Toronto.com v.
Ritchie
Sinclair
and Garth Cole
Decision of June 1, 2000
F.C.J. No. 795
(F.C.T.D.),
Docket:
T-1163-99
REASONS FOR
ORDER
HENEGHAN J.
[1]
The Applicant in this motion, Toronto.com (the "Plaintiff"), brought
a motion for an interlocutory injunction to restrain Ritchie Sinclair and
Garth Cole (the "Defendants") from:
(i) using, displaying,
advertising or authorizing others to use, display or advertise the trade-mark
TORONTO2.com;
(ii) using,
displaying, advertising or authorizing others to use, display or advertise any
other words, names, domain names or marks that are similar to the trade-mark
TORONTO2.com;
(iii) using,
displaying or advertising the trade-mark TORONTO2.COM, or authorizing others
to use, display or advertise the trade-mark TORONTO2.COM, in a manner which is
likely to cause confusion with the Plaintiff"s trade-marks TORONTO.COM
and TORONTO.COM ALL YOU NEED TO KNOW ABOUT T.O. & design;
(iv) doing any other
act likely to have the effect of depreciating the goodwill attaching to the
Plaintiff"s Trade-marks;
(v) passing off their
wares, services, or business as and for the wares, services or business of the
Plaintiff or otherwise directing public attention to their wares, services or
business in such a way as to cause or be likely to cause confusion between
their wares, services, or business and the wares, services or business of the
Plaintiff; and
(vi) copying,
publishing, framing or linking content of the Plaintiff"s website at www.toronto.com
;
(vii) otherwise
infringing the Plaintiff"s copyright in its www.toronto.com
website pages.
[2]
By order made on January 27, 2000, I dismissed the motion with reasons to
follow. These are my reasons.
[3]
The Plaintiff is an organization called "Toronto.com". It is a
limited partnership consisting of Metroland Printing, Publishing and
Distributing Limited, Bell ActiMedia Inc. and City Search Canada Inc. Since
March 30, 1998, the Plaintiff has been operating a website called "toronto.com"
which provides a guide to the services and amenities offered in the city of
Toronto.
[4]
The Defendants, Respondents in this motion, are two individuals who carry on a
business under the name and style of "Friendship Enterprises". The
Defendants began operation of their website, under the domain name
"toronto2.com", in late April 1999. However, even as of January 14,
2000, the date of the hearing of the Plaintiff"s motion, the
Defendant"s website was incomplete.
[5]
It is the existence of the Defendants"website which precipitated
the Plaintiff to bring an action against the Defendants and to seek an
interlocutory injunction enjoining the Defendants, Richie Sinclair and Garth
Cole et al., from using, displaying and advertising the trade-mark
TORONTO2.COM.
[6]
The Plaintiff claims that at its website it has used, displayed and advertised
the trade-marks TORONTO.COM and TORONTO.COM ALL YOU NEED TO KNOW ABOUT T.O.
& design in association with an internet guide and directory for the city
of Toronto. The Plaintiff alleges that it has and continues to sell
advertising space on the website to third parties.
[7]
The Plaintiff claims that as a result of its extensive use in Canada of the
TORONTO.COM trade-mark, it has acquired substantial goodwill in the trade-mark
and is entitled by virtue of the common law to exclusive use of the trade-mark.
[8]
With respect to the Plaintiff"s copyright in the webpages, the Plaintiff
submits that it is the owner of the copyright in the webpages at www.toronto.com.
The Plaintiff also submits that it has the exclusive right to reproduce those
webpages in any material form and to authorize any such reproduction.
[9]
The Plaintiff claims that the Defendants have: (i) "framed"several
webpages or portions of webpages published at www.toronto.comby the
Plaintiff, and displayed them on their website at www.toronto2.com; and (ii)
linked their website to some of the same websites to which the Plaintiff has
linked its website.
[10]
At the time this motion was filed, searches performed by the Plaintiff
confirmed that the Defendants"website no longer appeared to frame content
of the Plaintiff"s website. Nevertheless, the Plaintiff maintains that
there is no evidence that the framed portions of the Plaintiff"s webpages
will not reappear on the Defendant"s website.
[11]
The Plaintiff maintains that the activities of the Defendants have caused the
Plaintiff to suffer irreparable harm through, inter alia, a loss of
distinctiveness of its TORONTO.COM trade-mark and a loss of goodwill attaching
to the trade-mark. The Plaintiff contends that this harm cannot be compensated
for in damages. Moreover, the Plaintiff submits that if an interlocutory
injunction is not issued, the Plaintiff will continue to suffer such harm.
[12]
Rule 373 of the Federal Court Rules, 1998 provides as follows:
373. (1) On motion, a
judge may grant an interlocutory injunction.
(2) Unless a judge
orders otherwise, a party bringing amotion for an interlocutory injunction
shall undertake to abide by any order concerning damages caused by the
granting or extension of the injunction.
...
(4) A judge may order
that any evidence submitted at the hearing of a motion for an interlocutory
injunction shall be considered as evidence submitted at the hearing of the
proceeding.
[13]
A tri-partite test is applied to determine whether an interlocutory injunction
should be granted. This test considers whether there a serious issue to be
tried, whether an applicant will suffer irreparable harm if the relief is not
granted and finally, the balance of convenience is examined in assessing
whether to grant an interlocutory injunction. (See Manitoba (A.G.) v.
Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R 110 and RJR-Macdonald
Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311).
[14]
In the present motion, it is unnecessary to address the question of whether
the Applicant has demonstrated a serious issue to be tried and the question of
the balance of convenience, as the Applicant has failed to show that it will
suffer irreparable harm.
Irreparable Harm
[15]
In Syntex Inc. v. Novopharm Ltd.1, Nature Co.
v. Sci-Tech Educational Inc.2, Centre Ice Ltd. v. National
Hockey League3, the Federal Court of Appeal clearly established
that in order to be successful in a motion for an interlocutory injunction, an
applicant must show clear evidence that he or she will suffer irreparable harm.
This evidence cannot be speculative.
[16]
Moreover, Centre Ice Ltd., supra, requires that the evidence show that
an applicant will, in fact, suffer irreparable harm. It is insufficient to
show that irreparable harm is likely.
[17]
Irreparable harm is harm which cannot be quantified in monetary terms, and
hence, refers to the nature of the harm and not its magnitude. (See: RJR-Macdonald
Inc., supra)4
[18]
In situations where the validity of the trade-mark is in issue, even if there
is an infringement of a trade-mark, this still may not constitute irreparable
harm. For example, in Syntex, supra, Justice Heald wrote:
In my view, a
determination of the merits which involve extensive evidence and contentious
and disputed factors which address the vital question of the validity of the
mark should not be decided at the interlocutory injunction stage. In such a
situation a conclusion that mere infringement of a proprietary right in a
trade mark constitutes, of itself, irreparable harm is somewhat contradictory
since it is the very "proprietary right" which is at issue. When a
court decides via an interlocutory injunction that an aggrieved party has
"proprietary rights in a trade mark", that court is deciding the
very issue which is to be determined at trial. In my view such a determination
should not be made at an interlocutory stage where, as in this case, the
question of validity is strenuously addressed by the parties.5
[19]
Furthermore, a court cannot infer, from a finding of confusion, the existence
of a loss of goodwill or reputation. In order to be granted an interlocutory
injunction, the moving party must produce concrete evidence of irreparable
harm. For example, in Nature Co., supra, Stone J.A. stated:
While, as the motions
judge stated, there was in the present case some evidence of actual confusion,
that evidence did not go so far as to show, in my view, that the confusion
would cause irreparable harm to the respondent. As I understand it, the
learned judge was able to arrive at his conclusion from what he viewed as loss
of distinctiveness in the respondent's mark if this confusion were allowed to
go unchecked. This latter conclusion, it seems was in turn dependent on the
assumption that this contested mark should be taken to be valid in determining
the issue of irreparable harm.6
[20]
Similarly, Justice Tremblay-Lamer in Caterpillar Inc. v. Chaussures
Mario Moda Ltd.,7 articulated the same principle as in Nature
Co., supra, when she clarified that Centre Ice, supra, is to be
interpreted as in the following way:
...the court
cannot infer from the existence of confusion the existence of a loss of
goodwill or reputation. Actual evidence of irreparable harm is necessary.8
Application to the
Present Motion
[21]
The Defendants allege that the Plaintiff has merely asserted the likelihood of
confusion without adducing any evidence. The Defendants have also argued that
the Plaintiff has tendered no actual evidence of loss of goodwill or
reputation.
[22]
I agree with the Defendants. I am unable to locate in the materials any clear
evidence, which is not speculative in nature, that demonstrates the Plaintiff
will suffer irreparable harm.
[23]
The only evidence tendered in support of the proposition that the Plaintiff
will suffer irreparable harm is the affidavit, including its attached exhibits,
of George Jewell. The relevant portions of his affidavit read:
40. By the activities
complained of, the Defendants have caused and will continue to cause,
irreparable harm to the Plaintiff by, inter alia:
(a) jeopardizing the
reputation, brand name awareness, and user or consumer loyalty which the
Plaintiff has developed, and continues to develop, in connection with its
Toronto.com web site and Trade-marks;
(b) jeopardizing the
Plaintiff"s ability to attract advertisers who pay to have their products,
services and businesses advertised on the Plaintiff"s web site in
association with the mark Toronto.com;
(c) jeopardizing the
commercial relationship between the Plaintiff and its advertisers (because of
(a), for example) such that the advertisers will not advertise on the web site,
or insist upon purchasing the advertising space at a lower price;
(d) causing the
Plaintiff"s sole source of revenue, and the significant value of its
internet brand name, to be lost or diminished as a result of (a) to (c);
(e) abetting others
to provide internet services encroaching on the Plaintiff"s Trade-marks
and pass off their own products, services and businesses as and for those of
the Plaintiff. Given the speed at which the internet world is developing, it
is reasonable for the Plaintiff to apprehend that others will be tempted to
follow the example of the Defendants if the Defendants are not restrained from
using the trade-mark and domain name Toronto2.com and from copying and "framing"
the Plaintiff"s web site contents;
(f) diminishing the
value of the goodwill attaching to the Trade-marks;
(g) diminishing the
distinctive character of the Trade-marks; and
(h) encouraging
others to engage in activities which attempt to render common-place the
distinctive Toronto.com trade-mark and domain name of the Plaintiff.
41. The loss of
distinctiveness which the Plaintiff"s Trade-marks are suffering and will
continue to suffer by the Defendants" use of "Toronto2.com"
cannot be adequately compensated by an award of damages on the merits. The
extent of loss is not quantifiable because of the very nature of what is being
lost, namely distinctiveness.
42. The Plaintiff has
invested tremendous time, money and effort to create, operate and advertise
its web site in association with its Trade-marks in Canada. It has incurred
significant operational costs, including the initial costs to get the site up
and running, and the continuing costs associated with creating new web site
pages and content and generally maintaining the site.
43. The Plaintiff is
not aware of any investment made by the Defendants for the promotion of the
Toronto2.com trade-mark on their web site or elsewhere in Canada. The
Defendants have been, and continue to be, unjustly enriched by their improper
and unlawful activities. They have, among other things, avoided having to
invest the time, effort and money that would have been required to start-up,
operate and maintain a web site with content or web pages that they had
themselves created or had licensed from others. They have also avoided having
to expend the time, effort and money they otherwise would have had to expend
to develop a valuable internet brand name, market their site to potential
advertisers and generate revenue through the sale of advertising space to
those advertisers. The Defendants are simply taking a free ride on the
Plaintiff"s investments and goodwill.
44. The Plaintiff
does not know whether or not the Defendants have sufficient assets to satisfy
any favourable judgment which this court may grant to the Plaintiff inasmuch
as damages and profits could be ascertained.
[24]
Mr. Jewell has simply not pointed to any clear evidence on which this Court
could conclude that irreparable harm will ensue if the interlocutory
injunction is not granted. The exhibits to Mr. Jewell"s affidavit do not
prove that www.toronto.com has or will lose reputation, brand name
awareness or consumer loyalty, nor do the exhibits prove that www.toronto.com
is losing the ability to attract advertisers. Likewise, there is no proof that
the value of its goodwill is being diminished.
[25]
As was noted in Man and his Home Ltd. (c.o.b. Sentinel Alarm) v. Mansoor
Electronics Ltd.9, by Madame Justice Tremblay-Lamer, "a
bare allegation on the part of the Plaintiff that the Defendant"s
activities have caused it to suffer irreparable harm is, in my opinion,
insufficient".10
[26]
Although an inability to ultimately pay damages can constitute irreparable
harm, in the present motion, the Plaintiff has failed to show, based on all
the evidence submitted, that it will suffer any irreparable harm. Without
proof of harm, it is impossible for me to conclude that the harm is
irreparable solely on the basis that the Defendants may be impecunious.
Thus, there is no need to address the adequacy of damages as the Plaintiff has
failed to adduce clear and confirming evidence that irreparable harm will
ensue.
[27]
I have already issued an Order dismissing the motion for the interlocutory
injunction and the foregoing constitute my reasons for that Order. However, at
this time I direct that the Defendants will maintain accounts in relation to
all activities in connection with their website pending the final disposition
of this matter at trial.
[28]
Costs will be costs in the cause.
"E. Heneghan"
J.F.C.C.
OTTAWA, Ontario
June 1, 2000
Footnotes
1(1991), 36 C.P.R. (3d) 129 at
133-138 (F.C.A).
2(1992), 41 C.P.R. (3d) 359 at
366-368 (F.C.A.).
3(1994), 53 C.P.R. (3d) 34 at 52-54
(F.C.A.).
4[1994] 1 S.C.R. 311 at 315.
5Ibid. at 138.
6Ibid. at 367.
7(1995), 62 C.P.R. (3d) 338 (F.C.T.D.).
8Ibid. at 344.
9[1996] F.C.J. No. 1558, T-2097-96
(November 28, 1996) (F.C.T.D.).
10Ibid. at para. 21.
