Date : 20000211
Docket : T-394-98
BETWEEN:
A. LASSONDE INC.
Plaintiff
- and -
ISLAND OASIS CANADA INC.
- and -
ISLAND OASIS FROZEN COCKTAIL COMPANY INC.
Defendants
REASONS FOR ORDER
McGILLIS J.
[1] The plaintiff A. Lassonde Inc. ("Lassonde" ) has applied for an interlocutory injunction to prevent the use of its registered trade-mark OASIS by the defendants Island Oasis Canada Inc. and Island Oasis Frozen Cocktail Company Inc. ("Island Oasis") in the Province of Quebec.
[2] OASIS was registered as a trade-mark in January 1965 in registration No. TMA 139,031 for use in association with, among other things, the wares"jus et breuvages de fruits". The services specified in the trade-mark registration for OASIS were "opération d"un établissement de restauration; opération d"un débit de boissons". Lassonde is the owner of the trade-mark OASIS, and has several other trade-mark registrations, including OASIS OASIS OASIS COLLECTION PREMIUM, for use in association with fruit juices and other food products. OASIS products are sold to retail customers in food stores. OASIS is a well-known mark in the Province of Quebec. Lassonde has always vigorously defended its OASIS trade-mark, and has acquired, by assignment, trade-mark registrations for pressure regulators for scuba equipment, manufactured tobacco products and valves for subterranean irrigation systems.
[3] The defendant Island Oasis Frozen Cocktail Company Inc. ("Island Oasis U.S.") is the owner of the trade-mark ISLAND OASIS for use in association with "all natural frozen concentrated cocktail bases". Its products are fruit based or dairy based frozen concentrates. Island Oasis U.S. also manufactures and distributes a patented shaver-blender machine with the ISLAND OASIS trade-mark. ISLAND OASIS products are not sold in their concentrated frozen form to the public in Canada, but rather are sold to food service wholesalers by Island Oasis Canada Inc. ("Island Oasis Canada"). The food service wholesalers in turn sell the products to food service establishments, such as restaurants. Those establishments mix the frozen concentrate ISLAND OASIS bases with ice in the ISLAND OASIS shaver-blender machine to make frozen drinks for sale to their customers. The ISLAND OASIS products are not "ready to consume"and are not sold to the public in their concentrated frozen form.
[4] The sale of ISLAND OASIS products began in Canada in 1985. The ISLAND OASIS trade-mark has therefore been used in Canada since 1985 in association with "frozen drink making machines and bases and concentrates for making such drinks". Since in or about June 1997, Island Oasis Canada has been the Canadian distributor for ISLAND OASIS products.
[5] In the fiscal years 1996-1997, 1997-1998 and 1998-1999, the respective sales of ISLAND OASIS products in Canada were $600,000, $1,800,000 and $3,100,000. During that same period, Lassonde"s sales of OASIS products in Quebec, measured in bottles, were 43,272,000 in 1996, 58,728,000 in 1997 and 64,524,000 in 1998.
[6] Extensive evidence was filed on the motion for an interlocutory injunction. I do not intend to summarize all of that evidence in my decision. However, in arriving at my decision, I have carefully reviewed and considered all of the evidence in the record, as well as the detailed oral and written submissions of counsel.
[7] In order to succeed on its motion for an interlocutory injunction, Lassonde must satisfy all three branches of the test outlined in the seminal case RJR-Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. In other words, Lassonde must establish that there is a serious issue to be tried, that it will suffer irreparable harm if an injunction is not granted, and that the balance of inconvenience lies in its favour.
i) serious issue
[8] I am satisfied that the issues raised by counsel for Lassonde in the action are not frivolous and vexatious, particularly given the evidence adduced on the motion concerning some of the alleged instances of confusion. In the circumstances, Lassonde has met the low threshold test prescribed in the jurisprudence and has established that there is a serious issue to be tried.
ii) irreparable harm
[9] The proper approach to be taken in determining the question of irreparable harm was outlined in Centre Ice Ltd. v. National Hockey League et al. (1994), 53 C.P.R. (3d) 34 (F.C.A.). In that decision, Heald J.A., writing for the Court, stated as follows at pages 52 to 54:
| Irreparable harm |
| This court has spoken often on this issue in recent years. In the case of Cutter Ltd. v. Baxter Travenol Laboratories Ltd. (1980), 47 C.P.R. (2d) 53 (F.C.A.) at p. 57, Chief Justice Thurlow relying on the view expressed by Lord Diplock in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 397 (H.L.) at p. 408, adopted the requirement of irreparable harm, "by which I mean harm in respect of which the damages recoverable at law would not be an adequate remedy", as an essential ingredient in establishing a claim for interlocutory injunctive relief. |
| The Cutter decision was followed by the Imperial Chemical lndustries Co. case in 1989 where it was said: "'The jurisprudence in this court establishes that the evidence as to irreparable harm must be clear and not speculative." (Imperial Chemical Industries PLC v. Apotex Inc. (1989), 27 C.P.R. (3d) 345 at p. 351, [1990] l F.C. 221, 26 C.I.P.R. 1 (C.A.).) Coming after the decision in Imperial Chemical was the Syntex decision in 1991: Syntex Inc. v. Novopharm Ltd. (1991), 36 C.P.R. (3d) 129 at p. 135, 126 N.R. 114, 51 F.T.R. 299n. In Syntex, this court held that the finding by the trial judge that the applicant would be likely to suffer irreparable harm was insufficient to warrant the granting of an interlocutory injunction. The use of the tentative expression "is likely" was not correct in view of the court's earlier jurisprudence supra. It was necessary for the evidence to support a finding that the applicant would suffer irreparable harm. |
| The next relevant decision was the Nature Co. case in 1992: Nature Co. v. Sci-Tech Educational Inc. (1992), 41 C.P.R. (3d) 359 at p. 367, 141 N.R. 363, 54 F.T.R. 240n (C.A.). In that case, Mr. Justice Stone, speaking for the court refused the request for an interlocutory injunction because "the evidence did not clearly show that [irreparable harm] would result". |
| On the evidence adduced herein, the learned motions judge found that the appellants' use of the trade name Center Ice was confusing to the public. In my view, this conclusion was reasonably open to him on this record. He then went on to state (A.B., vol. 2, p. 741 [ante, p. 48]): |
| As well, there is evidence, that this confusion has resulted in members of the public being discontent to find out that the plaintiff does not carry the products advertised by the defendants. Thus, it can reasonably be concluded that to allow the defendants to continue using the trade name Center Ice will result in confusion between the litigants' products and a loss of goodwill which the plaintiff cannot be compensated for in damages. |
| I am unable to agree that a finding of confusion between competing products necessarily leads to a loss of goodwill for which the plaintiff cannot be compensated in damages. A similar issue was considered by the Alberta Court of Appeal in Good Neighbour Fast Food Stores Ltd. v. Petro-Canada Inc. (1987), 18 C.P.R. (3d) 63 at pp. 63-4, 82 A.R. 79, 7 A.C.W.S. (3d) 148. Kerans J.A. speaking for the court said: |
| The suit here sounds in passing off, and the first category of harm alleged is diminution of goodwill as a result of confusion of names in the minds of reasonable persons. There is evidence in the material presented by the applicant to indicate that it is reasonable for him to allege the existence of confusion. That kind of confusion, as we have said in other suits, leads to loss of "name" goodwill the loss of which in the normal course is a kind of damage which, when suffered by a commercial firm in the ordinary course, is fairly readily calculable and therefore can be fairly compensated for in damages. |
| On the basis of that decision, which I find persuasive, even if loss of goodwill through the use of a confusing mark was shown, a case for irreparable harm would not have been made out because such loss could be fairly compensated for in damages. However, on this record, I cannot conclude that a loss of goodwill has been established. The respondent did not adduce any evidence to show that it had lost even one single sale as a result of the activities of the appellants. The respondent filed many affidavits to the effect that it had acquired a reputation for honesty, integrity and fairness. However, none of the evidence established that this reputation had been impeached or lessened in any way by the actions of the appellants. While the record contains some evidence of confusion, there is no specific evidence that such confusion had led any customer to stop dealing or to even consider not dealing with the respondent on future occasions. The only evidence relating to irreparable harm is contained in the affidavit of Bruce Jones, a director and officer of the respondent (A.B., vol. 1, p. 31). In para. 49 of that affidavit, Mr. Jones deposed: "I believe that unless the N.H.L is stopped from using the name "Center lce" within the trading area of Centre Ice here in Alberta irreparable harm to Centre Ice will result." The problem with this statement is that, it appears to be unsupported by any evidence leading to a conclusion that, as a consequence of this confusion, there was a loss of goodwill and a loss of distinctiveness. The Jones' affidavit makes reference to confusion in the market-place (para. 40). However, nowhere does it, refer to, let alone establish, a loss of goodwill as a result of the activities of the appellants. It appears that the allegation of irreparable harm in para. 49 is nourished only by the confusion which was established by the evidence. It cannot be inferred or implied that irreparable harm will flow wherever confusion has been shown. Accordingly, the learned motions judge erred in basing his finding of irreparable harm on this passage from the Jones' affidavit. Likewise, I believe that the learned motions judge erred in the passage quoted, supra, when, in effect, he inferred a loss of goodwill not compensable in damages from the fact that confusion had been proven. This view of the matter runs contrary to this court's jurisprudence to the effect that confusion does not, per se, result in a loss of goodwill and a loss of goodwill does not, per se, establish irreparable harm not compensable in damages. The loss of goodwill and the resulting irreparable harm cannot, be inferred, it must be established by "clear evidence". On this record, there is a notable absence of such evidence. |
| As in the case at bar, in the Nature case, supra, there was some evidence of actual confusion. However, that evidence did not go so far as to show that the confusion would cause irreparable harm to the respondent: see the Nature Co. case, p. 367, per Stone J.A. In the court's view, the frailty of that evidence was fatal to the submission of irreparable harm. In my view, the situation here is identical. |
[10] In his submissions on the question of irreparable harm, counsel for Lassonde focussed on the following areas: a permanent loss of market share, a loss of goodwill or reputation, a loss of distinctiveness, a dilution of its trade-mark, an actual loss of sales and an inability on the part of Island Oasis to pay an award of damages.
[11] At the outset, it is important to note that the evidence in the record does not establish that Lassonde suffered any actual loss of sales as a result of the sales of ISLAND OASIS products in Quebec. To the contrary, the evidence indicates unequivocally that, during the three year period in which there was a fivefold increase in Canadian sales of ISLAND OASIS products, Lassonde"s sales of its OASIS products increased significantly.
[12] In support of several of his submissions on irreparable harm, counsel for Lassonde relied on evidence concerning alleged instances of actual confusion. In three of the examples of alleged confusion, the evidence was hearsay tendered in the affidavit of Jean-Marc Bastien, a senior official of Lassonde. The three persons who were allegedly confused, namely Messrs. Pitre and Lachapelle and Ms. MacLeish, did not provide affidavits. As a result, the allegations of confusion could not be tested by opposing counsel in cross-examination. However, even if I were to accord weight to that hearsay evidence, none of the alleged instances of confusion resulted in the loss of a customer to Lassonde in Quebec. An instance of actual confusion was revealed in the affidavit of Mario Morin, a distributor who attempted to purchase ISLAND OASIS products from Lassonde. However, Mr. Morin stated in cross-examination that he had ordered OASIS products from Lassonde since February 1999 and that he remained one of its clients for OASIS products. In other words, despite Mr. Morin"s confusion, Lassonde retained him as a client for OASIS products. In the other two examples relied on by counsel, namely alleged confusion on the part of unidentified persons at a food fair in Toronto and confusion generally on the part of customers in bars ordering drinks, none of that evidence indicates that Lassonde lost any sales or any customers for its products.
[13] In support of his submissions on irreparable harm, counsel for Lassonde also relied on the affidavit evidence of Mr. Bastien and Jean Gattuso, the president of Lassonde. However, as in Centre Ice, that evidence does not establish that Island Oasis Canada"s activities have "impeached or lessened"Lassonde" s reputation or resulted in a loss of sales or customers. Indeed, as in Centre Ice, the many statements in those affidavits that Lassonde will suffer irreparable harm by a loss of permanent market share, a loss of goodwill or reputation, a loss of distinctiveness, or a dilution of its trade-mark are unsupported by any clear evidence. Despite the extensive volume of material filed by Lassonde on its motion, there is, as in Centre Ice, "a notable absence"of any clear evidence of irreparable harm.
[14] Counsel for Lassonde also submitted that irreparable harm would result from a potential inability of Island Oasis Canada to pay damages. However, there is not a scintilla of evidence in the record to indicate that Island Oasis U.S. would have any such difficulty. As a result, the submission that irreparable harm arises from an inability to pay damages is utterly without merit.
[15] Having considered all of the evidence in the record and all of the submissions of counsel, I have concluded that Lassonde has failed to adduce any clear and compelling evidence to establish that it would suffer irreparable harm as a result of the activities of Island Oasis.
[16] Given my conclusion on the question of irreparable harm, it is unnecessary for me to consider the balance of inconvenience. It is also unnecessary for me to address other arguments made by counsel for Lassonde concerning steps that could be taken by Island Oasis to reduce any confusion in the marketplace.
[17] The motion is dismissed. Costs of the motion are payable to the defendants under Column IV of Tariff B in any event of the cause. Those costs shall be assessed in the upper range of Column IV.
| D. McGillis |
| Judge |
OTTAWA
February 11, 2000