Gesco Industries Inc. v. Sim & Mcburney, docket T-2770-96

T-2770-96

BETWEEN:

GESCO INDUSTRIES INC.

Appellant

- and -

SIM & McBURNEY and THE REGISTRAR OF TRADE-MARKS

Respondents

REASONS FOR ORDER

WETSTON J.:

     This is an appeal by Gesco Industries Inc. (Gesco), pursuant to section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13. The appellant requests an order setting aside the decision of the Registrar of Trade-marks under s. 45 of the Act. The Registrar expunged registration No. 368,209: for the trade-mark "STAINSHIELD" for use in association with the services of stain resistant treatment for application to carpets and rugs.

     The Registrar determined that the appellant had failed to submit any evidence of use of the trade-mark in Canada. While Gesco had demonstrated its use of the trade-mark, the Registrar determined it was not in association with the provision of services to the public, as contained in the trade-mark registration. Instead, the Registrar found that the trade-mark was being used in association with wares, namely: carpets and rugs distributed by the appellant. As such, the appellant had failed to demonstrate that the trade mark had been used in Canada during the relevant time.

     It is contended that the Registrar exceeded her jurisdiction, under s. 45, by finding that the use of the trade-mark was in association with wares, rather than services, as opposed to simply determining whether there was "some evidence of use" of the trade-mark in Canada by the appellant.

     It is submitted by Gesco that section 45 allows the Registrar to determine only whether there is some evidence that the trade-mark was "in use" in Canada, by the appellant, within the previous three years. In other words, it is submitted that this is consistent with the purpose of s. 45 which is to remove "deadwood" from the registry, not to determine the validity of the trade-mark itself.

     The respondent submits that the appellant bears a heavy onus, under s. 45, to demonstrate that the trade-mark is in use in association with each of the services or wares stipulated in the registration, and that the appellant failed to provide the Registrar with any evidence of its use of the trade-mark in association with "the services of stain resistant treatment for application to carpets and rugs." Therefore, the Registrar was justified in exercising her authority under s. 45 to expunge the appellant's trade-mark from the registry.

     Section 56 of the Act provides that an appeal lies to the Federal Court from any decision of the Registrar. Subsection 56(5) provides that "evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar." Given the nature of the specialized functions of the Registrar (Saks & Co. v. Canada (Registrar of Trade Marks) (1989), 24 C.P.R. (3d) 49 at 51-52 (F.C.T.D.); Choice Hotels International Inc. v. Hotels Confortel Inc. (1996), 67 C.P.R. (3d) 340 (F.C.T.D.)), the Court is justified in intervening if the appellant demonstrates that the Registrar erred in law or in the assessment of the facts in the case: McDonald's Corp. v. Silcorp. Ltd. (1992), 41 C.P.R. (3d) 67; 54 F.T.R. 80n (C.A.); Choice Hotels, supra, at 344. Furthermore, s. 56(5) of the Act provides the registered owner with a second opportunity to demonstrate its use of the mark, thus allowing it to bolster the deficiencies in the evidence furnished to the Registrar: Keepsake Inc. v. Prestons Ltd. (1983), 2 F.C. 489 at 498-499 (T.D.).

     The appellant has led additional evidence, under s. 56(5), to bolster its claim that it has used the trade-mark in association with the service of application of a stain-resistant treatment to carpets and rugs, and not in association with the carpets and rugs themselves. This additional evidence consists of an affidavit and certified copies of a recent trade-mark application and registrations for other marks. I have considered the affidavit evidence, but have excluded the certified copies from the record because they were not filed in accordance with Rule 704 of the Federal Court Rules.

     The additional evidence demonstrates some use and is sufficient to support this appeal being heard de novo.

     The relevant provisions of section 45 read as follows:

...

     The traditional approach to s. 45 was outlined by Jacket P. in Broderick & Bascom Co. v. Registrar of Trade Marks (1970), 62 C.P.R. 268 (Ex. Ct.), wherein he stated:

     More recently, in Meredith & Finlayson v. Canada (Registrar of Trade Marks) (1991), 40 C.P.R. (3d) 409 at 412 (F.C.A.), the Court of Appeal stated:

     The object of the procedure provided under s. 45 is to clear the register of entries of trade marks which are not bona fide claimed by their owners as active trade marks: Plough (Canada) Ltd. v. Aerosol Fillers Inc. (1980), 53 C.P.R. (2d) 62 at 65 (F.C.A.). It is not to be used by opposing parties to resolve difficult questions of fact and law concerning conflicting commercial claims to the use of a trade-mark: Moosehead Breweries Ltd. v. Molson Cos. Ltd. et al. (1985) 11 C.P.R. (3d) 208 at 211 (F.C.A.); Effem Foods Ltd. v. Sears Canada Inc. (1987), 16 C.P.R. (3d) 23 at 24 (F.C.T.D.); Value Village Markets (1990) Ltd. v. Canada (Reg. T.M.) (1995), 60 C.P.R. (3d) 502 at 509 (F.C.T.D.); International Board of Standards and Practices for Certified Financial Planners Inc. v. Canadian Institute of Financial Planning (91993), 48 C.P.R. (3d) 134 at 148 (F.C.T.D.).

     The respondent has argued that the onus on the registrant to demonstrate use in Canada during the relevant time is high. I cannot agree: Value Village, supra, at 509. The Registrar need only consider whether the appellant has provided some evidence of use of its trademark during the relevant time: Central Transport, Inc. v. Mantha & Associes/Associates (1995), 64 C.P.R. (3d) 354 (F.C.A.); Plough, supra. As such, evidence filed with the Registrar must establish facts "from which a conclusion of 'use' or 'use in the normal course of trade' would follow as a logical inference from the facts established": Keepsake, supra at 497.

     In a nutshell, section 45 is designed to compel the registered owner to demonstrate that it has a substantial and continuing interest in the trade-mark through provision of some evidence of use: Keepsake, supra. The evidence furnished by the appellant in this case clearly demonstrates that it had an interest in using the mark in Canada, over the relevant period. By going beyond determination of the question of whether the appellant had provided some evidence of its use of the trade-mark, "STAINSHIELD", the Registrar exceeded her jurisdiction under section 45 thereby committing an error in law.

     The appellant provided evidence indicating that it had employed the trademark extensively in conjunction with its advertising campaigns during the relevant period. Under s. 4(2) of the Act, a trade-mark is deemed used in association with services if it is used or displayed in the performance or advertising of such services: Goodman & Carr v. Royal LePage Real Estate Services (1988), 20 C.P.R. (3d) 459 at 461 (Reg. T.M.). Therefore, the evidence submitted by the appellant satisfies the requirement of "some evidence of use" stipulated under s. 45.

     Having accepted the appellant's evidence that some use of the trade-mark had occurred, the Registrar should not have gone on to consider whether the use described was in association with the service of applying stain resistant treatment to carpets and rugs, rather than in association with carpets and rugs as wares. In doing so, the Registrar entered into consideration of the validity of the mark, and the appellant's rights in it, as described in the registry, which is beyond the scope of s. 45: Rogers, supra, at 263-265; Roebuck et al v. Canada (Reg. T.M.) (1987), 13 C.I.P.R. 75 at 80 (F.C.T.D.); Effem Foods Ltd. v. Sears Canada Inc. (1987), 16 C.P.R. (3d) 23 at 24 (F.C.T.D.). Such an inquiry is to be undertaken pursuant to s. 57(1) of the Act, which provides the Court with exclusive original jurisdiction to order that any entry in the register be struck out or amended on the ground that the entry as it appears on the register does not accurately express or define the existing rights of the owner of a trade-mark.

     The respondent submits, in the alternative, that because the trade-mark is not in use by the appellant, as registered user, it should be expunged. He contends that the evidence demonstrates that the trade-mark is in use by an entity other than the appellant, namely: Richmond Carpets. This argument was not presented to the Registrar, but can be entertained by this Court sitting de novo on this appeal: Plough, supra. The evidence submitted is sufficient to demonstrate that the appellant, as the registered owner, uses its trade-marks, including "Richmond" and "Vantage" and "STAINSHIELD" in its business of selling carpets and rugs.

     Accordingly, the appeal is allowed. The trademark "STAINSHIELD", No. 368,209, shall be re-entered in the register. The appellant shall have its costs.

                         Howard I. Wetston

                             Judge

Ottawa, Ontario

October 30, 1997