Date: 20090731
Docket: T-460-09
Citation: 2009
FC 791
Ottawa, Ontario, July 31, 2009
PRESENT: The Honourable Madam Justice Snider
BETWEEN:
WESTERN
STEEL AND TUBE LTD.
Plaintiff
and
ERICKSON MANUFACTURING LTD. and
B. ERICKSON MANUFACTURING LTD.
Defendant
REASONS FOR ORDER AND ORDER
I. Background
[1]
Western Steel and
Tube Ltd. (referred to as WST or the Plaintiff) manufactures and sells a
variety of loading and utility ramps, safety bars, storage racks and multi-purpose
building frames. In particular, the company makes loading ramps which, it
asserts are distinct because of their appearance, the manner in which the ramps
are packaged for sale and the appearance of the packaged kit. The instruction
booklet for its ramps has been registered as a literary work pursuant to Canada’s Copyright Act, R.S.C. 1985, c. C-42 (Copyright Act).
[2]
Two related
companies, Erickson Manufacturing Ltd. and B. Erickson Manufacturing Ltd.
(collectively referred to as the Defendant or Erickson), are also selling
utility ramps in Canada. On March 26, 2009, WST commenced an
action against Erickson, claiming that two of those ramps – the six-foot, one
piece ramp and the seven-foot two piece ramp – are “knock off” products that
copy WST’s ramps. WST claims that Erickson’s products copy “the Plaintiff’s
product with poor quality imitations and multiple points of similarity in the
get-up of the goods with the cumulative effect of deceiving purchasers into
confusing the source of the products”. In its Statement of Claim, WST seeks (in
addition to other remedies, including damages) a permanent injunction to
restrain Erickson from:
·
Passing off its ramps
for those of WST;
·
Copying WST’s
designs, trade dress, marks, packaging, instructions and copyright;
·
Depreciating the
value of goodwill attaching to WST’s business;
·
Directing public
attention to Erickson’s business in such a way as to cause or is likely to
cause confusion between Erickson’s ramps and those of WST; and
·
Engaging in unfair
competition.
[3]
In this motion, WST
seeks an interlocutory injunction and other related relief that would, in
effect, prevent Erickson from marketing the two alleged “knock off” ramps until
the matters raised by the action are finally determined by the Court.
II. Issues
[4]
The overarching
question before me in this motion is whether the Plaintiff is entitled to the
equitable remedy of an interlocutory injunction. It is well-established in
relevant jurisprudence (RJR-MacDonald Inc. v. Canada (Attorney General),
[1994] 1 S.C.R. 311; American Cyanamid v. Ethicon Ltd., [1975] 2 W.L.R.
316) that entitlement to injunctive relief is based on establishing all
elements of a tri-partite test.
[5]
Thus the issues
before me are:
1.
Is there a serious
question to be tried?
2.
Will the Plaintiff
suffer irreparable harm if the injunctive relief is not granted?
3.
Does the balance of
convenience favour the Plaintiff?
III. Analysis
A. Is
there a serious issue?
[6]
The first question to
be asked on the tri-partite test is whether the pleadings of the Plaintiff
raise a serious issue. The threshold to be met on the matter of serious issue
is very low. With respect to the seriousness of the issue to be tried, the
Supreme Court of Canada in RJR-MacDonald, above at 337-338, held:
The
threshold is a low one. ... Once satisfied that the application is neither
vexatious nor frivolous, the motions judge should proceed to consider the
second and third tests, even if of the opinion that the plaintiff is unlikely
to succeed at trial. A prolonged examination of the merits is generally neither
necessary nor desirable.
[7]
I am persuaded that,
on this very low threshold, there is a serious issue to be tried.
B. Would
the Plaintiff suffer irreparable harm?
[8]
The second branch of
the tri-partite test requires that the Plaintiff demonstrate that it would
suffer irreparable harm if the injunctive relief is not granted. It is also
well understood that irreparable harm refers to the nature of the harm suffered
rather than its magnitude. As the Supreme Court of Canada pointed out in RJR-MacDonald,
it is "harm which either cannot be quantified in monetary terms or which
cannot be cured, usually because one party cannot collect damages from the
other." (p. 341). The Plaintiff must adduce clear and non-speculative
evidence that irreparable harm will follow if the injunction is not granted.
Having reviewed the evidence before me on this motion and having heard their
oral submissions, I am not persuaded that the prospective harm to WST meets the
test for irreparable harm.
[9]
I first note that any
financial loss that can be demonstrated by WST in the case of success in the
action can be compensated through damages.
[10]
WST relies on a line
of jurisprudence that, it submits, demonstrates that it is not necessary to
show irreparable harm in cases of clear violation of copyright registered under
the Copyright Act (Jeffrey Rogers Knitwear Productions Ltd. v. R.D.
International Style Collections Ltd., [1985] 2 F.C. 220, 6
C.P.R. (3d) 409; 75490 Manitoba v. Meditables (1989), 31 F.T.R. 134, 29
C.P.R. (3d) 89; Diamant Toys v. Jouets Bo-Jeux Toys, 2002 FCT 384, 218
F.T.R. 245 and Versace v. 1154979 Ontario, 2003 FC 1015, 238
F.T.R. 298). In my view, the jurisprudence cited does not assist WST in this
motion.
[11]
Two cases relied on
by WST – Diamant and Versace – involved a preservation order
under Rule 377 of the Federal Courts Rules, 1998. In each case, the
judge (in Diamant) or the prothonotary (in Versace) made a
specific finding that there was an infringement of the plaintiff’s copyright.
The other two cases cited (Jeffrey Rogers and 75490 Manitoba) are
decisions that pre‑date cases in which the Federal Court and the Court of
Appeal have consistently reinforced the importance of irreparable harm in the
context of copyright or trademark cases (see, for example, ITV Technologies
v. WIC Television (1997), 140 F.T.R. 302, 77 C.P.R. (3d) 495 (F.C.T.D.); Nintendo
of America Inc. v. Camerica Corp. (1991), 127 N.R. 232, 36 C.P.R.
(3d) 352 (FCA), aff’g 42 F.T.R. 12, 34 C.P.R. (3d) 193; Nature Co. v.
Sci-Tech Educational (1992), 141 N.R. 363, 41 C.P.R. (3d) 359 (FCA), rev’g 51
F.T.R. 70, 40 C.P.R. (3d) 184). In short, there is no automatic conclusion that
irreparable harm exists merely because the foundation of an action is an
infringement of copyright or trademark or the alleged tort of passing off.
[12]
In the motion before
me, I am prepared to acknowledge that there are clear similarities between
WST’s product and Erickson’s product, including the packaging and copyrighted
instructions. However, there are also some significant differences. For
example: the colour scheme on the two product boxes is not the same; the name
“Erickson” is prominently displayed on the product box. I cannot conclude, as
encouraged by WST, that the Erickson product is a “blatant” copy of the WST
product. The degree to which the Erickson ramps copy the WST ramps and their
design is a question that will be determined by the trial judge Thus, even if
there is precedent to support the proposition that irreparable harm is
satisfied by a demonstration that the defendant’s product is substantially the
same as that of the plaintiff, the evidence before me is inadequate to make
that determination.
[13]
WST also alleges that
it will lose the goodwill that it has developed over time by the maintenance on
the market of Erickson’s “inferior” product that is likely to fail when put to
its intended use. In its view, since purchasers will confuse the Erickson’s
product with that of WST, the loss of goodwill will accrue to WST. I first
observe that a finding of confusion will not necessarily lead to a loss of
goodwill (Centre Ice Ltd. v. National Hockey League (1994), 166 N.R. 44,
53 C.P.R. (3d) 34 at 53). As noted by Justice Heald in Centre Ice, at
54, “[i]t cannot be inferred or implied that irreparable harm will flow
wherever confusion has been shown.” The central problem with WST’s claim of
loss of goodwill is that it is unsupported by any evidence beyond the
assertions of the principal in WST, Mr. Duane Lucht. WST did not provide the
Court with any independent evidence from a technical expert on the strength of
Erickson’s ramp. Nor do I have evidence of confusion or that WST’s reputation
will suffer during the time to trial.
[14]
In sum, WST has
failed to establish real and immediate irreparable harm which cannot be
compensated by damages.
[15]
Given this conclusion
there is no need to address the question of balance of convenience.
IV. Conclusion
[16]
For these reasons,
the motion will be dismissed with costs to Erickson, in any event of the cause.
ORDER
THIS COURT ORDERS that the motion is dismissed, with costs in
any event of the cause to the Defendant.
“Judith
A. Snider”
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