3469051 Canada Inc. v. Axis Heating and Air Conditioning Inc.

3469051 Canada Inc. v. Axis Heating and Air Conditioning Inc.
Court (s) Database
Federal Court Decisions
Date
2019-08-27
Neutral citation
2019 FC 1103
File numbers
T-2532-14
Decision Content
Date: 20190827
Docket: T-2532-14
Citation: 2019 FC 1103
[UNREVISED CERTIFIED ENGLISH TRANSLATION]
Ottawa, Ontario, August 27, 2019
PRESENT: The Honourable Mr. Justice Roy
BETWEEN:
3469051 CANADA INC.
Plaintiff
and
AXIS HEATING AND
AIR CONDITIONING INC.
Defendant
JUDGMENT AND REASONS
[1] The plaintiff, 3469051 Canada Inc., owner of the registered trademark AXXYS, is taking legal action against the defendant, Axis Heating and Air Conditioning Inc. [“Axis”], alleging that the latter is violating its trademark rights and engaging in unfair competition, contrary to sections 20 and 7 of the Trademarks Act, RSC, 1985, c T-13 [the Act].
[2] The plaintiff is seeking the following remedies:
a declaration that its mark is valid and that its rights to the exclusive use thereof have been violated;
a permanent injunction against Axis, ordering it to cease and desist from infringing the plaintiff’s rights by using the trademark or the trade name “Axis Heating and Air Conditioning Inc.”, or any other such trademark or trade name causing confusion with AXXYS, i.e., confusion between “AXXYS” and “Axis”;
an order instructing Axis to turn over all items under its control bearing:
the word “Axis”, alone or together with other words or symbols;
any other confusing trademark or trade name;
the destruction of these items at the defendant’s expense, or by the defendant itself, if it so chooses;
damages or, at the plaintiff’s option, an amount of money representing unlawfully derived profits;
punitive damages;
an order declaring that Axis has infringed the plaintiff’s intellectual property rights, thereby violating section 6 of the Charter of Human Rights and Freedoms and section 53.2 of the Act.
I. The parties to the action
[3] The fact that the plaintiff is a corporation incorporated under the laws of Canada, having its head office at 9630 Saint-Laurent Boulevard in Montréal, is not in dispute. Also not in dispute is the fact that it makes extensive use of its registered trademark. The defendant, for its part, is a corporation incorporated under the Ontario Business Corporations Act, RSO 1990, c B.16); its elected domicile is in Ottawa. The defendant is significantly smaller and is known by its trade name, which of course includes the use of the word “Axis”.
II. The trademark
[4] The trademark AXXYS was registered under the number TM 759,387 in February 2010; the plaintiff has been using it since 1998. The trademark was registered in connection with:
Construction services, namely, residential and commercial building, building and site development, planning in the field of construction, cost and project management in the field of construction; demolition services; consulting services in the field of construction, demolition, building materials, moulds, asbestos, lead and heavy metals, environmental engineering, construction engineering, building management; contracting services, namely building construction.
As for the defendant, its operational activities, which consist of installing heating and air conditioning systems (as well as maintaining and repairing these systems), are limited to the residential sector.
III. The allegations
[5] The plaintiff cites the fact that it has been building its mark since February 1998; it has become renowned for the quality of the services that it offers and has established an enviable reputation. The trademark is used consistently and constantly, and a website bearing this mark was set up: axxysconstruction.com:
[6] The plaintiff therefore claims that the goodwill created as a result of its mark and the publicity/advertising thereof is a key asset of the company.
[7] According to the plaintiff, this action concerns sections 7, 19, 20 and 22 of the Act. The plaintiff submits that the services offered by Axis Heating and Air Conditioning Inc. are related to the services that it offers. The defendant’s trade name is confusing with the plaintiff’s mark since consumers may believe that Axis Heating offers services that originate from the plaintiff, that Axis Heating uses the mark AXXYS with the plaintiff’s authorization, or that the two parties share common characteristics. The plaintiff adds that it is called upon to incorporate heating and/or air conditioning systems into the construction projects that it manages (statement of claim, para 15).
[8] The plaintiff is also alleging unfair competition, in that the actions of Axis Heating and Air Conditioning Inc. [translation] “are likely to interfere with the plaintiff’s commercial activities or detract from its image and reputation” (statement of claim, para 19).
[9] The plaintiff is claiming damages or disgorgement of profits, but the extent of the claim is imprecise because the plaintiff states that it has no knowledge of the scale of the defendant’s activities. The plaintiff is also seeking $50,000 in punitive damages.
[10] In its defence, the defendant states that it is a family-owned company with just a few employees involved in the sale, installation and repair of heating equipment, air conditioners and humidifiers in the residential sector in the region of Ottawa, Ontario, and Gatineau, Quebec.
[11] The defendant emphasizes the fact that the parties operate in different markets, both in terms of clientele and the type of products sold (general contractor or project manager versus a retail installer).
[12] Axis also denies any resemblance between its trade name and the trademark “AXXYS” causing confusion. Each conveys a different idea, “Axis” being a common word without any inherent distinctiveness. In fact, “Axis” is inseparably used in conjunction with the word “heating” in a specific sector, residential heating and cooling.
[13] Lastly, Axis Heating denies engaging in unfair competition with the plaintiff.
IV. The evidence
A. The plaintiff
[14] The evidence presented by the plaintiff at trial was based exclusively on the testimony of Ilan Reich, the vice-president of 3469051, and considerable documentary evidence.
[15] Mr. Reich, an engineer by training, is one of the founders of the company he presents as AXXYS Construction. This company now includes numerous corporate entities which, according to him, are related. The group has therefore expanded over the years, becoming a project developer, as well as project manager, builder and prime contractor.
[16] The trademark AXXYS has been used since 1998. Right from the outset, it has been identified with its product and the quality thereof. Its name is synonymous with quality. For AXXYS, this is a key element of the marketing strategy pursued since the company was created.
[17] The company has expanded to the point that it has more than 100 employees in Canada, in addition to so-called “seasonal” employees. This expansion has been in the form of projects outside Quebec, with forays into the United States, where the company maintains an office (in Minneapolis, Minnesota). My understanding of the testimony is that the construction industry has its complexities, with rules which may vary from province to province and from state to state. Nevertheless, the witness informed the Court that revenues totalled 100 million dollars (although it is not clear to which of the companies this figure refers, besides maybe 3469051).
[18] The plaintiff does business in both commercial and residential construction. It is therefore involved in typical commercial projects such as the construction and renovation of commercial spaces and shopping centres. The plaintiff has also received contracts from government agencies, such as one for the border crossing at Lacolle, Quebec, and another for the Office municipal d’habitation de Montréal. Another area of activity is residential construction. In this regard, the witness appears to consider residential construction as construction activities conducted on the basis of a contract with a single person as well as those involving major projects, where construction concerns a considerably higher number of residential units. Mr. Reich testified that, in his view, each of these units consisted of the construction and the sale of individual residential units, individually. He stated that he was involved in each one. This is how residential homes come into play, where the reputation of the company is at stake for each and every one. That is why it is important for the company to be able to differentiate and distinguish itself with a distinctive mark.
[19] The witness submitted a considerable amount of documentary evidence concerning contracts concluded with the plaintiff since 2000. There is no doubt that the commercial activity predominates; however, activities of a residential nature cannot be denied. Furthermore, the Régie du bâtiment du Québec’s licence holders’ repertory issues licences for classes or subclasses of contractors involved in activities claimed by the plaintiff, thereby attesting to its incorporation of air conditioning and/or heating systems into the construction projects it managers (Exhibit P-5):
15.7 Residential Ventilation
15.8 Ventilation
15.10 Refrigeration
The plaintiff holds such a licence. Therefore, the plaintiff is also a specialized contractor in the sense that it is [translation] “authorized to bid on, organize, coordinate, perform or delegate performance of the construction work included” in these classes (Exhibit P-5).
[20] Lastly, the witness filed an entire series of photographs in evidence, demonstrating that the mark AXXYS is featured as often as possible on uniforms, trucks, work sites or promotional objects. Several items evidencing recognition were also presented to demonstrate the company’s success. It continues to make its mark through the advertising in certain magazines and a website intended to depict the image of the company, which the witness distinguished from the image presented by Axis (Exhibit P‑20).
[21] On cross-examination, emphasis was placed on the different forms of corporate entities used for the promotion, sale and construction of commercial and residential properties. This revealed that 3469051 also does business with related companies, in addition to having other types of clients, of course. It was also established that the witness used the term [translation] “residential” to refer to work performed for projects where the ultimate goal was to provide homes for people, as opposed to work performed for commercial purposes. Consequently, the witness repeatedly stressed a highly personalized approach to doing business, whereby the end client must be satisfied. This is consistent with the branding that the plaintiff seeks to promote, irrespective of the various legal forms adopted. Ultimately, AXXYS is always the trademark used.
B. The defendant
[22] In defence, Samuel Corbeil testified about the evolution of the company that he founded and had left relatively recently. When 3469051 Canada Inc. commenced legal proceedings against the company, he was its shareholder and director.
[23] The company had modest beginnings; its current corporate form (Axis Heating and Air Conditioning Inc.) was launched in February 2012. Prior to that, Mr. Corbeil had done business under the name “Axis Heating”, registered in Ontario since 2004.
[24] The defendant targets residential clients exclusively. Since 2004, initial clients have been solicited by placing advertising material in letterboxes in areas around Ottawa which Mr. Corbeil believed would be receptive to buying and installing furnaces and air conditioning systems. The range of products was then expanded to humidifiers and water heaters. Mr. Corbeil, on behalf of the defendant, described his company as being involved in installing warm air heating systems, natural gas burner systems and small refrigeration systems in residential homes. Mr. Reich instead defined his larger-scale residential activities in terms of the ultimate recipient. Construction work on a single home, although demonstrated, was less frequent. Therefore, even when the plaintiff renovated a hotel to transform it into a rental property where the developer planned to rent out the renovated apartments, the related activities were described as residential. The distinction made resides in the fact that the recipient would be different than it would be for work performed for retail shops, for example.
[25] The defendant is a small-scale operation and does business with the owner of the residence. The plaintiff carries out construction work, either directly or as a project manager, but on a significantly larger scale, even though it accepts more modest clients from time to time. We are talking about construction on a much larger scale requiring work related to heating and cooling systems, but as a sideline in relation to the contract awarded.
[26] A manifestation of the difference was also highlighted by the evidence presented by the plaintiff in response to an undertaking by the plaintiff’s corporate witness to provide [translation] “copies of contracts for single-family residential properties, buildings with up to four units and townhouses, from 2004 to date”. The plaintiff chose to provide only a list of contracts, from 2004 to 2016 (tab 12) and not the contracts themselves. This list includes contracts which cannot really satisfy the undertaking because the projects concerned can only be commercial projects. In most of the cases which could perhaps qualify as involving private residences, the list does not identify the client.
[27] When it came time to respond to another undertaking requiring the disclosure of [translation] “copies of contracts under which Canada Inc. installed individual air conditioning systems, from 2008 to date”, the contracts were once again not provided, but the submitted list included only two entries, neither of which could be associated with private individuals requiring individual air conditioning: Office municipal d’habitation de Montréal for a low-rental housing project, and a ventilation system at a border crossing. This was certainly not the niche cultivated by the defendant, who works for owners of individual residences within a 45-km radius of Ottawa, in Quebec and Ontario, but overwhelmingly in Ontario.
[28] The evidence reveals that the use of the defendant’s trade name has evolved over time, from 2004 to date. It is admitted that the defendant uses and has used Axis Heating, Axis Heating and Air Conditioning and variations thereof, operating the website Axisheating.com. The evidence also reveals that a copyright was obtained in 2004 for Axis Heating (Exhibit D-9, p 9) and another in 2014 for Axis Heating and Air Conditioning Inc. (Exhibit D-9, p 199).
[29] In addition to placing advertising material in letterboxes in residential neighbourhoods, the defendant advertised its trade name. Mr. Corbeil stated that he wanted the name of the company to be known.
[30] This is how he explains the initial appeal of Axis Heating. However, there is no doubt that Mr. Corbeil wanted to prioritize the use of “Axis” because it was easy and comes at the beginning of the alphabet. He was simply trying to allude to the axes used in mathematics. Its use in conjunction with the word “heating” was because the product (furnaces) was not to be overlooked: the client has to know what product is being offered. The logo was also designed with this same perspective in mind:
The logo was used for all forms of advertising or promotional activities. Like Mr. Reich, the witness dwelled on the importance of the trade name that he had selected.
Marianne Michaud is currently the defendant’s chief executive officer. She testified about the kind of company that the defendant is. The company is small. It installs furnaces as well as air conditioning systems and now also installs humidifiers and water heaters whose value does not appear to exceed a few thousand dollars. It also provides maintenance services for such systems, and the price of such services cost is very often less than $100. Its clientele is made up of home owners; the number of employees varies between four and seven. Annual sales range from $450,000 to $550,000, and the company earns a net profit of between $30,000 and $40,000, once salaries are paid. All plans to expand the business, if possible, are currently on hold as a result of the dispute between the parties.
V. Analysis
[31] The parties had indicated that the subject-matter of this dispute is the confusion alleged by the plaintiff relating to the use of its trademark AXXYS versus the defendant’s use of Axis Heating as a trademark and Axis Heating and Air Conditioning Inc. as its trade name. As Mr. Corbeil pointed out, it is important to use Axis Heating so that the consumer is aware of the product being offered. Moreover, the word “Axis” is prominently featured everywhere that the mark is used.
[32] There is no doubt that the parties have paid special attention to their trademark and trade name. That is not surprising. It is also not surprising that, from the plaintiff’s point of view, AXXYS must not be confused with other marks, especially since the evidence at trial indicated that the plaintiff had developed its mark with a view to establishing a strong brand image. Therefore, the issue for the Court is determine, based solely on the evidence presented, whether the balance of probabilities favours the plaintiff. Following an in-depth review of the record, the Court must allow the claim on the basis of the evidence presented by each of the parties.
[33] The analysis is guided by the Act. The plaintiff is claiming rights under sections 20 and 7 of the Act. Section 20 protects trademarks, like AXXYS, from being confused with another trademark or trade name. I will reproduce paragraph 20(1)(a) here, which is particularly relevant:
20 (1) The right of the owner of a registered trademark 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 trademark 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;
The plaintiff also relies on subsection 7(b):
7 No person shall
7 Nul ne peut :
(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another;
b) appeler l’attention du public sur ses produits, ses services ou son entreprise de manière à causer ou à vraisemblablement causer de la confusion au Canada, lorsqu’il a commencé à y appeler ainsi l’attention, entre ses produits, ses services ou son entreprise et ceux d’un autre;
[34] The confusion being referenced is also addressed by the Act. Therefore, it is important to determine whether the trademarks are such that they are likely to lead to the inference that the goods or services are offered by the same person, irrespective of whether they are of the same general class. The text of subsection 6(2) reads as follows:
6 (2) The use of a trademark causes confusion with another trademark if the use of both trademarks in the same area would be likely to 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 or appear in the same class of the Nice Classification.
6 (2) L’emploi d’une marque de commerce crée de la confusion avec une autre marque de commerce lorsque l’emploi des deux marques de commerce dans la même région serait susceptible de faire conclure que les produits liés à ces marques de commerce sont fabriqués, vendus, donnés à bail ou loués, ou que les services liés à ces marques sont loués ou exécutés, par la même personne, que ces produits ou services soient ou non de la même catégorie générale ou figurent ou non dans la même classe de la classification de Nice.
[35] A reading of subsection 6(2) could have resulted in a certain ambiguity, which the Supreme Court of Canada dispelled in Masterpiece Inc. v Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 SCR 387 [Masterpiece]. Subsections 6(2), (3) and (4) use the same formula by comparing the use of the two trademarks or commercial names “in the same area”. This could have left some people with the impression that the trademarks and trade names had to be used in the same area, which area would then have to be defined. This would also have been contrary to the protection provided for registered trademarks under the Act, which gives the owner of the mark “the exclusive right to the use throughout Canada of the trademark in respect of those goods or services” (section 19). The meaning of subsection 6(2) was instead explained as follows in Masterpiece:
[30] It is immediately apparent from these words, “if the use of both . . . in the same area”, that the test for confusion is based upon the hypothetical assumption that both trade-names and trade-marks are used “in the same area”, irrespective of whether this is actually the case. As a result, geographical separation in the use of otherwise confusingly similar trade-names and trade-marks does not play a role in this hypothetical test. This must be the case, because, pursuant to s. 19, subject to exceptions not relevant here, registration gives the owner the exclusive right to the use of the trade-mark throughout Canada.
[31] In order for the owner of a registered trade-mark to have exclusive use of the trade-mark throughout Canada, there cannot be a likelihood of confusion with another trade-mark anywhere in the country.
[36] Consequently, there is no argument to be made based on the fact that the defendant does business exclusively in the National Capital Region, while the plaintiff started its business operations in the Montréal area and has subsequently expanded since then, but without actually moving into the territory served by the defendant for the time being.
[37] The case law has defined from whose perspective an allegation of confusion will be examined. The Supreme Court of Canada placed the consumer somewhere between the “careful and diligent purchaser” and the “moron in a hurry” in Mattel, Inc. v 3894207 Canada Inc., 2006 SCC 22, [2006] 1 SCR 772 [Mattel]:
56 What, then, is the perspective from which the likelihood of a “mistaken inference” is to be measured? It is not that of the careful and diligent purchaser. Nor, on the other hand, is it the “moron in a hurry” so beloved by elements of the passing-off bar: Morning Star Co-Operative Society Ltd. v. Express Newspapers Ltd., [1979] F.S.R. 113 (Ch. D.), at p. 117. It is rather a mythical consumer who stands somewhere in between, dubbed in a 1927 Ontario decision of Meredith C.J. as the “ordinary hurried purchasers”: Klotz v. Corson (1927), 33 O.W.N. 12 (Sup. Ct.), at p. 13. See also Barsalou v. Darling (1882), 9 S.C.R. 677, at p. 693. In Delisle Foods Ltd. v. Anna Beth Holdings Ltd. (1992), 45 C.P.R. (3d) 535 (T.M.O.B.), the Registrar stated at pp. 538-39:
When assessing the issue of confusion, the trade marks at issue must be considered from the point of view of the average hurried consumer having an imperfect recollection of the opponent’s mark who might encounter the trade mark of the applicant in association with the applicant’s wares in the market-place.
And see American Cyanamid Co. v. Record Chemical Co., [1972] F.C. 1271 (T.D.), at p. 1276, aff’d (1973), 14 C.P.R. (2d) 127 (F.C.A.). As Cattanach J. explained in Canadian Schenley Distilleries, at p. 5:
That does not mean a rash, careless or unobservant purchaser on the one hand, nor on the other does it mean a person of higher education, one possessed of expert qualifications. It is the probability of the average person endowed with average intelligence acting with ordinary caution being deceived that is the criterion and to measure that probability of confusion the Registrar of Trade Marks or the Judge must assess the normal attitudes and reactions of such persons.
The Court reaffirmed this position in Masterpiece, which discusses the test of first impression, referring to Veuve Clicquot Ponsardin v Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 SCR 824 [Veuve Clicquot], the companion decision to Mattel rendered that same day. Paragraphs 40 and 41 of Masterpiece read as follows:
[40] At the outset of this confusion analysis, it is useful to bear in mind the test for confusion under the Trade-marks Act. In Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824, Binnie J. restated the traditional approach, at para. 20, in the following words:
The test to be applied 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] trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks.
Binnie J. referred with approval to the words of Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192, at p. 202, to contrast with what is not to be done — a careful examination of competing marks or a side by side comparison.
[41] In this case, the question is whether, as a matter of first impression, the “casual consumer somewhat in a hurry” who sees the Alavida trade-mark, when that consumer has no more than an imperfect recollection of any one of the Masterpiece Inc. trade-marks or trade-name, would be likely to be confused; that is, that this consumer would be likely to think that Alavida was the same source of retirement residence services as Masterpiece Inc.
[38] I would hasten to add that in Mattel, the Court stated that the consumer, who is neither a careful and diligent purchaser nor a moron, would nevertheless have a different attitude depending on the purchasing decision to be made. As stated in paragraph 58, “[w]hen buying a car or a refrigerator, more care will naturally be taken than when buying a doll or a mid-priced meal”, referring here to the two types of products involved in that case (the “Barbie” doll and the small chain of “Barbie’s” restaurants).
[39] This mythical consumer, who is used to determine whether confusion exists, will serve as the standard for assessing the factors specifically identified by the Act, among others, as this list is not exhaustive. I will reproduce subsection 6(5) of the Act here, given its importance to this case:
6 (5) In determining whether trademarks or trade names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
6 (5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l’espèce, y compris :
(a) the inherent distinctiveness of the trademarks or trade names and the extent to which they have become known;
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus;
(b) the length of time the trademarks or trade names have been in use;
b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage;
(c) the nature of the goods, services or business;
c) le genre de produits, services ou entreprises;
(d) the nature of the trade; and
d) la nature du commerce;
(e) the degree of resemblance between the trademarks or trade names, including in appearance or sound or in the ideas suggested by them.
e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux, notamment dans la présentation ou le son, ou dans les idées qu’ils suggèrent.
R.S., 1985, c. T-13, s. 6; 2014, c. 20, ss. 321, 361(E), 362(E), c. 32, s. 53.
L.R. (1985), ch. T-13, art. 6; 2014, ch, 20, art. 321, 361(A) et 362(A), ch. 32, art. 53.
[40] I will begin the review of the statutory criteria with the last one, in paragraph 6(5)(e). That is the approach recommended in Masterpiece. Furthermore, the Court endorsed the comments made in Fox on Canadian Law of Trade-marks and Unfair Competition, by K. Gill and R.S. Jolliffe, and in Hughes on Trade Marks, by R.T. Hughes and T.P. Ashton, according to which the degree of resemblance will often be the most important factor in the overall confusion analysis. This also confirms that not all the factors are of equal importance. Paragraph 49 of Masterpiece is reproduced below:
[49] In applying the s. 6(5) factors to the question of confusion, the trial judge conducted his analysis in the order of the criteria set forth in s. 6(5), concluding with a consideration of the resemblance between the marks. While it is no error of law to do so, the degree of resemblance, although the last factor listed in s. 6(5), is the statutory factor that is often likely to have the greatest effect on the confusion analysis (K. Gill and R. S. Jolliffe, Fox on Canadian Law of Trade-marks and Unfair Competition (4th ed. (loose-leaf)), at p. 8-54; R. T. Hughes and T. P. Ashton, Hughes on Trade Marks (2nd ed. (loose-leaf)), at §74, p. 939). As Professor Vaver points out, if the marks or names do not resemble one another, it is unlikely that even a strong finding on the remaining factors would lead to a likelihood of confusion. The other factors become significant only once the marks are found to be identical or very similar (Vaver, at p. 532). As a result, it has been suggested that a consideration of resemblance is where most confusion analyses should start (ibid.).
A. The degree of resemblance between the trademarks or trade names, including in appearance or sound or in the ideas suggested by them (para. 6(5)(e) of the Act)
[41] Resemblance conveys the idea that it is similarity, not identity, that is the appropriate standard. As a result, “marks with some differences may still result in likely confusion” (Masterpiece, para 62).
[42] In reviewing this similarity leading to likely confusion, the first word is important, because it serves to establish the distinctiveness of a mark (Masterpiece, para 63). The first word may even be the most important; the Court in Masterpiece emphasized the fact that it is important to first consider whether any aspect of the mark is particularly striking or unique (para 64). In Masterpiece, there was nothing striking or unique about the words associated with “Masterpiece” (the marks concerned were “Masterpiece Living” and “Masterpiece the Art of Living”). “Masterpiece” was the dominant word. The Court did not have any difficulty concluding that there was a resemblance. The same can be said here.
[43] In the case at bar, the resemblance between the two marks seems clear to me. As the Supreme Court stated in Veuve Clicquot, it is not necessary for the marks to be identical, “only that the ‘same idea’ is sufficiently conveyed to the mind of the somewhat-hurried consumer to induce the mistaken inference” (para 35). The two marks have the same origin, one being a stylized form of the other, i.e., one word in the English language (“axis”), which corresponds to the word “axe” in French. Therefore, in both cases, if any idea is suggested, it is obviously the same. Even though this may not be the most powerful idea, the fact remains that it is the same. The two marks also have the same sound. The defendant tried to argue that the presentation of the two marks is different. To this end, it was noted that the words are spelled differently, that “Axis” is used with “Heating” and that the defendant uses a distinctive logo.
[44] The argument concerning the different spelling disregards the fact that what is important is the first impression of someone that is somewhat in a hurry, who only has a vague recollection of the marks and who has not given much thought to the issue. This person is not putting the two marks side by side. The addition of words such as “heating” or “and air conditioning” are of little importance. In the analysis of resemblance, importance is initially placed on the first word, the word that is striking and creates an image. In fact, the evidence shows that the defendant only used these words to clarify the products being offered. In Restaurants la Pizzaiolle inc. v Pizzaiolo Restaurants inc., 2015 FC 240, 130 CPR (4th) 195, this Court was confronted with the same argument. Justice LeBlanc applied the analysis in Masterpiece to address the additions after the important word in these marks (“Masterpiece”) and concluded that the additional words did not change the resemblance in any way whatsoever. Paragraphs 70 and 74 read as follows:
[70] In this case, the Graphic Mark PIZZAIOLO is formed using the word PIZZAIOLO written on a green oval background, accompanied by the words ”GOURMET PIZZA”. As was the case with the words ”Living” and ”Art of Living” in Masterpiece, the words ”GOURMET PIZZA” are in no way ”striking or unique” (Masterpiece, above, at paras 64 and 84). That, as the applicant pointed out, is a generic expression bereft of any distinctive character.
[74] This is not a case of deciding whether the rights that the registration of the word mark LA PIZZAIOLLE confers upon the applicant authorizes it to add symbols or other distinctive designs to that mark. It is sufficient to determine whether the applicant is entitled to eventually use the word PIZZAIOLLE in a size, style of lettering, colour and design or graphic form that would render it the same or very similar to the Graphic Mark PIZZAIOLO. In light of Masterpiece, above, I find that it is so entitled and the addition of generic and non-distinctive words such as GOURMET PIZZA, is of no consequence, as were the additions of graphic forms it had previously used or that it currently uses to depict the word PIZZAIOLLE, on the lawfulness of that subsequent use.
This is also true in the case at bar.
[45] The argument concerning the use of a logo is no more compelling. The monopoly to which the plaintiff is entitled, thanks to the registration of its mark AXXYS, is in respect of the name used. The right to the use of the mark, in this case “AXXYS” is what is at stake (Masterpiece, para 55). The exclusive right conferred by the registration of the mark concerns the words used, and this exclusive right includes the use of the words in the form chosen by the plaintiff. One cannot hide behind additions when the important word, the first one, is confusing on the first impression of someone who has only an imperfect recollection of it. As stated by an author often cited by the defendant (Barry Gamache, La Confusion, JurisClasseur Québec, coll. Droit des affaires, Propriété intellectuelle, Fascicule 17, Montréal, LexisNexis Canada, loose-leaf):
[translation]
. . . However, even when it comes to assessing the likelihood of confusion between trademarks associated with expensive goods or services, what is important is the confusion that arises in the consumer’s mind when he or she sees the marks concerned.21 The amount of time that a consumer takes to think about purchasing an expensive good or service may be helpful and may clear up any initial confusion that existed when he or she was confronted with the trademarks concerned.
However, these subsequent events are not relevant if it is demonstrated that the likelihood of confusion existed when the consumer encountered one of the marks concerned for the first time,22 at a time when he or she had only an imperfect recollection of the other.
Even for the purchase of expensive goods or services, it is always the first impression test that applies for the purpose of assessing the likelihood of confusion between a trademark encountered by a consumer and another of which he or she has only an imperfect recollection. . . .
[Pages 5 and 6 of 22.]
[Italics in original, footnotes omitted.]
These assertions are amply supported in Masterpiece, at paragraphs 71 and 72.
B. The inherent distinctiveness of the trademarks or trade names and the extent to which they have become known (paragraph 6 (5)(a))
[46] This factor includes two components: inherent distinctiveness and acquired distinctiveness. The more distinctive a mark is, the more it deserves robust protection. Conversely, where marks have limited inherent distinctiveness, small differences will distinguish them (Kellogg Salada Canada Inc. v Canada, [1992] 3 FC 442) from invaders.
[47] The plaintiff argued that its mark does not have any definition in and of itself and is unconnected with its goods and services, which in itself gives it a certain distinctiveness. The plaintiff claims that the defendant’s mark does not have this same inherent distinction.
[48] In my view, the inherent distinctiveness of the two marks is, for all intents and purposes, equivalent. Neither mark is particularly distinctive, besides the fact that the plaintiff created a stylized version of the common word “axis”, as agreed during the hearing. In each case, the use of the word “axis” does not evoke the company’s wares and services, and this word is a common word. In view of the fact that paragraph 6(5)(a) seeks to establish “the strength of the mark” (Pink Panther Beauty Corp. v United Artists Corp., [1998] 3 FC 534 [Pink Panther], para 23), I do not believe that it is possible to identify any significant difference in the inherent distinctiveness of the two marks. At best, a slight advantage, albeit marginal, would be afforded to the plaintiff’s mark, which uses a different spelling. However, it is important to note that this minimal difference in terms of distinctiveness militates against the plaintiff in terms of resemblance. However, it is a different story with regard to acquired distinctiveness.
[49] In Pink Panther, the Federal Court of Appeal wrote the following in paragraph 24:
24 Where a mark does not have inherent distinctiveness it may still acquire distinctiveness through continual use in the marketplace. To establish this acquired distinctiveness, it must be shown that the mark has become known to consumers as originating from one particular source. In Cartier, Inc. v. Cartier Optical Ltd./Lunettes Cartier Ltée,21 Dubé J. found that the Cartier name, being merely a surname, had little inherent distinctiveness, but, nevertheless, it had acquired a great deal of distinctiveness through publicity. Likewise in Coca-Cola Ltd. v. Fisher Trading Co.,22 the Judge found that the word “Cola” in script form had become so famous that it had acquired a very special secondary meaning distinctive of the beverage, and was, therefore, worthy of protection.
[Footnotes omitted.]
The use of the mark by the plaintiff is key. Right from the outset in Mattel, the Supreme Court recognized that marketing counts:
3 The appellant advises that the name BARBIE and that of her “soul mate”, Ken, were borrowed by their original designer from the names of her own children. The name, as such, is not inherently distinctive of the appellant’s wares. Indeed, Barbie is a common contraction of Barbara. It is also a surname. Over the last four decades or so, however, massive marketing of the doll and accessories has created a strong secondary meaning which, in appropriate circumstances, associates BARBIE in the public mind with the appellant’s doll products.
The owner of a mark may legitimately argue that it prod