T-2493-87
L.M. Lipski Ltd. (Plaintiff)
v.
Dorel Industries Inc. and Babytyme Products Ltd.
(Defendants)
INDEXED AS: LM. LIPSKI LTD. v. DOREL INDUSTRIES INC.
Trial Division, Reed J.—Toronto, March 21;
Ottawa, March 31, 1988.
Industrial design — Infringement — Defendant exclusive
distributor in Canada of plaintiffs portable plastic bed guard
— American company manufacturing and marketing copy of
plaintiffs design — Defendant copying copy and marketing it
under own name — Prima facie case of infringement — That
defendant copied copy no defence to infringement — Registra
tion — Marking on product not conforming to Industrial
Design Act, s. 14 as not including "Rd." and year of registra
tion — Extraneous information re: Israeli design registration
possibly confusing — Substantial compliance with marking
requirements sufficient — Effect of non-compliance uncertain
until Federal Court of Appeal decision on matter — Effect of
actual notice of registration — Whether substantial compli
ance in this case serious issue to be tried — Interpretation
consistent with international convention, signed by Canada,
requiring protection of intellectual property rights notwith
standing failure to mark in specified manner.
Injunctions — Application for interlocutory injunction to
prevent sale of bed guards allegedly infringing plaintiffs
industrial design — Plaintiff establishing serious questions to
be tried — Plaintiff suffering irreparable' harm in terms of
loss of share of juvenile accessories market if injunction not
granted — Balance of convenience favouring plaintiff as
injunction of little financial significance to Dorel — Equities
favouring plaintiff as defendant not coming to Court with
clean hands — Serious question to be tried appropriate test
Interlocutory injunction not disposing of issues.
This was an application for an interlocutory injunction to
prevent the defendant from selling bed guards which were
alleged to infringe the plaintiffs registered industrial design.
The portable, plastic bed guards were designed to prevent a
young child from falling out of bed. The plaintiffs design,
created in 1984, was very different from anything that had
existed previously. The defendant (Dorel) was the exclusive
distributor of the plaintiffs product in Canada in 1986 and into
1987. A copy of the plaintiffs bed guard was being marketed in
the U.S.A. (the DMKA model) at a lower price. It was being
distributed in Canada to retailers such as Sears. Dorel had a
copy of this copy made and began marketing it in Canada in
place of the plaintiff's product.
In order to obtain an interlocutory injunction, the plaintiff
had to establish, inter alia, a prima fade case, or serious
question to be tried. This, in turn, depended upon whether the
defendant's bed guard was so different from the plaintiff's as
not to constitute infringement, and whether the defective mark
ing of the plaintiff's product and packaging deprived the plain
tiff of the protection that industrial design registration would
otherwise provide. Subsection 14(1) of the Industrial Design
Act provides that "In order that any design may be protected
... the name of the proprietor shall appear upon the article ...
with the letters "Rd." and the year of registration". The
plaintiff's product had impressed in the plastic "L.M. Lipski
Ltd., R. Design 10037, R. Design 10259". The design numbers
referred to Israeli registration numbers. Thus the marking was
deficient in that it did not include "Rd.", there was no date of
registration, and it contained extraneous information (the
Israeli design numbers) which could be confusing to Canadians.
The Canadian design registration issued in 1986, and the
defendant was aware of this fact.
Held, the application should be allowed.
The plaintiff had demonstrated a "serious question to be
tried" and even met the test of a strong prima facie case with
respect to infringement. The three tests set out in Mainetti
S.P.A. v. E.R.A. Display Co. Ltd. for infringement of an
industrial design had been met. Although the defendant's
design differed from the plaintiff's in some respects, its overall
appearance was the same, and, in the eyes of the Court, likely
to cause confusion. Secondly, there was a good argument that
the defendant had copied a substantial portion of the plaintiff's
design. There was no doubt that the plaintiff's design inspired
the defendant's. Without the plaintiff's design, the defendant's
would never have existed. Finally, the defendant's design was
closer to the plaintiff's than to any prior one (except for the
DMKA copy of the plaintiff's design). The fact that the
defendant actually copied a copy of the plaintiff's design was
not a defence to an infringement action. A copy of a copy is still
a fraudulent imitation of the original.
Allaire, Georges v. Hobbs Glass Ltd. was cited as authority
for the proposition that failure to mark an article properly was
fatal to the validity of the design registration. That case has
been repeatedly criticized, and an historical examination of the
legislation did not support the finding that section 37 of the
Trade Mark and Design Act was intended to have the same
effect as section 51 of the U.K. Act.
Ambiguous sections of statutes (ie. section 14) should be
interpreted in such a manner as not to defeat the intention of
international conventions which Canada has signed, i.e. the
International Convention for the Protection of Industrial Prop
erty (which requires that signatories not deny intellectual prop
erty rights to owners because of a failure to mark articles in a
specified manner).
The case law has established that substantial compliance
with the marking requirements is sufficient to meet the exigen
cies of section 14 and that the effect of non-compliance with
the marking provisions of that section (where there is no
substantial compliance) is uncertain. If the effect is only to
preclude damage claims and penalties against an unwitting
infringement (because of lack of notice), then the fact that the
defendant in this case had actual notice means that a failure to
mark would not preclude the plaintiff's obtaining the remedy
sought. In the absence of a Federal Court of Appeal decision
determining the consequences of non-compliance, an interlocu
tory injunction should not be denied for failure to demonstrate
a serious question to be tried. Moreover, the plaintiff had
demonstrated a serious question to be tried. Although the
markings were clearly deficient, there was sufficient informa
tion on the articles to alert an individual to the fact that the
design was likely to have been registered and to allow that
registration to be found without great difficulty. The question
of whether the markings constituted substantial compliance
with section 14 was a serious question to be tried.
The other elements required for the granting of an injunction
were also in the plaintiff's favour. In the absence of an injunc
tion, the plaintiff would suffer irreparable harm. The defendant
was a dominant force in the Canadian "juvenile accessories"
market. If the defendant were allowed to sell its bed guards, the
plaintiff would effectively be denied access to the Canadian
market for its bed guards and the other products it sells. The
bed guards would open the door for the plaintiff's other prod
ucts which were not functionally related to the bed guards, but
were all "juvenile accessories". The balance of convenience lay
in the plaintiff's favour. The grant of an injunction would have
little financial significance for Dorel, but loss of a significant
portion of the Canadian market for its bed rails would have
significant financial consequences for the plaintiff. Also, as an
injunction is an equitable remedy, courts consider whether the
competing parties have acted in an ethical manner. The equities
were all on the plaintiff's side.
Although a number of circumstances have been identified in
which it is not appropriate to use the serious question to be
tried test, the facts of this case did not fall within those
exceptions. The granting of an interlocutory injunction will not
dispose of the issues nor is there any compelling reason for not
granting the relief sought.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the Act respecting Trade Marks, and to
provide for the Registration of Designs, S.C. 1861, c.
21, ss. II, 13.
An Act to consolidate and amend the Laws relating to
the Copyright of Designs for ornamenting Articles of
Manufacturc, 1842 (U.K.), 5 & 6 Vict., c. 100, s. IV.
Industrial Design Act, R.S.C. 1970, c. I-8, s. 14.
International Convention for the Protection of Industrial
Property.
Patents and Designs (Amendment) Act, 1907 (U.K.), 7
Edw. 7, c. 28, s. 32.
Patents and Designs Act, 1907 (U.K.), 7 Edw. 7, c. 29.
Patents, Designs, and Trade Marks Act, 1883 (U.K.), 46
& 47 Vict., c. 57, s. 51.
The Trade Mark and Design Act of 1879, S.C. 1879, c.
22, s. 23.
Trade Mark and Design Act, R.S.C. 1927, c. 201, s. 37.
CASES JUDICIALLY CONSIDERED
APPLIED:
Mainetti S.P.A. v. E.R.A. Display Co. Ltd. (1984), 80
C.P.R. (2d) 206 (F.C.T.D.); Algonquin Mercantile Cor
poration v. Dart Industries Canada Limited, [ 1984] I
F.C. 246; (1983), 71 C.P.R. (2d) II (T.D.); affd. (1984),
I C.P.R. (3d) 75 (F.C.A.); Cimon Ltd. et al v. Bench
Made Furniture Corpn et al, [1965] I Ex.C.R. 811;
House of Faces, Inc. et al. v. Leblanc et al. (1984), 2
C.P.R. (3d) 177 (Ont. H.C.); Heinrich. v. Bastendorff
(1893), 10 R.P.C. 160 (Q.B.); Fielding v. Hawley (1883),
48 L.T. 639 (Q.B.); John Harper & Co., Limited v.
Wright and Butler Lamp Manufacturing Company, Lim
ited, [ 1896] 1 Ch. 142 (C.A.); American Cyanamid Co v
Ethicon Lui, [1975] I All ER 504 (H.L.).
CONSIDERED:
Allaire, Georges v. Hobbs Glass Ltd., [1948] Ex.C.R.
171; 7 Fox Pat. C. 145.
REFERRED TO:
Epstein v. 0-Pee-Chee Company Ltd., [1927] Ex.C.R.
156; Aetna Financial Services Ltd. v. Feigelman et al.,
[1985] 1 S.C.R. 2; Manitoba (Attorney General) v. Met
ropolitan Stores Ltd., [1987] I S.C.R. 110; Interlego AG
et al. v. Irwin Toy Ltd. et al. (1985), 3 C.P.R. (3d) 476
(F.C.T.D.); Ikea Ltd. et al. v. Idea Design Ltd. et al.
(1987), 13 C.P.R. (3d) 476 (F.C.T.D.); Cabot Corp. et
al. v. 3M Canada Inc. (1987), 15 C.P.R. (3d) 247
(F.C.T.D.); Hoffman-La Roche Ltd. v. Apotex Inc.
(1982), 72 C.P.R. (2d) 183 (Ont. H.C.); Mirabai Art
Glass Ltd. v. Paradise Designs Ltd. (1986), 13 C.P.R.
(3d) 88 (F.C.T.D.); Duomo Inc. v. Giftcraft Ltd. (1984),
I C.P.R. (3d) 165 (F.C.T.D.); Syntex Inc. v. Apotex Inc.,
[1984] 2 F.C. 1012; 1 C.P.R. (3d) 145 (C.A.); Creations
2000 Inc. et al. v. Canadian Tire Corp. et al. (1986), 15
C.P.R. (3d) 33 (F.C.T.D.); Supreme Aluminium Indus
tries Ltd. v. Kenneth M. Smith Inc. et al. (1985), I
C.P.R. (3d) 1 (F.C.T.D.); Turbo Resources Ltd. v. Petro
Canada Inc. (1988), 17 F.T.R. 28 (F.C.T.D.); Yri-York
Ltd. v. Canada (Attorney General), [1988] 3 F.C. 186
(C.A.).
AUTHORS CITED
Goldsmith, Immanuel. Trade Marks and Industrial
Design, Toronto: Carswell, 1982.
Hughes, Roger T., Q.C. Hughes on Copyright and
Industrial Design Scarborough, Ontario: Butterworths,
1984.
Hughes on Copyright and Industrial Design Newsletter,
Issue 1, No. 1, Nov. 1984.
COUNSEL:
Christopher J. Pibus for plaintiff.
Peter R. Hammond for defendants.
SOLICITORS:
Gowling & Henderson, Toronto, for plaintiff.
Hammond, Reininger, Mississauga, Ontario,
for defendants.
The following are the reasons for order ren
dered in English by
REED J.: The plaintiff seeks an interlocutory
injunction to prevent the defendant selling "bed
guards" which are alleged to be infringements of
the plaintiffs registered industrial design, number
56622. The "bed guards" in question are made of
plastic. They serve the function of a bed rail. They
are both portable and collapsible. They are
designed to protect a young child (under five years
of age) from falling out of bed.
The "bed guards" have not been marked in a
fashion which strictly complies with section 14 of
the Industrial Design Act, R.S.C. 1970, c. I-8. The
main issue in this application is whether this flaw
is so serious that it clearly deprives the plaintiff of
the protection afforded by the industrial design
registration. If this is the case, then the plaintiff
can prove neither a "prima facie case" nor a
"serious question to be tried" and thus cannot
meet one of the essential requirements for obtain
ing an interlocutory injunction. If, on the other
hand, the mismarking does not have this effect, at
least with respect to a defendant who had actual
knowledge of the registration, then the requisite
test of a "prima facie case" or "serious question to
be tried" will have been met.
It is first of all necessary to set out the relevant
facts. The plaintiff designed and created his bed
guards in 1984. It is clear they are vastly different
from anything which existed prior to that time.
The evidence discloses that there were pre-existing
bed rails made from metal and some consisting of
a metal frame with mesh. But, the plaintiff's
design was clearly unique and very different from
anything which had gone before. The plaintiff,
L.M. Lipski Ltd., is an Israeli firm; the bed guards
were designed by Mr. Lipski and Mr. Herschko-
vitz, and manufactured in Israel. In late 1985 an
oral arrangement was entered into whereby it was
agreed that the defendants would act as the exclu
sive distributor for the plaintiff's product, in
Canada. For all practical purposes, the two
defendants, Dorel and Babytyme, may be treated
as one entity, and hereinafter will be referred to as
Dorel.
The initial packaging in which the bed guards
were sent to the defendant was unilingual English,
carrying the name BABYJOY and with a "lipski"
logo and cartoon character on the bottom left hand
corner of the box. This corner logo and cartoon
character was accompanied by the phrase "Anoth-
er great idea from Lipski!". The packaging had a
red seal printed on it (approximately 1 1 / 2 " in diam
eter) with "R. Design 10259" in the middle. The
number 10259 is the Israeli design registration
number. The defendant indicated to the plaintiff
that the packaging should be bilingual and con
sulted with the plaintiff on the relevant changes. It
was also agreed that the packaging should carry
the name BABYTYME (instead of BABYJOY).The
defendant's graphic artist provided the plaintiff
with a proposed sketch which incorporated these
changes and included the red seal and printing
thereon (R. Design 10259).
The packaging under which the bed guard was
subsequently shipped into Canada and sold here
was essentially in the same format as the earlier
unilingual version, except that: the packaging was
bilingual; the name BABYJOY did not appear but
the name BABYTYME with a cherubic figure did;
the Lipski logo and cartoon character in the lower
left hand corner of the box was replaced by small
printing which stated:
MADE AND PRINTED IN ISRAEL
© ALL RIGHTS RESERVED LIPSKI LTD 1985
The red seal which had previously carried the
reference "R. Design 10259" now carried the
printing:
U.S.
DES. APP.
6.719.748
The product, the bed guard, at all times carried
(impressed in the molded plastic) the words:
L.M. LIPSKI LTD.
R. DESIGN 10037
R. DESIGN 10259
and on another part of the frame:
MADE IN ISRAEL
as well as the notice
© ALL RIGHTS RESERVED LIPSKI LTD 1984
As well as the bilingual packaging, the earlier
unilingual English packaging was also used from
time to time. As noted above, a registration of the
design (No. 10259) had been issued in Israel in
December, 1984. (An earlier version had been
registered in August, 1984 and it is this registra
tion to which the number 10037 refers.) In March
of 1985, prior to the distribution arrangements
between the plaintiff and the defendant, the plain
tiff had applied for a Canadian industrial design
registration. The Canadian design registration
issued July 15, 1986 (No. 56622). In September of
that same year, at a trade conference in Cologne,
Germany, Mr. Lipski told Mr. Schwartz (the pres
ident of Dorel) that the Canadian registration had
issued. There is conflicting evidence on this point.
Mr. Schwartz denies that he knew about the regis
tration. I do not find that assertion credible. Mr.
Schwartz was very aware of the importance of
protection for designs and patents. It is clearly
something he, as the exclusive distributor for the
Lipski products in Canada, would have been most
concerned about. Indeed, he gave evidence, on his
cross-examination, that he probably held more
patents (through the Dorel Company) on baby
goods than anyone else in Canada.
The first shipment of the plaintiff's bed guards
was sent by the plaintiff to the defendant in Janu-
ary, 1986-2,958 units. The defendant actively
marketed the plaintiffs bed guard through 1986
and into 1987, selling 27,000 units to retailers such
as Consumers Distributing, Eaton's, The Bay. Mr.
Lipski did not actively survey Dorel's activities; he
was in Israel; Dorel and its offices were in Canada.
Lipski did have an agent in the United States, a
Mr. Fishman, who dealt with Dorel from time to
time. Mr. Lipski trusted Dorel (and its officers
such as Mr. Schwartz) to diligently and faithfully
market the Lipski products, the bed guards and
other products as well.
The plaintiff's bed guard was also being market
ed in the United States. It was copied in that
country by what is called the DMKA bed guard.
This version, manufactured in Taiwan, was cir
culating and being sold at a somewhat lower price
than the Lipski original. Mr. Schwartz was con
cerned that the DMKA guard was going to under
cut his Canadian market position for the Lipski
product. He apparently complained of this to Mr.
Fishman, Lipski's agent. The DMKA copy was
being distributed in this country by Gendron and
sold to retailers such as Sears.
In October of 1986, Mr. Schwartz and another
officer (employee) of Dorel, Mr. Hall, went to
Taiwan. They took with them three of the connect
ing rails which form part of the DMKA bed guard.
These were provided to a Taiwanese manufacturer.
The manufacturer was also provided with a box in
which the Lipski bed guards had been packaged.
This box has on its front a photograph of the
Lipski guard. Mr. Schwartz gave the manufactur
er a sketch of the guards he wanted manufactured;
this sketch has since disappeared. In any event,
bed guards were produced in Taiwan for Dorel.
While similar to Lipski, they are even closer to the
DMKA product and indeed, are admitted to have
been modelled thereon. (The differences between
the Lipski product and the Dorel product will be
discussed later.)
The Dorel product was then marketed by Dorel
in Canada, in place of the Lipski product. Some
aspects of the marketing of the Dorel product
should be noted. Dorel periodically provides its
retail customers with catalogue sheets and price
lists. These are sent to approximately 1000 cus
tomers across Canada. The catalogue sheets dis
tributed to customers in 1987 contained a photo
graphic representation of the Lipski bed guard.
The price lists distributed in 1987 (including those
distributed as late as December, 1987) exhibited a
sketch of the Lipski bed guard. It is clear from the
price quoted, however, that after April, 1987, it
was the Dorel product which was being sold. After
April 1987, Dorel supplied the product which had
been manufactured in Taiwan to its retail custom
ers. The confusion created by this marketing is
evident in the advertising carried in the Consumers
Distributing catalogue for the relevant period.
Consumers Distributing has been Dorel's major
customer for the bed guard. The Consumers Dis
tributing catalogue for 1986-1987 (winter/spring)
showed a Lipski bed guard, in association with the
label BABYTYME, selling for $24.99. A similar
description was found in the subsequent issue of
that catalogue-1987 (summer/fall). In the next
issue, however, that of 1987-1988 (winter/spring),
the bed guard displayed is the Dorel Taiwanese
product, with the description "save $5.00 ... was
$24.99 ... now $19.99".
The plaintiff seeks an interlocutory injunction to
prevent Dorel marketing its Taiwan manufactured
bed guard. The factors to consider in determining
whether such injunction should be granted are: (1)
has the plaintiff proven a prima facie case, or a
serious question to be tried? (2) has the plaintiff
proven irreparable harm will result if an injunction
is not granted? (3) is the balance of convenience in
the plaintiffs favour?
With respect to the last two considerations, I
have no doubt that in the absence of an injunction,
irreparable harm will be caused to the plaintiff
and that the balance of convenience in this case
lies in the plaintiff's favour. The defendant is a
dominant force in the Canadian "juvenile accesso
ries" market, holding approximately 70% of that
market. If the Dorel bed guards are allowed to be
sold, the plaintiff will effectively be denied access
to the Canadian market, not only for its bed
guards, but also for the other products it sells.
Counsel for the defendant argued that the plain
tiffs other products are not functionally related to
the bed guards (although most are "juvenile acces
sories" of one sort or another) and that indeed,
they are not attractive to the North American
market in any event. It is contended that the
supplanting of the Lipski bed guards by the Dorel
model cannot therefore credibly be said to under
cut the plaintiff's access to the Canadian market
for its other products. I may accept that the
plaintiff's other products are not functionally
related to the bed guard but they all are (except
one) "juvenile accessories". I may also accept that
the other Lipski products are not as successful in
the North American market as the bed guard.
Nevertheless, I accept that the bed guard acts as a
"door opener" for these other products, that
acceptance of the bed guard for sale by a distribu
tor will carry with it the likelihood that that same
distributor will accept other Lipski products for
marketing as well. Dorel did exactly this in agree
ing to market not only the bed guard, but also the
"Johnny Step Up" and the "Rock 'N Play" riding
horse.
It is clear from the respective financial positions
of the parties that an injunction restraining Dorel
from marketing its product would have little finan
cial significance for the overall position of that
company. It would result in no employee displace
ment or other significant dislocating effect. For
the plaintiff, however, the loss of a significant
portion of the Canadian market for its bed guard
(which would result from the sale of the Dorel
copy) would have significant financial conse
quences. The balance of convenience is clearly in
the plaintiff's favour.
I would note, as well, that the granting of an
injunction is an equitable remedy. As such, the
respective ethical conduct of the two parties
("clean hands") has always been a factor the
courts have considered in deciding whether inter
locutory injunctions should be granted. In this
case, there is no doubt that the equities are all on
the side of the plaintiff. The defendant's conduct,
described above, makes that clear.
This leaves for consideration the crucial ques
tion: does the plaintiff have a prima facie case or a
serious question to be tried. There are two aspects
to be considered: (1) is the Dorel bed guard so
different from the Lipski bed guard so as not to be
an infringement of the latter's industrial design?
(2) does the defective marking of the plaintiff's
product and packaging operate so as to deny to the
plaintiff the protection the industrial design regis
tration would otherwise provide?
With respect to the first aspect, counsel for the
plaintiff (and for the defendant) cited three tests
for infringement of an industrial design. Counsel
for the defendant cited the tests set out by Mr.
Justice Walsh in Mainetti S.P.A. v. E.R.A. Dis
play Co. Ltd. (1984), 80 C.P.R. (2d) 206
(F.C.T.D.), at page 222. These tests are summa
rized in the headnote [at page 207] as:
(i) whether one design would be confused with the other;
(ii) whether the alleged infringing article would have any
existence in the terms of the design applied to it, but for
the registered design, and
(iii) whether the alleged infringing article was nearer the
original design than any other prior designs ....
The first test, that of likely confusion, must be
elaborated upon in order to understand the head-
note's meaning. Mr. Justice Walsh discussed the
test as follows, at page 222:
... now that the various minor and deliberately created differ
ences have been shown to the court it is not difficult to
distinguish defendant's hangers from plaintiff's but if these
differences had not been pointed out I would have reached the
conclusion that these were merely different versions of a hanger
made by the same manufacturer. [Underlining added.]
Counsel for the plaintiff referred to the test as
expressed by Mr. Justice Mahoney in Algonquin
Mercantile Corporation v. Dart Industries Canada
Limited, [1984] 1 F.C. 246, at page 250; (1983),
71 C.P.R. (2d) 11 (T.D.), at pages 13-14; affirmed
(1984), 1 C.P.R. (3d) 75 (F.C.A.):
Whether one design infringes another is a question to be
determined by the eye of the Court. In their details, the visual
aspects of the various elements making up the registered design
and the defendant's appliance, e.g., legs, handles, surface
layout, are very different. To my eye, the defendant's appliance
does not look very much like the registered design at all.
[Underlining added.]
The authorities cited by the plaintiff which
mirror the second and third test set out by Mr.
Justice Walsh in the Mainetti case, are respective
ly, Cimon Ltd. et al v. Bench Made Furniture
Corpn et al, [1965] 1 Ex.C.R. 811 and House of
Faces, Inc. et al. v. Leblanc et al. (1984), 2 C.P.R.
(3d) 177 (Ont. H.C.). In the Cimon case, Presi
dent Jackett wrote, at page 848:
No matter how often my attention was drawn to the many
differences between the construction of the alleged infringing
sofas and the construction of the sofa created by the plaintiff
company pursuant to its design, there has never been any doubt
in my mind that the sofas produced by the defendants were
designed to look as much like the plaintiff company's sofa as
possible .... The addition of buttons to the upholstery, the
enlarging of the walnut applique on the front and the use of
somewhat different legs and back support structure do not in
any way detract from the fact that the one sofa is a rather
cheap looking edition of the other. [Underlining added.]
In the House of Faces case, at page 181, Mr.
Justice Montgomery of the Ontario High Court
stated:
While the respondent's trays differ in small detail they would,
in my view, be compared with the applicants' trays. The
respondent's design is nearer to that of the applicants than any
prior user.
In my view there is infringement of industrial design estab
lished on the material before me. [Underlining added.]
In the present case, the defendant's design dif
fers from the plaintiffs in three aspects: the circles
(rondels) in the two upper corners of the plaintiffs
bed guard (which are a motif common to many
Lipski products) do not appear in the defendant's
design; the defendant has added an additional
support piece to the middle of each half of the bed
guard so that the elongated openings, in the guard,
are eight rather than four in number; the raised
plastic pattern in the centre of the defendant's bed
guard differs from that of the plaintiffs (the
defendant's is an exact copy of the centre pattern
of the DMKA guard). At the same time that these
differences exist, the overall appearance of the
defendant's bed guard, as well as most of the rest
of its detail is an exact copy of the plaintiffs bed
guard. An interlocutory injunction application is
not the place to decide the very issues in dispute,
but it is clear that there is a very good argument
that the defendant has copied a substantial portion
of the plaintiffs design. In addition, there is no
doubt that it was the plaintiffs design which ins
pired the defendant's. Without the plaintiffs
design the defendant's would never have existed. It
is also clear that the defendant's design is a copy
of the plaintiffs with certain deliberate modifica
tions; the defendant's design is clearly closer to the
plaintiffs design than to any prior design (except
the DMKA model).
The defendant argues that the plaintiffs design
was not the inspiration for the Dorel product;
rather the DMKA bed guard played this role; and,
it is argued, the defendant's product is closer to the
DMKA bed guard than to the plaintiff's. I do not
think the defendant can escape an action for
infringement on the ground that he copied a copy
of a copy of the registered design rather than the
design itself. It is the similarity of appearance and
form which creates an infringement. A copy of a
copy is still a fraudulent imitation of the original.
In so far as infringement is concerned, it is clear
that the plaintiff has demonstrated a "serious
question to be tried" and, indeed, has even met the
test of a "strong prima facie case".
The critical argument, however, is that based on
section 14 of the Industrial Design Act. Section 14
provides:
14. (1) In order that any design may be protected, it shall
be registered within one year from the publication thereof in
Canada, and, after registration, the name of the proprietor
shall appear upon the article to which his design applies by
being marked, if the manufacture is a woven fabric, on one end
thereof, together with the letters "Rd." and, if the manufacture
is of any other substance, with the letters "Rd." and the year of
registration at the edge or upon any convenient part thereof.
(2) The mark may be put upon the manufacture by making
it on the material itself, or by attaching thereto a label with the
proper marks thereon.
As noted above, the marking on the plaintiff's
bed guards does not comply with the requirements
of that section. I can do no better than to summa
rize counsel for the defendant's argument in this
regard: the marking on the bed guards conforms to
the Israeli design registration requirements, not
those of the Canadian legislation; there is no
"Rd." included in the marking as required by
section 14; there is no date of registration includ
ed; the date of registration is important because it
helps to locate the registration and also, it notifies
an individual as to when protection for the design
began and therefore when it will expire; what is
more, the marking on the Lipski bed guards con
tains extraneous information (the Israeli registra
tion numbers); these would only serve to confuse a
Canadian. Counsel for the defendant argues, as
well, that the plaintiff wants to put the blame on
the defendant for the mismarking when that re
sponsibility lies with the plaintiff's Canadian
patent agent and his Israeli attorney. It is argued
that: if these individuals did not properly advise
the plaintiff, then the defendant should not be held
responsible for that fact; it is the owner's responsi
bility to properly mark the goods and the require
ments in this regard are made clear to all owners
in the information which is sent to them with the
certificate of design registration.
I turn, then, to the jurisprudence which has been
cited concerning the effect of a failure to comply
with section 14. Counsel for the defendant argues
that the jurisprudence establishes that a failure to
mark in conformity with that section is fatal to the
plaintiffs rights. In Allaire, Georges v. Hobbs
Glass Ltd., [1948] Ex.C.R. 171, at page 178 and
pages 184-186; 7 Fox Pat. C. 145, at page 171 and
pages 180-182, it was held that failure to mark the
article in question with the letters "Etré" (the then
French equivalent of "Rd.") and the year of regis
tration, was fatal to the validity of the design
registration. The proprietor of the design had
placed the name and address of the seller on the
article (not that of the registered owner) and the
words "Patents pending Canada and U.S.A.
1939". The statutory provision in question was the
then section 37 of the Trade Mark and Design
Act, R.S.C. 1927, c. 201. The decision in Epstein
v. 0-Pee-Chee Company Ltd., [1927] Ex.C.R.
156 was cited as support for the finding that a
failure to mark in accordance with the statutory
provision created invalidity. In the Allaire case, at
pages 184-186 Ex.C.R.; 180-182 Fox Pat. C., the
following is found:
[TRANSLATION] In Epstein v. 0-Pee-Chee Company Ltd.
((1927) Ex. C.R. 156), in which the plaintiff was asking the
Court to expunge an industrial design, Audette J. allowed the
action and directed that the design be expunged, primarily
because the subject of it had been published more than one year
prior to registration, but also on the following additional
ground (p. 157):
Moreover the Maple Crispette Company did not protect
the design, as required by sec. 34 (now 37) of The Trade
Mark and Design Act, by placing the letters Rd. and the
year of registration at the edge or upon any convenient part
of the design.
[TRANSLATION] In the aforementioned text, Fox expresses
the following opinion, which seems right to me (p. 470):
Under the English Act the marking is to be placed upon
the goods before delivery on sale. Although these words do
not appear in Sec. 37 of the Canadian statute, it is assumed
that the meaning is the same, and that a design will be
invalidated if goods are sold without being marked in accord
ance with the section.
[TRANSLATION] Section 51 of the British statute, the Pat
ents, Designs and Trade Marks Act, 1883, 46-47 Vict., c. 57,
reads as follows:
51. Before delivery on sale of any articles to which a
registered design has been applied, the proprietor of the
design shall cause each such article to be marked with the
prescribed mark, or with the prescribed word or words of
[sic] figures, denoting that the design is registered; and if he
fails to do so the copyright in the design shall cease, unless
the proprietor shows that he took all proper steps to ensure
the marking of the article.
[TRANSLATION] Fox bases his opinion on the following
judgments: Woolley v. Broad ((1892) 9 R.P.C. 429); Wedekind
v. The General Electric Co. Ltd. ((1897) 14 R.P.C. 190); in the
matter of Rollason's Registered Design ((1897) 14 R.P.C. 893,
909).
See also Heinrichs v. Bastendorff ((1893) 10 R.P.C. 161).
I feel it is appropriate to cite a passage from the judgment of
Lindley M.R. of the Court of Appeal in in the matter of
Rollason's Registered Design, which clearly sets out the theory
on the point at issue (p. 913):
Then there is the other point about the 51st section, which
I had forgotten for a moment. It turns upon a mistake which
was made by the die-sinker in putting a 5 for a 3. The 51st
section runs thus, and it is rather important: "Before delivery
on sale of any articles to which a registered design has been
applied the proprietor of the design shall cause each such
article to be marked with the prescribed mark or with the
prescribed word or words or figures denoting that the design
is registered." That, as applied to this case, means "Regis-
tered" or "Rd." with the number "232,908". That is accord
ing to the rules what he ought to have had on; but in one
plate made for a child's coffin inadvertently the die-sinker
put a 5 for a 3, and it was not found out. Now, if the section
stopped where I have stopped, it appears to me it would have
rendered this design a bad design. It would have had to be
expunged. But, of course, the Legislature saw that that
would be a very serious consequence of what might be a very
trifling and venial slip; so the section goes on to qualify what
I read in this way: "If he fails to do so"—which in that
particular instance Mr. Rollason did—"the copyright in the
design shall cease unless the proprietor shows that he took all
proper steps to ensure the marking of the article".
The learned Judge in the Court below thought Mr. Rolla-
son brought himself within the last part of that section. I
think so too, and I think so for this reason. It is not as if the
error was one which would catch the eye even of a casual
observer; the error here was a mistake in putting a 5 for a 3,
and when you look at the impression on the plate it is very
difficult to find out whether there has been a mistake or not,
and, in point of fact, this mistake was not found out for a
long time—I think a year or two—and as soon as it was
pointed out it was rectified.
[TRANSLATION] The opinion of Kekewich J. of the Chancery
Division of the High Court of Justice, approved by Lindley,
M.R., is at page 898 of the report.
After thoroughly examining the question 1 have concluded
the defendant's second allegation is fatal to the validity of the
plaintiff's industrial designs, and that the latter must therefore
be declared null, void and invalid. It goes without saying that in
the circumstances the plaintiff cannot recover damages from
the defendant, obtain an injunction against it barring it from
manufacturing and selling protective plates similar to those
which are the subject of the plaintiffs industrial designs nor
ask to have the plates it has manufactured turned over to it.
The failure to mark in accordance with the
provisions of the Act was again addressed in the
Cimon case (supra) at pages 845-847. The articles
in question had been marked:
CIMON
DESIGN
Rd 1962
The defendant argued that the design registration
was held by "Cimon Limited" and not "Cimon"
and therefore the marking requirements of the Act
had not been complied with. President Jackett
wrote:
The one remaining ground upon which the defendants base
an attack on the plaintiff company's monopoly rights under the
statute is their contention that the plaintiff company has failed
to comply with the marking requirements of section 14 of the
Act, which reads as follows:
14. (I) In order that any design may be protected, it shall
be registered within one year from the publication thereof in
Canada, and, after registration, the name of the proprietor
shall appear upon the article to which his design applies by
being marked, if the manufacture is a woven fabric, on one
end thereof, together with the letters Rd., and, if the manu
facture is of any other substance, with the letters Rd., and
the year of registration at the edge or upon any convenient
part thereof.
(2) The mark may be put upon the manufacture by
making it on the material itself, or by attaching thereto a
label with the proper marks thereon.
In the absence of some authority on the subject, I should
have had some doubt as to whether section 14 attaches to the
failure to comply with the marking provisions contained there
in, in respect of every single article manufactured in accordance
with the design, the somewhat drastic consequence of automat
ic forfeiture of all rights in respect of the registered design. The
section does not so state in so many words unless the words at
the beginning of the section, "In order that any design may be
protected", are applicable not only to the requirements that the
design "be registered within one year from the publication
thereof in Canada" but also to the marking provisions to be
found in the rest of subsection (1). I should, myself, have
doubted that the subsection bears that interpretation and, in
this connection, I refer to section 23 of chapter 22 of the
Statutes of Canada of 1879, which, subject to an immaterial
amendment made by chapter 28 of the Statutes of 1923, would
appear to be the form in which the section was last enacted by
Parliament (as opposed to having been reconstructed by a
statute revision commission). Section 23 read as follows:
23. Every design to be protected must be registered before
publication; and, after registration, the name of the proprie
tor, who must be a resident of Canada, shall appear upon the
article to which his design applies; if the manufacture be a
woven fabric, by printing upon one end; if another substance,
at the edge or upon any convenient part, the letters Rd., with
the mention of the year of the registration; the mark may be
put upon the manufacture by making it on the material itself,
or by attaching thereto a label containing the proper marks.
In case of ambiguity arising from the work of a statute revision
commission, I should myself have thought that it is legitimate
to refer back to the form of the legislation in which it was
enacted by Parliament. I am, however, aware that in Allaire v.
Hobbs [[1948] Ex.C.R. 171], this Court held, without discuss
ing this question, that failure to comply with the marking
provisions of section 14 terminates the rights of the proprietor
of the registered design.
Having regard to the evidence that the plaintiff company was
generally known in trade circles as "Cimon", I am of the view
that the label quoted above is a sufficient compliance with
section 14. The obvious reason for the requirement in section 14
is to warn a person who might be thinking of using the design
of an article bearing the label that it is registered and to inform
him of the name of the proprietor of the design. Knowing the
name of the proprietor, such a person might check the validity
of the claim that the sofa was registered and might, if so
inclined, negotiate with the proprietor for a licence. Whether
that be the purpose for requiring that the name of the proprie
tor be attached to the article or not, it must be sufficient that
the name be such that it communicates to those who might be
interested, who, in fact, the proprietor is. I am satisfied that, in
furniture circles in Canada, the word "Cimon" would indicate
the plaintiff company and that, therefore, there was compliance
with the requirements of the section. I reject the contention
that section 14 was not complied with.
The issue was addressed again, more recently,
by Mr. Justice Walsh in Mainetti S.P.A. v. E.R.A.
Display Co. Ltd. (1984), 80 C.P.R. (2d) 206
(F.C.T.D.), at pages 222-224:
While the great majority of plaintiff's hangers are made for
it by Joy and bear the marking MAINETTI S.P.A. JOY and
the words "Rd." to comply with the Act it is admitted that
after registration of its design plaintiff sold in Canada an
(translated) "insignificant quantity" of hangers coming from
Italy bearing the mark MAINETTI CASTEL GOMBERTO
MOD. DEPOSE and also that a large number of garments
made abroad entered the Canadian market on hangers made by
Mainetti France bearing the indication MAINETTI SECLIN.
Mainetti France does not sell hangers directly in Canada, and,
while a part of the same group of companies, has an independ
ent corporate existence from plaintiff.
It was admitted that the hangers are never sold as such to the
public but are sold to clothing manufacturers and plaintiff has
no control over the importation into Canada of clothing pur
chased on hangers obtained from Mainetti France. In the case
of Allaire v. Hobbs Glass Ltd. (1948), 9 C.P.R. 3 at pp. 22-3, 7
Fox Pat. C. 145 at p. 181, [1948] Ex. C.R. 171, Angers J.
refers to an opinion expressed by Fox at p. 470 of the first
edition of his book The Canadian Law of Trade Marks and
Industrial Designs (1940), to the effect that:
"Under the English Act the marking is to be placed upon
the goods before delivery on sale. Although these words do
not appear in Sec. 37 of the Canadian statute, it is assumed
that the meaning is the same, and that a design will be
invalidated if goods are sold without being marked in accord
ance with the section."
It should be pointed out however that the English Act [Patents,
Designs, and Trade Marks Act, 1883 (U.K.), c. 57] provides
under s. 51 that if the marking was not applied before delivery
on sale "the copyright in the design shall cease" which words
did not appear in s. 37 of the Canadian statute which is now s.
14. A more recent statement is made by Immanuel Goldsmith,
Q.C., in Trade Marks and Industrial designs (1982), under
§ 428, p. 141-254, where he states:
Failure to comply with the marking provisions of the Act has
been held to invalidate the registration [referring to the
Allaire v. Hobbs Glass Limited case] but the correctness of
this view has been doubted. It is sufficient if the article is
marked with the name by which the owner is known in trade
circles.
For authority for this statement he refers to the case of
Cimon Ltd. et al. v. Bench Made Furniture Corp. et al. (1964),
48 C.P.R. 31 at p. 64, 30 Fox Pat. C. 77 at p. 108, in which
Jackett P. stated:
In the absence of some authority on the subject, I should
have had some doubt as to whether section 14 attaches to the
failure to comply with the marking provisions contained
therein, in respect of every single article manufactured in
accordance with the design, the somewhat drastic conse
quence of automatic forfeiture of all rights in respect of the
registered design. The section does not so state in so many
words unless the words at the beginning of the section, "In
order that any design may be protected", are applicable not
only to the requirements that the design "be registered within
one year from the publication thereof in Canada" but also to
the marking provisions to be found in the rest of subsection
(1). I should, myself, have doubted that the subsection bears
that interpretation.
He concluded on the facts of the case before him that the fact
that the label quoted merely used the words "Cimon" rather
than "Cimon Limited" was not sufficient to constitute non
compliance with s. 14. He goes on to say at p. 65 C.P.R., p. 109
Fox Pat. C.:
The obvious reason for the requirement in s. 14 is to warn a
person who might be thinking of using the design of an
article bearing the label that it is registered and to inform
him of the name of the proprietor of the design. Knowing the
name of the proprietor, such a person might check the
validity of the claim that the sofa was registered and might,
if so inclined, negotiate with the proprietor for a licence.
Whether that be the purpose for requiring that the name of
the proprietor be attached to the article or not, it must be
sufficient that the name be such that it communicates to
those who might be interested, who, in fact, the proprietor is.
Goldsmith also suggests that invalidation of the registration
for failure to mark is contrary to art. 5D of the International
Convention for the Protection of Industrial Property to which
Canada is a party.
Fox himself appears to have changed his view somewhat,
since in the second edition of his book at p. 672, he now refers
to the Allaire and Cimon cases and states:
It has been held that failure to mark in accordance with
the provisions of the Act is a fatal objection to the validity of
a registration, but this view has been doubted.
These drastic marking provisions are contrary to the terms
of the International Convention for the Protection of Indus
trial Property, to which Canada is a party. Article 5D of that
Convention provides: "No sign or mention of the patent, of
the utility model or of the registration of the trade mark or of
the deposit of the industrial design or model shall be required
upon the product as a condition of recognition of the right to
protection.
At p. 671 moreover he states: "If improper marking is found to
be inadvertent and confined to very few articles, a defence
based on that fact may fail."
Defendant states that it does not seek a declaration that the
Mainetti registered design is invalid, but merely that plaintiff
cannot be protected in its use of it and hence cannot charge
defendant with infringement. Defendant further points out that
the date of registration can be important as it would indicate to
the party wishing to manufacture an article of similar design
when the design registration it wishes to copy will expire. While
the interpretation to be given to s. 14 of the Act appears to still
be controversial, I am of the view it should be strictly complied
with and that plaintiff has failed to do this and therefore has
lost the protection of it.
In the Allaire decision (supra) section 51 of the
1883 United Kingdom legislation was relied upon,
together with the opinion by Fox, that the relevant
section of our legislation (section 37 of R.S.C.
1927, c. 201) was intended to have the same effect
as section 51. Despite Fox's opinion in this regard,
it is not clear to me that section 37 of the Trade
Mark and Design Act was intended to have the
same effect as section 51 of the Patents, Designs,
and Trade Marks Act, 1883 (U.K.), 46 & 47
Vict., c. 57. Certainly the wording of the two
sections is vastly different. Section 37 corresponds
to the present section 14 of the Industrial Design
Act and provided:
37. In order that any design may be protected, it shall be
registered within one year from the publication thereof in
Canada, and, after registration, the name of the proprietor
shall appear upon the article to which his design applies by
being marked, if the manufacture is a woven fabric, on one end
thereof, together with the letters Rd., and, if the manufacture is
of any other substance, with the letters Rd., and the year of
registration at the edge or upon any convenient part thereof.
Section 51, however, reads:
51. Before delivery on sale of any articles to which a regis
tered design has been applied, the proprietor of the design shall
cause each such article to be marked with the prescribed mark,
or with the prescribed word or words or figures, denoting that
the design is registered; and if he fails to do so the copyright in
the design shall cease, unless the proprietor shows that he took
all proper steps to ensure the marking of the article.
Section 51 which first took form in the 1883
United Kingdom legislation was amended in 1907:
(Patents and Designs (Amendment) Act, 1907
(U.K.), 7 Edw. 7, c. 28).
32.—(1) So much of section fifty-one of the principal Act as
provides that the copyright in a registered design shall cease if
the proprietor fails to comply with the requirements of that
section with respect to the marking of articles to which the
design has been applied is hereby repealed; but, in the event of
any failure to comply with any such requirements, the proprie
tor of the design shall not be entitled to recover any penalty or
damages in respect of any infringement of his copyright in the
design, unless he shows that he took all proper steps to ensure
the marking of the articles, or unless he shows that the infringe
ment took place after the person guilty thereof knew or had
received notice of the existence of copyright in the design.'
If the Canadian legislation of 1927, referred to
in the Allaire decision, was modelled on the
United Kingdom legislation, it was modelled on a
pre-1883 version. The Canadian legislation
appears to have had its roots in the Canadian The
Trade Mark and Design Act of 1879, S.C. 1879, c.
22, section 23, to which President Jackett referred
in the Cimon case (supra). This, in turn, was
founded on pre-Confederation legislation of the
' Carried forward in Patents and Designs Act, 1907 (U.K.),
7 Edw. 7, c. 29.
Province of Canada: An Act to amend the Act
respecting Trade Marks, and to provide for the
Registration of Designs, S.C. 1861, c. 21, sections
11, 13 which may have been inspired by the
United Kingdom legislation of 1842: An Act to
consolidate and amend the Laws relating to the
Copyright of Designs for ornamenting Articles of
Manufacture, 1842, 5 & 6 Vict., c. 100, section
IV. This last was not as categorical with respect to
the effect of a failure to mark as was the 1883
United Kingdom legislation, but it was more so
than the corresponding Canadian legislation of
1861.
In any event, the present section 14 of the
Industrial Design Act is clearly awkward. It deals
with two distinct subject-matters: registration and
marking. It seems to have endured in this awkward
form from the days when whole statutes were
written in one sentence. The question of interpreta
tion, as I understand it is: (1) whether the words
"In order that any design may be protected" modi
fies both "it shall be registered within one year
from the publication thereof" and "the name of
the proprietor shall appear upon the article ...
with the letters 'Rd.' and the year of registration";
and (2) if the phrase does modify both events,
what consequences follow therefrom (i.e. are the
consequences to be found by reading section 14
together with other sections of the Act or does the
section carry within itself the consequences of
non-compliance, i.e. invalidity or unenforceability
of the design registration?)
President Jackett, in the Cimon case (supra, at
page 846), was of the view that the opening words
of section 14 modified only the phrase "it shall be
registered within one year from the publication
thereof'. Mr. Justice Walsh took a contrary view
in the Mainetti case (supra) while, at the same
time stating, at page 224, that the interpretation of
section 14 "appears to still be controversial".
Also, it must be asked whether the fact that
Canada is a signatory to the International Conven
tion for the Protection of Industrial Property, has
some relevance to the interpretation of an ambig-
uous section of a statute. Goldsmith in Trade
Marks and Industrial Design, Toronto, Carswell,
1982, at 141-254, note 73, suggests that section 5D
of the Convention requires that signatories not
deny intellectual property rights to owners because
of a failure to mark the articles in a specified
manner. Mr. Justice Walsh also makes reference
to this point of view in the Mainetti case, supra.
While that international convention would not be
in force in Canada without implementing legisla
tion to so provide, ambiguous sections of statutes
should be interpreted in a manner not to defeat the
intention of international conventions which
Canada has signed, when ambiguity exists. The
argument before me on this aspect of the issue was
not extensively canvassed, as would be required to
be on a determination at trial.
In Hughes on Copyright and Industrial Design,
at page 1656, the following summary of the juris
prudence is found:
The Courts have indicated that the purpose of this require
ment as to marking is to indicate to the public who is the owner
of the design; if the owner is an assignee of the original
proprietor, then the assignee's name alone is to appear. The
purpose in requiring the name of the owner to be marked is to
enable anyone wishing to negotiate a licence to know with
whom to deal.
It is not clear as to what are the effects of failure to mark. If
marking is completely omitted it would appear that an action to
enforce a registered design may be dismissed, although if the
omission is only made from a few items not intended for
general distribution, such omission would not necessarily defeat
such an action, and an informality in marking such as a
contraction of the full name of the owner of the design, will not
defeat an action to enforce the design. The Courts have stated
that these working requirements must be strictly adhered to,
and failure to mark will result in the loss of protection of the
registration.
And in Hughes on Copyright and Industrial
Design Newsletter, Issue 1, No. 1, Nov. 1984:
(a) Marking
The provisions of the Act require that articles bearing the
registered industrial design be marked and have been thought
by many practitioners to be reasonably elastic, and that failure
to mark would not defeat an action, but rather perhaps limit
damages or other relief (sec discussion in [§12]). Walsh J. of
the Trial Division of the Federal Court in Mainetti SPA y ERA
Display Co Ltd (1984), 80 CPR (2d) 206, reviews several
authorities on the point, and concludes by stating at p. 224:
While the interpretation to be given to s. 14 of the Act
appears to still be controversial, I am of the view it should be
strictly complied with and that plaintiff has failed to do this
and therefore has lost the protection of it.
It is to be noted that the defendant did not seek a declaration
that the registration was invalid, therefore, to some extent, this
statement may be considered to be obitur [sic] dicta.
The conclusion I draw from the jurisprudence,
then, is: (1) substantial compliance with the mark
ing requirements set out in section 14 is sufficient
to meet the exigencies of that section; (2) the
effect of non-compliance with the marking provi
sions of section 14 (i.e. where there is no substan
tial compliance) is uncertain. This last will prob
ably remain so until a decision of the Federal
Court of Appeal determines the matter.
The conclusion that substantial compliance is
sufficient to meet the exigencies of section 14
follows from President Jackett's decision in the
Cimon case (supra), and from decisions such as
Heinrichs v. Bastendorff (1893), 10 R.P.C. 160
(Q.B.). In the Cimon case, the defect as noted
above was a failure to describe the name of the
owner as "Cimon Limited"; it was described as
"Cimon". In the Heinrichs v. Bastendorff case the
articles were marked with the designation "Regd"
instead of "Rd". It was held that this did not
constitute non-compliance with the marking provi
sions. In Fielding v. Hawley (1883), 48 L.T. 639
(Q.B.) the marking of one part of a butter dish
(the base but not the cover) was held to be suffi
cient and the fact that the marking might become
obliterated in manufacturing the article, was held
not to deprive the registered owner of the protec
tion of the statute. In John Harper & Co., Limited
v. Wright and Butler Lamp Manufacturing Com
pany, Limited, [1896] 1 Ch. 142 (C.A.) it was
held that the adding of extraneous numbers which
ought not to be there did not result in non-compli
ance with the relevant marking provisions.
To turn then to the present case, it is clear that
as the jurisprudence stands, the consequences of
non-compliance with the marking provisions of
section 14 are unclear. If the effect is only to
preclude damage claims and penalties against an
unwitting infringement (because of lack of notice)
then the fact that the defendant had actual notice
in this case means that a failure to mark would not
preclude the plaintiff's obtaining the remedy
sought in this case. In the absence of a Federal
Court of Appeal decision determining the conse
quences of such non-compliance, I would not deny
the plaintiff an interlocutory injunction for having
failed to demonstrate "a serious question to be
tried".
What is more, however, the plaintiff has demon
strated a "serious question to be tried" with
respect to another aspect of this case. The plain
tiffs bed guards were marked with the owner's
name L.M. Lipski Ltd. There was a designation
comparable to "Rd" (i.e. R. Design) which would
alert any viewer to the fact that the design had
been registered. There was no year as required by
section 14. There was, however, a copyright notice
which gave some indication of the time frame
within which the design must have been first pub
lished. Despite the fact that numbers were includ
ed which were extraneous for Canadian design
registration purposes, there is no doubt that there
was sufficient information on the articles to alert
an individual to the fact that the design was likely
to have been registered and to allow that registra
tion to be found without great difficulty. The
question that arises then is whether the marking
constitutes substantial compliance with the provi
sions of section 14. In my view, this constitutes a
serious question to be tried.
It has been held in American Cyanamid Co y
Ethicon Ltd, [1975] 1 All ER 504 (H.L.) that it is
sufficient for an applicant to prove "a serious
question to be tried", in order to be entitled to an
interlocutory injunction, providing the other ele
ments required for the granting of such injunction
are also in his or her favour (i.e. balance of
convenience, irreparable harm). This test has been
adopted and applied both in this Court and in the
Supreme Court of Canada: Aetna Financial Ser
vices Ltd. v. Feigelman et al., [1985] 1 S.C.R. 2,
at pages 9-10; Manitoba (Attorney General) v.
Metropolitan Stores Ltd., [1987] 1 S.C.R. 110, at
pages 127-128; Interlego AG et al. v. Irwin Toy
Ltd. et al. (1985), 3 C.P.R. (3d) 476 (F.C.T.D.);
Ikea Ltd. et al. v. Idea Design Ltd. et al. (1987),
13 C.P.R. (3d) 476 (F.C.T.D.); Cabot Corp. et al.
v. 3M Canada Inc. (1987), 15 C.P.R. (3d) 247
(F.C.T.D.). There are also many other similar
decisions.
At the same time, some cases have indicated
that it is not always appropriate to use the "serious
question to be tried" test. The Supreme Court of
Canada, in the Metropolitan Stores case (supra)
refrained from making any categorical pronounce
ment as to its general applicability. In some situa
tions it is clear that it is appropriate to use a more
stringent test such as a prima facie case or a
strong prima facie case: see, generally Hoffman-
La Roche Ltd. v. Apotex Inc. (1982), 72 C.P.R.
(2d) 183 (Ont. H.C.); Mirabai Art Glass Ltd. v.
Paradise Designs Ltd. (1986), 13 C.P.R. (3d) 88
(F.C.T.D.); Duomo Inc. v. Giftcraft Ltd. (1984), 1
C.P.R. (3d) 165 (F.C.T.D.); Syntex Inc. v. Apotex
Inc., [1984] 2 F.C. 1012; 1 C.P.R. (3d) 145
(C.A.); Creations 2000 Inc. et al. v. Canadian Tire
Corp. et al. (1986), 15 C.P.R. (3d) 33 (F.C.T.D.).
A review of the recent jurisprudence was given by
Mr. Justice McNair in Supreme Aluminium
Industries Ltd. v. Kenneth M. Smith Inc. et al.
(1985), 1 C.P.R. (3d) 1 (F.C.T.D.) and another by
Mr. Justice Addy in Turbo Resources Ltd. v.
Petro Canada Inc. (1988), 17 F.T.R. 28
(F.C.T.D.).
The Federal Court of Appeal has also addressed
itself to the issue recently in both Syntex Inc. v.
Apotex Inc., [1984] 2 F.C. 1012; 1 C.P.R. (3d)
145 (C.A.) and Yri-York Ltd. v. Canada (Attor-
ney General), [1988] 3 F.C. 186 (C.A.).
It is neither necessary nor useful to set out the
details of these cases. Suffice it to say there are a
variety of circumstances which have been identi-
fied as ones in which it is not appropriate to use
the test of a "serious question to be tried". This is
particularly true when the granting of the injunc
tion will effectively dispose of the case. I accept
that there is no one test applicable in all circum
stances; the test is a flexible one. This freeing up of
the rigid rules in order to ensure that the equitable
remedy of an interlocutory injunction can be
granted when on balance, in regard to all the
factors, it is reasonable to do so, is the change
wrought by the American Cyanamid case. Cer
tainly, in this case, the granting of an interlocutory
injunction will not dispose of the issue. Also, it
does not fit within the facts of any of the cases in
which it has been held inappropriate to grant an
injunction on that basis. And, I cannot find any
compelling reason for refusing to do so. In the
circumstances of this case, I have no doubt that it
is appropriate to apply the "serious question to be
tried" test. The plaintiff has proved that such
exists.
The plaintiff also raises an argument based on
the contention that the defendant was passing off
his product as that of the plaintiff's and that this
activity should be enjoined. The passing off argu
ment is based largely on the marketing practices
which have been described above. Counsel for the
defendant indicated that he was taken by surprise
by this argument; that he had not expected it to be
raised and was not prepared to respond to it on
this application.
A description of some of the proceeding which
predate the hearing of the present application is
required. The plaintiff's original application
sought an interlocutory injunction restraining the
defendants from:
(a) applying for the purposes of sale Registered Design No.
56622 in whole or in part, or a fraudulent imitation
thereof, to the ornamenting of any article of manufacture
or other article to which an industrial design may be
applied, and from importing, publishing, selling or expos
ing for sale or use, any such article to which Registered
Design No. 56622 or fraudulent imitation thereof has been
applied;
(b) infringing the copyright of the plaintiff in and to the
original literary and artistic works comprising the packag
ing for BED GUARD:
(c) producing, printing, reproducing, publishing, exposing and
offering for sale by way of trade, distributing for the
purposes of trade or selling packaging for a bed guard
product which is a copy of the whole or a substantial part
of, or is a colorable imitation of, the plaintiffs packaging
for BED GUARD;
(d) carrying on business or in any other way directing public
attention to the wares, or business of the Defendants in
such a way as to cause or be likely to cause confusion in
Canada between the Defendants' wares or business and
those of the Plaintiff;
(e) passing off their wares as and for the wares of the
Plaintiff.
On December 16, 1987 Mr. Justice Denault
issued an order on consent enjoining the defen
dants from engaging in any of the activities set out
in paragraphs (b) through . (e) above. This was an
interlocutory order to remain in effect until trial.
It is argued by the plaintiff that Mr. Justice
Denault's order relates to the passing off of the
packaging only, not of the product itself and that
this latter issue is still to be determined in these
proceedings. I do not read the December 16, 1987
order in that restricted fashion. In my view, it
enjoins the passing off of the product as well as the
packaging. If there is any such continued activity,
the plaintiffs remedy is a contempt of court pro
ceeding, not an application for another interlocuto
ry order to enjoin passing off.
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.