WCC containers sales Ltd. v. Haul-All equipment Ltd.

WCC containers sales Ltd. v. Haul-All equipment Ltd.
Court (s) Database
Federal Court Decisions
Date
2003-08-26
Neutral citation
2003 FC 962
File numbers
T-1385-97
Notes
Digest
Decision Content
Date: 20030826
Docket: T-1385-97
Citation: 2003 FC 962
BETWEEN:
WCC CONTAINERS SALES LIMITED and
WCC REFURB LIMITED
Applicants
- and -
HAUL-ALL EQUIPMENT LTD.
Respondent
REASONS FOR ORDER
KELEN J.:
[1] This is an application pursuant to subsection 57(1) of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended, (the "Act") to expunge the respondent's trade-mark Registration No. TMA 468,995 for the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN from the Register of Trade-marks. The subject-matter of the trade-mark is the shape of the respondent's HID-A-BAG refuse container, which is an animal-proof garbage can for national parks and other areas with wildlife.
[2] The applicants are associated corporations and along with their predecessor corporations, will be jointly referred to as "WCC" throughout these reasons. WCC's five grounds for expungement are set out below.
3. The trade-mark is invalid and void ab initio because the application for the trade-mark registration contained a false statement.
4. The trade-mark is invalid because:
(1) it was not distinctive when it was filed on June 12, 1995; or,
(2) it was not distinctive when these proceedings were commenced on June 26, 1997.
5. The trade-mark is not registrable as a distinguishing guise because its features are primarily functional.
6. The trade-mark is invalid because exclusive use by the respondent of the distinguishing guise is likely to unreasonably limit the development of the art or industry for these refuse containers.
7. The respondent breached the implied promise it made under the Industrial Design Act, R.S.C. 1985, c. I-9 to dedicate the design to the public when it obtained the trade-mark after the expiry of its Canadian Industrial Design Registration.
FACTS
[3] This dispute concerns the shape of the respondent's HID-A-BAG refuse container. The container in question features, in words of its creator Mr. Dennis Neufeldt, "an upwardly inclined rectangular shape, departing from the vertical by approximately 30E to 35E, with a vertically truncated back end and a forwardly extending horizontal base." HID-A-BAG containers are available in a single or double bin version and may be equipped with "animal-proof" latches, a recycling top or a combination waste/recycling lid. The double bin version also features a latched unloading door at the rear for easy removal of garbage bags. The pictorial representation of the distinguishing guise found in the trade-mark registration is reproduced here:
[4] Mr. Neufeldt, an industrial engineer by training, created the HID-A-BAG container in 1983. He manufactured and sold it through the Haul-All Equipment Systems, a division of his company Neufeldt Industries Ltd. ("Neufeldt Industries"), between 1983 and 1985. On July 11, 1984, Canadian Industrial Design Registration No. 52994 was issued to Neufeldt Industries for the container created by Mr. Neufeldt. In 1985 Neufeldt Industries entered bankruptcy and the assets of the company, including the industrial design registration, were transferred to the respondent corporation, Haul-All Equipment Ltd. Mr. Neufeldt was appointed President of the respondent corporation and continues to hold that position today. From 1985 to the present day the respondent has manufactured and sold HID-A-BAG containers to national parks, provincial and municipal governments, and private industries. Between 1983 and 1995, the respondent and its predecessor sold nearly 5000 HID-A-BAG containers in Canada.
[5] On July 11, 1994, the Canadian Industrial Design Registration for the HID-A-BAG container expired. The application for the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN trade-mark was filed on June 12, 1995 based on use by the respondent corporation in Canada in association with "[w]aste, refuse and recycling containers" since November 1983. The application was advertised for opposition on September 4, 1996. No statements of opposition were filed and on November 29, 1996 the application was allowed. The prescribed registration fee was paid by the respondent on December 10, 1996 and the registration process continued onward in the normal course.
[6] The seeds of the dispute between these two parties were sown in the form of three requests for tenders made in 1996 and 1997. The first request was issued on June 20, 1996 by Public Works and Government Services Canada. Public Works sought 45 bear-proof, two bag refuse/recycling containers for Cape Breton Highlands National Park in Nova Scotia. Public Works' request required the containers be built in accordance with the design described in the specifications and the attached photographs. The container featured in the photographs displays the characteristics of the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN and appears to be one of the respondent's HID-A-BAG units. The successful bid came from Winlie Containers (a predecessor corporation to the applicant WCC Container Sales Limited) and a contract for the containers was entered into by Winlie Containers and Public Works on July 23, 1996. In accordance with the contract, Winlie Containers manufactured 45 refuse containers that were virtually identical in design to the respondent's HID-A-BAG container.
[7] The second request was issued on January 15, 1997 by the National Capital Commission (the "NCC"). The request was for 64 single unit and 39 double unit refuse containers that were "closable, animal-proof (primarily bears and racoons), weather proof and able to withstand vandalism" for Gatineau Park. Upon learning of the NCC's request, the respondent asked the Trade-marks Office to expedite the issuance of the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN trade-mark. The request was made in a letter dated January 17, 1997 and the trade-mark was issued later that day. In a letter dated January 20, 1997, the respondent informed the NCC that it held a distinguishing guise registration for the shape of the HID-A-BAG container and the exclusive right to sell any container of the registered shape. Even though WCC tendered a lower bid than the respondent, the contract was awarded to the respondent because it held the distinguishing guise registration.
[8] The third request for tenders concerning these refuse containers was issued on February 7, 1997 by Public Works. The request called for 25 double bins and 65 single bins for Cape Breton Highlands National Park. Public Works required the containers be built in accordance with the design depicted in photographs attached to the request as Appendix A. The photographs used by Public Works in Appendix A featured the containers built by WCC under its earlier contract with Public Works. On April 9, 1997, WCC was informed that the respondent's solicitors had threatened to sue Public Works for inducing trade-mark infringement if the contract were awarded to anyone other than the respondent. As a result, even though WCC once again tendered the lower bid, the contract was awarded to the respondent.
[9] On June 26, 1997, the applicants filed the Originating Notice of Motion for this application.
RELEVANT LEGISLATION
[10] There are a number of legislative provisions that are the relevant to this application. The respondent's trade-mark is a "distinguishing guise", which is defined in section 2 of the Act:
"distinguishing guise" means
(a) a shaping of wares or their containers, or
(b) a mode of wrapping or packaging wares
the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or
« signe distinctif » Selon le cas_:
a) façonnement de marchandises ou de leurs contenants;
b) mode d'envelopper ou empaqueter des marchandises,
performed by him from those manufactured, sold, leased, hired or performed by others;
dont la présentation est employée par une personne afin de distinguer, ou de façon à distinguer, les marchandises fabriquées, vendues, données à bail ou louées ou les services loués ou exécutés, par elle, des marchandises fabriquées, vendues, données à bail ou louées ou des services loués ou exécutés, par d'autres.
[11] This application has been brought pursuant to subsection 57(1) of the Act:
Exclusive jurisdiction of Federal Court
57. (1) The Federal Court has exclusive original jurisdiction, on the application of the Registrar or of 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 on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark.
Juridiction exclusive de la Cour fédérale
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.
[12] Section 13 of the Act contains some of the grounds for expungement alleged by WCC:
When distinguishing guises registrable
13. (1) A distinguishing guise is registrable only if
(a) 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; and
(b) the exclusive use by the applicant of the distinguishing guise in association with the wares or services with which it has been used is not likely unreasonably to limit the development of any art or industry.
Effect of registration
(2) No registration of a distinguishing guise interferes with the use of any utilitarian feature embodied in the distinguishing guise.
Signes distinctifs enregistrables
13. (1) Un signe distinctif n'est enregistrable que si, à la fois_:
a) le signe a été employé au Canada par le requérant ou son prédécesseur en titre de façon à être devenu distinctif à la date de la production d'une demande d'enregistrement le concernant;
b) l'emploi exclusif, par le requérant, de ce signe distinctif en liaison avec les marchandises ou services avec lesquels il a été employé n'a pas vraisemblablement pour effet de restreindre de façon déraisonnable le développement d'un art ou d'une industrie.
Effet de l'enregistrement
(2) Aucun enregistrement d'un signe distinctif ne gêne l'emploi de toute particularité utilitaire incorporée dans le signe distinctif.
Not to limit art or industry
(3) The registration of a distinguishing guise may be expunged by the Federal Court on the application of any interested person if the Court decides that the registration has become likely unreasonably to limit the development of any art or industry
Aucune restriction à l'art ou à l'industrie
(3) L'enregistrement d'un signe distinctif peut être radié par la Cour fédérale, sur demande de toute personne intéressée, si le tribunal décide que l'enregistrement est vraisemblablement devenu de nature à restreindre d'une façon déraisonnable le développement d'un art ou d'une industrie.
[13] Additional grounds relied upon by WCC can be found in subsection 18(1) of the Act:
When registration invalid
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.
Quand l'enregistrement est invalide
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.
[14] Also relevant to this application is paragraph 30(b) of the Act:
Contents of application
30. An applicant for the registration of a trade-mark shall file with the Registrar an application containing
(b) in the case of a trade-mark that has been used in Canada, the date from which the applicant or his named predecessors in title, if any, have so used the trade-mark in association with each of the general classes of wares or services described in the application;
Contenu d'une demande
30. Quiconque sollicite l'enregistrement d'une marque de commerce produit au bureau du registraire une demande renfermant_:
b) dans le cas d'une marque de commerce qui a été employée au Canada, la date à compter de laquelle le requérant ou ses prédécesseurs en titre désignés, le cas échéant, ont ainsi employé la marque de commerce en liaison avec chacune des catégories générales de marchandises ou services décrites dans la demande;
ANALYSIS
[15] In expungement proceedings before the Federal Court, there is an onus upon the party attacking the registration to show that it should be expunged. There is a corresponding presumption that the mark in question is valid, and if doubt exists then that doubt must be resolved in favour of the validity of the trade mark. See Mr P's Mastertune Ignition Services Ltd. v. Tune Masters (1984), 82 C.P.R. (2d) 128 at p. 134 (F.C.T.D.); Unitel Communications Inc. v. Bell Canada (1995), 61 C.P.R. (3d) 12 at p. 27 (F.C.T.D.); General Motors of Canada v. Décarie Motors Inc. (2000), 9 C.P.R. (4th) 368 at para. 31 (F.C.A.); and Consorzio del Prosciutto di Parma v. Maple Leaf Meats Inc., [2001] 2 F.C. 536 at paras. 25 and 35 (T.D.), aff'd (2002), 18 C.P.R. (4th) 414 (F.C.A.). The applicants have raised five grounds for expungement and I will deal each of the grounds for the benefit of the parties and, in the event of an appeal, the Court of Appeal.
1. False Application for Registration
[16] The application for registration filed on June 12, 1995 by Haul-All Equipment Ltd. claimed the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN had been used in Canada by Haul-All Equipment Ltd. since at least as early as November 1983. WCC argues this statement is obviously false as Haul-All Equipment Ltd. was not incorporated until January 22, 1985, making it impossible for that corporation to have used the trade-mark since 1983. As a result, the respondent has not complied with the obligation imposed upon it by paragraph 30(b) of the Act:
Contents of application
30. An applicant for the registration of a trade-mark shall file with the Registrar an application containing
(b) in the case of a trade-mark that has been used in Canada, the date from which the applicant or his named predecessors in title, if any, have so used the trade-mark in association with each of the general classes of wares or services described in the application;
Contenu d'une demande
30. Quiconque sollicite l'enregistrement d'une marque de commerce produit au bureau du registraire une demande renfermant_:
b) dans le cas d'une marque de commerce qui a été employée au Canada, la date à compter de laquelle le requérant ou ses prédécesseurs en titre désignés, le cas échéant, ont ainsi employé la marque de commerce en liaison avec chacune des catégories générales de marchandises ou services décrites dans la demande;
[17] It is WCC's position that this false statement renders the registration invalid and void ab initio. In support of its argument WCC cites Rainsoft Water Conditioning Co. v. Rainsoft (Regina) Ltd. (1987), 14 C.P.R. (3d) 267 (F.C.T.D.), where Muldoon J. stated at page 269:
The respondent, Rainsoft (Regina) Ltd., was incorporated in Saskatchewan on January 16, 1963. William B. Atnikov was its president in 1979. Since the respondent's application for registration of the impugned mark states that it was used by the applicant (that is Rainsoft (Regina) Ltd.) since at least as early as 1960 and since the respondent was incorporated only in 1963, the respondent's assertion of use appears to be false.
[18] Further, WCC argues that neither fraud nor intent to deceive is a necessary element where an application for registration and a declaration of use in Canada contains a materially false statement. It cites the following cases as support for this proposition: Melnor Manufacturing Ltd. v. Lido Industrial Products Ltd. (1969), 56 C.P.R. 212 at p. 225 (Ex. Ct.); Marchands Ro-Na Inc. v. Tefal S.A. (1981), 55 C.P.R. (2d) 27 at p. 30 (F.C.T.D.); and Unitel Communications, supra at p. 54.
[19] A registration based on an application that contains a false statement of use has traditionally been found to be invalid and void ab initio if there has been a fraudulent misrepresentation. Generally speaking, innocent misstatements have not been enough to invalidate a registration. The authority for this proposition is Dr. Harold Fox's treatise Canadian Law of Trade Marks and Unfair
Competition, 3rd ed. (Toronto: Carswell, 1972) at pp. 252-3, where he cited Bonus Foods Ltd. v. Essex Packers Ltd. (1964), 43 C.P.R. 165 at p. 180 (Ex. Ct.), and W.J. Hughes & Sons "Cornflower" Ltd. v. Morawiec (1970), 62 C.P.R. 21 (Ex. Ct.) as establishing the following proposition:
It is provided, in s. 18(1), that 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 s. 17, it is invalid if the applicant for registration was not the person entitled to secure the registration. There is, however, no provision in the Act under which mis-statements in an application for registration or extension of wares become grounds for invalidating the registration unless the mis-statements had the effect of making the trade mark not registrable under s. 12 of the Act or unless there was a fraudulent misrepresentation. [Emphasis added.]
[20] Thurlow A.C.J. relied upon Dr. Fox's statement in Biba Boutique v. Dalmys (Canada) Ltd. (1976), 25 C.P.R. (2d) 278 (F.C.T.D.) at p. 283:
The failure of an applicant for registration to comply with s. 29 [now section 30], as by stating inaccurately the date from which the trade mark has been used by him, may afford ground for opposition under s. 37(2) if raised prior to the registration. But under s. 18(1) the failure of an applicant to comply with s. 29 is not a ground for invalidating a registration. Once the registration has been made, the question, in my opinion, is simply one of whether on the facts the registrant is entitled to maintain it.
[21] As mentioned above, WCC argues that neither fraud nor an intent to deceive is a necessary element where an application for registration in Canada contains a materially false statement of use.
WCC claims Gibson J. in Unitel Communications, supra, rejected the approach advocated by Dr. Fox and thereby overruled Biba Boutique. I do not accept WCC's interpretation of Gibson J.'s decision. The year after Gibson J.'s decision, Nadon J. (as he then was) relied upon Biba Boutique in National Car Rental System, Inc. v. Megill-Stephenson Co. (1996), 70 C.P.R. (3d) 295 at p. 297 (F.C.T.D.) to support his conclusion "that the plaintiff may not have complied with s. 30 is not ground for invalidating its registrations." And five years after Gibson J.'s decision in Unitel Communications, Desjardins J.A. cited the passage from Dr. Fox's book with approval in General Motors of Canada v. Décarie Motors Inc. (2000), [2001] 1 F.C. 665 (C.A.). Accordingly, I consider both Biba Boutique and Dr. Fox's statement to still be good law.
[22] A more accurate interpretation of Unitel Communications is that Gibson J. distinguished the case from the line of reasoning that originated with Cattanach J.'s decision in Bonus Foods, supra and continued with Thurlow A.C.J.'s decision in Biba Boutique. At page 53, Gibson J. stated:
Counsel argued that the judgment in [Bonus Foods] was distinguishable because the statement there alleged to be a misrepresentation did not go to a fundamental issue in the registration of the trade mark.
Gibson J. came to the following conclusion at page 54:
I conclude that neither fraud nor intent to deceive is a necessary element where an application for registration of a trade mark and a declaration of use in Canada both contain material false statements. The statement of intent to use contained in the applications for registration of the trade marks here at issue and the declarations of use were simply false, whatever the intent and understanding of the applicant for registration might have been. Further, the statement of intent in the application and the declaration of use were both fundamental to the registration of the trade marks. [Emphasis added.]
[23] When these statements are put side by side it is apparent that Gibson J. was not overruling Bonus Foods or Biba Boutique, but limiting their applicability in cases where the application contains "material false statements" of use that are "fundamental to the registration" of the mark. Gibson J.'s conclusion is also consistent with the paragraph from Dr. Fox set out above. In addition to fraudulent misrepresentation, Dr. Fox stated that a registration could be invalidated if "the mis-statements had the effect of making the trade mark not registrable under s. 12 of the Act." Gibson J. in effect extended this reasoning beyond section 12 to include other circumstances where a registration could not have been secured without a misstatement.
[24] The other two cases cited by WCC do not provide the needed basis for its argument either. Melnor Manufacturing, supra, dealt with the Industrial Design Act and Union Label Act, R.S.C. 1952, c. 150 and is not relevant to this discussion. While the applicant argues that Marchands Ro-Na, supra is a case of innocent misstatement, I would interpret it as a case where an intent to deceive was present. The relevant facts and analysis of Addy J. in Marchands Ro-Na can be found on pages 29-30:
The first mark was applied for by T-Fal Corporation of New York in 1961 on the basis of a proposed use of the mark in Canada. As previously stated, since 1958 the wares duly marked T-Fal had, at all relevant times, been shipped by the French manufacturer directly to Canada and were picked up there by the Canadian distributors. When requested to furnish proof of actual use following application in 1963 on the basis of proposed use, a rather craftily worded and ambiguous affidavit was furnished by the president of T-Fal Corporation of New York. The relevant paragraph reads as follows: "... that use of the trade mark identified in the above trade mark application has been commenced in Canada in respect of all of the wares identified in the said application". Although not untruthful, the statement does not reveal that in fact and to the full knowledge of the deponent, the mark had been used continuously in Canada for three years previous to the application submitted on the basis of proposed future use, nor does the affidavit reveal that it was not T-Fal Corporation of New York but Tefal S.A. of France which had been using it and was continuing to use it. It is now clear from the evidence that the U.S. distributor never at any time used nor intended to use the mark in Canada and it must, therefore, be struck from the register.
The respondent argued that the first mark should be maintained because since then, in December, 1968, the mark had been absolutely assigned to the French company, which in fact had been using it. The subsequent assignment cannot cure the defect since the assignor had nothing to assign. T-Fal Corporation of New York was not the owner of a valid mark and had no title whatsoever to the T-FAL mark in Canada. The registration was void ab initio: it was obtained on misleading evidence and the true facts establish a complete absence of right in the assignor to any mark: nemo dat quod non habet. [Emphasis added.]
[25] Therefore, the jurisprudence has established two situations under which a registration based on an application containing a false statement of use will be held to be invalid and void ab initio. The first situation is the one discussed in Bonus Foods and Biba Boutique: the inclusion of a fraudulent misrepresentation in the application. The second situation is based upon the reasoning of Gibson J. in Unitel Communications: the inclusion of material false statements of use that are fundamental to the registration. In the second circumstance, neither fraud nor an intent to deceive is a necessary element.
[26] It is apparent that the error made by the respondent was an innocent mistake and not a wilful misrepresentation. Further, the error contained in the respondent's application does not fall within the category identified by Gibson J. in Unitel Communications. That it was Haul-All Equipment Systems and not Haul-All Equipment Ltd. using the trade-mark between 1983 and 1985 is not fundamental to the registration of the trade-mark. Unlike Standard Brands Ltd. v. Staley (1946), 6 C.P.R. 27 (Ex. Ct.), which was cited by Gibson J. at pages 53-54, this is not a situation where the respondent could only obtain the registration by making the false statement. The application was made in 1995 and the fact that it was supported by only 10 years as opposed to12 years of exclusive use by the respondent would not have prevented the trade-mark's registration.
[27] The case at bar can also be distinguished from Rainsoft, supra on the basis of use. The primary issue in Rainsoft was whether the respondent had used the trade-mark as it claimed. The respondent did not appear at the hearing and there was no evidence that it had used the trade-mark since its registration. Muldoon J. relied upon the respondent's misstatement to support his finding that the trade-mark had not been used by the respondent or a predecessor in title as claimed. This can be seen in the following statement he made at page 270:
As is above noted, the respondent could not possibly have used the trade mark RAINSOFT (Design) since 1960 as it claimed in its application for the mark, in light of its date of incorporation on January 16, 1963. Indeed, the respondent has not filed in these proceedings any evidence whatever of any use by it (or its apparently non-existent predecessor in title) of the impugned trade mark.
[28] Muldoon J. appears to have decided the case based on abandonment and it is not clear whether he would have expunged the mark due to the respondent's misstatement if evidence of use by the respondent or its predecessor in title had been provided. Unlike Rainsoft, it is accepted in the case at bar that the distinguishing guise was used between 1983 and 1985 by the respondent's predecessor. For that reason, the applicability of Rainsoft to this case is limited and I prefer to follow the line of reasoning established in the cases cited above. As the respondent's error was an innocent misstatement that was not fundamental to the registration, it is not enough to render the registration invalid or void ab initio.
2. Distinctiveness
[29] WCC argues that the trade-mark is not registrable under paragraph13(1)(a) because it was not distinctive at the time of filing (June 12, 1995). Further, it contends that the trade-mark is invalid under paragraph 18(1)(b) because it was not distinctive at the time these proceedings were commenced (June 26, 1997). Those two paragraphs are reproduced here:
When distinguishing guises registrable
13. (1) A distinguishing guise is registrable only if
(a) 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;
[...]
When registration invalid
18. (1) The registration of a trade-mark is invalid if
(b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced, or
Signes distinctifs enregistrables
13. (1) Un signe distinctif n'est enregistrable que si, à la fois_:
a) le signe a été employé au Canada par le requérant ou son prédécesseur en titre de façon à être devenu distinctif à la date de la production d'une demande d'enregistrement le concernant;
[...]
Quand l'enregistrement est invalide
18. (1) L'enregistrement d'une marque de commerce est invalide dans les cas suivants_:
b) la marque de commerce n'est pas distinctive à l'époque où sont entamées les procédures contestant la validité de l'enregistrement;
[30] "Distinctive" is defined in section 2 of the Act:
"distinctive", in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them;
« distinctive » Relativement à une marque de commerce, celle qui distingue véritablement les marchandises ou services en liaison avec lesquels elle est employée par son propriétaire, des marchandises ou services d'autres propriétaires, ou qui est adaptée à les distinguer ainsi.
[31] WCC claims that the trade-mark was not distinctive as of the relevant dates because it was not giving a clear message to the public regarding the use of the mark. It also argues that use by the respondent is not consistent with the registered mark because a number of additional features are found on the respondent's HID-A-BAG containers. These features include the use of wood slates to cover the sides of containers, the addition of a front platform, two doors with handles on the top of the sloped surface, and the use of an unloading door with no lip encompassing the sides of the container.
[32] The respondent replies with a three-part argument. First, the respondent submits that whether the trade-mark was distinctive at the time of filing was an issue before the Trade-marks Office and is not a ground for expungement. Second, even if distinctiveness as of the date of filing is a relevant consideration, there is ample evidence that the guise was used by the respondent and had become distinctive by the date of filing. Third, distinctiveness as of the date of commencement of these proceedings is substantially unchallenged.
[33] This issue can be resolved by dealing with each of the respondent's three points. I disagree with the respondent that distinctiveness as of the filing date is not a ground for expungement. Subsection 18(1)(a) states that a trade-mark is invalid if it was not registrable, and subsection 13(1)(a) states that a distinguishing guise is only registrable if it became distinctive through use as of the date of filing. Further, the requirement that distinctiveness be acquired through use in
subsection 13(1)(a) is not present in subsection 18(1)(b). A trade-mark can be valid under subsection 18(1)(b) even in the absence of use if it has been adapted to distinguish the holder's wares from those of others: Boston Pizza International Inc. v. Boston Chicken Inc., 2003 FCA 120. If distinguishing guises were only required to meet that threshold, the use requirement in subsection 13(1)(a) would effectively be cut out of expungement proceedings.
[34] That being said, there is ample evidence of use of the trade-mark by the respondent prior to June 12, 1995. The respondent has submitted an affidavit from Mr. Neufeldt dated June 6, 1995 in which he states that nearly 5,000 HID-A-BAG units were sold in Canada between 1983 and 1995. A chart attached as an exhibit to that affidavit indicates that between 1984 and 1994, HID-A-BAG units were sold in every region of Canada. The HID-A-BAG container has also been featured in advertising and promotional activities by the respondent. Attached as exhibits to Mr. Neufeldt's affidavit of January 25, 2000 are a number of advertising brochures from the 1980s that feature HID-A-BAG containers.
[35] The respondent has also provided the Court with evidence that the shape of the HID-A-BAG container distinguishes it from the wares of the respondent's competitors. It is common ground that with the exception of the 45 containers produced by WCC, the respondent has been the only manufacturer and retailer of refuse containers of this shape in Canada. Mr. Neufeldt deposed in his affidavit dated January 25, 2000 that the HID-A-BAG's shape was "created and adopted by Haul-All as having an eye-appealing distinctiveness unique to it." Mr. Neufeldt's evidence has been supported by an affidavit dated January 27, 2000 from Mr. Paul Arato, an industrial designer who has been involved in the design of a number of consumer and commercial products. At paragraph 4 of his affidavit he stated that "the Haul-All sloped bin container exemplifies a startling, unusual design which, exclusive to Haul-All, is fully capable of distinguishing the Haul-All company and its goods." And at paragraph 10 of his affidavit, Mr. Arato concludes that the sloped bin's "apparent refusal to topple over draws the eye and is readily remembered."
[36] I disagree with the WCC's argument that the addition of features not detailed in the trade-mark registration to the HID-A-BAG containers detract from the mark's distinctiveness. When dealing with the question of distinctiveness, the test is the message given to the public: White Consolidated Industries Inc. v. Beam of Canada Inc. (1991), 39 C.P.R. (3d) 94 at p. 111 (F.C.T.D.). The addition of ornamental or functional features such as those identified by WCC should not negate the distinctiveness of the mark as long as the message given to the public remains clear. The features of the distinguishing guise highlighted in the trade-mark registration at issue remained easily identifiable in the respondent's HID-A-BAG containers even with the addition of other features.
[37] The respondent's final point was that the distinctiveness of the mark as of June 26, 1997 has not been substantively challenged. The respondent is correct in this assertion. No evidence has been led showing any changes in the relevant market between 1995 and 1997. To the contrary, the respondent's successful acquisition of the tender requests from the NCC and Public Works leads me to believe that between June 12, 1995 and June 26, 1997 the respondent increased the overall sales of its wares.
[38] All of the evidence outlined above leads to the conclusion that, as Mr. Neufeldt stated at paragraph 14 of his affidavit dated January 25, 2000, the HID-A-BAG container has become a "vital identifier of the Haul-All company." Accordingly, the respondent's trade-mark cannot be expunged from the Register due to lack of distinctiveness.
3. Functionality of the Guise's Features
(a) The Law
[39] While a distinguishing guise may possess a functional element or component, a mark which goes beyond distinguishing the wares of its owner to the functional structure of the wares
transgresses the legitimate boundaries of a trade-mark: Remington Rand Corp. v. Phillips Electronics N.V. (1995), 64 C.P.R. (3d) 467 at p. 478 (F.C.A.). To determine whether a mark transgresses that boundary, a court must decide whether the design is primarily functional, or whether the design's functionality is secondary to the role it plays in distinguishing the holder's wares from those of its competitors, per MacGuigan J.A. in Remington Rand at page 475:
If the functionality goes either to the trademark itself (Imperial Tobacco, and Parke, Davis) or to the wares (Elgin Handles), then it is essentially or primarily inconsistent with registration. However, if it is merely secondary or peripheral, like a telephone number with no essential connection with the wares, then it does not act as a bar to registration.
and at page 476:
If a mark is primarily functional as "part of the ware," the effect would be to grant applicants for registration "a monopoly on functional elements or characteristics of their wares". This would be effectively to create a patent or industrial design rather than a trade mark: "the applicants would, in effect, have obtained patents under the guise of trade marks". In my view, that would be precisely the consequence of registration of the design trade mark in the case at bar. I cannot therefore agree with the trial judge that the design marks "contain no functional elements or components". Rather, they have an intrinsic reference to the principal functional feature of the Philips shaver, its cutting heads, which they depict.
[40] In Remington Rand, the Court of Appeal disagreed with the trial judge who held the design mark contained no functional elements. The Court of Appeal held that if the design trademark is "part of the ware", the effect is to grant a monopoly such as a patent in the guise of a trademark for the design.
[41] There is also a statutory restriction on the incorporation of functional features into a distinguishing guise. It is found in subsection 13(2) of the Act:
Effect of registration
(2) No registration of a distinguishing guise interferes with the use of any utilitarian feature embodied in the distinguishing guise.
Effet de l'enregistrement
(2) Aucun enregistrement d'un signe distinctif ne gêne l'emploi de toute particularité utilitaire incorporée dans le signe distinctif.
(b) The Evidence
Evidence of Mr. Willam G. Lake
[42] WCC alleges that each feature of the SLOPE BIN CONTAINER DISTINGUISHING GUISE DESIGN trade-mark is functional in nature. It relies upon the evidence contained in paragraph 14 of the April 30, 1997 affidavit of Mr. William G. Lake, president of both applicants:
Each element of the alleged distinguishing guise trademark registration number TMA 468,995 is functional. The sloped roof prevents water from pooling on the roof of the container and prevents animals, particularly bears and raccoons from resting on top of the containers. It also provides a low lip over which users must raise the garbage to place it in the container. The container back is also sloped from the vertical, providing a gravity-assisted closure mechanism which requires little maintenance.
This evidence was not cross-examined or contradicted. The Court will draw the natural inference that the respondent did not cross-examine because it did not want the deponent to expand upon, and buttress, facts unfavourable to the respondent regarding the functionality of the sloped design. As per Pigeon J. in Levesque v. Comeau (1970), 16 D.L.R. (3d) 425 at p. 432 (S.C.C.), an analogous case where a party did not call an obviously relevant witness:
In my opinion, the rule to be applied in such circumstances is that a Court must presume that such evidence would adversely affect her case.
Brochure Evidence
[43] WCC also relies upon the evidence contained in the respondent's brochures which emphasize the functionality of the respondent's HID-A-BAG design which includes:
· Sturdy construction designed to stop animal access
...
· Easy to use, self-closing, wind-proof loading doors
· Convenient removal of bagged garbage.
[44] From the brochures and photographs in the brochures, it is evident to the Court that the sloped design facilitates the functionality of the refuse container. The sloped design impedes small animal access, and facilitates removal of the bagged garbage.
Tender Call Evidence
[45] The applicants also rely upon the evidence in the "Request for Proposal" from Public Works dated February 7, 1997 "for the supply of bear-proof refuse/recycling containers". The mandatory specifications identified the design features of the HID-A-BAG containers a