Date: 20061027
Docket: T-1132-05
Citation: 2006 FC 1307
BETWEEN:
ORANGE
COUNTY CHOPPERS INC.
Plaintiff/
Defendant by counterclaim
and
TRIO
SELECTION INC.
Defendant/
Plaintiff
by counterclaim
REASONS FOR
ORDER
MORNEAU P.
[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:
|
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.
“Richard
Morneau”
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