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Are Trademark Injunctions Continuing their Awakening from Hibernation?

January 27, 2021

By Tamara Céline Winegust and Scott MacKendrick

For the second time in six months, the Federal Court has issued an interlocutory injunction in a trademark action in Immigration Consultants of Canada Regulatory Council v. CICC The College of Immigration and Citizenship Consultants Corp., 2020 FC 1191.

In this case, Justice Fuhrer considered claims brought under section 7(a), (b), (c), and (d), as well as 9(1)(d) and 11 of the Trademarks Act, 1985 c T-13. Section 7(d) claims, as well as section 9(1)(d) and 11 claims, are rarely before the courts. They relate to making certain false and misleading statements (section 7(d)), and the use of prohibited matters under the Trademarks Act (sections 9(1)(d) and 11). Claims under sections 7(b) and (c), the former of which captures traditional passing off and the latter of which captures a particular form of passing off, are more frequently asserted; claims under section 7(a) relate to false or misleading statements tending to discredit a competitor. Applying the three part test set out in RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311, Justice Fuhrer determined there was a serious issue to be tried in respect of the non-passing off claims; that the Plaintiff would suffer irreparable harm without an injunction; and the balance of convenience favoured granting such relief.

The litigation was brought by Immigration Consultants of Canada Regulatory Council (ICCRC), which, since 2011, is Canada’s regulator of immigration and citizenship consultants under the Citizenship Act, against an entity, The College of Immigration and Citizenship Consultants Corp. (CICC), whose predecessor failed to become the regulator in 2011, as well as two of the CICC’s executives.

In 2019, the Federal Government introduced legislation to create a college of immigration and citizenship consultants, under the College Act, to be named the “College of Immigration and Citizenship Consultants”. The same legislation provided a mechanism for the ICCRC to continue its role under this new name. Following the introduction of the legislation, however, CICC “pre-emptively” tried to usurp the ICCRC through a number of false and misleading actions.

With respect to section 7(a) —i.e., that the CICC made false or misleading statements tending to discredit the business, goods, or services of the ICCRC— Justice Fuhrer found that the Defendants’ statements on its website and LinkedIn page that the Plaintiff’s status as regulator had been revoked/it lacked a federal mandate/was operating illegally, “seemingly offended” this section since, on a balance of probabilities, the ICCRC would likely continue to be the national regulator under the College Act. Similarly, for section 7(d) —i.e., that the CICC used in association with its services, a description that is false in a material respect and likely to mislead the public— Justice Fuhrer noted that statements on the CICC website to the effect that it was registered as the Regulator, and the College, under the College Act, constituted such false and misleading statements.

For the claims relating to prohibited use under the Trademarks Act, Justice Fuhrer determined that because the name of the Defendants was effectively the name of the new college under the College Act, its continued use would fall within the prohibition at section 9(1)(d) —that adoption and use of the Defendants’ name would likely lead to the mistaken belief that the associated services have received or are performed under governmental patronage, approval, or authority. The success of the section 11 claim would follow, since that section prohibits use of any sign adopted contrary to section 9.

Given the aggressive behaviour of the Defendants—that the CICC’s actions were taken essentially to pre-empt the legislation, frustrate the ICCRC’s transition to be the College, and become the regulator by force—Justice Fuhrer readily found irreparable harm and that the balance of convenience favoured issuing the injunction, buttressed by the compelling public interest that the Defendants’ behaviour, if left unchecked, would undermine member and public confidence in the proper regulator.   

Six months ago, in TFI Foods Ltd. and I-MEI Foods Co., Ltd. v Every Green International Inc. (2020 FC 808), Justice McHaffie of the Federal Court also granted an injunction to address the sale of apparent grey goods, where those goods were labelled in a false or misleading fashion. Specifically, TFI and I-MEI sought an injunction to prevent Every Green International Inc. from selling I-MEI branded products in Canada bearing a label falsely identifying Every Green as the exclusive distributor in Canada of such products.

Justice McHaffie found a serious issue to be tried solely on the basis of the passing-off claim under section 7(b), namely, that the plaintiff, I-MEI, had goodwill in its registered trademarks and that Every Green’s false labelling was deceptive, resulting in actual or potential damage. He also found on the issue of irreparable harm that the continued presence in the marketplace of the I-MEI branded products bearing false labels improperly identifying Every Green as the exclusive distributor of the products in Canada, as well as inaccuracies in the ingredient list and nutrition facts, may damage the reputation and goodwill of the I-MEI products and business, and thereby cause irreparable harm. Moreover, the fact that Every Green did not respond to this motion suggested that damages were not only difficult to quantify, but also would be difficult to collect. Finally, Justice McHaffie found that the balance of convenience favoured the granting of the injunction, with there being no evidence that Every Green would suffer any harm if the injunction was granted and, in any event, any such harm arose from its own conduct in making the false label statements.

Over the past few years, the Federal Court has signaled an emerging openness to grant injunctive relief and protect a plaintiff’s trademark interests. For example, in Sleep Country Canada Inc v Sears Canada Inc, 2017 FC 148—to prevent use by the plaintiff’s direct competitor of a confusingly similar slogan—and Reckitt Benckiser LLC v Jamieson Laboratories Ltd, 2015 FCA 104—to prevent entry into the Canadian market of a product sold under a confusingly similar brand. These decisions show the welcome development over the past six years that Courts will now grant injunctions in appropriate trademark cases.

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Author(s):

Tamara Céline Winegust Tamara Céline Winegust
B.F.A., J.D.
Associate
416.957.1651  email Tamara Céline Winegust
R. Scott MacKendrick R. Scott MacKendrick
B.A.Sc. (Chem. Eng.), LL.B.
Partner
416.957.1675  email R. Scott MacKendrick