DIAGEO CANADA INC. Plaintiff/ Defendant by Counterclaim v. HEAVEN HILL, 2017 FC 738

Date: 20170728 Docket: T-740-14 Citation: 2017 FC 738 Ottawa, Ontario, July 28, 2017 PRESENT: The Honourable Mr. Justice Boswell BETWEEN: DIAGEO CANADA INC. Plaintiff/ Defendant by Counterclaim and HEAVEN HILL DISTILLERIES, INC. and DIAMOND ESTATES WINES & SPIRITS LTD. d.b.a.

KRISCOTT DISTRIBUTORS Defendants/ Plaintiffs by Counterclaim FURTHER AMENDED JUDGMENT [1] The Defendant/Plaintiff by Counterclaim, Heaven Hill Distilleries, Inc. [Heaven Hill], has made a motion in writing under Rules 369 and 397 of the Federal Courts Rules , SOR/98-106, as amended, for an Order that the Court reconsider the terms of the June 12, 2017 Judgment issued in this proceeding (citation 2017 FC 571 ) relating to the issue of costs as between Heaven Hill and the Plaintiff (Defendant by Counterclaim), Diageo Canada Inc. [Diageo], so that the parties be permitted to make written submissions as to costs, and for an Order amending the Judgment to remove paragraphs 3 and 5(

d) of the Judgment so as to align the Judgment with paragraph 99 of the Reasons for the Judgment. This Judgment was amended by an Amended Judgment dated June 27, 2017 (citation 2017 FC 624 ) [the Amended Judgment and, together with the Judgment, the Judgment], to clarify that the Judgment not be unintentionally interpreted in a manner requiring the Defendant/Plaintiff by Counterclaim, Diamond Estates Wines & Spirits Ltd. [Diamond Estates], to participate in any appeal or motion by Heaven Hills in order to take the benefit of a resultant decision. [2] The parties submit, and the Court agrees, that paragraphs 3 and 5(

d) of the Judgment do not align or accord with paragraph 99 of the Reasons for the Judgment and, consequently, these paragraphs should be removed from the Judgment. [3] As to the requests by Heaven Hill and Diageo that they be afforded an opportunity to make written submissions with respect to the issue of costs, the Court notes that both Diageo and Heaven Hill requested in their closing memoranda of fact and law that costs be considered and determined after the trial decision was rendered.

In rendering the Judgment, the Court overlooked and inadvertently omitted to make provision for the parties’ requests to make submissions as to costs. This matter should have been dealt with in the Judgment. Consequently, the parties shall be entitled to file with the Court written submissions as to the issue of costs; such submissions shall not exceed 20 pages in length (exclusive of any cover pages, any

schedule or list of authorities, or copies of any written offers to settle), and shall be filed within 30 days of the date of this Further Amended Judgment. [4] Accordingly, it is hereby ordered pursuant to Rule 397 of the Federal Courts Rules that the Judgment issued with respect to this proceeding is further amended to now read as follows: JU D GMENT THIS COU R T’S JU D G M ENT is tha t : 1 .

H ea v e n Hil l ’s s a le, distributio n , a nd a dv e rtis i ng in C a n a da of the A D M I R A L N E L S O N ’S rum p r odu c t s inf r in g e a nd d e p r e c i a te the g oodwill a t ta c hing to Di a g e o ’ s T r a de - m a rk R e g is t r a t i on Nos.: TMA29 8 ,005; TMA409,540; TMA445,025; TMA676,015; TMA676,119; TMA846,828; TMA846,82 9 ; TMA848,087; a nd TM A 863,667. 2 .

H ea v e n Hill has dir ec ted publ i c a t t e nt i on to its w a r e s and busin e ss so a s to c a use c onfusion in C a n a da b e t w ee n its w a r e s and busi n e ss and the w a r e s and b u siness of Di a g e o in C a n a d a. 3 . Di a mond Es t a tes sh a ll be bound b y the two f o regoing d e c la ra t i ons unless they are reversed, set aside or otherwise modified. 4 .

H ea v e n Hill, its r e s p ec t i ve o f fi ce rs, di r ec tors, sha re holde r s, e mp l o y e e s, l i ce nse e s, r e p re s e ntativ e s, ag e nts, and a n y p e rson und e r its a uthori t y o r c ontrol, a nd a n y c ompa n y , p a rt n e rship, busin e ss enti t y or p e rson with which it is a ss o c iat e d or af f i l iat e d, is re str a ine d , pro h ib i ted a nd e njo i n e d f r om, d i re c t l y o r indir ec t l y : a. s e l l in g , dis t ributin g , i m porting in t o Can a d a , e x porting f rom Can a d a , o f f e ri n g f o r s a le o r a dv er t i sing in C a n a d a , a l c ohol i c b e v e ra g e s in association with the ADMIRAL NELSON’S character or any other character which causes or is likely to cause confusion with, or which is likely to have the effect of depreciating the value of the goodwill attaching to, Diag e o ’ s T r a d e- m a rk R e g is t r a t i on Nos.: TM A 298,005; TMA409,540; TMA445,025; TMA676,015; TMA676,119; TMA846,828; TMA846,829; TMA848,087; a nd TM A 863,667; b. s e l l in g , dis t ributin g , i m porting in t o Can a d a , e x porting f rom Can a d a , o f f e ri n g f o r sale o r a dv er t i sing in C a n a d a , a l c ohol i c b e v e ra g e s in a ssoci a t i on with t he A D M I R A L NE L S O N ’ S bot t les or a n y other bot t le that is l i k e l y to ca use c o n fusion with t he CAPT A I N M O RG A N bott l e s, ind i vidual l y o r c ol l ec t i v e l y ; and

c. dir ec t i ng publ i c a t t e nt i on to its w a r e s , s e rvi ce s o r busin e ss i n su c h a w a y a s to c a use o r be l i k e l y to c a use c o n fusion in C a n a da b e tw e e n its w a r e s, s e rvi ce s or busi n e ss and t he w a r e s, se r vi c e s or bu s iness of Di a g e o. 5 .

H ea v e n Hill shall fo r thwi t h a nd, in a n y e v e nt, wi t hin 30 d a y s o f the d a te o f this j ud g ment, d e l i v e r - up to a re p r e s e ntative o f D i a g e o, or a t Di a g e o ’ s e le c t i on a st a tem e nt of d e stru c t i on u n d e r o a th of, a ll A D M I R A L N E L S O N ’S bott l e s in its poss e ss i on or c ontrol in C a n a da whi c h would o f fe nd the f o r e g oi n g in j un c t i on, a nd a ll mat e ri a l of a n y n a tur e , including a ll p ac k a g e s, lab e ls, and a dv e rtis i ng m a te r ia l , in its poss e ss i o n or c ontrol in Can a d a , t h e use of which w ould of f e nd s u c h in j un c t i on. 6 .

Heaven Hill shall submit to an accounting and pay to Diageo such damages as may be determined upon hearing of the Quantification Issues as stated and defined in the Court’s Bifurcation Order dated July 16, 2015. 7 . H ea v e n Hill shall p a y to Di a g e o p r e- ju d g ment a nd p o s t -jud g ment in t e r e st on a n y d a m a g e s as a ssess e d in a cc o r d a n c e with t he B ifu r ca t i on O r d e r d a ted J u l y 16, 20 15 , pursu a nt t o se c t i ons 36 a nd 37 of the F e d e ral C ourts A c t . 8 .

Paragraphs 4, 5, 6 and 7 shall also apply to Diamond Estates unless they are reversed, set aside or otherwise modified. 9 . Di a g e o shall h a ve i t s cos t s of this ac t i o n , including i ts d i sburs e ments a nd a ny a ppl i ca ble t a x e s, in such a moun t s a s m a y b e a g r e e d to b y H e a v e n Hill a nd Di a g e o. I f t h e y a r e un a b l e to a g ree a s to such a mo u nts, Heaven Hill and Diageo shall be entitled to file written submissions as to costs; such submissions shall not exceed 20 pages in length (exclusive of any cover pages, any

schedule or list of authorities, or copies of any written offers to settle), and shall be filed within 30 days of the date of this Further Amended Judgment . "Keith M. Boswell" Judge