Trade-Mark and Corporate Indicia Used by an Ex-Franchisee

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TRADE-MARK AND CORPORATE INDICIA USED BY AN EX-FRANCHISEE
By
Catherine Bergeron*
LEGER ROBIC RICHARD, L.L.P.
Lawyers, Patent and Trademark Agents
Centre CDP Capital
1001 Square-Victoria- Bloc E – 8th Floor
Montreal, Quebec, Canada H2Z 2B7
Tel. (514) 987 6242 - Fax (514) 845 7874
[email protected] - www.robic.ca
140 Gréber Holding Inc. v. Distribution Stéréo Plus Inc. 2005 QCCA 1030 (Court
of Appeal, Province of Quebec)
1. The facts
The Respondent, Distribution Stéréo Plus Inc. (hereinafter “Stéréo Plus”),
operates a network of franchised electronic appliances dealers. To this end,
Stéréo Plus designed and developed a particular interior layout of the
franchised stores consisting of distinctive colours, furniture, carpet, etc. The
Appellant, 140 Gréber Holding Inc. (hereinafter “Gréber”), and Stéréo Plus
signed a franchising contract in November 2001; Gréber adopted for its store
said particular interior layout according to Stéréo Plus’ instructions.
In June 2002, Stéréo Plus cancelled the franchising contract with Gréber; said
cancellation has eventually been confirmed by the Superior Court. Amongst
others, Gréber was compelled by the Court to modify the interior and exterior
appearance of its store in order to avoid any confusion, error, association or
relation with Stéréo Plus. Since Gréber did not fully comply with the Court’s
Order, Stéréo Plus filed a motion before the Superior Court in order to force
Gréber to conform to its obligations. The Superior Court granted the
interlocutory injunction and ordered Gréber to change the colors, carpet
and furniture of its store and to cease using any sign confusing the mark
STÉRÉO PLUS or any sign containing the words “Plus” and “Électronique”.
Gréber appealed from that decision.
2. The Court of Appeal’s decision
© CIPS, 2006.
*Lawyer, Catherine Bergeron is a member of LEGER ROBIC RICHARD, L.L.P., a multidisciplinary
firm of lawyers, and patent and trademark agents. Publication 293.029.
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The Court of Appeal states that the interlocutory injunction only has a
provisory character and the opening rules are to be strictly interpreted given
that it constitutes an exceptional measure intended to maintain a statu quo
until the decision on the merits. The Trial Judge benefits from a large
discretion which must be observed by the Court of Appeal unless it is of the
view that said discretion has been misused.
With respect to the general appearance of Gréber’s store, the Superior Court
did not commit any mistake by finding that the minor changes made by
Gréber did not respect its obligation to modify the interior appearance of its
store in order to avoid any confusion, error, association or relation with Stéréo
Plus.
Regarding the trade name and the likelihood of confusion, the Court of
Appeal is of the view that Stéréo Plus has shown a prima facie right which is
not, however, totally clear. In these circumstances, the Court of Appeal must
consider the other two elements of the injunction: the irreparable harm and
the balance of inconveniences. In this respect, the Court of Appeal is of the
view that Stéréo Plus did not meet its burden of proof.
Indeed, in the Court of Appeal’s opinion, it is questionable to prevent Gréber
from using the words “Électronique” and “Plus” in its name given that the
former describes the nature of its business and the latter simply suggests
excellence. The words “Électronique” and “Plus” in Gréber’s name do not
lead to a likelihood of confusion with Stéréo Plus’ business. Therefore, contrary
to the distinctive elements composing its particular interior layout (such as the
colors, carpet and furniture), Stéréo Plus did not show an irreparable harm
with respect to Gréber’s trade name.
Consequently, the Court of Appeal partially granted the appeal and
ordered Gréber to comply with the following obligations : 1) to change the
carpet and the STÉRÉO PLUS sign behind the cash register and 2) not to use a
name or a trade-mark creating confusion with Stéréo Plus’ trade-marks.
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