Blossman Gas, Inc. v. Alliance Autopropane Inc.

Blossman Gas, Inc. v. Alliance Autopropane Inc.
Court (s) Database
Federal Court Decisions
Date
2022-12-23
Neutral citation
2022 FC 1794
File numbers
T-1184-20
Decision Content
Date: 20221223
Docket: T-1184-20
Citation: 2022 FC 1794
Ottawa, Ontario, December 23, 2022
PRESENT: Mr. Justice McHaffie
BETWEEN:
BLOSSMAN GAS, INC.
Applicant
and
ALLIANCE AUTOPROPANE INC.
Respondent
JUDGMENT AND REASONS
I. Overview
[1] The outcome of this application turns on three principles of Canadian trademark law: (1) a trademark licensee is not entitled to register the licensor’s trademark in the licensee’s own name; (2) a person is not entitled to register a trademark that is confusing with a trademark previously used in Canada by another; and (3) absent bad faith, an existing trademark registration constitutes a defence to a claim in passing off for the registrant’s use of the registered mark.
[2] Alliance Autopropane Inc [AAP] obtained the right to use the trademark ALLIANCE AUTOGAS as a sublicensee of Blossman Gas, Inc. While still a sublicensee, AAP applied to register in its own name the ALLIANCE AUTOGAS Design trademark used by Blossman. It also applied to register three other design trademarks incorporating the words ALLIANCE and AUTOPROPANE [the AAP Marks]. Blossman brings this application to strike these four trademark registrations from the Trademark Register, and to stop AAP from using the AAP Marks and the trademark and trade name ALLIANCE AUTOPROPANE.
[3] For the reasons given below, I conclude that AAP was not the person entitled to register the trademarks at issue, as they were confusing with Blossman’s ALLIANCE AUTOGAS trademarks, which Blossman had used in Canada through licensees prior to AAP’s adoption of its trademarks. Contrary to AAP’s arguments, Blossman had sufficient control over the quality or character of its licensee’s services that their use accrued to Blossman’s benefit, and Blossman did not acquiesce in AAP’s use of the AAP Marks so as to be precluded from seeking relief. The trademarks will therefore be struck from the Register.
[4] I also conclude AAP applied to register the trademark ALLIANCE AUTOGAS and Design (TMA954,034) in bad faith, as that term is used in paragraph 18(1)(e) of the Trademarks Act, RSC 1985, c T-13. The effect of this determination is that the registration is invalid ab initio and is not a defence to Blossman’s claim of passing off as they relate to this trademark, a claim which I find to be established. However, the other trademark registrations constitute a defence to Blossman’s passing off claims as they relate to the past use of the AAP Marks.
[5] Damages are awarded to Blossman in the amount of $20,000 for passing off as a result of AAP’s continued use of the ALLIANCE AUTOGAS Design after the expiry of its license to do so. In addition, while a bad faith registration does not necessarily warrant a punitive damages claim, I conclude that punitive damages of $5,000 are justified in the circumstances. An injunction preventing the future use of the ALLIANCE AUTOGAS Design, the AAP Marks, and the trademark and trade name ALLIANCE AUTOGAS is also warranted.
[6] The application is therefore granted in part, with costs payable to Blossman in the amount of $31,662.
II. Issues
[7] Blossman raises the following issues on this application, which I have slightly restated:
Are Canadian trademark registrations TMA954,034; TMA916,456; TMA916,457; and/or TMA916,409 invalid?
Has AAP engaged in passing off?
If so, what remedies are appropriate?
[8] Within these issues, a number of sub-issues arise, including each party’s challenges to the evidence and AAP’s allegations that Blossman acquiesced in AAP’s conduct, did not use its trademarks in Canada, and did not control the character or quality of its licensee’s services. I will address these issues as they arise in the context of the three primary issues raised by Blossman.
III. Analysis
A. The Canadian Trademark Registrations are Invalid
(1) The trademark registrations at issue
[9] Details of the four trademark registrations held by AAP that Blossman seeks to invalidate are as follows:
TMA954,034 [the ’034 Mark]
Application No: 1,693,995
Filing Date: September 16, 2014
Registration Date: November 2, 2016
[Description of image: A largely horizontal mark is represented. To the left and occupying about one-fifth of the length of the mark is a design element consisting of a flame motif overlapping with a leaf motif. To the right and occupying the remaining four-fifths of the length of the mark, the words ALLIANCE AUTOGAS are written in block capitalized case letters above the words POWERED BY PROPANE in smaller block uppercase letters.]
TMA916,456 [the ’456 Mark]
Application No: 1,693,993
Filing Date: September 16, 2014
Registration Date: October 5, 2015
[Description of image: A design resembling a stylized quadrilateral arrowhead or a stylized letter A appears above the word ALLIANCE in block uppercase letters, which is in turn above the word AUTOPROPANE, with the AUTO portion in block uppercase letters and the PROPANE portion in block lower case letters.]
TMA916,457 [the ’457 Mark]
Application No: 1,693,991
Filing Date: September 16, 2014
Registration Date: October 5, 2015
[Description of image: A largely horizontal mark is represented. To the left and occupying about one-fifth of the length of the mark is the same stylized A motif in the ’456 Mark, appearing above the word ALLIANCE in small block uppercase letters. To the right and occupying the remaining four-fifths of the length of the mark, the word AUTOPROPANE, with the AUTO portion in block uppercase letters and the PROPANE portion in block lowercase letters, appears in larger text above the words LE PLUS GRAND RÉSEAU D’AUTOPROPANIERS EN AMÉRIQUE in small block uppercase letters.]
TMA916,409 [the ’409 Mark]
Application No: 1,693,992
Filing Date: September 16, 2014
Registration Date: October 5, 2015
[Description of image: The mark consists of an eight-pointed star-shaped design with an octagonal negative space in the centre. The star is made up of overlapping stylized triangular shapes of different shades of grey. The top point of the star design reproduces the stylized A motif appearing in the ’456 Mark. At the top of the internal octagonal space, the word ALLIANCE in block uppercase letters appears above the word AUTOPROPANE, with the AUTO portion in block uppercase letters and the PROPANE portion in block lowercase letters.]
[10] Following the nomenclature of the parties, I will refer to the ’456 Mark, the ’457 Mark, and the ’409 Mark, which incorporate the words ALLIANCE and AUTOPROPANE, collectively as the “AAP Marks.” For ease of reference, I will refer to the design that appears in the ’456 Mark and the ’457 Mark, and at the top of the star design in the ’409 Mark as the “stylized ‘A’ motif.”
[11] The four marks are registered for use in association with the same list of services associated with propane-powered vehicles. The full list of these services is set out in Appendix “A”. While a number of services are listed, they all fall into one of two general categories: (i) services related to the sale, installation, and maintenance of propane conversion systems, such as [translation] “Assembly of propane gas conversion systems for vehicles”; and (ii) services related to propane filling stations, such as [translation] “Operation of propane gas filling stations for vehicle gas tanks.”
(2) The parties and their affiants
[12] Blossman is a Mississippi company, founded in 1951. It offers propane gas delivery and propane appliances such as water heaters, grills, and fireplaces. Blossman describes itself as the largest family-owned propane business in the United States of America. In support of this application, Blossman filed the affidavit of Edward Hoffman. At the time of his affidavit, Mr. Hoffman was an employee of Blossman and president of a Blossman subsidiary, Blossman Services, Inc, which delivered Blossman’s vehicle equipment business. Mr. Hoffman joined Blossman in June 2014, having previously been with a company named Keystone Automotive Operations, Inc, which was a client of Blossman.
[13] AAP is a Quebec company, founded in 2013. It is co-owned by two other Quebec companies: 9049-1135 Québec Inc, dba Propane du Suroît, which is controlled by Marquis Grégoire Jr; and Solugaz Inc, which is controlled by Rock Boulianne. Mr. Grégoire and Mr. Boulianne are co-presidents of AAP. Mr. Grégoire swore an affidavit on behalf of AAP.
[14] Mr. Hoffman and Mr. Grégoire were each cross-examined on their affidavits. The following recitation of the facts leading to this application is drawn from the affidavits, the cross-examination transcripts, and the documents produced in response to undertakings on the cross-examinations.
(3) Facts leading to this application
(a) The Alliance AutoGas program
[15] In 2009, Blossman began promoting and selling propane as a vehicle fuel in the United States under the name Alliance AutoGas. Mr. Hoffman states that “autogas” is used in the industry as a synonym for propane used to fuel cars, and Mr. Grégoire similarly confirmed that he understood the word autogas in the ALLIANCE AUTOGAS Design to refer to propane. In addition to distributing and selling propane as a fuel, the Alliance AutoGas program helps customers who have vehicle fleets—such as taxi companies, delivery companies, and governments—convert vehicles in those fleets from gasoline-powered to propane-powered or bi-fuel vehicles. The program includes installation of vehicle conversion systems, as well as refueling infrastructure and fuel supply.
[16] The Alliance AutoGas program is centred in North Carolina, where Mr. Hoffman worked. Stuart Weidie, the President and CEO of Blossman, has been the President of Alliance AutoGas since its creation in 2009.
[17] Since about June 2009, Blossman has maintained a website at <allianceautogas.com> in connection with the Alliance AutoGas program. The website describes Alliance AutoGas as a network of independent propane marketers and conversion centers, founded by Blossman. Screenshots from the website over time show that Blossman has used the trademark ALLIANCE AUTOGAS in association with the program and business since 2009. The trademark is often represented with the slogan POWERED BY PROPANE in the following graphic form, which I will refer to as the “ALLIANCE AUTOGAS Design”:
[Description of inserted diagram: The same mark as the ’034 Mark above, but in colour. To the left and occupying about one-fifth of the length of the mark is a design element consisting of a flame motif in four shades of blue overlapping with a leaf motif in two shades of green. To the right and occupying the remaining four-fifths of the length of the mark, the words ALLIANCE AUTOGAS are written in dark blue block capitalized case letters above the words POWERED BY PROPANE in dark blue smaller block uppercase letters.]
(b) Agreement between Blossman and Caledon Propane Inc
[18] On August 1, 2012, Blossman entered an “Alliance AutoGas Dealer Agreement” with Caledon Propane Inc, a propane company based in Ontario [Blossman-Caledon Agreement]. Under the Blossman-Caledon Agreement, Caledon was given the exclusive right as Dealer to use the “Alliance AutoGas name and marks” with respect to its Alliance AutoGas customers and business in Ontario, Manitoba, and Quebec. Section 1(a) of the Blossman-Caledon Agreement, which relates to trademark rights and termination, reads as follows:
1.(a) To the extent permitted by applicable law, Dealer shall have the exclusive right to utilize the Alliance AutoGas name and marks with respect to its Alliance AutoGas customers and business within the Dealer’s Exclusive Area so long as this Agreement is in effect. Such right of use shall terminate immediately upon termination or expiration of this Agreement. Dealer shall also have the exclusive right to use any successor or related tradenames and marks developed by Blossman with respect to its Alliance AutoGas business within the Dealer’s Exclusive Area during the term of this Agreement. Blossman hereby represents and warrants that it is the sole owner of the tradenames and marks described in this Agreement and has the exclusive right to grant to Dealer the right to use them as described in this Agreement, and that such tradenames and marks will not violate or otherwise infringe the trademark or other intellectual property rights of any third party. Dealer may use the word AutoGas after expiration or termination of this Agreement as a name or mark in association with any business so long as Dealer does not use the word “Alliance” (or any word confusingly similar thereto) together with the word “AutoGas”.
[Underline added; italics in original.]
[19] According to Mr. Hoffman, after signing the Blossman-Caledon Agreement, Caledon established propane supply facilities in Canada branded with the ALLIANCE AUTOGAS trademarks, including one on Martin Grove Road in Toronto and others in Cornwall and Moncton. Mr. Hoffman also states that another company, Canwest Propane of Alberta, was licensed in 2013 and offered propane and conversion systems in association with the ALLIANCE AUTOGAS trademarks in Western Canada. AAP challenges the quality and nature of Mr. Hoffman’s evidence on these issues, and claims Blossman has not proved it has used or controlled the use of the ALLIANCE AUTOGAS trademarks in Canada. These issues are discussed below under the heading “Use of the ALLIANCE AUTOGAS trademarks in Canada.”
(c) Propane du Suroît and AAP
[20] In the summer of 2013, Mr. Grégoire was looking for information about the benefits of joining the Alliance AutoGas network. He called David Finder, then the National Energy Programs Manager at Blossman, after getting his name from the Alliance AutoGas website. Mr. Finder told Mr. Grégoire that Blossman had an agreement with Caledon with respect to Canada, and referred him to Hugh Sutherland Jr at Caledon.
[21] Mr. Grégoire spoke with Mr. Sutherland and by August 2013, they had reached an agreement for Caledon to assign its rights to Alliance AutoGas in Quebec to Propane du Suroît or a company owned by Propane du Suroît. There is no dispute that the new company owned by Propane du Suroît turned out to be AAP, which was incorporated a week before Mr. Grégoire signed the agreement on August 23, 2013. I will therefore simply refer to the agreement as the “Caledon-AAP Agreement” and to AAP as the party to the agreement.
[22] The Caledon-AAP Agreement was a brief letter agreement that attached a copy of the Blossman-Caledon Agreement. Under the Caledon-AAP Agreement, among other terms, AAP (i) would become a “member of Alliance AutoGas/AutoGaz for the territory of Quebec”; (ii) agreed to develop the Quebec market; and (iii) agreed to follow the Blossman-Caledon Agreement. The term of the Caledon-AAP Agreement was to be identical to the Blossman-Caledon Agreement. In signing the Caledon-AAP Agreement, Mr. Grégoire initialed each page of the Blossman-Caledon Agreement and signed a copy of it on behalf of Propane du Suroît.
[23] According to Mr. Hoffman, Blossman was not aware of the negotiations between Caledon and Propane du Suroît. However, by email dated September 13, 2013, Mr. Sutherland told Mr. Finder of Blossman that Caledon had reached an agreement with Propane du Suroît, which would be “looking after Quebec for Caledon Propane.” Mr. Finder welcomed Mr. Grégoire and invited him and Mr. Boulianne to a meeting in Mississippi.
[24] Later, in May 2015, Mr. Finder wrote to Messrs. Sutherland, Grégoire, and Boulianne, noting that “Alliance Propane is under Caledon at this time. (Per agreement between Caledon and Alliance AutoGas / Blossman Gas).” This appears to have been the understanding of all parties at the relevant times, namely that AAP was a sublicensee of Blossman pursuant to the Caledon-AAP Agreement.
(d) Development of the AAP Marks
[25] In 2013, AAP engaged a marketing company named Soleil to develop design trademarks and marketing material. Soleil prepared the logos that are represented in the AAP Marks, including the stylized ‘A’ motif in the ’456 and ’457 Marks and the eight-pointed star design in the ’409 Mark.
[26] As part of its work, Soleil delivered to AAP a form of proposal document or brochure entitled “IMAGINONS…” [“LET’S IMAGINE…”], which is dated December 16, 2013. It is clear from this document that the AAP Marks were developed using the ALLIANCE AUTOGAS Design as a starting point. While AAP contests this, the document contains consecutive pages that (i) reproduce the ALLIANCE AUTOGAS Design, together with a version of the ALLIANCE AUTOGAS Design in which the words ALLIANCE AUTOGAS are replaced by the words ALLIANCE AUTOPROPANE; and (ii) show a design progression from the flame and leaf elements of the ALLIANCE AUTOGAS Design to an early version of the stylized ‘A’ motif found in the AAP Marks, which is represented in blue and green.
[27] The Soleil document also includes a list of the company’s [translation] “main strengths.” The first of these was [translation] “[m]embership in the vast Alliance AutoGas North American network.” There seems little doubt based on the evidence as a whole, including the marketing materials, the timing of the adoption of the name, and the absence of any other explanation put forward by AAP, that the word ALLIANCE was included in both AAP’s name and in its trademarks because of, and in order to highlight, the connection with Blossman and the Alliance AutoGas network.
[28] The December 2013 Soleil design proposal document also shows an initial version of a trademark similar to the ’457 Mark, incorporating the phrase “Le plus grand réseau d’autopropaniers en Amérique” [“America’s largest autopropane retailers network,” a translation Mr. Grégoire accepted as fair]. The document does not show the star-shaped design of the ’409 Mark, although it appears in a later design style guide dated October 10, 2014.
[29] AAP applied to register the AAP Marks, as well as the ’034 Mark, on September 16, 2014. Mr. Grégoire agreed on cross-examination that AAP did not advise Blossman that it was applying to register the AAP Marks or the ’034 Mark. Mr. Hoffman’s evidence was that Blossman was not aware of the applications, either when they were made or when they were advertised.
(e) Termination of the Caledon-AAP Agreement and enforcement efforts
[30] On June 14, 2016, Superior Propane acquired Caledon. The parties appear to agree that this resulted in the termination of the Blossman-Caledon Agreement and thus the Caledon-AAP Agreement. AAP, in any event, does not assert that those agreements continue to be in force, that it has any ongoing rights under either the Blossman-Caledon Agreement or the Caledon-AAP Agreement, or that it has any rights by virtue of an agreement with Superior Propane.
[31] In an internal email dated June 23, 2016, Mr. Finder told another Blossman employee he had “written Alliance Autopropane to stop associating themselves with Alliance AutoGas as there is no agreement.” However, there is no copy of a letter or email from Mr. Finder to AAP in June 2016 in the record. On September 8, 2016, Blossman’s US lawyers wrote to AAP demanding it cease use of the “Alliance AutoGas trademark and trade name” and cease identifying itself as a member of the Alliance AutoGas network. As AAP points out, this letter did not demand that it cease use of the name “Alliance Autopropane,” the AAP Marks, or the word ALLIANCE.
[32] There were apparently settlement discussions that followed this letter that did not end in resolution. On August 31, 2018, Blossman’s Canadian lawyers wrote to AAP. In this letter, Blossman asserted its rights in the ALLIANCE AUTOGAS Design, noted that AAP had registered the ALLIANCE AUTOGAS and Design mark, and demanded that AAP, among other things: (i) cease using the ALLIANCE AUTOGAS Design or any trademark confusing with it; (ii) assign the ’034 Mark to Blossman; and (iii) refrain from using the statement “THE LARGEST AUTO PROPANE NETWORK IN NORTH AMERICA” in any promotional material. Again, other than the reference to confusing trademarks, no specific reference was made to the AAP Marks or the use of the name Alliance Autopropane. AAP relies on this fact in its acquiescence arguments, discussed below.
[33] Again, there were apparently unsuccessful efforts to resolve matters, and this application was commenced on October 5, 2020.
(4) Acquiescence
[34] Before turning to the merits of Blossman’s invalidity arguments, I will address AAP’s argument that Blossman cannot obtain the relief it seeks, including both invalidation and injunctive relief, because it has acquiesced in AAP’s use and registration of the AAP Marks. There is an open question as to whether the equitable defences of laches and acquiescence are available in response to an expungement application based on the statutory grounds of non-entitlement: Precision Door & Gate Service Ltd v Precision Holdings of Brevard, Inc, 2012 FC 496 at para 43, citing Ling Chi Medicine Co (HK) Ltd v Persaud, 1998 CanLII 31084 (FCA) at para 2 [Ling Chi (FCA)]. Assuming, without deciding, that a defence of acquiescence is available, in my view, AAP’s argument that Blossman has acquiesced in this case cannot succeed.
[35] Acquiescence is an equitable doctrine that may preclude a trademark owner from obtaining relief where it has consented to a breach of its rights and the breaching party has detrimentally relied on that consent: Boston Pizza International Inc v Boston Market Corp, 2003 FC 892 at paras 42–48. Justice Zinn of this Court recently reviewed the jurisprudence regarding acquiescence in trademark law: Norsteel Building Systems Ltd v Toti Holdings Inc, 2021 FC 927 at paras 32–36. As Justice Zinn noted, mere delay is insufficient to establish a defence of acquiescence: Norsteel at para 36. Rather, the rights holder must do something to encourage the wrongdoer, and the wrongdoer must act to its detriment in reliance on that encouragement: Norsteel at paras 33–35, citing Institut national des appellations d’origine des vins et eaux-de-vie et al v Andres Wines Ltd et al, 1987 CanLII 4051, [1987] OJ No 644 (SC) at para 210, aff’d 1990 CanLII 6726 (ON CA), leave to appeal to SCC refused, [1991] 1 SCR x (note); White Consolidated Industries, Inc v Beam of Canada Inc, [1991] FCJ No 1076 (TD); and Remo Imports Ltd v Jaguar Canada Ltd, 2005 FC 870 at para 53; see also Boston Pizza at paras 42–45; Precision Door at para 44.
[36] In support of its acquiescence argument, AAP points to the parties’ commercial relationship beginning in 2013; its use of the ALLIANCE AUTOPROPANE name, the AAP Marks, and the ’034 Mark since that date or shortly thereafter; and its application to register the marks in 2014. It argues that Blossman did not assert its rights until the commencement of these proceedings in 2020, after AAP had been using the marks to Blossman’s knowledge for many years and had obtained their registration.
[37] In my view, AAP has failed to show any encouragement or consent that would constitute acquiescence. With respect to use prior to 2016, AAP was a sublicensee of Blossman at this time, and was recognized by both Blossman and AAP as such. A licensee cannot reasonably point to its use of the licensed trademarks or any confusing trademarks during the period of a license as evidence of the licensor’s acquiescence.
[38] After the Blossman-Caledon Agreement terminated in 2016, Blossman wrote to AAP, asserting its trademark rights. Even leaving aside Mr. Finder’s apparent communication in June 2016, about which there is little information on the record, Blossman had asserted its rights by the time its US lawyers wrote to AAP in September 2016, and again when its Canadian lawyers wrote to AAP in August 2018.
[39] AAP relies on the fact that neither the US nor the Canadian demand letters expressly asks AAP to stop using the word ALLIANCE, the name ALLIANCE AUTOPROPANE or the AAP Marks. Rather, the letters are focused on the ALLIANCE AUTOGAS Design and the ’034 Mark, despite Blossman’s awareness of AAP’s use of ALLIANCE AUTOPROPANE. Indeed, the Canadian lawyer’s letter even refers to the THE LARGEST AUTO PROPANE NETWORK IN NORTH AMERICA slogan appearing on AAP’s website, without referring to the ’457 Mark that incorporates the French version of the slogan.
[40] It is certainly difficult to explain why Blossman, if it considered the ongoing use of ALLIANCE AUTOPROPANE or the AAP Marks to be confusing, or it considered the AAP Marks to be invalid, did not include express reference to those concerns in either the US or Canadian lawyers’ letters. Blossman’s Canadian counsel, who represented it on this application, was unable to explain this, other than to refer to the broad demand that AAP refrain from using any trademark confusing with the ALLIANCE AUTOGAS Design trademark, and to the existence of subsequent settlement discussions “relating to the marks at issue in this litigation.”
[41] Notwithstanding the absence of an express demand in the lawyers’ letters, I conclude that there is no evidence that Blossman encouraged, or even consented to, AAP’s ongoing use of ALLIANCE AUTOPROPANE or the AAP Marks. As Blossman notes, a demand was issued to AAP not to use confusing trademarks. In the context, I cannot conclude that Blossman focusing on the ALLIANCE AUTOGAS Design in its enforcement efforts constitutes acquiescence to the use of ALLIANCE AUTOPROPANE or the AAP Marks. At most, it may have delayed its enforcement steps as they relate to that mark, which is not acquiescence: Norsteel at para 36. While that delay may have an effect on damages, as we shall see, it does not prevent Blossman from seeking relief in this application including the invalidation of the trademarks or injunctive relief.
(5) Statutory framework and grounds of invalidity
[42] Blossman’s request to strike the four registered trademarks at issue from the Trademark Register is brought pursuant to subsection 57(1) of the Trademarks Act. That section permits this Court to strike out an entry in the Register on the application of “any person interested,” where the entry does not accurately define the existing rights of the registered owner. I accept Blossman’s contention that it falls within the broad definition of “person interested,” which has been described as a de minimis threshold: Yiwu Thousand Shores E-Commerce Co Ltd v Lin, 2021 FC 1040 at para 22; Vancouver Association for Injured Motorcyclists v Alliance for Injured Motorcyclists Canada, 2010 FC 1207 at para 10; Norsteel at paras 13–21. In bringing an application under section 57, Blossman has the onus to show the registrations are invalid on a balance of probabilities: Havana House Cigar & Tobacco Merchants Ltd v Skyway Cigar Store, 1998 CanLII 7773 (FC) at para 43, varied on other grounds, 1999 CanLII 9100 (FCA).
[43] The Court may make an order striking out a trademark registration under section 57 of the Trademarks Act where the registration is invalid under section 18: see, e.g., Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 at para 114; Norsteel at paras 1, 9–10, 76. Subsection 18(1) sets out five circumstances in which a trademark registration will be invalid:
When registration invalid
Quand l’enregistrement est invalide
18 (1) The registration of a trademark is invalid if
18 (1) L’enregistrement d’une marque de commerce est invalide dans les cas suivants :
(a) the trademark was not registrable at the date of registration;
a) la marque de commerce n’était pas enregistrable à la date de l’enregistrement;
(b) the trademark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced;
b) la marque de commerce n’est pas distinctive à l’époque où sont entamées les procédures contestant la validité de l’enregistrement;
(c) the trademark has been abandoned;
c) la marque de commerce a été abandonnée;
(d) subject to section 17, the applicant for registration was not the person entitled to secure the registration; or
d) sous réserve de l’article 17, l’auteur de la demande n’était pas la personne ayant droit d’obtenir l’enregistrement;
(e) the application for registration was filed in bad faith.
e) la demande d’enregistrement a été produite de mauvaise foi.
[44] Blossman relies on paragraphs 18(1)(b), (d), and (e), that is to say on grounds of distinctiveness, entitlement, and—in respect of the ’034 Mark only—bad faith. It puts forward its arguments on entitlement and bad faith before its distinctiveness arguments, and I will address them in this order.
(6) AAP was not entitled to register the trademarks
[45] As set out above, a trademark registration is invalid if the applicant was not the person entitled to secure the registration: Trademarks Act, s 18(1)(d). The “person entitled to secure the registration” referred to in paragraph 18(1)(d) is defined by section 16, which governs entitlement to registration. Subsection 16(1) reads as follows:
Entitlement to registration
Droit à l’enregistrement
16 (1) Any applicant who has filed an application in accordance with subsection 30(2) for the registration of a registrable trademark is entitled, subject to section 38, to secure its registration in respect of the goods or services specified in the application, unless at the filing date of the application or the date of first use of the trademark in Canada, whichever is earlier, it was confusing with
16 (1) Tout requérant qui a produit une demande conforme au paragraphe 30(2) en vue de l’enregistrement d’une marque de commerce enregistrable a droit, sous réserve de l’article 38, d’obtenir cet enregistrement à l’égard des produits ou services spécifiés dans la demande, à moins que, à la date de production de la demande ou à la date à laquelle la marque a été employée pour la première fois au Canada, la première éventualité étant à retenir, la marque n’ait créé de la confusion :
(a) a trademark that had been previously used in Canada or made known in Canada by any other person;
a) soit avec une marque de commerce antérieurement employée ou révélée au Canada par une autre personne;
(b) a trademark in respect of which an application for registration had been previously filed in Canada by any other person; or
b) soit avec une marque de commerce à l’égard de laquelle une demande d’enregistrement avait été antérieurement produite au Canada par une autre personne;
(c) a trade name that had been previously used in Canada by any other person.
c) soit avec un nom commercial qui avait été antérieurement employé au Canada par une autre personne.
[Emphasis added.]
[Je souligne.]
[46] The foregoing (current) version of section 16 applies in this case even though it came into force after the trademarks at issue were registered: Trademarks Act, s 73(1). I note for completeness that while paragraph 18(1)(d) is “subject to section 17,” that section has no application in this case given the identity of the applicant and the timing of the application: Trademarks Act, s 17.
(a) Relevant dates for analysis
[47] By combined operation of paragraph 18(1)(d) and subsection 16(1), the relevant date for the assessment of invalidity on the basis of entitlement is the earlier of the filing date or the date of first use in Canada. AAP applied for each of the four trademarks at issue on September 16, 2014. In the case of the ’034 Trademark, the application was filed on the basis of proposed use, suggesting that it had not been used by that date. While Mr. Grégoire stated in his affidavit that the ’034 Trademark, among others, had been used online since at least the summer of 2014, AAP clarified in response to undertakings that the mark was first used on its website in April 2015. As there is no evidence of a prior use in other circumstances, the date of application is the earlier date and therefore the relevant date.
[48] For each of the AAP Marks, Mr. Grégoire’s evidence is that they were used since at least the summer of 2014. This is consistent with the trademark applications, which identify various dates of first use between May 20 and August 15, 2014, for the different services identified in the applications, and the 2013–2014 dates of the marketing materials. Neither party argued the confusion analysis was any different, or would yield any different result, based on the difference between May and September 2014. For the sake of my analysis, I will use May 20, 2014, as the relevant date for the AAP Marks. In doing so, I should not be taken to accept that AAP “used” the trademarks within the meaning of section 4 of the Trademarks Act at a time when it was a sublicensee of Blossman: see, e.g., Citrus Growers Assn Ltd v William D Branson Ltd, [1990] 1 FC 641 at pp 646–647 and the discussion below regarding subsection 50(1) of the Trademarks Act and use by distributors or licensees.
[49] As of these relevant dates, AAP would not have been entitled to registration, and the trademark registrations at issue will therefore be invalid, if the trademarks were confusing with a trademark that Blossman had previously used or made known in Canada or a trade name Blossman had previously used in Canada: Trademarks Act, ss 16(1)(a), (c); 18(1)(d). I will therefore turn next to the issue of whether Blossman has established that it used its trademarks in Canada by the relevant dates.
(b) Use of the ALLIANCE AUTOGAS trademarks in Canada
[50] Blossman claims it has used the trademarks ALLIANCE AUTOGAS, ALLIANCE AUTOGAS POWERED BY PROPANE, and ALLIANCE AUTOGAS Design, as well as the trade name ALLIANCE AUTOGAS, in Canada since 2012 through its licensees. As I conclude that Blossman’s allegations regarding the trademarks ALLIANCE AUTOGAS and ALLIANCE AUTOGAS Design are determinative, I will focus the analysis below on these trademarks and need not address the use of the trade name or the trademark ALLIANCE AUTOGAS POWERED BY PROPANE: Masterpiece at para 61.
[51] A trademark is used in association with services if it is “used or displayed in the performance or advertising of those services”: Trademarks Act, ss 2 (“use”), 4(2). Where a trademark is used by a licensee and the trademark owner has direct or indirect control of the character or quality of the services, the use has the same effect as use by the owner and accrues to the owner’s benefit: Trademarks Act, s 50(1).
[52] Blossman’s evidence of use in Canada comes in the form of Mr. Hoffman’s affidavit and the documents he exhibits to that affidavit. Although Mr. Hoffman did not join Blossman until 2014, he had worked with Blossman since 2012, since his former employer, Keystone, was a Blossman client. As summarized above, Mr. Hoffman’s evidence speaks to the use of the ALLIANCE AUTOGAS trademarks in Canada before 2014 by two licensees, Caledon and Canwest. I will address the evidence with respect to each of these in turn, including AAP’s criticisms of the evidence, and will then address AAP’s other arguments with respect to use, including whether Blossman has established that it controlled the character and quality of the services offered by Caledon and Canwest.
(i) Use by Caledon
[53] Mr. Hoffman asserts that on October 25, 2012, when he was with Keystone, he went to an Esso gas station on Martin Grove Road in Toronto at the invitation of a Caledon employee named George Olah, who was also a vice-president of “Alliance AutoGas Canada.” Mr. Hoffman states there was an ALLIANCE AUTOGAS branded propane-filling facility at the gas station, that he was able to refuel his Keystone truck with autogas that day, and that taxis and limousines running on autogas refueled at the facility. In connection with this evidence, Mr. Hoffman exhibited to his affidavit two photographs: one of a large propane storage tank bearing the ALLIANCE AUTOGAS Design, attached to a propane filling pump, and one of a Caledon fleet vehicle bearing the ALLIANCE AUTOGAS Design adorned with a maple leaf.
[54] AAP challenges the reliability of this evidence based on Mr. Hoffman’s cross-examination. During this cross-examination, Mr. Hoffman initially stated that he personally took the two pictures, and that the picture of the propane tank was at the Martin Grove location, while the picture of the truck may have been at a nearby Keystone branch location. In response to further questions, Mr. Hoffman said that either he or Mr. Olah might have taken the picture of the propane tank, but that it was from the Martin Grove site. When later presented with an image from Google Maps said to be the Martin Grove location and said to include a building of a different colour (the image in question was not before the Court), Mr. Hoffman clarified his evidence by saying “there were numerous fill sites in that area. Could this be a different fill site? Yes. Looking back at this now, yes.” In re-examination, Mr. Hoffman confirmed that he attended a Caledon site with ALLIANCE AUTOGAS trademarks on a propane tank that was “definitely in Toronto, definitely in Canada, and definitely photographed by myself, and George Olah has the photographs.”
[55] AAP suggests Mr. Hoffman’s credibility is tainted by this change in evidence. It also notes Mr. Hoffman was unable to speak to the particular dates that the Martin Grove location opened or ceased operating. I agree the cross-examination showed that elements of Mr. Hoffman’s evidence were not as precise as they were originally portrayed to be, and that Mr. Hoffman may have erred or overstated some aspects of his evidence. However, I cannot accept AAP’s submission that this undermines his credibility to the extent of rejecting his evidence in its entirety, given the questions at issue on this application.
[56] In particular, the main question at this stage is whether Blossman, through its licensee Caledon, had used the ALLIANCE AUTOGAS trademarks in Canada before AAP’s use in May 2014. Mr. Hoffman’s evidence, based on direct experience as a customer, was that he had personally seen the trademarks in use in the course of trade in late 2012, both through its appearance at a propane filling station in Toronto and through markings on a Caledon vehicle. The photographic evidence, which shows the use of the ALLIANCE AUTOGAS Design on propane equipment also bearing the name Caledon Propane Inc, is consistent with and confirms this evidence, regardless of who took the photograph, and even if Mr. Hoffman recognized that he was not fully certain whether it represented the Martin Grove location or another location.
[57] These displays of the ALLIANCE AUTOGAS Design constitute the use or display of the trademark in the performance or advertising of the autopropane delivery services offered by Caledon: Trademarks Act, s 4(2). I am satisfied that use of the ALLIANCE AUTOGAS Design trademark also constitutes use of the trademark ALLIANCE AUTOGAS, given that these words are the predominant aspect of the design mark: Caterpillar Inc v Puma SE, 2021 FC 974 at para 101, citing Ridout & Maybee LLP v Omega SA, 2004 FC 1703 at para 10.
[58] Mr. Hoffman also states that beginning in 2013, Keystone obtained Caledon’s assistance in converting Keystone fleet vehicles for use with autogas. These services were provided in Toronto in association with the ALLIANCE AUTOGAS trademarks. This evidence was not disturbed on cross-examination. I am satisfied that this evidence, based on Mr. Hoffman’s personal knowledge, is sufficient to show use in 2013 of the ALLIANCE AUTOGAS trademarks in association with the installation of autogas conversion systems.
[59] Mr. Hoffman states that Keystone’s converted vehicles were located in Cornwall and Moncton and that he is “aware” that Blossman had set up ALLIANCE AUTOGAS branded fuelling stations in those locations in 2012 or 2013. I am satisfied that Mr. Hoffman would have knowledge of the location of his company’s fleet vehicles and