Sole director of restaurant found personally liable for infringement

Canada
In 2045978 Ontario Inc v Chaps Aldershot Inc (2009 FC 872, September 4 2009), the Federal Court of Canada has found that Chaps Aldershot Inc and its president, secretary, treasurer and sole director Kevin Saunders had infringed the registered trademark CHAPS.
 
Plaintiff 2045978 Ontario Inc operates a restaurant under the name Chaps The Original in the town of Burlington, Ontario. The evidence showed that the restaurant is well-known and has been active since 1981. The plaintiff registered the trademark CHAPS on March 30 2005 in association with restaurant services.
 
In 2006 Chaps Aldershot Inc purchased a restaurant business from a third party, which included the goodwill and trade name associated thereto. Chaps Aldershot and sole director Saunders subsequently started to carry on the business under the name Lezley’s Chaps. Their restaurant was on the same street as the Chaps The Original restaurant, with only six kilometres between the two.
 
The plaintiff filed a motion for summary judgment to obtain a permanent injunction against the defendants restraining them from:

  • infringing the registered trademark CHAPS;
  • using the trademark LEZLEY'S CHAPS or any trademark or trade name that caused confusion with the CHAPS mark; and
  • directing public attention to their services or business in such a way as to cause or be likely to cause confusion with the plaintiff's services or business.
According to a timetable agreed upon by the parties and approved by the court, the plaintiff had until July 27 2009 to serve and file its motion record, and the defendants had until August 7 2009 to file their responding motion record. However, the defendants failed to comply with the deadline. On August 24 2009 the defendants filed an affidavit from Saunders dated August 12 2009 and served the next day, without an affidavit to explain, under oath, why Saunders was unable to swear the affidavit prior to August 12 2009.
 
Given that the defendants did not request permission from the court to allow the late filing (erroneously assuming that it would not be a problem), the court held that the affidavit could not be part of the evidence on the motion. However, even if the court had accepted the affidavit, it would have been insufficient to show that there was a genuine issue requiring a trial.
 
In light of the evidence before it, the court, allowing the motion for summary judgment, concluded that:
  • the defendants were liable of trademark infringement and passing off; and
  • Saunders had “engaged in a deliberate, wilful and knowing pursuit of a course of conduct that he knew constituted infringement of the plaintiff's trademark”.
Marcel Naud, Léger Robic Richard LLP, Montreal

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