Interlocutory injunctions (known in other jurisdictions as preliminary injunctions or temporary restraining orders) can be powerful and important tools for intellectual property ("IP") owners, as they provide a means for right holders to prevent continued
infringement of their rights pending trial.
The Supreme Court of Canada has held that in order to obtain an interlocutory injunction, a plaintiff must satisfy the following three-pronged test:
1. there is a serious issue to be tried;
2. it will suffer irreparable harm if an interlocutory injunction is not granted; and
3. the balance of convenience favours the plaintiff.
In recent years, the Federal Court of Canada has been very reluctant to grant interlocutory injunctions in IP cases, based on a number of Federal Court of Appeal decisions which set a very high bar for the evidence of irreparable harm. The result is that
fewer IP rights holders seek injunctive relief in the Federal Court.
In contrast, the Supreme Court of British Columbia, which has concurrent jurisdiction with the Federal Court of Canada on most IP issues, has a different and arguably
lower threshold with respect to finding irreparable harm.
Our Vancouver Office was recently successful in obtaining an ex parte interlocutory injunction in a trademark dispute in the British Columbia Supreme Court, on behalf of
a well-known United States based manufacturer of nutritional and dietary supplements, against its previous distributors in Canada. The following evidence of irreparable harm was accepted by the Court as being sufficient to obtain an interlocutory
injunction:
1. evidence that there was a lack of control by the Plaintiff over the quality of the goods, which could result in a loss of goodwill in their trademarks;
2. evidence of loss of actual and potential customers by the Plaintiff, which would
flow from the Plaintiff losing control over the character and quality of the goods;
3. evidence regarding the inability of the Plaintiff to re-establish a market presence in Canada through a new distributor;
4. evidence showing
that there would be a loss of distinctiveness of the Plaintiff’s trademarks based on concurrent use by two parties in the market place; and
5. evidence of the possibility of general confusion in the marketplace.
Obtaining the
injunction led to the settlement of the case.
Where it is appropriate from a jurisdictional and evidentiary perspective, IP owners may wish to consider the possible advantages of bringing their infringement action in the Supreme Court of British Columbia, or in the Courts of the other provinces,
which also may have less exacting standards for irreparable harm than the Federal Court.