Federal Court Finds Passing Off In Vehicle Rental Dispute

On July 13, 2026, the Federal Court of Canada (FC) issued its decision in Advantage Car & Truck Rentals Ltd. v Orlando Rentco LLC, 2026 FC 933,  finding that Orlando Rentco LLC (Orlando) engaged in passing off of various unregistered ADVANTAGE trademarks (collectively, the Marks) owned by Advantage Car & Truck Rentals Ltd. (Advantage) contrary to subsection 7(b) of the Trademarks Act.

Since 1991, Advantage used the Marks in association with its vehicle rental business in the Greater Toronto Area (GTA). In January 2023, Orlando entered the GTA market, promoting its vehicle rental services in association with its own trademarks, including, among other things, ADVANTAGE and ADVANTAGE RENT-A-CAR (the Impugned Marks). In May 2023, Advantage brought an action against Orlando and other entities alleging passing off of its Marks and, following Orlando’s Statement of Defence being struck and its failure to comply with the FC’s prior orders in the matter, Advantage was granted permission to bring a motion for default judgement against Orlando.  

In its review of the matter, the FC first confirmed that three elements must be met to establish passing off under subsection 7(b) of the Trademarks Act: (1) the existence of goodwill; (2) deception of the public due to a misrepresentation; and (3) actual or potential damage to the plaintiff.

The FC found that Advantage established a strong reputation and goodwill associated with the Marks through its continuous use and promotion of the Marks, including generating nearly one million rental agreements since 1991 and operating an active social media presence that featured the Marks. The FC also found a sufficient likelihood of confusion and noted that Advantage provided evidence of actual confusion occurring within weeks of Orlando’s entry into the market when it received phone calls, emails, and enquiries from consumers related to Orlando. With respect to damages, the FC held that Advantage potentially suffered damage in connection with Orlando’s use of the Impugned Marks, which was due to losing control over the reputation, goodwill and distinctiveness associated with its Marks.

Based on its findings, the FC granted default judgement in favor of Advantage, permanently enjoining Orlando from using the Impugned Marks in association with vehicle rental or leasing services in the GTA, and ordering Orlando to pay Advantage a total of $110,000 in costs and damages.

Summary By: Uday Bahal