Date: 20100401
Docket: T-1554-06
Citation: 2010 FC 358
Ottawa, Ontario, April 1, 2010
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
LABORATOIRES
QUINTON INTERNATIONALE S.L.
Plaintiff
and
MYRIAM BISS
and
RUDOLPH BISS
and
9134-3954 QUEBEC INC.
Defendants
REASONS FOR ORDER AND ORDER
[1]
This is a motion
brought by the Defendants for leave to amend their Defense and to add a
counterclaim pursuant to Rule 75 of the Federal Courts Rules,
SOR/98-106. The Plaintiff contests the Motion only insofar that the Defendants
seek to add a counterclaim.
[2]
The
underlying action by the Plaintiff seeks to expunge trade mark registration
nos. TMA666,132 for QUINTON DUPLASE, TMA666,134 for QUINTON & Design, TMA
666,135 for QUINTON HYPERTONIC, and TMA 666,768 for QUINTON ISOTONIC (the
QUINTON Marks). This action is also for trade mark passing-off and copyright
infringement. The Statement of Claim was filed on August 28, 2006.
[3]
A
Statement of Defence was filed on October 13, 2006, which was amended on April
16, 2009. A Reply was filed on November 15, 2006.
[4]
The first
round of discoveries of the parties took place on April 27 and 28, 2009.
Second round of discoveries is to be completed no later than April 9, 2010.
[5]
The
Defendants claim that the Plaintiff infringed sections 7(a) and 22 of the Trade-marks
Act. R.S.C. 1985, c. T-13. More particularly, the Amended Defence and
Counterclaim appended to the Notice of Motion alleges that the Plaintiff or
other parties under its control have made false and misleading statements
directed to customers and business partners of the Defendants with respect to
the use of the QUINTON Marks by the Defendants and to the quality of the
products sold in association with these Marks. The Defendants claimed that
they have suffered damages in Canada as a result of these communications, and
that it would be in the interest of justice to allow the amendment sought so
that this Court may rule on the whole of the dispute opposing the parties in
the context of a single proceeding.
[6]
On March
19, 2010, the Defendants’ counsel asked the Plaintiff’s counsel for consent to
amend their defence and to add a counterclaim, and a draft of the proposed
amended pleading was sent to the Plaintiff’s counsel. The Plaintiff’s counsel
refused to provide consent on the basis that this Court lacks jurisdiction to
entertain the counterclaim, as the cause of action did not arise in Canada.
[7]
It is not
in dispute that an allegation by a party that it has suffered damages in Canada will not be sufficient to
ground this Court’s jurisdiction. There must be a real and substantial
connection between the forum and the party against whom an action is filed if
this Court is to assume jurisdiction. If the cause of action took place in
other countries, the suing party must apply to the relevant foreign court to
obtain redress. Even if the main action falls squarely within the Court’s
jurisdiction, the counterclaim must also be assessed independently as it is a
separate and distinct claim: Concept Omega Corp. v. Logiciels
KLM Ltée (1987), 12 F.T.R. 291 (F.C.), at p. 81.
[8]
Both
parties relied on my decision in Desjean v. Intermix Media,
Inc., 2006 FC 1395, [2006] F.C.J. No. 1754, at paras. 28-35, aff’d 2007 FCA
365, [2007] F.C.J. No. 1523 for guidance as to the criteria to be used in order
to determine if a real and substantial connection has been established. In
that case, I came to the conclusion that the mere access by Canadians of a
website operated by a company located outside Canada, with no servers,
employees, offices or bank accounts in Canada, which was not paying taxes in
Canada and which had no advertising, marketing or specific content aimed at the
Canadian market did not meet the real and substantial test.
[9]
In the
case at bar, I am unable to find a sufficient connection of the alleged causes
of action to confer jurisdiction upon this Court. The mere addition of the
words “au Canada” in various paragraphs of the
proposed Amended Defence and Counterclaim is obviously insufficient to confirm
this Court’s jurisdiction. I agree with the Defendants that a Court dealing
with an application to amend must assume that the facts pleaded are true: see Visx Inc. v.
Nidek Co. (1997) 209 N.R. 342 (F.C.A.) at 347; Fox Lake Indian Band v.
Reid Crowthers & Partners Ltd., 2002 FCT 630, [2003] 1 F.C. 197, at
par. 11. It is also true that the Court must apply the same rule as in
striking out a pleading, that is, it will only deny an amendment in a plain and
obvious case where the situation is beyond doubt. That being said, specific
facts relating to a cause of action in Canada are blatantly missing.
[10]
Paragraphs
99, 100, 103, 104, 106 and 107 of the proposed Amended Defence and Counterclaim
contain allegations based on facts that do not appear to have occurred in Canada or to have emanated from Canada. Moreover, paragraphs 101 to
108 of the proposed Amended Defence and Counterclaim refer to acts committed by
a U.S. company called Original
Quinton. That U.S. company is not a party to this action, and does not appear
to have employees, offices or bank accounts or servers in Canada. Even if the internet
publications of that company misrepresenting the products of the Defendants are
accessible to Canadians, it is clearly not enough to confer jurisdiction to
this Court.
[11]
The only
evidence upon which the Court can rely at this stage is the affidavit of Mr.
Marc Biss filed by the Defendants in support of a Motion for a Protective
Order, which was heard by this court on March 22, 2010. That affidavit does
not contain any evidence of an actionable cause of action under section 7(a)
and 22 of the Trade-marks Act. None of the exhibits to that affidavit
show a cause of action emanating from Canada
that is actionable against the Plaintiff in Canada. At the hearing, counsel for the
Defendants argued that it was inappropriate to rely on that affidavit as it was
filed for another purpose. This may well be the case, but the fact remains
that it is, so far, the only available evidence supporting the allegations made
in the proposed Amended Defence and Counterclaim. This falls far short of
providing the required real and substantial connection to Canada that must be established to
justify the jurisdiction of this Court.
[12]
The only
connection to Canada therefore seems to be that the Defendants’ business is
based exclusively in Canada and serve all of its
customers (who are themselves to a large extent Canadians) from Canada. Nowhere is this bald
assertion substantiated. But even if the Court was to take it at face value
for the purposes of the current motion, it would be insufficient to grant it jurisdiction.
The statutory violations must have been committed in Canada if this Court is to be the proper forum
to adjudicate the Defendants’ counterclaim.
[13]
This
motion must therefore be dismissed, since it is at the very least premature.
If, as a result of the second round of discoveries, the Defendants are able to
substantiate their counterclaim with specific facts relating to infringements
of the Trade-marks Act in Canada,
they are entitled to bring a further Motion to add a counterclaim to their
Defence.
ORDER
THIS COURT ORDERS that this motion is dismissed, without
prejudice to seek leave to add a counterclaim if and when the Defendants can
support it with evidence establishing actionable causes of action committed in
Canada.
"Yves
de Montigny"
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