Date: 20130611
Docket: T-697-02
Citation: 2013
FC 626
Montreal, Quebec, June
11, 2013
PRESENT: The
Honourable Mr. Justice Martineau
BETWEEN:
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OSMOSE-PENTOX INC.
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Plaintiff
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and
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SOCIÉTÉ LAURENTIDE INC.
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Defendant
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REASONS FOR JUDGMENT AND JUDGMENT
[1]
This
trade-mark infringement action affords a unique opportunity to examine the
scope of protection conferred by the Trade-marks Act, RSC 1985, c T-13
[Act] to the owner of a registered trade-mark that consists of a set of letters
and an unseparated design, which read and viewed as a whole forms a single
word. The trade-mark in issue [conservator design-mark] is:
[2]
Facts
leading to this proceeding are either admitted or flow from documents jointly
filed by the parties. A few weeks prior to the trial, the parties agreed not to
have any expert witnesses heard. All these efforts reduced the length of the
hearing as did the defendant’s helpful admissions at the trial.
[3]
At
trial, three witnesses were called by the plaintiff: Ms. Suzanne Maggi,
Director of Commercialization, RONA Inc. [RONA], and the two principals of the
plaintiff, Mr. Alex Gabanski and Mr. George Gabanski [the Gabanski brothers]
Mr. André Buisson testified on behalf of the defendant.
[4]
Relevant
portions of the admissions and testimonies are summarized below.
Osmose-Pentox
[5]
The
present plaintiff, Osmose-Pentox Inc., manufactures and sells wood coatings and
wood preservatives. The plaintiff’s wares are sold mainly under the trade-marks
PENTOX®, PENTOX® COP-R-NAP®, PENTOX® ZIN-K-NAP®, and since February 1996, in
the case of wood primer-sealers, PENTOX® 
®.
[6]
Mr.
Alex Gabanski, who has a chemistry degree, provided a general overview of the
origin and evolution of the small family run business, which began as a
privately owned business in the 1930s with a number of shareholders that
included his father. He also spoke about the technical aspects of the products
they manufacture and sell. His older brother, Mr. George Gabanski, who has
degrees in engineering as well as a Master of Business Administration (MBA),
also spoke about the history of the family business and provided more focus on
the commercial aspects of the company rather than the technical aspects of the
product.
[7]
The
plaintiff operates from Montreal, Province of Quebec, with less than six
employees, and its products are sold across Canada. Over the years the
plaintiff has developed a particular expertise in wood preservatives and
various coatings. As Mr. Alex Gabanski testified, the plaintiff’s particular
product that is the focus of the present action is a primer-sealer product that
the plaintiff began to sell sometime in 1996, that is, after the conservator
design-mark had been registered.
[8]
Mr.
Gabanski explained that their primer-sealer functions essentially as a wood preservative.
However, by eliminating pesticide from the composition of their primer-sealer, the
plaintiff did not have to register the new product with the Health Canada Pest
Management Regulatory Agency [PMRA] and a third-party intermediary wishing to
market the product to consumers would not have to acquire a license either. Accordingly,
the new product is not regulated under the Pest Control Products Act, SC
2002, c 28 (repealing Pest Control Products Act, RSC 1985, c P-9)
[PCPA].
[9]
Mr.
Gabanski also testified that the visual characteristics of the plaintiff’s
primer-sealer additionally enabled it to corner a niche market because the
“CONSERVATOR” product was transparent. When the plaintiff’s primer-sealer came
onto the market, the plaintiff explained that other primer-sealers, when
applied to wood, would provide an opaque white coating. However, the
plaintiff’s primer-sealer provided a transparent coating – with a choice of a
clear coating or a transparent-brown coating.
[10]
Reproduced
below, in colour, is the front panel of the label of the clear wood
primer-sealer sold by the plaintiff:
[11]
The
label for the brown primer-sealer sold by the plaintiff has the same general
features, except that the background is light brown instead of yellow. The
plaintiff has continued to own the conservator design-mark which was
registered in Canada on March 26, 1996, in respect of “surface coatings, namely
coatings for the protection of wood.” The particularity of the “CONSERVATOR”
product manufactured by the plaintiff is that it contains no pesticide. It is
still sold today in Canada.
Société Laurentide
[12]
The
present defendant, Société Laurentide Inc., manufactures a broad range of
products, which notably includes paints, wood coatings, varnishes, enamels and
diluents, lacquer solvents and varnishes. Between 2000 and 2003, the defendant’s
operations had about three hundred and fifty employees. In February 2012, the
defendant sold their paint division.
[13]
Mr.
Buisson, who has worked for the company all his life, described in his
testimony the history of the family run business and its product lines sold
under the trade-marks, PERMATEC, DUROTEC, NATIONAL and LAURENTIDE.
[14]
The
defendant first used the trade-mark PermaTec in respect of coatings labelled as
“PermaTec PROTECTOR♦PROTECTEUR” [the protector
product] available in premixed colours or made-to-order semi-transparent
colours for exterior wood. These tinted coatings, which prevent exterior wood from
chipping, blackening, splitting and swelling, were a success and they are still
sold today.
[15]
Mr.
Buisson also testified that the protector products now include the “PermaTec PLUS
PROTECTOR♦PROTECTEUR”, which
incorporates Teflon. The “Protector” line of products bear a common theme on
their labels with PermaTec displayed prominently and the “Protector” appearing
below and sometimes including additional words that further specify what the
product is intended to “protect”; for example, “Protector for Concrete and
Masonry/Protecteur pour béton et maçonnerie”.
[16]
In
the late nineties, the defendant expanded the PermaTec
group
of wares by adding a “Nettoyeur”, a “Préservatif”, a “Conservateur pour bois”,
and an “Éclaircissant”. The labels of the PermaTec group of products are easily
recognizable and are very similar-looking in terms of font, design, and colour
(green and white background). The PermaTec labels consist of two gold lines,
one at the top and the other at the bottom of the labels, and are covered by a
green wood fence under which we find the PermaTec trade-mark in
white letters over a black rectangle.
Alleged
infringement
[17]
The
Gabanski brothers testified that they were both very surprised and shocked to
discover, sometime in 2000, that the defendant was selling and delivering to
RONA stores, containers of clear and brown primer-sealers for exterior wood
[the wares in issue] on which appeared, just under the name PermaTec the words
“CONSERVATEUR
POUR
BOIS”
and “WOOD
CONSERVATOR”:
[18]
The
plaintiff immediately saw this particular use of the words “CONSERVATOR” and “CONSERVATEUR” as a clear
infringement of the plaintiff’s exclusive right to use the conservator
design-mark. This discovery was particularly distressing as RONA was their
major client at the time. While the loss of sales was a blow to the plaintiff’s
business, Mr. George Gabanski explained that they were also cautious in their
next steps so as to avoid unnecessarily damaging their commercial relationship
with RONA.
[19]
It
will be helpful to interject at this point with a brief summary of RONA’s
corporate structure as it applies to the facts of this case. Ms. Maggi
explained in her testimony that RONA’s operations involve three basic
categories of stores: corporate, franchise, and affiliate stores. The documents
produced in evidence relating to RONA, as well as Ms. Maggi’s testimony, speak
to RONA’s corporate and franchise stores. The affiliates, however, are
generally owned and operated independently of RONA’s head office in Boucherville , Quebec.
[20]
In
May 2001, the plaintiff sent a letter to RONA’s president requesting that they
stop selling the wares in issue. The alleged infringement actions continued
even after Mr. Buisson was informed by RONA of this letter. In their
testimonies, the Gabanski brothers suggested that the defendant’s actions
demonstrated an intent to act unfairly toward the plaintiff. Mr. Alex Gabanski
notably testified that in October 2001 the defendant attempted to obtain from
the plaintiff the material safety data sheets (MSDS) for a product unrelated to
this proceeding: the PENTOX COP-R-NAP (green). Mr. George Gabanski accused RONA
of colluding with the defendant and ousting the plaintiff from the marketplace
by replacing the plaintiff’s products with the defendant’s products, including
their wood primer-sealer.
[21]
By
formal notice dated March 6, 2002, the defendant was required to refrain from
using the alleged infringing words “CONSERVATEUR” and “CONSERVATOR”.
The
present action was commenced in Spring 2002.
[22]
It
is not challenged that the defendant sold the wares in issue (product code
8534) bearing the offending labels from between at least 2000 to January 31,
2003. As it turned out, the plaintiff lost most of its business with RONA,
although a few independent retailers affiliated with RONA have continued to buy
their products to this day. This is the case of Le Rénovateur St-Patrick and
Quincaillerie Notre-Dame, located in Montreal, which are independently owned
and carry both the Pentox and PermaTec line of products.
Developments following
the institution of the present action
[23]
On
January 31, 2003, an interlocutory injunction was issued by the Court,
restraining the defendant, its officers, directors, shareholders, employees,
associates, representations, agents, servants, or any other person having any
cognizance of same from, directly or indirectly selling all primer-sealer for
wood products bearing the words “CONSERVATEUR” and/or “CONSERVATOR” and/or “CONSERVATEUR POUR
BOIS”
and/or “WOOD CONSERVATOR” [the offending
words] until a final judgment is rendered on the merit.
[24]
The
defendant was unable to have the interlocutory injunction lifted. That said, the
defendant insists that the offending labels were subsequently changed in order
to adhere to the interlocutory injunction while, as explained by Mr. Buisson at
trial, additional steps were taken with RONA and other major clients to ensure
that the offending labels were replaced. I have no reason to doubt his
credibility and good faith.
[25]
Firstly,
the defendant issued a communiqué to advise of the interlocutory injunction and
the legal steps it was taking to address same. Also, and as demonstrated by an
email the defendant produced at the trial, the defendant contacted what appears
to have been a list of its most important clients, including RONA. In this
email, the defendant requested that their products with the offending label be
removed and notified them that a representative would visit stores in the next
three weeks in order to replace their labels so that the products could be put
back on the shelves.
[26]
Secondly,
the defendant effectively changed the offending labels. Mr. Buisson explained
that MédiaVox was in charge of the visual design and the defendant produced a
corresponding receipt for the design work, dated March, 18, 2003 (although the
order for the design was allegedly made right away). Mr. Buisson also explained
that the defendant then had the new labels printed by Imprimerie de la Rive Sud
Ltée and the defendant produced a corresponding receipt for the printing as
evidence, dated February 17, 2003.
[27]
Not
only the words “CONSERVATEUR” and
“CONSERVATOR” were removed
from the offending labels, but the defendant significantly changed its
marketing strategy. The PermaTec “Preservative” line of products which
originally listed the green preservative product (containing pesticide) was
enriched by the addition of the clear and brown primer-sealers. In the new
design for all replacement labels, it turns out that all three products are
listed as “Wood Preservative” and “Préservateur pour le bois”, with the
additional inclusion of a small triangle to indicate which colour is found
inside the container.
[28]
Reproduced
below, in colour, is the front panel of the replacement label, in this case for
the brown primer-sealer:
[29]
It
is interesting to note that the green preservative product sold by the defendant
under the trade-mark PermaTec had previously been listed as “Wood Preservative”
in English, but in French the product had been listed as “Préservatif pour
bois”. Mr. Buisson noted that the rapidity of the label change in February 2003
lead the defendant to gloss over the regulatory requirements necessitated by
listing a product as a preservative. Whether or not this new line of products
was misleading to the customer, since only a close examination of the label would
indicate that the green version included pesticide, is not an issue to be dealt
with by the Court in these proceedings.
[30]
The
plaintiff also accused RONA and the defendant of false advertisement. During
his testimony, Mr. George Gabanski referred to a RONA flyer (exhibit C-1-42)
showing a can of a PermaTec product described as a “Produit de préservation
pour le bois”. Whether the defendant and RONA acted illegally – and this
includes the claim made by the plaintiff that RONA’s advertisement of the
PermaTec wood “preservative” products is misleading – are not relevant. Accordingly,
I allow the objection made by the defendant in respect of this evidence.
[31]
As
aforesaid, the interlocutory injunction issued in January 2003 strictly prohibits
the sale of defendant’s primer-sealers bearing the offending words “CONSERVATOR” and/or “CONSERVATEUR” and/or “WOOD CONSERVATOR” and/or “CONSERVATEUR POUR
BOIS”.
It does not prohibit the sale of the wares in issue which bear product numbers
8534-28L09 (clear .94 l format), 8534-28L19 (clear 3.78 l format), 8534-85L09
(brown .94 l format), and 8534-85L19 (brown 3.78 l format). It does not enjoin
third parties to continue to buy and sell the plaintiff’s products.
[32]
In
passing, the defendant’s primer-sealers for exterior wood (clear and brown),
were discontinued in 2005. Mr. Buisson confirmed at trial that the defendant
has entirely ceased their production. This was exemplified in the documents
produced at trial showing the status and sales by RONA of the wares in issue for
the period beginning in 2002 and extending to 2013. It can be seen that in 2002
the total sales came to $10,572; in 2003 sales decreased slightly to a total of
$9,850; in 2004 they decreased significantly to a total of $1,652; then in 2005
another slight decrease occurred in total sales which brought the total down to
$946; and then in 2006, following the year in which the products were allegedly
discontinued, the total sales came to $67; with the final remaining product
being sold in 2007 with a total of $16 in sales.
[33]
Despite
the fact that the defendant discontinued the production of the wares, this did
not transform into a renewal of the business relationship the plaintiff
previously had with RONA. At about the same time as the documents produced
demonstrate that the defendant’s product was discontinued in RONA stores, the
plaintiff seemingly abandoned any hope of saving their commercial relationship
with RONA. Accordingly, in 2005, the plaintiff instituted a parallel action
against RONA that forwarded substantially the same facts as are before the
Court today (Osmose-Pentox Inc v Rona Inc, statement of claim filed Dec
19, 2005, T-2227-05). For all intents and purposes, this former action was
suspended pending final determination of the present action, although there is
no formal stay order.
[34]
RONA
is not a defendant in this proceeding and the gratuitous accusations against
RONA made by the Gabanski brothers are not relevant in this trade-mark
infringement action, at least at this stage of the proceedings in view of the
bifurcation order. The commercial behaviour of the defendant with the issues of
confusion and infringement are the primary subject of this action.
[35]
While
the offending labels of the defendant’s primer-sealer products had apparently
all been changed in February 2003, after the first day of the trial drew to a
close on May 6, 2013, Mr. Alex Gabanski was able to find and purchase six cans
of the product with the allegedly infringing labels from the RONA Centre de Rénovation St-Patrick. Upon producing these six cans the second day of the trial
(May 7, 2013), he stated that the six cans were all that remained of the
store’s stock of the defendant’s product.
[36]
When
confronted with this evidence, Mr. Buisson pointed out the tag number on the
bottom of the can, which identified the batch number as well as the year,
month, and location where the batch was manufactured. This particular batch,
the fifty-first batch, was manufactured in Shawinigan, Quebec in March 2001. While
the cans were very old and rusty, the labels were unsullied. Although he did
not venture to accuse plaintiff of substituting the replacement labels by the
offending labels, Mr. Buisson pointed out that the offending labels were only
loosely attached to the cans bought by Mr. Alex Gabanski. This certainly looked
very suspicious.
[37]
During
the lunch break, on the second day of trial (May 7, 2013), Mr. Buisson entered
the very same store and purchased a can of the same product. Mr. Buisson
pointed out at trial after the lunch break that this can was also very rusty
and also came from the same fifty-first batch produced in March 2001. However, this
can instead bore the replacement label with the words “PRÉSERVATEUR POUR
LE BOIS/WOOD PRESERVATIVE”, and Mr.
Buisson noted that the replacement label was solidly glued on the can.
[38]
The
weight to be given to this new, but contradictory, material evidence obtained by
both parties during the trial is subject to caution. First, there has been no
corroboration from the RONA employee who actually removed the cans from the
shelves. Additionally, this material evidence relates to the extent of the
alleged infringement, a matter which would only become relevant at the second
phase of the proceeding in view of the bifurcation order.
[39]
Since
the institution of the present action, on September 25, 2006, the defendant was
granted registration of the trade-mark PermaTec in respect of “[d]es
peintures et teintures à usage domestique et industrielle comprenant les
marchandises spécifiques suivantes nommément protecteur pour bois, nettoyant
pour bois et teinture pour le bois à l’eau (latex) pour l’intérieur et
l’extérieur ainsi que teintures pour bois à l’huile (alkyde) pour l’intérieur
et l’extérieur ». The
registration was granted based on use in Canada of the trade-mark PermaTec
since February 1, 1999.
[40]
That
being said, the Court notes that the defendant is no longer the registered
owner of the PermaTec trade-mark. The most recent Canadian
trade-mark data, updated on May 7, 2013, shows that the PermaTec
trade-mark
is currently owned by General Paint Corp., a British-Columbia based company.
The assignment was made on February 9, 2012 and the change in title was
effectively registered in Canada on July 10, 2012.
Position taken by the
parties
[41]
The
plaintiff basically claims that the words “CONSERVATOR” and “CONSERVATEUR”
cannot be used in association with the manufacturing, promotion, sale and
distribution of coatings for the protection of wood. In this respect, the
plaintiff alleges that the defendant has directed public attention to their
wares in such a manner as to cause or be likely to cause confusion in Canada between their wares and the plaintiff’s wares bearing the conservator
design-mark which has been used as a trade-mark.
[42]
Moreover,
the plaintiff also alleges in its amended statement of claim that the defendant
has passed off their wares as those of the plaintiff and that the defendant has
unduly benefited from the goodwill attached to plaintiff’s business and the conservator
design-mark. Subject to the bifurcation order made on March 1, 2007 (Osmose-Pentox
Inc v Société Laurentide Inc, 2007 FC 242), the plaintiff seeks a permanent
injunction, in addition to damages (including punitive damages) or an
accounting of profits (as the plaintiff may elect), prejudgment and
postjudgment interest, and costs.
[43]
A
few weeks before the trial, the defendant abandoned its counterclaim to have
the registration of the conservator design-mark declared invalid. That
said, the defendant readily admits that it has used the offending words between
at least 2000 and January 31, 2003. However, the defendant submits that it did
not use the words “CONSERVATOR” and “CONSERVATEUR” as a trade-mark, adding that
the use of the words “CONSERVATOR for wood” and “CONSERVATEUR pour bois” does
not cause confusion.
[44]
Both
parties agree on the general principles of law applicable in a trade-mark infringement
action, but not necessarily on their particular application to the facts of
this case:
•
The
registration of a trade-mark with respect to any wares or services, unless
shown to be invalid, gives the owner of the trade-mark the exclusive right to
the use of the trade-mark throughout Canada for those wares or services:
section 19 of the Act;
•
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: subsection 22(1) of the Act;
•
The
right of the owner of a registered trade-mark to its exclusive use shall be
deemed to be infringed by a person not entitled to its use under this Act who
sells, distributes or advertises wares or services in association with a
confusing trade-mark or trade-name: subsection 20(1) of the Act;
•
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: subsection 6(2) of the Act;
•
In
determining whether trade-marks or trade-names are confusing, all surrounding
circumstances must be considered, including: (a) the inherent distinctiveness
of the trade-marks or trade-names and 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: subsection 6(5) of the Act; and
•
No
registration of a trade-mark prevents a person from making any bona fide
use, other than as a trade-mark, of any accurate description of the character
or quality of his wares or services, in such a manner as is not likely to have
the effect of depreciating the value of the goodwill attaching to the
trade-mark: subparagraph 20(1)(b)(ii) of the Act.
[45]
The
parties agree that the test to be applied by the Court in this case is a matter
of first impression in the mind of a casual consumer somewhat in a hurry who
sees the trade-mark or trade-name, assuming that the consumer has an imperfect
recollection of the prior trade-marks or trade-names in issue, in contrast with
what is not to be done – a careful examination of competing marks or a
side-by-side comparison: Masterpiece Inc v Alavida Lifestyles Inc, 2011
SCC 27 at para 40 [Masterpiece], citing Veuve Clicquot Ponsardin v
Boutiques Cliquot Ltée, 2006 SCC 23 at para 20 [Veuve Clicquot].
[46]
Indeed,
a few weeks before the trial, the parties decided not to produce any expert
reports on the debatable issue of confusion, including any survey conducted by
the defendant’s expert and affidavits emanating from non-ordinary consumers,
such as professional painters or buyers for retail stores. Simply, the parties
have invited me to place myself as an ordinary consumer having imperfect
recollection of the conservator design-mark. This is what I have done in
this case.
[47]
While
none of the parties referred to the leading case law from Masterpiece in
presenting their final arguments at trial, they nonetheless covered the balance
of the same principals and did not overly deviate from arguing currently
accepted trade-mark law as it stands in Canada. That said, the parties offer a
completely different response to the basic question of whether the use by the
defendant of the words “CONSERVATOR” and “CONSERVATEUR” in association with the
primer-sealer (clear or brown) sold by the defendant will cause confusion and
lead to the inference that such wares are the plaintiff’s wares or are
distributed with its consent.
[48]
The
key submissions respectively made by the plaintiff and the defendant through
their representatives are outlined below. Please accept that this is not
necessarily a verbatim reproduction of everything that was stated by
counsel at the hearing. Any summary has its imperfections, but I hope that I
have captured, through rewriting and editing, the essence of the arguments made
by the parties, noting that the plaintiff’s counsel plead in English, while the
defendant’s counsel plead in French.
[49]
As
the plaintiff’s counsel noted at the end of his closing arguments, the case can
be summarized quite simply. The plaintiff first used the conservator
design-mark in 1996 with respect to its particular primer-sealer product. The
reason for creating the conservator design-mark was to respond to the
bilingual environment, which required labelling in both English and French. At
that time there were no other products on the market in Canada that bore the words “CONSERVATOR”.
[50]
Plaintiff’s
counsel attaches a great importance to the fact – which is not admitted by the
defendant – that his client was the first to sell a transparent primer-sealer
having the characteristics of its CONSERVATOR product. Noting that the market
was ripe for such a product, the defendant then put out a comparable product as
part of its product line under its trade-mark PermaTec, and this particular
product was entitled “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR”. Suddenly, the
plaintiff’s products went from being purchased by upwards of 25 RONA stores to
only 2 – with these 2 being only RONA affiliate stores rather than their
corporate or franchise stores.
[51]
It
became apparent in hearing the final submissions made by its counsel that the
plaintiff takes the position that their mark is not a design mark – even though
it is apparently registered as such. Plaintiff’s counsel stressed that the
replacement of the letter “O” by a construction helmet has allowed the
plaintiff to sidestep bilingual labelling requirements. He went so far as to
insist that theirs was in fact a trade-name rather than a mark at all. Be that
as it may, plaintiff’s counsel submitted that competitors of his client cannot
use the words “CONSERVATOR” and “CONSERVATEUR” in respect to surface coatings,
namely coatings for the protection of wood. This flows from the exclusive
protection granted by the registration of the conservator design-mark.
[52]
Plaintiff’s
counsel argued that there was confusion under section 6 of the Act and that the
existence of confusion had affected the plaintiff to the extent of devaluing
the plaintiff’s mark. He also argued that the defendant had, in a deceptive
manner indicative of bad faith, failed to do all that was possible to rapidly
replace all of the offending “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR” labels on the
market and had failed to ensure that cans with the old labels could no longer
be bought at any stores (loosely referring to Coca-Cola v Parhan, 163
FTR 260, 172 DLR (4th) 31 (Fed TD)).
[53]
Plaintiff’s
counsel then proceeded to trot out the usual suspects in terms of Canadian
trade-mark law, such as Mattel Inc v 3894207 Canada Inc, 2006 SCC 22 [Mattel],
Veuve Clicquot, and Walt Disney Productions v Triple Five Corp,
56 CPR (3d) 129 [Walt Disney], to demonstrate the test used to determine
confusion under subsection 6(5) of the Act. Since both the plaintiff and the
defendant offer their products in the same market, plaintiff’s counsel
distinguished the case at bar from situations presented in Veuve Clicquot
and Walt Disney.
[54]
Plaintiff’s
counsel also spoke to the inherent distinctiveness of the conservator
design-mark and relied significantly on Sprint Communications Co LP v Merlin
International Communications, 197 FTR 44, 9 CPR (4th) 307 at paragraphs 10,
15, and 18 in order to argue that the conservator design-mark had
acquired distinctiveness through the marketing and sale of their particular
product – even though I note that “sprint” is simply a word while the conservator
design-mark is formed of 10 letters and a symbol.
[55]
Plaintiff’s
counsel declared that just because a company uses a trade-mark (such as
PermaTec) on its wares, this does not mean that their use of another design
(such as “CONSERVATEUR POUR BOIS/WOOD CONSERVATOR) precludes this
other design from being deemed an infringing mark, if this other mark is used
for the purpose of distinguishing the wares (Gowling, Strathy &
Henderson v Degrémont Infilco Ltd, 2000 CanLII 28561 (TMOB). Plaintiff’s
counsel again noted the potential depreciation and loss of goodwill under
section 22 of the Act (Parmalat Canada Inc v Sysco Corporation, 2008 FC
1104 at para 46).
[56]
Plaintiff’s
counsel also argued the issue of remedies and a judge’s exercise of discretion
in this matter. He asserted that even if the offending activities had ended
long ago, a permanent injunction is still the best option where there is no
other appropriate alternative remedy (Nalcor Energy v NunatuKavut Community
Council Inc, 2102 NLTD(G) 175 at paras 84 and 100). At base, plaintiff’s
counsel seeks this injunction in order for all to be aware that the conservator
design-mark is protected and to avoid future risks of allegedly infringing
activity by the defendant or another competitor.
[57]
This
brings me to the defendant’s position in this case. Essentially, the defendant
submits that there is no confusion and accordingly no infringement of the plaintiff’s
exclusive right to the use of the conservator design-mark. The defendant
has not used the conservator design-mark. Its use of the words
“CONSERVATOR” and “CONSERVATEUR” in the offending labels is allowable by law.
It follows that the present action must be dismissed. In the summary below, the
Court has also taken into account the arguments made in writing by the
defendant in its “plan d’argumentation”.
[58]
Defendant’s
counsel began its concluding arguments with a preliminary question as to
whether the defendant had used “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR” as a
trade-mark or with the goal of describing the product being sold. If used as a
description, then this would come under one of the exceptions enumerated in paragraph
20(1)(b) of the Act, namely the bona fide use, other than as a
trade-mark, of any accurate description of the character or quality of the
wares in issue: subparagraph 20(1)(b)(ii) of the Act.
[59]
Defendant’s
counsel relied significantly on the judgment rendered by this Court in Pepper
King Ltd v Sunfresh Ltd, [2000] FCJ No 1455, 194 FTR 293 (Fed TD) [Pepper
King]. In this case, Pepper King owned the registered trade-mark VOLCANO
for use on the labels of its pepper sauce. Loblaws had used the word “volcano”
on the labels of one of its salsas. The Court made the distinction between
Pepper King’s use of the word “volcano” in order to identify the source of the
hot peppers and Loblaw’s use of the word “volcano” to identify the degree of
spiciness of its salsa rather than the source of the salsa (Pepper King
at paras 54-57).
[60]
Defendant’s
counsel then drew the comparison between the descriptive nature of “volcano” and
the employment of “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR” on the PermaTec
label in order to describe the particular primer-sealer product being sold. Defendant’s
counsel argued that the only trade-mark on their label was PermaTec and that “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR” was clearly a
description since it appeared in both French and English, which cannot be said
of the plaintiff’s conservator design-mark.
[61]
Whether
the words “CONSERVATEUR POUR BOIS/WOOD CONSERVATOR” were used by
the defendant as a trade-mark does not change the fact that they have been used
“in such a manner as is not likely to have the effect of depreciating the value
of the goodwill attaching to the trade-mark”: subparagraph 20(1)(b)(ii) of the
Act. Moreover, challenging that there was any diminishment of goodwill, the defendant’s
counsel further noted that subsection 22(1) of the Act is inapplicable: “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.” In this case, the defendant has never used the conservator
design-mark.
[62]
Defendant’s
counsel went on to argue that even if the Court does not accept its preliminary
argument and deems “CONSERVATEUR POUR
BOIS/WOOD CONSERVATOR” to be used as
a trade-mark, an ordinary consumer having an imperfect recollection of the conservator
design-mark would not be confused as to the source and origin of the wares in
issue: subsection 6(5) of the Act and Veuve Clicquot at paragraph 20.
[63]
Defendant’s
counsel next asserted that the plaintiff had presented no evidence of actual
confusion in all of the years since the original filing of this action. He saw
this as the plaintiff’s failure to meet its burden of proof (see Veuve Clicquot
at paras 14-15). While plaintiff’s counsel replied that this was all
irrelevant, the defendant’s counsel explained that a negative inference can be
drawn where there is an absence of evidence of actual confusion. To support
this argument, he relied significantly on Massif Inc c Station
touristique du Massif-du-Sud (1993), 2011 QCCA 573 at paras 64-65 [Massif],
and also on Mattel at para 55.
[64]
Defendant’s
counsel also disagreed that the plaintiff’s product or mark had acquired
comparable notoriety to the defendant’s, by noting that only 25 RONA stores out
of 450 had ever sold the plaintiff’s products, in comparison to typical
notorious companies who have argued a section 22 violation: Veuve Clicquot
at paras 57 and 60. Defendant’s counsel pointed to the evidence presented
during the trial to demonstrate that the plaintiff had only ever shown a
general decrease in the total sales of their different product lines.
[65]
Defendant’s
counsel further argued that the plaintiff’s conservator design-mark was
not inherently distinctive – leading to a weak protection of the mark – and
that minimal differences between words used in marks can be enough to eliminate
the likelihood of confusion in the case of a descriptive mark (Massif at
para 43; Prince Edward Island Mutual Insurance Co v Insurance Co of Prince
Edward Island, 159 FTR 112 at para 32-33 (Fed TD)). Additionally, he argued
that where a company attempts to appropriate a mark that uses a word from the
common lexicon of a language and is descriptive in nature, then the company in
question must expect confusion on the part of the consumer where the mark will
not benefit from significant protection (Walt Disney at p 183, citing
the UK case Office Cleaning Services Ltd v Westminster Window and Sign
General Cleaners Ltd, (1946) 63 RPC 39 at p 41; Massif at
para 46).
[66]
Defendant’s
counsel also argued that the little hard hat used instead of the “O” in the conservator
design-mark is the determinative characteristic of the plaintiff’s mark. He
also stressed that the plaintiff had never argued that they owned the word “conservator”
– and that it is not possible to appropriate a common word in that manner (Via
Rail Canada c location Via-Route, 45 CPR (3d) 96, 96 DLR (4th) 347; SC
Johnson and Son Ltd v Marketing International Ltd, [1980] 1 S.C.R. 99 at p
110). Furthermore, because of the short period of time – 4 years – that the
plaintiff had sold their product before the defendant’s product came onto the
market, it cannot be said that the conservator design-mark had acquired
inherent distinctiveness (Pink Panther Beauty Corp v United Artists Corp,
[1983] 3 FC 534 at paras 23-24 (FCA)).
[67]
Finally,
defendant’s counsel responded to the plaintiff’s allegations that its actions
and use of “CONSERVATEUR POUR BOIS/WOOD CONSERVATOR” had been done
in bad faith by referring back to the original injunction that had required
them to stop selling their product with the offending label. While much of the
trial related to whether or not the labels had in fact been replaced and how
quickly they had been replaced, the defendant’s counsel simply stated that it
had in fact gone beyond the requirements of the injunction. It had not only
stopped selling the product with the offending label, but had also contacted
the stores it had already sold the product to, and asked them to pull the
products off the shelves until representatives for the defendant could come and
replace the labels.
[68]
Regardless
of the time spent at the trial in analyzing the time delay in creating,
printing, and attaching the labels, and the logistics of how many products and
labels had been replaced, as well as whether or not the old offending labels
were still in circulation, defendant’s counsel explained that at the end of the
day the proof remains that they had in fact created new labels and affixed them
to the product. He also observed that if there had been bad faith involved in
the original design of the labels, then the creator of the original offending
labels had done a terrible job since the visual appearance of the defendant’s
product bears no resemblance to that of the plaintiff. Of course, through
questioning, he agreed that perhaps this is not the correct test for confusion
(see generally Masterpiece), but this speaks nonetheless to the
allegations of bad faith.
[69]
In
reply, plaintiff’s counsel used most of the remaining time to review the case
law cited by his colleague in an attempt to distinguish same with the
particular facts of this case, and which, as he submitted, clearly points to
confusion and infringement. Plaintiff’s counsel went as far as to suggest that there
has been a “scam” between RONA and the defendant to force the plaintiff out of
the market. While the fact remains that the plaintiff was the first to use the conservator
design-mark, the plaintiff’s counsel argued that the defendant illegally
appropriated the words “CONSERVATOR” and “CONSERVATEUR” to enter the “niche
market” in which plaintiff had been operating since 1996.
[70]
In
his closing submissions, plaintiff’s counsel severely criticized the courts for
their tendency to write long decisions and lecture the parties on the law and
the jurisprudence, suggesting that the present case is a very simple one and
does not require a long reasoning to dispose of the arguments made by the
parties.
Determination by the
Court
[71]
In
a nutshell, I find that the reproaches made by the plaintiff are either
irrelevant or unfounded in fact and law. I substantially agree with the
submissions made by the defendant. I will not repeat same and will not come
back to the case law cited by the parties, unless necessary. In the following
paragraphs, additional comments or particular findings will help the parties to
understand the Court’s reasoning.
[72]
The
issues of confusion and infringement are somewhat intermingled with the
allegations of unfair competition and passing-off, resulting from the
plaintiff’s strong belief that the registration of the conservator
design-mark prevents competitors from using the words “CONSERVATOR” and “CONSERVATEUR”,
whether as a trade-mark or a description of the character or quality of their
coatings for the protection of wood.
[73]
Firstly,
I note that any claim of passing-off or confusion between the wares in issue themselves
is gratuitous. On the one hand, there is no direct evidence of actual confusion
in the marketplace. On the other hand, a rapid examination of the primer-sealer
products sold by the parties (notably exhibits C-1-1 to C-1-4, P-5-1 to P-5-6
and D-7) leads the Court to conclude that there is very little risk that an
ordinary consumer would be duped into thinking that he or she is buying the
PENTOX® ®
product. Even with an imperfect recollection, the consumer will be immediately
struck by the name 
,
which appears prominently on the front panel of defendant’s primer-sealer and
which clearly points to a different product.
[74]
Secondly,
I endorse the defendant’s preliminary proposition that the words “CONSERVATEUR POUR
BOIS”
and “WOOD
CONSERVATOR”
which
appears side-by-side below and
in smaller characters, are not used as a trade-mark but as a mere description
of the defendant’s product. Moreover, even if I am to assume that the words “CONSERVATEUR POUR
BOIS”
and “WOOD
CONSERVATOR”
are used as a trade-mark by the defendant, having regard to all the surrounding
circumstances including the factors mentioned in subsection 6(5) of the Act, I
am unable to conclude that the use of same and the conservator
design-mark in the same area would be likely to lead to the inference that the
wares in issue are manufactured or sold by the same person.
[75]
Thirdly,
considering the admission found in paragraph 29 of the Agreed Statement of Facts
as amended on April 16, 2013, that is, that the defendant is not using the conservator
design-mark as a trade-mark, it follows that any claim based on subsection
22(1) of the Act is unfounded in fact and law. Moreover, I find that the
defendant has not used the words “CONSERVATEUR POUR
BOIS”
or “WOOD
CONSERVATOR”
in a manner that is likely to have the effect of depreciating the value of the
goodwill attaching to the conservator design-mark as a trade-mark.
[76]
Fourthly,
although the defendant’s use of the words “CONSERVATEUR POUR
BOIS”
and “WOOD
CONSERVATOR”
comes within the ambit of the exception provided in subparagraph 20(1)(b)(ii)
of the Act, I nevertheless examined the five factors enumerated in paragraphs
6(5)(a) to (e) of the Act as if these words were used as “trade-marks”. I have
changed the order of these factors and regrouped some factors, so that my
presentation remains logical and consistent with the evidence adduced at trial.
I have come to the conclusion that there is no confusion. This finding is
consistent with the cases cited by the defendant and I endorse defendant’s
interpretation of the relevant case law.
Nature of the trade and
the wares in issue
[77]
I
note that the parties are competitors seeking business from primary purchasers who
are retailers who, in turn, sell paint, wood treating solutions, and related
products to end-users. I find that the wares in issue are similar, at least
from the stand-point of an ordinary consumer who is not a chemist and will not
be familiar with the particular composition and distinct properties, if any, of
the wood primer-sealers manufactured by the parties. In passing, the Pentox
conservator product contains no pesticide, but this would not be known to an
ordinary consumer.
[78]
The
wares in issue are only available in liquid form. The wares come in containers
which can hold the same quantity of liquid. These containers are standardized
in terms of size and shape (e.g. 1 U.S. gal / 3.78 l; 1 U.S. qt / .94 l). Thus, the only way a consumer can distinguish the origin of the wares in issue is
by reading the labels. Moreover, in the trade, the wares in issue are sold by
retailers and will be found in their paint department with other products of
the same size and shape. A lot of these products are regrouped in families
bearing the colour and particular dressing of the manufacturer. This particular
observation would be highly relevant in a pure passing-off type of case.
[79]
With
respect to the particular qualities of the wares in issue, the domestic use of
a primer-sealer is purposely to protect the exterior wood from environmental
damage and control checking and warping, but other products sold as
“preservatives”, “stains” or “protectors” will also achieve this result. A problem
faced by the ordinary consumer is to be able to read the fine print on these
labels. The information about the wares in issue is both in French and English.
On the front panel, there is a general description of the product, and on the
back panel, there is further information about the product, directions for the
preparation of the wood, precautions to take, and the extent of the guarantee. Since
the wares in issue will generally be sold with other products that will
protect, preserve, conserve and/or seal exterior wood, the consumer is faced
with a difficult choice.
[80]
While
the two Gabanski brothers testified that the plaintiff was the first to sell
primer-sealer products in Canada, the defendant contested this claim by
pointing to other Canadian companies that were said to sell comparable products
at the time, such as Flood, Thompson’s and Techni-seal. The article entitled
“FINITION EXTÉRIEURE – Les produits se raffinent”, published in August –
September 1999 in the magazine RÉNOVATION BRICOLAGE (exhibit D-5) corroborates
the assertion made by the defendant. It shows the variety of products available
at the time on the market and is highly relevant. I accordingly dismiss any
objection made to its production at the trial by plaintiff’s counsel.
[81]
Mr.
Alex Gabanski responded in re-examination that the difference between their
product and products like Flood and Thompson’s lies with the particular sealant
properties and advantages of the primer-sealer they sell under the conservator
design-mark. Where the other products make the wood surface one hundred percent
resistant to water, the plaintiff’s primer-sealer product is moisture
impermeable and allows the wood to maintain breathability. This permits the
end-user to paint over the plaintiff’s conservator product, where other
sealants like Thompson’s WaterSeal repel all moisture, making the application
of any additional coating to the surface impossible. However, an ordinary
consumer like myself would be ignorant of this felted technical advantage,
unless it has been publicized by the plaintiff as a distinguishing factor from
its competition.
Degree of resemblance
[82]
I
note that the wares in issue are sold under the respective trade-marks of each
manufacturer, Pentox and PermaTec. Furthermore, the corporate name of each
manufacturer appears in small characters, either at the bottom of the front
panel in the case of Osmose-Pentox Inc., or at the bottom of the back panel in
the case of Société-Laurentide Inc.
[83]
The
debatable issue is whether the offending words “CONSERVATEUR POUR
BOIS”
and “CONSERVATOR FOR
WOOD”,
if used as a trade-mark (section 6 of the Act), would be likely to lead to the
inference that the defendant’s wares are manufactured by the plaintiff who has
exclusive right to use the conservator design-mark, the degree of
resemblance being an important matter to consider (Masterpiece at paras
42-48).
[84]
The
plaintiff claims that they are the inventor of the conservator
design-mark, a point that is not challenged by the defendant. As can be seen, ,
the registered trade-mark is composed of ten capital letters, being
C,O,N,S,E,R,V,A,T and R, and of a design having the shape of an inclined
construction helmet, its cap pointing to the ground. The shape vaguely suggests
some sort of an “O”, albeit an imperfect one.
[85]
Visually
and phonetically, the offending words, “CONSERVATEUR POUR
BOIS”
and “CONSERVATOR FOR
WOOD”,
appear side-by-side, and must be read as a whole. If this Court is to assume
that they are used as a trade-mark, they have only a vague resemblance with the
conservator design-mark. Together, the offending words are formed of six
words and 38 letters in total. Two languages, English and French, are used by
the defendant. The only common element, if any, between the two “trade-marks”
would be the English word “CONSERVATOR”, which is fully spelled – there is no
helmet shape – in the case of the defendant’s so-called “trade-mark”. When
CONSERVATOR and are
pronounced, they both have the same consonance.
[86]
Although
the “O” is missing in the conservator design-mark and assuming that the
ordinary consumer will read and remember the word “CONSERVATOR” when he or she
sees ,
it is not likely that he or she will be confused by the degree of resemblance
the words “CONSERVATEUR POUR BOIS” and “CONSERVATOR FOR
WOOD”
may have with the registered trade-mark in issue. As far as the word
“CONSERVATEUR” and are
concerned, phonetically speaking, they do not have the same consonance, and this
Court cannot assume that an English speaking consumer who has never learned
French is likely to be confused by the use of the French word “CONSERVATEUR”,
especially if it is used in conjunction with their complement, the qualifying
words “POUR BOIS”.
Inherent distinctiveness,
extent and length of time the trade-marks have been in use
[87]
The
plaintiff claims a right of ownership in the use of the English word
“CONSERVATOR” and its French counterpart “CONSERVATEUR” in association with
surface coatings, namely coatings for the protection of wood. This claim is not
made on the length of time that the trade-mark had been used by the plaintiff,
but on the registration of the conservator design-mark in 1996.
[88]
There
is very little evidence concerning the extent of use of the ®
trade-mark, save for that it has been used solely to identify the plaintiff’s
clear and brown primer-sealers; but it has not been used exclusively, since
these two products have continued to be sold with the ®
trade-mark appearing in tandem with the PENTOX® trade-mark. Besides, the
conservator product, as outlined by the defendant’s counsel, was sold in only a
limited number of RONA stores (25 out of 450).
[89]
There
is no evidence whatsoever that the plaintiff has at any time used the words
“CONSERVATOR” and “CONSERVATEUR” as a trade-mark. It would be incompatible with
the scope of protection conferred by law to a design mark to allow its
registered owner to piggy-back on its exclusive right to use the design and
obtain a monopoly over the use of any suggested word, especially if it is an
existing word in the vocabulary. Such monopoly also runs contrary to the
purpose the plaintiff was seeking to achieve in obtaining registration of the conservator
design-mark. In replacing the letter “O” by a symbol, the plaintiff was able to
overcome a possible objection because the word “CONSERVATOR” and its French
counterpart “CONSERVATEUR” are descriptive in themselves.
[90]
I
find that the conservator design-mark’s inherent distinctiveness, if
any, lies with its ability to convey an image or idea to the consumer without
being obliged to provide a description. By itself, the word “CONSERVATOR” is
not very distinctive. It is a common noun that already exists in English
dictionaries. The same can be said about the word “CONSERVATEUR”. Thus, what
makes the conservator design-mark really distinctive is the construction
helmet.
[91]
I
find that the imaginative element of the registered trade-mark is that is
allows the ordinary consumer to associate the construction helmet with its user
– the person wearing the construction helmet. This can only reinforce the
primary meaning of the English word “CONSERVATOR”, and which used alone,
usually designates a person and not an object. Conversely, the words “CONSERVATEUR POUR
BOIS”
and “WOOD CONSERVATOR” used by the
defendant are truly descriptive and have no inherent distinctiveness. The
offending words carry the idea of a product that protects, conserves or
preserves wood. They could never be registered as a trade-mark, which poses the
question whether they have been used by the defendant as a trade-mark in the
first place.
[92]
If
the conservator design-mark is meant to cover both the primary meaning
(a person) and the secondary meaning (an object) that can be associated with
the word “CONSERVATOR”, in turn, such duality directly affects the inherent
distinctiveness of the conservator design-mark and makes it a very weak
trade-mark and one that should be given a very low degree of protection by the
courts. I also bear in mind the particular milieu within which the conservator
design-mark was conceived.
[93]
Both
the plaintiff and the defendant operate in Canada and thus face certain linguistic
constraints if they want to reach their customers, some of which may not speak
French or English. Moreover, in the Province of Quebec, the use of descriptive
elements in labelling must comply with the Charter of the French Language (Bill
101). As Mr. Alex Gabanski testified, the reason for creating the conservator
design-mark mark was to respond to the “language issue” in Quebec. The use of
the conservator design-mark cleverly allowed the plaintiff to list only
one name for their product on the label. The conservator design-mark
need not be translated as it is not a word, yet it can still be understood as a
word when read by the consumer. This is distinct from the PermaTec labels where
the descriptive name of each product (such as PROTECTEUR/PROTECTOR,
PRÉSERVATEUR/PRESERVATIVE, CONSERVATEUR POUR BOIS/WOOD CONSERVATOR) appears in
both French and English below 
’s
line of products.
Is there any bona
fide use, other than as a trade-mark, of an accurate description of the
character or quality of the defendant’s wares?
[94]
I
also find that the words “CONSERVATEUR POUR
BOIS”
and “WOOD
CONSERVATOR” have not been
used by the defendant as a trade-mark and that they constitute an accurate
description of the character or quality of its wares. There is no actual proof
of bad faith and I am satisfied that the offending words have not being used in
a manner having the effect of depreciating the value of the goodwill attached
to the conservator design-mark.
[95]
Firstly,
the fact that the offending words are not used as a trade-mark, flows from a
simple visual examination of the front panel of the defendant’s label where,
under the name PermaTec, the words “CONSERVATEUR
POUR
BOIS”
and “WOOD
CONSERVATOR” appear, which
is reproduced again below:
[96]
Secondly,
an ordinary consumer will not stop at the word “CONSERVATEUR” or “CONSERVATOR”, but will read
“CONSERVATEUR
POUR
BOIS”
and “WOOD
CONSERVATOR” as a whole and
will immediately understand that it is an attribute or an inherent
characteristic of the defendant’s product that is sold as a primer-sealer. This
is reinforced by the mention of this which appears on the back panel of the
label.
[97]
Thirdly,
although the use of the words “CONSERVATEUR POUR
BOIS”
and “WOOD
CONSERVATOR” may be
linguistically wrong and may constitute an impropriety, it is not really
challenged by the plaintiff that the offending words accurately describe the
character or quality of the wares in question, which is to conserve, protect or
preserve exterior wood from damages caused by the environment.
[98]
Fourthly,
based on the evidence, the manner in which the words “CONSERVATEUR
POUR
BOIS”
and “WOOD
CONSERVATOR” have been used
is not likely to have the effect of depreciating the value of the goodwill
attaching to the conservator design-mark as a trade-mark. I will add
that the evidence of any goodwill is minimal, if not inexistent.
[99]
Fifthly,
the evidence presented by the plaintiff is not sufficient to rebut the
presumption of good faith, and having heard the testimony of Mr. Buisson, whom
I found credible, I am satisfied that the use of the words “CONSERVATEUR
POUR
BOIS”
and “WOOD
CONSERVATOR” constitute a bona
fide use by the defendant.
Conclusion
[100] In my final
analysis, having considered the totality of the evidence, both documentary and
testimonial, the admissions made by the parties and all relevant provisions of
the Act and the case law, the present action must fail and shall be dismissed
by the Court.
[101] Costs are
reserved and the matter shall be decided by way of a motion in writing filed
with the Court and served to the other party.
JUDGMENT
THIS COURT’S JUDGMENT
is that:
1. The action is
dismissed; and
2. Costs are
reserved and the matter shall be decided by way of a motion in writing filed
with the Court and served to the other party.
“Luc Martineau”
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