Vogue Brassière Inc. v. Sim & Mcburney, docket T-1372-96

Date: 20000111

Docket: T-1372-96

IN THE MATTER OF an appeal pursuant to Section 56

of the Trade-Mark Act, R.S.C. 1985, c. T-13, as amended,

from a decision of the Registrar of Trade-marks dated

April 10, 1996, to expunge Registration No. 358,156

for the trade-mark VOGUE DESSOUS

BETWEEN:

VOGUE BRASSIERE INCORPORATED

Applicant

-and-

SIM & McBURNEY and THE

REGISTRAR OF TRADE-MARKS

Respondents

     REASONS FOR ORDER

CULLEN, J.

INTRODUCTION

[1]      This is an appeal pursuant to section 56 of the Trade-marks Act from a decision of the Registrar of Trade-marks dated April 10, 1996 to expunge registration for the trade-mark VOGUE DESSOUS (the "trade-mark") pursuant to section 45 of the Trade-marks Act (the "Act").

FACTS

[2]      The appellant, Vogue Brassiere Inc, manufactures, distributes and advertises ladies" undergarments, in association with a family of Vogue trade-marks. The trade-mark, Vogue Dessous, is registered for the following wares: "ladies undergarments, namely, brassieres, girdles, bikinis, tangas, camisoles, slips, half slips, bodysuits, teddies, garter belts and bustiers."

[3]      The appellant has sold ladies" undergarments in Canada in association with the trade-marks for many years (since 1989), through the date of the registrar"s notice to expunge the trade-mark, pursuant to section 45 of the Act, to the present. The trade-mark has been made known in Canada by the appellant by various advertising activities.

[4]      At the request of Sim & McBurney, on November 15, 1993, the Registrar of Trade-marks (the "Registrar") forwarded a notice pursuant to section 45 of the Act to the appellant, the registered owner of the trade-mark. Following this notice, the appellant filed an affidavit sworn February 2, 1994.

[5]      In a written decision dated April 26, 1996, the Registrar decided to expunge the trade-mark. The Registrar concluded that the evidence contained in the Piltz (President of the appellant) affidavit showed use of the trade-mark in Canada but that, as all garments submitted in evidence bore a hang tag of "Vogue Dessous International Inc." ("VDI"), the Registrar was not satisfied that retailers would perceive the appellant as owner of the trade-mark. The Registrar concluded that had the evidence shown use that accrued to the appellant, the Registrar would have concluded that it was sufficient to maintain the registration for the trade-mark in association with all of the wares with the exception of slips and half slips.

[6]      The appellant filed a Notice of Appeal of the Registrar"s decision on June 10, 1996. Two additional affidavits have been filed: the supplementary affidavit of Frank Piltz (the new evidence on appeal) and the affidavit of Christine de Lint. The Registrar advised that it is taking no position on this appeal.

[7]      Between 1989 and July 1991, undergarments bearing the trade-mark were sold only in Canada. The evidence shows that slips and half slips were fashionable as recently as 1991, however, neither the appellant nor its direct competitors had slips or half slips for sale in retailers in 1993. Therefore, the appellant has not sold these items since 1991, but it was indicated that the appellant will offer these items again when demand arises.

[8]      Between November 15, 1990 and November 15, 1993, in addition to the trade-mark, every undergarment sold by the appellant in Canada bore the appellant"s unique Canadian garment dealer identification number ("CA identification number") which identifies the appellant as the manufacturer of those undergarments. No corporate name or business name appears on the garment labels. Industry Canada requires dealers to show their identity on garment labelling to enable consumers to identify and communicate with the dealers about a product.

[9]      In July 1991, the appellant began to manufacture garments for the sale in the United States by its wholly-owned subsidiary VDI. ( This name, VDI, identifies the appellant"s wholly-owned subsidiary, which purchases the undergarments exclusively from the appellant and sells them only in the United States.) At first a separate inventory was created bearing information required for the sales in the United States. This continued until May 1992. During the period from July, 1991 to May, 1992, all garments sold in Canada bore the same labelling as described previously. By May, 1992, the appellant determined that maintaining separate inventories of goods for sale in Canada and in the United States was too expensive. Therefore, the appellant began to produce inventory with new sewn-in labels intended to meet both Canadian and American garment label regulatory requirements. This change happened gradually over many months.

[10]      Between May 1992 and November 15, 1993, some, but not all, undergarments sold by the appellant in Canada in association with the trade-mark were marked with labels which bore the appellant"s unique CA identification number along with the corporate name Vogue Dessous International Inc. (VDI). During this period, some of the garments sold in Canada in association with the trade-mark bore: (1) the trade-mark; (2) the appellant"s CA identification number; and (3) no other corporate identification. The labelling for the remainder of the undergarments bore additional information relevant to sale in the United States. The appellant placed the business name Vogue Dessous International Inc. alongside the RN number ( the United States equivalent of the CA number) on the sewn-in labels for goods destined exclusively for sale in the United States, and subsequent to May 1992, on undergarments which might be sold in either Canada or the United States.

[11]      VDI purchases undergarments bearing the trade-mark exclusively from the appellant and sells them in the United States. The undergarments manufactured by the appellant which have tags and labels identifying VDI are allegedly identical in quality to all other undergarments sold in Canada by the appellant.

[12]      Several undergarments are attached as exhibits to the first affidavit of Mr. Piltz, President of the appellant. Some of those items bore sewn-in labels identifying VDI and had hang tags which identified VDI. Other items attached in the affidavit bore sewn-in labels showing the trade-mark, the CA identification number and hang tags identifying VDI. Mr. Piltz affirms that in the inventory current at the time his first affidavit was prepared, he had items with sewn-in labels of the trade-mark and CA identification number without any tag identifying VDI. The items marked as exhibits in his supplementary affidavit are examples of undergarments sold exclusively in Canada, during the relevant period, which only indicate the trade-mark and the CA identification number on the sewn-in labels, but do not have any hang tags of VDI.

ISSUES

[13]      Was the trade-mark in use in Canada during the period from November 15, 1990 to November 15, 1993?

[14]      Did the Registrar err in finding that the CA identification number on the undergarments does not identify the appellant?

ARGUMENTS OF THE APPELLANT

The use of the trade-mark

[15]      The appellant submits that given the fresh evidence adduced, this appeal should be heard as a trial de novo.

[16]      He claims that he has shown that the trade-mark has not fallen into disuse, according to the definition of "use"contained in subsection 2(1) and section 4 of the Act. He submits that it has met the low threshold test under section 45 of the Act, and that it used the trade-mark in Canada in association with the wares during the relevant period. He relies on Austin Nichols & Co. v. Cinnabon , [1998] F.C.J. No.1352 to show that the test of use that the registered owner must meet under s.45 is "not a heavy one". He also affirms that s.45 does not impose upon the registrant the obligation to prove continuous use in Canada.

[17]      He argues that the Court of Appeal has affirmed that evidence of a single sale in the normal course of trade, whether wholesale or retail, may suffice to show use of the trade-mark. He relies on the decision Plough v. Aerosol Filler Inc.¹ which indicated that the evidence of trade-mark use required may be "by the mark being marked on wares or their packages or associated with wares at the time of their sale and delivery in the normal course of trade".

[18]      The appellant submits that the Act does not require the name of the registrant to appear in association with the trade-mark. He stresses that while it is not required to be identified in association with the trade-mark, it was, nonetheless, identified through its unique CA identification number which is allowed under the Textile Labelling Act. He argues that subsection 12(4) of the Regulations made pursuant to the federal Textile Labelling Act permits a manufacturer to use a unique CA identification number on the label of a consumer textile article in place of its name and postal address.

[19]      The appellant further submits that section 45 does not impose the requirement that the registrant demonstrate that it would be "perceived as the owner of the trade-mark" by its customers, since the Act does not require the name of the registrant to appear in association with the trade-mark. The appellant explains that through the use of its CA identification number, a member of the public may easily obtain its name and address.

[20]      Finally, he argues that its use of the trade-mark in Canada in association with the sale of slips and half slips between 1989 and 1991 is sufficient to maintain the registration of these wares as the law is clear that the registered owner need only show some use, not continuous use, during the three-year period in question.

The CA identification number

[21]      It is submitted that the appellant"s unique CA identification number on the sewn-in tags identifies the appellant. As explained before, the appellant stresses that a manufacturer is permitted to identify itself to the public through the use of a CA number. He submits that any member of the public may easily determine the identity and address of the manufacturer from the CA number by calling Industry Canada.

The decision Mayborn Products Limited v. Registrar of Trade-marks

[22]      The appellant argues that the facts of Mayborn Products Limited v. Registrar of Trade-marks make this case distinguishable from the case on appeal and, accordingly, it should not be followed. He contends that unlike Mayborn, at no time did the appellant"s subsidiary sell in Canada.

[23]      The appellant indicates that registrations for trade-marks which are obviously in use are not to be cancelled on a technical ground, and the purpose of section 45 should always be kept in mind. It is submitted that it should not be open to abuse by allowing expungement when the mark is in fact known and used.

The affidavit of Mr. Piltz

[24]      The appellant submits that the Registrar erred in law in considering the evidence of Mr. Piltz which was not properly before him. He states that section 45 provides that only the registered owner may furnish evidence of use of the trade-mark in Canada in association with the wares and services in respect of which it is registered. The only evidence adduced by the appellant before the Registrar was the affidavit of Mr. Piltz.

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ARGUMENTS OF THE RESPONDENT

[25]      The respondent indicates that the new evidence submitted by the appellant on appeal did nothing to disturb this finding, and that there was no specific new evidence relating to slips and half slips.

[26]      The respondent contends that the CA identification number does not identify the registrant or any person to the ordinary consumer of the goods of the registrant at the time of the transfer of the property or possession of the goods. Accordingly, all use should be deemed to have accrued to the benefit of the only person whose name ever appeared on the goods, here VDI, which is not the registrant.

[27]      Alternatively, if the CA number does point to a corporate entity, then the registrant"s activities identified two distinct entities with its use of the trade-mark in Canada. The respondent maintains that the use on goods intended for sale in the United States is use in Canada, which use clearly identified VDI. Therefore, the respondent states that the simultaneous use of the trade-mark in Canada to the benefit of two distinct parties was not distinguishing use of the trade-mark and can not be counted as a use which accrues to the benefit of the appellant.

ANALYSIS

The use in Canada

[28]      The central issue in this case involves the "use it or lose it" provision found in section 45 of the Act. Essentially, the Court has to determine whether the Registrar erred in the findings which supported his conclusion to expunge the trade-mark. The appellant argued that the evidence filed by the registrant did show use of the trade-mark "Vogue Dessous" in the normal course of trade, pursuant to section 4 of the Act.

[29]      Section 2 of the Act refers to section 4 to define the word "use". Section 4 of the Act reads:

4(1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.

[30]      As it was confirmed by the Court of Appeal in Meredith & Finlayson², s. 45 provides a simple and expeditious procedure for clearing the register of trade-marks which are not bona fide claimed by their owners as active trade-marks. The case law seems very clear on the purpose of s. 45, which is described as one of removing the "deadwood" from the register.

This section [section 45] does not contemplate a determination on the issue

of abandonment but rather simply places on the registered owner of the trade

mark the onus of furnishing evidence of use in Canada or special circumstances excusing non-user3

[31]      Justice Hugessen stated in Meredith & Finlayson, mentioned above:

[section 45] is not intended to provide an alternative to the usual inter partes attack

on a trade mark envisaged by s.57. The fact that an applicant under s.45 is not even required to have an interest in the matter speaks eloquently to the public nature of theconcerns the section is designed to protect"

[32]      In fact, what section 45 requires is some evidence from the owner describing the use being made of the trade-mark within the meaning of the definition of "trade-mark" in section 2 and of "use" in section 4 of the Act. The purpose of this provision is to inform the Registrar in detail of the situation prevailing with respect to the use of the trade-mark "so that he, and the Court on appeal, can form an opinion and apply the substantive rule..." as set out in section 45.⁴

[33]      Since the procedure of s.45 is simply to clear the register of trade-marks which are not bona fide claimed by their owners as active trade-marks, I agree with the appellant that the threshold is very low. Indeed, as the appellant noted, in Austin Nichols & Co Inc v. Cinnabon⁵ Inc. it was affirmed that:

Since the test to be met under section 45 is not a heavy one, it was open to the Trial Judge to find evidence of a prima facie use by Austin Nichols of the trade-mark it had registered.

The Registrar concluded that there was insufficient evidence of use of the trade-mark in Canada, since although all the garments marked as exhibits to Mr. Piltz" affidavit bore the hang tags of VDI, only some of these items also bore sewn-in labels of the trade-mark and CA number. The Registrar decided that had the evidence shown use that accrued to the appellant, he would have concluded that it was sufficient to maintain the registration for the trade-mark in association with all of the wares (with the exception of the slips and half slips). On appeal, Mr. Piltz has filed a supplementary affidavit. Marked as exhibits to the supplementary affidavit are some items produced by the appellant during the relevant period (November 15, 1990 to November 15, 1993) which only indicate the trade-mark and the CA identification number (with no hang tags of VDI). With respect to the difference between the exhibits attached to his first affidavit and the fresh exhibits, he testifies that the items attached to his initial affidavit were selected because they showed a maximum usage of the trade-mark, namely on the hanger, on the label and on the hang tag.

[34]      Mr. Justice McNair in Philip Morris Inc. v. Imperial Tobacco Ltd⁶ stated:

Mere statutory tracking in the nature of a bare statement that the registrant was

currently using the trade mark in the normal course of trade in association with the

wares is insufficient to establish user unless coupled with facts that are descriptively corroborative of the same. Evidence of a single sale, whether wholesale or retail, in

the normal course of trade may well suffice so long as it follows the pattern of a

genuine commercial transaction and is not seen as being deliberately manufactured

or contrived to protect the registration of the trade mark.

[35]      The evidence of the use of a trade-mark required is of the kind referred to in s.4 by the mark being marked on wares or their packages or associated with the wares at the time of their sale and delivery in the normal course of trade. In the present case, the appellant displayed some exhibits, in his supplementary affidavit, of garments which bore the sewn-in label of the trade-mark and the CA number. Mr. Justice Dubé in Empire Clothing⁷ declared that sewn-in labels on garments effectively serve notice to the public of the association of the trade-mark to the wares sold, and thus may show evidence of the use being made of the mark. In Coscelebre⁸, it was stated by Madame Justice Reed:

With respect, I do not think that s.44 (now s.45) imposes on a registrant the obligation to prove continuous use in Canada. It is conceivable that a trade mark owner may have ceased using the mark restarted before a s.44 notice (now s.45) issued and thus be able to prove recent usage. I do not read the jurisprudence as requiring the court or the registrar to find a certain level of commercial activity, in order to prove use."

[36]      Furthermore, as the appellant pointed out, it is affirmed in the decision Novopharm Ltd. v. Monsanto Canada Inc.⁹ that the fact that the registrant"s name does not appear on the goods is irrelevant as the Act does not require the name of the registrant to appear in association with the trade-mark.

[37]      Therefore, in light of the present facts and the abundant jurisprudence on the topic, it seems to me that the appellant has provided sufficient evidence that the trade-mark was in use in Canada during the relevant period. In my view, the requirements outlined in section 45 of the Act were fulfilled, and Mr. Piltz"s supplementary affidavit did show the use being made of the trade-mark in the sense of the definitions in ss.2 and 4.

The slips and half slips

[38]      In Plough (Canada) Limited (supra) it was affirmed that section 45 requires a "declaration to show with respect to each of the wares and services specified in the registration whether the trade-mark is in use in Canada and if not the date when it was last used and the reason for the absence of such use since that date". In this regard, it was again stated in John Labatt Ltd. v. Rainier Brewing Co.¹⁰ that "it [s.45] only requires that, within the specified time-limit, the registered owner furnish an affidavit or statutory declaration showing with respect to each of the wares or services specified in the registration, whether the trade-mark is in use in Canada". Mr. Piltz testifies that slips and half slips were fashionable as recently as 1991, so the appellant did not have these items for sale in retailers in 1993. In fact, the appellant has not sold these garments since 1991, but he has indicated that it will offer these items again when demand arises. The appellant has the onus of showing that the trade-mark was used with respect to all its wares, during the three year period preceding the date of the notice under s.45. In the case at bar, the date of the notice is November 15, 1993, and thus, the relevant period is November 15, 1990 to November 15, 1993. As mentioned before, it was recognized in Philip Morris Inc. v. Imperial Tobacco Ltd. that the evidence of a single sale in the normal course of trade, whether wholesale or retail, may suffice since the evidence should be forthcoming in quality, not quantity. Madam Justice Reed also stated in Coscelebre Inc v. Registrar of Trade Marks¹¹ that it is not required to have a certain level of commercial activity, in order to prove use.

[39]      Mr. Piltz testified that the appellant was selling the slips and half slips up to 1991. The appellant demonstrated that it was selling these items in the normal course of trade, from November 15, 1990 to 1991, therefore, it can be declared that the use of the trade-mark with respect to these items was sufficient to maintain the registration of the trade-mark for all of the appellant"s undergarments.

The CA identification number

[40]      The appellant provided evidence from Industry Canada, such as the Guide to the Textile and Advertising Regulations, which sets out the information that labels need to disclose. It indicates that the CA identification number is sufficient to disclose the manufacturer"s identity. The Textile Labelling and Advertising Regulations (in sections 11 and 12) stipulate that a manufacturer/dealer may use an identification number in place of the manufacturer"s name and postal address. Contrary to the respondent"s submission, the CA number on the labels adequately provides the manufacturer"s identity.

SUMMARY

[41]      As counsel for the appellant correctly stated, it is trite law that the purpose of section 45 of the Act is simply to remove "deadwood" from the trade-marks register. Its threshold is very low. Under s.45, the appellant has the onus of showing that the trade-mark was used with respect to its undergarments, during the three-year period (from November 15, 1990 to November 15, 1993). (Distinctiveness is not an issue in a section 45 proceeding.)

[42]      Counsel for the applicant clearly demonstrated that Plitz"s new evidence (its supplementary affidavit) showed that all undergarments sold in Canada, during the relevant period, bore the CA number which identifies the appellant. It was demonstrated that from November 1990 to May 1992, all undergarments bore the trade-mark and the CA number. The evidence also showed that between May 1993 and November 1993 some undergarments bore the CA number and the name VDI. It further showed that some other undergarments bore the CA number and the trade-mark, without any reference to VDI.

[43]      Counsel for the respondent"s main argument was that "there were uncertain uses going on in Canada" during the relevant period since some garments had the name VDI appearing on the labels while others had the trade-mark. The respondent acknowledged the principle (established in Philip Morris Inc. v. Imperial Tobacco Ltd.) that a single sale may suffice to show use of a trade-mark. However, he argued that it would be "incorrect to say that among those various incorrect and non-distinguishing uses, there were a few that matched the test". I must disagree with this argument, since it is well recognized that evidence of a single sale in the normal course of trade is sufficient to show use of a trade-mark because of the following principles:

1. Section 45 of the Act provides a simple, summary and expeditious procedure for clearing the register of trade-marks which are not bona fide claimed by their owners as active trade-marks. The procedure has been described as one for "removing deadwood" from the register (the threshold for the test is low).¹²

2. Section 45 only requires that the registered owner furnish an affidavit or statutory declaration showing, with respect to each of the wares or services specified in the registration, whether the trade-mark is in use in Canada at any time during the three-year period preceding the date of the notice.¹³

3. Evidence of one single sale, whether wholesale or retail, in the normal course of trade may well suffice so long as it follows the pattern of a genuine commercial transaction and is not seen as being deliberately manufactured or contrived to protect the registration of the trade-mark.¹⁴

4. A certain level of commercial activity is not required to show use. A registered owner does not have to prove continuous use in Canada.¹⁵

5. According to the Textile Labelling and Advertising Regulations, a manufacturer may use a CA number to adequately identify him (See sections 11 and 12 of the Regulations) The fact that the name of a registered owner does not appear on the wares is irrelevant.¹⁶

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DECISION

[44]      On the basis of the evidence filed , and for the reasons and principles stated in the Summary, it is my opinion that the appellant has met the requirements of section 45 of the Act, and that the decision of the Registrar cannot stand. The appeal by the appellant shall be allowed.

Ottawa, Ontario

January 11, 2000

B. Cullen

J.F.C.C.

__________________

¹Plough (Canada) Ltd. v. Aerosol Fillers Inc. (1980), 53 C.P.R. (2d) 62.

²Meredith & Finlayson v. Berg Equipement Co.(Canada) Ltd., 43 C.P.R. (3d) 473.

³Phillip Morris Inc. v. Imperial Tobacco (1987), 13 C.P.R. (3d) 289 (confirmed onappeal: Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1), 17 C.P.R. (3d) 289.)

⁴Plough (Canada) Limited v. Aerosol Fillers,[1981] 1 F.C. 679.

⁵[1998] 4 F.C. 569.

⁶Supra, note 3.

⁷Empire Clothing Manufacturing Co. v. Registrar of Trade marks, 67 C.P.R.(2d) 180.

⁸Coscelebre Inc. v. Registrar of Trade Marks, 35 C.P.R. (3d) 74.

⁹ 80 C.P.R. (3d) 287.

¹⁰(1984), 80 C.P.R. (2d) 228,

¹¹Supra, note 8.

¹² Philip Morris Inc. v. Imperial Tobacco Ltd., 13 C.P.R. (3d) 289.

¹³Meredith & Finlayson v. Canada (Registrar of Trade Marks)(1991), 40 C.P.R. (3d) 409 (F.C.A.).

¹⁴Supra, note 1.

¹⁵Coscelebre Inc v. Registrar of Trade Marks, 35 C.P.R. (3d) 74.

¹⁶Novopharm Ltd. v. Monsanto Canada Inc., 80 C.P.R. (3d) 228.