Tradition Fine Foods Ltd. v. Oshawa Group Ltd., 2005 FCA 342

Date: 20051025

Docket: A-500-04

Citation: 2005 FCA 342

CORAM:         LÉTOURNEAU J.A.

ROTHSTEIN J.A.                 

MALONE J.A.

BETWEEN:                                                        

                                                  TRADITION FINE FOODS LTD.

Appellant

and

THE OSHAWA GROUP LIMITED, SOBEYS INC., ALIMENTATION

BLANCHETTE ET CYRENNE INC., MARCHÉALAIN LARIVIÈRE INC.,

MARCHÉJIMMY INC., MARCHÉRÉAL CHARTIER INC., 9063-8867

QUÉBEC INC. c.o.b.a. MARCHÉJULIEN, ARSENE GAUDREAULT INC.,

and 2959-1120 QUÉBEC INC. c.o.b.a. GROSSISTE DE L'ENCAN

Respondents

                                       Heard at Toronto, Ontario, on September 14, 2005.

                               Judgment delivered at Ottawa, Ontario, on October 25, 2005.

REASONS FOR JUDGMENT BY:                                                                              MALONE J.A.

CONCURRED IN BY:                                                                                            ROTHSTEIN J.A.

CONCURRING REASONS BY:                                                                        LÉTOURNEAU J.A.

Date: 20051025

Docket: A-500-04

Citation: 2005 FCA 342

CORAM:         LÉTOURNEAU J.A.

ROTHSTEIN J.A.                 

MALONE J.A.

BETWEEN:

TRADITION FINE FOODS LTD.

Appellant

and

THE OSHAWA GROUP LIMITED, SOBEYS INC., ALIMENTATION

BLANCHETTE ET CYRENNE INC., MARCHÉALAIN LARIVIÈRE INC.,

MARCHÉJIMMY INC., MARCHÉRÉAL CHARTIER INC., 9063-8867

QUÉBEC INC. c.o.b.a. MARCHÉJULIEN, ARSENE GAUDREAULT INC.,

and 2959-1120 QUÉBEC INC. c.o.b.a. GROSSISTE DE L'ENCAN

Respondents

                                                    REASONS FOR JUDGMENT

MALONE J.A.

I.          Introduction

[1]                This is an appeal by Tradition Fine Foods Ltd. (Tradition) from a decision of O'Reilly J., dated July 20, 2004, dismissing its action for trade-mark infringement and passing off (Tradition Fine Foods Ltd. v. Oshawa Group Ltd., [2004] F.C.J. No.1244). Tradition commenced its action

in 1999 seeking two million dollars in damages and an injunction restraining the respondents (hereinafter Sobeys) from using the word 'Tradition', for which it held three separate registered trade-marks.

[2]                Tradition produces a range of fresh and frozen baked goods that are sold in grocery stores and convenience stores and are used by various other institutions, such as hotels and hospitals. Its trade-marks are in respect of frozen, unpackaged bakery products as well as goods that are baked and then frozen.    Its products include muffins, croissants, cookies, cakes and pastries.

[3]                Sobeys began opening a chain of small, franchised, fresh market grocery stores in Quebec and Ontario in 1997, using the bilingual word 'Tradition' in its signage and graphics. Each store carries a wide variety of commercial grocery wares including fresh and frozen bakery products sold from an in-store bakery. In Quebec, Sobeys operates its stores under the trade name, "Les Marchés Tradition" which was registered as a trade-mark for retail grocery services in September of 2000.

[4]                At trial, Tradition asserted that Sobeys' use of the mark 'Tradition' and "Les Marchés Tradition" infringed on their rights under section 20 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act); rights which it said are exclusive under section 19 of the Act. Furthermore, it alleged that Sobeys use of the mark 'Tradition' was easily confused with the appellant's various registered marks, violating paragraph 7(b) and subsection 20(1) the Act, all of which depreciated the goodwill built up by Tradition in its various registered trade-marks. The appellant also argued before this Court that the judge erred in according its survey evidence too little probative value once admitted and that he erred in finding that certain misdirected calls were not evidence of actual confusion.             

II.        Decision Below

[5]                After reviewing and weighing the evidence, the judge concluded that Tradition had not discharged its onus to demonstrate that Sobeys had breached any of its trade-mark rights. In particular O'Reilly, J. determined that the plaintiff's trade-mark, Tradition, was a weak trade-mark, commonly adopted and used by many other food producers who co-existed in the retail grocery market. As to Sobeys registered trade-mark "Les Marchés Tradition", it's use in association with retail grocery services was found not to be reasonably likely to lead to confusion with the plaintiff's marks as required by subsection 6(5) of the Act. Overall, the evidence alleging confusion by the plaintiff from telephone callers and from participants in a market survey conducted by its expert were weighed and discounted as non-persuasive. In essence, the judge found that there was little risk of confusion between the wares and services of the two companies and that the evidence did not establish that consumers were actually confused as between Tradition's baking business and Sobeys' grocery stores.

III.       Issues

[6]                The issues before this court may be summarized as follows:

a.          Did the judge err in finding that Sobeys' use of the word 'Tradition' did not infringe the appellant's right to the exclusive use of its registered trade-mark according to section 19 of the Act?

b.          Did the judge err in finding that the use of the word 'Tradition' does not violate paragraph 7(b) and subsection 20(1) of the Act to the extent that it causes confusion?

IV.       Analysis

[7]                A finding of the existence or absence of a reasonable likelihood of confusion involves a judicial determination of practical and concrete questions of fact. (See Ferrero S.p.A. v. Les Produits Freddy Inc. (1988), 22 C.P.R. (3d) 346 at 350 (F.C.A.).) This Court should only interfere with a finding of fact where the judge below has made a palpable and overriding error (see Housen v. Nikolaisen, [2002] 2 S.C.R. 235). In trade-mark cases it has recently been decided by this Court in WIC TV Amalco Inc. et al. v. ITV Technologies, Inc., [2005] F.C.J. No.438 at paragraph 36 that:

"where a judge is called upon to apply the multifaceted statutory test for infringement found at subsection 6(5) of the Act, where the weight to be assigned to each factor varies with the circumstances, an error in the assessment of a particular factor does not amount to a palpable and overriding error, unless it is such that it is determinative of the result. To hold otherwise is to make each factor critical to the analysis, a conclusion which is clearly not supported by the jurisprudence."

Issue 1 - Section 19 of the Act

[8]                Under section 19 of the Act the owner of a registered trade-mark has the

exclusive right to use the registered trade-mark in respect of those registered wares or services. A breach of section 19 only occurs when the alleged infringer uses the identical trade-mark for the identical wares or services as registered. In Mr. Submarine Ltd. v. Amandista Investments Ltd, (1987), 19 CPR (3d) 3 (F.C.A.) at page 8, Thurlow, C.J. states that there is no infringement of section 19 unless the trade-mark is appropriated as registered:

If, indeed, a right of action for infringement arises under s.19 on the taking of the registered mark...it seems to me that it is only the taking of the mark as registered on which such an action could be maintained and that any right of action for infringement that the registered owner may have in the taking of a part of the registered mark or in the use of a similar trade mark must arise, if at all, under s.20 or possibly under s.22. (emphasis added)

[9]                In this case, the judge made findings of fact that Sobeys had not used the trade-mark 'Tradition' in association with baked goods (see paragraph 11 of his Reasons). The appellant argued that the judge erred in this conclusion and pointed to evidence of the word "Tradition" on bakery goods. However, the trade-mark is not identical. The wording on the packaging of the bakery goods is "Marche Tradition", which is not identical to "Tradition", the appellant's registered mark.    In my view, the trade-marks are merely similar and the judge's findings were reasonable in concluding Sobeys did not infringe Tradition's rights under section 19 of the Act.

Issue 2 - Confusion

[10]            In actions under paragraph 7(b) and subsection 20(1) of the Act, the burden is on Tradition to show confusion. Tradition argued that Sobeys' use of the names "Tradition Market Fresh Foods" and "Les Marchés Tradition" was confusing, particularly in light of the prominence given to the word "Tradition" on signage. The parties agreed at trial that to find confusion the Court must answer the following question affirmatively; "If both trade-marks were used in the same area, would the average consumer likely infer that the wares of the two vendors actually have the same source?" This same question has been commonly used in trade-mark cases. (See British Drug Houses Ltd. v. Battle Pharmaceuticals, (1944), 4 CPR 48 (Ex. Ct.); Miss Universe, Inc. v. Bohna, (1994), 58 C.P.R. (3d) 381 (F.C.A.); and Polo Ralph Lauren Corp. v. United States Polo Association et al., (2000), 9 C.P.R. (4^th ) 51 (F.C.A.).)

[11]            On appeal, the appellant argues that this test was not used comprehensively enough. Tradition argues that O'Reilly, J. did not consider how the parties might carry on business in the future and how that would impact on the issue of confusion. O'Reilly, J. considered the hypothetical situation in which the appellant's products would be sold in the respondent's stores and rejected the argument because of the nature of the appellant's business; ie. that it is highly unlikely that the appellant's wares would be sold in the respondent's store (see paragraph 44 of his Reasons).

[12]            According to subsection 6(5) of the Act, the Court must answer the question put forth in paragraph 10 with regard to all the surrounding circumstances and taking into consideration the factors set out in that subsection. Subsection 6(5) reads as follows:

[13]            In this case, the judge considered evidence of actual confusion, including phone calls received by Tradition where a few callers wondered whether there was a connection between Tradition and the new grocery stores. He also considered survey evidence provided by Tradition's expert. Finally, he considered the statutory factors set out in subsection 6(5) of the Act.

[14]            On appeal, Tradition argues that the judge should not have minimized the weight of its expert's evidence given the fact that Sobeys did not produce a survey or an expert of their own, and that he erred when he substituted his opinion of the efficacy of control conditions for those of the expert who conducted the survey. I disagree. There is ample jurisprudence in which judges have given less probative value to survey evidence where such evidence was found to be unpersuasive. (See Joseph E. Seagram & Sons Ltd. v. Seagram Real Estate Ltd., (1990), 33 CPR (3d) 454 at 455 (F.C.T.D.) and National Hockey League v. Pepsi Cola Canada Ltd., (1995), 59 CPR (3d) 216 (B.C.C.A.).) A judge is not bound by expert evidence and legally has the power to make the final determination. He is not substituting his views for those of the expert, but rather appreciating the evidence submitted by the expert. (See Transport Publishing Co. Pty. Ltd. v. Literature Board of Review, (1956), 99 C.L.R. 111 at 119 (H.C.A.), and Regina v. Prairie Schooner News Ltd. and Powers, (1970), 75 W.W.R. 585 (Man C.A).)

[15]            The appellant further argues that the judge erred when he found that the misdirected phone calls were not evidence of actual confusion citing Mr. Submarine Ltd. for the principle that misdirected phone calls represent actual confusion. In my analysis, the key differences between Mr Submarine and the present case is that in Mr. Submarine Ltd. the two parties were in the identical business and the necessity of contacting the appropriate place by phone was much more important in the pizza/submarine sandwich business than in the grocery/bakery business.

[16]            Sobeys argues that the "type" of confusion which the Act seeks to prevent is confusion as to source or origin of a particular service or product, but not if the consumers' confusion arises out of their carelessness, ignorance, indifference or misinformation. (See Stiga Aktiebolag et al. v. S.L.M. Canada Inc., (1990), 34 CPR (3d) 216 at 236 (F.C.T.D.).) For example, choosing a similar name in a phone book has been held to be an example of carelessness or misinformation. (See Kits Cabaret Vancouver Ltd. v. Armstrong, (1992), 44 CPR (3d) 73 at 77 (B.C.S.C.).) In my view, O'Reilly, J. was correct in stating that the existence of this evidence may be relevant within the overall test for likelihood of confusion, but it does not amount to evidence of actual confusion.

[17]            Overall, the concerns of the appellant relate to the weight to be given to the evidence presented. O'Reilly, J. was required to determine whether or not the average consumer was likely to infer that the wares of the appellant and the services of the respondent actually have the same source, and he did so. In considering the statutory factors, the judge stated that unlike in Oshawa Holdings Ltd. v. Fjord Pacific Marine Industries Ltd., (1981), 55 C.P.R. (2d) 39 (F.C.A.), it is possible that some confusion could arise if "Tradition" products were sold in the respondent's stores. However, he concluded that given the nature of the appellant's business, this hypothetical was not enough to justify a finding of likelihood of confusion. In the result, I find no palpable or overriding error in his conclusions.

[18]            I agree with Justice O'Reilly's ultimate conclusion that neither the phone calls, the results of survey evidence or an analysis of the statutory factors proved that there was confusion.

V.        Conclusion

[19]            The appeal should be dismissed with costs set at a lump sum of $10,000, inclusive of disbursements and G.S.T.

                                                                                         "B. Malone"             

                                                                                                      J.A.               

"I agree

Marshall Rothstein

J.A."

LÉTOURNEAU J.A. (Concurring)

[20]            After careful consideration and not without some hesitation, I have come to the conclusion that this appeal should be disposed of as proposed by my colleague.

                                                                               "Gilles Létourneau"           

                                                                                                      J.A.                   

                         FEDERAL COURT OF APPEAL

             Names of Counsel and Solicitors of Record

DOCKET:                                           A-500-04

STYLE OF CAUSE:               TRADITION FINE FOODS LTD.

Appellant

- and -

THE OSHAWA GROUP LIMITED ET AL

Respondents

PLACE OF HEARING:                     Toronto, Ontario

DATE OF HEARING:           September 14, 2005

REASONS FOR JUDGMENT BY: Malone J.A.

CONCURRED IN BY:                      Rothstein J.A.

CONCURRING REASONS BY:      Létourneau J.A.

DATED:                         October 25, 2005

APPEARANCES BY:

Mr. Gregory A. Piasetski For the Appellant

Mr. Sam El-Khazen           For the Appellant

Mr. Arthur B. Renaud        For the Respondents

Ms. Jeilah Y. Chan             For the Respondents

SOLICITORS OF RECORD:

PIASETSKI & NENNIGER LLP

Toronto, Ontario                For the Appellant

BENNETT JONES LLP

Barristers and Solicitors

Toronto, Ontario                For the Respondents