Docket:
T-942-13
Citation:
2014 FC 442
Ottawa, Ontario, May 8,
2014
PRESENT: The
Honourable Mr. Justice Peter Annis
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BETWEEN:
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RIDOUT & MAYBEE LLP
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Applicant
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and
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HJ HEINZ COMPANY AUSTRALIA LTD.
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Respondent
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JUDGMENT AND REASONS
I.
Introduction
[1]
This application is an appeal pursuant to
section 56 of the Trade-marks Act, RSC 1985, c T-13 [the Act]
from a decision [“the Decision”] by the Registrar
of Trade-marks, 2013 TMOB 49, maintaining the respondent’s trade-mark
registration No TMA650,968 pursuant to section 45 of the Act.
[2]
For the reasons which follow, the application is
dismissed.
II.
Facts
[3]
On October 20, 2005, HJ Heinz Company Australia
Ltd [Heinz] registered the trade-mark OX & PALM in Canada for use in association with wares of meat and processed meats, namely corned meat and tinned
meat.
[4]
Heinz then set to work to secure a Canadian
distributor. It incorrectly believed that once it obtained Canadian Food
Inspection Agency approval for its OX & PALM corned beef, it needed to
deliver the product in Canada within six months. It therefore waited to apply
for approval until February 2009 while it arranged distribution.
[5]
From June 2009, its prospective distributor,
Mangal’s Market & Co, LLC [Mangal’s], pursued negotiations with T&T
Supermarkets to purchase the product, but negotiations were unexpectedly
derailed when Loblaws acquired T&T.
[6]
In April 2010, Mangal’s opened negotiations with
a different customer, Centennial Foodservice – Worldsource [Centennial], a Calgary company. These were successful and Centennial agreed to buy 1,660 cartons of OX
& PALM corned beef.
[7]
In June 2010, the offer to Centennial to
purchase was made by Mangal’s on behalf of Heinz.
[8]
On June 7, 2010, the offer was accepted by
Centennial with the issuance of a purchase order.
[9]
In June, July, and August, several receipts and
commercial invoices were issued, all confirming Centennial’s purchase of OX
& PALM corned beef.
[10]
On July 30, 2010, the shipment of OX & PALM
corned beef left Australia for delivery to Centennial, as evidenced by the Bill
of Lading and Canada Customs Invoice.
[11]
On August 16, 2010, the applicant requested that
the Registrar issue a notice to the respondent pursuant to section 45 of the Act
in respect of the OX & PALM registration.
[12]
On August 19, 2010, Mangal’s received payment,
by way of bank wire transfer, in an amount exceeding $70,000 US, from
Centennial, in respect of the OX & PALM corned beef.
[13]
On August 25, 2010, the Registrar issued the
notice requested by the applicant. The notice required the respondent to
submit evidence showing that it had used the trade-mark OX & PALM in Canada in connection with the OX & PALM Wares during the three-year period beginning on
August 25, 2007, and ending on August 25, 2010 [the “Relevant
Period”]. Alternatively, if the trade-mark OX
& PALM had not been used, the respondent was required to submit evidence
demonstrating the date on which the trade-mark was last used in Canada and exceptional circumstances justifying non-use of the mark.
[14]
On August 28, 2010, the OX & PALM corned
beef arrived in the port of Vancouver. Centennial received the wares and sold
them to retailers in the greater Vancouver area.
[15]
On October 20, 2010, McCallum Industries Limited
[“McCallum”]
commenced a concurrent and corresponding Federal Court application to expunge
Heinz’s OX & PALM registration under section 57 of the Act.
McCallum was represented by the law firm of Ridout & Maybee in that
proceeding as well.
[16]
On October 26, 2011, in McCallum Industries
Ltd v HJ Heinz Company Australia Ltd, 2011 FC 1216, Justice Pinard of the
Federal Court rejected the application by McCallum to expunge the trade-mark.
[17]
On January 9, 2011, Justice Pinard’s decision
was upheld by the Federal Court of Appeal in McCallum Industries Ltd v HJ
Heinz Company Australia Ltd, 2013 FCA 5.
[18]
Tinned meat products bearing the trade-mark OX
& PALM were sold by retailers in the Vancouver area in January 2011.
[19]
On March 21, 2013, further to the notice
requiring evidence of use, and having received written and oral submissions
from both the applicant and the respondent, the Registrar issued a decision
with regard to use of the trade-mark OX & PALM in Canada pursuant to
section 45 of the Act.
[20]
The Registrar found, on the basis of the
evidence submitted by the respondent, that the trade-mark OX & PALM had
been used in Canada by the respondent during the Relevant Period.
III.
Contested decision
[21]
The Registrar noted the applicant’s argument
that in order for use of a trade-mark to have occurred as of a certain date,
among other things there must have been a transfer of actual possession of the
wares, which the applicant submitted followed from the decision in Manhattan
Industries Inc v Princeton Manufacturing Ltd (1971), 4 CPR (2d) 6, [1971]
FCJ No 1012 (QL) (TD) [Manhattan Industries]. Accordingly, the applicant
argued that because the respondent did not take actual possession of the wares
in Canada during the Relevant Period, use of the wares did not occur in
accordance with section 4 of the Act. The Registrar nonetheless agreed
with the respondent, relying on the decision of Fetherstonhaugh & Co v
ConAgra Foods Inc, 2002 FCT 1257, 23 CPR (4th) 49 [ConAgra], that
the use of a trade-mark pursuant to section 4 of the Act occurred when
an order for a substantial amount of trade-marked goods was placed and accepted
prior to the expiry of the Relevant Period, when delivery of the goods and
fulfillment of the purchase occurred soon thereafter.
[22]
The Registrar distinguished Manhattan
Industries and related jurisprudence cited by the applicant on the basis
that establishing the date of first use in those cases was for entitlement
purposes or with respect to a ground of opposition based on section 30(b)
of the Act. She noted that section 45 proceedings were intended to be
simple, summary and expeditious for the purpose of removing “deadwood” from the register. On this basis she
concluded that it was not appropriate to necessarily adopt the same stringent
and technical approach with respect to the timing of use of a mark when
contemplating expungement under section 45 of the Act. The Registrar
also noted that ConAgra had been relied upon in this fashion in various
other decisions of the Board.
[23]
The Registrar, in what appears to be a reference
concerning the issue of special circumstances to excuse the absence of use
under section 45(3), noted that shipping from Australia required almost one
month. She offered that had the wares originated in closer proximity, the issue
of use of the trade-mark during the Relevant Period would not likely have
arisen.
IV.
Statutory Provisions
[24]
The statutory provisions of the Trade-marks
Act are:
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4. (1) A trade-mark is deemed to be used in association with
wares if, at the time of the transfer of the property in or possession of
the wares, in the normal course of trade, it is marked on the wares
themselves or on the packages in which they are distributed or it is in any
other manner so associated with the wares that notice of the association is
then given to the person to whom the property or possession is transferred.
(2) A trade-mark is
deemed to be used in association with services if it is used or displayed in
the performance or advertising of those services.
(3) A trade-mark
that is marked in Canada on wares or on the packages in which they are
contained is, when the wares are exported from Canada, deemed to be used
in Canada in association with those wares.
[…]
30. An applicant for the registration of a trade-mark shall file with
the Registrar an application containing
[. . .]
(b) in the
case of a trade-mark that has been used in Canada, the date from which the
applicant or his named predecessors in title, if any, have so used the
trade-mark in association with each of the general classes of wares or
services described in the application;
[…]
45. (1) The Registrar may at any time and, at the written request
made after three years from the date of the registration of a trade-mark by
any person who pays the prescribed fee shall, unless the Registrar sees good
reason to the contrary, give notice to the registered owner of the trade-mark
requiring the registered owner to furnish within three months an affidavit or
a statutory declaration showing, with respect to each of the wares or
services specified in the registration, whether the trade-mark was in use
in Canada at any time during the three year period immediately preceding the
date of the notice and, if not, the date when it was last so in use and
the reason for the absence of such use since that date.
[…]
(3) Where, by
reason of the evidence furnished to the Registrar or the failure to furnish
any evidence, it appears to the Registrar that a trade-mark, either with
respect to all of the wares or services specified in the registration or with
respect to any of those wares or services, was not used in Canada at any time
during the three year period immediately preceding the date of the notice and
that the absence of use has not been due to special circumstances that
excuse the absence of use, the registration of the trade-mark is liable
to be expunged or amended accordingly.
[Emphasis added]
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4. (1) Une marque de commerce est réputée
employée en liaison avec des marchandises si, lors du transfert de la
propriété ou de la possession de ces marchandises, dans la pratique
normale du commerce, elle est apposée sur les marchandises mêmes ou sur les
colis dans lesquels ces marchandises sont distribuées, ou si elle est, de
toute autre manière, liée aux marchandises à tel point qu’avis de liaison est
alors donné à la personne à qui la propriété ou possession est transférée.
(2) Une marque de
commerce est réputée employée en liaison avec des services si elle est
employée ou montrée dans l’exécution ou l’annonce de ces services.
(3) Une marque de
commerce mise au Canada sur des marchandises ou sur les colis qui les
contiennent est réputée, quand ces marchandises sont exportées du Canada,
être employée dans ce pays en liaison avec ces marchandises
[…]
30. Quiconque sollicite l’enregistrement d’une
marque de commerce produit au bureau du registraire une demande renfermant :
[. . .]
b) dans le cas d’une marque de commerce qui a
été employée au Canada, la date à compter de laquelle le requérant ou ses
prédécesseurs en titre désignés, le cas échéant, ont ainsi employé la marque
de commerce en liaison avec chacune des catégories générales de marchandises
ou services décrites dans la demande;
[…]
45. (1) Le registraire peut, et doit sur
demande écrite présentée après trois années à compter de la date de
l’enregistrement d’une marque de commerce, par une personne qui verse les
droits prescrits, à moins qu’il ne voie une raison valable à l’effet
contraire, donner au propriétaire inscrit un avis lui enjoignant de fournir,
dans les trois mois, un affidavit ou une déclaration solennelle indiquant, à
l’égard de chacune des marchandises ou de chacun des services que spécifie
l’enregistrement, si la marque de commerce a été employée au Canada à un
moment quelconque au cours des trois ans précédant la date de l’avis et,
dans la négative, la date où elle a été ainsi employée en dernier lieu et la
raison de son défaut d’emploi depuis cette date.
[…]
(3) Lorsqu’il
apparaît au registraire, en raison de la preuve qui lui est fournie ou du
défaut de fournir une telle preuve, que la marque de commerce, soit à l’égard
de la totalité des marchandises ou services spécifiés dans l’enregistrement,
soit à l’égard de l’une de ces marchandises ou de l’un de ces services, n’a
été employée au Canada à aucun moment au cours des trois ans précédant la
date de l’avis et que le défaut d’emploi n’a pas été attribuable à des
circonstances spéciales qui le justifient, l’enregistrement de cette
marque de commerce est susceptible de radiation ou de modification en
conséquence.
[Je souligne]
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[25]
Ridout & Maybee appealed the Registrar’s
decision.
V.
Issues
[26]
The issues are:
a. What
is the appropriate standard of review?
b. Was
the Registrar’s interpretation reasonable in finding that the respondent had
used the trade-mark within Canada during the Relevant Period?
c. If
use in Canada did not occur within the Relevant Period, could the Registrar
have found that this was due to special circumstances that excused the absence
of use?
VI.
Analysis
A.
Standard of review
[27]
The parties agree that the standard of review
for an appeal of a Registrar’s decision pursuant to section 45 in which no new
evidence is filed before the Court is reasonableness (Brouillette Kosie
Prince v Great Harvest Franchising, Inc, 2009 FC 48 at para 23). In the
present case the only evidence filed is an affidavit introducing a certified
copy of the Registrar’s file, which the parties do not consider to be new
evidence.
[28]
Under the standard of review of reasonableness,
the Registrar’s interpretation of the Trade-marks Act is entitled to
considerable deference. In order for the Court to intervene, it must conclude
that no reasonable interpretation can lead to that of the decision-maker either
because the reasoning process was deeply flawed or because the decision-maker
relied on a construction of the statute that fell outside the range of
admissible statutory interpretations (Dunsmuir v New Brunswick, 2008 SCC
9).
B.
Was the Registrar’s interpretation reasonable in
finding that the respondent had used the trade-mark within Canada during the Relevant Period?
(1)
The interpretation of the Act and decision were
reasonable
[29]
I have no difficulty concluding that the
Registrar’s interpretations of the Trade-marks Act were reasonable as
was her decision to maintain the registration of the respondent’s trade-mark.
[30]
The Registrar correctly identified the
underlying policy governing section 45 of the Act, being that of
presenting an efficacious process for removing “deadwood”
from the register while protecting registered owners against any
unwarranted attempt to have their mark expunged. Justice Stone confirmed this
objective in John Labatt Ltd v Rainier Brewing Co (1984), 80 CPR (2d)
228, citing Justice Thorson in a 1964 decision as follows:
On this latter point I would accept, with
respect, the views expressed by Thorson P. in Re Wolfville Holland Bakery
Limited [(1965), 45 C.P.R. 88.] (at p. 91):
"It is clear that the purpose of s.
44 of the Act is to provide a procedure for trimming the register of
trade marks, so to speak, by getting rid of 'dead wood' in the sense of trade
marks that are no longer in use but, at the same time, the Act provides
safeguard for the protection of the registered owner of a trade mark against
any unwarranted attempt to have it expunged."
The decision in that case and in others on this
point were regarded by Thurlow C.J. in the Plough (Canada) case (at p. 65) as
"clearly and adequately expounding the law". I would respectfully
agree.
[31]
Accordingly, an interpretation of section 45
expunging the trade-mark of the respondent that clearly was not the type of “deadwood” envisaged by the provision, on the ground
that the respondent had failed to use the mark in Canada two days before the
first shipment arrived in Canada, would be absurd in that it could not possibly
serve the objectives intended by the statute.
[32]
The Registrar also correctly distinguished the Manhattan
Industries case in order to apply the reasoning in the ConAgra
decision. She pointed out that Manhattan Industries concerned the date
of the first use of a trade-mark, being that of establishing entitlement to
registration based on section 30(b) of the Act.
[33]
It is clear from the decision of Justice McKay
in ConAgra, which had very similar facts to those in this matter, that
he implicitly adopted a purposive interpretation of section 45 to distinguish
trade-mark “use in Canada” described in other
decisions such as Manhattan Industries. He concluded at paragraph 16 of ConAgra
as follows:
16 In my opinion, acceptance of that
order before the date of the s. 45 notice constitutes use of the KID CUISINE
trade-mark product associated with the wares within the purposes of s. 45.
[Emphasis added]
[34]
The Registrar cannot be criticized therefore for
relying on ConAgra or for concluding that the purpose of section 45
would not necessarily be served by adopting “the
same stringent and technical approach with respect to the timing of use of the mark
when contemplating expungement under section 45 of the Act” as when considering first use for entitlement or
grounds of opposition.
[35]
It further follows from this reasoning that the
court in ConAgra cannot be criticized as rendering a “manifestly wrong per incuriam decision which
ought not to be followed” as argued by the
applicant. I am satisfied that a fair reading of ConAgra, despite its
brevity on the issue, describes the intention of the Court not to follow the
strict interpretation of “use in Canada” found in
cases such as Manhattan Industries because they were distinguishable as
not describing an interpretation that met the purposes of expungement under
section 45 of the Act.
[36]
As a further point, the applicant also argued
that Parliament intended a strict interpretation of section 45(1), whereby
flexibility in its application was recognized for exceptions by section 45(3) “due to special circumstances that excuse the
absence of use” [my emphasis]. Accordingly, if the
drafters of the Act wanted flexibility with respect to the provisions
deeming use of a trade-mark or the Relevant Period, the statute could have
addressed these concerns specifically in a manner similar to that in section
45(3). Instead, the applicant argues, Parliament chose to apply a standardized
meaning of “use in Canada” with flexibility being
provided via section 45(3) to allow special circumstances to “excuse the absence of use”.
[37]
While “special
circumstances” may provide an exception for those registrants who can
rely on them to explain their failure to use the mark in Canada during the Relevant Period, they do not assist in those cases where the mark is
clearly not “deadwood” and no extenuating
circumstances exist. It remains the objective of the Act that viable
marks of value are not to be expunged because there exists some difficulty,
such as may be a legitimate business reason, but not an exceptional
circumstance. A purposive interpretation of the provision ensures that in these
latter situations the marks are not struck for reasons that are in conflict
with the purposes of the Act. Special circumstances may help out in
other situations.
(2)
Does the Interpretation Act require that the
meaning of “use in Canada” be the same throughout the Act?
[38]
The applicant argued that the Registrar’s finding
that it is not appropriate to adopt the same meaning of the word “use” for all cases in respect of the Act is not
consistent with the legislative scheme established by the Act. The Act
clearly defines at section 4 when a trade-mark is deemed to be used;
accordingly the respondent argued that the definition must apply to the Act
as a whole, and not only to certain sections thereof.
[39]
In further submissions and argument before the
Court, the applicant bolstered this submission by reference to section 15(1) of
the Interpretation Act, RSC 1985, c I-21, that requires statutorily
defined terms to apply to all provisions of a given enactment:
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15. (1) Definitions
or rules of interpretation in an enactment apply to all the provisions of the
enactment, including the provisions that contain those definitions or rules
of interpretation.
(2) Where an
enactment contains an interpretation section or provision, it shall be read
and construed
(a) as
being applicable only if a contrary intention does not appear; and
(b) as
being applicable to all other enactments relating to the same subject-matter
unless a contrary intention appears.
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15. (1) Les
définitions ou les règles d’interprétation d’un texte s’appliquent tant aux
dispositions où elles figurent qu’au reste du texte.
(2) Les
dispositions définitoires ou interprétatives d’un texte :
a) n’ont
d’application qu’à défaut d’indication contraire;
b) s’appliquent, sauf indication contraire,
aux autres textes portant sur un domaine identique.
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[40]
In addition, the applicant argued that defined
terms in legislation can be displaced, but only if there are express words or a
necessarily implied context showing that Parliament did not intend the
definition to apply to a particular use of the defined term. See MiningWatch
Canada v Canada (Fisheries and Oceans), 2010 SCC 2 at para 29.
[41]
In reply to these arguments, the respondent
submitted that the requirements of the definition of deemed use in section 4(1)
are consistently applied to all provisions of the Act, thereby complying
with the Interpretation Act. The statutory deeming applied only to
define the “use” of the mark, not the application
of the use, i.e. whether the use is made in Canada, or for that matter whether use
occurs during the Relevant Period. These requirements are set by section 45,
not section 4(1). I am in agreement with this argument, but it requires some
explanation.
[42]
The Federal Court of Appeal in Syntex Inc v
Apotex Inc (1984), 1 CPR (3d) 145, [1984] FCJ No 191 (QL) (FCA) at 151 held
that the “critical point in time” for the analysis
of trade-mark use is the time at which a transfer occurs, either of property or
of possession; the required elements of use must all be present at this
time.
[43]
Manhattan Industries primarily concerned the issue of transfer of possession, as
the applicant submitted that possession in section 4(1) should be accepted to
mean “constructive”, as opposed to “actual” possession, which argument was rejected.
However, the Court also considered the issue of transfer of property. It
found that the transfer of property occurred when the wares were placed with
Canada Post for delivery to the registrant. The applicant in the present case therefore
accepts that the transfer in property associated with the wares occurred when
they were placed in the custody of the shippers for transportation to Canada. Transfer of actual possession of the wares could only occur upon delivery of the
wares into the hands of the recipient, i.e. in Canada.
[44]
The applicant also acknowledges that the mark
was used in the normal course of trade and applied to packages associated with
the wares. Thus, all the requirements of deemed use pursuant to section
4(1) were fulfilled by the respondent at the time of transfer of the property
when the wares were delivered to the shipper. As a result, the Interpretation
Act would play no role in this matter because the literal interpretation of
deemed use in section 4(1) continues to have application throughout the
enactment. Use is not the issue.
[45]
The issue concerns the interpretation of “in Canada” in section 45, and similarly in section 30(b).
Where the confusion in this field appears to have occurred is around the term “use(d) in Canada” found in
section 45, but not section 4(1). In particular, in Manhattan
Industries the Court extended the definition of “use”
beyond its parameters by stating that the transfer of possession was “use in Canada within the meaning of s. 4.” Any
reference to “in Canada” in that decision was not
a requirement of section 4, but of section 30(b) (“in
the case of a trade-mark that has been used in Canada […]” [my emphasis]).
[46]
Similarly, the reference to “used in Canada” in both ConAgra and the
Registrar’s decision, in fact relates on the one hand to the “use” requirement as deemed by section 4(1) and on the
other, to the “in Canada” requirement of section
45. The “Relevant Period” is similarly a
requirement established by section 45.
[47]
However, by placing emphasis on where the
transfer of the property takes place, the purposive construction of the provision
must focus on construing the transfer to have occurred in Canada. Property in wares, unlike their actual possession, is a legal construct. I would
argue that this makes it more readily subject to different constructions for
the purpose of interpretation than actual possession. In terms of the wording
of section 45 therefore, the transfer of property in the wares can be construed
to have occurred “in Canada” when the custody of
the goods was passed to the shipping entity.
[48]
The delivery of the wares to the shipper was an
element of the completion of the transfer of the property that occurred in Canada. In this sense, the transfer of the property can be interpreted to have occurred in Canada at the time the custody of the goods was delivered to the transporters in Australia so long as the delivery was completed. With the place of the transfer occurring
in Canada within the Relevant Period, the requirements of section 45 of the Act
are met as constituting “use in Canada”.
[49]
In this manner, the definition of “use” is consistent through the Act, the
definition of “possession” in Manhattan
Industries is unaffected, while transfer of property in Canada in section 45 is construed purposively to meet the objectives of the Act.
[50]
In conclusion, my decision rejecting the
application is based upon the reasonableness of the interpretation of section
45 by the Registrar and the deference owed to her conclusions on the
appropriate interpretation of the Trade-marks Act.
[51]
Her decision reflects a purposive interpretation
of the Act that is consonant with its objectives and avoids a
consequence which otherwise would undermine the intent of Parliament were the
applicant’s submissions to have been accepted.
C.
If use in Canada did not occur within the
Relevant Period, could the Registrar have found that this was due to special
circumstances that excused the absence of use?
[52]
As I find the Registrar’s conclusions on the
construction of section 45 of the Act to be reasonable and the decision
within the range of reasonable acceptable outcomes, I do not find it necessary
to decide the respondent’s alternative argument concerning special
circumstances pursuant to section 45(3) of the Act.
[53]
Accordingly, the application is dismissed with
costs awarded to the respondent. If the parties are not able to agree on costs,
the respondent may file submissions not to exceed three pages, in addition to
its bill of costs, within 14 days of this decision. The applicant may respond
in kind within 14 days thereafter.
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