Weetabix of Canada Ltd. v. Kellogg Canada Inc., 2002 FCT 724

Date: 20020624

Docket: T-2343-97

Neutral Citation: 2002 FCT 724

Ottawa, Ontario, June 24, 2002

Present:    The Honourable Mr. Justice Blais           

BETWEEN:

                       WEETABIX OF CANADA LIMITED

                                                                Appellant

                                                               (Applicant)

                                   and

                          KELLOGG CANADA INC.

                                                               Respondent

                                                                (Opponent)

                         REASONS FOR ORDER AND ORDER

[1]                 This application is an appeal brought by the Appellant pursuant to section 56 of the Trade-marks Act [hereinafter referred to as the "Act"] from a decision of the Registrar of Trade-marks [hereinafter referred to as the "Registrar"] dated September 4, 1997 wherein the Registrar refused the Application for Registration of the trade-mark FRUIT DOTS for breakfast cereals under Application No. 704, 156.

FACTS

[2]                 An application was filed by the Appellant on May 1, 1992 for registration of the trade-mark FRUIT DOTS in association with breakfast cereals based on a proposed use in Canada.

[3]                 On February 23, 1993, the Respondent filed a Statement of Opposition.

[4]                 On or about June 11, 1993, the Appellant filed a Counterstatement denying all allegations set out in the Statement of Opposition except the allegation that the Respondent is the owner of record of Registration No. 215,186 for trade-mark FROOT LOOPS.

[5]                 On August 12, 1997, an oral hearing was conducted at which both parties were represented.

[6]                 On September 4, 1997 the Registrar refused the Appellant's Application for Registration of the trade-mark FRUIT DOTS.

IMPUGNED DECISION

[7]                 The Registrar found the Appellant's trade-mark FRUIT DOTS to be confusing with the trade-mark FROOT LOOPS.

[8]                 At page 7 of the decision, which can be found at page 17 of the Applicant's Record Volume I of VII, the Registrar came to the following conclusion:

Pursuant to the authority delegated to me under Section 63(3) of the Act, I refuse the applicant's application.

RELEVANT LEGISLATION

[9]                 Subsection 6(2) of the Act provides the test for the issue of confusion.

[10]            Subsection 6(5) of the Act provides a list of factors to be considered in determining the issue of confusion.

[11]            Subsection 16(3) of the Act pertains to the registration of a proposed trade-mark.

[12]            Section 56 of the Act provides a very broad right of appeal which permits the Court to exercise any discretion which the Registrar has under the Act.

[13]            Subsections 56(2), 56(3), 56(4) of the Act are technical provisions. Subsection 56(5) of the Act however grants the Court a substantial degree of latitude in reviewing decisions of the Registrar, particularly when additional and substantive evidence has been filed.

APPELLANT'S POSITION

[14]            The Appellant submits that the Registrar erred in fact and law in holding that its trade-mark FRUIT DOTS is confusing with the Respondent's trade-mark FROOT LOOPS.

[15]            The Appellant contends that the Registrar erred in fact and law in disregarding the effect of the presence and co-existence on the Trade-Mark Register [hereinafter referred to as the "Register"] of similarly named breakfast cereal trade-marks, and thus misapprehended the appropriate legal test on the issue of confusion.

[16]            The Appellant further alleges that the Registrar erred in fact and law in finding that the Appellant's proposed trade-mark FRUIT DOTS is confusing with the trade-mark FROOT LOOPS, despite having concluded that the word "FRUIT" or its phonetic equivalent "FROOT" is descriptive of the flavouring of the wares, that the visual appearance of the words "FRUIT" and "FROOT" are dissimilar as a result of the difference in spelling and that the words "DOTS" and "LOOPS" differ in appearance, sound, meaning, and ideas suggested.

[17]            Lastly, the Appellant submits that because additional evidence of a substantial nature is before this Court which was not before the Registrar, the standard of review of correctness is applicable and consequently, a trial de novo is appropriate.

RESPONDENT'S POSITION

[18]            The Respondent submits that the Registrar's decision to refuse the Appellant's Application for the trade-mark FRUIT DOTS was both reasonable and correct as there is confusion with its trade-mark FROOT LOOPS.

[19]            The Respondent relies on the fact that its trade-mark FROOT LOOPS is a famous mark and has acquired distinctiveness through extensive use and advertising revealing that the Registrar's decision was reasonable and correct.

[20]            The Respondent further alleges that the Appellant's additional evidence is irrelevant or immaterial on various grounds and that there is insufficient evidence which would have materially affected the Registrar's overall decision as to confusion.

ISSUES

1.        What is the material date for assessing confusion under section 16(3) of the Act?

2.        Did the Registrar err in refusing to register the Appellant's trade-mark FRUIT DOTS?

ANALYSIS

1.        What is the material date for assessing confusion under section 16(3) of the Act?

[21]            The parties have submitted supplementary arguments which I have carefully examined.

Appellant's argument

[22]            The Appellant holds that the material date should be September 4, 1997 (the date of the Registrar's decision). In so deciding, the additional evidence submitted by the Appellant could therefore be considered for the purposes of assessing the issue of confusion.

Respondent's argument

[23]            The Respondent, however, alleges that the additional evidence is irrelevant and of little weight for the purposes of assessing the issue of confusion as the evidence relates to the alleged state of the marketplace well after May 1, 1992 (the date of filing of the Application). Also, the additional evidence presented by the Appellant fails to bear the same degree of similarity and so, little inference can be drawn from their existence.

Finding

[24]            Even if there is case law supporting the position that the material date should be the date of filing of the Opposition, and case law supporting the position that the material date should be the date of the Registrar's decision, as suggested by counsel for the Appellant, most of the decisions are highly fact driven.

[25]            The Appellant has failed to demonstrate why this Court should depart from the express wording of subsection 16(3) of the Act.

[26]        The case of Paragon Clothing Ltd. v. Hugo Boss Ag, [1994] F.C.J. No. 1664 (F.C.T.D.) is instructive. In Paragon, supra Pinard J. clearly determined the material date as being the date of filing of the Application:

[para 20] [...] The material time therefore for considering the circumstances respecting this issue is as of the appellant's application filing date and the onus is on the appellant to establish that there is no reasonable likelihood of confusion between the trade marks at issue.

[para 21] In the context of this particular ground of opposition, the only new admissible evidence relevant to assessing the likelihood of confusion between the trade marks at issue, given my conclusions above on the first issue, is evidence of surrounding circumstances which existed at the material date, namely the filing date of the appellant's application for registration of the mark VICTOR HUGO & Design. Accordingly, no evidence concerning the use of the trade mark VICTOR HUGO & Design can be considered given the appellant did not commence using such mark until after filing its application for proposed use.

[27]            Therefore, I find that the material date is the date of filing of the Application and that the additional evidence submitted by the Appellant that is subsequent to the material date shall be ignored.

2.        Did the Registrar err in refusing to register the Appellant's trade-mark FRUIT DOTS?

[28]            Yes, the Registrar did err in refusing to register the Appellant's trade-mark FRUIT DOTS.

Onus

[29]            The onus of establishing lack of confusion falls on the shoulders of the Appellant. This has been confirmed in the case of Miss Universe v. Bohna (1995), 58 C.P.R. (3d) 381 (F.C.A.) where Hugessen, Décary and Létourneau JJ.A. held:

The onus is always upon an applicant for the registration of a trade mark to establish that, on the balance of probabilities, there is no likelihood of confusion with a previously used and registered trade mark. (See Sunshine Biscuits, Inc. v. Corporate Foods Ltd. (1982), 61 C.P.R. (2d) 53 at p. 57 (F.C.T.D.), Cattanach J. and Molnlycke Aktiebolag v. Kimberly-Clark of Canada Ltd. (1982), 61 C.P.R. (2d) 42 (F.C.T.D.), Cattanach J.).

[30]            Again in Miss Universe, supra the Federal Court of Appeal affirmed:

The stronger the mark is, the greater the ambit of protection it should be accorded and the more difficult it will be for an applicant to discharge the onus.

[31]            It is clear that cereal and snack food products are food products which are closely related to one another, both in terms of the businesses themselves and the use of cereal products as snack foods and as ingredients in the snack foods. However, as stated in Molson Companies Ltd. v. John Labatt Ltd. (1994), 58 C.P.R. (3d) 527 (F.C.A.) and discussed in more depth later, there are small differences which suffice to distinguish the trade-marks from one another. Namely, in the case at bar it is the spelling of the first word "FRUIT"versus "FROOT", and the appearance, sound and meaning of the second word "DOTS" versus "LOOPS".

Definitions of DOTS, LOOPS, CIRCLES, HOOPS, RINGS, WHIRLS

[32]            The state of the Register shows that words which allude to the shape of cereals are also commonly used.

[33]            A search of the Register discloses many trade-marks which co-exist with the Respondent's FROOT LOOPS which contain the word "FRUIT" and were filed before the material date.

[34]            Some of these include:

[35]            Therefore it would seem that the trade-mark FRUIT DOTS is no different from some of the aforementioned trade-marks since it too is composed of two (2) words: one (1) referring to the flavour of the cereal and one (1) referring to the shape of the cereal, specifically I refer to the trade-marks FRUIT RINGS and FRUIT WHIRLS. And as such, the small differences will suffice to differentiate the trade-marks FRUIT DOTS and FRUIT LOOPS, particularly the different spelling of the first word and the different appearance, sound and meaning of the second word.

Subsection 6(2) of the Act - Confusion

[36]            The test for the issue of confusion is set out at subsection 6(2) of the Act. Interpretation of this provision is found in the case of Miss Universe, supra where the Federal Court of Appeal held:

To decide whether the use of a trade mark or of a trade name causes confusion with another trade mark or another trade name, the court must ask itself whether, as a matter of first impression on the minds of an ordinary person having a vague recollection of that other mark or name 1, the use of both marks or names in the same area in the same manner is likely to lead to the inference that the services associated with those marks or names are performed by the same person, whether or not the services are of the same general class.

[37]            In addition, to determine whether trade-marks are confusing, this Court is to have regard to all the surrounding circumstances of the case, including but not restricted to those specifically enumerated at subsection 6(5) of the Act. This was affirmed by Rand J. in General Motors Corp. v. Bellows (1949), 10 C.P.R. 101:

[...] we must take into account the entire circumstances of the trade, including the prices, the class of people purchasing, and the ordinary manner in which they do that. [...]

Paragraph 6(5)(a) of the Act - Inherent distinctiveness of the trade-marks and the extent to which they have become known

[38]            It is trite law that common words which are descriptive or suggestive of a characteristic of a product have little inherent distinctiveness.

[39]            In the present matter, the Appellant submits that the Registrar erred in deciding that the use of the trade-mark was not suitably distinct from that of the Respondent so as to avoid confusion amongst the general population. Whereas the Respondent contends that the Registrar accurately rejected the Appellant's submissions on the basis of the Respondent's ongoing use of the trade-mark. Specifically, the Respondent alleges that it has been using the trade-mark FROOT LOOPS in relation to a business of breakfast cereal for the past 30 years (since 1964) and feels that there is a clear overlap in the Appellant's use of the trade-mark and their own. The Respondent relies heavily on the fame of its trade-mark to prove its distinctiveness.

[40]            The Registrar found the Appellant's trade-mark FRUIT DOTS to be confusing with the trade-mark FROOT LOOPS despite a clear finding that the parties' marks are not inherently distinctive. This is difficult for the Court to reconcile. At page 4 of the decision, (found at page 14 of the Applicant's Record Volume I of VII), the Registrar held:

With regard to Section 6(5)(a), the inherent distinctiveness of the marks in question and the extent to which they have become known, the marks are not inherently distinctive or coined, as indicated by the opponent. The word FRUIT (or FROOT, which I have considered to be the phonetic equivalent of FRUIT) described the flavouring of the opponent's and applicant's wares. This word was disclaimed in both the applicant and opponent's trade-mark implying that the parties acknowledge that it is clearly descriptive of an aspect of the these wares. Furthermore, the word DOT and the word LOOPS merely describe the shape of the breakfast cereal. As a result, the marks merit a narrow ambit of protection. With respect to the extent to which the marks have become known, the applicant's mark is based on proposed use, and no evidence was filed showing use in Canada. The opponent on the other hand has evidenced more than 30 years of use and advertising in Canada. The opponent has alleged that it has a famous mark, and the applicant conceded this fact in its written argument.

(my emphasis)

[41]            It is evident that when broken down to their basic elements, the trade-marks FRUIT DOTS and FROOT LOOPS have very limited inherent distinctiveness. The word "FRUIT" (or its phonetic equivalent "FROOT") is merely descriptive of the flavouring of the product. The words "DOTS" and "LOOPS" allude to the shape of the product and again do not enhance any inherent distinctiveness of the trade-marks as the words are merely descriptive.

[42]            In the case of In the case of Molson Companies Ltd. v. John Labatt Ltd. (1994), 58 C.P.R. (3d) 527 (F.C.A.), Strayer, Desjardins and Létourneau JJ.A.held:

In the present case, the appellant claims that the words "golden" and "gold" have been extensively used and advertised in relation to Molson's products so as to acquire some distinctiveness which makes them worthy of a broad protection. In our view, although it is true that these words were widely used by the appellant over a considerable period of time, one should not lose sight of the fact that the words are merely descriptive.

In Office Cleaning Services, Ltd. v. Westminster Window and General Cleaners, Ltd. (1946), LXIII Reports of Patent, Design, and Trade Mark Cases 39 at p. 43, Lord Simonds clearly established the inherent limits to the use of a descriptive word as the basis for a claim of distinctiveness of a trade mark and alleged confusion between it and other marks:

The Court will undoubtedly take into consideration long user [sic] of a descriptive name but will not forget that, since it is descriptive, small differences may suffice.

...It comes in the end, I think, to no more than this, that where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first user is allowed unfairly to monopolise the words. The Court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered.

(my emphasis)

[43]            The small differences which suffice to distinguish the trade-marks FRUIT DOTS and FROOT LOOPS lie in the spelling of the word "FRUIT" and in the appearance, sound and meaning of the second word "DOTS" and "LOOPS."

[44]            However, it is the unique combination of the trade-mark FROOT LOOPS which in fact does make it distinctive. Yet, I do not believe confusion between the two trade-marks will arise.

Paragraph 6(5)(b) of the Act - The length of time the trade-marks have been in use

Concurrent use in the United States

[45]            Likewise, I find that the co-existence of the parties' trade-marks in the United States for many years is a good indication of the lack of possible confusion between the trade-marks here in Canada and is a determinative factor. At page 5 of the affidavit of John Stalker (Applicant's Record Volume II of VII), it is read:

14.     I am also aware that MY COMPANY'S American sister corporation, Weetabix Company Inc., has also been distributing FRUIT DOTS in the United States since at least the late 1980's. There has thus been coexistence in the marketplace between MY COMPANY'S FRUIT DOTS products and Kellogg's FROOT LOOPS product in both the United States and Canada for a number of years. Indeed the trade-mark FRUIT DOTS has been registered in the United States Trademarks Office in the name of MY COMPANY's sister corporation, Weetabix & Company Inc., since June of 1988.

(my emphasis)

[46]            There is relevance where, as here, the trade-marks in question are identical to the trade-marks co-existing in the United States (see Sun-maid Growers of Canada v. Williams & Humbert Ltd. (1981), 54 C.P.R. (2d) 41 (F.C.T.D.).

[47]            In Multiplicant Inc. v. Petit Bateau Valton S.A. (1994), 55 C.P.R. (3d) 372 (F.C.T.D.), Joyal J. held:

It would seem that all the marks in issue are widely known in Canada. Used in association with similar products, they have coexisted for several years. To all appearances, the long-term use of similar marks, side by side, reduces the probability that confusion will "likely" occur, to use the test in s. 6(2) of the Act.

[...]

In Panavision, Inc. v. Matsushita Electric Industrial Co. (1992), 40 C.P.R. (3d) 486 at p. 497, 53 F.T.R. 228, 31 A.C.W.S. (3d) 459 (T.D.), I reiterated the fact that concurrent use for a long time was a determining factor:

It might very well be true that there are similarities between the two competing marks. It might very well be true that there is some overlapping in the leasing functions of the appellant and the leasing operations of the respondent. Similarities and overlapping of the nature of the wares and the nature of the trade, must always be measured or balanced by the other criteria set out in s. 6(5).

The two competing marks, as well as other similar marks, appear to have been surviving side by side and neither the Registrar nor this court have been provided with any evidence of actual confusion over the past 10 years.

(my emphasis)

[48]            I am of the opinion that in the present case, concurrent use has had the effect of mitigating the issue of confusion.

Paragraphs 6(5)(c) and 6(5)(d) of the Act - The nature of the wares, services or business and the nature of the trade

[49]            Both parties produce breakfast cereals and operate within the same industry. This is not at issue in the present matter.

Paragraph 6(5)(e) of the Act - The degree of resemblance between the trade-marks in appearance or sound or in the ideas suggested by them

[50]            The visual similarity between the parties' trade-marks reside in the two-word construction of the trade-marks. Both use the word "FRUIT" or one of its phonetic variants and both include a second word which alludes to the shape of the product:

                         FRUIT DOTS                     FROOT LOOPS

[51]            As mentioned previously, the use of the word "FRUIT" or a variant thereof, is descriptive of the flavour of the product and has thus, little inherent distinctiveness. It is however the second set of words that have a different sound and appear differently and this has the effect of differentiating the trade-marks. As to the idea suggested by the marks, there is some similarity mostly due to the fact that both products are breakfast cereals. However, the evidence shows that there are similarly coined trade-marks comprising the combination of the word "FRUIT" and another word alluding to the shape of the cereals which co-exist on the Register and have done so previous to the material date.

[52]            Therefore, I am of the view that the use of the trade-mark FRUIT DOTS is unlikely to be confused with the trade-mark FROOT LOOPS having regard to the similar third party trade-marks co-existing on the Register and in the marketplace, such as FRUIT RINGS and FRUIT WHIRLS.

[53]            Based on all of the foregoing and the fact that for a number of years, the trade-marks FRUIT DOTS and FROOT LOOPS have been co-existing concurrently in the marketplace in the United States without any known instances of confusion, confirms for the Court that there is a lack of confusion between the parties' trade-marks.

[54]            In conclusion, I believe the Registrar's decision was incorrect. In my opinion, the Appellant should succeed in this matter.

                                                                          O R D E R

[55]            Therefore I would allow the appeal with costs. The Registrar's decision is set aside and the matter is referred back for redetermination on the basis that Application No. 704, 156 for registration of the trade-mark FRUIT DOTS for breakfast cereals be granted.

Pierre Blais                                                                                                                         Judge