Ivy Lea Shirt Co. Ltd. v. 1227624 Ontario Ltd., 2001 FCT 253

Date: 20010327

Docket: T-1985-99

Citation: 2001 FCT 253

Halifax, Nova Scotia, this 27th day of March, 2001

PRESENT:      THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE

IN THE MATTER OF an Appeal from a Decision of the Registrar of

Trade Marks (Opposition Board) dated September 15, 1999 Refusing

Application No. 562,857 for the trade mark CHESTNUT CANOE CO

BETWEEN:

IVY LEA SHIRT CO. LTD.

Applicant

- and -

1227624 ONTARIO LIMITED

carrying on business as

THE MUSKOKA FINE WATERCRAFT AND SUPPLY COMPANY

Respondent

APPLICATION UNDER Section 56 of the

Trade Marks Act, R.S.C. 1985 c. T-13 as amended

REASONS FOR ORDER AND ORDER

O'KEEFE J.

[1]                This is an appeal by Ivy Lea Shirt Co. Ltd. (the "applicant") referred to in this decision as the "appellant", pursuant to section 56 of the Trade-marks Act, R.S.C. 1985 c. T-13 (the "Act") of a decision of the Registrar of Trade-marks dated September 15, 1999. The Registrar of Trade-marks rejected the appellant's grounds of opposition to the registration of the respondent's trade-mark application No. 562,857 for the words "CHESTNUT CANOE CO" in association with the wares "paddles for canoes, paddle racks, and decals for canoes, paddles and paddle racks".

[2]                The respondent's application was filed on May 16, 1986 and was advertised in the Trade-marks Journal on March 20, 1996.

[3]                The appellant filed a statement of opposition on May 13, 1996. The grounds of opposition were:

The opponent bases its opposition on the grounds set out in paragraphs 38(2)(a), 38(2)(d) and 12(1)(d) of the Act.

The opponent alleges that application serial No. 562,857 does not comply with section 30 of the Trade-marks Act in that the application was filed based upon use of the mark since at least as early as January 24, 1986 when in fact, the applicant has not used the subject mark as such is defined in section 4 of the Trade-marks Act in the normal course of trade continuously since that date.

The opponent alleges that the applicant's trade-mark is not distinctive in that it does not actually distinguish the wares of the applicant from the wares of others nor is it adapted so to distinguish them by reason of non-use at any material time.

[4]                The respondent filed a counter-statement on June 28, 1996.

[5]                Before the Registrar of Trade-marks, the appellant submitted as its evidence, the affidavit of Roger MacGregor and the respondent filed the affidavits of John M. Taylor , Theresa Payie and Robert David Hodgins. The appellant also filed and submitted as evidence in reply, a second affidavit of Roger MacGregor.

[6]                The appellant also submitted further evidence before me by filing the supplementary affidavit of Roger MacGregor sworn to December 8, 1999.

[7]                The respondent's application was based upon use of the trade-mark in Canada by the respondent since at least as early as January 24, 1986 in association with "paddles for canoes, paddle racks, and decals for canoes, paddles and paddle racks". The respondent disclaimed the right to the exclusive use of the word canoe apart from its trade-mark.

[8]                The respondent's predecessor in title, The Muskoka Fine Watercraft and Supply Company Limited ("Muskoka") was incorporated in September, 1985 to carry on the business of boat manufacturing and the restoration and rebuilding of boats, as well as the direct sale and mail order sale of small watercraft, paddles, paddle racks and decals.

Issues

[9]                The following issues were raised:

1.                   What standard of review should be applied in a review of the Registrar of Trade-marks decision?

2.                   Did the Registrar err in finding that the opponent had not alleged any facts which would support a non-distinctiveness ground of opposition?

3.                   Did the Registrar err in finding that the material time for considering circumstances relating to non-compliance with section 30 of the Act is the filing date of the application?

4.                   Did the Registrar err in law by not making a decision based on findings of fact rather than relying on "onus principles"?

5.                   Did the Registrar misapprehend and misapply the legal standard for "legal burden" and "evidentiary burden"?

6.                   Did the Registrar fail to correctly apply the statutory elements of Section 4 of the Trade-marks Act in determining whether or not the trade-mark was in "use"?

7.                   Did the Registrar err in law by ignoring the principles enunciated in Aerosol Fillers Inc. v. Plough (Canada) Ltd. (1979), 45 C.P.R. (2d) 194 (F.C.T.D.), affirmed (1980), 53 C.P.R. (2d) 62 (F.C.A.) and accepting bald allegations and statements of conclusion as and for evidence of use of the trade-mark?

8.                   Did the Registrar err in fact and law in finding that the affidavit of Roger MacGregor was of no relevance with regard to the Section 30 ground of opposition?

9.                   Did the Registrar err in fact and law in finding that the use of the design (or any other) trade-mark by Muskoka constituted use of the trade-mark?

10.               Did the Registrar err in fact and law in finding that the course of trade associated with the wares of Muskoka is largely seasonal in nature and that a trade-mark can be in continuous use in the normal course of trade even though such use may be primarily seasonal in nature?

11.               Are the Registrar's findings of fact patently unreasonable and not rationally supported on any objective view of the totality of the evidence?

Analysis and Decision

[10]            Issue 1

What standard of review should be applied in a review of the Registrar of Trade-marks decision?

The standard of review to be applied to decisions of the Registrar has been settled by the Federal Court of Appeal in Molson Breweries, a Partnership v. John Labatt Ltd. (2000) 5 C.P.R. (4th) 180 (F.C.A.) at page 196:

I think the approach in Benson & Hedges v. St. Regis and in McDonald's Corp. v. Silcorp 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.

Although appeals pursuant to section 56 of the Act are often referred to as a trial de novo, this description of the appeal is not completely correct as an appeal under section 56 also involves a review of the findings of the Registrar.

[11]            The appellant filed a supplementary affidavit of Roger MacGregor in the proceedings before me. It must be determined whether this new evidence is evidence "that would have materially affected the Registrar's findings of fact or the exercise of his discretion". I have reviewed the supplementary affidavit of Roger MacGregor and I have come to the conclusion the new evidence is not the type of evidence that "would have materially affected the Registrar's findings of fact or the exercise of his discretion". The supplementary affidavit is in essence a recounting of Mr. MacGregor's involvement with old wooden canoes. Because of this finding, the decision of the Registrar which is within his area of expertise, should be reviewed on a standard of reasonableness simpliciter.

[12]            Issue 2

Did the Registrar err in finding that the opponent had not alleged any facts which would support a non-distinctiveness ground of opposition?

I am of the opinion that the Registrar did not err in finding that the appellant had not alleged any facts which would support a non-distinctiveness ground of opposition. There were no facts stated by the appellant in the grounds of opposition and as well, non-use is not a factor which renders a mark non-distinctive.

[13]            Issue 3

Did the Registrar err in finding that the material time for considering circumstances relating to non-compliance with section 30 of the Act is the filing date of the application?

The Registrar was correct when he determined that the relevant time for considering circumstances relating to non-compliance with section 30 of the Act was the filing date of the application (see Georgia Pacific Corp. v. Scott Paper Ltd. (1984), 3 C.P.R. (3d) 469 (T.M.O.B.) at page 475).

[14]            Issue 4

Did the Registrar err in law by not making a decision based on findings of fact rather than relying on "onus principles"?

My reading of the Registrar's decision leads me to the conclusion that the Registrar did make findings of fact. For example, at page 5 of the decision, the Registrar states:

Mr. Taylor states in his affidavit that his company has "continuously sold paddles for canoes, paddle racks and decals for canoes, paddles and paddle racks bearing the trade mark CHESTNUT CANOE CO. since at least the date of first use claimed in this application" and that the trade-mark CHESTNUT CANOE CO. is marked on paddles for canoes and paddle racks by placing a decal prominently on the wares, a photocopy of which is annexed to the affidavit, together with a photocopy of a photograph of a CHESTNUT CANOE CO. paddle on which a decal bearing the CHESTNUT CANOE CO. trade-mark has been affixed. According to Mr. Taylor, the photograph shows the manner in which the decals have been continuously applied to paddles for canoes and paddle racks since at least as early as January 24, 1986. Further, in paragraph 18 of his affidavit, Mr. Taylor states that since at least as early as January 24, 1986, paddles for canoes, paddle racks and decals bearing the trade-mark CHESTNUT CANOE CO. have been sold steadily by the applicant. The applicant's decal bears a representation of the applicant's design trade-mark and, as indicated above, I am satisfied that the applicant's composite mark constitutes use of the word mark CHESTNUT CANOE CO. I find therefore that the Taylor affidavit shows that the applicant has used its trade-mark CHESTNUT CANOE CO. as applied to the wares covered in the present application.

Having regard to the foregoing, I have concluded that the applicant's evidence is not clearly inconsistent with its claim that it has used the trade-mark CHESTNUT CANOE CO. in Canada continuously in the normal course of trade from its claimed date of first use of at least as early as January 24, 1986 to the material date for considering the Section 30 ground [May 16, 1986]. I would also observe that the applicant's evidence points to the normal course of trade associated with its wares which appears to be largely seasonal in nature.

The Registrar did not make a decision based on "onus principles rather than findings of fact".

[15]            Issue 5

Did the Registrar misapprehend and misapply the legal standard for "legal burden" and "evidentiary burden"?

The following statement of the law relates to the evidentiary burden for an opponent contained in John Labatt Ltd. v. Molson Companies Ltd. (1990), 30 C.P.R. (3d) 293 (F.C.T.D.) at page 298:

Considering only the decision under appeal, I am unable to agree that it was wrongly made. The jurisprudence is clear that where an applicant's compliance with s. 29(b) of the Trade Marks Act is in issue there is a legal burden on the applicant to show compliance, and an evidentiary burden on the opponent to lead evidence in support of the allegations of non-compliance pleaded by him. The evidential burden is the burden of adducing sufficient evidence to persuade the trier of fact that the alleged facts are true: see Sopinka and Lederman, The Law of Evidence in Civil Cases (Toronto: Butterworths, 1974), pp. 395-401. . .

And at page 299:

The principle enunciated in Tune Masters, supra, has been followed in numerous decisions at the opposition board level: see, for example, Congoleum Corp. v. Armstrong Cork Co. (1986), 11 C.P.R. (3d) 459, 9 C.I.P.R. 294; Extraversion, Inc. v. Xibita Display Systems (1987), 15 C.P.R. (3d) 214, and Calona Wines Ltd. v. Okanagan Vineyards Ltd. (1988), 20 C.P.R. (3d) 573. While the decisions in Tune Masters and the other cases were given after the decision in the present case, and perhaps for that reason were not mentioned by appellant's counsel, they do tend to support his argument that the amount of evidence required to discharge the opponent's evidential burden should be less in cases like the present, where the relevant facts are more readily available to the applicant. I have no problem with that proposition. It is true that the registrar made no specific reference to the lighter evidential burden resting on the opponent in the present case. I am unable to conclude, however, that this lack of mention is tantamount to misdirection on the part of the registrar in the context of choosing to ignore completely the diminished evidentiary burden in respect of the s. 29(b) ground of opposition.

I am of the opinion, after a review of the Registrar's decision, that the Registrar did not misapprehend and misapply the legal standard for "legal burden" and "evidentiary burden".

[16]            Issue 6

Did the Registrar fail to correctly apply the statutory elements of Section 4 of the Trade-marks Act in determining whether or not the trade-mark was in "use"?

The definition of "use" is contained in section 2 of the Act:

Subsections 4(1) and 4(2) of the Act state:

Subsection 30(b) of the Act reads:

The appellant argues that the respondent has not shown use of its trade-mark in association with the wares. I do not agree. In order to meet the requirements of subsection 30(b) of the Act, Muskoka must have used the mark continuously with its "paddles for canoes; paddle racks; and decals for canoes, paddles and paddle racks" in the normal course of trade since as early as January 24, 1986 (date of first use) to May 16, 1986 (filing date of application). The evidence contained in the affidavit of Mr. Taylor establishes that Muskoka had continuously sold the wares bearing the trade-mark CHESTNUT CANOE CO since January 24, 1986 (see paragraphs 18 and 19), as well, it has been established that Muskoka's business is seasonal (paragraph 4 of Taylor Affidavit). It is perhaps now appropriate to deal with the appellant's argument raised in Issue 10 namely, that because Muskoka's course of trade associated with the wares is seasonal in nature, there is not continuous use of the mark as required by the law. The answer to this argument is found in Labatt Brewing Co. v. Benson & Hedges (Canada) Ltd. (1996), 67 C.P.R. (3d) 258 (F.C.T.D.) at page 262 where Madam Justice Simpson stated:

I have reached this conclusion because the Section requires an applicant to state the date of first use as the date "from which the applicant or his named predecessors in title, if any, have so used the trade-mark . . .". In addition, Form I under the Act, which is the application for registration, provides in para. 4 that the applicant is to give dates showing that the mark has been used "since" that time. Although continuous use in the normal course of trade may involve periods of non-use, as I read the Section, any non-use, outside the normal course of trade, would be sufficient to defeat an application for registration.

The evidence establishes that the Muskoka business operations are seasonal. To me this is not unusual in this line of business. I find that the evidence establishes that Muskoka sold the wares with the mark on them in the relevant time frame, in the normal course of trade for Muskoka's business. The periods of non-use in this case can be considered within the normal course of trade for its business. This is not a situation where the periods of non-use can be considered to be outside the normal course of trade so as to defeat the application for registration. Hence, continuous use has been established for the purpose of section 4 of the Act.

[17]            Issue 7

Did the Registrar err in law by ignoring the principles enunciated in Aerosol Fillers Inc. v. Plough (Canada) Ltd. (1979), 45 C.P.R. (2d) 194 (F.C.T.D.), affirmed (1980), 53 C.P.R. (2d) 62 (F.C.A.) and accepting bald allegations and statements of conclusion as and for evidence of use of the trade-mark?

The Aerosol Fillers Inc. case stands for the proposition that in an expungement proceeding alleging non-use of the trade-mark, it is not sufficient for the trade-mark holder to simply say - "I am using the registered mark in the normal course of trade with the named wares". The Court held that statements like this are conclusions of law and not evidence of use. I agree, but that is not the situation in this case. The respondent, through the affiant, John M. Taylor, provided evidence to the effect that the respondent continuously sold paddles for canoes, paddle racks and decals for canoes, paddles and paddle racks bearing the trade mark CHESTNUT CANOE CO since the date of first use listed in the application. The affiant, Taylor, also gave names of dealers who sold the wares. The Registrar made reference to these parts of the affidavit in the decision. The Registrar therefore, did not use bald allegations and statements of conclusion as and for evidence of the use of the trade-mark. This is not an Aerosol Fillers Inc. case.

[18]            Issue 8

Did the Registrar err in fact and law in finding that the affidavit of Roger MacGregor was of no relevance with regard to the Section 30 ground of opposition?

I am of the view that the Registrar did not err in finding that the affidavit of Roger MacGregor was of no relevance with regard to the section 30 ground of opposition. In Johnson (S.C.) & Son Inc. v. Espirit De Corp. and Registrar of Trade-Marks (1986), 8 F.T.R. 81 (F.C.T.D.) Cullen J. stated at page 88:

The date of filing the statement of opposition is the appropriate date when considering the issue of confusion under s. 12(1)(d) of the Trade Marks Act. I acknowledge that the Molnlycke case (supra) dealt with the date to be used when considering the state of the register but Cattenach, J., by accepting the view of Thurlow, J. (as he then was), and incidentally as he says, "at variance with a conclusion expressed by myself in Sico" (supra) gives a strong indication that the date for all purposes should be the date of filing of the opposition. This does not of course close off advancing evidence by way of affidavits after the date of filing of the opposition but any reference to matters after that date must be disregarded as irrelevant.

I would apply the same principles in this case and hold that the Registrar was correct in holding that the affidavit of Roger MacGregor was of no relevance.

[19]            Issue 9

Did the Registrar err in fact and law in finding that the use of the design (or any other) trade-mark by Muskoka constituted use of the trade-mark?

In Nightingale Interloc Ltd. v. Prodesign Ltd. (1984) 2 C.P.R. (3d) 535 (T.M.O.B.) A.M. Troicuk made the following comment at page 538:

Principle 1

Use of a mark in combination with additional material constitutes use of the mark per se as a trade mark if the public, as a matter of first impression, would perceive the mark per se as being used as a trade mark. This is a question of fact dependent upon such factors as whether the mark stands out from the additional material, for example by the use of different lettering or sizing (see e.g., Standard Coil Products (Canada) Ltd. v. Standard Radio Corp. et al. (1971), 1 C.P.R. (2d) 155 at p. 163, [1971] F.C. 106), or whether the additional material would be perceived as purely descriptive matter or as a separate trade mark or trade name: see e.g., Carling O'Keefe Ltd. v. Molson Cos. Ltd. (1982), 70 C.P.R. (2d) 279 at pp. 280-1, applying Bulova Accutron Trade Mark, [1969] R.P.C. 102 at pp. 109-10.

Principle 2

A particular trade mark will be considered as being used if the trade mark actually used is not substantially different and the deviations are not such as to deceive or injure the public in any way: Honey Dew, Ltd. v. Rudd et al., [1929] 1 D.L.R. 449, [1929] Ex. C.R. 83 at p. 89. Although most of the cases in which this principle has been applied involve the question of whether a registered trade mark has been used, it is clear that it is of broader application and is applicable for example when one is determining a date of first use for the purposes of s. 29(b) of the Act . . .

And in The Molson Companies Ltd. v. Mitches & Co. et al. (1980), 50 C.P.R. (2d) 180 (F.C.T.D.) Mahoney J. stated at page 182:

The brevity of the letter, six paragraphs on less than a page and a half, and the refreshing absence of the tortuousity that so often passes for logic in the verbalization of visual perception in such decisions, leads me to infer that the Registrar arrived at his decision on the basis of his comparison of their appearance side by side. That is the best, if not the only, way to deal with such a question.

[20]            The marks side by side with the design mark as used on the right and the word mark on the left appear below:

CHESTNUT CANOE CO

[21]            I believe that the public as matter of first impression would perceive the use of the design mark as being use of the word trade-mark. My reasons for this conclusion are that the words CHESTNUT CANOE CO on the design mark clearly stand out and give the impression that the words are being used as a trade-mark and the additional material is perceived as being purely descriptive and not as a separate trade-mark.

[22]            As well, on Principle 2, I do not believe that the mark actually used is substantially different than the word mark and the deviation would not deceive or injure the public in any way.

[23]            I therefore find that use of the design trade-mark is use of the word trade-mark.

[24]            Issue 10

Did the Registrar err in fact and law in finding that the course of trade associated with the wares of Muskoka is largely seasonal in nature and that a trade-mark can be in continuous use in the normal course of trade even though such use may be primarily seasonal in nature?

This issue has already been disposed of with Issue 6.

[25]            Issue 11

Are the Registrar's findings of fact patently unreasonable and not rationally supported on any objective view of the totality of the evidence?

Based on my conclusions on the other issues, I would find that the Registrar's findings of fact are not patently unreasonable and are rationally supported on an objective view of the totality of the evidence.

[26]            In conclusion, the decision of the Registrar of Trade-marks meets the standard of reasonableness simpliciter in all respects.

[27]            The appeal is therefore dismissed and the Registrar of Trade-marks is directed to allow application No. 562,857 under subsection 39(1) of the Act.

[28]            The respondent shall have its costs of the appeal.

ORDER

[29]            IT IS ORDERED that the appeal is dismissed and the Registrar of Trade-marks is directed to allow application No. 562,857 under subsection 39(1) of the Act.

[30]            AND IT IS ORDERED that the respondent shall have its costs of the appeal.

                                                                               "John A. O'Keefe"          

                                                                                               J.F.C.C.                     

Halifax, Nova Scotia

March 27, 2001

                         FEDERAL COURT OF CANADA

                                      TRIAL DIVISION

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                  T-1985-99

STYLE OF CAUSE:IVY LEA SHIRT CO. LTD.

- and -

1227624 ONTARIO LIMITED

carrying on business as

THE MUSKOKA FINE WATERCRAFT AND

SUPPLY COMPANY

PLACE OF HEARING:                                 TORONTO, ONTARIO

DATE OF HEARING:                                   THURSDAY, NOVEMBER 2, 2000

REASONS FOR ORDER AND ORDER OF O'KEEFE J.

DATED:                     MARCH 27, 2001

APPEARANCES:

Mr. Serge Anissimoff

FOR APPLICANT

Mr. Mark L. Robbins

FOR RESPONDENT

SOLICITORS OF RECORD:

Anissimoff & Associates

201 - 235 North Centre Road

London, Ontario

N5X 4E7

FOR APPLICANT

Bereskin & Parr

40 King Street West

P. O. Box 401

Toronto, Ontario

M5H 3Y2

FOR RESPONDENT

                   FEDERAL COURT OF CANADA

                                TRIAL DIVISION

Date: 20010327

Docket: T-1985-99

Neutral Citation: 2001 FCT 253

IN THE MATTER OF an Appeal from a Decision of the Registrar of Trade marks (Opposition Board) dated

September 15, 1999 Refusing Application No. 562,857 for the trade mark CHESTNUT CANOE CO

BETWEEN:

IVY LEA SHIRT CO. LTD.

Applicant

- and -

1227624 ONTARIO LIMITED

carrying on business as

THE MUSKOKA FINE WATERCRAFT

AND SUPPLY COMPANY

Respondent

              REASONS FOR ORDER AND ORDER