CANADIAN COURT USES JURISDICTION SIMPLICITER

1
CANADIAN COURT USES JURISDICTION
SIMPLICITER TEST IN DOMAIN NAME CASE
Adam Mizera*
LEGER ROBIC RICHARD, L.L.P.
Lawyers, Patent and Trademark Agents
Centre CDP Capital
1001 Square-Victoria - Bloc E – 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: (514) 987 6242 - Fax: (514) 845 7874
[email protected] – www.robic.ca
In a unanimous decision, the British Columbia Court of Appeal has ruled that
British Columbia has jurisdiction in a dispute related to a right to use a domain
name “Poker.com” even though the defendant in this case was incorporated
in Samoa (UniNet Technologies Inc. v. Communications Services Inc. 2005
BCCA 114 (March 2, 2005, Newbury J.A.)). The complexity in the
circumstances of the case is a good illustration of the challenges of applying
traditional legal concepts of jurisdiction to cases that involve different players
in the global internet-based economy.
Factual Background
ALA, a corporation incorporated in St. Vincent and the Grenadines, granted
the first plaintiff/respondent, UniNet Technologies Inc., a 99-year licence to
use the domain name “Poker.com”. The domain name is associated with online gambling, an activity that is illegal in some jurisdictions, including
Canada. UniNet then sublicensed the domain name to the second
plaintiff/respondent Poker.com Inc. a Florida company. The facts of the case
also indicate that, although another company, incorporated in Antigua, was
originally designated to operate the internet poker room, the site was actually
operated from Costa Rica.
The licence agreement contained a choice of law and jurisdiction clause
which specified that the agreement was to be governed by the laws of the
Province of British Columbia and that the parties to the agreement
recognized the jurisdiction of the courts of British Columbia.
© CIPS, 2005.
* Lawyer and Engineer of the law firm LEGER ROBIC RICHARD, L.L.P a multidisciplinary firm of
lawyers, and patent and trademark agents. Published in the August 2005 World e-commerce
& IP Report. Publication 274.024.
2
Futhermore, any dispute between the plaintiff and the defendant in
connection with the agreement which could not be settled by mediation,
would be resolved by arbitration under the British Columbia Commercial
Arbitration Act, R.S.B.C. 1996, c. 55 to take place in Vancouver.
UniNet alleges that ALA wrongfully terminated the original licence agreement
and transferred rights to use the domain name to the defendant
Communications Services Inc., a company incorporated in Samoa and linked
to ALA. The statement of claim against Communications Services Inc. also
raised claims related to a trade-mark application and alleged passing off.
In the court of first instance, the plaintiffs claimed a right to serve a writ of
summons and a statement of claim on the defendant outside British
Columbia based on the fact that there was a breach of contract or a tort
committed in British Columbia. The defendant claims that the Supreme Court
of British Columbia was without jurisdiction over the claims or that it should
have declined jurisdiction.
The trial judge found that the claims raised by the pleadings of inducement of
a breach of contract made in British Columbia and damages suffered in
British Columbia in the arbitration case between the two parties were
sufficient for a finding of jurisdiction simpliciter. Consequently, the court found
that the plaintiffs had an arguable case for relief. The defendants appealed
the decision.
Analysis by the Court of Appeal
Although the Court of Appeal mentioned that it would be challenging to
apply a “real and substantial connection” test to the present facts, it
proceeded to do so. In fact, the Court found that a cumulative weight of
connecting factors between British Columbia and the circumstances of the
case were sufficient to support the conclusion that British Columbia courts
had jurisdiction simpliciter. The connecting factors included:
• The licence agreement under which the plaintiffs claimed right to
use and eventually own the domain name is governed by the
law of British Columbia;
• The right to use and eventually own the domain name was also
being concurrently adjudicated in arbitration proceedings in
British Columbia;
• The licence agreement was entered to in British Columbia;
• According to the plaintiffs, the contract was to be performed, at
least in part, in the province;
3
•
British Columbia law was chosen by both parties to the licence
agreement.
Consequently, the Court of Appeal held that the trial judge’s treatment of the
arbitration between the parties as grounds for establishing jurisdiction was
valid, and dismissed the appeal.
This case is an illustration of the importance of jurisdiction clauses in licensing
agreements. As shown above, parties who think that their interests are well
protected by incorporating in countries having strong “asset protection” laws,
can see their fortunes turned by signing licensing agreements that make them
subject to the same foreign jurisdictions they were originally seeking to
escape.
4
ROBIC, un groupe d'avocats et d'agents de brevets et de marques de
commerce voué depuis 1892 à la protection et à la valorisation de la
propriété intellectuelle dans tous les domaines: brevets, dessins industriels et
modèles utilitaires; marques de commerce, marques de certification et
appellations d'origine; droits d'auteur, propriété littéraire et artistique, droits
voisins et de l'artiste interprète; informatique, logiciels et circuits intégrés;
biotechnologies, pharmaceutiques et obtentions végétales; secrets de
commerce, know-howet concurrence; licences, franchises et transferts de
technologies; commerce électronique, distribution et droit des affaires;
marquage, publicité et étiquetage; poursuite, litige et arbitrage; vérification
diligente et audit. ROBIC, a group of lawyers and of patent and trademark
agents dedicated since 1892 to the protection and the valorization of all
fields of intellectual property: patents, industrial designs and utility patents;
trademarks, certification marks and indications of origin; copyright and
entertainment law, artists and performers, neighbouring rights; computer,
software and integrated circuits; biotechnologies, pharmaceuticals and plant
breeders; trade secrets, know-how, competition and anti-trust; licensing,
franchising and technology transfers; e-commerce, distribution and business
law; marketing, publicity and labelling; prosecution litigation and arbitration;
due diligence.
COPYRIGHTER
IDEAS LIVE HERE
IL A TOUT DE MÊME FALLU L'INVENTER!
LA MAÎTRISE DES INTANGIBLES
LEGER ROBIC RICHARD
NOS FENÊTRES GRANDES OUVERTES SUR LE MONDE DES AFFAIRES
PATENTER
R
ROBIC
ROBIC + DROIT +AFFAIRES +SCIENCES +ARTS
ROBIC ++++
ROBIC +LAW +BUSINESS +SCIENCE +ART
THE TRADEMARKER GROUP
TRADEMARKER
VOS IDÉES À LA PORTÉE DU MONDE , DES AFFAIRES À LA GRANDEUR DE LA
PLANÈTE
YOUR BUSINESS IS THE WORLD OF IDEAS; OUR BUSINESS BRINGS YOUR IDEAS TO
THE WORLD