Dura Undercushions Ltd. v. Basf Corp., docket T-2131-97

Date: 19980917

Docket: T-2131-97

IN THE MATTER OF Sections 38 and 56 of the Trade-marks Act, R.S. 1985, c. T-13

AND IN THE MATTER OF an Appeal from the Decision Rendered on Behalf of the Registrar of Trade-marks Dated July 31, 1997 Relating to Serial No. 700,883, for the Trade-mark DURAPLUSH

BETWEEN:

DURA UNDERCUSHIONS LTD.

Applicant

(Opponent)

- and -

BSAF CORPORATION

Respondent

(Applicant)

REASONS FOR ORDER

CULLEN J.:

[1]      This is an appeal of the decision of the Registrar of Trade-Marks (the Registrar), dated July 31, 1997, in which the Registrar rejected the opposition of Dura Undercushions Ltd. (Dura) to the registration of the trade-mark DURAPLUSH, serial No. 700,883 (the trade-mark) for use in association with carpet underlay.

[2]      The respondent, BASF Corporation (BASF), is no longer pursuing its application to register the trade-mark. BASF advised the Registrar by letter dated December 1, 1997 that it was abandoning its application. On January 21, 1998, the Registrar confirmed that the application was being treated as withdrawn or discontinued. In these circumstances, BASF advised the court on July 30, 1998 that it would not be represented at this hearing.

[3]      Dura still pursues its appeal of the Registrar's decision of July 31, 1997 on the grounds that the Registrar made errors of fact and law in rejecting its opposition to BASF's application, which should not be permitted to stand. Dura filed a unilateral application for an order fixing the time and place of hearing, dated December 23, 1997, which was granted by order of Mr. Justice Hugessen on March 13, 1998.

ISSUES

[4]      1. Should the court hear this appeal?

2. Has Dura met its onus to demonstrate that the Registrar:

(a)      erred in appreciation of the facts or interpretation of the law; and

(b)      incorrectly found that BASF had established that the trade-mark was not confusing?

FACTS ON MERITS AND MOOTNESS

[5]      The facts, as alleged in the Notice of Appeal by Dura are as follows:

1. On March 13, 1992, the Respondent (Applicant) applied under serial No. 700,883 to register DURAPLUSH as a trade-mark for use in association with carpet underlay.

2. The Application asserted an effective filing date of November 27, 1991, based on a counterpart application in the United States of America.

3. The Application is based upon proposed use in Canada.

4. The Respondent's Application was advertised in the Trade-marks Journal pursuant to section 37(1) of the Trade-marks Act on September 30, 1992.

5. By Statement of Opposition dated March 29, 1993, and amended on April 7, 1993, the Respondent's Application was opposed by the Appellant on the following grounds:

(a)      The opponent is the owner of the following Canadian trade-mark registrations:

Reg. No.      Trade-mark          Wares

TMA134,075      DURA              Carpet underlays.

TMA119,362      DURACUSHION      Carpets, rugs, mats and matting, linoleums and other materials for covering floors.

TMA100,853      DURALAY          Carpets, rugs, mats and matting, linoleums and other materials for covering floors, and wall hangings (non-textile), but not including leather cloth.

TMA135,087      DURALUX          Rubber carpet undercushions.

TMA169,500      DURATREAD          Carpet underpadding.

The above trade-marks will be referred to in this Statement of Opposition as "the opponent's DURA marks".

(b)      The applicant's proposed trade-mark is not registrable because it is confusing with the opponent's DURA marks, and with each of them.

(c)      The applicant is not the person entitled to registration of the proposed trade-mark DURAPLUSH because, at the date of the filing of the application, it was confusing with the opponent's DURA marks, and each of them, which had been previously used in Canada, and also with the opponents' corporate name and trade-name, DURA UNDERCUSHIONS LTD., and its trade-name DURA UNDERCUSHIONS, both of which had also been used by the opponent in association with the sale of carpet underlay and related products.

(d)      The trade-mark is not distinctive, in that it is not adapted to distinguish, and does not distinguish, the wares in association with which it is proposed to be used from the wares in association with which the opponent has used and advertised its DURA marks, and its corporate name and trade-names referrred to above.

(e)      The original applicant, BASF CORPORATION, did not in fact intend to use the trade-mark in Canada, contrary to what was stated in paragraph 2 of the application as filed. Accordingly,

(i)      BASF CORPORATION was not a person entitled to registration of the trade-mark when the application was filed, and

(ii)      the application did not conform to the requirements of paragraph 30(e) of the Trade-marks Act.

[6]      In this appeal, Dura relies on grounds (a), (b), (c) and (d) of the Statement of Opposition.

[7]      By Counter Statement, dated July 8, 1993, BASF denied each allegation raised by Dura in the Statement of Opposition. Both parties filed written submissions and attended an oral hearing before the Trade-marks Opposition Board. By decision, dated July 31, 1997, the Registrar rejected each of Dura's grounds of opposition.

[8]      As stated in the Notice of Appeal, Dura submits the following points in issue with respect to the Registrar's decision:

(a)      he failed to recognize or give due weight to the Opponent's evidence of the use and advertisement of its DURA family of trade-marks and trade-names;

(b)      he incorrectly distinguished between the trade-marks SUPER DURA and DURA; in fact and in law, the trade-mark SUPER DURA is simply a variation of, and a use of, the basic trade-mark DURA;

(c)      he incorrectly found that "the opponent's trade-mark registration for DURACUSHION does not include the wares underlay"; in fact, the registration includes the wares "other materials for covering floors", which includes underlay;

(d)      he incorrectly gave weight to the finding that "the reputation acquired by the opponent's trade-names Dura Undercushions and Dura per se is limited to architects and commercial flooring contractors", given that the Appellant's registrations are not limited to such applications, nor does the Respondent's application exclude such applications;

(e)      he incorrectly gave weight to the finding that "the applicant's wares are primarily intended for residential purposes and are sold to the public by about 250 carpet retailers in Canada", since the Respondent's application is not limited to such applications;

(f)      he incorrectly listed DURAVINYL as a third-party trade-mark for floor tiles, when in fact it is a registered trade-mark owned by the Appellant; see Reischer affidavit, Exhibit B, registration No. TMA271,636;

(g)      he incorrectly gave weight to the state-of-the-register and the state-of-the-marketplace evidence regarding third party DURA marks and names, when not one of the third-party DURA marks and names was in the filed of underlay;

(h)      he incorrectly considered the issue of confusion from the point of view of the average retail consumer, rather than from the point of view of the average commercial or architectural consumer; in fact, both points of view should have been considered;

(i)      he incorrectly gave no weight to the opponent's evidence that it has taken steps to preserve its exclusivity in DURA marks in the field of underlay, and in fact owns the only DURA marks in that field in Canada;

(j)      he incorrectly rejected the second Nickerson affidavit as not constituting proper reply evidence;

(k)      he incorrectly found that "the opponent cannot claim any proprietary right to the prefix DURA", in fact DURA is a registered trade-mark of the Appellant for "carpet underlay", which means that it has the exclusive right to the use of that mark throughout Canada, which right cannot be impeached or questioned in this opposition proceeding;

(l)      he incorrectly found that "there is only one member in the opponent's > family' of marks (leaving aside its trade-names) that has acquired any significant degree of reputation, namely the mark DURACUSHION", and he incorrectly ignored the reputation accruing to the trade-names Dura Undercushion and Dura Undercushion Ltd.;

(m)      he incorrectly found that "there is no factual basis for the submission that the average consumer would infer that DURAPLUSH belongs to a family of marks owned by the opponent", and, in making that statement, he incorrectly ignored the point of view of the average commercial or architectural buyer;

(n)      in reaching his conclusion, he incorrectly took into account the fact that "the reputation acquired by the opponent's marks and trade-names is limited to architects and commercial flooring professionals", given that the Respondent's Application does not exclude that class of purchasers, and that he should have considered confusion from the point of view of that class of purchasers;

(o)      also in reaching his conclusion, he incorrectly gave weight to his finding that "the prefix DURA is common for makrs in the flooring trade";

(p)      in view of all the above errors, he incorrectly found that the applicant had met the onus on it to show that, at all material times, the applied-for mark DURAPLUSH was not and is not confusing with any of the opponent's marks or trade-names.

SPECIAL NOTE

[9]      The previous portion of the reasons is submitted to give the proper tone or background to the arguments on mootness and in light of my final determination it may have been unnecessary to include this part.

MOOTNESS

[10]      The first question is whether, in light of BASF's abandonment of the trade-mark in dispute, and the Registrar's acknowledgment of abandonment, this appeal is moot. Before hearing arguments on the merits, I raised the issue of mootness with counsel for the applicant, having regard to the abandonment of the application under opposition. I heard some preliminary arguments by counsel for the applicant, who then asked that he be permitted to file a written submission that the application should not be dismissed on the ground of mootness. The matter was adjourned sine-die , and on September 8, 1998 the Court received the appellant's written submission.

[11]      Though the respondent is no longer pursuing its application, the appellant contends that these are still issues that the Court should address on appeal.

[12]      The issue of mootness was addressed by Mr. Justice Sopinka in Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342 at page 353:

"The doctrine of mootness is an aspect of a general policy or practice that a court may decline to decide a case which raises merely a hypothetical or abstract question. The general principle applies when the decision of the court will not have the effect of resolving some controversy which affects or may affect the rights of the parties. If the decision of the court will have no practical effect on such rights, the court will decline to decide the case. This essential ingredient must be present not only when the action or proceeding is commenced but at the time when the court is called upon to reach a decision. Accordingly if, subsequent to the initiation of the action or proceeding, events occur which affect the relationship of the parties so that no present live controversy exists which affects the rights of the parties, the case is said to be moot."

[13]      Sopinka J. laid out the approach the courts should follow in determining mootness at pages 353 and 354:

First it is necessary to determine whether the required tangible and concrete dispute has disappeared and the issues have become academic. Second, if the response to the first question is affirmative, it is necessary to decide if the court should exercise its discretion to hear the case ... In [1944] S.C.R. 69">The King ex rel. Tolfree v. Clark, [1944] S.C.R. 69 ... Duff C.J., on behalf of the Court, held at p. 72:

"It is one of those cases where, the state of facts to which the proceedings in the lower Courts related and upon which they were founded having ceased to exist, the sub-stratum of the litigation has disappeared. In accordance with well-settled principle, therefore, the appeal could not properly be entertained."

[14]      In the present appeal, the application for registration of the trade-mark, which forms the basis of this litigation, has been abandoned. There is no longer any source of dispute, nor can the rights of either Dura or BASF be affected by the outcome of this appeal. In short, there is no longer any application or trade-mark in suit.

[15]      Dura submitted in a letter dated December 22, 1997 that the decision under appeal will continue to stand as a precedent which will adversely prejudice Dura in the future. This alone cannot be a sufficient reason for the court to exercise its discretion to hear the appeal. The exercise of discretion in this respect was set out by Sopinka J. in Borowski, supra, beginning at 358. He stated three rationales by which the court might continue to hear a matter, the first being that, since our legal system is premised on an adversarial model, the parties must be adverse in interest so their participation ensures that all issues and arguments are flushed out.

[16]      The parties here were, previous to the abandonment of the application for the trade-mark, adverse in interest. Before the Registrar they both submitted written argument and were, as the Registrar notes at page 2 of his decision, "ably represented by counsel at the oral hearing." However, I have some concern that the merits of this appeal, which is to some degree de novo , will not be fully explored, since BASF has chosen not to make representations. Although the court will hear appeals in which the respondent is not represented, for this reason, it does so with great reluctance: Bally Schuhfabriken AG v. Big Blue Jeans (1992), 41 C.P.R. (3d) 205 (F.C.T.D.) at pages 214 and 215. In Bally, Mr. Justice Rouleau had regard to the observations of Mr. Justice Cattanach in Canadian Schenley Distilleries Ltd. v. Canada's Manitoba Distillery Ltd. (1976), 25 C.P.R. (2d) 1, at pages 4 and 5:

"It is incumbent upon the appellant to establish that the Registrar was in error in deciding as he did. That places the Judge in the invidious position of ensuring that counsel for the appellant does so without the advantage of representations by counsel for the respondent. The Judge is therefore obliged to raise matters favourable to the respondent and unfavourable to the appellant requiring counsel for the appellant to meet the matters so raised by the Judge, as is the duty of the Judge to do so. To place the Judge in the position in which he is required to do this is almost tantamount to making him counsel for the respondent and that is why I have termed the position into which I was forced by the respondent's decision not to be represented as "invidious"."

[17]      The other reasons for exercising the discretion to hear a case in spite of the lack of the underlying dispute, were stated by Sopinka J. in Borowski, supra at page 360:

"The concern for judicial economy as a factor in the decision not to hear moot cases will be answered if the special circumstances of the case make it worthwhile to apply scarce judicial resources to resolve it.

The concern for conserving judicial resources is partially answered in cases that have become moot if the court's decision will have some practical effect on the rights of the parties notwithstanding that it will not have the effect of determining the controversy which gave rise to the action."

[18]      The appellant argues that mootness is not an issue because neither the respondent nor the Registrar of Trade-marks has raised the issue. Secondly, the respondent contends that the matter is not moot because there remains a controversy between the parties since the respondent's licensee is still using the trade-mark, the application for registration of which was deserted. Finally, the appellant claims that if the matter is moot, the Court should exercise its discretion to hear the matter.

ANALYSIS AND APPLICATION TO THE CASE AT BAR

[19]      To support its submission that mootness is not an issue in this matter, the appellant cites Canada Post Corporation v. Mail Boxes Etc. USA, Inc. ("Canada Post"), (1997) 78 C.P.R. (3d) 82 (F.C.T.D.), claiming its circumstances were "...exactly the same..." and that "...Madame Justice Reed considered that the order setting down the matter required her to hear the appeal."

[20]      I do not see any special circumstances in this appeal which would make it worthwhile to hear in light of the fact that no controversy survives between the parties. Dura offered no satisfactory reason in this regard. Although in its first ground of argument, Dura alleges that the Registrar in effect "impeached" its trademarks, there is no declaration to this effect, nor would this have been a viable remedy in the circumstances. Indeed, the idea that the Registrar's decision will prejudice Dura in respect to its DURA marks in the future, is highly suspect. Dura presumes that the decision it appeals is in some way determinative of future rights or prejudicial as a precedence in subsequent applications or oppositions, whereas, I think it is proper to presume that the Registrar would consider any future applications or oppositions on the particular merits and in accordance with the Act. There is, therefore, no practical effect the appeal has on the rights of Dura or BASF.

[21]      I question the submission that the Canada Post, supra , at page 84, decision is perfectly analogous to the case at bar. In my respectful opinion, Canada Post is distinguishable. In that case, there were other pending proceedings between the parties, to which the subject proceedings were directly relevant. In Borowski, supra, at page 353, the court stated that the doctrine of mootness applies "...when the decision of the Court will not have the effect of resolving some controversy which affects or may affect the rights of the parties." Madame Justice Reed likely recognized that deciding the matters at issue in Canada Post, supra , at least had the potential of resolving the other conflicts between the parties. In the case at bar, there are no other proceedings between the parties, therefore the appellant's argument that mootness is not an issue and that the case is not moot, fails.

[22]      The appellant also argues that the case is not moot because the Respondent's licensee, Woodbridge Foam Corporation ("Woodbridge") continues to use the subject trade-mark, and the Registrar's decision that the subject trade-mark is not confusing with that of the applicant is res judicata . In my respectful opinion, there are two issues to contemplate in this regard. Firstly, would a Court's decision overturning the Registrar's refusal to accept the appellant's opposition to the Respondent registering the trade-mark prevent Woodbridge from using the trade-mark? The original application for registration of the subject trade-mark lists the Respondent as the applicant rather than Woodbridge. Therefore, Woodbridge is not a party in this action and its continued use of the trade-mark is not in issue. Only if an eventual Court order prevented the Respondent and all of its licensees from using the trade-mark would the appellant's reasoning be logical. To prevent Woodbridge from using the trade-mark, the appellant can commence a trade-mark infringement action against Woodbridge, where both parties would be represented by counsel, releasing the judge from an invidious position.

[23]      Also, the facts in regard to Woodbridge's use of the trade-mark, such as date of first use and products and services that the mark is used in association with, likely differ from the facts at issue in the Registrar's decision. Therefore any determination regarding the Respondent will not necessarily apply to Woodbridge.

[24]      Finally, the appellant argues that even if the case is moot, it should be heard because third parties will cite the Opposition Board decision in other proceedings against the applicant. Again the applicant refers to Canada Post, supra, to support its submission, noting that the applicant in that case had the unfavourable Opposition Board decision cited against it in other proceedings. The applicant worries that third parties could cite the Opposition Board decision to "...justify incursions into [its] area of exclusivity."

[25]      However, Canada Post, supra, is again distinguishable because Madame Justice Reed was concerned with actual ongoing proceedings; here the Applicant is only referring to anticipated future proceedings, which will be decided according to their facts and on their own merits, with counsel present for each party.

[26]      Accordingly, I find that the matter is moot.     

OTTAWA, ONTARIO

September 17, 1998.      J.F.C.C.