Canadian Federal Court of Appeal Confirms That Irreparable Harm Must Be Demonstrated in Injunction Cases
| DOI | 10.1093/jiplp/jpn073 |
| Date | 14 April 2008 |
| Pages | 360-361 |
| Year | 2008 |
| Published By | Oxford University Press |
interpreted to somehow give federal courts jurisdiction
over such claims.
Practical significance
Although it is well settled that district courts have juris-
diction over copyright infringement claims only where the
claims are based on a registered copyright, the Second
Circuit’s decision applies this general rule to the class
action context and makes it clear that each member in the
class must own a registered copyright for the district
court to exercise jurisdiction over the class as a whole. By
limiting class members to owners of registered copyrights,
the court’s decision effectively bars owners of unregistered
copyrights from participating in class-action infringement
suits.
Naresh Kilaru
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP,
Washington DC
Email: naresh.kilaru@finnegan.com
doi:10.1093/jiplp/jpn061
Advance Access Publication 14 April 2008
General
BCanadian Federal Court of Appeal
confirms that irreparable harm must be
demonstrated in injunction cases
Hyundai Auto Canada v Cross Canada Auto Body Supply
(West) Limited (2008 FCA 12), Canadian Federal Court of
Appeal, 10 January 2008
In Hyundai Auto Canada v Cross Canada Auto Body
Supply (West) Limited, the Canadian Federal Court of
Appeal confirmed that, in the absence of clear evidence
of irreparable harm which cannot be compensated in
damages, it will refuse to grant interim injunctions.
Legal context
In recent years, Canadian courts have generally treated
interim injunctions as an extraordinary, discretionary, and
equitable remedy to be granted sparingly. To obtain such
relief, the three-part test set out by the Supreme Court of
Canada in RJR—MacDonald Inc. v Canada (Attorney
General) must be satisfied. Under that test, a plaintiff
must demonstrate that (1) on a preliminary assessment
of the merits of the case, there is a seriously triable issue;
(2) without an interim injunction the plaintiff will
suffer irreparable harm which cannot be compensated by
damages; and (3) the balance of convenience must favour
granting the injunction, after assessing which of the
parties would suffer greater harm from the grant or
refusal of the remedy pending a decision on the merits.
As a result of the Federal Court of Appeal’s decision in
Centre Ice Ltd v National Hockey League, the Federal Court
requires exceptionally clear and compelling evidence that a
plaintiff will suffer irreparable harm under the second
branch of the test, not that it might or could suffer irrepar-
able harm if no interim injunction is granted, even in the
face of blatant infringement. The evidence of irreparable
harm must be clear and not speculative. If damages are a
viable remedy, no injunction will be issued.
Facts
Hyundai Auto Canada, a division of California-based
Hyundai Motor America, owned the Canadian regis-
tration for the trade mark HYUNDAI. All Canadian sales
of HYUNDAI-branded vehicles were made through
Hyundai Auto Canada, but the vehicles are manufactured
by Hyundai Motor Company of Korea. Cross Canada was
a reseller of automotive parts and accessories, including
parts for Hyundai automobiles.
Hyundai Auto Canada (‘hereafter Hyundai’) sued Cross
Canada for trade mark infringement and passing off,
alleging that it was importing and selling automobile
parts that bore Hyundai’s trade marks but were not sold
by Hyundai. In its defence, Cross Canada attacked the
validity of the HYUNDAI trade mark. It also asserted that
the HYUNDAI-branded parts that it was offering for sale
were genuine parts which it had acquired in Canada from
a single supplier (whom it refused to name).
Hyundai brought a motion seeking an interim injunc-
tion to restrain Cross Canada from using the HYUNDAI
trade mark. It adduced no evidence that the parts offered
for sale by Cross Canada were not genuine Hyundai parts,
or that they were defective or inferior. In fact, Cross
Canada provided evidence that the parts were made by
the same company that supplied Hyundai and that the
HYUNDAI-branded products it sold were the subject of
warranty protection. Hyundai nonetheless argued that the
conduct of Cross Canada was likely to cause confusion in
Canada between Cross Canada’s products and those of
Hyundai.
The Federal Court refused an injunction, rejecting
Hyundai’s evidence: it was pure speculation that the parts
sold by Cross Canada were inferior and would damage
the goodwill attributed to the HYUNDAI trade mark.
Hyundai appealed.
A unanimous panel of the Federal Court of Appeal
affirmed the lower court’s decision and denied Hyundai’s
appeal. The Court confirmed its previous jurisprudence
that, in order to obtain interim relief against the use of a
trade mark, a plaintiff must clearly demonstrate that it
Journal of Intellectual Property Law & Practice, 2008, Vol. 3, No. 6360 CURRENT INTELLIGENCE
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