Remo Imports Ltd. v. Jaguar Cars Limited

Remo Imports Ltd. v. Jaguar Cars Limited
Court (s) Database
Federal Court of Appeal Decisions
Date
2007-07-18
Neutral citation
2007 FCA 258
File numbers
A-62-06
Notes
Reported Decision
Decision Content
Date: 20070718
Docket: A-62-06
Citation: 2007 FCA 258
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
TRUDEL J.A.
BETWEEN:
REMO IMPORTS LTD.
Appellant
and
JAGUAR CARS LIMITED
and
FORD MOTOR COMPANY OF CANADA, LIMITED/FORD DU CANADA LIMITÉE carrying on business as JAGUAR CANADA
Respondents
Heard at Montréal, Quebec, on June 26, 27 and 28, 2007.
Judgment delivered at Ottawa, Ontario, on July 18, 2007.
REASONS FOR JUDGMENT BY: LÉTOURNEAU J.A.
CONCURRED IN BY: DÉCARY J.A.
TRUDEL J.A.
Date: 20070718
Docket: A-62-06
Citation: 2007 FCA 258
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
TRUDEL J.A.
BETWEEN:
REMO IMPORTS LTD.
Appellant
and
JAGUAR CARS LIMITED
and
FORD MOTOR COMPANY OF CANADA, LIMITED/FORD DU CANADA LIMITÉE carrying on business as JAGUAR CANADA
Respondents
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1] These proceedings involve an appeal and a cross-appeal against a decision (2006 FC 21) of Shore J. of the Federal Court of Canada (judge).
[2] By his decision, the judge dismissed the appellant’s action for infringement and allowed the respondents’ counterclaim. He declared invalid the appellant’s registered trade-mark No. 263,924 and expunged it from the registry. He declared valid the respondents’ registration Nos. 378,643 and 378,644, including the following wares objected to by the appellant: driving license cases, wallet cases, business card holders, belts, credit card holders, key cases, address books, note books, passport holders, beauty cases, document cases and pocket wallets.
[3] In addition, the judge issued an injunction restraining and permanently enjoining the appellant from, broadly stated, using the trade-mark JAGUAR and a Leaping Jaguar design, selling and advertising products using the above trade-mark or design and passing off its wares for those of the respondents. An order also issued for the destruction of all products in the possession or within the power or control of the appellant which bear a trade name, design or trade-mark which is contrary to the injunction granted.
[4] Finally, the judge dismissed the respondents’ claim for damages. This part of the judge’s decision is the subject of the respondents’ cross-appeal.
[5] The appellant initially asked this Court to reverse the judge’s decision, declare its trade-mark valid and amend the respondents’ trade-marks so as to delete from the description of the wares those to which the appellant objected. It also sought a declaration of infringement of its trade-mark by the respondents, the expungement of the respondents’ trade-marks and the issuance of a permanent injunction requiring the respondents to cease to infringe the appellant’s trade-mark.
[6] There are other conclusions sought by the appellant such as damages. However, it is not necessary to detail them for the purpose of this appeal.
[7] What was after all a simple matter has been rendered unduly and unnecessarily complex by the litigants. The 143 page judgment of the Federal Court, with an unfortunate use of loose language, did nothing to improve the situation.
[8] The appeal process has not been spared either. Orders of this Court were necessary to keep the parties within the boundaries of reason and enforce compliance with the Federal Courts Rules (Rules): see the orders of Sexton J.A., dated August 9, 2006, Décary J.A. dated September 5, 2006, Noël J.A. dated November 9, 2006 and Létourneau J.A. dated December 20, 2006.
[9] Yet the Amended Notice of Appeal filed by the appellant contains no less than forty-nine (49) pages. In Marchand Syndics Inc. v. Canada (Superintendent of Bankruptcy) 2006 FCA 368, this Court reasserted the role and purpose of the Notice of Appeal. At paragraph 14, I wrote for the Court:
…Rule 337 indeed provides that the notice of appeal must set out a complete and concise statement of the grounds intended to be argued. These are the grounds normally elaborated in the memorandum of fact and law. The appellants’ notice of appeal is twenty pages long and reflects everything but the complete, concise, and precise grounds of appeal. It is in fact a veiled, deficient memorandum of fact and law.
As will be seen below, the above statement is even truer in this case.
[10] Three days before the hearing of the appeal, the appellant, by letter addressed to the Registry of the Court, abandoned its claim of infringement against the respondents as well as its demand for the expungement of the respondents’ trade-marks.
[11] On the first morning of the hearing, another counsel for the appellant, who had been recently added to the record, made submissions to the Court. He argued that the judge made five errors of law which warrant the reversal of his decision. Some of these alleged errors were not addressed in the Memorandum of Fact and Law or the Amended Notice of Appeal. Others were barely alluded to or cast in such broad terms in the written material that one would be hard pressed to recognize the development made of these errors at the hearing. As a result, the appeal took a different turn and we expressed our concern that it had become an appeal by ambush.
[12] The respondents object to this Court entertaining any issue raised for the first time on appeal. They invoke, in support of their objection, the Federal Court decisions in Kioroglo v. Canada (Minister of Citizenship and Immigration), [1994] F.C.J. No. 1606 and Mishak v. Canada (Minister of Citizenship and Immigration), [1999] F.C.J. No. 1242 in which the Federal Court quoted the following statement from our colleague Décary J.A. in Sola Abel Lanlehin v. M.E.I., A-610-90, March 2, 1993:
This case raises disturbing questions as to the validity of the decision of the Refugee Division, and specifically as to the participation of one of the two members in the reasons for the decision. These questions were not, however, raised by the appellant in his memorandum, and it may be that, had the respondent known in time, she would have been able to explain the contradictions that are apparent on the record. At this point, we cannot assume that the decision is invalid and we are of the opinion, in the circumstances, that the appeal should be dismissed.
In the Kioroglo case, counsel for the applicants sought to introduce at the hearing a ground which did not appear in the application for judicial review while in the Mishak case, the applicants wanted to argue an issue that was not in their Memorandum of Fact and Law. In both cases, the respondent’s objection was maintained by the Federal Court.
[13] The respondents have every right to complain. As a general rule, for obvious reasons, our Court will not hear grounds of appeal that were not raised in the Notice of Appeal or the Memorandum of Fact and Law. While exceptions relating, for example, to jurisdictional issues may be admitted, this is not the case here.
[14] Not knowing the position that our Court would take on their objection, the respondents have argued the merits of each of the five alleged errors. I believe that it is necessary to identify these errors so that future litigants intending to rely on the Federal Court’s decision can be aware of them and of their treatment by this Court.
[15] The appellant contends that the judge:
a) erred in imposing on the appellant the burden of proving a likelihood of confusion and then proceeded to apply the wrong test when determining whether confusion or likelihood of confusion existed;
b) erroneously expunged the appellant’s trade-mark on the basis of two grounds, namely deception and depreciation, which are not grounds of invalidity under section 18 of the Trade-marks Act, R.S.C. 1985, c. T-13 as amended (Act);
c) erroneously expunged the appellant’s trade-mark on the basis of a prior use when the limitation period contained in subsection 17(2) of the Act had run;
d) erroneously expunged the appellant’s trade-mark on the basis that the trade-mark was invalid because it was not registrable on account of confusion (paragraph 18(1)(a)) and also invalid because it was not distinctive from the wares of the respondents (paragraph 18(1)(b)); and
e) granted an injunction against the appellant when there were no valid grounds for issuing it.
[16] Before I review the submissions of counsel for the appellant, I would like to dispose of the appellant’s main ground of appeal relating to the fame of the respondents’ trade-marks JAGUAR.
Whether the respondents’ trade-marks “JAGUAR” for automobiles, luggage wares and other related accessories was famous by 1980, 1990 and still is today
[17] The judge found that the respondents’ trade-marks had become famous for automobiles and luggage wares by 1980. At paragraph 213 of his reasons for judgment he wrote:
[213] The witnesses for Jaguar Cars showed that it is, and has been since at least 1980, a natural brand extension or expansion from luxury cars into Luggage Wares, defined as:
luggage, bags, cases, sacs, tote bags and other wares used to contain or hold smaller wares; attaché cases, briefcases, handbags; school bags; license cases, wallets, cardholders; keyrings, keycases; garment bags, suitcases, flight bags, folios, keyfobs, sports bags; driving license cases, wallet cases, business card holders, belts, credit card holders, passport holders, beauty cases, document cases, pocket wallets; address books, note books, camera bags; knapsacks, carry-ons, travel bags, sport bags, tennis bags, cosmetic bags/pouches, money belts, waist bags, lunch bags, and computer cases.
[18] He also found that the respondents’ trade-marks were still famous at the time the appellant brought its action against the respondents in 1991, and still are today.
[19] Upon a sampling review of the extensive record (6,000 exhibits, hundreds of binders, dozens of samples), I am satisfied that there was ample and cogent evidence in the agreed statements of fact and the voluminous evidence adduced by the respondents to support the judge’s conclusion. I see no overriding and palpable error in respect of this issue that would justify or require an intervention on our part.
[20] I should add that, as an American appellate judge once said, judges are not ferrets: cited in Dow Agrosciences Canada Inc. v. Philom Bios Inc., 2007 ABCA 122, at paragraph 53. It cannot be expected that appeal judges will embark on a search of the record to find pieces of evidence which could support or particularize broad allegations made by a party to the appeal.
Whether the judge erred in imposing upon the appellant the burden of proving that there is no likelihood of confusion and applied the wrong test to the issue of confusion
1. Alleged error as to the burden of proof
[21] Paragraph 88 of the appellant’s Memorandum of Fact and Law is the only basis for the extensive argument developed by the appellant at the hearing. The paragraph reads:
88. It is submitted respectfully that the criteria of section 6(2) of the Act were not proven by the Respondents, which was their onus to do. Accordingly, the Trial Judge erred at paragraph 306 of his Reasons (AB, Vol. 1, p. 219).
[22] The judge expressed himself in the following terms at paragraph 306 of his reasons for judgment:
[306] When a senior user’s mark has become very well known across Canada and/or internationally, it is entitled to a much wider area of general protection beyond the wares in respect of which the mark has been used. In such cases, the burden on the junior user to dispel any likelihood of confusion is particularly difficult to overcome. Remo has not met its heavy burden to dispel likelihood of confusion where the JAGUAR cars’ mark was famous at the material dates.
[Emphasis added]
[23] Counsel for the appellant submits that the respondents who were seeking the expungement of the appellant’s trade-mark bore the burden of proving a likelihood of confusion. He relies upon a decision of the Exchequer Court of Canada in Parke, Davis & Co., Ltd. v. Empire Laboratories Ltd., 41 C.P.R. 121 where Noël J. held that the burden to show invalidity rests with the party seeking expungement.
[24] In fairness to the judge, I should say that each party to the proceedings was seeking the expungement of the other’s trade-mark. In these circumstances, it would have been helpful if the judge had addressed in a comprehensive manner the issue of the burden of proof.
[25] In coming to the conclusion that he did in paragraph 306 of his reasons, the judge relied upon the decision of the Federal Court in Advance Magazine Publishers Inc. v. Masco Building Products Corp., 86 C.P.R. (3d) 207.
[26] This case involved an opposition to the registration of a trade-mark. The burden is, in these instances, on the party seeking registration of a trade-mark to show that there is no likelihood of confusion if the registration is allowed. Here, however, the situation is different. The respondents are seeking the expungement of a registered mark. I agree with the appellant that the burden of proving confusion was on the respondents: see Parke, Davis & Co., Ltd., supra.
[27] The appellant also submits that this error of the judge permeates the other issues. For example, the reasons for judgment are silent on the burden of proof regarding depreciation of the value of the goodwill attached to the respondents’ trade-marks. It is not unreasonable, the appellant says, to conclude that the judge took the same approach to this issue as he did for the issue of confusion.
[28] That the burden of showing depreciation is on the party claiming infringement of its trade-mark has been confirmed by the Supreme Court of Canada in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23 where, at paragraph 15, Binnie J. wrote:
Despite the undoubted fame of the mark, the likelihood of depreciation was for the appellant to prove, not for the respondents to disprove, or for the court to presume.
[29] I am willing to accept the appellant’s submission that if the judge made the alleged error in relation to confusion, he, in all likelihood, made the same error with respect to depreciation. Counsel for the respondents conceded that this was a reasonable inference to draw and submitted that the opposite inference should be made if we were to find that the judge made no error with respect to likelihood of confusion.
[30] Counsel for the respondents contends that the impugned statement was made by the judge in the context of the special difficulty created by a well known mark when comes the time of rebutting evidence of confusion adduced by the holder of the well known mark.
[31] There is no doubt that the statement made by the judge is at best ambiguous. His reference to the Advance case would tend to support the narrow and plain reading that the appellant makes of paragraph 306 of the reasons for judgment.
[32] However, in sub-paragraph 258(7)(f) of his reasons, where he distinguished the Toyota Jidosha Kabushiki Kaisha v. Lexus Foods Inc. case (2000), 9 C.P.R. (4th) 297 from the present instance, the judge expressly recognized that the burdens in the case of an opposition “differ significantly from the causes of action and expungement bases at play in this case”. He was aware of the fact that the burden of proof was different in matters of expungement.
[33] Furthermore, the judge twice used the word “dispel” in relation to the likelihood of confusion. The word “dispel” only makes sense in this context if a likelihood of confusion has already been established by the holder of the famous mark. One cannot dispel what does not exist. The word cannot be read as casting on the appellant the initial burden as regards likelihood of confusion.
[34] I think in the end that the judge was simply saying that, where a likelihood of confusion with a famous trade-mark entitled to a wide protection has been established, overcoming that evidence is a difficult task to assume. In my view, the word “burden” in paragraph 306 was not used in the legal sense of a burden of proof, but rather in the ordinary or colloquial sense of an arduous or daunting task.
[35] In any event, even if it were assumed that the judge made an error of law respecting the burden of proof, that error, as we shall see, would not be material. This brings me to the second part of the first error alleged, i.e. whether the judge applied the wrong test for confusion.
2. Whether the judge applied the wrong test for confusion
[36] The appellant’s contention with respect to confusion is that the judge, while referring to the Act and stating the test as it appears in the Act, applied an erroneous test. Counsel for the appellant finds support for his view in paragraphs 7, 303(2) and 345 of the reasons for judgment. I should point out that the judgment itself, in its subparagraph 2(3), contains a clear conclusion as to the likelihood of confusion now and for the future.
[37] The impugned paragraphs and subparagraph 2(3) of the judgment read as follows:
[7] It is the Court’s ultimate conclusion that even if confusion did not take place in the past, it has the potential to exist which, in and of itself is of major significance.
[Underlined in the original]
[303] (2) Likelihood of confusion is established when it is proven to exist on a “balance of probabilities”. The likelihood of confusion has been established in potential, even if it did not exist in actuality.
[Emphasis added]
[345] Based on the principles of confusion referred to above, it is concluded that confusion is possible.
[Emphasis added]
2. Plaintiff’s Registration No. 263,924 is and always has been invalid, and shall be expunged on the bases that at all material times:
…
(3) Use of Plaintiff’s JAGUAR Mark in association with Luggage Wares is likely to cause confusion with Defendants’ trademark JAGUAR for automobiles and JAGUAR for Luggage Wares, and therefore:
[Emphasis added]
[38] The three statements referred to by the appellant are found in a sea of others regarding confusion: see paragraphs 298, 302, 303(4), 303(5), 306, 308, 310, 313, 317 and, as already mentioned, in the formal judgment. They are disturbing as they refer to a possibility of confusion as opposed to a likelihood. A mere possibility of confusion is not sufficient to invalidate a trade-mark: see Veuve Clicquot Ponsardin, supra, at paragraph 37; Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, 38 C.P.R. (4th) 214 (F.C.A.); Anheuser-Busch, Inc. v. Carling O’Keefe Breweries of Canada Ltd., 10 C.P.R. (3d) 433 (F.C.A.). Indeed, the judge’s statement in subparagraph 303(2) of his reasons waters down the test to a possibility of a probability.
[39] I agree with the appellant that the three statements indicate a misconception or misapprehension of the test. However, that being said, this is not the end of the matter.
[40] There were facts on the record which could lead the judge to conclude that there was evidence of at least likelihood of confusion, if not actual confusion. First, the definition that the appellant gave of its “Maroquinerie” included the four items mentioned in its trade-mark, i.e. tote bags, handbags, school bags and luggage: see appeal book, volume 2, at page 362, admission D. 356.
[41] Second, the respondents’ list of luggage wares included the above four items: see respondents’ appeal book, volume 2, page 697, at paragraph 2 and the definition of luggage wares in Schedule A, at page 699.
[42] Third, the appellant admitted at trial confusion with some of the wares of the respondents. That admission can be found in volume 1 of the appeal book at page 375. It reads:
Confusion:
D509. The Plaintiff’s use of the trade-mark JAGUAR in association with the Plaintiff’s wares is confusing with Jaguar Cars’ trade-mark JAGUAR used in association with driving license cases, wallet cases, business card holders, belts, credit card holders, key cases, address books, note books, passport holders, beauty cases, document cases and pocket wallets:
(1) at the date of commencement of the action; and
(2) at present.
[Emphasis added]
[43] Counsel for the appellant points out that said admission does not cover the four previously mentioned items that are an important part of the appellant’s registered trade-mark and trade. It will be recalled that the judge found these four items to be, since at least 1980, part of the “natural brand extension or expansion from luxury cars into Luggage Wares”: see paragraph 213 of the reasons for judgment.
[44] In my view, the matter can be understood as follows: as of 1991 and the time of trial, the appellant admits the existence of actual confusion between its wares and respondents’ wares of a slightly different category. Given this admission, it is hard to imagine how and why the judge could not conclude that there would be at least a likelihood of confusion between similar wares or wares of the same category, namely the appellant’s baggage, tote bags, school bags and handbags and the respondents’ luggage, baggage and bags. He was entitled to draw that conclusion after having concluded that the respondents’ trade-marks were famous and extended to the impugned wares.
[45] Furthermore, it is the appellant who launched an action for infringement and sought an injunction against the respondents, alleging that their wares were either confusing, causing confusion or likely to cause confusion with its own wares. The respondents counterclaimed, also alleging confusion and that the appellant was the source of that confusion. The judge found in favour of the respondents.
[46] In paragraphs 12, 14d), 15 and 17 of its declaration, the appellant stated:
12. By virtue of such conduct, the Defendants are infringing Remo’s exclusive right to the trade-mark JAGUAR in Canada. Defendants’ use of the trade name JAGUAR and of the Offending Marks is likely to cause confusion in Canada with Plaintiff’s Trade-Marks.
14. Plaintiff submits that the abovementioned entries in the Register of Trade-Marks do not accurately express or define the existing rights of the Defendant J-England with respect to:
“driving license cases, wallet cases, business card holders, belts, credit card holders, key cases, address books, note books, passport holders, beauty cases, document cases and pocket wallets” (collectively the “Offending Wares”)
for the following reasons:
…
d) the Offending Marks were not registrable with respect to the Offending Wares since they were at all material times and continue to be, confusing with the Trade-Mark JAGUAR previously registered in Canada by the Plaintiff.
15. The Offending Wares registered under the Offending Marks, namely:
“driving license cases, wallet cases, business card holders, belts, credit card holders, key cases, address books, note books, passport holders, beauty cases, document cases and pocket wallets”
are clearly of the same general class or category of wares as those registered and sold under the Plaintiff’s wide-known Trade-Marks.
17. The activities of the Defendants in using the Offending Marks JAGUAR and JAGUAR & Design with respect to Maroquinerie also constitute unfair competition in that they:
(a) call attention to the wares and business of Defendants in such a way as to cause or be likely to cause confusion in Canada between Defendants’ wares and business and the wares and business of Plaintiff; and
(b) constitute the passing-off of other wares for those ordered or expected.
[Emphasis added]
[47] On the basis of alleged confusion, the appellant sought, from the Federal Court, relief in the following terms regarding the use of the JAGUAR Mark and Design with respect to its Maroquinerie:
(a) TO MAINTAIN the present action;
(b) TO DECLARE that the adoption and use by Defendants of the Offending Marks JAGUAR and JAGUAR & DESIGN in connection with Maroquinerie constitute an infringement of Plaintiff’s exclusive rights in its Trade Mark JAGUAR registered under No. 263,924;
(c) TO ISSUE an order for a permanent injunction requiring Defendants, their directors, officers, shareholders, licensees, clients, representatives, servants, agents, associates, employees, heirs, assignees and all those over whom Defendants exercise control or in whom they hold an interest, or any other persons having any cognizance of the Orders rendered pursuant hereto, to immediately cease, whether directly or indirectly from:
(i) infringing or being deemed to infringe Plaintiff’s registration No. 263,924 for the trade mark JAGUAR;
(ii) manufacturing, causing to be manufactured, importing, selling, offering for sale, distributing, advertising, or promoting in Canada with respect to any Maroquinerie any trade mark or trade name that consists of or includes the word JAGUAR or any representation of a jaguar or any combination thereof or any trade mark or trade name that is capable of causing confusion with Remo’s trade mark JAGUAR;
(iii) calling the attention of the public to their wares in a manner that causes or is likely to cause confusion in Canada between their wares or business and those of Plaintiff;
(iv) passing-off other wares for those ordered or expected;
(d) TO ORDER Defendants to remit to Plaintiff all Maroquinerie and all advertising, publicity materials, signage, literature, papers and all materials of any kind relating thereto in the possession or custody or under the control of Defendants or third parties for whom Defendants are responsible as may offend the injunction sought herein;
[Emphasis added]
[48] Now, on appeal of the same proceedings after having lost at trial, the appellant contended at the oral hearing that there is no confusion between its wares, consisting of baggage, tote bags, handbags and school bags and all the luggage wares of the respondents. Its contention came after it abandoned, three days before the hearing, its claim of infringement by the respondents. The appellant has significantly changed its argument from what it claimed before the judge. At first instance, it initiated an infringement action with the intention of preventing the respondents from trading in Maroquinerie under the name Jaguar. Now, the appellant seeks to have the parties’ uses of the marks coexist with respect to baggage, tote bags, handbags and schoolbags. The basis for this position is that, as the parties operate in different markets, there is no confusion between the parties’ wares. In my view, the fact that the parties operate in different markets is not sufficient to overrule the judge’s finding that there was a likelihood of confusion. Nothing in the terms of either party’s registration confines that party to operation in a particular market, and the likelihood of confusion therefore remains.
[49] Furthermore, paragraphs 101 and 102 of its Memorandum of Fact and Law alleged until then existing confusion and sought a permanent injunction:
The evidence has revealed that the Respondents are offering for sale and selling in Canada tote bags, baggage (suitcases and luggage) and handbags in association with the trade-mark “JAGUAR” and are continuing to do so to date.
It is submitted that inasmuch as the Appellant has established the essential elements set forth in the Standard Knitting case, it is entitled to a declaration that the Respondents have infringed the Appellant’s exclusive rights in its trade-mark “JAGUAR” registered under no. 263, 924, as well as the issuance of a permanent injunction restraining the Respondents, their officers, directors, licensees, dealers and employees from causing to be manufactured, importing, offering for sale, selling, advertising or promoting in Canada tote bags, suitcases, luggage, handbags and any other leather products in association with the trade-mark “JAGUAR” or any other trade-mark which is confusingly similar with the Appellant’s trade-mark “JAGUAR”.
[Emphasis added]
[50] Counsel for the appellant relies on a statement of L’Heureux-Dubé J. in Sport Maska Inc. v. Zittrer, [1988] 1 S.C.R. 564 to submit that the appellant’s pleadings are not binding on this Court. At page 612, she wrote:
A digression must be made here. In his opinion LeBel J.A. [as he then was] notes that [TRANSLATION] "the pleadings of respondent [here the appellant] confirm the way in which it regarded the functions of appellants [here the respondents]" (p. 393). This "admission" can be found in paragraph 15 of the statement of claim, where respondent charged that appellants had broken certain obligations although they had [TRANSLATION] "agreed to be arbitrators". LeBel J.A. appears to regard this as a judicial admission.
At the hearing appellant explained that this word was used not in the legal sense, as it is found in the Quebec Code of Civil Procedure, but in a very broad sense as it is used in everyday language, and that, in any event, the classification of respondents' function was a question of law which could not be the subject of a judicial admission.
In the very recent judgment of this Court C.(G.) v. V.-F.(T.), [1987] 2 S.C.R. 244, in which a similar situation occurred though in a different context, Beetz J., delivering the unanimous judgment of the Court, held as follows at p. 257:
At the hearing, counsel for the appellants conceded that the award of custody to a third person would amount to a declaration of partial deprivation … This concession on a point of law is not binding on the Court.
A similar conclusion must be drawn here.
[51] The appellant claims that this passage prevents the Court from relying on its allegation that the parties’ respective uses of the JAGUAR mark were confusing. There are at least two reasons why Sport Maska and the current case are distinguishable. First, to state that the Court is not bound by the parties’ concessions is very different from stating that a party is not bound by its own statements. It is one thing for a litigant to adopt alternative positions. It is quite another for a litigant to simultaneously adopt positions in the same proceedings based on diametrically opposed interpretations of the same facts, and seek to have the benefit of both positions. As previously mentioned, the appellant stated initially that there was confusion between the parties’ marks in all respects; it now states that there is no confusion between the parties’ marks in respect of baggage, tote bags, school bags and handbags. The appellant’s success in this argument would be an internally inconsistent result. As I have already said, if the mark is confusing for key chains and wallets, it is also confusing for baggage, tote bags, school bags and handbags.
[52] Second, while the Supreme Court of Canada in Sport Maska dealt with a legal concession, the question of confusion is a question of mixed fact and law with a large factual component. Indeed, subsection 6(5) of the Act contains a non-exhaustive list of relevant factual considerations to guide the Court’s analysis of confusion. On a question of mixed fact and law which depends so heavily on the relevant facts, the Court is entitled to rely on the facts adopted by the appellant in advancing its argument that the respondents’ use of the JAGUAR mark was confusing with the appellant’s registered marks with respect to all wares. That the Court now relies on these facts in a manner detrimental to the appellant’s interests was the risk that the appellant took in advancing this particular argument and its factual underpinnings in the infringement claim before the Federal Court.
Whether the judge improperly added to section 18 of the Act two grounds of invalidity, i.e. depreciation and deception of the public, not recognized as such by Parliament
[53] Subsection 18(1) of the Act enumerates four grounds of invalidity of a registered trade-mark:
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.
[54] Non-statutory grounds of invalidity have been recognized such as misappropriation of a trade-mark in violation of a fiduciary duty and fraudulent or material misrepresentations for the purposes of registration: see Fox on Canadian Law of Trade-Marks and Unfair Competition, (4th ed.), Thomson and Carswell, Toronto, pages 11-24. Depreciation of the value of the goodwill and deception of the public in the context of the tort of passing off one’s goods as those of another are not grounds of invalidity under section 18 of the Act.
[55] The judge analyzed depreciation within the parameters of section 22 of the Act: see paragraphs 241-284 of the reasons for judgment. Section 22 deals with that issue in the following terms:
22. (1) No person shall use a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto.
22. (1) Nul ne peut employer une marque de commerce déposée par une autre personne d’une manière susceptible d’entraîner la diminution de la valeur de l’achalandage attaché à cette marque de commerce.
[56] Subsection 22(1) provides a remedy, even when there is no evidence of confusion, by which the respondents in this case may seek relief from the appellant’s use of a mark sufficiently similar to theirs “to evoke in a relevant universe of consumers a mental association of the two marks that is likely to depreciate the value of the goodwill attaching to the [respondents’] mark”: see Veuve Clicquot Ponsardin, supra, at paragraph 38. That remedy is not a ground of invalidity of the registration of the appellant’s trade-mark contrary to what the judge found at paragraph 331 of his reasons for judgment.
[57] As for deception of the public, the judge relied upon the 1924 decision of the Exchequer Court of Canada in Williamson Candy Co. v. W.J. Crothers Co., [1924] Ex. C.R. 183 where expungement of the mark was ordered. The judge’s analysis of this issue of deception in the case before us was conducted under the discussion of the depreciation factors and treated as a possible kind of depreciation: see the reasons for judgment at pages 203, 205 and 210 of the appeal book, volume 1.
[58] There are two difficulties with the judge’s reliance on the Williamson case for expungement of the appellant’s registration in the present instance.
[59] First, the defendant in that case appropriated the mark of the plaintiff Williamson and concealed the fact that he was copying the plaintiff’s mark when he applied for registration. The Exchequer Court found that the defendant was not the proprietor of the mark and not an innocent user, that the registration of the trade-mark had been improperly made and, therefore, should be expunged.
[60] In our instance, the situation is different as there is no such finding with respect to the appellant’s trade-mark and registration. Though expressing some surprise, the judge accepted the testimony of Mr. Bassal, the sole shareholder, President and Chief Executive Officer of the appellant, who had lived in Beirut, Paris and Montreal for years, and traveled in Canada, Holland, Belgium, Northern Italy and Asia (Hong Kong and Korea): see reasons for judgment at paragraphs 12 to 24. According to that testimony, Mr. Bassal never saw or heard of the respondents’ trade-marks JAGUAR for cars and luggage wares before he filed, on October 10, 1980, his application for the registration of the trade-mark JAGUAR covering tote bags and baggage: ibidem. Indeed, he claimed that it was not until 1990 that he became aware of Jaguar cars: ibidem, at paragraph 225. The judge also accepted that the respondents did not know of the existence of the appellant when the appellant launched its proceedings in 1991. On these facts alone, the Williamson case is clearly distinguishable and no authority for expungement in the present instance.
[61] In addition, section 11 of the 1906 Trade-Marks Act upon which the Williamson case is based gave the Minister the power to refuse to register any trade-mark if it appeared that the trade-mark was calculated to deceive or mislead the public: see Williamson Candy Co., supra, at paragraph 6. This is no longer the case although the Court, on an appropriate set of facts, could still find, when registration is sought, that a trade-mark is not adapted to distinguish the wares of the registrant because the trade-mark and its use are calculated to deceive and mislead the public: see E.&J. Gallo Winery v. Andres Wines Ltd., [1976] 2 F.C. 3, at pages 17 and 18 (F.C.A.). The Exchequer Court made a finding that the defendant’s registration was calculated to deceive or mislead the public and for that reason also should be expunged: Williamson Candy Co., supra, at paragraph 16.
[62] Again, in the present instance, there is no finding made by the judge that the appellant knew of the respondents’ trade-marks, that it was not the proprietor of the mark that it registered and that it knew that it was not the first user of the mark. These were all considerations that the Exchequer Court of Canada retained to ground its finding that the defendant’s registration in the Williamson case was calculated to deceive and mislead the public.
[63] With respect, in the context of his analysis of the factors of depreciation of the goodwill attached to the respondents’ trade-marks under section 22 of the Act and on the basis of the evidence before him, I do not think that the judge could conclude, as he did, that the appellant’s registration of its trade-mark was “invalid and vulnerable to expungement” because it was calculated to deceive and mislead the public: see paragraphs 285 to 297 and 331 of the reasons for judgment.
Whether the judge erred in expunging the appellant’s trade-mark on a prior use when the limitation period contained in subsection 17(2) of the Act had run
[64] Section 17 of the Act allows for the expungement of the registration of a trade-mark on the ground of prior use by a person other than the applicant for that registration. However, subsection 17(2) denies the right to an expungement when the proceedings are commenced after the expiration of five years from the date of the registration of the trade-mark. The five-year limitation period applies unless it is established that the person who adopted the registered trade-mark knew of the previous use.
[65] I reproduce section 17 in full since my summary left out some details not relevant for our purpose:
17. (1) No application for registration of a trade-mark that has been advertised in accordance with section 37 shall be refused and no registration of a trade-mark shall be expunged or amended or held invalid on the ground of any previous use or making known of a confusing trade-mark or trade-name by a person other than the applicant for that registration or his predecessor in title, except at the instance of that other person or his successor in title, and the burden lies on that other person or his successor to establish that he had not abandoned the confusing trade-mark or trade-name at the date of advertisement of the applicant’s application.
(2) In proceedings commenced after the expiration of five years from the date of registration of a trade-mark or from July 1, 1954, whichever is the later, no registration shall be expunged