N. v. Sumatra Tobacco Trading Co. v. Imperial Tobacco Ltd., 2001 FCT 250

Date: 20010327

Docket: T-1855-99

Citation: 2001 FCT 250

Halifax, Nova Scotia, this 27th day of March, 2001

PRESENT:      THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE

BETWEEN:

N.V. SUMATRA TOBACCO TRADING COMPANY

Appellant/

Applicant

- and -

IMPERIAL TOBACCO LIMITED

Respondent

APPEAL under section 56 of the Trade-marks Act R.S.C. 1985,

c. T-13, as amended, (the "Act"), from a decision of the

Registrar of Trade-marks under section 38 of the Act

REASONS FOR ORDER AND ORDER

O'KEEFE J.

Proceedings

[1]                This is an appeal pursuant to section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the "Act") of the decision of the Hearing Officer, Trade-marks Opposition Board of the Registrar of Trade-marks (the "Registrar"), dated August 24th, 1999. In its decision the Registrar refused registration of the trade-mark HERO & Design (Application No. 773,162) by N.V. Sumatra Tobacco Trading Company ("Sumatra").

[2]                The appellant seeks an Order that the above decision be set aside, the trade-mark application be allowed, and the opposition be dismissed.

Background Facts

[3]                On January 17, 1995, Sumatra filed an application to register the trade-mark HERO & Design. The application was based on prior use and registration in Indonesia in association with cigarettes and proposed use in Canada in association with cigarettes and cigarette lighters. The application included a photocopy of the applied for mark HERO & Design which consisted of an unfolded cigarette package with all six sides of the package visible.

[4]                The application was advertised for opposition purposes in the Trade-marks Journal of December 20, 1995. In response, Imperial Tobacco Limited ("Imperial") filed a Statement of Opposition to the registration of Sumatra's mark on February 19, 1996. The grounds of opposition were:

1.                   The opposed mark was advertised in the December 20, 1995 edition of the Trade-marks Journal as follows:

773,162. 95-1-17. N.V. SUMATRA TOBACCO TRADING COMPANY, JLN. PATTIMURA NO. 3, PEMATANG SIANTAR, SUMUT, Indonesia. Representative for Service/Représentant pour Signification: SCOTT & AYLEN, 60 QUEEN STREET, OTTAWA, ONTARIO, K1P 5Y7.

The translation of the words KURANG PUAS in English means IF NOT SATISFIED and the word COBALAH in English means PLEASE TRY as provided by the applicant.

The right to the exclusive use of the words KING SIZE and 20 CLASS A CIGARETTES is disclaimed apart from the trade mark.

WARES: (1) Cigarettes. (2) Cigaretttes; cigarette lighters. Used: Indonesia on wares marked (01). Registered: Indonesia on December 13, 1983 under No. 178,166 in respect of wares marked (01). Proposed use in Canada on wares marked (02).

La traduction en anglais des mots KURANG PUAS est IF NOT SATISFIED, telle que fournier par le requérant, et la traduction en français est SI INSATISFAIT, telle que fournier par le bureau des marques de commerce et la traduction en anglais due mot COBALAH est PLEASE TRY,telle que fournie par le requérant, et la traduction en français est PRIÈRE D'ESSAYER, telle que fournie par le bureau des marques de commerce.

Le droit à l'usage exclusif des mots KING SIZE et 20 CLASS A CIGARETTES en dehors de la marque de commerce n'est pas accordé.

MARCHANDISES: (1) Cigarettes. (2) Cigarettes; briquets. Employée: Indonesie en liaison avec les marchandises mentionnées sous (01). Enregistrée: Indonesie le 13 décembre 1983 sous le No. 178,166 en liaison avec les marchandises mentionnées sous (01). Emploi Projeté au Canada en liaison avec les marchandises mentionnées sous (02).

2.          The alleged trade-mark that is the subject matter of application 773,162 is not a trade-mark. As shown by the specimens filed in support of the application, the alleged trade-mark comprises a package blank which when folded or assembled may be used to package cigarettes. The unfolded blank is not itself a trade-mark and is not the subject matter of protection under the Trade-marks Act.

3.          The alleged trade-mark has not been used in Indonesia as alleged in the application, and applicant has no intention to use the alleged mark in Canada.

4.          Having regard to the facts alleged in paragraphs 1(a), (b) and (c), applicant's application does not comply with the requirements of Section 30.

5.          Opponent is the owner of a series of trade-marks including the word HERO (hereinafter sometimes HERO trade-marks). The said HERO trade-marks are the subject matter of the following registrations:

Reg. No.                                   Reg. Date:

TMDA11355                            26 Oct. 1906

TMDA23018                            15 Nov. 1917

TMDA23018                            15 Nov. 1917

TMA255,728                            24 Feb. 1978

TMA254,016                            03 Dec. 1979

TMA248,605                            24 Feb. 1978

TMA294,125                            15 July 1983

TMA417,174                            13 Aug. 1992

TMA220,643                            31 May 1976

TMA417,460                            13 Aug. 1992

TMA350,655                            21 March 1988

TMA277,895                            27 Nov. 1981

TMA277,502                            01 June 1982

TMA420,712                            04 Aug. 1992

TMA417,675                            04 Aug. 1992

TMA252,506                            03 Dec. 1979

Particulars of each of the foregoing registrations are attached hereto as Schedule "A".

6.          Opponent's said HERO trade-marks have been substantially used and advertised in Canada for many years. Such use continues. Very substantial goodwill attaches to opponent's said HERO trade-marks.

7.          The concurrent use of opponent's said HERO trade-marks and any trade-mark comprising the word HERO for use in association with cigarettes and/or cigarette lighters, including the alleged trade-mark that is the subject matter of applicant's application, would be likely to lead to the inference that the wares associated with such trade-marks are manufactured or sold by the same person.

8.          Having regard to the facts alleged in paragraphs 1(a), 1(e), 1(f) and 1(g), the alleged trade-mark that is the subject matter of applicant's registration is not registrable and applicant is not the person entitled to registration thereof. Furthermore applicant's trade-mark is not distinctive in that it neither distinguishes nor is adapted to distinguish the wares in association with which applicant proposes to use its alleged trade-mark in Canada from those manufactured and sold by the opponent in association with its HERO trade-marks as aforesaid.

[5]                By way of counterstatement filed February 19, 1996, Sumatra denied each allegation contained in Imperial's statement of opposition. Written arguments were filed by each party. Imperial submitted affidavits of Denise Johnson, Herbert McPhail, Margaret Kruszewski and Melissa J. Payne as its evidence. Sumatra submitted as its evidence, the affidavit of Karen E. Thompson. An oral hearing was held at which both parties were represented.

Decision of the Trade-marks Opposition Board

[6]                In a written decision dated August 24, 1999, the Registrar refused Sumatra's application. The Registrar's findings are summarized as follows:

Imperial met its evidential burden in relation to its section 30 grounds. The Registrar found that the Kruszewski affidavit (concerning the unfolded cigarette blanks filed as specimens by Sumatra) showed evidence that Sumatra may be seeking to register its trade-mark in a manner different from the way in which it would normally be presented to the average consumer of Sumatra's wares, at the time of the transfer of those wares, in the normal course of trade. Thus, it appears that Sumatra did not intend to use the mark in the manner contemplated by subsection 4(1) of the Act.

[7]                Sumatra has not meet its legal burden of showing the application is in compliance with section 30 of the Act. The Registrar ultimately refused Sumatra's application on this basis. In relation to section 30, the Registrar states at page 3 of its decision:

The applicant has [...] submitted that there is nothing in the Trade-marks Act which precludes its mark from functioning as a trade-mark. That indeed may be the case. However, in seeking to register its mark as a proposed use trade-mark, the applicant, by itself or through a licensee, or by itself and through a licensee, must intend to use the trade-mark in Canada in association with wares covered in the application. In the present case, the evidence of record in this opposition supports the opponent's allegation that the applicant may not intend to use the trade-mark covered in the present application and, as noted above, that evidence is sufficient to meet the evidential burden on the opponent in relation to its Section 30 grounds. Since the applicant has failed to establish that it intends to use its trade-mark in the manner in which it is presented in the present application, it has failed to meet its legal burden in relation to the Section 30 grounds.

[8]                Although the Registrar would refuse Sumatra's application on this ground, it next considered Imperial's allegations that Sumatra's mark is not registrable and not distinctive, and that Sumatra is not the person entitled to its registration in that the applied for mark is confusing with Imperial's mark.

[9]                The Registrar found no reasonable likelihood of confusion between the applied for mark and Imperial's mark. These grounds of opposition were dismissed.

[10]            Issues

1.                   What standard of review is to be applied to the review of the Opposition Board's decision?

2.                   Did the Opposition Board err when it held that the respondent failed to meet its legal burden in relation to subsection 30(h) of the Act? The Act does not specify the particular form of representation of a trade-mark. There is no jurisprudence which limits the representation conveyed by the "drawing" on the application.

3.                   The Opposition Board did not recognize its obligation to reconcile the state of the Register.

4.                   Did the Opposition Board err when it held that the appellant could not have been satisfied, pursuant to subsection 30(i) of the Act, of its entitlement to "use" its trade-mark, in the manner contemplated by subsection 4(1) of the Trade-marks Act. The Board erred in holding that the respondent met its initial evidential burden to establish any relevant facts in support of its opposition based on section 30 of the Act.

The Appellant/Applicant's Submissions

[10]             Sumatra frames the issues in its memorandum of fact and law as follows:

2.                   The Registrar erred in holding Sumatra had failed to meet its legal burden in relation to subsection 30(h) of the Act.

Sumatra submits the Act does not specify any particular form for a "drawing" under subsection 30(h) and the only requirement is that the "drawing" must be "of the trade-mark." The drawing for Sumatra's mark, which represents all six sides of the cigarette package is an adequate and as accurate a representation of a three-dimensional package as any two-dimensional representation could be under the circumstances, particularly given that cigarette packages are not immediately discarded. Additionally, regardless of the perspective, the drawing will always be in two-dimensional form.

Sumatra submits its drawing meets the requirements of the necessary dimensions

and does not include matter which is not part of the mark. As the Registrar reproduced the drawing in the Trade-marks Journal and did not request a new drawing, this suggests it considered the drawing of the trade-mark suitable. Sumatra further argues the Trade-mark Regulations (1996), S.O.R./96-195 (the "Regulations") contemplate certain trade-marks can be represented by a two-dimensional drawing which is not the way the mark would appear to the consuming public. Sumatra offers an example of a sound that was registered as a trade mark and Regulation 28 concerning the registration of colours.

2.          The Registrar did not recognize its obligation to reconcile the state of the Register.

Although each trade-mark application is decided on its own merits, this Court has noted the importance of consistency in the treatment of applications. Sumatra lists examples of registered trade-marks relating to cigarettes that are represented by "drawings" or photocopies of unfolded cigarette packages. Thus, in Sumatra's submission, the Registrar has always viewed this as an accurate representation of the trade-mark for the "drawing" requirement under subsection 30(h) of the Act, and the Register will not be reconciled if the Registrar's decision is allowed to stand.

3.          The Registrar erred in holding that Sumatra could not have been satisfied, pursuant to subsection 30(i) of the Act, of its entitlement to "use" its trade-mark.

Sumatra submits it is not statutorily required that the trade-mark is used "as it would normally be presented to the average consumer of the applicant's wares." The mark will be considered used if the trade-mark actually used, is not substantially different and the deviations are not such as to deceive or injure the public in any way. The drawing submitted is as close to an actual representation of the mark as it would be used in the normal course of trade, as any two dimensional drawing could be. Sumatra submits any deviations between the drawing and the mark in use would not deceive or injure the public.

Sumatra argues it had the right to state it was satisfied that it is entitled to use the mark in Canada in association with cigarettes for subsection 30(i) purposes. The mark was used in the normal course of trade in substantially the same form as the representation in the application.

4.          The Registrar erred in holding that Imperial met its initial burden to establish any relevant facts in support of its opposition based on s. 30 of the Act.

Sumatra submits that since it has been established that the representation is acceptable for subsection 30(h) purposes, the Registrar erred in holding Imperial met its initial evidentiary burden. Imperial's evidence went to whether the representation of the mark was acceptable, and not to non-use of the mark.

Respondent's Submissions

[11]             Imperial submits the points in issue are "whether the trade-mark applied for is the

mark that was used in Indonesia and that is intended to be used in Canada, and if not, whether the mark applied for can be permitted to go to registration."

[12]       A.         What is the Mark Which is Subject of the Present Application?

Imperial argues there is a significant difference between: (1) the mark used by Sumatra in Indonesia and intended to be used by the applicant in Canada (this mark comprises of wording and other matter applied to a 3-dimensional 6-sided cigarette package as now admitted by Sumatra's factum); and (2) the mark which is in fact the subject of the present application (which consists of wording and other matter contained within a 2-dimensional, 20-sided figure).

[13]             Imperial argues Sumatra did not submit a drawing of the trade-mark nor accurate

representations of the trade-mark as required by subsection 30(h). Furthermore, subsection 27(1) of the Regulations states the drawing of the trade-mark shall not include any matter that is not part of the mark.

[14]             Imperial refers to the cases of Novopharm Limited v. Bayer Inc. et al. (1999), 3

C.P.R. (4th) 305 and Calumet Manufacturing Ltd. v. Mennen Canada Inc. (1991), 40 C.P.R. (3d) 76, to show how important the accuracy of the drawing depicting the applied for mark is to this Court. Imperial submits nothing in Sumatra's application states that the applied for mark is anything other than which is specifically shown, or that the mark applied for was a cigarette package, an unfolded form of which was depicted in the drawing.

[15]             Where the subject of an application is in fact a package which is depicted in the

drawing by the package as unfolded, the practice directives issued by the Trade-marks Office oblige Sumatra to provide such wording, and to show the outline of the unfolded package in dotted lines and provide a statement that the representation of the unfolded container does not form part of the mark. Sumatra failed to do so. Sumatra's failure to accurately depict the mark justifies refusal of the application.

[16]       B.          Registrar Not Bound by State of the Registrar

Imperial submits the duty of the Registrar lies in maintaining the purity of the Register and that each case should be decided on its own merits. Imperial cites five cases in support of this proposition. Imperial also argues the fact that the Register contains marks depicted by two-dimensional copies of unfolded cigarette packages is irrelevant, unless it is shown that those marks were opposed on the same basis as the present situation.

[17]             Imperial submits there was no evidence suggesting the Registrar was aware that

any of the previously registered marks highlighted by Sumatra were comprised of copies of unfolded cigarette packages. Therefore, such marks would have been treated as normal two-dimensional multi-sided design trade-marks by the Registrar, and the Registrar would not have considered if the marks were accurately depicted if only used in fold-up form. In any event, Imperial cites Novopharm v. Bayer, supra for the proposition that the Registrar is under no duty if the previous practice (of accepting two-dimensional copies of unfolded cigarette packages) did exist and is shown to have been wrong.

Relevant Statutory Provisions

[18]             The relevant sections of the Trade-marks Act state:

[19]             The relevant portions of the Trade-marks Regulations state:

Analysis and Decision

[20]             Issue 1

What standard of review is to be applied to the review of the Opposition Board's decision?

The standard of review to be applied to decisions of the Registrar has been settled by the Federal Court of Appeal in Molson Breweries, A Partnership v. John Labatt Ltd. (2000) 5 C.P.R. (4th) 180 (F.C.A.) at page 196:

I think the approach in Benson & Hedges v. St. Regis and in McDonald's Corp. v. Silcorp are consistent with the modern approach to standard of review. Even though there is an express appeal provision in the Trade-marks Act to the Federal Court, expertise on the part of the Registrar has been recognized as requiring some deference. Having regard to the Registrar's expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar's findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar's decision.

Appeals pursuant to section 56 of the Act are often referred to as a trial de novo, but this description of the appeal is not completely correct as an appeal under section 56 also involves a review of the findings of the Registrar.

[21]             Sumatra filed the second affidavits of Karen Ardis Messer, sworn to November

17, 1999 and Elizabeth M. Leasure before me. It must be determined whether this new evidence is evidence "that would have materially affected the Registrar's finding of fact or the exercise of his discretion". I have reviewed these two new affidavits and I have come to the conclusion the new evidence is not the type of evidence that "would have materially affected the Registrar's finding of fact or the exercise of his discretion". In this case, it is the Opposition Board. The affidavit of Elizabeth M. Leasure deals with the types of trade-marks that are registered in the United States. This would not have materially affected the Opposition Board member's finding of fact or the exercise of his discretion. It must be remembered that the Opposition Board is operating under Canadian not American law. There is no evidence that the registration requirements are the same in the United States as in Canada. One of the Messer affidavits deals with a sound mark, where the drawing used to represent the trade-marked sound is a representation of the notes on a scale of music which is played, would recreate the trade-marked sound. The other Messer affidavit submits a number of trade-marks that have been registered using drawings that Sumatra states are similar to its drawing. There was not any evidence as to whether these applications for registration were opposed at all or on similar grounds to the section 30 opposition in this case. Accordingly, I do not believe that either of the Messer affidavits provide the type of evidence that "would have materially affected the Registrar's finding of fact or the exercise of his discretion" because, this finding, the decision of the Opposition Board member which is within his area of expertise should be reviewed on a standard of reasonableness simpliciter.

[22]             Issue 2

The Opposition Board erred when it held that the respondent failed to meet its legal burden in relation to subsection 30(h) of the Act. The Act does not specify the particular form of representation of a trade-mark. There is no jurisprudence which limits the representation conveyed by the "drawing" on the application.

In its application to register the trade-mark, Sumatra submitted as the drawing required by subsection 30(h), a photocopy of the unfolded cigarette package blank. In applications for registration of a trade-mark, the legal burden is upon the applicant to show that its application for registration complies with section 30 of the Trade-marks Act, but there is an initial evidential burden on the opponent to establish the facts relied upon by it in support of its section 30 grounds of opposition (see Joseph E. Seagram & Sons Ltd. et al. v. Seagrams Real Estate Ltd. (1984) 3 C.P.R. (3d) 325 (T.M.O.B.) At pages 329-330). In order to meet the evidential burden on it in relation to a certain issue, the opponent must adduce sufficient admissible evidence from which it could reasonably be concluded that the facts alleged to support that issue exist (see John Labatt Limited v. The Molson Companies Limited (1990) 30 C.P.R. (3d) 293 at page 298).

[23]             I do not believe that the Opposition Board erred when it ruled that Sumatra had

not met its legal burden in relation to section 30(h) of the Act. It seems to me that the drawing in this case is the whole unfolded cigarette package. Both the specimen and the photocopy of the package indicate this. It seems to me that the trade-mark used by Sumatra in Indonesia and intended to be used in Canada consists of wording and other matter applied to a three-dimensional, six-sided cigarette package. The trade-mark applied for consists of wording and other matter contained within a two-dimensional,

20-sided figure. In Calumet Manufacturing Ltd. v. Mennen Canada Inc.; Gillette Canada Inc. v Mennen Canada Inc. (1991) 40 C.P.R. (3d) 76 (F.C.T.D.), MacKay J. stated at page 87:

Unless the mark consists solely of a word or words without particular style, the Act requires that a drawing of the trade mark and accurate representations of it be filed with an application for registration. It is the mark so depicted in the drawing, reproducible with a certificate of registration, which then provides notice to the world of the owner's or registered user's proprietary interest in the trade mark and which forms the evidentiary basis for actions of infringement or for expungement. Useful as photographs and samples of a trade mark, including a distinguishing guise, may be upon application for registration, to ensure the drawing is a reasonable representation of the trade mark claimed, in my view, those do not form part of the trade mark for registration or for other purposes under the Act.

It is important that the drawing accurately depict the trade-mark as there is an important public interest in knowing what trade-mark the appellant intends to protect with the application. I therefore find that the Opposition Board decision was not only reasonable, but it was correct.

[24]             Issue 3

The Opposition Board did not recognize its obligation to reconcile the state of the Register.

Sumatra argued that since there were other registered trade-marks relating to cigarettes that are represented by photocopies of unfolded cigarette packages, its photocopied unfolded package should have been viewed as an accurate representation of the trade-mark for the drawing requirement under subsection 30(h) of the Act. There are two reasons why this ground of appeal must fail. Firstly, the Opposition Board must decide each application on its own merits and secondly, if the earlier registrations were made in error or without an opposition being filed with respect to the "drawing", the Opposition Board is not bound by the state of the Register.

[25]             Issue 4

The Opposition Board erred when it held that the appellant could not have been satisfied, pursuant to subsection 30(i) of the Act, of its entitlement to "use" its trade-mark, in the manner contemplated by subsection 4(1) of the Trade-marks Act. The Board erred in holding that the respondent met its initial evidential burden to establish any relevant facts in support of its opposition based on section 30 of the Act.

Although subsection 30(i) was not mentioned in argument, I assume the argument with respect to the issue that the trade-mark applied for is not the trade-mark used in Indonesia nor the trade-mark proposed to be used in Canada. I agree with the Opposition Board on this point. The appellant did not sell its cigarettes in Indonesia in unfolded cigarette packages nor does it intend to sell cigarettes in that manner in Canada. The cigarettes will not be sold in an unfolded package. The Opposition Board did not err in this respect.

[26]             Finally, the appellant submits that the Opposition Board erred in holding that the

respondent met its initial evidential burden to establish any relevant facts in support of its opposition based on section 30 of the Act. I cannot agree with the appellant. The respondent submitted the affidavit of Margaret Kruszewski which contained a photocopy of the unfolded cigarette package blank that was filed as a specimen.

[27]             As the Opposition Board stated:

In the present case, the opponent's evidence is sufficient to meet its evidential burden in relation to its Section 30 grounds . . .

[28]             In each of the Opposition Board member's findings, I hold that the findings were

reasonable and in fact were correct.

[29]             Based on my findings, I would therefore dismiss the appeal.

[30]             The respondent shall have its costs of the appeal.

ORDER

[31]             IT IS ORDERED that the appeal is dismissed.

[32]             AND IT IS ORDERED that the respondent shall have its costs.

                                                                               "John A. O'Keefe"            

                                                                                               J.F.C.C.                     

Halifax, Nova Scotia

March 27, 2001

                         FEDERAL COURT OF CANADA

                                      TRIAL DIVISION

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                  T-1855-99

STYLE OF CAUSE:N.V. SUMATRA TOBACCO TRADING COMPANY

- and -

IMPERIAL TOBACCO LIMITED

PLACE OF HEARING:                                 TORONTO, ONTARIO

DATE OF HEARING:                                   TUESDAY, NOVEMBER 21, 2000

REASONS FOR ORDER AND ORDER OF O'KEEFE J.

DATED:                     MARCH 27, 2001

APPEARANCES:

Mr. Gordon J. Zimmerman

FOR APPLICANT

Mr. Glen Tremblay and Mr. Kohji Suzuki

FOR RESPONDENT

SOLICITORS OF RECORD:

Borden Ladner Gervais LLP

Scotia Plaza 40 King St. W.

Toronto, ON M5H 3Y4

FOR APPLICANT

Smart & Biggar

900-55 Metcalfe St. P.O. Box 2999, Stn, D

Ottawa, ON K1P 5Y6

FOR RESPONDENT

                   FEDERAL COURT OF CANADA

                                TRIAL DIVISION

Date: 20010327

Docket: T-1855-99

Neutral Citation: 2001 FCT 250

BETWEEN:

N.V. SUMATRA TOBACCO TRADING COMPANY

Applicant

- and -

IMPERIAL TOBACCO LIMITED

Respondent

              REASONS FOR ORDER AND ORDER