The Canadian trademark litigation process, although similar in many ways to other countries such as the United States, has several distinctive characteristics. These unique features differentiate the Canadian system and make Canada a favourable jurisdiction for litigating trademark disputes.
1. The discovery process. In Canadian litigation, there is a discovery process that includes both a documentary discovery stage and an oral discovery stage. In the documentary discovery stage, a litigant typically must produce an affidavit listing all relevant documents in its possession and provide the adverse party with access to those documents, subject to the terms of any confidentiality or protective Order.
The oral examination process, also known as a deposition in the United States, is generally limited to an examination of a single representative of the adverse party who must answer all relevant questions (subject to proper objections, such as privilege). There is no automatic right to examine additional individuals who may have knowledge of relevant facts.1 Due to these provisions, pre-trial oral discovery is generally considered more limited and less expensive in Canada as compared to that of the United States.
2. Interlocutory relief. An interlocutory injunction (or a temporary restraining order ("TRO") as it is sometimes referred to in the United States) is typically a difficult remedy to obtain in Canada. In order to obtain such relief, a plaintiff must demonstrate to the court that there is (i) a genuine issue for trial, (ii) that the plaintiff will suffer irreparable harm if the order is not granted, and (iii) that the balance of convenience rests in the plaintiff's favour.2
Most often a request for interlocutory relief is denied based on the plaintiff being unable to demonstrate actual, non-speculative, irreparable harm. For example, any harm that can be compensated through monetary damages is typically not considered irreparable. However, there have been signals from the Federal Court of Canada (the court in which most trademark infringement cases are brought) that the approach to the granting of an interlocutory injunction should be less restricted such that they should be more readily available. This would follow the approach of provincial superior courts (which have concurrent jurisdiction with the Federal Court in trademark infringement matters) where it is perceived that such injunctions are, under some circumstances, more readily obtained.
3. Jury trials. In jurisdictions such as the United States, jury trials are common in IP matters. In Canada, jury trials are typically confined to criminal matters or limited types of civil disputes. As such, intellectual property disputes in Canada are heard before a Judge alone, without a jury. The lack of jury trials in intellectual property matters is often perceived as a positive thing, as the judge hearing an IP case is more likely to be familiar with the specialized subject matter of an IP case and will have experience in hearing such cases. Also, and as discussed below, there are no treble damages in Canada for wilful infringement (as may be available for some types of IP cases in the United States) and it is uncommon for a plaintiff to obtain punitive or exemplary damage such that there is no real advantage in having a matter heard before a jury from a remedy perspective.
4. Forum shopping. The practice of forum shopping comes into play in some jurisdictions, for example, in the United States, in an effort by a plaintiff to have their case heard by a particular Judge or court that they believe will provide the most favourable outcome. In Canada, forum shopping issues do not typically arise. In trademark infringement matters, while both the Federal Court and the provincial superior courts have concurrent jurisdiction, most cases are brought in the Federal Court because of its national jurisdiction. Also, often the only perceived tactical advantage that might apply in deciding to bring an action in a provincial court as opposed to the Federal Court is the potential availability of an interlocutory injunction. However, as noted above, the view of the Federal Court on the availability of such remedies is evolving.
Additionally, the Federal Court has exclusive jurisdiction in respect of a party seeking to expunge a trademark registration. As such, there is usually no tactical disadvantage or concern over sending a cease and desist letter to a potential defendant.
5. Accounting of profits, legal expenses and permanent injunctions. A potentially attractive feature of Canadian litigation is the availability of alternate remedies to a successful IP plaintiff. Typically, a successful plaintiff will have a choice to elect between its own damages suffered due to the infringing activities or to seek an accounting of profits realized by the infringer. It should be noted that an accounting of profits is an equitable remedy, such that it is only available at the discretion of the court.
In addition, it is a general principle in Canada that the successful litigant (plaintiff or defendant) is entitled to its legal "costs." This typically consists of all that party's reasonable expenses (e.g., expert fees) and a portion of its lawyer's fees calculated by a tariff. In cases where the unsuccessful party has been found by the Court to have engaged in particularly egregious conduct during the litigation, the successful party may be awarded its costs on a full indemnification basis (referred to as solicitor and client costs).
Finally, in Canada, as in the United States, a successful plaintiff in a trademark case is typically entitled to a permanent injunction. However, it is considered an equitable remedy and therefore always subject to the court's discretion.
6. Punitive damage awards/treble damages. Although not uncommon in the United States, punitive damages are relatively uncommon in Canada, and are typically of a much more modest nature if awarded.3 While in general an award for damages serves to compensate the successful party and provide redress for loss, punitive damage awards are aimed at punishing a party who has engaged in conduct deemed to be malicious, oppressive, high-handed or egregious. Additionally, in Canada, there are no treble damages for wilful infringement.
7. International Trade Commission. The International Trade Commission ("ITC") is a federal agency in the United States that has the power to investigate matters of trade. The responsibilities of the ITC include the investigation and adjudication of cases involving allegations of imported products infringing intellectual property rights (most commonly patents and trademarks). The ITC adjudication process serves as an additional path of recourse to combat infringement, in addition to the court system. There is no equivalent agency or process in Canada.
8. Summary trial provisions. The Federal Courts Rules4 now provide for a summary trial procedure (in addition to a summary judgment procedure) that is essentially an application for a trial based upon affidavit evidence only.5 This allows litigants to request that the court deal with an issue or the proceeding in general in advance of trial and on an expedited basis. A summary trial is typically not appropriate when dealing with issues that would require a full trial (including live witnesses).6
It is also worth noting that recently the Federal Court has adopted a number of initiatives to assist litigants in getting to trial more quickly, often within two years of the commencement of the proceeding.
9. Customs remedies. The U.S. Customs and Border Protection ("USCBP") maintains a database where all trademarks registered at the U.S. Patent and Trademark Office are recorded and monitored for use at the borders. The availability of this database is intended to limit or prevent the importation of products that infringe domestically held trademarks. This is a form of protection provided in the U.S. that is not available in Canada. However, there are other border enforcement type remedies available in Canada with the assistance of the RCMP and Canadian Customs.
10. Anti-SLAPP provisions. In 2009, the province of Quebec introduced anti-SLAPP legislation (Strategic Lawsuits Against Public Participation). This legislation is intended to deter abusive litigation, in particular, lawsuits brought against individuals or public interest groups in an effort to silence criticism. With respect to trademarks, a recent case involving allegations of infringement was dismissed in accordance with the new anti-SLAPP provisions.7 The Court concluded that the plaintiffs had acted in a menacing and abusive manner,8 and applied the new provisions and ordered payment of $125,000 (including both punitive and extrajudicial fees and costs).9
1 Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 31.03(1) governs the ability to examine any adverse party. Rule 31.03(2) governs the examination of a corporate party
2 RJR MacDonald Inc. v. Attorney General for Canada, [1994] 1 S.C.R. 311
3 Punitive damage awards in Canada have ranged from $10,000 up to $1,000,000 as was awarded in Whiten v. Pilot Insurance Company, 2002 SCC 18
4 SOR 98-106
5 Ibid. Rule 216
6 Ibid. Rule 216(6)
7 Industries Lassonde inc. v. Oasis d'Olivia inc., 2010 QCCS 3901
8 Ibid. at para. 70
9 Code of Civil Procedure, R.S.Q., c. C-25, s. 54.4
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