Federal Court Decisions

Date: 20010125

Docket: T-2382-97

IN THE MATTER OF sections 2, 12(1)(b), 18(1), 18(1)(b) and 57

         of the Trade-Marks Act, R.S.C. 1985, c. T-13;

BETWEEN:                         

CONSORZIO DEL PROSCIUTTO DI PARMA

Applicant

- and -

MAPLE LEAF MEATS INC.

Respondent

     REASONS FOR ORDER

McKEOWN J.

[1]      The Applicant seeks to have the Respondent's trade-mark "PARMA" expunged from the Register of Trade-marks. There are two issues with respect to the mark: 1) whether or not it was deceptively misdescriptive at the time it was registered; and 2) whether or not, at the date that these proceedings were commenced, there was any measurable association amongst members of the Canadian public between the word "PARMA" and both a region in Italy and meat products, thus rendering the trade-mark invalid for lack of distinctiveness. The "PARMA" trade-mark was registered on November 26, 1971. The Consorzio did not conduct business in Canada until 1997 and only began expungement proceedings against the Respondent that same year.

FACTS:

[1]      The Applicant seeks to expunge the trade-mark "PARMA" (Registration No. 179,637) from the Register of Trade-marks pursuant to section 57 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act).

[1]      The "PARMA" trade-mark was registered on November 26, 1971 for use in association with various meat products, namely prosciutto, mortadella, salami, capicollo, pepper butts, pepperoni and dry sausage. The application for registration stated that the mark had been in use since September 18, 1958. The Respondent, Maple Leaf Meats, acquired the subject trade-mark in May 1997 from Principal Marques Inc. (PMI). PMI had acquired the mark from Primo Foods Limited in May 1994, who had acquired it in 1982 from Parma Food Products Limited.

[1]      Maple Leaf Meats continues to use the packaging "get-up" used by the previous owner of the trade-mark, PMI. This "get-up" features the use of, inter alia, the colours red, white and green and words taken from the Italian language.

[1]      The Applicant, the Consorzio, was founded in 1963 by 23 prosciutto producers located in Parma, Italy. By 1997 it had grown to 210 members. The Consorzio established the "ducal crown" mark for members to display in association with their prosciutto. This mark consists of the word "PARMA" within a crown design. Variations of this mark have been in use since 1963. Since 1970, Italy has had laws in place which adopted the Consorzio's production, quality control and marking rules.

[1]      The Applicant introduced excerpts from a few well-known U.S. cook books showing Parma was a region of Italy known for prosciutto and a number of meats. However, in my view this is not sufficient to show that the average Canadian consumer of "PARMA" meat products associated them with the Parma products of the Consorzio. "PARMA" is not descriptive of products. There is no evidence that a substantial number of Canadian consumers were generally aware of the Consorzio, its membership or policies in 1971.

[1]      In 1978, the Consorzio acquired the responsibility in Italian law to regulate the production of prosciutto di parma and the use of the prosciutto di parma marks.

[1]      In the late 1960's, prosciutto di parma was banned in the U.S. due to health concerns, but it was reintroduced in 1989 and has been marketed using the ducal crown mark since that time. The Canadian Government expressed some health concerns, but later allowed the Consorzio's product to be imported into Canada. Sales in Canada commenced in 1997. The Applicant claims that some Canadians would have heard of prosciutto di parma prior to that time through various media, including foreign magazines, advertising in the U.S., and attendance at trade shows.

[1]      The Respondent's mark has been registered since 1971. The Respondent alleges that the Applicant, Consorzio, knew of the mark at least as early as 1985, however the Consorzio did not conduct business in Canada until 1997 and did not begin expungement proceedings against the Respondent until that year, which the Respondent notes was 26 years after the registration of its trade-mark.

ANALYSIS:

[1]      The Respondent submitted that the Goldfarb Study presented to the Court by the Applicant in Reply should not have been admitted. However, McGillis J. issued an Order on September 9, 1999, dismissing the Respondent's motion appealing a decision to allow the filing of the Goldfarb report. In her Order, McGillis J. stated that she believed the report would be of assistance to the Court and in order to alleviate any prejudice to the Respondent, she granted the Respondent leave to file an affidavit in response to the report. The Respondent did indeed file such response. In light of the foregoing, the admissibility of the Goldfarb Study cannot be at issue and the report is admissible.

[1]      I now turn to the issue of deceptive misdescriptiveness. Pursuant to sections 18(1) and 12(1)(b) of the Act, the Applicant submits that the Respondent's trade-mark is invalid because it was deceptively misdescriptive at the time of registration. Essentially, the Applicant attempts to show that the use of the "PARMA" trade-mark leads consumers to believe that the prosciutto packaged under that name comes from Parma, Italy and is the high-quality product of the rigorous standards employed by the Consorzio del Prosciutto di Parma. I do not accept that, at the time of the registration of the Respondent's mark, many Canadians were exposed to the idea that Parma was a villagecity in Italy and that this city was a source of high quality prosciutto, nor any of the various other meat products listed on the trade-mark registration. I note that Prosciutto di Parma was not advertised directly in Canada nor sold here until 1997.

[1]      In order to determine whether or not the "PARMA" trade-mark was deceptively misdescriptive in 1971, I must decide:

...[W]hether the general public in Canada would be misled into the belief that the product with which the trade-mark is associated had its origin in the place of a geographic name in the trade-mark.

Atlantic Promotions Inc. v. Registrar of Trade-marks (1984), 2 C.P.R. (3d) 183 (F.C.T.D.) at 186.

[1]      In evaluating this question, I must place myself in the position of a consumer of ordinary intelligence and education and determine what he or she would think if he or she saw the mark used in context. This analysis also requires the Court to evaluate this test in the context of the year in which the trade-mark was registered. I do not accept the Applicant's argument that by 1971, Canadians had been sufficiently exposed to the idea that Parma, Italy produced high quality prosciutto. As such, I do not agree that the ordinary consumer would have assumed that prosciutto bearing the "PARMA" mark originated from Parma, Italy, and was produced as per the standards regulated by the Consorzio.

[1]      The Consorzio argues that the "PARMA" trade-mark registration should be expunged because geographical names are considered "common property" and that "Parma" is probably a word that other traders would choose to use in association with the sale of meat products. However, this argument does not hold given my finding that in 1971, the Canadian public was not generally aware of the association between Parma and both a region in Italy and meat products themselves.

[1]      The Respondent submits that the Act confers upon the owner of a registered trade-mark a presumption of validity, and as such, the onus is on the Applicant to show that the mark is invalid.

[1]      The Respondent argues that the Applicant cannot succeed due to its delay in the bringing of these proceedings. The Respondent relies upon the decision in Pepsi-Cola Company of Canada Ltd. v. Coca-Cola Company of Canada Ltd., [1940] S.C.R. 17, where Davis J. stated at 29:

The compound word "Coca-Cola" was registered in Canada as early as 1905 and has been used by the plaintiff as its trade name and trade mark in connection with the sale of its beverage...and the defendant's claim to have the registration of 1905 declared invalid and cancelled was not made until 1936. If there ever was any legitimate ground for impeaching the 1905 registration of Coca-Cola, there has been such long delay and acquiescence that any doubt must now be resolved in its favour. It would be a matter of grave commercial injustice to cancel the registration that has stood since 1905 and which admittedly has become widely used by the plaintiff. [emphasis added]

[1]      It should be noted that, pursuant to s. 45 of the Act, the Appellant brought proceedings regarding the "PARMA" mark in 1990. In that proceeding, the Appellant unsuccessfully challenged the mark on the issue of whether or not the mark was being used by the owner. The validity of the mark was not questioned at that time. The Appellant also states that it engaged in negotiations with the then-owners of the trade-mark between 1992 and 1996. These points go some way to diminishing the force of the Respondent's delay argument. However, the delay in bringing this expungement proceeding still has some weight, especially given that the issue raised in the earlier proceeding cannot be viewed as serving as some sort of notice to the Respondent that proceedings would probably be brought concerning the mark's validity. I also note that the Consorzio did not appeal the result of this earlier section 45 proceeding. In any event, the delay argument is not determinative of this matter.

[1]      The evidence does not demonstrate that in 1971 the general public in Canada was likely to have been misled by the use of the mark in association with the registered wares into believing that those wares originated specifically from Parma, Italy. I accept the Respondent's survey evidence that a majority of Canadians in the present day do not recognize that "Parma" is a region in Italy, nor do they associate the word "parma" with meat products. Dr. Corbin's study indicated that 68% of Canadians associated nothing with the word "parma", and that number was the same when looking at those who buy pork products. Dr. Corbin's results also indicated that among Canadians of Italian origin, 60% associated nothing with the word "parma". Where there is a conflict between the Respondent's survey evidence and the Applicant's, I prefer that of the Respondent.

[1]      The Applicant has failed to discharge its onus by showing that in 1971 the public would have linked the use of the mark with the specific wares from Parma, Italy. Canadians cannot have been deceived by the use of the mark in 1971, because according to the survey evidence, the majority of Canadians do not recognize Parma as a source of ham or pork products, nor do they associate "PARMA" meat products with Parma, Italy.

[1]      I also note that the Respondent's trade-mark is registered for use in association with a specific set of wares, only one of which is prosciutto. The Applicant has not shown any evidence in relation to the Respondent's registration as it relates to mortadella, salami, capicollo, pepper butts, pepperoni and dry sausage. The Applicant's evidence does not provide any basis for arguing that the "PARMA" trade-mark should be expunged in relation to these wares.

[1]      The Applicant made much of the need for trade-marks to be regulated in order to protect the consumer from deception as to the source and/or quality of wares available in the marketplace. Indeed, that is one of the aims of the legislation. However, the Act also seeks to protect the rightful owners of trade-marks from unfair competition. This policy is part of the larger goal of ensuring stability in the marketplace, allowing the owners of registered trade-marks to invest in building up goodwill surrounding their valid and registered trade-marks. I note that Joyal J. comments upon this particular aim of the Act in McCabe v. Yamamoto & Co. (America) Inc. (1989), 23 C.P.R. (3d) (F.C.T.D.) at 504:

I interpret the whole scheme of the Trade Marks Act as continuing the policy and purpose of its predecessor statute, the Unfair Competition Act, to bring some semblance of order in the market-place and to codify or structure in statute form the rights, duties and privileges of intellectual property owners at common law. Its whole thrust is to promote and regulate the lawful use of the trade marks.

[1]      This is particularly important in a case such as the one before me where the Respondent and its predecessors in title have been using the trade mark for over 26 years.

[1]      The Applicant's second line of argument questions the distinctiveness of the Respondent's trade-mark as at the date of the commencement of these proceedings. Distinctiveness of a trade-mark deals with whether or not the mark, when used in association with the wares, distinguishes for the consumer the source of those wares. The Court must ask itself whether or not the ordinary consumer in the market for that type of product would likely be deceived as to the source of that product.

[1]      Pursuant to sections 2 and 18(1)(b) of the Act, the Applicant submits that the Respondent's trade-mark was not distinctive at the time these proceedings were initiated on November 5, 1997. The Applicant submits that the mark was not distinctive as of above date due to:

1.      increasing recognition in the Canadian marketplace of the reputation and goodwill enjoyed by prosciutto from Parma, Italy;

        

2.      the repeated assignment of the Registration, the Trade-mark and the related business, without timely notice to the public of these changes of sources; and

        

3.      the use by PMI and the Respondent of a "faux-Italian" get-up on the packaging used in association with the trade-mark.

[1]      The Respondent is correct to indicate that its trade-mark carries a presumption of validity and the onus is on the Applicant to demonstrate that the subject mark has lost its distinctiveness.

[1]      I note that the distinctiveness of a trade-mark is made-out when appreciable portions of the public in the geographic area where the registration is to apply recognize the mark as distinctive. As such, survey evidence offered regarding the distinctiveness of a trade-mark should usually measure the recognition of that mark by the general consumer, and not by specialized consultants. Much of the Applicant's evidence came from people with a special knowledge of the Italian food industry in Canada and in Italy. In addition, the Applicant's Counsel put before the Court evidence provided by persons who are close family relations of a partner or an associate of theirCounsel's firm. On the whole, I do not view such evidence as representative of the knowledge held by the typical Canadian consumer of average intelligence and education.

[1]      I also note that the Applicant's survey evidence cannot assist in making out its case on distinctiveness. The subject survey was conducted in order to demonstrate that the "PARMA" trade-mark was deceptively misdescriptive, and therefore such evidence has no bearing on the issue of distinctiveness.

[1]      The Respondent and its predecessors-in-title have made use of the "PARMA" trade-mark in Canada since it was registered in 1971. While there may have been an increasing recognition over time in Canada of the reputation of prosciutto produced in Parma, Italy, there have been actual sales in Canada of meat products in association with the Respondent's trade-mark. MacGuigan J.A. made reference to the irrelevancy of the "spillover" effect in Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R. (3d) 289 (F.C.A.). At 296, he cites Tomlin J.'s enunciation of the law in Imper Electrical Ltd. v. Winbaum (1927), 44 R.P.C. 405 at 410:

For the purpose of seeing whether the mark is distinctive, it is to the market of this country alone that one has to have regard. For that purpose foreign markets are wholly irrelevant, unless it be shown by evidence that in fact goods have been sold in this country with a foreign mark on them, and that the mark so used has thereby become identified with the manufacturer of the goods.

    

[1]      Also, as the Applicant itself points out at paragraphs 46 and 47 of its submissions, the Respondent and its predecessor-in-title, PMI, have acted to protect the distinctiveness of the subject trade-mark. PMI warned the Applicant in writing that injunctive relief would be sought if it attempted to use the "PARMA" mark in Canada, and the Respondent wrote to one of the Consorzio's members with similar complaints.

[1]      In my view, the repeated assignment of the mark does not lessen the Respondent's rights. While the Respondent did use packaging that identified PMI as the producer of the products for a period of time, this was old packaging that the Respondent chose to use until new packaging was produced. It is significant to note that the Respondent had purchased PMI, so these two entities can be considered as being one and the same at the time that the subject packaging was being used. As such, the Canadian public could not have been deceived as to the source of the products sold by the Respondent with both the trade-mark as well as the name "PMI" appearing on the packaging.

[1]      The trade-mark was acquired by the Respondent and various predecessors-in-title through a valid process of succession which traces the ownership of the trade-mark back to its original owner, Parma Food Products Ltd. The Applicant has failed to demonstrate that the trade-mark was ever separated from its goodwill as a result of any of these acquisitions and has thereby failed to show that the trade-mark lost its distinctiveness through this succession of ownership.

[1]      The Applicant also argues that the Respondent's "faux Italian" packaging, which was used in association with the "PARMA" trade-mark, has eroded the distinctiveness of the mark over time. However, the "get up" associated with a trade-mark is irrelevant in an action alleging trade-mark infringement. The Federal Court of Appeal addressed this issue in Mr. Submarine Ltd. v. Amandista Investments Ltd. (1987), 19 C.P.R. (3d) 3. At page 11, Thurlow, C.J.A. discussed the decision of the trial judge in that case, indicating that the trial judge had erroneously taken into consideration factors that should only apply to an action in passing off. The learned former Chief Justice stated at 11 of his decision:

At this point the learned judge considered and appears to have taken into account that there was no similarity in the style of lettering used and the colouring of the signs of the parties and that the appearances of the two marks as actually used on the signs, boxes, etc., is quite different. These in my opinion would be very relevant considerations if the proceeding were a passing-off action at common law. They are irrelevant in a proceeding for infringement of a registered trade mark and should have been given no weight in determining whether the trade marks and trade names in issue are confusing with the appellant's registered mark.

[1]      While the Mr. Submarine case dealt with an infringement action, the basic principle still applies in this case where the Applicant seeks expungement of the Respondent's trade-mark, since passing off was not pleaded by the Applicant.

[1]      The Applicant's final argument is that the use of a "faux-Italian" get up in association with the Respondent's trade-mark may have induced the public to believe that the product was produced in Italy (presumably by the Consorzio di Parma). The Consorzio argues that the Respondent is trying to take advantage of the Consorzio's goodwill by using "faux Italian" packaging. However, the Respondent owns the trade-mark in Canada, a trade-mark that has been registered since 1971. The Respondent is entitled to package its product in any way that it sees fit. The use of packaging is only relevant with respect to the question of deceptive misdescriptiveness, and is irrelevant with respect to the question of distinctiveness of the trade-mark.

        

[1]      In summary, the Respondent is entitled to rely on the presumption that the registration and the particulars in the registration are valid, while the onus is on the Applicant to show the mark is not distinctive. The distinctiveness of a trade-mark must be measured in the Canadian marketplace alone. The Applicant's studies do not assist its case, as these studies were not done to test the distinctiveness of the mark. Additionally, the people on whom the Applicant relies for much of its case belong to a small and specialized class of people who are not representative of the Canadian market as a whole. As such, the Applicant has failed to discharge its onus.

ORDER

[1]      For the above reasons the Application is dismissed. If the parties cannot agree on costs, they may make written submissions to me.

     "W.P. McKeown"

     JUDGE

OTTAWA, ONTARIO

January 25, 2001

     FEDERAL COURT OF CANADA

     TRIAL DIVISION

     NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:      T-2382-97

STYLE OF CAUSE:      CONSORZIO DEL PROSCIUTTO DI PARMA v.

     MAPLE LEAF MEATS INC.

    

PLACE OF HEARING:      TORONTO

DATE OF HEARING:      NOVEMBER 27, 28 and 29, 2000

REASONS FOR ORDER OF McKEOWN, J.

DATED:      JANUARY 25, 2001

APPEARANCES:

BRIAN EDMONDS

KIRSTEN THOMPSON          FOR THE APPLICANT

JAMES BUCHAN

A. KELLY GILL          FOR THE RESPONDENT

SOLICITORS OF RECORD:

McCARTHY TÉTRAULT

TORONTO          FOR THE APPLICANT

GOWLING LAFLEUR HENDERSON LLP

TORONTO          FOR THE RESPONDENT