Canada: Are Your Evidentiary Ducks In A Row? Considering A Summary Trial For Faster And Cheaper Trademark Litigation In The Federal Court

Last Updated: March 23 2015
Article by Eve Heafey

In late 2009, the Federal Courts Rules were amended to introduce summary trials as a new tool for litigating disputes in the Federal Court of Canada. Summary trials offer litigants a hybrid litigation approach which falls somewhere between a full trial with live witnesses and summary judgment.

Contrary to summary judgments, the Court can, in a summary trial, consider conflicting evidence (including affidavits, discovery evidence, admissions and written statements of experts). On the other hand, contrary to a full trial, the need to present live witnesses is usually avoided in a summary trial, unless the Court orders cross-examination of such witnesses.

Summary trials offer many advantages to litigants. For instance, the length of a summary trial is usually greatly reduced in comparison to a full trial, typically ranging between one and two days (whereas full trials for trademark disputes can last from one to several weeks). In addition, a summary trial can usually be heard at a much earlier date, partly due to the greater availability of the Court for scheduling short hearings, and also due to the fact that the hearing date can be requested earlier in the proceeding. As a result, the dispute can be adjudicated in a very cost-effective and timely manner (sometimes within one year of initiating the proceeding).

A motion seeking to have the matter heard at a summary trial can be brought in any case by either party and at any time after the defense is filed. However, the Court may dismiss the motion if it determines that the case is not suitable for summary trial or the summary trial would not assist in the efficient resolution of the action. Factors to be considered when assessing the appropriateness of a summary trial include the amount involved, the complexity of the matter, the urgency of the matter, whether any prejudice is likely to arise from delay, the cost of taking the case forward to a full trial in relation to the amount of money involved and the history of the proceedings. For additional information on the availability of a summary trial, see our November 17, 2011 IP Update on the subject.

While the Federal Court has already granted motions for summary trial in a number of cases, there remained some doubt as to the availability of summary trials in contested trademark disputes, including passing-off cases which have an important factual component. Late last year, three Federal Court decisions confirmed the Court's willingness to handle such disputes by way of summary trial. While insufficient evidence led the Court to dismiss the plaintiffs' claims on the merits in all three cases, one defendant's invalidity counterclaim was successful. Notices of Appeal have been filed in respect of all three decisions.

In MC Imports Ltd v Afod Ltd, 2014 FC 1161, the plaintiff alleged infringement of its registered trademark LINGAYEN by the defendant in association with bagoong (fish sauce) products.  The defendant counterclaimed for the invalidity of the trademark registration and filed a motion to have the case determined by way of summary trial, which was contested by the plaintiff but ultimately granted by the Court. In support of its position, the defendant filed affidavit evidence from five individuals, advising that Lingayen is a place in the Philippines known to Canadian consumers, that Lingayen is known to Canadians for its bagoong products and that products from Lingayen are known for their distinct aroma and flavor.

On summary trial, the Court dismissed the plaintiff's infringement claim, holding that – based on the evidence before it including copies of the product labels – the defendant had not used the term "Lingayen" as a trademark but rather in a descriptive fashion. Further, the Court declared that the plaintiff's trademark registration was invalid and struck it from the Register notably on the basis that LINGAYEN is clearly descriptive of the place of origin of the bagoong products in the Philippines.

In Lum v Dr. Coby Cragg Inc, 2014 FC 1171, the plaintiffs – who were facing trademark infringement proceedings in the British Columbia Supreme Court – filed a motion for summary trial seeking expungement of the defendant's trademark registration for OCEAN PARK on the grounds, inter alia,that it unlawfully described the geographical location of the defendant's dental services, namely the area known as "Ocean Park" in South Surrey, British Columbia.

The Court granted the motion for summary trial and stated that the plaintiffs had the onus of proving on a balance of probabilities that (i) Ocean Park is a location and that (ii) Ocean Park is "indigenous" to dental services. While the defendant had conceded that Ocean Park is a location, the plaintiffs did not adduce any evidence to support that Ocean Park is indigenous to dental services. Accordingly, the Court held that the plaintiffs failed to meet their evidentiary burden and ultimately dismissed the plaintiffs' invalidity claims.

The dispute in Sadhu Singh Hamdard Trust v Navsun Holdings Ltd, 2014 FC 1139 was centered on an unregistered design trademark used by both a well-known subscription daily newspaper published in India since 1955 (the plaintiff's Ajit Daily) and by a free weekly newspaper published in Toronto and Vancouver since 1993 (the defendant's Ajit Weekly).

The plaintiff claimed passing-off of its trademark rights, contrary to section 7(b) of the Trademarks Act and filed an uncontested motion requesting that the case be decided in a summary way. Interestingly, despite the important factual component in passing-off actions and the extensive evidence filed by both parties in this case, the Court found that – while complex – the case could be determined on the evidence filed and held that it was appropriate to decide the matter by way of summary trial.

The Court considered the plaintiff's evidence, including a number of affidavits (many of which being the subject of cross-examinations) which contained bald assertions regarding the reputation of the Ajit Daily in Canada, evidence regarding the number of subscriptions to the Ajit Daily in Canada (in 2010, there were seven print subscriptions) and anecdotal evidence of confusion. The Court held that this evidence was insufficient to satisfy the plaintiff's evidentiary burden of demonstrating passing-off and dismissed the plaintiff's claim.

Considering the three cases summarized above, it is now clear that summary trials are available in the Federal Court of Canada for various types of contested trademark claims, including infringement and invalidity claims. A summary trial may therefore be a valuable tool, in some circumstances, for obtaining prompt and efficient resolution of such disputes at a greatly reduced cost.

However, it is important to note that evidentiary defects are particularly difficult to cure in the context of a summary trial, given that filing additional evidence is limited by the Federal Courts Rules and that viva voce evidence is not available unless ordered by the Court. In fact, the outcome of these three recent cases serves to illustrate that a party wishing to proceed by way of summary trial must ensure that the evidence it provides the Court as part of its motion record is properly prepared and clearly sufficient – at the outset – to overcome its evidentiary burden.

For further information, please contact a member of our firm's Trademarks group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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Eve Heafey
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