Date: 20131015
Docket: T-1573-12
Citation: 2013 FC 1041
Toronto, Ontario, October 15,
2013
PRESENT: The
Honourable Mr. Justice Campbell
BETWEEN:
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INTERNATIONAL STARS S.A.
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Appellant
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and
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SIMON CHANG DESIGN INC.
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Respondent
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REASONS FOR ORDER AND
ORDER
[1]
The
present Application is an appeal under subsection 56(1) of the Trade-marks
Act, RSC 1985, c
T-13 (the Act) of the
decision of the Registrar of Trade-marks’ delegate (the Registrar) dated June
5, 2012, in which the Registrar rejected the opposition of International Stars
S.A. (International Stars) and allowed the registration of Canadian Trade-Mark
Application No. 1, 302,619, filed by Simon Chang Design Inc.. Although duly
notified, Simon Chang Design Inc. did not engage in the present appeal.
[2]
Simon
Chang applied for registration of the trade-mark ZENERGY BY/POUR SIMON CHANG
& Design (the Mark) in association with certain sports clothing. International
Stars opposed the registration on the basis of evidence that it had used the
trade-mark ENERGIE for similar wares. A key feature of the Registrar’s decision
was the rejection of International Stars’ argument that confusion exists
between the Mark and its trade-mark.
[3]
The
central focus in the present appeal is whether the Registrar’s findings with
respect to International Stars’ grounds of opposition pursuant to s. 16 of the Act
on the issues of distinctiveness and confusion are made in error of law or are
unreasonable.
I. The
Test for Distinctiveness and Confusion
[4]
The
Registrar correctly stated the test as follows:
The test for confusion is one of
first impression and imperfect recollection. In applying the test for
confusion, the Registrar must have regard to all the surrounding circumstances,
including those specifically enumerated in section 6(5) of the Act, namely:
(a) the inherent distinctiveness
of the trade-marks and the extent to which they have become known;
(b) the length of time each has
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 in appearance or sound or in the ideas
suggested by them.
These enumerated factors need not
be attributed equal weight. [See, in general, Mattel, Inc v. 3894207 Canada
Inc (2006), 49 CPR (4TH) 321 (SCC), Veuve Cliquot Ponsardin
v. Boutiques Cliquot Ltee (2006), 49 CPR (4TH) 401 (SCC) and Masterpiece
Inc v Alavida Lifestyles Inc (2011), 92 CPR (4TH) 361 (SCC).]
II. The
Application of the Test by the Registrar
[5]
In
the Decision under appeal, the Registrar analysed each of the factors
specifically enumerated in s. 6(5) of the Act, as well as other
surrounding circumstances. The key passages from the decision which are
presently in contention are as follows:
the
inherent distinctiveness of the marks
[18] Both
parties' marks are inherently distinctive. However, the Opponent's mark
consists solely of an ordinary dictionary word. In contrast, the Mark
comprises an invented word, ZENERGY, combined with the name of an individual
and coloured design features. As a result, the Mark is inherently stronger
than the Opponent's mark.
the
extent to which each mark has become known
[19] A
mark's distinctiveness may be increased through use and promotion. According to
the affidavit of Mr. Wiltzer, sales of ENERGIE wares in Canada in the two years
preceding the filing of the application were as follows: 2004 - $6.4 million;
2005 - $6.2 million. The bulk of such sales was attributable to clothing. I
note that Mr. Wiltzer attests that Canadian sales have been continuous since
1998 but that sales figures prior to 2004 are not available due to a policy of
not retaining computerized sales after seven years. ENERGIE wares have been
advertised through billboards, flyers, mailers and the like, with $96,000 being
spent on advertising in Canada in 2004 and 2005.
[20] As
the Applicant's application was filed based on proposed use, as of the material
date the Mark had not become known to any extent. Thus the extent to which the
marks had become known clearly favours the Opponent.
the
length of time the marks have been in use
[21] As
of the material date, the Opponent's mark had been in use for at least seven
years, whereas the Mark had not yet been used.
the
nature of the wares, services, business and trade
[22] The
parties' wares overlap in that both parties sell clothing. The Opponent's wares
are sold through ENERGIE retail stores as well as other retail outlets. The
Applicant's wares have been sold since March 2009 through a licensee who in
turn sells to customers such as Costco.
the
degree of resemblance between the marks
[23] The
marks should be assessed in their entirety but it is still acceptable to
"focus on a particular feature of the mark that may have a determinative
influence on the public's perception of it" [United Artists Corp v Pink
Panther Beauty Corp (1998), 80 CPR (3d) 247 (FCA) at 263]. Although the
first component of a mark is often considered more important for the purpose of
distinction, when a word is a common, descriptive or suggestive word, the
significance of the first component decreases [see Conde Nast Publications
Inc v Union des Editions Modernes (1979), 46 CPR (2d) 183 (FCTD); Park
Avenue Furniture Corp v Wickes/Simmons Bedding Ltd (1991),37 CPR (3d) 413
(FCA); Phantom Industries Inc v Sara Lee Corp (2000), 8 CPR (4th) 109
(TMOB)].
[24] The
most dominant feature of the Mark is the invented word ZENERGY that appears
first and in the largest font. However, the designer's name, SIMON CHANG, and
the coloured design features are also significant features of the Mark. There
is some resemblance between the marks in sound, appearance and idea suggested,
due to the common letters ENERGY / IE, but overall the differences between the
marks serve to outweigh their similarities.
[…]
conclusion
[28] Having
considered all of the surrounding circumstances, I find that, on a balance
of probabilities, confusion is not likely between the marks. Although
the parties' wares and channels of trade overlap, or are related, and only the
Opponent's mark has acquired a reputation as of the material date, the
differences between the marks suffice to make confusion unlikely. As stated
in Beverley Bedding & Upholstery Co v Regal Bedding & Upholstery Ltd
(1980), 47 CPR (2d) 145 (FCTD) at 149, affirmed 60 CPR (2d) 70:
"Realistically appraised it is the degree of resemblance between trade
marks in appearance, sound or in ideas suggested by them that is the most
crucial factor, in most instances, and is the dominant factor and other factors
play a subservient role in the over-all surrounding circumstances."
[Emphasis
added]
III. Challenge
to the Findings in Paragraph 18 of the Decision
[6]
At
the hearing of the present Application an error was identified in the
Registrar’s decision which was not raised by International Stars in written argument.
While the Registrar found that both marks are inherently distinctive, I find
that a fundamental error exists in the reasoning leading to the conclusion that
the Mark is “inherently
stronger”. ENERGIE
does not consist
“solely of an ordinary dictionary word” as found by the Registrar. As a result,
I find that neither mark is inherently more distinctive than the other. This finding has an impact on
the validity of the Registrar’s conclusions on difference between the marks.
IV. Challenge to the
Findings in Paragraphs 23, 24, and 28 of the Decision
[7]
International
Stars argues that the Registrar used the wrong legal test when assessing
resemblance between the marks. As expressed by the Registrar in the Decision,
the test for confusion is based on first impression and imperfect recollection.
Thus, the Registrar was required to apply the mind of the casual consumer
somewhat in a hurry with imperfect recollection of the trade-marks, who does
not pause to give the matter any detailed consideration or scrutiny, nor to
examine closely the similarities and differences between the marks [Veuve
Clicquot Ponsardin Maison Fondee en 1772 v. Boutiques Cliquot Ltee,
49 C.P.R. (4th) 401]. International Stars argues that instead of
applying the first impression test, the Registrar erred by doing a side-by-side
comparison of the marks that is contrary to law.
[8]
In
stating the test for distinctiveness and confusion, the Registrar cited the
decision in Masterpiece Inc v Alavida Lifestyles Inc (2011), 92 CPR (4TH)
361 (SCC). An important feature at paragraph 40 of Justice Rothstein’s decision
is the confirmation of the first impression test and a warning about an
analytical pitfall to be avoided:
At the outset
of this confusion analysis, it is useful to bear in mind the test for confusion
under the Trade-marks Act. In Veuve Clicquot Ponsardin v. Boutiques Cliquot
Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824, Binnie J. restated the
traditional approach, at para. 20, in the following words:
The test to be applied is a matter of first impression in
the mind of a casual consumer somewhat in a hurry who sees the [mark] at a time
when he or she has no more than an imperfect recollection of the [prior]
trade-marks, and does not pause to give the matter any detailed consideration
or scrutiny, nor to examine closely the similarities and differences between
the marks.
Binnie J.
referred with approval to the words of Pigeon J. in Benson & Hedges
(Canada) Ltd. v. St. Regis Tobacco Corp., [1969]
S.C.R. 192, at p. 202, to contrast with what is not to be done -- a
careful examination of competing marks or a side by side comparison.
[9]
In
paragraph 23, the Registrar acknowledges that the issue is one of public
perception, and therefore, was required to determine that perception as one of
first impression. With respect to ZENERGY, since it is not a common,
descriptive or suggestive word, the Registrar found that the Mark’s dominant
feature is its “invented word”. International Stars argues that, having made
this finding, the Registrar should not have proceeded to further search the
evidence in order to make the first impression determination. That is, on that
evidence alone, the Registrar was required to decide whether confusion would
exist. Indeed, the Registrar began to engage in this process by reasonably
finding that “there is some resemblance between the marks in sound, appearance,
and idea suggested, due to the common letters ENERGY/IE”, but went further to
consider other “significant features” of the Mark, being the designers name,
and coloured design. International Stars argues that by going further to
consider such specific additional details, beyond what would give the first
impression, the Registrar erred by conducting a side-by-side comparison. I
agree with this argument.
[10]
In
my opinion, the Registrar’s conclusion expressed in paragraph 28 that “the
differences between the marks suffice to make confusion unlikely” is the result
of a side-by-side comparison and constitutes an error in law. Considering the
evidence before the Registrar de novo, given
what I consider to be a strong resemblance between the marks, and given that
the other s. 6(5) factors do not point strongly against a likelihood of
confusion,
I find that, as a matter of first impression, confusion is likely.
ORDER
THIS COURT ORDERS that for the reasons
provided, I grant the present appeal, set aside the Registrar’s decision, and
direct the Registrar to refuse Simon Chang Design Inc.’s Application.
I make no
order as to costs.
“Douglas R. Campbell”
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