T-4448-80
Asbjorn Hogard A/S (Plaintiff)
v.
Northwest Tackle Manufacturing Limited and
Gibbs Tool and Stamping Works Ltd. (Defend-
ants)
Trial Division, Walsh J.—Toronto, June 1;
Ottawa, June 4, 1981.
Practice — Trade marks — Action for declaration of pass
ing off, invalidity and for expungement from register —
Motion by plaintiff for an order that officers of defendants
attend to be examined for discovery and that service be effect
ed on defendants' solicitors — Motion by defendants to deter
mine whether paras. 7(a),(b) and (c) of Trade Marks Act are
ultra vires and whether the Court has jurisdiction over the
action based on paras. 7(a),(b) and (c) — Whether, there should
be a preliminary determination of the question of law under
Rule 474 — Defendants' motion dismissed — Plaintiffs
motion adjourned sine die — Trade Marks Act, R.S.C. 1970,
c. T-10, ss. 7(a),(b),(c), 57, 58 — Federal Court Rules 465(8),
474.
Plaintiff moves for an order that an officer of each of the
defendants attend to be examined for discovery and that service
be effected on their solicitors. The action seeks a declaration
that the defendants have passed off their wares for those of the
plaintiff contrary to section 7 of the Trade Marks Act. It also
asks for a declaration that defendant Gibbs' trade mark
"NORSE SILDA" is void and that the trade mark be expunged
from the register. It further seeks an injunction restraining the
defendants from using the trade mark or words similar to
"STINGSILDA" and packaging similar to plaintiff's, for fishing
lures in Canada. The defendants seek a determination pursuant
to Rule 474 as to whether paragraphs 7(a),(b) and (c) of the
Act are ultra vires and whether the Court has jurisdiction over
the action based on the paragraphs. The issue is whether to set
down as a preliminary issue a determination of a question of
law under Rule 474.
Held, the defendants' motion is dismissed and that of the
plaintiff is adjourned sine die. Rule 474 leaves it to the
discretion of the Court to determine whether it deems it
expedient to set down a question of law for determination. The
leading jurisprudence appears to indicate that it should be done
if the decision of the Court on the question of law will
determine the entire issue before the Court. It cannot be
concluded at this stage of the proceedings that if a decision of
the question of law was adverse to plaintiff then the action
seeking expungement of the trade mark from the register would
therefore of necessity fail on a question of procedure. There-
fore, the present action, because of its dual nature is not an
appropriate one in which to set down as a preliminary issue a
determination of a question of law under Rule 474. The
plaintiff's motion does not need to be dealt with.
MacDonald v. Vapor Canada Ltd. [1977] 2 S.C.R. 134,
referred to. Motel 6, Inc. v. No. 6 Motel Ltd. [1982] 1
F.C. 638, referred to. The Clarkson Co. Ltd. v. The Queen
[1978] 1 F.C. 481, referred to. Canadian Pacific Air
Lines, Ltd. v. The Queen [1976] 1 F.C. 494, referred to.
Cardinal v. The Queen [1977] 2 F.C. 698, applied.
MOTION.
COUNSEL:
K. D. McKay for plaintiff.
B. Edmonds and G. Clarke for defendants.
SOLICITORS:
Donald F. Sim, Q.C., Toronto, for plaintiff.
McCarthy & McCarthy, Toronto, for defend
ants.
The following are the reasons for judgment
rendered in English by
WALSH J.: Two motions came on for hearing in
this matter, the first being defendants' motion
seeking determination pursuant to Rule 474 of the
Rules of this Court of questions of law as to
whether paragraphs (a),(b) and (c) of section 7 of
the Trade Marks Act, R.S.C. 1970, c. T-10, are
ultra vires and whether this Court has jurisdiction
over the portion of the subject-matter of the action
based on the said paragraphs (a),(b) and (c) of
section 7.
The second motion was an application by plain
tiff for an order that an officer of each of the
defendant companies attend to be examined for
discovery by plaintiff and that service of the
appointment may be effected on the solicitors for
the defendants as provided by Rule 465(8).
The action seeks a declaration that the defend
ants have passed off their wares for those of the
plaintiff within the meaning of section 7 of the
Trade Marks Act, but also asks for a declaration
that trade mark registration No. 216,708 for the
trade mark NORSE SILDA owned by the defendant
Gibbs is invalid and void and that it be expunged
from the register. In addition an injunction is
sought restraining the defendants from using the
words NORSE SILDA or words confusingly similar
to the trade mark STINGSILDA, an unregistered
trade mark used by plaintiff associated with fish
ing lures in Canada, and from using packaging
confusingly similar to that employed by plaintiff in
association with the said fishing lures sold or dis
tributed by them in Canada, as well as delivery up
for destruction of packaging, labelling, invoices,
advertisements and so forth and damages or an
accounting of profits.
Proceedings were initiated in September 1980
and there have been a number of preliminary
motions, the statement of defence being finally
filed on April 21, 1981, to which plaintiff has
joined issue. The issues of law raised by defendants
are serious and a final determination of them by
the Supreme Court of Canada would be welcomed
both by the Judges of this Court and by lawyers
practising in the trade mark field since at present
it can be said that the state of the law with respect
to the other paragraphs of section 7 of the Trade
Marks Act (with the exception of paragraph (e)
found to be ultra vires by the Supreme Court in
the leading case of MacDonald v. Vapor Canada
Limited [1977] 2 S.C.R. 134) is still unsettled.
One school of thought holds that although that
action was concerned only with paragraph (e) the
same reasoning adopted in that judgment is appli
cable so that all the other paragraphs of section 7
are also ultra vires. The other school of thought
holds that it is still arguable that there is appli
cable federal law to support some of the other
paragraphs. Extensive jurisprudence was examined
very thoroughly by my brother Addy J. in Motel 6,
Inc. v. No. 6 Motel Limited, supra page 638, a
judgment dated April 3, 1981, in which he con
cludes that section 7(b) of the Trade Marks Act is
ultra vires the federal legislative authority and
that the Court is without jurisdiction to try the
issue either on the basis of that section or the
common law action of passing off.
It is not necessary here to review the jurispru
dence save to state that the cases referred to by
him on the matter are Aluminum Co. of Canada
Ltd. v. Tisco Home Building Products (Ontario)
Ltd.', Adidas (Canada) Ltd. v. Colins Inc. 2 ,
Imperial Dax Co., Inc. v. Mascoll Corp. Ltd.',
McCain Foods Ltd. v. C. M. McLean Ltd. 4 ,
Balinte v. DeCloet Bros. Ltd.' and the appeal of
that case in [1980] 2 F.C. 384, Weider v. Beco
Industries Ltd. 6 , S. C. Johnson & Son, Ltd. v.
Marketing International Ltd.' and the appeal of
that case in [ 1979] 1 F.C. 65, Seiko Time Canada
Ltd. v. Consumers Distributing Co. Ltd.'
Desirable as it may be that an early and final
determination be made of the question of whether
some of the paragraphs of section 7 of the Trade
Marks Act are infra vires the federal authority
and whether this Court has jurisdiction to hear
any action based on them or on the basis of the
common law action of passing off, it is doubtful
whether these questions should be set down for
determination on a question of law pursuant to
Rule 474 in this case, since the action is also an
action for expungement of defendants' trade mark.
In the Motel 6 case referred to, Addy J. states at
pages 675-676:
The three main grounds on which a mark may be attacked
were discussed in the earlier portions of these reasons. They are
quite different from those on which an action of passing off
under section 7(b) or at common law can be maintained.
Similarly, even though a passing off action should fail on the
merits, the mark could still be found to be invalid on any one or
all of the three main grounds of attack provided for in the Act,
and the registration ordered to be vacated.
In his judgment he ordered that the defendant's
trade mark be struck from the register of trade
marks and states [at page 679]:
All other claims of the plaintiff will be dismissed, with the
claim under section 7(b) of the Trade Marks Act, however,
being dismissed solely on the grounds of lack of jurisdiction.
Rule 474 leaves it to the discretion of the Court
to determine whether it deems it expedient to set
down a question of law for determination. The
leading jurisprudence appears to indicate that it
1 (1978) 33 C.P.R. (2d) 145.
2 (1979) 38 C.P.R. (2d) 145.
3 (1979) 42 C.P.R. (2d) 62.
4 (1980) 45 C.P.R. (2d) 150.
5 (1979) 40 C.P.R. (2d) 157.
6 [1976] 2 F.C. 739.
' (1978) 32 C.P.R. (2d) 15.
8 (1981) 29 O.R. (2d) 221.
should only be done if the decision of the Court on
the question of law will determine the entire issue
before the Court. In the case of Cardinal v. The
Queen 9 Mahoney J. refused to set down prelim
inary questions of law for determination merely
because they could conveniently be dealt with in a
preliminary proceeding as their disposition would
not dispose of the action. In the case of The
Clarkson Company Limited v. The Queen 10
Mahoney J. at page 483 stated:
The situation contemplated by Rule 474 is one where, while
there are a number of issues in an action, the disposition of one
of them will likely have the effect of putting an end to the
action. The directions which the Court may give under subsec
tion (2) of that Rule must be aimed at that sort of disposition.
In Canadian Pacific Air Lines, Limited v. The
Queen" Cattanach J. after finding that a trial of
the matter was inevitable stated at page 498:
That being so, I am not satisfied that setting down questions of
law for preliminary determination will materially facilitate the
determination of the matter, or result in a saving of time and
expense which I conceive to be the purpose of Rule 474. The
costs of a trial will not be avoided ... .
Defendants' counsel contends that a decision on
the question of law to the effect that this Court
does not have jurisdiction over the portion of the
claim based on section 7 of the Trade Marks Act
will have the effect of finally determining all the
issues in the action, relying on section 58 of the
Trade Marks Act which reads as follows:
58. An application under section 57 shall be made either by
the filing of an originating notice of motion, by counterclaim in
an action for the infringement of the trade mark, or by
statement of claim in an action claiming additional relief under
this Act.
Since the application pursuant to section 57 to
expunge a trade mark from the register has neither
been made by the filing of an originating notice of
motion nor by way of counterclaim in an action for
infringement, but rather by the statement of claim
in the present proceedings which also claim pass
ing off under section 7 it is his contention that if
the Court is found not to have jurisdiction under
that section or that section is found to be ultra
vires the federal authority then the entire action
9 [1977] 2 F.C. 698.
10 [1978] 1 F.C. 481.
11 [1976] 1 F.C. 494.
must fail. Plaintiff for its part contends that a
Trial Judge could nevertheless in the present pro
ceedings order the expungement of the trade mark
even if the Court had no jurisdiction over the other
relief sought, and in fact this was done by Addy J.
in the Motel 6 case (supra), procedural obstacles
not having apparently been raised before him.
Plaintiff will not be satisfied with the mere
expungement of defendants' trade mark from the
register and is unwilling to withdraw that portion
of its claim from the present proceedings and
proceed by way of originating notice of motion
seeking the said expungement, leaving the rest of
the proceedings to rely entirely on the application
of section 7 of the Trade Marks Act on which a
final determination of the question of law which it
sought to raise would dispose of the entire proceed
ings. I am not prepared to conclude at this stage of
the proceedings that if a decision of the question of
law was adverse to plaintiff then the action seeking
expungement of the trade mark from the register
would therefore of necessity fail on a question of
procedure.
Plaintiff points out, not without justification,
that it is somewhat belated for defendants to seek
the determination of the question of law after the
pleadings have been completed and an application
has been made for discovery of an officer of
defendant companies. These discoveries as well as
any discoveries of an officer of plaintiff which
plaintiffs counsel states can be done at any time at
the convenience of defendants, could take place
during the summer recess and there is no reason
why the action should not be set down for hearing
on the merits at an early date in the autumn,
whereas if a question of law is raised it is unlikely
that a hearing of same could be set down during
the summer recess, and in any event, in the present
state of the law on the question, whatever judg
ment was rendered would almost certainly be
appealed most likely eventually to the Supreme
Court, so there would be a very extensive delay
during which plaintiff would not have its action
heard, and defendants could continue to use the
registered trade mark to the detriment of plaintiff.
It is necessary therefore to weigh the costs and
inconvenience of somewhat more lengthy examina
tions for discovery, parts of which may eventually
prove to have been wasted if it is eventually found
that the Court does not have jurisdiction over the
section 7 claims in the action, and possibly, as a
procedural consequence over the expungement of
defendants' trade mark, against the prejudice
which plaintiff will suffer as a result of the exten
sive delay in reaching a final decision on the
question of law if a preliminary determination is
allowed.
I have reached the conclusion therefore that the
present action, because of its dual nature is not an
appropriate one in which to set down as a prelim
inary issue a determination of a question of law
under Rule 474. It follows that defendants' motion
will be dismissed, but under the circumstances,
without costs. Plaintiff's motion for an order that
an officer of each of the defendant companies
attend to be examined for discovery by plaintiff
and that service of the appointment may be effect
ed on the solicitors for the defendants as provided
by Rule 465(8) does not need to be dealt with at
this time in view of the foregoing decision as it
appears probable that counsel for the parties can
agree on the officers to be examined, the date and
place for such examination and the conduct money
to be provided. That motion will therefore be
adjourned sine die.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.