Western Steel and Tube Ltd. v. Erickson Manufacturing Ltd. 2009 FC 791 (July 31, 2009)
There were a slew of copyright cases uploaded to the Canadian Federal Courts website today. Of note, the Honourable Madam Justice Snider of the Federal Court in Ontario addressed the question of whether a court may presume irreperable harm in a motion for an interlocutory injunction. An interlocutory injunction is referred to as a preliminary injunction in the United States.
Western Steel and Tube brought suit against two rival manufacturing companies alleging that the companies were selling “knock offs” of its utility ramps. Western Steel claimed that the rivals, among other things, infringed its copyright in its packaging and instructions. The Court applied the three-pronged test used by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General),  1 S.C.R. 311:
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?
On the question of (1) whether there is a serious question to be tried, the Court found that the plaintiff’s claim met the “very low threshold” of not being “vexatious” or “frivolous.”
The plaintiff in the action cited to a line of cases that it contended stood for the proposition that a plaintiff need not show irreperable harm to obtain an interlocutory injunction. See, e.g., Diamant Toys v. Jouets Bo-Jeux Toys, 2002 FCT 384, 218 F.T.R. 245 (“I agree with the plaintiffs that they need not establish that they will suffer irreparable harm in order to obtain an injunction. . . [I]n copyright infringement cases it seems to me, when the copying is blatant, it is appropriate to consider a less stringent test of potential damage, than would otherwise be the case.”); and Gianni Versace SPA v. 1154970 Ontario Ltd. 2003 FC 1015 (August 29, 2003) (“Turning to the issue of irreparable harm, I agree, based on the reasoning of Nadon, J. in Diamant, that the Plaintiffs need not establish that they will suffer irreparable harm in order to obtain an injunction.”)
The Court distinguished the line of cases on the grounds that in each of these cases the arbiter “made a specific finding that there was an infringement.” The Court concluded that “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.”
Adoption of the standard sometimes applied in the S.D.N.Y.?
The Court delved into the merits of the claim and found that while there were “clear similarities” between the two products there were also “significant differences.” The Court completed this analysis ostensibly on the grounds that Canadian precedent could be read as creating two tests for a preliminary injunction in infringement cases: the first, as outlined above, where a plaintiff must bring a non-frivolous claim and show irreperable harm; and the second, similar to the standard sometimes associated with the Southern District of New York (but currently up for appeal in Salinger v. Colting), where a plaintiff must show a likelihood of success on the merits, but irreperable harm is presumed.
[E]ven 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.
The Court ultimately denied the motion for an interlocutory injunction finding that the plaintiff had not presented any evidence beyond assertions to show irreperable harm or that damages were not an acceptable remedy.