Court of Appeal Upholds Federal Court’s Order for Transfer of Domain Name

On March 15, 2016, Canada’s Federal Court of Appeal (FCA) released its decision Michaels v Michaels Stores Procurement Company, Inc, 2016 FCA 88  (Michaels), which dismissed multiple grounds of appeal from a default judgment that, among other things, found the plaintiffs’ trade-mark had been infringed and ordered delivery up of a domain name.

A recent Federal Court decision had found that the Federal Court can enjoin the continued use of certain domain names or restrain their transfer to others, but had no jurisdiction to order transfer of a domain name to a plaintiff.  However, in Michaels, the FCA determined that the lower court’s order for transfer of a domain name was within its wide discretion to fashion remedies under the Trade-marks Act and did not constitute a palpable and overriding error in the exercise of judicial discretion. The FCA commented that the domain name was the mechanism by which the mark was infringed, and was the instrument of confusion in the marketplace, therefore the remedy for transfer of the domain name was not only within the lower court’s jurisdiction, but appropriate in the circumstances.