Canadian Tire Corporation v. Accessoires d’autos nordiques inc., 2006 FC 1431

 

 

 

Date: 20061127

Docket: T-1003-05

Citation: 2006 FC 1431

Ottawa, Ontario, November 27, 2006

 

PRESENT:     The Honourable Mr. Justice Blais

 

 

BETWEEN:

 

CANADIAN TIRE CORPORATION, LIMITED

Applicant

and

 

ACCESSOIRES D’AUTOS NORDIQUES INC.

Respondent

 

 

 

REASONS FOR JUDGMENT AND JUDGMENT

 

[1]               This is an application by way of statutory appeal under section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the “Act”), for an order setting aside a decision rendered by the Opposition Board for the Registrar of Trade-marks on April 12, 2005, refusing Canadian trade mark application number 860,710 seeking registration of the trade-mark NORDIC & Snowflake Design (the “proposed trade-mark”).

 

BACKGROUND

[2]               On November 6, 1997, the Applicant filed trade-mark application No. 860,710 for the trade-mark NORDIC & Snowflake Design, on the basis of proposed use in association with tires (the “wares”). The application was advertised in the Trade-marks Journal on April 19, 2000.

 

[3]               A statement of opposition was filed on June 2, 2000, by the respondent, owner of the trade-mark NORDIQUES (TMA367415) since March 30, 1990.

 

[4]               In his statement of opposition, the respondent alleged that:

(a)    The application did not comply with section 30(i) of the Act as, at the date of filing of the application, the applicant could not have been satisfied that it was entitled to use the trade-mark in Canada in association with the wares in question;

(b)   The applicant’s proposed trade-mark was not registrable pursuant to paragraph 12(1)(d) since it was confusing with the respondent’s registered trade-mark NORDIQUES;

(c)    The applicant was not entitled to registration pursuant to paragraph 16(3)(a) since, at the time of filing of the application, the proposed trade-mark was confusing with the respondent’s trade-mark NORDIQUES and N Design;

(d)   The applicant was not entitled to the registration of the proposed trade-mark as per the provisions of paragraph 16(3)(c) of the Act, as at the time of filing of the application, the mark was confusing with the respondent’s trade-name Accessoires d’autos Nordiques Inc.;

(e)    The applicant’s proposed trade-mark was not distinctive within the meaning of section 2 of the Act, as it does not distinguish or is adapted to distinguish the applicant’s wares from the respondent’s wares and services.

 

[5]               Affidavit evidence was submitted to the Opposition Board of the Registrar of Trade-marks (the “Registrar”), which rendered its decision on March 21, 2005.

 

[6]               The Registrar upheld the respondent’s opposition on grounds (b) and (e), dismissed ground (a) as insufficiently pleaded, did not deal with ground (c), finding that the use of the trade-mark NORDIQUES and N Design constitutes use of the trade-mark NORDIQUES, and dismissed ground (d).

 

[7]               On June 9, 2005, the applicant commenced an application before this Court for a statutory appeal, under section 56 of the Act, of the decision of the Registrar. The applicant also filed new evidence in addition to that adduced before the Registrar.

 

ISSUES FOR CONSIDERATION

[8]               Whether the Registrar erred in finding that the applicant’s proposed trade-mark was:

a)      not registrable pursuant to paragraph 12(1) (d) of the Act since it was confusing with the respondent’s registered trade-mark; and

b)      not registrable because it was not distinctive within the meaning of section 2 of the Act.

 

STANDARD OF REVIEW AND BURDEN OF PROOF

[9]               On an appeal brought under section 56 of the Act, the standard of review to be applied will depend on whether or not new evidence has been adduced on a given issue. Where new evidence has been adduced that would have materially affected the Registrar’s findings in regards to the issue to which the evidence relates, the proper standard of review will be correctness. Where no new evidence has been adduced, or where the new evidence would not have materially affected the Registrar’s decision, the proper standard of review will be reasonableness. As noted by Justice Marshall Rothstein in Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145, (2000) 5 C.P.R. (4^th) 180 (F.C.A.), at paragraph 51:

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.

 

[10]           When the issue of confusion with an existing trade-mark is raised, the onus of proof rests on the person who seeks registration of the new trade-mark (Saputo Groupe Boulangerie v. National Importers Inc., [2005] F.C.J. No. 1898, 44 C.P.R. (4^th) 241, at paragraphs 80 to 83). It is also well established that, in a trade-mark opposition, the applicable standard of proof is that of a balance of probabilities; the Registrar must be reasonably satisfied that, on a balance of probabilities, the registration of the trade-mark is unlikely to create confusion. In Christian Dior, S.A. v. Dion Neckwear Ltd. [2002] 3 F.C. 405, (2002), 216 D.L.R. (4th) 451 (F.C.A.), at paragraph 12, the Federal Court of Appeal adopted the formulation of the test set out by Justice Marceau in Playboy Enterprises Inc. v. Germain (1978), 39 C.P.R. (2d) 32 (F.C.T.D.), at page 38, affirmed (1979), 43 C.P.R. (2d) 271 (F.C.A.):

The question whether a mark is likely to be confusing with another mark in the minds of the public and within the meaning of the law, is a question of fact, or more precisely a question of opinion as to probabilities based on the surrounding circumstances and the particular facts of the case. [Emphasis added.]

 

[11]           As correctly stated in the decision of the Registrar, the material date for considering the issue of distinctiveness is the date of filing of the statement of opposition, while registrability under paragraph 12(1)(d) will be assessed as of the date of the decision.

 

ANALYSIS

A) Registrability: Confusion

[12]           Paragraph 12 (1)(d) of the Act provides that a trade-mark is not registrable if it is confusing with an already registered trade-mark. What may be considered ‘confusing’ is defined at subsection 6(2) of the Act:

 

[13]           The Act also sets out a list of elements that should be considered by the Registrar in determining whether confusion might arise from the registration:

 

[14]           The Registrar drew conclusions, and the applicant and respondent both made submissions, on each of the elements of subsection 6(5) of the Act, all of which this Court will address.

 

[15]           In considering these criteria, some practical guidelines have been set out by Justice Brian D. Malone of the Federal Court of Appeal, at paragraph 18 of his reasons in United States Polo Assn. v. Polo Ralph Lauren Corp., (2000), 9 C.P.R. (4th) 51, (2000), 215 F.T.R. 160:

A review of some of the leading cases also establishes some practical guidelines. For example, the Court is to put itself in the position of an average person who is familiar with the earlier mark but has an imperfect recollection of it; the question is whether the ordinary consumer will, on seeing the later mark, infer as a matter of first impression that the wares with which the second mark is used are in some way associated with the wares of the earlier. With respect to the degree of resemblance in appearance, sound or ideas under subparagraph 6(5)(e), the trade-marks at issue must be considered in their totality. As well, since it is the combination of elements that constitutes a trade-mark and gives distinctiveness to it, it is not correct to lay the trade-marks side by side and compare and observe similarities or differences among the elements or components of the marks when applying the test for confusion. In addition, trade-marks must not be considered in isolation but in association with the wares or services with which they are used. When dealing with famous or well-known marks, it may be more difficult to demonstrate that there is no likelihood of confusion, especially if the nature of the wares are similar. Lastly, the enumerated factors in subsection 6(5) need not be attributed equal weight. Each particular case of confusion might justify greater emphasis being given to one criterion than to others.

 

 

Inherent Distinctiveness of the Trade-marks and Extent to Which They Have Become Known

[16]           In its decision, the Registrar noted that neither the proposed trade-mark of the applicant nor the registered trade-mark of the respondent possess a high degree of inherent distinctiveness, as both could be considered as highly suggestive of one of the characteristics of the wares as being for use in winter conditions.

 

[17]           Before the Registrar, the applicant had submitted evidence from a trade-mark research analysis to show the prevalent use of trade-marks and trade-names with the words NORDIC or NORDIQUES or their phonetic equivalent, including in the automobile parts and accessories business. The Registrar rejected this evidence on the basis of a lack of information on the affiant’s expertise and on the reliability of the databases used. The applicant has attempted  to remedy the situation by submitting more affidavits before this Court, both in support of the initial evidence and to provide evidence of additional searches conducted. The respondent for his part submits that such evidence remains insufficient to show that the trade-marks or trade-names in question are commonly used in relations to the sale of automotive parts and accessories.

 

[18]           While the applicant’s evidence on trade-marks being associated with the areas of activities of the respondent may be too weak to really show that it is a common trade-mark for businesses that sell automotive parts and accessories, a reading of the lists provided by the applicant does support the conclusion of the Registrar that such appellations are often associated with winter, or one might also say with the northern character of Canada and as such, are not inherently distinct.

 

[19]           On the issue of the extent to which the trade-mark of the applicant has become known, the Registrar concluded that, based on evidence of approximately $90 million in sales in Canada between 1999 and 2001 of tires bearing such a mark, the applicant’s proposed trade-mark is known to some extent in Canada. Turning to the situation of the registered trade-mark of the respondent, the Registrar noted that there was insufficient evidence to come to any useful conclusion on the extent to which this trade-mark is known in Canada. The Registrar did note however that evidence of advertising expenses were insufficient to show ‘use’ of the trade-mark as per section 4 of the Act, in association with the wares, and that the cross-examination of Mr. Bérubé, a long-time employee of the respondent and Vice-President of the Board of Directors, revealed that there had in fact been no ‘use’ of the trade-mark NORDIQUES in association with automotive parts. The respondent’s business is geographically located in the Quebec City area and, while evidence was submitted to the effect that merchandise can be ordered by catalogue or the internet, there was no evidence presented to support a Canada-wide knowledge of the respondent as a result of this.

 

[20]           Overall, I find the conclusion of the Registrar on this first element to be reasonable and find nothing in the additional evidence submitted that would have materially affected the Registrar’s findings.

 

The Length of Time the Trade-marks Have Been in Use

[21]           The Registrar recognized that there was evidence that the applicant had used the proposed trade-mark in association with the wares since 1998.

 

[22]           Turning to the respondent, the Registrar once again pointed to a lack of evidence provided on the use of the trade-mark as defined in section 4 of the Act, with respect to automotive parts and accessories, but did acknowledge that evidence had been submitted to the effect that the NORDIQUES trade-mark was used in association with tooling.

 

[23]           In my opinion, such conclusion was reasonable in light of the evidence before the Registrar.

 

[24]           Furthermore, since the decision of the Registrar was released, section 45 proceedings were undertaken. In the section 45 decision, the Registrar narrowed the list of wares that could remain as part of the trade-mark registration, resulting from the inability of the respondent to demonstrate use of the trade-mark in relation to the other items on the list.

 

Nature of the Wares and Nature of the Trade

[25]           In comparing the wares listed on the certificate of registration of the respondent and the wares listed in the application under opposition, the Registrar concluded that there was a clear overlap, as the respondent’s certificate of registration lists such items as breaks, wheels and wheel covers, which are similar in nature to the applicant’s wares (tires).

 

[26]           The applicant submits that this conclusion is fundamentally flawed, as the respondent’s certificate of registration does not, in fact, list breaks or wheels. While this may appear to some to be an insignificant detail, the Registrar did choose to list three examples amongst the dozens of items listed, and two of those turned out not to in fact be on the certificate in question.

 

[27]           Furthermore, following the Registrar’s decision on section 45, even wheel covers are no longer on the list of wares that appear in the respondent’s certificate of registration.

 

[28]           On the issue of the nature of the trade, the Registrar concluded that the nature of the parties’ business is similar, as they both sell, among other things, automobile parts and accessories.

 

[29]           The applicant submits that the Registrar failed to consider the particularities inherent to the sale of tires, where service is vitally important, so that consumers are likely to purchase tires from a store that offers the services of a mechanic, and that consumers would not buy tires in auto parts stores such as that of the respondent.

 

[30]           While I might agree with the applicant that many consumers might prefer to purchase tires where the services of a mechanic is offered, it cannot be said that no customers would ever purchase tires from an auto parts store. In fact, the respondent submitted evidence to the effect that it had in the past sold tires, and that some of his customers were businesses that installed tires, so that there is nothing in theory that would prevent the wares from eventually being sold by the respondent, which is the relevant consideration under the Act (Everex Systems Inc. v. Everdata Computer Inc., (1992) 44 C.P.R. (3d) 175 at 182).

 

[31]           While I find the Registrar’s conclusion on the nature of the wares somewhat questionable under the circumstances, its finding on the issue of the nature of the trades is reasonable. I also believe that the new evidence submitted is unlikely to have materially affected his conclusion that there is some similarity between the business of the applicant and that of the respondent.

 

Degree of Resemblance between the Trade-marks in Appearance, Sound or Ideas Suggested

[32]           As recognized by the Registrar, the most crucial factor in most cases will be the degree of resemblance between trade-marks in appearance, sound or in ideas suggested by them (Beverley Bedding & Upholstery Co. v. Regal Bedding & Upholstery Ltd., (1980) 110 D.L.R. (3d) 189, affd (1982) 133 D.L.R. (3d) 255).

 

[33]           On the question of ‘sound’, the Registrar accepted that the two trade-marks might be pronounced differently by an English-speaking person, but concluded that the trade-marks were phonetically identical to a French-speaking person, a conclusion that I cannot argue with. However, as stated by Robert Pierce, Category Manager of Tires for the applicant, the wares at issue are unlikely to be purchased by telephone, so that the visual impact of the trade-mark would be more important than how it ‘sounds’. The applicant also submits that if indeed businesses were to purchase tires from the respondent, then they would be sufficiently knowledgeable about tires to avoid the prospect of confusion.

 

[34]           In terms of the ‘appearance’, not only is the spelling of the two trade-marks different, but the design associated with each (snowflakes vs. a red, white & blue N) cannot be said to be in any way confusing. That being said, the Registrar found that the dominant portion of the applicant’s proposed trade-mark is the word NORDIC and not the design that accompanies it.

 

[35]           With all due respect to the conclusion of the Registrar, the case law is clear that, in considering the possibility of confusion, the trade-marks in question must be considered as a whole, and not broken down into their component parts to highlight differences. As stated by Justice Thorson in British Drug Houses Ltd. v. Battle Pharmaceuticals, [1944] Ex. C.R. 239 at 251, affirmed [1946] S.C.R. 50:

It is, I think, firmly established that, when trade marks consist of a combination of elements, it is not a proper approach to the determination of whether they are similar to break them up into their elements, concentrate attention upon the elements that are different and conclude that, because there are differences in such elements, the marks as a whole are different. Trade Marks may be similar when looked at in their totality even if differences may appear in some of the elements when viewed separately. It is the combination of the elements that constitutes the trade mark and gives distinctiveness to it, and it is the effect of the trade mark as a whole, rather than of any particular part in it, that must be considered.

 

[36]           Finally, turning to the ‘ideas suggested’, the applicant submitted to the Registrar that NORDIQUES brought to mind the former hockey team of the same name, as opposed to the respondent’s wares, while NORDIC had no inherent social meaning beyond the ideas of the north and winter. The Registrar found that the evidence did not support such an argument, after rejecting the opinion evidence of the applicant’s linguistics expert on this point as being outside the realm of his expertise, and pointing to the lack of supporting survey evidence.

 

[37]           In support of their appeal before this Court, the applicant submitted additional affidavit evidence which speaks to the competency of the linguistics expert, Dr. Larendeau. In his further affidavit, which was not before the Registrar, Dr. Larendeau provided a more detailed explanation of what constitutes French linguistics. He explained that linguistics includes the study of socio linguistics, which is the inquiry into the social and ethnological connection between language and specific sets of socio-historical realities, making the affiant qualified to offer evidence on the social meaning associated with a particular word. In his additional affidavit, Dr. Laurendeau addressed the scenario raised by the Registrar regarding a person who would have no knowledge of hockey, by stating that in Quebec, the Nordiques hockey team has reached the level of an ethno-cultural stereotype even for people with no knowledge of sports. Dr. Laurendeau also reiterated that in Quebec, the connection between the word NORDIQUES and the defunct hockey team supersedes any other semantic value for the word.

 

[38]           Shortly after the release of the Registrar’s decision, the applicant also commissioned a survey to support his claim on the association between the word NORDIQUES and the defunct hockey team, the result of which are before this Court. The survey was conducted by Corbin Partners Inc. whose mandate was to assess the top-of-mind visual association with NORDIQUES. The sample for the survey was comprised of owners or lessees of automobiles who live or shop in Quebec City and who are purchasers of automobile parts or tools. The most interesting conclusion from the survey was that 80% of those surveyed, as a matter of first impression, thought of the former hockey team when presented with the word NORDIQUES. Only 4% thought first of a store that sells auto-parts.

 

[39]           It is my opinion that, had the Registrar been provided with this evidence, it would have materially affected the Registrar's findings, as it addresses directly the concerns raised by the Registrar in the decision. As such, the Registrar’s findings on this particular issue should be reviewed on a standard of correctness.

 

[40]           Having reviewed the evidence submitted, I must agree with the applicant that the two trade-marks in question are not only dissimilar in appearance, but also bring to mind different ideas, which would likely limit the possibility of confusion on the part of consumers.

 

Other Factors

[41]           The applicant also makes additional submissions to be found in the second affidavit of Mr. Pierce, to the effect that, since the applicant began using the proposed trade-mark, there have been no reports of any confusion between the wares at issue and any wares sold by the respondent, nor has there been any inquiry as to whether the wares sold by the applicant were associated with the respondent in any fashion. The respondent submits in reply that the absence of confusion at the applicant’s stores is irrelevant, as the confusion would be more likely to be found amongst the respondent’s clientele. That being said, the respondent has failed to provide any report of actual confusion since the applicant began using its proposed trade-mark in 1998.

 

[42]           While actual confusion need not be proven to find a likelihood of confusion, the lack of evidence as to any actual confusion is a surrounding circumstance which the courts have found to be of significance. In the recent decision of the Supreme Court of Canada in Mattel, Inc. v. 3894207 Canada Inc., [2006] S.C.J. No. 23, Justice Binnie stated at paragraph 55 :

Evidence of actual confusion would be a relevant “surrounding circumstance” but is not necessary (Christian Dior, S.A., at para 19) even where trade-marks are shown to have operated in the same market area for ten years:  Mr. Submarine Ltd. v. Amandista Investments Ltd. (1987), 19 C.P.R. (3d) 3 (F.C.A.).  Nevertheless, as discussed below, an adverse inference may be drawn from the lack of such evidence in circumstances where it would readily be available if the allegation of likely confusion was justified. [emphasis added]

 

Conclusion on Paragraph 12(1)(d) of the Act

[43]           Having carefully considered all of the surrounding circumstances, with proper regard to the impact of new evidence submitted on the standard of review applicable, I must disagree with the conclusion of the Registrar on the probability of confusion that would result from the registration of the applicant’s proposed trade-mark.

 

[44]           While I have found the majority of the Registrar’s findings to be reasonable, I disagree with his findings on what he himself has stated was the most important criteria, the resemblance between the trade-marks. Given the new evidence submitted, I have reviewed this particular finding on a standard of correctness.

 

[45]           I accept that the trade-marks are not inherently distinct, that the applicant’s trade-mark has been shown to have been used in Canada for the past seven years and to have become fairly well known, that both trade-marks look very different and are associated with different ideas, and that there has been no reported instance of actual confusion. When I weigh all of these elements against the similarity in the pronunciation of the two trade-marks in French and the similarity in the nature of the trades, I find that, on a balance of probabilities, registration of the proposed trade-mark is unlikely to create confusion.

 

B) Registrability: Distinctiveness

[46]           On the other ground raised by the respondent and considered by the Registrar, namely the lack of distinctiveness of the applicant’s proposed trade-mark, the Registrar’s reasoning was based essentially on his findings under paragraph 12(1)(d): because the trade-mark was found to be confusing, it could not be found to be distinctive. Having rejected the Registrar’s conclusion on the issue of confusion, I find that I must also reject his conclusion on the issue of distinctiveness, based on the above reasoning, particularly in light of the limited resemblance between the two trade-marks.

 

JUDGMENT

 

1.                  The appeal under section 56 of the Act is allowed;

2.                  The matter is referred back to the Registrar of Trade-marks on the basis that application No 860,710 for registration of the trade-mark NORDIC & Snowflake Design be granted;

3.                  Regarding costs, the applicant will provide written submissions no later than December 4, 2006 at 17h00 and the respondent will provide in reply written submissions no later than December 11, 2006.

 

 

 

“Pierre Blais”

ANNEX

PERTINENT LEGISLATION

 

Section 12 of the Act sets out the general rule for registration, while section 38 sets out the grounds for opposition to a registration.

 

Section 6 sets out when a trade-mark may be considered ‘confusing’, while section 2 provides a definition of the term ‘distinctive’.

 

Section 4 of the Act defines what it means for a trade-mark to be ‘used’ in association with wares and section 45 sets out the process for the Registrar to review the use of a trade-mark.

 

 

 

FEDERAL COURT

 

SOLICITORS OF RECORD

 

DOCKET:                                          T-1003-05

 

STYLE OF CAUSE:                          CANADIAN TIRE CORPORATION, LIMITED v. ACCESSOIRES D’AUTOS NORDIQUES INC.

 

PLACE OF HEARING:                    Ottawa, Ontario

 

DATE OF HEARING:                      October 23, 2006

 

REASONS FOR JUDGMENT AND JUDGMENT:          BLAIS J.

 

DATED:                                             November 27, 2006

 

APPEARANCES:

 

Mr. John S. McKeown	FOR THE APPLICANT
Me Pierre Leclerc	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

Cassels Brock & Blackwell Toronto, Ontario	FOR THE APPLICANT
Reinhardt Bérubé Sainte-Foy, Quebec	FOR THE RESPONDENT