Date: 19991028
Docket: T-1186-91
BETWEEN :
CLUB MONACO INC.
Applicant
- and -
WOODY WORLD DISCOUNTS, ELLIOT CHEWINS,
HIGH TIMES GRAPHICS INC., CC TOPS,
HIGHGATE CASUALS INC. and, JOHN DOE
and JANE DOE and OTHER PERSONS UNKNOWN
TO THE PLAINTIFF WHO OFFER FOR SALE, SELL,
IMPORT, MANUFACTURE, ADVERTISE, OR
DEAL IN COUNTERFEIT CLUB MONACO MERCHANDISE AND
THOSE PERSONS LISTED IN SCHEDULE "A"
TO THE STATEMENT OF CLAIM
Respondent
REASONS FOR ORDER
PELLETIER J.:
[1] Club Monaco applies for an extension of the Order of Pinard J. dated September 28, 1998 which is itself an extension of prior orders going back to 1991. The orders in question are "rolling" Anton Piller orders, which means that, for the most part, the defendants are unknown at the time the order is granted and are identified only as John Doe and Jane Doe. The orders authorize the seizure of private property as evidence in trademark infringement proceedings. These orders are an extraordinary remedy and are extremely intrusive. Furthermore, they are generally sought (and issued) on a Canada wide basis. Because they are usually issued on an ex parte basis, the parties and counsel representing them owe the Court a greater degree of candour than may otherwise be the case in an adversarial system. The Court itself is bound to be very careful to infringe private rights no further than is necessary to protect the plaintiff"s valuable intellectual property.
[2] As a result of comments from the Bench on the first return of this motion on September 27, 1999 counsel sought and obtained leave to file additional material in support of the plaintiff"s application. The concern expressed at the time was that, having regard to the intrusive nature and the broad geographical scope of the order sought, affidavit evidence which was a number of years old and limited to one province would not justify the issuance of the order. The plaintiff has now filed additional affidavits, specifically, the affidavit of Bob Hoult, Director, Loss Prevention for the plaintiff, dated October 1st 1999 and the affidavit of Jack Hunter, Private Investigator, dated October 1st, 1999.
[3] I propose to grant the order sought because the evidence submitted in support of it meets or exceeds the current standard for such orders. In particular, it shows that there are current instances of suspected counterfeiting occurring in different parts of the country which justify the making of the order. That said, this judge believes that the evidentiary foundation for Anton Piller orders should reflect the intrusive nature of the order.
[4] The effect of an rolling Anton Piller order is that a vendor of goods may be approached by a team consisting of a lawyer, a private investigator, a camera operator, and one or more individuals, (often accompanied by police officers) and subjected to a demand to surrender their inventory, their private property, on pain of being found in contempt of court if he/she refuses to do so. This occurs before there has been any adjudication of the merits of the plaintiff"s claim. While the property is held as evidence, the effect of the seizure is often to put the vendor out of business while the legal proceedings are pending. When one compares these powers to those available to peace officers executing a search warrant, one is driven to the conclusion that the grant of such an order should require clear evidence that the powers granted by the order are in fact required.
[5] These observations do not arise out of any perception of improper conduct on the part of those executing Anton Piller orders. With very few exceptions, the reviews of such executions are confirmed by the Court. The concerns expressed here go to the question of entitlement to such an order and not to the propriety of the use to which the order is put. The latter is a matter for the review of the execution of particular orders. Nor should these observations be taken as gainsaying the right of the owners of valuable intellectual property assets to protect those assets from those whose business methods would put them beyond the effective reach of the usual procedures and remedies administered by the Court. The existence of Anton Piller orders is recognition that extraordinary problems require extraordinary solutions.
[6] The comments which follow are limited to the question of "rolling" Anton Piller orders in which the defendants are not known and which are issued against John Doe and Jane Doe. They are also limited to the case of itinerant sales or flea markets and do not deal with the particular problems which arise in the case of travelling celebrity attractions, to which other considerations may apply. These "rolling" orders are potentially binding upon all who carry on trade in certain types of consumer goods. It is therefore incumbent upon the Court to be satisfied that the potential interference with individual rights is justified by the evidence put before it as to the scope of the infringement of the plaintiff"s rights.
[7] As a result, it is my view that in future applications for a rolling Anton Piller order the evidence submitted in support of the application should reflect the following:
| 1) The affidavits should contain the personal knowledge of the affiant as to the nature and extent of the problem as it relates to the Plaintiff. It is, after all, the plaintiff"s valuable property which it is sought to protect. If the officers of the plaintiff are not in a position to testify from their own personal knowledge as to the nature and extent of the problem, doubts are raised as to the need for the remedy. While counsel who habitually practice in this area no doubt acquire expertise and insight into the practices of counterfeiters, the unusually heavy reliance upon information provided by counsel which one often sees in these matters creates a risk of putting counsel"s credibility in issue. This detracts from the independence which the Court is entitled to expect from counsel appearing before it. |
| 2) Certain elements of the proof put before the Court are general in nature and cannot be easily be particularized, for example, the damage to the goodwill of the plaintiff from the existence of substandard counterfeit goods. This evidence can be given in the form of general statements of the plaintiff"s understanding of the effect of counterfeiting upon the value of their intellectual properties. |
| 3) Other elements of the proof can and should be particularized, specifically the instances of counterfeiting known to the plaintiff which would justify the granting of an order. In general it would not be sufficient to simply say that the plaintiff is aware of counterfeiting in a given city or region. Since these orders are applied for ex parte and often in camera, there is no obvious justification for not giving the Court particulars of known instances of counterfeiting which would justify the issuance of the order sought, especially when the counterfeiting activity is taking place at some distance from the centre where the order is sought. |
| 4) In general, a number of instances of counterfeiting would be required to justify a "rolling" order for the simple reason that a specific instance would only justify a specific order. If the plaintiff wishes an order applicable to unlimited future instances, it is incumbent upon it to demonstrate that specific orders are not an appropriate remedy. The deponent"s unsupported testimony as to his or her belief that such an order is required would not usually be sufficient. |
| 5) In the same way, proof of a number of incidents of counterfeiting in Ontario would only justify an order which applied to Ontario. If a Canada wide order is sought, there should be some proof that the counterfeiting is not a local problem. This is not an insurmountable problem: an order tailored to the evidence submitted at the time of the hearing could be extended subsequently by amendment if further evidence of counterfeiting in other provinces or regions became available. |
| 6) Since it is the allegation of counterfeiting which justifies the extraordinary interference with existing property rights, the grounds upon which it is believed that counterfeiting is occurring should be clearly stated. A simple assertion that the affiant believes the goods to be counterfeit is not sufficient. What observations or examinations support the affiant"s belief? In general terms, evidence upon information and belief as to this issue would not be particularly persuasive. This evidence goes to the heart of the application and should receive critical attention. |
| 7) In those cases where it is sought to renew an existing order, it is incumbent upon the plaintiff to demonstrate to the court the use which it has made of the order previously granted. An order which has not been enforced does not need to be renewed but the fact of enforcement does not, of itself, justify renewal of the order, though it may in some cases. As a courtesy to the Court, this information should be collated and summarized so as to enable the court to quickly review the plaintiff"s past experience. |
| 8) An assertion in an affidavit that the plaintiff agrees to be bound by an undertaking as to damages is not an undertaking as to damages just as a promise to agree is not an agreement. A separate undertaking as to damages, directed to the court, properly executed by corporate officers who have the authority to do so should accompany the application. |
[8] These requirements are not unduly onerous given the nature of the order sought and ought not to prove a barrier to plaintiffs whose valuable intellectual property is being appropriated without compensation. However, fairness to those whose property is seized under the authority of an order of this Court requires that their interests also receive consideration, at least to the extent of demonstrating an objective need for the court"s intervention.
[9] The order will be issued separately.
"J.D. Denis Pelletier"
Judge
Ottawa, Ontario
October 28, 1999