Boston Pizza International Inc. v. Boston Chicken Inc.

Boston Pizza International Inc. v. Boston Chicken Inc.
Court (s) Database
Federal Court Decisions
Date
2001-09-17
Neutral citation
2001 FCT 1024
File numbers
T-677-95
Notes
Digest
Decision Content
Date: 20010917
Docket: T-677-95
Neutral citation: 2001 FCT 1024
BETWEEN:
BOSTON PIZZA INTERNATIONAL INC.
Applicant
- and -
BOSTON CHICKEN INC.
Respondent
REASONS FOR ORDER
NADON J.
[1] This is an application by the applicant for the expungement of the trade-marks BOSTON CHICKEN, registration no. TMA 398,700 and BOSTON CHICKEN Design, registration no. TMA 396,282, registered in the name of the respondent. This application is brought pursuant to subsection 57(1) of the Trade-marks Act, R.S.C. 1985, c. T-13 (the "Act"), which states the following:
57. (1) the Federal Court has exclusive original jurisdiction, on the application of the Registrar
or any person interested, to order that any entry in the register be struck out or amended on the ground that at the date of the application the entry as it appears in the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark.
57. (1) La Cour fédérale a une compétence initiale exclusive, sur demande du registraire ou de toute personne intéressée, pour ordonner qu'une inscription dans le registre soit biffée ou modifiée, parce que, à la date de cette demande, l'inscription figurant au registre n'exprime ou ne définit pas exactement les droits existants de la personne paraissant être le propriétaire inscrit de la marque.
[2] This application is based on the following grounds:
(a) the registration of the trade-marks was invalid since they were not, and are not, distinctive of the services of the respondent contrary to section 18(1)(b) of the Act;
(b) the trade-marks were not registrable because they were confusing with a registered trade-mark pursuant to section 12(1)(d) of the Act; and
(c) the respondent was not the person entitled to secure registration of the trade-marks as each trade-mark was confusing with the applicant's trade-marks which had previously been used extensively in Canada.
[3] The applicant requests that registration no. TMA 398,700 for the trade-mark BOSTON CHICKEN and registration no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design be declared invalid and that the registrations be struck from the Register of Trade-marks. The applicant also requests costs.
[4] The applicant is a British Columbia corporation which was incorporated under the name "Bushby Industries Ltd." on May 26, 1982. The applicant's name was changed to "Boston Pizza International Inc." on December 10, 1982 following the purchase by the applicant of Boston Pizza International Ltd.
[5] The applicant is the owner of seven registered trade-marks in Canada, including the trade-mark BOSTON PIZZA, registration no. TMA 171,428, registered on September 18, 1970 in association with the following wares and services:
- Wares: Pizza and spaghetti, both in hot and frozen form, as well as the ingredients, in combination, for making these dishes.
- Services: Restaurant services and the franchising of restaurant services.
As of 1994, there were 93 Boston Pizza restaurants located in five Canadian provinces.
[6] The respondent was a company organised and existing under the laws of the State of Delaware. At the date of commencement of these proceedings, the respondent was the owner of the Canadian trade-mark registrations no. TMA 398,700 for the trade-mark BOSTON CHICKEN and no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design. The respondent's trade-marks were registered on May 29, 1992 and March 27, 1992 respectively in association with the following services:
- Take-out restaurant and catering services.
[7] At the end of 1994, 530 restaurants in the United States operated under the banner of BOSTON CHICKEN.
[8] On April 3, 1995, the applicant filed this application to expunge the respondent's registration no. TMA 398,700 for the trade-mark BOSTON CHICKEN and registration no. TMA 396,282 for the trade-mark BOSTON CHICKEN Design from the Register of Trade-marks.
[9] In October 1998, the respondent filed for bankruptcy protection pursuant to Chapter 11 bankruptcy under the United States Bankruptcy Code. Following bankruptcy in the United States of America, the respondent was dissolved and all rights to Canadian trade-mark registration nos. TMA 398,700 and TMA 396,282 were acquitted and assigned to Global Restaurant Operations of Ireland Limited ("Global"), including the right to continue these proceedings.
[10] At the commencement of the hearing, Global made a motion seeking to be joined as a party to the proceedings. That motion is hereby allowed.
THE APPLICANT'S EVIDENCE
[11] In support of its application, the applicant initially filed the Affidavit of George Melville, Vice-President of Boston Pizza International Inc., dated February 24, 1995.
[12] On November 16, 2000, I made an order allowing the applicant to file additional affidavit evidence in response to the respondent's submissions on section 50 of the Act. The applicant therefore filed the Affidavit of George Melville dated November 28, 2000.
THE RESPONDENT'S EVIDENCE
[13] In response, the respondent filed the following affidavits:
· Affidavit of F. Warren Ellish, Vice-President, Marketing of Boston Chicken International, dated August 7, 1995;
· Affidavit of John Plessas, President of Boston Seafoods Inc., dated July 20, 1995;
· Affidavit of Alan L. Ross, Student-at-Law, dated July 13, 1995;
· Affidavit of Jack Trapp, Owner, A & A Surplus, dated August 4, 1995;
· Affidavit of Adam Joseph, Law Student, dated August 3, 1995;
· Affidavit of Thomas J. Denholm, Student-at-Law, dated August 8, 1995;
· Affidavit of Michael F. Morgan, Student-at-Law, dated August 1, 1995;
· Affidavit of Jennifer Leah Stecyk, Trade-mark Searcher, dated January 30, 1996.
[14] The respondent also cross-examined the applicant's witness George Melville and filed in support of its position a copy of the transcript of the cross-examination of Mr. Melville and the undertakings therefrom.
ISSUES
[15] In its application, the applicant raises the following issues:
1. What protection, if any, should be afforded to the applicant's trade-mark?
2. As of the date of registration, were the respondent's trade-marks confusing with those of the applicant?
3. Was the respondent entitled to secure registration of its trade-marks?
4. As of the date of this application, were the respondent's trade-marks distinctive of the respondent's services in accordance with section 18(1)(b) of the Act?
RELEVANT PROVISIONS OF THE TRADE-MARKS ACT, R.S.C. 1985, c. T-13
[16] The relevant provisions of the Act read as follows:
6. (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.
6. (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.
6. (5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including:
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
(b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
6. (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.
12. (1) Subject to section 13, a trade-mark is registrable if it is not(a) a word that is primarily merely the name or the surname of an individual who is living or has died within the preceding thirty years;
(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;
(f) a denomination the adoption of which is prohibited by section 10.1.;
(g) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication; and
(h) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication.
(2) A trade-mark that is not registrable by reason of paragraph (1)(a) or (b) is registrable if it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application for its registration.
12. (1) Sous réserve de l'article 13, une marque de commerce est enregistrable sauf dans l'un ou l'autre des cas suivants_:
a) elle est constituée d'un mot n'étant principalement que le nom ou le nom de famille d'un particulier vivant ou qui est décédé dans les trente années précédentes;
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;
f) elle est une dénomination dont l'article 10.1 interdit l'adoption;
g) elle est constituée, en tout ou en partie, d'une indication géographique protégée et elle doit être enregistrée en liaison avec un vin dont le lieu d'origine ne se trouve pas sur le territoire visé par l'indication;
h) elle est constituée, en tout ou en partie, d'une indication géographique protégée et elle doit être enregistrée en liaison avec un spiritueux dont le lieu d'origine ne se trouve pas sur le territoire visé par l'indication.
(2) Une marque de commerce qui n'est pas enregistrable en raison de l'alinéa (1)a) ou b) peut être enregistrée si elle a été employée au Canada par le requérant ou son prédécesseur en titre de façon à être devenue distinctive à la date de la production d'une demande d'enregistrement la concernant.
16. (1) Any applicant who has filed an application in accordance with section 30 for registration of a trade-mark that is registrable and that he or his predecessor in title has used in Canada or made known in Canada in association with wares or services is entitled, subject to section 38, to secure its registration in respect of those wares or services, unless at the date on which he or his predecessor in title first so used or made it known it was confusing with
(a) a trade-mark that had been previously used in Canada or made known in Canada by any other person;
(b) a trade-mark in respect of which an application for registration had been previously filed in Canada by any other person; or
(c) a trade-name that had been previously used in Canada by any other person.
16. (1) Tout requérant qui a produit une demande selon l'article 30 en vue de l'enregistrement d'une marque de commerce qui est enregistrable et que le requérant ou son prédécesseur en titre a employée ou fait connaître au Canada en liaison avec des marchandises ou services, a droit, sous réserve de l'article 38, d'en obtenir l'enregistrement à l'égard de ces marchandises ou services, à moins que, à la date où le requérant ou son prédécesseur en titre l'a en premier lieu ainsi employée ou révélée, elle n'ait créé de la confusion :
a) soit avec une marque de commerce antérieurement employée ou révélée au Canada par une autre personne;
b) soit avec une marque de commerce à l'égard de laquelle une demande d'enregistrement avait été antérieurement produite au Canada par une autre personne;
c) soit avec un nom commercial qui avait été antérieurement employé au Canada par une autre personne.
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.
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.
50. (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.
50. (1) Pour l'application de la présente loi, si une licence d'emploi d'une marque de commerce est octroyée, pour un pays, à une entité par le propriétaire de la marque, ou avec son autorisation, et que celui-ci, aux termes de la licence, contrôle, directement ou indirectement, les caractéristiques ou la qualité des marchandises et services, l'emploi, la publicité ou l'exposition de la marque, dans ce pays, par cette entité comme marque de commerce, nom commercial -- ou partie de ceux-ci -- ou autrement ont le même effet et sont réputés avoir toujours eu le même effet que s'il s'agissait de ceux du propriétaire.
THE APPLICANT'S SUBMISSIONS
Issue 1: Protection to be Afforded to the Applicant's Trade-mark
[17] In its Supplemental Memorandum of Fact and Law, the applicant submits that it has established the degree of control necessary to be afforded the wide scope of protection available under subsection 50(1) of the Act. The applicant contends that subsection 50(1) does not require the owner of a trade-mark to enter into a written licence agreement with its licensee, rather, it only requires that the owner of a trade-mark directly or indirectly control the character or quality of the wares and services provided by the licensee. The applicant alleges that services performed by a franchisee pursuant to a franchise agreement is use in compliance with subsection 50(1) of the Act (We Care Health Services Inc. (Re), [1995] T.M.O.B. No. 39 (T.M.O.B.)).
[18] The applicant submits that it has a comprehensive franchise agreement which controls virtually every aspect of its franchisee's operations and which is supplemented by an operations manual, memorandums and inspections to ensure that quality control is achieved. The applicant claims that many sections of the franchise agreement, listed at paragraph 9 of the applicant's Supplemental Memorandum of Fact and Law, control the franchisee. The applicant also contends that the second affidavit of George Melville, at paragraphs 2 to 14, explains how the applicant exerts close and continuous control over its franchisees' business. The applicant alleges that the franchise agreement sets out in detail the type of control which the applicant will exercise over its franchisees with respect to the character and quality of their wares and services. The applicant also submits that the franchise agreement empowers it to take the necessary steps to ensure that the standards of quality are met, and that if the standards of quality are not met, the applicant may terminate its franchises.
[19] With respect to the entities mentioned by the respondent which had not been registered as trade-mark users, the applicant contends that it was not specifically drawn to the need to provide evidence with respect to the entities in question since they were not specifically referred to in the respondent's Memorandum of Fact and Law. The applicant submits that it could have provided a copy of every franchise agreement to which it is a party, but that with more than 150 franchisees this would have been a burden for the applicant, as well as for the Court. The applicant concludes that it has demonstrated that it exercises control over the quality of the wares and services provided by its franchisees, and that, accordingly, the use of the applicant's trade-marks by its franchisees is within the scope of section 50 and use of its trade-marks by its franchisees enures to its benefit.
Issue 2: Confusion
[20] With respect to the first factor set out in subsection 6(5) of the Act, inherent distinctiveness, the applicant submits that while the trade-mark BOSTON PIZZA is not inherently distinctive, it has acquired a distinctiveness based upon 30 years of using and marketing the name. The applicant contends that the trade-mark BOSTON PIZZA has acquired distinctiveness in that it is recognized by the public as a nationwide chain of franchised restaurants which serves food prepared in the "Boston style", and that it therefore requires a wide scope of protection.
[21] The applicant claims that in contrast, the BOSTON CHICKEN trade-mark has not been used in Canada and is not well known, and therefore has acquired no distinctiveness and should be afforded little protection. The applicant alleges that based on its use in Canada, the respondent has not distinguished its trade-mark from the names of other restaurants using the "Boston" name.
[22] As to the second factor, length of time in use, the applicant points out that the BOSTON PIZZA trade-mark has been used in Canada since 1965 and has been registered since 1970, but that the BOSTON CHICKEN trade-mark was registered in 1992. Therefore, the applicant submits that the BOSTON PIZZA trade-mark should be accorded substantial protection compared to the BOSTON CHICKEN trade-mark.
[23] With regard to the third factor, nature of the wares and services, the applicant submits that both the applicant and the respondent are engaged in the same business, the franchising and operating of restaurants. The applicant contends that the nature of the wares and services provided by the applicant and the respondent is so similar that confusion is likely. The applicant points out that the Trade Marks Opposition Board has consistently refused applications for trade-marks for restaurants when they would be confusing with pre-existing marks (Boston Pizza International v. Boston Seafood House Ltd. (1988), 23 C.P.R. (3d) 564 (T.M.O.B.); Foodcorp Ltd. v. Hardee's Food Systems Inc. (1981), 66 C.P.R. (2d) 217 (T.M.O.B.); Restaurant Au Chalet Suisse Inc. v. Cara Operations Ltd. (1988), 20 C.P.R. (3d) 331 (T.M.O.B.); Old Spaghetti Factory Canada Ltd. v. Spaghetti House Restaurants Ltd. (1999), 2 C.P.R. (4th) 398 (T.M.O.B.)).
[24] With respect to the fourth factor, the nature of the trade, the applicant submits that both the applicant and the respondent franchise and operate restaurants, offer a similar product and seek to appeal to similar markets, which is likely to lead to confusion.
[25] Finally, as to the fifth criteria, the degree of resemblance, the applicant submits that when assessing confusion between trade-marks, the first word or syllable in a mark is more important for the purpose of distinction than those that follow (Conde Nast Publications Inc. v. Union des Éditions Modernes (1979), 46 C.P.R. (2d) 183 (F.C.T.D.); Everex Systems Inc. v. Everdata Computer Inc. (1992), 44 C.P.R. (3d) 175 (F.C.T.D.)). The applicant contends that since it already operates under a number of names, for example Boston Pizza, Boston Pizza Quick Express, and BP's Lounge, it is not unlikely that the average member of the public might assume that the respondent is merely another manifestation of the applicant. According to the applicant, this is particularly likely since the applicant and the respondent target the same clientele. The applicant alleges that members of the restaurant going public may presume that the respondent is an extension of the applicant directed at members of the public who prefer chicken over pizza.
[26] The applicant submits that pursuant to paragraphs 18(1)(a) and 12(1)(d) of the Act, the registration of a trade-mark is invalid if the trade-mark is not registrable, which is the case if the trade-mark is confusing with a registered trade-mark. The applicant contends that the BOSTON CHICKEN trade-mark is likely to be confused with the BOSTON PIZZA trade-mark since it is not inherently distinctive, has not been used in Canada and is to be used in connection with a similar business to that of the applicant. Accordingly, the applicant contends that the BOSTON CHICKEN trade-mark is invalid and should be expunged from the register.
Issue 3: Was the Respondent Entitled to Register the Trade-mark?
[27] Finally, the applicant submits that the respondent was not entitled to register its trade-mark pursuant to paragraph 16(1)(a) of the Act since its trade-mark was confusing with the applicant's trade-mark already in use in Canada. The applicant points out that its trade-mark has been in use in Canada since at least 1965 and was registered in 1970, whereas the respondent's trade-marks were registered in Canada in 1992.
Issue 4: Distinctiveness
[28] The applicant submits that the respondent's trade-marks do not distinguish the wares and services with which they are used from the wares and services offered by others. The applicant contends that the respondent's mark BOSTON CHICKEN refers to a geographic location coupled with a food product and that since there are at least four other restaurants in Canada with a trade name which includes the word "Boston", the respondent's mark is not distinctive. The applicant claims that by contrast, its mark is distinctive because the public associates "Boston style" food with the applicant due to its active use of the mark (Petro-Canada v. UPI Inc., [2000] T.M.O.B. No. 32 (T.M.O.B.)).
[29] Furthermore, the applicant submits that when a trade-mark does not distinguish its wares or services from the wares or services of others it is not distinctive and cannot be registered (Williams Companies Inc. v. William Tel. Ltd., [1999] T.M.O.B. No. 240 (T.M.O.B.)). According to the applicant, the trade-mark BOSTON CHICKEN does not distinguish its wares or services from other restaurants using the word "Boston" as part of their trade-mark or trade-name, including BOSTON PIZZA.
[30] Therefore, the applicant contends that the registration of the trade-mark BOSTON CHICKEN is invalid since it was not distinctive at any time, including the date of commencement of these proceedings, and that the respondent's trade-marks should be expunged from the register.
THE RESPONDENT'S SUBMISSIONS
Issue 1: Protection to be Afforded to the Applicant's Trade-mark
[31] The respondent submits that in order for use of a mark by a licensee to be deemed to be a use by the owner, it is necessary for the owner to prove the fact of the licence and sufficient quality control over the licensees' wares or services (Cheung Kong (Holdings) Ltd. v. Living Realty Inc. (1999), 4 C.P.R. (4th) 71 (F.C.T.D.) at 83; MCI Communications Corp. v. MCI Multinet Communications Inc. (1995), 61 C.P.R. (3d) 245 (T.M.O.B.)).
[32] The respondent contends that the applicant has failed to establish that all licensed use of the trade-mark BOSTON PIZZA has been either pursuant to a registered user registration (required before the Act was amended in 1993 with retroactive effect) or under circumstances in which section 50 of the Act applied. The respondent therefore alleges that the scope of protection to be accorded to the applicant's trade-mark BOSTON PIZZA, if any, must be very narrow.
[33] In its Supplementary Memorandum of Fact and Law, the respondent submits that among the third party users which were using the trade-mark BOSTON PIZZA, there were seven entities which had been using that trade-mark since as early as 1971 and which had never been recorded as registered users and in respect of which there was no evidence of control over the character or quality of their services. Five of these entities are listed at paragraph 2 of the respondent's Supplementary Memorandum of Fact and Law.
[34] The respondent contends that the second affidavit of George Melville provides general evidence of the license agreements that the applicant has entered into with its franchisees, but fails to show that the specific entities identified in paragraph 2 were licenced by the applicant or its predecessor in title. In the alternative, if the second affidavit of George Melville can be taken as evidence that such entities were licensed by the applicant or its predecessor in title, the respondent submits that the affidavit does not show any terms or conditions of such licences.
[35] The respondent alleges that since the applicant was provided with the opportunity to furnish supplementary evidence had specific examples of the defects in its evidence and has failed to furnish any evidence to address such defects, the scope of protection, if any, to be afforded to the applicant's trade-mark BOSTON PIZZA must be very narrow (Chalet Bar B-Q (Canada) Inc. v. Foodcorp Inc. (1982), 66 C.P.R. (2d) 56-68 (F.C.A.)).
Issue 2: Confusion
[36] With respect to the first factor set out in subsection 6(5) of the Act, inherent distinctiveness, the respondent submits that where a mark describes the wares or their geographic designation, less protection will be afforded to the mark (Prince Edward Island Mutual Insurance v. Insurance Co. of Prince Edward Island (1999), 86 C.P.R. (3d) 342 (F.C.T.D.) at 352; United Artists Corp. v. Pink Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.) at 259; California Fashion Industries, Inc. v. Reitmans (Canada) Ltd. (1991), 38 C.P.R. (3d) 439 (F.C.T.D.) at 445-447). The respondent also contends that where a mark is comprised of a descriptive term, such as a style of food, it will be considered a weak mark and not inherently distinctive (A. Lassonde Inc. v. Canada (Registrar of Trade-marks) (2000), 5 C.P.R. (4th) 517 (F.C.T.D.) at 525; General Motors v. Bellows (1949), 10 C.P.R. 101 (S.C.C.); United Artists Corp., supra at 268-271).
[37] Furthermore, the respondent maintains that where a party adopts a trade-mark which is comprised of both a description of the wares or services and a geographical designation, the mark will not be considered inherently distinctive and will be afforded little protection (In re Broadway Chicken, Inc., Serial No. 74/326,626 at p. 18 (Trademark Trial and Appeal Board, U.S. Department of Commerce, Patent and Trademark Office)). According to the respondent, such marks may co-exist with other marks without giving rise to a likelihood of confusion. The respondent contends that where a party adopts a descriptive mark, such as a geographical location or style of food, the party must accept that a certain amount of confusion may arise, since in such cases, confusion is almost inevitable (Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 56 C.P.R. (3d) 129 (Alta Q.B.) at 183).
[38] The respondent submits that the evidence indicates that a number of restaurants chose a trade-mark containing the word "Boston" to associate its services with food derived from the City of Boston. The respondent claims that the applicant's trade-mark BOSTON PIZZA is not inherently distinctive because it suggests a style or type of pizza associated with the city of Boston. According to the respondent, as a result, the applicant's mark should not be afforded a wide scope of protection.
[39] As to acquired distinctiveness, the respondent contends that although the trade-marks BOSTON CHICKEN and BOSTON CHICKEN Design have not been extensively used in Canada, the marks have become known to consumers by virtue of "spillover" advertising and publicity generated by the respondent's success.
[40] With respect to the second factor, the length of time the trade-marks have been in use, the respondent submits that its trade-marks have been used in Canada since at least as early as 1995 in association with catering services and advertised in Canada since as early as the late 1980s. The respondent contends that the trade-mark BOSTON PIZZA has been used in conjunction with restaurants featuring pizza since approximately 1968, but that although the applicant is able to show prior use of the trade-mark BOSTON PIZZA, it is unable to establish exclusive use of the mark, nor that all rights to the mark have been consolidated in the applicant.
[41] With regard to the third and fourth factors, the nature of the wares and services and the nature of the trade, the respondent submits that there is considerable overlap between the services of the parties, since its trade-marks are registered for use in association with take-out restaurant and catering services and the applicant's trade-mark BOSTON PIZZA is registered in association with restaurant services and the franchising of services, as well as pizza and spaghetti.
[42] As to the fifth factor, the degree of resemblance, the respondent submits that although it is well established that the degree of resemblance between the marks is an important factor to consider in assessing the likelihood of confusion, it is not the most important factor to consider when assessing marks with common words and geographical indicators (California Fashion Industries, Inc., supra at 446). The respondent contends that it is well established that marks with common words may be distinctive if the difference within the marks serve to dominate the common elements, and that the distinctive element of each trade-mark is the differences within the marks and not the common words (United Artists Corp., supra at 262-263; (California Fashion Industries, Inc., supra at 445-446; Ikea Ltd./Ikea Ltée v. Idea Design Ltd. (1987), 13 C.P.R. (3d) 476 (F.C.T.D.) at 478; Sunshine Village Corp. v. Sun Peaks Resort Corp., [2000] T.M.O.B. No. 102 (Q.L.); Phantom Industries Inc. v. Sara Lee Corp., [2000] T.M.O.B. No. 112 (Q.L.); United States Polo Assn. v. Polo Ralph Lauren Corp., [2000] F.C.J. No. 1472 (F.C.A.) at para 44).
[43] The respondent claims that in the case at issue, although both marks are used in association with restaurant services, they relate to different styles of food which is clearly indicated within the marks, BOSTON CHICKEN and BOSTON PIZZA. The respondent alleges that the difference in the nature of the wares to which the marks relate is sufficient to make each mark distinctive, despite any similarity in resemblance, and is unlikely to cause confusion among Canadian consumers.
[44] Finally, with respect to additional surrounding circumstances, the respondent submits that evidence of third party use of a word or trade-mark which is similar to an opponent's trade-mark may limit the scope of protection afforded to the opponent's mark if it can be inferred from the evidence that consumers are so accustomed to seeing similar marks or marks having a common element in respect of the same wares or services that they have become accustomed to making fine distinctions between the marks (United States Polo Assn., supra at para 25).
[45] The respondent contends that the evidence shows significant third party use of the word "Boston" within the restaurant industry, for which the applicant has been unable to adduce any evidence of confusion. The respondent claims that it is thus reasonable to conclude that the evidence of third party use is sufficient to establish that Canadian consumers are so accustomed to seeing the word "Boston" that they would make fine distinctions between the respondent's trade-mark and other trade-marks, such as those belonging to the applicant. The respondent alleges that a lack of evidence establishing confusion with similar third party marks is an important factor to consider in determining the likelihood of confusion (Baylor University v. Hudson's Bay Co., [2000] F.C.J. No. 984 (F.C.A.) at para 37).
[46] Therefore, the respondent submits that the trade-mark BOSTON CHICKEN is no less confusing that other marks used by third parties, including BOSTON CAFÉ, BOSTON SEAFOOD HOUSE, BOSTON CHINESE FOOD and BOSTON RESTAURANT. According to the respondent, there is no reason to believe that its trade-marks would be any more confusing that any of the other "Boston" marks are used by third parties.
[47] The respondent also contends that having regard to the proliferation of trade-marks of third parties which include the word "Boston", the applicant cannot claim protection for its trade-marks as a family of marks. The respondent alleges that protection for a family of marks containing a common feature should be denied if it is shown that such a feature is also common to trade-marks of others (Techniquip Ltd. v. Canadian Olympic Association (1999), 3 C.P.R. (3d) 298 (F.C.A.) at 303-304; Canadian Olympic Association v. Olymel, Société en commandite, [2000] F.C.J. No. 842 (F.C.T.D.)).
[48] The respondent therefore submits that there was no likelihood of confusion between its trade-marks and the applicant's trade-mark BOSTON PIZZA at the time of registration of the respondent's trade-marks.
Issue 3: Was the Respondent Entitled to Register the Trade-marks?
[49] The respondent makes no specific submissions with respect to this issue.
Issue 4: Distinctiveness
[50] The respondent submits that the onus is on the applicant to establish want of distinctiveness of the respondent's trade-marks. The respondent contends that the applicant has not met that burden, and has failed to establish any other ground for a lack of distinctiveness other than a likelihood of confusion. The respondent claims that as there is no likelihood of confusion, there is no want of distinctiveness (Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R. (3d) 289 (F.C.A.) at 297-298).
ANALYSIS
[51] I begin my analysis with the subsection 50(1) issue which, for ease of reference, I again reproduce:
50. (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.
50. (1) Pour l'application de la présente loi, si une licence d'emploi d'une marque de commerce est octroyée, pour un pays, à une entité par le propriétaire de la marque, ou avec son autorisation, et que celui-ci, aux termes de la licence, contrôle, directement ou indirectement, les caractéristiques ou la qualité des marchandises et services, l'emploi, la publicité ou l'exposition de la marque, dans ce pays, par cette entité comme marque de commerce, nom commercial -- ou partie de ceux-ci -- ou autrement ont le même effet et sont réputés avoir toujours eu le même effet que s'il s'agissait de ceux du propriétaire.
[52] Subsection 50(1) requires the owner of a trade-mark, who has licensed an entity to use its trade-mark, to exercise, under the license, direct or indirect control of the character or quality of the wares or services associated with the trade-mark. If the owner of the trade-mark meets that requirement, the use thereof by the licensed entity is deemed to have been use by the owner of the trade-mark. Both sides agree that subsection 50(1) has a retroactive effective.
[53] The respondent's argument is to the effect that the applicant's trade-mark BOSTON PIZZA, registration no. TMA 171, 428, should be afforded little protection, distinctiveness having been lost by reason of the use of the trade-mark by franchisees who, prior to 1993, were not properly registered[1], and since June 9, 1993, by reason of the applicant's failure to demonstrate sufficient control, direct or indirect, over the character or quality of the wares or services provided by the franchisees.
[54] In support of its position, the applicant has filed the Affidavits of George Melville, sworn February 24, 1995 and November 28, 2000. Attached to Mr. Melville's Affidavit of November 28, 2000 are copies of franchise agreements entered into by the applicant with franchisees since 1968.
[55] Mr. Melville states in his second Affidavit that the applicant currently has approximately 150 franchisees across Canada, and that it exercises close control over its franchisees, particularly with respect to the decor and the nature and quality of the food and services provided by the franchisees.
[56] It is undeniable that the applicant, through its comprehensive franchise agreement, purports to control every aspect of the franchisee's operations. This agreement is supplemented by the applicant's Operations Manual, memoranda and inspections, which serve to ensure that quality control is achieved. The agreement further provides that the applicant is entitled to enter the franchisee's premises so as to verify compliance by the franchisee with its obligations. Failure to comply by the franchisee constitutes an event of default which allows the applicant, at its option, to terminate the agreement.
[57] I am therefore of the view that the applicant meets the requirements set out at subsection 50(1) of the Act, in that the applicant exercises control, through its licensing agreement, of the character or quality of the wares and services associated with the use of its trade-mark by the franchisees.
[58] In support of its positio