T-476-96
| IN THE MATTER OF section 45 of the Trade-marks Act, R.S.C. 1985, c. T-13, as amended |
| AND IN THE MATTER OF an appeal from the decision of the Registrar of Trade-marks dated December 28, 1995 with respect to TMA216,726 for BRITTANIA in the name of Pacific Rim Sportswear Company Ltd. |
BETWEEN:
BRITTSPORT LIMITED
Appellant
(Requesting Party)
- AND -
PACIFIC RIM SPORTSWEAR COMPANY LTD.
Respondent
(Registrant)
REASONS FOR JUDGMENT
LUTFY J.
Pursuant to section 45 of the Trade-marks Act ("the Act") and at the request of the appellant Brittsport Limited, the Registrar issued a notice on October 13, 1993 requiring the respondent Pacific Rim Sportswear Company Ltd. to show that its trade-mark "Brittania" was still in use and, if not, to show special circumstances which excuse the absence of such use. In her decision, Ms. Denise Savard, Senior Hearing Officer for the Registrar of Trade-marks ("the Registrar"), refused to expunge the respondent's trade-mark concerning wares described as "shirts" and "jeans". It is this portion of the decision that is under appeal pursuant to section 56 of the Act.
At the time the notice was issued, section 45 of the Act read as follows:
45. (1) The Registrar may at any time and, at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee shall, unless he sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring him to furnish within three months an affidavit or statutory declaration showing, with respect to each of the wares or services specified in the registration, whether the trade-mark is in use in Canada and, if not, the date when it was last so in use and the reason for the absence of such use since such date.
45. (1) Le registraire peut, et doit sur demande écrite présentée après trois années à compter de la date de l'enregistrement d'une marque de commerce, par une personne qui verse les droits prescrits, à moins qu'il ne voie une raison valable à l'effet contraire, donner au propriétaire inscrit un avis lui enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration solennelle indiquant, à l'égard de chacune des marchandises ou de chacun des services que spécifie l'enregistrement, si la marque de commerce a été employée au Canada et, dans la négative, la date où elle a été ainsi employée en dernier lieu et la raison de son défaut d'emploi depuis cette date.
The test to be applied in a section 45 proceeding was changed in a substantial manner in amendments which came into force respectively on January 1, 19941 and January 1, 1996.2 On March 30, 1994, subsequent to the first of these amendments, the Office of the Registrar announced the policy of applying the new provisions to all section 45 cases whether they were commenced before or after January 1, 1994.3 In a 1995 decision,4 the Registrar determined that section 45 proceedings "... do not touch upon any vested or substantive rights of a requesting party" and that the purpose of the provision is "purely functional". From these principles, the Registrar concluded that the amendments could be applied retroactively without causing prejudice to the requesting party.
The Registrar adopted a similar view concerning the retroactivity of the January 1, 1996 amendments.5
The Registrar's retroactive application of the amendments to section 45 raises serious concerns. Substantive statutory law is presumed not to be retroactive.6 The Registrar considers that no prejudice would be suffered by the requesting party as a result of the January 1, 1994 amendments and that no substantive rights would be affected. However, a registrant may in certain circumstances be prejudiced by the statutorily prescribed relevant period. In a number of decisions, evidence of use of the registered trade-mark shortly subsequent to the issuance of the notice has been considered in assessing contemporaneous use under section 45 as it read prior to the January 1, 1994 amendments. Under the legislation enacted in 1994, evidence of subsequent use would not appear to come within the relevant two year period.
In my opinion, therefore, it is appropriate to consider this appeal on the basis of the law which was in force when the Registrar's notice was issued on October 13, 1993. The disposition of the appeal would have been the same under the new provisions for the reasons discussed below. Accordingly, it has not been necessary in this case to rule on the Registrar's practice of retroactivity.
Counsel for the appellant referred to the scope of review enunciated in McDonald's Corp. v. Silicorp Ltd.7 which was in the context of an opposition proceeding. The standard of review to be applied in a section 56 appeal from a decision of the Registrar under section 45 of the Act was set out by Teitelbaum, J. in Belvedere International Inc. v. Sim & McBurney.8 This Court should only intervene if the Registrar has failed to properly interpret, or failed altogether to consider, the facts before her.
The Registrar's decision concerning the wares described as "shirts" was based on transactions in 1992. The decision concerning "jeans" was made on evidence during the 1990-1994 period.
Total sales of clothing items in the Brittania line for 1992 totalled $64,000. The respondent produced four 1992 sales invoices to Sears Canada bearing the Brittania trade-mark and apparently relating to shirts. A fifth 1992 invoice to Sears for shirts is specifically identified as being a style on which a Brittania label was sewn and another attached by hang-tag.
The Registrar concluded that the 1992 invoices showed a transfer of wares and maintained "shirts" on the register. The appellant points to ambiguities in the evidence with respect to shirts and suggests that this evidence should be disregarded. In my view, there are no significant ambiguities. I find that the Registrar has properly considered and interpreted the facts before her with respect to shirts.
Total sales of all clothing items in the Brittania line in 1990 was $96,000. The respondent produced 1990 invoices to Sears Canada and Towers Department Stores, bearing the Brittania trade-mark and apparently relating to pants. One of these invoices refers specifically to a style number with respect to which the respondent produced a sample pair of jeans with the Brittania trade-mark. I am satisfied that there is no ambiguity in the evidence that Brittania pants are jeans in the context of this case. There were no other sales of jeans prior to the issuance of the notice on October 13, 1993.
Subsequent to the issuance of the notice, the respondent received at least one order for Brittania jeans from Eaton's in March 1994. Negotiations leading up to this order began at least as early as September 1993. There is evidence of the respondent "currently in various stages (of) completing" two other orders. The total value of the transactions is approximately $15,000.
The respondent explains that its traditional customers fundamentally altered the way they did business in 1993. The large retail department stores began to rely more on their own brand names and less on the trade names of their manufacturers. For this and for other reasons, it experienced financial difficulties due to reduced sales and underwent a restructuring which was completed by the end of January 1994. Through this period, the respondent states that it continued to market its Brittania line.
The Registrar decided to maintain "jeans" on the register for these reasons:
| On reviewing the evidence furnished and the parties' arguments, I find this matter to be clearly borderline. There is no evidence of any sales of "pants" in 1991, 1992 and 1993 and Mr. Lee has only provided the reason for the absence of use for the year 1993. Nevertheless, it appears as if the registrant continued to market the Brittania line and in fact was taking active steps prior to the date of the notice to recommence the sale of "pants" and the order from "Eaton's" confirms the registrant's serious intention to recommence such use. In my view, this is an important factor to take into consideration. Consequently, I find that at the date of the notice, the trade-mark was not "deadwood" for "pants". Keeping in mind the intent and purpose of Section 45, I conclude that the wares "jeans" ought to be maintained on the register. |
The decision of the Registrar can be interpreted as a finding either that there was use of the trade-mark or that there existed special circumstances justifying the disuse.
Sales after the issuance of the notice can constitute relevant evidence of use, at least in circumstances in which negotiations have taken place prior to the issuance of the notice. In John Labatt Ltd. v. Rainier Brewing Co. et al.,9 the Court of Appeal concluded that a transfer of wares subsequent to the issuance of the notice can be use within the meaning of section 45. Accordingly, the conclusion that there was use of the trade-mark at the time of issuance of the notice was reasonably open to the Registrar on the evidence before her.
The decision in John Labatt Ltd. may not be applicable in this case if the section 45 amendments of January 1, 1994 are retroactive. Pursuant to these amendments, the owner of the trade-mark must show that it was in use "... during the two year period immediately preceding the date of the notice ...".10 This would seem to exclude any transfer of wares subsequent to the notice as coming within the relevant period. However, I need not decide this issue in the present case because, in my view, the Registrar's decision not to expunge the respondent's trade-mark concerning "jeans" on the basis of special circumstances for the absence of use is a proper one.
The special circumstances which are put forth to justify a period of disuse of the trade-mark must be weighed according to three criteria: the length of time during which the trade-mark has not been in use; whether the reasons for disuse were beyond the registrant's control; and whether there was, through the period of disuse, a serious intent to resume use shortly.11 In the present case, the disuse in 1993, particularly as the result of the decision by the respondent's clients to market their own brand names, can be characterized as constituting circumstances beyond the respondent's control. As the respondent had entered into negotiations with Eaton's prior to the notice being issued, there was a serious intention to resume use.
The Registrar's decision concerning "jeans" can be supported on the basis of John Labatt Ltd. and the use which was concluded subsequent to the issuance of the notice or, if the amendments to section 45 are retroactive, on the basis of the special circumstances for the absence of use in 1993.
Accordingly, I conclude that the Registrar's decision is supported by the evidence and not based on a wrong principle with respect to the use of the wares "shirts" and "jeans". The appeal is therefore dismissed with costs to the respondent.
__________________________________
JUDGE
OTTAWA, ONTARIO
December 6, 1996
__________________
1 S.C. 1993, c. 44, s. 232, proclaimed into force by SI/94-1.
2 S.C. 1994, c. 47, s. 200, proclaimed into force by SI/96-1.
3 see Journal of Trade-marks, Vol. 44, No. 2057, at 153.
4 Riches, McKenzie & Herbert v. 'Taliano Inc. (1996), 65 C.P.R. (3d) 98 at 99-100.
5 U.L. Canada Inc. (Re:), [1996] T.M.O.B. No. 132 (July 8, 1996).
6 R. Sullivan, Driedger on the Construction of Statutes, 3d ed. (Toronto: Butterworths, 1994) p. 512.
7 (1989), 24 C.P.R. (3d) 207 (F.C.T.D.).
8 (1993), 53 C.P.R. (3d) 522 (F.C.T.D.).