The issue of landlord liability in tenant counterfeit is novel to Canadian Courts, although the US and China have found liability in similar situations.  Recently, a Canadian Court has opened a door to such claims.

In Louis Vuitton Malletier S.A. v Zekria Wakilzada, 2017 ONSC 2409, the Ontario Superior Court of Justice allowed Louis Vuitton to continue their action against a Toronto-area flea market in a novel claim alleging that the landlord was liable in negligence, contributory IP infringement and vicarious liability, because of the sale of counterfeit Louis Vuitton merchandise by flea market vendors.

Louis Vuitton’s Statement of Claim alleges that the landlords had direct and ongoing knowledge that counterfeit merchandise was for sale at the market and yet continued to let vendors operate.  To support this allegation, Louis Vuitton referenced police search warrants executed at the market between 2008 and 2015, resulting in the seizure of counterfeit goods.

Previously, portions of Louis Vuitton’s claim referencing the raids were struck pursuant to a Master’s Order in the Ontario Superior Court of Justice.  The Master held that claims of general counterfeit knowledge (not specific to Louis Vuitton) were irrelevant and therefore scandalous, and that including information about the raids would unduly expand the scope and prejudice the fair trial of the action.

On April 19, 2017, the Superior Court of Justice set aside the Master’s Order.  The Court found that the facts pleaded in the struck paragraphs were material to the claims, that the Master lacked jurisdiction to decide whether the paragraphs were necessary, and that the Master failed to apply correct legal test.

Summary By: Jennifer Davidson

 

E-TIPS® ISSUE

17 05 03

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