Upholding the validity of IP small claims

Intellectual property rights are only meaningful if they can be enforced. But litigation is expensive and complex. Where does this leave rights owners dealing with small-scale acts of infringement?

In a new study for the Queen’s Law Journal, we explored whether small claims courts could be an answer to “negative-value suits” in the IP space (i.e. when the cost of litigation is greater than the value of the judgment). Despite the relative novelty of IP small claims, our findings confirm these forums have wide jurisdiction over infringement matters, and are often well-positioned to resolve IP law questions, notwithstanding that such cases are rare.

For this year’s Access to Justice week, we highlight one often-overlooked strategy for cost-effective enforcement.

IP small claims

It is true that small claims courts are largely unfamiliar with IP. Decision makers have openly questioned their own jurisdiction (Zargar (dba Kylix Production) v. City of Vancouver, 2022 BCCRT 399; Figley v. Loran, 2002 CarswellSask 838 (PC)), or have misinterpreted simple IP doctrines (Miller Lake Learning Services Inc v Latta, 2010 NSSM 76), resulting in trials that provide neither justice nor affordability.

Even so, a handful of small claims cases do proceed every year. Trademark and copyright infringement issues are most common, as are general licensing and contractual disputes.

What IP claims can you bring?

Broadly speaking, small claims courts have wide jurisdiction over copyright, trademark, industrial design and patent infringement matters. While references to “courts” are found in the statutes for each IP type, these are generally to be interpreted broadly to include both provincial courts and small claims tribunals. Two primary exceptions apply.

First, the Federal Court has exclusive jurisdiction to alter entries in federal databases like the Patent Register. That said, provincial and small claims courts can often still find registered rights to be invalid as between the parties and refuse to enforce them.

Second, some remedies afforded by federal IP statues are only available in superior and Federal courts. But small claims bodies can still award remedies based on their own enabling legislation, which can include damages up to $50,000 and equitable relief.

While some decision makers are of the opinion that small claims courts lack jurisdiction in the IP space (1316633 B.C. Ltd. v. Windsor-Martin, 2022 BCCRT 979; Geophysical Service Inc v Jebco Seismic UK Ltd, 2016 ABQB 402), we take this opportunity to expressly disagree.

With the exception of Nova Scotia, small claims courts across Canada can hear most IP small claims. In Nova Scotia, the jurisdiction of its small claims court is limited only to claims “arising under a contract or tort,” which precludes statutory IP causes of action. Claims in passing off would presumably remain possible.

Should you bring an IP small claim?

Quite apart from whether a plaintiff can sue in small claims court, a question remains as to whether they should.

Litigators are right to point out that most small claims judges do not come from the IP bar. However, on the premise that Canadian courts are generalist in nature, the system presumes that this lack of experience can be overcome with the right resources and institutional support.

In practice, our research suggests that the resources and support available to small claims judges in Canada vary widely. We were impressed with the procedures in place in the Ontario Small Claims Court and B.C. Civil Resolution Tribunal. In both forums, it appears decisionmakers are given the time, access to legal resources, and supervision necessary to learn new areas of law and reach “correct” decisions. We were less impressed with the Nova Scotia Small Claims Court, which as an institution offers little in the way of support to its adjudicators. 

Our call to action for policymakers is to better equip Canada’s small claims courts with the resources and support to hear IP claims. This is in line with trends seen internationally, including the United States’ Copyright Alternative in Small-Claims Enforcement Act (2020) and the United Kingdom’s Intellectual Property Enterprise Court’s small claims track.

Until Canada’s small claims courts are better supported to hear IP claims, we emphasize the value in hiring an experienced IP lawyer to assist with enforcement. This help is especially valuable where small claims courts are hearing IP matters for the first time.

Conclusion

Small claims court can be a cost-effective place to enforce IP rights. With greater resources and support, these courts could also provide access to justice for Canada’s growing sector of technology-focused SMEs.

For more on jurisdiction, remedies, and the readiness of small claims courts, see our full article: “Intangible Justice? Intellectual Property Disputes and Canadian Small Claims Courts” (2022) 47 Queen’s LJ 70, available on WestLaw, QuickLaw and SSRN.