Archive for May, 2009
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Monday, May 18th, 2009
This blog previously reported on Louis Vuitton Malletier S.A. v. 486353 B.C. Ltd., which, along with Louis Vuitton Malletier S.A. v. Yang and Microsoft Corp. v. 9038-3746 Quebec Inc., evidences a recent trend toward substantial damage awards in counterfeit goods cases. The April 2009 decision in Microsoft Corp. v. PC Village Co. Ltd. follows the approach taken in these cases and appears to confirm the courts’ commitment to cracking down on the sale of counterfeit goods in Canada.
In this most recent case, Microsoft Corporation brought an action for copyright and trademark infringement against corporate defendants known as PC Village Markham and PC Village Downtown, which were computer retailers in the Greater Toronto Area. The action was also brought against two employees that worked in sales at these stores. Evidence provided by the plaintiff’s investigators showed that both retail locations engaged in selling computers with unlicensed Microsoft software loaded onto the hard drives. The individual defendants served a Statement of Claim, but did not file it and proceeded to negotiate a settlement which was never finalized. Microsoft then brought a motion for default judgment.
The Court agreed that Microsoft was entitled to a default judgment, having proved that the Statement of Claim was served, no defence was filed and having established on a balance of probabilities that infringement occurred. The Court then went on to award damages for copyright infringement. Microsoft chose not to seek additional damages for trademark infringement, depreciation of goodwill or loss of direct sales. When assessing statutory damages under section 38.1 of the Copyright Act, the Court considered several relevant factors. The Court held that the defendants’ practice of continuing to sell unlicensed Microsoft products after they were aware that doing so violated copyright law demonstrated bad faith. The Court also held that the defendants’ attempts to deceive investigators demonstrated improper conduct. Furthermore, the Court held that there was a need to deter others from violating Microsoft’s copyrights in the future.
In accordance with section 38.1(5) of the Copyright Act and the decisions in Louis Vuitton Malletier S.A. v. Yang. and Microsoft Corp. v. 9038-3746 Quebec Inc., the Court concluded that the presence of these factors indicated a need for substantial statutory damages and awarded $10,000 for each copyright violation. In addition to statutory damages, the Court cited Louis Vuitton Malletier S.A. v. Yang and stated that because of the “outrageous” and “reprehensible” conduct of the defendants, this was an appropriate case for punitive damages. Additionally, the Court ordered injunctive relief against the defendants because of the continuing nature of the infringement.
The two sales representatives were personally liable for the activities of the corporations they worked for because they knowingly participated in the infringement of the plaintiff’s rights. The Court also allowed the action to be continued against the corporate defendants even though they had been dissolved. Thus, any property that would have been available absent the dissolution was available to satisfy the judgments. One individual was jointly and severally liable with one of the named corporations for $80,000.00, while the second individual and corporation jointly and severally liable for $70,000.00. All defendants were jointly and severally liable for the $50,000.00 punitive award and $50,000.00 in costs, for a total of $250,000.00.
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Posted in Case Law, Protection & Enforcement | Comments Off
Thursday, May 14th, 2009
The Federal Court of Appeal recently delivered its decision on the appeal in SC Prodal 94 SRL v. Spirits International B.V., as well as on a motion to quash the appeal.
The Respondent (Spirits) had applied to the Federal Court to expunge the Appellant’s (SC Prodal’s) mark STALINSKAYA for Vodka from the register. In the meantime, the Appellant had submitted a new application for the same trade-mark and subsequently cancelled the original mark. By the time the Respondent’s application for expungement of the original mark was considered, it was no longer on the register and consequently the Appellant did not file a notice of appearance. Although the original mark had been cancelled, the applications judge allowed the Respondent’s application and went on to issue a declaration that the trade-mark STALINSKAYA was not distictive as it was confusing with the Respondent’s trade-marks, including STOLICHNAYA for Vodka. The applications judge ordered a stay of proceedings and granted a “permanent mandatory injunction” prohibiting the Registrar of Trade-marks from considering the Appellant’s new STALINSKAYA application. The Appellant appealed and the Respondent moved to quash the appeal on the grounds that the Appellant had waived its rights in the court below by failing to file a notice of appearance.
Before considering the main appeal, the Court of Appeal dismissed the motion to quash the appeal following Desormeaux v. Ottawa (City) which stated that failure to file a notice of appearance does not necessarily prevent a party from appealing a decision if there is evidence that the respondent did not intend to waive all rights as a party. In this case, the Court of Appeal found that the Appellant had not acquiesced to the granting of relief in circumstances where it did not have notice of the relief being requested.
The Court of Appeal then addressed the appeal and found that in light of the fact the original STALINSKAYA mark had been cancelled, the application before the applications judge was a moot point: “that which does not exist cannot be expunged”. Contrary to the requirements of the Federal Court Rules, the Respondent’s notice of application did not include a request for a stay of proceedings, an injunction or an order of prohibition and as a result, the Appellant had no notice of this requested relief. The Court of Appeal was critical of the applications judge for granting relief that was not set out in the notice of application, particularly when the expungement of the original mark was a moot point: “in circumstances where a respondent party does not have notice of the relief being requested, such relief should not be granted until notice is given and the respondent party is offered the opportunity to respond”.
The appeal was allowed with costs and the order of the applications judge was set aside.
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Wednesday, May 13th, 2009
Brouilette Kosie Prince v. Great Harvesting Franchising, Inc. involved two Appeals under section 56 of the Trade-marks Act from decisions of the Opposition Board. The Appellant had sought, unsuccessfully, to have the Registrar expunge two trademarks pursuant to section 45 of the Act, namely two design trademarks, both for GREAT HARVEST BREAD CO. & DESIGN. The one was registered for use in association with the services of “operation and franchising of retail bakery shops”. The second was registered for the same services, as well as services described as “franchising services, namely offering technical assistance in the establishment and/or operation of retail bakeries and retail bakery shop services” and wares described as “bakery goods, namely bread, cookies, muffins, and cinnamon rolls; wheat; jams and jellies; clothing, namely hats, sweatshirts, aprons, t-shirts and sweaters”.
The Federal Court agreed with the Opposition Board that the one mark registered solely in respect of the services could be maintained in its entirety and the other could be maintained in part.
In the course of the section 45 proceeding, the owner of the trademark had provided a Statutory Declaration that included two photographs (the first showing bread baskets sitting on a portable table in a mall, with a banner pinned to the table and the second showing the banner with the trademark in full), a page from a booklet regarding how to become a franchisee, and four labels, together with invoices of sales for one particular day in the three-year period preceding the Section 45 Notice. No further evidence was provided by the owner of the trademark on the Appeal.
The Court noted that the standard of review was one of reasonableness and went on to consider the evidence. The Appellant’s key argument focused on whether the evidence was sufficient to establish use in accordance with section 45. With regards to the claimed services, the Court was satisfied that distribution of advertising material was sufficient to show use of the trademark in association with franchising services and that there was no need to show that actual franchises had been established. The only actual use in association with the claimed services was the operation of a “temporary bakery” in the Lethbridge Mall, but that was sufficient. With regards to the claimed wares, the mark had only been used in association with bread. Although all sales of the bread occurred on the same day, that was also sufficient. The burden on the owner on a section 45 proceeding is not onerous so long as there is some use within the three-year period preceding the section 45 Notice.
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Posted in Case Law, Registration | Comments Off
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