Federal Court outlines relevant test in application to stay opposition proceedings
FEDERALCOURTOUTLINESRELEVANTTESTINAPPLICATION
TOSTAY
OPPOSITIONPROCEEDINGS
BARRYGAMACHE*
ROBIC,
LLP
L
AWYERS,PATENT&TRADEMARKAGENTS
Shouldconcurrentinjunctionandoppositionproceedingsinvolvingbasicallythesame
partiesandraisingrelatedissuesbeallowedbothtocontinueandriskinconsistent
findingsineachcase?ThiswastheissueconsideredbyMadamJusticeMactavishin
arecentapplicationtostayoppositionproceedingsbroughtbeforetheFederalCourt
ofCanadabyU.S.plaintiffsagainstaformerCanadiansubsidiary(TractorSupplyCo.
ofTexas,LPetal.v.TSCStoresL.P.,2010FC883(F.C.,MactavishJ.,September8,
2010)).
PlaintiffsTractorSupplyCo.ofTexasLPandTractorSupplyCompany(the
“Plaintiffs”)havebeeninvolvedinthesaleoffarmingsuppliesandhardware
equipmentforseveraldecades.Duringthe1960’s,theyenteredtheCanadian
marketplaceandcarriedontheirbusinessinCanadathroughawholly-owned
subsidiary.In1987,thesharesofthatsubsidiaryweresoldtoitsCanadiansenior
management.
Followingthe1987sale,itdoesnotappearclearwhoexactlyownedtherightstothe
TSCSTOREStrade-markinCanada:theU.S.PlaintiffsortheDefendantTSCStores
L.P.(the“Defendant”),thePlaintiffs’formersubsidiary?ThePlaintiffsclaimedthey
ownthetrade-markTSCSTORES(anditsdesignversion)andarguedthatthe
Defendantwasonlyalicenseeofthetrade-markswhiletheDefendantclaimedthatit
hasbeeninfacttheowneratalltimeofthosetrade-marks.
In2007,eventscametoaheadwhentheDefendantsoughtregistrationoftwo
versionsoftheTSCSTOREStrade-mark.OnOctober12,2007,thePlaintiffs
commencedanactionagainsttheDefendantseeking,interalia,adeclarationthatthe
PlaintiffswereinfacttheownersoftheTSCSTOREStrade-mark;italsosoughta
permanentinjunctionrestrainingtheDefendantfromusingsuchmark.OnNovember
30,2007,theDefendantcounterclaimedalsoseeking,foritspart,adeclarationthatit,
theDefendant,wastheactualowneroftheTSCSTOREStrade-mark.
©CIPS,2010.*BarryGamacheisamemberofROBIC,LLPamultidisciplinaryfirmoflawyers,patentandtrademark
agents.PublishedintheNovember2010issueoftheWorldIntellectualPropertyReport.Publication
142.242
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Inearly2008,afterpublicationoftheDefendant’strade-marks,thePlaintiffsinitiated
oppositionproceedingsbeforetheRegistraragainsttheTSCSTORES-typetrade-
marksthattheDefendantwasseekingtoregisterinitsname.
In2010,thePlaintiffssoughtanorderstayingtheoppositionproceedingspendingthe
finaldispositionoftheclaimandcounterclaimcommencedin2007.
TheCourtexaminedtheappropriatetesttobeappliedonamotionforstaysuchas
theonefiledbythePlaintiffs(wherewhatwassoughttobestayedisoneoftwo
proceedingswhicharebeingpursuedsimultaneouslyindifferentfora).
Todecidetheissue,theCourtfoundmosthelpfultheprinciplessummarizedinthe
caseofWhitev.E.B.F.ManufacturingLtd.,[2001]F.C.J.No.1073atpara.5:
1.Wouldthecontinuationoftheactioncauseprejudiceorinjustice(notmerely
inconvenienceorextraexpense)tothedefendant[thePlaintiffsinthiscase]?
2.Wouldthestayworkaninjusticetotheplaintiff[theDefendantinthiscase]?
3.Theonusisonthepartywhichseeksastaytoestablishthatthesetwo
conditionsaremet.
4.Thegrantorrefusalofthestayiswithinthediscretionarypowerofthejudge.
5.Thepowertograntastaymayonlybeexercisedsparinglyandintheclearest
ofcases.
6.Arethefactsalleged,thelegalissuesinvolvedandthereliefsoughtsimilarin
bothactions?
7.WhatarethepossibilitiesofinconsistentfindingsinbothCourts?
8.Untilthereisariskofimminentadjudicationinthetwodifferentforums,the
Courtshouldbeveryreluctanttointerferewithanylitigant’srightofaccessto
anotherjurisdiction.
9.Priorityoughtnotnecessarilybegiventothefirstproceedingoverthesecond
or,viceversa.
TheCourtappliedthesefactorstothePlaintiffs’application.TheCourtnotedthatone
ofthePlaintiffswasnotinvolvedintheoppositionproceedings.Itfurtherunderlined
thatwhilethereissomeoverlapbetweentheissuesraisedinthetwoproceedingsas
theyrelatetotheparties’respectiverightswithrespecttotheTSCSTOREStrade-
mark,thisoverlapisonlypartialinthatthereliefsoughtinthetwoproceedingsis
different:Intheoppositionproceedings,thePlaintiffsareaskingtheRegistrarto
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rejecttheDefendant’sapplicationstoregisterthetrade-markTSCSTORES;onthe
otherhand,beforetheFederalCourt,bothpartiesareseekingadeclarationthatthey
aretheownersoftheTSCSTOREStrade-mark.Otherreliefisalsosoughtbyboth
partiesbeforetheFederalCourt.
Havingconsideredalltherelevantfactors,theCourtultimatelyconcludedthatthe
Plaintiffshadnotmadeouttheircasethattherewouldbeasignificantriskof
inconsistentfindingsinthiscase.Althoughthecontinuationoftheopposition
proceedingswouldlikelycauseinconvenienceandexpensetothePlaintiffs,such
scenariowouldnotamounttoanabuseofprocessoranyotheroppressiveof
vexatiousaction.Ontheotherhand,denyingtheDefendantaccesstothetrade-mark
registrationprocessandthebenefitofregistration(presumingtheRegistrarwould
decideinitsfavour)would,infact,causeprejudicetotheDefendant.
Finally,theoppositionproceedingswerecommencedinFebruaryof2008.TheCourt
notedthatifthePlaintiffswerereallyconcernedaboutprejudiceinlettingthe
oppositionproceedingscontinue,themotionforastaywouldhavebeenbrought
beforetheCourtmuchearlier.
InsummarytheCourtconcludedthatthiswasnotoneofthe“clearestofcases”
whereastayofproceedingsshouldbegranted.
Thisdecisionconfirmsthegeneralreluctanceofjudgesinclosingthedoorto
proceedingsthatareotherwiseavailableundertheTrade-marksAct,R.S.C.1985,c.
T-13.Becausedifferentproceedingsaresometimesavailabletopartieswhose
disagreementismulti-jurisdictional,Courtstendtoletallproceedingsplayoutrather
thanlimitingtheabilityofapartytoobtainadecisioninanotherwiselegitimate
exerciseofitsrightsasalitigant.
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