Imperial Tobacco Canada Limited v. Philip Morris Brands SARL

Imperial Tobacco Canada Limited v. Philip Morris Brands SARL
Court (s) Database
Federal Court Decisions
Date
2018-06-15
Neutral citation
2018 FC 503
File numbers
T-2608-14, T-2609-14, T-2610-14, T-2611-14, T-2612-14, T-2613-14, T-2614-14, T-619-13, T-620-13
Notes
A correction was made June 29, 2018.
Decision Content
Date: 20180615
Dockets: T-619-13
T-620-13
T-2608-14
T-2609-14
T-2610-14
T-2611-14
T-2612-14
T-2613-14
T-2614-14
Citation: 2018 FC 503
Ottawa, Ontario, June 15, 2018
PRESENT: The Honourable Mr. Justice Annis
BETWEEN:
IMPERIAL TOBACCO CANADA LIMITED
and MARLBORO CANADA LIMITED
Applicants
and
PHILIP MORRIS BRAND SARL
Respondent
AMENDED JUDGMENT AND REASONS
TABLE OF CONTENTS
I. Nature of the Matter 4
II. Factual Background and History between the Parties 5
A. The Parties 5
B. History of the acquisition and use by ITL of the trade-mark MARLBORO in Canada 5
C. History of the redesigning and relaunch of internationally successful Philip Morris’ Marlboro brand of cigarettes 6
D. PM introduces the MATADOR and MAVERICK products sold in Canada 7
E. The “Dark Market” created by cigarette market regulations 9
F. The launch of the “no-name” packaging in 2006 and ensuing litigation 10
G. Non-cigarette wares 11
H. Federal Courts decisions relating to confusion of PM’s no-name packages and ITL’s MARLBORO mark 12
(1) Philip Morris 2010 12
(2) Philip Morris 2012 13
I. The Applications 17
J. The Oppositions 17
III. The Decisions under Review 18
IV. Issues 19
V. New Evidence on Appeal 19
A. The Applicant’s 1st New Evidence 20
(1) ITL’s interpretive evidence 20
(2) ITL’s survey evidence 20
B. Respondent’s Reply Evidence 22
(1) The Redesigned Rooftop litigation evidence — (pending litigation) 22
(2) PM’s reply survey evidence 23
C. Applicant’s 2nd New Evidence 23
(1) The Redesigned Rooftop litigation evidence — (pending litigation) 23
(2) International rooftop design use evidence 24
(3) Cigar wares packaging evidence 24
VI. Standard of Review 24
VII. Analysis 25
A. Legal Principles on the Admission of New Evidence and Survey Evidence 25
(1) Admitting new evidence 25
(2) Admitting survey evidence 26
B. Is the Mills Survey evidence admissible in any of the Decisions? 27
(1) DECISION 1: 28
(2) DECISIONS 2 and 3: 32
(3) DECISION 4: 34
(a) Should the conclusions of the Mills Survey also apply to TMA 1,460,676 (Roof Design) and TMA 1,478,470 (Roof Design w/ Empty Roof Line)? 34
· TM Application 1,460,676 (Roof Design) 35
· TM Application 1,478,470 (Roof Design with Empty Roof Line) 36
(b) Did the Mills Survey questionnaire ask the wrong question? 39
· Requirements that the questions provide a concrete context without being speculative or suggesting an answer 39
· Survey questions are not suggestive or speculative by presenting the design marks in a no-name getup as opposed to the marks as they are sought to be registered 43
(c) The Admissibility of the Applicant’s remaining new evidence 47
(4) DECISIONS 5 and 6: 48
(5) DECISION 7, 8 and 9: 49
C. Is there likelihood of confusion between each of the applied-for design marks in the Decision 4 and the registered trade-mark MARLBORO? 50
(1) Overall consideration of subsection 6(5) factors and all surrounding circumstances 51
(2) Degree of resemblance factor favours the Applicant 53
D. Are the remaining Decisions reasonable? 58
VIII. Conclusion 59
I. Nature of the Matter
[1] These are nine appeals brought by the Applicant, Imperial Tobacco Canada Limited [ITL] against the Respondent, Philip Morris [PM] pursuant to section 56 of the Trade-Marks Act, RSC 1985, c T-13 [Act] from the decisions of a Hearing Officer of the Trade-Marks Opposition Board [the Board or Registrar], dated November 21, 2012 [Decisions 1 and 2, as defined below] and October 6, 2014 [Decisions 3-9, as defined below] [together the Decisions] concerning registration proceedings by PM for 17 trade-marks [the TM Applications]. The Decisions rejected all of ITL’s oppositions to the registration of PM’s marks on the ground that they were not confusing with its registered trade-mark MARLBORO (no. TMDA 55,988) pursuant to section 12(1)(d) and 6(5) of the Act.
[2] This case draws on a series of previous jurisprudence between these parties, and more specifically with respect to the issue of the reliance on survey evidence, which informed the outcome of Decisions of the Board, and additional survey evidence sought to be introduced in these appeals with the view to affecting the outcome of these matters. In particular, two Federal Courts decisions, the first in Philip Morris Products S.A. v. Marlboro Canada Limited, 2010 FC 1099 [Philip Morris 2010] and the second, the Federal Court of Appeal case overturning it in Marlboro Canada Limited v. Philip Morris Products S.A., 2012 FCA 201 [Philip Morris 2012] are significant in this respect.
[3] For the reasons that follow, new evidence is admitted in the appeal of Decision 4 in the matter T-2609-14 resulting in the appeal being allowed and the TM Applications associated with the Decision being refused. No new evidence is admitted in the remaining Decisions, resulting in their appeals being dismissed.
II. Factual Background and History between the Parties
A. The Parties
[4] ITL is the largest tobacco company in Canada. It is a majority shareholder of the Applicant Marlboro Canada Limited and an exclusive licensee of Marlboro Canada with respect to the registered trade-mark MARLBORO (no. TMA 55,988). ITL is wholly owned by British-American Tobacco Plc [BAT].
[5] The Respondent Philip Morris Brands Sàrl [PM Brands] is a subsidiary of PM and is the registered owner of a number of trade-marks and trade-mark applications (including what are described as the “Rooftop Design Marks” at issue) in Canada. PM Brands licenses these trade-marks to a related subsidiary of PM in Canada, Rothmans Benson & Hedges Inc. [RBH], which competes with ITL in the sale of tobacco products. For ease of reference, whenever the Respondent is referred to in any capacity, the reasons will refer simply to the acronym of “PM”.
[6] PM and BAT are the two largest publicly-owned tobacco companies in the world and compete for market shares in over 160 countries, including Canada.
B. History of the acquisition and use by ITL of the trade-mark MARLBORO in Canada
[7] The history of the parties dates back to 1924, when the predecessor-in-title of PM assigned its rights to the word mark “MARLBORO” to a predecessor-in-title of ITL (Tuckett Tobacco Company Limited). The circumstances surrounding the assignment and related corporate histories of both parties are discussed in Philip Morris Inc. v. Imperial Tobacco Ltd., 1987 CarswellNat 701 (FCA). The word mark was subsequently registered in Canada in 1932 under TMA 55,988 and has since been continuously used in the country. A print of ITL’s current packaging is provided below:
C. History of the redesigning and relaunch of internationally successful Philip Morris’ Marlboro brand of cigarettes
[8] Following the assignment, PM continued to sell unfiltered cigarettes in the U.S. and other countries in the original Marlboro packaging. In 1955, PM redesigned and re-launched the Marlboro brand of cigarettes internationally with a cowboy-themed advertisement campaign promoting a “full-bodied” American blend tobacco and a filter. The cigarettes were sold in a packaging incorporating for the first time the now well-known red “roof” chevron design element (the “Rooftop Design Mark” or “International Package”) featured at the top of the package, which is the design mark at the heart of these appeals. PM’s Marlboro became the top-selling cigarette in the world by 1972 and this remains the case some 40 years later. It is sold in over 160 countries in the world with the notable exception of Canada. PM’s International Package is reproduced below:
D. PM introduces the MATADOR and MAVERICK products sold in Canada
[9] In 1958, PM started selling in Canada, and is still selling to date, a Virginia blend (milder) cigarette incorporating the same design elements as its Rooftop Design Mark, with the word mark “MATADOR” in the place of “MARLBORO” on the packaging sold internationally. A similar product was sold using the word mark “MAVERICK” in 1970 and subsequently discontinued in 1978. Neither MATADOR nor MAVERICK ever enjoyed more than a negligible market share.
[10] Pursuant to the Tobacco Products Labelling Regulations (Cigarettes and Little Cigars), SOR/2011-177, tobacco manufacturers are now facing heightened constraints with respect to the display of their design marks, which is illustrated in the right hand version of the MATADOR package, as depicted below:
[11] Between 1980 and 2005, PM registered five different design marks, in respect of cigarettes, claiming prior use in association with MATADOR — drawings and specimens of the MATADOR package had been submitted as proof of usage. None of these registrations had been opposed by ITL at the relevant times, as the parties do not contest that consumers generally do not make any association with ITL’s MARLBORO mark, when MATADOR or MAVERICK appears on the PM packaging using the Rooftop Design Mark, which was confirmed in Philip Morris 2010, paras 31, 37, 173-180.
[12] Then in 2006, PM proceeded by registering TMA 670,898 [the Silver Design Mark], which did not claim a similar use as in previous registrations. It featured a Rooftop Design Mark with the “PM” initials. ITL filed a time extension to oppose the registration but elected not to pursue the opposition. This was of no consequence on the matter as the trial judge in Philip Morris 2010 agreed that ITL could not have envisaged that the design mark would be used without a brand name.
[13] These six registrations (illustrated below for reference) will be referred to collectively as the "Registered Rooftop Design Marks". They were the subject of contention in the Federal Courts litigation proceedings. The design on the far right below is that of the Silver Design Mark referred to above. It was eventually featured as one of three cigarette package designs launched by PM in 2006 without any brand name.
Reg. No. TMA252,082
Reg. No. TMA252,083
Reg. No. TMA254,670
Reg. No. TMA 274,442
Reg. No. TMA465,532
Reg. No. TMA670,898
E. The “Dark Market” created by cigarette market regulations
[14] Canada’s cigarette retail market has been increasingly heavily regulated over the last years. Advertising is now almost forbidden and, since 1997, unlike almost all other consumer products, handling of cigarette products prior to purchasing is prohibited by the Tobacco Act, SC 1997, c 13.
[15] Canadian consumers have thus been required to explicitly identify the desired cigarette product at the time of purchase, either by pointing at same or verbally. Starting in 2004, pointing was no longer an option as cigarette products must be hidden from consumers’ view (the so-called “Dark Market”). The Dark Market was found in the Federal Courts decisions to be the significant contributing factor that led to confusion when PM introduced no-name cigarettes in 2006. The disputes between the parties in this and previous litigation relate to concerns of PM applying its Rooftop Design Mark in some fashion to unbranded wares so as to raise concerns of confusion with ITL’s MARLBORO mark.
F. The launch of the “no-name” packaging in 2006 and ensuing litigation
[16] In 2006, shortly after registering the Silver Design Mark (as illustrated above), in the context of the Dark Market which was gradually being implemented throughout Canada, PM Brands’ predecessor-in-title, through its Canadian licensee RBH, began selling, distributing and advertising in Canada American blend cigarettes in the packaging depicted below which was almost identical to PM’s International Package, except for the fact that it did not feature any brand name. As can be seen below, the package incorporated the slogan “COME TO WHERE THE FLAVOR IS” on the front panel, which catchphrase had been used extensively in the context of PM’s worldwide advertising in connection with the International Package. This was also the first time in worldwide cigarette history that a cigarette product was sold without a name.
[17] Other differences with the International Package were (i) the presence of the mandatory 50% health warning, which basically resulted in the shrinking of the design of the International Package by the removal of the MARLBORO mark, with the effect of making the Rooftop Design Mark more prominent in the overall packaging; (ii) the previously advertised phrase “COME TO WHERE THE FLAVOR IS” (never before on packaging) replaced the “20 CLASS A CIGARETTES” situated above the bottom line on the International Package; (iii) the insertion of number “20” in the middle of the bottom line, but otherwise maintaining it; and (iv) the addition of the mention of “WORLD FAMOUS IMPORTED BLEND/MÉLANGE IMPORTÉ DE RENOMMÉE MONDIALE”, which appears only on Canadian packaging, on the side, and implicitly refers to the switch to the full-bodied American blend tobacco sold internationally.
[18] All these design and word features in combination were referred to in the Federal Courts litigation as the “no-name” package. This characterization is opposed to that with the getup limited to any single element of the design on a package, such as the Rooftop Design Mark. In the Dark Market the no-name package was found by the Federal Court of Appeal in Philip Morris 2012 to be confusing with ITL’s MARLBORO mark and a permanent injunction issued barring its use.
G. Non-cigarette wares
[19] PM’s Registered Design Marks that are being opposed as confusing also apply to non-cigarette wares which include other smoking products such as cigars and cigarillos, and smokers’ articles which include ashtrays and lighters. As part of its marketing campaign in support of its 2006 no-name cigarettes, PM provided ashtrays and lighters to retailers bearing only its Rooftop Design Mark as demonstrated in the pictures below.
H. Federal Courts decisions relating to confusion of PM’s no-name packages and ITL’s MARLBORO mark
(1) Philip Morris 2010
[20] Concurrently with the launch of its no-name packaged cigarettes, PM commenced its action seeking a declaration that its newly released no-name packages did not infringe the rights of ITL in its MARLBORO registration (Philip Morris 2010).
[21] The trial decision is of limited significance in this matter inasmuch as the Court of Appeal concluded that due to errors in lower court’s reasoning, it should revisit and decide the matter anew. Nevertheless, three points stand out. The trial decision concluded that despite the shortcomings of the survey [the Chakrapani Survey], the evidence demonstrated that there was “a significant degree of confusion [as to] how to refer to the no-name product, especially among consumers” and that a “large number of respondents seem to associate the Plaintiffs’ [ITL’s] product to the international PM Marlboro” (Philip Morris 2010, para 282).
[22] The second relevant aspect of the trial decision was the Court’s conclusion to deny the aforesaid confusion between the marks disclosed by the Chakrapani Survey evidence largely because the phrase “ideas suggested” in paragraph 6(5)(e) of the Act “should be restricted to those ideas inherent to the nature of the trade-marks in question (for example, the design of a Penguin giving the idea of a penguin)” (Philip Morris 2010, para 290). This finding was the basis upon which the trial decision was set aside.
[23] Finally, the decision in Philip Morris 2010 impacted on this matter by its conclusion that PM’s Registered Rooftop Design Marks excluded a finding of infringement based on what was described as the Remo defence. This refers to the decision in Remo Imports Limited v. Jager Cars Limited, 2007 FCA 258 at paragraph 111 to 113 which adopted the Ontario Court of Appeal decision in Molson Canada v. Oland Breweries Ltd,. (2002), 19 C.P.R. (4th) 201. It was applied by the trial Judge to conclude that PM’s registrations afforded them an absolute defence to infringement. The decision is of importance in this respect only because in overturning the trial decision, the Court of Appeal distinguished between the confusion arising from the combination of elements in the no-name packaging getup that was found to be infringing and any confusion alleged to be caused by a single element of the packaging getup. In particular, the Court concluded that one could not extract any single element from the packaging getup to conclude that it would be confusing in its own right.
(2) Philip Morris 2012
[24] The Federal Court of Appeal in Philip Morris 2012 overturned the declaration of the trial decision that the no-name package did not infringe ITL’s MARLBORO word mark. Instead, it found confusion in the marks and issued a permanent injunction against PM’s no-name package.
[25] In carrying out her own analysis of the confusion issue, Madam Justice Gauthier concluded that paragraphs (a) to (d) of subsection 6(5) favoured ITL, as had been the trial judge’s finding. However, the Court proceeded to consider the registered word mark MARLBORO with each version (red, gold and silver) of PM’s no-name getup as proposed by ITL. Justice Gauthier concluded that the combination of elements on the packaging fell within the definition of a trade-mark in section 2 of the Act (Philip Morris 2012, para 67).
[26] Thereafter, turning to paragraph 6(5)(e), the Appeal Court rejected the trial Judge’s limited interpretation of “ideas suggested”. Instead at paragraphs 76 to 78 of its reasons, the Court concluded that the confusion evidenced from the Chakrapani Survey could not be ignored, based upon “a purposive and contextual interpretation of paragraph 6(5)(e)”. Moreover, Justice Gauthier added that the “resemblance in unusual ideas suggested by any one of the marks once established would have to be considered as part of the surrounding circumstances (opening words of subsection 6(5))”. This conclusion thereby paved the way for the Chakrapani Survey being applied to establish confusion between the marks. This in turn was the foundation for the Court’s broad permanent injunction enjoining PM from using the no-name package in association with cigarettes or other tobacco products (Philip Morris 2012, para 126).
[27] Another significant aspect of the Philip Morris 2012 decision is the Court’s admonishment at paragraph 76 that “when one invokes a resemblance based on something out of the ordinary, [i.e. not limited to those ideas inherent to the nature of the trade-marks in question, per the trial judge] evidence will be required to satisfy the Court that the particular association or suggestion does indeed exist as a matter of fact before it is considered in the analysis under paragraph 6(5)(e)”. [Emphasis added.]
[28] The Court interprets this passage as emphasizing the need for persuasive evidence to establish confusion when there is no inherent association between the two trade-marks which bear no resemblance to each other. In other words, standing back and examining the two Federal Courts decisions, each largely turned on the inadmissibility or admissibility of the Chakrapani Survey evidence as being relevant. The Court finds that the admissibility of the new survey evidence of Mr. Mills [the Mills Survey] is similarly the single determinative issue in this matter.
[29] The Court of Appeal also was required to explain why the Remo defence would have no application to prevent ITL from succeeding on its application. First, it pointed out that the confusion in the marks only arose long after the registrations when legislation created the Dark Market. ITL could not be criticized for not challenging proceedings when no basis to do so existed at the time of registration. It is for this reason that the court found the Remo defence to not apply in these appeals, even though it concluded that PM’s Rooftop Design Marks are confusing with the MARLBORO mark and despite them being identical to some of PM’s Registered Rooftop Design Marks.
[30] Second, the Court distinguished between the combination of elements on the no-name packaging, and the individual marks comprised in the packaging. It concluded that it was required to “determine whether it is the unregistered [no-name] combination alone or the individual marks, used essentially as registered, that are confusing” (Philip Morris 2012, para 103). At paragraph 108 of the decision, the Court pointed out that the surveys [implicitly referring mostly to the Chakrapani Survey] was not specifically designed to test whether consumers associated the name MARLBORO to cigarette packages bearing only the individual Rooftop Design Mark as registered. Instead the Court found that “[w]hat was presented to the participants in the survey by both parties’ experts was the no-name package as a whole”. [Emphasis added.]
[31] Based on these findings, the Court concluded that there was no probative evidence that PM’s Registered Rooftop Design Marks were confusing with the word mark MARLBORO (Philip Morris 2012, para 111). Essentially, the Chakrapani Survey failed to assess the individual Registered Rooftop Design Marks for confusion with the MARLBORO word mark.
[32] The Court’s analysis not only formed a basis for it to reject ITL’s attack on PM’s Registered Rooftop Design Marks, more significantly for these proceedings, it also struck at the heart of ITL’s case in all nine opposition proceedings before the Registrar seeking to challenge PM’s TM Applications. ITL based its case in every opposition before the Board upon the same Chakrapani Survey evidence. It was found to be irrelevant by the Board because it contained no evidence demonstrating that any of PM’s individual TM Applications were confusing with the MARLBORO word mark in accordance with the decision in Philip Morris 2012.
[33] In a situation when there is no visual or other physical resemblance between PM’s design marks and the MARLBORO word mark, the absence of probative survey evidence demonstrating confusion was fatal to all of ITL’s opposition proceedings before the Board.
I. The Applications
[34] Between 2006 and 2010, PM applied to register 17 design marks in Canada (also referred to as the TM Applications, as described above), the particulars of which are found in Annexe A to these reasons. These design marks all incorporate, what might be described as different variants of the Rooftoop Design Mark. All 17 TM Applications were approved and subsequently advertised in the Trade-Marks Journal.
J. The Oppositions
[35] ITL opposed all seventeen TM Applications filed by PM, including TMA 1,298,547 and 1,299,494 (Decision 1 below), which had been filed in 2006 — a few months prior to the launch of the no-name package. The grounds of opposition raised before the Registrar were related to confusion-based claims in respect of a) registrability pursuant to paragraph 12(1)(d) of the Act as the TM Applications are confusing with ITL’s MARLBORO word mark, b) non-entitlement to registration pursuant to paragraphs 16(1)(a) and 16(3)(a) of the Act as the word mark MARLBORO has been used by ITL since before the priority dates of filing of PM’s TM Applications, and c) non-distinctiveness of the trade-marks at issue pursuant to section 2 of the Act.
[36] ITL relied on the Chakrapani Survey as its primary evidence in its submissions before the Board. In nine decisions (Decisions 1 to 9 as defined below), the Board rejected all oppositions, citing most prominently the absence of evidence demonstrating confusion between marks bearing no resemblance to each other on the basis that the Chakrapani Survey was not relevant.
[37] Between 2013 and 2014, ITL filed notices of appeal to this Court of all nine Decisions. In June 2016, in response to a request by the parties, Prothonotary Morneau issued a Consolidation Order, allowing the parties to serve additional evidence [the Consolidation Order]. ITL’s additional evidence and related PM’s response are discussed below. In the context of the present appeal, ITL focuses its submissions primarily on the confusion between PM’s Rooftop Design Mark and its registered word mark pursuant to paragraph 12(1)(d) of the Act and in particular the factors of confusion described in subsection 6(5) of the Act.
III. The Decisions under Review
[38] In the Decisions, the Board first established that ITL bears the initial evidential burden to adduce sufficient admissible evidence to support the facts alleged in support of its grounds of opposition, and therefore that PM has the legal onus of establishing, on a balance of probabilities, that its applications comply with the Act, and that ITL’s grounds of opposition at issue should not prevent registration of the design marks at issue. The Board then proceeded to review the history of the use of the Rooftop Design Mark, its launch in the Canadian market, and the legal disputes that ensued.
[39] In addressing the non-registrability of the trade-marks at issue pursuant to paragraph 12(1)(d) of the Act, the Board outlined the test for confusion, summarized subsection 6(2) of the Act and stated that the Board is directed by subsection 6(5) of the Act to “have regard to all the surrounding circumstances”. The Board determined that the overall consideration of subsections 6(5)(a), (b), (c), and (d) statutory confusion factors, relating to the inherent distinctiveness of the marks and the extent to which they have become known, the length of use, the natures of wares, and the nature of the trade, favoured ITL. Nevertheless, the Board dismissed the oppositions on the basis of a lack of visual or phonetic resemblance between the marks, pursuant to paragraph 6(5)(e) relating to the degree of resemblance factor.
[40] The Board noted that there is no evidence of the extent to which these marks have become known in Canada and could not conclude to an intangible association with the graphical component. The Board agreed with PM in that there was no degree of resemblance between the parties’ marks in the ideas they suggested. In this regard, the Board found that the Chakrapani Survey evidence was of no assistance to ITL in any of the proceedings because, as was pointed out in Philip Morris 2012, Dr. Chakrapani’s studies were not designed to test consumer reactions to the instant Marks (i.e. the Rooftop Design Mark in isolation), but to a cigarette package made of a particular combination of various elements, which included the Rooftop Design Mark.
IV. Issues
[41] The following issues arise in this application:
What is the applicable standard of review of the Board’s decisions in view of the new survey evidence?
In light of the new survey evidence, are the trade-marks at issue confusing with ITL’s registered word mark “MARLBORO”?
Are the Board’s decisions reasonable?
V. New Evidence on Appeal
[42] ITL has filed new evidence pursuant to subsection 56(5) of the Act. It may generally be categorized into three groupings: first, consisting of evidence to assist the Court in interpreting certain descriptions of wares (which could have been introduced in any event in submissions); second, the Mills survey evidence in the form of a market research study by Mr. Don Mills intended to address the limited scope of the Chakrapani Survey evidence described in Philip Morris 2012; and third, other evidence described below. In reply, PM has tendered evidence critiquing the methodology and conclusions of the Mills Survey.
A. The Applicant’s 1st New Evidence
(1) ITL’s interpretive evidence
[43] ITL has filed the Affidavit of Ms. Andrea Plouffe [the Plouffe Affidavit], a legal clerk employed by ITL’s solicitors, dated October 15, 2013. The Plouffe Affidavit provides excerpts from the following legal resources relied upon by ITL as interpretive aids for the purpose of the appeals: (i) dictionary definition of the words “tabac”, “tobacco”, and “including”; (ii) copies of the Tobacco Act and Excise Act, printed from the Department of Justice Website; (iii) excerpts from Canadian Intellectual Property Office’s [CIPO] Trademarks Examination Manual; (iv) certified copies of various trade-mark registrations; and (v) a printout of the Supreme Court of Canada Decision dismissing the application for leave to appeal from the judgment in Philip Morris 2012. ITL claims that these resources establish that the phrase “[t]obacco, raw or manufactured, including.…” in the description of wares in Decision 1 extends to include “cigarettes”.
(2) ITL’s survey evidence
[44] The survey evidence filed by ITL is a 15-page Affidavit of Mr. Mills sworn on November 4, 2013 [the Mills Affidavit]. He is a survey expert and co-founder, Chairman and Chief Executive Officer of Corporate Research Associates Incorporated [CRA], a national market research company. Mr. Mills designed, implemented and conducted a national survey of 1,257 daily adult smokers from a sampling of 19 Canadian communities. The methodology as set out in the survey report entitled “Market Association of Rooftop Design Marks — A Study among Adult Smokers” (AR, p 21,570) provides for testing a print of a three-dimensional tobacco product, featuring one of the three representative design marks, and a “Control Design”, placed in front, side and top views, in black and white. The rationale behind the utilization of three representative design marks was discussed in the Smart & Biggar letter of instructions dated August 28, 2013 (AR, p 21,140). As depicted below, the mandatory health warnings were included in each sample. Mr. Mills was cross-examined on his Affidavit in December 2016.
[45] The Mills Affidavit attests that the survey establishes a link between the three representative design marks of PM in the format presented to survey participants, taken in isolation, and ITL’s MARLBORO word mark. The relevant passage in the Mills Affidavit disposing of the question of “association” — on a first / immediate impression basis — relied upon by ITL in their Memorandum of Fact and Law, at paragraph 69, reads as follows:
Marlboro is statistically significantly more likely to be associated with each of the Rooftop Design marks tested than with the Control Design (Rooftop Full=22%, Rooftop Thin=12% or Rooftop Window=10%, Control Design=2%). (AR, p. 21,119, para 25)
[46] ITL has also filed the Affidavit of Ms. Joyce Rees, dated November 5, 2013 [the Rees Affidavit]. Ms. Rees is co-founder and President of Advitek, a data collection service company for the market research industry, specializing in quantitative market research. In her affidavit, Ms. Rees attests that CRA mandated Advitek to collect data underlying the findings in the Mills Survey report. The Rees Affidavit explains that interviews were conducted using the questionnaire developed by CRA, which was coded in Advitek’s own proprietary survey software system, the Tapestry Computer Assisted Personal Interviewing system. Ms. Rees attests that she prepared instructions to be given to interviewers and personally attended all training sessions of said interviewers in preparation for the field surveys.
B. Respondent’s Reply Evidence
(1) The Redesigned Rooftop litigation evidence — (pending litigation)
[47] PM has filed the Affidavit of Ms. Adriana Morillo, legal assistant with PM’s affiliate, sworn July 18, 2014. The Affidavit attaches printouts of the current MATADOR packaging as well as PM’s redesigned (Rooftop) packaging launched on July 23, 2012 as depicted below [the Redesigned Rooftop], which is the subject of the pending trade-mark infringement action brought by ITL (Court File No. T-1280-14).
(2) PM’s reply survey evidence
[48] In response to the Mills Survey, PM has also filed the Affidavit of Dr. Ruth Corbin [the Corbin Affidavit], Chair and former Managing Partner of CorbinPartners Inc., a marketing science company, sown July 17, 2014. In her Affidavit, Dr. Corbin opines on the reliability of the Mills Survey, in particular the survey methodology and conclusions. Dr. Corbin explains that the survey is not relevant as the line of questioning did not assess a likelihood of confusion and addressed the brands rather than the ideas suggested (Corbin Affidavit, paras. 42-3). Dr. Corbin was cross-examined on her Affidavit in December 2016. ITL submits that the criticisms in the Corbin Affidavit are of little consequence as the affiant failed to conduct a study of her own.
C. Applicant’s 2nd New Evidence
(1) The Redesigned Rooftop litigation evidence — (pending litigation)
[49] ITL has filed additional evidence following the Consolidation Order. The Affidavit of Van Khai Luong [the Luong Affidavit], paralegal employed by Counsel for ITL, dated July 29, 2016. The Luong affidavit provides various documents filed in the context of the Redesigned Rooftop litigation evidence: (i) the parties most recent pleadings’ in the pending redesigned packaging, (ii) photographs of the red, gold and silver variants of the “redesigned” packaging at issue in the said proceedings, (iii) PM’s promotional materials addressed to retailers in the context of the launch of the 2012 Redesigned Rooftop package; and (iv) photographs of ITL’s current MARLBORO packaging. ITL submits that these documents demonstrate that PM’s efforts in recent years have been shifting towards having less emphasis on the word mark, and focusing on the primacy of the Rooftop Design Mark in the packaging — in Canada and internationally.
[50] PM disagrees that this evidence is relevant, noting that this argument is premature.
(2) International rooftop design use evidence
[51] The Luong Affidavit also contains pictures of the red and gold variants of PM’s International Package available for sale in Germany and Italy, and various printouts of documents relating to PM’s international products. ITL submits that this is another example of PM marketing the dominant association of the Rooftop Design Mark with its cigarette and other associated products in its worldwide advertising.
(3) Cigar wares packaging evidence
[52] The Luong Affidavit further contains photographs of cigarillos and cigars sold in similar packaging to that of cigarettes. ITL claims that this additional evidence establishes the similarity between the shape of the packaging used for cigarettes, cigarillos, and small cigars, in support of the relevance of the survey evidence to those wares.
VI. Standard of Review
[53] It is common ground that an appeal from a decision of the Registrar of Trade-marks in opposition proceedings is reviewable under the reasonable standard, unless new evidence is put forward on appeal that would materially affect the Registrar’s findings. In such a case, the Court must reassess the decision of the Registrar, as the date of the Court’s decision, on the basis of the extended record and draw its own conclusions on appeal: Shell Canada Ltd. v. PT Sari Incofood Corp., 2008 FCA 279 at para 22; Molson Breweries v. John Labatt Ltd., [2000] 3 FC 145 at para 11.
[54] PM submits that there is no basis for reconsidering ITL’s oppositions as the new evidence put forward by ITL “suffers from the exact same flaws as the “old” survey evidence before the Opposition Board: it fails to test consumer reactions to each of the applied-for trade-marks, in isolation, and in association with the full range of goods listed in the applications”. PM claims that the decisions should be reviewed on the reasonableness standard, based on the record before the Board. ITL, on the other hand, stresses the probative value of the new survey evidence urging the Court to reconsider the validity of the oppositions afresh.
[55] The Court will first consider whether the new evidence would materially alter the Board’s conclusions concerning the likelihood of confusion in the nine Decisions. This analysis leads the Court to conclude that the new evidence would not affect the conclusions on confusion in any of the Decisions, with the exception of the TM Applications considered under Decision 4. The new evidence is admitted in regard to that Decision, and along with it the supplementary evidence relating to the International Packages and advertisements. Thereafter, the Court will review Decision 4 de novo, based on the old and newly admitted evidence, to conclude that the applications therein are confusing with the MARLBORO mark. The appeals in the remaining Decisions are rejected based on a standard of review of reasonableness.
VII. Analysis
A. Legal Principles on the Admission of New Evidence and Survey Evidence
(1) Admitting new evidence
[56] In assessing whether new evidence filed on appeal is material pursuant to subsection 56 (5) of the Act, the Court must assess to what extent the new evidence has a probative significance which extends beyond the material that was before the Registrar: Levi Strauss & Co. v. Vivant Holdings Ltd., 2005 FC 707 at para 27.
[57] The applicable principles to determine whether new evidence would materially affect the Registrar’s findings is described by Mr. Justice de Montigny in Suzuki Motor Corp. v. Hayabusa Fightwear Inc., 2014 FC 784 at para 26 as follows:
When considering the impact of the new evidence filed, quality is more significant than quantity… Additional evidence filed to fill the gaps or remedy deficiencies identified by the Registrar will generally be considered material. On the other hand, if the new evidence merely replicates what was already before the Registrar without substantially adding to the nature of the information already filed, it will not be considered sufficient to warrant a review on the standard of correctness […]
[Emphasis added.]
(2) Admitting survey evidence
[58] Consumer surveys can be admitted as evidence, if relevant and properly designed: Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 at para 94 [Masterpiece].
[94] The use of consumer surveys in trade-mark cases has been recognized as valid evidence to inform the confusion analysis. As Binnie J. noted in Mattel, often the difficulty with survey evidence is whether it meets the first of the Mohan requirements: relevance. At para. 45, he further divided the question of relevance into two sub-issues:
As to the usefulness of the results, assuming they are elicited by a relevant question, courts have more recently been receptive to such evidence, provided the survey is both reliable (in the sense that if the survey were repeated it would likely produce the same results) and valid (in the sense that the right questions have been put to the right pool of respondents in the right way, in the right circumstances to provide the information sought).
[Emphasis in original.]
[59] The considerations relevant to the admissibility of the Mills Survey in this matter, apart from it being new evidence, may be summarized from paragraphs 46 to 48 of Mattel U.S.A. Inc. v. 3894207 Canada Inc., 2006 SCC 22 [Mattel] as follows, with the Court’s emphasis:
carried out in an impartial and independent manner;
required to demonstrate a likelihood, and not merely a possibility of confusion so as to:
o be relevant, in the sense of having sufficient probative value to support a finding of fact having connexion to the issue to be considered (that of confusion as to source);
o be reliable, i.e. if the survey were repeated, likely producing the same results;
o be valid, in the sense that:
§ the right questions have been asked, i.e. directed to the issue of confusion, not to measure the public recognition of a word;
§ the trade-mark used in the survey is precisely the trade-mark applied for [this issue is discussed further below];
§ put to the right pool of respondents, i.e. not exclude, but include appropriate respondents; and
§ in the right way in the right circumstances to provide the information sought, i.e. not merely showing a design logo without any context and then subsequently immediately removing it from their site and asking questions, or not providing relevant information, o