Woodpecker Obtains Interlocutory Injunction In Passing Off Claim Against Registered Trade-Mark Owner

A recent British Columbia decision demonstrates the possibility of obtaining interlocutory injunctive relief in a trade-marks case, and challenges the concept that a registered trade-mark is necessarily a perfect defence to a passing off claim.

In Woodpecker Hardwood Floors (2000) Inc. v. Wiston International Trade Co., Ltd., 2013 BCCA 553, the B.C. Court of Appeal dismissed an application for leave to appeal a Supreme Court decision that granted an interlocutory injunction in favour of the plaintiff, the senior user of WOODPECKER as a trade-mark in association with hardwood floors. The claim is based in passing off against the defendant, the registered owner—but junior user—of WOODPECKER.

The decision is potentially important because, contrary to the general position in Federal Court, the B.C. courts recognized the irreparable harm inherent in ongoing business confusion. In addition, the courts held that, contrary to Ontario authority, a registered trade-mark is not necessarily a perfect defence to a passing off action.

Background

The plaintiff, Woodpecker Hardwood Floors, marketed hardwood floors in B.C. using the trade-name "Woodpecker" from at least 2000, but did not register the name as a trade-mark. The defendant, Wiston International Trade Co, a competitor of Woodpecker doing business less than 2 km from Woodpecker, incorporated in 2009 and obtained a trade-mark registration for the word "Woodpecker" in 2013. Woodpecker brought an action against Wiston for passing off and sought an injunction to stop Wiston from using the WOODPECKER trade-mark.

Irreparable harm

For twenty years, the law in the Canadian Federal Court has made it all but impossible to obtain an interlocutory injunction in trade-mark cases. In its 1994 decision in Centre Ice Ltd. v. National Hockey League (1994), 53 CPR (3d) 34 (FCA), the Federal Court of Appeal held that neither the existence of confusion nor the loss of goodwill are necessarily sufficient to establish irreparable harm, but rather there must be specific evidence that links the confusion to a loss that is not compensable by damages. The Court went on to state that loss of goodwill in the normal course can be fairly compensated for in damages. That decision has been interpreted consistently as setting the bar very high—many would say too high—for the type of specific evidence required to obtain an interlocutory injunction in the Federal Court.

In contrast, the chambers judge in Woodpecker found that:

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