Date: 20060525
Docket: T-284-05
Citation: 2006 FC 634
Ottawa, Ontario, May 25, 2006
PRESENT: The Honourable Madam Justice Mactavish
BETWEEN:
LOBLAWS INC.
Applicant
and
TELECOMBO INC.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] Loblaws Inc. is the registered owner of a family of "PRESIDENT'S CHOICE" trade-marks. When TeleCombo Inc. attempted to register the "RESIDENT'S CHOICE" trade-mark, Loblaws opposed the registration.
[2] The Registrar of Trade-marks, sitting as the Trade-marks Opposition Board, allowed Loblaws' opposition insofar as it related to the use of the RESIDENT'S CHOICE mark in connection with retail grocery services. However, Loblaws' opposition was rejected insofar as it related to other types of services.
[3] Loblaws now appeals that decision, asserting, amongst other things, that the Board erred in refusing to take note of TeleCombo's admission that it had not yet used the RESIDENT'S CHOICE mark at the time it applied for registration. The Board further erred, Loblaws says, in applying an unduly restrictive definition of its main business, and by rejecting Loblaws' opposition in relation to goods and services other than retail grocery services. Loblaws also says that the Board erred in its confusion analysis.
[4] TeleCombo did not appear on this appeal, nor did it file any written submissions with the Court. By letter dated March 3, 2005, TeleCombo indicated that it was relying on "the representation of the Registrar of Trademarks to uphold the decision of the Trade Marks Opposition Board". From my review of the record, I am satisfied that TeleCombo had proper notice of these proceedings, and chose not to appear.
Background
[5] Loblaws' PRESIDENT'S CHOICE mark has been registered and used in Canada since at least 1983 in association with an extensive and continuously expanding array of wares and services. These wares and services have extended from an original base in food products to include, amongst other things, reward incentive programs, as well as banking, credit card, and investment services.
[6] Loblaws also owns the PC trade-mark and design which is used in association with wares and services sold under the PRESIDENT'S CHOICE brand. The PC mark is depicted in the same font type and script as the PRESIDENT'S CHOICE & Design mark. The PC and PRESIDENT'S CHOICE marks are depicted as:
[7] On September 26, 1997 TeleCombo applied to register the RESIDENT'S CHOICE mark and design, which is depicted as:
[8] TeleCombo's application was based upon its alleged use of the mark in Canada as far back as March of 1997, on wares, and in connection with services. The wares and services in question were described as:
Wares: posters, stickers, magazines, newspapers, brochures, periodicals, cardboard, books and pens.
Services: market research and billing services, the offering of vouchers, membership cards; providing rebates at participating establishments through the use of a membership card covering the services of a retail department store; restaurant services; retail grocery stores; hotel and travel agencies namely hotel and travel rebates at participating establishments; motor vehicle rental services; retail gasoline services; retail pharmacies; retail video rentals and movie theatre tickets; reselling of licensed local and long distance telephony; reselling of cellular and Personal Communications services; reselling of home and car insurance; reselling of licensed television broadcast services.
[9] Loblaws Inc. opposed TeleCombo's application, asserting that:
1. The application did not comply with Section 30(b) of the Trade-marks Act as the RESIDENT'S CHOICE mark has not been in use since March of 1997, as had been claimed by TeleCombo;
2. The RESIDENT'S CHOICE mark was not registrable, pursuant to section 12(1)(d) of the Act, because it was confusing individually and collectively with Loblaws' family of PRESIDENT'S CHOICE marks covering clothing, fertilizer, laboratory supplies, and a plethora of food and household products;
3. TeleCombo was not entitled to register the RESIDENT'S CHOICE mark because at the claimed date of first use, namely March of 1997, the mark RESIDENT'S CHOICE was confusing with Loblaws' PRESIDENT'S CHOICE mark, previously used in association with retail grocery services, retail department store services, retail pharmacy services, retail financial services, and the offering of rebates and discounts at retail establishments;
4. The RESIDENT'S CHOICE mark was not distinctive of TeleCombo's wares and services, in light of Loblaws' prior use of its PRESIDENT'S CHOICE mark, and its advertising of its wares and services under the PRESIDENT'S CHOICE mark.
[10] Loblaws adduced substantial affidavit evidence before the Trade-marks Opposition Board in support of its opposition. TeleCombo filed one affidavit, which was subsequently withdrawn when the affiant did not appear for cross-examination. As a consequence, there was no evidence before the Board from TeleCombo.
The Board's Decision
[11] The Board noted that the script employed to form the words "Resident's" and "Choice" in TeleCombo's mark did very little, if anything, to increase the inherent distinctiveness of the mark which clearly reads "RESIDENT'S CHOICE". Accordingly, the Board referred to TeleCombo's mark simply as RESIDENT'S CHOICE, and disregarded the design feature.
[12] The Board rejected Loblaws' contention that TeleCombo had failed to satisfy the requirements of subsection 30(b) of the Trade-marks Act, in that the RESIDENT'S CHOICE mark had not been in use since March of 1997, as had been claimed by TeleCombo.
[13] Loblaws' argument was based upon a June 30, 1998 letter from TeleCombo to the Registrar of Trade-marks, which suggested that TeleCombo would only be launching its product line in 1998.
[14] Had this letter been admissible, the Board accepted that it would have satisfied the evidentiary burden on Loblaws to demonstrate that TeleCombo had not used the mark in question at the material time, at least insofar as some of the wares and services specified in TeleCombo's application were concerned. However, the Board found that the letter had not been properly introduced as evidence by Loblaws. The Board also declined to take notice of the letter as part of the contents of the Board's own file.
[15] As a consequence, the Board rejected Loblaws' opposition based on lack of use.
[16] The Board then dealt with the remaining grounds of opposition together, noting that the determinative issue was whether the RESIDENT'S CHOICE mark was confusing with Loblaws' PRESIDENT'S CHOICE marks.
[17] The Board noted that there are three material dates to assess the issue of confusion: the date of the decision, with respect to allegation of non-registrability; the date of first use of the applied for mark, with respect to the allegation of non-entitlement; and the date of opposition, with regards to the allegations of non-distinctiveness. However, the Board also observed that in this case, nothing turned on the date used to assess the question of confusion.
[18] The Board found that while Loblaws' PRESIDENT'S CHOICE mark did not possess a high degree of inherent distinctiveness, it was well-known in Canada, when used in association with food and household items, and the operation of retail grocery stores offering those items, as well as in association with "ancillary services", such as the retailing of clothing, flowers, lawn and garden products, and pharmaceutical products.
[19] The Board also found that TeleCombo's RESIDENT'S CHOICE mark did not possess a high degree of inherent distinctiveness, and that no evidence had been submitted to show that the RESIDENT'S CHOICE mark enjoyed any reputation at any of the material dates.
[20] The length of time that the marks in issue had been in use was found to favour Loblaws. The Board also found that there was significant overlap in the nature of the parties' wares and services in the area of "retail grocery stores", and a lesser degree of overlap in the areas of "restaurant services" and "retail pharmacies", which were found to be ancillary to Loblaws' main business.
[21] The Board also noted that there was a high degree of visual resemblance between the marks, and that the marks also resemble each other aurally, although the aural resemblance was found to be less significant than the visual resemblance. The marks were also found to resemble each other in the ideas that each suggested.
[22] As a consequence, the Board found that TeleCombo had not met the legal onus on it to show that there was not a reasonable likelihood of confusion between its RESIDENT'S CHOICE mark and Loblaws' PRESIDENT'S CHOICE mark, when used in association with "retail grocery services".
[23] However, the Board went on to find that the remaining wares and services claimed by TeleCombo had little or no connection to Loblaws' main business of providing food and household products, and that the reputation of the PRESIDENT'S CHOICE mark attached to its main business. As a consequence, the Board found the RESIDENT'S CHOICE mark was not confusing with Loblaws' mark when used in association with wares and services other than retail grocery services.
Issues
[24] The issues raised by Loblaws are:
1. What is the appropriate standard of review to be applied to the decision of the Trade-marks Opposition Board?
2. Did the Board err in refusing to take notice of the admission by TeleCombo in the Board's own file with respect to the date of first use of the RESIDENT'S CHOICE trade-mark, and in finding that Loblaws had not discharged its evidentiary burden in accordance with subsection 30(b) of the Trade-marks Act?
3. Did the Board err in its restrictive definition of Loblaws' main business, in failing to accord the PRESIDENT'S CHOICE trade-marks a wider ambit of protection, and in rejecting the opposition with respect to the wares and services listed in the TeleCombo application other than "retail grocery services"?
4. Did the Board err in finding that there was no reasonable likelihood of confusion between the RESIDENT'S CHOICE mark and the PRESIDENT'S CHOICE marks for wares and services other than "retail grocery services", despite having found that the PRESIDENT'S CHOICE trade-mark had acquired a reputation extending beyond its "main business of food products and the operation of retail grocery stores", that there was an overlap between the businesses of the parties beyond retail grocery store services, and that the marks of the parties resembled each other.
5. Did the Board err in finding that the RESIDENT'S CHOICE mark was distinctive of TeleCombo, having regard to the nature of the wares and services claimed, as against the fame and reputation attaching to the PRESIDENT'S CHOICE marks?
[25] I am of the view that it is only necessary to address the first two issues, as the issue of non-registrability is determinative of this appeal.
Standard of Review
a) The Test
[26] The standard of review identified in John Labatt Limited v. Molson Companies Limited, (1990), 30 C.P.R. (3d) 293 (F.C.T.D.) at p. 298 and Molson Breweries, a Partnership v. John Labatt Ltd. (2000), 5 C.P.R. (4th) 180 at p. 196 applies to appeals under section 56 of the Trade-marks Act from decisions of the Registrar of Trade-marks, sitting as the Trade-marks Opposition Board.
[27] That is, where no new evidence is filed on the appeal that would have materially affected the Board's findings of fact, or the exercise of discretion, the test is whether the Board was clearly wrong.
[28] However, where additional evidence is filed on the appeal that would have materially affected the Board's findings of fact or law, or the exercise of discretion, the test is one of correctness. Although not an entirely apt description, some cases refer to this as a hearing de novo. In such cases, the Court is entitled to substitute its opinion for that of the Board.
[29] Loblaws has filed a considerable volume of new evidence. Included in the new evidence is TeleCombo's June 30, 1998 letter, relating to the question of use. The Board refused to consider this letter, on the grounds that it had not been properly put into evidence.
[30] In Garbo Group Inc. v. Harriet Brown & Co., [1999] F.C.J. No. 1763, at ¶ 37, Justice Evans noted that, in assessing the impact that additional evidence will have for the standard of review, the question is the extent to which the additional evidence has a probative significance that extends beyond the material that was before the Board.
[31] In this case, the Board itself acknowledged that had this letter been in evidence, it would have had a material effect on the Board's conclusions. As a result, I am satisfied that this new evidence is of sufficient significance that the Board's decision must be reviewed against the standard of correctness.
Analysis
[32] TeleCombo's trade-mark application asserts that it has used the RESIDENT'S CHOICE mark and design in Canada since March of 1997, in connection with the wares and services described in the application.
[33] I am satisfied that this appeal must be allowed on the basis that TeleCombo has failed to demonstrate that it complied with the requirements of subsection 30(b) of the Trade-marks Act as it relates to the use of the RESIDENT'S CHOICE mark.
[34] It is clear from the case law that while the legal burden is on an applicant for registration to show that the application complies with the requirements of section 30, there is an initial evidential burden on an opponent to establish the facts on which it relies to support its non-compliance argument: John Labatt Ltd., previously cited, at page 298.
[35] The fact that knowledge as to use may be largely within the possession of the applicant for registration will serve to lessen the evidentiary burden on the opponent. It does not, however, eliminate that burden altogether: John Labatt Ltd., at pp. 298-9.
[36] However, the evidentiary burden on an opponent is light. That is, it does not take much evidence to put the question of use into issue, shifting the burden to the party seeking registration to demonstrate, on a balance of probabilities, that there has been compliance with the requirements of subsection 30(b) of the Act:Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (1999), 4 C.P.R. (4th) 71 (F.C.).
[37] The letter in question in this case is dated June 30, 1998, and was sent by William Marshall of TeleCombo to the Assistant Director of Trade-marks, in the Office of the Registrar of Trade-marks. This letter provides, in part:
We would greatly appreciate it if you would consider handling our files with your expedited procedure. The reason we require some acceleration in the process is that we have been planning since January 1998 to launch our service package to apartment and condominium residents in the Greater Toronto Area in July 1998.
In order to do this, of course, we have to produce brochures, flyers, promotional videos, and Internet tie-ins and activation cards for each resident - all of which we would like to have identified as "Resident's Choice" selections from TeleCombo Inc.
It will cost us approximately $125,000 to produce these materials and it would work considerable hardship on us to have to scrap the materials and re-work them in another format. Also, it would delay our targeted mid-July roll-out.
[38] In my view, the statements made by the representative of TeleCombo in this letter strongly suggest that the RESIDENT'S CHOICE mark was not in fact in use by TeleCombo at the time that the application for registration was filed in March of 1997.
[39] At the very least, the statements made in this letter are more than sufficient to shift the burden onto TeleCombo to demonstrate, on a balance of probabilities, that there had been compliance with the requirements of subsection 30(b) of the Act.
[40] As was noted previously, TeleCombo did not file any evidence with the Board, nor has it adduced any evidence before this Court. As a consequence, it has not demonstrated that there has been compliance with the requirements of subsection 30(b) of the Act, and the appeal must accordingly be allowed.
The Other Issues Raised by Loblaws
[41] Loblaws acknowledges that a finding by the Court that TeleCombo had failed to demonstrate that it had complied with the requirements of subsection 30(b) of the Trade-marks Act would be determinative of this appeal. Nevertheless, counsel for Loblaws urges me to proceed to address the other grounds of appeal, asserting that comments made by the Board with respect to the nature of Loblaws' business should not remain unchallenged.
[42] Having found that the RESIDENT'S CHOICE was not registerable, that is the end of the matter. Suffice it to say that nothing in these reasons should be taken as approving of, or accepting, the Board's characterization of Loblaws' business.
Conclusion
[43] For these reasons, the appeal is allowed. Insofar as the Registrar of Trade-marks, sitting as the Trade-marks Opposition Board, rejected Loblaws' opposition to the registration of the RESIDENT'S CHOICE mark, that decision is set aside. Loblaws' opposition is maintained, and the Registrar is directed to refuse TeleCombo's application for registration.
JUDGMENT
This Court orders and adjudges that this appeal is allowed. The decision of the Registrar of Trade-marks, sitting as the Trade-marks Opposition Board, is set aside, and the Registrar is directed to refuse TeleCombo's application for registration.
"Anne Mactavish"
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