On June 17, 2021, the Federal Court of Canada (the Court) issued its decision in H-D U.S.A., LLC v Varzari, 2021 FC 620, in which Justice McHaffie found in favour of H-D USA, LLC and Harley-Davidson Canada LP (collectively, the Applicants) for trademark infringement, passing off and depreciation of goodwill in relation to custom-built electric bicycles sold by Mr. Varzari.

H-D USA, LLC is the owner of registered trademarks for HARLEY-DAVIDSON, H-D, and Bar and Shield design marks.  Mr. Varzari was advertising an electric bicycle as the “Harley Davidson Willie G Edition”, noting that various parts of the bicycle were “all original parts from the factory”.  A logo almost identical to Harley-Davidson’s White Bar and Shield trademark appeared on the bicycle frame (shown at right), and HD also appeared on the handgrips.  The Applicants claimed that Mr. Varzari’s use of the marks constituted infringement contrary to section 20, passing off under subsection 7(b), and depreciation of goodwill under section 22 of the Trademarks Act.  Mr. Varzari did not respond to the application.

The Court conducted a confusion analysis and concluded that there was a likelihood of confusion.  The Court noted that electric bicycles are very close in nature to motorcycles, especially given that motorcycles can include electric motorcycles.  The Court also concluded that Mr. Varzari’s use of “The ‘H’ Edition” was also confusing with the HARLEY-DAVIDSON mark.

The Court also held that Mr. Varzari’s use of modified Harley-Davidson parts in his electric bicycles constituted infringement.  The Court stated that Mr. Varzari had altered and incorporated the parts into a new good in such a way that the new good, electric bicycles, bore the trademarks and suggested an association with Harley-Davidson.  For these reasons, the Court held that this was not simply lawful reselling of trademarked goods.

The Court also held that the Applicants had established their claim for passing off and depreciation of goodwill.  The Court awarded damages of $13,000 and costs in the amount of $23,000.

Summary By: Michelle Noonan


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