Loblaws Inc. v. Columbia Insurance Company

Loblaws Inc. v. Columbia Insurance Company
Court (s) Database
Federal Court Decisions
Date
2019-07-22
Neutral citation
2019 FC 961
File numbers
T-548-18
Decision Content
Date: 20190722
Docket: T-548-18
Citation: 2019 FC 961
Ottawa, Ontario, July 22, 2019
PRESENT: The Honourable Mr. Justice Southcott
BETWEEN:
LOBLAWS INC.
Plaintiff
and
COLUMBIA INSURANCE COMPANY, THE PAMPERED CHEF, LTD., AND PAMPERED CHEF – CANADA CORP.
Defendants
PUBLIC JUDGMENT AND REASONS
I. Overview
[1] This decision relates to an action by the Plaintiff, Loblaws Inc. [Loblaw], against the Defendants, Columbia Insurance Company [Columbia], The Pampered Chef, Ltd., and Pampered Chef – Canada Corp., asserting various causes of action under the Trade-marks Act, RSC 1985, c T-13 [the Act] and claiming remedies related thereto. The Defendants have counterclaimed, seeking to have certain trademarks that are the subject of Loblaw’s action declared invalid and struck from the Register, on the basis that they are not distinctive of Loblaw. This decision follows a trial of the liability issues in this action held in Toronto.
[2] Some of the evidence adduced at trial is subject to a Protective and Confidentiality Order dated April 30, 2019, in order to protect commercially sensitive confidential information of the parties. A draft confidential decision was therefore sent to the parties on June 28, 2019 to allow them to propose any redactions required for the issuance of the public version of the decision. The parties proposed redactions in correspondence from the Plaintiff’s counsel dated July 11, 2019, written with the consent of counsel for the Defendants. I am satisfied that the proposed redactions appropriately balance the interests of protecting confidential information and the public interest in open and accessible court proceedings. As such, two versions of this decision, one public and the other confidential, will be issued simultaneously.
[3] For the reasons explained in greater detail below, Loblaw’s claims are dismissed, and the Defendants’ counterclaim is dismissed.
II. Background
[4] Loblaw is a corporation incorporated under the laws of Ontario, with a principal place of business in Brampton, Ontario. It is a subsidiary of Loblaw Companies Limited [LCL], which it describes as a retailer of food, pharmacy and other products and services meeting household needs. It operates a large number of retail banners, such as Loblaw’s, Shoppers Drug Mart, Provigo, Atlantic Superstore, and several others. LCL developed the companion brands “President’s Choice” and “PC” under which many of its products and services are marketed. Loblaw is the owner of a family of registered and unregistered trademarks related to these brands which are the subject of this action, the full complement of which is set out in Schedule “A” to these Reasons (taken from Loblaw’s Amended Statement of Claim) and will be referred to as the “PC Marks.” These marks broadly consist of the following;
the word mark PC, registered in relation to (1) food and kitchenware products, and (2) the operation of a reward incentive program for points which can be redeemed for various products [the PC Word Mark];
the
design mark, registered in relation to (1) food and kitchenware products and (2) the following services: cooking school services, application for digital electronic devices and mobile phones for viewing recipes and nutritional information, and the operation of a reward incentive program for points [the PC Script Mark]; and
the
common law mark in relation to various goods and services including housewares [the PC Circle Mark].
[5] While not directly the subject of this litigation, Loblaw also employs the following mark in connection with its “President’s Choice” brand [the President’s Choice Mark]:
[6] Columbia is a corporation subsisting under the laws of Nebraska, with a principal place of business in Omaha, Nebraska. It is the owner of a number of trademarks registered under the Act. The Pampered Chef, Ltd. has a place of business in Addison, Illinois and is the parent corporation of Pampered Chef – Canada Corp., which has its principal place of business in Markham, Ontario. The Pampered Chef, Ltd. and Pampered Chef – Canada Corp. Pampered Chef are retailers of housewares including kitchen tools, employing principally a direct marketing or multilevel marketing business model, through in-home cooking and catalogue parties and virtual or online versions of the same. They license from Columbia the trademarks (described below) that are at issue in this action. In these Reasons, consistent with usage at trial, the Defendants will be referred to collectively as “Pampered Chef.”
[7] Pampered Chef has used the trademark “Pampered Chef” in Canada for a number of years in association with the sale of housewares. In 2015 and/or 2016, Columbia filed trademark applications in Canada for the following trademarks, all of which employ a branding device that the Defendants call the “Happy Spoon”:
[the Happy Spoon Mark];
[the Long Form Mark];
; and
[8] The latter two marks, both of which employ the Happy Spoon device between the letters “P” and “C”, have been referred to as the “Short Form Marks”. Columbia’s applications for the Happy Spoon Mark and the Long Form Mark were granted by the Canadian Trademarks Office, but Loblaw is opposing the applications for the Short Form Marks.
[9] Pampered Chef has begun to sell, distribute and advertise housewares in Canada employing, inter alia, the Short Form Marks. Pampered Chef also operates a reward incentive program identified as “PC Dollars”. These activities give rise to this action, in which Loblaw asserts that the Short Form Marks are identical or confusingly similar with the PC Marks and that PC Dollars is identical to the PC Word Mark. The causes of action currently being asserted by Loblaw are that Pampered Chef’s activities:
constitute infringement of Loblaw’s exclusive rights to use the PC Marks throughout Canada, contrary to s 19 and 20 of the Act;
have directed public attention to Pampered Chef’s goods, services and business so as to cause or be likely to cause confusion in Canada between their goods, services and business and those of Loblaw, contrary to s 7(b) of the Act; and
have the likely effect of depreciating the value of the goodwill associated with the PC Marks, contrary to s 22 of the Act.
[10] Loblaw claims remedies including: (a) damages or, in the alternative, an accounting of profits; (b) punitive, aggravated and exemplary damages; and (c) various categories of injunctive relief. However, the liability and quantification issues in this action have been bifurcated, such that this Judgment and Reasons relate only to liability issues, including Loblaw’s entitlement, if any, to declaratory relief, injunctive relief and delivery up. While it was originally intended that the liability phase of this action would also determine whether Pampered Chef’s conduct is such as would support an award of aggravated, punitive and exemplary damages, Loblaw advised at trial that it was withdrawing its claim for such damages.
[11] Pampered Chef takes the position that none of its marks is identical to those of Loblaw and that there is no likelihood of confusion between the Short Form Marks and the PC Marks. It therefore denies liability to Loblaw under any of the causes of action asserted. Pampered Chef also counterclaims seeking a declaration that the PC Word Mark is invalid and should be struck from the Register, on the basis that it is not distinctive of Loblaw contrary to s 2 and 18(1)(b) of the Act, and an order expunging the PC Word Mark. While the PC Marks include a word mark “P.C.” (i.e. with periods inserted after the “P” and the “C”), Loblaw advised at trial that it is not asserting that mark in support of its claims, and Pampered Chef confirmed that it was therefore unnecessary for the Court to address an invalidity allegation it had advanced in connection with that mark. The invalidity allegation in relation to the PC Word Mark falls within the scope of the liability phase of this action and therefore this Judgment and Reasons.
III. Issues
[12] The list of issues identified by Loblaw, with which Pampered Chef does not disagree and which, subject to some slight re-ordering and re-articulation, I have adopted for purposes of this decision, is as follows:
Is the PC Word Mark distinctive and thus valid?
If so, has Pampered Chef infringed Loblaw’s rights under section 19 of the Act?
Has Pampered Chef infringed Loblaw’s rights under section 20 of the Act?
Has Pampered Chef infringed Loblaw’s rights under section 22 of the Act?
Has Pampered Chef violated section 7(b) of the Act?
If Loblaw succeeds in establishing any of the causes of action asserted, what is the appropriate relief?
IV. Evidence
[13] The parties approached the introduction of evidence in this matter, and indeed the trial generally, very cooperatively. Much of the documentary evidence received by the Court was introduced by agreement. This was supplemented by evidence introduced through cross-examination of witnesses, largely without objection. Each of the parties also filed a substantial volume of read-ins from discovery examinations, and many facts were agreed through Agreed Statements of Facts.
[14] The parties agreed to certain factual witnesses providing their evidence in chief through affidavits, subject to cross-examination at trial. Each of the parties called its two principal witnesses of fact at trial, to provide evidence surrounding certain aspects of its business operations. By way of brief summary of Loblaw’s three factual witnesses and the areas in which they testified:
Ms. Cheryl Grishkewich, Loblaw’s Vice President of control brand marketing, testified as to the history surrounding development of the “President’s Choice” and “PC” brand, the use and advertising of the related marks, the nature and range of goods and services in connection with which the marks are used and advertised, the channels of trade in which such goods and services are available , and consumer awareness and perceptions of the brand and marks;
Mr. Graham Rooza, a Senior Director, Home & Entertainment Department, at Loblaw Brands Limited (a subsidiary of Loblaw), provided testimony surrounding Loblaw’s kitchenware products that are marketed under the “PC” and/or “President’s Choice” brand; and
Mr. Cliff Blizzard, the Wholesale Club Category Director at the National Wholesale Division of Loblaw, provided evidence as to the nature of Loblaw’s Wholesale Club business, including the condiment category in that business, and the sale of products by Ventura Foods [Ventura]. (The Ventura products are relevant to this litigation because they bear third-party marks that Pampered Chef argues affect the distinctiveness of the PC Marks). Mr. Blizzard’s direct evidence was provided by affidavit.
[15] Pampered Chef’s factual witnesses were as follows:
Ms. Sandra Kabat, Director of Canada with Pampered Chef - Canada, Corp., testified as to Pampered Chef’s business, sales, channels of trade, and the role of the Independent Consultants [ICs] who represent its sales force under its direct marketing/multilevel marketing business model;
Ms. Libby Hoppe, Director of Digital Marketing and Content Strategy with The Pampered Chef, Ltd., provided evidence surrounding Pampered Chef’s digital marketing, including the websites of Pampered Chef and its ICs and their use of social media;
Mr. Michael Stephan, a licensed investigator employed by Xpera Risk Mitigation & Investigation, provided evidence as to the results of various investigations performed at the instruction of the Defendants’ counsel. These investigations included visits at Loblaw’s Wholesale Club and the Wholesale Business Centre operated by Costco, as well as the purchase of Ventura products at both locations, visits to the websites maintained by both wholesale operations, Ventura, and other businesses, visits to certain of Loblaw’s retail locations and the purchase of kitchen products, and visits to certain of Loblaw’s websites. Mr. Stephan also assembled articles related to Loblaw and its brands, information available online surrounding recalls and complaints related to Loblaw’s products, information available online related to third parties that employ in some manner the initials “PC”, and information related to online activities of Pampered Chef and certain of its ICs. Mr. Stephan provided his direct evidence by affidavit; and
Mr. Derek MacIsaac, a licensed private investigator employed by Digital Evidence International, Inc. as a cybercrime investigations specialist, provided evidence surrounding the results of searches he was asked to perform by the Defendants’ counsel, for certain keywords in posts on target Twitter accounts belonging to the parties. Mr. MacIsaac provided his direct evidence by affidavit.
[16] These witnesses and their evidence will be canvassed later in these Reasons as necessary to address the various issues in this matter. By way of preliminary comment, neither of the parties took any particular issue with the credibility of the other’s factual witnesses. At least in relation to the witnesses of fact, this is not a case that turns on credibility determinations.
[17] Loblaw called the following two expert witnesses:
Dr. Chuck Chakrapani - Dr. Chakrapani is the President of Leger Marketing, Distinguished Visiting Professor at the Ted Rogers School of Management at Ryerson University, and Chief Knowledge Officer of the Blackstone Group in Chicago. He was qualified by agreement of the parties as an expert in marketing research and statistics, including surveys. Dr. Chakrapani was retained by Loblaw to assess whether and to what extent consumers would misidentify one of the Short Form Marks used by Pampered Chef as a mark used by Loblaw. He designed and conducted a survey to perform this assessment, the results of which are set out in his expert report; and
Prof. Kenneth Wong – Prof. Wong is a faculty member and the Distinguished Professor of Marketing at the Smith School of Business at Queen’s University, where he teaches marketing courses at the B. Comm. and MBA levels. He was qualified by agreement of the parties as an expert in marketing. Prof. Wong’s expert report addresses the following mandates that he was assigned by Loblaw’s counsel: (i) to provide an explanation of the importance of a brand to business and the effect of a brand on consumer behaviour; (ii) to provide an opinion on whether there is goodwill attached to Loblaw’s “PC” brand and, if so, the significance of that goodwill; and (iii) to advise whether he was able to give an opinion on the impact that Pampered Chef’s use of the Short Form Marks will have on the goodwill attached to Loblaw’s “PC” brand and, if so, to provide that opinion.
[18] Pampered Chef also called two expert witnesses, intended to respond to the opinions of Loblaw’s experts:
Dr. Derek Hassay – Dr. Hassay is the RBC Teaching Professor of Entrepreneurial Thinking at the Haskayne School of Business in Calgary, Alberta. He was qualified by agreement of the parties as an expert in marketing, specializing in the field of direct selling and multilevel marketing. Dr. Hassay’s expert report: (i) provided background information on the direct sales channel, including how it differs from mass merchandising and any differences in the use of websites; (ii) opined on whether Dr. Chakrapani surveyed the relevant population and, if not, whether there were any material differences between the survey participants and the relevant population including whether the relevant population would respond differently to Dr. Chakrapani’s survey stimuli; and (iii) commented on conclusions in Prof. Wong’s report; and
Dr. Ruth M. Corbin – Dr. Corbin is the Chair and former Managing Partner of CorbinPartners Inc., a marketing science company that conducts survey research, including in relation to trademarks, and other types of analysis for business decisions and dispute resolution. Dr. Corbin has also been an Adjunct Professor at the Osgoode Hall Law School of York University, where she has taught courses in Trademarks, Cognitive Science Evidence, and Judgment and Decision-making. She was qualified by agreement of the parties as an expert in marketing research and statistics, including surveys. Her expert report addresses the mandates she was assigned by the Defendants’ counsel, to assess whether the survey on which Dr. Chakrapani bases the opinion in his report is reliable and valid for predicting whether use of Pampered Chef’s Short Form Marks are confusing with one or more of Loblaw’s PC Marks.
[19] In advance of trial, each of the parties raised with each other and with the Court certain objections related to the other’s expert reports. While such objections relate not only to the weight to be afforded such reports but, in some cases, to the admissibility of the reports or portions thereof, the parties agreed that such objections would not be advanced until closing argument and would not be ruled upon until following trial. As such, each of the reports was marked as an exhibit at trial and its author subjected to cross-examination. To the extent necessary to address the issues in this litigation, I will consider such objections and the expert evidence generally later in these Reasons.
V. Analysis
A. Is the PC Word Mark distinctive and thus valid?
[20] In closing argument at trial, Pampered Chef’s counsel confirmed that, if Loblaw does not succeed in the causes of action it is asserting, the Court need not address Pampered Chef’s challenge to the validity of the PC Word Mark. As explained in detail below, my conclusion is that Loblaw has not met the burden upon it to establish those causes of action. I will nevertheless briefly address Pampered Chef’s invalidity allegation.
[21] Pampered Chef relies on s 2 and s 18(1) of the Act for its invalidity allegation, asserting that the PC Word Mark was not distinctive of Loblaw at the time the proceedings bringing the validity of the registrations of that mark into question were commenced. Loblaw submits that the relevant date for assessing distinctiveness for this purpose is when its action was commenced in March 2018. Pampered Chef has taken no issue with this point and, in my view, there would be no material difference in performing the assessment at that date or performing it when the counterclaim was commenced in June 2018.
[22] Under s 19 of the Act, there is a presumption that Loblaw’s registrations in relation to the PC Word Mark are valid, and any doubts must be resolved in favour of the validity of the registrations (see Bedessee Imports Ltd v Glaxosmithkline Consumer Healthcare (UK) IP Limited, 2019 FC 206 at para 13). Pampered Chef therefore bears the burden of establishing based on the evidence that the PC Word Mark lacks distinctiveness at the relevant time.
[23] Loblaw acknowledges that the PC Word Mark is not inherently distinctive. However, as found later in these Reasons in considering the claim of infringement under s 20 of the Act, the mark has acquired substantial distinctiveness in relation to food and kitchenware products and a reward incentive program. It is not necessary to repeat the evidence or analysis giving rise to that finding.
[24] Pampered Chef’s allegation that the PC Word Mark is not distinctive of Loblaw is based principally on the following design mark [the Ventura Mark] registered by Ventura in 1971, more than a decade before the registrations by Loblaw of the PC Word Mark:
[25] Pampered Chef asserts that the Ventura Mark represents a stylized version of the letters “PC” and notes that Loblaw has been selling Ventura products, bearing a variant of the Ventura Mark, through its Wholesale Club banner, including placing those products adjacent to certain of its own “PC” products. Pampered Chef relies principally upon the evidence assembled by its private investigator, Mr. Stephan, which establishes such sale by Loblaw, as well as the offering for sale of the Ventura products by other vendors, including Costco expressly advertising such products as “PC” products. Loblaw has also provided Pampered Chef with certain admissions, including the fact that Loblaw has been selling a Ventura ketchup product in a 4L bottle, bearing the variant of the Ventura Mark, since at least 2000, and that since at least 2016 several of Loblaw’s Wholesale Club locations have sold the Ventura ketchup, as well as boxes of what appear to be single use packets of tartar sauce, and/or malt vinegar, displaying such mark.
[26] Loblaw also admits that it has never challenged the use, validity or registration of the Ventura Mark or any variant. Pampered Chef notes that the Federal Court of Appeal recently confirmed in Sadhu Singh Hamdard Trust v Navsun Holdings Ltd, 2019 FCA 10 [Sadhu Singh] at paras 15-16, that it is incumbent upon a trader to protect the distinctiveness of its mark, even in the face of infringing use, or it risks such infringing use causing its mark to lose its distinctiveness.
[27] I find the evidence surrounding the Ventura Mark to have little impact upon the distinctiveness of the PC Word Mark. As an initial point, as argued by Loblaw, it is not immediately obvious that the Ventura Mark is employing the letters “PC”, and there is no evidence before the Court that consumers understand that mark to represent a “PC”. The only evidence on this point is that of Mr. Blizzard, who stated that neither he nor his colleagues at Wholesale Club ever understood the mark that appears on the Ventura products to represent a “PC”. While the block letters “PC” do appear on some of the boxes containing individual condiment packages, this is on the bottom of the boxes, and there is no evidence that such usage would have come to the attention of consumers.
[28] The website pages of Costco and other businesses identified by Mr. Stephan as selling Ventura products refer to those products with the block letters “PC”. However, Loblaw points out that these vendors are all wholesalers which focus on foodservice companies, not on retail sale to consumers. Related thereto, the Ventura products differ from those branded with Loblaw’s PC Word Marks, as they are bulk condiments not intended for a retail consumer market. There is also no evidence of the volume of sales of the Ventura products by any of these businesses.
[29] The only evidence of the volume of sales of Ventura products relates to the sale by Loblaw itself. I agree with its characterization of the Ventura tartar sauce and malt vinegar sales figures as [REDACTED]. The Ventura brown sugar does not bear the Ventura Mark or its variant on its packaging, only on the bottom of the box. Loblaw’s sales of the 4L ketchup bottle are [REDACTED], totalling approximately [REDACTED] in 2016, [REDACTED] in 2017, and [REDACTED] in 2018, [REDACTED]. [REDACTED] and there would have been sales in previous years for which the evidence is that data was not readily available, I agree with Loblaw’s position that these sales [REDACTED] fall well short of negating the distinctiveness of the PC Word Marks for food products, let alone kitchenwares.
[30] As confirmed in Sadhu Singh at paras 4 and 12, the standard for a mark to be sufficiently well-known to negate the distinctiveness of another is that articulated in Bojangles’ International LLC v Bojangles Café Ltd, 2006 FC 657 at para 34, requiring that the former mark have a reputation that is “substantial, significant or sufficient.” The decision in Rothmans, Benson & Hedges, Inc v Imperial Tobacco Products Ltd, 2014 FC 300 at para 82, also reflects that the relative volumes of sales of the respective products in question are relevant to the distinctiveness analysis. [REDACTED] (details of which are canvassed later in these Reasons). In my view, it is abundantly clear that the distinctiveness of the PC Word Marks is not negated by the evidence related to the Ventura products.
[31] Finally, I note Pampered Chef’s argument that Loblaw faces a dilemma in asserting that the Short Form Marks are confusing with the PC Word Mark in that, if this is correct, then the PC Word Mark must itself be confusing with the Ventura Mark. Pampered Chef submits that such a dilemma was identified by the Supreme Court of Canada in Johnson (SC) and Son, Ltd v Marketing International Ltd, [1980] 1 SCR 99 [Johnson] at para 35. In that case, the appellant registered owner of the trademark “OFF!” brought an infringement action against the respondent, arguing that its use of “Bugg Off” was confusing. The dilemma identified by the Supreme Court was that the appellant’s “OFF!” Mark was not validly registered if it was confusing with a third party’s prior registered mark “BUGZOFF”.
[32] However, the reasoning in Johnson was based on s 12(1)(d) of the Act, the effect of which is that a trademark is registrable only if it is not confusing with a registered trademark. In the present case, Pampered Chef could have framed the invalidity allegation in its counterclaim as based on confusion between the PC Word Mark and the Ventura Mark. This allegation would have invoked s 18(1)(a) of the Act, which provides that a registration is invalid if it is not registrable at the date of registration. However, Pampered Chef has not pleaded this allegation. Its counterclaim relies on an assertion that that the PC Word Mark is not distinctive of Loblaw, which assertion invokes solely s 18(1)(b) of the Act. The tests for confusion and distinctiveness are not the same. I therefore agree with Loblaw’s position that the reasoning in Johnson is not applicable and the dilemma identified in that case does not arise.
[33] In conclusion on this issue, were it necessary for the outcome of this action to address Pampered Chef’s invalidity allegation, I would find the PC Word Mark to be distinctive and thus valid.
B. Has Pampered Chef infringed Loblaw’s rights under section 19 of the Act?
[34] Section 19 of the Act prevents a party from using a trademark identical to a registered trademark in association with goods or services identical to the goods or services in association with which it is registered (see Gary Gurmukh Sales Ltd v Quality Goods IMD Inc, 2014 FC 437 [Quality Goods] at para 83).
[35] Loblaw asserts two categories of section 19 infringement. The first relates to Pampered Chef’s use of “PC Dollars” in association with its reward incentive program. Under that program, Pampered Chef’s ICs can earn rewards, described as “PC Dollars”, which it can redeem for various Pampered Chef products. Loblaw argues that Pampered Chef’s operation of this program represents use of Loblaw’s identical trademark “PC” (i.e. the PC Word Mark), which Loblaw has registered in association with an identical service.
[36] Pampered Chef does not dispute that the services are identical. However, it argues that the marks are not identical, in that Loblaw’s registered mark is “PC”, while Pampered Chef’s mark is “PC Dollars”. Pampered Chef notes Loblaw’s reliance on Quality Goods for the proposition that s 19 can still be infringed, even in the case of minor differences between the two marks, where the infringing trademark takes the character or identity of the registered mark. Pampered Chef submits that, while Quality Goods does state this proposition, it was wrongly decided, in that it relies on Promafil Canada Ltée v Munsingwear Inc (1992), 142 NR 230 (Fed CA) [Promafil], which was a non-use cancellation proceeding brought under s 45 of the Act. Promafil concluded that the use of a penguin logo on clothing, where the penguin’s body type differed from that in the original registration, represented continued use of the registered mark.
[37] While Pampered Chef’s argument may have merit, it is unnecessary for me to decide this legal point. Even if I were to accept Loblaw’s submission that s 19 can still be infringed where there are minor differences in the marks being compared, this position would not assist it in the present case, as the difference between “PC” and “PC Dollars” is more than a minor difference.
[38] Loblaw also argues that the two marks are actually identical, in that the word “Dollars” represents merely the addition of a descriptive word after Loblaw’s mark “PC”. I do not agree that Pampered Chef’s mark can be characterized in this manner. As Ms. Kabat confirmed in her testimony, [REDACTED]. Rather, this is a term used to refer to the rewards that its ICs earn. My conclusion is that Pampered Chef’s mark is the entire phrase “PC Dollars”, that this is not identical to “PC”, and that there is therefore no infringement of s 19.
[39] The second category of s 19 infringement asserted by Loblaw relates to Pampered Chef’s use of the Short Form Marks on a number of its kitchenware products. Pampered Chef has agreed that it sells in Canada serving bowls, cleaning cloths, kitchen utensils and a cold brew pitcher, all of which bear or are associated with one of the Short Form Marks. One of Loblaw’s registrations of the PC Word Mark is in respect of a number of food and kitchenware products, including “bowls” and “serviettes and wipes.”
[40] Pampered Chef’s response to this allegation is that its Short Form Marks are not identical to the PC Word Mark. Again, even if I were to accept that s 19 can be infringed in the case of minor differences, it is clear to me that the differences between the marks in question are not minor. Pampered Chef’s Short Form Marks both employ the Happy Spoon brand device inserted between the letters “P” and “C”. Both the insertion of the Happy Spoon and the resulting separation of the letters represent differences, and in my view sufficiently material differences, between Pampered Chef’s marks and Loblaw’s mark “PC” to preclude a finding that the marks are identical.
[41] I therefore find that Pampered Chef has not infringed Loblaw’s rights under section 19 of the Act.
C. Has Pampered Chef infringed Loblaw’s rights under section 20 of the Act?
[42] Loblaw’s infringement allegation under s 20 of the Act relies upon s 20(1)(a), which provides as follows:
Infringement
Violation
20 (1) The right of the owner of a registered trade-mark to its exclusive use is deemed to be infringed by any person who is not entitled to its use under this Act and who
20 (1) Le droit du propriétaire d’une marque de commerce déposée à l’emploi exclusif de cette dernière est réputé être violé par une personne qui est non admise à l’employer selon la présente loi et qui :
(a) sells, distributes or advertises any goods or services in association with a confusing trade-mark or trade-name;
a) soit vend, distribue ou annonce des produits ou services en liaison avec une marque de commerce ou un nom commercial créant de la confusion;
[43] As Loblaw submits, the elements necessary to establish infringement under s 20(1)(a) are well-established, requiring it to prove that: (i) it has a valid registered trademark; (ii) Pampered Chef has sold, distributed, or advertised goods or services in association with a trademark; and (iii) the latter trademark is confusingly similar with that of Loblaw and was used without Loblaw’s permission (see, e.g., United Airlines, Inc v Cooperstock, 2017 FC 616 [United Airlines] at para 30). Loblaw submits, and I agree, that only the third element, the question of confusion, is a live issue in this matter.
[44] The burden is on Loblaw to establish a likelihood of confusion, as opposed to a mere possibility (see, e.g. BBM Canada v Research In Motion Limited, 2012 FC 666 [BBM] at para 30). Likelihood must be proven by Loblaw on a balance of probabilities (see Veuve Clicquot Ponsardin v Boutiques Cliquot Ltée, 2006 SCC 23 [Veuve Clicquot] at para 14).
[45] As explained in Mattel USA Inc v 3894207 Canada Inc, 2006 SCC 22 [Mattel] at para 51, confusion between trademarks is defined in s 6(2) of the Act and arises if it is likely in all the surrounding circumstances, as set out in s 6(5), that a prospective purchaser will be led to the mistaken inference “… that the wares or services associated with those trademarks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.”
[46] Pursuant to s 6(5), in making the determination whether or not trademarks are confusing, the Court is required to consider all the surrounding circumstances including: (a) the inherent distinctiveness of the trademarks and the extent to which they have become known; (b) the length of time the trademarks have been in use; (c) the nature of the goods, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trademarks in appearance or sound or in the ideas suggested by them.
(1) Section 6(5)(e) – Degree of Resemblance
[47] As the Supreme Court of Canada indicated in Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 [Masterpiece] at para 49, the confusion analysis should start with the degree of resemblance between the marks under s 6(5)(e), as this is the factor that is often likely to have the greatest impact. If the marks do not resemble one another, it is unlikely that even a strong finding on the remaining factors would lead to a likelihood of confusion. Conversely, after the Supreme Court found in Masterpiece at para 104 a strong resemblance between the marks at issue, it concluded based on that factor that a consumer would likely be confused and stated that the remaining question was whether any of the other circumstances reduced the likelihood of confusion to the point that confusion was not likely to occur.
[48] Resemblance is defined as the quality of being either like or similar, with the term “degree of resemblance” employed in s 6(5)(e) recognizing that marks with some differences may still result in likely confusion (see Masterpiece at para 62). It must also be borne in mind that the test for confusion is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the mark at a time when he or she has no more than an imperfect recollection of the prior trademarks and does not pause to give the matter any serious consideration or scrutiny, nor to examine closely the similarities and differences between the marks. The test does not contemplate a careful examination of competing marks or a side-by-side comparison (see Masterpiece at para 40).
[49] Masterpiece also explains at paragraphs 45 to 46 that, while some of the s 6(5) factors that guide the confusion analysis will be the same for each of the trademarks at issue, others will require that each mark be considered separately. In that case, the degree of resemblance was one such factor, and I agree with Loblaw’s position that separate consideration of that factor is required in the case at hand as well. I understood both parties to have approached their submissions in this matter on the basis that the arguments in favour of the degree of resemblance are the strongest as between Pampered Chef’s Short Form Marks and Loblaw’s PC Word Mark. Indeed, as between the two Short Form Marks, I would regard the version bearing the most degree of resemblance to the PC Word Mark to be the Short Form Mark which does not include the circle design element, i.e.:
[50] I will therefore analyse first the degree of resemblance between this mark and the PC Word Mark and will subsequently consider the extent to which that analysis differs as between other sets of marks that must be considered in connection with the confusion determination.
[51] Section 6(5)(e) sets out three bases upon which to evaluate the degree of resemblance between the marks: appearance, sound, and ideas suggested by the marks. Loblaw takes the position that the PC Word Mark is identical to Pampered Chef’s marks in all of these areas. I will consider first the easiest basis to assess, the degree of resemblance in sound. I agree with Loblaw that the marks are identical in sound, i.e. that there would be no pronunciation of the design elements of Pampered Chef’s marks and that each would be pronounced “PEE SEE”.
[52] Turning to the degree of resemblance in appearance, Loblaw makes the point that, because the PC Word Mark is a word mark, Loblaw’s registrations entitle it to use the mark “PC” employing any style of lettering. The confusion analysis must therefore be undertaken with that principle in mind (see Masterpiece at para 55). I accept that no distinction between the marks should be drawn based on the style of lettering employed in Pampered Chef’s mark. That is, the lettering can be regarded as identical.
[53] However, I disagree with Loblaw that overall the Marks are identical in appearance. As previously noted in connection with the s 19 analysis, the letters in Pampered Chef’s mark are not adjacent to each other as they are in the PC Word Mark, and Pampered Chef’s mark includes the Happy Spoon design element between the letters.
[54] Loblaw relies on Seara Alimentos Ltda v Amira Enterprises Inc, 2019 FCA 63 [Seara] at para 36 to support its argument that the addition of simple design elements does not attenuate the degree of resemblance between two marks. In Seara, the Federal Court of Appeal took no issue with the conclusion by the Trade Mark Opposition Board [TMOB] that there was a high degree of visual resemblance between the appellant’s two word marks and the respondent’s word and design mark, notwithstanding the additional design element in the latter. However, I also note the comment by the Federal Court of Appeal that the new evidence introduced by the appellant when before the Federal Court did not particularly focus on the additional design element but rather upon differences in the products and industry segments relevant to the confusion analysis. I regard the conclusion in Seara as to the insignificance of the design element to turn on the particular facts of that case.
[55] That interpretation is consistent with the decision in Domaines Pinnacle Inc v Constellation Brands Inc, 2016 FCA 302 [Domaines Pinnacle], in which the Federal Court of Appeal found to be reasonable the TMOB’s conclusions that the visual element of the appellant’s word and design mark (employing the word “Pinnacle”) and the respondent’s word mark “Pinnacles” was sufficiently different, and that confusion was unlikely to occur between them, which conclusions appear to have been based significantly on the distinguishing role of the design element.
[56] In the present case, the parties disagree as to whether it is the letters “P” and “C” or the Happy Spoon that represents the “striking or unique” or “dominant” feature of Pampered Chef’s mark. As explained in Masterpiece at paras 83-84, while the Court should not tease out or analyse each portion of a mark alone, as that is not how it is encountered by the consumer, consideration of a trademark as a whole also does not mean that a dominant component of a mark which would affect the overall impression of an average consumer should be ignored. Loblaw submits that the letters “PC”, being the only word or language component of Pampered Chef’s mark, represent the dominant component.
[57] Pampered Chef takes the opposite position. It notes that, while Loblaw argues that its PC Word Mark has significant acquired distinctiveness, Loblaw acknowledges that, as it is composed solely of two letters of the alphabet, the mark is inherently lacking in distinctiveness. The latter conclusion is also supported by case law canvassed in my consideration of distinctiveness later in these Reasons. Therefore, argues Pampered Chef, the more inherently distinctive Happy Spoon represents the more dominant feature. It also notes that the Happy Spoon is the spatially central component of the mark and is somewhat larger in size than the “P” and “C” on either side.
[58] In my view, the arguments of both parties on this particular issue h