Federal Court of Appeal sets aside permanent injunction in STALINSKAYA Trade-Mark expungement case

2009-01-01

FEDERALCOURTOFAPPEALSETSASIDEPERMANENTINJUNC
TION
INSTALINSKAYATRADE-MARKEXPUNGEMENTCASE

BARRYGAMACHE*
LEGERROBICRICHARD,
LLP
L
AWYERS,PATENT&TRADEMARKAGENTS

Theimportanceoftheaudialterampartemrulewasrecentlyhighlightedbythe
FederalCourtofAppealwhenitsetasideapermanentmandatoryinjunctionagainst
theRegistrarofTrade-marksbecausethedefendantinatrade-markexpungement
casewasneveradvisedthatthisspecificremedywasbeingsoughtattheoutsetof
theproceedings(SCProdal94SRLv.SpiritsInternationalB.V.,2009FCA88
(F.C.A.,RichardC.J.,LétourneauJ.A.andLayden-StevensonJ.A.,March17,2009)).

OnOctober17,2007,SpiritsInternationalB.V.(hereafter:“Spirits”)filedwiththe
FederalCourtofCanadaanoticeofapplicationtoobtainanorderexpunginga
registeredtrade-markundersection57ofCanada’sTrade-marksAct,R.S.C.1985,c.
T-13(hereafter:the“Act”).Theregistrationunderattackprotectedthetrade-mark
STALINSKAYAthathadbeenregisterednearlyadecadeearlier,onSeptember28,
1998,inassociationwith“alcoholicdistilledbeverages,particularlyvodka”onthe
basisofuseandregistrationofthetrade-markinRomania.Thistrade-markwas
ownedbythedefendantSCProdal94SRL(hereafter:“Prodal”),aRomanian
company.
AtaboutthesametimeSpiritslauncheditsexpungementaction,Prodalappliedto
voluntarilycancelitsSTALINSKAYAregistration,arequestthatwasgrantedbythe
RegistrarofTrade-marksonNovember6,2007.Afewdaysearlier,onNovember2,
2007,Prodalfiledafreshapplicationforitstrade-markSTALINSKAYA,stillin
associationwithvodkabutonthebasisofproposeduseofthetrade-markinCanada.

Prodaldidnotfileanynoticeofappearanceintheexpungementclaimthathadbeen
initiatedagainstit;itprobablyconsideredthattheexpungementactionnolongerhad
anyobjectsinceits1998registrationforthetrade-markSTALINSKAYAwas
voluntarilycancelled.However,aspermittedundertheFederalCourtsRules,Spirits
proceededwithitsaction.OnFebruary28,2008,itfileditsmemorandumoffactand
law;inthisdocumentthatoutlineditsposition,Spiritsclaimedreliefthatwentbeyond
theexpungementofthe1998registrationoriginallyrequestedinitsOctober17,2007

©CIPS,2009.*BarryGamacheisamemberofLEGERROBICRICHARD,LLP.,amultidisciplinaryfirmoflawyers,
andpatentandtrade-markagents.PublishedintheApril2009issueoftheWorldIntellectualProperty
Report.Publication142.222.

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noticeofapplication.Indeed,itnowaskedforastayofproceedingsandapermanent
mandatoryinjunctionprohibitingtheRegistrarofTrade-marksfromconsideringthe
trade-markapplicationfiledforSTALINSKAYAonNovember2,2007.Thisremedy
wasgrantedbytheFederalCourtonApril1,2008followingahearingwherethe
FederalCourtjudgeconsideredtheplaintiff’sreliefasdetailedinitsmemorandumof
factandlaw.TheCourtdidnothavethebenefitofanymemorandumoffactandlaw
filedonbehalfofthedefendantsincethelatterhadnotfiledanynoticeof
appearance.
WhenitwasmadeawareoftheFederalCourt’sApril1,2008ordergrantinga
permanentmandatoryinjunctionprohibitingtheRegistrarofTrade-marksfrom
consideringtheNovember2,2007application,ProdalappealedbeforetheFederal
CourtofAppeal.ItarguedthattheprocessleadinguptotheFederalCourtjudge’s
orderwasprocedurallyunfairsinceitwasnevermadeawarethatSpiritswould
requestaninjunctionagainsttheRegistrarwhentheexpungementactionwas
launchedonOctober17,2007.Indeed,atthetime,theremedyrequestedwasthe
expungementofthe1998registration;infact,themorerecentNovember2,2007
applicationwasnotevenfiledatthetime.Yet,atnotimedidSpiritsamenditsnotice
torequestadditionalreliefnorwasProdalmadeawarethatthereliefsoughtby
Spiritsinitsmemorandumoffactandlawwasdifferentinscopethanithad
requestedinitially.
BeforetheFederalCourtofAppeal,Spiritsarguedthatthe“basketclause”inits
noticeofapplicationwhereinitrequested“suchotherreliefascounselmayadvise
andthishonourableCourtdeemsjust”’wassufficienttoencompassanyandallofthe
reliefrequestedinitsmemorandumoffactandlawandthatwassubsequently
grantedbytheCourtonApril1,2008.
TheFederalCourtofAppealrejectedthisargumentandindicatedthatdeclaratory
reliefthatisnecessarilyancillarytotheprincipalrequestedreliefmaybegranted
undera“basketclause”incircumstanceswherethepartyopposingitisnottakenby
surpriseorprejudicedinanyway.Here,theCourtindicatedthattheinjunctionwas
clearlynotancillarytotheexpungementaction;moreover,Prodalwasnevermade
awarethatthistypeofreliefwouldberequested.
Finally,theCourtquestionedwhethera“permanentmandatoryinjunction”prohibiting
theRegistrarofTrade-marksfromconsideringtheNovember2,2007application
couldbeenforceablesinceamandatoryinjunctionrequiresonetoactpositivelywhile
aprohibitiveinjunctionrestrainsanindividualfromcommittingaspecifiedact.Here,
theCourthintedthatitwouldbedifficulttoenforceamandatoryinjunctiongrantedto
restraintheRegistrarfromconsideringatrade-markapplication.

Underthecircumstances,theFederalCourtofAppealallowedtheappealandset
asidetheinjunctiongrantedbythetrialjudge.Thiscaseisareminderthatthe
questionofthespecificreliefrequestedandgrantedinIPcases(orgenerallyinany

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othercase,forthatmatter)arebestnotleftto“basketclauses”sincetheyusually
cannottakeonalifeoftheirown.Proceedingsshouldspelloutwhatspecificremedy
isbeingrequestedandadefendantshouldbemadeawareofsuchrequest.

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