Date: 20050304
Docket: T-1945-02
Citation: 2005 FC 317
OTTAWA, Ontario, March 4th, 2005
Present: THE HONOURABLE MR. JUSTICE KELEN
BETWEEN:
GLOBAL RESTAURANT OPERATIONS OF IRELAND LIMITED and BOSTON MARKET CANADA COMPANY
Applicants
and
BOSTON PIZZA ROYALTIES LIMITED PARTNERSHIP
Respondent
REASONS FOR ORDER AND ORDER
[1] This is a motion brought by the respondent pursuant to Rule 105 of the Federal Court Rules, 1998 for an order that this application be joined with action T-1319-02 for common evidence and hearing by the same judge and that the application be heard immediately following the action.
BACKGROUND
The Action - T-1319-02
[2] On August 15, 2002, Boston Pizza International Inc. (BP International) commenced an action against Boston Market Corporation, Boston Market Canada Company, Global Restaurant Operations of Ireland Ltd. (Global Restaurant) and McDonald's Restaurants of Canada Ltd. seeking an injunction restraining the defendants from using the name "Boston Market" for restaurants or restaurant services in Canada. The Boston Market companies are related to McDonald's Corporation while Global Restaurant is the owner of certain intellectual property rights, including those relating to the name "Boston Market". A further plaintiff, Boston Pizza Royalties Limited Partnership (BP Partnership), was added to the action in January 2003.
[3] The plaintiffs allege that the name "Boston Market" is confusing with seven of their trade-marks and that by using the name "Boston Market" the defendants have infringed and depreciated the goodwill of the Boston Pizza marks contrary to sections 20 and 22 of the Trade-marks Act, R.S.C. 1985, c. T-13. The plaintiffs also claim relief for passing-off pursuant to subsection 7(b) of the Act.
[4] The defendants counterclaim that the Boston Pizza marks are invalid because they are descriptive of a style of pizza from the city of Boston, Massachusetts. They also allege that the marks are not distinctive of the plaintiffs because third parties have used similar names in Canada in relation to restaurant services.
[5] In May 2003, the plaintiffs brought a motion for dismissal of the counterclaim. Justice Tremblay-Lamer allowed the motion in part and dismissed the defendants counter-claim with respect to four Boston Pizza trade-marks that did not contain the word "Boston". The decision was affirmed on appeal.
[6] The defendants, Global Restaurant and Boston Market Canada, served their affidavits of documents on July 22, 2004. At the same time, the defendants McDonald's Restaurants of Canada and Boston Market Corporation brought a motion for summary judgment dismissing the action against them. Justice Hugessen dismissed the motion on October 21, 2004 and held that there was a genuine issue as to whether the two defendants were active participants in the allegedly infringing activities. Justice Hugessen also ordered that the two defendants file their affidavits of documents by November 21, 2004 (which they did) and that discoveries be completed by February 28, 2005.
[7] The parties made arrangements to conduct the examinations for discovery in February so that they should be completed or nearly completed at this point.
The Application - T-1945-02
[8] The applicants, Global Restaurant and Boston Market Canada, commenced an application on November 19, 2002 against BP Partnership seeking expungement of seven Boston Pizza trade-marks. The applicants state that in July 2002, the trade-marks at issue were transferred from BP International to BP Partnership as part of a share financing transaction. The trade-marks were then licensed back to BP International for a ninety-nine year term. The applicants claim that although BP Partnership owns the trade-marks, BP International has retained de facto control over marks and no steps have been taken to notify the public of the transfer of ownership to BP Partnership. Consequently, the marks are not distinctive of BP Partnership and should be expunged.
[9] On November 29, 2004, the applicants filed a Requisition for Hearing asking that a date be set for the hearing of the application. In their request, the applicants indicated that both parties had served and filed their records in mid-2004.
ANALYSIS
Legal Principles
[10] The Court has inherent jurisdiction to order that proceedings be arranged in a manner that simplifies the proceedings and reduces costs for the parties and the Court. Apotex Inc. v. Wellcome Foundation Ltd. (1993), 69 F.T.R. 178 at paragraph 13. In addition, Rule 105 of the Federal Court Rules, 1998 specifically authorizes the Court to consolidate two or more proceedings:
| Consolidation of Proceedings
105. The Court may order, in respect of two or more proceedings,
(a) that they be consolidated, heard together or heard one immediately after the other;
(b) that one proceeding be stayed until another proceeding is determined; or
(c) that one of the proceedings be asserted as a counterclaim or cross-appeal in another proceeding.
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Réunion d'instances
105. La Cour peut ordonner, à l'égard de deux ou plusieurs instances :
(a) qu'elles soient réunies, instruites conjointement ou instruites successivement;
(b) qu'il soit sursis à une instance jusqu'à ce qu'une décision soit rendue à l'égard d'une autre instance;
(c) que l'une d'elles fasse l'objet d'une demande reconventionnelle ou d'un appel incident dans une autre instance.
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[11] The policy objectives underlying consolidation are the avoidance of a multiplicity of proceedings and the promotion of expeditious and inexpensive determination of those proceedings. John E. Canning Ltd. v. Tripap Inc., [1999] F.C.J. No. 715 at paragraph 27. In deciding whether to consolidate proceedings the Court will consider whether there are common parties, common legal and factual issues, similar causes of action, parallel evidence and the likelihood that the outcome of one case will resolve the other case. Eli Lilly and Co. v. Apotex Inc. (1994), 55 C.P.R. (3d) 429 and Canning, supra. In addition, proceedings should not be consolidated if one of the parties would be prejudiced. Eli Lilly, supra.
Arguments
[12] The moving party, BP Partnership, argues that consolidation of the proceedings is appropriate for a number of reasons. First, all three parties in the application are parties to the action. Second, the proceedings share similar factual and legal issues as they are concerned with the distinctiveness and goodwill of the same Boston Pizza marks. Third, similar evidence will be led in both proceedings regarding the use of the trade-marks by BP Partnership through Boston Pizza International and various franchisees. The same three witnesses will provide evidence in the proceedings. Moreover, BP Partnership argues that the outcome of the application will not resolve the issues in the action because even if Boston Market is successful in having the trade-marks expunged, Boston Pizza's claim for statutory passing-off will not be affected. BP Partnership also argues that the claims raised in the application could and should have been sought in the counterclaim to the action.
[13] Prior to August 2004, the responding parties (the applicants), Boston Market Canada and Global Restaurant, agreed that the action and application should be consolidated. However, on November 16, 2004, the applicants advised BP Partnership that as a result of delays in the action, they no longer considered consolidation appropriate. The delays identified by the applicants relate to the dismissal of the motion for summary judgment as well as the plaintiffs' lack of initiative in advancing the action. In particular, the applicants claimed that the plaintiffs had not taken steps to schedule the examinations for discoveries. Based on the moving party's reply, the examinations for discovery were scheduled for February, so that they should be completed or almost completed at this point.
[14] In their submissions, Boston Market Canada and Global Restaurant acknowledge that the parties to the application are common to the action, however, they note that BP Partnership is represented by different counsel in the proceedings. Furthermore, while there are some common factual and legal issues, the principal issues differ. In particular, the primary issue in the action is whether there has been infringement by the defendants of any of the Boston Pizza marks. This will involve consideration of whether the term "Boston Market" is confusing with any of the Boston Pizza trade-marks. Also at issue in the action is whether the defendants McDonald's and Boston Market Corporation are mere contractors or whether they are active participants in the allegedly infringing activities. By contrast, the sole issue in the application is whether the Boston Pizza marks have lost distinctiveness by virtue of the share financing transaction and ought to be expunged. This does not involve consideration of the use of the term "Boston Market" or the activities of the applicants.
[15] Moreover, the applicants note that all seven Boston Pizza trade-marks are being challenged in the application whereas, due to the order of Justice Tremblay-Lamer, only three of the marks can be contested in the action. They also argue that Boston Pizza has failed to establish that it would be prejudiced if the proceedings were not consolidated.
[16] Finally, the applicants claim that if the application is heard before the action and determined in their favour, the plaintiffs' claim for trade-mark infringement in the action will be resolved. Therefore, it would be more expedient to have the application heard quickly and prior to the action.
Consolidation in the Present Case
[17] There are differences in the legal issues raised in the application and the action. In particular, the activities of the applicants or the use of the name "Boston Market" are not at issue in the application, whereas they are of primary concern in the action. Moreover, the basis for the applicants' claim of non-distinctiveness of the Boston Pizza marks is different in each proceeding.
[18] Despite these differences, I am of the view that there are policy reasons for having the proceedings heard consecutively by the same judge. The parties to the application are common to the action and the factual background is the same in both proceedings. Furthermore, it is likely that there will be overlapping evidence with respect the public's perception of the Boston Pizza marks in the distinctiveness analyses. In my opinion, it would be duplicative and inefficient to have two different judges canvass and analyse the same information.
[19] Prior to August 2004, the applicants agreed that the proceedings should be heard consecutively by the same judge. The main reason for their change in position was that the plaintiffs were not being diligent in pursuing the action. Since examinations for discovery in the action were scheduled for February, the action will be ready to proceed to hearing in the near future. Consequently, the application will not be delayed if it is heard together with the action.
[20] The applicants also argue that if the application is heard prior to the action and determined in their favour, it will resolve the action. I agree that if they are successful and the Boston Pizza trade-marks are expunged, the issues at trial will be narrowed (i.e., only the claim for statutory passing-off will remain). However, because the action has now advanced to examinations for discovery, it is doubtful that the application could be heard and determined before trial begins. The trial judge would have to postpone the hearing of the action until the decision in the application is rendered or risk addressing issues that may become moot. In order to avoid such a situation, it is appropriate that the application be heard consecutively to the action by the same judge. This will allow the proceedings to be determined in the most efficient and expeditious manner.
[21] Accordingly, the respondent's motion will be allowed. This application will be joined with action T-1319-02 for common evidence and hearing by the same judge and the application will be heard immediately after the hearing of the action.
ORDER
THIS COURT ORDERS THAT:
1. The respondent's motion is allowed;
2. This application will be heard immediately after action T-1319-02 by the same judge;
3. The evidence in both matters will be consolidated to avoid duplication, subject to any other ruling by the trial judge; and
4. Costs in the cause.
"Michael A. Kelen"
JUDGE
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1945-02
STYLE OF CAUSE: GLOBAL RESTAURANT OPERATIONS OF IRELAND LIMITED and BOSTON MARKET CANADA CORP. v. BOSTON PIZZA ROYALTIES LIMITED PARTNERSHIP
MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES
REASONS FOR ORDER AND ORDER BY: KELEN J.
DATED: MARCH 4, 2005
WRITTEN REPRESENTATIONS BY:
SOLICITORS OF RECORD:
FEDERAL COURT
Date: 20050304
Docket: T-1945-02
BETWEEN:
GLOBAL RESTAURANT OPERATIONS OF IRELAND LIMITED and BOSTON MARKET CANADA CORPORATION
Applicants
and
BOSTON PIZZA ROYALTIES LIMITED PARTNERSHIP
Respondent
REASONS FOR ORDER
AND ORDER
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