Summary Judgment Against Company and its President Finds “Deliberate, Willful and Knowing” Infringement
2045978 Ontario Inc., c.o.b. Chaps the Original v. Chaps Aldershot Inc. c.o.b. Lezley’s Chaps and Kevin Saunders 2009 FC 872 (Zinn, J.)

September 4, 2009

Laurent Massam for the Plaintiff, Chaps the Original
Chris Argiropoulos for the Defendants, Lezley’s Chaps and Kevin Saunders

Allowing the Plaintiff’s motion for summary judgment, the Federal Court of Canada found that Chaps Aldershot Inc., as well as its president and sole director, Kevin Saunders, had infringed the registered trade-mark CHAPS.  

The Plaintiff has carried on business as “Chaps the Original”, a restaurant in Burlington, Ontario since 1981, and its restaurant has become well known. The trade-mark CHAPS, in association with restaurant services, was registered in 2005.  

In 2006 the corporate Defendant purchased the restaurant business from a third party, including the goodwill and trade name associated with that business. Thereafter the Defendants carried on the business under the trade name Lezley’s Chaps. The business was located on the same street as the Plaintiff’s restaurant, six kilometres away. Besides restaurant services, the Defendant’s business offered in-house musical entertainment from live rock and pop musicians.

The Plaintiff filed a motion for summary judgment to obtain a permanent injunction against the Defendants restraining them from directing public attention to their services or business in such a way as to cause or be likely to cause confusion with the services or business of the Plaintiff's services or business, and from infringing their registered trade-mark CHAPS contrary to Sections 19 and 20 of the Trade-marks Act.

In July 2009, a case management teleconference was held with Prothonotary Aalto, and a timetable was set out with respect to the steps in the motion for summary judgment. The Plaintiff complied with the timetable; the Defendants did not. No Motion Record was filed by the Defendants. An affidavit of Defendant Kevin Saunders was filed late, without adequate or acceptable explanation. The Plaintiff objected to the affidavit being admitted. The Court agreed to exclude it, noting that even if the court had been inclined to accept the affidavit, the affidavit would have been given little if any weight, in light of inconsistencies with the affiant’s previous admissions under oath on his examination for discovery. 

The Court observed the inadequacy of the Defendant’s submission, noting that it contained no evidence. “It is well settled that a response to a motion for summary judgment must set out specific facts showing that there is a genuine issue for trial. The responding party cannot simply rely on the statements and denials in its pleadings but must put its ‘best foot forward’ by leading evidence and submitting argument that there is a genuine issue requiring a trial.” The Court further noted that Mr. Saunders’ earlier admissions, on examination for discovery, had established on a balance of probabilities that all of the material claims alleged in the Statement of Claim had been proved.

Accordingly, the Court made a finding of confusion on the basis that the most prominent word in the Lezley’s Chaps signage and advertising was the word “Chaps”, that the name Lezley’s Chaps was intended to convey to the public that it was a Chaps restaurant, and that Mr. Saunders himself was aware of the existence of such confusion. Indeed, the Court went further in finding that Mr. Saunders “engaged in a deliberate, willful and knowing pursuit of a course of conduct that he knew constituted infringement of the Plaintiff’s trade-mark,” and found him personally liable for the infringement. Among its orders, the Court disallowed the transfer of the website name www.lezleychaps.ca to anyone or any entity other than the Plaintiff. 

By: Ruth M. Corbin, CorbinPartners Inc., and Osgoode Hall Law School