There were no noteworthy Canadian cases in November that focused on specific trademark issues. However, the Supreme Court of Canada (“the SCC”) handed down a decision regarding the enforcement of foreign non-monetary judgments that will be of interest to trademark practitioners.
The case, Pro Swing Inc. v. Elta Golf Inc., arose out of a trademark dispute, but it was the contempt order that was at issue on appeal.Â In 1998, Trident, a U.S. company, filed a complaint in Ohio for trademark infringement. Elta, an Ontario company, entered into a settlement agreement that was endorsed in a consent decree of the U.S. District Court. In 2002 Trident brought a motion that Elta had violated the consent decree and a contempt order was issued.
The SCC agreed with the Ontario Court of Appeal that the contempt order could not be enforced in Canada, primarily because it was quasi-criminal in nature. However, in doing so the SCC held that the traditional common law rule limiting the recognition and enforcement of foreign judgments to final money judgments should be changed – although cautiously. Thus, equitable orders from foreign courts, such as injunctions, may now be enforced.
The SCC outlined a number of factors to be taken into account: that the judgment being enforced be rendered by a court of competent jurisdiction and be final, and that as a matter of comity the domestic court not extend greater assistance to foreign litigants than it does to its own litigants.
With regards to injunctive relief the SCC recommended that its territorial scope must be specific and clear. With regards to trademark protection the SCC specifically noted that the Internet does not transform U.S. trademark protection into worldwide protection, although the SCC left open that the possibility that a party, by consent, might create such an extension.
Future case law will provide further clarity regarding the enforcement of foreign equitable orders in Canada and the extent to which Canadian courts may recognize, for example, injunctions regarding trademark rights. In the meantime, foreign litigants will want to carefully consider how a foreign court order is worded if the ultimate intention is enforcement in Canada.