Date: 20000907
Docket: T-2351-93
BETWEEN:
PEPPER KING LTD.
Plaintiff
- and -
SUNFRESH LIMITED
LOBLAWS INC.
LOBLAW COMPANIES LIMITED
Defendants
REASONS FOR JUDGMENT
DAWSON J.
[1] Pepper King Ltd. ("Pepper King") owns the trade mark VOLCANO. Since at least August of 1991, the trade mark has been used by Pepper King, or its original principal William Small, in association with a hot pepper sauce.
[2] Since May of 1992, the defendants have promoted and sold salsa in jars with labels which bear the word "volcano".
[3] Pepper King asserts that the defendants' use of the word "volcano" infringes on its trade mark.
[4] By virtue of an order made by McKeown, J., the issues in this action were bifurcated so that any issue as to damages and/or accounting of profits is to be determined separately, and after the trial of all issues relating to the likelihood of confusion and invalidity of the trade mark registration.
PRELIMINARY MATTERS
[5] At the commencement of the trial, two preliminary matters were raised by Pepper King.
[6] The first matter related to the scope of its claim. Pepper King, without prior notice to the defendants, advised that it would not be proceeding with its allegations that the defendants:
| (i) depreciated the value of the goodwill attached to the VOLCANO trade mark, contrary to section 22 of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended, ("Act"); |
| (ii) directed public attention to their salsa in a way to cause, or likely to cause, confusion between the two products, contrary to subsection 7(b) of the Act; and |
| (iii) passed off their salsa as the Pepper King's product, contrary to subsection 7(c) of the Act. |
Those matters are therefore withdrawn.
[7] The second matter was a request to withdraw three admissions which Pepper King was deemed to have made as a result of both its response to a Request to Admit which was served on it pursuant to Rule 256 of the Federal Court Rules, 1998, SOR/98-106, and an order made by McKeown, J. to the effect that Pepper King was deemed to have admitted facts 1 to 79 as set out in the Request to Admit.
[8] For reasons given orally at the trial, that motion for leave to withdraw three admissions was denied.
THE FACTS
[9] Pepper King is a small Canadian corporation. It was originally formed by William Small. Mr. Small died in 1996 and since then Pepper King has been operated by his widow, Nellie Small, with help from other family members.
[10] Mrs. Small testified that by late 1989 or early 1990, her husband had developed the hot pepper sauce that leads to this claim. I am told it is extremely hot.
[11] Mrs. Small stated that after initially giving the sauce away, her husband began to sell it. The product was sold at first in preserving jars with hand-written adhesive preserve labels which read "VOLCANO HOT" or "VOLCANO HOT PEPPER SAUCE".
[12] In the beginning, sales were made largely by Mr. Small's nephew, Richard Downey, who sold the pepper sauce to his fellow workers at the General Motors plant in Oshawa, Ontario and by Mr. and Mrs. Small who sold the pepper sauce at the Stouffville Flea Market. Later, the pepper sauce was also sold by Mr. Downey and the Smalls to a few outlets for re-sale at retail, and to restaurants, taverns and the like for the restaurants' or taverns' own use in sauces and recipes.
[13] From August 13, 1991 until sometime in 1992, Pepper King sold its pepper sauce with a printed label "HOME MADE VOLCANO HOT PEPPER SAUCE" "KEEP REFRIGERATED". Thereafter, four different types of printed labels were used over time which referred to the sauce as "VOLCANO HOT PEPPER SAUCE" or "VOLCANO HOT HOT PEPPER SAUCE". The three most recent versions of those labels also listed the ingredients of the sauce. It is formally admitted in this action that the public would perceive the words "VOLCANO HOT" as a single trade mark on those printed labels.
[14] Sales were not significant. The total sales revenue up to mid-May 1992, when sale of the defendants' salsa commenced, was $21,911. Of that total revenue, $17,705 was generated by sales at the Stouffville Flea Market and at most $2,103 was generated from sales for re-sale at retail.
[15] On August 26, 1992, Mr. Small filed an application to register the trade mark VOLCANO. The trade mark was registered on August 20, 1993 and designated as TMA 415, 846. On September 2, 1993, Mr. Small assigned his rights in the VOLCANO trade mark and registration to Pepper King.
[16] By the date on which the statement of defence in this action was filed, February 16, 1994, Pepper King's total sales revenue was a maximum of $25,780. Of that, sales for re-sale at retail produced at most revenue of $4,037.50.
[17] Mrs. Small was uncertain about sales volumes in 1994 and later years.
[18] Other than hot pepper sauce sold at the Stouffville Flea Market, the pepper sauce was sold in 250 ml clear glass jars.
[19] The plaintiff's hot sauce was never advertised by Mr. Small or Pepper King. The scope of the operation is reflected by the fact that Mr. Small never reported sales of his hot pepper sauce in his income tax returns and the fact the company has yet to file tax returns.
[20] The defendants ("Loblaws") are all related companies. Loblaw Companies Limited, the parent company, is Canada's largest food distributor.
[21] The salsa at issue which Loblaws initially imported into Canada and sold was labelled "All-Natural Volcano Desperately Hot Salsa Picante". It has also been labelled "Extra Chunky Volcano Salsa Picante Desperately Hot".
[22] Loblaws advertised and sold their salsa throughout Canada. The following facts were admitted.
[23] Loblaws, since May of 1992, has sold its salsa in 850 ml glass jars with labels which include the word "volcano". The salsa labelled with the word "volcano" is part of a line of salsa products having different degrees of hotness or spiciness. The degrees sold by Loblaws are "extra mild", "mild", "hot" and "volcano".
[24] At all times Loblaws' salsa labelled with the word "volcano" was displayed for sale on shelves in retail stores. The jars were immediately adjacent to, or above, or below, the other Loblaws' salsa products having other hotness levels.
[25] Loblaws owns the trade marks LA ELECCION DEL PRESIDENTE, PRESIDENT'S CHOICE, PRESIDENT'S CHOICE in Design, PC and PC Script.
[26] The trade marks PRESIDENT'S CHOICE and PRESIDENT'S CHOICE in Design, PC and PC in Script were, as of May 1992, well-recognized across Canada. It is admitted that they are recognized in southern and central Ontario by virtually all retail shoppers as being private label trade marks of Loblaws.
[27] Loblaws' salsa labelled with the word "volcano" has been sold only through Loblaws' normal wholesale/retail distributing channels for re-sale to the general public.
[28] Loblaws' salsa described as "volcano" has always been sold with the trade mark LA ELECCION DEL PRESIDENTE appearing on the labels in the same script as the PRESIDENT'S CHOICE in Design trade mark. Since about February 1994 Loblaws' salsa labelled with the word "volcano" has also been sold with the PC Script trade mark on the label.
[29] It is admitted that:
| 61. A reasonable shopper in mid-May 1992 and at all times subsequent thereto, shopping in a Loblaws or Loblaws-affiliated store, would be aware of the trade marks PRESIDENT'S CHOICE and the PRESIDENT'S CHOICE in Design Script..., and would reasonably conclude that a Mexican-style product such as salsa that had the trade mark LA ELECCION DEL PRESIDENTE in the same script as PRESIDENT'S CHOICE in Design trade mark, would most likely be a private label product which was being offered for sale by the same entity which had previously offered for sale, PRESIDENT'S CHOICE products. |
[30] Mr. and Mrs. Small first learned of Loblaws' salsa bearing the word "volcano" in June of 1992 from a Loblaws' Insider's Report brochure. At that time they had already made inquiries of a trade mark agent about the availability of a VOLCANO trade mark.
[31] After learning of Loblaws' use, the Smalls pursued registration of their trade mark.
[32] The same day the VOLCANO trade mark was registered, August 20, 1993, counsel acting for Pepper King and the Smalls sent a cease and desist letter to Loblaws. That letter was the first effort made on Pepper King's behalf to put Loblaws on notice of any claim and the first notice of any objection with respect to the word "volcano". This letter was the first notice each defendant had of the VOLCANO trade mark and Pepper King's claim.
[33] It is admitted that Mr. Small intentionally refrained from putting Loblaws on any notice of any objection regarding the use of the term "volcano" on the advice of his trade mark agent. Mr. Small's trade mark agent advised that if Loblaws were put on notice Loblaws could oppose, and thereby delay and possibly prevent, the registration of the VOLCANO mark by Mr. Small.
[34] The statement of claim which commenced this action was issued on October 1, 1993.
THE RESPECTIVE POSITIONS OF THE PARTIES
[35] Pepper King's claim is simple and is based upon section 19 and subsection 20(1) of the Act. Those provisions are as follows:
| 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. 20. (1) The right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name, but no registration of a trade-mark prevents a person from making (a) any bona fide use of his personal name as a trade-name, or (b) any bona fide use, other than as a trade-mark, (i) of the geographical name of his place of business, or (ii) of any accurate description of the character or quality of his wares or services, in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade-mark. |
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. 20. (1) Le droit du propriétaire d'une marque de commerce déposée à l'emploi exclusif de cette dernière est réputé être violé par une personne non admise à l'employer selon la présente loi et qui vend, distribue ou annonce des marchandises ou services en liaison avec une marque de commerce ou un nom commercial créant de la confusion. Toutefois, aucun enregistrement d'une marque de commerce ne peut empêcher une personne_: a) d'utiliser de bonne foi son nom personnel comme nom commercial; b) d'employer de bonne foi, autrement qu'à titre de marque de commerce_: (i) soit le nom géographique de son siège d'affaires, (ii) soit toute description exacte du genre ou de la qualité de ses marchandises ou services, d'une manière non susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à la marque de commerce. |
| [36] In relying upon subsection 20(1) of the Act, Pepper King submits that the respective pepper sauce and salsa products are substantially identical and that the same VOLCANO trade mark is used. It follows, Pepper King submits, that Loblaws are selling, distributing or advertising their salsa wares in association with a confusing trade mark. |
| [37] In response, Loblaws advances three grounds of defence. |
| [38] First, they state that they never used the word "volcano" as a trade mark. |
| [39] Second, Loblaws submit that even if there was, on their part, use as a trade mark, their use was not likely to cause confusion. |
| [40] Third, Loblaws say that, in any event, Pepper King's trade mark was not distinctive as of the relevant date and therefore its trade mark registration is invalid. This latter point is advanced by way of a defence and also a counterclaim. Loblaws seek in the counterclaim an order that the trade mark registration TMA 415,846 of the trade mark VOLCANO be expunged from the register of trade marks. |
| THE MATTERS AT ISSUE |
| [41] Pepper King is the owner of the registered trade mark VOLCANO. The word "volcano" appears on Loblaws' salsa product. |
| [42] Therefore, because Pepper King has limited its claim to actual infringement under section 19 of the Act, and deemed infringement under subsection 20(1) of the Act, the matters to be determined in this action are: |
| (i) Did Loblaws use the word "volcano" as a trade mark?; |
| (ii) If Loblaws used the word "volcano" as a trade mark, was that use likely to cause confusion?; and |
| (iii) Was Pepper King's mark not distinctive as of the relevant date, so that its trade mark registration is invalid? |
| ANALYSIS |
| (i) Did Loblaws use the word "volcano" as a trade mark? |
| [43] For the purpose of this proceeding, the relevant part of the definition of a trade mark as found in section 2 of the Act is: |
| (a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others. |
a) marque employée par une personne pour distinguer, ou de façon à distinguer, les marchandises fabriquées, vendues, données à bail ou louées ou les services loués ou exécutés, par elle, des marchandises fabriquées, vendues, données à bail ou louées ou des services loués ou exécutés, par d'autres. |
[44] For use of a trade mark to violate section 19 of the Act, the use made of the trade mark must be use as a trade mark. Thus, in Clairol International Corp. v. Thomas Supply & Equipment Co. (1968), 55 C.P.R. 176 (Exchequer Court of Canada) at pages 192-195 it was held that where the use of a trade mark was not for the purpose of distinguishing the goods as goods of the defendant, there was no breach of section 19 of the Act.
[45] Subsection 20(1) of the Act has similarly been found to require that the use made of a trade mark must be for the purpose of distinguishing goods as goods of the defendant for there to be any deemed infringement. See: Cie Générale des Établissements Michelin v. C.A.W. - Canada (1996), 71 C.P.R. (3d) 348 (T.D.). Thus, arises the necessity of determining whether Loblaws' use of the word "volcano" was use as a trade mark.
[46] The plaintiff, in submitting that the word "volcano" was used by Loblaws as a trade mark, made the following four arguments:
| (i) During the period from March to July of 1992, an employee of Loblaws requested a trade mark search for the trade mark "VOLCANO", noting that Loblaws wished to use the mark for salsa. A response was received to the effect that the word appeared to be available for use and registration; |
| (ii) In a statement of opposition filed with the Registrar of Trade marks in respect of a trade mark application made by the plaintiff in respect of VOLCANO HOT & DESIGN, Loblaws Inc. stated that it had "sold a salsa product since June 1992 which it describes as `VOLCANO DESPERATELY HOT SALSA'". |
| (iii) Loblaws uses the word "volcano" on a label associated with the sale of hot peppers. In that instance, Loblaws acknowledge that their use of VOLCANO is a trade mark use. Pepper King says that the two situations cannot be distinguished; and |
| (iv) Pepper King says the express wording of the Loblaws' label shows that the word "volcano" is used to identify Loblaws' product. |
[47] I do not find any of the first three arguments advanced by Pepper King to be persuasive.
[48] With respect to the first argument regarding the trade mark search, there is no evidence that thereafter Loblaws applied for registration of the mark. Further, paragraph 46 of the Request to Admit, which Pepper King is deemed to have admitted, states that if Loblaws had intended to use the word "volcano"as a trade mark, it would have been identified on the label as a trade mark. It was not so identified.
[49] More importantly, what is determinative of the issue is not the apparent intent of Loblaws' employees, but rather the message given to the public by the label. See: Apotex Inc. v. Ciba-Geigy Canada Ltd., [2000] F.C.J. No. 508, T-2483-97 (April 14, 2000) (T.D.). This issue is discussed below.
[50] Similarly, with respect to the second argument, the position taken by Loblaws Inc. in a statement of opposition is of far less importance than the message given to the public by its use of the word "volcano".
[51] Moreover, in California Fashion Industries Inc. v. Reitmans (Canada) Ltd. (1991), 38 C.P.R. (3d) 439 (T.D.), Cullen, J. characterized similar unsubstantiated allegations in opposition proceedings as having little relevance to the question of confusion. I, too, give little weight to an allegation of a legal conclusion which was not supported by affidavits or evidence, and which was never adjudicated upon. There was nothing in Loblaws' statements which constituted an admission that it used the word "volcano" as a trade mark.
[52] The plaintiff seeks to distinguish the California Fashion Industries case and relies instead upon the decision of the Supreme Court of Canada in Johnson v. Marketing Int., [1980] 1 S.C.R. 99. I find the Johnson case is not of assistance because the case was premised upon the specific fact situation then before the Court where it was found that two trade marks, not appreciably different from one another, could not be both confusing and non-confusing. This does not assist in determining whether the use of a word was the use of a trade mark.
[53] As to the third argument respecting the use by Loblaws of the word "volcano" as a trade mark in the context of hot peppers, I do not accept the premise of Pepper King's argument that such usage is indistinguishable from Loblaws' use of the word "volcano" in the context of its salsa.
[54] A review of the respective labels which are in evidence leads me to conclude that the message given to the public by the use of the word "volcano" in the phrase "Volcano Hot Peppers" on Loblaws' hot peppers is different from the message given by the use of the word "volcano" in the phrase "All-Natural Volcano Desperately Hot Salsa Picante" or in the phrase "Extra Chunky Volcano Salsa Picante Desperately Hot".
[55] In the first case, the word "volcano" in the phrase "volcano hot peppers" does distinguish the source of those hot peppers. However, the use of the word "volcano", sandwiched together with other descriptive words such as "all-natural", "extra chunky" and "desperately hot", is not in the same way suggestive of the source of the wares.
[56] I turn therefore to what, in my opinion, is the determinative issue: what is the message given by the use of the word "volcano" by Loblaws in the context of its salsa? Specifically, does the use of the word "volcano" distinguish the product as coming from a particular source?
[57] After a careful review of the whole of the evidence before me, I have concluded that the effect of the word "volcano" as used in Loblaws' salsa label is to distinguish the degree of spiciness of the product and not to identify the salsa as coming from any particular source.
[58] I base this conclusion upon the following.
[59] First, it is a fact, deemed to be admitted by Pepper King, that:
| 45. At all relevant times Loblaws has promoted its salsa bearing the term "volcano" as one of a series of salsa having different hotness levels. The term "volcano" indicates and describes the hotness level of the salsa. |
[60] It is further formally admitted that:
| 51. At all times Loblaws' salsa bearing the term "volcano" has been displayed for sale on shelves in retail supermarkets. At all times the 850 ml jars of salsa bearing the term "volcano" are displayed immediately adjacent to or above or below Loblaws' other salsa products having other hotness levels such that the potential purchaser sees all of the different salsas of different hotness levels in one area at the same time. |
[61] This is consistent with Loblaws' advertising of the product. The new product was announced in Loblaws' Insider's Report issued in June of 1992. In an advertisement placed prominently under the heading "If you can't stand the heat, get out of the volcano!" is the following:
| If you find the "Hot" version of our La Eleccion del Presidente Salsa Picante too tame, then the "Volcano" is the choice for you. Our NEW "VOLCANO" version of La Eleccion del Presidente Salsa Picante is hotter than "Hot." CONSIDER YOURSELF WARNED!! Fans of our popular "Hot" and "Mild" salsas need not fear -- they remain unchanged. (Why change the two salsas that have made La Eleccion del Presidente the #1 - selling salsa in Canada?!) Instead, we've added TWO NEW SALSAS to our "fiery squad". Along with the new "Volcano" salsa, we're introducing NEW EXTRA MILD, for gringos who haven't yet tried salsa because they fear it's too hot to handle. |
| ... |
| All four flavors, Extra Mild (850 mL), Mild (878 mL), Hot (878 mL) and Volcano (850 mL) are only $3.99 each! |
[62] I take from this advertisement that the message to be given, and received, is that the word "volcano" was used to indicate the hottest flavour of salsa in the "La Eleccion del Presidente Salsa Picante" series.
[63] Other advertisements put in evidence are to a similar effect. For example, in the Insider's Report dated November 20, 1993 in a display box headed "FELICES NAVIDADES! (that's Spanish for Merry Christmas)", in the first box below the heading is the phrase "LA ELECCION DEL PRESIDENTE NACHO CHIPS" followed by "LA ELECCION DEL PRESIDENTE TORTILLA CHIPS" followed, four boxes below, by "LA ELECCION DEL PRESIDENTE SALSA extra mild, mild, hot, volcano, chunky mild or chunky hot".
[64] Together, this evidence shows, I find, that the word "volcano" would be perceived to denote the degree of spiciness, and not its source.
[65] My second basis for concluding that Loblaws did not use the word "volcano" in the trade mark sense is that I find that the source of the Loblaws' product was identified by the use of Loblaws' trade mark LA ELECCION DEL PRESIDENTE, which always appeared on the labels in the same script as the "PRESIDENT'S CHOICE" in Design trade mark. Since February of 1994, the source of the product would further be identified by a consumer by the PC Script trade mark on the label.
[66] The following facts, deemed to be admitted, are relevant to this finding:
| 61. A reasonable shopper in mid-May 1992 and at all times subsequent thereto, shopping in a Loblaws or Loblaws-affiliated store, would be aware of the trade marks PRESIDENT'S CHOICE and the PRESIDENT'S CHOICE in Design Script ..., and would reasonably conclude that a Mexican--style product such as salsa that had the trade mark LA ELECCION DEL PRESIDENTE in the same script as PRESIDENT'S CHOICE in Design trade mark, would most likely be a private label product which was being offered for sale by the same entity which had previously offered for sale, PRESIDENT'S CHOICE products. |
[67] The third basis for my conclusion is that, as noted, when used by Loblaws the word "volcano" is found in the midst of a number of words such as "natural" and "chunky" which are descriptive of the product and not its source. I find the word "volcano" would similarly be viewed as not descriptive of the source of the product.
[68] From my finding that the word "volcano" was not used to identify the source of the wares I conclude that the defendants have not acted contrary to either section 19 or section 20 of the Act and have not infringed Pepper King's trade mark.
[69] In view of this conclusion that the word "volcano" was not used as a trade mark, it is not necessary for me to determine whether its use is likely to be confusing with Pepper King's trade mark. However, as the point was fully argued I will deal with it briefly.
(ii) Was Loblaws' use of the word "volcano" likely to cause confusion?
[70] Section 6 of the Act is directed to the issue of when a trade mark is confusing. Section 6 provides in subsections (1), (2) and (5) as follows:
| 6. (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section. (2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class. ... (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. (1) Pour l'application de la présente loi, une marque de commerce ou un nom commercial crée de la confusion avec une autre marque de commerce ou un autre nom commercial si l'emploi de la marque de commerce ou du nom commercial en premier lieu mentionnés cause de la confusion avec la marque de commerce ou le nom commercial en dernier lieu mentionnés, de la manière et dans les circonstances décrites au présent article. (2) L'emploi d'une marque de commerce crée de la confusion avec une autre marque de commerce lorsque l'emploi des deux marques de commerce dans la même région serait susceptible de faire conclure que les marchandises liées à ces marques de commerce sont fabriquées, vendues, données à bail ou louées, ou que les services liés à ces marques sont loués ou exécutés, par la même personne, que ces marchandises ou ces services soient ou non de la même catégorie générale. ... (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. |
| [71] Having regard to all of the surrounding circumstances, I find that the Loblaws' use of the word "volcano" would not likely have caused confusion. This conclusion is based upon the following: |
| (i) There was no evidence of actual confusion. Pepper King did not lead evidence of anyone buying the Loblaws' product believing or expecting that it was Pepper King's product; |
| (ii) The evidence was to the effect that Pepper King's trade mark had not become well-known. Neither Mr. Small nor Pepper King ever advertised their pepper sauce. Pepper King's pepper sauce was sold in relatively small quantities in a very limited geographic area; |
| (iii) The evidence was to the effect that Pepper King and the defendants had two different areas of trade. Pepper King sold a very limited quantity of sauce at retail, selling the product largely through private sales or at a flea market. In contrast, Loblaws sold its salsa at retail and to franchised and licensed companies for sale at retail; and |
| (iv) The appearance of Loblaws' trade marks on Loblaws' salsa would, I have concluded, be recognized as indicating the source of its goods. |
| [72] Pepper King's strongest ground for asserting confusion is that the two products are made from very similar ingredients and are used for similar purposes. |
| [73] The strength of this argument is, however, substantially undercut by Pepper King's deemed admission that: |
| 52. Salsa and hot pepper sauce are not substantially similar products. Hot pepper sauce is added as an ingredient to other prepared foods to enhance seasoning and spice. Salsa is a stand alone product served directly with a carrier vehicle such as tortilla chips. |
| [74] The plaintiff seeks, creatively, to manoeuver around this admission by arguing that the admission does not go so far as to say that Pepper King's hot pepper sauce and Loblaws' salsa are not substantially similar products. |
| [75] I do not find that argument persuasive. I am of the view that, as admitted in the generic sense, the parties' salsa and hot pepper sauce would not be viewed as being substantially similar by a consumer. I agree with the defendants that hot pepper sauce including Pepper Kings' would be viewed as an ingredient or condiment. Salsa is a stand alone end product more analogous to a dip. The parties' products are not so similar that in this case a consumer would be confused. |
| [76] This is especially the case where, I find on the evidence, the plaintiff's product is of a degree of spiciness that it would appeal to someone who sought out a very hot spice. This is the effect of Mr. Downey's evidence that on tasting the product he immediately knew "some guys who would love that stuff..." and the evidence of Mr. Power who, as a long distance driver, seeks out hot sauces. |
| [77] The issue of confusion is to be determined by reference to persons who are likely to consume the wares. See: Cheung Kong (Holdings) Ltd. v. Living Realty Inc., [2000] 2 F.C. 501 (T.D.). |
| [78] This type of prospective purchaser would, I conclude, take special care and not likely be confused between the plaintiff's hot pepper sauce and the defendants' hottest salsa. |
| (iii) Was Pepper King's mark not distinctive so that its trade mark registration is invalid? |
| [79] In advancing this defence, also advanced as a counterclaim, Loblaws relied upon paragraph 18(1)(b) of the Act which provides: |
| 18. (1) The registration of a trade-mark is invalid if ... (b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced. |
18. (1) L'enregistrement d'une marque de commerce est invalide dans les cas suivants_: ... b) la marque de commerce n'est pas distinctive à l'époque où sont entamées les procédures contestant la validité de l'enregistrement. |
| [80] Loblaws argued that if their use of the word "volcano" was found to be use in the trade mark sense, that use would be sufficient to render Pepper King's trade mark VOLCANO non-distinctive of the source of its pepper sauce. Loblaws relied upon the decision of this Court in All Canada Vac Ltd. v. Lindsay Manufacturing Inc. (1990), 28 C.P.R. (3d) 385 (T.D.). |
| [81] My conclusion that Loblaws did not use the word "volcano" as a trade mark to distinguish their wares is determinative of this argument so that this defence, and Loblaws' counterclaim based thereon, must fail. |
| CONCLUSION |
| [82] For the above stated reasons, I find that the defendants have not infringed Pepper King's trade mark number TMA 415,846 and that the counterclaim has not been made out. Therefore, Pepper King's action, and Loblaws' counterclaim, are dismissed. |
| [83] If Loblaws seek costs, Pepper King shall pay to the defendants one set of party-and-party costs in connection with the plaintiff's claim, to be assessed in accordance with Column III of the table to Tariff B. |
| "Eleanor R. Dawson" |
| Judge |
| Ottawa, Ontario |
| September 7, 20000 |