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1. Registration

a. CIRA’s Canadian Presence Requirement

In Canada the authority for the control and operation of the dot-ca registry lies with the Canadian Internet Registration Authority (CIRA), who took over the dot-ca registry from the University of British Columbia on December 1, 2000.

CIRA will only permit registration of dot.ca domain names with a Canadian presence, which includes the following: a Canadian citizen of the age of majority, (b) a permanent resident of Canada who ordinarily resides in Canada and of the age of majority, (c) a legal representative of a Canadian citizen or permanent resident of Canada, (d) a corporation registered in Canada, (e) a trust in Canada that consists of more than 66% Canadian trustees, (f) a partnership registered in Canada that consists of more than 66% Canadian partners, (g) an unincorporated organization, association or club in which at least 80% of the members are Canadian and at least 80% of the directors, officers, employees, managers, administrators or other representatives ordinarily reside in Canada, (h) a recognized trade union with its head office in Canada, (i) a political party registered in Canada, (j) certain categories of university, college, post-secondary school, vocational school, secondary school or other school or educational institution located in Canada, (k) certain not-for-profit libraries, archives and museums located in Canada, (l) a hospital located in Canada that is licensed, authorized or approved to operate in Canada, (m) Her Majesty the Queen, (n) Indian bands in Canada, (o) aboriginal peoples of Canada, (p) the Crown, a Crown agent, a Crown corporation, a government agency or entity, or a regional, municipal or local government in Canada, (q) the owner of a trade-mark registered pursuant to the Trade-marks Act, but limited only to a domain name consisting of or including the exact word components, and (r) the owner an official mark under s. 9(1) of the Trade-marks Act, but limited only to a domain name consisting of or including the exact word components.

Existing registrants of the UBC registry who re-register with CIRA will be “grandfathered” and will not have to meet the above criteria only with respect of that domain name.

b. Registration Procedure

The responsibility for ensuring that an applicant has the right to use the domain name selected lies with that applicant.

Most Registrars such as Network Solutions Inc. (NSI) process applications on a first come, first serve basis. They will not reject a registration unless it is an exact match in all respects to a currently registered name in the Registry at any level, the proposed domain name is included in CIRA’s list of reserved names, or the proposed domain name prima facie violates any third party intellectual property rights, defames any person or contravenes applicable laws. Since CIRA and ICANN lack the resources to police their own rules and policies, disputes and conflicts are bound to arise from time to time, especially with respect to confusingly similar domain names, trade-marks and service-marks, domain names that are used to defame any person, or domain names that contravene applicable laws.

In order to cure this defect CIRA applies a seven day confirmation process, reserves the right to reject or refuse to register any domain name, may cancel or suspend a registration within 30 days of activation, or for breach of the Registrant Agreement.

2. The Nature of a Domain Name

A domain name is not a tangible, determinate thing such as a house or a computer. It is not property in the conventional sense, in that it is neither real nor personal property. A domain name does give rise to a bundle of rights associated with its ownership. So a domain name is viewed as intangible property, similar to copyrights or trademarks: Easthaven, Ltd. v. Nutrisystem.com Inc. et al. (2001), 55 O.R. (3d) 334 (Ont. Sup.Ct.J.).

3. The Nature of Meta Tags

Meta tags are HTML tags attached to a web page which provide information about the document, the author and the content. Search engines through “spiders” use keyword meta tags to locate, identify and index a web page. Meta tags are used to direct internet traffic to a particular web site. Since content is a much more powerful means of directing internet traffic than domain names, the use of meta tags are a much more effective means of infringement than domain names. Ironically, the law “softer” with respect to the use and abuse of meta tags when it comes to trade-mark infringement, passing off, and defamation and unlawfulness.

4. Jurisdiction

One of the thorniest issues in Internet law has to be the issue of jurisdiction over a domain name dispute. So far, there has been very little guidance from the court on how to determine the proper forum for a cyber dispute. In Easthaven, Ltd. v. Nutrisystem.com Inc. et al. (2001), 55 O.R. (3d) 334 (Ont. Sup.Ct.J.) Justice Nordheimer highlights this problem at para 25-26:

The traditional test for determining jurisdiction in Canada has been to determine whether there is a real and substantial connection between the subject matter of the action and the right of the court to assume jurisdiction: Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077. This of course is problemmatic when dealing with a cyberdispute. One can easily imagine the difficulties involved where the complainant resides in the United States, the alleged infringer resides in the Caribbean and the registrar resides in Ontario. This is precisely the circumstances that gave rise to the jurisdictional dispute in Easthaven.

The facts in Easthaven are as follows. Easthaven, a corporation with its head office in Bridgetown, Barbados registered the domain name "sweatsuccess.com" through Tucows, a business incorporated under the laws of the State of Delaware and with its head office in Toronto. Nutrisystem.com, a business incorporated under the laws of the State of Delaware and with its head office in Pennsylvania, was the holder of certain "Sweet Success" trade-marks. The Pennsylvania courts granted Nutrisystem.com an injunction restraining Easthaven from taking action to prevent the transfer of the domain name to Nutrisystem.com. In response Easthaven launched an action in Ontario against both Nutrisystem.com and Tucows. Notably, the action against Tucows was discontinued after Tucows placed the domain name on registrar hold.

Adopting the personal jurisdiction test from Panavision International v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), Justice Nordheimer granted Nutrisystem.com a stay of proceedings because there was no real and substantial connection between Ontario and either the remaining parties or the events giving rise to the claim. According to the court in Panavision, personal jurisdiction could be found based on: (1) general jurisdiction, or (2) specific jurisdiction. General jurisdiction could only be found where a nonresident was domicile in the forum or his activities there were "substantial" or "continuous and systematic." Specific jurisdiction could only be found where: (a) the nonresident does some act or transaction within the forum or performs some act with the intention of availing himself of the privileges of conducting activities in the forum, and thereby invoking the benefits and protections of its laws, (b) the claim arises out of or results from his forum-related activities, and (c) the exercise of jurisdiction is reasonable. Personal jurisdiction can only arise where there is a purposeful attempt to direct activities in a substantial way to the forum: Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997). See generally Easthaven, Ltd. v. Nutrisystem.com Inc. et al. (2001), 55 O.R. (3d) 334 (Ont. Sup.Ct.J.). Specifically, Justice Nordheimer found no act or transaction by Nutrisystem.com in Ontario and thus no claim arising from the activities of Nutrisystem.com in Ontario. The court also held that it would be unreasonable for it to exercise jurisdiction over a Pennsylvania company (Nutrisystem.com) at the request of a Barbados company (Easthaven). Notably, the court did suggest it may have found differently had Tucows remained a party to the proceedings.

This approach was confirmed by Justice Binnie in Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, [2004] S.C.J. No. 44 (S.C.C.). In SOCAN the issue was whether an ISP located in Canada could be held liable for transmissions of music data contrary to the Copyright Act that were collected, cached or passed through their servers.

Where there is a "purposeful activity directed to the development of a market for services or wares in Canada" and that purposeful activity encroaches upon the legitimate use of a Canadian trade-mark and results in actual or potential loss, the Court may extend its jurisdiction to include companies operating outside of Canada: Pro-C Ltd.  v. Computer City Inc., [2000] O.J. No. 2823 (Ont. Sup.Ct.J.); and  Tele-Direct (Publications) Inc.  v. Canadian Business Online Inc., [1998] F.C.S. No. 1306 (F.C.T.D.). Furthermore, jurisdiction and arbitration clauses may bring an action against the transfer of a domain name within the jurisdiction of the Canadian courts: See Uninet Technologies Inc. v. Communication Services Inc., [2003] B.C.J. No. 2562 (B.C.S.C.).

Canadian Courts have also indicated a willingness to extend trade-mark protection, at least for injunctive relief, to include the use of a domain name located outside of Canada. In Bell Actimedia Inc. v. Puzo (Communications Globe Tete), [1999] F.C.J. No. 683 (F.C.T.D.) the argument that injunctive relief should be limited to uses in Canada was rejected. The alleged infringer agreed that Bell was entitled to the exclusive use of "PAGES JAUNES" and "YELLOW PAGES" in Canada by virtue of its trade mark, but that they were nevertheless entitled to use the domain name "lespagesjaunes.com" in any country other than Canada from their address in Montreal.

5. The ICANN and CIRA Dispute Resolution Policies

In late 1999 the Internet Corporation for Assigned Names and Numbers (ICANN) implemented a dispute resolution policy for dot-com, dot-net and dot-org domain name disputes, which has also been adopted by certain country-code gTLDs and subsequently to dot-aero, dot-biz, dot-coop, dot-info, dot-museum, dot-name and dot-pro gTLDs. Canada followed shortly thereafter with CIRA’s Domain Name Dispute Resolution Policy (CDRP) for all dot-ca domain name disputes.

Mandatory administrative proceedings are required where:

(1) a domain name is confusingly similar to an existing Trade-Mark;

(2) the Registrant has no right or legitimate interest in the domain name; or

(3) the Registrant has registered the name in bad faith.

From its inception the UDRP and the CDRP have focused their attention on "bad faith" registrations. “Bad faith” has focused on the registration of domain names: (a) primarily for the purpose of selling, renting or transferring the domain name to a Complainant who owns the trade-mark or service-mark or to a competitor of that Complainant, in excess of your documented out-of-pocket costs, (b) to prevent the owner of the trade-mark or service-mark from using that mark, (c) primarily to disrupt a competitor's business, (d) intentionally attempt to attract, for commercial gain, Internet users, creating a likelihood of confusion with the complainant's mark as to sponsorship, affiliation or endorsement or as to products or services.

In order to succeed a Complainant must prove, on the balance of probabilities, that:

(1) the Registrant domain name is confusingly similar to the Complainant's Trade-Mark; and

(2) the Registrant obtained the domain name in bad faith;

and a Complainant must also provide some evidence that the Registrant does not have a legitimate interest in the domain name. It is insufficient to establish any two grounds alone if the third ground is not also established: see Chantelle MacDonald Newhook, “Winning A Domain Name Dispute” (2003) 7 (4) Copyright & New Media Law Newsletter.

The necessity of establishing all three elements probably explains the findings of “bad faith” in the Molsons Canada and Saxons Chocolates at the Panel level, both of which were reversed by the Courts at trial. In Black v. Molson Canada (2002), 60 O.R. (3d) 457 (Ont. Sup.Ct.J.) Justice Wright granted a declaration that the applicant was the rightful registrant of the domain name “canadian.biz” and that the respondent, Molson Canada, had no valid right, title or interest in the same, despite the decision of an adjudicator to the contrary under the UDRP and STOP Rules. The applicant had complied with the only restrictions on registering a “dot-biz” domain name, and despite the adjudicator’s findings of trademark infringement, bad faith and no legitimate interest, Justice Wright found that Molson Canada had not shown the three elements of the STOP policy. In 1215757 Ontario Inc. (c.o.b. Saxon Chocolates) v. Zhadan (c.o.b. Intellware Lab), [2003] O.J. No. 3068 (Ont. Sup.Ct.J) Deputy Judge Mungovan refused to accept the finding of “bad faith” or “unlawfulness” by the arbitrator under the UDRP. In this case the Defendant had merely “parked” the domain name in the website and left the website “under construction”. The Court found that the Defendant had registered the domain name “saxonchocolates.com”, not for the purpose of selling it to the Plaintiff, the trade mark owner, but for the purpose of demonstrating his ability to build websites. Moreover, the Plaintiff did not offer any goods or services identifiable with the Plaintiff’s trade mark. The Plaintiff’s claim for damages was dismissed.

Under both the UDRP Rules and the CDRP Rules a claim is initiated by submitting a complaint in accordance with the Rules in both hard copy and electronic form to an approved dispute-resolution service provider ("Provider"). If the appropriate fee has been paid the matter will proceed. Within twenty (20) days of the date of commencement, the respondent shall submit a response in accordance with the Rules in both hard copy and electronic form to the Provider.

The complaint shall be heard by a Panel of three panelists. The Panel is granted broad powers with respect to the conduct of proceedings, including the manner of proceedings, extensions of time, the admissibility, relevance, materiality and weight of evidence, and to proceed to a decision in default. The Panel is also granted broad powers with respect to its decision, which shall be decided based on the statements and documents provided, the Policy, the Rules, and any principles of law it deems applicable. There are no in-person hearings. The decision of the Panel must be in writing, provide reasons, indicate the date it was rendered and identify the panelists.

The sole remedy for the successful complainant is cancellation or transfer to the Complainant of the domain name.

While the UDRP is mandatory for certain alleged infringements, the UDRP does not prevent court proceedings. Where legal proceedings have commenced while the administrative proceedings are ongoing, the Panel may decide to suspend or terminate its own proceedings or to proceed to a decision.

e. Judicial Review

Participants are bound by the rules of the UDRP Policy. Since under the UDRP Policy fees are to be paid by the Complainant, they are not recoverable in subsequent legal proceedings: 1215757 Ontario Inc. (c.o.b. Saxon Chocolates) v. Zhadan (c.o.b. Intellware Lab), [2003] O.J. No. 3068 (Ont. Sup.Ct.J).

6. Legal Disputes

Outside the active dispute resolution policies adopted by ICANN and CIRA, and the judicial review of arbitrator decisions, lies the realm of legal disputes. Legal disputes are generally determined on the basis of the common law tort of passing off or trade-marks legislation such as the Trade-Marks Act, but sometimes arise from defamation or unlawfulness.

a. Passing Off

There are two categories of the tort of passing off. First, there is the case where the plaintiff alleges that a competitor has used the name, packaging or described its products or business in a manner likely to lead the public to believe the competitor's product or business is that of the plaintiff. Second, there is the case where a defendant promotes his product or business in such a way so as to create the false impression that his product or business is approved, authorized or endorsed by the plaintiff or that there is some business connection between the defendant and plaintiff: National Hockey League  v. Pepsi-Cola Canada Ltd.  (1992), 42 C.P.R. (3d) 390 (B.C.S.C.), aff'd (1995), 59 C.P.R. (3d) 216 (B.C.C.A.). See also, British Columbia Automobile Assn. v. Office and Professional Employees' International Union, Local 378, [2001] B.C.J. No. 151 (B.C.S.C.).

Passing off is established by an applicant where there is (1) goodwill, (2) deception of the public due to a misrepresentation, and (3) actual or potential damages: Ciba-Geigy Canada Ltd.  v. Apotex Inc., [1992] 3 S.C.R. 120. In British Telecom plc. v. One in a Million Ltd., [1998] 4 All E.R. 476 (H.C.J.) the Court held that the registration of a distinctive domain name could amount to passing off.

In Peinet Inc.  v. O'Brien, [1995] P.E.I.J. No. 68 (P.E.I.S.C.T.D.) the Court held that the use of the domain name "pei.net" did not infringe the complainant's trade name "PEINET Inc." (the regional internet provider for Prince Edward Island) even though both companies provided internet services and the alleged infringer was a former employee of the complainant. Here the complainant had failed to establish that the alleged infringer had misrepresented itself to the public, failed to show any actual or potential losses and failed to show its trade name had been used for such a period of time and to such an extent as to acquire a distinctiveness. The limited use of the name "pei.net" in a telephone number, a reference in a newspaper article and a listing on the Internet for a period of about three months was not sufficient to establish any deception to the public.

Where passing off is established, damages will be presumed: Draper v. Trist et al., [1939] 3 All E.R. 513 (H.L.). In Saskatoon Star Phoenix Group Inc. v. Noton, [2001] S.J. No. 275 (Sask. Q.B.) the Defendant set up a website with the domain name “saskatoonstarphoenix.com” which looked exactly like the Plaintiff’s main page, except that he substituted his own advertising, advertised his web hosting business at the bottom and added a scrolling message that he designed, hosted and marketed the website. The Defendant also advertised a number of domain names for sale on his company website, including “saskatoonstarphoenix.com”, “thestarphoenix.com” and “starphoenix.com” and listed a courtesy link to his StarPhoenix site under his website “shoppingonlinemadeeasy.com”. There was some evidence of inconvenience to users but no evidence that the advertisements hurt the Plaintiff’s reputation or goodwill. The Court held the Defendant liable for passing off and assessed damages of $5,000.00 for a period of perhaps two months.

b. Trade-Mark Infringement

There are two types of trade-mark infringement contemplated by the Trade-Marks Act. The first is a confusing use of a similar mark or name. Under section 20(1) a person who is not otherwise entitled to use a trade-mark infringes a registered trade-mark if he sells, distributes or advertises wares or services in association with a trade-mark or trade-name that is confusing or likely to be confusing with a registered trade-mark or trade-name. There is an exception for (a) a bona fide use of his personal name as a trade-name (i.e., Smith, Jones) or of the geographical name of his place of business (i.e., Toronto, New Brunswick, Canada), or (b) a bona fide use of an accurate description of the character or quality of his wares or services (i.e., Running Shoes, Fast Internet), which is not likely to depreciate the value of the goodwill attached to the trade-mark.

A mark or name infringes where on "first impression" or “first blush” its use in association with wares or services, in the same area and in the same manner, would cause confusion in "the minds of an ordinary person having a vague recollection of that other mark or name": Miss Universe Inc. v. Bohna (1994), 58 C.P.R. (3d) 381 (F.C.A.). That is, whether its use is likely to lead to the inference that the wares or services of the parties are associated in some way, even if the parties do not provide similar wares or services. In determining whether there is confusion the Court shall consider (1) the inherent distinctiveness and the extent they have become known; (2) the length of use of the parties; (3) the nature of the wares, services or business; (4) the nature of the trade; and (5) the degree of similarity in appearance, sound or the ideas suggested by them. It is important to be mindful that it is not confusion of marks, but confusion of goods and services that is at issue: see United Artists Corp. v. Pink Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.).

The second type of infringement is a depreciating use of the trade-mark. Under s. 22(1) no person may use a registered trade-mark in a manner likely to depreciate the value of the goodwill attaching to it. The test in depreciating use cases is whether the purpose of the use is to stress the similarities or differences. In the former, the value of goodwill associated with the trade-mark is appropriated and section 22 is offended. In the latter, the use is for the purpose of distancing the trade-marked wares or services from that of the alleged infringer, section 22 is not offended: Future Shop Ltd. v. A. & B. Sound Ltd. (1994), 55 C.P.R. (3d) 182 (B.C.S.C.).

The triggering event for an infringement claim is "use" in Canada. Under section 4(1) a trade-mark is deemed to be used in association with wares if it is marked on the wares or on the packaging at the time property or possession is transferred in the normal course of trade, or if notice of the association is given to the transferee (i.e., buyer, renter). Under section 4(2) a trade-mark is deemed to be used in association with services once it is used or displayed in the performance or advertising of those services. Finally, under section 4(3) a trade-mark that is marked on the wares or packaging is deemed to be used in Canada once it is exported from Canada. Until there is an allegedly infringing use, there can be no likelihood of confusion in "the minds of an ordinary person having a vague recollection of that other mark or name".

The mere addition of a word or matter does not relieve from infringement under the Trade-Mark Act  so long as the distinctive parts of a registered trade-mark are used: Sprint Communications Co. v. Merlin International Communications Inc. , [2000] F.C.J. No. 1861 (F.C.T.D.); Carling O'Keefe Ltd. v. Anheuser-Busch Inc. Nos. 1 and 2  (1982), 68 C.P.R. (2d) (F.C.T.D.). However, the addition of words or matter may be sufficient to distinguish goods under the common law tort of passing off  [See above]: Carling O'Keefe Ltd. v. Anheuser-Busch Inc. Nos. 1 and 2  (1982), 68 C.P.R. (2d) (F.C.T.D.).

Tthe Courts are clear that the term "use" is restricted to use in the technical trade-mark sense, which requires some commercial element: See Clariol International Corp. v. Thomas Supply & Equipment Co. (1968), 55 C.P.R. 176 (Ex. Ct.); Cie Generale des Establissemens Michelin-Michelin & Cie v. C.A.W.-Canada (1996), 71 C.P.R. (3d) 348 (F.C.T.D.); and British Columbia Automobile Assn. v. Office and Professional Employees' International Union, Local 378, [2001] B.C.J. No. 151 (B.C.S.C.). This is a critical flaw in trade-mark infringement claims as seen in such cases as British Columbia Automobile Assn. v. Office and Professional Employees' International Union, Local 378, [2001] B.C.J. No. 151 (B.C.S.C.) and Bell ExpressVu Ltd. Partnership v. Tedmonds & Co. Inc., [2001] O.J. No. 1558 (Ont. Sup.Ct.J.) discussed below.

In Pro-C Ltd. v. Computer City Inc., [2000] O.J. No. 2823 (Ont. Sup.Ct.J.) the infringer developed and launched a new line of personal computers (PCs) under the name "WINGEN", even though it knew at that time, through its parent corporation, of the existence of the complainant's (a developer of software products) trade-mark "WINGEN" and domain name “wingen.com". As a result of the launch of the infringer's new line of PCs in late 1997 and the high volume of inquires and hits on its website, the complainant's own computer system crashed which resulted in complaints from customers and potential customers. Sales of the complainant's own product line declined in 1998 from almost $171,000.00 in net sales to just over $4,000.00. The Court awarded the complainant $450,000.00 in damages and $750,000.00 in punitive damages.

In analysis Justice Whitten discusses and appears to adopt Orkin Exterminating Co. v. Pestco Co. of Canada Ltd. et al.  (1985), S.C.P.R. (3d) 453 (Ont. C.A.) in finding that the loss is not limited to the siphoning off of existing customers, but also extends to potential untapped markets. This statement has the potential to give rise to significant problems for any persons using a domain name which is confusing with a registered trade-mark, even though the owner of the registered trade-mark has not yet entered into Internet marketing, however, in practical terms it would be difficult for the complainant to prove the mere intention to use a domain name in an infringing manner given the development of the fair use defence.

In Sprint Communications Co. v. Merlin International Communications Inc., [2000] F.C.J. No. 1861 (F.C.T.D.) the alleged infringer registered and used the domain names "www.sprintcanada.com" and "www.sprintus.com" but used them only as an e-mail site. The Federal Court held that there was no infringement even though there was admittedly some confusion with customers largely because the SPRINT trade-names did not have sufficient distinctiveness and the alleged infringer did not provide the same or similar wares or services (i.e., telecommunications services).

In Black v. Molson Canada (2002), 60 O.R. (3d) 457 (Ont. Sup.Ct.J.) Justice Wright pointed out that in the registration details for the trade-mark ”CANADIAN” Molson Canada specifically disclaimed the exclusive right to use the word “CANADIAN” apart from the trade-mark in connection with all of the wares except brewed alcoholic beverages, namely beer. Since Molson Canada intended to use the word “CANADIAN” only with respect to beer, the trade-mark did not give Molson Canada exclusive use of the word “CANADIAN”. Justice Wright states at p. 462:

Justice Wright also concluded that it was unlikely the public would confuse “canadian.biz” with any of Molson Canada’s domain names, such as “molsoncanadian.biz” or “molson.biz”.

c. Interference With Economic Interests

There are a few cases in which a party has sought damages for Interference with Economic Interests. The commercial tort of Interference with Economic Interests is established where: (1) the defendant intended to injure the plaintiff; (2) the plaintiff suffered economic loss or a related injury as a result of the defendant’s conduct; and (3) the means employed by the defendant was unlawful: Brotherhood of Teamsters, Local 213 v. Therien, [1960] S.C.R. 265. See 1215757 Ontario Inc. (c.o.b. Saxon Chocolates) v. Zhadan (c.o.b. Intellware Lab), [2003] O.J. No. 3068 (Ont. Sup.Ct.J) and Bell ExpressVu Ltd. Partnership v. Tedmonds & Co. Inc., [2001] O.J. No. 1558 (Ont. Sup.Ct.J). Neither of these cases succeeded on the point.

In 1215757 Ontario Inc. (c.o.b. Saxon Chocolates) v. Zhadan (c.o.b. Intellware Lab), [2003] O.J. No. 3068 (Ont. Sup.Ct.J) the Defendant had merely “parked” the domain name in the website and left the website “under construction”. The Court found that the Defendant had registered the domain name “saxonchocolates.com”, not for the purpose of selling it to the Plaintiff, the trade mark owner, but for the purpose of demonstrating his ability to build websites. There was no evidence of an intention on the Defendant’s part to injure the Plaintiff. Moreover, the Plaintiff did not offer any goods or services identifiable with the Plaintiff’s trade mark. In fact the Court found that the Defendant’s use of the domain name was lawful, even though the UDRP arbitrator made a finding of “bad faith”. The finding of the UDRP arbitrator was merely evidence of “unlawfulness” and not conclusive proof of it. In light of the findings of the Court at trial there was no unlawful use of the domain name. The Plaintiff’s claim for damages was dismissed.

d. Fair Use Defence

In those cases where the alleged infringer could make a reasonable claim to fair use, the complainant has almost always failed in both passing off and trade-mark infringement claims. The leading case illustrative of this point seems to be Playboy Enterprises v. Welles: Playboy Enterprises v. Terri Welles, Inc., 78 F. Supp. 2d 1066 (U.S. Dist., 1999). The infringer, Ms. Welles, used the term “Playboy”, “Playmate”, “Playmate of the Month” and “Playmate of the Year” on her web site in titles, watermarks and advertising banners, and in her meta tags, but with clear disclaimers advising that the trade mark was owned by Playboy Enterprises. Playboy Enterprises sued claiming trade mark infringement. Judge Keep dismissed Playboy’s claim on the basis that there was no likelihood of confusion and Ms. Welles could make fair use of Playboy’s trade marks as it was done in good faith.

In British Columbia Automobile Assn. v. Office and Professional Employees' International Union, Local 378, [2001] B.C.J. No. 151 (B.C.S.C.) the Court held that the use of the domain names "bcaaonstrike.com" and "bcaabacktowork.com" by the union did not infringe the complainant's trade name "BCAA". Further, it also held that the terms "BCAA On Strike" and "Greeting BCAA Is On Strike" were not inherently deceptive. In rendering its decision against the BCAA the Court held that the most significant factors were the addition of the words "back to work" and "on strike" and the fact the union was not competing commercially with the complainant, which impressed Justice Sigurdson that the "ordinary average customer" would not perceive that the union site was the complainant's site, nor sponsored by or affiliated with the complainant. Justice Sigurdson also noted that this was quickly apparent from viewing the sites, especially in light of the use of a clear disclaimer on the union website. In balancing freedom of expression with the commercial protection afforded by the common law for trade names, Justice Sigurdson concluded that similarity of domain names is of less significance in labour relations or consumer criticism situations because there is less likelihood of confusion. Since there was no evidence of any actual confusion by anyone viewing the site, there was no misrepresentation and the BCAA's claim had to fail. It should be noted that prior to trial the union had removed many of the similarities in appearance and meta tag elements between the union and BCAA websites.

On the issue of whether the original union website constituted a passing off, Justice Sigurdson was of the opinion that the similarity in domain name, website appearance, and meta tags without the disclaimer and the use of the phrase "Greetings BCAA is on Strike" would constitute a passing off. For copyright infringement and passing off, the Court awarded the complainant a nominal sum of $2,500.00 in damages.

Furthermore, Justice Sigurdson held that the use of the complainant's trade-mark in the domain name and meta tags as they appeared at the time of trial did not offend section 22 of the Act because the term "use" required a commercial element, and here, the situation was as between an employer and a union. The union website was a non-commercial provider of information and as such there could be no use in association with wares or services.

For a period of time the union used "BCAA", "CAA", "AAA", "BCAA off-ramp", and "British Columbia Automobile Association" in its meta tags. However, at the time of trial the union had withdrawn its use of similar meta tags and the Court held that as such there was no misrepresentation. Nevertheless, Justice Sigurdson also opined that "if a site wishes to operate as a lawful vehicle during a strike or as a consumer criticism site, it must be able to reach people who are attempting to find an employer's or a producer's site. Otherwise the Union's lawful activities or the activities of consumer groups would be significantly frustrated." And further, "that the use of these particular meta tags is not objectionable because it is a reasonable way for the Union to bring its message to people wishing to do business with the employer. The Union must be free to identify its employer and communicate about its labour dispute." However, in a commercial competitive circumstance Justice Sigurdson suggests in obiter that "the use of similar meta tags unconnected to a defendant's business or operation might indicate deception and might be a significant factor in determining if there is a passing-off." For similar reasons, Justice Sigurdson also held that the use of the complainant's trade-marks in the meta tags by the union did not offend section 22 of the Trade-Marks Act. As noted above, the Court held that the similarity in domain name, website appearance, and meta tags in the original union website without the disclaimer and the use of the phrase "Greetings BCAA is on Strike" would constitute a passing off. For copyright infringement and passing off, the Court awarded the complainant a nominal sum of $2,500.00 in damages.

A similar approach was adopted by Justice Nordheimer in Bell ExpressVu Ltd. Partnership v. Tedmonds & Co. Inc., [2001] O.J. No. 1558 (Ont. Sup.Ct.J) in dismissing Bell’s claim for trade-mark infringement. While the primary issue in this case revolved around an application by the Defendants to lift the injunction that prevented them from selling U.S. satellite signal decoder systems to Canadians, the use of the domain name “expressvu.org” and meta tags to direct traffic to the web site were also discussed. Anyone who did a search on the phrase “expressvu” would find the Defendant’s website. In that case the Defendant used the website “expressvu.org” to present their perspective on the issues raised in the main action and to promote the “Tedsat Legal Defence Fund”. The Defendant’s website also provided a disclaimer on the main page which states:

Bell claimed this was an infringement of their registered trade-mark. No evidence of any commercial use of Bell’s trade-mark or dilution or depreciation of Bell’s trade-mark was found. The website did not promote wares or services in competition to Bell, the Defendant’s provided a clear disclaimer on the main page, and a person could easily find the Bell website “expressvu.com” – dot-org being a second order domain name.

Justice Nordheimer found this analogous to the situation in Bridgestone Firestone, Inc., Bridgestone/Firestone Research, Inc., and Bridgestone Corporation v. Jack Myers, WIPO Arbitration and Mediation Center, Case No. D2000-0190, July 6, 2000, which involved a disgruntled, former employee’s use of the domain name “bridgestone-firestone.net” to promote a dispute he had with Bridgestone-Firestone, where the Arbitrator said:

e. Defamation and Unlawfulness

In Law Society of British Columbia v. Canada Domain Name Exchange Corp., [2004] B.C.J. No. 1692 (B.C.A.), aff’g [2002] B.C.J. No. 1909 (B.C.S.C.), the Defendant registered the domain names “lawsocietyofbc.ca” and “lsbc.ca”. The Defendant argued, quite unconvincingly, that “lawsocietyofbc” stands for “Law Society of Barristers Categories” and that “lsbc” stands for “Love Sites by Categories”. The websites directed people to adult sites or the site of a political party, for which the Defendant received income for directing internet traffic.

Justice Sigurdson notes at paragraphs 22-24 that:

It does not matter whether there was an intent to misrepresent so long as there is evidence of the likelihood of confusion leading to the possibility of lost business opportunity. On the basis of a finding of passing off, the Plaintiff was granted an injunction and damages. Although no actual damages were proven Justice Sigurdson awarded the Plaintiff $4,000.00 in general damages and, observing Justice Laing’s thoughts in Saskatoon Star Phoenix, refused to grant punitive damages in this case.

f. Injunctive Relief

According to the American Cyanamid test a court may grant injunctive relief against an alleged infringement where: (1) there is a prima facie case or a serious question to be tried, (2) the applicant demonstrates that unless the injunction is granted, it will suffer irreparable harm which would be difficult to compensate for by damages, and (3) the balance of convenience lies with the applicant:  Metropolitan Stores (M.T.S.) Ltd. v. Manitoba Food & Commercial Workers, Local 832  (1987), 38 D.L.R. (4th) 321 (S.C.C.). In intellectual property cases the first test is met if the claim is not frivolous or vexatious, that is, there is a serious issue to be tried:  Imperial Chemical Industries PLC v. Apotex Inc. (1989), 27 C.P.R. (3d) 345 (F.C.A.).

With respect to passing off and trade-mark infringement claims, Canadian Courts have granted injunctive relief where there is a serious issue and clear proof of damages or the likelihood of damages: Bell Actimedia Inc.  v. Puzo (Communications Globe Tete), [1999] F.C.J. No. 683 (F.C.T.D.) and Innersense International Inc. v. Manegre, [2000] A.J. No. 613 (Alta. Q.B.). To succeed on the second test the applicant must show clear evidence that he will suffer irreparable harm:  Syntex Inc. v. Novopharm Ltd. (1991), 36 C.P.R. (3d) 129 (F.C.A.); Nature Co. v. Sci-Tech Educational Inc. (1992), 41 C.P.R. (3d) 359 (F.C.A.); and Centre Ice Ltd.  v. National Hockey League (1994), 53 C.P.R. (3d) 34 (F.C.A.).

Proof of a serious issue to be tried alone without clear proof of damages or the likelihood of damages is insufficient to obtain injunctive relief. In Sprint Communications Co. v. Merlin International Communications Inc., [2000] F.C.J. No. 1861 (F.C.T.D.) the Court refused to grant an injunction largely because of a finding that there was no infringement, but also because there was no evidence of depreciation in the value of the goodwill attached to the trade-marks. In Toronto.com v. Sinclair, [2000] F.C.J. No. 795 (F.C.T.D.) the Court refused to grant an injunction by Toronto.com against the use of "Toronto2.com" because the applicant failed to show any clear evidence of irreparable harm (i.e., loss of reputation, brand name awareness, consumer loyalty or ability to attract advertisers, or depreciation of the value of its goodwill). Nor was evidence of the alleged infringer's inability to pay damages (impecuniosity) alone sufficient to constitute irreparable harm. In Weight Watchers International, Inc. v. Vale Printing Ltd., [2000] F.C.J. No. 777 (F.C.T.D.) the applicant alleged infringement of its marks "WEIGHT WATCHERS" and "WW" by the use of the "WEIGHT WATCHERS" trade-mark, the term "WW" and the domain names "wwcompanion.com" and "wwcompanion.net". The websites provided a world-wide forum for discussion and mutual support for weight loss or control. At the time of hearing, the alleged infringer had ceased displaying the "WEIGHT WATCHERS" trade-mark on its website. The applicant here met with mixed success. An injunction was grant preventing the alleged infringer from transferring the rights in the websites to a third party pending the outcome of trial, but the applicant failed to prevent the alleged infringer from using "WW" on its website as there was no proof it held any right over the term "WW". See also Peinet Inc. v. O'Brien, [1995] P.E.I.J. No. 68 (P.E.I.S.C.T.D.).

g. Punitive Damages

The Courts show a general reluctance to grant complainants punitive damages. In Saskatoon Star Phoenix Group Inc. v. Noton, [2001] S.J. No. 275 (Sask. Q.B.) Justice Laing refused to grant the request for punitive damages, but opined that “[p]unitive damages may be appropriate in the future if, after several decisions such as this, the defendant or others persist in the activity [Emphasis added].”

For further information please do not hesitate to contract the author of this Article, Robert Omura