Boston Pizza International Inc. v. Boston Chicken Inc., 2001 FCT 1024

Date: 20010917

Docket: T-677-95

Neutral citation: 2001 FCT 1024

BETWEEN:

                                                BOSTON PIZZA INTERNATIONAL INC.

                                                                                                                                                    Applicant

                                                                            - and -

                                                             BOSTON CHICKEN INC.

                                                                                                                                               Respondent

                                                              REASONS FOR ORDER

NADON J.

[1]                 This is an application by the applicant for the expungement of the trade-marks BOSTON CHICKEN, registration no. TMA 398,700 and BOSTON CHICKEN Design, registration no. TMA 396,282, 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]                 This application is based on the following grounds:

(a)        the registration of the trade-marks was invalid since they were not, and are not, distinctive of the services of the respondent contrary to section 18(1)(b) of the Act;

(b)        the trade-marks were not registrable because they were confusing with a registered trade-mark pursuant to section 12(1)(d) of the Act; and

(c)        the respondent was not the person entitled to secure registration of the trade-marks as each trade-mark was confusing with the applicant's trade-marks which had previously been used extensively in Canada.

[3]                 The applicant requests that registration no. TMA 398,700 for the trade-mark BOSTON CHICKEN and registration no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design be declared invalid and that the registrations be struck from the Register of Trade-marks. The applicant also requests costs.

[4]                 The applicant is a British Columbia corporation which was incorporated under the name "Bushby Industries Ltd." on May 26, 1982. The applicant's name was changed to "Boston Pizza International Inc." on December 10, 1982 following the purchase by the applicant of Boston Pizza International Ltd.

[5]                 The applicant is the owner of seven registered trade-marks in Canada, including the trade-mark BOSTON PIZZA, registration no. TMA 171,428, registered on September 18, 1970 in association with the following wares and services:

- Wares: Pizza and spaghetti, both in hot and frozen form, as well as the ingredients, in combination, for making these dishes.

- Services: Restaurant services and the franchising of restaurant services.

As of 1994, there were 93 Boston Pizza restaurants located in five Canadian provinces.

[6]                 The respondent was a company organised and existing under the laws of the State of Delaware. At the date of commencement of these proceedings, the respondent was the owner of the Canadian trade-mark registrations no. TMA 398,700 for the trade-mark BOSTON CHICKEN and no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design. The respondent's trade-marks were registered on May 29, 1992 and March 27, 1992 respectively in association with the following services:

- Take-out restaurant and catering services.

[7]                 At the end of 1994, 530 restaurants in the United States operated under the banner of BOSTON CHICKEN.

[8]                 On April 3, 1995, the applicant filed this application to expunge the respondent's registration no. TMA 398,700 for the trade-mark BOSTON CHICKEN and registration no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design from the Register of Trade-marks.

[9]                 In October 1998, the respondent filed for bankruptcy protection pursuant to Chapter 11 bankruptcy under the United States Bankruptcy Code. Following bankruptcy in the United States of America, the respondent was dissolved and all rights to Canadian trade-mark registration nos. TMA 398,700 and TMA 396,282 were acquitted and assigned to Global Restaurant Operations of Ireland Limited ("Global"), including the right to continue these proceedings.

[10]            At the commencement of the hearing, Global made a motion seeking to be joined as a party to the proceedings. That motion is hereby allowed.

THE APPLICANT'S EVIDENCE

[11]            In support of its application, the applicant initially filed the Affidavit of George Melville, Vice-President of Boston Pizza International Inc., dated February 24, 1995.

[12]            On November 16, 2000, I made an order allowing the applicant to file additional affidavit evidence in response to the respondent's submissions on section 50 of the Act. The applicant therefore filed the Affidavit of George Melville dated November 28, 2000.

THE RESPONDENT'S EVIDENCE

[13]            In response, the respondent filed the following affidavits:

·           Affidavit of F. Warren Ellish, Vice-President, Marketing of Boston Chicken International, dated August 7, 1995;

·           Affidavit of John Plessas, President of Boston Seafoods Inc., dated July 20, 1995;

·           Affidavit of Alan L. Ross, Student-at-Law, dated July 13, 1995;

·           Affidavit of Jack Trapp, Owner, A & A Surplus, dated August 4, 1995;

·           Affidavit of Adam Joseph, Law Student, dated August 3, 1995;

·           Affidavit of Thomas J. Denholm, Student-at-Law, dated August 8, 1995;

·           Affidavit of Michael F. Morgan, Student-at-Law, dated August 1, 1995;

·           Affidavit of Jennifer Leah Stecyk, Trade-mark Searcher, dated January 30, 1996.

[14]            The respondent also cross-examined the applicant's witness George Melville and filed in support of its position a copy of the transcript of the cross-examination of Mr. Melville and the undertakings therefrom.

ISSUES

[15]            In its application, the applicant raises the following issues:

1.         What protection, if any, should be afforded to the applicant's trade-mark?

2.         As of the date of registration, were the respondent's trade-marks confusing with those of the applicant?

3.         Was the respondent entitled to secure registration of its trade-marks?

4.         As of the date of this application, were the respondent's trade-marks distinctive of the respondent's services in accordance with section 18(1)(b) of the Act?

RELEVANT PROVISIONS OF THE TRADE-MARKS ACT, R.S.C. 1985, c. T-13

[16]            The relevant provisions of the Act read as follows:

THE APPLICANT'S SUBMISSIONS

Issue 1: Protection to be Afforded to the Applicant's Trade-mark

[17]            In its Supplemental Memorandum of Fact and Law, the applicant submits that it has established the degree of control necessary to be afforded the wide scope of protection available under subsection 50(1) of the Act. The applicant contends that subsection 50(1) does not require the owner of a trade-mark to enter into a written licence agreement with its licensee, rather, it only requires that the owner of a trade-mark directly or indirectly control the character or quality of the wares and services provided by the licensee. The applicant alleges that services performed by a franchisee pursuant to a franchise agreement is use in compliance with subsection 50(1) of the Act (We Care Health Services Inc. (Re), [1995] T.M.O.B. No. 39 (T.M.O.B.)).

[18]            The applicant submits that it has a comprehensive franchise agreement which controls virtually every aspect of its franchisee's operations and which is supplemented by an operations manual, memorandums and inspections to ensure that quality control is achieved. The applicant claims that many sections of the franchise agreement, listed at paragraph 9 of the applicant's Supplemental Memorandum of Fact and Law, control the franchisee. The applicant also contends that the second affidavit of George Melville, at paragraphs 2 to 14, explains how the applicant exerts close and continuous control over its franchisees' business. The applicant alleges that the franchise agreement sets out in detail the type of control which the applicant will exercise over its franchisees with respect to the character and quality of their wares and services. The applicant also submits that the franchise agreement empowers it to take the necessary steps to ensure that the standards of quality are met, and that if the standards of quality are not met, the applicant may terminate its franchises.

[19]            With respect to the entities mentioned by the respondent which had not been registered as trade-mark users, the applicant contends that it was not specifically drawn to the need to provide evidence with respect to the entities in question since they were not specifically referred to in the respondent's Memorandum of Fact and Law. The applicant submits that it could have provided a copy of every franchise agreement to which it is a party, but that with more than 150 franchisees this would have been a burden for the applicant, as well as for the Court. The applicant concludes that it has demonstrated that it exercises control over the quality of the wares and services provided by its franchisees, and that, accordingly, the use of the applicant's trade-marks by its franchisees is within the scope of section 50 and use of its trade-marks by its franchisees enures to its benefit.

Issue 2: Confusion

[20]            With respect to the first factor set out in subsection 6(5) of the Act, inherent distinctiveness, the applicant submits that while the trade-mark BOSTON PIZZA is not inherently distinctive, it has acquired a distinctiveness based upon 30 years of using and marketing the name. The applicant contends that the trade-mark BOSTON PIZZA has acquired distinctiveness in that it is recognized by the public as a nationwide chain of franchised restaurants which serves food prepared in the "Boston style", and that it therefore requires a wide scope of protection.

[21]            The applicant claims that in contrast, the BOSTON CHICKEN trade-mark has not been used in Canada and is not well known, and therefore has acquired no distinctiveness and should be afforded little protection. The applicant alleges that based on its use in Canada, the respondent has not distinguished its trade-mark from the names of other restaurants using the "Boston" name.

[22]            As to the second factor, length of time in use, the applicant points out that the BOSTON PIZZA trade-mark has been used in Canada since 1965 and has been registered since 1970, but that the BOSTON CHICKEN trade-mark was registered in 1992. Therefore, the applicant submits that the BOSTON PIZZA trade-mark should be accorded substantial protection compared to the BOSTON CHICKEN trade-mark.

[23]            With regard to the third factor, nature of the wares and services, the applicant submits that both the applicant and the respondent are engaged in the same business, the franchising and operating of restaurants. The applicant contends that the nature of the wares and services provided by the applicant and the respondent is so similar that confusion is likely. The applicant points out that the Trade Marks Opposition Board has consistently refused applications for trade-marks for restaurants when they would be confusing with pre-existing marks (Boston Pizza International v. Boston Seafood House Ltd. (1988), 23 C.P.R. (3d) 564 (T.M.O.B.); Foodcorp Ltd. v. Hardee's Food Systems Inc. (1981), 66 C.P.R. (2d) 217 (T.M.O.B.); Restaurant Au Chalet Suisse Inc. v. Cara Operations Ltd. (1988), 20 C.P.R. (3d) 331 (T.M.O.B.); Old Spaghetti Factory Canada Ltd. v. Spaghetti House Restaurants Ltd. (1999), 2 C.P.R. (4^th) 398 (T.M.O.B.)).

[24]            With respect to the fourth factor, the nature of the trade, the applicant submits that both the applicant and the respondent franchise and operate restaurants, offer a similar product and seek to appeal to similar markets, which is likely to lead to confusion.

[25]            Finally, as to the fifth criteria, the degree of resemblance, the applicant submits that when assessing confusion between trade-marks, the first word or syllable in a mark is more important for the purpose of distinction than those that follow (Conde Nast Publications Inc. v. Union des Éditions Modernes (1979), 46 C.P.R. (2d) 183 (F.C.T.D.); Everex Systems Inc. v. Everdata Computer Inc. (1992), 44 C.P.R. (3d) 175 (F.C.T.D.)). The applicant contends that since it already operates under a number of names, for example Boston Pizza, Boston Pizza Quick Express, and BP's Lounge, it is not unlikely that the average member of the public might assume that the respondent is merely another manifestation of the applicant. According to the applicant, this is particularly likely since the applicant and the respondent target the same clientele. The applicant alleges that members of the restaurant going public may presume that the respondent is an extension of the applicant directed at members of the public who prefer chicken over pizza.

[26]            The applicant submits that pursuant to paragraphs 18(1)(a) and 12(1)(d) of the Act, the registration of a trade-mark is invalid if the trade-mark is not registrable, which is the case if the trade-mark is confusing with a registered trade-mark. The applicant contends that the BOSTON CHICKEN trade-mark is likely to be confused with the BOSTON PIZZA trade-mark since it is not inherently distinctive, has not been used in Canada and is to be used in connection with a similar business to that of the applicant. Accordingly, the applicant contends that the BOSTON CHICKEN trade-mark is invalid and should be expunged from the register.

Issue 3: Was the Respondent Entitled to Register the Trade-mark?

[27]            Finally, the applicant submits that the respondent was not entitled to register its trade-mark pursuant to paragraph 16(1)(a) of the Act since its trade-mark was confusing with the applicant's trade-mark already in use in Canada. The applicant points out that its trade-mark has been in use in Canada since at least 1965 and was registered in 1970, whereas the respondent's trade-marks were registered in Canada in 1992.

Issue 4: Distinctiveness

[28]            The applicant submits that the respondent's trade-marks do not distinguish the wares and services with which they are used from the wares and services offered by others. The applicant contends that the respondent's mark BOSTON CHICKEN refers to a geographic location coupled with a food product and that since there are at least four other restaurants in Canada with a trade name which includes the word "Boston", the respondent's mark is not distinctive. The applicant claims that by contrast, its mark is distinctive because the public associates "Boston style" food with the applicant due to its active use of the mark (Petro-Canada v. UPI Inc., [2000] T.M.O.B. No. 32 (T.M.O.B.)).

[29]            Furthermore, the applicant submits that when a trade-mark does not distinguish its wares or services from the wares or services of others it is not distinctive and cannot be registered (Williams Companies Inc. v. William Tel. Ltd., [1999] T.M.O.B. No. 240 (T.M.O.B.)). According to the applicant, the trade-mark BOSTON CHICKEN does not distinguish its wares or services from other restaurants using the word "Boston" as part of their trade-mark or trade-name, including BOSTON PIZZA.

[30]            Therefore, the applicant contends that the registration of the trade-mark BOSTON CHICKEN is invalid since it was not distinctive at any time, including the date of commencement of these proceedings, and that the respondent's trade-marks should be expunged from the register.

THE RESPONDENT'S SUBMISSIONS

Issue 1: Protection to be Afforded to the Applicant's Trade-mark

[31]            The respondent submits that in order for use of a mark by a licensee to be deemed to be a use by the owner, it is necessary for the owner to prove the fact of the licence and sufficient quality control over the licensees' wares or services (Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (1999), 4 C.P.R. (4^th) 71 (F.C.T.D.) at 83; MCI Communications Corp. v. MCI Multinet Communications Inc. (1995), 61 C.P.R. (3d) 245 (T.M.O.B.)).

[32]            The respondent contends that the applicant has failed to establish that all licensed use of the trade-mark BOSTON PIZZA has been either pursuant to a registered user registration (required before the Act was amended in 1993 with retroactive effect) or under circumstances in which section 50 of the Act applied. The respondent therefore alleges that the scope of protection to be accorded to the applicant's trade-mark BOSTON PIZZA, if any, must be very narrow.

[33]            In its Supplementary Memorandum of Fact and Law, the respondent submits that among the third party users which were using the trade-mark BOSTON PIZZA, there were seven entities which had been using that trade-mark since as early as 1971 and which had never been recorded as registered users and in respect of which there was no evidence of control over the character or quality of their services. Five of these entities are listed at paragraph 2 of the respondent's Supplementary Memorandum of Fact and Law.

[34]            The respondent contends that the second affidavit of George Melville provides general evidence of the license agreements that the applicant has entered into with its franchisees, but fails to show that the specific entities identified in paragraph 2 were licenced by the applicant or its predecessor in title. In the alternative, if the second affidavit of George Melville can be taken as evidence that such entities were licensed by the applicant or its predecessor in title, the respondent submits that the affidavit does not show any terms or conditions of such licences.

[35]            The respondent alleges that since the applicant was provided with the opportunity to furnish supplementary evidence had specific examples of the defects in its evidence and has failed to furnish any evidence to address such defects, the scope of protection, if any, to be afforded to the applicant's trade-mark BOSTON PIZZA must be very narrow (Chalet Bar B-Q (Canada) Inc. v. Foodcorp Inc. (1982), 66 C.P.R. (2d) 56-68 (F.C.A.)).

Issue 2: Confusion

[36]            With respect to the first factor set out in subsection 6(5) of the Act, inherent distinctiveness, the respondent submits that where a mark describes the wares or their geographic designation, less protection will be afforded to the mark (Prince Edward Island Mutual Insurance v. Insurance Co. of Prince Edward Island (1999), 86 C.P.R. (3d) 342 (F.C.T.D.) at 352; United Artists Corp. v. Pink Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.) at 259; California Fashion Industries, Inc. v. Reitmans (Canada) Ltd. (1991), 38 C.P.R. (3d) 439 (F.C.T.D.) at 445-447). The respondent also contends that where a mark is comprised of a descriptive term, such as a style of food, it will be considered a weak mark and not inherently distinctive (A. Lassonde Inc. v. Canada (Registrar of Trade-marks) (2000), 5 C.P.R. (4^th) 517 (F.C.T.D.) at 525; General Motors v. Bellows (1949), 10 C.P.R. 101 (S.C.C.); United Artists Corp., supra at 268-271).

[37]            Furthermore, the respondent maintains that where a party adopts a trade-mark which is comprised of both a description of the wares or services and a geographical designation, the mark will not be considered inherently distinctive and will be afforded little protection (In re Broadway Chicken, Inc., Serial No. 74/326,626 at p. 18 (Trademark Trial and Appeal Board, U.S. Department of Commerce, Patent and Trademark Office)). According to the respondent, such marks may co-exist with other marks without giving rise to a likelihood of confusion. The respondent contends that where a party adopts a descriptive mark, such as a geographical location or style of food, the party must accept that a certain amount of confusion may arise, since in such cases, confusion is almost inevitable (Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 56 C.P.R. (3d) 129 (Alta Q.B.) at 183).

[38]            The respondent submits that the evidence indicates that a number of restaurants chose a trade-mark containing the word "Boston" to associate its services with food derived from the City of Boston. The respondent claims that the applicant's trade-mark BOSTON PIZZA is not inherently distinctive because it suggests a style or type of pizza associated with the city of Boston. According to the respondent, as a result, the applicant's mark should not be afforded a wide scope of protection.

[39]            As to acquired distinctiveness, the respondent contends that although the trade-marks BOSTON CHICKEN and BOSTON CHICKEN Design have not been extensively used in Canada, the marks have become known to consumers by virtue of "spillover" advertising and publicity generated by the respondent's success.

[40]            With respect to the second factor, the length of time the trade-marks have been in use, the respondent submits that its trade-marks have been used in Canada since at least as early as 1995 in association with catering services and advertised in Canada since as early as the late 1980s. The respondent contends that the trade-mark BOSTON PIZZA has been used in conjunction with restaurants featuring pizza since approximately 1968, but that although the applicant is able to show prior use of the trade-mark BOSTON PIZZA, it is unable to establish exclusive use of the mark, nor that all rights to the mark have been consolidated in the applicant.

[41]            With regard to the third and fourth factors, the nature of the wares and services and the nature of the trade, the respondent submits that there is considerable overlap between the services of the parties, since its trade-marks are registered for use in association with take-out restaurant and catering services and the applicant's trade-mark BOSTON PIZZA is registered in association with restaurant services and the franchising of services, as well as pizza and spaghetti.

[42]            As to the fifth factor, the degree of resemblance, the respondent submits that although it is well established that the degree of resemblance between the marks is an important factor to consider in assessing the likelihood of confusion, it is not the most important factor to consider when assessing marks with common words and geographical indicators (California Fashion Industries, Inc., supra at 446). The respondent contends that it is well established that marks with common words may be distinctive if the difference within the marks serve to dominate the common elements, and that the distinctive element of each trade-mark is the differences within the marks and not the common words (United Artists Corp., supra at 262-263; (California Fashion Industries, Inc., supra at 445-446; Ikea Ltd./Ikea Ltée v. Idea Design Ltd. (1987), 13 C.P.R. (3d) 476 (F.C.T.D.) at 478; Sunshine Village Corp. v. Sun Peaks Resort Corp., [2000] T.M.O.B. No. 102 (Q.L.); Phantom Industries Inc. v. Sara Lee Corp., [2000] T.M.O.B. No. 112 (Q.L.); United States Polo Assn. v. Polo Ralph Lauren Corp., [2000] F.C.J. No. 1472 (F.C.A.) at para 44).

[43]            The respondent claims that in the case at issue, although both marks are used in association with restaurant services, they relate to different styles of food which is clearly indicated within the marks, BOSTON CHICKEN and BOSTON PIZZA. The respondent alleges that the difference in the nature of the wares to which the marks relate is sufficient to make each mark distinctive, despite any similarity in resemblance, and is unlikely to cause confusion among Canadian consumers.

[44]            Finally, with respect to additional surrounding circumstances, the respondent submits that evidence of third party use of a word or trade-mark which is similar to an opponent's trade-mark may limit the scope of protection afforded to the opponent's mark if it can be inferred from the evidence that consumers are so accustomed to seeing similar marks or marks having a common element in respect of the same wares or services that they have become accustomed to making fine distinctions between the marks (United States Polo Assn., supra at para 25).

[45]            The respondent contends that the evidence shows significant third party use of the word "Boston" within the restaurant industry, for which the applicant has been unable to adduce any evidence of confusion. The respondent claims that it is thus reasonable to conclude that the evidence of third party use is sufficient to establish that Canadian consumers are so accustomed to seeing the word "Boston" that they would make fine distinctions between the respondent's trade-mark and other trade-marks, such as those belonging to the applicant. The respondent alleges that a lack of evidence establishing confusion with similar third party marks is an important factor to consider in determining the likelihood of confusion (Baylor University v. Hudson's Bay Co., [2000] F.C.J. No. 984 (F.C.A.) at para 37).

[46]            Therefore, the respondent submits that the trade-mark BOSTON CHICKEN is no less confusing that other marks used by third parties, including BOSTON CAFÉ, BOSTON SEAFOOD HOUSE, BOSTON CHINESE FOOD and BOSTON RESTAURANT. According to the respondent, there is no reason to believe that its trade-marks would be any more confusing that any of the other "Boston" marks are used by third parties.

[47]            The respondent also contends that having regard to the proliferation of trade-marks of third parties which include the word "Boston", the applicant cannot claim protection for its trade-marks as a family of marks. The respondent alleges that protection for a family of marks containing a common feature should be denied if it is shown that such a feature is also common to trade-marks of others (Techniquip Ltd. v. Canadian Olympic Association (1999), 3 C.P.R. (3d) 298 (F.C.A.) at 303-304; Canadian Olympic Association v. Olymel, Société en commandite, [2000] F.C.J. No. 842 (F.C.T.D.)).

[48]            The respondent therefore submits that there was no likelihood of confusion between its trade-marks and the applicant's trade-mark BOSTON PIZZA at the time of registration of the respondent's trade-marks.

Issue 3: Was the Respondent Entitled to Register the Trade-marks?

[49]            The respondent makes no specific submissions with respect to this issue.

Issue 4: Distinctiveness

[50]            The respondent submits that the onus is on the applicant to establish want of distinctiveness of the respondent's trade-marks. The respondent contends that the applicant has not met that burden, and has failed to establish any other ground for a lack of distinctiveness other than a likelihood of confusion. The respondent claims that as there is no likelihood of confusion, there is no want of distinctiveness (Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R. (3d) 289 (F.C.A.) at 297-298).

ANALYSIS

[51]            I begin my analysis with the subsection 50(1) issue which, for ease of reference, I again reproduce:

[52]            Subsection 50(1) requires the owner of a trade-mark, who has licensed an entity to use its trade-mark, to exercise, under the license, direct or indirect control of the character or quality of the wares or services associated with the trade-mark. If the owner of the trade-mark meets that requirement, the use thereof by the licensed entity is deemed to have been use by the owner of the trade-mark. Both sides agree that subsection 50(1) has a retroactive effective.

[53]            The respondent's argument is to the effect that the applicant's trade-mark BOSTON PIZZA, registration no. TMA 171, 428, should be afforded little protection, distinctiveness having been lost by reason of the use of the trade-mark by franchisees who, prior to 1993, were not properly registered^[1], and since June 9, 1993, by reason of the applicant's failure to demonstrate sufficient control, direct or indirect, over the character or quality of the wares or services provided by the franchisees.

[54]            In support of its position, the applicant has filed the Affidavits of George Melville, sworn February 24, 1995 and November 28, 2000. Attached to Mr. Melville's Affidavit of November 28, 2000 are copies of franchise agreements entered into by the applicant with franchisees since 1968.

[55]            Mr. Melville states in his second Affidavit that the applicant currently has approximately 150 franchisees across Canada, and that it exercises close control over its franchisees, particularly with respect to the decor and the nature and quality of the food and services provided by the franchisees.

[56]            It is undeniable that the applicant, through its comprehensive franchise agreement, purports to control every aspect of the franchisee's operations. This agreement is supplemented by the applicant's Operations Manual, memoranda and inspections, which serve to ensure that quality control is achieved. The agreement further provides that the applicant is entitled to enter the franchisee's premises so as to verify compliance by the franchisee with its obligations. Failure to comply by the franchisee constitutes an event of default which allows the applicant, at its option, to terminate the agreement.

[57]            I am therefore of the view that the applicant meets the requirements set out at subsection 50(1) of the Act, in that the applicant exercises control, through its licensing agreement, of the character or quality of the wares and services associated with the use of its trade-mark by the franchisees.

[58]            In support of its position, the respondent referred me to the decision of Evans J. (as he then was) in Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (2000), 4 C.P.R. (4th) 71, and to the decision of Trade-marks Opposition Board in MCI Communications Corp. v. MCI Multinet Communications Inc. (1995), 61 C.P.R. (3d) 245. These cases stand for the proposition that a licensor must exercise actual control over its licensees in order to benefit from their use of the mark. I agree with counsel for the applicant that these cases can be distinguished, from the case before me, on the ground that in Cheung Kong and in MCI Communications, the licensors did not have a formal license agreement with their licensees. In the present matter, the applicant, through its franchise agreement, controls almost every aspect of the franchisee's operations. Coupled with the applicant's Operations Manual, memoranda and inspections, the system in place allows the applicant to exercise effective control with respect to the quality of the wares and services provided by the franchisee.

[59]            Further, the respondent submits that seven entities, third-party users of the trade-mark BOSTON PIZZA, were never registered as users of the trade-mark prior to June 9, 1993, and that consequently, in respect of these entities, the applicant has offered no evidence of control over the character or quality of their wares and services.

[60]            In his second Affidavit, Mr. Melville states that the applicant, from the outset, has required franchisees to execute written franchise agreements. He further states that as a representative of the applicant since 1983, he is aware that all franchisees have in fact signed a franchise agreement. In the circumstances, I am satisfied that the applicant effectively controls the nature or quality of the wares and services provided by the franchisees in association with the trade-mark.

[61]            I now turn to the other issues, which boil down to one issue, whether the respondent's trade-marks are confusing with those of the applicant. The relevant date for that determination is the date of registration of the respondent's marks which the applicant seeks to expunge.

[62]            The use of a trade-mark will cause confusion with another trade-mark if the use of both trade-marks, in the same area, would likely lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class. In determining whether confusion is likely, this Court is to have regard to all of the surrounding circumstances, including the criteria set out at subsection 6(5) of the Act.

[63]            At paragraph 54 of his first memorandum, counsel for the respondent lists a number of "practical guidelines"^[2] which this Court has applied in determining the likelihood of confusion:

(i)            The court is to put itself in the position of an average consumer of services who is familiar with the earliest mark but has an imperfect recollection of it.

(ii)           The question the court must ask is whether the ordinary customer will, on seeing the later mark, infer as a matter of first impression that the services with which the second mark is used are in some way associated with the services of the earlier mark.

(iii)          The trade-marks at issue must be considered in their totality. Since it is the combination of elements that constitutes a trade-mark and gives distinctiveness to it, it is not correct to lay the trade-marks side by side and compare and observe similarities or differences among the elements of the marks when applying the test of confusion. On the contrary, a trade-mark must be examined as a whole, and not dissected. Trade-marks may be different from one another and not confusing when viewed in their totality even if there are similarities in some of the elements when viewed separately.

(iv)          When determining the distinctiveness of a trade-mark, the trade-mark must not be considered in isolation but in association with the wares or services with which they are used.

(v)           the enumerated factors in subsection 6(5) need not be attributed equal weight. The courts have recognized that each particular case of confusion might justify greater emphasis being given to one criterion than to others.

[64]            I should state, before proceeding further, that in expungement proceedings, the burden of proving the likelihood of confusion rests on the applicant.

[65]            I now turn to the criteria set out at subsection 6(5) of the Act. In my view, it is not necessary to go into a detailed analysis of these criteria in respect of the respondent's trade-mark BOSTON CHICKEN logo. That trade-mark, in my view, cannot likely be confused with the applicant's trade-mark. Consequently, the discussion that follows concerns only the respondent's BOSTON CHICKEN trade-mark.

[66]            I commence with paragraph 6(5)(a) - the inherent distinctiveness of the trade-marks or trade names and the extent to which they have become known. Neither the applicant's mark, nor that of the respondent is inherently distinctive. I adopt, in that regard, the words of Rouleau J. in Prince Edward Island Mutual Insurance v. Insurance Co. of Prince Edward Island (1999), 86 C.P.R. (3d) 342, where the learned judge states the following at paragraphs 32, 33 and 34:

[32]         With respect to the first factor in subsection 6(5) of the Act, inherent distinctiveness of the trade marks in question, it is well established that marks which contain descriptive words are not inherently distinctive and will be afforded only a minimal degree of protection by the Court. In particular, trade marks or trade names which contain a reference to a geographic location, such as those in issue here, are descriptive rather than distinctive and do not deserve a wide ambit of protection. Where the court is called upon to determine the "likelihood of confusion" in respect of a descriptive name or mark, even small differences between the marks will be sufficient to diminish the "likelihood of confusion".

[33]         Furthermore, where a party adopts a descriptive name, it must accept that a certain amount of confusion may arise. In Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 56 C.P.R. (3d) 129 (Alta. Q.B.); affirmed (1996) 67 C.P.R. (3d) 444 (Alta. C.A.); the Court made the following comments in this regard at p. 183:

Even where services are identical, where the name is descriptive rather than distinctive, a certain amount of confusion may be inevitable without sanction ... Office Cleaning Services Ltd. v. Westminster Window and Sign General Cleaners Ltd., supra. In the latter authority, Lord Simonds, at p. 41, said:

"So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be ... It comes in the end, I think, to no more than this, that where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must run unless the first user is allowed unfairly to monopolize the words. This Court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered."

[34]         In the present case, the plaintiff's name is highly descriptive (Insurance Company) and includes a descriptive geographic element (Prince Edward Island). Accordingly, it is not entitled to a high degree of protection and it must accept the inevitable risk of some confusion in the use of such a highly descriptive...

[67]            In the present matter, there is considerable evidence of third-party use of trade names/marks containing the word BOSTON. In effect, a great number of restaurants operate under the banner of "Boston" to associate their services and wares with food derived from the city of Boston. The Affidavits filed by Alan L. Ross, John Plessas, Jack Trapp, Adam Joseph and Michael F. Morgan, provide ample evidence in that regard. To name but a few, there is the Boston Café Restaurant and Tavern in Hawkesbury, Ontario, the Boston Seafood House in Burlington, Ontario, the Boston Café in Kingston, Ontario and finally, the Boston Harbour Seafood in Peterborough, Ontario.

[68]            Although the applicant's mark is not inherently distinctive, the applicant has satisfied me that through long use, the mark has acquired distinctiveness in connection with a chain of franchise restaurants which serve food prepared in a "Boston style". Consequently, the mark is worthy of protection.

[69]            As to the trade-mark BOSTON CHICKEN, there is considerable evidence of that mark's widespread public recognition in the United States in association with Boston Chicken restaurants which offer home style food, available on a take-out basis. However, with respect to the use of the trade-mark in Canada, there is not much evidence, save for the statement by Mr. Warren Ellish, in his Affidavit of August 7, 1995, that in May 1995, the respondent commenced use of its trade-mark BOSTON CHICKEN in Canada by performing catering services in Windsor, Ontario. Thus, in the circumstances, the trade-mark BOSTON CHICKEN deserves little protection.

[70]            With respect to the second criteria set out at subsection 6(5) - the length of time the trade-marks or names have been in use, this factor no doubt favours the applicant's trade-mark BOSTON PIZZA.

[71]            With regard to the third criteria, there is considerable overlap between the services provided by the parties. The respondent's marks are registered for use in association with take-out restaurant and catering services, while the applicant's trade-mark BOSTON PIZZA is registered in association with restaurant services, and the franchising of services, as well as pizza and spaghetti.

[72]            I now turn to the fifth factor - the degree of resemblance between the trade marks or names in appearance. The applicant submits that since it operates under a number of names, for example Boston Pizza, Boston Pizza Quick Express and BP's Lounge, the likelihood is that the average member of the public will assume that the respondent is just another manifestation of the applicant. I cannot agree. I prefer and adopt the view expressed by counsel for the respondent at paragraph 69 of his first memorandum, where he submits that the applicant's and the respondent's marks relate to different styles of food, namely, pizza and chicken. Counsel adds that the difference in the nature of the wares, to which the marks relate, is sufficient to distinguish the marks, despite any similarity and resemblance.

[73]            In support of this proposition, I refer to the decision of the U.S. Trademark Trial and Appeal Board in Re Broadway Chicken, Inc., Serial No. 74/326,626, where the issue before the Appeal Board was whether the trade-mark BROADWAY CHICKEN was confusing with the registered trade-mark BROADWAY PIZZA (with PIZZA disclaimed) for restaurant services and BROADWAY BAR & PIZZA (with BAR & PIZZA disclaimed) for restaurant and bar services. In concluding that confusion was not likely, the Appeal Board, at pages 16, 17 and 18, made the following remarks:

We turn now to the issue of likelihood of confusion presented in this case. Because te identification of services in applicant's application (i.e., "restaurant services") is identical to that in registrant's registration for the mark BROADWAY PIZZA, and is in part identical and otherwise closely related to that in registrant's registration for the mark BROADWAY BAR & PIZZA ("restaurant and bar services"), no distinction can be drawn between the services of the parties for purposes herein. Indeed, applicant does not argue otherwise. Thus, the only issue remaining to be determined is whether the contemporaneous use of applicant's mark BROADWAY CHICKEN and registrant's marks BROADWAY PIZZA and BROADWAY BAR & PIZZA in connection with restaurant services is likely to cause confusion.

Evidence of widespread third-party use, in a particular field, of marks containing a shared term is competent to suggest that purchasers have been conditioned to look to the other elements of the marks as a means of distinguishing the source of goods or services in the field. [references omitted]

In the present case, applicant's mark, BROADWAY CHICKEN, and registrant's marks, BROADWAY PIZZA and BROADWAY BAR & PIZZA, all consist of the same initial term, BROADWAY, plus descriptive or generic matter. Ordinarily, these similarities, combined with the identity in the services, would point to a finding of likelihood of confusion. However, the marks, considered in their entireties, are readily distinguishable from one another due to the differences in their remaining elements. Further, at least half, if not more, of the third-party telephone directory listings of enterprises whose trade names/marks contain the term BROADWAY have listed addresses on a street, road, avenue, etc., named "Broadway." To purchases familiar with these enterprises, the term BROADWAY will have a geographic significance. We also note that the term BROADWAY is defined in The Random House Dictionary of the English language (Second Edition Unabridged 1987) as, inter alia, "a street in New York City, famous for its theaters, restaurants and bright lights."

This is a very close case.    However, viewed together with the differences in the marks, and the geographic significance of the term BROADWAY, applicant's evidence of widespread third-party use of trade names/marks containing the term BROADWAY for restaurant/"eating place" services and closely related goods and services, as well as for unrelated goods and services, is sufficient for purposes of this ex parte proceeding, to persuade us that confusion is not likely to result from the contemporaneous use of applicant's mark BROADWAY CHICKEN and registrant's marks BROADWAY PIZZA and BROADWAY BAR & PIZZA in connection with restaurant services.

[74]            Lastly, having regard to all of the surrounding circumstances, the use by third parties of the word "Boston" is, in my view, a highly relevant factor in determining the likelihood of confusion between the applicant's and the respondent's trade-marks. Malone J.A., in dealing with this issue in United States Polo Assn v. Polo Ralph Lauren Corp., [2000] F.C.J. No. 1472 (F.C.A.), made the following remarks at paragraph 25 of his Reasons:

[25]         The presence of a common element in trade-marks (ie the horse and polo mallet in this case) has been held in other cases to have an important effect on the issue of confusion. As stated by the Comptroller General in Harrods Ltd. - In the Matter of an Application by - to Register a Trade Mark (1934), 52 R.P.C. 65 at 70:

Now it is well recognised principle, that has been taken into account in considering the possibility of confusion arising between any two trade marks, that, where those two marks contain a common element [i.e. Boston] which is also contained in a number of other marks in use in the same market, such a common occurrence in the market tends to cause purchasers to pay more attention to the other features of the respective marks and to distinguish between them by those other features.

[75]            The above comments are in line with those of the U.S. Trademark Trial and Appeal Board in Re Broadway Chicken. The evidence adduced by the respondent, as I have already indicated, shows significant third-party use of the word "Boston" within the restaurant industry. In regard thereto, the applicant did not adduce any evidence so as to demonstrate confusion or the likelihood thereof. In the light of the authorities and the evidence before me, I must conclude that Canadian consumers "have been conditioned" to look to the other elements of a mark as a means of distinguishing the source of goods or services in their field. In other words, Canadian consumers would look not to the word "Boston", but to the words "Pizza" and "Chicken" and would therefore distinguish the trade-marks on that basis.

[76]            I am therefore of the view that at the time of the registration of the respondent's trade-mark BOSTON CHICKEN and the BOSTON CHICKEN logo, there was no likelihood of confusion between the applicant's trade-mark BOSTON PIZZA and the respondent's marks. In any event, the applicant has failed to meet its burden of demonstrating the likelihood of confusion.

[77]            For these reasons, this application to expunge the respondent's trade-marks shall be dismissed with costs in favour of the respondent.

                                                                                               Marc Nadon

                                                                                                       JUDGE

O T T A W A, Ontario

September 17, 2001