[1996] 2 F.C. 647
T-1181-95
Indian Manufacturing Limited and 951268 Ontario Limited (Plaintiffs)
v.
Kin Ming Lo, Phillip Bannon and Jane Doe and John Doe and Other Persons, Names Unknown, Who Offer for Sale, Sell, Import, Manufacture, Print, Distribute, Advertise, Promote, Ship, Store, Display or Otherwise Deal in Unauthorized Merchandise Bearing the Trademark Indian Motorcycle or Indian Motocycle in Canada (Defendants)
Indexed as: Indian Manufacturing Ltd. v. Lo (T.D.)
Trial Division, Reed J.—Toronto, February 19; Ottawa, March 25, 1996.
Barristers and Solicitors — Counsel obtaining Anton Piller order obliged to ensure order not overstepping bounds of client’s legitimate rights, order fairly executed, and on return of any motion relating thereto, material before Court accurate, well-founded — Obligations not fulfilled as motion to review Anton Piller order not served on, and no attempt to add as named defendants, those against whom seeking to have interlocutory injunctions issued; Anton Piller order not limited to wares for which trade-mark registered.
Trade marks — Plaintiffs’ trade-mark registered for use in association with specific wares — Anton Piller order not limited to those wares — Items not covered by trade-mark seized — Obligation on counsel obtaining Anton Piller order to ensure order not overstepping bounds of client’s legitimate rights — Anton Piller order vacated.
Injunctions — Motion to have interlocutory injunctions issued against two individuals, business, against whom Anton Piller order executed — Nature of Anton Piller orders — Special obligations of counsel not fulfilled — Motion not served on, no attempt to add as named defendants, those against whom injunctions sought; validity of trade-mark questioned; Anton Piller order not limited to wares for which trade-mark registered.
This was a motion to review an Anton Piller order dated June 5, 1995 and to have interlocutory injunctions issued against two individuals and The Key Place, none of whom appeared or were represented. The motion relates to executions of the Anton Piller order which took place on February 11 and 12, 1996. There were many difficulties with the motion. The notice of motion was served neither on the two individuals, nor on the store’s owner whose identity was known, and there was no indication that The Key Place was a corporate entity. The plaintiffs were seeking interlocutory injunctions which were to last until trial, but were not adding those persons to the action as named defendants after their identities became known. Assuming that they were parties before they were served with the Anton Piller order because they were “persons, names unknown who offer for sale”, any action against them was dropped. There was also no support for most of the assertions. The documents on file did not support the allegation that the plaintiffs had a strong prima facie case. There were many reasons to doubt the validity of the plaintiffs’ registered trade-mark. Finally, there was no limitation in the Anton Piller order to the specific wares for which the trade-mark was registered. Consequently items which were not covered by the plaintiffs’ registered trade-mark were seized.
Held, the motion should be dismissed and the Anton Piller order should be vacated.
The Court is not well adapted to accommodate rolling Anton Piller orders which, by their nature, usually involve representations from one side only. They constitute a procedure which essentially authorizes execution without judgment. In such circumstances, counsel who obtain a rolling Anton Piller order have an obligation to ensure that the orders they seek do not overstep the bounds of the rights their clients can legitimately claim. They have an obligation to ensure that any order which is obtained is fairly executed and that on the return of any motion relating thereto the material put before the Court is accurate and well-founded. This did not occur in this case.
An order issued ordering (1) return of the goods seized on February 11 and 12; (2) deposit with the Registry of the Court of all seized merchandise, documentation, data and equipment, together with the names and addresses of the individuals from whom they were seized; (3) the plaintiffs to file a list of any other agents used to enforce the Anton Piller order and the names and addresses of the individuals from whom property was seized; (4) the plaintiffs to notify all persons from whom merchandise, documentation, data or equipment was seized that it has been delivered into the custody of the Court and to provide them with a copy of the reasons herein.
CASES JUDICIALLY CONSIDERED
APPLIED:
Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189 (1982), 69 C.P.R. (2d) 122 (C.A.).
CONSIDERED:
Cooper v. Barakett International Inc. (1992), 46 C.P.R. (3d) 74; 57 F.T.R. 241 (F.C.T.D.).
MOTION to review an Anton Piller order and to have interlocutory injunctions issued against two individuals and a business against whom the Anton Piller order had been executed. Motion dismissed and the Anton Piller order vacated.
COUNSEL:
Joseph S. Garten for plaintiffs.
No one appearing for defendants.
SOLICITORS:
Joseph S. Garten, Toronto, for plaintiffs.
No solicitor of record for defendants.
The following are the reasons for order rendered in English by
Reed J.: This is a motion to review an Anton Piller order issued by this Court on June 5, 1995, and to have interlocutory injunctions issued against Anuva Dutta, Maria Teresa Hadgett and against The Key Place. None of the three, against whom an interlocutory injunction is sought, appeared or were represented before me on the hearing of the motion.
There are many difficulties with the motion. In the first place, it is not clear that it was served on all three “persons” against whom the orders are sought. It is addressed to “The Administrator, the Federal Court of Canada” and to “Jane Doe and John Doe and other persons unknown”. It relates to executions of the Anton Piller order, dated June 5, 1995, which executions took place on February 11 and February 12, 1996. An affidavit of Jack Hunter states that the notice of motion returnable February 19, 1996 was served on Anuva Dutta on February 11, 1996 and on Maria Teresa Hadgett on February 12, 1996. The notice of motion before me is dated February 14, 1996. It clearly has not been served on those two individuals. The notice of motion which was served on the two individuals, as appears from the attachments to the affidavit of Jack Hunter, is dated August 23, 1995. It does not refer to them by name, as the motion before me does, but it gives notice that the plaintiffs will be making a motion before the Court on February 19, 1996 for an injunction “in respect of the Respondents or Defendants personally served”. Whether this is sufficient to constitute notice to the particular individuals, I leave unanswered. I note, however, that there is no reason the individuals could not have been served with the same motion that was placed before me. There was adequate time to do so between the filing of the motion on February 14, 1996, and its hearing on February 19, 1996.
The second difficulty with the motion is more substantial. An interlocutory injunction is sought against “The Key Place”. There is no indication that that entity is a corporate person. The only information concerning The Key Place is found in Mr. Hunter’s affidavit. That affidavit states that Maria Teresa Hadgett was “the person apparently responsible for wares on display … at a kiosk under the signage The Key Place”. Mr. Hunter states that he was told by Maria Teresa Hadgett that the store’s owner was Claudio Stellato, who was not there at that time. Not only is there no indication that The Key Place is a corporate entity but there was no service on Mr. Stellato when it is known that he is the store’s owner, and Ms. Hadgett is described as “the person apparently responsible” (underlining added).
Thirdly, the plaintiffs are seeking interlocutory injunctions against the three “persons”, which injunctions are to last until trial. At the same time, those persons are not being added to the action as named defendants. Assuming they were parties to the action before they were served with the Anton Piller order, because they fell within the description of defendants, being “persons, names unknown, who offer for sale”, the plaintiffs did not move to add them as named defendants after their identity became known. Thus any action as against them has been dropped. At the same time, the plaintiffs seek interlocutory injunction orders against them until trial.
A fourth difficulty is found in the grounds on which the request for the interlocutory injunctions are sought. They are enumerated in several paragraphs of the notice of motion. There is no support for most if not all of the assertions made. In particular, the plaintiffs assert, in five of the relevant paragraphs, that they have a strong prima facie case. The documents on the file do not support that allegation. The affidavit of Steven Richman, dated June 4, 1995, refers to litigation between the plaintiffs (or their predecessors in title) and Barakett International Inc. (file T-1569-92) [Cooper v. Barakett International Inc.]. The plaintiffs were granted an interlocutory injunction in that litigation on September 16, 1992. A review of the reasons given by Mr. Justice Rothstein, which are reported at (1992), 46 C.P.R. (3d) 74, reveal the challenges to which the validity of the plaintiffs’ trade-mark is susceptible. The defendants, in that proceeding, noted that the word “Indian” and “Indian Motorcycle” had been used by a number of companies in Canada for many years. They noted that the name “Indian Motorcycle” was not dreamt up out of thin air, that it is meant to be linked to old vintage Indian motorcycles. The validity of the mark was challenged because it was not distinctive and distinctiveness is a requirement for a valid trade-mark. Mr. Justice Rothstein granted the plaintiffs an interlocutory injunction, not because the plaintiffs had a prima facie case, but because he was persuaded that if the plaintiffs were successful at trial, and an interlocutory injunction was not granted, they would suffer damages which could not be quantified. Mr. Justice Rothstein noted, on several occasions, that in so far as the strength of the plaintiffs’ case was concerned, he was only finding that there was a serious question to be tried. He noted that this was a much lower threshold than the prima facie case standard. After the interlocutory injunction was granted, the defendants, Barakett et al., entered into a consent agreement in the plaintiffs’ favour. It would be wrong to consider this as a concession that the plaintiffs’ trade-mark was valid. Parties enter into consent judgments for a variety of reasons, one often being the cost of pursuing the litigation. In any event, there are serious issues concerning the validity of the plaintiffs’ mark which have never been resolved. In Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189(C.A.), it was held that the plaintiff was entitled to an Anton Piller order because it had demonstrated: (1) an extremely strong prima facie case; (2) very serious actual or potential damage would occur if an injunction were not granted; and (3) a real possibility existed that the defendants would destroy the goods or documents if they were not seized. In the present case, there are many reasons to doubt the validity of the plaintiffs’ registered trade-mark. Also, it is not clear to me that the other conditions exist in the case of all the occasions on which the order has been executed.
There is another difficulty with the order. The plaintiffs’ trade-mark is registered for use in association with specific wares (e.g., sweat shirts, rugger shirts, leather jackets, baseball hats, mugs, wall clocks, belt buckles, lapel pins, wallets). This is set out in the statement of claim, which is the foundation for the Anton Piller order. It is also referred to, indirectly, in the Anton Piller order itself because certain paragraphs thereof refer to restraining the defendants from dealing in wares “in infringement of Canadian Trademark Registration Number 364,615”. At the same time, other paragraphs of the Anton Piller order require individuals to deliver up to the persons enforcing the order “all merchandise bearing Indian Motorcycle Intellectual Property or and trademark confusingly similar therewith”. Indian Motorcycle Intellectual Property is defined as “the trademark `Indian Motorcycle’ or any other trademark confusing with the trademark `Indian Motorcycle’”. There is no limitation in this definition to the specific wares for which the trade-mark received registration.
On reviewing this file, I noted that on January 6, 1996, the Anton Piller order of June 5, 1995, was executed against Nostalgic Toy Creations Ltd. Twenty-five toy automobiles, trucks and a motorcycle were seized from a stall in the International Centre, 6900 Airport Road, Mississauga. These items are not a type of ware covered by the plaintiffs’ registered trade-mark. On the hearing of the motion before me on February 19, 1996, I raised with Mr. Joseph Garten whether on that earlier occasion he may have had the Anton Piller order used to seize goods that do not fall within the type of wares for which his clients’ claim trade-mark rights. His response was that if merchandise had been improperly seized he could return it. He subsequently filed a written memorandum relying on the broad terms of the Anton Piller order. He also asserted that 951268 Ontario Limited was the holder of a trade-mark extension application for “miniatures, namely scaled down models”. I can find no reference to such an application in the material on file. In addition, I am not persuaded that an application for a trade-mark can confer rights to an Anton Piller order, allowing the applicant to search the premises of others and seize merchandise, data, documentation and manufacturing equipment belonging to that other.
It is clear from the above that not only must the motion of February 19, 1996 be dismissed but the Anton Piller order of June 5, 1995, should also be vacated. I realize that many of my colleagues have been asked to review the June 5, 1995 order before now. I recognize that many interlocutory injunction orders have been issued against persons who have been served with the June 5, 1995 order, and from whom merchandise has been seized, without adding them as named defendants to the action.
Anton Piller orders of the “rolling” variety and the accompanying interim injunctions, which this Court has developed a practice of issuing, have a number of unique features. They are typically issued by one judge and subsequently reviewed by many others. They are expressed to last for a year. They are often extended on an annual basis for several years. They are executed during that time against a variety of individuals, often street vendors and flea market stall attendants. These will include not only the persons who blatantly and knowingly sell counterfeit goods they will also include the person who unwittingly is doing so, and perhaps against someone who is not infringing at all. The value of the goods seized, at least, in the street vendor and flea market situation, is usually not great. In the motion before me on February 19, 1996, the goods seized consisted of, from Anuva Dutta, seven belt buckles and two T-shirts, from Maria Teresa Hadgett, five T-shirts. It is highly unlikely those individuals would contest the plaintiffs’ application to have an injunction issued against them (if they really understand what is happening) or attempt to regain possession of the property, which, at least, before it was seized, they considered was theirs or their employers.
Anton Piller orders are often issued following an in camera hearing and on an ex parte basis. The Anton Piller orders which this Court has been granting are in general drafted by counsel. They are long and complex in nature. They are placed before a judge without much notice being given. Representations are usually made that they are needed urgently to protect the plaintiff’s rights. There is no real opposition to them, either when they are first issued, or when they are executed. In addition, once a judge has issued an order, or reviewed an order without comment, there is deference paid thereafter to that decision by other members of the Court. Thus, if counsel presents a judge with a draft order, with an explanation that this kind of order has been issued or approved many times before, by other members of the Court, the principle of judicial comity encourages that judge to grant the order, which is being requested.
The Court is used to disputes being brought before it which are adversarial in nature. It is not well adapted to accommodate rolling Anton Piller orders which, by their nature, usually involve representations from one side only. They constitute a procedure which essentially authorizes execution without judgment. In such circumstances, counsel who obtain from this Court a rolling Anton Piller order have special responsibilities. Among those responsibilities is the obligation to ensure that the orders they seek from the Court do not overstep the bounds of the rights their clients can legitimately claim. Also, they have an obligation to ensure that any order which is obtained is fairly executed and that on the return of any motion relating thereto the material put before the Court is accurate and well founded. This did not occur in this case. As indicated, the motion made on February 19, 1996, will be denied. The Anton Piller order dated June 5, 1995, will be set aside.
That leaves for consideration what consequences flow therefrom. Clearly the goods seized on February 11 and 12 must be returned to the individuals from whom they were seized. Any merchandise, documentation, data or manufacturing equipment which has been seized pursuant to the various previous executions of the Anton Piller order, since June 5, 1995, are, under the terms of the order, being retained to be “utilized solely for the purpose of civil proceedings in relation to the enforcement of the Plaintiff’s trademark and copyright rights”.
In the motion before me the search and seizure of the merchandise and the service of the Anton Piller order was effected by Jack Hunter and another member of Hallmark Investigation Services. The order of June 5, 1995, requires that respondents who are served with the order shall “deliver up to the PERSONS ENFORCING THIS ORDER for delivery into the interim custody of the PERSONS ENFORCING THIS ORDER” the merchandise, documentation, data and equipment that is being seized. The order further states that such merchandise, documentation, data or manufacturing equipment shall “be deposited for safe keeping with the Registry of the Court in Toronto or elsewhere, or be deposited with the PERSONS ENFORCING THIS ORDER”. The “PERSONS ENFORCING THIS ORDER” are defined in paragraph 1(a) of the preamble to the order as being the persons who serve the order.
A review of the file indicates that on many occasions besides those of February 11 and February 12, it has been Mr. Hunter and his agency that have been employed by the plaintiffs. An order will accordingly issue requiring Mr. Hunter to deposit with the Registry of the Federal Court in Toronto all merchandise, documentation, data and equipment which he has seized on behalf of the plaintiffs, pursuant to the order of June 5, 1995, together with the names and addresses of the individuals from whom these have been seized. When goods were seized from individuals whose names were not obtained the goods seized shall be delivered to the Registry of the Court with this fact noted. The plaintiffs will be ordered to file with the Court a list of any other enforcement agencies, officers or agents that they have used to enforce the Anton Piller order and the names and addresses of individuals from whom property was seized, to the extent that they have knowledge of this. The plaintiffs shall also file with the Court a list of the names and addresses of all persons from whom goods were seized, of whom it has knowledge, together with a description of the quantity and nature of the merchandise, documentation, data or equipment that has been seized. The plaintiffs shall notify all persons from whom merchandise, documentation, data or equipment has been seized that it has been delivered into the custody of the Registry of the Federal Court and shall provide them with a copy of these reasons. The plaintiffs will of course be at liberty to add the individuals who have been served as defendants to the action, in the normal way. If this is done, a list of the names and addresses of all those who are being so added shall be provided to each.