The Guardians Case/ A Cautionary Tale in Seeking Interlocutory Relief

When two of Canada’s largest providers of inpatient and outpatient mental health and addiction services clashed over the use of the term “GUARDIANS,” the plaintiff sought an interlocutory injunction from Federal Court. This decision highlights the formidable legal hurdles applicants face. Schlegel Health Care Inc. v. Edgewood Health Network Inc. 2025 FC 1639

The Background of the Dispute 

The plaintiffs and the defendant are business competitors and are the two largest providers of inpatient and outpatient mental health and addiction services in Canada. They offer services and programs specifically targeted to “guardians” (first responders, military personnel, and veterans) and their families

In the statement of claim, the plaintiffs sought a declaration that they are the owner and proprietor of the “common law trademark GUARDIANS” for their services. They claim they developed the “Guardians Program” to provide mental health and addiction treatment for first responders, military personnel, and veterans, and have used the GUARDIANS mark since 2017 to market these services.

The defendant claims to have opened its first guardians-only facility in 2021 in Peterborough, Ontario, which provides programs exclusively to the guardians population. The defendant has opened additional guardians-only locations in Nanaimo, British Columbia and Nictaux, Nova Scotia.

The Claim for an Interlocutory Injunction

The plaintiffs seek an interlocutory injunction to restrain the defendant from:

a. directing attention to their goods, services and business in such a way as to cause or be likely to cause confusion with the goods, programs, services and facilities, and business of the plaintiffs, contrary to section 7(b) of the Trademarks Act, 

b. passing off its goods, programs, services and facilities as and for those of plaintiffs, contrary to section 7(c) of the Trademarks Act and common law,

and other related claims.

Both parties filed extensive affidavit evidence, but the Judge was critical of the plaintiff’s evidence since although it showed that the word “Guardians” is used with the “Guardians Program”, the word GUARDIANS is not used on its own, nor is it distinguished from the surrounding text.

There was a conflict in the evidence concerning when the plaintiffs and the defendant started to use the word GUARDIANS in a distinctive manner. 

The Test for Granting an Interlocutory Injunction

The purpose for granting an interlocutory injunction is to protect the plaintiff against injury because of the violation of a right for which the plaintiff could not be adequately compensated by an award of damages. The interlocutory injunction preserves the status quo concerning the plaintiff’s claim until trial in such a case. A condition precedent to the grant of an interlocutory injunction is an undertaking from the plaintiff to assume responsibility for the damage sustained by the defendant if the plaintiff is ultimately unsuccessful on the merits when the action is heard.

The test for granting an interlocutory injunction is well established. The plaintiffs must show: (i) a serious issue to be tried in the underlying claim; (ii) they will suffer irreparable harm if an injunction is not granted; and (iii) the balance of convenience favours granting the injunction.

If a mandatory interlocutory injunction is sought the criterion for assessing the strength of the applicant’s case is whether the applicant has shown a strong prima facie case. A mandatory injunction directs the defendant to undertake a positive course of action, such as taking steps to restore the status quo, or to otherwise restore the situation back to what it should be, which is often costly or burdensome for the defendant and which equity has long been reluctant to compel.

The Judge was satisfied that the true nature of the injunction sought by the plaintiff’s was a mandatory injunction because the defendant would have to take positive steps to comply. The plaintiff’s had to establish a strong prima facie case, meaning there is a strong likelihood they will succeed.

The Plaintiff’s Case

The Judge said the Federal Court, because of constitutional constraints, only has jurisdiction to consider claims for statutory passing off under the Trademarks Act and no jurisdiction to consider claims for common law passing, which is substantially broader in scope and more flexible. Only the courts of the provinces have jurisdiction to hear such claims.

To succeed with a claim for statutory passing off the plaintiff must first prove possession of a valid and enforceable trademark, whether registered or unregistered, at the time the defendant first began directing public attention to its own goods and services. This requires, given the definitions of “trademark” and “use” in sections 2 and 4 of the Trademarks Act, that the mark has been used by the plaintiff to distinguish its wares or services from those of others.

The Judge’s Assessment of the Plaintiff’s Case

On a preliminary assessment of the evidence, the Judge was not satisfied that the plaintiffs had established a strong prima facie case for passing off under subsection 7(b) of the Trademarks Act. The evidence did not demonstrate sufficient use for an unregistered mark, nor sufficient goodwill in the GUARDIANS mark to support a passing off claim. While some confusion with EHN GUARDIANS may be arguable, the evidence of resulting harm is weak and speculative.

In addition, the Judge said the validity of the plaintiffs’ claim to an unregistered mark in the word GUARDIANS was disputed. It is settled that where an interlocutory injunction is sought to enforce an intellectual property right and the validity and existence of that right is seriously contested, the Court will be hesitant to grant the injunction.

When the Judge reviewed the plaintiffs’ claim of irreparable harm, she was unimpressed. She said there was insufficient evidence to support the irreparable harm claim. In any event, if harm was established it can be adequately calculated and compensated in damages. The evidence of damage was speculative and minimal, which weighs against finding irreparable harm.

Having concluded that the plaintiffs had not satisfied the first two branches of the injunction test, the Judge concluded the balance of convenience favours the defendant.

Comment

The decision is representative of the difficulty of obtaining an interlocutory in the Federal Court. Because such proceedings can become costly quickly, considerable care and attention must be given to the prospect of bringing them. The applicant must also consider its potential liability under its undertaking to assume responsibility for the damage sustained by the defendant in the event that the plaintiff is ultimately unsuccessful on the merits when the action is heard.

If you have questions, please contact me at mckeown@gsnh.com 

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1700 

Toronto, Ontario MSG 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances. 

A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.