Novopharm Limited v. Astra Aktiebolag, docket T-224-98

Date: 20000414

Docket: T-224-98

IN THE MATTER OF an appeal pursuant to Section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13 from a Decision of the Registrar dated December 9, 1997, rejecting the Opposition by Novopharm Limited to Canadian Trade-mark Application No. 694,410 for the mark CAPSULE DESIGN BROWN-PINK filed by Astra Aktiebolag (formerly Aktiebolaget Astra)

BETWEEN:

     NOVOPHARM LIMITED

     Appellant

AND:

     ASTRA AKTIEBOLAG and

     REGISTRAR OF TRADE-MARKS

     Respondents

     REASONS FOR JUDGMENT

ROULEAU, J.

[1]      This is an appeal from the decision of the Registrar of Trade-marks dated December 9, 1997, which rejected Novopharm"s opposition to Canadian Trade-mark Application No. 692,410 filed by the respondent Astra Aktiebolag ("Astra").

[2]      On October 28, 1991, Astra filed an application to register the trade-mark CAPSULE DESIGN BROWN-PINK. The application was based on use of the mark in Canada since at least as early as June of 1989 in association with the wares pharmaceutical preparations namely, omeprazole. The mark is described and illustrated in the application as follows:

    

The design consists of the colour pink applied to the whole of the visible surface of the opaque capsule as shown in the drawings, and the colour reddish-brown applied to the cap portion of the capsule as also shown in the drawings, and in the specimens filed with this application. The drawing is lined for the colour pink and brown and is claimed as a feature. The capsule shown in dotted outline does not form part of the trade-mark.

[3]      Apotex filed a Statement of Opposition against the trade-mark application on February 8, 1994, on the grounds that:

(1) the mark in question is not a trade-mark as the colour and shape of a capsule is not adapted to distinguish the wares of the respondent from the wares of others;

(2) the application does not include an accurate representation of the alleged trade-mark;

(3) the alleged trade-mark is not distinctive in that it does not distinguish nor is it adapted to distinguish the wares of the respondent from those of others. Novopharm argued that two tone pink and brown capsules were and are, at all material times, common to the trade and have been used by others so that the wares of the respondent are and cannot be distinguished from the tablets of others.

[4]      Astra filed a Counterstatement on March 31, 1994, denying the allegations in the Statement of Opposition. Thereafter, on March 18, 1997, both Novopharm and Astra filed written arguments and an oral hearing before the Registrar of Trade-marks was held on November 27, 1997. By decision dated December 9, 1997, the Registrar rejected the appellant"s opposition, stating his reasons, in part, as follows:

. . . I recently had occasion to consider a tablet design mark in Novopharm Ltd. v. Bayer Inc. (re application No. 657,397 for the mark CIRCLE DESIGN; December 23, 1996; yet unreported):

The adequacy of the description required to define a mark for a tablet has been discussed in Novopharm Ltd. v. Burroughs Wellcome Inc. (1993), 52 C.P.R. (3d) 263 (TMOB), affirmed Burroughs Wellcome Inc. v. Novopharm Ltd. (1994) 58 C.P.R. (3d) 513 (F.C.T.D.). My interpretation of the above cases is that a trade-mark application which incorporates a drawing accurately depicting at least one perspective of a tablet meets the formal and substantive requirements of Section 30 so long as (i) a specimen of the tablet has been filed with the Office, and (ii) the written description of the mark in the trade-mark application refers to the specimen tablet filed with the Office.

In the instant case, the drawing included with a trade-mark application accurately depicts one perspective of the applicant"s capsule, and criteria (i) and (ii) above have also been met. The opponent has correctly noted that the specimens filed by the applicant are subject to deterioration over time, however, I am not prepared to find non-compliance with Section 30 for that reason alone. The opponent has also noted that the applicant"s capsules as actually used are marked in black ink with a "20" [indicating dosage] and with an "A" [indicating Astra] over "OM" [indicating omeprazole]. However, nothing turns on the appearance of such markings on the capsules: see, for example, Novopharm Ltd. v. Burroughs Wellcome Inc. (TMOB), above at p. 269, paragraph g. Further, it would appear that the above markings have a primarily functional aspect in identifying the type of medication, dosage and manufacturer to pharmacists and physicians. Accordingly, I find that the applicant has complied with the requirements of S. 30 and therefore the grounds of opposition denoted by a(i) and a(ii) are rejected.

With respect to the opposition denoted by (b), the onus is on the applicant to show that its mark actually distinguishes its wares from those of others throughout Canada . . . The presence of an onus means that if a determinate conclusion cannot be reached once all the evidence is in, then the issue must be decided against the applicant. The material time for considering the circumstances respecting the issue of distinctiveness is as of the filing of the opposition, in this case February 8, 1994 . . . Although it must be shown that the marks relied on by the opponent are known to some extent at least, it is not necessary to show that they are well known. It is sufficient for the opponent to establish that the other marks have become known sufficiently to negate the distinctiveness of the applicant"s mark;

Peter Dixon"s evidence, filed on behalf of the applicant, is relevant to the issue of distinctiveness and may be summarized as follows. The applicant"s omeprazole product was launched in May 1995 in its present form, that is, in "two-piece gelatin capsules with an opaque pink body and an opaque reddish-brown cap portion. The capsules contain 20 mg of omeprazole and have always been sold under the brand name LOSEC which is a registered trade-mark." The colours and shape of the capsules have remained unchanged since introduction. The applicant"s LOSEC product is used for gastrointestinal disorders such as ulcers and is sold in Canada through the applicant"s Canadian subsidiary/distributor Astra Pharma. According to Mr. Dixon, LOSEC is the best selling prescription pharmaceutical in Canada in terms of dollar sales. In this regard, sales in 1989 amounted to $3.5 million, rose to $45 million by 1991, rose again to $94 million by 1993, and reached $128 million in 1994. Advertising and promotion expenses for LOSEC in the applicant"s brown and pink capsule were about $1.2 million annually for 1989 and 1991, and about $2 million annually from 1992 on. The evidence elicited from the opponent"s affiants on cross-examination is that LOSEC is the second ranked product in Canada (excluding antacids) in terms of frequency of use for treating gastrointestinal tract disorders. The evidence of record, including the evidence elicited from the opponent"s affiants on cross-examination, generally supports the applicant"s contention that doctors, pharmacists and consumers recognize medication by the colour, shape and size of the tablet and that, in particular, the same groups would have some familiarity with the brown-pink LOSEC capsule which is the subject of this proceeding.

The opponent"s evidence countering the applicant"s case is, in my view, fairly summarized at paragraph 57 of the applicant"s written argument, reproduced below:

The Opponent introduced evidence that the appearance of RESTORIL 15 mg capsules, SURGAM mg 300 mg capsules, and DALACIN C capsules were somewhat similar to the Applicant"s trade-mark . . . none of these products contain omeprazole and therefore neither would be interchangeable with the applicant"s product. Also, none of these products are indicated for the treatment of gastrointestinal disorders as is omeprazole. Finally, there is no evidence that any of these products has a reputation in Canada at the material time . . .

(emphasis added)

The material time referred to able if the date of opposition namely, February 8, 1994. In summary, the evidence filed by the opponent does not go far in supporting its case while the evidence submitted by the applicant, and the testimony elicited by the applicant on cross-examination, is sufficient to show that, on the balance of probabilities, the applied for mark was distinctive of the applicant"s gastrointestinal medication namely, omeprazole, at the material time.

[5]      Novopharm now appeals from that decision on the grounds that the Registrar erred by finding that:

(a) the applied for mark was a trade-mark, or had been used as a trade-mark when the colour alone was not the only marking on the capsule and the mark in and of itself could not distinguish the wares of the applicant given that there were other capsules in the market place of the same colour;

(b) the applicant"s TABLET DESIGN was distinctive in that "doctors, pharmacists and consumers recognize medication by the colour, shape and size of the tablet and that, in particular the same groups would have some familiarity with the brown-pink LOSEC capsule which is the subject of this proceeding" when there was no evidence of any doctor, pharmacist or patient that they recognized the colour as indicting omeprazole from a single source;

(c) the application included a drawing of the trade-mark, when the application clearly states that the drawing of the tablet is not to form part of the trade-mark; and

(d) the filing of specimens with the application meant that the requirements of section 30 of the Trade-Marks Act had been met, even though section 30 of the Act requires a drawing.

[6]      After carefully reviewing the parties" writt en submissions and considering the oral arguments presented at the hearing before me, I am satisfied that the appeal from the Registrar"s decision should be allowed.

[7]      First, paragraph 30(h) of the Trade-Marks Act provides that a trade-mark application must contain a drawing of the trade-mark and such number of accurate representations of the mark as may be prescribed. The onus is on the applicant for a mark to show its compliance with this requirement of the legislation. The drawing submitted must be a meaningful representation of the applicant"s mark in the context of the written description appearing in the application and must enable the determination of the three-dimension limits of the capsule to which the colour is applied. The rationale behind these statutory requirements is that a trade-mark registration is a monopoly and must therefore, be precise in terms of its scope. As stated by this Court in Calumet Manufacturing Ltd. v. Mennen Inc . (1991), 40 C.P.R. (3d) 76 at 87:

It is the mark so depicted in the drawing, reproducible with a certificate of registration, which then provides the notice to the world of the owner"s proprietary interest in the trade mark and which forms the evidentiary basis for actions of infringement or for expungement. Useful as photographs and sample of a trade mark, including a distinguishing guise, may be upon application for registration, to ensure the drawing is a reasonable representation of the trade mark claimed, in my view, those do not form part of the trade mark for registration or for other purposes under the Act.

[8]      In the present case, I agree with Novopharm that the respondent"s trade-mark application is confusing and ambiguous and that this is the result of an inconsistency between the description and the disclaimer. It is unclear whether the application relates to a shape along with the colours or simply the colours alone. Although the application disclaims the capsule shape, the appellant maintains that its trade-mark is inherently distinctive in its "colour and shape combination". While the application will therefore result in a trade-mark not limited to the capsule shape, Astra has admitted that its trade-mark is a colour and shape combination. Furthermore, the Registrar erred when he found that section 30 of the Trade-Marks Act is satisfied where a specimen has been filed with the Trade-marks office and the written description of the mark in the trade-mark description refers to the specimen tablet filed with the office. This finding is contrary to established jurisprudence that a specimen, whether submitted to clarify colour or shape, does not replace, nor can it cure a deficiency in, a written description.

[9]      In any event, it is my view that the fundamental issue here is whether the trade-mark in question is distinctive. The term "distinctive" is defined in section 2 of the Trade-Marks Act as follows:

"distinctive", in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them;

[10]      In Philip Morris Inc. v. Imperial Tobacco Ltd. (1985), 7 C.P.R. (3d) 254 at p. 270, this Court held that three conditions must be met in order to prove distinctiveness:

. . . (1) that a mark and a product (or ware) be associated; (2) that the "owner" uses this association between the mark and his product and is manufacturing and selling his product; and, (3) that this association enables the owner of the mark to distinguish his product from that of others.

[11]      Whether a trade-mark satisfies these three requirements is a question of fact to be determined by looking at all of the circumstances of a particular case. In making this determination, the most critical factor to be taken into account is the message that the trade-mark actually conveys to the public. This principle was stated by Strayer J., as he then was, in Royal Doulton Tableware Ltd. v. Cassidy"s Ltd., [1986] 1 F.C. 357 at pp. 370-71 as follows:

It is to be noted that a distinctive trade mark is one which links e.g., goods with a vendor so as to distinguish them from the goods of other vendors. It is not distinctive if it simply distinguishes one design of goods from another design of goods even though if one had special trade knowledge one might know that these two kings of goods are sold respectively by two different vendors. Such a concept of distinctiveness would run counter to a basic purpose of the trade mark which is to assure the purchaser that the goods have come from a particular source in which he has confidence . . .

. . .

In the final analysis the critical factor according to these cases is the message given to the public.

                                 (emphasis added)

[12]      The onus resting on an applicant for registration of a trade-mark therefore is to establish that it has chosen a particular design as a distinguishing feature of its product and that its product has become known in, and acquired a reputation in, the minds of the consuming public by reason of that distinguishing feature. Unless an applicant is able to adduce evidence which demonstrates this fact, it is not entitled to registration of the mark in question. In Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. (1982), 64 C.P.R. (2d) (S.C.C.), Estey, J. made the following observations at p. 7:

As to the immediate issue here, some guidance is to be found in the comment by Russell L.J. in Roche Products Ltd. et al v. Berk Pharmaceuticals Ltd., [1973] R.P.C. 473, at p. 482:

"Now, in this as in all other passing off cases, the basic question is whether, directly or indirectly, the manner in which the goods of defendant are presented to the relevant consumers is such as to convey to the minds of the latter the impression that they are the goods of the plaintiff. In an "appearance" or get-up case it is not enough simply to say that the former are very like the latter. It must be established that consumers have, by reason of the appearance of the goods of the plaintiff, come to regard them as having some one trade source or providence, whether manufacturing or marketing, though it matters not that they have no idea at all of the identity of that trade source or provenance."

It is to be noted that in the first part of the observation of Russell L.J. there seems to be a requirement that the purchasing public be left with the impression that the goods of the defendant are the goods of the plaintiff. The next part of the paragraph makes it clear, however, that all that need be left in the mind of the purchaser is the idea that all of the pills (in that case), by reason of their shape, size and mode or marking, came from "one trade source".

                             (emphasis added)

[13]      Here, because the proposed trade-mark is the colour and shape of the wares, Astra has the onus of proving that the "get-up", that is the appearance of the capsule, is recognized by the public as distinctive of its wares. It is therefore incumbent upon the respondent to show that physicians, pharmacists or patients can and do use the proposed trade-mark in choosing whether to prescribe, dispense or request Astra"s omeprazole product. In Novopharm Ltd. v. Bayer Inc ., supra, Evans., J. stated as follows:

First, the burden of establishing the distinctiveness of a mark rests on the applicant, both in the opposition proceeding before the Registrar and on an appeal to this Court. Thus, Bayer must establish on a balance of probabilities that in 1992, when Novopharm filed its opposition to the application, ordinary consumers associated dusty rose, round extended-release tablets of the size of the 10 mg ADALAT tablet, with Bayer, or a single source of manufacture or supply . . .

Second, the "ordinary consumers" to be considered for this purpose include not only physicians and pharmacists, but also the "ultimate consumers", that is the patients for whom ADALAT tablets are prescribed and to whom they are supplied, even though their only access to nifedipine is through a physician"s prescription: Ciba-Geigy Canada Ltd. v. Apotex Limited, [1992] 3 S.C.R.. 120.

In Ciba-Geigy the Court held that the elements of the tort of passing-off were as applicable to pharmaceutical products as to any other. Accordingly, it was relevant to consider whether the "get-up" of the plaintiff"s goods had acquired a distinctiveness that would lead patients to identify that "get-up" with a single source, so that they were likely to be confused into thinking that another"s product, with a similar appearance to that of the plaintiff, emanated from the same source as the plaintiff"s.

. . .

Third, while I accept that the colour, shape and size of a product may together be capable in law of constituting a trade-mark, the resulting mark is, as a general rule, likely to be weak: Smith Kline & French Canada Ltd. v. Registrar of Trade-marks (1987), 9 F.T.R. 129, 131 (F.C.T.D.).

In this case, pink round small tablets are commonplace in the pharmaceutical market. This means that Bayer has a heavy burden to discharge in proving on the balance of probabilities that in 1992 those properties had a secondary meaning, so that ordinary consumers associated the tablets with a single source. The fact that, when Novopharm filed its objection, ADALAT were the only extended-release nifedipine tablets on the market is in itself insufficient to establish a secondary meaning.

Fourth, it is not fatal to an application that consumers may also use means other than the mark for identifying the product with a single source. Thus, while pharmacists rely mainly on the brand name and other identifying indicia on the stock bottles and packaging containing the product, or the inscription on the tablets, which is not part of the mark, if there is evidence that to any significant degree they also recognized the product by its appearance (excluding the markings on the tablet because they are not part of the mark), this may be sufficient to establish the distinctiveness of the mark.

[14]      Applying these principles to the evidence now before me, I am unable to conclude that the colour and shape of Astra omeprazole capsules are distinctive of the product. The evidence is clear that, both prior to and at the date of opposition, there were a number of well-known, two-toned capsules sold and distributed in the pharmaceutical industry, including a number of pink/brown capsules. The respondent has not adduced any evidence which clearly establishes, on a balance of probabilities, that a significant number of consumers associate the appearance of its product with a single source. Accordingly, it has failed to establish the distinctiveness required for a valid trade-mark.

[15]      The Registrar of Trade-marks appears to have relied upon the sales of LOSEC in finding that Astra"s mark was distinctive. However, impressive sales figures alone do not satisfy the burden on an applicant for a trade-mark of proving distinctiveness. Furthermore, there was evidence before the Registrar here to suggest that the sales numbers did not give a precise picture of the market place. For example, Dr. Joseph"s evidence was that only ten to fifteen percent of her patients suffering from gastrointestinal disorders would be taking LOSEC. Similarly, Dr. Shulman"s evidence was that only fifty of several thousand patients were taking LOSEC, while Mr. Droznika stated that LOSEC was not one of the most popular drugs used for gastrointestinal indications in his area. And while Mr. Dixon swore in his affidavit that "a significant number of patients prescribed LOSEC brand of omeprazole have taken the brand chronically", he admitted in cross-examination that he did not know what that "significant number" was.

[16]      In my view, the Registrar failed to apply the established principles of law with respect to the issue of distinctiveness. Indeed, he appears to have had virtually little regard for the legal tenets established by the jurisprudence. In the same manner, his findings of fact can only be considered perverse, given that there was simply no evidence before him to substantiate a finding that the respondent"s product has obtained recognition or a reputation in the mind of the consuming public as a result of its appearance of get-up.

[17]      For all of these reasons the appeal is allowed. Costs to the appellant.

                                 JUDGE

OTTAWA, Ontario

April 14, 2000