Bab Holdings Inc. v. Big Apple Ltd., 2002 FCT 72

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2002 FCT 72

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Text of decision

Date: 20020122

Docket: T-1623-00

Neutral citation: 2002 FCT 72

BETWEEN:

BAB HOLDINGS, INC.

Applicant

- and -

THE BIG APPLE LTD.

Respondent

REASONS FOR ORDER

McKeown J.

[1] The applicant, Bab Holdings, Inc. seeks an order setting aside the June 30, 2000 decision of the Trade-marks Opposition Board ("TMOB") refusing the applicant's application to register the trade-mark BIG APPLE BAGELS & Design (No. 738,724) and directing the Registrar of Trade-marks to reject the respondent's opposition to this application.

[2] The issues are: what is the appropriate standard of review, and did the TMOB err in refusing the applicant's application for registration of the trade-mark?

FACTS:

[3] On October 8, 1993, the applicant filed a trade-mark application based on the proposed use in Canada, to register its BIG APPLE BAGELS & Design trade-mark in Canada for use in association with:

bakery products, namely bagels, pretzels, twists and chips made of bagels; deli foods, namely cream cheese bagel sandwiches, soup; non-alcoholic drinks, namely coffee, juice, tea, milk, soda (the Wares) and with restaurant and carry out services; franchise services, namely supplying food and recipes, business methodology, marketing support, training and instructions for operating a franchise restaurant (the Services).

[4] On November 14, 1995, the respondent opposed the application on four grounds which were set out in the written argument of the opponent. The four grounds are:

(1) The application did not comply with section 30(i) of the Trade-Marks Act ("the Act") because the applicant could not have been satisfied of its entitlement to use the applied-for mark;

(2) The applied-for mark was not registrable under paragraph 12(1)(d) of the Act because it was confusing with the respondent's registered BIG APPLE trade-mark (389,455);

(3) The applicant was not the person entitled to register the applied-for mark pursuant to section 16 of the Act because it was confusing with the respondent's claimed trade-marks and trade-names; and

(4) The applied-for mark was not distinctive of the applicant's wares and services;

[5] The Registrar based his decision on the last ground of opposition and accordingly it was not necessary for him to consider the remaining grounds of opposition. The Registrar stated, in his decision of June 30, 2000:

Of course, in the instant case, the subject application for BIG APPLE BAGELS & Design is not under subsections 12(2) or 13 of the Trade-marks Act and therefore the subject application cannot be territorially limited.

Having regard to the parties' evidence, it appears to me that persons living in or around the area of Colborne, Ontario at the material time November 14, 1995, upon hearing or seeing the applied for mark BIG APPLE BAGELS & Design used in association with bagels or with restaurant services, and already being familiar with the opponent's marks THE BIG APPLE and APPLE DESIGN used in association with baked goods and restaurant take-out services, would likely assume that the applicant's goods and services are approved, licensed, or sponsored by the opponent. It follows that the trade-marks are confusing and that the applied for mark is not distinctive of the applicant's wares and services: see Glen-Warren Productions Ltd. v. Gertex Hoisery Ltd. (1990), 29 C.P.R. (3d) 7 at 12 (F.C.T.D.).

ANALYSIS:

[6] Since the Registrar relied on the fourth ground of opposition, it is important to note that the onus or legal burden is on the applicant to show that its mark is adapted to distinguish or actually distinguish its services from those of others throughout Canada (Muffin Houses Inc. v. The Muffin House Bakery (1985), 4 C.P.R. (3d) 272).

[7] I must now decide the appropriate standard of review in the case before me. The Federal Court of Appeal in Molson Breweries v. John Labatt Limited (2000), 5 C.P.R. (4^th) 180 (F.C.A.) applied the standard of "reasonableness simpliciter" where the Registrar's decision represents a mixed finding of fact and law. Rothstein J.A. commented on the standard of review in the case of United Grain Growers Ltd. v. Lang Michener, [2001] 3 F.C. 102 (F.C.A.) at 107 where he stated:

In Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145, this Court held that decisions of the Registrar, whether of fact, law or discretion within his or her area of expertise, are to be reviewed on a standard of reasonableness simpliciter. Where additional evidence is adduced in the Trial Division that would materially affect the Registrar's findings of fact or exercise of discretion, the Trial Division Judge must come to his or her own conclusion as to the correctness of the Registrar's decision.

[8] In the case before me there was no additional evidence adduced and the record before this Court is essentially identical to that which was before the TMOB. Accordingly, the standard to be applied with respect to the factual findings and application of the law to the facts is reasonableness simpliciter. The standard to be applied to strictly legal questions, however, is correctness. In the case before me the strictly legal issues relate to the proper date for determining distinctiveness and whether exclusive use must be proven throughout Canada in order to prove distinctiveness. These issues are not within the TMOB's expertise and thus are subject to a standard of correctness.

[9] While normally a trademark can be registrable even if it is territorially limited, this is not an application to which subsection 12(2) or section 13 of the Trade-marks Act applies, as correctly noted by the hearing officer. Accordingly, as noted by the TMOB, given the reputation of the respondent's marks THE BIG APPLE and APPLE DESIGN not only in the Colborne area but throughout the 401 corridor area, the applicant's mark does not and cannot have the requisite distinctiveness to support the granting of a trade-mark registration.

[10] The applicant had stated that the TMOB should have dealt with all the circumstances as set out in subsection 6(5) of the Act. However, Denault J. stated in Clarco Communications Ltd. v. Sassy Publishers Inc. (1994), 54 C.P.R. (3d) 418 (F.C.T.D.) at page 428:

The ground of opposition considered here is set out in s. 38(2)(d) of the Trade-marks Act: "that the trade mark is not distinctive". "Distinctive" is defined in s. 2 of the Act as:

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

While distinctiveness is quite often determined as part of an evaluation of whether the proposed trade mark is confusing with another trade mark within the meaning of s. 6 of the Act, it is possible to refuse an application for registration on the basis of non-distinctiveness independent of the issue of confusion, provided the ground is raised in opposition. This is because of the reference to "others", meaning any other person, provided in the definition and because the material dates for determining the issues are different. The appellant argued that s. 17(1) applied to the ground of distinctiveness such that the opponent could not rely on evidence relating to "others" who are not the opponent's predecessors in title. I must disagree. The quality of distinctiveness is a fundamental and essential requirement of a trade mark and the ground of lack of distinctiveness may be raised in opposition by any person and may be based on a failure to distinguish or to adapt to distinguish the proposed trade mark from the wares of any others.

As in the Clarco case, the statement of opposition set out the ground in its written opposition.

[11] In Glen-Warren Productions Ltd. v. Gertex Hosiery Ltd. (1990), 29 C.P.R. (3d) 7 (F.C.T.D.) the Court tied the question of distinctiveness into confusion and stated that the Registrar was entitled to do so. Dubé J. stated at page 12:

It is settled law that where it is likely the public will assume the applicant's goods are approved, licensed, or sponsored by the opponent so that a state of doubt and uncertainty exists in the minds of the purchasing public, it follows that the trade-marks are confusing:

[12] I must now review the issue of the appropriate date for assessing distinctiveness. In my view, Reed J. stated the matter correctly in American Association of Retired Persons v. Canadian Association of Retired Persons (1998), 84 C.P.R. (3d) 198 (F.C.T.D.) where she stated at page 207 beginning at paragraph 20:

[20]... The material date as of which the respondent must prove distinctiveness is the date of the filing of the Statement of Opposition (January 31, 1992). There is some uncertainty in the jurisprudence concerning the appropriate date for the latter but I think the date that is generally accepted is the date of the filing of the opposition....

[21] In Clarco Communications Ltd. v. Sassy Publishers Inc. (1994), 54 C.P.R. (3d) 418 (F.C.T.D.), Mr. Justice Denault raised some doubt, however, as to whether the filing date was the correct date for the assessment of distinctiveness. He relied on the Federal Court of Appeal decision in Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 at 429-430, and suggested that the date for the assessment of distinctiveness should be the date as of which the Registrar disposes of the opposition.

[22] The Park Avenue case however dealt with the registrability of the mark, not an opposition based on lack of distinctiveness. The logic of the finding was that registrability should be decided at the date of registration or at the date of refusal or registration, and not by reference to some earlier time...

...

[24] The most recent statement on this issue is that of Madam[e] Justice Tremblay-Lamer in Molson Breweries, a Partnership v. John Labatt Ltd. (1998), 148 F.T.R. 281, 82 C.P.R. (3d) 1, [1998] F.C.J. No. 929 (QL) (T.D.). At paragraphs 50-56, she summarizes the state of the law and suggests that the material date for a determination of distinctiveness is the date the opposition was filed, and that this was not changed by the Federal Court of Appeal's reasons in Park Avenue Furniture.

[13] Since this is not an application by the applicant under subsection 12(2), the date set out in 12(2) is not the date to assess distinctiveness. Furthermore, even though the comments are obiter in some of the cases which state that it is the date of filing of the statement of opposition, I am satisfied that the law is that the relevant date is the date of the filing of the statement of opposition.

[14] The application is dismissed. The decision of the TMOB dated June 30, 2000 is upheld, with costs to the respondent, The Big Apple Ltd.

"W. P. McKeown"

JUDGE

TORONTO, ONTARIO

January 22, 2002

FEDERAL COURT OF CANADA

Names of Counsel and Solicitors of Record

COURT NO: T-1623-00

STYLE OF CAUSE: BAB HOLDINGS, INC.

Applicant

- and -

THE BIG APPLE LTD.

Respondent

DATE OF HEARING: WEDNESDAY, JANUARY 16, 2002

PLACE OF HEARING: TORONTO, ONTARIO

REASONS FOR ORDER BY: McKEOWN J.

DATED: TUESDAY, JANUARY 22, 2002

APPEARANCES BY: Ms. Stephanie Vaccari

For the Applicant

Mr. Marcus Gallie, and

Tim Bourne

For the Respondents

SOLICITORS OF RECORD: Baker & McKenzie

Barristers & Solicitors

181 Bay Street, P.O. Box 874

Suite 2100

Toronto, Ontario

M5J 2T3