Date:
20121221
Docket:
T-2077-11
Citation: 2012 FC 1541
Vancouver, British Columbia,
December 21, 2012
PRESENT: The Honourable Mr. Justice Manson
BETWEEN:
|
|
CEG LICENSE INC.
|
|
|
|
Applicant
|
|
and
|
|
|
JOEY TOMATO'S (CANADA) INC.
|
|
|
|
Respondent
|
|
|
|
|
REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an appeal under s. 56 of the Trade-Marks Act [the Act] of a decision
of the Trade-Marks Opposition Board [the Board] dated October 20, 2011 [the
Decision].
I. Background
[2]
On
September 30, 2008, Joey Tomato’s (Canada) Inc. [the respondent] filed
Application No. 1412784 for registration of the trade-mark LOCAL [the Mark].
[3]
The
application for registration of the Mark was based on proposed use of the Mark
in respect of wares described as beverageware including wine glasses and other
glasses, cups and mugs; beverage coasters; wine cranks and Promotional items,
namely key chains, flags, novelty buttons, greetings cards, note cards,
pencils, pens, coffee mugs, and magnets, namely fridge magnets and services
described as restaurant, bar and lounge services; food take-out services
including online ordering services for take-out food; catering services.
[4]
The
application was advertised in July 22, 2009 edition of the Trademarks
Journal. A Statement of Opposition was filed on behalf of CEG License Inc.
[the applicant] on September 21, 2009. The Statement of Opposition set out four
grounds of opposition. During the opposition proceeding, the applicant
disclaimed all but the following ground of opposition:
The trademark applied for is not
distinctive, having regard to the provisions of Sections 38(2)(d) and 2 of the Trade-marks
Act because it is not capable of distinguishing the [Respondent’s] services
from services of others, particularly the services provided by the Opponent
under the trade names LOCAL 522 and LOCAL 510, nor is it adapted to so
distinguish the Opponent’s trade names.
[5]
A
counterstatement was filed by the respondent on December 8, 2009 contesting all
of the grounds of opposition. In support of the opposition the applicant filed
the Affidavit of Brian Lee on April 8, 2010. The respondent filed a Statement
advising that it did not wish to submit evidence pursuant to Section 42 of the Trade-marks
Regulations.
[6]
The
decision of the Trade-marks Opposition Board made October 20, 2011, Citation:
2011 TMOB 203 rejected the applicant’s opposition to registration of the Mark
on the following grounds:
a.
the
applicant failed to meet its initial burden to establish that, as of September
21, 2009, one or both of the applicant’s trade names had become well known in
the geographic location of Calgary, Alberta; and
b.
the
applicant failed to show that one or both of its trade-marks had a reputation
in Canada that was substantial, significant or sufficient to negate the
distinctiveness of the Respondent’s trade-mark LOCAL, as proposed to be used
with the services listed on the application.
[7]
Having
found that the applicant did not meet its initial burden, the Board did not
consider whether the Mark was distinctive or confusing with the applicant’s
trade names.
[8]
On
December 21, 2011, the applicant filed a Notice of Application appealing the
Decision.
[9]
On
January 11, 2012, the respondent filed a notice of appearance. The applicant
filed new evidence in the Affidavit of Brian Lee sworn January 19, 2012. The
respondent filed the Affidavit of Sonia Atwell sworn February 17, 2012.
[10]
The
respondent cross-examined Mr. Lee on Affidavit on his January 19, 2012
affidavit on March 7, 2012. On March 28, 2012 Mr. Lee was cross-examined on the
undertakings given during the March 7, 2012 cross-examination.
II. Issue
[11]
The
only ground of opposition at issue in this appeal is whether the trade-mark
LOCAL applied is not distinctive having regard to the provisions of Sections
38(2)(d) and (2) of the Act because the trade-mark is not capable of
distinguishing the respondent’s services from the services provided by the
opponent under trade names LOCAL 522 and LOCAL 510, at the relevant date.
[12]
The
applicant asks the Court to consider:
i.Did
the Opposition Board err in deciding that the applicant failed to meet its
initial burden to establish that the trade names or marks LOCAL 510 and LOCAL
522 had become well-known in the City of Calgary as of September 21, 2009?;
ii.Did
the Opposition Board err in deciding that the applicant failed to establish the
reputation of the marks LOCAL 510 and LOCAL 522 as of September 21, 2009?;
iii.If
so, has the respondent established that the Mark is distinctive, given the
prior use of the applicant’s confusingly similar marks and trade names, LOCAL
510 and LOCAL 522?
III. Relevant
Date
[13]
The
key date for determining whether the respondent’s trade-mark is distinctive is
the date of filing of the opposition, namely September 29, 2009.
IV. Standard
of Review
[14]
Given
new evidence was filed by the opponent in this matter that was not before the Opposition
Board, the Court has an unfettered discretion to consider the matter and come
to its own conclusion as to the correctness of the Board’s decision, if the new
evidence is significant and would materially affect the underlying decision: (Bojangles'
International, LLC v Bojangles Café Ltd, 2006 FC 657 [Bojangles]; Mattel,
Inc v 3894207 Canada Inc, 2006 SCC 22 at paras 35, 37)
[15]
However,
where no new significant evidence is added on appeal, the standard of review is
reasonableness simpliciter (Molson Breweries v John Labatt Ltd, [2000] FCJ No
159, [2000] 3 FC 145; Novopharm Ltd v AstraZeneca AB, 2001 FCA 296).
[16]
Thus,
the real question for consideration by the Court is the nature and quality of
the new evidence, and whether it materally affects the decision below, so that
the standard is correctness, or whether the new evidence is not significant and
would not materally affect the decision below, such that the standard of review
is reasonableness and considerable deference should be given to the decision
below (Telus Corp v Orange Personal Communications Services Ltd, 2005 FC
590 at 397; aff’d 2006 FCA 6 (FCA)).
V. Onus
on the Parties
[17]
While
the initial evidentiary burden for the sole ground of opposition is on the
opponent, the legal burden or onus that the trade-mark is registrable remains
on the applicant, on a balance of probabilities (John Labatt Ltd v Molson Co,
[1990] FCJ No 533, 30 CPR (3d) 293, aff’d [1992] FCJ No 525, 42 CPR (3d) 495
(FCA)).
VI. Evidence
before the Board
[18]
It
is not disputed by the applicant that based on the paucity of evidence that was
before the Board, the evidence before her supported a finding that the opponent
did not meet its initial burden.
[19]
The
Board Member reviewed the evidence filed by the applicant (opponent) carefully,
and correctly noted the following:
Mr. Lee states that the Opponent
has used the trade names LOCAL 510 and LOCAL 522 in association with nightclub,
bar, tavern, restaurant and lounge services since at least May 31, 2009.
Although Mr. Lee provides various exhibits, the only ones identified as being
prior to the material date of September 21, 2009 are:
1. “a copy of a poster advertised
in the Bestroute magazine of the Calgary Herald in April 2009 advertising the
opening of LOCAL 510 and LOCAL 522” (Exhibit “J”)- however, I do not see either
LOCAL 510 or LOCAL 522 displayed in such advertisement;
2. “copies of the posters
advertised in the Bestroute magazine of the Calgary Herald in June, July,
August, September.. of 2009 respectively advertising LOCAL 510” – I do see
LOCAL 510 displayed in these advertisements (Exhibits “K” through “N”)
3. “a copy of the online review
for LOCAL 510 from Fast Forward Weekly Magazine dated July 30, 2009” (Exhibit
“S”)
Mr. Lee has provided sales figures
associated with each trade name in 2009 but these figures are of no assistance
because they have not been broken down to show the sales prior to September 21,
2009.
From the above, it is clear that
the Opponent has not met its initial onus insofar as the trade name LOCAL 522
is concerned. The question remains whether it has met its onus insofar as the
trade name LOCAL 510 is concerned. There is some evidence that such trade name
was promoted prior to September 21, 2009 so the question becomes whether the
reputation evidenced is sufficient to negate the distinctiveness of the Mark.
In the absence of evidence of
Canadian viewership of the July 20, 2009 online review, I can accord only de
minimus weight to it. That leaves the evidence of four ads that appeared
shortly before the material date in a magazine of the Calgary Herald.
I am not satisfied that four
advertisements in a magazine of the Calgary Herald suffice to affect the
distinctiveness of the applicant’s proposed use Mark. In this regard, I refer
to the first part of paragraph 33 of Bojangles:
The following propositions
summarize the relevant jurisprudence on distinctiveness were there is an
allegation that a mark's reputation negates another mark's distinctiveness, as
per s. 2 and para. 38(2)(d) of the Act :
- The evidential
burden lies on the party claiming that the reputation of its mark prevents the
other party's mark from being distinctive;
- However, a
burden remains on the applicant for the registration of the trade-mark to prove
that its mark is distinctive;
- A mark should be
known in Canada to some extent at least to negate another mark's
distinctiveness;
- Alternatively, a
mark could negate another mark's distinctiveness if it is well known in a
specific area of Canada;
- A foreign
trade-mark owner cannot simply assert that its trade-mark is known in Canada, rather, it should present clear evidence to that effect;
- The reputation
of the mark can be proven by any means, and is not restricted to the specific
means listed in section 5 of the Act, and it is for the decision-maker to weigh
the evidence on a case-by-case basis.
V. New
evidence
[20]
The
applicant relies on the evidence previously filed and before the opposition
Board, together with a new affidavit of Brian Lee sworn January 19, 2012. The
respondent filed the affidavit of Sonia Atwell sworn February 17, 2012. Mr. Lee
was cross-examined on his affidavit of January 19, 2012 and on undertakings
given during his initial cross-examination on that affidavit. The parties are
agreed that when new evidence is submitted, it is necessary for the Court to
assess its significance and probative value (Bojangles).
[21]
It
is the applicant’s position that the new evidence of Mr. Lee is sufficiently
significant and probative that it would have materially affected the opposition
Board’s findings of fact and exercise of its discretion, and therefore I should
review on a standard of correctness.
[22]
The
Respondent argues that the new evidence and cross-examination on that evidence proves
that the applicant’s trade names LOCAL 510 and LOCAL 522 were not well known in
Calgary in the relevant period, and that the limited use of the applicant’s
trade names did not negate the distinctiveness of the respondent’s LOCAL
trade-mark as applied for, for use with the services listed in the Respondent’s
application. As such, the review by the Court should give difference to the
decision of the Board and be based on a standard of reasonableness.
[23]
Mr.
Lee’s new evidence consists of the following:
1.
copies
of advertisements and promotional materials that were run or printed between
April 21, 2009 and September 20, 2009 bearing LOCAL 510;
2.
copies
of advertisements and promotional materials run or printed between May 14, 2009
and September 6, 2009 bearing LOCAL 522;
3.
circulation
information for Best Route Magazine in Calgary and information concerning
advertising purchased by the applicant in June 2009;
4.
publisher
information concerning Fast Forward Weekly’s circulation in Calgary from June
1, 2009 to September 2009;
5.
information
on use of LOCAL 510 at the Calgary Folk Music Festival in 2009;
6.
a
gross sales analysis for LOCAL 510 and LOCAL 522 from their opening to
September 29, 2009;
7.
copies
of invoices, notices and receipts from suppliers, vendors and service providers
to LOCAL 510 and LOCAL 522, prior to the date of opposition.
[24]
The
applicant’s position is that when one combines the evidence of the menu, the
invoices, the promotional material, the quantity of sales prior to the date of
opposition and the likely number of people who would have visited the LOCAL 510
location and the LOCAL 522 location, in the three and half months prior to the
date of opposition, one should conclude that there was a significant reputation
in the LOCAL 510 and LOCAL 522 trade names and trade-marks, and they were
well-known, rendering the respondent’s LOCAL trade-mark non-distinctive as of
September 21, 2009.
[25]
The
respondent invites the Court to give little weight to the new evidence of the
applicant, for the following reasons:
1.
the
new evidence is neither reliable, nor probative, in that it fails to establish
the necessary linkage between the applicant’s LOCAL 510 and LOCAL 522 trade
names and any real reputation in those names, based on the promotional and
advertising materials, invoices and sales information provided in the Lee
affidavits;
2.
there
are credibility issues and lack of probative value with respect to the Lee
evidence, given that:
i.
there
is no evidence of any signage at either location of the LOCAL 510 or LOCAL 522
establishments, other than a smudged reference on a chalk board for LOCAL 522;
ii.
as
confirmed during cross-examination of Mr. Lee, the sales figures in the Lee
affidavit reflect “commingled” sales of LOCAL 522 and the Wildhorse Saloon,
operated for 10 days during the Calgary Stampede in July 2009, such that one
cannot attribute or proportion those sales figures to the LOCAL 522 or LOCAL
510 trade name. Most of the sales in Exhibit “K” to Lee occurred during the
month of the Calgary Stampede. Further, Exhibit “J” to Mr. Lee shows no
revenues for the 510 location prior to July 14, 2009, less than two (2)
months prior to the date of opposition, and Exhibit “K” shows no revenues for
the 522 location prior to June 23, 2009, less than three months before the opposition
was filed. In addition, there are errors in the tabulated sales figures;
iii.
on-line
reviews, to the extent they are admissible, indicate that people only know the
applicant’s two restaurants by the number of the location, namely 510 or 522,
or never knew the name, and not by use of LOCAL, at any relevant time;
iv.
the
promotional evidence doesn’t specify whether the alleged advertisements were
“run” or “printed”, and are merely mock-ups of such ads; showing “proofs”
doesn’t show the context of how the ads were actually published, if at all.
Further, many of the documents attached as Exhibits to Lee were hearsay and
should be given little or no weight.
v.
on
cross-examination, Mr. Lee confirmed that he did not ask anyone to submit
first-hand evidence concerning the publications or advertisements referred to
in his affidavit-hearsay evidence is neither necessary or reliable;
vi.
the
Atwell evidence of the respondent confirmed that both before and even after the
relevant date of opposition, people generally did not know the trade name LOCAL
510 or LOCAL 522, or recognize any trade-mark making use of LOCAL at either of the
applicant’s locations;
vii.
the
web-site of CEG using the domain name local tavern.ca (Exhibit “I” to Lee) was
not operated at any relevant time, something Mr. Lee failed to mention.
VI.
Analysis
and Reasons
[26]
The
foundation of a mark is distinctiveness, because only a distinctive mark will
allow a consumer to identify the source of the goods. Kirkbi AG v Ritvik
Holdings Inc 2005 SCC 65 par. 39.
[27]
The
crucial factor to consider is the message the trade-mark actually conveys to
the public. If the applicant can demonstrate that a substantial segment of the
Canadian market associates the LOCAL trade-mark of the respondent with the
applicant, rather than the respondent, at the material time, then the LOCAL
mark would not be distinctive and would not be registerable. However, in the
absence of evidence of a substantial reputation of the applicant’s LOCAL 510 or
LOCAL 522 trade names or trade-marks, at the relevant time, particularly when
the applicant’s use is limited to the City of Calgary and no other market in
Canada, then the applicant has not established any lack of distinctiveness of
the respondent’s LOCAL trade-mark, by virtue of the use of LOCAL 510 or LOCAL
522 by the applicant in that market. Bousquet v Barmish Inc (1991) 37
CPR 3(d) 516 at 525, 528 and 529 (SCTD); aff’d (1993) 46 CPR 3(d) 510 at 511
(FCA); Bojangles’ International, LLC v Bojangles Café Ltd (2006)48 CPR
(4th) 427 at paragraphs 26, 33 (FCTD) [Bojangles].
[28]
As
stated by the Board in its decision:
“…when an opponent’s reputation
is restricted to a specific area of Canada, the opponent’s initial goodwill be
satisfied if its trade-mark (or trade name) is well known in that specific
area. However, the evidence before me does not enable me to conclude that
either the opponent’s trade name was well known in the Calgary area or that it
had a reputation in Canada that was substantial, significant or sufficient to
negate the distinctiveness of the applicant’s mark. Accordingly, I find that
the opponent has not met its initial onus, with the result that the
distinctiveness ground of opposition is dismissed”.
[29]
Justice
Noël, at paragraph 33 of Bojangles, above, set forth the relevant
jurisprudence on distinctiveness where there is an allegation that a mark’s
reputation negates another mark’s distinctiveness, as per s. 2 and
para. 38(2)(d) of the Act:
“- The
evidential burden lies on the party claiming that the reputation of its mark
prevents the other party's mark from being distinctive;
- However,
a burden remains on the applicant for the registration of the trade-mark to
prove that its mark is distinctive;
- A
mark should be known in Canada to some extent at least to negate another mark's
distinctiveness;
- Alternatively,
a mark could negate another mark's distinctiveness if it is well known in a
specific area of Canada;
- A
foreign trade-mark owner cannot simply assert that its trade-mark is known in Canada, rather, it should present clear evidence to that effect;
- The
reputation of the mark can be proven by any means, and is not restricted to the
specific means listed in section 5 of the Act, and it is for the decision-maker
to weigh the evidence on a case-by-case basis.”
[30]
Accordingly,
for the applicant in this case to succeed, it must establish that the LOCAL 510
and/or LOCAL 522 trade names were known to the extent necessary to negate the
distinctiveness of the applicant’s proposed use of the LOCAL mark, and to do so
the applicant’s reputation in its LOCAL 510 and LOCAL 522 trade names should be
substantial, significant or sufficient.
[31]
Notwithstanding
that the applicant had two opportunities to submit evidence to show a
“substantial, significant or sufficient” reputation in its LOCAL 510 and/or LOCAL
522 trade name, it has failed to do so. While there is some evidence of use of
LOCAL 510 and LOCAL 522, that use is limited in scope, over a relatively short
period of time, and is questionable as to establishing any sort of reputation
other than as a numbered location for the premises of the two restaurants of
the applicant, namely, the “510” or “522” location. I agree generally with the
submissions made by counsel for the respondent with respect to the reliability
and probative value, or lack thereof, of the new evidence filed by way of the second
Lee affidavit. The absence of clear linkage between use of the trade name LOCAL
510 or LOCAL 522 and the sales figures provided by the applicant, makes it
difficult to put much weight on not only what figures are attributable to
either location, particularly given the commingled sales with the Wildhorse
Saloon, but also whether or not there was any sufficient or significant
reputation associated through those sales and the trade names being relied upon
by the applicant. Further, the running of the various promotional materials or
advertisements is inconclusive with respect to what was actually run and what
circulation there was of the materials that made use of LOCAL 510 or LOCAL 522
in the Calgary area. The evidence as a whole is certainly not clear and fails
to establish that use of the applicant’s trade name LOCAL 510 or LOCAL 522
rendered the respondent’s mark non-distinctive as of the date of opposition.
Whether based on a standard of reasonableness or correctness, I find that the
applicant has failed to meet the applicable standard on appeal.
[32]
When
one reviews the comments both up to the date of the opposition and thereafter
with respect to the online information provided, it also does not support any
finding of significant or sufficient use by the applicant of either the LOCAL
510 or LOCAL 522 trade name in Calgary to negate the distinctiveness of the
respondent’s trade-mark, which I find to be a distinctive based on the criteria
as set out in the Bojangles case.
[33]
While
I do not need to address the issue raised by the respondent concerning whether
or not there was proper control over use of the trade name LOCAL 510 or LOCAL
522 by the applicant, given my finding above, in reviewing the license
agreements as attached as Exhibit O and P to the Lee Affidavit, together with
the fact that Victor Choy is a sole director and shareholder and controlling
mind of the applicant’s corporations, and in light of the very short period of
use by the applicant in this case, I find that there was a sufficient degree of
control by the applicant so as not to render the trade names LOCAL 510 and
LOCAL 522 invalid by reason of improper control.
JUDGMENT
THIS
COURT’S JUDGMENT is that the
applicant’s appeal is dismissed with costs to the respondent.
"Michael
D. Manson"
Email this Content