Sept 2021 Charity & NFP Law Update
Published on September 29, 2021
By Sepal Bonni
Charities and NFPs should be aware of the importance of maintaining the distinctiveness of their trademarks as demonstrated by the recent Federal Court decision in Sadhu Singh Hamdard Trust v Navsun Holdings Ltd. released on June 11, 2021. This decision follows a decade-long history of litigation between Sadhu Singh Hamdard Trust (the “Trust”) and Navsun Holdings Ltd. (“Navsun”). The present decision is a second redetermination of the passing off and trademark infringement issues between the two parties.
“Passing off” is a common law and statutory cause of action under the Trademarks Act that occurs when one party deceptively markets goods or services in a manner that confuses the public, usually taking advantage of the goodwill associated with a particular trademark. For a passing off claim to succeed, a party must prove: (1) the existence of goodwill; (2) deception to the public because of a misrepresentation; and (3) actual or potential damages to the plaintiff.
In the present case, the Trust alleged that Navsun’s logos (both an original logo and subsequently used modified logo) infringed and passed off the Trust’s AJIT logo and depreciated the value of the Trust’s AJIT logo. AJIT, a Punjabi term, was used in association with a newspaper widely-read among the Punjabi population in India.
In its redetermination, the Federal Court found that Navsun had engaged in passing off with respect to Navsun’s use of its original logo, in use between 1993 and 2009, although not with respect to Navsun’s use of its modified logo, in use as of September 2009. With regard to the original logo, the Federal Court found that the Trust had sufficient goodwill in 1993, the Trust’s logo was distinctive, and there was a likelihood of confusion between the Trust’s logo and Navsun’s original logo to support a passing-off claim. Importantly, with respect to the modified logo, the court found that the Trust did not meet the threshold for distinctiveness that is required for its passing-off claim to succeed, mainly because the distinctiveness of the Trust’s logo was displaced following the Navsun’s adoption of its modified logo in 2009.
The court further dismissed the Trust’s claims for infringement under sections 19 and 20 of the Trademarks Act, and for depreciation of goodwill under section 22 with respect to Navsun’s current, modified logo, as the court found it was neither identical nor “confusingly similar” to the Trust’s logo and given that Navsun’s modified logo had been used for around six years prior to the Trust’s trademark registration for its logo.
While the Trust was partly successful in its passing off claim, timely registration and enforcement of its mark may have potentially avoided a decade long dispute. To ensure the distinctiveness of a trademark is not eroded, charities and not-for-profits must actively monitor and enforce all registered and unregistered trademarks that they own. Where trademarks are not enforced in a timely manner, the trademarks may lose distinctiveness and be unenforceable.
Read the September 2021 Charity & NFP Law Update
