Date: 20060912
Docket: T-600-05
Citation: 2006 FC 1077
Ottawa, Ontario, the 12th day of September, 2006
Present: the Honourable Mr. Justice de Montigny
BETWEEN:
INDUSTRIES
LASSONDE INC.
Applicant
and
SUN PAC FOODS LIMITED
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The appeal at bar was filed pursuant to section
56 of the Trade-Marks Act, R.S.C. 1985, c. T-13 (the Act), from a
decision by a member of the Trade-marks Opposition Board (the Board) on
February 10, 2005. In that decision the Board, whose members exercise
powers delegated to them by the Registrar of Trade-marks (the Registrar),
dismissed the applicant’s application to register the brand name FRUITÉ (the
Mark) in association with fruit juices and non-alcoholic fruit drinks. This
application was filed by the applicant on January 19, 1998 based on the use it
had allegedly made of this mark since July 10, 1987.
[2]
It appeared that A. Lassonde Inc., the
predecessor in title of the applicant Industries Lassonde Inc. as to the rights
in the marks concerned in the appeal at bar, had used the pictorial mark FRUITÉ
Design and the brand name FRUITÉ in association with fruit juices and fruit
drinks since at least July 1987, the date on which the products were launched
and marketed.
[3]
In its decision the Board essentially concluded
that the registration application could not be allowed because the Mark was not
distinctive and because several entities had used the Mark. However, it should
be noted that the Board came to this conclusion after rejecting the affidavit
of Jean Gattuso, president and general manager of the applicant, who could not
be thoroughly cross-examined by the respondent as a result of the unacceptable
conduct of Mr. Gattuso’s representative. This situation, which the Board was at
pains to deplore, compelled it to make a decision in the absence of evidence on
key points such as sales figures and advertising costs for the juices and
drinks sold in association with the Mark.
[4]
In view of Mr. Gattuso’s new affidavit filed in the
proceedings at bar and the fact that the respondent notified the Court that it
would not take part in the appeal, I allow the application at bar and reverse
the Board’s decision. The following paragraphs set out the reasons which have led
this Court to conclude in this way.
BACKGROUND TO ISSUE
[5]
On January 19, 1998, A. Lassonde Inc. filed a
registration application for the brand name FRUITÉ on account of its use in
association with “fruit juices and non-alcoholic fruit drinks”. Despite the a
priori descriptive nature of the Mark, the Registrar concluded that it had
been used in Canada since July
1987 and had become distinctive at the time the application to register was
filed, in accordance with subsection 12(2) of the Act. Consequently, the Registrar
issued an appropriate notice of authorization on June 18, 1998 and published the
registration application in the Trade Marks Journal for opposition
purposes on July 22, 1998.
[6]
This decision was hardly surprising, considering
that he had previously allowed two registration applications by A. Lassonde
Inc. for the Mark FRUITÉ Design, and registered them in 1997. It should be
mentioned that A. Lassonde Inc. had filed an initial registration application
for the Mark FRUITÉ Design on May 25, 1989. At the review stage that application had been subject to an
objection on the ground that the Mark clearly described the wares in
association with which it was used, thereby contravening paragraph 12(1)(b)
of the Act. In response to this objection, A. Lassonde Inc. filed an affidavit
by Mr. Gattuso in which he set out the sales and annual advertising costs for
juices and drinks sold in association with the Mark FRUITÉ Design. Based on
that affidavit, the Registrar acknowledged that the Mark had become distinctive
in Quebec, Ontario and the Maritime provinces, and thus withdrew his objection
pursuant to subsection 12(2) of the Act. The Mark FRUITÉ Design was accordingly
registered as No. LMC477835 on June 16, 1997. It may be noted that the effects
of this registration were limited at that time to the provinces mentioned
above.
[7]
On February 28, 1994 this initial registration
application was followed by a second, again concerning the same Mark, FRUITÉ
Design. This application was also subject to an objection based on paragraph
12(1)(b) of the Act, and a second affidavit by Mr. Gattuso was filed to
again make use of the provisions of subsection 12(2) of the Act for this second
application. At that time, with the benefit inter alia of five
additional years of sales, the Registrar acknowledged that the Mark FRUITÉ
Design had become distinctive throughout Canada and registered the Mark as No. LCM485575 on November 17, 1997.
[8]
Despite the a priori descriptiveness of
the brand name FRUITÉ, it was predictable that the Registrar would conclude
that the Mark had become distinctive on the date the application was filed
based on the proof of use filed in connection with the two preceding
registration applications. On January 6, 1999 Sun Pac Foods Limited filed a statement of opposition, a copy of
which was sent to the applicant on March 2, 1999. The respondent’s grounds of
opposition were summarized by the Board as follows, at page 1 of the subject
decision:
1.
under the provisions of paragraph 38(2)(a)
of the Trade-Marks Act (the “Act”), this application does not meet the
requirements set out in section 30 of the Act, namely:
(a) the Applicant has not used the Mark since the date of
first use claimed in its application in association with the Wares (paragraph
30(b) of the Act);
(b) the Applicant could not be satisfied that it is entitled
to use the Mark given the descriptive nature of the Mark and its use by third
parties (paragraph 30(i) of the Act);
2.
under the provisions of paragraph 38(2)(b)
of the Act, the Mark is not registrable because:
(a) the Mark is clearly descriptive or deceptively
misdescriptive of the character or quality of the wares in association with
which it is used (paragraph 12(1)(b) of the Act);
(b) the Mark contravenes section 10 of the Act because it
has, by ordinary and bona fide commercial usage, become recognized as
designating the kind and quality of wares and has been used by many third
parties as it appears from the state of the register (paragraph 12(1)(c)
of the Act);
(c) the Mark is confusing with trade-marks previously used by
third parties, among them FRUITTI, which is registered under No. TMA319752 and TMA 340793, and is owned by
Ault Foods Limited (paragraph 12(1)(d) of the Act); and
(d) the word “FRUITÉ” was not so used by the Applicant as to
become distinctive within the meaning of section 2 of the Act at the date of
filing an application for registration (subsection 12(2) of the Act);
3.
under the provisions of paragraph 38(2)(d)
and section 2 of the Act, the Mark is not distinctive because:
(a) it is so clearly descriptive or deceptively
misdescriptive that it cannot be used to distinguish wares;
(b) the Applicant authorized licensees to use the Mark in
such a manner that the Mark is not distinctive, which breaches the provisions
of section 50 of the Act;
(c) third parties use similar marks.
[9]
Based on the evidence before it, the Board first
dismissed ground of opposition 2(b) described above on the basis that the
respondent had not alleged, as stipulated in paragraph 12(1)(c) of the
Act, that the Mark as such was the name of the wares described in the
registration application. It also considered that the respondent had not
discharged its initial burden of proof in respect of ground of opposition 1(a).
Finally, ground 1(b) was also dismissed because the respondent had not alleged
that the applicant must have known that the Mark was descriptive or used by
third parties. Paragraph 30(i) of the Act requires that at the time
a registration application is filed the applicant must submit “a statement that
[he] is satisfied that he is entitled to use the trade-mark in Canada”. Alternatively, the Board indicated
that if it was wrong on this ground, its fate would depend on the fate of
grounds of opposition 2(a) and (b) and 3. Presumably if the evidence showed
that the Mark FRUITÉ had not become distinctive as to the applicant’s wares at
the date the registration application was filed, the applicant could not be
satisfied or believe that it was entitled to use the Mark.
[10]
At the same time, the Board allowed grounds 2(a)
and (d), as well as grounds 3(b) and (c) as described above. The reason the
Board came to this conclusion was essentially that there was no evidence before
it that would have allowed it to disregard the objections by the respondent
based on subsection 12(2) of the Act. It appeared that the applicant’s
representative had been guilty of unacceptable conduct in cross-examination of
Mr. Gattuso, each question put by the respondent being systematically subject
to an objection or a request for clarification when the matter was only at the
preliminary stage and at the stage of defining the deponent’s role and
responsibilities with the applicant. Indeed, the atmosphere became so
unpleasant that the witness and his representative withdrew from the room
before the cross-examination could be completed. The respondent suffered a
serious hardship from the fact that it was not able to fully cross-examine the
deponent on the essential aspects of his affidavit, the purpose of which was to
establish the distinctiveness of the Mark, and the Board had no choice but to
associate this situation with a refusal to subject the deponent to
cross-examination. That is why it refused to consider the content of the
affidavit.
[11]
In view of the rejection of the affidavit signed
by Mr. Gattuso, the Board had no choice but to allow the objections made by the
respondent in view of the distinctiveness of the Mark and the use other
entities might have made of it. The gist of the Board’s reasons in this regard
is contained in the following two paragraphs from the decision, at page 18:
It appears from the summary of evidence filed by the Opponent that
the Opponent discharged its initial burden of proof regarding grounds 2(a) and
(d). Dictionary definitions clearly show that the word “FRUITÉ” is descriptive
of one of the characteristics of the Wares, namely that they are fruit juice or
fruit drinks. However, that evidence alone does not necessarily bar the
application for registration. Under the provisions of subsection 12(2) of the
Act, the Applicant could show that, on the date the application for
registration was filed, the Mark was distinctive. The affidavit used to show
the distinctiveness of the Mark was the affidavit from Jean Gattuso, which was
struck from the file for the reasons stated above. I therefore have to accept grounds
2(a) and (d) because the Applicant failed to show that the Mark is registrable.
Even if Mr. Gattuso’s affidavit were still in the file, the adverse
conclusion I drew from his refusal to be cross-examined, namely that several
entities used the Mark, without knowing the exact link between those entities,
means that I would conclude that the Mark was not distinctive from the Applicant
on the date the statement of opposition was filed. I therefore also allow
grounds of opposition 3(b) and (c) described above.
[12]
In view of this conclusion unfavourable to the
applicant, the Board did not see the need to analyze the other grounds of
opposition raised by the respondent, namely grounds 2(c) and 3(a).
[13]
The applicant appealed this decision on April 5, 2005. In its notice of appeal it asked
this Court not only to reverse the Board’s decision but also to direct the Registrar
to proceed to register the Mark FRUITÉ concerned in the registration
application No. 866595. In support of its appeal, the applicant submitted a new
affidavit by Mr. Gattuso, which included the affidavits it had already filed in
respect of registrations LMC477835 and LCM485575 mentioned above, as well as
the affidavit of Caroline Lemoine, director, legal affairs, Industries
Lassonde Inc.
[14]
None of the applicant’s deponents was
cross-examined by the respondent. Mr. Gattuso’s cross-examination was to have
taken place on November 1 and 2, 2005, but the respondent instead asked this
Court to hold a dispute resolution conference on those days in an effort to
conclude the matter along with another related case, namely Lassonde’s action
against Sun Pac for trade mark infringement, case T-393-98. Consequently, a
mediation meeting was in fact held on November 30 and December 1, 2005,
presided over by my colleague Roger Hughes J. Following that meeting,
Sun Pac was ordered not to take part in this appeal. Further, a letter to
this effect was filed with the Court on December 8, 2005, with the applicant’s
consent, stating that neither of the parties would seek costs in the matter.
ANALYSIS
[15]
The question that arises in the Court now is
whether the Board’s decision should be overturned, based on the information
provided by Mr. Gattuso in his affidavit and in the attached exhibits.
[16]
The leading case on appellate review of a
decision by the Board is Molson Breweries v. John Labatt Ltd.,
[2000] 3 F.C. 145, [2000] F.C.J. No. 159 (QL). In that case, the Federal Court
of Appeal held that unless there was new evidence the Court should act with
some restraint in considering the decision on appeal; on the other hand, when
new evidence was presented and the evidence was relevant, the Court should
arrive at its own conclusions, as indicated in paragraph 51 of the
judgment:
I think the approach in Benson & Hedges v. St. Regis and
in McDonald v. Silcorp are consistent with the modern approach to
standard of review. Even though there is an express appeal provision in the Trade-marks
Act to the Federal Court, expertise on the part of the Registrar has been
recognized as requiring some deference. Having regard to the Registrar's
expertise, in the absence of additional evidence adduced in the Trial Division,
I am of the opinion that decisions of the Registrar, whether of fact, law or
discretion, within his area of expertise, are to be reviewed on a standard of
reasonableness simpliciter. However, where additional evidence is
adduced in the Trial Division that would have materially affected the
Registrar's findings of fact or the exercise of his discretion, the Trial
Division judge must come to his or her own conclusion as to the correctness of
the Registrar's decision.
[17]
Consequently, inasmuch as this Court did not
have new evidence before it regarding the grounds dismissed by the Board, I see
no reason to question its conclusions on grounds 1(a) and (b) and 2(c).
However, what about the conclusion that the Mark is not distinctive?
[18]
Under subsection 12(2) of the Act, the applicant
must show that the trade mark it wishes to register, though it may be regarded
as descriptive, has acquired a second and distinctive overriding meaning during
its use in association with the wares or services with which it is associated.
The date that must be considered in determining this question is the date on
which the application to register the mark in question was filed. Further, it
will not be necessary to establish that the use of a mark is exclusive in order
to show distinctiveness: rather, the circumstances as a whole must be
considered and it must be shown that its use is significant enough for the mark
to be regarded as distinctive, in accordance with Molson Breweries v. John
Labatt Ltd., supra, at paragraphs 59 and 70.
[19]
It appeared from the affidavit filed by Mr.
Gattuso, the content of which must be taken as proven in the absence of
cross-examination, that sales figures for fruit juices and drinks sold in
association with the Mark since 1987, the date the registration application was
filed, have been steadily increasing, climbing from $2,154,104 in 1987 in
Quebec alone to $25,751,925 in 1998, this time in Quebec, Ontario and Western
Canada. In short, this represents a total of nearly $160,000,000 in sales of
fruit juices and fruit drinks in association with which the Mark was used for
the period from 1987 to 1998, or nearly 170,000,000 bottles sold in Canada during that period.
[20]
Investments to promote and advertise the said
wares sold in association with the Mark during that period totalled over
$5,000,000. These are significant amounts, in view of the fact that the products
sold are not expensive.
[21]
Further, I note that as indicated by a number of
copies of documents filed in support of Mr. Gattuso’s affidavit, the
applicant exercised diligence in respect of third parties not authorized to use
similar trade marks in association with drinks or other wares of the same type.
[22]
Finally, I must take into account the fact that
on two occasions the Registrar had already recognized that the Mark FRUITÉ
Design had become distinctive, in 1997 when he agreed to register the pictorial
mark first for Quebec, Ontario and the Maritimes, and then for all of Canada.
As I mentioned earlier, the Registrar came to this conclusion based on the
affidavits signed by Mr. Gattuso to counter the objections grounded on
paragraph 12(1)(b) of the Act, and those affidavits are essentially to
the same effect as the one filed in connection with the appeal at bar.
[23]
As regards the Board’s comments that the Mark
was not distinctive in view of the fact that “several entities used the Mark,
without knowing the exact link between those entities”, the affidavit by
Caroline Lemoine, an affidavit that was not before the Board, clarifies this
ambiguity. It appeared from that affidavit and from attached exhibits that on
July 19, 2000, A. Lassonde Inc. duly assigned to Industries Lassonde Inc. all
its rights in the mark FRUITÉ, including mark registrations LMC477835 and
LMC485575 for the Mark FRUITÉ Design and registration application 866595 which
is the subject of the case at bar. Any confusion that may exist between the corporate
names “A. Lassonde & Fils Inc.” and “A. Lassonde Inc.” results essentially
from a change of name that occurred in May 1992, by which the “& Fils” was
deleted from the corporate name. Accordingly, in light of the foregoing it
cannot be said that several entities used the Mark, which deprived it of its
distinctiveness. All the businesses using the name “Lassonde” were one and the
same entity.
[24]
Finally, I briefly consulted the evidence filed
by the respondent before it withdrew from the case. That evidence consisted of
two affidavits, one by Linda Palmer, a trade marks researcher, and one by
Andrea Jane Long, an attorney for the firm representing the respondent.
[25]
Ms. Palmer’s affidavit dealt with two trade mark
searches, the first regarding marks containing one of the words “fruité”,
“fruitée” and “fruity”, and the second containing the word “fruit” or its
plural. Although these searches indicate the presence of several marks on the Register
containing one of these words, they did not disclose any mark consisting only
of the word “FRUITÉ” in association with juice, drinks or similar wares, and of
course other than the Industries Lassonde mark. Nevertheless, that would not be
fatal: as I mentioned earlier, it is not necessary to show exclusive use of a mark
in order to establish distinctiveness.
[26]
At the same time, Ms. Long’s affidavit
established the existence of products, essentially of food and beverages, the
names of which included the word “fruit” or one of its derivatives. Inasmuch as
no juice, drink or similar ware sold in association with the mark “FRUITÉ” as
such was entered in evidence, the evidentiary value of this evidence is
somewhat limited. In any event, the products referred to by Ms. Long in her
affidavit were bought in various retail stores in May 2005. The relevant dates
for assessing the distinctiveness of a mark are the date the registration
application is filed, for an analysis under subsection 12(2) of the Act, and
the date a statement of opposition based on the absence of a mark’s distinctiveness
is filed, under section 2 of the Act.
[27]
For all the foregoing reasons, I have come to
the conclusion that the applicant has shown that the Mark was distinctive,
though it might be regarded as descriptive at first sight, and the objections
made by the respondent in its grounds of opposition 2(a) and (d), 3(b) and (4)
cannot be accepted. Further, I feel that ground 3(a) should also be dismissed
since this is only a rewording of the prohibition against registering a mark
which is either clearly descriptive or deceptively misdescriptive of the
character or quality of wares contained in paragraph 12(1)(b) of the
Act. The Mark FRUITÉ concerned in registration application No. 866595 may thus
be registered pursuant to subsection 12(2) of the Act.
[28]
There is still the respondent’s ground of
opposition 2(c), set out above, that the Mark is confusing with trade marks
previously used by third parties, among them FRUITTI & Design, registered
under LMC319752 and LMC340793 and owned by Ault Foods Ltd. As I mentioned
earlier, the Board did not rule on this ground, dealt with in paragraph 12(1)(d)
of the Act. The usual practice would therefore be to refer the matter back to
the Board so that, using its expertise, it could resolve this objection.
However, the applicant argued that this would delay registration of its Mark by
at least a year and that this Court should spare it this hardship by ruling on
the point forthwith. In view of the rather special circumstances of this case,
and in particular the order made by my colleague Hughes J. as a result of which
the respondent has for all practical purposes withdrawn from the case, I
therefore agree that I will consider this objection on an exceptional basis
without having the benefit of the analysis which the Board might have made of
it.
[29]
First, I note that the respondent did not
discharge its initial burden since it did not submit a certified copy of the
registrations with which it alleged that the Mark was confusing. The only thing
to be found in the record is a copy of the review record (at the opposition
stage) and the results of the mark research (at the opposition stage, and in
connection with the appeal at bar). However, this deficiency in the evidence
seems to the Court to be quite technical, and indeed the applicant conceded
this, and it would be improper to dispose of this objection solely on this
basis.
[30]
On the other hand, I find no difficulty in
accepting the substantive arguments made by the applicant in its supplementary
memorandum. The latter contended that the respondent had provided no evidence
of any use of either of the marks in question. Yet Ms. Long’s affidavit extends
for eleven volumes and sets out hundreds of food products including drinks and
juices on which appear derivatives of the word “fruit” which she found in the
course of her visits to eleven grocery stores in the Montréal and Toronto areas. Such a discrepancy is
surprising. The Court must therefore conclude that there is a total absence of
evidence of three of the points that should be taken into account under
subsection 6(5) of the Act for determining whether there is possible confusion,
namely the extent to which the marks cited have become known, the length of
time the marks have been in use and the nature of the trade involving the
marks.
[31]
As regards the degree of resemblance between the
marks, they are all made up of a derivative of the word “fruit”, which is
common in the food industry in general and in the fruit drink industry in
particular. The marks accordingly have a low inherent distinctiveness, and in
the circumstances, as was noted in Kellogg Canada Inc. v. Weetabix
of Canada Ltd., 2002 FCT 724, (2002), 20 C.P.R. (4th) 17 (F.C.), it is
recognized that slight differences may serve to distinguish them. Although I
agree that at first sight the words “FRUITÉ” and “FRUTTI” are similar, they
nevertheless differ in their spelling and pronunciation as well as in their
presentation. Moreover, I feel that the confusion argument might have had
greater weight if it had been made by the holder of the mark with which it is
alleged that the proposed mark was confusing, rather than by a third party. In
any case, I conclude on a balance of probabilities that registration of the Mark
“FRUITÉ” is not likely to create confusion with other existing marks. Consequently,
I dismiss ground 2(c).
[32]
For all these reasons, I allow the applicant’s
appeal, reverse the Board’s decision of February 10, 2005, and order the
Registrar to proceed to register the mark FRUITÉ concerned in trade mark
registration application No. 866595; without costs.
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