TransactionsCassels Brock Successfully Stays $100,000,000 Misappropriation and Infringement Action for Lack of JurisdictionPublished: 06/15/2010 In a decision of the Ontario Superior Court of Justice (Justice Grace) released on June 14, 2010, Cassels Brock obtained an order staying an Ontario action commenced by Magnum Integrated Technologies Inc. against Intergrated Industrial Systems and its principals in which Magnum sought over $100,000,000 in damages arising from the alleged misappropriation of proprietary, confidential and intellectual property, as well as injunctive relief arising from the purported infringement of Magnum's registered and common law trademarks. In the case, Magnum (who conducts its business from its office in Brampton, Ontario) alleged that Intergrated was using drawings and other trade secrets that Magnum had acquired through the bankruptcy court in Connecticut to unlawfully compete with Magnum worldwide. Additionally, Magnum asserted that the trademark rights that it had acquired from the bankruptcy court were being infringed by competing marks used by Intergrated on its website from its offices in Connecticut and in the products manufactured and serviced by Intergrated. In the decision, the court had to grapple with the application of the recent Ontario Court of Appeal decision in Van Breda. More specifically, the court was forced to consider whether there was a "real and substantial connection" to Ontario by virtue of Magnum being located in Ontario, the proprietary and intellectual property likewise being located in Ontario, and the fact that Magnum was seeking injunctive relief on Canadian trademarks in Ontario. Ultimately, the court accepted Intergrated's arguments that the Ontario court should decline jurisdiction as the presence of Magnum in Ontario and the physical location of its intellectual property rights were really tangential to the real jurisdictions in question, namely the Asian and European markets where the parties competed. The court also found that it would be unfair to compel Intergrated to be subject to the jurisdiction of Ontario where its historical and contemplated business activities were so minimal. By way of a different analysis, the court went on to find that it would stay the action on the basis of Connecticut clearly being a more convenient forum upon a review of various connecting factors to the Connecticut jurisdiction, including the location of the defendants, the laws of Connecticut likely applying to the alleged misconduct and breach of fiduciary duties asserted against the defendants, the existence of Connecticut proceedings involving Magnum and a third party in terms of the validity of the trademarks in question and the admitted legal benefits to Magnum if it proceeded with its litigation in Connecticut. Robert B. Cohen of Cassels Brock's Litigation group acted for Intergrated Technologies and its principals. Read the Decision of the Superior Court of Justice - Ontario. |