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Fruiticana Produce Ltd v. Fruitocana Inc. – Federal Court grants default judgment for trademark infringement but limits remedies to injunctive relief
While injunctive relief may be granted on an ex parte motion for default judgement relating to trademark infringement where there is clear confusion between the partes' marks, damages and other forms of relief need to be supported by the evidence.
Background
The Plaintiff, Fruiticana Produce Ltd., operates a 23‑store grocery chain in British Columbia and Alberta and owns multiple Canadian registrations for FRUITICANA and FRUITICANA EXPRESS for retail grocery services.
Since at least 2023, the Defendant, Fruitocana Inc., has operated a grocery store in Toronto under the name "Fruitocana". After the Plaintiff's cease and desist letter went ignored the Plaintiff commenced an action for trademark infringement. The Defendant did not file a defence.
The Plaintiff brought a motion for default judgment on an ex parte basis seeking declarations, a permanent injunction, damages, destruction, and solicitor‑client costs.
Decision
On an ex parte motion for default judgment, the plaintiff is required to prove its case on a balance of probabilities by way of affidavit evidence.
The Court found infringement of the Plaintiff's FRUITICANA word mark under s. 20 of the Canadian Trademarks Act. A defendant will be held liable for trademark infringement under this section when it "sells, distributes or advertises any goods or services in association with a confusing trademark or tradename".1
As articulated by the Supreme Court in Masterpiece Inc v Alavida Lifestyles Inc,2 trademark confusion in Canada is a matter of first impression in the mind of the casual consumer in somewhat of a hurry. In undertaking this analysis, the Court must have regard to the factors listed in subsection 6(5) of the Trademarks Act, namely, the inherent and acquired distinctiveness of the trademarks, the duration of their use, the nature of the goods or services, and the nature of the trade and the degree of resemblance between the trademarks.
Starting with the degree of resemblance, which is often considered to be the most important factor, the Court held that the resemblance between the Plaintiff's FRUITCANA and the Defendant's FRUITOCANA mark was striking (differing by only one letter located in the middle of the marks). Moreover, the Court found that FRUITCANA had acquired distinctiveness through decades of use, and the parties offered the same retail grocery services in the same channels of trade. In light of the dispositive finding on the word mark, the Court did not need to analyze the parties' design marks.
Remedies
The Court granted a tailored injunction prohibiting the Defendant's use of FRUITOCANA or any confusing mark, effective 30 days after judgment to permit operational changes.
Notwithstanding its finding that the Plaintiff was entitled to injunctive relief, the Court refused to grant damages on the basis that there was no evidence of actual damages or sufficient evidence that would allow the Court to infer that the Plaintiff suffered any kind of damages.
In particular, the Court determined that the evidentiary record provided no basis to infer loss or depreciation of the Plaintiff's goodwill, particularly given that the Defendant operated a single store in Toronto, the Plaintiff's operations were in British Columbia and Alberta, and that there was virtually no actual confusion. Moreover, the Plaintiff's intention to expand into Ontario did not supply proof of present harm.
The Court also refused to grant an order for destruction of the Defendant's goods, as there was no evidence the mark was used on goods, and any such goods would likely be sold during the 30‑day transition. The Court further refused to grant and order for solicitor‑client costs as there was no reprehensible conduct. Ultimately, the Court awarded lump‑sum costs of $2,500.
Footnotes
1. Trademarks Act, R.S.C., 1985, c. T-13, s. 20(1)(a).
2. Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27
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