Date: 19991103
Docket: T-1559-98
BETWEEN:
KABUSHIKI KAISHA HATTORI SEIKO TRADING
AS SEIKO CORPORATION
Applicant
- and -
IMPENCO LTD.
Respondent
REASONS FOR ORDER AND ORDER
CAMPBELL J.:
[1] The Applicant sells watches in association with the trade-mark SEIKO through a worldwide network of authorized wholesalers. The wholesalers sell the watches to retailers who, in turn, sell them to consumers. The watches are sold in watch boxes that are manufactured by various suppliers to the Applicant"s specifications, or those of its authorized wholesalers. The watch boxes bear the Applicant"s trade-mark SEIKO.1
[2] The essential question to be answered in this appeal is whether the Trade-marks Opposition Board (the "Board") acting on behalf of the Registrar of Trade-marks went wrong in evaluating evidence respecting the Applicant"s application to extend the statement of wares in its trade-mark registration No. 122,687 for the trade-mark SEIKO, to cover "watch boxes".
[3] Because of the opposition of the Respondent to the application before the Board, in order for the application to be accepted, the Board was required to make a finding that there had been continuous use of the trade-mark SEIKO with respect to watch boxes in the normal course of trade since the date claimed.2
[4] In order for the required finding to be made, it was necessary for the Applicant to prove as a matter of mixed fact and law that a watch box is a ware independent from the watches it contains. The Board refused to make this finding and, in so doing, said the following:
| The applicant asserts that it has sold not only SEIKO watches since the 1970's but also SEIKO watch boxes since the watch box is part of the product being sold. The applicant contends that the SEIKO watch and the SEIKO box are two separate goods sold as a single unit. I disagree. At page 77 of the Herzog transcript, Mr. Herzog [the President of the Respondent] provides a more accurate description of the nature of the transaction involved as follows: |
| ... consumers doesn"t [sic] buy boxes. Consumers buy a watch, and the watch was a Seiko watch, and it was packed in a box. My boxes are not for sale. In other words, if you put boxes in a display, nobody would buy it. |
| The applicant is selling watches and the watch box is simply the packaging for the watch. As stated by Mr. Cutler [Senior Vice President of Seiko Canada] at paragraph 32 of his affidavit: |
| The cost of either having the SEIKO watchboxes manufactured in Canada, or imported [sic] them from outside Canada, has always been factored into the overall cost of the SEIKO watch and its final price. |
| The above statement is tacit admission that the product being sold under the trade-mark SEIKO is a watch and the watch box is simply the packaging for the product. As submitted by the opponent"s agent at the oral hearing, the applicant"s box bearing the trade-mark SEIKO serves to distinguish the applicant"s watches from those of others. |
| Much of the applicant"s evidence is directed to showing that consumers value the box in which the applicant"s SEIKO watch is sold. However, the fact does not support a conclusion that there has been use of the mark for watch boxes. The fact that consumers may like certain packaging does not change its essential nature. For example, CROWN ROYAL whiskey may be sold in a fancy, distinctive bottle that consumers find attractive. Consumers may even keep the bottles once they are empty. But the product they are purchasing is whiskey, not bottles. [emphasis added] |
[5] The above passage from the Board"s decision demonstrates that, in addition to the Applicant"s direct statement of its marketing intention, two opinions were at work in the conclusion reached by the Board: the Respondent"s and the Board"s.
[6] I find that the statement of the Applicant"s marketing intention to sell two separate goods at a single price does not amount to a "tacit admission" of anything. I also find that the opinion stated by Mr. Herzog lacks weight since it can be fairly stated to be merely his own as an interested party who manufactures, but does not retail, watch boxes. Neither of these pieces of evidence provides independent proof for what is really important: what does the consumer really believe he or she is buying; a watch in a box which comprises packaging only, or a watch in a box which comprises a separate ware?
[7] In refusing to make the required finding, the Board put weight on its own opinion. In my view, the Board"s own opinion that consumers are in effect purchasing "whiskey, not bottles" when they purchase watches, not watch boxes, is speculation unless it can be shown to be widely shared in the reality of the marketplace. Indeed, on the new evidence presented during the present appeal, I find that this is where the Board went wrong.3
[8] The new evidence supplied in the present appeal is an independent professional opinion which establishes to my satisfaction that consumers do purchase a watch box as a separate ware. In what the Applicant describes as a "technical approach" to evaluating the market place, Dr. Ruth Corbin, whom I find is an expert on the retail marketplace in Canada and consumer perceptions of products for sale in that marketplace4, concludes as follows:
| ...Retail wares across many product sectors, including watches, may be sold in durable containers. The value perceived by a purchaser in a core product is likely enhanced by the container it is sold in. The container is not necessarily intended by the seller as, or perceived by the buyer as, part of the packaging. In fact, it may be perceived as a ware in its own right. The characteristics of certain SEIKO watch boxes I have seen are consistent with containers for other retail products, where the containers are positioned as wares with their own distinct value. [Dr. Corbin"s Affidavit, paragraph 16] |
[9] I find that Dr. Corbin"s opinion, which is substantiated by detailed analysis, is cogent, consistent and persuasive, and is, therefore, one deserving substantial weight.
ORDER
[10] Accordingly, on the basis of Dr. Corbin"s opinion, I grant this appeal.
[11] Since the Respondent filed an appearance to the Applicant"s appeal, and even though the Respondent did not file a record or make a personal appearance at the hearing of this appeal, I find that the Applicant is entitled to the costs of this appeal against the Respondent. I further find that the Applicant"s assessment of usual costs, exclusive of the cost of obtaining Dr. Corbin"s expert opinion, is most reasonable, and, accordingly, I hereby award costs to the Applicant in the sum of $5,000.
"Douglas R. Campbell"
Judge
Toronto, Ontario
November 3, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: KABUSHIKI KAISHA HATTORI SEIKO TRADING AS SEIKO CORPORATION |
Applicant
Respondent
| DATE OF HEARING: MONDAY, NOVEMBER 1, 1999 |
| PLACE OF HEARING: TORONTO, ONTARIO |
REASONS FOR ORDER
| AND ORDER BY: CAMPBELL J. |
DATED: TUESDAY, NOVEMBER 2, 1999
| APPEARANCES: Mr. David A. Aylen |
SOLICITORS OF RECORD: Gowling, Strathy & Henderson
| P.O. Box 438, Stn. Commerce Crt. |
FEDERAL COURT OF CANADA
Date: 19991103
Docket: T-1559-98
Between:
| KABUSHIKI KAISHA HATTORI SEIKO TRADING AS SEIKO CORPORATION |
Applicant
Respondent
REASONS FOR ORDER
__________________
1 Trade-marks Opposition Board Decision, page 3.
2 This requirement is established by a combination s. 30(b) and s. 4(1) of the Trade-marks Act R.S.C. 1985, c. T-13, which read as follows:
s. 30 An applicant for the registration of a trade-mark shall file with the Registrar an application containing ...
(b) in the case of a trade-mark that has been used in Canada, the date from which the applicant or his named predecessors in title, if any, have so used the trade-mark in association with each of the general classes of wares or services described in the application;
s. 4(1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
3 The question for determination is whether, in light of the new evidence filed on appeal, the Registrar came to the wrong conclusion. It is well established on the authorities of Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp. (1968), 57 C.P.R.1 (S.C.C.), and Kellogg Salada Canada Inc. v. Maximum Nutrition Ltd. 43 C.P.R. (3d) 349 at 353 (F.C.A.), as I have previously found in the case of GSW Inc. v. The Registrar of Trade-marks and Sta-Rite Industries, Inc. (June 29, 1999, T-1652-98, F.C.T.D.) that wide latitude is given to the judge hearing an appeal. Obviously an error in law or fact in a Board"s decision will justify granting an appeal. In addition, it might very well be that evidence admitted on appeal in addition to that adduced before the Board, will require a different result.
4 The Applicant"s Statement of Fact and Law at page 12 provides the following details of Dr. Corbin"s qualifications:
"Ruth Corbin is the President and C.E.O. of Decision Resources Inc., a marketing science company. Her education includes a Bachelor of Science degree in Mathematics, and M.Sc. and Ph.D. degrees in Psychology. Her Ph.D. thesis was directed to consumer decision-making, based upon mathematical models of how people attach value to different choice options. She is a Professor of Marketing at the University of Toronto, a position she has held since 1982. She was previously the Chief Operating Officer of the Angus Reid Group, one of the country"s largest survey research firms. Her experience includes participation in the conduct of a major study on consumer perceptions of retail product and pricing options, which was tendered before federal regulatory bodies, including the Federal Competition Bureau. In addition, she incidently worked directly with her father, the President of Mondaine Watch Company of Canada, the owner of certain trade-marks for watches and watch boxes in Canada. In that capacity she gained additional experience with respect to the jewellery trade, particularly that pertaining to watches in Canada."
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