Corporation v. Showmax, Inc.,
Decision of January 18, 2000
- and -
SHOWMAX MONTREAL, INC.,
THE MONTREAL FORUM ENTERTAINMENT CENTER COMPANY, a partnership comprising
CANDEREL PROPERTIES LIMITED, SIMON
PROPERTY GROUP, DLJ REAL ESTATE CAPITAL PARTNERS and MADISON MARQUETTE,
THE FORUM ENTERTAINMENT CENTER COMPANY,
THE FORUM ENTERTAINMENT CENTER G.P., a
partnership comprising SDG MONTREAL FORUM
COMPANY, CANDEREL PROPERTIES LIMITED and
SOCIÉTÉ RECP DE MONTRÉAL,
REASONS FOR ORDER
This is a motion by the plaintiff, Imax Corporation (Imax) for an interim and
interlocutory injunction to restrain the defendant, Showmax Inc.(Showmax) from
using the word Showmax as the name of a large-format motion picture theatre it
proposes to open in Montreal.
According to the Notice of Motion, the plaintiff claims the following:
An order granting the plaintiff an interim and interlocutory injunction
restraining the defendant, its officers, directors, servants, agents, employees
and all over whom they exercise control, either directly or indirectly, from:
(a) using the word
SHOWMAX, or other imitation of the plaintiff"s IMAX trade mark, as or in
the name of its proposed large-format motion picture theatre or any other motion
(b) selling, offering
for sale, distributing or advertising any large-format motion picture theatre
services, or related wares or services, to the public in association with the
trade mark or trade name SHOWMAX, or other imitation of the plaintiff"s
IMAX trade mark;
(c) infringing the
plaintiff"s trade marks IMAX, registered in Canada under No. 170, 718, and
The IMAX Experience registered in Canada under No. 505, 349;
(d) directing public
attention to their wares, services or businesses in such a way as to cause or be
likely to cause confusion in Canada between its wares, services or businesses
and the wares, services or business of Imax Corporation, through use of the word
SHOWMAX, or other imitation of the plaintiff"s IMAX trade mark, as a trade
mark or trade name; and,
(e) using the
plaintiff"s registered trade mark IMAX in a manner that is likely to have
the effect of depreciating the value of the goodwill attaching thereto;
Costs of this motion; and
Such further and other relief as counsel may request and this Honourable Court
The plaintiff lists 16 paragraphs as its grounds for making its request for the
interim interlocutory injunction.
Plaintiff claims it is the inventor and developer of the large-format cinema
industry and for over 30 years Imax has been engaged in a range of activities in
the large-format cinema field.
The trade-mark IMAX is registered in Canada under number 170,718 in association
with a variety of motion picture related wares and services, including motion
picture theatre services. There are presently 25 Imax or Omnimax motion picture
theatres in Canada with 3 Imax theatres operating in Montreal with two others
operating in the Province of Quebec.
Plaintiff states the Imax name has become well-known across Canada in
association with large-format motion picture theatres and related services.
Plaintiff also states that the defendant intends to open a large-format motion
picture theatre in Montreal in June 2000 under the name and mark SHOWMAX in a
location at the Forum Entertainment Centre; The defendant has admitted it
intends to use the trade-mark SHOWMAX with large-format motion picture theatres
in Toronto and Vancouver.
Plaintiff believes the defendant"s activities are likely to cause confusion.
In paragraph 7 of the grounds, the plaintiff states:
More particularly, the
defendant"s use or display of the term SHOWMAX as a name or mark for a
giant screen movie theatre in Montréal is likely to cause visitors and
potential visitors to such a theatre to believe that the SHOWMAX theatre is
owned by, operated by, or has some business association with, the company that
owns or operates IMAX theatres.
In paragraphs 8 to 13 of the grounds, the plaintiff states:
8. A survey
recently conducted in Montreal to test the likelihood of such confusion shows
that about half of the people surveyed (49%) held this mistaken belief.
9. The defendant
refuses, despite demand, to cease and desist from using the name and mark
SHOWMAX in association with large-format motion picture-related wares and
services marketed to the public in Canada.
defendant"s internet website uses linking and framing technology such that
viewers of the Showmax website see the IMAX mark juxtaposed with the SHOWMAX
mark in a manner likely to foster the mistaken belief that the two companies are
11. The plaintiff
has no control over the character or quality of the defendant"s services
offered in association with the SHOWMAX name and mark. The defendant"s
activities will cause irreparable harm to the plaintiff by diminishing the
distinctiveness of the plaintiff"s IMAX trade mark.
12. The balance of
convenience favours the plaintiff. The plaintiff"s theatres and other
motion picture-related wares and services are well established in the Canadian
marketplace, and the plaintiff has earned very wide-spread and extremely
valuable goodwill in association with its IMAX name and mark.
13. By contrast, the
defendant has not opened any theatres yet under the SHOWMAX name and mark, nor
has it gained any significant reputation among the Canadian public. The
defendant"s proposed theatre is not scheduled to open for nearly a year.
The defendant can easily adopt a new name and mark not likely to cause confusion.
In support of the grounds for which the plaintiff is asking for an interlocutory
injunction, the plaintiff filed the affidavit of Carl Galletta and exhibits, the
affidavit of Robert Holz and exhibits, the affidavit of Joanna Kotsopoulos and
exhibits, the affidavits of G. Mary Ruby and exhibits sworn August 24, 1999 and
November 22, 1999, the affidavit of John W. Senders, the affidavit of Ruth M.
Corbin and Exhibit "A" , the affidavit of Michael R. Pearce and
Exhibit "A" as well as portions of cross-examinations of Linda Nelson
on her affidavit sworn on November 8, 1999.
The defendant filed, as its evidence, the affidavit of Linda Nelson, of John P.
Liefeld, parts of the transcript of the cross-examination of M. Ruby, Robert G.
Holz, Dr. R.M. Corbin, J.W. Senders and of Dr. Michael Pearce.
In its Statement of Claim, to which the interlocutory injunction is attached,
the plaintiff is claiming:
(a) an injunction
restraining the defendants, their officers, directors, servants, agents,
employees and all over whom they exercise control, either directly or indirectly,
and anyone having knowledge of such Order as may be granted, from:
(i) using the word
SHOWMAX, or colourable imitations thereof, as the name of a large-format motion
picture theatre, or as a name or mark used in association with large-format
motion picture theatres or related wares or services marketed to the public;
the plaintiff"s trade marks IMAX, registered in Canada under No. 170, 718,
and The IMAX Experience registered in Canada under No. 505, 349;
(iii) directing public
attention to their wares, services or businesses in such a way as to cause or be
likely to cause confusion in Canada, at the time they commenced so to direct
attention to them, between their wares, services or businesses and the wares,
services or business of Imax Corporation, through use of the word SHOWMAX, or
colourable imitations thereof, as a name or mark;
(iv) using the
plaintiff"s registered trade mark IMAX in a manner that is likely to have
the effect of depreciating the value of the goodwill attaching thereto;
the plaintiff"s copyright in its internet website;
(vi) making false or
misleading statements, tending to discredit the business, wares or services of
the plaintiff, to the effect that there is or will be a business relationship
between the Imax Corporation and Showmax, Inc., other than solely as competitors;
(b) an Order
requiring the defendants to deliver up to Imax Corporation, within 10 days after
service of such Order, all materials in the possession, custody or control of
the defendants as may offend any injunction granted herein;
(c) damages in the
amount of $10,000,000.00 or an accounting of the profits the defendants, as Imax
Corporation may elect after due inquiry, for trade mark infringement, statutory
trade libel and passing off, depreciation of goodwill, and copyright
damages in the amount of $5,000,000.00;
(e) the costs of this
action on the highest scale;:
(f) pre-judgment and
applicable taxes to which the plaintiff is entitled; and,
(h) such further
and other relief as counsel may advise and this Honourable Court allows.
Imax is a corporation incorporated under the laws of Canada and has a principal
place of business at 2525 Speakman Drive, Sheridan Science and Technology Park,
Mississauga, Ontario, Canada, L5K 1B1.
Showmax is a corporation incorporated under the laws of California and has a
principal place of business at 1105 Quail Street, Newport Beach. California,
United States of America, 92660.
Showmax Montreal Inc. is a corporation incorporated under the laws of Québec,
and has a registered head address of 600, De La Gauchetière West, Suite 2400,
Montreal, Quebec, H3B 4L8.
The Montreal Forum Entertainment Center Company is a partnership comprising
CANDEREL PROPERTIES LIMITED, SIMON PROPERTY GROUP, DLJ REAL ESTATE CAPITAL
PARTNERS and MADISON MARQUETTE and has a principal office or place of business
at 2000, rue Peel, Suite 900, Montréal Québec, H3A 2W5.
The Forum Entertainment Center Company is a corporation incorporated under the
laws of Nova Scotia, and has a registered head office address of Upper Water
Street, Halifax, Nova Scotia, B3J 2X2.
The Forum Entertainment Center G.P. is a partnership registered under the laws
of Québec, consisting of SDG Montreal Forum Company, Canderel Properties
Limited and Société RECP de Montréal, and has a registered head office
address of 2000, rue Peel, Suite 900, Montréal Québec, H3A 2W5.
On March 30, 1999 the plaintiff commenced this action against Showmax Inc. for
trade-mark infringement, passing off, depreciation of goodwill, and statutory
trade libel under the Trade-marks Act R.S.C. 1985, c. T-13, as amended,
and for copyright infringement.
The action is based on the defendant"s use of the trade-mark and trade name
Showmax in association with a large-format motion picture theatre to be opened
at the Forum Entertainment Centre in Montréal, and the advertisements for this
theatre on banners, magazines and through an internet website which all bear the
The plaintiff states that since as early as November 1996, Showmax has provided
real estate development and consulting services in relation to the development
and operation of large-format motion picture in Canada in association with the
In July 1998, Showmax announced publicly that it had entered into an agreement
with Canderel to open a 450-seat large-format motion picture theatre under the
name Showmax in Montréal, Québec at the Forum Entertainment Center (the site
of the hockey arena formerly known as The Montréal Forum) which is scheduled to
open in late 1999.
On July 23, 1998, Canderel Properties Limited SDG Montreal Forum Company, and
Société RECP de Montréal registered a partnership in Québec under the name
"The Forum Entertainment Center G.P." with the object of developing
the Montréal Forum into a fully integrated multi-tenant entertainment and
In October 1998, Canderel Properties Limited announced that construction on the
Forum Entertainment Centre had begun, that Showmax would be a major tenant, and
that it had formed the Montréal Forum Entertainment Company with partners,
Simon Property Group, DJL Real Estate Capital Partners, and Madison Marquette to
fund and develop the complex.
Showmax is responsible for an internet website with the following address, or
Universal Resource Locator (URL): http://www.showmax.com. Showmax has used this
site to advertise the opening of the Showmax large-format theatre at the Forum
The plaintiff states that the technology page on the Showmax website offers
further links, including one which leads the viewer to the Old Port of Montréal
website, which appears still framed within the framing page of the Showmax
website. The Old Port of Montréal website, as framed, contains information and
advertising regarding the Imax theatre at the Old Port of Montreal and displays
the Imax trade-mark.
The plaintiff states that the arrangement of framing and linking causes the
viewer to be likely to infer that Imax is responsible for, or is connected with
Showmax, for the purposes of the proposed large-format Showmax theatre.
Showmax has applied to register the trade-marks SHOWMAX and Showmax Montreal in
Canada in association with large-format motion picture theatres and related
wares and services.
The plaintiff states that, through the above stated activities, the defendant
(a) infringed the
plaintiff"s exclusive right to use its registered trademark Imax contrary
to section 19 of the Trade -marks Act and threaten further infringement,
and deemed infringement, of the registered marks Imax and The Imax Enterprise
under section 19 and 20;
(b) directed public
attention to their wares, services, or business in such a way as to cause or be
likely to cause confusion in Canada, at the time they commenced so to direct
attention to them, between their wares, services, or businesses and the wares,
services, or business of the plaintiff, through the use of the word Showmax as a
trademark or trade name, contrary to section 7(b), and threaten further such
wrongful activity; and
(c) used the trade mark
Imax, registered by the plaintiff, in a manner that is likely to have the effect
of depreciating the value of the goodwill attaching thereto, and threaten
further such wrongful activity.
The plaintiff states that the Imax website (http://www.imax.com) is an
original compilation under section 2 of the Copyright Act, R.S.C. 1985,
c. C-42, as amended (Imax Website Work) and Imax is the owner of the copyright
in the Imax Website Work.
The plaintiff is seeking an interim and interlocutory injunction prohibiting the
defendant from continuing to use the name Showmax in Canada in association with
large-format theatres and related services.
R.S.C 1985, c. T-13, as amended.
7. No person shall
(a) make a false or
misleading statement tending to discredit the business, wares or services of a
(b) direct public
attention to his wares, services or business in such a way as to cause or be
likely to cause confusion in Canada, at the time he commenced so to direct
attention to them, between his wares, services or business and the wares,
services or business of another;
(c) pass off other
wares or services as and for those ordered or requested;
(d) make use, in
association with wares or services, of any description that is false in a
material respect and likely to mislead the public as to
(i) the character,
quality, quantity or composition,
(ii) the geographical
(iii) the mode of the
manufacture, production or performance
of the wares or
(e) do any other act or
adopt any other business practice contrary to honest industrial or commercial
usage in Canada.
19. Subject to sections
21, 32 and 67, the registration of a trade-mark in respect of any wares or
services, unless shown to be invalid, gives to the owner of the trade-mark the
exclusive right to the use throughout Canada of the trade-mark in respect of
those wares or services.
20. (1) The right of
the owner of a registered trade-mark to its exclusive use shall be deemed to be
infringed by a person not entitled to its use under this Act who sells,
distributes or advertises wares or services in association with a confusing
trade-mark or trade-name, but no registration of a trade-mark prevents a person
(a) any bona fide use
of his personal name as a trade-name, or
(b) any bona fide use,
other than as a trade-mark,
(i) of the geographical
name of his place of business, or
(ii) of any accurate
description of the character or quality of his wares or services,
in such a manner as is
not likely to have the effect of depreciating the value of the goodwill
attaching to the trademark.
7. Nul ne peut_:
a) faire une déclaration
fausse ou trompeuse tendant à discréditer l'entreprise, les marchandises ou
les services d'un concurrent;
b) appeler l'attention
du public sur ses marchandises, ses services ou son entreprise de manière à
causer ou à vraisemblablement causer de la confusion au Canada, lorsqu'il a
commencé à y appeler ainsi l'attention, entre ses marchandises, ses services
ou son entreprise et ceux d'un autre;
c) faire passer
d'autres marchandises ou services pour ceux qui sont commandés ou demandés;
d) utiliser, en liaison
avec des marchandises ou services, une désignation qui est fausse sous un
rapport essentiel et de nature à tromper le public en ce qui regarde_:
(i) soit leurs caractéristiques,
leur qualité, quantité ou composition,
(ii) soit leur origine
(iii) soit leur mode de
fabrication, de production ou d'exécution;
e) faire un autre acte
ou adopter une autre méthode d'affaires contraire aux honnêtes usages
industriels ou commerciaux ayant cours au Canada.
19. Sous réserve des
articles 21, 32 et 67, l'enregistrement d'une marque de commerce à l'égard de
marchandises ou services, sauf si son invalidité est démontrée, donne au
propriétaire le droit exclusif à l'emploi de celle-ci, dans tout le Canada, en
ce qui concerne ces marchandises ou services.
20. (1) Le droit du
propriétaire d'une marque de commerce déposée à l'emploi exclusif de cette
dernière est réputé être violé par une personne non admise à l'employer
selon la présente loi et qui vend, distribue ou annonce des marchandises ou
services en liaison avec une marque de commerce ou un nom commercial créant de
la confusion. Toutefois, aucun enregistrement d'une marque de commerce ne peut
empêcher une personne_:
a) d'utiliser de bonne
foi son nom personnel comme nom commercial;
b) d'employer de bonne
foi, autrement qu'à titre de marque de commerce_:
(i) soit le nom géographique
de son siège d'affaires,
(ii) soit toute
description exacte du genre ou de la qualité de ses marchandises ou services,
d'une manière non
susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à
la marque de commerce.
R.S.C. 1985, c. C-42
2.1 (1) A compilation
containing two or more of the categories of literary, dramatic, musical or
artistic works shall be deemed to be a compilation of the category making up the
most substantial part of the compilation.
(2) The mere fact that
a work is included in a compilation does not increase, decrease or otherwise
affect the protection conferred by this Act in respect of the copyright in the
work or the moral rights in respect of the work.
3. (1) For the purposes
of this Act, "copyright", in relation to a work, means the sole right
to produce or reproduce the work or any substantial part thereof in any material
form whatever, to perform the work or any substantial part thereof in public or,
if the work is unpublished, to publish the work or any substantial part thereof,
and includes the sole right
(a) to produce,
reproduce, perform or publish any translation of the work,
(b) in the case of a
dramatic work, to convert it into a novel or other non-dramatic work,
(c) in the case of a
novel or other non-dramatic work, or of an artistic work, to convert it into a
dramatic work, by way of performance in public or otherwise,
(d) in the case of a
literary, dramatic or musical work, to make any sound recording, cinematograph
film or other contrivance by means of which the work may be mechanically
reproduced or performed,
(e) in the case of any
literary, dramatic, musical or artistic work, to reproduce, adapt and publicly
present the work as a cinematographic work,
(f) in the case of any
literary, dramatic, musical or artistic work, to communicate the work to the
public by telecommunication,
(g) to present at a
public exhibition, for a purpose other than sale or hire, an artistic work
created after June 7, 1988,
other than a map, chart
(h) in the case of a
computer program that can be reproduced in the ordinary course of its use, other
than by a reproduction during its execution in conjunction with a machine,
device or computer, to rent out the computer program, and
(i) in the case of a
musical work, to rent out a sound recording in which the work is embodied,
and to authorize any
27. (1) It is an
infringement of copyright for any person to do, without the consent of the owner
of the copyright, anything that by this Act only the owner of the copyright has
the right to do.
(2) It is an
infringement of copyright for any person to
(a) sell or rent out,
(b) distribute to such
an extent as to affect prejudicially the owner of the copyright,
(c) by way of trade
distribute, expose or offer for sale or rental, or exhibit in public,
(d) possess for the
purpose of doing anything referred to in paragraphs (a) to (c), or
(e) import into Canada
for the purpose of doing anything referred to in paragraphs (a) to (c), a copy
of a work, sound recording or fixation of a performer's performance or of a
communication signal that the person knows or should have known infringes
copyright or would infringe copyright if it had been made in Canada by the
person who made it.
2.1 (1) La compilation
d'oeuvres de catégories diverses est réputée constituer une compilation de la
catégorie représentant la partie la plus importante.
d'une oeuvre dans une compilation ne modifie pas la protection conférée par la
présente loi à l'oeuvre au titre du droit d'auteur ou des droits moraux.
3. (1) Le droit
d'auteur sur l'oeuvre comporte le droit exclusif de produire ou reproduire la
totalité ou une partie importante de l'oeuvre, sous une forme matérielle
quelconque, d'en exécuter ou d'en représenter la totalité ou une partie
importante en public et, si l'oeuvre n'est pas publiée, d'en publier la totalité
ou une partie importante; ce droit comporte, en outre, le droit exclusif_:
a) de produire,
reproduire, représenter ou publier une traduction de l'oeuvre;
b) s'il s'agit d'une
oeuvre dramatique, de la transformer en un roman ou en une autre oeuvre non
c) s'il s'agit d'un
roman ou d'une autre oeuvre non dramatique, ou d'une oeuvre artistique, de
transformer cette oeuvre en une oeuvre dramatique, par voie de représentation
publique ou autrement;
d) s'il s'agit d'une
oeuvre littéraire, dramatique ou musicale, d'en faire un enregistrement sonore,
film cinématographique ou autre support, à l'aide desquels l'oeuvre peut être
reproduite, représentée ou exécutée mécaniquement;
e) s'il s'agit d'une
oeuvre littéraire, dramatique, musicale ou artistique, de reproduire, d'adapter
et de présenter publiquement l'oeuvre en tant qu'oeuvre cinématographique;
f) de communiquer au
public, par télécommunication, une oeuvre littéraire, dramatique, musicale ou
g) de présenter au
public lors d'une exposition, à des fins autres que la vente ou la location,
une oeuvre artistique " autre qu'une carte géographique ou marine, un plan
ou un graphique " créée après le 7 juin 1988;
h) de louer un
programme d'ordinateur qui peut être reproduit dans le cadre normal de son
utilisation, sauf la reproduction effectuée pendant son exécution avec un
ordinateur ou autre machine ou appareil;
i) s'il s'agit d'une
oeuvre musicale, d'en louer tout enregistrement sonore.
Est inclus dans la présente
définition le droit exclusif d'autoriser ces actes.
27. (1) Constitue une
violation du droit d'auteur l'accomplissement, sans le consentement du titulaire
de ce droit, d'un acte qu'en vertu de la présente loi seul ce titulaire a la
(2) Constitue une
violation du droit d'auteur l'accomplissement de tout acte ci-après en ce qui a
trait à l'exemplaire d'une oeuvre, d'une fixation d'une prestation, d'un
enregistrement sonore ou d'une fixation d'un signal de communication alors que
la personne qui accomplit l'acte sait ou devrait savoir que la production de
l'exemplaire constitue une violation de ce droit, ou en constituerait une si
l'exemplaire avait été produit au Canada par la personne qui l'a produit_:
a) la vente ou la
b) la mise en
circulation de façon à porter préjudice au titulaire du droit d'auteur;
c) la mise en
circulation, la mise ou l'offre en vente ou en location, ou l'exposition en
public, dans un but commercial;
d) la possession en vue
de l'un ou l'autre des actes visés aux alinéas a) à c);
e) l'importation au
Canada en vue de l'un ou l'autre des actes visés aux alinéas a) à c).
ISSUES RAISED BY
The issues to be determined in this motion for an interim and interlocutory
injunction, as articulated in RJR-MacDonald Inc. v. Canada (Attorney
General),  1 S.C.R. 311 at page 334 are:
Has the applicant demonstrated a serious question to be tried?
Has the applicant established that it will suffer irreparable harm if the relief
is not granted?
In whose favour does the balance of convenience lie?
SUBMISSIONS OF THE
The plaintiff submits that the defendant"s use or display, and threatened
further use or display, of the trade-mark and trade name Showmax in association
with large-format theatres and wares or services in the large-format motion
picture field marketed to the public has caused, or is likely to cause,
confusion with the Imax family of trademarks and the trade name Imax.
The plaintiff argues that by adopting the mark and the name Showmax, the
defendant"s intend and threaten to appropriate the goodwill earned in
Canada by Imax over many years and at great expense. Further, the likelihood of
confusion is exacerbated by Showmax"s deceptive use of the Imax trade-mark
in its internet website.
Secondly, the plaintiff submits that if the defendant is permitted to use or
display the mark or name Showmax in Canada in association with wares or services
in the large-format motion picture field, then Canadian consumers will be
deceived into the mistaken belief that the defendant"s products and
services are made or provided by Imax or under its authority, or that the
defendant is affiliated with Imax. This would result in the defendant unlawfully
benefiting from Imax"s reputation for excellent service and high quality
Thirdly, the plaintiff argues that it has no control over the character or
quality of the defendant"s wares or services. The defendant"s use or
display of the name or mark Showmax will harm irreparably the plaintiff"s
valuable reputation and the goodwill attaching to its Imax Family of Marks.
Lastly, the plaintiff submits that by the arrangement of linking and framing in
the Showmax website, Showmax has created, a compilation pursuant to section 2 of
the Copyright Act which reproduces the Imax Website Work or a substantial
part thereof, and which communicates the Imax Website Work to the public by
telecommunication, all without Imax"s consent. It is argued that Showmax
has thereby infringed Imax"s rights in the Imax Website Work contrary to
sections 3 and 27 of the Copyright Act .
The defendant"s submissions can be summarized by the statement that the
plaintiff has failed to satisfy the test for the issuance of an interlocutory
The defendant submits that no serious issue exists because of the fact that
there is no valid evidence of confusion. That the "Senders" survey is
flawed and cannot be relied upon to show a serious issue of confusion.
That, therefore, assuming no confusion, there is no valid evidence of
I believe it necessary to state that a request or the issuance of an
interlocutory injunction is a most serious type of proceeding and should only be
issued on clear and convincing evidence. I say this because the issuance of an
interlocutory injunction prevents a party from doing what he or she would
normally be permitted to do.
In the case before me, the issuance of the interlocutory injunction would
prevent the defendant from opening a large-format theatre in Canada under the
name of SHOWMAX. This, normally, the defendant would be permitted to do.
Test for an
Part I: Serious
Issue to be Tried
The three-stage test to be applied in an application for an interlocutory
injunction was established in American Cyanamid Co. v. Ethicon Ltd. ,
 A.C. 396 (H.L.) and affirmed by the Supreme Court of Canada in RJR
The applicant must succeed on each of the three parts of the test in order to be
granted an injunction. In assessing the first stage of the test, Justices Cory
and Sopinka stated at page 337 of RJR MacDonald, supra that "there
are no specific requirements which must be met in order to satisfy this test.
The threshold is a low one."
There is sufficient evidence before the Court which has led me to conclude that
there is a serious issue to be tried. The plaintiff is the registered owner of a
Family of Marks (Imax) and therefore has the exclusive right throughout Canada
to the use of these marks in respect of its wares and services. In their
Statement of Claim, the plaintiff alleges that the defendant has infringed this
right through their use of the trade-mark SHOWMAX in association with a
large-format motion picture theatre proposed for Montreal.
The plaintiff has filed the affidavit of Dr. John W. Senders. I don"t
intend to recite the qualifications of Dr. Senders to give evidence other than
to state that after reading his curriculum vitae and the method that he used to
conduct his survey to show "confusion", I am prepared to accept what
he states on the issue of "confusion".
In paragraphs 5, 6 and 7 of Dr. Senders" affidavit, he states:
5. I have been asked to
give my expert opinion on the question of whether the use of the term SHOWMAX as
the name of a giant screen movie theatre in Montréal would be likely to cause
visitors and potential visitors to such a theatre to infer that it is owned or
operated by, or affiliated with, any other company.
6. In order to obtain
field data upon which to base my opinion, I collaborated with Sara Parikh of Leo
J. Shapiro and Associates, a market research firm located in Chicago, Illinois,
in the design and implementation of a consumer perception survey bearing on the
question to be investigated. My opinion set out in this affidavit is primarily
based on my analysis of the data yielded by the survey conducted. It also
derives from knowledge and experience gained from years of reading scientific
reports on human cognitive and perceptual performance, from my discussions with
my colleagues about related scientific matters, and from my trained observations
of human behaviour both in the laboratory and in the outside world, all
extending over more than 45 years of research and application.
7. My opinion, strongly
supported by the data collected through the survey, is that the use of the term
SHOWMAX as the name of a giant screen movie theatre in Montréal would be likely
to cause visitors and potential visitors to such a theatre to believe that
SHOWMAX theatres are owned by, operated by, or have some business association
with, the company that owns or operates IMAX theatres. The survey data show that
about half of the people surveyed held this belief.
In the balance of the paragraphs of Dr. Senders" affidavit, he explains the
method of his survey, the questions asked of the participants (paragraph 14) and
how the participants of the survey were chosen (paragraph 10) and the findings (paragraph
16 and following).
In paragraph 35, Dr. Senders" conclusion is:
The excess of the rate of the IMAX response to the SHOWMAX image over the rate
of the IMAX response to the MEGAVUE image is 49%. That is my best estimate of
the likelihood of mistaken belief that there is some kind of association between
the company that operates Showmax theatres and the company that operates Imax
To counter Dr. Senders" evidence, the defendant filed the affidavit of John
P. Liefeld sworn on November 10, 1999.
Dr. Liefeld is a Professor in the Department of Consumer Studies at the
University of Guelph. Dr. Liefeld has, as does Dr. Senders, an impressive
curriculum vitae. In paragraph 7 of his affidavit, Dr. Liefeld states:
Over the past 31 years, I have been directly involved in the design, conduct and
supervision of many research projects for industry and government, and academic
research funded by granting agencies such as SSHRC. These studies have spanned a
wide variety of marketing and social research methods including qualitative,
survey and experimental approaches. They have included shopping mall intercepts,
telephone surveys, door-to-dor household surveys and field and laboratory
In paragraphs 11, 12, 13 and 14 of Dr. Liefeld"s affidavit, he states:
I was asked by counsel for Showmax, Inc. to review the affidavit of Dr Senders
filed in this case, and provide comments.
My general conclusion is that the results of Dr Senders"s research are not
reliable, and do not support his conclusions.
The questions he asked are not valid. They do not measure beliefs about which
company owns or operates Showmax theaters. They measure respondent recall from
memory of company names, which share syllables or sound similar, when that
respondent is under pressure to guess a name. Even if names share syllables, or
sound similar, that does not mean a consumer will choose to attend a theater or
purchase a product mistakenly believing that it is owned, operated or produced
by another company.
Dr Senders"s results suggest to me that the name IMAX may be used by some
consumers as a generic term to apply to all large format theaters. Dr Senders
did not test this possibility.
The balance of Dr. Liefeld"s affidavit are specific comments by Dr. Liefeld
as to why he made the above comments found in paragraphs 12, 13 and 14.
As Dr. Liefeld states in paragraph 11 of his affidavit, he was only asked to
review the affidavit of Dr. Senders and this he did.
What Dr. Liefeld states, and I paraphrase, is that he disagrees with the method
of Dr. Senders" survey, with the questions asked, with the method of
choosing participants, etc.
What Dr. Liefeld does not say, and he cannot say, is that, based on the method
Dr. Liefeld believes should have been adopted to conduct the survey, the results
are different from the conclusion of Dr. Senders.
The fact that Dr. Liefeld disagrees with the method used by Dr. Senders is not
sufficient for me to set aside the result of Dr. Sender"s survey.
It might have been very different if Dr. Liefeld would have conducted his own
survey in a manner he thought appropriate and concluded of no possible confusion.
For the purpose of an interlocutory injunction, I do not have to decide that
there is confusion. I must only decide that an arguable case exists on the issue
I am satisfied that the plaintiff has made out such a case.
At this stage of the proceedings, I will abstain from commenting any further on
the merits of the action other than to say that I am satisfied that the
plaintiffs have satisfied the first part of the test in establishing that there
is a serious issue to be tried.
Clearly, I cannot say that the claim of the plaintiff as to the issue of
possible confusion is frivolous.
Demonstrating Irreparable Harm
The plaintiff must satisfy the Court that it will suffer irreparable harm if an
injunction is not granted. On this issue, Justices Sopinka and Cory stated the
following at page 341 of RJR MacDonald, supra:
At this stage the only
issue to be decided is whether a refusal to grant relief could not be remedied
if the eventual decision on the merits does not accord with the result of the
refers to the nature of the harm suffered rather than its magnitude. It is harm
which either cannot be quantified in monetary terms or which cannot be cured,
usually because one party cannot collect damages from the other. Examples of the
former include instances where one party will be put out of business by the
court"s decision (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th
) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or
irrevocable damage to its business reputation (American Cyanamid, supra); or
where a permanent loss of natural resources will be the result when a challenged
activity is not enjoined (MacMillan Bloedel v. Mullin,  3 W.W.R. 577 (B.C.C.A.)).
The fact that one party may be impecunious does not automatically determine the
application in favour of the other party who will not ultimately be able to
collect damages, although it may be a relevant consideration (Hubbard v. Pitt,
 Q.B. 142 (C.A.)).
This stage of the test was reiterated by the Federal Court of Appeal in Turbo
Resources Ltd. v. Petro Canada Inc. (1989), 24 C.P.R. (3d) 1 (F.C.A.)
at pages 463-464 as follows:
(a) Where a
plaintiff"s recoverable damages resulting in the continuance of the
defendant"s activities pending trial would be an adequate remedy that the
defendant would be financially able to pay, an interlocutory injunction should
not normally be granted;
(b) where such damages
would not provide the plaintiff an adequate remedy but damages (recoverable
under the plaintiff"s undertaking) would provide the defendant with such a
remedy for the restriction on his activities, there would be no ground for
refusing an interlocutory injunction.
It has been well established in the jurisprudence of this Court that there must
be clear and unequivocal evidence of irreparable harm in order to satisfy this
stage of the three-part test. Rothstein J. discussed the nature of the evidence
required to satisfy this stage in The Sports Authority Inc. v. Howard
Vineberg et al.,  F.C.J. No. 622 at page 3 in the following terms:
Mere assertions of loss
of distinctiveness, harm to goodwill or lost sales per se are insufficient to
prove irreparable harm. In a quia timet application such as the one at bar,
there is no evidence of actual harm because the alleged infringing or passing
off is not yet in the marketplace. Therefore, logical inferences must be drawn.
However, loss of distinctiveness, harm to goodwill or loss of sales cannot be
inferred simply from evidence of confusion. To demonstrate irreparable harm, an
applicant must lead clear evidence showing how such harm will occur and why it
will be irreparable. In the absence of such evidence, there is nothing on which
an inference of irreparable harm can reasonably and logically be based.
Applying the reasoning set out in the above cited cases to the facts before the
Court, in my view there may be evidence of confusion between the trade-marks of
Imax and Showmax to satisfy the first part of the test, that is, a serious issue
to argue. Firstly, the affidavit of G. Mary Ruby states at page 3, paragraph 7,
that Showmax is exhibiting an image of an Imax theatre in its promotional
materials. Specifically, the image from the film Skyward on screen at the
Bradford Imax theatre at the National Museum of Photography, Film and Television
in Bradford, England.
Secondly, I am satisfied that the Showmax website does contain images of the
Imax theatre at the Old Port of Montreal and that it is reasonable to conclude
that consumers would infer that the proposed Showmax theatre is operated and
controlled by the same entity as the Imax theatre.
It is relevant to these proceedings to consider the decision of the Federal
Court of Appeal in Centre Ice Inc. v. National Hockey League
(1994), 53 C.P.R. (3d) 34 (F.C.A.) which held that evidence of confusion is
insufficient to infer the existence of irreparable harm and to satisfy the
second stage of the test the plaintiff must show actual evidence of a loss of
goodwill or reputation:
In am unable to
agree that a finding of confusion between competing products necessarily leads
to a loss of goodwill for which the plaintiff cannot be compensated in damages.
A similar issue was considered by the Alberta Court of Appeal in Petro-Canada
Inc. v. Good Neighbour Fast Food Stores Ltd. (1987) 18 C.P.R. (3d) at pp. 63-64.
Kearns J.A. speaking for the Court said: The suit here sounds in passing off,
and the first category of harm alleged is diminution of goodwill as a result of
confusion of names in the minds of reasonable persons. There is evidence in the
material presented by the applicant to indicate that it is reasonable for him to
allege the existence of confusion. That kind of confusion, as we have said in
other suits, leads to loss of "name" goodwill the loss of which in the
normal course is a kind of damage which, when suffered by a commercial firm in
the ordinary course, is fairly readily calculable and therefore can be fairly
compensated for in damages.
On the basis of that
decision, which I find persuasive, even if loss of goodwill through the use of a
confusing mark was shown, a case for irreparable harm would not have been made
out because such loss could be fairly compensated for in damages.
On the issue of irreparable harm, it must be remembered that the defendant has
not, as yet, commenced operations of a large-format theatre using the name of
Showmax. Therefore, how does plaintiff show evidence of irreparable harm, such
as loss of goodwill and loss of sales due to confusion.
The plaintiff filed the affidavit of Michael R. Pearce, Associate Dean (Programs)
at the Richard Ivy School of Business at the University of Western Ontario. In
paragraphs 1 to 8 of his affidavit can be found Dr. Pearce"s qualifications.
As in the case of Dr. Senders and Dr. Liefeld, Dr. Pearce"s qualifications
I accept the conclusions of Dr. Pearce on the issue of irreparable harm as I
have nothing before me to contradict what Dr. Pearce states in his affidavit.
It is important to note Dr. Pearce"s mandate and the facts that he was
asked to assume.
9. In November 1999, I
was contacted by Mark Robbins of the law firm of Bereskin & Parr, and asked
to provide my opinion regarding the probability of harm and the nature of the
harm that Imax Corporation ("Imax") will suffer, if any, if the
defendants Showmax,Inc. And Showmax Montreal, Inc. ("Showmax") begin
use of SHOWMAX as the name for a large format movie theatre in Montreal.
10. For the purpose of
rendering an opinion, I reviewed the following documents that were provided to
me by Mark Robbins: the Amended Statement of Claim, Showmax"s Amended
Statement of Defence, the plaintiff"s Notice of Motion for an interlocutory
injunction, the affidavit of G. Mary Ruby sworn August 24, 1999, and the
affidavit of John W. Senders sworn August 20, 1999. In addition, I looked at
photographs showing SHOWMAX banners which I was told hang on the exterior of the
Montreal Forum Entertainment Centre, and I reviewed the showmax.com internet
11. I have not
been asked to assess the facts set out in the documents but rather I have been
asked to assume for the purposes of this opinion that the following facts are
true: (i) that Imax operates a chain of large-format movie theatres under the
IMAX and OMNIMAX names; (ii) that Imax operates IMAX large-format movie theatres
in Montreal; (iii) that the IMAX name is a recognized trade mark in Montreal; (iv)
that Showmax intends to open a large-format movie theatre in Montreal under the
name SHOWMAX; and (v) that the IMAX and SHOWMAX names are likely to be confusing
when used with large-format movie theatres in Montreal.
In paragraphs 12 and 13 of his affidavit, Dr. Pearce gives a summary of his
12. Regarding the
likelihood of damage, it is my opinion that Imax will suffer serious damage to
its goodwill if the defendants use the SHOWMAX name with a large-format movie
theatre in Montreal. The damage would arise once the SHOWMAX theatre received
publicity, and it would become increasingly more serious after the theatre
opened and carried on business using the SHOWMAX name.
13. Regarding the
nature of the damage, it is my opinion that use of the SHOWMAX mark will damage
the brand meaning or equity of the IMAX mark (that is, the ability of the IMAX
mark to act as a distinctive and unique signifier of the plaintiff"s movie
theatres). The IMAX mark will no longer identify and distinguish theatres
controlled by Imax as strongly and clearly as it did before use began of the
confusing SHOWMAX mark. In my opinion, confusion will not only result in lost
sales, but also will cause damage to good will and to the value of the IMAX mark.
This latter type of damage will be impossible to calculate in monetary terms or
to remedy by restorative measures after it is inflicted.
As I have said, I am satisfied that I have no evidence of any value that
convinces me that Dr. Pearce is wrong when he states that Imax will suffer
"serious damage" to its goodwill and that use of the Showmax mark
"will damage the brand meaning or equity of the Imax mark. He also states
in paragraph 13 "In my opinion, confusion will not only result in lost
sales, but also will cause damage to goodwill and to the value of the IMAX mark.
This latter type of damage will be impossible to calculate in monetary terms or
to remedy by restorative measures after it is inflicted".
The balance of Dr. Pearce"s affidavit gives his reasons for the above
Now I have said that defendant did not file any evidence to contradict Dr.
Pearce"s expert evidence. Defendant does say that Dr. Pearce bases his
expert opinion on an assumption that is incorrect, that is, that there exists
confusion as found by Dr. Senders. Defendant states that if there is no
confusion then Dr. Pearce could not find any irreparable harm.
I agree with the defendant"s submission, except that, as I have already
said, I accept Dr. Senders finding on the issue of confusion for the purpose of
this application for an interlocutory injunction.
Therefore, and basing myself on the affidavit evidence of Dr. Pearce, I am
satisfied that plaintiff will suffer irreparable harm if the defendant were to
be permitted to open a large-format theatre under the name of SHOWMAX in Canada
and in Montreal particularly.
I am satisfied that the balance of convenience favours the plaintiff. The
defendant has not commenced doing business in Canada. In Montreal, the only
expense that defendant has incurred are the cost of the sign on the Montreal
Forum Building and the costs of pamphlet advertising the eventual opening of a
These costs are relatively insignificant.
Having thoroughly reviewed the documentary evidence submitted by the plaintiffs
and having heard the oral submissions, I am satisfied that inferences can be
drawn from the evidence so as to conclude that it is reasonable for the
plaintiff to allege the existence of confusion. However, this in itself is
In my opinion, there are numerous pieces of evidence before the Court which lead
me to believe, for the purpose of showing a serious issue and irreparable harm,
that the evidence of confusion is clear and sufficient to support an inference
of loss of "name" goodwill and reputation.
It is correct to say that the plaintiff has not adduced any evidence of loss of
sales. This, of course, is true. The defendant has not commenced business in
Montreal and therefore one cannot adduce direct evidence of loss of sales. I
accept the statement of Dr. Pearce in paragraph 22 of his affidavit.
22. In my opinion, it
is usually the case that a company will lose some or all of the ability to
benefit from the retail brand equity in its name, if a competitor adopts a
confusing name. Aside from the issue of lost sales or profits (which may be
quantifiable), the lost equity in a name undermines the ability of the company
to position itself in the marketplace, and to further develop and enhance its
business in the future. Once a name loses its unique or distinctive quality, it
is impossible to determine the value of what has been lost in terms of the
company"s ability to expand and market itself in the future.
This evidence clearly indicates the nature of the harm that plaintiff would
suffer if defendant would be permitted to commence to use Showmax for
Furthermore, in paragraph 23, Dr. Pearce states:
23. I have not been
asked to comment on the research study conducted by Dr. John Senders other than
to assume, for the purpose of my affidavit, that the results are sound and
accurate. The research study conducted by Dr. Senders shows that theatre-goers
are likely to believe that a SHOWMAX theatre is operated by the same
organization as an IMAX theatre or that they are at least associated. In other
words, the study shows that a significant number of theatre-goers are likely to
For the above reasons, the application for an interlocutory injunction is
allowed with costs.
January 18, 2000
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