Recent Decisions April 2003
I. FEDERAL COURT DECISIONS
(a) Patents
1. Eli Lilly Canada v. Canada (Minister of Health), January 22, 2003 FCA (Isaac, Sharlow and Malone JJ.A.) Patent Register/Review of Minister's Decision to Remove Patent from Register/Reinstatement of Patent/Patented Medicines (Notice of Compliance) Regulations/1998 Regulatory Impact Analysis Statement
Appeal from an order dismissing an application by Lilly for judicial review of a decision of the Minister to remove a patent from the patent register maintained under the NOC Regulations. All claims of the patent are for the antibiotic ceftazidime pentahydrate in combination with amorphous lactose. The lactose is incorporated to avoid a toxicity problem. Lilly found an alternative solution to the toxicity problem, which it guards as a trade secret. The drugs marketed by Lilly do not make use of the invention disclosed in the patent. The patent was included on the patent register when Lilly filed its patent lists. The Minister removed the patent from the patent register, and Lilly sought judicial review of the Minister's decision. The applications judge dismissed the judicial review application, and Lilly appealed.
Held (Isaac J.A. dissenting): Appeal allowed. The decision of the Minister to remove the patent from the register was quashed, and the Minister was directed to reinstate the patent. The appropriate standard of review of the Minister's decision is correctness. The applications judge incorrectly concluded that ceftazidime was not a medicine because it is toxic by itself. Because Lilly was issued a NOC in respect of a drug that contains a medicine, ceftazidime, Lilly is permitted to submit a patent list in respect of the drug. Based on an ordinary reading of the NOC Regulations, the patent should be eligible for inclusion. The Minister's argument – based on the 1998 Regulatory Impact Analysis Statement – that the NOC Regulations require a relationship, referred to as "relevance", between the drug named in the NOC and the patent on the patent register, was not persuasive. The interpretation of the Regulations propounded by Lilly is more consistent with the words of the NOC Regulations, and has at least the potential of preventing infringement of the patent.
Isaac J.A. would have dismissed the appeal for the following reasons. First, the proper standard of review was not applied. This was not a review of the Minister's decision, but a review of a discretionary decision of a judge. There was no reason to interfere with the decision of the applications judge, who canvassed the evidence and applied the law correctly. Second, the judge was correct to say that ceftazidime, by itself, is not a medicine within the meaning of the NOC Regulations, because by itself it has no therapeutic value. The majority decision also downplayed the usefulness of the Regulatory Impact Analysis Statement, and rejected the Minister's argument that the NOC Regulations require a relationship of "relevance" between the drug named in the NOC and the patent included on the patent register. This ignores the dual purpose of the 1998 regulatory scheme, which seeks to balance the right of patentees with the intent of facilitating the entry of generic products into the market. The majority decision also has the effect of extending Lilly's rights under the patent.
(b) Trade Marks
1. Fouad Kelendji d/b/a Diplomate Watch of Canada v. Diplomat Fullhalter Gasellschaft Kurz & Rauchle, December 2, 2002 FCA (Décary J.A.) Section 57 Expungement
Appeal from the dismissal of a motion to strike the respondent's trade mark registration for DIPLOMAT. The appellant relied upon s. 17(2) and 18(1)(a). The Motions Judge dismissed the motion on the ground that it was made after the five-year deadline specified in s. 17(2) and did not consider the s. 18 ground.
Held: Case referred back to the Trial Division for a decision to be rendered on the s. 18 ground. The appellant will also have the opportunity to seek leave from the Trial Division to amend its motion to add a s.18(1)(b) ground, which it claims was apparent from its pleadings and argument even though it was not formally alleged.
2. Jonathan, Boutique Pour Hommes v. Jay-Gur International, January 31, 2003 FCTD (Hugessen J.) Summary Judgment /Trade Mark Infringement /Passing Off /Substantial Deviatio /Section 19 Defence
Motion by defendant for summary judgment. Both parties have registrations for trade marks that include the word JONATHAN. The defendant's registrations show its marks in cursive script. The plaintiff's trade mark infringement and passing off action complains of the defendant's use of its marks in block letters. The defendant seeks summary judgment relying on Molson Canada v. Oland Breweries Limited (2002), 59 O.R. (3d) 607 (C.A.) and the concept that the use of a registered mark is an absolute defence to an action in passing off.
Held: Motion dismissed. The question is whether the defendant is using its registered trade mark, i.e. whether the mark used "substantially deviates" from the registered mark. The Court rejected the defendant's argument that questions as to the state of the register or as to possible confusion are irrelevant to a s. 19 defence. It can only be decided after trial whether the mark used by the defendant is use of the essential elements of one of its registered marks.
3. Astrazeneca v. Novopharm and Reg. TMs, February 4, 2003 FCA (Stone, Rothstein and Malone JJ.A.) Opposition Appeal /Distinctiveness/Colour and Shape/Secondary Meaning
Appeal from the Trial Division's dismissal of an appeal from an opposition decision that refused an application to register a Yellow Tablet Design for pharmaceutical preparations, namely felodipine. The opposition had succeeded on the basis that the applied for mark was not distinctive in view of the common adoption of yellow tablets.
Held: Appeal dismissed. In order for the opposition to succeed, the mark had to neither be "adapted to distinguish" nor "actually distinguish" the appellant's wares. The fact that the appearance of the appellant's tablets is arbitrary does not mean that the colour and shape had the effect of distinguishing the appellant’s wares from those of others. Nor did the evidence establish that the colour and shape of the appellant’s tablets had the effect of actually distinguishing the appellant’s wares from those of others. The appellant had to show that through use over time the colour and shape of its tablets actually distinguishes them from tablets of other manufacturers. The Registrar and the Trial Division did not err by expanding the relevant market to all round and yellow tablets for the treatment of hypertension rather than restricting it to “felodipine” wares. Although the definition of “distinctive” in s. 2 does not refer to secondary meaning, the use of the term “actually distinguishes” connotes the same general concept. The evidence did not satisfy either the Registrar or the Trial Division that the appearance alone has acquired distinctiveness by identifying the wares with the appellant without assistance from information found on the outer packaging, the word mark associated with the product, and the markings on the tablets themselves; there is no basis in law for interfering with that conclusion.
4. Labatt Brewing v. Molson Canada, February 27, 2003 FCTD (Mackay J.) Opposition Appeal
Appeal from an opposition decision that refused an application to register the trade mark OLAND EXPORT because the mark was held to not be distinctive.
Held: Appeal allowed. The additional evidence filed before the Court supported a conclusion that the applicant's mark was distinctive as of the relevant date.
5. Boston Pizza International v. Boston Chicken and Global Restaurant Operations of Ireland, March 7, 2003 FCA (Pelletier, Rothstein and Malone JJ.A.) Appeal /Expungement/Section 18/Distinctiveness
Appeal from the Trial Division's dismissal of an application to expunge registrations for BOSTON CHICKEN and BOSTON CHICKEN Design. The appellant argued that, because the Trial Judge concluded that the mark BOSTON CHICKEN lacked inherent distinctiveness and because there was insufficient use of BOSTON CHICKEN for the mark to have acquired distinctiveness through use, the Trial Judge was bound to expunge the registrations. However, the respondent's position was that the mark BOSTON CHICKEN is distinctive because it is "adapted so to distinguish" the wares and services of one trader from the wares and services of others.
Held: Appeal dismissed with respect to BOSTON CHICKEN Design but allowed with respect to BOSTON CHICKEN. The registration for BOSTON CHICKEN should be expunged because that mark is not inherently distinctive and has not been so used in Canada as to have become distinctive. The Trial Judge's finding that the BOSTON CHICKEN mark lacked inherent distinctiveness amounts to a finding that the mark is not adapted to distinguish the respondent's services from those of others. The jurisprudence states that a trade mark is adapted to distinguish when it is inherently distinctive. Acquired distinctiveness cannot arise from use of the mark outside Canada. (The Court of Appeal was not swayed by concerns that foreign registered trade marks may be vulnerable to expungement if distinctiveness can only be acquired through use in Canada.)
6. Toys "R" Us (Canada) and Geoffrey Toys (Canada) v. Manjel, March 7, 2003 FCTD (Tremblay-Lamer J.) Infringement/Passing Off/Confusion/Survey Evidence
Action for trade mark infringement and passing off. The plaintiffs own the registered trade mark TOYS "R" US & Design and the unregistered mark TOYS "R" US, which are used in association with a toy store as well as with some items sold therein, including some food items but not nuts. The defendant is using NUTS 'R US for the sale of nuts.
Held: Action dismissed. As of the relevant date, the plaintiffs' trade marks were not distinctive with respect to candy, confectionery and snack foods. The food items sold by the plaintiffs represented only 1% of their sales; a mark may not be distinctive of particular goods sold by a merchant where such goods constitute a small percentage of the total goods sold by the merchant, even if the mark is very well known by reason of the large volume of the merchant's total sales. There is no evidence that there is a risk of confusion between the parties' marks. Instead, there is evidence of a lack of confusion despite a long period of co-existence. The plaintiffs introduced survey evidence directed to the issue of confusion but that evidence was not given any weight because the survey was not conducted in accordance with industry standards, lacked a control condition, contained too small a sample to indicate what Canadians would perceive, and did not screen for an appropriate universe. The Court held that the plaintiffs' trade mark possesses a strong degree of inherent distinctiveness due to the substitution of the word "are" with the letter "R". "This is not proper grammar, and it is a creative use of the alphabet to substitute words in the English language." When considering the nature of the wares, the Court referred to the sale of food items representing only 1% of the plaintiffs' total sales and then stated that "this amount is too small to establish that the wares of the plaintiffs and the defendant are similar." Concerning the nature of the trade, the Court held that the evidence demonstrated that the defendant's NUTS 'R' US product has never been sold, nor will likely ever be sold, in the plaintiffs' TOYS "R" US stores and noted that the plaintiffs' food items are sold exclusively in the plaintiffs' stores. The Court concluded that the parties' marks are not similar because the first words are sufficient to distinguish them and the design of the marks are different in several aspects (the R surrounded by quotation marks is displayed backwards only in the plaintiffs' mark; and the plaintiffs' mark is written in a balloon font, with various colours, whereas the defendant's mark is written in a black script font).
7. Toys "R" Us (Canada) and Geoffrey Toys (Canada) v. Manjel and Reg. TMs, March 7, 2003 FCTD (Tremblay-Lamer J.) Opposition Appeal/Confusion
Appeal from decision rejecting an opposition to the registration of the trade mark NUTS 'R' US used in association with nuts, chocolates, candy and snack foods and the operation of a retail outlet for sale of same. The Registrar held that there was not a likelihood of confusion with the trade mark TOYS "R" US & Design used in association with the operation of retail outlets selling primarily toys and children's wearing apparel. The Registrar's decision was based on the inherent weakness of the marks, the fact that the parties' wares and services bore little similarity, the common adoption of "R US" by other parties, and the opponents' agent's admission that the opponents would never sell the applicant's wares in their stores.
Held: Appeal dismissed. Although the Court agreed with the appellants' assertion that its mark is unique in that it substitutes the word "are" with the letter "R", the Court held that it was open to the Registrar to find that the appellants' mark was inherently weak given that it is the phonetic equivalent of the descriptive phrase "toys are us". The new evidence filed on appeal would not have materially affected the outcome of the Registrar's decision. Although there was evidence that 1% of the appellants' sales were of snack foods, the Court was of the view that the Registrar would have concluded that the appellants' mark was not known in association with snack foods [see McDonald's v. Coffee Hut Stores, [1994] F.C.J. No. 638(Q.L.)]. The Court also concluded that this new evidence would not have changed the Registrar's conclusion about the lack of similarity between the parties' wares, because the amount of food items sold by the appellants was too small. The Court also confirmed that it was open to the Registrar to give weight to the opponents' agent's statement that the opponents would never sell the applicant's wares in their stores.
8. American Sporting Goods v. Sears Canada, March 18, 2003 FCTD (Gibson J.) Opposition Appeal/Confusion
Appeal from decision refusing an application to register the trade mark NEVADOS for footwear. The Registrar held that the applicant had not satisfied its burden of showing that there was not a reasonable likelihood of confusion with the trade mark NEVADA used by the respondent/opponent in association with a range of fashion products, including footwear. Both parties filed new evidence on appeal.
Held: Appeal dismissed. The new evidence would have affected the Registrar's findings of fact or the exercise of his discretion, but in favour of the respondent. The appellant's new evidence confirms the weakness of its use whereas that of the respondent strengthens the weight to be given to its use.
9. Boston Pizza International et al. v. Boston Market et al., April 1, 2003 FCTD (Blanchard J.) Interlocutory Injunction /Irreparable Harm/Quia Timet/Confusion/Delay
Application in a trade mark infringement action for an interlocutory injunction to restrain the respondents from using the trade name BOSTON MARKET in association with a restaurant. The respondents are operating two BOSTON MARKET "fast casual" restaurants and will soon open a third. The applicants previously used, registered and franchised BOSTON PIZZA as a trade mark in association with a "casual dining" restaurant.
Held: Application dismissed. The applicants have raised a serious issue but have not shown irreparable harm. The applicants suggested that the application is brought quia timet with respect to the respondent's third restaurant but the Court disagreed, holding that the normal interlocutory injunction principles apply given that the respondents are already in the marketplace. Although the applicants tendered some evidence of confusion, they provided no direct evidence that they have suffered any loss as a consequence of the confusion. The evidence concerning loss is speculative and therefore insufficient to establish irreparable harm. Obiter: If the confusion were to cause harm, it would be possible for the applicants to make reasonable estimates of the value of the loss. Also, the balance of convenience would favour the respondents given the certain and tangible losses that they would face if they were obliged to change their restaurants' name. In addition, the applicants delay in bringing this application is a factor - the applicants knew about the respondents' intentions for nine months before putting them on notice. The applicants' presumption that the respondents anticipated litigation because they did not own a registration for BOSTON MARKET is not a basis for the justification of the applicants' delay.
(c) Copyright
1. Société Québécoise de Gestion Collective des Droits de Reproduction v. 9030-7620 Québec, September 16, 2002 FCTD (Beaudry J.) Interlocutory Injunction
Motion by plaintiff for an interlocutory injunction to prohibit the defendant from making any unlawful reproductions of works of which the copyright holders are represented by the plaintiff and to authorize the inspection of the defendant's workplaces and seizure during the first two weeks of each semester at the University of Québec at Montréal of any such unlawful reproductions. The plaintiff has the right to reproduce literary works in Québec universities. The defendant is a private photocopying centre that has not been approved by the university. The parties have been unable to reach a settlement.
Held: Interlocutory injunction granted. Without doubting the good faith of the defendant, the Court felt that an interlocutory injunction was appropriate because the plaintiff had met the three tests of urgency, irreparable harm and balance of convenience.
2. Society of Composers, Authors and Music Publishers of Canada v. Barrymore's et al., January 31, 2003 FCTD (O'Keefe J.) Summary Judgment/Copyright Infringement /Genuine Issue for Trial/Limitation Period
Motion by plaintiff for summary judgment. The plaintiff seeks damages for infringement of copyright in musical works performed at concerts. The defendants submit that royalties were paid for many of the performances and that there are issues of responsibility and credibility among the defendants that require determination at a trial. The defendants also submit that there is a genuine issue for trial as to whether or not the limitation period in s.41(1) of the Copyright Act limits the plaintiff's claims.
Held: Application for summary judgment dismissed; order granted to the effect that the corporate defendant is, subject to a possible limitation defence, responsible for the payment of the royalty fees for those performances for which it has admitted responsibility. The degree of control exercised over the performances by one of the individual defendants is a genuine issue for trial as it cannot be determined from the evidence before the Court. In addition, the exact relationship among the defendants must be determined at a trial in order to decide who, if anyone, is liable to the plaintiff.
(d) Practice
1. Musadiq Pardhan et al. v. Coca-Cola, January 14, 2003 FCA (Malone, Stone, Sharlow JJ.A.) Appeal/Anton Piller Order /Charter of Rights
Appeal from three orders concerning an Anton Piller Order issued in support of a contempt of court show cause order in a trade mark infringement action.
Held: Appeal dismissed. Failure to make full disclosure in an ex parte application does not automatically lead to the discharge of the Anton Piller order, because the Judge has discretion to conclude that the order is appropriate based on the evidence before him. The relative strength of the trade mark action is irrelevant with respect to the propriety of issuing the Anton Piller order, since the Anton Piller order was not sought in support of the infringement action but in support of the show cause order. The Court declined to address whether a person who is charged with contempt of court for disobeying a court order in a civil matter is entitled to the protection of the Charter of Rights, because the appellants did not raise their Charter argument at trial.
2. Pfizer v. Apotex and Canada (Minister of Health), January 17, 2003 FCTD (Snider J.) Motion/Production of Documents /Prohibition Application/Patented Medicines (Notice of Compliance) Regulations, s. 6(7)/Federal Court Rule 3
Motion by Apotex to set aside the order of the Prothonotary, which dismissed a motion by Apotex for production of certain documents and materials by Pfizer. Apotex provided a NOA to Pfizer in respect of azithromycin tablets for oral administration, and Pfizer commenced an application to prohibit the issuance of a NOC. After Pfizer filed its evidence in the main application, Apotex expressed concern that the expert affidavits filed did not disclose the specific details of the experiments carried out, and brought a motion for production. Apotex relied on r. 3 of the Federal Court Rules as justification for the production sought. Apotex also argued that s. 6(7) of the NOC Regulations provided a basis for production. The Prothonotary dismissed the motion, and Apotex sought to set the decision aside.
Held: Motion dismissed. The order of the Prothonotary is not clearly wrong and ought to stand. A proceeding under s. 6 of the NOC Regulations is a judicial review proceeding, not an action for patent infringement where oral and documentary discovery would be available. Apotex submitted that in the absence of a specific rule allowing for disclosure, r. 3 should apply, and that the Court should allow disclosure as part of its inherent jurisdiction to ensure fairness. Even if r. 3, which is not a general procedural catch-all, is applicable, its application would be discretionary, and the Prothonotary exercised her discretion correctly. Apotex may later apply to introduce further evidence, and therefore its rights to a fair process continue to be protected. The introduction of s. 6(7) has not transformed the nature of the proceeding. The exceptional instances in which production is required are clearly set out in that subsection and ought not to be expanded without clear legislative direction.
3. Universal Foods v. Hermes Food Importers et al., January 29, 2003 FCA (Sexton J.A.) Stay/Security for Costs and Damages/Irreparable Harm/Rule 416(1)(g)
Motion for an order granting a stay of an order that required the plaintiff to post security in the amount of $100,000 for costs and damages in an action for trade mark infringement. The plaintiff had obtained an ex parte Anton Piller order but consented to it being set aside except as to the issue of damages and costs. When the judge set aside the Anton Piller order, he ordered the plaintiff to post $100,000 security for costs and damages of the defendants.
Held: Stay granted. There is considerable doubt if the order for security can be justified under r. 416(1)(g) in that it orders security for damages in addition to costs, whereas that rule only refers to security for costs. The plaintiff's trade mark infringement action is not frivolous or vexatious and there is no reason to believe that the plaintiff would have insufficient assets in Canada to pay the defendant's costs. The undertaking to abide by any order concerning damages given by the plaintiff when the Anton Piller order was obtained arguably referred to an order which the Court might make after there has been a finding, not to orders made in advance of a determination. If the stay is not granted, the plaintiff will suffer irreparable harm because it will not be able to both post security and continue to finance its business - if it posts security, the appeal will become moot. (Dableh v. Ontario Hydro [1994] F.C.J. No. 1325 [F.C.T.D.] distinguished)
4. Apotex v. AB Hassle et al., February 18, 2003 FCA (Strayer J.A.) Motion for Admission of New Evidence on Appeal/Appeal From Prohibition Order/Patented Medicines (Notice of Compliance) Regulations
Motion by the appellant Apotex for the admission of new evidence on appeal. Apotex served AB Hassle with a NOA in respect of omeprazole tablets that it proposed to market, pursuant to the NOC Regulations. AB Hassle's application seeking prohibition of the issue of a NOC was granted by Kelen J., and Apotex appealed. A lawyer in a firm not representing Apotex subsequently discovered the existence of patent number 2,186,037 (the "'037 patent"), which had been granted to one of the respondents. This patent also involved a formulation for an omeprazole tablet, and was not revealed by AB Hassle in the prohibition proceedings. Apotex asserted that the '037 patent was not known to it, nor to its counsel, and sought to have the patent put in as evidence on appeal.
Held: Motion dismissed. The test for the admission of new evidence on appeal was reiterated by the Supreme Court in Public School Boards' Association v. Alberta, [2001] 1 S.C.R. 44. First, the evidence on the motion was not sufficiently clear as to the due diligence of Apotex or its counsel. It is surprising that Apotex would not have searched diligently for any patent that might throw light on the construction of the AB Hassle patent. Second, the '037 patent, merely as explained by a lawyer, could not be reasonably expected to have affected the result, in the absence of any expert analysis. Further, it is important to note the grounds on which the applications judge granted prohibition in the present case – on the basis that the appellant's letter did not constitute a NOA. It seems clear that the proposed new evidence could not make up for the deficiencies of the original NOA.
5. Merck Frosst Canada et al. v. Canada (Minister of Health) and Apotex, March 7, 2003 FCTD (O'Keefe J.) Motion/Reply Evidence/Production of Portions of ANDS /Prohibition Application/Patented Medicines (Notice of Compliance) Regulations, s. 6(7)
Motion by Merck for an order permitting the applicants to file reply affidavit evidence, and for an order requiring Apotex to produce copies of potions of its ANDS for drug "x" controlled release tablets. Merck sought leave of the Court to file reply evidence on the basis that the Apotex witnesses raised issues for the first time in their affidavits that were not identified in the NOA, and to correct incorrect statements put in evidence by the witnesses.
Held: Motion dismissed. An applicant may only file additional affidavits with leave of the Court, pursuant to r. 312 of the Federal Court Rules. Nowhere in the affidavits filed on the motion was it established that the tendering of reply evidence would not delay the proceeding or that the evidence would assist the Court in the determination of issues. This was sufficient to dismiss the motion to file reply evidence. As well, it was clear from reviewing the affidavits in chief that Merck either could have anticipated the Apotex evidence, or actually raised the issue for the first time themselves. Accordingly, the proposed reply evidence was not permitted. The correcting of incorrect statements made by an opposing expert witness is not a proper subject for reply evidence. Disagreement among experts can be addressed by cross-examination. Finally, Merck did not establish on a balance of probabilities that disclosure of the ANDS pursuant to s. 6(7) of the NOC Regulations is required. Merck's expert did not say that disclosure of the ANDS is required or important on the issue of non-infringement, nor did the other evidence filed on the motion.
II. OTHER COURT DECISIONS
1. Novopharm and Apotex v. The Wellcome Foundation, Glaxo Wellcome et al., December 5, 2002 SCC (McLachlin C.J. and L'Heureux-Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel JJ.) Patents/Validity/Methods of Medical Treatment/Doctrine of Sound Prediction/Inventorship
Appeal from Federal Court of Appeal's decision that found some of the use claims in Glaxo's patent to be valid and infringed and others to be overly broad and invalid. Glaxo's suit alleged infringement of its patent for a new use of AZT for prevention and treatment of the Human Immunodeficiency Virus (HIV) that causes Acquired Immune Deficiency Syndrome (AIDS). The defendants argued that the patent was invalid on the basis of i) incorrect inventorship, ii) lack of novelty and inventiveness and iii) improper pharmaceutical "use" claims.
Held: Appeal dismissed in a unanimous ruling. The key points of the decision include: i) Methods of medical treatment are not permitted in Canada; however, use claims are permissible. Use claims do not fence in a method of medical treatment. ii) Use claims will be invalid if there is a lack of utility in part of the claim or lack of a sound prediction. The doctrine of "sound prediction" allows a patentee to claim a new use of a known compound even before its utility has been fully verified by tests. Glaxo had sufficient information about AZT and its activity against HIV in human cells to make a sound prediction that AZT would be useful in the treatment and prophylaxis of HIV/AIDS in humans. To the extent that certain claims went beyond the limits of a sound prediction, they were invalid. iii) Highly skilled scientists who merely verify an inventive concept (as opposed to participating in creating the inventive concept) are not inventors. In any event, omitting inventors would only void a patent if it was a "material" misstatement that was "willfully made for the purpose of misleading", which was not present in this case.
2. Zhu v. Merrill Lynch HSBC, December 18, 2002 BCPC (Romilly P.C.J.) Internet/Enforceability of Disclaimer and Waiver Clauses
The claimant used the defendant's NetTrader service to sell shares online but immediately cancelled the sell order. He claimed to have received notification that 200 of his shares had been sold, but that the cancellation of the remaining shares was confirmed. Five minutes later, Mr. Zhu initiated a second sell order of the remaining shares at a more favourable price. Unbeknownst to him, the cancellation of the original sell order had not been completed, with the result that his account was placed in a "short" position. The defendant insisted that Mr. Zhu make up his "short" position by buying back one set of the twice-sold shares. Mr. Zhu sued the defendant to recover the cost of these shares.
Held: The Court ordered the return of the money paid by Mr. Zhu to cover his short position, plus filing and services fees, and interest. The legal disclaimer displayed on the NetTrader website was insufficient to protect the defendant. It read:
Although we endeavour to maintain the accuracy of the above information, we cannot be held responsible for errors or omissions. All market data is delayed by at least 20 minutes unless otherwise noted. Click here for more information.
Neither HIDC nor any information provider may be held liable to the customer or anyone else for:
a. Any inaccuracy, error, delay, interruption or omission of any information.
b. Any loss or injury caused in whole or in part by either negligence or contingencies beyond their control in procuring, interpreting, compiling, writing, editing, reporting or delivering any information or services through the service.
The Court held that the defendant's disclaimer "virtually eliminates liability for inaccuracy in the performance of the services contracted for by the customer" and can be construed as "exonerating the broker from acts of …gross negligence." On this basis, the Court found the defendant's disclaimer to be unenforceable.
The Court also addressed whether Mr. Zhu was entitled to treat the cancellation of his first sell order as being confirmed. Upon requesting the cancellation, Mr. Zhu received two notices, which he viewed as a confirmation of his cancellation. The defendant argued that although the screen stated "cancelled" this did not mean that the request had been "successfully" or "completely" cancelled. Rather, the defendant contended that the fact that the request is subject to "prior fills" constitutes a warning that the cancellation had not been confirmed. The Court rejected the defendant's argument and held that "the defendant's services demand a higher duty of care and performance than ordinarily expected in the provision of services, because of the high risk of loss of a consumer's investment monies." The cancellation information was misleading and "faulty" - the defendant's system could easily have issued a "cancellation pending" or "please wait until advised that cancellation is complete before placing another order" prompt to prevent such confusion.
III. OPPOSITION BOARD DECISIONS
1. R & A Bailey v. Gestion A.D.L., January 20, 2003 (Partington) Confusion /Famous Marks/Lack of Evidence of Confusion /Admissibility of Foreign Affidavits/Canada Evidence Act
Use-based application for BAILEY'S & Design for tobacco products. All reading matter disclaimed. Opposition based, inter alia, on s.12(1)(d) due to confusion with the mark BAILEYS registered for wines, spirits and liqueurs.
Held: Opposition rejected because the applicant has satisfied the onus on it to show that there would be no reasonable likelihood of confusion. The opponent's trade mark BAILEYS has become fairly well known in Canada but the evidence does not support a conclusion that it is famous. There is a very minor association between the parties' wares; although there was evidence that the liquor industry advertises its alcoholic beverages in publications devoted to tobacco products, there was no evidence as to the extent to which such publications are distributed in Canada and no evidence that the opponent has advertised, or intends to advertise, its BAILEYS liqueur in such publications. The absence of evidence of actual confusion is relevant given that the applicant's sales have been substantial. The Hearing Officer also noted that there was no evidence that pointed to an attempt by the applicant to trade off of the opponent's goodwill. Prior cases involving marks for tobacco and liquor were distinguished on various grounds, e.g. application based on proposed use versus use, opponent's mark being famous, evidence of overlapping channels of trade.
At the oral hearing, the applicant objected to the admissibility of one of the opponent's affidavits on the basis that it was sworn in Ireland before a Solicitor/Commissioner for Oaths, rather than before a consular official. Although the Hearing Officer expressed the view that it is inappropriate for such a technical objection to be raised at the oral hearing, he granted the opponent one week in which to file written submissions on point and subsequently concluded that the affidavit was admissible under s. 52(e) of the Canada Evidence Act on the assumption that a "Solicitor/Commissioner of Oaths" falls within the definition of "judicial officer".
IV. SECTION 45 DECISIONS
1. Permanent Developments v. Gants Laurentide, January 30, 2003 (Savard) Sufficiency of Evidence/Admissibility of Affidavit
HERCULES & Design registered for various clothing items.
Held: Registration maintained. The statements in the affidavit are statements of fact which show use of the mark in association with each of the wares during the relevant period. It is not necessary to provide invoices or samples with respect to each of the wares. Although the exhibits refer to an affidavit sworn on a date different from that of the attached affidavit, the Registrar concluded that the affidavit was admissible based on the registrant's explanation that it had the affidavit notarized twice (because the first time the exhibits were photocopies, not originals) and the affidavits apparently got mixed up.
2. Sim & McBurney v. Anchor Brewing, January 30, 2003 (Savard) Admissibility /Sufficiency of Evidence/Normal Course of Trade STEAM registered for beer.
Held: Registration maintained. The Registrar rejected the requesting party's argument that certain parts of the evidence were hearsay; although it would have been preferable for the affiant to clearly indicate that he had knowledge of the stated facts, it is reasonable to assume that he did given that he is the owner of the registrant company. Sufficient facts have been provided concerning the registrant's normal course of trade; there is no particular evidence that must be provided in order to find use in the "normal course of trade". It is not necessary to evidence a transaction between the registrant and its distributor; evidence of the distributor's sale of the wares is sufficient as it is clear from the evidence as a whole that the first link in the chain of transactions is the registrant.
3. Cassels, Brock & Blackwell v. Relton, January 30, 2003 (Savard) Sufficiency of Evidence/Use in Association with Wares
TERMITE and CONCRETE TERMITE registered for "masonry drill bits and starter bits" and "drill bits for drilling hard abrasive material", respectively.
Held: TERMITE registration expunged; CONCRETE TERMITE registration maintained. Although the trade mark TERMITE appeared on invoices, it appeared that these invoices did not accompany the wares and the wares themselves bore the trade mark CONCRETE TERMITE. The Registrar rejected the argument that the evidence did not show use of CONCRETE TERMITE in association with the exact registered wares. The affiant stated that the registrant was using that mark in association with drill bits for drilling masonry and other hard abrasive materials. The affiant went on to provide invoices which he said showed sales of drill bits. To conclude that the drill bits sold were not for drilling hard abrasive materials would be to assume that the affiant was trying to mislead the Registrar, and there is no basis for such a conclusion.
4. Keeper Mason Ball v. Reliv' International, January 30, 2003 (Savard) Section 50/Amendment of Wares
HERBAL HARMONY registered for herbal tonic.
Held: Registration maintained. The registrant manufactures and labels the wares for a company that uses the mark with its permission and sells the wares to various distributors. As the registrant is the manufacturer of the product, it is clear that it has control of the character and quality of the wares bearing the mark, as required by s. 50. Although the requesting party may be correct in its submission that "herbal tonic" is too broad a statement of wares, the Registrar has no authority to amend the statement of wares to a "fibre-based fruit flavoured drink mix" as requested by the requesting party.
