Quality Goods IMD Inc. v. Tommy Hilfiger Licensing Inc., 2005 FCA 145

Date: 20050421

Docket: A-45-05

Citation: 2005 FCA 145

Present:           LÉTOURNEAU J.A.

BETWEEN:

                                                    QUALITY GOODS IMD INC.

                                                                                                                                            Appellant

                                                                           and

                                            TOMMY HILFIGER LICENSING INC

                                                                           and

                                               TOMMY HILFIGER CANADA INC

                                                                                                                                      Respondents

                                        Dealt with in writing without appearance of parties.

                                    Order delivered at Ottawa, Ontario, on April 21, 2005.

REASONS FOR ORDER BY:                                                                            LÉTOURNEAU J.A.

Date: 20050421

Docket: A-45-05

Citation: 2005 FCA 145

Present:           LÉTOURNEAU J.A.

BETWEEN:

                                                    QUALITY GOODS IMD INC.

                                                                                                                                            Appellant

                                                                           and

                                            TOMMY HILFIGER LICENSING INC

                                                                           and

                                               TOMMY HILFIGER CANADA INC

                                                                                                                                      Respondents

                                                        REASONS FOR ORDER

LÉTOURNEAU J.A.

[1]                The appellant makes a motion pursuant to Rules 54 and 343 of the Federal Courts Rules to have this Court determine the content of the appeal book, as a result of its appeal and the respondents' cross-appeal, against a decision of a Federal Court judge. The learned judge held that the appellant had infringed the trade-mark Hilfiger Flag Logo, contrary to section 20 of the Trade-marks Act, R.S.C. 1985, c. T-13.

[2]                What is peculiar about the motion is the fact that the appellant seeks an Order requiring the respondents to pay for the costs of the appeal book on a pro rata basis to its requirements for insertion of material in that appeal book. Alternatively, the appellant wants an Order that each party produce its own appeal book and bear the costs of same.

[3]                Rule 343(5) of the Federal Courts Rules provides that the appeal book is to be prepared by the appellant unless the Court orders the Administrator to prepare it. There is no request for such an Order in this case and I would not have granted it in any event.

[4]                There is no specific provision in the Rules addressing the appellant's specific request for sharing the costs of preparing the appeal book. However, Rule 400(6)(a) of the Federal Courts Rules gives the Court the power to award costs in respect of a particular issue or step in a proceeding:

[5]                It may be that, in an appropriate case, Rule 400(6)(a) can be used to achieve the result sought by the appellant either at the preparation stage, or later, at the time of disposing of the appeal. In Canada (Minister of Environment) v. Canada (Information Commissioner) (2001), 14 C.P.R. (4^th) 574, at page 576, I reserved the right to adjudicate on the costs of the appeal books to the panel hearing the appeal, irrespective of the decision on the merits of the appeal.

[6]                Moreover, in case of abuse by a respondent regarding the content of appeal books, I have no doubt that this Court can intervene to protect an appellant's right of appeal and prevent an abuse of its process. Such intervention could take the form of a costs Order or costs-sharing Order.

[7]                The appellant alleges that the respondents were deliberately intransigent and uncooperative with respect to the content of the appeal books in order to unfairly bring financial pressure to bear on the appellant; their behaviour led to the present motion. Their intransigence, the appellant goes on to say, is evidenced by the fact that, upon being served with the motion, they reviewed the material to justify their all-inclusive demand. In so doing, "they arrived at the inescapable conclusion that their previous all-inclusive demands were not tenable. Consequently, ... they have now agreed to voluntarily withdraw from inclusion in the Appeal Book two volumes of the Joint Book of Documents, the Supplementary Joint Book of Documents and one volume of the Supplementary Book of Confidential Documents": see paragraphs 4 and 5 of the Appellant's Reply.

[8]                The appellant is challenging a substantial number of findings of the trial judge relating to issues of confusion or likelihood thereof, distinctiveness, extent of the use of the trade-mark, renown and reputation of the trade-mark, nature of the trade, etc. I only need to take one example to illustrate the broad scope of the appellant's appeal. In paragraph 11 of its Notice of Appeal, the appellant invokes the following in support of its appeal:

Respondents could not prove Appellant's intention to use their Explore Canada Design as a trade-mark. As a result, Respondents were obliged to rely on the "public recognition" argument raised in International Clothiers. However, Respondents not only failed to prove the Appellant's intention to use the Explore Canada design as a trade-mark, they offered no evidence whatsoever of the public recognition of the Explore Canada design as a trade-mark.

To the extent that there was evidence before the trial that proved or could be construed as proving the appellant's intention to use the Explore Canada design as a trade-mark, as claimed by the respondents, surely that evidence that was before the trial judge, although not conclusive or perhaps not even revealing of the appellant's intent at first sight, ought to be included in the appeal books.

[9]                The respondents submit that their cross-appeal requires that no additional documents be included in the appeal books other than what is required to respond to the allegations made by the appellant in its Notice of Appeal.

[10]            Where there are a substantial number of grounds of appeal as in this case, it is a daunting task for this Court to try to arbitrate the parties' conflicting views and to adjudicate on the issue of the content of the appeal books in a manner that is fair to both parties. For example, in paragraph 10 of its Reply, the appellant casts doubts on the necessity to include, as requested by the respondents, four volumes of inter-company documents and license agreements purportedly to show the extensive use of the trade-mark when all the names and respective sales figures of these licensees will have been reproduced elsewhere in the appeal books. I certainly share the appellant's concern. I am always bewildered by the number of appeal books that are filed, but never used or even referred to on appeal. I suppose that the conduct of the parties is generally guided by the thought that it is preferable to have the documents at hand, even if it turns out that they were not needed, than not having them when they are needed.

[11]            As I said in the Canada (Minister of Environment) case, supra, at page 576, "prudence and wisdom also advise me, if I have to err, that it is preferable to err on the safe side". However, I will take measures to minimize the risk of error and unfairness to both parties as well as to eliminate, if possible, unnecessary costs. I will direct the respondents to have another look at the material with a view to discarding, if possible, what is not required to dispose of the issues on the appeal and the cross-appeal. I wish to make it abundantly clear, however, that the present direction should in no way be perceived as a ruling on the issue of the allegations made by the appellant as to the respondents' intransigence and unwillingness to cooperate in the process of developing and preparing the appeal books. Rather, I am motivated solely by the considerations noted above. The respondents shall report in writing to the Court, within 20 days of the Order, the result of their review, at which time I will finalize the content of the appeal books and dispose of the appellant's motion.

[12]            I should indicate to the parties that the final order pursuant to the appellant's motion will contain a clause analogous to the one found in the Canada (Minister of Environment) case whereby I will reserve to the panel hearing the appeal the right to adjudicate on the costs of the appeal books irrespective of the decision on the merits of the appeal.

                                                                                                                               "Gilles Létourneau"               

                                                                                                                                                      J.A.

                                                  FEDERAL COURT OF APPEAL

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                          A-45-05

STYLE OF CAUSE:                          QUALITY GOODS IMD INC. v. TOMMY HILFIGER LICENSING INC ET AL.

MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES

REASONS FOR ORDER BY:         LÉTOURNEAU J.A.

DATED:                                             April 21, 2005

WRITTEN REPRESENTATIONS BY:

SOLICITORS OF RECORD: