This is an appeal by Philip Morris Products S.A. and Rothmans, Benson & Hedges Inc. (the appellants) from a discretionary Order of a judge of the Federal Court (2015 FC 364). The Order provided that Marlboro was entitled to elect an accounting of profits or all damages sustained as a result of the infringement of their rights in the registered trademark MARLBORO.
The appellants unsuccessfully argued four grounds of appeal:
- that because they had not actually used the respondents' property, they were not unjustly enriched;
- the Judge erred in his conclusion that the complexity of an accounting of profits is neutral as a factor because the calculation of damages could be as complex as an accounting of profits;
- there was no causal link between the damages suffered by the respondents and the use of their property by the appellants;
- they will be prejudiced if the respondents elect an accounting of profits, in view of the parallel litigation that has been initiated by the respondents alleging infringement of their MARLBORO trademark further to the introduction in July 2012 of the appellants' redesigned ROOFTOP packaging.
The Court of Appeal did not find a reviewable error in the first three grounds of appeal. For the fourth, the Court of Appeal held that when either the infringement proceeding or the reference is ready to be heard, the other proceeding may be stayed until a decision is rendered. This was said to effectively avoid potential prejudice posed by the parallel proceedings.
The appeal was dismissed with costs.