Recovery of Profit Claim Fails for Failing to Prove Profits Sought Related to Alleged Infringement

On August 21, 2019, the Québec Superior Court (Court) released its judgment, in Constellation Brands US Operations c Société de vin internationale ltée, 2019 QCCS 3610, finding that Constellation Brands US Operations (Constellation) failed to prove its claim for damages against Société de vin international ltée (SVI).

In October 2016, Constellation claimed that SVI’s use of certain leaflets in 2015 and 2016 infringed Constellation’s copyright and trademark rights. The leaflets, which depicted images of Constellation’s wine bottles, were distributed during wine sampling to advertise the comparability of two SVI wine varieties with Constellation’s wines.  In 2017, certain aspects of the case were resolved when SVI agreed to a partial judgment. However, Constellation’s claim for recovery of SVI’s profits remained in dispute. 

Constellation’s position was that it was “entitled to recover all the profits made by SVI on the sales of [all] its ‘Apollo Découvertes’ wines.” The Court found that Constellation’s claim overlooked two key points. First, the intellectual property holder is only entitled to recover profits made as a result of an infringement of its intellectual property rights. The alleged infringement involved only part of the Apollo Découvertes’ wines line, therefore Constellation’s claim for profits on the entire line was overly broad. Second, the plaintiff is required to prove that the increase in the defendant’s revenues resulted from the infringement of the plaintiff’s intellectual property rights. According to the Court, “Constellation’s mistaken belief that it did not have to prove that the profits sought related to revenues resulting from SVI’s use of the leaflets, was fatal to its claim. . . . [O]ne cannot simply assume that the use of the leaflets led to an increase in SVI’s revenues.” Accordingly, the Court dismissed Constellation’s claim for recovery of profits.

Summary By: Juliette Sakran