• Claim under Section 7(A) Failed Where False and Misleading Statements Made Out But No Causal Link to Alleged Damages
  • September 12, 2016 | Authors: Adrian J. Howard; Beverley Moore; Chantal Saunders
  • Law Firm: Borden Ladner Gervais LLP - Ottawa Office
  • Claim under section 7(a) failed where false and misleading statements made out but no causal link to alleged damages

    E. Mishan & Sons, Inc. v. Supertek Canada Inc
    ., 2016 FC 986

    This decision relates to the second part of the bifurcated proceeding, namely whether the plaintiffs engaged in conduct contrary to the provisions of section 7(a) of the Trade-marks Act in their dealings with Canadian Tire in the years 2013 and 2014.

    The principal issue in this action was the validity and infringement of the ‘882 patent. The Federal Court had previously found the plaintiffs' asserted patent to be invalid and dismissed the infringement action (2014 FC 326 and summarized the week of April 14, 2016; affirmed 2015 FCA 163 and summarized the week of July 27, 2015). In the second part of the bifurcated proceeding, the Federal Court had granted a summary judgment motion and declared an industrial design invalid (2016 FC 613 and summarized the week of June 20, 2016). The Court also ordered a summary trial for the defendant’s claim under section 7(a) of the Trade-marks Act.

    The Court concluded that, while the plaintiffs made false and misleading statements, no causal link to the defendant’s alleged damages has been established and thus, the section 7(a) claim failed. The defendant claimed three sorts of damages with respect to its dealings with the retailer Canadian Tire: cancelled orders by Canadian Tire, lack of access to individual Canadian Tire dealerships, and Canadian Tire never placed any further orders for the defendant’s product. However, the evidence established that the purchase of the defendant’s product was a one-time only buy and Canadian Tire did not want to have an inventory problem by handling two product lines. As a result, there was no causal link between the false and misleading statements made by the plaintiffs and the damages alleged to have been suffered by the defendant.

    Further, the Court noted that even if the defendant had been successful, it had not satisfactorily established a quantification of its damages.

    On the issue of costs, the Court found that each party should bear its own costs, noting that more rational persons would have settled the matter once the patent issue had been finally determined.