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

60BPcm48nQ-580x365


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.

For more information please contact:

Scott Miller, Co-Managing Partner, Head of the Litigation Department
T: 613.801.1099
E:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Deborah Meltzer, Trademark Agent & Associate Lawyer
T: 613.801.1077
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

 

This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.
Submit to DiggSubmit to FacebookSubmit to Google BookmarksSubmit to StumbleuponSubmit to TwitterSubmit to LinkedIn

cb photo 111 561d6b13433c5JONATHAN ROCH

Partner

Jonathan assists clients with their intellectual property rights including patents, trademarks, copyrights, industrial designs and trade secretsMBM read_more_btn

MBM logo

About MBM

 The process of invention is complete only with the IP protection provided in law. That's where MBM comes in. We match our clients' creative thinking with the creative protection needed to achieve their goals.Read More About MBM

Protecting Plant Varieties in Canada

Protection for new plant varieties has been available for just over twenty years in Canada.  As new technologies are sought for increasing and improving crop production, Plant Breeders’ Rights help to encourage such innovation by rewarding plant breeders with exclusive rights to sell, and to produce for sale, the reproductive material of their new plant variety. Read More