Don’t Underestimate the “Goliath” Factor: The Dangers of Policing Trademarks Too Aggressively
April 26, 2012
In its March 30, 2012 Lassonde v. L’Oasis d’Olivia decision, the Quebec Court of Appeal unanimously reversed a Superior Court decision awarding $100,000 in solicitor-client costs and $25,000 in punitive damages against Industries Lassonde Inc. (Lassonde) because Lassonde’s trademark infringement action and motion for injunction was considered to be an abusive legal proceeding. However, Lassonde’s victory was short-lived as an article published a week later on the La Presse newspaper’s website went viral among internet users in Quebec and quickly spurred a social media backlash against Lassonde, ultimately leading Lassonde to backtrack and agree to pay L’Oasis d’Olivia’s legal fees.
Lassonde, manufacturer of the well-known OASIS brand juice, and owner of numerous Canadian OASIS trademarks, has a history of opposing third-party OASIS marks.
L’Oasis d’Olivia is a small home business selling products such as massage bars and body lotion using the mark OLIVIA’S OASIS.
In 2005, Lassonde commenced a trademark infringement action against L’Oasis d’Olivia claiming likelihood of confusion between its OASIS mark and the OLIVIA’S OASIS mark. It also opposed L’Oasis d’Olivia’s trademark application for OLIVIA’S OASIS & Design, but later abandoned the opposition. Toward the end of a five-day trial in October 2009, L’Oasis d’Olivia’s lawyers brought a motion alleging that Lassonde’s action constituted an abusive legal proceeding under new provisions of the Quebec Code of Civil Procedure (also known as anti-SLAPP provisions). In support of this motion, L’Oasis d’Olivia presented evidence showing prior instances where Lassonde had asserted its trademark in a seemingly aggressive manner against other parties that were using the OASIS mark for wares unrelated to juice. In addition to dismissing Lassonde’s infringement action, the trial judge, before making the above-noted award, found that Lassonde, with its “economic power and experience used a shotgun approach to attack Defendant simultaneously on several fronts with [its] full might, attempting… to intimidate and thwart Defendant from its legitimate use of its trade name and trade-mark.”
Lassonde appealed only on the issue of costs and punitive damages. In a short judgment, the Appeal Court concluded that there was no abuse of procedure for the following reasons:
- A trademark owner who concludes that there is a likelihood of confusion between the applied-for mark and its own mark has a right to oppose and, in parallel, to seek an injunction.
- In this case, the Superior Court’s decision was detailed and long, demonstrating that the action was not clearly destined to fail.
- There is a presumption that a party acts in good faith, and in this case, there was insufficient evidence to show that Lassonde had acted in bad faith.
The Appeal Court’s ruling suggests that a high bar has been set for success under the Anti-SLAPP provisions of the Quebec Code of Civil Procedure, particularly since bad faith must be demonstrated.
The Appeal Court indicated that lack of evidence was material in this decision. Had L’Oasis d’Olivia been able to provide further evidence that Lassonde had acted in bad faith, it may well have been successful in its pleading of abuse of procedure.
Parties undertaking legal proceedings in the Quebec courts should be aware of Quebec’s Anti-SLAPP provisions, and the potential cost awards related thereto.
Beyond the Courts
About a week later (at 5:00am on April 7, 2012), La Presse published an article describing L’Oasis d’Olivia’s eight-year legal battle with Lassonde, using the heading “David and Goliath” to describe the two parties. The article went viral, and by 1:00pm, had already produced, on various social media sites, a wave of negative comments directed towards Lassonde regarding its heavy-handed behaviour. Before the end of the day, Lassonde had agreed to pay L’Oasis d’Olivia’s legal fees.
When trademark rights holders assert their rights too aggressively, especially against smaller parties, even where they do not lose in court, they risk losing in the court of public opinion.
What the public will consider improper or abusive may differ drastically from the principles applied by the courts. With the speed and prevalence of social media, rights holders should consider not only their legal rights, but also the PR implications of their actions.
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