Saputo Groupe Boulangerie Inc. v. National Importers Inc., 2005 FC 1460

                                                                                                                                  Date: 20051028

                                                                                                                             Docket: T-2019-04

Citation: 2005 FC 1460

Ottawa, Ontario, the 28th day of October 2005

Present:           THE HONOURABLE MR. JUSTICE SIMON NOËL

BETWEEN:

SAPUTO GROUPE BOULANGERIE

(previously Culinar Inc.)

Applicant

and

NATIONAL IMPORTERS INC.

Respondent

REASONS FOR ORDER AND ORDER

[1]         This is an appeal pursuant to subsection 56(1) of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act) from the decision of the Trade Marks Opposition Board (the "Board"), dated August 5, 2004, in relation to the application for registration of the trade-mark CARAMELLA (No. 873247). The Board, in this decision, rejected the opposition raised by the applicant Culinar Inc., which in 2001 became Saputo Groupe Boulangerie Inc. by an amendment to its articles. Since June 30, 1995, this company has held the trade-mark AH CARAMEL! (TMA-444,815), the subject matter at the basis of the opposition.

[2]         The applicant is asking this Court:

-            to overturn the Board's decision;

-            to declare that the trade-mark CARAMELLA is not registrable under paragraph 12(1)(d) of the Act because it is confusing within the meaning of sections 2 and 6 of the Act;

-            to declare that the respondent National Importers Inc. is not a person entitled to registration of the CARAMELLA mark under paragraph 16(3)(a) of the Act because the mark is confusing within the meaning of sections 2 and 6 of the Act;

-            to declare that the CARAMELLA mark is not distinctive within the meaning of section 2 and paragraph 38(2)(d) of the Act.

ISSUES

[3]         The issues are as follows:

1.          What is the applicable standard of review on this appeal, in accordance with section 56 of the Act?

2.          Did the Board err in deciding that the CARAMELLA mark was registrable under paragraph 12(1)(d) of the Act, on the ground that it was not confusing within the meaning of sections 2 and 6 of the Act?

3.          Did the Board err in determining that the respondent is a person entitled to registration of the trade-mark CARAMELLA within the meaning of paragraph 16(3)(a) of the Act?

4.          Did the Board err in deciding that the trade-mark CARAMELLA is distinctive within the meaning of section 2 and paragraph 38(2)(d) of the Act?

CONCLUSION

[4]         I must answer in the negative to all of these questions, for the reasons explained below.

FACTUAL BACKGROUND

[5]         The applicant has owned the trade-mark AH CARAMEL! since June 30, 1995. The registration of the AH CARAMEL! mark describes the wares marketed by the applicant under this mark as follows: "snacks and desserts, namely cakes, pastries, danishes, muffins, donuts, granola bars, flaky pastries, and crackers". The applicant has also owned the trade-mark CARAMEL & DESIGN since March 31, 1995, in connection with "food products namely cakes". This trade-mark gives it the right to the exclusive use of the word "CARAMEL" in the use of its trade-mark only, and protects the design associated with it. The Board's decision is not based on the trade-mark CARAMEL & DESIGN.

[6]         On March 25, 1998, the respondent filed in the Canadian Trade Marks Office (the Office) an application for registration for the CARAMELLA mark in association with "Food products, namely a spread for use in cooking and baking". On March 10, 1999, the Board published the application for registration in the Trade-marks Journal with a view to allowing potential interested parties to oppose it. On June 30, 1999, the applicant filed a statement of opposition in which it alleged that the trade-mark CARAMELLA was not registrable under paragraphs 38(2)(b), (c) and (d). The grounds in support of the statement of opposition were the same as those cited in this appeal.

[7]         On August 5, 2004, the Board rejected the applicant's opposition pursuant to subsection 38(8) of the Act. The applicant is appealing that decision to this Court.

SUMMARY OF THE DECISION BEING APPEALED

[8]         Concerning the first ground of opposition - confusion - the Board analyzed the criteria listed in paragraphs 6(5)(a) to (e). It concluded that the CARAMELLA mark was unlikely to be confusing.

[9]         First, the Board stressed the importance of considering all of the circumstances of the case (para. 16). And it noted that the inherent and dominant distinctiveness of the disputed marks is the word "CARAMEL" and that this is a descriptive term for the wares sold under these marks.

[10]       Citing the case law, the Board commented that the descriptive components "are considered weak" (have little distinctiveness) (para. 20) and that no merchant is entitled to monopolize a descriptive term like "CARAMEL" in association with food products. Summarizing its analysis, the Board decided that the two marks had "a measure of inherent distinctiveness" because of their additional elements. It added that the inherent distinctiveness of each of the marks is relatively minor given the dominance of "CARAMEL" over the additional elements. The Board further concluded that the extent to which the marks have become known and the period during which the marks have been in use are factors to the advantage of the applicant.

[11]       With respect to the nature of the wares, services or business, the Board noted that the products were sold in the same kind of establishments but that the nature of the wares was quite different. In its opinion, the vast majority of the products then sold under the AH CARAMEL! mark are small prewrapped cakes ("miniature snack cakes") while the products sold under the CARAMELLA mark are limited to spreads.

[12]       Finally, with respect to the degree of resemblance between the disputed trade-marks, the Board notes "some similarity" (para. 30) between them visually and phonetically, but urges a more comprehensive analysis of the marks in question. Based in particular on the evidence of a multitude of trade-marks including the word CARAMEL (or variants) in the Office's database (according to the affidavit of Linda Joyce Elford, a trade-marks research officer), the Board determined that the trade-mark CARAMELLA would not be confusing.

[13]       As to the second and third grounds, the Board reiterated the findings made on the question of confusion. It held that the opposition should be dismissed since the CARAMELLA mark was not likely to mislead consumers concerning the source of the product.

EVIDENCE BEFORE THE BOARD

(a) Applicant's evidence: affidavit of Dino Dello Sbarba

[14]       Mr. Sbarba, we note, is the applicant's executive vice-president, sales and marketing.

[15]       In his affidavit dated February 16, 2000, Mr. Sbarba presented the activities of the applicant and described how it uses the trade-mark AH CARAMEL! More specifically, he indicated that the applicant's activities consisted of manufacturing, distributing, marketing and selling various food products such as cookies, cakes, pastries, jams, soups and other foods of all kinds. These products are distributed in more than 40,000 sales outlets. Some of these products are sold under the AH CARAMEL! trade-mark. This mark was registered in Canada by Culinar Inc. (now Saputo Groupe Boulangerie) on June 30, 1995, as is apparent from the registration of the AH CARAMEL! trade-mark filed in support of Mr. Sbarba's affidavit. The mark has been used in Canada since May 11, 1995. According to Mr. Sbarba, the total sales to distributors of products and services using this trade-mark amounted to 24 to 27 million dollars each year from 1996 to 1999. Mr. Sbarba filed in evidence some invoices indicating that the product was sold almost everywhere in Canada, as well as some wrappings representative of the trade-mark and some samples of promotional documentation. Finally, he told the Board that the applicant had spent at least $100,000 per year on advertising and promotion between 1995 and 1999.

(b) Respondent's evidence

(i)          Affidavit of Linda Joyce Elford

[16]       The affidavit of Ms. Elford, owner of the company Trade Mark Reflections, is dated March 13, 2000. This company provides search services in the public inventory of all registered trade-marks kept by the Office. In March 2000, Ms. Elford did a search to locate all of the marks that were registered or about to be registered beginning with the letters "CARAM" and associated with food products.

[17]       The results of the search and the registrations appearing in the register, attached to her affidavit, show that there are a multitude of trade-marks beginning with those five letters.

(ii)         Affidavit of Casey Wust

[18]       Mr. Wust is the vice-president and chief operating officer of the respondent company. In his affidavit, dated July 27, 2000, he states that the respondent began selling its CARAMELLA spread in May 1999. He attached to his affidavit an example of the packaging of the product distributed by the respondent. He also filed in evidence a list of all the stores that purchased these products between May 1999 and March 2000, to demonstrate that the respondent's spread is on sale in groceries and food stores across Canada. Also, an example of the promotional material used by the respondent is attached to his affidavit.

[19]       Mr. Wust said he was unaware of situations in which there was confusion concerning the source of the product CARAMELLA and the product AH CARAMEL!

FRESH EVIDENCE PRESENTED TO THE COURT

(a) Applicant's evidence

(i) Affidavit of Michel Lanctôt

[20]       The affidavit of Mr. Lanctôt, the applicant's vice-president of marketing, is dated December 6, 2004. Mr. Lanctôt states that in addition to the products described by Mr. Sbarba in his affidavit, the applicant markets cookies and spreads through two licensing contracts.

[21]       The first of these contracts, with Dare Foods Limited, concerns the use of the AH CARAMEL! mark for the sale of cookies (AH CARAMEL! cookies). This contract, signed in 2001, was not put in evidence. Between 2001 and 2004, these cookies generated sales to distributors of more than 20 million dollars. No objections were made to this evidence.

[22]       The second licensing contract, with J.M. Smuckers Canada, has to do with the manufacture, distribution and sale in Canada of spread under the AH CARAMEL! mark. The date of this contract is not disclosed in Mr. Lanctôt's affidavit. The marketing of the AH CARAMEL! spread began in 2001. Mr. Lanctôt's affidavit contains data on the extent of the sales of this spread between 2001 and 2004, expressed in the number of cases and in dollars. The respondent raised an objection in regard to this evidence.

[23]       Mr. Lanctôt adds that some new products were marketed under the AH CARAMEL! mark during 2004, and that some significant sums were spent on advertising.

[24]       Mr. Lanctôt further explains in his affidavit that widespread use of the AH CARAMEL! mark has meant that this mark has acquired what he describes as considerable notoriety in Canada, as well as a significant position in the market. He says that the AH CARAMEL! mark is now so strong that it can be used to sell cakes that do not contain caramel. Mr. Lanctôt submitted in evidence some examples of small cakes bearing the mark AH CARAMEL! but not containing any caramel. The mark has acquired a secondary meaning, he says.

(ii) Affidavit of Patricia Thomas and AD HOC study

[25]       Ms. Thomas is vice-president of research with AD HOC RECHERCHE INC., a company specializing in polling and statistical analysis. At Mr. Lanctôt's request, she prepared a report based on a study, conducted by the firm where she works, on [translation] "the notoriety, consumption and equity of the major Vachon trade-marks". Some extracts of this report ("AD HOC study") were attached to her affidavit of December 6, 2004. The respondent objected to the Court's admission in evidence of the affidavit and the AD HOC study. A number of remarks about the quality of the study were also made. I dispose of these objections later.

(iii) Affidavit of Christian Pichette

[26]       Mr. Pichette is the chief executive officer of Pigeon Canada Inc. and the numbered company 9072-0012 Québec Inc., carrying on business under the corporate name of Pigeon Branding and Design, a firm specializing in marketing. Mr. Pichette's knowledge about trade-marks is primarily related to common consumer products such as food products.

[27]       At Mr. Lanctôt's request, Mr. Pichette consulted the AD HOC study. He drew the following conclusions from it in his affidavit of December 6, 2004:

-            the products marketed under the AH CARAMEL! trade-mark are the most widely sold prepackaged pastry products in Canada;

-            the AH CARAMEL! mark is a [translation] "surrogate brand" [marque porteuse], that is, a brand that can be applied to classes of products other than that of small prepackaged caramel cakes, which, he says, is a rare and exceptional phenomenon;

-            the AH CARAMEL! mark has a total notoriety of 66% in Canada. This percentage, Mr. Pichette says, is a high one very seldom encountered in food products;

-            consumers associate this mark with the class of bakery and pastry products. He says this mark has become a reference mark in the field;

-            the average consumer of food products in Canada, confronted with the CARAMELLA mark proposed by the respondent, and having an imperfect recollection of the AH CARAMEL! trade-mark, might think that both come from the same source. In his opinion, such confusion is even inevitable in such circumstances.

[28]       The respondent made a number of comments about the applicant's fresh evidence and objected to certain parts of this evidence.

(b) Respondent's evidence

(i) Affidavit of Diana Phillips

[29]       Ms. Phillips is the respondent's brand manager. In this capacity, she said, she is responsible for tracking the performance of the CARAMELLA brand in terms of sales and promotional activities.

[30]       Ms. Phillips's affidavit, dated February 1, 2005, is intended to update the information contained in Mr. Wust's affidavit of July 27, 2000. Since 1999, the respondent has been selling its spread products under the CARAMELLA mark in grocery stores throughout Canada.

[31]       The respondent has always used the same packaging and the same kind of label for the sale of its product. As of December 31, 2004, it had sold more than 90,000 jars of CARAMELLA spread, according to Ms. Phillips's affidavit. At the hearing, the respondent corrected this figure: 80,000 jars have been sold since the product was put on the market.

[32]       To demonstrate that the CARAMELLA products are known to the public, Ms. Phillips attached to her affidavit some examples of promotional recipes distributed with the CARAMELLA spread and a clipping from the newspaper La Presse. Ms. Phillips also stated that promotional displays were held in some Quebec grocery stores for short periods during 2004.

[33]       Finally, Ms. Phillips stated that she was unaware of any confusion whatsoever between the CARAMELLA and AH CARAMEL! marks.

(ii) Affidavit of Claude Gauthier

[34]       Mr. Gauthier, a sales representative for the respondent company, filed in evidence a list of products purchased in a Quebec grocery store with names including the word "CARAMEL". Photocopies of the invoice and packaging of the products he had purchased are also attached to his affidavit, dated February 1, 2005.

(iii) Affidavit of Claude Gauthier (#2)

[35]       Mr. Gauthier filed a second affidavit, also dated February 1, 2005. This affidavit is similar to the first. In this case, the product research was made on line on the IGA Cybermarket web site. Mr. Gauthier searched for products starting with the word "CARAM". The affidavit is accompanied by a paper version of the result of the searches made.

(iv) Affidavit of Shane Brown

[36]       Mr. Brown is an articling student in the law firm Bull, Housser & Tupper, who represent the respondent. He attaches to his affidavit, dated February 3, 2005, a list of caramel-based products he purchased in a Vancouver grocery store. This list includes various caramel-based products, several of which bear a name including the word "CARAMEL". Copies of the invoice for the purchases and the packaging of the products that were purchased accompany his affidavit.

OBJECTIONS AND REPLIES TO THE EVIDENCE

(a) Nature of objections to the evidence

[37]       Only the respondent raised some objections to the new evidence in its memorandum. The additional evidence is composed of the affidavits of Michel Lanctôt, Patricia Thomas and Christian Pichette, as well as some exhibits accompanying them. In its written submissions and arguments, the applicant replied to the objections raised.

[38]       In addition to making some objections, the respondent answers the applicant's evidence in the part of its memorandum dealing with the objections. Although these are not objections in the strict sense of the word, I will address them as well in my analysis in the interests of comprehensiveness.

[39]       Abundant evidence concerning the strength of the AH CARAMEL! mark was adduced in this Court. This includes the affidavit of Mr. Lanctôt, the AD HOC study filed in support of Patricia Thomas's affidavit, and the affidavit of Christian Pichette. The respondent disputes this evidence either in whole or in part.

[40]       Essentially, the objections and replies made by the respondent in its memorandum may be summarized in five main points:

(i)          The respondent notes that the licence between the applicant and J.M. Smuckers was not filed in evidence in support of Mr. Lanctôt's affidavit (para. 24(a) of the respondent's memorandum);

(ii)         Michel Lanctôt refers in his affidavit to the extent of the sales of spread achieved by J.M. Smuckers under the AH CARAMEL! mark (para. 11 of Mr. Lanctôt's affidavit). The respondent argues that this is inadmissible hearsay (paragraph 23 of the respondent's memorandum);

(iii)        The respondent formally objects to the admissibility of the opinions expressed by Mr. Lanctôt in his affidavit (para. 27 and 30 of the respondent's memorandum). It thinks that, as a mere affiant, Mr. Lanctôt was not authorized to give his opinion either on the strength of the AH CARAMEL! mark or on the way in which the strength of a mark should be assessed (para. 26(b), (e) and (g)). Furthermore, the respondent disputes the value of the information related by Mr. Lanctôt in his affidavit (para. 24(b), 26(c), (d) and (f), 28, 29);

(iv)        The respondent casts doubt on the relevance of the AD HOC study (para. 31 to 39) and objects to the affidavit of Patricia Thomas; and

(v)         The respondent objects to the affidavit of Christian Pichette and comments on various aspects of it (para. 39 to 44).

[41]       The respondent is of the opinion that this evidence should not be considered by the Court. In the alternative, the respondent asks that the Court not assign it any value.

(b) Analysis of the objections to the evidence

[42]       Here I will refer back to each of the objections raised by the respondent, and the various aspects of the reply to the applicant's evidence.

(i) The licence between the applicant and J.M. Smuckers

[43]       Instead of filing the licence between it and J.M. Smuckers in accordance with the procedure for filing confidential documents under the Federal Court Rules, SOR/98-106, the applicant elected to establish it by affidavit. While not formally objecting, the respondent commented in its memorandum that the contract had not been filed with the Court.

[44]       In my opinion, the only evidence that the applicant is seeking to adduce here is the existence of the licence, not its exact content. To that extent, Mr. Lanctôt's affidavit is sufficient, given the presumption in subsection 50(2) of the Act. That subsection reads as follows:

[45]       The contract was accompanied by a sample of the label of the product sold under the mark that is the subject matter of the licence, the AH CARAMEL! mark spread. This label describes the identity of the owner of the mark and the fact that the label is licenced. The following text appears on this label:

AH CARAMEL!*

TARTINADE CARAMEL CARAMEL SPREAD

*Désigne une marque de commerce, propriété de Culinar Inc. et employée sous licence par/ Denotes a trade-mark, property of Culinar Inc. and used under licence by : J.M. Smucker (Canada) Inc.

[46]       This evidence suffices to demonstrate the existence of the contract, especially since the respondent did not deny its existence and presented no evidence to the contrary. In Wells' Dairy v. U L Canada Inc. (2000), 7 C.P.R. (4th) 77, [2000] F.C.J. No. 876 (F.C.), at para. 47, Mr. Justice Heneghan writes that in order to rebut the presumption in subsection 50(2), it must be proved that the mark is not licensed. In the judge's view, evidence of writing similar to the writing appearing on the labels of the AH CARAMEL! spread suffices to trigger the application of the presumption. The Board's case law supports this view, moreover (see Dimock Stratton Clarizio v. Noveltech, Inc., 24 C.P.R. (4th) 116).

[47]       The writing appearing on the label of the AH CARAMEL! spread jar constitutes a public notice within the meaning of subsection 50(2) of the Act. The use of the AH CARAMEL! mark as a licensed use has therefore been sufficiently proved.

(ii) Evidence pertaining to sales of spread by the licensee J.M. Smuckers

[48]       By presenting evidence on the sales of AH CARAMEL! spread, the applicant sought to demonstrate that the likelihood of confusion is greater at the time of the appeal than it was at the time of the Board's decision, since J.M. Smuckers is marketing a product similar to that of the respondent. The evidence of the existence of the licence had the same objective.

[49]       The applicant argued that its representative is presumed, under subsection 50(2) of the Act, to have direct access to the financial statements of the licensed company. Consequently, the passages in Mr. Lanctôt's affidavit dealing with the extent of the sales of AH CARAMEL! spread would be admissible as evidence.

[50]       As I mentioned earlier, there is no doubt that in this case the conditions for applying the presumption are fulfilled, because the public notice is sufficient. However, the presumption does not have the far-reaching effect that the applicant seeks to give it. The language of subsection 50(2) is clear. In my opinion, it is only the existence of the licence and the control of the character or quality of the licensee's wares that is presumed, and not knowledge of the financial statements. The evidence of the sales of AH CARAMEL! spread reported in Mr. Lanctôt's affidavit must be rejected, therefore.

[51]       That being said, to admit the evidence concerning the financial statements of the licensee J.M. Smuckers would have no notable impact on the outcome of the case. Michel Lanctôt's affidavit is sufficiently detailed to indicate to me that a licensing contract was signed between the applicant and J.M. Smuckers and that the AH CARAMEL! spread has been marketed since 2001. These facts can give rise to sufficient inferences to make evidence of the financial statements unnecessary. In my opinion, if the licensing contract exists and the product has been marketed for more than four years, there is a strong possibility that the business in this product is profitable. Otherwise, the applicant would probably have withdrawn this product from the shelves. This simply observation suffices for the purpose of the analysis of the issues. If I had possession of the exact figures on the sales of AH CARAMEL! spread, it would not alter my findings in any way.

(iii) Opinions expressed in the affidavit of Michel Lanctôt

[52]       A lay witness may, in some circumstances, express opinions about the facts in dispute. In [1982] 2 S.C.R. 819">R. v. Graat, [1982] 2 S.C.R. 819; (1982), 45 N.R. 451 (S.C.C.), at para. 46 and 47, Mr. Justice Dickson notes that the boundary between opinions and facts is a fine one:

Except for the sake of convenience, there is little, if any, virtue, in any distinction resting on the tenuous, and frequently false, antithesis between fact and opinion. The line between "fact" and "opinion" is not clear.

. . . Admissibility is determined, first, by asking whether the evidence sought to be admitted is relevant. This is a matter of applying logic and experience to the circumstances of the particular case. The question which must then be asked is whether, though probative, the evidence must be excluded by a clear ground of policy or of law.

[53]       Further on in that decision, the Supreme Court urges that courts not blindly exclude some testimony on the pretext that it contains opinion on the disputed facts. So the rule that opinions of lay witnesses are inadmissible as evidence is not one of absolute rigidity. The rule has evolved somewhat, and the courts may now admit the opinions of lay witnesses if certain conditions are satisfied although it must be kept in mind, to complete the analysis, that the courts must show some flexibility in determining the admissibility of those opinions.

[54]       The conditions laid down by the cases are clear. These conditions, in my opinion, are clearly summarized in David Pacciocco and Lee Stuesser, The Law of Evidence, 3rd ed. (Toronto: Irwin Law, 2002), at 154:

Lay witnesses may present their relevant observations in the form of opinions where:

- they are in a better position than the trier of fact to form the conclusion;

- the conclusion is one that persons of ordinary experience are able to make;

- the witness, although not expert, has the experimental capacity to make the conclusion; and

- the opinions being expressed are merely a compendious mode of stating facts that are too subtle or complicated to be narrated as effectively without resort to conclusions.

[55]       In La preuve civile, 3rd ed. (Cowansville: Éditions Yvon Blais, 2003), at para. 451 to 460, Jean-Claude Royer synthesizes the case law on the exceptions to the rule of inadmissibility of the opinion of lay witnesses. At paragraph 456, he writes:

[translation] The major derogations expressed by the authorities and the courts concern the identification of persons, things, writings, value of property or services, distance, time, speed, dimensions, weight, direction, degree of intoxication and mental health.

[56]       In my opinion, Mr. Lanctôt's opinions concerning the strength of the AH CARAMEL! mark are not opinions that lay persons are in a position to form, such as opinions on a person's distance, speed or mental health. Moreover, Mr. Lanctôt's opinions cannot be used to summarize or describe more effectively facts that are too subtle or complicated to be described without drawing any conclusions.

[57]       The flexibility of the rule on the admissibility of lay witnesses' opinions is intended to allow the admission of facts necessary to the resolution of the case that would be inadmissible if the rule were applied too strictly. It is not intended to allow ordinary witnesses to express opinions without restraint or to organize the facts from an angle that is favourable to them. Notwithstanding all my willingness to display flexibility in the taking of evidence, Mr. Lanctôt's opinions clearly contravene the rules of evidence and cannot be admitted.

[58]       That does not mean that the facts contained in the passages where Mr. Lanctôt expresses his opinion must be rejected. In particular, the figures on sales, on notoriety of the mark and on the market shares of the AH CARAMEL! mark should be retained. The same can be said for the evidence filed by Mr. Lanctôt concerning the AH CARAMEL! mark cakes that do not contain caramel. This evidence is admissible, although I have two major reservations to make concerning their probative force.

[59]       First, the source for the figures concerning the market shares of the AH CARAMEL! mark is not indicated anywhere. Second, in paragraph 21 of his affidavit, Mr. Lanctôt states that in his opinion the AH CARAMEL! mark enjoys a notoriety of 66%. In reply to one of my questions at the hearing, the applicant's counsel acknowledged that this was an average between the data collected in Quebec, Ontario and the Maritimes. So there was no weighting of the data. Third, there is no indication before the Court as to the origin of this data, the methodology employed or the date of the survey.

[60]       In short, Mr. Lanctôt's opinions are inadmissible in evidence. But even if they were admitted, it would not affect the outcome of the case in any way. The heart of Mr. Lanctôt's affidavit is composed of the facts he relates. His opinions simply organize them so as to make them more persuasive and to convince me that the AH CARAMEL! mark is exceptionally strong. But as we will see later, I am not persuaded of this, even considering all of the opinions expressed by Mr. Lanctôt in his affidavit.

(iv) Affidavit of Patricia Thomas and the AD HOC study

[61]       The affidavit of Patricia Thomas and the AD HOC study accompanying it were objected to on the basis of the relevance rule. In addition, the probative value of this evidence was questioned.

[62]       The relevance rule must be very flexibly applied in the absence of harm to the other party, as in this case. One must be careful before excluding evidence on the basis of this highly subjective rule of exclusion. In the case at bar, accepting the AD HOC study as a whole would not result in any harm to the respondent since I have serious reservations as to its probative value.

[63]       First, a number of passages in the study, when read side-by-side with Mr. Lanctôt's affidavit, lead me to doubt the accuracy of the data appearing them and the seriousness of the methodology used. Furthermore, the explanations about the methodology, which appear primarily at pages 8 to 11, are rather perfunctory.

[64]       The study refers to an overall recognition rate of 73% (p. 25 of the study). The applicant provided me with no explanation for the significant discrepancy between the notoriety of the AH CARAMEL! mark assessed by Mr. Lanctôt, 66%, and the recognition rate that appears in the AD HOC study. And in the case of both the study and Mr. Lanctôt's affidavit, only the Maritimes, Ontario and Quebec were polled.

[65]       Second, I note that only one of the 224 pages submitted in evidence is directly addressed to the notoriety of the AH CARAMEL! mark (page 25). The major share of the extracts submitted as evidence has to do with the equity of the AH CARAMEL! mark (pp. 52 to 221) and the occasions and places where these products have been consumed ((pp. 222 to 224). However, only some very perfunctory explanations as to what is meant by the notion of equity were provided (p. 7 of the study). In any event, I have difficulty seeing how the opinion of Canadian consumers on the freshness, taste and quality of the AH CARAMEL! cakes should enable me to gain a clearer idea of the notoriety or strength of this mark. The same remark applies in regard to the occasions and locations of consumption of the applicant's products.

[66]       In view of these reservations, one must be careful about drawing any conclusions from the AD HOC! study. Nevertheless, relying on the relevance rule, I refrain from dismissing it. Finally, Ms. Thomas's affidavit need not be rejected. The only information it contains is allegations of use concerning the witness's experience and profile. The other allegations explain the origin of the AD HOC study and provide some information about the methodology that appears as well in the study itself.

(v) Affidavit of Christian Pichette

[67]       Mr. Lanctôt's affidavit refers to the declination of the AH CARAMEL! mark, that is, its transferability to products not containing any caramel. He attached to his affidavit some examples of such products. They are "triple chocolate", "Black Forest" and maple-flavoured cakes the appearance of which recalls the original version. The affidavit of Christian Pichette refers instead to a [translation] "surrogate mark" in describing this phenomenon. In addition, Mr. Pichette openly states his opinion on the likelihood of confusion that exists, in his opinion, between the CARAMELLA and AH CARAMEL! marks.

[68]       No data concerning the sales of these products was adduced in evidence. It is therefore impossible to assess whether the transfer of the mark did in fact operate.

[69]       Mr. Pichette's opinions are not admissible in evidence, for reasons similar to those cited in my analysis of Mr. Lanctôt's affidavit. Mr. Pichette is a lay witness, not having been recognized as an expert by this Court. That being said, even if I were to take into consideration Mr. Pichette's affidavit as a whole, that would in no way alter my opinion on the issues.

(c) Conclusion on the objections to evidence

[70]       To summarize, I would dispose of the respondent's objections as follows:

(i)          The existence of the licensing contract between J.M. Smuckers and the applicant concerning the AH CARAMEL! spread is taken as established;

(ii)         The respondent's objection concerning the inadmissibility of the figures on sales of AH CARAMEL! spread is allowed, while specifying that even if this evidence were considered, it would in no way alter my conclusions on the substance of the case;

(iii)        The respondent's objection concerning the admissibility of Mr. Lanctôt's opinions is allowed, while retaining the factual aspects of his testimony and specifying that even if this evidence (the opinion) were considered, it would in no way alter my conclusions on the issues;

(iv)        The respondent's objection concerning the relevance of the AD HOC! study and the affidavit of Ms. Thomas is rejected, while expressing some reservations as to their probative value; and

(v)         The respondent's objection concerning the opinions expressed by Mr. Pichette in his affidavit is allowed, while specifying that consideration of these opinions would in no way alter my opinion on the issues.

ANALYSIS

1.          What is the applicable standard of review on this appeal, in accordance with section 56 of the Act?

[71]       In Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145; [2000] F.C.J. No. 159 (F.C.A.), the Federal Court of Appeal set down the standard of review that applies to the Board's decision. The applicable principles are summarized in Mr. Justice Rothstein's reasons; he wrote, at paragraph 51:

I think the approach in Benson & Hedges and McDonald's Corp. 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.

[72]       Since the Molson Breweries judgment, supra, has been followed by the Federal Court of Appeal and by the trial division of the Federal Court, the reasoning of Rothstein J.A. should be followed (see, for example: Novopharm Ltd. v. Bayer, (2000) 264 N.R. 384; [2000] F.C.J. No. 1864 (F.C.A.), at paragraph 4; Metro-Goldwyn Meyer Inc. v. Stargate Connections Inc., 2004 F.C. 1185, [2004] F.C.J. No. 1422 (F.C.), at paragraph 5). Accordingly, as a general rule, the standard of judicial review of the Board's decision is that of reasonableness simpliciter. However, when complementary evidence is submitted, it is necessary to assess its significance and probative value.

[73]       This can be done methodically using the approach adopted by Mactavish J. in Telus Corp. v. Orange Personal Communications Services Ltd., 2005 F.C. 590; [2005] F.C.J. No. 722 (F.C.). In that case, Mactavish J. drew on the remarks by Evans J. in Garbo Group Inc. v. Harriet Brown & Co. (1999), 176 F.T.R. 80; (1999), 23 Admin. L.R. (3d) 153; [1999] F.C.J. No. 1763 (F.C.), at paragraphs 37 to 39. The relevant passage from the reasons of Evans J. reads as follows:

As for the impact on the standard of review of the filing of additional evidence on an issue at the appeal, much will depend on the extent to which the additional evidence has a probative significance that extends beyond the material that was before the Registrar. If it adds nothing of significance, but is merely repetitive of existing evidence without enhancing its cogency, its presence should not affect the standard of review applied by the Court on the appeal.

If, on the other hand, the additional evidence goes beyond what was in substance already before the Registrar, then the Court should ask whether, in the light of that material, the Registrar reached the wrong decision on the issue to which that evidence relates and, perhaps, on the ultimate decision as well. The more substantial the additional evidence, the closer the appellate Court may come to making the finding of fact for itself.

However, when the additional evidence is so significant and extensive that the case is fundamentally different from the one before the Registrar, the Court may conclude that, rather than simply reversing the decision, the more appropriate disposition would be to remit it to the Registrar. Otherwise, the legislative scheme conferring first level decision-making power on the Registrar, a specialist tribunal, may be undermined.

[74]       In Telus Corp., supra, Mactavish J. writes, at paragraph 33:

If the new evidence adds nothing of significance, but is merely repetitive of existing evidence, without enhancing its cogency, the issue will be whether the Board was clearly wrong.

[75]       Like Mactavish J. in Telus Corp., supra, I will first make an inventory of the new evidence submitted and it will be compared with the evidence that was before the Board. Then it will be determined whether this evidence is sufficiently significant and probative to justify modifying the standard of review. If so, the standard of review would become that of correctness, instead of reasonableness simpliciter.

[76]       The applicant's new evidence is composed of the affidavits of Mr. Lanctôt, Mr. Pichette, Ms. Thomas and the AD HOC study. The information related in Mr. Lanctôt's affidavit updates the evidence that Mr. Sbarba gave several years earlier. He indicates what the new products of the applicant are and the sales associated with them. Like Mr. Sbarba, he notes the extent of the sales of small cakes and the marketing expenses. There are two new elements in his affidavit: his analysis of the strength of the AH CARAMEL! mark and the evidence of the licences. The AD HOC study, and the affidavits of Ms. Thomas and Mr. Pichette, constitute further new elements. The Board did not have this evidence at its disposal.

[77]       In my opinion, the only really new evidence, admissible and probative, is the existence of a licence between the applicant and J.M. Smuckers. It is my opinion that this evidence is sufficiently new and important to justify reviewing the Board's findings according to the correctness standard. In fact, this new element is central to the questions in dispute, since at the time the Board ruled, the products sold by the applicant and the respondent were not clearly in the same class. The existence of the licence between the applicant and J.M. Smuckers changes things, since one of the products sold under the AH CARAMEL! mark is similar to the respondent's spread.

[78]       I think, therefore, that the standard of judicial review of the Board's decision should be that of correctness.

2.          Did the Board err in deciding that the CARAMELLA mark was registrable under paragraph 12(1)(d) of the Act, on the ground that it was not confusing within the meaning of sections 2 and 6 of the Act?

[79]       In Canadian law, a trade-mark is not registrable if it is confusing with a registered mark. Section 12(1)(d) reads:

(a) Applicable criteria, test and onus of proof

[80]       Subsection 6(5) of the Act lays down the steps that must be taken in determining whether trade-marks are confusing:

[81]       It is not necessary to prove actual confusion. It suffices to establish a probability of confusion ((Pink Panther Beauty Corp., [1998] 3 F.C. 534; [1998] F.C.J. No. 441 (F.C.A.)). The existence of a probability of confusion is a question of first impression. The factors in subsection 6(5) are used to guide the judge in his or her analysis. In Miss Universe Inc. v. Bohna, [1995] 1 F.C. 614; [1994] F.C.J. No. 1642 (F.C.A.), Décary J.A. explained how the probability of confusion between trade-marks should be evaluated:

To decide whether the use of a trade-mark or of a trade-name causes confusion with another trade-mark or another trade-name, the Court must ask itself whether, as a matter of first impression on the minds of an ordinary person having a vague recollection of that other mark or name, the use of both marks or names in the same area in the same manner is likely to lead to the inference that the services associated with those marks or names are performed by the same person, whether or not the services are of the same general class.

In determining whether there is a likelihood of confusion, the Court shall have regard to all the surrounding circumstances, including those described in subsection 6(5) above.

[82]       Concerning the onus of proof, Décary J.A. writes:

The onus is always upon an applicant for the registration of a trade-mark to establish that, on the balance of probabilities, there is no likelihood of confusion with a previously used and registered trade-mark.

[83]       This onus of proof rests on the person who seeks registration of a mark both before the Board and on appeal (see McDonald's Corp. v. Coffee Hut Stores Ltd. (1994), 76 F.T.R. 281; [1994] F.C.J. No. 638 (F.C.), at paragraph 24). So it falls to the respondent to make the demonstration, in light of the factors set out in the Act, that the concurrent use of the AH CARAMEL! and CARAMELLA marks is not likely to lead the average consumer to think that the products associated with these marks originate from the same source.

(b) Detailed analysis of the factors set out in the Act

(i)         Inherent distinctiveness and the extent to which the marks have become known

[84]       In Pink Panther Beauty, supra, at paragraph 23, the Federal Court of Appeal stated that the first item is broken down into two considerations: the inherent distinctiveness of the mark, and the acquired distinctiveness of the mark (the extent to which the marks have become known).

[85]       The inherent distinctiveness of a mark refers to its originality. A mark that is composed of a unique or invented name, such that it can only refer to one thing, will possess more inherent distinctiveness than a word that is commonly used in the trade (ITV Technologies, Inc. v. WIC Television Ltd., 2003 F.C. 1056; [2003] F.C.J. No. 1335 (F.C.), at paragraph 119). A mark that is only descriptive of the wares will be afforded less protection (Pink Panther Beauty, supra, at paragraph 23).

[86]       A mark without inherent distinctiveness may nevertheless acquire distinctiveness through continuous use on the market. In Miss Universe, Inc., supra, it was held that the stronger the mark is, the greater will be the protection it is accorded. Décary J.A. wrote in that case:

The stronger the mark is, the greater the ambit of the protection it should be accorded and the more difficult it will be for an applicant to discharge the onus.

. . .

The factors enunciated in paragraphs 6(5)(a) to (e) need not be interpreted as having equal weight in all circumstances. Where, for example, a strong trade-mark is measured against a proposed mark, criteria (c) and (d), i.e. the nature of the wares, services or business and the nature of the trade, are not particularly determinative.

[87]       The applicant's attempt to prove the strength of the AH CARAMEL! mark was intended precisely to increase the protection to be afforded that mark. That evidence has failed to persuade me that the AH CARAMEL! mark should be afforded increased protection. The reservations that I have expressed about the quality of that evidence, and its content, lead me to believe that the AH CARAMEL! mark is not sufficiently strong to justify exceptional protection. I would reach an identical conclusion if the opinions expressed in the affidavits of Messrs Lanctôt and Pichette and the evidence of the sales of AH CARAMEL! spread were taken into consideration. It cannot be demonstrated from the evidence as a whole that the AH CARAMEL! mark is so strong that it must be accorded exceptional protection.

[88]       In this instance, I agree with the Board that the AH CARAMEL! and CARAMELLA marks have only a relatively weak inherent distinctiveness. It is clear that the dominant element in both these marks is the word "CARAMEL". The word "CARAMEL" is widely used to distinguish food products. The exhibits attached to the affidavits of Mr. Gauthier, Mr. Brown and Ms. Elford prove this. It is true that the additional elements of the trade-marks may in theory contribute a certain distinctiveness. However, as the Board mentioned, these elements are relatively minor in comparison with the dominance of the word "CARAMEL". Consequently, the inherent distinctiveness of each of the marks is rather weak.

[89]       The extent to which the marks have become known (the acquired distinctiveness) clearly favours the applicant. The record shows that the trade-mark AH CARAMEL! has been widely used in Canada since 1995 and has produced sales of more than 20 million dollars per year. The respondent, for its part, has demonstrated that as of December 31, 2004, it had sold more than 80,000 jars of its CARAMELLA spread. However, after comparing the information put in evidence, it seems clear to me that the AH CARAMEL! products in general have acquired greater notoriety than the CARAMELLA spread. Absent further persuasive evidence, the extent of the sales of the products may be used as a significant indicator of the extent to which the marks are known. And the AH CARAMEL! products outsell the CARAMELLA products. Even singling out the sales of AH CARAMEL! spread and comparing them with the sales of CARAMELLA spread, my conclusion would be the same: the spread with the AH CARAMEL! mark sold more widely between 2001 and 2004 than the spread with the CARAMELLA mark between 1999 and 2004. This inclines me to believe that the AH CARAMEL! mark is better known.

[90]       All in all, the first factor favours the applicant since the inherent distinctiveness of the two marks is relatively low and the AH CARAMEL! mark is better known than the CARAMELLA! mark. However, the AH CARAMEL! mark is not so well known that it must preclude an examination of the other factors or increase the protection to which the applicant's mark is entitled.

(ii)        Period of use

[91]       The length of time the trade-mark has been in use is a factor that may contribute to consumer confusion as to the origin of the wares or services. A mark that has been in use for a long time is presumed to have created a certain impression on consumers (Pink Panther Beauty, supra).

[92]       In this case, the applicant has been using its AH CARAMEL! mark in Canada for a longer period than the respondent. The record indicates that the use of the AH CARAMEL! mark goes back to 1995-96 while the evidence filed by the respondent demonstrates that the CARAMELLA mark has been used in Canada only since May 1999. However, I note that the use of the AH CARAMEL! mark as a spread trade-mark dates only from 2001. Nevertheless, the period of use factor is, overall, to the applicant's advantage.

(iii)        Nature of the wares, services or business

[93]       In regard to the factor "nature of the wares, services or business", the relevant considerations under this heading will include not only the general class of goods involved, but also the quality and price of those goods (Pink Panther Beauty, supra).

[94]       The registration of the AH CARAMEL! mark describes the wares as follows: "snacks and desserts, namely cakes, pastries, danishes, muffins, donuts, granola bars, flaky pastries, and crackers". The CARAMELLA trade-mark, according to the application for registration, covers "Food products, namely a spread for use in cooking and baking".

[95]       In this case the evidence shows that the AH CARAMEL! trade-mark is known first and foremost in association with small prepackaged cakes. Clearly, in my opinion, small prepackaged cakes belong to a different kind of wares than caramel spread. The Board was doubtless right to see a distinction between caramel spread and small prepackaged cakes, a distinction that would tend to reduce the likelihood of confusion. The same remark applies in the case of the AH CARAMEL! cookies marked under the licence with Dare Foods Limited: these are two different kinds of wares.

[96]       The sale of AH CARAMEL! spread under the licence with J.M. Smuckers does add a new consideration, since a portion of the applicant's products are in fact in the same class as the respondent's CARAMELLA product. The situation is such that, on the one hand, some of the wares used under the AH CARAMEL! mark are clearly distinct and, on the other hand, some of the wares are in the same class. In my opinion, if there is potential confusion, it is only in connection with the spreads.

[97]       The respondent noted that the sales of AH CARAMEL! spread account for only a very small fraction of the total sales under this mark. In McDonald's Corp. v. Coffee Hut Stores Ltd., supra, the particular issue was whether there was confusion between the use of the MCBEANS mark in association with coffee and tea and the MCDONALD'S mark registered in association with various foods. McKeown J. noted in his analysis that there is overlap only in connection with a small part of the wares, since sales of coffee and tea accounted for only 4% of McDonalds' total sales. In my opinion, the judge was correct to take this factor into account.

[98]       The fact that in the instant case most of the products sold by the applicant are quite different from those of the respondent reduces the likelihood of confusion. If the major share of the wares sold by the respondent under the CARAMELLA mark were cakes, pastries and cookies, that would probably increase the likelihood of confusion. This mark would then be more naturally associated with this type of products. Similarly, if the applicant was primarily doing business in spreads, the confusion would be more likely.

[99]       Conversely, the fact that most of the wares sold by the parties are different in nature helps, in my opinion, to facilitate the distinction of the product source in the mind of the average consumer. In this sense, it is appropriate to consider the amount of overlap between the two marks in the assessment of the factor in paragraph 6(5)(c) of the Act when determining whether there is confusion. And that is consistent with the case law of this Court (see, for example, Skydome Corp. v. Toronto Heart Industries Ltd., [1997] F.C.J. No. 275; (1997), 128 F.T.R. 71 (F.C.)).

[100]     Finally, the respondent submitted that the registration of the AH CARAMEL! mark is not sufficiently broad to include spreads. In my opinion, the words used include spreads. The word "namely" indicates that the words following it are examples. These examples are quite varied and include products that are not necessarily desserts or snacks (e.g. breakfast muffins). The respondent has submitted no case law to persuade me to give a very strict construction to the wording of the registration of the AH CARAMEL! trade-mark. This argument is therefore rejected, with the explanation that the fact that both types of products can belong to the class of desserts or snacks in no way alters the very clear distinction that the average consumer would see between small prepackaged cakes and a spread.

[101]     All in all, I think this factor favours the respondent, given the clear difference that exists between the type of wares sold by the parties. Although the price of the wares is rather modest, that is not decisive in view of the foregoing.

(iv)        Nature of the trade

[102]     The Court must have regard to the nature of the trade in question. The likelihood of confusion is greater where the wares or services, albeit dissimilar, are distributed or offered in the same kind of establishments or are within the same general class (Pink Panther Beauty, supra). The region in which the wares are circulated or in which the services are offered may also be a consideration.

[103]     The wares are in both cases distributed in grocery stores and other food stores in all the provinces of Canada. This factor is therefore to the advantage of the applicant.

(v)         Degree of resemblance between the marks in appearance or sound or in the ideas suggested by them

[104]     The final specific factor to review is the resemblance between the two trade-marks in appearance or sound, or in the ideas suggested by them. This is the factor which, in most cases, is the dominant one in assessing the likelihood of confusion (Beverly Bedding & Upholstery Co. v. Regal Bedding & Upholstery Ltd. (1980), 47 C.P.R. (2d) 145 (F.C.); aff'd 60 C.P.R. (2d) 70 (F.C.A.)). It is necessary to assess the impression that the marks make on the public, and to examine them as totalities. There is no need to try to dissect the marks (Pink Panther Beauty, supra). That does not preclude analyzing the particular features of the mark that may have a decisive influence on the public's perception of it.

[105]     In my opinion, this factor clearly favours the respondent. I think that a consumer confronted with the two disputed marks would not immediately see the resemblances between them, and would be even less likely to think that the products sold under these marks derive from the same source.

[106]     In the case at bar, contrary to what the applicant says, the syllables and phonemes added to the word "CARAMEL" are different. In the case of AH CARAMEL!, it is the phoneme [a] and the syllable "AH", while in the case of CARAMELLA, it is the phonemes [l] and [a] and the syllable "LA". Furthermore, the position of the additional elements plays a very important role in the sound resemblance between the two marks. Also, the AH CARAMEL! mark is composed of two separate words, and there is an exclamation point at the end of the words "AH CARAMEL"; these are further factors to consider. These factors make a significant difference in the appearance or sound of the disputed marks, and this is likely to affect the public's perception of them.

[107]     The ideas suggested by the two marks also differ. In the case of AH CARAMEL!, the idea suggested is one of contentment, satisfaction or delight. The CARAMELLA mark does not evoke such ideas, in my opinion.

[108]     I am therefore of the opinion that the appearance, sound and the ideas suggested by the mark favour the respondent.

(vi)        All the circumstances of the case and conclusion on confusion

[109]     In addition to the factors considered under paragraphs 6(5)(a) to (e), the Court may consider various supplementary factors that may in its opinion affect the likelihood of confusion. I will examine here a few additional arguments raised by the parties.

[110]     The respondent demonstrated that a number of trade-marks including the word "CARAMEL" are registered in Canada or are on the market. That is relevant in this case, since consumers are used to making distinctions between marks including the word "CARAMEL". This factor may be considered (Kellogg Salada Canada Inc. v. Maximum Nutrition Ltd., [1992] 3 F.C. 442; [1992] F.C.J. No. 562 (F.C.A.), at paragraph 15).

[111]     However, the applicant's counsel argued that the disputed products are found in the same places in grocery stores. The distinctions made above concerning the various wares sold under the AH CARAMEL! mark can be repeated here. The list of products accompanying the affidavit of Claude Gauthier shows that only the spreads were found in the same location in the supermarket where they were purchased. This list also shows that the AH CARAMEL! cakes and cookies are located in another location. No evidence was adduced concerning the location of the AH CARAMEL! spread, but it may be inferred from the evidence that these are found in the same location as the CARAMELLA spreads. This fact, taken in isolation, favours the applicant, although the fact that most of the AH CARAMEL! products are in a different place tends to favour the respondent.

[112]     The applicant stated in its written submissions that the packaging and appearance of the products are similar ([translation] "same bottle format, same label format"). That is not my opinion. Not only is the format not the same (450g in the case of CARAMELLA and 907g in the case of the AH CARAMEL! spread), but the labels and the fonts used are quite different. That favours the respondent.

[113]     Taking into account all of the circumstances and notwithstanding the fact that some factors favour the applicant, I am of the opinion that there is no cause to review the Board's conclusion in view of the new evidence and the applicable standard of review. The test of first impression is clearly to the advantage of the respondent, in my view. It has discharged its onus of proof by demonstrating that the concurrent use of the AH CARAMEL! and CARAMELLA marks is not likely to lead the average consumer to think that the products associated with those marks originate from the same source.

[114]     The CARAMELLA mark is therefore registrable since it is not confusing within the meaning of sections 2 and 6 of the Act.

3.          Did the Board err in determining that the respondent is a person entitled to registration of the trade-mark CARAMELLA within the meaning of paragraph 16(3)(a) of the Act?

[115]     Paragraph 16(3)(a) of the Act reads as follows:

[116]     Because of my conclusions on confusion, and absent any evidence showing that the other criteria in this provision have not been fulfilled, I adopt the Board's conclusion that the respondent is a person entitled to the registration of the CARAMELLA trade-mark within the meaning of the Act. There is no reason, therefore, to review the decision made by the Board on this point, in view of the applicable standard of review.

4.          Did the Board err in deciding that the trade-mark CARAMELLA is distinctive within the meaning of section 2 and paragraph 38(2)(d) of the Act?

[117]     Paragraph 38(2)(d) provides that a person may oppose an application for registration on the ground that the trade-mark is not distinctive. The word "distinctive" is defined as follows in section 2 of the Act:

[118]     In Havana House Cigar & Tobacco Merchants Ltd. v. Skyway Cigar Store (1998), 147 F.T.R. 54, [1998] F.C.J. No. 678 (F.C.), rev'd on other grounds by (1999), 251 N.R. 215, [1999] F.C.J. No. 1749 (F.C.A.), Teitelbaum J. writes:

As set out in Philip Morris Inc. v. Imperial Tobacco Ltd. (1985), 7 C.P.R. (3d) 254 (F.C.T.D.), aff'd (1987), 17 C.P.R. (3d) 237 (F.C.A.), aff'd (1987), 17 C.P.R. (3d) 287 (F.C.A.), three conditions must be met to prove distinctiveness (at page 270 (F.C.T.D.)):

(1) that a mark and a product (or ware) be associated; (2) that the "owner" uses this association between the mark and his product and is manufacturing and selling his product; and, (3) that this association enables the owner of the mark to distinguish his product from that of others.

The question of distinctiveness is a question of fact with the test being whether a clear message has been given to the public that the wares with which the trademark is associated and used are the wares of the trade-mark owner and not those of another party

[119]     In the case at bar, there is no doubt that the CARAMELLA mark is associated with its spread, and that this association is used by the respondent, who manufactures and sells it. The evidence further shows that this association enables the respondent to distinguish its product from that of others. The question of fact to examine in the paragraph 38(2)(d) analysis closely resembles the one that the judge must determine under the scheme of paragraph 12(1)(d) . Indeed, the issue is whether the applicant has clearly suggested to the public that the CARAMELLA trade-mark and the spread marketed under this name belong to it and do not belong to some other person, the applicant in this case. In both cases, the question of apparent or perceived origin of the products is crucial.

[120]     In view of the observations made in my analysis on the question of confusion, I believe that the respondent has given a clear message to the public that its mark belongs to it and not to any other person. The applicant has not submitted any new argument to show that the respondent's mark was not distinctive.

[121]     Having considered all of the circumstances, I am of the opinion that the CARAMELLA mark is distinctive and that the Board's decision need not be reviewed, in light of the applicable standard of review.

[122]     Given the result I have reached, the costs shall be borne by the applicant in favour of the respondent.

ORDER

THE COURT ORDERS THAT:

-            The appeal be dismissed with costs against the applicant.

                          "Simon Noël"

                                Judge

Certified true translation

K.A. Harvey

                    FEDERAL COURT

            SOLICITORS OF RECORD

DOCKET:       T-2019-04

STYLE OF CAUSE:    Saputo Groupe Boulangerie Inc. v. National Importers Inc.

PLACE OF HEARING:         Québec

DATE OF HEARING:            September 7, 2005

REASONS FOR JUDGMENT:       THE HONOURABLE MR. JUSTICE SIMON NOEL

DATE OF REASONS:            October 28, 2005        

APPEARANCES:

SOLICITORS OF RECORD: