Dockets: T-793-13
T-794-13
T-795-13
T-796-13
T-798-13
Citation:
2014 FC 1054
Montreal, Québec, November 13, 2014
PRESENT: The
Honourable Mr. Justice Locke
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BETWEEN:
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DAIRY PROCESSORS
ASSOCIATION OF CANADA
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Applicant
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and
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LES PRODUCTEURS LAITIERS DU CANADA / DAIRY FARMERS OF CANADA
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Respondent
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JUDGMENT AND REASONS
I.
Background
[1]
This decision concerns five separate but related
applications for judicial review. In each case, the applicant is Dairy
Processors Association of Canada (DPAC) which has opposed five applications for
registration of trade-marks filed by the respondent Les
Producteurs Laitiers du Canada / Dairy Farmers of
Canada (DFC). The present applications for judicial review result from five
decisions by a Member of the Trade-marks Opposition Board (the Member) refusing
DPAC’s request for leave to amend its Statement of Opposition in each of the
trade-mark applications in issue to add new grounds. A table in the Appendix
below provides (i) information in relation to each of the trade-mark
applications at issue; and (ii) a correlation of each such application with the
present judicial review applications.
[2]
Though the marks themselves are similar one to
the other, there are some notable differences between three of the trade-mark
applications (1,415,228, 1,415,231 and 1,415,232, which I will call Group 1)
and the other two (1,427,512 and 1,434,322, which I will call Group 2):
1. The Group 1 marks concern regular trade-marks, whereas the Group 2
marks concern certification marks;
2. The Group 1 marks are based on proposed use, whereas the Group 2
marks are based on use since shortly before the applications were filed;
3. The Group 1 marks are for a range of services, whereas the Group 2
marks are for specific wares (ice cream for 1,427,512 and sour cream for
1,434,322).
[3]
None of these differences is particularly
important to the present decision.
[4]
For the reasons provided below, I have concluded
that the Member erred in refusing to grant leave to amend the Statements of
Opposition in issue, and that the impugned decisions should be set aside.
II.
Facts
[5]
The trade-mark applications in issue were filed
in the period from October 21, 2008 to April 14, 2009. Statements of Opposition
were filed on August 31, 2010 in respect of all of these applications. These
Statements of Opposition assert a number of grounds of opposition, including
that the marks are:
1. Not registrable in that they are contrary to paragraph 12(1)(b) of
the Trade-marks Act (the Act);
2. Not distinctive and not capable of being distinctive of the listed
wares or services;
3. Contrary to various provisions of the Act, including
subsection 7(a).
[6]
After DFC provided its Counter Statements of
Opposition on January 14, 2011, affidavits were exchanged and then
cross-examinations were conducted in September 2012.
[7]
DPAC then sought to amend its Statements of
Opposition to add new grounds of opposition, namely that the marks are:
1. Not registrable pursuant to section 10 of the Act (this
ground concerns only the certification marks);
2. Not registrable in that they do not comply with paragraph 30(i) of
the Act in that use thereof would be in violation of subsections 7(d)
and 7(e) of the Act.
[8]
DPAC’s requests for leave to amend its
Statements of Opposition were filed on December 24, 2012.
III.
Impugned Decisions
[9]
The Member refused to grant leave in letters
dated April 8, 2013. There are five such letters, each associated with one of
the marks in issue. The decisions are essentially the same one to the other.
[10]
The requirement for DPAC to obtain leave to
amend its Statements of Opposition comes from section 40 of the Trade-marks
Regulations. By virtue of a Practice Notice issued by the Trade-marks
Office entitled Practice in Trademark Opposition Proceedings in effect
as of March 31, 2009 (the Practice Notice), Section VII:
Leave to amend a statement of opposition […]
will only be granted if the Registrar is satisfied that it is in the interests
of justice to do so having regard to all the surrounding circumstances
including:
1. the stage the opposition proceeding has
reached;
2. why the amendment was not made or the
evidence not filed earlier;
3. the importance of the amendment or the
evidence; and
4. the prejudice which will be suffered by the
other party.
[11]
Though the Member did not make explicit reference
to the Practice Notice in his letters, the content thereof indicates that he
had the above-listed factors in mind.
[12]
With regard to the first two factors, the Member
stated as follows:
I note that the opponent’s request came at a
fairly late stage in the proceeding, that is, close to the expiry of the
evidence stage and prior to the issuance of a notice for written arguments. It
is not clear why the opponent could not have made its request somewhat earlier.
[13]
The Member seems to have had the third factor
(importance of the amendment) in mind when he continued as follows: “Most importantly, I agree with the applicant’s submissions
that grounds of opposition may not be founded on Section 7, which is imported
into the s.30 grounds.”
[14]
Finally, the Member concluded with reference to
the fourth factor (prejudice which will be suffered by the other party) by
stating that “there is the real possibility of prejudice
to the applicant because of the potentially lengthy delay in the proceedings if
the applicant was required to address new allegations”.
IV.
Issues
[15]
There are two main issues that must be dealt
with in this decision:
1. Are the impugned decisions subject to judicial review?
2. If so, did the Member err in refusing leave to amend the Statements
of Opposition?
[16]
In order to have the impugned decisions set
aside, DPAC must be successful on both issues.
V.
Analysis
A.
Are the impugned decisions subject to judicial
review?
[17]
The decision to refuse leave to amend a
Statement of Opposition is interlocutory: Simpson Strong-Tie Co. v Peak
Innovations Inc., 2008 FCA 235. Because of this, the impugned decisions are
not subject to judicial review, absent special or exceptional circumstances,
until the administrative process has been completed or effective remedies are
exhausted: Szczecka v Canada (Minister of Employment and Immigration) (1993),
170 NR 58 at para 4 (FCA) (Szczecka); Canada (Border Services Agency)
v C.B. Powell Limited, 2010 FCA 61 at para 31 (Powell).
[18]
DPAC argues that judicial review at this stage
of the proceedings is appropriate because, at the end of the opposition
proceedings, it will not have an adequate alternative remedy to pursue the new
grounds of opposition. DPAC refers to Parmalat Canada Inc. v Sysco
Corporation, 2008 FC 1104, at para 23 (Parmalat), which involved
facts similar to those in the present proceedings. DPAC adds that, though it
might be entitled to introduce new evidence in an appeal to this Court
of a decision on an opposition, it would not be entitled to introduce new issues.
[19]
For its part, DFC argues that DPAC does have
alternative remedies. As indicated in Indigo Book & Music Inc. v C.
& J. Clark International Ltd., 2010 FC 859, at para 44 (Indigo),
DPAC would have two alternatives:
1. It could commence an action against DFC for breach of any rights it
may enjoy under subsection 7(d) and/or 7(e) of the Act; and
2. To the extent that it is unsuccessful in the oppositions and DFC’s
trade-mark applications proceed to registration, DPAC could commence
proceedings in the Court for expungement of any such registrations pursuant to
section 57 of the Act, based again on an allegation pursuant to
subsection 7(d) and/or 7(e).
[20]
However, these alternatives would involve
proceedings separate from the original oppositions. There is a difference of
opinion between the parties as to whether remedies outside the context of the
existing proceedings can constitute effective remedies as contemplated in Szczecka
and Powell. This difference of opinion apparently exists also in the
jurisprudence. Indigo clearly concludes in the affirmative. However, the
opposite conclusion was reached in Parmalat. The issue was not
specifically addressed in Parmalat but the same alternative remedies
would apparently have been available there.
[21]
DFC argues that Parmalat is
distinguishable on the basis that the impugned decision in that case involved
an erroneous conclusion that the proposed new ground of opposition was invalid.
DFC argues that the impugned decisions in issue in the present applications do
not involve such a conclusion. That is a separate debate which is addressed
below.
[22]
I side with DPAC, and with Parmalat, on
this issue. I prefer the view that the alternative remedies contemplated in Szczecka
and Powell must be remedies available within the context of the
proceeding in issue, and do not include recourses that could be pursued in
separate proceedings. I have two main reasons for this conclusion.
[23]
First, in my view, the following extract from Powell
at para 31 suggests that I should not look beyond the context of the current
opposition proceedings for alternative remedies:
[…] [A]bsent exceptional circumstances, parties
cannot proceed to the court system until the administrative process has run its
course. This means that, absent exceptional circumstances, those who are
dissatisfied with some matter arising in the ongoing administrative process
must pursue all effective remedies that are available within that process; only
when the administrative process has finished or when the administrative process
affords no effective remedy can they proceed to court. Put another way, absent
exceptional circumstances, courts should not interfere with ongoing
administrative processes until after they are completed, or until the
available, effective remedies are exhausted.
[Emphasis added]
[24]
The second reason that I prefer the approach in Parmalat
over Indigo is that Parmalat cannot be distinguished in the way
DFC argues. As discussed below, I conclude that the Member did indeed erroneously
conclude, just as in Parmalat, that the proposed new ground of
opposition was invalid.
[25]
Accordingly, I conclude that there are no other
effective remedies for DPAC to introduce the new grounds of opposition that it
puts forward, and therefore the impugned decisions are subject to judicial
review at this stage.
(1)
Standard of Review
[26]
The parties are not in agreement on the issue of
the standard of review. However, their disagreement comes down to how the
issues are viewed, rather than any real disagreement concerning the applicable
law on standard of review.
[27]
For some issues, DPAC asserts that the
applicable standard of review is correctness because the Member’s alleged
errors concerned his jurisdiction and authority when he considered the request
for leave to amend the Statements of Opposition. DPAC asserts two such errors
by the Member:
1. Failing to consider the importance of the proposed amendments and
whether that importance outweighs any prejudice to DFC from allowing the
amendments; and
2. Concluding that section 30 in combination with section 7 is not a
proper ground of opposition.
[28]
For its part, DFC argues that the Member did not
err in regard to his jurisdiction and authority, that he applied the proper
legal test and that the dispute on standard of review comes down to how the
Member exercised his discretion. On that basis, DFC argues that the applicable
standard of review is reasonableness.
[29]
With regard to the first alleged error, and as
mentioned above in discussion of the impugned decisions, it is my view that the
Member was guided by all of the factors applicable to the exercise of the
Member’s discretion. Therefore, the standard of review on the issue of the
importance of the proposed amendments is reasonableness. The same holds true
for other arguments by DPAC based on the Member’s application of these factors.
[30]
The second issue is different. The parties are
agreed that the proposed new ground of opposition based on section 30 in
combination with section 7 is a proper ground of opposition. Therefore, this
issue comes down to whether the Member erroneously concluded that this is not a
proper ground of opposition, or simply found that this ground of opposition
does not apply in relation to these specific oppositions. This issue is
discussed in greater detail in the next section.
B.
Did the Member err in refusing leave to amend
the Statements of Opposition?
[31]
As indicated above, the Member took into account
the following findings in concluding that DPAC’s proposed amendments should not
be accepted:
1. The requests for leave came at a late stage in the proceedings and
it is not clear why they were not made earlier;
2. Grounds of opposition may not be founded on section 7 of the Act
imported into section 30; and
3. A real possibility of prejudice to DFC exists if the amendments are allowed.
[32]
DPAC challenges each of these findings. I will
address each in turn.
(1)
Tardiness of the Requests for Leave
[33]
The requests for leave to amend the Statements
of Opposition were filed on December 24, 2012. This was about three months
after the cross-examinations took place, but two months before any requests for
written arguments were expected.
[34]
DPAC argues that it was not in a position to
submit the proposed amendments until it received the transcripts of the
cross-examinations because the proposed amendments are based on exchanges
during cross-examinations. DPAC refers specifically to information that DFC was
permitting use of the marks in issue in a manner inconsistent with Federal
guidelines and in association with products that contained milk that was not
100% Canadian. DPAC mentions the example of a chocolate covered ice cream bar
in respect of which DFC would have no information as to the source of the milk
used in the chocolate. It would have information only concerning the milk used
in the ice cream.
[35]
As regards Federal guidelines, DFC argues that
the issue was known well in advance of the cross-examinations. It refers to the
affidavit of Claire Payette dated November 29, 2011, which was served on DPAC
on December 13, 2011, and specifically to paragraphs 15 and 16 therein which
raise the issue of the Federal guidelines.
[36]
As regards alleged use of the marks in
association with products that contained milk that was not 100% Canadian, DFC
notes that (i) the Group 1 marks concern services and not products; and (ii)
the Group 2 marks concern only ice cream and sour cream. Accordingly, DFC
argues, there is no information that it was permitting use of any of the marks
in issue in association with any products listed in the trade-mark applications
that contained milk that was not 100% Canadian.
[37]
It is not clear from a reading of the Member’s
decisions whether he felt that DPAC was, or should have been, aware of the
issues raised in the proposed amendments before the cross-examinations, and
should have requested leave before the cross-examinations, or if he simply felt
that the three-month delay following the cross-examinations was too long. I am
not sure that three months is excessive, especially since the Member took
longer than that himself to rule on the requests for leave. However, there is
support, in my view, for a conclusion that DPAC should have proposed the
amendments before the cross-examinations. I will assume that this was the
Member’s conclusion. In my view, this conclusion was reasonable.
(2)
Section 7 as Ground of Opposition
[38]
In part of each of the impugned decisions, the
Member stated: “Most importantly, I agree with the
applicant’s submissions that grounds of opposition may not be founded on
Section 7, which is imported into the s.30 grounds”.
[39]
DPAC argues that this is a clear statement which
is wrong in law as to the Member’s jurisdiction and authority to reject the
trade-mark applications in issue based on DPAC’s oppositions.
[40]
DFC agrees that section 30 in combination with
section 7 is a valid ground of opposition. However, DFC argues that this
statement by the Member simply meant that DPAC is not entitled to found its
present oppositions on the combination of sections 30 and 7, not that an
opposition on this ground could never be made. DFC asserts that:
1. The impugned decisions refer to DFC’s letter of February 18, 2013,
arguing against leave to amend;
2. The February 18, 2013 letter contains several arguments that the
proposed amendments should not be allowed in the present oppositions; and
3. The Member’s statement quoted above is simply an expression of
agreement with DFC on that issue.
[41]
It was noted to me that the Member himself has
previously acknowledged that section 30 in combination with section 7 is a
valid ground of opposition: Bojangles' International, LLC. v Bojangles Cafe
Ltd. (2004), 40 C.P.R. (4th) 553 at para 21.
[42]
I have tried to read the statement in issue as
DFC urges me to do, but I have concluded that the only reasonable way to
interpret it is as a statement that the proposed new ground of opposition is
invalid. Firstly, a plain reading of the statement points in that direction. In
addition, DFC’s February 18, 2013 letter, to which the statement refers, also
makes the case that the proposed new ground of opposition is not valid. The
letter refers to Sao Paulo Alpargatas v But Fashion Solutions (Comercio e
Industria de Artigos em Pele, LDA), 2012 TMOB 178, which states: “there is no jurisprudence that suggests that a section 30(i)
ground of opposition may be based on violation of section 7(b) or 7(d)(ii) of
the Act”. DFC’s letter also includes the following statement from
Cuprinol Ltd. v J.S. Tait & Co. (1974), 19 CPR (2d) 176 at para 20
(TMOB):
Objections based on s. 7 of the Trade Marks
Act are not grounds for opposition pursuant to s. [38] of the Trade
Marks Act. A breach of s. 7 of the Trade Marks Act may be made the
subject of other proceedings before a Court of competent jurisdiction but it is
not proper grounds for opposition.
[43]
Based on the foregoing, DFC clearly urged the
Member to conclude that the combination of section 30 and section 7 could not
be a valid ground of opposition. Despite the fact that the Member had
previously found to the contrary, he agreed with DFC’s argument. I assume that
he simply forgot his previous contrary conclusion on the issue.
[44]
It appears that this erroneous conclusion by the
Member led him to conclude that proposed amendments were not important. In my
view, the Member relied on incorrect law in reaching his decisions, and that he
acted unreasonably in doing so since he had previously acknowledged the correct
state of the law. Further, this error led to an incorrect assessment of the
factors relevant to DPAC’s requests for leave to amend.
[45]
I have not formed any opinion as to whether the
proposed amendments should be considered important. Nevertheless, the
importance of the proposed amendments is an issue that should be properly
considered.
(3)
Possibility of Prejudice to DFC
[46]
The Member found that there was a real
possibility of prejudice to the respondent because of the delay that would
result from the introduction of the proposed new grounds of opposition.
However, the Member provided no support for this finding other than the delay
itself. Prejudice does not automatically follow a delay, but there is no
suggestion as to how that delay would lead to prejudice to DFC.
[47]
The same is true of DFC’s argument against the
proposed amendments in its letter of February 18, 2013. DFC argues that it
would be prejudiced, but points to nothing other than the delay.
[48]
At the date of the request for leave, the
parties were still more than two months from being asked for written arguments.
I accept that the introduction of new grounds of opposition at this stage could
cause further delay, but I have seen no evidence or argument as to how such
delay might cause a prejudice to DFC that could not be compensated in costs. In
my view, the Member’s finding based on potential prejudice to DFC was
unsupported and therefore unreasonable.
[49]
I agree with DPAC that the Member also failed to
compare the potential prejudice it could suffer from a refusal to allow the
amendments against the potential prejudice to DFC if they were allowed. In my
opinion, the Practice Notice required the Member to consider this.
VI.
Conclusion
[50]
For the reasons discussed above, I have
concluded that the Member’s decisions to refuse leave to introduce the new grounds
of opposition are unreasonable. Accordingly, I conclude that the Member’s
decisions should be set aside.
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