Summary Judgment in Trade-mark Infringement Action Granted due to Settlement Agreement

Bauer Nike Hockey Inc. ("Bauer") commenced an action in the Federal Court of Canada against Tour Hockey and Roller Derby Skate Corp. ("Tour and Roller"), alleging an infringement of one of Bauer's trade-marks. In August 2002, Tour and Roller sent a "without prejudice" letter to Bauer stating that they were willing to admit to infringement and pay damages of CDN $2500, with each party bearing its own costs. By letter in September 2002, Bauer accepted the settlement offer. Bauer then forwarded Tour and Roller a draft consent order. Tour and Roller responded three months later, objecting to Bauer's draft documents and attaching an amended consent order. In a follow-up letter, Tour and Roller indicated that they would only agree to the terms of the amended consent order. Bauer responded by bringing a motion for summary judgment. Tour and Roller unsuccessfully argued that the settlement correspondence was subject to privilege, and that the correspondence did not create an enforceable contract, but only an agreement to agree. Further, Tour and Roller argued that while they had consented to judgment, they had not agreed to a judgment incorporating terms from the Statement of Claim. The Court held that where a dispute arises as to the existence of a settlement, the documents can be entered as evidence in order to resolve the conflict. Therefore, the August and September, 2002 letters were admissible. On a review of the whole correspondence, the Court concluded that the parties intended to settle the action and to accept the terms from the Statement of Claim. The result of this case is that when a defendant settles a trade-mark infringement action, it should explicitly indicate whether it is willing to incorporate specific provisions of Statement of Claim into the settlement documents. For the decision, visit: http://decisions.fct-cf.gc.ca/fct/2003/2003fct451.html Summary by: Hung Nguyen