Federal Court of Appeal Ignores the Rule of Law

The Federal Court did not follow the Ontario Property and Civil Rights Act in a dispute over the michaels.ca domain name.

The Federal Court of Appeal set a precedent, in Michaels v Michaels Stores Procurement Company Inc, eliminating the rule of law in Canada. The court said that the Court has jurisdiction to order any appropriate remedy known to common law or equity.  They ruled that they can make an order regarding the transfer of non-infringing property, such as domain names, using the Trade-marks Act.

A statutory basis for the order requiring delivery up of the domain name can also be found in subsection 20(2) of the Federal Courts Act (R.S.C. 1985, c. F-7), which gives the Court jurisdiction to order any appropriate remedy known to common law or equity: Merck v. Apotex, 2006 FCA 323 at para 123. 

[123] Section 20 [as am. by S.C. 1990, c. 37, s. 34] falls under the section of the FCA entitled “Jurisdiction of Federal Court” and is concerned with the Court’s jurisdiction to hear and decide intellectual property matters. Nothing therein suggests that it is intended to limit a judge’s creativity in fashioning appropriate remedies.

David Michaels has owned michaels.ca since February 2001. Michaels Inc will operate from davidmichaels.ca until the Supreme Court of Canada restores the rule of law in Canada and sets aside a Federal Court of Canada default judgment that ignored Ontario’s Property and Civil Rights Act and section 92(13) of the Constitution Acts, 1867.

A Delaware USA Business Trust applied to register the name Michaels in June 2001 as a trademark for retail store services for the sale of hobby, craft and picture framing materials, claiming use in Canada since 1984. There were not any stores called Michaels in Canada selling hobby, craft and picture framing materials before 1993. The Business Trust obtained the trademark registration in 2003. The Business Trust then sold its trademark portfolio to a trademark holding and procurement company, MSPCI.

Given that MSPCI misrepresented the date of first use in Canada, the rules of equity should have prevented MSPCI from getting anything in court. Instead, the court ordered the transfer of michaels.ca to MSPCI, without hearing any evidence from Mr. Michaels.

In 2006, Bain Capital acquired MSPCI and a Texas-based Michaels Stores Inc for $6 Billion USD. Some Michaels Arts & Craft Stores began operating as just “Michaels” in Canada in about 2011.

On January 20 2012, MSPCI offered David Michaels $100,000 for michaels.ca, which he turned down. MSPCI’s lawyers verbally agreed to not sue Mr. Michaels, if didn’t sell custom framing online at michaels.ca.

A classic case of Reverse Domain Name Hijacking (RDNH) happens when a company obtains a trademark after a domain is registered. It tries to buy the domain name it wants but fails. So it files a cybersquatting complaint in a Court or under the Canadian Domain Name Dispute Resolutions Policy (CDRP) or the UDRP.

In March 2014, MSPCI applied to register a Michaels signature trademark that looks like Mr. Michaels signature.

In April 2014, MSPCI sued Mr. Michaels to hijack michaels.ca using their trademark registered after Mr. Michaels registered michaels.ca. MSPCI got a default judgment in the Federal Court of Canada. The court didn’t allow Mr. Michaels to give any evidence at the default judgment hearing because he failed to file an affidavit in advance.

Rule of Law

The rule of law says that similar cases should be decided similarly, based on the law, and not based on which party a court likes better. The Federal Court didn’t care about the rule of law and it refused to follow a previously published decision saying that the court had no jurisdiction to hear cases regarding property, such as domain names.

When I suggested that if the Stratus Company did not like the content on davidstratus.com, or that it may just want the domain name for themselves, the Federal Court should not have jurisdiction to decide the matter. Surprisingly, Justice Stratus gave an animated response to defend himself. He said that if a federal court thought he should lose his domain name, the court would have the jurisdiction to order the transfer.

*********************Breaking News******************

The Supreme Court of Canada rules that the Federal Court does not have inherent jurisdiction:

To decide whether the Federal Court has jurisdiction over a claim, it is necessary to determine the essential nature or character of that claim. Determining the claim’s essential nature allows the court to assess whether it falls within the scope of s. 23 (c) of the Federal Courts Act , which grants jurisdiction to the Federal Court only when a claim for relief has been made, or a remedy has been sought, “under an Act of Parliament or otherwise”. ….

The Federal Court has only the jurisdiction it has been conferred by statute: it is a statutory court, without inherent jurisdiction. Accordingly, the language of the Federal Courts Act  is completely determinative of the scope of the Court’s jurisdiction. Parliament established the Federal Court pursuant to its competence, under s. 101  of the Constitution Act, 1867 , to establish “additional Courts for the better Administration of the Laws of Canada”.

Windsor (City) v. Canadian Transit Co., 2016 SCC 54


Courts should never decide cases based on which party it likes better.

Mr. Michaels hopes that the Federal Court or the Supreme Court will set aside the judgment MSPCI obtained by:

  • Asserting a trademark registration for the name Michaels that MSPCI obtained by fraud;
  • Misrepresenting facts; and
  • Using evidence manufactured by MSPCI’s lawyers in their witnesses’ affidavits.
  • Watch a video analyzing Google analytics that shows that MSPCI’s lawyers manufactured evidence at their offices for their witness’ affidavit sworn by Heather Morschauser: https://youtu.be/9gmZyMjeG1M
  • Carol Morris: https://youtu.be/h9Yi_xygnj4
  • Les Vass:  https://youtu.be/acF9apjo6ss
Mr. Michaels needs representation in a motion for leave to the Supreme Court of Canada to restore the rule of law in Canada. Giberts Law has said that they would do the motion for $20,000. I need the $20,000 by May 1, 2016. Donations are welcome: paypal.me/davidmichaels
Stay tuned for more updates. twitter.com/davidmichaels