Docket: T-1533-15
Citation:
2016 FC 1276
Ottawa, Ontario, November 18, 2016
PRESENT: The
Honourable Mr. Justice Fothergill
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BETWEEN:
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HEATHER RUTH
MCDOWELL
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Applicant
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and
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LAVERANA GmbH
& Co. KG
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Respondent
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JUDGMENT AND REASONS
I.
Introduction
[1]
This is an appeal of a decision of the
Trade-marks Opposition Board on behalf of the Registrar of Trade-marks pursuant
to s 56(1) of the Trade-marks Act, RSC 1985, c T-13 [Trade-marks Act].
The decision under appeal is reported as 2015 TMOB 125.
[2]
Heather McDowell is the President of five “HONEY” branded stores. She is the registered owner of
the word trade-mark “HONEY” and the design mark “HONEY & DESIGN”, Registration Nos. TMA767,075 and
TMA767,134. The design mark appears below:
[3]
On June 10, 2013, the Registrar of Trade-marks
issued notice to Ms. McDowell requiring her to “furnish
an affidavit or statutory declaration showing, with respect to each of the
goods 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” (Trade-marks Act,
s 45).
[4]
The request for notice to be issued under s 45
of the Trade-marks Act was made by Laverana GmbH & Co KG [Laverana],
a German cosmetics manufacturer that has registered the trade-mark “HONEY MOMENTS” for use in Canada. Ms. McDowell is
disputing the registration of “HONEY MOMENTS” in
separate proceedings (McDowell v Laverana GmbH & Co. KG, 2015 TMOB
56, currently under appeal to this Court: Court File No. T-911-15).
[5]
Laverana has chosen not to respond to Ms.
McDowell’s appeal in this case.
[6]
Ms. McDowell’s trade-marks were both registered
for use in association with the following goods:
Clothing, namely, trousers, jeans, sweat
pants, yoga pants, active wear, pants, sweaters, sweatshirts, polo shirts,
shirts, skirts, blouses, dresses, hosiery, jackets, blazers, coats, ski
jackets, down filled jackets, fur jackets, wool coats, shorts, bathing suits,
loungewear; lingerie; footwear, namely, shoes, sandals, boots, slippers; men's,
women's and children's shoes made of leather, suede or silk, namely pumps, high
heels, dress shoes of any kind, sneakers, running shoes, basketball shoes, golf
shoes, training shoes, court shoes, track shoes, beach shoes, namely sandals,
flip flops and thongs; headwear, namely, hats, caps, bandannas, headbands,
visors; jewellery; fashion accessories, namely, scarves, shawls, purses, gloves,
watches; hair accessories, namely, combs, brushes, hair bands made of cloth or
plastic, barrettes, scrunchies, ponytail holders, hair clips, hair pins, and
hair ornaments; belts, sunglasses; cosmetics, namely foundation made of liquid
or powder, face creams, blush, eye shadow, eye liner, mascara, lipstick, lip
gloss, lip liner, make-up bags sold empty; giftware, namely, lamps, trays,
vases; ornaments and figurines made from ceramic, chinaware, glass, porcelain;
candy dishes.
[7]
The trade-marks were also both registered for
use in association with the following services:
Retail store
services, namely, the operation of a clothing, footwear, headwear, fashion
accessory and giftware outlet.
II.
Decision under Review
[8]
The Hearings Officer was satisfied that Ms.
McDowell had demonstrated use of the trade-marks in relation to the registered “services” within the meaning of ss 4(2) and 45 of the
Trade-marks Act. He also found that the licensing arrangement and
statement of control were sufficient to satisfy the requirements of s 50(1) of
the Trade-marks Act.
[9]
However, the Hearings Officer was not satisfied
that the evidence showed “sales or transfers of each of
the registered goods during the relevant period.” More fundamentally, he
found that Ms. McDowell could not demonstrate that the “HONEY”
mark is “marked on the goods themselves or on the
packages in which they are distributed or it is in any other manner so
associated with the goods that notice of the association is then given to the
person to whom the property or possession is transferred”, as required
by s 4(1) of the Trade-marks Act.
[10]
The Hearings Officer therefore ordered the
following amendments to Ms. McDowell’s registrations:
51 Registration No. TMA767,075 for
the trade-mark HONEY will be amended to delete the statement of goods. The
registration will be maintained with respect to the registered services.
52 Registration No. TMA767,134 for
the trade-mark HONEY & DESIGN will be amended to delete the statement of
goods. The registration will be maintained with respect to the registered
services.
III.
Issues
[11]
This application for judicial review raises the
following issues:
A. What is the standard of review?
B. Is the new evidence offered by Ms. McDowell in support of her appeal
material; if so, does it demonstrate use of the trade-marks in association with
the goods described in the registrations?
C. Did the Hearings Officer reasonably conclude that Ms. McDowell could
not demonstrate use of her trade-marks in association with the goods described
in the registrations?
IV.
Analysis
A.
What is the standard of review?
[12]
In the absence of new evidence, the standard of
review on an appeal from a decision of a Registrar is reasonableness (Mövenpick
Holding AG v. Exxon Mobil Corp, 2011 FC 1397 at para 8 [Mövenpick]);
Dunsmuir v New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190). Where new
evidence is material, the deference owed to a Hearings Officer’s expertise is
reduced but not eliminated. As Justice Binnie explained in Mattel, Inc v
3894207 Canada Inc, 2006 SCC 22, [2006] 1 S.C.R. 772 at paragraph 37:
Reception of new
evidence, of course, might (depending on its content) undermine the factual
substratum of the Board’s decision and thus rob the decision of the value of
the Board’s expertise. However, the power of the applications judge to
receive and consider fresh evidence does not, in and of itself, eliminate the
Board’s expertise as a relevant consideration: Lamb v. Canadian Reserve Oil
& Gas Ltd., [1977] 1 S.C.R. 517, at pp. 527-28.
[13]
If new evidence is found to be material, the
Registrar’s decision must be reviewed in light of all the evidence, both new
and old, and the Court must come to its own conclusion (Mövenpick at
para 10; Shell Canada Ltd v P.T. Sari Incofood Corp, 2008 FCA 279
at para 22).
B.
Is the new evidence offered by Ms. McDowell in
support of her appeal material; if so, does it demonstrate use of the
trade-marks in association with the goods described in the registrations?
[14]
The Hearings Officer concluded that Ms. McDowell
had adduced insufficient evidence to demonstrate the use of her trade-marks
with respect to each of the registered goods. He found that, at best, the
receipts annexed to her affidavit showed actual sales and transfers of two
shirts and one pair of jeans during the relevant period. It was unclear to the
Hearings Officer whether there were sales for the other registered goods such
as running shoes, sunglasses, lip gloss, or candy dishes.
[15]
The Hearings Officer acknowledged that a
registered owner is not obligated to provide invoices for each registered good,
citing Lewis Thomson & Sons Ltd v Rogers, Bereskin & Parr (1988),
21 CPR (3d) 483 (FCTD). However, in the absence of invoices, he found that Ms. McDowell
“should have been prepared to furnish evidence
regarding volumes of sales, dollar value of sales or equivalent factual
particulars to allow the Registrar to conclude that transfers in the normal
course of trade actually occurred in Canada with respect to each of the
registered goods” [emphasis original].
[16]
In this appeal, Ms. McDowell has sought to
remedy these gaps in the evidence by submitting a new affidavit pursuant to s
56(5) of the Trade-marks Act. She has divided the sales of the different
categories of goods bearing the trade-marks into percentages of the total. She
says that sales in each year during the relevant period have exceeded
$100,000.00. The 51 exhibits annexed to the new affidavit comprise: (1)
photographs of storefronts with the design mark prominently displayed; (2)
photographs of articles of clothing and accessories affixed with a tag bearing
the design mark; (3) receipts bearing the design mark; and (4) photographs of
logos and promotional materials bearing the design mark, including
advertisements, loyalty cards and sales bags, boxes and garment bags.
[17]
Assuming, without deciding, that the Hearings
Officer reasonably found that Ms. McDowell’s evidence was insufficient to
demonstrate her use of the trade-marks with respect to each of the registered
goods, I am satisfied that the new evidence offered by Ms. McDowell is
material to the appeal and fully addresses the gaps identified by the Hearings
Officer (Mövenpick at paras 10 and 32; Empresa Cubana Del Tabaco
Trading v Shapiro Cohen, 2011 FC 102 at para 48).
[18]
However, this does not end the matter. The
Hearings Officer also concluded that Ms. McDowell’s failure to adduce
sufficient evidence to demonstrate the use of her trade-marks with respect to
each of the registered goods was ultimately moot, as he was “not satisfied that the evidenced manner of
display constitutes use of the Marks in association with any goods sold in the
HONEY retail stores pursuant to section 4(1) of the Act.” This is a question of
mixed fact and law that is subject to review by this Court against the standard
of reasonableness.
C.
Did the Hearings Officer reasonably conclude
that Ms. McDowell could not demonstrate use of her trade-marks in association
with the goods described in the registrations?
[19]
Section 45 of the Trade-marks Act has
repeatedly been characterized by this Court as a housekeeping measure: its
fundamental purpose is to rid “deadwood” from
the registrar, not to resolve contentious issues between competing commercial
interests (Saks & Co v Canada (Registrar of Trade Marks), [1989] FCJ
No 28 (TD) at 6). In the words of the Federal Court of Appeal in Meredith
& Finlayson v Canada (Registrar of Trade Marks), [1991] FCJ No
1318 at 412 (FCA):
Section 45 provides a simple and expeditious
method of removing from the register marks which have fallen into disuse. It is
not intended to provide an alternative to the usual inter
partes attack on a trade mark envisaged by s 57.
The fact that an applicant under s 45 is not even required to have an interest
in the matter [...] speaks eloquently to the public nature of the concerns the
section is designed to protect [...] Clearly it is not intended that there
should be any trial of a contested issue of fact, but simply an opportunity for
the registered owner to show, [i]f he can, that his mark is in use or if not,
why not.
[20]
In this case, the Hearings Officer made several
contested findings regarding the evidence presented by Ms. McDowell. These
included whether Ms. McDowell’s mark was in fact “marked
on the goods themselves”, whether the “HONEY”
branded hang tags were essentially price tags, and therefore did not
distinguish the goods but only the retailer’s services; and whether the display
of Ms. McDowell’s mark on shopping bags and boxes, on the exterior and in-store
signage, on the advertising cards, business cards, and loyalty cards and at the
top of receipts gave the requisite notice of association pursuant to s 4(1) of
the Trade-marks Act, or constituted use in association with the retail
store services only.
[21]
In my view, the Hearings Officer’s
determinations of fact and law were contentious matters that were unsuited to
resolution under the summary process envisaged by s 45 of the Trade-marks
Act, particularly given the existence of a separate and ongoing inter
partes dispute involving a competing trade-mark registered by the
requesting party. Furthermore, hang tags and labels attached to goods would
ordinarily be sufficient to demonstrate that a trade-mark was displayed in
association with the goods during the relevant period (see, for example, Sim
& McBurney v Garbo Group Inc, 2013 TMOB 141 at para 10).
[22]
The Hearings Officer found that the evidence
presented by Ms. McDowell was ambiguous, and the ambiguity should be resolved
against the interests of the trade-mark owner:
At best, the evidence is ambiguous with
respect to whether any of the goods sold at the HONEY retail stores were HONEY
goods rather than third-party goods. Pursuant to Plough [Plough
(Canada) Ltd v Aerosol Fillers Inc, [1981] 1 FC 679 (CA)], this ambiguity
must be resolved against the interests of the Owner.
[23]
This conclusion was clearly wrong. Any ambiguity
in the evidence should have been resolved in favour of the registered owner,
Ms. McDowell (Black & Decker Corporation v Method Law Professional
Corporation, 2016 FC 1109 at para 15, citing Fraser Sea Food Corp v
Fasken Martineau Dumoulin LLP, 2011 FC 893 at para 19; see also Fairweather
Ltd v Registrar of Trade-marks, 2006 FC 1248 at para 41, aff’d 2007 FCA
376).
V.
Conclusion
[24]
The new evidence offered by Ms. McDowell in
support of her appeal fully addresses the gaps identified by the Hearings
Officer.
[25]
The Hearings Officer purported to resolve contentious
issues between competing commercial interests in a proceeding under s 45 of the
Trade-marks Act, applying an unreasonably onerous burden of proof. In
addition, the Hearings Officer resolved ambiguous evidence against Ms.
McDowell, when it should have been resolved in her favour. The Hearings
Officer’s decision was therefore unreasonable.
[26]
The appeal is allowed, and the original
registrations for both trade-marks are restored.
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