Date: 20021210
Docket: T-815-01
Neutral Citation No.: 2002 FCT 1285
BETWEEN:
LIFEGEAR, INC.
and PRIDE INTERNATIONAL INC.
Plaintiffs
- and -
URUS INDUSTRIAL CORPORATION
Defendant
(Delivered from the Bench in Toronto, Ontario
on December 6, 2002)
[1] This is a motion for summary judgment brought by the plaintiff seeking summary judgment on a large part of its claim and dismissal of the defendant's counterclaim.
[2] The action is for trade mark infringement. The plaintiff is the owner of two registered Canadian marks, one being a principal component of its corporate name "Lifegear" and the other being the word "Saturne".
[3] The plaintiff entered into a distribution agreement with the defendant for the distribution in Canada of a piece of athletic machinery known as the Saturne elliptical trainer. The defendant was to be the exclusive Canadian distributor for that piece of equipment. There is between the parties, at least on the material which I have before me on this motion, a genuine dispute as to whether one or the other or quite possibly both is in breach of that agreement and as to whether that agreement has or has not been properly terminated by the plaintiff.
[4] There is, however, no dispute whatever over the fact and it is indeed admitted that the defendant has sold and is apparently still selling elliptical trainers in Canada not of the plaintiff's manufacture and bearing the "Saturne" trade mark. While the plaintiff asserts its claim under subsections 7 (b) and (c) of the Trade Mark Act, as well as under section 19 and while it asserts a claim to breach of both the "Lifegear" and the "Saturne" marks, there is no evidence of goodwill, reputation, confusion or even the existence of any unregistered trade marks belonging to plaintiff and in those circumstances, I cannot possibly grant summary judgment of the section 7 claims, nor is there any evidence of breach by the defendant of the plaintiff's "Lifegear" mark and summary judgment equally cannot be granted on that part of the claim.
[5] It is, however, otherwise regarding the registered "Saturne" mark and the claim under section 19. As I have said, the defendant admits the use of the "Saturne" mark in connection with the sale and distribution in Canada of goods which are not of the plaintiff's manufacture and do not originate from the plaintiff. Its principal defence, as I understand it, is one of colour of right. It asserts that the distributorship agreement gives it proprietary rights in the registered Canadian trade mark "Saturne". I can only say that, in my view, it very clearly does not. It is trite law to say that a distributor does not by the mere fact of being appointed a distributor acquire proprietary rights in the trade marks of the goods which he distributes. Those marks continue to be the property of their owner who is generally the manufacturer.
[6] Furthermore, while it is of course possible for a distributorship agreement to give to the distributor proprietary rights in the manufacturer's trade marks, it is quite clear to me that this distributorship agreement does not do so. There is simply no language in it which is capable of that construction.
[7] As a subsidiary defence, the defendant argues that the plaintiff has acquiesced in its use of the "Saturne" registered mark. In my view, the evidence on this point, which is very sparse, does not even raise an issue for trial. Whatever the plaintiff may or may not have acquiesced in at the time the falling out between the parties started to take place, and I make no finding on that, it was not use by the defendant of the plaintiff's registered Canadian trade mark "Saturne". That being so, the counterclaim which is founded on alleged breaches by the plaintiff of the defendant's rights in the "Saturne" mark will have to be dismissed on this summary judgment motion.
[8] The defendant also takes issue with a part of the remedy sought by the plaintiff on this motion, namely injunctive relief. It asserts correctly that the record contains no evidence of irreparable harm suffered by the plaintiff as a result of the defendant's breaches. But the requirement of evidence of irreparable harm is a requirement attached only to applications for interlocutory injunctions. It has nothing to do with an application for a final injunction. The owner of a right whose right is imperilled or breached by another person is entitled to seek injunctive relief to prevent that breach.
[9] On a summary judgment motion, the plaintiff is seeking an injunction which is by definition a final injunction, a permanent injunction. Summary judgment, by definition, seeks final judgment on all or part of the claim. The absence of evidence of irreparable harm is simply irrelevant to the issue that I have to decide today.
[10] I must also mention here another plea that the defendant raised during argument which, in my view, was of no merit whatever, namely that the plaintiff is guilty of latches or delay. The evidence simply does not support that claim. The evidence is that the plaintiff discovered the defendant's activities in breach of their registered trade mark very early in the year 2001, this action was instituted within a matter of months thereafter.
[11] Accordingly, the plaintiff is entitled to summary judgment declaring it to be the owner of the Canadian registered trade mark "Saturne" and declaring the defendant to have infringed that mark. It is also entitled to injunctive relief against the defendant and its officers and employees in the usual terms forbidding further breaches of the plaintiff's mark. It is also entitled to an order to deliver up in the usual terms.
[12] The plaintiff has asked that I make an order for reference on the issue of damages, but as I indicated during the hearing, it is not all together clear to me that even though there has been a breach there is necessarily an issue of fact only as to the quantum of damages. I make no finding one way or the other but the evidence before me does seem to indicate first of all that the plaintiff has not made and is not making any effort to exploit its trade mark in Canada and that the defendant has in effect almost abandoned its attempts to sell the "Saturne" trade marked elliptical trainer which apparently on the defendant's view is not a very marketable product. As I say, I make no finding on that, but it seems to me that there may be an issue between the parties for trial, not only as to quantum of damages but also as to whether or not damages can be claimed at all. So, I will not make an order for a reference, I would simply defer the issue of damages and other remedies to trial.
[13] So, summary judgment will go for the plaintiff in the terms described. Plaintiff has asked for an order for costs on a solicitor and client basis. In my view their success has been only partial and I do not think that this is a case where I should order solicitor and client costs. There is another reason that impels me to that view, it seems to me that this is a case which ought to be settled. I think the parties should make use of the services of Prothonotary Lafrenière who is the lead manager on this file and I think that it would not be helpful if they were to continue to bleed each other dry in what is in fact, I think, a pretty sterile dispute. Plaintiff may, however, have its costs to be assessed under Column III.
[14] The plaintiff is to draw an order in compliance with these reasons pursuant to Rule 394 of the Federal Court Rules, 1998 and are to move for judgment after submitting the order to defendant's counsel. That motion should be made pursuant to Rule 369.
Judge
Ottawa, Ontario
December 10, 2002
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: T-815-01
STYLE OF CAUSE: Lifegear Inc. et al v. Urus Industrial Corporation
DATE OF HEARING: December 6, 2002.
PLACE OF HEARING: Toronto, Ontario.
REASONS FOR ORDER BY: Hugessen J
APPEARANCES BY: Mr. James Buchan
Mr. Dave Deonarine
For the Plaintiffs
Mr. Brian Belmont
For the Defendant
SOLICITORS OF RECORD: Gowling Lafleur Henderson LLP
Barristers and Solcitors
Commerce Court West
Suite 4900
Toronto, Ontario
M5L 1J3
For the Plaintiffs
Belmont, Fine & Associates
Barristers and Solicitors
1120 Finch Avenue West
Suite 601
Toronto, Ontario
M3J 3H7
For the Defendant