Date:
20120720
Docket:
T-463-09
Citation: 2012 FC 917
Ottawa, Ontario, July 20, 2012
PRESENT: The Honourable Madam Justice Bédard
BETWEEN:
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NATURE'S SOURCE INC.
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Applicant
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and
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NATURSOURCE INC.
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an appeal pursuant to section 56 of the Trade-marks Act, RSC 1985, c
T-13 [the Act] of a decision rendered by the Trade-marks Opposition
Board as a delegate of the Registrar of Trade‑marks (the Board), dated
January 16, 2009, wherein the Board refused, in part, the applicant’s application
to register the trade-mark Nature’s Source. The Board found that there was a
likelihood of confusion with the respondent’s own trade-mark, Natursource.
I. Background
[2]
The
applicant operates retail stores/dispensaries that specialize in the sale of
vitamins, nutritional, mineral and herbal supplements, diet and weight loss
products and fitness products. The business has been in operation since 1998
and there are five retail store locations in southern Ontario. The applicant
alleges that it also offers consulting services in nutrition and alternative
health care through its retail stores. The applicant contends that most of its
employees are professionally trained and offer free consultations to customers,
aimed at directing them towards appropriate products for their individual
circumstances.
[3]
The
applicant originally filed an application to register the trade-mark Nature’s
Source in association with certain wares and services, including retail store, franchising
and e-commerce services on April 1, 1999. The applicant amended its application
on November 29, 2006, deleting all of the wares from its application and amending
the list of services. The applicant re-amended its application on November 24,
2008, the date of the hearing. The final application expressly excluded retail
store services in relation to the wares manufactured by the opponent. The final
list of services for which the applicant sought registration is as follows:
a. Retail store services
specializing in the sale of nutritional supplements, vitamins and mineral
supplements, herbal supplements, and diet and weight loss products, and fitness
products, excluding cereals, granola cereals, granola snack food, porridge,
roasted nuts, roasted seed, dried fruit and nut mixes and cookies;
b. Heath care services,
namely nutrition consulting services, naturopathic and homeopathic consulting,
aromatherapy, chiropractic, iridology, massage, reflexology, shiatsu, and weight
loss;
c. Franchising services,
namely offering technical assistance in the establishment and/or operation of
retail shops specializing in clinical services and the sale of nutritional
supplements, vitamins and mineral supplements, herbal supplements, and diet and
weight loss products, excluding cereals, granola cereals, granola snack food,
porridge, roasted nuts, roasted seeds, dried fruit and nut mixes, and cookies;
and
d. E-Commerce services,
namely designing and operating an electronic store offering a full range of
natural health and beauty products, excluding cereals, granola cereals, granola
snack food, porridge, roasted nuts, roasted seeds, dried fruit and nut mixes,
and cookies.
[4]
The
respondent manufactures and sells healthy snack foods such as cereals, roasted
nuts, nut and fruit mixes and cookies under the trade-mark Natursource. The
respondent has been using its trade-mark in association with the wares that it
manufactures since 1980 and the respondent’s trade‑mark was registered on
April 22, 1983. The respondent’s products are distributed across Canada, the
United States and Latin America and are sold in major grocery stores such as
Sobey’s, Bourassa, Costco Whole Sale, in notable coffee shop chains such as
Starbucks and Second Cup, in major pharmacies such as Shoppers Drug Mart and
Pharmacie Jean Coutu, as well as in health food stores in the Montreal and
Toronto areas. The respondent also operates a website.
[5]
The
respondent opposed the application on several grounds but only the following
grounds revolve around the idea that there was a likelihood of confusion
between the applicant’s services and the respondent’s wares:
a.
The
trade-mark is not registrable pursuant to s.38(2)(b) and 12(1)(d) of the Act in
that it is confusing with the respondent’s trade-marks Natursource and
Multi-Nature;
b.
The
applicant is not a person entitled to the registration of the trade-mark
pursuant to s.38(2)(c) and 16(1)(c) of the Act because at the relevant date, in
so fare as services (1) and (2) are concerned, the trade-mark was confusing
with the respondent’s trade-marks;
c.
The
applicant is not a person entitled to the registration of the trade-mark
pursuant to s.38(2)(c) and 16(1)(c) of the Act because at the relevant date, in
so fare as services (3) and (4) are concerned, the trade-mark was confusing
with the respondent’s trade-marks;
d.
Pursuant
to s.38(2)(d) and s. 2 of the Act, the applicant’s mark is not distinctive of
the applicant because it is not capable of distinguishing the services from the
wares and services of others, particularly the wares described in the
respondent’s registered trade-mark.
II. The
decision under review
[6]
The
Board allowed the application for the health care services described in
paragraph (2) of the application but refused the application for the services
described in paragraphs (1), (3) and (4).
[7]
In
its opposition, the respondent alleged that the applicant’s trade-mark was
likely to cause confusion with two of its own trade-marks: Natursource and
Multi-Source. However, the Board’s consideration was solely limited to whether
the applicant’s trade-mark was confusing with the respondent’s Natursource mark
because the Board considered this to be the best case for confusion. In these
proceedings, the
parties, like the Board, limited their representation to the likelihood of
confusion between the applicant’s trade-mark and the respondent’s trade-mark
Natursource. Therefore, no reference will be made to the respondent’s second
trade-mark.
[8]
In
its assessment of the likelihood of confusion, the Board considered the factors
set out in subsection 6(5) of the Act.
[9]
The
Board found that both marks were weak. It determined that the applicant’s Nature’s
Source mark was not inherently distinctive because the terms “nature” and
“source” were suggestive of the services it offers. It also found that the
trade-mark Natursource was suggestive of the respondent’s wares. However, the
Board noted that the respondent’s mark acquired some distinctiveness over the
years from extensive use and, therefore, the paragraph 6(5)(a)
factor favoured the respondent.
[10]
The
Board determined that the length of time factor, listed at paragraph 6(5)(b) of
the Act, also favoured the respondent.
[11]
Regarding
the factor enumerated at paragraph 6(5)(c) of the Act, the nature of the
wares, services or business, the Board determined that there was some
connectivity between the parties’ respective wares and services and that there could
be some overlap. The Board summarized the evidence that it considered in regard
to this criteria as follows:
The Opponent’s products sold in Canada in association with its trade-mark NATURSOURCE are cereals, granola cereals, granola snack
food, porridge, roasted nuts, roasted seeds, dried fruit and nut mixes and
cookies. They are sold in supermarkets, corner stores, groceries, health food
stores, vending machines, pharmacies, airline companies, food service
operators, gifts baskets for companies. The Applicant’s Services are provided
to a client base being practitioner driven (medical doctors, chiropractors,
naturopathic doctors, homeopathic doctors). Each location operated by the
Applicant features on site therapists, nutritionists, naturopaths and
biochemist.
[12]
The
Board concluded that some overlap existed between the respondent’s products,
which are food items, and the applicant’s retail stores services, its
franchising services and its e-commerce services specializing in the sale of
nutritional supplements, vitamins and mineral supplements, herbal supplements,
diet and weight loss and fitness products.
[13]
Regarding
the paragraph 6(5)(d) factor, the channels of trade, the Board noted that the
respective trades of the parties could not be distinguished on the simple basis
that one sells wares while the other offers services. The Board held that there
could be an overlap in the parties’ respective trades if “there exists a
relationship between the respondent’s wares and the applicant’s services”. The
Board
determined
that such a relationship existed based on its finding that the respondent’s
wares could fall in the general category of food, diet and fitness products and
that these products were sold in health food stores. The Board further held
that the fact that the applicant expressly excluded selling the products
manufactured by the respondent in its application for registration, did not
eliminate such overlap.
[14]
Regarding
the paragraph 6(5)(e) factor, the Board determined that the parties’ marks
resembled each other both phonetically and visually. Further, the ideas
suggested by them have some similarities. Notably, the respondent’s wares and
the applicant’s services have a natural origin.
[15]
The
Board also deliberated on the two additional considerations raised by
the
applicant: the state of the register and the absence of actual instances of
confusion.
[16]
Regarding
the fact that there was no evidence of confusion despite the coexistence of the
marks for over nine years, the Board noted that the applicant operated its
stores in southern Ontario whereas the respondent based its operations in Montreal. Accordingly, the possibility of the respondent becoming aware of instances of
confusion was low.
[17]
With
respect to the state of the register, the Board only considered the marks that
were phonetically equivalent to the marks at issue or French translations
thereof. The Board found that the four citations filed in evidence
were not sufficient to draw the inference that the “consumer is accustomed to
see such trade-marks on the marketplace and is therefore able to distinguish
amongst them”. The Board indicated that it disregarded, for lack of relevance,
the marks where the words “source” and “naturelle” are clearly descriptive of
the wares, such as “EAU DE SOURCE NATURELLE”.
[18]
The
Board then considered the grounds of opposition that related to the
entitlement to register the mark, and to its distinctiveness. The Board
accepted that the respondent provided enough evidence to show prior use of its
mark as of the relevant dates under subsections 16(1) and 16(3) and that the
respondent had not abandoned such use as of the date of the advertisement of
the applicant’s application.
[19]
The
Board noted that the main issue was the likelihood of confusion between the
applicant’s trade-mark Nature’s Source and the respondent’s trade-mark
Natursource and trade-names Natursource Inc. and Natursource. The Board held
that the conclusions that it drew on the issue of the registrability of the
mark were equally applicable with respect to the grounds of opposition relating
to entitlement and distinctiveness. The Board found that the difference in the
material dates for these two issues was not a determining factor in its
analysis.
[20]
The
Board concluded that the applicant failed to discharge its burden to prove, on
a balance of probabilities, that its trade-mark, used in association with its retail
stores, franchising services and e-commerce services, was not likely to cause
confusion with the respondent’s trade-mark. However, the Board rejected the
opposition to the applicant’s application to use the trade-mark in association
with health care services.
III. The
Issue
[21]
The
issue is whether the Board erred in concluding that there is a likelihood of
confusion between the applicant’s trade-mark Nature’s Source used in
association with retail, franchising and e-commerce services and the respondent’s
trade-mark and trade-name.
[22]
Both
parties agree that, in the circumstances, the choice of one date over the others
does not materially affect the outcome of the confusion analysis.
IV. The Standard of Review
[23]
It
is agreed upon by the parties that the reasonableness standard of review
usually applies to decisions of the Board where no additional evidence is filed
in support of the appeal. They also agree that where additional material
evidence is filed in the course of the appeal which could have impacted the
Board’s decision, that decision is reviewable under the correctness standard. The
Court is to make its own assessment in light of all of the evidence, including
the additional evidence. In Molson Breweries v John Labatt Ltd, [2000] 3
FC 145 at para 51, 252 NR 91, Justice Rothstein, writing for the majority,
discussed the standard of review as follows:
51 I think the
approach in Benson & Hedges v. St. Regis and in McDonald v.
Silcorp are consistent with the modern approach to standard of review. Even
though there is an express appeal provision in the Trade-marks Act to the
Federal Court, expertise on the part of the Registrar has been recognized as
requiring some deference. Having regard to the Registrar's expertise, in the
absence of additional evidence adduced in the Trial Division, I am of the
opinion that decisions of the Registrar, whether of fact, law or discretion,
within his area of expertise, are to be reviewed on a standard of
reasonableness simpliciter. However, where additional evidence is adduced in
the Trial Division that would have materially affected the Registrar's
findings of fact or the exercise of his discretion, the Trial Division
judge must come to his or her own conclusion as to the correctness of the
Registrar's decision.
[Emphasis
added]
[24]
In
this case, both parties filed additional evidence.
[25]
The
applicant submits that the applicable standard of review should be correctness,
as both parties filed new evidence before the Court that is material and could
have influenced the decision made by the Board. The respondent is of the
opposite view and argues that a portion of the additional evidence is a mere
repetition of the evidence filed before the Board and that the remaining
evidence is not relevant.
[26]
With
respect, I am of the view that the additional evidence filed by the parties is
not significant and would not have influenced the Board’s decision.
[27]
The
applicant filed an affidavit with the Board, sworn by Mr. Sanjiv Jagota, its
president and CEO. In his affidavit, Mr. Jagota described the applicant’s
business and provided information about its sales and advertising activities
and expenses. In the course of this appeal, the applicant filed a second
affidavit sworn by Mr. Jagota, in which he provided more details about the nature
of the applicant’s business. He was also cross-examined on his affidavits. The
applicant contends that this additional evidence reinforces the affirmation
that it operates a dispensary, not a health food store, and that food item
sales account for only 2.5% of its total sales. With respect, I do not think
that the additional information would have led the Registrar to a different
understanding of the nature of the applicant’s business and trade. It appears
from the Board’s decision, more specifically from the following excerpts, that
the Board did not mischaracterize the nature of the applicant’s business and
understood that the applicant was selling supplements and vitamins and not food
products:
… The retail stores specialized in the supplement
business, selling nutritional supplements, vitamins and mineral supplements,
herbal supplements, diet and weight loss products, and fitness products.
… The Applicant’s services are provided to a client
base being practitioner driven (medical doctors, chiropractors, naturopathic
doctors, homeopathic doctors). Each location operated by the Applicant features
onsite therapists, nutritionists, naturopaths and biochemists.
[28]
The
applicant also filed an affidavit sworn by Ms. Jane Griffith, a research
consultant. Ms. Griffith’s affidavit describes her research regarding
examples of the use of the terms “nature” and “source” in association with
products for sale in Canada and regarding dictionary searches of those terms. I
do not think that the dictionary definitions of “source” and “nature” would
have had any impact on the Board’s analysis. The Board noted in its decision
that those terms were suggestive of the natural origin of the respondent’s
wares and of products that the applicant sells in its retail stores. As for the
examples of products bearing trade-marks or trade-names that incorporate the
words “source” and “nature” alone or in association with other words, I do not
think that they would have influenced the Board’s decision. There were not
enough examples of products branded under “nature” and “source” without the
association of any other words, to have influenced the Board’s finding with
respect to the impact of the state of the register. In addition, the Board
clearly indicated that it disregarded the trade-marks that were not
phonetically equivalent to the trade-marks at issue. Therefore, the examples of
products branded with the terms “nature” and “source” in association with other
words, are of the same character as the evidence already considered by the Board.
The same can be said regarding the information provided in the second affidavit
of Mr. James Haggerty. Therefore, this additional evidence, which relates
to trade-marks and brand names where the words “nature” and/or “source” are
used in association with other words, is of the same nature as the evidence
already disregarded by the Board.
[29]
The
additional evidence filed by the respondent is not material as it did not
contain anything that would likely have changed the Board’s findings. The
applicant argues that the additional evidence showed that only a fraction of
the respondent’s sales could have contributed to the distinctiveness of its
trade-mark since a portion of its sales are private label sales or bulk
products that are not sold bearing the Natursource mark. In my view, this
element would not have had any impact on the Board’s decision as the evidence
clearly shows that at least 85% of the respondent’s sales are sales of products
branded with its trade-mark.
[30]
I
am therefore of the view that the additional evidence filed in the course of
this appeal is not material and the Board’s decision is reviewable under the
reasonableness standard of review. In Mattel, Inc v 3894207 Canada Inc,
2006 SCC 22 at para 36-37, [2006] 1 S.C.R. 772 [Mattel], the Supreme Court
emphasized on the Board’s expertise and the deference owed to that expertise:
36 The
determination of the likelihood of confusion requires an expertise that is
possessed by the Board (which performs such assessments day in and day out) in
greater measure than is typical of judges. This calls for some judicial
deference to the Board's determination, as this Court stressed in Benson
& Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192,
at p. 200:
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 al [ [1951] 2 D.L.R. 7, at p. 13]:
.
. . 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.
37 What this means in
practice is that the decision of the registrar or Board "should not be set
aside lightly considering the expertise of those who regularly make such
determinations": McDonald's Corp. v. Silcorp Ltd. (1989), 24 C.P.R.
(3d) 207 (F.C.T.D.), at p. 210, aff'd (1992), 41 C.P.R. (3d) 67 (F.C.A.).
Reception of new evidence, of course, might (depending on its content)
undermine the factual substratum of the Board's decision and thus rob the
decision of the value of the Board's expertise. However, the power of the
applications judge to receive and consider fresh evidence does not, in and of
itself, eliminate the Board's expertise as a relevant consideration: Lamb v.
Canadian Reserve Oil & Gas Ltd., [1977] 1 S.C.R. 517, at pp. 527-28.
[31]
The
Court’s role when reviewing a decision under the standard of reasonableness is
defined as follows in Dunsmuir v New-Brunswick, 2008 SCC 9 at para 47, [2008] 1 S.C.R. 190:
47 Reasonableness
is a deferential standard animated by the principle that underlies the
development of the two previous standards of reasonableness: certain questions
that come before administrative tribunals do not lend themselves to one
specific, particular result. Instead, they may give rise to a number of
possible, reasonable conclusions. Tribunals have a margin of appreciation
within the range of acceptable and rational solutions. A court conducting a
review for reasonableness inquires into the qualities that make a decision
reasonable, referring both to the process of articulating the reasons and to
outcomes. In judicial review, reasonableness is concerned mostly with the
existence of justification, transparency and intelligibility within the
decision-making process. But it is also concerned with whether the decision
falls within a range of possible, acceptable outcomes which are defensible in
respect of the facts and law.
V. Position
of the Parties
[32]
Notwithstanding
the fact that the application for registration was refused in respect of three
categories of services, the parties focused their representation in regard to
the retail services as the two other services are somewhat subordinate to the
retail services. It is also clear from the Board’s decision that it also
focused its analysis on the retail store services. Therefore, this decision
deals with the arguments with regard to the retail services.
[33]
The
parties also agreed that the different applicable dates in regard to the
different grounds of opposition were of no consequence in this case and they
did not focus on the dates at which the likelihood of confusion was to be
determined.
A) The
applicant’s position
[34]
The
applicant argues that the consumer entering its store would not likely assume
that it is operated by the producer of the respondent’s wares and that the
Board erred in concluding that there was a likelihood of confusion.
[35]
The
applicant focused its representations on three of the criteria set forth in
subsection 6(5) of the Act.
[36]
The
applicant agrees with the Board’s finding that both trade-marks are weak and
faults the Board for not having given sufficient weight to that finding. Since
both marks are weak, the respondent’s trade-mark should not get a broad
protection and small differences should be sufficient to avoid confusion. The
applicant emphasizes the additional evidence that highlights the third-party
use from the register and in the marketplace. The evidence shows that the terms
“nature” and “source” are commonly used to describe wares that originate from a
natural source. The dictionary definitions also confirm the weakness of the
marks. Therefore, the applicant contends that the Board gave too much weight to
the acquired distinctiveness of the respondent’s trade-mark.
[37]
The
applicant further argues that the additional evidence filed by the respondent
also establishes that it is not all of the respondent’s wares that are sold
under its brand name and that only a portion of its sales may have contributed
to the distinctiveness of its trade-mark.
[38]
The
applicant also argues that the Board erred in finding that there was an overlap
between the retail store services that it offers and the respondent’s wares. In
the alternative, if there is an overlap, it is so small that it is not
material.
[39]
The
applicant further contends that the Board erred in finding that the wares sold
by the respondent could fall in the general category of food, diet and fitness
products. Rather, the respondent only manufactures food items. The evidence
shows that the applicant does not operate health food stores but dispensaries
that carry natural products and offer alternative health care professional
services. The applicant insists that it is not in the business of selling food.
The applicant also insists that the wares that it sells are not branded with
its trade-mark. It acknowledges that it sells food products in its retail
stores but these sales account for a too small percentage of its total sales
(2.5%) to be significant. The applicant also contends that its application
specifically excluded the respondent’s wares and that this exclusion should
have led the Board to eliminate any possible likelihood of confusion.
[40]
The
applicant also emphasizes the specialized nature of its stores and its
clientele, which is composed of people who use natural, alternative healing
methods. It also indicates that, for the most part, it employs professionally
trained and experienced staff and that the majority of the products that are
sold in its retail stores cannot be dispensed without guidance by that staff.
[41]
The
applicant further argues that while it acknowledges that the length of use
favours the respondent, the Board underestimated the fact that both trade-marks
have coexisted in the marketplace without confusion for a lengthy period. It
argues that it was unreasonable for the Board to limit its findings in that
regard to its assumption that it was unlikely that confusion would be brought
to the respondent’s attention. The applicant argues that the absence of
evidence of actual confusion is relevant and should have been considered.
B) The respondent’s position
[42]
The
respondent argues that the Board’s finding of a likelihood of confusion was
reasonable and that the decision accords with the evidence, is well
substantiated and reasoned. The respondent insists that the decision must be
read as a whole and that all the factors must be weighed together. The
respondent also contends that the additional evidence submitted on appeal only
serves to reinforce the Board’s findings.
[43]
The
respondent insists that the finding that the respondent’s trade-mark was more
known and had acquired distinctiveness is supported by the evidence. The length
of use also favours the respondent and that is not disputed.
[44]
The
respondent also argues that both marks resemble each other and the ideas
suggested by them have similarities as they both suggest a natural origin.
[45]
The
respondent further argues that it was reasonable to conclude that there is an
overlap between the applicant’s services and the respondent’s wares. The
respondent highlights, in reply to the applicant’s arguments, that the Board
never found that the main business of the applicant was to sell food and that
it acknowledged that the applicant’s application specifically excluded the
respondent’s wares. The respondent argues that this exclusion is not sufficient
to conclude that a consumer is not likely to be confused as to the source of
both wares and services. If there exists a relationship between the services
and the wares, it may be sufficient to support a finding of an overlap in the
parties’ trades and support a conclusion of a likelihood of confusion.
[46]
The
respondent argues that in this case, there is a relationship, a connectivity,
between the applicant’s services and the respondent’s wares. Both parties’
businesses operate in the same general sector of natural products and they are
both geared towards the same clientele, people who are concerned with their
health and who aim to live longer through the use of natural products. The
respondent’s products are largely found in retail stores similar to the ones
that the applicant operates. The fact that the applicant does not sell the
respondent’s products is not sufficient to eliminate a likelihood of confusion.
The respondent places emphasis on the fact that more than 50% of the products
sold by the applicant are not even the products listed in its application and
fall under the same category as the respondent’s products: they are personal
care products, home care products, teas and herbs, health and diet products,
and snacks and drinks. Although the food and drinks only represent a small
portion of the total sales, they are always situated at a prime location
beneath the cash. The respondent insists that the Board did not err when it
concluded that the wares sold by the applicant could fall in the general
category of food, diet and fitness products.
[47]
The
respondent argues that the state of the register is not a stand alone factor.
It must be weighed in the context of all the other material factors. It also
argues that the additional evidence adduced regarding the list of trade-marks
that use “nature” and “source” is not relevant, as those terms are not the only
component of the marks and are mostly associated with another trade-name
already known by the public and used as a description of the trade-mark. The
respondent argues that the use of the terms “nature” and “source” in
combination with another trade-name that describe the product or a new line of
products, is a totally different situation. In the case at hand, the words
“nature” and “source” are the sole components of the trade-marks.
VI. Analysis
[48]
There
is no dispute between the parties as to the applicable principles.
[49]
It
is useful to keep in mind the concept of the monopoly underlying the trade-mark
law. In Mattel, above, at para 21, the Court expressed the following:
21 . . . Its claim to monopoly rests not
on conferring a benefit on the public in the sense of patents or copyrights but
on serving an important public interest in assuring consumers that they are
buying from the source from whom they think they are buying and receiving the
quality which they associate with that particular trade-mark. Trade-marks thus
operate as a kind of shortcut to get consumers to where they want to go, and in
that way perform a key function in a market economy. Trade-mark law rests on
principles of fair dealing. It is sometimes said to hold the balance between
free competition and fair competition.
[50]
In
Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 at para 1, [2011]
2 SCR 387 [Masterpiece], the Supreme Court restated the impact of
confusion between similar trade-marks:
1 . . . Where the
trade-marks of different businesses are similar, a consumer may be unable to
discern which company stands behind the wares or services. Confusion between
trade-marks impairs the objective of providing consumers with a reliable
indication of the expected source of wares or services. . . .
[51]
As
explained in Masterpiece, above at para 40, the test for confusion under
the Act was authoritatively reiterated by Justice Binnie in Veuve
Clicquot Ponsardin v Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824
[Veuve Clicquot]:
40 At the
outset of this confusion analysis, it is useful to bear in mind the test for
confusion under the Trade-marks Act. In Veuve Clicquot Ponsardin v.
Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824, Binnie J.
restated the traditional approach, at para. 20, in the following words:
The test
to be applied is a matter of first impression in the mind of a casual consumer
somewhat in a hurry who sees the [mark], at a time when he or she has no more
than an imperfect recollection of the [prior] trade-marks, and does not pause
to give the matter any detailed consideration or scrutiny, nor to examine
closely the similarities and differences between the marks.
Binnie J. referred
with approval to the words of Pigeon J. in Benson & Hedges (Canada) Ltd.
v. St. Regis Tobacco Corp., [1969] S.C.R. 192, at p. 202, to contrast with
what is not to be done - a careful examination of competing marks or a side by
side comparison.
[52]
Applied
to this case, the question to be asked is whether, as a matter of first impression,
the “casual consumer somewhat in a hurry” who sees the applicant’s trade-mark
Nature’s Source in association with the service of selling various natural
products, having no more than an imperfect recollection of the respondent’s
trade-mark or trade-name Natursource, in association with the wares that it
manufactures, would likely think that the applicant’s services are of the same
source as the respondent’s food products.
[53]
Subsection
6(5) of the Act sets out the approach required to assess confusion:
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(5) 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; and
(e) the
degree of resemblance between the trade-marks or trade-names in appearance or
sound or in the ideas suggested by them.
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(5) En décidant si
des marques de commerce ou des noms commerciaux créent de la confusion, le
tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances
de l’espèce, y compris :
a) le caractère
distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure
dans laquelle ils sont devenus connus;
b) la période pendant
laquelle les marques de commerce ou noms commerciaux ont été en usage;
c) le genre de
marchandises, services ou entreprises;
d) la nature du
commerce;
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..
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[54]
It
is important to keep in mind that the circumstances and factors set forth in
subsection 6(5) are not exhaustive, that the assessment must be context-driven
and the weight to be given to each factor may vary (Veuve Clicquot,
above at para 27).
[55]
It
is also useful to keep in mind that in Masterpiece, above at para 53,
the Supreme Court held that the focus must be on the terms set out in the
application for the trade-marks and on what the “the registration would
authorize the [applicant] to do, not what the [applicant] happens to be doing
at the moment.” The Court added at para 59 that while actual use is not
irrelevant, “it should not be considered to the exclusion of potential uses
within the registration.”
[56]
In
this case, the question is not whether the Court would have reached the same
conclusion as the Board, but whether its decision falls within the range of
possible, acceptable outcomes. In my view, it does and the Court’s intervention
is not warranted.
[57]
Both
parties agree that their respective marks are indeed weak marks and that they
are comprised of common words that are suggestive of the natural origin of the
parties’ services and products; neither are inherently distinctive. The
evidence shows that both trade-marks have acquired some distinctiveness and
have become known to a certain degree through their use. However, the Board
found that the respondent’s trade-mark acquired more distinctiveness through
extensive use over a lengthy period of time and this finding is supported by
the evidence.
[58]
The
applicant argues that the Board did not give appropriate weight to the weakness
of the trade-marks as the terms “source” and “natural” are commonly used to
describe wares originating from a natural source. Accordingly, the respondent’s
trade-mark should receive a narrow scope of protection. The Board found that it
was irrelevant to compare the parties’ trades-marks to third-party trade-marks
that were not phonetically identical. This approach was not unreasonable and,
therefore, the evidence about the use of the terms “source” and “natural” in
association with other words do not lessen the acquired distinctiveness of the
respondent’s trade-mark. Furthermore, the Board did not base its decision
solely on its finding about the respondent’s acquired distinctiveness and it was
within its prerogative to determine the weight to be afforded to this factor.
[59]
The
applicant also argues that the respondent’s acquired distinctiveness should be
mitigated by the fact that not all of the respondent’s sales are sales of
branded products. With respect, this argument must fail. While it is true that
the additional evidence shows that the respondent sells some of its products as
private label sales, the additional evidence also shows that the large majority
(85%) of the respondent’s sales are made bearing its trade-mark. The proportion
of unbranded sales is not sufficient, in my view, to have potentially
influenced the Board’s decision about the acquired distinctiveness of the
respondent’s trade-mark.
[60]
It
is clear that that the length of time factor favors the respondent and the
applicant did not argue that the Board’s finding in that regard was erroneous.
[61]
The
applicant places great emphasis on the nature of the wares and services, and
the nature of the trade. It argues that the Board mischaracterized its business
and insists that it does not operate a health food store but a dispensary more
akin to a natural pharmacy. The applicant also argues that the Board did not
consider the fact that its application expressly excluded the retail sale of
products such as those manufactured by the respondent. With respect, I do not
agree.
[62]
There
is no doubt that the applicant’s services and the respondent’s wares are not of
the same class and the Board acknowledged this. In my view, the Board had a good
understanding of the nature of each party’s businesses and it did not conclude
that the applicant operates health food stores. It found, however, that there
was an overlap and a relationship between the applicant’s services and the
respondent’s wares. More precisely, the Board found that the respondent’s
products could fall in the general category of food, diet and fitness products
that are in fact sold in health food stores. It found that the exclusion of the
respondent’s products in the applicant’s application did not eliminate the
potential overlap.
[63]
I
consider that the Board’s finding on this point is reasonable. Both businesses
are geared towards consumers who take care of their health and who prefer
natural based products that are healthy. Notwithstanding the fact that the
applicant is not in the food business per se, the products that it sells
are products that people eat as supplements and vitamins. At the very least,
one cannot say that the applicant is a stranger to the health food industry.
Moreover, the products sold in the applicant’s retail stores and the products
manufactured by the respondent fall in the same category of natural products.
The respondent’s products, which are healthy upscale snacks, may not be sold in
the applicant’s retail stores but they are sold in the same type of
establishments. Based on the evidence and the nature of the parties’ respective
businesses, I do not find that it was unreasonable for the Board to conclude
that there was some kind of connection between the applicant’s services and the
respondent’s wares.
[64]
The
Board also found that the parties’ trade-marks resemble each other and that the
ideas suggested by them are similar, specifically that the applicant’s services
and the respondent’s wares have a natural origin. I see no error in this
finding. It is clear that the two trade-marks are almost identical. In Masterpiece,
above at para 49, the Supreme Court indicated that “the degree of resemblance,
although the last factor listed in subsection 6(5), is the statutory factor
that is often likely to have the greatest effect on the confusion
analysis”.
[65]
The
applicant argues that the Board should have given weight to the fact that there
was no evidence of actual confusion. In my opinion, it was not unreasonable for
the Board to give little weight to this factor in light of the low possibility
that the respondent would become aware of actual instances of confusion.
Despite the fact that its products are distributed nationally, the respondent
operates from Montreal, far away from any of the applicant’s retail locations
or consumers of the applicant’s services.
[66]
The
applicant argues that the additional evidence shows that there are 33 other
trade-marks registered that use the terms “nature” and “source”, their French
equivalents or similar terms, which should lead to a finding that consumers are
accustomed to distinguishing small differences among trade-marks. In my view,
the vast majority of these trade-marks use the words “nature” and “source” in
association with other terms, whereas in this case “nature” and “source” are
the only words composing the trade-marks. In this context, it was not
unreasonable for the Board to hold that the only third party trade-marks that
were relevant were those that were phonetically equivalent to the parties’
trade-marks or the French equivalent thereof. The four instances found on the
register were not sufficient to draw the inference that consumers would be
accustomed to see such trade‑marks in the marketplace and distinguish among
them.
[67]
Both
parties referenced several judgments from this Court to either emphasize the
similarities between the facts of these cases or to distinguish them. It is
important to note that each case must be assessed in regard of its own set of
circumstances and, in this case, I do not see the need to refer to each of
those cases.
[68]
For
all of the above reasons, I conclude that the Board’s decision was reasonable
and that this appeal should be dismissed.
JUDGMENT
THIS
COURT’S JUDGMENT is that appeal is
dismissed with costs in favour of the respondent.
“Marie-Josée
Bédard”
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