Federal Court Refuses to Set Aside Default Judgment for Copyright and Trademark Infringement

On July 25, 2017, the Federal Court of Canada issued its decision in Benchmuel v Gags N Giggles (2017 FC 734), refusing to set aside a default judgment for copyright and trade-mark infringement against the defendants.

The plaintiff, owner of “Canada Athletics Souvenir Design” and “Niagara Falls Flash Design”, sought damages claiming that the defendants infringed both the copyright and trademarks in his two designs.

The defendants were served with the statement of claim, but they did not file a statement of defence. The plaintiff then sought default judgment against the defendants, which was granted. The defendants brought a motion seeking to set aside the default judgment.

In determining whether or not to set aside a default judgment, the FC considered the following three-part test:

1. Does the defendant have a reasonable explanation for its failure to file a statement of defence;
2. Does the defendant have a prima facie defence on the merits to the plaintiff’s claim; and,
3. Has the defendant brought its motion within a reasonable time?

The FC refused to set aside the default judgment, finding that the defendants’ explanation for its failure to file a statement of defence was unreasonable. The defendants asserted that they were under the impression that a settlement had been reached and thus were not required to file a statement of defence. However, their assertion was not supported by sufficient evidence. Since the three elements of the test for setting aside a default judgment are conjunctive, the FC dismissed the defendants’ motion without assessing the remaining two elements: the defence on the merits and whether the defendants moved within a reasonable time to bring their motion.

Summary By: Jae Morris