CONAGRA INC. v. MCCAIN FOODS LTD., 2001 FCT 963

Date: 20010829

Docket: T-1501-00

                                                        Neutral Citation: 2001 FCT 963

BETWEEN:

                                          CONAGRA, INC.

                                                                                                Applicant

                                                  - and -

                                  McCAIN FOODS LIMITED

                                                                                           Respondent

                        REASONS FOR ORDER AND ORDER

BLAIS J.

[1]    This is an appeal by ConAgra, Inc. (the "applicant") of a decision of the Registrar of Trade-marks through the Opposition Board (the "Registrar") dated June 14, 2000 rejecting, in part, an opposition by the applicant, against trade-mark application No. 760,649 for registration of the trade-mark HEALTHY DECISION filed by McCain Foods Limited, (the "respondent").

FACTS

[2]    On August 2, 1994, the respondent filed an application to register the trade-mark Healthy Decision based upon proposed use in Canada. On or about March 11, 1996, the applicant filed a statement of opposition to registration of the mark, following the advertisement of McCain's mark in the Trade-marks Journal.

[3]    In 1998, the respondent amended its statement of wares, whereby the proposed trade-mark was to be used in association with:

-          frozen potato produces;

-          potato specialties;

-          cheese and cheese fondu;

-          lasagna and pasta dishes;

-          seafood;

-          frozen microwavable prepared lunches;

-          frozen fruit juices and fruit beverages;

-          beverages;

-          juice bars;

-          frozen berries and fruit;

-          frozen pizza;

-          fresh entrees;

-          frozen prepared entrees;

-          pate;

-          meats and delicatessen foods.

[4]    The applicant's grounds of opposition were based on subsection 16(3) of the Trade-marks Act, R.S.C.1985, c. T-13 (the "Act"), section 30 of the Act, and non-distinctiveness.

DECISION OF THE REGISTRAR

[5]                 Before the Registrar, the applicant relied on subsection 16(3) of the Act and argued that the respondent was not entitled to registration of the trade-mark Healthy Decision because at the date of filing of the application, Healthy Decision was confusing with the applicant's trade-marks Make the Healthy Choice, Healthy Choice, and Healthy Choice & Design "applications for registration of which had been previously used and/or filed in Canada by the applicant".

[6]                 The Registrar concluded that there was no evidence of any use of the applicant's mark, Make the Healthy Choice, prior to the filing date of the respondent's application, namely August 2, 1994 and therefore, the paragraph 16(3)(a) ground of opposition failed to the extent that it relied on this trade-mark.

[7]                 The Registrar found that the evidence showed clearly that the applicant had not abandoned use of its Healthy choice trade-mark with respect to pasta sauces as of the date of advertisement of the respondent's application, namely, February 7, 1996.

[8]                 The Registrar however noted that the evidence concerning frozen dinners and entrees was less clear. While it was not clear that sales were ongoing as of February 7, 1996, the Registrar nevertheless concluded that the applicant had not abandoned its marks with respect to frozen dinners and entrees as of February 7, 1996.

[9]                 As for the paragraph 16(3)(b) grounds, the Registrar noted that the application No. 663,368 for Make the Healthy Choice was not pending as of August 2, 1994, having issued to registration on October 1, 1993. Accordingly, the paragraph 16(3)(b) ground failed to the extent that it relied on the application for Make the Healthy Choice.

[10]            Applications No. 628,993 for Healthy Choice & Design and No. 679,139 for Healthy Choice were pending as of August 2, 1994 and February 7, 1996, but were abandoned in 1999.

[11]            Application No. 679,140 for Healthy Choice & Design is still pending but currently only covers pudding and spaghetti sauces and disclaims the right to the exclusive use of the words Healthy and Choice apart from the trade-mark.

[12]            The Registrar then applied the test for confusion set forth in subsection 6(2) of the Act. The Registrar considered the likelihood of confusion between the trade-marks Healthy Choice and Healthy Decision pursuant to paragraph 16(3)(a) of the Act, for which the material date is August 2, 1994. The Registrar considered this to be the strongest of the applicant's subsection 16(3) grounds of opposition and was of the view that if it was not successful, the remaining subsection 16(3) grounds would not succeed.

[13]            The Registrar observed that neither the mark Healthy Choice nor the mark Healthy Decision had much inherent distinctiveness as both suggest that the purchaser or consumer of the wares made a choice or decision that is good for his or her health.

[14]            The Registrar found that as the application by the respondent was based on proposed use, a consideration of the length of time each mark had been used as of the filing date of the application favoured the applicant. Similarly, the extent to which each of the marks had become known necessarily favoured the applicant.

[15]            The Registrar further noted that as of August 2, 1994, the applicant had used Healthy Choice for frozen dinners, frozen entrees and pasta sauces. Some of the applicant's Healthy Choice frozen dinners and entrees consisted of lasagna and pasta. Given that the respondent's statement of wares included fresh entrees, frozen prepared entrees, lasagna and pasta dishes, and frozen microwavable prepared lunches, the Registrar was of the view that the wares of the respondent and applicant clearly overlapped.

[16]            The Registrar also noted that the parties' channels of trade overlapped as both parties sell their wares through retail grocery stores.

[17]            The Registrar found that the marks resembled each other in appearance and sound as a result of them both consisting of two words, with the first word being "healthy". As for the idea suggested, the Registrar found the resemblance between Healthy Choice and Healthy Decision considerable, the words "choice" and "decision" having overlapping meanings.

[18]            As a surrounding circumstance, the Registrar then considered the state of the Trade-mark Register. The Registrar explained that while consumers were not likely to be confused simply because two marks both started with the word Healthy, he was not convinced that the respondent's state of the Register evidence showed dilution with respect to the idea expressed by the marks in issue as of the relevant dates.

[19]            The Registrar was not satisfied that there was no reasonable likelihood of confusion between Healthy Choice frozen dinners, frozen entrees and pasta sauces and Healthy Decision fresh entrees, frozen prepared entrees, lasagna and pasta dishes, and frozen microwavable prepared lunches. The Registrar explained that this was primarily due to the resemblance between the marks in ideas suggested, the overlap in the wares and channels of trade, and the significant use of Healthy Choice prior to August 2, 1994.

[20]            Regarding the paragraph 16(3)(b) grounds of opposition, the Registrar considered the current state of the applicant's application as a further surrounding circumstance in assessing the likelihood of confusion between the trade-marks at issue.

[21]            The Registrar concluded that confusion between the respondent's mark and the marks which were the subject of applications Nos. 628,993 and 679,139 was no longer an issue. Furthermore, given that the only wares remaining in application No. 679,140 were spaghetti sauce and pudding, the Registrar found that the only wares of the respondent for which he was not satisfied that there was no reasonable likelihood of confusion under paragraph 16(3)(b) were lasagna and pasta dishes.

[22]            The next ground of opposition before the Registrar was that the respondent's application did not comply with the requirement of section 30 of the Act, "by virtue of the fact that the respondent could not be satisfied that it was entitled to use the trade-mark Healthy Decision in Canada in association with the wares described in the application given that, on the date of the filing of the application in Canada, the respondent was aware of the use by the applicant of the trade-marks Make the Heathy Choice, Healthy Choice, Healthy Choice & Design. Further, the respondent did not have and does not now have the intention of using the trade-mark Healthy Decision in association with the wares set out in application No. 760,649."

[23]            The Registrar found that there was no evidence that the respondent ever lacked the intention to use the applied for mark and that the respondent could have been satisfied that it was entitled to use its mark if it did not believe that its mark was likely to cause confusion with the applicant's marks. The Registrar did not discuss this ground further.

[24]            The last ground of opposition was that "the respondent's trade-mark was not distinctive since it did not actually distinguish nor was it adapted to distinguish the wares or services of others, including the wares and services of the applicant".

[25]            The Registrar accepted that the respondent had satisfied its evidential burden to prove the allegations of fact supporting the ground of non-distinctiveness, at least with respect to Healthy Choice pasta sauce.

[26]            The Registrar issued a split decision refusing the respondent's application pursuant to subsection 38(8) of the Act with respect to fresh entrees, frozen prepared entrees, lasagna and pasta dishes, and frozen microwavable prepared lunches and rejected the opposition of the applicant with respect to the remaining wares.

THE EVIDENCE

The applicant's evidence

Before the Registrar

The affidavit of Taketo Murata (respondent's record, vol.1, tab 4)

[27]            The applicant submitted the affidavit of Taketo Murata, the President of the Canadian distributor of the applicant's Healthy Choice products.

[28]            In his affidavit, Mr. Murata stated that :

-          the applicant first used its trade-mark Healthy Choice in Canada on June 24, 1991. At that time, the applicant's Healthy Choice frozen dinners and frozen entrees were introduced, distributed and marketed in the province of Ontario. Distribution of these products was subsequently extended to all other Canadian provinces except Quebec and Newfoundland;

-          in July, 1992, the applicant launched its Healthy Choice line of pasta sauces for retail sale in Ontario. This was followed shortly by the introduction of that product to all other Canadian provinces except Quebec and Newfoundland;

-          as of May 1995, the approximate value of the applicant's Canadian gross sales of Healthy Choice dinners, entrees, and pasta sauces was Cdn $36,000,000;

-          the trade-mark Healthy Choice is displayed on the packaging and labelling of all Healthy Choice dinners, entrees and pasta sauces sold in Canada;

-          during 1991 and 1992, when the Healthy Choice line of food products was being launched in Canada, the trade-mark was advertised in television commercials, grocery store advertising and consumer couponing;

-          as a result of the distribution of the applicant's Healthy Choice food products worldwide, the extent of its sales in Canada and the rest of the world and the size of the applicant's advertising budget, the applicant's trade-mark Healthy Choice has become well-known in Canada.

[29]            Mr. Murata was also crossed-examined on his affidavit: (respondent's record, vol.1, tab 5).

Additional Evidence filed before this Court

Affidavit of Ronald Koopman (applicant's record, tab C.)

[30]            In his affidavit, Mr. Koopman, co-owner and General Manager of Great Northern Sales Merchandising Inc. (which represents food manufacturers in Canada, with the function primarily of ensuring that their food and grocery products are being carried by Canadian grocery stores, are actually placed on the store shelves and also obtain favourable placement on the shelves vis a vis the food and grocery products of its clients' competitors) states that:

-          generally, the respondent's frozen food products with respect to which the Trade-marks Office permitted the registration of the Healthy Decision trade-mark would be sold in close proximity to, and in many cases adjacent to, frozen dinners and frozen entrees;

-          in Canada, the grocery store business can be viewed as falling into two categories: the small to medium sized stores, having square footage of up to 25,000 square feet, and larger stores, with square footage of more than 25,000 square feet. In Canada, most grocery stores are small to medium sized stores;

-          in the small to medium sized grocery stores, the frozen food section typically consists of only one aisle. In this aisle, the grocery store will offer consumers as wide a variety of frozen food products as possible. Given space constraints, therefore, these frozen food products are usually packed together tightly. In these situations, frozen food products such as frozen french fries are often placed adjacent to, or near, frozen dinners and entrees. In any event, in his experience, in such situations, frozen potato products would usually not be positioned more than thirty feet from frozen dinners and entrees. Similarly, frozen fruit juices and fruit beverages, juice bars, frozen berries and fruit, and frozen pizza, would usually not be more than thirty feet from frozen dinners and entrees;

-          in the larger stores, the frozen food section may consist of two aisles. Dairy products would be located on the outside wall of one aisle. On the other side of the aisle, i.e. the first inside cooler wall, one would typically find frozen pizzas, frozen dinners and entrees, frozen pretzel sticks, frozen pogos, frozen waffles, etc. Behind that, in the other aisle, one would typically find frozen juices and beverages and ice cream. Between the frozen pizzas and frozen dinners and entrees etc., and the frozen juice and beverages and ice cream, one would typically find frozen vegetables and frozen beverages. Accordingly, even in the larger stores, all of these frozen foods are placed in the same section of the grocery store (i.e. the frozen food section). Typically, a consumer would navigate through the entire frozen food section continuously during one shopping experience. Even in the larger stores, some of the food products which the Trade- marks Office allowed the respondent to register, such as frozen pizzas, would be place adjacent to frozen dinners and entrees. The other frozen food products at issue would also be in close proximity to frozen dinners and entrees;

-           from the point of view of marketing, frozen foods, in his view, are generally marketed to consumers as a convenient alternative to the fresh version of the same foods.

Affidavit of Eli Fellman (applicant's record, tab D.)

[31]            In his affidavit Mr. Fellman, student-at-law at the law firm, Stikeman Elliott, the solicitors for the applicant, states that:

-          he downloaded the applicant's 1999 annual report and printed it;

-          on September 11, 2000, he attended the Loblaws grocery store located at 375 Rideau Street in Ottawa, Ontario. The grocery store's frozen food section consisted of two aisles;

-          the frozen french fries were located in the inside cooler wall of the first frozen food aisle. The frozen french fries were placed immediately below the frozen dinners and entrees. Frozen pizzas were adjacent to the frozen french fries and frozen dinners and entrees, at one end of the aisle. Frozen juices were at the other end of the aisle and were placed approximately thirty feet from the frozen dinners and entrees;

-          the second frozen food aisle was located behind the inside cooler wall of the first frozen food aisle. The frozen food cooler in the second aisle contained ice cream, cream bars, juice bars, and other frozen novelty items;

-          there was also a frozen food cooler situated between the first and second frozen food aisles, which was accessed as one exits one aisle and turned to access the other aisle. This cooler contained additional frozen juices, placed two shelves below additional frozen dinners and entrees;

-          on September 11, 2000, he also attended the Loblaws grocery store located at 64 Isabella Street in Ottawa, Ontario. The grocery store's frozen food coolers were placed only along the outside wall of the dairy/frozen food section, and consisted of approximately one side of one aisle;

-          in the first frozen food cooler, frozen french fries were placed immediately below the frozen dinners and entrees. Frozen lasagnas were immediately adjacent to the frozen french fries and frozen dinners and entrees. Frozen pizza pops and pizza pockets were also immediately adjacent to the frozen lasagna;

-          the second frozen food cooler was perpendicular to the first frozen food cooler. In the second frozen food cooler, frozen vegetables were immediately above the frozen juices. Frozen fruit was immediately adjacent to the frozen juices and frozen vegetables. Frozen waffles were immediately adjacent to the frozen fruit. Ice cream and ice cream products were immediately adjacent to the frozen waffles. Frozen juice bars were immediately adjacent to the ice cream and ice cream products.

The respondent's evidence

Before the Registrar

The affidavit of John Marsalek (respondent's record, vol.1, tab 6)

[32]            In his affidavit, Mr. Marsalek, articling student employed by the respondent's agent, stated that:

-          he telephoned the following food manufacturers: U.L. Canada Inc. (Thomas J. Lipton Division); National Sea Products Ltd.; H.J. Heinz Co. of Canada Ltd.; Campbell Soup Co.; and Borden Inc.;

-          he spoke with customer service representatives at each of these companies and enquired of each whether the company makes any products with the word "Healthy" in the trade-mark. He was informed by the said customer service representatives with respect to each of the companies with the following information:

Healthy Request (Campbell Soup Co.),

Healthy Harvest (Borden Inc.),

Healthy Catch (National Sea Products),

Healthy Bake (National Sea Products) and,

Healthy Gourmet (H.J. Heinz Co.);

-          he went to the Supercentre Store in Burlington, Ontario, on Sunday, June 8, 1997 to search for the listed products and located and purchased the above products;

-          he was informed by Colleen Spring Zimmerman, Barrister and Solicitor of Fasken Campbell Godfrey, that the original of these food packages have been filed with the Canadian Trade-marks Office, on June 9, 1997;

-          he conducted research to determine the legislation governing how and when a manufacturer may use the word "healthy" on its product packaging for a food product. A summary of his findings appears at pages 3 and 4 of his affidavit.

[33]            Mr. Marsalek was crossed-examined on his affidavit: (respondent's record, vol.1, tab 7).

The affidavit of Petra J. McDonald (respondent's record, vol. II, tab 1.)

[34]            In her affidavit, Mrs. McDonald, trade-mark agent employed by Fasken Campbell Godfrey, the law firm and agent acting on behalf of the respondent, stated that:

-          on September 15, 1997, she conducted trademarkscan computer searches of the Canadian Trade-marks Office database to locate those trade-marks on the Canadian register which include the word "healthy" or derivatives of the word "health" and which were either pending or registered for those wares falling in international classes 29, 30 and 31;

-          she obtained the file histories for Make the Healthy Choice, Healthy Choice, and Healthy Choice & Design and determined the following:

          Application No. 628,993 for Healthy Choice & Design was filed on April 5, 1989 and was still pending. The respondent had until November 13, 1997 in which to file a response to the Examiner's communication dates May 13, 1997. The Examiner had advised that advertisement of application No. 628,993 was contingent upon the receipt of an amended application in which the words Healthy Choice have been disclaimed apart from the trade-mark as heretofore requested;

          Application No. 679,139 for Healthy Choice was filed on April 3, 1991 and was still pending. The Examiner had maintained her objection based on paragraph 12(1)(B) of the Act, despite an argument filed by the respondent on March 24, 1993 arguing that the trade-mark Healthy Choice is distinctive and is registrable. The respondent had been given until March 6, 1998 to respond to the April 6, 1994 office action by filing evidence to claim the benefit of section 14 of the Act;

          Application No. 679,140 for Healthy Choice & Design was filed April 3, 1991 and was still pending. The Examiner had requested a disclaimer of the words "healthy" and "choice". By letter dated March 4, 1996 the respondent requested an extension of time since it was in the process of assembling evidence in support of a claim under section 14 of the Act. The respondent had been given until March 6, 1998 to respond to the April 6, 1994 office action by filing evidence to claim the benefit of section 14 of the Act;

          Application No. 663,368 for Make the Healthy Choice issued to registration No. 417,527 on October 1, 1993. The registrant was required to disclaim the right to the exclusive use of the word "healthy" apart from the trade-mark.

The affidavit of Steven A. Yung (applicant's record, tab H.)

[35]            In his affidavit, Steven A. Yung, Vice-President Marketing of McCain Foods(Canada) stated that:

-          the respondent uses the trade-mark Healthy Decision on frozen french fried potatoes. Theses are sold through retail grocery stores to the general public;

-          the respondent has used the trade-mark Healthy Decision in Canada, continues to use this trade-mark in Canada and has not at any time abandoned the use of this trade-mark in Canada;

-          sales of frozen french fries potatoes by the respondent bearing the trade-mark Healthy Decision in fiscal year 1996 were $13,074,404, in fiscal year 1997 they were $12,255,623 and in fiscal year 1998 they were anticipated to be $18,600,909;

-          many of the respondent's competitors sell food products which include the word "healthy". Such well known companies are Societé des Produits Nestlé S.A. (Lean Cuisine and Stouffer's food products) and Campbell Soupe Company (Swanson and Weight Watchers food products).

-          over the last three years, the respondent and its subsidiary companies have spent over Cdn$60 million in advertising each year. In the 1997 fiscal year which ended June 30, 1997, the respondent spent almost Cdn$1 million covering media advertising and promoting in Canada frozen french fried potato products bearing the trade-mark Healthy Decision. In the 1998 fiscal year, it was estimated that the respondent would spend over Cdn$660,000 for advertising and promotion in Canada for products bearing the Healthy Decision trade-mark. This advertising includes television, radio and print media;

-          he was of the opinion that the trade-mark Healthy Decision, as used and to be used by the respondent in association with the list of wares set out in the advertisement for the respondent's trade-mark application Healthy Decision, which appeared in the February 7, 1996 issue of the Trade-marks journal, is distinctive, is capable of distinguishing the wares of the respondent and actually distinguishes the respondent's food products on which it is currently used;

-          he was of the opinion that the applicant was not entitled to a monopoly in the use of the word "healthy" in association with food products;

-          Healthy Choice owned by the applicant was not well-known outside of the United States. Healthy Choice was not well-known in Canada and has never been;

-          while the Healthy Choice trade-mark was allegedly first used by the applicant in June, 1991, it is virtually unknown in the Canadian market place today. The Healthy Choice frozen dinner and frozen entrees are in no major grocery stores in the country. These products would be found, if at all in Canada, in small privately operated grocery stores;

-          the market launch of the Healthy Choice food products was in 1991 and 1992. By 1993, the market launch had failed. At the height of the market launch, the Healthy Choice products may have had six to seven percent of the market share of frozen dinners and frozen entrees in Canada;

-          there has been virtually no major advertisements of the Healthy Choice products of the applicant in Canada since 1993;

-          there are no production facilities in Canada for the Healthy Choice products and in his opinion, there is no commitment by the applicant to the manufacture and sale of the products in Canada;

-          the applicant does not sell its Healthy Choice products into the food service business in Canada;

-          the applicant's market penetration in Canada for its Healthy Choice products is around zero. The applicant is not a player in the frozen dinner and entree business under the Healthy Choice mark in Canada. Any use of the trade-mark Healthy Choice in Canada would be in association with pasta sauces but is minor;

-          the applicant is spending very little time and money on the support of the Healthy Choice brand in Canada;

-          the applicant does not use and promote a family of Healthy Choice trade-marks in Canada.

[36]            Mr. Yung was cross-examined on his affidavit.

Additional Evidence filed before this Court

Affidavit of John Senders (applicant's record, tab E.)

[37]            In his affidavit, Mr. Senders, consulting scientist working largely in research and analysis of human perception and behaviour in a number of areas, states that:

-          his opinion is that the trade-mark Healthy Decision for use in association with a variety of food products is distinctly different both in formal definition and in connotation from the applicant's trade-mark Healthy Choice;

-          this conclusion stems from three sources. The first of these is the American College Dictionary. The second is the body of refereed, archival research on decision theories and processes in the scientific literature of the behavioral sciences. The third is his own assessment of the manner in which confusion arises in the minds of consumers of products;

-          based on the American College Dictionary, it is clear that the word "decision" is used to indicate a mental process. It is also clear that "choice" is used to indicate an action, the freedom to select one of an array of options, or the thing actually chosen. It is clear that the word "choice" is used to indicate an observable, as opposed to a mental, process;

-          the scientific literature, in its treatment of "decision processes" also distinguishes between overt acts, behavior that can be observed in the laboratory, and inferred underlying mental processes, whose existence is dependent completely upon the observation of a choice-either an actual selection of a thing or an equally observable statement of one of an array of things that could be said. Thus, when someone - a subject in an experiment or a purchaser in a shop - chooses one thing from the array of available choices, the observable choice is a real phenomenon. It is detectable classifiable, countable;

-          a common scientific way of analyzing the data gathered from real choices is to hypothesize a mathematical process of decision whose equations can be calculated from the statistics of choice. In common parlance people justify their choices by claiming that they "made up their mind" to act as they did. There is no substantive evidence that either the decision process or the "making up of the mind" actually existed. Their claim to existence rests only on the unsubstantiated assertions of people engaged in rationalizing the choices that were made- their own or those of others;

-          it is his view, based largely on his many years of observing and measuring confusions between pairs of trade-marks used with similar or the same lines of products, that significant confusion is unlikely to be found between the trade-marks "Healthy Choice" and "Healthy Decision";

-          it is also clear that the trade-mark Healthy Choice is clearly descriptive or deceptively misdescriptive of the character or quality of the food products (which bear that mark). The food product is the selected "thing" i.e. the choice. One must also consider whether the word Healthy is clearly descriptive or deceptively misdescriptive. It must, by the doctrine of the excluded middle, be on or the other;

-          the trade-mark Healthy Decision is neither clearly descriptive nor deceptively misdescriptive of the character or quality of the food products (which bear or are intended to bear that mark). It refers to the mental process of the buyer and not the product chosen.

APPLICANT'S POSITION

Standard of Review

[38]            The applicant submits that in this appeal, significant new evidence has been filed by the applicant. Therefore, when considering the evidence, this Court should ask itself whether the Registrar reached the wrong decision on the issue of confusion between the applicant's trade-marks and the respondent's trade-mark Healthy Decision, as it relates to the remaining wares.

Mr. Senders' affidavit is irrelevant

[39]            The applicant submits that Mr. Senders gives his opinion on matters which are not in issue in this appeal, namely that:

(i)        the trade-mark Healthy Decision for use in association with a variety of food products is distinctly different both in formal definition and in connotation from the applicant's trade-marks;

(ii)         the applicant's Healthy Choice trade-mark is either clearly descriptive or deceptively misdescriptive of the character or quality of the food products which bear the mark, while the Healthy Decision trade-mark is neither.

The Registrar erred in considering the 1999 abandonment of certain trade-mark applications by the applicant in its assessment of confusion under paragraph 16(3)(b)

[40]            The applicant contends that the Registrar erred in making his decision because it ignored the plain language of paragraph 16(3)(b), and the legislative intent to create a priority scheme based on the "first to file", in determining the registrability of competing trade-mark applications based on proposed use.

[41]            The applicant further alleges that the Registrar misinterpreted the decision in Molson Breweries, A Partnership v. Labatt Brewing Co. Ltd. (1996), 68 C.P.R. (3d) 202 (F.C.T.D.) ("Molson Breweries") as standing for the general proposition that confusion between an applied for mark and the mark which is the subject of an application abandoned after the material date is no longer an issue in an opposition under paragraph 16(3)(b).

[42]            The applicant also alleges that the Registrar should have had regard to the issue of confusion between the abandoned trade-mark applications and the trade-mark Healthy Decision since the remaining wares in the respondent's application were covered in the applicant's trade-mark applications 679,139 and 679,140 for Healthy Choice, which were valid and subsisting at the material date, i.e. August 2, 1994, and at the filing of the applicant's statement of opposition, but abandoned five years later.

There is a reasonable likelihood of confusion between the applicant's trade-marks and the trade-mark Healthy Decision (in relation to the remaining wares)

[43]            The applicant submits that the Registrar erred in finding that there was no overlap between the applicant's pasta sauces, frozen dinners and frozen entrees, and the remaining wares, and hence in finding no reasonable likelihood of confusion between the applicant's trade-marks and the respondent's trade-marks.

[44]            The applicant alleges that the Registrar erred in finding that the two trade-marks are confusing only with respect to wares that overlap directly but not with respect to other similar wares since the finding places undue emphasis on a technical and narrow classification of the different categories of food products at issue in this case.

[45]            The applicant submits that the Registrar's error in not finding confusion with respect to the remaining wares is clear. In essence, the respondent applied for a trade-mark, for use in association with various food products, that is remarkably similar to the trade-mark chosen by the application (also for use in association with various food products), and previously used and applied for by the applicant. It is clearly wrong to allow the trade-mark Healthy Decision to mature to registration when it looks and sounds almost identical to the applicant's trade-marks, connotes an identical meaning, and will be used in association with wares sold in the same grocery stores (and often immediately adjacent to each other, or, at the very least, in close proximity to each other), simply because not all of the wares are identical in nature.

The Registrar erred in finding no confusion between the trade-mark Healthy Decision and the applicant's trade-marks in relation to the remaining wares.

[46]            The evidence before the Board shows a close connection between the goods which bear the respective marks at issue in this appeal. More particularly, the evidence shows that the subject goods could very well be placed in close proximity to each other in the same sections of the same retail grocery stores. The evidence also shows that the subject goods are generally marketed in similar fashion. Yet, this evidence was disregarded by the Registrar.

[47]            The respondent's own evidence showed that it engages in cross-merchandising efforts involving, for example, discounts on combined purchases of juices and frozen french fries. Yet the Registrar's decision would characterize these as unrelated wares.

[48]            With respect to the nature of the wares, the Registrar held that if the goods sold in association with competing marks are or will be sold in different sections of a grocery store, confusion may be less likely to occur.

[49]            However, given that the applicant's frozen dinners, frozen entrees and pasta sauces, and the remaining wares are not intrinsically different, are or will be, sold in the same section or aisle of a grocery store, or in close proximity to each other, can be and often are, marketed in similar fashion, the Registrar's conclusion that there is no reasonable likelihood of confusion between the applicant's trade-marks and the respondent's trade-mark used in association with the remaining wares, was clearly wrong.

The Registrar reached the wrong decision on the issue of confusion between the applicant's trade-marks and the respondent's trade-marks, having regard to the significant new evidence filed by the applicant

[50]            In light of the significant new evidence filed by the applicant, it is submitted that the Registrar reached the wrong decision on the issue of overlap between the parties' respective goods and hence on the issue of confusion.

[51]            The evidence filed by the applicant in support of this appeal has a probative significance to the issues that were before the Registrar. The evidence clearly highlights the error in narrowly or technically construing the question of which wares overlap with the applicant's frozen dinners, frozen entrees and pasta sauces, and in rendering such overlap (or lack thereof) the controlling factor in determining confusion.

RESPONDENT'S POSITION

Mr. Koopman's affidavit is inadmissible

[52]            The respondent notes that Mr. Koopman's affidavit does not speak to anything raised in Mr. Yung's affidavit or any comments made by the Registrar in his decision. Mr. Koopman's evidence does not therefore pertain to any material issue on appeal.

[53]            Mr. Koopman offers his opinion that foods are marketed to consumers as convenient alternatives to the fresh versions of the same foods. His opinion does not refer to or rely upon statistical or other evidence.

[54]            The respondent further notes that neither the affidavit of Mr. Yung nor the Registrar's decision raise the issue of the proximity of frozen food items located in any proximity to one another.

[55]            The respondent argues that the affidavit of Mr. Koopman is inadmissible, or in the alternative, should be given little weight since it is not directed at any material aspect under appeal herein.

Mr. Fellman's affidavit is inadmissible

[56]            The respondent argues that Mr. Fellman's affidavit is inadmissible or, in the alternative should be given little weight since all the testimony is for time periods after the relevant date of August 2, 1994 and no evidence is given that would in any way relate the testimony to the required earlier period.

[57]            Further the evidence does not relate to any matter raised in the respondent's evidence or any statements relating to the Registrar's decision. The evidence is not directed at any material aspect under appeal herein.

[58]            Mr. Fellman speaks to certain observations of grocery stores and placement of frozen food. He also introduces as evidence the 1999 Annual Report of the applicant. This evidence is irrelevant as it relates to the applicant's information and statistics subsequent to the material date, namely four years after August 2, 1994. It is submitted that this evidence should be ignored.

[59]            Based on the additional affidavits filed on appeal by the applicant, the respondent is of the view that no evidence has been filed to change the basis upon which the Registrar rendered his decision. The new evidence filed on behalf of the applicant does not speak to the specific point raised by Mr. Yung and mentioned by the Registrar, namely that frozen french fried potatoes wares are not sold in close proximity to pasta sauces. Furthermore, this was a minor point in the Registrar's Decision. It is submitted that the applicant has failed to demonstrate that there is any basis for overturning the Registrar's decision based on any new evidence before this Court.

Affidavit of Mr. Senders

[60]            The applicant submits that Mr. Senders' opinion evidence is irrelevant as it pertains to issues which are not at issue in this appeal. The respondent contends that the applicant's view of Mr. Senders' evidence as well as the issue at appeal is excessively narrow.

[61]            The affidavit of Mr. Senders relates to the concept of confusion as a whole and not merely the narrow issues pertaining to section 6(5)(e) - resemblance of the marks. The respondent submits that considerations of formal definition and connotation of the respective marks and the difference therein are clearly relevant to the determination of confusion, particularly since Mr. Senders' opinions relate to confusion and that issue to the relevant period, namely August 2, 1994. Mr. Senders' opinion as to the applicant's mark being clearly descriptive and/or deceptively descriptive and the respondent's mark not being so is also relevant as this goes directly to the inherent distinctiveness of the marks at issue, at the relevant date.

[62]            The respondent notes that the applicant commented on Mr. Senders' statement that there would be "significant confusion" between the trade-marks. While Mr. Senders relies upon various sources in support of his opinion, he states his opinions regarding confusion are as to what an ordinary consumer would do or perceive. Mr. Senders also clarifies the meaning of his use of the word "significant" in the context of his opinion regarding confusion, namely "confusion at a level high enough that a court might take notice". Mr. Senders essentially states that the marks at issue are not confusion enough to take to issue before the Court, i.e. there is no likelihood of confusion.

[63]            As for Mr. Senders' opinions with respect to the clearly descriptiveness and deceptively misdescriptiveness of the marks at issue, these were based upon appropriate critical analysis. Furthermore, the applicant has admitted the descriptiveness of its marks and has disclaimed each of the words Healthy and Choice. In that respect, the applicant is in agreement with Mr. Senders' opinion.

Standard of review

[64]            The respondent submits that given, in particular, the expertise of the Registrar on the question of confusion, the reasons for vesting decision-making in the Registrar, and the rights at stake, "unreasonableness simpliciter", is the most appropriate of the three standards of review currently available.

[65]            As for the impact on the standard of review on the filing of additional evidence on an issue at the appeal, the respondent alleges that there is no new evidence filed by the applicant in the context of this appeal that would justify this Court's intervention and the reversal of the Registrar's decision.

Scope of affidavit evidence

[66]            The respondent maintains that it has been held by this Court that while the Court on appeal is not limited in its right to hear new evidence, such new evidence must be in relation only to facts material to the same issues that were before the Registrar.

[67]            Where entitlement to registration is to be determined on the basis of the facts on the date of filing of the application, evidence of subsequent events may be considered to establish the weight to be given to evidence of the facts at the date of filing. Where affidavit evidence speaks to evidence at the present time, and does not provide an indication of facts in existence before or at the date of filing of the application, the affidavit evidence must be refused or held to be of no relevance.

Mr. Senders' opinion evidence

[68]            The respondent submits that Mr. Senders provides expert testimony in the context of these proceedings, which testimony is admissible as the subject-matter of the opinion calls for special knowledge in relation to the field of human perception.

[69]            Although the Court is not bound by the expert witnesses' conclusions, the evidence is admissible and the relevance is then assessed by the Court in coming to its own conclusion.

[70]            It follows that the opinion of Mr. Senders should be given weight as to the likelihood of confusion with respect to the marks. In addition, Mr. Senders has provided evidence which is relevant to the issues and which is clearly admissible.

Likelihood of confusion

Paragraph 6(5)(a) - Inherent distinctiveness of the respective trade-marks

[71]            The respondent is of the view that, when considered in their entirety, the trade-marks are not confusing.

[72]            Very common words such as "Healthy" have a low level of inherent distinctiveness, particularly where they are descriptive of the wares used in association with the marks and will only be entitled to a low level of protection. Moreover, no one can appropriate or monopolize a common word of the English or French language.

[73]            Where a party chooses to use a suggestive non-distinctive name, regardless of any acquired distinctiveness, it must accept a certain amount of confusion without sanction.

Paragraph 6(5)(b)- Length of time the trade-marks have been in use

[74]            The fact that the applicant's Healthy Choice mark had been in use is not a basis for assuming that the mark is more distinctive (than it is actually capable of), particularly where the common word is descriptive of many food products. Where the evidence shows that other parties are also using the common element between two marks in association with the same wares and in the same channels of trade, neither party is entitled to a monopoly in respect of the common word.

Paragraph 6(5)(c)- Nature of the wares

[75]            The nature of the wares allowed in association with the respective marks are different, particularly since the respondent was not allowed to register the mark in association with frozen prepared entrees, lasagna, pasta dishes and frozen prepared lunches. Further, where a person adopts a word in common use and seeks to prevent competitors from doing the same, the trade-marks will have less inherent distinctiveness and the range of protection granted by the Court will be limited.

Paragraph 6(5)(d)- Nature of the trade

[76]            The Registrar determined that there was overlap in the channels of trade, but that the respondent's food products would not be sold in close proximity to pasta sauces. The Registrar limited the wares with which the respondent could register its mark, and was satisfied that this would avoid any reasonable likelihood of confusion.

Paragraph 6(5)(e)- Degree of resemblance between the trade-marks in appearance, sound or ideas suggested by them

[77]            The split decision of the Registrar in this instance is entirely consistent with other decision emanating from the Trade-marks Opposition Board where marks using common words in association with similar products have been permitted to proceed to registration but only in respect of those products that differ, despite the fact they will be sold through similar types of retail outlets such as grocery stores and supermarkets.

Additional surrounding circumstances

[78]            The paragraphs of subsection 6(5) of the Act are not meant to circumscribe the limits of these surrounding circumstances but more to focus the mind of the decision-maker on the more specific fields of inquiry which he or she must necessarily address.

[79]            The opening words of subsection 6(5) speak of "all the surrounding circumstances". It is in regard to those circumstances which are not didactically enumerated in subsection 6(5) that the Court in Clorox held merited additional findings which were not specifically analyzed in the impugned decision, and which were determinative of the case. These determinative aspects included the fact that the mark was a common word deserving of limited protection and that the user could not be allowed to unfairly monopolize the word.

[80]            There is no evidence before this Court of any instances of actual confusion. This entitles the Court to draw negative conclusions about the allegations of likelihood of confusion where there has been a substantial period of co-existence in the marketplace and no instances of actual confusion have been established.

[81]            According to the respondent, the applicant has not established its alleged use of a "family" of marks entitling it to a greater ambit of protection. The mere existence of a group of marks having a common feature owned by one party does not give rise to the presumption that there exists a series or family of marks. Furthermore, the existence of marks having the same common word for the same or similar wares prevents a trader from asserting a monopoly in respect of that word for such wares.

Abandonment of applications and restrictions of wares

[82]            The respondent submits that it was open to the Registrar to consider the abandonment of trade-mark applications and the restriction of wares in the third trade-mark application relied upon by the applicant in the opposition proceedings subsequent to the date of application.

ISSUES

[83]            1-        Did the Registrar err in considering the 1999 abandonment of certain trade-mark applications by the applicant in his assessment of confusion under paragraph 16(3)(b)?

2-        If the answer to question 1 is yes, is the trade-mark Healthy Decision confusing with the applicant's abandoned trade-mark applications?

3-          Regarding the aspect of the Registrar's decision pertaining to the applicant's paragraph 16(3)(a) ground of opposition:

(a)       Did the Registrar err in finding that there was no overlap between the pasta sauces, frozen dinners and frozen entrees sold by the applicant and the remaining wares, and thus err in finding no confusion between the trade-marks with respect to those wares?

(c)       Did the Register reach the wrong decision on the issue of the reasonable likelihood of confusion between the applicant's trade-marks and the trade-mark Healthy Decision (in relation to the remaining wares), in light of he new evidence filed by the applicant in this appeal?

ANALYSIS

1- Did the Registrar err in considering the 1999 abandonment of certain trade-mark applications by the applicant in his assessment of confusion under paragraph 16(3)(b)?

[84]            The Act states:

[85]            On the issue of confusion, the Registrar applied the test for confusion

set forth in subsection 6(2) of the Act, which provides:

[86]            The Registrar also considered all the surrounding circumstances, including those specifically set out in subsection 6(5) of the Act. Subsection 6(5) of the Act states:

[87]            Regarding the applicant's ground of opposition under paragraph 16(3)(b) of the Act, the Registrar found that the evidence showed clearly that the applicant had not abandoned use of its Healthy Choice trade-mark with respect to pasta sauces as of the date of advertisement of the respondent's application, namely, February 7, 1996.

[88]            The Registrar however noted that the evidence concerning frozen dinners and entrees was less clear but concluded that the applicant had not abandoned its marks with respect to frozen dinners and entrees as of February 7, 1996.

[89]            The Registrar noted that applications No. 628,993 for Healthy Choice & Design and No. 679,139 for Healthy Choice were pending as of August 2, 1994 and February 7, 1996, but were abandoned in 1999.

[90]            As for application No. 679,140 for Healthy Choice & Design, the Registrar observed it was still pending but currently only covers pudding and spaghetti sauce and disclaims the right to the exclusive use of the words Healthy and Choice apart from the trade-mark.

[91]            After analysing the surrounding circumstances specifically set out in subsection 6(5) of the Act, the Registrar then considered the current state of the applicant's application as a further surrounding circumstance in assessing the likelihood of confusion between the trade-marks at issue. The Registrar relied on the decision in Molson Breweries, in determining that it was appropriate to consider the current state of the applicant's applications as a further surrounding circumstance in assessing the likelihood of confusion between the trade-marks.

[92]            The Registrar concluded that confusion between the respondent's mark and the marks which were the subject of applications Nos. 628,993 and 679,139 was no longer an issue. Furthermore, given that the only wares remaining in application No. 679,140 were spaghetti sauce and pudding, the Registrar found that the only wares of the respondent for which he was not satisfied that there was no reasonable likelihood of confusion under paragraph 16(3)(b) were lasagna and pasta dishes.

[93]            The applicant contends that the Registrar erred in making his decision because it ignored the plain language of paragraph 16(3)(b), which refers to the date of filing of the application, and the legislative intent to create a priority scheme based on the "first to file", in determining the registrability of competing trade-mark applications based on proposed use.

[94]            The applicant further submits that the Act does not require that an opponent's prior pending application be in good standing at the time of the Registrar's decision.

[95]            The applicant relies on the decision of the Registrar in Demerino v. The Liv Group Inc. Trading as the Panhandler Shoppes (1984), 4 C.P.R. (3d) 400 (T.M.O.B.). In that case, the applicant filed, on April 16, 1980, an application to register the trade-mark Rafters based upon proposed use. The opponent filed a statement of opposition alleging that the trade-mark was confusing with the trade-mark in respect of which an application for registration had been previously filed by the opponent. The Registrar stated:

In so far as the opponent's ground of opposition is based upon the previous filing of application No. 442,681, the opponent must satisfy s. 16(4) of the Trade Marks Act, R.S.C. 1970, c.T-10, which requires its application to have been pending at the date of advertisement of the applicant's application, i.e., December 3, 1980. Although the opponent's application No. 442,681 was deemed abandoned on November 18, 1982, it was clearly pending as of December 3, 1980, and I therefore consider the requirements of s. 16(4) to have been met.

[96]            The applicant further alleges that the Registrar misinterpreted the decision in Molson Breweries, supra as standing for the general proposition that confusion between an applied for mark and the mark which is the subject of an application abandoned after the material date is no longer an issue in an opposition under paragraph 16(3)(b).

[97]            In Molson Breweries, Molson's predecessor-in-title filed an application for the trade-mark Club on April 25, 1968. Registration for this trade-mark was obtained by Molson on January 31, 1969.

[98]            On July16, 1968, Molson predecessor-in-title filed an application for the Club Ale & Design trade-mark. Molson obtained registration of this mark on January 7, 1994.

[99]            On December 15, 1971, Labatt's predecessor-in-titled, filed an application for registration of the trade-mark Manitoba's Club & Design. On January 2, 1985, that trade-mark was advertised. On January 14, 1985, Molson filed a statement of opposition with the registrar on the basis that the trade-mark was confusing with several of Molson's trade-marks, including Club Ale & Design. On November 5, 1987, Labatt's application for this trade-mark was withdrawn without prejudice. On November 30, 1987, the Trade-marks Office declared this application to be abandoned.

[100]        On November 17, 1975, Molson filed an application for registration of the trade-mark Molson Club Ale & Design. On January 30, 1985, this application was advertised. On October 15, 1985, Labatt filed a statement of opposition. Finally on January 31, 1995, the Registrar decided in favour of Labatt and refused to register the trade-mark.

[101]        In its statement of opposition filed on October 15, 1985, Labatt opposed the registration of the trade-mark Molson Club Ale & Design because, among other grounds, as of the applicant's filing date, the applied for trade-mark was confusing with the trade-mark Manitoba's Club & Design, for which an application had been previously filed on December 15, 1971.

[102]        On that ground, the Registrar found that Molson had failed to satisfy the onus on it to show that its applied for mark was not confusing with Labatt's applied for mark, Manitoba's Club & Design. The Registrar found in favour of Labatt in respect of this ground.

[103]        Regarding this ground, Heald J. was of the view that Molson's applied for mark Molson Club Ale & Design was simply an updated version of its earlier registered trade-mark Club Ale & Design.

[104]        Heald J. stated:

In my view, Molson being precluded from registering an updated version of its registered trade-mark CLUB ALE & Design, by Labatt's applied for mark, MANITOBA'S CLUB & Design, is somewhat anomalous. The reasons being that Molson opposed Labatt's application for MANITOBA'S CLUB & DESIGN, on the basis it was confusing with Molson's trade-mark CLUB ALE & Design. Furthermore, Labatt's application never matured to registration and was abandoned nearly ten years ago. The Registrar was sympathetic to the plight of Molson, however he felt constrained by the wording of paragraph 16(3)(b) of the Act. This provision reads as follows:

16. (3) Any applicant who has filed an application in accordance with section 30 for registration of a proposed trade mark that is registrable is entitled, subject to sections 38 and 40, to secure its registration in respect of the wares or services specified in the application, unless at the date of filing of the application it was confusing with

                                ...

(b) a trade mark in respect of which an application for registration had been previously filed in Canada by any other person;or [emphasis added]

Thus, pursuant to paragraph 16(3)(b), the date Molson filed its application (November 17, 1975) is the material date to determine its confusion with trade marks for which applications for registration have been filed. On November 17, 1975, Labatt's application for the trade mark MANITOBA'S CLUB & Design was pending, as it had been filed on December 15, 1971 and was not abandoned until November 30, 1987. Accordingly, the Registrar made a determination as to the likelihood of confusion between the two trade marks, even though by the time he made his decision in January of 1995, Labatt's application had been long since abandoned.

Labatt's application for the mark had been opposed by Molson, on the basis it was confusing with Molson's registered trade mark CLUB ALE & Design. The validity of this ground of opposition was never determined, as Labatt withdrew its application. However, to illustrate the anomaly created by subsection 16(3) above, I shall assume for a moment that Molson's opposition was successful, and that Labatt had been unable to register MANITOBA'S CLUB & Design, due to confusion with Molson's mark. Even if this had been the outcome of Labatt's application, in my view the Registrar in this case would not have decided any differently, as he only had regard to the date of Molson's application, being November 17, 1975. Thus, Molson's updated trade mark MOLSON CLUB ALE & Design could conceivably have been precluded from registration due to confusion with an applied for mark, MANITOBA'S CLUB & Design, which never matured to registration due to its confusion with Molson's previously registered trade mark.

I have only discussed this scenario, which in fact never materialized, to illustrate the absurdity of a result which could be reached pursuant to subsection 16(3) of the Act. Nevertheless, the Registrar was quite correct in stating that there is "nothing in the Act precluding the opponent from relying on its application".

However, in making a determination pursuant to paragraph 16(3)(b), as to the likelihood of confusion between two trade marks, the provisions of section 6 of the Act must be taken into consideration. This section reads in part as follows:

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.

                                ...

(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. [emphasis added]

It is well established law that in determining whether trade marks are confusing, the court may take into consideration not only the five factors listed in paragraphs (a) through (e) above, but shall have regard to all surrounding circumstances.

[...]

The third surrounding circumstance put forth by Molson is the abandonment by Labatt of its application for registration of the trade mark MANITOBA'S CLUB & Design. The difficulty encountered by Molson with respect to this submission, is that Molson is asking the Court to consider a surrounding circumstance that arose following the material date set out in subsection 16(3), being the date of the application. In my view, the circumstance of Labatt having abandoned its trade mark application, although it arose after the material date, is intrinsically connected to a circumstance which existed at the material date. In view of this inherent connection and the anomalous circumstances of this case, I find this is an appropriate case to take into consideration the fact that Labatt's application for registration of MANITOBA'S CLUB & Design was abandoned. Accordingly, having taken into consideration this surrounding circumstance, I need not proceed further to consider the factors listed in paragraphs (a) through (e), as I am satisfied that confusion between the trade marks is no longer an issue.

Based on the foregoing reasons, I am of the view that Molson's trade mark MOLSON CLUB ALE & Design is not precluded from registration on the basis of paragraph 16(3)(b) of the Act, and accordingly this ground of opposition must fail.

[105]        The applicant in the case at bar, submits that the anomalous circumstances of the Molson Breweries case are not present on the facts in this appeal. The applicant is the senior applicant and trademark user. The respondent application was filed subsequent to that of the applicant. The rights of a trader having prior use of a trademark (or a prior application) are paramount, and the junior user or applicant must give way to the senior. It cannot be argued that the respondent is being deprived of a registration to which it would be entitled, due to an anomalous "technicality".

[106]        The applicant further submits that absurd consequences result from treating the Molson Breweries decision as a precedent that is generally applicable. To illustrate, following Molson Breweries means that the rights of a party may be different, depending upon the length of the examination/opposition process. For example, the respondent's application was filed on August 2, 1994. As of that date, given the findings of the Registrar with respect to confusion, the respondent was not entitled to registration of the trade-mark Healthy Decision because it was confusing with the previously filed applications for the applicant's trade-marks. Had the examination and opposition process for the respondent's application taken one year, two years, three years, four years or even five years (instead of almost six), the respondent's application would have been refused, because it was confusing, as at the material date, with the previously filed applications for the applicant's trade-marks, which applications had not yet been abandoned.

[107]        For public policy reasons, the equities of a situation should not change merely because of the length of an opposition process. The Act provides a statutorily mandated material date that should be respected.

[108]        According to the applicant, another anomalous result of the reasoning of the Court in Molson Breweries (and the reasoning of the Registrar in the case at bar) is that it prejudices the rights of third parties in a manner that is entirely unwarranted. The decision of the Registrar effectively allows the respondent to rehabilitate an application for a trade-mark to which it was not entitled in the first place. Thus, the respondent can cite a filing date of 1994 against any and all third parties, even though at the date of filing, the respondent's application was not entitled to registration. This is contrary to the public interest, as it allows the respondent to "jump the queue".

[109]        To be fair to all applicants (and not just the two parties in an opposition), and in accordance with the priority system which Parliament has chosen, the words of the Act must be respected.

[110]        There is a public interest in ensuring the integrity and accuracy of the registration system. In determining whether a mark should be registered, it is the interest of the public (as well as the interest of the other traders) that must be considered. In other words, after the abandonment of the applicant's trade-marks, and after the refusal of the respondent's application in its entirety, the field should be open to all persons to file new applications.

[111]        The applicant relies on the decision of the Federal Court of Appeal in Unitel International Inc. v. Canada(Registrar of Trade-marks), [2000] F.C.J. No. 1652 (F.C.A.) in support of his contention. In Unitel, the issue was whether the Registrar had erred in refusing the applicant's trade-mark application for Unitel because it was confusing with a prior application filed by Canadian Pacific Telecommunications Inc. for the Unitel Trade-mark. The Federal Court of Appeal held:

Here, the trade-mark in question is "UNITEL" and the appellant concedes there is confusion between its trade-mark and that of Canadian Pacific Telecommunications Inc. (CP). The application by CP to register its trade-mark preceded the appellant's application and was, therefore, pending when the appellant's application was filed. In the circumstances, the Registrar was obliged to refuse the appellant's trade-mark application under paragraph 37(1)(c).

The Court has been advised that in opposition proceedings in respect of the CP application, the Registrar refused registration of CP's UNITEL trade-mark. The appellant will not be prejudiced by reason of its original application having been refused. The registrability of CP's UNITEL trade-mark has been adjudicated and the appellant was successful in those proceedings. The appellant may now re-file its UNITEL application.

In their reasons, the Registrar and the Trial Judge referred to the alleged dates of first use in the two applications. We would observe that the dates of first use are not a relevant consideration under paragraph 37(1)(c). The only issue is whether there is confusion between an applicant's trade-mark and a trade-mark for which an application for registration is already pending.

The appellant seems to be concerned that the procedure under paragraph 37(1)(c) leads to delay and a multiplicity of proceedings. If this is so, the remedy lies with Parliament and not the Court.

[112]        The applicant submits that it would be wrong in law and policy to apply the exception that Heald J. made in the Molson Breweries case to all oppositions.

[113]        The respondent notes that the Registrar does have the discretion, in view of the public interest to maintain the purity of the Register, to check the Register in order to confirm the existence of registrations relied upon by the applicant in support of its paragraph 12(1)(d) ground. Likewise, having regard to the potential public interest in assessing paragraphs 16(1)(b), 16(2)(b) or 16(3)(b) ground, the Registrar will exercise his discretion to check the Trade-marks Office record to confirm the existence of pending application or pending applications being relied upon in support of such a ground.

[114]        I agree with the applicant that the plain language of paragraph 16(3)(b) refers to the date of filing of the application and seems to determine the issue.

[115]        Furthermore, I agree that the Molson Breweries case presented anomalous circumstances. However, Heald J.'s conclusion that, although the surrounding circumstance (abandonment of application) arose after the material date, it was intrinsically connected to a circumstance which existed at the material date, might still be argued to be applicable.

[116]        Nevertheless, had the intention of the legislator been that the abandonment of the application be considered at the time of the decision, it would have stated so. Currently, the Act refers to surrounding circumstances at the date of filling of the application. It is difficult for me to see how I could conclude that surrounding circumstances should include circumstances at the time of the Registrar's decision, in light of the Act as well as the Unitel case. Therefore, I am of the view that the Registrar erred in considering the 1999 abandonment of certain trade-mark applications by the applicant in his assessment of confusion under paragraph 16(3)(b).

2- If the answer to question 1 is yes, is the trade-mark Healthy Decision confusing with the applicant's abandoned trade-mark applications?

[117]        The applicant alleges that the remaining wares in the respondent's application were covered (and there are many specific products which are duplicated exactly) in the applicant's trade-mark applications Nos. 679,139 and 679,140 for Healthy Choice, which were valid and subsisting at the material date, i.e. August 2, 1994, and at the filing of the applicant's statement of opposition, but abandoned five years later.

[118]        Given that the evidence before the Registrar establishes that the wares associated with the trade-mark Healthy Decision and the wares associated with the abandoned applicant's trade-marks overlap, and given the Registrar's findings in favour of the applicant on all other subsection 6(5) factors, it is submitted that the respondent's application should be refused in its entirety.

[119]        Since the Registrar did not decide the issue of confusion regarding the abandoned trade-mark applications, I will analyze this question. It has to be noted however, that my analysis will only relate to the remaining wares as the Registrar's conclusion regarding the other wares was not appealed.

[120]        In Prologic Systems Ltd. v. Prologic Corp. (1998), 78 C.P.R. (3d) 435 (F.C.T.D.), an expungement proceeding, Lutfy J. stated that actual confusion is not necessary when determining the likelihood of confusion:

The applicant, however, need not necessarily establish actual confusion. The applicant must show the likelihood of confusion if the simultaneous use of its trade name and the respondent's trade mark in the same geographic area or market place would be likely to lead to the inference that their respective services were supplied by the same person. This test was set out by the Court of Appeal in the Oshawa Holdings Ltd. case:

In discussing said s. 6, Dr. Fox states in Canadian Law of Trade Marks and Unfair Competition, 3^rd ed. (1972) at p 150:

"The question to be asked is whether the use of a trade mark in the same area in which another trade mark or trade name is used would be likely to lead people to think that the wares or services associated with the two trade marks or associated with the business carried on under the trade name are the wares or services of the same person even though those wares or services may not be of the same general class."

I agree that the question above posed by Dr Fox properly describes the essential elements of the statutory tests set out in s. 6. It is not necessary in my view for there to be actual use of the conflicting marks in the same area, nor for there to be evidence of actual confusion. The test of s-ss. (2) and (3) of s. 6 is not what has happened in fact but what inference would likely be drawn if the appellant and respondent did use the conflicting marks and trade names in respect of the different classes of goods in the same area.

It has also been said that the test is confusion from the point of view of the ultimate consumer, "the average person endowed with average intelligence acting with ordinary caution". Where two trade marks are the same word with the only difference being the addition of a design with one of the marks, the design itself will not necessarily eliminate the likelihood of confusion. The Court should place itself in the position of a consumer who has only a general and not a precise recollection of the earlier mark and then sees the later mark by itself.

[footnotes omitted]

[121]        In determining whether there is a likelihood of confusion, the Court will also take into consideration the factors set out in subsection 6(5) of the Act, which states the following:

[122]        As to the weight to be given to each factor, the Federal Court of Appeal in Pink Panther Beauty Corp. v. United Artists Corp., [1998] 3 F.C. 534 (C.A.), stated the following:

Where the surrounding circumstances are also important is in determining how much weight each of the enumerated factors should be given. In Polysar Ltd. v. Gesco Distributing Ltd., Joyal J. considered the question of the flexibility given to the Court or the Registrar in assessing the significance of each factor listed under subsection 6(5). He stated:

Of particular relevance to the criteria outlined in s-s. 6(5) of the statute is the principle that they need not be interpreted as having equal weight. Each particular case of confusion might justify greater significance being given to one criteria than to others.

Thus, in each particular set of circumstances, the Court or Registrar must be aware that the significance of these factors must be gauged anew.

[footnotes omitted]

[123]        Regarding the inherent distinctiveness of the trade-marks and the extent to which they have become known, the Federal Court of Appeal in Pink Panther Beauty Corp., supra, explained as follows:

The first item listed under subsection 6(5) is the strength of the mark. This is broken down into two considerations: the inherent distinctiveness of the mark, and the acquired distinctiveness of the mark. Marks are inherently distinctive when nothing about them refers the consumer to a multitude of sources. Where a mark may refer to many things or, as noted earlier, is only descriptive of the wares or of their geographic origin, less protection will be afforded the mark. Conversely, where the mark is a unique or invented name, such that it could refer to only one thing, it will be extended a greater scope of protection.

Where a mark does not have inherent distinctiveness it may still acquire distinctiveness through continual use in the marketplace. To establish this acquired distinctiveness, it must be shown that the mark has become known to consumers as originating from one particular source.

[124]        The Registrar had concluded that neither the mark Healthy Choice nor the mark Healthy Decision has inherent distinctiveness as both suggest that the purchaser or consumer of the wares has made a choice or decision that is good for his or her health.

[125]        The respondent submitted an affidavit of Mr. John Senders, a consulting scientist working in research and analysis of human perception and behaviour in a number of areas.

[126]        Mr. Senders is of the opinion that the trade-mark Healthy Decision for use in association with a variety of food products is distinctly different both in formal definition and in connotation from the applicant's trade-mark Healthy Choice.

[127]        Mr. Senders states that based on the American College Dictionary, it is clear that the word "decision" is used to indicate a mental process. It is also clear that "choice" is used to indicate an action, the freedom to select one of an array of options, or the thing actually chosen. It is clear that the word "choice" is used to indicate an observable, as opposed to a mental, process.

[128]        The scientific literature, in its treatment of "decision processes" also distinguishes between overt acts, behaviour that can be observed in the laboratory, and inferred underlying mental processes, whose existence is dependent completely upon the observation of a choice - either an actual selection of a thing or an equally observable statement of one of an array of things that could be said. Thus, when someone - a subject in an experiment or a purchaser in a shop - chooses one thing from the array of available choices, the observable choice is a real phenomenon. It is detectable, classifiable, countable.

[129]        Mr. Senders indicates that a common scientific way of analysing the data gathered from real choices is to hypothesize a mathematical process of decision whose equations can be calculated from the statistics of choice. In common parlance people justify their choices by claiming that they "made up their mind" to act as they did. There is no substantive evidence that either the decision process or the "making up of the mind" actually existed. Their claim to existence rests only on the unsubstantiated assertions of people engaged in rationalizing the choices that were made - their own or those of others.

[130]        It is Mr. Senders' view, that the trade-mark Healthy Choice is clearly descriptive or deceptively misdescriptive of the character or quality of the food products (which bear that mark). The food product is the selected "thing" i.e. the choice. One must also consider whether the word Healthy is clearly descriptive or deceptively misdescriptive. It must, by the doctrine of the excluded middle, be one or the other.

[131]        Mr. Senders', in his affidavit, concluded that the trade-mark Healthy Decision is neither clearly descriptive nor deceptively misdescriptive of the character or quality of the food products (which bear or are intended to bear that mark). It refers to the mental process of the buyer and not the product chosen.

[132]        The applicant submits that Mr. Senders gives his opinion on matters which are not in issue in this appeal.

[133]        According to the applicant, Mr. Senders admitted on cross-examination that his opinion of the alleged differences in formal definition and connotation between the marks at issue was meant to address the Registrar's conclusions with respect to the consideration of paragraph 6(5)(e) of the Act. However, these conclusions have not been appealed by either party. What is at issue is the Registrar's findings on the confusion between the marks in respect of the remaining wares. On this issue, Mr. Senders acknowledged that he did not have regard, in preparing his affidavit, to any subsection 6(5) factor other than paragraph 6(5)(e).

[134]        Moreover, the descriptiveness of the trade-mark Healthy Decision or the applicant's trade-mark is not an issue in this appeal.

[135]        In the alternative, the applicant submits that Mr. Senders' affidavit should be given little (if any) weight because:

(a)       Mr. Senders failed to use any of the relevant methods commonly used to measure confusion between competing marks, such as surveying;

(b)       Mr. Senders' opinion distorts the relevant legal test for confusion, in that he concludes that there would not be significant confusion between the trade-marks. Significant confusion is not the appropriate legal test and, in fact, connotes a more stringent standard that the appropriate legal test, which is whether there is a likelihood of confusion;

(c)       The opinion in Mr. Sender's affidavit is contradicted by the dictionary excerpts appended to the affidavit itself, as such excerpts show that the definitions and connotation of the words "decision" and "choice" can, in certain circumstances, be the same. Moreover, Roget's International Thesaurus indicates that "choice" and "decision" are synonyms. The interchangeability of the words "decision" and "choice" was also, in essence, confirmed by Mr. Senders on cross-examination;

(d)       Mr. Sender's opinion on the issue of descriptiveness was based on his critical analysis of the words in each trade-marks; However, an assessment of descriptiveness should not be based on the critical analysis of the words in a trade-mark.

(e)       This Court cannot adopt Mr. Sender's opinion simply on the basis of his expertise. The fact that Mr. Senders did not conduct a survey, and gave his opinion about the differences in formal definition and connotation of the marks at issue based on mere hypotheses, necessitates treating his opinion with care.

[136]        The respondent submits that the affidavit of Mr. Senders relates to the concept of confusion as a whole and not merely the narrow issues pertaining to section 6(5)(e) - resemblance of the marks. The respondent submits that considerations of formal definition and connotation of the respective marks and the differences therein are clearly relevant to the determination of confusion, particularly since Mr. Senders' opinion relate to confusion and that issue to the relevant period, namely August 2, 1994.

[137]        I have considered Mr. Sender's affidavit and the evidence submitted and I was not convinced that the trade-marks Health Choice and Healthy Decision have inherent distinctiveness or acquired distinctiveness.

[138]        The second factor considered is the length of time the trade-marks have been in use. As noted by the Registrar, the affidavit of Mr. Murata indicates that the applicant began to use the mark Healthy Choice in June 24, 1991 and prior to 1994, gross Canadian sales of Healthy Choice products exceeded $23,000,000. The respondent's application was based on proposed use. However, the respondent commenced use of the trade-mark Healthy Decision at least as early as 1995/96 in association with frozen french fried potatoes and has not at any time abandoned such use in Canada.

[139]        The respondent submits that the applicant's use of its Healthy Choice mark was virtually non-existent at the relevant date, namely August 2, 1994. The affidavit of Mr. Yung indicates that Healthy Choice was not well-known in Canada. Also, while the Healthy Choice trade-mark was allegedly first used by the applicant in June 1991, it was virtually unknown in the Canadian market place in 1997. The Healthy Choice frozen dinner and frozen entrees were in no major grocery stores.

[140]        The market launch of the Healthy Choice food products was in 1991 and 1992. By 1993, the market launch had failed. At the height of the market launch, the Healthy Choice products may have had six to seven percent of the market share of frozen dinners. The applicant's current market share is close to zero.

[141]        There have been virtually no major advertisement of the Healthy Choice products since 1993.

[142]        I agree with the Registrar that a consideration of the length of time each mark had been used as of the filing date of the application, naturally favours the applicant. I also agree with the Registrar that the extent to which each of the marks had become known, is a factor that favours the applicant.

[143]        Regarding the nature of the wares, services or business, the Federal Court of Appeal in Pink Panther Beauty Corp., supra, explained:

Clearly, where trade-marks are similar, the degree to which the wares or services which bear those marks are similar will be a large factor in determining whether confusion is likely to result. Similarity in wares or services cannot be a sine qua non in a determination of confusion, as subsection 6(2) dictates that confusion may result "whether or not the wares or services are of the same general class". However, the ultimate test is confusion, and where one product does not suggest the other it will be a strong indication that confusion is unlikely. The nature of the wares, services and business, therefore, though not always controlling, are certainly of significance. [...]

[144]        On the issue of the nature of the wares, I believe that since the abandoned applications refer to the same wares, the parties' wares overlap.

[145]        As for the nature of the trade, again in Pink Panther Beauty Corp., supra, the Federal Court of Appeal held:

Similar to the nature of the wares or services is the consideration of the nature of the trade in which those wares or services circulate. The risk of confusion is greater where the wares or services, though dissimilar, are distributed in the same type of stores or are of the same general category of goods. [...]

The nature of the trade extends the analysis to the type of trading environment as well. Where one product is traded on a wholesale level and the other through retail outlets, this must be taken into consideration. This relates both to the environment and to the nature of the consumer. [...]

[146]        I agree with the Registrar that the parties' channels of trade overlap as both parties sell their wares through retail grocery stores. The applicant further submitted affidavits of Mr. Fullman and Mr. Koopman. The respondent objected to those affidavits. These affidavits show that the wares would be found in the same aisle at the grocery stores or close together. In my view, these affidavits would only further support my conclusion that the parties' channels of trade overlap. Since I do not need the affidavits to reach my conclusion, I will not consider.

[147]        The degree of resemblance between the trade-marks in appearance or sound or in the ideas suggested by them, was explained as follows in Oshawa Group Ltd. v. Creative Resources Co. Ltd. (1982), 61 C.P.R. (2d) 29 (F.C.A.), by the Federal Court of Appeal:

Furthermore, in assessing the "degree of resemblance" factor mandated by s-s. (6)(5)(e) of the Act, the test must be taken from the point of view of a person who has only a general and not a precise recollection of the earlier mark. Furthermore, the issue of similarity must be determined on the effect of the marks when taken as a whole or in totality. Marks should not be laid side by side for the purpose of analysis as to similarities and differences: see British Drug Houses Ltd. v. Battle Pharmaceuticals (1944), 4 C.P.R. 48, [1944] 4 D.L.R. 477, 4 Fox Pat. C. 93 [affirmed 5 C.P.R. 71, [1946] 1 D.L.R. 289, 5 Fox Pat. C. 135].

[148]        On this issue, the Registrar decided that the marks resemble each other in appearance and sound as a result of them both consisting of two words, with the first word being "healthy". The Registrar further concluded that the words "choice" and "decision" had overlapping meanings. I also agree with the Registrar on this issue.

[149]        In Miss Universe, Inc. v. Bohna (1994), 58 C.P.R. (3d) 381 (F.C.A.), the Federal Court of Appeal sated:

To decide whether the use of a trade mark or of a trade name causes confusion with another trade mark or another trade name, the court must ask itself whether, as a matter of first impression on the minds of an ordinary person having a vague recollection of that other mark or name, the use of both marks or names in the same area in the same manner is likely to lead to the inference that the services associated with those marks or names are performed by the same person, whether or not the services are of the same general class.

[footnotes omitted]

[150]        In light of the evidence, I am of the view that the trade-mark Healthy Decision causes confusion with the applicant's abandoned trade-mark applications Nos. 679,139 and 679,140 for Healthy Choice.

3- Regarding the aspect of the Registrar's decision pertaining to the applicant's paragraph 16(3)(a) ground of opposition:

(a)       Did the Registrar err in finding that there was no overlap between the pasta sauces, frozen dinners and frozen entrees sold by the applicant and the remaining wares, and thus err in finding no confusion between the trade-marks with respect to those wares?

Standard of Review

[151]        The standard of review of a Registrar's decision was stated as follows by the Federal Court of Appeal in Molson Breweries v. John Labatt Ltd., [2000] F.C.J. No. 159 (F.C.A.):

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. [...] 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. 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.

[...]

An appeal under section 56 involves, at least in part, a review of the findings of the Registrar. In conducting that review, because expertise on the part of the Registrar is recognized, decisions of the Registrar are entitled to some deference. In Benson & Hedges (Canada) Limited v. St. Regis Tobacco Corporation [[1969] S.C.R. 192">[1969] S.C.R. 192], Ritchie J. stated, at page 200:

In my view the Registrar's decision on the question of whether or not a trade mark is confusing should be given great weight and the conclusion of an official whose daily task involves the reaching of conclusions on this and kindred matters under the Act should not be set aside lightly but, as was said by Mr. Justice Thorson, then President of the Exchequer Court, in Freed and Freed Limited v. The Registrar of Trade Marks et al, 14 C.P.R. 19:

... reliance on the Registrar's decision that two marks are confusingly similar must not go to the extent of relieving the judge hearing an appeal from the Registrar's decision of the responsibility of determining the issue with due regard to the circumstances of the case.

In McDonald's Corp. v. Silcorp Ltd. [(1989), 24 C.P.R. (3d) 207 (F.C.T.D.), at p. 210.], Strayer J. (as he then was), having regard to the words of Ritchie J., explained that while the Court must be free to assess the decision of the Registrar, that decision should not be set aside lightly.

It seems clear that in opposition proceedings where the issue is essentially one of facts concerning confusion or distinctiveness the decision of the registrar or the Board represents a finding of fact and not the exercise of discretion. Therefore the court should not impose upon itself the same degree of restraint, in reviewing that decision, as it would if the decision were essentially an exercise of discretion. It is thus free to review the facts to determine whether the decision of the registrar or Board was correct, but that decision should not be set aside lightly considering the expertise of those who regularly make such determinations: see Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp. (1968), 57 C.P.R. 1 at p. 8, 1 D.L.R. (3d) 462, [1969] S.C.R. 192">[1969] S.C.R. 192 at pp. 199-200 (S.C.C.). While different panels of the Federal Court of Appeal have variously expressed the duty of this court on appeal to be to determine whether the registrar has "clearly erred", or whether he has simply "gone wrong", it appears that it is the duty of a judge sitting on an appeal such as this to come to his own conclusion as to the correctness of the finding of the registrar. In doing that he must, however, take into account the special experience and knowledge of the registrar or the Board, and more importantly have regard to whether new evidence has been put before him that was not before the Board [Affd (1992), 41 C.P.R. (3d) 67 (F.C.A.).].

McDonald's Corp. v. Silcorp Ltd. was a 1989 decision, well before the recent Supreme Court jurisprudence establishing the modern spectrum of standards of review, namely, correctness, reasonableness simpliciter and patent unreasonableness. See Canada (Director of Investigation & Research) v. Southam Inc. [[1997] 1 S.C.R. 748, at pp. 776-777.]. Because Strayer J. was prepared to accord some deference to the Registrar, I do not consider his use of the term "correct" to reflect the non-deferential and rigorous standard of review that is today associated with the terms "correct" or "correctness".

I think the approach in Benson & Hedges and McDonald's Corp. 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.

[152]        In Garbo Group Inc. v. Harriet Brown & Co. et al. (1999), 3 C.P.R. (4^th) 224 (F.D.T.D.), Evans J. stated with respect to the standard of review:

As for the impact on the standard of review of the filing of additional evidence on an issue at the appeal, much will depend on the extent to which the additional evidence has a probative significance that extends beyond the material that was before the Registrar. If it adds nothing of significance, but is merely repetitive of existing evidence without enhancing its cogency, its presence should not affect the standard of review applied by the Court on the appeal.

If, on the other hand, the additional evidence goes beyond what was in substance already before the Registrar, then the Court should ask whether, in the light of that material, the Registrar reached the wrong decision on the issue to which that evidence relates and, perhaps, on the ultimate decision as well. The more substantial the additional evidence, the closer the appellate Court may come to making the finding of fact for itself.

Registrar's decision that there was no overlap

[153]        The applicant submits that the Registrar erred in finding that there was no overlap between the applicant's pasta sauces, frozen dinners and frozen entrees, and the remaining wares, and hence in finding no reasonable likelihood of confusion between the applicant's trade-marks and the respondent's trade-marks.

[154]        The applicant alleges that the Registrar erred in finding that the two trade-marks are confusing only with respect to wares that overlap directly but not with respect to other similar wares since the finding places undue emphasis on a technical and narrow classification of the different categories of food products at issue in this case.

[155]        Furthermore, the finding ignores the evidence as to the similarity between many of the remaining wares and the applicant's frozen dinners, frozen entrees and pasta sauces, in terms of the close proximity on grocery store shelves and the manner in which such food products are generally marketed.

[156]        The applicant contends that the finding does not protect consumers from confusion about the source of the remaining wares.

[157]        The finding does not acknowledge commercial realities, in that both the applicant and the respondent are international food conglomerates, producing a wide range of food products.

[158]        The finding improperly relies on obiter dicta from a precedent (Clorox, supra) which can be distinguished.

[159]        The Registrar stated at page 6 of its decision:

As of August 2, 1994, the opponent had used HEALTHY CHOICE for frozen dinners, frozen entrees and pasta sauces. Some of the opponent's HEALTHY CHOICE frozen dinners and entrees consist of lasagna and pasta. Given that the applicant's statement of wares includes fresh entrees; frozen prepared entrees; lasagna and pasta dishes; and frozen microwavable prepared lunches, the wares of the applicant and the opponent clearly overlap. With respect to the remaining wares covered by the applicant's application, I note the decision of the Federal Court in Clorox Co. v. Sears Canada Inc. (1992), 41 C.P.R. (3d) 483 (F.C.T.D., where the Court said at page 490: "One only needs to look at the thousands of different foods, meats, condiments, confectioneries, cereals and what-not, found in some supermarkets to be wary of giving too much weight in some circumstances to the ‘same general class' test."

The parties' channels of trade overlap as both parties sell their wares through retail grocery stores. Mr. Yung states however that the applicant's food products would not be sold in close proximity to pasta sauces.

[paragraph 23(vii), Yung affidavit].

[160]        The applicant notes that this Court, in Clorox, elaborated on the quote mentioned by the Registrar:

The rule speaks of likelihood of confusion if the wares covered by competing marks, as in the scenario adopted in trade mark cases, were placed side by side on the same shelf in the same retail store. In my view of the case before me, this would be a very unlikely occurrence. The respondent's wares have certainly not been known to have been marketed outside its own premises.

[161]        The applicant argues that one of the important reasons for the finding in Clorox, was that the respondent's wares in that case would not be sold outside of its Sears stores. The contrary is the case in this appeal. Furthermore, in Clorox, it does not appear that either the Registrar or the Court had the benefit of evidence concerning the positioning of products on store shelves or the commonality in marketing. The applicant submits that in short, Clorox does not stand for the proposition that only identical grocery store products can be found to overlap, within the framework of paragraph 6(5)(c).

[162]        In Pink Panther Beauty Corp. v. United Artists Corp., supra, the Federal Court of Appeal explained:

Clearly, where trade-marks are similar, the degree to which the wares or services which bear those marks are similar will be a large factor in determining whether confusion is likely to result. Similarity in wares or services cannot be a sine qua non in a determination of confusion, as subsection 6(2) dictates that confusion may result "whether or not the wares or services are of the same general class". However, the ultimate test is confusion, and where one product does not suggest the other it will be a strong indication that confusion is unlikely. The nature of the wares, services and business, therefore, though not always controlling, are certainly of significance. [...]

[163]        The applicant submits that the evidence before the Registrar shows that the subject goods could well be placed in close proximity to each other in the same sections of the same retail grocery stores. The evidence also shows that the subject goods are generally marketed in similar fashion.

[164]        The applicant further contends that given that its frozen dinners, frozen entrees and pasta sauces, and the remaining wares, are (a) not intrinsically different, (b) are, or will be, sold in the same section or aisle of a grocery store, or in close proximity to each other, (c) can be, and often are, marketed in similar fashion, the Registrar's conclusion that there is no reasonable likelihood of confusion between the applicant's trade-marks and the respondent's trade-mark, used in association with the remaining wares, was clearly wrong.

[165]        The Federal Court of Appeal in Pink Panther Corp., supra, stated as follows, regarding the nature of the trade :

Similar to the nature of the wares or services is the consideration of the nature of the trade in which those wares or services circulate. The risk of confusion is greater where the wares or services, though dissimilar, are distributed in the same type of stores or are of the same general category of goods. For example, if both items are in the general category of household products and are sold in similar places, then confusion is more likely. However, where one mark refers to household products and the other to automotive products, and they are distributed in different types of shops, there is less likelihood that consumers will mistake one mark for the other.

The nature of the trade extends the analysis to the type of trading environment as well. Where one product is traded on a wholesale level and the other through retail outlets, this must be taken into consideration. This relates both to the environment and to the nature of the consumer. [...]

[166]        The respondent submits that the nature of the wares allowed in association with the respective marks are different, particularly since the respondent was not allowed to register the mark in association with frozen prepared entrees, lasagna, pasta dishes and frozen prepared lunches. Further, where a person adopts a word in common use and seeks to prevent competitors from doing the same, the trade-marks will have less inherent distinctiveness and the range of protection granted by the Court will be limited. A mark that is common to the trade, may be open to the trade to use.

[167]        In my view, the decision of the Registrar regarding this issue can be considered unreasonable. The parties are in the same general class, i.e. food products. Only the nature of the wares is different. I disagree with the respondent that the respective marks are different. Further, more weight can be given to the nature of the trade factor. Therefore, I am of the view that the Registrar erred in finding no overlap between the applicant's pasta sauces, frozen dinners and frozen entrees, and the remaining wares, and hence in finding no reasonable likelihood of confusion between the applicant's trade-marks and the respondent's trade-marks with respect to the remaining wares.

(b)       Did the Register reach the wrong decision on the issue of the reasonable likelihood of confusion between the applicant's trade-marks and the trade-mark Healthy Decision (in relation to the remaining wares), in light of the new evidence filed by the applicant in this appeal?

[168]        The applicant filed new evidence before the Court. The applicant relies on Mr. Koopman's conclusion in his affidavit that the frozen food products in association with which the Registrar allowed the respondent's application (namely, frozen potato products, frozen fruit juices and food beverages, juice bars, frozen berries and fruit and frozen pizza) would be sold in close proximity to, and in many cases adjacent to, frozen dinners and frozen entrees.

[169]        The applicant also relies on the affidavit of Mr. Fellman. Mr. Fellman visited the frozen food section of two Ottawa-area Loblaws grocery stores. At the larger Loblaws he found that frozen french fries were positioned immediately below frozen dinners and entrees. Frozen pizzas were adjacent to frozen french fries and frozen dinners and entrees. Frozen juices were place approximately thirty feet from frozen dinners and entrees in one aisle, and an additional cooler placed between two aisles contained additional frozen juices placed only two shelves below additional frozen dinners and entrees. Finally, a second frozen food aisle contained ice cream, ice cream bars, juice bars and other novelty items.

[170]        At the second Loblaws grocery store Mr. Fellman found that the frozen food section consisted of only two coolers.

[171]        In light of my answer at question 3(a), I do not need the new evidence to conclude that there is a likelihood of confusion between the trade-marks of the applicant in relation to the pasta sauces, frozen dinners and frozen entrees sold by the applicant and the remaining wares of the respondent. Therefore, I will not consider the new evidence filed before this Court.

[172]        Therefore:

-          This application is granted;

-          The Trade-marks Opposition Board's decision is set aside;

-          The Registrar of Trade-marks is directed to refuse the application by the respondent McCain Foods Limited No. 760,649 in its entirety;

-          Costs in favour of the applicant.

Pierre Blais                                          

Judge

OTTAWA, ONTARIO

August 29, 2001