Costco’s Injunction Application Fails

Costco must have been pretty worried about the impact of a competitor’s mark PRICECO WAREHOUSE for retail sales. They assert that the competitive mark is confusing with their marks PRICE COSTCO and COSTCO. Costco opposed the mark in the Trade-marks Office in 2005, and then launched a trade-mark infringement lawsuit in 2007 against the competitor, seeking an injunction restraining the use of the competing mark. They even tendered expensive survey evidence to show the court how serious the risk of confusion was. The problem? The competitor hadn’t even started using the mark yet.

In Price Costco International, Inc. v. Welcome Warehouse Ltd., 2007 BCSC 1227 (CanLII) the judge was clear that:

“There has been no evidence of actual use of the PRICE WAREHOUSE mark, or anything similar, and no evidence of intention to use it until the Registrar rules in the defendant’s favour. On the contrary, the defendant has undertaken in writing not to use any such mark until that time.”

The lessons?

  • First, in high-stakes pre-emptive injunction application where there is no actual infringing use, there must at least be a “real probability of passing off or infringement”; that was not the case here.
  • Court is not the only option for fighting this kind of battle; the opposition procedure in the Trade-marks Office had yet to run its course, so those alternatives must be weighed.
  • Even though their application failed, Costco may have proved its point; it has done its homework and will be ready if and when the competing mark is ever actually used, provided their survey evidence is not out of date by then.

Calgary – 20:11 MST


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