Sullivan Entertainment Inc. v. Anne of Green Gables Licensing Authority Inc., 2002 FCT 1321

Date: 20021220

Docket: T-1634-99

Neutral citation: 2002 FCT 1321

BETWEEN:

                                                SULLIVAN ENTERTAINMENT INC.

                                                                                                                                                          Plaintiff

                                                                                                              (Defendant to the Counterclaim)

                                                                                 and

                          ANNE OF GREEN GABLES LICENSING AUTHORITY INC.,

                                    DAVID MACDONALD and RUTH MACDONALD

                                                                                                                                                    Defendants

                                                                                                                        (Plaintiffs by Counterclaim)

                                                            REASONS FOR ORDER

HENEGHAN, J.

INTRODUCTION

[1]                 The Plaintiff Sullivan Entertainment Inc. ("Sullivan") brings a motion pursuant to the Federal Court Rules, 1998 for partial summary judgment against Anne of Green Gables Licensing Authority Inc. ("AGGLA"), one of the Defendants, Plaintiffs by Counterclaim, in this proceeding.

THE PARTIES

[2]                 Sullivan is a body corporate, incorporated under the laws of Ontario and carrying on the business of film production.

[3]                 Anne of Green Gables Licensing Authority Inc. is a body corporate created by Letters Patent issued by the Province of Prince Edward Island, pursuant to the Companies Act, R.S.P.E.I., 1988, Chap. C-14. Its incorporation date is May 26, 1994.

[4]                 David Macdonald is a descendant of Lucy Maud Montgomery and Ruth Macdonald is a daughter-in-law of Lucy Maud Montgomery.

BACKGROUND

[5]                 Lucy Maud Montgomery was an author who is well known for her creation of the little red haired girl known as "Anne of Green Gables". Anne of Green Gables is publicly and popularly associated with the Province of Prince Edward Island. This character continued to inspire future generations of artists and artisans, including Sullivan.

[6]                 In the 1980's, Sullivan and its corporate affiliates produced two television mini-series based on the book Anne of Green Gables, entitled "Anne of Green Gables" and "Anne of Green Gables-The Sequel". They also produced motion pictures and the television series "Road to Avonlea", based on the book. These productions, "Anne of Green Gables", "Anne of Green Gables-The Sequel" and "Road to Avonlea" are original works based on the characters and settings from the literary works authored by Lucy Maud Montgomery.

[7]                 Others, too have drawn inspiration from this creation of Lucy Maud Montgomery. David Macdonald and Ruth Macdonald filed two trade-mark applications on February 26, 1990. The first, Canadian trade-mark application number 652012, was for the trade-mark ANNE OF GREEN GABLES. The application issued to registration on February 11, 1998.

[8]                 The second trade-mark application was number 652011 for the trade-mark ANNE OF GREEN GABLES Design, and the application issued to registration on June 1, 1998 under number 495616.

[9]                 Further, the Macdonalds acquired trade-mark registration number 277120 for the trade-mark GREEN GABLES DOLL HOUSE Design and trade-mark registration number 279147 for the trade-mark GREEN GABLES TOY Design, pursuant to an assignment effective July 27, 1992.

[10]            On August 27, 1992, the province of Prince Edward Island ("PEI") requested the Registrar of Trade-Marks to give further notice of its adoption and use as official marks, nine marks.

[11]            On May 10, 1994, PEI requested the Registrar of Trade-Marks to give public notice of its adoption and use of ANNE'S LAND DAYTOUR as an official mark. This mark was published on July 13, 1994 under number 906728. These marks, as follows, are collectively referred to as the "PEI Marks".

[12]            On January 23, 1985, the Prince Edward Island Development Agency filed two applications with the Canadian Trade-Marks Office. On January 3, 1986, ANNE OF THE ISLAND trade-mark issued to registration under number 310178. On February 21, 1986, ANNE OF THE ISLAND design trade-mark issued to registration number 311560. These trade-marks are known as the "PEI Marks".

[13]            On May 5, 1994, the Macdonalds entered into an agreement with PEI and Avonlea Productions Limited ("Avonlea"). Sullivan had created and owned the copyright in a musical stage play entitled "Anne of Green Gables-The Musical" that was based upon Lucy Maud Montgomery's book Anne of Green Gables. This agreement, described in the pleadings as the "AGGLA Agreement" provided, among other things, for the creation of a corporation to be called "Anne of Green Gables Licensing Authority". The purposes of this incorporation included various manufacturing, advertising, selling and distribution of goods and services bearing trade-marks and other symbols referring and relative to the characters, places and events described in the literary works of Lucy Maud Montgomery.

[14]            The AGGLA Agreement also provided, among other things, that PEI and the Macdonalds would work together to achieve the following ends:

20.        Among other things, the AGGLA Agreement provided that:

                 (a)           AGGLA would become the sole registered owner in Canada of trade-marks associated with images or representations of Anne of Green Gables and that PEI and the Macdonalds would assign all of their rights in or claims to such trade-marks to AGGLA;

             (b)          PEI and the Macdonalds would use their best efforts to acquire in the name of AGGLA additional trade-marks associated with images or representations of Anne of Green Gables as they jointly agreed ought to be protected;

             (c)           PEI and the Macdonalds would licence and use any world wide rights related to such trade-marks only in accordance with the terms of the AGGLA Agreement;

             (d)          neither PEI nor the Macdonalds would authorize the use of any images or representation of Anne of Green Gables or any trade-mark associated therewith unless such use has been previously authorized by AGGLA;

             (e)           the affairs of AGGLA were to be conducted by a board of directors comprised of three nominees of PEI, three nominees of the Macdonalds and two persons nominated jointly by PEI and the Macdonalds, and that questions arising at any meeting of the board of directors were to be decided by a majority of the votes cast by the directors, such majority to include the votes of at least one nominee appointed solely by the Macdonalds and one nominee appointed solely by PEI; and

             (f)           the Macdonalds would be at liberty to continue licensing under pre-existing merchandising commitments goods or services bearing trade-marks associated with images or representations of Anne of Green Gables from any audio-visual, audio or live stage production by licensees and sublicensees authorized prior to the incorporation of AGGLA (including any films by Sullivan), such activities to be authorized by a licence from the Family Licensing Committee of AGGLA (the "Family Committee"), or in the absolute discretion of the Macdonalds, by a licence from the Macdonalds provided that AGGLA is notified.

[Paragraph 20 of the Amended Statement of Claim dated Sept. 14/99]

[15]            This statement of some of the goals of the AGGLA Agreement is admitted by the Defendants-Plaintiffs by Counterclaim.

[16]            In pursuit of the AGGLA Agreement, the Macdonalds assigned nunc pro tunc to AGGLA all their whole right, title and interest in and to the trade-marks registration referred to above. As well, the Macdonalds assigned to AGGLA, nunc pro tunc, all their whole right, title and interest in and to the following trade-marks:

21.        Pursuant to the AGGLA Agreement:

             ...

                (b)          the Macdonalds assigned nunc pro tunc to AGGLA all of their whole right, title and interest in and to the trade-marks ANNE WITH AN "E"; RED-HAIRED ANNE/ RED HAIR ANNE; AKAGE NO ANNE; RAINBOW VALLEY; ANNE OF INGLESIDE; RILLA OF INGLESIDE; INGLESIDE; RAINBOW VALLEY; KINDRED SPIRITS; AVONLEA; ANNE OF AVONLEA; ROAD TO AVONLEA; ROAD TO YESTERDAY; ANNE SHIRLEY; MARILLA CUTHBERT; MATTHEW CUTHBERT; JOSIE PYE; GILBERT BLYTHE; RACHEL LYNDE; DIANA BARRY; ANNE COLLECTION; LAND OF ANNE/ANNE'S LAND; ANNE OF WINDY POPLARS; LAKE OF SHINING WATERS and other "Images of Anne" as defined in the AGGLA Agreement, effective the 5^th day of May, 1994; and      ...

These assignments were effective May 5, 1994.

[17]            As well, PEI assigned nunc pro tunc to AGGLA all its whole right, title and interest in and to the PEI Marks and the PEI Trade-marks effective May 5, 1994. The Registrar of Trade-marks continues to show PEI as the party giving further notice of its adoption and use of the PEI Marks. The PEI trade-marks are now registered in the name of AGGLA.

[18]            Following the incorporation of AGGLA and upon its request, the Registrar of Trade-marks gave public notice of AGGLA's adoption and use as official marks, of the following marks:

These marks are known as the AGGLA Marks.

[19]            Other events are mentioned in the Amended Statement of Claim but they are not relevant to the issues raised in this motion for partial summary judgment. However, paragraphs 28 and 29 are relevant and provide as follows:

28.          Sullivan has completed the production and will shortly be distributing "Anne of Green Gables, The Continuing Story". Sullivan is in the process of completing the animated series and planning the associated merchandising program. Sullivan states that it is a person interested in the validity of the AGGLA Trade-mark Registrations, in AGGLA's ability to rely upon the benefits conferred on AGGLA under section 9(1)(n)(iii) of the Trade-marks Act (Canada) in respect of the AGGLA Marks ...because it is concerned that the Macdonalds and AGGLA may take steps to disrupt the distribution of "Anne of Green Gables, The Continuing Story", the animated series and the associated merchandising program and oppose the Sullivan Marks, thereby causing damage to Sullivan. Sullivan is further concerned that some of the Sullivan Marks may be rejected by the Trade-marks Office because of the AGGLA Marks, PEI Marks and AGGLA Registered Trade-marks.

29.          Sullivan is not at this time challenging the decision of the Registrar of Trade-marks to give public notice of the AGGLA Marks and the PEI Marks. However, Sullivan states that AGGLA is not entitled to and cannot assert the benefits conferred upon public authorities under Section 9(1)(iii) of the Trade-marks Act (Canada) in respect of the AGGLA Marks and PEI Marks because:

             (a)           AGGLA is not a public authority within the meaning of Section 9(1)(n)(iii) of the Trade Marks Act (Canada);

             (b)          AGGLA has neither adopted nor used any of the AGGLA Marks or PEI Marks; and

(c)           the assignment of the PEI Marks from PEI to AGGLA is invalid and void and of no effect.

[20]            The response of the Defendants-Plaintiffs by Counterclaim is found in paragraph 10 of the Amended Defence which says as follows:

10.          Paragraphs 29 to 32 of the Statement of Claim are denied. AGGLA is a public authority within the meaning of section 9(1)(n)(iii) of the Trade-Marks Act, RSC 1985, c. T-13 and has been so found in a final decision of the Superior Court of Justice (Ontario) fully litigated between AGGLA and the Macdonalds as Plaintiffs and Avonlea Traditions Inc. as Defendant, Court File No. 95-CU-89192, dated March 10, 2000, now reported at (2000) 4 CPR (4^th) 289. An Appeal was taken from this decision, but has been withdrawn.

[21]            Paragraph 15 of the Counterclaim says as follows:

The Plaintiff by Counterclaim AGGLA is a public authority within the meaning of section 9(1)(n)(iii) of the Trade-Marks Act, R.S.C. 1985, c. T-13, as amended. It is the owner of and has adopted and used in Canada the official mark ANNE OF GREEN GABLES, of which there was given public notice in the Trade Marks Journal on November 18, 1992, and assigned to the Plaintiff by Counterclaim by a confirmatory assignment dated March 28, 1995.

[22]            The status of AGGLA as a public authority is a central element of the pleadings. The alleged status as a public authority is further addressed in the Amended Reply and Defence to Counterclaim as follows:

             9.            As to the allegations in paragraph 10 of the statement of defence, Sullivan acknowledges that a decision was rendered in the Ontario Superior Court of Justice between AGGLA and the Macdonalds as plaintiffs and Avonlea Traditions Inc. as defendant which in part addressed AGGLA's qualifications as a public authority based upon certain evidence and submissions that were put before the Court. However, Sullivan states that not all relevant facts pertaining to AGGLA's qualities were before the Superior Court of Justice, nor did that Court address whether AGGLA had adopted and used all of the specified AGGLA Marks or PEI Marks or whether the assignment of the PEI Marks was valid. Accordingly, Sullivan states that the decision of the Superior Court of Justice is neither the final word on these issues nor is it correct or of any precedent value in respect of the issues before this Honourable Court.

                                ...

             14.          As to the allegations contained in paragraph 15 of the counterclaim, Sullivan denies that AGGLA is a public authority for the reasons expressed in paragraph 30 of the statement of claim. For the reasons set out at sub-paragraph 30 (b) of the statement of claim, Sullivan states that there is no significant degree of public control over AGGLA nor was there control at the time that AGGLA claimed to be a public authority before the Registrar of Trade-marks. Further, Sullivan denies that AGGLA has adopted and used the mark ANNE OF GREEN GABLES, and states that if AGGLA has adopted and used such a mark, it had not been adopted and used by AGGLA at the time public notice was given in the Trade-marks Journal nor has it been continuously adopted and used by AGGLA since public notice was given. Sullivan further states if such a mark has at all been used, it has not been used by AGGLA but rather by a permitted licensee of AGGLA, and that use of a mark by a permitted licensee of an alleged public authority is not an adoption and use by the public authority of the mark as an official mark. Sullivan further states that the mark ANNE OF GREEN GABLES is not an official mark and at its highest is the title of a book written by Montgomery. Sullivan states that marks published under Section 9 of the Trade-marks Act cannot be assigned or conveyed and that the "confirmatory assignment" referred to in paragraph 15 of the counterclaim is invalid, void and of no effect.

[23]            Now Sullivan seeks partial summary judgment in respect of paragraphs 1(a)(i), (iii), (iv) and (v) of the Amended Statement of Claim. These paragraphs provide as follows:

          1.            The plaintiff, Sullivan Entertainment Inc ("Sullivan") claims:

             (a)            a declaration that:

                                (i)            the defendant, Anne of Green Gables Licensing Authority Inc. ("AGGLA"), is not entitled to and cannot assert the benefits conferred upon public authorities by Section 9(1)(n)(iii) of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended (the Trade-marks Act (Canada));

                                ...

                                (iii)          AGGLA has neither adopted nor used the following marks in respect of which the Registrar of Trade-marks, at the request of AGGLA, has given public notice (the "AGGLA Marks"):

(iv)          AGGLA has neither adopted nor used the following marks in respect of which the Registrar of Trade-marks, at the request of Her Majesty the Queen in Right of the Province of Prince Edward Island as Represented by the Minister of Tourism and Parks ("PEI"), has given public notice (the "PEI Marks"):

                                (v)           the assignment of the PEI Marks from PEI to AGGLA is invalid and void and of no effect and does not confer upon AGGLA any benefits afforded by Section 9(1)(n)(iii) of the Trade-marks Act (Canada);

[24]                         Sullivan seeks the following relief:

1.             (a)           a declaration that the Anne of Green Gables Licensing Authority ("AGGLA") is not entitled to and cannot assert the exclusive rights conferred upon public authorities under Section 9(1)(n)(iii) of the Act in respect of the Section 9 marks identified in paragraphs 1(a)(iii) and (iv) of the statement of claim;

             (b)          a declaration that the Section 9 marks identified in paragraphs 1(a)(iii) and (iv) of the statement of claim are invalid, ineffective and unenforceable; and

             (c)           a permanent injunction restraining AGGLA and anyone acting in concert with it or at its request or instruction or under licence from it from asserting the benefits conferred upon public authorities under Section 9(1)(n)(iii) of the Act in respect of the Section 9 marks identified in paragraphs 1(a)(iii) and (iv) of the statement of claim.

   2.          An Order directing:

             (i)           AGGLA to request the Registrar of Trade-marks to withdraw its public notice of its adoption and use of the Section 9 marks identified in paragraph 1(a)(iii) of the statement of claim and to give public notice in the Trade-marks Journal that such marks are invalid; and

             (ii)          AGGLA and the Province of Prince Edward Island ("PEI"), to request the Registrar of Trade-marks to withdraw public notice of the adoption and use of Section 9 marks identified in paragraph 1(a)(iv) of the statement of claim and to give public notice in the Trade-marks Journal that such marks are invalid.

3.          An Order that costs of this motion be awarded to the Plaintiff.

[25]            Sullivan sets forth the following grounds for its motion:

The plaintiff, Sullivan Entertainment Inc. ("Sullivan") is seeking in paragraphs 1(a)(i) and (iii) through (v) of the statement of claim a declaration that AGGLA is not entitled to and cannot assert the benefits conferred upon public authorities for certain official Section 9 public authority marks for which notice to the public has been given by the Registrar of Trade-marks under Section 9(1)(n)(iii) of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended (the "Act"), because neither AGGLA nor its claimed predecessor, PEI, has adopted or used such marks (the "Section 9 Marks").

[26]            As for evidence to support the motion, Sullivan relies on the affidavit of Karissa Ward, an associate with Osler, Hoskin & Harcourt LLP, the pleadings in this action and certain Orders and Reasons for Order, examinations for discovery and a schedule summarizing the evidence of adoption and use of each of the marks in dispute.

[27]            AGGLA filed a Motion Record in response to this motion. It relies on the Affidavits of Louise McLean, a law clerk employed by the solicitors for AGGLA, Marian Hebb, a solicitor for the Macdonalds, and of John B. MacDonald, the Registrar of Motor Vehicles for the Province of Prince Edward Island. Several exhibits accompany the affidavits. AGGLA also relies on the pleadings filed in this action.

PLAINTIFF'S SUBMISSIONS

[28]            Sullivan raises a number of arguments in support of its motion. First, it argues that certain persons in Canada who qualify as "public authorities" are entitled to benefits in relation to "official marks" pursuant to section 9(1)(n)(iii) of the Trade-marks Act, R.S.C. 1985, c. T-13, as am. (the "Act"). It says that these "official marks" are excluded from the definition of "trade-marks" and that the provisions of the Act relating to the registration, validity and enforcement of trade-marks do not apply to official marks. If a person who qualifies as a "public authority" has adopted and used a mark then requests the Registrar of Trade Marks to give public notice of its adoption and use, and the Registrar gives such notice, that person is entitled to enjoy the exclusive rights conferred by section 9. In this regard, the Plaintiff relies on Ontario Association of Architects v. Association of Architectural Technologists of Canada (2000), 9 C.P.R. (4^th) 496 (F.C.T.D.) at 503, reversed on other grounds, 2002 FCA 218, [2002] F.C.J. No. 813 (C.A.)(Q.L.).

[29]            Sullivan argues that the official marks listed in paragraphs 1(a)(iii) and 1(a)(iv) of the Amended Statement of Claim were not adopted and used by AGGLA before the Registrar of Trade-marks was requested to and gave notice of their adoption and use. Accordingly, AGGLA is not entitled to assert the benefits conferred under section 9(1(n)(iii).

[30]            Sullivan further argues that AGGLA is not entitled to assert the benefits granted under section 9(1)(n)(iii) for marks that have been used exclusively by the licensees. Sullivan also argues that in many instances, the licensing of the official mark in Canada has only occurred after the publication dates of such marks.

[31]            As well, Sullivan argues that the further notice given by the Registrar for the official marks identified above as those registered at the request of PEI, did not confer a right or asset capable of assignment by PEI. It argues that by purporting to assign all rights in such marks to AGGLA, PEI has waived whatever benefits it held pursuant to section 9(1)(n)(iii) of the Act.

[32]            Sullivan further argues that once a doubt is raised that a public authority has not used an official mark, the official mark holder cannot rely on its "bald assertion" of adoption and use, and must provide evidence of such adoption and use when a doubt is raised. In this regard, Sullivan relies on Piscitelli (c.o.b. Millenium Wines and Spirits) v. Ontario (Liquor Control Board) (2001), [2002] 1 F.C. 247 (T.D.) at paras 45-47.

[33]            Sullivan says that the AGGLA merely grants licences associated with Anne of Green Gables and has never engaged in the manufacture or sale of products in connection with the official marks. Consequently, it argues that AGGLA is not entitled to assert the exclusive rights conferred by section 9(1)(n)(iii).

[34]            The use of a trade-mark by a licensee can be deemed to be use of that trade-mark only if the trade-mark is licensed in accordance with section 50 of the Act. However, Sullivan argues that section 50 does not apply to official marks and here relies on Canada Port Corp. v. Post Office (2000), 8 C.P.R. (4^th) 289 (F.C.T.D.) at para. 52.

[35]            Finally, Sullivan submits that AGGLA cannot assert the benefits conferred by section 9(1)(n)(iii) of the Act by relying on section 48 of the Act because section 48 does not apply to official marks. It argues that there is no authority to assign official marks and the purported assignment of such marks from PEI to AGGLA is null and void.

[36]            Upon further direction of this Court, Sullivan and AGGLA were given the opportunity to provide further submissions on the October 29, 2002 Federal Court of Appeal judgment in FileNet Corp. v. Registrar of Trade-marks, 2002 FCA 418, [2002] F.C.J. No. 1508 (C.A.) (QL). Sullivan asserts that this decision does not change any of its submissions, as the Federal Court of Appeal upheld the decision and reasoning of Justice Blais at the Federal Court Trial Division, reported at, [2002] 1 F.C. 266 (T.D.).

[37]            Sullivan argues that both levels of FileNet, supra confirm that merely posting a notice in a private office cannot constitute "use" of an official mark pursuant to section 9(1)(n)(iii). Sullivan contends that the reasoning of Justice Blais, which was upheld by the Federal Court of Appeal, supports his argument that in order for an official mark to be "used" pursuant to section 9(1)(n)(iii), the mark must have been apparent and accessible to the public. Further, neither FileNet decision addresses whether "licensee support services" may qualify as a "use" within section 9(1)(n)(iii).

[38]            Sullivan also submits that the Court of Appeal decision in FileNet confirms that AGGLA has the burden of proving adoption and use, as Sullivan has adduced evidence that casts doubt on the issue of adoption and use prior to the dates of public notice of the official marks.

AGGLA'S SUBMISSIONS

[39]            AGGLA raises the following issues in reference to this motion for partial summary judgment. First, the Defendant argues that the Plaintiff lacks standing to bring this notice because it is not a "person interested" since it is not in the business of distributing films and television or in selling merchandise related to Anne of Green Gables.

[40]            Second, the Defendant argues that it has demonstrated adoption and use of the marks as of the publication date. In this regard, it relies on the use of the marks in tourist brochures and promotional guides for tourism in Prince Edward Island, as well as use of the marks on the Prince Edward Island licence plates.

[41]            Third, the Defendant submits that, on the basis of the principles set out in Granville Shipping Co. v. Pegasus Lines Ltd., [1996] 2 F.C. 853 (T.D.) at 859-60, summary judgment should only be granted where the case is so doubtful that it deserves no further consideration by the trier of fact at a future trial.

[42]            The Defendant argues that statements by a deponent on discovery are not formal admissions and are subject to weight and other testimony at trial. The statements made at discovery cannot outweigh evidence at trial; here the Defendant relies on Vancouver Sheet Metal Works Limited v. The Queen, [2001] 3 C.T.C. 65 (F.C.T.D.) at paras 20-21.

[43]            The Defendant argues that the Plaintiff is estopped from challenging the merchandising rights of the Macdonalds, having acknowledged those rights by letter agreements and correspondence, and here relies on [1966] S.C.R. 206">Cheerio Toys and Games Limited v. Dublin, [1966] S.C.R. 206 at 220.

[44]            Next, the Defendant says "adoption" and "use" of a mark can be established by placing a mark on a website or on manufactured goods. Here, the Defendant relies on FileNet Corp. v. Canada (Registrar of Trade-marks),supra (T.D.) at para 61, affirmed by 2002 FCA 418, and The Queen and Expo 86 Corp. v. Mihaljevic, et al. (1986), 10 C.P.R. (3d) 374 (B.C.S.C.) at 376.

[45]            The Defendant argues that the use by a licensee of an official mark constitutes use of the official mark by the owner; see Magnotta Winery Corp. v. Vintners Quality Alliance (2001), 214 F.T.R. 137, currently under appeal to the Federal Court of Appeal.

[46]            Further, the Defendant argues that "adoption and use" may be demonstrated by the Applicant or through its licensees, relying on the trial decision of Ontario Association of Architects, supra, at para. 25.

[47]            In regards to AGGLA's further submissions on the Federal Court of Appeal decision in FileNet, supra, AGGLA asserts that the Court of Appeal said that "use" pursuant to section 9(1)(n)(iii) is "sufficiently proved" simply by the original request to the Registrar to give public notice of the mark's adoption and use as an official mark which can then be rebutted by a party challenging the official mark with "some cogent reason" to believe that the mark was not adopted and used by the public authority prior to public notice being given: see FileNet, (FCA) at paras 9 and 11.

[48]            AGGLA submits that both levels of FileNet support its position, that AGGLA itself used certain marks in that such marks were "on display" at the offices of AGGLA in Toronto and Charlottetown prior to their respective publication dates. AGGLA also submits that it provided "licensee support services" in relation to these marks.

[49]            For other official marks, AGGLA submits that if there is not evidence of use by AGGLA itself, then there is "ample evidence" of use by its licensees prior to the publication date for each mark.    The Plaintiff has not demonstrated, according to AGGLA, that there is "some cogent reason" to dispute the adoption and use of the marks prior to their publication dates.

[50]            The Defendant says it is unnecessary for licensing authorities, such as AGGLA, who primarily authorize third parties to use their official marks in return for a royalty, to manufacture, sell or distribute wares and services in association with the official marks in order for their official marks to be valid and enforceable. The Defendant here relies on Expo 86 Corp., supra, at page 379.

[51]            Finally, relying on Bruce Trail Association v. Camp (2001), 12 C.P.R. (4^th) 104 at 110-111, the Defendant says that official marks can be assigned.

ISSUES

[52]            Three specific issues emerge from this motion for partial summary judgment, as follows:

          1.        Does the Plaintiff have standing to bring this motion?

          2.        Can an official mark be assigned from one public authority to another?

          3.        Have each of the official marks in issue been adopted and used within the meaning of section 9(1)(n)(iii)?

LEGISLATIVE PROVISIONS

[53]            The relevant provisions of the Act are sections 2, 9(1)(n)(iii), 48 and 50 which provide as follows:

ANALYSIS

i)    Standing

[54]            The first issue to be addressed is the standing of the Plaintiff to bring this motion. Paragraph 28 of the Amended Statement of Claim provides as follows:

Sullivan has completed the production and will shortly be distributing "Anne of Green Gables, The Continuing Story". Sullivan is in the process of completing the animated series and planning the associated merchandising program. Sullivan states that it is a person interested in the validity of the AGGLA Trade-mark Registrations, in AGGLA's ability to rely upon the benefits conferred on AGGLA under Section 9(1)(n)(iii) of the Trade-marks Act (Canada) in respect of the AGGLA Marks and the PEI Marks, in which AGGLA holds copyright in the works of Montgomery, and in whether rights exist in Montgomery's fictional characters because it is concerned that the Macdonalds and AGGLA may take steps to disrupt the distribution of "Anne of Green Gables, The Continuing Story", the animated series and the associated merchandising program and oppose the Sullivan Marks, thereby causing damage to Sullivan. Sullivan is further concerned that some of the Sullivan marks may be rejected by the Trade-marks Office because of the AGGLA Marks, PEI marks and AGGLA Registered Trade-marks.

[55]            The Defendant argues that the Plaintiff lacks standing to bring the motion for partial summary judgment because it is not a "person interested" as alleged in paragraph 28 of the amended statement of claim.

[56]            The Defendant relies on the affidavits of Louise McLean and Marian Hebb, with attached exhibits, and paragraph 28 of the amended Statement of Claim in support of this argument.

[57]            The McLean affidavit refers, among other things, to questions and answers from the discovery of Kevin Sullivan, a representative of the Plaintiff, particularly concerning paragraph 28 of the amended statement of claim.

[58]            At discovery, Mr. Sullivan admitted that Sullivan Entertainment International Inc. is the entity that distributes the Plaintiff's works. AGGLA now suggests that Sullivan Entertainment Inc., not the Plaintiff, is the true "interested party" in this action.

[59]            The Plaintiff argues that it does not have to establish its standing in order to challenge AGGLA's rights to the official mark in issue. It says that its challenge is brought pursuant to section 55 of the Act which provides as follows:

[60]            However, to the extent that the Plaintiff is seeking injunctive relief, section 53.2 is relevant and provides as follows:

[61]            The term "interested person" was considered in Mihalijevic v. British Columbia (1990), 34 C.P.R. (3d) 54 (F.C.A.), affirming (1988), 23 C.P.R. (3d) 80 (F.C.T.D.). The Federal Court of Appeal, at page 56, said:

A person is interested within the meaning of s.2 if there is a reasonable apprehension that he will suffer a prejudice of some sort if a trade mark is not removed from the register.

[62]            In Mihalijevic, supra, the Court dealt with an action for the expungement of marks concerning "Expo 86". The marks were registered trade marks as well as official marks for which the Registrar had given public notice pursuant to section 9(1)(n)(iii) at the request of the province of British Columbia. The Court held that since the party challenging the official marks failed to produce any evidence which cast doubt on the validity of the official marks and had sought only the expungement of the registered trade-marks, that party's position would not be changed by granting the relief sought, as the expungement of the trade-marks would not affect the existence of the official marks. Hence, the challenging party in Mihalijevic, supra, was not a "person interested" within the meaning of the Act.

[63]            In my opinion, Mihalijevic, supra is distinguishable from the present case where the Plaintiff is challenging the enforceability of the public notice of the official marks with evidence that AGGLA has allegedly not adopted and used in the marks in question prior to their publication date.

[64]            The Hebb affidavit addresses various agreements made between the Macdonald Defendants concerning an option for certain film and television rights based on Anne of Green Gables. The Defendant AGGLA says that with the exception of this option, all other rights were specifically reserved to the Macdonalds.

[65]            This question of standing has been raised before by the Defendants, specifically by way of a motion to strike, among others, paragraphs 1(a)(i), (ii), (iii) and (iv) of the Plaintiff's statement of claim without leave to amend. The Defendant claimed that the Court lacked jurisdiction to entertain the Plaintiff's action for the relief sought in these paragraphs noted above. The motion was denied by Associate Senior Prothonotary Giles by an order dated June 6, 2000; see Sullivan Entertainment Inc. v. Anne of Green Gables Licensing Authority Inc. (2000), 7 C.P.R. (4^th) 532 (F.C.T.D.).

[66]            An appeal from this order was dismissed by Justice Muldoon on October 19, 2000; see Sullivan Entertainment Inc. v. Anne of Green Gables Licensing Authority Inc. (2000), 9 C.P.R. (4^th) 344 (F.C.T.D.). It is clear from paragraph 8 of his reasons that the Defendants had raised the issue of the Plaintiff's standing in their earlier motion to strike, for the Court refers to this argument advanced by the Defendants.

[67]            After reviewing the reasons of the Associate Senior Prothonotary, Justice Muldoon, at paragraphs 26 and 27 identified the issues as follows:

Without considering the findings of Associate Senior Prothonotary Giles, the issue of whether the paragraphs in question should be struck from the statement of claim remains to be examined. As was previously noted, the plaintiff, Sullivan, is not challenging the decision of the registrar to publish notice of the marks claimed. What is being challenged is the ability of the defendants to benefit from the protection under section 9 of the Act when they apparently fail to meet the criteria of a public authority.

The defendants maintain that they constitute a public authority due to the involvement of the Prince Edward Island government in the development and maintenance of the AGGLA. However, Sullivan counters this argument by applying the three-part test enumerated by the Federal Court of Appeal in Registrar of Trade Marks v. Canadian Olympic Association, supra. In applying this test to the constitution of the defendants, particularly the AGGLA, one cannot agree that it is "plain and obvious that this portion cannot succeed." While it is a novel claim as admitted by Sullivan, it is one which raises important questions regarding the definition of a public authority, and regarding who can rightly assert a claim to the section 9 benefits.

[68]            In my opinion, the record is clear that the status of the Plaintiff to bring this action has been considered, pending a full trial on the issue, albeit in the context of a motion to strike. This argument of the Defendant must fail.

ii)    Assignability of the PEI Marks

[69]            A subsidiary issue is whether PEI was legally entitled to assign certain official marks to AGGLA. The Plaintiff is effectively arguing that official marks cannot be assigned.

[70]            Section 9(1)(n)(iii) of the Act is the key to these questions. In Techniquip Ltd. v. Canadian Olympic Association (1998), 80 C.P.R. (3d) 225 (F.C.T.D.), aff'd. (1999), 3 C.P.R. (4^th) 298 (F.C.A.) at 233 of the trial decision, the Court described the purpose of section 9 as follows:

In my view, the intent of section 9 is to remove all the kinds of marks as listed above from the field of trade or business. It is to preclude any person from capitalizing on any well known, respected public symbol and adopting it for his or her own wares or services. These emblems badges or crests are associated with public institutions, not involved in trade or business, but which nevertheless are deemed to be invested with respectability, credibility and other civil virtues. Section 9, in a sense, ensures that these symbols do not become pawns of trade or proprietorship ..."

[71]            Official marks are unique within the context of the Act. Unlike commercial trade-marks, official marks are not examined by the Registrar's Office and there is no need for them to be distinctive. There is no provision in the Act for any party to oppose their notification. They are perpetual and there are no maintenance fees (see: Techniquip, supra and FileNet, supra and A. David Morrow, "Official Marks" in G.F. Henderson, Trade-marks Law of Canada (Toronto: Carswell, 1993) 377).

[72]            As noted above, the Plaintiff argues that the official marks originally granted to PEI could not have been assigned to AGGLA. It says that PEI did not have the right to assign its marks to AGGLA and having done so, has waived its protected position under s. 9(1(n)(iii). On the other hand, the Defendant AGGLA, relying on Bruce Trail Assn., supra submits that the marks could be assigned by PEI.

[73]            Section 48 of the Act permits the assignment of a trade-mark with or without goodwill. However, section 48 says nothing in particular about the assignment of an official mark; it refers only to the transfer of a trade-mark.

[74]            In my opinion, the issue of the assignability of an official mark is to be determined by assessing the status of the transferee. In Bruce Trial Assn., supra, the transferee was found to be a public authority. The status of AGGLA as a public authority, or otherwise, remains undecided in this case at this time. The proper factual context has not been established to support this argument. Accordingly, this argument fails.

iii)    Adoption and Use

[75]            Next is the issue of whether AGGLA can rely on use by its licensees to show the required adoption and use as required by section 9(1)(n)(iii). Here, the Plaintiff relies on the decision in Canada Post Corp., supra. At paragraphs 50-52, the Court said as follows:

I agree with the Applicant on this point. Section 50 of the Act provides that in certain situations the use of a trade-mark by a licensee will be deemed to be the use by the owner of the trade-mark. There is no reference to official marks.

Moreover, subsection 9(2) of the Act specifically deals with the use of an official mark. Subsection 9(2) of the Act does permit another party to use an official mark but does not deem that use would accrue to the benefit of the owner of the official mark. Subsection 9(2) of the Act reads as follows:

9(2) Nothing in this section prevents the adoption, use or registration as a trade-mark or otherwise, in connection with a business, of any mark ...

I am of the view that subsection 9(2) of the Act provides a code for the use of official marks and I am unable to infer from the silence of the legislator the same legal effect as provided for trade-marks in section 50 of the Act.

[76]            In response, the Defendant relies on Magnotta Winery Corporation, supra, paragraph 59 where the Court said:

Moreover, it is Magnotta's own evidence that it was a member of VQA and that it used the mark ICEWINE and the mark VQA for some years. Use of the marks of VQA by its members was use by VQA, for only members of the association, or those licensed by it, had the right to use the marks. Their use constituted use by VQA and demonstrated adoption of the mark by VQA. Nothing precludes the use of an official mark by a party licensed or otherwise permitted to use it by the public authority whose adoption and use of the mark has been accepted and published by the Registrar, and that authorized use constitutes use by the public authority.

[77]            The Defendant says that the statement in Canada Post Corp., supra, upon which the Plaintiff relies, is merely obiter and that the decision in Magnotta Winery Corporation is authoritative.

[78]            In this proceeding, the Plaintiff filed a schedule by which it seeks to demonstrate the lack of evidence concerning adoption and use of the marks. Likewise, the Defendant provided evidence, including a schedule purporting to show the existence of adoption and use.

[79]            In its recent decision in FileNet Corp., supra, the Federal Court of Appeal said that adoption is a question of fact. In paragraph 11, the Court said:

... In my view, the question of adoption of an official mark is a question of fact. In this case, and I would expect in most cases, that fact is sufficiently proved by the request to the Registrar to give public notice under section 9 unless there is some cogent reason to believe that the request was not authorized.

[80]            As for the question of "use", the Federal Court of Appeal upheld the finding of the trial judge that the posting of an official mark on a website in connection with an internet filing service was "use" of an official mark.

[81]            In my opinion, the nature and volume of material submitted show that this issue of adoption and use should not be decided in a motion for partial summary judgment. Proof of use here is premised, in part, upon use by licensees. There is conflicting jurisprudence in this Court on whether such use, in relation to official marks, meets the requirements of section 9(1)(n)(iii) relative to adoption and use prior to the date of publication. The decision upon which the Defendant relies, that is Magnotta, supra, is presently under appeal.

[82]            Furthermore, there is a question whether the status of a licensee, as a public authority or not, affects the legal consequences of use by a licensee, having regard to the nature and purpose of section 9 marks as described by the Court in Techniquip, supra. Official marks are special marks and according to Techniquip, supra, are held apart from purely commercial endeavours.

[83]            In my opinion, the issue of the legal significance of use by licensees should be aired in a full trial.

[84]               There are issues of credibility, reliability and weight involved. As well, there is the status of AGGLA as a public authority which is central to the action.

iv) Summary Judgment

[85]            The principles governing the availability of summary judgment, in whole or in part, are set out in Granville Shipping Co. Inc., supra at pages 859-860. It is unnecessary to repeat them in full but at the same time, it is worthwhile to refer to the cautionary note sounded by the Court, that summary judgment should only be granted when a case is so doubtful that it does not deserve consideration by the trier of fact at a future trial.

[86]            I note that some of the paragraphs that the Defendant unsuccessfully tried to strike from the amended statement of claim are now the subject of this motion for partial summary judgment. The Plaintiff took the position, in relation to the present motion, that the status of AGGLA as a "public authority" is not an issue upon which the disposition of this motion depends. In my opinion, the status of AGGLA as a public authority is vital to the ultimate outcome of this proceeding and I do not see how it can be isolated from this motion.

[87]            I refer to an early judgment which considered a motion for summary judgment, that is Marine Atlantic Inc. v. Blythe (1994), 77 F.T.R. 97 (F.C.T.D.). There, Justice Reed decided that it was inappropriate to grant summary judgment on an issue that could not be separated from other, pending issues in the action.

[88]            This approach has been adopted and followed by this Court in Aussant v. Canada (2000), 188 F.T.R. 245 at paras. 57-58 and Pallmann Maschinenfabrik G.m.b.H. Co. KG v. CAE Machinery Ltd. (1995), 98 F.T.R. 125 at para 43.

[89]            In my opinion, the same reasoning applies in this case.

[90]            The motion for summary judgment is dismissed. Unless the parties can agree on costs, further submissions can be filed on that issue.

                                                                                           "E. Heneghan"

                                                                                                      J.F.C.C.

OTTAWA, ONTARIO

December 20, 2002

                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                 T-1634-99

STYLE OF CAUSE: SULLIVAN ENTERTAINMENT INC. v. ANNE OF

                                                                                   GREEN GABLES ET AL

PLACE OF HEARING:         TORONTO

DATE OF HEARING:           TUESDAY, JUNE 25, 2002

REASONS FOR ORDER AND

ORDER :                                 THE HONOURABLE MADAM JUSTICE HENEGHAN J.

DATED:                                   December 20, 2002

APPEARANCES:      Mr. Randy Pepper

                                                  Mr. Webster

                                                                                                       FOR PLAINTIFF

                                                  Mr. Roger Hughes Q.C.

                                                  Mr. Trent Horne

                                                                                                       FOR DEFENDANT

SOLICITORS OF RECORD:

Mr. Randy Pepper

                                                  Mr. Webster

                                                  Barristers & Solicitors

                                                  Osler, Hoskin & Harcourt

                                                  1 First Canadian Place, Box 50

                                                  Toronto, Ontario, M5X 1B8

                                                                                                       FOR PLAINTIFF

                        Mr. Roger Hughes, Q.C.

                                                  Mr. Trent Horne

                                                  Sim, Hughes, Ashton & McKay

                                                  330 University Avenue, Toronto,

                                                                                                       FOR DEFENDANTS

FEDERAL COURT OF CANADA

                                                                                          TRIAL DIVISION

Date: 20021220

Docket: T-1634-99

BETWEEN:

SULLIVAN ENTERTAINMENT INC.

- and -

                                                                        Plaintiff

ANNE OF GREEN GABLES LICENSING AUTHORITY INC. ET AL

                                                                     Defendants

REASONS FOR ORDER AND ORDER