Date: 20021204
Docket: T-296-01
Neutral citation: 2002 FCT 1257
BETWEEN:
CONAGRA FOODS, INC.
Applicant
- and -
FETHERSTONHAUGH & CO.
Respondent
REASONS FOR ORDER
MACKAY, J.
[1] The applicant ("ConAgra") appeals the decision of the Registrar of Trade-marks (the "Registrar"), dated December 20, 2000, by which trade-mark registration TMA 407,779, for ConAgra's trade-mark KID CUISINE, was to be expunged from the Register pursuant to s. 45 of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended (the "Act").
[2] That decision was made at the conclusion of expungement proceedings initiated by the Registrar on February 11, 1999 at the request of the respondent, Fetherstonhaugh & Co. In those proceedings the applicant provided information concerning use of the trade-mark, by affidavit of Patrick J. Boyd, then Business Director of ConAgra Frozen Foods Company, a division of ConAgra. His evidence indicated that the division had "launched" KID CUISINE prepared frozen meals in Canada in January 1999. These were first delivered for sale in Canada in February 1999, and samples of invoices for sales in Canada, all of which postdated the section 45 notice, were provided with Mr. Boyd's affidavit.
[3] The Registrar found no evidence of sales, or of use within s. 4 of the Act, in the relevant period, i.e., the three years prior to the date of the s. 45 notice, February 11, 1999. In the absence of use in that period ConAgra was required by the Act to furnish the date when the trade-mark was last in use in Canada and the reason for lack of use since then. It did not do so. In the result there was not evidence of use of the trade-mark in the period after its registration in 1993 until the s. 45 notice in February 1999.
[4] When the trade-mark was registered in February 1993 the applicant's mark KID CUISINE had been widely used in the United States where the same mark was registered since 1991. Registration in Canada, pursuant to s-s. 14(1) of the Act, was based on the use of the registered mark in the U.S. and on proposed use in Canada. The trade-mark is registered in relation to wares described as:
Frozen prepared meals consisting of a chicken, cheese, beef or fish entree with side dishes of vegetables and fruit with additional fruit or bakery goods as desserts sold as a unit; frozen prepared meals consisting of a pasta-based entree with side dishes of vegetables and fruit with additional fruit or bakery dishes as dessert sold as a unit.
[5] In addition to finding no evidence of use in the relevant period the Registrar also agreed with the requesting party that the evidence provided by ConAgra of use after February 11, 1999, was not in association with the wares described in the registration, since the wares sold did not include fruit. The product sold in Canada included a side dish of corn, rather than of applesauce as was included in the product sold in the United States, a change introduced with a view to offering a product that would be perceived as more attractive in the Canadian market.
[6] In this appeal ConAgra filed additional evidence, a second affidavit of Patrick J. Boyd, with more extensive evidence of use than that before the Registrar, and an affidavit of Cathy Healy of Premcorp Sales and Marketing Limited, who at the relevant time was the Frozen Food Buyer for Oshawa Foods in Mississauga, about her experience in sampling and sales promotion, and in committing to purchase orders for ConAgra's trade-mark product, in the relevant period. Upon review of the additional evidence, the respondent advised that it withdrew any objection to registration of the trade-mark in issue, and it did not appear when this appeal came on for hearing when only the appellant was heard.
The Legislative Regime
[7] Section 45 of the Act provides, in part:
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45. (1) The Registrar may at any time and, at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee shall, unless the Registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or a statutory declaration showing, with respect to each of the wares or services specified in the registration, whether the trade-mark was in use in Canada at any time during the three year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since that date.
. . .
(3) Where, by reason of the evidence furnished to the Registrar or the failure to furnish any evidence, it appears to the Registrar that a trade-mark, either with respect to all of the wares or services specified in the registration or with respect to any of those wares or services, was not used in Canada at any time during the three year period immediately preceding the date of the notice and that the absence of use has not been due to special circumstances that excuse the absence of use, the registration of the trade-mark is liable to be expunged or amended accordingly.
(4) When the Registrar reaches a decision whether or not the registration of a trade-mark ought to be expunged or amended, he shall give notice of his decision with the reasons therefor to the registered owner of the trade-mark and to the person at whose request the notice referred to in subsection (1) was given.
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45. (1) Le registraire peut, et doit sur demande écrite présentée après trois années à compter de la date de l'enregistrement d'une marque de commerce, par une personne qui verse les droits prescrits, à moins qu'il ne voie une raison valable à l'effet contraire, donner au propriétaire inscrit un avis lui enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration solennelle indiquant, à l'égard de chacune des marchandises ou de chacun des services que spécifie l'enregistrement, si la marque de commerce a été employée au Canada à un moment quelconque au cours des trois ans précédant la date de l'avis et, dans la négative, la date où elle a été ainsi employée en dernier lieu et la raison de son défaut d'emploi depuis cette date.
. . .
(3) Lorsqu'il apparaît au registraire, en raison de la preuve qui lui est fournie ou du défaut de fournir une telle preuve, que la marque de commerce, soit à l'égard de la totalité des marchandises ou services spécifiés dans l'enregistrement, soit à l'égard de l'une de ces marchandises ou de l'un de ces services, n'a été employée au Canada à aucun moment au cours des trois ans précédant la date de l'avis et que le défaut d'emploi n'a pas été attribuable à des circonstances spéciales qui le justifient, l'enregistrement de cette marque de commerce est susceptible de radiation ou de modification en conséquence.
(4) Lorsque le registraire décide ou non de radier ou de modifier l'enregistrement de la marque de commerce, il notifie sa décision, avec les motifs pertinents, au propriétaire inscrit de la marque de commerce et à la personne à la demande de qui l'avis visé au paragraphe (1) a été donné.
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(5) The Registrar shall act in accordance with his decision if no appeal therefrom is taken within the time limited by this Act or, if an appeal is taken, shall act in accordance with the final judgment given in the appeal.
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(5) Le registraire agit en conformité avec sa décision si aucun appel n'en est interjeté dans le délai prévu par la présente loi ou, si un appel est interjeté, il agit en conformité avec le jugement définitif rendu dans cet appel.
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[8] Use in association with wares is defined by s-s. 4(1) of the Act, thus:
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4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
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4. (1) Une marque de commerce est réputée employée en liaison avec des marchandises si, lors du transfert de la propriété ou de la possession de ces marchandises, dans la pratique normale du commerce, elle est apposée sur les marchandises mêmes ou sur les colis dans lesquels ces marchandises sont distribuées, ou si elle est, de toute autre manière, liée aux marchandises à tel point qu'avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
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The Issues and the Standard of Review
[9] When this matter was heard the applicant appealed in relation to three findings of the Registrar.
1) that there was no evidence of use of the trade-mark in Canada in the relevant period;
2) that there was no evidence of special circumstances justifying non-use of the trade-mark in the material period; and
3) that the frozen prepared meals said to have been "launched" by the applicant in Canada in January 1999 with invoices of sales after February 11, 1999, in association with the trade-mark, would not support maintenance of the mark on the Register since the products "launched" did not meet the description of wares in the trade-mark registration because, in the Registrar's opinion, they did not include side dishes of fruit.
[10] In considering these issues, the standard of review to be applied is that described by the Federal Court of Appeal in Molson Breweries, a Partnership v. John Labatt Ltd. (2000), 5 C.P.R. (4th) 180 at p. 196:
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.
[11] In applying that standard of review the purpose of s. 45 of the Act is relied upon by ConAgra. That purpose has long been accepted as providing a summary procedure to clear the Register of trade-marks that have fallen into disuse and are in that sense "dead wood". It is ConAgra's submission that evidence before the Court establishes its use of the mark in issue in the relevant period and also its extensive market development shortly thereafter. Thus it has satisfied requirements of s-s. 45(1).
Use of the Trade-mark in the Material Period
[12] By his affidavit of March 2001, Mr. Boyd adds considerable detailed information about the activities of ConAgra in the years from 1997 to the date of the Registrar's s. 45 notice in February 1999. That information included responding to inquiries about the availability of KID CUISINE products in Canada from a purchasing officer of Oshawa Foods, who confirmed, by affidavit, her inquiries, her acquisition, and market testing, of samples in 1998. Exploration of potential marketing development in Canadian centres, in Toronto, Montreal, Calgary and Vancouver was undertaken by representatives of ConAgra in the year 1998. In that year the company also sought approval of Canadian regulators including those concerned with considering bilingual requirements of packaging for sales in Canada.
[13] Testing the market with samples and focus groups, in Canada, meeting with representatives of grocery chain stores, arranging for introduction of its products to the shelves and warehouses of those grocers in Canada, arranging for brokers and other representation in Canada, and other initial steps to develop a market in this country continued from the spring of 1998. Initial plans were for sales to be launched late in that year, but that proved impossible.
[14] Initial market testing in Canada led the company to prepare its products for sale in this country replacing a side serving of applesauce, common in the product sold in the United States, with a serving of corn or french fries. Ultimately, for another variety it replaced a beef product in its U.S. packages with a fish product for sale in Canada. Changes in the packaged product required change in the packaging for the Canadian market.
[15] ConAgra formally "launched" its KID CUISINE product in Canada in Toronto in January 1999 by featuring exposition of its products for representatives of the major grocery chains in Canada. While reference to that "launch" was made in the first affidavit of Mr. Boyd that was before the Registrar, in this appeal his further affidavit includes much detail about the launching. This includes the names of firms represented at ConAgra's demonstrations, specifics about their expressions of interest and in some cases commitments to purchase the products. One order placed before February 11, 1999 was accepted and goods valued at $60,000 were shipped to Canada on that day to meet expected early sales based on commitments made at or following the "launching". These cleared customs in Canada on February 13, 1999 and the initial order accepted before February 11, 1999 was fulfilled by delivery within a few days.
[16] In my opinion, acceptance of that order before the date of the s. 45 notice constitutes use of the KID CUISINE trade-mark product associated with the wares within s. 4 of the Act within the purposes of s. 45. Moreover, the distribution of samples, for testing in the Canadian market in 1998, a step within the regular course of trade in the industry where the owner of the trade-mark wares seeks to develop a market, also constitutes use of the trade-mark. There is no doubt that property in the sample products was transferred to the Canadian merchants testing the product, and no question arises about the process of sampling as market testing in the normal course of trade. Thus that process also meets the specific requirements of s. 4.
[17] In her decision the Registrar commented, in part:
It is clear that the registrant was not using KID CUISINE in Canada in accordance with the definition of use in Section 4 between February 11, 1996 and February 11, 1999, given that there was no "transfer of the property in or possession of "the KID CUISINE wares during that period . . ."
[18] In my opinion, in light of the additional evidence filed on appeal, which demonstrates use within s. 4 of the Act within the relevant period directed by s. 45, the Registrar's decision cannot stand. All of the activities of ConAgra in Canada from 1997 to February 11, 1999 were undertaken in the normal and regular course of its business, to establish its wares using its trade-mark in the Canadian market. While the evidence of use within the strict requirements of s. 4 does not demonstrate extensive transfers of property or possession of the wares from ConAgra to others, the Act does not require extensive transfers. There is evidence of use. Clearly the rapid development of the market in Canada for KID CUISINE wares in a relatively short time after February 1999, while not the test of use in the relevant period, is a clear reflection of the success of ConAgra's use through samples tested in the Canadian market and its other preparatory steps to launch its products, and its launch in January 1999.
Special Circumstances to Excuse Non-use
[19] Since I conclude there is evidence of use of the trade-mark in Canada in the relevant period, as required by s-s. 45(1), there is no need to consider the second issue raised on appeal, that is, whether special circumstances existed in this case to excuse non-use in the relevant period, pursuant to s-s. 45(3). It is argued by ConAgra that special circumstances here existed, by reason of two principal factors. These were its position as successor to a related company's agreement earlier with Canadian customs authorities not to enter the Canadian market until 1996, and the unexpected time required to meet regulatory requirements for marketing in Canada, in particular language requirements for packaging. I make no determination about the argument that these facts establish special circumstances for it is unnecessary for purposes of this decision to do so. The issue may better be considered where there are opposing arguments on facts before the Court.
The Wares Described in the Trade-mark and Conagra's Wares
[20] In the course of her decision for the Registrar, the Hearing Officer commented, further to his decision to expunge the registered mark because there was no evidence of its use in Canada in the three years prior to the s. 45 notice:
. . . I agree with the requesting party that the use shown of the mark after the date of the Section 45 notice is not in association with the specific wares covered by the registration, due to the absence of fruit in the wares sold.
[21] ConAgra, in response to the Registrar's comment, submits that the underlying assumption of the Registrar, that corn is not a fruit, is in error. The Encyclopaedia Britannica (Microssoft Excarta Online Encyclopedia 2001, "Fruit") is quoted:
Fruit, in its strict botanical sense [is] the fleshy or dry ripened ovary of a plant, enclosing the seed or seeds. Thus, apricots, bananas and grapes, as well as bean pods, corn grains, tomatoes, cucumbers, and (in their shells) acorns and almonds, are all technically fruit.
[22] Further, ConAgra urges that the description in the trade-mark could well bear the interpretation that the side dishes in the product were vegetables or fruit and a side dish of either would fit the statement. Driedger, E.A., in Construction of Statutes, 2nd ed. (Toronto: Buttersworth, 1983) at 15, comments:
One problem is that each of these two words is semantically ambiguous. It is not always clear whether the writer intends the inclusive "or" (A or B or both) or the exclusive "or" (A or B, but not both). . . .[T]here is a corresponding . . . uncertainty in the use of "and". Thus, it is not always clear whether the writer intends the several "and" (A and B jointly or severally) or the joint "and" (A and B, jointly but not severally).
[23] I agree with ConAgra that a reasonable interpretation of "side dishes of vegetables and fruit", used in the description of the wares subject to the trade-mark in issue would include "side dishes of vegetables and corn, or side dishes of vegetables, if corn were not a fruit. That interpretation would avoid expunging a trade-mark, the use of which is established in accord with s-s. 45(1), solely on the basis of an ambiguous description of the wares subject to trade-mark. The latter result would be inconsistent with the purpose of s. 45, i.e., to provide an expeditious process to expunge trade-marks from the Register where use is not established in the relevant period, absent special circumstances that would explain failure to use the mark.
[24] While the Hearing Officer might have concluded, pursuant to s-s. 45(3), that rather than expunging the mark, the description of the registered mark should be amended in the circumstances. She did not do so. Having determined that her decision cannot be supported in light of new evidence before the Court establishing use in the relevant period, of the mark, and further that the mark so used was in association with the wares described in the register of the trade-mark, I do not direct that the description of wares be amended.
Conclusion
[25] Since I find evidence before the Court, introduced in the appeal, establishes use of the trade-mark in association with the wares described in the registration, the decision of the Hearing Officer on behalf of the Registrar, cannot stand.
[26] An order goes directing that the impugned decision is set aside. The trade-mark KID CUISINE, registration TMA 407,779, owned by ConAgra Foods, Inc., shall not be expunged from the register. No order is made concerning costs.
"W. Andrew MacKay"
J.F.C.C.
Toronto, Ontario
December 4, 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-296-01
STYLE OF CAUSE: CONAGRA FOODS INC.
Applicant
- and -
FETHERSTONHAUGH & CO.
Respondent
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: WEDNESDAY, FEBRUARY 20, 2002
REASONS FOR ORDER BY: MACKAY J.
DATED: WEDNESDAY, DECEMBER 4, 2002
APPEARANCES:
Mr. Mirko Bibic
and Ms. Justine Whitehead
FOR THE APPLICANT
No representation
FOR THE RESPONDENT
SOLICITORS OF RECORD:
Stikeman, Elliot
1600-50 O'Connor Street
Ottawa, Ontario
K1P 6L2
FOR THE APPLICANT
No representation
FOR THE RESPONDENT
FEDERAL COURT OF CANADA
Date:20021204
Docket: T-296-01
BETWEEN:
CONAGRA FOODS, INC.
Applicant
- and -
FETHERSTONHAUGH & CO.
Respondent
REASONS FOR ORDER
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