On January 3, 2025, the Federal Court (per McVeigh J) dismissed an application alleging passing off of the unregistered trademark “Indican Pictures” because the Applicant did not establish use of its mark prior to the Respondent beginning to use its allegedly confusing marks.
2K4 Inc. (Indican Pictures) v. Indiecan Entertainment Inc., 2025 FC 20
Background
2K4 Inc. (operating as Indican Pictures; the “Applicant”), a California-based film distributor, brought an application alleging passing off against IndieCan Entertainment Inc (the “Respondent”), a Canadian company. The Applicant claimed that it had used the Indican Pictures mark in association with television, radio, and film distribution services in Canada since at least 2000, and alleged that the Respondent’s use of the name and mark “IndieCan” and similar marks including “IndieCan Entertainment” (collectively, “IndieCan Entertainment Mark”) gave rise to confusion, contrary to paragraph 7(b) of the Trademarks Act.
The Applicant described itself as having distributed over 400 films in various genres worldwide, including Canada. The Applicant asserted to have used “Indican Pictures” within Canada since at least 2000, while the Respondent had begun operating under “IndieCan Entertainment” since its incorporation in 2011.
Legal Tests
The Court began by observing that paragraph 7(b) of the Trademarks Act codifies the common law tort of passing off, and that “passing off occurs when a person misleads the public into believing their goods or services are associated with or come from another business, causing confusion and harming the original business’s reputation or goodwill.”
The Court also noted that, for a passing off claim under the Trademarks Act, a claimant must possess a valid and enforceable trademark, registered or unregistered. Beyond this threshold requirement, a claimant alleging passing off must establish: (1) the existence of goodwill in the trademark; (2) public deception caused by a misrepresentation; and (3) actual or potential damage.
Relevant Date
The Respondent argued that the relevant date for assessing passing off was in 2011 when it first entered the market using its mark whereas the Applicant argued that the relevant date was either 2019, when the Respondent’s activities rose to level that constituted misrepresentation and caused confusion, or alternatively, 2023 when all the Respondent’s alleged marks were being used.
The Court, in the present case, concluded that 2011 was the relevant date, since that was when the Respondent was alleged to have started directing public attention to its services in a manner alleged to be confusing. The Court found the later dates argued by the Applicant were not justified under the case law, which has held that the “relevant date for a passing off claim is when the alleged misdirection of the services or goods first began.”
Did the Applicant Have an Enforceable Mark at the Relevant Date?
Since the Applicant was relying on an unregistered trademark, it bore the onus of proving use of its mark in Canada before 2011. The Court decided the Applicant had not met its onus for the following reasons.
First, the Court emphasized that cases on prior use “often turn on the quality of the evidence provided by the trademark owner” and “bare assertions of use will not be enough”. For example, mere advertising of services in Canada is not enough to establish use in association with a service because “some aspect of the services must be performed or delivered in Canada”.
Second, the Court held that the relevant consumers for the Applicant’s services were “B2B” firms along the supply chain of film production, i.e., the intermediaries. The Court found that the Applicant’s evidence did not show it offered its services to the Respondent’s consumers, namely moviegoers in Canada.
Third, the Court rejected the Applicant’s argument that it offered its services to intermediaries who in turn offered the services to moviegoers, thus amounting to the use of the trademark in association with the service. The Applicant did not provide any evidence establishing it was part of the film distribution services in Canada in 2001. The Court further held that the Applicant did not provide any evidence to confirm that theatres or sub-distributors provided the services (distributed films) on behalf of the Applicant.
Ultimately, the Court held that the Applicant had not met its burden to provide use of the Indican Pictures mark in Canada in association with film distribution services prior to the relevant date either directly or through intermediary players as there was no clear evidence to establish that the Applicant distributed films in Canada before the relevant date. In view of this finding, the Court found it was not necessary to apply the three-prong passing off test.
Passing off analysis
Despite its holding, the Court nevertheless proceeded in obiter to assess if the passing off test was met, and held that the Applicant had not proven it had goodwill in its mark at the relevant date and that the Respondent’s use of its marks resulted in likely deception of the public due to a misrepresentation.
Goodwill. The Court noted that to establish goodwill, factors such as inherent distinctiveness, acquired distinctiveness, length of use, volume of sales, and extent of marketing must be proven to establish an association of the trademark in the mind of relevant consumers. Such goodwill must be established before the relevant date to establish passing off. The Court found that any goodwill in the mark seemed confined to the United States; the mark did not possess goodwill in Canada as of the relevant date.
Misrepresentation. The Court further concluded that there was no misrepresentation by the Respondent to deceive the relevant consumers of film distribution services arising from its use of its mark. Since the Applicant had not established it had trademark rights in Canada as of 2011, the Court found that it was the Respondent that actually had rights in the mark in association with film distribution services. As such the Respondent cannot be found to have misled consumers. However, the Court went on to state that “assuming the Applicant had established use and goodwill”, it would have found misrepresentation.
Damages. The Court also found that there was insufficient evidence adduced by the Applicant to conclude it had incurred any loss caused by the Respondent’s use of its mark in Canada.
Conclusion
The Court ultimately dismissed the application because the Applicant did not establish use of its mark in Canada at the time the Respondent began its impugned activities. This ruling showcases the importance of providing specific evidence to establish prior use, especially in the case of unregistered trademarks.
The Applicant has 30 days from the date of the judgment to appeal to the Court of Appeal as of right.