British Columbia Supreme Court grants largest-ever damage award in a Canadian trademark infringement case

Glen Korstrom

Several recent judgments in intellectual property cases demonstrate that Canadian judges have stopped treating fake goods sellers and trademark infringers with kid gloves.

In June, B.C. Supreme Court justice Mary Ellen Boyd awarded French fashion house Louis Vuitton Malletier S.A. and its Louis Vuitton Canada Inc. subsidiary the largest-ever damage award in a Canadian counterfeiting case.

Boyd deemed that several defendants in the case combine to pay Louis Vuitton $980,000.

Smart & Biggar Fetherstonhaugh partner Michael Manson, who represented the high-end handbag manufacturer in court, said the total damage award will undoubtedly exceed $1 million by the time all legal fees are calculated and all damages are assessed against all the defendants that were deemed liable.

•In January, Smart and Bigger Fetherstonhaugh’s Vancouver office achieved a $267,000 damage award for Louis Vuitton against Lower Mainland defendants doing business as K2 Fashions; and

•Last year, Osler Hoskin and Harcourt LLP achieved a $700,000 judgment for Seattle’s Microsoft Corp. after pirate software seller Carmelo Merrelli was found liable for trafficking counterfeit copies of the technology giant’s intellectual property.

“As a trilogy of decisions, this sends a very strong message to counterfeiters,” Manson said.

“For the first time, whether it’s federal court or provincial courts, judges are taking notice that this is a crime.”

He believes that Boyd levied the mammoth damage award in part because the defendants in the case did not respect the judicial process.

“If these people are going to thumb their noses at the court process and continually do an activity which is criminal in nature, as well as civil, there will be significant sanctions,” Manson said.

“That’s something that all brand owners are pleased to see.”

Manson’s accusation that the defendants – Wynnie Lee, her sister Jacqueline Lee and Wynnie Lee’s daughter Francisca Hung-Yee Ngan – flouted the legal system stems from the fact that they kept selling counterfeit goods after they signed a settlement agreement agreeing to stop.

Those defendants were all involved in operating various stores across the Lower Mainland as early as 2004. Some of those stores included Wynnie Lee-branded stores at Burnaby’s Metropolis at Metrotown, Richmond’s Lansdowne Place and Surrey’s Surrey Place Centre.

In 2004, Louis Vuitton was able to get the federal court to issue what is known in the legal circles as an anton pillar order. That order essentially gave the fashion house the right to seize hundreds of articles bearing its trademarks.

Then, in 2006, a second Louis Vuitton investigation revealed that the defendants were still selling counterfeit goods bearing Louis Vuitton trademarks.

Business in Vancouver was unable to reach the defendants, all of whom represented themselves in court without getting legal counsel.

“Only Jacqueline Lee showed up in court the first day. The rest didn’t bother to show up even though they’d been served and were under court order to show up,” Manson said.

“Jacqueline only showed up for the morning. At lunch, she decided she wasn’t coming back and she left. When I got back after lunch, the judge said, ‘Mr. Manson, do you know where Ms. Lee is?’ I said I didn’t. ‘Let the record show that she never came back.’”

Veteran intellectual property lawyer and Fasken Martineau LLP partner David Wotherspoon agreed that the defendants never took court orders seriously and that this was a major reason why they were found liable for such a high damage award.

Still, he believes the challenge is not over for Louis Vuitton.

“To get the judgment is one thing. It’s a great thing. But, then, can you ever get any money from the defendants?” •

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From Business in Vancouver September 2-8, 2008; issue 984

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