Docket: T-152-13
Citation:
2014 FC 620
Ottawa, Ontario, June 26, 2014
PRESENT: The
Honourable Mr. Justice Rennie
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BETWEEN:
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ALLIANZ GLOBAL INVESTORS OF AMERICA LP
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Applicant
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and
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MIDDLEFIELD CAPITAL CORPORATION
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Respondent
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JUDGMENT AND REASONS
[1]
Allianz Global Investors of America LP (Allianz)
appeals by way of judicial review the decision of the Opposition Board of the
Canadian Intellectual Property Office (the Board) dated October 29, 2012. In
that decision, the Board rejected Allianz’s opposition to the registration of
the mark INDEX PLUS INCOME FUND (the mark) by Middlefield Capital Corporation
(Middlefield). This appeal was heard together with the appeal in T-151-13. A
copy of this decision shall be place on that file, and these reasons for
decision should be read concurrently with the reasons for decision in that
file.
[2]
First, the Board concluded that Allianz failed
to meet its initial evidentiary burden regarding its opposition based on
disputing the date that the mark was first used. In particular, the Board
found that the evidence of Middlefield was not clearly inconsistent with its claim
that it was performing the services in association with the mark since August
15, 2003 (the date of first use).
[3]
Second, the Board concluded that Allianz failed
to meet its evidentiary burden regarding its opposition based on the mark
lacking distinctiveness. In particular, the Board concluded that because
Middlefield had disclaimed INDEX in its application, other third party use of
the word as found in the register did not undermine the distinctiveness of
Middlefield’s mark.
[4]
Third, the Board concluded that Allianz failed
to meet its evidentiary burden regarding its opposition based on the mark being
clearly descriptive of the character or quality of its products or services. In
particular, the Board dismissed this point summarily because it was a bare plea
without any elaboration from Allianz.
[5]
While Allianz must succeed on each of its three
grounds of appeal in order to set the decision aside, I find that the Board
decision survives scrutiny on a reasonableness inquiry on all three grounds.
I.
The Board Reasonably Concluded that Allianz
Failed to Satisfy its Evidentiary Burden Regarding Prior Use of the Mark
[6]
The first ground of opposition relates to prior
use of the mark by Middlefield.
[7]
Section 30(b) of the Trade-marks Act
(RSC, 1985, c T-13) (the Act) provides that when applying to
register a trade-mark that has been used in Canada, the applicant must provide
the date of first use of the mark. Middlefield, in its application, stated
that the date of first use of its mark was August 15, 2003. Allianz disputed
this date of first use.
[8]
To dispute a date of first use, an opponent must
first meet its initial evidentiary burden. As I discussed in Corporativo de
Marcas GJB, DA de CV v Bacardi & Company Ltd, 2014 FC 323 at para 28:
When dealing with non-compliance under section
30 of the Act, there is an initial evidentiary onus on the opponent to
adduce sufficient evidence supporting its claim of non-compliance by the
applicant. If [the opponent] leads sufficient evidence of non-use the initial
evidentiary burden is discharged. [The applicant] must then, in response,
substantiate its claim of use during the material time.
[9]
In this case, the opponent, Allianz, failed to
discharge that initial evidentiary onus.
[10]
Allianz attempts to meet its evidentiary burden
regarding prior use in two respects. First, Allianz argues that Middlefield
cannot establish use under section 30 of the Act because the mark was
not used by Middlefield since the claimed date of first use. Second, and in
the alternative, Allianz argues that, if the mark was used by Middlefield, that
Middlefield cannot establish use under section 30 of the Act because of the
unlicensed use of the mark by other parties. The Board reasonably dismissed
both arguments.
[11]
Allianz’s first argument – that Middlefield did
not use the mark since the claimed date of first use – must fail. In
particular, the documentary evidence before the Board amply demonstrated use by
Middlefield. I will not review the evidence in full, but note, for example,
that the Prospectus issued by Middlefield and a series of informational and
marketing documents and quarterly reports beginning in August 2003, in the years
that followed, support Middlefield’s use of the mark and the conclusion reached
below.
[12]
The marketing materials invariably show
Middlefield as the provider of the services. What is critical in the analysis
of use of a mark is the manner in which it would be perceived by the public.
The “public” in this case are sophisticated institutional investors.
Middlefield marks accompany all of the marketing materials, which identify
Middlefield by name as the source of the services. To the extent that affiliates
are referenced as in the case of Middlefield Securities Group, it is under the
broader chapeau of the Middlefield Group, another registered mark:
[13]
Allianz’s second argument – that Middlefield did
not “use” the mark because it did not maintain control over the mark – must
also fail.
[14]
In order to use a mark under section 30 of the Act,
an applicant must show not only that it used the mark, but that it maintained
control over the quality and character of the mark. To maintain control over a
mark does not preclude use of the mark by other parties. Indeed, an applicant
is permitted to license the use of its mark by others (see: the Act, section
50). However, Allianz argues that Middlefield did not maintain control over
its mark because there is no written licence between Middlefield, the owner of
the mark, and Middlefield Indexplus Management Ltd (MIML), the manger of the
trust, who also uses the mark. Further, Allianz contends that Middlefield did
not maintain control over its mark because of the collaborative nature of its
practice. In this regard, Allianz points to the Prospectus, which indicates
that MIML and Guardian Capital Inc are co-advisors with respect to investment
advice, and that they have a veto over Middlefield advice. Put otherwise, consensus is necessary in
respect of fund investment decisions.
[15]
Allianz is correct to point out that the lack of
a written license agreement weakens Middlefield’s claim of control over its
mark. However, a written licence agreement in respect of the use of a mark is not
required to maintain control over a mark. Rather, a licensing agreement may be
inferred: Wakefield Realty Corp v Cushman & Wakefield, Inc, (2004) 37
CPR (4th) 212 (FCA) at para 56. Allianz says that Middlefield was marketing
the fund, in association with this mark, through its investment advisors.
[16]
The Board addressed this point when it considered
the use of the mark by registered dealers who promoted and sold units in the
fund:
A number of names appear on the materials
presented by the Applicant. Exhibit E identifies Middlefield INDEXPLUS
Management Limited (a predecessor of Middlefield Fund Management Limited) as
the manager as well as the trustee of the Trust (the Trust being a closed-end
investment trust known as INDEXPLUS INCOME FUND). The co-advisors to the
Trust’s portfolio are identified as Middlefield Securities Limited (the
Applicant’s former name) and Guardian Capital Inc. (subsequently known as
Guardian Capital LP). A CIBC World Markets logo appears at the bottom of the
first page, but on page 69 CIBC World Markets Inc. is identified as one of many
agents who vouch for the reliability of the contents of the prospectus. On
cross-examination, Mr. Jesley explained that CIBC World Markets was one of the
lead agents who marketed this fund to investors and that dealers sometimes put
their own logo at the bottom of a prospectus that is intended for their own
investment advisors.
[17]
Section 4(2) of the Act provides that a
trade-mark is deemed to be used in association with services if it is used or
displayed in the performance of or advertising of those services. Similarly,
courts have recognized that evidence of use of a mark in the owner’s chain of
distribution is evidence of use: Société Nationale
des Chemins de Fer Français Sncf v Venic Simplon-Orient-Express
Inc., (2000) 9 CPR (4th) 443 (FCTD).
[18]
In sum, the use of the Middlefield mark in
association with the distribution of a prospectus and solicitation of interest
in purchase of units in the fund by investment dealers or brokers constitutes use,
and is not a loss of control over the character of the service in question.
Analogy may easily be drawn to other circumstances where use of the mark was
established through use in related but ancillary services in the sale of the
service in question: TSA Stores, Inc v Canada (Registrar of Trade-Marks)
(2011), 91 CPR (4th) 324 (FC).
II.
The Board Reasonably Concluded that Allianz
Failed to Satisfy its Evidentiary Burden Regarding the Distinctiveness of the
Mark
[19]
The second ground of opposition relates to the
distinctiveness of the mark. In particular, Allianz argues that the mark lacks
distinctiveness for two reasons: first, because it was used by the co-advisors
(Guardian and Middlefield Securities Limited) and the fund manager (Middlefield
INDEXPLUS Management Limited), and second, because the marks INDEX, INDEX PLUS,
INDICIEL & PLUS and INDICES & PLUS are registered in conjunction with
similar services.
[20]
Allianz’s first argument – that the use of the
mark by its co-advisors undermines the distinctiveness of the mark – must fail
for similar reasons as Allianz’s first ground of opposition regarding prior
use. The licensed use of a mark, whether that license is express of
inferred, does not undermine the distinctiveness of a mark.
[21]
Allianz’s second argument – that the
registration of similar marks undermines the distinctiveness of Middlefield’s
mark – must also fail. As the Board noted, the mere existence of these
registrations does not satisfy Allianz’s initial evidentiary burden. In
particular, the Board questioned, correctly in my view, the relevance of the
search of the registry as it was conducted four years before the material date.
Further, Middlefield disclaimed INDEX from its mark, making the registration of
other INDEX marks irrelevant to the distinctiveness of Middlefield’s mark. As
the Board observed:“ at best it shows that INDEX is
commonly adopted as part of trade-marks. The Applicant has disclaimed the
right to the exclusive use of the word INDEX apart from the Mark and so the
existence of other distinctive marks that include the word INDEX does not
assist the Opponent’s case.” Accordingly, the Board reasonably
dismissed both of Allianz’s arguments regarding the mark’s lack of
distinctiveness.
III.
The Board Reasonably Concluded that Allianz
Failed to Satisfy its Evidentiary Burden Regarding the Descriptiveness of the
Mark
[22]
The third and final ground of opposition relates
to the descriptiveness of the mark.
[23]
Section 12(1)(b) of the Act provides that
“a trade-mark is registerable if it is not […] clearly
descriptive […] of the character or quality of the wares or services in
association with which it is used.”
[24]
The Board dismissed this ground summarily,
noting that apart from a mere plea that the mark was descriptive “no further details” were provided in support of the
ground.
[25]
Before me, Allianz argues that the mark
INDEXPLUS is clearly descriptive of an income or equity investment fund, which,
as compared with the indices of market performance (“index”), outperforms them (“plus”). In
support of this argument, Allianz noted the concession during cross-examination
by the representative of Middlefield that the mark was “somewhat
laudatory” (referring, presumably, to the “plus”).
[26]
I cannot accept this argument for two reasons.
First, while I appreciate that the argument with respect to descriptiveness has
a certain resonance, it loses its strength when considered in light of the fact
that Middlefield had disclaimed the use of the word INDEX. Additionally, there
was no clear articulation before this Court as to why the mark as a whole was
clearly descriptive and not merely suggestive, as it must for this ground of
opposition to succeed. It is difficult to contend, in this context, that the
rejection of this ground of opposition is unreasonable.
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