To: Stanley Sucks home...

BETWEEN:

Plaintiff

Defendant

The Parties

1. The Plaintiff, The Stanley Works (“Stanley”) is a corporation incorporated and subsisting under the laws of the State of Connecticut and has its head office at 1000 Stanley Drive, New Britain, Connecticut, 06053, United States of America. The MacTools Division of Stanley manufactures and distributes a variety of products, including, electric power tools, pneumatic power tools, hydraulic power tools, engine cleaning machines, air tools, welding equipment, hand tools, measuring tools and magnetic tools (the “Products”).

2. The Defendant, Phil McNeil (“McNeil”), is an individual residing at 10820 - 102nd Street, Grand Prairie, Alberta, Canada. McNeil operates web sites at http://www.mactools.ab.ca and http://www.skunclenet.ab.ca (collectively the “Depreciating Web Sites”).

The Plaintiff’s Trade-marks

3. Stanley is the registered owner in Canada of a family of trade-marks that consist of or include the words “Mac”, “Tools” and/or “Stanley” for use in association with a variety of wares and services (collectively, the “MAC TOOLS Trade-marks”), the particulars of which are as follows:
   1. the trade-mark "MAC" registered on March 29, 1957 under number TMAIO6,211 in the Register of Trade-marks maintained under the Trade-mark Act RSC. 1985, c. T-13 (the ‘‘trade-marks Act’) for use in association with screw drivers, punches, chisels wrenches and wrench sets of various sizes and designs, hammers, awls, pliers, all of the foregoing being handtools used in repairing automotive equipment and in automotive maintenance repair work and tool boxes;

   2. the trade-mark "MAC TOOLS & Design" registered on April 12, l957 under number TMA106,304 in the Register OF Trade-marks maintained under the Trade-marks Act, for use in association with screwdrivers, punches, chisels, wrenches and wrench sets of varions sizes and designs, hammers, awls, pliers, all of the foregoing being hand tools used in repairing automotive equipment and in automotive maintenance repair work and tool boxes;

   3. the trade-mark "MAC QUALITY TOOLS & Design" registered on November 16, 1990 under number TMA375,606 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with hand tools for automotive mechanics and carpenters, wire tools namely brushes, cutters, wheels, pliers, files, hand-operated jacks and stands therefor;

   4. the trade-mark ‘MAC TOOLS & Design’ registered on November 29, 9990 under number TMA39O,854 in the Register of Trade-marks maintained under the Trade-mark act, for use in association with, inter alia, tool boxes, electric power tools pneumatic power Louis, hydraujic power tools, engine olorn’ing machines, rnr tools, welding equipment. hand tools, measuring tools and magnetic tools:

   5. the trade-mark “MAC TOOLS & Design” registered on September 10,1993 under number TMA416,530 in the Register of Trade-marks maintained under the Trade-marks Act, for use in association with tool boxes, tool cabinets and other metal containers for tools and parts and fittings for the aforesaid;

   6. the trade-mark “MAC” registered on October 4, 1996 under number TMA463,972 in the Register of Trade-marks maintained under the Trade-marks Act, for use in association with, inter alia, tool boxes, electric power tools, pneumatic power tools, hydraulic power tools, engine cleaning machines, air tools, welding equipment, hand tools, measuring tools and magnetic tools;

   7. the trade-mark “MAC ADVANTAGE” registered on June 19, 1998 under number TMA496,465 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with the provision of credit for the purchase of tools and related products including credit review and approval and collection of receivables;

   8. the trade-mark “STANLEY” registered on September 6, 1932 under number TMDAO55,166 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with edged tools, measuring tools and instruments, hand tools and parts thereof, electrically-driven tools and machines and parts thereof

   9. the trade-mark “STANLEY” registered on January 20, 1938, under number UCA010,317 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with, inter alia, builders’ hardware, edged tools, hand tools, measuring tools and instruments and electrically-driven tools and parts thereof;
   10. the trade-mark “STANLEY” registered on February 26, 1944 under number UCA019,092 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with, inter alia, electrically-driven tools;
   11. the trade-mark “STANLEY & Design” registered on January 9, 1981 under number TMA254,688 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with automatic door operating equipment and parts thereof;

   12. the trade-mark “STANLEY” & Design registered on September 13, 1991 under number TMA388,944 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with, inter alia, toy tools; and

   13. the trade-mark “STANLEY” registered on April 16, 1993 under number TMA411,021 in the Register of Trade-marks maintained under the Trade-marks Act for use in association with, inter alia, power tools, measuring tools and instruments, builders’ hardware, automatic door operating equipment and parts thereof and hand tools.

4. Since at least as early as 1953, the Plaintiff has, itself and through its Mac Tools Division, as well as by Stanley Canada Inc.; Stanley’s wholly-owned Canadian subsidiary (“Stanley Canada”), and Stanley Canada’s authorized distributors, and their predecessors in title, continuously carried on the business in Canada of, inter alia, selling, distributing and servicing the Products in association with certain of the MAC TOOLS Trade-marks (the “Mac Tools Business”).

5. By reason of such activities of the Plaintiff, Stanley Canada and Stanley Canada’s authorized distributors referred to herein, the MAC TOOLS Trade-marks have become well-known in Canada as identifying the Mac Tools Business. In addition, Stanley has created substantial goodwill in the MAC TOOLS Trade-marks in association with its Mac Tools Business.

6. On or about December 2, 1993, the Mac Tools Division of Stanley Canada and McNeil entered into a written agreement (the “Distributor Agreement”) pursuant to which McNeil was appointed as a non-exclusive authorized distributor in Grande Prairie, Alberta (the “Territory”) to sell the Products to users. On or about March 4, 1995, the Mac Tools Division of Stanley Canada and McNeil entered into a further written agreement (the “Credit Assignment Agreement”) pursuant to which McNeil expressly agreed, among other things, to promptly pay and maintain current his trade account.

7. Pursuant to the Distributor Agreement, McNeil expressly agreed, among other things, to aggressively and actively sell and promote the sale and service of the Products, to purchase from the Mac Tools Division of Stanley Canada an aggregate dollar amount of Products, to establish a regular route schedule in the Territory, to maintain the goodwill of his customers, and render prompt, efficient and courteous service with respect to the conduct of the Mac Tools Business, to maintain personal contact each week with Potential Accounts (as defined in the Distributor Agreement), to maintain an adequate inventory of Products to promptly and efficiently service the customers in the Territory, and to not sell, lease or otherwise deal in any products other than the Products.

8. The Credit Assignment Agreement provided a detailed three-step process that Stanley Canada and the Defendant were required to follow to settle disputes between them. The three steps were (1) negotiation, (2) followed by mediation if the negotiations were unsuccessful, and (3) arbitration if the mediation was unsuccessful or if the parties refused to mediate (the “ADR Clause”).

9. On or about January 6, 1998, McNeil filed a statement of claim in the Alberta Court of Queen’s Bench and served same on Stanley Canada. McNeil claimed that, among other things, Stanley Canada had breached the Distributor Agreement. On or about April 3, 1998, on the application of Stanley Canada, the Alberta Court of Queen’s Bench ordered that the issues raised in the statement of claim be remitted to arbitration and that McNeil’ s action against Stanley Canada be stayed until further order of the court. An appeal of this order, filed by McNeil, was subsequently dismissed.

10. Stanley Canada has alleged that McNeil has breached the Distributor Agreement and the Credit Assignment Agreement by, among other things, neither aggressively nor actively, selling or promoting the Products, failing to purchase the required aggregate dollar amount of Products, failing to establish and maintain a regular route schedule in the Territory, failing to maintain the goodwill of the customers in the Territory, failing to make personal contact with Potential Accounts, failing to maintain an adequate inventory of Products, abandoning his Territory and failing to pay any of the outstanding trade account which he owes to Stanley Canada.

11. As a result of the breaches of the Distributor Agreement and the Credit Assignment Agreement, Stanley Canada wrote a letter to McNeil in which Stanley Canada enumerated all of the said breaches and provided McNeil with 30 days to remedy such breaches. McNeil failed to remedy the breaches or any of them or even to commence to remedy the breaches or any of them. As a result, by letter from Stanley Canada to McNeil dated September 10, 1998, Stanley Canada terminated the Distributor Agreement, the Credit Assignment Agreement and all of McNeil’s rights thereunder to distribute the Products.

12. On or about October 16, 1998, Stanley Canada issued McNeil a notice to negotiate certain issues in accordance with the ADR Clause. In the notice to negotiate, Stanley Canada claimed from McNeil judgment in the amount of $33,769.50 related to the outstanding trade account balance and interest thereon at the rate of 13.0% per annum from May 5, 1998 to the date of payment (or such other greater amount as may be proven) and damages in the amount of $50,000.00 related to McNeil’ s breach of the Distributor Agreement (or such other greater amount as may be proven).

The Defendant’s Web Sites

13. On or about August 16, 1999, Stanley became aware of a world wide web home page entitled “The Unofficial Mac Tools Home Page: The Page They Don’t Want the Public to See” operating at the web site “http://www.mactools.ab.ca” (the “Defendant’s Mac Tools Web Site”). Stanley subsequently became aware of an affiliated web site operating at the address "http://www.skunclenet.ab.ca” (the “Defendant’s Skunclenet Web Site”). Both sites are operated by the Defendant.

14. The Defendant’s Mac Tools Web Site is registered in the name of “McNeil & Associates 0/a Mac Tools Division” at 10820 - 102nd Street, Grand Prairie, Alberta, Canada (i.e., the Defendant’s residential address). The Defendant is listed as the Defendant’s Mac Tools Web Site’s administrator.

15. The Defendant’s Skunclenet Web Site is registered in the name of Skunclenet, also at the Defendant’s residential address. The Defendant is also listed as the administrator of the Defendant’s Skunclenet Web Site.

16. The Defendant has programmed (or caused to be programmed) the Depreciating Web Sites with meta tags which contain or consist of the MAC TOOLS Trade-marks. The purpose of these meta tags is to provide a marker or signpost on the Internet such that persons entering the MAC TOOLS Trade-marks as key words to be searched by an Internet search engine (such as Alta Vista, Internet Explorer or Excite) will be provided with a list of “hits”, that is, a list of web sites relating to the Mac Tools Business. The Defendant has programmed (or caused to be programmed) the Depreciating Web Sites with meta tags containing the MAC TOOLS Trade-marks so that persons using a search engine to locate information concerning the Plaintiff and its Products will be directed to the Depreciating Web Sites.

17. The url address or domain name for the Defendant’s Mac Tools Web Site is www.mactools.ab.ca. A domain name is a letter-based address used to locate resources on the Internet and to link computers or networks to the Internet. A domain name consists primarily of a second level domain name (“SLD”) and a top level domain name (“TLD”). Typically, an on-line company will use one of its trade-marks or trade-names or a word that describes the company’s business in its SLD. The TLD corresponds with the type of organization that has registered the domain name. The Defendant’s domain name uses the word “mactools” in its SLD and the TLD “.ca”, indicating that the web site operator is located in Canada.

18. The Defendant’s Mac Tools Web Site has received thousands of “hits” since its September 1, 1999 launch date.

19. The Defendant’s Mac Tools Web Site is what is known in the Internet world as a “gripe site”. The Defendant’s Mac Tools Web Site is hyperlinked to the Defendant’s Skunclenet Web Site which also contains references to the Plaintiff, its Products and the Mac Tools Business. Although the Defendant’s Mac Tools Web Site specifically addresses the Plaintiff, its Products and the Mac Tools Business, the Defendant’s Skunclenet Web Site is primarily directed towards publishing the Defendant’s statements on a variety of topics.