Date: 20061221
Docket: T-693-06
Citation: 2006 FC 1542
Ottawa, Ontario, December 21, 2006
PRESENT: The Honourable Barry Strayer
BETWEEN:
SMART
& BIGGAR
Applicant(s)
and
THE
ATTORNEY GENERAL OF CANADA
Respondent(s)
and
SCOTT PAPER
LIMITED
Respondent(s)
APPLICATION UNDER Rule 300(d) of the
Federal Courts Rules, 1998 and Section 56 of the
Trade-marks Act, R.S.C. 1985, c. T-13, as
amended
REASONS FOR JUDGMENT AND JUDGMENT
Introduction
[1]
This
is an appeal under subsection 56(5) of the Trade-marks Act, R.S.C.,
1985, c. T-13, (Act), from a decision of November 24, 2005 taken on behalf of
the Registrar of Trade-Marks (Registrar), under section 45 of the Act, maintaining
the registration of the Respondent, Scott Paper Limited (Scott), in its
trade-mark VANITY.
Facts
[2]
Scott
acquired this trade-mark by assignment in 1985. At the request of Smart &
Biggar the Registrar forwarded a section 45 notice to Scott on April 29, 2002
requiring it to show use of the trade-mark in the preceding three years.
[3]
Scott
filed as its only evidence the affidavit of Alejandro Teijeira. This affidavit
provided no explanation as to why the trade-mark had not been in use. Its only
explanation of the “special circumstances” explaining why the registration
should not be cancelled was to the effect that in October, 2001, some 6 months
before the section 45 notice was sent to it, it started developing plans for
the manufacture and sale of paper products in association with the VANITY
trade-mark. The deponent provided an exhibit to his affidavit consisting of a
copy of Scott’s “2002 Marketing Plan” which included a stated plan to “re-launch
‘VANITY’ brand in the second quarter of 2002”. This required preparation for
the manufacture of the intended products. According to him the first sales of
this product occurred in June, 2002. He finished by asserting that Scott did
not intend to abandon the trade-mark prior to or subsequent to the date of the
section 45 notice.
[4]
In
his decision, the Senior Hearing Officer acting on behalf of the Registrar
(SHO) reviewed the affidavit. He first observed that, while the trade-mark
registration covered both “paper and paper products”, there was no reference in
the affidavit to its use with “paper”. He therefore determined that such words
should be deleted from the registered statement of wares. With respect to
“paper products”, he noted that subsection 45(1) of the Act requires that in
response to a notice the registrant must show the date when the mark was last
in use and the reason for the absence of such use. Scott’s affidavit evidence
provided neither. He nevertheless held that he could apply subsection 45(3)
which provides as follows:
|
45.
(3) Where, by reason of the evidence furnished to the Registrar or the
failure to furnish any evidence, it appears to the Registrar that a
trade-mark, either with respect to all of the wares or services specified in
the registration or with respect to any of those wares or services, was not
used in Canada at any time during the three year period immediately preceding
the date of the notice and that the absence of use has not been due to
special circumstances that excuse the absence of use, the registration of
the trade-mark is liable to be expunged or amended accordingly.
[Emphasis
added]
|
45.
(3) Lorsqu’il apparaît au registraire, en raison de la preuve qui lui est
fournie ou du défaut de fournir une telle preuve, que la marque de commerce,
soit à l’égard de la totalité des marchandises ou services spécifiés dans
l’enregistrement, soit à l’égard de l’une de ces marchandises ou de l’un de
ces services, n’a été employée au Canada à aucun moment au cours des trois
ans précédant la date de l’avis et que le défaut d’emploi n’a pas été
attribuable à des circonstances spéciales qui le justifient,
l’enregistrement de cette marque de commerce est susceptible de radiation ou
de modification en conséquence.
[nos
italiques]
|
[5]
The
SHO, in the absence of evidence of last use, considered the date of
registration in the name of Scott as the date of last use since Scott had produced
no evidence that it had ever used this mark. As the mark had been assigned to
it in 1989, the SHO concluded that there had been no use of the mark in 13
years. Further, in the absence of any evidence of reasons for the absence for
such use, he drew the inference that “the absence of use has been due to a
deliberate and voluntary decision of the registered owner”.
[6]
The
SHO accepted the registrant’s position that there are three criteria to be
considered in deciding whether special circumstances exist that “excuse the
absence of use” of a trade-mark during a 3-year period. They are:
1.
the
length of time of non-use;
2.
whether
the reasons for not using the mark were due to circumstances beyond the
registrant’s control; and
3.
whether
there was a serious intention to resume use soon.
These criteria were based on Registrar
of Trade-marks v. Harris Knitting Mills Ltd. (1985), 4 C.P.R. (3d) 488
(F.C.A.) which had been subsequently followed by the Federal Court Trial
Division in cases such as Ridout and Maybee v. Sealy Canada Ltd. (1999),
87 C.P.R. (3d) 307. While he had found that the trade-mark had not been used
by Scott for the 13 years preceding the section 45 notice, and that the non-use
was due to a deliberate and voluntary decision by Scott, he nevertheless concluded
that because Scott had commenced some 6 months prior to the notice to make
serious plans to launch a new product with the trade-mark VANITY, a plan which
was implemented by the sale of such product some 2 months after issue of the
notice, this clearly showed that “the registrant’s trade-mark is not dead”.
Consequently, he found that the “registrant has provided evidence that
qualifies as special circumstances excusing the non-use of the trade-mark with
paper products” (see SHO decision, Applicant’s Record, Tab A, para. 28). In
doing so, he relied on two decisions of this Court, Ridout and Maybee v.
Sealy Canada Ltd., above, and Oyen Wiggs Green & Mutala v. Pauma
Pacific Inc. (1997), 84 C.P.R. (3d) 287 (F.C.A.).
[7]
The
Applicant appeals this decision on the basis that the SHO had no evidence
before him of “special circumstances” which could “excuse” the absence of use
as required by subsection 45(3) of the Act, as quoted above.
Analysis
Standard of
Review
[8]
I
accept the analysis of a majority of the Federal Court of Appeal in Molson
Breweries, a Partnership v. John Labatt Ltd. (1999), 5 C.P.R. (4th)
180 at para. 29 where it was held that in Appeals under section 56 of the Act
where no new evidence is produced the Registrar’s decision should be reviewed
on the standard of reasonableness simpliciter. Such is the case here. While
this is an appeal without any privative clause, deference must be shown to the
Registrar who by the scheme of the Act must be deemed to have a certain
expertise in such matters.
Established
Criteria for Application of Subsection 45(3) of the Act
[9]
The
leading authority on this subject, to which most subsequent decisions including
that of the SHO pay lip service, is Registrar of Trade-marks v. Harris
Knitting Mills Ltd., above. This was an appeal from a decision of a Trial
Division Judge reversing the decision of the Registrar and restoring a
registration which had been set aside under the equivalent of section 45 of the
Act. The Court at para. 8 stressed the necessity for “special circumstances”
being shown by a registrant and clarified that such circumstances must be those
“not found in most cases of absence of use of a mark”. It was emphasized that
there must be circumstances which by their nature “excuse” the non-use. The
Court went on to say at para. 9:
It is impossible to state precisely what
the circumstances referred to in subsection 44(3) must be to excuse the absence
of use of a mark. The duration of the absence of use and the likelihood it will
last a long time are important factors in this regard, however; circumstances
may excuse an absence of use for a brief period of time without excusing a
prolonged absence of use. It is essential, as well, to know to what extent the
absence of use is due solely to a deliberate decision on the part of the owner
of the mark rather than to obstacles beyond his control. It is difficult to
see why an absence of use due solely to a deliberate decision by the owner of
the mark would be excused.
[Emphasis added]
In that case there was evidence that the
clothing associated with the trade-mark in question had gone out of fashion and
the registrant had therefore ceased to use the trade-mark. It had, however,
because of changes in the fashion cycle, resumed use of the trade-mark some 18
months after notice was given under the equivalent of section 45. The Federal
Court of Appeal seemingly gave no significance to this commercial explanation
for non-use of the trade-mark or the fact that the registrant had resumed use
of it when those circumstances changed. It therefore allowed the appeal and
restored the expungement order of the Registrar.
[10]
While
in the present case the SHO specifically cited the Registrar of Trade-marks
v. Harris Knitting Mills Ltd., above, he does not seem to have given
any significance to the statement therein that:
It is difficult to see why an absence of
use due solely to a deliberate decision by the owner of the mark would be
excused.
The SHO specifically found that in this
case the absence of use had “been due to a deliberate and voluntary decision of
the registered owner” (see SHO decision, Applicant’s Record, Tab A, para. 20).
[11]
I
find it difficult to understand, as a matter of law, how a bona fide intention
to use a trade-mark, even though formed prior to service of a notice under
section 45, can “excuse the absence of use” for 3 years, considering that those
3 years were preceded by another 10 years in which it was not used. Would one
“excuse” a truant schoolboy for an absence of a month because, when confronted,
he demonstrated that although he had no explanation for his past absences he
genuinely intended to go to school the next week?
[12]
The
SHO relied, as does the Respondent Scott here, on two decisions subsequent to Registrar
of Trade-marks v. Harris Knitting Mills Ltd., above, namely the Oyen
Wiggs Green & Mutala case, and the Ridout and Maybee case, both
cited above. I think they are distinguishable. In the Oyen Wiggs Green
& Mutala case the absence of use was shown to be less than 3 years, at
a time when the time requirement under section 45 was 2 years, and the
Registrar maintained the registration. The Trial Division Judge on appeal
declined to interfere with the decision of the Registrar as did the Federal
Court of Appeal. In a brief set of reasons delivered from the bench, the
latter Court cited the Registrar of Trade-marks v. Harris Knitting Mills
Ltd. case without reference to Justice Pratte’s statement therein quoted
above that:
It is difficult to see why an absence of
use due solely to a deliberate decision by the owner of the mark would be
excused.
However there was no finding in that case
that failure to use was a deliberate decision of the registrant and the Federal
Court of Appeal was not prepared to dispute the position of the Registrar, as
confirmed by the Federal Court Trial Division, that the proof of steps to
resume use taken prior to delivery of the notice under section 45 was
sufficient to prove an intent to use.
[13]
In
the Ridout and Maybee case, above, in the Trial Division, the learned
Trial Judge found that the period of non-use was scarcely more than 3 years.
While he found that the registrant had not proved that the non-use was due to
special circumstances beyond its control, there was clear evidence that during
the relevant period it planned to recommence use of the mark and had done so
after the notice was served. These facts are far different from those in the
present case where there had been non-use for 13 years; in fact there was no
evidence of use by this registrant at any time prior to the delivery of notice
under section 45. With respect, I am also inclined to give far more weight to
the fact that the SHO found that the non-use was not due to circumstances
beyond the control of the registrant. I believe that the application of this
factor to deny an excuse would be consistent in law with the position of the
Federal Court of Appeal in the Registrar of Trade-marks v. Harris Knitting
Mills Ltd. case, above.
[14]
There
are many references in decisions by the Registrar and the Court that the
purpose of section 45 is to remove “deadwood” from the register. The
implication appears to be that if the registrant has any bone fide intention to
use the trade-mark it should not be expunged in section 45 proceedings. With
respect, I believe it is important to keep in mind that the entitlement to
obtain a trade-mark and to keep it is by law predicated on use of the
trade-mark. As former Chief Justice Thurlow said in Aerosol Fillers Inc. v.
Plough (Canada) Ltd. (1980), 53 C.P.R. (2d) 62 (F.C.A.) at 66:
…There is no room for a dog in the manger
attitude on the part of registered owners who may wish to hold on to a
registration notwithstanding that the trade mark is no longer in use at all or
not in use with respect to some of the wares in respect of which the mark is
registered.
[15]
I
have therefore concluded that the SHO erred in applying the law to the facts in
finding that a 3-year period of non-use (preceded by a further 10 years of
non-use) due to a deliberate decision of the registrant could be “excused” for
the purposes of subsection 45(3) by reason of the registrant’s intention to use
it in the near future. I believe this is not reasonable: it does not stand up
to careful scrutiny.
Disposition
[16]
For
these reasons, I will set aside the decision of the Registrar and order that
the trade-mark be expunged. I will award costs to the Applicant.
JUDGMENT
THIS COURT ADJUDGES that the
decision of the Registrar be set aside, the registration of Scott Paper Limited
TMDA 52,444 for the trade-mark VANITY be expunged, and costs be awarded to the
Applicant.
“ B.
L. Strayer ”
Email this Content