Federal Court confirms trademark infringement in a dispute between two fashion boutiques

In a recent ruling, the Federal Court partially granted a default judgment in a trademark infringement and passing off case between two fashion boutiques.

In McDowell v. A Drip of Honey, 2024 FC 453, the plaintiff, owner of the "Honey" boutique, sought judicial intervention against "A Drip of Honey" for infringing upon her registered trademarks, known collectively as the Honey Marks, and for causing confusion and damage to her brand's goodwill in violation of the Trademarks Act.

The plaintiff alleged that "A Drip of Honey" used trademarks in their advertising and product branding that closely resembled her Honey Marks, thereby infringing on her exclusive rights under the Trademarks Act. Despite repeated attempts to contact the defendant and resolve the issue out of court, "A Drip of Honey" failed to respond or file a statement of defence, prompting the plaintiff to seek a default judgment.

In assessing the case, the Federal Court noted the defendant's failure to engage with the legal process but also critiqued the plaintiff for the disorganized submissions and lack of clarity in her legal arguments. The court emphasized that even in unopposed motions for default judgment, plaintiffs must present their case coherently, substantiate their claims, and request remedies with adequate evidence.

Nonetheless, the court found sufficient evidence to establish causes of action for infringement and passing off under s. 20 and par. 7(b) of the Trademarks Act, respectively. The court determined that "A Drip of Honey" causes or is likely to cause confusion among consumers by using marks closely related to the plaintiff’s Honey Marks. However, the court did not find evidence of infringement under s. 19 or a contravention of s. 22 and par. 7(c) of the act, related to the depreciation of goodwill and passing off by substitution.

The court granted a permanent injunction against "A Drip of Honey," restraining further use of the contentious trademarks and ordering the destruction or delivery up of all offending materials. The court deemed the plaintiff's request for damages of $150,000 unjustified due to the lack of substantiation. Instead, the court awarded nominal damages of $10,000. The court also denied the request for costs of $75,000 due to insufficient evidence and rationale provided by the plaintiff.

The court’s decision underscores the importance of presenting a well-structured argument and substantiating claims with clear, convincing evidence, even in default judgment situations. The court also highlighted its discretion in awarding damages and costs, stressing that plaintiffs must justify their requested amounts.