Judgments

[1996] 3 F.C. 493

T-2523-95

Fila Canada Inc. (Plaintiff)

v.

Jane Doe and John Doe and Other Persons, Names Unknown, Who Offer for Sale, Sell, Import, Manufacture, Distribute, Advertise, or Deal in Unauthorized or Counterfeit Fila Merchandise, and those Persons Listed In Schedule “A” to the Statement of Claim (Defendants)

Indexed as: Fila Canada Inc. v. Doe (T.D.)

Trial Division, Reed J.—Toronto, December 4, 19, 1995 and March 19, 1996; Ottawa, May 29, 1996.

Practice — Discovery — Anton Piller orders — Ex parte application for rolling Anton Piller order against unknown defendants allegedly infringing plaintiff’s intellectual property rights — Order granted on terms — Material in support to be filed two clear days before hearing — No reason for in camera hearing where identity of defendants unknown — Rights asserted, applicant’s rights thereto must be clearly identified — Solicitor must be present at execution of order — Directions for motions for review of execution of Anton Piller order — Development of model orders recommended.

Constitutional law — Charter of Rights — Criminal process — Application for Anton Piller order against unknown defendants allegedly infringing plaintiff’s intellectual property rights — Charter, s. 8 guaranteeing right to freedom from unreasonable search, seizure — Arguably applies to civil search and seizure authorized under Anton Piller order — Unreasonable search and seizure if conducted pursuant to invalid order, order too broadly drafted or order unreasonably executed — Practice directions for granting, executing Anton Piller orders.

This was an ex parte, in camera application for a rolling Anton Piller order. The unknown defendants were allegedly infringing the plaintiff’s intellectual property rights in different places, at different times and in different circumstances.

Held, the order should be granted on terms and subject to variation or termination at any time on the Court’s motion.

It is arguable that Charter, section 8 (which guarantees the right to freedom from unreasonable search and seizure), applies to civil search and seizure authorized under an Anton Piller order. A search and seizure is unreasonable if it has been conducted pursuant to an invalid order, or an order which was too broadly drafted, or an order which has been unreasonably executed.

The practice in seeking and executing Anton Piller orders should be as set out below. The material in support of an application for an Anton Piller order should be filed at least two clear days before the hearing. There is no reason to hold an in camera hearing where the identity of the defendants is not known even at the time of the hearing. The Court must be convinced that the applicant has a very strong prima facie case before granting an Anton Piller order. The copyright or trade mark rights which are asserted must be clearly identified e.g. by production of the relevant registration documents or by photocopies of the relevant designs. The applicant’s asserted rights to the intellectual property must also be clearly demonstrated. Since the application is ex parte, counsel for the applicant owes a duty to the Court to explicitly call to the Court’s attention any weakness in those rights, of which he or she may be aware. A judge must be convinced that the applicant’s apprehension that the counterfeit goods will not be available as evidence for trial if they are not seized is well-founded. A solicitor should be present at the execution of the order to ensure that its boundaries are not exceeded, and to be in a position to give the Court an accurate and complete description of what occurred. The practice in the United Kingdom of having licensed Anton Piller officers, independent of the plaintiff, attend and supervise the execution of these orders may be worth adopting.

The Anton Piller order can be set aside at any time for improper execution or other defect. The motion for review of an execution should include a request that the unnamed defendants against whom the order has most recently been executed be added to the statement of claim as named defendants. The motion with respect to newly identified defendants will normally contain a request for an interlocutory injunction against them and for an order for the continued detention of the seized goods and equipment pending trial. It is not appropriate to seek release of the property to the plaintiff before a default judgment is obtained. When the order is executed against a named defendant against whom an interlocutory injunction already exists, the motion should be for a show cause order alleging contempt of court. The motion for review must be supported by a full report from the supervising solicitor, including occasions on which the identity of the defendant was not ascertained, and a description of all goods, equipment and records seized, when and from whom they were seized. Often photographs will be the most effective and efficient way of providing such information.

Fundamental questions as to the practice in Anton Piller matters remain unanswered. Guidance from the Court of Appeal would be useful but, by their nature, such orders rarely are appealed. Development of a model order would assist plaintiffs and the Court.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 8.

Federal Court Rules, C.R.C., c. 663, RR. 469(2), 470(2).

CASES JUDICIALLY CONSIDERED

REFERRED TO:

Société pour l’Avancement des droits en audiovisuel (SADA) Ltée v. Collège Édouard-Montpetit, [1981] 2 F.C. 307 (1980), 58 C.P.R. (2d) 119; 39 N.R. 508 (C.A.); Anton Piller KG v. Manufacturing Processes Ltd., [1976] Ch. 55 (C.A.); Hunter et al. v. Southam Inc., [1984] 2 S.C.R. 145; (1984), 55 A.R. 291; 11 D.L.R. (4th) 641; [1984] 6 W.W.R. 577; 33 Alta. L.R. (2d) 193; 27 B.L.R. 297; 14 C.C.C. (3d) 97; 2 C.P.R. (3d) 1; 41 C.R. (3d) 97; 9 C.R.R. 355; 84 DTC 6467; 55 N.R. 241; Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189 (1982), 69 C.P.R. (2d) 122 (C.A.).

AUTHORS CITED

Rock, Allan M. “The ‘Anton Piller’ Order: An Examination of its Nature, Development and Present Position in Canada” (1984-85), 5 Advocates’ Q. 191.

Takach, George. “Exploring the Outer Limits: The Anton Piller Order in Canada” (1985), 23 Alta. L. Rev. 310.

APPLICATION for a rolling Anton Piller order. Order granted on terms and subject to termination or variation at any time on the Court’s motion.

COUNSEL:

Lorne M. Lipkus for plaintiff.

No one appearing for defendant.

SOLICITORS:

Kestenberg Siegal Lipkus, Toronto, for plaintiff.

The following are the reasons for order rendered in English by

Reed J.: A decision on this motion has been outstanding for a long time. An explanation is required.

Last December 4, the plaintiff brought a motion for an ex parte, in camera hearing to obtain an Anton Piller order against Jane Doe and John Doe defendants. It was represented to be a hearing that would require 10 to 15 minutes of the Court’s time. On the hearing, a draft order was placed before me for signature. It was represented to be the type of order this Court usually grants. I declined to issue the order in the form in which it was sought. This led to further submissions from counsel and requests from me for various explanations. This dialogue continued for some time, the last being representations I received from counsel on April 26, 1996 and a clarification thereof on May 21, 1996.

The order which is sought is what is known as a “rolling” Anton Piller order. As is obvious from the style of cause, when these orders are obtained from the Court neither the identity nor the address of the persons against whom they will be executed are known. On some occasions one or two persons may be identified as named defendants but they will have no necessary connection to the Jane and John Does against whom the order will also be executed. The unknown defendants are allegedly infringing intellectual property rights belonging to the plaintiff but in different places, at different times and in different circumstances. These “rolling” orders are to be distinguished from defendant-specific Anton Piller orders. While defendant-specific Anton Piller orders may also include Jane Doe and John Doe defendants, in general, the latter will be connected to the named defendants, for example, by being an employee of the defendant or a supplier of the alleged counterfeit goods to the defendant.

The “rolling” orders are executed against street vendors and transient flea market vendors although they are framed in broad enough terms to also encompass the search of retail premises, office premises, vehicles, warehouses, as well as residences. They are usually expressed to last a year subject to being renewed. Careful drafting in this regard is required, otherwise the order may be invalid as a result of the operation of subsections 469(2) and 470(2) of the Federal Court Rules [C.R.C., c. 663]. See also Société pour l’Avancement des droits en audiovisuel (SADA) Ltée v. Collège Édouard-Montpetit, [1981] 2 F.C. 307(C.A.).

Anton Piller orders are, in effect, search and seizure orders. The fiction is that the defendant gives permission to the plaintiff to search and seize.[1] The defendant does so under threat of being found in contempt of court if permission is not granted. The penalty for contempt of court, at least theoretically, can be a term of imprisonment. Also, while the theory is that the goods are seized to be retained as evidence for use at trial, the seizures in fact often operate as executions before or sometimes even without judgment. Plaintiffs are using these orders as self-help measures in circumstances in which, in other days, the police may have played a more active role.

Section 8 of the Charter [Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, appendix II, No. 44]] provides that individuals are entitled to be free from unreasonable search and seizures. That section is not confined to search and seizures by police officers or investigators pursuant to statutory powers. It is at least arguable that it applies to the civil search and seizures authorized by order of the Court under an Anton Piller order. An unreasonable search and seizure, as I understand the jurisprudence, encompasses one which has been conducted pursuant to an invalid order, or pursuant to an order which was too broadly drafted, or pursuant to an order which has been unreasonably executed; see Hunter et al. v. Southam Inc., [1984] 2 S.C.R. 145. When Anton Piller orders are sought and obtained from this Court it is important to place them within this context.

I turn, then, to some comments on the practice of seeking these orders. In the first place, motions to obtain such are often brought with the assertion that they are needed urgently. The material in support of the application is filed at the last minute, sometimes only minutes before the application is placed before the judge who is asked to grant it and who is in the midst of a busy motions day. The material is often voluminous. At the same time, the alleged infringers may have been engaging in the activity it is sought to restrain for several months, before counsel brings an application to Court for an Anton Piller order. It is not appropriate for counsel to come to Court, in such circumstances, representing that the matter must be dealt with urgently. As with other motions, the material should be filed at least two clear days before the motion is to be heard, to allow the judge who will hear the application time to review the material before the hearing.

Secondly, there is no need, in many of these cases, for the proceedings to be held in camera. In the present case, the order sought is against Jane Doe and John Doe. The identity of the defendants was not even known at the time of the hearing. A review of the file made it clear that there was no reason why an in camera hearing should have been requested.

Thirdly, according to the jurisprudence, see Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189(C.A.), before a court grants an Anton Piller order, it must be convinced that the applicant has a very strong prima facie case. This means, for example, that the copyright or trade mark rights which are asserted must be clearly identified (e.g., by production of the relevant registration documents, by photocopies of the relevant designs). In the present case, the description of the alleged trade marks and copyrights, which it was sought to protect, contained reference to unperfected applications for trade marks and trade marks for which registrations had never been applied. Indeed, it was in many aspects rather incomprehensible. It would not have given a person executing the order or those against whom it was executed a clear picture of what the order allowed to be seized. This was subsequently corrected.

The applicant’s rights to the intellectual property being asserted must also be clearly demonstrated. The application is ex parte. Counsel for the applicant has an obligation to explicitly call to the Court’s attention any weakness in those rights, of which he or she may be aware. This is a duty owed to the Court. A judge must be convinced that the applicant’s apprehension, that the counterfeit goods will not be available as evidence for trial if they are not seized, is well founded. If, for example, a representative item could be purchased by the plaintiff’s investigators and action proceeded with against the vendors, in the normal way, a case has not been made out for an Anton Piller order nor for the execution of it against a given defendant.

I turn then to the need for a supervising solicitor in attendance on all executions of the order. It is on this point that counsel, on behalf of his client, felt most strongly. He argued that such a requirement would make the use of these orders too expensive for his clients, that it is dangerous in some situations because executions of the order can result in physically abusive confrontations, that it is impractical when a number of executions are to take place in different locations simultaneously and, that it is unnecessary because the investigation agency which is employed is knowledgeable in these matters.

I recognize the force of these arguments but I am also mindful of the fact that there is enormous potential for abuse in issuing these orders. The Court is putting in the hands of the plaintiff the power to search the premises and to seize the goods, equipment and records of others. These powers are exercised in each particular situation when the plaintiff determines that particular goods are or relate to an infringement of its intellectual property rights. There is no public official involved in the execution of the order. If the Court is going to assist a plaintiff in the assertion of its rights by giving orders as invasive as Anton Pillers, then, I do not think the cost to the plaintiff should weigh too heavily in the balance when protection for the defendants is the competing consideration. I note costs, in any event, are being spread. It is clear from the pattern of review motions heard by the Court, in Toronto on any given motion day, that activities under these orders are being organized so that the enforcement team searches for and seizes the counterfeit goods pursuant to a number of orders (i.e., on behalf of a number of plaintiffs) at the same time. Counsel refers to these activities as raids.

With respect to the concern that the presence of a solicitor on these raids is not appropriate because the situations may become physically abusive, this is one reason a solicitor should be present. I note that the Anton Piller order requires the person against whom it is being executed to give permission for the search and seizure. One has to ask whether permission is really being given if the situation becomes abusive. It sounds as though what may be taking place is a forcible search and seizure. In so far as the impracticability of a solicitor being present when multiple executions are occurring at the same time, in different locations, the example of numerous street vendors appearing around a venue for the one-half hour following a rock concert was given, I do not think it appropriate to deal with that circumstance in the context of a rolling Anton Piller order. It may be that there are situations for which individual Anton Piller orders can be obtained, instead of including them in one of these “rolling” orders, where a solicitorless seizure is justified. Counsel painted a picture of a circumstance in which police officers and the plaintiff’s private investigators work together through a crowd. I leave open the question of whether there are situations in which solicitorless search and seizures can be justified. All that it is necessary to say for present purposes is that I am not prepared to provide for such in the present case.

I am asked to put the search and seizure powers into the hands of an investigation agency. The Court has no way of knowing why a particular agency should be granted such authority as opposed to any other. The plaintiff has chosen and pays that agency. The agency’s loyalty, in any actions taken by its staff, will naturally be to the plaintiff.

A solicitor attends on the execution of these orders in two capacities: as counsel for the plaintiff and as an officer of the Court. It is the plaintiff’s solicitor who attends. I accept that this may not be ideal. In the United Kingdom a practice has developed of having licensed Anton Piller officers, independent of the plaintiff, attend and supervise the execution of these orders. This may be a practice that is worth adopting. We do not have it at present, however, and I prefer to have a solicitor present at the execution of these orders, albeit the plaintiff’s solicitor, rather than no solicitor at all.

A solicitor, as an officer of the Court, owes duties to the Court as well as to his or her client. Solicitors attend and supervise the execution of these orders to ensure that their boundaries are not exceeded and to be in a position to give the Court an accurate and complete description of what occurred. They have legal expertise and are expected to be able to explain to those enforcing the order and to those against whom it is being executed what is and what is not allowed thereunder. This gives some assurance that the boundaries of the order will not be exceeded. Counsel understand that a misstep or mischaracterization of a situation can lead not only to the particular execution of the order being invalid but also to the vacating of the Anton Piller order itself.

It is argued that the defendant’s rights are protected even in the absence of a solicitor because if a search and seizure is improperly conducted, the defendant can always come to Court and have his or her property returned. This is of course the ultimate control. However, the efficiency with which it works will to a considerable extent depend upon the explanation given to the persons against whom the order is executed, as to their rights, the value of the goods seized from any one defendant and the willingness or ability of the individual to obtain independent legal advice. I am not prepared to grant a solicitorless Anton Piller order.

I turn then to what is expected on the motion for review of an execution of the order. In the first place it should be clear that not only the most recent execution of the order is under review but also the continuation of the Anton Piller order itself. The Anton Piller order can be set aside at any time for improper execution or other defect, either by a judge on his or her own motion, or on motion from any of the parties.

Secondly, the motion for review of an execution should include a request that the John Does and Jane Does against whom the order has been most recently executed are added to the statement of claim as named defendants (their identity is no longer unknown). The motion with respect to newly identified defendants will normally contain a request for an interlocutory injunction against them and for an order for the continued detention of the goods and equipment seized pending trial. It is not appropriate to seek release of the property into the hands of the plaintiff without a default judgment having been obtained against the defendant from whom the property has been seized. (I leave open for present purposes the appropriate disposition of goods which have been seized from defendants whose identities have not been ascertained because they have fled during the execution of the order.)

When the order is executed against a person who is already a named defendant and against whom an interlocutory injunction already exists, the motion should be one for a show cause order alleging contempt of court, rather than one to add the person, a second time, as a defendant and the obtaining of a second interlocutory injunction against that person.

The motion for review of an execution of the order must be supported in Court by a full report from the supervising solicitor of the execution or executions to which it relates, including occasions on which the identity of the defendant is not ascertained. This report must include a description of all goods, equipment and records seized, when and from whom they were seized. The most effective and efficient way of providing such, in many cases, will be by photographs coupled with an inventory.

The granting of these orders and the use to which they are being put is a recent evolution of the Anton Piller practice of this Court. Many questions remain unanswered, including some that are of a very fundamental nature. It would be useful to have some Court of Appeal jurisprudence with respect to these types of orders. By their very nature, however, the circumstances under which they are obtained and executed are not conducive to appeals. As counsel is aware, there has been some discussion amongst the judges of this Court with respect to the establishment of a model order. While one judge issues an Anton Piller order, others are called upon throughout the life of the order to approve executions made thereunder and to approve the order’s continuation. Thus the development of model orders would serve both the interests of the plaintiffs and of the Court. In the absence of such, however, counsel for the plaintiff asks that I at least issue a “temporary” order so that his client can be placed in somewhat the same position as other Anton Piller “customers” of this Court.

Accordingly, I have decided to issue the plaintiff a rolling Anton Piller order on terms that take account of many of the considerations articulated above. It is significantly different from that which was originally sought. It will carry within it a temporary quality because it will contain a provision allowing for its variation or termination at any time on the Court’s motion.

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