Date: 20000128
Docket: T-2658-97
BETWEEN:
CANADIAN MEMORIAL SERVICES
Plaintiff
- and -
PERSONAL ALTERNATIVE FUNERAL SERVICES
LIMITED, LAWRENCE GEORGE LITTLE, JAKE H. WIEBE,
and RONALD YOUNG
Defendants
REASONS FOR ORDER AND ORDER
PELLETIER J.:
[1] This is a summary judgment application brought by the Defendants Personal Alternatives Funeral Services Limited, Lawrence George Little, Jake H. Wiebe and Ronald Young[1] in the action commenced against them by the Plaintiff Canadian Memorial Services. In that action, the Plaintiff alleges that the Defendant's registered trade-mark PERSONAL ALTERNATIVE infringes upon the Plaintiff's various registered SIMPLE ALTERNATIVE trademarks and its SIMPLE ALTERNATIVE & DESIGN trademark. The Plaintiff seeks expungement of the Defendant's trademark, damages for infringement and passing off, injunction, accounting for profits, surrender of infringing materials and ancillary relief.
[2] The summary judgment application is brought on the basis that the Defendant's trade-mark does not infringe the Plaintiff's trade-marks and that, even if it did, the Plaintiff has acquiesced in the Defendant's use of its mark and is therefore estopped from asserting its claims against the Defendants. The Plaintiffs deny any acquiescence, and deny, in any event that this is an appropriate case for summary judgment.
[3] Before addressing the facts, it is useful to recall the position of the Court on an application for summary judgment. The considerations which apply to such an application were set out by Evans J. (as he then was) in F. Von Langsdorff Licensing Limited v S.F. Concrete Technology, Inc [1999] F.C.J. No. 526:
In order to succeed in its motion for summary judgment dismissing the plaintiff's statement of claim, the defendant has the burden of establishing that all the relevant issues can be properly decided on the evidence before the Court, and that there are no issues that can only fairly be resolved after a trial.
Rule 216(3) specifically empowers the Court to grant a motion for summary judgment whether the issues in dispute are legal or factual in nature. However, a motion for summary judgment is not appropriate for deciding questions of fact that turn on credibility, or that require the kind of weighing and assessing of conflicting evidence that is properly the province of the trial judge. The applicable principles are usefully set out in Granville Shipping Co. v. Pegasus Lines Ltd. S.A. (1996) 111 F.T.R. 189, 192-193 (F.C.T.D.).
Moreover, the responding party may not simply rely on "allegations or denials of the pleadings" of the moving party, "but must set out specific facts showing that there is a genuine issue for trial": Rule 215. Otherwise, the respondent would be able the defeat the policy underlying the provisions in the Rules respecting summary judgment, namely the reduction of costs and delays in the disposition of litigation by eliminating trials that are not necessary for the fair resolution of the issues in dispute.
Accordingly, the respondent has an evidential burden to discharge in showing that there is a genuine issue for trial: Feoso Oil Ltd. v. Sarla (The), [1995] 3 F.C. 68, 81-82 (F.C.A.). However, this does not detract from the principle that the moving party has the legal onus of establishing the facts necessary to obtain summary judgment: Ruhl Estate v. Mannesmann Kienzle GmbH (1997), 80 C.P.R. (3d) 190, 200 (F.C.T.D.); Kirkbi AG. v. Ritvik Holdings Inc. (F.C.T.D.; T-2799-96; June 23, 1998). Thus, both parties are required to "put their best foot forward" so that the motions judge can determine whether there is an issue that should go to trial: Pizza Pizza Ltd. v. Gillespie (1990), 33 C.P.R. (3d) 519, 529-530 (Ont. Ct. Gen. Div.).
It seems to me that the dominant trend in the jurisprudence of this Court has been to interpret liberally the rules governing summary judgment, so that a motions judge must subject the evidence to a "hard look" in order to determine whether there are factual issues that really do require the kind of assessment and weighing of evidence that should properly be done by the trier of fact. In addition to cases cited above, see also Collie Woollen Mills Ltd. v. The Queen 96 D.T.C. 6146 (F.C.T.D.)
[4] I note that with respect to the issue of confusion which underlies the allegations of infringement that such issues are decided on affidavit evidence before the opposition board. There is nothing in that portion of the matter which would necessarily require a trial. The adequacy of the evidence as it relates to the issue of estoppel and acquiescence will be assessed in relation to the demands of the defence.
[5] To put the facts in context, it is necessary to briefly review certain developments in the funeral services industry in which both parties are involved. The transportation, preparation and disposition of human remains is a regulated business. In Ontario, where the Plaintiff carries on business, all activities relating to the disposition of human remains were reserved to licensed funeral homes and licensed funeral directors. In the late 1980's individuals such as Dan Atkinson (about whom more will be said later) began to challenge the monopoly of licensed funeral homes by offering certain limited services to consumers. Mr. Atkinson founded Direct Cremation & Burial Services Inc. which picked up the body at the place of death and transported it to a place of cremation or burial.[2] Mr. Atkinson was prosecuted for violating the Ontario legislation but succeeded in his defence. As a result, the Ontario legislation was amended to specifically provide for a service known as a transfer service which was limited to picking up the body at the place of death, making one stop to put the body in a container, and thereafter taking the body to a cemetery or crematorium. Such a service could not offer for sale more than one type of casket, could not provide embalming services and could not take the body to places other than a cemetery or a crematorium such as a church or other location for at which visitation or memorial services might be held.[3] Mr. Atkinson's business was acquired by the Plaintiff in 1989 and was renamed The Simple Alternative. From that time until 1994 The Simple Alternative operated only as a transfer service. In 1994, it was licensed as a funeral home and began offering the full range of funeral services including embalming .[4]
[6] Others in the funeral services industry were also competing with established funeral homes by competing on price. The did so by reducing their overhead and passing on the savings to consumers. Overhead was reduced by locating in premises that were not in high visibility, high traffic (and hence high rent) areas but rather in more modest and inexpensive surroundings such as light industrial areas. The absence of traditional premises was made possible by the fact of making arrangements in the family's home and using community facilities such as churches for services . Caskets were selected from catalogues or colour photographs eliminating the need for casket showrooms. The operator did not own limousines but assisted the family in renting them from a limousine operator as required.[5]
[7] In British Columbia, Lawrence Little and Ronald Young, set out to compete against traditional funeral homes and incorporated the Defendant in the spring of 1992. Because of the different regulatory regime in British Columbia, the Defendant was able to offer the full range of funeral services, and was not limited to a transfer service. The Defendant competed on price using the same techniques described above. It was conspicuously successful. In May 1993, the Defendants were visited by Mr. Don Atkinson, who had become the Manager of the Simple Alternative following its acquisition by the Plaintiff, and Mr. Eric Tappenden, Vice President Public Services of Commemorative Services of Ontario. Mr. Little's affidavit evidence as to what happened at the meeting is as follows:
26. The names of the two representatives were Dan Atkinson, Manger of The Simple Alternative, and Eric Tappenden, Vice President Public Services of Commemorative Services of Ontario. Neither Ron nor I had heard of The Simple Alternative or the two individuals before. It was explained to us that Commemorative Services of Ontario operated cemeteries in the Toronto area and had recently created an operating division called The Simple Alternative which would offer limited funeral services of an alternative nature in the Toronto area. Mr. Atkinson and Mr. Tappenden explained to us at the time that The Simple Alternative was the first foray into funeral services for Commemorative Services of Ontario. I am not sure of the precise corporate relationships between the Plaintiff and these other operations, although my understanding is that Commemorative Services of Ontario changed its name to the Mount Pleasant Group in 1998. This latter entity is said to own both the Mount Pleasant Group of Cemeteries, which operates cemeteries in and around Toronto, and the Plaintiff, Canadian Memorial Services, which operates in Toronto as The Simple Alternative.
27. Ron Young and I showed both Mr. Atkinson and Mr. Tappenden around the facilities of Personal Alternative. Both individuals expressed great interest in the alternative funeral services being offered by Personal Alternative. Mr. Tappenden then said he had to leave to catch a flight to Toronto but Mr. Atkinson asked me if he could return the next day for a further visit. I agreed to this and he returned the next day.
28. When Mr. Atkinson returned to Personal Alternative the next day, I again showed him the company's operations and talked with him about alternative funeral providers. He again expressed his admiration for our company and its operations. Mr. Atkinson was particularly impressed with our operation because, unlike The Simple Alternative, we were licenced as a "full service" funeral provider - providing everything form simple cremation with no service, to a complete traditional funeral service and burial. Mr. Atkinson advised me that The Simple Alternative was only licenced as type of "transfer service", and could only provide very limited services to the consumer. Mr. Atkinson said he could hardly wait for the day when The Simple Alternative could provide the same services in Ontario.
29. Mr. Atkinson also told me during our conversations that prior to joining The Simple Alternative, which had just recently occurred, he had personally set-up his own alternative funeral provider. Attached as an Exhibit to the Affidavit of Kevin Sartorio is a copy of a newspaper article about Mr. Atkinson and his pervious alternative funeral business which, not surprisingly, uses alternative in a descriptive manner.
30. Towards the end of Mr. Atkinson's visit on the second day, Mr. Atkinson asked me if "he could ask me a personal question", and I said "sure". Mr. Atkinson, looking very intense, said, "Do you have any idea of what you have here?" - meaning, was I aware of what a great concept we had developed. I replied, "I sure think so!" I gave Mr. Atkinson, to take with him, copies of various information pamphlets and brochures with respect to the operations of Personal Alternative. Copies of the brochures I would have given Mr. Atkinson are attached as Exhibit "T". Mr. Atkinson expressed his thanks for the time that Ron Young and I had spent with them and for the information package I had provided upon his departure.
31. On May 31, 1993, Personal Alternative received a thank you letter from Mr. Tappenden, a copy of which is attached as Exhibit "U". The letter is addressed to "Mr. Ronald B. Young, Personal Alternative Funeral Services" and, in particular, stated the following:
I was very impressed with your insightful vision for low cost alternative service which combines both traditional and simple arrangements. We certainly were encouraged by our time with you, and I hope our material and experience were of some interest or benefit to you.
Dan and I wish you every success with your new venture. I look forward to hearing of your surpassing your targets next year as well.
32. A few days later Personal Alternative also received a letter from Mr. Atkinson on The Simple Alternative letterhead addressed to both Ron Young I at "Personal Alternative Funeral Services". The letter read as follows, a copy of which is attached as Exhibit "V":
Thank you for sharing so generously of your time and material with me when Eric and I were in Vancouver. I have put together a small package of some of our advertising and promotional material which I hope is helpful, or at least interesting.
I admire your concept and the professional way in which you approach your business. Eric and I wish you every success and look forward to keeping in touch. Please let us know if you're planning a visit to Toronto and we can arrange for dinner or lunch together.
The advertising and promotional material forwarded with that letter is attached as Exhibit "W". Forwarding such promotional material to other funeral service providers for reference and assistance is not uncommon in the industry, though I would say it is becoming less common now, as the industry is more competitive.
33. At no time during our meetings with Mr. Atkinson and Mr. Tappenden, or after, did either individual, or someone else from the organization, ever complain about our use of the name and mark PERSONAL ALTERNATIVE. Very much to the contrary, as can be seen from the letters from Mr. Tappenden and Mr. Atkinson, The Simple Alternative encouraged Personal Alternative to succeed and expand its business - The Simple Alternative even sent us sample advertising and promotional material to help us if we saw the desire!
[8] Following the meeting, on May 31, 1993 Mr. Tappenden wrote The Defendant a thank you letter which reads as follows:
Dear Ron:
This is just a note to thank you for meeting with Dan Atkinson and me last week. I felt very rude having to leave so soon after arriving at your office but my plane left at 5:45 p.m. and, as you said, the tunnel traffic was very busy.
I was very impressed with your insightful vision for a low-cost alternative service which combines both traditional and simple arrangements. We certainly were encouraged by our time with you, and I hope our material and experience were of some interest or benefit to you.
Dan and I wish you every success with your new venture. I look forward to hearing of your surpassing your targets next year as well. If you ever have an opportunity to visit Toronto, I hope you will consider looking us up. We would be pleased to break bread with you at one of our fine food establishments, and compare notes again.
Again, many thanks and best regards.
[9] This was followed a few days later by a letter from Mr. Atkinson, the text of which is reproduced below:
Dear Lawrence and Ron:
Thank you again for sharing so generously of your time and material with me when Eric and I were in Vancouver. I have put together a small package of some our advertising and promotional material which I hope is helpful, or at least interesting.
I admire your concept and the professional way in which you approach your business. Eric and I wish you every success and look forward to keeping in touch. Please let us know if you're planning to visit Toronto and we can arrange for dinner or lunch together.
[10] Mr. Little's version of what took place at the meeting was challenged by Ms Eileen Fitzpatrick, the President of the Plaintiff in her Affidavit.
52. I have reviewed Mr. Little's claim that Personal Alternative relied on the two letters received from Mr. Atkinson and Mr. Tappenden and their belief that Simple Alternative did not complain about their use of the Personal Alternative name and related marketing practices. I spoke with Mr. Dan Atkinson about this matter and I believe his information on this point.
53. The meeting between Mr. Little, Mr. Lawrence and Mr. Tappenden and Mr. Atkinson was not as friendly as suggested by the letters sent by Mr. Tappenden and Mr. Atkinson to Personal Alternative. Mr. Little of Personal Alternative indicated to Mr. Atkinson that the Personal Alternative name and materials were developed after they became aware of Simple Alternative. In discussions between Mr. Little and Mr. Atkinson in May 1993 and after that, Mr. Little admitted that he and Mr. Young had known about the Simple Alternative and its business before first meeting with Mr. Atkinson and Mr. Tappenden in May 1993. Indeed, Mr. Little admitted to Mr. Atkinson that they had heard about the Simple Alternative business on a televison program aired before the incorporation of their company business in June 1992. Mr. Little also admitted that they had developed their promotional materials from promotional materials of the Simple Alternative. Mr. Atkinson mentioned that he had stated his concerns to Mr. Little about the similarities between the Personal Alternative name and business and that of Simple Alternative. Mr. Atkinson recalled that Personal Alternative had copied Simple Alternative marketing materials, including the concept, wording of marketing materials and brochures. Personal Alternative had even copied the colour of Simple Alternative's stationery. In effect Personal Alternative was carrying on its business as if it was the Simple Alternative on the West Coast of Canada. I attach as Exhibit 14 to my affidavit copies of the materials provided by Personal Alternative to Mr. Tappenden and Mr. Atkinson at the May 1993 meeting along with copies of other materials gathered from other funeral service providers.
54. The meeting between the representatives did not deal with any arrangements or agreements between Personal Alternative and Simple Alternative. The meeting was arranged to find out about the Personal Alternative operation. Mr. Atkinson and Mr. Tappenden did not make any agreements with Personal Alternative about any long term relationships or exchange of referrals or customers. In 1993, the two companies operated in different geographical markets. At that time, Personal Alternative had one facility in BC that was set up to serve a limited market area. They did not disclose any plans to register a Personal Alternative mark or to compete with Simple Alternative. Mr. Tappenden and Mr. Atkinson were led to believe that Personal Alternative would limit their business to the BC market. Personal Alternative did not disclose that they planned to expand into Eastern Canada, or for that matter, directly into the Ontario funeral services market.
55. Based on my discussions with Mr. Atkinson, I understand that Personal Alternative was very defensive of their position and refused to cooperate with Simple Alternative. At one point, Mr. Little stated to Mr. Atkinson, that Personal Alternative was there (in B.C.) and Simple Alternative was here (in Ontario) and there wasn't much that Simple Alternative could do about it. Our company felt that it could not afford to challenge Personal Alternative at that time. Simple Alternative was facing a very hostile environment in Ontario, and had dedicated a significant portion of its resources to challenge the regulations passed by the Ontario government. Similarly, Mr. Atkinson felt that in 1993 Simple Alternative did not have the resources to dispute Personal Alternative's use of that name or other similar marks and slogans. Later in April 1995, Mr. Atkinson met Mr. Little at a CANA (Cremation Association of North America) conference in Orlando, Florida. At that time, Mr. Little stated that Personal Alternative had aligned its business and marketing approach with that of Basic Funeral Alternatives Inc. in Toronto. Mr. Little referred to Mr. Bob MacKinnon of Basic Funeral Alternatives Inc.
[11] This appears to raise a factual issue based on credibility which would require a trial, making the disposition of this matter by summary judgement proceedings inappropriate.
[12] In my view, there is no conflict in the evidence because the evidence relied upon to set up the conflict is hearsay. One cannot create a credibility issue by tendering inadmissible evidence.
[13] When the Defendants examined Mr. Atkinson under oath in response to these allegations, they found that his evidence did not support the hearsay evidence contained in Ms Fitzgerald's affidavit. The quoted portions, in the excerpts below are passages from the Affidavit of Ms Fitzgerald which are being read to Mr. Atkinson:
69. Did Mr. Little ever acknowledge to you that he knew of the Simple Alternative before this meeting?
A. No.
153. "Mr. Little of Personal Alternative indicated to Mr. Atkinson that the Personal Alternative name and materials were developed after they became aware of Simple Alternative".
A. I never said that, no.
154. And is it otherwise true?
A. Well, Mr. Little never said that, not to me anyway.
155. And did you say that to Ms. Atkinson - M. Fitzpatrick?
A. No, no, I didn't.
156. "In discussions between Mr. Little and Mr. Atkinson in May 1993 and after that, Mr. Little admitted that he and Mr. Young had known about the Simple Alternative and its business before meeting with Mr. Atkinson and Mr. Tappenden in May 1993". Is that true?
A. No, that's not true.
157. Did you tell Ms. Fitzpatrick that?
A. No, I did not.
158. "Mr. Little admitted to Mr. Atkinson that they had heard about The Simple Alternative on a television program aired before the incorporation of their company business in June 1992." Is that true?
A. I never said that, no.
159. So you never said that to Ms. Fitzpatrick.
A. No I did not.
160. And is the statement otherwise true. Did Mr. Little admit that to you?
A. No, he didn't.
...
163. "Mr. Atkinson mentioned that he had stated his concerns to Mr. Little about the similarities between the Personal Alternative name and business and that of Simple Alternative". Did you state any such concern to Mr. Little?
A. No, not in that context, no.
164. And did you say that to Ms. Fitzpatrick?
A. Not in that way, no, I did not.
[14] This evidence was not challenged in cross-examination by counsel for the Plaintiff. In my view, this does not raise a conflict in the evidence or an issue of credibility which would preclude my disposing of this matter on an application for summary judgement.
[15] There was further contact between the representatives of the parties on different occasions following this meeting. In 1995 the Defendant referred two families who required funeral services in the Toronto area to the Plaintiff. In one case, the family used the services of the Plaintiff, in the other it did not. Also in 1995, a franchisee of the Defendant became aware of a funeral services provider in interior British Columbia calling itself SIMPLE ALTERNATIVE. This was communicated to the Plaintiff and information was given to it to assist in having the operator change his name.
[16] In the meantime, the Defendant's success had brought it to the attention of others and in the fall of 1993 it began selling franchises. By 1995 it had sold 3 franchises in British Columbia and had set up franchiser corporations in Canada and the United States. As of December 1997, there were 6 franchises, one of which is located in the United States. Mr. Little estimates that in excess of $500,000 has been spent in developing the franchise business since 1994.[6]
[17] In August of 1996, The Defendant applied for registration of PERSONAL ALTERNATIVE as a trade-mark claiming use in Canada with respect to funeral service since July 1992. The application was unopposed and the trade-mark was registered on July 21, 1997. The registration no. is TMA478,4771. In the meantime, the Plaintiff had been registering its trade-marks. A summary of the registrations is as follows:
SIMPLE ALTERNATIVE Reg No. TMA 406,517
Date of Application 07 Oct. 1991
Date of Registration 18 Dec 1992
Registrant Canadian Memorial Services
Wares: (1) Funeral Supplies, namely, caskets, containers for human remains, urns for cremated human remains, flowers and stationery, namely, envelopes, thank you notes, memorial cards, letterhead, advertising brochures and advertisements in newspapers, magazines and other printed media.
Services (1) Transfer of human remains from the place of death to the requested destinations, the filing of all necessary documents required to assist in the disposition of human remains, advising and assisting in the organization of commemorative or memorial services and the placing of death notices, rental of containers for human remains
Used in Canada since at least May 1989 on wares and on services
A SIMPLE ALTERNATIVE Reg No TMA 407,231
Date of Application 07 Oct. 1991
Date of Registration 22 Jan. 1993
Registrant Canadian Memorial Services
Wares: (1) Funeral Supplies, namely, caskets, containers for human remains, urns for cremated human remains, flowers and stationery, namely, envelopes, thank you notes, memorial cards, letterhead, advertising brochures and advertisements in newspapers, magazines and other printed media.
Services (1) Transfer of human remains from the place of death to the requested destinations, the filing of all necessary documents required to assist in the disposition of human remains, advising and assisting in the organization of commemorative or memorial services and the placing of death notices, rental of containers for human remains
Used in Canada since at least May 1989 on wares and on services
THE SIMPLE ALTERNATIVE Reg No TMA 406,970
Date of Application 07 Oct. 1991
Date of Registration 15 Jan. 1993
Registrant Canadian Memorial Services
Wares: (1) Funeral Supplies, namely, caskets, containers for human remains, urns for cremated human remains, flowers and stationery, namely, envelopes, thank you notes, memorial cards, letterhead, advertising brochures and advertisements in newspapers, magazines and other printed media.
Services (1) Transfer of human remains from the place of death to the requested destinations, the filing of all necessary documents required to assist in the disposition of human remains, advising and assisting in the organization of commemorative or memorial services and the placing of death notices, rental of containers for human remains
Used in Canada since at least May 1989 on wares and on services
THE SIMPLE ALTERNATIVE MARK & DESIGN Reg No TMA 465,777
Date of Application 17 Oct. 1995
Date of Registration 06 Nov. 1996
Registrant Canadian Memorial Services
Wares (1) Funeral supplies, namely caskets, containers for human remains, urns for cremated human remains and burial vaults. (2) Funeral supplies, namely flowers (3) Funeral stationery supplies, namely, register books, envelopes, thank you cards, and memorial cards.
Services (1)Transfer of human remains from the place of death to the requested destinations, the filing of all necessary documents required to assist in the disposition of human remains, assisting in the organization, coordination and direction of funeral or memorial services and the placing of death notices, rental of vehicles for use in funeral processions. (2) Receptions and catering services in relation to a funeral service, embalming and other preparations of human remains, viewing and visitation services.
Used in Canada since at least as early as 1989 on wares (1) and on services (1); July 1993 on wares (2); July 1994 on wares (3) and on services (2).
[18] This was the state of affairs when the Defendant received a letter from the Plaintiff's lawyers in the fall of 1997 claiming that their use of PERSONAL ALTERNATIVE was an infringement of the Plaintiff's trade-marks and insisting that the use of the infringing trade-mark cease.
[19] The Plaintiff seeks a declaration that the defendants have infringed its trade-marks through the use of their trade-mark containing PERSONAL ALTERNATIVE, interlocutory and permanent injunctions restraining the Defendants from infringing its trade-marks through its use of PERSONAL ALTERNATIVE, an order for delivery up of all infringing materials, an accounting for profits from infringement and expungement of the Defendant's trade-mark from the Register.
[20] If it is shown that the PERSONAL ALTERNATIVE mark is confusing with any of the SIMPLE ALTERNATIVE marks, then the PERSONAL ALTERNATIVE mark was not registrable pursuant to s. 12 (1) d) of the Trade-Marks Act (the Act), the Defendant was not the person entitled to register the mark pursuant to s. 16(a) of the Act, and the Plaintiff is entitled to apply to the Federal Court pursuant to s. 57 to expunge the PERSONAL ALTERNATIVE mark in an action commenced for that purpose. The fundamental issue is whether the PERSONAL ALTERNATIVE mark is confusing with one or more of the SIMPLE ALTERNATIVE marks.
[21] The Defendant's mark is registered with respect to services only while the Plaintiff's claims for its marks include wares and services. While the description of the services for which a claim is made is more exhaustive in the case of the Plaintiff's marks, it is clear that both parties are engaged in the funeral services business and that since 1994 both provide more or less the same general class of services.
[22] The test for confusion is set out at s.6(2) and 6(5) of the Act. Section 6(2) provides that a trade-mark is confusing with another trade mark if their use in the same area would likely lead to the inference that the goods or services associated with the marks were provided by the same person. In deciding whether confusion exists, regard is to be had for the factors set out in s. 6 (5). Would the use of SIMPLE ALTERNATIVE and PERSONAL ALTERNATIVE in the same area likely lead to the conclusion that the funeral services in question were provided by the same person?
[23] One begins by noting that because this is an infringement action, the onus is on the Plaintiff to establish confusion.
[24] The first factor to be considered is the inherent distinctiveness of the marks and the extent to which the marks have become known. Neither of the marks has a high degree of inherent distinctiveness being composed of the word alternative and an adjective which modifies alternative. There is evidence of other use of the word alternative by others in connection with funeral services:
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
Kellogg Salada Canada Inc. v. Maximum Nutrition Ltd. (1992) 43 C.P.R. (3d) 349 (F.C.A.) citing Harrod's Application (1953) 52 R.P.C. 65
[25] There is some evidence of the state of the register in the Affidavit of Craig Ashe which is Exhibit 47 to the Affidavit of Kevin Sartorio dated March 5, 1999. Mr. Ashe deposes that he caused a trade mark search to be done which disclosed the registration of the Defendant's PERSONAL ALTERNATIVE mark and applications for registration of the following marks:
- Family Alternative Funeral Services
- Basic Funeral Alternatives
- Family Directed Alternatives
[26] Little if anything can be concluded from this evidence since the applications in question may not succeed. In fact, the Affidavit of Eileen Fitzpatrick (Ex. 11) shows that the application for registration of Basic Funeral Alternatives was withdrawn
[27] The Defendants filed the Affidavit of Kevin Sartorio which disclosed the results of various searches and inquiries undertaken to determine the extent of the use of the word "alternative" in connection with funeral wares and services. According to the materials gathered in the Sartorio Affidavit there is a category in the "Yellow Pages" of Ontario telephone directories entitled Funeral Alternatives which, in the June '98-'99 Toronto Central East edition includes entries for entities known as "A Basic Funeral Alternative" "Aftercare Funeral Alternatives Inc." "Basic Funeral Alternatives Inc." [7] In the Funeral Homes section of the '98-'99 Mississauga Yellow Pages (Ex. 3) one finds, in addition to the Funeral Alternatives section, Funeral Homes whose advertisements in the Funeral Homes section offer "Low Cost Alternatives to a traditional funeral home" "Affordable Cost Alternatives" "Full traditional Services and Cremation Services - Basic and Simple Service Alternatives".
[28] The Funeral Alternatives Section appears in Toronto area Yellow Pages from '97-'98 to '98-99. Prior to that, within the Funeral Homes section of the Yellow Pages for the Toronto area, there are references to alternative services and funeral alternatives from '92-93 forward. In 1990 and 1991, the only such reference is in THE SIMPLE ALTERNATIVE's own ad.
[29] Outside the Toronto area, one finds the Funeral Alternatives heading in Yellow Pages for Windsor, Peterborough, Thunder Bay. This may be explained in part by the fact that The Funeral Services Board for the Province of Ontario requires non-traditional funeral services to list themselves under the heading Funeral Alternatives in the Yellow Pages.[8]
[30] Outside of Ontario, the situation is similar. The 1998 Richmond-Delta Yellow Pages do not contain a Funeral Alternatives section but they do contain an advertisement by the Family Funeral Home Association entitled "How Can I find the Best Values in Funeral Care and Control the Expenses?" It contains a small graphic comparison of "Funeral Service Provider Categories" which lists as categories Family Funeral Homes, Alternative Providers, Corporate-Owned Discount Facilities and Corporate Owned Funeral Homes. (Ex. 14) Occasional listings in 1998 Yellow Pages for other districts in British Columbia directories contain the word alternative or alternative services. (Ex. 15, 16). Listings for Edmonton (1998) (Ex. 17) and Winnipeg (1998) (Ex. 18) contain references to "call us for the alternative" and "Fontaine's Affordable Funeral Home Alternative"
[31] The affidavit also contains computer searches and other telephone searches all showing a usage of the word alternative in connection with funeral services. Articles appearing in magazines directed to Funeral Directors contain references to "alternative providers of death care services"(Ex. 53) There are also references to "low cost alternatives" (Ex. 57) and "low cost alternatives to conventional funeral homes" (Ex. 58)
[32] The Affidavit of Craig Ashe shows the result of a corporate name search and discloses 138 registered business names or corporate names containing the phrase alternative or alternatif, of which 22 relate, on their face, to funeral services. Because these are not registered trade-marks, they may not come within the principle in Kellogg, but they are, at the very least some evidence of surrounding circumstances.
[33] In her Affidavit, Ms. Fitzpatrick sets out the steps taken by the Plaintiff to prevent persons from using the term alternative with respect to funeral services. By virtue of its efforts in that regard, some businesses have ceased using the term, others have not. This enforcement program would and does protect the Plaintiff's interest in its SIMPLE ALTERNATIVE marks. However, it is not does not prove that any use of alternative is confusing with its marks so as to give the Plaintiff a monopoly position with respect to the term ALTERNATIVE. The determination of confusion must be made on a case by case basis.
[34] It is my view that the word alternative is descriptive of funeral services. I conclude from the fact that there is a section in the Yellow Pages designated Funeral Alternatives that this term is meaningful to consumers. Both parties have put evidence of Yellow Pages listings before me (though not necessarily for the same purpose). I believe that I am entitled to draw the inference that it is implicit in the tendering of such evidence that the significance of the Yellow Pages is that it is a listing of businesses by category so that consumers can quickly locate businesses of the same kind. If this designation was arrived at by the publishers of the Yellow Pages, then it suggests that persons who have nothing to do with the funeral industry are aware of the distinction. If, as suggested by Ms. Fitzpatrick in her cross-examination, it was dictated by the Ontario Funeral Board, then it is evidence that the industry recognizes the use. In either case, it is evidence that alternative has a descriptive use in relation to funeral services.
[35] One need not engage in an equivalent analysis to conclude that the word Simple is also descriptive of funeral services. As is the word personal.
[36] In Man and his home Ltd v. Mansoor Electronics Ltd [1999] F.C.J. No. 230 (1999) 163 F.T.R. 270 (F.C.T.D.), Denault J. found that the mark HOME SENTINNEL & DESIGN was not likely to cause confusion with the Plaintiff's marks PROTÉGÉ PAR ALARME SENTINELLE & DESIGN, SENTINEL ALARM, and ALARME SENTINELLE. Denault J. found that the term SENTINEL was not distinctive and was suggestive of the goods and thus was entitled to little protection. In coming to his conclusion he relied upon Molson Companies Ltd v. John Labatt Ltd (1994) 58 C.P.R. (3d) 527 (F.C.A.)[9] as authority for the proposition that where a trader choses to use suggestive words which lack distinctiveness, he must accept a certain amount of confusion without sanction.
[37] I conclude that both marks are weak marks, lacking in inherent distinctiveness, and that consumers are likely to distinguish between them on the basis of small differences such as the modifiers used in connection with the word alternative.
[38] The second leg of subsection a) of s. 6(5) is the extent to which the marks have become known. The Defendants, through the Affidavit of Lawrence Little indicate that by the end of 1998, they had served 898 families and that they projected to serve 1103 families in 1999. The affidavit also indicates that there are 6 franchises operating under the name, one of which is located in the United States. According to Mr. Little's Affidavit, the corporate Defendant has become British Columbia's second largest volume funeral provider, without considering the franchisee's contribution to volume. All of this use is said to be in connection with the Defendant's trademark.
[39] The Plaintiff has produced evidence of its advertising expenditures in the Affidavit of Eileen Fitzpatrick. At paragraph 10 of her Affidavit, Ms. Fitzpatrick provides details of advertising and promotional expenditures by the Plaintiff for the years 1989 to 1997. The expenditures are said to be in relation to "one or more of The Simple Alternative trademarks and related Alternative marks, names and slogans". Given that no detailed sales or advertising figures were produced by the Defendants, and therefore no direct comparison can be made, no useful purpose is served by disclosing the exact sales and advertising figures since the Plaintiff treats these as confidential information. Suffice it to say that the sales figures are well into the 7 digit range and the advertising figures while less substantial are within the same order of magnitude.
[40] The evidence is as well that the bulk of the Plaintiff's market is in the Greater Toronto area and the bulk of the Defendant's market is in the lower mainland of British Columbia. It is my view that the marks of each party are well known within their own markets. I do not believe that this factor favours either party.
[41] The next factor to be considered is the length of time in use. The Plaintiff's trade mark registrations claim first use in connection with wares and services as of May 1989. The wares and services were somewhat limited given the legislative regime under which the Plaintiffs were operating. The registration for THE SIMPLE ALTERNATIVE MARK AND DESIGN claims first use in respect of embalming viewing and visitation services in July 1994. The Defendant claims first use for its PERSONAL ALTERNATIVE mark from July 1992. While the Plaintiff has used its marks longer, it has not done so in connection with the full range of funeral services, which is business in which the parties are now competing. This factor does not clearly favour either party.
[42] The nature of the wares, services, or business is the next factor to be considered. Whatever differences there may have been initially, the services provided by the parties are if not identical, then very similar at the present time. The Defendants do not claim in respect of wares while the Plaintiff does. Given that both parties are engaged in competing with traditional funeral homes on price, it is a matter of inference that the class of services would be similar. While the bulk of each party's business is carried out at considerable distance from the other, the Defendant has plans for expansion into the Plaintiff's market area.
[43] The nature of the trade is the same for both parties. They are both engaged in the funeral services industry, and both target the same market, which is the price conscious purchaser of funeral services. Both conduct business in much the same way, and both are part of a recognizable market segment. The channels of trade are the same, and the geographical separation which the parties maintained in the past may not be maintained in the future.
[44] There is a fair degree of resemblance between the marks in appearance and sound in that both use as the operative element the word ALTERNATIVE together with a modifier. The modifiers taken by themselves suggest somewhat different ideas. The ideas suggested by the marks as a whole are related but different. SIMPLE ALTERNATIVE suggests a non-traditional service distinguished by its simplicity where PERSONAL ALTERNATIVE also suggests a non-traditional service but distinguished by being personalized, which may be as simple or elaborate as the consumer could wish.
[45] While the Defendant has not registered a design and the Plaintiff has, the appearance of the two marks in their advertising material is distinguishable. Both enclose the words in a rectangle. In the case of the Plaintiff, it is a simple, nearly square box enclosing the words The Simple Alternative, one over the other with the emphasis (denoted by size of font) on Simple. In the case of the Defendant, the rectangle is three to four times as wide as it is high and the font used for the word PERSONAL is two to three times larger than that used for the word ALTERNATIVE. The word ALTERNATIVE appears in white on black compared to the use of black on white for the word PERSONAL. The words Funeral Services appear in a smaller font below ALTERNATIVE and are not enclosed by the box. While this use of the mark by the Defendant does distinguish it from the Plaintiff's mark and design, I do not accord significant weight to this difference since the Defendant could change it at any time.
[46] One comes thus to the ultimate question which is, would a consumer as a matter of first impression and with a vague recollection of the Plaintiff's marks likely believe that services offered under the Defendant's mark were services provided by the Plaintiff?
[47] Most of the factors to be considered under s. 6(5) of the Act are relatively evenly balanced. In the end, it is my view that the factor to which most weight should be given is the descriptive character of the words used in the marks. The marks of both parties are weak marks. It is therefore likely that consumers will distinguish between the marks on the basis of small differences, including the differences between the initial portions of the marks, the words SIMPLE and PERSONAL. I therefore find that there is no likelihood of confusion between the use of the Defendant's PERSONAL ALTERNATIVE mark and any of the Plaintiff's marks. Consequently, I find that the Defendant's mark does not infringe any of the Plaintiff's marks.
[48] For that reason, I find that the Plaintiff's claims against the Defendants for infringement and expungement fail, as do the claims for ancillary relief such as injunction, damages and accounting. As for the claim for passing off, given the different geographical areas in which the parties have traded to date, the evidence that the Defendants had no knowledge of the Plaintiffs when they chose their name[10], I find that there is no evidence which would support such a claim. The hearsay evidence in the Affidavit of Eileen Fitzpatrick as to copying of the Plaintiff's materials is not admissible and is rejected. I have reviewed and considered the evidence with respect to the similarities between the materials used by the parties and find that it is not conclusive of anything. In any event, the Plaintiff invited the Defendant to make use of their materials. They could hardly complain if they had but I find that they did not. I would therefore dismiss all of the Plaintiff's claims against the Defendants.
[49] However, in the event that I am wrong about confusion, I now turn to a consideration of the defence of estoppel or acquiescence.
[50] The authorities dealing with estoppel in trademark cases make it clear that mere delay will not support an estoppel. Rouleau J. put the position thus in Prince Edward Island Mutual Insurance Co v. The Insurance Company of Prince Edward [1999] 159 F.T.R. 112.
The issue of estoppel can also be dealt with summarily. The defendant maintains that the plaintiff is estopped from asserting its claim by virtue of its conduct; namely, that although it was aware of the defendant's activities, the plaintiff was silent and delayed in taking any action to protect its asserted rights. It is submitted that this silence and delay constitutes acquiescence on the plaintiff's part and it would therefore be unjust to allow its claim to stand.
I am not prepared to dismiss the plaintiff's claim on this basis. It is true, that in a suitable case, the Court may refuse to provide equitable relief to a claimant who has delayed in asserting its claim. This will only be done however, where the delay has been for an inordinate length of time. In Invacare Corp. v. Everest and Jennings Canadian Ltd. (1987), 14 C.P.R. (3d) 156 (F.C.T.D.), this Court made the following comments with respect to the defence of laches and acquiescence at pp. 165-6:
Mere silence, is not, in my view, a defence to an action for infringement of rights.
[51] The law relating to acquiescence and the related concept of laches was briefly canvassed in Institut National des Appellations d'Origine des vins et eaux de vie et al. v. Andres Wines Ltd et al. (1987) 16 C.P.R. (3d) 385 aff'd (1990) 30 C.P.R. (3d) 385 (Ont. C.A.). In that case the champagne producers of France were seeking to prevent Canadian vintners from marketing their products under the name Champagne which the French producers claimed as a proprietary name. The evidence was that the French producers knew of the Canadian vintners use of the term Champagne but did nothing to assert their rights for a period approaching 60 years. The question became whether the French producers had, through acquiescence, lost the right to assert their remedies.
[52] The trial judge, Dupont J., reviewed the authorities and concluded that the test for acquiescence was as follows:
... the true test whether equitable relief should be withheld in the case of a continuing legal wrong on the ground of delay by the plaintiff in enforcing his rights is that the facts must be such that the owner of the legal right has done something beyond mere delay to encourage the wrongdoer to believe that he does not intend to rely on his strict rights, and the wrongdoer must have acted to his prejudice in that belief ...
[53] This test was applied in White Consolidated Industries Inc. v. Beam of Canada Inc. (1991) 39 C.P.R. (3d) 94 (F.C.T.D.) in the course of which Teitelbaum J. referred to another formulation of the appropriate test taken from Archbold v. Scully (1861), 9 H.L.C. 360 :
If a party, who could object, lies by and knowingly permits another to incur an expense in doing an act under the belief that it would not be objected to, and so a kind of permission may be said to be given to another to alter his condition, he may be said to acquiesce.
[54] Finally the Federal Court of Appeal has itself adopted a formulation of the test for acquiescence which focuses upon the equities between the parties:
"estoppel by acquiescence requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment rather than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour."
Taylor Fashions Ltd. v. Liverpool Victoria Trustees[1981] 1 All E.R. 897 at p. 915 cited in Carling O'Keefe Breweries of Canada Ltd. v. Anheuser-Busch Inc. (1982), 68 C.P.R. (2d) 1; (1986), 10 C.P.R. (3d) 434
[55] As in all cases where there is said to be a failure to enforce a right, there must be a clear knowledge of the right. In this case, the SIMPLE ALTERNATIVE trade-mark had been registered since December 1992 which suggests that the Plaintiff knew of the rights associated with a registered trade-mark, having registered several. Mr. Tappenden was, at the time of his visit to the Defendants' premises, the manager of trade mark enforcement for the Plaintiff.[11] His knowledge was the knowledge of the company. The Plaintiff therefore knew of the "infringement" and must be taken to have known of its rights. The failure to assert those rights cannot be treated as an oversight.
[56] The length of delay is not, on the face of it, extraordinary. The facts came to the attention of the Plaintiff in 1993 and their demand upon the Defendants was made in 1997, a delay of some four years. This is not an inordinate length of time in most commercial situations. On the other hand, given that the overriding consideration is the equities between the parties, the significance of the period of delay must be measured against the significance of the events which occurred in the period in question. In this particular case, the delay resulted in the Defendants making significant outlays, in the range of $500,000, with respect to the franchising operations and possibly incurring liabilities to their franchisees in the event of a change in names and marks[12]. By 1997, the Defendants had become the second largest volume funeral provider in British Columbia.[13] While there is no evidence before me as to the amount of goodwill attaching to the name and marks associated with that volume of business, it is not unreasonable to assume that there is in fact goodwill which has attached to the PERSONAL ALTERNATIVE name and trademark. The fact that this has happened in the interval between 1992 and 1997 suggests that 4 years is in fact a significant delay and the prejudice to which the Defendants have become exposed is also significant.
[57] However, this case does not turn on simple delay in the face of knowledge of alleged infringement. This case turns on the communication by words and conduct of a willingness do nothing in the face of what is subsequently alleged to be an infringement. Specifically, the Plaintiff's representatives met with the Defendant's representatives, discussed their operation, had full knowledge of the corporate name and marks and did not in any way intimate that they took the position that the Defendants were infringing their trade-marks. They then communicated with the Defendants in writing, forwarding copies of their promotional material which they encouraged them to use. This is not a case of mere knowledge. This is a case of encouragement.
[58] I find that the Plaintiff had knowledge of the alleged infringement, but instead of asserting the rights which they now claim, encouraged the Defendants in their use of the mark which is now alleged to infringe the Plaintiff's marks. The Defendants, in the knowledge that the Plaintiffs were aware of their name and mark and took no objection, made significant investments in that name and mark. I find that it would be inequitable to allow the Plaintiff to now assert its rights to the detriment of the Defendants. The defence of acquiescence is established.
[59] Accordingly, there will be an order dismissing all of the Plaintiff's claims against the individual and corporate defendants.
ORDER
[60] For the reasons set out above, the Plaintiff's claims against the Defendants Personal Alternative Funeral Services Limited, Lawrence George Little, Jake H. Wiebe and Ronald Young as set out in paragraphs 22 a) to k) inclusive of the Statement of Claim are dismissed.
[61] The Defendants are awarded their costs to be assessed.
"J. D. Denis Pelletier"
J.F.C.C.
TORONTO, ONTARIO
January 28, 2000
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-2658-97
STYLE OF CAUSE: CANADIAN MEMORIAL SERVICES
- and -
PERSONAL ALTERNATIVE FUNERAL SERVICES LIMITED, LAWRENCE GEORGE LITTLE, JAKE H. WIEBE,
and RONALD YOUNG
DATE OF HEARING: WEDNESDAY, JULY 28, 2000
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER
AND ORDER BY: PELLETIER J.
DATED: FRIDAY, JANUARY 28, 2000
APPEARANCES: Mr. Victor V. Butsky
Ms. Diane M. LaCalamita
For the Plaintiff
Mr. A. Kelly Gill
Mr. Dan McKay
For the Defendants
SOLICITORS OF RECORD: DEETH WILLIAMS WALL
Barristers & Solicitors
Suite 400-150 York Street
Toronto, Ontario
M5H 3S5
For the Plaintiff
GOWLING STRATHY & HENDERSON
Barristers & Solicitors
Suite 4900
Commerce Court West
Toronto, Ontario
M5L 1J3
For the Defendants
FEDERAL COURT OF CANADA
Date: 20000128
Docket: T-2658-97
Between:
CANADIAN MEMORIAL SERVICES
Plaintiff
- and -
PERSONAL ALTERNATIVE FUNERAL SERVICES LIMITED, LAWRENCE GEORGE LITTLE, JAKE H. WIEBE,
and RONALD YOUNG
Defendants
REASONS FOR ORDER
AND ORDER
[1] In the balance of these reasons, the use of the term Defendant without any other qualification refers to the corporate Defendant whereas the use of the term Defendants (plural form) without any qualification refers to the Defendants collectively unless, in either case, the context requires otherwise.
[9] In that case, the Federal Court of Appeal agreed that there was no likelihood of confusion between the marks WINCHESTER GOLD and MOLSON GOLDEN. It found that the words GOLD and GOLDEN were adjectives which were descriptive of the goods sold. The Court repeated the observation the House of Lords in Office Cleaning Services, Ltd v. Westminster Window and General Cleaners Ltd. LXIII Reports of Patent Design and Trade Mark Cases 39 that "a greater degree of discrimination can be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be provided."