Date: 20170928

Docket: T-1813-16

Citation: 2017 FC 866

[ENGLISH TRANSLATION]

Ottawa, Ontario, September 28, 2017

PRESENT: The Honourable Mr. Justice Martineau

JUDGMENT AND REASONS

[1]  This involves an appeal filed under section 56 of the Trade-marks Act, RSC 1985, c. T-13 [the Act]. The applicant is contesting the merits of the decision by the Registrar of Trade-Marks [the Registrar] ordering that registration number LMC803, 955, which covers the ARTHRI-MED PLUS trademark [the Trademark] be expunged, pursuant to subsection 45(4) of the Act.

I.  Background

[2]  On August 9, 2011, the Trademark was registered in Canada for the product [translation] “liquid medication for treating arthritis” with regard to the registered owner, “Simon Zakini”. On August 10, 2011, the owner’s information on file were amended to show: “Simon Zakini, also doing business under the name of Promotions Démo”.

[3]  On March 13, 2015, the respondent submitted an application to the Registrar under subsection 45(1) of the Act, which allows any person who pays the prescribed fee to request that the Registrar give notice to the owner of the trademark to provide evidence of its use.

[4]  On March 19, 2015, the Registrar gave the registered owner the notice under subsection 45(1) of the Act, requiring him to show by means of an affidavit or a statutory declaration the use of the Trademark between March 19, 2012 and March 19, 2015 [the period in question], otherwise the registration would be expunged.

[5]  In response to that notice, on March 27, 2015, the registered owner submitted a statutory declaration from his representative, Melvin Dionne, in which he affirmed that the Trademark was [translation] “currently used in Canada for the product specified by the registration”, as well as two invoices dated August 15, 2013 and March 13, 2015, issued by “Laboratoire Sol-Labo Inc.” to the corporation “Promotions Multidemos”, and on which the Trademark’s name appears.

[6]  On September 14, 2015, the respondent submitted written submissions to the Registrar in which she argued that the Trademark should be expunged because the declaration by the applicant’s representative and the supporting documents do not show any use of the Trademark within the meaning of subsection 4(1) of the Act, nor a use by the owner or on his behalf, nor a use during the period in question, nor a use with respect to the product.

[7]  In response to these submissions, the registered owner attempted to submit additional evidence. However, the Registrar refused the additional evidence in a letter dated December 17, 2015, due to a late submission. The Registrar also confirmed that this submission would violate the expeditious and summary nature of the procedure set out in section 45.

[8]  On July 27, 2016, the Registrar rendered a decision, ordering that the Trademark be expunged and sent a notice dated August 22, 2016, expunging the Trademark.

[9]  On October 24, 2016, the applicant submitted this appeal to our Court under section 56 of the Act. On November 4, 2016, the respondent appeared on record, announcing her intention to contest the application.

[10]  On January 25, 2017, the applicant served and filed the affidavits of Simon Zakini and Jean-Christophe Doublet [additional evidence].

[11]  On May 11, 2017, the Court adjourned until June 29, 2017, upon the respondent’s request so that she had time to serve and file her motion record. However, the respondent did not file any motion record or make any oral submissions to the Court during the appeal hearing on September 25, 2017.

II.  Analysis

[12]  To comply with the requirement of section 45 of the Act, the owner must show that it used the Trademark with respect to each of the goods specified in the registration during the period in question. The evidence must show that the Trademark was used by the registered owner directly or through licence holders and/or distributors. The Trademark may have been used by another person whose use accrued to their benefit (Spirits International BV v. BCF SENCRL, 2012 FCA 131 at para 7, [2012] DTC 526 (QL)). It is not necessary to produce a formal licensing agreement to prove the existence of a licensing agreement (3082833 Nova Scotia Company v. Lang Michener LLP, 2009 FC 928 at para 32, [2009] DTC 1142 (QL)). The latter may be inferred from the facts.

[13]  Section 4 of the Act defines “use” as follows:

[14]  The procedure set out in section 45 must be simple and expeditious. The threshold required to establish the use of a trademark within the meaning of section 4 is quite low (Uvex Toko Ltd v. Performance Apparel Corp, 2004 FC 448 at para 38, 249 FTR 105). Prima facie evidence of use will be acceptable (for example, see 1459243 Ontario Inc v. Eva Gabor International, Ltd, 2011 FC 18 at para 5, [2011] DTC  27 (QL)).

[15]  The Registrar’s main reasons for expunging the Trademark can be found in the excerpt below:

[TRANSLATION]

[17]  First, there is nothing to indicate that the products sold by Laboratoire are the Products. As for the transfer of ownership, these invoices prove a transfer of ownership from Sol-Labo to Multidemos. These two invoices do not show in any way a transfer of ownership from the registered owner to a third party.

[18]  In addition, Mr. Dionne did not explain the relationship between the registered owner and Multidemos. I reiterate that the registered owner is Simon Zakini, also doing business under the name of Promotions Démos. There is no evidence on the record suggesting that Multidemos is a licensee of the Trademark under a licensing agreement with the registered owner.

[19]  Another important point: Mr. Dionne did not inform us of how the Trademark appears on the Products when their ownership is transferred.

[20]  Even if I considered the Sol-Labo invoices as being evidence of the Trademark’s use in association with the Products, I have no evidence that these invoices accompanied the Products during upon their delivery.

[21]  Finally, under the name ‘Melvin Dionne’ in the statutory declaration, there is the note ‘rep for service’. I assume that this means ‘representative for service’, because on the record, in fact, Mr. Dionne is identified as the representative for service for the registered owner’s account. However, being the representative for service does not authorize Mr. Dionne to attest to the use of the Trademark for the registered owner’s account, unless he has personal knowledge of the facts described in his statutory declaration. There is no confirmation in this regard in his statutory declaration.

[22]  All these gaps and questions, which are still unanswered, are sufficient to conclude that the registered owner has not proved that he used the Trademark in Canada during the period in question in association with the Products within the meaning of subsection 4(1) of the Act. Furthermore, the registered owner has not provided factual evidence that might constitute special circumstances within the meaning of subsection 45(3) of the Act justifying the non-use of the Trademark during the period in question.

[23]  For all these reasons, I find that the registration of the Trademark must be expunged from the register.

[16]  In the case at hand, as permitted by subsection 56(5) of the Act, the applicant submitted to the Court record considerable additional evidence in support of his appeal requesting that the Registrar’s decision be set aside:

• a) The applicant’s affidavit, in which he attests to having used in the Trademark associated with the Product during the period in question, directly and/or through holders and distributors (paragraph 8). However, he affirms in that document that the promoted and sold the Product associated with the Trademark through Corporation 9253-1979 Québec Inc. [the Corporation] after it was constituted on October 19, 2011. He affirms in paragraphs 14 and 15 of his affidavit that he controls 100% of the Corporation, and that he is the sole director, shareholder, and representative since it was incorporated. He also explains in the affidavit that the Corporation conducts business most often under the company name ‘Promotions Multi Demo’, but that it also uses the company names ‘Promo Demo’ and ‘Promotions Démo’ (paragraph 22);

• b) The following exhibits support the applicant’s affidavit:

1. Exhibit SZ-3: Photographs of the Product. The name of the Trademark can be clearly seen on the label. In paragraph 10 of his affidavit, the applicant states that this is how the Product was sold to consumers throughout the period in question;

2. Exhibit SZ-5: The certificate of incorporation for corporation 9253-1979 Inc. indicating Promotions Multidemos as the trade name. Simon Zakini appears as the registered owner on the certificate;

3. Exhibit Sz-6: An extract from the Business Register in connection with the abovementioned corporation. Simon Zakini appears as the sole shareholder and director on the extract.

4. Exhibits SZ-9 to SZ-17: Space rental contracts dated from 2012 to 2015. The Trademark and names of Simon Zakini and Promotions Multidemos are listed on it as parties to the contract. The applicant affirms in paragraphs 24 to 25 of his affidavit that he used these spaces during trade shows and fairs to sell the Product. The applicant affirms in paragraphs 28 and 29 of his affidavit that the in-person sales of the Product took place during those trade shows and fairs and that he was at each one;

5. Exhibit SZ-18: Photographs of kiosks bearing the Trademark that were set up at those trade shows and fairs;

6. Exhibit SZ-19: Copies of sales invoices of the Product to Médialibs by Simon Zakini, dated between July 1, 2012 and March 10, 2015. The applicant affirms in paragraph 32 of his affidavit that the corporation Médialibs has acted as distributor of the Product since December 3, 2010. The applicant affirms that he authorized the president of that company, Jean-Christophe Doublet, to register the domain www.arthrimed-plus.ca in order to sell the Product there (paragraph 33). In paragraph 36 of his affidavit, the applicant confirms that he had control over the presentation of the Product and the Trademark on the site;

7. Exhibit SZ-20: Invoices issued by Promotions Multidemos to Nature Vibe and Whites Road. The Trademark is indicated on the invoices. The applicant affirms in paragraph 37 of his affidavit that he sold several units of the Product to the distributors, Nature Vibe and Whites Road, on July 11, 2014 and April 5, 2013, respectively;

• c) Jean-Christophe Doublet’s affidavit, in which he affirms that he conducted business through the corporation Médialibs, a company that was incorporated on February 28, 2005, under the initial name of Trigramme Inc. (paragraph 1). He affirms that he is the president of this corporation, which offers e-commerce solution services for the sale of products and services online, among other things (paragraph 2). He explains that the applicant approached him on December 3, 2010, to use the services of Médialibs to sell the natural health product used to treat arthritis, known under the trademark ArthriMED Plus (paragraph 3). Thus, he attests that he registered the domain name www.arthrimed-plus.ca and that he put it online on December 3, 2010 (paragraphs 5 and 6). He certifies that his company acts as the main distributor of the Product exclusively through sales on this site, and that it also receives payment from customers (paragraph 11). However, he affirms that Mr. Zakini has always been very involved in the various aspects of managing the site and participated in important decisions (paragraph 12). More generally, he affirms that Mr. Zakini used the Trademark associated with the Product at some point during the period in question, at least, and not exclusively, through his distribution company for the Product (paragraphs 8 and 9);

• d) The following exhibits support Jean-Christophe Doublet’s affidavit:

1. Exhibit JCD-3: Photographs of the Product bearing the Trademark on the label;

2. Exhibit JCD-6: Notice of receipt of payment by Jean-Christophe Doublet from a woman named Monique Valois. “Arthri-med-plus” can be seen in the description of the product sold;

3. Exhibit JCD-8: Samples of PayPal payment notifications received by Jean-Christophe Doublet from several buyers. “ArthriMED-plus” can be found in the description of the Product;

4. Exhibit JCD-9: Sales invoices of products bearing the description “ARTHRIMED-PLUS”. Some invoices list the name of Simon Zakini in the column “sold by”. In paragraph 14 of his affidavit, Mr. Doublet affirms that Mr. Zakini personally and/or through Promotions Multi Démos sold numerous bottles of the Product to Médialibs during the period in question so that it could sell the Product on its website;

5. Exhibit JCD-10: Sales report covering the period from November 4, 2013 to March 29, 2015. Mr. Doublet certifies that he sold 309 units of the Product this way, through the website, during the period, most of which were in Canada;

6. Exhibit JCD-12: Promotional cards for the Product using the Trademark. Mr. Doublet affirms that when delivering the Product, the Trademark is indicated on the label attached to the vial of the Product and on the promotion card for the Product (paragraph 16). The promotional cards were used before and after the beginning of 2014, respectively.

[17]  When an applicant appeals a decision by the Registrar under section 56 of the Act, and submits new conclusive evidence—which it is in this case—the case must be heard de novo, in accordance with the standard of review of the correct decision (Molson Breweries v. John Labatt Ltd., [2000] 3 FCR 145, 2000 CanLII 17105 at para 51). I am satisfied in the case at hand that the additional evidence submitted to our Court is sufficient to conclude that the Trademark was used by the owner directly and through licence holders and distributors during the period in question.

[18]  The additional evidence shows the use of the Trademark in association with the Product during the period in question. This use was done in the normal course of business, since the goal of using the Trademark was to sell products to clients during trade shows and fairs, as well as through distributors on the website. The evidence confirms this use in the normal course of business. The invoices produced also show that there were many sales of the Product during the period in question. It is clear that the Trademark was used in association with the Product because it is directly present on the labels on the vial of the Product that is sold to consumers. This is the case regardless of how the Product is sold (during trade shows and fairs, online, etc.). The Trademark is in fact affixed to the Product during the transfer of ownership. The photographs submitted as evidence confirm these claims.

[19]  The Act also requires that the Trademark be used by the owner directly or through licence holders and distributors. I am satisfied that the applicant has met his burden of proof in this respect. Indeed, the space rental contracts and the applicant’s affidavit show that it is the registered owner who personally profits from the sales during trade shows and fairs. Moreover, the evidence is clear in that the registered owner conducts business with various distributors, including Médialibs, in order to sell the product online, and that it benefitted from those sales. The invoices show that Mr. Zakini sold units of the Product to Médialibs, which in turn distributed it. The owner’s name can be found on some of these invoices. The registered owner maintains control over the distribution operations. The applicant conducts business through the company Promotion Démos, which constitutes an extension of himself. There is an implicit licensing contract between the registered owner and the company.

[20]  Given the additional evidence on the Court record, the Registrar’s decision to expunge the Trademark is incorrect.

3. Conclusion

[21]  For the foregoing reasons, the applicant’s appeal is allowed and the Registrar’s decision to expunge the Trademark is set aside. The applicant is entitled to costs of $2,250.00 from the respondent.

JUDGMENT in T-1813-16

THE COURT’S JUDGMENT is that:

1. The applicant’s appeal is allowed;

2. The decision rendered by the Registrar on July 27, 2015, to expunge the ARTHRI-MED PLUS trademark is set aside; and

3. The applicant is entitled to costs of $2,250.00 from the respondent.

“Luc Martineau”

FEDERAL COURT

SOLICITORS OF RECORD

APPEARANCES:

SOLICITORS OF RECORD: