Canada: Increased Use Of Summary Disposition In The Federal Court: An Efficient And Cost-Effective Tool To Resolve Trademark Cases

Last Updated: December 24 2014
Article by L.E. Trent Horne and Melissa Dimilta

For many years, summary disposition was essentially unavailable in intellectual property cases in the Federal Court of Canada, unless a claim or defence was plainly devoid of merit. For some parties, this presented a disincentive to advance meritorious claims where the costs of litigation would exceed what was likely to be recovered.

In recent years, there has been a clear trend towards using the Federal Court's summary judgment and summary trial rules1 to efficiently resolve trademark proceedings, particularly where the defendant was in default. Two recent decisions from the Federal Court have demonstrated that summary disposition is not limited to default proceedings, and can be a valuable tool for determining contested trademark infringement and validity claims.

Summary Judgment/Summary Trial

Historically, the Federal Court was very reluctant to resolve a contested intellectual property case without a full trial. Any issue of credibility, competing expert testimony or conflicting facts was usually enough to have a summary judgment motion dismissed. In trademark cases, issues surrounding the validity of the trademark registration, whether one mark was confusing with another, and whether a trademark was functional in nature were all considered too complex for summary determination, and required full consideration at a trial.2 This presented a challenge to litigants where damages awards would be modest; the time and expense required to go through discovery and trial were often disproportionate to the damages and costs that would be awarded.

The Federal Court introduced rules for a summary trial procedure in 2009. These new Rules, among other things, permitted cross-examination on affidavits before the motions judge. This was intended to assist the Court in resolving issues of credibility, which is difficult to determine on a paper record, and make summary determination of issues more available to litigants.

While summary judgment and summary trial are quite similar, there are differences. In a summary judgment motion, the Court makes a determination as to whether there is a genuine issue for trial. In a summary trial, the Court actually tries the issues raised by the pleadings and weighs the evidence contained in the affidavits to determine if judgment can be given on all or some of the issues.3

Since the summary trial rules were introduced, the Court has used this procedure to dispose of a number of trademark cases involving counterfeits.4 In these cases, there was little, if any, participation by the defendants and little room for debate that the defendant's products were infringing. The procedure proved to be an efficient means of resolving cases where there was no real defence to the claims of infringement.

Summary trial has not been limited to relatively straightforward counterfeiting cases. The Court has also summarily resolved proceedings where there was conflicting evidence from represented parties.5

Increased Use of Summary Trial: Improving Accessibility to the Federal Court

The trend towards more active use of the summary trial rules continued in two recent decisions. While the evidence in these cases was extensive, the Court determined that the amount of money involved, the cost of a full trial, the complexity of the issues and the stage of the proceeding made a summary trial the most just and efficient use of judicial resources.

In MC Imports Ltd v AFOD Inc,6 the plaintiff owned a trademark registration for LINGAYEN, registered in association with food products including fish sauce. The plaintiff imported these products from the Philippines and sold them to various grocery stores in Canada. The fish sauce imported by the plaintiff is generally known as "bagoong" in Filipino cuisine. The defendant imported a shipment of bagoong products from the Philippines. The labels for these products were marked with the defendant's trademark and also prominently included the phrase "Lingayen Style". The sales revenue of these products was less than $3,500.

The issues before the Court included whether the LINGAYEN mark had been infringed by the defendant, and whether the LINGAYEN mark was invalid because it was clearly descriptive of a geographic region. The trademark registration was held invalid (Lingayen is a city in the Philippines and the source of the products); the plaintiff's claim was dismissed.

In Sadhu Singh Hamdard Trust v Navsun Holdings Ltd,7 the plaintiff published a Punjabi language newspaper in India called Ajit Daily. Ajit Daily began publishing in 1955 and was well known in India and to Indian emigrants. The newspaper was delivered internationally and available on-line. Only about seven Canadians received a copy of the paper; the number of on-line readers was not in evidence. The defendant published a Punjabi language newspaper in Canada called Ajit Weekly, which was distributed free of charge. The parties were no strangers to litigation, and had been involved in trademark and copyright disputes relating to their respective newspapers both in the UK and in the United States.

In the Canadian proceedings, the issues included whether consumers were likely to confuse Ajit Weekly with Ajit Daily. The plaintiff's claim in passing off required it to prove three things: goodwill, misrepresentation and damage. The plaintiff failed on all three parts of the test. Notably, as for goodwill, the Court noted that there was no survey or independent reputable evidence to show that Ajit Daily had commercial goodwill in Canada. No doubt the fact that there were only seven Canadian subscribers and no evidence of on-line readership contributed to this finding. All of the plaintiff's claims were dismissed.

Balancing the Need for Expert Evidence with Summary Disposition

Until 2011, expert survey evidence was all but expected in Canadian trademark litigation. This practice was substantially curtailed in 2011 with the Supreme Court of Canada decision in Masterpiece Inc v Alavida Lifestyles Inc.8 In that case, Justice Rothstein stated that survey evidence should be used with caution and not supplant the role of the judge. Since then, survey evidence has been essentially absent in infringement cases.9

Survey evidence is inherently expensive. Recently, both the Federal Court and Supreme Court of Canada10 have strongly endorsed a broad interpretation of the summary disposition rules as an effective and accessible means of enforcing and defending rights, particularly in light of the fact that most Canadians cannot afford to sue when they are wrong or defend themselves when they are sued. It remains to be seen whether the Court's observations in Ajit Daily on the use of survey evidence will be narrowly applied to situations where the plaintiff's evidence is lacking, or whether survey evidence will again be seen as a routine cost of trademark litigation. If the latter, it will be a challenge to balance the cost of that evidence with the general principle that the summary disposition rules should be broadly applied to provide a mechanism that is a less expensive means to achieve a just result rather than going through a trial.


Summary disposition rules and their application have evolved from highly restricted tools used to weed out clearly unmeritorious claims or defenses to an alternative model for adjudicating and resolving legal disputes, including trademark infringement and validity proceedings. While the necessity of expert survey evidence will continue to be an issue, these decisions continue the trend to increasing access to the Federal Court for trademark disputes.


1 Federal Courts Rules, SOR/98-106, rules 213-219.

2 In Cosaco Inc v Hot Kiss Inc, 2005 FC 871, summary judgment was refused where issues of validity of trademark registrations and confusion were considered to be complex and expert evidence would be required. Similarly, in Crocs Canada v Holey Soles Holdings Ltd (2008), 64 CPR (4th) 467 (FCTD), the issue of whether footwear designs were "purely" or "solely" functional was considered to be a factual issue that should be further examined at a trial.

3 0871768 B.C. Ltd. v. Aestival (Vessel), 2014 FC 1047.

4 Guccio Gucci SpA v Mazzei (2012), 101 CPR.(4th) 219 (FCTD), Harley-Davidson Motor Co v Manoukian (2013), 112 CPR (4th) 404 (FCTD), and Moroccanoil Israel Ltd v Lipton, 2013 FC 667.

5 In Terrace (City) v Urban Distilleries Inc, 2014 FC 833, the court granted a motion for summary judgment expunging two official marks. The evidence did not demonstrate that the marks had been adopted and used prior to the publication date.

6 2014 FC 1161.

7 2014 FC 1139.

8 [2011] 2 SCR 387 at paragraphs 78 to 101.

9 See, for example, Gary Gurmukh Sales Ltd v Quality Goods Imd Inc, 2014 FC 437, where issues of trademark infringement and validity were resolved without the use of survey evidence.

10 Hryniak v Mauldin, 2014 SCC 7.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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L.E. Trent Horne
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