Vennego Inc. v. Concierge Connection Inc., 2015 FC 1338

Vennego, the owner of a family of registered trademarks ending in “PERKS” brought an action for trademark infringement against Concierge Connections Inc. and its directors for using the registered trademark PERKOPOLIS in connection with providing discount, benefit and incentive programs to Canadian companies and professional organizations. Vennego further alleged the Defendants made false and misleading statements discrediting Vennego’s business, committed the tort of passing off and depreciated their goodwill contrary to sections 7(a), 7(b) and 22 of the Trade-marks Act.

At trial, the judge dismissed the action as against Concierge’s directors, finding there was no evidence to support personal liability.[1] The Court dismissed the claim of false and misleading statements under s. 7(a) for want of evidence.[2] Likewise, Vennego’s speculative evidence did not demonstrate actual or potential damages required to sustain a claim of passing off.[3] The Court also dismissed the claim for depreciation of goodwill as there was no evidence that Concierge had used Vennego’s marks as registered.

In assessing the trademark infringement claim, the trial judge outlined the principles derived from the Mattel, Veuve Clicquot and Masterpiece trilogy of Supreme Court decisions as the framework for finding a likelihood of confusion under section 20 of the Trade-marks Act:[4]

  1. As a matter of first impression, would the relevant public (HR decision makers of the parties’ customers and end-users of the services) be confused or likely to be confused into thinking the source of PERKOPOLIS is the same as, or associated with, the source of WORKPERKS, ADPERKS, CUSTOMERPERKS or MEMBERPERKS;
  2. In considering the factors for confusion listed in subsection 6(5) of the Trade-marks Act, the factor most likely to have the greatest effect on the confusion analysis is the degree of resemblance in appearance, sound or ideas suggested by the marks;
  3. The other section 6 factors and surrounding circumstances must then also be considered, including evidence of actual confusion.

The trial judge found there was little resemblance in appearance, sound or the idea suggested between the PERKOPOLIS and each of Vennego’s –PERK marks.[5] Vennego’s marks lacked inherent distinctiveness, being highly suggestive if not descriptive, thereby deserving only a narrow ambit of protection which favored the Defendants.[6] Similarity in the nature of the services, the parties’ businesses and the length of time the marks had been used favored Vennego.[7] As part of the other surrounding circumstances, the trial judge considered the prosecution history, noting that none of Vennego’s previously registered –PERK marks were cited by the Trade-marks Office as confusing with the PERKOPOLIS trademark application; this favored the Defendants.[8]

Vennego’s claim of trademark infringement relied heavily on evidence of actual confusion between its various marks and that of the Defendants. The trial judge admitted 4 instances of actual confusion into the evidentiary record, but concluded that actual confusion was not a “trump card” that negated or outweighed the other section 6(5) factors which favored the Defendants in finding there is no likelihood of confusion.[9] The trial judge accordingly dismissed the claims for trademark infringement and passing off.

2017 FCA 96

On appeal, Vennego argued that the trial judge committed five reversible errors in finding there was no likelihood of confusion (which led to the finding of no infringement and no passing off). First, the trial judge erred in finding there is no similarity in the idea suggested by the marks. Second, the judge failed to consider the acquired distinctiveness of Vennego’s marks. Third, the analysis of the nature of trade improperly focused on the due diligence of HR professionals who choose perks programs as opposed to the first-impression perspective of a consumer somewhat in a hurry as taught by Mattel. Fourth, it is not appropriate to consider registration proceedings in the confusion analysis. Fifth, too little weight was given to the evidence of actual confusion.

The Federal Court of Appeal upheld the trial court’s decision with respect to the first, second and fourth grounds of appeal, finding there was no palpable or overriding error to warrant intervention.

On the third ground of appeal, the Court of Appeal held that Vennego’s assertion that the nature of trade factor was improperly considered was unfounded. The lower court’s reference to “the nature of the trade is such that most customers are relatively sophisticated senior HR professionals” was made for the purpose of contextualizing Vennego’s evidence of actual confusion opposed to the assessment of the likelihood of confusion.[10] On a fair reading of the lower court’s decision, it was clear that the trial judge applied the correct test for the likelihood of confusion (that of a casual consumer somewhat in a hurry) and considered the relevant indicia relating to the nature of trade in the confusion analysis.[11]

On the fifth ground of appeal, Vennego again pointed to the evidence of actual confusion, arguing that actual confusion trumped other considerations under section 6(5), and weighed in favor of finding that the marks were confusing. The Federal Court of Appeal rejected this notion, and reiterated that actual confusion is only one of the factors to consider in assessing whether there was a likelihood of confusion and is not dispositive compared to other section 6(5) factors in the weighing exercise.[12]

On the issue of depreciation of goodwill, the Court of Appeal agreed with Vennego that the trial judge too narrowly construed section 22 to mean that the mark used by the Defendant had to be identical to Vennego’s mark.[13] The error was held to be harmless since the lower court’s rationale was that the words “MEMBER PERKS INCLUDE” followed by examples of the perks available to the Defendant’s customers did not constitute “use” of a trademark within the meaning of section 22.[14]

The appeal on the merits for the trademark action was dismissed with costs. The Supreme Court denied leave to appeal.