Date:
20130214
Docket:
T-1260-12
Citation:
2013 FC 156
Ottawa, Ontario, February 14, 2013
PRESENT: The Honourable Mr.
Justice Phelan
BETWEEN:
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SAN MIGUEL BREWING
INTERNATIONAL LIMITED
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Applicant
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and
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MOLSON CANADA 2005
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
I. INTRODUCTION
[1]
This
appeal concerns the refusal by a member [Member] of the Trade-marks Opposition
Board [Board] to register the trade-mark RED HORSE and the design because of
the likelihood of confusion with the trade-mark BLACK HORSE.
[2]
The
potential for the use of phrases such as “this is a horse of a different
colour” or equine and beer jokes jump out at one. The Court will refrain from
such frivolities for this is a case about beer and a case of beer is a serious
matter.
[3]
This
matter is generally governed by s 6 and s 12 of the Trade-marks Act, RSC
1985, c T‑13 [Trade-marks Act], in particular ss 6(1), 6(2),
6(5)and 12(1)(d).
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6. (1) For the
purposes of this Act, a trade-mark or trade-name is confusing with another
trade-mark or trade-name if the use of the first mentioned trade-mark or
trade-name would cause confusion with the last mentioned trade-mark or
trade-name in the manner and circumstances described in this section.
(2)
The use of a trade-mark causes confusion with another trade-mark if the use
of both trade-marks in the same area would be likely to lead to the inference
that the wares or services associated with those trade-marks are
manufactured, sold, leased, hired or performed by the same person, whether or
not the wares or services are of the same general class.
(3)
The use of a trade-mark causes confusion with a trade-name if the use of both
the trade-mark and trade-name in the same area would be likely to lead to the
inference that the wares or services associated with the trade-mark and those
associated with the business carried on under the trade-name are
manufactured, sold, leased, hired or performed by the same person, whether or
not the wares or services are of the same general class.
(4)
The use of a trade-name causes confusion with a trade-mark if the use of both
the trade-name and trade-mark in the same area would be likely to lead to the
inference that the wares or services associated with the business carried on
under the trade-name and those associated with the trade-mark are
manufactured, sold, leased, hired or performed by the same person, whether or
not the wares or services are of the same general class.
(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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6. (1) Pour
l’application de la présente loi, une marque de commerce ou un nom commercial
crée de la confusion avec une autre marque de commerce ou un autre nom
commercial si l’emploi de la marque de commerce ou du nom commercial en
premier lieu mentionnés cause de la confusion avec la marque de commerce ou
le nom commercial en dernier lieu mentionnés, de la manière et dans les
circonstances décrites au présent article.
(2)
L’emploi d’une marque de commerce crée de la confusion avec une autre marque
de commerce lorsque l’emploi des deux marques de commerce dans la même région
serait susceptible de faire conclure que les marchandises liées à ces marques
de commerce sont fabriquées, vendues, données à bail ou louées, ou que les
services liés à ces marques sont loués ou exécutés, par la même personne, que
ces marchandises ou ces services soient ou non de la même catégorie générale.
(3)
L’emploi d’une marque de commerce crée de la confusion avec un nom
commercial, lorsque l’emploi des deux dans la même région serait susceptible
de faire conclure que les marchandises liées à cette marque et les
marchandises liées à l’entreprise poursuivie sous ce nom sont fabriquées,
vendues, données à bail ou louées, ou que les services liés à cette marque et
les services liés à l’entreprise poursuivie sous ce nom sont loués ou
exécutés, par la même personne, que ces marchandises ou services soient ou
non de la même catégorie générale.
(4)
L’emploi d’un nom commercial crée de la confusion avec une marque de
commerce, lorsque l’emploi des deux dans la même région serait susceptible de
faire conclure que les marchandises liées à l’entreprise poursuivie sous ce
nom et les marchandises liées à cette marque sont fabriquées, vendues,
données à bail ou louées, ou que les services liés à l’entreprise poursuivie
sous ce nom et les services liés à cette marque sont loués ou exécutés, par
la même personne, que ces marchandises ou services soient ou non de la même
catégorie générale.
(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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12. (1) Subject to section 13, a
trade-mark is registrable if it is not
(a)
a word that is primarily merely the name or the surname of an individual who
is living or has died within the preceding thirty years;
(b)
whether depicted, written or sounded, either clearly descriptive or
deceptively misdescriptive in the English or French language of the character
or quality of the wares or services in association with which it is used or
proposed to be used or of the conditions of or the persons employed in their
production or of their place of origin;
(c)
the name in any language of any of the wares or services in connection with
which it is used or proposed to be used;
(d)
confusing with a registered trade-mark;
(e)
a mark of which the adoption is prohibited by section 9 or 10;
(f)
a denomination the adoption of which is prohibited by section 10.1;
(g)
in whole or in part a protected geographical indication, where the trade-mark
is to be registered in association with a wine not originating in a territory
indicated by the geographical indication;
(h)
in whole or in part a protected geographical indication, where the trade-mark
is to be registered in association with a spirit not originating in a
territory indicated by the geographical indication; and
(i)
subject to subsection 3(3) and paragraph 3(4)(a) of the Olympic and
Paralympic Marks Act, a mark the adoption of which is prohibited by
subsection 3(1) of that Act.
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12. (1) Sous réserve de
l’article 13, une marque de commerce est enregistrable sauf dans l’un ou
l’autre des cas suivants :
a) elle est constituée d’un mot
n’étant principalement que le nom ou le nom de famille d’un particulier
vivant ou qui est décédé dans les trente années précédentes;
b) qu’elle soit sous forme
graphique, écrite ou sonore, elle donne une description claire ou donne une
description fausse et trompeuse, en langue française ou anglaise, de la nature
ou de la qualité des marchandises ou services en liaison avec lesquels elle
est employée, ou à l’égard desquels on projette de l’employer, ou des
conditions de leur production, ou des personnes qui les produisent, ou du
lieu d’origine de ces marchandises ou services;
c) elle est constituée du nom,
dans une langue, de l’une des marchandises ou de l’un des services à l’égard
desquels elle est employée, ou à l’égard desquels on projette de l’employer;
d) elle crée de la confusion avec
une marque de commerce déposée;
e) elle est une marque dont
l’article 9 ou 10 interdit l’adoption;
f) elle est une dénomination dont
l’article 10.1 interdit l’adoption;
g) elle est constituée, en tout
ou en partie, d’une indication géographique protégée et elle doit être
enregistrée en liaison avec un vin dont le lieu d’origine ne se trouve pas
sur le territoire visé par l’indication;
h) elle est constituée, en tout
ou en partie, d’une indication géographique protégée et elle doit être
enregistrée en liaison avec un spiritueux dont le lieu d’origine ne se trouve
pas sur le territoire visé par l’indication;
i) elle est une marque dont
l’adoption est interdite par le paragraphe 3(1) de la Loi sur les marques
olympiques et paralympiques, sous réserve du paragraphe 3(3) et de
l’alinéa 3(4)a) de cette loi.
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II. FACTS
[4]
The
Applicant, a corporation based in the Philippines, filed an application in 2005
to register the trade-mark RED HORSE MALT LIQUOR & Horse Head Design for
use in association with beer, ale, pilsner, stout, bock and malt beverages. The
description of wares was later changed so as to delete malt beverages.
[5]
The
Respondent opposed the trade-mark application on the basis of its ownership of
a number of trade-marks that include the words BLACK HORSE. That trade-mark was
issued originally by the Newfoundland trade-mark authorities in approximately
1922. The mark has been used continuously since then where the primary market
for BLACK HORSE ale remains the Province of Newfoundland and Labrador.
[6]
The
Applicant filed affidavit evidence concerning trade-mark registrations (with
design) for LE CHEVAL BLANC, FLYING HORSE, GOLDEN HORSESHOE PREMIUM LAGER and
IRON HORSE. There was also evidence that various provincial liquor commissions
and the Beer Store had listings for RED HORSE, BLACK HORSE, IRON HORSE BROWN,
LE CHEVAL BLANC, GOLDEN HORSESHOE and IRONHORSE. The Applicant also filed an
affidavit from the Manager of United Brands in Canada, the importing agent for
the Applicant, showing beer sales in Alberta and British Columbia.
[7]
The
Respondent filed two affidavits of an articling student who had searched the
Canadian Intellectual Property Office database for registrations for the
Respondent and searched the internet for HORSE in association with beer and
brewed alcoholic beverages and for RED BEER and RED ALE. The final affidavit
was from the Director of Intellectual Property at Molson confirming the series
of registrations that include the words BLACK HORSE and the history and market
thereof. Between 2000 and 2008 Molson sold in excess of 150,000 hectolitres of
BLACK HORSE and spent $13 million in advertising the brand.
[8]
There
were no cross-examinations on the affidavits although the Respondent attacked
the admissibility of some of the affidavits.
[9]
The
Board decision focused on whether the RED HORSE trade-mark and design were, in
accordance with s 12(1)(d), confusing with a registered trade-mark,
BLACK HORSE. The design marks were not in issue; only the words.
[10]
The
Member canvassed the “surrounding circumstances” set out in s 6(5).
[11]
On
the issue of inherent distinctiveness, the Member concluded that RED HORSE has
a greater degree of distinctiveness principally because of RED HORSE’S design
feature.
[12]
With
regard to the extent to which each mark is known, the Member found that BLACK
HORSE, in use since 1922, was better known and that the quantity of RED HORSE
sales is insignificant to those of BLACK HORSE.
[13]
Because
BLACK HORSE has been in use since 1922 and RED HORSE only since 2005, the issue
of length of time which the marks have been in use favoured BLACK HORSE.
[14]
On
the matter of nature of ware, business and trade, since the channels of trade
would be the same or overlap, the Member found in favour of BLACK HORSE.
[15]
As
to the critical question of the degree of resemblance between the marks, the
Member found that the most striking portion of the mark was HORSE. The Member
also found that although the Applicant’s design features are noteworthy, they
do not outweigh the significance of the words that dominate the centre of the
mark RED HORSE and the unique word HORSE. Therefore, the Member determined that
the ideas suggested by each mark are similar and the design of resemblance
between the marks favoured the Respondent Molson.
[16]
The
word RED was not considered to be of use in the “likelihood of confusion”
analyses as the Applicant is not the only entity to have used this word in a
trade-mark in relation to beer.
[17]
The
search results of the design of a horse were not pertinent because they were
not similar to the BLACK HORSE mark and there is no evidence that they sound
like BLACK HORSE.
[18]
In
looking at the state of the market-place and the searches directed at HORSE,
BLACK HORSE and RED in association with beer at liquor control commissions and
the Beer Store in Ontario, the Member placed little weight on the market-place
evidence as listing of four third party marks is not much evidence.
[19]
The
Member held that in respect of the absence of evidence of confusion, no adverse
inference can be drawn because the wares are sold at opposite ends of the
country.
[20]
In
concluding the s 12(1)(d) grounds (confusion), the Member also concludes
that BLACK HORSE was well-known in Newfoundland at the material date and its
distinctiveness in one area in Canada is sufficient to negate the other mark’s
distinctiveness in another area.
III. ANALYSIS
[21]
There
are two issues in this appeal:
(1) What
is the standard of review?
(2) Subject
to the applicable standard, is RED HORSE confusing with BLACK HORSE in the
minds of the relevant consumer?
A. Standard of Review
[22]
The
standard of review is affected by the type of new evidence (if any) filed on
the appeal in accordance with s 56(5) of the Trade-marks Act. In the
absence of new evidence, the standard of review is reasonableness (Groupe
Procycle Inc v Chrysler Group LLC, 2010 FC 918, 377 FTR 17).
[23]
However,
where new evidence is filed, it will cause the standard of review to be
correctness where that new evidence is substantial and significant. Mere
regurgitation or supplements of prior evidence would generally be insufficient
to alter the standard of review (Vivat Holdings Ltd v Levi Strauss & Co,
2005 FC 707 at para 27, 276 FTR 40).
[24]
As
summarized by K Gill and R S Jolliffe in Fox on Canadian Law of Trade-marks
and Unfair Competition, 4th ed, loose-leaf, (Toronto: Thomson
Carswell, 2002), at 6-48 [Fox]: “[t]he
mere filing of new evidence on appeal does not necessarily lower the standard
of appeal to one of correctness. The quality of the new evidence must be
considered. The question is to the extent to which the additional evidence has
a probative significance that extends beyond the material that was before the Board.”
Fox goes on to write: “[w]here the
new evidence adds nothing of significance and is merely repetitive of existing
evidence without enhancing its cogency, the standard of review will be whether
the Registrar’s decision was clearly wrong. In such cases, the presence of the
newly filed evidence will not affect the standard of review applied by the
Court on the appeal.”
I accept those statements as
reflective of the law in Canada.
[25]
In
the affidavit of Bhupesh K. Choudhary filed on the appeal (Choudhary 2nd
affidavit), the Applicant addressed a comment in the Member’s decision about
use of RED HORSE in association with the wares and provided updated information
on sales in Canada and its market reach to Manitoba.
This is the type of repetitive
evidence that Fox commented upon as not enhancing cogency and thus not
altering the standard of review.
[26]
The
Applicant also filed an affidavit from Mia Alentajan, Regional Marketing
Services Manager for the Applicant. In that affidavit, amongst other matters
related to sales volumes and country of sales, she attests to the fact that
there are alcoholic beverages sold in Canada which use the word HORSE:
- Iron
Horse Beer in BC and Alberta;
- Golden
Horseshoe Premium Lager, Red Leaf Smooth Red Lager; and
- Dark
Horse Stout.
There was no cross-examination on
this affidavit.
[27]
The
Respondent objected to the affidavit as ambiguous, outside the pertinent dates
and inadmissible as hearsay. The Respondent never says it is inaccurate.
[28]
The
evidence is not ambiguous. The relevant date is when this Court considers the
matter (see Park
Avenue Furniture Corp v Wickes/Simmons Bedding Ltd, 130 NR 223, 37
CPR (3d) 413 at 422 (FCA)). As to hearsay, the affiant attests that she is
personally aware of the situation and gives the source for her awareness. The
Respondent chose not to cross-examine to show absence of knowledge or
unreliability of the basis for the affiant’s knowledge. Any alleged infirmity
due to alleged hearsay is overcome by its reliability and necessity in the
context of these proceedings. As such, I would not strike the evidence if the
Respondent had brought the necessary motion to strike portions of an affidavit.
[29]
The
evidence is material. While it may be arguable that IRON HORSE means a train
engine and GOLDEN HORSESHOE relates to a piece of equipment on a horse, DARK
HORSE is clearly relevant both as to the simple word HORSE and the colour or
colour characteristic. It was not a matter brought to the Board’s attention, it
is material to the decision and it could have (and should have) made a
difference.
[30]
Therefore,
there is new evidence that meets the threshold to change the standard of review
from “reasonableness” to “correctness”.
B. Confusion – RED
HORSE/BLACK HORSE
[31]
The
test for confusion is well-summarized in Masterpiece Inc v Alavida
Lifestyles Inc,
2011 SCC 27 at para 41, [2011] 2 S.C.R. 387 [Masterpiece]. One has to look
at the mark as a whole, not tease out each portion of the mark. One has to
approach “confusion” on the basis of first impression, from the perspective of
the average person who goes into the market. One has to use common sense; in
this case, common sense in relation to a beer consumer. Additionally, the Court
writes in Masterpiece:
83 Neither an expert, nor a court, should tease
out and analyze each portion of a mark alone. Rather, it should consider the
mark as it is encountered by the consumer - as a whole, and as a matter of
first impression. In Ultravite Laboratories Ltd. v. Whitehall Laboratories
Ltd., [1965] S.C.R. 734, Spence J., in deciding whether the words “DANDRESS”
and “RESDAN” for removal of dandruff were confusing, succinctly made the point,
at pp. 737-38: “[T]he test to be applied is with the average person who goes
into the market and not one skilled in semantics.”
…
92 I would endorse these comments about expert
evidence and follow the approach of Spence J. in Ultravite, the House of
Lords in General Electric and the English Court of Appeal in esure.
In cases of wares or services being marketed to the general public, such as
retirement residences, judges should consider the marks at issue, each as a
whole, but having regard to the dominant or most striking or unique feature of
the trade-mark. They should use their own common sense, excluding influences of
their “own idiosyncratic knowledge or temperament” to determine whether the
casual consumer would be likely to be confused.
[32]
In
Mattel, Inc v 3894207 Canada Inc, 2006 SCC 22, [2006] 1 S.C.R. 772, the
Supreme Court accepted the notion of the consumer (who is the litmus test for
confusion) as the “ordinary harried purchaser” – neither the careful diligent
purchaser nor the “moron in a hurry”. The Court also recognized that courts owe
the consumer a certain amount of credit for their intelligence or knowledge.
56 What, then, is the
perspective from which the likelihood of a “mistaken inference” is to be
measured? It is not that of the careful and diligent purchaser. Nor, on the
other hand, is it the “moron in a hurry” so beloved by elements of the
passing-off bar: Morning Star Co-Operative Society Ltd. v. Express
Newspapers Ltd., [1979] F.S.R. 113 (Ch. D.), at p. 117. It is rather a
mythical consumer who stands somewhere in between, dubbed in a 1927 Ontario decision
of Meredith C.J. as the “ordinary hurried purchasers”: Klotz v. Corson
(1927), 33 O.W.N. 12 (Sup. Ct.), at p. 13. See also Barsalou v. Darling
(1882), 9 S.C.R. 677, at p. 693. In Delisle Foods Ltd. v. Anna Beth Holdings
Ltd. (1992), 45 C.P.R. (3d) 535 (T.M.O.B.), the Registrar stated at pp.
538-39:
When
assessing the issue of confusion, the trade marks at issue must be considered
from the point of view of the average hurried consumer having an imperfect
recollection of the opponent’s mark who might encounter the trade mark of the
applicant in association with the applicant’s wares in the market-place.
And
see American Cyanamid Co. v. Record Chemical Co., [1972] F.C. 1271
(T.D.), at p. 1276, aff'd (1973), 14 C.P.R. (2d) 127 (F.C.A.). As Cattanach J.
explained in Canadian Schenley Distilleries, at p. 5:
That
does not mean a rash, careless or unobservant purchaser on the one hand, nor on
the other does it mean a person of higher education, one possessed of expert
qualifications. It is the probability of the average person endowed with
average intelligence acting with ordinary caution being deceived that is the
criterion and to measure that probability of confusion the Registrar of Trade
Marks or the Judge must assess the normal attitudes and reactions of such
persons.
[33]
Applied
to the beer consumer (the relevant “ordinary person” at the bar or beer/liquor
store), I am of the view that the ordinary beer drinker is sensitive to the
names of beers and to what they know and like. The test is premised on the
ordinary beer drinking consumer – not on what might be a legal fiction of the
non-beer drinking life partner who is asked to pick up beer. The following
quotes from Justice Walsh’s decision in Carling O’Keefe Breweries of Canada
Ltd v Anheuser-Busch, Inc, 68 CPR (2d) 1 at 20-21, 1982 CarswellNat 670
(Fed TD), are apt:
Even
though the colours and designs of the two labels are somewhat similar a
purchaser would have to be nearly blind, (or perhaps having consumed so much
beer as to be in the same condition), not to be able to see at a glance from
the label on the bottle or container, that he was getting either Plaintiff's
Standard Lager or Defendant's Budweiser as the case might be.
[…]
The
second major contributor to sales is of course the product itself and the
flavour thereof, as regular beer drinkers will have considerable loyalty to
their favourite brand.
[34]
One
look at the labels of RED HORSE and BLACK HORSE is sufficient to dispel any
notion of confusion between RED HORSE (with just a horse’s head) and BLACK
HORSE (with a horse in profile). However, that is not determinative as this is
not a breach of copyright case. As noted earlier, the Member did not consider
the design features but it is hard to ignore.
[35]
On
the issue of the word marks and confusion pursuant to s 6(2), the question is
whether an ordinary beer drinking consumer, on hearing the words RED HORSE (as
in “Do you have (serve) RED HORSE?”), is likely to think that RED HORSE must be
a beer made by the same company that makes BLACK HORSE.
[36]
There
is no evidence to suggest such confusion and as a matter of common sense, I
conclude that it is unlikely. The Court reaches this same conclusion even if
the test were “reasonableness” even in recognition of the expertise of the
Board.
[37]
The
fact that DARK HORSE is sold without evidence of confusion with BLACK HORSE
undermines any notion that Molson has secured such necessary recognition in
relation to the word HORSE in relation to beer.
[38]
This
is compounded by the existence of CHEVAL BLANC, which, while dismissed as of
limited importance because it might be sold in restaurants, and is thus
considered a different ware, shows that there is no automatic association of a
horse with the Molson product.
[39]
While
the Member did a detailed analysis of each aspect of the competing marks, the
Member never stepped back and asked the fundamental question about confusion in
accordance with the test in Masterpiece, above, against the consumer as
pictured in Mattel, above, and Carling, above.
[40]
The
Board did not consider that what it was doing was, in effect, granting to
Molson a trade-mark monopoly over the word HORSE of any colour (green, golden,
brown, blue, etc.) in relation to beer. The breadth of that monopoly is
unreasonable.
[41]
For
all these reasons, the Board’s decision is neither correct nor reasonable.
IV. CONCLUSION
[42]
Therefore,
this appeal will be granted. The Board’s decision will be set aside and
Application No. 1,246,654 will be allowed.
[43]
The
Applicant shall have its costs at the usual scale.
JUDGMENT
THIS
COURT’S JUDGMENT is that the appeal is granted. The decision of
the Trade-marks Opposition Board is set aside, and Application No. 1,246,654 is
allowed. The Applicant is to have its costs at the usual scale.
“Michael L. Phelan”
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