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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