Interlocutory injunctions can be an important litigation tool to remedy situations where quick relief is necessary to prevent damages from infringing activity. While the Federal Court is often the preferred venue for trademark and other intellectual property litigation, until recently it was virtually impossible to obtain interlocutory relief, largely because of the high onus set by Federal Court jurisprudence to show irreparable harm with clear and non-speculative evidence. Other courts appear to approach the onus differently, including the Quebec Superior Court, which recently demonstrated that it can be a friendlier forum for injunctions in trademark law, even in a case involving unregistered rights.
In Pièces d'auto économiques inc. v. 9343-6137 Québec Inc.1, the plaintiff, which has been operating under the trade name "Pièces d'auto économiques" (which in English could be translated into Cheap Auto Parts) for the past forty years, obtained an interlocutory injunction until the decision on the merits against a business that has recently started doing business under the name "Pièces d'auto écono". Both businesses offer the same goods and services. Although they are not located in the same city - the plaintiff being in the Quebec City area, while the defendant is located in Longueuil - the pool of customers of the two businesses was found to possibly overlap. In fact, the plaintiff has shown that it has clients in several other regions of Quebec, including the region in which the defendant is located, in addition to operating a website that is of course accessible from all parts of the province of Quebec - although the extent of its goodwill outside the Quebec City region is unclear. It has also made recent efforts to promote itself on social media. It should be noted that each of the parties uses different logos and colors and neither appears to have a registered trademark or pending application for their respective names. Admittedly, both parties' respective marks combine a generic term ("auto parts") with a common laudatory descriptive term ("economic" or its diminutive "econo"). However, the Court did not seem to take that into account, possibly because the plaintiff has demonstrated use of its trademark for over 40 years.
The defendant began using the trade name "Pièces d'auto écono" on June 29, 2016. It received the plaintiff's demand letter on August 8, 2016, but chose to ignore it rather than take the warning seriously.
The Court reiterated the criteria to be considered in this respect, namely (i) colour of right, (ii) serious or irreparable harm, and (iii) the balance of inconvenience.
On the colour of right, (also known as "serious issue to be tried" in other venues") the Court reviewed the confusion criteria of the Trademarks Act, and found that, since the plaintiff has been using its name for more than 40 years and the parties offer the same products and operate the same type of businesses, there is a likelihood of confusion. As to serious harm, the Court confirmed the jurisprudence on the matter, which holds that the potential loss of customers is generally considered as irreparable harm. Finally, it was held that the balance of convenience test does not have to be considered when the plaintiff's rights are clear. The Court nevertheless pointed out that the balance of inconvenience is in favor of the plaintiff, commenting in passing that the defendant's decision to ignore the plaintiff's demand letter has consequences.
The Court therefore ordered the defendant to immediately cease all use of the name "Pièce d'auto écono", to remove all advertising with that name and to notify its customers and suppliers of this order.
Every case must be analysed from its own particular facts, and here, the Quebec Superior Court appears to have been influenced by the fact that the defendant ignored a demand letter. However, the Quebec Superior Court's analysis seems to be at odds with many Federal Court decisions, both in its assessment of "serious or irreparable harm", and the merging of evidence of harm and balance of convenience. Typically, without "clear" evidence of irreparable harm, as opposed to "potential loss", the Federal Court will not grant interim relief, although in the recent decision of Sleep Country Canada Inc. vs. Sears Canada Inc.2, the Court's reasoning seemed to suggest that the impossibility of calculating damages could support a finding of irreparable harm. In addition, the Federal Court usually requires the plaintiff to clearly demonstrate how it will suffer more inconvenience than the defendant should the injunction not be granted. The Quebec Superior Court's approach seems much more informal. Having shown a "serious issue" of confusion, a potential loss of customers satisfied the "irreparable harm" test, and that made a review of the balance of convenience test unnecessary.
This decision reminds us that courts may take discretionary provisional measures to protect trademark rights. This discretion may be in favor of a plaintiff who demonstrates use of the mark over a long period of time, even if the mark is inherently not very distinctive, especially if the evidence shows that the defendant chose to ignore the plaintiff's serious warning. The decision is also instructive in suggesting that choosing the forum - Federal or provincial courts, may impact success. While a provincial decision may have applicability in only a single province, if that may significantly impact an infringer's entire business activities, the provincial courts may be a preferred venue.
Footnotes
1 2017 QCCS 757.
2 2017 FC 148 (under appeal).
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