Docket: T-1175-17
Citation:
2018 FC 79
Ottawa, Ontario, January 25, 2018
PRESENT: The
Honourable Mr. Justice Pentney
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BETWEEN:
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1400446 ALBERTA
LTD.
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Applicant
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And
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FOGLER,
RUBINOFF LLP
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Respondent
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JUDGMENT AND REASONS
[1]
This is an appeal pursuant to s. 56 of the Trade-marks
Act, RSC 1985, c T-13 [the Act], from the decision of the Registrar
of Trade-marks (“the Registrar”) to expunge the
Applicant’s Canadian Trademark Registration No. TMA584,708 (“the 708 Registration”) for the “M” Design. The decision was made pursuant to a
request by Fogler, Rubinoff LLP for the issuance of a s. 45 notice under the Act.
[2]
Following a consideration of the evidence
submitted, the Registrar found that the Applicant had demonstrated use of most
of the goods and all of the services included in the 708 Registration during
the three-year period prior to the issuance of the s. 45 notice. However, the Registrar
also found that the evidence did not demonstrate that such use was by the
Applicant or done pursuant to a licence agreement under which the Applicant
controls the character or quality of the goods and services offered in
association with the “M” Design, and therefore
it ruled that the 708 Registration should be expunged from the Register.
[3]
The Applicant appealed this decision pursuant to
s. 56(1) of the Act, and filed new evidence pursuant to s. 56(5). The Respondent
was provided with notice of the proceeding, but did not participate.
I.
Background
[4]
The Applicant is the owner of the 708
Registration for the “M” Design, set out below:
[5]
The “M” Design was
registered in association with the following goods and services:
GOODS/PRODUITS:
(1) Jewelry.
(2) Costume jewelry.
(3) Precious metal and non-precious and semi-precious gemstones.
(4) Jewelry with and without precious and semi-precious gemstones.
(5) Precious gemstones.
(6) Semi-precious gemstones.
(7) Jewelry, namely rings, hair ornaments, earrings, bracelets,
bangles, bands, necklaces, pendants, pins, brooches and body jewelry.
(8) Jewelry, namely sterling silver jewelry.
(9) Items of jewelry incorporating precious or semi-precious stones.
(10) Watches.
(11) Beads.
(12) Pearls.
SERVICES:
(1) Retail design, manufacture, sale, distribution and repair of
jewelry, gemstones and related items.
(2) Custom manufacture of jewelry to customer specifications.
(3) Custom jewelry design.
(4) Jewelry repair, sizing and restoration.
(5) Repair of watches and watch accessories.
[6]
At the request of the Respondent, the Registrar issued
a notice pursuant to s. 45(1) of the Act on February 11, 2015, requiring
the Applicant to provide proof of use of each of the goods and services listed
in the registration over the three previous years.
[7]
In response to the notice, the Applicant filed
an affidavit of its Chief Executive Officer, Peter J. Konidas, which stated
that the trade-mark has been in use continuously “by
the Owner or its licensee Metalsmiths Master Architects of Jewelry Inc. since
at least the three year period up to and including February 11, 2015… in the
normal course of trade by the Owner or its licensee.” The Affidavit also
provided photographs of various samples of jewelry bearing the “M” Design, as well as photographs of a storefront and
sample note paper and other stationery showing the same mark. The affidavit
included receipts for custom jewelry design and watch repair work done by
Metalsmiths Master Architects of Jewelry Inc. (Metalsmiths), as well as a “compilation and summary of the actual retail sales made by
the Owner or its licensee in Canada of each of the specimen goods… which sales
were made in the ordinary course of business for the period of February 10,
2012 up to and including February 10, 2015.”
[8]
The Registrar found that the affidavit
established evidence of use of the “M” Design for
most of the goods and all of the services listed in the registration. The
evidence was found to be lacking in respect of some of the goods listed in (7),
namely hair ornaments, pins and brooches. In relation to the precious gems
listed in (3), (5), (6) and (12) in the registration, the Registrar found that
there was no evidence that these registered goods were sold in any manner other
than in finished jewelry pieces, and thus they are more accurately described as
goods (8): “items of jewelry incorporating precious or
semi-precious gemstones”.
[9]
However, the key finding of the Registrar was
that the affidavit did not establish whether the use of the “M” Design “enures to the
owner”, in light of the wording of the affidavit and the evidence
submitted. There was no evidence that the Applicant itself had used the mark,
and the affiant made repeated references to “the Owner
or its licensee.” The licence agreement was not included with the
affidavit, and there was no evidence provided as to the relationship between
the Applicant and Metalsmiths to satisfy the requirements of s. 50 of the Act.
On this basis the Registrar ordered the expungement of the registration.
II.
Issues
[10]
The issues in this appeal are:
- What is the
standard of review in light of the new evidence filed pursuant to s. 56(5)
of the Act?
- Has “use” by the Applicant or its licensee been
established, as required by the Act?
III.
Standard of Review
[11]
The standard of review in an appeal under s. 56 of
the Act depends on whether new evidence has been filed that would have
affected the Registrar’s findings of fact or exercise of discretion. Where new
evidence is filed which meets this threshold, the court must consider de
novo the issue to which that additional evidence relates: Spirits
International BV v BCF SENCRL, 2012 FCA 131 at para 10 [Spirits International].
While such new evidence can “undermine the factual
substratum of the Board’s decision and thus rob the decision of the value of
the Board’s expertise”, this does not “eliminate
the Board’s expertise as a relevant consideration”: Mattel, Inc v
3894207 Canada Inc, 2006 SCC 22 at para 37; see also Molson Breweries v
John Labatt Ltd, [2000] 3 FC 145, 2000 CanLII 17105 (FCA) at paras 46-51.
[12]
In order to determine whether the new evidence
would have materially affected the Registrar’s decision, the Court must assess
the quality of the evidence, considering its nature, significance, probative
value, and reliability, in order to determine whether the evidence adds
something of significance (Illico Communication Inc v Norton Rose SENCRL,
2015 FC 165 at para 26 [Illico Communication]; Mcdowell v The Body
Shop International PLC, 2017 FC 581 at para 11).
[13]
This requires an assessment of whether the
evidence filed on the appeal is new, in the sense that it adds relevant
additional information beyond that which was before the Registrar, and whether
the new evidence is substantive or probative in the sense that it addresses an
issue relevant to meeting the requirements of s. 45 of the Act and is
reliable according the usual legal tests; finally, it requires an assessment of
whether this new evidence would have likely materially affected the Registrar’s
findings of fact or exercise of discretion: Spirits International; Gemological
Institute of America v Gemology Headquarters International, 2014 FC 1153 at
para 25; Illico Communication at para 24.
[14]
My task on the final part of this, whether the
new evidence would have materially affected the findings of fact or exercise of
discretion by the Registrar, is made easier by the decision in the instant
case, which states:
[18] I note that if Mr. Konidas had attested
in his affidavit that, during the relevant period, the Owner controlled the
character or quality of the Goods and Services, I would have maintained the
registration for goods (1), (2), (4), (8)-(11) and for goods (7) jewelry,
namely rings, earrings, bracelets, bangles, bands, necklaces, pendants, and
body jewelry and the Services.
[15]
On this appeal, the Applicant filed a new
affidavit, from Elias J. Konidas, who is the Secretary of Metalsmiths, which
provides information regarding the corporate relationship between the Applicant
and the licensee, and included a copy of the Licence Agreement. I find that
this is new relevant and reliable evidence, which would have obviously affected
the decision of the Registrar, as indicated by paragraph 18 of its decision,
cited above.
[16]
In light of this conclusion, I will conduct a de
novo review of the issue of use by the Applicant or its licensee, and on
whether the relationship between the Applicant and licensee meets the
requirements set out in s. 50(1) of the Act, in relation to the goods
and services for which the Registrar has found evidence of use.
IV.
Has “use” been
established in accordance with s. 45(1)?
[17]
Subsection 45(1) of the Act states:
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Registrar may request evidence of user
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Le registraire peut exiger une preuve d’emploi
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45 (1) The Registrar may at any time
and, at the written request made after three years from the date of the
registration of a trade-mark by any person who pays the prescribed fee shall,
unless the Registrar sees good reason to the contrary, give notice to the
registered owner of the trade-mark requiring the registered owner to furnish
within three months an affidavit or a 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.
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45 (1)
Le registraire peut, et doit sur demande écrite présentée après trois années
à compter de la date de l’enregistrement d’une marque de commerce, par une
personne qui verse les droits prescrits, à moins qu’il ne voie une raison
valable à l’effet contraire, donner au propriétaire inscrit un avis lui
enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration
solennelle indiquant, à l’égard de chacun des produits ou de chacun des
services que spécifie l’enregistrement, si la marque de commerce a été
employée au Canada à un moment quelconque au cours des trois ans précédant la
date de l’avis et, dans la négative, la date où elle a été ainsi employée en
dernier lieu et la raison de son défaut d’emploi depuis cette date.
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[18]
“Use” in relation to a trade-mark is defined by s. 2 of the Act to
mean “use” under s. 4(1):
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When deemed to be used
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Quand une marque de commerce est réputée employée
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4 (1) A trade-mark is deemed to be
used in association with goods if, at the time of the transfer of the
property in or possession of the goods, in the normal course of trade, it 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.
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4 (1)
Une marque de commerce est réputée employée en liaison avec des produits si,
lors du transfert de la propriété ou de la possession de ces produits, dans
la pratique normale du commerce, elle est apposée sur les produits mêmes ou
sur les emballages dans lesquels ces produits sont distribués, ou si elle
est, de toute autre manière, liée aux produits à tel point qu’avis de liaison
est alors donné à la personne à qui la propriété ou possession est
transférée.
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[19]
The Registrar found that the evidence
established use of most of the goods and all of the services during the
relevant three year period, and thus satisfied the requirements of s. 45 of the
Act. Having reviewed the affidavit and exhibits, and the reasons
provided by the Registrar, I find no basis to interfere with this aspect of the
decision. The only missing piece for the Registrar was evidence that the
Applicant had itself used the “M” Design, or
that it demonstrated that its relationship with its licensee met the
requirements of s. 50(1) of the Act:
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Licence to use trade-mark
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Licence d’emploi d’une marque de commerce
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50 (1) For the purposes of this Act,
if an entity is licensed by or with the authority of the owner of a
trade-mark to use the trade-mark in a country and the owner has, under the
licence, direct or indirect control of the character or quality of the goods
or services, then the use, advertisement or display of the trade-mark in that
country as or in a trade-mark, trade-name or otherwise by that entity has,
and is deemed always to have had, the same effect as such a use,
advertisement or display of the trade-mark in that country by the owner.
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50 (1)
Pour l’application de la présente loi, si une licence d’emploi d’une marque
de commerce est octroyée, pour un pays, à une entité par le propriétaire de
la marque, ou avec son autorisation, et que celui-ci, aux termes de la
licence, contrôle, directement ou indirectement, les caractéristiques ou la
qualité des produits et services, l’emploi, la publicité ou l’exposition de
la marque, dans ce pays, par cette entité comme marque de commerce, nom
commercial –ou partie de ceux-ci – ou autrement ont le même effet et sont
réputés avoir toujours eu le même effet que s’il s’agissait de ceux du propriétaire.
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[20]
The new evidence contained in the affidavit of
Elias J. Konidas states that the Applicant and the licensee were “corporate affiliates, with each of the Owner and the
Licensee having the same ultimate shareholders.” This relationship began
in 2008 and continued throughout the relevant period. The affidavit states that
the specific uses of the “M” Design shown in the
affidavit filed before the Registrar were by the licensee, Metalsmiths, and
that it operates the retail stores referenced in that affidavit. Indeed, an
exhibit to the affidavit of Peter J. Konidas clearly shows a storefront
displaying the “M” Design and the store name “Metalsmiths”. The affidavit also states that the
products shown in the prior affidavit were sold by the licensee during the
relevant three-year period, and these sales were included in the compilation of
sales included with that affidavit.
[21]
Finally, the new affidavit includes the
Trademark Licence Agreement, with certain financial information redacted. This
agreement was effective as of May 9, 2008. It sets out the relationship between
the Applicant and the licensee, and it includes extensive provisions relating
to quality control. This includes the following requirements: (i) that, upon
request by the Applicant, the licensee shall provide random samples of the
materials displaying the “M” Design and details
of the wares and services offered by the licensee; (ii) that it shall permit the
Applicant to inspect the wares and services as well as the locations where the “M” Design is displayed; and (iii) that it shall
correct any deficiencies in the wares and services identified by the Applicant.
[22]
There was no cross-examination on this
affidavit. It provides evidence that the licensee has used the “M” Design, and further that the evidence from the
previous affidavit of various products bearing the “M”
Design, the sales of products bearing the “M”
Design, and services delivered under its banner were sales and services
provided by the licensee during the relevant three-year period. The affidavit
also provides evidence that the Applicant has an agreement which permits it to
exercise control over the “character and quality”
of the goods and services associated with the “M”
Design, as required by s. 50 of the Act. While there is no evidence of
steps taken by the Applicant to inspect the wares or services, or otherwise
exercise the rights granted to it under the license agreement, the affiant
states that “Pursuant to the Licence Agreement, the
Owner maintains control over the nature and quality of the goods and services
that may be provided by the Licensee in association with the Trademark.”
[23]
The procedure under s. 45 of the Act is
meant to be simple, summary in nature and expeditious, and all that is required
is that the trade-mark owner must establish a prima facie case of use in
Canada within the relevant period: Philip Morris Inc v Imperial Tobacco Ltd
(1987), 13 CPR (3d) 289 at p 293, [1987] FCJ No 26 (QL) (FCTD). The burden of
proof in doing so is not onerous: Black & Decker Corporation v Method
Law Professional Corporation, 2016 FC 1109 at para 12; Spirits
International at para 8. In view of this, I am satisfied that, in the
context of a proceeding under s. 45, the evidence contained in the affidavit is
sufficient to meet the requirements of s. 50(1): see The House of Kwong Sang
Hong International Ltd v Gervais, 2004 FC 554 at para 22; Empresa Cubana
Del Tabaco Trading v Shapiro Cohen, 2011 FC 102 at para 84; Rex, Inc
(Re) (2007), 65 CPR (4th) 46 at p 51 (CTMOB).
[24]
Considering the totality of the evidence, I find
that the Applicant has established use of most of the goods and all of the
services under its registration during the three-year period prior to the
issuance of the s. 45 notice, and further that such use was by a licensee under
its direction or control as required by s. 50 of the Act. Therefore the
registration should not be expunged in its entirety. However, I agree with the
Registrar that use has not been established in regard to hair ornaments, pins
and brooches in item (7), as well as goods listed in items (3), (5), (6) and
(12), and I find that these should be expunged from the registration.
V.
Costs
[25]
The Applicant submitted a draft bill of costs,
using the mid-point of the range under Column III of the Federal Courts
Rules, SOR/98-106 [the Rules] and argued that several recent
precedents support its claim for a lump sum costs award in the amount of $2,750:
see Mcdowell v Laverana GmbH & Co KG, 2017 FC 327; Estee Lauder
Cosmetics Ltd v Loveless, 2017 FC 927; Micro Matic A/S v Taizhou TALOS Sanitary
Co Ltd, 2017 FC 978.
[26]
I have a wide discretion as to costs pursuant to
Rule 400 of the Rules. In this case, the new evidence filed by the
Applicant filled in the gaps identified by the Registrar regarding use by the
licensee, but this appeal could easily have been avoided. The requirements of
s. 50 of the Act, to which this evidence relates, are hardly novel or
difficult to understand, and meeting the requirements of the provision did not
require complex or difficult evidence. This evidence could easily have been
placed before the Registrar. This is a relevant consideration regarding whether
costs should be awarded: see Austin Nichols & Co, Inc v Cinnabon Inc,
[1998] 4 FCR 569, 82 CPR (3d) 513, 1998 CanLII 9088 at p 583. On the other
hand, the Respondent that launched this s. 45 review did not participate in
this hearing, and the Applicant was forced to bring the appeal in order to
defend its registration: see Lewis Thomson & Sons Ltd, v Rogers,
Bereskin & Parr (1988), 21 CPR (3d) 483 (FCTD). Having considered the
Applicant’s submissions and the jurisprudence, I am awarding costs to the
Applicant in the lump sum of $1,500, inclusive of disbursements, payable by the
Respondent.
VI.
Conclusion
[27]
The application is granted. The Registrar is
directed to restore the Applicant’s 708 Registration for the “M” Design, but only in respect of the goods and
services for which use was established. Since there was no evidence of use
within the relevant period of some of the goods, and this aspect of the Registrar’s
decision was not appealed, I direct that the registration shall be amended to
delete hair ornaments, pins and brooches in item (7), as well as goods listed
in items (3), (5), (6) and (12). The Respondent shall pay lump sum costs to the
Applicant in the amount of $1,500.
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