Coty inc. c. Costco Wholesale Canada Ltd., 2020 QCCS 1898
Read full decision. Summary prepared by Alan Macek:
The Court has before it a Modified Motion to Institute Proceedings to Obtain a Norwich Injunction Order ... Coty asking it to order the defendant Costco to disclose the identity of its suppliers that sold it genuine Coty products ... Because the activity is the resale of Coty products, no contract binds Costco to Coty. The Trademarks Act does not prevent Costco from selling genuine Coty products legally purchased in the parallel market in its distribution network, and neither does the Copyright Act. ... However, Coty’s exclusive right cannot prevent Costco from reselling in Canada genuine Coty products that it purchased for consideration in Canada or elsewhere in the world on the parallel market or the grey market, which usually emerges when the price of a good is significantly higher from one country to another. ... In sum, Coty based its Norwich application on the premise that the genuine Coty products sold by Costco were necessarily purchased from distributors that must have breached their exclusive distribution contracts, logically justifying Coty to sue them and ipso facto authorizing Coty to force Costco to disclose their identity to it. However, Coty did not prove this premise as a bona fide claim, as a prima facie case, or on a balance of probabilities, nor did it prove three other conditions essential to the merits of its application. In the end, the Court finds that Coty has not demonstrated that it has a right to the Norwich Orders its seeks against Costco.