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T-1175-89
Pizza Pizza Limited (Plaintiff) v.
Little Caesar International Inc., Little Caesar Enterprises Inc., Little Caesar of Canada Inc., Little Caesar's Pizza (c.o.b. at 1091 Lauzon Road, Windsor, Ontario), Little Caesar's Pizza (c.o.b. at 1304 Grand Marais West, Windsor, Ontario), Little Caesar's Pizza (c.o.b. at 1930 Tecumseh Boulevard West, Windsor, Ontario), Little Cae- sar's Pizza (c.o.b. at 3749 Tecumseh Road East, Windsor, Ontario), Little Caesar's Pizza (c.o.b. at 3123 Forest Glade Drive, Windsor, Ontario), Michael Hitch, Denise Ilitch-Lites, Malina Bitch, David H. Deal, Gerald M. Pasternak, Charles P. Jones, Robert Massey, Kim Pollack, and Alan R. Thompson (Defendants)
INDEXED AS: PIZZA PIZZA LTD. V. LITTLE CAESAR INTERNA TIONAL INC. (T.D.)
Trial Division, Dubé J.—Toronto, October 19; Ottawa, October 31, 1989.
Trade marks — Infringement — Application for interlocu tory injunction restraining defendants from using trade mark "Pizza Pizza" — Plaintiff operating or franchising 194 pizza take-out establishments in Ontario and Quebec, all of which using "Pizza Pizza" in association therewith — Expecting to open franchised operations in Windsor within year — Little Caesar operating 2600 pizza places in U.S.A. and Windsor — Using "Pizza! Pizza!" in signage and advertising to advertise two pizzas for price of one — Change in factual situation and evolution of case law on irreparable harm in trade marks field in five years since denial of similar application involving same parties — Once threshold test of serious issue met, mere infringement of proprietary right in trade mark sufficient to constitute irreparable harm — Unauthorized use by Little Caesar in Windsor area of plaintiffs registered mark causing irreparable harm as diminution of owner's statutory proprie tary interest could be perceived but not measured.
Injunctions — Trade mark infringement action — Applica tion for interlocutory injunction — Once threshold test of serious issue to be tried met, mere infringement of proprietary right in trade mark sufficient to constitute irreparable harm.
CASES JUDICIALLY CONSIDERED
APPLIED:
Maple Leaf Mills Ltd. v. Quaker Oats Co. of Can. (1984), 2 C.I.P.R. 33; 82 C.P.R. (2d) 118 (F.C.T.D.); Joseph E. Seagram & Sons Ltd. v. Andres Wines Ltd. (1987), 16 C.I.P.R. 131; 16 C.P.R. (3d) 481; 11 F.T.R. 139 (F.C.T.D.); I.B.M. Corp. v. Ordinateurs Spirales Inc. (1984), 2 C.I.P.R. 56; 80 C.P.R. (2d) 187 (F.C.T.D.); Syntex Inc. v. Novopharm Ltd. (1989), 26 C.P.R. (3d) 481; 28 F.T.R. 124 (F.C.T.D.).
DISTINGUISHED:
Pizza Pizza Ltd. v. Little Caesar Enterprises Inc. et al. (1984), 1 C.P.R. (3d) 154 (F.C.T.D.).
COUNSEL:
M. M. Field-Marsham and J. C. Cotter for plaintiff.
Peter Y Atkinson and John Longo for defendants.
SOLICITORS:
Osler, Hoskin & Harcourt, Toronto for
plaintiff.
Aird & Berlis, Toronto for defendants.
The following are the reasons for order ren dered in English by
DuBÉ J.: This application by the plaintiff ("Piz- za Pizza") is for an interlocutory injunction restraining the defendants ("Little Caesar") from using or advertising the trade mark "Pizza Pizza" and any other designation similar to the trade marks or trade names of the plaintiff, and from directly or indirectly indicating a connection in the course of trade between Little Caesar and Pizza Pizza.
As of October 18, 1989, Pizza Pizza operates or franchises some 194 take-out restaurants in the Metropolitan areas of Toronto, Ottawa and Mon- tréal, as well as other locations throughout the province of Ontario. It is the registered owner in Canada of several trade marks, the first having been registered on March 3, 1972. Both its corpo rate stores and its franchised outlets operate under the trade mark "Pizza Pizza", used in association therewith since December 1967. Within the year, Pizza Pizza expects to open franchised restaurants
in several other communities, including Windsor and London, Ontario. Its approximate annual net sales have grown from $170,000 in 1968 to $100.4 million in 1988. Its advertising budget for 1988 was $6.3 million.
Little Caesar operates over 2,600 restaurants in a pizza chain based in the United States, through corporate restaurants and by way of franchised outlets. It has operated five fast food take-out restaurants in the Windsor, Ontario area for the past 1' years. As part of its advertising and signage it uses the phrase "Pizza! Pizza!" in com bination with its trade mark "Little Caesar". The purpose of that exclamatory phrase is to advertise the promotion of two pizzas for the price of one.
Pizza Pizza's method of doing business is sub stantially different from that of Little Caesar. Little Caesar does not deliver its products in the Windsor area. All sales are made at the individual stores with approximately 90% of Little Caesar's customers calling ahead to order pizzas for pick up. Each store has its own telephone number.
By contrast, Pizza Pizza's business operations focus upon the delivery of its products. A comput erized telephone system is used to handle all deliv ery orders for the plaintiffs products. The delivery telephone number is 967-1111 in the Toronto area. Is has become well-known as a result of the plain tiff's extensive advertising efforts. Other telephone numbers are used outside Metropolitan Toronto.
In June 1983, the plaintiff commenced a similar action in this Court against Little Caesar and Viking Restaurants Incorporated, a Little Caesar franchise operating in London, Ontario. The plain tiff alleged infringement and moved for an inter locutory injunction based substantially on the same allegations and arguments advanced in the
instant motion. On October 3, 1984, the Associate Chief Justice dismissed the application, mainly on the ground that the plaintiff had not shown irrepa rable harm. The last paragraph of his reasons reads as follows (at page 156):'
There is considerable support for the position advanced by both the plaintiff and the defendants and I fully expect it to be a difficult decision for the trial judge. There is no reason to believe that in the period pending trial, damages suffered by the plaintiff cannot be fully compensated by a monetary award. Upon the special facts of this case where the plaintiffs opera tion is almost entirely in one market and the defendants' in another and where the obvious disclaimer of the descriptive word "pizza" will be a factor in the ultimate decision, it seems to me that the better exercise of discretion favours adjudication of all issues at trial.
This interlocutory application is therefore dismissed with costs.
Apparently, the matter was then resolved be tween the parties and that action was not pursued. However, in the ensuing five years the factual situation has changed considerably and the juris prudence on irreparable harm in the field of trade marks has evolved substantially. Consequently, I now propose to grant the interlocutory injunction and for the following reasons.
In 1983, the plaintiff carried on business mostly in the Metropolitan area of Toronto and operated some 50 outlets, whereas the defendant Viking Restaurants Incorporated operated four pizza locations in London, Ontario. As mentioned ear lier, the plaintiff now operates or is about to operate at some 200 locations in Montréal and throughout Ontario, including Southwestern Ontario. Because of its increased advertising budget and heavy volume of sales, it now covers virtually the entire province of Ontario, including Windsor. The finding of the Honourable Associate Chief Justice, that "the plaintiffs operation is almost entirely in one market and the defendants' in another", is no longer valid.
' Pizza Pizza Ltd. v. Little Caesar Enterprises Inc. et al. (1984), 1 C.P.R. (3d) 154 (F.C.T.D.).
It is common ground that the threshold test for an interlocutory injunction, a serious issue to be tried, has been met. The second requirement, irreparable harm, canvassed in the recent jurispru dence, points in the direction that the mere infringement of the proprietary right in a trade mark is of itself sufficient to constitute irreparable harm.
In Maple Leaf Mills Ltd. v. Quaker Oats Co. of Can., 2 Cattanach J. granted an interlocutory injunction for the infringement of the trade mark "Pounce" for cat food. He said (at page 43 C.I.P.R.) that "The mere infringement of the pro prietary right in a trade mark is of itself sufficient to constitute irreparable harm not compensable for in damages." He said that the trade mark is presumed to be valid and found that there was "a risk of unquantifiable damage, which need not be proven but need only be anticipated, to the plain tiff if the interlocutory injunction is refused and the plaintiff should be successful at trial." He concluded (at pages 43-44 C.I.P.R.) that the status quo should be maintained:
The maintenance of the status quo is accomplished by an interlocutory injunction. That is its object and effect.
In Joseph E. Seagram & Sons Ltd. v. Andres Wines Ltd.,' my colleague Cullen J. granted an interlocutory injunction to restrain the defendant from selling a vodka cooler under the trade name "Wildberry". He said (at page 145 C.I.P.R.):
It is quite apparent to me that we have an arguable case of infringement of a registered trade mark and therefore this injunction will be granted. The law is quite clear that this can be done without the necessity of having to consider balance of convenience and irreparable harm. (Duomo Inc. v. Giftcraft Ltd. (1984), 3 C.I.P.R. 70, 1 C.P.R. (3d) 165, at 169 (Fed. T.D.); Maple Leaf Mills Ltd. v. Quaker Oats Co., supra; Universal City Studios v. Zellers (1983), 73 C.P.R. (2d) 1 (Fed. T.D.), at pp. 8, 9; I.B.M. Corp. v. Ordinateurs Spirales Inc. (1984), 2 C.I.P.R. 33, 80 C.P.R. (2d) 187, at 198 (Fed. T.D.)).
2 (1984), 2 C.I.P.R. 33; 82 C.P.R. (2d) 118 (F.C.T.D.).
3 (1987), 16 C.I.P.R. 131; 16 C.P.R. (3d) 481; 11 F.T.R. 139 (F.C.T.D.).
The learned judge quoted our colleague Madam Justice Reed in I.B.M. Corp. v. Ordinateurs Spi- rales Inc., 4 where she granted an interlocutory injunction, even though it was "hard to conclude that the plaintiff would suffer irreparable harm from the actions of the defendant alone". How ever, she referred to the "floodgates effect" or "death by 1,000 cuts" which would result from a failure to grant the injunction, thus encouraging "many others to enter into the field of importing and selling the computers containing the pro gramme in which the plaintiff holds a certificate of copyright".
In a more recent decision, Syntex Inc. v. Novop- harm Ltd.,' MacKay J., of this Court, reviewed all the recent authorities on irreparable harm and concluded as follows (at page 502 C.P.R.):
In light of these authorities it seems clear to me that the unauthorized use of a registered trade mark results in irrepa rable harm to the owner whether that be perceived as a diminution of the owner's statutory proprietary interest in exclusive use, a loss of the distinctiveness of the trade mark, the implicit recognition of a compulsory licence if the owner's right not be protected or because of the inevitable loss of market share where a well established market, developed with wares that are the subject of a registered trade mark, is entered by one who uses the trade mark without authorization. All of these perceptions relate to harm in a non-monetary sense for which damages do not readily provide appropriate compensation.
Clearly, in the case at bar, the unauthorized use by Little Caesar in the Windsor, Ontario area of the plaintiff's registered mark would cause harm to the plaintiff which is irreparable, in the sense that the diminution of the owner's statutory pro prietary interest could be perceived but not mea sured. Loss of the distinctiveness of the trade mark "Pizza Pizza", which must be assumed to be valid at this stage of the proceedings, would also ensue, as would an inevitable loss of market share in the areas where the plaintiff already operates, as well as in those areas where the plaintiff intends to operate. These harms cannot be readily measured in monetary terms by an accountant, but can be foreseen and perceived by anyone. The two words of the trade mark "Pizza Pizza" appearing on the
(1984), 2 C.I.P.R. 56; 80 C.P.R. (2d) 187 (F.C.T.D.), at p.
70 C.I.P.R.
5 (1989), 26 C.P.R. (3d) 481; 28 F.T.R. 124 (F.C.T.D.).
signage and the wares of Little Caesar in the Windsor area obviously affect the plaintiff's trade mark, which at this stage stands registered throughout Canada.
On the other hand, the alleged harm to be suffered by Little Caesar if the injunction is grant ed appears to be minimal. The "Pizza! Pizza!" signage for the Windsor outlets would have to be replaced, at a cost of $8,000. However, the signs can be returned if the injunction is lifted. Some of the advertising material may not be used during that period, but non-offending material can be obtained from Little Caesar's restaurants in the Detroit area. Confusion will not inevitably result, as the "Pizza! Pizza!" phrase may be replaced by Little Caesar's own slogan: "Two Great Pizzas for One Low Price".
For the foregoing reasons, there shall be an interlocutory injunction restraining the defendants by its officers, servants, workmen, agents and employees from infringing and depreciating the trade marks "Pizza Pizza" and "Pizza Pizza Design" until the trial of or other disposition of this matter, in the form requested by the plaintiff. Costs in the cause.
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