A recent decision released by the Federal Court of Appeal should significantly expedite court access and increase efficiency, while simultaneously decreasing costs for trade-mark infringement cases. More specifically, in BBM Canada v. Research in Motion Ltd., the appellate Court has ruled that claims for damages, declarations and injunctive relief arising out of violations of the Trade-marks Act may be brought by application rather than by traditional action.
By way of summary, BBM Canada (BBM) was appealing an order that its claim for damages and other relief flowing from a trade-mark infringement could only proceed by way of action, a slower and often more costly manner of proceeding, rather than proceeding by way of application. In the case, BBM had commenced a proceeding under section 53.2 of the Act by filing a notice of application in the Federal Court claiming damages, declaratory and injunctive relief against Research in Motion (RIM) for trade-mark infringement, depreciation of goodwill and passing off. RIM brought a motion for an order dismissing the application on the grounds that the Federal Court lacked jurisdiction to decide the issues raised by BBM in a proceeding commenced by way of application. At first instance, the Federal Court found that proceedings which alleged infringement and unfair competition could not be commenced by notice of application because no provision of the Act required or permitted it. As a result, the Federal Court ordered that BBM’s proceeding could not be initiated by way of application. On appeal, the Federal Court’s decision was set aside on the basis that the Federal Court does, in fact, have jurisdiction to adjudicate trade-mark related cases commenced by way of application.
On appeal, the Federal Court closely examined section 53.2 of the Act, which allows the court to grant relief where the Act has been violated and noted that such section is silent as to how such proceedings are to be commenced. The appellate Court looked at how this silence was to be interpreted and whether, by its silence, Parliament intended that proceedings claiming relief as a result of actions contrary to the Act were permitted to be brought either by way of application or action. In addressing the issue, the appellate Court found that the interpretation to be selected was the one that meets the overriding purpose of the statute.
In this regard and as stated by the Supreme Court of Canada in Mattel, Inc. v. 3894207 Canada Inc., the Act serves two purposes: to protect consumers and to facilitate the effective branding of goods. In recognizing these purposes and consistent therewith, the Federal Court of Appeal found that the objective of the Act would best be achieved by an interpretation which promotes efficient and proportionate access to the courts. In order to facilitate expeditious and proportionate access to justice, the appellate Court found that section 53.2 of the Act should be interpreted to permit proceedings to be initiated either by way of application or by action, allowing access in an appropriate case to the summary application process.
So where does this recent development lead us? Both counsel and the owners of trade-marks ought to be mindful of the practical implications of this decision when approaching legal disputes involving trade-mark infringement. In cases where a trade-mark owner is searching for an expeditious and cost-effective resolution, the BBM Canada decision may be relied upon in order to proceed by way of application and to seek an efficient and cost-effective means of resolving trade-mark disputes. However, it must be noted that the BBM decision does not mean that all cases of trade-mark infringement are suitable for resolution by way of application. Applications are generally appropriate when there are no significant factual issues in dispute that would benefit from the extensive document production and examination processes that are available in actions. The circumstances of the relief sought and the extent that credibility is in issue will dictate whether it is appropriate for a proceeding to be initiated by way of action or application.
RIM has 60 days from the date of the decision on May 5, 2011 to seek leave to appeal to the Supreme Court of Canada.