Date: 20041224
Docket: T-354-03
Citation: 2004 FC 1781
Ottawa, Ontario, this 24th day of December, 2004
Present: THE HONOURABLE MR. JUSTICE O'REILLY
BETWEEN:
MANUFACTURIERS DE BAS DE NYLON DORIS LTEE/
DORIS HOSIERY MILLS LTD.
Applicant
and
WARNACO INC.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] The applicant, Manufacturiers de bas de Nylon Doris Ltée/Doris Hosiery Mills Ltd. (which I will refer to as "Doris"), is appealing a decision of the Trade Marks Opposition Board. The Board had refused to allow Doris to register the trade-mark "Secret" for underwear and lingerie. Doris has used that trade-mark for hosiery and pantyhose for many years and wants to expand the line. The respondent, Warnaco, opposed Doris's trade-mark application primarily on the ground that the "Secret" mark would be confused with its own trade-mark for "Secret Shapers" undergarments.
[2] Warnaco began selling its line of undergarments under the trade-mark "Secret Shapers" in September 1995. According to the evidence before the Board, its annual sales during the mid-1990s amounted to about $200,000. It uses the "Secret Shapers" mark in conjunction with the word "Olga" or "Olga's". Olga Canada is a division of Warnaco Canada Ltd., a licensee of Warnaco Inc, the respondent in this appeal.
[3] Doris began using the trade-mark "Secret" for hosiery in 1967. Later, other products were added to the line. Annual sales range between $26 million and $59 million for the period from 1986 to 1997. Doris applied to use the "Secret" mark for undergarments in October 1995.
[4] I am satisfied, in light of all the evidence and circumstances, that this appeal should be allowed and that Doris should be permitted to register its mark for undergarments.
I. Issues
1. What standard of review applies to the Board's decision?
2. What is the onus on Doris?
3. Is Doris's proposed mark likely to be confused with other marks, particularly Warnaco's?
4. Does Doris's proposed mark lack distinctiveness?
II. Analysis
1. What standard of review applies to the Board's decision?
[5] The parties agree that I should overturn the decision of the Board only if it was unreasonable, unless I find that there is new evidence before me that would have affected the Board's conclusion on a particular issue. In that case, I should decide whether, in light of all the evidence, the Board's decision was correct: Molson Breweries v. Labatt Brewing Co., [1996] F.C.J. No. 782 (T.D.) (QL); Dion Neckwear Ltd. v. Christian Dior, S.A. 2002 FCA 29, [2002] 3 F.C. 405, [2002] F.C.J. No. 95 (F.C.A.) (QL).
2. What is the onus on Doris?
[6] A person opposing registration of a trade-mark must produce evidence to support its objections. Then, the applicant for the mark must disprove the opponent's grounds of opposition. Here, Warnaco tendered evidence to support some of its contentions that Doris's proposed mark was not registrable. The Board found that Doris had not disproved those objections.
[7] Doris argues, however, that the Board misstated the standard of proof that a trade-mark applicant must meet. Regarding the issue of confusion, the Board stated that an applicant must "establish that there would be no reasonable likelihood of confusion between the marks in issue", citing John Labatt Ltd. v. Molson Companies Ltd., [1990] F.C.J. No. 533 (T.D.) (QL). Doris contends that this description of the legal burden on an applicant was rejected by the Federal Court of Appeal in Dion Neckwear Ltd., above.
[8] As I read the Dion Neckwear Ltd. case, the Federal Court of Appeal affirmed that the onus is on the applicant to show that the proposed mark is "unlikely to create confusion" (at para. 15). The standard of proof is the usual civil burden of a balance of probabilities. The Court stated that the Registrar of Trade-marks had erred in that case by requiring that the applicant show "beyond doubt" that "there was no reasonable likelihood of confusion".
[9] In the case before me, the Board required Doris to "establish" that there was no reasonable likelihood of confusion. "Establish" connotes a civil standard of proof and, therefore, complies with the Federal Court of Appeal's ruling in Dion Neckwear Ltd. True, that Court expressed the onus more clearly and simply when it said that the applicant must show that the proposed mark is "unlikely to create confusion". But the formulation employed by the Board in this case is the same in substance and I can find no error on the Board's part for having used it.
3. Is Doris's proposed mark likely to be confused with other marks, particularly Warnaco's?
(a) The Board's decision
[10] The Board concluded that Doris had failed to prove that it was unlikely that its proposed mark would be confused with others. As it was bound to do, according to s. 6 of the Trade-marks Act, R.S.C. 1985, c. T-13 (set out in the attached Annex), the Board considered all of the surrounding circumstances in deciding whether Doris's proposed mark was likely to be confused with Warnaco's mark. It found that Doris's trade-mark "Secret" had been used in relation to hosiery and pantyhose since 1967 and had acquired distinctiveness in relation to those products. However, the Board also found that the reputation of Doris's mark for those products was irrelevant to its application to use the mark on a wider range of wares.
[11] In addition, the Board found:
· a resemblance between Doris's "Secret" mark and Warnaco's "Secret Shapers" mark, primarily in sound;
· that Warnaco's mark is somewhat less distinctive than Doris's;
· that the trade-mark "Secret Slimmers" used by Sears Canada Ltd. detracted from the distinctiveness of Doris's mark;
· that there is an overlap in the nature of the wares in issue, and in the market for them;
· that Doris had used its "Secret" mark in relation to many products, but that it had not proved its parentage of a family of marks; rather, these various uses involved attaching the "Secret" mark to a distinct product name, not a true marriage between the "Secret" mark and a separate, conjoining element. Further, the Board noted the existence of several other trade-marks for similar products that included the word "Secret". This evidence, in the Board's view, was incompatible with Doris's claim to a family of "Secret" marks.
[12] Based on these factors, the Board concluded that if Doris used the "Secret" mark on the same kinds of wares as were sold by Warnaco, there was a reasonable probability that consumers would be confused about the source of those goods. In the Board's view, Doris had not met its onus of showing that consumers of undergarments would not be confused.
(b) The new evidence
[13] Doris filed three new affidavits on this appeal. The first contained an opinion from Mr. Michael Mulvey, a market research expert, suggesting that consumers would likely perceive undergarments labelled with the "Secret" mark as coming from the same source as "Secret" hosiery (i.e. Doris), not from Warnaco. Mr. Mulvey also concluded that consumers would likely recognize "Secret" products as part of a family of trade-marks with the same source. The second affidavit, from Ms. Cheryl Bowden, described her unsuccessful efforts to purchase Warnaco's product, "Secret Shapers", in various retail outlets. Two sales clerks had never heard of "Secret Shapers". Another mistakenly suggested to Ms. Bowden that "Secret Shapers" might be pantyhose. Ms. Bowden did find products manufactured by Warnaco for sale. All of them were labelled with the word "Olga" and none bore the name "Secret Shapers". The third affidavit, from Ms. Jacqueline Chernys, contained evidence relating to a licensing agreement between Doris and Sears Canada Ltd. Sears had once owned the trade-mark "Secret Slimmers" for an undergarment, but Doris acquired the mark from Sears and then licensed Sears to continue to use it. Sears' catalogues advertised the product along with a reference to Doris's trade-mark for it.
[14] Warnaco argues that these new affidavits are irrelevant or inadmissible as hearsay. In my view, Mr. Mulvey's affidavit is admissible as an expert opinion and relevant to the issue of confusion. While Ms. Bowden's affidavit recounts the statements of sales clerks, those statements are not offered for the truth of their contents. Ms. Bowden simply reports what the sales clerks said to her. Her affidavit is also relevant to the issue of confusion.
[15] As for Ms. Chernys's affidavit, it contains evidence of the licensing arrangement between Doris and Sears, and of the public notice given to that arrangement. It shows the relationship between Doris and Sears at the material time and is relevant to the question whether Sears' use of the "Secret Slimmers" mark enured to Doris's benefit.
[16] This evidence supplemented Doris's arguments that it had established a well-recognized trade-mark and a family of connected marks. Accordingly, it was relevant to the issue of confusion; that is, whether consumers would likely believe that Doris's products originated with Warnaco, or vice versa. In my view, this evidence would have materially affected the Board's analysis of that issue and, therefore, is admissible on this appeal. In turn, I must decide whether the Board's decision was correct, in light of all of the evidence.
(c) Was the Board's decision on confusion correct?
[17] In my view, the Board erred.
[18] Doris argued that its many trade-marks combining the word "Secret" with one or more other words (e.g. "Secret Colours") should be recognized as a family of marks. Its application to register "Secret" in relation to undergarments should, it submits, be seen simply as a request to recognize an additional family member. Doris relies on the analysis of the concept of a "family" of marks in McDonald's Corporation, et al v. Yogi Yogurt Ltd. (1982), 66 C.P.R. (2d) 101 (T.D.) (QL).
[19] However, I see the issue in McDonald's as distinct from the issue here. In McDonald's, the question was whether a multiplicity of registered trade-marks for products with the prefix "Mc" or "Mac" should allow McDonald's to argue that another company's new variant (i.e. McYogurt) was confusing. Justice Cattanach held that the owner of a series of well-known and related trade-marks can rely on its family of marks to show that another company's similar mark within the same range of wares would be confusing.
[20] Here, the question is whether Doris can point to its existing marks to show that consumers would likely associate it with a new line of products. It is not clear to me that the concept of a family of marks is particularly helpful in this context. The issue is whether Doris's proposed mark is confusing. All of the surrounding circumstances must be considered, including Doris's many "Secret" trade-marks. However, whether or not those marks could be said to constitute a "family" is not the prime concern. In my view, the Board erred by focussing too heavily on the question whether Doris had established a family of trade-marks instead of considering the significance of the array of Doris's marks in relation to the issue of confusion.
[21] The evidence before me suggests that consumers are sufficiently familiar with Doris's trade-mark "Secret", and the wares with which that mark is currently associated, that they would probably believe that closely-related products, such as undergarments, derived from the same source. In other words, consumers would probably not believe that undergarments sold under the trade-mark "Secret" were Warnaco's products.
[22] Mr. Mulvey's expert opinion is that "there is a very high likelihood" that consumers would associate "Secret" undergarments with the manufacturer of "Secret" hosiery and pantyhose. He considered a number of factors in arriving at that conclusion: the respective market share and position of the parties; the brand awareness of consumers; the manner in which brand information is communicated; the perceived "fit" of Doris's proposed brand extension with its existing line; the use of brand identifiers in the marketplace; and the realities of product display. Mr. Mulvey also concluded that consumers would be unlikely to connect "Secret" with "Secret Shapers" because Warnaco, according to its own evidence, always identified its products with the name "Olga". Ms. Bowden confirms this in her affidavit. Overall, I find Mr. Mulvey's evidence persuasive. He was cross-examined on his affidavit but his opinion was unshaken. Indeed, it was reinforced.
[23] In addition, the evidence before me clarifies Doris's licensing arrangement with Sears Canada Ltd. In my view, the evidence shows that Sears' use of the "Secret Slimmers" mark enured to Doris's benefit. It did not detract from or dilute the "Secret" mark. Sears referred to the licensing arrangement with Doris in its catalogues. According to the Trade-marks Act, when public notice of a license has been given and the owner of the license has been identified, the licensee's use of the trade-mark enures to the benefit of the owner (s. 50(1), (2)). Therefore, on the evidence before me, Sears' use of the "Secret Slimmers"trade-mark enures to Doris's benefit.
[24] Warnaco protests that the actual licensing agreement was not put in evidence by any representative of either Doris or Sears, and that Doris provided no proof that it controlled Sears' use of the mark. But I see no absolute requirement for actual proof of the agreement. The Act simply states that where public notice is given that a mark is being used under license, the licensor is presumed to be the beneficiary of that use. Here, Sears "used" the mark by including it in its advertisements for the relevant wares. The Act defines "use" to include situations where a trade-mark is associated with wares in a manner that communicates to the consumer that there is a connection between the mark and the wares (s. 4(1)). In my view, Sears' association of the "Secret Slimmers" mark with the corresponding product in its catalogue constitutes "use" of Doris's mark. That use, in combination with the reference to the license agreement with Doris, amounted to public notice that the mark was being used under license.
[25] In addition, in these circumstances, the Act does not require proof that the licensor exercised control over the licensee's use. Rather, once it has been proved that public notice has been given of the licensed use of the trade-mark and of the identity of the mark's owner, it is presumed that the owner has control over the character and quality of the wares with which the mark is associated (s. 50(2)).
[26] In my view, the Board erred in concluding that the licensing arrangement between Doris and Sears did not enure to Doris's benefit.
[27] Considering the totality of the evidence before me and all the surrounding circumstances, I am satisfied that Doris has discharged its burden of showing that consumers would probably not be confused about the source of undergarments labelled with the "Secret" mark.
4. Does Doris's proposed mark lack distinctiveness?
[28] In light of its finding on confusion, the Board gave scant attention to the issue of distinctiveness. It concluded that Warnaco had shown that its trade-mark "Secret Shapers" was known at the relevant time; that is, when it filed its opposition to Doris's mark in October 1996. The Board found that Doris had failed to show that its "Secret" mark, as applied to undergarments, would be distinguishable from other marks, including Warnaco's.
[29] In my view, the evidence that is relevant to the issue of confusion, and which is referred to earlier, is also relevant to the issue of distinctiveness. The evidence introduced on this appeal satisfies me that the "Secret" brand is distinctive in relation to hosiery and pantyhose, and that consumers would also find it distinctive in relation to undergarments.
[30] Accordingly, having found that the Board erred on the two issues on which it decided against Doris, I must allow this appeal and overturn the Board's decision.
JUDGMENT
THIS COURT'S JUDGMENT IS that:
1. The appeal is allowed with costs.
"James W. O'Reilly"
Judge
| Trade-marks Act, R.S.C. 1985, c. T-13
When deemed to be used
4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
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Loi sur les marques de commerce, L.R.C. 1985, ch. T-13
Quand une marque de commerce est réputée employée
4. (1) Une marque de commerce est réputée employée en liaison avec des marchandises si, lors du transfert de la propriété ou de la possession de ces marchandises, dans la pratique normale du commerce, elle est apposée sur les marchandises mêmes ou sur les colis dans lesquels ces marchandises sont distribuées, ou si elle est, de toute autre manière, liée aux marchandises à tel point qu'avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
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| When mark or name confusing
6. (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.
...
What to be considered
(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
(b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
Licence to use trade-mark
50. (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.
(2) For the purposes of this Act, to the extent that public notice is given of the fact that the use of a trade-mark is a licensed use and of the identity of the owner, it shall be presumed, unless the contrary is proven, that the use is licensed by the owner of the trade-mark and the character or quality of the wares or services is under the control of the owner.
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Quand une marque ou un nom crée de la confusion
6. (1) Pour l'application de la présente loi, une marque de commerce ou un nom commercial crée de la confusion avec une autre marque de commerce ou un autre nom commercial si l'emploi de la marque de commerce ou du nom commercial en premier lieu mentionnés cause de la confusion avec la marque de commerce ou le nom commercial en dernier lieu mentionnés, de la manière et dans les circonstances décrites au présent article.
[...]
Éléments d'appréciation
(5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l'espèce, y compris_:
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus;
b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage;
c) le genre de marchandises, services ou entreprises;
d) la nature du commerce;
e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent.
Licence d'emploi d'une marque de commerce
50. (1) Pour l'application de la présente loi, si une licence d'emploi d'une marque de commerce est octroyée, pour un pays, à une entité par le propriétaire de la marque, ou avec son autorisation, et que celui-ci, aux termes de la licence, contrôle, directement ou indirectement, les caractéristiques ou la qualité des marchandises et services, l'emploi, la publicité ou l'exposition de la marque, dans ce pays, par cette entité comme marque de commerce, nom commercial - ou partie de ceux-ci - ou autrement ont le même effet et sont réputés avoir toujours eu le même effet que s'il s'agissait de ceux du propriétaire.
(2) Pour l'application de la présente loi, dans la mesure où un avis public a été donné quant à l'identité du propriétaire et au fait que l'emploi d'une marque de commerce fait l'objet d'une licence, cet emploi est réputé, sauf preuve contraire, avoir fait l'objet d'une licence du propriétaire, et le contrôle des caractéristiques ou de la qualité des marchandises et services est réputé, sauf preuve contraire, être celui du propriétaire.
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FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-354-03
STYLE OF CAUSE: MANUFACTURIERS DE BAS DE NYLON DORIS LTEE/DORIS HOSIERY MILLS LTD. v. WARNACO INC.
PLACE OF HEARING: OTTAWA
DATE OF HEARING: June 24, 2004
REASONS FOR JUDGMENT
AND JUDGMENT BY: THE HONOURABLE MR. JUSTICE O'REILLY
DATED: December 24, 2004
APPEARANCES BY:
Susan D. Beaubien
Wendy Riel FOR THE APPLICANT
Diane E. Cornish FOR THE RESPONDENT
L. Marisia Campbell
SOLICITORS OF RECORD:
BORDEN LADNER GERVAIS LLP FOR THE APPLICANT
Ottawa, ON
OSLER HOSKIN & HARCOURT LLP
Ottawa, ON FOR THE RESPONDENT
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