VisionWerx Investment Properties Inc. v Strong Industries Inc., 2020 FC 378
Why Is This Case Important?
This case is important because it underscores how difficult it is to obtain an interlocutory injunction in Canada without clear, convincing, and non-speculative evidence of irreparable harm, even where a serious issue exists. It also clarifies that even unregistered trademarks may be protected under section 7(b) of the Trademarks Act.
Summary
VisionWerx Investment Properties Inc. (VisionWerx) manufactures and sells the Spaberry 5.0 two-person hot tub. It alleged that Strong Industries Inc. (Strong), through Costco Canada, was selling a similar-looking hot tub—the Solstice model—which infringed VisionWerx’s unregistered trademark and distinguishing guise. VisionWerx claimed that the Solstice was a “knock-off” and sought an interlocutory injunction to stop its sale pending trial.
VisionWerx argued that the Spaberry 5.0 had distinctive non-functional design features and that the Strong’s product caused consumer confusion, resulting in lost sales and damage to goodwill. Strong countered that the Spaberry’s features were functional or ornamental and not protectable as a trademark. They also argued that VisionWerx had no valid intellectual property rights and failed to show irreparable harm. Notably, VisionWerx amended its pleadings to add additional features of its alleged distinguishing guise (and only those that were similar to Strong’s Solstice model), causing Strong to point out that distinguishing guises do not evolve over time, and to question the veracity of VisionWerx claim of the existence of a valid distinguishing guise trademark.
Court Finding
The Federal Court dismissed the motion for an interlocutory injunction. While VisionWerx met the low threshold for establishing a serious issue to be tried, it failed to provide clear and convincing evidence of irreparable harm. The Court found that VisionWerx’s claims of lost sales and goodwill were speculative and based primarily on hearsay. There was no direct evidence of consumers being misled or purchasing the Solstice, thinking it was a Spaberry.
The Court emphasized that under the RJR-MacDonald test, all three elements—serious issue, irreparable harm, and balance of convenience—must be met. Since irreparable harm was not established, the injunction could not be granted. The Court also noted that any alleged harm from lost sales could be quantified and compensated through damages if VisionWerx succeeded at trial.
Key Takeaway
To obtain an interlocutory injunction in a trademark passing off case, especially involving an unregistered distinguishing guise, the plaintiff must meet all three parts of the RJR-MacDonald test. Confusion alone does not prove irreparable harm, and speculative or hearsay evidence is insufficient. Functional or ornamental product features are not protectable under trademark law. This case underscores the importance of presenting clear, direct evidence of harm and the limitations of equitable relief in trademark disputes.
