Federal Court Dismisses Claim For Passing Off And Trademark Expungement On Summary Trial

On January 10, 2022, the Federal Court of Canada (the Court) in Mainstreet Equity Corp. v Canadian Mortgage Capital Corporation, 2022 FC 20, dismissed an action by Mainstreet Equity Corporation (Mainstreet) for expungement of a registered trademark and passing off.

Mainstreet alleged that several named defendants’ use of registered and unregistered marks violated Mainstreet’s trademarks.  Mainstreet also argued that the defendants’ actions were particularly egregious because, in an earlier opposition proceeding, the Trademarks Opposition Board (TMOB) refused an application by one of the defendants, the Canadian Mortgage Capital Corporation (CMCC), to register a design that was virtually identical to the one it is now using.  Mainstreet also sought to expunge a similar trademark registration owned by another defendant, Atrium Mortgage Investment Corporation (Atrium), that registered prior to the TMOB decision.

First, the Court assessed whether this case was suitable for summary trial.  The Court determined that there was sufficient evidence for adjudication of the issues, and credibility was not a significant factor.  The Court held that summary trial would be just and efficient in the circumstances.

Second, the Court found that Mainstreet had established that both its composite mark and design mark were used on a consistent basis, and were valid, enforceable unregistered trademarks. 

The Court dismissed Mainstreet’s passing off claim finding that Mainstreet had failed to establish a likelihood of confusion.  The Court held that the degree of resemblance between the trademarks was low, the channels of trade were different, the parties’ customers would spend some time before deciding to rent or invest, and the marks co-existed in several major Canadian cities for several years without any evidence of confusion.

The Court also dismissed Mainstreet’s request to expunge Atrium’s registered trademark.  Based on the evidence, the Court found that Atrium had the right to use the trademark when it was registered and the trademark was distinctive of Atrium when Mainstreet commenced the action.

Summary By: Michelle Noonan