Chateau-Gai Wines Ltd. v. Institut National des Appellations d’Origine des Vins et Eaux-de-Vie et al.

Chateau-Gai Wines Ltd. v. Institut National des Appellations d’Origine des Vins et Eaux-de-Vie et al.
Collection
Supreme Court Judgments
Date
1974-04-01
Report
[1975] 1 SCR 190
Judges
Fauteux, Joseph Honoré Gérald; Abbott, Douglas Charles; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Laskin, Bora; Dickson, Robert George Brian
On appeal from
Quebec
Subjects
Intellectual property
Decision Content
Supreme Court of Canada
Chateau-Gai Wines Ltd. v. Institut National des Appellations d’Origine des Vins et Eaux-de-Vie et al., [1975] 1 S.C.R. 190
Date: 1974-04-02
Chateau-Gai Wines Limited (Defendant) Appellant;
and
Institut National des Appellations d’Origine des Vins et Eaux-de-Vie et al. (Plaintiffs) Respondents.
1973: November 30, December 4, 5, 6; 1974: April 2.
Present: Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Spence, Pigeon, Laskin and Dickson JJ.
ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC
Trade marks—Appellations of origin—Damages—Injunction—Trade treaty—Not ratified by both parties—Coming into force by agreement—Priority of implementing statute—Legal weight of certificate from the Minister—Registered word used as common noun—Prolonged inaction—Registered by competent services—Res judicata—The Unfair Competition Act, 1932, 1932 (Can.), c. 38, ss. 12 and 30—The Canada-France Trade Agreement Act, 1933, 1932-33 (Can.), c. 31—The Department of State Act, R.S.C. 1927, c. 189, s. 5—Code of Civil Procedure, art. 752.
Respondents and their trade association, the Institut National des Appellations d’origine des vins et eaux-de-vie, brought an action in the Superior Court of the Province of Quebec for an injunction and damages on the basis of a trade treaty between Canada and France, brought into force in Canada by The Canada-France Trade Agreement Act. Under art. 11 of the treaty respondents sought to have the word “Champagne”, as an appellation of origin of their wines, protected against use by the appellant to describe any of its sparkling wines produced in Canada. The Canada-France Trade Agreement Act was assented to on May 23, 1933 and came into force on June 10, 1933. On October 18, 1934 the Commissioner of Patents registered the trade mark “Champagne” for wines, in the name of the Government of the French Republic, in accordance with The Unfair Competition Act, 1932 and indicated June 10, 1933 as the date of registration.
Article 16 of the treaty provides that the “Agreement shall be ratified and the ratifications… exchanged… as soon as possible”, and that it shall come into force on a date agreed on by the parties. However, a certificate from the Secretary of State for External Affairs stated that the exchange of ratifications never took place, but that the date for the coming into force of the Agreement was fixed by joint agreement of both countries.
A decision of the Court of Appeal affirming a judgment of the Superior Court condemned appellant to pay damages and enjoined it to refrain from using the appellation “Champagne” at any time or in any place. An appeal was entered in this Court.
Held (Abbott, Judson, Spence and Laskin JJ. dissenting): The appeal should be allowed in part by way of reducing the award of damages.
Per Fauteux C.J. and Martland, Ritchie, Pigeon and Dickson JJ.: The treaty does not state that it will only come into force after ratification, it merely provides for ratifications and their exchange. There is no rule of law by which a promise stipulated in a treaty must be presumed a suspensive condition in the absence of any indication to that effect. The parties agreed the treaty would come into force on a date to be fixed by joint agreement. Lack of ratification cannot have a bearing on the validity of the Agreement, in the absence of any action by the public authority to terminate or rescind it. So far as the certificate from the appropriate Minister is concerned, it is conclusive proof as regards the value of the signatories’ powers and the authority of the government they represent. In the interpretation of treaties the approach of the government, though not conclusive, must be given great weight.
Appellant cannot be authorized to include in the record of this case an Exchequer Court judgment, rendered at its request against the Attorney General of Canada and ordering that the registration be deleted subject to certain reservations. The Exchequer Court proceedings were subsequent to the suit therein, and if appellant intended to set up the judgment against respondents it should have acted with reasonable diligence, so that those persons who were not parties to the application were not deprived of the opportunity to seek to intervene in the appeal to this Court, in case the right to rely on the decision as res judicata were recognized.
Concerning the validity of the registration, the Unfair Competition Act, 1932 departed from the traditional principles governing trade marks. Even though the requirements of this Act were not followed to the letter in the registration of the word “Champagne” as a trade mark intended to indicate the origin of wines, the provisions of The Canada-France Trade Agreement Act, 1933 have the force of law “notwithstanding the provisions of any law in force in Canada”. Article 11 of the Agreement gives the French government the right to request registration “without charge”, provided that the appellation in question has not become public property in France, which is the case here. Accordingly, art. 11 should prevail over the provisions of The Unfair Competition Act.
The principle barring the holder of a trade mark from claiming an exclusive right to it, when he has tolerated the use of the word registered as a common noun describing a product of a certain kind rather than a product manufactured by the holder, cannot apply to counter the stipulations of the Agreement and the Act. In undertaking to ensure respect for appellations of origin “which have not become public property” in France, Canada intended that the criterion to be used in deciding whether the appellation had lost its private character and become a common noun would be the situation prevailing in the country of origin. The obligation to respect appellations of origin has not been extinguished by the period of thirty years which has elapsed between the registration and the proceedings.
An administrative directive in which the word “Champagne” was used as a common noun describing sparkling wine cannot have any legal effect whatever on the 1933 Act. So far as the final paragraph of art. 11 of the Agreement is concerned, its sole purpose is to extend the prohibition of false appellations of origin to every form of competition contrary to honest usages in industrial and commercial matters and of such a nature as to create a confusion with the products of a competitor.
With regard to the injunction, the right to apply for it is recognized by art. 752 of the Code of Civil Procedure. It is the usual remedy against any trader using a commercial designation to which he is not entitled, and should be recognized under the general principles as a consequence of the Act which imposes a legally binding prohibition against using without right the appellations of origin registered under the 1933 Trade Agreement. Further, appellant Institute is an organization vested with legal personality by the executive enactment creating it, and is entitled to be a party to legal proceedings. With regard to the damages awarded plaintiffs other than the Institute, the quantity of genuine Champagne not sold in Quebec between April 1, 1962 and March 31, 1964 because appellant was marketing a sparkling wine designated “Canadian Champagne” could not be more than a rather small portion of the quantity sold by it under that designation, since sales of genuine Champagne were about ten per cent greater than the total sales of “Canadian Champagne” during the same period. The amount of damages awarded by the trial judge, amounting to $1.50 per bottle of “Canadian Champagne”, is much too high and must be reduced. These are not “moral damages” but pecuniary losses.
Per Abbott, Judson, Spence and Laskin JJ. dissenting: Article 16 is not a substantive provision affecting the operation of the implementing statute, but a procedural provision respecting the international force of the Treaty. The contracting states were entitled by mutual agreement to substitute a different method of arriving at a treaty arrangement and giving it force than the one originally agreed upon in the Treaty. The retention of art. 16 in the Schedule to the implementing Act added nothing to the effect of the Act in respect of the substantive terms of the Treaty. It was s. 5 of the Act implementing the Treaty that governed the domestic force of the Treaty when the latter had been made effective internationally between the contracting states.
Article 11 read as a whole affords protection in Canada only to those products of France whose appellations of origin are registered with the “competent services” of Canada. In terms of what it purported to be, the word “Champagne” could not be validly registered as a trade mark. The registration on which respondents based their action was not one “with the competent services” of Canada. The appellation of origin should have been registered under s. 5 of The Department of State Act. Moreover, s. 4 of the Act implementing the Treaty envisaged Canadian governmental action to give effect to the Agreement for domestic purposes. If this has not been done, it cannot be laid at the door of the appellant so as to deprive it of a defence to an exceptional claim arising against it. Further, no additional force is given to the terms of the Treaty as domestic law, beyond what inheres in them, by reason of the inclusion in the implementing statute of the words “nothwithstanding the provisions of any law in force in Canada”. These words merely give the Treaty an ascendancy against any other legislation that might conflict with it, but do not dissolve any obligations of proof that arise under the terms of the Treaty itself.
On the question of a permanent injunction, by reason of the respondents’ long and unexplained delay when fully aware of their legal rights and of the invasion thereof by the appellant and others, it is inequitable to apply this drastic remedy against the appellant. There was not even the threat of legal proceedings over the thirty year period between implementation of the treaty by the Act and commencement of the action, merely an effort by the French government in 1956 and 1957 to exert diplomatic pressure. That is not enough, especially when the long delay has not been explained, to support respondents’ claim to equitable relief.
As to the matter of damages, to the degree that case law has assimilated the civil law concept of moral damages to the common law concept of general damages, proof of pecuniary loss must be offered if more than a nominal award is to be justified. Although moral damages may, inter alia, include a sum for damage to reputation, the award in this case cannot be so justified because the respondents based their claim for damages on pecuniary loss.
[Corporation of the Village of Deschenes v. Loveys, [1936] S.C.R. 351; National Starch Manufacturing Company v. Munn’s Patent Maizena and Starch Company, [1894] A.C. 275, distinguished; Schuler A.G. v. Wickman Tools, [1973] 2 W.L.R. 683; Charlton v. Kelly, (1913), 229 U.S. 447; Duff Development v. Government of Kelantan, [1924] A.C. 797; Terlinden v. Ames, (1902), 184 U.S. 270; Re The Blonde [1922] 1 A.C. 313; Chateau-Gai Wines Ltd. v. The Government of the French Republic, (1967), 61 D.L.R. (2d) 709; [1969] Que. Q.B. 445; Polai v. City of Toronto, [1973] S.C.R. 38; Bollinger and others v. The Costa Brava Wine Company Limited, [1961] R.P.C. 116; Minister of National Revenue v. Inland Industries, (1971), 23 D.L.R. (3d) 677; [1974] S.C.R. 514; L’Association des Propriétaires des Jardins Taché Inc. v. Entreprises Dasken Inc., [1974] S.C.R. 2; La Fraternité des Policiers v. City of Montreal, [1962] S.C. 458, referred to.] APPEAL from a judgment of the Court of Queen’s Bench, Appeal Side, Province of Quebec[1], affirming a judgment of the Superior Court. Appeal allowed in part, Abbott, Judson, Spence and Laskin JJ. dissenting.
J. Martineau, Q.C., and B. Lacombe, for the defendant, appellant.
C. Robinson, Q.C., and G. Emery, Q.C., for the plaintiffs, respondents.
The judgment of Fauteux C.J. and Martland, Ritchie, Pigeon and Dickson JJ. was delivered by
PIGEON J.—This appeal is against a decision of the Court of Appeal of Quebec, which with one dissent upheld a judgment of the Superior Court condemning appellant to pay damages in the amount of $75,000 and enjoining it to refrain from using the appellation “Champagne” at any time or in any place. This judgment was based on The Canada-France Trade Agreement Act, 1933 (23-24 Geo. V, c. 31) and the treaty contained in a Schedule thereto. The Act provides, inter alia:
1. This Act may be cited as The Canada-France Trade Agreement Act, 1933.
2. The Trade Agreement between Canada and France set out in the Schedule to this Act, is hereby approved, and shall have the force of law notwithstanding the provisions of any law in force in Canada.
…
4. The Governor in Council may, notwithstanding the provisions of any law in force in Canada, make such appointments, establish such offices, make such orders and regulations and do such acts and things as are deemed necessary to carry out the provisions and intent of the said Agreement.
5. This Act shall come into force on a day to be fixed by proclamation of the Governor in Council. A proclamation fixing June 10, 1933 as the day the Act came into force was duly published. The relevant provisions of the Trade Agreement are the following:
ARTICLE 11
Each of the High Contracting Parties agrees to protect within its territorial limits, the natural or manufactured products of the other Party against all forms of dishonest competition, particularly with regard to the use, for commercial purposes, of false indications relative to the place of origin, nature, kind or substantial qualities of goods.
Each of the High Contracting Parties agrees to insure within its territorial limits, respect for the appellations of origin of wine, agricultural or other products of the other Party, which shall have been registered by the latter with the competent services of the other Party.
There shall only be accepted for registration, under the conditions of the present Article, names which are recognized and protected as appellations of origin which have not become public property within the territory of the Party which gives notice thereof.
Appellations of origin shall be registered without charge by each of the High Contracting Parties with the competent services of the other Party.
Appellations of origin thus registered shall not, in any case, be used commercially for the purpose of describing goods other than those which have a definite right to such names.
This prohibition shall apply to every form of competition contrary to honest usages in industrial and commercial matters and of such a nature as to create a confusion with the products of a competitor.
…
ARTICLE 16
The present Agreement shall be ratified and the ratifications shall be exchanged at Ottawa as soon as possible.
It shall come into force on the date which the High Contracting Parties shall fix by joint agreement.
ARTICLE 17
The present agreement is concluded for one year from the date of its coming into force and may be rescinded by three months’ notice before the date of its termination. It may be extended by tacit consent, each of the High Contracting Parties reserving the right to rescind it at any time to take effect three months thereafter.
This Agreement is dated May 12, 1933. A certificate from the Secretary of State for External Affairs, dated April 19, 1967, states the following concerning it:
The exchange of Instruments of Ratification referred to in Article 16 in fact never took place. Nevertheless, in the series of exchanges which took place in May and early June of 1933 both countries fixed by joint agreement the date for the coming into force of the Agreement and, in their subsequent exchanges and practice, they have regarded the Agreement as having come into force as of June 10, 1933 and as having remained in force from that date.
Appellant contends that in the absence of ratification by both parties, the Agreement is not in force. This was the ground on which the dissenting opinion of Casey J.A. was based in the Court of Appeal. Casey J.A. saw in Art. 16 what he called “a condition precedent”, and refused to accept the aforementioned certificate as conclusive proof that the Agreement was in existence.
It should be noted, first, that the Agreement does not state that it will only come into force after ratification. The provision regarding its coming into force is a separate paragraph in art. 16, following merely on the provision for ratifications and their exchange. We were not referred to any principle by which a stipulation of this nature should be regarded as a suspensive condition. For my part, I know of no rule of law by which a promise stipulated in a treaty must be presumed a suspensive condition in the absence of any indication to that effect. It may be argued that in any synallagmatic contract all stipulations are mutually in consideration one of the other. That is true, but it does not make of them suspensive conditions. Here, on the contrary the fact that “ratification” is stipulated means that a suspensive condition is not involved. Indeed, the very nature of ratification is that it has a retroactive effect. In Planiol and Ripert, Traité pratique de droit français, Vol. XI, No. 1499 (p. 949), there is the following:
[TRANSLATION] Ratification has a retroactive effect: the document ratified is, from the start, proper and deemed to have been made in the name of a validly represented principal. This retroactivity is good against third parties, even though it injuriously affects rights acquired by the latter prior to ratification.
…
It should also be noted, in any case, that even where the word “condition” is used, this does not necessarily mean a condition in the strict sense, whether suspensive or resolutory. On the contrary, the nature of the stipulation must be determined from the contract as a whole, as the House of Lords recently held in Schuler A.G. v. Wickman Tools[2]. The stipulation was worded as follows:
It shall be [a] condition of this agreement that:—(i) Sales shall send its representatives to visit the six firms whose names are listed in the Schedule hereto at least once in every week …
It was held that an arbitrator had erred in deciding that this wording meant that the first breach of this undertaking terminated the contract.
In the agreement under consideration here the parties did not see fit to stipulate that the agreement would only become in force after the ratifications had been exchanged. What they did agree on was that it would become in force on a date to be fixed by joint agreement. Obviously, either party would have been free not to agree on a date before ratifications were exchanged, but they did consider it appropriate to agree upon June 10 without waiting for the promised ratification. Nothing in the document precluded this decision, which was made by the competent authority. This being the case, I fail to see on what legal principle lack of ratification could have a bearing on the validity of the Agreement, in the absence of any action by the public authority to terminate or rescind it. There is no provision to the effect that the agreement will lapse if it is not ratified, and I cannot accept that this can be implied.
If there were any doubt on this point, it should be borne in mind that in the interpretation of treaties the approach of the government, though not conclusive, must be given great weight, as the Supreme Court of the United States observed in Charlton v. Kelly[3], at p. 468:
… A construction of a treaty by the political department of the Government, while not conclusive upon a court called upon to construe such a treaty in a matter involving personal rights, is nevertheless of much weight.
In the case at bar, I do not consider it is necessary to decide whether one should go so far as to say that a certificate from the appropriate Minister is conslusive proof that an agreement exists. It is certain that such a certificate has this result as regards the value of the signatories’ powers and the authority of the government they represent (Duff Development Co. v. Government of Kelantan[4]). I am inclined to the opinion that the question of whether the treaty is in force, as opposed to what its effect should be, is also wholly within the province of the public authority. This is what was held by the Supreme Court of the United States with respect to an extradition treaty in Terlinden v. Ames[5]. In The Blonde[6], the Privy Council held that an international agreement which the British government had decided to honour, despite a provision by virtue of which the agreement was not obligatory since all the belligerents had not become parties to it, should be enforced, and observed (at p. 325): “the objection is one that can be waived”.
I see nothing in the 1933 Act that prevented the Canadian government from agreeing on a date of coming into force without waiting on the ratification promised by the French government. Moreover, I consider that the proclama- tion fixing June 10, 1933 as the date of coming into force of the Act had at the same time the effect of bringing into force the treaty provisions, so that it sufficed in obligating the courts to give them effect without any need for further evidence that the date in question was the agreed date.
However, to give effect to Art. 11 it was not enough that the Act and the agreement come into force. The French appellations of origin for which protection was sought had also to be registered “with the competent services of the other Party”. The record indicates that on February 27, 1934, there was sent on the part of the French government a letter to the Prime Minister of Canada, Secretary of State for External Affairs, asking for registration of a series of appellations of origin relating to wines, and among these was “Champagne”. On June 15, 1934 another letter was sent in the same manner on the subject of “Champagne”. It states:
[TRANSLATION] Under instructions from my Government, and further to my letter No. 3 of February 27, I have the honour to submit to your Excellency herewith the text of the Law of May 6, 1919, as amended by the Law of July 22, 1927, Art. 17 of which defines the appellation of origin “Champagne”.
My Government requests that I draw the attention of the Canadian Government to the fact that this appellation applies only to wines harvested and manipulated entirely within wine-growing Champagne. Accordingly, only sparkling wines bottled and shipped from France are entitled to the appellation of origin “Champagne”.
On September 14 both letters were forwarded to the Commissioner of Patents by the Under Secretary of State with a letter which read as follows:
You have already taken note of the communication from the French Minister at Ottawa, dated February 27th, 1934, concerning appellations of origin relating to French wines. I enclose two copies of this despatch. Under Article 11 of the Canada-France Trade Agreement Act 1933, 23-24 George V, Chapter 31, these appellations of origin are to be registered without charge with the competent Department of the other party. I also enclose two copies of a despatch from the French Minister, dated 5th June, 1934, concerning the appellation of origin of “Champagne”. Since we have only one copy of the text of the law enclosed with the French Minister’s despatch of the 5th June, I am able to send you only one copy of the text.
On September 29, 1934, an exchange of notes confirmed an agreement in which we find the following paragraph:
[TRANSLATION] With respect to the appellations of origin of French wine and agricultural products which have been or will be registered by the competent services of Canada under Article 11 of the Trade Agreement of May 12, 1933, the Canadian Government confirms the undertakings taken for their protection within its territory according to the terms of the aforesaid article.
Finally, on October 18, 1934, the Commissioner of Patents did register the trade mark “Champagne” for wines, listing the Government of the French Republic as “registrant” and June 10, 1933 as the registration date, with the following notation: “Registered under and in accordance with The Unfair Competition Act, 1932, 22-23 George V, Chapter 38, this 23rd day of October, 1934, at Ottawa”. In a blank space headed “Other actions affecting rights in Registration”, the document also bears the following notation:
[TRANSLATION] Registered in compliance with article 11 of the Trade Agreement between Canada and France, which came into force on June 10, 1933, by proclamation published on June 9, 1933.
Appellant contends that this registration is void because, it argues, an appellation of origin is not a trade mark within the meaning of the Act under which the registration was made. In support of this contention it relies heavily on a judgment delivered at its request on April 16, 1970, by Jackett P. of the Exchequer Court of Canada, reported at [1970] Ex. C.R. 366. Appellant’s application had first been directed against the Government of the French Republic. The Exchequer Court began by recognizing the immunity of a foreign state: Chateau-Gai Wines Ltd. v. The Government of the French Republic[7]. However, it later agreed to rule on an application directed against the Attorney General of Canada.
Appellant now maintains that the judgment in question is res judicata, because it is a matter of public interest, and it refers to the principle stated in Corporation of the Village of Deschênes v. Loveys[8]. On the record as it stands this argument cannot be accepted. The Exchequer Court proceedings were subsequent to the suit herein, which was instituted on April 9, 1964 and decided in the Superior Court on December 23, 1968. If appellant wished to claim that the judgment rendered by the Exchequer Court, and the deletion of registration ordered by it subject to certain reservations, be regarded as facts adverse to respondents’ case, it should have taken the necessary proceedings to allege and prove these facts, so as to make them part of the record which was then before the Court of Appeal. On the contrary, appellant simply referred to it as an authority. The judges of the Court of Appeal did not fail to consider the judgment on this basis, Rinfret J.A. stating:
[TRANSLATION] I am not saying that this judgment, rendered several years after the institution of the suit herein, binds our Court.
Needless to say this Court could not accede to the motion made by appellant at the close of the hearing, in its reply, to have the aforementioned judgment of the Exchequer Court and a certificate of discontinuance of the appeal brought against it by the Attorney General of Canada included in the record. If it wished to plead res judicata against persons who were not parties to the action, it should have acted with reasonable diligence so that the latter be not deprived of the opportunity to seek to intervene in the appeal before this Court in case the right to rely on the decision not as a precedent, but as res judicata, were recognized. It is difficult to see how this Court could use its discretionary powers to admit additional evidence so as to find itself bound by a decision rendered in the absence of one of the parties by a court other than that which was seized of the litigation. Still, it is not difficult to see why, to the very last minute, appellant refrained from instituting any proceedings to file the judgment of Jackett P. in the record. It does not entirely support appellant’s case. In particular, it holds the treaty to be in force, saying (at p. 383):
In my view, the certificate by Her Majesty’s Secretary of State for External Affairs for Canada that “it was agreed between the two countries that the Trade Agreement would enter into force on Saturay, June 10, 1933”, and that “the two countries have regarded the agreement as having come into force as of June 10, 1933” should be accepted by this Court as conclusive that the agreement did come into force as a binding international agreement at that time…
Turning now to the validity of the registration, the ratio of the decision is contained in the following three sentences (at p. 381):
Quite clearly, what the Government of France sought was the registration of an “appellation of origin” so that it would have the protection afforded by The Canada‑France Trade Agreement Act, 1933. It was not, at any time, seeking the registration of the word “Champagne” as a “trade mark” within the meaning of The Unfair Competition Act, 1932. No argument was addressed to me for regarding the entry as such a registration and I cannot myself envisage one that is worthy of being discussed.
There is no doubt that the traditional principles governing trade marks do not permit inclusion of appellations of origin in that category, but The Unfair Competition Act, 1932 departed from these principles. The definition of “trade mark” therein reads as follows [italics added]: (m) “Trade mark” means a symbol which has become adapted to distinguish particular wares falling within a general category from other wares falling within the same category, and is used by any person in association with wares entering into trade or commerce for the purpose of indicating to dealers in, and/or users of such wares that they have been manufactured, sold, leased or hired by him, or that they are of a defined standard or have been produced under defined working conditions, by a defined class of persons, or in a defined territorial area, and includes any distinguishing guise capable of constituting a trade mark.
Under the heading “Special Provisions” are the following enactments, in which I have italicized wording which clearly refers to appellations of origin:
12. (1) A trade mark the use of which is intended to indicate only that the wares in association with which it is used are of a defined standard, or have been produced under defined working conditions, by a defined class of persons or in a defined area, may be adopted for use only by a person who is not engaged in the manufacture, sale, leasing or hiring of such wares as those in association with which the mark is used.
(2) Subject as hereinafter provided, the registered owner of any such trade mark shall be entitled to license its use by such persons and in association with such wares as he may from time to time determine and to prevent its use by unauthorized persons or in association with any wares to which the licence does not extend.
(3) In addition to any rights otherwise conferred, any action or proceeding to prevent the use of any such trade mark by an unauthorized person or in association with wares to which the licence to use it does not extend may, if the registered owner of the mark is an unincorporated body, be brought by any member of such body on behalf of himself and all other members thereof.
It should also be noted that s. 30 contains, under the heading “Application for Registration”, the following subsection:
(3) If the mark is intended to indicate that the wares in association with which it is used are of a defined standard, or have been produced under defined working conditions, by a defined class of persons or in a defined area, the application shall so indicate and shall contain
(a) a statement that the applicant is not engaged in the manufacture, sale, leasing or hiring of wares similar to any wares in association with which the mark is used;
(b) an exact definition of what the use of the mark in association with wares is intended to indicate in respect of the standard which such wares have attained, or of the working conditions under which or the class of persons by whom they have been produced or of the area in which they have originated.
It is quite clear that the requirements of this latter enactment were not followed to the letter in the registration of the word “Champagne” as a trade mark intended to indicate the origin of wines. However, it must be borne in mind that under The Canada-France Trade Agreement Act, 1933, the provisions of that Act have the force of law “notwithstanding the provisions of any law in force in Canada”. Now, art. 11 of the Agreement gives the French government the right to request registration “without charge”, the only condition being:
There shall only be accepted for registration, under the conditions of the present Article, names which are recognized and protected as appellations of origin which have not become public property within the territory of the Party which gives notice thereof.
In my view this stipulation should prevail over those of The Unfair Competition Act. It follows that the entitlement of the French government to register an appellation of origin is subject to the condition that the appellation be one that has not become public property in France. The evidence clearly established that this is true of the appellation “Champagne” as applied to wines. It was established not only that French law rigorously limits the description “Champagne” to wine produced in Champagne, but also that this law is rigorously enforced and observed.
Against this appellant argued that in Canada and in certain other countries the word “Cham- pagne” is commonly used, not as an appellation of origin but to designate any sparkling wine. In particular it was argued that the word “champagne” had been used in this way in Canada for several years prior to signature of the Trade Agreement, and that it continued to be so used, especially after 1940. Appellant referred to the textbooks and case law that bar the holder of a trade mark from claiming an exclusive right to it, when he has tolerated that the word registered be used as a common noun describing a product of a certain kind rather than a product manufactured by the holder. In particular, the Court was referred to the decision of the Privy Council in National Starch Manufacturing Company v. Munn’s Patent Maizena and Starch Company[9].
Can this principle be applied to counter the stipulations of the Trade Agreement and the Act which makes them binding? In my view it cannot. It must not be forgotten that the Agreement is to have the force of law “notwithstanding the provisions of any law in force in Canada.” Canada has undertaken to ensure respect for appellations of origin “which have not become public property” in France. Accordingly, it intended that the criterion to be used in deciding whether the appellation had lost its private character and become a common noun would not be the situation existing here, but that prevailing in the country of origin. Certainly it was well known, when this commitment was made and a statute passed to implement it, that some designations, notably that of “champagne”, were used here to some extent as common nouns. The commitment was undoubtedly made to put an end to this abusive usage, not to enshrine it. The criterion accepted was thus not that of Canadian, but rather of French usage.
Appellant alleges that the Quebec courts applied French and not Canadian law. In my view, these courts did not go beyond what is required by Canadian law in ordering that appellations recognized and protected as appellations of origin which have not become public property in France should be respected here. Because this is federal legislation of an obviously public policy character, I do not see how it could be held that the obligation to respect appellations of origin has been extinguished by the period of thirty years which has elapsed between the registration and the proceedings. One of the consequences of this delay has clearly been to deprive respondents of any possibility of obtaining an interlocutory injunction, and to oblige them to suffer a suspension of the injunction issued at first instance pending the final decision[10]. No other sanction is in my view applicable. The treaty being still in force, the obligation to respect appellations of origin remains a duty imposed by a public policy statute. Like any other statute, it does not cease to have effect because no proceedings have been taken to enforce it for a long time. Similarly, appellant cannot rely on the fact that other Canadian producers of sparkling wine use the designation “Champagne” or “Canadian Champagne”, and have not been prosecuted. As this Court recently held in Polai v. City of Toronto[11], no one who infringes a public policy statute can plead as a defence to an action for an injunction the fact that others who were in breach have not been prosecuted.
What must be said of the final paragraph of Art. 11 of the Agreement? Should the Court, as appellant contends, interpret this as a limitation on the rule that appellations of origin shall be respected? In my view it should not; far from limiting the prohibition of false appellations of origin, the sole purpose of this provision is to extend the prohibition to every form of competition contrary to honest usages in industrial and commercial matters and of such a nature as to create a confusion with the products of a competitor. In view of the principle that appellations of origin shall be respected, the use as a common noun of what is in itself an appellation of origin cannot be regarded as an honest usage. In this regard it seems appropriate to refer, as did the Court of Appeal, to the decision of Danckwerts J. in Bollinger and others v. The Costa Brava Wine Company Limited[12]. On an application by the French producers of Champagne, he granted an injunction prohibiting the description “Spanish Champagne” applied to a sparkling wine produced in Spain. Naturally, appellant did not fail to point out that the word “Champagne” had not been used with impunity in England for a long period, as it had been in Canada. All the same, the decision, based solely on the general principles of English law, shows that the use of the word “Champagne” qualified by a reference to a country of origin other than France was held to be contrary to honest usages and of such a nature as to create a confusion with the true product.
This leads me to consider the directive issued by the Food and Drugs Directorate on January 3, 1956, which stated the following: -
To: ALL WINERIES
Re: La belling of Canadian Wines.
The manner in which the origin of domestic wines, such as Canadian Port, Canadian Sherry, Canadian Champagne, Canadian Tokay, Canadian Claret and Canadian Sauterne is indicated on the label has been under review due to receipt of complaint by this Directorate.
It has been decided that in the interests of informative labelling, and to prevent the creation of an erroneous impression, the word “Canadian” shall be an integral part of the name of such wine and shall be in identical type and identically displayed with such name…
This document required Canadian producers to treat the word “Canadian” as a part of the designation of certain wines, by printing it in the same type on the label. The author of the document clearly regarded the word “Champagne” as a common noun describing sparkling wine, and not as an appellation of origin. I do not see how this administrative decision could have any legal effect whatever on the 1933 Act. In my view, the principle to be applied here is the same as in Minister of National Revenue v. Inland Industries[13]. So soon as on