In October 2008, the Ontario Superior Court of Justice confirmed
that a foreign entity that merely licenses its Canadian trademarks
in Ontario is not sufficiently connected to Ontario for an Ontario
court to assume jurisdiction over the licensor.
The case of Charron v. Bel Air Travel Group Ltd.
[(2008) 92 O.R. (3d) 608] arises from the unfortunate death of an
Ontario man, which occurred while he was scuba diving at an
all-inclusive vacation resort in Cuba. His wife and children
brought the claim in Ontario against numerous defendants, including
the travel agent and tour operator, which were based in Ontario
(the Canadian defendants); the owner of the Cuban resort and
several employees of the resort (the Cuban defendants); the
operator of the Cuban resort, which arranged to market the resort
in Canada (Operator Defendant); and the licensor of the trademarks
under which the resort operated (Licensor
Defendant). Both the Operator Defendant and the Licensor
Defendant are companies incorporated in the Cayman
The Operator Defendant and the Licensor Defendant defended
against the claim by arguing that the courts of Ontario did not
have jurisdiction or were forum non conveniens. The test
for considering whether an Ontario court can maintain jurisdiction
over a defendant not present in, or consenting to, the jurisdiction
of the court, is whether the defendant has a "real and
substantial connection" to Ontario. The Court evaluated this
question on the basis of eight factors drawn from earlier
the connection between Ontario and the plaintiff's
the connection between Ontario and the defendants;
unfairness to the defendant in assuming jurisdiction;
unfairness to the plaintiff in not assuming jurisdiction;
involvement of other parties to the suit;
the court's willingness to recognize and enforce a similar
judgement against a domestic defendant rendered on the same
whether the case is international or interprovincial in nature;
comity and the standards of jurisdiction, recognition and
enforcement prevailing elsewhere.
The Court's evaluation of these factors in considering the
Licensor Defendant and the Operator Defendant was the same for all
but one of the factors. The Court found that the Operator Defendant
could be considered to have a connection to Ontario because it
marketed the resort in Ontario by way of an agreement with one of
the Canadian defendants. The Licensor Defendant was considered
to be unconnected to Ontario.
Although as a matter of law no single factor is decisive, the
Court found that the Operator Defendant had a real and substantial
connection to Ontario such that the Court could appropriately
assume jurisdiction. By contrast, the Licensor Defendant was
found not to have such a connection, and the action against the
Licensor Defendant was stayed. This case confirms that a
trademark licensor, whose only connection to a jurisdiction is the
use of a licensed mark in that territory, may not be considered to
have a real and substantial connection to the jurisdiction for the
purposes of litigation.
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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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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