Express File Inc. v. HRB Royalty Inc., 2005 FC 542

Date: 20050421

Docket: T-241-02 and T-1059-02

Citation: 2005 FC 542

Ottawa, Ontario, April 21, 2005

Present:           THE HONOURABLE MR. JUSTICE BEAUDRY                                    

BETWEEN:

                                                            EXPRESS FILE INC.

                                                                                                                                            Applicant

                                                                           and

                                                           HRB ROYALTY INC.

                                                                                                                                        Respondent

                                            REASONS FOR ORDER AND ORDER

[1]                 These are two appeals under section 56 of the Trade-Marks Act, R.S.C. 1985, c. T-13 Act) of two decisions rendered on December 7, 2001 and May 9, 2002, respectively by the Trade-Marks Opposition Board. Officers Jill W. Bradbury and C.R. Folz rendered the decisions. Officer Bradbury dismissed the applicant's opposition to the respondent's application no. 797,808 for the registration of trade-mark EXPRESS FILE H & R BLOCK. Officer Folz dismissed the applicant's application no. 821,155 to register trade-mark EXPRESS FILE.

ISSUE

[2]                The issue is as follows:

1.         Was the applicant's EXPRESS FILE trade-mark "used" within the meaning of the Act in association with the services on electronic tax filing on or before January 31, 1992?

[3]                For the following reasons, I must answer this question in a negative manner. Therefore, the appeals will be dismissed.

BACKGROUND

[4]                On November 21, 1995, HRB Royalty Inc. (respondent) filed application no. 797,808 for the registration of the EXPRESS FILE H & R BLOCK trade-mark in association with the electronic filing of tax returns in Canada.

[5]                Express File Inc. (applicant) owns a United States (U.S.) trade-mark for the EXPRESS FILE electronic tax filings in the U.S. This trade-mark was registered on March 3, 1992 under registration no. 1,677,866. On August 20, 1996, the applicant filed its Canadian trade-mark application no. 821,155 for its EXPRESS FILE trade-mark claiming the benefits of section 14 of the Act on the basis of the registration of the trade-mark in the U.S.

[6]                On December 17, 1996, the applicant filed a Statement of Opposition to the respondent's application no. 797,808, which was rejected by the Trade-Marks Opposition Board on December 7, 2001. The applicant appealed this decision on February 14, 2002 pursuant to section 56 of the Act (T-241-02).

[7]                On April 29, 1997, the respondent filed a Statement of Opposition to the applicant's application no. 821,115. The hearing was held on December 7, 2001 and a decision rendered on May 9, 2002 refused the applicant's application. The applicant appealed this decision on July 9, 2002 pursuant to section 56 of the Act (T-1059-02).

CONTESTED DECISION

Decision rendered by Hearing Officer Jill W. Bradbury (T-241-02) (December 7, 2001)

[8]                The Officer concluded that the applicant could not rely on paragraph 16(3)(b) of the Act to oppose the respondent's application since its application was not filed prior to the respondent's application. She was also of the opinion that the applicant could not rely on subparagraph 30(i) of the Act since it has not demonstrated that the respondent was aware of its trade-mark when it filed its application. She also rejected the applicant's opposition based on subparagraph 30(e) because the applicant did not file evidence demonstrating that the respondent never had the intention of using the trade-mark it wanted to register. Finally, she was of the opinion that the applicant had not demonstrated that its product was "used" or available in Canada or that a substantial number of Canadians knew its trade-mark name.

Decision rendered by Hearing Officer C.R. Folz (T-1059-02) (May 9, 2002)

[9]                The Officer concluded that the applicant had not shown that its services were used in Canada in the manner contemplated by subsection 4(2) of the Act by the relevant date, which in this case was January 31, 1992. Therefore, he found the respondent's first ground of opposition, under paragraph 30(b) of the Act, to be successful. He was also of the opinion that the applicant failed to meet the legal burden with regard to the issue of confusion and distinctiveness. Therefore, based on the respondent's opposition, the Officer refused the applicant's application pursuant to subsection 38(8) of the Act.

RELEVANT PROVISIONS

ANALYSIS

Standard of review

[10]            In Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145 (C.A.), the Federal Court of Appeal addressed the question of the nature of an appeal under section 56 of the Act and the applicable standard of review. Mr. Justice Rothstein, speaking for the majority, said that:

Because of the opportunity to adduce additional evidence, section 56 is not a customary appeal provision in which an appellate court decides the appeal on the basis of the record before the court whose decision is being appealed. A customary appeal is not precluded if no additional evidence is adduced, but it is not restricted in that manner. Nor is the appeal a "trial de novo" in the strict sense of that term. The normal use of that term is in reference to a trial in which an entirely new record is created, as if there had been no trial in the first instance [See Note 12 below]. Indeed, in a trial de novo, the case is to be decided only on the new record and without regard to the evidence adduced in prior proceedings [See Note 13 below]. (para. 46)

On an appeal under section 56, the record created before the Registrar forms the basis of the evidence before the Trial Division judge hearing the appeal, which evidence may be added to by the parties. Thus, although the term trial de novo has come into frequent usage in describing a section 56 appeal, the term is not an entirely accurate description of the nature of such an appeal. That an appeal under section 56 is not a trial de novo in the strict sense of the term was noted by McNair J. in Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) [See Note 14 below]. (para. 47)

An appeal under section 56 involves, at least in part, a review of the findings of the Registrar. Even though the Trade-marks Act expressly provides for an appeal to the Federal Court, the Registrar's expertise has been recognized as requiring some deference. (para. 48) [...] [my emphasis]

[I]n the absence of additional evidence adduced in the Trial Division, the Registrar's decisions, 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. (para. 51)

[11]            In summary, it was held that section 56 of the Act does not provide for customary appeals as parties are not precluded from introducing new evidence. The appeal under section 56 was determined to include a review of the findings of the Registrar's decision. Because of the Registrar's expertise, the Court concluded that an appeal requires some deference. Therefore, in absence of additional evidence adduced, the Registrar's decisions are to be reviewed on a standard of reasonableness simpliciter. However, when additional evidence that could materially affect the Registrar's finding is adduced in Court, the trial judge must apply the standard of correctness.

[12]            In the present case, the applicant filed, on July 30, 2002, two affidavits sworn by Gary Porter and Geraldine Teresa Lonergan. The respondent submits that this new evidence is merely repetitive of the evidence presented before the Registrar and that it adds nothing of significance. Therefore, it alleges that the standard of review applicable to these appeals is reasonableness simpliciter. On the other hand, the applicant submits that it filed substantive affidavits and that the Registrar's decisions should be reviewed based upon the standard of correctness.

[13]            After a complete review of the affidavits presented before the Officers, I agree with the respondent that the new affidavits presented before this Court are a mere repetition of the evidence presented before the Registrar. I find nothing in those additional affidavits that could have materially affected the decision makers. Therefore, the appropriate standard of review is reasonableness simpliciter.

Legislative scheme

[14]            To register a trade-mark in Canada, an applicant needs to file a trade-mark application. The filed trade-mark application is then examined by the Trade-marks Office, to assess whether:

(a)        the trade-mark application is in proper form (section 30 of the Act);

(b)        the trade-mark is registrable (sections 12 to 15 of the Act); and

(c)        the person applying to register the trade-mark is in fact the person entitled to register the mark (section 16 of the Act).

[15]            Where the Registrar is not satisfied that the trade-mark application should be refused, the Registrar then directs that the trade-mark application be advertised in order to give an opportunity to any interested parties to oppose the application (section 37 of the Act).

[16]            In order to oppose a trade-mark, the opponent must file a Statement of Opposition which sets out, among other things, the grounds for the opposition (see section 38 of the Act). Interested parties may oppose a trade-mark application on the basis that:

(a)        the trade-mark application is not in proper form;

(b)        the trade-mark is not registrable;

(c)        the person applying to register the trade-mark is not the person entitled to register the mark; and

(d)        the trade-mark lacks distinctiveness.

[17]            If the Registrar officer believes that the Statement of Opposition does not raise a substantive issue, he can reject the opposition (subsection 38(4) of the Act). However, if he believes that the Statement of Opposition raises a substantive issue, the Statement of Opposition will be forwarded to the applicant so that the applicant has the opportunity to file a Counter Statement (subsections 38(5) and (6) of the Act). Both the opponent and the applicant are then given an opportunity to submit evidence and to make representations to the Registrar of Trade-Marks (subsection 38(7) of the Act). After considering the evidence and representations of the opponent and the applicant, the Registrar of Trade-Marks will then either refuse the application or reject the opposition (subsection 38(8) of the Act).

Was it an error to conclude that the applicant had not "used" its trade-mark as provided in in section 4(2) of the Act?

[18]            The applicant argues that its trade-mark has been used in Canada in association with the electronic tax filing services since at least January 31, 1992. Consequently, it says that the date of first use of its trade-mark is well prior to the date of application of the respondent's trade-mark no. 798,808.

[19]            On the other hand, the respondent submits that the applicant does not comply with the requirements of section 30 of the Act. More particularly, it alleges that the applicant has not used its trade-mark according to the meaning of section 4 of the Act as required by paragraph 30(b). It further submits that the jurisprudence has clearly established that the services must be performed in Canada and that the mere advertising of services performed outside of Canada does not constitute use of the mark in Canada.

[20]            Subsection 4(2) of the Act provides that "[a] trade-mark is deemed used in association with services if it is used or displayed in the performance or advertising of those services". The display of a mark in the advertising of a service may constitute use in association with that service. However, such as mentioned in Porter v. Don the Beachcomber (1966), 48 C.P.R. 280 at 287 (see also Canadian Kennel Club v. Continental Kennel Club (1997), 77 C.P.R. (3d) 470 (F.C.T.D.)), the service that is advertised must also be performed in Canada:

I shall therefore hold that "use in Canada" of a trade mark in respect of services is not established by mere advertising of the trade mark in Canada coupled with performance of the services elsewhere but requires that the services by performed in Canada and that the trade mark be used or displayed in the performance or advertising in Canada of such services.

[21]            This position was reiterated in Marineland Inc. v. Wonderland and Animal Park Ltd., [1974] 2 F.C. 558 (T.D.), where it was held that the sale of entrance vouchers to Marineland's attraction in Florida by travel agents and tour organizers in Canada does not constitute "use" in association with services because to enjoy Marineland's services, one would have to attend Marineland's premises in Florida.

[22]            In another decision, such as in Bedwell Management Systems Inc. v. Mayflower Transit, Inc. (1999), 2 C.P.R. (4^th) 543 (T.M. Opp. Bd.), it was mentioned that even if the service has not yet been performed in Canada, it may be sufficient if the trade-mark owner is offering and is prepared to perform that service in Canada. This point of view is, however, limited by the decision rendered in Denman Place Investments Ltd. v. Hefru Food Services Ltd. (1972), 8 C.P.R. (2d) 199 (Reg. of T.M.), that noted that a mark displayed in the pre-launch advertising of a service that is not yet available does not constitute use of the mark.

[23]            Since it is well recognized that the use of a trade-mark in relation with a service must be decided on a case-by-case basis, listed below is a summary of the evidence adduced.

[24]            The EXPRESS FILE electronic tax filing services have been available in the U.S since 1990. Between 1990 and 1995, the EXPRESS FILE service was made available to customers through U.S. bank or credit unions. No institution in Canada was involved. During the relevant years, nor was the EXPRESS FILE service offered to file Canadian tax returns.

[25]            Banks and credit unions were responsible for their own marketing. EXPRESS FILE Inc. provided the banks and credit unions with counter display and promotional material. Numerous examples of promotional materials were provided but none of the examples contained a date, as the same promotional material is used year after year.

[26]            Mr. Gary Porter, the President of EXPRESS FILE Inc., stated that it is possible that banks and credit unions close to the Canadian border could have Canadian clients. He therefore testified that promotional materials were sent to Canadians living in Canada because bank and credit unions mailed the information to all of their depositors, including Canadians. He explained, however, that it was impossible for him to provide a percentage of promotional advertising costs attributed to promoting in Canada as banks and credit unions were the ones responsible for the promotion.   

[27]            Mr. Joseph Grano, a former manager of the M & T Bank deposed that the Bank encouraged customers to use the EXPRESS FILE services. In order to do so, it mailed out information to the Bank's customers, including customers located in Canada. He indicated that the EXPRESS FILE service was advertised on several occasions.

[28]            Canadian clients who frequented U.S banks or U.S credit unions were exposed to the EXPRESS FILE promotional materials and were entitled to use this service for making tax filings with the IRS. Customers were invited to either bring their completed tax filing kit back to the bank or to mail the kits directly to the bank's office. He indicated that it never had a processing centre in Canada nor was there an office in Canada.

[29]            In order for Canadians to use the EXPRESS FILE service, they must have used a U.S. return mailing address when filing electronically as the EXPRESS FILE software system could not recognize alphanumeric digits. They absolutely needed a U.S. postal code. Mr. Porter could not provide a percentage of Canadians using the EXPRESS FILE service because Canadian customers needed to use a U.S. address. It was also demonstrated that the 1-800 number was available from Canada in the event that Canadian customers needed help filing the EXPRESS FILE kit.

CONCLUSION          

[30]            In the case at hand, there is no evidence demonstrating that the EXPRESS FILE service was advertised in Canada nor is there any concrete evidence that it was used and known by Canadians at the relevant period of time. The evidence produced by Mr. Grano and Mr. Porter reveals a lack of evidence of actual use and advertising. In fact, Mr. Porter is relying on the fact that some of the institutions that have a licence to use the EXPRESS FILE service have Canadians customers. It is based on this premise that he assumes that Canadians were aware of the existence of the applicant's product.

[31]            Mr. Porter testified that, during the relevant years (1992-1995), EXPRESS FILE Inc. did not promote or advertise directly the EXPRESS FILE service. He clearly mentioned that the bank and credit unions using the EXPRESS FILE service were responsible for their own promotion and advertisement. He said that he believes that some of his clients may have advertised the EXPRESS FILE service in newspapers and that some of those newspapers might have been available in Canada. However, no evidence was adduced.

[32]            In fact, there is no evidence that the applicant's services were advertised in Canada in newspapers, magazines or that direct mail advertising the applicant's services was sent to Canadians.

[33]            It appears from the evidence that no promotional material was directly provided for promotion in Canada nor were Canadian residents directly targeted. In fact, the only Canadians that might have been aware of the EXPRESS FILE service were the ones who happened to deal with U.S. financial institutions.

[34]            Moreover, even if this product had been advertised in Canada, this service was not offered in Canada. In order to use the applicant's EXPRESS FILE service, a Canadian needed not only to fill out the kit but also to drop the EXPRESS FILE kit at his or her U.S. bank or mail it back to it.

[35]            The applicant submits that the jurisprudence has changed since Porter, supra because of Gesco Industries, Inc. v. Sim & McBurney, [2000] F.C.J. No. 1766 (C.A.) (QL), Saks & Co. v. Canada (Registrar of Trade Marks), [1989] F.C.J. No. 28 (T.D.) (QL), Wenward (Canada) Ltd. v. Dynaturf Co. (1976), 28 C.P.R. (2d) 20, Société nationale des chemins de fer français v. Venice Simplon-Orient-Express Inc., [2000] F.C.J. No. 1897 (T.D.) (QL).

[36]            I have analyzed those cases and I do not agree. In Gesco, supra, the case of Porto was not discussed. The background is also different and the services of stain resistant application to carpets and rugs were rendered in Canada. In Saks & Co., supra, the evidence showed that "the company responds to mail and telephone orders from Canada for merchandise, grants credit to Canadian customers¼.". In Wenward, supra, the services of constructing and re-surfacing of tennis courts were also performed in Canada. In Société nationale des chemins de fer français, supra, the bookings, reservations, and ticketing services were also performed in Canada even though it was for a railway passenger service in Europe. The evidence in that last case showed that the name SIMPLON-ORIENT-EXPRESS appeared on invoices to travel agencies in Canada.

[37]            I therefore find no errors in fact or law in the decisions contested.

                                               ORDER

THIS COURT ORDERS that the appeals are dismissed. Costs to the Respondent.

                 "Michel Beaudry"                         

Judge

FEDERAL COURT

NAME OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                                               T-241-02 and T-1059-02

STYLE OF CAUSE:                                                               EXPRESS FILE INC. v.

HRB ROYALTY INC.

PLACE OF HEARING:                                                         Toronto, Ontario

DATE OF HEARING:                                                           April 18, 2005

REASONS FOR ORDER:                                                    BEAUDRY J.          

DATED:                                                                                  April 21, 2005

APPEARANCES:                                                                  

Kenneth D. McKay                                                                 FOR THE APPLICANT

Margaret Weltrowska                                                                FOR THE RESPONDENT

Stefan Martin

SOLICITORS OF RECORD:                                              

SIM, HUGHES, ASHTON & McKAY, LLP                           FOR THE APPLICANT

Toronto, Ontario

FRASER MILNER CASGRAIN, s.r.l.                                     FOR THE RESPONDENT

Montreal, Quebec