Date: 20090930
Docket: T-1579-06
Citation: 2009 FC 980
Ottawa, Ontario, September 30, 2009
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
ATOMIC ENERGY OF CANADA LIMITED
Plaintiff
and
AREVA NP CANADA LTD. and SOCIÉTÉ DES
PARTICIPATIONS DU COMMISSARIAT
À L’ÉNERGIE ATOMIQUE
Defendants
REASONS FOR ORDER AND ORDER
[1]
The defendants ask the Court to summarily
dismiss the action of the plaintiff pursuant to Rule 216 of the Federal
Courts Rules. In the alternative, they ask the Court to grant a trial on
the issue of trade-mark infringement alone.
Background
[2]
The plaintiff Atomic Energy of Canada Limited
(AECL) is a Canadian crown corporation. The defendant, AREVA NP Canada Ltd.,
is the domestic subsidiary of the other defendant, Société des Participations
du Commissariat à L’Énergie Atomique, which is majority state-owned. The
defendants will be referred to throughout as AREVA.
[3]
This action was instituted by AECL on August 31, 2006.
In its Further Amended Statement of Claim dated January 8, 2009 AECL claims
that its trade-mark registration No. TMA 160,039 for the trademark:
(the “Flying A Design Mark”) is valid and has been
infringed by AREVA. AECL further claims that AREVA’s trade-mark Registration
No. TMA 651,852 for the trade-mark:
(the “A Design
Mark) is invalid.
[4]
AECL also claims that AREVA has engaged in
passing off contrary to section 7(b) of the Trade-marks Act, R.S.C.
1985, c. T-13, has depreciated the value of its trade-mark contrary to section
22 of the Trade-marks Act, and has infringed its copyright in the Flying
A Design Mark.
[5]
The parties to this action compete in the
provision of nuclear wares and services. All existing nuclear reactors in
Canada use AECL’s CANDU technology. AREVA has never sold a nuclear reactor in
Canada
[6]
AREVA has sold reactor parts and components in
Canada. AREVA’s affiant Steven Hamilton refers specifically to an engineering,
procurement and construction contract AREVA obtained for the ventilation system
at Point Lepreau, Québec. The Court notes that Point Lepreau is not in Québec;
it is in New Brunswick. At the date this motion was filed, AECL and AREVA had both
submitted bids on a tender issued by the Government of Ontario for construction
of a new nuclear installation, referred to as “New Build.”
[7]
AREVA also competes directly with AECL in Canada
in the nuclear steam generator tube cleaning business. AREVA Canada is
currently suing AECL for patent infringement in relation to technology used in
tube cleaning.
[8]
AREVA relies on the evidence of two affiants in
support of its summary judgment motion. Steven Hamilton is Vice-President of
AREVA NP in the United States and was formerly Vice-President of AREVA Canada
(2004-2008), where he was responsible for the promotion and sale of nuclear
reactors and negotiating contracts for nuclear refurbishment services. His affidavit deals with the
length of time the trade-marks at issue have been in
use, the designs of the trade-marks at issue, the nature of AREVA’s wares and services,
differences between AREVA and AECL’s respective technologies, and the nature of
the nuclear industry. AREVA’s second affiant, Dr. John Senders, is a
consulting scientist whose expertise is in the analysis of human perception and
behaviour. His evidence deals with the similarities and differences between
the AREVA and AECL trade-marks, and the possibility of those marks lending
themselves to confusion in the minds of purchasers of nuclear wares and
services.
[9]
AECL has filed five affidavits in response.
William Bohlke is a consultant in nuclear engineering and management with
extensive experience in the nuclear energy business. His evidence deals with
the procurement process in this industry and he comments on the affidavit of
Steven Hamilton. Dale Coffin is Director of Corporate Communications for
AECL. Her affidavit speaks to the AECL trade-mark at issue and its use by
AECL. Ruth Corbin is Managing Partner of CorbinPartners Inc., a marketing
science company. Her evidence is an analysis of the affidavit of Dr. John
Senders. Ida Berger is a Professor of Marketing in the Ted Rogers School of
Business Management at Ryerson University. Her evidence deals with the
“probability of damage” to AECL if AREVA continues to use its mark in
association with the sale and marketing of nuclear wares and services in
Canada. Douglas Brophy is Director, Commercial and Business Operations for
AECL. His evidence deals with confusion. He attests that a Mr. Goldsmith,
Vice President of Nuclear Products for WorleyParsons, a U.S. company, upon
seeing the logos of AECL and AREVA commented on June 3, 2008 “that there must
be some confusion in the nuclear industry given the similarity of the AECL and
Areva logos.”
Issues
[10]
The parties have framed the issues on this motion
in somewhat different terms. The following sets out the issues requiring the
Court’s determination on this motion.
(i)
Whether or not AREVA has established that there
is no genuine issue for trial with respect to AECL’s allegation of trade-mark
infringement, and if not, whether there is nonetheless sufficient evidence to
determine the issue of infringement on this motion;
(ii)
Whether or not AREVA has established that there is
no genuine issue for trial with respect to AECL’s allegation of passing-off,
and if not, whether there is nonetheless sufficient evidence to determine this
issue on this motion; and
(iii)
Whether or not AECL has established that there
is no genuine issue for trial with respect to AECL’s allegation of copyright
infringement, and if not, whether there is nonetheless sufficient evidence to
determine this issue on this motion.
Analysis
[11]
Summary judgment is a valuable tool. As was
observed by the Supreme Court of Canada in Canada (Attorney General) v.
Lameman, 2008 SCC 14 at para. 10, summary judgment prevents claims or
defences that have no chance of success from proceeding to trial, thereby
freeing the time that a court would otherwise spend on the litigation, as well
as reducing the fees and the time that the parties would otherwise have to
incur. On the other hand the Court observed that “it is essential to justice that claims disclosing real
issues that may be successful proceed to trial.”
[12]
Each party to a summary judgment motion has an obligation
to put its best foot forward with respect to the existence or non-existence of
material issues to be tried. However, as the Federal Court of Appeal noted in MacNeil Estate v. Canada (Department of
Indian & Northern Affairs), 2004 FCA 50, [2004] 3 F.C.R. 3, at para. 37: “Nowhere
in the Rules is a responding party required to bring forward sufficient
evidence so that genuine issues for trial may be resolved on a motion
for summary judgment.”
[13]
The apparent ambiguity within Rule 216 as to the
proper order when the Court makes a finding that there is a genuine issue for
trial was considered in MacNeil Estate. The Court of Appeal observed
that on the one hand, a judge who finds a genuine issue for trial is to send
the matter on for trial in the ordinary course but that on the other hand, even
where there is a genuine issue, the motions judge can decide the matter if he
or she is able to find the facts necessary to decide the questions of fact and
law. The Court cautioned that this ambiguity gives rise to the risk of motions
for summary judgment becoming summary trials on affidavit evidence.
[14]
With these principles in mind I turn to consider
the merits of the motion.
(i) Trade-mark Infringement
[15]
In order to succeed in a trade-mark infringement
action, the plaintiff must prove, on a balance of probabilities: (1) that it is
the registered owner of a trade-mark; (2) that the defendant is using an
identical trade-mark or substantially similar trade-mark; and (3) that the
defendant’s use may cause or has caused confusion. Subsection 6(5) of the Trade-marks
Act provides that in determining whether trade-marks are confusing, the
Court is to have regard to (1) the inherent distinctiveness of the trade-marks
and the extent to which they have become known, (2) the length of time the
trade-marks have been in use, (3) the nature of the wares, services or
business, (4) the nature of the trade, and (5) the degree of resemblance
between the trade-marks in appearance or sound or in the ideas suggested by
them. This is not an exhaustive list of factors and the weight to be given to
any factor will vary with “all the surrounding circumstances”.
[16]
AREVA and AECL make the following submissions on
these factors.
[17]
With respect to distinctiveness, AREVA submits
that AECL’s Flying A Design Mark has little inherent distinctiveness; letters
are “weak” marks entitled to a narrow ambit of protection. It further
submits that AECL has not produced evidence that its mark has been used in the
marketing of nuclear reactor products and services so as to acquire
distinctiveness. AECL submits that both AECL’s Flying A Design and AREVA’s A
Design Mark possess equal inherent distinctiveness. It argues that AREVA has
not adduced evidence that its mark has any acquired distinctiveness, whereas
there is evidence before the Court that AECL’s Flying A Design Mark has been
used and is used on virtually all of AECL’s letterheads, business cards,
proposals, invoices, brochures, signage, equipment, trucks, uniforms, hardhats,
products and advertisements.
[18]
With respect to the length of time the marks
have been in use, AREVA submits that although AECL’s Flying A Design Mark has
been registered since the late 1960s, on cross-examination AECL’s witness Dale
Coffin could not attest to the use of the mark since the date of registration.
AECL submits that a mark that has been used for a long period of time may be
presumed to have made a certain impression on consumers and AECL’s Flying A
Design Mark has been used for a significantly longer period of time than
AREVA’s A Design Mark.
[19]
Both parties made significant submissions with
respect to the nature of the wares and services attached to the mark as well as
the nature of the nuclear trade relevant to these marks. AREVA submits that the
“hasty impression” test is not appropriate to the nuclear business because the
relevant consumers undertake a judicious inquiry of the wares or services to be
purchased. They submit that AECL and AREVA sell and service different
types of nuclear reactors and that all existing reactors in Canada are AECL
CANDU reactors. Currently, there is no market in Canada for any of AREVA’s
Nuclear Reactor products related to its light-water reactors. Purchasers
of nuclear reactors, they submit, are familiar with the underlying technology,
and in any event AREVA and AECL market their reactors using the trade-marks EPR
and CANDU / ACR 1000 respectively. All of AECL’s experts acknowledged in
cross-examination that the relevant consumers would not be confused into
purchasing the wrong nuclear reactor.
[20]
AREVA notes that the purchase of a nuclear
reactor is not a regular occurrence in Canada. AECL has not sold a reactor in
Canada in the past decade and AREVA has never sold a reactor in Canada. The
nuclear reactor products and services business is a global business with a
limited number of global competitors who are known to industry players. AREVA
submits that whether the public at large might be confused is completely
irrelevant in the context of a sale of nuclear reactor products and services.
The relevant customers, they argue, are provincial governments and major power
utilities. The market for nuclear products and services is extensively
regulated. Suppliers of safety-related products must be government qualified
and they are audited by CANPAC, a unified industry organization, for quality.
Procurement decisions involve multiple individuals conducting multiple reviews
and approvals over a relatively long period of time. Customers often have
master services agreements with suppliers for the provision of parts and
services, which have been negotiated over a period of years. Nuclear reactor
services that do go out for bid are multi-million dollar contracts. In this
environment, customers are not confused with whom they are dealing.
[21]
AECL submits that it and AREVA are direct
competitors and both compete for the provision of parts and services for CANDU
reactors. In relation to procurement of nuclear products and services, AECL
has adduced evidence from the customer’s perspective, whereas AREVA has not.
William Bohlke’s evidence is that a vendor’s particular technology is only one
factor in procurement decisions. In his experience, a logo can play an
important role in the overall impression of decision makers as to a vendor’s
capabilities. Links to customer’s jurisdiction are equally important. In relation
to Ontario Power’s request for proposal for a “New Build,” it would be
important to be perceived as having experience and a significant presence in
Ontario. Because so many individuals are involved in procurement decisions,
not all of them with a technical expertise, there is a heightened risk of
confusion arising as a matter of first impression.
[22]
AREVA submits that there is an immediate and
obvious difference in the two marks due to the flying atom or ball that appears
at the front of AECL’s Flying A Design Mark. It relies on Anamet, Inc. v.
Acklands Ltd. (1996), 67 C.P.R. (3d) 478 (F.C.T.D.) as authority for the
proposition that the degree of resemblance must be judged discounting the
underlying A’s in common use. As a consequence, they submit, the appearance
and ideas suggested by the two marks is quite different.
[23]
AECL notes that AREVA has admitted that both
marks are stylized A’s and it submits that as a matter of first impression,
therefore, they are very similar.
[24]
Having reviewed the affidavit evidence relied
upon by the parties, as well as the case-law placed before the Court, I agree
with AREVA that of the factors going to confusion enumerated at subsection 6(5)
of the Trade-Marks Act, in this case the nature of the wares, services,
and business, and the nature of the trade, is of primary if not determinative
importance. It is difficult to imagine more sophisticated consumers, and a
more prudent procurement process, than exists in the nuclear power business.
In this context, adopting the point of view of the “somewhat hurried” consumer,
as urged by AECL, does not make sense as there is no such thing as a “hurried
consumer” of nuclear products and services. On the evidence before the Court,
it can be determined at this stage that it is beyond the realm of possibility
that any utility could be confused by the resemblance of the AREVA and AECL
marks into purchasing a reactor from the “wrong” company (as indeed AECL’s
witnesses and its counsel admitted), or services from the “wrong” company. The
lengthy and detailed procurement process that is involved in purchasing the
wares and services of these parties makes that quite simply impossible.
[25]
AECL’s witness William Bohlke describes in
detail the many steps taken in the procurement process in this industry when purchasing
a reactor, refurbishment of an existing reactor or awarding a maintenance
contract. He describes these steps for each of the following stages of the
procurement process: project identification, forming a selection committee, pre-bid
steps, evaluation of proposals including phase II – quantitative assessment and
phase II – qualitative assessment, proposal clarification process, establishing
an overall ranking, and awarding the contract. Accordingly, this is a case
where there is no evidence that has been or could possibly be adduced at trial
that would change the fact that any passing confusion that may arise from the
resemblance of the trade-marks will always and in every case be dispelled
through procurement processes before nuclear wares or services are actually
purchased.
[26]
That said, Mr. Bohlke’s evidence raises an issue
of confusion outside the procurement process. He challenges the assertion of
AREVA’s affiant that even if there were some initial confusion “it is inconceivable
that such a customer could or would continue to be confused once the
procurement process started…” Mr. Bohlke affirms that a logo is associated
with a vendor’s reputation. He writes:
[The] overall
experience with a vendor is shaped not just by direct contact, but also be
seemingly incidental occurrences. Often the color of, or logo on, a hard hat
may be the “identity” of the individual(s) observed in some unsanctioned
behaviour. Similarly, the customer will recognize the presence of a contractor
in the field by the logo or trade-mark on its field trailers or offices.
Finally, some pieces of equipment are branded, and the performance (or lack of
performance) of the piece of equipment can contribute to the overall opinion
formed by the utility of the vendor in question.
In other words,
there is goodwill in marks and there may be confusion by those in the nuclear
industry aside from the procurement process. The suggestion of this witness is
that a Canadian customer of nuclear wares and services could see the AREVA A Design
Mark on say, an engineer’s hard hat, and “wrongly” transfer to AECL whatever
positive or negative associations he has made. This would then permeate his
perception of the brand, which may ultimately influence relationships with vendors
in subtle ways.
[27]
AREVA’s evidence does not speak to this type of
confusion or subtle influence on consumer behaviour; however, when considering
confusion of the two marks, regard must be had to the overall presentation used
by the parties with respect to their marks: United Artists Corp. v. Pink
Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.).
[28]
AREVA’s A Design Mark is used in the first and
last letter of the name AREVA. It is not used alone but is part of or in close
proximity to the name AREVA. AECL filed no evidence that its Flying A Design
Mark appears alone; rather, it appears in close proximity to its corporate mark
AECL/EACL. In short, both marks always appear in concert with the corporate
name or initials. Accordingly, the confusion that Mr. Bohlke suggests may
occur outside the procurement process in my view can only be said to occur if
one applies the wrong test. As Lord Denning said in Newsweek Inc. v.
British Broadcasting Corp., [1979]
R.P.C. 441 at p. 446:
The test is whether the ordinary, sensible members of the public
would be confused. It is not sufficient that the only confusion would be to a
very small, unobservant section of society; or as Foster J. put it recently, if
the only person who would be misled was “a moron in a hurry”.
In this industry,
the fact that Homer Simpson may be confused is insufficient to find confusion.
[29]
Accordingly, I find that AREVA has established
that there is no genuine issue for trial with respect to AECL’s allegation of
trade-mark infringement, and AECL’s claim of trade-mark infringement is
dismissed.
(ii) Passing Off
[30]
Section 7 of the Trade-marks Act codifies
the common law tort of passing-off. AECL pleads, in particular, a violation of
subsection 7(b), which states that no person shall “direct public attention to
his wares, services or business in such a way as to cause or be likely to cause
confusion in Canada, at the time he commenced so to direct attention to them,
between his wares, services or business and the wares, services or business of
another.”
[31]
In order to succeed in an action for
passing-off, relying on subsection 7(b) of the Trade-marks Act, AECL
must prove, on a balance of probabilities:
(i)
that it is the registered owner of a trade-mark;
(ii)
that its trade-mark has goodwill associated with
it;
(iii)
that AREVA is using a sufficiently similar mark;
(iv)
that such use is directed to drawing public
attention to AREVA’s wares, services or business;
(v)
that such use will likely cause or has caused
confusion in Canada (considered at the time AREVA commenced their directed
use); and
(vi)
that actual or potential damage to AECL exists.
[32]
There is no evidence of confusion by customers
of these parties’ wares and services and, for the reasons set out above, I find
that there is no current likelihood of such confusion in Canada.
[33]
Accordingly, I find that AREVA has established
that there is no genuine issue for trial with respect to AECL’s allegation of
passing-off and the claim of passing-off is dismissed.
(iii) Copyright Infringement
[34]
In order to succeed in an action for copyright
infringement, AECL must prove, on a balance of probabilities:
(i)
that the work in which it claims copyright is
original (and pre-dates the alleged infringement);
(ii)
that there has been a copying from that work
without its consent; and
(iii)
that the copying resulted in a substantial
portion of the work being reproduced.
[35]
In order for there to be a copying, there must
be a causal connection between the original and the allegedly copied work. The
plaintiff must lead evidence of actual copying or of the defendant’s access to
the work which, in combination with substantial similarity, can lead to the
inference of copying: Shewan v. Canada (Attorney General) (1999), 87
C.P.R. (3d) 475 (Ont. S.C.J.). AECL has led no evidence of actual copying.
[36]
Substantial similarity is a copy “which comes so
near to the original as to give every person seeing it the idea created by the
original; such similarity creates prima facie evidence of copying”:
Roger T. Hughes, Susan J. Peacock & Neal Armstrong, Hughes on Copyright
& Industrial Design, 2d ed., looseleaf (Markham, ON: LexisNexis, 2009)
§63. However, “the simpler a copyrighted work is, the more exact must be the
copying in order to constitute infringement”: DRG Inc. v. Datafile Ltd.,
[1988] 2 F.C. 243 at 256 (T.D.) aff’d (1991), 35 C.P.R. (3d) 243 (F.C.A.).
[37]
AREVA’s A Design Mark was created in 2001 by a
design firm in France. In response to an undertaking given on examination for
discovery AREVA produced a letter dated November 14, 2008, from Yann Guitton
(Carré Noir), confirming that he created the A design for AREVA in 2001, with
no knowledge of the AECL A design. AECL has offered no evidence to the
contrary. Therefore, even if the AREVA A Design Mark could be said to come so
near to AECL’s Flying A Design Mark as to give every person seeing it the idea
created by the original, AREVA has provided uncontradicted evidence that there
was no copying, thus overcoming any inference to the contrary.
[38]
Accordingly, AREVA has established that there is
no genuine issue for trial with respect to AECL’s allegation of copyright
infringement and its claim must be dismissed.
ORDER
THIS COURT ORDERS AND
ADJUDGES that:
1. The
defendants’ motion for summary judgment pursuant to Rule 216 of the Federal
Courts Rules is granted and the plaintiff’s claim is dismissed; and
2. The defendants are entitled to their costs.
“Russel W. Zinn”
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