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The Wrath of Chanel: Federal Court awards $250,000 in Punitive Damages for Repeated Trade-Mark Infringement

An action brought by Chanel for the infringement and passing off of various trade-marks was disposed of via summary trial. In Chanel S. de R.L. v. Kee, 2015 FC 1091, Justice Martineau ruled in favour of Chanel and awarded a substantial amount of damages for the Defendants’ sales of knock-off fashion accessories.

In two previous cases, the Defendants were ordered to cease the sale of any merchandise bearing the Chanel Trade-marks. In this case, the Court found that the Defendants had again offered for sale or sold counterfeit Chanel wallets, cell phone covers, earrings and other jewelry on at least in four instances.

The normal calculation of damages in such cases would yield $64,000 ($8,000 base amount per plaintiff per instance of infringement). However, Justice Martineau found that the Defendants’ blatant disregard of the plaintiffs’ rights, as well as the blatant disregard for the process and Orders of the Court, were clearly circumstances under which the Defendants should be ordered to pay significant punitive and exemplary damages. The Court ordered an additional award of $250,000 as well as $66,000  in costs (60% of solicitor-client costs).

The Defendants had sought to resist disposition by summary trial by arguing that the existence of credibility issues required witness testimony and cross-examination in front of the Court. Justice Martineau held that simply raising issues of credibility was not sufficient to make a matter unsuitable for summary trial. The Court was satisfied that the issues could be resolved on the evidence before the Court and it would not be unjust to proceed by summary trial.

 A copy of the Court’s decision can be found here.