Canada: Court decision reflects effort to streamline trade mark disputes
A recent decision of Canada’s Federal Court reflects a trend towards streamlining the resolution of trade mark disputes in Canada, helping to minimise delays in enforcing trade mark rights in the country. In C.C. Jentsch Cellars Inc. v O’Rourke Family Vineyards Ltd. et al, (2018 FC 875), the court dismissed the respondent’s motions for production of documents, the late introduction of an expert survey, and a request to convert the proceeding into an action. The decision demonstrates the court’s commitment to ensuring court proceedings are “expeditious and proportionate” (C.C. Jentsch, para 29).
Trade mark rights traditionally had to be enforced in Canada through a claim advanced by an action. In an action, both parties must produce all their relevant documents, make a representative available for an oral examination for discovery, and proceed to a trial that might take one to four weeks, depending on the number of witnesses. The process routinely takes more than two years.
More recently, the Federal Court of Appeal confirmed that trade mark disputes, whether they concern registered or unregistered marks, can also proceed by way of application. Applications do not involve the production of documents or oral examination for discovery, or live witnesses at a trial. Rather, the evidence is exchanged in affidavit form, with out-of-court cross-examinations. Documents may be requested from witnesses in advance of a cross-examination, but the threshold for relevance is narrower.
One disadvantage to the application process for intellectual property owners is that without examinations for discovery it can be difficult to determine the infringer’s profits. Nevertheless, there are numerous examples of Canadian courts determining and awarding damages without that information. Additionally, last year the court confirmed that even in an application it can decide the issue of liability first, and order a reference as to quantum of damages to be determined later. Such a reference could include discovery processes and a live trial if needed.
Application of the principles
Mr Justice Manson applied these principles in the C.C. Jentsch decision. He upheld an earlier decision, dismissing the various requests for documents as a fishing expedition and abuse of process (C.C. Jentsch, para 23).
Justice Manson also reaffirmed the court’s gatekeeper role regarding expert evidence, rejecting an expert survey on the basis it was “not reliable or necessary” because with only 75 relevant participants, it was “woefully deficient as a representative survey worth any value” (C.C. Jentsch, para 41) and did not offer insight on anything the court could not determine for itself (C.C. Jentsch, para 42).
Importantly for IP owners, the court reaffirmed the importance of following the applicant’s choice of proceeding, provided the underlying dispute is not overly complex or based on significant credibility issues, among other factors. Here, the respondent’s right to fully and fairly defend the application was protected, without the need for the cost and delays associated with an action.
The trend towards proportionality and efficiency is evident in other efforts the Federal Court is making, including the ever-increasing use of active case management, and practice notices explicitly directed to streamlining complex litigation, which tend to move proceedings, especially actions, along by constraining extensive examinations for discovery, among other measures. These measures are left for discussion on another day; in the meantime the C.C. Jentsch decision is the latest demonstration of a positive trend for IP owners seeking to enforce their rights in Canada.