Date: 20060531
Docket: T-1466-04
Citation: 2006 FC 657
Ottawa, Ontario, May 31, 2006
PRESENT: The Honourable Mr. Justice Simon Noël
BETWEEN:
BOJANGLES' INTERNATIONAL, LLC and BOJANGLES RESTAURANTS, INC.
Applicants
and
BOJANGLES CAFÉ LTD.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an appeal pursuant to subsection 56(1) of the Trade-marks Act, R.S.C. 1985, c. T-13 (Act) from a decision of the Trade-Marks Opposition Board (the Board), dated June 9, 2004, with respect to the application for registration of the trade-mark BOJANGLES CAFÉ (Application Serial Number 867,574). In its decision, the Board rejected the opposition raised by Bojangles International, LLC and Bojangles Restaurants, Inc (the Applicants) against the registration of the trade-mark BOJANGLES CAFÉ by Bojangles Café Ltd. (the Respondent) with respect to different types of food, utensils and containers, as well as various restaurant services and catering-related wares. The Board found that the Respondent's trade-mark was distinctive.
[2] The Applicants operate Restaurant facilities in the United States and some other Countries, but not in Canada, under the banner "Bojangles". The Respondent operates two cafés under the name "Bojangles Café", in Vancouver, British Columbia.
1. Issues
[3] Before the Board, the Applicants initially opposed the registration of the Respondent's trade-mark on four grounds, but withdrew two of these grounds prior to the hearing. For the purposes of the present appeal, only one ground of opposition is pursued by the Applicants.
[4] The overarching issue is whether the Board erred in fact or in law in finding that the Respondent's trade-mark BOJANGLES CAFÉ was distinctive. However, the specific legal issue to be addressed is whether the Board erred in law in finding that, in order for the Applicants' mark to negate the distinctiveness of the Respondent's mark, the Applicants' mark must be "well known in at least one area of Canada or widely known [in Canada]".
2. The decision under Appeal
[5] In its decision, the Board analyzed the factors set out in subsection 6(5) of the Act, noting that these considerations were relevant to the question of distinctiveness. Subsection 6(5) reads as follows:
| 6. (5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
(b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
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6. (5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l'espèce, y compris :
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus;
b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage;
c) le genre de marchandises, services ou entreprises;
d) la nature du commerce;
e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent.
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[6] The Board mentioned, among other factual considerations and legal findings, that:
- The Applicants' mark possesses a relatively high degree of inherent distinctiveness, but BOJANGLES is a coined word with no connection to restaurant services (decision, p. 7);
- The Respondent's mark BOJANGLES CAFÉ possesses a relatively high degree of inherent distinctiveness owing to the component BOJANGLES (decision, p. 9);
- Canadian customers are served in the Applicants' restaurants and many Canadian visitors in the United States (US) become familiar with the Applicants' mark through advertising and ordering meals (decision, p. 8);
- The nature of the parties' wares and services are essentially the same and the degree of resemblance between the parties' marks is very high as the marks are essentially identical after discounting the descriptive component "café" in the Respondent's mark (decision, p. 10);
- The evidence submitted by the Applicants is sufficient to establish some goodwill in Canada (decision, p. 11);
- The Applicants' mark Bojangles was known in Canada to some extent at all material times (decision, p. 15).
[7] Next, the Board examined the relevant jurisprudence as to the standard for finding "that a party's mark is "known sufficiently to negate the distinctiveness" of another party's mark (Board Decision, p. 12). The Board member distinguished the facts before him from the facts in Motel 6, Inc. v. No. 6 Motel Limited and John Van Edmond Beachcroft Hawthorne, [1982] 1 F.C. 638. The Board also cited the following passage of the Appeal Division of the Federal Court's decision in E. & J. Gallo Winery v. Andres Wines Ltd., [1976] 2 F.C. 3:
On the whole, therefore, I am of the opinion that it has been established that the mark SPANADA was known in Canada at the material time as the trade mark of the appellant, widely known at least, if indeed not also well known within the meaning of section 5, and that this conclusion is irresistible on the evidence notwithstanding the very cogent observation of the learned Trial Judge that there was not so much as one affidavit by a Canadian viewer to the effect that he had seen appellant's SPANADA advertising on any of the United States television stations.
[8] The Board summarized the applicable jurisprudence in the following words and concluded that the reputation of the Appellant's mark in Canada was not sufficient to negate the distinctiveness of the Respondent's mark (p. 15 of the decision):
Spanada and Motel 6, above, are the leading cases to examine the extent to which a mark must be known if it is to negate the distinctiveness of another mark. The bar set by those cases is that the opponent's mark must be well known in at least one part of Canadaor widely known. In the instant case, the opponent's evidence of its mark BOJANGLES' being made well known in at least one part of Canada or widely known is far less convincing than in either Spanada or Motel 6, above [...] I accept that the opponents' mark Bojangles was known in Canada to some extent at all material times, however, I am not prepared to infer that it was well known in eastern Canada or widely known. [...] I find that the opponents' evidence is not adequate to establish that their mark Bojangles' was known sufficiently in Canadato negate the distinctiveness of the applied for mark Bojangles café" [my emphasis].
In short, the standard applied by the Board to assess the evidence submitted was whether the Applicants' mark was "well known in at least one part of Canada or widely known [in Canada]".
3. Analysis
- Standard of review
[9] In Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145, the Federal Court of Appeal set out the standard of review applicable to the Appeal mechanism provided for in the Act. The leading principles are summarized in Justice Rothstein's reasons. He wrote, at paragraph 51:
I think the approach in Benson & Hedges and McDonald's Corp. are consistent with the modern approach to standard of review. Even though there is an express appeal provision in the Trade-marks Act to the Federal Court, expertise on the part of the Registrar has been recognized as requiring some deference. Having regard to the Registrar's expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar's findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar's decision [my emphasis].
[10] This case has been widely followed by this Court and the Court of Appeal (See, e.g.: Novopharm Ltd. v. Bayer, (2000) 264 N.R. 384; [2000] F.C.J. No. 1864 (F.C.A.), at para. 4; Metro-Goldwyn Meyer Inc. v. Stargate Connections Inc., 2004 F.C. 1185, at para. 19 (F.C.)). Accordingly, as a general rule, the standard of review applicable to the Board's decision is that of reasonableness simpliciter. When new evidence is submitted, however, it is necessary to assess its significance and probative value. If the new evidence is sufficiently significant and probative to the point that it would have materially affected the Board's findings of fact or the discretion exercised, then the applicable standard is that of correctness. If it is not, then the applicable standard is that of reasonableness simpliciter (See Telus Corp. v. Orange Personal Communications Services Ltd., 2005 F.C. 590 (F.C.); Garbo Group Inc. v. Harriet Brown & Co., (1999) 176 F.T.R. 80; (1999) 23 Admin. L.R. (3d) 153; [1999] F.C.J. No. 1763, at paras. 37 to 39 (F.C.)).
(1) Evidence before the Board
[11] The Applicants have operated several hundred Bojangles' restaurants since 1978, in the US and internationally (Ireland, Jamaica, Honduras and the British West Indies). For the period in question, its total sales amount to more than three billions USD. However, I believe it is fair to say that the bulk of the Applicants' sales emanate from its operations in North and South Carolina.
[12] The Respondent, a British Columbia Company, opened its first Café under its corporate name "Bojangles Café Ltd." on March 4, 1996 in Vancouver and opened its first franchise in the same city in June 1999. Revenues from sales amounted to more than 4 millions CAN by the end of 2000. The Respondent's business consists of restaurant services, take out services, catering services, wholesale and retail bakery services. The wares consist of baking goods and prepared foods.
[13] The Applicants filed numerous affidavits before the Board. The information provided in those affidavits can be summarized as follows:
- Hundreds of Canadian Internet users visited the Applicants' website since its activation in 1999 (Applicants' Record, Tab 5);
- The Applicants' Internet address has been "secured" since 1995 (Applicants' Record, Tab 18);
- According to some affidavits sworn by employees for the Applicants, thousands (one affidavit states "numerous Canadian customers") of Canadian tourists visited the Applicants' restaurants in various locations in the US and hundreds or thousands of vehicles with Canadian license plates were seen in Bojangles parking lots (Applicants' Record, Tab 6, 8, 22, 23);
- The Applicants advertised their concept in the U.S. through American magazines and newspapers. Some fallout of these ads occurs in Canada where they have a distribution (Applicants' Record, Tab 7, 9 13, 14, 20, 21) (Applicants' Record, Tab 9, 10);
- Affidavits indicate the favourite travel destinations of Canadians along the Eastern Coast of the U.S., and state the number of visits by Canadian tourists in locations where there are Bojangles' restaurants and highway signs (Applicants' Record, Tab 7, 12, 19);
- Data about the total sales and the number of transactions between 1978 and 2001 is reported (Applicants' Record, Tab 11, 12);
- Several inquiries for franchising opportunities in Canada were made (Applicants' Record, Tab15) and numerous Canadians expressed an interest in the Applicants' concept (Applicants' Record, Tab 20);
- The Applicants' trade-mark is registered in several countries (Applicants' Record, Tab15) but, according to the Applicants' counsel, the trademark application filed in the eighties in Canada was not successful because, at that time, the name was being used by a Montréal entrepreneur (see the registrant's certificate, p. 2179 and 2185);
- One (1) e-mail of dissatisfaction, dated August 12, 2001, was mistakenly sent to the Applicants by a customer unsatisfied with the service he received at the Respondent's restaurant (Applicants' Record, Tab 17);
- The Applicants sponsored and participated in some events attended by Canadians (Applicants' Record, Tab 7, 16, 22). Special arrangements were put in place to accommodate for Canadian tourists during one of these events (Applicants' Record, Tab. 22, paras. 20 to 22), and samples of a survey conducted during this event were submitted (Applicants' Record, Tab 7).
(2) New Evidence filed before the Federal Court
[14] Additional affidavits were filed before the Federal Court. Several are signed by Canadian customers stating that they know the Applicants' trademark and restaurants (Applicants' Record, Tab 25 to 36, 38, 39, 41 to 45). The affiants were all in some way linked to the law firm which represented the Applicants before the Board, to another law firm or to an accounting firm. In addition, a survey is attached to an affidavit sworn by Ms. Gillian Humphreys, Executive Vice-President of TNS Canadian Facts (Applicants' Record, Tab 37). This survey includes data about the awareness of Bojangles' restaurants (according to the survey, 7.8% of Canadians were aware of the Applicants' mark). Further, in another affidavit, comprehensive data is provided along with another affidavit that set out the monthly net sales figures for all Bojangles' restaurants. This affidavit updates the information available before the Board (Applicants' Record, Tab 40).
(3) Assessment of the Additional Evidence
[15] All in all, I am of the opinion that the standard to be applied is that of reasonableness simpliciter. As Justice O'Keefe stated in Canadian Council of Professionnal Engineers v. APA - The Engineered Wood Association, [2000] F.C.J. No. 1027, at para. 36 (F.C.), the test is one of quality, not quantity (See also Wrangler Apparel Corp. v. Timberland Co., 2005 FC 722, at para.7). In my view, as I will explain below, the new evidence is not significant enough to the point that it would have materially affected the Board's findings of fact or the exercise of its discretion. It does not justify a correctness standard of review. This is obvious in light of the fact that the question at stake in the present matter is whether the mark of the Respondent was distinctive as of the date of filing of the opposition (Astrazeneca AB v. Novopharm Ltd., 2003 FCA 57, at para. 20; Borden, Inc. v. Hostess Food Products Ltd., [1990] 1 F.C. 570, at para. 32), i.e. July 4, 2000 (the material time). The survey was conducted in August 2004, and as the Respondent's expert Ms. Ruth Corbin mentioned in her affidavit, it is impossible to infer what knowledge the survey respondents had of the Applicants' mark back in 2000. Such posterior evidence is irrelevant for the purpose of resolving the issue of distinctiveness (Borden, Inc. v. Hostess Food Products Ltd., above, at para. 38). Further, some of the additional affidavits are relevant (some are not because of the lack of knowledge of the situation as of the material time), but not to the point that a correctness standard should apply. Below I will address in more detail both the affidavits and the survey. My understanding of the new evidence filed is that most of it is less than persuasive and that the reliability of some pieces of evidence is doubtful. For these reasons, I believe that the additional affidavits filed would not have materially affected the Board's decision.
[16] At the hearing, the Applicants submitted that in the event I find that the Board did not apply the appropriate legal test, I should nevertheless be bound by the Board's findings of fact. The above-cited passage from Molson Breweries v. John Labatt Ltd., at para. 51, is instructive on this issue:
Having regard to the Registrar's expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter [my emphasis].
[17] Therefore, the standard of reasonableness simpliciter should apply to all findings, whether of fact or law. Accordingly, for the brief reasons given above which I will elaborate upon in more detail below, I will review the Board's findings of fact keeping in mind the reasonableness simpliciter standard.
- Distinctiveness
(1) Evidential Burden
[18] The Applicants submit that the Board applied the wrong legal test to determine whether the Respondent's trade-mark is distinctive, and misunderstood the test as set out in the above-cited cases of Motel 6 and Andres Wines.
[19] The opposition is based on paragraph 38(2)(d) of the Act:
| 38.
[...]
(2) A statement of opposition may be based on any of the following grounds:
[...]
(d) that the trade-mark is not distinctive.
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38.
[...]
(2) Cette opposition peut être fondée sur l'un des motifs suivants :
[...]
d) la marque de commerce n'est pas distinctive.
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[20] Section 2 of the TMA defines the word "distinctive" as follows:
| "distinctive", in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them;
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« distinctive » Relativement à une marque de commerce, celle qui distingue véritablement les marchandises ou services en liaison avec lesquels elle est employée par son propriétaire, des marchandises ou services d'autres propriétaires, ou qui est adaptée à les distinguer ainsi.
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[21] The general question to be determined under para. 38(2)(d) and 2 of the Act is therefore whether at the material time, the mark BOJANGLES CAFÉ was adapted to distinguish the wares and services of the Respondent. As stated above [see para. 15 of the present decision] and as counsel agreed, the material time is the date of the opposition (July 4, 2000).
[22] In essence, what the Applicants' counsel is arguing is that the BOJANGLES CAFÉ mark does not distinguish the Respondent's wares and services from their wares and services because BOJANGLES' is already known in Canada as the trade-mark of the Applicants. The Board's conclusion is based on its finding that the Applicants' mark is not sufficiently known. The extent to which a mark need be known in Canada in order for that mark to negate the distinctiveness of another party's mark is thus at the core of the present matter. This threshold is a jurisprudential innovation and should not overshadow the broader picture, i.e. the question of distinctiveness as defined in the Act.
[23] Before I turn to this crucial question, it is important to note that the Board came to a conclusion that the Respondent's mark Bojangles Café had a relatively high degree of inherent distinctiveness owing to the component Bojangles at the time of the material date (decision, p. 10). This finding was not questioned by the Applicants.
[24] Having noted such a conclusion, I will now address the issue of the evidential standard that has to be satisfied in order to prove that a trade-mark is sufficiently known to negate another trade-mark distinctiveness. This evidential standard has been expressed in various ways by the Courts. What follows is a summary of the jurisprudence on this specific question.
[25] The leading case is Andres Wines, above, of the Federal Court of Appeal. In that case, the test was set out in the following words by Justice Thurlow, at para. 7:
The question to be determined on this attack is, therefore, whether the mark, "SPANADA" was, at the material time, adapted to distinguish the wine of the respondent from that of others and as the mark appears to have an inherent distinctiveness the question, as I see it, becomes that of whether it has been established by the evidence that this inherently distinctive mark is not adapted to distinguish the wine of the respondent. The basis put forward for reaching a conclusion that the mark is not adapted to distinguish the respondent's wine is that it is already known as the trade mark of the appellant in respect of similar wares. But for this purpose it is not necessary, in my opinion, that the evidence should be sufficient to show that the mark is well known or has been made well known in Canada within the meaning of section 5 or by the methods referred to in that section. Such proof, coupled with use in the United States, would be sufficient to entitle the appellant to registration and to a monopoly of the use of the mark. But that is not what is at stake in this proceeding. Here the respondent is seeking to monopolize the use of the mark and the question is that of his right to do so, which depends not on whether someone else has a right to monopolize it, but simply on whether it is adapted to distinguish the respondent's wares in the marketplace. Plainly it would not be adapted to do so if there were already six or seven wine merchants using it on their labels and for the same reason it would not be adapted to distinguish the respondent's wares if it were known to be already in use by another trader in the same sort of wares [my emphasis].
[26] In Skipper's Inc. v. Canada(Registrar of Trade Marks), [1980] F.C.J. No. 705, at para. 49 (F.C.), in obiter, Justice Cattanach stated that if a trade-mark is sufficiently well known in a specific area of Canada, this will negate another trade-mark's distinctiveness:
As I appreciate the decision of Thurlow, J. (as he then was) in E. & J. Gallo Winery v. Andres Wines Limited ([1976] 2 F.C. 3) it was, amongst other things, that it was not essential that a trade mark must become "well known in Canada" within section 5 but that if it is well known in an area of Canada that is sufficient to preclude a rival trader in that area from appropriating that trade mark because it could not be "adapted to so distinguish" that trader's wares or services [my emphasis].
This statement, in my view, is in line with the Motel 6, above, case. In Motel 6, above, the evidence presented was to the effect that the reputation of the trade-mark was essentially confined to British Columbia.
[27] In Bousquet v. Barmish Inc., [1991] F.C.J. No. 813 (F.C.), aff'd [1993] F.C.J. No. 34 (F.C.A.), Justice Cullen expressed the applicable test in the following fashion:
In Gallo [Andres Wines], Andres' prior knowledge of the foreign trade-mark was combined with evidence of a substantial reputation for Gallo in Canada created by spill-over advertising, satisfying the court that its use by the Canadian registrant would be deceptive. In my opinion, if the applicant could demonstrate that a substantial segment of the Canadian market associated the trade-mark with the foreign owner of the mark rather than the Canadian respondent at the material time, the mark would not be distinctive of the respondent and therefore invalid. This is certainly the "source" approach advocated by Strayer J. in Royal Doulton, and in my view it is a salutary principle. In the absence of evidence of a substantial reputation at the relevant time, however, or the other exceptions noted above, in my opinion the use of the trade-mark is not deceptive.
The applicants, for the reasons given above concerning distinctiveness, have not satisfied me that there was a significant reputation of the applicants in Canada at the material time, in the field of men's wear sufficient to negate the distinctiveness of the respondent's trade-mark. [...] [my emphasis]
[28] However, as the Court puts it in Andres Wines, above, one is not required to prove that the trade-mark is well known or has been made well known in Canada within the meaning of section 5 of the Act, i.e. that the wares are actually distributed or advertised in Canada and are, as a result, well known in Canada. Section 5 reads as follows:
| 5. A trade-mark is deemed to be made known in Canada by a person only if it is used by that person in a country of the Union, other than Canada, in association with wares or services, and
(a) the wares are distributed in association with it in Canada, or
(b) the wares or services are advertised in association with it in
(i) any printed publication circulated in Canada in the ordinary course of commerce among potential dealers in or users of the wares or services, or
(ii) radio broadcasts ordinarily received in Canada by potential dealers in or users of the wares or services,
and it has become well known in Canada by reason of the distribution or advertising.
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5. Une personne est réputée faire connaître une marque de commerce au Canada seulement si elle l'emploie dans un pays de l'Union, autre que le Canada, en liaison avec des marchandises ou services, si, selon le cas :
a) ces marchandises sont distribuées en liaison avec cette marque au Canada;
b) ces marchandises ou services sont annoncés en liaison avec cette marque :
(i) soit dans toute publication imprimée et mise en circulation au Canada dans la pratique ordinaire du commerce parmi les marchands ou usagers éventuels de ces marchandises ou services,
(ii) soit dans des émissions de radio ordinairement captées au Canada par des marchands ou usagers éventuels de ces marchandises ou services,
et si la marque est bien connue au Canada par suite de cette distribution ou annonce.
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[29] In Motel 6, above, at para. 41, the Court stated that it is sufficient to prove that the mark is known "to some extent at least":
The registration of a trade mark is invalid if the mark is not distinctive at the time the proceedings bringing the registration into question are commenced. In the case at bar, this would be the 2nd of November, 1979. The definition of "distinct" is to be found in section 2, supra. A trade mark can neither distinguish nor be adapted to distinguish the services of a person if another person used the mark in a foreign country and it has become known in Canada as the latter's mark in respect of similar services. On the issue of lack of distinctiveness of a mark, although it must be shown that the rival or opposing mark must be known to some extent at least, it is not necessary to show that it is well known or that it has been made known solely by the restricted means provided in section 5, supra. It is sufficient to establish that the other mark has become known sufficiently to negate the distinctiveness of the mark under attack [my emphasis].
To this effect, "[e]vidence of knowledge or reputation [...] spread by word of mouth and evidence of reputation and public acclaim and knowledge by means of newspaper or magazine articles as opposed to advertising" is relevant and acceptable evidence (Motel 6, above, at para. 42).
[30] In itself, the standard "to some extent at least" [in French: « au moins jusqu'à un certain point » ] is vague and provides little indication as to the sufficiency and quality of the evidence that should be provided in order for a decision-maker to find that a trade-mark negates another trade-mark's distinctiveness. The Applicants argue that a relatively low threshold should apply. The Respondent strongly disagreed and submitted that the standard "to some extent at least" is meaningless and that the Court should apply a relatively high standard. In my view, the analyses found in the jurisprudence are likely to assist in defining the threshold with more certainty.
[31] In Andres Wines, above, the following evidence led Justice Thurlow to find, under paragraph 37(2)(d) of the Trade Marks Act, R.S.C. 1970, c. T-10, that the American mark SPANADA negated the Canadian SPANADA trade-mark's distinctiveness:
- The American party had important gross sales in the U.S. and used its mark for more than five years;
- The applicants presented evidence of advertising and articles in publications circulating among members of the wine industry (in Canada and in the U.S.) as well as in newspapers;
- The applicants advertised their product intensively on television, and this advertising reached the Canadian market (more than 3,000 commercials were broadcast in Canada with a potential of reaching between 50% and 55% of the Canadian population).
At this point of his analysis (para. 18), Justice Thurlow noted the following:
[T]he balance of probabilities weighs heavily in favor of the conclusion that the telecasts, as a whole, of commercial messages referring to the Appelant's SPANADA wine by the United States border television stations in the period between January 1970 and November 2, 1970 were received in Canada not only by a few but by a very large number of television viewers in Canada and further that the trade mark "SPANADA" had become known to many people in Canada.
It is clear that in this case, the reach of SPANADA's television commercials in Canada was determinative in Justice Thurlow's conclusion.
[32] In Motel 6, above, Justice Addy found that the Defendant's Canadian mark "Motel 6" was not distinctive from the Plaintiff's American mark "Motel 6". The following evidence was presented by the Plaintiff:
- A concentration of the Plaintiff's motels was found along the two main north-south highways used by Canadians traveling south from British Columbia and Alberta;
- Many members of the British Columbiaand Canadian automobile associations made inquiries about the Plaintiff's motels through local offices of these organizations;
- These local offices were in contact with the Plaintiff on a regular basis;
- Brochures of the American party's motel were distributed in Canada;
- At the height of the season, approximately 50% of the guests in some of the Plaintiff's motels were Canadian motorists;
- Reservations were frequently made from Canada;
- "Very convincing evidence" was presented that customers and managers of automobile association offices and travel agencies were deceived into believing that the Defendant's motels were those of the Plaintiff;
- One of the Defendant's principal officers was fully aware of the existence of the Plaintiff's motel mark;
- Several articles on the Plaintiff's motels were published in widely-distributed Canadian and American daily newspapers.
In that case, the evidence was so persuasive that Justice Addy concluded that the plaintiff's motel had acquired substantial reputation and goodwill in British Columbia. Justice Addy also found, on a balance of probabilities, that the mark was used by the Canadian party precisely because of the reputation of the American mark in Canada (see Motel 6, supra, at para. 104). This finding appeared to be determinative in Justice Addy's conclusion.
[33] The following propositions summarize the relevant jurisprudence on distinctiveness were there is an allegation that a mark's reputation negates another mark's distinctiveness, as per s. 2 and para. 38(2)(d) of the Act :
- The evidential burden lies on the party claiming that the reputation of its mark prevents the other party's mark from being distinctive;
- However, a burden remains on the applicant for the registration of the trade-mark to prove that its mark is distinctive;
- A mark should be known in Canada to some extent at least to negate another mark's distinctiveness;
- Alternatively, a mark could negate another mark's distinctiveness if it is well known in a specific area of Canada;
- A foreign trade-mark owner cannot simply assert that its trade-mark is known in Canada, rather, it should present clear evidence to that effect;
- The reputation of the mark can be proven by any means, and is not restricted to the specific means listed in section 5 of the Act, and it is for the decision-maker to weigh the evidence on a case-by-case basis.
In both the Motel 6 and Andres Wines cases, the Courts noted that the evidence satisfied more than the jurisprudential requirement that the mark be known "to some extent at least" in Canada, and further mentioned that the mark was "well known" (Andres Wines). However, in order for an opposition to succeed, such a threshold need not be reached. The expression "well known" should be avoided in describing the legal test, as the courts expressly stated in Motel 6 and Andres Wines. On the other hand, the expressions "substantial", "significant" (Bousquet v. Barmish Inc., above, pp. 528 and 529) and "sufficiently [known] to negate the distinctiveness of the mark under attack" (Motel 6, at para. 41) were never said to be wrong. In my view, these expressions give a clearer meaning to the expression "to some extent at least" and it should be adopted as a complement to the legal standard set down by the Federal Court in Motel 6 ("to some extent at least"). Like Justice Cullen, I believe this to be a "salutary principle" (See Bousquet v. Barmish Inc., above, at p. 528).
[34] A mark must be known to some extent at least to negate the established distinctiveness of another mark, and its reputation in Canada should be substantial, significant or sufficient. This is consistent with the jurisprudence. To require that the reputation of the mark be "substantial", "significant" or "sufficient" is neither incompatible with the standard "to some extent at least" set out in Motel 6, above, nor is it contrary to the statements of the Federal Court of Appeal in Andres Wines, hence the Court's use of the expression "substantial number of Canadian viewers" to describe the evidence of the applicant with respect to T.V. advertising (see Andres Wines, at para. 19). Finally, I note that the Federal Court of Appeal did not disrupt the standard as set down by Justice Cullen in Bousquet v. Barmish Inc., above (See Bousquet v. Barmish Inc., [1993] F.C.J. No. 34).
[35] Given the above, I agree with the Applicants that the Board applied an erroneous evidentiary standard. At pages 14 and 15, it sets out its understanding of the law as follows:
As I understand it, the Bar that has been set by Motel 6, above, is that for a mark to have "become known sufficiently to negate" the distinctiveness of another mark, then the offended party's mark must have become well known in at least one area of Canada.
[...]
Spanada and Motel 6, above, are the leading cases to examine the extent to which a mark must be known if it is to negate the distinctiveness of another mark. The bar set out by those cases is that the opponent's mark must be well known in at least one part of Canadaor widely known [my emphasis].
With deference, my opinion is that the Board used language that is inconsistent with the jurisprudence. The expression "widely known" was used to describe the weight of the evidence before the Court in Andres Wines, above, not to set a legal standard and it is in direct contradiction with the above-cited passages of Andres Wines and Motel 6. Therefore, I have no other choice but to find that the Board committed an error in describing the evidential burden that has to be satisfied in order for the Applicants' mark to negate the distinctiveness of the Respondent's mark.
(2) Assessment of the evidence
[36] Under subsection 56(5) of the Act, the Court may exercise any discretion vested in the Registrar and come to its own conclusion:
| 56. (5) On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.
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56. (5) Lors de l'appel, il peut être apporté une preuve en plus de celle qui a été fournie devant le registraire, et le tribunal peut exercer toute discrétion dont le registraire est investi.
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Below I comment on most of the evidence presented by the Applicants and the standard of reasonableness simpliciter put forward and identified by Rothstein J. of the Federal Court of Appeal (as he then was) in Molson Breweries, above. Having identified an error in law in applying the evidentiary burden, I think that it is in the interests of justice, and of the parties, that I conduct such a review. Considering the above analysis of the jurisprudence, the question to be addressed is whether
the Applicants' trade-mark is known to some extent at least in Canada. In determining whether this is the case, I will have to decide whether the reputation of the Applicants' mark is substantial, significant or sufficient enough to negate the distinctiveness of the Respondent's mark as per s. 2 and 38(2) of the Act.
a) Bojangles' website
[37] The Applicants argue that their website has been online since 1999, that their Internet address has been secured since 1995, and that Canada is listed as one of their most active countries. Statistics and reports about this website's traffic is attached to the affidavit of John Cavanaugh (Applicants' Record, Tab 5). However, the breakdown of user sessions on the website shows that 33 Canadians visited their website in May 2000, 27 in March 2001 and 30 in April 2001. The Applicants indicated that numerous international users are included under the U.S. category (11,256 users in May 2000, 12,423 in March 2001 and 13, 167 in April 2001) as many Internet service providers are located in Virginia.
[38] Considering that I have no indication as to the proportion of Canadian user sessions recorded under the U.S. category, and taking into account that a good part of the information was collected after the material date, I do not find this evidence to be determinative.
b) Affidavits of Bojangles' employees
[39] Affidavits sworn by employees of the Applicants (Applicants' Record, Tab 6, 8, 22 and 23) were presented to the Board. These employees stated that they came into personal contact with thousands of Canadian customers, and allegedly recognized them by their accents, license plates, and because they referred to Canada as their place of residence.
[40] Counsel for the Respondent attempted to cast doubts on the admissibility and the probative value of these affidavits. I agree with the Respondent that there are deficiencies in the Cordova affidavit (Applicants' Record, Tab. 7). First, it is not very persuasive in that it is essentially a summary of the other affidavits. In addition, the deponent stated an opinion about the awareness of the Bojangles' trade mark (Applicants' Record, Tab. 7, para. 14). As a lay witness, Ms. Cordova is not entitled to express such an opinion, and it is therefore rejected.
[41] Nevertheless, I see no major deficiencies in the other affidavits (Tab 6, 22 and 23).
c) Advertisement and presence of Bojangles' trade-mark in the Canadian mediaand franchising inquiries
[42] The Applicants submitted that they ran ads in various U.S. publications which had some circulation in Canada:
- Nations Restaurants News(Applicants' Record, Tab 7, pp. 124 and 126, and Tab 14);
- Convenience Store News (Applicants' Record, Tab 13, pp. 705 to 771);
- Convenience Store Decision (Applicants' Record, Tab 20 and 21);
- Quick Service Restaurant (Applicants' Record, Tab 20).
[43] My understanding is that most of these publications are distributed to company officers, convenience store executives, petroleum marketers operating convenience stores, and managers in the chain store and franchising industry (See, e.g., Applicants' Record, Tab 13, p. 705; Tab. 14, pp. 775, 778, 781, 784 789, 794). These publications are not targeted to the public at large, and the advertisement placed by the Applicants seeks primarily to find business people interest in running a Bojangles' franchise in Canada (See Tab 20, pp. 1078 to 1084). Some of the ads published bear a date posterior to the material time (see Applicants' Record, Tab 20, pages 1078 to 1083).
[44] It is also submitted that articles were published in which there were references to the Applicants' trade-mark in the following U.S. publications: Business Week, Chain Store Age Executive, Chain Store age, Nations Restaurant News, Franchise Times (the magazine), Adweek, The New York Times, The Wall Street Journal and The Christian Science Monitor (the newspaper) (See Applicants' Record, Tab 10 and 14). A search in a media database was conducted by one of the deponents for the period of January 1984 to May 2000. Only 35 articles referencing the Applicants' mark were found in magazines. The search revealed that for the period of February 1985 to February 1999, only 9 articles referencing the Applicants' mark were published in newspapers.
[45] Except for Business Week magazine, the other magazines have a very small Canadian distribution and a very limited specialized readership. The same can be said about the newspapers (a few hundred for the Christian Science Monitor and five thousand for the New York Times - see Applicants' Record, Tab 14, pp. 810 and 835). In addition, most of the articles published in The New York Times are short, are not placed in prominent pages and were published before 1990 (pp. 214 to 221). The Wall Street Journal article(s) is(are) not included in the Applicants' Record. The undersigned issued a direction, and counsel for the Applicants admitted, in a letter sent to the Court dated May 3rd, 2006, that this article failed to be attached to the Applicants' Record, for unknown reasons.
[46] The Applicants also submit that their trade-mark was listed in the franchise directory of the Franchise Handbook (Applicants' Record Tab 9). Again, this is a specialized publication with limited distribution in Canada (the Applicants submit that Canadian distribution is approximately 10, 000 since 1985, but there is no direct evidence on this point).
[47] Overall, I do not believe that the advertising, the articles published or the presence of the Applicants' trade-mark in the directory of the Franchise Handbook had any notable impact on the reputation of their mark from the standpoint of a Canadian customer at the material time.
[48] Finally, with respect to the franchising inquiries placed by people in the industry, I do not see how these demonstrate that the Applicants' trade-mark is known in Canada, considering that only two inquiries per month were received in recent years and that the deponent's statement indicating that the potential franchisees were Canadian is unsupported (Applicants' Record, Tab 15). The statement that "numerous Canadians" had expressed an interest in the "Bojangles' concept" is not more persuasive (Applicants' Record, Tab 15).
d) Canadians tourists in the US and elsewhere
[49] In Borden, Inc. v. Hostess Food Products Ltd., [1990] 1 F.C. 570, at para. 34 (C.F.), an argument was submitted by the American party that "many Canadians are exposed to the appellant's trade marks in their travels to the United States". This argument was given little value by the learned judge as no evidence was provided about the exposure of Canadians to the appellant's trade-mark or about the number of Canadians traveling in the US where the American party's product were being advertised.
[50] The argument submitted by the Applicants in the matter at hand is somewhat similar, but here the Applicants presented figures on the travel destinations of Canadian tourists in the US and in other locations (Ireland, Jamaica, Honduras and the British West Indies) where the Applicants operate franchise restaurants. They also submitted information and evidence about the location of Bojangles' signs along highways, as well as information about the total sales and the number of transactions (Applicants' Record, Tab 7, 11, 12, 19, 40).
[51] In Motel 6, above, Justice Addy found similar evidence of "trans-border" reputation due to Canadian travels to the U.S. to be persuasive. However, I believe that the Motel 6 case should be distinguished from the present matter. First, it was clear in Motel 6 that Canadian motorists attended the American Plaintiff's motel and had knowledge of this mark through motorists' and tourists' agencies in Canada. The evidence was that at some of the motels, at the peak of the season, approximately 50% of the guests were Canadian tourists (see Motel 6, above, at para. 44). In Motel 6, even travel agents were misled. Second, as mentioned above (see para. 32 of the present decision), there was evidence in Motel 6 that the Canadian party exploited the American party's reputation, which is not the case in the present matter.
[52] In my view, the Applicants' evidence cannot demonstrate much more than the fact that "many Canadians visitors to the United States become familiar with the opponents' mark Bojangles through the opponents' advertising and through actually ordering meals at Bojangles'" (decision, p. 8). This is not an unreasonable finding, but it cannot be said that these customers' recollection of the mark Bojangles' is supported by the evidence. Although I have no doubt that the Applicants' business is important - that its total sales over the years have amounted to more than three billion dollars and that several Bojangles' franchises are operated internationally (Applicants' Record, Tab 11 and 40) - I do not believe that this in itself implies that Bojangles' has a substantial, sufficient or significant reputation in Canada.
[53] Turning to another matter, the evidence is that along several interstate highways (20, 26, 75, 77, 85, 95 and 520), 126 signs of the Applicants' trade-mark were placed. It was emphasized by the Applicants that these highways are likely used by Canadians traveling to the Southeastern part of the U.S. (the mileage was not supplied) . However, the pictures presented to the Court do not persuade me that the Bojangles' signs along American highways had any notable effect on the reputation of the Applicants' trade-mark from the standpoint of a Canadian customer. Customers traveling by car are inundated by advertising, and the exposure of the Applicants' mark appears limited, given that many signs are collages of advertisements (Applicants' Record, Tab 19, pp. 1035 to 1075). Further, some signs are difficult to read (Applicants' Record, Tab 19, p. 1029, 1030, 1032, 1033 and 1034). Therefore, it is difficult to draw any conclusions in favor of the Applicants on the basis of these pictures.
e) Participation and sponsorship of events in Canada and in the US
[54] The Applicants submitted that they sponsored and participated in events that Canadians attended (Applicants' Record, Tab 16, 22). Although the July 4, 2000 U.S. Embassy's reception in Ottawa is relevant, I note that it is a one time event and that the Applicants had a limited participation (there were more than 120 other sponsors). In the brochure submitted, the name "Bojangles' famous chicken'n biscuits" is mentioned among many other U.S. and Canadian sponsors.
[55] As for the Canadian American Days Festival held on an annual basis in South Carolina, although it could have attracted Canadian tourists in the area, I note that the Applicants did not sponsor the event. No brochures were filed that would have been distributed before the material time except for a general statement to say that the Applicants' restaurants in the area increased their staff to accommodate the flow of customers and that "malt vinegar" was available as a condiment for fries and "[...] as a courtesy to Canadian customers" since 1983. Such evidence is not significant enough to establish that customers have become aware of the Applicants' mark.
f) New affidavits
[56] The Applicants also presented 19 new affidavits sworn by partners, associates, managers and employees at the law firms Smart & Biggar (Tab 25, 30, 31, 33, 41, 43) and Osler, Hoskin & Harcourt LLP (Tab 28, 29, 32, 34, 35, 36, 38, 39, 42, 44, 45), and at the accounting firm KPMG (Tab 26, 27). Counsel for the Applicants admitted at the hearing that these three firms had business relationships to some extent, but the exact nature of it is unknown. For many reasons, the Respondent replied that the affidavits should be given little weight.
[57] I agree with the Respondent that some of the affidavits are not relevant because the affiants swore that they became aware of the Applicants' trade-mark after the material time (Tab 29, 34, 35, 42, 44). With regard to the other affidavits, it is impossible to establish whether some of the affiants acquired knowledge of the Applicants' trade-mark prior to or after the material date because of their vagueness (Tab 32, 36, 39). Other affiants are franchise law practitioners (Tab 35 and 45 - it further appears that they are aware of the Applicants' mark because of their practice) or lived in the US for considerable periods of time (Tab 31, 33). In that sense, they can hardly be considered to be representative of the Canadian public (see Consorzio del Prosciutto di Parma v. Maple Leaf Meats Inc., [2001] 2 F.C. 536, at para. 35). Finally, only four (4) out of the nineteen (19) deponents actually ate at a Bojangles' restaurant (Applicants' Record, Tab 28, 30, 38, 41). These reasons are not sufficient to dismiss the affidavits, but will certainly affect their persuasiveness on the issue of the reputation of the Applicants' trade-mark in Canada.
g) Survey
[58] The Applicants further submitted a survey purporting to determine the Canadian public's awareness of the Bojangles' restaurant chain in Canada (Applicants' Record, Tab 37). However, this survey, as mentioned above, was completed in 2004 and therefore it is not possible to draw statistical conclusions with respect to the reputation of the Applicants' trade mark at the material time. Many other reasons are mentioned in the affidavit of Dr. Ruth Corbin, the Respondent's expert (Respondent's Record, Tab 1), and I agree with many of these reasons. Although they speak for themselves, I will nevertheless mention her most important observations.
[59] First, the question "Are you aware of the Bojangles' restaurants, or not?" (Question 2) is biased in that it suggests that Bojangles' restaurants exist. This probably results in "guessing" by survey respondents. Moreover, the desire of the survey respondents to appear well-informed might have further affected the validity of the results. It appears that many respondents who answered "yes" did not have any real awareness of the Applicants' trade-mark, which seems to prove the respondent's expert point (See, e.g., respondents answers # 163 [Applicants' Record, Tab 49, p. 1710), # 414 [Tab 49, p. 1733], # 441 [Tab 49, p. 1737], # 773 [Tab 49, p. 1754], # 799 [Tab. 49, p. 1757], and # 868 [Tab 49, p. 1758]). In addition, it is admitted that the solicitor for the Applicants, Mr. A. David Morrow, drafted the survey questions (Applicants' Record, Tab 47, p. 1542 to 1545 and 1665-1666), which were accepted as drafted by the Applicants' expert. This defect casts further doubts as to the validity of the survey. Why rely on a survey expert if it is not to make sure that the survey is conducted according to scientific standards from the beginning to the end?
[60] Second, no control condition was used. It appears that the reason for this is that Mr. Morrow suggested that it was not necessary (Applicants' Record, Tab 47, pp. 1636 and 1637). I believe this to be an important flaw (see Toys "R" Us (Canada) Ltd. v. Manjel Inc., 2003 FCT 283, at para. 43 (F.C.); Labatt Brewing Co. v. Molson Breweries, [1996] B.C.J. No. 2191, at para. 17 (B.C.S.C.) and also Corbin, Gill and Joliffe, "Trial by survey: Survey Evidence and the Law", Carswell, 2000 at page 26 (Tab 12, Respondent Book of authorities). Taking into consideration the wording of question 2, a control condition was essential.
[61] In general, survey evidence must be admitted with caution. In R. v. Prairie Schooner News Ltd., [1970] M.J. No. 32 (Man. C.A.), Justice Dickson wrote, at para 11:
A word of warning. The findings of a poll can be deceptively simple and frequently misleading. This is repeatedly emphasized in the writings on this subject. Such evidence must, therefore, if it is to be admitted, be received with caution and carefully evaluated before weight is given to it.
Even if I were to admit the survey as an accurate assessment of the awareness of the Bojangles' trade-mark in Canada at the material date (7.8% of the respondents did say that they were aware of the Bojangles's restaurants), I do not think that it would be determinative. Only 71 persons out of 1019 survey respondents answered "yes" to the question "Are you aware of the Bojangles' restaurants, or not?". Most survey respondents who answered yes to this question declared that they knew about Bojangles' restaurants for "Less than 1 year" or "1 to 5 Years", which indicates that their recollection is posterior to the material date (Applicants' Record, Tab 37, p. 1211). Therefore, using the best scenario possible, the actual number of survey respondents who were aware of the Applicants' mark at the material date ranges between 6 and 26 people out of 1019 respondents, considering that the category "1 To 5 Years" overlap the "5 To 10 Years" category.
It is also informative to note that only 6 survey interviews (out of 71), which is less than 1% of survey respondents, said that their recollection of the mark goes back to 5 to 10 years which would bring us in to the material period time.
[62] There are more reasons given by Dr. Corbin to question the validity and reliability of the survey but I believe that the reasons given above are sufficient to allow me to conclude that little weight can be given to it.
h) The affidavit of Mr. Newman
[63] The affidavit of Mr. Eric Newman updates the financial information already on file (Applicants' Record, Tab II) and covers the period of 2002-2004. This new information is not relevant to the material time period. Therefore, it does not add anything of significance to what was filed with the Board.
(3) Conclusion on the Evidence
a) Impact on the standard of review
[64] I have already found that the new evidence before this court was not significant enough to the point that it would have materially affected the Board's findings of fact. Accordingly, I indicated that a standard of reasonableness simpliciter should apply. The new affidavits are not very persuasive for the reasons already given. The Newman affidavit does not add any financial information on the Applicants at the material time. Finally, the survey is not persuasive. The above detailed analysis confirms that the evidence is not sufficient to justify a standard of correctness.
b) Conclusion on the reputation of the Applicants' trade-mark in Canada
[65] In conclusion, the Applicants were in my view unable to show that their trade-mark is known "to some extent at least" in Canada. Although they submitted an abundance of evidence, I do not believe that this evidence is of such quality as to be persuasive for the above reasons.
[66] The quality or lack thereof of the evidence that is currently before the Court has nothing to do with the evidence presented in the Motel 6 and Andres Wines cases. This is not to say that the Applicants had to present evidence that matched the evidence presented in these cases, but I clearly have no convincing evidence of any substantial, significant or sufficient reputation of the Applicants' trade-mark in Canada before me. In both cases, the judges were concerned with evidence that the trade-mark was known by the general public in Canada through word of mouth or the media. I have no such evidence in the matter at hand. For these reasons, I agree with the Board that the evidence in the matter at hand is far less convincing than in either Andres Wines or Motel 6 (Board's Decision, p. 15).
[67] As I stated above, the Applicants believe that I should be bound by the Board's findings of fact. But in light of Molson Breweries v. John Labatt Ltd., above, at para. 51, these findings should be reviewed on a reasonableness simpliciter standard and so I can vary these findings. Having read all the evidence, I conclude that the Board made two unreasonable findings of fact. The evidence before the Board was so weak that it was erroneous for the Board to find that it was "sufficient to establish at least some goodwill in Canada" and that the Applicants' mark "was known in Canada at all material times".
[68] To establish some reputation in Canada flowing from the use of a mark in another country, it is necessary that the evidence clearly indicate that the mark is known to some extent at least, i.e. that the reputation of the mark in Canada is substantial, sufficient or significant. The evidence presented to the Board was not substantial, sufficient or significant. In my view, the trade-mark BOJANGLES CAFÉ is not already known in Canada as the trade-mark of the Applicants.
(3) Conclusion on Distinctiveness
[69] As mentioned above, in para. 23 of the present decision, the trade-mark "Bojangles Café" is inherently distinctive with respect to the Respondent's product in Canada. This finding is undisputed and the only argument submitted by the Applicants relates to the jurisprudential test to be applied to find that a mark negates another mark's distinctiveness.
[70] For a trade-mark to be considered distinctive, three conditions should be met (See Havana House Cigar and Tobacco Merchants Ltd. v. Skyway Cigar Store (1998), 147 F.T.R. 54, [1998] F.C.J. No. 678 (F.C.), rev'd on other grounds by (1999), 251 N.R. 215, [1999] F.C.J. No. 1749 (F.C.A.):
- that a mark and a product (or ware) be associated;
- that an owner uses this association between the mark and his product; and
- that this association enables the owner of the mark to distinguish his product from that of others.
[71] Given all of the above and taking into account the evidence presented by the Respondent, I have no doubt that the Respondent's trade mark is distinctive.
[72] The Applicants' have failed to establish that their mark's reputation negates the inherent distinctiveness of the Respondent's mark. Therefore, the Board's final determination that the Applicants evidence is not adequate to establish that their mark Bojangles was known sufficiently in Canada to negate the distinctiveness of the Respondents' mark Bojangles Café is correct and need not be varied.
[73] For these reasons, the appeal is dismissed with costs.
JUDGMENT
THE COURT HEREBY ORDERS THAT:
- The appeal is dismissed with costs.
"Simon Noël"
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