T-2355-86
Montres Rolex S.A. and Rolex Watch Company
of Canada Limited (Plaintiffs)
v.
Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson, David
C. Redman and Robert Pahmer, on behalf of
Themselves and on behalf of all Others selling,
offering for sale, importing, advertising, manufac
turing, or distributing any wares in association
with the name Rolex or the Crown Design, being
registered Trademarks No. 278,348, No. 208,437,
No. 130/33476, and No. 78/19056 under the
Trade Marks Act, R.S.C. 1970, as amended, when
the same are not of the plaintiffs' manufacture or
merchandise and John Doe and Jane Doe, and all
Others unknown to the plaintiffs who sell, import,
advertise, manufacture or distribute any wares in
association with the name Rolex or the Crown
Design being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476, and No. 78/19056
under the Trade Marks Act, R.S.C. 1970, as
amended, when the same are not of the plaintiffs'
manufacture or merchandise (Defendants)*
* Editor's Note: Upon an application under Federal Court
Rule 337 to reconsider the terms of the judgment herein,
MacKay J. by order dated April 11, 1990 (T-2355-86), amend
ed the wording of paragraph 5 of the judgment by inserting the
words "imitation Rolex watches and wares". Paragraph 5 now
reads:
5. The importation for commercial purposes of watches and
wares bearing the plaintiffs' registered trade-marks or fac
similes of them when the watches and wares are not of the
plaintiffs' manufacture or merchandise, to wit imitation
Rolex watches and wares, having been found to be contrary
to the Trade-marks Act, is prohibited pursuant to section
52(4) of the Act.
Plaintiffs' request that paragraph 3 of the judgment be amend
ed to include John Doe and Jane Doe, defendants who were or
are engaging in the prohibited activities described in that
paragraph after February 9, 1989, was rejected.
INDEXED AS: MONTRES ROLEX S.A. v. RALSHIN (T.D.)
Trial Division, MacKay J.—Toronto, February 7,
8, 1989; Ottawa, March 13, 1990.
Trade marks — Infringement — Imitation Rolex watches
imported to Canada — Sold by transient street vendors
Difficulty in obtaining effective relief by litigation due to
defendants' nature — Names of many potential defendants
unknown to plaintiffs — None of named defendants appearing
or represented at trial — One having signed consent to judg
ment — Not proper case for class action — Permanent injunc
tion extending to persons unknown granted where circum
stances exceptional, order not inconsistent in purpose and
principle with established practice.
Injunctions — To restrain sale by street vendors of trade
mark infringing imitation Rolex wares — Names of many
potential defendants unknown to plaintiffs — Exceptional
circumstances warranting permanent injunction extending to
persons unknown in addition to named defendants — Terms of
order not inconsistent in purpose, principle with established
practice.
Practice — Parties — Trade mark infringement action
regarding sale by numerous street vendors of imitation Rolex
watches — Names of many infringers unknown to plaintiffs
Obtaining effective relief through litigation difficult due to
infringers' transient nature — Plaintiffs seeking permanent
injunction extending to persons unknown — Not proper case
for class action — Proposed class of defendants not having
common interest — Possibility of different defences — Court
must have confidence representative will defend common inter
est of class members — Named defendants not appearing at
trial even to defend own interests.
Customs and excise — Customs Tariff — Importation
prohibited by order under Trade Marks Act, s. 52 — Whether
party must be named as defendant — Whether section's word
ing broadened by R.S.C. 1985 — Necessity for final determi
nation importation or distribution unlawful — Purpose of s.
52(4) — Order to go prohibiting importation for commercial
purposes of imitation Rolex products.
In light of expanding sales of imitation wares by elusive
street vendors, the plaintiffs were seeking to protect their
registered trade-marks against certain named as well as
unnamed defendants, principally by means of a permanent
injunction and an order under subsection 52(4) of the Trade
marks Act prohibiting importation. The plaintiffs sought to
include unnamed defendants by framing their action as a class
action.
Held, a permanent injunction against named and unnamed
defendants and an order against unnamed defendants prohibit
ing importation should be granted, as well as the relief usually
granted against named defendants in trade-mark infringement
cases.
Plaintiffs have sought, from the initiation of this litigation, to
structure it as a class action against persons unknown. That is
not consistent with practice in the Federal Court. There was
nothing to suggest that any named defendant had consented to
represent others. The proposed class members had no associa
tion before this action. Under Rule 1711, all those in the
proposed class must share a common interest. These trade mark
infringers had no interest in common and a possibility of
different defences existed. The Court would not recognize a
representative for a proposed class unless confident that person
would defend the common interest of the class. The named
defendants herein failed to appear at trial to defend even their
own interests.
Although injunctions against unnamed defendants are usual
ly issued on an interim basis only, a permanent injunction could
be issued where, as here, the circumstances were exceptional
and the order was inconsistent with established practice in
neither purpose nor principle.
An order under subsection 52(4) of the Act prohibiting
importation by unnamed defendants cannot be made in the
absence of an adjudication on the merits in a judicial proceed
ing. Neither a consent judgment nor a default judgment was
sufficient. The importation of imitation Rolex wares had seri
ously affected the plaintiffs' rights to exclusive use of their
registered trade-marks and was contrary to the Act. The condi
tion precedent to the issuance of such an order had now been
satisfied.
The purpose of subsection 52(4) is to support the efforts of
registered owners and users to protect their exclusive rights
under sections 19 and 50 of the Act. The circumstances herein
justified an order prohibiting unnamed defendants from the
future importation of imitation Rolex wares for commercial
purposes.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Customs Tariff R.S.C., 1985 (3rd Supp.), c. 41, s. 114,
Schedule VII, Code 9967.
Federal Court Rules, C.R.C., c. 663, RR. 480,
495(1)(a),(2), 500, 1711.
Revised Statutes of Canada, 1985 Act, R.S.C., 1985 (3rd
Supp.), c. 40, s. 4.
Statute Revision Act, R.S.C., 1985, c. S-20.
Trade-marks Act, R.S.C., 1985, c. T-13, ss. 7(d), 19, 20,
22, 50, 52(1),(4), 53, 55.
Trade Marks Act, R.S.C. 1970, c. T-10, s. 52(1),(4).
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Adidas Sportschuhfabriken Adi Dassler K. G. et al. v.
Kinney Shoes of Canada Ltd., E'Mar Imports Ltd.,
Third Party (1971), 19 D.L.R. (3d) 680; 2 C.P.R. 227
(Ex. Ct.).
REFERRED TO:
Montres Rolex S.A. v. Balshin, T-2335-86, Jerome
A.C.J., order dated 11/2/88, not reported; Government of
Canada v. Perry et al. (1981), 41 N.R. 91 (F.C.A.); John
v. Rees, [1970] Ch. 345; [1969] 2 All E.R. 274; Wood v.
McCarthy, [1893] Q.B. 775 (Eng.); Walker v. Sur,
[1914] 2 K.B. 930 (C.A.); Butler et al. v. Regional
Assessment Commissioner, Assessment Region No. 9
(1982), 39 O.R. (2d) 365; 139 D.L.R. (3d) 158; 19
M.P.L.R. 233 (H.C.); General Motors of Canada Ltd. v.
Naken et al., [1983] 1 S.C.R. 72; (1983), 144 D.L.R.
(3d) 385; 32 C.P.C. 138; 46 N.R. 139; Smith v. Cardiff
Corp., [1953] 2 All E.R. 1373 (C.A.); Kiist v. Canadian
Pacific Railway Co., [1982] 1 F.C. 361; (1981), 123
D.L.R. (3d) 434; 37 N.R. 91 (C.A.); Heath Steele Mines
Limited v. Kelly and Astle (1978), 22 N.B.R. (2d) 619;
39 A.P.R. 7; 7 C.P.C. 63 (C.A.); Montres Rolex S.A. v.
Canada, [1988] 2 F.C. 39; (1987), 14 C.E.R. 309; 17
C.P.R. (3d) 507 (T.D.); Cartier, Inc. v. John Doe (1987),
13 C.I.P.R. 316 (F.C.T.D.); Cartier, Inc. v. Doe, [1990] 2
F.C. 234 (T.D.); Montres Rolex S.A. v. Lifestyles
Imports Inc. (1988), 23 C.P.R. (3d) 436 (F.C.T.D.);
Krimson Corp. v. Persons Unknown, T-1714-87, Jerome
A.C.J., order dated 12/8/87, not reported; Jackson v.
Bubela et al. (1972), 28 D.L.R. (3d) 500; [1972] 5
W.W.R. 80 (B.C.C.A.); Golden Eagle Liberia Ltd. et al.
v. International Organization of Masters, Mates and
Pilots, [1974] 5 W.W.R. 49 (B.C.S.C.); Dukoff et al. v.
Toronto General Hospital et al. (1986), 54 O.R. (2d) 58;
8 C.P.C. (2d) 93 (H.C.); Davies v. Elsby Brothers, Ltd.,
[1960] 3 All E.R. 672 (C.A.).
AUTHORS CITED
Callmann, Rudolf. The Law of Unfair Competition,
Trademarks, and Monopolies, Mundelein (III.): Cal-
laghan, 1981.
COUNSEL:
Simon Schneiderman for plaintiffs.
No one appearing for defendants.
SOLICITORS:
Miller, Mills & Associates, Toronto, for
plaintiffs.
EDITOR'S NOTE
This judgment is of interest for its discussion of
the reach of legal remedies, and the Court's
orders, to unnamed defendants who, as street
vendors, are involved in the sale of goods which
are imitations of those which the plaintiffs manu
facture or sell under registered trade-marks.
Pursuant to subsection 58(2) of the Federal
Court Act, the Executive Editor has decided that
this 41-page judgment should be reported as
abridged. His Lordship's reasons for judgment
with respect to relief in relation to persons
unknown and with respect to section 52 of the
Trade-marks Act are unabridged. A summary of
the omitted material is provided. The portion of
the reasons for judgment deleted include: pro
ceedings preliminary to trial, review of the evi
dence adduced at trial and the relief granted
against the named defendants.
The following are the reasons for judgment
rendered in English by
MACKAY J.:
Introduction
The plaintiffs seek a variety of remedies to
redress injury and to prevent further injury alleged
to their interests arising under registered trade
marks. The original defendants in this action,
named and unnamed are said to be engaged in
sales of imitation Rolex watches or related wares
which bear marks similar to the plaintiffs' regis
tered marks and many of their sales are said to be
made from street vending locations with no con
tinuing site or address. The imitation wares are
apparently brought, or shipped, into Canada.
The defendants' operations, with so little of
permanence, regularity or stability usually
associated with business activities make it difficult
for the plaintiffs to protect their interests under
registered trade-marks, their legitimate enterprise
and their relationships with well established and
reputable vendors. In interlocutory proceedings in
advance of this action and in this action itself, as
in parallel situations of others similarly affected by
expanding sales of imitation wares, the plaintiffs
have sought extraordinary relief. Some relief
claimed and granted has been in the form of
Anton Piller type orders. Sometimes, as in this
action, interlocutory relief has been sought against
defendants unknown or inadequately identified
until their identity can later be confirmed, often
with difficulty, as persons engaged in sales or other
activities which are said to infringe upon the plain
tiffs' interests.
A principal concern of the plaintiffs in this
action is to protect their interests, not only against
named defendants but also against persons
unknown, by a permanent injunction and also by
an order under subsection 52(4) of the Trade
marks Act [R.S.C., 1985, c. T-13] with a view to
prohibiting import of imitation Rolex watches and
wares.
The trial in this matter was unusual in that no
defendant named who had entered a defence in the
action appeared to defend or to contest the evi
dence presented by the plaintiffs. Perhaps that
development was to be anticipated. It does under
line the difficulties that the plaintiffs face in seek
ing to protect their interests. As the style of cause
in this matter indicates, the defendants here were
made parties in various capacities including by
amendment "John Doe and Jane Doe and all
others unknown to the plaintiffs". By consent one
of the named defendants agreed to judgment not
only in his own capacity but also in relation to
orders directed to John Doe, Jane Doe and others
unknown.
This action thus raises a number of issues about
the reach of legal remedies, and the Court's orders,
especially in relation to unnamed defendants.
EDITOR'S NOTE
The plaintiff, Montres Rolex S.A., is a Swiss
corporation which owns Canadian trade-marks for
jewellery and watches. The other plaintiff, a
Canadian corporation, is the sole registered user
of these trade-marks. It distributes Rolex watches
to some 200 jewellers throughout Canada.
Since commencement of this action in 1986,
plaintiffs had obtained interim and interlocutory
injunctions including Anton Piller orders. Subse
quently, certain of the defendants were fined for
contempt after show cause orders were issued.
Later still, three of the named defendants con
sented to judgment restraining them from infring
ing plaintiffs' registered trade-marks and from
importing or dealing in wares bearing the name
Rolex which are not of the plaintiffs' manufacture.
The judgment included a subsection 52(4) order
prohibiting importation of imitation Rolex watches.
The judgment was directed to five named defend
ants and to "all others" selling imitation Rolex
products. His Lordship expressed the opinion that
this judgment, rendered in January 1987, would
have bound only the particular defendants named
therein. Later that year, the Associate Chief Jus
tice denied a motion for an order that the named
defendants who were defending plaintiffs' claims
be appointed representatives of all unidentified
phony watch sellers. Another Judge did grant an
order amending the style of cause by adding as
defendants "John Doe and Jane Doe and all
others unknown to the plaintiffs who sell, import,
advertise, manufacture or distribute" spurious
Rolex watches. When this case came on for trial,
counsel for plaintiffs filed a consent to judgment
signed by Redman, one of the named defendants.
The other, Pahmer, neither appeared nor was
represented. The consent to judgment purported
to extend to John and Jane Doe and all the other
unknown offenders.
In accordance with Rule 495(1)(a), His Lordship
ordered that the trial proceed. Thus plaintiffs had
to prove their case even though their witnesses
would not have to undergo cross-examination.
The Court accepted as evidence the affidavits of
a solicitor and long-time Secretary Treasurer of
the plaintiff Canadian company and of another
lawyer concerning the unauthorized sales across
Canada and the efforts undertaken to prevent the
sale of counterfeit watches by Toronto street
vendors. Witnesses testified as to watches being
sold at tables, from cases and vans at street
locations. These street vendors used "runners"
who would warn them of the impending arrival of
sheriff's officers. An experienced watchmaker
identified as imitations watches bearing the Rolex
trade-mark which had been sold by the defend
ant, Pahmer. The Vice President Marketing of the
plaintiff Canadian company gave evidence as to
the promotion of the Rolex line as luxury products
and the receipt of repair requests made by the
owners of bogus watches.
His Lordship found as a fact that the plaintiffs'
rights had been infringed and that the sale of
imitation Rolex watches was likely to mislead the
public. These sales were by street vendors with
no fixed business address and therefore not
easily identified. This made it difficult for the plain
tiffs to protect their rights through legal proceed
ings. The plaintiffs had not acquiesced in or con
doned this activity from which they had suffered
damage. Finally, the importation of imitation Rolex
watches contravened section 52 of the Trade
marks Act.
The plaintiffs were entitled to a permanent
injunction, an order prohibiting importation of imi
tation Rolex watches, an accounting of profits and
payment of same as damages and a declaration
of sole trade-mark user. Plaintiffs were authorized
to apply for the appointment of a referee under
Rules 480 and 500 to determine Pahmer's profits.
This was not a case for an award of punitive
damages. Costs were, however, awarded against
Pahmer on a solicitor and client basis in view of
his cavalier disdain for the plaintiffs' rights as well
as for an order of the Federal Court.
Relief in relation to persons unknown, including
John Doe and Jane Doe
In addition to relief against named defendants,
the plaintiffs seek relief principally in the form of
a permanent injunction and an order under subsec
tion 52(4) of the Act which would prohibit unau
thorized use of their trade-marks in Canada by the
importation of wares not of their manufacture or
merchandise but bearing their trade-marks or
replicas of them. Supporting orders calling upon
police or customs officers to assist the plaintiffs'
solicitors in enforcement of the main orders
claimed are also sought. The main orders sought
are claimed to prevent prohibited activities of per
sons unknown and unidentified which activities
infringe upon the plaintiffs' exclusive rights under
their registered trade-marks.
The bases of the claim by the plaintiffs for an
order that would bind persons unknown are essen
tially two. The first is the difficulties they have
faced in seeking to protect their lawful interests
under registered trade-marks in circumstances
where the activities of those said to infringe their
rights are so fluid and mobile that traditional
procedures, including orders of the court are less
effective than in more regular marketing and busi
ness circumstances. The second is the form and
earlier procedures in this action which they have
sought from its initiation to structure as a class
action. As earlier noted the original style of cause
included as defendants certain persons named "on
behalf of themselves and on behalf of all others
selling, offering for sale, importing, advertising"
imitation Rolex wares. Later, the plaintiffs applied
for an order that the named defendants Redman
and Pahmer, who were defending the action, be
deemed to represent the class of all others engaged
in unauthorized use of the Rolex and Crown
Design trade-marks, and before the decision of
Jerome A.C.J. [T-2355-86, order dated 11/2/88
not reported] dismissing their application, they
had also obtained an order [T-2355-86, Collins J.,
order dated 11/1/88, not reported] adding as
defendants in the action, and amending the style of
cause to include, "John Doe and Jane Doe, and all
others unknown to the plaintiffs who sell, import,
advertise, manufacture or distribute any wares in
association with the name Rolex or the Crown
Design .. . when the same are not of the plaintiffs'
manufacture or merchandise".
The plaintiffs urge that at the time of trial the
circumstances for considering this action as one
against a class of defendants were different from
those prevailing when their application was intro
duced in November 1987 and dismissed in Febru-
ary 1988, by the learned Associate Chief Justice.
Then the named defendants Redman and Pahmer
objected to any status as representing others
unknown to the plaintiffs, or to themselves. Now
Redman consents to an order directed to John and
Jane Doe and others unknown, and Pahmer does
not appear to defend their claims or to object at
trial. On this aspect of the plaintiffs' argument I
am not persuaded that these circumstances are
now so changed that I should differ from the
earlier decision of Jerome A.C.J. concerning the
status of Redman and Pahmer. Redman's consent
to judgment does not include consent that he
represent others, and there is no suggestion that
Pahmer has in fact consented to any such status.
Even if they had consented to represent others
that would not resolve the matter. Counsel for the
plaintiffs urged that Rule 1711 [Federal Court
Rules, C.R.C., c. 663] merely requires that the
interests of defendants be the same for the Court
to treat certain designated persons as representa
tives of a class. Here it is urged the class of persons
unknown or unidentified is not the world at large
but only those "others selling, offering for sale,
importing, advertising, manufacturing or distribu-
ting any wares in association with the name Rolex
or the Crown Design (the registered trade-marks
herein) when the same are not of the plaintiffs'
manufacture or merchandise". It is urged that
Pahmer at least ought to be treated at this stage,
at the conclusion of trial, as representative of this
class.
Counsel urged that Rule 1711 not be rigidly
applied (see: Government of Canada v. Perry et al.
(1981), 41 N.R. 91 (F.C.A.) per Ryan J. at pages
99-102); and John v. Rees, [1970] Ch. 345, at
page 370; [1969] 2 All E.R. 274, at pages 282-283
per Megarry J.); that the Court might appoint a
representative of a class of defendants even where
the proposed representative objected (Wood v.
McCarthy, [1893] 1 Q.B. 775 (Eng.); though a
representative might not be deemed appropriate to
stand for other defendants in an action for a debt
owed (Walker v. Sur, [1914] 2 K.B. 930 (C.A.)).
Counsel also relied upon the principles and criteria
related to class actions as set out in Butler et al. v.
Regional Assessment Commissioner, Assessment
Region No. 9 (1982), 39 O.R. (2d) 365 (H.C.);
and by General Motors of Canada Ltd. v. Naken
et al., [1983] 1 S.C.R. 72. It was urged that the
circumstances of this case warranted treatment of
Pahmer as representative of others unknown, as
described in the style of cause.
I am not persuaded that this is a proper case in
which to consider one named defendant, Pahmer,
to be representative of all others unknown who are
engaged in activities complained of by the plain
tiffs. Many of the cases dealing with class actions
deal with situations where the proposed class
members have had some association before the
action, for example, membership in a trade union
or an unincorporated association. Many also con
cern plaintiffs as a class. Even in these cases an
important criterion in relation to the application of
Rule 1711, and like rules, is that the interest in
question of all those in the proposed class be
common or the same. (See: Smith v. Cardiff
Corp., [1953] 2 All E.R. 1373 (C.A.); General
Motors of Canada Ltd. v. Naken et al., supra.)
Here there is no persuasive argument that,
viewed from any perspective other than that of the
plaintiffs, the proposed class of defendants has any
common or same interest. Where there is a possi
bility of different defences, a class action binding
prospective defendants is inappropriate. (See: Kiist
v. Canadian Pacific Railway Co., [1982] 1 F.C.
361 (C.A.); Heath Steele Mines Limited v. Kelly
and Astle (1978), 22 N.B.R. (2d) 619 (C.A.).) A
key factor in recognizing representatives for a
proposed class of defendants may well be reason
able confidence on the part of the Court that the
representatives will defend the common or same
interest of members of the class concerned. With
out this there can be little confidence that the
purpose of rules supporting class actions can be
met, that is that a multiplicity of actions will be
avoided and litigation will proceed in an orderly
fashion that is acceptable to all the persons who
may be affected. Without that confidence it may
be inferred that a member of a proposed class of
defendants may not be bound by a judgment con
sented to by one of the class. (See: McNair J.,
Montres Rolex S.A. v. Canada, [1988] 2 F.C. 39
(T.D.), at page 51.) In this case the defendant
Pahmer did not appear at trial to defend his own
interests. In these circumstances, it is not appropri
ate that he be decreed representative of any class
of others unknown.
If any others than defendants here identified are
to be bound by the orders to issue following trial it
will have to be by virtue of the orders extending to
"John Doe and Jane Doe and all others". I turn to
consider whether any order in the nature of a
permanent injunction or an order prohibiting
importation under subsection 52(4) of the Act
should so extend in this case.
The inclusion of the names "John Doe" and
"Jane Doe", and reference to "persons unknown",
for defendants who are not identified by name
when an action is commenced is not unusual. In
this Court that practice has evolved particularly in
regard to the protection of intellectual property
interests, especially trade-marks, in circumstances
where the identity of defendants is difficult if not
impossible to determine at the time relief is
sought. Relief granted against unidentified defend
ants described in this way has been limited, with
few exceptions, to temporary orders of an interim
or interlocutory nature pending trial. Ordinarily it
provides for service of the order on persons found
engaged in activities prohibited, with an explana
tion and an opportunity for them to contest the
applicability of the order, and to be added as
named defendants in advance of trial.
Interim orders in this case thus were directed to
"others unknown" in addition to named defend
ants, even before John Doe and Jane Doe were
added as defendants. In somewhat similar circum
stances to these, interim and interlocutory orders
were granted in Cartier, Inc. v. John Doe (1987),
13 C.I.P.R. 316 (F.C.T.D.) (and in Cartier, Inc. v.
Doe, [1990] 2 F.C. 234 (T.D.) dealing with that
case), and also in a later but similar case Montres
Rolex S.A. v. Lifestyles Imports Inc. (1988), 23
C.P.R. (3d) 436 (F.C.T.D.). Another circum
stance where relief has been sought and granted in
relation to persons unknown, on a temporary basis
pending trial or further hearing of the matter, has
been where the trade-mark interests of promoters
of concert performances or of satellite broadcasts
of sports or entertainment features are threatened
by unauthorized use. (See: Krimson Corp. v. Per
sons Unknown (T-1714-87, Jerome A.C.J., order
dated 12/8/87, not reported).
In two instances noted below relief granted in
the form of orders under subsection 52(4) of the
Trade-marks Act, prohibiting importation of
counterfeit watches raised questions mainly about
that section but implicitly they raise questions
about the reach of court orders directed to John
Doe, Jane Doe and others unidentified by their
own names. I propose to discuss those cases (Mon-
tres Rolex S.A., and Cartier, see below) in relation
to subsection 52(4). For the moment it is sufficient
to note that orders, in the first case referring to
"all others unknown" in terms of the original style
of cause in this action, and in the Cartier case
directed to "John Doe and Jane Doe and other
persons unknown", were held ineffective bases, in
the absence of a trial, for an order for purposes of
subsection 52(4) which require that importation be
found to be contrary to the Act.
The plaintiffs referred in argument to Callmann
on The Law of Unfair Competition, Trademarks,
and Monopolies an American treatise, to certain
Canadian cases dealing with actions where John or
Jane Doe was defendant. Callmann discusses the
increasingly widespread practice of including John
Doe as defendant in circumstances where at the
time of action the defendant is unidentified, a
practice recognized to deal particularly with
mobile vendors of wares which infringe the trade
marks of others. The Canadian cases, dealing with
other circumstances, included Jackson v. Bubela et
al. (1972), 28 D.L.R. (3d) 500 (B.C.C.A); and
Golden Eagle Liberia Ltd. et al. v. International
Organization of Masters, Mates and Pilots,
[1974] 5 W.W.R. 49 (B.C.S.C.) where Hutcheon
L.J.S.C. at page 52 refers to Jackson as indicating
that at least in British Columbia "a plaintiff is not
to be frustrated in his claim by a procedural
requirement that the defendant be named where
the circumstances are such that the name is not
known or ascertainable." In Dukoff et al. v.
Toronto General Hospital et al. (1986), 54 O.R.
(2d) 58 (H.C.) Saunders J. allowed an appeal
from the order of a Master who had permitted
replacement of John Doe and Jane Doe with the
names of persons employed by the hospital but not
identified until after expiry of the limitation period
in a claim for medical malpractice. In both Jack-
son and Dukoff reference is made to Davies v.
Elsby Brothers, Ltd., [1960] 3 All E.R. 672
(C.A.); there Devlin L.J. said at page 676 in
discussing the English rule permitting change of
names where there is said to be a misnomer in
original description of the parties:
The test must be: How would a reasonable person receiving the
document take it? If, in all the circumstances of the case and
looking at the document as a whole, he would say to himself:
"Of course it must mean me, but they have got my name
wrong", then there is a case of mere misnomer. If, on the other
hand, he would say: "I cannot tell from the document itself
whether they mean me or not and I shall have to make
inquiries", then it seems to me that one is getting beyond the
realm of misnomer.
All of the cases to which I have been referred,
except the two cases to be discussed in relation to
orders under subsection 52(4), seem clearly to deal
with John Doe and Jane Doe as defendants for a
limited time, that is until trial of the matter. The
use of such names generally permits, under Court
order, a plaintiff to add the names of defendants as
these become identified up to the time of trial. An
order issued at the conclusion of trial as an order
finally disposing of the matter does not then gener
ally include John Doe or Jane Doe or others
unknown. The use of obviously fictitious names
for, and reference to, persons unknown appears to
have been limited in practice for temporary pur
poses, to facilitate progress with a plaintiff's claim
for relief while the identity of defendants is clari
fied, pending trial.
By the statement of claim and in argument the
plaintiffs sought by attempting to structure a class
action against persons unknown, and by the addi
tion of "John Doe and Jane Doe and all others
unknown" engaged in certain described activities
to have orders issued that would bind persons
unknown, without express reference to time con
straints or the existence of those persons or their
engagement in activities complained of at the time
of trial. I do not accept that such an order would
be consistent with the practice of this Court.
On the other hand, circumstances may warrant
an order, at least one in the nature of a permanent
injunction that extends to some persons unknown
in addition to named defendants provided that the
circumstances are exceptional and the order is
expressly limited to conditions that are not incon
sistent in basic purpose and in principle with estab
lished practice.
Only exceptional circumstances would warrant
the issue of an order at this stage, following trial,
directed to John Doe, Jane Doe and persons
unknown. On the evidence adduced at trial and
considering the circumstances of this and similar
actions relating to the sale, distribution, importa
tion and advertising of counterfeit watches in imi
tation of those of the plaintiffs, I am persuaded
that the circumstances here are exceptional. These
circumstances include the difficulty faced by the
plaintiffs, and others in their position, in seeking to
protect their exclusive trade-mark interests
through the usual legal remedies under the Trade
marks Act for the remedies are largely frustrated
by the activities of those who knowingly infringe
upon the plaintiffs' interests including the importa
tion of imitation wares bearing the plaintiffs' regis
tered trade-marks or facsimiles of them. They do
this in the expectation that the nature and mobility
of their operations effectively reduces the likeli
hood that legal remedies will seriously affect them
adversely. At the same time, by infringing activi
ties they seriously undercut the exclusive rights of
the plaintiffs and for the long term the plaintiffs'
claim to exclusive use under registered trade
marks.
The circumstances are, in my view, sufficiently
exceptional to warrant an order extending to per
sons unknown. Yet that order must be consistent
with underlying principles of existing practice
including the minimizing of litigation and expenses
attendant upon it, ensuring that the activities com
plained of have taken place and are unlawful, that
persons allegedly involved have been engaged in
them before the time of trial of the action, and
ensuring that any person identified after trial as an
intended John Doe or Jane Doe has opportunity to
be heard in relation to the applicability of the
order to him or her before the order is enforced
against him or her. These conditions ensure that
the person unknown is in existence and engaged in
the activities infringing the plaintiffs' rights at the
time of trial of the action. Implicitly they also
ensure that there is a time limit on adding possible
"defendants" identified after trial to whom the
order will apply by reference to the limitation
period for action to restrain infringement. Such
terms are, in my opinion, appropriate in this case
in relation to the order for a permanent injunction
sought against John Doe or Jane Doe and others
unknown.
The other primary order sought by the plaintiffs
in this action was one under subsection 52(4) of
the Act. Section 52 of the Trade-marks Act and
section 114 of the Customs Tariff [R.S.C., 1985
(3rd Supp.), c. 41], together with Schedule VII,
Code 9967, are interrelated. The Customs Tariff
provisions are:
PROHIBITED GOODS
114. The importation into Canada of any goods enumerated
or referred to in Schedule VII is prohibited.
. . .
SCHEDULE VII
Code Prohibited Goods
. . .
9967 Any goods, in association with which there is used any
description that is false in a material respect as to the
geographical origin of the goods or the importation of
which is prohibited by an order under section 52 of the
Trade Marks Act.
Subsections 52(1) and (4) provide for orders pro
hibiting importation. Because the plaintiffs argued
that there was significant change in the section
from its predecessor at the time of re-enactment in
the 1985 Revised Statutes, c. T-13, (enacted in
1986) the following text includes words I have
underlined to indicate words inserted in the 1985
Revised Statutes and editorial notes to the right of
the text indicate words from the predecessor stat
ute (R.S.C. 1970, c. T-10, s. 52):
R.S.C., 1985, c. T-13, s. 52 R.S.C. 1970, c. T-10, s. 52
(words inserted underlined) (notations about changes to
1985 text)
52. (1) Where it is made
to appear to a court of com
petent jurisdiction that any
registered trade-mark or any
trade-name has been applied
to any wares that have been
imported into Canada or are
about to be distributed in
Canada in such a manner
that the distribution of the such, replaced by "the"
wares would be contrary to
this Act, or that any indica
tion of a place of origin has
been unlawfully applied to
any wares, the court may
make an order for the interim
custody of the wares, pending
a final determination of the
legality of their importation
or distribution in an action
commenced within such time
as is prescribed by the order.
. . .
(4) Where in any action such, replaced by "any"
under this section the court "under this section" inserted
finds that the importation is 1985
or the distribution would be such, replaced by "the"
contrary to this Act, it may such, replaced by "the"
make an order prohibiting the
future importation of wares
to which the trade-mark, such, replaced by "the"
trade-name or indication of
origin has been applied. so, deleted before "applied"
At trial counsel for the plaintiffs submitted that
the changes introduced by the amendments to the
wording of section 52 in the 1985 Revised Statutes
made the statute considerably broader in its
application than its predecessor as considered by
President Jackett, as he then was, in Adidas
Sportschuhfabriken Adi Dassler K. G. et al. v.
Kinney Shoes of Canada Ltd., E'Mar Imports
Ltd., Third Party (1971), 19 D.L.R. (3d) 680 (Ex.
Ct.), referred to below, and that it was now clearer
that subsection 52(4) does not require a party to
be named as defendant in an order under the
section.
I am not persuaded that the change in wording
introduced with the 1985 Revised Statutes is sig
nificant. Indeed, it would be contrary to the pur
poses and authority set out in the Statute Revision
Act, R.S.C., 1985, c. S-20, and in the Revised
Statutes of Canada, 1985 Act, R.S.C., 1985 (3rd
Supp.), c. 40, s. 4, which provide for statutory
revision, if the changes were changes of substance.
Yet before concluding whether an order under
subsection 52(4) does not require a defendant to
be named, as the plaintiffs submit, it may be
useful to review Adidas, supra, and two recent
cases relating to subsection 52(4), Montres Rolex
S.A., supra, and Cartier, Inc. v. Doe, [1990] 2
F.C. 234 (T.D.).
In Adidas, supra, the learned President was
concerned with the terms of a judgment previously
rendered on consent of the defendant which, after
referring to consent of the parties, enjoined the
defendant from further sale or distribution in
Canada of footwear with stripes the same as
depicted in the plaintiffs' registered trade-mark,
and further provided in part [at page 682]:
2. The importation into Canada of footwear bearing three
stripes the same as the Plaintiffs' trade mark registration
number 161,856, not being the wares of or sold by the Plain
tiffs, be and the same is hereby prohibited ....
In commenting upon this paragraph and refer
ring to the section [s. 51] of the Trade Marks Act
[S.C. 1952-53, c. 49] comparable to the current
section 52, Jackett P. referred to counsel for the
plaintiffs objecting to any change in that para
graph of the judgment. Counsel had framed it in
terms then considered acceptable to the customs
authorities as an order under the subsection [subs.
51(4)] comparable to the current subsection 52(4)
requiring them to prevent importation by any
person whereas an order directed to a named party
would not be accepted by customs officers as such
an order. He said in part (at pages 688, 690, 691
as noted in 19 D.L.R. (3d):
(Subject to the express authority in s. 51(5) to make an order
for interim custody under s. 51(1) ex parte, my assumption
would have been that none of the relief authorized by these
provisions could be granted except as against a person who was
a party to the proceedings in which the relief was sought and
who had, as such, had an opportunity of meeting the case put to
the Court in support of the claim for a judgment against him.
That question as to whether ss. 51 and 52 are so limited does
not have to be decided, in my view of the matter, at this
time.. ..[At p. 688.]
In my view, no Court would grant an application for a
judgment based on the consent of one person and effective as
against the world without being persuaded that there was some
extraordinary power and duty, to grant such a judgment, and,
in that unlikely event the situation would be spelled out in
detail on the face of the judgment. To use Lord Macnaghten's
language, it is hardly "decent" to attribute to the Court any
other manner of dealing with such an extraordinary
application.
Thus, as far as this particular matter is concerned, it is quite
clear in my mind that if, when the application was made for
this consent judgment, I had been asked to make an order
under s. 51(4) effective as against all the world, I should have
indicated that the applicant would have to convince me that the
Court had, under s. 51(4), power to make an order against any
person who had not been made a party to the proceeding and,
thus, given an opportunity to defend himself. On at least one
earlier occasion, I was told that such an application was
contemplated and that was my immediate reaction. In addition,
had the matter been pursued, I have no doubt that I would have
required to be shown,
(a) that the action falls within the words "such action" in s.
51(4), and
(b) that the condition precedent to an order under s. 51(4) that
the Court has found "that such importation is or such
distribution would be contrary to this Act" had been
satisfied. [At pp. 690-691.]
In Adidas, Jackett P. concluded that the consent
judgment previously issued would be changed to
delete reference to the prohibition of importation,
because a consent judgment could not provide the
basis for such an order. The principle underlying
the decision was followed by my colleague, Mr.
Justice McNair in Montres Rolex S.A. v. Canada,
supra. That case arose out of earlier stages in this
very action now tried. Earlier reference was made
to the judgment granted by Giles A.S.P., in Janu-
ary 1987 [not reported] following consent to judg
ment by those of the defendants originally named
in this action and the default in appearance or
defence by two others. The judgment then granted
provided in part:
1. The Defendants Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson and all others sell
ing, offering for sale, importing, advertising, manufacturing, or
distributing any wares in association with the name Rolex or
the Crown Design being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056 under the
Trade Marks Act R.S.C. 1970, as amended, when the same are
not of the Plaintiffs' manufacture or merchandise, be and the
same are herein enjoined from:
(i) infringing the registered Trademarks No. 278,348, No.
208,437, No. 130/33476 and No. 78/19056;
(ii) directly or indirectly using the name Rolex or the Crown
Design on or in connection with watches or other wares not
of the Plaintiffs' manufacture or merchandise;
(iii) directly or indirectly in any way representing that the
business of the Defendants is connected with the business of
the Plaintiffs;
(iv) directly or indirectly selling, offering, exposing or adver
tising for sale or procuring to be sold or manufacturing or
distributing any wares under the name Rolex or the Crown
Design if the same are not of the Plaintiffs' manufacture or
merchandise, or under any other name which by reason of
colourable imitation of the word Rolex or the Crown Design
or otherwise is calculated to represent or lead to the belief
that such wares are the wares of the Plaintiffs if the same are
not of the Plaintiffs' manufacture or merchandise;
2. The Defendants Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson and all others sell
ing, offering for sale, importing, advertising, manufacturing, or
distributing any wares in association with the name Rolex or
the Crown Design, being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056 under the
Trade Marks Act, R.S.C. 1970, as amended, when the same
are not of the Plaintiffs' manufacture or merchandise, be and
the same are hereby prohibited from importing into Canada
any watches or other wares bearing the registered Trademarks
No. 278,348, No. 208,437, No. 130/33476 and No. 78/19056,
to wit the name Rolex and the Crown Design, or any colourable
imitation of the same which is calculated to represent or lead to
the belief that such wares are the wares of the Plaintiffs, if the
said trademarks or the said colourable imitation have been
applied to watches or other wares that are not of the Plaintiffs'
manufacture or merchandise.
The plaintiffs had sought to have the order
enforced by customs officials without success and
then sought mandamus to compel enforcement of
the prohibition against imports. McNair J.
declined to grant mandamus. He said (at [1988] 2
F.C., pages 49 and 53, respectively):
I am wholly in agreement with the opinion stated by the
learned President of the Exchequer Court in Adidas to the
effect that it is a necessary condition precedent to any discre
tionary order under subsection 52(4) that the Court find that
the importation and distribution of the offending wares was
contrary to the Trade Marks Act. There must be a final
determination of the legality of the subject-matter complained
of before there can be any subsection 52(4) order. As I see it, I
am obliged in the circumstances of this case to take the matter
one step further than Adidas and decide how and in what
manner the Court must make such final determination.
In the result, I am of the opinion that the plain and natural
meaning of the words employed in section 52 of the Trade
Marks Act in context of its statutory scheme clearly import the
mandatory requirement of a final determination of the legality
of the importation and distribution of the offending wares as a
necessary precondition for any discretionary order under sub
section 52(4) prohibiting their future importation. In my judg
ment, such determination can only mean an adjudication of the
issue on the merits at trial. I find therefore that neither the
consent judgment nor the judgment obtained in default of
defence have the necessary sanction to mandate a subsection
52(4) order. That being so, the issue of the class action
representation and its validity or not is irrelevant.
In Montres Rolex S.A., supra, the judgment
was final in relation to consenting and defaulting
named defendants and the terms of the judgment
rendered were directed not merely to the named
defendants but also to "all others selling" watches
or wares bearing the plaintiffs' registered trade
marks without authority of the plaintiffs. In
another case Cartier, Inc. v. Doe, supra, an order
which on its face appeared to be final, was issued
ex parte by my colleague Mr. Justice Teitelbaum
in an action against defendants "John Doe and
Jane Doe and other Persons Unknown to the
Plaintiff Who Sell Counterfeit Watches On the
Street in Toronto, Ontario". The order provided in
its operative terms:
1. The importation by anyone of more than ten watches bear
ing any of the Trade Marks CARTIER, MUST, MUST DE CAR-
TIER or LES MUST DE CARTIER and declared to be replica,
copy, imitation or counterfeit watches is hereby prohibited
pursuant to Section 52 of the Trade Marks Act.
2. Any officer or inspector of the Department of National
Revenue, Customs & Excise, before whom the watches referred
to in paragraph 1 of this Order are declared for importation
into Canada, shall immediately detain the watches pursuant to
the Customs Tariff Act, Section 14, Section C.
3. At any time that this Order is enforced, the person from
whom the watches are seized shall be told that he or she may
appeal the detention of the watches under Sections 58-63 of
The Customs Act or apply to this Court for the return of any
watches seized.
4. Any individual who legitimately imports into Canada any
watches and whose watches are detained pursuant to this Order
may, on twenty four hours notice to the solicitors for the
Plaintiffs, together with service on the solicitors for the Plain
tiffs of any supporting material, apply to this Court for the
return of any watches detained.
5. There shall be no costs of this motion.
On a motion by the Minister of National Reve
nue for an order rescinding the ex parte order my
colleague Pinard J., granted the application. Rely
ing upon the decisions of Jackett P. in Adidas and
of McNair J. in Montres Rolex S.A. he found that
since no finding had been made, for no trial had
been held in the plaintiffs' action, the order should
be rescinded.
The decisions in Adidas, Montres Rolex S.A.
and Cartier all emphasize the necessity for find
ings in a final judgment in an action as the neces
sary basis for an order under subsection 52(4) of
the Act. In this case that basis is now established,
with the judgment associated with these reasons.
The three cases do not resolve the manner in
which an order under subsection 52(4) should be
framed or whether it need be directed against one
or more defendants who have the opportunity to be
heard in the action leading to the findings upon
which the order is based. In Adidas the terms of
the order prohibiting importation of infringing
wares were not directed to anyone and President
Jackett's comments leave open a query about that.
In Montres Rolex S.A. the terms were directed to
named defendants and all others importing
infringing wares. In Cartier the terms were not
directed to anyone but prohibited importation by
anyone of more than ten watches that were imita
tions, in an action styled with defendants "John
Doe and Jane Doe and Other Persons Unknown to
the Plaintiff Who Sell Counterfeit Watches On
The Street in Toronto, Ontario", and one named
defendant.
The plaintiffs in this action, in the current round
in this ongoing saga, seek an order that reaches
beyond named defendants. While seeking to have
defendants including persons unknown accepted as
a class of defendant, and to have the order reach to
John Doe and Jane Doe and persons unknown,
they also urge that subsection 52(4) does not
require that a defendant be named in the terms of
an order prohibiting importation under that sec
tion. I agree that neither subsection 52(4) nor
other portions of section 52 of the Act expressly
refer to the naming of parties in relation to orders
that may be made, for interim custody pending
final determination in an action under subsection
52(1) or for prohibiting future importation under
subsection 52(4). I note, however, that section 52
as a whole deals with legal proceedings and implic
itly it is written relying upon judicial proceedings
from which the orders authorized would issue,
proceedings in which ultimately there is opportu
nity for a defendant to be heard. Proceedings here
have provided that opportunity. At trial, evidence
has shown that importation from abroad of imita
tion Rolex watches and wares has seriously and
adversely affected the plaintiffs' rights to exclusive
use in Canada of their registered trade-marks.
In the scheme of the Trade-marks Act the
purpose of subsection 52(4) is to support the
efforts of the registered owner or registered user of
a trade-mark registered under the Act to protect
their exclusive rights, created by sections 19
and 50 respectively, in a case like this one where
the wares bearing their registered trade-marks or
facsimiles of them, without authorization, orig-
inate abroad and are brought or shipped into
Canada for commercial purposes. In these circum
stances an order under subsection 52(4) not direct
ed to specific defendants but prohibiting the future
importation for commercial purposes of imitation
watches and wares bearing the trade-mark name
Rolex or the Crown Design is warranted.
That order will be limited to prohibiting impor
tation for commercial purposes, since it is my
understanding that is the nature of activities giving
rise to the plaintiffs' concerns and this action.
Developing appropriate tests for assessing com
mercial purposes for administration by customs
authorities may best be facilitated by discussion
between those authorities and counsel for the
plaintiffs. It may be that a quantitative test such
as the ten watches included as the basis of the ex
parte order by my colleague Mr. Justice Teitel-
baum, subsequently rescinded, in Cartier, supra,
would be appropriate, or it may be appropriate for
the names of consignees authorized by the plain
tiffs for receipt of legitimate wares to be provided.
If there be difficulty in developing appropriate
administrative standards for application of the
order prohibiting importation for commercial pur
poses, I expect that section 55 of the Trade-marks
Act, conferring jurisdiction on this Court "to
entertain any action or proceeding for the enforce
ment of any of the provisions of this Act or of any
right or remedy conferred or defined thereby",
provides a basis for the Minister of National Reve
nue or the plaintiffs to raise the matter by motion
for further consideration by the Court.
Conclusion
I should note that in considering relief to be
awarded in the circumstances of this case I have
considered not only the forms of relief sought by
the successful plaintiffs in the statement of claim
in this action and the consent of the defendant
Redman, but also the manner in which the pro
ceedings were carried forward, both before and at
trial. In some respects relief has been modified
from that requested by the plaintiffs, in light of my
assessment of appropriate relief and in the absence
of representations by the named defendant still
who was a party to proceedings at the time of trial.
I note also that in considering relief appropriate
in the circumstances of this case I have had regard
for section 53 of the Trade-marks Act which
provides (with my emphasis by underlining):
53. Where it is made to appear to a court of competent
jurisdiction that any act has been done contrary to this Act, the
court may make any such order as the circumstances require,
including provision for relief by way of injunction and the
recovery of damages or profits, and may give directions with
respect to the disposition of any offending wares, packages,
labels and advertising material and of any dies used in connec
tion therewith.
By separate document judgment is entered in
this matter. In summary, that judgment provides
for relief in the following terms and in relation to
the following parties defendant in these proceed
ings.
1. The plaintiff Rolex Watch Company of Canada
Limited is declared to be the sole registered user of
the four registered trade-marks, of which the
plaintiff Montres Rolex S.A. is the registered
owner, for the name Rolex and Crown Design.
2. The defendants Redman and Pahmer and those
under their control are enjoined from infringing
the plaintiffs' registered trade-marks, including
specified activities in relation to watches and wares
bearing the trade-marks Rolex or Crown Design
when those goods are not of the plaintiffs' manu
facture or merchandise.
3. The defendants John Doe, Jane Doe and all
others unknown to the plaintiffs, who before or at
the date of trial in this matter sold, imported,
advertised, manufactured or distributed any wares
in association with the name Rolex or Crown
Design where those goods were not of the plain
tiffs' manufacture or merchandise, are enjoined
from all of the same activities from which the
defendants Redman and Pahmer are enjoined; pro
vided that any person identified within 6 years
after the date of trial herein as one to whom this
clause may apply shall be served, inter alia, with
notice that they have opportunity to apply upon
motion for a determination that there are lawful
reasons why this clause should not apply to him or
her.
4. The defendants Redman and Pahmer and those
under their control, and any person to whom
clause 3 is found to apply are prohibited from
importing into Canada imitation Rolex watches or
wares.
5. The importation for commercial purposes of
imitation watches and wares bearing the plaintiffs'
registered trade-marks or facsimiles of them when
the goods are not of the plaintiffs' manufacture or
merchandise is prohibited pursuant to subsection
52(4) of the Trade-marks Act.
6. The defendant Redman and any person to
whom clause 3 is found to apply shall deliver into
the custody of the plaintiffs' solicitors any docu
ments or goods relating to activities carried on in
association with unauthorized use of the plaintiffs'
registered trade-marks.
7. A peace officer or police officer having knowl
edge of this judgment shall assist the plaintiffs in
its enforcement.
8. The defendant Pahmer shall render an account
ing of all profits received from the sale of imitation
Rolex watches and shall pay those profits to the
plaintiffs.
9. Costs are awarded against the defendant
Pahmer on a solicitor and client basis.
Finally, the judgment contains some matters
intended to complete procedural details of the
action. Thus, counsel for the plaintiffs is to ensure
service of a copy of the judgment upon the defend
ants Redman and Pahmer. Imitation Rolex wat
ches and wares held by the sheriff's office pending
trial or in the records of the Court are to be
released upon application to the plaintiffs' solici
tors. Upon filing an undertaking to meet any
damages or costs that may hereafter be awarded to
any person unknown who succeeds in an applica
tion under clause 3, the plaintiffs are relieved of
their undertaking given pursuant to earlier order
of the Court to maintain a bond as security for
damages and for costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.