Date: 20010919
Docket: T-466-00
Neutral citation: 2001 FCT 801
Toronto, Ontario, Wednesday the 19th day of September, 2001
PRESENT: Peter A. K. Giles, Esquire
Associate Senior Prothonotary
BETWEEN:
CSI CORE SPECIALTIES INC.
Plaintiff
-and-
SONOCO LIMITED
Defendant
AMENDED REASONS FOR ORDER AND ORDER
[1] The statement of claim in this action alleges that the Defendant has:
(i) made false and misleading representations tending to discredit the business and wares of the Plaintiff;
(ii) has made use in association with wares of Plaintiff and Defendant of a description that is false in a material respect and is likely to mislead the public as to the character, quality, composition, the mode of manufacture, production or performance of the wares of Plaintiff and Defendant;
(iii) has used the trademark registered by the Plaintiff in a manner that is likely to have the effect of depreciating the value of the goodwill attached thereto;
(iv) has made representations to the public that are false and misleading in a material respect; and
(v) has made representations to the public in the form of statements of the performance and efficacy of the Plaintiff's refurbished cores and the Defendant new cores that are not based on adequate and proper tests thereof; and
seeks relief in respect thereof including relief under section 36 of the Competition Act and punitive and exemplary damages.
[2] The Plaintiff restores and reconditions used fibre cores around which paper is wound for use in the printing process. The Defendant makes new fibre cores for the same purposes.
[3] The motion which was before me sought:
(a) an order striking out without leave to amend the allegations contained in paragraphs 9, 11 and 31 of the statement of claim, to the extent that those allegations relate to activities and events taking place in the United States.
In addition, the motion seeks:
(b) an Order striking without leave to amend the allegations contained in paragraphs 1, 24 and 34 of the statement of claim, to the extent that those allegations relate to depreciation of the goodwill in the Plaintiff registered trademark.
In the alternative, the Plaintiff seeks:
(c) particulars of the before mentioned paragraphs.
If in addition, the Plaintiff also sought:
(d) an Order that the Plaintiff did deliver particulars of the representations made by the Defendant to the Public in Canada alleged in paragraphs 1, 9, 10 to 22, 25, 27 to 31 and 33 of the statement of claim.
As well, the motion sought:
(e) an extension of the time for filing the defence until 30 days after adjudication of this motion or delivery of the particulars ordered whichever is later.
[4] With regard to activities in the United States they are not the subject of sections 7 and 21 of the Trade-marks Act nor of the Competition Act. Therefore, allegations with regard to such activities do not support a cause of action based on that legislation.
[5] Allegations with respect to an activity in the United States which if alleged with respect to an activity in Canada would serve to particularize general allegations cannot serve that purpose. Canadian facts must be alleged to furnish the necessary complete instances often used to justify more general allegations. However, that is not to say, that activities outside of Canada could not, in a proper case, be alleged as going to show malice or intent applicable respect to activities in Canada otherwise, alleged with sufficient particularity to show a cause of action.
[6] The allegation here of an activity in Tennessee involving companies and persons operating in the United States is not alleged to furnish a factual background for the claim for punitive or exemplary damages. I therefore conclude that the allegations with respect to activities in the United States should be struck out without leave to amend as those allegations fail to support a pleaded cause of action within the jurisdiction of this Court. The allegations with regard to activities or advance taking place in the United States will be struck without leave to amend from paragraphs 9, 11 and 31.
[7] With regard to allegations in paragraph 1, 24 and 31 relating to depreciation of the goodwill in the Plaintiff's registered trademarks there is no specific allegation of the use of the Plaintiff's registered trademarks. Many decided cases indicate that the use of the precise trademark must be specifically alleged. There are other cases which indicate that when that use of a mark confusable with the registered trademark is alleged the pleading may remain. Neither use has been specifically alleged here. The allegations of depreciation of goodwill in paragraphs 1, 24 and 34 will be struck without leave.
[8] With regard to the request for an Order for particulars of the representations alleged to be made to members of the public in paragraphs 1, 9, 10 to 22, 25, 27 to 31 and 33 of the statement of claim.
[9] Paragraph 1(a)(i) deals with false and misleading statements tending to discredit the business and wares of the Plaintiff. This is presumably a claim with respect to the prohibition in section 7(a) of the Trade-marks Act. Section 7(a) is intra vires to the extent that it rounds out a scheme for the control of intellectual property. For that purpose, the acts complained of must be alleged to be effected by the use of intellectual property or to affect intellectual property. Particulars of the intellectual property connection are required.
[10] Paragraph 1(a)(ii) deals with a description that is false in a material respect and is presumably a claim with respect to section 7(d) of the Trade-marks Act. Again, the intellectual property aspect is missing and particulars thereof are required.
[11] Paragraph 1(a)(iii) deals with a trademark registered by the Plaintiff used in a manner likely to depreciate the goodwill attaching to that trademark. Presumably, this claim is based on section 22 of the Trade-marks Act. Some supporting allegations as to the way in which the trademark was used when, where and how and by whom and, sufficient particulars to provide at least one instance of a complete example of an infringement of 22(1) are required.
[12] Paragraph 1(a)(iv) dealing with representations to the public which are false and misleading in a material aspect, presumably is an allegation seeking to found a cause of action under section 36 of the Competition Act which gives a civil cause of action for the indictable acts prohibited by section 52(1) of that Act. Such cause of action must be specifically pleaded with details of when, to whom, by whom inter alia. That has not been done, so particulars will be ordered.
[13] Paragraph 1(a)(v) deals with statements to the public not based on adequate and proper tests. At first blush this would appear to be an attempt to use 36(1)(a) of the Competition Act to found a cause of action based on section 74.01(1)(b) of the Competition Act which last section is found in part VII.1 of that Act. Section 36 only creates a civil cause of action with regard to part VI. Particulars were therefore required to explain this allegation. I note that all the claims are grounded on activities prohibited either by section 7 or 21 of the Trade-marks Act or by the Competition Act, and therefore, at least one instance of each type of prohibited action must be alleged with details sufficient to identify it precisely.
[14] Paragraph 9 requires particulars of the method of distribution which customers or potential customers when, where and by whom.
[15] Paragraph 11 even when reference to the United States is removed, particulars are required to amplify and explain the alleged harmful uses of the Plaintiff's trademarks which marks, by whom, when and where. The remainder of paragraphs 10 to 22 will be sufficiently particular for the Defendant to plead when the ordered particulars are delivered.
[16] Paragraph 25 and paragraphs 27 to 30 and 31 to the extent not struck out, associated as they are with paragraph 1(v) of the claim for the same reason require particulars.
[17] Paragraph 33 deals with sections 7(a), 7(d), 22(1) of the Trade-marks Act in respect to which I have already indicated at least one instance of the alleged activity must be completely particularized in a way which will show involvement of intellectual property. The allegation with regard to section 52(1)(a) of the Competition Act must be completely particularized as befits an allegation of prohibited activity.
[18] The allegation with regard to section 52(1)(b) of the Competition Act in my view, needs more than ordinary particulars. The subsection has not been continued in part VI and part VII-1 is not available to found an action under section 36 of the Competition Act. Particulars will be ordered but it may well be the Plaintiff will have to seek leave to amend if it wishes to proceed for relief with respect to the sufficiency of tests.
[19] As indicated, numerous changes are required by this order. It would probably be more manageable if the statement of claim were replaced, but for the moment, particulars will be ordered.
[20] The Plaintiff shall have 30 days to serve and file particulars and the Defendant 30 days thereafter to file a defence. If the Plaintiff moves for leave to amend, the Defendant shall have 30 days after any such motion is dealt with to file its defence.
ORDER
IT IS ORDERED THAT:
[21] Paragraphs 9, 11 and 31 of the statement of claim to the extent that the allegations relate to events, activities and conversations allegedly taking place in the United States are hereby be struck out without leave to amend.
[22] Paragraphs 1, 24 and 33 of the statement of claim to the extent that the allegations contained therein relate to depreciation of goodwill in the Plaintiff's registered trademark are hereby struck out without leave to amend.
IT IS FURTHER ORDERED THAT:
[23] That the Plaintiff provide to the Defendant particulars of the allegations related to alleged misrepresentations made by the Defendant to the public in Canada contrary to section 7 of the Trade-marks Act, section 22 of the Trade-marks Act, and the Competition Act contained in paragraphs 1, 9, 10, 11, 25, 27 to 30, 31 and 33.
THIS COURT FURTHER ORDERS:
[24] That time for service and filing of a statement of defence is hereby extended to the 30th day after receipt by the Defendant of the particulars ordered in paragraph 23 above or after any motion for leave to amend the statement of claim has been dealt with; and
THIS COURT ORDERS THAT:
[25] The Plaintiff shall pay to the Defendant their costs of this motion fixed at $1,100.00. I have taken into account only the time estimated for presentation in the notice of motion and not the excess time actually taken when the motion was presented.
"Peter A. K. Giles"
A.S.P.
Toronto, Ontario
September 19, 2001
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-466-00
STYLE OF CAUSE: CSI CORE SPECIALTIES INC.
Plaintiff
-and-
SONOCO LIMITED
Defendant
DATE OF HEARING: MONDAY, JULY 9, 2001
PLACE OF HEARING: TORONTO, ONTARIO
AMENDED REASONS FOR
ORDER AND ORDER BY: GILES, A.S.P.
DATED: WEDNESDAY 19, 2001
APPEARANCES BY: Me. Richard S. Levy
For the Plaintiff
Ms. Judy L. Chan
For the Defendant
SOLICITORS OF RECORD: SPIEGEL SOHMER
Barristers & Solicitors
5, Place Ville-Marie
Suite 1203
Montreal, Quebec
H3B 2G2
For the Plaintiff
.../2
Page: 2
SOLICITORS OF RECORD:
(Cont'd) BLAKE, CASSELS & GRAYDON LLP
Barristers & Solicitors
2800-199 Bay Street, Box 25,
Stn. Commerce Court West
Toronto, Ontario
M5L 1A9
For the Defendant
FEDERAL COURT OF CANADA
Date: 20010919
Docket: T-466-00
Between:
CSI CORE SPECIALTIES INC.
Plaintiff
-and-
SONOCO LIMITED
Defendant
AMENDED REASONS FOR
ORDER AND ORDER