Ring C.M.J.
Zoe International Distributing Inc. v Smoke Arsenal Inc., 2024 FC 2087
December 20, 2024
The Plaintiff, Zoe International Distributing Inc., brought an action against the Defendant, Smoke Arsenal Inc., for trademark and copyright infringement. In response, the Defendant filed a Statement of Defence and Counterclaim, resulting in the Plaintiff bringing a motion for an order striking portions of the Defendant’s impugned pleadings.
The primary issue for the Case Management Judge was whether the Amended Statement of Defence and Counterclaim should be struck according to Rules 221(a) and/or Rule 221(f) of the Federal Courts Rules. As an alternative argument, the Court considered whether the Defendant should be required to produce particulars in support of its pleadings.
With regards to whether the amended pleadings should be struck, the Court considered three separate arguments. The Court first rejected the Plaintiff’s assertions that the pleadings should be struck since they fail to plead material facts sufficient to disclose a reasonable defence or counterclaim. Ring C.M.J. found that the Plaintiff failed to discharge its burden in substantiating its claim that the impugned pleadings are unsupported by material facts. In fact, the Court found that the Defendant pled sufficient material facts to disclose a reasonable grey market goods defence.
Regarding the Part VIII Competition Act allegations, Ring C.M.J. accepted the Plaintiff’s assertions that the Court lacked the jurisdiction to consider allegations made under the Act. Therefore, those portions of the impugned pleadings were struck. Additionally, the Court held that the Defendant failed to plead sufficient facts to support the misuse of copyright defence. Given the novelty of this argument, the Court granted leave to amend the Statement of Defence to plead the requisite facts for the defence.
The third argument the Court considered with respect to striking out the impugned pleadings related to letters sent by the Plaintiff concerning the impugned products. The Defendant argued that the letter constituted false and misleading statements contrary to both the Trademarks Act and the Competition Act. The Court rejected the Defendant’s claims under the Trademarks Act because the Defendant failed to plead the requisite material facts relating to an intellectual property right and the alleged false and misleading statement was not in relation to any intellectual property of the Defendant. Nonetheless, with respect to the Defendant’s false and misleading allegations made under the Competition Act, the Court found that the Defendant pled sufficient material facts.
In considering the second issue of whether the Defendant should particularize the amended pleadings, the Court noted the distinction between the particulars to plead and particulars required for trial, stating that the Plaintiff failed to establish that any particulars sought were necessary to prepare a reply to those allegations.
Accordingly, the Court granted the Plaintiff’s motion in part by striking out portions of the impugned pleadings.
Prepared by Sandi Gendi, Borden Ladner Gervais LLP