Date: 20030227
Docket: T-1552-99
Neutral citation: 2003 FCT 235
BETWEEN:
LABATT BREWING COMPANY LIMITED
LA BRASSERIE LABATT LIMITEE
Applicant
- and -
MOLSON CANADA
Respondent
REASONS FOR ORDER
MacKAY, J.
[1] The applicant appeals from a decision of the Trade-marks Opposition Board (the "Board") for the Registrar of Trade-marks, dated June 28, 1999, refusing the applicant's application to register as a trade-mark the words OLAND EXPORT. The parties agree that the primary issue on this appeal is whether registration of that trade-mark was properly refused on the basis that it is not distinctive.
[2] Oland Breweries, Limited/Les Brasseries Oland Ltée ("Oland"), the original applicant and the initial appellant from the Board's decision, is a corporation with its principal place of business in Halifax, Nova Scotia. It is a subsidiary of, and its name in the style of cause in this proceeding was changed to read, by Court Order, on consent, when this appeal was heard, LABATT BREWING COMPANY LIMITED LA BRASSERIE LABATT LIMITEE ("Labatt"). The respondent, Molson Canada ("Molson") is a partnership between Molson Inc. and Carling O'Keefe Breweries of Canada Limited, registered in the Province of Ontario.
[3] On August 23, 1990, Oland filed an application to register the trade-mark OLAND EXPORT for use in association with alcoholic brewery beverages, based on use since at least as early as March, 1976. Oland was required to and did disclaim the right to the exclusive use of the word EXPORT apart from the trade-mark. The parties in this proceeding agree that the word EXPORT is ordinarily a descriptive term.
[4] Oland's application was advertised in the Trade-marks Journal of July 24, 1991 and on September 30th, Molson filed a Statement of Opposition. The Statement of Opposition asserted four grounds, only one of which was upheld by the hearing officer on behalf of the Board following the hearing in June, 1999.
[5] That ground alleged by Molson was that the trade-mark claimed in the application was not distinctive and was not capable of distinguishing the wares in association with which it is alleged to have been used by the applicant from the wares of others including those of Molson, and the applicant's trade-mark was not adapted so as to distinguish them.
[6] In its decision, reported as Molson Breweries, A Partnership v. Oland Breweries Ltd./Brasseries Oland Ltee, (1997), 1 C.P.R. (4th) 239, the Board found inter alia, that the trade-mark OLAND EXPORT "is not adapted to distinguish the applicant's EXPORT beer from EXPORT beer sold by other brewers named Oland", relying upon Molson Companies Ltd. v. John Labatt Ltd. et al., (1981), 58 C.P.R. 157 (F.C.T.D.) (the "LABATT EXTRA decision"). The Board concluded that the applicant was seeking registration for a trade-mark comprising a surname, OLAND, and a clearly descriptive or non-distinctive term, EXPORT. Since the components of the proposed mark were not separately registrable, their combination was not registrable.
[7] Second, the Board noted that as of the end of 1990, EXPORT was distinctive of the opponent's beer in Ontario and Quebec, as found by Madam Justice Tremblay-Lamer in Molson Breweries, A Partnership v. John Labatt Ltd., (1998) 82 C.P.R. (3d) 1, 148 F.T.R. 281 (the "Initial EXPORT Appeal"). On that basis and "in view of the inherent weakness of the component OLAND", the Board concluded that the proposed OLAND EXPORT trade-mark would be confusing with the opponent's trade-mark EXPORT in Ontario and Quebec as of the date of filing of the opposition. Accordingly, since the applicant's trade-mark would have been confusing with Molson's trade-mark EXPORT in Ontario and Quebec as of that date, it was not distinctive of Oland's product in Canada.
[8] With respect to other grounds of opposition not sustained by the Board, certain of its findings are here said to be of interest, in particular,
1. that use by the applicant of the OLAND EXPORT ALE label design trade-mark (TMA 244,581) constituted use of OLAND EXPORT, the mark in issue; and
2. the applicant's proposed trade-mark is not confusing with any of the five Molson registered marks suggested by the respondent in opposition, which included in designs the word MOLSON or MOLSON'S with the word EXPORT.
[9] The "Initial EXPORT Appeal" was an appeal to this Court of a decision of the Trade-marks Opposition Board that had rejected Molson's application to register the trade-mark EXPORT for brewed alcoholic beverages. That is the EXPORT mark originally pleaded by Molson in opposition in this case. Labatt successfully opposed the EXPORT application before the Opposition Board. On appeal of the Board's decision, Madam Justice Tremblay-Lamer concluded that the evidence, including fresh evidence produced on the appeal, established that Molson's EXPORT trade-mark was distinctive in Ontario and Quebec. (see Molson Breweries, A Partnership v. John Labatt Ltd., (1998), supra.)
[10] The decision of Madam Justice Tremblay-Lamer was overturned on appeal to the Federal Court of Appeal, after the decision of the Opposition Board here under appeal. Speaking for a majority of the Court of Appeal, Mr. Justice Rothstein concluded that the term EXPORT was not in itself distinctive of Molson's product. The evidence showed that the word EXPORT always appeared in conjunction with the word MOLSON or MOLSON'S on bottles and cartons and there was no evidence of any reputation for use of EXPORT per se by Molson (see Molson Breweries, A Partnership v. John Labatt Ltd. (2000), 5 C.P.R. (4th) 180 (F.C.A.), leave to appeal to S.C.C. refused, (2000) 7 C.P.R. (4th), vi).
[11] Earlier, in 1996, Molson commenced an action for passing off against Oland in the Ontario Superior Court of Justice concerning the introduction by Oland of its OLAND EXPORT product in Ontario, which Molson alleged was confusing with its EXPORT brand beer. The matter was determined in January, 2001 by Mr. Justice Kealey who found that EXPORT by itself was not distinctive of Molson beer. It had not taken on a secondary meaning solely attributable to Molson. The action by Molson for alleged passing off was dismissed (see Molson Canada v. Oland Breweries Limited, [2001] O.J. No. 431 (S.C.J.), upheld (2002), 59 O.R. (3d) 607, [2002] O.J. No. 2029 (C.A.). Upon appeal, Mr. Justice Carthy, for the Court of Appeal, concluded that use of a registered trade-mark, unless it be shown to be invalid, is a defence to an action for passing off.
[12] The two decisions, by the Court of Appeal in 2000 and by the Ontario Superior Court of Justice in 2001 as affirmed by the Ontario Court of Appeal in 2002, have indirect significance for this appeal. At the very least, there is no longer any basis for argument that the mark OLAND EXPORT is not distinctive from, or is confusing with, the Molson's trade-mark EXPORT.
[13] The issues raised by the appellant are whether the Board erred by neglecting to consider the existing registered marks of Oland, including the word "OLAND's" and the words OLAND EXPORT ALE in a design label, and, even if that is found not to be an error, whether the additional evidence, filed on appeal pursuant to s-s. 56(5) of the Trade-marks Act, R.S.C. 1985, C.T-13, as amended (the "Act"), warrants reversing the decision of the Board and an Order that the proposed mark, OLAND EXPORT be registered. Those issues I now discuss in turn.
[14] As the parties agreed, the standard of review in considering decisions of the Registrar of Trade-marks is that settled by the Court of Appeal in John Labatt Ltd. et al v. Molson Breweries, A Partnership, (2000), 5 C.P.R. (4th) 180 (F.C.A.) at 196, that is,
...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 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 finding 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.
The reasonableness of the Board's decision
[15] The appellant, Oland, submits that the Board erred in its decision that OLAND EXPORT was not distinctive of the appellant's product. It is said the Board failed to consider the implications of the registered trade-mark "OLAND's" and the registered design mark OLAND EXPORT ALE, although it did consider that use of the latter was use of the mark OLAND EXPORT. In so doing, it failed to distinguish the LABATT EXTRA decision, and relied upon it to support its conclusion.
[16] I agree that the LABATT EXTRA decision is distinguishable on the facts. It was concerned with a proposed trade-mark, not with one for which use over some time was claimed as in this case. Further, in that case the applicant Labatt had disclaimed the word LABATT, leaving that only as a surname with the word EXTRA, a descriptive word, which Cattenach J. found not to be a registrable trade-mark. In this case, the word OLAND was not disclaimed, rather its possessive form "OLAND's" was itself a registered trade-mark. While those circumstances were recognized by the Board in its decision, its decision was based on the finding that there was not admissible evidence of use or reputation of the mark sought to be registered, at the relevant time, September 1991. Thus, there was no evidence on which a finding of distinctiveness could be based. Mere registration of a trade-mark was said to provide no proof of the extent that the registered work may have become distinctive in fact. There is no submission that the mark OLAND EXPORT should have been found to have been adapted to distinguish the appellant's wares from those of others. In the circumstances, on the record, before it, the Board's decision was reasonable in the absence of evidence of use or reputation of the trade-mark OLAND EXPORT. I am not persuaded that the result of the Board's decision was unreasonable.
Additional evidence filed on appeal
[17] Additional evidence, by sworn affidavits, was filed in this appeal by both parties. The only relevant evidence for this appeal is that concerning use or reputation of the trade-mark at the date of opposition, September 30, 1991. That evidence is essential, but in itself may not be the basis for a finding of distinctiveness, the key element of a trade-mark. The use or reputation must be such that the mark identifies to the consumer the wares with which it is associated with the producer of wares, in the sense that it distinguishes those wares from the wares of others. (The Act, s. 2)
[18] The appellant urges that the respondent, Molson, has not discharged the onus of an opponent to registration to demonstrate by evidence that the issue of distinctiveness should be considered. So far as there is any such evidentiary burden, it arises only after the appellant, Oland, has established by evidence that the mark it seeks to register is distinctive, or is adapted to distinguish its wares, from those of others. In this case, there is no submission that the words in the mark are adapted to distinguish Oland's wares. In regard to distinctiveness, Mr. Justice Evans noted in Novopharm Ltd. v. Bayer Inc. et al., [1999] F.C.J. No. 1661, [2000] 2 F.C. 553 (T.D.):
... the burden of establishing the distinctiveness of a mark rests on the applicant, both on the opposition proceeding before the Registrar and on an appeal to this Court.
[19] The additional evidence of Oland on this appeal, in my opinion, does establish the distinctiveness of the trade-mark OLAND EXPORT. That evidence, relevant to this issue, includes the affidavit and exhibits sworn by John Tilden, National Marketing Analyst of Labatt Brewing Company Ltd. and of its wholly-owned subsidiary, Oland, responsible for collecting corporate internal data on the sale of products of the two companies, and for maintaining permanent records of that information. He is also responsible, for both companies, for monitoring and compiling data relating to the volume of sales by competitors and market share of Labatt and Oland products. That and similar responsibilities with predecessor companies have been held by Mr. Tilden since 1979.
[20] Mr. Tilden's evidence of sales of OLAND EXPORT product is provided for the period 1972 to 1998 for the three Maritime Provinces and for sales in the period 1996 to 1998 in Ontario. Sales beyond September 30, 1991 are irrelevant to a determination of distinctiveness of the OLAND EXPORT trade-mark at the date of opposition filed by the respondent. However for the relevant period, up to 1990, Mr. Tilden's evidence is that in 1972 sales of OLAND EXPORT were 89,465 hectolitres for the three provinces (a hectolitre is equivalent to about 268 "pint" bottles of beer). In 1976 sales were 134,659 hectolitres for the three provinces, and in 1990 they were 54,550 hectolitres. By the last year sales were still about 10% of the market share in Nova Scotia. Total sales of OLAND EXPORT in the period 1972-1990 in the three Maritime Provinces were about 2,217,350 hectoliters, or 53,660,000 12-packs of "pint" bottles.
[21] The evidence supports the conclusion that sales of OLAND EXPORT beer by 1991 were significant in the Maritime Provinces, especially in Nova Scotia, i.e., by the year of the respondent's opposition. The respondent submits that evidence is only of limited sales and that even impressive sales, in the absence of any other evidence of distinctiveness, would not satisfy the applicant's burden of proving distinctiveness. That caution is drawn from Novopharm Ltd. v. Ciba-Geigy Canada Ltd., [2000] F.C.J. No. 509 (QL) at para. 17 (T.D.), 6 C.P.R. (4th) 224, where Mr. Justice Rouleau allowed an appeal from the Registrar's decision which had rejected an opposition to application to register as a trade-mark the colour (pink) and shape (round) of a tablet, despite evidence of significant sales. The learned judge found that there was an absence of other evidence of distinctiveness of a product in a market which included a variety of pink round tablets from various sources and for various purposes. That decision was upheld on appeal. (See Novopharm Ltd. v. Astra Zeneca AB (2001), 15 C.P.R. (4th) 327 (F.C.A.).) The caution is useful but it does not resolve the issue of distinctiveness in this case.
[22] The market for beer is different. Colour and shape of a product may have some influence with consumers, but the brand, always identified by the brewers mark, in my opinion has greater significance in the market for beer. Moreover, here the additional affidavits of Mr. Tilden and Mr. Beasley, filed on this appeal, include evidence based on corporate records relating to competitive brands, maintained by Tilden and referred to by him, which indicate that no other company has been known to use the word OLAND in association with brewed alcoholic beverages since at least 1979. Mr. Beasley, responsible for trade-mark matters, including records for Labatt and Oland, and responsible for dealing with any reports of confusion in the market place, avers that he is not aware of any products, apart from the appellant's, sold in Canada under a brand name that includes the word OLAND.
[23] The respondent argues that the word OLAND is primarily merely a surname, that can be found in numerous telephone books. I accept that it is a surname, but here there is no doubt it is also a word used in the registered trade-marks of the appellant, i.e. "OLAND's" and OLAND EXPORT ALE. The lack of known use in a trade-mark of the word OLAND by anyone other than the appellant for some years up to and including 1991 supports the applicant's claim to distinctiveness.
[24] Finally, the respondent argues that the proposed mark, comprising a surname (OLAND) and an additional component (EXPORT), a descriptive word, is not distinctive. Further, that is a conclusion of fact, uniquely within the competence of the Registrar, which the Court ought not to disturb.
[25] The proposed mark is OLAND EXPORT, it is not a claim to each of the component words but to the two words. The Opposition Board found that the mark had been used in the appellant's registered mark OLAND EXPORT ALE. Yet it found that there was no admissible evidence of use or distinctiveness as of 1991. In my opinion, that lack of evidence has been adequately addressed by the additional evidence introduced for this appeal by the applicant. That additional evidence, in my opinion, would have materially affected the Board's finding of fact or the exercise of its discretion. Indeed in its decision the Board commented, after setting out its conclusion that the proposed mark did not distinguish and was not adapted to distinguish Oland's wares from those of others,
... had the applicant been able to adduce admissible evidence showing significant use and advertising of its mark in Canada, the result might well have been different.
Conclusion
[26] While this Court finds that the Opposition Board did not err, in light of the evidence before it, in rejecting the appellant's application to register its proposed mark, the Court does find that additional evidence, adduced in this appeal pursuant to s-s. 56(5) of the Act, is such that had it been before the Registrar it would have materially affected the Board's findings of fact, particularly whether the appellant established that its mark was distinctive of its wares.
[27] Having considered the evidence before the Board and the additional evidence filed in this appeal the Court finds that the appellant has discharged the burden of proving that at the date of opposition on September 30, 1991, the proposed mark, OLAND EXPORT, was distinctive in relation to the appellant's brewed beer.
[28] The appeal is allowed. Exercising authority pursuant to s.-s. 56(5) of the Act, to exercise any discretion vested in the Registrar, by separate Order I allow the appeal and direct that the impugned decision of the Board be set aside and that the trade-mark, OLAND EXPORT as applied for, be registered in respect of the appellant's alcoholic brewery beverage.
[29] The appellant, Labatt, requested costs of this application, and the order provides that it shall have costs of the appeal only. Any costs related to proceedings before the Registrar are excluded from this award.
(signed) W. Andrew MacKay
____________________________
JUDGE
OTTAWA, Ontario
February 27, 2003
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