Docket: T-2212-12
Citation:
2014 FC 1153
Ottawa, Ontario, December 2, 2014
PRESENT: The
Honourable Madam Justice Kane
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BETWEEN:
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GEMOLOGICAL INSTITUTE OF AMERICA
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Applicant
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and
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GEMOLOGY HEADQUARTERS INTERNATIONAL
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Respondent
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JUDGMENT AND REASONS
[1]
This is an appeal under section 56 of the Trade-marks
Act, RSC 1985, c T-13 [the Act], of a decision rendered September 28, 2012
by Ms Jill Bradbury [the Officer], a member of the Trade-Marks Opposition Board
[TMOB or the Board] acting on behalf of the Registrar of Trade-Marks [the Registrar].
The decision rendered denies the opposition by the applicant, the Gemological
Institute of America and owner of the trade-mark GIA, to the registration of
the trade-mark GHI by the respondent, the Gemology Headquarters International,
for use in association with the same wares and services, namely, diamond
grading, the issuance of diamond grading certificates, education in the field
of gemology and other wares and services in the field of gemology.
Overview
[2]
The applicant, Gemological Institute of America
[GIA], submits that the Board erred in fact and law in finding that the
respondent, Gemology Headquarters International [GHI], had established that
there was no reasonable likelihood of confusion between the two marks. The
applicant argues that the new evidence it has filed on appeal would have
materially affected the Board’s findings. As a result, the Court is required to
conduct a de novo consideration of the matter and, on a de novo consideration,
the respondent’s application for the mark GHI should be refused.
[3]
For the reasons that follow, I have found that
the new evidence of the applicant – which addresses whether the mark is well
known, as well as its reputation, length of use and relevant consumer market – is
of sufficient quality and probative value, and would have changed the factual
basis of the TMOB decision. It would, therefore, have materially affected its
decision.
[4]
Accordingly, I have conducted a de novo
review. Upon consideration of the new evidence and the evidence previously
submitted, the applicable case law and the factors set out in subsection 6(5)
of the Act, I find that the respondent has not met its burden to establish that
there is no likelihood of confusion between the two marks.
[5]
As a result the Court allows the appeal and
refuses the respondent’s application to register the mark GHI.
Background
[6]
On February 7, 2006, the respondent filed an
application to register the trade-mark GHI with the Registrar based on proposed
use of the mark in Canada in association with wares and services related to the
field of gemology. These wares and services include: certificates of
authenticity and certificates of grading diamonds, gemstones and pearls;
educational services regarding gemology; and, gemological services, namely,
providing identification, authentication and grading of diamonds, gemstones and
pearls, and issuing certificates relating to such grading.
[7]
On November 6, 2008, the applicant filed a
Statement of Opposition [Opposition] against the application pursuant to
subsection 38(2) of the Act on three grounds: non-registrability under
paragraph 12(1)(d), pursuant to paragraph 38(2)(b); non-entitlement
under subsections 16(2) and (3), pursuant to paragraph 38(2)(c); and,
non-distinctiveness under section 2, pursuant to paragraph 38(2)(d).
Each of these grounds turned on the issue of confusion between the respondent’s
proposed mark, GHI, and the applicant’s established mark, GIA, as well as its
related GIA & Design and GTL marks.
The Decision of the TMOB
[8]
The TMOB rejected the applicant’s Opposition.
The Officer’s decision, on behalf of the TMOB and the Registrar, sets out the
various grounds of opposition, the material dates and the onus on each party.
[9]
The Officer notes that she analyzed only the
paragraphs 12(1)(d)/38(2)(b) ground of opposition since its later
material date permitted the Officer to consider all of the applicant’s evidence
(regarding reputation) and, if the applicant were unsuccessful on this ground,
it would necessarily be unsuccessful on the others. The Officer focused
exclusively on the applicant’s GIA mark since it most closely resembled the
respondent’s GHI mark.
[10]
The Officer sets out the test for confusion in
accordance with subsection 6(2) of the Act, noting that subsection 6(2) does
not concern the confusion of the marks themselves, but of the goods or services
from one source as being from another. The Officer notes that, in applying the
test of confusion, the Registrar must have regard for all the surrounding
circumstances, including but not limited to the specific factors set out in
subsection 6(5) and these factors need not be attributed equal weight.
[11]
With respect to the inherent distinctiveness of
the trade-marks or trade-names and the extent to which they have become known
(paragraph 6(5)(a)), the Officer finds that both marks lack inherent
distinctiveness and are weak marks because they consist only of letters (citing
GSW Ltd v Great West Steel Industries Ltd, 22 CPR (2d) 154, [1975] FCJ
No 406 [GSW]). The Officer notes that trade-marks can enhance their inherent
distinctiveness through use and promotion, but that there is no evidence that
the GHI mark has been used or promoted in Canada. The Officer reviews the
affidavit evidence in some detail, noting what it does and does not address.
She then concludes that the GIA mark is more known than the GHI mark (which is
not known at all) and has acquired “some distinctiveness”
but “based on the figures provided [she] cannot conclude
that the Opponent’s mark [i.e. GIA] is well known.”
[12]
With respect to the length of time the
trade-marks or trade-names have been in use (paragraph 6(5)(b)), the
Officer notes that the affidavit evidence focuses on use of the GIA mark in Canada from 2003, although the applicant was founded in 1931 in the United States. The Officer finds
this factor favours the applicant noting that the respondent presented no
evidence of use of its mark.
[13]
The Officer notes that the nature of the
respective wares, services, business and trade (paragraphs 6(5)(c) and
(d)) are the same or overlap. The parties only diverge with respect to
their positions about the prospective consumer.
[14]
Regarding the degree of resemblance between the
trade-marks or trade-names in appearance or sound or in the ideas suggested by
them (paragraph 6(5)(e)), the Officer finds that considering the two
marks as a whole in appearance and sound, there are significant differences.
Although the two marks have two of the same three letters, the different
position of the letter ‘I’ results in a significantly different sound and
appearance, and the use of the letter G is inherently weak and should not be
given undue weight.
[15]
The Officer cites GSW, above, at para 31,
to support her view of the weakness of letter acronyms and that “comparatively small differences are sufficient to avert
confusion and a greater degree of discrimination may fairly be expected from
the public in such instances.”
[16]
The Officer also considers the additional
surrounding circumstances. She acknowledges that both parties’ marks are
registered in the United States, but finds this fact is not relevant to the
issue of confusion in Canada. She rejects other material regarding the state of
the register because it is insufficient to draw any inferences about the state
of the market place. With respect to the evidence of printouts from 11 websites
provided by the respondent, the Officer finds, among other things, insufficient
evidence to support the claim that these websites demonstrate that Canadians
are used to distinguishing between and among marks involving or based on words
such as gemological, gemology, institute, international or laboratories.
[17]
The Officer finds that, on a balance of
probabilities, there is no reasonable likelihood of confusion between the
marks. She notes that most factors favour the applicant but that the degree of
resemblance is the most crucial factor to determine confusion. She concludes:
When confronted
with letters of the alphabet that are being used as trade-marks, it may fairly
be expected that consumers would exercise a greater degree of discrimination as
a matter of first impression. Here, the differences between the marks are
sufficient to avert confusion.
[18]
With respect to confusion in the mind of
unsophisticated individual consumers, the Officer notes that there is little
evidence about this clientele and that her finding would remain the same
regardless of the type of consumer because her conclusion regarding the
likelihood of confusion was based on there being significant differences
between two inherently weak marks.
The Issues
[19]
The applicant and respondent stated the issues
slightly differently but the issues are:
Whether the new evidence submitted by the
applicant would have materially affected the TMOB’s findings of fact or the
exercise of its discretion;
If so, and based on the new and original
evidence, whether the respondent has met its burden on a de novo
analysis to show that there is no reasonable likelihood of confusion under
section 2, paragraph 12(1)(d) or subsections 16(2) and (3) of the Act
between the respondent’s mark GHI and the applicant’s mark GIA; and
If the new evidence would not have
materially affected the TMOB’s findings, whether the TMOB’s decision to reject
the applicant’s Opposition, on the basis that the trade-marks GIA and GHI are
not confusing, was reasonable.
Standard of Review
[20]
The question of whether new evidence adduced on
appeal would have materially affected the TMOB’s decision determines the
standard of review that the Court must apply when reviewing the decision.
[21]
Reasonableness is generally the standard of
review applicable on appeal from a decision of the Registrar. However, the
Federal Court of Appeal in Molson Breweries v John Labatt Ltd, [2000] 3
FC 145 at para 51, 2000 CanLII 17105 (FCA) [Molson] established that “where additional evidence is adduced in the Trial Division
that would have materially affected the Registrar's findings of fact or the
exercise of his discretion, the Trial Division judge must come to his or her
own conclusion as to the correctness of the Registrar's decision.”
[22]
In CEG License Inc v Joey's Tomato's (Canada)
Inc, 2012 FC 1541 at paras 14-16, 424 FTR 182 [CEG] (also cited in Hudson's
Bay Co v Beymen, 2013 FC 125 at para 26, 427 FTR 73 and Saint Honore
Cake Shop Ltd v Cheung's Bakery Products Ltd, 2013 FC 935 at para 21, 232
ACWS (3d) 767), Justice Manson provided the following helpful summary:
14 Given new evidence was filed by the opponent
in this matter that was not before the Opposition Board, the Court has an
unfettered discretion to consider the matter and come to its own conclusion as
to the correctness of the Board's decision, if the new evidence is significant
and would materially affect the underlying decision: (Bojangles' International,
LLC v Bojangles Café Ltd, 2006 FC 657 [Bojangles]; Mattel,
Inc v 3894207 Canada Inc, 2006 SCC 22 at paras
35, 37)
15 However, where no new significant evidence
is added on appeal, the standard of review is reasonableness simpliciter (Molson
Breweries v John Labatt Ltd, [2000] F.C.J. No. 159, [2000] 3 FC 145; Novopharm Ltd v AstraZeneca AB, 2001 FCA 296).
16 Thus, the real
question for consideration by the Court is the nature and quality of the new
evidence, and whether it materially affects the decision below, so that the
standard is correctness, or whether the new evidence is not significant and
would not materially affect the decision below, such that the standard of
review is reasonableness and considerable deference should be given to the
decision below (Telus
Corp v Orange Personal Communications Services Ltd, 2005 FC 590 at 397; aff'd 2006 FCA 6 (FCA)).
[23]
As the applicant notes, the case law uses both
the terms “correctness” and “de novo” review, but has clearly
established that where the Court finds that the new evidence would have
materially affected the decision of the TMOB, the Court must conduct the
de novo review, and it is not an option to send the matter back to the
TMOB for redetermination (Molson, above, at paras 24-29; Advance
Magazine Publishers Inc v Wise Gourmet Inc, 2009 FC 1208 at paras
36-39, 356 FTR 270 [Advance]; London Drugs Ltd v International
Clothiers Inc, 2014 FC 223 at para 34, 238 ACWS (3d) 203 [London Drugs];
CEG, above, at para 14).
[24]
On the other hand, where the Court finds that
the new evidence would not have materially affected the decision, the TMOB’s
decision will be reviewed on a reasonableness standard and deference is owed.
Where the decision is justified, transparent and intelligible and the outcome
falls within a range of possible, acceptable outcomes which are defensible in
accordance with the facts and the law, the decision will not be disturbed.
The test for new evidence
[25]
In order to determine whether new evidence would
have materially affected the Board’s decision, the Court must consider the
evidence’s nature and quality, taking into account its significance, probative
value and reliability (Bojangles’ International LLC et al v Bojangles Café
Ltd, 2006 FC 657 at para 10, 293 FTR 234 [Bojangles]; CEG,
above, at paras 16 and 20). The test is one of quality not quantity (London
Drugs, above, at para 35; Bojangles, above, at para 15; Hawke
& Company Outfitters LLC v Retail Royalty Co, 2012 FC 1539 at para 31, 424
FTR 164 [Hawke]); the new evidence cannot be merely repetitive or
supplementary to the material that was before the Board, but must add something
of significance and enhance its cogency (Telus Corp v Orange Personal
Communications Services Ltd, 2005 FC 590 at para 33, 273 FTR 228; Rothmans,
Benson & Hedges, Inc v Imperial Tobacco Products Ltd, 2014 FC 300 at para
34, 239 ACWS (3d) 473, quoting Vivat Holdings Ltd v Levi Strauss & Co,
2005 FC 707 at para 27, 139 ACWS (3d) 93; Advance, above, at paras 38
and 41; Prince v Orange Cove-Sanger Citrus Assn, 2007 FC 1229 at para 9,
322 FTR 212; Chamberlain Group, Inc v Lynx Industries Inc, 2010 FC 1287
at para 31, 379 FTR 270 [Chamberlain Group]).
The Applicant’s Overall Position
[26]
The applicant submits that the new evidence
addresses the deficiencies in the evidence noted by the TMOB, particularly
regarding the use and reputation of the GIA mark, the market share GIA holds in
Canada and the end consumer. The applicant notes that the TMOB focussed on
the inherently weak nature of the mark but acknowledged that a trade-mark can
acquire distinctiveness based on use. The GIA mark has acquired
distinctiveness; both the new and updated or improved evidence establishes that
this mark has been used for decades and is well known, including in Canada.
[27]
The applicant submits that, if the TMOB had
found that the mark was well known, which the new evidence demonstrates, the
starting point would not have been a comparison between two weak marks, and the
resemblance analysis would have been different.
[28]
This evidence of use and reputation, along with
evidence that the consumer is the wholesaler, retailer and ultimately the end
consumer, would have changed the overall analysis of confusion.
[29]
The applicant also submits that it has provided
new evidence suggesting bad faith on the part of the respondent GHI because it
appears to have chosen a similar three letter acronym to take advantage of the
goodwill of the GIA trade-mark and has not provided any evidence of how the
name was chosen.
[30]
The applicant disputes the respondent’s
criticism of the new evidence. The applicant submits that these criticisms are
based on isolated statements of the affiants and their answers on cross-examination,
taken out of context, with the implication that the affiants were unable to
answer pertinent questions or provide particular evidence. Rather, the
applicant submits that the affiants addressed the issues of use and reputation
based on their own knowledge, experience and expertise and that, cumulatively,
the new evidence establishes the use and reputation of the GIA mark among
wholesalers, retailers and, to some extent, the ultimate or end consumers. The
applicant acknowledges that some of the updated sales figures criticised by the
respondent are not materially different. However, all the other new evidence,
taken together, would have materially affected the decision.
[31]
The applicant submits, therefore, that the Court
must conduct a de novo review and assess the issue of confusion based on
the factors in section 6 of the Act.
[32]
On a de novo review, the applicant argues
that the key issue is the resemblance or similarity of the marks and the proper
application of the test for confusion, which is based on first impression and
imperfect recollection. The test is premised on the notion that the consumer
would have previously seen or been aware of the GIA mark.
The Respondent’s Overall Position
[33]
The respondent submits that the evidence
submitted on the appeal is more of the same and, while voluminous, lacks
sufficient quality to make any difference to the decision of the TMOB. The
Court should not engage in a de novo review. The decision of the TMOB is
reasonable and should not be disturbed.
[34]
The TMOB found that the mark was inherently weak
and that the new evidence does not address this inherent weakness nor establish
that the mark was sufficiently well known. The TMOB reasonably concluded that
there were significant differences between the two marks and that there would
not be confusion, regardless of whether the consumer was a wholesaler, retailer
or the ultimate buyer.
[35]
The respondent points to flaws in the new
evidence submitted by the applicant, including that it does not establish the
GIA mark’s use in Canada, that the evidence of use is largely use of the GIA
acronym along with its full name, and that there is no evidence from an
ultimate consumer of a diamond to establish their awareness of the GIA mark.
The respondent also notes that there are no surveys to establish use or
awareness of the GIA mark. In addition, the target market is the wholesaler or
retailer, a much more sophisticated or informed consumer who would not be confused
at all.
Would the new evidence submitted by the applicant on this
appeal have materially affected the TMOB’s findings of fact or the exercise of
its discretion?
The applicant’s position
[36]
The applicant notes that the TMOB identified
certain key findings and deficiencies, including that: the GIA mark was not
well known; there were significant differences between the two weak marks; the
GIA mark had been in use only since 2003; and, that there was little difference
among the consumer groups when assessing confusion.
[37]
The applicant submits that the new evidence
addresses these key findings and deficiencies cited in the Board’s decision.
Specifically, it shows: that the GIA mark has acquired distinctiveness through
its use and reputation in Canada; that the relevant consumer or market includes
the end buyer; and that the respondent is attempting to benefit from the goodwill
of the applicant’s GIA trade-mark.
[38]
The applicant argues that once the new evidence
is considered, the factual basis changes and the decision would be entirely
different.
[39]
The new evidence consists of four additional
affidavits from: Ms Kim Cino [Cino affidavit], Director of Administration for
GIA; Ms Grace Reagh [Reagh affidavit], an employee of 40 years at Birks [Birks &
Mayors Inc] in Vancouver, working in a variety of roles including in retail
sales, as store manager, as jewellery appraiser and as jewellery buyer; Dr
Robert Frank [Frank affidavit], a trade-mark searcher with experience
conducting and reviewing searches of databases and the internet; and, Dr Frank
Hawthorne [Hawthorne affidavit], a Professor of Mineralogy at the University of
Manitoba. All of these affiants, except Dr Hawthorne, were cross-examined.
[40]
The Cino affidavit focuses on the use,
reputation and market share in Canada. The Reagh affidavit focuses on the fame
and reputation of the GIA mark among retailers and consumers in Canada. Dr Frank’s affidavit provides the results of media and internet database searches
identifying whether the GIA mark is associated with the applicant and whether
the GHI mark is associated with the respondent. Dr Frank concludes that the GIA
mark is strongly associated with the applicant in the field of gemology in Canada and globally. Dr Hawthorne’s affidavit indicates his reliance on GIA as a leading
authority based on his perspective as a Professor of Mineralogy for over 40
years.
[41]
The new evidence also addresses the finding of
the TMOB that there was little evidence of the individual or end consumer
market. The applicant notes that individual consumers are the group with the
greatest likelihood of confusion as a matter of first impression when
encountering the respondent’s GHI mark with an imperfect recollection of the
GIA mark, although other consumers in the industry could also likely be confused.
[42]
The applicant further submits that the new
evidence regarding the respondent’s motivation to benefit from the goodwill of
the GIA name demonstrates an additional circumstance which would also have
materially affected the Board’s conclusion. The Cino affidavit explains that Mr
Nachum Krasnianski owns both the respondent and another competitor, EGL USA,
and that Mr Krasnianski’s actions globally and in Canada suggest that he is
seeking to register marks similar to the GIA mark (e.g., GIH and GHI) to benefit
from the goodwill of the GIA brand.
[43]
The applicant disputes the respondent’s
criticisms of the new evidence noting that none of its affiants were undermined
on cross-examination and that, cumulatively, the new evidence addresses the use
and reputation of the GIA mark, along with the relevant markets.
[44]
The applicant notes that Ms Cino does not deal
with customers and, therefore, the respondent’s focus on the fact that she has
never provided a grading certificate to a consumer or witnessed this
interaction is meaningless.
[45]
In addition, Ms Cino was not confused about the
data in the IDEX chart; she noted the obvious typo in the text but referred to
the pie chart which accurately depicts the global market share at 64%. She
noted that, in her experience, the global share is consistent with the Canadian
share and, while there was no Canadian data, she could extrapolate from the
global figures based on this experience.
[46]
In response to the respondent’s repeated
criticism that there are no surveys to indicate the use and reputation of the
GIA mark, the applicant submits that surveys are not required (Masterpiece
Inc v Alavida Lifestyles Inc, 2011 SCC 27 at paras 93-101; [2011] 2 S.C.R. 387
[Masterpiece]).
[47]
The applicant also responds that an affidavit
from a consumer of a diamond would not establish use or reputation of the GIA
mark. Such evidence would likely be criticised by the respondent as simply one
consumer’s experience and, therefore, not representative.
The respondent’s position
[48]
As noted above, the respondent submits that the
new evidence adduced by the applicant does not address the determinative
issues, is not of sufficient quality or probative value and would not have
materially affected the decision of the TMOB, and that the standard of review
should, therefore, remain reasonableness.
[49]
The respondent submits that the TMOB’s findings
were based on the significant differences between the marks themselves and the
inherently weak nature of acronyms as trade-marks. The new evidence does not
address either of these findings. Rather, it addresses the reputation of the
trade-mark GIA in Canada, the use of other acronyms as trade-marks in the field
of gemology in Canada and the channels of trade in which gemological goods and
services move. The respondent also argues that, even if the Court accepts the
new evidence, it is not of sufficient quality or probative value to show that
the GIA mark is well known and that the TMOB could have reached a different
conclusion (Bojangles).
[50]
The respondent criticizes the new evidence of
the GIA mark’s fame in Canada and argues it is based on hearsay, opinions
without factual support and flawed computer searches from a professional expert
witness based in the United States (i.e., Dr Frank). The respondent notes that
Dr Frank is not an intellectual property
lawyer or patent agent and has no apparent knowledge of Canadian law. He did
not conduct any surveys about the impressions of the consumer. The number of
“hits” in his internet searches is not evidence of whether the GIA mark is well
known.
[51]
The respondent submits that there is no
additional evidence of actual use of the applicant’s mark in Canada, other than that of sales volumes and revenues provided in the Cino affidavit, which are more
of the same. The respondent argues that the magazine ads provided by the
applicant should be discounted due to lack of circulation figures.
[52]
The respondent seeks to discredit the evidence
of Ms Cino; she was unaware of any surveys of end consumers and she never
witnessed a GIA certificate being given to an end consumer. The respondent
notes that while Ms Cino now says that GIA’s services are for the benefit of
the end consumer, she first stated that the majority of its services are for
retailers.
[53]
The respondent also points out that Ms Cino is
the Director of Administration of GIA, not a trade-mark lawyer or patent agent,
and has no legal training and was assisted by counsel in preparing her
affidavit.
[54]
The respondent also notes that Ms Reagh admitted
that the GIA credentials displayed at Birks are usually in small salons and
that customers could learn of the “4Cs of diamond quality” (colour, clarity,
cut and carat weight) from other grading laboratories, rather than the
applicant. Ms Reagh could not provide the number of customers who have
specifically requested GIA certificates. Ms Reagh had never interviewed or
surveyed consumers, indicating that there was no need.
[55]
The respondent submits that the evidence does
not support the applicant’s assertion that online retailer Blue Nile uses GIA
reports. That company’s own website includes references to several other
grading laboratories and does not favour the applicant’s grading certificates.
[56]
The respondent further submits that there is no
explanation of how Dr Hawthorne’s professional expertise allows him to comment
on the perception of the applicant by other members of the gemological field.
Even if he is an expert, he is only one opinion and this cannot establish the
fame of the mark.
[57]
More generally,
the respondent submits that there is nothing new in the evidence. The respondent repeatedly notes that none of the affiants could
point to any surveys of Canadian consumers to determine actual consumer opinion
of the trade-mark GIA. There is no evidence
of how the end consumer perceives GIA although it would have been easy to
provide this, for example by way of an affidavit of a consumer.
[58]
Even if the evidence demonstrates that the
applicant’s GIA mark is well known, the respondent argues that it would not
have materially affected the TMOB’s decision overall, which was based on the
significant differences between the two weak marks.
[59]
The respondent argues that the new evidence does
not show that individual consumers are the ultimate target market for the
applicant’s grading reports and services. Ms Cino’s evidence that grading reports
are passed on to and used by end consumers is hearsay, based only on
conversations with retailers. The respondent argues that individual consumers
of jewellery are not the ultimate target market for reports and grading
services. Retailers and wholesalers are the
purchasers of grading reports and they do not get confused.
[60]
However, even if the relevant customers are the
end consumers, the respondent further argues that the decision would not have
been different because the TMOB found that no consumer would likely be confused
because of the significant differences between the two inherently weak marks.
[61]
The respondent disputes, but does not address,
the allegations of bad faith in pursuing the registration of its own GHI mark
and counters that the applicant is simply attempting to suppress a smaller
competitor.
The
new evidence would have materially affected the TMOB’s findings of fact or the
exercise of its discretion
[62]
The Court is required to put itself into the
mind of the TMOB to assess whether the new evidence – had it been provided to
the Hearing Officer – would have made a difference to the result. The question
is whether the new evidence addresses the deficiencies noted by the TMOB which
led to its findings and whether that evidence has sufficient significance or
probative value that it would have changed the factual basis for the decision
or otherwise materially affected the decision.
[63]
The TMOB found deficiencies in the original
evidence regarding whether the GIA trade-mark was well known and who the
ultimate consumer was, although the TMOB noted that the outcome would be the
same regardless of the consumer. The TMOB also noted that a trade-mark could
become distinctive through use, but the TMOB did not agree that this had
occurred.
[64]
The new evidence addresses the issue of acquired
distinctiveness. The TMOB found that the GIA mark had not acquired
distinctiveness and was inherently weak, with small differences being
sufficient to avoid confusion, based on its conclusion that the mark was a
three letter acronym and that it was not well known.
[65]
This finding of inherent weakness influenced the
analysis of the degree of resemblance, as noted by the Officer’s reference to GSW,
and her conclusion on confusion. The new evidence demonstrates that the GIA
mark is much more known and, among retailers, is very well known. The new
evidence would therefore change the starting point for the resemblance
analysis.
[66]
The Cino affidavit provides evidence of use,
advertising, reputation and market share in Canada to show that the applicant’s
GIA marks were well known in Canada at all material dates. For example, the
Cino affidavit provides evidence of the use of reports by diamond and jewellery
traders and by end consumers. It also provides evidence of Canadian sales
figures, which although not significantly different than the previous evidence,
were explained as not including sales in Canada made via US intermediaries. The
Cino affidavit also provides evidence of GIA’s global market share as set out
in the IDEX report and the affiant’s opinion, based on her experience and
knowledge, that the Canadian market share is similar. The Cino affidavit also
sets out: the services provided to law enforcement and museums; educational
initiatives of GIA hosted or offered in conjunction with Canadian universities,
including distance education with enrolment figures provided dating back to the
1970s (noting 5000 students total, with 2500 alumni on its mailing list);
information on the number of users of the website and mobile app for Canada and
globally; trade show attendance numbers; and GIA advertising dating back to the
1970s.
[67]
The IDEX article cited by the affiant, which
depicts GIA’s global market share of grading reports, was criticised by the
respondent who argued that the figures add up to more than 100%. However, this
was proactively noted by Ms Cino to be a typographical error and the graphic
depiction makes it very clear that the global market share for GIA was 64%, the
largest of any other and all the shares combined.
[68]
The Reagh affidavit provides additional evidence
of the reputation of the GIA mark among retailers and consumers in Canada from
the perspective of Ms Reagh’s 39 year history with Birks and in the diamond and
jewellery industry, including: Birks’ almost exclusive use of the applicant’s
diamond grading reports since 1981; the practice to discuss the “4C’s of
diamond quality” with customers as part of the sales approach or script; and,
requests for the applicant’s grading reports from those customers who make
requests for reports.
[69]
Ms Reagh also expressed the opinion that GIA’s
credentials were the most reputable and desirable and were displayed in Birks’
stores. She indicated that most diamond jewellery is sold with a grading report
and that GIA’s reports are the most trusted. She stated that anyone in the trade is completely aware of GIA, their
services and their fine reputation.
[70]
With respect to online retailer Blue Nile’s reliance on GIA, the documentary evidence (i.e. printouts from its website)
shows many references to GIA, some along with other services. That Blue Nile
also uses other laboratories or grading services does not diminish the fact
that it uses GIA’s.
[71]
The Frank affidavit provides new evidence of
search results from media databases and the Internet showing the GIA mark as
associated with the applicant in the field of gemology, both in Canada and globally. Dr Frank’s evidence withstood the scrutiny of the respondent who
challenged his credentials, methodology and whether the results actually demonstrated
use of the trade-mark.
[72]
Dr Frank acknowledged that he was not legally
trained, but attested that he had a great deal of experience and has, through
extensive reading of case law, learned about Canadian trade-mark law regarding
famous marks.
[73]
With respect to the respondent’s criticism of
some of his databases, Dr Frank indicated that any inaccuracies in the
information retrieved from Infomart would be due to inaccuracies in the
original versions that were posted electronically and that the database itself is
reliable.
[74]
Dr Frank explained that the purpose of
conducting research on the Internet by means of search engines such as Yahoo
and Google is to determine the amount, frequency and type of exposure that a
particular word or phrase has to members of the public who seek information on
the Internet. He explained his approach as broad – to try to replicate the
behaviours that a consumer who would be familiar with “GIA” would demonstrate
if trying to find information about either GIA or the Gemological Institute of
America.
[75]
Dr Frank indicated that the database searches do
not demonstrate conclusively what is in the mind of the consumer about the
source and origin of the trade-mark. The results are factual; they are not
subjective and were not intended to be.
[76]
In response to the respondent’s criticism that
the number of “hits” was not sufficient evidence of use and did not show
recognition of the trade-mark, Dr Frank indicated that the articles he
presented were a sampling and that there were 4,600 records total. He explained
that the purpose was to give a representative sample from which reasonable
inferences could be drawn. When asked how many references in the general media
to a trade-mark and a term would show “global recognition,” Dr Frank indicated
that there was no exact number, but that 15 examples of third party use would
likely establish this. He expressed the view that his results showed that GIA
is a well known or well recognized mark and is associated with Gemological
Institute of America in Canada.
[77]
He added that, based upon his years of doing
this research and the validation that he has performed of the accuracy of the
(Dialog) database, he is highly confident that GIA, other than when being used
as a person’s name (which is a very, very small percentage), is in the jewellery
industry almost always associated with Gemological Institute of America.
[78]
With respect to the relevant customer, the
new evidence indicates that individual consumers are the ultimate target market
for the applicant’s grading reports. The new evidence adduced by the applicant
is more than the “little evidence concerning this
portion of the parties’ trade/clientele,” as found by the TMOB.
[79]
The Cino affidavit confirms that, while the
applicant’s direct clients for diamond grading reports are mostly members of
the diamond and jewellery trade, every grading report is for the benefit and
ultimate use of the end consumer (i.e. the jewellery owner). Ms Cino confirmed
on cross-examination that business decisions all have the end consumer in mind.
Ms Cino did not contradict the other affiants; she agreed that the larger
direct market is the trade, but stated that it also includes the end consumer.
[80]
Ms Cino indicated on cross-examination that she
has never witnessed a certificate being given to the end consumer. However, she
does not work in retail stores and this would not be expected. Rather, Ms
Reagh’s evidence addressed this issue; she indicated that certificates were
provided to end consumers and she relayed
her extensive experience dealing with end consumers over her 39 years at Birks.
[81]
The respondent carefully scrutinised the new
evidence to argue that it is simply more of the same and, to the extent that
any of it is new, it is not probative. However, many of the flaws and
criticisms highlighted by the respondent, which are based on the affidavits and
cross-examination of Ms Cino, Ms Reagh and Dr Frank, have been taken out of
context and with high expectations of what ideal evidence should be. When all
the new evidence is considered together and in the proper context, I am of the
view that it would have materially affected the decision of the TMOB.
[82]
The new evidence of use of the trade-mark GIA
and GIA’s reputation is both more significant and different in several respects
than the evidence provided to the TMOB. The TMOB would have approached the
analysis of the overall strength of the mark and the resemblance with GHI
differently if it had recognized the reputation of the GIA mark.
[83]
In addition, while the ultimate consumer may not
be the primary target market for the full range of the applicant’s wares and
services, the new evidence sufficiently establishes that the ultimate consumer
of the gems or jewellery is an important part of the target market. In my view,
this is also common sense. A wholesaler or retailer does not rely on the wares
and services of the applicant only for their own benefit without considering
the ultimate consumer. Jewellery wholesalers and retailers do not hoard
diamonds and other gems except for the purpose of ultimate sale to a consumer.
The individual consumer must be considered as part of the market and the
confusion analysis cannot ignore this aspect.
[84]
The respondent contends that wholesalers and
retailers are the primary market and they would not be confused. That may be
true for wholesalers and retailers who have long dealt with the applicant and
are then presented with the mark of the respondent, particularly given the
reputation of the applicant for decades and the use of many acronyms in the
trade. However, the test for confusion is the first impression based on
imperfect recollection. Some retailers would likely be confused on first
impression if they had not had extensive dealings with the applicant.
[85]
Moreover, the confusion is assessed from the
perspective of the mythical customer or consumer (Mattel, Inc v 3894207 Canada Inc, 2006 SCC 22
at paras 56-58, [2006] 1 S.C.R. 772 [Mattel]; that consumer includes the
whole range from the large wholesalers to jewellery makers to large and small
retailers and ultimately the end consumer.
[86]
The respondent argues that the new evidence was
analogous to some extent to that in Hawke, above, because Ms Cino had
referred to her affidavit as “supplementing” the three original affidavits.
Regardless of how Ms Cino may have characterized her new affidavit, its
content and her evidence on cross-examination supports the finding that there
is sufficient new evidence of a better quality to call for a de novo
review.
[87]
In Hawke, Justice de Montigny found that
one of the new affidavits merely corrected erroneous references about the
nature of the wares and provided information that post-dated the relevant dates
for the confusion analysis. The other new affidavit did not address the
Officer’s concerns or the most critical finding.
[88]
That is not the situation here. In this case,
new evidence has been submitted by the applicant that affects the foundation
for the key findings of the Registrar – namely, the use and reputation of the
mark – and, in turn, the confusion analysis.
[89]
There is no need to address the applicant’s assertion
that new evidence suggests bad faith on the part of the respondent given that
the other evidence is sufficient to find that the decision of the TMOB would
have been materially affected. In addition, as noted in Chamberlain Group,
above at para 53, a confusion analysis would not be influenced one way
or the other by evidence of bad faith.
De novo review; based on
the new and original evidence, has the respondent established that there is no
reasonable likelihood of confusion between its GHI mark and the applicant’s GIA
mark?
The applicant’s position
[90]
The applicant reiterates the arguments advanced
to demonstrate that the new evidence would have materially affected the
decision of the TMOB and highlights particular aspects of the evidence. The
applicant submits that the respondent has not discharged its burden of showing
that there is no reasonable likelihood of confusion between the marks. The
proper application of the test for confusion would lead to the finding that the
customer would likely be confused.
[91]
The applicant submits that not everyone has to
be confused and whether some or even many are not confused is not the test. The
applicant points to Canada Post Corp v Paxton Developments Inc (2000),
198 FTR 72 at para 12, 101 ACWS (3d) 1160 [Canada Post], where the
Federal Court found that there need not be evidence that a majority of
consumers would be confused, rather a sufficient number to get over the de
minimus rule. The “average consumer” does not mean a majority of consumers.
In Canada Post, the Court relied on survey information indicating that 9%
of those surveyed were confused, yet found that to be sufficient evidence of
actual confusion by a significant number of consumers (above, at para 21).
[92]
The applicant acknowledges that acronyms, such
as the two marks in question, have low degrees of inherent distinctiveness.
However, distinctiveness can be acquired through use and reputation (GSW,
above, at para 51; Lee Canada Inc v Jones Investments Co (2008), 71 CPR
(4th) 112 (TMOB) at paras 25 and 32). The new evidence on appeal
establishes significant and long-term use of the GIA mark in Canada in the field of gemology (including laboratory services, education and research),
showing it to be well known. With regard to diamond grading reports, it is the
longest standing and most reputable name in the industry, and commands the
largest market share globally and in Canada.
[93]
The applicant submits that considered as a
whole, the GIA mark has a higher degree of acquired distinctiveness than
understood by the TMOB and is not weak. There is no evidence of use or
reputation of the respondent’s mark, GHI, in Canada other than a very few hits
revealed by Dr Frank. Accordingly, this factor strongly favours the applicant.
[94]
The applicant submits that the GIA mark has been
in use longer than since 2003 as found by the TMOB. Although the TMOB found
that the factor of length of time in use favoured GIA, because there was no use
of GHI, the applicant submits that GIA’s decades of use are relevant to its
reputation.
[95]
With respect to the degree of resemblance, the
applicant argues that the two marks are more similar than different. When
considered as a whole, from the perspective of the average consumer with an
imperfect recollection, the marks share a high degree of resemblance and the
consumer would likely be confused.
[96]
The applicant acknowledges that bad faith will
not “make or break” the confusion analysis, but submits that, where a mark
exists, the burden is on the newcomer to take care not to adopt a similar and
confusing mark. The applicant argues that there were plenty of other business
names and corresponding acronyms available, even if the word “Gemological” and
the use of “G” remained.
The respondent’s position
[97]
The respondent does not directly respond to the
new evidence in the context of a de novo review because it denies that
the new evidence on appeal would have materially affected the decision of the
TMOB and submits that reasonableness remains the standard of review.
[98]
However, the respondent’s arguments regarding
the inadequacy of the new evidence and the reasonableness of the decision have
been considered to assess whether, on a de novo analysis, it has
discharged its burden to establish that the consumer would not likely be
confused.
[99]
As noted above, the respondent contends that the
applicant’s new evidence lacks in probative value, is insufficient and is
contradicted by the respondent’s own affidavits, which indicate that few
customers request a particular company for grading and many diamond and
gemstone grading laboratories use three letter acronyms.
[100] The respondent filed affidavits from: Mr Barry Katzen, a diamond
distributor, indicating among other things that only approximately 1% of
customers request a particular company for grading; Trish Haley, a corporate
searcher, providing printouts of web pages of third party diamond and gemstone
grading laboratories, many of which use three letter acronyms; and, Mr Shalyshkin,
manager at the Vancouver Office of EGL Canada, a competitor, noting that EGL
is fairly well known in Canada and shares the market with many other
competitors, several of which have trade-marks or trade names known by three
letter acronyms.
The relevant jurisprudence regarding confusion
[101] The jurisprudence has established that the onus is on the party that
applies for the trade-mark registration (in this case, the respondent) to show
on a balance of probabilities, that there is no likelihood of confusion (Mattel,
above, at para 54). This remains the case on a de novo review where new
evidence has been accepted.
[102] In Chamberlaine
Group, above, at para 38, Justice Hughes
noted that the issue is whether confusion is “likely”.
[103] In GSW, the Court set out two principles. The TMOB relied on
the principle regarding acronyms, quoting GSW at para 31:
31 In short, where
a trader has appropriated letters of the alphabet as a design mark without
accompanying distinctive indicia, and seeks to prevent other traders from doing the same thing, the
range of protection to be given that trader should be more limited than in the
case of a unique trade mark and comparatively small differences are sufficient
to avert confusion and a greater degree of discrimination may fairly be
expected from the public in such instances. (See Lord Simond's remarks
concerning trade names in Office
Cleaning Services Ltd. v. Westminster Office Cleaning Assn. (1944), 61 R.P.C. 133 (Eng. C.A.) at p. 135.)
[104] However, at para 51, the Court in GSW added that a weak mark
may gain distinctiveness through use:
51 In so stating
the Registrar was giving effect to the principles which I have stated above,
that is that letters not being inherently distinctive they constitute a
"weak" mark and as such, small differences may be accepted to
distinguish one mark from another. However a "weak" mark by long and
extensive use might become distinctive…
[105]
As noted by Justice Mainville in Advance,
at para 48, after citing the test from Veuve Clicquot Ponsardin v Boutiques
Cliquot Ltée, 2006 SCC 23 at para 20, [2006] 1 S.C.R. 824: “The principal question is whether the ‘ordinary casual
consumers somewhat in a hurry are likely to be deceived about the origin of the
wares or services’ (Mattel, supra at para 58).”
[106] In Mattel, at paras 56-58,
Justice Binnie elaborated on the notion of the mythical
casual consumer noting that this person is not the careful
and diligent purchaser, nor the “moron in a hurry”, but falls somewhere in
between and is not devoid of intelligence or the normal powers of recollection.
Justice Binnie also noted that a consumer does not approach every purchase with
the same degree of attention and suggested that more care would be taken with
larger, more expensive purchases, though in any event, the test remained the
same. He noted at para 58:
To those mythical
consumers, the existence of trade-marks or brands makes shopping decisions
faster and easier. The law recognizes that at the time the new trade-mark
catches their eye, they will have only a general and not very precise
recollection of the earlier trade-mark, famous though it may be or, as stated
in Coca-Cola Co. of Canada Ltd. v. Pepsi-Cola Co. of Canada Ltd., [1942]
2 D.L.R. 657 (P.C.), “as it would be remembered by persons possessed of an
average memory with its usual imperfections” (p. 661). The standard
is not that of people “who never notice anything” but of persons who take no
more than “ordinary care to observe that which is staring them in the face”: Coombe
v. Mendit Ld. (1913), 30 R.P.C. 709 (Ch. D.), at p. 717. However, if
ordinary casual consumers somewhat in a hurry are likely to be deceived about
the origin of the wares or services, then the statutory test is met.
[107]
In Masterpiece, Justice Rothstein addressed
the test for confusion in the context of expungement of a trade-mark. With
respect to the perspective of the mythical consumer, the Court clarified that
the test must be applied in all situations, but is flexible to fit the context
and the perspective remains largely the same, regardless of the products,
services or wares purchased. Justice Rothstein noted, at para 69, that the test
focuses on the consumer as they approach the purchase and encounter the trade-mark
and not to the research they may do afterward before finalizing the purchase.
In addition, while the consumer of expensive goods may be more attentive, it is
still their first impression and imperfect recollection of the trade-mark that is
relevant (at para 70).
[108] Justice Rothstein stated at para 72:
[72] This
distinction is important because even with this increased attentiveness, it may
still be likely that a consumer shopping for expensive goods and services will
be confused by the trade-marks they encounter. Careful research and
deliberation may dispel any trade-mark confusion that may have arisen.
However, that cannot mean that consumers of expensive goods, through
their own caution and wariness, should lose the benefit of trade-mark
protection. It is confusion when they encounter the trade-marks that is
relevant. Careful research which may later remedy confusion does not mean
that no confusion ever existed or that it will not continue to exist in the
minds of consumers who did not carry out that research.
[109]
And later at para 73, he added, “Consumers of expensive wares or services and owners of the
associated trade-marks are entitled to trade-mark guidance and protection as
much as those acquiring and selling inexpensive wares or services.”
Application of the Statutory Test; The Respondent has not
established that there is no reasonable likelihood of confusion between its GHI
mark and the Applicant’s GIA Mark
[110] I have carefully reviewed all the evidence, including the
transcripts of the cross‑examinations of the affiants, and have
considered the factors set out in subsection 6(5) in light of the new evidence.
[111] With respect to the inherent distinctiveness of the GIA trade-
mark and the extent to which it has become known, the evidence shows, as a
whole, that the GIA mark has acquired a higher degree of distinctiveness
through use and has a strong reputation. There is no evidence of use or
reputation of the respondent’s mark, GHI, in Canada other than the very few
hits revealed by Dr Frank in his search.
[112] With respect to the length of time in use, the evidence
demonstrates that the GIA mark has been in use far longer than 2003, as was
found by the Board. The TMOB had acknowledged that GIA was founded in 1931, but
noted that the evidence of use provided to it was more recent. The new evidence
establishes, however, that the GIA mark has been used in Canada for several decades.
[113] For example, the reprint of a trade article attached to Ms Cino’s
affidavit includes an excerpt from a 1955 publication that noted GIA’s use in Canada in the retail jewellery trade for many years. In addition, her affidavit confirms
that educational services have been provided by GIA in Canada since at least 1969 and that GIA has advertised in Canada since the 1970s. In addition, the
claim for first use in Canada of the GIA & Design mark was in 1949.
[114] With respect to the reputation of the GIA mark more generally, Ms
Reagh’s personal knowledge, based on 39 years of experience, and her strong
statement about GIA’s reputation in Canada among retailers supports the finding
that GIA is well known and has a strong reputation particularly in the
industry, which has endured for many years. As she noted in her
cross-examination, anyone in the trade is completely aware of GIA, their
services, and their fine reputation.
[115] Dr Hawthorne’s affidavit, despite the respondent’s criticisms,
confirms the reputation of GIA from his academic perspective.
[116] With respect to the nature of the parties’ wares, services,
businesses and trade, there is no dispute that these are either the same or
there is a direct overlap.
[117] In considering the degree of resemblance, I find that the two
marks are very similar; both marks are three letter acronyms, sharing two of
the same letters and both beginning with the letter “G”. Although the “G”
stands for a word that identifies the wares (gemological), it need not be the
first word in the name or the first letter if a similar business were looking
for distinctiveness. Both marks contain an “I”. While “A” and “H” are not
similar when written, they can sound the same. Moreover, because the otherwise
weak GIA mark has gained distinctiveness due to use and reputation, it deserves
protection and small differences in the marks of others will no longer be
enough to avert confusion.
[118] Although the applicant pointed to three new surrounding
circumstances, the most relevant relates to the consumer market. As
previously noted, the new evidence demonstrates that the individual purchaser
of diamonds is a relevant and important market to consider. This group is a
target market for the GIA grading reports, although perhaps not its key one,
and the applicant’s mandate includes educating the public (e.g. about the 4Cs
of diamond quality) and ensuring public trust (e.g. providing grading reports
for transmission to consumers). As noted above, the end consumer cannot be
ignored as part of the market. Wholesalers and retailers are in business to
sell to an ultimate consumer – the person who will wear the jewellery.
[119] This consumer group would have a greater likelihood of confusion as
a matter of first impression when encountering the respondent’s mark with an
imperfect recollection of the applicant’s mark: while the consumer may have
heard of GIA, or seen its mark, it would not readily distinguish it from other
trade-marks, particularly other three letter acronyms.
[120] In addition, the perspective of the consumer remains largely the same,
even though, in this context, the purchaser may be more attentive when making
an infrequent and expensive purchase.
[121] The consumer may do some online browsing before heading to a
jewellery retailer or some preliminary in-store browsing before narrowing down
their choices. The consumer may also discuss or seek advice of friends or others
who have made similar purchases. Or the consumer may see ads in magazines,
flyers or elsewhere. Some exposure to the GIA mark is possible if the consumer
is considering a jewellery purchase or is simply observant of jewellery. Upon
approaching a retailer with the intention of making a purchase, the consumer
could be confronted with the GHI mark rather than the GIA mark he or she was
previously exposed to. The consumer’s first impression with his or her
imperfect recollection would likely lead them to be confused and think it was
the same mark.
[122] The fact that, upon further consideration or research or comparison,
they realize it is different does not change the first impression.
[123] As noted above, the smaller retailer or retailers new to the
industry without previous relationships with the GIA wares and services and
trade-mark could also likely be confused.
[124] All the factors and the surrounding circumstances favour the
applicant. The degree of resemblance is strong and, as a matter of first
impression, I find that the differences between the two marks are not
sufficient to avoid confusion.
[125] The respondent’s new evidence and the respondent’s careful scrutiny
of the applicant’s new evidence have not undermined the applicant’s new
evidence or its support for the relevant factors. The respondent has not
discharged its burden to show that, on a balance of probabilities, there is no
reasonable likelihood of confusion between the marks.
Conclusion
[126] Although the GIA trade-mark is not inherently distinctive, it has
been used over a significant period of time in Canada which has resulted in its
enhanced reputation in the industry and consumer market in Canada.
[127] The new evidence demonstrates that the GIA trade-mark is well known
and that the relevant consumer market includes the wholesaler, retailer and end
consumer. With this new evidence the TMOB would have approached the confusion
analysis differently – and not from the position of comparing two inherently
weak marks.
[128] On the de novo review, that same evidence has been carefully
considered along with the respondent’s criticism of the evidence and the
respondent’s own evidence. All the relevant factors of subsection 6(5) of the
Act and the surrounding circumstances favour the applicant. I find that the
respondent has not met its burden of establishing, on a balance of
probabilities, that there is no reasonable likelihood of confusion between the
respondent’s mark GHI and the registered trade-mark GIA.
[129] Therefore, the Court allows the appeal with costs and refuses the
respondent’s application (Appl No 1, 289, 031) to register the mark GHI.
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