Worldwide - Trademark - Telugu Association Of North America: A Case Of Infringement In The Non-Profit World (2024)

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In a recent decision, the Federal Court dealt with a claimbrought by a U.S. based non-profit, Telugu Association of NorthAmerica (the "Applicant"), against aCanadian federal corporation and various individuals (collectivelythe "Respondents" and each a"Respondent") for trademarkinfringement, passing off, and depreciation of goodwill. This caseserves as a good reminder that trademark issues are not exclusiveto the for-profit industry, and that care also needs to be taken inthe non-profit world when incorporating and branding anorganization¹.

In its decision, the court noted that sections 19, 20, and 22 ofthe Trademarks Act, RSC 1985, c T-13 (the"Act") applied only to the trademarkwhich the Applicant had registered in Canada, which was the wordmark "TANA." The unregistered trademarks (two designmarks and the word mark "TELUGU ASSOCIATION OF NORTHAMERICA") were to be analyzed under section 7(b) of the Act,which pertains generally to unfair competition.

The TANA trademark was registered in association with"social organization service, namely, services relating topreserving and propagating the Telugu cultural heritages andmaintaining the identity of people of Telugu origin and to providea forum for Telugu literacy, cultural, education, social, andcharitable interactions among its members."

The Applicant submitted that they had used their varioustrademarks in Canada for some time (for instance, through socialmedia accounts or printed materials disseminated in Canada) andthat the Applicant had members located in Canada.

The Respondents, without the Applicant's permission, adoptedand used in Canada: (i) the trade name TELUGU ASSOCIATION OF NORTHAMERICA; (ii) both of the word marks used by the Applicant; and(iii) a design mark that was very similar to one of theApplicant's design marks. The corporate Respondent used thetradename and trademarks in advertising its business and services,which overlapped with those of the Applicant. In addition, the twoindividual Respondents were previously extensively involved withthe Applicant for many years, including as the Canadian regionalrepresentatives responsible for: (i) organizing the Applicant'sactivities within Canada; (ii) enrolling eligible persons withinCanada as members of the Applicant; and (iii) raising funds for theApplicant. The two individual Respondents appeared on theApplicant's website, at conferences, and were known to theCanadian public as the representatives of the Applicant inCanada.

Section 19 of the Act grants the Applicant, as owner of theregistered trademark, exclusive use of the TANA trademark inrespect of the registered services throughout Canada. The courtfound that since the TANA mark used by the Respondents wasidentical to the Applicant's registered mark, and used inconnection with identical services, the corporate Respondentinfringed the Applicant's TANA trademark under section 19 ofthe Act.

While infringements under section 19 of the Act requireidentical use of a mark, infringements under section 20 of the Actonly require use of a confusingly similar mark. The court outlinedthe following test for determining whether trademarks areconfusingly similar: whether, as a matter of first impression, acasual consumer somewhat in a hurry who sees the respondent'strademarks, having no more than an imperfect recollection of theapplicant's trademark, would be likely to think that therespondent's services would be from the same source as theapplicant's, regardless of whether the services are of the samegeneral class, having regard to all relevant surroundingcirc*mstances as set out in the Act (such as the inherentdistinctiveness of the trademark, the length of time it has been inuse, the nature of the services, and the degree of resemblancebetween the marks)². These factors weighed in favor ofthe Applicant since the Applicant's trademark was registered inCanada for over 10 years, it was well known by its Canadianmembers, there was clear overlap in the targeted communities, andthe marks were identical. Another factor weighing in favor of theApplicant was the confusion that could stem from the past extensiveinvolvement of the individual Respondents with the Applicant. As aresult, the court found that the corporate Respondent infringed theApplicant's TANA trademark under section 20 of the Act throughits use of a confusingly similar word mark and design mark.

The court also considered the Applicant's unregistereddesign marks and whether the Respondents' use of confusinglysimilar marks constituted passing off under section 7(b) of theAct. This section of the Act codifies the common law tort ofpassing off and requires the applicant to establish that:

1. There is goodwill in the applicant's trademark;
2. The respondent deceives the public by misrepresentation (thiselement will be met if the applicant shows that the respondent useda trademark that is likely to be confused with the applicant'smark); and
3. The applicant has suffered actual or potential damage throughthe respondent's actions³

The court found that the Applicant had established a reputationand goodwill in each of its trademarks amongst Canadian consumersand that the mark used by the Respondents was likely to be confusedwith the Applicant's mark. While there was no evidence showingthat the Applicant had lost members, sales or revenue as a resultof the Respondents' use of their marks, the Applicant arguedthat it had lost control over of the use and commercial impact ofits trademarks, and the court agreed that that was sufficientevidence to show that actual or potential damage had been suffered.The court concluded that the test for passing off had been met.

Finally, the court also found that the use of the registeredtrademark by the Respondents had the effect of depreciating thevalue of the goodwill attached thereto, contrary to section 22(1)of the Act. The Applicant referred to instances of theRespondents' use of its marks in an unprofessional manner andin ways that would not have been condoned by the Applicant. Thecourt agreed that the trademark's association with such eventsdamaged the reputation and goodwill of the Applicant and concludedthat the corporate Respondent's activities depreciated thevalue of the goodwill attached to the trademarks.

The court awarded damages in the amount of $18,750 and costs inthe amount of $13,000 to the Applicant.

While this is an extreme case of one organization offeringidentical services to an identical community using the same orsimilar marks as a pre-existing organization, this case serves as agood reminder that organizations need to be mindful of trademarkissues when incorporating and branding, and that trademark ownershave rights, regardless of whether their mark is registered.

Footnotes

1. Telugu Association of North America, a Corporationof the State of Maryland, USA v. Telugu Association of NorthAmerica, a Canadian Federal Corporation with No. 1243934-4,2024 FC 631.

2. Ibid at para 29.

3. Ibid at para 38.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.