Docket: T-1889-15
Citation:
2016 FC 1046
Ottawa, Ontario, September 15, 2016
PRESENT: The
Honourable Mr. Justice Boswell
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BETWEEN:
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RICHTREE MARKET
RESTAURANTS INC. / RICHTREE RESTAURANTS DU MARCHE INC.
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Applicant
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and
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MÖVENPICK
HOLDING AG
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Respondent
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JUDGMENT AND REASONS
[1]
The Applicant, Richtree Market Restaurants Inc.
/ Richtree Restaurants du Marche Inc., has brought an appeal pursuant to
section 56 of the Trade-marks Act, RSC 1985, c T-13 [the Act], in
respect of a decision of the Trade-marks Opposition Board dated September 8,
2015, in which a member of the Board rejected Richtree’s opposition to a
trade-mark application filed by Mövenpick Holding AG.
[2]
Before the Board, Richtree opposed Mövenpick’s
application on three grounds, namely that the proposed mark was:
1)
not registrable because, contrary to paragraph
12(1)(b) of the Act, it was clearly descriptive of the character or
quality of the services in association with its proposed use;
2)
not distinctive within the meaning of section 2
of the Act because it was not adapted to distinguish, nor was it capable
of distinguishing, the services in association with which Mövenpick proposed to
use the mark from other trade-marks, trade-names or business names used by
numerous third parties containing the word “marché” or “market” in association with
similar or identical services; and
3)
not registrable because, contrary to paragraph
12(1)(c) of the Act, it was the name of “restaurant
services” and “take-out restaurant services”.
[3]
On appeal in this Court, however, Richtree only takes
issue with the Board’s rejection of the “not
distinctive” ground of opposition under section 2 of the Act.
I.
Background
[4]
Richtree is a wholly owned subsidiary of Natural
Market Restaurants Corp. In May 2005, Richtree purchased the assets of Richtree
Markets Inc. [Old Richtree] after Old Richtree had become insolvent. Prior to
its insolvency, Old Richtree operated Marché and Marcheline free-flow “market”
style restaurants in Canada under license and franchise agreements with Mövenpick
who, on July 12, 1996, had obtained registration of “MARCHÉ” as a trade-mark for the operation of restaurant services.
[5]
On July 29, 2008, Mövenpick filed a trade-mark
application for a “Marché & Wave” Design which looks like this:
[6]
The proposed trade-mark [the Mark] is a
composite one that incorporates a word element (i.e., Marché) together with design elements (i.e., a rectangle with a wave on
top design, and the style of type). It also claims colour as a feature of the
mark: the first top wave is a light green; the rectangle is a darker green; the
word Marché is in white and the
second wave located under the first wave is also in white; there is also a
white line under the word Marché. Mövenpick based its application on use and registration of the
Mark in Switzerland on August 12, 2004, and its proposed use in Canada in
association with restaurant services, take-out restaurant services, and
offering technical assistance in the establishment and operation of restaurant
franchises.
[7]
Richtree filed a statement of opposition to
Mövenpick’s application for the Mark on August 9, 2011. Its statement of
opposition was subsequently amended twice in October 2011. Mövenpick filed its
counter statement on December 21, 2011.
[8]
In support of its opposition, Richtree filed
affidavit evidence from four individuals, namely:
1)
Lynda Palmer, a trade-mark searcher, who
provided the results of her searches for trade-marks using the words “market” or “marché” in association with the food service industry;
2)
James Meadway, an investigator then with
Northwood & Associates Inc., who conducted various searches for
restaurants, grocery stores, and other businesses in Canada with the word “market” or “marché” in their names; he also contacted and attended at some of these
businesses and provided photographs of the storefronts of some of these
businesses;
3)
Robert Breton, an investigator with GW
Consulting and Investigations, who conducted various searches to identify
businesses in Montreal and Quebec City using the word “Marché” as part of their name; like Mr. Meadway, he too contacted and
attended at some of these businesses in Montreal and provided photographs of
the storefronts of some of these businesses; and
4)
Yves Crépeault, another investigator with GW
Consulting and Investigations, who contacted and attended at some of the
businesses in Quebec City identified by Mr. Breton and provided photographs of
the storefronts of some of these businesses.
All of these affiants
were cross-examined and the transcripts of the cross-examinations, along with the
replies to the undertakings, formed part of the record before the Board.
[9]
In support of its application, Mövenpick filed
the affidavit of Geng Liu, an assistant employed by Mövenpick’s trade-marks
agent at the time; this affidavit included a certified copy of an affidavit from
Yves Lefebvre, a private investigator, which had been filed in another,
separate proceeding in this Court. Mövenpick also filed a certified copy of its
trade-mark registration for “MARCHÉ”, as well as certain other documents which had been filed with the
Registrar of Trade-marks in another, separate opposition proceeding between the
parties: i.e., a certified copy of the affidavit of Matthew Williams, the
President and CEO of Richtree’s parent company, the transcript of his cross-examination,
and the replies to the undertakings.
[10]
Richtree and Mövenpick attended a hearing before
the Board on July 29, 2015 and, on September 8, 2015, the Board rejected
Richtree’s opposition (see: Richtree Market Restaurants Inc v Mövenpick
Holding AG, 2015 TMOB 152 (CanLII)). Subsequent to filing its appeal by way
of a Notice of Application on November 9, 2015, Richtree filed a further
affidavit from Mr. Meadway dated December 7, 2015, as well as an affidavit from
Pei Heng Li dated December 9, 2015. These two affidavits were not before the
Board when it rendered its decision.
II.
The Board’s Decision
[11]
In the context of these reasons for judgment, it
is necessary to summarize only the Board’s decision as it pertains to the
non-distinctiveness ground of opposition under section 2 of the Act
because Richtree, on this appeal, does not take issue with the Board’s dismissal
of the grounds of opposition under paragraphs 12(1)(b) and 12(1)(c) of the Act.
[12]
After reviewing the procedural history and the
evidence filed by the parties, the Board noted that, while Mövenpick bore the
legal onus of establishing on a balance of probabilities that its application
complied with the requirements of the Act, Richtree had an initial
evidentiary burden to show “sufficient admissible
evidence such that it could reasonably be concluded that the facts alleged to
support each ground of opposition exist.” The Board further noted that
the material date for assessing the distinctiveness of a proposed trade-mark is
generally accepted as being the date of filing of the opposition, which was
August 9, 2011. In view of pertinent case law, the Board stated that, for a
proposed trade-mark to be adapted to distinguish the owner’s goods or services
it had to be inherently distinctive and a trade-mark is inherently distinctive
when nothing about it refers the consumer to a multitude of sources. In the
Board’s view, whether a trade-mark is distinctive was a question of fact
determined by reference to the message it conveys to the ordinary consumer of the
goods or services in question when the trade-mark is considered in its entirety
as a matter of first impression. The Board further stated that the
distinctiveness of a composite mark may be tested by “sounding”
the words if the design element was not the dominant element of the trade-mark.
[13]
The Board concluded, in view of the entirety of
the evidence, that Richtree had not “met its initial
evidential burden to show that MARCHÉ or MARKET is a term commonly used by
third parties in the trade to describe the applied for services or that the
Mark is clearly descriptive of the character or quality of those services.” In reaching this conclusion, the Board stated that the evidence concerning
the use of the term Marché or Market
in association with other types of food related businesses, such as
supermarkets, grocery stores, specialty food stores and convenience stores, had
no bearing on the question of whether the term Marché describes restaurant services, take-out restaurant services, and
the offering of technical assistance in the establishment and operation of
restaurant franchises; in the Board’s mind, the former businesses offer
services that fundamentally differed from those of a restaurant.
[14]
As to Richtree’s allegation that the Mark was
not distinctive since it was clearly descriptive of the character or quality of
the applied for services, the Board rejected this allegation for the same
reasons it had determined that the Mark was not descriptive, namely that: (1)
the dictionary definitions and the relevant evidence did not support a finding
that, as a matter of first impression, the terms Marché or Market describe something going to the material composition or
an obvious intrinsic quality of Mövenpick’s restaurant services, take-out
restaurant services, or offering of technical assistance in the establishment
and operation of restaurant franchises; (2) neither term was self-evident,
plain, or manifest, of restaurant services going beyond the simple act of
selling and buying food products; (3) the character or quality of Mövenpick’s
restaurant and take-out restaurant services were not, as a matter of first
impression, instantly apparent of a trade-mark bearing the term Marché; and (4) while there was some
evidence that the term Market was used in trade-marks, trade-names, and
business names for restaurant services, there was no clear evidence of what
character or quality of restaurant services it had been commonly adopted to
describe in the industry.
[15]
As to the issue of whether Market or Marché were a term commonly used in the
trade to describe similar or identical services by third parties, the Board
reiterated its finding under its descriptiveness analysis that the evidence
failed to show that the terms had been adopted by the restaurant industry to
describe a particular style of restaurant or that it held a commonly understood
meaning in association with restaurant services. The Board further stated that
the state of the register evidence did not speak to the descriptiveness of the
term Marché or Market in association with restaurant services and, in any event,
that evidence was irrelevant because there was no allegation of confusion with
respect to the use of trade-marks containing the term Market or Marché.
[16]
Although the Board did not consider the
investigators’ reports for purposes of its analysis as to whether the Mark was
clearly descriptive of the services, it did consider these reports in its
distinctiveness analysis because there was no objection and such evidence was
collected a few months after the material date. Accordingly, the Board was
prepared to give this evidence some weight given the nature of the search
results. The Board found that the vast majority of the establishments visited
by Richtree’s investigators were convenience stores, grocery stores, public
markets, supermarkets, and specialty food stores; it further found that, even
for those businesses categorized as restaurants with names that included the
term Marché or Market, there
was no evidence to suggest that these restaurants shared a commonly known
character or quality or a commonly understood meaning attached to restaurants
identified as a Marché or
Market. In short, the Board concluded that the evidence did not show that the
term Marché or Market would be
perceived by the average consumer of restaurant services as anything else but a
source identifier, and the mere fact that the term Marché or Market appeared as part of other source identifiers did not
render the Mark incapable of functioning as a source identifier for Mövenpick’s
services.
III.
Issues
[17]
The main issues to address on this appeal are
the following:
1.
What is the appropriate standard of review? and
2.
Did the Board err in dismissing the
non-distinctiveness ground of opposition to the Mark?
IV.
Analysis
A.
What is the appropriate standard of review?
[18]
Although an appeal under subsection 56(1) of the
Act proceeds in many ways like an application for judicial review,
subsection 56(5) of the Act provides that on such an appeal “evidence in addition to that adduced before the Registrar
may be adduced and the Federal Court may exercise any discretion vested in the
Registrar.” The Federal Court of Appeal has held that subsection 56(5)
allows a party to file evidence on an appeal even if it submitted no evidence
before the Board (see: Brain Tumor Foundation of Canada v Starlight
Foundation, 2001 FCA 36 at paras 3-6, 11 CPR (4th) 172). In this case,
Richtree has filed a further affidavit from Mr. Meadway dated December 7, 2015,
as well as one from Pei Heng Li dated December 9, 2015. Consequently, these
affidavits must be considered by the Court in the context of this appeal.
Moreover, the nature of the evidence offered by these affidavits dictates the
appropriate standard of review of the Board’s decision.
[19]
Before assessing the evidence offered by these
new affidavits, it should be noted that an appeal under section 56(1) of the Act
is not a trial de novo in the strict sense of that term since the
material before the Board and its findings must also be considered in addition
to any new evidence adduced by the parties (see: Molson Breweries v John
Labatt Ltd, [2000] 3 FC 145 at paras 46 and 47, 5 CPR (4th) 180 (CA) [Molson]).
As Justice Rothstein stated in Molson:
51 …Even though there is an express
appeal provision in the Trade-marks Act to the Federal Court, expertise
on the part of the Registrar has been recognized as requiring some deference.
Having regard to the Registrar’s expertise, in the absence of additional
evidence adduced in the Trial Division, I am of the opinion that decisions of
the Registrar, whether of fact, law or discretion, within his area of
expertise, are to be reviewed on a standard of reasonableness simpliciter.
However, 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.
[20]
The Supreme Court of Canada has acknowledged
that the Federal Court of Appeal’s approach in Molson is consistent with
its approach in Mattel, Inc v 3894207 Canada Inc, 2006 SCC 22 at para
41, [2006] 1 S.C.R. 772. This approach to an appeal under subsection 56(1) when
new evidence has been filed has also been followed by this Court and the
Federal Court of Appeal subsequent to Dunsmuir v New Brunswick, 2008 SCC
9, [2008] 1 S.C.R. 190, [Dunsmuir] (see: e.g., Saint Honore Cake Shop Limited
v Cheung’s Bakery Products Ltd, 2015 FCA 12 at para 18, 132 C.P.R. (4th)
258; Iwasaki Electric Co Ltd v Hortilux Schreder BV, 2012 FCA 321 at
para 2, 442 NR 310; and Scott Paper Ltd v Georgia-Pacific Consumer Products
LP, 2010 FC 478 at paras 42-44, 83 CPR (4th) 273).
[21]
The question then is whether the new evidence
that was not before the Board would have materially affected its findings of
fact or the exercise of its discretion: if so, the Court must make its own
conclusion as to the correctness of the Board’s decision on the issue to which
the additional evidence relates; but if not, the appropriate standard for
review of the Board’s decision is that of reasonableness (see: Ron Matusalem
& Matusa of Florida Inc v Havana Club Holding Inc, SA, 2010 FC 786 at
para 4, 86 CPR (4th) 437, aff’d 2011 FCA 244, [2011] FCJ No 1285).
[22]
The test for whether this new evidence would
have had a material effect upon the Board’s findings of fact or the exercise of
its discretion was stated in Gemological Institute of America v Gemology
Headquarters International, 2014 FC 1153, 127 CPR (4th) 163:
[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; …[additional citations
omitted].
[23]
Furthermore, as this Court noted in Eclectic
Edge Inc v Gildan Apparel (Canada) LP, 2015 FC 1332, 138 CPR (4th) 289:
[45] While the new evidence must be
such that it would have materially affected the Registrar’s decision, it does
not mean that it would necessarily affect or change the final conclusion (Worldwide
Diamond Trademarks Limited v Canadian Jewellers Association, 2010 FC 309 [Canadian
Jewellers] at para 40). In other words, the Court can still come to the
same conclusion as the Board, even with the new evidence.
[46] New evidence will typically be
considered sufficiently material when it is putting a different light on the
record or is significantly extending the evidence that was in front of the
Registrar. Before the Court can decide whether it should review the whole
matter anew or simply review the decision for reasonableness, the Court must
first examine the new evidence that has been brought forward as part of the
appeal (Farleyco at para 87).
[24]
In general terms, the further affidavit of Mr.
Meadway contains sworn evidence and photographs of various businesses that use
the word “Market” or “Marché” in their name, while that of Pei Heng Li contains evidence as to
numerous business name registrations and corporate profile reports for various
businesses located in Ontario with either or both of these words in their name.
In particular, the new Meadway affidavit contains, for the most part, the same
type of evidence as that contained in his 2012 affidavit, albeit with some
additional details arising from his contact with and visits to some of the same
businesses identified in 2012. For example, in paragraph 25 of his first
affidavit, Mr. Meadway described a visit to the Little Polish Market; and in
paragraph 21 of his second affidavit, he described in more detail a
second, more recent visit to the Little Polish Market and his discussion with
an employee there. Mr. Meadway’s second affidavit also contains some details
about the services and products offered and sold by the supermarkets, grocery
stores, convenience stores, and specialty food stores with Marché or Market in their name; whereas his
first affidavit contained more of a listing or summary of his searches for
businesses with the word “Market” or “Marché” in their name and referred to only
a few visits to or contact with such businesses. As for the new affidavit from
Pei Heng Li, it primarily confirms elements of the second Meadway affidavit by
providing business and corporate name searches as well as a trade-mark search
for businesses contacted or visited by Mr. Meadway in November and December 2015.
[25]
According to Richtree, the new evidence shows
that various food related businesses such as supermarkets, grocery stores,
convenience stores, and specialty food stores commonly use “Market” or “Marché” with regard to the provision of restaurant services, contrary to
the Board’s finding that the services offered by such businesses are
fundamentally different than those offered by restaurants. Richtree contends
that this new evidence would have materially affected the Board’s decision with
respect to the “not distinctive” ground of
opposition under section 2 of the Act and that, consequently, the Court
must reassess this ground of opposition in a de novo analysis.
Regardless of the standard of review to be applied by the Court, Richtree
further contends that the Board’s decision was neither correct nor reasonable
and should be reversed.
[26]
For its part, Mövenpick states that the new
evidence would not have materially affected the Board’s findings or exercise of
discretion because it does not add something of significance which could have
had a material or concrete effect on the Board’s conclusions. Mövenpick asserts
that the new evidence does not put a different light on the record that was
before the Board, and also notes that the new evidence was prepared in November
and December 2015, more than four years after the material date for assessing
the distinctiveness of the Mark. In any event, Movenpick submits that the Board’s
decision was not only reasonable but also correct.
[27]
In this case, after carefully reviewing the new
evidence, I cannot find that it would have materially affected the Board’s
findings of fact or the exercise of its discretion with respect to the “not distinctiveness” ground of opposition. For the
most part, the new evidence is merely repetitive or supplementary to that which
was before the Board. The new evidence does not enhance the cogency of the
evidence that was before the Board and it does not significantly or materially
add to the record before the Board or cast a new light upon that record.
[28]
The second Meadway affidavit provides some
evidence which suggests that marché or market style restaurants are a specific type of restaurant where
meals are prepared at different food counters where patrons place their order and
it also offers information that some of the businesses identified in the first
Meadway affidavit allow consumers to approach a counter to order meals. However,
the second Meadway affidavit does not clearly or convincingly show that there
is a recognized or established market or marché style restaurant
where, as in a market, there are multiple counters and consumers go from one to
the other and pick up various foods without table service. In particular, the
second Meadway affidavit does not establish that it is the counters and
prepared foods that make these establishments, found within grocery stores,
convenience stores, specialty food stores, and supermarkets, a marché or market style restaurant. Moreover,
this evidence does not undermine the Board’s finding and conclusion that the
food services offered in places such as supermarkets, grocery stores,
convenience stores, and specialty food stores are fundamentally different than
those offered by restaurants.
[29]
Accordingly, the standard of review to be
applied on this appeal in respect of the Board’s dismissal of the “not distinctive” ground of opposition is
reasonableness. As a result, the Court must determine whether the Board’s
decision is justifiable, transparent, and intelligible, and the Court’s role, as
noted by the Federal Court of Appeal in Monster Cable Products, Inc v
Monster Daddy, LLC, 2013 FCA 137 at para 7, 445 NR 379 (citing Dunsmuir at
para 47), “is limited to determining whether, on the
basis of the evidentiary record before him, the Registrar’s decision falls
within a “range of possible, acceptable outcomes which are defensible in
respect of the facts and law” …”.
B.
Did the Board err in dismissing the
non-distinctiveness ground of opposition to the Mark?
[30]
Richtree argues that the Board’s decision was
unreasonable because the evidence of multiple restaurants using marché or market as part of their name means
that the Mark could not reasonably be seen as distinctive. According to
Richtree, the Board failed to appreciate that distinctiveness requires a mark
to be capable of identifying a single source for services, and that multiple
trade-marks using the same word as part of the Mark cannot be a single source.
Richtree asserts that the Board misapprehended the state of the register evidence
and unreasonably interpreted and applied the test for distinctiveness under
section 2 of the Act by confounding it with those for assessing whether
a mark is clearly descriptive or likely to cause confusion.
[31]
Mövenpick submits that the Board’s decision is
not only reasonable but correct and, therefore, it should not be disturbed. Mövenpick
contends that Richtree’s argument that the Mark is not distinctive, since names
and trade-marks containing the word “market” or “marché” are commonly used with food service
businesses, is flawed because the Mark must be considered in its entirety and,
moreover, Mövenpick’s existing MARCHÉ word mark has previously been found to possess “some measure of inherent distinctiveness when used in
association with ‘operation of restaurant’” (see: Mövenpick Holding
AG v Exxon Mobil Corporation, 2011 FC 1397 at 43, 98 CPR (4th) 334).
[32]
In assessing the reasonableness of the Board’s
decision to reject the “not distinctive” ground
of opposition, it is helpful to begin by noting the definition of “distinctive” contained in section 2 of the Act:
“distinctive, in relation to a trade-mark, means a
trade-mark that actually distinguishes the goods or services in association
with which it is used by its owner from the goods or services of others or is
adapted so to distinguish them.” It is also helpful to remember that the
Board’s decision was not one which determined whether Mövenpick had, on a
balance of probabilities, established that the Mark was distinctive within the
meaning of the Act. On the contrary, the Board’s decision was
principally focused on whether Richtree had met its initial evidentiary burden
to adduce sufficient admissible evidence from which it could reasonably be
concluded that the facts alleged to support each ground of opposition existed.
[33]
Whether a trade-mark is distinctive is a
question of fact that is determined by reference to the message it conveys to
the ordinary consumer of the goods or services in question when the trade-mark
is considered in its entirety as a matter of first impression (see: Philip
Morris Products SA v Imperial Tobacco Canada Limited, 2014 FC 1237 at para
66, 129 CPR (4th) 309). In this case, even if the word “Marché” may not be in and of itself immediately or inherently distinctive,
the Board’s decision finding that Richtree had failed to show that the term
lacked distinctiveness was reasonable. The Board clearly considered the
arguments made by Richtree, yet was not satisfied that it had met its initial
evidentiary burden to show that either “marché” or “market” is “a term commonly used by third parties in the trade to
describe the applied for services.” Although the Board did find that
there were numerous businesses that use the word “market”
or “marché” in
their name and that the word element was the dominant portion of the Mark, it
also found that the majority of these businesses were not restaurants. It was
open to and reasonable for the Board to conclude that the evidence offered by
Richtree was not sufficient to show that the Mark, comprised of the dominant
word portion and the design element, lacked distinctiveness such that it was
incapable of functioning as a source identifier for Mövenpick’s services.
Although the Board did on occasion intersperse its distinctiveness analysis
with certain aspects of its descriptiveness analysis, this does not render its
decision unreasonable when viewed as an “organic whole”
(see: Communications, Energy and Paperworkers Union of Canada, Local 30 v
Irving Pulp & Paper Ltd., 2013 SCC 34 at para 54, [2013] 2 S.C.R. 458).
[34]
In short, I find the Board’s decision is
justifiable, transparent, and intelligible, and it falls within a range of
possible, acceptable outcomes which are defensible in respect of the facts and
law.
V.
Conclusion
[35]
For the reasons stated above, Richtree’s
application for an appeal pursuant to section 56 of the Act is
dismissed.
[36]
Mövenpick has requested its costs. Since the
appeal has been dismissed, Mövenpick is entitled to costs in such amount as may
be agreed to by the parties. If the parties are unable to agree as to the
amount of such costs within 15 days of the date of this judgment, Mövenpick
shall thereafter be at liberty to apply for an assessment of costs in
accordance with the Federal Courts Rules, SOR/98-106.
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