Prologic Systems Limited v. Prologic Corporation, docket T-2765-93

Date: 19980126

Docket: T-2765-93

IN THE MATTER of the Trade-Marks Act, R.S.C. 1985, c. T-13, s.57

IN THE MATTER of Canadian Trade-Mark Registration No. 366,164, PROLOGIC & Design, dated March 2, 1990

BETWEEN:

     PROLOGIC SYSTEMS LIMITED

     Applicant

     - and -

     PROLOGIC CORPORATION

     Respondent

     REASONS FOR ORDER

---

LUTFY J.:

[1]      This is a proceeding to expunge a registered trade mark.¹ The applicant seeks an order that the trade mark "PROLOGIC & Design" be struck from the register of trade marks on two principal grounds:

(a)      the respondent is not the person entitled to the registration of the trade mark "PROLOGIC & Design" because, at the date it first used or made known its trade mark on April 10, 1986, it was confusing with the trade mark "PROLOGIC" and the trade name "Prologic Systems Limited" both of which the applicant had previously used or made known in Canada within the meaning of paragraphs 16(1)(a) and (c) respectively of the Trade-marks Act; and

(b)      the registration of the trade mark "PROLOGIC & Design" is invalid because it was not, at the date of the institution of this proceeding on November 26, 1993, capable of actually distinguishing the respondent's services from those of the applicant within the meaning of paragraph 18(1)(b) and the definition of "distinctive" in section 2.

[2]      Since 1975, the applicant Prologic Systems Limited has been providing software and hardware computing and consulting services, including the provision of personnel, to meet the computer requirements of its clients. Its services include the design, implementation and maintenance of computer systems for the collection and distribution of information in various disciplines. The applicant operates from Ottawa and its principal customers are several departments of the federal government. By 1986, its gross revenues were $700,000 and by 1991 these were in excess of $5M.

[3]      Since 1985, the respondent Prologic Corporation has been licensing its software in the financial services sector. Most of its customers are credit unions, trust companies and foreign banks with Canadian operations although it has on occasion licensed its software to businesses outside this financial sector. Its software is used in a network of personal computers to retrieve, for example, all banking transactions in an institution with several branches. The respondent offers consulting services for the implementation of its software and the acquisition of the appropriate hardware. It has also sold computer hardware to its customers. The respondent's principal place of business is in British Columbia and its customers are in that province, Alberta, Manitoba and Ontario. The respondent has a branch office near Toronto since 1988 although there is little evidence as to the degree of its business activities in Ontario. By 1993, the respondent's sales were in excess of $5 million.

[4]      Prior to October 1996, the respondent's corporate name was Prologic Computer Corporation. Both companies are federally incorporated.

[5]      In March 1990, the respondent became the registered owner of the trade mark "PROLOGIC & Design" with a date of first use since at least as early as April 10, 1986 on services which were described as follows:

Operation of a business related to the development, licensing, installation, assembly, maintenance and distribution of computer software and hardware and consulting services with respect to computer software and hardware.

In July 1997, the respondent obtained an amendment to its statement of services concerning its trade mark. That statement now reads:

Operation of a business related to the licensing of computer software for operation of a financial services business.

The respondent's trade mark and Globe design is depicted as follows:

[6]      The applicant was unaware of the respondent's application for the registration of its trade mark. The registration issued in favour of the respondent without opposition.

[7]      A registered trade mark is presumed to be valid.² The burden is on the applicant to establish that the respondent's trade mark should be expunged.³ The party challenging the validity of the registration must establish a reputation in the trade under a style with which confusion may result.⁴ The applicant must show its use of its own trade mark or trade name prior to the registrant's date of first use and that the two competing marks are confusing one with the other.

[8]      In this case, there is ample evidence of use by the applicant of its trade names "Prologic Systems Ltd." and "Prologic" in the decade prior to the respondent's first use in 1986. There is also evidence of the recognition of these trade names by the applicant's clients and suppliers. However, the documentary evidence to support the applicant's bald assertion of its use of its trade mark PROLOGIC on its stationery, in correspondence, in advertising and in promotional literature between 1984 and the respondent's first use in 1986 is less convincing. Very few of the documents relied upon by the applicant appear to have been created prior to April 1986 and none discloses use of the trade mark in association with its services or wares.⁵ In summary, I am satisfied that the applicant has established its use of its trade names prior to the respondent's first use. The applicant's assertion of the use of its trade mark in the relevant time period was not subjected to cross-examination. Its assertion is neither corroborated nor contradicted by the documentary evidence. However, the test of the prior use of the trade mark or trade name in subsection 16(1) is in the alternative. I am satisfied that the applicant has met the threshold of establishing its use of its trade name or trade mark prior to the respondent's date of first use.

[9]      The criteria to determine whether the respondent's trade mark PROLOGIC & Design is confusing with the applicant's trade names "Prologic Systems Ltd." and "Prologic" are set out in subsections 6(3) and (5). These provisions are reproduced in Schedule "A" of these reasons. In making the determination concerning the likelihood of confusion, one assumes the use of the trade name or the trade mark in the same region. The likelihood of confusion may be established through evidence of actual confusion or through inference.⁶

[10]      In this case, the applicant's evidence of actual confusion is limited to four anecdotal instances between December 1989 and August 1992 concerning the applicant's acquisition of a computer printer, two communications it received from different directory publications and a telephone call from the respondent's apparent supplier of certain goods. None of these instances of actual confusion relates to the market place and the applicant's customers. In my view, this is not evidence of confusion as contemplated in section 6.⁷

[11]      The applicant, however, need not necessarily establish actual confusion.⁸ The applicant must show the likelihood of confusion if the simultaneous use of its trade name and the respondent's trade mark in the same geographic area or market place would be likely to lead to the inference that their respective services were supplied by the same person. This test was set out by the Court of Appeal in the Oshawa Holdings Ltd. case: ⁹

In discussing said s. 6, Dr. Fox states in Canadian Law of Trade Marks and Unfair Competition, 3rd ed. (1972) at p. 150:

The question to be asked is whether the use of a trade mark in the same area in which another trade mark or trade name is used would be likely to lead people to think that the wares or services associated with the two trade marks or associated with the business carried on under the trade name are the wares or services of the same person even though those wares or services may not be of the same general class.

I agree that the question above posed by Dr. Fox properly describes the essential elements of the statutory tests set out in s. 6. It is not necessary in my view for there to be actual use of the conflicting marks in the same area, nor for there to be evidence of actual confusion. The test of s-ss. (2) and (3) of s. 6 is not what has happened in fact but what inference would likely be drawn if the appellant and respondent did use the conflicting marks and trade names in respect of the different classes of goods in the same area.

[12]      It has also been said that the test is confusion from the point of view of the ultimate consumer, "an average person endowed with average intelligence acting with ordinary caution".¹⁰ Where two trade marks are the same word with the only difference being the addition of a design with one of the marks, the design itself will not necessarily eliminate the likelihood of confusion.¹¹ The Court should place itself in the position of a consumer who has only a general and not a precise recollection of the earlier mark and then sees the later mark by itself.¹²

[13]      In Hartco Enterprises Inc. v. Becterm Inc.¹³, Mr. Justice Dubé considered the use of two identical trade marks, except for one being spelled with a hyphen, where one user was a distributer of computer hardware and software and the other was a manufacturer and installer of highly sophisticated computers. Both businesses were based in the province of Quebec. Mr. Justice Dubé concluded that the use of the two trade marks would be confusing:

In the instant case, the trade marks being identical (except for the hyphen) there was clearly a likelihood of confusion at the time the respondent applied for the registration of the trade mark. Under the confusion criteria provided by s-s. 6(5) of the Act, the only criterion which might not be self-evident is the nature of the trade or the services or business, bearing in mind that the applicant is a distributor of standard computers to its own stores, whereas the respondent provides sophisticated custom-made computers to specific customers. That element, however, is not sufficient, in my view, to remove the obvious likelihood of confusion between the two marks used in association with computers. Although the nature of the trade is not similar, both marks are used in association with the same type of wares on the same market.

Moreover, the "raison d'être" of the Act is primarily to protect the public: there is a strong public interest in maintaining the purity of the register. Public interest ought to transcend rival claims between parties.

[14]      The applicant created "Prologic" as the operative word in its corporate name as a combination of the words "professional", "programming" and "logic". The respondent states that its mark PROLOGIC is an acronym for "programming logic" and similar to the name of a known programming language called "prolog". This latter word is in itself an acronym from programming in logic. In my view, "Prologic", as a trade name which resembles the word "prolog" and as an acronym of "programming logic", is not inherently distinctive. The applicant's use of its trade name has not become known to such a great extent as to increase substantially its distinctiveness. Similarly, the extent of the respondent's use of its trade mark has not enhanced its distinctiveness.

[15]      The applicant has used its trade name "Prologic" for some ten years prior to the respondent's first use of its trade mark.

[16]      There is some merit to the respondent's submissions that the nature of the services offered by the respective parties is not identical. The applicant and the respondent are both apparently successful small businesses serving a limited clientele in their respective regions. Their services, however, are not sufficiently different to avoid the likelihood of confusion. The companies provide programming and data processing services. Both engage in the development and maintenance of software. The differences that may exist in the services offered by the parties result from the specific and somewhat different needs of their clients. Neither the differences in the computer requirements between the financial services sector and federal government departments nor the respondent's decision to market its software through licensing constitute a distinction that would make the name "Prologic" less confusing if used in the same region by both parties. To paraphrase my colleague Mr. Justice Rothstein in Wellington County Brewery Ltd. v. Corby Distilleries Ltd.,¹⁴ the issue is not whether the applicant's services might be confused with the respondent's services but that the public might believe that both services originate from the same source.

[17]      Similarly, the Globe design which is depicted to the left of the respondent's trade mark PROLOGIC does not diminish the degree of resemblance with the applicant's trade name "Prologic" or its corporate name. More specifically, the Globe design would not sufficiently distinguish the parties' use of the same word in appearance, sound and the ideas they suggest. PROLOGIC is part of the computer programming vocabulary. If the applicant and the respondent were to operate in the same area, I am satisfied that clients with a general recollection of the first mark, when confronted with the other party's mark for the first time, would be likely to assume an association between the two marks. Customers will remember PROLOGIC, not the Globe design. There would be likelihood of confusion within the meaning of sections 6 and 16.

[18]      If it were necessary to deal with the applicant's second issue of distinctiveness, I would find that the trade mark PROLOGIC and Design does not distinguish the respondent's services from those of the applicant's.

[19]      This application is granted with costs. The trade mark PROLOGIC & Design will be struck from the register of trade marks.

    

Ottawa, Ontario      Judge

January 26, 1998

     SCHEDULE "A"

6(3) The use of a trade-mark causes confusion with a trade-name if the use of both the trade-mark and trade-name in the same area would be likely to lead to the inference that the wares or services associated with the trade-mark and those associated with the business carried on under the trade-name are manufactured, sold leased, hired or performed by the same person, whether or not the wares or services are of the same general class.

...

(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.

6(3) L'emploi d'une marque de commerce crée de la confusion avec un nom commercial, lorsque l'emploi des deux dans la même région serait susceptible de faire conclure que les marchandises liées à cette marque et les marchandises liées à l'entreprise poursuivie sous ce nom sont fabriquées, vendues, données à bail ou louées, ou que les services liés à cette marque et les services liés à l'entreprise poursuivie sous ce nom sont loués ou exécutés, par la même personne, que ces marchandises ou services soient ou non de la même catégorie générale.

...

(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.

__________________

     ¹      This application is made pursuant to sections 57, 58 and 59 of the Trade-marks Act , R.S.C. 1985, c. T-13. These sections allow "any interested person" to seek the expungement of a trade mark by filing in the Federal Court of Canada an originating notice of motion setting out full particulars of the grounds on which the relief is sought. The parties agree that the applicant is an "interested person".

     ²      Unitel Communications Inc. v. Bell Canada (1995), 61 C.P.R. (3d) 12 (F.C.T.D.) at 27.

     ³      Mr. P's Mastertune v. Tune Masters (1984), 82 C.P.R. (2d) 128 (F.C.T.D.) at 134; Everex Systems Inc. v. Everdata Computer Inc. (1992), 44 C.P.R. (3d) 175 (F.C.T.D.) at 180.

     ⁴      British American Bank Note Co. v. Bank of America (1983), 71 C.P.R. (2d) 26 (F.C.T.D.) at 35.

     ⁵      The applicant has produced ten documents to support its assertion of its prior use of its trade mark. Of the two documents clearly dated prior to April 1986, one is an Application for Employment form (exhibit 30) and the other is a letter created by one of the applicant's clients (exhibit 49). None of the other documents (exhibits 52, 57, 58, 59, 60, 61, 62 and 63) discloses a date of use of the trade mark prior to April 1986.

     ⁶      Oshawa Holdings Ltd. v. Fjord Pacific Marine Industries Ltd. (1981), 55 C.P.R. (2d) 39 (F.C.A.), discussed more fully infra, paragraph 12.

     ⁷      Gigi Inc. v. Bigi (Canada) Ltd. (1988), 21 C.P.R. (3d) 439 (F.C.T.D.) at 444; Ayotte v. Aliments Trans Gras Inc. (1990), 34 C.P.R. (3d) 17 (F.C.T.D.) at 23. See also Freed & Freed Ltd. v. Registrar of Trade Marks (1950), 14 C.P.R. 19 (Ex. Ct.) at 27 where the absence of actual confusion was not seen as important where there was no substantial contemporaneous use. The same may be said where contemporaneous use has been substantially in different regions by relatively small businesses.

     ⁸      Gigi Inc., ibid., at 444; Aliments Trans Gras Inc., ibid.,at 24.

     ⁹      Supra, note 6, at 42-3.

     ¹⁰      Canadian Schenley Distilleries Ltd. v. Canada's Manitoba Distillery Ltd. (1975), 25 C.P.R. (2d) 1 (F.C.T.D.) at 5.

     ¹¹      Cartier Men's Shop Ltd. v. Cartier Inc. (1981), 58 C.P.R. (2d) 68 (F.C.T.D.) at 73.

     ¹²      British Drug Houses Ltd. v. Battle Pharmaceuticals (1944), 4 C.P.R. 48 (Ex. Ct.) at 57-8.

     ¹³      (1989), 24 C.P.R. (3d) 223 (F.C.T.D.) at 229.

     ¹⁴      (1995), 92 F.T.R. 81 (F.C.T.D.) at 86. In relying on the Court of Appeal decision in Oshawa Holdings Ltd., supra, note 6, Rothstein J. stated: "The appellant says that because vodka [Grand Duke] and ale [Iron Duke] are not prime competitors, there is little or no likelihood of confusion. However, the issue is not whether the appellant's ale might be confused with the respondent's vodka but the public might believe that both products originate from the same source."