Date: 20081002
Docket: T-18-08
Citation: 2008 FC 1104
Ottawa, Ontario, October 2,
2008
PRESENT: The Honourable Mr. Justice Lemieux
BETWEEN:
PARMALAT CANADA INC.
Applicant
and
SYSCO CORPORATION
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
Introduction
[1]
In
this judicial review application, Parmalat Canada Inc. (Parmalat) seeks to set
aside the December 6, 2007 decision of Jean Carrière, a member of the
Trade-marks Opposition Board (the TMOB or the Hearing Officer or the tribunal),
who in the exercise of his delegated authority from the Registrar of
Trade-marks (the Registrar), dismissed Parmalat’s application dated July 25,
2007 for leave to amend its statement of opposition to Sysco Corporation’s
(Sysco) application filed on May 3, 2002 to register the trade-mark BLACK
DIAMOND in association with a number of different wares including various
kitchen utensils such as cutlery, namely, stainless steel table forks, knives
and spoons, as well as chef’s apparel including caps, aprons, pants and
jackets, as well as cooking pots and frying pans distributed to food service
providers for use in serving food. Sysco based its application on its
registration and use in the United States.
[2]
Under
section 40 of the Trade-marks Regulations (the Regulations),
Parmalat needed leave from the Registrar to amend its statement of opposition.
The purpose of the amendment was to add a new ground of opposition.
[3]
This
judicial review application gives rise to the following issues:
1. The
tribunal’s decision being interlocutory should this Court decide this judicial
review application considering the settled jurisprudence that interlocutory
decisions should not be reviewed on appeal or on judicial review unless there
exists exceptional circumstances?
2. If the
decision is to be reviewed, what is the appropriate standard of review?
3. Did the
tribunal commit any reviewable errors?
Background
[4]
Parmalat
is the registered owner of several trade-marks previously used and advertised
in Canada including BLACK
DIAMOND, BLACK DIAMOND & DESIGN, BLACK DIAMOND SPECIALTY SERIES &
DESIGN. BLACK DIAMOND has been registered in Canada since 1933
in association with cheese and food products in the nature of a dip, spread,
fondue or sour cream. BLACK DIAMOND SPECIALTY SERIES & DESIGN was
registered in November 2001 in association with promotional items related to
cheese, namely, T-shirts, sweatshirts and caps.
[5]
Parmalat
filed its statement of opposition on May 4, 2004. That opposition was
based on a number of grounds including confusion with Parmalat’s family of BLACK
DIAMOND trade-marks registered for use, as indicated above, in association with
wares including cheese and related products and promotional items.
[6]
Subsequent
to that filing, Parmalat, in the context of settlement discussions, obtained a
number of extensions of time, on consent, for the filing of its evidence in the
opposition.
[7]
On
June 2, 2006, the Supreme Court of Canada released its decision in Veuve
Clicquot Ponsardin, Maison Fondée en 1772 v. Boutiques Cliquot Ltée, [2006]
1 S.C.R 824 (Veuve Clicquot). This case discussed section 22 of
the Trade-marks Act (the Act) which deals with depreciation of
goodwill.
[8]
After
the release of the Veuve Clicquot decision, discussions between the
parties stalled; Parmalat was required to file its opposition evidence by August
1, 2007 which it did. However, on July 25, 2007, Parmalat also
sought leave to amend its statement of opposition to include as an additional
ground of opposition based upon paragraph 30(i) in combination with subsection
22(1) of the Act on the basis of comments made in Veuve Clicquot.
Parmalat’s counsel stated, in his July 25, 2007 letter to the TMOB, the
amendment had not been filed earlier because of the possibility of settlement.
[9]
The
additional ground of opposition sought by Parmalat is as follows:
“Pursuant to paragraph 38(2)(a) of the
Trade-marks Act, the application does not comply with Section 30(i) of the
Act, because the applicant could not, at the date of filing of the application,
have been satisfied that it was entitled to use the trade-mark in Canada since
such use would be unlawful in that at the date of filing the application, the
applicant was aware of the confusingly similar BLACK DIAMOND trade-marks of the
opponent, due to the extensive use and advertising of those trade-marks in
Canada by the opponent and its predecessors in title in association with a wide
variety of food products, and in that such use was and is likely to have the
effect of depreciating the value of the goodwill attaching to the registered
trade-mark BLACK DIAMOND owned by the opponent and registered under No.
UCA02073, contrary to Section 22(1) of the Act.” [Emphasis mine.]
[10]
I
cite the following relevant provisions of the Act:
· Paragraph 38(2) of the Act
states:
“2) A statement of opposition may be
based on any of the following grounds:
(a)
that the application
does not conform to the requirements of section 30;”
· One of the
section 30 requirements is that a trade-mark application must contain is
spelled out in paragraph (i) namely a statement:
“(i) … that
the applicant is satisfied that he is entitled to use the trade-mark in Canada in association with the
wares or services described in the application.”
· Section 22 of
the Act dealing with depreciation of goodwill reads:
“22.
(1) No person shall use a trade-mark registered by another person in a manner
that is likely to have the effect of depreciating the value of the goodwill
attaching thereto.
(2) In any
action in respect of a use of a trade-mark contrary to subsection (1),
the court may decline to
order the recovery of damages or profits and may permit the defendant to
continue to sell wares marked with the trade-mark that were in his possession
or under his control at the time notice was given to him that the owner of the
registered trade-mark complained of the use of the trade-mark.”
The tribunal’s decision
[11]
After
quoting the text of the amendment sought by Parmalat, the Hearing Officer
stated Parmalat relied on Veuve Clicquot “to support its contention that
a finding of confusion is no longer necessary in order to conclude that there
will be a depreciation of goodwill despite of its solicitors being unaware
of an opposition that has been decided on the basis of a violation of
subsection 22(1) of the Act. In addition to relying on Veuve Clicquot,
Parmalat also relied on the Registrar’s recent decision granting a similar
request on trade-mark application 1,016,055 for the registration of the trade-mark
EMPERESS”.
[12]
He
then framed the issue before him in the following terms:
“Whether section 22 can be
pleaded as a ground of opposition?”
[13]
He
immediately distinguished the EMPERESS decision on the basis the amendment
sought in that case was uncontested and then wrote and concluded in connection
with that case: “the issue whether section 22 can be considered as a ground
for opposition under section 38 of the Act was not raised, debated
by the parties or decided by the Registrar”.
[14]
The
tribunal then embarked upon its analysis. It reasoned as follows:
(a)
Writing: “Section
38(2) of the Act enumerates the possible grounds of opposition. In the
past, references have been made to s. 30(i) to support a ground of
opposition based on a statutory provision outside the boundaries of the Trade-marks
Act. In those instances the opponent pleaded that the applicant could not
have been satisfied that it was entitled to the registration of the trade-mark
applied for as it would contravene a specific provision of another statute, to
name a few: Tobacco Products Control Act, Canada Co-operative
Associations Act, Bank Act, Criminal Code and the Copyright Act.
Therefore, the opponent’s contention is that, at fortiori, the Registrar
should be entitled to determine if the registration of the applicant’s
trade-mark would be in violation of a specific provision of the Trade-marks
Act.”
(b)
Saying: “In
all the cases cited [by Parmalat] wherein a ground of opposition was maintained
on the basis of a statutory provision contained in an Act of Parliament other
than the Trade-marks Act, it was decided on the basis of prima
facie evidence, namely the pertinent provisions of the Statute raised or
the description of the wares in the application” [rather than a finding
that there has actually been a contravention] citing with approval the comments
made by his colleague Jill W. Bradbury in Interactive Design Pty Ltd. v.
Grafton-Fraser Inc. (1998), 87 C.P.R. (3d) 537 “that in the course of
dealing with a section 30(i) ground of opposition it was necessary to consider
whether an opponent had made out a prima facie case of contravention as
opposed to a finding there has actually been contravention, for example, a case
of prima facie copyright infringement, a case of a prima facie finding
of contravention of the Canada Post Corporation Act or a case of a prima
facie breach of the Food and Drugs Act supported the success of a
section 30(i) ground of opposition”.
(c)
Citing the
case of Canada Bankers Association v. Richmond Savings (2000), 8 C.P.R.
(4th) 267 “where the Registrar concluded it could have considered
the ground of opposition under section 9(1)(d) which falls within its
jurisdiction”.
[15]
The
Hearing Officer then commented on Veuve Clicquot in the following terms:
I do not interpret Veuve Clicquot
to support a contention that a new ground of opposition can now be raised under
s. 38(2) of the Act namely that the adoption of the trade-mark applied for
would have the effect of depreciating the goodwill of the opponent’s
trade-mark.
The Supreme Court of Canada in Veuve Clicquot may have issued some
guidelines regarding what needs to be established in order to conclude that
there is depreciation of the goodwill of a trade-mark, but this is not the
issue to be decided in our case. [My underlining.]
[16]
The
tribunal adopted the reasoning of the former Chair of the Trade-marks
Opposition Board in General Foods, Ltd. v. Scott Paper Co. (1981), 62
C.P.R. (2d) 284 who stated as follows:
10
With respect to the alleged grounds of opposition based on the depreciation of
the value of the goodwill attaching to the opponent's registered trade mark, I
would point out that none of the subparagraphs of s-s. 37(2) of the Trade
Marks Act contemplate either of ss. 20 or 22 of the Trade Marks Act
as being grounds of opposition to be adjudicated upon by the Registrar in an
opposition proceeding. Rather, the depreciation of the value of the goodwill
attaching to a registered trade mark is solely a matter to be determined by the
Court, as is the question of the validity of a registered trade mark being
relied upon by an opponent in an opposition proceeding. In this regard, I would
refer to the following comments of Fox in his text entitled The Canadian Law of
Trade Marks and Unfair Competition, 3rd ed. (1972) at p. 342:
The
intention of the Act of 1953 is to accord to the court very broad powers of
discretion in deciding questions of infringement. Any conduct likely to have
the effect of depreciating the goodwill attaching to a trade mark is a matter
left entirely to the discretion of the court and the Act of 1953 quite properly
prescribes no rules for the exercise of the discretion. The answer will depend
upon the facts of each case and the breadth of view brought to bear on modern
commercial questions by any judge called to interpret the section.
11 In
view of the above, I have rejected the grounds of opposition asserted by the
opponent and relating to the depreciation of the value of the goodwill
attaching to the opponent's registered trade mark.
[17]
The
tribunal then concluded in the present case:
Parliament did not intend to empower the
Registrar, in the scheme of opposition proceedings, to inquire on issues of
depreciation of goodwill. In any event it is the status of the mark applied for
that has to be addressed in opposition proceedings, within the scope of the
limited grounds of oppositions listed in s. 38(2), and I find that s. 22 of the
Act is not a proper ground of opposition under s. 38(2) of the Act. Section 22 of the Trade-marks
Act is under the heading VALIDITY AND EFFECT OF REGISTRATION. As such the
opponent may exercise all its rights conferred by the registration of its
trade-mark before the Federal Court as provided by s. 55 of the Act.
[Underlining mine.]
The Veuve
Clicquot Ponsardin decision
[18]
Justice
Binnie wrote the Court’s decision in this case. It is important to note the
Veuve Clicquot case was not an opposition proceeding before the Registrar but
an infringement and expungement action first commenced in this Court. I cite
the following paragraphs of his reasons for judgment under his heading “Likelihood of Depreciation of the Value of
Goodwill”:
38 The conclusion that use of the
trade-marks "in the same area" would not lead to confusion is not an
end to the case. Here,
unlike in Mattel, there is an additional ground of complaint. Section
22(1) provides:
22.
(1) No person shall use
a trade-mark registered by another person in a manner that is likely to have
the effect of depreciating the value of the goodwill attaching thereto.
The
depreciation argument, while it was treated as something of a poor cousin by
the appellant in the courts below, and was not the subject of much evidence,
was brought to the fore in this Court in part due to the intervention of INTA. Nothing
in s. 22 requires a demonstration that use of both marks in the same geographic
area would likely lead to confusion. The appellant need only show that the
respondents have made use of marks sufficiently similar to VEUVE CLICQUOT to
evoke in a relevant universe of consumers a mental association of the two marks
that is likely to depreciate the value of the goodwill attaching to the appellant's
mark.
39 The
s. 22 remedy was introduced by the 1953 amendments to the Trade-marks Act,
and was based on the Report of the Trade Mark Law Revision Committee
(January 1953), chaired by Dr. Harold G. Fox. A member of that committee,
Christopher Robinson, Q.C., a leading intellectual property practitioner, wrote
by way of explanation:
The
trade mark KODAK would be likely to be considerably less valuable to its owner
if it were used by others in connection with a wide variety of other wares even
if these were so unrelated to photographic equipment that nobody would think
that they originated with the trade mark owner.
(C.
Robinson, "The Canadian Trade Marks Act of 1954 -- A Review of Some of Its
Features" (1959), 32 C.P.R. 45, at p. 61)
40 Dr.
Fox himself commented on the new depreciation remedy in the 1956 edition of his
text The Canadian Law of Trade Marks and Unfair Competition (2nd ed.
1956), vol. 1, noting that s. 22 addressed
the
depreciation of the value of the goodwill attaching to the trade mark or,
expressed in different terms, the dilution of the distinctiveness or unique
character of the trade mark. This is quite different from the orthodox type of
infringement ... .
...
Where a well known trade mark is taken by another for use in association with
wares ... in course of time, and with repeated use, the trade mark
diminishes in value just as it diminishes in distinctiveness. [Emphasis
added; pp. 507-8.]
…
46 Section
22 of our Act has received surprisingly little judicial attention in the more
than half century since its enactment. It seems that where marks are used
in a confusing manner the preferred remedy is under s. 20. Equally, where there
is no confusion, claimants may have felt it difficult to establish the
likelihood that depreciation of the value of the goodwill would occur. Be
that as it may, the two statutory causes of action are conceptually quite
different. Section 22 has four elements. Firstly, that a claimant's registered
trade-mark was used by the defendant in connection with wares or services --
whether or not such wares and services are competitive with those of the
claimant. Secondly, that the claimant's registered trade-mark is sufficiently
well known to have significant goodwill attached to it. Section 22 does not
require the mark to be well known or famous (in contrast to the analogous
European and U.S. laws), but a defendant
cannot depreciate the value of the goodwill that does not exist. Thirdly, the
claimant's mark was used in a manner likely to have an effect on that
goodwill (i.e. linkage) and fourthly that the likely effect would be to
depreciate the value of its goodwill (i.e. damage). I will address each element in
turn.
…
69 I am mindful of the fact that the
parties agreed to an order under Rule 153 of the Federal Court Rules, 1998,
SOR/98-106, relieving them of any need to call evidence as to "damages
and accounting of profits flowing from any infringement alleged in this
case", and directing a reference on that issue if liability for infringement
is established. That order applies to the s. 20 claim
("infringement") but it does not extend to the s. 22 claim
("depreciation"). The essence of liability under s. 22 is
precisely the likelihood "of depreciating the value of the goodwill
attaching" to the claimant's trade-marks. The extent of any actual
depreciation might, of course, be left to a reference, but likelihood of
depreciation is one of the elements of the cause of action, and if a
plaintiff (here the appellant) fails to establish likelihood, the s. 22 claim
will fail. The reference was designed to deal with the subsequent [page861]
quantification of s. 20 loss or entitlement, not the necessary conditions
precedent to s. 22 liability. [Emphasis mine.]
[19]
In
Annex A to these reasons, I set out several paragraphs of his reasons for
judgment where Justice Binnie discusses U.S. and E.U.
legislation and jurisprudence on this point.
[20]
In
the balance of his reasons, Justice Binnie discusses the application of the
four constituents to establish entitlement to the benefits of section 22 of the
Act. He concluded the appellant “did not establish in its evidence
the necessary elements to the s. 22 depreciation claim and the courts below
were correct to reject it.”
Analysis
Issue no. 1 – the
interlocutory decision impediment
[21]
It
is settled law that, as a general rule, interlocutory judgments unless there
are special circumstances should not be reviewed on appeal or in judicial
review proceedings. Justice Létourneau wrote the following in Szczecka v. Canada (Minister of
Employment and Immigration) (1993), 116 D.L.R. (4th) 333
(F.C.A.):
…
unless there are special circumstances there should not be any appeal or
immediate judicial review of an interlocutory judgement. Similarly, there will
not be any basis for judicial review, specially immediate review, when at
the end of the proceedings some other appropriate remedy exists. These
rules have been applied in several Court decisions specifically in order to
avoid breaking up cases and the resulting delays and expenses, which interfere
with the sound administration of justice and ultimately bring it into
disrepute.1
[22]
There
are many other cases to the same effect. I cite Zündel v. Canada (Human
Rights Commission), [2000] 4 F.C. 255 (C.A.) and Canada (Minister of
Public Safety and Emergency Preparedness) v. Kahlon, 2005 FC 1000 where my
colleague Justice Tremblay-Lamer wrote the following at paragraph 12:
12 Special
circumstances where, for example, the tribunal's very jurisdiction is at issue
or where the impugned decision is "finally dispositive" of a
substantive right of a party1 are necessary to justify judicial
review of an interlocutory decision. Otherwise, an application to quash or vary
an interlocutory decision will be considered premature.
[23]
The
Federal Court of Appeal recently confirmed in Simpson Strong-Tie Co. v. Peak
Innovations Inc., 2008 FCA 235 that the refusal to amend a statement of
opposition to add a new ground is an interlocutory decision.
[24]
In
my view, there exist special circumstances, in the context of oppositions to
register trade-marks under the Act, which justify, in this case, an
immediate judicial review of a decision not to grant leave to add a new ground
of opposition. The reason for this view is that at the end of an opposition
proceeding, which is an appeal to this Court, under section 56 of the Act
at the first appeal level there does not exist an adequate remedy other than
the course of action taken here by Parmalat.
[25]
The
jurisprudence of this Court in matters of trade-mark oppositions under the Act
is to the effect the Federal Court does not have jurisdiction to deal with an
issue not found in the statement of opposition. At paragraphs 16 and 17 in [1994]
F.C.J. No. 638, McDonald’s Corp. v. Coffee Hut Stores Ltd., Justice
McKeown relying on previous case law of this Court wrote:
16 In
response, counsel on behalf of Coffee Hut Stores argues that this Court has
held that the Trade marks Opposition Board does not have jurisdiction to
deal with an issue not found in the Statement of Opposition. In Imperial
Developments Ltd. v. Imperial Oil Ltd. (1984), 79 C.P.R. (2d) 12 (F.C.T.D.) at
21, the hearing officer rejected the application for registration on each of
the grounds raised in the Statement of Opposition. He went further though and
embarked on matters which were not in the pleadings but which were raised in
the course of oral arguments. Muldoon J. felt that he had exceeded his
jurisdiction; that once he had come to a decision which disposed of the grounds
raised in the Statement of Opposition, he had fulfilled his statutory function.
17 It was then submitted that this Court
has no jurisdiction to entertain issues that were not raised before the
Registrar. In S.C. Johnson & Son Inc. v. Esprit de Corp. (1986), 13
C.P.R. (3d) 235 (F.C.T.D.) at 242, Cullen J. remarked that, although it is
open to the parties to introduce new evidence, it is not open to them to
introduce new issues; that although the appeal is treated as a trial de novo,
it is still an appeal and the Court is limited to those issues raised before
the Registrar. I agree with these submissions. [Emphasis mine.]
[26]
Justice
McKeown’s decision was reviewed by the Federal Court of Appeal at [1996] F.C.J.
No. 774 where in dismissing the appeal it stated it was “in general agreement
with the reasons of the learned trial judge”.
[27]
These
decisions are to the effect Parmalat on a section 56 appeal from a finding of
the TMOB could not raise the section 22 issue (see also Mattel, Inc. v.
3894207 Canada Inc., 2002 FCT 919).
Issue no. 2 – the
appropriate standard of review
[28]
Before
discussing the principles underpinning the standard of review, as recently
restated in Dunsmuir v. New Brunswick, 2008 SCC 9, it is important to
set out allegations of the parties as to the errors attributed to the tribunal
which would warrant this Court’s intervention as this factor will be
significant in determining the proper standard.
[29]
Counsel
for Parmalat argues in deciding not to grant leave to amend its statement of
opposition, the tribunal did so on legal grounds and not in the exercise of the
Registrar’s discretion under section 40 of the Regulations and, in doing
so it committed a number of legal errors, the most important of which is that
it misapprehended the nature of the issue before it as “whether section 22 can
be pleaded as a ground of opposition” rather than asking himself the proper
question, namely, whether he should grant leave to amend the statement of
opposition on proper principles for the grant of leave to amend which are set
out in a Practice Notice relating to the procedure before the Trade-mark
Opposition Board, dated August 19, 1996 and on this point carried forward into
the Practice Notice, dated October 1, 2007 and to answer this question in the
context of what Parmalat had advanced – non-compliance with section 30(i) on
account of a breach of section 22 of the Act and not on what Parmalat
did not advance – whether section 22 can be relied on as a ground of opposition.
[30]
By
misapprehending the issue before him, Parmalat argues, the tribunal erred by
embarking a consideration deciding a question of jurisdiction and applying
legal precedents which had no relevance to what Parmalat was requesting the
tribunal to do.
[31]
Counsel
for Sysco argued the tribunal’s decision was made in the exercise of the
Registrar’s wide discretion under section 40 of the Regulations in
refusing to grant leave to amend a statement of opposition for the purpose of
adding a new ground. She argues the decision was in the interest of justice
between the parties and the tribunal did not proceed on improper and erroneous
principles, nor did it ignore or overlook an important matter.
[32]
Counsel
for Sysco acknowledges that on November 2007, after the submissions could have
been considered closed, Sysco drew to the tribunal’s attention the General
Foods case raising the issue of whether the TMOB had jurisdiction to consider
allegations of depreciation under section 22 of the Act and quoting the
very extract from that case upon which the tribunal ruled it had no jurisdiction
to consider such allegation in an opposition proceeding. Counsel for Parmalat
responded to that submission a few days later stating that in the General Foods
case, the ground of opposition based on section 22 was not tied to paragraph
30(i) of the Act and in any case had been superseded and rendered
academic by the extensive jurisprudence under that paragraph subsequent to 1981
beginning with the Remy Martin case, jurisprudence which was confirmed by this
Court in Canadian Council of Professional Engineers v. John Brooks Co., 35
C.P.R. (4th) 507.
[33]
As
an aside, a review of the submissions of both parties made to the tribunal on
why leave should or should not be granted pursuant to section 40 of the Regulations
shows they were grounded the factors identified in the two Practice Notes
previously referred to namely: (a) the stage of the proceedings; (b) timing;
(c) importance; and (d) prejudice.
[34]
Returning
to the principles elucidated by the Supreme Court of Canada in Dunsmuir
(which reduced from two to three standards of review, correctness or
reasonableness with the third standard of patently unreasonableness being
folded into the reasonableness standard), it is clear at paragraph 53 where the
question is one of fact, discretion or policy, deference will usually apply
automatically which means the standard of reasonableness. Moreover, at paragraph
54, Justices Bastarache and LeBel stated deference “will usually
result where a tribunal is interpreting its own statute …” or where the
tribunal had developed particular expertise in the application of a general
common law or civil law rule in relation to a specific statutory context,
adjudication in labour law being a good example.
[35]
Justices Bastarache and LeBel said at paragraph 55 where existing
jurisprudence has settled the standard of review no extensive standard of
review analysis need be performed. I refer to Justice Rothstein’s, then a
member of the Federal Court of Appeal, in John Labatt Ltd. et al v. Molson
Breweries, a Partnership, [2000] 3 F.C. 145 where in discussing the
standard of review he stated at paragraph 51, albeit in the context of a
section 56 appeal, that the Registrar is owed some deference and his decisions are
to be reviewed on the standard of reasonableness whether they are of fact, law
or discretion within his area of expertise.
[36]
Reading the tribunal’s decision as a whole, I conclude it should
be decided on the basis of the standard of correctness. The tribunal did not
make its decision, in the exercise of discretion, under section 40 of the Regulations.
Nowhere in his decision does he advert to the factors of interest of justice
and others mentioned in the Practice Notices. His reasons show that he rejected
Parmalat’s application for leave to amend its statement of opposition to add
the new grounds, because in his view as a matter of law, the TMOB had no
authority to inquire into issues of depreciation and as a result “found that
section 22 of the Act is not a proper ground of opposition under section
38(2) of the Act”. In my view, it is clear from the tribunal’s
reasons it came to this conclusion not because it felt there were two
reasonable outcomes available but as a matter of absence of jurisdiction which
is reviewable on a correctness standard.
Conclusions
[37]
In
my view, this Court’s intervention is warranted. With the utmost of respect,
the fundamental flaw made by the tribunal which skewed his subsequent analysis
was its misstatement of the issue before it.
[38]
The
issue before him was not whether on a stand alone basis section 22 of the Act
could form the grounds of opposition but rather whether section 38(2)(a) of the
Act could have resorted to section 22 of the Act to sustain an
opposition on the grounds the requirement of section 30(i) were not respected
because, in the particular circumstances of this application for the
registration of the trade-mark BLACK DIAMOND the applicant for registration
Sysco could not have been satisfied that it was entitled to use the trade-mark
in Canada in association with the wares described in the application because
such use would likely to have the effect of depreciating the value attaching
to Parmalat’s registered trade-mark BLACK DIAMOND contrary section 22 of
the Act.
[39]
As
pointed out by Parmalat’s counsel, Parmalat never put on the table the notion,
in this case, section 22 could by itself sustain an independent ground of
opposition.
[40]
This
unfortunate error led the tribunal to ignore relevant jurisprudence cited by
Parmalat as to the scope of section 30(i) and its various applications in terms
of a likely violation of the Act and a violation of other federal
statutes or provincial statutes. It also led the tribunal to take from the
Supreme Court of Canada’s decision in Veuve Clicquot something which
Parmalat did not urge upon the tribunal and to ignore that Court’s contribution
to the law in respect of section 22 of the Act that the application of
that section was decoupled from a finding of confusion (see paragraphs 38, 46
and 69 of Justice Binnie’s decision).
[41]
I
note that in Bojangles’ International, LLC et al v. Bojangles Café Ltd.
(2004), 40 C.P.R. (4th) 553, at pages 561 – 562, the TMOB held that
section 7(b) of the Act was a valid ground of opposition “under the
general principle that the Registrar cannot condone the registration of a mark
if the applicant's use of the mark would violate Federal legislation”.
[42]
Counsel
for Parmalat submitted that, if I came to the conclusion the tribunal erred, I
should “consider the matter de novo”. I cannot accept this submission. A
de novo consideration is appropriate on a section 56 appeal under the Act.
It is not an appropriate course of action under section 18.1 of the Federal
Courts Act where paragraph 18.1(3)(b), dealing with the powers of
the Federal Court reviewing a decision may, “… set aside and refer back
for determination in accordance with such directions as it considers to be
appropriate …” such a decision. There are circumstances where a directed
reference back might be warranted but such is not the case here (see Pacific
Pants Company Inc. et al v. the Minister of Public Safety and Emergency
Preparedness, 2008 FC 1050).
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that this judicial review is allowed with costs,
the tribunal’s decision of December 6, 2007 is set
aside and the application of Parmalat for leave to amend its statement of
opposition in application no. 1,139,676 to include an additional ground of
opposition described in 9 of these reasons is referred back to the Trade-mark
Opposition Board for reconsideration by a different member taking into account
these reasons.
“François
Lemieux”
_____________________________
Judge
ANNEXE A
41 In
the United States, the House of Representatives reported in 1995 on a similar
remedy (labelled "anti-dilution") added by way of amendment to the
U.S. Trademark Act of 1946 (the Lanham Trade-Mark Act, 15
U.S.C.A. ss. 1051 et seq.):
The
provision is intended to protect famous marks where the subsequent,
unauthorized commercial use of such marks by others dilutes the distinctiveness
of the mark... .
Dilution
does not rely upon ... likelihood of confusion... . Rather, it applies when the
unauthorized use of a famous mark reduces the public's perception that the mark
signifies something unique, singular, or particular.
(Federal
Trademark Dilution Act of 1995, H.R. Rep. No. 104-374 (1995), reprinted in
1995 U.S.C.C.A.N. 1029, at p. 1030)
42 While
the text of the U.S. Lanham Trade-Mark Act is
different from s. 22, the following comment in the American Restatement also
provides sensible guidance:
[I]n
apparent recognition that broad interpretation of the statutes would undermine
the balance between private and public rights reflected in the traditional
limits of trademark protection, the courts have continued to confine the cause
of action for dilution to cases in which the protectable interest is clear and
the threat of interference is substantial.
(Restatement
(Third) of Unfair Competition s. 25 cmt. b (1995))
43 In 2003, the U.S. Supreme Court denied
the anti-dilution remedy to Victoria's Secret, the women's lingerie chain,
which had sued VICTOR'S LITTLE SECRET, an adult novelty store selling
"tawdry merchandise": Moseley v. V Secret Catalogue, Inc., 537
U.S. 418 (2003). Under the federal Act, as it then stood, proof of actual harm
rather than just likelihood (as under our Act) was required. The court
commented however that
at
least where the marks at issue are not identical, the mere fact that consumers
mentally associate the junior user's mark with a famous mark is not sufficient
to establish actionable dilution... . "Blurring" is not a necessary
consequence of mental association. (Nor for that matter, is
"tarnishing.") [pp. 433-34]
Equally, in my
opinion, a mental association of the two marks does not, under s. 22,
necessarily give rise to a likelihood of depreciation. (A bill in the U.S. to reduce the threshold to likelihood has been enacted by
Congress and awaits the President's signature. See Trademark Dilution
Revision Act of 2006, H.R. 683, 109th Cong. (2006).)
44
A
similar anti-dilution remedy is also contemplated by arts. 4 and 5 of the First
Council Directive of the European Communities (89/104/EEC) [page851] dated
December 21, 1988 and implemented for the European Union through Council
Regulation (EC) No. 40/94 dated December 20, 1993. Called an
"anti-detriment" remedy in the United Kingdom, it is found in ss. 5
and 10 of the Trade Marks Act 1994 (U.K.),
1994, c. 26. The courts in the United Kingdom have been sparing in their award
of this remedy, as is illustrated by Mastercard International Inc. v.
Hitachi Credit (UK) Plc, [2004] EWHC 1623 (Ch.) (confirming the dismissal
of Mastercard's opposition to the trademark Credit Master for a credit card); Pebble
Beach Co. v. Lombard Brands Ltd., [2002] S.L.T. 1312, [2002] ScotCS 265
(refusing to grant a preliminary injunction against whisky makers using the
trademark "Pebble Beach" when the owners of the famous American golf
course claimed these marks were detrimental to their own); DaimlerChrysler
AG v. Alavi, [2001] R.P.C. 42, [2000] EWHC Ch 37 (where the court rejected
the claim of Mercedes-Benz against the defendant's MERC trade marks, used in
association with a clothing and shoe business), and Baywatch Production Co.
v. Home Video Channel, [1997] F.S.R. 22 (Ch.) (where the court found that
the broadcasting of "Babewatch", which contained sexually explicit
material, was not detrimental to the "Baywatch" trade mark).
45 The depreciation or anti-dilution remedy
is sometimes referred to as a "super weapon" which, in the interest
of fair competition, needs to be kept in check. In his leading six-volume U.S. treatise on trademark law, Professor J. T. McCarthy writes
in terms that, substituting depreciation for dilution, are directly applicable
to this case:
Even
the probability of dilution should be proven by evidence, not just by
theoretical assumptions about what possibly could occur or might happen... .
the courts should separate any anti-dilution claim into its discrete [page852]
elements and rigorously require a showing of proof of those elements.
(McCarthy
on Trademarks and Unfair Competition,
vol. 4 (4th ed. (loose-leaf), s. 24:67.1, at p. 24-136)
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