All posts by Michael D. Crinson

About Michael D. Crinson

Email: [email protected]
Tel: +1 647 288 9529
Michael D. Crinson is a Partner at Dimock Stratton LLP where he practises exclusively in the field of intellectual property, including patent, trademark, copyright and trade secrets. He is one of Canada’s most experienced patent trial counsel. He has significant experience coordinating litigation in Canada with related litigation in other jurisdictions and has been described in IAM Patent 1000 as a versatile IP expert with more experience than some partners twice his age. His practice includes technology in the biotechnological, chemical, mechanical, electrical, bio-technical and bio-medical arts. He is also involved in the Intellectual Property Institute of Canada (IPIC) and AIPPI. In his spare time he is a soccer referee.

Injunctions in Canada Can Reach Far and Wide

Intellectual property rights (IPRs) provide the holder with a monopoly and control over competitors use of a particular technology, trademark, creation or trade secret. Accordingly, injunctive relief for an IPR holder is an extremely useful and important remedy to prevent infringement of their IPRs. In Canadian Courts this is recognised and the Courts have shown a willingness and flexibility where necessary to use the power of the injunction to ensure compliance with IPRs. This includes the permanent injunction, interlocutory injunctions, injunctions that extend beyond the geographical bounds of Canada, and injunctions against entities that are not per se infringing IPRs but are, even inadvertently, facilitating that infringement.

Most IPRs are embodied in statutes in Canada and those statutes include a statutory authority for the grant of an injunction in cases of infringement of the IPR. The Patent Act[1] authorises the Court, on the application of either a plaintiff or defendant in an action for infringement to “make such order as the Court…sees fit restraining or enjoining…further use, manufacture or sale”. Broad language to similar effect is found in the Industrial Design Act[2]. The Trademarks Act[3] seems broader since “any interested person” may apply for an injunction where something has been done contrary to the Act. The broad discretion of Courts is quite explicit in the wording of the Copyright Act which states that the owner of copyright is entitled to an injunction as a remedy for infringement of copyright and may be entitled to an injunction for infringement of moral rights[4]. The Copyright Act goes even further than other Canadian intellectual property statutes in that it authorises what are known as wide injunctions[5], that is an injunction to prevent infringement of a copyright work that has not been infringed where it is granting an injunction in respect of a copyright work that has been infringed provided the other work that will be the subject of the wide injunction has the same copyright owner (or person with an interest) and the plaintiff satisfies the court that the defendant will likely infringe the copyright in those other works unless an injunction issues. The wide injunction can even apply to works that were not owned by the plaintiff at the time proceedings were commenced and even to works that did not exist at the time the proceedings were commenced. Clearly, the Courts are granted a broad discretion to award the equitable remedy of an injunction in order to remedy a wrong in relation to an IPR.

While injunctions are usually considered discretionary the Federal Court of Appeal (which most frequently hears intellectual property matters) has said that it is only conduct of the party claiming an injunction that can bar interlocutory relief. The refusal to grant a permanent injunction after a determination of infringement  has been likened to “the imposition of a compulsory licence…[in] the absence of legislative authority”[6]. In one recent patent infringement lawsuit the Federal Court acknowledged the granting of an injunction is discretionary but the injunction “will be commonly granted for infringement or threatened infringement, unless there is some equitable reason not to do so, such as acquiescence, long delay, lack of clean hands, unconscionability, or triviality”[7]. The Court continued by acknowledging “the granting of injunctive relief is not only to the benefit of a successful party but it is issued by the Court in the public interest to ensure the enforceability of the Canadian patent system.

While an injunction has almost always been granted following a finding of infringement there has been an exception in the Federal Court of Canada. In 1993, the Federal Court declined to grant a permanent injunction in the unique circumstances faced by the Court in that case[8]. In that case the Court was faced with allegations of a delay by the plaintiff of eight years in commencing the action. While this delay was not mentioned by the Court as a basis for refusal of the injunction. The factors the Court did explicitly consider in its refusal of the injunction were: (1) the patent at issue had only eighteen months remaining on its term; (2) the plaintiffs had never practised the invention in Canada nor employed anyone to practice the invention in Canada; and (3) the defendants would suffer hardship as would their “innocent employees in these hard economic times which still appear to be a full blown recession”. Clearly the Court considered factors beyond either parties’ control and considered the social effects of the injunction.

Refusal of a permanent injunction in an intellectual property matter is extremely rare. While a factor in the above example was the fact that the claimant did not practice the invention in Canada, more recent case law shows that a non-practicing entity can obtain a permanent injunction in Canada. In the Uponor case[9] decided this year the Court granted a permanent injunction to a non-practising entity. The permanent injunction was granted notwithstanding evidence suggesting the plaintiff was aware of the infringement for about six years prior to commencing a lawsuit, that the plaintiff was not a competitor for the product of the patented process in Canada or North America, and that the plaintiff does not practice the invention in Canada or North America. Thus, it seems a permanent injunction will only be denied in exceptional situations such as when the right holder has acquiesced or there has been long delay or it would be unconscionable to grant the injunction.

Injunctions prior to a final determination on the merits are more difficult to obtain than a permanent injunction and must satisfy a long standing three part test. The three part test involves consideration of: (1) the strength of the plaintiff’s case; (2) whether the plaintiff will suffer irreparable harm; and (3) the balance of convenience. The Ontario Court of Appeal has explained that the purpose of this test is really to balance the risks to the parties, i.e. if the injunction is not granted will the plaintiff’s rights be so impaired that it will be impossible to provide an adequate remedy at trial or if the interlocutory injunction is granted will the defendant suffer such harm from being enjoined in what proves to be unlawful conduct. It is for this reason that if an interlocutory injunction is granted, ordinarily the plaintiff will be required to provide an undertaking in damages to the defendant to compensate them in case the interlocutory injunction later turns out to have been inappropriate.

The Canadian Courts have utilised a series of variations on the interlocutory injunction in order to assist the resolution of IPR disputes. One form is the Anton Piller order which is tantamount to a civil search warrant to find and preserve evidence for which there is a real threat of destruction or dissipation. The party seeking the Anton Piller order needs to establish an extremely strong prima facie case, clear evidence the defendants have the evidence and a real threat the evidence will be destroyed or dissipated[10]. Norwich orders, also known as equitable bills of discovery, are another form of discretionary injunction. The Norwich order compels a non-party to produce information to the applicant where an applicant has a bona fide claim against another party but requires the information from the non-party in order to identify the wrongdoer or violator of the IPR.

Mareva injunctions have been used by the Court to secure assets that may be used to satisfy a judgment and prevent them from being removed from the jurisdiction or otherwise dissipated. Applications for such orders are usually made ex parte and in addition to requiring a showing of a strong prima facie case will also require from the applicant full and frank disclosure of relevant facts. In Equustek[11] the plaintiff applied to the Court for an interlocutory injunction prohibiting the defendants from using certain confidential information and trademarks of the plaintiff and for a limited Mareva injunction. Initially the court granted the interlocutory injunction but denied the Mareva injunction concluding that “the plaintiffs have failed to show a good reason why the court should deprive the defendants of control of their assets before the plaintiffs have succeeded at trial”. The defendants in that case promoted and sold their products exclusively over the internet.

When the defendants failed to comply with this interlocutory order the plaintiffs brought a second application for a Mareva injunction. In particular, the defendants had not produced the ordered information, their websites did not comply with the earlier order, carried on business or moved outside the jurisdiction of the Court and had sold some of their assets within the Court’s jurisdiction. On this second application the Court considered not just the dissipation of the assets sought to be frozen but also the protection of the court’s own process from abuse. The Court granted a Mareva injunction in these new circumstances “especially given the ephemeral nature of intellectual property which once disseminated likely cannot be retrieved and whose value diminishes as a result”. The Mareva injunction prohibited the defendants from dealing with any of their assets worldwide with the exception for retaining counsel and meeting ordinary living expenses.

That same Equustek[12] proceeding has also led to a worldwide injunction against non-parties, Google Inc. and Google Canada Corporation, in a decision which is now scheduled to be appealed to the Supreme Court of Canada. The proceeding had progressed such that the defendants had failed to comply with various court orders, had moved their business from being in Vancouver to operating as a virtual company and proliferated their network of websites through which they advertised and sold the allegedly infringing product. The application was for an injunction to compel Google to remove the defendants’ websites from its Google search results. Google resisted the injunction but admitted it could remove websites from its search engine results and routinely does so in various situations. After concluding that the British Columbia court had jurisdiction and that California was not a more appropriate forum to hear the application, the Court went on to consider whether the injunction should be granted.

The two main issues on whether an injunction should be granted were whether this injunction could be issued against a non-party, and whether the Court could make an order with worldwide effect. The Court after noting that there were exceptions in which injunctive relief can be granted against a non-party, concluded that injunctions can be issued when the court considers it just and convenient to do so on terms and conditions the court thinks just. The Court concluded that in order to preserve the effectiveness of their judgments, they must “adapt to new circumstances”. Applying this consideration, the Court commented that it must “adapt to the reality of e-commerce with its potential for abuse by those who would take the property of others and sell it through the borderless electronic web of the internet”. As a result the Court granted an interim injunction compelling Google to block the defendants’ websites from Google’s search results worldwide.

While courts in Canada have always recognised their discretion to award an injunction to assist a holder of IPRs there appears to be a greater willingness to grant injunctive relief to preserve the integrity of the Court process (including fact finding, evidence and asset preservation) and the effectiveness of judgments. This includes injunctions against parties and non-parties and injunctions with worldwide effect. As commerce takes on a more global or international scale it seems likely the possibility of injunctive relief to facilitate a court’s process will increase in Canada.

[1] section 57

[2] section 15.1

[3] section 53.2

[4] section 34

[5] section 39.1

[6] R. v. James Lorimer & Co., [1984] 1 F.C. 1065 at 1073 (C.A.)

[7] Eurocopter v. Bell Helicopter Textron Canada, 2012 F.C. 113 at para. 397

[8] Unilever PLC v. Proctor & Gamble Inc. et al, (1993) 47 C.P.R. (3d) 479 F.C.T.D.)

[9] Uponor AB v. Heatlink Group Inc. et al., 2016 FC 320

[10] Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36

[11] Equustek Solutions Inc. v. Jack, 2012 BCSC 1490

[12] Equustek Solutions Inc. v. Jack, 2014 BCSC 1063