Date: 20011010
Docket: T-815-01
Neutral citation: 2001 FCT 1104
BETWEEN:
LIFEGEAR, INC.
and PRIDE INTERNATIONAL INC.
Plaintiffs
- and -
URUS INDUSTRIAL CORPORATION
Defendant
[1] On Monday, October 1, 2001, I gave oral reasons on the application by LifeGear Inc. ("LifeGear") and Pride International Inc. ("Pride") (the "plaintiffs") to strike in its entirety the defendant's counterclaim and parts of its defence on the ground that the matters pleaded were beyond the jurisdiction of this Court or were frivolous or vexatious. These written reasons confirm my oral observations.
[2] The plaintiffs are suing the defendant for trade-mark infringement and passing-off. LifeGear, a U.S. based manufacturer of fitness equipment, is the registered owner in Canada of the trade-marks LIFEGEAR and SATURNE. Pride, an Ontario company, is LifeGear's distributor and sales agent in Canada.
[3] The defendant, an Ontario company, defends and counterclaims, based on a Canadian distribution agreement entered into with LifeGear in the mid 1998 for "the Koolatron LifeGear Saturne Elliptical Exercise Product". From this agreement, the defendant asserts proprietary rights in the name SATURNE which is, as noted, LifeGear's registered trade-mark in Canada.
[4] Relations between LifeGear and the defendant soured and the agreement was terminated. Allegations are made by the plaintiffs in their statement of claim that the defendant is importing an inferior exercise machine, under the name SATURNE but made by another manufacturer.
[5] In its counterclaim, the defendant claims "damages for breach of the Defendant's proprietary rights and other rights described herein, breach of contract, interference with contractual relations and loss of business, income, reputation and goodwill in the amount of $2,000,000.00". The balance of the counterclaim advances various forms of relief and in paragraph 68, alleges the plaintiffs' conduct constitutes, inter alia, improper interference with the defendant's contractual relations and breach of LifeGear's own contractual relations with it.
[6] Based on the authority of Innotech Pty. Ltd. v. Phoenix Rotary Spike Harrows Ltd. et al. (1997), 74 C.P.R. (3d) 275 (F.C.A.) and Castlemore Marketing Inc. v. Intercontinental Trade and Finance Corp. et al. (1996), 66 C.P.R. (3d) 147 (F.C.T.D.), I struck the defendant's counterclaim and paragraphs 50 to 64 of its defence on the grounds the pleadings there asserted causes of action beyond the jurisdiction of this Court essentially, breach of contract or tort.
[7] I granted the defendant leave to amend the counterclaim and the paragraphs in the statement of defence which I struck because the defendant had asserted, albeit somewhat vaguely, proprietary rights, both as a shield and a sword, pertaining to the right to use and obtain benefits from the trade-mark SATURNE stemming from the contractual joint venture relationship in 1998 between LifeGear and the defendant which has now been terminated, wrongfully in the defendant's view.
[8] Counsel for the plaintiffs attacked other paragraphs in the defendant's statement of defence. I need not rule on those issues because I invited counsel for the defendant to review and recast his entire pleadings as a result of the order I made.
[9] The defendant is to serve and file its amended statement of defence and counterclaim within twenty-one (21) days of the date of this order and the plaintiff shall reply within the time provided by the Rules after being served with the amended pleading.
[10] As the plaintiffs were largely successful, one set of costs is awarded to the plaintiffs in the cause.
J U D G E
OTTAWA, ONTARIO
OCTOBER 10, 2001