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Friendship Enterprises Memorandum - 1999

Note: No Allegations have been proven in Court
Court File No. T-1163-99
FEDERAL COURT TRIAL DIVISION

BETWEEN

TORONTO.COM
Plaintiff
AND

RITCHIE SINCLAIR AND GARTH COLE
Doing business as
FRIENDSHIP ENTERPRISES
Defendants
MEMORANDUM OF FACTS AND LAW

PART I - STATEMENT OF FACTS

The Plaintiff's Allegations
1. The plaintiff makes two primary allegations:

    A. That the defendant has breached the copyright of the plaintiff's web site by linking and framing to it, in violation of the Copyright Act.

    B. That the defendants operate a web site that displays and offers wares and services that are identical to the plaintiff's in association with an Internet address and web site name that is similar to the plaintiff's, in violation of section 7(b) and (c) of the Trade-marks Act. The defendant has thereby passed off its web site for that of the plaintiff's.

Statement of Claim, Motion Record, Vol. I, Tab 4
The Parties
2. Although some uncertainty exists as to which corporations form the partnership, known as toronto.com, the plaintiff appears to be a partnership of three large corporations; Bell Actimedia Inc. (formerly Tele-Direct, the publisher of the Yellow Pages), Citysearch Canada Inc., and either Metroland Printing, Publishing & Distribution Ltd. ("Metroland"), or Torstar Corporation.
    Affidavit of George Jewell, Paras. 4 and 7, Motion Record Vol. I, Tab 2
    Cross-exam. of George Jewell, Q.'s 33-38, 194, Responding Motion Record, Tab 3
3. The defendants are individuals who carry on "business" under the name "Friendship Enterprise", out of Garth Cole's apartment. The defendant, Ritchie Sinclair is an artist. The defendant, Garth Cole works for the City of Toronto.
    Responding Affidavit of Ritchie Sinclair, Paras. 3, 60
    Cross-exam. of Ritchie Sinclair, Q. 39, Motion Record, Vol. III, Tab 2
The Evidence
4. In support of its motion for an interlocutory injunction, the plaintiff filed an Affidavit of George Jewell, sworn July 30, 1999, an Affidavit of Jeff MacPherson, sworn July 29, 1999, and a Reply Affidavit of George Jewell, sworn September 29,1999.
    Affidavit of George Jewell, Motion Record, Vol. I
    Affidavit of Jeff MacPherson, Motion Record, Vol. I
    Reply Affidavit of George Jewell, Motion Record Vol. II
5. George Jewell, who swore the vast majority of evidence filed on behalf of the plaintiff, and upon which the plaintiff substantially relies, has admitted that he is unqualified to tender any of his evidence which relates to general technological aspects of the Internet, to general business analysis, and to questions of law. The plaintiff has not filed any evidence by an expert in any of the fields that it purports to give evidence in relation to.
Cross-exam. of George Jewell, Q.'s 7-32, 189-192, 251-252, Responding Motion Record, Tab 3 6. As Exhibits to his Affidavit, George Jewell purports to file survey evidence of "customer loyalty", but does not provide any meaningful explanation of how these statistics were arrived at. Cross-exam. of George Jewell, Q.'s 174-188, Responding Motion Record, Tab 3


7. The plaintiff has not filed any evidence demonstrating that it is well known in Canada, such as polls.

Affidavit of George Jewell, Motion Record, Vol. I
Affidavit of Jeff MacPherson, Motion Record, Vol. I
Reply Affidavit of George Jewell, Motion Record Vol. II
toronto.com

8. The plaintiff's web site is located at the Internet address of http://www.toronto.com and is called "toronto.com", all is smaller case letters. The defendants' web site is located at the Internet address of http://www.Toronto2.com and is called "Toronto2", beginning with a capital "T" and ending with the number "2". Both web site addresses have been registered with Network Solutions Inc..

Responding Affidavit of Ritchie Sinclair, Para. 20
Cross-exam. of George Jewell, Q.'s 33-38, 50-Q. 66 and 256-263, Responding Motion Record, Tab 3
Affidavit of George Jewell, Paras. 35 and 9, Motion Record Vol. I, Tab 2
9. The plaintiff enjoys a substantial number of visits to its web site, likely in the 5-figure range, but has not provided any actual verification for this. The defendant on the other hand, has enjoyed only a modest number of visits to its site. Responding Affidavit of Ritchie Sinclair, Para. 68, and Exhibit "I" thereto
Cross-exam. of George Jewell, Q.'s 99-105, Responding Motion Record, Tab 3
Affidavit of George Jewell, Paras. 14, Motion Record Vol. I, Tab 2
10. Both web site are programmed to display their respective exact Internet addresses so as to enable a viewer to identify the particular site that he or she is visiting. Responding Affidavit of Ritchie Sinclair, Para. 7
Cross-exam. of George Jewell, Q.'s 307-308, Responding Motion Record, Tab 3
11. Visitors looking for a site about Toronto or looking specifically for toronto.com may locate it by typing in the words, www.toronto.com into their web browser. Cross-exam. of George Jewell, Q.'s 94-97, Responding Motion Record, Tab 3 12. In or about September, 1997, Metroland, Citysearch Canada Inc., Torstar Corporation, and CitySearch Inc. commenced the operation of a web site called, "Toronto Star City Search". Affidavit of George Jewell, Paras. 7, Motion Record Vol. I, Tab 2 13. These aforementioned corporations then reorganized to form the plaintiff partnership, and purchased a new name for their web site: toronto.com. The limited use of toronto.com commenced in January of 1998, however it was not until at least March 30, 1998 that the plaintiff actually commenced the operation of a web site located at and called, toronto.com. Affidavit of George Jewell, Paras. 7-12, Motion Record Vol. I, Tab 2
Cross-exam. of George Jewell, Q.'s 86-92 and Q. 107, Responding Motion Record,
Tab 3
14. The plaintiff has refused to provide any documentation evidencing its actual title to the Internet address, http://www.toronto.com, other than the registration with Network Solutions. Cross-exam. of George Jewell, Q.'s 108-110, Responding Motion Record, Tab 3 15. One of the benefits for the plaintiff in using this new name, toronto.com, was

that it described the nature of its wares and services as relating to the City of Toronto and originating from the City of Toronto. The plaintiff's place of business is in the City of Toronto and its web site consists of a guide and directory to goods, services, and attractions in the City of Toronto.

Affidavit of George Jewell, Paras. 4 and 7, Motion Record Vol. I, Tab 2 Cross-exam. of George Jewell, Q.'s 75, 86-92, 107, 332-333, Responding Motion Record, Tab 3 16. Despite its name, toronto.com is not affiliated with the City of Toronto. Cross-exam. of George Jewell, Q. 372, Responding Motion Record, Tab 3 17. The plaintiff web site is a commercial enterprise and finances itself through substantial advertising revenues. The plaintiff's web site is predominantly in the nature of a guide and directory to goods and services in the City of Toronto. Cross-exam. of George Jewell, Q.'s 72-85, Responding Motion Record, Tab 3 Affidavit of George Jewell, Para. 13, and Exhibit "C", thereto, Motion Record Vol. I, Tab 2 Toronto2
18. The Internet address, http://www.Toronto2.com was registered with Network Solutions on or about February 28, 1999 and went on-line in or about April, 1999. The web site was connected to the Internet in order to facilitate the design process, not to attract visitors or to be open to the public. Responding Affidavit of Ritchie Sinclair, Paras. 16-18 19. Prior to June 29, 1999, the Toronto2 web site displayed a Notice that clearly indicated that the web site was not open to the public and was currently under construction until June 29, 1999. The within lawsuit was commenced on or about June 24, 1999. Responding Affidavit of Ritchie Sinclair, Paras. 17
Cross-exam. of Jeff MacPherson, Q. 44-47, Responding Motion Record, Tab 2
Cross-exam. of George Jewell, Q.'s 235-236, Responding Motion Record, Tab 3
Statement of Claim, Motion Record Vol. I, Tab 4
20. The defendants' web site address and web site name were selected by the defendants with the intention of honestly describing their web site as a 'second' or 'parallel' community of Toronto in cyberspace. There is no evidence of an intention of picking a name and address that would mislead the public into thinking that the defendants' web site was actually the plaintiff's web site. Responding Affidavit of Ritchie Sinclair, Paras. 41, 42, 44
Cross-exam. of George Jewell, Q.'s 279-282, Responding Motion Record, Tab 3
21. The Toronto2 web site currently offers free electronic mail services, free communication forums, and free web site building and hosting for individuals. The plaintiff web site does not offer any of these services but instead offers a guide and directory to the City of Toronto. Responding Affidavit of Ritchie Sinclair, Paras. 25-28
Cross-exam. of Ritchie Sinclair, Q. 's 395, 397, 400, Motion Record, Vol. III, Tab 2 Cross-exam. of George Jewell, Q.'s 394-395 and 384-387, Responding Motion Record, Tab 3
22. It is readily admitted by the defendants, that a fraction of the Toronto2 web site contains a list of places to go and things to see within the City of Toronto. This was included in Toronto2 not as a primary attraction, but because it could be of ancillary interest to people visiting the web site for its other, primary services. In any event, the plaintiff is not claiming the exclusive right to operate a guide and directory to the City of Toronto. Responding Affidavit of Ritchie Sinclair, Paras. 6-13 and Exhibit "D" thereto,
Cross-exam. of George Jewell, Q.'s 253-255, Responding Motion Record, Tab 3
23. There are many web sites that are primarily in the nature of a guide and directory to the City of Toronto and most of these web sites use the word "Toronto" both in their Internet address and in their name, itself. One of these web sites is called "4Toronto", and is located at http://www.4Toronto.com. According to the plaintiff, "4Toronto" is sufficiently different from toronto.com. Responding Affidavit of Ritchie Sinclair, Paras. 43--52 and Exhibit "J"-"R" thereto
Cross-exam. of George Jewell, Q.'s 226-229 and 340-342,
Responding Motion Record, Tab 3
Reply Affidavit of George Jewell, Para. 29, Motion Record Vol. II, Tab 2
24. There are at least one-thousand and eighteen (1018) registered Internet addresses that all feature the word, "Toronto". Responding Affidavit of Ritchie Sinclair, Paras. 39 and Exhibit "G" and "H" thereto 25. There are no visual or graphical similarities between toronto.com and Toronto2. Responding Affidavit of Ritchie Sinclair, Exhibits "B" and "D" thereto,
Cross-exam. of Jeff MacPherson, Q. 44-47, Responding Motion Record, Tab 2
26. Aside from the very different content and get-up of the two respective web sites, there also exists a significant difference in their respective natures and purposes. The plaintiff's web site is a strictly commercial enterprise which intends to make a profit, whereas the defendants' web site is intended to be a not-for-profit enterprise and is more concerned with community service. Responding Affidavit of Ritchie Sinclair, Paras. 31-33, and Exhibits "D" and "E" thereto
Cross-exam. of Ritchie Sinclair, Q. 's 399 and 476 , Motion Record, Vol. III, Tab 2 Cross-exam. of George Jewell, Q.'s 390, Responding Motion Record, Tab 3
27. The entirety of the Toronto2 site has not yet been fully implemented, in part as a result of the within action consuming the defendants' time. Responding Affidavit of Ritchie Sinclair, Paras. 18, 25-28, 69
Cross-exam. of Ritchie Sinclair, Q. 's 394-413, 457, 484, Motion Record, Vol. III, Tab 2
28. The defendants have not engaged in advertising or promotion in respect of their web site, nor have they otherwise directed public attention to their web site other than by existing on the Internet. Responding Affidavit of Ritchie Sinclair, Paras. 18
Cross-exam. of George Jewell, Q.'s 275-278, Responding Motion Record, Tab 3
29. The plaintiff has no evidence of any of its advertising customers being confused between toronto.com and Toronto2. The plaintiff has no evidence of losing a single advertiser as a result of any confusion between toronto.com and Toronto. Cross-exam. of George Jewell, Q.'s 230-232 and 287-289, Responding Motion Record, Tab 3 30. The plaintiff has no evidence of losing any consumers of its web site as a result of any confusion between toronto.com and Toronto2. Cross-exam. of George Jewell, Q.'s 285-287, Responding Motion Record, Tab 3 31. The plaintiff has not had to lower its advertising rates nor has suffered any loss of revenue as a result of any confusion between toronto.com and Toronto2. Cross-exam. of George Jewell, Q. 291, Responding Motion Record, Tab 3 32. The plaintiff has no evidence of the defendants actions, either directly or indirectly, serving to encourage others to offer variations of the plaintiff's "brand" or service. Cross-exam. of George Jewell, Q.'s 293-294, Responding Motion Record, Tab 3 33. All of the plaintiff's allegations regarding the likelihood of confusion and resulting harm are pure speculation. Cross-exam. of George Jewell, Q.'s 294-295, 325, Responding Motion Record, Tab 3 34. The plaintiff has alleged that it has acquired a valuable reputation and goodwill in association with its "trade-marks" in Canada and further alleges that by the defendants' actions, they have caused confusion in Canada. Statement of Claim, Para. 11, 19, Motion Record Vol. I, Tab 4
Affidavit of George Jewell, Paras. 37-38, Motion Record Vol. I, Tab 1
35. The fact is that the entirety of the plaintiff's reputation, if any, is limited to the Toronto area, and does not exist in the rest of Canada. Affidavit of George Jewell, Para. 19, Motion Record Vol. I, Tab 1
Cross-exam. of George Jewell, Q. 166-173, Responding Motion Record, Tab 3
36. The plaintiff applied for registration of "TORONTO.COM" and "TORONTO.COM ALLYOU NEED TO KNOW ABOUT T.O." (in upper case) as trademarks with the Canadian Intellectual Property Office on or about October 14, 1998. Pursuant to the Examiner's Reports received by the plaintiff, on or about June 1, 1999, the aforementioned marks were "likely not registrable" as trademarks due, at least in part, to their descriptive nature. Responding Affidavit of Ritchie Sinclair, Paras. 55-57 and Exhibit "S" thereto, 37. The plaintiff has refused to advise whether they have responded to the Examiner's Reports and may have very well abandoned their Applications, realizing that their marks are not trade-marks. Cross-Exam. of George Jewell, Q.'s 356-357, Responding Motion Record, Tab 3 38. The plaintiff commenced the within proceedings against the defendants on or about June 24, 1999. The plaintiff in part, sought a Declaration as to its ownership of its "trade-marks". Responding Affidavit of Ritchie Sinclair, Paras. 57 39. The plaintiff did not allege in its Statement of Claim, that the words toronto.com, had acquired a secondary meaning. Prodded by the Defendant's Amended Statement of Defense, the plaintiff did eventually allege this. Nevertheless, no evidence has been filed to substantiate this allegation. Statement of Claim, Motion Record Vol. I, Tab 4
Amended Statement of Defense, Responding Motion Record, Tab 6
Reply to Amended Statement of Defense, Responding Motion Record, Tab 6
Cross-exam. of George Jewell, Q. 336-337
The Allegation of "Copyright Infringement"
40. The plaintiff has alleged that the defendants reproduced portions of their web site without the plaintiff's permission and further alleges that this constitutes a violation of the Copyright Act. Statement of Claim, Paras.1(b) and (d), 21-24, Motion Record Vol. I, Tab 4
Notice of Motion, Paras. 7, 9, and 12, Motion Record Vol. I, Tab 1
41. This alleged "infringement" is limited to three (3) so-called "links" and (3) so-called "frames" which existed in a section of the defendants' web site. The links are not particularized by the plaintiff, but the "frames" are of pages that relate to Casa Loma, the Bata Shoe Museum, and the Eaton Centre. These attractions may not even be aware that the plaintiff has a web site about them.
Statement of Claim, Motion Record Vol. I, Tab 4
Affidavit of George Jewell, Para. 20-26, thereto, Motion Record Vol. I, Tab 2
Cross-exam. of George Jewell, Q.'s 155-156, Responding Motion Record Tab 3
42. The plaintiff has alleged that they own the copyright to these pages as a result of an assignment by their employees and also by independent contractors. Statement of Claim, Para. 12, Motion Record Vol. I, Tab 4 43. The plaintiff has not provided evidence of any written assignments of copyright in respect of these pages, and has in fact refused to do so. Cross-exam. of George Jewell, Q.'s 157 and 407, Responding Motion Record, Tab 3 44. Despite its allegation of "reproduction", the plaintiff now admits that it doesn't know if the defendants in fact reproduced the web pages. Cross-exam. of George Jewell, Q. 250, Responding Motion Record, Tab 3
45. The defendant, Ritchie Sinclair admits that he "linked" and "framed" to a total of six (6) of the defendant's web pages, but swears that it was done in the belief that this was a most common practice on the Internet and without knowledge of the plaintiff's purported copyright notice.
Responding Affidavit of Ritchie Sinclair, Paras. 6-11
46. Even if Ritchie Sinclair had seen the plaintiff's purported copyright notice, this notice does not even mention "linking" or "framing".
Responding Affidavit of Ritchie Sinclair, Paras. 6-11 and Exhibit " B" thereto
Cross-exam. of George Jewell, Q. 's 208-211, Responding Motion Record, Tab 3
47. In any event, the plaintiff notified the defendants of its objection to the "linking" and "framing" on May 21, 1999, and the defendants removed them on May 22, 1999. At this time the site was still under construction, wasn't even open to the public and only a handful of people had ever seen it. Responding Affidavit of Ritchie Sinclair, Paras. 13-15 48. The within action was commenced on June 24, 1999, with the plaintiff's full knowledge that the "frames" and "links" had already been removed. Cross-exam. of George Jewell, Q. 's 130-135, Responding Motion Record, Tab 3 49. Ritchie Sinclair, on behalf of the defendants, has sworn to never replace these "links" and frames" on his web page. Responding Affidavit of Ritchie Sinclair, Para. 13
Harm to the Defendants if an Injunction is Granted

50. It is the defendants' evidence that if the interlocutory injunction were to be granted, it would effectively put an end to the Toronto2 web site. One of the reasons for this, is that if the address is not permitted to be displayed (as the plaintiff have requested), then the web site no longer exists.
    Cross-exam. of Ritchie Sinclair, Q.'s 159-160, Motion Record Vol. III, Tab 2
51. It is the defendants' evidence that even if the defendants were to select another Internet address and name that met with the plaintiff's satisfaction, a very serious problem would arise that would make it worthless for the defendants to proceed to trial: How does one build up a business under a temporary name and then transfer the accumulated goodwill to the original name (Toronto2) if the Court ultimately decides that the defendants were entitled to its use in the first place. Responding Affidavit of Ritchie Sinclair, Paras. 59-67
Undertaking to Pay Damages

52. The plaintiff has sworn that it is a "multimillion dollar company" that has sufficient assets to pay an award of damages if it loses, but on cross-examination refused to substantiate this claim.

Affidavit of George Jewell, Motion Record Vol. I Tab 2, Paras. 4 and 45.
Cross-exam. of George Jewell, Q.203-203, Responding Motion Record, Tab 3
53. The defendants have admitted that they are not in a position, at this time, to pay damages to the Plaintiff if they are permitted to carry on without an injunction. Cross-exam. of Ritchie Sinclair, Q.'s 789-798, Motion Record Vol. III Other Undertakings Made by the Defendants
54. The defendants have undertaken to include a notice on their web site indicating their non-affiliation with the plaintiff. Responding Motion Record, Tab 5

55. The defendants have undertaken to keep an account of all revenues, profits, and activities in connection with their web site.

Responding Motion Record, Tab 5 PART II - POINTS IN ISSUE

56. Is the Plaintiff entitled to an interlocutory injunction?

i) Is there a serious issue to be tried?

ii) Will the plaintiff suffer irreparable harm if the interlocutory injunction is not granted?

iii) Does the balance of convenience favour the plaintiff?
 
 

PART III - SUBMISSIONS
Interlocutory Injunctions - General Principles
57. The interlocutory injunction is an exceptional relief and should only be granted with the greatest of caution since it pronounces judgment in very substantial matters without the opportunity for a full and comprehensive trial. Frank Brunckhorst Co. v. Gainers Inc. (1993),
46 C.P.R. (3d) 421 (Fed. T.D.) Responding Book of Authorities, Tab 1
58. Injunctions should be confined to cases where the merits are clear and the risk of harm to the grieving party is great and imminent. Here, the Court refused an injunction where the trade names were very similar but the parties were not competitors. It is respectfully submitted that the plaintiff and defendants are not competitors in any meaningful sense, given their disparity in size, resources, and given the difference in their content. Astra Ab v. Aastra Corp. (1995), 63 C.P.R. (3d) 357, 99 F.T.R. 215 (T.D.).
Responding Book of Authorities, Tab 2
59. The Test for Issuing an Interlocutory Injunction

The three-part test for an interlocutory injunction is the test set out by the Federal Court of Appeal:

A) the plaintiff must show that it has a serious issue to be tried, and its action is not frivolous or vexatious;

B) the plaintiff must satisfy the Court that it will suffer irreparable harm if an injunction does not issue; and

C) the balance of inconvenience must favour the injunction.

Turbo Resources Ltd. v. Petro-Canada Inc. (1989),

24 C.P.R. (3d) 1 (Fed. C.A.)

Responding Book of Authorities, Tab 3
Serious Issue to be Tried
60. If the result of an interlocutory injunction will impose such hardship on the defendant as to remove any potential benefit from proceeding to trial, the Court should engage in an extensive review of the merits. It is respectfully submitted that if an injunction is granted, it will amount to a final determination as far as the defendants are concerned. RJR-MacDonald Inc. v. Canada (Attorney General)
(1994), 54 C.P.R. (3d) 114 (SCC)
Plaintiff's Authorities, Tab 4
Is there a serious Issue to be tried regarding Trade-mark and Passing Off?
61. To be in violation of section 7(b) of the Trade-marks Act, the defendant must have directed public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada…. This section is the statutory statement of the common law of passing off. Section 7(b), Trade-marks Act, Plaintiff's Authorities, Tab 2
Centre Ice Ltd. v. National Hockey League (1994),
53 C.P.R. (3d) 200, 21 F.T.R. 240 (note) (Fed. C.A.).
Responding Book of Authorities, Tab 4
62. It is submitted that there is no evidence of the defendants directing public attention to their web site, other than by existing on the Internet. Accordingly, it is submitted that prima facie, there is no serious issue to be tried in respect of the plaintiff's allegation concerning section 7(b) of the Trade-marks Act.

63. Section 7(c) of the Trade-marks Act prohibits the passing off of a defendant's wares or services for those ordered or requested. The Federal Court has jurisdiction in connection with relief based upon section 7 of the Trade Marks Act. The Court however, has no jurisdiction in respect of a passing off action where that action is not connected to any trade mark.

Dumont Vins & Spiritueux Inc. v. Celliers du Monde Inc.,
[1992] F.C.J. No. 126, DRS 94-15004, Appeal No. A-1094-90 (F.C.A.).
Responding Book of Authorities, Tab 5
Section 7(c), Trade-marks Act, Plaintiff's Authorities, Tab 2
64. It is submitted that the only element of the defendants' web site that could even arguably constitute passing off is the apparent similarity between toronto.com and "Toronto2(.com)".

65. Pursuant to the Trade-marks Office's Practice Notice, the suffix, ".com" is descriptive of a commercial entity.

Practice Notice, Trade-marks Journal, Vol. 46, No. 2340
Responding Book of Authorities, Tab 6
66. It is submitted that the plaintiff cannot prevent the defendant nor anyone else from using the suffix, ".com", as it is clearly descriptive and is common.

67. A company cannot prevent every other person from using a word that is descriptive of his trade. It is obvious that such a claim cannot be maintained; it would establish a monopoly of the use of words such as ‘Home’ or ‘Colonial’. It is entirely permissible to have the ‘Times’ and the ‘Hereford Times’, and no one would ever suppose that the Times could apply for an injunction. It is respectfully submitted that the words that the plaintiff is attempting to protect are in a much more precarious situation than the words in this case. The plaintiff is attempting to protect a 'root' word, all by itself; "Toronto".

The Colonial Life Assurance Company v. The Home
and Colonial Assurance Company, Ltd. (1864), 33 Beav. 548.
Responding Book of Authorities, Tab 7


68. In determining whether an injunction should be ordered to restrain use of the words "London & Provincial", the Court will always have regard to whether there exists such an exclusive right to a name on the part of the plaintiffs as to justify the Court in interfering in a summary way against the defendants.

London & Provincial Law Assurance Society v. London
& Provincial Joint Stock Life Assurance Company, 17 L.J. Ch. 37.
Responding Book of Authorities, Tab 8
69. "The ban on marks clearly descriptive of the place of origin of their associated goods or services prima facie bars geographic names and their variants: for example, TORONTO, TORONTONIAN, TORONTO’S." It is respectfully submitted that it is no less than a first principle of intellectual property law, that a plaintiff cannot prevent a defendant from also using a word as fundamentally descriptive as "Toronto".
Vaver, David, Intellectual Property Law,
Irwin Law, Toronto, 1997, page 202.
Responding Book of Authorities, Tab 9
70. Names of well known cities such as Liverpool, are part of a class of geographical names which are of such commercial importance that the names ought not to be registered to any one trader. Marks of this class are by their very nature incapable of becoming distinctive. It is submitted that a trade-mark, even a common law one, must be distinctive - by definition. Liverpool Electric Cable Company’s Application (1929), 46 R.P.C. 99.
Responding Book of Authorities, Tab 10
71. It is submitted that the word, "Toronto" or "toronto" is clearly descriptive of the plaintiff's web site. It is further submitted that this word is part of a well established class of words that are of such commercial importance that they are incapable of being distinctive of the plaintiff's web site.

72. If nothing distinctive remains after non-distinctive words are disclaimed from a trademark, nothing is left to be registered. For example, CANADIAN JEWISH REVIEW was denied registration as after the words were disclaimed, nothing remained.

Canada Jewish Review Ltd. v. Canada
(Registrar of Trademarks) (1961), 37 C.P.R. 89 (Ex. Ct.)
Responding Book of Authorities, Tab 11
73. It is submitted that once "toronto" and ".com" are disclaimed from the plaintiff's trade-mark, nothing remains. It is further submitted that this combination of two clearly descriptive words does not equal a single descriptive mark.

Secondary Meaning
74. Where the plaintiff has no right to a monopoly in a word forming part of the common stock of language, such as descriptive or geographical words, he must, to establish a cause of action, prove two things:

1. that the word in question, if used by the defendant, designates goods manufactured or sold by the plaintiff (a secondary meaning); and

2. that by what the defendant does, he passes off his goods for the goods of the plaintiff to his injury.

Magnolia Metal Co. v. Tandem Smelting Syndicate Ltd.
(1898), 15 R.P.C. at 716. Responding Book of Authorities, Tab 12

Steinberg v. Belgium Glove & Hosiery Co. (1953) Carswell Nat 8, 14 Fox Pat. C. 1, 19 C.P.R. 56 (Exchequer Court of Canada)
Responding Book of Authorities, Tab 13

75. It is respectfully submitted that if the plaintiff purports to have exclusive use or a monopoly over its marks, it is required to show that these marks have acquired a secondary meaning. Since the plaintiff has tendered no such evidence, his action for passing off must fail.

76. It is respectfully submitted that there must be evidence to support the allegation that "Toronto" has lost its primary geographical meaning and has come to mean, in the minds of the purchasing public, the goods of the plaintiff.

Steinberg v. Belgium Glove & Hosiery Co., supra Tab 13 77. The gist of a secondary meaning is that you take out of the dictionary of the English language, for the purposes of a particular trade, a word which bears a primary signification, and you attach to that word in the dictionary, a secondary signification. To say that this can be done at all is a very great step. The determination of a secondary meaning is a result of a finding of fact. Reddaway v. Banham, [1896] A.C. 199.
Responding Book of Authorities, Tab 14
78. The plaintiff must establish through evidence, the existence of the secondary meaning throughout Canada, not just locally. If there was any substance to the plaintiff’s allegation that the words had gained a secondary significance, there should be no difficulty whatsoever in establishing that fact by abundant evidence. Where the plaintiff has failed to establish a secondary meaning in respect of descriptive words, the plaintiff is not entitled to an injunction. S. Chivers & Sons v. S. Chivers & Co., [1900] 17 Cut. P.C. 420.
Responding Book of Authorities, Tab 15

Hurlbut Co. v. Hurlburt Shoe Co., [1925] S.C.R.

141, [1925] 2 D.L.R. 121 (S.C.C.)

Responding Book of Authorities, Tab 16
79. The rule against passing off does not extend to prevent the defendant honestly describing the place of origin of his goods. A plaintiff who takes it upon itself to prove that words which are merely descriptive, have acquired a secondary meaning (i.e. have become significant of the plaintiff’s goods as distinguished from those of other manufacturers) assumes a great burden. Mickelson Shapiro Co. v. Mickelson Drug & Chemical Co.
(1916), 10 W.W.R. 261, 34 W.L.R. 155, 28 D.L.R. 307.
Responding Book of Authorities, Tab 17
80. An injunction is not available to the Canadian Railway Co. in respect of the use of the word ‘Canadian’ merely because it has adopted that word long before the Canadian National Railway, doing a similar business, came into existence. Anglo-Canadian Fire Agencies Ltd. v. Anglo-Canadian
Underwriters Ltd. 1942 CarswellNB 1, 2 Fox Pat. C. 86,
16 M.P.R. 198, 2 C.P.R. 10, [1942] 1 D.L.R. 550.
Responding Book of Authorities, Tab 18
81. It is respectfully submitted that the defendant honestly described the origin and nature of its web site by selecting the name, Toronto2.

82. Where the plaintiff has failed to establish that the geographical name when used by the defendant, designates goods sold by the plaintiff, the action for passing off must fail.

Steinberg v. Belgium Glove & Hosiery Co., supra Tab 13 83. It is respectfully submitted that the plaintiff has failed to establish a secondary meaning notwithstanding that it was required to, and in fact pleaded one in its Reply.

84. It is respectfully submitted that there cannot be a serious issue to be tried in respect of an allegation that fails to be substantiated by material facts.

Confusion 85. In order to obtain an interlocutory injunction in passing off action, the plaintiffs must tender affidavit evidence to establish the likelihood of confusion. This evidence must be more than a mere assertion of the likelihood of confusion by the affiant. 775490 Manitoba Ltd. v. Meditables Inc. [1989] F.C.J. No. 1041,
Action No. T-1816-89 (F.C.C.).
Responding Book of Authorities, Tab 19
86. It is respectfully submitted that the plaintiff has merely asserted the likelihood of confusion without any corroborating evidence.

87. The Court cannot infer from the existence of confusion, the existence of a loss of goodwill or reputation. Actual evidence of a loss of goodwill or reputation is necessary.

Caterpillar Inc. v. Chaussures Mario Moda Inc. (1995),
62 C.P.R. (3d) 338, 99 F.T.R. 299 (Fed. T.D.).
Responding Book of Authorities, Tab 20

Centre Ice Ltd. v. National Hockey League (1994), 53 C.P.R. (3d) 200,

21 F.T.R. 240 (note) (Fed. C.A.), supra Tab 4

 
88. It is respectfully submitted that the plaintiff has tendered no actual evidence of a loss of good will or reputation.

89. In order that confusion be caused or be likely to be caused in Canada, the plaintiff’s name and unregistered trademark must be well known in Canada "by reason of such distribution and advertising" as referred to in section 5 of the Trademarks Act. It is not well known in Canada unless knowledge of it pervades the country to a substantial extent. A trade mark can not be regarded as "well known in Canada" when knowledge is restricted to a local area in Canada. It must be well known across Canada.

Huk-A-Poo Sportswear, Inc. v. Destro Enterprises
Ltd. [1974] F.C.J. No. 1107, Court File No. AT-3880-74 (F.C.C.).
Responding Book of Authorities, Tab 21
Robert C. Wian Enterprises, Inc. v. David Mady and Al.
(1965), (2) Ex. C.R. 3 at p.28.
Responding Book of Authorities, Tab 22
90. It is respectfully submitted that the plaintiff's web site is only known, if at all, in and about the City of Toronto, and therefore cannot be said to be well known in Canada, as alleged by the plaintiff.

91. If some confusion and inconvenience occurs as a result of contemporaneous use, by both the plaintiff and defendant, of the same geographical name, this is occasioned by the fact that the plaintiff chose to adopt a name or mark in which, under the circumstances, she could not acquire a monopoly.

Steinberg v. Belgium Glove & Hosiery Co. , supra Tab 13 92. It is respectfully submitted that the plaintiff selected then name "toronto.com" on their own volition, and knew or ought to have known, that such a name can never be monopolized unless, it has come to acquire a secondary meaning. Any confusion that has occurred or is likely to occur is a result of the plaintiff selecting such a generic, descriptive, and non-distinctive mark.

93. Where a plaintiff has engaged in massive advertising in respect of its mark, confusion is not likely to occur.

Westfair Foods Ltd. v. Jim Pattison Industries Ltd. (1990),
45 B.C.L.R. (2d) 253, 68 D.L.R. (4th) 481, 30 C.P.R. (3d) 174,
[1990] 5 W.W.R. 482 (B.C.C.A.).
Responding Book of Authorities, Tab 23
 

Irreparable Harm

94. Evidence of irreparable harm must be clear and not speculative. Syntex Inc. v. Novopharm Ltd. (1991), 36 C.P.R. (3d)
129, 126 N.R. 114 (sub nom. Syntex Inc. v. Novopharm Ltd.
(No. 2) 41 F.T.R. 299 (note) (Fed. C.A.)
Responding Book of Authorities, Tab 24
95. Where a defendant disputes the validity of the plaintiff's mark at the interlocutory stage, the Court may not conclude that irreparable harm will result from the defendant's interim use of that mark. This would be contradictory since it is the very "proprietary right" which is at issue. If a court were to decide 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. Syntex Inc. v. Novopharm Ltd. , supra Tab 24 96. 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. Syntex Inc. v. Novopharm Ltd. supra Tab 24 97. Mere infringement of a proprietary right in a trade mark, does not, of itself, constitute irreparable harm where the validity of the trade mark is contested. Syntex Inc. v. Novopharm Ltd. , supra Tab 24 98. It is an error to conclude that irreparable harm will occur if the alleged infringing practice continues, as the very existence of the proprietary right is in issue. Syntex Inc. v. Novopharm Ltd. , supra Tab 24 99. The existence of some evidence of confusion does not necessarily lead to the conclusion that the plaintiff will suffer irreparable harm. A contested mark cannot be assumed to be valid for the purposes of determining irreparable harm. A loss of distinctiveness (as a result of unchecked confusion) can only result from the infringement of a valid mark. A motions judge errs in assuming the validity of a trade mark where the validity had been put in issue by the defendant. Nature Co. v. Sci-Tech Educational Inc. (1992), 141 N.R.
363, 54 F.T.R. 240 (note), 42 C.P.R. (3d) 359 (Fed. C.A.).
Responding Book of Authorities, Tab 25
100. A plaintiff must tender evidence of irreparable harm that is clear and not speculative. The evidence must support a finding that the applicant would suffer irreparable harm, not merely that irreparable harm is likely. Centre Ice Ltd. v. National Hockey League, supra Tab 4 101. Irreparable harm refers to the nature of the harm suffered rather than its magnitude. Evidence of irreparable harm must be clear and not speculative. A finding of confusion does not necessarily establish a loss of goodwill, and a loss of goodwill is not necessarily irreparable harm. Ault Foods Ltd. v. George Weston Ltd. (1996),
68 C.P.R. (3d) 461, 116 F.T.R. 99 (T.D.).
Responding Book of Authorities, Tab 26


102. Where there are difficult questions of law which call for detailed argument and mature considerations, an interlocutory injunction should not be granted.

Searle Canada Inc. v. Novopharm Ltd., [1994]
3 F.C. 603, 56 C.P.R. (3d) 213, 171 N.R. 48, 81 F.T.R. 320.
Responding Book of Authorities, Tab 27
103. It is submitted that in the within action, the merits are far from clear. The defendants have raised serious doubts as to the existence and validity of the plaintiff's rights to its marks and as to its ownership of its purported copyrights.

104. It is submitted that the issues of law are simple and demonstrate that no interlocutory injunction ought to be ordered as no serious issues for trial exist. In the alternative, it is submitted that if the issues are not simple, but complex, an injunction should not be ordered.

105. Where the evidence shows that the disputed words are commonly registered in business names and trade marks in Canada, it is far from clear whether the plaintiff's right in the trade mark will entitle him to enjoin the defendant from using a similar but not identical word. Accordingly, in such a case an injunction should not be ordered.

Astra Ab v. Aastra Corp. (1995), 63 C.P.R.
(3d) 357, 99 F.T.R. 215 (T.D.).
Responding Book of Authorities, Tab 28


106. It is submitted that the evidence shows many Internet addresses and web sites that feature the word, Toronto, and therefore it is far from clear that the plaintiff's has a right to enjoin the defendants.
 

107. Where a defendant has offered to amend their advertising, circulars, and trade mark for the purpose of distinguishing themselves from the plaintiff in almost every reasonable way short of abandoning the use of their own name, it lends real corroboration to the contention that the defendants' intent has been to manufacture a superior class of goods, to sell them under their own name, and to get a reputation and a trade in that way.

Hurlbut Co. v. Hurlburt Shoe Co., supra Tab 16 108. It is submitted that the fact that the defendants have undertaken to modify their web site to include a disclaimer advising of the non-affiliation with the plaintiff, is demonstrative of the defendants' intention to gain its own reputation in respect of its own distinctive services.

Can A Declaration for ownership of an unregistered trade-mark?
109. A Court will not make a Declaration as to ownership of an unregistered trade mark in the context of a passing off action, where the plaintiff has an application for registration pending. The effect of making such a Declaration would be a direction to the Registrar to make a finding of fact consistent with the Court’s Declaration. Further the plaintiff is in effect seeking to fetter the discretion of the Registrar in determining the registrability of the trade mark.

Copperhead Brewing Co. v. John Labbatt
Ltd. (1995), 61 C.P.R. (3d) 317 (Fed. T.D.).
Responding Book of Authorities, Tab 29

Enterprise Rent-A-Car Co. v. Singer (1996),

109 F.T.R. 185, 66 C.P.R. (3d) 453, [1996] 2 F.C. 694.

Responding Book of Authorities, Tab 30
110. A Declaration as to ownership in the context of a passing off action would not be useful in resolving the passing-off action. It is submitted however, that such a Declaration will be helpful to the plaintiff in its application for trade-mark registration. Enterprise Rent-A-Car Co. v. Singer , supra Tab 30 111. It is respectfully submitted that if the part of the plaintiff's claim that requests a Declaration as to ownership of its "trade-marks" does not raise a serious issue. Granting such a Declaration would hamper the discretion and processes of the Registrar of Trade-marks, as it would amount to a direction to make a finding that the plaintiff's marks are in fact trade-marks, when the Application process has not yet been completed, or has even been abandoned.

Evidence
112. Opinion evidence by a deponent not established as an expert witness will be given little weight and may be inadmissible.

Apple Computer Inc. v. Macintosh Computers Ltd.
(1985), 3 C.I.P.R. 133, 3 C.P.R. (3d) 34 (Fed.T.D.).
Responding Book of Authorities, Tab 31  
113. It is respectfully submitted that without any expert evidence respecting the workings of the Internet or respecting the degree that the plaintiff's marks have become well known, the plaintiff's motion must fail.

Undertakings
114. Where the defendant undertakes:

(a) to clearly indicate on its web page, that its web site has no affiliation with the plaintiff's web site;
(b) to offer a link to the plaintiff's web site; and
(c) to maintain accounts of its revenues and its customers, if any, until trial,
it will constitute an additional valid reason to deny an interlocutory injunction.

ITV Technologies Inc. v. WIC Television Ltd.
(1997), 77 C.P.R. (3d) 495, 140 F.T.R. 302.
Responding Book of Authorities, Tab 32
115. It is respectfully submitted that the fact that the defendants have made every reasonable effort to distinguish themselves from the plaintiff provides real corroboration to the defendants submission that they are not attempting to pass themselves off as the plaintiff and in fact are trying to offer a different and superior service.

Copyright
116.
Where the defendant in a copyright infringement action undertakes to rectify the words which are complained of pending a final determination, an interlocutory injunction may not be ordered.

Aca Joe International v. 147255 Canada Inc., [1986] F.C.J. No. 427, Action No. T-875-86 (F.C.T.).
Responding Book of Authorities, Tab 33


117. It is submitted that the fact that the defendants immediately rectified the few minor alleged copyright infringements and further undertook to not do it again, removes any serious issue to be tried and further denies the need for an interlocutory injunction.
 

118. Pursuant to section 36 of the Copyright Act, a person relying on an assignment of copyrights must have been assigned those rights in writing.

Section 36, Copyright Act, Plaintiff's Authorities, Tab 3


119. It is submitted that the plaintiff has pleaded an assignment, but not an assignment in writing. It is further submitted that the plaintiff has refused to produce any evidence or particulars of this assignment. Accordingly, it is submitted that on this ground alone, the plaintiff does not raise a serious issue for trial and must fail in its motion.

Frank Brunckhorst Co. v. Gainers Inc. , supra Tab 1 Balance of Convenience
120. It is respectfully submitted the Court should only consider whether the defendant has the ability to pay damages if the plaintiff has passed the threshold for both a serious issue to be tried and for irreparable harm.
    Turbo Resources Ltd. v. Petro-Canada Inc., supra Tab 3
121. It is respectfully submitted that the fact that the defendant is unable to pay damages is likely a result of the plaintiff commencing an action against them at the very beginning of their enterprise.

122. It is respectfully submitted that the plaintiff's claim that it is able to pay damages has not been substantiated by evidence. It is further submitted that even if the plaintiff is able to pay, damages cannot adequately compensate the defendants. The reason for this is that the defendants' enterprise is not entirely a profit oriented and ordinary business - there is an element of altruism to it that is impossible to quantify.

123. It is respectfully submitted that no great and imminent harm will be visited upon the plaintiff by the fledgling and relatively smaller defendant web site, if the web site were allowed to continue and flourish.

124. It is respectfully submitted that the defendant will suffer more inconvenience if an injunction is granted. The defendants will be dealt a determinative blow, whereas the plaintiff will surely carry on unhindered and without more than the speculative prospect of some harm at some point in the future.

ORDER REQUESTED

125. It is respectfully requested that the plaintiff's motion for an interlocutory injunction be dismissed with costs fixed and payable forthwith on a solicitor and client basis.

126. It is further respectfully requested that the Court order that the trial of this matter proceed by way of expedited hearing.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

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