Date:
20120628
Docket:
T-157-11
Citation:
2012 FC 824
Ottawa, Ontario,
June 28, 2012
PRESENT: The
Honourable Mr. Justice Harrington
BETWEEN:
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REYNOLDS CONSUMER PRODUCTS,
INC.
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Applicant
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and
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P.R.S. MEDITERRANEAN LTD.
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Respondent
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REASONS FOR
ORDER AND ORDER
“Oh! what a tangled
web we weave. When first we practice to deceive!”
Sir Walter Scott (1808)
[1]
The
applicant is the registrant in Canada of the word trade-mark GEOWEB for
use in association with “[r]oad
base and ground support plastic webbing sheets for building roads and
preventing erosion of roads”. Later on, the Canadian Intellectual Property
Office registered the respondent’s trade-mark NEOWEB for use in
association with the same sort of wares.
[2]
This
is an application under section 57 of the Trade-Marks Act for an order
that the NEOWEB entry in the Trade-Marks Register be struck out on the
ground that “the entry as it appears on the register does not accurately
express or define the existing rights of the person appearing to be the
registered owner of the mark”, namely the respondent, P.R.S. Mediterranean
Ltd., hereinafter P.R.S.
[3]
According
to the American applicant, to whom I shall refer as Presto (the firm name and
style under which it markets GEOWEB), the Israeli respondent, P.R.S.,
which was once its distributor and now its competitor, deliberately chose the
mark NEOWEB to create confusion in the marketplace, and has engaged in
false and deceptive advertising directly and through its licensees so as to
create the impression that its product, NEOWEB, was once known as GEOWEB.
Bad faith is alleged.
THE FACTS
[4]
The
parties are engaged in the manufacture of cellular confinement systems, often
called geocells. According to an article from Wikipedia, which is given some
credence as it was attached to the affidavit of Gary Bach, Presto’s long-term
business unit manager, these systems are widely used for erosion control, soil
stabilization on both flat ground and steep slopes, and structural enforcement
for load support and earth retention. Typically, they are made from
ultrasonically-welded high-density polyethylene or alloy strips which are
expanded on site to form a honeycomb-like structure which may be filled with
sand, soil or other material. Original research and development began with the
United States Army Corps of Engineers, which was testing the feasibility of
constructing tactical bridge approach roads over soft ground.
[5]
Presto
registered its word-mark GEOWEB in Canada in January 2001, claiming it
had been used here since at least August 1993. GEOWEB had been
registered in the United States in July 1985. P.R.S. acted as a licensee and
distributor of GEOWEB products for a five-year period starting in 1996.
The parties had a falling out which led to litigation which was resolved. Part
of the settlement was that the licensing agreement was extended through 2006.
Neither party has seen fit to provide a copy of the licensing agreement as it
originally was, or as amended; to state where the litigation took place, or even
to say whether or not P.R.S. was a licensee, exclusive or otherwise, in Canada.
[6]
Be
that as it may, P.R.S. began to compete. Its geocells are intended to be used
in road base and ground support applications such as highways and railways, as
well as erosion control and slope stabilization. Its application for the word
trade-mark NEOWEB was filed in Canada in August 2007 and was registered
in October 2010. Although the description of its wares is wordier than that of GEOWEB,
it really comes to the same thing: three-dimensional polymeric webs for soil
and earth stabilization and cellular confinement systems.
[7]
Although
P.R.S.’ product may have improved over time, originally it was practically
identical to Presto’s.
[8]
Presto
makes much of the fact that some of P.R.S.’ promotional literature appears to
have been taken word by word from Presto’s, that some of its material or that
of its licensees identifies NEOWEB as formally being GEOWEB and
that its website was also designed to confuse.
[9]
Before
turning to the substance of this application, it is important to keep in mind
what this is not. It is not a passing-off action under section 7 of the Act,
nor a trade-mark infringement case. Perhaps the respondent intended to deceive;
perhaps it did not. Its intention is irrelevant. The issue is whether there is
likelihood of confusion, not whether the respondent intended to confuse. As the
Federal Court of Appeal stated in Toyota Jidosha Kabushiki Kaisha v Lexus
Food Inc (CA), [2001] 2 FC 15 at paragraph 11, 264 NR 158: “There is no
doctrine of mens rea in the field of trade-marks.”
[10]
On
the other hand, the respondent submits that there has been little or no use of
the GEOWEB trade-mark in Canada. That fact, if established, is somewhat
irrelevant, in that this is not an application under section 45 of the Act in
which the registered owner is required to prove use, or lose registration.
[11]
The
respondent also submits that its product is better. That may, or may not, be so
but for the reasons that follow the quality of its product, as compared to
Presto’s, has no bearing in the context of this case. This case deals with the
likelihood of confusion in the marketplace, no more, no less.
THE LITIGATION
[12]
On
4 February 2011, Presto filed a notice of application seeking an order under
section 57 of the Act striking out the NEOWEB registration on the
grounds that it did not “…accurately express or define the existing rights of
the person appearing to be the registered owner of the mark.”
[13]
There
are three dates which must be kept in mind:
a. February
2007:
the claimed first date use of NEOWEB in Canada. Presto asserts that
pursuant to sections 16 and 18 of the Act, the respondent was not entitled to
registration as NEOWEB was then confusing with GEOWEB, which had
already been used in Canada;
b. 25
October 2010: the date the NEOWEB trade-mark was
registered, as it was confusing with the trade-mark GEOWEB which had
already been registered (section 18(1)(a) of the Act); and
c. 4
February 2011: the date of these proceedings because as of that
date, the trade-mark was not distinctive within the meaning of sections 2 and
18(1)(b) of the Act.
[14]
Although
there is some evidence of use of the NEOWEB trade-mark in Canada between
2007 and 2011, I consider such evidence to be marginal and of little value when
it comes to determining whether or not the NEOWEB trade-mark is
confusing with the GEOWEB trade-mark, within the meaning of section 6 of
the Act. No distinction is to be drawn, in this case, between 2007 and 2011.
[15]
The
issue is whether, in accordance with section 6 of the Act, the use of both
trade-marks would likely lead to the inference that the wares or services
associated therewith were manufactured, sold, leased, hired or performed by the
same person, whether or not the wares or services of the same general class. In
this instance, the wares are of the same general class.
[16]
What
is to be considered is set out in section 6(5) of the Act:
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(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.
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(5) En décidant si des
marques de commerce ou des noms commerciaux créent de la confusion, le
tribunal ou le registraire, selon le cas, tient compte de toutes les
circonstances de l’espèce, y compris :
a) le
caractère distinctif inhérent des marques de commerce ou noms commerciaux, et
la mesure dans laquelle ils sont devenus connus;
b) la
période pendant laquelle les marques de commerce ou noms commerciaux ont été
en usage;
c) le
genre de marchandises, services ou entreprises;
d) la
nature du commerce;
e) le
degré de ressemblance entre les marques de commerce ou les noms commerciaux
dans la présentation ou le son, ou dans les idées qu’ils suggèrent.
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[17]
We
are guided by three recent decisions of the Supreme Court of Canada, which
remind us that the traditional role of trade-marks is to differentiate the
wares of one from the wares of another: Mattel, Inc v 3894207 Canada Inc,
2006 SCC 22, [2006] 1 S.C.R. 772; Veuve Clicquot Ponsardin v Boutiques Cliquot
Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824; and Masterpiece Inc v Alavida
Lifestyles Inc, 2011 SCC 27, [2011] 2 S.C.R. 387.
[18]
With
respect to confusion, in Masterpiece Mr. Justice Rothstein stated at
paragraph 40:
At the outset of this confusion analysis, it is useful
to bear in mind the test for confusion under the Trade-marks Act.
In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23,
[2006] 1 S.C.R. 824, Binnie J. restated the traditional approach, at
para. 20, in the following words:
The test to be applied is
a matter of first impression in the mind of a casual consumer somewhat in a
hurry who sees the [mark], at a time when he or she has no more than an
imperfect recollection of the [prior] trade-marks, and does not pause to give
the matter any detailed consideration or scrutiny, nor to examine closely the
similarities and differences between the marks.
Binnie J. referred with approval to the words of
Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp.,
[1969] S.C.R. 192, at p. 202, to contrast with what is not to be done — a
careful examination of competing marks or a side by side comparison.
[19]
These
cases warn us that a balance must be struck taking into account the consumer
who may be interested in the wares in question, and the quality of the wares
themselves. The balance to be struck is akin to the “virtue is a mean” philosophy
of Aristotle, Thomas Aquinas and John Locke or, if you prefer, Goldilocks’
porridge which was neither too hot nor too cold. As stated in Mattel at
paragraphs 56 through 58, we should not approach confusion from the point of
view of a careful and diligent purchaser, nor the “moron in a hurry”. We owe
the average consumer a certain amount of credit, and realize that he or she
does not approach every purchase with the same degree of attention. More care
will be taken when buying a car than a tube of toothpaste.
[20]
At
paragraph 67 of Masterpiece, Mr. Justice Rothstein confirmed that
although consumers in the market for expensive goods may be less likely to be
confused, the test is still one of “first impression”. He continued at
paragraph 70:
The focus of this question is the attitude of a
consumer in the marketplace. Properly framed, consideration of the nature
of the wares, services or business should take into account that there may be a
lesser likelihood of trade-mark confusion where consumers are in the market for
expensive or important wares or services. The reduced likelihood of
confusion is still premised on the first impression of consumers when they
encounter the marks in question. Where they are shopping for
expensive wares or services, a consumer, while still having an imperfect
recollection of a prior trade-mark, is likely to be somewhat more alert and
aware of the trade-mark associated with the wares or services they are
examining and its similarity or difference with that of the prior trade-mark.
A trade-mark, as Binnie J. observed in Mattel, is a shortcut for
consumers. That observation applies whether they are shopping for more or
less expensive wares or services.
[21]
Turning
now to section 6(5) of the Act, I consider it safe to eliminate subsections (b),
(c) and (d).
[22]
Apart
from the claim in the GEOWEB application, taking that claim at its face
value, there has been no evidence of further use in Canada. Mr. Erez, P.R.S.’
Chairman, testified that his company had never sold a GEOWEB product here.
However, as aforesaid, it is not clear that it was licensed to sell GEOWEB
products in Canada, or, if it was, whether it was a sole distributor. There is
some evidence of the use of the NEOWEB trade-mark. There was one
shipment of NEOWEB product, attendances at trade shows and the like. At
best, NEOWEB has a slight edge.
[23]
Both
companies are engaged in the same wares, business and trade. P.R.S. claims the
latest version of its product is better, but there is no evidence that it is
appealing to a different, more sophisticated market or that its product is more
expensive.
[24]
In
my opinion, the test for confusion, in this case, is to be found in the
surrounding circumstances, including subsections 5(a) and 5(e). In subsection
5(a), I limit myself to “the inherent distinctiveness of the trade-marks…” as I
am not satisfied that it has been established that either GEOWEB or NEOWEB
is better known than the other.
DISTINCTIVENESS
AND RESEMBLANCE
[25]
In
terms of inherent distinctiveness, and resemblance, both GEOWEB and NEOWEB
are single words composed of a prefix and a suffix. Both have the same
suffix “web”. The only difference in the three letter prefix is that one begins
with a “G” and the other with an “N”
[26]
It
is common ground that “geo…” relates to the earth. Indeed, according to
the Canadian Oxford dictionary it comes from the Greek word meaning “earth”. It
is also common ground that “neo…” means new, also from the Greek. “Web” can be
used in a number of contexts. It is defined as a network of fine threads constructed
by a spider to catch its prey. It may also be a network, such as the World Wide
Web, or a trap as in “web of deceit”.
[27]
Neither
is a computer made-up word, such as Exxon, and as marks cannot be considered as
particularly strong as they may be used in many contexts.
[28]
I
consider neither trade-mark to be inherently distinctive. As both have the same
suffix, we must look to the prefix. However, as aforesaid neither prefix is
particularly distinctive when joined with “web”. As Mr. Justice Cattanach noted
in Conde Nast Publications Inc v Union des éditions modernes (1979), 46
CPR (2d) 183 at paragraph 34, [1979] 3 ACWS 320: “It is axiomatic
that the first word or the first syllable in a trade mark is far the more
important for the purpose of distinction”. See also Ratiopharm Inc v
Laboratoires Riva Inc, 2006 FC 889, 297 FTR 219.
[29]
The
parties also produced evidence that both “geo” and “web” are used by others in
the same industry. In my opinion, a case cannot be made out that a consumer in
the market for GEOWEB wares would think that NEOWEB wares would
come from the same source. The case of Kellogg Salada Canada Inc v Canada
(Registrar of Trade Marks) (CA), [1992] 3 FC 442, 43 CPR (3d) 349, dealt
with an opposition to the trade-mark “Nutri-Vite” for use in association with
cereal and vegetable dry food products to be used as breakfast and snack foods.
The opponents relied on their registration for Nutri-Max and Nutri-Fibre for
health food products. Speaking for the Federal Court of Appeal,
Mr. Justice Stone said at page 455:
The presence of a common element in trade marks has been
held to have an important bearing on the issue of confusion for, as was stated
by the Comptroller General in Re Harrods Ld., supra, at p. 70:
Now it is a well recognized principle, that has to be taken
into account in considering the possibility of confusion arising between only
two trade marks, that, where those two trade marks contain a common element
which is also contained in a number of other trade marks in use in the same
market, such a common occurrence in the market tends to cause purchasers
to pay more attention to the other features of the respective marks and to
distinguish between them by those other features.
He went on to add at page 456:
[…] I think it
may be inferred that consumers of these products are accustomed to making fine
distinctions between the various “Nutri” trade marks in the market-place, by
paying more attention to any small differences between marks. I accept the
appellant's contention that the respondent's marks are weak because they
incorporated a word that is commonly used in the trade.
[30]
It
is my opinion that the trade-marks are distinctive and do not so resemble each
other that their use would be likely to lead to the inference that GEOWEB
and NEOWEB products are manufactured or sold by the same person. This
leads us to other surrounding circumstances. Confusion for the purposes of this
application is defined in section 2 of the Act as meaning “[t]he use of which
would cause confusion…” It is not the use of the trade-mark NEOWEB that
might cause confusion, rather it is the advertising associated therewith.
Whatever the remedy may be, it is not the striking out of the trade-mark
pursuant to section 57 of the Act.
SURROUNDING
CIRCUMSTANCES
[31]
The
following surrounding circumstances have been alleged by one party or the
other:
a. misleading
marketing practices on the part of P.R.S.;
b. actual
confusion;
c. treatment
of the trade-marks in other jurisdictions;
d. family
of marks; and
e. the
opinion of the trade-marks examiner.
a. Marketing
[32]
As
mentioned above, it may well be that P.R.S. has endeavoured to ride the
coattails of such goodwill, if any, that Presto may have with respect with GEOWEB
trade-mark. However, the remedy is not to have the NEOWEB trade-mark
struck out. As I suggested during the hearing, if P.R.S.’ trade-mark was
something like “roadnet”, there would be no possibility whatsoever of
confusion. However there could well be confusion if in advertisements P.R.S.
described “roadbed” as “formerly geoweb”.
b. Actual
confusion
[33]
Presto
alleges a single instance of actual confusion. Mr. Erez, P.R.S.’ Chairman,
testified on cross-examination that no confusion came to his attention. His
inquiries, however, were inadequate.
[34]
The
one instance of alleged actual confusion is to be found in an email from an
unnamed company in an unnamed jurisdiction. It reads:
We are a company which is doing well in the ground
and infrastructure stabilization.
We are familiar with NeoWeb from PRS, and we assumed
that neoweb was the next generation Geocell material, based on GeoWeb.
Can you clarify this to me?
- Is there a relation between PRS and Presto;
- Difference between Geoweb and Neoweb;
[35]
I
am not satisfied that one instance of possible confusion from an unnamed party
in an unnamed jurisdiction in January 2010 constitutes confusion. The email is
attached to an affidavit of Patricia Stelter, Presto’s manager of marketing and
business administration. She states that the email emanates from a Presto
customer, but there is nothing in the email itself to state that that is so.
c. Other
Jurisdictions
[36]
P.R.S.
led evidence that the GEOWEB and NEOWEB trade-marks are both
registered in three other jurisdictions. A trade-mark search was done of 31
different jurisdictions. It established that both marks are registered in Australia, Japan and South Korea. However, no evidence has been led as to the trade-mark law in
those countries.
[37]
Presto
has provided a decision of the Office for Harmonization in the Internal
Market (Trade Marks and Design) – Opposition Division, Opposition No B 1
302 530, dated 27 February 2012. This was an opposition based on the
registration of GEOWEB in the Benelux countries, Czech Republic, Greece, Hungary, Ireland, Italy, Poland, Slovakia, Denmark, France, Germany, Spain and the United Kingdom.
[38]
The
test of likelihood of confusion as set out in the decision is somewhat similar
to section 6(5) of our Act. The decision deals with language used in various
jurisdictions and concluded that the opposition was partially well-founded on
the basis of Presto’s GEOWEB.
[39]
The
key paragraph in the decision is as follows, at pages 13-14:
The goods are partly identical, partly similar and
partly dissimilar. Thee distinctiveness of the earlier marks, as a whole, is
normal and the signs have the same length and vowel sequence, differing only in
their first respective letters. Moreover the marks are composed of visually and
aurally similar prefixes (GEO and NEO) followed by the same term (WEB). Thus,
notwithstanding the different situations of the prefixes, the overall
impression of the signs is very similar, irrespective of the fact that part of
the public may understand the suffix WEB as allusive to the shape of the goods.
The relevant public (professionals in the construction industry) may, in spite
of the higher degree of attention, either directly confuse the marks or even
consider that the goods bearing the contested mark are a new, improved product
line of the opponent.
[40]
Apparently
this decision is in appeal.
[41]
In
any event, although interesting, the reasoning does not accord with that of the
case law I have cited in terms of uniqueness of the words, the importance of
the first syllable and attentiveness to small differences when it comes to weak
trade-marks.
d. Family of
Marks
[42]
Presto
has another “…WEB” trade-mark, AGRIWEB, a name to pitch its product to
the agricultural community. P.R.S. has NEOLOY for use in road building
and the like. Allegedly, the material is better than that used in the first
generation NEOWEB.
[43]
However,
neither is in position to claim exclusivity to “geo” or “neo” in conjunction
with “web”. Although dealing with different sections of the Act, the Federal
Court of Appeal held in the Glenora Distillers International Ltd v The
Scotch Whisky Association, 2009 FCA 16, [2010] 1 FCR 195, that the
Association could not lay claim to “Glen” in association with scotch whisky.
e. Position
of the Trade-Marks Examiner
[44]
Pursuant
to section 37 of the Act, trade-mark examiners act on behalf of the Registrar
of Trade-Marks. The examiner raised the issue of confusion at the time the
application to register the NEOWEB mark was made, but then determined
there was no confusion. The Masterpiece decision teaches us that even in
cases such as this, which is neither an appeal nor a judicial review of a
decision on behalf of the Registrar, that decision is a relevant surrounding
circumstance under section 6(5). Mr. Justice Rothstein said at para 112:
Despite the
fact that the trial judge noted the rejection of Masterpiece Inc.’s
applications at the outset of his reasons, there is no indication that this
evidence was taken into account in his confusion analysis. It is true
that the trial judge was not conducting an appeal or judicial review of the
reasonableness of the decision of the Registrar, owed no deference to the
Registrar’s decision and was certainly not bound by it. However, as a
relevant surrounding circumstance under s. 6(5), I am of the opinion that the
trial judge should have acknowledged the Registrar’s finding, which was diametrically
opposite to his conclusion, in weighing the evidence before him. The
Registrar’s decision supports a finding of likelihood of confusion between
Alavida’s trade-mark and Masterpiece Inc.’s trade-name, and thus the
“Masterpiece the Art of Living” trade-mark.
[45]
Given
the expertise of trade-mark examiners, this is clearly a factor which favours
P.R.S.
CONCLUSION
[46]
Having
reviewed the evidence and the written and oral submissions of the parties, in
my opinion the use of the GEOWEB and NEOWEB trade-marks in Canada
would not likely lead to the inference that the wares associated with the marks
were manufactured or sold by the same person.
ORDER
FOR
REASONS GIVEN;
THIS
COURT ORDERS that
1.
The
application for judicial review is dismissed.
2.
The
whole with costs.
“Sean Harrington”
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