In Sleep Country Canada Inc. v. Sears Canada Inc., Sleep Country Canada Inc. (“Sleep Country”) was granted an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent Sears from using their slogan “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE ELSE” while the trade-mark infringement litigation (in which Sleep Country claims Sears’ slogan infringes on Sleep Country’s trade-marked slogan of, “WHY BUY A MATTRESS ANYWHERE ELSE”) is ongoing.
The three-part test set out in RJR-MacDonald v. Canada (Attorney General) was ultimately satisfied. The heart of the case was not on whether this was a serious issue or on the balance of convenience, but rather, on whether irreparable harm was established.
The Court found in favour of Sleep Country’s arguments that confusion, depreciation of goodwill, and loss of distinctiveness would result, as well as, a loss of sales in the minimum 18-24-month period between the time of this hearing and the determination of the infringement action. Clear non-speculative evidence of damages that cannot be quantified and compensated was established through the use of expert evidence by Sleep Country (para 15). The Court agreed that isolating the impact of the slogan from all other market forces was not possible (para 152).
The almost identical wording, which conveyed the same idea, aimed at the same market of consumers, for the same products, being advertised in the same ways, would likely result in a loss of sales from the erosion of the awareness and familiarity of the slogan to Sleep Country (para 94). This is because associations would be created between Sears’ slogan and Sleep Country’s goodwill, brand, and reputation (paras 40 and 117). Thus, the test for confusion – the first impression by the average costumer – was satisfied (para 83). Beyond this, these mental connections result in a loss of distinctiveness for the brand of Sleep Country.
The test for depreciation of goodwill was also satisfied: the slogans were similar, the original slogan was sufficiently well-known to possess goodwill, the use of the similar slogan by Sears is likely to have an effect on that goodwill, and the likely result of that linkage is the depreciation of the value of Sleep Country’s slogan’s goodwill (para 109).
Sleep Country’s slogan has been described as being an iconic “cornerstone of its branding and marketing” with national recognition (para 16), and once the linkage between the slogan and Sleep Country is lost, it is arguably almost impossible to regain, repair, or recapture (para 56). After all, Sleep Country has been using its slogan since 1994, while Sears’ slogan was created in 2016 and was part of a larger multi-faceted marketing plan (para 19).
In the author’s view, this case provides both an excellent resource for the jurisprudence relevant to interpreting irreparable harm and insight into the significant role expect evidence plays in establishing irreparable harm. More significantly however, this case may signal the beginning of a shift away from interlocutory injunctions being only rarely granted in a trademark infringement context to a broader approach. This means that interlocutory injunctions may not only be rising to the forefront of corporate consciousness as an avenue to protect their interests – the Court may also be recognizing and affirming interlocutory injunctions as a viable avenue to be pursued while one is engaged in lengthy litigation.
Please see Gilbertson Davis LLP’s related practice areas webpages on injunction disputes, brand protection, and intellectual property disputes.
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