Quebec Court Refuses to Reject Action based on Unauthorized Use of HALLOUMI with Cheese

In Ministry of Energy and Tourism of the Republic of Cyprus v 3878422 Canada Inc. (2017 QCCS 3803), the Superior Court of Quebec (the Court) refused to dismiss an action based on the unauthorized use of HALLOUMI and HALOMI with cheese. The Ministry of Energy and Tourism of the Republic of Cyprus (the Plaintiff) alleged that 3878422 Canada Inc (the Defendants) violated a 2004 agreement not to use HALOMI or any mark resembling HALOMI or HALLOUMI in association with cheese, and sought declarative and injunctive relief relating to the use of these terms, in addition to damages.

The Defendant moved to dismiss the action on the grounds that the Federal Court, in unrelated proceedings, had affirmed that “HALOUMI” was not registrable as a certification mark, as the term is used generically to describe a type of cheese by numerous third parties in Canada (Cyprus (Commerce and Industry) v Producteurs laitiers du Canada, 2010 FC 719, aff’d 2011 FCA 201).

Nevertheless, the Court refused to dismiss the action on the grounds that it had insufficient information to assess the effect of the previous decision of the Federal Court on the current case. In particular, the earlier decision dealt with the registrability of a certification mark for HALOUMI, not the two regular trademark registrations for HALOMI and HALLOUMI asserted in the Quebec action. Further, even if the effect of the Federal Court’s decision was the invalidation of these trademarks, the Court found that since the Plaintiff’s action was based on an alleged breach of a contractual obligation, the effects of an invalidation of the trademarks on these private contractual obligations would require additional evidence.

The Court also rejected one of the Defendant’s arguments that it could not be liable under the 2004 agreement, because it was not a party to the agreement. In the Court’s opinion, the record suggested that the Defendant was controlled by a party to the agreement and had assisted a party to the agreement in its breach of contractual obligations, and therefore the Plaintiff had alleged valid causes of action.

Summary By: David Bowden