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TRADE-MARKS - Infringement - Confusion and deception - Remedies - Damages - Procedure - Costs - Assessment or fixing of costs - On appeal

Wednesday, March 15, 2017 @ 9:01 AM  


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Appeal by the defendant, Lam, from an award of damages and costs in favour of the plaintiffs, the Chanel companies. The plaintiffs alleged the defendants sold counterfeit Chanel products. In 2015, the Federal Court found the defendants liable for infringement of the plaintiffs' trade-marks and selling goods in a manner likely to cause confusion. The plaintiffs were awarded compensatory damages of $64,000, punitive and exemplary damages of $250,000, and costs totaling $66,000. The defendants were liable for the award on a joint and several basis. In 2016, the Federal Court of Appeal remitted the matter to the trial judge for clarification of whether the defendant was responsible for three or four instances of dealing in counterfeit goods. Upon redetermination, the trial judge clarified that the defendant was liable for four instances of counterfeiting and reaffirmed the initial decision's damages and costs awards. The defendant appealed the damages and costs awards. The plaintiffs appealed the costs award on the basis it failed to sufficiently reflect their settlement offer made prior to the redetermination hearing.

HELD: Appeal and cross-appeal dismissed. The compensatory damages award was calculated on the basis of a set amount per act of infringement for each defendant, consistent with the jurisprudence. There was no basis to revisit the award, as the redetermination decision confirmed liability for four instances of infringement, and liability was not appealed. The punitive damages award was justified in light of the findings of fact and governing principles. The award was rationally required to punish the defendants' misconduct given the findings of profit motivation, the vulnerability and erosion of the plaintiffs' trade-mark rights, the defendants' persistence in their infringement, and the defendants' attempts to mislead the court. The award was consistent with the objectives of retribution, deterrence and denunciation. The award of costs was discretionary and entitled to deference. The appeal was without merit and was dismissed with costs on a solicitor and client basis.

Chanel S. de R.L. v. Lam Chan Kee Co. (appeal by Lam), [2017] F.C.J. No. 197, Federal Court of Appeal, J.D.D. Pelletier, D.J. Rennie and J.M. Woods JJ.A., February 21, 2017. Digest No. 3642-010