Date: 20080207
Docket: A-182-07
Citation: 2008 FCA 50
CORAM: DÉCARY
J.A.
SHARLOW
J.A.
TRUDEL
J.A.
BETWEEN:
CHEAPTICKETS AND TRAVEL INC.
Appellant
and
EMALL.CA INC. and EMALL.INC.,
carrying on business as CHEAPTICKETS.CA
Respondents
REASONS FOR JUDGMENT
SHARLOW J.A.
[1]
This
is an appeal of the judgment of Justice Strayer dated March 2, 2007 (2007 FC
243) in which he granted the application of the Respondents Emall.ca Inc. and
Emall Inc. (collectively, “Emall”) for the expungement of two registered
trade-marks owned by the Appellant Cheaptickets and Travel Inc.
(“Cheaptickets”). The registered trade-marks in issue are CHEAP TICKETS, No.
564,905, and CHEAP TICKETS AND TRAVEL & DESIGN, No. 564,432.
Preliminary point on jurisdiction
[2]
The
Registrar of Trade-Marks gave effect to the expungement order approximately 17
days after the order was made, before the expiry of the appeal period for the
order. Cheaptickets had not asked Justice Strayer or this Court for a stay of
the order. It appears that, contrary to the understanding of Cheaptickets, the
Registrar has no policy of deferring the execution of an expungement order
until all rights of appeal are exhausted.
[3]
Emall
argues that, although section 57 of the Trade-Marks Act, R.S.C. 1985, c.
T-13, gives the Federal Court the exclusive original jurisdiction to order the
expungement of a registered trade-mark, there is nothing in the Trade-Marks
Act or the Federal Courts Act, R.S.C. 1985, c. 1985, c. F-7, that
specifically gives this Court the authority to order the reinstatement of a
trade-mark that has been expunged as the result of an order of the Federal
Court. If that argument is correct, this appeal is moot.
[4]
I
do not accept Emall’s argument. In my view, this Court has the jurisdiction to
grant the remedy sought by Cheaptickets in this appeal. I reach that conclusion
for the following reasons.
[5]
Subsection
57(1) of the Trade-Marks Act reads as follows:
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57. (1) The Federal
Court has exclusive original jurisdiction, on the application of the
Registrar or of any person interested, to order that any entry in the
register be struck out or amended on the ground that at the date of the
application the entry as it appears on the register does not accurately
express or define the existing rights of the person appearing to be the
registered owner of the mark.
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57. (1) La Cour
fédérale a une compétence initiale exclusive, sur demande du registraire ou
de toute personne intéressée, pour ordonner qu’une inscription dans le
registre soit biffée ou modifiée, parce que, à la date de cette demande,
l’inscription figurant au registre n’exprime ou ne définit pas exactement les
droits existants de la personne paraissant être le propriétaire inscrit de la
marque.
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[6]
The
expungement of a registered trade-mark is, in the language of section 57, the
striking out of an entry on the register of trade-marks.
[7]
An
order to expunge a registered trade-mark is a final judgment of the Federal
Court. The respondent in the expungement proceedings has the right to appeal
the expungement order to this Court pursuant to paragraph 27(1)(a) of
the Federal Courts Act.
[8]
Section
52 of the Federal Courts Act states the powers of this Court in appeals.
In the case of an appeal from the Federal Court, subparagraph 52(b)(i)
provides that this Court may:
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(i) dismiss the appeal or give the judgment and award
the process or other proceedings that the Federal Court should have given or
awarded […].
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(i) soit rejeter l'appel ou rendre le jugement que
la Cour fédérale aurait dû rendre et prendre toutes mesures d'exécution ou
autres que celle-ci aurait dû prendre […].
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[9]
As
I read subparagraph 52(b)(i), where the order under appeal is an
expungement order, this Court may either dismiss the appeal (in which case the
expungement order would stand), or allow the appeal. If the appeal is allowed,
this Court may go further and, making the order the Federal Court should have
made, dismiss the application for expungement. If that order is made after the
expungement has occurred, the Registrar of Trade-Marks would be required, upon
receiving notice of the order, to reverse the expungement and, in effect,
re-instate the registration of the trade-mark.
The presumption of the validity of the
registration of a trade-mark
[10]
The
argument of Cheaptickets invoked, in several different contexts, the
proposition that the registration of a trade-mark is presumed to be valid. Emall
does not disagree that there is such a presumption, and I have no doubt that
Justice Strayer was aware of it. However, it seems to me that Cheaptickets is
attempting to place more weight on this presumption than it can reasonably
bear.
[11]
The
existence of the presumption of validity is confirmed in General Motors of Canada v. Décarie
Motors Inc. (C.A.), [2001] 1 F.C. 665 (at paragraph 31). The cited authority for the
existence of the presumption is Hughes on Trade Marks (Markham
Ont.: Butterworths, 1984, at page 556). In the current looseleaf version of
that publication, Hughes on Trade Marks (Second Edition, Markham Ont.:
LexisNexis Canada Inc.), the discussion about the presumption of validity
appears at §56 (page 817). From the cited cases, in particular Unitel
Communications Inc. v. Bell Canada, 61 C.P.R. (3d) 12 (F.C.T.D.), at page
27, it appears that the source of the presumption is the statutory predecessor
to paragraph 19 of the Trade-Marks Act. Section 19 reads as follows:
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19. Subject to
sections 21, 32 and 67, the registration of a trade-mark in respect of any
wares or services, unless shown to be invalid, gives to
the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark
in respect of those wares or services.
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19. Sous
réserve des articles 21, 32 et 67, l’enregistrement d’une marque de commerce
à l’égard de marchandises ou services, sauf si son invalidité est démontrée,
donne au propriétaire le droit exclusif à l’emploi de celle-ci, dans tout le
Canada, en ce qui concerne ces marchandises ou services.
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[12]
The
presumption of validity established by section 19 of the Trade-Mark Act is
analogous to the presumption of validity of a patent in section 45 of the Patent
Act, R.S.C. 1985, c. P-4. In Apotex Inc v. Wellcome Foundation Ltd.,
[2002] 4 S.C.R. 153, Justice Binnie characterized that presumption as weakly
worded, and he explained (at paragraph 43) that the presumption adds little to
the onus already resting, in the usual way, on the attacking party. What that
means, in my view, is that an application for expungement will succeed only if an
examination of all of the evidence presented to the Federal Court establishes
that the trade-mark was not registrable at the relevant time. There is nothing
more to be made of the presumption of validity.
Whether the trade-marks were clearly
descriptive at the relevant time
[13]
The
application for expungement was based on subsection 18(1) of the Trade-Marks
Act, which reads in relevant part as follows (my emphasis):
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18. (1) 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) […].
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18.
(1) L’enregistrement d’une marque de commerce est invalide dans les cas
suivants :
a) la marque
de commerce n’était pas enregistrable à la date de l’enregistrement;
b) la marque
de commerce n’est pas distinctive à l’époque où sont entamées les procédures
contestant la validité de l’enregistrement;
c) […].
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[14]
An
application for expungement on the basis of paragraph 18(1)(a)
necessarily invokes subsection 12(1), which reads in relevant part as follows:
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12. (1) Subject to section
13, a trade-mark is registrable if it is not
[…]
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12.
(1) Sous réserve de l’article 13, une marque de commerce est enregistrable
sauf dans l’un ou l’autre des cas suivants :
[…]
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(b) whether
depicted, written or sounded, either clearly descriptive or deceptively
misdescriptive in the English or French language of the character or quality
of the wares or services in association with which it is used or proposed to
be used or of the conditions of or the persons employed in their production or
of their place of origin […]
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b) qu’elle soit sous forme graphique, écrite ou sonore, elle donne une
description claire ou donne une description fausse et trompeuse, en langue
française ou anglaise, de la nature ou de la qualité des marchandises ou
services en liaison avec lesquels elle est employée, ou à l’égard desquels on
projette de l’employer, ou des conditions de leur production, ou des
personnes qui les produisent, ou du lieu d’origine de ces marchandises ou
services […]
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[15]
Justice Strayer
found that the trade-marks were clearly descriptive of the character or quality
of the services or wares in association with which they were used by Cheaptickets,
a travel agency. On that basis, he concluded that by virtue of the combined
operation of paragraph 18(1)(a) and paragraph 12(1)(b), the
registration was invalid.
[16]
Cheaptickets
argues that Justice Strayer erred in determining that the trade-marks were
“clearly descriptive” within the meaning of paragraph 12(1)(b), because they
are at most merely suggestive of the character or quality of the services
offered by Cheaptickets. This is a question of mixed fact and law that will not
be disturbed on appeal in the absence of palpable and overriding error, or a
readily extricable error of law. My review of the record and the submissions of
counsel reveal no legal error on the part of Justice Strayer, and no palpable
and overriding error of fact.
The saving provision in subsection 12(2)
[17]
Cheaptickets
argues that Justice Strayer failed to consider the application of subsection
12(2) of the Trade-Marks Act. Subsection 12(2) reads as follows (my
emphasis):
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12. (2) A trade-mark that
is not registrable by reason of paragraph (1)(a) or (b) is
registrable if it has been so used in Canada by the applicant or his
predecessor in title as to have become distinctive at the date of filing
an application for its registration.
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12.
(2) Une marque de commerce qui n’est pas enregistrable en raison de l’alinéa
(1)a) ou b) peut être enregistrée si elle a été employée au
Canada par le requérant ou son prédécesseur en titre de façon à être devenue
distinctive à la date de la production d’une demande d’enregistrement
la concernant.
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[18]
Emall
argues that subsection 12(2) may be invoked during the process of trade-mark
registration, but not during expungement proceedings. Emall submits that in
expungement proceedings the relevant provision is subsection 18(2), which reads
as follows (my emphasis):
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18. (2) No
registration of a trade-mark that had been so used in Canada by the
registrant or his predecessor in title as to have become distinctive at
the date of registration shall be held invalid merely on the ground that
evidence of the distinctiveness was not submitted to the competent authority
or tribunal before the grant of the registration.
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18. (2) Nul
enregistrement d’une marque de commerce qui était employée au Canada par
l’inscrivant ou son prédécesseur en titre, au point d’être devenue distinctive
à la date d’enregistrement, ne peut être considéré comme invalide pour la
seule raison que la preuve de ce caractère distinctif n’a pas été soumise à
l’autorité ou au tribunal compétent avant l’octroi de cet enregistrement.
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[19]
Subsection
18(2) makes available to the holder of a registered trade-mark a specific
defence in expungement proceedings which may come into play if the trade-mark has
acquired distinctiveness by the time the registration process was complete,
even if the Registrar of Trade-Marks was not given evidence of that fact.
[20]
The
consequence of Emall’s argument is that if Cheaptickets is unable to establish
distinctiveness as of the completion of the registration process as
contemplated by subsection 18(2), Cheaptickets would be barred from even
attempting to establish distinctiveness as of the commencement of that
process. Emall referred to no authority that would compel subsection 12(2) to
be construed in such a limited fashion, and I see no reason to accept that
interpretation. In my view, the existence of subsection 18(2) does not preclude
Cheaptickets from invoking subsection 12(2) during expungement proceedings.
[21]
Cheaptickets
is correct to say that Justice Strayer does not mention subsection 12(2). That
may have been an error or oversight on his part, or it may indicate that he
found subsection 12(2) not to be worthy of mention. In either case, the
omission is inconsequential. The record discloses no evidence that is
reasonably capable of supporting Cheaptickets’ submission that the trade-marks
had acquired distinctiveness as of the date on which the applications for
registration were filed.
[22]
Cheaptickets
points to paragraph 16 of Justice Strayer’s reasons as an indication that he
had in fact concluded that the trade marks were distinctive at the date of the
filing of the application for registration, because he refers to the absence of
evidence that they had ceased to be distinctive after that time. I am unable to
accept Cheaptickets’ interpretation of paragraph 16. As I read paragraph 16, it
is intended to explain that, because Justice Strayer had concluded that Emall’s
expungement application had succeeded on the basis of paragraph 18(1)(a),
it was not necessary to deal with the part of Emall’s expungement application that
relied on paragraph 18(1)(b). Justice Strayer then stated by way of obiter
dicta that the application based on paragraph 18(1)(b) would have
failed in any event for lack of evidence.
Separate consideration of the design mark
[23]
Cheaptickets
argues that Justice Strayer failed to consider the unique and distinctive
aspects of the CHEAP TICKETS AND TRAVEL & DESIGN mark separate and apart
from the CHEAP TICKETS mark. In my view there is no merit to this submission. The
challenge to the registrability of the trade-marks was based on the use of the words
“CHEAP TICKETS” as an integral part of Cheaptickets’ registered trade-marks. There
is no evidence that Cheaptickets has ever disclaimed, or indicated a
willingness to disclaim, the words CHEAP TICKETS as used in the CHEAP TICKETS
AND TRAVEL & DESIGN mark.
Conclusion
[24]
I
would dismiss this appeal with costs.
"K.
Sharlow"
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