2017 FC 616, 2017 FC 616

T-2084-12 2017 FC 616 United Airlines, Inc. ( Plaintiff ) v. Jeremy Cooperstock ( Defendant ) Indexed as: United Airlines, Inc. v. Cooperstock Federal Court, Phelan J.—Montréal, December 5–8, 2016; Ottawa, June 23, 2017.

Trade-marks — Infringement — Action by plaintiff claiming that defendant infringing its registered trademarks pursuant to Trade-marks Act, ss. 7(b),(c), 20(1)(a), 22 — Plaintiff commercial airline operating under brand name UNITED, using domain name www.united.com — Defendant operating www.untied.com (UNTIED.com) as consumer criticism website about plaintiff — Adopting designs similar to UNITED — Whether defendant: infringed plaintiff’s trademarks; causing confusion with, passing of services of plaintiff; using plaintiff’s trademarks in a manner depreciating value of goodwill attached thereto — Defendant infringing plaintiff’s registered trademarks — Term “services” in Trade-marks Act, s. 20(1)(

a) not requiring monetary element — In certain circumstances, provision of information for the benefit of the public may constitute service under Trade-marks Act — Here, defendant offering services through UNTIED.com by way of information, guidance to disgruntled flyers — Reasoning in Tommy Hilfiger Licensing, Inc. v.

International Clothiers Inc. applying herein — Display of Untied marks constituting use under s. 20(1)(a) — Defendant’s use of confusingly similar marks contrary to s. 20(1)(a) — Defendant acting contrary to Trade-marks Act, ss. 7(b),(c) — Misleading visitors to UNTIED.com — Plaintiff suffering damages — Defendant intentionally attempting to attract plaintiff’s online consumers to his own website — Depreciating value of goodwill attached to United trademarks — Plaintiff entitled to injunction restraining defendant’s use of United Marks — Action allowed.

Copyright — Infringement — Plaintiff claiming that defendant infringing its copyright pursuant to Copyright Act , ss. 3(1) , 27 — Plaintiff commercial airline operating under brand name UNITED, using domain name www.united.com — Defendant operating www.untied.com (UNTIED.com) as consumer criticism website about plaintiff — Adopting designs similar to UNITED — Whether defendant infringed plaintiff’s copyright — Clear substantial copying taking place — Use of copyrighted material having to come within fair dealing exception (CCH Canadian Ltd. v.

Law Society of Upper Canada (CCH)) — Defendant’s website meeting first step of CCH test, i.e. allowable purpose of parody — Legislation silent as to content, meaning, or scope of “parody” — Definition of parody used by European Court of Justice consistent with ordinary meaning of term, purpose, scheme of fair dealing provisions in Copyright Act, intention of Parliament — Parody having two basic elements (1) evocation of existing work while exhibiting noticeable differences; (2) expression of mockery or humour — UNTIED.com falling within that definition — However, defendant not meeting second step of CCH test (i.e. use must be fair) —Questionable whether parody exception may successfully be invoked when there is confusion — Here, defendant’s real purpose was to defame or punishing plaintiff, not to engage in parody or humour — Alternatives to current design of UNTIED.com would be effective in meeting goals of website — Plaintiff entitled to injunction restraining defendant’s use of copyrighted works.

This was an action by the plaintiff claiming that the defendant infringed its registered trademarks and its copyright pursuant, respectively, to paragraphs 7(b), (c), 20(1)(a), and

section 22 of the Trade-marks Act , and subsection 3(1) and

section 27 of the Copyright Act . The plaintiff is a commercial airline operating commercial flight services under the brand name of UNITED, and using the domain name www.united.com (United Website) for its online presence. The plaintiff has made use of a number of trademarks in association with its services, including the UNITED word mark and the Globe design. The defendant operates www.untied.com (UNTIED.com), which is a play on the word “United”, so as to highlight the disconnection and disorganization that he perceived in the company.

The defendant maintained UNTIED.com as a consumer criticism website where visitors can find information on the plaintiff, submit complaints about the plaintiff, and read complaints about the plaintiff. UNTIED.com adopted a design similar to the design of the United Website. The defendant reproduced the entirety of the United logo and the Globe design, and the overall layout of the two websites was similar. The plaintiff contacted the defendant several times to request that changes be made to the appearance of UNTIED.com so as to diminish the potential for confusion in the minds of visitors.

The main issues were whether the defendant: infringed the plaintiff’s trademarks contrary to paragraph 20(1)(

a) of the Trade-marks Act ; caused confusion with and passed off the services of the plaintiff contrary to paragraphs 7(

b) and (

c) of the Trade-marks Act ; used the plaintiff’s trademarks in a manner susceptible of depreciating the value of the goodwill attached thereto contrary to

section 22 of the Trade-marks Act ; and infringed the plaintiff’s copyright. Held , the action should be allowed. The defendant infringed the plaintiff’s registered trademarks and copyright. The elements of infringement under paragraph 20(1)(

a) of the Trade-marks Act include the existence of a registered trademark, “use” of a confusing trademark by an allegedly infringing party, and sale or distribution of any goods or services in association with that confusing trademark or trade-name. The term “services” in paragraph 20(1)(

a) does not require a monetary element. There is no explicit requirement in the legislation of a monetary or commercial element to services. It is important not to cast the meaning of “services” so broadly that any provision of information falls within the scope of “services”. However, in certain circumstances, the provision of information for the benefit of the public may constitute a service under the Trade-marks Act . Here, it was clear that the defendant was offering services through UNTIED.com by way of information and guidance to disgruntled flyers.

The reasoning of the Federal Court of Appeal in Tommy Hilfiger Licensing, Inc. v. International Clothiers Inc. was persuasive. In that case, the Court considered the similarity of the marks, the placement of the marks on clothing, and the respondent’s awareness that it was common practice to affix a logo to the breast of a sweater or shirt to indicate its source. Similarly in the case at bar, the defendant was aware that he had placed the Untied

Marks in the same location as the United Marks were displayed on the United Website. The defendant’s display of the Untied markstherefore constituted use under paragraph 20(1)(a). The defendant’s use of confusingly similar marks in association with pre-flight andpost-flight customer service constituted infringement of the plaintiff’s registered trademarks contrary to paragraph 20(1)(a). The defendant acted contrary to paragraphs 7(

b) and 7(

c) of the Trade-marks Act. There was confusion and the likelihood of confusion inthis case. The defendant misled visitors to UNTIED.com as to the source of the services available on that website. The plaintiff suffereddamages or was likely to suffer potential damages. The defendant intentionally attempted to attract the plaintiff’s online consumers to his own website for notoriety. In doing so, hedepreciated the value of goodwill attached to the United Trademarks contrary to

section 22 of the Trade-marks Act. As to copyright infringement, it was clear that substantial copying took place. In CCH Canadian Ltd. v. Law Society of Upper Canada(CCH), the Supreme Court determined that the use of copyrighted material must come within the fair dealing exception: (1) the dealingmust be for an allowable purpose and (2) must be fair. The defendant’s website met the first step of the CCH test, as it is for theallowable purpose of parody under

section 29 of the Copyright Act. The legislation is silent as to the content, meaning, or scope of“parody”. However, the definition of parody used by the European Court of Justice in Deckmyn v. Vandersteen is consistent with theordinary meaning of the term, the purpose and scheme of the fair dealing provisions in the Copyright Act, and the intention ofParliament. Parody should be understood as having two basic elements: the evocation of an existing work while exhibiting noticeabledifferences and the expression of mockery or humour. The fair dealing exception for the purpose of parody in

section 29 of the CopyrightAct does not require a user to identify the source of the work being parodied. In addition, parody does not require that the expression ofmockery or humour be directed at the exact thing being parodied. UNTIED.com fell within the definition of parody described above: itevoked existing works (the United Website, the United Logo, and the Globe Design) while showing some differences (such as contentand disclaimers), and it expressed mockery (and criticism) of the plaintiff. That said, the defendant did not meet the second step of the test.

While UNTIED.com fell within the definition of parody, it wasquestionable whether the parody exception may successfully be invoked when there is confusion. Here, the Court was not satisfied thatthere was ever any intent for humour—rather, the defendant’s intent was to embarrass and punish the plaintiff for its perceivedwrongdoings. The defendant’s real purpose or motive in appropriating the copyrighted works was to defame or punish the plaintiff, notto engage in parody. When considering parody, available alternatives to the dealing cannot be weighed too heavily.

In this case, theappropriate question was whether the defendant’s use of alternative logos and website design would be as effective in mocking andcriticizing the plaintiff. Alternatives to the current design of UNTIED.com would be effective in meeting the goals of the website. It wasthe substantial copying of the plaintiff’s copyrighted material that was having a harmful impact, not the criticism contained onUNTIED.com. The questionable purpose of the dealing, amount of the dealing, and effect of the dealing all weighed in favour of theconclusion that this dealing was not fair.

Finally, the defendant did not make out the defence of estoppel or acquiescence. Passage of time alone does not justify a remedy. Theplaintiff did not act in any manner that would “encourage” the defendant to continue his breach. Laches was inapplicable because astatutory limitation applied in this case. The plaintiff was entitled to an injunction restraining the defendant’s use of the United marksand the copyrighted works. STATUTES AND REGULATIONS CITED Copyright Act, R.S.C., 1985, c. C-42, ss. 3(1), 27, 29, 29.1. Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2, 4, 6, 7(b),(c), 20, 22.

CASES CITED APPLIED: Kraft Limited v. Registrar of Trade Marks, (FC), [1984] 2 F.C. 874, (1984), 1 C.P.R. (3d) 457, 1984 CarswellNat 79(WLNext Can.) (T.D.); TSA Stores, Inc. v. Canada (Registrar of Trade-Marks), 2011 FC 273, 91 C.P.R. (4th) 324; Tommy HilfigerLicensing, Inc. v. International Clothiers Inc., 2004 FCA 252, [2005] 1 F.C.R. 148; Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée,2006 SCC 23, [2006] 1 S.C.R. 824; Source Perrier (Société anonyme) v. Fira-Less Marketing Co. Limited, (FC),[1983] 2 F.C. 18, 70 C.P.R. (2d) 61, 1983 CarswellNat 23 (WLNext Can.) (T.D.); Ciba-Geigy Canada Ltd. v.

Apotex Inc., (SCC), [1992] 3 S.C.R. 120, (1992), 95 D.L.R. (4th) 385, 1992 CarswellOnt 1007 (WLNext Can.); Future Shop Ltd. v. A. & B. SoundLtd. (1994), (BC SC), 93 B.C.L.R. (2d) 40, 55 C.P.R. (3d) 182, 1994 CarswellBC 267 (WLNext Can.) (S.C.);Warman v. Fournier, 2012 FC 803, 104 C.P.R. (4th) 21; CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1S.C.R. 339; Deckmyn v. Vandersteen (2014), Case C-201/13 (Court of Justice of the EU). DISTINGUISHED: Canadian Memorial Services v. Personal Alternative Funeral Services Ltd. (2000), (FC), 182 F.T.R. 28, 4 C.P.R.(4th) 440, [2000] F.C.J.

No. 140 (QL) (T.D.). CONSIDERED: United Airlines inc. v. Cooperstock, 2016 QCCS 4645, 2016 CarswellQue 9046 (WLNext Can.); Cooperstock v. United Airlines Inc.,2017 QCCA 44, 2017 CarswellQue 223 (WLNext Can); Compagnie Générale des Établissements Michelin―Michelin & Cie v. NationalAutomobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), (FC), [1997] 2 F.C.306, (1996), 71 C.P.R. (3d) 348, 1996 CarswellNat 2297 (WLNext Can.) (T.D.); Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22,[2006] 1 S.C.R. 722; Asbjorn Horgard A/S v.

Gibbs/Nortac Industries Ltd., (FCA), [1987] 3 F.C. 544, (1987), 14C.P.R. (3d) 314, 1987 CarswellNat 643 (WLNext Can.) (C.A.); Canada Post Corp. v. Paxton Developments Inc. (2000), (FC), 198 F.T.R. 72, 9 C.P.R. (4th) 429, 2000 CarwellNat 3003 (WLNext Can.) (T.D.); Green v. Schwarz (1986), 12 C.P.R. (3d)

84, 1 A.C.W.S. (3d) 401, 1986 CarswellOnt 877 (WLNext Can.) (H.C.J.); Remo Imports Ltd. v. Jaguar Cars Ltd., 2007 FCA 258, [2008]2 F.C.R. 132; Thoi Bao Inc. v. 1913075 Ontario Limited (Vo Media), 2016 FC 1339, 2016 CarswellNat 10491; Society of Composers,Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326; Productions Avanti Ciné-Vidéo Inc. v.Favreau, [1999] R.J.Q. 1939, (1999), (QC CA), 177 D.L.R. (4th) 568, 1 C.P.R. (4th) 129 (Que. C.A.); Campbell v.Acuff-Rose Music, Inc., 510 U.S. 569 (1994); Alberta (Education) v.

Canadian Copyright Licensing Agency (Access Copyright), 2012SCC 37, [2012] 2 S.C.R. 345; Remo Imports Ltd. v. Jaguar Cars Ltd., 2005 FC 870, 2005 CarswellNat 7479 (WL Can.). REFERRED TO: Clairol International Corp. v. Thomas Supply & Equipment Co., (CA EXC), [1968] 2 Ex. C.R. 552, 1968CarswellNat 32 (WLNext Can.); Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387; Noshery Ltd. v.Penthouse Motor Inn Ltd. (1969), 61 C.P.R. 207, 1969 CarswellOnt 44 (WLNext Can.) (S.C.); Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, (1998), 36 O.R. (3d) 418. AUTHORS CITED Driedger, Elmer A.

Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983. Katherine Barber, ed. Concise Canadian Oxford Dictionary, 2nd ed. Don Mills, Ont.: Oxford University Press, 2005. ACTION by the plaintiff claiming that the defendant infringed its registered trademarks and its copyright pursuant, respectively, toparagraphs 20(1)(a), 7(b), 7(c), and

section 22 of the Trade-marks Act, and subsection 3(1) and

section 27 of the Copyright Act. Actionallowed. APPEARANCES Jay Zakaïb for plaintiff. Dr. Jeremy Cooperstock on his own behalf. SOLICITORS OF RECORD Gowling WLG (Canada) LLP, Ottawa, for plaintiff. The following are the reasons for judgement rendered in English by Phelan J.: Table of Contents Sections: Paragraph #I. Introduction 1–2II. Background 3–17III. Issues 18–19IV. Witnesses 20A. United’s Witnesses 21(1) Mr. Scott Wilson 21(2) Mr. Jeff Wittig 22(3) Ms. Nancy Proietti 23–24(4) Mr. Stephen Buffo 25–26B. Cooperstock’s Witnesses 27(1) Dr. Jeremy Cooperstock 27(2) Mr. Ron Hall 28V. Analysis 29A.

Trademark Infringement 29–30(1) Registration 31(2) Cooperstock Provides Services through UNTIED.com 32–34(3) Use 35–42(4) Confusion 43–46(

a) Inherent distinctiveness 47(

b) Length of use 48(

c) Nature of the services 49–50(

d) Nature of the trade 51–52(

e) Resemblance 53–55(

f) Surrounding Circumstances and Conclusion 56–68(5) Authorization 69(6) Conclusion on s. 20(1)(a) 70B. Passing Off 71–72(1) Goodwill or Reputation 73–78(2) Deception of the Public due to Misrepresentation 79–85(3) Damages 86–88(4) Conclusion on ss. 7(

b) and 7(c) 89C. Depreciation of Goodwill 90

(1) Use 91

(2) Goodwill 92

(3) Effect/Linkage 93–97

(4) Depreciation 98–101

(5) Conclusion 102 D. Copyright Infringement 103

(1) Infringement 103–105

(2) Fair Dealing 106–108 (

a) Is the dealing for an allowable purpose? 109–120 (

b) Is the dealing fair? 121 (

i) The Purpose of the Dealing 122–125 (ii) The Character of the Dealing 126–127 (iii) The Amount of the Dealing 128–130 (iv) Alternatives to the Dealing 131–134 (

v) The Nature of the Work 135–136 (vi) The Effect of the Dealing on the Work 137–140

(3) Conclusion on Copyright Infringement 141 E. Abuse of Process 142–146 F. Re-Examination 147–148 VI. Conclusion 149–152 I. Introduction [ 1 ] This is an action relating to the alleged infringement by the defendant, Dr. Jeremy Cooperstock (Cooperstock), the owner- operator of the website www.untied.com (UNTIED.com), of trademarks and copyright owned by the plaintiff, United Airlines, Inc. (United). [ 2 ] The plaintiff claims that the defendant has infringed its registered trademarks pursuant to paragraphs 20(1)(a), 7(b), 7(c), and

section 22 of the Trade-marks Act , R.S.C., 1985, c. T-13 . Further, the plaintiff claims that the defendant has infringed its copyright pursuant to subsection 3(1) and

section 27 of the Copyright Act , R.S.C., 1985, c. C-42. II. Background [ 3 ] The plaintiff is a commercial airline that was formed by the merger of two predecessor airlines, United Air Lines, Inc. (UAL) and Continental Airlines (Continental). This merger was announced in 2010 and finalized on March 31, 2013. United and its predecessor UAL have been operating commercial flight services in and out of Canada since 1939 under the brand name of UNITED.

UAL used the domain name www.ual.com for its online presence until December 17, 1998, when it began using www.united.com. [ 4 ] Following the merger between UAL and Continental, the plaintiff unveiled its brand name and logo in August 2010: the United brand name with the United Logo (previously used by UAL) and the Globe Design (previously used by Continental). At that time, UAL began to use the United brand name and United Logo, including on its website. Continental continued to use its own branding, including the Globe Design.

On November 30, 2011, UAL and Continental started operating under a single operating certificate, and on March 3, 2012 they merged their consumer-facing platforms (i.e., their websites). The new, merged website was located at www.united.com and it used the design of the previous Continental website, which had used the same basic design and artwork since 2006. [ 5 ] The plaintiff has made use of a number of trademarks in association with its services (the United Marks or United Trademarks), including:

a) The UNITED word mark (Registration TMA204,456) [UNITED Mark], which was registered by UAL in January 1975 and renewed in January 2005. This trademark has been used in Canada in relation to air transportation services for passengers since as early as 1939.

b) The UNITED AIRLINES word mark (Registration TMA367,179) [UNITED AIRLINES Mark], which was registered by UAL in March 1990 and renewed in March 2013. This trademark has been used in Canada in relation to air transportation of passengers, property, and mail since as early as 1939.

c) The Globe Design (Registration TMA492,886), which was registered by Continental in April 1998 and renewed in April 2013. This trademark has been used in Canada in relation to air transportation of persons and property since as early as 1995. [ 6 ] The plaintiff also claims copyright with respect to the following logos and designs:

a) The United logotype (Registration 1099766) [United Logo], which was first published on August 11, 2010 and was registered on October 29, 2012.

b) The Globe Design (Registration 1099765), which was first published on February 1, 1991 and was registered on October 29, 2012.

c) The INTERNET WEBSITE CONTENT INCLUDING, WITHOUT LIMITATION: (TEXT, IMAGES, DESIGNS, LAYOUT, DOMAIN: WWW.united.com) (Registration 1099767) [United Website], which was first published on July 29, 2006 and was registered on October 29, 2012. [ 7 ] The defendant operates UNTIED.com, which was registered and launched on or about April 24, 1997. UNTIED.com is the successor to a personal webpage operated by the defendant titled “Poor Show”, which was launched around the summer of 1996.

The “Poor Show” webpage displayed information about the defendant’s negative experience with United (then UAL) and United’s purportedly inadequate responses. After launching this webpage, the defendant began to receive letters from other travellers regarding their negative experiences with United and he posted these on his webpage. The content related to United was removed from the “Poor Show” webpage around March 24, 1997; about one month later, the defendant launched UNTIED.com.

The defendant chose the domain name UNTIED.com as a play on the word “United”, so as to highlight the disconnection and disorganization that he perceived in the company.

The defendant continues to maintain UNTIED.com as a consumer criticism website where visitors can find information on the plaintiff, submit complaints about the plaintiff, and read complaints about the plaintiff dating back to 1998 in the database of complaints. [ 8 ] Between August and September 2011, the defendant redesigned UNTIED.com—it was at this time that graphics similar to the current graphics (the Untied Marks) were displayed in the top left-hand corner of the website, including an “UNTIED” logo (Untied Logo) (a blue sans-serif rendering of the word “UNTIED” in evenly spaced capital letters) and a globe logo covered with a frown (Frowning Globe Design): [ 9 ] At this time, UNTIED.com also adopted, for the first time, a design similar to the design of the United website. [ 10 ] Following the redesign of UNTIED.com in September 2011, the plaintiff became aware of the strong resemblance between UNTIED.com and the United Website.

UNTIED.com was updated again in June 2012 to mirror the United Website design launched in March 2012. [ 11 ] The plaintiff contacted the defendant on July 16, 2012, to request that changes be made to the appearance of UNTIED.com so as to diminish the potential for confusion in the minds of visitors.

The defendant responded on July 17, 2012, indicating that he would “study” these concerns; at this time, he also offered his services to the plaintiff as a consultant. [ 12 ] The plaintiff contacted the defendant again on September 10, 2012 to restate its request and to “formally” put the defendant on notice with respect to the plaintiff’s intellectual property rights. The defendant responded on September 25, 2012 but did not address the request to change UNTIED.com’s appearance. [ 13 ] The plaintiff contacted the defendant for a third time on October 2, 2012.

The defendant responded on October 12, 2012, but he did not alter UNTIED.com’s appearance as requested. However, in October 2012, the defendant made certain alterations to UNTIED.com: he changed the colour of the T and I in the Untied Logo to red (from blue), changed the frown on the Frowning Globe Design to red (from blue), and added a disclaimer and a pop-up dialogue box to the website indicating that this was not the website of United.

The disclaimer, stating “(This is not the website of United Airlines)”, was placed at the top of the website in small black type— next to the graphic identifying “Untied” as “An Evil Alliance Member”. [ 14 ] The parties to this litigation are not unfamiliar with each other. Proceedings have taken place before the Superior Court of Quebec with respect to the defendant’s practice of making the personal information of United employees available on UNTIED.com. On September 27, 2016, in United Airlines inc. v.

Cooperstock , 2016 QCCS 4645 , 2016 CarswellQue 9046 (WLNext Can.), the Superior Court issued an injunction requiring the defendant to remove the contact information of employees with no customer care responsibilities from his website. The Superior Court found that the employees in question (co-plaintiffs in that proceeding) had no responsibility for customer care and had received phone calls, voice messages, and e-mails following the publication of their contact information on UNTIED.com, causing “significant prejudice” (paragraph 75).

The Superior Court further found that the publication of such information served “absolutely no purpose whatsoever” with respect to resolving customer complaints, and that it had a negative influence on the job performance of at least one employee (paragraphs 70 and 78). In reaching its conclusion, the Superior Court noted that the plaintiff was not seeking to shut down the defendant’s website, and rejected the defendant’s contention that he would be forced to shut down his website if the injunction were granted.

[ 15 ] The Court of Appeal of Quebec upheld this injunction on January 16, 2017 in Cooperstock v. United Airlines Inc. , 2017 QCCA 44 , 2017 CarswellQue 223 (WLNext Can.). The Court of Appeal stated [at paragraphs 4 and 5]: In effect, the Appellant wants to continue harassing employees without anyone benefitting from the exercise: certainly not the customers who complain to someone who is unable to respond to their complaint and certainly not the employees who are not meant to handle such complaints.

It is our unanimous view that the appeal is doomed to fail. [ 16 ] The Court of Appeal rejected Cooperstock’s contention that the injunction limited his freedom of speech, commenting that the injunction simply allowed United non-customer care employees to do the tasks that they were hired to perform. Likewise, this Court is of a similar view in respect of the defendant’s suggestion that freedom of speech is at issue in this litigation. [ 17 ] In September 2015, the current design for the United Website was launched.

It continues to make use of the United Logo and the Globe Design, as well as the domain name www.united.com. Although the design of UNTIED.com had not been updated at the time of the trial in December 2016, a “beta” website (www.untied.com/beta) operated by the defendant directs visitors to a website that closely resembles the current United Website. III. Issues [ 18 ] There are five issues to be determined: 1. Has the defendant infringed the plaintiff’s trademarks contrary to paragraph 20(1)(

a) of the Trade-marks Act ? 2. Has the defendant directed public attention to his services offered on UNTIED.com in a way as to cause or be likely to cause confusion with the services of the plaintiff contrary to paragraph 7(

b) of the Trade-marks Act ? Has the defendant passed off the services offered on UNTIED.com as those of the plaintiff contrary to paragraph 7(

c) of the Trade-marks Act ? 3. Has the defendant used the plaintiff’s trademarks in a manner susceptible of depreciating the value of the goodwill attached thereto contrary to

section 22 of the Trade-marks Act ? 4. Has the defendant infringed the plaintiff’s copyright in the United Website, the United Logo, and the Globe Design, contrary to the Copyright Act ? 5. Has the plaintiff engaged in delay or abuse of process? [ 19 ] For the reasons that follow, the Court concludes that the defendant has infringed the plaintiff’s trademarks and copyright. In addition, the Court concludes that the current version of UNTIED.com does not fall within the fair dealing for the purpose of parody exception to copyright infringement. IV.

Witnesses [ 20 ] The plaintiff called three fact witnesses and one expert witness, while the defendant called one fact witness and one expert witness. A. United’s Witnesses

(1) Mr. Scott Wilson [ 21 ] Mr. Wilson was, at the time of the trial, the Vice-President of eCommerce and Merchandising at United and had been with the company since 2010. His position involved designing, managing, and maintaining all of the digital efforts through which consumers interact with the plaintiff. Mr. Wilson gave evidence on topics such as the various iterations of the United Website, the various iterations of UNTIED.com, the plaintiff as an airline, and the plaintiff’s branding initiatives.

(2) Mr. Jeff Wittig [ 22 ] Mr. Wittig is senior counsel for finance and fleet in the legal department of United. He was first employed by Continental in 1997 and became an employee of United on April 1, 2013, following the merger of the operating companies. He gave evidence on topics such as the merger between UAL and Continental and the history of his personal information being made available on UNTIED.com.

(3) Ms. Nancy Proietti [ 23 ] Ms. Proietti is a travel agent employed at Groupe Voyages VP in Montréal. She represents corporate customers in both Quebec and Ontario and services clients in English and French. She gave evidence on her experience submitting a complaint to UNTIED.com. [ 24 ] Ms. Proietti was a credible and convincing witness. It was clear that she had a great deal of experience working in the travel industry, including interacting with air carriers such as the plaintiff and resolving customer service issues for her clients.

Her evidence with respect to confusion was compelling, particularly as she was a sophisticated user of air carrier websites and had experience dealing with air carriers such as United.

(4) Mr. Stephen Buffo [ 25 ] Mr. Buffo was called as an expert witness. He is an economist with experience in forensic accounting and valuation. He is an expert in the valuation of intellectual property rights, including with respect to trademarks and copyrights, as well as evaluating the impairment and diminution of value of intellectual property rights, in a broad range of industries including the transportation industry.

Mr. Buffo gave evidence on the existence of goodwill in the United Trademarks and the depreciation of goodwill. [26] Mr. Buffo’s evidence was relatively unhelpful. B. Cooperstock’s Witnesses

(1) Dr. Jeremy Cooperstock [27] The defendant called himself as his sole fact witness. He is a professor of electrical engineering at McGill University in Montréaland does occasional consulting work. He is the owner-operator of UNTIED.com, and he gave evidence on topics such as the creation ofUNTIED.com, his reasons for continuing the website, the rationale for collecting complaints, the intended audience of the website, thecosts of maintaining the website, the various updates to UNTIED.com, the complaints posted on the website, the current content ofUNTIED.com, and the beta website.

(2) Mr. Ron Hall [28] Mr. Hall was called as an expert witness in the extraction and analysis of data. He gave evidence on the percentage of complaintsposted on UNTIED.com which contained unredacted personal information in the form of MileagePlus numbers. V. Analysis A. Trademark Infringement [29] Trademark infringement occurs where a defendant has used a trademark or a confusingly similar mark, without the consent of thetrademark rights holder, in association with wares or services. Paragraph 20(1)(

a) states: 20

(1) The right of the owner of a registered trade-mark to its exclusive use is deemed to be infringed by any person who is not entitled toits use under this Act and who (

a) sells, distributes or advertises any goods or services in association with a confusing trade-mark or trade-name; [30] The elements of infringement under paragraph 20(1)(

a) are: the existence of a registered trademark, “use” of a confusingtrademark by an allegedly infringing party, sale, distribution, or advertisement of any goods or services in association with that confusingtrademark or trade-name, and lack of entitlement or authorization.

(1) Registration [31] The parties agreed that the trademarks at issue are registered.

(2) Cooperstock Provides Services through UNTIED.com [32] The parties disagreed as to whether the defendant was offering the sale, distribution, or advertisement of “services” throughUNTIED.com. The defendant admitted that he provides services in the form of information delivery, advice on legal rights, andpublication of complaints through UNTIED.com; however, he argued that these do not constitute “services” pursuant to the Trade-marksAct because there is no commerce involved. Although the plaintiff led some evidence that the defendant received revenue throughadvertising and donations, this income was minimal. [33] In my view, “services” in paragraph 20(1)(

a) of the Trade-marks Act does not require a monetary element. There is no explicitrequirement in the legislation of a monetary or commercial element to services. In Kraft Limited v. Registrar of Trade Marks, (FC), [1984] 2 F.C. 874 [at pages 878–879], (1984), 1 C.P.R. (3d) 457, 1984 CarswellNat 79 (WLNext Can.) (T.D.), atparagraphs 8–9, the Court indicated that “services” should not be narrowly interpreted. In TSA Stores, Inc. v. Canada (Registrar ofTrade-Marks), 2011 FC 273, 91 C.P.R. (4th) 324 (TSA Stores), at paragraph 16, Justice Simpson affirmed the broad

interpretation to begiven to “services” under

section 20 of the Trade-marks Act and found that the key element of “services” was the benefit to the public. InTSA Stores, Justice Simpson found that the website at issue in that case offered services in the form of information and guidance tovisitors and this did not involve a monetary element. [34] It is important not to cast the meaning of “services” so broadly that any provision of information falls within the scope of“services”. However, in certain circumstances, the provision of information for the benefit of the public may constitute a service underthe Trade-marks Act.

The defendant in this case was offering information and guidance to disgruntled flyers. This would be similar to,for example, phoning a “consumer help line” for guidance in dealing with an airline. Further, the evidence clearly established that thedefendant intended to provide services that were consistent with his general critique of the plaintiff, such as the publication ofcomplaints. Therefore, in my view, it is clear that the defendant offers services through UNTIED.com.

(3) Use [35] The plaintiff must show that the defendant “used” its trademarks in the manner contemplated by the legislation. With respect toinfringement pursuant to subsection 20(1), this involves two elements: the defendant must have used the marks within the meaning ofsection 4 of the Trade-marks Act and the defendant must have used the marks as trademarks (that is, for the purpose of identifying theorigin of the goods or services as described in

section 2 of the Trade-marks Act). With respect to a service, subsection 4(2) deems atrademark to be used in association with a service if the mark is used or displayed in the advertising or performance of the service inquestion.

Section 2 states: 2 … trade-mark means

(

a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish goods or services manufactured, sold, leased,hired or performed by him from those manufactured, sold, leased, hired or performed by others, (

b) a certification mark, (

c) a distinguishing guise, or (

d) a proposed trade-mark; … use, in relation to a trade-mark, means any use that by

section 4 is deemed to be a use in association with goods or services. [36] To constitute use as a trademark, a mark must be used to indicate the origin of goods or services; that is, to distinguish goods orservices of an individual from those of others. If, as in Clairol International Corp. v. Thomas Supply & Equipment Co., (CA EXC), [1968] 2 Ex. C.R. 552, 1968 CarswellNat 32 (WLNext Can.), the trademark of another is merely being used to compareone’s own goods or services to those of others, then this will not constitute trademark use. In Compagnie Générale des ÉtablissementsMichelin—Michelin & Cie v.

National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), (FC), [1997] 2 F.C. 306, (1996), 71 C.P.R. (3d) 348, 1996 CarswellNat 2297 (WLNext Can.) (T.D.) (Michelin),Justice Teitelbaum stated [at paragraph 26]: I am satisfied that the classic Clairol analysis of use under

section 20 is still good law. The test for “use” in

section 20 requires twoseparate elements of proof from both

section 2 and

section 4. In effect, the first element taken from

section 4 is: (1) did the defendantsassociate their services with the plaintiff’s trade-marks? The second element from

section 2 is: (2) did the defendants use the mark as atrade-mark for the purpose of distinguishing or identifying the defendants’ services in connection with the plaintiff’s wares or services?[Emphasis in original.] [37] Although subsection 20(1) does not explicitly specify that there must be trademark “use”, this requirement is implied by thewording of the provision (Michelin, at paragraphs 19 and 29).

The defendant submits that any “use” of the United Marks onUNTIED.com does not constitute use within the purview of the Trade-marks Act and that the Untied Marks displayed on UNTIED.comare not being used to distinguish the goods or services of the defendant from those of others. [38] The defendant’s intention is not determinative with respect to a finding of trademark use—whether marks or confusingly similarmarks are being used as trademarks depends on the message given to the public. In Tommy Hilfiger Licensing, Inc. v.

InternationalClothiers Inc., 2004 FCA 252, [2005] 1 F.C.R. 148 (International Clothiers), at paragraph 40, the Federal Court of Appeal indicated thatthe crucial question was “whether, irrespective of its intentions, the respondent had used its crest so as to denote the origin of the shirtsand boys’ shorts sets, or used the crest in such a way as to have served the purpose of indicating origin.” [39] With respect to the defendant’s use of the marks as trademarks, I find the reasoning of the Federal Court of Appeal inInternational Clothiers to be persuasive.

In that case, the Court of Appeal considered the similarity of the marks, the placement of themarks on clothing, and the respondent’s awareness that it was common practice to affix a logo to the breast of a sweater or shirt toindicate its source. All of the same considerations apply in this case. Visually, the marks are very similar (with some minor additions tothe marks displayed on UNTIED.com).

In addition, the placement of the Untied Logo and the Frowning Globe Design in the upper lefthand corner of UNTIED.com mirrors that of the placement of the UNITED Mark/United Logo and the Globe Design on the UnitedWebsite (as it then was).

Further, the defendant’s beta website shows the same identical placement of the allegedly infringing marks.Although this was not raised in evidence, I would note that this appears to be a common placement for a website “identifier”. [40] Similar to the respondent in International Clothiers, the defendant was aware that he had placed the Untied Marks in the samelocation as the United Marks were displayed on the United Website.

When giving evidence, the defendant stated, “I decided I could befar more effective in the parody by humorously mimicking the appearance, but with a twist on numerous elements of United’s ownwebsite. And this was reflected, not just in the update of the parodied logo, with the frown over the globe, but also in numerous otherelements within the webpage”. [41] The Untied Logo and the Frowning Globe Design are displayed prominently on UNTIED.com.

In addition, a mark similar to theUNITED AIRLINES Mark is displayed on UNTIED.com—for example, during the relevant time period the bottom left-hand corner ofUNTIED.com stated “Copyright © Untied Air Lines, Inc.”. [42] The marks are therefore being used or displayed in the advertising or performance of services pursuant to subsection 4(2) of theTrade-marks Act. I find the defendant’s display of the Untied Marks constitutes use under paragraph 20(1)(

a) of the Trade-marks Act.

(4) Confusion [43] Subsection 20(1) of the Trade-marks Act protects against a defendant’s use of a plaintiff’s trademarks or confusingly similarmarks. “Confusing” is defined in

section 2 of the Trade-marks Act with reference to

section 6. Subsection 6(2) states: When mark or name confusing 6 … Idem

(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely tolead to the inference that the goods or services associated with those trade-marks are manufactured, sold, leased, hired or performed bythe same person, whether or not the goods or services are of the same general class.

[44] Pursuant to subsection 6(5), the following factors are relevant to a determination of whether marks are confusing: inherentdistinctiveness and the extent to which the marks have become known, length of time the marks have been in use, nature of the goods,services, or business, nature of the trade, and the degree of resemblance between the marks. [45] In determining whether trademarks or trade-names are confusing, the marks should not be scrutinized in detail; rather, theyshould be considered from the perspective of the first impression of the “casual consumer somewhat in a hurry”.

In Veuve ClicquotPonsardin v. Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824 (Veuve Clicquot), the Supreme Court stated [at paragraph 20]: The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot onthe respondents’ storefront or invoice, at a time when he or she has no more than an imperfect recollection of the VEUVE CLICQUOTtrade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities anddifferences between the marks.

As stated by Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., (SCC), [1969] S.C.R. 192, at p. 202: It is no doubt true that if one examines both marks carefully, he will readily distinguish them.

However, this is not the basis on which oneshould decide whether there is any likelihood of confusion. … the marks will not normally be seen side by side and [the Court must] guard against the danger that a person seeing the new markmay think that it is the same as one he has seen before, or even that it is a new or associated mark of the proprietor of the former mark. (Citing in part Halsbury’s Laws of England, 3rd ed., vol. 38, para. 989, at p. 590.) [46] The defendant argued that the Untied Marks on UNTIED.com are not confusingly similar to the United Marks on the UnitedWebsite, and that the plaintiff had not put forward any evidence showing real confusion.

He suggested that the disclaimers and thecontent on UNTIED.com mean that “you’d have to be somebody who is, you know, cognitively challenged … to believe that they’reactually complaining to the airline” through UNTIED.com. (

a) Inherent distinctiveness [47] The trademarks at issue in this case, and particularly the UNITED Mark, are not inherently distinctive. However, the UnitedMarks have acquired distinctiveness due to their long-running and continuous association with the plaintiff in the marketplace.

I amsatisfied that the plaintiff’s large-scale marketing and advertising of air transportation services as well as its operation of thousands ofdaily flights, described in more detail below with respect to goodwill, have created a strong secondary meaning which would tend tocause consumers to associate the UNITED Mark (as well as the UNITED AIRLINES Mark and the Globe Design) with the plaintiff inthe appropriate circumstances. (

b) Length of use [48] The length of time that a mark has been used will influence the distinctiveness of the mark (Mattel, Inc. v. 3894207 Canada Inc.,2006 SCC 22, [2006] 1 S.C.R. 722 (Mattel), at paragraph 77). As noted above, the UNITED and UNITED AIRLINES Marks have beenused by the plaintiff’s predecessor UAL since 1939 and have been registered since 1990. The Globe Design has been registered since1998 and used by the plaintiff’s predecessor Continental since 1995. (

c) Nature of the services [49] The defendant emphasized the disparity between the services offered on the United Website (sale of air transportation) and thoseoffered on UNTIED.com (information and complaint submission). However, competition between goods or services is not a controllingfactor in a confusion analysis: “the general class of wares and services, while relevant, is not controlling” (Mattel, at paragraph 51).Nonetheless, it is an important consideration and, in my view, the nature of the services offered by the parties is similar.

Both theplaintiff and the defendant provide information to prospective travellers as well as post-flight engagement with United customers.Further, as noted by the plaintiff, it is not required that the services be identical or related as the ordinary consumer may perceive them tobe related. [50] It is conceivable that a consumer would perceive the provision of a “complaints database” to be related to the service of customercare (perhaps in an attempt to encourage transparency). This is relevant to the consideration of whether a consumer may perceive theservices as related.

Although the services offered through UNTIED.com are more limited than those offered on the United Website, theyare nonetheless parallel in key areas such as the provision of pre-flight information and the reception of post-flight complaints. (

d) Nature of the trade [51] With respect to the nature of the trade, this factor speaks to the channels of trade and the nature and kind of intended customer(Mattel, at paragraphs 86–87). [52] It is relevant that the services at issue are being offered through the Internet. The character of the market is therefore identical—in both cases, consumers would reach the websites by either typing a domain name into their browsers or searching for the websitesusing terms such as, in the case of Ms. Proietti, “united” and “complaints”. (

e) Resemblance [53] The final factor, resemblance, weighs heavily in favour of confusion. Resemblance is the similarity between two marks, and itallows for some differences between two marks (Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387, atparagraph 62). The defendant admitted that he wanted to maximize the resemblance between his own marks and those of the plaintiff—he wanted visitors to UNTIED.com to “recognize the similarities to the target of my criticism”.

[54] The defendant took a substantial majority of the UNITED Mark and changed it slightly by reversing the order of the T and I. Theprominently displayed Untied Logo displays font, spacing between letters, number of characters, and letters themselves that are the sameas the United Logo (which, of course, contains the UNITED Mark). Cooperstock admitted that he transformed elements of the UnitedLogo when creating the Untied Logo. [55] With respect to the Frowning Globe Design, the defendant took the entirety of the Globe Design and covered it with a frown tocreate the Frowning Globe Design.

The defendant admitted that he was aware that the Globe Design was from the United Website whenhe appropriated it. Prior to 2012, the frown was in the same shade of “United blue” as the background of the design. (

f) Surrounding Circumstances and Conclusion [56] UNTIED.com is clearly designed to evoke the general appearance of the United Website, including the trademarks. In SourcePerrier (Société anonyme) v. Fira-Less Marketing Co. Limited, (FC), [1983] 2 F.C. 18, 70 C.P.R. (2d) 61, 1983CarswellNat 23 (WLNext Can.) (T.D.), Justice Dubé acknowledged that in certain cases a defendant’s use of marks may in fact bedesigned to cause confusion [at pages 22–23]: …. To the eyes of the ordinary purchaser, the “Pierre Eh!” bottle definitely resembles the Perrier bottle.

The size and colour of thebottles, the positioning and colour of the yellow labels on the bottles, the similar typeface of the trade marks, and the similarity inappearance and pronunciation of “Perrier” and “Pierre Eh!”, are not only likely to cause confusion but are obviously meant to causeconfusion. Otherwise, the spoof would not be a spoof.

In such cases of obvious imitation what imports is not the small print but thegeneral appearance of the product. [Emphasis added.] [57] Similarly, in this case, the defendant’s obvious imitation of the United Marks and the United Website is meant to cause visitorsto associate UNTIED.com with the plaintiff.

The small details differentiating the marks are less important than the general appearance ofthe marks and of the websites. [58] In addition, it is important to note that in his testimony, the defendant attempted to differentiate the two Globe Design marks by“zooming in” on the image to show that his mark included a red frown. This would not be the approach of the hurried consumer with animperfect recollection.

Further, consumers would not be engaging in a side-by-side comparison of the two marks, particularly if they areunaware that there is any need to be diligent in this regard (i.e., if they are not aware that a “spoof” website exists). [59] A plaintiff is not required to show actual confusion under paragraph 20(1)(a) (Veuve Clicquot, at paragraph 6). However,evidence of actual confusion will be very weighty. If actual confusion is established, the standard for establishing that marks areconfusingly similar—that is, would the marks likely be confusing—is clearly met. [60] I find the evidence of Ms.

Proietti in particular to be valuable and credible evidence of confusion. Ms. Proietti was clearlyconfused as to the source of the website that she visited and the services she sought: although she submitted a complaint onUNTIED.com, she believed that she was on the United Website.

She also believed that the resulting e-mail from UNTIED.comoriginated with the plaintiff. [61] This evidence shows that the defendant’s use of the United Marks or confusingly similar marks conveys to the public the falseand misleading impression that the services associated with UNTIED.com originate from the same source as the services associated withthe plaintiff’s marks. [62] However, even if the evidence of actual confusion is disregarded, I find that there was ample evidence adduced to support afinding that there is a likelihood of confusion.

The complaints submitted to UNTIED.com show that Canadian consumers submitcomplaints with requests for action and resolution that would only be within the power of a United customer care employee. The plaintiffintroduced a number of these complaints, which had been produced by the defendant as part of his production obligations, into evidence.Several of these examples were of visitors to UNTIED.com who had submitted multiple complaints, with later complaints citing thereference numbers assigned by UNTIED.com and complaining that no action had yet been taken by the plaintiff.

In response, thedefendant introduced a number of complaints into evidence in an attempt to show that the “tone of the complaints” had not changed overtime. By his own admission, these complaints indicated that visitors to UNTIED.com were submitting complaints to the defendant’swebsite which were addressed to the plaintiff and which requested assistance from the plaintiff.

During cross-examination on one suchcomplaint, the defendant himself acknowledged that “clearly this customer is confused”. [63] The defendant relied on the complaints to show that visitors to UNTIED.com have always interacted with his website in the samemanner. The defendant argued that the redesign of the website and the “parodical” marks displayed on UNTIED.com could not be thesource of any alleged confusion, as complaints to UNTIED.com have exhibited the same tone since UNTIED.com was first launched.

Headduced evidence of complaints dated as early as 1998 which were addressed to the plaintiff and which requested relief from theplaintiff. The defendant suggested that complaints “intended to go to the Plaintiff” are received through UNTIED.com becauseUNTIED.com solicits complaints and forwards them to the plaintiff. [64] The defendant was therefore attempting to use this evidence as a shield against the plaintiff’s argument of confusion. However,these complaints are also a “sword” in that they are evidence of at least a likelihood of confusion.

Although the Court does not rely onthese complaints for the truth of their contents, the tone of these complaints points to a likelihood of confusion. This evidence establishesthat the marks on UNTIED.com would likely be recognized by the public as an indication of the source of the website. [65] Further, the unchanged tone of the complaints does not establish that visitors to UNTIED.com were not confused. If it establishesanything, it is that visitors are and have always been confused by the similarity between the domain names www.untied.com andwww.united.com.

Further, the fact that the complaints were forwarded to the plaintiff after being submitted to UNTIED.com does notserve to obviate the confusion experienced by visitors to UNTIED.com and, in fact, this only further establishes that visitors wouldperceive a connection between the plaintiff and UNTIED.com. [66] The defendant argued at trial that the liberal use of disclaimers and distinguishing additions to the marks (e.g., the frown on the

Frowning Globe Design and the reversed T and I on the Untied Logo, both in red) obviated any danger of confusion. Quite apart fromthe question of whether the use of disclaimers is a defence to trademark infringement, this was clearly not the case: the evidence of Ms.Proietti and of the complaints submitted to UNTIED.com showed that visitors to UNTIED.com were or were likely to be confused as tothe source of the website that they were visiting and the services offered through that website. Further, the pop-up dialogue boxdisclaimer was flawed in that it could be disabled and it was not always functional—Ms.

Proietti indicated that she did not see a pop-updialogue box when she visited the website. If the “Do not show this message again” box is selected then subsequent visitors toUNTIED.com from the same computer will not see the pop-up dialogue, and this box has been pre-selected at certain points in time. [67] The defendant put forward an expert on data extraction and analysis, Mr. Hall, who testified that the percentage of complaintsshowing non-redacted MileagePlus numbers had remained relatively static since 1998—this was meant to establish that visitors were notconfused by the redesign of the UNTIED.com website.

I give little weight to the evidence of Mr. Hall. Even if the questions as to thereliability of the data are put aside and Mr. Hall’s conclusions are accepted as accurate, they amount to very little. Mr. Hall’s analysis didnot take into account a number of other personal identifiers that were posted on UNTIED.com, such as addresses and telephone numbers.Based on Mr.

Hall’s evidence, it is impossible to reach any conclusions with respect to whether people were or were likely to beconfused by the redesign of UNTIED.com. [68] As noted above, the defendant intended that UNTIED.com would evoke the United Website and the United Trademarks.Although the defendant’s intent is not determinative in an action under subsection 20(1), “[h]istorically, courts have been slow toconclude that a demonstrated piratical intent has failed to achieve its purpose” (Mattel, at paragraph 90).

While intent is not determinativein that its absence is not a defence to trademark infringement, its presence can be a relevant factor—in this case, the defendant intendedthat visitors to his website would identify his symbols and name with the plaintiff. His efforts serve no other useful purpose. Thechanges that the defendant made to the United Marks were small and were designed to maintain his core purpose: identification of hiswebsite with United. In this case, the defendant sailed too close to the wind—and he was put up on the rocks.

(5) Authorization [69] There was no disagreement that the defendant was not authorized to use the plaintiff’s registered marks.

(6) Conclusion on paragraph 20(1)(a) [70] Based on the analysis above, the defendant’s use of confusingly similar marks in association with pre-flight and post-flightcustomer service constitutes infringement of the plaintiff’s registered trademarks contrary to paragraph 20(1)(a). B. Passing Off [71] The plaintiff argues that the defendant’s actions are contrary to paragraphs 7(

b) and 7(

c) of the Trade-marks Act: Prohibitions 7 No person shall … (

b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at thetime he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another; (

c) pass off other goods or services as and for those ordered or requested. [72] The statutory and common law causes of action for “passing off” both require three elements: “the existence of goodwill,deception of the public due to a misrepresentation and actual or potential damage to the plaintiff” (Ciba-Geigy Canada Ltd. v. ApotexInc., (SCC), [1992] 3 S.C.R. 120, 1992 CarswellOnt 1007 (WLNext Can.) (Ciba-Geigy), at paragraph 33 [page 132]).

(1) Goodwill or Reputation [73] Goodwill was described in Veuve Clicquot as “the positive association that attracts customers towards its owner’s wares orservices rather than those of its competitors” (paragraph 50).

In Ciba-Geigy, the Supreme Court indicated to succeed in an action forpassing off, a plaintiff must show that its product has acquired a secondary meaning (paragraph 36 [page 133]). [74] In Veuve Clicquot, the Supreme Court laid out factors for determining the existence of goodwill as follows [at paragraph 54]: While “fame” is not a requirement of s. 22, a court required to determine the existence of goodwill capable of depreciation by a “non-confusing” use (as here) will want to take that approach into consideration, as well as more general factors such as the degree ofrecognition of the mark within the relevant universe of consumers, the volume of sales and the depth of market penetration of productsassociated with the claimant’s mark, the extent and duration of advertising and publicity accorded the claimant’s mark, the geographicreach of the claimant’s mark, its degree of inherent or acquired distinctiveness, whether products associated with the claimant’s mark areconfined to a narrow or specialized channel of trade, or move in multiple channels, and the extent to which the mark is identified with aparticular quality.

See generally F.W. Mostert, Famous and Well-Known Marks: An International Analysis (1997), at pp. 11-15; INTA,Protection of Well-Known Marks in the European Union, Canada and the Middle East (October 2004). [75] Consideration of these general factors indicates that the United Marks have a large and significant amount of goodwill attachedto them.

Goodwill or reputation may be shown through, among other things, acquired distinctiveness, length of use (the plaintiff has beenusing the trademarks at issue since 1939 and 1995), sales (United had over $37 billion USD in operating revenue in 2015), advertisingand marketing (illustrated by the plaintiff’s advertising campaigns and branding efforts), and intentional copying. These elements weredescribed in more detail above with regard to the factors in the analysis under subsection 6(5) of the Trade-marks Act.

[76] The plaintiff operates around 200 flights per day in Canada, carrying around 11 000 passengers. Globally, it operates over 4 500daily flights carrying around 375 000 passengers. It devotes significant resources to its branding strategy and carefully controls theconsumer experience of its branded spaces, including the colours used, the spacing between marks (and between letters), the symbolsused, the type of font used, and the placement of its trademarks and colours.

It has an extensive advertising strategy, deployingadvertisements in Canadian airports and in publications that showcase the United Trademarks and the plaintiff’s offerings. For 2015, theplaintiff listed the value of its goodwill as $4.5 billion USD in its Form 10-K annual report, including $593 million USD for tradenamesand logos. [77] The plaintiff put forward an expert, Mr. Buffo, to provide evidence on the existence of goodwill. I find that this evidence doesnot contribute a great deal to a finding of the presence of goodwill. I was troubled by the fact that Mr.

Buffo acknowledged that it wasimportant to solicit the input of customers, and yet he did not attempt to do this (or to explain his failure to do this) in his Expert Report.He relied on “studies”, but could not recall how those “studies” chose their lists of most admired companies (even though he claimed thatthey did “detailed analysis”). I also found his responses during cross-examination to be evasive.

However, I do give some weight to hisacknowledgement that branding and advertising takes on an additional importance in the case of undifferentiated products such as flightsor hotel accommodations. [78] I am satisfied that there is significant goodwill attached to the plaintiff’s trademarks, and I reject the defendant’s contention thatthe evidence put forward was insufficient to establish the presence of goodwill.

(2) Deception of the Public due to Misrepresentation [79] In Mattel, the Supreme Court indicated that the misrepresentation aspect of the second requirement is in relation to the source ofthe goods or services: in the context of that case, “[i]n an action for passing off, it would have been necessary for the appellant to showthat the respondent restauranteur intentionally or negligently misled consumers into believing its restaurant services originated with theappellant and that the appellant thereby suffered damage” (paragraph 27).

There is no requirement that the misrepresentation be wilful. [80] The list of ways in which a defendant may mispresent its goods or services is not closed. A common form of misrepresentation iswhere a defendant uses an imitation of a symbol, trademark, or get-up associated with a plaintiff; this is the manner of misrepresentationin this case, which has the impact of causing confusion in the public as to the source of the services available through UNTIED.com. [81] In Asbjorn Horgard A/S v.

Gibbs/Nortac Industries Ltd., (FCA), [1987] 3 F.C. 544 [abridged], (1987), 14C.P.R. (3d) 314, 1987 CarswellNat 643 (WLNext Can.) (C.A.) (Asbjorn), at paragraph 44 [cited to CarswellNat] [pages 331–333 ofC.P.R.], the Federal Court of Appeal indicated that confusion can be assessed by looking to the factors in subsection 6(5) of the Trade-marks Act. This likelihood of confusion must be established as of the time that the defendant commenced directing attention to its wares,services, or business (Asbjorn, at paragraph 40 [page 330 of C.P.R.]). [82] The defendant argued that if Ms.

Proietti’s testimony is the only evidence of confusion, then there is no confusion. However, theplaintiff is not required to show that a majority of customers are confused. In Canada Post Corp. v. Paxton Developments Inc. (2000), (FC), 198 F.T.R. 72, 9 C.P.R. (4th) 429, 2000 CarswellNat 3003 (WLNext Can.) (T.D.), at paragraph 12, in thecontext of trademark opposition, Justice Pelletier indicated that “[i]t is sufficient that a substantial number of consumers, more thanenough to pass any de minimis threshold but less than a majority, be confused or be likely to be confused”.

Further, the evidence ofconfusion, discussed in more detail above, was not limited to the testimony of Ms. Proietti, although that evidence carried significantweight. [83] As parody and satire are not defences to trademark infringement, the addition of the frown to the Frowning Globe Design onUNTIED.com does not avoid trademark infringement or passing off (Source Perrier, at paragraph 20 [page 26]). In Green v.

Schwarz(1986) 12 C.P.R. (3d) 84, 1 A.C.W.S. (3d) 401, 1986 CarswellOnt 877 (WLNext Can.), the Ontario High Court of Justice foundconfusion in a case wherein the defendant was attempting to “spoof” the plaintiff’s trademark [at paragraphs 4–5]: …. True enough, on closer examination, one can see that there is an element of the spoof or the humorous take-off of the plaintiff’s trademark in the words and figure appearing on the defendant’s product.

I am satisfied that notwithstanding that the defendant is obviously spoofing the plaintiff’s trade mark he is also cashing in on thegoodwill that the plaintiff has obtained for its trade mark.

I am satisfied that based upon many years in trade the plaintiff has hadattached in the public perception to the word “Roots” in its stylistic configuration associated with the depiction of a beaver, a significantmeasure of goodwill. [84] As discussed above, a review of the factors in subsection 6(5) of the Trade-marks Act demonstrates that there was confusion andthe likelihood of confusion in this case. [85] Therefore, I find that the defendant misled visitors to UNTIED.com as to the source of the services available on that website.

(3) Damages [86] In Ciba-Geigy, the Supreme Court indicated that proof of damages encompasses actual or potential damages (paragraph 33 [page132]). However, damages cannot simply be presumed; there must be some evidence of “proof of actual damage or the likelihood ofdamage” (Remo Imports Ltd. v. Jaguar Cars Ltd., 2007 FCA 258, [2008] 2 F.C.R. 132, at paragraph 90). There is no limit on the types ofdamages that may be considered under this element. Loss of control over a mark, for example, may constitute damage.

Further, somecases have suggested that the likelihood of confusion will lead inexorably to a finding of the probability of damage (see, for example,Noshery Ltd. v. Penthouse Motor Inn Ltd. (1969), 61 C.P.R. 207, 1969 CarswellOnt 44 (WLNext Can.) (S.C.), at paragraph 25). [87] The plaintiff relied heavily on the link between the likelihood of confusion and the probability of damages. However, theplaintiff also identified the depreciation of goodwill as a harm that it has suffered. It also argued that the barrier UNTIED.com createdbetween the plaintiff and its customers was harmful. In addition, Mr.

Buffo indicated that if a customer was confused and mistakenly

posted a complaint to UNTIED.com, then this was a lost opportunity for the plaintiff to resolve the complaint and turn an unfavourableexperience into a memorable one. Further, damages may occur in the form of “tarnishing” the plaintiff’s brand (discussed further below). [88] In my view, the evidence establishes that the plaintiff has suffered damages or is likely to suffer potential damages.

(4) Conclusion on paragraphs 7(

b) and 7(c) [89] Therefore, for all of these reasons, I find that the defendant has acted contrary to paragraphs 7(

b) and 7(

c) of the Trade-marksAct. C. Depreciation of Goodwill [90] There are four elements to consider in the analysis of the depreciation of goodwill pursuant to

section 22 of the Trade-marks Act:the use of a plaintiff’s registered trademark by a defendant in connection with wares or services, the presence of goodwill attached to thetrademark, the plaintiff’s trademark was used in such a way as to have a likely effect on that goodwill (i.e., linkage), and the likelyimpact would be to depreciate the value of the goodwill (i.e., damage) (Veuve Clicquot, at paragraph 46).

(1) Use [91] As discussed in detail above, the defendant has made use of the plaintiff’s registered trademarks on UNTIED.com.

(2) Goodwill [92] As discussed in detail above, there is goodwill in the United Marks.

(3) Effect/Linkage [93] The third requirement, linkage, is assessed from the perspective of a somewhat-hurried consumer; for example, in the case ofVeuve Clicquot, “[i]f the somewhat-hurried consumer does not associate what is displayed in the respondents’ stores with the mark of thevenerable champagne maker, there can be no impact—positive or negative—on the goodwill attached to VEUVE CLICQUOT”(paragraph 56). This is not a speculative exercise and evidence must be produced to show that the trademarks in question were used insuch a way as to have an impact on goodwill. [94] Confusion is not a required element of

section 22. However, in my view, the evidence of confusion put forward in this caseestablishes that customers would be likely to “associate” the marks on the United Website and the marks on UNTIED.com. As discussedabove, the evidence of Ms. Proietti was that she associated the marks on UNTIED.com with United—in fact, she believed that she wason the United Website when she was actually on UNTIED.com. [95] In Future Shop Ltd. v A. & B.

Sound Ltd. (1994), (BC SC), 93 B.C.L.R. (2d) 40, 55 C.P.R. (3d) 182, 1994CarswellBC 267 (WLNext Can.), the British Columbia Supreme Court stated [at paragraph 12]: The question, depending on the evidence in any particular case, is whether the use of the competitor’s trademark is for a purpose whichstresses the similarities or the differences with the trademarked competition. If the purpose is to stress the similarities, the value of thegoodwill associated with the trademark is appropriated in a manner contrary to the intent of s. 22.

If use stresses the differences with thetrademark, then the use is for the purpose of distancing the trademarked ware or service and s. 22 is not offended. [96] It is clear that the defendant intended to stress the similarities between the United Marks and his own. In his testimony, heindicated that he “transformed elements of United’s logo and I made changes to it … I would say that my purpose was to identify thetarget of my criticism as that of United”.

The defendant therefore appropriated the goodwill associated with the United Marks. [97] In my view, the somewhat-hurried consumer would be likely to associate the marks displayed on the defendant’s website withthe plaintiff’s registered trademarks.

(4) Depreciation [98] The final requirement, likelihood of depreciation, was described in Veuve Clicquot [at paragraphs 63 and 67] thus: The word “depreciate” is used in its ordinary dictionary meaning of “lower the value of” as well as to “disparage, belittle, underrate”:New Shorter Oxford English Dictionary (5th ed. 2002), at p. 647.

In other words, disparagement is a possible source of depreciation, butthe value can be lowered in other ways, as by the lesser distinctiveness that results when a mark is bandied about by different users.Although the appellant makes much of the licencing provisions in the Act, the fact is that a trade-mark owner can depreciate its value byspreading the mark too thinly over too many products of differing quality. … These references to U.S. cases are made for the purpose of illustration.

Our Act is differently worded and I do not suggest that theconcept of “depreciation” in s. 22 is necessarily limited to the notions of blurring and tarnishment. Canadian courts have not yet had anopportunity to explore its limits. Nevertheless, the key question remains. Acknowledging that the VEUVE CLICQUOT trade-markcarries an aura beyond its particular products, and that the extended aura carries significant goodwill, in what way is the value of thatgoodwill likely to be diminished by the respondents’ “use” (if use there be) of the appellant’s registered trade-mark?

Acceptance of theargument that depreciation could occur, is not acceptance of the assertion that on the facts of this case depreciation is likely to occur, stillless that depreciation did occur. The appellant need only prove likelihood but there is nothing in the evidentiary record from whichlikelihood could be inferred. [Emphasis in original.] [99] The defendant’s position at trial was that any depreciation of goodwill caused by UNTIED.com was not attached to the attractive

force of the United Marks, but rather to the plaintiff’s business reputation. He argued that it was “ludicrous” to suggest that the plaintiff has experienced depreciation of goodwill due to his actions, and argued that the evidence of goodwill adduced did not establish that there was goodwill associated with the plaintiff’s logo, its name, or its image. [ 100 ] In my view, the plaintiff has established that there is a likelihood of depreciation of goodwill.

The defendant reproduces and disparages the plaintiff’s registered trademarks on UNTIED.com, as shown by the “frown” on the Globe Design (and the “angry eyes” on the Globe Design on the beta website). Further, the crudeness of UNTIED.com is likely to depreciate the goodwill of United’s marks. In Thoi Bao Inc. v. 1913075 Ontario Limited (Vo Media) , 2016 FC 1339 , 2016 CarswellNat 10491, at paragraph 38 , Justice McDonald found, similarly, that “Mr.

Vo used the THOI BAO’s trade-mark for the name of a website of inferior quality, which projects an unprofessional character which is therefore likely to depreciate the value of the goodwill attached to TB Inc.’s trade-mark.” The unprofessional nature of the defendant’s website similarly tarnishes the goodwill attached to United’s trademarks. [ 101 ] Further, the defendant’s use of marks confusingly similar to the United Marks decreases the distinctiveness of the United Marks.

The similarities between the United Marks and the Untied Marks is likely to confuse some members of the public and may discourage others from continuing their search for the plaintiff’s customer service website due to anger, frustration, or the mistaken belief that the plaintiff does not have a “complaints” page.

(5) Conclusion [ 102 ] Therefore, I find that the defendant has intentionally attempted to attract the plaintiff’s online consumers to his own website for notoriety. In doing so, he has depreciated the value of goodwill attached to the United Trademarks contrary to

section 22 of the Trade- marks Act . D. Copyright Infringement

(1) Infringement [ 103 ] In a copyright infringement claim, the plaintiff must establish that its copyrighted work is original, that the defendant has copied from that work, and that a substantial portion of the work has been reproduced. The first of these elements have clearly been met in this case: the defendant admitted that the development of a website design would require skill and judgment, and the United Website is therefore “original” within the meaning of the Copyright Act . Similarly, it would have required skill and judgment to create the Globe Design and the United Logo.

With respect to the second element, the defendant admitted that he knew the Globe Design originated from the United Website and that the design of UNTIED.com was intended to humorously “mimic” that of the United Website. There would be no other purpose for the use of similar colours, fonts, layout, and other elements of the United Website on UNTIED.com. [ 104 ] Finally, in order to constitute copyright infringement, the infringer must have produced or reproduced a “substantial part” of the copyrighted material.

This phrase is not defined in the Copyright Act , but in Michelin the Court emphasized that this is a question of quality rather than simply one of quantity (paragraph 54). In Warman v. Fournier , 2012 FC 803 , 104 C.P.R. (4th) 21, Justice Rennie stated [at paragraph 23]: …. Whether a substantial part of a work has been reproduced is a question of fact and involves a qualitative rather than quantitative analysis.

The relevant factors to be considered include: a. the quality and quantity of the material taken; b. the extent to which the respondent’s use adversely affects the applicant’s activities and diminishes the value of the applicant’s copyright; c. whether the material taken is the proper subject-matter of a copyright; d. whether the respondent intentionally appropriated the applicant’s work to save time and effort; and e. whether the material taken is used in the same or a similar fashion as the applicant’s: U & R Tax Services Ltd v H & R Block Canada Inc , [1995] FCJ No 962, at para 35 . [ 105 ] In this case, it is clear that substantial copying has taken place.

The defendant has reproduced the entirety of the United Logo and the Globe Design, with some small additions or changes, and he also admits that the overall layout of the two websites is similar.

(2) Fair Dealing [ 106 ] In CCH Canadian Ltd. v. Law Society of Upper Canada , 2004 SCC 13 , [2004] 1 S.C.R. 339 ( CCH ), the Supreme Court of Canada laid out a two-step test for determining whether use of copyrighted material comes within the fair dealing exception: firstly, the defendant must show that the dealing is for an allowable purpose (limited, at the time, to research or private study), and, secondly, the defendant must show that the dealing is fair. [ 107 ] More recently, in Society of Composers, Authors and Music Publishers of Canada v.

Bell Canada , 2012 SCC 36 , [2012] 2 S.C.R. 326 ( Socan ), the Court affirmed that the provision for fair dealing should not be interpreted restrictively, and stated that “ CCH confirmed that users’ rights are an essential part of furthering the public interest objectives of the Copyright Act ” (paragraph 11). [ 108 ] The Supreme Court noted that the American approach and American jurisprudence cannot automatically be imported into the Canadian context given the differences between “fair dealing” in Canada and “fair use” in the United States, because “[u]nlike the American approach of proceeding straight to the fairness assessment, we do not engage in the fairness analysis in Canada until we are satisfied that the dealing is for one of the allowable purposes enumerated in the Copyright Act ” ( Socan , at paragraph 26).

(

a) Is the dealing for an allowable purpose? [109] Parody is now an allowable purpose under

section 29 of the Copyright Act, which states: Research, private study, etc. 29 Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright. [110] However, the legislation is silent as to the content, meaning, or scope of “parody”.

Therefore, the words of the legislation must be“read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act,and the intention of Parliament” (Elmer Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at page 87, cited inRizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, at paragraph 21). [111] In CCH, the Court commented on the purpose of the fair dealing provisions within the Copyright Act, emphasizing theimportance of balance between the rights of creators or authors and those of users [at paragraph 48]: Before reviewing the scope of the fair dealing exception under the Copyright Act, it is important to clarify some general considerationsabout exceptions to copyright infringement.

Procedurally, a defendant is required to prove that his or her dealing with a work has beenfair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply adefence. Any act falling within the fair dealing exception will not be an infringement of copyright. The fair dealing exception, like otherexceptions in the Copyright Act, is a user’s right. In order to maintain the proper balance between the rights of a copyright owner andusers’ interests, it must not be interpreted restrictively.

As Professor Vaver, supra, has explained, at p. 171: “User rights are not justloopholes.

Both owner rights and user rights should therefore be given the fair and balanced reading that befits remedial legislation.” [112] The Concise Canadian Oxford Dictionary defines “parody” thus: … 1 a humorous exaggerated imitation of an author, literary work, style, etc., esp. for purposes of ridicule. b a work of this kind. 2 athing done so badly that it seems to be an intentional mockery of what it should be; a travesty. 3 a comic or satirical imitation of aperson, event, etc. … (Katherine Barber, ed., Concise Canadian Oxford Dictionary. 2nd ed. (Don Mills, Ont.: Oxford

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