Champion Products Inc. v. Iris Hosiery Inc., docket T-2893-93

Date: 199800421

Docket: T-2893-93

BETWEEN:

     CHAMPION PRODUCTS INC. and

     SARA LEE CORPORATION OF CANADA LIMITED

     Plaintiffs

     - and -

     MANUFACTURIER DE BAS IRIS INC./IRIS HOSIERY INC.

     Defendant

     REASONS FOR ORDER

MacKAY J.

[1]      This is an application by the defendant, pursuant to Rule 432.1, for summary judgment in respect of part of its claims as plaintiff by counterclaim and in respect of part of the claims of the plaintiffs, defendants by counterclaim.

[2]      The defendant seeks judgment including an order pursuant to s-s. 57(1) of the Trade-marks Act, R.S.C. 1985, c. T-13 as amended, (the "Act") to strike out the entry in the Register of Trade-marks in respect of registration No. TMA 299,806, registered February 8, 1985, for the plaintiffs' word CHAMPION in design form. The defendant also seeks orders dismissing the plaintiffs' several claims for relief based upon perceived validity of that trade-mark and its alleged infringement by the defendant. The plaintiffs' claims for relief that the defendant's motion would dismiss include a declaration of infringement, an injunction, delivery up or destruction of infringing goods, damages or an accounting of profits, punitive and exemplary damages for infringement, all based on claims of validity of the plaintiffs' trade-mark here in issue and of its infringement by the defendant.

[3]      By its Further Amended Statement of Claim the plaintiff Champion Products Inc. claims ownership in Canada in the following trade-marks:

[4]      The Further Amended Statement of Claim alleges that the defendant has manufactured, distributed and sold in Canada socks in association with the trade-marks CHAMPION & Design, and CHAMPION, without the plaintiffs' consent, thus infringing the plaintiffs' registered design mark, and it has used those marks in a manner confusing with the registered design mark and in a manner likely to cause confusion in Canada between the defendant's wares and business and those of the plaintiffs, contrary to s-s. 7(b) of the Act. Thus the plaintiffs' claims include a claim for damages for passing off. That claim would not be struck if the defendant's motion were allowed.

[5]      By its counterclaim the defendant alleges that the trade-mark in issue, No. TMA 299, 806 for the word CHAMPION in design form is invalid since, contrary to paragraph 12(1)(b) of the Act, that mark was not registrable at the date of its registration on February 8, 1995, in that it was confusing with a previously registered trade-mark, registration No. UCA 22209 for the trade-mark CHAMPION. That word mark has been registered for use in association with "hosiery" since March 20, 1946, and it is now owned by the defendant, having been acquired by it in April 1992.

[6]      In their Further Amended Statement of Claim the plaintiffs seek a declaration that the defendant's trade-mark is invalid and void, and an order under s-s. 57(1) of the Act that the defendant's mark be struck from the Register of Trade-marks. The bases for these claims is the plaintiffs' claim that the trade-mark CHAMPION has come to identify the plaintiffs' wares and business, and thus the defendant's trade-mark is invalid since the trade-mark CHAMPION is not distinctive of the defendant's wares because of the plaintiffs' use in Canada of the trade-marks CHAMPION in association with the plaintiffs' wares.

[7]      In support of its motion for summary judgment the defendant urges that all parties admit that the use by plaintiffs of the registered trade-mark CHAMPION in design form in association with socks and the use by the defendant of the registered trade-mark CHAMPION in association with hosiery is likely to cause confusion, or in other words that the use of both trade-marks is likely to lead to the inference that the wares associated with the two trade-marks are manufactured or sold by the same party.

[8]      The two trade-marks in question are registered as follows:

     No. TMA 299,806                  No. UCA 22209

     Owned by the plaintiff              Owned by the defendant

     CHAMPION PRODUCTS INC.

     Wares:                      Wares:

     (1) Athletic uniforms, sweat shirts      (1) Hosiery.

     and jackets, pants, t-shirts, polo

     shirts, socks and swimwear.

[9]      By their Further Amended Statement of Claim the plaintiffs admit the defendant's ownership of the registered trade-mark UCA 22209 in the following terms:

Despite that admission the Statement of Claim further pleads that the defendant's trade-mark does not accurately define the rights of the defendant pursuant to s. 18(1)(b) of the Act, since the mark is alleged to be invalid as not being distinctive of the defendant's wares because of the use in Canada by the plaintiffs of the trade-mark CHAMPION in association with plaintiffs' wares.

[10]      The defendant's motion for summary judgment is based on s-ss. 18(1)(a) and 12(1)(d) of the Act, which in turn provide, respectively, that registration of a trade-mark is invalid if it was not registrable at the date of registration, that is for the trade-mark in issue in this case, February 8, 1985, and it is registrable only if it is not confusing with a registered trade-mark. Confusion, it is urged by the defendant, is admitted by the pleadings of both parties in regard to the use of their respective trade-marks.

Thus defendant's motion based on s-s. 18(1)(a) of the Act is that registration No. TMA 299,806 for the word CHAMPION in design form is invalid since it was not registrable at the date of registration, February 8, 1985 since, contrary to s-s. 12(1) of the Act, the word CHAMPION in design form was confusing with a previously registered trade-mark, that is, registration No. UCA 22209 for the trade-mark CHAMPION. That confusion, it is urged by the defendant, is admitted by the pleadings of the plaintiffs in regard to the use of the parties' respective trade-marks. The plaintiffs' Further Amended Statement of Claim alleges, inter alia, that

[11]      The defendant's registered trade-mark No. UCA 22209 is for use in association with "hosiery". The defendant's motion is not limited to seeking to strike out from the plaintiffs' registered mark TMA 299,806 its application to "socks", rather it seeks to strike the plaintiffs' registered trade-mark in its entirety. That claim is based on the perception that the two registered trade-marks are essentially similar, that, while each relates to particular articles of clothing or wearing apparel, both concern wares that are closely similar and use of the registered trade-marks would create confusion in the marketplace concerning the source of the goods. That is said to be the basis of arguments and of alleged conclusions of fact in an affidavit filed by the plaintiffs. Thus, the affidavit sets out that defendant's sales of socks in association with its registered trade-mark creates confusion in relation not only to socks but to other wares sold by the plaintiffs under their design mark.

[12]      I do not accept those affidavits as establishing any more than the opinions or conclusions of proposed witnesses on behalf of the plaintiff, in affidavits not yet subject to cross-examination. They do not, in my opinion, establish at this stage in the proceedings that use of the registered trade-marks will ultimately be found to be confusing, in all aspects of the trade for wares covered by the parties' respective trade-marks. There is, in addition, as the plaintiffs submit, an implicit limitation on the scope of any order to strike the plaintiffs' registered mark, at this stage, for in its counterclaim the defendant only seeks striking the registration insofar as it provides for inclusion of socks in the plaintiffs' wares. To grant the order sought in this application would apply an order broader in scope than the relief sought by the counterclaim.

[13]      Moreover, there is an issue of the plaintiffs' claims that is not fully dealt with by the defendant's submissions. The plaintiffs claim that the defendant's sales have been in association not only with its own registered mark (referred to in the plaintiffs' pleadings as the "Duplicate Design Mark") but also selling has been in association with the trade-marks CHAMPION and CHAMPION & DESIGN (both trade-marks of the plaintiffs). That alleged use or sales in association with the plaintiffs' trade-marks is denied by the defendant.

[14]      The defendant in support of its motion urges that no issue of credibility is here raised which would require the hearing of evidence at trial, that the validity of its prior registered trade-mark is not an issue for purposes of this motion, rather the only question is whether the prior mark claimed to be registered was registered when plaintiffs' design mark was registered in 1985.

[15]      The plaintiffs urge that the trade-marks in issue are not identical, that they relate to use in association with a different range of wares, that the closest comparison of wares are "socks" for their trade-mark and "hosiery" for the defendant. Further, they urge that all of the evidence is not before the Court and in particular that no evidence has been adduced by the defendant.

[16]      After considering the submissions of counsel for the parties I conclude that the defendant's motion should be dismissed. I reach that conclusion because it does seek relief beyond that sought by the defendant's counterclaim, that is the striking from the register of the plaintiffs' trade-mark registration no. 299,806, not merely in relation to socks, among the list of wares to which it relates, as the counterclaim seeks. At this stage it would be inappropriate to do more by summary judgment than the pleadings seek. Moreover, until trial of the issues an order directed to modifying the register of trade-marks seems inappropriate especially an order predicated, as that sought by the defendant would be, on a finding of confusion. That finding, in my opinion, awaits consideration of all of the evidence, and should not be based upon affidavit evidence filed on behalf of one of the parties whose evidence at this stage may well not be complete. Particularly is this the case where the finding of confusion relates to use of trade-marks that relate to different wares, albeit they may fall within a more generally described class of wares. Little or no evidence of the markets for the respective wares is available to the Court at this stage.

[17]      In the circumstances, the defendant is not prejudiced by my decision to disallow the application for summary judgment. Its position is preserved for consideration of the trial judge when all the evidence is before her or him, particularly evidence that may have a bearing on the appropriate relief if it be found at trial, as the defendant claims, that the plaintiffs' design mark is invalid because it was not registrable in 1985 since it was confusing, a key matter to be determined, with the defendant's prior registered mark.

[18]      Counsel for the plaintiffs requested at the hearing, as he indicated in advance, that it is appropriate for the Court to designate a case management judge to deal with any issues between the parties, in seeking to expedite trial preparations in this case. Counsel for the defendant did not disagree. I am referring this request to the Acting Associate Chief Justice with the recommendation that a case management judge be designated, as requested by the parties, to deal with issues arising in preparations for trial.

                             W. Andrew MacKay

                                 Judge

OTTAWA, Ontario

April 21, 1998.