The ability of a trademark owner to enforce its trademark rights on the Internet frequently depends on establishing jurisdiction. The rights associated with a registered trademark are territorial, and a Canadian court does not have jurisdiction concerning infringement outside Canada. There are three ways jurisdiction may be established against an out-of-province defendant: (1) presence jurisdiction (located or carrying on business in a province); (2) consent-based jurisdiction; and (3) assumed jurisdiction.
To determine when jurisdiction should be assumed, Canadian courts apply the “real and substantial connection” test as adopted and developed by the Supreme Court of Canada. The test was designed to prevent overreaching concerning extraterritorial and transnational transactions. The “real and substantial connection” allows the court to assume jurisdiction.
The Supreme Court of Canada has identified the following presumptive connecting factors as grounding a court’s assumption of jurisdiction:
The defendant is domiciled or resident in the province;
The defendant carries on business in the province;
The tort was committed in the province; or
A contract connected with the dispute was made in the province.
The plaintiff must demonstrate the existence of at least one of the four rebuttable presumptive connecting factors before a court in Canada will assume jurisdiction over an action involving a foreign defendant. The factors have been applied differently depending on the underlying cause of action. The Supreme Court of Canada has yet to consider the application of this approach in a trademark case involving the Internet.
In a copyright case, the Supreme Court of Canada said that the relevant connecting factors in cases involving jurisdiction and the Internet should be decided on a case-by-case basis considering many factors including “the situs of the content provider, the host server, the intermediaries and the end-user.”
Jurisdiction concerning Internet-based defamation has been determined to be the place where the defamatory statements are read, accessed, or downloaded by third parties.
In the U.K., the courts to assume jurisdiction require that the defendant must have manifested an intention to establish commercial relations with consumers in the U.K. The court determines from a review of the defendant’s website and the defendant’s overall activity whether it intended to do business with such consumers.
It remains to be seen how these issues will be resolved by a Canadian court in cases involving infringement on the Internet by a defendant not located or carrying on business in a province, and jurisdiction must be assumed.
If you have questions, please contact me at mckeown@gsnh.com.
Goldman Sloan Nash & Haber LLP 480 University Avenue, Suite 1600 Toronto, Ontario M5G 1V2 Direct Line: (416) 597-3371 Fax: (416) 597-3370 Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.