Amer Sports Canada Inc. v. Adidas Canada Limited, 2024 BCSC 3
The Supreme Court of British Columbia (the "Court") recently made a noteworthy ruling in an ongoing trademark dispute involving two well-known companies in the outdoor apparel industry. Arc'teryx Equipment, a Vancouver-based outdoor gear leader, has successfully obtained an interlocutory injunction against adidas Canada. The Court order prevents adidas Canada from using the TERREX name for its store on West 4th Avenue in Kitsilano, Vancouver, pending the resolution of Arc'teryx's legal claim at trial.
Background
Amer Sports Canada Inc., operating as Arc'teryx Equipment, holds a Canadian trademark registration in international class 35 for ARC'TERYX in association with retail store services and online retail store services in Canada.
adidas Canada is a wholly owned subsidiary of adidas AG. adidas AG holds several Canadian trademark registrations, including for the TERREX mark. However, the TERREX registration is not in association with retail services. Certain lines of Adidas gear feature the TERREX mark either standalone or in conjunction with the registered Performance Bars (a signature three-stripe design arranged in a triangle, resembling the letter "A"), as pictured below:
In January 2023, adidas Canada opened a store on the same block in Kitsilano as an existing Arc'teryx retail store. On February 13, 2023, Arc'teryx initiated a lawsuit against adidas Canada. Central to the dispute is the storefront signage at the Adidas store, which combines its Performance Bars with the TERREX mark, notably omitting the ADIDAS trademark. Arc'teryx contends that this combination closely resembles ARC'TERYX, making it likely to be confused with its services and business, given the proximity and similarity of the stores' signage. This forms the basis of Arc'teryx's allegations of trademark infringement and depreciation of its brand's established reputation and goodwill.
In March 2023, Arc'teryx sought an interlocutory injunction to restrain adidas Canada from displaying the TERREX name on its retail stores, including the Kitsilano location, and in any online retail store services.
Interlocutory Injunction Test
The Court applied a three-pronged test to determine whether the interlocutory injunction should be issued. This involved assessing: (1) the presence of a serious question to be tried; (2) the likelihood of irreparable harm to the party seeking the injunction if it is not granted; and (3) the balance of convenience to determine which party would suffer greater harm from the injunction's grant or refusal.
The Decision
The Court's decision favored Arc'teryx, granting an interlocutory injunction that prohibits adidas Canada from using the TERREX name at its Kitsilano store until the trial. The ruling was based on the existence of a serious issue to be tried, the potential for irreparable harm to Arc'teryx if the injunction were not granted, and the balance of convenience favoring Arc'teryx as the registered trademark holder. Notably, the scope of the injunction was limited to the Kitsilano store location.
In assessing the balance of convenience, the Court noted that Arc'teryx is the sole party with a class 35 trademark registration in association with retail store services. While adidas Canada has filed a class 35 application for its TERREX brand, it has not yet been granted. As such, Arc'teryx has the exclusive right to use its trademark for retail store services, which outweighs any potential inconvenience to adidas Canada. However, the injunction is set to expire if and when the adidas Canada application for TERREX is granted.
Commentary
While the outcome of the trademark proceeding is yet to be determined, the issuance of an interlocutory injunction in favor of Arc'teryx is noteworthy, especially given the high bar for granting such injunctions. This case illustrates the importance of applying for a registered trademark early, and the substantial benefits that come with owning a registered trademark. In competitive industries like outdoor apparel, a registered trademark (as opposed to a pending application or a common law mark) serves not just as a protective measure for brand identity, but also provides the owner with a stronger foundation in legal disputes.
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