Recent Decisions August 2004
I. FEDERAL COURT DECISIONS
(a) Patents
1. AstraZeneca Canada v. Apotex et al., April 29, 2004 FCTD (Gauthier J.) Prohibition Order/Sufficiency of NOA/Abuse of Process /Unjustified Non-Infringement Allegation/Affiant Credibility/Patented Medicines (Notice of Compliance) Regulations
AstraZeneca sought an order prohibiting the Minister from issuing an NOC to Apotex for its Apo-Omeprazole tablets until the expiration of its patent. AstraZeneca claims that Apotex' NOA is deficient on the following bases: the NOA fails to identify the active ingredient contained in its tablets (omeprazole magnesium) as required by s. 5(3)(a) and 5(3)(c)(ii) of the NOC Regulations, the NOA constitutes an abuse of process because it is not separate and distinct from prior NOAs sent for the same product, and the allegation of non-infringement is not justified because, contrary to what is stated in the NOA, Apotex' product would contain a potassium, sodium or aluminum salt, which are stabilizing agents listed in AstraZeneca's patent. AstraZeneca further challenged the credibility of one of Apotex' affiants.
Held: Application dismissed. AstraZeneca has not established that the allegation of non-infringement is not justified. Regarding deficiency of Apotex' NOA, s. 5(3)(c)(ii) does not require the second person to identify either the "active ingredient" or the "drug" in its NOA but only the "dosage form, strength and route of administration of the drug". In addition, the name of the active ingredient in the tablets is not relevant to the specific allegation put forth by Apotex, namely that the tablets would not contain any of the "specialized stabilizing agents", and is not required by s. 5(3)(a). This statement is sufficient and complete whatever active ingredient is used in the tablets. Secondly, the NOA was not an abuse of process. The prior NOAs were withdrawn due to technical problems in meeting regulatory requirements and do not justify a finding of abuse of process. Thirdly, a proceeding under s. 6(1) of the NOC Regulations is not an action for infringement. The Court need only determine whether the facts assumed or proven, and the legal assertions made, justify the specific allegation of non-infringement. AstraZeneca has not rebutted the presumption of truth applicable to the factual statements in the NOA. Finally, the credibility of an affiant is not a separate issue. Testimony on a specific issue is not invalid because the individual made a mistake in respect of an entirely unrelated issue in another proceeding. However personal interest and lack of expertise regarding areas addressed in the affidavit can diminish the weight of evidence.
2. AstraZeneca Canada v. Canada (Minister of Health), May 20, 2004 FCTD (Heneghan J.) Administrative Supplemental New Drug Submission/Eligibility for Listing on the Patent Register/Changes in Manufacturer's Name and/or Patent Name Policy/Patented Medicines (Notice of Compliance) Regulations
Application for judicial review of the decision from the Minister of Health refusing to add a patent to the Patent Register for LOSEC (omeprazole) 40 mg delayed release capsule. The applicant submitted the required Patent Form IV, pursuant to s. 4 of the NOC Regulations referencing a previously filed submission. The applicant claims this submission was filed as a SNDS for a company name change as a result of a merger between Astra Pharma and Zeneca Pharma. The applicant relies on the recent decision of the FCA in Abbott Laboratories v. Canada (Minister of Health) [2004] FCJ No. 708, 2004 FCA 154 to argue that the Court should not look to the substance of the SNDS. The Minister indicated that the submission referenced in the Patent Form IV was for a change in the manufacturer's name pursuant to the Changes in Manufacturer's Name and/or Patent Name policy published in April 1998 and that such a submission is not sufficient to permit listing of a patent. Since the timing requirements pursuant to s. 4(4) of the NOC Regulations were met, the issue raised by the application is whether an administrative SNDS, submitted pursuant to the policy concerning the change of a manufacturer's name, triggers the opportunity to list a patent pursuant to s. 4.
Held: Application dismissed. The Minister has discretion to accept a patent for listing. The operation of the NOC Regulations is connected with the assessment of the safety and efficacy of pharmaceutical products, pursuant to the Food and Drug Regulations. It is reasonable to conclude that the underlying submission for a patent list be related to the purpose of the regulatory scheme. Abbott, supra, does not stand for the proposition that any SNDS is sufficient to trigger listing of a patent pursuant to s. 4 of the NOC Regulations. In Abbott, the SNDS addressed a different indication that had not been approved by the Minister. In the case at bar, the underlying submission is only an administrative change.
3. AstraZeneca et al. v. Apotex and Canada (Minister of Health), May 25, 2004 FCTD (von Finckenstein J.) Prohibition Order/Appeal of Decision to Introduce Affidavit /Unreasonable Delay/Patented Medicines (Notice of Compliance) Regulations
Appeal (T-766-03) by AstraZeneca from Prothonotary Lafrenière's Order (above, T-1878-02) to deny introduction of an affidavit because of unreasonable delay by AstraZeneca. The affidavit described the results of testing Apotex's omeprazole magnesium capsules. The results of such testing were described in previous proceedings as the "best evidence and probably conclusive evidence". Apotex opposed AstraZeneca's request for leave, and this appeal, but argued that it should be allowed to introduce reply evidence in the event the affidavit is accepted.
Held: Appeal allowed. Astra granted leave to file the affidavit. Apotex' motion to introduce further counter-evidence denied. Apotex will have an opportunity to cross-examine the affiant. Both parties have engaged in litigation "brinkmanship" and both are culpable in causing the delay. Although the Prothonotary was correct in finding that there are inexcusable delays, if the Order is allowed to stand "the best evidence" will not be available. A Prothonotary must take into account not only the position of the parties but also the interest of the court. It is not in the interest of the court to have matters proceed to a hearing when the best and probably conclusive evidence is available but cannot be furnished due to the strategic maneuvering of the parties. "While AstraZeneca did its part to contribute to the delay, Apotex cannot claim to be an innocent victim, rather it is suffering as a result of a backfire of its own delaying tactics."
4. Fournier Pharma et al. v. Canada (Minister of Health) and Cipher Pharmaceuticals, June 8, 2004 FCTD (von Finckenstein J.) Request for Samples from Generic Manufacturer/Relevancy of Samples to the Proceedings/ Patented Medicines (Notice of Compliance) Regulations
Appeal from a Prothonotary's decision denying a request by Fournier for an order that Cipher deliver samples of their drug capsules to Fournier. Fournier had sought a Prohibition Order blocking the Minister of Health from issuing an NOC to Cipher for its fenofibrate capsules. In its NOA, Cipher alleged that the making, using or selling of its capsules did not infringe Fournier's patent. Cipher provided Fournier with a copy of its batch records indicating the formulation and manufacturing process for its capsules, and a copy of the proposed product monograph which formed part of Cipher's ANDS. Cipher and Fournier then filed expert affidavits in the proceedings. During cross-examination, counsel for Fournier determined that one of Cipher's expert affiants had obtained two of Cipher capsules in connection with proceedings in the United States and had conducted 'organoleptic' tests, defined as tests by means of every human sense. Fournier then requested that the affiant produce the samples in his possession. Cipher declined Fournier's request on the basis that: 1) the samples in question were obtained by the witness in respect of U.S. proceedings after he had given his affidavit in this case; 2) Cipher did not rely on the affiant's examination of the capsules for these proceedings; and 3) no tests other than visual inspection had been performed. Fournier then asked for an order requiring Cipher's affiant to produce the samples and permit Fournier to conduct testing. Fournier had not previously asked for samples in its NOA, nor had they brought a motion under s. 6(7) of the Regulations for production of the samples.
Held: Fournier's motion was denied and the decision of the Prothonotary upheld. No reference was made to the samples in either parties' pleadings, or in the affidavit, and the samples had not been examined by the affiant with respect to the Canadian proceedings. The samples were therefore not relevant or vital to the proceedings. The Court distinguished this case from A.B. Hassle v. Apotex [2004] F.C. 762, in which it was evident that the testing evidence was vital to the outcome of the case, the applicants had repeatedly sought the samples, the affidavit of Apotex referred to the testing of samples, and there was an inexcusable delay in producing the samples. None of these factors was present in this case, and the Prothonotary was therefore correct to dismiss the motion.
5. Apotex v. Bayer et al., June 23, 2004 FCA (Rothstein J.A.) Prohibition Proceedings /Issue of NOC/Moot Appeals/Section 8 Proceedings/Patented Medicines (Notice of Compliance) Regulations
Motion by Bayer to dismiss an appeal by Apotex on the grounds of mootness. The Minister of Health had been prohibited from issuing a Notice of Compliance to Apotex in respect of certain formulations of ciprofloxacin until after the expiry of Bayer's relevant patent by order of the Federal Court. Apotex appealed this decision, however Bayer's patent expired during the appeal resulting in the Minister of Health issuing an NOC to Apotex. Bayer claimed that prohibition proceedings become moot once a patent expires or when the Minister of Health issues an NOC. Apotex countered that if the order prohibiting the Minister from issuing an NOC was reversed on appeal, Bayer would be liable for damages under s.8 of the NOC Regulations for losses suffered as a result of Bayer's prohibition application. Apotex would be denied the opportunity to obtain compensation through s.8 unless the Court decides its appeal on the merits as no other remedy would be available.
Held: The Court was satisfied that the appeal is moot but held that it should exercise its discretion to hear and decide this moot appeal based on the three guidelines set out in Borowski v. Canada [1989] 1. S.C.R. 342 for exercising discretion in the hearing of moot appeals. The Court acknowledged the existence of an 'adversarial context' stemming from the possible collateral consequences of the appeal. Furthermore, the decision would have a 'practical effect on the rights of the parties', in particular Apotex's access to a remedy under s.8. Finally, there was no suggestion that the decision would be an 'intrusion into the legislative branch of government'. The case therefore met the Borowski criteria. The Court stated that the fact that an appeal is decided after a patent expires should not have a bearing on a generic manufacturer's entitlement to damages, if the manufacturer had been wrongly excluded from the market during the lifetime of a patent. The obiter dicta of Isaac J.A. in Pfizer Canada Inc. v. Nu-Pharm Inc.; Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4th) 245, that hearing moot appeals 'would be at variance with the stated intent of the regulation making authority', is inapplicable to the current version of s.8.
6. Apotex v. AB Hassle, Astrazeneca AB and Astrazeneca Canada, July 7, 2004 FCA (Létourneau, Sharlow, Malone JJ.A.) Subsection 6(7)/Samples not Included in Generic Manufacturer's NDS/Compellability of Samples to First Person/Admissibility of Affidavit Containing Test Results/Patented Medicines (Notice of Compliance) Regulations
Appeal from the Federal Court order T-766-03 (above). The Federal Court, in reversing the Prothonotary's decision, granted Astra leave to file affidavit evidence regarding testing of Apotex's omeprazole tablets. The Federal Court denied Apotex leave to file counter-evidence.
Held: Ruling upheld, Astra granted leave to file the additional affidavit. Moreover, contrary to the decision of the Federal Court, the Court of Appeal authorized Apotex to seek leave to file responding evidence to Astra's affidavit. The Court noted that the Prothonotary misstated the law that Astra should have sought production of the samples prior to scheduling cross-examinations. Subsection 6(7) of the Regulations allows a party to compel the production of samples where such samples have been filed as part of an applicant's NDS. Since Apotex had not submitted samples of its product with its NDS, the samples only became compellable as part of the witness' testimony during cross-examination. The Court stated that where the disclosure process envisaged in s. 6(7) cannot be resorted to because the samples have not been provided to the Minister and where the second person proceeds to test and file affidavit evidence in the prohibition proceedings “expediency, fairness and the overall interest of justice give the first person the right to, immediately after such filing, seek by motion the production of these samples for a testing of its own.”
(b) Trade Marks
1. Cassels Brock & Blackwell v. Reg. TMs and Montorsi Francesco, May 21, 2004 FCTD (MacKay J.) Section 45 Appeal/Special Circumstances/Functus Officio
Appeal from a s. 45 decision that maintained the registration for DANIEL & Design for San Daniele ham. The Registrar concluded that the respondent had established special circumstances justifying non-use of the mark but ordered that a second s. 45 notice be issued because certain aspects of the respondent's evidence was vague.
Held: Appeal dismissed. The Court rejected the appellant's argument that the Registrar was functus officio once she had determined that the evidence was not fully satisfactory; the Court was not persuaded that the principle of functus officio applies in the case of the exercise of discretion in the administrative function performed by the Registrar. The respondent's wares can, by definition, only be prepared in Italy and the Registrar did not err in finding that there were special circumstances justifying the non-use of the mark, namely the Canadian government's requirements, a matter not entirely within the control of the respondent.
2. Bacardi v. Havana Club Holding, June 8, 2004 FCA (Richard C.J., Noël J.A., Nadon J.A.) Opposition Appeal/Jurisdiction of Registrar of Trade-marks/Correction of Register/Section 57 of the Trade-marks Act /Section 15(1) of the Trade-marks Act
In an opposition proceeding, the opponent argued that a registration associated with the applicant's application had been improperly recorded in the applicant's name. The Registrar indicated that he had no jurisdiction to correct such an error and because he could not question the validity of a subsisting registration for the purposes of an opposition proceeding, he rejected the opposition. The Registrar's decision was upheld on appeal to the Trial Division. The opponent now appeals to the Court of Appeal.
Held: Appeal dismissed. The Registrar does not have jurisdiction to rectify the Register in the context of opposition proceedings. The opponent ought to have sought rectification from the Federal Court pursuant to s. 57.
3. Everlast World's Boxing Headquarters v. Amethyst Investment Group, June 18, 2004 FCTD (Pinard J.) Opposition Appeal/Expungement/Material Date re Confusion
Appeal from an opposition that succeeded based on the likelihood of confusion with a registered mark. The owner of the registered mark was informed on March 19, 2003 that the registration would be expunged under s. 45 if no appeal was filed by May 19, 2003. The opposition decision issued June 4, 2003. The registration was expunged on June 19, 2003. The opponent did not participate in the appeal.
Held: Appeal allowed. The Court held that there could not be confusion with an expunged registered mark, but did not address the fact that the registration had not been expunged as of the material date.
4. Tommy Hilfiger v. International Clothiers, June 30, 2004 FCA (Nadon J.A., Décary J.A.. Létourneau J.A.) Appeal/Trade Mark Infringement/Intention to Use as a Trade Mark/Section 2 Definition of Trade Mark
Appeal from a decision that dismissed the appellants' claim for infringement of their registered Crest Design trade marks. The Trial Judge had held that the Crest Design on the respondent's wares was mere ornamentation, which was not intended to distinguish the respondent's wares from those of others. The Trial Judge did however go on to say that if the use was trade mark use then it would infringe the appellants' registrations.
Held: Appeal allowed. Although the respondent did not intend to use the Crest Design as a trade mark, the Crest Design did serve the purpose of indicating origin. The Trial Judge “erred in adopting an interpretation of the statute which required proof that the user had intended to use his mark for the purpose of distinguishing his wares from those of others.” The words “for the purpose of distinguishing” are not synonymous with the expression “with the intention”. While the intention of the user and the recognition by the public are both important factors in assessing whether the use qualifies as trade mark use, it is not necessary that both factors be present.
(c) Copyright
1. Interbox Promotion v. 9012-4314 Québec et al., October 27, 2003 FCTD (Martineau J.) Copyright Infringement /Copyright in Sports Events/Damages
Action for a permanent injunction and compensatory and exemplary damages. The plaintiff, the producer of a boxing event broadcast live on T.V., claims that the defendants have infringed its copyright by presenting the televised event to the clientele in their bars.
Held: An injunction was not granted because the plaintiff did not satisfy the Court that the defendants are likely to infringe the copyright that the plaintiff might have in other programs. Compensatory damages awarded based on the plaintiff's lost profits. Exemplary damages also awarded because the infringement was blatant, the plaintiff having informed would-be infringers in advance that they risked legal proceedings. The boxing event cannot be the subject matter of copyright but the television reproduction of the event is comparable to a “cinematographic work” and therefore is proper copyright subject matter. The Court found the evidence against 9012-4314 Québec to be unreliable and dismissed the action in so far as it related to that defendant.
(d) Practice
1. Benisti Import-Export v. Modes TXT Carbon, December 11, 2003 FCTD (Morneau P.) Discovery Objections/ Industrial Design
Motion by Modes TXT to decide objections from an examination for discovery. Original action filed by Benisti for infringement of an industrial design and a trade mark.
Held: Benisti does not have to disclose what part(s) of the industrial design perform a utilitarian function: Section 5.1 of the Industrial Design Act states the test is whether the components perform solely a utilitarian function. In order to establish grounds for challenging the validity of the industrial design, it was reasonable to allow Modes TXT to examine Benisti on the specific condition of the market. Benisti will have to provide the name of the person who manufactured the object of the industrial design at issue, however the identity of that individual will be treated as confidential and will only be provided to counsel for Modes TXT.
2. Iris, Le Groupe Visuel (1990) v. Trustus International Trading, May 15, 2003 FCTD (Morneau P.) Motion to Amend Statement of Claim under Rule 75(1) of Federal Court Rules
Motion under r. 75(1) to amend statement of claim to: 1) add 3 defendants in their personal capacity, 2) seek punitive damages personally from these defendants, as well as costs and out-of-court fees, and 3) obtain a declaration of unlawful use of the trade mark at issue by the defendant.
Held: In matters of amendments in general, an amendment ought to be allowed unless it is clear and obvious that the amendment has no chance of success (see Raymond Cardinal et al v. Her Majesty the Queen, unreported decision of the Federal Court Appeal Division dated January 31, 1994, docket A-294-77, Decary, Linden JJ.A.). Prothonotary refused motion to add 3 defendants in their personal capacity because the allegations in their amended statement of claim did not disclose sufficient essential facts to rightly engage the liability of the 3 individuals as defendants in their personal capacity. The motion seeking punitive damages was also refused because there was no sufficient allegation to the effect that the defendants deliberately and intentionally infringed the plaintiff's rights. The motion to obtain a declaration that the defendant was unlawfully using the trade mark was granted. However, plaintiffs were ordered to submit to the Court a schedule addressing the subsequent steps to be taken in the proceeding.
3. A. Pellerin et Fils v. Denis Darveau et al., June 7, 2004 FCTD (Morneau P.) Examination for Discovery/Questions Objected to as Irrelevant
In a patent infringement action, the plaintiff brought a motion to have objections made by defendant's counsel during an examination for discovery decided in its favour. The plaintiff asked that the witness be ordered to appear again and answer the objected to questions and any questions resulting from them. The questions were divided into four categories all of which were objected to as being irrelevant. The first was with respect to a patent application filed by the defendant for a system similar to that for which the plaintiff's patent was issued. The second category of questions was with respect to an element present in a first version of the defendant's system and absent in a second version. The essential nature of the element was still in dispute. The third category was with respect to the defendant's knowledge of the prior art. The last set of questions related to certain invoices that had been issued by the defendants to its customers but had certain parts masked.
Held: Divided success. A question should be answered on discovery if it is relevant to the dispute, that is if it may, directly or indirectly, assist or damage the case of either party (Sydney Steel Corp. v. The Ship Omisalij, [1992] 2 F.C. 193, at 197-98). With respect to the first category of questions, all but one of the questions are to be answered. The question that was rejected inquired as to the innovativeness of the defendant's system. This was rejected as a question of law to be determined by the Court. The other questions were allowed because evidence of the defendant filing the application would weaken his claim that the plaintiff's system was obvious. The second category of questions is relevant given that the non-essentiality of the element in dispute remains to be proven and in order to do so it may be necessary to go beyond merely examining the defendant's system. The third category of questions is irrelevant. The defendant's knowledge of the prior art is not relevant to the dispute. The fourth category is relevant since the measure of the plaintiff's damages is partly decided by the profits it would have realized if it had made the sales that were made by the defendant.
4. Brantford Chemicals v. Merck and Merck Frosst Canada, June 8, 2004 FCA (Malone J.A.) Sufficiency of Pleadings
Brantford brought a motion for an order striking Merck's statement of claim, and in the alternative for an order requiring the plaintiffs to provide particulars. The Motion was dismissed by the Prothonotary as well as the Federal Court who also noted that the defendants did not serve a demand for particulars or an affidavit explaining why particulars were necessary which would have assisted the Court.
Held: Statement of claim set out the patents and the allegations of infringement with a sufficient degree of detail. The decision of the Motions Judge that the statement of claim pleaded material facts which disclose a reasonable cause of action for patent infringement was not decided on a wrong basis or plainly wrong. The Motions Judge did not commit an error in finding that the claim for punitive and exemplary damages could be sustained. When the need for further particulars is not apparent on the face of the record, a formal demand or an affidavit may have been persuasive however in this case the Motions Judge did not err in upholding the Prothonotary's decision to deny particulars in the case.
5. Society of Composers, Authors and Music Publishers of Canada v. McIntosh et al., June 9, 2004 FCTD (O'Keefe J.) Insufficient Affidavit/Affidavit from Prior Motion /Cross-examination on Affidavit in Previous Motion Used as Evidence of Current Affidavit's Inadequacy
McIntosh brought an appeal from the Prothonotary's order that McIntosh deliver a further and better affidavit of documents. The plaintiff relied on a transcript of the defendant's cross-examination on an affidavit from an earlier motion as evidence of the inadequacy of the defendant's present affidavit. The transcript revealed the existence of notes made by the defendant, which were not listed in the affidavit.
Held: Though prior orders and motion records can be made part of an application record, prior affidavits may not (Merck Frosst Canada Inc. et al. v Canada (Minister of National Health and Welfare) (1994), 88 F.T.R. 31 (T.D.)). Given that the affidavit cannot be part of the record, the cross-examination on that affidavit cannot be made part of the record either. The plaintiff's argument that the Prothonotary, by virtue of her case management of this matter, had knowledge of and could properly make reference to the cross-examination transcript does not have merit. If this were allowed then the parties would not have notice of what issues are on the motion and what materials will be used by the Prothonotary and will therefore not be able to properly and fairly address the matter before the Court. There was no evidence before the Prothonotary of any inadequacy in the defendant's affidavit. Her exercise of discretion was based upon a misapprehension of facts and was therefore clearly wrong.
6. Canada Post v. United States Postal Service, June 25, 2004 FCTD (Blais J.) Amendment to Notice of Application
Motion to grant applicant leave to serve and file a further amended notice of application and to file additional affidavits in support of the new allegations raised therein.
Held: The applicant's proposed amendment admittedly would bring a new issue before the Court, that the defendant's official mark was contrary to public order. The Court allowed the amendment even though the applicant knew all the relevant facts when it filed the notice of application and there was no explanation why it took two and a half years to bring forth the amendment. The marks at issue were common terms of the postal industry. Since official marks are otherwise virtually unassailable as descriptiveness, non-distinctiveness and confusing similarity cannot stop registration, the Court found that the issue of the official mark being contrary to public order was of such importance that it granted the motion so that the ground could be considered. Additional affidavits were allowed due to the new ground.
7. Eli Lilly and Eli Lilly Canada v. Apotex and Novopharm, July 21, 2004 FCTD (Hugessen J.) Summary Judgment/Procedural Grounds
Motion for summary judgment by Eli Lilly.
Held: Motion dismissed. Eli Lilly clearly specified two grounds on which it was seeking summary judgment, and unfairly and unjustly sought to enlarge on those grounds, to plead matters of which there was no mention in the written notice of motion. The motion did not seek, as r. 213 requires, a judgment upon the whole or part of the claim, but only sought to strike out portions of the statement of defence. This, nonetheless, leaves a defence in place and could not result in a judgment on any part of the claim. The motion, if considered as being a motion to strike pursuant to r. 221, would still not survive the threshold test. The motion would be dismissed because the statements of defence are clearly not so devoid of hope as to be unfounded beyond all possibility of success. Finally, an earlier decision of a prothonotary was an exercise of her discretion. She made no pronouncement on the abuse of process issue, thus res judicata does not apply.
8. Fortier 2000 v. Marcel Matière; Marcel Matière and Béton Provincial v. Fortier 2000, August 27, 2003 FCTD (Morneau P.) Examination for Discovery/Questions Objected to as Irrelevant and Inappropriate
Motions brought by both parties to decide objections to questions raised in the examination for discovery of the parties' representatives. The questions were divided into a number of categories. In the third category, the plaintiff sought to determine whether a reading of the plaintiff's works by the defendant leads the latter to consider that said works deal with a tube. A category six question concerns analysis of a work by the defendant, a category eight question regards definitions, two category nine questions regard interpretation issues of the claims of a patent, and category ten questions relate to the innovative nature of an invention. A series of objections raised by the defendant were also considered.
Held: Divided success. With regards to the third category, a question related to property should be answered when it is factual and technical in nature and the defendant, particularly as inventor of said property, is able to answer it (Foseco Trading A.G. v. Canadian Ferro Hot Metal Specialities, Ltd. (1991), 36 C.P.R. (3d) 35). Where the questions raised are broad and far-reaching, however, the question need not be answered as it would be equivalent to asking for an interpretation of the claims of a patent. The other plaintiff's questions were not allowed. The category six question was rejected on the grounds that it was irrelevant, and the category eight question was deemed inappropriate. The category nine question required the defendant to interpret the claims of a patent and was therefore rejected as doing so would usurp the function of the courts. Similarly, the category ten questions were deemed to be questions for the Court to decide based on the testimony of expert witnesses as to common general knowledge and prior art. Only those questions of the defendant relating to factual exercises, with technical aspects, were deemed to be answerable.
II. OTHER COURT DECISIONS
1. Magasins Greenberg v. Import-Export René Derhy (Canada), March 15, 2004 QCA (Beauregard, Rothman, Forget JJ.C.A.) Section 64(2) Copyright Act/Passing Off/ Damages
The respondent owns the copyright registration for a parka called the Barbital design. It did not obtain an industrial design registration for the Barbital design. The appellants sell low-end clothing. One of the distinctive/original aspects of the Barbital parka were embroidered designs. The appellants imported and sold imitation parkas similar to the Barbital parka. Each imitation parka sold for approximately $120 while the Barbital parkas sold for approximately $275. For the 1994-95 fall-winter season, the appellants sold approximately 6600 imitation parkas. The respondent sold approximately 300 Barbital parkas during the 1993-94 fall-winter season but discontinued sale and advertising before the 1994-95 fall winter season. At trial, the Court held the appellants liable for passing off and infringement of the respondent's copyright. The Trial Judge awarded the respondent $26,000 for loss of profits, based in part on the loss of licensing fees, and $20,000 in punitive/exemplary damages. The appellants appealed, arguing that the Barbital design was applied to a useful article of which more than 50 reproductions had been made (s. 64(2), Copyright Act). The respondent argued that the exception to s. 64(2) of the Copyright Act, provided for in s. 64 (3), was applicable. The appellants also contested the amount of damages awarded.
Held: Passing off has not occurred. During the proceedings, no one argued that a client at the appellants' discount stores would think that he/she was buying a Barbital parka sold in the respondent's boutiques. There was, therefore, no argument put forward that the public was deceived (or that there was confusion).
With regard to s. 64 (2) of the Copyright Act, the Court held that the design of the Barbital parka was a design under s. 64 (2) and that the parka was a useful article. However, the Court also held that the Barbital design, due to the embroidered content, was a graphic or photographic representation that is applied to the face of an article of a design (s. 64 (2) (a)) and that it constituted a representation of a real or fictitious being, event, or place applied to an article as a feature of shape, configuration, pattern, or ornament (s. 64 (2) (e)). Thus, the exemption to the restriction regarding designs on useful articles (reproduced in more than 50 copies) of s. 64 (2) applied.
Regarding damages, the appellants argued there was no loss of profits. The Court noted that the Barbital parkas were sold in fall/winter 1993-94, and then no longer sold or featured by the respondent in its catalogue for fall/winter 1994-95. The imitation parkas were sold only for the 1994-95 season. Thus, there was no competition between the Barbital parkas and the imitation parkas. Also, no evidence was offered with regard to the amount of licensing fees. The Court held, therefore, that there was no evidence of loss of profit and reduced the award to the respondent. The appellants also argued that the $20,000 in punitive/exemplary damages at trial was unjustified as they had already been sufficiently punished. The Court agreed and further reduced the award to the respondent by $20,000.
2. Bigknowledge v. Skura, Hains, Joannette, and Pilibi, April 2, 2004 QSC (Bishop J.C.S.) Confidential Information /Section 734 Québec Code of Civil Procedure /Seizure of Moveable Property/Section 38(1) Copyright Act
Bigknowledge (BK) specializes in the training of its clients in Client Relationship Management (CRM) using the Seibel software platform. BK has a number of biotech and pharmaceutical clients. Between 2000 - 2002, BK hired Hains as a sales representative for BK's CRM training programs. Hains signed a non-competition, confidentiality, and non-solicitation agreement with BK, which obliged Hains not to use or divulge any confidential information of BK to third parties, not to remove or transmit any property or data from BK's offices, and not to compete with BK for 8 months following the end of Hain's employment. BK also hired Joannette as a contractor to develop on-line tools for CRM on Seibel. Joannette signed a confidentiality and non-competition agreement for the duration of his employment. BK further signed a bidding agreement with Skura, according to which Skura and BK agreed that Skura would limit its bids to installing Seibel and BK would limit its bids to CRM training for Seibel.
In April 2003, Joannette left BK and incorporated Pilibi, which furnished on-line training programs and computer/software product installation services in the pharmaceutical/biotech industries. Hains left BK in September 2003 and maintained close commercial relations with Pilibi. BK alleged that Hains and Joannette took many documents, manuals, software programs, files, and confidential information with them when they left BK. Subsequently Skura won contracts with pharmaceutical companies for both installation of Seibel and training in CRM on Seibel. BK alleged that, since Skura had never provided training services before, Skura was working with Hains and Joannette/Pilibi, who were, in turn, making use of confidential information, documents, and software products they had taken from BK.
BK sued and applied for a seizure prior to judgment order under s. 734 (1) of the Québec Code of Civil Procedure (CPC), which would include the right to have computer specialists inspect the computer equipment of the defendants and to seize any and all BK confidential information, software, etc. BK had also, previously, requested an Anton Piller order to allow a search of the defendants' computer equipment in any place, as well as seizure of any information or data sought by BK. BK also invoked s. 734 (5) CPC to attempt to obtain a search and seizure order, applicable to the defendant's computer equipment, based on s. 38 (1) of the Copyright Act.
Held: A seizure order under s. 734 (1) of the CPC is addressed to a “bien meuble” (movable property). Confidential information and contents of a computer do not fall under the term “bien meuble,” and thus cannot be seized prior to judgment. Any seizure order under s.734 (1) must be limited to physical/corporal movable property. Any corollary aspects of BK's motion, such as searches, must also be limited to physical/corporal movable property. Thus, the right to seizure before judgment under s. 734 (1) of the CPC cannot, in itself, suffice to obtain an order allowing the search of the defendants' computers or computer equipment.
Section 734 (5) of the CPC allows a party to seize movable property if there is a legal provision that allows for such a seizure. BK argued that s. 38 (1) of the Copyright Act constitutes such a provision. The Court held that the right under this section is limited to physical or corporal copies of the works of the copyright holder. This does not include software, code, or computer files. The Court therefore allowed the order, but only for books, documents, and manuals of BK.
The Court denied the motion for the Anton Piller order because only two of the three prerequisite conditions were met. There was an extremely strong prima facie case (since Skura had never offered on-line training before and given the large amount of effort and time required to put together an on-line training program, there was sufficient proof that Hain and Joannette had assisted Skura using material and information belonging to BK). Regarding damage, the Court agreed with BK that the use of BK materials by Skura allowed Skura to offer on-line training without having to make an investment to create an on-line training program. According to the Court, this gave Skura an unfair competitive advantage. Such an advantage put BK at risk of losing contracts and clients. This would constitute irreparable harm and meets the requirements of the second condition. As for the third requirement, BK made no specific allegation regarding destruction of materials in its affidavit. BK only alleged that, without the relief requested, BK had good reason to believe that a seizure prior to judgment would be ineffective and useless. This was insufficient to meet the third condition, namely to satisfy the Court that there was a real possibility that the defendants might destroy the material.
3. Sherwood Village Optical v. Saskatchewan, April 4, 2004 SCQB (Sandomirsky J.) Business Name Registration
Motion to appeal the cancellation of the applicant's registration for the business name, "Insight Vision Care". On April 24, 2002, the applicant applied to register Insight Vision Care as a business name based on an intention to carry on business in Saskatchewan at some future date under the name. A nearby competitor had begun to use that business name in February/March 2002. The applicant approached its competitor and offered to sell it the business name for $10,000; the competitor responded by saying that the registration was invalid because it had begun use of the name prior to the registration and offered to pay the applicant its out of pocket expenses if it cancelled the registration. The applicant refused. The registration was subsequently cancelled by the Registrar on the basis that the applicant had not in fact intended to use the name. (The applicant's evidence that it was using the name comprised the use of the Internet address www.insightvisioncare.com.)
Held: Appeal dismissed. The Registrar was justified in cancelling the registration because the applicant failed to establish that it had dispensed optometric goods or services under the business name "Insight Vision Care". On the whole, the evidence disclosed that it never was the bona fide intention of the applicant to engage in business under that business name. “It is not a permitted use of the Act to register a business name for the sheer purpose of then selling it to an established user who had failed to register the name in a timely fashion.”
4. Percy Schmeiser et al. v. Monsanto Canada et al., May 21 2004 SCC (McLachlin C.J. and Fish J.) Appeal/Patent Infringement /Patent Validity/Use of Patent
Appeal by Schmeiser from the Federal Court of Appeal decision that confirmed the trial judge's decision that Schmeiser had infringed Monsanto's patent by harvesting and planting seeds from canola that included Monsanto's patented “Roundup Ready” gene.
Held: Appeal dismissed in a 5:4 decision. Although plants are not patentable in Canada, the Court upheld the validity of Monsanto's patent. The majority held that claims to genes and cells, per se, give patent protection when plants carrying those altered genes/cells are used. Specifically, the Court held that "infringement through use is thus possible even where the patented invention is part of, or composes, a broader unpatented structure or process". Schmeiser selected for those plants that carried the patented genes/cells and therefore infringed Monsanto's patent. He infringed the patent by "using" the patented cell and gene. His cultivation of the canola deprived the patent owner of the full enjoyment of the monopoly conferred by law. It matters not that Schmeiser did not apply Roundup to his crop, he still benefited from the stand-by or insurance utility of the properties of the patented genes and cells. The Court also stated that if Schmeiser had "been a mere 'innocent bystander', he could have refuted the presumption of use arising from his possession of the patented gene and cell." However, the Court held that Schmeiser made no profits as a result of the invention and that he would have had the same profits if the canola that he sold were ordinary canola because he did not apply Roundup to his crops. Accordingly, no damages were awarded.
III. OPPOSITION BOARD DECISIONS
1. Colorific Photo & Digital Imaging v. J.W. Crooks, March 19, 2004 (Carrière) Confusion/Lack of Interest
Use-based application for COLORIFIC & Design for photo finishing and photo lab services. Opposition based, inter alia, on s.12(1)(d) due to confusion with COLORIFIC registered by the opponent for the same services. Only the opponent filed evidence. Neither party filed an argument.
Held: Application refused. The applicant apparently has a lack of interest in these proceedings and has not discharged its legal burden.
2. Systèmes de Formation et de Gestion Perform v. Patrick Scissons & Michael Scissons, a joint venture, March 22, 2004 (Carrière) Section 30
Proposed-use application for PERFORMDB for software to assist corporations with evaluating and appraising the workplace performance of employees and all training, consulting and maintenance services required related to corporations using the above software. Opposition based, inter alia, on s. 30 because the applicant used the mark before filing its proposed use application.
Held: Application refused because the applicant's counter statement alleged that it had used its mark prior to its filing date.
3. Blue Cross Plans v. We Care Health Services, March 29, 2004 (Bradbury) Confusion
Proposed-use application for WE CARE SOINS ET SERVICES À DOMICILE & Design for personal care services and wares. CARE, SOINS, and SERVICES À DOMICILE disclaimed. The applicant undertook to not use the colour red for the cross in its design. Opposition based, inter alia, on s. 12(1)(d) due to confusion with Cross Design (claiming the colour blue) and BLUE CROSS & Design registered by the opponent for hospitalization and contracts for various forms of health care.
Held: Application refused. The applicant failed to satisfy its burden. Evidence of long co-existence without confusion might well have resulted in a different outcome.
4. Marg Hughes v. Blanchard Training & Development, March 29, 2004 (Carrière) Confusion/Section 50
Proposed-use application for GAPFINDER for printed materials, namely, performance assessment survey forms. Opposition based, inter alia, on s. 12(1)(d) due to confusion with GAAP registered by the opponent for executive search and management recruitment and consultation in the field of personal assessment. Only the opponent filed evidence.
Held: Application refused. A consumer who is aware of the opponent's GAAP trade mark could reasonably believe that the ware sold in association with GAPFINDER is a new product put on the market by the opponent and that it has used “FINDER” to distinguish such product from its existing services. The opponent's evidence concerning use of GAAP by a “licensee” was disregarded because the requirements of s. 50 were not satisfied by the husband and wife relationship between the owner of the GAAP mark and the major shareholder of the company that uses the GAAP mark.
5. Canadian Council of Professional Engineers v. Kelly Properties, April 5, 2004 (Bradbury) Descriptiveness /Section 9 /Distinctiveness
Proposed-use application for KELLY ENGINEERING RESOURCES for personnel employment services. ENGINEERING RESOURCES disclaimed. Opposition based, inter alia, on s. 12(1)(b), s. 12(1)(e) and distinctiveness .
Held: Application refused. The distinctiveness ground of opposition succeeded because a proposed-use mark consisting of a surname and a descriptive term is not adapted to distinguish the services of the applicant from the like services of others bearing the same surname. The s. 12(1)(e) ground failed because the applicant's mark as a whole bears little resemblance to the opponent's ENGINEERING official mark. The s. 12(1)(b) ground of opposition failed because the mark as a whole is not clearly descriptive of either the services or the persons employed in the production of the services. Consumers are not likely to think that the applicant's personnel services are performed by engineers or that the applicant is offering some form of “engineering” services, but rather that the applicant assists in finding employment for engineers. The Board Member reached this conclusion despite evidence that there are some engineers whose expertise includes the efficient use of human resources and that there is an engineering field called “resource engineering”.
6. Mark's Work Wearhouse v. Mountain Gear, April 8, 2004 (Bradbury) Confusion
Application for MOUNTAIN GEAR & Design for footwear based on proposed use and use and registration abroad. MOUNTAIN GEAR disclaimed. Opposition based, inter alia, on s.12(1)(d) due to confusion with various MOUNTAIN GEAR & Design marks registered for footwear and clothing.
Held: Application refused. Confusion likely because the opponent has used its marks longer and the evidence of third party use of MOUNTAIN GEAR was insufficient to satisfy the applicant's burden.
7. Advance Magazine Publishers v. Dr. Robert Casciato, April 14, 2004 (Bradbury) Confusion
Proposed-use application for GOURMET GUYS for publications, namely cookbooks and gambling instructional guides, together with novelty items namely t-shirts, sweatshirts and aprons. GOURMET disclaimed. Opposition based, inter alia, on s. 16 due to confusion with the mark GOURMET previously used by the opponent in association with magazines that include recipes and s. 12(1)(d) due to confusion with the mark GOURMET registered for magazines.
Held: Application refused under s. 16 with respect to cookbooks because of the similarity between the marks and their channels of trade, the inherent weakness of the applicant's mark with respect to cookbooks, and the fact that the opponent's mark had been in use for many years whereas there has been no use of the applicant's mark. Confusion not likely with respect to gambling instructional guides because the applicant's mark is not inherently weak with respect to these wares and there is not much similarity between the opponent's magazine and the applicant's guides. The s.12(1)(d) grounds failed in their entirety because there was evidence of the common adoption of GOURMET by third parties in association with publications as of the later material date for registrability.
8. Maison des Futailles v. Vincor (Québec), April 14, 2004 (Carrière) Confusion
Proposed-use application for LE TONNELIER for wines. Opposition based, inter alia, on s.12(1)(d) due to confusion with TONNELLI registered by the opponent for wine. The applicant filed neither evidence nor argument.
Held: Application refused. All of the s. 6(5) factors, as well as the applicant's lack of interest, favour the opponent.
9. Kimberley-Clark Tissue v. Fort James Operating, April 15, 2004 (Herzig) Use as a Trade Mark/Functionality/Ornamentation
Proposed-use application for Arabesque Emboss Design for paper towels. Opposition based, inter alia, on non-distinctiveness because the design cannot function as a trade mark and does not actually function as a trade mark.
Held: Application refused. The design is capable of functioning as a trade mark because there is insufficient evidence to support an argument that the design primarily serves a functional purpose (i.e. that it makes the towels more absorbent). Just because the mark may be ornamental does not mean it cannot function as a trade mark; the issue is whether the “ornamental” feature has acquired distinctiveness with the public. The applicant failed to meet its onus to establish that the mark applied for has trade mark significance. The opponent's evidence showed that the applicant's wares are sold under word marks, that the front face of the applicant's packaging obscures the design on the towels, and that although the design is pictured on the front of the applicant's packaging, the design is not readily discernable and its depiction may merely indicate to consumers the ornamental feature of the wares rather than identify the source of the wares.
10. Western Rice Mills v. Libra National, April 20, 2004 (Folz) Opponent's Section 16 Onus
Use-based application for THE RICE PEOPLE for rice and the operation of a business distributing food products to others. Opposition based, inter alia, on s. 16(1)(a) due to confusion with the opponent's trade mark THE RICE PEOPLE for similar wares and services.
Held: Application refused. The opponent failed to show use of its trade mark in association with wares in accordance with s. 4 but its evidence did show use in association with services. An opponent is not required to show continuous use, it is sufficient if it shows that use was still occurring after the date of the application's advertisement.
11. Stoneage Creations Canada v. Stoneage Lighting Creations, April 27, 2004 (Folz) Confusion
Use-based application for STONEAGE for rock lamps, puddle rocks, rock flower pots, and consulting services relating to exterior lighting schemes. Opposition based, inter alia, on s.12(1)(d) due to confusion with STONEAGE CREATIONS registered by the opponent for developing, marketing and commercializing of creative products for others.
Held: Opposition rejected. The opponent having given evidence of its involvement in developing a creative concept involving a series of dolls, it was clear that the parties' wares and services, as well as their channels of trade, differed.
12. Toys “R” Us (Canada) v. Stoyshin, April 27, 2004 (Herzig) Confusion
Proposed-use application for MATS “R” US for rental of industrial and commercial mats for use in industrial and commercial locations. Opposition based, inter alia, on s. 12(1)(d) due to confusion with TOYS “R” US, VIDEOS “R” US, R US, KIDS “R” US, BIKES “R” US, PARTIES “R” US and BOOKS “R” US registered by the opponent for household items, clothing, department store services, video store services, bicycle store services, party novelties and book store services.
Held: Opposition rejected. The nature of the parties' wares, services and trades are quite distinct. The prefixes of the marks are different in all respects and the component “R US” is weak in that it has been adopted by various other parties.
13. Fletcher Leisure Group v. Protos International, April 28, 2004 (Herzig) Confusion
Proposed-use application for SUN ICE for carbonated and non-carbonated, non-alcoholic beverages, namely fruit based drinks and juices and drinking water. Opposition based, inter alia, on s. 12(1)(d) due to confusion with SUN ICE Design registered by the opponent for clothing.
Held: Opposition rejected because there is no nexus between the parties' wares. The fact that the opponent has distributed water bottles in association with SUN ICE at sporting tournaments does not establish any reputation for the opponent's marks with respect to beverages; the water bottles were distributed for the purpose of promoting the opponent's clothing.
14. Molson Breweries v. Samuel Smith Old Brewery (Tadcaster), May 6, 2004 (Bradbury) Confusion /Section 30(b) /Continuous Use in the Normal Course of Trade
Use-based application for IMPERIAL STOUT & Design for beer; stout. STOUT, BREWERY, 1758 and IMPERIAL disclaimed. Opposition based, inter alia, on s. 30(b) because there has not been continuous use of the applicant's mark in Canada since the date claimed and s.12(1)(d) due to confusion with the marks MOLSON IMPERIAL, MOLSON IMPERIAL & Design and BOH IMPERIAL XXX STOUT & Design registered for brewed alcoholic beverages. The only evidence filed by the opponent was copies of these registrations
Held: Opposition rejected. The applicant's product is a specialty beer with limited market and its normal course of trade is to await special orders from Canada and to then fill such orders with beer that is at all times available from its British brewery. As a result, it was within its normal course of trade to have years when no orders were received from Canada. Confusion is not likely because the applicant's uncontested evidence was that “imperial stout” is a generic style of beer, the applicant's mark has a component that distinguishes it from each of the opponent's marks (namely the words SAMUEL SMITH'S which appear first in large letters), and there is no evidence of the opponent's marks having any reputation.
15. Dairy Farmers of Canada v. Horizon Organic Dairy, May 6, 2004 (Bradbury) Confusion/Certification Marks
Application for HORIZON & Design for dairy products based on proposed use and use and registration abroad. Opposition based, inter alia, on s. 16 due to confusion with the mark Cow Design used as a certification mark for Canadian dairy products and as a trade mark for promoting the consumption of dairy products made with Canadian milk.
Held: Application refused. The marks resemble each other in appearance because both feature a leaping cartoon cow. Although there is evidence of other cow designs used by third parties, there is no evidence of the common use of “leaping cartoon cows”. The word HORIZON does not serve to distinguish the applicant's mark from the opponent's certification mark because the certification mark is often used by licensees in close proximity to their own trade marks; as a result, the public is likely to wrongly conclude that the applicant's wares meet the standards of the opponent's certification mark.
16. McGregor Industries v. Reitmans (Canada), May 14, 2004 (Bradbury) Distinctiveness/Initials
Use-based application for AE for clothing. Opposition based, inter alia, on non-distinctiveness due to the use of AE AMERICAN ESSENTIALS and AE Logo by the opponent in association with socks and other clothing.
Held: Application refused. Marks comprised solely of initials are inherently weak and no one should be entitled to monopolize letters to the detriment of others who have the same initials. In the present case, the applicant's use of AE has been primarily in association with other words or designs and it is clear that others have used AE marks in association with similar wares. It seems unlikely that AE could distinguish the applicant's wares in the absence of additional words or designs.
17. Alpha Sportswear v. Alpha Industries, May 20, 2004 (Bradbury) Confusion
Application for ALPHA INDUSTRIES for various items of clothing based on use, proposed use and use and registration abroad. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark ALPHA registered for clothing.
Held: Application refused. Although the evidence shows that the opponent primarily sells sports-related clothing, its registration is not so restricted. Its registration covers “jackets”, which is broad enough to cover the “military-type jackets” applied for by the applicant. The length of time that the marks have been used and the extent to which they have become known greatly favour the opponent.
18. Eloyalty v. Loyalty Management Group Canada, May 28, 2004 (Bradbury) Descriptive When Sounded/Effect of Disclaimer
Use-based application for LOYALTY & Design for advertising and promotion of wares and services of others by means of an incentive rewards program, etc. and various wares. LOYALTY disclaimed with respect to the services. Opposition based, inter alia, on s. 12(1)(b) because the mark when sounded is clearly descriptive of the services.
Held: Opposition rejected. The descriptiveness ground of opposition failed because the opponent did not meet its initial burden. The disclaimer of LOYALTY does not amount to an admission that such word is clearly descriptive of the applicant's services. Dictionary definitions do not support a conclusion that the mark is clearly descriptive and the opponent's evidence failed to show “common usage of the descriptive word LOYALTY for incentive programs.”
19. Governors of the University of Alberta v. IT Synergy, June 9, 2004 (Bradbury) Descriptive Acronym/Section 30(b)
Use-based application for OOST for computer software training materials, providing education and training on computer software… providing placement services for work practicums in the information technology industry. Opposition based, inter alia, on s. 12(1)(b) and distinctiveness because the mark is an acronym for “Object Oriented Software Technology”, which is a non-proprietary type of software technology, and s. 30(b).
Held: Application refused only with respect to the wares; the s. 30(b) ground of opposition succeeded with respect to the wares because the applicant's affiant attested to use having commenced in association with the wares as of a date later than that set out in the application. The opposition failed with respect to the services. The mark was not clearly descriptive as of the material dates. The applicant agreed that “Object Oriented Software Technology” is a generic term but attested that it was the only one in Canada to have adopted OOST in association with wares or services. As of the material date, it appeared unlikely that the average consumer would have understood OOST to describe the wares/services as a matter of immediate impression.
