When Circuit City purchased InterTan, RadioShack’s former Canadian subsidiary, it continued to operate the InterTan stores under the RadioShack name. RadioShack, concerned that its brand in Canada would be controlled by its competitor at home, sought a temporary injunction in the 352nd District Court of Texas, asking that Judge Bonnie Sudderth temporarily halt the practice. At the time the lawsuit was filed, InterTan operated 500 RadioShack stores and 340 RadioShack dealerships in Canada.
RadioShack had terminated its licensing, advertising and merchandising agreements with InterTan a year before, but InterTan argued that such agreements didn’t expire until 2010. Judge Bonnie Sudderth disagreed, and at the temporary injunction hearing she determined that RadioShack had not wrongfully terminated the agreements with InterTan. Judge Sudderth also ordered Circuit City to stop using the RadioShack brand name on products in the Canadian stores that it had acquired. Although her order was issued on March 24, 2005, it would not be effective until approximately three months later, on July 1, 2005.
Circuit City, who offered no reason for wanting to keep the RadioShack brand name in Canada, indicated that it would appeal the decision. A spokesman for Circuit City commented that the electronics store intended to “use every means of relief possible” to exercise its rights under the agreements, “including all appeal rights.” No appeal was filed, however, and some time thereafter the companies entered into settlement negotiations.
Judge Sudderth’s ruling effectively ended InterTan’s affiliation with RadioShack, and arguably allowed for the possibility of RadioShack opening its own stores in Canada at some later date. Approximately one year after her ruling, the parties submitted to Judge Sudderth an agreed stipulation, indicating that the companies had settled their differences. Judge Sudderth later signed an order of dismissal, ending the litigation.