Caterpillar Inc. v. Puma SE

Caterpillar Inc. v. Puma SE
Court (s) Database
Federal Court Decisions
Date
2021-09-22
Neutral citation
2021 FC 974
File numbers
T-1645-17
Decision Content
Date: 20210922
Docket: T-1645-17
Citation: 2021 FC 974
Ottawa, Ontario, September 22, 2021
PRESENT: The Honourable Justice Fuhrer
BETWEEN:
CATERPILLAR INC.
Applicant
and
PUMA SE
Respondent
JUDGMENT AND REASONS
(Public Version of Confidential Draft Version Issued September 10, 2021)
I. Overview
[1] Is the proposed trademark procat for footwear and headgear likely to be confused with the trademarks CAT & Triangle Design and CAT for the same and other goods? Is Puma entitled to the registration of procat in Canada? Is the trademark procat distinctive or adapted to distinguish Puma’s goods from those of Caterpillar? In rejecting Caterpillar’s opposition, the Trademarks Opposition Board [TMOB] said no to the first question and answered the second and third questions affirmatively.
[2] Caterpillar appeals TMOB’s decision rejecting its opposition, and seeks to have the decision set aside and Puma’s trademark application for procat refused.
[3] Both parties filed new evidence that in my view is material, thus triggering a de novo or correctness review of the TMOB’s decision. Having considered the matter anew, I find that Caterpillar satisfied its evidential burden, but that Puma failed to establish, on a balance of probabilities, that its proposed use trademark procat is registrable, that it is the person entitled to registration, and that its trademark is distinctive or adapted to distinguish its goods from those of Caterpillar.
[4] For the more detailed reasons that follow, I therefore allow Caterpillar’s appeal, set aside the TMOB’s decision and refuse Puma’s trademark application for procat.
[5] I note that in this matter, Case Management Judge Milczynski issued a Confidentiality Order dated September 11, 2020. In light of this Order, the confidential draft version of this decision has been shared with the parties to ensure that the public version does not contain any confidential information that has not been made public. As provided in the Order, any information or documentation covered, that nonetheless was or has become public (for example, because it was filed with the TMOB), is not treated as confidential for the purpose of this Judgment and Reasons.
II. Background: The Application, the Opposition and the TMOB’s Decision
A. The Application
[6] Puma filed application number 1,558,723 for procat on January 5, 2012 based on proposed use of the trademark in Canada in association with “footwear, namely athletic, sports and casual shoes and boots; headgear, namely hats and caps.” The application was advertised on August 8, 2012 in the Trademarks Journal for opposition purposes.
B. Summary of Opposition Proceedings
[7] Caterpillar filed a Statement of Opposition on October 5, 2012. Caterpillar is the owner of the trademarks CAT & Triangle Design (reproduced below), registration number TMA382,234 dated March 29, 1991, and CAT, application number 1,588,026 filed July 30, 2012 (now registration number TMA934,244 dated April 8, 2016), both of which cover goods (and services) including footwear and headgear.
[8] Caterpillar based its opposition on paragraphs 38(2)(b), (c) and (d) of the Trademarks Act, RSC 1985, c T-13 [TMA]. See Annex “A” below for relevant legislative provisions. More specifically, Caterpillar raised the following grounds of opposition:
procat is confusing with Caterpillar’s registered trademark CAT & Triangle Design and, therefore, is not registrable: TMA s 12(1)(d);
Puma is not the person entitled to registration of procat because it is confusing with Caterpillar’s trademarks CAT & Triangle Design and CAT, both of which were previously used or made known by Caterpillar in Canada prior to the filing date of the application for procat: TMA s 16(3)(a);
Puma is not the person entitled to registration of procat because it is confusing with Caterpillar’s trade name CAT which had been used or made known previously by Caterpillar in Canada prior to the filing date of the application for procat: TMA s 16(3)(c); and
procat is not “distinctive”: (as defined in) TMA s 2.
[9] Puma filed a counter statement on December 14, 2012 denying the allegations in Caterpillar’s Statement of Opposition.
[10] Caterpillar filed the affidavit of Kenneth J Beaupre dated April 9, 2013 and the affidavit of Nai Vin Janet Chong dated April 3, 2013 as evidence. Only Mr. Beaupre was cross-examined on his affidavit.
[11] PUMA filed the affidavit of Neil Narriman dated July 23, 2014 and the affidavit of Lesley Gallivan dated July 17, 2014 as evidence. Neither affiant was cross-examined. Caterpillar did not file any reply evidence.
[12] Both parties filed written arguments. An oral hearing was held and both parties were represented. On August 29, 2017, the TMOB, on behalf of the Registrar of Trademarks, issued its decision rejecting Caterpillar’s opposition and allowing the trademark application for procat.
C. TMOB Decision Under Appeal: Caterpillar Inc. v Puma SE, 2017 TMOB 114
[13] The TMOB, on behalf of the Registrar of Trademarks, rejected all grounds of opposition based on paragraphs 12(1)(d), 16(3)(a) and 16(3)(c), and section 2, raised by Caterpillar against Puma’s trademark application for procat. The decision is summarized briefly below.
[14] The TMOB noted the initial evidential burden on Caterpillar, as the Opponent, to provide sufficient admissible evidence in support of its grounds of opposition. Where the Opponent meets its evidential burden, the legal onus is on the Applicant to establish on a balance of probabilities that its application complies with the requirements of the TMA.
[15] The TMOB next summarized the affidavit evidence of both parties and then considered the preliminary issue of whether the use of the Opponent’s marks in Canada by its licensees enured to its benefit, pursuant to the TMA s 50. Subsection 50(1) provides essentially that the use of a trademark by a licensee is deemed use of the mark by the owner, where the owner has, under licence, direct or indirect control of the character or quality of the licensed goods or services.
[16] The TMOB determined that Caterpillar did not have the requisite control to benefit from this deeming provision. The TMOB considered the licensing arrangements Caterpillar had with two of its licensees, Wolverine World Wide Inc. [Wolverine] and Toromont Industries Ltd. [Toromont], and concluded that the focus on packaging and labelling of the goods manufactured, rather than the character or quality of the goods sold in association with Caterpillar’s mark, was evidence of a lack of control. Further, the evidence that Caterpillar’s wholly owned dealers were outside Caterpillar’s direct control suggested a lack of requisite control.
[17] The TMOB also was of the view that the public messaging given by the licensees about the source of the goods, or use of the trademarks under licence, did not point to Caterpillar. Thus, Caterpillar could not benefit from the presumption of controlled licensing, under subsection 50(2) of the TMA, where public notice is given of the fact of licensing and the owner’s identity.
[18] The TMOB turned next to the registrability ground under paragraph 12(1)(d). Having regard to subsections 6(2) and 6(5) of the TMA, and noting the applicable test for confusion as one of first impression and imperfect recollection, the TMOB found that both parties’ marks were inherently distinctive, but there was no evidence the applied for trademark procat has acquired distinctiveness. Regarding Caterpillar’s registered trademark CAT & Triangle Design, the TMOB noted the registration is based on use of the trademark in Canada since at least as early as 1991. Yet there was a lack of documentary support for sales of headgear prior to 2003 and footwear prior to 2011. Referring again to the determination that use by licensees did not enure to Caterpillar’s benefit, the TMOB found that consumers would not necessarily recognize an association between the goods provided by the licensees and Caterpillar. The TMOB did find, however, that Caterpillar’s marks had become better known in Canada than Puma’s mark.
[19] Regarding length of time in use, the TMOB found that this factor favoured neither party significantly, pointing again to the questionable use of Caterpillar’s mark by its licensees.
[20] The TMOB found direct overlap in some of the parties’ goods, and others closely related. Because the channels of trade are not restricted in either Puma’s application or Caterpillar’s registration, the TMOB concluded that the parties’ respective channels of trade could overlap.
[21] Regarding the degree of resemblance, the TMOB held that the first part of procat assists in differentiating the marks, finding that “pro” has no suggestive or laudatory in association with Puma’s goods, and that the ideas suggested by the marks were not similar. The TMOB concluded that Caterpillar’s mark “suggests the idea of a feline animal while the Applicant’s Mark is a coined work without any apparent meaning.”
[22] Regarding surrounding circumstances, the TMOB was not persuaded that consumers would be likely to assume the word mark procat is part of a family of marks involving the design of a jumping cat. The TMOB also held that an owner does not have an automatic right to obtain further registrations regardless of how closely related they may be to the original registration.
[23] Regarding Puma’s state of the register evidence, the TMOB found that 13 differently-owned trademarks involving CAT without a distinctive design element and registered for clothing were a relevant consideration. Together with Puma’s evidence of the use of various product names containing “Cat”, although not necessarily as trademarks, the TMOB was prepared to infer that CAT has been adopted commonly in the marketplace in association with clothing and that consumers are somewhat accustomed to seeing CAT word marks in the clothing trades.
[24] Based on the above, the TMOB concluded there is no reasonable likelihood of confusion between Puma’s trademark procat and Caterpillar’s marks. Relying on its TMA s 12(1)(d) analysis, the TMOB concluded that Caterpillar’s entitlement grounds under the TMA s 16(3)(a) and s 16(3)(c) also were unsuccessful.
[25] Finally, the TMOB addressed Caterpillar’s allegation that Puma’s mark does not distinguish its goods from Caterpillar’s goods. In deciding that neither of Caterpillar’s marks had become sufficiently known in Canada in association with footwear and headgear, the TMOB cited the non-distinctive use by Caterpillar’s licensees. The distinctiveness ground of opposition was also found to be unsuccessful.
III. Issues, Parties’ New Evidence and Standard of Review
A. Issues
[26] Caterpillar now appeals the TMOB’s August 29, 2017 decision, pursuant to the TMA s 56. The likelihood of confusion between Puma’s trademark procat and Caterpillar’s CAT trademarks is in issue in this appeal, along with the distinctiveness of procat. Caterpillar alleges that the TMOB erred in at least three respects: (1) in its analysis of the prefix “pro” in the trademark procat in relation to the inherent distinctiveness of procat and the degree of resemblance between Caterpillar’s and Puma’s marks; (2) in its conclusion regarding the sufficiency of Caterpillar’s control over its licensees; and (3) in drawing inferences of marketplace use based on Puma’s state of the register evidence, without any evidence of actual use.
B. Parties’ New Evidence on Appeal
[27] Both parties filed new evidence in this appeal, further to the TMA s 56(5).
[28] Caterpillar filed:
(a) the Affidavit of Kenneth J. Beaupre dated January 22, 2019, Marketing Manager, Customer Services Support for Marketing & Brand Department - formerly, Retail Business Development Centre - of Caterpillar;
(b) the Affidavit of Onder Ors dated October 26, 2018, Vice President of Sourcing – Heritage Group and Western Hemisphere Sourcing for Wolverine Worldwide, Inc.; and
(c) the Affidavit of David C. Wetherald dated September 7, 2018, former Vice President, Human Resources and Legal, and General Counsel and Corporate Secretary, for Toromont Industries Ltd.
[29] Puma cross-examined Mr. Beaupre, on his second affidavit, on October 22, 2019, Mr. Ors on October 15, 2019 and Mr. Wetherald on November 15, 2019. The transcripts of their cross-examinations form part of the Joint Application Record. Caterpillar’s new evidence is summarized in Annex “B” below.
[30] Puma filed:
(a) the Affidavit of Neil Jafar Narriman dated August 28, 2019, General Counsel – Intellectual Property for Puma; and
(b) the Affidavit of Maria Papadopoulos dated August 27, 2019, Law Clerk employed at Kestenberg Siegal Lipkus LLP.
[31] Caterpillar cross-examined Mr. Narriman on his second affidavit on September 13, 2019. The transcript forms part of the Joint Application Record. Ms. Papadopoulos was not cross-examined on her affidavit. Puma’s new evidence is summarized in Annex “B” below.
C. Standard of Review
(1) General Principles
[32] An appellate standard of review applies where, as in the case before me, there is a statutory right of appeal: Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov] paras 36-37, citing Housen v Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235 [Housen]. Vavilov does not displace the previous jurisprudence regarding new evidence filed with the Federal Court on appeal from a decision of the Registrar, but rather necessitates an adjustment: The Clorox Company of Canada, Ltd. v Chloretec SEC, 2020 FCA 76 [Clorox] at paras 19-23. The starting point is a consideration of whether any new evidence would have affected the TMOB’s decision materially: Clorox, above at para 19.
[33] To be considered “material,” the new evidence must be sufficiently substantial and significant, and of probative value: Clorox, above at para 21, citing respectively Vivat Holdings Ltd v Levi Strauss & Co, 2005 FC 707 at para 27 and Tradition Fine Foods Ltd. v. Groupe Tradition’l Inc., 2006 FC 858 at para 58. “[E]vidence that merely supplements or repeats existing evidence will not surpass this threshold”: Scott Paper Limited v Georgia-Pacific Consumer Products LP, 2010 FC 478 [Scott Paper] at paras 48-49. The test is not whether the new evidence would have changed the Registrar’s mind, but rather whether it would have a material effect on the decision: Scott Paper, above, at para 49. In that regard, quality, not quantity, is key: Vivat Holdings Ltd v Levi Strauss & Co, 2005 FC 707 at para 27.
[34] Further to the TMA s 56(5), a finding of materiality permits the Court to “exercise any discretion vested in the Registrar.” Justice de Montigny noted that this entails an appeal de novo calling for the application of the correctness standard: Clorox, above at para 21, referring to Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov] (and the situations where the presumptive reasonableness standard of review will be rebutted, as summarized at Vavilov para 17). In other words, the Court need not defer to the decision maker’s reasoning process; undertaking its own analysis, the Court may decide whether it agrees with the decision maker’s determinations or whether it will substitute its own views: Dunsmuir v New Brunswick, 2008 SCC 9 at para 50, [2008] 1 SCR 190.
[35] If the new evidence is not material (or if no new evidence is filed), then this is the point at which Vavilov requires an adjustment to the applicable standard: Clorox, above at para 22. Instead of the previous standard of reasonableness, the appellate standard of review applies, with reference to Housen. This means questions of fact or mixed fact and law (except extricable questions of law) will be assessed for “palpable and overriding error.” Palpable means an obvious error, while an overriding error is one that affects the decision-maker’s conclusion; it is a highly deferential standard of review: Mahjoub v Canada (Citizenship and Immigration), 2017 FCA 157 at paras 61-64. Questions of law (including extricable questions of law), on the other hand, will be assessed for correctness according no deference to the conclusions of the underlying decision maker: Clorox, above at para 23; Miller Thomson LLP v Hilton Worldwide Holding LLP, 2020 FCA 134 at para 42.
[36] In sum, I must assess the nature, significance, probative value, and reliability of the parties’ new evidence, in the context of the record, and determine whether it adds “something of significance” and hence, whether it would have affected the TMOB’s decision materially: Seara Alimentos Ltda v Amira Enterprises Inc., 2019 FCA 63 [Seara] at paras 23-26. In other words, would the evidence have enhanced or otherwise clarified the record in a way that might have influenced the Registrar’s conclusions on a finding of fact or exercise of discretion, had it been available at the time of the Decision? Further, even when new evidence is admitted on appeal, this does not necessarily displace the TMOB’s findings in respect of every issue but rather only those issues for which the evidence is provided and admitted: Seara, above at para 22.
(2) Materiality of Parties’ New Evidence
[37] In my view, the dictionary definitions of “pro” evidenced by the Beaupre affidavit are sufficiently significant and probative that they would have affected the TMOB’s decision materially. The TMOB’s findings with regard to the inherent distinctiveness of procat and the degree of resemblance between procat and Caterpillar’s CAT trademarks were influenced by the absence of evidence that “pro” has any suggestive or laudatory connotation in association with Puma’s goods. The absence of such evidence is mentioned specifically in the TMOB’s decision, at paras 51 and 61.
[38] The Supreme Court of Canada has stated that “the usual meaning of words [is] a matter of which a court or a board exercising judicial or quasi-judicial authority may take judicial notice”: Pfizer Co. Ltd. v Deputy Minister of National Revenue, 1975 CanLII 194 (SCC), [1977] 1 SCR 456 at 463. In the case before me, however, the TMOB chose not to take judicial notice. Further, this Court has held that “[w]hile the Board is entitled to take judicial notice of dictionary definitions of words found in trade-marks, it is not entitled to take judicial notice of a single meaning without evidence”: McDowell v Laverana GmbH & Co. KG, 2017 FC 327 [McDowell] at para 36. Because of the TMOB’s focus on the absence of evidence regarding the meaning of “pro,” I am satisfied that the definitions provided by the Applicant in the matter before me would have had a material effect on the TMOB’s decision.
[39] I further am satisfied that the Beaupre, Ors and Narriman affidavits and cross-examinations introduce sufficiently significant and probative evidence regarding the TMOB’s confusion analysis under subsection 6(5) of the TMA, as well as the entitlement and distinctiveness determinations, that a de novo or correctness review is warranted, except in respect of paragraphs 6(5)(c) and 6(5)(d) of the TMA and the surrounding circumstance of Puma’s alleged family of trademarks. Because the test for confusion is determined on a balance of probabilities, in my view their new evidence could have factored materially into the TMOB’s assessments regarding controlled licensing (including public messaging), the likelihood of confusion and distinctiveness.
[40] I am not persuaded that the Wetherald affidavit necessarily would have had a material effect on the TMOB’s decision, at least in so far as its consideration of the TMA s 50(2) is concerned. The circular or nonsensical legal statement, that appears to indicate Toromont licensed itself, was not changed until 2017 to a form of legal statement that identified Caterpillar Inc. as the owner of the trademarks CAT, CATERPILLAR and their respective logos. Because the TMOB’s decision issued in 2017, in my view it is highly unlikely that the TMOB could have taken this change into account. Caterpillar thus could not have benefitted from the presumption of controlled licensing that arises when the condition stipulated in the TMA s 50(2) is met (i.e. public notice of the fact of licensed use and the identity of the trademark owner).
[41] On the other hand, the question of whether there in fact was direct or indirect control under licence sufficient to meet the requirements under the TMA s 50(1) for the licensee’s use to be deemed use by the owner, could have been influenced materially in my view by the Wetherald evidence. Further, because I undertake a correctness review of this matter below, and because, in the circumstances, the relevant date for assessing the registrability of procat under the TMA s 12(1)(d) is the date of my decision, I find that the Wetherald affidavit nonetheless is material and relevant to my analysis of this ground of opposition.
[42] I also am not persuaded that the Papadopoulos affidavit would have had a material effect on the TMOB’s decision, nor more significantly, that it is necessary and reliable, and hence admissible. First, Ms. Papadopoulos did not conduct the search herself to update the Gallivan affidavit. Rather, she describes that the search was conducted by a lawyer at the same firm she was employed, and she describes information that he provided and she believes. There is no explanation, however, of why the lawyer was unavailable to swear the affidavit himself. Further, the additional trademarks located in the update search involve pending applications filed after 2017, and applications allowed or registered after 2017, when the TMOB’s decision issued. I therefore find the Papadopoulos affidavit on the whole inadmissible.
IV. Analysis
A. Section 50: Controlled Licensing
[43] Because the section 50 determinations have a bearing on the confusion and distinctiveness analyses, I address the issue of controlled licensing as a preliminary matter as did the TMOB. Although I consider this issue through the correctness lens, in my view the TMOB made palpable and overriding errors in assessing whether the licensed use of the CAT trademarks in Canada by Caterpillar’s licensees enured to its benefit. I find that the new Beaupre and Ors affidavits support the conclusion that Caterpillar satisfied the requirements of both subsections 50(1) and 50(2) of the TMA and thus, such use enured to Caterpillar’s benefit.
[44] In connection with its consideration of subsection 50(1) of the TMA, the TMOB found that “the use of the marks by Wolverine and Toromont [is] evidence that control over the character and quality of the goods by the Opponent was deficient and consequently such use did not enure to the benefit of the Opponent”: 2017 TMOB 114 at para 40. The “use” to which the TMOB referred is two-fold. First, it is a reference to the statement in the “The CAT Fall 2000 Buyer’s Guide” that points to Wolverine Canada as responsible for the quality of the products it sells in terms of workmanship and materials. Second, it is a reference to the pre-2017 Legal Statement on Toromont’s website that appears to suggest Toromont licensed itself.
[45] I find the new Beaupre and Ors affidavits demonstrate that the Buyer’s Guide statement is mandated by the trademark merchandise license agreement. Further, the statement is not inconsistent with the control measures Caterpillar has put in place regarding the three-way agreements among Caterpillar, the trademark merchandise licensees and the factories, as well as in the license agreements regarding the product quality reviews at the concept, pre-production and post-production stages.
[46] That a licensee provides a guarantee about the Caterpillar licensed CAT footwear it sells, is not inconsistent in my view with the demonstrated controls Caterpillar exercises at the front end of the manufacturing process and at other stages (as described below), nor the licensee’s responsibility for any quality defects that are detected at the back end. That defects may occur notwithstanding quality controls does not translate, in my view, to deficient control by Caterpillar or detract from the overall character or quality of the licensed CAT footwear, especially absent any evidence about the occurrence or extent of defects.
[47] In addition, as Mr. Ors testified, the Buyer’s Guides are for retailers and do not get in front of consumers, unless the retailer chooses to do so. There is no evidence of how widely circulated the Buyer’s Guides are, either among retailers or their customers, or even that they in fact have been distributed to the latter.
[48] I further note that an unclear or uncertain message to the public is not necessarily fatal to finding controlled licensing: Michaels v Unitop Spolka Z Organiczona Odpowiedzialnoscia, 2020 FC 937 [Michaels] at para 13. Although the Toromont legal statement did not point to Caterpillar prior to 2017, it was corrected which will have a positive impact on my confusion analysis in connection with the registrability ground. Further, the Wetherald affidavit attests that Toromont acquires CAT merchandise from Caterpillar’s trademark merchandise licensees, including Wolverine for footwear. In my view, the evidence supports the conclusion that Toromont acts as a distributor of CAT merchandise (i.e. footwear and headgear) manufactured by others; it does not manufacture such goods itself. In other words, Toromont technically does not appear to be using the trademarks with goods within the meaning of the TMA s 4 when it sells already manufactured CAT merchandise that it sources from Caterpillar’s trademark merchandise licensees.
[49] The TMOB further found that “Mr. Beaupre’s statement that the Opponent’s dealers are wholly owned dealers outside of the Opponent’s direct control suggests to me that the Opponent does not in fact have direct/indirect control over the care/quality of the goods sold in association with the Opponent’s marks”: 2017 TMOB 114 at para 40.
[50] This is not the test, however, of whether there is control of the sort contemplated by the TMA s 50(1). Whether the licensees are wholly owned dealers does not determine whether the owner has direct or indirect control over the character or quality of the licensed goods. Nor is there a requirement under subsection 50(1) that the licensee give public notice of the owner of the trademark; that is a requirement to satisfy subsection 50(2). That said, the presumption of controlled licensing arises only if the owner chooses to provide publically or to authorize the public provision of the specific information stipulated in the latter legislative provision. The TMA does not mandate, however, that such information must be provided; in other words, whether the owner provides the information is voluntary, as I previously have held: Michaels, above at para 12.
[51] I find that the TMOB, thus, conflated subsections 50(1) and 50(2) in its reasons by focusing on the statements by the licensees, when it considered whether Caterpillar in fact had the requisite control, to the exclusion of other relevant evidence. Stating that the use of the marks by Wolverine and Toromont was insufficient evidence of control under subsection 50(1) in my view was misplaced, and at the very least, was a palpable and overriding error.
[52] I further find that the test of whether the trademark owner has sufficient control for the purposes of the TMA s 50(1) can be met in one of three, alternative ways, namely, the owner can: (i) attest that it exerts the requisite control (i.e. directly or indirectly); (ii) provide evidence demonstrating that it does so; or (iii) provide a copy of the licence agreement that explicitly provides for direct or indirect control of the character or quality of the licensed goods: Empresa Cubana Del Tabaco Trading v. Shapiro Cohen, 2011 FC 102 [Empresa] at para 84.
[53] In my view, Caterpillar’s evidence before the TMOB satisfied the first enumerated manner for meeting the test of sufficiency of control under the TMA s 50(1). I find that Caterpillar’s new evidence also satisfies the second and third possible ways of meeting the test. In particular, Caterpillar’s new evidence, in the form of the second Beaupre affidavit and Ors affidavit, and their cross-examinations, demonstrate that:
- pursuant to the trademark merchandise license agreements, licensees are not only required but do submit concept, pre-production and post-production samples of the licensed merchandise and are trained by Caterpillar’s team of review analysts on this process, as well as on the use of the trademarks;
- when Wolverine updates its quality standards, it shares them with Caterpillar to seek its approval; further, Caterpillar exerts control by asking for Wolverine’s policies and standards for review;
- Caterpillar certifies or approves the factories selected by the licensees and enters into three-way agreements among itself, the licensee and the certified factory;
- licensees such as Wolverine undertake various steps to control the quality of licensed goods which is overseen by Caterpillar (and not inconsistent, in my view, with indirect control at a minimum), such as quality processes and controls for manufacturing, including product inspections, testing requirements, and acceptable quality level standards; and
- Caterpillar’s role in ensuring that products that come from its licensees meet its expectations, including for quality and positioning.
[54] The TMOB acknowledged that Caterpillar’s trademark license agreements require all Caterpillar licensed merchandise to be identified by the circular licensed merchandise logo (reproduced in paragraph 8 of Annex “B” below), as attested by Mr. Beaupre in his earlier affidavit, but does not appear to have assessed the logo for compliance with the TMA s 50(2) in light of its findings regarding the Buyer’s Guide statement. Further, the Chong affidavit before the TMOB evidenced the use of this logo on several sample CAT footwear products (specifically, on the inside of the tongue) that Ms. Chong purchased from Wolverine via the www.catfootwear.com website. I find that the Ors affidavit closes an evidentiary gap by attesting that the licensed merchandise logo is always included on CAT footwear sold by Wolverine in Canada.
[55] I note the Chong affidavit also evidenced the use of the logo on several sample CAT headwear products, including baseball-style caps and toques (specifically on the inside tag or label) that Ms. Chong purchased from www.catmerchanise.com, www.shopcaterpillar.com, www.boutiquecat.ca, and www.heavydutygear.ca.
[56] I thus find that the licensed merchandise logo conveys the message that the CAT merchandise is licensed (i.e. at a minimum, sold under licence) in association with the trademark CAT & Triangle Design incorporated in the logo, and it provides the identity of the trademark owner, Caterpillar Inc. In my view, Caterpillar has complied with the requirements of the TMA s 50(2) and is entitled to the presumption of controlled licensing.
[57] For the above reasons, I conclude that Caterpillar’s new evidence demonstrates its compliance with the requirements of the TMA s 50(1), including with regard to the controlled licensing presumption that arises under the TMA s 50(2), and thus, the use of the licensed CAT trademarks by its licensees, including Wolverine, enures to Caterpillar’s benefit.
B. Paragraph 12(1)(d): Registrability
[58] Pursuant to paragraph 12(1)(d) of the TMA, a trademark is registrable if it is not confusing with a registered trademark. The material date for assessing confusion under this provision is the date of the decision of the trier of fact, whether the Registrar or the court as the case may be: Park Avenue Furniture Corp. v Wickes/Simmons Bedding Ltd. (1991), 37 CPR (3d) 413 [Park Avenue] at 424. Because I find the parties’ new evidence material, the applicable relevant date is the date of this Court’s decision. Although such date falls well after June 17, 2019 when significant amendments to the TMA came into force, the amendments to the TMA s 12, in my view, have little if any impact on the registrability analysis under the TMA s 12(1)(d).
[59] As a preliminary matter, I note that Caterpillar’s Statement of Opposition filed on October 5, 2012 relies only on registration number TMA382,234 for CAT & Triangle Design in connection with this registrability ground of opposition. Caterpillar’s then pending trademark application number 1,588,026 for CAT (which Caterpillar asserted in connection with the entitlement ground under paragraph 16(3)(a) of the TMA) issued to registration on April 8, 2016 under number TMA934,244. The Statement of Opposition was not amended, however, to allege non-registrability also in respect of the latter registration. I thus review this ground only in respect of registration number TMA382,234 for CAT & Triangle Design.
[60] Subsection 6(2) of the TMA provides that the use of a trademark causes confusion with another trademark if the use of both trademarks in the same area would likely lead to the inference that the goods (or services) associated with those trademarks are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.
[61] I find an apt formulation of the test to be applied in assessing the likelihood of confusion in this case to be this. As a matter of first impression, would the casual consumer, somewhat in a hurry, who sees a good bearing Puma’s trademark procat, when that consumer first encounters such trademark in the marketplace, and where the consumer has no more than an imperfect recollection of Caterpillar’s trademark CAT & Triangle Design and does not pause to give the matter any detailed consideration or scrutiny, be likely to be confused as to the source of the goods?: Veuve Clicquot Ponsardin v Boutiques Cliquot Ltée, 2006 SCC 23 [Veuve] at para 20; Masterpiece Inc. v Alavida Lifestyles Inc., 2011 SCC 27 [Masterpiece] at para 87; Reynolds Presto Products Inc. v PRS Mediterranean Ltd., 2013 FCA 119 [Reynolds] at para 20. In other words, would the casual consumer believe that the goods associated with procat and CAT & Triangle Design respectively were authorized, licensed, manufactured or sold by the same person, that is, by Caterpillar?
[62] Subsection 6(5) of the TMA enumerates the following specific factors to be considered in the confusion analysis, in the context of “all the surrounding circumstances”:
(a) the inherent distinctiveness of the trademarks or trade names and the extent to which they have become known;
(b) the length of time the trademarks or trade names 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 or trade names in appearance or sound or in the ideas suggested by them.
[63] These factors are not exhaustive, and may be weighed differently, in a context-specific assessment; the onus is on Puma in this case to demonstrate no likelihood of confusion on a balance of probabilities: Mattel Inc v 3894207 Canada Inc, 2006 SCC 22 at para 54. The degree of resemblance, however, “is the statutory factor that is often likely to have the greatest effect on the confusion analysis”: Masterpiece, above at para 49. This factor involves a consideration of the totality of the trademarks, but the “first impression, imperfect recollection” test means that the trademarks must not be assessed side by side. In addition, resemblance has been defined as “the quality of being either like or similar”: Masterpiece, above at para 62.
[64] It is a long-standing tenet of trademarks law in Canada that the first element of the trademark often is the most important, for the purposes of distinctiveness (Conde Nast Publications Inc v Union des éditions modernes (1979), 46 CPR (2d) 183 at 188 (FCTD)). A preferable approach to assessing the degree of resemblance has emerged, however, and this is to consider whether there is an aspect of the trademark that is striking or unique: Masterpiece, above at para 64. This approach recognizes that trademarks with some differences still may result in likely confusion: Masterpiece, above at para 62.
[65] The lack of appreciable difference between the goods also is an important consideration that must be weighed with the other factors including, most importantly, the degree of resemblance between the marks: Reynolds, above at paras 17 and 29. That said, there is “a greater likelihood of confusion if two trade-marks that resemble each other are used in association with the same products (or substantially the same products)”: Reynolds, above at para 30.
[66] With these principles in mind, I turn to a consideration of the enumerated subsection 6(5) factors, as well as the applicable surrounding circumstances.
(a) Inherent Distinctiveness and Extent Known
[67] In my view, the TMOB’s finding that Caterpillar’s trademark CAT & Triangle Design possesses a high degree of inherent distinctiveness because the word CAT has no relation to footwear and headwear is correct and I see no need to adopt a different conclusion. I also do not disagree that the applied for trademark procat “is a coined word comprised of components which typically do not appear together”: 2017 TMOB 114, at para 51.
[68] That said, I find the dictionary definitions of “pro” (meaning predominantly either “in favour of” or “professional,” according to the dictionary definitions introduced in evidence by the second Beaupre affidavit) lend a suggestive or laudatory connotation to procat. In particular, although Puma’s evidence (i.e. the second Narriman affidavit) is that procat was conceived as a sub-brand to differentiate youth accessories from Puma’s other products and “to embody the spirit of PUMA,” in my view the connotation of “professional” suggested by the prefix “pro” is not inconsistent. The first Narriman affidavit in evidence before the TMOB points to Puma’s association with elite or “professional” athletes such as the famous Brazilian footballer Pelé, the late, great Argentine footballer Diego Maradona, the tennis pros Boris Becker and Serena Williams, to name but a few. As Puma admitted at the hearing of this matter before me, it is no secret that professional athletes are part of Puma’s brand. It therefore is conceivable, in my view, that such a connotation could be attractive to the target youth market for procat products. Alternatively, the meaning “in favour of” (i.e. in the sense of favourable or preferred products or source of the goods) also appears apt in the circumstances.
[69] I thus am prepared to find that the prefix “pro” in procat has significance in relation to Puma’s goods, thus shifting the focus of inherent distinctiveness assessment to the more striking feature of the trademark, namely, the suffix “cat.”
[70] In light of my findings regarding the TMA s 50 above, I find that the extent to which the trademarks at issue have become known or acquired distinctiveness clearly favours Caterpillar. The Ors affidavit substantiates sales of CAT footwear by Wolverine in Canada under licence since 1994 and unit sales since then until 2017 have been substantial. Notwithstanding the pre-2017 legal statement, the Wetherald affidavit evidences sales of both CAT footwear and headgear in Canada as early as 2000 under Caterpillar’s control, with fairly substantial sales from then until 2017.
[71] Further, Mr. Wetherald attests that the CAT merchandise is acquired from Caterpillar’s trademark merchandise licensees; in other words, Toromont itself does not produce the goods. This is confirmed as well by the first Beaupre affidavit before the TMOB which attests that Caterpillar’s trademark merchandise licensees are licensed by Caterpillar for promotional sales, r