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Peinet Inc. v. O'Brien (c.o.b. Island Services Network (ISN))

Between Peinet Inc., plaintiff, and Kevin O'Brien, carrying on business under the firm name and style of Island Services Network (ISN), defendants

                                                               [1995] P.E.I.J. No. 68                      

No. GSC-14157

Prince Edward Island Supreme Court - Trial Division

MacDonald C.J.

(In Chambers)

           

Heard: February 7, 1995.

Judgment: May 8, 1995.

(8 pp.)

Trademarks, names and designs ó Trademarks ó Unfair competition -- passing of ó Infringement

Remedies, injunctions.

The plaintiff sought an interlocutory injunction preventing the defendants from using the name pei.net or any similar name in this action for passing off.  The plaintiff was incorporated in July 1993 and provided network services to its clients including access to Internet.  It was a member of CA Net.   All subscribers to Internet obtained a domain name which was an electronic address.  CA Net provided domain names to its customers.  The plaintiff who was the regional Internet provider in PEI was given the name peinet.pe.ca.  The defendant O was employed by the plaintiff until his dismissal in October 1994 after which he formed his own business as an Internet provider.  He was assigned the domain name pei.net from a U.S. provider.  The plaintiff said that the defendant communicated to his clients, potential clients, other Internet users and the public generally that he could be reached at PEI.NET.  The defendant stated that the listing used lower case letters and would not have been confused with the plaintiff who used upper case letters.  He also claimed that the plaintiff's concern that he would receive business destined for the plaintiff was unfounded.  The defendant agreed to delist the domain name pei.net from its Internet server.

   HELD:  The application was dismissed.   The plaintiff only made superficial submissions without explaining the Internet system. It did not establish all the elements of a passing-off action and failed to establish that the
defendants misrepresented itself to the public. The limited use the defendants had of pei.net was not sufficient to meet the components of deception of the public due to misrepresentation. The defendant did not use PEINET.  Moreover, the plaintiff showed no actual loss.

Cases cited:

Ciba-Giggy Canada Ltd. v. Apoten Inc. [1992] 3 S.C.R. 120, 95 D.L.R. (4th) 385.

Authors cited:

Remedies in Tort, Klas, Linden, Cherviak, Kryworok.

Counsel:

Sean J. Casey, for the plaintiff.

Kevin O'Brien, on his own behalf. 

¶ 1      MacDONALD C.J.:ó The plaintiff seeks an interlocutory injunction preventing the defendants from using the name PEI.NET or any similar name or address which may be confused by the public with the corporate name of the plaintiff.  The action is one of "passing off".   Throughout this decision I shall refer to the two named defendants as "the defendant".

FACTS

¶ 2      The parties are in agreement on most of the facts. The plaintiff was incorporated on July 30, 1993.  It provides network services to its clients including access to Internet. Internet is a world-wide computer network.  In order to gain access to Internet, it is necessary to obtain a 'feed' from a national distributor such as CA Net in Canada or some other national access provider.

¶ 3      The plaintiff is a member of CA Net.  All subscribers to Internet obtain a 'domain name', which is really an electronics address.  CA Net provides domain names to its customers using the following format: name. province.ca.  This would mean the regional internet provider in Nova Scotia would have the name: nsnet.ns.ca.  The plaintiff as the regional Internet provider in Prince Edward Island was given the name: peinet.pe.ca.

¶ 4      After becoming incorporated, the plaintiff alleges it took extensive steps to develop public awareness of itself. The defendant, Kevin O'Brien, was one of the plaintiff's employees.  He remained with the plaintiff until October, 1994 when he was dismissed.  Mr. O'Brien then formed his own business as an Internet provider under the name Island Services Network.  He was assigned the domain name pei.net from a United States provider.  In the affidavit of James Hill, President of the plaintiff, it is stated the defendant was assigned the domain name PEI.NET using upper case letters. The destination is stated to be important according to the defendant.

¶ 5      The plaintiff states that the defendant has communicated to his clients, potential clients, other internet users and the public generally that he can be reached at PEI.NET.  The plaintiff refers to an article of January
21, 1995 in the local newspaper The Guardian.  In that article, describing the defendant's efforts at starting up a new company, the following sentence appeared: "O'Brien can be contacted at 892-4476 or at the e-mail address info @ pei.net."

¶ 6      Mr. O'Brien states that when he was interviewed by The Guardian he gave the above address, however, it never was used by him.  Further, he points out that in response to the plaintiff's concern he went to the newspaper and had a correction inserted in the publication of January 27, 1995, as follows:

Clearing the Record

Island Services Network can be reached at the e-mail address info @ isn.net on the Internet. A January 21 news story about the new Internet provider gave an incorrect e-mail address. 

¶ 8      The plaintiff also refers, in support of its allegation that the defendant was using its domain name, PEI.NET, to a letter to the plaintiff from the defendant on January 5, 1995.  The defendant, at the bottom of the letter, gave the address as:

Box 988 Cornwall, C0A 1H0

Consult ei.net (after Jan. 9th) 

¶ 9      Mr. O'Brien states that this was his only in discretion.  The defendant states he took all measures possible after being informed of the plaintiff's concern not to use the offending domain name of the plaintiff.

¶ 10      As stated, the plaintiff alleges the defendant listed the name PEI.NET on Internet.  However, the defendant states the listing used lower case letters and would not have been confused with the plaintiff who used upper case letters. The defendant said the concern of the plaintiff that he would receive business destined for the plaintiff through the e-mail service is un founded and there would have been no confusion.

¶ 11      Finally, the plaintiff refers to the correspondence between the parties' attorneys.  On January 5, 1995 the plaintiff's attorney wrote to the defendant demanding that he cease using the domain name PEI.NET.  This letter was extremely confrontational and undoubtedly got matters off on the wrong footing.  It was followed up by a letter from the defendant's attorney on January 9th in which it was stated the defendant was using the domain name 'isn.net' but without prejudice to its right to use the domain name 'pei.net' in the future.  This was followed by a further letter on January 10, from the plaintiff's lawyer demanding that the defendant 'de-list' the name PEI.NET from Internet.

¶ 12      Undoubtedly, there was some confusion by the plaintiff as to the domain name being used by the defendant as the plaintiff kept referring to upper case letters while the defendant stated the name was registered in lower case letters.  The final correspondence was from the defendant's attorney on January 13, when he stated the defendant would not de-list because the domain name was assigned to him by the Internet network and was governed by the conventions of Internet.

¶ 13      The defendant, in referring to his efforts to satisfy the plaintiff, filed an affidavit from Peter Richards, Managing Editor of the Buzz magazine.  Mr. Richards states that on January 8th his company was contacted to change the name pei.net to isn.net in advertising for Island Services Network.  The defendant also filed an affidavit from Curtis Duckworth, of Graphic Communications Inc., who states he prepared communication materials for the defendant containing the name pei.net when Internet addresses were being used.However, he states that "about January 5th" this was suspended and about two weeks later Island Services Network requested the name pei.net be changed to isn.net on all communication material.

¶ 14      A further affidavit filed by the defendant is from Peter Rukavina who stated his company, Digital Island, assisted Island Services Network in registering the domain name isn.net with Internet on January 6, 1995.  He stated that after January 6, no technical reference to the domain name pei.net existed in Island Services Network Internet host computer.  Finally, the defendant filed a fax from the InterNIC Domain Register, Duane Stone, who states he was contacted on January 6, 1995 and asked to register that day the name ISN.NET, which he did, despite their usual time being two to three weeks to change a listing.  The correspondence from Mr.Stone used upper case letters further adding to the confusion.

¶ 15      The plaintiff asks for an injunction restraining the defendant from using the domain name of PEI.NET.  The plaintiff uses upper case letters.  There is no evidence that the defendant used such a domain name, rather the name pei.net was used.  The plaintiff also states that the defendant by using the domain name PEI.NET confused the public as to the identity of the plaintiff and defendant, however, it is to be noted that the plaintiff's name is PEINET INC. and the plaintiff does not use a period to separate PEI and NET.

¶ 16      The defendant states that anyone using the interenet network would not confuse the plaintiff and the defendant.  The defendant states anyone intending to contact the plaintiff using its domain name would not be able to contact the defendant and vice versa.  The plaintiff did not answer that allegation.

¶ 17      The whole area of the use of the internet network and its conventions is new to the Court.  I find that the plaintiff has only made superficial submissions without explaining the Internet system.  The plaintiff merely filed a short affidavit of its president, which leaves much to be desired insofar as an explanation of Internet is concerned. The plaintiff's president did not give viva voce evidence to further expand on his affidavit.  The defendant, Kevin O'Brien, did give direct evidence.  He raised sufficient concerns to cast doubt on the plaintiff's case.  It must be remembered that the burden is upon the plaintiff to prove its case.

¶ 18      Even if the plaintiff had proven that the defendant's use of the domain name pei.net was an infringement of the plaintiff's use of the name PEINET Inc., I am of the opinion that the plaintiff has not established all of the elements of a passing-off action.  The Supreme Court of Canada in Ciba-Giggy Canada Ltd. v. Apoten Inc. [1992] 3 S.C.R. 120, 95 D.L.R. (4th) 385 has recently stated that the three components of a passing off action are; (1) the existence of goodwill; (2) deception of the public due to a misrepresentation; and (3) actual or potential damage to the plaintiff.

¶ 19      The plaintiff has failed to establish that the defendants had misrepresented the public.  I do not consider the limited use the defendants had of pei.net to be sufficient to meet the component of deception of the public due to misrepresentation.  It must be remembered that the defendants did not operate or use the plaintiff's company name of PEINET. Basically all the defendants did was, for a very short period of time, use a "telephone" number that was the same as the plaintiff's name.  This use of the same name consisted of a reference to it in a newspaper article, not an advertisement, and a listing on Internet, also for a very short period of time.

¶ 20      The misrepresentation must lead or likely lead the public to believe that the goods or services offered by the defendant are the goods and services of the plaintiff. That has not been established.

¶ 21      The plaintiff has shown no actual damage loss. Neither will there be a potential loss to the plaintiff as the defendant has agreed to delist the domain name pei.net from its Internet server.

¶ 22      Neither am I satisfied that the plaintiff has established himself in business under its trade name for such a reasonable time and to such a reasonable extent that it has acquired a reputation under that trade name that would prevent the defendants from using a similar name: Remedies in Tort, Klar, Linden, Cherniak, Kryworuk, pp. 19-21.

¶ 23      In the circumstances I would dismiss the application.  There shall be no order for costs.

MacDONALD C.J.