Metro Goldwyn Mayer Inc. v. Stargate Connections Inc., 2004 FC 1185

Date: 20040830

Docket: T-607-01

Citation: 2004 FC 1185

BETWEEN:

                                               METRO-GOLDWYN-MAYER INC.

                                                                                                                                            Applicant

                                                                           and

                                                STARGATE CONNECTIONS INC.

                                                                                                                                        Respondent

                                                        REASONS FOR ORDER

SIMPSON, J.

[1]                Metro-Goldwyn-Mayer Inc. (the "Opponent") appeals a decision of the Registrar of Trade-Marks ("Registrar") made on February 7, 2001 (the "Decision") rejecting its opposition and allowing application No. 807,005 dated March 25, 1996 for registration of the trade-mark Stargate by Stargate Connections Inc. (the "TM Applicant"). The Opponent seeks an order reversing the Decision.

BACKGROUND

[2]                On April 26, 1994, the Opponent's predecessor in title filed its initial application No. 752,138 to register the trademark Stargate. That application, which is still pending, was made in connection with the wide variety of goods and services described in paragraph 7 below, including the production, distribution and screening of a movie called Stargate (the "Movie"). In September of 1994, the Opponent launched a website for the Movie and, in October of 1994, the Movie was released in Canada.

[3]                Approximately one year later, in August of 1995, the TM Applicant started an internet services business which specialized in web site development and publishing. As well, it provided internet marketing services.

[4]                On December 20, 1995, the Opponent filed its second application No. 800,728 for the trademark Stargate with respect to additional merchandise. That application is also pending.

[5]                On March 15, 1996, the TM Applicant filed application No.807,005 pursuant to section 30 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the "Act") for the trademark Stargate (the "Subject Mark") based on alleged use from August 1995. The application was made in connection with "internet services, such as web site development, web site publishing and internet design, marketing and connection" (collectively, "Internet Services").

[6]                On July 4, 1997, the Opponent filed its opposition to the TM Applicant's application for the Subject Mark.

THE FOUR GROUNDS OF OPPOSITION (as described in the Registrar's Decision)

[7]               

Grounds of Opposition

The first ground of opposition is that the application does not comply with Subsection 30(b) of the Trade-marks Act because the applicant has not used the mark since the date of first use claimed in the application in association with the services covered by the application. The opponent did not file any evidence in support of this ground of opposition and did not make any submissions concerning this ground in its written argument. I find that the opponent has not satisfied its evidentiary burden with respect to this ground of opposition and this ground of opposition therefore fails.

The second ground of opposition is based on Paragraph 16(1)(a) of the Act, the opponent alleging that the applicant is not the person entitled to register the mark because the mark is confusion with the opponent's trade-mark STARGATE which had been previously used in Canada by the opponent and its predecessor-in-title, Le Studio Canal + (U.S.), in association with the production, distribution and screening of a feature film entitled Stargate, which has been shown in theatrical release, on video and on television. The opponent also claims prior use of STARGATE in Canada through licensees for a broad range of wares.

The third ground of opposition is based on Paragraph 16(1)(b) of the Act, the opponent alleging that the applicant is not the person entitled to register the mark because the mark is confusing with the opponent's trade-mark STARGATE, an application for which was filed in Canada by the opponent's predecessor-in-title, Le Studio Canal + (U.S.), on April 26, 1994, claiming priority as of April 18, 1994. This application, s.n. 752,138, which is still pending, was filed on the basis of proposed use in association with the following wares and services:

(1)                    Halloween make-up kits, and removable tatoos; radios, tape players, walkie talkies, screen savers, audio chips, hand held, wrist, and tabletop LCD games, pre-paid telephone cards, night vision goggles, and non-animated stills for computer screens; enamel key chains, enamel pins, watches, and jewelry; bookmarks, memo boards, doorknob hangings, notebooks, address books, photograph albums, diaries, scrapbooks, sketchbooks, trading cards, plastic trading cards, posters, postcards, calendars, day planners, stickers, paint by number sets, playing cards, magazines, souvenir programs, party goods, namely, paper napkins, tablecloths, plates, coasters, placemats, cups, party hats, loot bags, invitations, paper and plastic cake decorations, thank you notes, door signs, banners, gift wrap, gift bags, plastic table cloths, removable tatoos, modeling clay and compound, and pens; sport bags, school bags, and back packs; vinyl key chains, PVC key chains, acrylic key chains, vinyl magnets, novelty buttons, photo frames, mirrors, decorative face masks, children's plastic dinnerware, plastic trading cards; mugs, flasks, drinking glasses, children's dinnerware, drinking straws, decorative boxes, collectible statues, lunchboxes, food storage containers, and candle holders; T-shirts, sweatshirts, baseball caps, hats, night shirts, night gowns, pajamas, underwear, boys underwear, collarless shirts, knit shirts, knit shorts, knit pants, and costumes; video game cartridges, cassettes, compact disc, and video output game machines, toys, namely, toy vehicles, action figures and accessories, dolls, role playing accessories for children, play environments, plush and stuffed puppets, ride on toys, jigsaw puzzles, manipulative puzzles, three dimensional puzzles, tracing plates, vinyl model kits, plastic model kits, toy weapon and target sets, sound target sets, shotgun target sets, board games, bagatelle games, bop bags, shooting arcade games, squirt guns, projectile guns, light and sound guns, card games, banks, pinball machines, interactive CD ROM children's storybooks, mechanical and electronic action toys, battery powered and electricity powered road race sets, construction sets, party favors in the nature of small toys, balloons, pinatas, and roller skates; cigarette lighters.

(2)                    Production, distribution, and screening of a feature film.

The fourth ground of opposition claims that the applicant's trade-mark is not distinctive of the services of the applicant since it does not actually distinguish the services in association with which it is used from the wares and services of the opponent referred to elsewhere in the statement of opposition and covered by application s.n. 752,138.

THE REGISTRAR'S DECISION

Material Dates

[8]                The Registrar found that the material date with respect to the two allegations of confusion was August 1995. This was the date on which the TM Applicant alleged that it first used the Subject Mark in association with its Internet Services. However, because the material date with respect to the lack of distinctiveness was the date of the filing of the opposition, the Registrar assessed the likelihood of confusion at both July 4, 1997, when the opposition was filed, and at August 1995 (together the "Material Dates").

Prior Use

[9]                Based on an affidavit made on May 26, 1998 by Michael Moore, in-house counsel for the Opponent (the "Moore Affidavit"), the Registrar found that the Movie was exhibited in Canada in October of 1994 and noted that this use of the trademark Stargate pre-dated the TM Applicant's first use of the Subject Mark in August of 1995. However, the Registrar found no other evidence of use by the Opponent prior to August 1995. As a result, the Registrar found that the Opponent had not offered sufficient evidence of prior use and dismissed this ground of opposition. In the alternative, the Registrar also found that, if there had been sufficient prior use, this ground of opposition would have failed in any event for lack of confusion for the reasons described below.

Confusion/Distinctiveness

[10]            The Registrar concluded that the businesses of the TM Applicant (Internet Services) and that of the Opponent (movie production and related activities and wares) were so different that there was no reasonable possibility of confusion.

[11]            In reaching this conclusion, the Registrar applied the test for confusion set out in Section 6(2) of the Act and canvassed the factors enumerated in Section 6(5), namely: the inherent distinctiveness of the marks and the extent to which they had become known; the length of time each had been in use; the nature of the wares, services or business; the nature of the trade; and the degree of resemblance between the trademarks in appearance or sound or the ideas they suggested. As I read the Decision, the Registrar found that the length of use, the degree of resemblance and inherent distinctiveness favoured the Opponent.

[12]            The Registrar found that the marks, which are identical, were equally inherently distinctive because Stargate, being a coined term, had no greater inherent connection to one party's wares or services than the other's. On this basis, the factor was found to favour the Opponent. The Registrar also concluded that the Subject Mark had not become known to any extent as of August 1995 but was known to some extent by July 4, 1997. The Registrar further concluded that the Opponent's mark was known as of each date, but one could not tell from the evidence to what extent it was known.

[13]            The Registrar found that the Opponent's position was strengthened by the fact that it had used the Stargate mark for almost one year before the TM Applicant's first use of the Subject Mark in August 1995. Similarly, this factor favoured the Opponent with respect to July 4, 1997 as it had used Stargate for just under three years in contrast to two years' use by the TM Applicant.

[14]            With respect to the nature of the wares and services in issue, the Registrar found that, while some of the Opponent's wares and services were used on computers (screen savers, digital photos, CD-ROM children's storybooks), these were not "particularly related" to the TM Applicant's Internet Services. This was the most important factor for the Registrar, who stated that ". . . the differences between the parties's businesses/services are so significant that confusion is not likely."

[15]            The Registrar dismissed the Opponent's concern that the TM Applicant's application was broadly worded and could encompass the delivery of entertainment services over the internet. This conclusion was based on the wording of the application, as well as the evidence about the TM Applicant's actual business.

[16]            With regard to the nature of the trades, the Registrar found that they were, in fact, distinct and concluded that the Opponent's concern that they might overlap was "quite a stretch".

[17]            The Registrar concluded that other surrounding circumstances were not relevant. First, the fact that the Opponent had used a related trademark, "Stargate SG-1", as of September 1997, was irrelevant because it occurred after the Material Dates. The Registrar found that the Applicant's evidence related to the absence of actual confusion as of December 24, 1998 was not helpful because it could be explained by the TM Applicant's geographically restricted usage. Finally, the Registrar found that the TM Applicant's use of the term "technology portal" on its website was irrelevant to the issue at hand, namely ". . . whether the use of Stargate for the Applicant's internet services is likely to cause confusion with the Opponent's Stargate movie and related wares." The Opponent had made this point because the "portal" concept figures prominently in the Movie.

[18]            Ultimately, the Registrar concluded that the businesses of the Opponent and TM Applicant were so different that confusion was unlikely.

STANDARD OF REVIEW

[19]            As there was no new evidence tendered on this appeal, the standard of review is reasonableness simpliciter according to the Federal Court of Appeal's decision in Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145.

THE OPPONENT'S SUBMISSIONS

[20]            The Opponent's submissions have been organized under the following headings:

·            The Material Dates

·            Factual Errors

·            The Test for Confusion

·            Other Surrounding Circumstances

·            Famous Marks

1.          The Material Dates

[21]            With regard to August 1995 as the date of first use, the Opponent submits that the Registrar should not have accepted TM Applicant's evidence, found in the affidavit of Bruce Hobbs dated December 24, 1998. Therein, as President of the TM Applicant, he deposed that it commenced its business in August of 1995. The Opponent suggests that, because the earliest documentary evidence is a November 1995 invoice, the Registrar should not have accepted the August 1995 date. However, since it was uncontradicted and untested on cross-examination, I have concluded that it was not unreasonable for the Registrar to have accepted Mr. Hobbs' evidence.

[22]            The Opponent also notes that there is no date restriction in Section 6(5) of the Act and submits that the rule in Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 (F.C.A.) ("Park Avenue") should govern, namely that the applicable date is not the date of first use but rather is "the date where the matter is disposed of on the evidence adduced". In response, the TM Applicant points to section 16 of the Act, which reads as follows:

[23]            The TM Applicant submits that it would be contrary to the principles of statutory interpretation to use a date other than the date of first use to assess confusion under section 16, given the section's clear direction on this point. The Court agrees and notes that, in Park Avenue, supra, the Court of Appeal was dealing with paragraph 12(1)(d) of the Act and not section 16. The relevant date for the assessment of confusion under section 16 is the date of first use (August 1995) and not, as the Opponent submitted, the date of the Registrar's adjudication of the matter.

[24]            The Opponent submits that the preferable date for assessing distinctiveness is the date of the Registrar's decision. The TM Applicant, on the other hand, submits that there is no reason to depart from standard practice, which is to use the date of application. The TM Applicant contends that this question has been decided by the Federal Court of Appeal's judgment in Molson Breweries v. Labatt, supra. In that case, however, the Court was considering subsection 12(2) rather than section 2 as a ground of opposition as is the case here.

[25]            In my view, the correct practice is to use the date of the filing of the statement of opposition (July 4, 1997) as the relevant date to assess an allegation of non-distinctiveness. As a result, the Registrar did not err in using that date. In this regard, I rely on Mr. Justice McKeown's decision in Bab Holdings Inc. v. Big Apple Ltd., 2002 FCT 72, where he stated that:

[12] I must now review the issue of the appropriate date for assessing distinctiveness. In my view, Reed J. stated the matter correctly in American Association of Retired Persons v. Canadian Association of Retired Persons (1998), 84 C.P.R. (3d) 198 (F.C.T.D.) where she stated at page 207 beginning at paragraph 20:

[20]... The material date as of which the respondent must prove distinctiveness is the date of the filing of the Statement of Opposition (January 31, 1992). There is some uncertainty in the jurisprudence concerning the appropriate date for the latter but I think the date that is generally accepted is the date of the filing of the opposition....

[21] In Clarco Communications Ltd. v. Sassy Publishers Inc. (1994), 54 C.P.R. (3d) 418 (F.C.T.D.), Mr. Justice Denault raised some doubt, however, as to whether the filing date was the correct date for the assessment of distinctiveness. He relied on the Federal Court of Appeal decision in Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 at 429-430, and suggested that the date for the assessment of distinctiveness should be the date as of which the Registrar disposes of the opposition.

[22] The Park Avenue case however dealt with the registrability of the mark, not an opposition based on lack of distinctiveness. The logic of the finding was that registrability should be decided at the date of registration or at the date of refusal or registration, and not by reference to some earlier time...

...

[24] The most recent statement on this issue is that of Madam[e] Justice Tremblay-Lamer in Molson Breweries, a Partnership v. John Labatt Ltd. (1998), 148 F.T.R. 281, 82 C.P.R. (3d) 1, [1998] F.C.J. No. 929 (QL) (T.D.). At paragraphs 50-56, she summarizes the state of the law and suggests that the material date for a determination of distinctiveness is the date the opposition was filed, and that this was not changed by the Federal Court of Appeal's reasons in Park Avenue Furniture.

[13] Since this is not an application by the applicant under subsection 12(2), the date set out in 12(2) is not the date to assess distinctiveness. Furthermore, even though the comments are obiter in some of the cases which state that it is the date of filing of the statement of opposition, I am satisfied that the law is that the relevant date is the date of the filing of the statement of opposition.

[26]            The Opponent further suggests that the Registrar is entitled to consider evidence dated after the date of filing the opposition where it is exceptional in that it explains previous evidence or is seen to be a continuation of a pre-existing situation. The Opponent says that the Registrar did this when she considered the evidence about the TM Applicant's website, dated December 1998 and the Opponent complains that it tendered similar evidence and the Registrar disregarded it without an explanation. This point will not be given further consideration because the Opponent's memorandum of fact and law does not identify the evidence it says was improperly disregarded.

2.          Alleged Factual Errors

[27]            The Opponent submits that the Registrar incorrectly stated that there was no evidence about the extent of television broadcasting and associated revenues, even though the Moore Affidavit provides this information. In my view, this submission fails because, what the Registrar actually stated, was that there was no evidence as to the extent of broadcasting and revenues as of the material date, July 4, 1997. Mr. Moore stated that broadcast and pay television sales generated approximately $300,000 and $68,000 respectively in the period from June 1997 until May 26, 1998 but there was no specific evidence about the situation at July 4, 1997.

[28]            In my view, the Registrar did not err when she concluded that this financial evidence was irrelevant to the section 16(1)(a) ground, given that the material date for that ground was August 1995. With respect to the non-distinctiveness ground, it was not clearly wrong for the Registrar to find that the Opponent's global figures for June 1997 to May 26, 1998 were not helpful in that only the first month of those figures predated July 4, 1997.

[29]            The next error alleged by the Opponent is that the Registrar failed to infer from the volume and duration of licences that "there must have been substantial sales". Although the numerous license agreements were in the evidence, all of the Opponent's licenses authorize sales in the US, Canada and, in some cases, other countries. For this reason, the Registrar was quite right to state that there was no evidence of Canadian sales. The Registrar also concluded that, based on the licenses ". . . the Opponent's mark had become known as of each material date but we cannot tell to what extent."

[30]            In my view, the Registrar did not err in coming to these conclusions. The problem with the Opponent's evidence was that it was not specific enough to enable the Registrar to determine the volume of sales in Canada as of the Material Dates.

[31]            The Opponent submits that the Registrar erred by failing to infer that there would have been "extensive public access to the [Movie] website in 1994, at the height of the initial publicity for the movie". This inference would have supported the Opponent's claim to prior use. In my view it cannot be said that the Registrar erred in failing to draw this inference. Firstly, there was no evidence about the number of "hits" on the site. Secondly, websites such as this one were a novelty in the world of movie advertising - the evidence was that this was the first movie to have a website. That being the case, it is not obvious that the site would have been used extensively.

3.          The Test for Confusion

[32]            The Opponent acknowledges that the Registrar properly stated the test for confusion but says that, having found that three of the five factors favoured the Opponent, she granted the application without giving adequate reasons. In particular, the Opponent submits that the Registrar should not have restricted her inquiry about the extent to which the marks had become known to the two Material Dates. Since I have already concluded that the Registrar was correct to so restrict the inquiry, this submission must fail. I should add that the Registrar's assessment of the five factors is not simply a numbers game. It is also a matter of weight. In this case, the Registrar clearly decided that the fact that the parties were engaged in different businesses with different wares outweighed the weaker factors which favoured the Opponent.

[33]            The Opponent submitted that the Registrar erred in ignoring the Opponent's primary concern with the prospect that the TM Applicant could in the future deliver entertainment services over the internet. However, I am not persuaded that the Registrar was clearly wrong in coming to the conclusion that the TM Applicant's statement of services could or would not be read to include rendering entertainment services over the internet.

[34]            The Opponent also says that the Registrar erred by considering evidence of actual use in considering the nature of the wares and services instead of restricting herself to the statement of wares and services of each party. In the Opponent's submission, the Registrar erroneously relied on McDonald's Corporation et al. v. Coffee Hut Stores Ltd. (1996), 68 C.P.R. (3d) 168 (F.C.A.) ("McDonald's") for the proposition that evidence of actual use is relevant to interpreting the statement of wares and services. As a result, in the Opponent's view, the Registrar erroneously relied on the TM Applicant's "bald allegation . . . as to differences in the services of the parties" and "disregard[ed] entirely the evidence of [the Opponent] as to the areas in which there is actual or potential overlap in the wares and services." However, in my view, the Opponent's interpretation of the McDonald's decision is not persuasive given that Hugessen J.A., for the Federal Court of Appeal, stated that:

[. . .] we think that the evidence of actual use, which necessarily would have been after the date of the application, was nonetheless relevant. That use showed that the promise of the application has been carried out. As Strayer J. said in McDonald's, supra:

While counsel for the opponents argued that much of the evidence concerning the nature of the applicant's business in the past was irrelevant with respect to the possibility of confusion of a proposed trade mark, I believe that that evidence was in the main relevant with respect to these two factors involving the nature of the wares, services, or business and of the trade in which the two parties are engaged. [At page 212.]                                                                                                                                                                                                                                                      [my emphasis]

Actual use was also considered in Compulife Software Inc. v. Compu Office Software Inc. 2001 FCT 559. At paragraph 26, Justice Muldoon said with reference to McDonald's ". . . In assessing the likelihood of confusion, the Court must examine how the trade-marks are used in the course of business."

4.          Other surrounding circumstances

[35]            The Opponent alleged that the Registrar erred in rejecting other surrounding circumstances that the Opponent said showed a connection between the TM Applicant's website and the Opponent's Movie. Some of these circumstances occurred after the Material Dates. Since I have found that the Registrar identified the correct Material Dates, those circumstances were properly characterized as irrelevant.

[36]            The Opponent also points to the use of the term "technology portal" on the TM Applicant's website as evidence of a connection with the Movie, where portals are a highly significant feature. This, combined with the use of the maze design in the website, creates a clear association with the Movie, in the Opponent's submission. The issue with respect to this evidence is whether the Registrar was correct in restricting herself to a consideration of only one issue, namely "whether the use of STARGATE for the applicant's internet services is likely to cause confusion with the opponent's STARGATE movie and related wares."

[37]            The Opponent's submission in this regard is supported by the affidavit evidence of Arturo Brion, sworn May 27, 1998 which shows that "technology portal" is an unusual term which has no meaning in computer or internet terminology and that it suggests a connection to the "portal" in the Movie. However, in my view the Registrar correctly identified the issue before her and, therefore, properly disregarded the evidence about the "portal" and a possible connection between the maze in the Movie credits and on the TM Applicant's website. I say this because, even if the Opponent could establish these facts, it would not be closer to showing a likelihood of confusion between the trademarks.

5.          Famous Marks

[38]            The Registrar's primary finding was that, at the Material Dates, Stargate was not a famous mark. That conclusion made it unnecessary for the Registrar to consider, in the alternative, the jurisprudence related to famous marks. Accordingly, I am not prepared to consider grounds of appeal relating to her alternative analysis. They are immaterial.

CONCLUSION

For all these reasons, an order will be made dismissing this appeal.

                "Sandra J. Simpson"          

JUDGE

             FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:      T-607-01

STYLE OF CAUSE:                           METRO-GOLDWYN-MAYER INC. v. STARGATE

CONNECTIONS INC.

PLACE OF HEARING:                     OTTAWA

DATE OF HEARING:                       AUGUST 7, 2003

REASONS FOR ORDER :              SIMPSON, J.

DATED:         AUGUST 30, 2004

APPEARANCES:

CHANTAL BERTOŠA                                    FOR THE APPLICANT

VICTORIA CARRINGTON

GENE FRASER                                               FOR THE RESPONDENT

SOLICITORS OF RECORD:

SHAPIRO, COHEN                                         FOR THE APPLICANT

OTTAWA, ON

BURKE, TOMCHENKO & FRASER             FOR THE RESPONDENT

COQUITLAM, BC