Date: 20140508

Docket:

T-942-13

Citation: 2014 FC 442

Ottawa, Ontario, May 8, 2014

PRESENT:    The Honourable Mr. Justice Peter Annis

BETWEEN:

RIDOUT & MAYBEE LLP

Applicant

and

HJ HEINZ COMPANY AUSTRALIA LTD.

Respondent

JUDGMENT AND REASONS

I.                   Introduction

[1]               This application is an appeal pursuant to section 56 of the Trade-marks Act, RSC 1985, c T-13 [the Act] from a decision [“the Decision”] by the Registrar of Trade-marks, 2013 TMOB 49, maintaining the respondent’s trade-mark registration No TMA650,968 pursuant to section 45 of the Act.

[2]               For the reasons which follow, the application is dismissed.

II.                Facts

[3]               On October 20, 2005, HJ Heinz Company Australia Ltd [Heinz] registered the trade-mark OX & PALM in Canada for use in association with wares of meat and processed meats, namely corned meat and tinned meat.

[4]               Heinz then set to work to secure a Canadian distributor.  It incorrectly believed that once it obtained Canadian Food Inspection Agency approval for its OX & PALM corned beef, it needed to deliver the product in Canada within six months.  It therefore waited to apply for approval until February 2009 while it arranged distribution. 

[5]               From June 2009, its prospective distributor, Mangal’s Market & Co, LLC [Mangal’s], pursued negotiations with T&T Supermarkets to purchase the product, but negotiations were unexpectedly derailed when Loblaws acquired T&T.

[6]               In April 2010, Mangal’s opened negotiations with a different customer, Centennial Foodservice – Worldsource [Centennial], a Calgary company.  These were successful and Centennial agreed to buy 1,660 cartons of OX & PALM corned beef.

[7]               In June 2010, the offer to Centennial to purchase was made by Mangal’s on behalf of Heinz.

[8]               On June 7, 2010, the offer was accepted by Centennial with the issuance of a purchase order.

[9]               In June, July, and August, several receipts and commercial invoices were issued, all confirming Centennial’s purchase of OX & PALM corned beef.

[10]           On July 30, 2010, the shipment of OX & PALM corned beef left Australia for delivery to Centennial, as evidenced by the Bill of Lading and Canada Customs Invoice.

[11]           On August 16, 2010, the applicant requested that the Registrar issue a notice to the respondent pursuant to section 45 of the Act in respect of the OX & PALM registration.

[12]           On August 19, 2010, Mangal’s received payment, by way of bank wire transfer, in an amount exceeding $70,000 US, from Centennial, in respect of the OX & PALM corned beef.

[13]           On August 25, 2010, the Registrar issued the notice requested by the applicant.  The notice required the respondent to submit evidence showing that it had used the trade-mark OX & PALM in Canada in connection with the OX & PALM Wares during the three-year period beginning on August 25, 2007, and ending on August 25, 2010 [the “Relevant Period”].  Alternatively, if the trade-mark OX & PALM had not been used, the respondent was required to submit evidence demonstrating the date on which the trade-mark was last used in Canada and exceptional circumstances justifying non-use of the mark.

[14]           On August 28, 2010, the OX & PALM corned beef arrived in the port of Vancouver.  Centennial received the wares and sold them to retailers in the greater Vancouver area.

[15]           On October 20, 2010, McCallum Industries Limited [“McCallum”] commenced a concurrent and corresponding Federal Court application to expunge Heinz’s OX & PALM registration under section 57 of the Act.  McCallum was represented by the law firm of Ridout & Maybee in that proceeding as well.

[16]           On October 26, 2011, in McCallum Industries Ltd v HJ Heinz Company Australia Ltd, 2011 FC 1216, Justice Pinard of the Federal Court rejected the application by McCallum to expunge the trade-mark.

[17]           On January 9, 2011, Justice Pinard’s decision was upheld by the Federal Court of Appeal in McCallum Industries Ltd v HJ Heinz Company Australia Ltd, 2013 FCA 5.

[18]           Tinned meat products bearing the trade-mark OX & PALM were sold by retailers in the Vancouver area in January 2011.

[19]           On March 21, 2013, further to the notice requiring evidence of use, and having received written and oral submissions from both the applicant and the respondent, the Registrar issued a decision with regard to use of the trade-mark OX & PALM in Canada pursuant to section 45 of the Act.

[20]           The Registrar found, on the basis of the evidence submitted by the respondent, that the trade-mark OX & PALM had been used in Canada by the respondent during the Relevant Period.

III.             Contested decision

[21]           The Registrar noted the applicant’s argument that in order for use of a trade-mark to have occurred as of a certain date, among other things there must have been a transfer of actual possession of the wares, which the applicant submitted followed from the decision in Manhattan Industries Inc v Princeton Manufacturing Ltd (1971), 4 CPR (2d) 6, [1971] FCJ No 1012 (QL) (TD) [Manhattan Industries]. Accordingly, the applicant argued that because the respondent did not take actual possession of the wares in Canada during the Relevant Period, use of the wares did not occur in accordance with section 4 of the Act.  The Registrar nonetheless agreed with the respondent, relying on the decision of Fetherstonhaugh & Co v ConAgra Foods Inc, 2002 FCT 1257, 23 CPR (4th) 49 [ConAgra], that the use of a trade-mark pursuant to section 4 of the Act occurred when an order for a substantial amount of trade-marked goods was placed and accepted prior to the expiry of the Relevant Period, when delivery of the goods and fulfillment of the purchase occurred soon thereafter.

[22]           The Registrar distinguished Manhattan Industries and related jurisprudence cited by the applicant on the basis that establishing the date of first use in those cases was for entitlement purposes or with respect to a ground of opposition based on section 30(b) of the Act. She noted that section 45 proceedings were intended to be simple, summary and expeditious for the purpose of removing “deadwood” from the register. On this basis she concluded that it was not appropriate to necessarily adopt the same stringent and technical approach with respect to the timing of use of a mark when contemplating expungement under section 45 of the Act.  The Registrar also noted that ConAgra had been relied upon in this fashion in various other decisions of the Board.

[23]           The Registrar, in what appears to be a reference concerning the issue of special circumstances to excuse the absence of use under section 45(3), noted that shipping from Australia required almost one month. She offered that had the wares originated in closer proximity, the issue of use of the trade-mark during the Relevant Period would not likely have arisen.

IV.             Statutory Provisions

[24]           The statutory provisions of the Trade-marks Act are:

[25]           Ridout & Maybee appealed the Registrar’s decision.

V.                Issues

[26]           The issues are:

a.         What is the appropriate standard of review?

b.         Was the Registrar’s interpretation reasonable in finding that the respondent had used the trade-mark within Canada during the Relevant Period?

c.         If use in Canada did not occur within the Relevant Period, could the Registrar have found that this was due to special circumstances that excused the absence of use?

VI.             Analysis

A.                Standard of review

[27]           The parties agree that the standard of review for an appeal of a Registrar’s decision pursuant to section 45 in which no new evidence is filed before the Court is reasonableness (Brouillette Kosie Prince v Great Harvest Franchising, Inc, 2009 FC 48 at para 23).  In the present case the only evidence filed is an affidavit introducing a certified copy of the Registrar’s file, which the parties do not consider to be new evidence.

[28]           Under the standard of review of reasonableness, the Registrar’s interpretation of the Trade-marks Act is entitled to considerable deference. In order for the Court to intervene, it must conclude that no reasonable interpretation can lead to that of the decision-maker either because the reasoning process was deeply flawed or because the decision-maker relied on a construction of the statute that fell outside the range of admissible statutory interpretations (Dunsmuir v New Brunswick, 2008 SCC 9).

B.                 Was the Registrar’s interpretation reasonable in finding that the respondent had used the trade-mark within Canada during the Relevant Period?

(1)                The interpretation of the Act and decision were reasonable

[29]           I have no difficulty concluding that the Registrar’s interpretations of the Trade-marks Act were reasonable as was her decision to maintain the registration of the respondent’s trade-mark.

[30]           The Registrar correctly identified the underlying policy governing section 45 of the Act, being that of presenting an efficacious process for removing “deadwood” from the register while protecting registered owners against any unwarranted attempt to have their mark expunged. Justice Stone confirmed this objective in John Labatt Ltd v Rainier Brewing Co (1984), 80 CPR (2d) 228, citing Justice Thorson in a 1964 decision as follows:

On this latter point I would accept, with respect, the views expressed by Thorson P. in Re Wolfville Holland Bakery Limited [(1965), 45 C.P.R. 88.] (at p. 91):

"It is clear that the purpose of s. 44 of the Act is to provide a procedure for trimming the register of trade marks, so to speak, by getting rid of 'dead wood' in the sense of trade marks that are no longer in use but, at the same time, the Act provides safeguard for the protection of the registered owner of a trade mark against any unwarranted attempt to have it expunged."

The decision in that case and in others on this point were regarded by Thurlow C.J. in the Plough (Canada) case (at p. 65) as "clearly and adequately expounding the law". I would respectfully agree.

[31]           Accordingly, an interpretation of section 45 expunging the trade-mark of the respondent that clearly was not the type of “deadwood” envisaged by the provision, on the ground that the respondent had failed to use the mark in Canada two days before the first shipment arrived in Canada, would be absurd in that it could not possibly serve the objectives intended by the statute.

[32]           The Registrar also correctly distinguished the Manhattan Industries case in order to apply the reasoning in the ConAgra decision. She pointed out that Manhattan Industries concerned the date of the first use of a trade-mark, being that of establishing entitlement to registration based on section 30(b) of the Act.

[33]           It is clear from the decision of Justice McKay in ConAgra, which had very similar facts to those in this matter, that he implicitly adopted a purposive interpretation of section 45 to distinguish trade-mark “use in Canada” described in other decisions such as Manhattan Industries. He concluded at paragraph 16 of ConAgra as follows:

16        In my opinion, acceptance of that order before the date of the s. 45 notice constitutes use of the KID CUISINE trade-mark product associated with the wares within the purposes of s. 45.

[Emphasis added]

[34]           The Registrar cannot be criticized therefore for relying on ConAgra or for concluding that the purpose of section 45 would not necessarily be served by adopting “the same stringent and technical approach with respect to the timing of use of the mark when contemplating expungement under section 45 of the Act” as when considering first use for entitlement or grounds of opposition.

[35]           It further follows from this reasoning that the court in ConAgra cannot be criticized as rendering a “manifestly wrong per incuriam decision which ought not to be followed” as argued by the applicant. I am satisfied that a fair reading of ConAgra, despite its brevity on the issue, describes the intention of the Court not to follow the strict interpretation of “use in Canada” found in cases such as Manhattan Industries because they were distinguishable as not describing an interpretation that met the purposes of expungement under section 45 of the Act.

[36]           As a further point, the applicant also argued that Parliament intended a strict interpretation of section 45(1), whereby flexibility in its application was recognized for exceptions by section 45(3) “due to special circumstances that excuse the absence of use” [my emphasis]. Accordingly, if the drafters of the Act wanted flexibility with respect to the provisions deeming use of a trade-mark or the Relevant Period, the statute could have addressed these concerns specifically in a manner similar to that in section 45(3). Instead, the applicant argues, Parliament chose to apply a standardized meaning of “use in Canada” with flexibility being provided via section 45(3) to allow special circumstances to “excuse the absence of use”.

[37]           While “special circumstances” may provide an exception for those registrants who can rely on them to explain their failure to use the mark in Canada during the Relevant Period, they do not assist in those cases where the mark is clearly not “deadwood” and no extenuating circumstances exist. It remains the objective of the Act that viable marks of value are not to be expunged because there exists some difficulty, such as may be a legitimate business reason, but not an exceptional circumstance. A purposive interpretation of the provision ensures that in these latter situations the marks are not struck for reasons that are in conflict with the purposes of the Act. Special circumstances may help out in other situations.

(2)               Does the Interpretation Act require that the meaning of “use in Canada” be the same throughout the Act?

[38]           The applicant argued that the Registrar’s finding that it is not appropriate to adopt the same meaning of the word “use” for all cases in respect of the Act is not consistent with the legislative scheme established by the Act. The Act clearly defines at section 4 when a trade-mark is deemed to be used; accordingly the respondent argued that the definition must apply to the Act as a whole, and not only to certain sections thereof.

[39]           In further submissions and argument before the Court, the applicant bolstered this submission by reference to section 15(1) of the Interpretation Act, RSC 1985, c I-21, that requires statutorily defined terms to apply to all provisions of a given enactment:

[40]           In addition, the applicant argued that defined terms in legislation can be displaced, but only if there are express words or a necessarily implied context showing that Parliament did not intend the definition to apply to a particular use of the defined term. See MiningWatch Canada v Canada (Fisheries and Oceans), 2010 SCC 2 at para 29.

[41]           In reply to these arguments, the respondent submitted that the requirements of the definition of deemed use in section 4(1) are consistently applied to all provisions of the Act, thereby complying with the Interpretation Act.  The statutory deeming applied only to define the “use” of the mark, not the application of the use, i.e. whether the use is made in Canada, or for that matter whether use occurs during the Relevant Period. These requirements are set by section 45, not section 4(1). I am in agreement with this argument, but it requires some explanation.

[42]           The Federal Court of Appeal in Syntex Inc v Apotex Inc (1984), 1 CPR (3d) 145, [1984] FCJ No 191 (QL) (FCA) at 151 held that the “critical point in time” for the analysis of trade-mark use is the time at which a transfer occurs, either of property or of possession; the required elements of use must all be present at this time.

[43]           Manhattan Industries primarily concerned the issue of transfer of possession, as the applicant submitted that possession in section 4(1) should be accepted to mean “constructive”, as opposed to “actual” possession, which argument was rejected. However, the Court also considered the issue of transfer of property. It found that the transfer of property occurred when the wares were placed with Canada Post for delivery to the registrant. The applicant in the present case therefore accepts that the transfer in property associated with the wares occurred when they were placed in the custody of the shippers for transportation to Canada. Transfer of actual possession of the wares could only occur upon delivery of the wares into the hands of the recipient, i.e. in Canada.

[44]           The applicant also acknowledges that the mark was used in the normal course of trade and applied to packages associated with the wares.  Thus, all the requirements of deemed use pursuant to section 4(1) were fulfilled by the respondent at the time of transfer of the property when the wares were delivered to the shipper. As a result, the Interpretation Act would play no role in this matter because the literal interpretation of deemed use in section 4(1) continues to have application throughout the enactment. Use is not the issue.

[45]           The issue concerns the interpretation of “in Canada” in section 45, and similarly in section 30(b). Where the confusion in this field appears to have occurred is around the term “use(d) in Canada” found in section 45, but not section 4(1). In particular, in Manhattan Industries the Court extended the definition of “use” beyond its parameters by stating that the transfer of possession was “use in Canada within the meaning of s. 4.”  Any reference to “in Canada” in that decision was not a requirement of section 4, but of section 30(b) (“in the case of a trade-mark that has been used in Canada […]” [my emphasis]).  

[46]           Similarly, the reference to “used in Canada” in both ConAgra and the Registrar’s decision, in fact relates on the one hand to the “use” requirement as deemed by section 4(1) and on the other, to the “in Canada” requirement of section 45. The “Relevant Period” is similarly a requirement established by section 45. 

[47]           However, by placing emphasis on where the transfer of the property takes place, the purposive construction of the provision must focus on construing the transfer to have occurred in Canada. Property in wares, unlike their actual possession, is a legal construct. I would argue that this makes it more readily subject to different constructions for the purpose of interpretation than actual possession.  In terms of the wording of section 45 therefore, the transfer of property in the wares can be construed to have occurred “in Canada” when the custody of the goods was passed to the shipping entity.

[48]           The delivery of the wares to the shipper was an element of the completion of the transfer of the property that occurred in Canada. In this sense, the transfer of the property can be interpreted to have occurred in Canada at the time the custody of the goods was delivered to the transporters in Australia so long as the delivery was completed. With the place of the transfer occurring in Canada within the Relevant Period, the requirements of section 45 of the Act are met as constituting “use in Canada”.

[49]           In this manner, the definition of “use” is consistent through the Act, the definition of “possession” in Manhattan Industries is unaffected, while transfer of property in Canada in section 45 is construed purposively to meet the objectives of the Act.

[50]           In conclusion, my decision rejecting the application is based upon the reasonableness of the interpretation of section 45 by the Registrar and the deference owed to her conclusions on the appropriate interpretation of the Trade-marks Act.

[51]           Her decision reflects a purposive interpretation of the Act that is consonant with its objectives and avoids a consequence which otherwise would undermine the intent of Parliament were the applicant’s submissions to have been accepted.

C.                 If use in Canada did not occur within the Relevant Period, could the Registrar have found that this was due to special circumstances that excused the absence of use?

[52]           As I find the Registrar’s conclusions on the construction of section 45 of the Act to be reasonable and the decision within the range of reasonable acceptable outcomes, I do not find it necessary to decide the respondent’s alternative argument concerning special circumstances pursuant to section 45(3) of the Act.

[53]           Accordingly, the application is dismissed with costs awarded to the respondent. If the parties are not able to agree on costs, the respondent may file submissions not to exceed three pages, in addition to its bill of costs, within 14 days of this decision. The applicant may respond in kind within 14 days thereafter.

 

JUDGMENT

THIS COURT’S JUDGMENT is that the application is dismissed with costs to the respondent.

“Peter Annis”

 

FEDERAL COURT

SOLICITORS OF RECORD

 

DOCKET:	T-942-13
STYLE OF CAUSE:	RIDOUT & MAYBEE LLP v HJ HEINZ COMPANY AUSTRALIA LTD.
PLACE OF HEARING:	OTTAWA, ONTARIO
DATE OF HEARING:	APRIL 29, 2014
JUDGMENT AND REASONS:	ANNIS J.
DATED:	MAY 8, 2014

APPEARANCES:

Jaimie Bordman	For The Applicant
Ahmed Bulbulia	For The Respondent

SOLICITORS OF RECORD:

Ridout & Maybee LLP Solicitors Ottawa, Ontario	For The Applicant
Macera & Jarzyna LLP Solicitors Ottawa, Ontario	For The Respondent