On December 9, 2020, the Federal Court of Appeal of Canada (FCA) issued its decision in Group III International Ltd v Travelway Group International Ltd, 2020 FCA 210, finding that a trademark registration is a defence to damages or an accounting of profits during the period that it is registered.

This was the second appeal involving the appellant Wenger SA’s application for relief under the Trademarks Act

In 2017, the FCA allowed Wenger SA’s first appeal, finding that Travelway’s marks were likely to be confused with Wenger SA’s trademarks (previously reported by the E-TIPS® Newsletter here).  The FCA referred the issues of expungement and damages to the Federal Court (FC).

In 2019, the FC expunged Travelway’s trademarks (previously reported by the E-TIPS® Newsletter here).  On the issue of damages, the FC held that Wenger SA was not entitled to damages or an accounting of profits, finding that Travelway should not be liable for damages during the period in which its own trademark registrations were in effect.

On this appeal, the sole issue was whether Wenger SA was entitled to monetary compensation for Travelway’s pre-expungement use of the infringing marks.  The FCA made a distinction between damages for infringement and damages for passing off.

The FCA held that damages for infringement are generally not available if the infringing mark is registered because of the rights conferred under section 19 of the Trademarks Act, unless there is evidence of fraud, wilful misrepresentation or bad faith in obtaining the trademark registration.  With respect to damages for passing off, the FCA concluded that “the jurisprudence indicates that the registrations of the trademarks are a complete defence to the action of passing off.”  The FCA noted that the FCA’s “2017 decision finding passing off should not be followed as authority in future cases.”  Given that Travelway had not appealed the FCA’s finding on passing off and the finding could not be relitigated, the FCA awarded Wenger SA an accounting of profits.

Summary By: Michelle Noonan


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