Canada: Issue Of Personal Jurisdiction Over Crown Defendants Still In Play (Intellectual Property Weekly Abstracts Bulletin: Week 0f July 1, 2013)

Last Updated: July 11 2013
Most Read Contributor in Canada, September 2016

Edited by Chantal Saunders and Beverley Moore



Issue of Personal Jurisdiction over Crown Defendants Still in Play

Safe Gaming Systems Inc. v. Atlantic Lottery Corporation, 2013 FC 217

Safe Gaming Systems commenced a patent infringement action in the Federal Court in respect of a patent that, according to the statement of claim, relates to methods in a computer system for monitoring, regulating and terminating the gambling activities of an individual. Two of the defendants brought a motion to strike out the action on the ground that the Federal Court lacks personal jurisdiction over them as agents of the Crown in right of the province of Nova Scotia, and the Nova Scotia's Proceedings Against the Crown Act requires that the action be brought in the Supreme Court of Nova Scotia.

The Court noted that the Federal Court requires a statutory grant of power to exercise jurisdiction, and that the question of whether the Federal Court has jurisdiction over particular subject matter (e.g., patent infringement actions) is distinct from the question of whether it has jurisdiction over a particular party. With respect to the latter, the Court held that section 20 of the Federal Courts Act, section 2.1 of the Patent Act and section 54(2) of the Patent Act, read together, provide a grant of jurisdiction over patent remedies sought against the provincial Crown.

The decision was appealed. On May 14, 2013, the appeal was dismissed on the basis that the issue of personal jurisdiction over the Crown defendants is still in play, and may be dealt with at trial, or earlier as a motion for summary judgment or summary trial.


Summary Judgment Granted in Light of Affidavit Evidence

Moroccanoil Israel Ltd. v. Lipton et al., 2013 FC 667

Moroccanoil brought a motion for summary judgment relating to the infringement of its registered trade-marks (the "Trade-marks") in respect of hair care products against one of the Defendants, Edward Sivitilli. Settlement was reached with the other Defendants. Sivitilli filed a Statement of Defence, denying the allegations.

The Court found that Moroccanoil established the claims through affidavit evidence, including that the product sold in association with the Trade-marks was counterfeit, and that harm and damage was caused by the offer for sale of the counterfeit product. In particular, the Court noted that the Defendant was required to put its "best foot forward" and not rely on unsupported statements to argue that there is a genuine issue for trial. Damages were assessed and awarded.

Other Cases

Interlocutory Injunction Granted to Prevent Termination of Licence Agreement

Molson Canada 2005 v. Miller Brewing Company, 2013 ONSC 2758

This is a motion for an interlocutory injunction by Molson, to set aside and enjoin the notice of termination by Miller of a Licence Agreement relating to the distribution and sale of Miller-brand beers by Molson in Canada. The underlying action was commenced by Molson, seeking declarations, inter alia, that the attempted termination by Miller of the Licence Agreement is a breach of contract and breach of good faith. The Ontario Superior Court of Justice noted that Molson has been the exclusive Canadian licensed distributor of Miller's trademarks and brands since 1982.

The Court set out that Molson must meet a three-part test requiring that there is a serious question to be tried, that irreparable harm would be suffered if the injunction was not granted, and that the balance of convenience favours Molson.

The threshold to establish a serious issue is a low one, and the Court found that it was met by Molson. The Court found that Molson had established irreparable harm. The Court noted that the Supreme Court of Canada specifically included "permanent market loss or irrevocable damage to a business reputation" as an example of irreparable harm in RJR-MacDonald, and this type of damages was demonstrated by Molson. The Court concluded that the balance of convenience favours the preservation of the status quo and therefore in favour of granting the injunction. As a result Miller was prohibited from terminating the Licence Agreement pending the trial of the action.

Other Industry News

Health Canada has started a Consultation on the Plain Language Labelling Initiative. The consultation will be open for comment until September 6, 2013.

Health Canada has started a Public Consultation on the Safety of Paid Plasma Donations. The consultation will be open for comment until July 26, 2013.

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