Alibi Roadhouse Inc. v. Grandma Lee'S International Holdings Ltd., docket T-245-96

     T-245-96

BETWEEN:

     ALIBI ROADHOUSE INC.

     Applicant

     - and -

     GRANDMA LEE'S INTERNATIONAL HOLDINGS LIMITED

     Respondent

     REASONS FOR ORDER

TEITELBAUM, J:

     These proceedings were commenced by the filing of an Originating Notice of Motion dated January 30, 1996, wherein the applicant, Alibi Roadhouse Inc. "being a person interested in respect of trademark registration No. 446,742", for an Order of the Court "that the entry on the Register of Trademarks, being Registration No. 446,742 dated August 25, 1995 in the name of Grandma Lee's International Holdings Limited be struck".

     The applicant claims that the respondent's trade-mark is not distinctive, that the respondent was not entitled to register the trade-mark and that the applicant's trade-mark should have been given priority to be registered.

FACTS

     The applicant owns a restaurant and bar situated in London, Ontario. The bar has been operating under the name "Alibi Roadhouse" since at least as early as October 1988. The word "Alibi" has been displayed on restaurant and bar menus and signs since that date. On January 27, 1995, the applicant applied to register the word "Alibi" as a trade-mark in respect of restaurant and bar services. The application stated that the trade-mark had been used in association with the operation of the restaurant and bar since at least as early as October 1988. On May 19, 1995, the Trade-marks Office Examiner refused the applicant's trade-mark on the ground that it was confusing with the respondent's pending trade-mark application.

     On August 3, 1994, the respondent applied for trade-mark registration of a drawing containing the words "Alibi BAR & GRILL" in a diamond design with the words "BAR" and "GRILL" disclaimed. The application stated that the trade-mark had been used in association with restaurant and bar services since January 28, 1994. The respondent's trade-mark was eventually registered (Registration No. 446,742) on August 25, 1995.

     On January 30, 1996, the applicant commenced proceedings by way of an Originating Notice of Motion to strike the respondent's trade-mark from the Register. In essence, the applicant provided the following three grounds in support of its motion:

1)      The respondent was not entitled to secure the registration because, on the date that the respondent filed its trade-mark application, it was confusing with the applicant's trade-mark which had been previously used in Canada.

    

2)      The respondent's trade-mark at the time of commencement of these proceedings did not distinguish the respondent's services in association with which it is used by the respondent from those of the applicant nor is it adapted so to distinguish them.

3)      The Examiner was in error in deciding that the respondent's application was entitled to registration on a priority basis. Reference 306 of the Trade-marks Examination Manual states that, when the Examiner finds that an application for trade-mark is found to be confusing with the trade-mark being examined, the applicant entitled to registration is the applicant who has the earliest date of first use in Canada as named in the application (when the basis of filing is use in Canada). Since the date of first use cited in the respondent's application is subsequent to the date of first use cited in the respondent's application, the respondent's trade-mark should not have been given priority to register.

     This third ground was abandoned by the applicant at the hearing before me.

THE APPLICABLE LAW

     Section 18(1) of the Trade-marks Act, R.S.C. 1985, c.T-13, as am., sets out the grounds under which one can expunge a registered trade-mark from the Trade-marks Register for invalidity:

18. (1) When registration invalid. -- The registration of a trade-mark is invalid if

(a) the trade-mark was not registrable at the date of registration,

(b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced, or

(c) the trade-mark has been abandoned,

and subject to section 17, it is invalid if the applicant for registration was not the person entitled to secure the registration.

ISSUES

A. The Applicant Was Not Entitled To Register The Trade-Mark

     The final phrase in s. 18(1) provides that a trade-mark can be held to be invalid if the applicant for registration was not entitled to secure its registration. However, the application to expunge the registration must first satisfy the requirements of section 17.

     Section 17(1) provides as follows:

17. (1) Effect of registration in relation to previous use, etc. --

No application for registration of a trade-mark that has been advertised in accordance with section 37 shall be refused and no registration of a trade-mark shall be expunged or amended or held invalid on the ground of any previous use or making known of a confusing trade-mark or trade-name by a person other than the applicant for that registration or his predecessor in title, except at the instance of that other person or his successor in title, and the burden lies on that other person or his successor in title to establish that he had not abandoned the confusing trade-mark or trade-name at the date of advertisement of the applicant's application.

     Therefore, the applicant must establish that it had not abandoned its trade-mark as of the date of advertisement of the respondent's application for registration. If that has been shown, then the applicant must also prove that the respondent violated s. 16(1):

         16. (1) Registration of marks used or made known in Canada. --

Any applicant who has filed an application in accordance with section 30 for registration of a trade-mark that is registrable and that he or his predecessor in title has used in Canada or made known in Canada in association with wares or services is entitled, subject to section 38, to secure its registration in respect of those wares or services, unless at the date on which he or his predecessor in title first so used it or made it known it was confusing with

(a) a trade-mark that had been previously used in Canada or made known in Canada by any other person;

(b) a trade-mark in respect of which an application for registration had been previously filed in Canada by any other person; or

(c) a trade-name that had been previously used in Canada by any other person.

     When one alleges that a trade-mark is "confusing", one must consider the definition of "confusing" in section 2:

         2. Definitions. -- In this Act,

"confusing". -- "confusing" when applied as an adjective to a trade-mark or trade-name, means a trade-mark or trade-name the use of which would cause confusion in the manner and circumstances described in section 6;

     This leads one to section 6:

6. (1) When mark or name confusing. -- For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.

(2) Idem. -- The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.

(5). What to be considered. -- In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including

(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;

(b) the length of time the trade-marks or trade-names have been in use;

(c) the nature of the wares, services or business;

(d) the nature of the trade;

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

     Therefore, the applicant must prove that: 1) it did not abandon its trade-mark as of the date of advertisement of the respondent's application for registration; 2) at the date on which the respondent first used the trade-mark it was confusing with a trade-mark previously used in Canada by the applicant. Confusion will be found to exist if the use of both trade-marks in the same area would be likely to lead to the inference that the services associated with those trade-marks are sold, leased, hired or performed by the same person, whether or not the services are of the same general class. The factors to consider when determining the presence of confusion are set out in section 6(5) although they do not exhaust the possible relevant circumstances.

B. Respondent's Trade-mark Was Not Distinctive At The Commencement Of Proceedings

     As s. 18(1)(b) indicates, the question of distinctiveness is determined as of the date that the proceedings bringing the validity of the registration into question are commenced. The definition of "distinctive" is provided in section 2:

2. Definitions. -- In this Act,

"distinctive". -- "distinctive" in relation to a trade-mark, means 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.

     Thus, there are three elements to distinctiveness: 1) the mark and the services must be associated, (2) the owner of the mark uses this association and is selling the services, and (3) this association enables the owner to distinguish its services from the services of others (see Philip Morris Inc. v. Imperial Tobacco Ltd. (1985), 7 C.P.R. (3d) 254 (F.C.T.D.)).

     The determination of whether a trade-mark satisfies those three elements is a question of fact to be determined by looking at all the circumstances. Denault J. suggests that:

"... the court should always begin its analysis with an examination of the specific wording used in the challenged registration. It should determine whether the owner of the mark and/or any other person was using the trademark in association with the wares or services outlined in the registration, at the material time. Only when it has completed this analysis will the court be in a position to determine whether the trade mark actually distinguishes the wares or services of its owner from those of other producers or suppliers or such goods or such services."

     (Steinberg Inc. v. J.L. Duval Ltée, [1993] 1 F.C. 145 (F.C.T.D.)).

     When performing this analysis, it is not proper to dissect the trade-mark and examine its component parts (Labatt Brewing Co. v. Molson Breweries, A Partnership (1992), 42 C.P.R. (3d) 481 at 494 (F.C.T.D.), Dubé J. citing H.G. Fox, The Canadian Law of Trade-Marks and Unfair Competition, 3rd ed. (Toronto: Carswell, 1972) at 27).

     The Supreme Court of Canada has stated that the trade-mark must be distinctive to all probable users of the service which includes the ultimate consumer (Parke, Davis & Co. v. Empire Laboratories Ltd. (1963), 41 C.P.R. 121 at 145 (Ex. Ct.), aff'd 43 C.P.R. 1 (S.C.C.)) In Magder v. Breck's Sporting Goods Co., [1973] F.C. 360 (F.C.A.), Jackett C.J. considered that "the question is one of fact as to what message the trade mark `actually' conveys to the public" This was echoed by Strayer J. in Royal Doulton Tableware Ltd. v. Cassidy's Ltd., [1986] 1 F.C. 357 (F.C.T.D.) where he wrote: "[i]n the final analysis the critical factor ... is the message given to the public" (at 371).

     The following are the trade-marks in issue:

     The word trade-mark applied for by the applicant on January 26, 1995 is the word "Alibi" (see Exhibit A to the affidavit of Daniel Wayne Johnson) found at Tab 2 of Record.

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SUBMISSIONS

1.      Applicant's Submissions

     The applicant claims that the respondent's trade-mark does not distinguish the services of the respondent from the services of the applicant nor is it adapted to distinguish them. The applicant does not provide any argument why the respondent's trade-mark is not distinctive other than this bald assertion.

     The applicant's second ground of invalidity states that the respondent was not entitled to secure the registration because, on the date that the respondent filed its trade-mark application, it was confusing with the applicant's trade-mark which had been previously used in Canada. This is an incorrect reading of the statute. As was shown above, one must satisfy section 16 (via the final phrase in s. 18) in order to be entitled to registration. That section clearly states that the presence of confusion with a trade-mark previously used in Canada is determined as of the date on which the applicant for registration first used the trade-mark. Whether or not the respondent's trade-mark was confusing with the applicant's trade-mark at the date that the respondent filed the trade-mark application is irrelevant.

     In the applicant's favour, the applicant does provide copies of menus and pictures of the applicant's Alibi restaurant and bar to support the contention that the applicant had not abandoned its trade-mark at the date of advertisement of the respondent's application (pursuant to s. 17). As was noted above, proof that the applicant did not abandon its trade-mark at the date of advertisement of the respondent's application is necessary for a successful claim of invalidity under the final phrase in section 18.

    

     The majority of the affidavits and other documents are geared towards disputing the respondent's claimed use of the registered trade-mark at the Herongate Mall in Ottawa. The applicant offered evidence to suggest that the respondent had not been operating a bar called the "Alibi" in 1986. The applicant presented an excerpt from the June 1995 TSE (Toronto Stock Exchange) Review which says that the respondent had been testing a combined Grandma Lee's/Alibi concept at the Herongate Mall "for the past year". Furthermore, a review of Ottawa/Hull phone directories demonstrated that the respondent's Alibi Bar & Grill did not appear in the phone directory until 1995.

     The applicant further alleged that the trade-mark that the respondent used in 1986 was not the same trade-mark as the one which is registered. The applicant referred to the respondent's old menu which displayed the words "Grandma Lee's Alibi Dining Lounge" along with the image of a football player and the words "Watch TSN network here!" The word "Alibi" is depicted in bold letters with a bold underline beneath it. The applicant claims that since the registered trade-mark was not used in 1986, the respondent cannot claim prior use of that mark.

2.      Respondent's Submissions

     The respondent's submissions focussed on the applicant's allegations concerning the existence of the respondent's "Alibi" bar in 1986 and the alleged non-use of the registered trade-mark prior to registration.

     The respondent contends that, through a franchisee, it has used the trade-mark "Alibi" for a bar at the Herongate Mall in Ottawa since 1986. The respondent presented an affidavit from Allan R. Biggs, the Chairman and CEO of Grandma Lee's, which states that the respondent owned the restaurant and bar at the Herongate Mall in 1981. The bar was renamed the "Alibi" bar in 1986. Mr. Biggs declares that the restaurant and bar are now owned by a franchisee with a license to use the trade-mark. The respondent also draws support from an affidavit by Ann Chartrand, the bar manager at the Alibi bar, who states that Grandma Lee's restaurant and the Alibi bar have been located together since 1986 and that there have been signs since that date displaying the Alibi mark. Finally, an affidavit from Judy Purcell, the mall manager at the Herongate Mall, states that the mall's records indicate the presence of the Alibi bar in 1986.

     To rebut the applicant's evidence that the respondent's Alibi bar was not listed in the phone directory until 1995, the respondent states that the same phone line has been used by Alibi and Grandma Lee's since 1986. The respondent also claims that incoming calls are answered "Grandma Lee's/Alibi" or variations of those words.

     The respondent did not refute the applicant's claim that the respondent had not been using the exact form of the registered Alibi trade-mark in 1986. In fact, the respondent presented a menu and a photograph of the mirror at the bar which depict the old "Alibi" mark. Ms. Chartrand's affidavit of October 30, 1996, indicates that the old mark on the mirror was used until August 1996 before it was replaced during renovations with, presumably, the new Alibi trade-mark. The respondent never provided any evidence, other than the assertion in the application for trade-mark registration, to indicate when the registered Alibi trade-mark design was first used.

     However, the respondent contended that the old "Alibi" mark had been used since 1986 and that this constituted use of the registered form of the mark because the variations between the two marks were not substantial.

DISCUSSION

A. The Applicant Was Not Entitled To Register The Trade-Mark

     As was noted, the question of whether to invalidate a trade-mark because it was confusing with another trade-mark previously used in Canada by another person is determined as of the date on which the applicant for registration first used the trade-mark. I will consider the issue of confusion as of this date and not the date that the respondent filed for registration of its trade-mark.

     This leaves the following question: when did the respondent first use its trade-mark? The applicant submits that the respondent used two different marks. The old mark was used in 1986 up until at least August 1996. According to the respondent's application for registration, it had used the now registered trade-mark since January 28, 1994. Of course, the respondent did not have to state the earliest date of use in its application (Marineland Inc v. Marine Wonderland and Animal Park Ltd., [1974] 2 F.C. 558 (F.C.T.D.)) but there is no other evidence of an earlier date. It is difficult to tell when the registered trade-mark was first displayed on the bar mirror although the evidence suggests that the change was made in August 1996 after the renovations. Therefore, I am satisfied it is reasonable to conclude that the trade-mark, as registered, was first used in January 28, 1994.

     However, one must also consider the argument that the two marks are only slightly different and therefore the registered trade-mark was actually "used" in 1986. In Promafil Canada Ltée v. Munsingwear Inc. (1992), 44 C.P.R. (3d) 59 (F.C.A.), the court considered whether a registered trade-mark which was used in a modified form constituted use. The court held that if the same dominant features are used with minor differences which would not confuse or deceive an unaware purchaser, then the registered mark is still being used. The court was concerned with whether the "continuing commercial impression remain[ed] the same."

     The decision in Playboy Enterprises Inc. v. Germain (1978), 39 C.P.R. (2d) 32 (F.C.T.D.) [hereinafter Playboy] is even more relevant since the court dealt with a mark used prior to registration which varied from the mark set out in the application. In Playboy, an opposition proceeding was commenced against the respondent barber by the applicant Playboy Enterprises. Among other grounds, the applicant argued that the mark as used by the respondent deviated from the mark which the barber intended to register. The respondent wished to register the trade mark "PLAYBOY MEN'S HAIR STYLIST" but the word "men's" was missing on the business card. In addition, on the large sign over the front of the premises "styling" was used instead of "stylist", and on the window sign, the word "stylist" was pluralized. Marceau J. held that the difference was not substantial enough to lead to the conclusion that the mark was not "used" within the meaning of s. 4. Marceau J. cited the following passage from J.H. Munro Ltd. v. T. Eaton Co. Western Ltd. et al. (1942), 2 C.P.R. 229 (B.C.S.C.) [hereinafter Munro] at 240:

The question of whether or not the use of a label deviating from the specific label is such a deviation as would constitute a non-user of a specific trade mark appears to be one of fact as relating to each particular case, the principle on which such facts shall be applied being as laid down by Maclean J. in the Honey Dew Case, viz., that the deviation shall not be such as to cause an injury or deception to anyone.

     Marceau J. concluded that these deviations did not affect the main feature of the mark and they did not confuse or deceive the public.

     The applicant and the respondent cite several other cases decided under s. 45 of the Trade-mark Act which state essentially the same principle (see Doumak Inc. v. Fireside Snacks of Canada Ltd. (1994), 59 C.P.R. (3d) 107 (Hear. Off.), Registrar of Trade Marks v. Compagnie Internationale Pour L'Informatique CII Honeywell Bull, S.A., [1985] 1 F.C. 406 (F.C.A.), Saccone & Speed Ltd. v. Registrar of Trade Marks (1982), [1984] 1 F.C. 390 (F.C.T.D.), Ladner Downs v. Joey's Only Restaurant Ltd. (1993), 52 C.P.R. (3d) 570 (Hear. Off.)). The respondent also cites the Trade-mark opposition proceeding in Cluett, Peabody Canada Inc. v. Steven Gellis Sports Inc. (1994), 59 C.P.R. (3d) 287 (Hear. Off.) which arrived at the same conclusion. These cases are also illustrative of when a deviation has amounted to non-use of a trade-mark, but of course the final determination in each case is a question of fact.

     However, the applicant cites Beiersdorf AG v. Becton, Dickinson & Co. (1992), 44 C.P.R. (3d) 151 (Hear. Off.) for the proposition that each of the elements of a trade-mark are prominent features and must be present in order to find use. This is not a correct reading of this case. A clear reading of the whole case demonstrates that the hearing officer was speaking of the trade-mark in issue in that case and not all trade-marks. The question of whether all the elements of a particular trade-mark are prominent and must be present to permit a finding of use is a question of fact to be determined on a case-by-case basis.

     One preliminary issue remains before considering the impact of the cited authorities on the case at bar. I must reject the applicant's contention that the respondent's old mark incorporated the depiction of the football player. The football player is clearly meant to advertise the fact that the respondent's bar will show sports events on The Sports Network [TSN]. Given that the football player is not displayed on the second page of the menu, it is clear that the image is not part of the mark. I also note that the image of the football player is absent from the bar mirror displayed in Ms. Chartrand's affidavit. Similarly, I do not believe that the words "Grandma Lee's" and "Dining Lounge" in smaller letters and different fonts are part of a combined "Alibi" mark. As counsel for the respondent pointed out, the use of two different trade-marks is an acceptable practice (see A.W. Allen Ltd. v. Warner Lambert Canada Inc.(1985), 6 C.P.R. (3d) 270 (F.C.T.D.)). Therefore, I find that the actual mark used by the Alibi bar in 1986 was the word "Alibi" in large type with a bold underline.

     Turning to the registered trade-mark, I note that the designs of the old and new marks are different. The registered trade-mark is predominantly diamond-shaped with the words "Alibi" dominating the upper two-thirds of the design. The words "Bar & Grill" are located in an oval-shaped figure beneath the word "Alibi". This design is different than the respondent's old mark mentioned above.

     Despite these differences, I believe that the dominant element in both marks is the word "Alibi". That word is clearly the dominant feature of the old mark since the only accompanying feature of that mark is the bold underline. In the registered mark, "Alibi" dominates the centre of the design. Furthermore, the words "Bar" and "Grill" have been disclaimed and they are an insignificant feature of the mark. The existence of the other design features or ornamentations may make the registered trade-mark more attractive but I do not find that they are dominant features of the mark. I cannot see how these deviations would cause injury or deception to the public or that they affected the "commercial impression."

     Given my finding that the respondent has used the registered trade-mark, or a similar variant thereof, since 1986, I must consider whether this mark was confusing with any other trade-mark previously used in Canada as of 1986.

     The applicant has submitted that the applicant's trade-mark was used as early as October 1988. This date is after the respondent's first use of the trade-mark. The applicant has not provided evidence of any other marks which were used in 1986 which may be confusing with the respondent's trade-mark.

     Therefore, I find that the respondent was entitled to register the "Alibi" trade-mark.

B. The Respondent's Trade-mark Was Not Distinctive At The Commencement Of These

Proceedings

     Since the applicant has not produced any evidence in support of this ground of invalidity, it can be summarily dismissed. In fact, the applicant would probably have great difficulty gathering evidence to dispute the distinctiveness of the respondent's trade-mark in the Ottawa area if not elsewhere. It is clear that the respondent satisfies the first two elements of the test in Philip Morris. The third element is more difficult since one must determine whether the association between the trade-mark and its services allows the respondent to distinguish its services from the services of others.

     Given that the parties' businesses are located in two specific locations in Canada, the decision in Great Lakes Hotels Limited v. The Noshery Limited, [1968] 2 Ex. C.R. 622 [hereinafter The Noshery] is important to consider. In The Noshery, the court held that the trade-mark "Penthouse" did distinguish the owner's services and wares of respondent in metropolitan Toronto though it did not distinguish the owner's services from others in the rest of Canada. The court held that the trade-mark was distinctive within the definition of s. 2(f) [now s.2].

     This case was discussed in Motel 6 Inc. v. No. 6 Motel Ltd., [1982] 1 F.C. 638 (F.C.T.D.) [hereinafter Motel 6]. In Motel 6, the court stated that "[l]ocal distinctiveness obviously is capable of being acquired and recognized at law in certain cases." The court distinguished The Noshery because the facts concerned the "travelling public" and not "local customers."

     It seems that a similar principle could apply here. The applicant's business is in London, Ontario while the respondent's business is in Ottawa, Ontario. There is no other evidence of any other businesses of the respondent or the applicant in any other locations. The applicant provides no evidence in support of its contention that the respondent's trade-mark does not distinguish its services from those of the applicant. In fact, the only evidence that bears some relationship to this issue is Ms. Chartrand's affidavit which states that many of the customers call the bar "the Alibi" (although there is no stated relationship between the trade-mark and the bar services).

     It is impossible to find that the applicant has satisfied the onus upon it to prove that the respondent's trade-mark is not distinctive (Mr. P's Mastertune Ignition Services Ltd. v. Tune Masters (1984), 82 C.P.R. (2d) 128 (F.C.T.D.)). The applicant must provide evidence to support the contention that the registered trade-mark was not distinctive of the respondent at the commencement of these proceedings. There is a total lack of any such evidence to indicate the extent of the use of the applicant's Alibi mark or its reputation in Canada. Furthermore, given that the restaurant/bars are located in two different cities in Ontario, I believe that a finding of, at least, local distinctiveness is appropriate without the presence of evidence to the contrary.

CONCLUSION

     For the reasons stated above, the application is dismissed with costs.

                             "Max M. Teitelbaum"

                        

                                 J U D G E

OTTAWA

October 10, 1997