Coca-Cola Ltd. et al. v. Pardhan et al., (1997) 139 F.T.R. 223 (TD)

• Judge: Wetston, J.
• Court: Federal Court (Canada)
• Case Date: October 09, 1997
• Jurisdiction: Canada (Federal)
• Citations: (1997), 139 F.T.R. 223 (TD)

Coca-Cola Ltd. v. Pardhan (1997), 139 F.T.R. 223 (TD)

MLB headnote and full text

Temp. Cite: [1997] F.T.R. TBEd. DE.064

Coca-Cola Ltd. and Coca-Cola Bottling Ltd. (plaintiffs) v. Musadiq Pardhan carrying on business as Universal Exporters, Mustafa Pardhan, 1106972 Ontario Limited carrying on business as Universal Exporters and John Doe and Jane Doe and other persons unknown to the plaintiffs who offer for sale, sell, import, manufacture, advertise, or deal in transhipped Coca-Cola Products (defendants)

(T-2685-95)

Indexed As: Coca-Cola Ltd. et al. v. Pardhan et al.

Federal Court of Canada

Trial Division

Wetston, J.

November 27, 1997.

Summary:

The plaintiff Coca-Cola companies sued the defendants, alleging that they infringed the plaintiffs' trademarks and depreciated the value of their goodwill by selling Coca-Cola, made for sale and consumption only in Canada, abroad. The defendants sought to strike out the statement of claim as disclosing no reasonable cause of action.

The Federal Court of Canada, Trial Division, allowed the motion and struck out the entire statement of claim without leave to amend.

Practice - Topic 2210

Pleadings - Striking out pleadings - Time for application - The defendants in an action for trademark infringement moved to strike out certain paragraphs of the plaintiffs' statement of claim - The plaintiffs asserted that the motion must fail because the defendants had delayed in bringing their motion to strike - There was a 15 month delay between the filing of the statement of defence and the motion to strike - The Federal Court of Canada, Trial Division, held that the delay did not bar the motion - In determining whether there had been delay, the period of time was only one consideration - The litigation was complex in the sense that the defendants were preoccupied with responding to motions for interlocutory injunctions, Anton Piller orders and to various motions in both the main action and a complimentary action in the United States - See paragraphs 6, 8 to 13.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action - The plaintiff Coca-Cola companies sued the defendants, alleging that they infringed the plaintiffs' trademarks and depreciated the value of their goodwill by selling Coca-Cola, made for sale and consumption only in Canada, abroad - The defendants sought to strike out the statement of claim as disclosing no reasonable cause of action - The Federal Court of Canada, Trial Division, allowed the motion and struck out the entire statement of claim without leave to amend.

Practice - Topic 2244

Pleadings - Striking out pleadings - Bars - Delay - [See Practice - Topic 2210 ].

Practice - Topic 2245

Pleadings - Striking out pleadings - Bars - Pleading to part to be struck - The defendants in an action for trademark infringement moved to strike out certain paragraphs of the plaintiffs' statement of claim - The plaintiffs asserted that the motion must fail because the defendants had pleaded over the statement of claim, without specifically objecting to the paragraphs which they now moved to strike - The Federal Court of Canada, Trial Division, held the defendants had pleaded over the paragraphs of the statement of claim without objecting to the paragraphs which they now moved to strike - Accordingly, the defendants could not be permitted to rely on grounds enumerated in rules 419(b) to 419(f) of the Federal Court Rules - See paragraphs 9, 13.

Trademarks, Names and Designs - Topic 1804

Trademarks - Infringement - Acts not constituting an infringement - [See first and third Trademarks, Names and Designs - Topic 1807 and Trademarks, Names and Designs - Topic 1808 ].

Trademarks, Names and Designs - Topic 1807

Trademarks - Infringement - Use - General - The plaintiff Coca-Cola companies sued the defendants, asserting that they infringed the plaintiff's trademarks by selling Coca-Cola, made for sale and consumption only in Canada, abroad - The plaintiffs asserted that the defendants' sale-for-export of Coca-Cola was deemed to be a "use" in Canada under s. 4(3) of the Trade-marks Act and that any unauthorized export amounted to infringement - The defendants moved to strike out the statement of claim as disclosing no reasonable of action - The Federal Court of Canada, Trial Division, allowed the defendants' motion - The export of trademarked products did not constitute "use" - The defendants did not violate the Act - See paragraphs 16 to 23.

Trademarks, Names and Designs - Topic 1807

Trademarks - Infringement - Use - General - In determining that the export of trademarked products by a secondary user did not amount to "use" under s. 4(3) of the Trade-marks Act, the Federal Court of Canada, Trial Division, stated that: "a purposive interpretation of s. 4(3) means that it applies to exports which would otherwise constitute use under the Act, but for the fact that a trade-marked product is being exported. The provision is intended to ensure that what would constitute infringement under the Act if done in Canada, will also constitute infringement if done abroad." - See paragraphs 20 to 22.

Trademarks, Names and Designs - Topic 1807

Trademarks - Infringement - Use - General - The plaintiff Coca-Cola companies sued the defendants, asserting that they infringed the plaintiff's trademark by selling Coca-Cola, made for sale and consumption only in Canada, abroad - The plaintiffs asserted that s. 8 of the Trade-marks Act provided the trademark owner with the right to attach binding limitations to the use of a mark where such limitations were expressly set out prior to the transfer or the trademarked wares - Since the defendants were aware of the plaintiffs' policy against exporting Coca-Cola for resale abroad, sales for export amounted to infringement - The defendants moved to strike out the statement of claim as disclosing no reasonable cause of action - The Federal Court of Canada, Trial Division, allowed the motion, holding that a trademark holder was not entitled, under s. 8, to attach limitations on use of products associated with its mark - See paragraphs 17 to 19.

Trademarks, Names and Designs - Topic 1808

Trademarks - Infringement - Use - Depreciation of goodwill - The plaintiff Coca-Cola companies sued the defendants, asserting that they experienced a depreciation in goodwill as a result of the defendants's sale-for-export of Coca-Cola (Trade-marks Act, s. 22) - The defendants moved to strike out the statement of claim as disclosing no reasonable cause of action - The Federal Court of Canada, Trial Division, allowed the motion - The defendants did not engage in activities which constitute "use" under s. 22 - Furthermore, any depreciation of the value of goodwill would have taken place outside Canada and was therefore beyond the court's jurisdiction - The court agreed with the principle that "the nature of goodwill as legal property with no physical existence means that where a business is carried on in more than one country or jurisdiction there must be a separate goodwill in each." - See paragraphs 23 to 31.

Cases Noticed:

Procter & Gamble Co. v. Nabisco Brands Ltd. (1985), 62 N.R. 364 (F.C.A.), refd to. [para. 8].

Montreuil v. R., [1976] 1 F.C. 528 (T.D.), refd to. [para. 8].

Ricafort et al. v. Canada (1988), 24 F.T.R. 200 (T.D.), refd to. [para. 8].

Gould v. Canada, [1989] 2 F.C. D/20 (T.D. Protho.), refd to. [para. 8].

Mayflower Transit Ltd. v. Marine Atlantic Inc. et al. (1989), 29 F.T.R. 30 (T.D.), refd to. [para. 9].

Asse International Inc. et al. v. Sveenska Statens Sprakresor, AB (1996), 70 C.P.R.(3d) 184 (T.D.), refd to. [para. 11].

Control Data Canada Ltd. v. Senstar Corp. (1988), 25 F.T.R. 81; 23 C.P.R.(3d) 421 (T.D.), refd to. [para. 11].

Comstock Canada v. Electec Ltd. (1989), 28 C.P.R.(3d) 495 (F.C.T.D.), refd to. [para. 11].

Cardinal et al. v. Canada (1996), 110 F.T.R. 241 (T.D. Protho.), refd to. [para. 11].

Sylvestre v. R., [1986] 3 F.C. 51; 72 N.R. 245 (F.C.A.), refd to. [para. 14].

Hirsh Co. v. Minshall (1988), 22 C.P.R.(3d) 268 (F.C.A.), refd to. [para. 14].

Ceminchuk v. IBM Canada Ltd. (1995), 101 F.T.R. 38; 62 C.P.R.(3d) 546 (T.D.), refd to. [para. 14].

Wilkinson Sword (Canada) Ltd. v. Juda (1966), 51 C.P.R. 55 (Ex. Ct.), refd to. [para. 18].

Wella Canada Inc. v. Pearlon Products Ltd. (1984), 4 C.P.R.(3d) 287 (Ont. H.C.), refd to. [para. 18].

McCabe v. Yamamoto & Co. (America) Inc. (1989), 25 F.T.R. 186; 23 C.P.R.(3d) 498 (T.D.), refd to. [para. 19].

Molson Cos. v. Moosehead Breweries Ltd. (1990), 32 C.P.R.(3d) 363 (F.C.T.D.), refd to. [para. 21].

National Sea Products Ltd. v. Scott & Aylen (1988), 20 F.T.R. 62; 19 C.P.R.(3d) 481 (T.D.), refd to. [para. 22].

Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd. et al. (1987), 16 C.P.R.(3d) 112 (F.C.A.), refd to. [para. 22].

Smith & Nephew Inc. v. Glen Oak (1996), 198 N.R. 302; 68 C.P.R.(3d) 153 (F.C.A.), refd to. [para. 23].

Clairol International Corp. v. Thomas Supply (1968), 38 Fox Pat. C. 176 (Ex. Ct.), refd to. [para. 24].

Source Perrier (SA) v. Firaless Marketing Co. (1983), 70 C.P.R.(2d) 61 (F.C.T.D.), refd to. [para. 24].

Kellogg Co. et al. v. Imperial Oil Ltd. (1996), 29 O.R.(3d) 70 (Gen. Div.), refd to. [para. 26].

Manos Foods International Inc. v. Coca-Cola Ltd. et al. (1997), 74 C.P.R.(3d) 2 (Ont. Gen. Div.), refd to. [para. 28].

Canada v. McNamara Construction (Western) Ltd. et al. (Appeal No. 1); Canada v. Stevenson (J.) and Associates et al. (Appeal No. 2), [1977] 2 S.C.R. 654; 13 N.R. 181, refd to. [para. 28].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304; 115 D.L.R.(3d) 1, refd to. [para. 32].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1; 18 D.L.R.(4th) 481; 13 C.R.R. 287; 12 Admin. L.R. 16, refd to. [para. 32].

Statutes Noticed:

Federal Court Rules, rule 419 [para. 1].

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 4(3) [para. 5]; sect. 8 [para. 7]; sect. 22(1) [para. 23].

Authors and Works Noticed:

Wadlow, Christopher, The Law of Passing-Off (1990), p. 62 [para. 26].

Counsel:

Andrew Shaughnessy, for the plaintiffs;

David A. Seed and Robert C.T. Liang, for the defendants.

Solicitors of Record:

Gowling, Strathy & Henderson, Toronto, Ontario, for the plaintiffs;

Chauhan & Associates, Richmond Hill, Ontario, for the defendants.

This motion was heard in Toronto, Ontario, on October 9, 1997, before Wetston, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on November 27, 1997.