| Citation: |
Scotch Whisky Assn. v. Glenora Distillers International Ltd., 2009 FCA 16, [2010] 1 F.C.R. 195 |
A-194-08 |
Glenora Distillers International Ltd. (Appellant)
v.
The Scotch Whisky Association (Respondent)
Indexed as: Scotch Whisky Assn. v. Glenora Distillers International Ltd. (F.C.A.)
Federal Court of Appeal, Nadon, Sexton and Evans JJ.A.—Ottawa, December 16, 2008 and January 22, 2009.
Trade-marks — Registration — Appeal from Federal Court decision allowing appeal from Trade-marks Opposition Board decision — Federal Court holding appellant not entitled to register GLEN BRETON trade-mark — Respondent claiming “glen” resulting in association with whiskies distilled in Scotland — Federal Court erring by failing to consider whether “glen” mark within meaning of Trade-marks Act, s. 10 — Mark not necessarily trade-mark — Trade-marks generally not dissected, analyzed syllable by syllable — Improper herein to segment GLEN BRETON — Trade-mark registrable if prohibited mark not dominating — “Glen” not prohibited mark within meaning of Act, s. 10 — Appeal allowed.
This was an appeal from a decision of the Federal Court allowing the respondent’s appeal from a decision of the Trade-marks Opposition Board. The appellant, a distiller in Nova Scotia, applied to register the trade-mark GLEN BRETON for its whisky. The respondent claimed that the appelant’s use of “glen” resulted in an association with whiskies distilled in Scotland. The Board found that “glen” had not become recognized through “ordinary and bona fide commercial use” as designating the geographic origin of whisky, and was not a prohibited mark pursuant to section 10 of the Trade-marks Act. The Federal Court was of the opinion that there was an extensive reputation associated with “glen”-prefixed Scotch whisky brands. It also found that there was confusion in the marketplace, and that some consumers were not aware that the appelant’s product was not a Scotch distilled in Scotland. Contrary to the Board, the Federal Court concluded that the word “glen” had become recognized in Canada as designating Scotch whisky, and was therefore a prohibited mark.
Held, the appeal should be allowed.
The Federal Court made an error of law by failing to consider whether the word “glen” is a mark within the meaning of section 10 of the Act. While “glen” has never been used as a trade-mark in Canada, it has been used as a prefix for trade-marks associated with Scotch whisky, and for other products and services. A mark is not necessarily a trade-mark, and trade-marks should generally not be dissected and analyzed syllable by syllable. It would therefore be improper to segment GLEN BRETON. By considering “glen” as a mark on its own, it would be afforded stronger trade protection than is due. If a prohibited word is combined with a distinctive element such that the prohibited word does not dominate, the trade-mark will still be registrable. “Glen” was not shown to constitute a mark within the meaning of section 10 of the Act, and cannot be prohibited. Alternatively, even if “glen” were a prohibited mark, it would not dominate GLEN BRETON.
STATUTES AND REGULATIONS CITED
Food and Drug Regulations, C.R.C., c. 870, ss. B.02.016, B.02.020 (as am. by SOR/93-145, s. 10; 2000-51, s. 1).
Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2 “trade-mark”, 10, 11.12 (as enacted by S.C. 1994, c. 47, s. 192), 12(1) (as am. by S.C. 1990, c. 20, s. 81; 1993, c. 15, s. 59(F); 1994, c. 47, s. 193; 2007, c. 25, s. 14).
CASES CITED
applied:
Thomas J. Lipton, Ltd. v. Salada Foods Ltd., [1980] 1 F.C. 740, (1979), 45 C.P.R. (2d) 157 (T.D.); Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413, 130 N.R. 223 (F.C.A.).
considered:
Bank of Montreal v. Merrill Lynch & Co. Inc. (1997), 84 C.P.R. (3d) 262 (T.M.O.B.).
referred to:
Christian Dior, S.A. v. Dion Neckwear Ltd., 2002 FCA 29, [2002] 3 F.C. 405, 216 D.L.R. (4th) 451, 20 C.P.R. (4th) 336; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, 211 D.L.R. (4th) 577, [2002] 7 W.W.R. 1; John Labatt Ltd. v. Molson Companies Ltd. (1983), 2 C.P.R. (3d) 150 (T.M.O.B.); Benson & Hedges (Canada) Ltd. v. Empresa Cubana Del Tabaco (1975), 23 C.P.R. (2d) 274 (T.M.O.B.).
AUTHORS CITED
Fox, Harold G. The Canadian Law of Trade Marks and Unfair Competition, 3rd ed. Toronto: Carswell, 1972.
Gill, Kelly and R. Scott Jolliffe. Fox on Canadian Law of Trade-marks and Unfair Competition, 4th ed. loose-leaf. Toronto: Carswell, 2002.
APPEAL from a decision of the Federal Court (2008 FC 425, 292 D.L.R. (4th) 567, 65 C.P.R. (4th) 441, 327 F.T.R. 32) allowing the respondent’s appeal from a decision of the Trade-marks Opposition Board ([2007] T.M.O.B. No. 4 (QL)). Appeal allowed.
APPEARANCES
David A. Copp for appelant.
Rose-Marie Perry, Q.C. and Todd J. Burke for respondent.
SOLICITORS OF RECORD
David Copp, Halifax, for appelant.
Gowling Lafleur Henderson LLP, Ottawa, for respondent.
The following are the reasons for judgment rendered in English by
[1] Sexton J.A.: This is an appeal from a decision of Justice Harrington [2008 FC 425], allowing the Scotch Whisky Association’s (the Association) appeal from a decision of the Trade-marks Opposition Board [Scotch Whisky Assn. v. Glenora Distillers International Ltd., [2007] T.M.O.B. No. 4 (QL)]. He held that the appellant, Glenora Distillers International Ltd. (Glenora), was not entitled to register the trade-mark GLEN BRETON, for use in association with a single malt whisky, as it was a mark prohibited by section 10 of the Trade-marks Act [R.S.C., 1985, c. T-13]. For the reasons that follow, I am of the opinion that the decision of Justice Harrington should be set aside, and Glenora should be entitled to register its proposed trade-mark.
RELEVANT LEGISLATIVE PROVISIONS
[2] Subsection 12(1) [as am. by S.C. 1990, c. 20, s. 81; 1993, c. 15, s. 59(F); 1994, c. 47, s. 193; 2007, c. 25, s. 14] of the Trade-marks Act, R.S.C., 1985, c. T-13, sets out the circumstances in which a trade-mark is not registrable:
12. (1) Subject to section 13, a trade-mark is registrable if it is not
(a) a word that is primarily merely the name or the surname of an individual who is living or has died within the preceding thirty years;
(b) whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin;
(c) the name in any language of any of the wares or services in connection with which it is used or proposed to be used;
(d) confusing with a registered trade-mark;
(e) a mark of which the adoption is prohibited by section 9 or 10;
(f) a denomination the adoption of which is prohibited by section 10.1;
(g) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication;
(h) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication; and
(i) subject to subsection 3(3) and paragraph 3(4)(a) of the Olympic and Paralympic Marks Act, a mark the adoption of which is prohibited by subsection 3(1) of that Act.
[3] Paragraph 12(1)(e) states, in part, that a trade-mark is not registrable if it is a prohibited mark within the meaning of section 10 of the Act, which reads:
10. Where any mark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin or date of production of any wares or services, no person shall adopt it as a trade-mark in association with such wares or services or others of the same general class or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling that mark as to be likely to be mistaken therefor.
FACTS
[4] Glenora is a distiller located in Cape Breton, Nova Scotia. In 1990, it began distilling a single malt whisky, claiming to use the traditional Scottish method. It claims that its product has the taste, character, and aroma of a Scotch whisky. However, Glenora is not permitted to call its whisky “Scotch”. “Scotch whisky” is a protected geographical designation pursuant to section 11.12 [as enacted by S.C. 1994, c. 47, s. 192] of the Trade-marks Act, and may only be used in association with whiskies produced in Scotland.
[5] Section B.02.016 of the Food and Drug Regulations, C.R.C., c. 870, also states that in order to be labelled “Scotch” or “Scotch whisky”, a product must have been distilled in Scotland, in accordance with the laws of the United Kingdom. Ironically, Glenora is also not entitled to call its product “Canadian whisky”, as it does not have the taste, character, and aroma associated with Canadian whisky, as required by section B.02.020 [as am. by SOR/93-145, s. 10; 2000-51, s. 1] of the same Regulations.
[6] Thus, Glenora’s product is called simply “single malt whisky”. Nevertheless, its marketing has capitalized greatly on the similarities between its whisky and Scotch whiskies, and Glenora states that it considers its product to be in direct competition with single malts distilled in Scotland. I believe it is fair to say that Glenora has marketed its product as being like a single malt Scotch in everything but name.
[7] Glenora applied to register GLEN BRETON as a trade-mark for use in association with its whisky in 2000. That application was opposed by the Association. The Association takes exception to Glenora using a mark prefixed with the word “glen” for its whisky. It claims that the use of “glen”-prefixed marks in association with several well-known single malt Scotches, including Glenlivet, Glenmorangie and Glenfiddich, has resulted in an association between the word “glen” and whiskies distilled in Scotland. The grounds of opposition relevant to this appeal are premised on this alleged association.
[8] The Trade-marks Opposition Board rejected the Association’s objection. Although there was evidence of “glen”-prefixed marks used by Scotch whisky distillers, the Board found that this use was not widespread enough to have instructed Canadian consumers to associate the word “glen” with Scotch whiskies. Accordingly, it found that “glen” had not become recognized through “ordinary and bona fide commercial use” as designating the geographic origin of whisky, and was not a prohibited mark pursuant to section 10 of the Trade-marks Act.
DECISION BELOW
[9] The Association applied to the Federal Court for judicial review of the Board’s decision, filing significant new evidence on the issue of confusion in the marketplace. Justice Harrington found that the new evidence was sufficiently material that it would have affected the Board’s decision, and that he was therefore entitled to review that decision on a standard of correctness (Christian Dior, S.A. v. Dion Neckwear Ltd., 2002 FCA 29, [2002] 3 F.C. 405, at paragraph 8).
[10] Unlike the Board, Justice Harrington was of the opinion that there was a more extensive reputation associated with “glen”-prefixed Scotch whisky brands. He stated (2008 FC 425, at paragraphs 18–19):
The record shows that in 2000 some 896,607 cases of Scotch whisky were imported into Canada. This works out to some ten million six hundred twenty five thousand three hundred and seventy-six (10,625,376) 75cl bottles. The malt whisky portion thereof came to 132,000 cases, i.e. some 1,584,000 bottles, representing approximately 15% of Scotch whisky sales.
The “Glen” single malts came to 933,000 bottles or close to 59% of the single malts.
[11] He also considered that a “glen”-prefixed mark had not been used in Canada in recent memory in association with a whisky that was not a Scotch whisky.
[12] Perhaps more importantly, Justice Harrington found that there was actual confusion in the marketplace, and that some consumers were not aware that Glenora’s product was not a Scotch distilled in Scotland. In reaching this conclusion, he had particular regard to evidence that Glenora’s whisky had been listed on several bar and restaurant lists under the heading “Scotch”, albeit occasionally with some sort of note attempting to clarify that it was Canadian. There was also evidence before him that similar mistakes had been made by a few independent critics and reviewers.
[13] Justice Harrington did not accept the argument that any confusion was due to the fact that Glen Breton has many of the characteristics of a Scotch (flavour, aroma, and so forth), and found on a balance of probabilities that the confusion was due to the use of a “glen”-prefixed mark. He concluded that the word “glen” had, by ordinary and bona fide commercial use, become recognized in Canada as designating Scotch whisky, and was thus a prohibited mark pursuant to section 10 of the Act. He therefore allowed the application, and directed the Registrar of Trade-marks to refuse Glenora’s application to register GLEN BRETON.
[14] Glenora now appeals to this Court.
STANDARD OF REVIEW
[15] The first role of this Court in reviewing the Federal Court’s decision is to ensure that Justice Harrington selected and applied the appropriate standard of review to the decision of the Trade-marks Opposition Board. I agree that Justice Harrington was entitled to review the Board’s decision on a standard of correctness, given the quantity of new evidence before him, and his conclusion that the new evidence would have affected the Board’s decision.
[16] As Justice Harrington was entitled to apply the standard of correctness, this Court may only interfere with his decision if he made a palpable and overriding error in resolving a question of fact, or made an error of law in his analysis (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235).
ANALYSIS
[17] I am of the view that Justice Harrington made an error of law by failing to consider whether the word “glen”, having only previously been used as part of various registered trade-marks, is in fact a “mark” within the meaning of section 10 of the Trade-marks Act. Counsel advised this Court at the oral hearing that this argument was put before the Federal Court, but it is not addressed in the reasons.
[18] In its memorandum of fact and law, the Association suggests that Justice Harrington held, at paragraph 16 of his reasons, that “glen”, as a mark, has become recognized as designating Scotch whisky in Canada. However, he did not address specifically the argument that “glen”, being only a segment of the mark GLEN BRETON, and only a segment of any registered trade-mark (e.g. GLENFIDDICH) was not in itself a mark. He stated only that [at paragraph 16]:
I am, therefore, satisfied that Glen Breton is not registrable under section 12(1)(e) of the Act because its adoption is prohibited by section 10 as no person shall adopt a mark as a trade-mark if it has by “ordinary and bona fide commercial usage become recognized in Canada as designating the — place of origin — of any wares — of the same general class”.
[19] There was no express finding that “glen” was a mark, and no evidence has been shown to us that would justify such a finding.
[20] The word “glen”, standing alone, has never been used as a trade-mark in Canada, for any product. However, it has been used as a prefix for many trade-marks associated with Scotch whisky, most famously GLENFIDDICH, GLENMORANGIE and GLENLIVET. Trade-marks incorporating the word “glen” have also been registered for many products and services completely outside the liquor and beverage trade (for example, Glencoe for plows and Glen Abbey for real estate development services).
[21] “Mark”, as it appears in section 10, is not defined by the Act. A “trade-mark” is defined in section 2, in part, as “a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, lease, hired or performed by him from those manufactured, sold, leased, hired or performed by others”. The respondent argues that the term “mark” is clearly broader than the term “trade-mark”, and suggests that the word “glen”, which forms part of many registered trade-marks, can be considered on its own as a “mark” for the purposes of section 10.
[22] I agree with the first part of this argument, that a mark is not necessarily a trade-mark. Fox on Trade-marks [Fox on Canadian Law of Trade-marks and Unfair Competition] makes clear that a mark that is used for purely decorative or warehouse purposes will not be considered a trademark unless it has actually come to distinguish the trader of the goods (4th ed. loose-leaf. Toronto: Carswell, 2002, at pages 3-14 to 3-16). For instance, a sticker affixed to a ware to indicate to warehouse employees the date of manufacture would most likely not fall within the definition of a “trade-mark”. Likewise, a certification mark (a mark used to indicate that goods meet a defined standard, such as being “organic”), which may be used by many different traders, is a “mark” but not a “trade-mark”, as it is not unique to any particular trader.
[23] However, this Court has not been referred to any authority for the proposition that a segment of a trade-mark can stand alone as a mark. In my view, this would run counter to numerous authorities, albeit outside the context of section 10, stating that trade-marks should generally not be dissected and analysed syllable by syllable.
[24] Two such authorities are Thomas J. Lipton, Ltd. v. Salada Foods Ltd., [1980] 1 F.C. 740 (T.D.) and Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 (F.C.A.). In Lipton, the applicant sought to register LIPTON CUP.A.TEA to be used in association with tea, disclaiming the word “tea”, but not “cup”. The opponent argued that the CUP.A.TEA was not registrable as it was clearly descriptive of Lipton’s product (as contemplated in paragraph 12(1)(b) of the Act), and therefore additionally could not be distinctive. Justice Addy cited Dr. Fox for the proposition that “It is clear that, when assessing a trade mark to determine whether it is distinctive, the mark must be looked at as a whole. It is not proper to dissect it” (at page 746).
[25] In the Park Avenue case, the applicant sought to register POSTURE-BEAUTY for beds, mattresses, and other furniture. The opponent claimed that the mark would be confusing with several of its already registered marks (including BEAUTYREST and BEAUTYSLEEP), and was therefore not registrable pursuant to paragraph 12(1)(d) of the Act. Writing for this Court, Justice Desjardins held that the marks were to be considered in their entireties to discern the likelihood of confusion. She found that by improperly segmenting the mark, the Trial Judge had given the opponent very strong trade protection for the word “beauty”, which Justice Desjardins described as “a common English word” and a “weak mark” (at pages 426–427). She cited the following passage from Fox on Trade-marks [The Canadian Law of Trade Marks and Unfair Competition, 3rd ed. Toronto: Carswell, 1972] (at page 426):
In applying these tests the first principle to be invoked is that the marks are to be looked at as totalities and not as dissected items. The idea of each mark, that is, the net impression left by the mark as a whole upon the mind is to be considered. It is the mark taken in its entirety that is to be examined and a decision then arrived at whether such mark is likely to cause confusion with one already registered … The true test is whether the totality of the mark proposed to be registered is such that it is likely to cause mistake or deception or confusion in the minds of persons accustomed to the existing trade mark. It is the combination of the marks as a whole that is to be regarded and the effect or idea of the whole that is to be compared.
[26] While neither of these cases deal directly with section 10 of the Act, in my view, the same essential logic applies, and it would be improper for this Court to segment the previously registered marks, or the appellant’s mark GLEN BRETON, as the respondent suggests. First, these authorities disclose a broader pattern of the courts refusing to dissect trade-marks as part of a registrability analysis, which is itself persuasive. Further, the reasoning of Park Avenue is compelling. The word “glen”, being a common word and forming part of numerous registered trade-marks, is at best a weakly distinctive component of those trade-marks. However, by segmenting those trade-marks to consider “glen” as a mark on its own, this Court would be affording stronger trade protection to that word than is due.
[27] The Trade-marks Opposition Board has also held that the totality of a trade-mark must be considered in the section 10 analysis. Even where a particular word is prohibited, if the word is used in combination with a distinctive element such that the prohibited word does not dominate, the trade-mark will still be registrable. Citing Lipton for the non-dissection principle, the Board allowed the registration of MOLSON EXPORT, notwithstanding the argument that export was prohibited (John Labatt Ltd. v. Molson Companies Ltd. (1983), 2 C.P.R. (3d) 150 (T.M.O.B.)). On my reading, the Board in this case applied the same approach, when it stated that “[e]ven if GLEN had been established as a mark prohibited by Section 10, the applicant’s mark GLEN BRETON does not so nearly resemble the word GLEN as to be likely to be mistaken for it” (at paragraph 28).
[28] I therefore conclude that the word “glen” has not been shown to constitute a mark within the meaning of section 10 of the Trade-marks Act, and therefore cannot be prohibited. Alternatively, even if “glen” could be considered a mark and is prohibited, I find that it does not dominate GLEN BRETON as contemplated in Molson, when that trade-mark is considered as a whole.
[29] I also briefly note that this is a somewhat unusual case under section 10 of the Act. Fox on Trade-marks [Fox on Canadian Law of Trade-marks and Unfair Competition] describes the purpose of this section as follows (at page 5-66.5):
This section is obviously designed…to prohibit the adoption of such marks as the hall mark for silver and such other well-known marks indicative of quality or origin.
[30] All of the section 10 cases to which we were referred concerned the prohibition of particular words or phrases (as opposed to designs or other symbols). In all of these authorities, the words in question have been inherently descriptive of the character or quality of the products being sold. For instance, in Bank of Montreal v. Merrill Lynch & Co. Inc. (1997), 84 C.P.R. (3d) 262, the Trade-marks Opposition Board held that CASH MANAGEMENT ACCOUNT was prohibited in association with financial services, as it was commonly understood as “designating a type of financial service through which one can consolidate and manage cash investments and credit through one account” (at page 275).
[31] Similarly, the Board held that HABANOS was a prohibited mark for tobacco products, as it resembled the marks HABANA and HAVANA commonly used by traders and understood, among other uses, as designating Cuban tobacco by reference to Cuba’s capital (Benson & Hedges (Canada) Ltd. v. Empresa Cubana Del Tabaco (1975), 23 C.P.R. (2d) 274 (T.M.O.B.)). In cases like these, section 10 prevents a single trader from having a monopoly over a mark that is common to the trade and well understood as designating a particular quality of wares or services.
[32] Naturally, it would be possible for a mark that is not inherently descriptive of any quality of a product, through ordinary and bona fide commercial usage, to become a designator mark. This is an unusual section 10 case, however, in that the respondent is essentially seeking to establish a monopoly over a word, which is not inherently descriptive, for a group of traders (namely, its members), when it is not clear that any of the Association’s members incorporated the word into their trade-marks for the purpose of designating their whiskies as being from Scotland.
[33] Counsel for the Association insisted at the hearing that even if a “glen”-prefixed mark was prohibited by section 10, its members would be entitled to continue using their own “glen”-prefixed marks, since they distil Scotch whiskies. This is completely contrary to the plain wording of the provision, which states that “no person” shall adopt a prohibited mark as a trade-mark.
[34] In short, success in this appeal would jeopardize the trade-marks of many of the Association’s members. In my view, this cannot be the correct result, and is not true to the spirit and purpose of section 10 of the Act. Accordingly, I would allow the appeal, and direct the Registrar to allow Glenora’s application for the registration of GLEN BRETON.
[35] Finally, Justice Harrington also made a distinct finding that GLEN BRETON was not clearly descriptive or deceptively misdescriptive of the appellant’s wares, within the meaning of paragraph 12(1)(b) of the Act. While the respondent argued this point again in its written submissions before this Court, it did not point to any particular error in the reasons, and it did not pursue the issue in oral argument. I do not see any error in Justice Harrington’s conclusion on paragraph 12(1)(b) meriting this Court’s intervention.
CONCLUSION
[36] For the foregoing reasons, I would allow this appeal with costs, here and below, and issue an order directing the Registrar to allow Glenora’s application to register GLEN BRETON.
Nadon J.A.: I agree.
Evans J.A.: I agree.