The B.C. Supreme Court has temporarily barred Adidas Canada from operating a store under its TERREX brand in Kitsilano.
The move comes amid a dispute with Vancouver-based outerwear and equipment maker Arc’teryx, who claims the global activewear brand is infringing its trademark.
The injunction granted Tuesday only applies to Adidas’ Kitsilano store, pending the outcome of a court dispute over the trademark.
An Adidas representative told Global News Wednesday the company is “disappointed in the preliminary decision” but looks forward to defending its case in a full proceeding.
According to the ruling, Adidas registered its TERREX trademark in Canada in 2010, and opened its TERREX store at 2235 W. 4th Avenue in January 2023, several doors down on the same block from an Arc’teryx retail location.
Arc’teryx moved into that location in November 2022 after nine years at another location two blocks away.
The Adidas storefront bears the TERREX name along with the company’s distinctive three-bar logo, but not the Adidas name.
Arc’teryx claims the logo resembles the stylized “A” in its own logo, and alleges the combination creates “customer confusion” between the brands. The company alleges TERREX employees told private investigators it hired that at least 100 or more people came into the store mistaking it for Arc’teryx.
In its own filings, Adidas denied all allegations and the legal basis of Arc’teryx’s pleadings. It disputed the accuracy and admissibility of the private investigators’ evidence and produced evidence from its own market research specialist who found “clear evidence that exposure to the TERREX mark and logo does not cause confusion with the mark ARC’TERYX.”
In granting the interlocutory injunction, Justice Nigel Kent found Arc’teryx’s claim to be neither frivolous nor vexatious, ruling “there are many serious issues to be tried.”
“When one places an image of the Performance Bars and TERREX trademarks beside an image of the ARC’TERYX trademark, the similarity between the two and the potential for confusion is immediately obvious,” he wrote.
Kent found that Arc’teryx holds a a trademark registration in international class 35 and exclusive right for retail operations under its brand, and that while Adidas has applied for the same registration for its TERREX brand, it has not yet been granted. He further noted the global giant chose not to include the name “Adidas” in its TERREX branding, despite being located on the same block as Arc’teryx.
Stressing that he was not ruling on the merits of the case itself, which must be determined at trial, he said as the holder of the class 35 registration, Arc’teryx was “entitled to expect the benefits of the resulting statutory exclusivity and protection, and this is a factor that very strongly militates in favour of the injunction in this case.”
In granting the injunction, he further ruled Arc’teryx could potentially suffer irreparable harm, accepting the company’s submission that brand “distinctiveness, once lost is virtually impossible to regain” and that “the impact on loss of emotional brand equity would be extremely difficult to quantify.”
Kent also rejected Adidas’ argument that it could be forced to close the W. 4th Avenue store if an injunction was granted.
However, the judge also declined to issue as broad an injunction as Arc’teryx was seeking, applying it only to Adidas’ Kitsilano store, and not to Adidas’ online business.
He warned Arc’teryx that it must proceed with the full lawsuit and not allow the temporary injunction to become de facto permanent, ordering the two parties to “immediately” secure a date for trial.