Arc'teryx wins injunction against Adidas over Terrex store in Vancouver

Signage on a store on West 4th Avenue in Vancouver that has sparked a legal battle is shown in this photograph.

Canadian outdoor apparel company Arc'teryx has won a temporary injunction against footwear giant Adidas, blocking the brand from using the name Terrex for its outerwear-focused store in Vancouver.

British Columbia Supreme Court Justice Nigel Kent sided with Arc'teryx after the company argued Adidas was trading on the reputation of the Arc'teryx brand and logo when it opened its Terrex store on the same block in the city's Kitsilano neighbourhood.

The judge found that while other Adidas stores, including in the Vancouver area, bear the company's name on their signs, the West Fourth Avenue shop omits the name Adidas from its signage, opting instead for the company's triangular logo followed by the word Terrex.

Arc'teryx argued the logo resembled the stylized "A" in its own branding, and claimed the positioning of letters in the sign could be read as "A Terrex," causing confusion among shoppers.

The company even cited evidence from private investigators who allegedly spoke with employees at the Terrex store, who reportedly told them "at least 100 or more people came into the store mistaking it for the Arc'teryx store down the road," according to the judge's decision Tuesday.

"When questioned by the court during the hearing, whether it might be prepared to resolve matters by inserting the trademark 'ADIDAS' as part of the storefront banner in order to avoid possible confusion with their competitor down the street, Adidas Canada politely declined," the judge said.

Adidas Canada disputed the accuracy and admissibility of the supposed employee interviews, and said its own marketing specialist conducted a survey showing "clear evidence that exposure to the Terrex mark and logo does not cause confusion with the mark Arc'teryx," according to the decision.

Arc'teryx, which is headquartered in North Vancouver, filed a civil claim against Adidas Canada in B.C. Supreme Court in February 2023, alleging trademark infringement and asking the court for an interlocutory injunction against Adidas to prevent "irreparable harm" to the company.

As part of the claim, Arc'teryx is seeking a permanent injunction against all use of the Terrex name for physical stores and online retail services. The Canadian company is also seeking exemplary and punitive damages, as well as a full accounting of alleged "wrongfully made profits."

Adidas Canada filed a response to the civil claim in March, denying Arc'teryx's allegations. Applications from both sides of the argument comprise some 13 volumes, which "stacked on top of each other, were almost four feet high," the judge noted.

The hearing of the applications was concluded in November and a judgment was reserved pending a trial.

"Arc'teryx is entitled to demand that its trademark rights, and all associated intangible but valuable goodwill, be protected on at least interlocutory basis," the judge wrote in granting the provisional injunction. "Time will presumably tell whether David will defeat Goliath at trial."

Adidas Canada claimed in its affidavits and submissions to the court that it might be forced to close its Vancouver Terrex store and dismiss the store's employees if the injunction was granted.

"It says it is attempting to establish a new line of stores for this type of outdoor apparel/equipment using its trademarks without the accompanying name Adidas," the judge said.

"Whether the store will close remains to be seen, but it does seem at first instance that any such reaction would be excessive while their application for a class 35 trademark remains pending and some relatively minor modifications in the interim might allow the store to continue to operate."

The injunction preventing the use of the Terrex name applies only to the West 4th Avenue store and not to any online retail operations, the judge said, noting the similarity between the two signs on the same block and the potential for confusion is "immediately obvious."

The injunction also requires both companies to immediately secure a trial date to hear the trademark dispute and it will be rescinded if Adidas is successful in its pending application for a Terrex trademark.