Date: 20050314
Citation: 2005 FCA 96
CORAM: NOËL J.A.
BETWEEN:
WIC TV AMALCO INC. and
GLOBAL COMMUNICATIONS LIMITED
Appellants
and
ITV TECHNOLOGIES, INC.
Respondent
Heard at Vancouver, British Columbia, on October 18 and 19, 2004.
Judgment delivered at Ottawa, Ontario, on March 14, 2005.
REASONS FOR JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: NOËL J.A.
EVANS J.A.
Date: 20050314
Citation: 2005 FCA 96
CORAM: NOËL J.A.
BETWEEN:
WIC TV AMALCO INC. and
GLOBAL COMMUNICATIONS LIMITED
Appellants
and
ITV TECHNOLOGIES, INC.
Respondent
REASONS FOR JUDGMENT
PELLETIER J.A.
INTRODUCTION
[1] The respondent ITV Technologies Inc. (Technologies) operates an internet-based webcasting business. Since 1974, the appellant, WIC TV Amalco Inc., and its successor in interest, Global Communications Limited (collectively, WIC), have operated an Edmonton-based television station, as well as television production facilities, in association with its ITV trade-marks. Technologies started its business in 1995, using ITV in its corporate name and its domain name (www.itv.net). In late 1996, WIC contacted Technologies seeking to dissuade it from using ITV in connection with its business because, in WIC's eyes, such use infringed WIC's registered trade-marks, particularly its word mark ITV.
[2] Instead of waiting for WIC to sue for trade-mark infringement, Technologies launched a pre-emptive strike by bringing an action for expungement of WIC's registered trade-marks, alleging that they were not registrable and had ceased to be distinctive of WIC's wares and services. WIC defended Technologies' action and counterclaimed, alleging that Technologies was infringing its trade-marks, passing off its wares for those of WIC, and depreciating its goodwill.
[3] In a judgment reported at (2003), 239 F.T.R. 203, Madam Justice Tremblay-Lamer of the Federal Court dismissed both the claim and the counterclaim. WIC appealed the dismissal of its counterclaim, but Technologies did not appeal the dismissal of its action for expungement.
THE FACTS
[4] The essential historical facts are set out succinctly in paragraphs 1 to 9 of the trial judge's reasons:
[1] This action springs from the use of the letters ITV by the plaintiff in its corporate name, business name and in the domain name for its web site, despite the objections of the defendant, which has several trade-marks registered incorporating the initials ITV.
[2] The plaintiff, defendant by counterclaim, ITV Technologies Inc., (hereinafter "ITV Technologies") is a corporation with an office in Vancouver, British Columbia. Since November 21, 1995, it operates an Internet based business with the name ITV.net and the web address www.itv.net. On this web site, it archives a variety of video footage, and transmits video and audio from live events over the Internet in accordance with the selections of the Internet users who access its web site with their computers.
[3] The defendant, plaintiff by counterclaim, WIC Television Ltd., (hereinafter "WIC") is a corporation with an office in Vancouver, British Columbia. It is in the business of television broadcasting, program production and multi-media communications.
[4] WIC is the registered owner of the following trademarks:
a) Trade-mark no. TMA 286,066 "ITV & DESIGN" which has been used since August 19, 1982, and which was registered on December 23, 1983, in association with the wares of films, video disks and cassettes, records, video tapes and audiotapes and the services of television programs, radio programs, cable television and animation production.
b) Trade-mark no. TMA 467,002 for the initials "ITV" which has been used since September 1, 1974 in association with the operation of a television station, and which was registered on December 3, 1996.
c) Trade-mark no. TMA 490,009 "ITV & DESIGN" which has been used since July 1, 1994 in association with television broadcasting services and which was registered on February 17, 1998.
[5] Under the provisions of the Broadcasting Act, WIC is the licensee of the television station, CITV, Edmonton, which has carried on business since 1974 under the name "ITV".
[6] Since January 20, 1995, WIC operates an Internet web site with the domain name "itv.ca". On its www.itv.ca web site, WIC communicates news, weather, and financial and entertainment information.
[7] In late 1996, WIC discovered the existence of ITV Technologies and its web site. WIC attempted to have ITV Technologies stop using the mark ITV. WIC's lawyer sent correspondence to ITV Technologies asking it to stop using the mark ITV in its corporate name and domain name. WIC also wrote Network Solutions Inc. ("NSI"), the United States company which grants Internet top-level domain names. Pursuant to NSI's formal dispute resolution policy, ITV Technologies agreed to adopt a new domain name, "eyetv.net". In July 1997, ITV Technologies changed its mind and commenced this action in the Federal Court.
[8] ITV Technologies filed its statement of claim on July 4, 1997. In its claim, ITV Technologies seeks to have WIC's trade-marks expunged on the grounds that they were not registrable and are no longer distinctive of WIC's wares and services.
[9] On October 24, 1997, WIC filed a statement of defence and counterclaim, and brought a motion for an interim injunction. In its counterclaim, WIC sues ITV Technologies for passing off contrary to subsection 7(b) of the Act, for trade-mark infringement contrary to section 20 of the Act, and for depreciation of the goodwill attached to its registered trade-marks, contrary to section 22 of the Act.
THE DECISION UNDER APPEAL
[5] One of the features of the trial was the extensive use of evidence drawn from the internet (the internet evidence). The trial judge began her reasons by briefly setting out the history of the dispute, followed by a discussion of the issues raised by the use of the internet evidence. She considered the issue of the use of the internet by witnesses in the course of giving their evidence at trial, as well as the admissibility of printed versions of various webpages which Technologies put into evidence to show widespread use of ITV in various contexts.
[6] The trial judge allowed witnesses to access various webpages in the course of giving their evidence because she found that it was the best evidence of the state of a webpage at the time of viewing. She also found that this access allowed witnesses to demonstrate features such as hyperlinking and interactive streaming, which could not have been demonstrated from a paper copy of the pages in question.
[7] Based upon her finding that both parties relied upon webpages taken from a website called www.archive.org, the trial judge concluded that the latter was a reliable archive of webpages as they existed at various times in the past. She also found that official websites, that is, sites about an organization maintained by that organization, were more reliable than unofficial websites, i.e., sites maintained by others offering content about an organization. The trial judge was prepared to accept evidence from an official site at face value, but she held that the reliability of evidence from an unofficial website had to be assessed by reference to factors such as an assessment of its sources, independent corroboration of the content, the possibility of modification of the site, etc.
[8] On the issue of the admissibility of printouts of webpages, the trial judge found that printouts showing various uses of ITV were admissible to show that use. However, neither the printouts, nor the existence of the websites from which they were drawn, established that anyone in Canada had read the documents in question or accessed the sites. Nor did they establish that the general public would have known what ITV meant at the relevant time.
[9] After reviewing the evidence led by both parties, the trial judge addressed the claim for expungement. The first ground of expungement argued by Technologies was that ITV was not registrable as a trade-mark under section 18 of the Trade-Marks Act, R.S.C. 1985, c. T-13 (the Act) for the reasons set out in section 12, specifically, ITV is clearly descriptive or deceptively misdescriptive of the character or quality of the wares or services in association with which the trade-mark is used, or it is the name, in any language, of the wares or services in connection with which it is used.
[10] The relevant provisions of the Act are set out below:
| 10. Where any mark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin or date of production of any wares or services, no person shall adopt it as a trade-mark in association with such wares or services or others of the same general class or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling that mark as to be likely to be mistaken therefor.
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12. (1) Subject to section 13, a trade-mark is registrable if it is not:
...
(b) whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin;
(c) the name in any language of any of the wares or services in connection with which it is used or proposed to be used;
(d) confusing with a registered trade-mark;
(e) a mark of which the adoption is prohibited by section 9 or 10;
...
18. (1) The registration of a trade-mark is invalid if
(a) the trade-mark was not registrable at the date of registration,
(b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced, or (c) the trade-mark has been abandoned, and subject to section 17, it is invalid if the applicant for registration was not the person entitled to secure the registration. |
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10. Si une marque, en raison d'une pratique commerciale ordinaire et authentique, devient reconnue au Canada comme désignant le genre, la qualité, la quantité, la destination, la valeur, le lieu d'origine ou la date de production de marchandises ou services, nul ne peut l'adopter comme marque de commerce en liaison avec ces marchandises ou services ou autres de la même catégorie générale, ou l'employer d'une manière susceptible d'induire en erreur, et nul ne peut ainsi adopter ou employer une marque dont la ressemblance avec la marque en question est telle qu'on pourrait vraisemblablement les confondre.
...
12. (1) Sous réserve de l'article 13, une marque de commerce est enregistrable sauf dans l'un ou l'autre des cas suivants_:
...
b) qu'elle soit sous forme graphique, écrite ou sonore, elle donne une description claire ou donne une description fausse et trompeuse, en langue française ou anglaise, de la nature ou de la qualité des marchandises ou services en liaison avec lesquels elle est employée, ou à l'égard desquels on projette de l'employer, ou des conditions de leur production, ou des personnes qui les produisent, ou du lieu d'origine de ces marchandises ou services;
c) elle est constituée du nom, dans une langue, de l'une des marchandises ou de l'un des services à l'égard desquels elle est employée, ou à l'égard desquels on projette de l'employer;
d) elle crée de la confusion avec une marque de commerce déposée;
e) elle est une marque dont l'article 9 ou 10 interdit l'adoption;
...
18. (1) L'enregistrement d'une marque de commerce est invalide dans les cas suivants_:
a) la marque de commerce n'était pas enregistrable à la date de l'enregistrement;
b) la marque de commerce n'est pas distinctive à l'époque où sont entamées les procédures contestant la validité de l'enregistrement; c) la marque de commerce a été abandonnée. Sous réserve de l'article 17, l'enregistrement est invalide si l'auteur de la demande n'était pas la personne ayant droit de l'obtenir. |
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[11] The trial judge concluded that the fact that the letters ITV have different meanings is an indication that WIC's marks are not clearly descriptive of its wares and services, as set out in paragraph 12(1)(b) of the Act. She also found that since ITV is capable of possessing different definitions, such as internet television, interactive television, instructive television or independent television, it cannot be the name of the wares or services offered by WIC, as set out in paragraph 12(1)(c). The trial judge concluded that ITV was not commonly used in Canada to designate the kind, quality, value or place of origin of wares and services offered by WIC at the relevant date. As a result, the registration of WIC's trade-marks was not prohibited by section 10, as set out in paragraph 12(1)(e).
[12] The trial judge then turned to the issue raised by paragraph 18(1)(b) of the Act, specifically whether WIC's marks had ceased to be distinctive at the time of Technologies' action. After reviewing the evidence of WIC's promotion of its marks over the years, the trial judge concluded that WIC's marks were well known and distinctive of its broadcasting services, particularly in Alberta. She also found that it was unlikely that, as of July 1997, the general population would have equated ITV with interactive television or internet television.
[13] So far as the evidence of the use of ITV in books, magazines or websites as an acronym for various phrases was concerned, the trial judge found that that evidence was insufficient to prove that the average consumer associated ITV with those wares and services. Furthermore, she found that there was little evidence that Canadians accessed any of the sites submitted by Technologies. In short, the trial judge concluded that the use of ITV "in web sites, magazines and newspapers did not render WIC's trade-marks non-distinctive." As a result, WIC was not liable to have its registrations expunged pursuant to paragraph 18(1)(b) of the Act.
[14] For those reasons, the action for expungement was dismissed.
[15] The trial judge then turned to the counterclaim and addressed the issue of infringement of WIC's marks by Technologies in connection with its business. The trial judge first reviewed the relevant provisions of the Act:
| 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.
...
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. |
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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.
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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. |
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[16] The trial judge undertook the analysis prescribed at subsection 6(5) of the Act. Dealing with paragraph 6(5)(a), which addresses the issue of distinctiveness, she decided that ITV's design trade-marks possess a certain degree of inherent distinctiveness, but that the word mark ITV possesses little inherent distinctiveness and is a weak mark. The trial judge noted the jurisprudence which holds that trade-marks formed purely of letters of the alphabet are generally weak marks. See GSW Ltd. v. Great West Steel Industries (1975), 22 C.P.R. (2d) 154 (F.C.T.D.). In addition, the widespread use of the letters ITV as an acronym for various phrases, such as independent television, internet television, interactive television and informational television, struck the trial judge as strong evidence that the word mark ITV is a weak mark.
[17] The trial judge went on to find that, by reason of WIC's promotional activities, the word mark ITV had nonetheless acquired a certain degree of distinctiveness in relation to the operation of an Edmonton television station.
[18] After reviewing the chronology of the parties' use of ITV, the trial judge found that this factor favoured WIC.
[19] Insofar as the nature of the wares or services are concerned, the trial judge concluded that while broadcasting and webcasting are related, they are not similar. She found that, at the relevant date, an ordinary person would have been able to grasp the differences between broadcasting and webcasting. She also concluded that WIC was not known in relation to its website.
[20] In considering the nature of the trade, the trial judge noted that WIC's services are provided through a television set, whereas Technologies' services are provided through a computer. She found that this would reduce the likelihood of confusion. The fact that WIC's viewership was primarily in Alberta, while Technologies had an international presence, also reduced the likelihood of confusion.
[21] Next, the trial judge considered the degree of resemblance of the marks in appearance, sound and idea suggested. The trial judge's findings on this point can be summarized as follows:
1- Technologies' mark bears little resemblance to WIC's design marks;
2- While the letters ITV are dominant in Technologies' mark and WIC's word mark, the use of the word "Technologies" and the suffix .net are sufficient to distinguish the two marks;
3- The use of the word "Technologies" in Technologies' mark suggests that it is in a technology business whereas WIC's marks are associated with the operation of a television station;
4- The suffix .net suggested to the public that Technologies was an internet based business; and
5- The fact that WIC was the owner of the word mark ITV did not entitle it to a monopoly of all domain names with the prefix ITV.
[22] Finally, the trial judge considered all of the surrounding circumstances. She found that the evidence of one instance of actual confusion was entitled to little weight. She thought this type of error inevitable when a party adopts a weak mark. Similarly, she did not attach much importance to the evidence of Technologies' receipt of e-mails destined for WIC because she thought it was likely the result of confusion between similar e-mail addresses. The trial judge discounted the expert evidence of Dr. Finn to the effect that Technologies' use of ITV led to confusion among consumers, since it was not based upon surveys and was not corroborated by the testimony of average consumers.
[23] After weighing all of these factors, the trial judge concluded that Technologies' use of ITV is not confusing with WIC's registered trade-marks and dismissed the claim for infringement.
[24] The trial judge then moved on to WIC's claim that Technologies' use of ITV depreciated WIC's goodwill, contrary to section 22 of the Act:
| 22. (1) No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto. |
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22. (1) Nul ne peut employer une marque de commerce déposée par une autre personne d'une manière susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à cette marque de commerce. |
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[25] The trial judge found that there were two elements to this cause of action. First, the public must make a connection between the two parties' marks. Second, the use of the first party's marks by the second party must have the probable effect of creating a negative impression in the public's mind which impairs the goodwill attached to the first party's registered marks. The evidence demonstrating use of ITV for identification purposes by numerous organizations led the trial judge to believe that the public would not immediately make a connection between ITV and WIC. In any event, even if the public associated Technologies with WIC, Technologies' reputation for high technology innovation would not depreciate WIC' s goodwill.
[26] The trial judge concluded her reasons by dealing with the appellants' allegation of passing off contrary to section 7 of the Act:
| 7. No person shall
(a) make a false or misleading statement tending to discredit the business, wares or services of a competitor;
(b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another;
(c) pass off other wares or services as and for those ordered or requested;
(d) make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to
(i) the character, quality, quantity or composition,
(ii) the geographical origin, or
(iii) the mode of the manufacture, production or performance of the wares or services; or
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada. |
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7. Nul ne peut_:
a) faire une déclaration fausse ou trompeuse tendant à discréditer l'entreprise, les marchandises ou les services d'un concurrent;
b) appeler l'attention du public sur ses marchandises, ses services ou son entreprise de manière à causer ou à vraisemblablement causer de la confusion au Canada, lorsqu'il a commencé à y appeler ainsi l'attention, entre ses marchandises, ses services ou son entreprise et ceux d'un autre;
c) faire passer d'autres marchandises ou services pour ceux qui sont commandés ou demandés;
d) utiliser, en liaison avec des marchandises ou services, une désignation qui est fausse sous un rapport essentiel et de nature à tromper le public en ce qui regarde_:
(i) soit leurs caractéristiques, leur qualité, quantité ou composition,
(ii) soit leur origine géographique,
(iii) soit leur mode de fabrication, de production ou d'exécution;
e) faire un autre acte ou adopter une autre méthode d'affaires contraire aux honnêtes usages industriels ou commerciaux ayant cours au Canada. |
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[27] The elements of passing off are the existence of goodwill, deception of the public due to misrepresentation, and actual or potential damage to the plaintiff. The trial judge found that there was no evidence of deception due to a misrepresentation. Technologies redirected the misaddressed e-mails to their proper destination and put a sign on its website indicating that it was not affiliated with WIC. In light of the trial judge's conclusion that there was no confusion between Technologies' use of ITV and WIC's trade-marks, she found that WIC could not succeed with respect to its claim for passing off.
[28] In the end result, the trial judge dismissed WIC's counterclaim.
THE EVIDENTIARY ISSUES
[29] At the hearing of the appeal, WIC raised a number of issues relating to the admissibility of evidence taken from the internet in the form of printouts of web pages. Technologies tendered this evidence primarily in support of its claim for expungement, in an attempt to show that ITV had become a generic term. It was also tendered to prove certain facts, such as the presence of certain books in the stacks of Canadian libraries. WIC objected to the admissibility of this evidence on the ground that it was clearly hearsay and did not come within any of the exceptions to the hearsay rule.
[30] No appeal was taken from the trial judge's dismissal of the claim for expungement. On the view which I take of the merits of the appeal with respect to the counterclaim, there is evidence to support the trial judge's position without having to rely upon the evidence taken from the internet. As a result, anything which I might say about the admissibility of this evidence would be unnecessary to the decision in the appeal. I might add that, in my view, the record is not sufficiently developed to provide an adequate factual underpinning for an informed consideration of the legal issues raised by the use of the internet as a source of documentary evidence.
[31] In light of this, is it preferable to leave the issues surrounding the admissibility of evidence originating on the internet to be dealt with at a time when the record is more fully developed and the issue is necessary to the outcome of the appeal. Given that I choose not to address these issues, it follows that I take no position on the trial judge's approach to the question of internet evidence.
THE APPEAL FROM THE DISMISSAL OF THE COUNTERCLAIM
STANDARD OF REVIEW
[32] Before reviewing the trial judge's reasons, I must address the issue of the standard of review. The Supreme Court of Canada's decision in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33, is clear and convincing authority that the standard of review of a trial decision by an appellate court on a question of fact is "palpable and overriding error" (para. 10). The same is true of inferences drawn from factual conclusions. As Iacobucci and Major JJ. said (at para. 23), when writing for the majority:
We reiterate that it is not the role of appellate courts to second-guess the weight to be assigned to the various items of evidence. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference-drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion. The appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts...
[33] They went on to say (at para. 24) that the deference due to a trial judge's findings of fact is not limited to cases where the trial judge has had the opportunity to assess the credibility of witnesses:
...We take the above comments of McLachlin J. to mean that, although the same high standard of deference applies to the entire range of factual determinations made by the trial judge, where a factual finding is grounded in an assessment of credibility of a witness, the overwhelming advantage of the trial judge in this area must be acknowledged. This does not, however, imply that there is a lower standard of review where witness credibility is not in issue, or that there are not numerous policy reasons supporting deference to all factual conclusions of the trial judge. In our view, this is made clear by the underlined portion of the above passage. The essential point is that making a factual conclusion, of any kind, is inextricably linked with assigning weight to evidence, and thus attracts a deferential standard of review.
[34] On a question of mixed fact and law, the standard of "palpable and overriding error" applies unless one can disentangle from the question an extricable question of law. If such a question can be identified, then the standard of review, in relation to that question, is correctness. An example of an extricable question of law is the misapplication of a legal test by ignoring material facts is provided (at para. 39) in Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748 :
...After all, if a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision-maker considers only A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C. If the correct test requires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law.
[35] Applying this analysis to the question of confusion, the trial judge's weighing of the evidence and her conclusions of fact are sheltered from review unless some palpable and overriding error can be shown. The trial judge's conclusions on questions of mixed fact and law are subject to the same standard of review, unless it can be shown that the trial judge has applied the wrong test, or otherwise erred on an extricable question of law, or her application of the right test is vitiated by palpable and overriding error.
[36] Furthermore, where a judge is called upon to apply the multifaceted statutory test for infringement found at subsection 6(5) of the Act, where the weight to be assigned to each factor varies with the circumstances, an error in the assessment of a particular factor does not amount to a palpable and overriding error, unless it is such that it is determinative of the result. To hold otherwise is to make each factor critical to the analysis, a conclusion which is clearly not supported by the jurisprudence. See Garbo Group Inc. v. Harriet Brown & Co. (1999), 176 F.T.R. 80 at para. 49 per Evans J. (as he then was).
INFRINGEMENT OF WIC'S ITV WORD MARK
[37] The trial judge approached the question of infringement by considering the factors set out at subsection 6(5) of the Act. WIC says that the trial judge's treatment of the first factor, the inherent distinctiveness of the trade-marks and the degree to which they have become known, is inadequate because she consistently underestimated the degree to which WIC's marks have become known in connection with services other than its television station. In particular, WIC criticized the trial judge's conclusion that WIC's ITV mark had not become known in relation to its website, even though it was well known in association with the operation of its television station.
[38] WIC argues that the trial judge should have found that WIC's marks were very well known across Canada and that they were better known than the respondent's marks. Where the question before the Court is one of degree, requiring a judge to decide where an element falls along a continuum, the fact that the judge decides that the element falls higher or lower on the continuum than expected does not amount to a palpable and overriding error, unless there has been a failure to consider relevant evidence. The fact that specific portions of the evidence are not referred to in a judge's reasons does not mean that the judge failed to consider that evidence. See R. v. Mohamad (2004), 69 O.R. (3d) 481 (C.A.) at para. 67.
[39] On the issue of inherent distinctiveness, the trial judge's conclusion that ITV lacks inherent distinctiveness was supported by the fact that it consists of three letters of the alphabet. The trial judge also relied upon the internet evidence of the use of ITV in acronyms. This is one of two issues in the counterclaim to which the internet evidence was relevant, unlike the claim for expungement where the issue of distinctiveness was pervasive. Even if the trial judge had rejected the internet evidence, she was entitled to rely upon the dictionary evidence tendered by Technologies which showed the various uses to which the letters ITV have been put. The use of dictionary evidence from outside Canada was sanctioned in Home Juice Co. v. Orange Maison Ltée, [1970] S.C.R. 942. WIC's challenge to the trial judge's conclusion that its mark had not been made known in relation to its website is not determinative of any issue. In any event, the trial judge found that the factor described at paragraph 6(5)(a) of the Act favoured WIC.
[40] In the present case, I find that the trial judge's conclusion on this issue is supported by the evidence before her.
[41] WIC is very critical of the trial judge's conclusions as to the nature of the wares or services, as set out in paragraph 6(5)(c). Once again, this criticism is based upon the trial judge's treatment of the evidence with respect to WIC's website and WIC's involvement with the internet. The nub of WIC's position is found in the following proposition at paragraph 67 of its Memorandum of Fact and Law:
The fact is, WIC was on the Internet first, making audio, video and other content available in association with its well established trade marks. Given all the activities in which WIC had been involved, and the "convergence" environment of the period, the conclusion is inescapable that the marketplace would have seen the Respondent's services as similar, related, and connected to and associated with WIC.
[42] WIC's argument is essentially that, given its investment in technological change, the market place would have concluded that a webcasting enterprise carried out under the ITV banner would have been perceived as an extension of WIC's other activities. Whatever may have been WIC's intentions in terms of expansion into webcasting, the jurisprudence is clear that a party's assertion of expansion into new areas of products or services, or the possibility of such an expansion, is insufficient to support a finding of confusion. See Joseph E. Seagram & Sons Ltd. v. Canada (Registrar of Trade Marks) (1990), 38 F.T.R. 96.
[43] The trial judge's conclusion on this branch of the statutory test was that the services offered by WIC and Technologies were related but not similar, and that an ordinary consumer would have been able to grasp the difference. It is not for this Court to reweigh the evidence to see if it supports a different conclusion. So long as there is evidence that provides rational support for the trial judge's conclusion on this point, and there is, we are not justified in intervening.
[44] The next factor to be considered is the nature of the trade. The trial judge identified two characteristics of the trade which she thought likely to reduce the risk of confusion. The first is the difference in the technology and the second is the geographical distribution of the parties' markets. The trial judge found that the fact that WIC's services were offered via broadcasting technology, while Technologies' was offered via internet technology, tended to reduce the likelihood of confusion. The trial judge also found that Technologies catered to a broader geographically market, than did WIC.
[45] In its Memorandum, WIC has identified circumstances which would support a different conclusion on this issue. But the test is not whether there is evidence capable of supporting a different conclusion; the test is whether there is evidence rationally capable of supporting the trial judge's conclusion. Since there is such evidence, this Court must defer to the trial judge's findings of fact and the inferences drawn from them.
[46] The degree of resemblance of the marks in terms of appearance, sound and idea suggested is the next factor which the trial judge considered. She found that WIC's design marks bore little similarity to Technologies' mark. As to Technologies' use of ITV, in conjunction with Technologies Inc. and www.itv.net, the trial judge found that the dominant element of both names was the letters ITV, but that the use of "Technologies" and the suffix ".net" were sufficient to further reduce the likelihood of confusion between those marks and WIC's ITV word mark. In support of her conclusion, the trial judge referred to jurisprudence which holds that where marks lack inherent distinctiveness, consumers use small differences to distinguish one mark from another. See Kellogg Salada Canada Inc. v. Canada (Registrar of Trade Marks), [1992] 3 F.C. 442 (C.A.) at para. 14. The trial judge's conclusion on this element is supported by the evidence.
[47] The last factor to be considered is the whole of the surrounding circumstances. WIC argued that the trial judge was bound to give effect to the evidence of actual confusion, which consisted of misdirected e-mail messages and one case of consumer confusion. The trial judge gave the evidence of e-mail misdirection very little weight on the ground that it was more likely indicative of an error as to an e-mail address than confusion as to the identity of the source of the services in question. As for the case of consumer confusion, a WIC client who received advertising material from Technologies and was confused as to the source of the material, the trial judge obviously did not consider herself bound by a single example of confusion. While it is true that the Court can draw an adverse inference from the absence of evidence of actual confusion in certain cases (see Christian Dior, S.A. v. Dion Neckwear Ltd. (C.A.), [2002] 3 F.C. 405, 2002 FCA 29), it does not follow that a single instance of confusion is conclusive.
[48] WIC also took exception to the trial judge's dismissal of the evidence of its expert, Dr. Finn, whose evidence was that Technologies' use of its ITV marks would lead a substantial number of Canadians to infer that Technologies' services were associated with those of WIC. The trial judge rejected this evidence, on the basis that it was not supported by surveys or other objective evidence. WIC did not dispute that the trial judge was entitled to reject expert evidence, but it insisted that such rejection must be justified.
[49] In my view, the trial judge did justify her refusal to give effect to Dr. Finn's evidence. Experts do not appear before the Court as experts at large. They are qualified as experts in a particular domain and are allowed to offer opinion evidence only within the bounds of their expert qualification. In this case, it appears that the Court accepted Dr. Finn as an expert in "the marketing of film, television and new media in Canada from a business and economic perspective and consumer reaction and perceptions thereof." I understand this to mean that Dr. Finn could testify about the economics of marketing film, television and new media in Canada. I am not entirely certain what is meant by "consumer reaction and perceptions thereof" but I take "thereof" to be a reference to the economics of marketing film, television and new media. Accordingly, Dr. Finn was in a position to offer expert opinion about consumer reaction to the economics of marketing film, television and new media.
[50] Dr. Finn's evidence on the issue of confusion consisted of the following:
...
39. In my opinion, the use by the Plaintiff of its ITV Trade-marks in Canada in 1995 and through to 2000 likely led a substantial number of Canadians to the inference that the plaintiff's services and business were associated with WIC, either by being those of WIC, or by being those of a business commercially associated with WIC; for example, a related company or licensee.
40. The Canadians of whom I speak are persons of average intelligence acting with ordinary caution in the relevant markets. They have a general recollection of WIC's ITV Trade-marks and business and then encounter the plaintiff's ITV Trade-marks and business and form a first impression as a result.
41. In my view, the use by the plaintiff of its ITV Trade-marks conveyed the false and misleading message that its services and business were those of WIC or a commercially associated entity.
[A.B., vol. 23, tab 96, p. 5766.]
[51] When one compares Dr. Finn's expert qualification to the opinion expressed in these paragraphs, it is clear that they have nothing to do with consumer reaction to the economics of marketing film, television and new media. Dr. Finn has purported to apply the test of imperfect recollection and first impression, a matter which I would not consider to fall within his professional qualifications. The trial judge was entitled to conclude that Dr. Finn was simply offering an opinion for which no foundation existed.
[52] The trial judge took into consideration all of the factors listed in subsection 6(5) of the Act in coming to the conclusion that Technologies' marks did not infringe WIC's registered trade-marks. The trial judge committed no palpable and overriding error in coming to that conclusion. It is not for this Court to reweigh the evidence for itself so as to come to a different conclusion. The appeal on this point must be dismissed.
THE CLAIM FOR DEPRECIATION OF GOODWILL
[53] Section 22 of the Act proscribes the use of a trade-mark in a manner which will reduce the goodwill attached to the mark:
22. (1) No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill
attaching thereto.
22. (1) Nul ne peut employer une marque de commerce déposée par une autre personne d'une manière susceptible d'entraîner la diminution de la valeur de l'achalandage attaché à cette marque de commerce.
[54] The trial judge's disposition of this claim rests upon her conclusion that, even if there was confusion between Technologies' marks and WIC's registered marks, the nature and quality of Technologies' services would not have led to any diminution of the goodwill associated with WIC's registered trade-marks.
[55] The meaning of the phrase "depreciating the value of the goodwill attaching [to a registered trade-mark]" was considered in Clairol International Corp. v. Thomas Supply & Equipment Co., [1968] 2 Ex. C. R. 552. In that case, the defendant, who sold hair colouring products, included in the packaging of his products a colour comparison chart which identified the plaintiff's products by means of its trade-marks. It was held that this constituted use of the plaintiff's registered trade-mark. The issue then became whether this use depreciated the goodwill associated with the plaintiff's goodwill. Thurlow J. (as he then was) approached the problem in the following way:
[45] ...The defendants have both of these trade marks on the packages in which their wares are distributed and are thus using the marks in association with their wares within the meaning of section 4. They do this for the purpose of facilitating persons familiar with the plaintiffs' products to switch to using their products. Whether the purpose is legitimate or not it is not the name of the plaintiff but the plaintiffs' trade marks that are used for this purpose. That this is a course of conduct which would be likely to depreciate the goodwill attaching to the plaintiffs' marks is I think obvious but even that is made overwhelmingly clear by the fact that of all the persons competing in the hair color trade it is only the plaintiffs whose marks are used in the comparison charts on the defendants' packages, by the evidence of Mr. Thomas that the purpose of putting the charts on the packages was to promote the sale of their goods and by the evidence of Mr. Schwarz, who was the party responsible for the preparation of the wording on the packages, that the purpose was to suggest to customers that they could get approximately the same result from using a Revlon COLORSILK product as from the corresponding Clairol product in the hope of getting a part of the market enjoyed by the plaintiffs who represented the dominant competition in the field. When parties have done what is complained of for the express purpose of taking away custom enjoyed by competitors and persist in it I see no reason to doubt that they are succeeding in their purpose.
[Emphasis added.]
[56] There is nothing in the evidence which would allow the conclusion that WIC lost any business as a result of the use of the ITV mark by Technologies, for the simple reason that WIC did not sell webcasting products. Nor was there any evidence to show a gain in Technologies' business at the expense of WIC's business.
[57] Other cases where depreciation of goodwill have been found include Source Perrier (Société Anonyme) v. Fira-Less Marketing Co. Limited, [1983] 2 F.C. 18 (T.D.), where the defendant sold bottled water under the name "Pierre Eh" in bottles designed to resemble those used by the plaintiff. Dubé J. found that this led to depreciation of the plaintiff's goodwill, because the defendant's spoof of the plaintiff's marks and image tended "to dilute the quality of the [plaintiff's] trade-marks, to impair its business integrity established over the years, and to cause injury to its goodwill". In this case, there is no evidence which would suggest that WIC's business reputation would suffer by association with Technologies.
[58] In the end result, the trial judge's conclusion on this aspect of WIC's counterclaim ought not to be disturbed.
PASSING OFF
[59] The final element of WIC's counterclaim against Technologies is the allegation of passing off. WIC's claim is based upon paragraph 7(c) of the Act:
| 7. No person shall
(a) make a false or misleading statement tending to discredit the business, wares or services of a competitor;
(b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another;
(c) pass off other wares or services as and for those ordered or requested; |
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7. Nul ne peut_:
a) faire une déclaration fausse ou trompeuse tendant à discréditer l'entreprise, les marchandises ou les services d'un concurrent;
b) appeler l'attention du public sur ses marchandises, ses services ou son entreprise de manière à causer ou à vraisemblablement causer de la confusion au Canada, lorsqu'il a commencé à y appeler ainsi l'attention, entre ses marchandises, ses services ou son entreprise et ceux d'un autre;
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The constitutional validity of section 7 turns on its construction as legislation in support of federal jurisdiction over trade-marks. See MacDonald v. Vapor Canada Ltd., [1977] 2 S.C.R. 134 and Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd., [1987] 3 F.C. 544 (C.A.).
[60] The elements of passing off include deception of the public by means of a misrepresentation; in the case of an action under section 7 of the Act, the misrepresentation must be in relation to a trade-mark. See Kirkbi AG v. Ritvik Holdings Inc., [2004] 2 F.C.R. 241 (C.A.) at para. 38. The trial judge found that the claim for passing off failed because the public was not deceived. In particular, she found: "At no time did Technologies portray to the consuming public that it was WIC or that it was associated in any sort of commercial fashion with WIC."
[61] WIC sees in this comment an indication that the trial judge considered that the misrepresentation underlying passing off must be intentional, whereas it has been clear for some time that the issue is whether the public is misled, not whether there was an intention to mislead. See Consumers Distributing Co. v. Seiko Time Canada Ltd. et al., [1984] 1 S.C.R. 583 at page 601. To the extent that the trial judge dismissed the claim for passing off on the basis of a lack of intention to deceive, she applied the wrong test and, in doing so, erred in law. However, this error is not material to the result in light of her conclusion as to the absence of confusion between WIC's ITV word mark and Technologies' marks (see para. 184, 185 and 189). If there was no confusion, there can have been no deception.
[62] In the result, this ground of appeal must fail as well.
CONCLUSION
[63] WIC's appeal from the decision of Tremblay-Lamer J. must be dismissed. The trial judge's conclusion of non-infringement, based upon her consideration of the factors listed in subsection 6(5) of the Act, discloses no palpable and overriding error which would justify this Court's intervention. The same is true of her conclusions with respect to depreciation of goodwill and passing off.
[64] For those reasons, I would dismiss the appeal with costs to the respondent.
"J.D. Denis Pelletier"
J.A.
"I agree
Marc Noël J.A."
"I agree
John M. Evans J.A. "
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-469-03
STYLE OF CAUSE: WIC TV AMALCO INC. and GLOBAL COMMUNICATIONS LIMITED and ITV TECHNOLOGIES INC.
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: October 18 and 19, 2004
REASONS FOR JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: NOËL J.A.
EVANS J.A.
DATED: March 14, 2005
APPEARANCES:
Brian D. Edmonds
R. Barry Fraser
FOR THE APPELLANTS
Paul D. Gornall
FOR THE RESPONDENT
SOLICITORS OF RECORD:
McCarthy Tetrault
Toronto, ON
FOR THE APPELLANTS
Barrister & Solicitor
Vancouver, B.C.
FOR THE RESPONDENT