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Threatening sanctions without a legal basis

The Denturist Association of Canada’s (“DAC”) five digit procedure codes are licensed to its provincial associations (including the Denturist Association of Ontario (“DAO”)), and these provincial associations are authorized to use and reproduce portions of their fee guides which incorporate DAC’s procedure codes.  The procedure codes and related descriptions of services are used to identify services provided to patients when submitting claims to insurance companies and third party payers.  DAC’s certification mark, DD, may be used by DAC’s members and members of DAC’s licensed provincial associations, however, non-members may pay a fee to use it.  Of note, in Ontario, DD connotes the professional designation “Diploma in Denturism”.

The Denturist Group of Ontario (“DGO”) is not a member of DAC.  DGO was founded as a cost-effective alternative organization to DAO, with DGO creating its own procedure code books, and relying on DAC’s five digit coding system.  DAC and DAO regard DGO as a competitor for membership fees.  DAC and DAO pursued DGO and DGO’s members for payment of non-member fees, claiming copyright in DAC’s five digit procedure codes and fee guide, and the right to use DAC’s certification mark, DD.  DAC’s letters to DGO’s members indicated that by using DGO’s procedure codes and the DD designation (without being a member of the DAO), they may be found guilty of professional misconduct.

DGO sought declaratory, injunctive and monetary relief against DAC and DAO to invalidate four of DAC’s registered literary copyrights in denturism procedure codes [Registration Nos. 1090851, 1104079, 1104080 and 1018278], a related fee guide, and DAC’s certification mark, DD, for denturist services.

The Court held that (i) copyright subsists in DAC’s four copyright registrations but not in the five digit codes and corresponding descriptions of denturist services; (ii) DGO did not infringe DAC’s copyright in DAC’s procedural codes and fee guide; and (iii) the certification mark, DD, was invalid.

The Court also held that the language of DAC’s letters to DGO’s individual members did not constitute false and misleading statements contrary to ss. 7(a) and 53.2 of the Trade-marks Act.  DAC made this statement despite knowing at the time that only the College of Denturists of Ontario (“CDO”) has the authority to adjudicate on issues of professional misconduct.  The Court held that the threat of professional misconduct was inappropriate given that DAC and DAO had no authority to threaten any sanction that is under the exclusive jurisdiction of the CDO.  The Court also held that this threat was knowingly and willfully made by DAC.  The Court indicated that it does not condone or approve of misplaced or unsubstantiated threats being made by any party, especially when the threats are knowingly made without legal authority or right to do so.  As such, DAC was enjoined from making any allegations, threatening or otherwise, of professional misconduct by DGO’s members relating to the alleged copyright or trade-mark infringement in this proceeding.

A copy of Federal Court’s Judgment and Reasons may be found here.