Young Drivers of Canada Enterprises Ltd. v. Chan, docket T-636-97

Date: 19990830

Docket: T-636-97

BETWEEN:

     YOUNG DRIVERS OF CANADA ENTERPRISES LTD.

     Applicant

     - and -

     JOHN CHAN

     Respondent

     - and -

     THE REGISTRAR OF TRADE-MARKS

    

     REASONS FOR ORDER

LUTFY J.:

[1]      The applicant Young Drivers of Canada Enterprises Ltd. has appealed the decision of the Registrar of Trade-marks in which he dismissed its objection to the registration of the trade-mark of the respondent John Chan. This statutory appeal was brought under section 56 of the Trade-marks Act.¹

[2]      The decision under appeal was signed by a member of the Trade Marks Opposition Board acting on behalf of the Registrar. The decision-maker will be referred to throughout these reasons as the Registrar. The Registrar of Trade-marks did not participate in the appeal.

[3]      Early in this proceeding, counsel for the respondent advised that the appeal would be opposed but that he would not file a reply or affidavits in view of the applicant"s statement of material facts and the record of the Registrar.² Counsel for the applicant did not object to the presentation of oral submissions by respondent"s counsel at the hearing of the appeal.

[4]      No new evidence was adduced in this appeal.

[5]      Both parties operate motor vehicle driver education schools. The principal issue before the Registrar and in this proceeding is the likelihood of confusion between their marks.

THE APPLICANT"S TRADE-MARK: YD & Design

[6]      The trade-mark of Young Drivers, YD & Design, consists of two well-known traffic symbols, one placed above and set off to the left of the other. The top symbol is diamond-shaped and encloses the letter "Y". The lower symbol is a red octagon with the letter "D" in its centre. Young Drivers did not claim any colour in the registration of its trade-mark. The applicant"s mark is illustrated below:

[7]      Young Drivers first used its trade-mark in 1968. The mark was registered in 1987 in association with the following services:

Driver education, training and testing; surveying; organizing and conducting of car rallies; driver safety promotion.

THE RESPONDENT"S TRADE-MARK: JP DEFENSIVE DRIVING SCHOOL & Design

[8]      The trade-mark of the respondent John Chan is set out below:

In this application for registration, the respondent claimed the colour red as the background for the octagon with the letter "J" and the colour blue for the pentagon with the letter "P". The words "defensive", "driving" and "school" were disclaimed, apart from the trade-mark.

[9]      The respondent describes the services in association with his mark as "driving training, education and testing".

[10]      Mr. Chan first used his mark in August 1991, when he started up his driving school business. During the two previous years, he worked as an instructor with Young Drivers near Vancouver, in the same region where he operates his business. His application to register JP DEFENSIVE DRIVING SCHOOL and Design was advertised for opposition purposes in May 1992.

THE REGISTRAR"S DECISION

[11]      The Registrar"s decision of February 7, 1997 centred on the issue of confusion at the earliest material date in August 1991, the respondent"s date of first use.

[12]      The Registrar understood the legal framework for his decision. The burden of proof was on John Chan to establish that there would be no reasonable likelihood of confusion between the two marks. The test for confusion is one of first impression and imperfect recollection. The five criteria set out in subsection 6(5) of the Trade-marks Act are not exhaustive in assessing whether the two marks are confusing; other relevant factors may be considered but the weight to be given to each will vary on the circumstances.³

[13]      Because the trade-mark of Young Drivers was composed of letters of the alphabet on a design of geometric shapes familiar to motorists, the Registrar characterized it as "a relatively weak mark". However, the Registrar acknowledged that YD & Design had acquired a significant reputation in Canada as the result of the advertising and sales of the services of Young Drivers.

[14]      The Registrar noted that Young Drivers had used its mark in Canada for over two decades prior to Mr. Chan"s first use.

[15]      Mr. Chan had not limited the description of his services to any specific market niche. The Registrar determined that the parties" services and channels of trade were the same.

[16]      The Registrar"s decision allowed Mr. Chan"s application, principally on his assessment of the criteria in paragraph 6(5)(e ) of the Act:

(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

(e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent.

[17]          In the pivotal paragraphs of his reasons, the Registrar stated that the marks differed visually and orally and compared the idea suggested by each. In his words:

In my view the parties" marks bear little resemblance to each other visually, aside from the use of geometrical design features familiar to motorists. Orally the marks are quite different, as the applied for mark would likely be truncated to "jay pee" while the opponent"s mark would be sounded as "why dee." Further, the opponent"s mark often appears together with the phrase "Young Drivers Of Canada" and it is therefore not unlikely that the public has been conditioned to also associate opponent"s mark YD & Design with the idea of "young drivers." The applied for mark also suggests the idea of driver training as it is comprised in part of the phrase DEFENSIVE DRIVING SCHOOL.

In view of the above, and keeping in mind that the test of confusion is one of first impression and imperfect recollection, I am satisfied that the applicant has met the onus on it to show that the marks in issue are not confusing.

THE STANDARD OF REVIEW

[18]      The applicant relied on the statement of Justice Heald in Labatt Brewing Co. v. Molson Breweries, A Partnership:⁴

The role of the court on an appeal pursuant to s. 56 of the Act was aptly stated by Justice Strayer in McDonald's Corp. v. Silcorp Ltd. (1989), 25 F.T.R. 151; 24 C.P.R. (3d) 207 (T.D.); affd. (1992), 139 N.R. 319 (F.C.A.), at page 210 [C.P.R.]:

It seems clear that in opposition proceedings where the issue is essentially one of fact concerning confusion or distinctiveness the decision of the registrar or the Board represents a finding of fact and not the exercise of discretion. Therefore the court should not impose upon itself the same degree of restraint, in reviewing that decision, as it would if the decision were essentially an exercise of discretion. It is thus free to review the facts to determine whether the decision of the registrar or Board was correct, but that decision should not be set aside lightly considering the expertise of those who regularly make such determinations: see Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp. (1968), 57 C.P.R. 1, at p. 8; 1 D.L.R. (3d) 462, [1969] S.C.R. 192">[1969] S.C.R. 192, at pp. 199-200 (S.C.C.). While different panels of the Federal Court of Appeal have variously expressed the duty of this court on appeal to be to determine whether the registrar has "clearly erred", or whether he has simply "gone wrong", it appears that it is the duty of a judge sitting on an appeal such as this to come to his own conclusion as to the correctness of the finding of the registrar. In doing that he must, however, take into account the special experience and knowledge of the registrar or the Board, and more importantly have regard to whether new evidence has been put before him that was not before the Board. (See also Clorox Co. v. Du Pont (E.I.) Nemours and Co. et al. (1995), 103 F.T.R. 55; 64 C.P.R. (3d) 79 (T.D.).)

Accordingly, in determining this appeal I shall be guided by the principles enunciated above. That is I must come to my own conclusion as to the correctness of the Registrar's decision, however I must take into account the special experience and knowledge of the Registrar and the fact that no new evidence was adduced on this appeal that was not before the Registrar.

[19]          To better appreciate the statement of Justice Heald and the summary of Justice Strayer upon which he relies, it is useful to return to the original dicta of the Supreme Court of Canada in Benson & Hedges (Canada) Limited v. St. Regis Tobacco Corporation:

In my view the Registrar"s decision on the question of whether or not a trade mark is confusing should be given great weight and the conclusion of an official whose daily task involves the reaching of conclusions on this and kindred matters under the Act should not be set aside lightly but, as was said by Mr. Justice Thorson, then President of the Exchequer Court, in Freed and Freed Limited v. The Registrar of Trade Marks et al8 :

... reliance on the Registrar"s decision that two marks are confusingly similar must not go to the extent of relieving the judge hearing an appeal from the Registrar"s decision of the responsibility of determining the issue with due regard to the circumstances of the case.

I am accordingly of the opinion that it was open to Mr. Justice Jackett in the circumstances of this case to substitute his conclusion for that of the Registrar ...5

     _________________

8      [1950] Ex. C.R. 431 at 437, 11 Fox Pat. C. 50, 14 C.P.R. 19, [1951] 2 D.L.R. 7.

In that case, it was held that the new cigar trade-mark GOLDEN CIRCULET would cause confusion with the cigarette trade-mark GOLD BRAND, which had become very well-known over six years.

[20]      It may well be that this standard of review should be stated in different terms to take into account the recent teachings of the Supreme Court of Canada in Southam,⁶ Pushpanathan⁷ and Baker.⁸ If the issue of confusion can properly be characterized as a matter of mixed law and fact, the standard of review may be further down the spectrum from correctness. The special knowledge and expertise of the Registrar may require greater deference, where no new evidence is adduced on appeal. The determination on appeal may be closer to whether the Registrar"s decision is "clearly wrong" or "unreasonable".⁹ This issue was not addressed by the parties during oral argument although counsel did provide useful written comments after the hearing. Because the matter was not fully canvassed, I will be guided by the less deferential standard stated by Justice Heald in Labatt Brewing Co.¹⁰

ANALYSIS

[21]      The applicant"s principal argument is that the Registrar afforded "insufficient weight", in the words of counsel, to factors relevant to a proper assessment of the likelihood of confusion: (a) the significant reputation of Young Drivers" mark; (b) Mr. Chan"s employment with Young Drivers, immediately prior to the first use of his mark; and (c) the absence of evidence of any other driving school using traffic symbols in the design of their marks. For the applicant, while the Registrar may have properly identified the test of "first impression and imperfect recollection", he in fact erred in closely comparing both marks before concluding that Mr. Chan had established his mark was not confusing with the one of Young Drivers.

[22]      The similarities and the differences between the marks are obvious.

[23]      Both designs use two traffic signage symbols, similarly juxtaposed with the higher one set off to the left. Each design includes a red octagon.¹¹ The two geometric designs each enclose one capital letter in both trade-marks. The capitalized letters in both marks are similar in colour.

[24]      On the other hand, the marks, capitalized YD and JP, are composed of different letters. They are visually different. Their pronunciation results in different sounds. The octagon symbol, common to each mark, is the lower of the two traffic signs in the Young Drivers" design. The octagon is placed in the higher position in the respondent"s design. The background colours of the non-octagon symbols are different.

[25]      In his affidavit filed before the Registrar, Mr. Chan acknowledged that he was aware of the Young Drivers" logo when he designed his trade-mark. In his words: "I ... consciously tried to design my logo, using traffic sign patterns, in colours and arrangement distinctly different from [those of Young Drivers]; at the same time I used the colours commonly associated with the specific shapes of traffic signs." Mr. Chan was not cross-examined with respect to his affidavit.¹²

[26]      The applicant"s argument in support of the likelihood of confusion is the use of traffic symbols, juxtaposed in the same position, with one capital letter of the alphabet in each symbol and the same red colour as the background of the octagon. In the applicant"s view, Mr. Chan"s previous employment with Young Drivers increases his onus in establishing that the two trade-marks are not likely to be confused.

[27]      The Registrar assessed the facts in the light of the criteria in subsection 6(5) and other relevant factors. He understood that Mr. Chan was a former employee of Young Drivers and aware of its mark. However, he characterized the use of letters of the alphabet and geometrical shapes familiar to motorists as constituting a relatively weak mark, notwithstanding the significant reputation that Young Drivers" mark had acquired in Canada. The Registrar placed greater weight on what he considered to be the little resemblance, visual and oral, between the marks. In his view, this was the more important of the relevant factors.

[28]      It is argued that the common use of traffic symbols in both marks is a factor indicative of confusion because of the resemblance "in the ideas suggested by them", within the meaning of paragraph 6(5)(e ). In his classic text,¹³ Dr. Fox addresses this issue in the context of two words, common or descriptive in meaning, suggesting the same idea:

When it is contended that two words are confusing by reason of the fact that they suggest the same idea regard should be had to the nature of the words. If the words are distinctive, in the sense of being invented words, small differences will not be sufficient to distinguish them, whereas if the words are common or descriptive in meaning, they must be taken with the disadvantages. No person is entitled to fence in the common of the English language and words of a general nature cannot be appropriated over a wide area. [References omitted.]

In my view, the same principle applies to the use by a driver education school of non-inventive traffic signage. For example, the choice of an octagon sign, commonly used to indicate "stop", carries with it the disadvantage that another party may use the same symbol in its different design.

[29]      A review of the case law relied upon by the applicant has also convinced me that the Registrar"s decision ought not to be disturbed. The facts in this appeal can readily be distinguished from those in the decisions put forward by the applicant.

[30]      In Labatt Brewing Co. v. Molson Breweries, A Partnership,¹⁴ the competing marks of two beer manufacturers were COUNTRY CLUB and CLUB ALE, each of which included a different stylized clover leaf in its design. In agreeing with the Registrar"s finding, Justice Dubé noted that there was "enough resemblance" between both marks from which one could expect confusion in the consumer"s mind.

[31]      In Leaf Confections Ltd. v. Maple Leaf Gardens Ltd.,¹⁵ Justice Rouleau held that the Toronto professional hockey team"s "very well-known" trade-mark should be afforded broad protection. He confirmed the Registrar"s refusal to register the mark LEAF inserted within a stylized design of a maple leaf used by a manufacturer of bubble gum. Justice Rouleau stated: "It is sufficient if [Maple Leaf Gardens Ltd.] can establish that the use of [Leaf Confection Ltd."s] mark would likely lead to the inference that the wares associated with it and those associated with the registered mark were produced by the same person."

[32]      The applicant also sought support from two decisions of the Trade Marks Opposition Board. In the first, the opposition to registration was maintained where the applicant"s proposed mark emphasized the capital letter C, enclosed within quotations. The letter C, capitalized and with quotations, was similarly used in a mark that had been previously established by another manufacturer of carbonated soft drinks.¹⁶ In the second decision, the applicant sold jewellery with a proposed mark which included the word OMEGA with a design variation of the symbol of this letter of the alphabet in Greek.¹⁷ In this second case, the opponent was the watch manufacturer whose mark OMEGA & Design, another representation of the Greek alphabet letter, had acquired reputation in Canada through extensive sales.

[33]      The applicant further relied on two American decisions where the BLUE SHIELD and RED SHIELD marks were used by institutions marketing hospitalization insurance¹⁸ and where the BLACK & WHITE mark was used by manufacturers of Scotch whisky and beer.¹⁹ The applicant referred to these cases as examples of one person so building upon the work and reputation of another as to allow the presumption of deception and confusion.

[34]      The facts in this appeal can readily be distinguished from those in the decisions advanced by the applicant. The use of the common or identical words or letter CLUB, LEAF, "C", OMEGA, SHIELD and BLACK & WHITE are not found in the marks YD and JP. Here, the two traffic symbols, only one of which is similar, enclose letters of the alphabet which are, look and sound different. To paraphrase subsection 6(2) of the Act, it is not likely, in my view, that student drivers would infer that the services associated with YD & Design and JP & Design, even with the use of similar traffic symbols, were provided by the same person.

[35]      As stated by Justice Heald, I must come to my own conclusion concerning the correctness of the Registrar"s decision, keeping in mind his special expertise and knowledge. Upon review of the evidence, I am satisfied that it was open to the Registrar to find that these two marks, on the basis of first impression and imperfect recollection, are not likely to be confusing. I have reached the same conclusion as that of the Registrar.

[36]      Student motorists would normally choose driver education and training services after some deliberation and reflection. These are not competing goods purchased "off the shelf". It is most doubtful, in my view, that "an average person endowed with average intelligence acting with ordinary caution"²⁰ would obtain the services offered under the respondent"s mark with the erroneous view that he or she was dealing with Young Drivers. While the onus was on Mr. Chan to establish that there was no reasonable likelihood of confusion between the two marks, I have noted that no new evidence was adduced on this appeal, not even evidence of any anecdotal incidents since 1992 which might suggest the possibility of confusion.

[37]      In weighing the relevant factors, the Registrar tipped the scales in favour of his perception of the visual and oral differences in the marks over the common use of traffic symbols, in a design made by a former employee of Young Drivers. In coming to my own conclusion, I have considered the similar juxtaposition of the symbols in each mark. Both upper symbols are set off to the left. In my view, even if the Registrar"s reasons may not explicitly refer to the issue, I also place greater emphasis on the visual and oral differences in the marks over the similarity in the juxtaposition of the traffic symbols. The evidence establishes that the two trade-marks are not confusing.

[38]      The Registrar"s decision discloses no reviewable error of fact and is not inconsistent with the applicant"s case law. In the absence of new evidence, the decision under appeal is not incorrect.

[39]      In view of this determination, I need not consider the applicant"s reliance on subsection 30(i ).

[40]      Accordingly, this appeal will be dismissed. In view of the respondent"s limited participation in this appeal, there shall be no order as to costs.

     "Allan Lutfy"

     J.F.C.C.

Ottawa, Ontario

August 30, 1999

__________________

¹      R.S.C. 1985, c. T-13.

²      The filing of a reply is dealt with under subsection 59(2) of the Act and Rule 704 of the former Federal Court Rules which were in force when this appeal began. Under Rule 310 of the current rules, the respondent would be required to file a respondent"s record.

³      Applicant"s Application Record, pp. 7-8.

⁴      (1996), 113 F.T.R. 39 at 43-44. The applicant referred to Advance Magazine Publishers Inc. v. Masco Building Products Corp., [1999] F.C.J. No. 115 (QL) (T.D.), where the Associate Chief Justice adopted this statement of Justice Heald in Labatt Brewing Co.

⁵      [1969] S.C.R. 192">[1969] S.C.R. 192 at 200 per Ritchie J.

⁶      Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748.

⁷      Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982.

⁸      Baker v. Canada (Minister of Citizenship and Immigration), [1999] S.C.J. No. 39.

⁹      Southam Inc., supra note 6 at paragraph 60 and Baker, supra note 8 at paragraph 62.

¹⁰      Supra paragraph 18.

¹¹      According to the British Columbia Motor Vehicle Branch Safe Driving Guide, the octagon shape always means "stop" (Applicant"s Application Record, pp. 70 and 74, which are part of the affidavit of John Chan).

¹²      Applicant"s Application Record, pp. 70-71. Section 44 of the Trade-marks Regulations, SOR/96-195, provides that the registrar may on application order cross-examination.

¹³      Harold G. Fox, The Canadian Law of Trade Marks and Unfair Competition (Toronto: Carswell, 1972).

¹⁴      (1992), 42 C.P.R. (3d) 481 (F.C.T.D.) at 488. Of interest, Justice Dubé also noted: "The Registrar"s decision on the likelihood of confusion constitutes a finding of fact which ought not to be disturbed on appeal, unless he clearly erred". [Emphasis added.]

¹⁵      (1986), 12 C.P.R. (3d) 511 (F.C.T.D.).

¹⁶      Canada Dry Ltd. v. H. Ford Sales Ltd. (1985), 7 C.P.R. (3d) 546 (T.M.O.B.).

¹⁷      Omega S.A. v. Laye (1988), 22 C.P.R. (3d) 180 (T.M.O.B.).

¹⁸      National Association of Blue Shield Plan v. United Bankers Life Insurance Co., 362 F.2d 374 (5th Cir. 1966).

¹⁹      Fleishman Distilling Corp. v. Maier Brewing Company, 314 F.2d 149 (9th Cir. 1963).

²⁰      Canadian Schenley Distilleries Ltd. v. Canada"s Manitoba Distillery Ltd.(1975), 25 C.P.R. (2d) 1 (F.C.T.D.) at 5.