Nintendo of America Inc. v. Doe, 2002 FCT 371

Date: 20020403

Docket: T-1009-00

Neutral Citation: 2002 FCT 371

Ottawa, Ontario, this 3^rd day of April 2002

PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER

BETWEEN:

NINTENDO OF AMERICA INC. and

NINTENDO OF CANADA LTD.

Plaintiffs

- and -

JANE DOE and JOHN DOE and OTHER PERSONS, NAMES

UNKNOWN, WHO OFFER FOR SALE, SELL, IMPORT,

MANUFACTURE, DISTRIBUTE, ADVERTISE, OR DEAL IN

UNAUTHORIZED OR COUNTERFEIT POKÉMON MERCHANDISE,

AND THOSE PERSONS LISTED IN SCHEDULE "A"

TO THE STATEMENT OF CLAIM

Defendants

REASONS FOR ORDER AND ORDER

[1]    This motion for review of the execution of an Anton Piller order presents a unique variation on an unfamiliar theme.

[2]    On May 20, 2001, the solicitor for the plaintiffs together with three private investigators and a policeman from the Toronto police service attended at the Metro East Trade Centre for the purpose of executing Anton Piller orders in favour of a number of plaintiffs against a number of persons who were, or appeared to be, selling counterfeit goods. When they attended at one location, only one of the two occupants would identify herself, Ms. Alice Au. Her male companion declined to identify himself. A business card referring to A. Au Company Kids and Gift Shop was produced. A subsequent corporate search disclosed the existence of a corporation known as A. Au Company Limited.

[3]    The solicitor's report which is incorporated by reference into the solicitor's affidavit recites that the female individual was served with two Anton Piller orders, two Notices of Motion and two Statements of Claims, one of each being in respect of the plaintiff in this action. The male individual initially declined to surrender the goods which were identified as counterfeit. In response to the explanations he received, he agreed to surrender the goods after 5 pm that day. But later, he refused to surrender the goods and asked the police officer in attendance to tell the plaintiff's representatives to stay out of the store. Plaintiff's counsel then took images of some or all of the goods on sale from outside the business premises which are before the court in digital form. Also before the court is counsel's affidavit setting out the basis of his opinion that the goods in question are counterfeit. The plaintiff's representatives left without seizing any of the goods.

[4]    The motion before the court seeks the following relief:

a) a review of the execution of the Anton Piller Order and its continuation;

     b) an Order adding the Defendant or Defendants served with this Notice of Motion, the Anton Piller Order and the Statement of Claim herein;

     c) an Order that service of the Statement of Claim issued by this plaintiff in this action on any Defendant is deemed effective service of the said Statement of Claim as of the date served;

     d) an Order that the interim ex parte Anton Piller Order be made an interlocutory Order in respect of the Defendants served with the Anton Piller Order;

     e) in the event that the interim ex parte Order herein has expired at the time the motion is heard, then an Order for an interlocutory injunction against the Defendant(s) served with the Notice of Motion, Anton Piller Order and Statement of Claim in this action;

f) further ancillary relief

[5]                 The scheme under which the plaintiff proceeds is as follows. The Statement of Claim issued in this matter does not name individual defendants, but rather is in the name of John Doe and Jane Doe, being persons unknown who are alleged to infringe the plaintiff's trade marks or copyright. Service of such a Statement of Claim upon an individual is not sufficient to make that person a defendant because an order is required to add a named defendant to the action.

[6]                 The Anton Piller order which is served at the same time as the Statement of Claim requires the person upon whom it is served to consent to the search of the business premises in question for the purpose of locating counterfeit goods and of surrendering such counterfeit goods as are discovered to the person serving the order. An inventory of the goods removed is left with the person upon whom the order is served. The order does not authorize search or seizure except with the consent of the individual served. When the individual does not consent, as was the case here, the plaintiff's representative is unable to search for, seize or remove goods under the authority of the order. The order also contains injunctive provisions prohibiting the persons served from dealing with counterfeit goods or passing off their goods as the goods of the plaintiff. The injunctive provisions become effective upon service and are valid for 14 days. The order also requires that the execution of the order be reviewed by the court within 14 days of service.

[7]                 The Notice of Motion which is served at the same time as the other two documents requests the court to review the execution of the Anton Piller order, to add the persons served as defendants to the action, and to continue the interim injunction as an interlocutory injunction till the trial of the action. If events unfold as contemplated by the plaintiff and its agents, the result is that the counterfeit goods are removed from circulation pending the trial of the matter, the persons served are made defendants to the action and an interlocutory injunction prevents the (now) defendants from dealing in counterfeit goods.

[8]                 This motion raises the issue of what happens when things do not go according to plan. In this case, one individual was served, but no consent was given to search for, seize or remove goods. As a result, the plaintiff's representatives were limited to taking digital photographs of the allegedly infringing goods.    The individual who was served did not appear on the return of the Notice of Motion. For reasons which are not clear from the material before me, the Motions Judge did not sign the review order. The matter appears to have fallen between the cracks so that I am now asked to sign the order which was before the Motions judge.

[9]                 The first point to make is that the plaintiff is seeking to be put in the same position as though it had executed the order, rather than initiating contempt proceedings. Providing that the plaintiff can satisfy the evidentiary burden upon it, there is nothing untoward about such a course of action. The question is whether the evidentiary burden is satisfied.

[10]            With respect to the question of adding the persons served as defendants, the plaintiff could move at any time to add persons as defendants without having to prove that they have engaged in infringement of the plaintiff's intellectual property rights. Proof of infringement will be required to obtain judgment but the allegation of infringement is sufficient to support a motion to add a party to the claim as a defendant.

[11]            In this case, it appears that the only person served was Ms. A. Au.    The solicitor's report says that Ms. Au was served personally. However it goes on to say that she was in control of the the business premises and was offering goods for sale. In the absence of any knowledge as to the existence of the corporation prior to service of the Statement of Claim, it would be difficult for the plaintiff to argue that its solicitor intended to serve the corporation whose existence he ignored at the time of service. I conclude that Ms. Au was served in her personal capacity. There will be an order adding Alice Au as a defendant to the within action.

[12]            The Notice of Motion seeks an order validating service upon Ms. Au as of the date of service. The result would be that Ms. Au would be in default of defence before she is even added as a defendant. That is not a sensible result. Consequently, Ms. Au is added as a defendant to the within action effective the date of this order, and will have 30 days from the date of service of this order upon her to file her Statement of Defence.

[13]            The next issue is the grant of an interlocutory injunction against Ms. Au restraining her from dealing in counterfeits of the plaintiff's intellectual properties. The test for an interlocutory injunction is well known. The plaintiff must show a serious issue to be tried, irreparable harm not compensable in damages if the injunction is not granted, and the balance of convenience must favour the plaintiff. See RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. The question of whether or not a serious issue to be tried exists is a matter fact and law. The plaintiff must show facts which are capable of supporting its position in law. The threshold is relatively low.

[14]            But before embarking upon an analysis of the plaintiff's entitlement to injunctive relief, one should pause to consider whether it should be granted ex parte. In a technical sense, it is not ex parte since Ms. Au was served in May 2001 and did not appear on the review motion. In a practical sense, an order made under these circumstances would appear to the defendant to have been made ex parte given the length of time between service of the motion and the making of the order. The delay cannot be laid at the plaintiff's feet as the motion was on the docket on the return date indicated on the motion itself. But where a defendant has been carrying on business from fixed premises in a commercial establishment and where the goods remain in the custody of the defendant, it appears to me to be desirable to give the defendant notice of the injunction application. If nothing else, the fact of having notice of the motion should increase the likelihood of compliance with any order which the court might make. The usual reason for proceeding ex parte is the possibility of the destruction of evidence. In this case, the evidence is before the court already and so is not at risk of destruction. There is no compelling reason not to give notice of the application for injunction to the defendant.    Consequently, the portion of the Motion requesting interlocutory injunctive relief is dismissed with leave to make a fresh application for the same relief on notice to the defendant.

[15]            Since there was no execution of the Anton Piller order, there is no need for an order reviewing the execution of the order.

[16]            In the end result, there will be an order adding Alice Au as a defendant to the within action but dismissing the application for an interlocutory injunction with leave to apply again on notice to the defendant Au.

ORDER

For the reasons set out above, it is hereby ordered:

1. Alice Au is added as a defendant to the within action as of the date of this order.

2. Ms. Au will have 30 days from the date of service of this order upon her to serve and file her Statement of Defence.

3. The application for an interlocutory injunction is dismissed with leave to bring another application upon notice to the defendant.    Any such motion may be made on the basis of affidavits already filed together with any additional affidavits which the plaintiff may wish to file.

        "J.D. Denis Pelletier"         

   Judge