2011 FC 967 (July 29, 2011)
Overview
The Federal Court allowed an appeal by Hortilux Schreder B.V. from a decision of the Trademarks Opposition Board rejecting its opposition to Iwasaki Electric Co. Ltd.'s application for the trademark HORTILUX. Justice Russell of the Federal Court reversed the findings of the Opposition Board on both grounds of opposition in issue on the appeal and allowed Hortilux Schreder B.V.'s opposition. The appellant Hortilux Schreder B.V. was successfully represented by Steven B. Garland and Philip Lapin of our Ottawa office.
Abstract
The Opposition Board had rejected Hortilux Schreder B.V. ("the appellant")'s ground of opposition based on its prior use of the trademark HORTILUX in Canada, including as a result of its finding that the appellant had not established "use" of the trademark in accordance with section 4 of the Trademarks Act ("Act"). The Federal Court reversed the Opposition Board's decision, finding that invoices bearing the trademark HORTILUX, as well as other evidence adduced by the appellant, established use in accordance with section 4. The Federal Court decision thoroughly reviews and affirms previous jurisprudence finding that, in appropriate circumstances, the display of a trademark at the top of an invoice can constitute "use" in association with wares that accompany the invoice.
The Opposition Board had also rejected the appellant's ground of opposition based on the respondent's application claiming an incorrect date of first use, finding that the date of first use was established by evidence of a transfer of two units of wares for zero value. Justice Russell reversed the Opposition Board decision, finding that, had the Opposition Board fully considered the evidence, it could not have reasonably concluded that the relied-upon transaction was "in the normal course of trade."
Case summary
Facts. In June 2000 Iwasaki Electric Co. Ltd. ("the respondent") filed a trademark application seeking to register the trademark HORTILUX ("the mark") in association with "Electric Lamps" ("the application"). The application claimed use of the mark since at least as early as December 31, 1997.
The appellant opposed the application based on several grounds, including that:
- the respondent had not used the trademark HORTILUX in Canada since the claimed date of first use in the application, namely December 31, 1997; and
- the mark was confusing with the appellant's trademark HORTILUX previously used in Canada in association with lighting apparatus and lamp reflectors.
With respect to the ground of opposition based on the respondent's date of first use, the Opposition Board found that the respondent's evidence of a sale of two units of wares for zero value made in October 1997 was "in the normal course of trade" and therefore was sufficient to validate the respondent's claimed date of first use.
With respect to the ground of opposition based on the appellant's prior use of HORTILUX, the Opposition Board found that the appellant's evidence did not establish use of HORTILUX by the appellant in the manner contemplated by section 4 of the Act. Although the appellant's evidence included invoices bearing the trademark HORTILUX at the top thereof, which had accompanied shipments of wares into Canada, the Opposition Board did not accept that these invoices established "use," noting that the trademark HORTILUX did not appear "in the body" of the invoices.
The appellant appealed the decision of the Opposition Board to the Federal Court.
Analysis.
Respondent's date of first use ground of opposition. Justice Russell first considered the appellant's ground of opposition based on the respondent's claimed date of first use.
Justice Russell distinguished the case law relied upon by the Opposition Board in finding that the respondent's sale of wares for zero value could be regarded as being "in the normal course of trade" (see Canadian Olympic Association v. Pioneer Kabushiki Kaisha (1992), 42 CPR (3d) 470 (T.M.O.B.) ("Canadian Olympic Association")), finding that the evidence in this case was not comparable to the evidence in Canadian Olympic Association.
In Canadian Olympic Association, the party seeking to rely upon free samples to establish "use" had adduced evidence regarding its normal course of trade. Specifically, the evidence in Canadian Olympic Association established that it was the regular practice of the applicant in that case to provide its distributor with free samples of new products for marketing, informational and promotional purposes, with a view to obtaining orders from customers.
Justice Russell reviewed the respondent's evidence, and found that it did not include any information regarding the respondent's normal course of trade of the type that was before the Opposition Board in Canadian Olympic Association. He further found that the respondent's evidence in fact suggested that the zero value transaction relied upon by the respondent was not in the normal course of trade. In particular, the respondent's affiant did not assert in his affidavit that the zero value transaction was in the normal course of trade, while another paragraph of his affidavit specifically relied upon a different transaction as being "in the normal course of trade."
Including as a result of the above, Justice Russell concluded that the Opposition Board decision on this ground of opposition was unreasonable because "had the Member fully considered the evidence, she could not have reasonably concluded that the October 15, 1997 provision of wares for zero value were normal course of business sales that enabled the respondent to establish its claimed date of first use." Accordingly, the Court reversed the Opposition Board decision on this ground and refused the application.
Appellant's prior use ground of opposition. Justice Russell then went on to address the appellant's ground of opposition based on its prior use of the trademark HORTILUX.
Justice Russell noted that the Opposition Board had summarily rejected the appellant's invoices bearing HORTILUX as establishing use with only one sentence of analysis and had failed to consider relevant jurisprudence establishing that a trademark appearing at the top of an invoice can constitute "use" under appropriate circumstances.
Justice Russell confirmed that, in accordance with section 4 of the Act, the display of a trademark on an invoice that accompanies wares is considered "use" in association with the wares if the trademark and the wares are associated to a point that the receiver would thereby get notice of the association. Justice Russell proceeded to conduct a thorough review of the jurisprudence regarding when invoices bearing a trademark at the top can be regarded as use in association with wares and distilled several factors that are relevant to this question. Specifically, based on the jurisprudence, Justice Russell concluded that the following factors supported a finding that the trademark HORTILUX, as it appeared at the top of the appellant's invoices, was used in association with the appellant's wares:
- the trademark HORTILUX appeared in very large font (different from the surrounding text) and in a stylized form with design elements (different from the surrounding text), and was therefore prominent and distinguished from other matter in the invoice;
- it was clear that HORTILUX at the top of the invoices was a reference to the trademark HORTILUX as opposed to the company name. Indeed, the company name "Hortilux B.V." appeared separately, immediately above the company's address;
- the recipient of the goods was not an end consumer but rather a distributor, who would have familiarity with the appellant's business and would therefore understand that HORTILUX was distinguishing the source of the reflectors referred to in the invoice from the reflectors of others;
- the only wares referenced in each invoice were reflectors, and thus it was clear that the goods of only one manufacturer were being sold; and
- no other trademark appeared in the invoices (whether in the body or otherwise).
Accordingly, Justice Russell concluded that the appellant's invoices established prior use of the trademark HORTILUX.
Justice Russell went on to consider new evidence that had been filed by the appellant on appeal and found that the new evidence also established prior use by the appellant.
Justice Russell went on to find that the mark subject to the application was confusing with the appellant's trademark HORTILUX and that the appellant had not abandoned the trademark HORTILUX as of the advertisement date of the application. Accordingly, Justice Russell concluded that the respondent was not the person entitled to register the trademark HORTILUX and refused the application on this ground as well.
Conclusion
This case provides a helpful analysis of the circumstances that are relevant in determining whether a trademark appearing at the top of an invoice constitutes "use" in association with wares pursuant to section 4(1) of the Act. It also provides a helpful analysis of the type of evidence required to establish whether wares given away for free can be considered sales "in the normal course of trade."
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.