Kaira District Co-Operative Milk Producers’ Union Ltd. and Ors. v. Amul Canada and Ors.

Introduction

The Federal Court of Ontario (Canada) (“Court“), through its judgement, in the recent matter Kaira District Co-Operative Milk Producers’ Union Ltd. and Ors. v. Amul Canada and Ors. (dated 22nd June 2021) decided on the Kaira’s first trademark violation case in a foreign land. The Court delved into Section(s) 7(b), 19 and 20(1)(a) of the Trademarks Act, RSC 1985, c T-13 (“Trademarks Act”) and Section 27 of the Copyright Act, RSC 1984 (“Copyright Act”). and passed the judgment favouring Kaira District Co-Operative Milk Producers’ Union Ltd. (“Appellant“) ordering Amul Canada and Ors. (“Respondents“) and ordered to compensate CAD 32,733 to the Appellant.

Facts Of The Case

In the present suit, the Appellant is in the business of manufacturing and marketing milk products. It claims to be the world’s largest vegetarian cheese brand and the world’s largest pouched milk brand. The Respondent is a company that markets and sells dairy products in Canada under the trademarks ‘AMUL’ and ‘Amul Canada Limited’ using the social media platform LinkedIn without the permission of the Appellant.

The Respondents breached the exclusive right of Appellants to use its trademark and copyright. The Respondents replicated the Appellant’s precise marks and designs and the information available on its website about the Respondent’s background and activities. Hence, Kaira filed a complaint with the Federal Court of Ontario, stating that Amul Canada had violated her trademark and copyright rights in Canada. Kaira asserted that it has never granted Amul Canada any license to use its trademarks or copyrighted information, nor has it given Amul Canada any consent to do so. It had also sent a cease-and-desist notification to Amul Canada, which had gone unanswered by the company. Amul Canada never reacted to any of the materials that were properly served in accordance with the Federal Court Rules, or to any of the orders and directions issued by the Federal Court. As a result, the Appellant filed a motion in court asking for a permanent injunction against the Respondent’s use of its trademark and copyright.

Court’s Observation and Analysis

Following questions were raised before Federal Court, which has been discussed below –

1. Whether the Respondents are liable for the act of passing-off under Section 7(b) of the Trademarks Act?In determining whether or not the Respondents are responsible for the Act of passing-off, the Court read Section 7(b) of the Act and relevant criterion to establish passing-off.Section 7(b) of the Act states that no party shall “direct public attention to his wares, services, or business in such a way as to cause or be likely to cause confusion in Canada” between its wares, services, or business and those of another party.The elements for establishing passing off are-
   1. The existence of goodwill;
   2. The deception of the public due to representations, and;
   3. Actual or potential damages to the plaintiff

The existence of goodwill  For more than 50 years, the Appellant’s brand has been in the business of manufacturing and distributing milk products. According to a sample of invoices from 2013 and 2020, the volume of milk and cheese distribution in Canada indicates that milk products worth more than $100,000 were imported into Canada. The evidence implies that Appellant’s items have developed a reputation in the marketplace. The deception of the public due to misrepresentations The act of misrepresentation confuses the minds of the consumers. The Respondents copied the Appellant’s logo, name, and design, put it on its LinkedIn page, and advertised its products using it. Consumers’ minds are likely to be influenced by this misrepresentation.

Actual or potential damages to the plaintiff The Respondents falsely claimed ownership of the Appellants’ product. Without the approval of Appellant, sales, marketing, product distribution, and employee recruiting were carried out under the name of Appellant’s trademark Amul. Hence, the act of misrepresentation by Respondents created confusion amongst the public. As a result, there has been an injury to the goodwill that cannot be overlooked. Therefore, the Court held that it is a clear case of passing-off.

2. Whether the Respondents are liable for the violation of provisions of Section 19 and Section 20 of the Trademarks Act?A trademark infringement case brought under Section 19 of the Trademarks Act allows a registered trademark owner to prevent the unauthorised use of an identical trademark in connection with identical goods and services. A trademark infringement case brought under Section 20, on the other hand, allows a registered trademark owner to prevent others from using trademarks or trade names that are confusingly similar to the registered trademark.The trademark of the Appellant was a registered mark. Under Section 19 of the Trademarks Act, the Appellant has the sole right to use those items and services throughout Canada. The Respondents copied the Appellant’s logo, name, and design, posted it on its LinkedIn page, and advertised its products. Though the Court found the motive behind promoting the trademark on the AMUL Canada website unclear, the Appellant alleged that the Respondents could be phishing for personal information and improperly recruiting potential employees or distributors.Thus, the Court opined that unauthorised use of the Appellant’s mark per se is a clear violation of Section 19 and Section 20(1)(a) of the Trademarks Act.
3. Whether the Respondents are liable for the violation of provisions of Section 27 of the Copyright Act?Section 27 of the Copyright Act states that –It is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.The Respondents used a significant form of the Appellant’s work on AMUL Canada’s LinkedIn page. It also replicated a substantial portion of the work of the Appellant. Not only did the Respondents copy the Appellant’s mark, but also its design and corporate information. It even replicated the literature shown on the Appellant’s website. As a result, the Court held that copying the Appellant’s copyrightable work without their permission violates Section 27 of the Copyright Act.

Conclusion

Thus, applying the above laid down principles, the Court held that AMUL Canada had infringed Kaira’s rights to exclusive use of its trademark and copyright.

The Court ordered the Respondents to –

1. Stop infringing the trademark and copyright of the Appellant.
2. Transfer ownership and all rights to their LinkedIn and social media accounts displaying their trademark or copyright.
3. Pay damages worth $10,000 for trademark infringement.
4. Pay damages worth $5,000 for copyright infringement.
5. The legal costs in a lump sum of $17,733.

It is a significant victory for Kaira in its first trademark case outside India. The decision will reverberate throughout the business community and is a red signal for all those miscreants playing with the owner’s intellectual property rights.