Date: 20080623
Docket: T-1244-05
Citation: 2008 FC 776
Montréal, Quebec, June 23, 2008
PRESENT: Richard Morneau, Esq.,
Prothonotary
BETWEEN:
ADIDAS AG,
ADIDAS INTERNATIONAL MARKETING BV and
ADIDAS CANADA LIMITED
Plaintiffs
and
2690942 CANADA INC. c.o.b. CAMPEA
Defendant
REASONS
FOR ORDER AND ORDER
[1]
The Court is seized by each party with a motion for the
determination of questions arising from the examination for discovery of a
representative of each party.
[2]
These motions take place in the context where the
Plaintiffs (collectively ‘Adidas’) have instituted a claim in relation to the
alleged infringement by the Defendant (hereinafter ‘Campea’) of Adidas’ 3-stripes
trade-mark registration and Adidas’ copyright registration covering the Euro
2004 logo.
[3]
More specifically, Adidas alleges that Campea’s sale of
soccer jerseys bearing two and three stripes on the shoulders and sleeves
infringe Adidas’ trade-marks and that Campea’s sale of its LT Striker soccer
balls bearing a design known as the Euro 2004 logo constitutes passing off,
copyright infringement and depreciation of the value of the goodwill attached
to Adidas trade-marks.
[4]
In its amended statement of defence dated March 1, 2007, Campea alleged, inter alia, that its was no longer selling
soccer shirts bearing 3 parallel stripes and that its soccer shirts bearing 2
parallel stripes did not infringe any of Adidas’ trade-marks. Campea also
alleges that further to its receipt of a demand letter from Adidas, it modified
the design features appearing on its soccer balls in order for said features to
be non-infringing.
[5]
Prior to the commencement of the discovery of Campea’s
representative, Mr. Mendy Dalfen, the parties had agreed to bifurcate the
issue of the quantum of damages from this action, but that the discovery would
nonetheless proceed in relation to the quantum of damages resulting from
Campea’s sale of soccer shirts bearing 3 stripes. An order to that effect was
entered on June 18, 2008.
Questions to answer and records to produce on an
examination for discovery: applicable general principles
[6]
In Reading & Bates Construction Co. and al v.
Baker Energy Resources Corp. and al (1988) 24 C.P.R. (3rd) 66 at
70-72 (F.C.T.D.), 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. 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
International (1987), 13 C.P.C. (2d) 150 (Ont. H.C.); Canex Placer Ltd.
v. A.-G. B.C. (1976) 63 D.L.R. (3d) 282 (B.C.S.C.); and Compagnie
Financiere et Commerciale du Pacifique v. Peruvian Guano Co. (1882),
11 Q.B.D. 55 (C.A.).
2. On an examination for discovery prior to the
commence-ment 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 Ltd. (1984), 82 C.P.R. (2d) 36
(F.C.T.D.), aff'd (1984), 1 C.P.R. (3d) 242 (F.C.T.D.).
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 (F.C.T.D.) at p. 108.
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 difficultly 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., supra, 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 Ltee/Ltd. v.
Valmet Oy (1981), 60 C.P.R. (2d) 145 (F.C.T.D.).
[Emphasis added]
[7]
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.
[8]
With this in mind, I shall now evaluate the propriety of
the questions and documents requested. I shall deal herein with only the
questions which were still in issue at the end of the hearing and not,
therefore, with the matters which were withdrawn or to be answered willingly.
[9]
In addition, unless I make a specific comment hereunder,
one must assume that the faith of any particular question rests on the position
expressed by the party supporting said result.
[10]
I will address first Adidas’ motion and then Campea’s
motion.
I - Plaintiffs Adidas’ motion
[11]
The only outstanding matter relating to Adidas’ motion is
item no. 4 which pertains to Adidas’ demand for the production by Campea
of copies of its invoices relating to its sale of soccer shirts bearing 2
stripes.
[12]
As described in Campea’s written representations, Adidas
already has seen and obtained knowledge of the following:
a)
Samples of the soccer shirts bearing 2 parallel stripes
purchased by Campea;
b)
The quantity of such soccer shirts purchased by Campea;
c)
The purchase price of the soccer shirts;
d)
For most of such soccer shirts, the quantity sold and the
inventory on hand as of March 15, 2007;
e)
A copy of Campea’s 2007 soccer catalogue.
[13]
However, and even though a bifurcation order has been
issued by this Court on June 18, 2008, I agree with Adidas that
Campea’s invoices related to the sale by Campea of its soccer shirts bearing
two parallel stripes is relevant information at this stage since the dollar
value ascribed by Campea to its product is relevant for Adidas to support its
good reputation. Indeed the greater the dollar value could be, the greater
support this might bring to Adidas’ reputation. In addition, a fair and
complete reading of the transcript extracts to which Campea referred the Court to
at the hearing brings one to understand that at the Defendant’s representative
discovery, counsel for Adidas did not agree to limit his client’s right with
respect to such sale information.
[14]
Adidas’ motion will therefore be granted, the whole with
costs in the cause. Campea’s representative, Mendy Dalfen, shall answer in
writing item 4 within fifteen (15) days of the date of the Order and shall
re-attend, within the next thirty (30) days thereafter, for continued
examination for discovery, at Campea’s expense, to answer any proper questions
arising from item 4 and from the answers and documents provided by Campea
since February 15, 2007.
II - Defendant Campea’s motion
[15]
There are eight (8) schedules of questions still in
dispute.
Schedule A
[16]
Said schedule deals with questions taken under advisement
at discovery by Adidas. Out of ten (10) questions listed therein, two
questions, to with, Q 7 and 8 were still in dispute at the time of
hearing.
[17]
As agreed at the hearing, satisfactory answers to questions 7 and 8 will be for Adidas to produce the agreements referred
to therein, provided they can be located.
Schedule B
[18]
This schedule relates to sponsorship agreements. Since
Adidas has answered similar questions in the past, it shall answer
questions 2 to 5. I believe said questions are proper and
relevant questions intended to narrow the issues. I do not think they can
be considered privileged or as merely seeking the production of evidence.
Schedule C
[19]
It deals with proceedings instituted by Adidas in Canada or judgments rendered abroad regarding the use by a
third party of a trade-mark consisting of two (2) parallel stripes in
association with sport products.
[20]
The Court notes the grounds of opposition raised by Adidas
to the effect that 2‑stripes infringement allegations here do not make
other proceedings relevant. Adidas notes that there is no pleaded allegation
that Adidas has been involved in other proceedings or that even hints at such a
possibility.
[21]
Consequently, I agree with Adidas that the questions under
this Schedule C are in the nature of a fishing expedition and shall not be
answered.
Schedule E
[22]
This category deals with questions related to Adidas’
amended statement of claim.
[23]
For the grounds raised by Adidas in paragraph 30 of
its written representations, remaining questions 2 and 3 shall not be
answered.
Schedule F
[24]
This schedule is described by Campea as dealing with
questions not answered completely.
[25]
Questions 3 and 4 need not be further answered.
The additional items covered by these questions are not in issue in this case.
The usefulness of the additional information sought has not been established.
Schedule G
[26]
Said schedule deals with questions relating to Adidas’
copyright registration no. 1036707 (the Euro 2004 logo) and the alleged
infringement thereof.
[27]
Question 1 hereunder need not be answered further
considering the answer provided to same at page 568 of Adidas’ motion
record in response, which stipulates that an assignment of copyrights to Adidas International Marketing BV has
been produced to Campea.
Schedule H
[28]
This schedule deals with Adidas’ production documents.
[29]
Questions 1 and 2 here relate to two documents
listed in Adidas’ affidavit of documents and seek to bring Adidas to identify
in respect of which allegations in its amended statement of claim said
documents could be raised.
[30]
Here I think said questions seek to force Adidas to
identify its evidence and therefore said questions are improper and need not be
answered.
Schedule I
[31]
The questions under this schedule relate to Campea’s
amended statement of defence.
[32]
Considering Adidas’ admission in relation to paragraph 27
of the further amended statement of defence of Campea, the content of Campea’s production
document no. 8 and the fact that Campea is not requesting Adidas to
particularize the substance of the telephone conversation alleged in paragraph 27
aforementioned, the questions under this schedule shall be answered. I do
not consider that said questions, by their extent and as framed, violate the
settlement-discussion privilege.
[33]
Campea’s motion will be granted in part as follows, with no
costs since success is divided.
ORDER
Therefore, with respect to
each motion, this Court orders in turn as follows:
1 - Adidas’
motion is granted, the whole with costs in the cause. Campea’s representative,
Mendy Dalfen, shall answer in writing item 4 within (15) days of the date
of the Order and shall re-attend, within the next thirty (30) days thereafter,
for continued examination for discovery, at Campea’s expense, to answer any
proper questions arising from item 4 and from the answers and documents
provided by Campea since February 15, 2007;
2. As
to Campea’s motion, it is granted in part as follows, with no costs since
success is divided. The representative of Adidas, Mrs. Vanessa Backman,
shall answer in writing within the next fifteen (15) days the questions ordered
to be answered in the reasons for order herein and shall re-attend, at her own
expense, within forty (40) days thereafter, at a further examination for
discovery, by video conference if parties can agree and, if not, in person in Montreal,
to answer all proper follow-up questions arising from the questions ordered to
be answered;
3. As
to the scheduling of the remaining steps in this action, on the basis of the
discussion that took place at the hearing on June 18, 2008, seasoned
counsel for the parties shall come to an agreement as to a proper and
reasonable schedule for said steps and shall provide the Court, within thirty
(30) days, with a concise and joint draft order encompassing said schedule.
“Richard
Morneau”
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