By Allyson Whyte Nowak (Canada)
A recent decision from the Ontario Superior Court of Justice in Rhéo Thompson Candies Limited v. Thompson confirms that an injunction will not issue to prevent the continued infringement of a registered trade-mark unless the owner of the mark can show that in the absence of an injunction, damages cannot be quantified or no remedy is possible. See Rhéo Thompson Candies Limited v. Thompson (2013, ONSC 4932)
Competing chocolatiers battle over “Mint Smoothies” name
The Stratford company, Rhéo Thompson Candies Limited, is a well-established business which had earned a reputation over a number of years as a high quality candy confectioner and chocolatier with products that included the “Mint Smoothie.”
Founded in 1969 by Rheo and Sally Thompson, their daughter, Marnie Thompson and eventually her husband, Alvin Bolkovic, worked in the business until it was sold in 2002 to Kristene Steed and Marc Johnstone.
Pursuant to a share purchase agreement, the Thompson family sold the business, including the family recipes which had been held as trade secrets.
In 2010, the new owners of Rhéo Thompson Candies learned that the Thompson family daughter and her husband had started their own chocolate business in Toronto under the name “R Thompson Chocolates.”
One of the products sold by the R Thompson Chocolates was a “Mint Smoothie.” There was evidence that R Thompson Chocolates were trading-off the Thompson family reputation in their online advertising and advising customers that they were using the family recipes.
Round one: common law trade-mark rights and permanent injunction
Rhéo Thompson Candies objected to the use of the name “R Thompson Chocolates” and asserted common law trade-mark rights in the “Mint Smoothie” name.
While the R Thompson Chocolates agreed to change its business name to “M Thompson Chocolates” they continued to use the term “Mint Smoothie” arguing that it was a generic term for which no confusion could result.
Rhéo Thompson Candies applied for and obtained a trade-mark for “Mint Smoothie” and when the M Thompson Chocolates failed to respond to Rhéo Thompson Candies’ requests to cease using the mark, it commenced an action against them, seeking a permanent injunction, damages and declaratory relief in connection with their infringement of the MINT SMOOTHIE trade-mark and passing-off.
Round two: Goodwill of a the trade-mark and interlocutory injunction
Applying the well-known three-part test for the grant of an interlocutory injunction in RJR — MacDonald Inc. v. Canada (Attorney General),  1 S.C.R. 311, Justice H. A. Rady found that Rhéo Thompson Candies had met the low threshold for showing a serious issue to be tried on the merits of the action.
Importantly, however, the motions judge expressly rejected a line of judicial authority which relieves a moving party from proving irreparable harm in the face of a clear breach of an intellectual property right.
He held that the Federal Court of Appeal decision in Centre Ice Ltd. v. National Hockey League et al.,  F.C.J. No. 68 required Rhéo Thompson Candies to prove irreparable harm with evidence not only of goodwill in the trade-mark, but of confusion in the market place which has damaged that goodwill in a way that cannot be compensated for in damages.
Justice Rady considered that Rhéo Thompson Candies had failed to meet this burden on the basis of evidence he described as “anecdotal hearsay evidence of confusion.”
Availability of interlocutory injunctions in Canadian trademark cases
This decision is but one in a long line of judicial authorities which reaffirms that the mere fact that a litigant has a registered trade-mark does not alone provide a basis for prohibiting competition, pending trial. The availability of interlocutory injunctions to protect intellectual property rights in Canada remains elusive and absent new judicial thinking which focuses on the strength of the plaintiff’s case and less on the nature of the resulting damage, litigants will continue to get the same results.
- Rhéo Thompson Candies Limited v. Thompson, 2013, ONSC 4932
- RJR — MacDonald Inc. v. Canada (Attorney General),  1 S.C.R. 311
- Centre Ice Ltd. v. National Hockey League et al.,  F.C.J. No. 68
This article was prepared by Allyson Whyte Nowak (firstname.lastname@example.org and +1 416.216.4096) of Norton Rose Fulbright Canada’s Intellectual property group.