With the rise of e-commerce, many non-Canadian businesses can now advertise their services to Canadians online without having any physical presence in Canada. If these businesses have Canadian registered trademarks associated with these services, there are however important considerations for businesses wanting to properly maintain their trademarks in Canada. Unlike other forms of intellectual property, an owner of a Canadian trademark must “use” their registered mark in Canadian commerce or it may lose the protections provided by the Trademarks Act. It goes without saying that without a physical presence in Canada, it could be challenging for foreign trademark owners to prove that they are meeting the “use” requirement. The WALDORF ASTORIA case provides helpful guidance for foreign trademark owners to mitigate the risk of compromising their intellectual property.
Interlocutory injunctions remain difficult
to obtain in trademark infringement cases. To obtain an interlocutory
injunction, the moving party must satisfy a three-part test. A party must show
that: (1) a serious issue has been
raised; (2) irreparable harm will result if the injunction is not granted; and
(3) the balance of convenience favours the moving party. Over the years parties
seeking injunctive relief in trademark infringement cases have faced difficulty
satisfying the irreparable harm branch of the test. In order to satisfy the
court that irreparable harm will result, the court requires clear and
non-speculative evidence of harm that could not be compensated for by an award
of damages at trial. This has proven to be difficult for parties for among
other reasons, the fact that often in these cases it is in fact possible to
quantify the harm that has and/or will be done and accordingly compensate the moving
party through an award of damages at trial. Canadian courts have recently
provided more insight on the evidence required to support a request for
injunctive relief.
In the 2017 decision of Sleep Country Canada Inc. v. Sears Canada
Inc., 2017 FC 148, Sleep Country Canada Inc. (“Sleep Country”) was granted
an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent
Sears from using its slogan: “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE
ELSE”, pending the final determination of Sleep Country’s trademark
infringement action against Sears. Sleep Country alleged that Sears’ slogan
infringed Sleep Country’s trademarked slogan of “WHY BUY A MATTRESS ANYWHERE
ELSE”. The court accepted Sleep Country’s arguments and found that on a
balance, there was a likelihood of confusion between the time of the motion and
the disposition of the infringement action and that this confusion would result
in lost sales as a result of consumers being less aware and familiar of the
slogan’s association to Sleep Country. The court found that these associations
would consequently result in a loss of distinctiveness for the brand of Sleep
Country and this would in turn have an effect on the goodwill established by
Sleep Country.
