The Federal Court decision in Burberry Limited and Chanel Limited, et al v. Ward et al, 2023 FC 1257 marks a significant enhancement in the remedies available to rights-holders against the importation and sale of counterfeit goods. More specifically, the Court granted the Plaintiffs’ request for an order restraining third parties with notice of the judgement from knowingly assisting the Defendants and requiring such third parties to provide information regarding the Defendant’s infringing activities, in instances where the Plaintiffs have a bona fide belief that the third party is in possession of information that is connected to the Defendants’ infringing conduct and has established to the Court on an ex parte informal motion that the third party likely has such information. The Order therefore places a positive obligation on third party shippers to provide information to the Plaintiffs relating to the Defendants’ infringing activities and facilitates the cooperation of third parties in stopping the infringing conduct. Additionally, to address the fact that the Defendants had and will likely continue to change names and shipping addresses in order to continue importing the counterfeit goods, the Court not only ordered that the goods that had previously been detained by CBSA were to be delivered up to the Plaintiffs, but also granted rolling relief for future shipments. The rolling injunction allows additional names used by the Defendants, and shipments otherwise linked to the Defendants, to be included in the delivery up from the CBSA without a new signed relinquishment or further court order. Such names and shipments are added to the Order by way of informal motion to the court establishing the connection between the name(s) and/or shipments and the Defendants.
The injunctive relief obtained is novel in Canada and will hopefully have a positive impact on the ability of right-holders to combat the importation and sale of counterfeit goods in Canada. The Court also returned to using the 1997 scale set for compensatory damages and granted significant punitive damages due to the nature and scope of the infringing conduct, reversing course from two prior decisions related to online sales of counterfeit goods (lululemon Athletica Canada Inc. v Campbell (2022 FC 194) and Louis Vuitton Malletier v Sheine Reyes Rosales, 2023 FC 217). Total trademark damages for Burberry and Chanel were calculated as $395,000 and $394,000 respectively. Given that the Defendants acted in bad faith, the Court also awarded the statutory maximum damages for copyright infringement for a total award of $120,000 and punitive damages of $100,000.
Cassels represented Burberry and Chanel.
To learn more about the potential impact of this case, please read our Cassels Comment, here.