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IP Canada: Did you say jail time for trademark infringement?

Source: ipblog.ca - Richard Stobbe

Trademark priosonImprisonment in intellectual property infringement cases is rare – although not unheard of. The message from a recent Canadian Federal Court decision is… don’t mess with the Court. They expect compliance with their orders and a contempt order can lead to a “warrant of committal”, resulting in imprisonment.

In 2013, a Federal Court ruled that Hightimes Smokeshop and its officer and director, Ameen Muhammad had infringed the “HIGH TIMES” trademark owned by Trans-High Corporation (See: Trans-High Corporation v Hightimes Smokeshop and Gifts Inc., 2013 FC 1190 (CanLII)). In spite of this judgment, the judgement was ignored, and trademark infringement continued on the shop signage, sales receipts and printed materials of Hightimes Smokeshop.

Then in June 2015, Hightimes Smokeshop and Mr. Muhammad each pleaded guilty to five counts of contempt which resulted in the issuance of a Contempt Order, and an award of $62,500 in costs, payable by Hightimes Smokeshop and Mr. Muhammad, jointly and severally. However, that Contempt Order was also ignored and no money was paid to Trans-High Corporation.

In Trans-High Corporation v. Hightimes Smokeshop and Gifts Inc., 2015 FC 1104 (CanLII), Trans-High Corporation brought another motion to compel compliance with the Contempt Order, citing a ruling by the Supreme Court of Canada, that a person who is ordered by a court to pay money may be imprisoned for contempt if he or she shows “a certain degree of intention to evade his or her obligations”; or, put another way “he or she is unwilling to pay the debt despite having the ability to pay” (see paragraph 11).

The Court issued a warrant for the arrest and imprisonment of Mr. Muhammad, arising from contempt in a trademark infringement case.

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