Ottawa, Ontario, June 20, 2007
PRESENT : Madam Prothonotary Roza Aronovitch
BETWEEN:
and
REASONS FOR ORDER AND ORDER
[1] In the context of the underlying appeal of a decision of the Registrar of Trade-marks, the respondent brings the novel application to amend its Statement of Opposition to add Section 22 of the Trade-marks Act (the “Act”) as a ground of opposition, and to adduce the affidavit of Michael S. Mulvey in support of the new ground.
[2] The background facts giving rise to the underlying appeal are as follows.
[3] Sun World International, Inc. (“Sun World”) filed an application to register the trade-mark BLACK DIAMOND in association with fresh fruits and vegetables, later narrowed to “plums”. The mark was advertised for opposition purposes in the Trade-marks Journal and opposed by the respondent Parmalat Dairy and Bakery Inc. (“Parmalat”) by Statement of Opposition dated January 9, 2002.
[4] Parmalat was successful in its opposition. Sun World’s application was denied on the basis that the appellant had not established its use of the mark at the relevant date, and had also not demonstrated that that there would be no reasonable likelihood of confusion, within the meaning of subsection 6(2) of the Act, between the mark, as applied for, for plums, and that of the respondent for cheese. The underlying appeal is from that decision of the Registrar.
[5] Section 56 of the Trade-marks Act governs appeals to the Federal Court from decisions of the Registrar of Trade-marks. As discussed more fully below, subsection 56(5) of the Act allows for new evidence to be filed on the appeal, as follows:
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56. (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. |
56. (5) Lors de l’appel, il peut être apporté une preuve en plus de celle qui a éte fournie devant le registraire, et le tribunal peut exercer toute discrétion dont le registraire est investi. |
[6] Sun World has taken the step of filing new evidence in this appeal by way of three affidavits, going to use and confusion.
[7] Parmalat says that it was prompted to bring this application following Supreme Court of Canada’s decision in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, [2006] 1 S.C.R. 824 (“Veuve Clicquot”) that issued some few months following the decision of the Registrar. Parmalat explains that the Supreme Court has expanded upon and clarified the law with respect to the depreciation of goodwill attaching to a registered trade-mark under subsection 22(1) of the Act, with particular relevance to the facts of this case, such that Parmalat now has a stronger footing to advance a new ground of opposition to the registration of the appellant’s mark, and basis on which to defend the decision of the Registrar.
[8] The respondent therefore seeks to amend Parmalat’s Statement of Opposition to add a new ground of opposition based on subsection 22(1) of the Trade-marks Act, in conjunction with section 30(i) of the Act. The new ground of opposition alleges that pursuant to section 38(2)(a) and section 30 of the Act, the application does not conform with the requirements of section 30(i) in that, at the date of filing the application the appellant could not have been satisfied that it was entitled to use the trade-mark, in association with the wares described because such use would be unlawful as depreciating the value of the goodwill attaching to the registered trade-mark, contrary to section 22(1) of the Act.
Sun World Objections to the Motion
[9] The objections to the motion are two fold. Sun World maintains that on an appeal from the decision of a Registrar, the Court lacks jurisdiction to amend the Statement of Opposition, which it says is an originating document in the opposition proceeding. The second point of objection is that section 22 of the Act is not a proper ground of opposition under section 38(2) of the Act.
Nature of a Section 56 Appeal
[10] Section 56 is not a customary appeal provision, in that an appeal brought there under does not necessarily proceed on the basis of the record as it stood before the decision-maker. As I have said, in a section 56 appeal, the record that was before the Registrar can be supplemented, and has been supplemented in this case.
[11] As new evidence can materially affect the Registrar’s findings of fact, the Federal Court judge seized of the appeal is entitled to substitute his or her discretion for that of the Registrar, if the Registrar has erred. The ensuing appeal is in the nature of a hearing de novo.
[12] Justice Binnie, in Mattel U.S.A. Inc. v. 3894207 Canada Inc. [2006] SCC 22, at para. 35, describes the nature of the exercise as follows:
[…..] Where fresh evidence is admitted, if may, depending on its nature, put quite a different light on the record that was before the Board, and thus require the applications judge to proceed more by way of fresh hearing on an extended record than a simple appeal. …
[13] Sun World argues that while parties may adduce new evidence on appeal, they may not introduce new issues, even less, as proposed by Parmalat on this motion, introduce both a new ground, and file new evidence on the new issue.
[14] Indeed, the jurisprudence of this Court is entirely to that effect. Notwithstanding that fresh evidence may be adduced, and that the appeal does not proceed on the basis of the record as it stood before the Registrar, the new evidence can only go to issues raised before the Registrar. Moreover, the issues on appeal are framed by and remain limited to those raised before the Registrar. McDonald’s Corp. v. Coffee Hut Stores Ltd., (1994) 55 C.P.R. (3d) 463 at 469 (F.C.T.D.) (“McDonald’s Corp.”); Carling Breweries Ltd. v. Molson Companies Ltd. et al. (1984), 1 C.P.R. (3d) 191 at 193-194 (F.C.T.D.) (“Carling Breweries”); Pernod Richard v. Molson Breweries, 1992 CarswellNat 1025 (F.C.T.D.) (“Pernod”); Benedictine Distillaire de la Liqueur de l’Ancienne Annaye de Fecamp v. John Labatt Ltee (1990), 28 C.P.R. (3d) 487 (F.C.T.D.) (“Benedictine”); S. C. Johnson & Son Inc. v. Esprit de Corp. (1986), 13 C.P.R. (3d) 235 (F.C.T.D.) (“S. C. Johnson”).
[15] In other words, and with the following exception, the Court can entertain new evidence but not new issues. The exception is that new grounds on a pure question of law may be added, but only in reference to evidence already present before the Registrar. Labatt Brewing Co. v. Benson & Hedges (Canada) Ltd. (1996), 67 C.P.R. (3d) 258 at paras. 7-8 (F.C.T.D.) (“Labatt”).
[16] According to Parmalat, the above-noted jurisprudence does not apply to this case, as the opponents in those cases never took the formal step, on appeal, to amend their Statement of Opposition. Instead, the opponents tried to add the new ground of opposition to either their Notice of Appeal (see Carling Breweries at 194), their Reply to Notice of Appeal (see Pernod at para. 40), or simply by way of raising the new argument orally at a hearing, to the prejudice of the party opposite.
[17] The formal step of bringing a motion to amend the Statement of Opposition is relied on a significant point of distinction from the cases cited. Parmalat asserts the decision of the Federal Court of Appeal in Canadian Council of Professional Engineers v. Lubrication Engineers Inc. (1990), 32 C.P.R. (3d) 327 (F.C.A.) (“CCPE”), as authority for the proposition that new grounds of opposition raised on appeal under subsection 56 of the Act may be allowed if the opponent moves to amend its Statement of Opposition, and the amendment will not give rise to prejudice.
[18] In the CCPE case, the respondent on appeal brought a motion under former Rule 1102 (the precursor of Rule 351 of the Federal Courts Rules) to be permitted it to adduce additional evidence in the appeal. In addition, it sought an order under former Rule 1104 for leave to amend its Statement of Opposition to include a further ground of opposition to the registration of the appellant’s trade-mark. In rejecting the motion to adduce fresh evidence, the Federal Court of Appeal applied a test that Parmalat says is consistent with the test set out under the current Rule 75, namely, that an amendment will be allowed unless it will give rise to prejudice that is not compensable by an order of costs.
Jurisdiction of the Court to Amend a Statement of Opposition
[19] Parmalat submits that its application is nothing more than a motion to amend pursuant to Rule 75, which the Court has jurisdiction to grant, and points out that there will be no prejudice if the Statement of Opposition is amended as both parties will be able to adduce evidence going to the new ground and cross-examine thereon. I note in that regard that Rules 75 and 54 of the Federal Courts Rules are, in fact, the sole enumerated grounds for this motion.
[20] A second ground of jurisdiction is also suggested by Parmalat, one based on its reading of the combination of Rule 40 of the Trade-marks Regulations (1996), (S.O.R./96-195), and section 56(5) of the Act. Rule 40 of the Trade-marks Regulations reads as follows:
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40. No amendment to a statement of opposition or counter statement shall be allowed except with leave of the Registrar and on such terms as the Registrar determines to be appropriate.
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40. La modification d'une déclaration d'opposition ou d'une contre-déclaration n'est admise qu'avec la permission du registraire aux conditions qu'il estime indiquées. |
[21] The argument, as I understand it, is that since the appeal is de novo, the provision of section 56.(5) of the Trade-marks Act that allows for additional evidence to be adduced on the appeal to the Federal Court, and gives the Federal Court jurisdiction to exercise any discretion vested in the Registrar, should be read to apply equally to the jurisdiction of the Registrar pursuant to Rule 40 to amend the Statement of Opposition, thereby authorizing the Federal Court to exercise the discretion vested in the Registrar to amend the Statement of Opposition.
[22] I will deal first with the jurisdiction of the Court to amend the Statement of Opposition under Rule 75(1). The Rule provides that the Court may, at any time, allow a party to amend “a document”, on such terms as will protect the rights of all parties.
[23] According to Parmalat, the Statement of Opposition is such a document. It forms part of the opposition file which, in this case, Sun World, has called up pursuant to subsection 60.(1) of the Trade-marks Act, to be placed on file with the Federal Court and is therefore a “document” within the meaning of Rule 75.
[24] I cannot agree that that is the effect to be given to the transmittal of a document to this Court under subsection 60.(1) which is reproduced below and which provides a mechanism similar to that set out in Rules 317 and 318 of the Federal Courts Rules, for conveying a certified copy of a tribunal record to the Court for the purposes of a judicial review:
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60. (1) Subject to subsection (2), when any appeal or application has been made to the Federal Court under any of the provisions of this Act, the Registrar shall, at the request of any of the parties to the proceedings and on the payment of the prescribed fee, transmit to the Court all documents on file in the Registrar’s office relating to the matters in question in those proceedings, or copies of those documents certified by the Registrar. (emphasis added) |
60. (1) Sous réserve du paragraphe (2), lorsqu’un appel ou une demande a été présenté à la Cour fédérale en vertu de l’une des dispositions de la présente loi, le registraire transmet à ce tribunal, à la requête de toute partie à ces procédures et sur paiement du droit prescrit, tous les documents versés aux archives de son bureau quant aux questions en jeu dans ces procédures ou des copies de ces documents par lui certifies. ( . . . .) |
[25] Both sets of provisions are cast in similar terms, and speak of “transmitting” what is essentially the record before the decision-maker whose decision is being appealed or reviewed. The documents, including the Statement of Opposition, transmitted pursuant to subsection 60.(1) of the Act, in my view, are not “documents” within the meaning of Rule 75. They are on file in the Registrar’s office and form part of the record of the opposition proceeding.
[26] It is clear from a fair reading of Rules 71 – 79 that a “document” within the meaning of Rule 75 is a pleading, an originating document, or a document required to be filed pursuant to the Federal Courts Rules, in a Federal Court proceeding. It does not include the Statement of Opposition, which is an originating document that is required to be filed and, indeed, can only be filed in the Canadian Trade-Mark Office for the purposes of an opposition proceeding. Accordingly, the Federal Court, in my view, has no jurisdiction under Rule 75 to amend the Statement of Opposition, a document that is not filed in this Court, and forms part of the record on which the decision under appeal is based.
[27] On point is the decision of the Federal Court of Appeal in Halford v. Seed Hawk Inc. [2005] F.C.J. No. 26. In that case, on an interlocutory motion brought in the course of an appeal to this Court, Justice Sharlow dismissed a motion to amend a pleading following judgment, and held at paragraph 10 of her decision:
[…] 10 In my view, Rule 75 does not give this Court the jurisdiction to grant a motion, before the hearing of an appeal of a judgment of the Federal Court, for leave to amend the pleadings upon which the trial was heard [...]
[28] Indeed, no jurisprudence has been cited to me where a Statement of Opposition has been amended on an appeal to this Court. The CCPE case does not assist as the motion in that case was dismissed without the Court dealing with the amendment to the Statement of Opposition, or considering the jurisdiction of the Court to do so on appeal.
[29] Parmalat has also not cited any precedent for the proposition that a new issue not raised before the Registrar, and not arising out of the evidence before the Registrar, may be added on the appeal to this Court. The reason being that the addition of new evidence and the de novo nature of the ensuing hearing, does not mean, as Parmalat suggests, that the appeal is a whole new ballgame. It remains an appeal. McDonald’s Corp., supra, at para.469.
[30] The de novo exercise of discretion under section 56(5) is not given for all purposes. It is based on, and follows from the ability of the parties to adduce new evidence. Justice MacNair in Borden, supra, makes the point as follows, at page 50:
[…] In my view, the provision for adducing additional evidence on an appeal would be meaningless unless the court could make a judicial determination of the issues before the registrar with due regard to the circumstances of the case and in light of this additional evidence. Clearly, the court is entitled to substitute its conclusion for that of the registrar, if satisfied that the latter “has gone wrong”. To a limited extent, the appeal takes on something of the appearance of a hearing de novo, but with this qualification. While the court is not limited in its right to hear new evidence, it is my opinion that such new evidence must be in relation only to facts material to the same issues that were before the registrar.
…
[31] In light of the jurisprudence and the clear language of Rule 40 of the Trade-marks Regulations and section 56(5) of the Act, there is no basis whatever to find that the authority of the Court to substitute its discretion for that of the Registrar pursuant to section 56.(5) may be extended to encompass the discretion given exclusively to the Registrar to amend the Statement of Opposition. The amendment to the Statement of Opposition, in my view, had to be presented to and ruled upon by the Registrar.
[32] As these findings are dispositive of the motion, I need not go on to consider whether section 22(i) is a proper ground of opposition pursuant to section 38(2) of the Act. An order will go accordingly.
“R. Aronovitch”
Prothonotary
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-894-06
STYLE OF CAUSE: SUN WORLD INTERNATIONAL INC. v.
PARMALAT FOOD INC.
DATE OF HEARING: APRIL 12, 2007
REASONS FOR ORDER: ARONOVITCH P.
APPEARANCES:
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KENNETH D. McKAY
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DAVID MORROW TIMOTHY O. STEVENSON
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SOLICITORS OF RECORD:
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SIM, LOWMAN, ASHTON & McKAY LLP TORONTO, ONTARIO
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SMART & BIGGAR OTTAWA, ONTARIO |