COURT FILE NO.: 99‑CV‑174995

DATE: 20010425

 

ONTARIO

SUPERIOR COURT OF JUSTICE

 

 

BETWEEN:                                                           )

                                                                              )

BELL EXPRESSVU LIMITED                              )                 K W. McKenzie and S. Reed, for the                                                                         )                                   Plaintiff

PARTNERSHIP                                                     )

                                                                              )

                                                                              )

                                                   Plaintiff              )

                                                                              )

-       and ‑ )

                                                                              )

                                                                              )

TEDMONDS & CO. INC., TEDSAT CORP.,               )                 David Shiller, for the Defendants,

1324071 ONTARIO LTD., EDWARD DALE       )                 Tedmonds & Co. Inc., Tedsat Corp.

EDMONDS a.k.a. TED EDMONDS,                      )                 1324071 Ontario Ltd., Edward Dale

GISELLE MARIE EDMONDS, JOHN DOES          )                 Edmonds and Giselle Marie Edmonds

I to 40, NETWORK SOLUTIONS INC., A.J.         )

BUTLER a.k.a. ANDREW JOHN BUTLER           )

and a.k.a. ANDREW J. BUTLER, A.J.                   )

BUTLER ENTERPRISES LTD. and JOHN DOE   )

41 c.o.b. TRANSONICNET                                        )

                                                                              )

                                                                              )

                                                                              )

                                                                              )

                                                   Defendants          )

                                                                              )

                                                                              )                 HEARD: March 27, 2001

 

                                                                                                 

                                                                                               

 

 

REASONS FOR DECISION

 

NORDHEIMER J.:

 

[1]       This is a motion by the Tedmond defendants to dissolve an injunction granted by me on

October 5, 1999. After that date, other defendants were added to this proceeding. However,

since the Tedmond defendants are the only active defendants currently in this proceeding, as well

as being the only defendants represented on this motion, I will hereafter refer to them, for

convenience sake, simply as the defendants. There is also a cross‑motion by the plaintiff for

partial summary judgment granting the plaintiff an permanent injunction as well as for relief regarding a website now being operated by the defendants.

 

[2]       The injunction which I granted on October 5, 1999 essentially prohibited the Tedmond defendants from:

"directly or indirectly manufacturing, importing or exporting to Canada, distributing, leasing, selling, offering for sale, installing, modifying, operating or possessing equipment or devices of any kind whatsoever (or any component thereof), that is or are designed to be used in Canada or can be modified to be used in Canada to directly or indirectly decode encrypted subscription programming signals that are not transmitted or broadcast by a lawful distributor, including but not limited to, encrypted subscription programming signals broadcast or transmitted by any party in any country other than Canada."

Facts

[3]       The plaintiff is licensed by the Canadian Radio‑television Telecommunications Commission ("CRTC") to broadcast Direct To Home ("DTH") television programming via satellite to Canadian subscribers. In order to use the plaintiffs services, Canadian residents must subscribe to the service and purchase an ExpressVu/Dish DTH satellite television decoding system. They are then authorized to decode the encrypted subscription programming signals transmitted by the plaintiff and view the programming. Star Choice is the only other licensed satellite DTH broadcaster in Canada.

 

[4]       There are similar services that operate in the United States. Those services also encrypt their programming signals for the purpose of trying to ensure that only people who pay for their services are allowed to decode the signals and watch the programming. The services in the United States are licensed by the Federal Communications Commission. The operators of the services in the United States are not authorized to permit their signals to be decoded in Canada. There are differences between the programming offered by the U.S. services and those offered by the Canadian services.

 

[5]       The plaintiff alleges that the defendants engage in illegal activities of two types. First, the plaintiff alleges that the defendants sell U.S. DTH decoder systems to Canadians and supply them with false U.S. addresses and other services in order to enable them to subscribe and pay


for programming from U.S. DTH broadcasters. This is commonly referred to as the "grey market".

 

[6]       Secondly, the plaintiff alleges that the defendants sell modified DTH decoder cards that permit individuals to decode U.S. DTH programming signals and watch them for free, that is, without having to make any payment to the owner of the programming signals. This is commonly referred to as the "black market".

 

[7]       Ted Edmonds is the principal of the corporate defendants. Mr. Edmonds admitted that the defendants engaged in both of these activities up until the time of my order. He specifically admitted that he sold U.S. systems with altered cards which allowed the viewing of all DTH programming in such a way as to avoid the payment of subscription fees. Mr. Edmonds, however, denied that his businesses performed the actual alteration of the cards.

 

[8]       The defendants have been in the business of selling satellite dishes for many years including the U.S. systems. They are also an authorized dealer for the plaintiff’s system. The defendants point out that these activities, regarding the selling of the U.S. systems with the related false addresses, and the selling of U.S. systems with altered cards, whether done by them or by any number of other like‑minded businesses, has been going on for some time and that it has been done openly. They submit that there is nothing unlawful in these activities.

 

[9]       I should mention one other fact that was put before me on the original motion because it relates directly to one of the arguments that is renewed before me now. The defendants said on the original hearing that they had only 1250 customers on their database of current subscribers. Given that the plaintiff had approximately 300,000 subscribers, the number of subscribers with whom the defendants are involved was asserted to be de minimis or trifling and therefore not something with which the court should concern itself. The defendants also said that if an injunction was granted, it would effectively put them out of business since at least 75% of their sales are of the U.S. systems. Mr. Edmonds contended that he would not be able to support his dependents, his family as well as his staff, should an injunction be granted.

[10]     Although there was some dispute as to the admissibility of the evidence on this motion, the defendants assert that the above consequences have come to pass insofar as the defendants


have been forced to close one of their two locations and have had to drastically reduce the number of staff that they employ. It appears, however, that the feared, ultimate impact of the injunction, that is, putting the defendants out of business, has not in fact occurred.

 

Motion to dissolve the injunction

 

[11]     There are four grounds advanced by the defendants which they contend, taken together, justify the dissolution of the injunction. Those grounds are:

 

(a)        there have been a number of court decisions since October 5, 1999 which have

concluded that the activities of the defendants do not violate section 9(l)(c) of

Radiocommunication Act, R.S.C. 1985, c. R.2;

(b)        there has been inordinate delay by the plaintiff in prosecuting this action;

(c)        contrary to the facts as they appeared at the time of the injunction, the plaintiff is

not in fact doing business with the defendants, and;

(d)        there has been a significant negative effect of the injunction on the defendants'

business.

 

A.         Subsequent decisions

[12]      There have been a number of decisions since October 5, 1999 that have considered the

application of section 9(l)(c) of the Radiocommunication Act in circumstances similar to those

here. Some of those cases have concluded that the activities complained of do violate section

9(l)(c) of the Act and others have concluded that they do not. Currently, there are more of the

latter cases than there are of the former. At the time of the argument before me, the principal

case among the latter group was the decision of the British Columbia Court of Appeal in Bell

ExpressVu Limited Partnership v. Rex (c.o.b. 'Can‑Am Satellites), [2000] B.C.J. No. 1803.

Leave to appeal from this decision was very recently (April 19, 2001) granted by the Supreme

Court of Canada[1] .

 

[13]     The majority of the British Columbia Court of Appeal in Rex concluded that activities like the type complained of here did not create an offence under section 9(l)(c). Mr. Justice Finch, speaking for the majority, considered that section 9(l)(c) was ambiguous and that the defendant was entitled to the benefit of a narrower interpretation of that section which would not prohibit the interception of encrypted signals emanating from outside Canada. Indeed, Mr.


Justice Finch went further and held that the narrower interpretation of section 9(l)(c) was the correct one. In particular, Mr. Justice Finch said, at para. 36:

 

"Section 9(l)(c) enjoins the decoding of encrypted subscription program signals that are not authorized by the lawful distributor of the signal. 'The signal' can only refer to signals broadcast by lawful distributors who are licensed to authorize decoding of that signal. 'Lawful distributor' is defined in the Radiocommunication Act to mean those who have the lawful right in Canada to transmit the signal and to authorize its decoding. If there is no lawful distributor for an encrypted subscription program signal in Canada, there can be no one licensed to authorize its decoding. Decoding of such an unregulated signal cannot therefore be in breach of the Radiocommunication Act."

 

[14]     Madam Justice Huddart, in dissent, reached the opposite conclusion. She found that section 9(l)(c) was not ambiguous and that the intention of Parliament in enacting the section was clear. Specifically, Madam Justice Huddart said, at para. 58:

 

"The words of section 9(l)(c), taken alone, provide a clear basis for the determination of Parliament's intention. That meaning is consistent with the purpose of the entire regulatory scheme in the context of the international copyright agreements, with the purpose of the Act within that scheme, and with the scheme of the Act itself."

 

[15]     I have carefully reviewed the decision of the British Columbia Court of Appeal in Rex and I will say that I find the reasoning of Madam Justice Huddart in dissent to be more compelling than that of Mr. Justice Finch for the majority, particularly because the analysis undertaken by Madam Justice Huddart appears to be more in accord with the apparent intention of Parliament in enacting these particular provisions of the Radiocommunication Act which, as I am able to discern it, was to legislate a complete prohibition against the decoding of encrypted subscription programming signals unless one could obtain authorization from the lawful distributor of the signal. If there is no lawful distributor to authorize the decoding, then the prohibition applies.

 

[16]     However, my view in this regard is largely immaterial since, on Friday last, our Court of Appeal released a decision on this very subject[2]. I refer to R. v. Branton [2001] O.J. No. 1445. In that case the Court of Appeal upheld the decision of Sheppard J. in which he quashed three


search warrants used to obtain evidence for a prosecution under section 9(l)(c). It may be useful at this juncture to repeat the actual words used in the section:

 

"No person shall

(c) decode an encrypted subscription programming signal or encrypted network feed, otherwise than under and in accordance with authorization from the lawful distributor of the signal or feed;"

 

[17]     In determining whether the order of Sheppard J. was correct, the Court of Appeal had to consider whether there were reasonable grounds to believe that the activities, for which the search warrants were to obtain evidence, gave rise to an offence. This in turn required a consideration of the meaning of section 9(l)(c). In reaching its decision upholding the order of Sheppard J., the Court of Appeal essentially agreed with the conclusion of the majority decision of the British Columbia Court of Appeal in Rex. In reaching this conclusion, Weiler J.A. said, at para. 23:

 

"With this approach in mind, the purpose of the legislation, gleaned from Parliament, as evidenced from Parliamentary debates and committee transcripts regarding the Broadcasting Act, S.C. 199 1, c. 11, leads to the conclusion that the law was never intended to prevent Canadians from receiving television programming from the U.S.: see Appendix A for relevant excerpts."

 

[18]     Madam Justice Weiler then went on to consider the French version of the wording of section 9(l)(c) which she found provided further support for the conclusion that Parliament had not intended to provide for a total prohibition against the decoding of a subscription programming signal. Rather, Madam Justice Weiler found that the prohibition was more narrow. Specifically she said, at para. 25:

 

"The legislation does not prohibit the making available in Canada, without authorization of the lawful distributor, the content of foreign programs, but rather the decoding of the signal of lawful distributors without their authorization."

 

[19]     Lastly, Madam Justice Weiler found that the wording of the section was ambiguous, amply evidenced by the fact that there were so many different interpretations of the section arrived at by courts across the country Given that ambiguity, Madam Justice Weiler concluded that the accused were entitled to the interpretation which was most favourable to them, which was the narrower interpretation.


[20]     This last finding causes some difficulty for the case that is before me because in this case the plaintiff is pursuing a civil remedy and not a criminal sanction. Indeed, it is pursuing a civil remedy which is expressly conferred on it by section 18 of the Radiocommunication Act. This fact raises the question whether the principle in the criminal context, that the accused is entitled to the interpretation that is most favourable to him or her, has application here. I conclude that it does. Section 18 only gives a civil cause of action, to a person who is licensed by the CRTC to operate a subscription programming system, to sue for the recovery of any loss or damage which arises from conduct contrary to section 9 from any person who engaged in the offensive conduct. Included in the rights given by section 18 is the express right to remedy by way of injunction. It is still necessary, therefore, to be able to find offensive conduct under section 9 in order to invoke the civil remedy accorded by section 18. In my view, there is no logical reason to interpret whether there is offensive conduct under section 9 for this purpose in any different way than it would be interpreted for the purpose of determining offensive conduct in the criminal context. It would appear, therefore, that the defendants are still entitled to the more favourable interpretation since one first has to find the conduct of the defendant to be contrary to section 9 before the civil remedy arises.

 

[21]     I am, of course, bound by the decision of the Court of Appeal. As a consequence of that decision, it is now difficult for me to conclude that there is a serious issue to be tried regarding whether the some of the conduct of the defendants, which is central to the complaint in this action, contravenes section 9(l)(c). I say some of the conduct of the defendants because it is necessary, in my view, to draw a distinction between those activities of the defendants, which I earlier referred to as the "grey market" activities, and those which I referred to as the "black market" activities. In my view, the "black market" activities must be treated differently since those activities would appear to clearly fall within the prohibition that Weiler J.A. refers to as the "decoding of the signal of lawful distributors without their authorization". In the situation of black market activities, there is no payment made to the owners of the signals nor is there any evidence or suggestion that the owners of those signals are authorizing those signals to be decoded without compensation. In my view, there remains a serious issue to be tried as to whether those activities offend section 9(l)(c). Indeed, if I am correct in my reading of the decision of the Court of Appeal in Branton, it is likely that such activities do in fact offend the section. I would mention, in this regard, that the British Columbia Supreme Court, in the


decision of first instance in Bell ExpressVu Limited Partnership v. Rex (c.o.b. 'Can‑Am Satellites), supra, gave an injunction directed against such black market activities while at the same time finding that such relief was not available with respect to the grey market activities.

 

[22]     That, however, is not the end of the matter. The plaintiff also relies on a claim that the activities of the defendants constitute the tort of intentional interference with contractual relations and economic interests. The plaintiff says that it is entitled to injunctive relief under this head of its claim regardless of the conclusion regarding section 9(l)(c). The requisite elements for the tort are set out by the Court of Appeal in Lineal Group Inc. v. Atlantis Canadian Distributing Inc. (1998), 42 O.R. (33d) 157 (quoting with approval from the Divisional Court's decision in Daishowa Inc. v. Friends of the Lubicon (1996), 27 O.R. (3d) 215 at p. 230). They are (i) an intention to injure the plaintiff, (ii) interference with another's method of gaining his or her living or business by illegal means; and (iii) economic loss caused thereby.

 

[23]     I accept that there may be evidence that could support a finding that each of these elements are present here. Nevertheless, the determination of whether the defendants are liable under that tort can ultimately be made only at a trial. The observations of the House of Lords in Lonrho plc v. Fayed, [1989] 2 All E.R. 65 per Lord Justice Dillon at p. 70, are apropos to the considerations before me:

 

"Here the existence of this tort is recognised, but the detailed limits of it have to be refined. I regard it as right and, indeed, essential that this should be done on the actual facts as they emerge at the trial rather than on a set of hypotheses, more or less wide, in very comprehensive pleadings. This is very far from being a case in which there is no conflict as to the facts, and the matters in conflict involve questions of intention, purpose, motive or probability. We have the general framework of the law which falls to be applied to this case laid down, and to a considerable extent refined as a result of this application. But the actual application of that law to the facts of the case should, in my judgment, be a matter for the trial of the action."

 

[24]     There is still considerable confusion and uncertainty in this province over the scope of this tort. However, having said that, and recognizing that the test for finding that there is a serious issue to be tried is a low one[3] , I would conclude that the plaintiffs claim in this regard does raise a serious issue to be tried. Nonetheless, in light of the fact that the principle ground

upon which the plaintiffs claim has always been based has been seriously undermined by the decision in Branton, and given the uncertainty surrounding the application of the economic tort, even accepting that there is a serious issue to be tried with respect to the latter does not lead me to conclude that the balance of convenience favours the granting of injunctive relief. There is a clear detrimental impact on the defendants' business from the effect of the injunction, to which I will make a further reference later, and there is still the uncertainty of the scope of the economic tort and the evidence that is necessary to satisfy the component parts of the tort. Consequently, the foundation for the plaintiff's claim is now considerably less sturdy than it was before. I conclude that the combination of these factors tips the balance in favour of the defendants. If it is correct that the defendants are lawfully entitled, under the Radiocommunication Act, to sell the grey market products, then it seems to me that the defendants should be able to engage in that otherwise legal activity, as they had previously, until that tort claim can be resolved at a trial or until the Supreme Court of Canada determines the principle issue.

 

[25]     Lastly on this aspect of the motion, the plaintiff relies on alleged breaches of various sections of the Criminal Code, R.S.C. 1985, c. C‑46, as also justifying the continuation of the injunction. The question of when a private party may seek injunctive relief for breach of the criminal law is an enormously complicated one[4] and not a question to which I would attempt an answer in the circumstances of this case. I believe it is sufficient to say that if the plaintiff cannot adequately sustain injunctive relief based on the specific statute which purports to regulate this conduct, then I fail to see how it could sustain it based on the more general provisions of the criminal law.

 

B.             Delay

 

[26]     In terms of the issue of delay, it is evident that this action has not been moving toward a trial as expeditiously as it ought to have, given the outstanding injunction. However, it is not clear that the blame for this delay can be laid entirely at the feet of the plaintiff. While I accept that the plaintiff has not been aggressively pushing the matter forward, the defendants also have not been trying to move the matter to trial nor have they been very quick to respond to those steps which the plaintiff has taken to advance the claim. Just by way of example, the defendants

 

 

refused to consent to certain proposed amendments being made to the statement of claim only to reverse their position and provide their consent the evening before a motion to amend the statement of claim was to be heard. In a similar vein, the defendants chose to change their solicitors (which they are, of course, entitled to do) but it took many months before the required notice of change of solicitors was delivered.

 

[27]     The defendants assert that there is no obligation on them to move the action forward and that it is only the conduct of the plaintiff that should be considered on this issue. They refer to cases such as Ciba‑Geigy Ltd v. Novopharm Ltd., [1997] F.C.J. No. 1836 (Fed. Ct.) and Bourganis v. Glarentzos et al. (1978), 19 O.R. (2d) 327 (H.C.J.) in support of their position in this regard. In my view, the approach evidenced by those cases is not consistent with the approach which this court now takes regarding the responsibility for the progress of an action to trial. Nowadays, it is considered the obligation of all parties to move matters forward expeditiously. A defendant cannot simply sit back and do nothing without shouldering some of the blame for the state of the action that results.

 

[28]     Further, the cases on delay to which I was referred by the defendants involved a much greater degree of delay, or inattention, than exists here. I note, by way of example, that in the case of Bourganis, Mr. Justice Southey observed, at pp. 327‑328:

 

"The injunction was granted more than a year ago. Since then the plaintiff has taken no steps whatsoever to bring the action to trial. As if that were not enough, the plaintiff, or his counsel, has declined to co‑operate with counsel for the defendants in his efforts to proceed with the matter."

 

[29]     There is no similar failure to co‑operate here. In any event, the delay involved in this case, when one takes into account the time taken up with the motion for leave to appeal, the unsuccessful settlement discussions, the amendments to the statement of claim and the steps taken as a consequence of those amendments, is a matter of a few months. That measure of delay is less, by a significant amount, than the magnitude of delay which warranted the dissolution of the injunctions in the cases relied upon by the defendants.

 


C.             Failure to do business

 

[30]     The issue regarding the alleged failure of the plaintiff to do business with the defendants can be dealt with briefly. One of the factors that I mentioned in my reasons for granting the original injunction is that the defendants would still be able to carry on business as an authorized supplier of the plaintiffs products. The defendants contend that, in fact, the plaintiff has refused to do business with them. However, the evidence on this issue merely establishes that Mr. Edmonds called one distributor of the plaintiffs products and was told that they would have to check with the plaintiff before determining whether they could sell to the defendants. The distributor did not further respond to Mr. Edmonds' inquiry and Mr. Edmonds did not follow up with that distributor. Mr. Edmonds did not contact any other distributors. This evidence falls well short of establishing that the plaintiff is refusing to deal with the defendants.

 

D.              Negative impact on the defendants' business

 

[31]     Lastly, the defendants assert that they are being seriously impaired in their business by the effects of the injunction. The plaintiff says that the defendants cannot rely on any evidence in support of this contention because the defendants have failed to produce documentation, in answer to undertakings given during the discovery process, in support of the alleged financial impact of the injunction. The defendants say that the information was provided. I do not have to resolve the dispute as to whether the documentation has, or has not, been produced. The evidence is sufficient to establish the basic proposition that there has been a detrimental effect on the defendants' business arising from the existence of the injunction. Indeed, such a detrimental effect might well have been presumed in these particular circumstances.

Summarv

[32]     The defendants' contend that the totality of these four grounds justify the dissolution of the injunction. They assert that the legal position under section 9(l)(c) has been weakened by the conflicting decisions. They further assert that the evidence of irreparable harm is weak. Finally they assert that all of these considerations alter the balance of convenience.

 

[33]     I will not repeat what I said in my earlier decision regarding the issue of irreparable harm. It is sufficient to say that I have not changed my view that the losses that are being occasioned to

the plaintiff from the activities of the defendants fall within the meaning of irreparable harm as that term is used for the purposes of interlocutory injunctive relief. There is no practical way for the plaintiff to prove the actual number of customers that it has lost arising from the sale by the defendants of these grey market and black market products. There is no practical way for the plaintiff to prove how long any particular customer, if they had not been lost to the defendants' activities, would have utilized the services of the plaintiff or to what extent such customers would have used those services.

 

[34]     In terms of the balance of convenience, as I have already indicated, I view the decision of the Court of Appeal in R. v. Branton, supra, as seriously undermining the claim that the defendants' conduct offends section 9(l)(c) and, for that reason, precludes a conclusion that there is currently a serious issue to be tried on that prong of the plaintiff s claim. Given that fact, given the uncertainty regarding the scope of the economic tort upon which the plaintiff relies as an alternative basis for its claim, and given the impact on the defendants' business which the injunction has had, and which impact will persist if the injunction is continued, I conclude that the balance of convenience at this point favours the defendants.

 

[35]     In the end result, I am satisfied that there are now sufficient reasons to dissolve the injunction insofar as it prohibits the defendants from engaging in the grey market activities. I would not dissolve the injunction prohibiting the black market activities. If there is any issue as to the wording of the necessary order so as to distinguish between the two, the parties can arrange an appointment to address that issue.

 

Motion for summary judgment

 

[36]     The plaintiff moves for partial summary judgment, that is, for a permanent injunction. In light of my conclusion regarding the interlocutory injunctive relief, there is no basis upon which a permanent injunction could possibly be granted. In any event, even if I had not reached the conclusion which I have regarding the interlocutory injunction, in my view, there is no basis on which I could have concluded that there was no genuine issue for trial regarding the meaning of section 9(l)(c) such as would have justified summary judgment. It is also clear that there are factual issues that will have to be explored at a trial regarding any claim for intentional interference with contractual relations or economic interests. A trial is clearly necessary.

 

[37]     I should mention on this point that at the end of a full day of hearing, counsel for the plaintiff stated that he had certain points he wished to make in reply to the defendants' submissions on the summary judgment motion. Counsel asked for a further attendance for that purpose. I said at the time I would consider whether I would permit any further attendance since I had made my serious reservations regarding the summary judgment motion clear to counsel during the hearing. As may be obvious from what I have said above regarding the summary judgment motion, I do not consider that any further submissions are necessary on that motion.

 

The defendants' website

 

[38]     I agreed to receive written submissions from the parties on this last issue. Shortly after this action was commenced, the defendants registered the domain name "expressvu.org" which they now use for a website devoted to the issues raised in this action as well as for the purpose of promoting the "Tedsat Legal Defense Fund". The plaintiff seeks summary judgment on its claim in the amended statement of claim that the use of the domain name by the defendants is an infringement of the plaintiffs trademark and for an order that the defendants must transfer that domain name to the plaintiff.

 

[39]     The word "ExpressVu" was registered as a trademark by a party related to the plaintiff on February 23, 1996 and was assigned to the plaintiff on February 28, 2000. The trademark was registered for use in association with communication services namely: radio and TV broadcasting, and broadcasting distribution, non‑programming information and interactive services using satellite signals, namely: all manner of voice, image, text and full motion video communication services and combinations thereof using satellite signals and other technologies.

 

[40]     I have already alluded to the nature of the defendants' website. They have posted information from this action on the website such as motions, affidavits, the statement of claim, my reasons in granting the original injunction, etc. There is a disclaimer on the front page of the website which states:

 

"The Tedsat Legal Defense Fund is not associated with Bell Canada Enterprises, nor with any of its affiliates: Bell Expressvu, BCE Media, Bell Canada, Bell Mobility, Bell Canada International to name a few."

 

[41]     The plaintiff complains that the defendants have inserted meta‑tags in their website for the purpose of ensuring that anyone who does a search on the word "espressvu" will be directed to their website. The plaintiff also complains that there is a chat room on the website regarding Bell ExpressVu which is "neither monitored nor edited". The plaintiff asserts that the domain name constitutes an infringement of its trademark. In particular, the plaintiff contends that the defendants use of the domain name offends both sections 20(l) and 22(l) of the Trade‑marks Act, R.S.C. 1985, c. T‑ 13 . Those sections are as follows:

 

"20. (1) The right of the owner of a registered trade‑mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade‑mark or trade‑name, but no registration of a trade‑mark prevents a person from making

 

(a) any bona fide use of his personal name as a trade‑name, or

 

(b) any bona fide use, other than as a trade‑mark,

 

(i) of the geographical name of his place of business, or

 

(ii) of any accurate description of the character or quality of his wares or services, in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade‑mark.

 

22. (1) No person shall use a trade‑mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto."

 

[42]     The plaintiff has not satisfied me that there is no genuine issue for trial as to whether the actions of the defendants in using the domain name and matching website are in fact infringing either of these sections. The situation here is materially different from those that confronted the High Court of Justice in Marks & Spencer plc v. One in a Million [1997] E.W.J. No. 1599 (Ch.D.) and the U.S. Court of Appeals Ninth Circuit in Panavision International L.P. v. Toeppen 46 U.S.P.Q.2d 1511, which are relied upon by the plaintiff. In both of those cases, the defendants had registered domain names using the trademark of another corporation for the purpose of extorting payment from those corporations to turn the domain names over to them. In Marks & Spencer, Deputy Judge Sumption Q.C. held that the "threat of passing off and trade


mark infringement and the likelihood of confusion" were beyond argument in that case and justified the awarding of final injunctions quia timet. In Panavision, the Court of Appeals affirmed a lower court's award of summary judgment in favour of the plaintiff on the basis that the defendant made commercial use of the plaintiff's trademark and that his conduct diluted those marks.

 

[43] The evidence here does not establish any commercial use of the plaintiff's trademark. The website does not promote wares or services in competition to those of the plaintiff. Rather, the website promotes criticism of the plaintiff as a commercial enterprise. In that regard, its function could be characterized as the exercise of free speech and, consequently, may well be said to be protected by virtue of section 2(b) of the Charter of Rights and Freedoms, although that issue was not raised before me. Further, there is a disclaimer on the first page of the website which makes it clear that the website has nothing to do with the plaintiff or any of its affiliated entities so the prospect of the plaintiff successfully establishing that there is a passing off here appears remote.

 

[44] Finally, this is also not a case where it appears that it can be successfully asserted that the plaintiffs trademark is being diluted or depreciated as a result of potential customers of the plaintiff becoming discouraged by not being able to find the plaintiffs website by typing in “expressvu.com", a consequence which appears to have been a central concern to the Court of Appeals in the Panavision case. Here, the defendants have registered their domain name with the suffix ".org". The plaintiff, in fact, already has the domain name "expressvu.com" for its website so such a concern should not arise.

 

[45] This case appears to be more analogous to the situation which recently confronted an administrative panel[5] under the Uniform Domain Name Dispute Resolution Policy in a case involving an ex‑employee of Bridgestone‑Firestone who had registered the domain name "bridgestone‑firestone. net" to promote a dispute he was having with his former employer. In upholding the employee's right to the domain name, the arbitrator said:

"In this case, the Respondent's principal purpose in using the domain name appears not to be for commercial gain, but rather to exercise his First Amendment


right to criticize the Complainants. The use of the domain name appears to be for the communicative purpose of identifying the companies, which are the subject of his complaints. He is not misleadingly diverting users to his website, as he has not utilized the ".com" domain and has posted adequate disclaimers as to the source of the website. It does not appear that his actions are intended to tarnish, or have tarnished, the Complainants' marks."

 

[46]     I would not so readily conclude in this case that the actions of the defendants are not intended to tarnish the plaintiffs mark. It is sufficient for the purposes of the motion before me to find that there is a genuine issue for trial as to that intention and the effect, if any, of the defendants' actions if they are so intended. The plaintiff s motion for summary judgment on the trademark issue is therefore dismissed.

 

Conclusion

 

[47]     The defendants' motion to dissolve the injunction is allowed insofar as it relates to the grey market activities but is dismissed insofar as it relates to the black market activities. The plaintiffs motion for summary judgment is dismissed both in respect of the claim for a permanent injunction and in respect of the claim regarding the website.

 

[48]     The parties may make written submissions to me on the appropriate disposition of the costs of the motions. I am also prepared to fix the costs of the motion upon receipt of proper submissions in that regard. The defendants shall file their submissions within 10 days of the release of these reasons and the plaintiff shall file its submissions within 10 days thereafter. No reply submissions are to be filed without leave. As always, I would appreciate it if counsel would keep their submissions brief.

 

 

 

“original signed by Nordheimer J.”

 

Released:           April 25, 2001

 

 



[1] [2000] S.C.A. No. 554.

[2] After the release of this decision, both parties delivered written submissions regarding the effect of this decision on the issues that are before me.

 

[3] See RJR‑Macdonald lnc. v. Canada (Attorney General), (1994) 1 S.C.R. 311 at para. 49.

 

[4] See the discussion in Sharpe, Injunctions and Specific Performance, looseleaf edition at para. 3.190 et seq.

[5] WIPO Abritration and Mediation Center, Case No. D2000‑0190, July 6, 2000