Federal Court Litigation: Juridictional and Procedural Issues

1998-01-01

FEDERALCOURTLITIGATION:JURIDICTIONALANDPROCEDURALISSUES

By
BobH.Sotiriadis*
LEGERROBICRICHARD,Lawyers,
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
1001Square-Victoria-BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242-Fax(514)8457874
www.robic.ca-info@robic.com

INTRODUCTION
Thispaperprovidesasuccinctoverviewofsomeofthejurisdictionaland
proceduralissuesrelatedtotrade-markprosecutionandlitigation,especiallyas
theyconcerntheFederalCourt.Duringthesession,wewillanalyseinmore
detailwiththeaidofpracticalexamplesseveralofthemoresubstantive
elementsofthispaper.
1.THEOFFICEOFTHEREGISTRAR:QUASI-JUDICIALFUNCTIONS
PursuanttotheTrade-MarkActtherearethreeinstanceswherethemembersof
theRegistrar`sofficefunctioninaquasi-judicialcapacity.Theseare:(1)the
Registrar`sstaffwhenactingintheircapacityastrademarkexaminers,(2)the
OppositionBoardduringoppositionproceedingsand(3)theRegistrarduringa
challengefornon-use.
Theaboveinstancesofquasi-judicialcapacityarepurelycreationsofstatute
andassuchthejurisdictionalboundariesarelimitedtowhatisexpresslylaidout
intheTrade-MarksActandcorrespondingregulations.However,withinthe
relevantprovisionsofthestatutetheRegistrar,theOppositionBoardandthe
trademarkexaminerallhaveadegreeofdiscretionarypower.Thesethree
bodies,theirdiscretionarypowersandtheirquasi-judicialfunctionsareexamined
below.

©LEGERROBICRICHARD,1998.
*Lawyer,BobH.SotiriadisisaseniorpartnerinthelawfirmLEGERROBICRICHARD,g.p.andinthe
patentandtrademarkagencyfirmROBIC,g.p.Thismaterialwasoriginallydesignedforthe
purposeofalecturedeliveredinAugust1998duringtheweekseminar”Trade-marks-an
intensiveadvancedpracticalcourse”organizedjointlybythePatentandTrademarkInstituteof
CanadaandMcGillUniversity.Publication227.

1.1TheTrade-markexaminer
Assumingthatatrade-markapplicationhasfulfilledtherequirementsofSection
30itwillbeassessedbytheRegistrar`sexaminationstafftodeterminewhetheror
notitisregistrablepursuanttothecriteriaofSection12oftheAct.Withinthe
frameworkprovidedbySection12,theexaminerhasalimiteddiscretionto
refusethegrantofatrade-markonanumberofenumeratedgrounds,including
descriptiveness,misdescriptiveness,etc.
Intheeventofrefusalofanapplication,theexaminer`sgroundsthereforeare
statedinanumberofobjections.Theapplicantmaychosetoanswertothese
objectionsinanefforttoswaytheexaminerinhisdecision.Thisisgenerallydone
bywrittensubmissionsmadebytheapplicanttotheexaminertotheeffectthat
theconclusionreachedbytheexaminerwasunwarranted.
Notealsothattheexaminermaydecide,dependingontheformofthemark,
thatitisadesignmarkwhichwillrequiretheapplicanttopresentfurther
supportingdocumentation,suchasdrawings,aswellasthepaymentof
additionalfees.
1.2Theregistrar,OppositionBoardandoppositionhearings
Oncetheexaminationprocessiscompletedandtheexaminersatisfiedthatthe
trade-markfulfillstherequirementslaiddownbySection12oftheAct,pursuant
toSection34oftheTrade-markRegulationsthetrade-markwillbeadvertisedin
theTrade-MarksJournal.Thisprovidesthirdpartieswiththeopportunityto
opposetheregistrationofthetrade-markbywayofoppositionproceedings.
Historically,oppositionproceedingshadnoofficialbasisbutconsistedofinformal
proteststotheRegistrarbypartieswhoobjectedtotheregistrationofatrade-
mark.ThishasbeenchangedandinmorerecentenactmentsoftheTrade-
MarksActoppositiontothependingregistrationofatrade-markhasnowbeen
conferredofficialstatus.
PursuanttoSection38oftheAct,athirdparty`soppositiontoapendingtrade-
markregistrationmaybemadebyfilingastatementwiththeRegistrar.Inthis
capacitytheRegistrar’sstaffonceagainassumestheirquasi-judicialroleinthe
formofwhatisgenerallyknowastheOppositionBoard.TheOppositionBoard
doesnotact,asmightbeexpected,asanadministrativetribunalasthetermis
commonlyunderstood,butratherreliesprimarilyonwrittenevidence(as
opposedtooraltestimony)asthebasisforitsdecisions.

GroundsforoppositionarelimitedtothefourenumeratedatSection38(2)ofthe
Actandincludesuchissuesasnon-entitlement,non-distinctiveness,etc.Atthe
outsetoftheoppositionprocesstheOppositionBoardhasthediscretionto
accepttheoppositionorrejectitasbeingfrivolous.Ifaccepted,bothparties
(thefilingpartyandtheopposingparty)maysubmitevidencesupportingtheir
positionstotheOppositionBoardbywayofaffidavitsorstatutorydeclaration.
Onapplicationofaparty,theOppositionBoardmayorderthecross-
examinationofanyaffiantordeclarantofanaffidavitordeclaration.A
transcriptofthecross-examinationandanyexhibitsarefiledwiththeOpposition
Board.Followingcompletionofevidencethepartieswillbenotifiedbythe
OppositionBoardthattheymayfilewrittenarguments.Attheendofthisstagea
partymayalsorequestanoralhearinginfrontoftheBoard.Thesehearingsare
oftenconductedbytelephoneconference.
TheOppositionBoardthenconsidersthecollectiveevidenceandshortly
thereafterwilleitherrefusetheapplicationorrejecttheopposition.Aswithall
decisionsoftheRegistrar,anappealmaybemadetotheFederalCourt.
1.3Theregistrarduringachallengefornon-use:Section45
ThefinalinstancewheretheRegistrarfunctionsinaquasi-judicialcapacityis
whenaregisteredtrade-markisnolongerinusewithinCanada.Section45of
theActprovidesthemechanismbywhicharegisteredtrade-markmaybe
challengedforthisnon-use.
ForSection45toapply,thetrade-markmusthavebeenregisteredatleastthree
yearspriortothedateonwhichtheholderischallengedfornon-use.Anythird
partycanrequesttheRegistrartogivenoticetotheregisteredownerofatrade-
mark(unlessheseesgoodreasonnotto)forexpungementbyvirtueofnon-use.
Followingsuchnotice,theregisteredownerisobligedtoprovide,withinthree
monthsofthenotice,evidencebyaffidavitorstatutorydeclarationshowingthat
thetrade-markwaseitherinuseinCanadainthethreeyearperiodimmediately
priortothedateofnotice,andbarringthis,thedatewhenitwaslastinuseand
thereasonfortheabsenceofsuchuse.Theevidenceisrestrictedtoaffidavitor
statutorydeclaration,althoughincertaincasesrepresentationsmaybeheard
fromtheregisteredownerofthetrade-markorhisrepresentative.
IfitappearstotheRegistrar,byvirtueoftheevidenceprovidedorthefailureto
provideevidence,thatthetrade-markhasnotbeeninuseinCanadawithinthe
twoyearsimmediatelypriortothenotice(eitheringeneralorforspecificwares)
andthatthereisnospecialcircumstancesforthemarknotbeinginuse,then

thetrade-markisliabletobeexpungedoramendedaccordingly.
IftheRegistrardecidestoamendorexpungethetrade-markfromtheregister,
thenhemustinformtheregisteredownerofthis(aswellasthepartywho
requestedthenotice)statingthereasonsfortheamendmentorexpungement.
2.ROLEOFTHEFEDERALCOURTINTRADE-MARKPROSECUTIONAND
LITIGATION
Aswillbediscussedinalittlemoredetailbelow,Section56oftheTrade-Marks
ActprovidesamechanismbywhichthedecisionsoftheRegistrarincluding
thosecoveredinour
discussionofthequasi-judicialroleofthetrade-markexaminer,theOpposition
BoardandtheRegistrarduringachallengefornon-usemaybeappealed.We
willalsosee,however,thattheroleoftheFederalCourtinmattersoftrade-mark
prosecutiondoesnotceaseatthestageofconsideringappealsofdecisionsof
theRegistrar.TheroleoftheFederalCourtextendstoallaspectsoftrade-mark
protectionandlitigation,eitherasaresultofpowerssharedwiththeSuperior
CourtsoftheProvincesorthroughPowerswhichtheTrade-MarksActprovidesfor
asexclusivetotheFederalCourtjurisdiction.
3.POWEROFCOURTSTOGRANTRELIEFINTRADE-MARKMATTERS
3.1Concurrentjurisdiction
ThepowerofCourtstograntreliefissetoutinSection53.2oftheTrade-Marks
Act.Brieflyput,ifanactisdonecontrarytotheTrade-MarksAct,theFederal
CourtorSuperiorCourtofaProvincemaymakeanysuchOrderasthe
circumstancesrequireincluding,butnotrestrictedto,thereliefmentionedin
Section53.2.Section53.2refersspecificallytothefollowingremedies:(1)
injunction,(2)recoveryofdamages,(3)recoveryofprofits,(4)destruction,
exportationanddispositionofoffendingwares,packages,labels,advertising
materialsanddies.
Theterm“Court”isdefinedatSection52asmeaningtheFederalCourtorthe
SuperiorCourtofaProvince.Therefore,Section53.2providesforconcurrent
jurisdictionbetweentheFederalCourtandtheSuperiorCourtofeachProvince.
3.2Injunction
Permanentinjunctionsaregenerallyconsideredtoconsistofanequitable

remedy.Historically,equitableremedieswereavailableforthepurposeof
enjoiningaDefendanttorespectequitableprinciples.Thoseseekingequitable
reliefaddressedtheirrecoursetotheCourtofChancery,whilelegalremedies,
wereaddressedtotheCommonLawCourts.Intheeighteenthcentury,the
CourtsinEnglandweremergedsuchthattheywereempoweredwithjurisdiction
tograntbothlegalandequitablerelief.
InCanada,theSuperiorCourtofeachCommonLawProvincehasasimilar
jurisdictiontoissueinjunctiverelief.AstotheSuperiorCourtofQuebec,ithas
alsoretainedthispowerasitisforspecificallyforeseenbytheCodeofCivil
Procedure.
4.SOURCEOFPOWERSOFFEDERALCOURTINTRADEMARKMATTERS
Aswehaveseen,theFederalCourtofCanadaisacreationofstatuteandits
powersarerestrictedtothosesetoutinthestatute.TheFederalCourtActwas
constitutedbyParliamentunderSection101oftheConstitutionAct1867.
Section3oftheFederalCourtActprovidesthattheFederalCourtisaCourtof
law,equityandadmiralty,andaSuperiorCourtofrecordhavingciviland
criminaljurisdiction.AsaresultoftheprovisionsoftheFederalCourtAct,
therefore,theFederalCourthasallthejurisdictionnecessarytogranttherelief
setoutinSection53.2oftheTrade-MarksAct,referredtoabove.Section55of
theTrade-MarksActfurtherconfirmsthattheFederalCourthasjurisdictionto
entertainanyactionorproceedingfortheenforcementofanyoftheprovisions
oftheActorofanyrightorremedyconferredordefinedintheAct.
5.FEDERALCOURTJURISDICTIONONAPPEALSFROMDECISIONSOFTHE
REGISTRAR
Section56oftheTrade-MarksActalsoconfirmsthatanappealliestothe
FederalCourtfromanydecisionsoftheRegistrarundertheActwithintwo
monthsfromthedateonwhichthenoticeofthedecisionwasdispatchedby
theRegistrarorwithinsuchfurthertimeastheCourtmayallow,eitherbeforeor
aftertheexpirationofthetwomonths.Infact,Section56(5)oftheTrade-Marks
ActforeseesthatonanappeallodgedinaccordancewithSection56,
evidencemaybeadducedbeforetheFederalCourtinadditiontothatwhich
hadbeenadducedbeforetheRegistrar.ItfurtherprovidesthattheFederal
CourtmayexerciseanydiscretionwhichvestedoriginallyintheRegistrar.
TheappealsystemsetoutinSection56oftheTrade-MarksAct,onlyliestothe
FederalCourtanddoesnotlietotheSuperiorCourtsoftheProvinces.

6.INSTANCESWHERETHEFEDERALCOURTEXERCISESEXCLUSIVEJURISDICTION
6.1Section57oftheTrade-MarkAct
TheTrade-MarksActalsosetsoutinstanceswheretheFederalCourthas
exclusive
jurisdiction.Morespecifically,Section57oftheTrade-MarksAct
providesthattheFederalCourthasexclusiveororiginaljurisdictiontoorderthat
anyentryintheregisterbystruck
outoramendedonthegroundthatatthedateoftheapplication,theentryas
itappearsontheregisterdoesnotaccuratelyexpressordefinetheexistingrights
ofthepersonappearingtobetheregisteredownerofthemark.
ApplicationsunderSection57,maybemadebytheRegistrarorbyany
interestedperson.
Therearethreeproceduralavenuesavailableforapartytoaccesstheexclusive
jurisdictionoftheFederalCourt:
(i)bythefilingandserviceofademand[previouslyknownasan
originatingNoticeofMotion];
(ii)bycounter-claiminthecontextofanactiontakingagainstthe
partybyanotherpartyfortheinfringementoftheotherparty’s
trade-mark;
(iii)byStatementofClaim;
6.2Relevantdateindeterminationofaccuracyofrightsappearingonregistry
Section57,therefore,istheprovisioninvokedwhenonewishestohavethe
registeredtrade-markofanotherpartyexpungedfromtheTrade-MarkRegistry.
WhileexpungementmightbethebestknownrecoursetakenunderthisSection,
itmayalsobeinvokedtoamendanentryontheregister.
TheCourtwillassesstheaccuracyoftherightsofthepersonappearingtobethe
registeredownerofthetrade-markonthebasisofthefactsastheyexistedon
thedaytheapplicationchallengingtherightswasmade.
6.3Groundsforexpungement
Expungementofatrade-markmaybebasedontheusualgroundsofnon-

registrabilityofatrade-markandcanbesummarizedasfollows:
(i)thetrade-markwasnotregistrableasofthedateofitsregistration;
(ii)thetrade-markisnotdistinctiveonthedatetheexpungement
proceedingswereinstituted;
(iii)abandonmentofthetrade-mark;heretheburdenisontheperson
contestingthetrade-marktoshownotonlythenon-useofthe
registeredtrade-markbytheowner,butanintentionof
abandoningthetrade-markasofthedateofthecommencement
oftheproceedings;
(iv)theregisteredownerwasnotthepersonentitledtosecureits
registration;oneofthemostcommonallegationsunderthisground
isthefactthatthereexistedprioruseofaconfusinglysimilartrade-
mark.
7.SOURCEOFEXCLUSIVEJURISDICTIONOFFEDERALCOURT
TheexclusivejurisdictionsetoutinSection57derivesfromSection20(1)(b)ofthe
FederalCourtAct,whichprovidesfortheexclusivejurisdictionofthetrialdivision
oftheFederalCourtinmattersofexpungement,variationorrectificationof
entriesmadeintheregisterofcopyrights,trade-marks,industrialdesignsor
typographiesorinrespectoftheimpeachmentorannulmentofapatentof
invention.
TheconcurrentjurisdictionoftheFederalCourthasitssourceinSection20(2)of
theFederalCourtActwhichsetsoutthatthetrialdivisionoftheFederalCourt
hasconcurrentjurisdictioninallcasesotherthanthosespecificallymentionedin
Sub-Section1,inwhicharemedyissoughtundertheauthorityofanyActof
Parliamentoratlaworinequityrespecting,interalia,trade-marks.
Incontrasttotheabove,theRegistrarhasnopowertoorderthatanyentryon
theregisterbestruckoutoramendedattherequestofathirdparty,except
undertheprovisionsofSections44and45oftheTrade-MarksAct.
8.ENFORCEMENTOFJUDGMENTSANDADVANTAGESANDLIMITSOF
PROCEEDINGSBEFORETHEFEDERALCOURT
8.1EnforcementandcontemptofCourt

TheenforcementofOrdersrenderedbytheFederalCourtisregulatedbythe
RulesoftheFederalCourt.TheseRuleshaveveryrecentlybeentheobjectof
severalsignificantchanges.Forthepurposesofthispaper,itisonlynecessaryto
notethattheenforcementofOrdersoftheFederalCourtiscoveredinPart12of
thenewRules,atRules423to465.Also,theRulesforeseethepoweroftheCourt
tofindapersonguiltyofcontemptofCourt(Rule466).
8.2AdvantagesofFederalCourt
Oneoftheadvantagesofaddressingtrade-markproceedingstotheFederal
CourtisthefactthatanOrderoftheFederalCourtmaybeenforcedacross
Canada,whiletheOrdersoftheCourtsoftheProvincesmayonlybeenforced
provincially.TheFederalCourtRules,therefore,providealloftheenforcement
measuresnecessaryfortheenforcementofanOrderacrossCanadaforthe
purposesofrecoveringsumsofmoneyorensuringtherespectofanInjunction,
Ordersofdestruction,delivery-upandsoon.
EnforcementisdifferentwhenoneobtainsanOrdermodifyinganentryonthe
register.Forexample,inthecaseofanOrderexpungingatrade-mark,the
conclusionswillusuallyincludeadeclarationthatatrade-markisinvalidand
orderthatitbestruckfromtheregister.Ourrecommendationforthe
enforcementofthistypeofOrderistoobtainacertifiedcopyoftheFederal
CourtjudgmentandforwardittotheRegistrar’sofficewithaletterrequesting
thattheRegistrartakenoticeofthejudgmentandeffectuatethemodification
orderedinit.
Aswehaveseen,onlytheFederalCourtcanmakeOrdersaffectinganentryon
theregister.TheSuperiorCourtsdonothavethispower.However,Superior
Courtsmayrenderadeclarationtotheeffectthatatrade-markisinvalidas
betweentheparties.Thevictoriouspartymaynot,onthebasisofsuch
judgment,obtainamodificationoftheentryontheregister.Thepartymust
obtainaFederalCourtjudgmenttothesameeffect.
8.3Principal-vs-ancillaryrelief
Thereareinstanceswhereapartywishestotakeproceedingsinwhichthe
subjectmatterfallsunderFederalCourtjurisdictionandsubjectmatterover
whichtheFederalCourtdoesnothavejurisdiction.Forexample,apartymight
sueintrade-markinfringementandalsowishtohaveacontractualdisputeover
alicensesettledbytheCourtatthesametime.
InordertodeterminewhethertheFederalCourtmayhearsuchanaction,it

mustbeshownthattheprincipalrecourseofthepartyfallswithinthejurisdiction
oftheFederalCourt.Iftherecoursedoesnotcomewithinthejurisdictionofthe
Courtbutisonlyaccessoryorancillarytotheprincipalrecourse,thenthere
shouldnotbeajurisdictionalproblem.If,however,theprincipleaspectofthe
caserelatestoaquestionwhichisnotnormallyoftheFederalCourt’sjurisdiction
suchas,forexample,apurelycontractualdispute,thenthefactthatatrade-
markissueisalsoraisedintheproceedingswillnotbeenoughtoprovide
jurisdictiontotheFederalCourt.
CONCLUSION
Wetrustthattheforegoingsummaryhasprovidedasufficientoverviewofthe
topicstobediscussedduringoursessionandthatallparticipantswillfeelfreeto
requestamoredetailedandpracticalexplanationoftheissueswhicharethe
mostrelevanttotheirrespectivepractices.

ROBIC,ungroupedavocatsetdagentsdebrevetsetdemarquesdecommercevouédepuis
1892àlaprotectionetàlavalorisationdelapropriétéintellectuelledanstouslesdomaines:
brevets,dessinsindustrielsetmodèlesutilitaires;marquesdecommerce,marquesdecertification
etappellationsdorigine;droitsdauteur,propriétélittéraireetartistique,droitsvoisinsetdelartiste
interprète;informatique,logicielsetcircuitsintégrés;biotechnologies,pharmaceutiqueset
obtentionsvégétales;secretsdecommerce,know-howetconcurrence;licences,franchiseset
transfertsdetechnologies;commerceélectronique,distributionetdroitdesaffaires;marquage,
publicitéetétiquetage;poursuite,litigeetarbitrage;vérificationdiligenteetaudit;etce,tantau
Canadaquailleursdanslemonde.Lamaîtrisedesintangibles.
ROBIC,agroupoflawyersandofpatentandtrademarkagentsdedicatedsince1892tothe
protectionandthevalorizationofallfieldsofintellectualproperty:patents,industrialdesignsand
utilitypatents;trademarks,certificationmarksandindicationsoforigin;copyrightand
entertainmentlaw,artistsandperformers,neighbouringrights;computer,softwareand
integratedcircuits;biotechnologies,pharmaceuticalsandplantbreeders;tradesecrets,know-
how,competitionandanti-trust;licensing,franchisingandtechnologytransfers;e-commerce,
distributionandbusinesslaw;marketing,publicityandlabelling;prosecutionlitigationand
arbitration;duediligence;inCanadaandthroughouttheworld.Ideaslivehere.
COPYRIGHTER
IDEASLIVEHERE
ILATOUTDEMÊMEFALLULINVENTER!
LAMAÎTRISEDESINTANGIBLES
LEGERROBICRICHARD
NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
PATENTER
R
ROBIC
ROBIC+DROIT+AFFAIRES+SCIENCES+ARTS
ROBIC++++
ROBIC+LAW+BUSINESS+SCIENCE+ART
THETRADEMARKERGROUP
TRADEMARKER
VOSIDÉESÀLAPORTÉEDUMONDE,DESAFFAIRESÀLAGRANDEURDELAPLANÈTE
YOURBUSINESSISTHEWORLDOFIDEAS;OURBUSINESSBRINGSYOURIDEASTOTHEWORLD