Recent Decisions December 2000
I. FEDERAL COURT DECISIONS
(a) Patents
1. Les Inventions Morin and Les Équipments Armand Morin v. Gilbert Tech, February 21, 2000, FCTD (Nadon J.) Infringement
Action for a declaration that the plaintiffs' patent is valid and that the defendant's manufacture and sale of saw teeth infringe the patent and for a permanent injunction to restrain such manufacture and sales. The defendant says that its tooth is distinguishable in several respects from the plaintiffs' and that the plaintiffs' tooth necessarily includes three components. The plaintiffs argue that their claims are limited to the tip or the head of the tooth.
Held: Action dismissed. The essence of the patent is in no way infringed by the defendant's product. The patent claims cover not only the head but the attached pin and the hollow tube. The defendant's tooth imitates none of the essential and unique characteristics of the tooth claimed in the patent. A person well versed in the art would not consider the bolt of the defendant's tooth the equivalent of a hollow tube.
2. Novopharm and Apotex v. Glaxo Wellcome, October 26, 2000, FCA (Rothstein J.A., Sexton J.A. and Malone J.A.) Appeal/Infringement/Validity/Co-inventors/ Speculation/Overbreadth/Method of Medical Treatment/Standing as Co-plaintiff/Unregistered Licence/Ambiguity
In combined patent impeachment and infringement proceedings, the plaintiffs to the impeachment action (defendants in the infringement action) appealed from the 1998 decision of Wetston J. of the Trial Division reported at 79 C.P.R. (3d) 193. The patentee and related parties cross-appealed. The patent in suit was for a new use of an old compound - AZT for the treatment of AIDS. AZT was previously synthesized in an effort to find a cure for cancer. The disclosure taught use of AZT for treating AIDS and for prevention of AIDS. The facts essentially were that in the early 1980's Glaxo was seeking a drug for treating AIDS. In late 1984 Glaxo scientists discovered that AZT showed extremely promising results against murine viruses and in early 1985 began to prepare a patent application, which was completed and filed in 1985 in the U.K. Just prior to completion of the patent application, Glaxo sent the AZT out to a third party for testing against HIV using a laboratory human cell line. The results were again positive and were made available to Glaxo before filing. Clinical trials were only done after the application was filed. At trial, Apotex and Novopharm raised a large number of validity issues. Infringement was admitted for some claims and was not really in issue for most others. Admissions were made from which infringement could be found. At trial the patent was for the most part found to be valid and infringed. The Trial Judge found a limited class of claims to be invalid.
Held: On appeal validity issues were foremost. There were a number of lesser issues, particularly pertaining to remedies.
Does failure to name a co-inventor result in invalidity? The Trial Judge found that Glaxo had failed to name two co-inventors in the petition, but that this did not constitute an untrue material allegation and thus did not void the patent. The so-called co-inventors did the testing of AZT on laboratory human cells just prior to the filing of the patent. Neither of these individuals made any claim to be co-inventors. The Court of Appeal held that the Trial Judge erred in finding these two individuals were co-inventors. Merely performing testing that demonstrates an invention's utility did not make them inventors. The Court further held that even if they were co-inventors, failure to name them does not lead to invalidity. This result would be illogical because instead of an unnamed true inventor having his or her interest in a valid patent recognized, the result would be to invalidate and cause the inventor to lose entitlement.
Was there an invention as of the first filing date? As of the filing date, the testing that demonstrated the utility of the invention was not complete - there had been laboratory murine and human cell tests only. There were no tests on living human beings by the original filing date, and the argument was that Glaxo could not have known that AZT would be effective in treatment for prevention of HIV, so there was no sound prediction sufficient to establish invention. The Court held that the law is clear that even where an invention constitutes speculation as of the priority date, the patent will not be invalid if the speculation is proven valid as of the time the patent is attacked.
Are claims not expressly limited to use of AZT for treatment of AIDS invalid for overbreadth? The patent contained a series of claims for a pharmaceutical formulation comprising AZT and a pharmaceutically acceptable carrier, but omitting any particular purpose. AZT itself was known. The Trial Judge found such claims to be valid because reading the disclosure as a whole the words "pharmaceutical formulation" did not as a matter of construction cover usage other than for AIDS treatment. He found the claims were not directed toward a pharmaceutical formulation for any purpose and that they were not overbroad. The Court of Appeal found that the Trial Judge erred. To allow such claims to stand would be tantamount to giving Glaxo a patent for a compound that was not new. It disagreed with the Trial Judge's interpretation of the term "pharmaceutical formulation". Assuming the term implies a limitation to pharmaceutical use, the limitation is undefined and does not distinguish between what is old and what is new. The Court also held that the Trial Judge erred in reading the patent as a whole in order to limit the ambit of the claim. There was no ambiguity and it was therefore improper to have regard to the patent disclosure to limit claim scope.
Is the patent invalid because it is a method of medical treatment? Methods of medical and surgical treatments are not patentable. A pharmaceutical formulation however, which is a vendible product, is wholly distinct. A new use for a known compound is not a method of medical treatment and this attack therefore failed.
Did a co-plaintiff with no written licence have the requisite standing? One of the co-plaintiffs held itself out as a person claiming under the patentee on the basis of an implied licence. This company was a subsidiary in the Glaxo family of companies among which the practice was for subsidiaries to be licensed by implication without a written document. In addition to this evidence, the Court held that this was essentially a non-issue given the patentee was before the Court as co-plaintiff supporting the existence of the implied licence. The Court also held that failure to register a licence under Section 50(2) of the Patent Act does not rendered a licence or assignment void generally, but is limited to deciding priorities among parties competing for an interest.
Was the Trial Judge right in ruling that the claims for the use of AZT for all human retroviral infections were invalid? There was a series of claims for the use of AZT in the treatment or prevention of all human retroviral infections. The Trial Judge found such claims to be broader than the invention (which was limited to treatment of AIDS) and thus invalid. The Court of Appeal declined to interfere with the Trial Judge's finding. There was evidence that justified his finding that AZT was not suitable for treating retroviruses other than HIV. There was no palpable and overriding error.
Did the Trial Judge err in ruling that the claims relating to an AIDS infection are invalid for ambiguity? There were a series of claims for the treatment or prevention of an AIDS infection. The Trial Judge found such claims to be invalid for ambiguity because the term an AIDS infection meant either an opportunistic infection from HIV or simply HIV infection itself. The teaching of the patent was AZT for treating HIV infections, and there was no support in the specification that AZT would assist in treating opportunistic infections. Hence the Trial Judge made no error.
Interest: The Court held that the plaintiffs were entitled to an award of pre- and post-judgement interest despite not claiming in the Statement of Claim. The Court held that a claim for interest may be raised at any time before damages are finally determined, which would take place subsequently on a reference, given liability had been established. The appropriate rate of interest was to be determined on the reference as well.
Miscellaneous validity and other issues: The Court also rejected validity attacks based on obviousness, novelty, and ambiguity in the specification (the technical definition of AZT in the specification was argued to encompass isomers) and sufficiency of disclosure (it was argued the patent did not provide enough information for a medical practitioner to treat patients, or that there was insufficient teaching of preventative use). An attack for overbreadth and ambiguity on a series of claims for AZT for preventative use against AIDS was rejected. A further attack on the basis that the Trial Judge was bound by the invention date pleaded by Glaxo because it was a formal admission was rejected.
3. The Commissioner of Patents v. Pfizer, November 2, 2000, FCA (Isaac J.A., McDonald J.A., Sharlow J.A.) Appeal/Judicial Review/ Reinstatement of Patent Application/Section 73(3) Patent Act
Appeal from an order allowing the respondent's application for judicial review and ordering the reinstatement of the respondent's patent application, which had been deemed to be abandoned for non-payment of annual maintenance fees. Although the statutory requirements for reinstatement had not been met, the Patent Office issued Notices of Reinstatement. It subsequently sent letters stating that the Notices had been issued in error. The Motions Judge concluded that the applications had been reinstated because the Commissioner of Patents does not have the right to withdraw or retract a Notice of Reinstatement. The appellant contends that the Notices of Reinstatement were nullities, that an application can be reinstated only if the statutory requirements for reinstatement have been met, and that the Notices are not subject to judicial review because abandonment and reinstatement of a patent application result from the operation of law, not the exercise of any discretionary or decision-making powers given to the Commissioner.
Held: Appeal allowed. Section 73(3) of the Patent Act provides that reinstatement of an abandoned patent application will occur if three statutory requirements are met and not when the Patent Office issues a Notice of Reinstatement. Rule 152 clearly requires that a request for reinstatement be made within 12 months from the date on which a patent application was deemed to be abandoned. As the respondent did not make its request within this time period, its application could not be reinstated in law.
4. Progressive Games v. The Commissioner of Patents, November 9, 2000, FCA (Sexton J.A., Décary J.A., Linden J.A.) Appeal/New and Inventive Method
Appeal from the decision that the appellant's game of poker does not constitute something that is patentable.
Held: Appeal dismissed. The appellant's changes in the method of playing poker do not amount to a new and innovative method of applying skill or knowledge.
Appeal from a s. 45 decision expunging the registration of the trade -mark CORDON BLEU for printed leaflets and booklets of recipes for making sandwiches, canapes and hors-d'oeuvres.
(b) Trade Marks
1. Cordon Bleu International v. Renaud Cointreau, September 6, 2000, FCTD (Rouleau J.) Section 45 Appeal/Use in the Normal Course of Trade
Held: Appeal dismissed. The registrant argued that the distribution of the wares at no charge was a normal trade practice. Consumers generally receive the booklets and leaflets when they purchase a CORDON BLEU food product but also at exhibition halls and upon request. The Court followed Hospital World Trade Mark, [1967] R.P.C. 595 (Pat. Off.) in holding that the free distribution of wares such as booklets and leaflets of recipes cannot be regarded as a transaction involving transfer of the property or possession of these wares in the normal course of trade. The persons who receive the free publications are most likely to regard them as part of the registrant's advertising of its food products, rather than as use of the mark to distinguish the registrant's printed materials from those of others.
2. Pepper King v. Sunfresh et al., September 7, 2000, FCTD (Dawson J.) Infringement/Use as a Trade Mark
Action for infringement of the trade-mark VOLCANO registered for pepper sauce. The defendants have sold salsa with labels that bear the word "volcano", e.g. "All-Natural Volcano Desperately Hot Salsa Picante".
Held: Action dismissed because "volcano" not used by defendants as a trade mark. In order for use of a trade mark to violate s. 19, the use made of the trade mark must be use as a trade mark. The determinative issue is the message given by the use of the word "volcano" by the defendants in the context of their salsa. The Court concluded that the effect of the word "volcano" as used by the defendants is to distinguish the degree of spiciness of their product, not to identify the source of the product. The source of the defendants' product was identified by the use of the trade-mark LA ELECCION DEL PRESIDENTE. In addition, because the word "volcano" is found in the midst of a number of words that are descriptive of the product and not its source, the word "volcano" would similarly be viewed as not descriptive of the source.
3. Polo Ralph Lauren v. United States Polo Association and Reg. TM, September 14, 2000, FCA (Malone J.A., Strayer J.A., Isaac J.A.) Opposition Appeal/Confusion/First Impression Test/Section 6(5)(e)
Appeal from Trial Judge's decision that allowed appeals from two opposition decisions. The Opposition Board had refused applications for UNITED STATES POLO ASSOCIATION & Design and U.S.P.A. & Design for clothing based on a likelihood of confusion with various marks registered by the appellant for clothing, including POLO and Polo Player Design. The Trial Judge rejected the oppositions, new evidence having been filed on appeal in the form of evidence suggesting that the word "polo" has been generally adopted and widely used in the retail business in Canada. The central issue in the appeal of the Trial Judge's decision is whether he erred in law by failing to apply the "first impression test" as to the likelihood of confusion.
Held: Appeal dismissed. The Trial Judge made an error of law by relying on inadmissible hearsay evidence but the Court of Appeal can conduct its own analysis on the issue of confusion. The Trial Judge erred in considering the respondent's marks in isolation with the sport of polo instead of in association with the articles of clothing for which registration is sought. Both parties' marks trigger the idea of the sport of polo and would likely lead prima facie to the inference that the associated clothing are produced by the same company. However, the respondent's evidence of the state of the register mitigates the significance of resemblance under s. 6(5)(e). It may be reasonably inferred that Canadian clothing consumers are accustomed to making minor distinctions between various polo marks.
Concurring reasons by Isaac J.A.: As there is no legal error or a palpable and overriding error of fact, the decision of the Trial Judge should not be interfered with. The Trial judge did apply the first impression test and did not incorrectly consider the respondent's mark in isolation with that of polo instead of in association with articles of clothing. (In Isaac's view, the respondent's marks do not resemble the appellant's marks in appearance, sound or idea suggested and Malone's criticism of the Trial Judge for considering the respondent's marks in isolation with the sport of polo instead of in association with clothing inappropriately suggests that the nature of the wares should be counted twice, once under s. 6(5)(c) and again under 6(5)(e).)
4. Mayflower Transit v. Bedwell Management System et al., September 15, 2000, FCTD (McKeown J.) Contempt/Breach of Consent Order
The defendants are in contempt of Court as a result of two breaches of the consent order prohibiting the distribution of printed materials bearing the plaintiff's trade mark or displaying such mark on uniforms or in advertisements. Although the defendant changed its printed materials, its failure to inform realtors or sales representatives to cease distribution of the old literature constitutes a breach. Another breach resulted from an employee wearing a t-shirt bearing the plaintiff's mark – it did not matter that the employee normally wore overalls that would have hidden the reference and that the defendant issued instructions to employees not to wear the old t-shirts. The defendant should have attempted to recall the shirts. A third alleged breach, in the form of listings on the Internet and in a phone book, did not constitute breach of the order as the plaintiff did not show beyond a reasonable doubt that the defendant was aware of these two listings (neither required any payment).
5. Rick Sheppard v. Larry Marshak et al., Carl Gardner v. Larry Marshak et al., September 25, 2000, FCTD (Dawson J.) Interlocutory Injunction/Irreparable Harm/ Payment of Receipts into Court
Motions by the plaintiffs for interlocutory injunctions to restrain the defendants from using the trade marks THE COASTERS, THE CORNELL GUNTHER COASTERS, COASTERS, THE DRIFTERS, and DRIFTERS to promote concerts. One plaintiff owns the registered trade mark THE COASTERS and the other owns the registered trade mark THE DRIFTERS. Concerts organized by the defendants are scheduled to be performed the day after the hearing.
Held: Motions dismissed. The evidence is necessarily unsatisfactory in view of the time frames in which the motions were brought. Credibility is very much at issue as there has been no cross examination on the affidavits, and reply evidence has been tendered based on information and belief. The evidence re irreparable harm is speculative and the validity of the plaintiffs' trade marks is disputed. There is uncontradicted evidence that an injunction would adversely impact on the defendants' reputation for reliability as a concert promoter. The balance of convenience favours the defendants. Defendants ordered to pay all receipts from concerts into Court, with provision for the defendants to apply to the Court for payment out of those receipts for any reasonable disbursements. Proceedings to be specially managed in view of the need for prompt action.
6. Unitel International v. Reg. TM, September 28, 2000, FCA (Létourneau J.A., Rothstein J.A., McDonald J.A.) Section 37(1)(c) Trade-marks Act
Appeal from Trial Division concerning the issue of whether the Registrar erred in refusing the appellant's trade mark application under s. 37(1)(c) of the Trade-marks Act.
Held: Appeal dismissed. Under s. 37(1)(c), the alleged dates of first use in applications are not relevant – the Registrar must refuse an application if it is for a trade mark that is confusing with a mark that is the subject of a pending application. If this procedure leads to delay and a multiplicity of proceedings (e.g. opposition proceedings), that is a matter for Parliament to remedy.
7. Riches, McKenzie & Herbert v. Pepper King, September 28, 2000, FCTD (Lemieux J.) Section 45 Appeal/Onus
Appeal from s. 45 decision refusing to expunge a registration for VOLCANO for hot pepper sauce. The requesting party's main argument was that the registrant is using VOLCANO HOT, not VOLCANO. The Registrar agreed that the public would perceive the mark being used on the labels as VOLCANO HOT but maintained the registration on the basis of invoices that referred to the wares by the trade mark VOLCANO. In so doing, the Registrar stated that it is reasonable to conclude that the invoices accompanied the wares, in the absence of clear evidence that they do not.
Held: Appeal allowed. The Registrar made two errors: she shifted the evidentiary onus to the requestor when it is clear that the entire burden remains with the registrant in s. 45 proceedings; and she was not entitled to assume the invoices accompanied the goods at the time of transfer. The Court was struck by the registrant's failure to file a further affidavit on appeal. (In fact, it did not participate in the appeal in any way.)
8. General Motors of Canada et al. v. Décarie Motors et al., September 28, 2000, FCA (Desjardins, J.A., Létourneau J.A., Noël J.A.) Section 57 Expungement Action/Appeal/Section 12(2)/Effect of Mis-statements/Distinctiveness/ Compelling Disclaimer
Appeal from Trial Division's decision that refused to expunge the respondent's registration for DECARIE and to compel the respondent to disclaim the right to the exclusive use of the word DECARIE in its trade mark DECARIE LOGO DESIGN. During prosecution of its trade mark application, the respondent had overcome a surname objection by relying on s. 12(2) of the Act. The Trial Judge disregarded any argument concerning the mark being a surname made in the course of the expungement action, because he was satisfied that the Registrar's decision on that point was not unreasonable.
Held: Appeal allowed. The registration for DECARIE will be expunged and the respondent is ordered to file a disclaimer to the exclusive right to use DECARIE with respect to its registration for DECARIE LOGO DESIGN, failing which the latter registration will also be expunged.
The appellant's first ground was that the mark was not registrable and the registration was invalid ab initio because the respondent made mis-statements and fraudulent misrepresent-ations when responding to the s. 12(1)(a) objection. The Court found this ground to be unsuccessful because the respondent answered the questions put to him by the Registrar directly and it has not been established that the answers were false. The legislation does not require the respondent to declare facts other than those related to the questions put to him; he is not obliged to address issues in advance of them having been raised.
The appellant's second ground was that the mark was not distinctive at the time these proceedings were commenced. The Trial Judge erred in failing to conduct an independent analysis of the evidence before him on this issue. He should not have relied on the reasonableness of the Registrar's decision as that decision dealt with a different material date and was based on different evidence. The Court of Appeal considered the evidence and noted that the use of the mark DECARIE, standing alone, has been week, if not absent. The fact that DECARIE is the name of a well-known boulevard in Montréal and is used in the name of two competitors' businesses militates against a finding that DECARIE, standing alone, had acquired such a distinctiveness as to refer to the respondent's wares and services. Although exclusivity is not a requirement for distinctiveness, the non-exclusive use of a mark is one of the circumstances to be taken into account in assessing distinctiveness.
9. Canada Post v. Post Office, October 5, 2000, FCTD (Tremblay-Lamer J.) Challenge to Section 9 Official Marks/By Way of Appeal or Judicial Review/Licensing of Official Marks
Appeal by Canada Post from the decision of the Registrar of Trade-marks to publish MAILSORT as an official mark adopted and used by the British Post Office. Appeal filed under s. 56 of the Trade-Marks Act by way of Notice of Application. Leave of the Court had been obtained to amend its Notice of Application to add judicial review under s. 18.1 of the Federal Court Act as a procedural basis for challenging the validity of the official mark. The bases for appeal and judicial review were that the Post Office was not a public authority in Canada, and that it had neither adopted nor used the mark for wares and services in Canada. Also, it was argued that the mark MAILSORT is or would be unlawful and therefore could not accrue to the benefit of the British Post Office for various reasons (s. 6, 11 and 7(b) of the Trade-marks Act and s. 58(1) and (2) of the Canada Post Corporation Act were pleaded).
Held: The Judge found that there is some uncertainty as to the appropriate procedure for challenging a decision of the Registrar to publish an alleged official mark. Having said this, the Judge went on to opine that the judicial review route appears to be more appropriate but that he would leave this point to be decided by the Court of Appeal; later, however, he stated that Canada Post had standing to request the present appeal. As for the test for "public authority", the term was not restricted to Canadian entities. However, the Post Office was found not to have adopted and used the mark in Canada, and the appeal was granted on this basis. The Post Office had not itself used the mark in Canada, but argued it had been used in Canada through licensees. The Judge was of the view that s. 9(2) provided a code for the use of official marks and that although this subsection permitted another party to use an official mark, it did not deem that use to accrue to the benefit of the owner of the official mark. As for s. 50, the Judge opined that it could not be inferred to apply to official marks. Ultimately, however, the Judge concluded that "even if such interpretation was possible", the evidence did not show any use of the mark in Canada by the Post Office or its alleged Canadian licensees prior to the date of the publication. Accordingly, the Registrar erred in accepting that the Post Office had adopted and used the mark in Canada, and the public notice of the official mark MAILSORT was ineffective to give rise to any rights or prohibitions under s. 9 and 11 of the Trade-marks Act.
10. Dole Food and Dole Foods of Canada v. Nabisco, October 6, 2000, FCTD (Heneghan J.) Section 57 Expungement/Declaration of Ownership/Quia Timet Interlocutory Injunction/ Woods Exception/Irreparable Harm
In an action for a declaration that Dole Foods owns the trade mark FRUIT BOWLS and for an order striking the defendant's registration for FRUIT BOWLS, the defendant moves by counterclaim for a quia timet interlocutory injunction to prevent the plaintiffs from using FRUIT BOWLS.
Held: Motion for interlocutory injunction dismissed because the defendant has not shown irreparable harm.
Both parties argued that the "Woods" exception should be applied in this case, namely that the question of serious issue to be tried should be determined by the motions judge on a full review of the case on the merits, since the result of this motion will effectually amount to a final determination of the action. The defendant argued that failing to grant an injunction would result in it losing its exclusive right to use its mark since the concurrent use would result in the mark not being distinctive of any one source. The plaintiffs argued that granting the injunction would result in such hardship to it that there would be no benefit for it to proceed with the action as it would have had to already change its brand strategy and repackage its entire inventory. The Court however considered it unnecessary to go beyond a general assessment of the merits of the case.
In a quia timet application, the Court may infer evidence of irreparable harm where a sufficient evidentiary foundation has been established. Such a foundation has not been laid here because there is no evidence as to actual sales, projected sales and projections as to the impact on the defendant's market share. The Court was not persuaded that any loss that might occur to the defendant cannot be compensated. If the defendant lead evidence as to historical market shares enjoyed by both parties in relation to the specific consumer markets targeted by each and then projected the effects on that market of the concurrent sales of similar products, then surely it would be possible for persons skilled in the accounting and actuarial professions to project a figure as to the possible monetary loss which would be suffered by the defendant.
11. Glaxo Wellcome v. Novopharm, October 10, 2000, FCTD (O'Keefe J.) Opposition Appeal/Distinguishing Guise/Section 13(1)(a) Trade-marks Act/Standard of Proof
Appeal from Registrar's decision refusing registration of the applicant's distinguishing guise pursuant to an opposition by the respondent. The distinguishing guise is a tablet in the shape of a shield with 6 sides.
Held: Appeal dismissed because the applicant has not shown that its distinguishing guise had become distinctive as of the date of its trade mark application. The Registrar erred in holding that the applicant is required to show that most adult Canadians recognize the applicant's distinguishing guise as such. The standard of proof for s. 13(1)(a) is the same as that for s. 12(2). Because the applicant's professional medical witnesses were uncertain about the distinctiveness of the shape of the tablet, it was incumbent on the applicant to lead evidence from patients to satisfy the onus to prove on the balance of probabilities that its wares had become known by the shape alone.
12. Sullivan Entertainment v. Anne of Green Gables Licensing Authority, October 19, 2000, FCTD (Muldoon J.) Challenge to Section 9 Official Marks/Declaratory Relief by Way of Action
Motion to set aside order of ASP Giles dismissing the defendants' application for an order pursuant to r. 221, and to strike certain paragraphs of Statement of Claim without leave to amend. In the action, the plaintiff sought a declaration that the defendants did not qualify as a public authority and therefore were not entitled to benefit from official mark protection under s. 9 of the Trade-marks Act. The plaintiff asserted that it was not seeking to challenge the correctness of the decision of the Registrar to publish the marks, but rather whether the defendants were entitled to s. 9 protection. The defendants argued that it is improper for a third party to challenge s. 9 by way of action.
Held: The Court has jurisdiction to hear the motion pursuant to s. 55 of the Act, and r. 64 makes it abundantly clear that the Court has power to grant a binding declaration. As the plaintiff was not seeking the revocation of an official mark nor to challenge the implicit decision of the Registrar, there was no jurisprudence provided that undermined its ability to bring an action for declaratory relief. Decision of the prothonotary - the appeal of the prothonotarial decision was dismissed, because that decision was correct and because it directly addressed matters vital to the final issues in the claim. Decision de novo - since the defendant had yet to demonstrate sufficiently that it constituted a public authority and was entitled to s. 9 protection, it was not "clear and obvious" that the claim would not succeed. Therefore the motion to strike paragraphs from the Statement of Claim was dismissed.
13. Michelin v. Continental General Tire Canada, October 20, 2000, FCTD (Pelletier J.) Opposition Appeal/Confusion/Surrounding Circumstances/Secondary Trade Marks
Appeal from Registrar's decision that rejected oppositions to the registration of 8 trade marks that include the letter X, including XP 2000 and XT Design. The oppositions were based on the likelihood of confusion with the appellant's "X marks", such as XF and XM. All of the marks are for use in association with tires.
Held: Appeal dismissed. The evidence filed on appeal does not add anything of significance to the evidentiary record; therefore the Court ought not to interfere with the Registrar's findings of fact. The Registrar did not err by considering the lack of actual confusion despite many years co-existence. The Court agreed with the appellant that if the Registrar's references to the marks being used as secondary marks was meant to indicate that the pattern of using the applied for marks with a primary mark prevented confusion, then the Registrar erred. However, the Court interpreted the Registrar's comments regarding primary and secondary marks as a recognition that the nature of the various X marks is such that consumers would look for a clearer identification of the source of the goods, the X marks themselves being more suggestive of a particular model of a tire than of the origin of the tire. This is a result of the marks being composed of letters only, or of letters and numbers.
14. Sim & McBurney v. Gesco Industries and Reg. TM, October 26, 2000, FCA (Rothstein J.A., McDonald J.A., Sharlow J.A.) Section 45 Appeal/Registrar's Jurisdiction/Use with Services/Services Connected with Wares
Appeal from Trial Judge's decision reversing the expungement of a registration under s. 45. The issue is whether the registrant's trade mark STAINSHIELD is used in association with "services of stain resistant treatment for application to carpets, rugs". The Trial Judge found that the Registrar had exceeded her jurisdiction under s. 45 when she went on to decide if there was use of the mark in association with services after finding that there was evidence of use of the mark.
Held: Appeal dismissed. The Registrar did not exceed her jurisdiction in considering whether the use described was in association with wares or services. However, the Registrar did err in concluding that the mark was not used in association with services. The Registrar made a legal determination that a mark used in association with services applied to a product before it is sold constitutes use with wares and not services, or to put it another way, that to qualify as use of a mark with services, the services must be rendered directly to the public. Nothing in s. 4(2) restricts services to those that are independently offered to the public or that are not ancillary or connected with wares. A mark is deemed to be used in association with services if it is displayed in the advertising of the services and that is what was in evidence here. STAINSHIELD is not a brand of carpet or stain resistant solution; it is the name of a process of applying a solution to certain of the registrant's carpets.
15. Cullman Ventures v. Quo Vadis International, October 26, 2000, FCTD (Lemieux J.) Section 45 Appeal/Mark Used to Distinguish Registered Wares/Composite Marks
Appeal from Registrar's decision under s. 45 maintaining registrations for LE PLANNING HORIZONTAL DE VOTRE ANNÉE D'UN SEUL COUP D'OEIL and YOUR YEAR'S HORIZONTAL PLANNING AT A SINGLE GLANCE for agendas.
Held: Appeal allowed. The Registrar was clearly wrong in deciding to maintain the registrations because the evidence does not establish use of the registered marks within the meaning of s. 2 and 4. The dominant and distinguishing mark set out on the cover page and introductory page of the agendas is L'AGENDA PLANNING (or AGENDA PLANNING). The registered marks appear on certain pages in the interior of the agendas. The registrant therefore uses L'AGENDA PLANNING/AGENDA PLANNING, not the registered marks, to distinguish its agendas.
In addition, because the registered marks were always used immediately following "DIARIZON"", i.e. in the same phrase, the Registrar erred in deciding that the two parts of the phrase would be perceived as separate marks. The Registrar should have applied the test in Registrar of Trade-marks v. Compagnie Internationale pour L'Informatique CII Honeywell Bull, S.A. et al., 4 C.P.R. (3d) 523. The differences between the marks as used (e.g. DIARIZON" YOUR YEAR'S HORIZONTAL PLANNING AT A SINGLE GLANCE) and the marks as registered are not so unimportant that an unaware purchaser would be likely to infer that both identify goods having the same origin.
16. Cullman Ventures v. Quo Vadis International, October 26, 2000, FCTD (Lemieux J.) Opposition Appeal/Descriptiveness
Appeals from opposition decisions that refused four applications to register DAY-AT-A-GLANCE, WEEK-AT-A-GLANCE, MONTH-AT-A-GLANCE, and YEAR-AT-A-GLANCE for calendars etc. on the ground of descriptiveness.
Held: Appeals dismissed. The marks convey a specific descriptive and direct reference to a physical feature of the wares, as well as to their function.
17. Ontario Association of Architects v. Association of Architectural Technologists of Ontario, October 26, 2000, FCTD (McKeown J.) Challenge to Section 9 Official Marks/By Way of Appeal or Judicial Review/Licensing of Official Marks
Application for an order reversing the Registrar's decision to publish an official mark on behalf of the AATO, and further that the publication was void ab initio and had no force and effect. Although the applicant stated in its submissions that the application was brought by way of an appeal under s. 56 of the Trade-marks Act and r. 300, the application, itself, did not make a reference to an appeal under s. 56.
Held: The applicant was not a party to the matter before the Registrar, and therefore had no standing by way of appeal. However, the applicant had an interest in the Registrar's decision because s. 11 prohibits any person from using, as a trade mark or otherwise, any official mark. Since no other avenue of appeal was available, the matter was properly before the Court as an application for judicial review under s. 18.1 of the Federal Court Act. The applicable standard of review would be the same regardless of whether the proceeding was an appeal or judicial review: namely, reasonableness simpliciter. After reviewing case law considering the test for public authority status, the Court found that the AATO was a public authority. The Court, in considering whether the mark had been adopted and used as an official mark, noted the differences between a trade mark and an official mark. One of these differences was that official marks cannot be proposed marks, and accordingly official marks must actually have been adopted and used by the applicant at the time public notice is requested. Evidence of use and adoption is not required at the time the request for publication is filed with the Registrar. The onus lay on the applicant to provide some evidence to substantiate its objection. There was some evidence that the AATO had adopted and used its mark as of the date of request for public notice by itself and through its members as licensees. Accordingly, the application for an order reversing the decision of the Registrar was dismissed. Costs to the AATO.
18. Sprint Communications et al. v. Merlin International Communications, November 10, 2000, FCTD (O'Keefe J.) Trade-mark Infringement/Quia Timet Injunction/Domain Names
Action for trade mark infringement. The plaintiff has registered and used the trade mark SPRINT in Canada since 1985. In 1987, the defendant sent out letters in which it referred to one of its divisions as Sprint Canada. In 1988, the defendant registered the name "Sprint Canada" as a trade name in Montréal.
Held: Quia timet injunction granted to prevent the defendants from infringing the plaintiff's registrations. In determining if there was infringement, the Court considered the factors listed in s. 6(5). It concluded that the SPRINT name does not have an inherent distinctiveness but that the plaintiff's trade mark had acquired distinctiveness through use and advertisement. It held that the nature of the parties' services are different because it was not clear from the evidence that the defendant ever carried on any services in connection with the provision of telecommunication services. The Court gave more weight to the surrounding circumstance that the defendant's customers found that the mark SPRINT and the trade name Sprint Canada were confusing.
The Court refused to issue an injunction to restrain the defendants from adopting a domain name that is confusing with the plaintiff's marks. Although the evidence showed that the defendant did register the domain names "sprintcanada.com" and "sprintus.com", the names were only used as e-mail sites and there is no evidence that the defendant offered services under these names. Because of this, the Court found that no infringement had occurred by means of the domain names.
19. Bayer v. Novopharm, November 14, 2000, FCA (Strayer J.A., Rothstein J.A., Sexton J.A.) Opposition Appeal/Public Interest in Accuracy of Advertisement of Trade Mark Application
Appeal from Trial Division's decision setting aside the rejection of an opposition to an application to register the colour dusty rose applied to the surface of a round tablet. The Trial Judge held that the Registrar erred in holding that certain deficiencies in the advertising of the proposed trade mark application did not invalidate the application. In the advertisement, the word description of the mark referred to it as the colour dusty rose while the drawing depicted it as blue. The Registrar considered this error to have been overcome by the fact that the opponent was not confused. The Trial Judge concluded that regulations for advertising require strict compliance and mistakes cannot be waived by some test of probability of confusion as there is a public interest in the accuracy of the registration process.
Held: Appeal dismissed. The Registrar's decision was unreasonable as it treated the accuracy of advertising of a trade mark application as a matter of interest only to the parties to the opposition proceeding.
20. Lexus Foods v. Toyota, November 20, 2000, FCA (Linden J.A., Strayer J.A., Malone J.A.) Opposition Appeal/Confusion/Coined Words/Famous Marks/Mens Rea
Appeal from decision that overturned the rejection of an opposition. The issue is whether use of the mark LEXUS in association with canned food products is likely to cause confusion with the mark LEXUS as registered for automobiles. The Trial Judge held that confusion was likely based on survey evidence that 6 out of 10 Canadian adults recognize LEXUS as indicative of a car.
Held: Appeal allowed. The Trial Judge failed to give considerable weight to the differences between the wares. He also ignored the differences in the nature of the trades. The survey evidence does not establish that there was any confusion between the two products. Although the Trial Judge gave less weight to the differences in the wares because LEXUS is a coined word, there is evidence that many unrelated businesses use the name LEXUS. The Trial Judge gave too much weight to the fact that LEXUS is a coined word; coined words can be used by others as long as no confusion results. The Trial Judge's reliance on the finding that the LEXUS mark was either famous or becoming so led him to be overly protective of it. There is no obligation for the Court to nurture up-and-coming marks to preserve their rising reputation as implied by the Trial Judge. Although famousness is a factor to be considered, it does not protect a trade mark absolutely; otherwise the fundamental concept of a trade mark being granted in relation to certain wares would be rendered meaningless. The fact that the applicant chose to use the word LEXUS because it was a quality name may be a factor to consider with respect to damages in an infringement action but it cannot have much weight, if any, in the context of dealing with whether or not confusion is likely. There is no doctrine of mens rea in the field of trade marks.
21. Societé Nationale des Chemins de Fer Francais v. Venice Simplon-Orient-Express and Reg. TM, November 22, 2000, FCTD (McKeown J.) Section 45 Appeal/Incidental or Ancillary Services/Use within Chain of Distribution
Appeal from s. 45 decision that maintained two registrations that covered travel services, namely railway and passenger service. The railway and passenger services are performed in Europe but the Registrar held that booking the services in Canada constituted performing the travel services, as that phrase is broad enough to encompass incidental or ancillary services such as ticketing and reservations. He also held that Canadian travel agencies are acting as agents for the registrant when they book services. The evidence included invoices bearing the trade marks that were issued to the travel agencies by the registrant.
Held: Appeal dismissed. Services are to be interpreted broadly. The Registrar's decision was reasonable. Evidence of a sale to the ultimate consumer is not required; any evidence of use of the marks along the chain of distribution is sufficient.
(c) Practice
1. Manufacturers Life Insurance v. Guaranteed Estate Bond, February 8, 2000, FCTD (Dubé J.) Show Cause Hearing/Injunctions by Prothonotaries/Contempt - Corporate Defendant and Officers or Directors
Show cause hearing launched against corporate defendant and its sole director. Previously (in October 1998), an injunction had been granted by a prothonotary by way of judgment by default. Neither the corporate defendant nor the director filed a defence or attended at the show cause hearing. The Court raised the issue of the validity of an injunction granted by a prothonotary in view of r. 50(1)(e) of the new Federal Court Rules (effective April 25, 1998).
Held: The new Rules make it quite clear that a prothonotary does not have the jurisdiction to issue an injunction. Prothonotaries are no longer granting injunctions by way of default judgment. However, the proper forum to challenge the validity of an injunction is not at the show cause hearing. Rather, the appropriate course of conduct is to challenge it through the available legal channels rather than refusing to obey it. The evidence at the hearing made it clear that the corporate defendant and its only director were and remained in contempt of Court. Where a corporate defendant is found in contempt of Court, responsible officers of the defendant who have aided and abetted in its breach may also be found in contempt. R. 472 provides that where is a person is found in contempt, a judge may order imprisonment for a period of five years, a fine, and costs. Counsel for the plaintiff asked for fines of $5,000. each, plus costs on a solicitor-client basis, all payable within 30 days. The Court considered this to be reasonable, and made it an order of the Court.
2. Merck et al. v. Apotex, March 7, 2000, FCTD (MacKay J.) Contempt of Court
The trial judge issued reasons which provided that the defendant's product was infringing and that the plaintiff was entitled to a permanent injunction and an order for delivery up. Counsel were invited to consult and make submissions as to the appropriate form and content of the final judgment. Apotex made sales during the period of time between when the reasons were filed and when the final judgment was issued. Also, after an interim stay pending appeal was lifted, and before the show cause Order issued, Apotex both instituted a "no returns" policy and facilitated the efforts of its customers to sell their existing stock of the infringing product in the marketplace.
The Court held that by selling in the period between the day the reasons were issued and the final judgment was issued Apotex and its President and CEO, Dr. Sherman, were in contempt of court. They had not disobeyed any process or order of the Court, or of a Judge, because no injunction by order of the Court was issued until one week after the reasons were issued. However, they had engaged in conduct which interfered with the orderly administration of justice, or that impaired the authority or dignity of the Court, giving rise to contempt. The Court relied on Baxter v. Cutter (1983) 75 C.P.R. (2d) 1 (SCC) at 8 in which Dickson J. held that any action which would defeat the purpose of an anticipated injunction undermines that which has already been given judicial approval. Such conduct subverts the processes of the Court and may amount to contempt of court. Dr. Sherman was the "directing mind" of Apotex and as his decisions were the key to the conduct of Apotex and its other officers and staff, he was found to have committed contempt personally.
The Court held that the facilitation of sales of the infringing product was also contempt. Apotex had argued that a patent right is nothing more than the right to earn all the profits derived from the invention's use and that so long as the patent holder's right to receive such profits was upheld the administration of justice would not be adversely affected. The Court said that the primary substantive right of a patent owner is to the exclusive use of the patented invention and that by facilitating the sale of the infringing product it had interfered with the orderly administration of justice and had impaired the authority and dignity of the court. Apotex was found in contempt for these activities. Dr. Sherman was not found to be in contempt as he had merely directed the "no returns" policy.
3. Veuve Clicquot Ponsardin Maison Fondée en 1772 v. Les Boutiques Cliquot, March 14, 2000, FCTD (Morneau P.) Motion for a Divided Trial
Motion under r. 107 for an order postponing discovery and the determination of remedial issues until after discovery and trial of the question of liability.
Held: The motion was dismissed. The test on a motion under r. 107 is whether severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits. The defendant's argument that the plaintiff's case on the merits was weak and that the case would likely not proceed further was not sufficient to satisfy the test. The Court is not to assess the merits on a r. 107 motion as it is not a motion for summary judgment. The defendants had not adduced any evidence as to the expense and effort required to determine the issue of quantum.
4. Long Shong Pictures (H.K.) et al. v. NTC Entertainment, May 1, 2000, FCTD (O'Keefe J.) Contempt Hearing Conducted After Bankruptcy
The Prothonotary had issued an order requiring one of the corporate defendants to present any defence it may have to the charge that it knowingly disobeyed an order of the Court by selling a video compact disk which it had been enjoined from selling. Prior to the hearing, the corporate defendant had filed an assignment in bankruptcy. O'Keefe J. held that the contempt hearing could proceed notwithstanding that a stay of proceedings had been issued in bankruptcy. Leave of the Court in bankruptcy was not required. The Court was held to have power to see that its orders are followed. At this stage of the hearing, the Court held that there was no concern with respect to the enforcement of a claim provable in bankruptcy.
5. Mark1 Marketing v. Intense Software et al., August 8, 2000, FCTD (Hargrave P.) Motion to Strike Statement of Claim/Officers and Directors as Individual Defendants/Particulars
Motion for alternatives, being: to strike out the whole statement of claim; to strike out references to three of the individual defendants; for various particulars; and, if required, for an extension of time to file a defence. The action claimed infringement of a patent process for printing illustrations in colour. The invention was alleged to be embodied in the defendant's computer software called "Powertone". The action against two individual officers claimed that they knowingly and deliberately directed the defendant corporation to pursue the development and marketing of the Powertone software after becoming aware of the infringement. The action against two directors claimed that they supported their corporate officers, knowing of or being indifferent to the infringement. The support was not particularized. (Note, the motion did not refer to one of the directors.)
Held: Motion denied in part, allowed in part.
Test to strike statement of claim is very difficult test, for in essence defendant must establish that the claim is futile. Although the statement of claim contained no allegation that anyone had practised the Powertone method of reproduction, the defendants were inducing or procuring infringement of a method claim by selling by way of the Powertone software the plaintiff's patented method of colour printing. The corporate defendant was not merely selling a piece of software, and the argument for striking out the whole of the statement of claim was "specious" and "errant nonsense", as per Windsurfing International v. Trilantic (1986), 8 CPR (3d) 241 (FCA).
Motion to strike references to officers denied. Sufficient particulars had been pleaded to put the individual defendants on notice as to the kind of control or personal conduct complained of by the plaintiff. However, the facts pleaded in respect of the directors were insufficient; they were far from the concept of aiding and abetting an infringement. The references to the directors were struck, but without prejudice to any suitable amendment which the plaintiff might wish to make.
The motion for particulars was denied, except in respect of one passage in the statement of claim. The defendants had not filed an affidavit setting out that the particulars were required for pleading and that they were not within the knowledge of the defendants. Further particulars might be requested for trial, but were considered premature.
Plaintiffs granted 21 days to furnish the particular and any amended statement of claim. Defendants to file defence within 21 days from that date.
6. Eli Lilly et al. v. Apotex, August 10, 2000, FCTD (Hugessen J.) Production of Documents
The defendants sought production of documents relating to the state of knowledge of prior art on the part of inventors or of the patentees at the time of the issue of the patents in suit and of foreign file wrapper material.
Held: The motion was dismissed. As the test for obviousness and inutility are object tests, determined from the perspective of a person skilled in the art, the actual knowledge of the inventor or patentee was held to be irrelevant. The foreign file wrapper was also held not to be relevant to the issue of prior art on this basis.
7. Polygram Records, Hong Kong, and Polygram Canada v. Kin Mo Eng et al., August 30, 2000, FCTD (Pelletier J.) Application for Reconsideration/Application for Extension of Time to Bring Application
Application pursuant to r. 397 for reconsideration of an order dismissing plaintiff's claim for failure to file further submissions as required in the course of status review of the claim. Application based on ground that failure to file submissions was inadvertent. Motion Record contained no written submissions. The motion was made outside the time provided by r. 397 and had not been served on the defendants. Plaintiffs sought an order extending the time for making the application, as well as an order dispensing with service of the motion on the defendants. The order dismissing the claim was received by the plaintiff's counsel six days after the date of the order.
Held: Court was prepared to deal with motion on its merits, and therefore an order extending the time to bring the application to reconsider was granted. However, the application for reconsideration was dismissed. R. 397 applies to a mistake or error by the Court and not to a mistake by counsel. Here, the failure to respond to a filing requirement due to inadvertence was the only ground advanced, and this was not sufficient.
8. Louis Vuitton Malletier et al. v. Bags O'Fun et al., August 31, 2000, FCTD (Pelletier J.) Anton Piller Order/Service/Breach of Order/ Unlawful Seizure
Review of execution of Anton Piller Order.
Held: The plaintiffs had no legal authority to seize the goods except under the terms of the order. The failure to serve the order by leaving it with the persons in charge of the vendor stalls is an instance of non-compliance with the order. The fact that the persons in the stalls would not accept service is irrelevant; service is only a matter of acceptance in the case of solicitors. The documents should have been left with the occupants. The effect of the lack of service is not attenuated by the consent of the occupants to the search of the stalls. The order required the plaintiffs to seek review of their execution within 14 days of service; the failure to serve the order does not avoid the obligation to seek review as the time begins to run from the date of the seizure. The goods will be returned to the defendants, even though the plaintiffs claim that they are counterfeit, because to ignore the unlawful seizure would be to condone it.
9. Merck & Co. and Merck Frosst Canada v. Nu-Pharm, Bernard Sherman, and Richard Benyak, September 11, 2000, FCTD (Muldoon J.) Injunctions and Non-Parties/Personal Liability of Directors and Officers/Particulars
Appeal (pursuant to r. 51) from order of prothonotary dismissing a number of motions by the defendants to strike several paragraphs in the statement of claim.
The motion arose from an action initiated by the plaintiffs in which they alleged that the three moving parties had breached an injunction issued against Apotex in 1994. The injunction did not enjoin the moving parties in their individual capacities, that is when they are not acting as officers, directors, servants, agents, employees, or otherwise of Apotex. In the main action, the plaintiffs claimed that the moving parties knowingly and willfully infringed a patent, and that Messrs. Benyak and Sherman were personally liable too. The plaintiffs also alleged that the moving parties infringed in full knowledge of the injunction against Apotex for similar activities.
Held: Motion dismissed. The plaintiffs have pleaded that the moving parties, acting as Apotex, breached the injunction. The fact that the injunction was not made in rem is immaterial as far as the relevant law is concerned. Officers and directors need not act outside the scope of their corporate duties before being fixed with personal liability for patent infringement. The paragraphs setting out allegations in respect of the corporate defendant's history and general activities were not "clearly irrelevant" and therefore were not struck. The paragraphs dealing with regulatory misdeeds of the corporate defendant could speak to the issue of infringement and so were not struck. Other paragraphs were, to a degree, imprecise but that was considered acceptable in pleadings at that stage. What the corporate defendant sought was a detailed roadmap going beyond the laying out of the particular cause of action and the defining of the nature of the case it had to meet. Accordingly, the prothonotary made no error in law in refusing to order particulars.
10. Anchor Brewing v. Sleeman Brewing & Malting, September 14, 2000, FCTD (MacKay J.) Discovery/Relevance of Questions Relating to Plaintiff's Activities in U.S.
Appeal from portion of decision of prothonotary declining to order that certain questions asked in discovery be answered by the plaintiff. The questions arose in the context of an action for trade mark infringement and passing off. The mark at issue was STEAM for beer. The defendant had elected to proceed by oral examination for discovery before serving and filing a defence. The questions at issue all related generally to the plaintiff's activities in the U.S., principally in relation to the plaintiff's trade mark application, registration, litigation and enforcement actions in that country.
Held: Although questions relating to the plaintiff's business volumes and notoriety with Canadians in the U.S. are appropriate in relation to facts pleaded that rely on that business and reputation with Canadians travelling in the U.S., the questions at issue relating to matters concerning registration of trade marks in the U.S. and activities arising therefrom were not relevant to the facts and issues pleaded in the statement of claim. Although the defendant was entitled to ask questions in relation to claims of confusion with the plaintiff's interests in unregistered trade mark rights in Canada, the questions at issue were not relevant to this.
11. Almecon Industries v. Anchorteck et al., September 25, 2000, FCTD (Dawson J.) Section 7(a) of Trade-marks Act/Actionable Statements to Third Parties in Settlement Agreements
Appeal from order of prothonotary, by which defendant was granted leave to amend its counterclaim and plaintiff was required to produce a settlement agreement it concluded with a third party. The plaintiff had entered into an agreement with a third party, which contained a term that the third party was required to cease purchasing non-impugned product from the defendant and to begin purchasing product from the plaintiff. The agreement also contained a provision that if the defendant were successful in the present action, e.g. so that its product was found not to infringe the plaintiff's patent, then the provision in the settlement agreement requiring the third party to cease purchasing product from the defendant would be of no force and effect, and the third party would no longer be required to purchase product from the plaintiff. The plaintiff argued that the terms of the settlement agreement could not support a cause of action under s. 7(a) of the Trade-marks Act.
Held: Appeal dismissed. Premise of settlement agreement will be proven false if defendant obtains judgment that its product does not infringe plaintiff's product. False or misleading statements made by a patentee to third parties, tending to discredit the competitor's business, wares or services including statements that the product of a third party infringes the patent of the patentee, are actionable under s. 7(a) of the Act. The amendment being allowed, the settlement agreement must be produced as it is the primary documentary evidence upon which the defendant will rely at trial.
12. Society of Composers, Authors and Music Publishers of Canada v. Landmark Cinemas of Canada, October 2, 2000, FCTD (Aronovitch P.) Code of Professional Conduct/Contacting A Represented Party Adverse in Interest/Conflict of Interest/Removing Counsel
Motion by defendant to remove Gowlings as the plaintiff's solicitors of record because of direct telephone communications that took place unbeknownst to defendant's counsel between a member of Gowlings and a director of the defendant and two members of his staff. A motion is pending to compel the re-attendance of that director to answer questions refused on discovery. The telephone calls to the defendant were made to inquire about matters concerning the very information sought to be compelled by the plaintiff in the discovery. The enquiries were made by a student-at-law who had been instructed to obtain certain information from publicly available information. She was not aware that there was ongoing litigation and ultimately independently decided to make the phone calls in pursuit of the information. She identified herself as a lawyer with Gowlings but did not disclose her firm's client in the course of the telephone conversations.
Held: Motion dismissed. The applicable test for removing counsel is whether on the facts, a fair-minded and reasonably informed member of the public would conclude that the proper administration of justice requires the disqualification of the solicitor of record. The right to counsel of one's choice ought not to be supplanted without regard to the character, gravity and consequences of the impugned conduct. While the student's conduct was clearly in error, it was unwitting and not deceitful. In addition, it was done without the knowledge of her instructing counsel and did not result in the obtaining of any information relevant to the litigation. As soon as instructing counsel learned of the calls, the student was advised of their impropriety and the defendant's counsel was contacted and an apology was offered. The student's actions were not in any way part of a deliberate scheme to circumvent the court's process and the defendant has not made out any real or apprehended mischief, injustice, or harm to the rights of the parties stemming from the prohibited communication. The defendant's director's conduct is difficult to reconcile as it appears that he may have realized that the student's enquiries were improper prior to returning her call.
13. Canadian Olympic Association v. Olymel and the Registrar of Trade-marks, October 19, 2000, FCTD (Lemieux J.) Costs/Assessment
Olymel by motion under r. 369 sought several orders concerning costs awarded to it by the Court in resisting two appeals by COA made under s. 56 of the Trade-marks Act, challenging two decisions of the Registrar granting Olymel's two trade mark applications. Olymel sought: (1) under r. 419 and 420, a lump sum cost award in lieu of any assessed costs; (2) under r. 400(4), the doubling of its party-and party costs from the date it made an offer to settle the appeals; (3) under r. 400(5), the fixing by the Court or the giving of directions by the Court to the assessment officer that the costs assessed under Tariff B be the maximum number of units in Column IV; and (4) the inclusion of specific costs and disbursements.
Held: A lump sum cost award was not issued in lieu of assessment. Detailed analysis of the two Bills of Costs delivered by Olymel as part of its motion materials was a cumbersome way to deal with the assessment. The assessments should take place before an assessment officer as contemplated under r. 405, subject to the following directions. Olymel was not entitled to the doubling of its costs from the date of the offer to settle. Olymel's offer contained no element of compromise although it was made after Olymel had filed its memorandum of fact and law which was not so persuasive and convincing as to render COA's continuation of the appeal without merit. Also, r. 420 applies where the offer to settle is not revoked. Olymel's offer to settle terminated at the hearing of the appeals before the Court. In any event, the words "unless otherwise ordered by the Court" under r. 420(2) confer a discretion upon the Court to award or direct less than the doubling of party-and-party costs from the date of service of the offer, and in the circumstances Olymel was not entitled to the doubling of its costs. The Court refused to direct that the assessment officer assess Olymel's bills of costs at the maximum number of units in Column IV of Tariff B. The COA's case was not a weak one, and Olymel's offer to settle was not genuine in that it contained no element of compromise. Also, the amount of work was a proper consideration for the assessment officer to take into account in determining the scale for the number of units under Column III. All other cost issues raised shall be determined by the assessment officer.
14. David Chao v. Costco Canada and E'Lite Optik, November 1, 2000, FCTD (Morneau P.) Confidentiality Order
Motion on consent for Confidentiality Order.
Held: Motion denied, with leave to reapply. The Court was not satisfied that the draft Confidentiality Order was in accordance with the teachings of the Court in Levi Strauss & Co. et al. v. Era Clothing, unreported decision of Evans J., July 23, 1999.
15. Kirkbi and Lego Canada v. Ritvik Holdings and Ritvik Toys, November 1, 2000, FCTD (Muldoon J.) Implied Undertaking Rule/Special Circumstances/Destroyed Documents
Appeal by the defendants against an order of Lafrenière J. denying defendants relief from implied undertaking rule on discovery. Defendants sought an order quashing decision of the prothonotary and permitting them to make certain publicly obtainable documents available to local counsel in parallel litigation and proceedings in which Ritvik and Lego are parties in other jurisdictions. The particular set of documents which formed the subject matter of the motion presented an unusual dilemma in that while individually the documents might be publicly available, the particular configuration of the collected documents was not. This lead to the question whether it was the set of documents that was protected, or each individual production. This provided an additional conundrum when it was considered that several of the documents sought were no longer publicly available, having been destroyed by the courts which had held them.
Held: Appeal allowed in part. Special circumstances existed because a number of the documents had been destroyed. The documents were publicly available and the defendants had attempted to obtain them, but through no fault of their own had found it impossible to do so. As the only copies which remained were in the possession of the plaintiffs, the individual destroyed documents were not under the umbrella of the implied undertaking rule. Their production was ordered because a greater injustice would be suffered by the defendants in knowing that the documents existed but had been destroyed, than by the plaintiffs who were aware of their contents. The Court dismissed the remainder of the appeal, since the defendants had not demonstrated that any of the documents from related hearings in other international jurisdictions were no longer available from the respective court registries. Therefore, the prothonotary rightly concluded that the set of documents produced on discovery is protected by the implied undertaking rule.
16. Merck & Co. and Merck Frosst Canada v. Apotex and Apotex Fermentation, November 6, 2000, FCTD (Tremblay-Lamer J.) Motion to Strike or Obtain Particulars/Precise Method Employed by Defendants/Inducement to Infringe/Bare Allegations of Sale of Infringing Product/Injunction Binding Non-Parties
Appeal from Orders of Prothonotary which collectively disposed of the motion filed by the defendants seeking either to strike or obtain particulars with respect to certain paragraphs of the fourth amended Statement of Claim.
Held: Appeal dismissed in part, allowed in part. The plaintiffs could not be expected to give particulars as to the precise method employed by the defendants, at least not before discovery, nor were they required to provide a detailed roadmap which went beyond laying out the particular cause of action and the nature of the case the defendants had to meet. The plaintiffs had pleaded sufficient material facts (including an admission by the president of one of the defendants), which if proven would provide support for the conclusion that the one defendant corporation had induced the other to infringe. However, simply stating that the defendants had offered for sale and sold an allegedly infringing product was insufficient; accordingly, the plaintiffs were ordered to provide within 30 days particulars to support the allegations that the defendants continued to sell lovastin made by a number of different methods which the Minister of Health had never approved for sale. In some instances, damages based on infringing activity alone may not provide full compensation; accordingly, allegations that the defendants had obtained a considerable technology and know-how by reason of their infringing activities (which were characterized by the defendants as an additional quasi-restitutionary claim for damages) were allowed to stand. The plaintiff's prayer for a permanent injunction which would bind non-parties was not struck; the allegations were not forlorn or futile, and it is for the trial judge to determine whether the plaintiffs are entitled to such permanent injunction.
17. Havana House Cigar & Tobacco Merchants and Empress Cubana Del Tabaco v. Jane Doe et al, November 9, 2000, FCTD (Gibson J.) Discontinued Action/ Assessment of Costs
Motion centred on sole issue of costs of the plaintiffs' discontinued action against the Kozy Korner defendants and the Copa-Habana defendant.
Held: An award of costs on a solicitor-client scale, as damages, was not warranted. In respect of the Copa-Habana defendant, the Anton Piller order was not served on that defendant and no injunction was obtained against it. As a result, the undertaking as to damages given in the Anton Piller Order was simply not applicable. By contrast, the Anton Piller Order was served on the Kozy Korner defendants and a resultant interlocutory injunction against it was reviewed with them. However, although the allegations made in the Statement of Claim against the Kozy Korner defendants fell short of fraud, they were serious, and although they were never proved at trial due to the discontinuance, they were not baselessly made. Also, the allegations and the granting of the interlocutory relief did not seriously affect Kozy Korner. Accordingly, the conduct of the plaintiffs, and indeed the conduct of the Kozy Korner defendants and the Copa-Habana defendant, did not warrant an award of costs above Column 3 of Schedule B to the Federal Court Rules. The most appropriate course of action was to award costs to the Kozy Korner defendants and the Copa-Habana defendant determined solely by reference to what could be gleaned from the material before the Court and applied to the tariff. Costs fixed on a lump sum basis, in the amount of $19,000.
II . OTHER COURT DECISIONS
1. WIC Premium et al. v. General Instrument et al., September 7, 2000, ACQB (Clarke J.) Interim Injunction/Irreparable Harm
Application by the plaintiffs for an interim injunction to stop the operation of the "grey market" in the plaintiffs' territory. Under Canadian law, viewers may not use decoding equipment to watch programming purchased from anyone but a person who has the lawful right in Canada to transmit an encoded signal and to authorize its decoding. The plaintiffs claim that they are exclusively authorized and licensed by the CRTC to distribute and authorize decoding of programming signals in the plaintiffs' territory. They allege that the defendants HBO and Showtime supply their subscription programming channels to DTH satellite distributors in the U.S., which offer programming that overlaps with the plaintiffs' and is decoded by customers in the plaintiffs' territory. All of the defendants have together caused or permitted this grey market to develop although each one claims that it has no knowledge that the impugned activities are taking place.
Held: Application dismissed. The plaintiffs have established a strong prima facie case and the balance of convenience supports the granting of an injunction, but irreparable harm has not been shown. Because one can identify the number of persons in the plaintiffs' territory receiving unencrypted programming and the subscription fees they would be paying, damages can be quantified. The recent sale of WIC without any reference to its value being affected by this grey market lends credence to a conclusion that harm is reparable by a damage award.
2. Norigen Communications v. Ontario Hydro Energy, October 11, 2000, OSCJ (Blair J.) Reverse Passing Off/Interlocutory Injunction/ Irreparable Harm/Balance of Convenience
Motion for an interlocutory injunction restraining the defendant from using ONSOURCE as a trade mark or otherwise and from passing off its wares and services as those of the plaintiff. The plaintiff sells a bundle of integrated communications services under the name ONESOURCE. The defendant subsequently began selling a bundle of services including long distance telephone services under the name ONSOURCE. The parties are not presently targeting the same markets.
Held: Motion dismissed. Irreparable harm not shown. Most of the evidence as to damage is speculative. There is minimal concrete evidence, if any, as to any damage which the plaintiff has actually suffered, or is likely to suffer. It is not clear whether it is the defendant's services that are being confused for those of the plaintiff (a passing off situation, potentially) or the reverse (not a passing off situation). There is no evidence that the plaintiff has lost a single customer or a single sale, or even a sale opportunity, as a result of the defendant's marketing of its ONSOURCE services. The balance of convenience favours the defendant given the weak evidence of actual confusion and the fact that what evidence there is of confusion is more consistent with the reverse of passing off. The mere fact that there will be competition is not sufficient to justify interlocutory injunctive relief.
3. Cappuccino Affair et al. v. IJJ Enterprises, October 30, 2000, ACQB (Lee J.) Interlocutory Injunction/Trade Mark Franchise/ Irreparable Harm
Application for an interlocutory injunction to restrain the respondent from continuing to operate a business under the name of "Cappuccino Affair" because the respondent has breached its franchise agreement.
Held: Injunction granted. As the respondent continues to operate the franchise notwithstanding the termination of the Franchise Agreement and remains in breach of the Franchise Agreement, the applicant has demonstrated the prospect of irreparable harm, which cannot be adequately compensated for by an award of damages. Notwithstanding that there may not be any actual loss of royalty income to the applicant given that the respondent has not made any income before or after the breach, the loss of control over its franchise is a serious loss to the applicant. Given that eleven of thirteen franchisees have ceased paying royalties and providing weekly sales reports and that nine of the thirteen franchisees have been terminated to date, the impact of the failure to grant an injunction is far greater than the loss of royalty payments from a single isolated franchise. The cumulative loss of royalties and the unauthorized and uncontrolled operation of the terminated franchises endangers the existence of the applicant and its ability to support the rendering franchisees and to expand, develop and enhance the franchise. These losses are difficult to quantify and therefore cannot be compensated for adequately by way of an award of damages at a trial of the action. The balance of convenience favours granting an injunction.
III. OPPOSITION BOARD DECISIONS
1. British Columbia Hydro and Power Authority v. Consumers' Gas, September 11, 2000 (Bradbury) Official Marks/Section 12(1)(e)
Proposed-use application for AN ENERGY SMART HOME for educational and informational materials; provision of educational and informational materials; provision of programs for the use and implementation of gas appliances. Opposition based, inter alia, on s. 12(1)(e) based on various official marks incorporating the words POWER SMART owned by the opponent.
Held: Application refused. Given that the words POWER SMART and ENERGY SMART are so similar in idea, a person familiar with the official mark POWER SMART, but having an imperfect recollection thereof, would be likely to mistake the mark AN ENERGY SMART HOME therefor.
2. Deutsche Telekom v. Northern Telephone, September 12, 2000 (Martin) Confusion
Use-based application for NT.NET & Design for telecommunication services. NET disclaimed. Opposition based, inter alia, on s. 16(1)(b) due to confusion with the opponent's marks TNET and T-NET for which applications had previously been filed for telecommunication services.
Held: Application refused because of the overlap in the services and trades and the degree of resemblance between the marks. Apart from the minor design component in the applicant's mark, the only real difference between the marks is that the applicant's mark includes the initial letter N.
3. Vita Green Health Products v. Vitasoy International Holdings, September 13, 2000 (Martin) Distinctiveness
Proposed-use application for VITA for vegetable based food beverage used as a milk substitute made from soya beans, tofu, etc. Opposition based, inter alia, on non-distinctiveness due to confusion with the mark VITA GREEN and trade-names incorporating the word VITA used by the opponent and its subsidiaries in Canada in association with health food, natural food, food supplements and personal care products.
Held: Opposition rejected because the evidence does not show any use of VITA GREEN or related trade-names in Canada by the opponent.
4. Nestlé v. U L Canada, September 20, 2000 (Bradbury) Confusion
Proposed-use application for SPACE RAINBOW for frozen confections. Opposition based, inter alia, on s. 12(1)(d) due to a likelihood of confusion with the mark SUPER RAINBOW ROCKET registered for water ices.
Held: Application refused. Confusion likely given the similarity between the wares and the resemblance between the marks. Both marks combine the idea of outer space with rainbows. The applicant's family of SPACE marks does not entitle it to add another member that is being objected to for reasons other than its use of the family's theme.
5. Myriad Innovative Designs v. Hasnain Akbar, September 25, 2000 (Bradbury) Confusion
Proposed-use application for MINDTECH for educational software, manuals, books, Štutoring children and adults on academic and personal development topics, etc. Opposition based, inter alia, on s. 16 due to confusion with the opponent's mark MIND previously used for clothing, cups, note pads, computers, CD ROM drives, computer magazines, software including educational software, operation of a business selling computer hardware, software and furniture, training customers in the use of selected software packages, etc.
Held: Application refused with respect to educational software, books, magazines, computer games, writing paper, mugs, glasses, cups, men's, women's and children's clothing namely, T-shirts, shirts, pullovers, tops, sweatshirts, sweatpants, shorts; developing, designing, marketing and distribution of educational software, manuals, books, toys and games primarily because these wares and services overlap with those of the opponent. Opposition rejected with respect to the remaining wares and services. Just because the opponent's MIND computers are used in schools does not mean that the public will assume that an educational centre operating under a similar name is associated with the product, particularly given that MIND is an ordinary dictionary word.
6. Animex v. Elmex Import-Export, September 25, 2000 (Bradbury) Confusion/ Foreign Language Marks
Use-based application for KROKUS for various food items. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the mark KRAKUS registered for various food items.
Held: Application refused. The applicant argued that confusion was not likely because the two marks have different meanings in the Polish language and similar marks/names have been used in Canada by third parties, primarily in Polish specialty stores. The average Canadian who understands Polish may be able to easily distinguish between the marks but they are not the only consumer. Non-Polish speaking Canadians may be confused given the similarity between the marks as applied to similar wares.
7. Data Management Strategies v. SNS/Assure, September 29, 2000 (Herzig) Section 30(b)
Use-based application for EDI/PRO for electronic data interchange services, electronic network management services, etc. Opposition based, inter alia, on s. 30(b) because the applicant has not used the mark since the date claimed.
Held: Application refused. The opponent filed a certified copy of an earlier proposed-use application by the applicant for the same mark that was withdrawn without prejudice because the applicant realized that a mistake was made regarding the basis of the application. The present application claims use from before the filing of the withdrawn proposed-use application. Its current claim of use contradicts its earlier claim of intent to use. An applicant is not barred from obtaining a registration simply because it at one time filed an incorrect application but this applicant's failure to explain the discrepancies between its two applications raises doubt about the veracity of this application. The applicant has failed to meet the legal onus on it.
8. Institut National des Appellations d'Origine v. Chock Full O'Nuts, September 29, 2000 (Herzig) Appellations of Origin/Deceptively Misdescriptive/Section 9(1)(d)
Proposed-use application for LA TOURAINE for coffee, tea, cocoa and spices. Opposition based, inter alia, on s. 12(1)(b) because the mark deceptively misdescribes the wares as originating in the Touraine district of France, and s. 9(1)(d) because the mark would lead to the belief that the applicant's wares have the approval of the government of France. TOURAINE is a French appellation of origin used in association with wine and cheese.
Held: Opposition rejected. The applicant took issue with the claim that the Canadian public is aware that wares sold in association with th
