SHORT ANSWER QUESTION 1

Yolanda, Navdeep and Chris have followed your advice. They have set up their own business as a closely held corporation 12253110 Ontario Ltd.. with the tradename "YNC- You'll Look So Good." (YNC).

Initially, business went quite well. However, seeing the success of YNC other competitors moved into the market. As a result, YNC lost significant market share. Seeing no way out Chris, the financial principal for YNC decided that the best way that the company could survive is by selling "knock-off" products.

YNC's latest product consists of scarves and sweaters under the name "Channel by Christopher." As you can see from the logo "Channel By Christopher" bears a striking resemblance to another market participant.

a)A Chanel product sourcing agent comes into the YNC store looking for the next great products. He sees "Channel By Christopher" and alerts Chanel. What possible liabilities might YNC face if Chanel files a complaint?

Write in this box (it will expand as you type).

b)How should each party proceed?

Write in this box (it will expand as you type).

c)Does your answer change if Chanel has no intellectual property rights in Canada over scarves and sweaters?

Write in this box (it will expand as you type).

d)Navdeep and Yolanda are really not happy that Chris has led them down this road. They want to change the business.

i.Can they force Chris out?

ii.If so, how would they go about it?

iii.Do they need to dissolve the partnership?

iv.Can they escape Chris' liability for breach of intellectual property law if they had no idea what he was doing in developing this product?

(Based upon: Hermes Canada Inc. v. Henry High Class Kelley Retail Store, 20024 BCSC 1694