Speculative Harm Insufficient For Equipment Rental Injunction

HERC Equipment Rentals operates a construction and industrial equipment rental business in Hamilton and Mississauga. HERC and HERTZ (the car rental company) have had business dealings for 15 years and have operations in close proximity to each other. In March 2014, HERTZ announced its plan to make its equipment rental business a stand-alone business and further announced that this stand-alone business would be known as Herc Rentals.

In March 2016, Hertz commenced an action seeking a declaration that it is the owner of three registered Canadian trademarks: HERTZ, HERTZ EQUIPMENT RENTAL, and HERC 360 & Design. HERC filed its defence and a counterclaim against HERTZ seeking a declaration that it is the owner of the HERC Trademark.

In July 2016, HERTZ sent letters to its Canadian customers stating:

As a highly valued supplier of Hertz Equipment Rental Corporation, we want to advise you that as of June 10, 2016, we have changed our name in the United States to Herc Rentals Inc.

In Canada, we will continue to do business as Hertz Equipment Rental Corporation.

HERC moved for an injunction restraining HERTZ from using the HERC trade-mark. The issue before Justice Zinn was whether HERC met the tripartite test for an injunction as articulated by the Supreme Court of Canada in RJR MacDonald, namely:

  1. a serious issue to be tried;
  2. that it will suffer irreparable harm if the injunction is not granted; and
  3. that the balance of convenience favours the granting of an injunction.

Justice Zinn noted that there was very little direct evidence of confusion, especially given that the Herc name was not to be used in Canada:

[15] I note that there is very little direct evidence of confusion provided by HERC notwithstanding the adoption of the Herc name by the Plaintiffs has been known for many months.  I further note that there is no evidence of even one lost sale or rental as a result.  Most importantly, the letter from HERTZ advising that the Herc name will be used by it only in the United States of America and not Canada, strongly supports that confusion in Canada is unlikely.

While HERC asked the Court to infer irreparable harm to its goodwill and reputation, the Court concluded that it could not do so, particularly in light of the evidence that Hertz would not be identifying itself as Herc in Canada. For this same reason, the Court concluded that the possibility of loss to HERC was mere speculation and conjecture.

On the balance of convenience, Justice Zinn held that HERC has waited too long in seeking an injunction:

[17] I am also not persuaded that the balance of convenience rests with HERC given its dilatory conduct.  I agree with the submission made by HERTZ that those who seek an interim injunctive remedy must act promptly.  HERC has known of the issue with HERTZ adopting the Herc name for many months and did nothing until this action was commenced.

HERC’s motion for an injunction was denied. A copy of the decision can be found here.