Ottawa, Ontario, November 28, 2005
PRESENT: THE HONOURABLE MADAM JUSTICE HANSEN
BETWEEN:
WING WAH FOOD MANUFACTORY PRODUCTS INC.
and
CHINA BRANDS FOOD PRODUCTS INC.
REASONS FOR ORDER AND ORDER
[1] Wing Wah Manufactory Products Inc. (Applicant) appeals the December 13, 2004 decision of the Registrar of Trade-marks (Registrar) rejecting the Applicant's opposition to Application No. 896,710 to register the trade-mark PEONY BRAND & Design (PEONY BRAND) filed by China Brands Food Products Inc. (Respondent).
BACKGROUND
[2] On November 19, 1998, the Respondent filed an application to register the PEONY BRAND trade-mark in association with food colour solutions based on the use of the mark in Canada since 1979. The Applicant filed a statement of opposition on January 24, 2000. On May 4, 2001, the Respondent amended the application to state that the applied for trade-mark had been used in Canada by the Respondent or its predecessor in title, China Brand Foods Co., since 1979.
[3] The Applicant opposed the application on a number of grounds. The only ground relevant to this appeal is that the application did not comply with subsection 30(b) of the Trade-marks Act, R.S.C. 1985, c. T-13 (the "Act"). The Registrar framed this ground of opposition as follows:
The first aspect is the opponent's contention that the applicant cannot claim a date of first use since 1979 since there is no evidence that the applied for trade-mark was transferred to the applicant when it was incorporated in 1986.
[4] The evidence before the Registrar consisted of the affidavit of Mr. Lee, President of the Respondent, and the transcript of Mr. Lee's cross-examination. In his reasons, the Registrar noted the following with respect to this ground of opposition:
- The Respondent was incorporated in 1986 and is the successor to the business originally begun by China Brands Foods Co. in 1978.
- Mr. Lee and Mr. Kong were partners in China Brands Foods Co.
- The partnership apparently ceased when Mr. Kong retired and the business was transferred to the Respondent.
- The applied for trade-mark was designed in 1978.
- An invoice for the business dated September 1979 bore the trade-mark.
- The transcript of the cross-examination reveals that Mr. Lee has some difficulty with the English language and did not understand some questions.
- When asked about an assignment from the partnership to the Respondent and Mr. Lee said there was no document, it appeared that he did not understand the question.
- Since Mr. Lee was a partner in the predecessor partnership and the President of the Respondent, it seemed likely that there was a transfer of the partnership's business to the Respondent in 1986 either orally or in writing.
[5] The Registrar reached the following conclusion on this ground:
The opponent has relied on Mr. Lee's negative answer on cross-examination regarding the existence of an assignment document. However, as discussed, it is apparent that Mr. Lee did not understand all of the questions posed to him. More importantly, the evidence establishes that China Brands Food Products Inc. was incorporated to take over the business of the partnership China Brands Food Co. I find, on a balance of probabilities, that a transfer of the business (including the applied for trade-mark) did, in fact, take place.
[6] The only issue on this appeal is whether the Registrar erred in making this finding.
STANDARD OF REVIEW
[7] In Molson Breweries v.John Labatt Ltd., [2000] 3 F.C. 145 (F.C.A.), Justice Rothstein, at paras. 46 and 51, stated the following regarding the standard of review of a decision of the Registrar:
Because of the opportunity to adduce additional evidence, section 56 is not a customary appeal provision in which an appellate court decides the appeal on the basis of the record before the court whose decision is being appealed. A customary appeal is not precluded if no additional evidence is adduced, but it is not restricted in that manner. Nor is the appeal a "trial de novo" in the strict sense of that term. ...
... 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.
[8] Although a new affidavit was filed on this appeal, both parties agree that the content of this affidavit is substantially the same as the affidavit filed at the time of the initial proceeding. Accordingly, both parties agree and I accept that the standard of review in this case is reasonableness simpliciter.
SUBMISSIONS OF THE PARTIES
[9] The Applicant submits that there is no evidence to support the Registrar's finding that a transfer of the business, including the applied for trade-mark, took place. In particular, there is no evidence of an assignment or transfer of the trade-mark from the former partnership to the Respondent. The Applicant points to the transcript of cross-examination where Mr. Lee responded "No, no. Nothing" when he was asked if there is "any document that transferred all of the assets."
[10] The Applicant maintains that if there was a verbal transfer, the Respondent should have submitted some positive affirmation of the fact that the transfer occurred, for example, an affidavit of Mr. Lee or Mr. Kong deposing that there was a verbal transfer.
[11] The Applicant also points out that the Province of Ontario Partnership Registration for China Brands Foods Co. indicated that the partnership was registered on July 19, 1978 and that it expired on July 18, 1983. Based on this evidence, the Appliant argues that since the partnership dissolved in 1983, there was no partnership in existence to transfer the trade-mark.
[12] The Applicant submits that this case presents a "peculiar evidentiary situation." Relying on the decision in John Labatt Ltd. v. Molson Companies Ltd. (1990), 36 F.T.R. 70, the Applicant argues that although there is an evidentiary burden on an applicant to lead evidence in support of the assertion of non-compliance, where the applicant has particular information, the onus is on the applicant to bring the evidence forward. If the applicant does not do so, then an adverse inference may be drawn. The Applicant maintains that this Court should draw an adverse inference from the Respondent's failure to file an affidavit on this appeal. The Applicant also relies on the decision in Sim & McBurney v. Majdell Manufacturing Co. Ltd. (1986), 11 C.P.R. (3d) 306 (F.C.) for the proposition that there is an onus on the Respondent to file further evidence on appeal regarding the transfer of trade-mark from the partnership to the Respondent.
[13] Finally, the Applicant argues that the Federal Court Rules, 1998 apply to proceedings before the Registrar. Rule 245 requires a person being examined to correct or to complete an answer where the answer is no longer correct or complete. The Applicant submits that the Respondent has done nothing to complete the answer given by Mr. Lee in his cross-examination regarding the Applicant's question of whether there was any assignment from the partnership to the company.
[14] The Respondent submits that if one has regard to the totality of the evidence and the inferences drawn from the evidence, the Registrar's finding is not unreasonable. As well, the Respondent argues that there is nothing to correct in the transcript because Mr. Lee provided complete or correct answers in the cross-examination.
ANALYSIS
[15] Before turning to the specific arguments advanced by the Applicant, it should be noted that there is no requirement under subsection 48(1) of the Act that a transfer of either an unregistered or registered trade-mark must be in writing.
[16] Although there is no documentary evidence of the transfer of the rights in the trade-mark from the partnership to the corporation, in my opinion, it was reasonably open to the Registrar to find that there was a transfer of the partnership's business, including the rights in the trade-mark, to the Respondent at the time of the incorporation. The trade-mark application was amended to identify the partnership as the predecessor in title and Mr. Lee deposes that the partnership was the predecessor of the Respondent. Mr. Lee states in his affidavit that the Respondent and its predecessor have been "producing and distributing its own blend of food colour solutions and sauces since 1978". The Ontario Partnership Registration indicates a registration date of July 1978. It would appear from Mr. Lee's cross-examination that the partnership ceased to exist at the time the Respondent was incorporated. With regard to the product label, Mr. Lee was asked on cross-examination when he started using the product label with the corporate name rather than the partnership name. Mr. Lee responded that when the old labels were used up, he changed it to the new company name.
[17] With respect to the Applicant's argument that the partnership could not have transferred the trade-mark to the Respondent because the partnership had ceased to exist, in my opinion, the failure to comply with the administrative requirement concerning registration under the provincial legislation did not affect the existence of the partnership.
[18] I also reject the Applicant's argument that an adverse inference should be drawn from the Respondent's failure to file further evidence on this appeal. Subsection 56(5) of the Act is a permissive provision allowing parties to adduce additional evidence before this Court and does not impose any obligation on either party to submit further evidence on appeal. There was ample evidence on which the Registrar could conclude that the Respondent was incorporated to carry on the business of the partnership. Regarding the Applicant's assertion that an affidavit from Mr. Lee's partner should have been filed, Mr. Lee testified on cross-examination that he was a silent partner and not involved in the operations of the partnership.
[19] Further, the decision in Sim & McBurney, supra, relied on by the Applicant has no applicability to the facts of the present case. That case concerns an expungement proceeding under section 45 of the Act where only the registered owner of the trade-mark is permitted to file affidavit evidence and cross-examination on the affidavit is not permitted. Where the owner of the trade-mark files a vague affidavit regarding use and does not file further evidence on appeal, an adverse inference may be drawn in those circumstances. In the present case, there is no uncertainty that would call for additional evidence.
[20] Finally, although the Applicant may have been dissatisfied with Mr. Lee's answers on cross-examination, this is not a situation where an answer was "no longer correct or complete".
[21] For these reasons, the appeal is dismissed with costs to the Respondent.
ORDER
THIS COURT ORDERS that the appeal is dismissed with costs to the Respondent.
JUDGE
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-262-05
STYLE OF CAUSE: WING WAH MANUFACTORY PRODUCTS INC.
And
CHINA BRANDS FOOD PRODUCTS INC.
DATE OF HEARING: November 14, 2005
APPEARANCES:
Kenneth d. McKay
Mark L. Robbins
SOLICITORS OF RECORD:
SIM, LOWMAN, ASHTON & McKAY LLP
Barristers & Solicitors
Toronto, ON
BERESKIN & PARR
Barristers & Solicitors
Toronto, ON