Foreign judgments in trademark cases are enforceable in Canada. The recent decision of Justice Perell in Dead End Survival, LLC v. Marhasin provides a succinct roadmap for doing so. The Court had no trouble enforcing a judgment from the US District Court which included both monetary and non-monetary relief: Dead End Survival’s judgment was for an injunction and $2.0 million in statutory damages for trademark infringement. The Ontario Court confirmed that US law regarding trademark infringement is not contrary to the Canadian concept of justice or basic morality.
The Test for Enforcing a Foreign Judgment:
A Canadian court will enforce a foreign judgment where the foreign court had jurisdiction over the dispute – either because the defendant submitted to the jurisdiction or because there was a real and substantial connection to the foreign jurisdiction. Assessing whether a real and substantial connection exists is guided by order and fairness, and considers the connections between the action, its subject matter, the alleged wrongdoing, and the location of the damages.
There are two possible defences against the enforcement of a final foreign judgment:
- The defendant may allege that there is evidence of fraud. The factual allegations must be material, and cannot have been adjudicated by a foreign court. Where a defendant offered no defence, he is prohibited from claiming that the evidence adduced or steps taken during the foreign proceedings were evidence of fraud just discovered.
- The defendant may also allege that there is a violation of natural justice or of public policy. This defence cannot be invoked for the sole reason of the damages awarded exceeding what would have been granted under Canadian law.
Dead End Survival LLC is a Michigan corporation that manufactures survival gears and sells its products through online retailers under the trade name SharpSurvival. It alleged that Marhasin, carrying on a business in Ontario, was selling counterfeit products. The counterfeit products were manufactured in China and sold online to customers, including those located in Georgia. The Georgia District Court assumed jurisdiction. It issued temporary restraining orders and later a permanent injunction enjoining Marhasin from infringing the SharpSurvival trademark, and ordered that he pay $2 million in statutory damages. In the Georgia proceedings, Marhasin did not take any action to defend, nor did he pay the judgment. Therefore, Dead End Survival commenced an application in Ontario to enforce the Georgia District Court’s judgement.
Justice Perell found that there was a real and substantial connection between the dispute and the Georgia District Court. Since Marhasin offered no defence, despite receiving multiple notices of the proceedings in Georgia, he was prohibited from alleging evidence of fraud. His public policy defence also failed, because US trademark law is not contrary to the Canadian concept of justice or basic morality. The alleged excessiveness of the statutory damages award did not prevent enforcement – the public policy defence is not triggered simply because the claim would not give rise to comparable damages in Canada.
In the result, Dead End Survival is an excellent reminder that foreign trademark judgments can and will be enforced in Canada.