On February 2, 2022, the Federal Court of Canada (the Court) released its decision in 1196278 Ontario Inc DBA Sassafraz v 815470 Ontario Ltd DBA Sassafras Coastal Kitchen & Bar, 2022 FC 116.  In that decision, the Court granted declaratory and injunctive relief, and nominal damages, for trademark infringement and depreciation of goodwill of the registered trademark SASSAFRAZ.

The Applicant, 1196278 Ontario Inc, doing business as Sassafraz, operates the well-known SASSAFRAZ restaurant in the Yorkville district of Toronto, Ontario, and is the owner of the registered trademark SASSAFRAZ.  The Respondent, 815470 Ontario Ltd, doing business as Sassafras Coastal Kitchen & Bar (SCKB), operates a restaurant in the Niagara Peninsula region in association with various trademarks and trade names that include the word SASSAFRAS.

The Applicant sought a declaration of trademark infringement and depreciation of goodwill, under sections 20 and 22 of the Trademarks Act, respectively.

In its confusion analysis, the Court concluded that there was a substantial degree of resemblance between the words SASSAFRAS and SASSAFRAZ, noting that the relevant assessment for the degree of resemblance should not be conducted on a “syllable by syllable” basis, but rather as a whole.  The Court found that the factors of inherent distinctiveness, length of use, and overlap in the nature of the goods, services, and trade all weighed in favour of the Applicant.  On the issue of the lack of evidence of actual confusion, the Court noted that it was not appropriate to draw an adverse inference in this case, given that the COVID-19 pandemic had imposed lengthy shutdowns and disruptions to the normal operations of restaurants.  The Court also noted that the geographic separation of the parties’ restaurants does not play a role in the hypothetical confusion test.

On the issue of depreciation of goodwill, the Court held that the Respondent’s use of SASSAFRAS was likely to have the effect of “blurring the image” and “whittling away” the power of SASSAFRAZ to distinguish the Applicant’s services.  The Court also noted that the Respondent’s use of SASSAFRAS erodes the Applicant’s ability to control the manner in which its SASSAFRAZ trademark is used, and “is also a form of free-riding on the reputation of the SASSAFRAZ mark”. 

The Court granted an injunction and awarded damages of $15,000.

Summary By: Michelle Noonan


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