IN THE MATTER OF AN OPPOSITION
by Starbucks Corporation d.b.a. Starbucks
Coffee Company to application no. 1231374
for the trade-mark TAYO filed by Food Steps
International Inc.
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The Record
[1] On September 23, 2004, Food Steps International Inc. (hereinafter “Food Steps”) filed an
application to register the trade-mark TAYO, based on use in Canada in association with:
vegetable based non-alcoholic beverages, protein based meal replacement drinks (since August 18, 2003);
non-diary frozen desserts namely ice cream, sherbert and gelato (since October 31, 2003);
fruit flavoured non-alcoholic beverages, non-alcoholic carbonated beverages, soy based beverages (since June 30, 2004).
[2] The subject application was advertised for opposition purposes in the Trade-marks Journal issue dated July 13, 2005, and was opposed by Starbucks Corporation d.b.a. Starbucks Coffee Company (hereinafter “Starbucks”) on December 13, 2005. The Registrar forwarded a copy of the statement of opposition to the applicant on January 31, 2006, as required by Section 38(5) of the Trade-marks Act. The applicant responded by filing and serving a counter statement. During the course of the proceedings the opponent was granted leave to file an amended statement of opposition and the applicant was granted leave to file an amended counter statement.
[3] The opponent’s evidence consists of the affidavits of Karin Koonings; Roy Wong; and Holman Wang, as well as certified copies of the opponent’s trade-mark registrations the particulars of which are summarized below:
Trade-mark &
Registration No.
Wares &
Services
TAZO
regn. no. 510244 tea
TAZO
regn. no. 574263 tea; herbal tea for food purposes; beverages made with a base of tea; beverages made with a base of herbal tea for food purposes; tea based beverages with fruit flavoring, flavoring syrups to add to beverages, tea based concentrates; herbal tea based concentrates for food purposes; non-carbonated soft drinks, syrups for making soft drinks, syrups for making fruit drinks, fruit flavored soft drinks, fruit juices, fruit based soft drinks flavored with tea.
mail order, online and catalogue sales services featuring tea, tea based beverages and housewares related to tea.
regn. no. 569159
herbal and non-herbal tea, non-alcoholic beverages made with a base of herbal and non-herbal tea, non-alcoholic tea-based beverages with fruit flavoring, flavoring syrups to add to beverages, herbal and non-herbal tea-based concentrates; non-carbonated soft drinks, syrups for making soft drinks, syrups for making fruit drinks, fruit flavored soft drinks, fruit juices, fruit-based soft drinks flavored with tea.
regn. no. 662905
tea (herbal and non-herbal), tea beverages, beverages made with a base of tea, iced tea, ready-to-drink tea, fruit drinks, liquid beverage mixes used to make non-alcoholic tea-based beverages and non-alcoholic fruit-based beverages; non-carbonated soft drinks.
[4] The applicant’s evidence consists of the affidavits of Ian Toews and Lisa Saltzman. Both parties filed a written argument and both parties attended at a hearing held on September 21, 2009.
Statement of Opposition
[5] The first ground of opposition alleges that the application does not conform to Section 30
of the Trade-marks Act because the applicant has not used the applied for mark or alternately has not used the mark since the dates claimed in the application.
The second ground of opposition alleges that the applied for mark TAYO is not registrable, pursuant to Section 12(1)(d) of the Act, because it is confusing with the opponent’s trade-mark registrations referred to earlier.
[6] The third ground alleges that the applicant is not entitled to register the applied for mark, pursuant to Section 16(1)(a), because at the dates of first use claimed in the application the mark TAYO was confusing with the opponent’s above mentioned trade-marks which had been previously used in Canada by the opponent in association with the same type of goods identified in the subject application.
The fourth ground alleges that the applied for mark TAYO is not adapted to distinguish or actually distinguishes the wares of the applicant from the wares of the opponent.
Opponent’s Evidence
Karin Koonings
[7] Ms. Koonings identifies herself as an executive with the opponent. Her testimony is that the opponent is the world’s leading retailer, roaster and brand of specialty coffee, with over 12,000 retail locations throughout the world. In addition to brewed coffee and espresso beverages, the opponent’s coffeehouses also serve tea, blended and bottled beverages, pasteries and confections. The opponent opened its first Canadian store in Vancouver in 1987. The first Ontario stores opened in 1996. As of September 2006, there were about 683 Starbucks retail locations throughout Canada. The opponent and its predecessor in title have been using the trade-mark TAZO in association with tea and other beverages since February 1997. The product is sold
(a) as packaged tea in filter bags and as loose tea, (b) as a tea beverage, including a tea latte, prepared and sold in Starbucks’ coffee bars and third party grocery stores, and (c) as a ready to drink bottled or packaged beverage. Items under (a) and (c) above are also sold by independent retailers including SAFEWAY, LOBLAWS, A&P, DOMINION, and SOBEYS. Exhibit materials attached to Ms. Koonings’ affidavit show that the opponent’s mark TAZO is prominently featured on its tea and beverage products. Sales under the opponent’s TAZO marks amounted to about $26,000 (representing about 9,000 units sold) in the year 1999 and gradually increased to about $2.86 million (representing about 286,000 units sold) in the year 2006.
[8] TAZO tea beverages which are prepared in-store are served in beverage cups. The customer would (i) view a menu board with the trade-mark TAZO appearing with product description and prices, (ii) order the TAZO product from a Starbucks’ employee, (iii) receive the beverage with a printed label affixed to the cup stating that the cup contains a TAZO tea beverage. The opponent has spent over $1 million in Canada on advertising TAZO products in the five year period ending mid-September 2006.
There are indications that in-store branding has created significant public awareness of the mark TAZO. It is estimated that in Canada there are over 900 million in-store branded impressions of the trade-mark TAZO annually through menu board advertising, sampling and table toppers. Sales of TAZO products at non-Starbucks retail locations has also contributed to public awareness of the trade-mark TAZO.
[9] It appears from the exhibit material attached to Ms. Koonings’ affidavit that a fair proportion of the opponent’s sales of tea and tea beverage products are sold solely under the design mark shown below, or sold double marked with the design mark and the word mark TAZO.
Often the design mark is given prominence over the word mark. As the design mark is as distinctive as the word mark, and not simply a minor variant of the word mark, it is difficult to ascertain whether the opponent’s simultaneous use of both marks detracts from the distinctiveness that would accrue to the mark TAZO used solely.
[10] The opponent’s concern with the subject application for the mark TAYO is expressed at paragraph 27 of Ms. Koonings’ affidavit:
. . . the use by the Applicant of the trade-mark TAYO in association with products which are sold in the same channel of trade as Starbucks’ products will lead to confusion in the marketplace. The source of the Applicant’s products could be mistaken as being the Opponent, given Starbucks’ presence in the market segment and Starbucks’ extensive use of the trade-mark TAZO.
Ms. Koonings further notes that the applicant “has applied for other confusingly similar trade-marks having a strong association with coffee and tea” namely, TAYOLATTÉ, TAYOMOCHA, and TAYOCCINO.
[11] I note in passing that the trade-mark application for TAYOMOCHA, mentioned above, was the subject of an opposition proceeding between the parties herein. The opposition was rejected on the basis that the mark TAYOMOCHA was not confusing with the mark TAZO: see Starbucks Corporation d.b.a. Starbucks v. Food Steps International Inc., re application no. 1232110, TMOB, June 10, 2009, yet unreported. It appears that the evidence filed in the TAYOMOCHA case, above, is essentially the same as the evidence filed in the instant case. The Board decision in the TAYOMOCHA case, above, is presently under appeal to the Federal Court, Trial Division.
Roy Wong
[12] Mr. Wong is a principal of a business intelligence and investigations firm. His evidence is to the effect that the applicant sells a non-dairy beverage under the trade-mark TAYO & Design. The design elements of the mark are comprised of an oval centred in the middle of the top V portion of the letter Y, and the letter Y itself is somewhat asymmetrical, broad and rounded. Thus, the design components suggest a standing human figure with outstretched arms, as shown below:
It appears that the non-flavoured TAYO & Design product can be used as a milk substitute in the preparation of specialty coffees such as lattes and mochas. However, the distribution of TAYO & Design products to retail coffee shops was not put into operation because the applicant did not have a cost effective distribution network. Mr. Wong’s evidence also corroborates Ms. Koonings’ evidence concerning how the opponent’s in-store branding methods create customer awareness of TAZO beverages. Mr. Wong’s evidence will be discussed in more detail in the context of the first ground of opposition alleging non-compliance with Section 30(b).
Holman Wang
[13] Mr. Wang is a lawyer with the firm representing the opponent. Mr. Wang’s evidence concerns TAYO & Design products described on the Internet as a non-dairy alternative to milk and suitable for use in specialty coffee drinks such as lattes, mochas and cappuccinos.
Applicant’s evidence
Ian Toews
[14] Mr. Toews is the President of the applicant company Food Steps. The applicant was incorporated as a Federal corporation in November 2001. In July 2003 the applicant commenced commercial production of the TAYO & Design brand beverage at which time it was distributed to retail grocery stores in the lower mainland of British Columbia and Vancouver Island. The TAYO & Design beverage was a newly developed product made from potato starch intended for lactose intolerant people who did not consume soya based products. The mark was registered in July 2004 under registration no. 614751 for various types of non-alcoholic beverages.
[15] TAYO & Design products have been distributed across Canada to retail stores including THRIFTY, IGA, and SOBEYS. As of mid-2007, TAYO & Design products were sold in the refrigerated dairy case alongside traditional milk products, however, the applicant would soon be launching a non-refrigerated “shelf stable” product. Gross sales under the mark TAYO & Design amounted to about $47,000 in 2003, and averaged about $325,000 for the three year period 2004 - 2006. Sales in the first quarter of 2007 amounted to $37,000. The total advertising costs to promote the TAYO & Design trade-mark amounted to about $1 million from 2003 to the end of the first quarter of 2007. The mark appears on all product labels, product packaging and advertising material consisting of consumer coupons, consumer information handouts and brochures. Exhibit material attached to Mr. Toews’ affidavit confirm that the mark TAYO & Design is prominently displayed on the applicant’s beverage products.
[16] As of April 2007, the applicant was also the owner of the mark GELATAYO, registration no. 643072; allowed application no. 1232112 for the mark TAYOCCINO; and application no. 1232111 for the mark TAYOLATTÉ.
Mr. Toews’ views on the subject opposition are expressed at paragraph 32 of his affidavit:
. . . the Opponent’s TAZO trade-marks and Food Steps’ TAYO trade-mark have co-existed in the marketplace in similar channels of trade for at least the last four years without a single instance of actual confusion. Having regard to this . . . it is unlikely that confusion will occur in the future.
I assume that the four year period referred to by Mr. Toews begins in July, 2003, that is, when the applicant commenced use of its mark TAYO & Design, and ends on April 26, 2007, the date of execution of Mr. Toews’ affidavit.
[17] I note that Mr. Toews has not evidenced any use of the word mark TAYO in association with any of the wares specified in the subject application. Rather, his evidence relates to use of the mark TAYO & Design in association with a potato based beverage intended as a substitute for milk. The product is sold in typical milk containers and in three flavours namely, original, chocolate and vanilla. I would also note that the opponent’s use of the mark TAYO & Design may be considered to be equivalent to use of the word mark TAYO per se as one mark is, in my view, a minor variant of the other: see Nightingale Interloc v. Prodesign Ltd. (1984), 2 C.P.R.(3d) 535 at 538 under the heading Principle 2. Thus, for the purposes of this proceeding, I am able to conclude that the public began to be exposed to the applicant’s word mark TAYO (for a milk substitute) beginning in July, 2003. However, I am not able to conclude that the public was at any material time exposed to the mark TAYO used in association with any of the wares specified in the subject application.
Lisa Saltzman
[18] Ms. Saltzman is with a trade-marks searching firm. Her affidavit serves to introduce into evidence a search of the trade-marks register for marks comprised of the letter strings TAYO or TAZ or TA[ ]Z, where the empty square bracket may be filled by any letter of the alphabet. From my review of the exhibits attached to Ms. Saltzman’s affidavit, I conclude that there are two third party registrations namely, TAZA Design (for coffee) and TAZZA (for various wares including tea and cocoa beverages) which bear some resemblance to the opponent’s mark TAZO, but no marks which bear a similar resemblance to the mark TAYO (that is, no marks which include the letter string TAYO were located).
Main issue & Legal Onus
[19] The main issue in this proceeding is whether the applied for mark TAYO for use in association with the wares specified in the subject application is confusing with the opponent’s mark TAZO used in association with tea and related beverages. The material dates to assess the issue of confusion are (i) the date of decision, with respect to the second ground of opposition alleging non-registrability; (ii) the dates of first use of the mark (August 18 and October 31, 2003 and June 30, 2004) with respect to the third ground of opposition alleging non-entitlement (see Section 16(1) of the Trade-marks Act); (iii) the date of opposition, in this case December 13, 2005, in respect of the issue of non-distinctiveness: for a review of case law concerning material dates in opposition proceedings: see American Retired Persons v. Canadian Retired Persons (1998), 84 C.P.R.(3d) 198 at 206 - 209 (F.C.T.D.).
[20] The legal onus is on the applicant to show that there would be no reasonable likelihood of confusion, within the meaning of Section 6(2) of the Act, shown below, between the applied for mark TAYO and the opponent's mark TAZO:
6(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.
The presence of an onus on the applicant means that if a determinate conclusion cannot be reached once all the evidence is in, then the issue must be decided against the applicant: see John Labatt Ltd. v. Molson Companies Ltd. (1990) 30 C.P.R.(3d) 293 at 297-298 (F.C.T.D.). The test for confusion is one of first impression and imperfect recollection. Factors to be considered, in making an assessment as to whether two marks are confusing, are set out in Section 6(5) of the Act: the inherent distinctiveness of the marks and the extent to which they have become known; the length of time each has been in use; the nature of the wares, services or business; the nature of the trade; the degree of resemblance in appearance or sound of the marks or in the ideas suggested by them. This list is not exhaustive; all relevant factors are to be considered. All factors do not necessarily have equal weight. The weight to be given to each depends on the circumstances: see Gainers Inc. v. Tammy L. Marchildon and The Registrar of Trade-marks (1996), 66 C.P.R.(3d) 308 (F.C.T.D.).
Consideration of Section 6(5) Factors
Inherent and Acquired Distinctiveness
Length of Time in Use
[21] The opponent’s mark TAZO possesses a high degree of inherent distinctiveness because it is a coined word without any particular connotation which relates to the opponent’s wares or services. Similarly, the applied for mark TAYO possesses a relatively high degree of inherent distinctiveness because it is a coined word without any particular connotation which relates to the applicant’s wares. The inherent distinctiveness of the parties’ marks are underscored by Ms. Saltzman’s evidence which identified only two marks resembling the opponent’s mark TAZO and none as similar to the mark TAYO.
[22] The opponent’s mark TAZO would have acquired a fair degree of reputation in Canada as of the earliest material date (August 18, 2003, regarding the issue of confusion) owing to use and promotion of the mark beginning in early 1997. The opponent’s mark TAZO continued to acquire distinctiveness, via sales under the mark and promotion of the mark, through to the latest material date which is the date of my decision. The applied for mark TAYO is based on use in Canada beginning on August 18, 2003, for vegetable and protein based beverages, and would not have acquired any reputation for those wares at that early material date. As discussed previously, the applicant has not evidenced that the mark TAYO was used at any material time in association with any of the wares specified in the subject application. However, I am able to conclude that the mark TAYO, as a variant of the mark TAYO & Design, would have begun to acquire distinctiveness (for a milk substitute beverage) beginning in July 2003. The mark TAYO continued to acquire such distinctiveness through to the latest material date.
Nature of the Wares and Trades
[23] In regard to the wares and trades of the parties, it is the applicant’s statement of wares in the application and the opponent’s statement of wares in its registrations that govern, at least in respect of the ground of opposition based on Section 12(1)(d) of the Act: see Mr. Submarine Ltd. v. Amandista Investments Ltd. (1987), 19 C.P.R.(3d) 3 at 10-11 (F.C.A.), Henkel Kommanditgesellschaft v. Super Dragon (1986), 12 C.P.R.(3d) 110 at 112 (F.C.A.) and Miss Universe, Inc. v. Dale Bohna (1994), 58 C.P.R.(3d) 381 at 390-392 (F.C.A.). However, those statements must be read with a view to determining the probable type of business or trade intended by the parties rather than all possible trades that might be encompassed by the wording. For this purpose, evidence of the actual trades of the parties is useful: see McDonald’s Corporation v. Coffee Hut Stores Ltd. (1996), 68 C.P.R.(3d) 168 at 169 (F.C.A.). The wares specified in the subject application namely, vegetable, protein, and soy based beverages and non-dairy desserts, are intrinsically different from the opponent’s tea and tea beverage products. However, the parties’ wares overlap in the general category of refreshment drink products. It would appear therefore that there is potential for significant overlap in the parties’ channels of trade through third party retail food outlets and in fact both parties sell their wares through the SOBEYS and IGA retail chains. Further, it would appear that the applicant’s wares are suitable for sale in the opponent’s coffee shops. Of course, such sales are under the control of the opponent.
Degree of Resemblance
[24] There is a fair degree of resemblance between the marks TAZO and TAYO visually given that only one letter differentiates the marks. However, I consider that there is far less of a resemblance aurally since the “ZOH” sound in the term TAZO is distinct from the “YOH” sound in the term TAYO. I do not consider that there is any resemblance between the parties’ marks in the ideas that they suggest as neither mark suggests any particular idea.
Surrounding Circumstance
[25] As noted in the TAYOMACHA case, above, the opponent is under no obligation to submit evidence of instances of actual confusion. The absence of such evidence is not determinative of the issue of confusion nor does it necessarily raise any presumptions unfavourable to the opponent. However, an absence of evidence of actual confusion over a relevant period of time, despite overlap in the nature of the parties’ wares and channels of trade, may entitle one to draw a negative inference about the likelihood of confusion. The evidence in the instant case indicates that there has been substantial concurrent use of the parties’ marks TAZO and TAYO & Design across Canada since mid 2003 and that the parties’ wares have been sold through the same third party food retailers. If instances of actual confusion have not been evidenced in respect of the marks TAZO and TAYO & Design (for a milk substitute product), then the inference is that there will not be a reasonable likelihood of confusion between the mark TAZO and the word mark TAYO (for beverages and desserts).
Conclusion
[26] Considering all of the above factors, and taking into account in particular the similarities in the parties’ marks as well as their differences, I am satisfied that the applicant has met the legal onus on it show that, on a balance of probabilities, there is no reasonable likelihood of confusion between the applied for mark TAYO and any of the opponent’s TAZO marks at any material time.
Section 30(b) Ground of Opposition
[27] Section 30(b) of the Trade-marks Act requires the application to state the date from which the applicant has used its mark in association with the wares specified in the application. As always in opposition proceedings, the legal onus is on the applicant to show that its application complies with various provisions of the Trade-marks Act. That is, the onus is on the applicant to show that the date(s) of first use claimed in the application is factually correct. In this regard, the applicant may allege a date of first use somewhat later than the actual date of first use, but may not allege a date earlier than the actual date of first use. However, there is an evidential burden on the opponent to put its allegations concerning the date(s) of first use, or use at all, into issue. In this regard, the evidential burden on the opponent with respect to Section 30(b) is lighter than in the ordinary case: see John Labatt Ltd. v. Molson Companies Ltd. (1990), 30 C.P.R.(3d) 293 at pp. 298-300 (F.C.T.D.). The material time for considering the circumstances respecting the issue of non-compliance with Section 30(b) is the filing date of the application: see Thomas J. Lipton Inc. v. Primo Foods Ltd. (1992), 44 C.P.R.(3d) 556 at p. 560 (TMOB); Georgia-Pacific Corp. v. Scott Paper Ltd. (1984), 3 C.P.R. (3d) 468 at p. 475 (TMOB).
[28] In the instant case, the opponent finds support for the Section 30(b) ground of opposition by relying on (i) the applicant’s failure to provide any evidence that it has in fact used the applied for mark TAYO in association with the wares specified in the application, and (ii) Mr. Wong’s affidavit evidence, including exhibits thereto, discussed below.
[29] As noted earlier, Mr. Wong is a private investigator. He was asked to investigate whether TAYO products would be sold as coffee-based or tea-based beverages, or would be used in making such beverages. In November 2005 he contacted, by telephone, Tayo Foods (Canada) Inc. (hereinafter “TFI”) at its offices in Vancouver. He arranged a meeting with company representatives. Prior to the meeting, Mr. Wong was provided with promotional materials concerning the applicant’s TAYO & Design milk substitute products and a copy of the applicant’s Offering Memorandum dated July 31, 2004. The aforemetioned materials comprise exhibits to Mr. Wong’s affidavit. The meeting between Mr. Wong and company representatives Don Wilson and Bob Somers took place on November 28, 2005. At the meeting Mr. Wong was informed that (i) TFI is a wholly owned subsidiary of the applicant, (ii) the applicant’s milk substitute product is sold in three flavours, (iii) the TAYOLATTÉ brand product is not currently available, (iv) the applicant’s milk substitute product has desirable qualities for use in specialty coffee drinks, and (v) TFI plans to develop a complete line of non-dairy products.
[30] Counsel for the opponent argues that because (i) the applicant did not provide evidence of sales of the specified wares, (ii) the promotional materials and Offering Memorandum provided to Mr. Wong did not mention the specified wares, and (iii) there was no mention of the specified wares at the November 28 meeting, I should find non-compliance with Section 30(b). However, even putting aside hearsay issues concerning the November 28 meeting, I find that Mr. Wong’s evidence does not meet the opponent’s evidential burden. In this regard, the context of the November 28 meeting was to investigate products related to coffee and tea, and the Offering Memorandum was similarly focussing on the opponent’s potato based milk substitute product.
[31] If the opponent had presented a survey of several retail food outlets (i.e., particularly those mentioned by Mr. Toews as selling the applicant’s products) showing that the specified wares were not, in fact, available for purchase under the mark TAYO, then it is likely that the opponent would have met its evidential burden. The opponent might have submitted such evidence as part of its evidence in chief, or as additional evidence (pursuant to Section 44 of the Trade-marks Regulations) after the applicant filed its evidence. It would not have been onerous for the opponent to have done so. However, the absence of evidence of sales of the specified wares in the evidence provided by the applicant does not suffice for the Section 30(b) ground of opposition to succeed where the opponent’s evidential burden has not been satisfied. Had the opponent met its evidential burden, then the application would have been refused because the applicant’s evidence would have been entirely deficient to meet the legal onus on the applicant.
Disposition
[32] In view of the foregoing, the opposition is rejected. This decision has been made pursuant
to a delegation of authority under Section 63(3) of the Trade-marks Act.
DATED AT VILLE DE GATINEAU, QUEBEC, THIS 13th DAY OF OCTOBER, 2009.
Myer Herzig,
Member,
Trade-marks Opposition Board