Trademark Interlocutory Injunction Denied

A recent decision of the Saskatchewan Court of Appeal, setting aside the interlocutory injunction granted by the Chambers judge, illustrates how difficult it is to obtain an interlocutory injunction absent convincing evidence that satisfies the three part test for an interlocutory injunction.  In Kulyk v. Wildman (Weight Loss Forever Consulting), the Saskatchewan Court of Queen’s Bench granted the plaintiff an interlocutory injunction precluding the defendant from using or carrying on business under the plaintiff’s alleged business name and trademark, “Global Healthcare Connections” and directing the defendant to remove all references to the plaintiff’s mark on social media sources.  In assessing the plaintiff’s application, the Chambers judge looked to Potash Corp. of Saskatchewan Inc. v. Mosaic Potash Esterhazy Limited Partnership which set out the well‑established test for an interlocutory injunction:  

(1) the strength of the plaintiff’s case;

(2) the presence of a meaningful risk of irreparable harm if the injunction is not granted; and,

(3) whether the balance of convenience favours the granting of the injunction. 

The Court of Appeal allowed the appeal and held that the plaintiff’s application for injunctive relief was based on the common law tort of passing off, which in turn, required evidence of goodwill, deception of the public due to misrepresentation, and actual or potential damage to the plaintiff.  The Court stated that the plaintiff’s case was weak because she failed to put forth any evidence to establish the existence of goodwill associated with the name Global Healthcare Connections.  The plaintiff’s affidavit referred to various steps she had taken to launch her business, but it also stated that she had had difficulty launching her business because of the defendant’s actions.  Thus, there was no evidence that the plaintiff or her services were known in the market.

The Court found it unnecessary to assess the remaining elements of the common law tort, although it did comment on these.  With respect to the element of irreparable harm, the Court disagreed with the Chambers judge’s finding that the plaintiff had suffered loss of business, finding instead, that the similarity between the names used by the parties would likely result in a benefit rather than harm to the plaintiff’s business.  Noting that a balance of convenience analysis could be “compendious”, the Court was satisfied that the balance of convenience also favoured the defendant, given the weakness of the plaintiff’s case and given that irreparable harm favoured the defendant.  Thus, the Chambers judge’s decision could not stand.

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Declaring Control in Expungement Proceedings

In De Grandpré Chait v. Mead Products LLC, the Trademarks Opposition Board (the “Board”) maintained the registration for YEAR-IN-A-BOX (the “Mark”), which is registered for use in association with calendars. At issue was whether the registrant, MeadWestvaco (the “Registrant”), had demonstrated sufficient control over the entity selling the calendars in Canada in association with the Mark so as to maintain the registration of the Mark on the Canadian Trademarks Register. Importantly, Section 50(1) of the Trade-marks Act  states that if a trademark owner licenses the trademark for use by another entity and the owner has, under the license, direct or indirect control of the character or quality of the wares or services being provided by such entity in association with the licensed trademark, then the use of the trademark has the same effect as if used by the trademark owner itself.

In affidavit evidence accepted by the Board, the calendars associated with the Mark were manufactured in the United States by MWV Consumer & Office Products, a division of the Registrant. The calendars were then sent to Hilroy, a division of MeadWestvaco Canada LP, which sold the calendars to Canadian retailers. The Registrant’s affidavit evidence stated that MWV Consumer & Office Products, Hilroy and MeadWestvaco Canada LP were authorized to use the Mark pursuant to licenses under the terms of which the Registrant controlled the nature and quality of the calendars associated with the Mark. Importantly, the Registrant did not provide evidence detailing those terms of the license agreements which demonstrated control between the licensor and licensee. The party requesting expungement took the position that this evidence needed to be adduced so as to demonstrate sufficient control to satisfy Section 50(1). However, the Board held that it is possible to satisfy Section 50(1) of the Act by way of a declaration in which the owner or license holder simply attests to the fact that the control required by Section 50(1) indeed exists.

This owner-control scenario is a common one that faces many foreign owners of Canadian trademark registrations that are seeking to maintain marks on the Canadian Trademarks Register during an expungement proceeding. This decision highlights the importance of ensuring that control is demonstrated either by way of a declaration to such effect or, better yet, by filing evidence which includes a written license agreement detailing adequate control provisions.

Injunction for Trademark Infringement: Québec

In Solutions Abilis Inc. v. Groupe Alithis Inc., the Québec Superior Court granted the plaintiff an interlocutory injunction precluding the defendant from using ALITHIS as part of its corporate name or trade name or as a trademark.  The test for an interlocutory injunction in Québec turns on whether the rights which the plaintiff invokes are clear, doubtful or non-existent.  If those rights are clear an injunction should be granted if serious harm would otherwise result.  If those rights are doubtful the court must also consider the balance of convenience.  This test is similar, although not identical, to the test used in the common law provinces where the courts must consider whether there is a serious issue to be tried, irreparable harm and the balance of conclusive irreparable harm. 

After setting out the test the Court then considered the plaintiff’s trademark rights, starting from the premise that trademarks are a guarantee of origin and intended to protect the public by indicating the source of the goods and services.  The Court then focused on whether there was confusion, finding that the plaintiff’s marks,

 abilis it           abilis ti

were inherently distinctive, since the included word, ABILIS, was a coined term with 3 syllables that created a strong sonority – “ab-il-is” and because of the use and position of the “it” and “ti” symbols in the marks.  The defendant’s mark,

alithis

 also used 3 syllables and a symbol.

The length of time also favoured the plaintiff and the nature of the trade was similar, namely computer consulting services.  The Court was not willing to accept the defendants’ argument that persons purchasing computer services would take time to determine the source, noting that initial interest confusion was sufficient and might, among other things, result in the plaintiff not being invited to bid for a potential customer’s work.  The Court was also convinced there was a sufficient degree of resemblance, referencing a number of Québec cases where the degree of resemblance led to a finding of confusion even where the goods or services were different. 

Since the likelihood of confusion was clear, a loss of goodwill and clientele were presumed and therefore the injunction was granted.  A decision regarding the balance of convenience was not necessary, but the Court noted, in the event of an appeal, that it favoured the plaintiff, particularly given the shorter period of time the defendants had been in the market.