New Era Cap Company v. Capish? Hip Hop Inc.

New Era Cap Company v. Capish? Hip Hop Inc. Court (s) Database Federal Court of Appeal Decisions Date 2006-02-14 Neutral citation 2006 FCA 66 File numbers A-323-05 Decision Content Date: 20060214 Docket: A-323-05 Citation: 2006 FCA 66 CORAM: ROTHSTEIN J.A. SHARLOW J.A. MALONE J.A. BETWEEN: NEW ERA CAP COMPANY, INC. and NEW ERA CAP COMPANY Appellants and CAPISH? HIP HOP INC. and CAPISH? SILVER INC. and CAPISH? BLING BLING INC. and NASSER DAHOUI FORMERLY IDENTIFIED AS JOHN DOE IN ACTION NO. T-346-05 Respondents Heard at Toronto, Ontario, on February 7, 2006. Judgment delivered at Ottawa, Ontario, on February 14, 2006. REASONS FOR JUDGMENT BY: SHARLOW J.A. CONCURRED IN BY: ROTHSTEIN J.A. MALONE J.A. Date: 20060214 Docket: A-323-05 Citation: 2006 FCA 66 CORAM: ROTHSTEIN J.A. SHARLOW J.A. MALONE J.A. BETWEEN: NEW ERA CAP COMPANY, INC. and NEW ERA CAP COMPANY Appellants and CAPISH? HIP HOP INC. and CAPISH? SILVER INC. and CAPISH? BLING BLING INC. and NASSER DAHOUI FORMERLY IDENTIFIED AS JOHN DOE IN ACTION NO. T-346-05 Respondents REASONS FOR JUDGMENT SHARLOW J.A. [1] This is an appeal by New Era Cap Company, Inc. and New Era Cap Company (collectively, "New Era") from a Federal Court judgment (2005 FC 918) dismissing its motion for an order declaring the respondents Capish? Hip Hop Inc., and Nasser Dahoui (collectively, "Capish") to be in contempt of an Anton Piller order dated March 3, 2005. [2] New Era is a seller of products, including baseball caps, bearing its trademark. New Era formed the view that Capish was selling counterfeit New Era merchandise, and made an ex parte motion to add Capish as a respondent to an existing Anton Piller order. That motion was granted on March 3, 2005. [3] Broadly speaking, the Anton Piller order has two aspects. One, the injunction against selling or dealing in counterfeit New Era merchandise, is not relevant to this case. This case relates to the other aspect of the Anton Piller order, which requires anyone served with the order to cooperate in certain respects in the gathering and preservation of specified evidence. It is argued for New Era that the judge misled himself by confusing the two aspects of the Anton Piller order. I see no such error. In my view, the judge knew what was before him. [4] The show cause order required Capish to appear to respond to allegations of breaches of the following portions of the Anton Piller order: 4. Each Defendant ... shall permit the persons who are authorized to enforce this Order ... to enter and search the Defendant's premises ... for the purpose of searching for, and removing all unauthorized or counterfeit New Era Merchandise, related equipment and record. 5. Each Defendant ... shall open and make available to the persons enforcing this Order any vehicle, container, or storage area within their possession, custody or control and open any locked doors of the premises behind which the persons enforcing this Order have reasonable grounds to believe there may be any unauthorized or counterfeit New Era merchandise, related equipment or records. 6. Each Defendant ... shall immediately deliver up to the persons enforcing this Order all unauthorized or counterfeit New Era merchandise, related equipment or records within their possession, custody or control. 7. The Defendant ... shall not take any steps to destroy or conceal any unauthorized or counterfeit New Era merchandise, related equipment or records. 8. Each Defendant ... shall disclose to the persons enforcing this Order: i) the whereabouts of all unauthorized or counterfeit New Era merchandise, related equipment or records of which they have knowledge, whether on the Defendant's premises or elsewhere; ii) [...] iii) the name and address of all suppliers who have supplied them with unauthorized or counterfeit New Era merchandise [...]. [5] The Anton Piller order defines the phrase "unauthorized or counterfeit New Era merchandise" to mean "goods or things bearing, without [New Era's] authorization, any of [New Era's] copyrights or trademarks shown on Schedule "B" hereto or bearing any mark or logo confusing therewith." [6] A show cause order was made on April 25, 2005. It required Capish to answer allegations that they had failed or refused to comply with the Anton Piller order. The particulars are set out in paragraph 1 of the show cause order and read in relevant part as follows: (i) refusing to deliver up ... all unauthorized or counterfeit New Era merchandise (as that term is defined in the Anton Piller Order) ... in contravention of paragraph 6 of the Anton Piller Order; (ii) refusing to permit [New Era's] representatives to conduct a search in accordance with the .. Anton Piller Order ... in contravention of paragraphs 4 and 5 of the Anton Piller Order; (iii) refusing to permit [New Era's] representatives to conduct the seizure in accordance with ... the Anton Piller Order ... in contravention of paragraph 4 of the Anton Piller Order; (iv) refusing or failing to disclose the name and address of the ... suppliers of the unauthorized or counterfeit New Era merchandise ... in contravention of paragraph 8(iii) of the Anton Piller Order; and (v) refusing or failing to disclose the whereabouts of all unauthorized or counterfeit New Era merchandise ... in contravention of paragraph 8(i) of the Anton Piller Order; and, (vi) removing the unauthorized or counterfeit New Era merchandise from display ... in contravention of paragraph 7 of the Anton Piller Order. [7] The contempt proceedings were heard on June 13 and 15, 2005. [8] The facts are as follows. On April 13, 2005, a New Era representative found what he believed to be three counterfeit New Era baseball caps being offered for sale in a particular store owned or operated by Capish. He did not purchase any of those caps. He spoke to the clerk on duty, who suggested that he speak to Mr. Dahoui, the owner of the store. Mr. Dahoui was telephoned and came to the store within a few minutes. There is conflicting evidence as to whether Mr. Dahoui was shown the caps that the New Era representative believed to be counterfeit. The New Era representative did not explain to Mr. Dahoui how to distinguish genuine New Era merchandise from counterfeit New Era merchandise. Mr. Dahoui and the New Era representative went to a nearby restaurant for a discussion. While the New Era representative and Mr. Dahoui were at the restaurant, Mr. Dahoui took two or more calls on his cell phone, speaking in a language that the New Era representative did not understand. No New Era representative remained at the store. When Mr. Dahoui and the New Era representative returned to the store, there were no counterfeit caps. When Mr. Dahoui was asked where they were, he answered, "What caps?" Eventually, after some discussion, the New Era representative concluded that there would be no point in pursuing the matter at that time with Mr. Dahoui, and so he left without asking to search the store or any other premises. [9] It is common ground that there can be no breach of paragraphs 4 and 5 of the Anton Piller order unless the person seeking to enforce the order makes a request to conduct a search or have access to the places referred to in those provisions. Counsel for New Era admitted, quite properly, that the record discloses no evidence of such a request. It follows that the contempt allegations relating to those two provisions must fail. [10] The remaining contempt allegations relate to paragraphs 6, 7 and 8 of the Anton Piller order. They require a consideration of the definition of "unauthorized or counterfeit New Era merchandise". The judge interpreted that definition to refer only to merchandise that in fact is unauthorized or counterfeit. [11] Counsel for New Era submitted that, given the context in which an Anton Piller order is made, the definition in the Anton Piller order should be interpreted to include merchandise that is merely alleged to be unauthorized or counterfeit New Era merchandise, or merchandise that a person executing the Anton Piller order believes on reasonable grounds to be unauthorized or counterfeit New Era merchandise. I cannot accept that submission. In my view, in the context of contempt proceedings that are based on an alleged failure or refusal to comply with a court order, the words of the order must be read strictly. That is how the judge interpreted the Anton Piller order, and in my view his interpretation was correct. The contempt allegations in this case must be understood in the light of that narrow interpretation. [12] The judge reasoned that, as a matter of law, Capish cannot be found to be in contempt of the provisions of the Anton Piller order requiring them to deliver up infringing merchandise from the store, in the absence of proof beyond a reasonable doubt that at the relevant time there was merchandise in the store that met the definition of "unauthorized or counterfeit New Era merchandise", and that Capish knew that there was such merchandise in the store. It seems to me that both of those proposition are compelled by the definition of "unauthorized or infringing New Era merchandise" referred to above. [13] The judge's findings of fact are not always expressed as clearly as they might be, and he makes certain statements that I would not endorse. However, it is sufficiently clear that he was not satisfied beyond a reasonable doubt that the stated tests had been met. The record discloses no reason to interfere with those factual conclusions, which are fatal to the contempt allegations relating to paragraphs 6, 7 and 8 of the Anton Piller order. [14] It is argued for New Era that if Mr. Dahoui is not found to be in contempt of court on these facts, Anton Piller orders will have lost their efficacy. It may be that the definition in the Anton Piller order has made enforcement difficult. On the other hand, it may be that the attempted enforcement of the Anton Piller order failed because New Era's representative misread Mr. Dahoui's position. Mr. Dahoui asserted from the outset, and continues to assert, that there was no counterfeit New Era merchandise in his store. Perhaps if the New Era representative had understood Mr. Dahoui better on April 13, 2005, he would have taken some of the other steps that were open to him under the terms of the Anton Piller order. In my view, neither of those considerations would justify adopting an interpretation of the Anton Piller order that is broader that its words can reasonably bear. [15] This appeal will be dismissed with costs. "K. Sharlow" J.A. "I agree Marshall Rothstein J.A.". "I agree B. Malone J.A.". FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-323-05 STYLE OF CAUSE: NEW ERACAP COMPANY, INC. and NEW ERA CAP COMPANY Appellants and CAPISH? HIP HOP INC. and CAPISH? SILVER INC. and CAPISH? BLING BLING INC. and NASSER DAHOUI FORMERLY IDENTIFIED AS JOHN DOE IN ACTION NO. T-346-05 Respondents PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: February 7, 2006 REASONS FOR JUDGMENT: Sharlow J.A. CONCURRED IN BY: Rothstein J.A. Malone J.A. DATED: February 14, 2006 APPEARANCES: Thomas Slahta FOR THE APPELLANTS Hyder Masum FOR THE RESPONDENT SOLICITORS OF RECORD: Kestenberg Siegal Lipkus Toronto, Ontario FOR THE APPELLANTS Mangal & Masum Mississauga, Ontario FOR THE RESPONDENTS