Docket: A-449-15
Citation:
2016 FCA 302
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CORAM:
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TRUDEL J.A.
BOIVIN J.A.
RENNIE J.A.
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BETWEEN:
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DOMAINES
PINNACLE INC.
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Appellant
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and
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CONSTELLATION BRANDS INC., CONSTELLATION BRANDS QUÉBEC INC.,
CONSTELLATION BRANDS CANADA INC., SUMAC RIDGE ESTATE WINERY LTD., AND
FRANCISCAN VINEYARDS INC.
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Respondents
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Montréal, Quebec, on
November 28, 2016).
TRUDEL J.A.
[1]
The appellant appeals a decision rendered by the
Federal Court on September 16, 2015 (2015 FC 1083) in which Justice Gagné allowed
the respondent’s appeal of a decision rendered by the Trade-Marks Opposition
Board on September 16, 2013 (indexed as 2013 TMOB 153). The Federal Court quashed
the Board’s decision rejecting the respondent’s statement of opposition under
section 38 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act) on the
ground that the Board misapplied the Supreme Court’s decision in Masterpiece
Inc. v. Alavida Lifestyle Inc., 2011 SCC 27 (Masterpiece),
making its decision unreasonable.
[2]
For the reasons that follow, the appeal will be
allowed.
[3]
The appellant, Domaines Pinnacle Inc., is a
Quebec-based producer of apple-based alcoholic and non-alcoholic beverages and
foods (Affidavit of Mr. Charles Crawford, Appeal Book, Vol. 3, Tab 6E, p. 1185,
par. 4). The respondents are all subsidiaries of Constellation Brands Inc., a
US-based producer and distributor of wines (Affidavit of Ronald C. Fondiller,
Appeal Book, Vol. 1, Tab 5C, p. 93, par. 11).
[4]
On June 3, 2004, the appellant filed with the
Registrar of Trade-marks its application, number 1219008, to register the word
and design mark at issue in relation with the sale of apple-based alcoholic and
non-alcoholic beverages and other apple products:
[5]
On August 5, 2008, the respondents filed a
statement of opposition to the appellant’s application pursuant to section 38
of the Act on the grounds that the appellant’s mark was confusing with its own
mark, “Pinnacles”, registered
by Franciscan Vineyards Inc. in 2002 in relation with the sale of (grape) wine
(Affidavit of Ronald C. Fondiller, Appeal Book, Vol. 1, Tab 5C, p. 93, par.
10).
[6]
The Trade-Marks Opposition Board ultimately
concluded that confusion was unlikely to occur, taking into account the
language of subsection 6(2) of the Act, the factors enumerated in subsection
6(5), and relevant jurisprudence, including Masterpiece (par. 30-33).
The inherent distinctiveness of both marks was judged to be relatively weak
(par. 34), though the Board found that the appellant’s mark was more
distinctive than the respondents’ (par. 69). Furthermore, while there was a “fair degree of resemblance between the parties’ marks”,
the Board decided that the visual element of the two marks was sufficiently
different, and the two marks suggested different ideas.
[7]
On judicial review of the Board’s decision, the
Federal Court determined that the Board had erred in not considering the
potential uses that the respondents might have made of their registered mark,
as required by Masterpiece and the Federal Court’s decision in Les
Restaurants La Pizzaiolle Inc. v. Pizzaiolo Restaurants Inc., 2015 FC 240
(since affirmed in Pizzaiolo Restaurants Inc. v. Les Restaurants La
Pizzaiolle Inc., 2016 FCA 265) [Pizzaiolo] (par. 41-43).
[8]
On appeal of a judicial review decision by the
Federal Court, this Court must ask whether the Federal Court chose the correct
standard and applied it correctly. In effect, this Court performs a de novo
review of the administrative decision (Agraira v. Canada (Public Safety and
Emergency Preparedness), 2013 SCC 36 at par. 45-47, [2013] 2 S.C.R. 559). Both
parties agree that the decisions of the Board are reviewed on a standard of
reasonableness (Mattel Inc. v. 3894207 Canada Inc., 2006 SCC 22 at par.
40, 49 C.P.R. (4th) 321; Pizzaiolo).
[9]
Accordingly, this appeal must succeed unless the
respondents can convince this Court that the Board’s decision was unreasonable.
It is our opinion that the Board’s decision falls within the range of
reasonable outcomes open to it on the facts and the law. We are of the view
that the Federal Court effectively reviewed the Board’s interpretation and
application of Masterpiece on a correctness standard, which it was not
entitled to do. In effect, it did a de novo review even though it had
rejected the new evidence proposed by the respondents.
[10]
The Federal Court faulted the Board for not
having explicitly considered the possible uses open to the respondents of their
word mark, uses that could give their mark more of a flavour of “ice and winter”, as the appellant’s mark was
characterized by the Board (par. 43 of the Federal Court’s decision). However,
the Board did cite the Supreme Court’s decision in Masterpiece at the
beginning of its analysis of confusion under subsection 6(5) (par. 33 of the Board’s
decision). No more was required of the Board, so long as its application of
that precedent to the facts before it was not unreasonable. In our opinion, the
Board applied Masterpiece reasonably. It was not the task of the Board
to consider all potential and unidentified uses of the respondents’ word mark,
which had been characterized by the Board as weak.
[11]
We agree with the appellant, Domaines Pinnacle
Inc., that the full scope of the rights granted to the registered mark of the
respondents would not permit them to use the distinctive graphic elements—the
apple and snowflake design—that the Board identified as being central to the
distinctiveness of the appellant’s mark (appellant’s memorandum of fact and
law, par. 79-81, 87). In this vein, we are reminded of paragraph 75 of the
Board’s decision wherein a distinction is drawn between apple-based and
grape-based beverages. The design elements, once again the apple and snowflake,
are equally protected by copyright. In our opinion, even if the respondents chose
in the future to use the same font as the appellant, the Board’s finding on the
likelihood of confusion would remain a reasonable outcome, because the
combination of word and design in the appellant’s mark are sufficiently
distinctive. In this way, the case at bar is distinguishable from this Court’s
recent decision in Pizzaiolo.
[12]
Our conclusion also takes into account the
Board’s finding, referred to above, that neither mark had a high degree of
distinctiveness in terms of the words used, as “Pinnacle”, the most notable
element of both marks, is a commonly used term. Design and context must play a
greater role in distinguishing the respondents’ mark from the numerous other
registered marks in Canada that feature the word “Pinnacle” (Exhibit SN-3, Appeal
Book, Vol. 3, Tab 6F, p. 1278).
[13]
As a result, the appeal will be allowed, the
decision of the Federal Court, indexed as 2015 FC 1083, will be set aside and
rendering the decision that the Federal Court ought to have rendered, the
appeal from the decision of the Registrar of the Trade-marks, indexed 2013 TMOB
153, will be dismissed, the whole with costs in this Court and below.
"Johanne Trudel"
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