Overview of Trade-Marks Litigation in Canada Infringement, Passing Off and Depreciation of Goodwill
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OVERVIEWOFTRADE-MARKSLITIGATIONINCANADA
INFRINGEMENT,PASSINGOFFAND
DEPRECIATIONOFGOODWILL
HuguesG.Richard*
LEGERROBICRICHARD
,L.L.P.
Lawyers,PatentandTrademarkAgents
CentreCDPCapital
1001Square-Victoria–BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)987-6242-Fax(514)845-7874
info@robic.com-www.robic.ca
I–JURISDICTION:federalvs.provincialcourts
a)Concurrentjurisdiction:
Asageneralprinciple,infringement,passingoffanddepreciationofgoodwill
actionscanbeinstitutedbeforeeithertheprovincialSuperiorCourtsorthe
FederalCourtofCanada.ThisiswheretheSuperiorCourtsandtheFederal
Courthaveconcurrentjurisdiction.
UndertheCanadianconstitution,theSuperiorCourtsarecourtsoforiginal
generaljurisdiction;theyhaveaninherentjurisdictiontohearallmatters
exceptthosematterswhichbystatuteshavebeengrantedexclusivelyto
othercourtsortribunals.
Ontheotherhand,theFederalCourtisacourtcreatedbystatute(Federal
CourtsActR.S.C.,1985,c.F-7,s.1;2002,c.8,s.14),itcanonlyhearmattersthat
havebeenspecificallygiventoitbystatute.Ithasnoinherentjurisdictionas
provincialSuperiorCourtsdo.
TheFederalCourt’sAct,unders.20,doesgranttotheFederalCourtjurisdiction
toentertaincasesrespectingtrade-marks.Furthermore,thisjurisdictionofthe
FederalCourtisconfirmedbytheprovisionsofs.52ands.55oftheTrade-Marks
Act(R.S.C.1985,c.T-13).
CIPS,2006.*Lawyerandtrade-markagent,HuguesG.RichardisapartnerofLEGERROBICRICHARD,
L.L.P.,amultidisciplinaryfirmoflawyers,andpatentandtrademarkagents.Notesfora
conferencepronouncedon2006-08-11fortheIPIC/McGillUniversityextensiveUnderstanding
trade-marksextensivecourse.Publication354.
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TheadvantageofgoingbeforetheFederalCourtversusaSuperiorCourtofa
provinceliesinthefactthattheFederalCourthasonejudicialdistrictwhichis
thewholeofCanada.TheFederalCourtexercisesitsjurisdictionoverall
persons(companiesandindividuals)irrespectiveofwheretheyresidein
CanadaorwheretheyhaveassetsinCanadaorwherethecauseofaction
aroseinCanada.Generallyspeaking,aSuperiorCourtofaprovincehas
jurisdictionoverpersonsresidingintheprovinceorhavingassetsinthe
provinceoroversubjectmatterswherethecauseofactionaroseinthe
province.
Thisstatementhashowevertobequalified.ASuperiorCourtcanissuean
injunctionorderenjoiningadefendantoverwhichitexercisesjurisdiction,from
doingsomethinginanotherprovince.Forinstance,theSuperiorCourtofthe
provinceofQuebeccanissueanorderenjoiningacompanyresidinginthe
provinceofQuebecfromusingatrade-markintheprovinceofOntario.
b)JurisdictionoftheSuperiorCourtofaprovince:
Section52oftheTrade-MarksActstatesthatins.53tos.53.3oftheTrade-
MarksAct,”Court”meanstheFederalCourtortheSuperiorCourtofa
province.
WewillseelaterthatthereliefsundertheTrade-MarksActareprovidedfor
unders.53.2,whichisoneofthesectionscoveredbys.52oftheTrade-Marks
Act.Thismeansthatacourtsuchasthe”CourduQuébec”(QuebecCourt)
oraCountyCourt,aDistrictCourtorotherprovincialcourtsdonothave
jurisdictiontohearrecoursesundertheTrade-MakrsAct.
c)ExclusivejurisdictionoftheFederalCourt:
Section20(1)oftheFederalCourt’sActgrantstotheFederalCourtexclusive
originaljurisdiction,betweensubjectandsubjectaswellasotherwise,inall
casesofconflictingapplicationsfortheregistrationofanytrade-markandin
allcasesinwhichitissoughttohaveanyentryinanyregisteroftrade-marks
made,expunged,variedorrectified.
SomeprovisionsoftheTrade-MarksActalsogranttotheFederalCourtan
exclusivejurisdiction.Inthisway,theFederalCourt’sActandtheTrade-Marks
ActarewithdrawingfromtheSuperiorCourtsoftheprovincesthejurisdiction
tohearspecificmattersundertheTrade-MarksAct.Theseprovisionsofthe
Trade-MarksActarefoundatsections56and57.
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i)Section56-Appeal:
Section56grantstotheFederalCourttheexclusiverighttohear
appealsofanydecisionoftheRegistrar.Thisisajurisdictionwhichis
notsharedwiththeSuperiorCourts.Theword”exclusive”isnot
mentionedins.56,butthewords”used”leavenoroomforan
appealtobemadetotheSuperiorCourtsoftheprovinces.
ii)Section57-Strikingoutoramendingentriesontheregister:
Section57ontheotherhanddoesgrantexclusiveoriginaljurisdiction
totheFederalCourtthatanyentryintheRegisterbestruckor
amended.
Forinstance,aclaimunders.18,tohavearegistrationdeclared
invalid,canbebroughtbeforeeithertheSuperiorCourtsorthe
FederalCourt.However,anydeclarationofinvaliditymadebya
SuperiorCourtwillonlyhaveeffectbetweenthepartiesandwillnot
bereflectedontheRegister.Ifapartyinlitigationwishestohavean
ordertoexpungeoramendaregistration,ithastotakeitsrecourse
beforetheFederalCourt.
II–KEYCAUSESOFACTION
A)Infringement:
a)Section19Exclusiverightsconferredbyregistration
1)Purpose:
Section19givestotheownerofatrade-markregisteredwithrespectto
particularwaresorservicesthestatutoryrighttoitsexclusiveuseacross
Canadainrespectofsuchwaresorservices.Thissectionisoneofthe
cornerstonesoftheTrade-MarksAct.
2)Personsentitledtosue:
Thefollowingpersonsmaysueforinfringementofaregisteredtrade-mark:
-Theregisteredowner,
-Theunrecordedassigneeofaregisteredtrade-mark(seesection48),
and
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-Thelicenseewhentheownerrefusestotakelegalactionorwhen
authorisedtodosounderthelicenceagreement(sees.50(3)).
3)Ambitofprotection:
Ifsection19istobereliedonbyitself,thefollowingessentialconditions
mustbeestablished:
3.1Theexistenceoftheregistrationofthetrade-mark:
3.1.1.Pursuanttos.54(3)oftheTrade-MarksAct,acertifiedcopyofthe
registrationofatrade-markisprimafacieevidenceofthefactsetforth
therein.Accordingly,afterthefilingofacertifiedcopyoftheregistration
beforeanycompetentcourt,theburdentoshowthattheregistrationis
invalidliesonthechallengingparty.Additionally,productionofthe
certifiedcopyoftheregistrationrelievestheowner(exceptinthecase
wheretheownerisanunrecordedassignee)fromprovinghisorher
ownership.However,the”registrationofatrade-markdoesnotgivethe
registrantanybettertitlethanitmighthavehadwithoutregistration”.(See
WaxoylAGv.WaxoylCanadaLtd.(1982),38O.R.(2d)672at681).
3.2Use(withinthemeaningofs.4)bytheinfringingpartyofatrade-mark:
3.2.1Useinassociationwithwaresisdeemedtohaveoccurredunder
s.4(1)oftheTrade-MarksActif,atthetimeofthetransferofthe
propertyinorpossessionofthewares,inthenormalcourseof
trade,itismarkedonthewaresthemselvesoronthepackagesin
whichtheyaredistributedoritisinanyothermannerso
associatedwiththewaresthatnoticeoftheassociationisthen
giventotheotherpersontowhomthepropertyorpossessionis
transferred.
(SeePro-CLtd.v.ComputerCityInc.(2001),14C.P.R.(4
th)441.)
“ThefirsterrorofthetrialJudgewasinusingsection19oftheActasthe
foundationofhisreasoning.Thatsectionreads:(…).
ThissectionclearlyreferstotheuseinCanadaofthetrade-markin
associationwiththewaresorservicesdescribedinthetrade-mark
registration.Thecomputerhardwarebeingsoldbytheappellantwas
notsoldinCanadaandcannotbeconsideredas”computerprograms
usedtogenerateprogramsforWindows”(thedescriptioninthe
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respondent’strade-markregistration).Thus,beforeevenconsidering
“use”,section19hasnoapplicationtothefactsofthiscase”.
3.2.2Useinassociationwithservicesdeemedtohaveoccurred:
Section4(2)statesthatatrade-markisdeemedtobeusedin
associationwithservicesifitisusedordisplayedintheperformanceor
advertisingofthoseservices.
(SeePorterv.DonTheBeachcomber(1966),48C.P.R.280)
“Ishallthereforeholdthatusein”Canada”ofatrade-markinrespective
servicesisnotestablishedbymereadvertisingofthetrade-markin
Canadacoupledwithperformanceofserviceselsewherebutrequires
thattheservicesbeperformedinCanadaandthatthetrade-markbe
usedordisplayedintheperformanceoradvertisinginCanadaofsuch
services”.
3.2.3Definitionofuseundersection2:
Inadditiontos.4oftheTrade-MarksAct,referenceshouldalsobe
madetos.2definitionofusewhichreadsasfollows:”Use”,inrelationto
atrade-mark,meansanyusethatbys.4isdeemedtobeausein
associationwithwaresorservices”.Therefore,s.4statesexhaustivelythe
mannerinwhichatrade-markwillbeconsideredtohavebeenused
undertheTrade-MarksAct”.
3.3Thetrade-markbeingusedmustbeidentical(sameword/samedesign
totheregisteredtrade-mark):
(SeeStandardKnittingLtd.v.ToyotaJidoshakabushikiKaisha,8C.P.R.
(4
th)285).Thiswasamotionforsummaryjudgmentofanactionfor
trade-markinfringementundersection19.Itwasheldthatgiventhe
differencebetweentheplaintiff’smarkandthedefendant’scomposite
mark…themotionforsummaryjudgmentwasdismissed.
3.4Useofthetrade-markinassociationwithidenticalwaresorservices:
(SeeIllicoCommunicationInc.v.VideotronLtée[2004]R.J.Q.2579
(Que.S.C.)).ItwasstatedthatiftheDefendantimpugnedtrade-markis
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differentthantheplaintiff’sregisteredtrade-markorifitisusedin
associationwithwaresorservicesthatthecertificateorregistration
doesnotcover,aplaintiffcannotsucceed.
(SeeLovableBrassièreCo.ofCanadaLtd.v.LovableKnitsInc.(1971)1,
C.P.R.(2d)128).Section19oftheTrade-MarksActgivestheowner(of
thetrade-mark)theexclusiverighttousehistrade-markthroughout
Canada(only)inrespectofwaresinassociationwithwhichitis
registered.
Ifoneoftheconditionsin3.1,3.2,3.3or3.4isnotestablished,section19
cannotbereliedon.However,arecourseundersection20ofthetrade-mark
Actmaybepossible.
ii)Section20deemedinfringement:
1)Purpose:
Subsection20(1)deemsthattheexclusiverightsgrantedtotheregister
ownerundersection19,areinfringedincertaincircumstances,subjectto
exceptionsmentionedinsubsection20(1)(a)and(b)andinsubsection
20(2).
Inaccordancewithsection6(5)allthesurroundingcircumstanceshaveto
betakenintoconsiderationbythecourtsortheRegistrarinorderto
decideiftrade-marksortradenamesareconfusing,includingthose
circumstancesspecificallylisted.
2)General:
Wesawthattheownermayrestraintheunauthorizeduseofitsregistered
trade-mark.Now,wewillseethattheownermayalsorestrainthe
unauthorizeduseofatrade-markoratradenamewhichisconfusingwith
itsregisteredtrade-mark.
Section6(5)setsoutthemainguidelinestobefollowedbythecourtsand
theRegistrarinordertodetermineifconfusionexists.Whilefivecriteria
havebeenstated,theyarenotexhaustive.Allthesurrounding
circumstanceshavetobeconsideredandtheirevaluationremainsa
questionoffacttobedeterminedonthemeritsofeachcase.
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3)Ambitofprotection:
Ifsection20(1)istobereliedon,thefollowingfiveessentialelementsmust
beestablished:
-Theexistenceoftheregistrationofthetrade-mark;
-Thesale,distributionoradvertisement;
-Ofanywaresorservices;
-Inassociationwithaconfusingtrade-markortradename;
-Byaperson(infringingparty)notentitledundertheActtotheuseofthe
registeredtrade-mark.
4)Confusion:
4.1Sections6(1)to6(4)oftheTrade-MarksAct:
Sections6(1)to6(4)establishtheconditionsinthelightofwhichthe
courtsortheRegistrarwillconsiderwhethertheuseoftrade-marksor
tradenamesgivesrisetoconfusion.Wherevertheword”confusing”in
relationtotrade-marksortradenamesisusedintheAct,reference
mustbemadetosection6.Insection2oftheTrade-MarksAct,the
word”confusing”isdefinedasfollows:
“Whenappliedasanadjectivetoatrade-markortradename,means
atrade-markortradenametheuseofwhichwouldcauseconfusionin
themannerandcircumstancesdescribedinsection6.
4.2General:
i)Section6(1)dealswiththeuseofatrade-markortradename
causingconfusionwithatrade-markortradename.
ii)Section6(2)dealswiththeuseofatrade-markcausingconfusion
withanothertrade-mark.
iii)Section6(3)dealswiththeuseofatrade-markcausingconfusion
withatrade-name.
iv)Section6(4)dealswiththeuseofatradenamecausing
confusionwithatrade-mark.
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4.3Testforconfusion:
Thetesttobeappliedundersections6(2),6(3)and6(4)isthesame.The
testiswhethertheuseoftrade-marksortradenamesinthesamearea
wouldbelikelytoleadtotheinferenceinthemindoftheconsumers
thatthewares,servicesorbusinesseshavearelatedorcommon
source.Itisnotnecessarythatactualconfusionbeproven;itissufficient
toestablishalikelihoodofconfusion.
Ifbyreasonofthesimilaritybetweentrade-marksortradenames,a
connectionbetweentwopersonsisinferred,whichinfactdoesnot
exist,then,thetrade-marksortradenamesareconfusing.
Theexistenceofalikelihoodofconfusionisamatteroffirstimpression
andnotamatterofclosescrutiny;forinstance,trade-marksortrade-
namesarenottobeplacedsidebysidetocomparetheircomponents.
Section6(5)statesnon-exhaustivelywhatshouldbeconsideredto
determinewhethertrade-marksortradenamesareconfusing.The
generalprincipleisthatconfusionisdeterminedhavingregardtoallthe
surroundingcircumstances.Examplesofcircumstancestobe
consideredarethefollowing:
a)theinherentdistinctivenessofthetrade-marksortrade
namesandtheextenttowhichtheyhavebecomeknown;
b)thelengthoftimethetrade-marksortradenameshave
beeninuse;
c)thenatureofthewares,servicesorbusiness;
d)thenatureofthetrade;and
e)thedegreeofresemblancebetweenthetrade-marksor
tradenamesinappearanceorsoundorintheideas
suggestedbythem.
4.4Onustoestablishconfusion:
Inoppositionproceedings,theonuslieswiththeapplicanttoprovethat
confusionisunlikely.Ontheotherhand,ininfringement(or
expungement)proceedings,theonustoproveconfusionlieswiththe
partyallegingconfusion.
4.5Determinationofconfusion:
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ThecourtsortheRegistrarshouldputthemselvesintheplaceofan
averagepurchaserhavinganimperfectrecollectionofthetrade-marks
ortradenamesbeingcompared.Thetrade-marksortradenames
shouldbeconsideredintheirentirelyandtheirdegreeofresemblance
shouldbeconsideredfromthepointofviewoftheappearance,sound
andideasuggested.Duetothelowdistinctivenessofwordsof
commonusage,someriskofconfusionisinevitableifatraderadopts
themastrade-marks.Coinedwordshavebeengivenabroaderambit
ofprotectionduetotheirgreaterdegreeofdistinctiveness;thesame
appliestowell-knowntrade-marks.
(SeeBensonandHedges(Canada)Ltd.v.St.RegisTobaccoCorp.
(1968),57C.P.R.1(SCC).
…”Thequestionwhetherthedegreeofresemblancebetweentwo
trade-marksinappearanceorsoundorintheideasuggestedby
themwouldbelikelytoleadtotheinferencethatthewares
associatedwithsuchtrade-marksaremanufacturedbythesame
person,isoneinvolvingtheexerciseofpersonaljudgmentinthelight
ofalltheevidenceandwithparticularregardtothesurrounding
circumstancesassetoutinparagraphs(a)to(e)ofsection6(5)of
theTrade-MarksAct…
Whenapplyingthetestsetforthinsection6(2)oftheTrade-MarksAct,
theownerofaregisteredtrade-markisnotrequiredtoshowthatthe
markwhichisthesubjectoftheapplicationforregistrationisthesame
ornearlythesameastheowner’sregisteredtrade-mark.Itissufficientif
itis…
“Shownthattheuseofthemarkappliedforwouldbelikelytolead
totheinferencethatthewaresassociatedwithitandthose
associatedwiththeregisteredtrade-markwereproducedbythe
samecompany”.
4.6Famoustrade-marks:
InVeuveClicquotPonsardinv.BoutiquesCliquotLtée,2006SCC23,
docket30398,theSupremeCourtsaidthatthefindingthatVeuve
Clicquotisafamousmark(bythetrialJudge)isofimportancein
considering”allthesurroundingcircumstances”becausefame
presupposesthatthemarktranscendsatleasttosomeextentthewares
withwhichitisnormallyassociated”.TheSupremeCourtnotedthat:The
evidenceshowsclearlythatVeuveClicquotcarriesanauraofluxury
whichmayextendoutsidethewineandchampagnebusiness,and
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may(astheappellant’sexpertstated)evokeabroadassociationwith
luxurygoods.”
TheInternationalTrademarkAssociation(INTA)intervenedtosupport
VeuveClicquotcasebeforetheSupremeCourtandarguedthatwhile
theexistenceofaconnectionbetweenthepartieswaresandservices
canbeanimportantconsiderationinthecaseofaweakseniormark,
itsimportancediminishesasthestrengthofthemarkincreases,andin
thecaseofafamousmark,ithaslittlebearingonthequestionof
confusion.TheSupremeCourtfoundthispropositiontobean
oversimplification.Famousmarksdonotcomeinonesize.Sometrade-
marksmaybewell-knownbuthaveveryspecificassociations(Buckley’s
coughMixtureisadvertisedaseffectivedespiteitsterribletaste,not,
onewouldthink,abrandimagedesirableforrestaurants).Otherfamous
marks,likeWaltDisney,mayindeedhavelargelytranscendedproduct
linedifferences.
TheCourtconcludedthattheevidencebeforethetrialJudge
establishedthattheVeuveClicquotmarkisfamousandcastsanaura
thatisnotcircumscribedbyassociationwithitstraditionalwineand
champagneproducts.Itsbroaderassociationwith”luxurygoods”does
not,however,createconfusionastosourcewithachainofmid-priced
clothingstoresortheproductstheymarket.ThetrialJudgeconcluded
thattheevidencedidnotestablishconfusion,ormakeaplausiblecase
forexpungementoftherespondents’marksand,intheviewofthe
Court,nobasisonwhichtointerferewiththatconclusionwasshown.
InMattel,Inc.v.3894207CanadaInc.,2006S.C.C.22docket30839,the
appellantarguedbeforetheSupremeCourtthattheMattel’sBarbie
trade-marksarefamousinCanadaandworldwide,thattheyinstantly
evoketheimageofthebrandinthemindofconsumers.Having
acquiredsuchfame,markssuchasBarbiemaynotnowbeusedin
Canadaonmostconsumerwaresandserviceswithouttheaverage
consumerbeingledtoinfertheexistenceofatradeconnectionwith
theownersofthesefamousbrands.TheSupremeCourtconfirmedthat
sometrade-marksmayhavethateffect,butrecognizedthattheTrade-
MarksOppositionBoardfoundBarbie’sfametobetiedtodollsanddoll
accessories.Atthisstage,itsfameisnotenoughtobootstrapabroad
zoneofexclusivitycovering”mostconsumerwaresandservices”.The
SupremeCourtconsideredthattheBoardwasnotrequiredto
speculateaboutwhatmighthappentotheBarbietrade-markinthe
future.Itwasrequiredtodealwiththerespondent’sapplicationonthe
factsestablishedintheevidence.
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TheSupremeCourtfurtherconfirmedthatevidenceofactualconfusion
isarelevant”surroundingcircumstance”butisnotnecessaryeven
wheretrade-marksareshowntohaveoperatedinthesamemarket
areafortenyears.Nevertheless,anadverseinferencemaybedrawn
fromthelackofsuchevidenceandcircumstanceswhereitwould
readilybeavailableiftheallegationoflikelyconfusionwasjustified.
B)Passingoff/Unfaircompetition:
1)Section7(b)
Nopersonshalldirectpublicattentiontohiswares,servicesorbusiness
insuchwayastocauseorbelikelytocauseconfusioninCanada,at
thetimehecommencedsotodirectattentiontothem,betweenhis
wares,servicesorbusinessandthewares,servicesorbusinessof
another.
General:
Section7(b)isastatutorystatementofthecommonlawactionof
passingoffwhichisaformofmisrepresentationwherebyatradertakes
“afreeride”onanotherperson’sgoodwillbypretendingthathiswares,
servicesorbusinessarethoseofthatotherperson.SeeMacDonaldv.
VaporCanadaLtd,[1977]2SCR134at147.
Anyactionbyatraderwhichislikelytoraiseconfusioninthemindofa
consumerwithrespecttothesourceofhiswares,servicesorbusiness
mayconstituteanactofpassingoff;”intention”doesnotconstitutean
elementofabreachofsection7(b).
Undersection7(b)passingoffmaybeaccomplishedbydifferent
means:useofaconfusingtrade-mark,tradename,get-up,signs,
advertising,etc…Onceatradercanprovethathisservicesorbusiness
arerecognizedinthemarketplacebydistinctiveindicias,noother
tradercanusesuchindiciasinawaytocauseorbelikelytocause
confusion.Inorderforaplaintifftosucceedinanactionofpassingoff,
hemustestablish:
a)aproprietaryright(goodreputation/goodwill),
b)aninvasionthatright,and
c)thattheplaintiffhassufferedorislikelytosufferdamagesduetothe
invasionofthatright.
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Forsometime,theconstitutionalityofsection7(b)remainedindoubt.
Recently,theSupremeCourtofCanadainajudgmentdated
November7,2005inKirkbiAGv.RitvikHoldingsInc.[2005]3SCCR302,
hasdecidedunanimouslythatsection7(b)waswithinthelegislative
competenceoftheParliamentofCanadaundersection91(2)ofthe
ConstitutionAct.
2)Commonlawtortofpassingoff:
Whenapartyseeksrelieffromacommonlawtortofpassingoff,itmust
seekthisrelieffromaprovincialcourtofcompetentjurisdiction,notthe
FederalCourt.
InDumontVins&SpiritueuxInc.v.CelliersduMondeInc.(1992)42
C.P.R.(3d)197,Décarie,J.A.(F.C.A.)wrote:
“Atcommonlawtherighttoatrade-markthusarosethroughthe
useofamarkbyabusinesstoidentifyitsproductstothepublic.
Therewasnoneedforthebusinesstoregisteritsmarkinorderto
protectitsrighttousethetrade-markandpreventthemisuseofits
trade-markbyotherbusinesses.Thepassingoffactionwasan
enforcementmechanismavailablefortheprotectionoftrade-mark
rights.Withoutthepassingoffaction,commonlawtrade-markrights
wouldhavelittlevalue.”
3)Unfaircompetition/civildelictunderarticle1457oftheCivilCode
ofQuebec:
Sucharecoursecanonlybeentertainedbeforeacourtofcompetent
jurisdictionwithintheprovinceofQuebec.Itmustberememberedthat
intheprovinceofQuebec,onlytheSuperiorCourthasjurisdictionto
issueinjunctionorders.Seearticle751oftheCodeofCivilProcedure.
Article1457oftheCivilCodeofQuebecstatesthateverypersonhasa
dutytoabidebytherulesofconductwhichlieuponhim,accordingto
thecircumstances,usageorlaw,soasnottocauseinjurytoanother.
Whenheisendoweddoubtwithreasonandfailsinthisduty,heis
responsibleforanyinjuryhecausestoanotherpersonbysuchfaultand
isliabletoreparationfortheinjury,whetheritbebodily,moralor
materialinnature(…).
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Ifanyonecompetesunfairlywithothers,hewillbeliableunderarticle
1457andcouldfaceaninjunctionorderorcondemnationfor
damages.
C)Depreciationofgoodwill:
Section22:
Nopersonshalluseatrade-markregisteredbyanotherpersonina
mannerthatislikelytohavetheeffectofdepreciatingthevalueofthe
goodwillthereto.
1)Purpose:
Pursuanttosection22oftheTrade-MarksAct,thecourthasa
discretionarypowertograntreliefincaseswhereapersonusesatrade-
markregisteredbyanotherpersoninamannerlikelytohavetheeffect
ofdepreciatingthevalueofthegoodwillattachedthereto.
2)Thefourelementsofsection22:
Section22hasfourelements:
1)Thataclaimant’sregisteredtrade-markwasusedbythedefendantin
connectionwithwaresorservices–whetherornotsuchwaresand
servicesarecompetitivewiththoseoftheclaimant.
2)Thattheclaimant’sregisteredtrade-markissufficientlywell-knownto
havesignificantgoodwillattachedtoit.Section22doesnotrequirethe
marktobewell-knownorfamousbutadefendantcannotdepreciate
thevalueofthegoodwillthatdoesnotexist.
3)Thattheclaimant’smarkwasusedinamannerlikelytohaveaneffect
onthatgoodwill(i.e.linkage),and
4)Thatthelikelyeffectwouldbetodepreciatethevalueofitsgoodwill
(i.e.damage).(seeVeuveClicquotPonsardinv.BoutiqueCliquotLtée,
2006SCC23,docket30398,paragraph46)
Nothinginsection22requiresademonstrationthatuseofbothmarksinthe
samegeographicareawouldbelikelytoleadtoconfusion.Theownerofa
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registeredtrade-markneedonlyshowthatthedefendantmadeuseofmarks
sufficientlysimilartotheregisteredtrade-marktoevokeinarelevantuniverse
ofconsumersamentalassociationofthetwomarksthatislikelytodepreciate
thevalueofthegoodwillattachingtothetrade-markownersregisteredmark
(seeVeuveClicquotPonsardinv.BoutiqueCliquotLtée,2006SCC23,docket
30398,para.38)
IntheVeuveClicquotcase,theplaintiff(appellants)acknowledgedthatthe
defendant(respondents)neveruseditsregisteredtrade-marksassuch,but
saysthatuseoftheword”Cliquot”conveystheidea.TheSupremeCourtof
CanadaagreeditwasnodefensethatCliquotisdifferentlyspelled.Ifa
casualobserverwouldrecognizethemarkusedbythedefendantsasthe
markoftheplaintiff(aswouldbethecaseifKleenexwerespelledKlenex),the
useofamisspelledCliquotwouldsuffice.Therequirementsofsection22have
tobeinterpretedinthelightofitsremedialpurpose(seeparagraph48ofthe
judgment).
AccordingtotheSupremeCourt,therewouldneedtobealink,connection
ormentalassociationintheconsumer’smindbetweenthedefendants’
displayandtheregisteredtrade-mark.Withoutsuchalink,connectionor
mentalassociation,therecanbenodepreciationofthegoodwillattaching
totheregisteredtrade-mark(seeparagraph49ofthejudgment).
TheSupremeCourtalsofoundthat”likelihoodofdepreciation”isamatterof
evidencenotspeculation.Theappellantanditssupportiveintervener
(InternationalTrademarkAssociation(INTA)),askedtheCourttoproceedasif
section22read:
“22(1)nopersonshallusea(famous)trade-markregisteredbyanother
person(becausetodoso)islikelytohavetheeffectofdepreciatingthe
valueofthegoodwillattachingthereto”.(seeparagraph60ofthe
judgment).
TheCourtfoundthatgiventhevariablecontentandmarketpowerof
“famousmarks”,nosuchgeneralizationispossibleandParliamentdidnotso
enact.(seeparagraph61ofthejudgment).
3)Use:
TheActspecificallydefinestheword”use”onlyinrelationtoatrade-
mark.Seesection2.
Atrade-markisalsodefinedinsection2asmeaning:
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(1)amarkwhichisusedbyapersonforthepurposeofdistinguishinghis
waresorservicesfromthewaresorservicesofothers.
(2)acertificationmark,
(3)adistinguishingguise,
(4)aproposedtrade-mark.
Iftheabovedefinitionsareappliedtosection22then,anypersonusinga
registeredtrade-markforapurposeotherthanthosementionedabove,
mayescapestatutoryliabilitysincehewouldnotbe”using”themarkasa
trade-markwithinthemeaningoftheAct.Mr.JusticeThurlowinthecase
ofClairolInternationalCorp.v.ThomasSupplyandEquipmentCo.Ltd.
(1968),38FoxPat.C.176at195-96definestheword”use”inthecontext
ofsection22,asfollows:
“Initsordinarysensethelanguageofsection22(1)isIthink,broad
enoughtoembraceuseslikelytohavetheresultofdepreciating
goodwillwhicharefarremovedfromthetypeofcaseIhave
mentioned.Indeedinitsordinarysensethelanguageseemsbroad
enoughtoincludeaconversationinwhichapersonadversely
criticizesgoodswhichheidentifiesbyreferencetotheirtrade-mark.I
regarditashighlyunlikely,however,thatsobroadaprohibition
couldhavebeenintended.Inthecourseofhisargument,Mr.
Hendersontreatedthemeaningof”use”asreferringtouseonlyin
competitivetrading,butwhileIthinkthatuseinthecourseof
tradingisalimitationwhichisobviouslypresent,thestatutebeing
onerelatingtotrade-marksandunfaircompetition,thistoowould
leaveverywidescopefortheprohibition.Therearemanycommon
instancesoftheuseoftrade-marksinthecourseoftradingwhichI
donotthinkthesectioncouldhavebeenintendedtoprohibit.A
trade-markis”used”forexample,inthissenseinthecourseoftrade
whenashopkeeperexhibitsaposteronhiscounterorinhisshop
withacomparativepricelistindicatingbyreferencetotheirtrade-
marksthegoodsofseveraltraderswhomaybecompetitorsofone
another.Itisalsousedinthissenseinthecourseoftradewhena
salesclerkmakesreferencetoitinthecourseofdiscussingthemerits
oftheowner’sgoodswithacustomer,whetherincomparisonwith
thegoodsofothertradersornot.Suchusescould,dependingon
whatwasbeingsaid,tendtoadverselyaffectthegoodwill
attachingtoatrade-markbutIdonotthinkthestatuteisintended
toforbidlegitimatecomparisonsorcriticismsofthatking.RatherI
16
thinktheverb”use”insection22istobeinterpretedbyreferenceto
thedefinitionofthenoun”use”insection2(v)theeffectofwhichis
toconfinetheapplication,andthereforetheprohibition,ofsection
22toausewhichanypersonmaymake,inassociationwithgoods
orserviceswithinthemeaningofsections(sic)ofsection4of
another’sregisteredtrade-markinsuchamannerastodepreciate
thevalueofthegoodwillattachingthereto.
Asappliedtoacaseofthiskindsection22(1)mightinaccordance
withthisinterpretationbereadasfollows:
Nopersonshalluseinassociationwithwareswithinthe
meaningofsection4amarkthatisusedbyanotherpersonfor
thepurposeofdistinguishingorsoastodistinguishwares
manufacturedetc.byhimfromthosemanufacturedetc.by
othersandwhichmarkhasbeenregisteredbyhimashistrade-
mark,inamannerlikelytodepreciatethevalueofthegoodwill
attachingthereto.
If,asIthink,thisisthecorrectwaytointerprettheverb”use”in
section22(1)itfollowsfromwhatIhavealreadysaidwhen
consideringsection4thatthepresenceoftheplaintiffs’trade-marks
onthedefendants’packagesiswithinthemeaningof”use”in
section22(1)butthattheirpresenceintheplaintiffs’brochuresisnot
withinit.Itremains,however,toconsiderwhethertheusesomade
oftheplaintiffs’marksonthedefendants’packagesisuseina
mannerlikelytodepreciatethevalueofthegoodwillattachingto
theplaintiffs’marks”.
4)Depreciationofthevalueofthegoodwill:
Theexpression”goodwill”and”depreciatingthevalueofgoodwill”in
section22(1)havebeeninterpretedbyMr.JusticeThurlowinClairol
InternationalCorp.v.ThomasSupply,supra,asfollows:
“Thenwhatismeantby”depreciatethevalue”ofsuchgoodwill.To
mymindthismeanssimplytoreduceinsomewaytheadvantageof
thereputationandconnectiontowhichIhavejustreferred,totake
awaythewholeorsomeportionofthecustomotherwisetobe
expectedandtomakeitlessextensiveandthuslessadvantageous.
AsIseeitgoodwillhasvalueonlytotheextentoftheadvantageof
thereputationandconnectionwhichitsownerenjoysandwhatever
reducesthatadvantagereducesthevalueofit.Depreciationof
17
thatvalueinmyopinionoccurswhetheritarisesthroughreduction
oftheesteeminwhichthemarkitselfisheldorthroughthedirect
persuasionandenticingofcustomerswhocouldotherwisebe
expectedtobuyorcontinuetobuygoodsbearingthetrade-mark.
Itdoesnot,however,asIseeit,arise,assubmittedbyMr.
Henderson,fromdangeroflossofexclusiverightsasaresultofuse
byothersasthisinmyviewrepresentspossiblelossofexclusiverights
inthetrade-markitselfratherthanreductionofthegoodwill
attachingtoit”.
5)Specialorder:
Undersection22(2),thecourtmay
(1)declinetoordertherecoveryofdamagesorprofits,and
(2)permitthedefendanttocontinuetoselltheoffendingwares.
Thediscretiongrantedunder(1),supra,seemstobeinaccordance
withthegeneraldiscretionofacourttograntorrefuserelief,whereas
thediscretiongrantedunder(2),supra,seemstogobeyondthenormal
discretionarypowersofacourtsince,ifexercised,itwillallowa
defendanttocontinuesellinghiswareseventhoughtheymaybe
offending.Thisdiscretionis,however,limitedtothosewaresinthe
possessionorunderthecontrolofthedefendantatthetimethathe
wasnotifiedbytheowneroftheregisteredtrade-markcomplainingof
suchuse.
Thediscretionofthecourtwillbeexercisedinthelightofallthe
surroundingcircumstances,suchastheintentionoftheoffendingparty.
SeeSeven-UpCo.v.Coca-ColaLtd.(1980),51C.P.R.(2d)176,and
ClairolInternationalCorp.v.ThomasSupplyat202,supra.
D)Remedies:
Section53(1)statesthatwhereacourtissatisfied,onapplicationofany
interestedperson,thatanyacthasbeendonecontrarytothisAct,the
courtmaymakeanyorderthatitconsidersappropriateinthe
circumstances,includinganorderprovidingforreliefbywayofinjunction
andrecoveryofdamagesorprofitsandforthedestruction,exportation
orotherdispositionofanyoffendingwares,packages,labelsand
advertisingmaterialandofanydiesusedinconnectiontherewith.
18
1)Purposes:
Undersection53.2oftheTrade-MarksAct,acourtofcompetent
jurisdictionhastheauthoritytograntreliefagainstanyactthatiscontrary
totheTrade-MarksAct.
2)General:
IfanactisdonecontrarytotheTrade-MarksAct,theFederalCourtora
SuperiorCourtofaprovincemaymakeanysuchorderasthe
circumstancesrequireincluding,butnotrestrictedto,therelief
mentionedinsection53.2,subjecttotherulesofthecourthearingthe
matter.
Section53.2makesspecificreferencestothefollowingreliefs:
-Injunction
-Recoveryofdamages
-Recoveryofprofits
-Punitivedamages(intheFrenchtextonly)
-Destruction
-Exportation,or
-Otherdispositionofoffendingwares,packages,labelsandadvertising
materialandofdies.
3)Injunction:
3.1.Permanentinjunction:
a)Source
Anactionforpermanentinjunctionconsistsofanequitableremedy.This
isequallysointrade-markinfringementactions.Historically,therecourse
wasinvokedinordertoforcethedefendanttorespectequitable
principles.AllsuchequitableremediesweregrantedbytheCourtof
Chancery.Legalremedies,ontheotherhand,weregrantedbythe
commonlawcourts.Inthe18
thcentury,thecourtsinEnglandwere
mergedtoincludejurisdictionforbothlegalandequitablerelief:see
Sharpe(RobertJ.),InjunctionsandSpecificPerformance,2
nded.
(Toronto:CanadaLawBook,1992).
19
b)CourtsofcommonlawprovincesandtheFederalCourtofCanada
InCanada,theSuperiorCourtofeachcommonlawprovincehasthe
jurisdictiontoissueinjunctiverelief.
TheFederalCourtofCanadaalsoexercisessuchpowers,butonlywithin
thelimitsofthestatutefromwhichitderivesitsjurisdiction.
WhereastheFederalCourtisacreatureofastatuteanditspowersare
restrictedtothosesetoutintheFederalCourtsAct,theSuperiorCourtsof
thecommonlawprovincescanbesaidtobeacontinuationofthe
courtsofcommonlawandequity.Theirjurisdictionisgeneraland
inherent:seeCommonwealthofPuertoRicov.Hernandez(1973),[1975]
1S.C.R.228,PigeonJ.,atpp.232-233.
c)PowerofQuebecSuperiorCourttograntinjunction
IntheprovinceofQuebec,theSuperiorCourtisthecourtoforiginal
generaljurisdiction:seearticle31oftheQuebecCodeofCivil
Procedure,R.S.Q.,c.C-25.Eventhoughothertribunalsmaysanctiontheir
processanddecisionsbywayofcontemptproceedings,theissuanceof
injunctionordersistheexclusiveresortoftheQuebecSuperiorCourt:see
ProcureurgeneralduQuébecv.ProgressBrandClothesInc.[1979]C.A.
326(Que.C.A.)BélangerJ.:seealsoarticles46and751andfollowingof
theQuebecCodeofCivilProcedure(R.S.Q.,c.C-25).
3.2Interlocutoryinjunctions
a)General
Inthecourseofaninfringementaction,thetrade-markownermay,in
certaincases,beentitledtoanorderforinterlocutoryinjunction.This
equitableremedymustbeexercisedwithduediligenceandis
discretionaryinnature.Theapplicantmustdemonstratethatthereisa
seriousissuetobetried,irreparableharmcanbecaused,andthatthe
balanceofconveniencefavourshim,exceptincasesofblatant
infringementwherethislattercriterionmayberelaxed.However,the
courtwillbelesslikelytograntanorderofinterlocutoryinjunctionwhere
theapplicantcanbecompensatedadequatelyindamages.
20
b)Thresholdtest
TheFederalCourtofAppealrecalledinTurboResourcesLtd.v.Petro
CanadaInc.,[1989]2F.C.451(F.C.A.)StoneJ.,atpp.473-474thatthe
objectoftherecourseforinterlocutoryreliefasstatedbytheHouseof
LordsinAmericanCyanamidCompanyv.EthicomLtd.(1974),[1975]
A.C.396(H.L.),wastoprotecttheplaintifffrominjurybyviolationofhis
rights,forwhichhecouldnotbeadequatelycompensatedindamages
recoverableintheaction(iftheuncertaintywereresolvedinhisfavourat
trial).
Afterdiscussingtheobjectofinterlocutoryinjunctionproceedings,the
FederalCourtofAppealquestionedwhethertheCyanamidtestwasas
rigidandindeedasradicalasthemotion’sjudgeandthelowercourtsin
thecommonlawprovincesseemedtobelieve.
Inhisreasons(atp.467),theHonourableJusticeStoneoftheFederal
CourtofAppealsuggestedthatflexibilitymaybefoundintheCyanamid
doctrine,thankstothebalanceofconveniencetestsetouttherein
whichisofparamountimportance:
“AsIunderstandit,thisflexibilityistobeachievedintheendunder
thefullAmericanCyanamidformulationbyhavingregardforthe
balanceofconvenienceasbetweentheparties,whichthus
becomesdecisiveintheexerciseofthetrialjudge’sdiscretion.
Satisfyingthethresholdtestof”aseriousquestiontobetried”doesno
more,sotospeak,thanunlatchthedoortoaplaintiff;itneither
opensitnor,lessstill,permitshimtopassonthrough.Thathemaydo
onlyifthebalanceofconvenienceisfoundtolieinhisfavour”.
TheCourttookgreatpainstospecifythatsatisfactionofthethresholdtest
wasmerelyabeginninganddidnotguaranteevictorytotheplaintiffas
hadbeensuspectedbythemotion’sjudgeintheTurbocase,andbythe
lowercourtsinthecommonlawjurisdictionsofCanada.Togobeyond
the”threshold”asitweretheHonourableJusticeStonestatedthatone
mustdemonstratethatthebalanceofconvenienceliesinone’sfavour.
TheFederalCourtofAppeal,therefore,hadnodifficultyadoptingthe
Cyanamidthresholdtest.However,theCourtexplainedthatthe
approachinCyanamidwas,ifconsideredinitsentirety,notasone-
dimensionalandrigidaspreviouslyexpressedinCanadianjurisprudence
andmoreparticularly,inthefirstinstance.
21
Ineffect,oncetheFederalCourtofAppealwassatisfiedthatthe
thresholdtesthadbeenmet,itwentontosetouttheadditionalfactors
thatmaybeweighedandconsideredbytheCourtonceitwas
establishedthatthereisaseriousquestiontobetried.Thesefactorsare
listedinthejudgmentatpp.473-474asfollows:
“(a)Whereaplaintiff’srecoverabledamagesresultinginthe
continuanceofthedefendant’sactivitiespendingtrialwouldbean
adequateremedythatthedefendantwouldbefinanciallyableto
pay,aninterlocutoryinjunctionshouldnotnormallybegranted;
(b)Wheresuchdamageswouldnotprovidetheplaintiffan
adequateremedybutdamages(recoverableundertheplaintiff’s
undertaking)wouldprovidethedefendantwithsucharemedyfor
therestrictiononhisactivities,therewouldbenogroundforrefusing
aninterlocutoryinjunction;
(c)Wheredoubtexistsastotheadequacyoftheseremediesin
damagesavailabletoeitherparty,regardshouldbehadtowhere
thebalanceofconveniencelies;
(d)Whereotherfactorsappeartobeevenlybalanced,itisprudent
totalesuchmeasuresaswillpreservethestatusquo;
(e)Wheretheevidenceontheapplicationissuchastoshowone
party’scasetobedisproportionatelystrongerthantheother’s,this
factormaybepermittedtotipthebalanceofconvenienceinthat
party’sfavourprovidedtheuncompensatabledisadvantageto
eachpartywouldnotdifferwidely;
(f)Otherunspecifiedspecialfactorsmaypossiblybeconsideredin
theparticularcircumstancesofindividualcases.[sic]”
ThesecriteriaarenotexhaustiveandtheCourtexpresslywarnedagainst
arigidapproachtotheirapplication.
c)Othertestsrelevanttotheproceedings
Introduction
InthecourtsofthecommonlawprovincesandtheFederalCourt,Turbo
ResourcesLtd.v.PetroCanadaInc.[1989]2F.C.451(F.C.A.)andSyntex
Inc.v.NovopharmLtd.(1991),126N.R.114(F.C.A.)aretheleadingcases
22
withrespecttotheapproachtobetakenbythecourtsininterlocutory
injunctionproceedingsinintellectualpropertycases.
EvenifoneappliesthethresholdtestassetoutinTurbo,regardmustbe
hadtothevariousteststhathavealwaysbeenapartofthelawof
interlocutoryinjunction:
Irreparableharmandadequacyofdamages
TheFederalCourtofAppealhasclarifiedanotheraspectofinterlocutory
injunctionproceedingsinintellectualpropertycaseswithrespectto
irreparableharm.IntheNovopharmcase,theFederalCourtofAppeal
reaffirmedtheprinciplesoutlinedintheTurbocasebutsetouta
requirementpreviouslyoftenoverlookedininterlocutoryinjunction
applicationsinindustrialpropertyinfringementactions.
Thisrequirementrelatestothequestionofirreparableharmwhichmay
besaidtofallintofactor(b)inTurbo,supra.PriortotheNovopharmcase,
itwasoftenpresumedthattheinfringementofanintellectualproperty
rightpersecausedirreparableharm.TheFederalCourtofAppealclearly
setoutinNovopharmthatanapplicantwhowishestorelyonthe
irreparableharmdoctrinemustnotonlyallegeit,butalsoprovide
evidencewhichwillallowthetrialjudgetomakeaspecificfindingonthis
question.Evidenceastoirreparableharmmusttherefore,accordingto
theFederalCourtofAppeal,beclearandnotspeculative,evenin
industrialpropertycases.
TheCyanamidcaserejectedthestrongprimafaciecasetestasa
thresholdandreplaceditwiththe”seriousquestiontobetried”threshold
test.However,asstatedinTurbo,Cyanamiddidnotcloseofftheother
traditionalconsiderationsrelevanttoproperexerciseofdiscretionbya
courtonaninterlocutoryinjunctionapplication.
Equitableremediesarenottobegrantedunlesstheplaintiffshowsthat
theordinarylegalremedyindamageswouldbeinadequate.The
corollarytothisprincipleisthattheplaintiffmustbeatriskforaformof
injurywhichcannotbecompensatedorremediedotherthanthrough
thegrantofinjunctiverelief.Ifdamageswereanadequateremedy,and
thedefendantwasinapositiontopaythem,interlocutoryreliefshould
notbegrantednomatterhowstrongthecaseoftheplaintiffmaybe.
(SeeCentreiceLtd.v.NationalHockeyLeague(1994),53C.P.R.(3d)34).
Balanceofconvenience
23
Generally,thequestionofbalanceofconvenienceariseswherethereis
doubtastotheadequacyofarecourseindamagesbytheplaintiffor
theadequacyofanundertakingtopaydamagesprovidedbythe
defendant.ThequestionaskedbytheCourtonthebalanceof
convenienceshouldbe:Istheinconveniencetothedefendantmore
substantial,shouldtheinjunctionbegranted,thantheinconveniencethe
plaintiffwouldsufferifitwerewithheld?Basically,thebalanceof
convenienceisarisk-balancingexerciseandthefactorstobe
considerediscarryingitoutwillvaryfromcasetocase.
Delayandacquiescence
Sinceinterlocutoryreliefisequitableinnature,thedefendantisentitled
toinvokeequitableconsiderationsincontestation.Thedefenceofdelay
is,therefore,availabletothedefendantifheshowsthathehasbeen
prejudicedbythedelayorthattheplaintiffisresponsibleforlaches.
Acquiescencebytheplaintifftotheactsofthedefendantinatrade-
markinfringementactionmayalsobesetupagainsttheplaintiffin
interlocutoryproceedings.
Plaintiff’sundertakingindamages
Althoughthecourtshavediscretiontodispenseaplaintifffromdoingso,
itisgenerallyrecognizedthattheplaintiffshould,inaninterlocutory
injunctionapplication,undertaketopayanydamagesthattheorder
soughtmaycausethedefendant,iftheplaintifffailsonthemerits.This
obligationconfirmstherisk-balancingexerciseinherentininterlocutory
injunctionproceedings.
d)AntonPillerorder
Introduction
Suchordershaveevolvedinresponsetoincreasingworldwide
counterfeitingactivities.AntonPillerordershavedevelopedasa
commonlawremedywhichisancillarytothebasicequitablerighttoan
injunction.Aplaintiffmay,incertainextraordinarycases,requestthe
issuanceofanAntonPillerorderessentiallytoensureconservationof
evidence.
Theseordersconsistofaformofcivilsearchwarrantusuallycontaininga
“gag”orderprohibitingthedefendantfromdisclosingtheexistenceofthe
24
proceedingstoanyoneelsebuthissolicitor.Thistypeoforderalsoallows
theplaintiffaccesstothedefendant’spremiseswheretheplaintiffmay
removedocumentssuchasaccountingdocumentsorgoodssuchas
counterfeitgoodswhichmayconstituteevidence.
History
TheseordersoriginatedintheCivilDivisionoftheCourtofAppealin
EnglandinthecaseofAntonPillerKGv.ManufacturingProcessLimited
(1975),[1976]Ch.55(C.A.).
Inthatcase,AntonPillerKGwasamanufactuerofelectronicmachinery
andgeneratorsforthecomputerindustry.ThedefendantswereAnton
Piller’sagentsintheUnitedKingdom.ThemachinesofAntonPillerKG,a
Germancompany,weresoldbythedefendantstocustomersinEngland.
Intheprocessoftheirbusinessrelationship,AntonPillersuppliedthe
defendantswithinformationaboutthemachineswhichincludeda
manualanddrawingswhichweresubjecttocopyright.Theplaintiffin
thatcaselearnedofthedisclosureoftradesecretsbythedefendantsto
Germancompetitors.Ineffect,thedefendantsweresupplyingdrawings
andothermaterialtocompetitorswhichwouldpermitthemto
manufactureproductssimilartothosemanufacturedbytheplaintiff.
Itconsistedofacasewheretheplaintiffcouldnotconceivablygive
noticeofanyproceedingsitwouldtakeagainstthedefendantswithout
riskingthelossordestructionbythedefendantsoftherelevant
documentscrucialtotheplaintiff’scase.Afterbeingunsuccessfulinthe
firstinstance,theplaintiffobtainedanorderpursuanttoahearingin
camerabeforetheCourtofAppeal,entitlingtheplaintifftoanorder
allowingittoattendatthebusinesspremisesofthedefendantstoinspect
alldocumentsandremovethosedocumentsoranycopiesofthem.
Conditionsforavailability
Ingrantingthisorder,theCourtsetoutthreeessentialpre-conditions
whichmustexistforthemakingofanordersuchasthatsoughtbythe
plaintiffinthatcase.Thesethreeconditionshavesincebeenadoptedin
Canada.SeeTitanSportsInc.v.MansionHouse(Toronto)Ltd.(1989),28
C.P.R.(3d)199(F.C.T.D.)wherethethreeconditionsweresummarized:
i)wherethereisastrongprimafaciecaseforaninjunction,
ii)wherethedamagelikelytobecausedtotheapplicantwouldbe
veryserious,and
25
iii)wherethereisarealpossibilitythatthedefendantwilldestroyor
secreteincriminatingdocumentsorthingsifthereisadvance
noticeoftheorder.
TheseconditionswereadoptedbytheFederalCourtofAppealin
NintendoofAmerica,Inc.v.CoinexVideoGamesInc.(1982),69C.P.R.
(2d)122,atp.129
Itiscommonpracticefortheplaintifftofurnishsecurityfordamages
whichmaybesufferedbythedefendantasaresultoftheseizure,inthe
eventtheplaintiffisunsuccessfulonthemerits.
ProcedureinFederalCourt
IntheFederalCourtofCanada,AntonPillerordersmayberequestedin
accordancewithRule377oftheFederalCourtsRules.Theseapplications
areheardincameraanditisimperativethattheplaintiffinclude,inthe
affidavit,evidenceonallegationsmeetingthethreeconditionsoutlined
above.
ProcedureinQuebec
TheQuebecSuperiorCourthavingbeenvestedwiththerighttogrant
injunctions,ithasfullauthoritytorenderordersforthebetter
administrationofinterlocutoryproceedings.TheSupremeCourtof
CanadadeclaredinTrudelv.ClairolInc.ofCanada(1971),[1975]2
S.C.R.236thatwheretheCodeofCivilProcedurereferstoinjunctions,itis
referringtoinjunctionsastheyareknownincommonlawjurisdictions.As
such,AntonPiller-typeordersformpartofthelawinQuebec:seeFerco
InternationalUsinedeFerruresdeBâtimentv.WoreliManagementCo.,
(unreported),Que.Sup.Ct.,Doc.No500-05-062603-924,ArchambaultJ.,
February20,1992.
4.Recoveryofdamagesorprofits
4.1Introduction
Theinfringermaybeliabletopaysuchdamagesasmayhavebeen
provenorsuchpartoftheprofitsthattheinfringerhasmadefromthe
infringementastheCourtmayconsiderappropriateinthe
circumstances.Contrarytocopyrightinfringementcaseswherethose
remediesarecumulative,intrade-markinfringementmatterstheyare
alternatives.
26
4.2Profitsordamages
Section53.2foreseestheavailabilityofanyrecoursewhichisormaybe
conferredbylaw.Therecoveryofprofitsis,inprinciple,anequitable
remedy:seeDubinerv.CherioToys&GamesLtd.,[1966]Ex.C.R.801(Ex.
Ct.)andTeledyneIndustriesInc.v.LidoIndustrialProductsLtd.(1982),68
C.P.R.(2d)204.However,sincetheTrade-MarksActexpresslyforesees
therecourse,ithasbecomealegalremedytobeinterpretedin
accordancewiththeprinciplesofequityfromwhichitisderived.
Incontrasttotheforegoing,arecourseindamagesmaybesaidtobea
strictlylegalremedy.Whenoneinvokesthelegalremedyofdamages,
thecourtwillseektoallowtheplaintifftomakegoodonitsloss.Reliefin
equity,however,hasadifferentbasis.Anequitablerecourseisinvoked
againstthedefendantwhohasillegallyreceivedandwithheldproperty
belongingtotheplaintiff,andhasmadeprofitsfromsame.Insuchcases,
thedefendantisorderedtorestorethepropertyortheprofits.
Inlaw,damagesareawardedfortheplaintiff’sprovenloss.Inequity,itis
thedefendant’sgainwhichisdeterminedandawardedtotheplaintiff.
Thediscretionarynatureofanawardofprofitsinacopyright
infringementactionisexpresslyconfirmedbysection35(1)ofthe
CopyrightActwhichstatesthattheCourtmayaward”suchpartofthe
profitsthattheinfringerhasmadefromtheinfringementastheCourt
maydecidetobe”justandproper”.Section53.2oftheTrade-MarksActis
notasexplicit;however,Parliamentdidindicatethat”thecourtmay
makeanyorderthatitconsidersappropriateinthecircumstances,
includinganorderprovidingfor…therecoveryofdamagesorprofits…”.
Thecorollarytotheaboveshouldbethatequitabledefencesmaybe
raisedincontestationofademandforprofits.
4.3Exemplaryorpunitivedamages
TheFrenchtextofsection53.2specificallymentionsthegrantingof
punitivedamageswhiletheEnglishtextistotallysilentonthesubject.
OnemustconcludethattheadditionintheFrenchtextcannothave
beentheresultofanoversight.Thereasonforthisisprobablythefact
thatunderQuebeccivillaw,punitivedamagesareexceptionaland
availableonlywhenprovidedbylaw(art.1621C.C.Q.).Underthe
commonlawoftheotherprovincesofCanada”punitivedamages”are
27
includedinthemoregeneralconceptof”damages”asstatedinthe
Englishtextofsection53.2.Punitiveorexemplarydamageswillusuallybe
awardedwhenthedefendanthasshownacynicaldisregardforthe
plaintiff’srights,wherethedefendanthastakenacalculatedriskthatthe
moneyhecouldmakethroughhisinfringingactivitieswouldexceedthe
damagesobtainablebytheplaintiffandwhereprofits,forlackofproper
accountingrecords,aredifficulttoevaluate.
Therationaleforprovidingarecourseforexemplarydamagesisthat
muchofthevalueinatrade-markisintangibleanditisoftendifficultto
demonstrateclearlythedamageswhichhavebeensufferedbythe
trade-markowner.Further,itisoftendifficulttoprovetheprofitsofthe
infringingparty.Itis,therefore,difficulttoachievethatwhichissoughtby
awardingcompensatorydamages–therestoringoftheplaintifftothe
positionhewouldhavebeeninhadtheinfringementnotbeen
committed.
5.Destructionorexportation
Thesearetworemedieswhichwerenotassuchavailableunderformer
section53.Thecourtdidhavethepowertogivedirectionswithrespect
tothedispositionofanyoffendingwares;thispowercouldhaveincluded
thereliefbywayofdestructionorexportation.Ifevertherewereadoubt,
thisdoubthasnowdisappeared.
6.JohnDoeorders
Trade-markinfringerswhohaveaknownplaceofbusinessarerelatively
easytoidentifyandbringtocourt.Ontheotherhand,JohnDoeselling
CARTIERwatchesorLOUISVUITTONhandbagsofillegalandunknown
originonthecornerofBloorandYongeStreetinTorontomaybemore
difficulttolocateandservewithlegaldocuments.Evenwhencaught,
theexecutionofanyorderoftheCourtisvirtuallyimpossibletoverify.
Theproblemisrealandcreatessubstantialdamagestotrade-mark
owners.InMontresRolexS.A.v.Balshin(1992),45C.P.R.(3d)174,the
FederalCourtofAppealmaintainedaninjunctionrestrainingunknown
personsengagedinthesaleofimitationwatches,priortothetrialdate,
frominfringingtheappellant’strade-mark.
28
JohnDoeorderswillgenerallyapplytovendorsfoundinspecific
locations.Theorderwillalsogenerallyprovidethefollowingguidelinesfor
itsenforcement:
(a)Eachofthedefendantsshallbeservedwithacopyofthe
StatementofClaimintheactionandacopyoftheorder;
(b)Eachofthedefendantsshallbeaskedtoidentifythemselves
andiftheydoidentifythemselvesthentheirnamesshallbeentered
asdefendantsontheorderatthattime;and
(c)Asolicitoremployedbythesolicitorsfortheplaintiffsshallexplain
tothedefendantordefendantsthenatureandeffectoftheorder
inordinarylanguageandinformthedefendantsthattheymay
applytothiscourtforthereturnofanywatchesseized.
7.Deliveryup
Whilesection53.2doesnotspecificallymakereferenceto”deliveryup”,
thisremedyisavailabletotheplaintiffas”otherdispositionsofany
offendingwares,packages,labelsandadvertisingmaterialandofany
diesusedinconnectiontherewith”.However,inthecaseofanaction
basedonsection22oftheTrade-MarksAct,(depreciationofgoodwill)
thecourtmaypermitthedefendanttosellwaresmarkedwiththe
offendingtrade-markwhichwereinthedefendant’spossessionorunder
hiscontrolatthetimenoticewasgiventothedefendantthattheowner
oftheregisteredtrade-markcomplainedofsuchuse.Seesection22(2).
E)Defenses:
1)General
Section53.2givestherighttoinstitutelegalproceedingsto”any
interestedperson”.
Section2definestheexpression”person”asincludinganylawfultrade
unionandanylawfulassociationengagedintradeorbusinessorthe
promotionthereof,andtheadministrativeauthorityofanycountry,state,
province,municipalityorotherorganizedadministrativearea.
Section2alsodefines”personsinterested”asincludinganypersonwhois
affectedorreasonablyapprehendsthathemaybeaffectedbyany
29
entryintheregister,orbyanyactoromissionorcontemplatedactor
omissionunderorcontrarytothisAct,andincludestheAttorneyGeneral
ofCanada.
Therefore,adefendantcandefenditselfagainstanyclaimundersection
53.2bydemonstratingtoacourtofcompetentjurisdictionthatthe
plaintiffisnotapersoninterested.
2)Defensesundersection19
a)Thetrade-markoftheplaintiffisnotregistered;
b)Thedefendantisnotmakinguseofthetrade-mark;
c)Thetrade-markofthedefendantisnotidenticaltotheregistered
trade-markoftheplaintiff(notthesameword,notthesame
design);
d)Thedefendantdoesnotusetheregisteredtrade-markofthe
plaintiffinassociationwiththegoodsorserviceslistedinthe
registration;
e)Theregisteredtrade-marksoftheplaintiffisinvalid(seesection18
oftheTrade-MarksAct).
3)Defensesundersection20
a)Thetrade-markoftheplaintiffisnotregistered;
b)Thedefendantisnotmakinguseofthetrade-mark;
c)Thereisnoactualconfusionandnolikelihoodofconfusion
betweenthemarkusedbythedefendantandtheregistered
trade-markoftheplaintiffapplyingtheteststobefoundat
section6,whicharenotexhaustive;
d)Thedefendantusesthetrade-markinadescriptivemanner;
3.1Exceptions:
a)General
30
Therightsgrantedtotheownerofaregisteredtrade-markare
subjecttothespecificexceptionssetoutinsubsections20(1)(a)and
20(1)(b)andinsubsection20(2).Theregistrationofatrade-markwill
notpreventapersonfrommakinganybonafide:
(1)useofhispersonalnameasatradename,or
(2)use,otherthanasatrade-mark,
(a)ofthegeographicalnameofhisplaceofbusiness,or
(b)ofanyaccuratedescriptionofthecharacterorqualityof
hiswares
orservices
unlesssuchuseislikelytohavetheeffectofdepreciatingthevalue
ofthegoodwillattachingtotheregisteredtrade-mark.
Subsection20(2)makesafurtherexceptionforgeographical
indicationsforwinesandspiritslistedinsubsections11.18(3)and(4).
b)Useotherthanasatrade-mark
Section20(1)(a)onlyallowstheuseofapersonalnameasatrade
nameandnotasatrade-mark.
Section20(1)(b)onlypermitsapersontousethegeographical
nameofhisplaceofbusinessoranyaccuratedescriptionofthe
characterorqualityofhiswaresorservicesiftheuseisotherthanas
atrade-mark.
c)Goodfaith
Theexceptionprovidedforinsection20(1)(a)and20(1)(b)canonly
beinvokedifthedefendantcanshowgoodfaith.Acourtwouldbe
likelytofindthatadefendantisnotactingingoodfaith,if,for
examplehewasusingonhislabels,thegeographicalnameofhis
placeofbusiness,togetherwithotherindiciasalsoappearingonthe
labelsusedbytheregisteredtrademarkowner,insuchamanneras
tocreateconfusionwiththeregisteredtrademark.
d)Goodwill
Theexpression”depreciatingthevalueofgoodwill”hasbeen
interpretedbyMr.JusticeThurlow,inthecaseofClairolInternational
31
Corp.v.ThomasSupply&EquipmentCo.Ltd.(1968),38FoxPat.C.
176at199:
“Thenwhatismeantby”depreciatethevalue”ofsuchgoodwill.
Tomymindthismeanssimplytoreduceinsomewaythe
advantageofthereputationandconnectiontowhichIhave
justreferred,totakeawaythewholeorsomeportionofthe
customotherwisetobeexpectedandtomakeitlessextensive
andthuslessadvantageous.AsIseeitgoodwillhasvalueonly
totheextentoftheadvantageofthereputationand
connectionwhichitsownerenjoysandwhateverreducesthat
advantagereducesthevalueofit.Depreciationofthatvalue
inmyopinionoccurswhetheritarisesthroughreductionofthe
esteeminwhichthemarkitselfisheldorthroughthedirect
persuasionandenticingofcustomerswhocouldotherwisebe
expectedtobuyorcontinuetobuygoodsbearingthetrade-
mark.Itdoesnot,however,asIseeit,arise,assubmittedbyMr.
Henderson,fromdangeroflossofexclusiverightsasaresultof
usebyothersasthisinmyviewrepresentspossiblelossof
exclusiverightsinthetrade-markitselfratherthanreductionof
thegoodwillattachingtoit”.
e)Thetrade-markisinvalid
Section17(2)
Inproceedingscommencedaftertheexpirationoffiveyears
fromthedateofregistrationofatrade-markorfromJuly1,
1954,whicheveristhelater,noregistrationshallbeexpunged
oramendedorheldinvalidonthegroundoftheprevioususe
ormakingknownreferredtoinsubsection(1),unlessitis
establishedthatthepersonwhoadoptedtheregisteredtrade-
markinCanadadidsowithknowledgeofthatprevioususeor
makingknown.
Section18(1)
Theregistrationofatrade-markisinvalidif
(a)thetrade-markwasnotregistrableatthedateof
registration,
32
(b)thetrade-markisnotdistinctiveatthetimeproceedings
bringingthevalidityoftheregistrationintoquestionare
commenced,or
(c)thetrade-markhasbeenabandoned,
andsubjecttosection17,itisinvalidiftheapplicantfor
registrationwasnotthepersonentitledtosecurethe
registration.
4)Defensesundersection22
a)Thetrade-markoftheplaintiffisnotregistered;
b)Theplaintiff’sregisteredtrade-markwasnotusedbythe
defendantinconnectionwithwaresorservices;
c)Thetrade-markofthedefendantisnotidenticaltotheregistered
trade-markoftheplaintiffandtheusewhichismadebythe
defendantdoesnotconveythesameideaandacasual
observerwouldnotrecognizethemarkusedbythedefendant
asthemarkoftheplaintiff;
d)Theregisteredtrade-markoftheplaintiffisinvalid(seesect.18of
theTrade-MarksAct);
e)Theplaintiff’sregisteredtrade-markisnotsufficientlywell-known
tohavesignificantgoodwillattachedtoit,section22doesnot
requirethemarktobewell-knownorfamousbutthedefendant
cannotdepreciatethevalueofthegoodwillthatdoesnotexist;
f)Thelikelyeffectoftheuseofthetrade-markbytheDefendant
wouldnotbetodepreciatethevalueofthegoodwill;
g)Thereisnoconnectionbetweentheregisteredtrade-markofthe
plaintiffandthetrade-markusedbythedefendant.
5Defensesundersection7(b)
a)Absenceofgoodwill;
b)Nolikelihoodofconfusion;
33
c)Thepartiesarenotincompetition;
d)Theconfusionwhichisallegedtoexistdoesnotimplyatrade-
mark;
e)Thetrade-markisinvalid;
f)Theallegedtrade-markisfunctional(seeKirkbyAGv.Ritvik
HoldingsInc.[2005]3S.C.R.302.
____________________________
34
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