Citation: 2018 TMOB 138

Date of Decision: 2018-11-14

IN THE MATTER OF A SECTION 45 PROCEEDING

	Blake, Cassels & Grayson LLP	Requesting Party
and
	Cobblestone Vineyards LLC	Registered Owner
	TMA626,913 for COBBLESTONE	Registration

Introduction

[1]  At the request of Blake, Cassels & Grayson LLP (the Requesting Party), the Registrar of Trade-marks issued a notice under section 45 of the Trade-marks Act, RSC 1985, c T-13 (the Act) on July 12, 2016 to Cobblestone Vineyards LLC (the Owner), the registered owner of registration No. TMA626,943 for the trade-mark COBBLESTONE (the Mark). 

[2]  The Mark is registered for use in association with “Wines” and “Table wine”.

[3]  Section 45 of the Act requires the registered owner of the trade-mark to show whether the trade-mark has been used in Canada in association with each of the goods specified in the registration at any time within the three-year period immediately preceding the date of the notice and, if not, the date when it was last in use and the reason for the absence of such use since that date. In this case, the relevant period for showing use is July 12, 2013 to July 12, 2016.

[4]  The relevant definition of use for goods is set out in section 4 of the Act 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.

[5]  It is well established that mere assertions of use are not sufficient to demonstrate use in the context of section 45 proceedings [Plough (Canada) Ltd v Aerosol Fillers Inc (1980), 53 CPR (2d) 62 (FCA)]. Although the threshold for establishing use in these proceedings is low [Woods Canada Ltd v Lang Michener (1996), 71 CPR (3d) 477 (FCTD)], and evidentiary overkill is not required [Union Electric Supply Co Ltd v Registrar of Trade Marks (1982), 63 CPR (2d) 56 (FCTD)], sufficient facts must still be provided to permit the Registrar to arrive at a conclusion of use of the trade-mark in association with each of the goods specified in the registration during the relevant period [John Labatt Ltd v Rainier Brewing Co (1984), 80 CPR (2d) 228 (FCA)]. 

[6]   In response to the Registrar’s notice, the Owner furnished the affidavit of Stephanie Levine, Marketing Manager of the Owner, sworn on May 8, 2017 in Los Angeles, California. Only the Requesting Party filed written representations; a hearing was not requested.

The Owner’s Evidence

[7]  In her affidavit, Ms.  Levine identifies the Owner as a California company that produces Chardonnay, Cabernet Sauvignon and Pinot Noir wines, with vineyards in California and New Zealand. 

[8]  Ms. Levine does not assert use of the Mark in association with the registered goods during the relevant period in Canada.  Rather, she states that, at some time after October 27, 2004, sales of the Owner’s wines in Canada “stopped”.  She explains that, because of personnel changes and a lack of records, the last date of use of the Mark that she has been able to verify is October 27, 2004, although she states that the Mark “was likely used in Canada until a date later than that” (para 5).

[9]  In any event, Ms. Levine details the efforts made by the Owner to recommence sales of its wines in Canada since September 2012, when she assumed her responsibilities as Marketing Manager at the company.  However, she states the following:

... this task has been difficult due to the monopolies that government-controlled liquor boards have in Canadian provinces over the importation, distribution and sale of alcohol into Canadian provinces. Foreign winemakers like [the Owner] need to wait until Canadian provincial liquor boards periodically issue requests for tendering certain products for importation and sale within the respective provinces; if the products sought by the provincial liquor boards at any given time happen to include wines that [the Owner] produces, only then does [the Owner] have the opportunity to submit a proposal to the provincial liquor boards to sell [the Owner’s] wines in Canada through the monopolies held by those liquor boards. (para 6)

[10]  In this respect, Ms. Levine details the following efforts by the Owner:

·  November 2012 – submission of a proposal for sale of the Owner’s wines to the Liquor Control Board of Ontario (LCBO) in response to a tender request for wines originating from the Napa or Sonoma Valleys.  The proposal was not selected by the LCBO (para 7; Exhibit B).

·  July 2013 – submission of a proposal for sale of the Owner’s wines to the Société des alcools du Québec (SAQ) in response to a tender request from the SAQ for types of wines that the Owner produces.  The SAQ did not select any of the Owner’s wines (para 8; Exhibit C).

·  December 2015 – consideration of a Canadian wine importer’s proposal to present the Owner’s wines to the LCBO for sale in Ontario.  Ms. Levine attests that the terms proposed by the importer “did not interest” the Owner at the time (para 9; exhibit D).

[11]  Ms. Levine attests that, prior to September 2012, the Owner’s former Marketing Manager “similarly actively pursued offers to tender [the Owner’s] products to entities in Canada” (para 10).  She states that the Owner “will continue to respond to offers to tender from provincial liquor control boards and other entities in Canada, and will otherwise continue actively to pursue opportunities to recommence sales” of the Owner’s wines in Canada (para 11).   

Analysis

[12]  In the absence of evidence of use of the Mark during the relevant period, the issue is whether, pursuant to section 45(3) of the Act, special circumstances existed to excuse such non‑use.

[13]  The general rule is that absence of use should result in expungement, but there may be an exception where the absence of use is due to special circumstances [Scott Paper Ltd v Smart & Biggar, 2008 FCA 129, 65 CPR (4th) 303].

[14]  To determine whether special circumstances have been demonstrated, the Registrar must first determine why the trade-mark was not used during the relevant period. Second, the Registrar must determine whether those reasons for non-use constitute special circumstances [Registrar of Trade Marks v Harris Knitting Mills Ltd (1985), 4 CPR (3d) 488 (FCA)]. Special circumstances means circumstances or reasons that are unusual, uncommon, or exceptional [John Labatt Ltd v Cotton Club Bottling Co (1976), 25 CPR (2d) 115 (FCTD)].

[15]  If the Registrar determines that the reasons for non-use constitute special circumstances, the Registrar must still decide whether such circumstances excuse the period of non-use. This determination involves the consideration of three criteria: (i) the length of time during which the trade-mark has not been in use; (ii) whether the reasons for non-use were beyond the control of the registered owner; and (iii) whether there exists a serious intention to shortly resume use [per Harris Knitting Mills, supra].

[16]  The intention to shortly resume use must be substantiated by “a sufficient factual basis” [NTD Apparel Inc v Ryan, 2003 FCT 780, 27 CPR (4th) 73 at para 26; see also Arrowhead Spring Water Ltd v Arrowhead Water Corp (1993), 47 CPR (3d) 217 (FCTD)].

[17]  All three criteria are relevant, but satisfying the second criterion is essential for a finding of special circumstances excusing non-use [per Scott Paper, supra].

[18]  In this case, while it is not clear why the Owner “stopped” sales of its wines in Canada at some point after October 2004, the reason the trade-mark was not used during the relevant period appears to be the Owner’s ongoing “inability” to recommence sales of its wines in Canada.

[19]  Ms. Levine indicates that recommencing sales is made difficult by the monopolies held by government-controlled liquor boards on the importation, distribution and sale of alcohol into Canadian provinces and the manner in which such boards periodically issue requests for tendering of certain wine products. 

[20]  In its written representations, the Requesting Party submits that the evidence shows that the Owner made “virtually no effort to sell its wines in Canada and, even when opportunity presented itself, [the Owner] has made the commercial decision not to pursue such opportunities” (para 26).  It argues that “although Ms. Levine’s affidavit contains a vague statement about it being difficult to sell to liquor boards, she does not provide any details as to the difficulties [the Owner] has allegedly encountered or of the steps (if any) that it has taken in an attempt to overcome such difficulties” (para 31). 

[21]  Indeed, it is well established that, generally, unfavourable market conditions are not the sort of uncommon, unusual or exceptional reasons for non-use that constitute special circumstances [see, for example, Harris Knitting Mills, supra; and John Labatt Ltd v Cotton Club Bottling Co, supra]. Although the evidence indicates that the only avenue for sales of the Owner’s wines in Canada is through the aforementioned liquor boards, this would be the case for any similar trader.  Ms. Levine’s affidavit fails to distinguish the Owner’s inability to sell its products as “uncommon, unusual or exceptional”. 

[22]  Accordingly, I am not satisfied that the reasons for non-use of the Mark in Canada during the relevant period constitute special circumstances.

[23]  As such, it is not necessary to consider whether such circumstances excuse the period of non-use. Suffice to say, the period of non-use as indicated in the evidence, since October 2004, is lengthy.  Furthermore, while Ms. Levine asserts that the Owner continues to “actively pursue opportunities” to recommence sales of its wines in Canada, one is left in the dark as to when, if at all, use of the Mark would resume in Canada.

[24]  In view of the foregoing, I am not satisfied that the Owner has demonstrated special circumstances excusing non-use of the Mark.

Disposition

[25]  Accordingly, pursuant to the authority delegated to me under section 63(3) of the Act and in compliance with the provisions of section 45 of the Act, the registration will be expunged.

Andrew Bene

Member

Trade-marks Opposition Board

Canadian Intellectual Property Office

TRADE-MARKS OPPOSITION BOARD

CANADIAN INTELLECTUAL PROPERTY OFFICE

APPEARANCES AND AGENTS OF RECORD

___________________________________________________

No hearing held

AGENTS OF RECORD

Oyen Wiggs Green & Mutala LLP	For the Registered Owner
Blake, Cassels & Grayson LLP	For the Requesting Party