2703203 Manitoba Inc. v. Parks et al., (2007) 253 N.S.R.(2d) 85 (CA)

• Judge: Cromwell, Saunders and Oland, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: April 03, 2007
• Jurisdiction: Nova Scotia
• Citations: (2007), 253 N.S.R.(2d) 85 (CA);2007 NSCA 36

2703203 Man. v. Parks (2007), 253 N.S.R.(2d) 85 (CA);

    807 A.P.R. 85

MLB headnote and full text

Temp. Cite: [2007] N.S.R.(2d) TBEd. AP.028

Ross Parks, Parrcom Atlantic Concepts Incorporated and Lloyd Smith (appellants) v. 2703203 Manitoba Inc. (respondent)

(CA 263242; 2007 NSCA 36)

Indexed As: 2703203 Manitoba Inc. v. Parks et al.

Nova Scotia Court of Appeal

Cromwell, Saunders and Oland, JJ.A.

April 3, 2007.

Summary:

The plaintiff held copyright in a publication called the "Coffee News". The defendants developed an identical publication called the "Flying Cow" after the plaintiff refused to do business with them as franchisees. The plaintiff sued for damages and injunctive relief for copyright infringement.

The Nova Scotia Supreme Court, in a judgment reported (2006), 239 N.S.R.(2d) 348; 760 A.P.R. 348, held that the defendants (except David Parks) deliberately infringed copyright and were liable in damages. The court granted injunctive relief and awarded $139,000 general damages and $100,000 punitive damages. The defendants appealed.

The Nova Scotia Court of Appeal, Saunders, J.A., dissenting only on the amount by which general damages should be reduced, allowed the appeal in part. The court affirmed liability, reduced general damages by $4,000 and reduced punitive damages from $100,000 to $40,000.

Copyright - Topic 4405

Infringement of copyright - General principles - Substantial similarity or substantial copying - The plaintiff franchised its copyrighted and trademarked publication (Coffee News) throughout Canada - Franchisees obtained advertising revenue and distributed free copies to restaurants, etc. - The plaintiff refused to do business with the defendants - The defendants surreptitiously commenced publishing the "Flying Cow", which was identical in design, form and format to the Coffee News - The defendants misrepresented to business owners that the Flying Cow was a sister publication of the Coffee News, rather than a competitor - The plaintiff lost, inter alia, advertising revenue - Copies of the Coffee News were removed from shelves by some of the defendants and replaced with the Flying Cow - Some business owners were persuaded to switch to the Flying Cow - The trial judge held that the defendants deliberately violated the plaintiff's copyright with a deceitful scheme to replace the Coffee News with the Flying Cow, using the plaintiff's goodwill and reputation - The defendants were also guilty of passing off - The plaintiff suffered economic loss - The judge granted injunctive relief and awarded $139,000 general damages and, because of the defendants' highly reprehensible conduct, $100,000 in punitive damages - The Nova Scotia Court of Appeal affirmed liability for copyright infringement and passing off - The court reduced punitive damages to $40,000, as $100,000 exceeded rational limits - Notwithstanding the paucity of evidence supporting the general damage award, the court affirmed the award with the exception of a $4,000 reduction - Saunders, J.A., dissenting on this point only, would have further reduced general damages to $70,500 given the lack of evidence supporting a higher award - See paragraphs 36 to 155.

Copyright - Topic 4586

Infringement of copyright - Remedies - Damages - [See Copyright - Topic 4405 ].

Damage Awards - Topic 2028.2

Exemplary or punitive damages - Trademark infringement - [See Copyright - Topic 4405 ].

Damage Awards - Topic 2030.1

Exemplary or punitive damages - Copyright infringement - [See Copyright - Topic 4405 ].

Damage Awards - Topic 2423

Intellectual property - Copyright infringement - [See Copyright - Topic 4405 ].

Damage Awards - Topic 2426

Intellectual property - Trademark infringement - [See Copyright - Topic 4405 ].

Practice - Topic 8820

Appeals - General principles - Duty of appellate court re findings of credibility by trial judge - The Nova Scotia Court of Appeal stated that a trial judge's credibility findings were not to be disturbed on appeal unless tainted by palpable and overriding error - See paragraph 30.

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues or points not previously raised (incl. new theory of the case) - In a copyright infringement action, the Nova Scotia Court of Appeal refused to permit the appellants/defendants from raising an issue that was not raised at trial - The court stated that "to introduce this issue for the first time on appeal would be prejudicial to the respondent and it is far too late for this court to consider the matter in the absence of an adequate evidentiary record" - See paragraphs 34 to 35.

Trademarks, Names and Designs - Topic 1816

Trademarks - Infringement - Remedies - Damages - [See Copyright - Topic 4405 ].

Trademarks, Names and Designs - Topic 3068

Trademarks - Unfair competition - Passing off - The Nova Scotia Court of Appeal stated that "to establish a claim of passing-off the claimant must show three things. First, the plaintiff must establish a goodwill or reputation attached to the goods or services by virtue of its 'get-up', whereby the public has come to identify such an appearance with the wares or services of that individual, thus creating a proprietary right in that appearance. Second, the plaintiff must establish a misrepresentation by the defendant to the public (whether intentional or not) leading or likely to lead one to believe that the goods or services offered by the defendant are the goods or services of the claimant. Third, the plaintiff must demonstrate that he has or likely will suffer damages by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the claimant." - See paragraph 48.

Trademarks, Names and Designs - Topic 3068

Trademarks - Unfair competition - Passing off - [See Copyright - Topic 4405 ].

Cases Noticed:

Secunda Marine Services Ltd. v. Liberty Mutual Insurance Co. et al. (2006), 245 N.S.R.(2d) 241; 777 A.P.R. 241; 2006 NSCA 82, refd to. [para. 26].

Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital, [1994] 1 S.C.R. 114; 162 N.R. 161; 38 B.C.A.C. 193; 62 W.A.C. 193; 110 D.L.R.(4th) 289, refd to. [para. 30].

Delgamuukw et al. v. British Columbia et al., [1997] 3 S.C.R. 1010; 220 N.R 161; 99 B.C.A.C. 161; 162 W.A.C. 161, refd to. [para. 30].

R. v. R.W. (1992), 137 N.R. 214; 54 O.A.C. 164; 74 C.C.C.(3d) 134 (S.C.C.), refd to. [para. 30].

CCH Canadian Ltd. et al. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339; 317 N.R. 107; 2004 SCC 13, refd to. [para. 36].

British Columbia Jockey Club v. Standen (Winbar Publications), [1983] B.C.J. No. 1769 (C.A.), refd to. [para. 40].

Reckitt and Colman Products Ltd. v. Borden Inc. et al., [1990] 1 All E.R. 873; 107 N.R. 161 (H.L.), refd to. [para. 48].

CIBA-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120; 143 N.R. 241; 58 O.A.C. 321, refd to. [para. 48].

Allister Harlow Construction Ltd. v. Shelburne Shopping Centre Ltd. (1981), 45 N.S.R.(2d) 271; 86 A.P.R. 271 (C.A.), refd to. [para. 66].

Matsushita Electric of Canada Ltd. v. Central Trust Co. and Coopers & Lybrand Ltd. (1986), 73 N.S.R.(2d) 250; 176 A.P.R. 250 (T.D.), refd to. [para. 66].

Hanna (M.A.) Co. v. Nova Scotia (Premier) (1990), 97 N.S.R.(2d) 281; 258 A.P.R. 281 (T.D.), refd to. [para. 66].

Industrial Union of Marine and Shipbuilding Workers, Local 1 (CAW/MWF Local 1) et al. v. Tardif et al. (2001), 198 N.S.R.(2d) 60; 621 A.P.R. 60 (S.C.), varied (2002), 203 N.S.R.(2d) 362; 635 A.P.R. 362 (C.A.), refd to. [para. 66].

Daishowa Inc. v. Friends of the Lubicon et al. (1996), 88 O.A.C. 1; 27 O.R.(3d) 215 (C.A.), refd to. [para. 66].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), leave to appeal refused (2005), 339 N.R. 200 (S.C.C.), refd to. [para. 66].

Verchere et al. v. Greenpeace Canada et al. (2004), 196 B.C.A.C. 161; 322 W.A.C. 161; 2004 BCCA 242, refd to. [para. 66].

Super-Save Enterprises Ltd. v. 249513 B.C. Ltd. et al., [2004] B.C.A.C. Uned. 89; 2004 BCCA 183, refd to. [para. 66].

39413 Alberta Ltd. v. Pocklington Holdings Inc. - see Gainers Inc. v. Pocklington Holdings Inc.

Gainers Inc. v. Pocklington Holdings Inc. (2000), 271 A.R. 280; 234 W.A.C. 280; 2000 ABCA 307, refd to. [para. 66].

Pepsi-Cola Canada Beverages (West) Ltd. v. Retail, Wholesale and Department Store Union, Local 558 et al. (1998), 172 Sask.R. 40; 185 W.A.C. 40 (C.A.), affd. [2002] 1 S.C.R. 156; 280 N.R. 333; 217 Sask.R. 22; 265 W.A.C. 22, refd to. [para. 66].

Campbell-MacIsaac et al. v. Deveaux et al. (2004), 224 N.S.R.(2d) 315; 708 A.P.R. 315; 2004 NSCA 87, refd to. [para. 76].

McPhee v. Gwynne-Timothy (2005), 232 N.S.R.(2d) 175; 737 A.P.R. 175; 2005 NSCA 80, refd to. [para. 76].

Murphy (Ken) Enterprises Ltd. v. Commercial Union Assurance Co. of Canada et al. (2005), 231 N.S.R.(2d) 327; 733 A.P.R. 327; 2005 NSCA 53, refd to. [para. 76].

Bonham-Carter v. Hyde Park Hotel (1948), 64 T.L.R. 176, refd to. [para. 83].

Capital Placement of Canada (C.P.C.) Ltd. v. Wilson (1988), 83 N.S.R.(2d) 170; 210 A.P.R. 170 (C.A.), refd to. [para. 84].

British Columbia v. Canadian Forest Products Ltd., [2004] 2 S.C.R. 74; 321 N.R. 1; 198 B.C.A.C. 1; 324 W.A.C. 1; 2004 SCC 38, refd to. [para. 86].

Reliable Leather Sportswear Ltd., Re, [1955] 2 D.L.R. 14 (S.C.C.), refd to. [para. 86].

Cotter v. General Petroleums Ltd., [1951] S.C.R. 154, refd to. [para. 86].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201, refd to. [para. 114].

Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193, refd to. [para. 119].

Lubrizol Corp. et al. v. Imperial Oil Ltd. et al., [1996] 3 F.C. 40; 197 N.R. 241 (F.C.A.), refd to. [para. 120].

Apotex Inc. v. Merck & Co. et al. (2003), 307 N.R. 364; 26 C.P.R.(4th) 278 (F.C.A.), refd to. [para. 122].

Draper v. Trist, [1939] 3 All E.R. 513 (C.A.), refd to. [para. 149].

Authors and Works Noticed:

Fox, Harold G., Canadian Law of Copyright and Industrial Designs (4th Ed. 2003) (Looseleaf), p. 24-74, paras. 24:15(d) [para. 119]; 24:15(b) [para. 147].

Klar, Lewis N., Linden, Allan M., Cherniak, Earl A., and Kryworuk, Peter W., Remedies in Tort (1987) (2006 Looseleaf Update, Release 5), vol. 3, para. 61 [para. 148].

Takach, George S., Computer Law (2nd Ed. 2003), pp. 122, 123 [para. 121].

Waddams, Stephen M., The Law of Damages (2006 Looseleaf Ed.), generally [para. 85].

Counsel:

John P. Merrick, Q.C., and William J. Mahody, for the appellants, Ross Parks and Parrcom Atlantic Concepts Inc.;

Lloyd E. Smith, appellant, on his own behalf;

William L. Ryan, Q.C., and Sarah Dykema, for the respondent, 2703203 Manitoba Inc.

This appeal was heard on November 21, 2006, at Halifax, N.S., before Cromwell, Saunders and Oland, JJ.A., of the Nova Scotia Court of Appeal.

On April 3, 2007, the judgment of the Court of Appeal was delivered and the following opinions were filed:

Saunders, J.A., dissenting in part - see paragraphs 1 to 145;

Cromwell, J.A. (Oland, J.A., concurring) - see paragraphs 146 to 155.