The past year has brought forward several important decisions in Canada trademark law. From depreciation of goodwill claims, objections founded on bad faith and lack of distinctiveness, several cases have highlighted certain challenges that trademark owners may face in enforcing their rights.
Cease and desist letters are an important part of a lawyer’s tool kit: they notify the recipient of a claim, and ideally lead to the client resolving an issue without litigation. However, receiving such a letter can be unpleasant. They may even seem excessive, as if they were intended to achieve the maximum possible threatening effect. In Fluid Energy Group Ltd. v. Exaltexx Inc. (“Fluid v. Exaltexx”), Justice McHaffie of the Federal Court found that that indeed appeared to be the intention of Fluid’s letters, taking the unusual step of issuing an injunction ordering Fluid not to communicate with Exaltexx’s suppliers with respect to such suppliers’ alleged infringement of Fluid’s patents.
Where is the line between an appropriate cease and desist letter and one worthy of an injunction? In the case of letters alleging patent infringement, strangely enough, the answer may lie in section 7(a) the Trademarks Act, which was the basis for Exaltexx’s motion for the interlocutory injunction. That section reads: “No person shall … make a false or misleading statement tending to discredit the business, goods or services of a competitor…” This provision, however, must be read down so as to include only statements relating to the competitor’s intellectual property.