Hortilux Schreder B.V. v. Iwasaki Electric Co. Ltd.

Hortilux Schreder B.V. v. Iwasaki Electric Co. Ltd.
Court (s) Database
Federal Court Decisions
Date
2011-07-29
Neutral citation
2011 FC 967
File numbers
T-2116-10
Decision Content
Federal Court
Cour fédérale
Date: 20110729
Docket: T-2116-10
Citation: 2011 FC 967
Ottawa, Ontario, July 29, 2011
PRESENT: The Honourable Mr. Justice Russell
BETWEEN:
HORTILUX SCHREDER B.V.
Appellant
and
IWASAKI ELECTRIC CO. LTD.
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an appeal by Hortilux Schreder B.V. (Hortilux Schreder, Appellant or Opponent), pursuant to section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act), of the decision of a member of the Trade-marks Opposition Board (Member), dated 27 October 2010 (Decision). The Member rejected Hortilux Schreder’s opposition to the registration, by Iwasaki Electric Co. Ltd. (Iwasaki or Respondent), of the trade-mark HORTILUX.
[2] Hortilux Schreder seeks:
a. a declaration that the Member erred in rejecting the Appellant’s opposition with respect to Application Serial No. 1,064,360 for the trade-mark HORTILUX;
b. an order allowing this appeal and reversing the Decision of the Member and holding that the Respondent’s trade-mark HORTILUX is not registrable and not distinctive and that the Respondent is not the person entitled to registration of that trade-mark; and
c. costs of this appeal.
BACKGROUND
[3] Hortilux Schreder asserts that, since March 1997, it has used the trademark and trade-name HORTILUX in association with lighting apparatus and lamp reflectors for the horticultural industry.
[4] On 23 June 2000, Iwasaki applied to register the trade-mark HORTILUX in association with “electric lamps” (i.e., light bulbs), based on use in Canada since at least 31 December 1997. The electric lamps sold by Iwasaki are targeted to the horticultural industry.
[5] Hortilux Schreder filed a Statement of Opposition on 31 May 2002, opposing Iwasaki’s trade-mark application. The Appellant alleged, inter alia, that, Iwasaki had contravened s. 30(b) of the Act by not using the trade-mark HORTILUX in Canada in association with the wares since 31 December 1997. It also alleged that, pursuant to s. 16(1)(a) of the Act, Iwasaki is not the person entitled to registration since, at its alleged date of first use, the trade-mark was confusing with Hortilux Schreder’s trade-marks HORTILUX and HORTILUX SCHREDER, which had been used previously and which continue to be used in Canada in association with the wares of Hortilux Schreder.
[6] The Member dismissed Hortilux Schreder’s appeal. This is the Decision under appeal.
DECISION UNDER APPEAL
Opposition Based on Subsection 16(1)
[7] During the proceedings before the Member, Hortilux Schreder argued that Iwasaki was not the person entitled to registration since, at the alleged date of first use, the trade-mark was confusing with the Hortilux Schreder’s trade-marks HORTILUX and HORTILUX SCHREDER, which had been previously used in Canada in association with lighting reflectors.
[8] To meet its burden of showing that it had used the trade-marks in question in Canada in association with the wares, Hortilux Schreder first adduced affidavit evidence in the form of invoices for the purchase of lighting reflectors in Canada, the earliest of which was dated 26 August 1997. The Member noted that the trade-marks did not appear in the body of the invoices and that there was no evidence that the trade-marks appeared on the wares or on their packaging.
[9] Hortilux Schreder then adduced affidavit evidence that, under the terms of the licence agreement with its subsidiaries, Hortilux Schreder had control over the character and quality of the wares. The Member noted that the licence agreement itself was not in evidence and that the affiant, Mr. de Leeuw, did not explain how such control was exercised or what steps were taken to ensure the character and quality of the wares provided. The Member concluded:
I am therefore of the view that, even had the Opponent shown use of its marks, such use would not have inured to its benefit, pursuant to s. 50(1) of the Act.
For all of these reasons, I find that the Opponent has not established use of its trade-marks in Canada. Accordingly this ground is dismissed.
[10] With respect to confusion, the Member noted that the earliest evidence (an invoice) adduced by Hortilux Schreder to demonstrate use of the trade-name HORTILUX SCHREDER in Canada was dated 6 April 1999. As this date is beyond Iwasaki’s claimed date of first use (that is, 31 December 1997), the member found that Hortilux Schreder had failed on this ground as well.
Opposition Based on Section 30(b)
[11] During the proceedings before the Member, Hortilux Schreder argued that Iwasaki had not used its mark in Canada in association with the wares since 31 December 1997 and therefore had failed to comply with s. 30(b) of the Act. Hortilux Schreder introduced evidence that Iwasaki’s use of the trade-mark in association with the wares appeared for the first time on a website of an Iwasaki subsidiary, namely Eye Lighting International of North America Inc. (Eye Lighting), on 12 October 1999, two years after Iwasaki’s claimed date of first use. The Member found that this evidence put Iwasaki’s claimed date of first use at issue.
[12] Iwasaki responded by adducing affidavit evidence that its subsidiary, Eye Lighting, had sold wares to its main customer, Standard Products Inc., on 31 December 1997. The affiant, Mr. Thomas, stated that, to the best of his recollection, the trade-mark would have been displayed on the wares and on their packaging.
[13] Hortilux Schreder challenged this evidence. It stated that, pursuant to s. 4(1) of the Act, a trade-mark is deemed used if, inter alia, it is associated with the wares at the time of the transfer of possession of the wares in the normal course of trade. Given that possession of the wares could not be transferred until the wares were received by Standard Products, the date of first use would have to be the date on which Standard Products received the wares and not 31 December 1997, which was the date on which Eye Lighting took the order for the wares. Hortilux Schreder further argued that it was unlikely that Eye Lighting (located in Cleveland) would take the order on one day and that Standard Products (located in Quebec) would receive it on the same day. As Iwasaki had adduced no evidence to prove otherwise, 31 December 1997 could not be presumed to be the date of first use.
[14] However, Iwasaki did adduce evidence that two units of the wares were sold for zero value to Standard Products on 15 October 1997 and that the trade-mark appeared on these wares and on their packaging. The Member acknowledged that zero-value sales have been regarded as use in the normal course of trade, as long as there are subsequent patterns of sales of the items. See Canadian Olympic Association v Pioneer Kabushiki Kaisha (1992), 42 CPR (3d) 470, 1992 CarswellNat 1476 [Canadian Olympic] (TMOB). She concluded as follows:
[A]lthough the sale of December 31, 1997 may not be substantiated by evidence showing that the shipment arrived in Canada on that day, I am satisfied that the Applicant had in fact used its Mark in Canada two months prior to the claimed date of first use, which led to the subsequent sale of the Wares between these parties on December 31, 1997.
Accordingly, I find that the Applicant has met its legal onus establishing compliance with the requirements of s. 30(b) of the Act. This ground of opposition is therefore dismissed.
ISSUES
[15] The Appellant raises the following issues in this appeal:
a. Whether correctness is the appropriate standard of review;
b. Whether the Member erred in rejecting the Appellant’s ground of opposition based on s. 16 of the Trade-marks Act; and
c. Whether the Member erred in rejecting the Appellant’s ground of opposition based on s. 30(b) of the Trade-marks Act.
STATUTORY PROVISIONS
[16] The following provisions of the Act are applicable in these proceedings:
When deemed to be used
4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
[…]
Registration of marks used or made known in Canada
16. (1) Any applicant who has filed an application in accordance with section 30 for registration of a trade-mark that is registrable and that he or his predecessor in title has used in Canada or made known in Canada in association with wares or services is entitled, subject to section 38, to secure its registration in respect of those wares or services, unless at the date on which he or his predecessor in title first so used it or made it known it was confusing with
(a) a trade-mark that had been previously used in Canada or made known in Canada by any other person ….
Previous use or making known
(5) The right of an applicant to secure registration of a registrable trade-mark is not affected by the previous use or making known of a confusing trade-mark or trade-name by another person, if the confusing trade-mark or trade-name was abandoned at the date of advertisement of the applicant’s application in accordance with section 37.
[…]
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 ….
[…]
Licence to use trade-mark
50. (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.
Quand une marque de commerce est réputée employée
4. (1) Une marque de commerce est réputée employée en liaison avec des marchandises si, lors du transfert de la propriété ou de la possession de ces marchandises, dans la pratique normale du commerce, elle est apposée sur les marchandises mêmes ou sur les colis dans lesquels ces marchandises sont distribuées, ou si elle est, de toute autre manière, liée aux marchandises à tel point qu’avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
[…]
Enregistrement des marques employées ou révélées au Canada
16. (1) Tout requérant qui a produit une demande selon l’article 30 en vue de l’enregistrement d’une marque de commerce qui est enregistrable et que le requérant ou son prédécesseur en titre a employée ou fait connaître au Canada en liaison avec des marchandises ou services, a droit, sous réserve de l’article 38, d’en obtenir l’enregistrement à l’égard de ces marchandises ou services, à moins que, à la date où le requérant ou son prédécesseur en titre l’a en premier lieu ainsi employée ou révélée, elle n’ait créé de la confusion :
a) soit avec une marque de commerce antérieurement employée ou révélée au Canada par une autre personne ….
Emploi ou révélation antérieur
(5) Le droit, pour un requérant, d’obtenir l’enregistrement d’une marque de commerce enregistrable n’est pas atteint par l’emploi antérieur ou la révélation antérieure d’une marque de commerce ou d’un nom commercial créant de la confusion, par une autre personne, si cette marque de commerce ou ce nom commercial créant de la confusion a été abandonné à la date de l’annonce de la demande du requérant selon l’article 37.
[…]
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
[….]
Licence d’emploi d’une marque de commerce
50. (1) Pour l’application de la présente loi, si une licence d’emploi d’une marque de commerce est octroyée, pour un pays, à une entité par le propriétaire de la marque, ou avec son autorisation, et que celui-ci, aux termes de la licence, contrôle, directement ou indirectement, les caractéristiques ou la qualité des marchandises et services, l’emploi, la publicité ou l’exposition de la marque, dans ce pays, par cette entité comme marque de commerce, nom commercial — ou partie de ceux-ci — ou autrement ont le même effet et sont réputés avoir toujours eu le même effet que s’il s’agissait de ceux du propriétaire.
ARGUMENTS
The Appellant
The Appropriate Standard of Review is Correctness
[17] Hortilux Schreder submits that, as a result of the new evidence filed on this appeal, the Decision should be reviewed on a correctness standard. In Molson Breweries, A Partnership v John Labatt Ltd, [2000] 3 FC 145, 5 CPR (4th) 180 at paragraph 51, the Federal Court of Appeal determined the standard of review applicable on appeal from a decision of the Registrar. It stated:
Having regard to the Registrar’s expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar’s findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar’s decision.
[18] The Appellant submits that its new evidence specifically addresses the Member’s concerns and would have materially affected her findings that, first, that the Appellant had not established use of the trade-mark HORTILUX and, second, that any use of the trade-mark HORTILUX would not have inured to the Appellant’s benefit because the Appellant had failed to explain how it exercises control over the character and quality of the wares sold by its licensees. For this reason, the Court should undertake its own analysis of this matter.
The Member Erred in Adjudicating the Subsection 16(1) Arguments
Prior Use
[19] The Appellant contends that its evidence, including the new evidence filed on appeal, establishes its use of the trade-mark HORTILUX prior to Iwasaki’s alleged date of first use of 31 December 1997. At the Opposition Hearing, the Appellant attempted to demonstrate that it had used the trade-marks in question in Canada in association with the wares by adducing affidavit evidence in the form of invoices for the purchase of lighting reflectors in Canada, the earliest of which was dated 26 August 1997. The Member found the invoices unpersuasive, in part, because the trade-marks did not appear in the body of the invoices.
[20] According to the jurisprudence, the Member was in error. The Exchequer Court, in Gordon A. MacEachern Ltd v National Rubber Co (1963), 41 CPR 149 at 157, 1963 CarswellNat 20 [National Rubber], found that the display of a trade-mark on an invoice that accompanies wares is considered “use” in association with the wares, pursuant to s. 4(1) of the Act, if the trade-mark and the wares are associated to a point that the receiver would thereby have notice of the association. The jurisprudence of other tribunals establishes several relevant factors when considering if a trade-mark appearing at the top of an invoice is associated with the wares referenced in the invoice. For example, the trademark should be prominent. See Gowling Lafleur Henderson LLP v Bulova Watch Co (2006), 51 CPR (4th) 470 at paragraphs 14 and 18, 2006 CarswellNat 1234 (TM Bd). It should not be used in the context of corporate identification but rather should stand apart from the corporate address and contact information. See 88766 Canada Inc v Phillips, 2008 TCC 48, 2008 CarswellNat 2206 at paragraph 19 (TM Bd). It should be clear to the purchaser of the wares that the trademark is associated with the wares. See 88766 Canada Inc v Texinvest Inc, 2008 CarswellNat 767 at paragraphs 12 and 14 (TM Bd). No other trademark should appear on the invoice in association with the wares. See Messrs Stewart McKelvey Stirling Scales v Peninsula Farm Ltd, 2006 CarswellNat 4228 at paragraph 9 (TM Bd). The Appellant submits that the invoices in question meet all of these relevant factors and, therefore, establish the Appellant’s prior use of the HORTILUX trade-mark.
[21] The Appellant’s new evidence includes the affidavit of Marco Brok, who has been employed by the Appellant since March 1997 and who is now the manager of research and development. Mr. Brok stated that one of the Appellant’s distributors, P.L. Light Systems Canada Inc. (P.L. Light Systems) has been importing lighting fixtures since March 1997 and that the Appellant as well as its Canadian customers refer to the Appellant’s company and products simply as HORTILUX.
The Prior Use of the Trademark Inures to the Appellant’s Benefit
[22] The Appellant argues that, when a trade-mark owner sells its wares associated with the trade-mark to a distributor in Canada, the trade-mark is considered to be “used” in Canada by the trade-mark owner. Therefore, by selling its products directly to its Canadian distributor, P.L. Light Systems, the Appellant uses the mark in Canada; it need not rely upon s. 50(1) of the Act and the use by a third party inuring to its benefit. See Manhattan Industries Inc v Princeton Manufacturing Ltd (1971), 4 CPR (2d) 6 at 16-17, 1971 CarswellNat 513 (FCTD). The Member erred in assuming that s. 50 was applicable to all of the “use” of HORTILUX described in the Appellant’s evidence. She failed to recognize that the Appellant’s evidence established use by the Appellant (not simply use by a licensee), to which the requirements of s. 50(1) are not applicable.
Confusion
[23] The Appellant argues that the trade-mark HORTILUX, for which Iwasaki applied in association with electric lamps, is confusing with the Appellant’s own trade-mark HORTILUX, which was already in use in association with light reflectors. The Member failed to consider the issue of confusion, which must be considered de novo in this appeal.
[24] Subsection 6(5) of the Act defines five circumstances in which one trade-mark will be considered confusing with another. The Appellant asserts that the five circumstances are present in the instant case. First, HORTILUX is a coined term and highly distinctive. Second, the Appellant had used the trade-mark HORTILUX in Canada as early as August 1997, which is prior to the Respondent’s earliest possible date of first use in October 1997. Third, each party’s wares relate to lighting for the horticultural industry. Iwasaki seeks to register HORTILUX for electric lamps targeted to the horticultural industry. Hortilux Schreder sells lighting apparatus and lighting reflectors (which hold electric lamps) for the horticultural industry in association with the trade-mark HORTILUX. Fourth, the wares of one party could easily be used with the wares of the other. For example, the Respondent’s HORTILUX bulbs could be used in the Appellant’s HORTILUX reflectors. Fifth, the trade-marks are identical. The Respondent is, therefore, not entitled to register the trade-mark in association with lamps.
The Member Erred in Adjudicating the Section 30(b) Arguments
[25] The Member found, relying in part on Canadian Olympic, above, that Iwasaki had established its alleged date of first use as a result of a sale of two wares for zero value two months before the claimed date of first use, even though Iwasaki never asserted that the transaction occurred in the normal course of trade.
[26] In so doing, the Member misstates the law, incorrectly applies the Canadian Olympic decision and misapprehends the evidence. In Canadian Olympic, the Member determined that the distribution of free samples by the applicant was in the normal course of trade based on evidence regarding the normal course of trade of the applicant and the purpose of the free samples, which was to inform and promote the product with a view to obtaining orders from customers. Other tribunals have held that “giveaway” wares per se are not considered to be use in the normal course of trade. See 88766 Canada Inc v Spinnakers Brew Pub Inc (2005), 48 CPR (4th) 70 at paragraph 11, 2005 CarswellNat 2914 (TM Bd) [Spinnakers Brew Pub]; and Aird & Berlis LLP v Levi Strauss & Co (2005), 45 CPR (4th) 397 at paragraph 9, 2005 CarswellNat 2555 (TM Bd) [Levi Strauss]. Accordingly, Iwasaki was required to adduce evidence that the 15 October 1997 transaction for zero value was in the normal course of trade, but it failed to do so. Moreover, the Appellant argues that Iwasaki’s reliance on the 31 December 1997 transaction as evidence of its use of the trade-mark in the normal course of trade suggests that the earlier transaction is anything but. Iwasaki adduced no new evidence on this point, therefore its application should be refused.
The Respondent
The Appropriate Standard of Review is Reasonableness
[27] The Supreme Court of Canada has confirmed that the appropriate standard of review on an appeal under s. 56 of the Act is reasonableness. See Mattel Inc v 3894207 Canada Inc, (2006), 49 CPR (4th) 321 at 341, 2006 CarswellNat 1400 [Mattel]. The Court must consider whether the tribunal’s decision can withstand “a somewhat probing” examination and is not “clearly wrong.” See Mattel, above at 341.
[28] Where fresh evidence is submitted on appeal, the Court must consider the extent to which this fresh evidence adds anything of probative value. If it is not probative, the Court should adopt a deferential standard. See Philip Morris Inc v Imperial Tobacco Ltd (1987), 17 CPR (3d) 289, 1987 CarswellNat 701 (FCA).
[29] In the instant case, the Appellant submitted fresh evidence consisting of affidavits from Marco Brok, Kendrik Westerhoff and Edwin de Gier. The Respondent submits that this evidence adds nothing substantially different from that which was before the Member. Mr. Brok’s affidavit is silent as to how the trade-mark HORTILUX was used in association with the wares, and his evidence regarding continuing use through reference to the Appellant’s website is not persuasive. Mr. Westerhoff’s and Mr. de Gier’s statements pertain to events occurring after 2004 and therefore are too late in time to be relevant to the issues on appeal. Consequently, the appropriate standard of review is reasonableness.
The Member’s Decision Was Reasonable
Subsection 16(1)
[30] The Member states at paragraphs 47 and 48 of her Decision that the Appellant has failed to meet the onus on it to adduce evidence of its use of the trade-mark HORTILUX in Canada prior to 31 December 1997 in association with the wares or the packaging. The only evidence that the Appellant put forward were the three invoices that were part of Mr. de Leeuw’s affidavit. All three of the invoices refer to “HORTILUX Assimilatiebelichting.” The affiant states that these invoices “accompanied” wares sent to the Appellant’s Canadian subsidiary, but he does not explain what that means. Indeed, the invoices state that they were “delivered with packing list,” which suggests to the Respondent that they were not delivered with the wares. Also, the affiant does not disclose the position he held in the Canadian subsidiary in 1997 which, presumably, would qualify him to speak to these matters. It is impossible to conclude from this affidavit that the criteria of s. 4(1) of the Act were met.
[31] The Respondent further submits that the use of a trade-mark on an invoice cannot simply be presumed to constitute use in association with wares described in the invoice. See National Rubber, above. A significant factor is its position on the invoice. See Tint King of California Inc. v Canada (Registrar of Trade-marks), 2006 FC 1440, [2006] FCJ No 1808. The tribunal in Sterling & Affiliates v ACB Dejac SA (1994), 58 CPR (3d) 540, 1994 CarswellNat 3082 (TMOB) held that use of the trademark at the top of the invoice (as occurred in this case) did not constitute use in association with the wares at the time of transfer of the wares in the normal course of trade; rather it constituted use as a trade-name. (The Respondent notes that the Appellant has not alleged prior use of the trade-name HORTILUX as a ground of opposition.) The Member made appropriate and reasonable findings regarding the position of the trade-mark on the invoices.
Section 30(b)
[32] The Appellant relies on Spinnakers Brew Pub, above, and Levi Strauss, above, to argue that it was incumbent on the Respondent to provide evidence establishing that the 15 October 1997 transfer of wares was in the normal course of trade. The Respondent argues that these cases are distinguishable from the instant case. In Spinnakers Brew Pub, the wares distributed as “giveaways” included coasters and matches; in Levi Strauss, they consisted of notebooks, albums and placemats. In both cases, the tribunal found that the distribution of these wares did not constitute use in the normal course of trade because the free distribution of these wares were not carried out in anticipation of securing orders and sales of such wares. In the instant case, however, it is clear from the evidence that the 15 October 1997 zero-value transaction was not carried out as a simple “giveaway” but rather for the purpose of securing a future order, which it did successfully on 31 December 1997. Therefore, the use commencing with the 15 October 1997 transaction was use in the normal course of trade. The Member’s findings on this point are sound.
The Appellant Has Abandoned the Trade-mark HORTILUX
[33] The Respondent argues that the Appellant has failed to show use of the trade-mark HORTILUX in Canada prior to the material date of 31 December 1997. However, even if it had demonstrated prior use, pursuant to s. 16 it must also show non-abandonment as of the date on which the Application was advertised, namely 9 January 2002. It has failed to do so. Subsequent to December 1997, the Appellant abandoned the trade-mark HORTILUX in favour of HORTILUX SCHREDER. In light of this, the Respondent submits that the Member’s Decision on this ground was entirely reasonable. Contrary to the Appellant’s assertions, she did not misstate or misapply the law nor did she misapprehend the evidence.
ANALYSIS
Standard of Review
[34] At the oral hearing of this matter, it became clear that there is no real dispute between the parties regarding the applicable standard of review. In general, the reasonableness standard will apply as provided by the Supreme Court of Canada in Mattel, above, at paragraph 40:
Given, in particular, the expertise of the Board, and the “weighing up” nature of the mandate imposed by s. 6 of the Act, I am of the view that despite the grant of a full right of appeal the appropriate standard of review is reasonableness. The Board's discretion does not command the high deference due, for example, to the exercise by a Minister of a discretion, where the standard typically is patent unreasonableness (e.g. C.U.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, 2003 SCC 29, at para. 157), nor should the Board be held to a standard of correctness, as it would be on the determination of an extricable question of law of general importance (Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3, at para. 26). The intermediate standard (reasonableness) means, as Iacobucci J. pointed out in Ryan, at para. 46, that “[a] court will often be forced to accept that a decision is reasonable even if it is unlikely that the court would have reasoned or decided as the tribunal did”. The question is whether the Board’s decision is supported by reasons that can withstand “a somewhat probing” examination and is not “clearly wrong”: Southam Inc., at para. 60.
[35] Where additional evidence is adduced before the Court, the Federal Court of Appeal provide the following guidance in Molson Breweries, above, at paragraph 51:
Having regard to the Registrar’s expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar’s findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar’s decision.
Section 30(b) Issues
[36] The Member found that the Respondent had established its alleged date of first use. The Member’s reasoning on this issue is challenged in this appeal and I think it would help to quote the relevant parts of the Decision:
39. I now turn to the Opponent’s submissions in which it argues that even if the Mark was in fact displayed on the Wares at the time of transfer, the earliest possible date of first use would be the date on which the Wares were received by Standard Products Inc. in Canada. The Opponent contends that it would be unlikely that such an order would be placed with a company in Cleveland, Ohio (Eye Lighting) on December 31, 1997 and shift to a company in T.M.R. Québec (Standard Products Inc.) on that same day. As I understand it, T.M.R. stands for the Town of Mount Royal in Montréal, Québec.
40. During the course of Mr. Ward’s cross-examination it is learned that:
- He has no first-hand knowledge of the December 31, 1997 invoice at Exhibit B (q. 44 and 46);
- He has no first-hand knowledge of the shipment referred to in the invoice dated December 31, 1997 (q. 47-48);
- He cannot say for sure what the term “order date” on that invoice stands for, but believes it to be the day after the shipment leaves Eye Lighting’s Plant (q. 53, 55, 57, 59 and 60);
- He has no idea when the December 31, 1997 shipment to Standard Products Inc. arrived at destination (q. 62);
- The Applicant took under advisement a request for production of documents showing receipt by Standard Products Inc. of the December 31, 1997 shipment (q. 63, 64 and 65). The Applicant’s response to this question was “Not available.
41. Pursuant to s. 4 (1) of the Act, in order for use to be considered at the time of transfer, there must be a transfer of possession. Entering into an agreement or placing an order for wares is not considered use [Bilsom International Ltd. v. Cabot Corp. (1991), 36 C.P.R. (3d) 92 (T.M.O.B.)]. In the case of Manhattan Industries Inc. v. Princeton Manufacturing Ltd., (1971) for C.P.R. (2d) 6 (F.C.T.D.) it was held that possession did not transfer until the Canadian recipient of goods have actual possession. Thus, in the present circumstances of this case, free use of the Mark to have occurred in Canada on December 31, 1997, evidence that the shipment has arrived at destination on that date should have been provided, which is not the case.
42. Nevertheless, I bear in mind Exhibit F to the Thomas affidavit which is a copy of Eye Lighting’s internal records, disclosing that two units of the Wares were sold for zero value to Standard Products Inc. on October 15, 1997. Although the sale is for zero value, such transactions have been regarded as used in the normal course of trade, as long as there are subsequent patterns of sales of the items, which is the case here [see Canadian Olympic Association v. Pioneer Kabushiki Kaisha (1992), 42 C.P.R. (3d) 470 (T.M.O.B.)]. Mr. Thomas further attests that to the best of his recollection, the wares sold to Standard Products Inc. on October 15, 1997 would have displayed the Mark on the Wares and on their packaging. Consequently, although the sale of December 31, 1997 may not be substantiated by evidence showing that the shipment arrived in Canada on that date, I am satisfied that the Applicant had in fact used its Mark in Canada two months prior to his claim date of first use, which led to the subsequent sale of the Wares between these parties on December 31, 1997.
43. Accordingly, I find that the Applicant has met its legal onus establishing compliance with the requirements of s. 30(b) of the Act. This ground of opposition is therefore dismissed.
[37] From this it is apparent that the Respondent was unable to establish use in Canada on December 31, 1997 in the usual way. Nevertheless, the Registrar decided to rely upon Exhibit F to the Thomas affidavit (a copy of Eye Lightning’s internal records disclosing that two units of the wares were sold to Standard Products on October 15, 1997 for zero value).
[38] The evidence from Mr. Thomas regarding Canadian sales reads as follows:
11. According to my companies records, 2 units of the Wares were sold (for zero value) to Standard Products Inc. (“SPI”) on October 15, 1997. Attached as Exhibit “F” is an internal record of this transaction.
12. My company sold 36 units of the Wares to SPI on December 31, 1997, in the normal course of trade. Attached as Exhibit “G” is a copy of an invoice of the sale.
13. To the best of my recollection, the Wares sold to SPI on October 15, 1997 and December 31, 1997 would have displayed:
a. The HORTILUX monogram on the bulb itself; and,
b. The HORTILUX sleeve graphic on the lamp sleeves.
Certainly, since my company had both the HORTILUX monogram and the HORTILUX sleeve graphic ready for use as of the fall of 1997, there is no reason why they would not have displayed on the Wares sold to SPI on October 15, 1997, and December 31, 1997.
[39] The interesting thing about this evidence is that, in paragraph 12, Mr. Thomas makes it clear that the units sold on December 31, 1997, were sold “in the normal course of trade.” He does not, however, in paragraph 11 say that the two units sold for zero value to Standard Products were sold in the normal course of trade. Obviously, then Mr. Thomas was aware of section 4(1) of the Act and that he needed to provide evidence of “normal course of trade” transactions because he speaks of this in paragraph 12. In paragraph 11 he does not say that the zero value sales were made in the normal course of trade and he does not say that they led to, or encouraged, the December 31, 1997 sales. Nor does he say that the 2 zero-value sales were shipped or sent to Canada.
[40] Exhibit F to the Thomas affidavit, which is an internal document recording the sales, does not fill in the blanks left by Mr. Thomas’ affidavit. So the Member rejected the December 31, 1997 invoice provided by Mr. Ward as evidence of s. 4(1) use in Canada because it does not show that the shipment arrived; yet she accepts that s. 4(1) use in Canada is established on the basis of an Eye Lightning internal record of zero value sales that does not reveal: (a) whether the zero value sales were normal course of trade sales; (b) whether the sales lead to or encouraged subsequent sales; or (c) whether the zero value units were shipped or arrived in Canada. And Mr. Thomas does not tell us these things.
[41] As a justification for her conclusions in this matter, the Member relies upon the Canadian Olympic Association case, above, for the proposition that “although the sale is for zero value, such transactions have been regarded as use in the normal course of trade, as long as there are subsequent patterns of sales of the items, which is the case here….”
[42] In Canadian Olympic Association, the Opposition Board determined that the distribution of free samples by the applicant in that case was in the normal course of trade based on evidence regarding the normal course of trade of the applicant, and the purpose of the free samples that were provided. In particular, the evidence before the Opposition Board in the Canadian Olympic Association case established that it was the regular practice of the applicant to provide its distributor with free samples of new products for marketing, informational and promotional purposes with a view to obtaining orders from customers:
According to Mr. Vinzenz, the one player and five magazines were sent to Mr. Vinzenz' company as samples prior to the first regular shipments of the goods. In paragraph 9 of his second affidavit, Mr. Vinzenz states that his company normally receives a small number of sample units of a new product from the applicant prior to the receipt of a regular stocking shipment. The samples are used for marketing, informational and promotional purposes with a view to obtaining orders from customers. As one of the replies to undertakings given during the cross-examination of Mr. Vinzenz on his second affidavit, Mr. Vinzenz confirmed that this practice of sending samples of new products to Mr. Vinzenz' company at no charge was in existence in 1986. [Emphasis added.]
[43] As a result of the evidence, the Opposition Board in the Canadian Olympic Association case found that the distribution of the free samples in the particular circumstances of that case constituted use in the normal course of trade:
The issue then becomes whether or not the shipment of sample products by the applicant to its Canadian subsidiary constituted use of the applied for trade-mark in the normal course of trade. Where samples are shipped from a company to its Canadian distributor in advance of regular shipments of the goods for marketing, informational and promotional purposes and this is the regular practice of the parties and where the Canadian distributor then takes delivery of regular shipments of the goods and makes normal commercial sales of the goods, I consider that the transfer of the possession of the sample goods to the Canadian distributor constitutes use of the trade-mark in the normal course of trade. In other words, the facts in this case support the conclusion that the transfer of the sample goods was part of a dealing in the goods for the purpose of acquiring goodwill and profits from the trade-marked goods. [Emphasis added]
[44] Other case law confirms that giving away wares for free per se is not considered to be use in the normal course of trade. See 88766 Canada Inc. v Spinnakers Brew Pub Inc. (2005), 48 CPR (4th) 70 at paragraph 11 (T.M. Bd.) and Aird & Berlis LLP v Levi Strauss & Co. (2005), 45 CPR (4th) 397 at paragraph 9 (T.M. Bd.).
[45] Accordingly, it was incumbent on the Respondent to provide evidence establishing that the October 15, 1997 transfer of wares for zero value was in the normal course of trade. However, the Respondent’s evidence does not provide:
1. Any statement that the October 15, 1997 transaction was in the normal course of trade;
2. Any explanation regarding what constitutes the normal course of trade with respect to the wares in issue, and specifically whether the normal course of trade involves the providing of wares for zero value;
3. Any explanation regarding whether the providing of wares for zero value was part of the regular practice of the parties; or
4. Any explanation regarding the purpose of the zero value wares provided to Standard Products Inc. on October 15, 1997, including whether it was intended that wares would be used for marketing, informational and/or promotional purposes.
[46] Indeed, t