In Ontario, there is something called a “Passing Off Claim.”

Passing off is when a person or company infringes on the trademark or goodwill of another individual or person. It is a claim under Trademark law.

Of course, trademark laws are the most complex litigation, and often go on for years and cost a lot of money. Make sure to get legal advice from a lawyer that focuses on trademark litigation before starting a claim.

If you wish to start a passing-off claim, or if you need to defend one, contact us. You can fill out the form on the side of this page. We have lawyers in  Ontario that can assist you.

Passing off happens when someone deliberately or unintentionally passes off their goods or services as if they belonged to another party. This action of misrepresentation often damages the goodwill of a person or business, causing financial or reputational damage.

What Is Required For The Claim?

Passing off claims is very difficult. There are three different parts to the claim.

You need to own the trademark, copyright, or goodwill that you put into the product, service, or name. It needs to be something that you can own.

Someone needs to have purposely deceived the public that they were reaching out to your company. Watch out for disclaimers or language. It needs to be obvious they are trying to steal your goodwill.

This is often the hardest part. You will need to prove the damage. You will have to get an idea of how much revenue was stolen.

Let’s offer a simple example. Your company sells the child’s toy “Baby Shark Fingerlings.” A Google search shows that this product is sold online by Walmart and Best Buy.

Let’s say both Best Buy and Walmart give you a 10% royalty for every Baby Shark Fingerlings that they sell.

Suddenly, you see a company called “Shanghai Online Sales.” They list Baby Shark Fingerlings as a product they carry.

Walmart sells your product for $8, and Best Buy for $20. However, Shanghai Online Sales (a company we made up), sells it for $2.

Even more worrying, Shanghai Online Sales doesn’t have a royalty agreement with you. If something like this happened to you, we have litigation lawyers in China that can help.

Passing off tort in Ontario

It is very hard to win a passing-off lawsuit if you don’t have something tangible. You really need something like a trademark, product, or something like a sign.

It is not required that the trademark be registered. Although if it’s an unregistered trademark, the claim is even harder.

The damages need to be real. In the Baby Shark Fingerlings example, you could get a court order for disclosure around their sales. If they sold $1 million of products, that’s the amount of damages you would be seeking.

If you are wanting to file a claim under the passing off tort because someone created a profile of you online, that’s very hard. What kinds of damages were there?

For example, if you Google “Alistair Vigier” you will see there are a number of unauthorized websites. The first is Google itself, which has indexed our information.

Then there is TNB, Fandom, Alignable, and many others. The Better Business Bureau even creates a profile for everyone. It doesn’t matter if you want it or not.

Google has been sued countless times. Many people want to get their information taken off Google.

Lawsuits For Passing Off in Ontario

You can apply to the courts for the following things. This could be an injunction to get your products or goodwill taken down. This is easier than seeking damages.

You can also seek damages from a court in Ontario.

It can be assumed the response to the notice of civil claim would be that there is no trademark. Also, the issue in question is not distinctive, and you don’t own it.

Further, there are no damages. Don’t forget, you have the burden of proof as the plaintiff.

Canada’s Trade-marks Act

No person shall direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada

In conclusion, the easiest way to defend a passing-off claim is to make it clear that you are not the product or service.

You can list some information, and then say something like “If you are interested in another product, see this…” Make it so there is no confusion.

Lawsuits that made the News in Ontario

Notable for its unexpected twists, the “Blue Mountain Bottled Water Co. v. Glacier Springs Inc.” saga unfolded in Ontario courts. The bone of contention? Pure mountain water, a label, and the common law tort of passing off.

Blue Mountain, a prominent Ontario water bottler, sued Glacier Springs, alleging passing off. They claimed Glacier’s bottle labels mimicked theirs, causing public confusion. The case kicked off in 2016, plunging Ontario’s courts into debates on trademarks and business reputation.

Blue Mountain’s claim rested on three key grounds. First, they’d established a unique reputation associated with their label, recognizable to consumers. Statistically speaking, Blue Mountain boasted 85% market recognition in Ontario.

Ontario’s Legal Perspective on Passing Off Claims

Glacier’s actions amounted to misrepresentation. Finally, the misrepresentation had allegedly resulted in actual damage, as Blue Mountain reported a 7% loss in market share after Glacier’s product launch.

Judge Stephen T. Bale’s decision hinged on these criteria. Glacier’s label did bear striking similarities, he noted, from the logo’s colour scheme to the stylized font. The ‘pure mountain water’ phrase also appeared on both.

Defining misrepresentation was more challenging. Glacier’s defence was robust: they argued any similarities were simply coincidental. Given both companies sourced water from the same geographical area, shared elements were inevitable, Glacier contended.

Bale examined the evidence. He noted that although the labels had distinct similarities, the company names – Blue Mountain and Glacier Springs – were markedly different. Glacier Springs also argued that 60% of their customers were aware of the company difference, a statistic they had drawn from a consumer survey.

Passing Off Claims In Ontario

Reputation damage proved the deciding factor. Blue Mountain claimed a dip in its market share post-Glacier’s product launch. Yet, they struggled to link this directly to the alleged passing off. Ontario’s bottled water market had seen a 3% overall contraction in the same period, an industry trend Glacier Springs highlighted in their defence.

Bale’s 2017 decision came as a surprise. Despite acknowledging similarities between the labels, he found in favour of Glacier Springs. Without concrete proof of damage directly attributable to Glacier Springs, Blue Mountain’s case was insufficient.

The ruling sent ripples through Ontario’s business community. The case highlighted the complexities of passing off claims and the high evidential thresholds required.

In the end, the Blue Mountain versus Glacier Springs saga emphasized the intricacies of intellectual property law in the modern business landscape.