The British Columbia Supreme Court issued an interlocutory injunction against adidas Canada, restraining it from using “TERREX” as the name of its retail store located at 2235 W. 4th Ave., Vancouver, BC.
The plaintiff, Arc’teryx Equipment, operates a retail store selling outdoor apparel and equipment at 2033 W. 4th Ave. The store prominently displays the registered trademark ARC’TERYX on the storefront:
In January 2023, adidas opened the 2235 W. 4th Ave location to sell its “TERREX” line. The storefront sign includes an unregistered mark “TERREX”, in combination with adidas registered “Performance Bars” design mark:
At other locations, the adidas Performance Bars are accompanied by the name “ADIDAS” underneath.
Arc’teryx claimed that the triangular Performance Bars symbol resembles a stylized letter “A”, and its positioning in front of the word TERREX results in signage resembling “A TERREX”, a format which creates “consumer confusion” between the TERREX store and the ARC’TERYX store just a few doors down the street. It therefore applied for an interlocutory injunction restraining adidas from using TERREX as the name of its retail stores, including the store located at 2235 – W. 4th Ave., Vancouver and also with respect to any online retail store services.
The Court applied the RJR Macdonald test and determined that an interlocutory injunction should issue.
The “serious issue to be tried” standard applied at the first step, rather than the more exacting “strong prima facie case” standard. The Court found this motion would not in effect amount to a final determination of action. This was also not a case where the outcome would impose such hardship on a party as to remove the potential benefit of proceeding to trial, nor where the factual record was largely settled. The Court also rejected adidas’ argument that the injunction would be mandatory rather than prohibitory because it was narrowly tailored to using the trademark TERREX as the storefront banner at the W. 4th Ave. location.
The first step was satisfied because there were many serious issues to be tried, including “a significant contest between the parties whether the use of the parties’ respective trademarks on the banner of their neighbouring stores leads to confusion of a sort required to sustain a cause of action for trademark infringement or for the tort of passing off.”
The second step, irreparable harm, was also satisfied because the Court found persuasive that Arc’teryx’s distinctiveness, once lost, would be virtually impossible to regain. The Court found that “money may be a poor substitute for the uniqueness or distinctiveness of an original art form, even if the latter was created for commercial purposes,” and noted that the case presented a David versus Goliath scenario.
The third step, balance of convenience, also weighed in favour of an injunction in part because Arc’teryx had a registered trademark and was entitled to the exclusive right to use it. Adidas was the party who altered the status quo and elected to take a risk with eyes wide open. The Court also rejected adidas’ argument that it would be “forced” to close its W. 4th Ave store.
The Court declined to extend the injunction to the use of TERREX on adidas’ website, as that use was always accompanied by the adidas name.
The Court made the interlocutory injunction conditional on the parties securing a trial date and on the plaintiff filing a formal undertaking for damages. It also set the injunction to expire “if and when the pending adidas application for a trade mark registration in international class 35 for TERREX in association with retail store services is granted,” which Arc’teryx expressed an intention to oppose.
A copy of the decision can be found here.