Federal Court of Canada Awards Damages for Infringement of HOSTESS Trademark

On April 9, 2021, the Federal Court of Canada (the Court) issued its decision in Boulangerie Vachon Inc. v Racioppo, 2021 FC 308, in which it granted Boulangerie Vachon Inc., Vachon Bakery Inc., and Canada Bread Company, Limited (collectively, the Plaintiffs) damages for infringement of the trademark HOSTESS.

The Plaintiffs alleged that Mr. Racioppo, Natural Stuff Inc, and Hostess Bread Company Inc (collectively, the Defendants) had infringed three registered trademarks owned by the Plaintiffs by selling bread products in association with the trademark HOSTESS and the trade name Hostess Bread Company Inc. The Defendants argued that the HOSTESS trademarks had lost distinctiveness given that other traders were using the mark in the marketplace.

After determining that the case was suitable for summary trial, the Court considered whether the Plaintiffs’ registrations were invalid for lack of distinctiveness. The Court dismissed the Defendants’ arguments that the HOSTESS trademarks were non-distinctive, concluding that there was no evidence of widespread unregistered, unlicensed and unenforced use by many traders in the marketplace. Instead, the Court held that the only evidence of use in the marketplace was that of the Plaintiffs and the Defendants. Therefore, the Court held that the Plaintiffs’ registrations were valid and enforceable.

The Court conducted a confusion analysis, and ultimately concluded that Natural Stuff Inc’s and Hostess Bread Company Inc’s use of the HOSTESS mark with bread products infringed the Plaintiffs’ registered trademarks, constituted passing off, and depreciated the goodwill in the Plaintiffs’ registered trademarks. However, the Court held that the defendant, Mr. Racioppo, was not personally liable. The Court granted the Plaintiffs declaratory and injunctive relief and damages in the amount of $10,000.

Summary By: Michelle Noonan