L'Oréal v. Cosmética Cabinas, S.L

L'Oréal v. Cosmética Cabinas, S.L
Court (s) Database
Federal Court Decisions
Date
2016-06-17
Neutral citation
2016 FC 680
File numbers
T-2531-14
Decision Content
Date: 20160617
Docket: T-2531-14
Citation: 2016 FC 680
[ENGLISH TRANSLATION]
Ottawa, Ontario, June 17, 2016
PRESENT: The Honourable Mr. Justice LeBlanc
BETWEEN:
L’ORÉAL, SOCIÉTÉ ANONYME
Applicant
and
COSMÉTICA CABINAS, S.L.
Respondent
JUDGMENT AND REASONS
I. Introduction [1] The parties to this litigation are European companies specializing in the manufacturing and sale of cosmetics. Their respective products are sold in a number of countries. The dispute in this case concerns whether, under the Trade-marks Act, R.S.C., 1985, c. T-13 [the Act], the applicant [L’Oréal] was entitled to registration, in Canada, of the INOA mark in association with hair care products.
[2] The respondent [Cabinas] opposed this registration primarily on the ground that, pursuant to paragraph 16(3)(a) of the Act, there was a likelihood of confusion between the INOA mark and its AINHOA mark, which it claimed it had previously used in Canada in association with skin care products.
[3] On September 30, 2014, the Registrar of Trade-marks [the Registrar] allowed Cabinas’s opposition. He found that L’Oréal had not discharged its burden of showing that there was no likelihood of confusion between the INOA mark and the AINHOA mark (hereinafter sometimes referred to as the “competing marks”).
[4] L’Oréal appeals the decision of the Registrar under section 56 of the Act. It invites the Court to review the matter de novo based on the evidence filed in support of its appeal. According to L’Oréal, this evidence—to which Cabinas has not responded—shows that Cabinas’s evidence before the Registrar was insufficient to establish its prior use of the AINHOA mark in Canada. L’Oréal also maintains that the new evidence significantly changes the assessment of whether the competing marks are likely to be confusing, and can only support the finding that no such likelihood exists.
II. Background A. Proceedings before the Registrar [5] The application for registration at issue (No. 1,443,259) was filed with the Registrar on June 30, 2009. In it, a priority date was claimed in relation to the filing, in France, on January 16, 2009, of a similar application for the same type of products. The said application was advertised in the Trade-marks Journal on January 27, 2010.
[6] Cabinas filed its statement of opposition on June 28, 2010. In addition to pointing out the likelihood of confusion, it argued:
that L’Oréal’s application for registration did not comply with the requirements of paragraph 30(i) of the Act, because L’Oréal could not have been satisfied as to its entitlement to use the INOA mark when it filed the said application; and that the said mark, at that date, was not distinctive, within the meaning of section 2 of the Act, in that it did not distinguish the wares associated with it from those associated with the AINHOA mark.
[7] The Registrar, however, dismissed these two grounds, the first because Cabinas had failed to prove it, and the second because there was no need to dispose of it, since L’Oréal’s application for registration could be dismissed on the sole ground that there was a likelihood of confusion between the competing marks. These two aspects of the Registrar’s decision are not at issue in this appeal, nor is the fact that Cabinas seeks to register the AINHOA mark through an application filed with the Registrar prior to that at issue in this case.
[8] In support of its opposition, Cabinas filed the affidavit of its general manager, Juan Antonio Morales. Mr. Morales stated that the AINHOA mark was one of Cabinas’s leading trade-marks, that it had been prominently displayed across www.ainhoacosmetics.com since at least 2002, and that between 2002 and 2009, AINHOA products had reached worldwide sales of 20.5 million euros.
[9] Mr. Morales also stated that the AINHOA mark had been used in Canada as early as August 15, 2006, in association with makeup, skin care products and hair care products and that, since then, sales of these products had exceeded $360,000. According to Mr. Morales, AINHOA products are sold in Canada in various retail points of sale and department stores, such as Winners and Sears, and are available online.
[10] L’Oréal filed the affidavit of Minh-Dan Tran, Group Marketing Manager of L’Oréal Canada Inc., a wholly owned subsidiary of L’Oréal. Mr. Tran said that L’Oréal products fell into four categories, including professional hair products. He also said that INOA products had been sold in Canada since February 2010 and that no instances of confusion between the competing marks had been brought to his attention.
[11] Mr. Morales was cross-examined, but not Mr. Tran.
B. Registrar’s decision regarding the opposition ground of likelihood of confusion [12] The Registrar began by saying he was satisfied that Cabinas had met its burden of proving, as of the priority date claimed by L’Oréal in its application for registration, namely January 16, 2009, its use of the AINHOA mark in Canada in association with skin care products, and of showing that it had not abandoned the AINHOA mark as of the date of advertisement of the said application in the Trade-marks Journal, namely January 27, 2010.
[13] Deeming that prior use of the AINHOA mark had been established, the Registrar then sought to determine whether L’Oréal had discharged its ultimate onus of establishing, on a balance of probabilities, that on January 16, 2009, there was no likelihood of confusion between the competing marks. The Registrar pointed out that in deciding whether the trade-marks were confusing, he had to take into account all circumstances in the case, including those listed in subsection 6(5) of the Act, namely:
the inherent distinctiveness of the trade-marks at issue and the extent to which they have become known; the length of time each has been in use; the nature of the goods, services or businesses associated with these marks; the nature of the trade; and the degree of resemblance between the marks in appearance or sound or in the ideas suggested by them.
[14] First, the Registrar determined that the extent to which the competing marks resembled each other favoured Cabinas, finding that the marks, on the basis of first impression, even though neither suggested any specific ideas, might look similar to the average consumer and might sound somewhat similar to the average Francophone consumer.
[15] Next, the Registrar said that, in his view, the inherent distinctiveness of the competing marks favoured neither party, as he was satisfied that each mark possessed a material and equivalent inherent distinctiveness. Moreover, he concluded that even though Cabinas had succeeded in proving, as of January 16, 2009, its use of the AINHOA mark in Canada since as early as August 2006, its evidence fell short of establishing the extent to which the mark had become known in Canada as of that date. In this regard, the Registrar noted that Cabinas had provided no evidence concerning the sums allocated to advertising of AINHOA products in Canada or the volume of advertising or promotional material distributed in Canada by it or its distributors, and no annual breakdown of sales of AINHOA products in Canada since 2006.
[16] As for the length of time the marks had been in use, the Registrar found that it favoured Cabinas, as he was satisfied that the AINHOA mark had been in use in Canada as of the priority date claimed by L’Oréal, whereas the INOA mark had not.
[17] The Registrar found that the nature of the goods, services or businesses at issue favoured Cabinas as well. Indeed, having found that the AINHOA and INOA marks were used in Canada exclusively in association with skin care products and hair care products, respectively, he rejected L’Oréal’s submission that the goods associated with each mark were clearly distinct. It was his view that, while they were not identical, the products were, in both cases, designed to beautify the hair or skin; there were no significant differences between them.
[18] Lastly, the Registrar found that the nature of the trade favoured Cabinas. In his opinion, L’Oréal’s argument that the products at issue were intended for different distribution channels—large-surface stores in the case of AINHOA products and professional hair salons in the case of INOA products—was not supported by the evidence, particularly by the statement of goods included with the application for registration of the INOA mark, which did not contain any restrictions regarding the distribution channels of the wares.
[19] Lastly, the Registrar gave no weight to Mr. Tran’s evidence that no instances of actual confusion between the competing marks had been brought to his attention, particularly since the INOA mark had not been in use in Canada as of January 16, 2009.
[20] As mentioned, L’Oréal feels, based on the new evidence filed in support of this appeal, that Cabinas’s use of the AINHOA mark in Canada as of January 16, 2009, was insufficient to ground an opposition. Alternatively, it urges the Court, still on the basis of this fresh evidence, to find that there is no likelihood of confusion between the competing marks.
III. Issues and standard of review [21] The Court must determine whether there are grounds to intervene and reverse the Registrar’s findings regarding the use, in Canada, of the AINHOA mark as of January 16, 2009, and, if applicable, the likelihood of confusion between this mark and the INOA mark.
[22] Generally, where a dispute brought before the Registrar raises questions of fact and law that are within his expertise, as in the present matter, the applicable standard of review is reasonableness (Cyprus (Commerce and Industry) v. Producteurs laitiers du Canada), 2010 FC 719, 393 FTR 1, at paragraph 28 [Producteurs laitiers du Canada]; Molson Breweries v. John Labatt Ltd., [2000] 3 FC 145 (FCA), 180 FTR 99, at paragraph 29 [John Labatt Ltd.]; Restaurants La Pizzaiolle Inc. v. Pizzaiolo Restaurants Inc., 2015 FC 240, at paragraph 41).
[23] In accordance with this standard, the Court will intervene only if the Registrar’s decision was “clearly wrong” (Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, [2006] 1 SCR 772, at paragraph 40; Playboy Enterprises Inc. v. Germain (1979), 43 CPR (3d) 254 (FCA), at page 274; Producteurs laitiers du Canada, at paragraph 28). From the perspective of Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 SCR 190 [Dunsmuir], this means that the Court must show deference to the Registrar’s findings and will therefore intervene only if those findings lack justification, transparency or intelligibility or fall outside a range of possible, acceptable outcomes which are defensible in respect of the facts and law (Dunsmuir, at paragraph 47; see also Hawke & Company Outfitters LLC v. Retail Royalty Company, 2012 FC 1539, at paragraph 47 [Hawke & Company Outfitters]).
[24] However, under subsection 56(5) of the Act, where additional evidence is adduced before the Court, it may exercise any discretion vested in the Registrar. In that case, the Court may draw its own conclusions and apply the standard of correctness to the Registrar’s decision (Producteurs laitiers du Canada, at paragraph 28).
[25] But in order to exercise its powers under subsection 56(5) of the Act, the Court must be satisfied that the fresh evidence submitted by the parties is substantive and adds to that adduced before the Registrar. In other words, the Court must be satisfied that this new evidence could have led the Registrar to make different findings had he had the opportunity to consider it. Fresh evidence that is repetitive and does not enhance the probative value of the evidence already adduced is insufficient to preclude application of the deferential standard of reasonableness to the Registrar’s findings (Producteurs laitiers du Canada, at paragraph 28; John Labatt Ltd., at paragraph 29). Thus, when additional evidence is filed, the test is “one of quality, not quantity” (Canadian Council of Professional Engineers v. Apa - The Engineered Wood Assn., [2000] FCJ No. 1027 (QL), 7 CPR (4th) 239 (FC), at paragraph 36; Wrangler Apparel Corp. v. Timberland Co., 2005 FC 722, at paragraph 7; Hawke & Company Outfitters, at paragraph 31).
[26] The additional evidence submitted by L’Oréal in this appeal can be summarized as follows:
The results of an investigation on the use of the AINHOA mark in Canada and the sale of AINHOA products in Canada between 2006 and 2010 (affidavits of Janie Boucher and Ingrid Andrade, investigator-analysts with the investigations and security firm SIRCO) An opinion on the particulars of the Canadian cosmetics market, including the products associated with the competing marks, their distribution channels, and consumer habits in relation to the said products (affidavit of Vincent Lemieux, General Manager of Conair Professional) An opinion on the compliance of AINHOA products destined for the Canadian market with Canadian food and drug regulations and, in particular, with the regime subjecting the importation and sale of certain cosmetics in Canada to prior approvals and permits (affidavit of Robert Ross-Fichtner, President of Focal Point Research Inc.) The results of a search, across multiple media platforms, for articles containing the word “AINHOA,” to see what comes up (affidavits of Céline Bélanger, researcher at Cogniges inc., and Joan Brehl Steele, Vice President of Alliance for Audited Media)
[27] L’Oréal’s new evidence also includes the affidavit of Doriane Dalati, Vice-President of Strategic Market Development at L’Oréal Canada’s Professional Products Division. Ms. Dalti said that INOA products have been sold in Canada since 2010, that these products are intended for professional use only, and that “INOA” is short for “Innovation No Ammonia.” She also promised, on behalf of L’Oréal, that products bearing the INOA mark would be sold in Canada exclusively to hair professionals and that the statement of goods included with the application for registration of the said mark would be amended accordingly, once the said mark was registered.
[28] According to L’Oréal, this new evidence establishes:
that Cabinas’s use of the AINHOA mark in Canada has been limited to non-existent, and if the mark has acquired a reputation in Canada, it has not done so “in the normal course of trade” as defined in section 4 of the Act, since some of the AINHOA products sold in Canada were in violation of Canadian legislation governing the importation and sale of drugs, cosmetics and natural products;
b. that INOA products, in that they have always been intended and will continue to be intended for professional use only, are materially different from AINHOA products, thus rendering any overlap between their respective distribution channels impossible; and
that the distinctiveness of “AINHOA,” which is a woman’s first name and the name of a place, is much lower than that of “INOA,” which specifically stands for “Innovation No Ammonia.”
[29] Cabinas argues that, had it been adduced before the Registrar, L’Oréal’s new evidence would not have materially affected the Registrar’s findings. In fact, Cabinas contends that this evidence, for the most part, confirms the facts on which the Registrar based his decision. In particular, Cabinas submits that this evidence (i) does not call into question the finding that the AINHOA mark had been used in Canada prior to January 16, 2009, (ii) deals with factors of the test for likelihood of confusion that the Registrar found to be in favour of L’Oréal; and (iii) contains admissions confirming the Registrar’s findings regarding this test. In any event, Cabinas says that the Registrar’s decision stands up to analysis, even against the standard of correctness.
[30] What, then, should be made of this?
IV. Analysis A. Use of the AINHOA mark in Canada as of January 16, 2009 (1) Applicable law [31] Under paragraph 16(3)(a) and subsection 16(5) of the Act, any applicant who, like L’Oréal, has filed an application for registration of a proposed trade-mark is entitled to secure its registration in respect of the goods or services specified in the application, unless at the date of filing of the application it was confusing with a trade-mark that had been previously used in Canada or made known in Canada by any other person and had not been abandoned by this person as of the date of advertisement of the applicant’s application. Under subsections 38(1) and (2) of the Act, this person may, within the time prescribed therein, file a statement of opposition on this basis, which is what Cabinas did.
[32] The relevant statutory provisions are reproduced as an appendix to this judgment.
[33] It is well established that although the applicant bears the legal onus of satisfying the Registrar, on a balance of probabilities, that its application complies with the requirements of the Act, the opponent bears the initial evidential burden to adduce sufficient admissible evidence from which it could be reasonably concluded that the facts alleged to support each ground of opposition exist. Only after this requirement has been met does the burden of proof shift to the applicant (John Labatt Ltd. v. Molson Co. (1990), 30 CPR (3d) 293, 36 FTR 70, affirmed on appeal (1992), 42 CPR (3d) 495, 57 FTR 159; Republic of Cyprus (Commerce and Industry) v. International Cheese Council of Canada, 2011 FCA 201, at paragraphs 25–28, leave to appeal to SCC refused, 34430 (April 12, 2012)).
[34] In this case, Cabinas had the initial burden of satisfying the Registrar that it was using the AINHOA mark in Canada as of January 16, 2009, the priority date claimed by L’Oréal, and that it had not abandoned the said mark as of January 27, 2010, the date of advertisement of L’Oréal’s application for registration in the Trade-marks Journal.
[35] Under section 2 of the Act, “use,” in relation to a trade-mark, means any use that by section 4 is “deemed to be a use in association with goods or services.” Subsection 4(1) of the Act, which specifically deals with the use of a trade-mark in association with goods, reads as follows:
4 (1) A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed or it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred.
4 (1) Une marque de commerce est réputée employée en liaison avec des produits si, lors du transfert de la propriété ou de la possession de ces produits, dans la pratique normale du commerce, elle est apposée sur les produits mêmes ou sur les emballages dans lesquels ces produits sont distribués, ou si elle est, de toute autre manière, liée aux produits à tel point qu’avis de liaison est alors donné à la personne à qui la propriété ou possession est transférée.
(2) Use of the AINHOA mark [36] As we have seen, L’Oréal is of the view, in light of the new evidence, that as of January 16, 2009, the claimed priority date, the use of the AINHOA mark in Canada was insufficient to ground an opposition. In particular, it argues that the new evidence is inconsistent with what Mr. Morales said under oath and paints a more realistic picture of the use of the said mark than that provided by Cabinas, which, in its view, was grossly exaggerated.
[37] Noting that Cabinas has provided no evidence in response to the new evidence, L’Oréal urges the Court to draw significant negative inferences from this and conclude that Cabinas failed to demonstrate sufficient use, in the normal course of trade, of the AINHOA mark as of January 16, 2009. According to L’Oréal, while paragraph 16(3)(a) of the Act does not define what constitutes use in the normal course of trade, it has often been described in the jurisprudence as “substantial and continuous” as well as “lawful” use by a trader. The applicant argues that the new evidence shows that Cabinas had satisfied neither requirement as of January 16, 2009. In short, it says, a few isolated sales of products, many of which were in violation of Canadian food and drug legislation, and which were associated with a mark that had acquired at best a marginal reputation as of the material date, are insufficient to ground an opposition under paragraph 16(3)(a) of the Act.
[38] Cabinas counters that the new evidence, had it been adduced before the Registrar, would have made no difference to the outcome of its opposition. It is of the opinion that, to meet its initial burden, it needed only to prove that AINHOA products had been sold in Canada as of the claimed priority date and that it had not abandoned the AINHOA mark when L’Oréal advertised its application for registration in January 2010, which it did. And, in its view, the new evidence confirms it. In this regard, Cabinas submits that sales to distributors constitute sales “in the normal course of trade.” As for sales having to be lawful to be considered as having been made in the normal course of trade, Cabinas argues that the new evidence does not conclusively establish that, between 2006 and 2009, AINHOA products destined for the Canadian market were in violation of Canadian food and drug regulations, and that, in any event, this evidence of non-compliance concerns only a portion of the said products.
[39] I am of the view that L’Oréal’s appeal must fail on this point.
Volume of sales [40] It has been established that AINHOA products were sold in Canada between 2006 and January 2009. L’Oréal acknowledges it in its factum, and the new evidence, particularly that of the SIRCO investigator-analysts, Ms. Boucher and Ms. Andrade, tends to confirm it. Indeed, the evidence in the record shows that Cabinas sold such products to a Winners store in Mississauga, Ontario, in July 2006, and to the company Beautytech in Burnaby, British Columbia, in May 2007—a total of three invoices for revenue of 13,542 euros.
[41] With regard to Beautytech specifically, even though the evidence of Ms. Boucher and Ms. Andrade shows that a portion of the AINHOA products purchased by this distributor was either a) not sold on the market or b) seized by Canadian customs officials for containing wild sturgeon caviar, a natural product illegal in Canada, this evidence still confirms that AINHOA products were purchased by Beautytech and that some of those goods were sold online or in beauty salons.
[42] Moreover, as Cabinas notes, the evidence that appears inconsistent with what Mr. Morales said, namely that AINHOA products were available for purchase on the Sears website (www.sears.ca), is inconclusive, since Sears refused to answer Ms. Boucher and Ms. Andrade’s questions and since the “health and beauty” section of the Sears website could not be accessed for 2006 and 2010 when searching the archives. As for 2007 to 2009, a two-year period, the evidence is that the word “AINHOA” did not come up in a search of the archives for the 12 days selected by Ms. Boucher and Ms. Andrade. I note, however, that Cabinas has provided no evidence to clarify the situation.
[43] Regardless, as I find that the new evidence adduced by L’Oréal would not have materially affected the Registrar’s findings on this point, the question to be determined at this stage is whether it was reasonable for the Registrar to reach a finding of prior use of the said mark based on the invoices filed by Cabinas concerning goods sold to Winners in July 2006 and to Beautytech in May 2007.
[44] I would note at the outset that the question of prior use is a question of mixed fact and law within the Registrar’s expertise. Therefore, the Court will intervene only if the Registrar’s decision in this regard was “clearly wrong” (Producteurs laitiers du Canada, at paragraph 28; Playboy Enterprises Inc. v. Germain (1979), 43 CPR (2d) 271, at page 274 (FCA)).
[45] I would also note that it now appears well established that the sale of a product associated with a trade-mark to a distributor, as opposed to a consumer, the end user, constitutes a transfer of property in the product “in the normal course of trade” as defined in subsection 4(1) of the Act. In my view, the following passage from Philip Morris Inc. v. Imperial Tobacco Ltd. et al. (1985), 7 CPR (3d) 254, 35 ACWS (2d) 258, aptly summarizes the state of the law on this issue:
[99] . . . The Act simply requires evidence of sales in the normal course of trade. In the Molson Cos. Ltd. v. Halter (1976), 28 C.P.R. (2d) 158 at p. 177 Gibson J. writes:
In essence, in order to prove “use” in Canada of a trade mark for the purpose of the statute, there must be a normal commercial transaction in which the owner of the trade mark completes a contract in which a customer orders from the owner the trade mark wares bearing the trade mark which wares are delivered by the owner of the trade mark pursuant to such contract to such customer. In other words, as s. 4 of the Act prescribes, the “use” must be “in the normal course of trade” at the time of the transfer of the property in or possession of such wares.
[100] The Act does not define the persons to whom the sales are made. A “customer” can be a wholesaler as well as a retailer, as long as the sale is made in the normal course of trade as defined by s. 4 of the Act. It has also been established that the words “normal course of trade” recognize the continuity of a transaction from the manufacturer to the ultimate consumer and provide protection for the manufacturer’s trade mark throughout these intervening transactions: see Manhattan Industries Inc. v. Princeton Mfg. Ltd. (1971), 4 C.P.R. (2d) 6; Marchands Ro-Na Inc. v. Tefal S.A. (1981), 55 C.P.R. (2d) 27, 14 B.L.R. 123; Saxon Industries, Inc. v. Aldo Ippolito & Co. Ltd. (1982), 66 C.P.R. (2d) 79; Royal Doulton Tableware Ltd. et al. v. Cassidy’s Ltd. Cassidy’s Ltee (1984), 1 C.P.R. (3d) 214, 5 C.I.P.R. 10.
[46] Moreover, I agree with Mr. Justice Nadon, then of this Court, when he said, in JC Penney Co. Inc. v. Gaberdine Clothing Co. Inc., 2001 FCT 1333, 213 FTR 189 [JC Penney], that use of a trade-mark could not be measured by the number of sales or the quantity of wares sold in association with the trade-mark. Nadon J. went on to note that the Act does not impose any requirements concerning the length or extent of use of the trade-marks but simply requires that the trade-mark be used in association with wares in the normal course of trade. In practical terms, the issue is whether the sales on which the opponent relies are, in the light of all the circumstances, sufficient to show use of its trade-mark:
[92] Consequently, use of a trade-mark cannot be measured by the number of sales or the quantity of wares sold in association with the trade-mark. That is why, in my view, a single sale may suffice to prove use of a trade-mark. The sale or sales must be examined in the light of all of the surrounding circumstances. The Act does not impose any requirements concerning the length or extent of use of the trade-marks. Subsection 4(1) of the Act simply requires that the trade-mark be used in association with wares in the normal course of trade. That is the reason why, in my view, sales that have been found to be “token” sales, sales to related companies, free delivery of samples, and pro-forma transfers, do not meet the requirements of “in the normal course of trade”. The Act does not require an applicant to show extensive use of substantial use of its trade-mark. The issue is whether the sales on which the applicant relies are sufficient to show use by the applicant of its trade-mark.
[47] This contextual approach was recently adopted by Mr. Justice Rennie, as he then was, in Corporativo De Marcas GJB, SA DE CV v. Bacardi & Company Ltd., 2014 FC 323, 452 FTR 128 [Bacardi & Company]. There, Rennie J. held that a literal interpretation of the phrasing “continuous use” in Labatt Brewing Co. v. Benson & Hedges (Canada) Ltd. (1996), 110 FTR 180, 62 ACWS (3d) 561 [Labatt Brewing Co.] created an unduly strict test for opponents, as neither a discrete period of use nor of non-use was conclusive of prior use of the trade-mark in the normal course of trade (Bacardi & Company, at paragraphs 42–43).
[48] L’Oréal points out that, in that case, Rennie J. stated that a mere three transactions over the course of five years were insufficient to ground an opposition to an application for registration. However, Rennie J. specified that those transactions all occurred in the first 17 months of those five years and that sales of products bearing the mark at issue were subsequently halted in Canada, creating a hiatus of over three years “during which there was no evidence of any use” (Bacardi & Company, at paragraph 3).
[49] In this case, there is no evidence that Cabinas stopped selling AINHOA products in Canada or did not use the mark in Canada for a long period, as indicated by its sales of AINHOA products to Cosmolane Inc. in May and August 2009 and January 2010. As Nadon J. noted in JC Penney, evidence of sales made posterior to the filing date of the contested application for registration is relevant to “determining if there has been use in the normal course of trade” (JC Penney, at paragraph 93). Here, the evidence before the Registrar, as a whole, shows that AINHOA products were sold in Canada in 2006, 2007, 2009 and 2010 and that, notwithstanding the lack of an annual breakdown, these sales generated total revenue of over $360,000. That is certainly suggestive, if not conclusive, of continuous use of the AINHOA mark in Canada.
[50] Furthermore, the circumstances of this case contrast with those of other cases where the Court ruled that prior use of a trade-mark in the normal course of trade had not been established:
A single sale of a product to a subsidiary company (SAFT - Société des accumulateurs fixes et de traction v. Charles Le Borgne Ltée (1975), 22 CPR (2d) 178, at page 182 (FC)); An order of boxes with the trade-mark on the boxes, with no proof when, if ever, the boxes were used (Golden Happiness Bakery v. Goldstone Bakery & Restaurant (1994), 53 CPR (3d) 195, at page 199, 76 FTR 52); The advertisement of a service without performance of the said service (Cornerstone Securities Canada Inc. v. Registrar of Trade-marks et al. (1994), 58 CPR (3d) 417 (FC)); Two isolated shipments of wine to test the market (Grants of St. James Ltd. v. Andres Wines Ltd. (1969), 58 CPR 281); The giving away of a few promotional samples (King Features Syndicate, Inc. et al. v. Lechter, [1950] Ex. CR 297, at pages 306–307).
[51] In this regard, as Nadon J. noted in JC Penney, generally, sales that have been found to be “token” sales, sales to related companies, free delivery of samples, and pro-forma transfers do not meet the requirements of “in the normal course of trade” (JC Penney, at paragraph 92). That is not the case here.
[52] It is worth mentioning that after excluding most of the evidence of prior use of the mark at issue either for being related to sales made after the relevant date or for being inconclusive, Nadon J. found that evidence of two transactions involving the sale of four pairs of jeans in all was sufficient to establish prior use (JC Penney, at paragraphs 86–87). Strictly in terms of the volume of sales, there is no comparison between the situation in that case and the situation here, where the Registrar had before him evidence of a volume of sales that, while not substantial, largely exceeded the volume recognized by Nadon J. as sufficient to constitute evidence of prior use.
[53] It is true that in Mr. Goodwrench Inc. v. General Motors Corp. (1994), 55 CPR (3d) 508 (FC) [Mr. Goodwrench Inc.], cited by L’Oréal, Madam Justice Simpson held that establishing prior use of a trade-name, as defined in paragraph 16(3)(c) of the Act, required evidence that the said use was “substantial and continuous.” In that case, Simpson J. ruled that a single use of a trade-name three years before the filing date of the contested application for registration by a company that had been inactive for two years before that date was not prior use in the normal course of trade. In my view, that case differs from the present one in that the evidence shows that Cabinas sold AINHOA products in Canada in 2006 and 2007, and since, as we have seen, there is nothing to suggest that it subsequently ceased its commercial activities in Canada in relation to AINHOA products; quite the contrary, in fact.
[54] I also note that Mr. Goodwrench Inc. was decided before Labatt Brewing Co., cited above, where Simpson J., as Rennie J. noted in Bacardi & Company, cited above, qualified the meaning of continuity or continuous use so as not to impose an unduly strict burden on those seeking to establish prior use of a trade-name or mark. In any event, this position differs from that articulated by Nadon J. in JC Penney. With respect, I prefer the latter; I find it more consistent with the wording of section 4 of the Act, which, as Nadon J. pointed out, does not impose any requirements concerning the length or extent of use of a trade-mark (JC Penney, at paragraph 92).
[55] L’Oréal argues that, according to the approach taken by Nadon J. in JC Penney, in order to constitute use “in the normal course of trade,” a low volume of sales must be coupled with significant promotional activity, which Cabinas did not establish, and the Registrar noted as much. However, that is only one of the factors to which Nadon J. had regard when examining “all of the . . . circumstances” surrounding the two sales that he accepted as prior use of the mark at issue in that case (JC Penney, at paragraph 93). The other factors he considered, which he did not care to list exhaustively given the fluid and case-specific nature of a review based on all the circumstances of a given case, included the history of use of the mark in question by the applicant, an American company; the distribution of products bearing this mark in the United States; the fact that the said products were prominently displayed in the applicant’s catalogues; and, as we have seen, use of the said mark in Canada after the filing date of the contested application for registration. Nadon J.’s exact words were as follows:
[93] It cannot be disputed, in my view, that the applicant’s sales were made in the normal course of trade. The sales must be examined in the light of all of the surrounding circumstances, namely: (1) the applicant has hundreds of cardholders with Canadian home addresses; (2) thousands of the applicant’s catalogues are mailed to Canadians every year; (3) the applicant began using THE ORIGINAL ARIZONA JEAN COMPANY trade-mark in 1989 in association with trousers and jeans for men, women and children; (4) the wares associated with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are sold in the applicant’s department stores in the United States and through its catalogues to customers elsewhere and, in particular, in Canada; (5) the wares associated with the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY are prominently displayed and on sale in the applicant’s catalogues. I also note that there is evidence that the applicant still ships its catalogues to Canada, sells its wares to Canadians through a mail-order system, and delivers such wares to the homes of Canadian purchasers. The post-December 21, 1993 evidence is relevant to an inquiry, when determining if there has been use in the “normal course of trade”. Using pre- and post-December 21, 1993 evidence, I am of the view that the applicant has used its trade-mark in the normal course of trade, and not just in a token or contrived fashion. I am cognizant of the fact that when determining if use has been established by the applicant, evidence of use post-December 21, 1993, is irrelevant. While determining if there has been use in the normal course of trade, I am entitled to take into account evidence of use arising post-December 21, 1993.
[56] In this case, the Registrar had before him evidence:
that the AINHOA mark has been around since 1996 and is one of Cabinas’s leading marks; that products bearing that mark are sold in over 50 countries; that the sales of these products totalled 231 million Spanish pesetas for the years 1996 to 2001 and 20.5 million euros for the years 2002 to 2009; that since at least 2002, these products have been prominently displayed on www.ainhoacosmetics.com, which attracts hundreds of thousands of visitors each year, though the number of Canadian visitors is unknown; and that there were sales of AINHOA products in Canada in 2006, 2007, 2009 and 2010, generating total revenue of over $360,000.
[57] In my view, concerning the volume of sales, the evidence adduced by Cabinas before the Registrar of its use of the AINHOA mark in Canada as of January 16, 2009, allowed the latter to conclude, on considering the evidence as a whole under a reasonableness standard, that Cabinas had met its burden of showing that it used the said mark before that date in the normal course of trade and that it had not abandoned it as of the date the application for registration of the INOA mark was advertised, that is, January 27, 2010.
[58] In other words, it is reasonable to conclude that Cabinas has, to quote again from JC Penney, “used its trade-mark in the normal course of trade, and not just in a token or contrived fashion” (JC Penney, at paragraph 93).
Reputation of the AINHOA mark [59] L’Oréal submits that, to meet its initial burden of showing that, as of January 16, 2009, it had used the AINHOA mark in Canada “in the normal course of trade,” Cabinas had to establish the said mark’s [translation] “reputation” as of that date. However, according to L’Oréal, the new evidence shows that the AINHOA mark was of little to no repute at that time. In L’Oréal’s view, the evidence of the two SIRCO investigator-analysts shows that the site www.scienceandnatureonline.com, through which, according to Mr. Morales, Cabinas sold its AINHOA products in Canada, was not online until after June 5, 2009, when the domain name scienceandnatureonline.com was created, meaning it went online after January 16, 2009. The same goes for the AINHOA products sold to the Canadian distributor Cosmolane Inc.; its website’s archives make no mention of the AINHOA mark prior to October 2009, which, again, is after the claimed priority date. Still according to Ms. Boucher and Ms. Andrade’s research, with the exception of a mention in a May 26, 2009 article reposted on the Cosmolane Inc. website from a website administered in India, Canadian online stores and blogs make no mention of AINHOA products prior to 2010.
[60] Under paragraph 16(3)(a) of the Act, L’Oréal is entitled to secure registration of the INOA mark unless at the date of filing of the application the said mark was confusing with a trade-mark that had been “previously used in Canada or made known in Canada by any other person.” As appears from the wording of section 5 of the Act, which sets out when a trade-mark is deemed to be made known in Canada, this requirement entails, in relation to section 4 of the Act, two separate ideas. Section 5 reads as follows:
5 A trade-mark is deemed to be made known in Canada by a person only if it is used by that person in a country of the Union, other than Canada, in association with goods or services, and
5 Une personne est réputée faire connaître une marque de commerce au Canada seulement si elle l’emploie dans un pays de l’Union, autre que le Canada, en liaison avec des produits ou services, si, selon le cas :
(a) the goods are distributed in association with it in Canada, or
a) ces produits sont distribués en liaison avec cette marque au Canada;
(b) t