55 JUN 2022 | WWW.LAWYER-MONTHLY.COM EXPERT INSIGHT matters are sought to prevent irreparable damage to a plaintiff’s goodwill pending final determination of the parties’ rights at trial. Interlocutory injunctions in trademark and passingoff matters traditionally have been granted sparingly, as the requirement for “irreparable harm” was often considered difficult to establish. As discussed further below, the decision of the court may signal a loosening in the “irreparable harm” standard, at least in Ontario, and may result in more widespread issuance of interlocutory injunctions in trademark infringement matters. What has “irreparable harm” previously been understood to mean, and how might this definition shift as a result of this decision? Per the RJR MacDonald case, the standard of “irreparable harm” is the key element in the tripartite test the court undertakes when considering granting an interlocutory injunction. “Irreparable harm” is considered harm for which damages cannot provide adequate compensation. The standard of “irreparable harm” has historically been difficult to prove, since in most trademark contexts it can be argued that any harm to the moving party can be adequately compensated for financially, should it ultimately prevail, and courts would typically insist on clear evidence that irreparable harm has occurred or, in a quia timet action, will occur, and ignore speculative evidence of harm. In this case, the court held that the plaintiff would suffer undue disadvantage given the circumstances and will suffer irreparable harm which is not compensable monetarily. In particular, the court noted that the plaintiff has applied for trademark registration and invested significant time and energy into preparing to enter the market. The court further noted that the defendant would have a significant advantage in terms of name recognition, goodwill and first mover advantage were the two Bombay Frankie restaurants, both opened after the plaintiff had applied for registration of the trademark “Bombay Frankies”, permitted to continue in business under the name Bombay Frankie. Decisions to grant an interlocutory injunction hinge on the specific facts of each case and it can be difficult to identify broadly applicable instances where relief will be granted. Previous cases have required significant evidence, often from experts, showing clear and not speculative evidence that irreparable harm has or will occur. The court in this instance did not require evidence of prior use of the mark by the plaintiff as a precondition to grant interlocutory injunctive relief, nor did it require evidence that harm would actually occur, instead inferring that harm would occur in the circumstances on the basis of “first mover” advantage. While not referencing this case specifically, the court’s decision appears to follow the reasoning of the Federal Court of Appeal in Jamieson Laboratories Ltd. v Reckitt Benckiser LLC, 2015 FCA 104. In the Jamieson case, the applicant was attempting to stop an alleged infringer from being first to market so as to make it impossible to quantify damages It seems that at least at the provincial level, courts are willing recognise the risk of irreparable harm to trademark applicants who have not yet entered the market suffered. The Jamieson case was debated by trademark professionals as to whether it signalled a loosening of the analysis of “irreparable harm”. With the amendments to the Trademarks Act removing the requirement to show use before obtaining registration and the benefits that flow from it, it seems that at least at the provincial level, courts are willing recognise the risk of irreparable harm to trademark applicants who have not yet entered the market on the basis that harm to the potential future goodwill of the applied-for trademark cannot be quantified and is thus “irreparable”. Finally, we will look at the Milano Pizza franchise dispute. What was at stake in this case? At stake is the importance of proper trademark licensing in Canada, including written license agreements, and the licensor’s exercise of actual control. The validity and enforceability of a licensor’s trademark can be lost if a licensor does not exercise sufficient control over the character and quality of the licensed goods or services. Inconsistent and insufficient licensing arrangements with licensees ultimately could be the death of a trademark. The TM at issue is the plaintiff Milano
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