MBM Prevails as Federal Court Awards Unprecedented 50% Lump Sum Award of Costs in Trademark Dispute

By Scott Miller and Deborah Meltzer, August 24, 2022

On August 15, 2022, the Federal Court of Canada issued its decision with respect to costs in Dragona Carpet Supplies Missisauga Inc. v Dragona Carpet Supplies Ltd and Flooreno Building Supplies Inc., 2022 FC 1200, ordering one of the highest lump sum costs ever awarded in a trademark dispute, representing 50% of aggregate fees incurred, plus disbursements.

The decision was the culmination of a factually complicated family dispute related to the right to use and own the trademark “DRAGONA” in specified pockets of the GTA. The Defendants/Plaintiffs by Counterclaim were wholly successful in (1) defending against the Plaintiff’s motion for summary trial with respect to its claim of passing off, and (2) their own motion for summary trial with respect to their claim for expungement of three of the Plaintiff’s registered “DRAGONA” trademarks.

Ultimately, the Federal Court preferred the evidence of the Defendants. Although there was disagreement on the majority of the facts presented throughout the proceedings, the parties unequivocally agreed that the Defendant, Dragona Carpet Supplies Ltd., was the first to use the trademark DRAGONA. Based on the evidence, there was no basis for the Plaintiff to argue that it was entitled to the trademark registrations. In granting an exceptional lump sum cost award of 50% to the Defendants, the Court emphasized that in light of the facts, the Plaintiff ought never to have maintained the legitimacy of the trademark registrations, much less, waited until the commencement of the hearing to abandon its position.

This precedent-setting decision not only expanded the law on concurrent-use passing off and care and control in the context of a license, but further substantiates the Federal Court’s recent trend of opting for lump sum cost awards in lieu of the tariff, which represents a more reasonable and realistic recovery of legal fees for the successful party.

Congratulations to our newest partner, Poonam Tauh!

January 13, 2023

With great pleasure, we would like to announce that Dr. Poonam Tauh has been promoted to Partner.

Prior to joining MBM, Poonam earned a Ph.D. in organic chemistry from the University of Ottawa in 2001 and now has over 20 years experience as a Patent Agent.

Poonam moved to Calgary in 2012 to establish MBM’s Calgary office and has subsequently grown the office into a successful and vibrant MBM outpost in Western Canada to better serve our clients in the Alberta region.

“Poonam is an integral part of our MBM team. In addition, to her exceptional technical knowledge, her clients love working with her because of her calm nature and willingness to always go the extra mile. And, no matter how busy she is, her colleagues know they can always count on her for guidance and support. Poonam is a tremendous asset to our firm”, said Randy Marusyk, Co-Managing Partner.

To learn more about Poonam, check out her full bio here.

Poonam Tauh, Ph.D., Partner, Patent Agent
T: 403.800.9018
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CIPO Fees to Increase by 25% in 2024 and Expansion of the Definition of “Small Entity”

By Randy Marusyk and Alexandra Mazgola, August 22, 2023

The Canadian Intellectual Property Office (“CIPO”) has announced that effective January 1, 2024, most official fees will be increasing by 25%. On the patent side, the increase in the fees will be applicable to standard entity size. At the same time, the definition of “small entity” in the Patent Rules will be broadened from the current 50 employees to fewer than 100 employees, which would mean that more companies can fall into the small entity category and thus utilize the lower official fees. Canada remains an important jurisdiction in North America for IP filings and is further reinforced by rapid population growth, surpassing the 40 million mark in 2023. The above changes are detailed below with some recommendations for saving on official fees.

Significant CIPO Fee Increase

Effective January 1, 2024, a one-time 25% fee increase will be implemented, impacting most patent, industrial design, trademark and copyright fees. With respect to patent matters, this increase will not apply to businesses qualifying as a “small entity” under the Patent Rules. Thus, small entity patent applicants will only experience CIPO’s regular annual fee increase in 2024.

Below are a few examples of changes in CIPO’s fees (rounded up):

A complete listing of fee increases relating to patents, industrial designs, trademarks, copyrights, and other fees can be found on CIPO’s website here.

Expansion of the definition of “Small Entity” under the Patent Rules

Another important change is the broadening of the definition of “small entity” in the Patent Rules. This change is important because entities that meet the definition of small entity and who submit a small entity declaration are entitled to a 50% reduction of some CIPO patent-related fees.

Currently, a “small entity” is defined as a university or an entity that employs 50 or fewer employees at the time the patent application was filed or at the national phrase entry date for an international PCT application, but does not include:

(a) an entity that is controlled directly or indirectly by an entity, other than a university, that has more than 50 employees, or

(b) an entity that has transferred or licensed, or has an obligation other than a contingent obligation to transfer or license, any right or interest in a claimed invention to an entity, other than a university, that has more than 50 employees

The definition of “small entity” will be amended effective January 1, 2024, to increase the maximum number of employees from 50 employees to fewer than 100 employees. Thus, more companies will be able to qualify for the small entity category and, as a result, utilize the lower small entity fees. Please note that small entity status is determined at the time of filing (or at the national phrase entry date) and is only determined once.

This amendment does not entitle newly qualifying small entities to a partial refund of fees paid before January 1, 2024. The amendment is, however, allowing applicants who had more than 50 employees but less than 100 employees at the time of filing (or at the national phrase entry date) to start paying future fees at the small entity rate after January 1, 2024, provided all other small entity conditions were met when the patent was filed, and a small entity declaration is submitted.

Recommendations

1. As a result of these changes, individuals and businesses are encouraged to review their IP portfolios with their IP professional for possible new filings, examination requests and renewal/maintenance fees that can be done before January 1, 2024, to take advantage of the lower 2023 rates before the 25% increase takes effect.

2. Additionally, applicants should also review with their IP professional whether they will qualify as of January 1, 2024, for the expanded small entity status.