Commercial law, unfair competition: the protection of trade names and the notion of confusion

Commercial law and unfair competition. In arecent judgment, the Superior Court dismissed a motion to institute proceedings for an interlocutory injunction that aimed to prohibit the use by the defendant, Denis Brisson Excavation inc., of its name, "Inspection Conduits Saguenay", which according to the plaintiff, Nettoyage de Conduits Souterrains inc., was likely to cause confusion among consumers. (Nettoyage de Conduits Souterrains inc.v.Excavation DenisBrissonInc.,QCCS2012 4528).

THE FACTS

The plaintiff, established in 1995, operates under the name "Nettoyage de Conduits Souterrains inc." in the Saguenay-Lac-St-Jean region and argues that its company is well known by the acronym "NCS". The defendant was incorporated in 1991 under the name of "Excavation Denis Brisson inc.", but in February 2012, creates a new division within the company offering inspection and cleaning services of underground conduits, thereby competing with the plaintiff. In result, the defendant begins to use the name "Inspection Conduits Saguenay" and the acronym "ICS".

In May 2012, the plaintiff sends a notice to the defendant demanding that it stop using the name “Excavation Denis Brisson inc.” and the acronym "ICS". Through the use of such names, the plaintiff argues that the defendant is unfairly competing with it, as there is a possibility of confusion between the names and the acronyms used by both companies. The defendant refuses to comply with the request of the plaintiff who finally files a motion to institute proceedings for an interlocutory injunction.

THE ARGUMENTS OF THE PARTIES

The plaintiff, relying on the protection of its trade name and its acronym, argues that the confusion comes from the visual, auditory and phonetic similarities between the corporate names used by the two companies. Consequently, the plaintiff believes that as the risk of confusion among the public is likely to redirect some of its customers towards the defendant, the latter is practising unfair competition. Finally, the plaintiff argues that the use of the trade name "Inspection Conduits Saguenay" is a prejudicial practice on the part of the defendant.

The defendant denies all unfair competition allegations and continues to believe that given the free market, the use of its name and its acronym does not cause any real prejudice to the plaintiff.

THE SUPERIOR COURT’S DECISION

Following the revision of the conditions necessarily met in order for an interlocutory injunction to be issued, the Superior Court also takes into account the criteria necessary to determine whether or not, confusion, as is defined by the Trade-Mark Act, exists in the circumstances. These criteria, created by jurisprudence, include the existence of goodwill, the deception of the public due to misrepresentation and any actual or potential damages suffered by the plaintiff. The only issue challenged in this particular case is the existence of confusion, alleged by the plaintiff and denied by the defendant, and the public deception and misrepresentation that it may entail.

Basing its decision, in part, on the very notion of confusion, the Court notes that the existence of confusion is not obvious in this particular case, as there is a notable difference between the terms used within the two companies’ corporate names. The plaintiff alleges that it is rather the form that is likely to cause confusion in the public’s eyes and that the Court needs to focus on the manner in which the companies’ names and their acronyms are presented to the public by the parties. Referencing ss. 6 of the Trade-Mark Act, the Superior Court states that the a trademark or trade name only creates confusion with another trademark or trade name used in the same geographical region when the use of these two names seem to imply that the two businesses are being run by the same person.

The Court then goes on to explain that when the question of confusion and misrepresentation is at hand, it is necessary to conduct a general review, keeping in mind the probable opinion of a reasonable and prudent consumer, as well as the standard of the first impression. In order to do this, the Court uses the jurisprudential principle stating that the reasonable consumer consists of an individual who only has a general recollection of company trademarks. The Superior Court concludes that, in this case, an average customer would not be confused by the names of the two companies involved. There exists distinctiveness to each of the companies’ names, notably in their presentation (color, font, the overlapping angle, etc.). The Court also considers the fact that the defendant’s use of "Inspection Conduits Saguenay" for its division is always followed by its company name, "Excavation Denis Brisson inc.”, a trademark that has been easily recognizable for the last twenty years. All these distinguishing factors are not likely to create confusion for an ordinary consumer, and therefore, the Court finds that the plaintiff has failed in establishing its right to an interlocutory injunction. Dubé Légal inc., Montréal commercial law lawyers.