Interlocutory injunctions are rarely granted in trademark and
trade name cases in Canada owing, particularly, to evidence of
irreparable harm – one of the parts of the injunction test
– being examined by Canadian Courts with a very careful
In a recent decision of the British Columbia Supreme Court, an
interlocutory injunction has notably been granted, restraining a
defendant against using its business name.
The defendant had owned a business known as "Alpha Neon
Ltd.", which made and sold neon signs for approximately 20
years. Alpha Neon Ltd., however, had gone into bankruptcy in
That same year, the defendant agreed to let the plaintiff
incorporate under the name "Alpha Neon (2012) Ltd.", and
claimed that this consent was conditional on acquiring shares in
the plaintiff's business. There was no evidence to support the
assertion about the shares. The plaintiff was also sold the assets
of the defendant's bankrupt business by order of the Court;
that purchase was found not to include rights to the Alpha Neon
The plaintiff hired the defendant to work for the new company.
Less than two years later, the plaintiff dismissed the defendant
alleging cause. The defendant sued over his dismissal, and then
formed a new competing company by the name of "Ziskos Sign
Consulting Ltd." In July 2014, the defendant changed the
company's name to "Alpha Neon Sign Consulting
With respect to the three-part injunction test to be applied,
the defendant conceded there was a serious issue – that of
passing off – to be tried. The Court then considered whether
irreparable harm would result from the defendant's continued
use of "Alpha Neon" with his competing business. In
finding irreparable harm, Justice Macintosh noted that irreparable
harm is "incapable of compensation in damages", and found
in this instance that "[a] damages assessment would be an
artificial exercise" in part because the "supply of
neon product is entirely unregulated, and measurements of competing
market penetration could be nothing more than guess work".
Justice Macintosh also noted that even if damages were
calculable at trial, the defendant would likely not be in a
position to pay them. Without rigorously addressing the issue of
balance of convenience, he stated that regardless of whether this
impecuniosity would fall under the balance of convenience stage of
the injunction test, the injunction would be granted, thereby
enjoining the defendant from any and all use of the "Alpha
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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