Date: 20090122
Docket: A-194-08
Citation: 2009 FCA 16
CORAM: NADON
J.A.
SEXTON
J.A.
EVANS
J.A.
BETWEEN:
GLENORA DISTILLERS
INTERNATIONAL LTD.
Appellant
and
THE SCOTCH WHISKY ASSOCIATION
Respondent
REASONS FOR JUDGMENT
SEXTON J.A.
[1]
This is an
appeal from a decision of Justice Harrington, allowing the Scotch Whisky
Association’s (“the Association”) appeal from a decision of the Trade-Marks
Opposition Board. He held that the appellant, Glenora Distillers International
Ltd. (“Glenora”), was not entitled to register the trademark GLEN BRETON, for
use in association with a single-malt whisky, as it was a mark prohibited by
section 10 of the Trade-marks Act. For the reasons that follow, I am of
the opinion that the decision of Justice Harrington should be set aside, and
Glenora should be entitled to register its proposed trademark.
RELEVANT LEGISLATIVE PROVISIONS
[2]
Subsection
12(1) of the Trade-marks Act, R.S.C. 1985, c. T-13, sets out the
circumstances in which a trademark is not registrable:
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When
trade-mark registrable
12. (1) Subject to section 13, a trade-mark is
registrable if it is not
(a)
a word that is primarily merely the name or the surname of an individual who
is living or has died within the preceding thirty years;
(b)
whether depicted, written or sounded, either clearly descriptive or
deceptively misdescriptive in the English or French language of the character
or quality of the wares or services in association with which it is used or
proposed to be used or of the conditions of or the persons employed in their
production or of their place of origin;
(c)
the name in any language of any of the wares or services in connection with
which it is used or proposed to be used;
(d)
confusing with a registered trade-mark;
(e)
a mark of which the adoption is prohibited by section 9 or 10;
(f)
a denomination the adoption of which is prohibited by section 10.1;
(g)
in whole or in part a protected geographical indication, where the trade-mark
is to be registered in association with a wine not originating in a territory
indicated by the geographical indication;
(h)
in whole or in part a protected geographical indication, where the trade-mark
is to be registered in association with a spirit not originating in a
territory indicated by the geographical indication; and
(i)
subject to subsection 3(3) and paragraph 3(4)(a)
of the Olympic and Paralympic Marks Act, a mark the adoption of which
is prohibited by subsection 3(1) of that Act.
|
Marque de commerce
enregistrable
12. (1) Sous
réserve de l’article 13, une marque de commerce est enregistrable sauf dans
l’un ou l’autre des cas suivants :
a) elle est
constituée d’un mot n’étant principalement que le nom ou le nom de famille
d’un particulier vivant ou qui est décédé dans les trente années précédentes;
b) qu’elle
soit sous forme graphique, écrite ou sonore, elle donne une description
claire ou donne une description fausse et trompeuse, en langue française ou
anglaise, de la nature ou de la qualité des marchandises ou services en
liaison avec lesquels elle est employée, ou à l’égard desquels on projette de
l’employer, ou des conditions de leur production, ou des personnes qui les
produisent, ou du lieu d’origine de ces marchandises ou services;
c) elle est
constituée du nom, dans une langue, de l’une des marchandises ou de l’un des
services à l’égard desquels elle est employée, ou à l’égard desquels on
projette de l’employer;
d) elle crée
de la confusion avec une marque de commerce déposée;
e) elle est
une marque dont l’article 9 ou 10 interdit l’adoption;
f) elle est
une dénomination dont l’article 10.1 interdit l’adoption;
g) elle est
constituée, en tout ou en partie, d’une indication géographique protégée et
elle doit être enregistrée en liaison avec un vin dont le lieu d’origine ne
se trouve pas sur le territoire visé par l’indication;
h) elle est
constituée, en tout ou en partie, d’une indication géographique protégée et
elle doit être enregistrée en liaison avec un spiritueux dont le lieu
d’origine ne se trouve pas sur le territoire visé par l’indication;
i) elle est
une marque dont l’adoption est interdite par le paragraphe 3(1) de la Loi
sur les marques olympiques et paralympiques, sous réserve du paragraphe
3(3) et de l’alinéa 3(4)a) de cette loi.
|
[3]
Paragraph
12(1)(e) states, in part, that a trademark is not registrable if it is a
prohibited mark within the meaning of section 10 of the Act, which reads:
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Further
prohibitions
10. Where any
mark has by ordinary and bona fide commercial usage become recognized in
Canada as designating the kind, quality, quantity, destination, value, place
of origin or date of production of any wares or services, no person shall
adopt it as a trade-mark in association with such wares or services or others
of the same general class or use it in a way likely to mislead, nor shall any
person so adopt or so use any mark so nearly resembling that mark as to be
likely to be mistaken therefor.
|
Autres interdictions
10. Si une
marque, en raison d’une pratique commerciale ordinaire et authentique,
devient reconnue au Canada comme désignant le genre, la qualité, la quantité,
la destination, la valeur, le lieu d’origine ou la date de production de
marchandises ou services, nul ne peut l’adopter comme marque de commerce en
liaison avec ces marchandises ou services ou autres de la même catégorie
générale, ou l’employer d’une manière susceptible d’induire en erreur, et nul
ne peut ainsi adopter ou employer une marque dont la ressemblance avec la
marque en question est telle qu’on pourrait vraisemblablement les confondre.
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FACTS
[4]
Glenora is
a distiller located in Cape
Breton, Nova Scotia.
In 1990, it began distilling a single malt whisky, claiming to use the
traditional Scottish method. It claims that its product has the taste,
character, and aroma of a Scotch whisky. However, Glenora is not permitted to
call its whisky “Scotch.” “Scotch whisky” is a protected geographical
designation pursuant to section 11.12 of the Trade-marks Act, and may
only be used in association with whiskies produced in Scotland.
[5]
Section
B.02.016 of the Food and Drug Regulations, C.R.C., c. 870, also
states that in order to be labelled “Scotch” or “Scotch whisky,” a product must
have been distilled in Scotland, in accordance with the laws
of the United
Kingdom.
Ironically, Glenora is also not entitled to call its product “Canadian whisky,”
as it does not have the taste, character, and aroma associated with Canadian
whisky, as required by section B.02.020 of the same Regulations.
[6]
Thus,
Glenora’s product is called simply “single malt whisky.” Nevertheless, its
marketing has capitalized greatly on the similarities between its whisky and
Scotch whiskies, and Glenora states that it considers its product to be in
direct competition with single-malts distilled in Scotland. I believe it is fair to say that
Glenora has marketed its product as being like a single-malt Scotch in
everything but name.
[7]
Glenora
applied to register GLEN BRETON as a trademark for use in association with its
whisky in 2000. That application was opposed by the Association. The
Association takes exception to Glenora using a mark prefixed with the word “glen”
for its whisky. It claims that the use of “glen”-prefixed marks in association
with several well-known single malt Scotches, including Glenlivet, Glenmorangie,
and Glenfiddich, has resulted in an association between the word “glen” and whiskies
distilled in Scotland. The grounds of opposition
relevant to this appeal are premised on this alleged association.
[8]
The
Trade-marks Opposition Board rejected the Association’s objection. Although
there was evidence of “glen”-prefixed marks used by Scotch whisky distillers,
the Board found that this use was not widespread enough to have instructed
Canadian consumers to associate the word “glen” with Scotch whiskies.
Accordingly, it found that “glen” had not become recognized through “ordinary
and bona fide commercial use” as designating the geographic origin of
whisky, and was not a prohibited mark pursuant to section 10 of the Trade-marks
Act.
DECISION BELOW
[9]
The
Association applied to the Federal Court for judicial review of the Board’s
decision, filing significant new evidence on the issue of confusion in the
marketplace. Justice Harrington found that the new evidence was sufficiently
material that it would have affected the Board’s decision, and that he was
therefore entitled to review that decision on a standard of correctness (Christian
Dior, S.A. v. Dion Neckwear Ltd., 2002 FCA 29, [2002] 3 F.C. 405 at paragraph
8).
[10]
Unlike the
Board, Justice Harrington was of the opinion that there was a more extensive
reputation associated with “glen”-prefixed Scotch whisky brands. He stated
(2008 FC 425 at paragraphs 18-19):
The record shows that in
2000 some 896,607 cases of Scotch whisky were imported into Canada. This
works out to some ten million six hundred twenty five thousand three hundred
and seventy-six (10,625,376) 75cl bottles. The malt whisky portion
thereof came to 132,000 cases, i.e. some 1,584,000 bottles, representing
approximately 15% of Scotch whisky sales.
The “Glen” single malts
came to 933,000 bottles or close to 59% of the single malts…
[11]
He also
considered that a “glen”-prefixed mark had not been used in Canada in recent memory in
association with a whisky that was not a Scotch whisky.
[12]
Perhaps
more importantly, Justice Harrington found that there was actual confusion in
the marketplace, and that some consumers were not aware that Glenora’s product
was not a Scotch distilled in Scotland. In reaching this conclusion,
he had particular regard to evidence that Glenora’s whisky had been listed on
several bar and restaurant lists under the heading “Scotch,” albeit
occasionally with some sort of note attempting to clarify that it was Canadian.
There was also evidence before him that similar mistakes had been made by a few
independent critics and reviewers.
[13]
Justice
Harrington did not accept the argument that any confusion was due to the fact
that Glen Breton has many of the characteristics of a Scotch (flavour, aroma,
and so forth), and found on a balance of probabilities that the confusion was
due to the use of a “glen”-prefixed mark. He concluded that the word “glen”
had, by ordinary and bona fide commercial use, become recognized in Canada as designating Scotch whisky,
and was thus a prohibited mark pursuant to section 10 of the Act. He therefore
allowed the application, and directed the Registrar of Trade-marks to refuse
Glenora’s application to register GLEN BRETON.
[14]
Glenora
now appeals to this court.
STANDARD OF REVIEW
[15]
The first role
of this court in reviewing the Federal Court’s decision is to ensure that
Justice Harrington selected and applied the appropriate standard of review to
the decision of the Trade-marks Opposition Board. I agree that Justice
Harrington was entitled to review the Board’s decision on a standard of
correctness, given the quantity of new evidence before him, and his conclusion
that the new evidence would have affected the Board’s decision.
[16]
As Justice
Harrington was entitled to apply the standard of correctness, this court may
only interfere with his decision if he made a palpable and overriding error in
resolving a question of fact, or made an error of law in his analysis (Housen
v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235).
ANALYSIS
[17]
I am of
the view that Justice Harrington made an error of law by failing to consider
whether the word “glen,” having only previously been used as part of various
registered trademarks, is in fact a “mark” within the meaning of section 10 of
the Trade-marks Act. Counsel advised this court at the oral hearing that
this argument was put before the Federal Court, but it is not addressed in the
reasons.
[18]
In its
memorandum of fact and law, the Association suggests that Justice Harrington
held, at paragraph 16 of his reasons, that “Glen, as a mark, has become
recognized as designating Scotch whisky in Canada.” However, he
did not address specifically the argument that “glen,” being only a segment of
the mark GLEN BRETON, and only a segment of any registered trademark (e.g.
GLENFIDDICH) was not in itself a mark. He stated only that:
I am,
therefore, satisfied that Glen Breton is not registrable under section 12(1)(e)
of the Act because its adoption is prohibited by section 10 as no person shall
adopt a mark as a trade-mark if it has by “ordinary and bona fide
commercial usage become recognized in Canada as designating the…place of
origin…of any wares…of the same general class.”
[19]
There was
no express finding that “glen” was a mark, and no evidence has been shown to us
that would justify such a finding.
[20]
The word
“glen,” standing alone, has never been used as a trademark in Canada, for any product. However, it
has been used as a prefix for many trademarks associated with Scotch whisky, most
famously GLENFIDDICH, GLENMORANGIE, and GLENLIVET. Trademarks incorporating the
word “glen” have also been registered for many products and services completely
outside the liquor and beverage trade (for example, GLENCOE for plows and GLEN
ABBEY for real estate development services).
[21]
“Mark,” as
it appears in section 10, is not defined by the Act. A “trade-mark” is defined
in section 2, in part, as “a mark that is used by a person for the purpose of
distinguishing or so as to distinguish wares or services manufactured, sold,
lease, hired or performed by him from those manufactured, sold, leased, hired
or performed by others.” The respondent argues that the term “mark” is clearly
broader the term “trade-mark,” and suggests that the word “glen,” which forms part
of many registered trademarks, can be considered on its own as a “mark” for the
purposes of section 10.
[22]
I agree
with the first part of this argument, that a mark is not necessarily a
trademark. Fox on Trademarks makes clear that a mark that is used for
purely decorative or warehouse purposes will not be considered a trademark
unless it has actually come to distinguish the trader of the goods (4th ed.,
looseleaf (Toronto: Thomson Carswell, 2002) at 3-14 to 3-16). For instance, a
sticker affixed to a ware to indicate to warehouse employees the date of
manufacture would most likely not fall within the definition of a “trade-mark.”
Likewise, a certification mark (a mark used to indicate that goods meet a
defined standard, such as being “organic”), which may be used by many different
traders, is a “mark” but not a “trade-mark,” as it is not unique to any
particular trader.
[23]
However,
this court has not been referred to any authority for the proposition that a
segment of a trademark can stand alone as a mark. In my view, this would run
counter to numerous authorities, albeit outside the context of section 10,
stating that trademarks should generally not be dissected and analyzed syllable
by syllable.
[24]
Two such
authorities are Thomas J. Lipton Ltd. v. Salada Foods Ltd. (No. 3) (1979),
45 C.P.R. (2d) 157 (F.C.T.D.) and Park Avenue Furniture Corp v.
Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 (F.C.A.). In Lipton,
the applicant sought to register LIPTON CUP-A-TEA to be used in association
with tea, disclaiming the word “tea,” but not “cup.” The opponent argued that
the CUP-A-TEA was not registrable as it was clearly descriptive of Lipton’s
product (as contemplated in paragraph 12(1)(b) of the Act), and therefore
additionally could not be distinctive. Justice Addy cited Dr. Fox for the
proposition that “It is clear that when assessing a trade mark to determine
whether it is distinctive, the mark must be looked at as a whole. It is not
proper to dissect it.” (at page 162)
[25]
In the Park
Avenue case, the applicant sought to register POSTURE-BEAUTY for beds,
mattresses, and other furniture. The opponent claimed that the mark would be
confusing with several of its already-registered marks (including BEAUTYREST
and BEAUTYSLEEP), and was therefore not registrable pursuant to paragraph
12(1)(d) of the Act. Writing for this court, Justice Desjardins held that the
marks were to be considered in their entireties to discern the likelihood of
confusion. She found that by improperly segmenting the mark, the trial judge had
given the opponent very strong trade protection for the word “beauty,” which
Justice Desjardins described as “a common English word” and a “weak mark” (at
pages 426-427). She cited the following passage from Fox on Trademarks (at
page 426):
...
In applying these tests the first principle to be invoked is that the marks are
to be looked at as totalities and not as dissected items. The idea of each
mark, that is, the net impression left by the mark as a whole upon the mind is
to be considered. It is the mark taken in its entirety that is to be examined
and a decision then arrived at whether such mark is likely to cause confusion
with one already registered... The true test is whether the totality of the
mark proposed to be registered is such that it is likely to cause mistake or
deception or confusion in the minds of persons accustomed to the existing trade
mark. It is the combination of the marks as a whole that is to be regarded and
the effect or idea of the whole that is to be compared.
[26]
While
neither of these cases deal directly with section 10 of the Act, in my view,
the same essential logic applies, and it would be improper for this court to
segment the previously registered marks, or the appellant’s mark GLEN BRETON,
as the respondent suggests. First, these authorities disclose a broader pattern
of the courts refusing to dissect trademarks as part of a registrability
analysis, which is itself persuasive. Further, the reasoning of Park Avenue is compelling. The word “glen,” being a
common word and forming part of numerous registered trademarks, is at best a
weakly distinctive component of those trademarks. However, by segmenting those
trademarks to consider “glen” as a mark on its own, this court would be
affording stronger trade protection to that word than is due.
[27]
The
Trade-marks Opposition Board has also held that the totality of a trademark
must be considered in the section 10 analysis. Even where a particular word is
prohibited, if the word is used in combination with a distinctive element such
that the prohibited word does not dominate, the trademark will still be
registrable. Citing Lipton for the non-dissection principle, the Board
allowed the registration of MOLSON EXPORT, notwithstanding the argument that
EXPORT was prohibited (John Labatt Ltd. v. Molson Cos./Cies Molson
(1983), 2 C.P.R. (3d) 150). On my reading, the Board in this case applied the
same approach, when it stated that “Even if GLEN had been established as a mark
prohibited by Section 10, the applicant’s mark GLEN BRETON does not so nearly
resemble the word GLEN as to be mistaken for it.” (at paragraph 28)
[28]
I
therefore conclude that the word “glen” has not been shown to constitute a mark
within the meaning of section 10 of the Trade-marks Act, and therefore
cannot be prohibited. Alternatively, even if “glen” could be considered
a mark and is prohibited, I find that it does not dominate GLEN BRETON as
contemplated in Molson, when that trademark is considered as a whole.
[29]
I also briefly
note that this is a somewhat unusual case under section 10 of the Act. Fox
on Trademarks describes the purpose of this section as follows (at 5-66.5):
This section
is obviously designed…to prohibit the adoption of such marks as the hallmark
for silver and such other well-known marks indicative of quality or origin.
[30]
All of the
section 10 cases to which we were referred concerned the prohibition of
particular words or phrases (as opposed to designs or other symbols). In all of
these authorities, the words in question have been inherently descriptive of
the character or quality of the products being sold. For instance, in Bank
of Montreal v. Merrill Lynch & Co. (1997), 84 C.P.R. (3d) 262, the
Trade-marks Opposition Board held that CASH MANAGEMENT ACCOUNT was prohibited
in association with financial services, as it was commonly understood as “designating
a type of financial service through which one can consolidate and manage cash
investments and credit through one account.” (at page 275)
[31]
Similarly, the Board held that HABANOS was a prohibited mark for
tobacco products, as it resembled the marks HABANA and HAVANA
commonly used by traders and understood, among other uses, as designating Cuban
tobacco by reference to Cuba’s capital (Benson & Hedges (Canada)
Ltd. v. Empresa Cubana Del Tabaco (1975), 23 C.P.R. (2d) 274). In cases like these, section 10
prevents a single trader from having a monopoly over a mark that is common to
the trade and well-understood as designating a particular quality of wares or
services.
[32]
Naturally,
it would be possible for a mark that is not inherently descriptive of any
quality of a product, through ordinary and bona fide commercial usage, to
become a designator mark. This is an unusual section 10 case, however, in that
the respondent is essentially seeking to establish a monopoly over a word,
which is not inherently descriptive, for a group of traders (namely, its
members), when it is not clear that any of the Association’s members
incorporated the word into their trademarks for the purpose of designating
their whiskies as being from Scotland.
[33]
Counsel
for the Association insisted at the hearing that even if a “glen”-prefixed mark
was prohibited by section 10, its members would be entitled to continue using
their own “glen”-prefixed marks, since they distil Scotch whiskies. This is
completely contrary to the plain wording of the provision, which states that
“no person” shall adopt a prohibited mark as a trademark.
[34]
In short,
success in this appeal would jeopardize the trademarks of many of the
Association’s members. In my view, this cannot be the correct result, and is
not true to the spirit and purpose of section 10 of the Act. Accordingly, I
would allow the appeal, and direct the Registrar to allow Glenora’s application
for the registration of GLEN BRETON.
[35]
Finally,
Justice Harrington also made a distinct finding that GLEN BRETON was not
clearly descriptive or deceptively misdescriptive of the appellant’s wares,
within the meaning of paragraph 12(1)(b) of the Act. While the
respondent argued this point again in its written submissions before this
court, it did not point to any particular error in the reasons, and it did not
pursue the issue in oral argument. I do not see any error in Justice
Harrington’s conclusion on paragraph 12(1)(b) meriting this court’s
intervention.
CONCLUSION
[36]
For the
foregoing reasons, I would allow this appeal with costs, here and below, and issue
an order directing the Registrar to allow Glenora’s application to register
GLEN BRETON.
"J.
Edgar Sexton"
"I
agree
M. Nadon J.A."
"I
agree
John M. Evans J.A."
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