Likörfabrik v. Registrar of Trade-Marks, docket T-185-95

     T-185/95

BETWEEN:

     JOHANN BECHER OHG LIKÖRFABRIK,

     Appellant,

     -and-

     REGISTRAR OF TRADE-MARKS,

     Respondent,

     -and-

     MARKS & CLERK,

     Respondent.

     REASONS FOR ORDER

WETSTON J:

     This is an appeal of a decision of the Registrar of Trade-marks that the appellant's trademark BECHEROVKA was not in use in Canada within the preceding three years and was, therefore, expunged from the register according to subsection 45(5) of the Trade-marks Act, R.S.C. 1985, c. T-13 as amended.

     The appellant, a German company, is the Canadian registrant for the trade-mark BECHEROVKA registered in association with the wares of spirituous liquors or liqueurs. On April 2, 1993, the Registrar of Trade-marks issued a section 45 notice to the appellant regarding the trade-mark BECHEROVKA, registration number TMA 196,795, thereby requiring the appellant to furnish evidence of the use of the mark in Canada with respect to wares specified in the registration, namely spirituous liquors and liqueurs. The appellant submitted the affidavit of Peter Mielzynski, Canadian agent for the registered trade-mark owner which stated that the registrant had made use of the trade-mark in Canada in association with a herbal liqueur within the previous three years. The affiant provided figures for the sale of the liqueur in Canada, but did not provide a copy of the label affixed to the bottles sold in Canada. The respondent did not cross-examine on this affidavit but did file a written argument in reply.

     The matter was disposed of on November 29, 1994, without oral hearing, by a Senior Hearing Officer for the Registrar of Trade-marks. The officer ordered the expungement of the trade-mark on the grounds that the registrant had not satisfied its legal burden of proving that the trade-mark was in use in Canada. In particular, the Senior Hearing Officer found that there was ambiguity in the registrant's affidavit as to the actual use being made of the trade-mark and that the trade-mark may have been used in combination with another trade-mark. The senior hearing officer found that such a composite mark might not constitute use of the trade-mark within Canada. The appellant now appeals that decision.

     Section 44(1) of the Trade-marks Act reads:

This section has been described as a quick and expeditious method of clearing from the register trade-marks which are no longer in use: Aerosol Filters Inc. v. Plough (Canada) Ltd. (1979), 45 C.P.R. (2d) 194, Re Wolfville Holland Bakery Ltd. (1964), 42 C.P.R. 88. The Federal Court of Appeal described the subsection 44(1) tests in Plough (Canada) Ltd. v. Aerosol Fillers Inc. (1980), 53 C.P.R. (2d) 62, at page 66, as follows:

Accordingly, the registrant must prove use of the trade-mark in Canada in association with each ware for which it is registered. Section 4(1) reads:

Therefore, use must be within the ordinary course of business, by the registered owner and of the trade-mark as registered, or without material differences, on the wares as registered or on wares which are by their nature closely related: Hughes On Trade Marks (Toronto: Butterworths, 1984) at page 542.

     As already mentioned, the purpose of a section 45 hearing is to clear the register of unused trade-marks, not to dispose of the substantial rights of the registrant where unwarranted. In Meredith & Finlayson v. Canada (Registrar of Trade Marks) (1991) 40 C.P.R. (3d) 409 at page 412, the Federal Court of Appeal cautioned:

In these circumstances, therefore, the Court must be mindful that section 45 provides a summary procedure whereby the registered owner is required to provide some evidence that the registered trademark is being used in Canada.

     In the proceeding before the Senior Hearing Officer, the appellant provided evidence that the trade-mark BECHEROVKA had been used on bottles of liqueur sold in Canada. The appellant also provided evidence that approximately 30 bottles of the liqueur had been sold in Canada in the three years preceding the notice. The applicant has provided further evidence of the use of the trade-mark in Canada through the affidavit of Gisbert Feierabend, a person associated with the registrant company, dated January 23, 1995. It is now well settled that in an appeal from an expungement hearing the Court is able to hear new evidence and may proceed de novo: 88766 Canada Inc. v. George Weston Ltd. (1987), 15 C.P.R. (3d) 260.

     In the case at bar, the respondent has challenged the appellant's bona fide use of the trade-mark BECHEROVKA. More particularly, the respondent submits that while the trade-mark may have been used by the Registrant in the preceding three years, the trade mark as used was significantly different from the trade mark as registered. The respondent concedes that the appellant has provided sufficient evidence of sales within Canada and association with the wares as listed to satisfy the other elements of the test. The main issue before me, therefore, is whether the trade-mark as used by the appellant is so different from the trade-mark as registered that it could not qualify as use of the trade-mark as registered.

     In Registrar of Trade Marks v. Compagnie international pour l'informatique CII Honeywell Bull, Société anonyme et al. (1985), 4 C.P.R. (3d) 523 (F.C.A.) the Court of Appeal considered a trade-mark used as part of a composite mark. In that case the registered trade-mark, BULL, had never been used separately and had always been used in combination with CII HONEYWELL BULL. It was argued that the combination of these words formed a new composite trade mark different from the mark as registered. The test enunciated by the court for determining use of a trade-mark is, at page 525:

In that case, the court decided that the combination of the three words did constitute a composite mark and was not use of the trade-mark BULL as registered.

     In an earlier case, Nightingale Interloc Ltd. v. Prodesign Ltd. (1984), 2 C.P.R. (3d) 535, a Senior Hearing Officer condensed the principles regarding deviation from registered trade-marks into two principles, at pages 538-539:

These principles were reflected in the decision in Honeywell Bull, supra. The question, in this case, is whether the mark BECHEROVKA was used. Nightingale, supra, clearly deals with the distinction between the addition of merely "descriptive" words and the creation of a composite trade-mark. In the case of additional words which are merely descriptive, the trade-mark may not be considered to have been significantly changed from the trade-mark as registered: Little Eagle Corp. v. Aliments Dainty Foods Inc. (1994), 53 C.P.R. (3d) 573 (T.M. Opp. Bd.), A.W. Allen Ltd. v. Registrar of Trade Marks et al. (1985), 6 C.I.P.R. 65 (F.C.T.D.).

     In the case at bar the appellant uses three different marks on the labels, one which is the registered mark in question and the other two which may be trade-marks. On the front of the bottle the word BECHER is prominently displayed. The appellant's affidavit evidence explained that BECHER is the German word for the liqueur BECHEROVKA. On the back of the bottle the words BECHERBITTER and BECHEROVKA are used in combination with other words. The back label reads:

In the respondent's submission the trade-mark must be read in combination with the three other words as a unified group of four words. The respondent argues that the trade mark BECHEROVKA as used in the combination BECHERBITTER DESTILLERIE BECHEROVKA KARLSBAD is so different from the trade mark as registered that it is not used. The appellant submits that the trade mark BECHEROVKA can be read in combination with only the word Karlsbad, which is merely a descriptive word indicating where the product is produced. I agree with the appellant that the four words can be read as two separate lines and not a unified group of four as is submitted by the respondent. The issue, therefore, is whether the use of the word "Karlsbad" with the trade-mark BECHEROVKA allows BECHEROVKA to retain its identity as a trade mark.

     I am satisfied that, for the purposes of this section 45 challenge, the trade mark BECHEROVKA as used was recognizable as the trade mark as registered. This product is of German origin and, according to the affidavit evidence, the market in Canada is German speaking Canadians or Canadians who have travelled to Germany and are familiar with the product. In my opinion, the word Karlsbad is merely descriptive of the place of production and does not alter the trade-mark significantly. Certainly German Canadians, to whom the product is aimed, would be likely to recognize the word as a place name. This is the type of addition described in Nightingale, supra as being purely descriptive material. Furthermore, I can see nothing to indicate that the combination of the words in anyway created a composite trade-mark of the type considered in Honeywell Bull, supra.

     Finally, the respondent argued that there was no evidence that the label presented in one affidavit was in any way linked to the evidence regarding the sale of the liqueur in Canada. In my opinion, the evidence is clear that the label referred to in the most recent affidavit of Gisbert Feierabend is the only label used on bottles of Becherovka liqueur produced by the appellant from 1985 until now. I conclude, on this basis, that this label must be the one used on bottles of Becherovka liqueur sold in Canada during the period 1990 until 1993.

     Accordingly, the appeal shall be allowed and the decision of the Registrar shall be set aside. Registration number TMA 196,795 shall be maintained in compliance with the provisions of subsection 45(5) of the Trade-marks Act.

                             Wetston J.

                             J.F.C.C.

Ottawa, Ontario

January 9, 1997