Federal Court, who delivered the following reasons for judgment and judgment, dated November 9, 2011, at Ottawa, Ontario.