Date: 20070731
Docket: T-754-06
Citation: 2007
FC 801
Ottawa, Ontario, July 31, 2007
PRESENT: The Honourable Madam Justice Simpson
BETWEEN:
BUDGET
BLIND SERVICE LTD. and MARK REYNOLDS
Applicants
and
BUDGET
BLINDS, INC.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
Applicants have applied, pursuant to section 57 of the Trade-marks Act,
R.S. 1985, c. T-13 (the Act) for an order that the Respondent’s trade-mark
registrations No. TMA659164 and TMA659170 (together the Respondent’s Marks) be
struck out on the basis that they are invalid because (i) they were confusing
contrary to section 17 of the Act when the trade-mark applications were filed
on March 12, 2003 and (ii) they lacked distinctiveness contrary to
paragraph 18(1)(b) of the Act when this proceeding was commenced on May 2,
2006.
[2]
The
Applicants also seek declarations that the Respondent was not the person
entitled to secure registration of the Respondent’s Marks.
THE APPLICANTS
[3]
Mark
Reynolds (Reynolds), is the President and a director of the Applicant Budget
Blind Service Ltd. It was incorporated in September 2000 pursuant to the laws
of British
Columbia and has
an office in Surrey, B.C.. Reynolds and his wife are the only shareholders of
Budget Blind Service Ltd.
[4]
In his
affidavit sworn on May 31, 2006 (the Reynolds Affidavit), Reynolds
describes the business of Budget Blind Service Ltd. as follows:
a.
as to
wares: Window coverings in the nature of window blinds, window shades, and
window shutters; and
b.
as to
services: Services related to the cleaning and repairing of window coverings,
window blinds, window shades, and window shutters.
[5]
Reynolds
also says that from October 1989 to September 2000 he carried on the Business
continuously using the trade-marks “Budget Blinds”, “Budget Blind Service “and “Budget
Blind Cleaning”. Reynolds says that after he incorporated Budget Blind Service
Ltd. in 2000, it continued to use these names as his licensee and it still uses
them today.
[6]
Reynolds
did not take a position about whether these names were unregistered trade-marks
or trade names, the terms were used interchangeably in the Applicants’ written
materials and in oral submissions. They said that both paragraphs 16(3)(a) and
(c) of the Act applied. The Respondent, on the other hand, said that the
Applicants’ marks were trade names. In my view, nothing turns on the
distinction in this case so I will refer to them as the “Applicants’ Names”.
THE RESPONDENT
[7]
The
Respondent Budget Blinds, Inc. was incorporated in California in 1992. Chad Hallock, its Chief Executive
Officer, swore an affidavit on September 1, 2006 (the Hallock Affidavit). It
says that since 1994 Budget Blinds, Inc. has been:
…in the business of franchising window
covering businesses throughout the United States and Canada. Budget Blinds franchises
operate primarily through a shop-at-home business model, that is, Budget Blinds
franchisees travel directly to customers’ homes or businesses to display, sell,
measure and install window covering products.
There are presently over 1089 territories
franchised by Budget Blinds throughout the United States and Canada with approximately 708
licensees, each of which operates under the “BUDGET BLINDS” trade name and
trade mark. As of August 14, 2006, 24 of these territories were in Canada, operated by 12 franchisees.
[8]
The
Hallock Affidavit also states that since its incorporation in 1992 and once it
began its franchise operations in 1994, the Respondent has continually used “Budget
Blinds” as its trade name and trade-mark in association with the retail sale of
blinds and the operation of Budget Blinds’ franchises.
[9]
In
2002/2003, the Respondent considered expanding its operations into Canada and, in anticipation, on
March 12, 2003, filed to register the Respondent’s Marks in Canada based on proposed use. In
2005, the Respondent decided to actually move its business into Canada and, on
February 16, 2006 had the Respondent’s Marks registered in Canada based on use in Canada by its franchisees. This use
continues today.
THE RESPONDENT’S MARKS
[10]
TMA659164
(the First Mark) consists of the words “Budget Blinds”. It was applied for as a
proposed mark on March 12, 2003 and registered on February 16, 2006
following the filing of a Declaration of Use on January 24, 2006. The
First Mark was registered in the United States on December 21, 1993.
[11]
The First
Mark relates to services which are described as “Distributorship and retail
stores services in the field of window coverings”.
[12]
TMA659170
(the Second Mark) consists of the words “Budget Blinds” in a stylized format
which shows the word Budget in smaller typeface positioned above the word
Blinds (between the letters l and d). Blinds appears in type which is
approximately 2.5 times larger than the type used for the word budget. The
letters in both words are in heavy bold type.
[13]
The Second
Mark was applied for as a proposed mark on March 12, 2003 and registered
on February 16, 2006, following receipt of a Declaration of Use which was filed
on January 24, 2006.
[14]
The First
and Second Mark will be referred to collectively as the Respondent’s Marks.
THE ISSUES
[15]
Were the
Respondent’s Marks in use and confusing with the Applicants’ Names on
March 12, 2003 when applications to register the Respondent’s Marks were
filed such that subsection 16(3) of the Act applies to make the registrations
invalid because they were unregistrable under paragraph 18(1)(a) of the Act?
[16]
Did the
Respondent’s Marks fail to distinguish the Respondent on the date these
expungement proceedings began (May 2, 2006) such that by reason of
paragraph 18(1)(b) of the Act their registrations were invalid?
DISCUSSION
Issue 1 - Confusion
[17]
Subsection
6(5) of the Act, provides a roadmap for considering the confusion issue. It
says:
|
6. (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.
|
6. (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.
|
[18]
The threshold
question in this case concerns use of the Applicants’ Names. The Respondent
concedes that Budget Blind Services and Budget Blind Cleaning were in use but
denies that “Budget Blinds” was in use on March 12, 2003. My conclusion is
that the evidence in the Reynolds Affidavit does not establish such use. My
reasons are as follows:
(i)
The Reynolds
Affidavit refers to a fax sent by the Applicant corporation to its lawyer on
April 18, 2005 which shows the sender as Budget Blinds. However, the fact
that a fax machine heading in 2005 says Budget Blinds does not illustrate use
in March of 2003 or use in association with the Applicants’ wares or services.
I therefore, gave this evidence no weight.
(ii)
The Reynolds
Affidavit indicates in paragraph 19 that:
…since
at least October, 1989, and continuing to the present, uninterrupted, I have
answered, and I have instructed all of my employees to answer my business
telephone calls by identifying my business as “Budget Blinds.”
In this regard, the Respondent
relies on the affidavit of Lisa Koltun sworn on August 28, 2006. She is a
private investigator who was retained on June 13, 2006 (the Koltun
Affidavit).
The Koltun Affidavit includes the
following passages in paragraph 7:
Between
June 14, 2006 and June 19, 2006, I placed several calls to the business
telephone number of Budget Blind Services Ltd. at (604) 514-8842. Calls made
between the hours of 9:00 am and 2:00 pm were answered by an unidentified
female, who answered the telephone by stating “Budget Blind Services”. Calls
made after 2:00 pm were answered by a message service stating the following in
a male voice:
“Hello,
and thanks for calling Budget Blind Services. Our office hours are Monday to
Friday from 9:00 a.m. until 2:00 p.m. This is for blind repairs, cleaning, and
drop-off. We do have drivers that work longer hours. Please leave a message
after the tone and we’ll get back to you as soon as possible.”
In my view, this evidence shows that the
Reynolds Affidavit which purports to describe a longstanding and current practice
is not trustworthy evidence. It was clearly wrong in June of 2006 and this
casts general doubt on its accuracy. Accordingly, I concluded that this
evidence was unreliable and I gave it no weight.
(iii)
The Reynolds
Affidavit of May 2006 includes as Exhibit K, a table display card “recently” used
at a golf tournament to show that Budget Blinds was recognized as a sponsor. I
have given this evidence no weight for two reasons. First, the display card was
not evidence of use in association with the Applicants’ wares or services and
second, if it was recently used in 2006, it does not show use as of March 2003.
(iv)
Paragraph 32 of the
Reynolds Affidavit exhibits a letter from the Better Business Bureau of April
20, 2004 which includes a note from a customer who was delighted with the
Applicants’ service in March of 2004 and described the corporate applicant as
Budget Blinds. However, this single piece of evidence does persuade me that the
Applicants used that trade name in March of 2003.
(v)
Finally, the Reynolds Affidavit provides
substantial evidence which shows that the Applicants are carrying on business
using the trade names “Budget Blind Services” and “Budget Blind Cleaning” and
were doing so on March 12, 2003. This persuasive evidence about the use of
these names reinforces my conclusion that “Budget Blinds” was not in use. If it
had been used, there would be comparable evidence of use.
[19]
For these
reasons, the first issue is narrowed to an assessment of whether on
March 12, 2003, the Applicants’ Names “Budget Blind Services” and “Budget
Blind Cleaning” were confusing with the Respondent’s Marks.
[20]
Budget
Blind Services and Budget Blind Cleaning are, in my view, weak names that have
low inherent distinctiveness. Budget is a dictionary word and the words Blind
Cleaning and Blind Services are descriptive.
[21]
This
conclusion is significant because small differences will serve to distinguish
marks that have little or no inherent distinctiveness (see Kellogg Salada
Canada Inc. v. Maximum Nutrition Ltd. (1992), 43 C.P.R. (3d) 349 at 359
(Fed. C.A.)). I have therefore concluded
that the Respondent’s Marks differ from “Budget Blind Services” and “Budget
Blinds Cleaning” in two significant respects. First, blinds is written in the
plural and second the words “services” and “cleaning” do not appear.
[22]
The
Respondent also says that it and the Applicants are carrying on substantially
different businesses because the Applicants are not selling blinds. Rather,
they are primarily involved in the cleaning and repair of window blinds and
other window coverings. The evidence in the Reynolds Affidavit is scant on this
issue. It only shows that, in April 2000, one Hunter Douglas blind was
purchased by Budget Blind Services and that, in December 1998, it sold three
solar shades. This extremely small sales volume corresponds with the evidence
in the Koltun Affidavit indicating that she was advised by “Lisa” at Budget
Blind Services offices that it only sells blinds to customers who need them
because their existing blinds are too damaged to be cleaned. While counsel for
the Applicants acknowledged that sales were not a large part of his client’s
business, my conclusion is that any sales were an insignificant part of the
Applicants’ business.
[23]
It is also
noteworthy that the Koltun Affidavit says that between 1999 and 2006, Budget Blind
Services and Budget Blind Cleaning never appeared in the yellow pages for the
city of Surrey under the heading “Blinds – Retail”. When they did appear, it
was under the heading “Blinds – Cleaning and Repair”. As well, the voicemail
message on the Applicants’ business phone in 2006 said that Budget Blind Services
offered to repair blinds.
[24]
In
contrast, the business of the Respondent’s franchisees is primarily the retail
sale and installation of blinds and other window coverings. The Respondent’s
Marks are registered for services described as “Distributorship and retail
stores services in the field of window coverings”. No mention is made of
cleaning and repair. However, there is one item of evidence to suggest that in
2001 franchisees might have expected to clean blinds. In one of many internet
advertisements placed by the Respondent to attract prospective franchisees
reference is made to the Respondent’s “full repertoire of services including
the sales, installation and cleaning of all types of window coverings”.
However, this single ad was placed in 2001 well before March 12, 2003 and
was not directed to customers. In my view, the evidence shows that cleaning was
an insignificant part of the Respondent’s business.
[25]
The
Applicants provided no evidence about the nature of their business or how their
business premises were used. However, The Koltun Affidavit shows that the
Applicants’ business address became Unit 3 – 19295 Enterprise Way in Surrey,
B.C. in 2002 or 2003. In 2006, she saw Budget Blind Services signs in ground
and second floor windows. The Koltun Affidavit also showed that no blinds were
kept in stock and that customers who wanted cleaning services could drop off their
blinds at the business address.
[26]
What is in
evidence, is the fact that the Respondent’s franchisees travel to customers’
homes to display, sell, measure and install window coverings. I assume that a
prospective purchaser is not hurried when an appointment is made for a Respondent’s
representative to visit the purchaser’s residence. The purchasers have time to
consider what service is needed and ensure that the company they contact is in
a position to provide that service. It is clear, based on the evidence before
me that the Applicants do not hold themselves out as window covering retailers.
Accordingly, a purchaser who wanted to buy window coverings would have no
reason to contact the Applicants. Nothing in their advertising, telephone
listings or trade names which include the words services and cleaning suggests
that they would sell blinds or other window coverings.
[27]
In sum, I
conclude that the Applicants have failed to meet their onus to show that the
marks were confusing because:
● the
words “cleaning” and “services” in the Applicants’ Names were sufficient to
distinguish them from the Respondent’s Marks
● the
parties were in different businesses albeit dealing with the same products. The
Applicants cleaned and repaired blinds and the Respondents sold and installed
them
● the
Respondent’s franchisees carried on business in a manner that virtually
eliminated any possibility of confusion
Issue 2 - Distinctiveness
[28]
The
Applicants also allege that the Respondent’s Marks were not registerable under
paragraph 18(1(b) of the Act because they did not distinguish the services of
Budget Blinds from those offered by the Applicants on May 2, 2006 when
these expungement proceedings were commenced.
[29]
Section 2
of the Act says that “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 as to distinguish them.”
[30]
The
Hallock Affidavit shows that advertising, using the Respondent’s Marks on
FranchiseSolutions.com, produced four inquiries about franchises from potential
franchisees in Ontario and Alberta as early as February and March 2000.
This evidence shows that the Respondent’s Marks were being noticed by Canadians
using the internet.
[31]
The
Respondent has also operated a website at www.budgetblinds.com
since 1996. It advertises to both prospective franchisees and consumers. In
2004, the Respondent spent over $1,000,000 in consumer-oriented internet
keyword advertising involving search engines such as Google and Yahoo. While
there is no concrete evidence of Canadian interest in the website or the
keyword ads, it is reasonable to assume that some Canadians became aware of the
site and the ads.
[32]
By 2003,
the Respondent was spending $2,311,000 USD on print television and online
advertising. That amount increased to $7,300,000 USD in 2005 and was projected
to reach $7,700,000 in 2006.
[33]
Since
2004, the Respondents have placed repeated consumer ads using the Respondent’s
Marks in magazines with Canadian circulation such as Elle Décor, Home,
Metropolitan Home, Woman’s Day, Country Home, Traditional Home, Family Circle,
Country Living, House Beautiful, Good Housekeeping, Martha Stewart, House &
Garden, Home Companion and Country Sample.
[34]
By way of
background it should be recalled that the Respondent filed for registration of
the Respondent’s Marks on March 12, 2003 on the basis of proposed use.
Thereafter, in 2005, the Respondent decided to expand its franchising
operations into Canada.
[35]
The
Respondent signed franchise agreements with Canadian Franchisees in 2005 and
four of them (in Vernon, North
Vancouver,
British Columbia, Barrie/Orillia, Ontario
and Edmonton, Alberta) on May 3,
2006.
[36]
Canadian
franchisees are licensed to use the Respondent’s Marks and do so in their
advertising and on their invoices. The Hallock Affidavit shows examples of such
materials used by its franchisee in North and West Vancouver. This use included business cards, an
April 2006 Yellow Pages ad and an invoice dated February 7, 2006.
[37]
In my
view, based on this evidence, distinctiveness has been demonstrated.
JUDGMENT
UPON reviewing the material filed;
AND UPON hearing the submissions of
counsel for both parties in Vancouver on April 11, 2007.
THIS COURT ORDERS AND ADJUDGES that this application is hereby
dismissed with costs in accordance with Tariff B of the Federal Court Rules,
S.O.R./98-106.
“Sandra
J. Simpson”
Email this Content