(UN)HEALTHY COMPETITION?

CURVES AND ÉNERGIE CARDIO: AN (UN)HEALTHY COMPETITION?
*
ALEXANDRA STEELE AND RALUCA POPOVICI
ROBIC, LLP
LAWYERS, PATENT AND TRADE-MARK AGENTS
On July 2, 2014 the Quebec Superior decided against the application for provisional
injunction brought by a “Curves” franchisee (“Curves”) against the owner of a
shopping mall and an “Énergie Cardio” franchisee (“Énergie Cardio”): 403-9971
Canada inc c Place Lasalle Property Corporation, 2014 QCCS 3153,
http://www.canlii.org/en/qc/qccs/doc/2014/2014qccs3153/2014qccs3153.html (201407-02) PeacocK J.
“Curves” operated a ladies’ fitness and weight loss centre in a shopping mall and
launched legal proceedings hoping to prevent the opening of a “no frills”, mixed
gender fitness facility by Énergie Cardio in the same shopping center. Curves
claimed that the opening would violate the exclusivity clause in its lease, which read:
“the landlord shall not lease or permit any other space in the Shopping Centre to be
operated or used principally or in part as a ladies fitness centre". The lease also
indicated that the “landlord shall have the right to lease or permit the occupation of a
men's fitness centre in the Shopping Centre without contravening the “Curves”
exclusivity”.
The core of the matter was whether the language of the exclusivity clause prevented
the landlord from renting to women-only fitness centers or whether it also covered
mixed-gender facilities, such as the one exploited by Énergie Cardio. Curves argued
that the clause prevented the landlord from renting to any fitness facility that admitted
women, whether exclusively or not.
Justice Mark G. Peacock starts off his analysis by pointing out the limited role of the
motion judge at the stage of the provisional injunction - a temporary injunction valid
for only 10 days - as well as the criteria for granting such an injunction: appearance
of right, irreparable harm and balance of convenience.
According to Justice Peacock, Curves’ exclusivity clause covered fitness centers
intended mainly for women but excluded those targeting men and women without
distinction, as was the case for Énergie Cardio. Three factors came into play in his
conclusion:
© CIPS, 2014.
*
From ROBIC, LLP, a multidisciplinary firm of Lawyers, and Patent and Trade-mark Agents. Published
in the Fall 2014 (Vol. 18, no. 2) Newsletter of the firm. Publication 068.182E.
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
2
•
•
•
a change in the wording used between the original lease, with the original
owner of the shopping center, and the second lease, with the second owner,
in effect at the time of the proceedings;
the context provided by the other clauses of the lease;
and the differences in the businesses operated by the Curves and Énergie
Cardio.
•
Firstly, the clause in the original lease, which was in effect when Curves entered into
negotiations with the second owner of the shopping center, prevented the landlord
from renting to a “ladies fitness center or any fitness center, which admits women”. In
the second lease signed by Curves however, the words “or any fitness center, which
admits women” were removed. For the Court, this revision demonstrated the parties’
intention to reduce the scope of the protection to fitness centers designed exclusively
for women.
Secondly, reading the exclusivity clause in context with other clauses of the lease
confirmed this interpretation. A separate clause stipulated that the owner of the
shopping mall was not prevented from leasing to other tenants “carrying on a
business which is similar in whole or in part to the business permitted to be carried on
from the leased premises”. According to the Court, this clause provided the owner of
the shopping mall greater flexibility in its choice of tenants.
Thirdly, with respect to the last factor of the analysis, the different nature of the
businesses operated by the Curves and Énergie Cardio, Justice Peacock noted that,
unlike Curves, Énergie Cardio’s "Econofitness" concept had no space dedicated
exclusively to women and no support staff, and did not provide weight loss advice.
Membership costs for Econofitness were also a fraction of those charged by Curves.
Although Curves acted diligently in protecting its exclusivity clause by starting legal
proceedings in a timely fashion, it had failed to demonstrate an appearance of right to
the injunction and irreparable harm, two elements required to succeed in its
proceedings. Curves’ concern that it would be priced out of business due to Énergie
Cardio’s significantly lower prices was, according to Justice Peacock, a mere result of
“legitimate price competition in the free market where consumers are provided with a
broad gamut of choices” and did not justify a larger interpretation of the exclusivity
clause. Curves’ application for provisional injunction was thus dismissed.
Essentially, the decision turns on one principle only: the general rule of open
competition and its corollary, the narrow interpretation of clauses restricting it. Since
the exclusivity clause invoked by Curves was an exception to the rule of freedom of
trade, the Court interpreted it narrowly and decided that it did not apply to the case at
bar.
On August 27, 2014, the Court of Appeal refused Curves’ motion for leave to appeal
Justice Peacock’s decision, mentioning that the provisional judgment had no binding
effect on the decision to be rendered at the interlocutory stage, scheduled for March
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
3
2015: 4039971 Canada inc c Place Lasalle Property Corporation, 2014 QCCA 1585,
http://www.canlii.org/fr/qc/qcca/doc/2014/2014qcca1585/2014qcca1585.html (201409-27) Marcotte J.
Recent decisions in France and South Africa looked at exclusivity clauses, such as the
one signed by Curves, from the perspective of free competition. In Canada, could the
Competition Act have an impact on the validity of such clauses
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
4
Pour des services de conseils dans le domaine de la propriété
intellectuelle et des technologies de l'information et des communications
(incluant les services d’agents de brevets et de marques de commerce)
de même que des services juridiques.
ROBIC, un groupe d'avocats et d'agents de brevets et de marques de
commerce voué depuis 1892 à la protection et à la valorisation de la propriété
intellectuelle dans tous les domaines: brevets, dessins industriels et modèles
utilitaires; marques de commerce, marques de certification et appellations
d'origine; droits d'auteur, propriété littéraire et artistique, droits voisins et de
l'artiste interprète; informatique, logiciels et circuits intégrés; biotechnologies,
pharmaceutiques et obtentions végétales; secrets de commerce, know-how et
concurrence; licences, franchises et transferts de technologies; commerce
électronique, distribution et droit des affaires; marquage, publicité et
étiquetage; poursuite, litige et arbitrage; vérification diligente et audit. ROBIC,
a group of lawyers and of patent and trademark agents dedicated since 1892 to
the protection and the valorization of all fields of intellectual property: patents,
industrial designs and utility patents; trademarks, certification marks and
indications of origin; copyright and entertainment law, artists and performers,
neighbouring rights; computer, software and integrated circuits;
biotechnologies, pharmaceuticals and plant breeders; trade secrets, knowhow, competition and anti-trust; licensing, franchising and technology
transfers; e-commerce, distribution and business law; marketing, publicity and
labelling; prosecution litigation and arbitration; due diligence. ®/MD
COPYRIGHTER TM/MC
IDEAS LIVE HERE ®/MD
IL A TOUT DE MÊME FALLU L'INVENTER!
® MD
/
LA MAÎTRISE DES INTANGIBLES ®/MD
LEGER ROBIC RICHARD ®/MD
NOS FENÊTRES GRANDES OUVERTES SUR LE MONDE DES AFFAIRES ®/MD
PATENTER®/MD
ou «R» ®/MD stylisé
ROBIC®/MD
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
5
Ou stylisé ROBIC ++++®/MD stylisé
ou ROBIC + DROIT +AFFAIRES +SCIENCES +ARTS®/MD stylisé
ou ROBIC +LAW +BUSINESS +SCIENCE +ART®/MD stylisé
THE TRADEMARKER GROUP TM/MC
TRADEMARKER TM/MC
VOS IDÉES À LA PORTÉE DU MONDE , DES AFFAIRES À LA GRANDEUR DE
LA PLANÈTE®/MD
YOUR BUSINESS IS THE WORLD OF IDEAS; OUR BUSINESS BRINGS YOUR
IDEAS TO THE WORLD ®/MD
Marques de commerce de ROBIC, S.E.N.C.R.L. pour ses services de
conseils dans le domaine de la propriété intellectuelle et des
technologies de l'information et des communications (incluant les
services d’agents de brevets et de marques de commerce) de même
que ses services juridiques
*************************************************************************************************
*
For services pertaining to intellectual property, technology and
communication law and related matters (including patent and trade-mark
agency services) as well as legal services.
ROBIC, un groupe d'avocats et d'agents de brevets et de marques de
commerce voué depuis 1892 à la protection et à la valorisation de la propriété
intellectuelle dans tous les domaines: brevets, dessins industriels et modèles
utilitaires; marques de commerce, marques de certification et appellations
d'origine; droits d'auteur, propriété littéraire et artistique, droits voisins et de
l'artiste interprète; informatique, logiciels et circuits intégrés; biotechnologies,
pharmaceutiques et obtentions végétales; secrets de commerce, know-how et
concurrence; licences, franchises et transferts de technologies; commerce
électronique, distribution et droit des affaires; marquage, publicité et
étiquetage; poursuite, litige et arbitrage; vérification diligente et audit. ROBIC,
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
6
a group of lawyers and of patent and trademark agents dedicated since 1892 to
the protection and the valorization of all fields of intellectual property: patents,
industrial designs and utility patents; trademarks, certification marks and
indications of origin; copyright and entertainment law, artists and performers,
neighbouring rights; computer, software and integrated circuits;
biotechnologies, pharmaceuticals and plant breeders; trade secrets, knowhow, competition and anti-trust; licensing, franchising and technology
transfers; e-commerce, distribution and business law; marketing, publicity and
labelling; prosecution litigation and arbitration; due diligence. ®/MD
COPYRIGHTER TM/MC
IDEAS LIVE HERE ®/MD
IL A TOUT DE MÊME FALLU L'INVENTER!
® MD
/
LA MAÎTRISE DES INTANGIBLES ®/MD
LEGER ROBIC RICHARD ®/MD
NOS FENÊTRES GRANDES OUVERTES SUR LE MONDE DES AFFAIRES ®/MD
PATENTER®/MD
or stylizedR®/MD
ROBIC®/MD
or stylized ROBIC ++++®/MD
or stylized ROBIC + DROIT +AFFAIRES +SCIENCES +ARTS®/MD
or stylized ROBIC +LAW +BUSINESS +SCIENCE +ART®/MD
THE TRADEMARKER GROUP TM/MC
TRADEMARKER TM/MC
VOS IDÉES À LA PORTÉE DU MONDE , DES AFFAIRES À LA GRANDEUR DE
LA PLANÈTE®/MD
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006
7
YOUR BUSINESS IS THE WORLD OF IDEAS; OUR BUSINESS BRINGS YOUR
IDEAS TO THE WORLD ®/MD
Trade-marks of ROBIC, LLP for its services pertaining to intellectual
property, technology and communication law and related matters
(including patent and trade-mark agency services) as well as legal
services
ROBIC, LLP
www.robic.ca
[email protected]
MONTREAL
1001 Square-Victoria - Bloc E - 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel.: +1 514 987-6242 Fax: +1 514 845-7874
QUEBEC
2828 Laurier Boulevard, Tower 1, Suite 925
Quebec, Quebec, Canada G1V 0B9
Tel.: +1 418 653-1888 Fax.: +1 418 653-0006