Date: 20050519
Docket: T-2456-03 & T-2457-03
Citation: 2005 FC 707
IN THE MATTER of section 56 of
the Trade-marks Act and Rule 300(d) of the
Federal Court Rules, 1998
BETWEEN:
VIVAT HOLDINGS LIMITED
Applicant
and
LEVI STRAUSS & CO.
Respondent
[1] The stitching design on the back pocket of Levi jeans is called a DOUBLE ARCUATE. The Trade-marks Opposition Board (TMOB) was required to determine whether the stitching designs on the applicant's jeans should be registered as trade-marks. These are appeals of the decision of the TMOB refusing the applicant's two trade-mark applications.
INTRODUCTION
[2] The corporate predecessor of the applicant filed applications for registration of two mirror image pocket stitching design trade-marks. I will refer to the applicant as "Vivat" and to its stitchmark designs as the "Vivat marks". The applications were based on proposed use in Canada in association with articles of clothing and footwear. The Vivat marks are depicted below.
[3] The respondent, Levi Strauss & Co. (Levi), opposed the applications on the basis that the Vivat marks were confusing with the Levi DOUBLE ARCUATE design trade-mark that had been previously registered, used and applied for in Canada. Additionally, Levi opposed on the basis of non-distinctiveness alleging that the Vivat marks did not and were not adapted to distinguish in light of Levi's DOUBLE ARCUATE design trade-mark. The DOUBLE ARCUATE, which I will refer to as the "Levi mark", is shown below.
These are parallel applications for appeals and these reasons apply to both applications.
THE RELEVANT STATUTORY PROVISIONS
[4] The text of the pertinent statutory provisions is attached to these reasons as Schedule "A". Levi opposed Vivat's applications under paragraph 12(1)(d) of the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act) - which provides that a trade-mark is registrable if it is not confusing with a registered trade-mark - and paragraphs 16(3)(a) and (b) of the Act - which provide that an applicant is entitled to registration of an applied for mark unless at the date that it was used or made known, it was confusing with a trade-mark that had been previously used in Canada or made known in Canada by any other person, or for which an application had been previously filed in Canada by any other person. Thus, the question was whether the Vivat marks were confusing with the Levi mark.
[5] The issue of confusion between two marks is governed by section 6 of the Act. That section states that the use of a trade-mark causes confusion with another trade-mark, if the use of both marks in the same area would be likely to lead to the inference that the wares associated with those marks are manufactured or sold by the same person, whether or not the wares are of the same general class. Subsection 6(5) mandates that the determination regarding confusion is to be made by having regard to all of the surrounding circumstances including (in relation to this matter) the inherent distinctiveness of the trade-marks and the extent to which they have become known, the length of time each has been in use, the nature of the wares, the nature of the trade and the degree of resemblance between the trade-marks in appearance or the ideas suggested by them.
THE EVIDENCE BEFORE THE TMOB
[6] Levi submitted five affidavits in support of its opposition. Ms. Lynn Downey, a librarian and historian, provided evidence relating to Levi's use of the Levi mark in the United States. Mr. Herbert McPhail, a trade-mark researcher, provided a copy of the trade-mark registration for the Levi mark for use in association with "overalls" and the particulars of the pending trade-mark registration for the Levi mark for use in association with other items.
[7] Mr. John Chambers, an author and professor of linguistics at the University of Toronto, attested to the fact that the word "overalls" was used in and around 1950 to designate trousers that, today, would be called "jeans" or "cords". Mr. Chris Yaneff, a professional graphic designer of some 40 years experience, has created logos and designs that have been registered as trade-marks and has lectured extensively on the creation and design of trade-marks. He stated that the Levi mark design is a "memorable brand identifier".
[8] Ms. Ellen Baker, a trade-mark specialist employed by Levi, provided evidence that Levi, through a number of individual and chain retail stores, has sold in excess of 120 million garments in Canada bearing the Levi mark. Also, the Levi mark is featured in a substantial portion of Levi's advertising.
[9] Vivat submitted three affidavits and a sample of clothing bearing the Vivat marks in support of its applications. The affidavits were those of Mr. Cedric Lam, Mr. Alan Jeffrey Richards and Ms. Louise MacLean.
[10] In 1996, Mr. Lam purchased eight different brands of jeans - all of which contained stitching on the back pockets - at a number of stores in the downtown Toronto area. Photographs of the back pockets were exhibited to his affidavit. Mr. Richards, the secretary and director of Vivat Holdings PLC in the United Kingdom, provided evidence regarding the company's use and registration of the Vivat marks in Canada and other countries. Ms. MacLean's evidence related to the state of the register with respect to registrations and applications for garment stitch marks. She also provided copies of various statements of claim filed in the Federal Court, by Levi, alleging infringement of the Levi mark by reason of sales of jeans by other companies. In October, 1998, Ms. McLean purchased eight brands of jeans from a number of stores in the downtown Toronto area. Photographs of the stitching on the jeans' back pockets were exhibited to her affidavit.
[11] In reply, Levi submitted a further affidavit from Ms. Baker responding to the evidence of Ms. MacLean and Mr. Lam. She provided information regarding the actions taken by Levi to protect its mark.
THE DECISION
[12] The TMOB did not find all of the evidence helpful. It stated that Ms. Downey provided little evidence that was probative to the matter. The relevant part of Mr. Yaneff's evidence related to the distinctive characteristic of the Levi mark - the combination of a double arch comprised of double stitching (double arch-double stitching). The evidence of Mr. Richards, for the most part, was regarded as not helpful because it either consisted of inadmissible hearsay or it provided little in the way of information relevant to Canada.
[13] Ms. MacLean's evidence regarding the state of the register did not show that double arch-double stitch designs, such as the Levi mark, are common in the marketplace. The board determined that there were too few relevant registrations or applications (for double arch-double stitch marks) evidenced by Vivat from which to draw an inference that the design is common. Of the eight pockets of jeans exhibited to Ms. MacLean's affidavit, only three could be described as bearing a double arch-double stitch design and one of the three resembled the Vivat marks more than the Levi mark. Yet another, of the three, was quite distinct from either of the marks in issue. On the basis of this evidence and Levi's evidence, the TMOB concluded that a "significant part of the Canadian population has likely been exposed from time to time" to double arch-double stitch designs that more closely resemble the Vivat marks than the Levi mark.
[14] The TMOB refused to draw adverse inferences against Levi in relation to refusals to answer certain questions or produce certain evidence at cross-examination, specifically, questions to Mr. Yaneff (concerning the distinctiveness, uniqueness and memorability of some of the stitchmarks evidenced by Vivat) and requests for evidence from Ms. Baker (regarding the extent of sales of garments that Levi believed infringed its mark).
[15] The TMOB concluded that Mr. Yaneff would not have been able to provide anything probative with regard to distinctiveness, uniqueness and memorability of other stitchmarks. It found that there was merit to Vivat's argument regarding Ms. Baker's refusal to provide evidence, but observed that Vivat did not question Ms. Baker on her statement that "the use of the marks or designs [of third parties] is on a small scale and short-lived", therefore, the statement was unchallenged. The board opined that had Vivat questioned Ms. Baker on her evidence and raised doubts as to the reliability or accuracy of her statement, it likely would have drawn a negative inference.
[16] The TMOB, in accordance with American Assn. of Retired Persons v. Canadian Assn. of Retired Persons (1998), 84 C.P.R. (3d) 198 (F.C.T.D.), set out the following material dates with regard to each of Levi's grounds of opposition:
- under paragraph 12(1)(d) of the Act: the date of the board's decision;
- under subsection 16(3) of the Act: the priority filing date for Vivat's marks (June 27, 1994);
- opposition based on the issue of distinctiveness: the date of the filing of the opposition (August 9, 1994).
[17] The board affirmed the proposition that the legal onus is on an applicant to show that there would be no reasonable likelihood of confusion, within the meaning of subsection 6(2) of the Act, between the applied for marks and the opponent's marks. It stated that if a determinate conclusion cannot be reached once all the evidence is in, then the issue must be decided against the applicant. It identified the test for confusion as one of first impression and imperfect recollection.
[18] In relation to the considerations enumerated in subsection 6(5) of the Act, the TMOB made a number of findings.
[19] Regarding "the inherent distinctiveness of the trade-marks and the extent to which they have become known" (paragraph 6(5)(a) of the Act), the board was not convinced by Levi's evidence that its mark is an inherently distinctive or strong mark. In this respect, it relied on a previous decision of the TMOB in Levi Strauss & Co. v. Benetton Group S.p.A. (1997), 77 C.P.R. (3d) 223. Nor did it find Mr. Yaneff's statements that the Levi mark is "memorable" and "inherently distinctive" to be compelling. Such matters, it stated, should be established by properly conducted surveys. Similarly, the board found that the Vivat marks are not inherently strong. It concluded that Levi's evidence established that its mark was well-known in Canada at all material times while Vivat failed to establish that its marks have acquired any reputation in Canada at any time. Thus, this factor favoured Levi.
[20] With respect to "the length of time the trade-marks...have been in use" (paragraph 6(5)(b) of the Act), the board found that the factor militated strongly in Levi's favour.
[21] In relation to "the nature of the wares" (paragraph 6(5)(c) of the Act), the TMOB found that the wares of the parties are the same in respect of overalls and jeans and closely related in respect to other items of clothing listed in the respective applications for registration. This factor also favoured Levi.
[22] Regarding "the nature of the trade" (paragraph 6(5)(d) of the Act), the board stated that the channels of trade would be "the same or overlapping". Thus, this factor also favoured Levi.
[23] Concerning "the degree of resemblance between the trade-marks...in appearance...or in the ideas suggested by them" (paragraph 6(5)(e) of the Act), the TMOB regarded this as one of the most important factors, given the circumstances of this case. The board found that the Vivat marks incorporate the double arch-double stitch design - the "essential concept" of the Levi mark - but that the Vivat marks also have features which are different from the Levi mark. The board referenced Krazy Glue, Inc. v. Grupo Cyanomex, S.A. de C.V. (1992), 45 C.P.R. (3d) 161 (F.C.T.D.) where Madam Justice McGillis enunciated the test for confusion as "whether an average person, as a matter of first impression and not of close scrutiny and having an imperfect recollection of the trade marks, would be confused".
[24] The TMOB disagreed with Vivat's assertion that the breadth of protection provided to Levi's mark should be limited on the basis that the average consumer was accustomed to seeing various third party stitchmark designs in the marketplace and was therefore able to distinguish between these designs. The board found Vivat's evidence insufficient to support its assertion and concluded that the evidence revealed that third party use of double arch-double stitchmarks occurred from "time to time" but that such use would discontinue because of Levi's efforts to protect its mark.
[25] Having regard to all of these factors, the TMOB held that the balance of probabilities was evenly balanced between a finding that there was no reasonable likelihood of confusion between the marks in issue and a finding that there was a reasonable likelihood of confusion. Since the onus was Vivat's to meet, the issue had to be decided against it. Accordingly, it refused the applications to register the Vivat marks.
THE STANDARD OF REVIEW
[26] On an appeal under section 56 of the Act, the applicable standard of review has been determined and defined in Molson Breweries v. John Labatt Ltd. (2000), 5 C.P.R. (4th) 180 (F.C.A.), leave to appeal dismissed, [2000] S.C.C.A. No. 161 and Christian Dior, S.A. v. Dion Neckwear Ltd. (2002), 20 C.P.R. (4th) 155 (F.C.A.). The board's decisions are to be reviewed on a standard of review of reasonableness, which is synonymous with clearly wrong, unless additional evidence is adduced on appeal that would have materially affected the decision. Where additional evidence is filed that would have materially affected the board's findings of fact or law, or the exercise of discretion, the test is one of correctness.
[27] To affect the standard of review, the new evidence must be sufficiently substantial and significant. If the additional evidence does not go beyond what was in substance already before the board and adds nothing of probative significance, but merely supplements or is merely repetitive of existing evidence, then a less deferential standard is not warranted. The test is one of quality, not quantity: Garbo Group Inc. v. Harriet Brown & Co. (1999), 3 C.P.R. (4th) 224
(F.C.T.D); Canadian Council of Professional Engineers v. APA - Engineered Wood Assn. (2000), 7 C.P.R. (4th) 239 (F.C.T.D.); Mattel, Inc. v. 3894207 Canada Inc. (2004), 30 C.P.R. (4th) 456 (F.C.).
THE ADDITIONAL EVIDENCE
[28] Both Vivat and Levi filed further evidence pursuant to subsection 56(5) of the Act. For Vivat, the affidavit of Mr. Stephen Bierbrier discussed his act of photographing various pairs of jeans available for sale in Ottawa, in 1994. Ms. Elena Wegner conducted marketplace and internet investigations to try and find jeans utilizing back pocket stitching similar to the stitching used on Levi jeans. Her results were photographed or printed. Ms. Ellen Anastacio filed further state of the register evidence and Mr. James Anthony Gerety, group managing director for two of the Vivat companies, provided evidence concerning the co-existence of the Vivat and Levi jeans in foreign jurisdictions. Levi provided the affidavit of Mr. Kevin Hampson attesting to Levi's efforts and success in arresting third party use of the relevant designs referred to in the Bierbrier and Wegner affidavits.
[29] Levi takes the position that, notwithstanding the quantity, the additional evidence does not add qualitatively to the evidence that was before the TMOB. The evidence simply adds "more of the same" and does not "radically change the factual situation". None of the new evidence would have materially affected the decision of the TMOB. Hence, Levi contends that the proper standard of review is reasonableness.
[30] Vivat's written submissions do not go so far. However, at the hearing, Vivat did not argue that the new evidence was such that it satisfied the "substantial" and "significant" criteria. Nor did Vivat suggest that the new evidence did anything other than repeat or supplement the existing evidence. In my view, Vivat's new evidence (described below) is "merely repetitive" of the evidence that was before the TMOB "without enhancing its cogency": Garbo Group Inc., supra.
[31] Photographs of the stitching on the back pockets of jeans available for purchase at stores in downtown Toronto were exhibited to the affidavits of Mr. Lam and Ms. MacLean in the opposition proceeding. Ms. MacLean's affidavit also contained evidence as to the state of the register - at the time it was sworn - with respect to applications and registrations for garment stitchmarks. The evidence proffered in the additional affidavits of Mr. Bierbrier, Ms. Wegner and Ms. Anastacio is, in my opinion, "more of the same" information that was already before the TMOB. It is not enough that the jeans photographed by Mr. Bierbrier were available in stores in Ottawa rather than Toronto. Nor is it enough that Ms. Wegner and Ms. Anastacio simply updated the searches previously completed by Ms. MacLean. Vivat's counsel, at the hearing, appropriately in my view, requested that the internet search documents be ignored.
[32] In sum, the evidence in the above noted "new" affidavits is strikingly similar in quality to the evidence that was before the TMOB. These affidavits do not add anything that would have materially affected the decision of the board.
[33] I am of a similar view regarding the evidence of Mr. Gerety. For the most part, his evidence simply reiterates the evidence provided in the affidavit of Mr. Richards. Specifically, he restates that there have been no incidents of actual confusion with the Levi mark reported by retailers and licensees. The only "new" information provided by Mr. Gerety is an update regarding oppositions in other jurisdictions, which is of little probative value in terms of the likelihood of confusion in Canada.
[34] For the foregoing reasons and in view of Vivat's withdrawal of its argument that the TMOB erred in applying a "still in doubt" standard of proof, the decision of the TMOB will be reviewed on a standard of review of reasonableness, that is, whether it was clearly wrong.
ISSUES
[35] As alluded to above, Vivat's written submissions allege error on the part of the TMOB in relation to the legal onus. Having reflected on the statements in Dion Neckware Ltd., supra, - to the effect that "[i]f the evidence is such that the tribunal can say: 'we think it more probable than not', the burden is discharged, but if the probabilities are equal it is not" - Vivat, to its credit, withdrew its argument regarding the onus.
[36] Vivat alleges a plethora of errors on the part of the TMOB. In my view, the various issues identified by Vivat can be addressed by asking whether the TMOB erred:
(a) in using a "conceptual" design element;
(b) in its assessment of the state of the register and the marketplace; or
(c) by failing to consider evidence of coexistence.
In some instances, the arguments relative to these issues are interrelated.
THE "CONCEPTUAL" DESIGN ELEMENT
[37] First, Vivat contends that the TMOB disregarded third party stitchmark designs that had elements in common with the Levi mark and chose, instead, to consider only those stitchmark designs that met the double arch-double stitch profile. Had it properly considered all of the stitchmark designs (on the register and in the marketplace) with a common element, the board would have been compelled to find that the average consumer is accustomed to encountering the different stitchmarks used by different traders and would not likely be confused. The ambit of protection for the Levi mark, according to Vivat, would have been narrowed.
[38] The overarching principle regarding the assessment of the state of the register or of the marketplace in a matter regarding confusion is expressed in Kellogg Salada Canada Inc. v. Maximum Nutrition Ltd. (1992), 43 C.P.R. (3d) 349 (F.C.A.) at pp. 358-359 where Mr. Justice Stone adopted the following statement from Re Harrods Ltds. Appl'n (1934) 52 R.P.C. 65:
Now it is a well recognized principle, that has to be taken into account in considering the possibility of confusion arising between only two trade marks, that, where those two trade marks contain a common element which is also contained in a number of other trade marks in use in the same market, such a common occurrence in the market tends to cause purchasers to pay more attention to the other features of the respective marks and to distinguish between them by those other features.
[39] The first step is to look for the common element between the two marks. That, in my view, is what the TMOB did and it was reasonable, and indeed correct, for it to conclude, based on the evidence before it, that the Levi mark and the Vivat marks do contain a common element - a double arch comprised of double stitching. Thus, it was, pursuant to the principle set out in Kellogg Salada Canada, supra, also reasonable for the TMOB to limit its consideration of other trade marks used in the same market to those jeans bearing a double arch-double stitching design. Vivat's contention - that any jeans on the market bearing decorative stitching should be considered - casts too wide a net to yield any meaningful comparison.
[40] Having identified the third party designs that bore the double arch-double stitching element, the TMOB made the following assessment:
I find that the applicant's evidence is insufficient to support the premise that consumers are accustomed to seeing third party design marks which are essentially the same as the opponent's DOUBLE ARCUATE mark. Rather, the evidence shows that third party use of double arch-double stitchmarks, more closely resembling the applied for marks than the opponent's mark, occurs from time to time but that such use discontinues because of the opponent's efforts to protect its DOUBLE ARCUATE mark. Had the applicant been able to establish long term and extensive use of double arch-double stitch design marks by many third parties, then I agree that such a surrounding circumstance would have weighed significantly in the applicant's favour to limit the breath (sic) of protection afforded to the opponent's mark.
[41] The board's comments, regarding the marks not being "essentially the same" as the DOUBLE ARCUATE, I agree, are problematic. The proper consideration, in accordance with the reasoning in Kellogg Salada Canada, supra, is whether there are third party marks in use that bear the element that is common to both of the marks at issue - in this instance, the double arch-double stitching. Once the TMOB identified the third party marks that fit this profile, it should not have further narrowed its analysis by considering whether those identified marks more closely resembled the Vivat marks, rather than the DOUBLE ARCUATE.
[42] That said, nothing turns on the questionable comments. The material aspect of the finding was not that the identified third party marks more closely resemble the Vivat marks, but that the use of these third party marks "occurs from time to time but that such use discontinues because of [Levi's] efforts to protect" the DOUBLE ARCUATE.
[43] It was proper for the TMOB to consider the extent of the use of third party marks bearing the common element. The Federal Court of Appeal, in Kellogg Salada Canada, supra, at p. 359, approved of such consideration when it adopted the following comments of the editors of Canadian Law of Trade Marks and Unfair Competition, 3rd ed. (Toronto: Carswell, 1972):
It is seldom that only parts common to the trade are taken and used without the addition of other and possibly distinguishing features. The usual circumstance is that a part of a trade mark such as a prefix or suffix of a word is taken, or in other cases, only one of the words of a trade mark consisting of a plurality of words. In considering the possibility of confusion between any two trade marks, it is a well recognized principle that, where those two marks contain a common element that is also contained in a number of other marks in use in the same market, such a common occurrence in the market tends to cause purchasers to pay more attention to the other or non-common features of the respective marks and to distinguish between them by those other features. This principle, however, requires that the marks comprising the common elements shall be in fairly extensive use in the market in which the marks under consideration are being used or will be used. (emphasis is mine)
The question that remains is whether the finding with regard to the extent of the use of relevant third party marks was reasonable. That issue is discussed more fully, under the second and third headings, later in these reasons.
[44] Next, Vivat asserts that the board's reliance on the resemblance in the underlying "concepts" of the designs in issue has no support in law and that it was an error for the TMOB to find that the underlying "concept" was the same in the face of its finding that the Vivat marks were sufficiently dissimilar from the Levi mark in terms of visual presentation. To import a consideration of "concept" into paragraph 6(5)(e) of the Act, which deals with the degree of resemblance between the trade-marks, constitutes an error of law, urges Vivat.
[45] The TMOB refers to "concept" in its analysis of confusion under paragraph 6(5)(e) of the Act in the following excerpts from its reasons:
In my view, the most important factors in this case are (i) the degree of resemblance between the marks in issue, and (ii) whether marks similar to the opponent's DOUBLE ARCUATE are common in the marketplace. With respect to (i), I find that the applied for marks incorporate the essential concept of the opponent's mark namely, the double arch-double stitch design, but that the applied for marks nevertheless possess features which are different from the opponent's mark. That is to say, the overall design concept is the same but there are differences in the presentation of the concept. [...]
To summarize, the visual differences between the parties' marks weighs (sic) in the applicant's favour. However, the fact that the applicant's mark employs the same conceptual design features as the opponent's mark, and that the opponent's mark was well known at all material times weighs against the applicant. [...] (emphasis is mine)
[46] Vivat's argument is, in my view, without merit. When taken in context, the use of the word "concept" refers to the idea suggested by the marks in issue, a consideration specifically provided for in paragraph 6(5)(e). It was open to the TMOB to consider both the appearance of the marks (concluding that the Vivat marks possess some features that are different from the Levi mark) and the concept or idea suggested by the marks (concluding that the marks share the same overall design concept - the double arch-double stitch). There is no error here.
[47] In summary, the Vivat marks and the Levi mark are both used as decorative stitching on the back pockets of overalls, jeans, and other clothing garments. The TMOB was correct that they contain a common element - both designs use a double arch with double stitching. I recognize that there are visual differences between the two designs. Most notably, the Vivat marks are asymmetrical while the Levi mark is symmetrical. A number of other visual differences are itemized by Vivat in its memorandum, but at the end of the day, these differences are not so significant as to negate Vivat's use of the double arch-double stitch element. Put another way, the TMOB was correct in its observation that there are visual differences (a factor that favours Vivat), but the dominant feature of both designs is the double arch-double stitching (a factor that weighs heavily in favour of Levi). There is, as stated earlier, nothing in the additional evidence that could impact, materially or otherwise, on these findings.
THE STATE OF THE REGISTER AND MARKETPLACE
[48] Vivat argues, first, that the TMOB erred because its consideration of what constituted the market place was too narrow. This submission is centred on the contention that the TMOB disregarded third party stitchmark designs that had elements in common with the Levi mark. My analysis in relation to this argument is covered in the reasoning pertaining to the first issue and I do not intend to revisit it. Suffice it to say that, based on the evidence that was before the TMOB and the additional evidence filed on these appeals, the number of third party stitchmarks on the register or in the market that meet the double arch-double stitch profile is not extensive.
[49] The second assertion is that the TMOB excluded assessment of evidence that Levi itself considers various third party stitching designs, which are not "essentially the same" as the Levi mark, as infringing the rights flowing from its design registration. In this respect, Vivat is referring to certain of the statements of claim that Levi initiated against third parties. Vivat offers no explanation as to what relevance, beyond Levi's enforcement efforts to protect its mark, the statements of claim could bring to bear on the issue before the TMOB. The argument was not sufficiently developed to enable me to conclude that the board was unreasonable or incorrect in failing to consider it as a factor.
[50] Vivat also contends that the TMOB erred in declining to draw an adverse inference regarding the extent of third party stitching designs, due to Ms. Baker's and Mr. Yaneff's refusal to answer questions or produce relevant documentation on cross-examination regarding the nature and use of third party stitching marks, in the face of its observation that there was "merit" in Vivat's request. Vivat notes the absence of a mechanism, in proceedings before the TMOB, to compel affiants to answer questions. The only remedy available to a party, in such circumstances, is to request that the TMOB disregard the evidence, give it little weight, or draw an adverse inference.
[51] It is said that the error (in failing to draw an adverse inference) was compounded by the determinative weight that the TMOB gave to Ms. Baker's statement that "the use of the marks or designs [of third parties] is on a small scale and short-lived". Vivat contends that the TMOB wrongly observed that this statement was "uncontradicted and unchallenged by the applicant" because Ms. Baker refused to answer Vivat's questions regarding the issue of the extent and duration of third party use of stitching designs.
[52] Insofar as Mr. Yaneff is concerned, the board expressly limited its reliance on the Yaneff evidence and found that there was no credible basis for concluding that answers to the referenced questions would have had any probative value. In my view, that determination is not clearly wrong. It is highly doubtful that Mr. Yaneff's evidence could have assisted Vivat.
[53] With respect to Vivat's concerns regarding Ms. Baker, the TMOB concluded that the third party use of double arch-double stitchmarks in the market was not extensive and only occurred "from time to time" based on the following factors:
- its observation that Mr. Lam was not able to provide any information regarding the length of time that the jeans referred to by him had been sold in Canada, or the extent of such sales;
- the evidence of Ms. MacLean describing actions taken by Levi with regard to various third party stitching designs and the outcomes of those actions;
- the evidence of Ms. Baker that Levi consistently takes legal action to prevent use of double arch-double stitch designs as trade-marks on jeans and that such actions usually result in the defendant ceasing use of the design in issue;
- Vivat's choice not to question Ms. Baker on the statement made in her affidavit that the "use of the marks or designs [of third parties] is on a small scale and short-lived", which left this statement "uncontradicted and unchallenged".
[54] I agree with Vivat that the last factor is not an accurate reflection of the state of affairs. A review of the transcript of Ms. Baker's cross-examination reveals, unequivocally, that Vivat's counsel did pose questions of Ms. Baker that went to the issue of the extent and duration of the use in the market of the third party stitching designs referred to in Ms. Baker's affidavit. Answers to the questions were refused or taken under advisement. The Levi information produced following the cross-examination provided some details, specifically, the dates when Levi purchased garments as well as copies of, and information about, settlement agreements requested by Vivat, except those that Levi was not at liberty to produce because of confidentiality terms in certain of the agreements. However, it is indisputable that answers to the questions concerning the extent and duration of third party use were not forthcoming, regardless that the reason may have been an inability to respond. The excerpt set out below lends insight as to the weight the TMOB attached to Ms. Baker's statement:
There is merit in the applicant's argument that the documents requested might have illuminated the issue of the extent of third party use of stitchmarks. However, Ms. Baker's affidavit testimony affirmed that "the use of the marks of designs [of third parties] is on a small scale and short lived...". Counsel for the applicant elected not to question Ms. Baker on these matters which appear to be within her scope of knowledge. Accordingly, on the one hand this Board has Ms. Baker's uncontradicted and unchallenged evidence concerning the extent of use of third party marks and on the other hand there is the applicant's argument for the potential of finding contrary information that would assist the applicant. Had the applicant questioned Ms. Baker on her evidence and had doubts been raised as to the reliability and accuracy of her evidence, then I would have acceded to the opponent's request that the negative inferences be drawn. However, in the present case where there has been no attempt to question Ms. Baker on her testimony, I do not believe the applicant has fully established a case for drawing negative inferences.
[55] The question - whether Ms. Baker "had any information whatsoever concerning the scale and duration of the use" of the designs referred to her in her affidavit - was taken under advisement and answered in the written follow-up as set out below:
Provide information concerning the scale and duration of the use of the
third party designs referred to in paragraph 8 of the Baker affidavit.
- A: The scale and duration of third party use being referred to is set out
in paragraph 8 of the Baker affidavit.
Advise what basis Ms. Baker has to make the comment referred to in
paragraph 8 of her affidavit.
- A: Refused.
[56] The refusal or inability to answer the question and other related ones is sufficient, in my view, to raise doubt as to the reliability and accuracy of Ms. Baker's statement regarding the scale and duration of the use of third party stitchmarks in comparison to the Levi mark. Consequently, the statement, in and of itself, should have been accorded little weight in terms of determining the extent and duration of the use of third party designs.
[57] However, it does not necessarily follow that an adverse inference should be drawn regarding the extent and use of the third party stitchmarks identified in Ms. Baker's affidavit. The follow-up information to the outstanding questions and undertakings from the cross-examination furnished responses to a number of questions that were specifically related to the extent and duration of certain third party designs. Each time, Levi answered that it was impossible to provide information regarding the dates between which there were continuous sales of garments bearing a particular design, but it provided the dates upon which Levi had purchased the garments bearing that design. Levi was forthcoming with the information that it had and it was forthcoming about its inability to provide information regarding the duration and extent of third party designs in the market.
[58] In Milliken & Co. v. Interface Flooring Systems, [1998] 3 F.C. 103 (F.C.T.D.), Madam Justice Tremblay-Lamer, at page 115, adopted the following passage from Wigmore on Evidence:
The failure to bring before the tribunal some circumstance, document, or
witness, when either the party himself or his opponent claims that the
facts would be thereby elucidated, serves to indicate, as the most natural
inference, that the party fears to do so, and this fear is some evidence
that the circumstance or document or witness, if brought, would have
exposed facts unfavourable to the party. These inferences, to be sure,
cannot fairly be made except upon certain conditions, and they are also
open always to explanation by circumstances which make some other
hypothesis a more natural one than the party's fear of exposure. But
the propriety of such an inference in general is not doubted.
[59] In the present circumstances, it can not be said that Levi's failure to respond specifically to the questions was out of fear that it would have exposed information unfavourable to it. Vivat, in its submissions, states that Levi's mark has been used, unalterered, for at least 54 years. Vivat takes no issue with Ms. Baker's evidence that Levi diligently protects its mark and enforces its rights in relation to it. Levi produced the dates upon which it purchased garments bearing marks that it considered infringed its rights. Information about specific time frames, the extent, and the duration of a third party's design in the marketplace would lie exclusively within the knowledge of the third party.
[60] Similarly, it can not be said that the failure to produce copies of confidential settlement agreements was out of fear that their contents would expose information about the extent and duration of the third party's design in the marketplace. I am reinforced in this view since Vivat, in these proceedings, had the opportunity to request the documents and information that could not be provided in the opposition proceeding and elected not to make such request.
[61] In this context, while the TMOB was clearly wrong in finding that Ms. Baker had not been questioned on her evidence, it was nonetheless not, in my view, an appropriate situation in which to draw an adverse inference.
[62] In summary, the evidence of the state of the register and the marketplace consists of a sparse number of third party stitchmarks on the register (or in the market) that meet the double arch-double stitch profile. Nothing provides a clear indication of the extent and duration of their use in the marketplace. At best, we know that at various times, Levi was able to purchase garments bearing some of these designs, as was Vivat, but the use may have been aborted because of Levi's actions to protect its trade-mark. The evidence indicates that some of the brands of jeans, identified during Vivat's marketplace purchases, were the subject matter of settlements (in Levi actions) after the date of the purchases. In other instances, nothing is known about the extent and duration of use. Vivat simply did not establish, on the evidence, that the third party designs that bear the common element - double arch-double stitching - are in "fairly extensive use" in the marketplace.
EVIDENCE OF COEXISTENCE
[63] Vivat contends that the TMOB erred in failing to consider the status of foreign applications and registrations of the Vivat marks. It alleges that the board was wrong in disregarding evidence establishing the coexistence, in Canada and in other countries around the world, of garments bearing the Vivat marks and the Levi mark without any recorded incident of confusion among retail traders or consumers. Since there was evidence of coexistence without confusion, the TMOB ought to have considered the absence of evidence of confusion in any foreign jurisdiction where there was contemporaneous use of the marks in question.
[64] Last, Vivat asserts that the evidence ought to be considered through the lens of an average consumer, that is, a person of average intelligence, not hurried or wary. According to Vivat, the average consumer is brand-conscious when purchasing items of fashion. This consumer is one who pays attention to the brands purchased, handles the garments, inspects them closely, and tries them on for size before they are purchased. Consumers, Vivat says, have been exposed to Levi's design (which is its only design) for more than 50 years, so it is unlikely that garments bearing the Vivat marks would be purchased on the mistaken belief that they are a Levi product (because of the visual dissimilarities between the marks).
[65] The "consideration of foreign applications and registrations" can be summarily determined. There is no dispute that there was no evidence regarding foreign law. Neither Mr. Richards (nor Mr. Gerety) professed to have knowledge of such matters. Mr. Justice Marceau in Re Haw Par Brothers International Ltd. v. Registrar of Trade Marks (1979), 48 C.P.R. (2d) 65 (F.C.T.D.) determined that little can be drawn from the fact that the trade marks at issue coexist in other jurisdictions, for the Registrar's decision must be based on Canadian standards, having regard to the situation in Canada. Similarly, in Sun-Maid Growers of California v. Williams & Humbert Ltd (1981), 54 C.P.R. (2d) 41 (F.C.T.D.) Associate Chief Justice Thurlow opined that registrations in other jurisdictions are irrelevant since they have their basis entirely in foreign law and procedure. I am inclined to agree with Levi that evidence of mere coexistence of marks on foreign registers is not relevant and evidence of foreign opposition on unproven records under foreign law is not probative. Moreover, Vivat has not been successful with respect to all of its applications.
[66] Regarding the submission of coexistence, Vivat's counsel, while maintaining that there exists a "large degree of coexistence in international use", acknowledged, at the hearing, that in Canada, the evidence is more "modest". In relation to Canada, Vivat relied upon the evidence of Mr. Richards who the TMOB found did not "provide any quantitative evidence of the extent of use of the applied for marks in Canada or elsewhere". The TMOB also found that his evidence was lacking in details and consisted of inadmissible hearsay.
[67] In my view, the board's conclusion was not unreasonable and indeed it was correct. The alleged sale of "in excess of 40,000 units" through a licensee, between November of 1994 and December of 1997, was nothing more than a generalized statement. Evidence regarding the circumstances surrounding the alleged sale of garments bearing the marks applied for in Canada was totally lacking.
[68] For completeness, I note that the evidence of Mr. Gerety, filed on these appeals, does not assist Vivat. The alleged sale of 125,000 garments arose from "one-off" sales through a foreign licensee to trading companies located in Canada. Mr. Gerety was not able to elaborate on any actual sales in Canada, and did not have any knowledge as to where or how the garments were sold. At best, he provided hearsay evidence that such goods were "moved" to the purchasers "for sale in Canada".
[69] This dilemma for Vivat is not resolved by the notion of "international coexistence", the relevance of which (on the basis of the noted authorities) is highly questionable. In relation to the Richards evidence on the absence of confusion, the evidence consists of a Vivat employee's double hearsay compilation of responses from Vivat licensees to inquiries made for the purpose of Vivat's Canadian application. Mr. Richards provided no evidence regarding the policies and procedures that may have been instituted by Vivat's licensees to detect and report any instances of confusion. There is not so much as a suggestion that any of the licensees had contact with the consumers. It was totally proper for the TMOB to conclude as it did with respect to his evidence and, in so doing, it was correct.
[70] Mr. Gerety's evidence sheds no further light on the confusion issue. He joined Vivat in late 2003 and his personal knowledge of its previous affairs, obviously, is limited. His evidence regarding confusion is of the same variety as that of Mr. Richards. While he provides some further evidence in the area of sales, on cross-examination he was unable to respond to questions relative to marketing. He had numbers, but little else. His evidence could not have materially impacted the board's findings.
[71] The next question is whether the TMOB ought to have considered the absence of any evidence of actual confusion in the face of Vivat's evidence of coexistence without confusion. This submission is premised on the comments of the Federal Court of Appeal in Dion Neckware, supra, at para.19:
With respect of lack of evidence by the opponent of actual confusion, the
Registrar expressed the view that an opponent does not need to file that
kind of evidence. This is true in theory, but once an applicant has filed some
evidence which may point to unlikelihood of confusion, an opponent is at
great risk if, relying on the burden of proof the applicant is subject to, it
assumes that it does not need to file any evidence of confusion. While the
relevant issue is "likelihood of confusion" and not "actual confusion", the
lack of "actual confusion" is a factor which the courts have found of
significance when determining the "likelihood of confusion". An adverse
inference may be drawn when concurrent use on the evidence is extensive,
yet no evidence of confusion has been given by the opponent [citations
omitted]. The respondent explained its failure to bring any evidence of
actual confusion by the fact that being a foreign corporation, it was "difficult
if not impossible" for it to quote from Canadian consumers. That explanation
is untenable. (emphasis is mine)
[72] For purposes of this matter, the operative phrases in the cited paragraph are:
"evidence which may point to unlikelihood of confusion" and "when concurrent use on the evidence is extensive". In my view, neither exists here. Even if I were to determine otherwise and find "evidence which may point to unlikelihood of confusion" (and I make no such finding), it is common ground that the Levi mark has had long-term extensive use in Canada. Vivat's evidence on the extent of the use of the Vivat marks in Canada is all but non-existent. At best, it says that 165,000 garments were made available for sale in Canada since the launch of Vivat's products in 1994. Absent some evidence as to how this came to be, along with some information regarding the distribution of the garments, I cannot conclude, any more than the TMOB could, that the concurrent use of the marks in Canada had been extensive. Therefore, in my opinion, an adverse inference ought not to be drawn with respect to Levi not having adduced evidence of actual confusion. For the reasons stated earlier, the result is the same in relation to foreign jurisdictions.
[73] Vivat's final argument urges that the matter be considered through the lens of an average consumer. The test for "confusion" has been discussed earlier in these reasons and need not be repeated. I accept and endorse Levi's submission that the "first impression" of a consumer cannot be stretched so far as to encompass the impression left after a garment has been handled, closely inspected, and tried on for size and appearance. First impression may change, but it is the first impression that counts: Miss Universe, Inc. v. Bohna (1994), 58 C.P.R. (3d) 381 (F.C.A.) at p. 397.
CONCLUSION
[74] This disposes of the various allegations of error. Vivat does not take issue with the findings of the TMOB that: the extent to which the parties' marks have become known favours Levi; the length of time that the parties marks have been in use strongly favours Levi; the nature of the wares clearly favours Levi given that the parties' wares are the same with respect to overalls and jeans and closely related in respect of other items of clothing listed in the applications; the channels of trade would be the same or overlapping, based on the inference, without evidence to the contrary, that where the wares of the parties are virtually identical, the nature of the trade is also likely to be the same and the wares are likely to be exposed side by side in the same retail outlets. Although I have determined that the TMOB erred in a couple of areas, the board's decision should not be parsed microscopically. Rather, it must be read as a whole.
[75] The TMOB properly identified the test to be applied to determine whether there would be a reasonable likelihood of confusion between the marks in issue. At the end of the day, the board concluded that the scales were evenly balanced and it therefore dismissed Vivat's applications. Given the number of factors favouring Levi, I might not have been inclined to conclude that the balance of probabilities was evenly balanced (between reasonable likelihood of confusion and no reasonable likelihood of confusion). However, in the absence of additional evidence that would have materially affected the decision it is not for me to substitute my opinion (for that of the TMOB) of the weight to be assigned to the various facts for they need not be interpreted as having equal weight: Miss Universe, Inc., supra. A proper reading of the decision leaves no doubt that the decision was reasonable and, in most respects, it was correct.
[76] For the foregoing reasons, these appeals will be dismissed. There will be two orders, but one set of reasons, issued with respect to the two files. A certified copy of these reasons will be placed in the file that does not contain the original reasons. Levi will have its costs of the appeals. If the parties are unable to agree on costs, each may forward written submissions, not to exceed three pages, double-spaced, on or before May 31, 2005.
"Carolyn A. Layden-Stevenson"
Judge
Ottawa, Ontario
May 19, 2005
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-2456-03 and T-2457-03
STYLE OF CAUSE: VIVAT HOLDINGS LIMITED
Applicant
and
LEVI STRAUSS & CO.
Respondent
DATE OF HEARING: APRIL 26, 2005
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER
AND ORDER BY: Layden-Stevenson J.
DATED: MAY 19, 2005
APPEARANCES BY:
Arthur Renaud FOR THE APPLICANT
Brian Isaac
Lynn Ing FOR THE RESPONDENT
SOLICITORS OF RECORD:
Sim, Hughes, Ashton, MacKay LLP
Toronto, Ontario FOR THE APPLICANT
Smart & Biggar
Toronto, Ont. FOR THE RESPONDENT
SCHEDULE "A"
to the
Reasons for order dated May 19, 2005
in
VIVAT HOLDINGS LIMITED
- and -
LEVI STRAUSS & CO.
T-2456-03 and T-2457-03
RELEVANT STATUTORY PROVISIONS
| Trade-Mark Act, R.S.C., 1985, c. T-13
6. (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section. (2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class. [...]
(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including (a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;(b) the length of time the trade-marks or trade-names have been in use; (c) the nature of the wares, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
12. (1) Subject to section 13, a trade-mark is registrable if it is not [...] (d) confusing with a registered trade-mark;
16. (3) Any applicant who has filed an application in accordance with section 30 for registration of a proposed trade-mark that is registrable is entitled, subject to sections 38 and 40, to secure its registration in respect of the wares or services specified in the application, unless at the date of filing of the application it was confusing with (a) a trade-mark that had been previously used in Canada or made known in Canada by any other person; (b) a trade-mark in respect of which an application for registration had been previously filed in Canada by any other person; or
56. (1) An appeal lies to the Federal Court from any decision of the Registrar under this Act within two months from the date on which notice of the decision was dispatched by the Registrar or within such further time as the Court may allow, either before or after the expiration of the two months. [...]
(5) On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.
|
|
Loi sur les marques de commerce, L.R.C. 1985, ch. T-13
6. (1) Pour l'application de la présente loi, une marque de commerce ou un nom commercial crée de la confusion avec une autre marque de commerce ou un autre nom commercial si l'emploi de la marque de commerce ou du nom commercial en premier lieu mentionnés cause de la confusion avec la marque de commerce ou le nom commercial en dernier lieu mentionnés, de la manière et dans les circonstances décrites au présent article. (2) L'emploi d'une marque de commerce crée de la confusion avec une autre marque de commerce lorsque l'emploi des deux marques de commerce dans la même région serait susceptible de faire conclure que les marchandises liées à ces marques de commerce sont fabriquées, vendues, données à bail ou louées, ou que les services liés à ces marques sont loués ou exécutés, par la même personne, que ces marchandises ou ces services soient ou non de la même catégorie générale. [...] (5) En décidant si des marques de commerce ou des noms commerciaux créent de la confusion, le tribunal ou le registraire, selon le cas, tient compte de toutes les circonstances de l'espèce, y compris_: a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus; b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage; c) le genre de marchandises, services ou entreprises; d) la nature du commerce; e) le degré de ressemblance entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent.
12. (1) Sous réserve de l'article 13, une marque de commerce est enregistrable sauf dans l'un ou l'autre des cas suivants_: [...] d) elle crée de la confusion avec une marque de commerce déposée;
16. (3) Tout requérant qui a produit une demande selon l'article 30 en vue de l'enregistrement d'une marque de commerce projetée et enregistrable, a droit, sous réserve des articles 38 et 40, d'en obtenir l'enregistrement à l'égard des marchandises ou services spécifiés dans la demande, à moins que, à la date de production de la demande, elle n'ait créé de la confusion_: a) soit avec une marque de commerce antérieurement employée ou révélée au Canada par une autre personne; b) soit avec une marque de commerce à l'égard de laquelle une demande d'enregistrement a été antérieurement produite au Canada par une autre personne;
56. (1) Appel de toute décision rendue par le registraire, sous le régime de la présente loi, peut être interjeté à la Cour fédérale dans les deux mois qui suivent la date où le registraire a expédié l'avis de la décision ou dans tel délai supplémentaire accordé par le tribunal, soit avant, soit après l'expiration des deux mois. [...] (5) Lors de l'appel, il peut être apporté une preuve en plus de celle qui a été fournie devant le registraire, et le tribunal peut exercer toute discrétion dont le registraire est investi. |