826239 Ontario Inc. v. Sony Kabushiki Kaisha
T-2138-95
McKeown J.
15/12/95
24 pp.
Application for interlocutory injunction against defendants who are planning to issue worldwide enhanced compact disc, combining audio compact disc features and CD-ROM technology, under name "CD Plus"-Plaintiffs selling compact discs under name "CD Plus" since 1988-Incorporated in 1989-Applied for trade mark registration in 1989; granted in 1995-Defendants' application for registration of proposed trademark "CD Plus" refused prior to registration of plaintiffs' trade mark-Defendant attempting to improve legal position by purchasing trade name "CD Plus" from Ovid Technologies Inc., American company, in 1995-Ovid allegedly using "CD Plus" since 1989 in connection with CD ROM medical database-Sony major compact disc supplier to plaintiff-Intending to license entire recording industry to use trade mark "CD Plus" for any discs using its technology-"CD Plus" to be used in generic sense to identify product-Sony's use of "CD Plus" in Canada will cause plaintiff to lose control of its trade mark as market flooded with advertising, promotion, product using name "CD Plus"-Trade mark would be in hands of much larger, more powerful group, directing all its efforts at same customer base i.e. purchasers of compact discs-To expand by franchising more retail outlets under name "CD Plus" plaintiff must have distinctive trade mark-Evidence of confusion in marketplace-Application allowed-(1) Serious issue to be tried-Trade-marks Act, s. 19 providing presumption of validity of registered trade-mark-Presumption enhanced herein because defendants' application for same trademark refused prior to issuance of trade mark- Defendants not appealing decision of Trade-marks Office- S. 4 providing use of service mark constituting "use" within meaning of Act-Plaintiff using "CD Plus" prior to use by Ovid-Defendants not using mark until 1995-Plaintiff meeting requirements of s. 19-Main purpose of registration of trade mark to distinguish owner's services or wares- Appropriation by Sony of plaintiff's trade mark as generic name for new CD product of pre-recorded music designed to be played on ordinary CD players depriving trade mark "CD Plus" of ability to distinguish plaintiff's business from that of competitors-Two trade marks appearing virtually identical-S. 22 prohibiting any person from using trade mark registered by another person in any manner likely to depreciate value or goodwill attached to mark-Almost impossible to differentiate between packaging-Confusion not needed to prove depreciation of trade mark-Obliteration of distinctiveness of trade mark necessarily depreciates goodwill attached to mark-(2) Plaintiff meeting test of irreparable harm set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311-Centre Ice Ltd. v. National Hockey League (1994), 53 C.P.R. (3d) 34 (F.C.A.) stating plaintiff must establish, by clear evidence, irreparable harm not compensable by monetary damages award- Exception when injunction quia timet: evidence of actual harm not required because defendants not yet in marketplace-Plaintiff meeting that requirement-If Sony successful with "CD Plus", probability name no longer distinctive-Owner's proprietary interest in trade mark meaning right to exclude others from its use-If necessary to expunge "CD Plus" because generic, damages immeasurable-(3) In reasonably clear case of infringement balance of convenience favouring plaintiff's right to exclusive use of trade mark as recognized in s. 19-Sony knowing officially about plaintiff "CD Plus" since 1995 and even earlier since supplier of plaintiff-Not yet fixing release date for "CD Plus" compact discs in Canada; no budgets or financial resources yet committed-Interlocutory injunction should be granted to maintain status quo-Improper to consider inconvenience to defendant to change trade mark where infringing activity instituted after notice of plaintiff's right-If injunction not granted, possibility product becoming generic and impossible to continue to distinguish plaintiff's business because of trade mark-Under s. 22 value of goodwill of trade mark should not be depreciated-Plaintiff's undertaking for damages meets requirements of case law-Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2, 4, 6, 16, 19, 20, 22.