Community Credit Union Ltd. v. Registrar of Trade-marks, 2006 FC 1119

 

 

 

 

Date: 20060919

Docket: T-1568-05

Citation: 2006 FC 1119

Ottawa, Ontario, September 19, 2006

PRESENT:     The Honourable Mr. Justice Mosley

 

BETWEEN:

COMMUNITY CREDIT UNION LTD.

Applicant

 

and

 

REGISTRAR OF TRADE-MARKS,

CREDIT UNION CENTRAL OF CANADA and

COMMUNITY SAVINGS CREDIT UNION

Respondents

 

 

REASONS FOR JUDGMENT AND JUDGMENT

 

[1]               This is an application for an appeal pursuant to section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the “Act”), to set aside the decision of the Registrar of Trade-marks, dated July 13, 2005, refusing an application to register the trade-mark Community Credit Union.

 

[2]               The applicant, Community Credit Union Ltd. (“CCU”), was formerly known as "Medicine Hat Savings & Credit Union Ltd".  In 1986, as it was operating in other towns in southern Alberta and wished to emphasize its local business base, the firm decided to create a new image or “brand”. It chose the name Community Credit Union. While the evidence indicates that the applicant began to use that name late in 1986, it did not change its corporate name until February 11, 1994.

 

[3]               The respondent, Credit Union Central of Canada ("Central"), is the national trade association for the credit union system in Canada. 

 

[4]               The respondent, Community Savings Credit Union ("Savings"), was established in 1944 under the trade name I.W.A. (New Westminster) Credit Union.  On April 12, 1979 it changed its name to I.W.A. and Community Credit Union. On November 16, 1998, it changed its name again, to its present name of Community Savings Credit Union.

 

[5]               On June 29, 1999 the applicant sought to register the mark "Community Credit Union" (the "mark") for use with credit union services. At that time, CCU was the owner of the trade-mark Community Credit Union & Design filed in February, 1996 and registered in September, 1997. The applicant maintains that it was not aware that the words, "Community Credit Union" had been disclaimed in the application for the design registration, until sometime after the trade-mark was registered. This prompted the application for registration of the mark, and publication for opposition purposes in the trade-marks journal of June 7, 2000. On December 12, 2000 both respondents (then opponents), each filed a statement of opposition against the mark application.

 

[6]               The grounds of opposition, although filed separately, are substantially similar and can be  summarized as follows: 

1.      The mark application did not comply with the requirements of subsection 30 (i) of the Act (raised by Central only).

2.      The mark application did not comply with the requirements of subsection 30 (b) of the Act because the applicant had not used to the alleged trade-mark since the date claimed in the application.

3.      The alleged trade-mark was not registrable within the meanings of paragraphs 12 (1) (b) and (c), because the words "Community Credit Union" were descriptive of the services recited in the mark application.

4.      The alleged trade-mark was not distinctive within the meaning of section 2 of the Act.

5.      The applicant was not entitled to register the trade-mark pursuant to paragraph 16 (1) (a) of the Act (raised by Savings only).

 

[7]                In her decision dated July 13, 2005, the Trademarks Opposition Board member (board member) came to the following conclusions regarding each ground of opposition:.

1.      This ground failed because the opponent failed to establish that the applicant had knowledge that the mark was clearly descriptive or non-distinctive.

2.      This ground succeeded because the applicant failed to file evidence before the board which positively established its claim date of first use.

3.      This ground was not dealt with as it was unnecessary to do so given the other findings.

4.      This ground succeeded because the words “Community Credit Union” were inherently non-distinctive as they would be interpreted as referring to the services of a credit union that is located locally, services a certain segment of the population, and takes into account community interests. Furthermore no evidence was presented to show that the mark had acquired distinctiveness throughout Canada.

5.      This ground failed because the opponent, Savings, failed to meet its initial burden to show non-abandonment.  Savings had put forward no evidence to show that it had not abandoned the mark as of the date of the advertisement of the application June 7, 2000.

[8]               As a result of these findings, the Registrar refused registration of the mark pursuant to subsection 38 (8) of the Act. The applicant filed two applications to appeal the Registrar's decision which were consolidated and the two respondents were joined in the present proceedings.

 

ISSUES

[9]               The following issues were identified:

1.      What is the appropriate standard of review?

2.      Did the registrar err in fact and law in holding that the applicant had not positively established the claimed date of first use?

3.      Did the registrar err in not considering the section 12 (1) (b) ground of opposition?

                                                               i.      In the event that the registrar erred, is the mark clearly descriptive of the character or quality of the services in association with which it is used?

4.      Did the registrar err in fact and law in holding that the mark was inherently non-distinctive within the meaning of section 2 of the act?

 

RELEVANT LEGISLATION

 

[10]           Sections 2, 12 (1), 30, 38 (2), and 56 (1) of the Act are as follows:

 

ANALYSIS

           

1. Standard of review

 

[11]           Where evidence has been filed on appeal that would have materially affected the Registrar's findings of fact or law, or the exercise of discretion, the standard should be one of correctness. In such cases, the Court is entitled to substitute its opinion for that of the Registrar: Telus Corp.v. Orange Personal Communications Services Ltd. (2005), 39 C.P.R. (4^th) 389, 2005 FC 590 at para. 24.

 

[12]           The quality of the new evidence must be considered.  If it adds nothing of significance and is merely repetitive of existing evidence without enhancing its cogency, the question will be whether the registrar was clearly wrong. As such, the presence of the evidence should not affect the standard of review applied by the Court on the appeal: Garbo Group Inc. v. Harriet Brown & Co., [1999] F.C.J. No. 1763 (QL), 3 C.P.R. (4th) 224 (T.D.) at paras. 35-37.

[13]           The expertise of the registrar has been recognized to require some deference. In Molson Breweries v. John Labatt Ltd. [2000] 3 F.C. 145 (C.A.) at para. 29, 5 C.P.R. (4^th) 180 [Molson Breweries cited to F.C.], the Federal Court of Appeal concluded that the applicable standard of review on appeal from the registrar was reasonableness.

 

[14]           The parties are generally in agreement that with the exception of the issue regarding the claimed date of first use, the registrar's decision should be assessed on a reasonableness standard.  The applicant submits that it has adduced new evidence that would have materially affected the registrar's findings, which both respondents dispute. That is the only question which requires review on the correctness standard, should the applicant be successful in demonstrating the evidence is new. With respect to the other issues, the court may only intervene if there is no line of analysis within the reasons that could reasonably lead the board from the evidence before it to the conclusion at which it arrived: Wrangler Apparel Corp. v. Timberland Co., [2005] F.C.J. No. 899,  2005 FC 722 at para. 12; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20 at para. 55.

 

2. Did the Registrar err in holding that the applicant had not established the claimed date of first use?

 

[15]           Section 30 (b) of the Act provides that an applicant for registration of a trade-mark based on use shall file with the registrar an application containing the date from which the applicant or his named predecessors in title, if any, have so used the trademark in association with each of the general classes of wires or services described in the application. What constitutes use is a question of law.  An affiant must establish facts from which a conclusion of use can follow.  Ambiguities are to be resolved against the applicant: Condé Nast Publications Inc. v. Union des Editions Modernes (1979), 46 C.P.R. (2d) 183 (F.C.T.D.)

 

[16]           Before the Registrar, the applicant had claimed use of the mark in Canada “as early as November, 1986”. In support, the applicant filed the affidavit of Mr. Murray Haubrich, Executive Vice-President, with exhibits including the applicant’s annual report for 1986. Mr. Haubrich was cross-examined on his affidavit and conceded that the report was not printed and distributed until January or February of 1987. He was unable to provide the dates of publication of other material.

As a result, the board found that the opponents had satisfied their evidentiary burden, and because the applicant had not filed evidence positively establishing its claimed date of first use, the applicant had not satisfied its legal burden.

 

[17]           The new evidence submitted by the applicant in these proceedings consists of a fresh affidavit from Mr. Haubrich and an affidavit from another officer of the company, Jerry Baytalan, attaching as exhibits: advertisements from the Medicine Hat News dated October 4, 1986 and October 11, 1986; business cards used in the period of time after the date of the claim to first use; advertisements from the Medicine Hat News dated February 12, 1987, February 21, 1987, February 1, 1988, February 11, 1988, February 10, 1990, and February 11, 1990; a document entitled "Suggested Goals for 1987 for Murray H. Haubrich"; an interest rate sheet from October 29, 1993; "Minutes of the Board of Directors Meeting in July 31, 1986"; and the Medicine Hat Credit Union Ltd. 1986-1987 “Strategic Business Plan”.

 

[18]           Save for the Medicine Hat News advertisements dated October, 1986, all of these exhibits are either undated or date from after the claimed date of first use. They do not assist the applicant with respect to the standard of review or in resolving the section 30 (b) issue in its favour.

 

[19]           Submissions at the hearing thus focused on the October advertisements. Both demonstrate an effort to use the words "Community Credit Union" as a means of self identification.  However neither displays the mark as it was framed in the mark application, i.e., they do not show the use of Community Credit Union as a trade-mark. In the October 4, 1986 advertisement, the following words appear, all in uniform font: "the Community Credit Union of Medicine Hat …” In the October 11, 1986 advertisement, these words appear, again in uniform font size: "and of course, everyone is eligible to do their banking at the Community Credit Union…share the advantage of doing your banking at a Community Credit Union".  

 

[20]           The October 11, 1986 advertisement is the most helpful to the applicant as it refers to Community Credit Union without the qualifier, "of Medicine Hat".  In neither advertisement, however, is the format and wording used consistent with the mark in contrast to the post- "claimed date of use" exhibits.

 

[21]           While the applicant has provided some evidence that the words "Community Credit Union" were used in advertisements before the claimed date of first use, the question is whether this evidence would have materially affected the Registrar's findings. The mere existence of additional evidence is not enough to displace the deference owed to the Registrar.

 

[22]           As noted by Justice Carolyn Layden- Stevenson in Vivat Holdings Ltd. v.  Levi Strauss & Co. [2005] F.C.J. No. 893, 2005 FC 707 at paragraph 27 :

To affect the standard of review, the new evidence must be sufficiently substantial and significant.  If the additional evidence does not go beyond what was in substance already before the board and adds nothing of probative significance, but merely supplements or is merely repetitive of existing evidence, then a less deferential standard is not warranted.  The test is one of quality, not quantity.  [Citations excluded]

 

[23]           In my view, the new evidence merely supplements the evidence that was before the board that the applicant was in the process of making the transition from one identity to another in the fall of 1986, one that would minimize its connection to the City of Medicine Hat and promote its business in other communities as local in nature. It had not clearly established its use of the new "brand" by November 1986. I am not satisfied that had the applicant submitted this evidence at the opposition hearing it would have materially affected the board's  findings thus requiring a correctness standard of review and substitution of the Court’s opinion for that of the Registrar.

 

Did the registrar err in not considering the s. 12 (1) (b) (“clearly descriptive”) ground of opposition?

 

[24]           The applicant submits that the registrar erred in fact and in law in failing to determine that the mark was not "clearly descriptive of a character or quality of the... services," as this would have been instrumental to any determination of non-distinctiveness, under the expansive definition of "distinctive" used by the Registrar. The applicant submits that the Registrar went beyond the Act's definition of distinctive to include very generic marks as non-distinctive marks.

 

[25]           The respondents submit that having found the mark non-distinctive, the registrar was correct in not considering further grounds of opposition as it would have made no difference to the applicant. Had it been considered by the board, the ground would have succeeded according to the respondents.

 

[26]           In Canadian Council of Professional Engineers v. APA-Engineered Wood Assn., [2000] F.C.J. No.1027 at para. 49, Justice Jack O'Keefe held that the registrar erred in holding that a ground of opposition on the basis of non-distinctiveness was merely repetitive of the argument that the trade-marks were clearly descriptive. Subsection 38 (2) clearly indicates that the two grounds of opposition are not the same. A statement of opposition may be based on the grounds, among others, that the trade-mark is not registrable or that it is not distinctive. Under paragraph 12 (1) (b), a trade-mark is registrable if it is not either clearly descriptive or deceptively misdescriptive of the character or quality of the wares or services in association with which it is used.  Justice O'Keefe concluded that the question of the distinctiveness of the proposed marks ought to have been considered independently. A finding of descriptiveness is not instrumental to a finding of non-distinctiveness. The two are separate grounds of opposition and need not be argued together.

 

[27]           In the decision under review, the board member followed and applied Justice O'Keefe's reasoning that the distinctiveness of the proposed mark must be considered independently. She then concluded that it was not necessary to deal with the ground as the application was refused on to other grounds. In my view it was not unreasonable of the board member to have done so.

 

[28]           In the event that I am wrong in this regard and the Registrar erred in not considering the ground, I am satisfied that the mark is clearly descriptive of the character of the services to be provided in association with its use.

 

[29]           The rationale underlying the prohibition against descriptive marks is that no trader can monopolize a common property which anyone in the trade has the right to use: Partlo v. Todd (1888), 17 S.C.R. 196 at 223. In assessing the descriptiveness off the mark, it is the immediate impression of the mark as a whole that must be analyzed, not its component parts. The impression created is to be evaluated from the point of view of the ordinary everyday purchaser or user of the wares or services: Mitel Corp. v. Registrar of Trademarks (1984), 79 C.P.R. (2d) 202 at 208 (F.C.T.D.).

 

[30]           One cannot obtain an exclusive proprietary right in an ordinary word that aptly describes the services of others. I agree with the respondents that registration of the mark COMMUNITY CREDIT UNION would remove the word "community" from the vocabulary available to others providing the services of a credit union.

 

Did the registrar err in fact and law in holding that the mark was inherently non-distinctive within the meaning of section 2 of the act?

 

[31]           The applicant has raised several arguments in respect of this issue. Firstly, that the registrar erred in finding that the mark was inherently non-distinctive due to its being "very generic". Secondly, that the registrar erred in finding that because the mark does not contain a further independently distinctive word (like the other marks in evidence) it does not actually distinguish.  Thirdly, that given the vague and ubiquitous nature of the word "community" and given that a provider of any kind of service would have some connection to the community in which they are located, the word cannot suffer from being inherently non-distinctive.

 

[32]           The affidavit evidence submitted by the respondents demonstrates that the words "Community Credit Union" were common to the credit union trade as of the material date of December 2000 when the statement of opposition was filed and have been used by numerous credit unions across the country for many years. A corporate records search demonstrated that the words had been used by at least 58 credit unions in Canada since 1980. What enables consumers to separate one of these credit unions from another are the parts of their names other than "Community Credit Union" such as Greater Vancouver, Cornwall, North York, or indeed, Medicine Hat. The words "Community Credit Union" cannot identify one from the other because they are, and were at the material date, common to the credit union trade.

 

[33]           The registrar correctly noted that there are two types of distinctiveness: inherent distinctiveness and acquired distinctiveness. As stated in Hughes on Trademarks, 2^nd ed. (Markham: LexisNexis Canada Inc., 2005) at 648.

A mark is distinctive when nothing about it refers the customers to a multitude of sources.  Consequently when a mark is a unique or invented name, such that it could only refer to one thing, it is possible to conclude that it is inherently distinctive.

 

[34]           The Registrar concluded that the mark was inherently non-distinctive because there were many credit unions in Canada that used “Community Credit Union” in their trade names or trademarks. The Registrar then considered whether the mark had acquired distinctiveness by use throughout Canada. The board member concluded that the evidence showed only that the mark may have acquired distinctiveness in some parts of Alberta but there was no evidence that it had been used or made known across Canada.

 

[35]             In reaching this conclusion, the board member relied on the decision of the Trade-marks Opposition Board in Muffin Houses Inc. v. The Muffin House Bakery Ltd. (1985), 4 C.P.R. (3d) 272. The board member was aware that the Federal Court of Appeal has stated that exclusive use is not mandatory for a finding of distinctiveness: Molson Breweries above at para. 69. However that decision also stands for the proposition that the use of the same mark by others in association with similar wares (or services) is relevant in determining whether a mark is in fact distinctive. 

 

[36]           A mark may become distinctive in a particular geographical area. However, there was considerable evidence before the Registrar and in these proceedings that the mark was commonly used within the trade in every region. Distinctiveness will depend upon all of the circumstances. In this case, the circumstances clearly pointed to an absence of distinctiveness and I cannot find that the Registrar erred in that finding.

 

[37]           In the result, I am satisfied that the line of reasoning supporting the Registrar's decision demonstrates that it is not clearly wrong or unreasonable. Had I determined that less deference was warranted, I would have arrived at the conclusion that the decision is correct. The appeal will, therefore, be dismissed.

 

[38]           The respondent Savings has requested costs if successful, Central has not. The Court will exercise its discretion to order that each party bear its own costs.

 

IT IS HEREBY ORDERED AND ADJUDGED that the appeal is dismissed. The parties shall bear their own costs.

 

“Richard G. Mosley”

FEDERAL COURT

 

SOLICITORS OF RECORD

 

DOCKET:                                          T-1568-05

 

STYLE OF CAUSE:                          COMMUNITY CREDIT UNION LTD. AND

                                                            THE REGISTRAR of TRADE-MARKS,

                                                            COMMUNITY SAVINGS CREDIT UNION,

                                                            CREDIT UNION OF CANADA

 

PLACE OF HEARING:                    Calgary, Alberta

 

DATE OF HEARING:                      September 13, 2006

 

REASONS FOR JUDGMENT:       MOSLEY J.

 

DATED:                                             September 19, 2006

 

APPEARANCES:

 

Neil Kathol	FOR THE APPLICANT
Jane Steinberg     David Wotherspoon	FOR THE RESPONDENT Credit Union Central of Canada   FOR THE RESPONDENT Community Savings Credit Union

 

SOLICITORS OF RECORD:

 

NEIL KATHOL Brownlee LLP Calgary Alberta	FOR THE APPLICANT
JANE STEINBERG Gowling Lafleur Henderson LLP Ottawa, Ontario	FOR THE RESPONDENT Credit Union Central of Canada
DAVID WOTHERSPOON Fasken Martineau DuMoulin LLP Vancouver, B.C.	FOR THE RESPONDENT Community Savings Credit Union
JOHN H. SIMS, Q.C. Deputy Attorney General of Canada	REGISTRAR OF TRADE-MARKS