Dumont vins & spiritueux inc. C. Canadian Wine Institute, 2001 FCT 695

                                                                                                                                            Date: 20010622

                                                                                                                                       Docket: T-2583-97

Ottawa, Ontario, the 22nd day of June 2001

Present:           The Honourable Mr. Justice J.E. Dubé

IN THE MATTER OF an opposition by Canadian Wine Institute to the application for registration of the trade-mark BOUTEILLE & DESSIN filed by Dumont Vins & Spiritueux Inc. on February 16, 1989, as number 625,641.

Between:

DUMONT VINS & SPIRITUEUX INC.

Appellant

- AND -

CANADIAN WINE INSTITUTE

- and -

THE REGISTRAR OF TRADE-MARKS

Respondents

JUDGMENT

The appeal is allowed and this Court orders the registration of the mark No. 625,641, the whole with costs.

J.E. Dubé

                                                       Judge

Certified true translation

Mary Jo Egan, LLB

Date: 20010622

                                            Docket: T-2583-97

Neutral citation: 2001 FCT 695

IN THE MATTER OF an opposition by Canadian Wine Institute to the application for registration of the trade-mark BOUTEILLE & DESSIN filed by Dumont Vins & Spiritueux Inc. on February 16, 1989, as number 625,641.

Between:

DUMONT VINS & SPIRITUEUX INC.

Appellant

- AND -

CANADIAN WINE INSTITUTE

- and -

THE REGISTRAR OF TRADE-MARKS

Respondents

REASONS FOR JUDGMENT

DUBÉ J.:

[1]         The appellant (Dumont) appeals from the decision by the member of the Canadian Trade-Marks Opposition Board (the Board member) dated October 1, 1997, dismissing its application for registration No. 625,641 of the trade-mark BOUTEILLE & DESSIN (the mark) in association with wines and used in Canada since at least October 1984. That decision was made

pursuant to an opposition proceeding brought by the respondent Canadian Wine Institute

(Canadian Wine).

1. The Facts

[2]         Dumont distributes wine, which for the most part is bottled in Quebec, and sells it primarily through the network of licenced grocers. In October 1984, Dumont began marketing an opaque white bottle of wine of the Hoch (Alsace) type under the mark L'OISEAU BLEU, a wine that became the best-selling light white wine in Quebec. The mark L'OISEAU BLEU was registered on August 16, 1985.

[3]         On February 16, 1989, Dumont filed two applications for registration with the Registrar of Trade-Marks; they became the subject of three oppositions, two by Celliers du Monde Inc. (Celliers), a competitor of the applicant, and the other by Canadian Wine. The Trade-Marks Opposition Board upheld the three oppositions on October 1, 1997. This is an appeal from the decision pertaining to the opposition by Canadian Wine and concerns only the application for registration of the aforementioned mark.

[4]         Dumont and Celliers have clashed in the past over the marketing of their respective wines, and particularly over the distribution of wine in an opaque white bottle of the Hoch (Alsace) type (see Dumont Vins & Spiritueux Inc. v. Celliers du Monde Inc. [1990] R.J.Q. 556 (S.C.) (Dumont I) and Dumont Vins & Spiritueux Inc. v. Celliers du Monde Inc. (1992), 42 C.P.R. (3d) 197 (F.C.A.)) (Dumont II).

[5]         In Dumont I, Forget J. of the Quebec Superior Court found in favour of Dumont and issued the requested injunction against Celliers because it had committed the delict of passing off, but he noted that Dumont had not established a distinguishing guise that would allow it to claim the exclusivity of the opaque white bottle of the Hoch (Alsace) type. However, he did not formally dispose of the issue of trade-mark infringement.

[6]         In October 1990, Dumont commenced new proceedings for an injunction against Celliers in the Federal Court. The Court of Appeal held, in Dumont II, that the issue of the unregistered trade-mark was res judicata and that the Court had no jurisdiction to hear the matter with respect to the delict of passing off.

[7]         Neither court had to rule directly on the issue of whether the Dumont mark was registrable.

2. The Board member's decision

[8]         On October 1, 1997, the Board member rejected the registration and allowed the opposition of Canadian Wine, stating as follows:

[Translation]

The Court's findings in Dumont I concerning Dumont's claim to the exclusive rights to the distinguishing guise DESSIN DE BOUTEILLE are actual findings and are therefore relevant in this case. In the Cellier opposition, cited above, I dismissed the applications for registration of trade-marks submitted by Dumont for the following reasons:

[Translation] I think I am bound by the decision in Dumont I, that the applicant cannot claim exclusive rights to its marks under FORMES DE BOUTEILLE pursuant to the principles of stare decisis and res judicata. Even if I were not obliged to follow Dumont I, I would nevertheless have to defer to the Superior Court of Quebec under the principle of judicial comity. The result would be the same under any of the aforementioned principles, namely, that the distinguishing guise marks in applications 625,641 and 625,642 were not registrable in regard to Dumont's wine at the relevant date.

Applying the preceding reasoning to this case, I conclude that the distinguishing guise in the application was not registrable on February 16, 1989 in regard to Dumont's wines. The above-captioned application is therefore dismissed. I need not rule on the Institute's other grounds of opposition.

.

[Emphasis added]

3. Dumont's submissions

[9]         Dumont believes that the Board member should have given the parties the opportunity to be heard on the doctrine of res judicata instead of raising the issue of his own initiative.

[10]       Dumont submits that the doctrine of res judicata does not apply in this case. Neither the operative part of the judgment in Dumont I nor the reasons refer to the registrability of the mark, an issue on which the Superior Court had no jurisdiction to rule. In fact, Dumont argues that Forget J. in Dumont I virtually acknowledged the distinctiveness of the mark by allowing the action in passing off, since distinctiveness is one of the criteria for succeeding in such an action. The three identities (cause, parties, object) necessary for the doctrine of res judicata to apply are not present in this case.

[11]       The Board member also erred in stating that he was bound by the doctrine of stare decisis. Dumont contends that the Board member is not bound by a decision of the Superior Court, since that court lacks jurisdiction to hear an appeal from his decision, and is instead part of a parallel jurisdiction. Furthermore, the Board member should not have felt bound by the principle of judicial deference.

[12]       As to the mark itself, Dumont submits that the evidence shows it had a distinctive character in Quebec as of the date the application was filed and that none of the evidence introduced by Canadian Wine supports the contrary view. The sales of bottles and the investment in marketing by Dumont go back prior to 1984. The evidence also shows that Dumont was the first to use the mark in connection with the sale of wine. Lastly, Dumont's exclusive use of the mark will not unreasonably restrict the development of the wine industry in Quebec.

4. Canadian Wine's submissions

[13]       Canadian Wine submits that Dumont has not discharged its onus of proving that the mark was registrable as of the date of filing of the application for registration. Furthermore, the lack of distinctiveness of the mark has already been decided by the Superior Court in Dumont I and affirmed by the Federal Court of Appeal in Dumont II.

[14]       However, Canadian Wine concedes that the doctrine of res judicata is inapplicable in the circumstances, given the absence of the three identities. But in its view, the rule of stare decisis ought to apply, even to findings of fact. It is inconceivable that Forget J., in Dumont I, could have concluded that Dumont had failed to establish the existence of a distinguishing guise regarding the mark in February 1989, and that another court or tribunal could reach the opposite conclusion in regard to the same bottle of the same date.

[15]       Canadian Wine further argues that it is wrong to claim that the Superior Court lacked jurisdiction to determine whether Dumont had established a distinguishing guise that would allow it to claim exclusivity for the mark. Moreover, it is not the distinctiveness of the bottle that was recognized by the Superior Court in its analysis of the delict of passing off, but rather the fact that Celliers was attempting to pass off its goods for those of Dumont by using various characteristics of the Dumont bottle.

[16]       Celliers argues that Dumont has not proved that it was using the opaque white bottle of the Hoch (Alsace) type to distinguish its products from the others; rather, its use was to embellish its presentation and promote sales. There is nothing in the evidence that establishes that Dumont adopted its mark in order to distinguish its products. There is no presumption in this matter.

[17]       Lastly, Canadian Wine submits that Dumont has failed to discharge its onus of establishing that no unreasonable limitation of the market is to be feared from the registration of an opaque white bottle. Canadian Wine also maintains its opposition based on the theory of exhaustion of colours.

5. Distinctiveness

[18]       Section 2 of the Trade-Marks Act, R.S.C., 1985, c. T-13 (the Act) defines the concept of trade-mark as follows:

"trade-mark" means

(a) a mark that is used by a person for the purpose of distinguishing or so as

to distinguish wares or services manufactured, sold, leased, hired or performed

by him from those manufactured, sold, leased, hired or performed by others,

(b) a certification mark,

(c) a distinguishing guise, or

(d) a proposed trade-mark.

[19]       This section also provides that a distinguishing guise means:

(a) a shaping of wares or their containers, or

(b) a mode of wrapping or packaging wares

the appearance of which is used by a person for the purpose of distinguishing or

so as to distinguish wares ... manufactured [or] sold ... by him from those manufactured [or] sold ... by others.

[20]       Subsection 13(1) of the Act stipulates that a distinguishing guise can be registered only under the following conditions:

13. (1) A distinguishing guise is registrable only if

(a) it has been so used in Canada by the applicant or his predecessor in title

as to have become distinctive at the date of filing an application for its

registration; and

(b) the exclusive use by the applicant of the distinguishing guise in

association with the wares or services with which it has been used is not likely

unreasonably to limit the development of any art or industry.

[21]       In this case, the relevant date for reviewing the distinctiveness of the mark in question is February 16, 1989. The injunction action in the Superior Court was brought within two weeks after the application for registration and the injunction was granted to Dumont because Celliers committed the delict of passing off.

[22]       Generally speaking, the role of this Court on an appeal from a decision of the Board member is to determine whether his decision is clearly wrong or unreasonable. However, the Court must take into account the expertise of the tribunal. The Board member's decision should not be set aside lightly when it involves factual determinations, central to his specialized competence. But in this case, it involves a question of law, and his interpretation must be correct (Young Drivers of Canada Enterprises Ltd. v. Chan, unreported, August 30, 1999, T-636-97, Lutfy J. and Garbo Group Inc. v. Harriet Brown and Company Inc. and The Registrar of Trade-marks, unreported, November 16, 1999, T-2432-97, Evans J.).

5. Res judicata

[23]       This doctrine is clearly defined in the case law. The three identities essential to its application are precise: the demand must be based on the same cause between the same parties, and the object must be the same. In addition to these three well-known identities, there is, of course, the requirement that the court that made the decision had jurisdiction to do so (Rocois Construction v. Quebec Ready Mix, [1990] 2 S.C.R. 440; Roberge v. Bolduc, [1991] 1 S.C.R. 374 and Burton v. Ville de Verdun, September 15, 1998, Montréal, 500-09-001485-952 (C.A.)).

[24]       Counsel for Canadian Wine conceded at the outset that in this case the rule of the three identities was not fully complied with. The cause, the parties and the object were not the same before the Board member as they were before the Superior Court. The Board member therefore erred in law in relying on the doctrine of res judicata.

6. Stare decisis

[25]       The Board member also stated that he was bound by the principle of stare decisis. This principle originates in the Latin phrase stare decisis et non quieta movere, defined by A. Mayrand as [Translation] "To adhere to the judge-made rules and not to challenge them by surreptitiously altering them". (A. Mayrand, Dictionnaire de maximes et locutions latines utlisées en droit québécois, 3rd ed. (Cowansville: Les Éditions Yvon Blais, 1994), at p. 493).

[26]       In theory, the rule of stare decisis only applies to the ratio decidendi, the reasons on which the decision is based. A court's obiter dictum cannot be imposed on a lower court or tribunal.

[27]       The Superior Court had to determine whether the unregistered trade-mark had been infringed and whether Celliers committed a delict of passing off, while the Board member was required to consider the registrability of Dumont's mark. Although the concept of distinguishing guise was relevant to the three proceedings, it had to be analyzed independently in light of the evidence filed in each case. Forget J. found that the mark was not sufficiently distinctive to be infringed but that it was nevertheless sufficiently distinctive to be protected against a passing off. The Board member refrained from any analysis and merely cited res judicata, stare decisis and judicial deference.

[28]       In this case, it must be kept in mind that Dumont I in no way determined the parameters of the applicable law in the action: the registrability of a trade-mark was not even discussed. At most, Mr. Justice Forget's comment on that subject was obiter; it was not part of the ratio decidendi directly explaining his decision.

[29]       In this case, the relevant findings in the Board member's decision were completely different from those in Dumont I and Dumont II. In Dumont I and Dumont II, the conclusions that were sought were the recognition of a breach of an unregistered trade-mark and the granting of an injunction for passing off. The proceeding before the Board member involved an opposition to the registration of a trade-mark. Furthermore, Forget J. could not rule on the registrability of the trade-mark since the question was not within his jurisdiction.

[30]       The Board member therefore erred in law in relying on the doctrine of stare decisis.

7. Judicial deference

[31]       The Board member also stated he was bound by the principle of judicial deference. The parties did not spend much time discussing this principle but, in view of my conclusions in regard to the principles of res judicata and stare decisis in this case, there is no need to dwell on the matter.                                                                                   

[32]       Suffice it to note that because the registration of a trade-mark is not within the jurisdiction of the Superior Court, the Board member could not consider himself bound by the principle of judicial deference in this area.

[33]       It is necessary, then, to consider the application for registration on its merits.

8. Analysis of distinctiveness

[34]       In support of its application for registration, Dumont filed the affidavits of Gilles Mélançon, Dumont's marketing director, and Jean-Bernard Belisle, president of Groupe Everest Inc. and of Sérum Recherches et Sondage Inc. In support of its opposition, Canadian Wine filed the affidavit of its president, John F. Corbett. At the hearing before the Board member, Dumont filed as additional evidence a second affidavit of Jean-Bernard Belisle, three affidavits of Pierre Rémillard, Dumont's product manager, another affidavit of Gilles Mélançon and four affidavits from consumers.

[35]       No reply evidence was filed by Canadian Wine and no cross-examination occurred before the Board member. Both parties filed written submissions, but only Dumont was represented at the hearing.

[36]       In this Court, Dumont filed as additional evidence an affidavit of François Fréchette, a competitor of the applicant. No additional evidence was filed by Canadian Wine, and no cross-examination was held before this Court.

[37]       It is clear that Dumont had the burden of proving that the mark it used had become distinctive at the date of filing of the application pursuant to subsection 13(1) of the Act, and that this burden remains the same on appeal (see Mennen Canada Inc. v. Gillette Canada Inc., [1992] 40 C.P.R. (3d) 76, at p. 84).

[38]       Moreover, it is well settled that the person opposing the registration of a trade-mark has an initial burden to present evidence in support of each of its grounds of opposition (see Triple C-Import Limited v. M. & A. Candy and Co. (1990), 29 C.P.R. (3d) 559, at p. 561).

[39]       In my view, Dumont has presented relevant, persuasive and uncontradicted evidence to show that its mark was distinctive at the time of its application for registration.

[40]       The affidavit of Mr. Corbett of Canadian Wine describes purchases made in Ontario, while Dumont's application for registration is limited to the territory of Quebec. Furthermore, none of the photographs filed in support of Mr. Corbett's affidavit corresponds to white wine marketed in a wine bottle of the Hoch (Alsace) type combined with the opaque white colour. No evidence was filed by Canadian Wine to show the use of an opaque white bottle of the Hoch (Alsace) type on Quebec territory prior to the usage by Dumont.

[41]       Dumont's evidence also shows that since 1984 it has been continuously using the same opaque white wine bottle of the Hoch (Alsace) type to market its L'OISEAU BLEU wine. The number of bottles sold by Dumont as of the date of the application for registration exceeded four million per year. In 1996, more than ten million bottles were sold. The experts' survey clearly shows that consumers make the connection between the opaque white bottle of the Hoch (Alsace) type and the L'OISEAU BLEU product.

[42]       Therefore, in light of the uncontradicted evidence in the record, it appears that at the time of the application for registration, five years after its introduction on the market, the opaque white wine bottle of the Hoch (Alsace) type had acquired a second meaning in the mind of the Quebec consumer, namely, that it was automatically associated with the applicant's product, L'OISEAU BLEU.

9. Limitations on market development

[43]       Paragraph 13(1)(b) of the Act provides that the mark is registrable if it is not likely

unreasonably to limit the development of any art or industry. The parties have not presented much evidence on this issue. However, the monopoly requested by Dumont concerns only Quebec territory. This monopoly is granted only for the use of an opaque white bottle of the Hoch (Alsace) type. There is no evidence that the registration of this trade-mark would unduly limit the wine marketing industry. Dumont was the first to use an opaque white bottle of the Hoch (Alsace) type to bottle its wine. It was an innovation in that business, where the bottles are generally dark: black, dark green or amber.

10. Exhaustion of colours theory

[44]       This theory was cited by Canadian Wine in support of its submission on unreasonable market limitations. It is derived solely from an American decision, Campbell Soup Co. v. Armour & Co., 175 F. 2d 795 (1949).

[45]       This theory has never been in vogue in Canada, and no longer is in the United States. On the contrary, the Supreme Court of Canada, in Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, seemed to accept that colour combined with form and size can serve as a mark, and that in each case the issue of whether the colour is linked to the commercial origin of the product is a question of fact.

11. Conclusions

[46]       In my view, the Board member erred in law in basing his decision on the doctrines of res judicata, stare decisis and judicial deference, and failed to assess the evidence before him. This Court has therefore had to weigh the evidence, and, in my view, the evidence clearly shows that the trade-mark BOUTEILLE & DESSIN is distinctive and ought to be registered.

[47]       The appeal is therefore allowed, the decision of the Board member is overturned, and this Court orders the registration of the mark No. 625,641.

OTTAWA, Ontario

June 22, 2001                                                                              

J.E. Dubé

                                                                    Judge

Certified true translation

Mary Jo Egan, LLB.

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET NO:                          T-2583-97       

STYLE OF CAUSE:                 Dumont Vins & Spiritueux Inc.

- and -

Canadian Wine Institute et al.                

PLACE OF HEARING:          Montréal, Quebec

DATE OF HEARING:            June 11, 2001

REASONS FOR JUDGMENT OF DUBÉ J.

DATED:                                   June 22, 2001

APPEARANCES:

Bruno Barrette                                                                  FOR THE APPELLANT

Paul Paradis                                                                       FOR THE RESPONDENT

SOLICITORS OF RECORD:

Brouillette Charpentier Fortin                                            FOR THE APPELLANT

Montréal, Quebec

Pinsonnault Torraldo Hudon                                              FOR THE RESPONDENT

Montréal, Quebec