In one of the first cases of its kind in Canada, Louis Vuitton is taking legal action against an Etobicoke flea market over its tenants' counterfeit goods.
The multinational design firm is seeking damages against Dr. Flea's Flea Market for negligence, copyright infringement and vicarious liability.
Although some countries, such as the United States, recognize that a landlord can be responsible for tenants' infringement, this concept has not yet developed in Canadian law.
The counterfeit industry is worth nearly half a trillion dollars, according to the Organisation for Economic Cooperation and Development.
Teresa Scassa, a professor at the University of Ottawa, said stopping copyright infringement can be an impossible battle for brands. Often counterfeiters will close up one shop and open another after they are found out. That is what makes landlords an attractive target for companies.
"If you start to put some legal responsibility on them, if there's a risk of liability, then there's a chance that that will make them more careful about who is selling in their spaces and what they're selling in those spaces," Dr. Scassa said.
It is not the first time counterfeit goods have caused problems for this Toronto flea market. In the past decade, police have raided it three times, once confiscating more than $1-million in counterfeit goods.
But the landlord's lawyer, Glenn Cohen, says that patrolling more than 400 vendors is difficult.
"Come, walk among the booths. Look at the scarves and see if you could tell which one is counterfeit," he said.
Louis Vuitton's lawyer, Georgina Danzig, declined to comment.
To prove negligence, Louis Vuitton will have to show the landlord knew about the infringement.
The court will also have to look at questions such as whether landlords should have to enforce strict policies against counterfeiters and walk by stalls in person to ensure the legality of their goods.
Louis Vuitton has brought these issues to courts in China, the United States and Australia. A U.S. court ordered several store owners to refuse to lease space to companies that sold counterfeit goods. In China, landlords were held liable. In Australia, the court found that the landlord was not responsible for distinguishing and policing counterfeit goods.
The situation has also played out online. When Tiffany Inc. sued eBay, the court ruled in favour of the online auction site because it had an established system to prevent counterfeiting.
"It'll be interesting to see, first of all, if they could accept the negligence argument and then what parameters they set on it," Dr. Scassa said.
This civil suit is in its earliest stages. Jury selection has begun, but Mr. Cohen said the plaintiff is planning on amending it statement of claim. He expects the case to take two or three years.
In the meantime, it is business as usual at the flea market.
Giuseppina D'Agostino, a professor at Osgoode Hall law school, does not expect this trial will have an impact on flea markets or copyright infringement. The law may develop to consider whether a landlord is liable for a tenant's wrongdoings, but it likely would not stop vendors who make counterfeits. After all, there are more brands to copy.
"It can't just be Louis Vuitton. It has to be all the other brands," Dr. D'Agostino said.