2011 TMOB 154 (August 31, 2011)
Overview
The Trademarks Opposition Board refused an application to register the trademarks HOUSTON STEAKS AND RIBS Design and HOUSTON STEAKS ET CÔTES LEVÉES Design in association with restaurant services. The Opposition Board held that the marks were not distinctive of the applicant's services as there was a likelihood of confusion with at least one of the opponent's United States HOUSTON'S marks. The Opposition Board found that the opponent's marks, used solely in the U.S. in association with restaurants, had become sufficiently known in Canada at the relevant date to negate the distinctiveness of the applicant's marks, notwithstanding that the opponent was unable to establish that the opponent's marks were "previously made known" under section 16(1)(a) of the Trademarks Act. The case is particularly noteworthy given that it summarizes the type of evidence required to establish that a mark used in another country is sufficiently known in Canada to negate the distinctiveness of a Canadian applied-for mark. The case also distinguishes a Federal Court decision in which an opponent failed to establish that its U.S. BOJANGLES mark had a sufficient reputation in Canada.
Abstract
The Trademarks Opposition Board (the "Opposition Board") held that the trademark HOUSTON STEAKS AND RIBS Design and HOUSTON STEAKS ET CÔTES LEVÉES Design (the "marks") used in association with restaurant services were not registrable because they were not distinctive of the applicant's services, as they were confusing with the opponent's U.S. mark HOUSTON'S, which was used in the U.S. in association with restaurant services. The opponent admitted that it failed to prove that any of its HOUSTON'S marks had been made known in Canada in accordance with the provisions of section 16(1)(a) of the Trademarks Act (the "Act"). However, the Opposition Board found that the opponent's U.S. mark HOUSTON'S was sufficiently known in Canada to negate the distinctiveness of the marks. The Opposition Board relied on the opponent's evidence demonstrating that not only did Canadians know of the U.S. mark, Canadians were also confused about the relationship between the applicant's and opponent's restaurants. In so finding, the Opposition Board distinguished the evidence from a previous Federal Court case where an opponent relying on the U.S. mark for BOJANGLES had failed to establish that its mark had a sufficient reputation in Canada.
Case summary
Facts. In September 2006, the applicant filed Applications Serial Nos. 1,319,527 for the trademark HOUSTON STEAKS AND RIBS Design and 1,319,528 for the trademark HOUSTON STEAKS ET CÔTES LEVÉES Design for "restaurant services" (the "marks"). Each application was filed on the basis of use of the marks since as early as 1998 by either the applicant or its predecessors in title. The applicant disclaimed the right to the exclusive use of the words "steaks," "ribs" and "côtes levées."
Both marks were opposed by Hillstone Restaurant Group, Inc. (the "opponent") on identical grounds of opposition, including:
- the applicant is not the person entitled, under section 16(1) of the Act, to register the marks since, on the filing date of the application, the marks were confusing with the trademarks registered and used in the U.S. by the opponent in association with restaurant services, and previously made known in Canada by the opponent, including the trademarks HOUSTON'S, HOUSTON'S RESTAURANTS & Design and HOUSTON'S & Design; and,
- the marks are not distinctive because they do not distinguish the applicant's services from the services of others and were not adapted to so distinguish them.
The applicant's evidence established that it operated restaurants, in a number of large cities in Canada, in association with the marks since 1998. The applicant's affiant stated that HOUSTON was chosen as part of the mark because of customers' association of the mark with Houston Texas, American cattle ranchers, and barbecue or grilled beef.
The opponent evidenced that it operated a chain of restaurants in the U.S. in association with the trade name and trademark HOUSTON'S since 1977. The HOUSTON'S trademark, as well as two design marks incorporating HOUSTON'S, were registered in the U.S.
While the opponent did not operate any restaurants in Canada, it provided evidence that Canadians had been going to HOUSTON'S restaurants in the U.S. for years. This evidence included affidavits from two of the opponent's employees, supervisors of a number of restaurants, stating that Canadian customers represented anywhere from 10 to 30% of the customers, particularly in the winter. The employees also stated that over the last years, there had been verbal inquiries about whether U.S. restaurants were associated with the applicant's Canadian restaurants. Additional evidence regarding Canadians' knowledge of the marks, discussed further below, was also presented.
The opponent also presented evidence that seemed to suggest that the applicant was intentionally creating the association of the marks with the opponent's U.S. restaurants. However, the applicant provided evidence to explain away any suggestion of bad faith. As the applicant's affiant was not cross-examined, the Opposition Board accepted the explanations.
Analysis. The opposition ground regarding section 16(1) was dismissed as the opponent admitted at the hearing that it had failed to meet its onus of proving that any of its HOUSTON'S marks had been previously made known in Canada in accordance with section 5 of the Act. Notwithstanding this, the Opposition Board relied on the jurisprudence of the Federal Court that an attack on the basis of non-distinctiveness may be founded on evidence of knowledge or reputation of the foreign-used mark, spread by means of word of mouth and/or newspaper or magazine articles as opposed to advertising.
The applicant argued that the opponent's evidence was substantially of the same nature as that considered by the Federal Court in Bojangles' International, LLC v. Bojangles Café Ltd., 2006 FC 657 ("Bojangles"). The Opposition Board disagreed, and distinguished from Bojangles, holding that the opponent had provided sufficient evidence for the Opposition Board to conclude that the opponent's mark HOUSTON'S was sufficiently known in Canada at the relevant time to support the non-distinctiveness ground of opposition.
The Opposition Board found it significant that Canadians knew about the opponent's HOUSTON'S restaurant chain and mistook the applicant's restaurants with those of the opponent. This finding was based on evidence of restaurant reviews from an online Toronto restaurant review site and the Globe and Mail, an advertorial in the Journal de Montréal, two written communications from Canadians to the opponent, and affidavit evidence of a conversation with an employee of the applicant, each of which had associated the applicant's restaurants with the opponent's restaurant chain in the U.S.
The Opposition Board also found that an article published in Consumer Reports Canada praising the opponent's restaurants "could have had an effect" on the opponent's HOUSTON'S brand's reputation with Canadian consumers. Similarly, the Board noted that photographs of the signs located on the outside of the opponent's restaurants, showing only and visibly the mark HOUSTON'S, "could have had an effect" on the knowledge of Canadians traveling in the U.S. of the opponent's HOUSTON'S restaurants. With regards to the photos, the Opposition Board distinguished from the Federal Court's dissatisfaction with photos in Bojangles, where the photos were of signs placed along highways, were collages of advertisements, and were difficult to read.
The Opposition Board also held that there was no reason to doubt the opponent's affiants' statements regarding the proportion of customers who are Canadian and who make up the clientele of the opponent's restaurants.
While the applicant had argued that the cases of confusion were "minor and insignificant" given the applicant's continued use since 1998, the Opposition Board disagreed and held that the "recurring instances of confusion over the years, despite the continued use of the Marks since 1998, only support the conclusion that the Opponent's mark HOUSTON'S was sufficiently known in Canada at the relevant date to negate the distinctiveness of the Marks." The Opposition Board further held that the applicant's marks were confusing with the opponent's HOUSTON'S mark.
Conclusion
This case illustrates the type of evidence that the Board considers acceptable in establishing that an opponent's foreign mark, while not "made known" in Canada or used in Canada, has become sufficiently well-known in Canada such that it can negate the distinctiveness of an applied-for mark.
Urszula A. Wojtyra, Toronto
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