Digests

Gianni Versace S.p.A. v. 1154979 Ontario Ltd.

T-993-03

2003 FC 1015, Lafrenière P.

29/8/03

17 pp.

Plaintiffs seek order under Federal Court Rules, 1998, r. 377, for preservation of merchandise bearing, or depicting, representation of one or more of trade-marks of plaintiffs, Gianni Versace S.p.A. (Versace), seized by Peel Regional Police (Police) from business premises of defendant, 1154979 Ontario Limited, under search warrant as part of criminal investigation--In addition, plaintiffs seek production of documents seized by police, and order authorizing plaintiffs to inspect merchandise, to take photographs, or make videotapes or digital images, of merchandise, and to obtain and retain samples of merchandise--Motion arising in action where plaintiffs seek declaratory and injunctive relief, and damages, along with order authorizing destruction of merchandise subject of actual motion, by virtue of defendants' distribution and sale of allegedly counterfeit merchandise infringing Versace's intellectual properties--R. 377(1) providing the Court may make order for custody or preservation of property subject-matter of proceeding or as to which question may arise therein--As part of requested relief in action, plaintiffs seek order authorizing destruction of jackets seized by Police bearing or depicting unauthorized reproduction of Versace intellectual properties--Defendants have admitted that if they obtain possession of merchandise, it is their intention to sell it--Merchandise itself, and disposition thereof, accordingly at issue in present action-- Since plaintiffs seek order authorizing destruction of merchandise, plaintiffs have clearly satisfied "subject-matter of proceeding" element of r. 377(1)--As stated in Diamant Toys Ltd. v. Jouets Bo-Jeux Toys Inc. (2002), 19 C.P.R. (4th) 43 (F.C.T.D.) (Diamant), party seeking preservation order under r. 377(1) need not meet tripartite test applicable to interlocutory injunctions--Logic dictating that by operation of Trade-marks Act, ss. 6, 7, 19, 20, 52 and, in particular, s. 53, and r. 377(1), this Court can entertain motion by applicant to preserve infringing goods before judgment--Plaintiffs have established merchandise seized by Police from premises bears or depicts counterfeit reproductions of certain Versace intellectual properties, including Versace Medusa trade-marks --Plaintiffs have also shown Versace has not authorized, either expressly or impliedly, defendants or any of them to offer for sale and/or sell products and merchandise bearing depictions of any of Versace intellectual properties-- Plaintiffs' affidavit evidence also establishes defendants have dealt in or have caused others to deal in unauthorized, or counterfeit, Versace merchandise, without consent, authorization or licence of plaintiffs--In fact, defendants have not contradicted plaintiffs' evidence in this regard--Plaintiffs have established prima facie case of trade-mark infringement --Turning to issue of irreparable harm, based on reasoning of Nadon J. in Diamant, plaintiffs need not establish that they will suffer irreparable harm in order to obtain injunction-- Damage to reputation by virtue of inferior quality of counterfeit products has been recognized as establishing sufficient harm to meet serious damage threat--Moreover, loss of quality control over unauthorized and counterfeit merchandise has been found to satisfy irreparable harm component of tripartite injunction test--Sale of inferior counterfeit Versace merchandise damages Versace's reputation for production of quality merchandise, and diminishes value goodwill associated with Versace intellectual properties--Balance of convenience, favour of plaintiffs-- Taking all circumstances into account, unconscionable to allow defendants' prima facie infringement to continue until such time as trial may be heard--Therefore, plaintiffs entitled to order which they seek--Federal Court Rules, 1998, SOR/98-106, r. 377--Trade-marks Act, R.S.C., 1985, c. T-10, ss. 6, 7, 19 (as am. by S.C. 1993, c. 15, s. 60), 20 (as am. by S.C. 1994, c. 47, s. 196), 52 (as am. by S.C. 1993, c. 44, s. 234), 53 (as am. idem).