Docket: A-170-15
Citation:
2016 FCA 265
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CORAM:
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PELLETIER J.A.
GAUTHIER J.A.
SCOTT J.A.
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BETWEEN:
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PIZZAIOLO
RESTAURANTS INC.
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Appellant
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and
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LES RESTAURANTS
LA PIZZAIOLLE INC.
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Respondent
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REASONS
FOR JUDGMENT
GAUTHIER J.A.
[1]
Pizzaiolo Restaurants Inc. (the appellant)
appeals from a judgment of the Federal Court (2015 FC 240) allowing the appeal
brought by Les Restaurants La Pizzaiolle Inc. (the respondent) from a decision
of the Trade-marks Opposition Board (the Board). In its said decision (2013
TMOB 118), the Board allowed the respondent’s opposition to the registration of
the appellant’s proposed trade-mark “Pizzaiolo” (the Word Mark) but rejected
its opposition in respect of the appellant’s proposed design trade-mark (the
Design Mark). Only the decision in respect of the Design Mark (application
number 1,416,446) was at issue before the Federal Court.
[2]
The Federal Court applied the reasonableness
standard to determine if the Board had erred in reaching its conclusion that
the opposition should be rejected as the appellant had established that there
was no likelihood of confusion. I agree with the parties that since the new
evidence filed by both parties would not have materially affected the
Registrar’s decision, the Federal Court correctly identified the standard of
review applicable to the issues before it.
[3]
Thus, the only question before us is whether the
Federal Court properly applied the reasonableness standard: Agraira v.
Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 at para. 35,
[2013] 2 S.C.R. 559. In order to do so, rather than focusing on the reasons of
the Federal Court, this Court’s focus must be on the Board’s decision, for it
essentially steps into the shoes of the Federal Court.
[4]
Although several more grounds of objection had
been raised before the Board, the only two grounds that are relevant to this
appeal are first, that the proposed Design Mark was not registerable because it
would be confusing with the respondent’s registered word mark “La Pizzaiolle”: paragraph
12(1)(d) (non-registerability) of the Trade-marks Act, R.S.C., 1985, c.
T‑13 (the Act). Second, the proposed Design Mark was not
registerable pursuant to paragraph 16(1)(a) of the Act (non-entitlement)
because on the date of first use claimed by the appellant in its trade-mark
application — November 13, 2000, the said Design Mark was confusing with
trade-mark(s) that had been previously used or made known in Canada by the
respondent.
[5]
Both grounds (confusion with a registered mark
and with a used mark) require essentially the same exercise to determine the
likelihood of confusion. One must consider the criteria set out at section 6 of
the Act, particularly those listed in subsection 6(5). However, the
material dates at which the relevant surrounding circumstances are examined
differ. Under paragraph 12(1)(d), the material date is the day the Board
disposes of the opposition. Under paragraph 16(1)(a), the material date is the
day the appellant first used the proposed mark. The difference in material
dates can have a significant impact since the Board could consider all the
evidence of the appellant, for example, with respect to the extent to which the
marks have become known since 2001 under paragraph 12(1)(d), whereas it could
not do so when examining the likelihood of confusion under paragraph 16(1)(a). Furthermore,
the evidentiary burden on the respondent (the opponent before the Board) was
slightly different: see paragraph 47 of the Board’s reasons (Reasons) in
respect of paragraph 16(1)(a) of the Act and paragraphs 88 and 89 of the
Reasons with respect to the analysis under paragraph 12(1)(d) of the Act. Since
the Board found that the respondent had met its initial burden, the burden of
establishing that there was no likelihood of confusion lay on the appellant.
[6]
In its decision, the Board first dealt with the
potential confusion between the appellant’s proposed Design Mark (reproduced
below) with the marks used by the respondent since 1981, pursuant to paragraph
16(1)(a) of the Act.
[7]
Apart from the word mark “La Pizzaiolle”, the
Board identified the following designs used by the respondent at paragraph 51
of its Reasons:
[8]
It noted that although “La Pizzaiolle” and its
variant “Pizzaiolle” are coined words, they are highly suggestive of a pizzeria
as are the marks of the appellant. This is especially so with respect to the Design
Mark given the addition of the descriptive phrase “Gourmet Pizza” (Reasons, at
paras. 60-62). In that respect, it appears that “Gourmet Pizza” is the only
ware for which the application was ultimately accepted (Reasons, at para. 110).
[9]
The Board also accepted that the word “pizza”
has been commonly adopted in the pizzerias and related restaurant services
trade given the large number of entries in the Registry (Reasons, at paras.
75-79).
[10]
Thus, the Board found that each mark at issue had
a low degree of inherent distinctiveness and that despite the fact that the
respondent’s marks had acquired some distinctiveness, they remained relatively
weak marks, given their highly suggestive connotation (paragraph 6(5)(a) of the
Act). The Board also found that the length of use favoured the
respondent (paragraph 6(5)(1)(b) of the Act), while the nature of the
wares and services, and the trade overlapped and were generally the same
(paragraphs 6(5)(1)(c) and (d)of the Act).
[11]
With respect to the degree of resemblance, the
Board found that when considered in their totality, the sound and look of the
marks were somewhat different. “Iolo” being three syllables when sounded,
whereas “iolle” could be sounded in two syllables. Moreover, when considering
the “La” in “La Pizzaiolle”, that mark sounded more feminine, whereas
“Pizzaiolo” evokes a masculine noun (Reasons, at paras. 70-71)
[12]
That said, I note that the Board found that the use
of “Pizzaiolle” without the “La” is still use of the registered trade-mark (Reasons,
at para. 72). It is thus unclear what weight, if any, could be attributed to
the last distinction referred to above — feminine versus masculine.
[13]
However, the Board found that in reality the
respondent had not used the word “Pizzaiolle” in isolation, but rather always in
the special graphic form described at paragraph 51 of its Reasons, which added
to the distinction with the Design Mark (paragraph 6(5)(e) of the Act).
[14]
None of the other circumstances raised by the
parties and discussed by the Board are of significance here, so there is no
need to discuss them. The Board concluded at paragraph 84 of its decision that
because the registration of the Word Mark would enable the appellant to use it
in a manner that could be confusing with the marks used by the respondent,
there is a likelihood of confusion between the parties’ marks. This latter part
is a straightforward and literal application of the teaching in Masterpiece
Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387 [Masterpiece],
which also dealt with confusion between an applied for mark and a mark previously
used by the other party.
[15]
The key finding in respect of the Design Mark under
paragraph 16(1)(a) of the Act is found at paragraph 85 of the Reasons.
It reads as follows:
[85] However, I find that the Applicant has satisfied its legal onus
with respect to the PIZZAIOLO & Design mark owing to the more pronounced
differences existing between this design mark and the Opponent’s LA
PIZZAIOLLE word mark or its variant PIZZAIOLLE as depicted in the PIZZAIOLLE
Design Nos. 1, 2 and 3. (my emphasis)
[16]
Obviously, the registration of the Design Mark
would provide some flexibility as to how the appellant could use it; however,
the registration of a specific design limits the graphic variant that would
constitute use by the appellant of its registered mark pursuant to section 4 of
the Act. The deviations from the registered design must not change the
distinctiveness of the mark; it must retain its dominant features (Promafil
Canada Ltée v. Munsingwear Inc.,142 N.R. 230 at paragraph 38, [1992] F.C.J.
No. 611).
[17]
I can detect no error that would justify our
Court’s intervention in respect of this analysis. The Board had to compare the
proposed Design Mark with the marks actually used by the respondent. Although I
do agree with the respondent that the microscopic analysis of the distinction
between the words “Pizzaiolle” and “Pizzaiolo” is somewhat questionable (Reasons,
at paras. 70-71), in my view, it had no real impact on the Board’s conclusion found
at paragraph 85.
[18]
I am satisfied that having regard to all the
relevant circumstances, especially the comparison (see below) between the
Design Mark and the three designs used by the respondent (paragraph 6(5)(e) of
the Act), the decision of the Board was within the range of acceptable
and defensible outcomes. However, given my conclusion on registerability
pursuant to section 12, the Board’s conclusion on this ground does not assist
the appellant.
[19]
I now turn to the Board’s analysis of the
opposition based on paragraph 12(1)(d) of the Act. It is particularly
brief. Indeed, the first three paragraphs (Reasons, at paras. 91-93) deal with
the likelihood of confusion between the respondent’s registered mark and the
appellant’s Word Mark. The Board disposes of this ground of opposition in
respect of the Design Mark in a single paragraph (Reasons, at para. 94).
[20]
It is this part of the analysis that the Federal
Court found lacking when it held that the Board had failed to consider the full
scope of the protection afforded by the registration of the respondent’s mark.
As will be explained, I agree with the Federal Court’s conclusion in this
respect.
[21]
As mentioned at paragraph 5 above, at this stage
of the analysis, the Board was entitled to consider all the evidence of the
appellant, particularly with respect to the acquired distinctiveness of its
proposed marks. It found that the appellant’s sales and marketing expenses
since 2001 were such that consideration of the inherent and acquired
distinctiveness now favoured the appellant (para. 6(5)(a) of the Act),
and that the length of use did not favour anyone given that “neither party is a recent startup” (para. 6(5)(b) of
the Act).
[22]
That said, the Board still concluded that the
appellant had failed to meet its burden of establishing that there was no
likelihood of confusion with respect to its Word Mark as the circumstances set
out in subsection 6(5) of the Act were evenly balanced.
[23]
Turning to the Design Mark, the Board simply
stated that it remained of the view that the appellant met its burden “owing to the more pronounced differences existing between this
design mark and the [respondent]’s trade-mark LA PIZZAIOLLE” (Reasons,
at para. 94). This is essentially the same reason given for dismissing the
opposition based on paragraph 16(1)(a) of the Act (see paragraph 15 above).
[24]
Obviously, this means that the Board
relied on its previous analysis of these differences. There is no indication
whatsoever that the Board considered that the analysis was no longer restricted
to the registered mark as it has been used since its registration in 1981 (designs
1, 2, and 3). Indeed, the registration of the respondent’s mark “LA PIZZAIOLLE”
entitles it to use lettering and colours identical to the ones used by the
appellant. Had the Board turned its mind to this fact, there is little doubt in
my mind, that it would not have concluded as it did, based on “more pronounced differences”.
[25]
Even if in Masterpiece, the Supreme Court
of Canada was not dealing with the application of paragraph 12(1)(d) of the
Act, its teaching that one should consider the
full scope of rights afforded by the registration of a mark, applies equally
here not only in respect of the proposed Design Mark, but also in assessing how
the respondent who actually opposed the application could use its registered
mark.
[26]
As mentioned earlier, the Board acknowledged at
paragraph 72 that the scope of protection of the registered mark included the use
of the word “Pizzaiolle” alone. The Board also expressly stated that it was
satisfied that the respondent’s use of the three designs reproduced in the Reasons
(see paragraph 7 above) qualify as use of its registered mark. With this in
mind, it is most likely that using the word “Pizzaiolle” in an oval or simply
on an oval sign would also qualify as use of the registered mark. There is
nothing inherently distinctive with this feature. The word “Pizzaiolo” remains
the dominant feature of the Design Mark. (see Appeal Book, Volume II, at page
689, the Design Mark on the side of the picture)
[27]
As a matter of fact, as shown on a picture
reproduced in part below, the respondent has already been using its registered
mark on an oval sign.
(Appeal
Book, Volume 2, page 591)
[28]
This means that once one considers the two marks
in the same context, as is mandated by Masterpiece, (i.e. the words
“Pizzaiolle” and “Pizzaiolo” in square lettering in a lighter shade on a dark
oval), there are no more differences than when comparing the two word marks in
respect of which the Board concluded to the likelihood of confusion.
[29]
Can the addition of the words “Gourmet Pizza” in
the Design Mark (see paragraph 18 above) be sufficient to support the Board’s
conclusion that there was no likelihood of confusion because of “more pronounced differences”?
[30]
The words “Gourmet Pizza” are clearly
descriptive. As noted earlier, it is the only ware for which the Board was
prepared to grant the appellant’s application for the Design Mark. Given that
both parties use their marks in association with restaurant services, more
particularly pizzerias, it is almost impossible to conclude that it is likely
that a consumer with an imperfect recollection would be able to distinguish between
the two sources of the wares or services because of those words.
[31]
This is even more so when one considers that the
appellant cannot be given the exclusive right to use descriptive words such as
“Gourmet Pizza”. Indeed, paragraph 12(1)(b) of the Act clearly precludes
the registration of words that are clearly descriptive of the character and
quality of the wares or services in association with which it is used or
proposed to be used. Nothing prevents the respondent from using these words to
describe its own wares and services. However weak the registered mark, it would
not lose its distinctiveness if those descriptive words were used.
[32]
Thus, like the Federal Court, I can only
conclude that, but for the error of law made by the Board (failure to consider
the full scope of the rights conferred by the registration of the respondent’s
mark), the Board could only reach the same conclusion with respect to the
Design Mark that it reached in respect of the Word Mark. Its decision to
dismiss the opposition in respect of the Design Mark is not within the range of
acceptable and defensible outcomes. This means that the Federal Court properly
applied the standard of review.
[33]
Before concluding, I note that I agree with the
appellant that one should be careful not to give the principle set out at
paragraph 55 of Masterpiece too great a scope, for there would no longer
be any need to register a design mark when one has a word mark. It is clear that
my conclusion here is entirely based on the facts of this case and the Board’s
findings as to what would constitute proper use of the registered mark (Reasons,
at para. 72). When comparing the marks, one is always limited to a “use that is within the scope of the registration” (Masterpiece,
at para. 59). The existing case law provides ample guidance as to what graphic or
other deviations from the mark as registered are acceptable.
[34]
In light of the foregoing, I propose to dismiss
the appeal with costs.
"Johanne Gauthier"
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“I agree
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J. D. Denis Pelletier J.A.”
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“I agree
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A. F. Scott
J.A.”
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