Date: 20000630
Docket: T-409-00
BETWEEN:
THE REGISTERED PUBLIC ACCOUNTANTS
ASSOCIATION OF ALBERTA
Plaintiff
- and -
THE SOCIETY OF PROFESSIONAL
ACCOUNTANTS OF CANADA
Defendant
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This motion was brought by the defendant in order to strike out the statement of claim filed on February 29, 2000 by the plaintiff.
ANALYSIS
[2] The Supreme Court of Canada set out the test to strike out the pleadings in Hunt v. Carey Can. Inc., [1990] 2 S.C.R. 959:
| Assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a). |
[3] Section 20 of the Trade Mark Act sets out :
| 20. (1) The right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name, but no registration of a trade-mark prevents a person from making (a) any bona fide use of his personal name as a trade-name, or (b) any bona fide use, other than as a trade-mark, (i) of the geographical name of his place of business, or (ii) of any accurate description of the character or quality of his wares or services, in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade-mark. (2) No registration of a trade-mark prevents a person from making any use of any of the indications mentioned in subsection 11.18(3) in association with a wine or any of the indications mentioned in subsection 11.18(4) in association with a spirit. |
20. (1) Le droit du propriétaire d'une marque de commerce déposée à l'emploi exclusif de cette dernière est réputé être violé par une personne non admise à l'employer selon la présente loi et qui vend, distribue ou annonce des marchandises ou services en liaison avec une marque de commerce ou un nom commercial créant de la confusion. Toutefois, aucun enregistrement d'une marque de commerce ne peut empêcher une personne_: a) d'utiliser de bonne foi son nom personnel comme nom commercial; b) d'employer de bonne foi, autrement qu'à titre de marque de commerce_: (i) soit le nom géographique de son siège d'affaires, (ii) soit toute description exacte du genre ou de la qualité de ses marchandises ou services, d'une manière non susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à la marque de commerce. (2) L'enregistrement d'une marque de commerce n'a pas pour effet d'empêcher une personne d'utiliser les indications mentionnées au paragraphe 11.18(3) en liaison avec un vin ou les indications mentionnées au paragraphe 11.18(4) en liaison avec un spiritueux. |
[4] Pursuant to the Act, only a registered owner can claim infringement. Seeing that the plaintiff is not a registered owner, he would have to rely on the action of passing off.
[5] An action for passing off can be commenced either pursuant to the Common Law or ss.7(b) of theTrade-Marks Act.
[6] Subsection 7(b) of the Trade Marks Act states:
| 7. No person shall (b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another; |
7. Nul ne peut_: b) appeler l'attention du public sur ses marchandises, ses services ou son entreprise de manière à causer ou à vraisemblablement causer de la confusion au Canada, lorsqu'il a commencé à y appeler ainsi l'attention, entre ses marchandises, ses services ou son entreprise et ceux d'un autre; |
[7] This Court does not have jurisdiction under the Common Law action of passing off. Such actions are the exclusive jurisdiction of the provincial courts under property and civil rights. However it does have jurisdiction under s.7(b) of the Trade-Marks Act as the Federal Court of Appeal held in Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd., [1987] 3 F.C. 544 :
| Subsection 7(b) is a statutory statement of the common law action of passing off, which consisted of a misrepresentation to the effect that one's goods or services are someone else's, or sponsored by or associated with that other person. It is effectively a "piggybacking" by misrepresentation. [...] |
| In my view, subsection 7(b) is clearly within federal constitutional jurisdiction under subsection 91(2) of the Constitution Act, 1867. [...] |
| It was not disputed that, if subsection 7(b) were constitutionally valid, adequate legislative authority under the requirements of section 101 of the Constitution Act, 1867 is provided by section 55 of the Trade Marks Act, |
[8] After hearing the parties and examining the evidence submitted, the moving party did not convince me that it is plain and obvious that the present case does not disclose a cause of action. A reading of the statement of claim did not convince me that this action cannot be argued as a passing off action. In my view, the statement of claim should not be struck out as a whole.
[9] The moving party asked in the alternative to strike out certain paragraphs.
[10] The moving party alleges that reference to depreciation of goodwill ought to be struck out of the statement of claim based on Justice Teitelbaum"s decision in Copperhead Brewing Co. v. John Labatt Ltd., (1995) 95 F.T.R. 146, where he held:
| Paragraph 17(d) in effect is stating a cause of action for the depreciation of the value of the goodwill in a trade mark. However, it is clear that under the Trade Marks Act an unregistered trade mark owner does not have such a cause of action available to him or her. Subsection 22(1) provides that: |
| No person shall use a trade mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto. |
| (...) |
| Therefore, a cause of action based on subsection 22(1) applies only in the case of a registered trade mark. In the case before me, the trade mark is an unregistered one and, as such, the plaintiff has no cause of action for depreciation of goodwill. As the plaintiff 's cause of action is one of passing off, the plaintiff must therefore rely on the unfair competition section, namely section 7, of the Trade Marks Act. Therefore, paragraph 17(d) must be struck as supporting no cause of action. |
[11] Since the jurisprudence clearly states that on an action for passing off, the plaintiff must rely on section 7 of the Trade Marks Act and cannot invoke depreciation of goodwill under section 22 of the Act, paragraph 10(c) of the statement of claim should be struck out.
[12] The moving party further alleges that the tort of unlawful interference with economic relations does not lie within the jurisdiction of this Court. Although, I agree with the moving party on this point of law, I was not convinced how and where this tort was directly mentioned in the statement of claim. In my view, the allegations can be interpreted in a number of ways, dealing from damages under the passing off to an independent tort. In my opinion, it is best left for the Trial Judge after hearing the evidence to decide this matter.
CONCLUSION
[13] Paragraph 10(c) of the statement of claim is struck out. Costs in the cause.
Pierre Blais
Judge
QUEBEC, QUEBEC
June 30, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT NUMBER: T-409-00
BETWEEN: THE REGISTERED PUBLIC ACCOUNTANTS
ASSOCIATION OF ALBERTA
Plaintiff
AND:
THE SOCIETY OF PROFESSIONAL
ACCOUNTANTS OF CANADA
Defendant
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: June 8th, 2000
REASONS FOR ORDER BY: The Honourable Mr. Justice Blais
DATED: June 30th, 2000
APPEARANCES: Mr. Dale A. Strebchuk Plaintiff
Ms. Rose-Marie Perry Defendant
SOLICITORS OF RECORD:
PETERSON KROCHAK
Edmonton (Alberta) For Plaintiff
GOWLING, STRATHY & HENDERSON
Ottawa (Ontario) For Defendant
FEDERAL COURT OF TRIAL
Date: 20000630
DoCKET: T-409-00
Between:
TRE REGISTERED PUBLIC ACCOUNTANTS
ASSOCIATION OF ALBERTA
Plaintiff
And:
THE SOCIETY OF PROFESSIONAL
ACCOUNTANTS OF CANADA
Defendant
REASONS FOR ORDER AND ORDER