Canada's Federal Court Of Appeal Confirms The Court's Jurisdiction To Order Transfer Of Domain Names

Canada's Federal Court of Appeal has confirmed that the Court has jurisdiction to order transfer (or delivery up) of a domain name involved in trademark infringement. The Federal Court of Appeal's decision provides comfort to trademark owners who prefer to bring a lawsuit, rather than a complaint under the Canadian Internet Registration Authority's Domain Name Dispute Resolution Policy (CDRP). A lawsuit may be preferred over a CDRP due to the availability of broader remedies. For example, a trademark owner cannot obtain an injunction and damages through the CDRP. This decision is important as it came on the heels of a recent Federal Court decision that found that, while the Court can enjoin a domain name from being used in violation of a trademark owner's rights, the Court does not have jurisdiction to order transfer of domain names.

In David Michaels and Michaels Inc. v. Michaels Stores 2016 FCA 88, David Michaels appealed a default judgment ordering that the domain name michaels.ca be transferred to Michaels Stores. The Federal Court found that David Michaels had infringed the MICHAELS trademark owned by Michaels Stores based on "considerable evidence before the Court that established actual confusion on the part of customers of Michaels Stores." On appeal, David Michaels argued that the Federal Court order was without jurisdiction or overly-broad. The Federal Court of Appeal found that the Federal Court has jurisdiction to order delivery up of domain names (i.e. transfer) in view of the Trade-marks Act, which permits "any order (a Court) considers appropriate in the circumstances" and the Federal Courts Act, which gives the Court jurisdiction to order any appropriate remedy known to the common law or equity. The Court of Appeal noted that the domain name was the "mechanism" by which the respondent's mark was infringed, and was the...