Date: 20000824
Docket: T-1161-00
OTTAWA, ONTARIO this 24th day of August 2000.
BEFORE: The Honorable Justice Dolores M. Hansen
BETWEEN:
DOLE FOOD COMPANY INC.,
DOLE FOODS OF CANADA LTD.
Plaintiffs
Defendants by Counterclaim
- and -
NABISCO LTD.
Defendant
Plaintiff by Counterclaim
REASONS FOR ORDER
Delivered orally by conference call on Friday, August 18, 2000.
[1] Given the importance to the parties of having a decision within a very short time frame I do not propose to review, in detail, the facts.
[2] This is a motion for an interim injunction pursuant to Rule 374 of the Federal Court Rules, 1998.
[3] Both parties to this litigation are about to launch in Canada virtually identical products, described as a single serve processed fruit product in a clear plastic cup, under the identical trade-mark "Fruit Bowls".
[4] On July 10, 1998, Nabisco Ltd. ("Nabisco") applied in Canada to register the trade-mark "Fruit Bowls" which issued to registration on March 22, 2000 without opposition.
[5] On March 30, 1999, Dole Food Company Inc. and Dole Foods of Canada Ltd. ("Dole") commenced an action in this Court to expunge Nabisco"s registration and for an interim, interlocutory and permanent injunction restraining the defendant, Nabisco, from the use of its trade-mark "Fruit Bowls".
[6] Nabisco filed a Statement of Defence and Counterclaim also seeking an interim, interlocutory and permanent injunction against Dole.
[7] On August 9, 2000, Nabisco filed and served this motion for an interim injunction returnable on August 14, 2000. Given the short time frame, neither party has had an opportunity to cross-examine on the affidavits in support of their respective positions.
[8] On August 14, 2000, Dole sought an adjournment of motion to allow time for cross-examination on the affidavits filed by Nabisco. Nabisco strongly opposed the request for an adjournment.
[9] On the basis of the urgency of the matter, I agreed to bear the motion. Accordingly, it is not necessary for me to review the issue of urgency in these reasons.
[10] The standard for an interim injunction is the three part test set out by the House of Lords in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 and accepted by the Supreme Court of Canada in R.J.R. McDonald Inc. v. Canada [1994] 1 S.C.R. 311 at 334.
[11] The moving party must satisfy the Court that:
| 1) There is a serious issue to be tried; |
| 2) It will suffer irreparable harm if the relief sought is not granted; |
| 3) The balance of convenience favours the granting of the injunction. |
Serious issue to be tried
[12] Dole urges the Court to adopt what has become known as the "Woods exception" and that Nabisco should be required to demonstrate a prima facie case on the merits. I do not propose to deal with this issue as, in my view, the result in this matter rests on the remaining two branches of the test. Suffice it to say that I am satisfied that there is a serious issue to be tried.
Irreparable harm
[13] Nabisco founds its assertions of irreparable harm on its proprietary interest in the trade-mark "Fruit Bowls" and the rights which flow pursuant to the Trade-marks Act , R.S., 1985, c T-13 ("Act"). More particularly, section 19 of the Act provides to the owner of the trade-mark the right to the exclusive use of a registered trade-mark. Further, section 20 prohibits "deemed" infringement, that is the use of trade-marks which are confusingly similar to registered trade-marks.
[14] Nabisco argues if Dole is allowed to continue with the marketing of its product, Dole"s activities will cause irreparable harm to Nabisco by destroying the distinctive character of its lawfully registered trade-mark, injury to its goodwill, irrevocable damage to its business reputation and relationships with dealers, retailers and customers and also cause it to suffer permanent market loss.
[15] The alleged irreparable harm is premised on the validity of its trade-mark which is vigorously challenged by Dole.
[16] In a quia timet interim injunction application, such as this, the Court may infer from the evidence irreparable harm. If, however, the legal foundation from which the alleged irreparable harm flows is itself challenged, as in this case, then it seems to me an evaluation of irreparable harm would be speculative.
[17] Further, if one did indeed find irreparable harm in these circumstances this would in effect be a determination of the merits of the litigation. It would be an affirmation of Nabisco"s propriety rights in the trade-mark.
[18] In my view, the statement by Heald J.A. in Syntex Inc. v. Novopharm Ltd. (1991) 36 C.P.R. (3d) 129 (F.C.A.) is directly applicable to the facts which give use to this motion. He stated:
| Here the validity of the respondent"s mark is very much under attack and in issue in these proceedings. In my view, a determination of the merits which involve extensive evidence and contentious and disputed factors which address the vital question of the validity of the mark should not be decided at the interlocutory injunction stage. |
He went on to say:
| When a court decides with an interlocutory injunction that an aggrieved party has proprietary rights in a trade-mark, that court is deciding the very issue which is to be determined at trial. In my view, such a determination should not be made at an interlocutory stage where, as in this case, the question of validity is strenuously addressed by both parties. |
Balance of convenience
[19] In this case, there are two mature, sophisticated, well advised parties each making allegations which would be impossible to address without each party having had the opportunity to fully advance its evidence and to test the evidence of the opposing party through cross-examination. Under these circumstances, the balance of convenience weighs in favour of maintaining the status quo.
Delay
[20] I also wish to make one further comment with respect to delay. Nabisco has known, by its own admission since at least the third week of June, 2000 of Dole"s activities but took no steps until the filing of this motion on August 9, 2000.
[21] In the interim, Dole has entered into contracts with major Canadian retailers and has spent in excess of $1,000,000 by way of listing agreements for shelf space with these retailers. Dole is already in the Canadian market place and is committed to shipping its product within the week. If an interim injunction were to be granted at this time Dole would be prejudiced. Had Nabisco brought this motion in a timely fashion, the prejudice to Dole could have been significantly reduced. Nabisco"s failure to do so weighs against the granting of this relief.
[22] For these reasons, the motion for an interim injunction is dismissed with costs to the plaintiffs Dole Food Company, Inc. and Dole Foods of Canada Ltd.
"Dolores M. Hansen"
J.F.C.C.