Date: 20110111
Docket: T-869-10
Citation: 2011
FC 18
Ottawa, Ontario, January 11,
2011
PRESENT: THE CHIEF JUSTICE
BETWEEN:
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1459243 ONTARIO INC.
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Applicant
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and
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EVA GABOR INTERNATIONAL, LTD.
and
THE REGISTRAR OF TRADE-MARKS
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Respondents
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REASONS FOR ORDER AND ORDER
[1]
Under s.
45 of the Trade-marks Act, RSC 1985, c T-13 (the Act), the registration
of a trade-mark may be expunged if its use in Canada has not been established during the
relevant three-year period.
[2]
The
parties agree that the Registrar’s decision concerning a request to expunge
under s.45 is usually reviewed on the standard of reasonableness. The parties
also agree that where new evidence that would have materially affected the
decision of the Registrar is filed on an appeal in the Federal Court, the
standard of review is correctness.
[3]
The basic
principles concerning s. 45 have been established in the case law over the past
quarter-century and are not in dispute.
[4]
The
purpose of s. 45 is to provide a simple and expeditious method of expunging
marks which have fallen into disuse. The provision has a public interest
purpose; a person seeking an expungement under s. 45 need not have an interest
in the matter. Section 45 does not finally determine rights between parties. It
is not intended to create an adversarial process to determine complex issues of
fact and law. Such a process is provided for in s. 57 of the Act.
[5]
The burden
of proof is on the applicant to establish use during the relevant time. The
threshold to establish use is relatively low. The applicant need only provide
some evidence beyond a mere assertion that would allow the Registrar or the
Court to conclude that the trade-mark was in use in the normal course of trade.
There is no need or justification for “evidentiary overkill”. Depending on the
circumstances, evidence of a single sale may be sufficient to establish use of
the trade-mark in the normal course of trade. In other words, the owner need
only establish a prima facie case of use.
[6]
There are
three issues in this appeal: (a) is the applicant’s new evidence admissible?
(b) would the new evidence have materially affected the decision of the
Registrar? and (c) is the new evidence sufficient to establish use for the
purpose of s. 45?
Is the new evidence presented
by the applicant on appeal to this Court admissible?
[7]
The new evidence
regarding the use of the trade-mark is found in the affidavit of Leslie Martin,
the applicant’s original and sole president since its incorporation in 2001.
[8]
Mr. Martin
deposed that promotional flyers bearing the trade-mark were both included with
customer orders at the time of shipping, and used by customers to place
subsequent orders for men’s hairpieces during the relevant three year period.
[9]
On
cross-examination, Mr. Martin acknowledged that he was not personally involved
with the packaging or shipping of men’s hairpieces and that he had been
informed by his employees that promotional flyers were included with customer
orders at the time of shipping during the relevant period.
[10]
The
respondent argues that the evidence provided by Mr. Martin is hearsay, and does
not meet the criteria of reliability and necessity to justify its admission: R
v Smith, [1992] 2 S.C.R. 915 (Smith).
[11]
The respondent’s
examination of Mr. Martin established the hearsay nature of his testimony.
Neither party, however, further questioned the deponent concerning the
reliability and necessity of his hearsay evidence.
[12]
Some
portions of Mr. Martin’s affidavit are hearsay. Nevertheless, in the particular
circumstances of this s. 45 proceeding, I would admit his evidence as reliable
and necessary hearsay. A stricter approach to hearsay evidence may be
appropriate under s. 57, where adversarial proceedings are intended to determine
the rights of parties.
[13]
This Court
has in the past accepted the reliability of evidence given from individuals who
operate businesses: Salomon SA v Tricot Exclusive Inc, 2001 FCT
842 at paras. 21 and 23; and Phillip Morris Inc v Imperial Tobacco Ltd, 13 CPR (3d) 289, 1987 FCJ No
26 (TD) (QL). These individuals are presumed to have personal knowledge about the workings of their
businesses, in view of their experience and position.
[14]
Mr. Martin
stated under oath that he informed himself of the workings of his company from
his employees. He attached copies of the relevant promotional flyers to his
affidavit. On my assessment of the record, I find that Mr. Martin’s evidence meets
the criterion of reliability.
[15]
Again, I also
accept the applicant’s submission that Mr. Martin’s hearsay evidence meets the
necessity test for the purpose of a s. 45 proceeding.
[16]
In Smith,
above, the Supreme Court held that the criterion of necessity must be flexibly
interpreted, to encompass diverse situations where the relevant direct evidence
“is not, for a variety of reasons, available” (at paragraph 36), relying on Wigmore
to support the notion of a flexible definition of necessity:
(2) The assertion may be such
that we cannot expect, again or at this time, to get evidence of the same value
from the same or other sources … The necessity is not so great; perhaps hardly
a necessity, only an expediency or convenience, can be predicated. But the
principle is the same.
[17]
To repeat,
s. 45 proceedings are intended to be expeditious and straightforward. Requiring
registrants to submit affidavits from several employees involved in the use of
the trade-mark, in addition to that of the owner, would not be in keeping with
the public interest purpose of s. 45, or consistent with the low threshold to
establish use. Admitting Mr. Martin’s evidence in this case, without requiring
evidence from several employees, is consistent with the summary procedure that
s. 45 is intended to create and with its public interest purpose.
[18]
In summary,
I find that Mr. Martin’s affidavit meets the criteria of reliability and
necessity for this proceeding. Any concerns with respect to the hearsay nature
of his evidence can go to weight, rather than admissibility.
Would the new evidence have
materially affected the decision of the Registrar?
[19]
The
Registrar’s decision hinged on the applicant’s use of the present tense in his
affidavit evidence. The Registrar found that the promotional flyers could
arguably be considered use of the trade-mark, when packaged with customer
orders at the time of shipping. However, because the affidavit evidence was
drafted in the present tense, the Registrar could only conclude that the
practice of including promotional flyers with customer orders at the time of
shipping was in place at the time the affidavit was sworn, and not during the
relevant period.
[20]
In his
affidavit in this Court, Mr. Martin addresses directly the determinative issue
in the Registrar’s decision. His evidence confirms that the promotional flyers
were included with customer orders at the time of shipping during the relevant period.
The new evidence would have materially affected the decision of the Registrar. Accordingly,
the standard of review is correctness, and the Court must decide if the
evidence in this proceeding is sufficient to establish use of the trade-mark
during the relevant period: see Prince v. Orange Cove-Sanger Citrus Assn,
2007 FC 1229 at para. 9.
Is the new evidence sufficient
to establish use for the purpose of s. 45?
[21]
Promotional
material provided to customers at the time of transfer of the wares can
constitute evidence of use of the mark for wares: BMW Canada Inc v Nissan
Canada Inc, 2007 FCA 255 at paragraph 25.
[22]
The
applicant’s trade-mark as registered and as displayed on its promotional flyer
entitled “Fall 2006 Spring 2007 Special” is set out below:
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Mark as registered
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Mark as used on promotional flyer
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[23]
Keeping in
mind the purpose of s. 45 and the low threshold to establish use in a s. 45 proceeding,
I find the applicant’s evidence that its promotional flyer was packaged with
customer orders at the time of shipping during the relevant period is
sufficient to establish use of the trade-mark.
[24]
In my
view, the trade-mark as displayed on the promotional flyer is used in the form
in which it was registered. The unique font is the same. The positioning and
layout of the words are preserved. A principal difference from the mark as
registered is the absence of the surrounding square. Another is the addition of
the letters “XTS” to connote a product model identifier. I find that the
absence of the square and the addition of the letters are only “cautious
variations”: Promafil Canada Ltée v Munsingwear, Inc, 44 CPR (3d) 59, [1992] FCJ No 611 (CA)
(QL). An unaware purchaser would be likely to infer that both versions of the
trade-mark identify the goods as having the same origin: Canada (Registrar of Trade-marks) v CIE
INT Pour l’Informatique CII Honeywell Bull SA, [1985] 1 FC 406 (CA). This particular promotional
flyer associates the wares with the trade-mark. Finally, this specific use of
the trade-mark in this context benefits the applicant.
[25]
The
applicant’s evidence, including the cross-examination, is sufficient to establish that the
trade-mark was used in at least one sale in the normal course of business, in
relation to men’s wigs and hairpieces: Guido Berlucchi & C Srl v Brouilette Kosie Prince, 2007 FC 245 at
paragraph 17.
[26]
Because
only one use of the trade-mark is determinative of this issue, I need not
consider the applicant’s other examples of use.
[27]
At
the hearing, the applicant conceded that there was no evidence of use of the
trade-mark with respect to women’s hairpieces and wigs, and the hair grafting
and hair transplanting services. The parties agree that the applicant must show
use with respect to all of the wares or services specified in the registration:
John Labatt Ltd v Rainier Brewing Co, 80 CPR (2d) 228, [1984] FCJ No 302 (CA)
(QL).
[28]
For
the reasons set out above, all of the services and wares listed in the
registration should be deleted, other than the men’s hairpieces and wigs.
[29]
Accordingly,
an order will issue, in substitution of the Registrar’s decision, to maintain
the registration of the trade-mark but limited to the wares described as men’s
hairpieces and wigs. Costs will be awarded to the applicant as agreed upon at
the hearing in the event of its success.
ORDER
THIS COURT
ORDERS that the
appeal is allowed and:
1. The Registrar’s decision that
registration TMA495,058 be expunged from the Register is set aside;
2. Registration TMA495,058 be
maintained in the Register, but with amendments to delete all wares and
services other than the “men’s hairpieces and wigs” wares;
3. The respondent, Eva Gabor International,
Ltd., shall pay costs to the applicant in the amount of $4,000.
“Allan Lutfy”
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