BETWEEN:
Defendant by counterclaim
and
Plaintiff by counterclaim
REASONS FOR ORDER
[1] This is a motion in writing by the defendant and plaintiff by counterclaim Trio Selection Inc. (Trio) pursuant, inter alia, to rules 97, 240 and 369 of the Federal Courts Rules (the rules) for the determination of a series of questions arising out of the examination for discovery of Mr. Charles Scott Amann, representative of the plaintiff and defendant by counterclaim, Orange County Choppers Inc. (OCC)
[2] In its motion record in response to this motion, OCC requires that said motion be not disposed of on the basis of the written material submitted by both parties but that the motion be the subject of an oral hearing.
[3] Upon consideration, I am satisfied that the motion at bar can and will be disposed of on the basis of the written material submitted.
Factual background
[4] This motion arises out of a trade marks dispute between two competitors involved in the retail clothing business.
[5] The pleadings in this case can be described generally as follows:
[6] By statement of claim dated and served on Trio on June 30, 2005, OCC commenced the present action seeking a declaration that the trade-mark registration number TMA 609,612 for the trade-mark ORANGE COUNTY registered by Trio on May 6, 2004 is invalid on the grounds that the trade-mark ORANGE COUNTY was not registerable at the time it was registered by Trio, and that the trade-mark ORANGE COUNTY is not distinctive.
[7] On July 29, 2005, Trio filed a statement of defence and counterclaim, in which it seeks damages and a permanent injunction against OCC on the grounds that the use of the trade-mark ORANGE COUNTY CHOPPERS by OCC in association with clothing would be likely to create confusion with Trio’s trade-mark ORANGE COUNTY.
[8] On September 12, 2005, OCC filed a motion to strike allegations of the defence that referred to negotiations that took place between the parties through their respective counsel before the service of OCC statement of claim.
[9] On September 20, 2005, Justice Blais of this Court granted OCC’s motion to strike and struck certain paragraphs or parts of paragraphs of the defence on the basis that they were illegal, irrelevant, privileged or inadmissible.
[10] On October 17, 2005, Trio filed an amended defence and cross-demand. On October 20, 2005, OCC filed a reply and defence to counterclaim. On October 26, 2005, Trio filed a reply and defence to counterclaim of OCC.
[11] The affidavits of documents were exchanged on November 24, 2005.
[12] As indicated previously, Mr. Charles Scott Amann was examined on discovery on March 21, 2006 as OCC’s representative.
[13] Objections were made during the course of the examination of Scott Amann that Trio is contesting herein.
The law on discovery
[14] In Reading & Bates, (1988) 24 C.P.R. (3rd) 66 at 70-72 (F.C.T.D.) (hereinafter Reading & Bates), Mr. Justice McNair, in a general six-point review, first defines in points 1 to 3 the parameters that determine whether a question or a document is relevant, and then, in points 4 to 6, sets out a series of circumstances or exceptions in which, on the off chance, at the end of the day, a question need not be answered or a document need not be produced.
[15] The Court states, at pages 70 to 72:
1.. The test as to what documents are required to be produced is simply relevance. The test of relevance is not a matter for the exercise of the discretion. What documents parties are entitled to is a matter of law, not a matter of discretion. The principle for determining what document properly relates to the matters in issue is that it must be one which might reasonably be supposed to contain information which may directly or indirectly enable the party requiring production to advance his own case or to damage the case of his adversary, or which might fairly lead him to a train of inquiry that could have either of these consequences: Trigg v. MI Movers Int’l Transport Services Ltd. (1986), 13 C.P.C. (2d) 150 (Ont. H.C.); Canex Placer Ltd. v. A.-G. B.C. (1975), 63 D.L.R. (3d) 282, [1976] 1 W.W.R. 644 (B.C.S.C.); and Compagnie Financiere and Commerciale du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B.D. 55 (C.A.).
2.. On an examination for discovery prior to the commencement of a reference that has been directed, the party being examined need only answer questions directed to the actual issues raised by the reference. Conversely, questions relating to information which has already been produced and questions which are too general or ask for an opinion or are outside the scope of the reference need not be answered by a witness: Algonquin Mercantile Corp. v. Dart Industries Canada Ltd. (1984), 82 C.P.R. (2d) 36 (F.C.T.D.); affirmed 1 C.P.R. (3d) 242 (F.C.A.).
3. The propriety of any question on discovery must be determined on the basis of its relevance to the facts pleaded in the statement of claim as constituting the cause of action [...]
4. The court should not compel answers to questions which, although they might be considered relevant, are not at all likely to advance in any way the questioning party’s legal position: Canex Placer Ltd. v. A.-G. B.C., supra; and Smith, Kline & French Laboratories Ltd. v. A.-G. Can. (1982), 67 C.P.R. (2d) 103 at p. 108, 29 C.P.C. 117 (F.C.T.D.).
5. Before compelling an answer to any question on an examination for discovery, the court must weigh the probability of the usefulness of the answer to the party seeking the information, with the time, trouble, expense and difficulty involved in obtaining it. Where on the one hand both the probative value and the usefulness of the answer to the examining party would appear to be, at the most, minimal and where, on the other hand, obtaining the answer would involve great difficulty and a considerable expenditure of time and effort to the party being examined, the court should not compel an answer. One must look at what is reasonable and fair under the circumstances: Smith, Kline & French Ltd. v. A.-G. Can., per Addy J. at p. 109.
6. The ambit of questions on discovery must be restricted to unadmitted allegations of fact in the pleadings, and fishing expeditions by way of a vague, far-reaching or an irrelevant line of questioning are to be discouraged: Carnation Foods Co. Ltd. v. Amfac Foods Inc. (1982), 63 C.P.R. (2d) 203 (F.C.A.); and Beloit Canada Ltee/Ltd. v. Valmet Oy (1981), 60 C.P.R. (2d) 145 (F.C.T.D.).
[Emphasis added]
[16] Furthermore, the list of exceptions in points 2 and 4 to 6 of the Reading & Bates judgment, are not, in my opinion, intended to be exhaustive.
[17] In many situations, the balancing to which the Court refers in Reading & Bates in point 5 will be necessary.
[18] Indeed, as mentioned in Faulding Canada Inc. v. Pharmacia S.p.A. (1999), 3 C.P.R. (4th) 126, at page 128:
[...] the general tendency of the courts to grant broad discovery must be balanced against the tendency, particularly in industrial property cases, of parties to attempt to engage in fishing expeditions which should not be encouraged.
[19] Rule 242 contains a warning to that effect. Paragraphs 242(1)(b) to (d) of the rules read:
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242.(1) Une personne peut soulever une objection au sujet de toute question posée lors d’un interrogatoire préalable au motif que, selon le cas : [...] b) la question ne se rapporte pas B un fait allégué et non admis dans un acte de procédure déposé par la partie soumise B l’interrogatoire ou par la partie qui l’interroge; c) la question est déraisonnable ou inutile; d) il serait trop onéreux de se renseigner auprPs d’une personne visée B la rPgle 241. |
242.(1) A person may object to a question asked in an examination for discovery on the ground that [...]
(b) the question is not relevant to any unadmitted allegation of fact in a pleading filed by the party being examined or by the examining party;
(c) the question is unreasonable or unnecessary; or (d) it would be unduly onerous to require the person to make the inquiries referred to in rule 241. |
Analysis
[20] Trio has regrouped the outstanding questions into eight (8) categories, and OCC has, as is customary to do, agreed to follow the same categorization in its motion record in response.
[21] I shall therefore attempt to adjudicate on this motion by referring to each category and by avoiding wherever possible specific references to individual questions within each category. In some cases, I felt compelled to work on the title of some categories to make it more understandable at first glance.
[22] Before turning to each category in turn, it is appropriate here to list hereunder the main different issues that the pleadings of the parties appear to identify. In that regard, the Court relies generally on the identification done by OCC in its motion record in response. Therefore, those issues are:
1. Whether the trade-mark ORANGE COUNTY registered by Trio is distinctive and registerable; for which OCC has the burden;
2. Whether the use by OCC of the trade-mark ORANGE COUNTY CHOPPERS is likely to create confusion with Trio’s trade-mark ORANGE COUNTY; for which the burden lies with Trio;
3. Whether Trio suffered damages or is entitled to loss of profits as a consequence of the alleged infringement of its trade-mark; for which the burden lies with Trio;
4. Whether each party acted in bad faith.
[23] I shall now turn to each category submitted.
Category A
[24] This category contains one (1) question by which Trio tries to know why OCC didn’t include in its affidavit of documents a cease and desist letter sent to it by Trio on April 23, 2004 along with samples of clothing that were sent with said letter.
[25] OCC does not deny the existence of said correspondence and the impugned letter is or will be before the Court as Trio itself has included it in its affidavit of document. However, as to the very reason why this letter was not included by OCC in the first place in its affidavit of document, I am of the view that this question present in reality little relevancy and the answer sought after would not advance Trio’s case. Therefore, it need not be answered.
Category B
[26] The four (4) questions in this category try to elicit why OCC did not carry a trade-mark availability search before applying for the trade-mark ORANGE COUNTY CHOPPERS in Canada.
[27] Here again, it is now known by all interested that indeed no such search had been carried by OCC, and that the decision in that regard was made by counsel for OCC.
[28] The reason why no availability check was made and whether it is prudent to have an availability check done or not does not advance either party’s case and does not help the Court in determining the issues.
Category C
[29] The one question under this category addresses whether OCC tried to buy Trio’s trade-mark just prior to launching its action herein.
[30] I agree here with OCC that based on rule 242(1)a) this question shall not be answered as the objection to it is based on the privilege related to settlement negotiations, and on the fact that Justice Blais of this Court by his Order dated September 20, 2005 has ruled once on this matter. The fact that Trio tries by all means to establish OCC’s bad faith is not here a reason that brings me to set aside the settlement privilege.
Category D
[31] For my appreciation, this category contains seven (7) questions all dealing with letters of approval of designs sent by OCC to its licenses who sell the clothing. The questions in dispute also go to the production of copies of the designs used by OCC in catalogues. It would appear, although this is not obvious from the wording of the questions, that said questions are restricted to the year 2003. As for the catalogues, it appears that they have been produced and therefore this aspect need not be answered.
[32] As for letters of approvals, I agree with Trio that said letters could help establish with better clarity when OCC started in 2003 to sell clothing in Canada bearing OCC’s trade-mark.
[33] So, question “U. p. 41 line 7-10” must be answered partially by OCC providing letters of approval for the year 2003. All the other questions under this category are denied.
Categories E and F
[34] Now that this Court has issued on September 19, 2006 a protective order in this case, the documents sought for under theses categories shall now be provided by OCC.
Category G
[35] The one question under this category seeks OCC to provide the documents that evidence OCC’s policy on destruction of documents. This question needs not be answered further since it has been sufficiently answered so far by OCC’s representative stating several times that no document to that effect exists.
Category H
[36] This category appears to deal with the availability of the trade-mark ORANGE COUNTY CHOPPERS in the USA. Four (4) questions are found there under.
[37] As for question “U p. 112 line 13, 16-17” it goes to the production of privilege documents. Therefore it need not be answered.
[38] Question “p. 120 line 19-22” has been answered sufficiently.
[39] As for the other two questions, I do not see the relevance of the documentation requested. In addition, it would appear that the application and revised application for the trade-mark ORANGE COUNTY CHOPPERS are available publicly on the Internet. Therefore, these questions need not also be answered.
[40] As for the pursuit of the discovery of Mr. Amann, I am satisfied based on the limited success of Trio herein and on the fact that Mr. Amann is located in the USA that said pursuit shall be conducted in writing.
[41] Therefore, an order shall be issued along with these Reasons ordering:
- OCC to provide Trio, under the protection of the protective order in place if OCC sees fit, a copy of the letters of approval for the year 2003 in relation to category D, and a copy of the documents requested under categories E and F. Said production shall take place on or before November 20, 2006;
- As for the pursuit of the discovery of Mr. Amann, it shall be limited to proper follow-up questions arising from the documents to be produced above. Said questions, and the answers to be provided, shall be carried as a written examination under rule 99. Trio’s questions shall be served pursuant to rule 99(1) on or before December 5, 2006;
- Costs on this motion shall be in the cause;
- For greater certainty, Trio’s motion is otherwise dismissed.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1132-05
STYLE OF CAUSE: ORANGE COUNTY CHOPPERS INC.
Plainiff/Defendant by counterclaim
v.
TRIO SELECTION INC.
Defendant/Plaintiff by counterclaim
WRITTEN MOTION DECIDED IN MONTRÉAL WITHOUT APEARANCE BY PARTIES
REASONS FOR ORDER AND ORDER: PROTHONOTARY MORNEAU
Written submissions:
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Julie Desrosiers Hilal El Ayoubi
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FOR THE PLAINTIFF |
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Claudette Dagenais Jean Faustin Badimboli
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FOR THE DEFENDANT |
SOLICITORS OF RECORD:
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FASKEN MARTINEAU DuMOULIN LLP Montréal, Quebec
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DAGENAIS & ASSOCIÉS Montréal, Quebec
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