Citation: 2020 TMOB 40

Date of Decision: 2020-04-08

IN THE MATTER OF A SECTION 45 PROCEEDING

	John H. Simpson (Shift Law)	Requesting Party
and
	Imperial Tobacco Products Limited	Registered Owner
	TMA453,962 for CANADIAN GOLD & Design	Registration

 

[1]  At the request of John H. Simpson (Shift Law) (the Requesting Party), the Registrar of Trademarks issued a notice under section 45 of the Trademarks Act, RSC 1985, c T-13 (the Act) on February 16, 2018 to Imperial Tobacco Products Limited (the Owner), the registered owner of registration No. TMA453,962 for the trademark CANADIAN GOLD & Design (the Mark).  The Mark is shown below and includes the following colour claim:

Colour is claimed as a feature of the trade-mark. The maple leaf and the words SMOOTH CANADIAN TASTE as reproduced on the right-hand side of the trade-mark are red in colour. The dark horizontal lines, the word GOLD and the shadowing adjacent the vertical rendition of the word CANADIAN and the words 20 CLASS "A" CIGARETTES are gold in colour. The vertical rendition of the word CANADIAN is blue in colour. The background material which constitutes the balance of the mark is pale yellow in colour.

[2]  The Mark is registered in association with the goods “Tobacco Products”.

[3]  I note the Mark was registered on February 9, 1996, with the following disclaimer: “The right to the exclusive use of all the reading matter except the word GOLD is disclaimed apart from the trade-mark”.

• [4] The notice required the Owner to furnish evidence showing that it had used the Mark in Canada, at any time between February 16, 2015 and February 16, 2018, in association with the goods specified in the registration. If the Mark had not been so used, the Owner was required to furnish evidence providing the date when the Mark was last in use and the reasons for the absence of use since that date.

[5]  The relevant definition of use with respect to goods is set out in section 4 of the Act as follows:

4(1) A trademark 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.

[6]  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 trademark 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)].

[7]  In response to the Registrar’s notice, the Owner furnished the affidavit of Nada Aoude, sworn May 14, 2018 in Montreal, Quebec.  

[8]  Only the Owner submitted written representations; an oral hearing was not requested. 

The Owner’s Evidence

[9]  In her affidavit, Ms. Aoude identifies herself as a manager with Imperial Tobacco Canada Limited (ITCan) [para 1]. 

[10]  Ms. Aoude explains that the Owner is a wholly-owned subsidiary of ITCan and that a license agreement exists and did exist during the relevant period such that the Owner had direct control over the quality and character of goods sold in association with the Mark by ITCan during the relevant period [para 2].

[11]  Ms. Aoude states that, during the relevant period, ITCan sold CANADIAN GOLD-brand cigarettes in Canada through cigarette retailers such as grocery stores, convenience stores, bars and gas stations, as well as through ITCan’s distributor, Imperial Tobacco Company Limited [para 4].

[12]  In support, attached as Exhibit A to her affidavit are six photographs of cigarette packaging, which Ms. Aoude attests is representative of the “1700 packages of the CANADIAN GOLD cigarettes sold in Canada” in 2017, i.e., during the relevant period [para 5].  The front, side and top panels of the packaging are shown below:

   

[13]  I note the following colours for each of the non-warning elements displayed on the front panel of the packaging: the word CANADIAN is blue with gold shadowing; the word GOLD is gold; the number 20 is red; the words CIGARETTES KING SIZE are gold; and the square coat of arms is red and gold.

[14]  Ms. Aoude explains that the depiction of the Mark in the exhibited photographs differs from the Mark as registered due to a mandated health warning under Canadian law.  She attests that the Tobacco Products Labelling Regulations (Cigarettes and Little Cigars), SOR/2011-177 (the Regulations) require a health warning to be displayed on 75% of the two largest sides of each tobacco product package. Attached as Exhibit B to her affidavit is a copy of the Regulations.  She attests that these requirements came into effect in 2011, and that from 2000 to 2011, there was a requirement that the health warning be displayed on at least 50% of the display area [para 6].

[15]  Ms. Aoude attests that, in view of the Regulations, “it was necessary for the words “CANADIAN” and “GOLD” to be re-oriented on the package in the manner shown … so that they fit within the remaining 25% of the display area available for trademarks.”  Ms. Aoude characterizes this as a “minor adjustment”, asserting that “it is readily apparent to purchasers of the CANADIAN GOLD tobacco products (i.e. retailers and adult smokers) that the brand and source of the product remains the same” [para 7].

[16]  Finally, attached as Exhibit C to her affidavit are five sample invoices showing sales of large quantities of “Canadian Gold” cigarettes to Canadian retailers during the relevant period; Ms. Aoude confirms that such cigarettes were sold in packaging as shown above and in Exhibit A to her affidavit [para 8].

Analysis

[17]  In this case, I agree with the Owner that the evidence shows sales of CANADIAN GOLD-brand cigarettes being “Tobacco Products” in Canada during the relevant period by the Owner’s licensee.  However, the trademark at issue is not CANADIAN GOLD but rather the particular design Mark as shown above. 

[18]  In its written representations, the Owner echoes Ms. Aoude’s affidavit, submitting that the dominant portion of the Mark has been preserved, being the words CANADIAN GOLD [para 27].  It notes that other elements of the Mark have also been preserved, such as the colour scheme, the unique font style and the comparative font size [para 27]. 

[19]  In this respect, the Owner appears to submit that the trademark as used is the stylized CANADIAN GOLD displayed on both the top and the front panels of the packaging, as shown above.  In any event, when assessing the front of the packaging, I will also consider whether the bottom 25% viewed as a whole constitutes use of the Mark.

[20]  The Owner submits that since the Mark’s registration in 1996, “there have been significant changes in the labelling requirements for tobacco products” [para 28].  In particular, it notes that from 2000 to 2011, federal legislation required that a health warning be displayed on at least 50% of the display area of cigarette packaging and that, in 2011, this requirement was elevated to 75%.  Accordingly, the Owner submits that it “was forced to modify its packaging … so that the dominant features of [the Mark] could fit within the remaining 25% of the display area available for trade-marks” [para 29].  Notwithstanding these changes, the Owner submits that “it is readily apparent to purchasers of the CANADIAN GOLD tobacco products that the brand and source of the products remains the same” [para 30].

[21]  Further, the Owner submits that the jurisprudence has noted that changes to a registered trademark that are prompted by legislative change should not be held against a registered owner [citing Saccone & Speed Ltd v Canada (Registrar of Trademarks) (1982), 67 CPR (2d) 119 (FCTD) (Saccone); The Molson Companies Ltd v Mitches & Co et al (1980), 50 CPR (2d) 180 (FCTD) (Molson); and Marks & Clerk v Sparkles Photo Ltd (2005), 41 CPR (4th) 236 (FC) (Nature’s Choice)] [Owner’s written representations, para 30].

[22]  In particular, the Owner submits that the present case is analogous to the Registrar’s decision in Smart & Biggar v Rothmans, Benson & Hedges Inc, 2011 TMOB 78 (Rothmans) [Owner’s written representations, paras 31-32].  In Rothmans, the Registrar considered a ROTHMAN’S design mark which appeared to include the entire display area of the front of a cigarette package, similar to the present situation.  Due to the requirement to have a health warning cover 50% of the display area (at that time), the design mark used was modified accordingly.  Citing Saccone and Nature’s Choice, the Registrar noted that “a requirement to modify a trade-mark in order to comply with legislation other than the Trade-marks Act should not be held against a registrant” [at para 12].  However, the Registrar went on to note that “while the Registrant may have been required to modify its Mark to comply with the Tobacco Act and the Tobacco Products Information Regulations, I also note that certain other modifications to the Mark may not have been required” [at para 12].  Having listed these modified elements, the Registrar nonetheless found that the dominant features of the design mark, including the word ROTHMAN’S and a coat of arms, were retained and that the other modifications were minor.

[23]  As such, I consider Rothmans distinguishable from the present case on its facts. First, it is trite law that each case must be decided based on its own merits [see Express File Inc v HRB Royalty Inc, 2005 FC 542, 39 CPR (4th) 59]. Second, for purposes of a section 45 proceeding, the issue is not whether consumers would simply recognize “the brand and source” of the product, but whether within the meaning of sections 4 and 45 of the Act, the Mark as registered was used.   

[24]  In this respect, the test for deviation, as articulated by the Federal Court of Appeal, is as follows:

The practical test to be applied in order to resolve a case of this nature is to compare the trade mark as it is registered with the trade mark as it is used and determine whether the differences between these two marks are so unimportant that an unaware purchaser would be likely to infer that both, in spite of their differences, identify goods having the same origin. [Canada (Registrar of Trade-marks) v Compagnie International pour l’informatique CII Honeywell Bull (1985), 4 CPR (3d) 523 (FCA) at 525 (Honeywell Bull)]

[25]  As the Court of Appeal noted, “That question must be answered in the negative unless the mark was used in such a way that the mark did not lose its identity and remained recognizable in spite of the differences between the form in which it was registered and the form in which it was used” [at 525].

[26]  In deciding this issue, one must look to see if the “dominant features” of the trademark have been preserved [Promafil Canada Ltée v Munsingwear Inc (1992), 44 CPR (3d) 59 (FCA)]. The assessment as to which elements are the dominant features and whether the deviation is minor enough to permit a finding of use of the trademark as registered is a question of fact to be determined on a case-by-case basis.

[27]  In this case, I cannot agree with the Owner’s submission that the dominant feature of the Mark is the words CANADIAN GOLD in the particular fonts.  In my view, the dominant feature of the Mark is not merely those words, but also the particular combination of various elements in the Mark.

[28]  I appreciate that the majority of the word elements in the Mark are descriptive; indeed, I note the disclaimer for all of the “reading matter” except for the word GOLD.  As such, I would not necessarily consider the omission of the descriptive words “Smooth Canadian taste” or “CLASS A” as fatal to the registration.  Similarly, on its own, I would not consider the change in the orientation of the word CANADIAN relative to the word GOLD to be fatal to the registration.  However, such changes are not isolated. As stated in Promafil, “Obviously, with every variation the owner of the trade mark is playing with fire” [at 71].

[29]   In particular, I note the complete omission of the vertical bars at the top of the Mark along with the particular maple leaf element from the trademark(s) as used.  If one considers the words CANADIAN GOLD in the particular fonts as the trademark used (on the front or top panels of the packaging), all of the other elements are missing. Otherwise, if one considers the bottom 25% of the front of the packaging as the trademark used, not only are most of the elements of the Mark missing, but a distinctive red-and-gold coat of arms has been added to the overall trademark as used.

[30]  While I note that a maple leaf element (which is not eleven-point) appears next to or as part of the “DUTY PAID” stamp on the side panel of the exhibited packaging, at best I consider this element to form its own trademark; it does not form part of the trademark(s) under consideration on the front or top panels of the packaging.

[31]  In other words, in my view, the evidenced cigarette packaging does not maintain the dominant features of the Mark as registered.

[32]  As such, I also consider Nature’s Choice to be distinguishable on its facts. In that case, the relevant modifications to the NATURE’S CHOICE & Design trademark at issue were the removal of an eleven-point maple leaf and the addition of the word “Co.” after the words “Nature’s Choice”, apparently at the request of a government authority.  Such modifications were found to be unimportant, with the dominant feature -- the words NATURE’S CHOICE in the particular font and arrangement -- continuing to be used [at para 39].

[33]  In addition, the Court in Nature’s Choice found that “it was reasonable … for the Hearing Officer to conclude that the situation before her was comparable to that which occurred in Saccone, considering that a relatively small business would not readily distinguish between the requirements imposed by new legislation and the administration of existing regulations by a federal government department” [at para 37]. As such, the registered owner in Nature’s Choice was also under a belief (mistaken or otherwise) that it had to modify its trademark at the request of a government authority. In my view, this reason for not using the trademark as registered is properly considered under the principles of special circumstances [see, for example, Spirits International NV v Canada (Registrar of Trade-marks), 2006 FC 520, 49 CPR (4th) 196, aff’d, 2007 FCA 162, 60 CPR (4th) 31, in which the registered owner was under the mistaken belief that it needed a particular certification before it could sell its products in the Canadian market].

[34]  In this respect, I note that both Saccone and Nature’s Choice were decisions of the Federal Court that pre-dated the Federal Court of Appeal’s decision in Scott Paper Ltd v Smart & Biggar, 2008 FCA 129, 65 CPR (4th) 303, which clarified the principles and the criteria to consider with respect to special circumstances excusing non-use of a trademark. I further note that Saccone also preceded both Honeywell Bull and Promafil, the leading jurisprudence from the Federal Court of Appeal on the issue of deviation analysis.  As such, to the extent that older jurisprudence from the Registrar and the Federal Court may have conflated considerations regarding deviation with considerations regarding special circumstances, the proper approach is to apply the Federal Court of Appeal’s decisions in Honeywell Bull and Promafil when considering deviation and Scott Paper when considering any special circumstances that may excuse non-use, if necessary. 

[35]  Nevertheless, I think it fair to consider legislative or regulatory requirements when addressing the issue of deviation, to the extent they may inform the determination of what are the dominant features of a particular trademark. For example, in Nature’s Choice, such requirements informed the determination that the eleven-point maple leaf and the addition of “Co.” were not dominant features in that case [at para 39].  In Saccone, they informed the determination that “the additional verbiage added to ensure compliance” with the provisions of the Consumer Packaging and Labelling Act (at that time) was to be “disregarded” [at 127].  In the view of the Court, the key was that the “significant features” of the trademark in issue in that case were maintained [at 128].  Similarly, in Molson, the addition of the descriptive “bière” (beer) was not considered to be a significant change, but other modifications were, and the Federal Court affirmed the Registrar’s decision to expunge the trademark in that case [at 182].

[36]  In this case, Ms. Aoude’s affidavit does not indicate that the Owner was required to remove or add any elements, in contrast to the above-cited cases.  The only “requirement” was a relative change in size to accommodate the mandated warning label.  To be clear, to the extent that the Owner was required to place a warning on its cigarette packaging, I do not consider this warning to form part of the trademark actually used.  However, this warning requirement did not necessarily mandate the changes made by the Owner.  Aside from the CANADIAN GOLD element, Ms. Aoude does not explain why some elements were retained in the post-2011 packaging and other elements removed.  Nothing in Ms. Aoude’s affidavit indicates that the Owner could not continue to use the Mark as registered, albeit in relatively reduced size and perhaps different orientation to fit the top panel or the remaining 25% of the front panel available to the Owner.

[37]  Of course, the Owner likely made a reasoned marketing decision to modify the packaging branding so as to optimize its visual appeal in the available space.  Nevertheless, this was a choice by the Owner, rooted in the nature of the design mark as registered. As would appear to be indicated in the Rothmans and Molson decisions, it is only those modifications that are clearly mandated by legislation that may be excusable. 

[38]  In other words, while I accept that the applicable legislation may be relevant to a consideration of what are the dominant features of a given trademark, whether subsequent non-use of a trademark is excusable is more appropriately a question of special circumstances, and in this case that question is discussed further below. 

[39]  In view of all of the foregoing, as the Owner has not evidenced use of the Mark or an acceptable variation thereof, I cannot conclude that the Owner has demonstrated use of the Mark within the meaning of sections 4 and 45 of the Act.

[40]  The issue, then, is whether special circumstances existed during the relevant period to excuse the non-use.

Special Circumstances

[41]  In the present case, I note the Owner made no representations per se on the issue of special circumstances, having taken the position that the dominant features of the Mark were preserved and otherwise having dealt with its alleged compliance with the Regulations through the lens of the deviation issue. 

[42]  Nevertheless, in the absence of evidence of use of a trademark during the relevant period, the issue is whether, pursuant to section 45(3) of the Act, special circumstances existed to excuse such non‑use. 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].

[43]  To determine whether special circumstances have been demonstrated, the Registrar must first determine why the trademark 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)].

[44]  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 trademark 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].

[45]  Furthermore, 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)].

[46]  In this case, while Ms. Aoude and the Owner attribute the modifications to the Mark to the aforementioned regulatory requirements to display health warning labels on cigarette packaging, as discussed above, it is not clear that all of the subsequent modifications were actually mandated by such regulations.  While the modifications may have been prompted by the regulatory changes, the reason for non-use of the Mark as registered can be attributed to the Owner’s voluntary decision to streamline the Mark to be visually appealing on the subject cigarette packaging.  Furthermore, as the Regulations applied to all cigarette packaging in Canada, affecting all manufacturers, it is not clear to me that this constitutes “uncommon” circumstances in the relevant tobacco industry.  Rather, the modifications to the Mark appear to be a function of the particular design Mark in question and the Owner’s decision to focus only on the CANADIAN GOLD element.

[47]  In any event, if I were to accept that the subject regulatory changes constitute special circumstances, I would still find that such circumstances do not excuse the period of non-use.

[48]  First, the period of non-use is lengthy.  Ms. Aoude does not state when the Mark as registered was last used, instead indicating that the current regulatory requirements took effect in 2011 and that, from 2000 to 2011, there was a similar requirement affecting 50% of the display area.  As such, the period of non-use is at least seven years, i.e., from 2011 to the issuance of the notice in 2018.  However, where a date of last use is not provided, the Registrar considers the date of registration as the relevant date for purposes of assessing the length of non-use [see Clark, Woods v Canaglobe International Inc (1992), 47 CPR (3d) 122 (TMOB); and Oyen Wiggs Green & Mutala LLP v Rath, 2010 TMOB 34, 82 CPR (4th) 77].  Here, the Mark was registered in 1996, making the period of non-use as much as 22 years, based on the evidence before me.

[49]  Furthermore, as discussed above, it is not clear that the particular modifications to the Mark made by the Owner were beyond its control. 

[50]  In any event, there is no evidence before me that the Owner has a serious intention to resume use of the Mark as registered. For example, Ms. Aoude makes no indication that the Owner intends to modify its cigarette packaging to incorporate design elements from the Mark as registered that are still available to the Owner, but that it had previously chosen to discard. In this respect, while I am aware that recent “plain packaging” regulations have likely rendered this question moot, such further regulations post-date the relevant period and are not at issue in this case. 

[51]  In view of all of the foregoing, I am not satisfied that the Owner has demonstrated special circumstances excusing non-use of the Mark within the meaning of section 45 of the Act.

Disposition

[52]  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

Trademarks Opposition Board Canadian Intellectual Property Office

TRADEMARKS OPPOSITION BOARD

CANADIAN INTELLECTUAL PROPERTY OFFICE

APPEARANCES AND AGENTS OF RECORD

___________________________________________________

 

HEARING DATE: No Hearing Held

AGENTS OF RECORD

Smart & Biggar LLP	For the Registered Owner
John H. Simpson (Shift Law Professional Corporation)	For the Requesting Party