Canada's Federal Court of Appeal has confirmed that the
Court has jurisdiction to order transfer (or delivery up) of a
domain name involved in trademark infringement. The Federal
Court of Appeal's decision provides comfort to trademark owners
who prefer to bring a lawsuit, rather than a complaint under the
Canadian Internet Registration Authority's Domain Name Dispute
Resolution Policy (CDRP). A lawsuit may be preferred over a CDRP
due to the availability of broader remedies. For example, a
trademark owner cannot obtain an injunction and damages through the
CDRP. This decision is important as it came on the heels of a
recent Federal Court decision that found that, while the Court can
enjoin a domain name from being used in violation of a trademark
owner's rights, the Court does not have jurisdiction to order
transfer of domain names.
In David Michaels and Michaels Inc. v. Michaels Stores
2016 FCA 88, David Michaels appealed a default judgment ordering
that the domain name michaels.ca be transferred to Michaels Stores.
The Federal Court found that David Michaels had infringed the
MICHAELS trademark owned by Michaels Stores based on
"considerable evidence before the Court that established
actual confusion on the part of customers of Michaels Stores."
On appeal, David Michaels argued that the Federal Court order was
without jurisdiction or overly-broad. The Federal Court of
Appeal found that the Federal Court has jurisdiction to order
delivery up of domain names (i.e. transfer) in view of the
Trade-marks Act, which permits "any order (a Court)
considers appropriate in the circumstances" and the Federal
Courts Act, which gives the Court jurisdiction to order any
appropriate remedy known to the common law or equity. The Court of
Appeal noted that the domain name was the "mechanism" by
which the respondent's mark was infringed, and was the
"instrument" of confusion in the marketplace.
Accordingly, there was no palpable and overriding error in the
Judge's exercise of discretion to require delivery up of the
domain name. The Federal Court of Appeal also found the decision
was not overly-broad, noting that the order does not restrict the
personal appellant, David Michaels, from using his own name on the
internet or in trade. The order only prevents the appellants from
using the word MICHAELS and similar marks in a confusing way.
As mentioned, the decision followed a recent Federal Court
decision that found that the Court does not have jurisdiction to
order transfer of domain names. In Decommodification LLC v.
Burn BC Arts Cooperative, 2015 FC 42, the plaintiffs who hold
the well-known BURNING MAN event in Nevada, and own the marks
BURNING MAN and DECOMPRESSION, sought transfer of certain domain
names in addition to other remedies. The defendant organized a
similar event in Canada, and promoted it using the words
"BURNING MAN", "BURN BC",
"DECOMPRESSION", leaving the impression that the
defendant's event is authorized by or associated with the
plaintiffs and their event. In that decision, the Federal Court
held that the "Court can enjoin the continued use of
certain domain names and restrain their transfer to others but, in
my view, has no jurisdiction to require their transfer to the
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