JC Penney Co. Inc. v. Gaberdine Clothing Co. Inc., 2001 FCT 1333

Date: 20011204

Docket: T-282-00

Neutral citation: 2001 FCT 1333

BETWEEN:

                                                       J.C. PENNEY COMPANY, INC.

                                                                                                                                                    Applicant

                                                                              and

                                                   GABERDINE CLOTHING CO. INC.

                                                                                                                                               Respondent

                                                              REASONS FOR ORDER

NADON J.

[1]                 This is an application for the expungement of the trade-mark ARIZONA BLUES JEANSWEAR CO., registration no. TMA 439,567, registered in the name of the respondent. This application is brought pursuant to subsection 57(1) of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act), which states the following:

[2]                 The applicant requests that registration no. TMA 439,567 for the trade-mark ARIZONA BLUES JEANSWEAR CO., dated February 17, 1995, be declared invalid and that the registration be struck from the Register of Trade-marks. The applicant also requests costs.

[3]                 The respondent Gaberdine Clothing Company, Inc. is the current owner of registration no. TMA 439,567 for the trade-mark ARIZONA BLUES JEANSWEAR CO. The application to register the trade-mark was filed by the respondent's predecessor in title, 2779943 Canada Inc., on December 21, 1993, on the basis of proposed use in Canada. The application was advertised on July 13, 1994. The respondent's trade-mark was registered on February 17, 1995, in connection with the following wares:

Clothing for men, women and children, namely: outerwear, namely: jackets and coats; shirts, blouses, T-shirts, sweaters, vests, dresses, pants, jeans, skirts, shorts, underwear, boxers, lingerie, pyjamas, bathrobes, socks; shoes; accessories, namely: handbags, tote bags, purses, belts.

[4]                 The trade-mark ARIZONA BLUES JEANSWEAR CO. was assigned to the respondent on July 28, 1997.

[5]                 On December 1, 1995, the applicant J.C. Penney Company, Inc. applied to register the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY (application no. 798,730) on the basis of proposed use in Canada in connection with the following wares:

Clothing and clothing accessories.

[6]                 On January 30, 1998, the applicant applied to register the same trade-mark, THE ORIGINAL ARIZONA JEAN COMPANY (application no. 867,902), this time on the basis of use in Canada since at least as early as September 1990 in association with the following wares:

Trousers, shirts, sweaters, pants, shorts, shoes and accessories.

[7]                 By letter dated June 8, 1998, the Registrar of Trade-marks indicated to the applicant that its trade-mark did not appear registrable because it was confusing with the respondent's trade-mark.

[8]                 By letter dated February 15, 2000, the applicant advised the Registrar of Trade-marks that it was withdrawing its application. On that date, the applicant commenced the present proceedings to expunge the respondent's registration no. TMA 439,567. The applicant's application for expungement is based on the following grounds:

1.         the registered mark is not distinctive of the respondent, in that the registered mark does not actually distinguish the wares in association with which it is used by the respondent from the wares of the applicant, nor is it adapted so to distinguish them;

2.         the respondent was not the person entitled to secure the registration, pursuant to subsection 16(3) of the Act, in that:

(i)     at the filing date of the respondent's application, the applied for mark was confusing with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY, previously used or made known in Canada by the applicant.

[9]                 The issue for determination herein concerns only the second ground of attack. The applicant, in its Memorandum of Fact and Law, and before me, abandoned the first ground.

THE EVIDENCE

The Applicant's Evidence

[10]            The applicant filed affidavits from the following six persons in support of its application for expungement: P. Claire Gordon, Brian MacPherson, Fern Gereg, Jerry Rogers, Addy Grasley and Barbara Reid.

The Affidavit of P. Claire Gordon

[11]            The purpose of this affidavit is solely to introduce as evidence the official registration of the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. and the file history of the applicant's application no. 867,902 to register its trade-mark THE ORIGINAL ARIZONA JEAN COMPANY.

The Affidavit of Brian MacPherson

[12]            Mr. MacPherson is the Manager of the Catalogue Desk Expansion of the applicant. He has been employed by the applicant since 1974 and has held his present position since 1993. In his affidavit, Mr. MacPherson indicates the following:

-          the applicant owns and operates over 1,000 department stores throughout the USA and Puerto Rico (a list of the stores is attached as Exhibit B)

-          the applicant has enjoyed and continues to enjoy a substantial business in Canada by means of direct sales to Canadians

-          many Canadian customers of the applicant regularly purchase merchandise by telephone order after having reviewed the applicant's catalogues

-          thousands of the applicant's catalogues are mailed to Canadians each year

-          the applicant's web site at www.jcpenney.com receives hundreds of hits daily from Internet users in Canada (a copy of the home page is attached as Exhibit C)

-          the applicant started using the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in 1989 in association with trousers and jeans for men, women and children; in 1990, use of the trade-mark expanded to shirts, sweaters, pants and shorts (attached as Exhibit E are examples of labels used on THE ORIGINAL ARIZONA JEAN COMPANY brand merchandise over the years)

-          the applicant owns trade-marks in the United States and other countries for THE ORIGINAL ARIZONA JEAN COMPANY (a list of registrations for these trade-marks is attached as Exhibit D)

-          merchandise bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are sold both in the applicant's department stores and through its catalogue (Exhibits F1 to F20 show pages from various J.C. Penney catalogues showing THE ORIGINAL ARIZONA JEAN COMPANY merchandise on sale)

-          from launch in 1989 to 1999, worldwide annual sales of merchandise bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY total $5,711,924,933

-          advertising expenditures for THE ORIGINAL ARIZONA JEAN COMPANY brand merchandise for the period 1994-1999 were around $85 million

-          the applicant's catalogue department was able to retrieve microfiche copies of invoices for sales of THE ORIGINAL ARIZONA JEAN COMPANY brand merchandise shipped to 19 Canadian customers prior to December 21, 1993 (Exhibit G)

-          the applicant was also able to locate additional invoices evidencing sales of THE ORIGINAL ARIZONA JEAN COMPANY brand merchandise shipped to Canadians subsequent to December 21, 1993 (Exhibit H)

-          sales of THE ORIGINAL ARIZONA JEAN COMPANY brand merchandise to Canadians continue today.

The Affidavit of Fern Gereg

[13]            Ms. Gereg is Vice-President, Customer Service of PDS International Mail Service ("PDS"). She has worked for PDS, an international mailing and distributing company, since March 1987.

[14]            In her affidavit, Ms. Gereg indicates that one of PDS's customers is the applicant, and that she has worked on the applicant's account since 1990, overseeing and co-ordinating the mailing of the applicant's catalogues to Canadian addresses.

[15]            Ms. Gereg states that she has reviewed the applicant's records, including postal receipts and media tracking tables (Exhibit A). She mentions that from these records, she has determined that PDS has mailed over 550,000 Spring/Summer and Fall/Winter J.C. Penney catalogues to Canadian addresses since 1992.

The Affidavit of Jerry Rogers

[16]            Ms. Rogers is a housewife residing in the Town of Fort St. John, British Columbia. She indicates in her affidavit that she has been shopping at J.C. Penney in Canada, through the mail order catalogue, since about 1989.

[17]            Ms. Rogers states in her affidavit that she has received the applicant's catalogue at home for years and that she has purchased many clothing items from the catalogue which have been shipped directly to her home in Fort St. John.

[18]            Finally, she indicates that she purchased in 1992 a pair of THE ORIGINAL ARIZONA JEAN COMPANY brand jeans through the applicant's catalogue which were shipped to her home. Attached as Exhibit A to her affidavit is a copy of an invoice dated November 29, 1992 containing information concerning this purchase.

The Affidavit of Addy Grasley

[19]            Ms. Grasley is a self-employed resident of the Town of Stony Plain, Alberta. She indicates in her affidavit that she has been shopping at J.C. Penney in Canada, through the mail order catalogue, since about 1992.

[20]            In addition, Ms. Grasley states that she has received the applicant's catalogue at home for years and that over the years she has purchased many clothing items from the catalogue which have been shipped directly to her home in Stony Plain.

[21]            Finally, she indicates that in 1993 she purchased three pairs of THE ORIGINAL ARIZONA JEAN COMPANY brand jeans through the applicant's catalogue which were shipped to her home. Attached as Exhibit A to her affidavit is a copy of an invoice dated November 5, 1993 containing information concerning this purchase. Attached as Exhibit B to her affidavit is a picture of one of the pairs of jeans.

The Affidavit of Barbara Reid

[22]            Ms. Reid is the Director of Nursing at a long term care facility and resides in Timmins, Ontario. She indicates in her affidavit that she has been shopping at J.C. Penney in Canada, through the mail order catalogue, since about April 1991.

[23]            Ms. Reid states in her affidavit that she has received the applicant's catalogue at home for years which she shares with her neighbours who refer to it as the "bible" on account of the many items offered for sale that are not available in Canada. She also indicates that she has purchased many items from the catalogue, including clothing, towels, jewellery, shoes, etc.

[24]            In addition, attached as Exhibit A to her affidavit is a copy of excerpted pages from the 1990, 1992 and 1993 J.C. Penney catalogues. Ms. Reid indicates that on the excerpted pages there are shown listings for THE ORIGINAL ARIZONA JEAN COMPANY brand clothing. She mentions that she is familiar with this brand of clothing since over the years she has ordered THE ORIGINAL ARIZONA JEAN COMPANY brand jeans and shirts for her children from the applicant's catalogue, including, in April 1993, two pairs of THE ORIGINAL ARIZONA JEAN COMPANY brand jeans which she picked up at the J.C. Penney store in Las Vegas, Nevada.

[25]            Finally, Ms. Reid indicates that due to her familiarity with the applicant's catalogue, she can state without a doubt that THE ORIGINAL ARIZONA JEAN COMPANY trade-mark was well known to her prior to December 1993.

The Respondent's Evidence

[26]            The respondent filed the affidavits of Leonardo Scalera and of Christopher John Gauthier as evidence in these proceedings.

The Affidavit of Leonardo Scalera

[27]            Mr. Scalera is the President and sole beneficial shareholder of the respondent. In his affidavit, he indicates the following:

-          the respondent has its head office in the Town of Mount Royal, Quebec, and was incorporated on May 24, 1989 under the Canada Business Corporations Act (Exhibit A)

--          during the past 11 years, the respondent has been involved in designing, manufacturing, importing and selling of men's, ladies' and children's apparel

-          the respondent sells denim pants (jeans), denim jackets, denim shirts, denim shorts, shirts, crewneck t-shirts, polo t-shirts, pants, shorts, sweaters, outerwear jackets, underwear, boxer shorts and bathrobes

-          at the present time (May 2000), the respondent's sole customer, accounting for 100% of its total sales, is Price Costco Canada Inc. which has over 30 stores throughout Canada (attached as Exhibit C is a list of all of the Price Costco Stores in Canada)

-          one of the most successful private label brands launched by the respondent and by its predecessor in title, 2779943 Canada Inc. is the trade-mark ARIZONA BLUES JEANSWEAR CO. registered on February 17, 1995 and the trade-mark ARIZONA BLUES

-          since September 24, 1997, the respondent has owned Canadian trade-mark registration 439,567 for the trade-mark ARIZONA BLUES JEANSWEAR CO.

-          the trade-mark ARIZONA BLUES JEANSWEAR CO. was conceived by Mr. Scalera as a special label for Price Costco Canada Inc. in association with wearing apparel

-          the respondent and its predecessor have continuously used the trade-mark ARIZONA BLUES JEANSWEAR CO. and the unregistered trade-mark ARIZONA BLUES with respect to men's, ladies' and children's clothing imported and sold to the Price Costco retail outlets throughout Canada

-          attached as Exhibit D are boards comprising actual labels, hang tags and jean patch logos which have been applied to denim pants (jeans), denim jackets, denim shirts, denim shorts, shirts, crewneck t-shirts, polo t-shirts, pants, shorts, sweaters, outerwear jackets, underwear, boxer shorts and bathrobes; those labels exemplify the use of the trade-marks ARIZONA BLUES JEANSWEAR CO. and ARIZONA BLUES in Canada from 1993 to date

-          attached as Exhibit E is a compilation of fabrics, photographs, logos and sketches depicting the trade-marks as they have appeared on various garments as well as a variety of logos comprising the marks since 1993

-          attached as Exhibit F are invoices and purchase orders to Price Costco Canada Inc. relating to the sale of various items of clothing bearing the trade-mark ARIZONA BLUES JEANSWEAR CO. or ARIZONA BLUES

-          approximately 60% of the total sales made by the respondent or 2779943 Canada Inc. to Price Costco Canada comprise merchandise sold with labels and/or hang tags bearing the trade-mark ARIZONA BLUES JEANSWEAR CO. and/or ARIZONA BLUES; the approximate sales of such merchandise between 1994 and 1999 have been of $13 million

-          at various intervals, Price Costco Canada Inc. published catalogues of its wares including the respondent's merchandise which depicted the trade-marks ARIZONA BLUES JEANSWEAR CO. and ARIZONA BLUES.

The Affidavit of Christopher John Gauthier

[28]            Mr. Gauthier is an attorney employed by Gross, Pinsky, solicitors for the respondent.

[29]            Attached as Exhibit A to his affidavit is a certified copy of file history for the applicant's application no. 798,730 for registration of the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY. Attached as Exhibit B to his affidavit is a certified copy of a search report of the Canadian Trade-Mark Register with respect to the trade-mark ARIZONA in association with wearing apparel. Attached as Exhibit C to his affidavit is a certified copy of a search report of the Canadian Trade-Mark Register with respect to the trade-mark BLUES in association with wearing apparel.

ISSUE

[30]            This application raises the following issue:

­­1.         Was the respondent entitled to secure the registration for the trade-mark ARIZONA BLUES JEANSWEAR CO.?

SUBMISSIONS

The Applicant's Submissions

[31]            The applicant submits that the respondent was not entitled to secure the registration for the trade-mark ARIZONA BLUES JEANSWEAR CO. since, at the filing date of the respondent's application, the applied for mark was confusing with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY, which was previously used and made known in Canada by the applicant.

[32]            The applicant contends that in order to successfully expunge a registration on the grounds that the respondent was not entitled to secure the registration, the following must be considered:

1.         Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY previously used in Canada by the applicant?

2.         Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY previously made known in Canada by the applicant?

3.         If the answer to either 1. or 2. is yes, was the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. confusing with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY on December 21, 1993?

I.    Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY previously used in Canada by the applicant?

[33]            The applicant submits that the affidavit of Brian MacPherson provides direct evidence of sales and shipments of THE ORIGINAL ARIZONA JEAN COMPANY brand clothing to Canadians in Canada prior to December 21, 1993. The applicant also contends that the affidavits of Jerry Rogers and Addy Grasley corroborate in part Mr. MacPherson's evidence, since both prove that they purchased clothing bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY prior to December 21, 1993 which was shipped to their homes in Canada.

[34]            Therefore, the applicant submits that it previously used in Canada the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY prior to December 21, 1993.

II.    Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY previously made known in Canada by the applicant?

[35]            The applicant argues that with regard to paragraph 5(a) of the Act, the affidavits of Brian MacPherson, Jerry Rogers and Addy Grasley establish the extent to which clothing bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY was distributed in Canada prior to December 21, 1993.

[36]            The applicant submits that with regard to sub-paragraph 5(b)(i) of the Act, the affidavit of Brian MacPherson establishes that merchandise showing THE ORIGINAL ARIZONA JEAN COMPANY brand clothing has been prominently featured in Spring/Summer and Fall/Winter J.C. Penney catalogues each year since 1990. The applicant also contends that the affidavit of Fern Gereg provides evidence that over 160,000 Spring/Summer and Fall/Winter J.C. Penney catalogues were mailed to Canadian addresses in 1992 and 1993.

[37]            Furthermore, the applicant claims that the affidavits of Jerry Rogers, Addy Grasley and Barbara Reid prove that there are Canadians who received the J.C. Penney catalogue in Canada prior to December 21, 1993, and used the catalogue to purchase clothing merchandise bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY.

[38]            Consequently, the applicant submits that it has made known in Canada the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY prior to December 21, 1993.

III.    Was the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. confusing with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY on December 21, 1993?

[39]            Of the factors listed in subsection 6(5) of the Act, which must be considered to evaluate the likelihood of confusion, the applicant suggests that the most relevant as of December 21, 1993 are the length of time the trade-marks have been in use, the nature of the wares and the degree of resemblance between the trade-marks.

[40]            With respect to the length of time (para. 6(5)(b) of the Act), the applicant contends that this factor favours the applicant as it first used its trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in Canada since before December 21, 1993 and since the respondent had not used its trade-mark ARIZONA BLUES JEANSWEAR CO. as of that date.

[41]            As to the nature of the wares (para. 6(5)(c) of the Act), the applicant argues that this factor favours the applicant since the wares are identical.

[42]            With regard to the degree of resemblance between the trade-marks (para. 6(5)(e) of the Act), the applicant submits that, when consideration is given to the effect of the trade-marks as a whole, it is clear that the parties' marks look alike, sound alike and suggest the same idea. Therefore, according to the applicant, this factor is in its favour.

[43]            Finally, the applicant also submits that a relevant surrounding circumstance that should be considered is the fact that the Registrar of Trade-marks did not allow the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY to proceed to advertisement on the grounds that it was confusing with the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. The applicant contends that such a decision of the Registrar is entitled to substantial weight, having been made by an officer of the Department who was entrusted with the duty of making such decisions (Decision re: SOLAVOID Trade Mark, [1977] R.P.C. 1 at 28 (P.C.)).

[44]            Consequently, the applicant submits that as of the date of the respondent's application (December 21, 1993), the use of the parties' trade-marks in the same area was likely to lead to the inference that the wares associated with those marks originate with the same person, and that, accordingly, the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. was confusing with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY.

[45]            Therefore, the applicant contends that the respondent's trade-mark should be expunged pursuant to subsection 18(1) of the Act.

The Respondent's Submissions

[46]            The respondent maintains that it was the person entitled to secure the registration in Canada for the trade-mark ARIZONA BLUES JEANSWEAR CO. within the meaning of subsection 18(1) of the Act, and that the applicant's application for expungement must be dismissed.

[47]            The respondent contends that subsection 16(3) of the Act establishes a presumption that the respondent was entitled to secure registration in Canada of its trade-mark. The respondent also submits that the applicant has not met its burden of proving that at the date on which the respondent filed its application for registration, (1) the applicant's trade-mark was previously used in Canada within the meaning of section 16(3)(a) of the Act; (2) the applicant's trade-mark was made known in Canada within the meaning of section 16(3)(a) of the Act; and (3) the respondent's trade-mark was confusing with the applicant's trade-mark within the meaning of section 6 of the Act.

I. Did the applicant use the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in Canada prior to December 21, 1993?

[48]            The respondent submits that the applicant has failed to prove its use of the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in Canada prior to December 21, 1993.

[49]            The respondent points out that the applicant did not file its initial application to register its trade-mark in Canada until 1995, and that the applicant's initial application was made on the basis of proposed use only. The respondent argues that it is curious that it was not until January 30, 1998 that the applicant changed its position and filed its second application to register its trade-mark on the basis of a prior use thereof in connection with wares in Canada.

[50]            The respondent also claims that the applicant's evidence of prior use of its trade-mark in Canada falls short of what is required. According to the respondent, the applicant has no original documentary evidence of any use of the applicant's trade-mark in Canada during the relevant period. The respondent submits that the microfiche evidence produced by the applicant as Exhibit G to the affidavit of Brian MacPherson, respecting the sale and shipment of clothing bearing the applicant's trade-mark into Canada prior to December 21, 1993, is insufficient and unpersuasive, in that these documents do not make proof of their contents.

[51]            The respondent contends that none of the invoices produced as Exhibit G to the affidavit of Brian MacPherson make any reference in any manner to the applicant's trade-mark and that the applicant has provided no evidence that its trade-mark was affixed to any of the goods referred to in the invoices. The respondent submits that the mere reference to the applicant's trade-mark in the catalogues does not establish "use" thereof within the meaning of sections 2 and 4 of the Act (Clairol International Corporation and Clairol Inc. of Canada v. Thomas Supply & Equipment Co. Ltd., Fox's Canadian Patent Cases, Vol. 38, 176 (Ex. Ct.)).

[52]            With respect to the affidavits of Jerry Rogers and Addy Grasley, the respondent states that the applicant purports to depend on their recollection as to the exact dates on which their purchases were made, and that their allegations to the effect that they were shown copies of the invoices in question which were provided to them by the applicant, and that they confirm that the sales were made, is arguably unreliable evidence as to the dates upon which said purchases were effected (Robert C. Wian Enterprises, Inc. v. Mady (1965), 2 Ex. C.R. 3).

[53]            Moreover, according to the respondent, pursuant to subsection 4(1) of the Act, a trade-mark is deemed to be used in association with wares only if the property or possession of the wares is transferred "in the normal course of trade". The respondent claims that the affidavits of two individual purchasers attesting to two individual transactions in Canada are, at best, evidence of a few token sales and are insufficient to establish an inference that the sales were made in Canada within the normal course of the applicant's business (Sim & McBurney v. Majdell Manufacturing Co. Ltd. (1986), 11 C.P.R. (3d) 306 (F.C.T.D.); United Color and Chemicals Ltd. v. Sequa Chemicals, Inc. (1993), 53 C.P.R. (3d) 216 (F.C.A.)).

[54]            Finally, the respondent submits that the applicant has failed to demonstrate actual use of its trade-mark in respect of each of the wares with which it is allegedly associated.

II.    Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY made known in Canada by the applicant prior to December 21, 1993?

[55]            The respondent submits that the applicant has failed to prove that its trade-mark THE ORIGINAL ARIZONA JEAN COMPANY was made known in Canada prior to December 21, 1993.

[56]            The respondent submits that section 5 of the Act imposes the requirement that the applicant's trade-mark was "well-known" in Canada by reason of the distribution or advertising of wares in association with it. The respondent argues that the phrase "well-known" implies an immediate recognition of the trade-mark in connection with certain wares in more than one locality by more than a handful of people, and that for the trade-mark to be considered as "well-known", knowledge of the trade-mark must pervade the country to a substantial extent (Robert C. Wian Enterprises, Inc. v. Mady (1965), 2 Ex. C.R. 3; Marineland Inc. v. Marine Wonderland and Animal Park Ltd. (1974), 16 C.P.R. (2d) 97 (F.C.T.D.); United States Shoe Corp. v. Première Vision Inc. (1990), 33 C.P.R. (3d) 353 (T.M.O.B.)).

[57]            The respondent contends that the invoices produced by the applicant of direct sale to 19 Canadian purchasers of 31 items of clothing bearing the applicant's trade-mark (Exhibit G, MacPherson) constitute insufficient and unpersuasive evidence. The respondent also submits that the distribution of this insignificant number of articles to a small number of individuals is insufficient to establish that the applicant's trade-mark became "well-known" in Canada.

[58]            In addition, the respondent contends that the statement in Brian MacPherson's affidavit to the effect that merchandise showing the applicant's trade-mark was featured in the applicant's catalogue since 1990 does not in any way substantiate the applicant's claim that its trade-mark was well known in Canada prior to December 21, 1993 by reason of the circulation of its catalogue in Canada.

[59]            The respondent also submits that while the affidavits of three recipients of the applicant's catalogue (Jerry Rogers, Addy Grasley and Barbara Reid) may indicate that a small number of Canadians may have been made aware of the applicant's trade-mark at the relevant time, this evidence is insufficient to demonstrate that the applicant's trade-mark was "well-known" in Canada, either in a significant area of Canada or by a significant population, as a result of the mailing of catalogues (Casual Corner of America v. Casual Corner Ltd. (1985), 5 C.P.R. (3d) 503 (T.M.O.B.); Proctor & Gamble Co. v. Kiwi Polish Co. (Canada) Ltd. (1985), 5 C.I.P.R. 177 (T.M.O.B.); Brown Group, Inc. v. St. Thomas Marketing Inc. (1996), 72 C.P.R. (3d) 259 (T.M.O.B.)).

III.    Subsidiarily, was the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. confusing with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY?      

[60]            The respondent submits that its trade-mark was not confusing with the applicant's trade-mark at the relevant time within the meaning of section 6 of the Act, and that the applicant failed to produce any evidence of confusion in the mind of the public. The respondent maintains that the applicant failed to provide any evidence from witnesses who may have been confused by the trade-mark in question. The respondent submits that the absence of evidence of any instances of mistake or confusion by Canadian consumers is a relevant factor for the consideration of this Court (S.C. Johnson & Son, Inc. v. Esprit de Corp (1986), 13 C.P.R. (3d) 235 (F.C.T.D.); Saks & Co. v. Alphi Apparel Group Inc. (1997), 82 C.P.R. (3d) 100 (T.M.O.B.)).

[61]            With respect to the factors set out in subsection 6(5) of the Act, the respondent first submits that, with respect to distinctiveness, the applicant's trade-mark is not distinctive. According to the respondent, the applicant's trade-mark contains only the word ARIZONA which may be the object of the confusion. However, the respondent claims that the word ARIZONA is merely descriptive of a western style of apparel, and is not distinctive of the applicant's wares. The respondent submits that a trade-mark that is merely descriptive of a party's wares is considered to be inherently weak and will not justify an application to expunge a trade-mark registration (S.C. Johnson & Son, Inc. v. Esprit de Corp (1986), 13 C.P.R. (3d) 235 (F.C.T.D.)).

[62]            Moreover, the respondent contends that there are several companies which have been making use of a trade-mark or trade-name bearing the word ARIZONA, without confusion, and that the more often the word ARIZONA is used in the marketplace, the less the protection the applicant may be afforded (Kraft General Foods Canada Inc. v. Treetop Food Broker (1999), 86 C.P.R. (3d) 197 (F.C.T.D.); Restaurant Bar-B Inc. v. Bernard Matthews P.L.C. (1996), 69 C.P.R. (3d) 540 (T.M.O.B.); Molson Cos. Ltd. v. Corby Distilleries Ltd. (1987), 18 C.P.R. (3d) 55 (T.M.O.B.)); 80761 Canada Ltd. v. Reitman's (Canada) Ltd. (1994), 55 C.P.R. (3d) 529 (T.M.O.B.)).

[63]            The respondent also contends that while the applicant's trade-mark does not contain any clearly distinctive elements, the respondent's trade-mark contains the additional modifying element BLUES which clearly distinguishes its wares from those of the applicant.

[64]            As to the length of time in use, the respondent submits that little importance should be attributed to this consideration, as there is no evidence that the applicant's trade-mark had been in use in Canada prior to December 21, 1993 within the requirements of the Act, or, subsidiarily, that it had been used for a considerable period of time (Laurentide Chemicals Inc. v. Marchands Deco Inc. (1985), 7 C.P.R. (3d) 357 (F.C.T.D.)).

[65]            With regard to the nature of the wares and of the trade, the respondent submits that while the nature of the wares may be similar, the nature of the trades at the relevant time was not. The respondent's wares are sold exclusively to Costco Canada Inc., and, at the retail level, exclusively in stores owned by Costco Canada Inc. in Canada. On the other hand, the applicant's wares were marketed and sold in Canada exclusively by means of mail order catalogues. The respondent contends that it is unlikely that the Canadian public would have confused the respondent's wares with those of the applicant, which would have been associated solely with the applicant, and which were advertised and marketed as being available in Canada only by way of catalogue sales by the applicant, a United States company (Saks & Co. v. Alphi Apparel Group Inc. (1997), 82 C.P.R. (3d) 100 (T.M.O.B.)).

ANALYSIS

[66]            The applicant alleges that the respondent's trade-mark registration is invalid. Subsection 18(1) of the Act provides that the registration of a trade-mark is invalid if the applicant for registration was not the person entitled to secure the registration. The sub-section reads as follows:

[67]            It must be noted that under subsection 18(1) of the Act, the onus of proof is on the person seeking expungement to establish the invalidity of the registration, since a registered trade-mark is presumed to be valid (see Unitel Communications Inc. v. Bell Canada (1995), 61 C.P.R. (3d) 12 (F.C.T.D.) at 27).

[68]            In order to apply subsection 18(1) of the Act and determine whether a person was entitled to secure a registration, reference must be made to paragraph 16(3)(a) of the Act which provides the following:

[69]            Thus, a person is entitled to secure registration if its proposed trade-mark is not confusing with a trade-mark previously used or made known in Canada by another person. In the case at bar, the relevant date to assess confusion is the date on which the respondent filed its application, which is December 21, 1993.

[70]            However, before this Court can consider whether the respondent's trade-mark was confusing with the applicant's trade-mark on December 21, 1993, the applicant must establish that its trade-mark was previously used or made known in Canada.

I.    Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY used in Canada by the applicant prior to December 21, 1993?

[71]            Use of a trade-mark in association with wares is defined in subsection 4(1) of the Act, which reads as follows:

[72]            As I have already indicated, the onus is on the applicant to establish that it used its trade-mark in Canada prior to December 21, 1993. In Havana House Cigar & Tobacco Merchants Ltd. v. Skyway Cigar Store (1998), 81 C.P.R. (3d) 203 (F.C.T.D.), Teitelbaum J. reviewed the conditions which must exist in order to establish use of a trade-mark with respect to wares, at page 218:

As stated above, "use" is defined in section 2 and subsection 4(1) of the Trade-marks Act wherein a trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed, or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred. Thus, in White Consolidated Industries Inc. v. Beam of Canada Inc. (1991), 39 C.P.R. (3d) 94 (F.C.T.D.) at pages 108-9, I wrote that:

[i]n order to establish use of a trade mark with respect to wares, the following conditions must exist at the date of transfer of the property in or possession of the wares:

1. the mark must be a trade mark as defined in s. 2 [of the Trade-marks Act], that is, used for the purpose of distinguishing wares;

2. the mark must be associated with the wares so that notice of the association is given; and

3. the transfer of the property or possession therein must occur in the normal course of trade.

[73]            Teitelbaum J. also discussed the meaning of the "normal course of trade" in circumstances where the trade-mark owner is not Canadian, again at page 218:

Concerning the "normal course of trade", Heald J. noted in Manhattan Industries Inc. v. Princeton Mfg. Ltd. (1971), 4 C.P.R. (2d) 6 (F.C.T.D.) at pages 16-17 that with respect to the chain of sale from manufacturer to consumer:

if any part of the chain takes place in Canada, this is "use" in Canada within the meaning of s. 4.

[74]            Therefore, the evidence which is relevant in the case at bar is evidence of use in Canada before December 21, 1993. Evidence of use of the applicant's trade-mark in other jurisdictions is not relevant, nor is evidence of use of the applicant's trade-mark subsequent to December 21, 1993.

[75]            In addition, since there must be a transfer of the property in or possession of the wares in order for there to be use of the trade-mark, the applicant must adduce evidence of sales made to Canadians of wares bearing its trade-mark. Evidence of advertisement in Canada of the wares with which the trade-mark is associated is not sufficient to constitute use of the trade-mark, as held by Walsh J. in Parker-Knoll Ltd. v. Registrar of Trade Marks (1977), 32 C.P.R. (2d) 148 (F.C.T.D.) at pages 150 and 151:

The word "use" in theTrade Marks Act is defined in s. 2 thereof as " ‘use' in relation to a trade mark, means any use that by s. 4 is deemed to be a use in association with wares or services". Section 4(1) reads as follows: [...]

It has been established by the jurisprudence that advertising the trade mark in publications which circulate in Canada does not constitute use of the trade mark in Canada within the meaning of the Act. In Porter v. Don the Beachcomber (1966), 48 C.P.R. 280,[1966] Ex.C.R. 982, 33 Fox Pat. C. 79, Justice Thurlow, as he then was, stated at p. 287:

I shall therefore hold that "use in Canada" of a trade mark in respect of services is not established by mere advertising of the trade mark in Canada coupled with performance of the services elsewhere but requires that the services be performed in Canada and that the trade mark be used or displayed in the performance or advertising in Canada of such services.

This case was decided in connection with s. 4(2) of the Trade Marks Act dealing with services which reads as follows:

4(2) A trade mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of such services.

and therefore the respondent in that case would have been in a stronger position than the present appellant since s-s. (1) of s. 4 on which the present case must be decided does not even refer to advertising. Despite this Mr. Justice Thurlow held that mere advertising of services alone was insufficient unless such services were also performed in Canada.

A similar finding was made by Thurlow, J., in the case of Clairol Int'l Corp. et al. v. Thomas Supply & Equipment Co. Ltd. et al. (1968), 55 C.P.R. 176 at p. 190, [1968] 2 Ex.C.R. 552, 38 Fox Pat. C. 176, in which he held:

Pausing here it is, I think, apparent that the presence of the plaintiffs' marks on the defendants' packages is a use of those marks "in association with" the wares in the defendants' packages within the meaning of s. 4(1) because, and as I see it, simply because it is marked on the packages. The purpose for which it is there is, I think, irrelevant on this point which, as I read s. 4, raises only the question of association or no association and states that association is to be deemed to exist in the three defined cases. To my mind, however, the presence of the plaintiffs' marks on the comparative shade charts of the defendants' brochures is not a use of such marks within the meaning of s. 4(1) since the brochures are neither the wares themselves nor the packages in which the wares are distributed and nothing that I would regard as notice to any person purchasing the defendants' wares of any association of the plaintiffs' marks with those wares, so far as I am aware, ever occurs in any use to which the brochure or its chart can be put at the time of the transfer of the property or possession of the defendants' goods to their purchaser.

[76]            Consequently, evidence of distribution of the applicant's catalogue in Canada, in which wares bearing the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are advertised, is not relevant as the advertisement of the wares alone does not constitute use of the trade-mark.

[77]            In its submissions with respect to use of its trade-mark, the applicant relies mainly on what it considers to be evidence of sales and shipments of THE ORIGINAL ARIZONA JEAN COMPANY brand clothing to Canadians in Canada prior to December 21, 1993. This evidence is at Exhibit G to the affidavit of Brian MacPherson, as well as in the affidavits of Jerry Rogers and Addy Grasley. Exhibit H to the affidavit of Mr. MacPherson is not relevant in this case, since it only establishes sales to Canadians after December 21, 1993. The affidavit of Barbara Reid is also of no help to the applicant, since she indicates that the clothing which she purchased from the applicant was not delivered to her home, but rather picked up in the United States, in which case the sale cannot be considered as use of the trade-mark in Canada.

[78]            Exhibit G to the affidavit of Mr. MacPherson consists of 19 invoices which show the name and address of the customer, the list of products purchased by the customer and the price of the purchase. Each product is accompanied by a "Catalogue No.".The invoices are dated before December 21, 1993, and the customers all have Canadian addresses.

[79]            At paragraph 16 of his affidavit, Mr MacPherson indicates that the 19 invoices represent sales of 31 items of THE ORIGINAL ARIZONA JEAN COMPANY clothing. Since the clothing items are referred to in the invoices by catalogue codes and a very brief description, and none of the descriptions contain the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY, Mr. MacPherson includes at paragraph 16 a list of the customers, the date of the invoice, the catalogue numbers and the catalogue to which they refer. Photocopies of the catalogues are already attached as Exhibit F to his affidavit.

[80]            However, I have some difficulty with the link between the clothing items purchased, the catalogue and the use of the trade-mark. For example, Ms. Janet Hurley purchased items no. R523-2558E and R526-1185D, which according to the list at paragraph 16 of Mr. MacPherson's affidavit are featured in the Fall & Winter 1992 catalogue. These two items can be found in the J.C. Penney catalogue at Exhibit F (p. 452 of the applicant's record). The description for either item makes no reference to the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY, and it is not possible to tell from the picture in the catalogue associated with these items if they display the trade-mark. The same can be said for item HN523-8597E purchased by Ms. Wanda King, displayed in the catalogue at page 459 of the applicant's record, as well as for many other items.

[81]            In most of these cases, the trade-mark appears on the page of the catalogue which displays the items. However, in my view, this is not sufficient to demonstrate that the trade-mark was displayed on the items or associated with the items at the time of the transfer in the property of or possession in the items. Furthermore, nothing indicates that the customers received or consulted the catalogue; therefore it is not sufficient that the trade-mark only be displayed in the catalogue.

[82]            In my view, these invoices attest to the fact that clothing items were ordered from the applicant by customers in Canada. However, they do not establish in any conclusive manner that some or any of those clothing items displayed the applicant's trade-mark. The applicant does not explain to this Court where the trade-mark would be displayed or how it would be associated to the particular items which were ordered. Mr. MacPherson simply states in his affidavit that Exhibit G contains invoices for sales of THE ORIGINAL ARIZONA JEAN COMPANY brand clothing shipped to Canadian customers. This simple affirmation is, in my view, far from sufficient to establish use of the applicant's trade-mark in Canada, particularly when one considers the evidence submitted. Even if the clothing items were of THE ORIGINAL ARIZONA JEAN COMPANY brand, this does not necessarily lead to the conclusion that the trade-mark was displayed on these items at the date of the transfer of the property in or possession of the clothing items.

[83]            In addition, the invoices do not clearly indicate whether the products were delivered to the Canadian addresses or whether they were picked up at one of the applicant's stores in the United States. As indicated previously, if the clothing items were delivered to the customers in Canada, this can be considered as use of the trade-mark in Canada. However, if the items were picked up in the United States, it is not considered to be use of the trade-mark in Canada. In Saks & Co. v. Canada (Registrar of Trade Marks) (1989), 24 C.P.R. (3d) 49 (F.C.T.D.), a similar situation arose and similar evidence was introduced. Addy J. made the following comments with respect to the importance of establishing whether or not the merchandise was delivered to the customers in Canada, at page 52:

Because only certain categories of the original records were preserved by the appellant, it was impossible for it, through its computerized records, to produce by computer analysis proof of actual receipt of the delivery of goods in Canada. Because delivery documents were not available, it was also difficult to distinguish between goods which might have been sold to Canadian customers where delivery was taken in the United States, which of course would not constitute use in Canada, from those goods where deliveries were taken in Canada, which would constitute such use.

[84]            The lack of evidence of delivery in the case at bar makes the determination of use very difficult.

[85]            Therefore, in my view, the invoices shown at Exhibit G to Mr. MacPherson's affidavit are not sufficient to establish use of the applicant's trade-mark prior to December 21, 1993. The invoices do not prove that the requirements of subsection 4(1) of the Act were met, namely that at the time of the sale of the wares, the trade-mark was associated with the wares so that notice of the association was given.

[86]            The other evidence adduced by the applicant to establish use of its trade-mark are the affidavits of Jerry Rogers and Addy Grasley. Ms. Rogers states that she purchased in 1992 a pair of THE ORIGINAL ARIZONA JEAN COMPANY brand jeans through the applicant's catalogue, which was sent to her home in British Columbia. The invoice attesting to the date of that purchase is attached to her affidavit. Ms. Grasley states that she purchased three pairs of THE ORIGINAL ARIZONA JEAN COMPANY brand jeans through the applicant's catalogue which were shipped to her home in Alberta. A copy of the invoice as well as a picture of one pair of jeans are attached.

[87]            There is nothing to indicate that these sales did not take place as described by the affiants. Therefore, having established that these two purchases were made and that the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY was affixed to the clothing as illustrated by the picture attached to Ms. Grasley's affidavit, the applicant must demonstrate that use of its trade-mark was "in the normal course of trade". In other words, the question is whether evidence of two individual sales is sufficient to constitute use of the trade-mark in the normal course of trade in Canada.

[88]            It is widely accepted that, in the context of a section 45 expungement proceeding, evidence of a single sale during the required period is sufficient to establish use of the trade-mark. In Philip Morris v. Imperial Tobacco et al (1987), 13 C.P.R. (3d) 289, McNair J., at page 293, made the following remarks:

It is well established that the purpose and scope of s. 44 is to provide a simple, summary and expeditious procedure for clearing the register of trade marks which are not bona fide claimed by their owners as active trade marks. The procedure has been aptly described as one for removing "deadwood" from the register. The section does not contemplate a determination on the issue of abandonment but rather simply places on the registered owner of the trade mark the onus of furnishing evidence of use in Canada or of special circumstances excusing non-user. The registrar's decision is not one that finally determines substantive rights but only whether the trade mark entry is liable to be expunged under s. 44 or not. If user is relied on then the evidence filed in response to the notice must "show" the use or, at least, sufficiently relate the facts from which such use can be inferred. Mere statutory tracking in the nature of a bare statement that the registrant was currently using the trade mark in the normal course of trade in association with the wares is insufficient to establish user unless coupled with facts that are descriptively corroborative of the same. Evidence of a single sale, whether wholesale or retail, in the normal course of trade may well suffice so long as it follows the pattern of a genuine commercial transaction and is not seen as being deliberately manufactured or contrived to protect the registration of the trade mark. Evidence in response to a s. 44 notice should be forthcoming in quality, not quantity, and there is no need or justification for evidentiary overkill. ... (Emphasis added)

[89]            However, in the case at bar, the proceedings are based on subsection 16(3) of the Act. In Mr. Goodwrench Inc. v. General Motors Corp. (1994), 55 C.P.R. (3d) 508 (F.C.T.D.), the issue was whether a single use of a trade name three years before the filing date satisfied the requirement for previous use in paragraph 16(2)(c) of the Act. Simpson J., at pages 512 and 513, made the following remarks:

MGI submits that the Sale satisfies the requirements for previous use in section 16(2)(c) of the Act because the section is silent about the extent of use and contains no requirements for repeated, regular, or continuous use. As well, it is argued that the section is silent about the timing of the last use. For that reason, it is suggested that this court may find that a single use three years before the Filing Date meets the statutory requirement.

In support of these propositions, MGI relies on the decision of Noêl J. of the Exchequer Court in Gordon A. MacEachern Ltd. v. National Rubber Co. (1963), 41 C.P.R. 149, 39 D.L.R. (2d) 668, [1964] Ex. C.R. 135 ("MacEachern"). That case involved an application to expunge the registration of a mark pursuant to s. 16(3) of the Trade Marks Act, 1952-53 (Can.), c. 49 on the basis that, at the date of filing the application for registration, the trade mark proposed for registration was confusing with the applicant's mark which had been previously used in Canada. The question was whether the applicant's mark had been previously used. MGI argued that, in MacEachern, two small sales of floor mats valued at approximately $100 each which occurred 10 months prior to the filing date were accepted as previous use.

I do not agree that, on a fair reading of MacEachern, those two small sales alone were accepted as previous use. The evidence was that substantial sales were made in the 14 months before the filing date. However, only two invoices were produced. On this topic the court said (at p. 155):

In my opinion, the expression in the affidavit "has since that time made substantial sales" implies sales going on at the time of the signing of the affidavit and that these sales have been made over the period between the time of the first sale to the time that the affidavit was sworn to.

Contrary to MGI's submission, MacEachern appears to stand for the proposition that substantial and continuous use constitutes previous use. It does not, as MGI argues, support the proposition that two small sales made 10 months before the filing date, justify a finding of previous use.

MGI also relied on the decision in Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 2) (1987), 17 C.P.R. (3d) 237, 15 C.I.P.R. 194, 9 N.R. 76 (F.C.T.D.). This case concerned s. 44 (now s. 45) of the Act. It is a section which provides a summary procedure for clearing the Register of trade mark registrations that have fallen into disuse. In his decision in Philip Morris Inc., 13 C.P.R. (3d) 289, 10 C.I.P.R. 224, 3 A.C.W.S. (3d) 109 (F.C.T.D.), that "evidence of asingle sale in the normal course of trade, whether wholesale or retail, may suffice". That decision also concerned the appropriate definition of "use" for the purpose of an application under s. 44 of the Act.

The question is whether Mr. Justice McNair's decision, which indicates that a single sale may constitute use for the purpose of s. 44, should automatically apply to cases involving s. 16 of the Act. I have concluded that a single sale would be unlikely to suffice for the purpose of s. 16. The onus on an incumbent registrant to justify continued registration with previous use under s. 44 should logically be less than the onus on a party who wishes to demonstrate previous use under s. 16(2)(c) of the Act in order to block an otherwise appropriate registration. In this case a single use three years before the filing dates does not suffice.(Emphasis added)

[90]            In the case at bar, the applicant seeks to demonstrate previous use under paragraph 16(3)(a) of the Act in order to obtain the expungement of the respondent's trade-mark. For the reasons that follow, I am of the view that the applicant has succeeded in showing previous use.

[91]            I cannot agree, as a matter of principle, with Simpson J.'s assertion in Mr. Goodwrench, supra, that " ... a single sale would be unlikely to suffice for the purpose of section 16." Use of a trade-mark is not, in my view, synonymous with commercial success of the wares associated with the trade-mark. Perhaps the following examples will highlight my point. What of the trader who puts wares in the major department stores in Canada, but over the course of a few years, and in the normal course of his trade, the trader is only successful in selling a few items. Because the wares did not sell well, does this preclude the trader from protecting his trade-mark? What of the trader who is in a business where the nature of the business and the subject matter of the wares dictate that sales of items happen infrequently - perhaps one or two sales a year? Because the nature of the trade only allows a limited number of sales per year, should the Act preclude the trader from protecting his trade-mark?

[92]            Consequently, use of a trade-mark cannot be measured by the number of sales or the quantity of wares sold in association with the trade-mark. That is why, in my view, a single sale may suffice to prove use of a trade-mark. The sale or sales must be examined in the light of all of the surrounding circumstances. The Act does not impose any requirements concerning the length or extent of use of the trade-marks. Subsection 4(1) of the Act simply requires that the trade-mark be used in association with wares in the normal course of trade. That is the reason why, in my view, sales that have been found to be "token" sales, sales to related companies, free delivery of samples, and pro-forma transfers, do not meet the requirements of "in the normal course of trade". The Act does not require an applicant to show extensive use of substantial use of its trade-mark. The issue is whether the sales on which the applicant relies are sufficient to show use by the applicant of its trade-mark.

[93]            It cannot be disputed, in my view, that the applicant's sales were made in the normal course of trade. The sales must be examined in the light of all of the surrounding circumstances, namely: (1) the applicant has hundreds of cardholders with Canadian home addresses; (2) thousands of the applicant's catalogues are mailed to Canadians every year; (3) the applicant began using THE ORIGINAL ARIZONA JEAN COMPANY trade-mark in 1989 in association with trousers and jeans for men, women and children; (4) the wares associated with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are sold in the applicant's department stores in the United States and through its catalogues to customers elsewhere and, in particular, in Canada; (5) the wares associated with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are prominently displayed and on sale in the applicant's catalogues. I also note that there is evidence that the applicant still ships its catalogues to Canada, sells its wares to Canadians through a mail-order system, and delivers such wares to the homes of Canadian purchasers. The post-December 21, 1993 evidence is relevant to an inquiry, when determining if there has been use in the "normal course of trade". Using pre- and post-December 21, 1993 evidence, I am of the view that the applicant has used its trade-mark in the normal course of trade, and not just in a token or contrived fashion. I am cognizant of the fact that when determining if use has been established by the applicant, evidence of use post-December 21, 1993, is irrelevant. While determining if there has been use in the normal course of trade, I am entitled to take into account evidence of use arising post-December 21, 1993.

[94]            I am, therefore, satisfied that the applicant used its trade-mark in Canada prior to December 21, 1993.

II.    Was the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY made known in Canada by the applicant prior to December 21, 1993?

[95]            The issue of whether or not a trade-mark has been made known in Canada is governed by section 5 of the Act, which reads as follows:

[96]            In Robert C. Wian Enterprises, Inc. v. Mady, [1965] 2 Ex. C.R. 3, Cattanach J. stated the following with respect to when a trade-mark is well known in Canada, at page 28:

It was argued that, if [the plaintiff's trade-marks] were well known in any part of Canada, they were "well known in Canada" within s. 5 of the Trade Marks Act. I cannot accept this view. A thing may be regarded as known in Canada if it is known only in some part of Canada but, in my view, it is not "well known" in Canada unless knowledge of it pervades the country to a substantial extent. [emphasis is mine]

[97]            In the case at bar, this issue does not require a lengthy discussion. In my view, there is insufficient evidence to establish that the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY was well known in Canada prior to December 21, 1993 and that knowledge of the trade-mark pervaded the country to a substantial extent.

[98]            The evidence to the effect that 31 items of clothing of THE ORIGINAL ARIZONA JEAN COMPANY brand were sold to 19 Canadian customers is not sufficient. At most, it establishes that 19 persons in Canada were familiar with the trade-mark, which is far from being a substantial number.

[99]            The applicant also adduced evidence to the effect that the applicant's trade-mark was advertised in its catalogue which was sent to Canadians. According to the affidavit of Fern Gereg, approximately 183,000 catalogues were sent to Canadians before December 21, 1993. There is no evidence to the effect that the catalogues were read by the recipients or that the recipients, after reading the catalogue, became familiar with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY, or even saw the trade-mark displayed in the catalogue.

[100]        Finally, while the affidavits of Jerry Rogers, Addy Grasley and Barbara Reid establish that they were familiar with the applicant's trade-mark at the relevant time, familiarity of three persons with the trade-mark is clearly insufficient to demonstrate that knowledge of the applicant's trade-mark pervaded Canada to a substantial extent.

III.    Was the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. confusing with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY on December 21, 1993?

[101]        The test to determine whether a trade-mark causes confusion with another trade-mark is set out in subsection 6(2) of the Act, which reads as follows:

[102]        In an expungement proceeding, the onus to prove confusion lies with the party alleging confusion, in this case, the applicant. In assessing confusion, it is not necessary that there be evidence of actual confusion. Likelihood of confusion is all that is necessary. In Prologic Systems Ltd. v. Prologic Corp. (1998), 78 C.P.R. (3d) 435 (F.C.T.D.), also an expungement proceeding, Lutfy J. stated the following with respect to the issue of confusion, at pages 439 and 440:

The applicant, however, need not necessarily establish actual confusion. 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:

In discussing said s. 6, Dr. Fox states in Canadian Law of Trade Marks and Unfair Competition, 3^rd 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.

It has also been said that the test is confusion from the point of view of the ultimate consumer, "the average person endowed with average intelligence acting with ordinary caution". 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. 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. [footnotes omitted]

[103]        In determining the likelihood of confusion, this Court must have regard to the factors set out in subsection 6(5) of the Act, which states the following:

[104]        As indicated in subsection 6(5), the Court must consider all surrounding circumstances, including the listed factors. The weight given to each factor will also vary from case to case. In Pink Panther Beauty Corp. v. United Artists Corp., [1998] 3 F.C. 534 (C.A.), the Federal Court of Appeal stated the following, at page 556:

Where the surrounding circumstances are also important is in determining how much weight each of the enumerated factors should be given. In Polysar Ltd. v. Gesco Distributing Ltd., Joyal J. considered the question of the flexibility given to the Court or the Registrar in assessing the significance of each factor listed under subsection 6(5). He stated:

Of particular relevance to the criteria outlined in s-s. 6(5) of the statute is the principle that they need not be interpreted as having equal weight. Each particular case of confusion might justify greater significance being given to one criteria than to others.

Thus, in each particular set of circumstances, the Court or Registrar must be aware that the significance of these factors must be gauged anew. [footnotes omitted]

[105]        I will therefore begin by examining the factors listed in subsection 6(5) of the Act.

The inherent distinctiveness of the trade-marks and the extent to which they have become known (6(5)(a))

[106]        With respect to the first criteria, the Federal Court of Appeal stated the following in Pink Panther Beauty Corp., supra, at page 550:

The first item listed under subsection 6(5) is the strength of the mark. This is broken down into two considerations: the inherent distinctiveness of the mark, and the acquired distinctiveness of the mark. Marks are inherently distinctive when nothing about them refers the consumer to a multitude of sources. Where a mark may refer to many things or, as noted earlier, is only descriptive of the wares or of their geographic origin, less protection will be afforded the mark. Conversely, where the mark is a unique or invented name, such that it could refer to only one thing, it will be extended a greater scope of protection.

Where a mark does not have inherent distinctiveness it may still acquire distinctiveness through continual use in the marketplace. To establish this acquired distinctiveness, it must be shown that the mark has become known to consumers as originating from one particular source.

[107]        The trade-mark THE ORIGINAL ARIZONA JEAN COMPANY possesses, in my view, a certain amount of inherent distinctiveness. It is an invented expression which is not exclusively descriptive and which is composed of a series of words which are not normally found grouped together. As pointed out by the respondent, the word ARIZONA can be descriptive of a western style of clothing and is used often in the marketplace; however, it is found here in the context of a unique expression and not simply as an adjective to a single word. Therefore, in my view, the presence of the word ARIZONA in the applicant's trade-mark does not render the expression less distinctive.

[108]        In any event, the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. also comprises the word ARIZONA, which has the same effect in that phrase. In my opinion, the respondent's trade-mark is also inherently distinctive to a certain degree, as it is composed of a unique series of words grouped together.

[109]        In my view, however, one trade-mark is not more inherently distinctive than the other. I do not agree with the respondent's submission to the effect that the word BLUES, which is found in its trade-mark but not in the applicant's trade-mark, is a clearly distinctive element which clearly distinguishes the respondent's wares from the applicant's wares. Both trade-marks are invented expressions and contain similar terms; the word BLUES in the respondent's trade-mark does not, in my opinion, make it more inherently distinctive than the word ORIGINAL in the applicant's trade-mark.

[110]        As for acquired distinctiveness, or the extent to which the trade-marks have become known, in my view the use by the applicant and by the respondent of their trade-marks has not caused them to become known to such an extent as to increase substantially their distinctiveness. It has not been clearly shown, in my opinion, that either trade-mark "has become known to consumers as originating from one particular source" (see Pink Panther Beauty Corp., supra at page 550) in such a substantial way as to increase their distinctiveness. Therefore, this factor does not favour either party.

The length of time the trade-marks have been in use(6(5)(b))

[111]        With respect to the length of time that the trade-marks have been in use, this favours slightly the applicant, as it has been established that it had been using its trade-mark since 1992, a year before the respondent applied to register its trade-mark.

The nature of the wares, services or business(6(5)(c))

[112]        As to the third factor, at page 550 of Pink Panther Beauty Corp., supra, the Federal Court of Appeal stated the following:

Clearly, where trade-marks are similar, the degree to which the wares or services which bear those marks are similar will be a large factor in determining whether confusion is likely to result. Similarity in wares or services cannot be a sine qua non in a determination of confusion, as subsection 6(2) dictates that confusion may result "whether or not the wares or services are of the same general class". However, the ultimate test is confusion, and where one product does not suggest the other it will be a strong indication that confusion is unlikely. The nature of the wares, services and business, therefore, though not always controlling, are certainly of significance. [...]

[113]        In the case at bar, the wares are similar. Both statement of wares include pants, shirts, sweaters, shorts, shoes and accessories.

The nature of the trade (6(5)(d))

[114]        With respect to the fourth factor, the nature of the trade, it is explained by the Federal Court of Appeal in Pink Panther Beauty Corp., supra, in the following way, at pages 552 and 553:

Similar to the nature of the wares or services is the consideration of the nature of the trade in which those wares or services circulate. The risk of confusion is greater where the wares or services, though dissimilar, are distributed in the same type of stores or are of the same general category of goods. [...]

The nature of the trade extends the analysis to the type of trading environment as well. Where one product is traded on a wholesale level and the other through retail outlets, this must be taken into consideration. This relates both to the environment and to the nature of the consumer. [...]

[115]        The applicant's wares are only sold in Canada through its catalogue, and delivered by the applicant to its customers. The respondent's wares are sold exclusively to Costco Canada Inc. and at the retail level, exclusively in stores owned by Costco Canada Inc. in Canada. It is true that, as pointed out by the respondent, there are some differences in the trading environment and in the way the wares are distributed. One cannot obtain the applicant's wares in a department store in Canada. However, the wares are of the same general category of goods and are both available at the retail level on an individual sale basis.

The degree to resemblance between the trade-marks in appearance or sound or in the ideas suggested by them(6(5)(e))

[116]        As to the fifth factor, in Oshawa Group Ltd. v. Creative Resources Co. Ltd. (1982), 61 C.P.R. (2d) 29 (F.C.A.), the Federal Court of Appeal stated the following at page 35:

Furthermore, in assessing the "degree of resemblance" factor mandated by s-s. (6)(5)(e) of the Act, the test must be taken from the point of view of a person who has only a general and not a precise recollection of the earlier mark. Furthermore, the issue of similarity must be determined on the effect of the marks when taken as a whole or in totality. Marks should not be laid side by side for the purpose of analysis as to similarities and differences: see British Drug Houses Ltd. v. Battle Pharmaceuticals (1944), 4 C.P.R. 48, [1944] 4 D.L.R. 477, 4 Fox Pat. C. 93 [affirmed 5 C.P.R. 71, [1946] 1 D.L.R. 289, 5 Fox Pat. C. 135].

[117]        Keeping in mind this statement, when considering the marks in totality and assessing the degree of resemblance from the point of view of a person who has a general and imprecise recollection, I must agree with the applicant that the trade-marks sound alike and suggest the same idea. Both contain the word ARIZONA as well as the idea of "jeans" in the terms JEAN and JEANSWEAR. They also both refer to COMPANY or CO. In addition, they both contain 4 or 5 words in sequence, which makes it difficult to remember in which order the words are organized and which trade-mark contains which assortment of words. The only different words are ORIGINAL in the applicant's trade-mark and BLUES in the respondent's trade-mark, which in my view does not significantly limit the likelihood of confusion.

Surrounding circumstances

[118]        Finally, with respect to other surrounding circumstances, the applicant submits that the fact that the Registrar of Trade-marks refused to allow its trade-mark to proceed to advertisement on the grounds that it was confusing with the respondent's trade-mark should be taken in consideration and given substantial weight. However, in the applicant's file history for trade-mark application no. 867,902, which is adduced as Exhibit B to the affidavit of P. Claire Gordon, there is no evidence of such a refusal. The only letter from the Registrar which refers to any possible confusion with the respondent's trade-mark is dated June 8, 1998 and indicates the following:

In view of the provisions of section 12(1)(d), the mark does not appear to be registrable because it is confusing with the registered trade-mark(s). (See copy(ies) attached). Registration No.(s) TMA 439,567.

[...]

A revised application is required.

[119]        This does not, in my view, indicate that the Registrar has evaluated the likelihood of confusion between the trade-marks. In R.T. Hughes & T.B. Ashton, Hughes on Trade Marks, (Toronto: Butterworths, 1984) at § 28, the following is explained:

If an applicant has a registered trade-mark cited against his/her/its application, such person will be given an opportunity to address the citation. In appropriate circumstances, an examiner may withdraw the citation -- for example, if the applicant can show that the nature of the wares and the channels of trade would, in fact, be very different. If the examiner, after submissions are made by an applicant, still harbours some doubt as to whether the mark applied for is likely to cause confusion with a registered mark, the examiner may approve the application for advertisement but, pursuant to the Trade-marks Act, shall notify the owner of the registered trade-mark, which may be confusing with the mark applied for, of the advertisement of the application in order to alert such trade-mark owner in the event an opposition is desired. [footnote omitted]

[120]        Therefore, in my view, the letter from the Registrar is only a preliminary notice to the applicant indicating the possibility of confusion. It does not indicate that the Registrar has carefully evaluated all factors listed in subsection 6(5) of the Act and determined that there would be a likelihood of confusion. Consequently, this letter from the Registrar carries little weight in my opinion.            

[121]        The respondent insists on the lack of evidence of actual confusion. Evidence of actual confusion is relevant, however, it is not essential since it is the likelihood of confusion which must be assessed. The absence of evidence of actual confusion does not signify that there is no likelihood of confusion.

[122]        In Miss Universe, Inc. v. Bohna (1994), 58 C.P.R. (3d) 381 (F.C.A.), the Federal Court of Appeal discussed the principles applicable when assessing the likelihood of confusion, at page 387:

To decide whether the use of a trade mark or of a trade name causes confusion with another trade mark or another trade name, the court must ask itself whether, as a matter of first impression on the minds of an ordinary person having a vague recollection of that other mark or name, the use of both marks or names in the same area in the same manner is likely to lead to the inference that the services associated with those marks or names are performed by the same person, whether or not the services are of the same general class. [footnotes omitted]

[123]        In my view, taking into consideration the factors enumerated at subsection 6(5) of the Act, as well as the surrounding circumstances, an ordinary person having a vague recollection of the respondent's trade-mark ARIZONA BLUES JEANSWEAR CO. would be likely to infer that the wares associated with this trade-mark originate from the same source as the wares associated with the applicant's trade-mark THE ORIGINAL ARIZONA JEAN COMPANY. Consequently, in my opinion, the applicant has succeeded in establishing that, at the date of its first use by the respondent, the respondent's trade-mark was confusing with the applicant's trade-mark. The similarity in the words used in both expressions as well as the striking similarity in the nature of the wares lead me to believe that a person having an imperfect recollection of both trade-marks would be confused as to the source of the wares.

CONCLUSION

[124]        I have concluded that the applicant used its trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in Canada prior to December 21, 1993, and that the respondent' s trade-mark was confusing with the applicant's trade-mark when the respondent applied for registration of its trade-mark ARIZONA BLUES JEANSWEAR CO. on December 21, 1993. Consequently, the respondent was not entitled to register its trade-mark and the registration is invalid pursuant to sub-section 18(1) of the Act.

[125]        The applicant's application for expungement shall therefore be granted and the respondent's registration no. TMA 439,567 for the trade-mark ARIZONA BLUES JEANSWEAR CO. shall be expunged. The applicant shall have its costs.

                                                                                               Marc Nadon

                                                                                                       JUDGE

O T T A W A, Ontario

December 4, 2001