Executive Summary: Key Legal and Evidentiary Issues

• The core issue was whether the Respondent's use of "Canadian Linen" created a likelihood of confusion with the Applicant's registered trademarks under section 20 of the Trademarks Act.
• Passing off under subsection 7(b) turned on the Applicant's goodwill, deception of the public through misrepresentation, and actual or potential damage.
• Depreciation of goodwill under subsection 22(1) required the Court to apply the four-element Veuve Clicquot test, including linkage and damage.
• Because the Respondent never responded despite being served, the evidentiary record rested entirely on two affidavits filed by the Applicant.
• Remedial questions covered injunctive relief, delivery up, compensatory damages, punitive damages, and costs.
• Long-standing use, high sales volumes, and extensive advertising were central to establishing the marks' acquired distinctiveness and goodwill.

Facts of the case

Canadian Linen and Uniform Service Corp. has operated in Canada for over 100 years as a linen supply company, promoting, selling, and renting bedding, linens, sheets, towels, uniforms, floor mats, washroom and cleaning products, workwear, and safety equipment under registered and common law CANADIAN LINEN trademarks. It is among the largest uniform rental and linen supply companies in the country, with operations in more than 32 facilities serving over 300,000 customer locations. The Respondent, Khwaja Azeem Shah, operated a towel, linen, and textile goods business aimed at Canadian consumers under the name and mark "Canadian Linen," advertising through the website www.canadianlinen.ca (active as early as November 23, 2018), Amazon and Walmart storefronts (from about June 2023), and social media accounts on Facebook, Instagram, Threads, Pinterest, LinkedIn, and YouTube. In December 2019 the Respondent applied to register a "Canadian Linen" design mark; the Applicant opposed the application in June 2023, and after the Respondent filed no evidence, the application was deemed abandoned on January 16, 2025. Despite being served with the Notice of Application and supporting evidence, the Respondent did not respond to the proceeding, so the record before the Court consisted solely of the Applicant's affidavit evidence.

Statutory provisions at issue

The application rested on three provisions of the Trademarks Act. Section 20 gives a registered owner the exclusive right to use the mark and is infringed by anyone who sells, distributes, or advertises goods or services in association with a confusing trademark or trade name. Subsection 7(b) codifies the common law tort of passing off, prohibiting a trader from directing public attention to its goods, services, or business in a manner likely to cause confusion with those of another. Subsection 22(1) prohibits use of a registered trademark in a manner likely to depreciate the value of the goodwill attached to it. Confusion itself is assessed under the five non-exhaustive factors in subsection 6(5): the distinctiveness of the marks, the length of time they have been in use, the nature of the goods or services, the nature of the trade, and the degree of resemblance between the marks.

The court's reasoning and analysis

Justice Aylen worked through each subsection 6(5) factor and found that all favoured the Applicant. She held that "Canadian Linen" is the striking and dominant portion of the Applicant's marks and that the Respondent's use strongly resembled them in appearance, sound, and idea. Although the Applicant did not claim inherent distinctiveness, the Court accepted that the marks had acquired a high degree of distinctiveness through extensive Canadian use — supported by roughly $300,000 in average annual advertising, some 10 million linen-based goods in circulation, aggregate Canadian revenue since 2014 exceeding $2 billion (with 2024 alone exceeding $300 million), and use of the principal mark since as early as 1996. Finding that the parties' goods, services, and channels of trade overlapped, the Court concluded that a casual consumer would likely be confused, establishing infringement under section 20. On passing off, the Court found that the Applicant possessed substantial goodwill, that the Respondent's conduct — including placing an exact copy of the Applicant's registered design mark on his YouTube channel — amounted to misrepresentation, and that the Applicant's loss of control over its marks was sufficient damage. On depreciation, applying the four-element test from Veuve Clicquot, the Court found the required use, goodwill, linkage, and likely damage, pointing to poor Amazon reviews that criticized the quality and authenticity of the Respondent's goods as evidence of dilution.

Ruling and outcome

The Court ruled in favour of the Applicant on all three claims, granting declaratory relief, a permanent injunction, and orders (to be complied with within 15 days) for delivery up or destruction of infringing materials, transfer of the www.canadianlinen.ca domain, and termination of the Respondent's social media accounts and Amazon and Walmart storefronts. On monetary relief, the Court awarded $25,000 in compensatory damages, bearing pre-judgment interest at 6.55% per year from June 19, 2023, but declined to award the $35,000 in punitive damages sought, finding that the Respondent's conduct did not meet the high threshold required. The Applicant was also awarded costs fixed at $15,398.27, inclusive of disbursements and taxes, with post-judgment interest at 6.55% per year. The successful party was Canadian Linen and Uniform Service Corp., which obtained a total monetary recovery of $40,398.27 — $25,000 in damages plus $15,398.27 in costs — alongside the declaratory and injunctive relief.