Ottawa, Ontario, February 7, 2006
PRESENT: THE HONOURABLE MADAM JUSTICE DAWSON
BETWEEN:
Applicant
and
TRADE MARK REFLECTIONS LTD.
Respondent
REASONS FOR ORDER AND ORDER
[1] The applicant, Flanders Filters, Inc. ("Flanders"), is the registered owner of the trade-mark AIRPURE, to be used in association with high-efficiency air filters for industrial and commercial use ("trade-mark"). On October 30, 2002, at the request of the respondent, Trade Mark Reflections Ltd., the Registrar of Trade-marks ("Registrar") gave notice to Flanders requiring it to furnish an affidavit or statutory declaration showing whether the trade-mark was in use in Canada in association with high-efficiency air filters for industrial and commercial use at any time during the three-year period ending on October 30, 2002. The notice was issued in accordance and conformity with section 45 of the Trade-marks Act, R.S.C. 1985, c. T-13 ("Act"). Sections 45, 4, 50, 51 and 56 of the Act are set out in the appendix to these reasons.
[2] In response, Flanders filed the statutory declaration of its president. Both the respondent and Flanders made written submissions to the Registrar, but neither requested an oral hearing and no oral hearing was held.
[3] After considering the statutory declaration of the president of Flanders and the written submissions, the Registrar ordered that the trade-mark be expunged in compliance with the provisions of subsection 45(5) of the Act. Two reasons were given for the Registrar's decision. First, the use of the trade-mark established by the evidence was not use by Flanders, or use that accrued to it pursuant to section 50 of the Act. While the president's declaration stated that the use was by Flanders "or through a licensee" no evidence was provided that Flanders had direct or indirect control of the character and quality of the wares sold or manufactured by the licensees as required by section 50 of the Act. Further, no evidence was provided that public notice had been given of the name of the trade-mark owner and that use was under license as required by subsection 50(2) of the Act. Second, the evidence failed to demonstrate that, at the time of transfer of the wares, the trade-mark was associated with any high-efficiency air filter for industrial or commercial use, as required by subsection 4(1) of the Act.
[4] Flanders brings this appeal from that decision pursuant to section 56 of the Act. The respondent took no position with respect to the appeal and did not enter any appearance in this proceeding. For the reasons that follow, I have decided that the appeal should be allowed and the decision of the Registrar expunging the trade-mark should be set aside.
The New Evidence
[5] Flanders filed new evidence on this appeal, specifically the statutory declaration of the vice president of operations of a related company, Flanders Corporation. In his declaration the vice president:
1. Explained that Flanders was a wholly owned subsidiary of Flanders Corporation.
2. Explained that Precisionaire, Inc., another wholly owned subsidiary of Flanders Corporation, was authorized by Flanders "to manufacture and package air filters in connection with the AIRPURE [trade-]mark for subsequent resale to other distributors or retailers. Flanders Corporation is authorized by [Flanders] to prepare corresponding promotional, technical specifications and other materials bearing the AIRPURE mark to be distributed by its wholly owned affiliates, including [Flanders] and Precisionaire, Inc., in connection with the distribution of AIRPURE filters".
3. Swore that:
6. As part of my day-to-day duties at Precisionaire, Inc., I routinely supervised the packaging of our products. Depending on the size of the air filters, the mark AIRPURE is marked on the product itself and/or is on a label which is attached to the product's packaging prior to further distribution. Attached as Exhibit A-1 to this Declaration is an electronic copy of a page from a Product Catalogue (in circulation 1997 to 2001) prepared by Flanders Corporation for use by its wholly owned subsidiaries, Flanders Filters, Inc. and Precisionaire, Inc., which shows an air filter bearing the mark AIRPURE. Attached as Exhibit A-2 to this Declaration are labels which are applied to the packaging of all AIRPURE air filter products distributed by Flanders Filters, Inc. or its authorized affiliates, including Precisionaire, Inc. These labels have been in use since at least as early as 1999 and continue to be in use at this time.
The label referred to contained the trade-mark and identified the filter as being manufactured by the trade-mark owner, Flanders.
4. Confirmed that he had reviewed the statutory declaration filed before the Registrar by Flanders and that the product identified in a sales invoice filed before the Registrar was in respect of the sale of a large, heavy and expensive air filter to J. Air Simard in St. Hubert, Quebec. After the filter was manufactured by Precisionaire, Inc., the above-mentioned label would have been attached and the filter would have been shipped to J. Air Simard in Quebec.
The Abandoned Ground of Appeal
[6] Prior to the hearing of this appeal, the Court issued a direction to counsel for Flanders requesting that at the hearing of the appeal counsel be prepared to deal with two decisions of the Trade-marks Opposition Board: MCI Communications Corp. v. MCI Multinet Communications Inc. (1995), 61 C.P.R. (3d) 245; and Dynatech Automation Systems Inc. v. Dynatech Corp. (1995), 64 C.P.R. (3d) 101.
[7] These cases stand as authority for the proposition and that use of a trade-mark by a wholly owned subsidiary is, by itself, insufficient to establish the existence of a license within the meaning of section 50 of the Act. There must also be evidence that the registered owner of the trade-mark controls the use of its trade-marks by its subsidiaries and takes steps to ensure the character and quality of the wares provided. (This would not appear to be the case in respect of pharmaceutical preparations, where subsection 51(1) of the Act would apply).
[8] As a result, at the hearing of the appeal counsel for Flanders abandoned the argument that the declaration from the vice president of Precisionaire, Inc. remedied the failure before the Registrar to show that use by Precisionaire, Inc. accrued to the benefit of Flanders by virtue of the simple fact that both were wholly owned subsidiaries of Flanders Corporation.
Standard of Review
[9] The sole remaining issue in the appeal is whether Flanders remedied the evidentiary defect before the Registrar by providing evidence that the trade-mark was used in association with high-efficiency air filters for industrial or commercial use at the time of transfer of the filters.
[10] The standard of review applicable to the Registrar's decision is to be determined on the basis of a pragmatic and functional analysis. However, the Federal Court of Appeal has held that where additional evidence is adduced before this Court that would have materially affected the Registrar's finding of fact or exercise of discretion, the judge hearing the appeal must reach his or her own conclusion as to the correctness of the Registrar's decision (see: Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145 at paragraph 51). It is therefore necessary to consider the significance of the new evidence as it relates to the one remaining issue on this appeal.
[11] The Registrar found that there was no evidence demonstrating use of the trade-mark in association with the wares specified in the registration. Evidence of that nature has now been provided. I find that the nature and cogency of the new evidence would have materially affected the Registrar's decision such that I should reach my own conclusion as to the correctness of the decision in light of all of the evidence now available.
Has Flanders Now Provided Evidence of Use as Required by section 45 of the Act?
[12] Section 45 requires Flanders to provide an affidavit or statutory declaration showing, with respect to high-efficiency filters for industrial or commercial use, that the AIRPURE trade-mark was in use in Canada at any time within the three-year period preceding the date of the Registrar's notice. The evidentiary threshold for Flanders to meet is low (see: Vogue Brassiere Inc. v. Sim & McBurney, [2000] F.C.J. No. 64 at paragraph 43).
[13] Subsection 4(1) of the Act provides that a trade-mark is deemed to be used in association with wares if, among other things, at the time of transfer of property or possession of the wares, in the normal course of trade, the trade-mark is marked on the wares or on their packaging or is otherwise so associated with the wares that notice of the association between the trade-mark and the wares is given to the person to whom the property or possession is transferred. Evidence of one single sale in the normal course of trade may well suffice, so long as that sale is not seen to be a contrived transaction, made in order to protect the registration of the trade-mark (see: Vogue, cited above, at paragraph 43).
[14] In the present case, the totality of the evidence establishes that:
1. During the period from January 1, 1999 to December 31, 2002 there were at least 100,000 high-efficiency air filters for industrial and commercial use sold in Canada that were manufactured by Precisionaire, Inc. pursuant to authority given by Flanders.
2. Each unit was packaged with a label that displayed both the AIRPURE trade-mark and the name of the registered owner, which was stated to have manufactured the filter. The filters themselves either bore the trade-mark or had a label attached to the filter which bore the trade-mark.
3. One such air filter was sold to J. Air Simard in Canada. At the time J. Air Simard received the filter it would have been packaged with a label that bore the trade-mark and the name of the registered owner of the trade-mark which was said to have manufactured the filter.
[15] I find that this evidence establishes, for the purpose of section 45 of the Act, use in Canada within the relevant three-year period of the trade-mark in association with high-efficiency filters for industrial and commercial use.
[16] It follows that the appeal should be allowed and the decision of the Registrar expunging the registration of the trade-mark should be set aside.
[17] Costs were not sought, and given that the appeal was necessitated by the poor evidentiary record put before the Registrar by Flanders, no costs are awarded.
ORDER
[18] THIS COURT ORDERS THAT:
1. The appeal from the decision of the Registrar dated July 13, 2005 expunging Registration No. TMA345,762 for the trade-mark AIRPURE is allowed.
2. No costs are awarded.
Judge
APPENDIX
Sections 4, 45, 50, 51 and 56 of the Trade-marks Act:
| 4(1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
4(2) A trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.
4(3) A trade-mark that is marked in Canada on wares or on the packages in which they are contained is, when the wares are exported from Canada, deemed to be used in Canada in association with those wares.
[...]
45(1) The Registrar may at any time and, at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee shall, unless the Registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or a statutory declaration showing, with respect to each of the wares or services specified in the registration, whether the trade-mark was in use in Canada at any time during the three year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since that date. 45(2) The Registrar shall not receive any evidence other than the affidavit or statutory declaration, but may hear representations made by or on behalf of the registered owner of the trade-mark or by or on behalf of the person at whose request the notice was given.
45(3) Where, by reason of the evidence furnished to the Registrar or the failure to furnish any evidence, it appears to the Registrar that a trade-mark, either with respect to all of the wares or services specified in the registration or with respect to any of those wares or services, was not used in Canada at any time during the three year period immediately preceding the date of the notice and that the absence of use has not been due to special circumstances that excuse the absence of use, the registration of the trade-mark is liable to be expunged or amended accordingly.
45(4) When the Registrar reaches a decision whether or not the registration of a trade-mark ought to be expunged or amended, he shall give notice of his decision with the reasons therefor to the registered owner of the trade-mark and to the person at whose request the notice referred to in subsection (1) was given. 45(5) The Registrar shall act in accordance with his decision if no appeal therefrom is taken within the time limited by this Act or, if an appeal is taken, shall act in accordance with the final judgment given in the appeal.
[...]
50(1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.
50(2) For the purposes of this Act, to the extent that public notice is given of the fact that the use of a trade-mark is a licensed use and of the identity of the owner, it shall be presumed, unless the contrary is proven, that the use is licensed by the owner of the trade-mark and the character or quality of the wares or services is under the control of the owner.
50(3) Subject to any agreement subsisting between an owner of a trade-mark and a licensee of the trade-mark, the licensee may call on the owner to take proceedings for infringement thereof, and, if the owner refuses or neglects to do so within two months after being so called on, the licensee may institute proceedings for infringement in the licensee's own name as if the licensee were the owner, making the owner a defendant.
51(1) Where a company and the owner of a trade-mark that is used in Canada by that owner in association with a pharmaceutical preparation are related companies, the use by the company of the trade-mark, or a trade-mark confusing therewith, in association with a pharmaceutical preparation that at the time of that use or at any time thereafter, (a) is acquired by a person directly or indirectly from the company, and (b) is sold, distributed or advertised for sale in Canada in a package bearing the name of the company and the name of that person as the distributor thereof, has the same effect, for all purposes of this Act, as a use of the trade-mark or the confusing trade-mark, as the case may be, by that owner.
51(2) Subsection (1) does not apply to any use of a trade-mark or a confusing trade-mark by a company referred to in that subsection in association with a pharmaceutical preparation after such time, if any, as that pharmaceutical preparation is declared by the Minister of Health, by notice published in the Canada Gazette, to be sufficiently different in its composition from the pharmaceutical preparation in association with which the trade-mark is used in Canada by the owner referred to in subsection (1) as to be likely to result in a hazard to health.
51(3) In this section, "pharmaceutical preparation" includes (a) any substance or mixture of substances manufactured, sold or represented for use in (i) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof, in humans or animals, or (ii) restoring, correcting or modifying organic functions in humans or animals, and (b) any substance to be used in the preparation or production of any substance or mixture of substances described in paragraph (a), but does not include any such substance or mixture of substances that is the same or substantially the same as a substance or mixture of substances that is a proprietary medicine within the meaning from time to time assigned to that expression by regulations made pursuant to the Food and Drugs Act.
[...]
56(1) An appeal lies to the Federal Court from any decision of the Registrar under this Act within two months from the date on which notice of the decision was dispatched by the Registrar or within such further time as the Court may allow, either before or after the expiration of the two months. 56(2) An appeal under subsection (1) shall be made by way of notice of appeal filed with the Registrar and in the Federal Court. 56(3) The appellant shall, within the time limited or allowed by subsection (1), send a copy of the notice by registered mail to the registered owner of any trade-mark that has been referred to by the Registrar in the decision complained of and to every other person who was entitled to notice of the decision.
56(4) The Federal Court may direct that public notice of the hearing of an appeal under subsection (1) and of the matters at issue therein be given in such manner as it deems proper. 56(5) On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.
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4(1) Une marque de commerce est réputée employée en liaison avec des marchandises si, lors du transfert de la propriété ou de la possession de ces marchandises, dans la pratique normale du commerce, elle est apposée sur les marchandises mêmes ou sur les colis dans lesquels ces marchandises sont distribuées, ou si elle est, de toute autre manière, liée aux marchandises à tel point qu'avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée. 4(2) Une marque de commerce est réputée employée en liaison avec des services si elle est employée ou montrée dans l'exécution ou l'annonce de ces services. 4(3) Une marque de commerce mise au Canada sur des marchandises ou sur les colis qui les contiennent est réputée, quand ces marchandises sont exportées du Canada, être employée dans ce pays en liaison avec ces marchandises.
[...]
45(1) Le registraire peut, et doit sur demande écrite présentée après trois années à compter de la date de l'enregistrement d'une marque de commerce, par une personne qui verse les droits prescrits, à moins qu'il ne voie une raison valable à l'effet contraire, donner au propriétaire inscrit un avis lui enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration solennelle indiquant, à l'égard de chacune des marchandises ou de chacun des services que spécifie l'enregistrement, si la marque de commerce a été employée au Canada à un moment quelconque au cours des trois ans précédant la date de l'avis et, dans la négative, la date où elle a été ainsi employée en dernier lieu et la raison de son défaut d'emploi depuis cette date. 45(2) Le registraire ne peut recevoir aucune preuve autre que cet affidavit ou cette déclaration solennelle, mais il peut entendre des représentations faites par le propriétaire inscrit de la marque de commerce ou pour celui-ci ou par la personne à la demande de qui l'avis a été donné ou pour celle-ci. 45(3) Lorsqu'il apparaît au registraire, en raison de la preuve qui lui est fournie ou du défaut de fournir une telle preuve, que la marque de commerce, soit à l'égard de la totalité des marchandises ou services spécifiés dans l'enregistrement, soit à l'égard de l'une de ces marchandises ou de l'un de ces services, n'a été employée au Canada à aucun moment au cours des trois ans précédant la date de l'avis et que le défaut d'emploi n'a pas été attribuable à des circonstances spéciales qui le justifient, l'enregistrement de cette marque de commerce est susceptible de radiation ou de modification en conséquence. 45(4) Lorsque le registraire décide ou non de radier ou de modifier l'enregistrement de la marque de commerce, il notifie sa décision, avec les motifs pertinents, au propriétaire inscrit de la marque de commerce et à la personne à la demande de qui l'avis visé au paragraphe (1) a été donné.
45(5) Le registraire agit en conformité avec sa décision si aucun appel n'en est interjeté dans le délai prévu par la présente loi ou, si un appel est interjeté, il agit en conformité avec le jugement définitif rendu dans cet appel.
[...]
50(1) Pour l'application de la présente loi, si une licence d'emploi d'une marque de commerce est octroyée, pour un pays, à une entité par le propriétaire de la marque, ou avec son autorisation, et que celui-ci, aux termes de la licence, contrôle, directement ou indirectement, les caractéristiques ou la qualité des marchandises et services, l'emploi, la publicité ou l'exposition de la marque, dans ce pays, par cette entité comme marque de commerce, nom commercial - ou partie de ceux-ci - ou autrement ont le même effet et sont réputés avoir toujours eu le même effet que s'il s'agissait de ceux du propriétaire. 50(2) Pour l'application de la présente loi, dans la mesure où un avis public a été donné quant à l'identité du propriétaire et au fait que l'emploi d'une marque de commerce fait l'objet d'une licence, cet emploi est réputé, sauf preuve contraire, avoir fait l'objet d'une licence du propriétaire, et le contrôle des caractéristiques ou de la qualité des marchandises et services est réputé, sauf preuve contraire, être celui du propriétaire. 50(3) Sous réserve de tout accord encore valide entre lui et le propriétaire d'une marque de commerce, le licencié peut requérir le propriétaire d'intenter des procédures pour usurpation de la marque et, si celui-ci refuse ou néglige de le faire dans les deux mois suivant cette réquisition, il peut intenter ces procédures en son propre nom comme s'il était propriétaire, faisant du propriétaire un défendeur.
51(1) Lorsqu'une compagnie et le propriétaire d'une marque de commerce qui est employée au Canada par ce propriétaire en liaison avec une préparation pharmaceutique sont des compagnies connexes, l'emploi par cette compagnie soit de cette marque de commerce, soit d'une autre marque de commerce qui crée de la confusion avec cette marque de commerce, en liaison avec une préparation pharmaceutique qui, au moment de cet emploi ou par la suite : a) d'une part, est acquise par une personne, directement ou indirectement, de la compagnie; b) d'autre part, est vendue, distribuée ou dont la mise en vente est annoncée, au Canada, dans un emballage portant le nom de la compagnie ainsi que le nom de cette personne en tant que distributeur de cette préparation pharmaceutique, a, pour l'application de la présente loi, le même effet que l'emploi, par le propriétaire, de cette marque de commerce ou de l'autre marque de commerce qui crée de la confusion avec cette marque de commerce, selon le cas. 51(2) Le paragraphe (1) ne s'applique pas à l'emploi d'une marque de commerce, ou d'une marque de commerce créant de la confusion, par une compagnie mentionnée à ce paragraphe, en liaison avec une préparation pharmaceutique, après le moment, le cas échéant, où le ministre de la Santé déclare, par avis publié dans la Gazette du Canada, que la composition de cette préparation pharmaceutique diffère suffisamment de celle de la préparation pharmaceutique en liaison avec laquelle la marque de commerce est employée au Canada par le propriétaire mentionné au paragraphe (1) pour qu'il soit probable qu'il en résulte un risque pour la santé. 51(3) Au présent article, « préparation pharmaceutique » s'entend notamment : a) de toute substance ou de tout mélange de substances fabriqué, vendu ou représenté comme pouvant être employé : (i) soit au diagnostic, au traitement, à l'atténuation ou à la prévention d'une maladie, d'un désordre, d'un état physique anormal, ou de leurs symptômes chez l'homme ou les animaux, (ii) soit en vue de restaurer, corriger ou modifier les fonctions organiques chez l'homme ou les animaux; b) de toute substance destinée à être employée dans la préparation ou la production d'une substance ou d'un mélange de substances décrits à l'alinéa a). La présente définition exclut une substance ou un mélange de substances semblable ou identique à ceux que les règlements d'application de la Loi sur les aliments et drogues qualifient de spécialités pharmaceutiques.
[...]
56(1) Appel de toute décision rendue par le registraire, sous le régime de la présente loi, peut être interjeté à la Cour fédérale dans les deux mois qui suivent la date où le registraire a expédié l'avis de la décision ou dans tel délai supplémentaire accordé par le tribunal, soit avant, soit après l'expiration des deux mois. 56(2) L'appel est interjeté au moyen d'un avis d'appel produit au bureau du registraire et à la Cour fédérale.
56(3) L'appelant envoie, dans le délai établi ou accordé par le paragraphe (1), par courrier recommandé, une copie de l'avis au propriétaire inscrit de toute marque de commerce que le registraire a mentionnée dans la décision sur laquelle porte la plainte et à toute autre personne qui avait droit à un avis de cette décision. 56(4) Le tribunal peut ordonner qu'un avis public de l'audition de l'appel et des matières en litige dans cet appel soit donné de la manière qu'il juge opportune.
56(5) Lors de l'appel, il peut être apporté une preuve en plus de celle qui a été fournie devant le registraire, et le tribunal peut exercer toute discrétion dont le registraire est investi.
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FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1557-05
STYLE OF CAUSE: FLANDERS FILTERS, INC.
Applicant
and
TRADE MARK REFLECTIONS LTD.
Respondent
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: JANUARY 25, 2005
APPEARANCES:
NICOLA M. HUNT FOR THE APPLICANT
NO APPEARANCE FOR THE RESPONDENT
SOLICITORS OF RECORD:
NICOLA M. HUNT FOR THE APPLICANT
BARRISTER & SOLICITOR
OTTAWA, ONTARIO