Date: 20001020
Dockets: T-2816-96
T-2817-96
T-2819-96
T-2820-96
T-2821-96
T-2822-96
T-2823-96
T-2824-96
OTTAWA, ONTARIO, THIS 20th DAY OF OCTOBER 2000
PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER
BETWEEN:
COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS
MICHELIN - MICHELIN & CIE
Appellant
- and -
CONTINENTAL GENERAL TIRE CANADA INC.
Respondent
REASONS FOR ORDER AND ORDER
PELLETIER J.
[1] Compagnie Générale des établissements Michelin - Michelin & Cie (Michelin) appeals the decision of the Registrar of Trade-marks Opposition Board rejecting its opposition to the registration of eight trademarks by Continental General Tire Canada Inc. ("General Tire"). The trademarks which General Tire sought to register were the following: XP 2000, XP 2000 MS, XP 2000 AS, XP 2000 V, XP 2000 H, XP 2000 Z, AMERI WAY XT & DESIGN, AMERI XL 4 & DESIGN. Each of those was the subject of a separate appeal. All were heard together and these reasons apply to each appeal. Michelin argues that these trademarks are confusing with one or more of its registered trademarks which feature the letter X and which it refers to, as will I, as its X marks. Those marks include the letter X, usually as the first character, accompanied by one or two other letters e.g. ZX, XF, XM, TRX, XAS, XVS, XCA.
[2] Both Michelin and General Tire are in the business of manufacturing tires and selling them to distributors who, in turn, sell them to consumers. Their products are often sold side by side in the same premises.
[3] The procedural history of the opposition is unremarkable and need not be repeated.
[4] Michelin raised four grounds of opposition:
| 1) Non-compliance with section 30 of the Trade-marks Act (the "Act"), R.S.C. 1985 c. T-13 in that General Tire: |
| - abandoned the use of the marks, |
| - could not have been satisfied that it was entitled to use the marks. |
| 2) the marks are not registrable because they are confusing with one or more of Michelin's X marks. |
| 3) General Tire is not entitled to registration because at the date of first use, they were confusing with marks previously used or made known in Canada by Michelin or its predecessors in title. |
| 4) General Tire's marks are not distinctive of its wares because: |
| - Michelin has used and made known its mark, |
| - the rights to the marks for which registration is requested exist in two or more persons as a result of an assignment and those persons have both exercised their rights, |
| - General Tire permitted third parties to use the marks for which registration is requested without complying with the licensing provisions of the Act. |
[5] The Registrar dismissed Michelin's opposition. All eight applications and oppositions were dealt within one decision. The Registrar began by dismissing the ground of objection based on compliance with section 30 of the Act as there was no evidence before him on those issues. He also dismissed the "second and third branches of the fourth ground of opposition" for the same reason. These deal with the rights to the use of the General Tire marks by others. The Registrar then concluded that the disposition of the issue of confusion would determine the outcome with respect to the other grounds.
[6] The Registrar reviewed the material dates with respect to the various issues and concluded that nothing turned on the question of material date. However, he chose to base his decision on the date of first use of the marks by General Tire, 1985, as that date was the most advantageous to Michelin.
[7] The Registrar was satisfied, on the evidence before him, that Michelin had discharged the onus of showing that on the date of General Tire's first use of its marks, it was using its X marks and that it had not abandoned the use of those marks as of the date of advertisement of General Tire's application for registration (December 1991). This established that there exists a foundation for the allegation of confusion.
[8] The Registrar then worked his way through the test for confusion found at subsection 6(5) of the Act:
| (5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
(b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
|
(5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l'espèce, y compris_ :
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus;
b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage;
c) le genre de marchandises, services ou entreprises;
d) la nature du commerce;
e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent.
|
[9] He found that neither party's marks had a high degree of distinctiveness since they are comprised of letters and numbers. The Registrar then reviewed the evidence of sales tires, the goods associated with the marks. He found that while Michelin had significant sales figures, these were not broken down between its various X marks. A review of Michelin's advertising materials led to the observation that the primary message is that the consumer is purchasing a Michelin tire and "that the particular X brand is secondary in importance". General Tire's advertising appeared to him to be based upon the same premise. The Registrar concluded from this that the use of the marks in question was secondary to the use of the brand name (MICHELIN, GENERAL TIRE) by both parties.
[10] The length of time the marks had been in use clearly favoured Michelin as General Tire's application was based on first use at times between 1983 to 1990 depending upon the product..
[11] The nature of the wares and the trade were identical as both were engaged in the manufacture of tires and sold to distributors who might sell the parties products side by side in the same channels of trade.
[12] The Registrar also found that the marks resemble each other visually and aurally to some extent due to their common use of the letter X. The marks do not suggest any particular idea "other than perhaps a type of coding that might identify characteristics of the merchandise".
[13] As part of his consideration of other surrounding circumstances, the Registrar examined the evidence of the state of the register. He began by acknowledging that evidence of the state of the register is only relevant where there are large numbers of registrations. General Tire had put before the Registrar evidence of 12 other similar registrations. The Registrar discounted five of the registration for various reasons, leaving seven registrations in the name of four different owners. He deprecated the significance of the evidence because it gave incomplete particulars of the registrations and the application. In the end, the Registrar concluded that he had not been satisfied that marks incorporating the letter X were in common use for vehicle tires, though he did note that at least one other entity sells tires in Canada under a mark incorporating the letter X. That entity is Uniroyal Goodrich Tire Company which assigned its two marks incorporating the letter X to Uniroyal Goodrich Canada Inc. in 1994. Since Uniroyal Goodrich Canada Inc. is "under the financial control" of Michelin, it claimed that these marks were used by an affiliated company. The Registrar accepted General Tire's argument that Uniroyal Goodrich Canada Inc. could not be a licensed user of Michelin's marks since the marks in question had been assigned to Uniroyal Goodrich Canada Inc. It was therefore the owner of the marks and not a licensed user. Thus, the Registrar considered Uniroyal Goodrich Canada Inc.'s use of marks incorporating the letter X as use by another entity.
[14] Finally, the Registrar noted that notwithstanding significant sales of the General Tire's products under its marks between 1985 and 1992, there were no reported instances of actual confusion. While acknowledging that evidence of actual confusion is not required to support a finding of confusion, it is one factor among many to be considered.
[15] The Registrar concluded that on balance, General Tire had satisfied the onus of showing lack of confusion between its marks and Michelin's marks. The considerations which led to this conclusion were the lack of inherent distinctiveness of the marks, the use of the marks as secondary marks, the absence of any evidence that any of Michelin's marks had acquired significant distinctiveness, the use of a mark incorporating the letter X by a third party and finally, the absence of evidence of actual confusion despite significant contemporaneous use.
[16] These findings applied to the six applied-for marks which consisted of XP 2000 by itself or in conjunction with another letter. As for the two marks incorporating AMERI as well as the letter X, the Registrar noted that AMERI was a visually and aurally distinct element. Relying upon that as well as the other reasons given, the opposition was rejected with respect to these two marks as well.
[17] Michelin appeals these findings. In support of its appeal, it submitted new evidence as is permitted by subsection 56(5) of the Act.
[18] The new evidence consisted of three affidavits deposed by Michel Savard, Pascale Goyer, Régent Gaudreau and Robert Hiebel respectively.
[19] Mr. Savard's affidavit touched upon a number of subjects. It included registration of some 27 other marks by Michelin which include the letter X, which were not admitted into evidence by the Registrar because they were filed late. It put before the Court a number of pieces of Michelin advertising materials showing the use of the Michelin marks. Sales figures for two specific products which bear an X mark were put forward. The affidavit also sets out the selling price of Michelin tires.
[20] The affidavit of Pascale Goyer proved registration of Michelin's trademarks.
[21] The affidavit of Régent Gaudreau updated the evidence of the register which General Tire had put before the Registrar in the opposition proceedings. It showed that some of the registrations had been expunged and that one registration had been transferred to Michelin Recherche et Technique S.A.
[22] The affidavit of Robert Heibel dealt with relations between Michelin and Canadian Tire. Michelin had opposed Canadian Tire's application for registration of MOTOMASTER XGS, XG, and XTS. The settlement of that opposition led to an agreement between Canadian Tire, Uniroyal and Michelin in which Canadian Tire agreed to abandon the use of a number of marks incorporating the letter X in return for which Canadian Tire was granted a licence to use the trademarks XGS, MOTOMASTER XGS, XTS, MOTOMASTER XTS, provided that the marks were used in conjunction with tires purchased from Uniroyal. Canadian Tire was also granted a licence to use the trademarks XG, XT, XT75, MOTOMASTER XG, MOTOMASTER XT and MOTOMASTER XT75 in connection with tires purchased from other manufacturers.
[23] This last affidavit was in answer to an affidavit filed on behalf of General Tire by James McDermott in which he deposed that General Tire Canada Inc. (the predecessor of the respondent) had manufactured tires for Canadian Tire for sale under the marks MOTOMASTER XG, MOTOMASTER XL, MOTOMASTER XT, and MOTOMASTER XT75.
[24] General Tire also filed the affidavits deposed by Robert McDerment and Carol Groves. These affidavits show registrations of trademarks incorporating the letter X by other tire manufacturers including Goodyear (INTREPID XNW, INVICTA GL XNW), Firestone (MUD KING XT, FIREHAWK FTX, FIREHAWK FT X02 RADIAL ATX) B. F. Goodrich (DEFENDER SRX +4, DEFENDER HRX) and Motomaster (as set out above).
[25] Michelin appeals the decision of the Registrar on the following grounds:
| 1- General Tire did not meet the onus of showing there would be no likelihood of confusion between its marks and Michelin's registered X marks. |
| 2- The evidence of the state of the register did not support the conclusion that numerous third parties used X-type marks in connection with the sale of tires. |
| 3- The distinction between primary marks and secondary marks is not relevant to the issue of confusion in opposition proceedings. |
[26] As a preliminary issue, Michelin takes the position that because of the additional evidence filed, which was not before the Registrar, the appeal is essentially a hearing de novo. The Court should not defer to the Registrar and should decide the matter as a matter of first instance. The burden on the person seeking registration is to show, on a balance of probabilities, that there is no risk of confusion between the marks sought to be registered and the opponent's registered marks. That burden remains upon the appellant throughout.
[27] Michelin agrees that both parties' marks lack inherent distinctiveness. It agrees with the Registrar that the criterion of length of use is strongly in its favour. It agrees that the nature of the goods and the nature of the trade are identical. It also agrees that the test for degree of resemblance is first impression and imperfect recollection.
[28] The point at which Michelin disagrees with the Registrar is on the issue of surrounding circumstances. It says that there are insufficient registrations to permit the use of evidence of the state of the register. Furthermore, the one-third party user of X-type marks, Uniroyal, has assigned its XLM mark to Michelin Recherche et Technique S.A. As a result, there is no evidence showing use of an X-type mark by anyone other than the parties. Certain marks incorporating X such as Uniroyal's RADIAL ATX, TIGER PAW XTM, and XTREAM are distinguishable since they do not feature an X as the first character of the trademark. It is the fact of placement of X at the start of the mark which leads to the likelihood of confusion.
[29] As for the question of primary and secondary marks, Michelin makes the point that General Tire or Michelin could cease advertising its tires in connection with its own corporate name. In such a case, the two marks would be competing side by side, leading to confusion. See Mr. Submarine Ltd. v. Amandista Investments Ltd. (1987), 19 C.P.R. (3d) 3 (F.C.A.), (1987) 81 N.R. 257.
[30] Finally, Michelin attacks the Registrar's reliance upon lack of evidence of confusion in coming to his conclusion. It says that the Registrar's decision runs counter to the decision of the Federal Court of Appeal in Mr. Submarine, supra.
[31] General Tire supports the decision of the Registrar. It begins by pointing out that while the appellant has the burden of showing no confusion before the Registrar, the appellant has the burden of showing that the Registrar has erred. The new evidence placed before the Court is not significant new evidence and thus does not justify the Court in interfering with the Registrar's decision.
[32] General Tire says that the Registrar's decision as to likelihood of confusion was correct, and was supported by the evidence. In particular, the Registrar was justified in finding that there was use of X-type trademarks in conjunction with tires in at least one case. General Tire's evidence shows use by others, which Michelin has not challenged. As for the lack of evidence of actual confusion, it is not determinative of the issue though it is a factor which the Registrar is entitled to consider.
[33] I have concluded that the decision of the Registrar is correct and ought not to be disturbed.
[34] On the question of new evidence, I agree with Evans J. who considered the question of the introduction of new evidence in Garbo Group Inc. v. Harriet Brown & Co., [1999] F.C.J. 1763, (1999), 3 C.P.R. (4th) 224 where the following appears at paragraphs 37 and 38:
| [para 37] As for the impact on the standard of review of the filing of additional evidence on an issue at the appeal, much will depend on the extent to which the additional evidence has a probative significance that extends beyond the material that was before the Registrar. If it adds nothing of significance, but is merely repetitive of existing evidence without enhancing its cogency, its presence should not affect the standard of review applied by the Court on the appeal. |
| [para 38] If, on the other hand, the additional evidence goes beyond what was in substance already before the Registrar, then the Court should ask whether, in the light of that material, the Registrar reached the wrong decision on the issue to which that evidence relates and, perhaps, on the ultimate decision as well. The more substantial the additional evidence, the closer the appellate Court may come to making the finding of fact for itself. |
[35] The effect of this is to require the Court to make an inquiry as to whether the new evidence goes significantly beyond what was before the Registrar, in order to determine whether it ought to interfere with the Registrar's findings of fact. In this case, I adopt the submissions of counsel for General Tire to the effect that the additional affidavit evidence did not add anything of significance to the evidentiary record.
[36] The affidavit of Michel Savard dated December 17, 1996 puts before the Court a series of other registrations of Michelin marks which include the letter X. It also puts in the record, examples of Michelin advertising material, which does not differ materially from the materials previously before the Court. Mr. Savard's affidavit puts sales figures for particular marks before the Court. The evidence before the Registrar did not include a breakdown of sales by particular marks. This evidence is intended to show use of the marks in trade, which had already been demonstrated by evidence of sales of all marks. Finally, the affidavit puts into evidence the selling prices of Michelin tires which range from $100 and upwards. To the extent that consumers are presumed to distinguish more carefully between expensive goods (see Bagagerie SA v. Bagagerie Willy Ltée (1992), 45 C.P.R. (3d) 503 at p. 509-510), (1992) 148 N.R. 125, the evidence would support General Tire's contention that consumers would not be confused. However, this evidence does not lead to the conclusion that the Registrar erred when taken with the balance of the evidence.
[37] The affidavit of Pascale Goyer provides evidence of registration of the Michelin trademarks. Before the Registrar, nothing turned on the question of registration, though the Registrar did comment on the manner in which registrations ought to be proved.
[38] Régent Gaudreau's affidavit updated the state of the register with respect to the registrations put before the Court by one of General Tire's affiants. This shows that some of the marks have been expunged or cancelled. While this is new, it is not material because the Registrar was not prepared to give effect to the evidence of the state of the register due to the small number of registrations. As for the evidence of transfer of a trademark from Uniroyal to Michelin Recherche et Technique S.A., it does not assist Michelin since the issue before the Registrar was confusion between the respondent's goods (and not those of another company) and those of the appellant.
[39] In his affidavit, Robert Hiebel explains the dealings between Uniroyal, the Michelin group of companies and Canadian Tire which resulted in an arrangement being concluded where Canadian Tire uses certain X designations under licence from Michelin. This does not detract from the evidence of use of trademarks incorporating the letter X as an element by Uniroyal and Canadian Tire prior to 1993.
[40] On balance, I do not find that there is anything in the affidavits filed after the decision of the Registrar which would justify treating this appeal as a matter of first instance.
[41] As to the issue of confusion generally, I find no fault in the reasoning of the Registrar and his analysis of the factors to be considered under subsection 6(5) of the Act.
[42] Specifically with respect to the evidence of surrounding circumstances, Michelin says that the Registrar erred in finding that at least one other party sells tires in Canada, incorporating the component X. The user in question was Uniroyal Goodrich Tire Company whose use of the marks XLM is shown by the Gaudreau affidavit to be under licence from Michelin Recherche et Technique S.A. This does not change the evidence of use of TIGER PAW XTM by Uniroyal Goodrich Tire Company which remained a use by someone other than a member of the Michelin Group of Companies. The evidence of use by someone other than Michelin prior to 1993 remained unchallenged.
[43] As to the evidence, or lack of it, of actual confusion, Michelin says that consideration of lack of actual confusion is an error, relying upon the decision of the Federal Court of Appeal in Mr. Submarine Ltd. v. Amandista Investments Ltd., supra. In my view, this case does not stand for the proposition for which it is cited. At issue in that case was whether the appellant's MR. SUBMARINE trademark was infringed by the respondent's use of MR. SUBS'N PIZZA and MR. 29 MIN. SUBS'N PIZZA. One of the findings of fact made by the trial judge was that in 10 years of use in the same area, no evidence of actual confusion had come to light.
[44] The Federal Court of Appeal made two references to the absence of evidence of confusion. At page 9 of the decision, Thurlow C.J. commented "Save with respect to the absence of evidence of actual confusion I am of the opinion the appellant's criticism of the reasons of the learned judge is warranted." This suggests that the trial judge's finding of lack of evidence of actual confusion was beyond reproach. The next comment occurs at page 14:
| Having regard to the circumstances disclosed I reach the conclusion, and this notwithstanding the very weighty fact referred to by the learned trial judge that in the 10 years of operation of both businesses in the Dartmouth area prior to the trial of the action no instance of any actual confusion had come to light, that the use by the respondent of its trade marks or trade names MR. SUBS'N PIZZA and MR. 29 MIN. SUBS'N PIZZA and of MR. SUBMARINE by the appellant in the same area is likely to lead to the conclusion that the wares and services of the respondent are sold or performed by the same person as those sold by the appellant. |
[45] The fact of lack of evidence of actual confusion is described as a "very weighty fact". This does not suggest that consideration of this fact is inappropriate. The Federal Court of Appeal's finding of confusion, in spite of lack of evidence of actual confusion, only serves to show that this factor is not conclusive, a point which was conceded by the Registrar. It was open to the Registrar to take the fact of lack of evidence of actual confusion into account.
[46] The Registrar also found that the marks of both parties tended to be used as secondary marks in conjunction with the primary marks, MICHELIN and GENERAL TIRE. Michelin is correct in asserting that the protection afforded by registration is not limited by any particular use so that Michelin would be perfectly entitled to use its registered "X" marks in any way it chose. This is an incident of the monopoly conferred by registration of a mark. To that extent, there does not appear to be any support for the idea of a secondary trademark whose use is restricted to association with a better known mark. The protection given by registration extends to all trademarks no matter how they are actually used, since the manner of use may change. Mr. Submarine Ltd. v. Amandista Investments Ltd., supra. As a result, any allegation that a trademark is not confusing because of the manner of use is doomed to failure since the mark is still protected, even if the manner of use changes.
[47] That said, where a mark is composed of letters only, or of letters and numbers, which are arranged in such a way as to be suggestive of a model number or "a type of coding that might identify characteristics of the merchandise", it may be that consumers may be less inclined to confusion. It is a matter of common experience that model numbers or product codes are often combinations of numbers and letters where small differences are important. Consumers may well exercise more care in dealing with such marks than they would in dealing with marks more descriptive of the goods with which they are associated.
[48] The following passage from GSW Ltd. v. Great West Steel Industries Ltd. et al. (1975), 22 C.P.R. (2d) 154 was written in the context of the use of initials as a trademark but it is relevant to the present case:
| In short where a trader has appropriated letters of the alphabet as a design mark without accompanying distinctive indicia and seeks to prevent other traders from doing the same thing, the range of protection to be given that trader should be more limited than in the case of a unique trade mark and comparatively small differences are sufficient to avert confusion and a greater degree of discrimination may fairly be expected from the public in such instances |
[49] Furthermore, since a model number or product code is assigned by the manufacturer of the goods with which the marks are associated, consumers might well look for a mark which more clearly identifies the manufacturer. It is this tendency to point to another mark which might justify the use of the description "secondary mark", not because the trader could not use the original mark by itself, but because the very nature of the mark leads consumers to look for a clearer identification of the source of the goods. The fact that the appellant's X-marks are always used in conjunction with the Michelin mark could be seen as a recognition of this tendency.
[50] As a result, I do not take the Registrar's reference to secondary marks as indicating a pattern of use which prevents confusion, a conclusion which would not be supportable, but rather, I take it as a recognition that the nature of the appellant's and respondent's marks are such that consumers would look for a clearer identification of the source of the goods, the marks themselves being more suggestive of a particular model of tire than of the origin of the tire.
[51] Finally, the AMERI XL 4 & DESIGN and the AMERI WAY XT & DESIGN are distinguishable from the appellant's marks by the use of the prefix AMERI. The appellant's own submissions to the effect that it is the use of the leading X (X as the first character of the mark) which tends to lead to confusion as the first component of a mark is more obvious to a consumer than the subsequent portions. If that is so, and the authorities support that position, then the AMERI XL 4 & DESIGN and the AMERI WAY XT & DESIGN would be less likely to lead to confusion than the other marks applied for by the appellant.
[52] For all of these reasons, I do not believe that the Registrar erred or acted upon a wrong principle. For that reason, the appeal will be dismissed with costs to be assessed.
ORDER
For the reasons set out above, the appeal is dismissed with costs to be assessed.
"J.D. Denis Pelletier"
Judge
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