The recent decision of the Federal Court in Trans-High Corporation v Hightimes Smokeshop and Gifts Inc, 2013 FC 1190, showcases a summary and expeditious procedure for enforcing trade-mark rights in Canada. In this case, the applicant, Trans-High Corporation, successfully moved by way of application for permanent injunctive relief, damages and legal fees in respect of its claims that the respondent, Hightimes Smokeshop and Gifts Inc., had engaged in trade-mark infringement, statutory passing off and depreciation of goodwill. The entire proceeding, from the date of service of the Notice of Application to the date of the Court’s decision, took only five months.
Trade-mark owners may bring applications seeking relief from trade-mark infringement, passing off and depreciation of goodwill by way of a summary application to the Federal Court, based on a written record, but should only do so in the right circumstances.
In Trans-High Corporation, the applicant availed itself of this cost-effective and expeditious procedure. The proceeding was uncontested and the Court, having found that the evidence filed was sufficient to establish trade-mark infringement and passing off, awarded the applicant permanent injunctive relief, “nominal” damages and costs. However, the evidence filed was found to be insufficient to establish depreciation of goodwill or to support the requested $200,000 in damages. By deciding to proceed by way of application, the applicant necessarily chose to forego any opportunity for pre-trial discovery to obtain further information concerning the extent of the respondent’s infringing activities. The Court continued its trend of awarding not insignificant “nominal” damages and costs in cases of blatant infringement in which the infringer fails to negotiate any form of settlement or participate in the Court’s process. The respondent was ordered to pay the applicant $25,000 in damages and $30,000 in costs.
Prospective litigants must weigh the costs and benefits of proceeding by way of action or application. An action affords the opportunity for documentary and oral discovery, which may assist a plaintiff in proving its case, including the extent of damages. However, pre-trial discovery takes time and costs money and, as evidenced by Trans-High Corporation, an applicant may be awarded significant nominal damages for a respondent’s infringing activities even without full facts relating to damages caused by these activities. An application also affords a litigant the opportunity to quickly obtain permanent injunctive relief from the Court and does not provide an infringer with the opportunities to delay and increase the expense of the proceeding that are available when proceeding by way of action. That said, unlike an action, in which a party may move for default or summary judgment, an application, absent settlement between the parties, generally cannot be resolved without the applicant filing a full application record and proceeding with an oral hearing, even when the application is unopposed.
Thus, the fact that a litigant may choose to proceed by way of application does not mean that every case is suitable for adjudication in this manner. However, not all proceedings for trade-mark infringement, passing off and depreciation of goodwill are so complex that they need to proceed by way of an action. In light of the Court’s decision in Trans-High Corporation, it is clear that in a simple case in which the strength of the “paper record” is sufficient to prove the applicant’s rights and the unlawful activities alleged, trade-mark owners may enforce their rights against infringers in Canada by bringing a summary application in the Federal Court. Permanent injunctive relief, damages and legal fees can be realized while saving time and money.