Judgments

[2000] 3 F.C. 145

A-428-98

John Labatt Limited and Labatt Brewing Company Limited (Appellants)

v.

Molson Breweries, A Partnership (Respondent)

Indexed as: Molson Breweries v. John Labatt Ltd. (C.A.)

Court of Appeal, Isaac, Létourneau and Rothstein JJ.A.—Ottawa, October 28, 1999 and February 3, 2000.

Administrative law — Statutory appeals — Appeal from F.C.T.D. judgment allowing appeal from Registrar’s refusal to register trade-mark “Export” in association with brewed alcoholic beverages based largely on additional evidence filed (sales, advertising figures, application by Labatt’s subsidiary to register “Export” as trade-mark) on appeal — Trade-marks Act, s. 56 providing for appeal to Federal Court from any decision of Registrar — S. 56(5) permitting evidence in addition to that adduced before Registrar to be adduced on such appeal, permitting Federal Court to exercise any discretion vested in Minister — S. 56 appeal partly involves review of Registrar’s findings — In absence of additional evidence before F.C.T.D., Registrar’s decisions, whether of fact, law or discretion, within area of expertise, to be reviewed on standard of reasonableness simpliciter — When additional evidence adduced in F.C.T.D. that would materially affect findings of fact or exercise of discretion, Judge must come to own conclusion as to correctness of Registrar’s decision — Applying reasonableness simpliciter standard of review to Registrar’s decision, and having regard to fact additional evidence adduced in F.C.T.D. not materially affecting findings of fact, exercise of discretion, Registrar’s decision should stand.

Trade marks — Registration — Appeal from F.C.T.D. judgment allowing appeal from Registrar’s refusal to register trade-mark “Export” in association with brewed alcoholic beverages based largely on additional evidence (sales, advertising figures, application by Labatt’s subsidiary to register —Export— as trade-mark) filed on appeal — Basis of opposition “Export” descriptive of quality of beer, not distinctive of product in association with which used — Registrar holding even if “Export” acquiring distinctiveness in Ontario, Quebec no evidence of distinctiveness throughout Canada — F.C.T.D. Judge holding subsidiary’s application admission against interest — Concluding “Export” distinctive of Molson’s product in Ontario, Quebec, Molson entitled to registration pursuant to Trade-marks Act, s. 12(2) — Appeal allowed — Applicant under s. 12(2) must show proposed trade-mark, although descriptive, acquiring dominant secondary or distinctive meaning in relation to its wares, services — S. 32 permitting registration to be restricted to territorial area in which trade-mark shown to have become distinctive — Date of filing application for registration relevant date for determining distinctiveness by reason of long use under s. 12(2) — Scheme of s. 32 indicating territorially restricted trade-mark limited to cases to which ss. 12(2), 13 apply — Applying s. 32(2), Great Lakes Hotels Ltd. v. The Noshery Ltd. approach, if distinctiveness of “Export” mark in Ontario, Quebec established, Molson entitled to registration under s. 12(2) — Whether exclusivity essential to prove distinctiveness moot question — Exclusivity not essential to distinctiveness — Little probative value in flawed survey, self-serving evidence of Molson executives as to public recognition of —Export” in association with Molson’s product — Sales, advertising evidence not proving “Export” alone distinctive of Molson product — Subsidiary’s application should not have been treated as admission against interest — Applying reasonableness simpliciter standard of review, and as additional evidence would not have materially affected findings of fact, exercise of discretion, F.C.T.D. Judge should have allowed Registrar’s decision to stand — Where evidence not proving, on balance of probabilities, acquired distinctiveness of descriptive term under s. 12(2) to Registrar’s satisfaction, application cannot be allowed.

This was an appeal under Trade-marks Act, section 56 from the trial judgment allowing an appeal from the Registrar’s refusal to register the trade-mark “Export” in association with brewed alcoholic beverages, based largely on additional evidence filed on the appeal. Subsection 56(1) provides for an appeal to the Federal Court from any decision of the Registrar. Subsection 56(5) permits evidence in addition to that adduced before the Registrar to be adduced on such an appeal, and permits the Federal Court to exercise any discretion vested in the Minister.

By reason of Trade-marks Act, paragraph 12(1)(b), a mark that is clearly descriptive of goods is not registrable. However, under subsection 12(2), if, by long use of the mark in association with the goods, it has become distinctive of the applicant’s wares at the date of application for registration of the mark, such that the clearly descriptive connotation of the trade-mark is subordinated to its distinctiveness, the trade-mark may be registered. Molson’s application for registration of “Export” for use in association with brewed alcoholic beverages did not refer to section 12. Labatt opposed the registration application on the basis that the word “Export” was clearly descriptive of a quality of beer under paragraph 12(1)(b), and was not distinctive of Molson’s beer pursuant to paragraph 38(2)(d). In 1988 Molson amended its application to claim the benefit of subsection 12(2). The Registrar had before him an affidavit to which was exhibited a survey conducted at four locations in Ontario. The Registrar concluded that even if the affidavit proved that “Export” had acquired distinctiveness in Ontario, that proof did not extend to show that it had acquired distinctiveness throughout Canada. The Trial Division had before it sales and advertising figures, and an application by Labatt on behalf of its wholly owned subsidiary, Oland Breweries Ltd., to register “Export” as its trade-mark. This evidence had not been before the Registrar. The Trial Judge treated Labatt’s attempt to register “Export” as a trade-mark on behalf of its subsidiary as an admission against interest from which Labatt should not be allowed to resile for the purposes of the Molson application. She made two determinations: (1) that Molson’s “Export” mark had been distinctive in Ontario and Quebec at the date of the filing of the application for registration; and (2) that while the date of opposition was relevant for purposes of the opposition under paragraph 38(2)(d), the issue was moot as there was no change in market conditions between the date of application and the date of opposition. Thus Molson was entitled to registration of its mark pursuant to Trade-marks Act, subsection 12(2).

The issues were: (1) what is the nature of an appeal under section 56 and the standard of review; (2) what is the standard of proof under subsection 12(2); (3) what is the relevant date for determining distinctiveness under subsection 12(2); (4) whether distinctiveness must be established throughout Canada; (5) whether exclusivity is essential to prove distinctiveness; and (6) whether the Trial Judge’s decision was correct.

Held (Isaac J.A. dissenting), the appeal should be allowed.

Per Rothstein J.A.: (1) An appeal under section 56 involves, at least in part, a review of the findings of the Registrar. Even though the Trade-marks Act expressly provides for an appeal to the Federal Court, the Registrar’s expertise has been recognized as requiring some deference. In the absence of additional evidence adduced in the Trial Division, the Registrar’s decisions, whether of fact, law, or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar’s findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar’s decision.

(2) The cases often refer to a “heavy onus” in an application under subsection 12(2). “Heavy onus” would appear to be directed to the exceptional aspect of subsection 12(2). Because subsection 12(2) is an exception to non-registrability of clearly descriptive terms, evidence must be adduced that long use has caused a descriptive word to have become distinctive of the applicant’s product. If such evidence is provided, it is to be assessed on a balance of probabilities. Subsection 12(2) does not require an applicant to demonstrate the elimination of the descriptiveness of a mark. The applicant under subsection 12(2) must show that the trade-mark it seeks to register, although it may be descriptive, has acquired a dominant secondary or distinctive meaning in relation to the wares or services of the applicant.

(3) The date on which the distinctiveness of a mark must be established by reason of long use in Canada is the date of filing of an application for its registration. Once it is advertised, there is not a two-stage approach in respect of applications under subsection 12(2). The opposition under paragraph 38(2)(d) and the question of whether a mark has acquired distinctiveness under subsection 12(2) involve the same determination. Indeed, the question of registrability is also part of the same determination because if the mark is found to be registrable by reason of subsection 12(2), such finding will have displaced non-registrability by reason of paragraphs 12(1)(a) or (b). Throughout, the onus is on the applicant to prove distinctiveness.

Under paragraph 18(1)(b) registration of a trade-mark is invalid if it is not distinctive at the time proceedings bringing the validity of the registration into question are commenced. Paragraph 18(1)(b) applies where there has been a registration granted and subsequently proceedings are taken to invalidate the registration. Paragraph 38(2)(d) provides for opposition to be filed based on non-distinctiveness. The filing of an opposition under paragraph 38(2)(d) is not a proceeding bringing the validity of an already registered trade-mark into question under paragraph 18(1)(b). Therefore the filing of the opposition in this case did not create a second date for the determination of distinctiveness.

(4) Section 19 provides that registration gives to the owner the exclusive right to use “throughout Canada” of the trade-mark. Subsection 32(1) provides that an applicant who claims that his trade-mark is registrable under subsection 12(2), or section 13 shall furnish the Registrar with evidence establishing the extent and time during which the mark has been used in Canada. Subsection 32(2) permits the Registrar to restrict the registration to the defined territorial area in which the trade-mark is shown to have become distinctive. Thus the legislation appears to contemplate a general registration throughout Canada, subject, in certain circumstances, to restriction by the Registrar to defined territorial areas where the evidence only supports distinctiveness having been acquired in those areas. In Great Lakes Hotels Ltd. v. The Noshery Ltd., Cattanach J. held that a trade-mark is distinctive if it actually distinguishes the wares or services of its owner from those of others in a restricted area of Canada and need not distinguish those wares throughout Canada. A number of Trade-marks Opposition Board cases have disapproved of or distinguished that finding. The Great Lakes finding on this issue should be limited to applications under subsection 12(2) or section 13. The scheme of section 32 in its entirety supports the view that territorially restricted trade-marks are limited to cases to which subsection 12(2) or section 13 apply. Subsection 32(2) is not an independent provision applicable to all trade-mark applications, but rather only to those to which subsection 32(1) applies, namely applications under subsection 12(2) or section 13. Thus subsection 32(2) and Great Lakes can be applied to the present case, so that if Molson establishes distinctiveness in Ontario and Quebec of its “Export” mark, it will be entitled to registration under subsection 12(2).

(5) Having determined that the relevant date for determining distinctiveness is the date of filing the application for registration, and that such application may be restricted to a defined territorial area, the question of whether exclusivity is essential to prove distinctiveness was moot. As of the date of filing of the application, there was no other use of the word “Export” in association with brewed alcoholic beverages in Ontario and Quebec. Proof of exclusive use of a trade-mark by an applicant is not required to demonstrate distinctiveness for the purpose of registration. While use of the same mark by others in association with similar wares is relevant in determining whether a mark is distinctive, exclusivity is not essential in proving distinctiveness.

(6) The Court of Appeal was in as good a position as the Trial Judge to determine what conclusions should be drawn from this evidence. The word “Export” never appears alone, but only in conjunction with the word “Molson” or “Molson’s” on bottles or cartons. Therefore extensive sales or advertising expenditures did not prove that the word “Export” alone was distinctive of Molson’s beer. “Molson Export” is distinctive, but the evidence did not lead to the conclusion that the term “Export” of itself is distinctive of the product.

The self-serving evidence of Molson senior executives that there was public recognition of the term “Export” in association with the Molson product, and a survey, which the Trial Judge found was flawed, did not have significant probative value.

That Labatt’s subsidiary was seeking the same kind of recognition of “Export” with respect to one of its products was not evidence that “Export” in relation to Molson’s product had acquired distinctiveness. Distinctiveness is to be determined from the point of view of an everyday user of the wares and the trade-mark must be considered in its entirety and as a matter of first impression. The subsidiary’s application was irrelevant. It did not discredit Labatt’s opposition in the Molson proceedings. The obvious inference was that the subsidiary’s application for registration of “Export” was a response to the earlier Molson application. The subsidiary was trying to protect its use of “Export” in the face of the Molson application. The Trial Judge should not have treated the subsidiary’s application as an admission against interest. Applying the reasonableness simpliciter standard of review to the Registrar’s decision, and having regard to the fact that the additional evidence adduced in the Trial Division would not have materially affected his findings of fact or exercise of discretion, the Trial Judge should have allowed the Registrar’s decision to stand. By reason of subsection 32(1), a decision under subsection 12(2) must be supported by evidence satisfactory to the Registrar. Where the evidence does not prove, on a balance of probabilities, acquired distinctiveness of a descriptive term under subsection 12(2) to the satisfaction of the Registrar, the application cannot be allowed.

Per Isaac J.A. (dissenting): The critical question was whether Molson had discharged the onus imposed by subsection 12(2) of showing that at the date of the filing of its application for registration, the trade-mark had been “so used in Canada by the applicant or his predecessor in title as to have become distinctive”.

The Registrar’s conclusion was one of fact. The Trial Division was therefore free to review it and to reach its own conclusion. More significantly, the Court had before it additional evidence which had not been before the Registrar.

The Trial Division did not place reliance on the subsidiary’s application for proof of the distinctiveness of the Molson trade-mark. Rather it correctly concluded that the subsidiary’s application was an admission against interest which tended to weaken the credibility of the appellant’s opposition to the respondent’s application. After reviewing all the evidence, the Court was satisfied that Molson had established the distinctiveness of the “Export” trade-mark in Ontario and Quebec. That conclusion was open to the Trial Division on the evidence which it considered. Absent palpable and overriding error which affected the Court’s view of the facts, there was no reason to interfere with that conclusion.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Trade Marks Act, R.S.C. 1970, c. T-10, s. 37(2)(b).

Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2 “distinctive”, “trade-mark”, 12(1)(a),(b),(2), 13, 18(1)(b), 19 (as am. by S.C. 1993, c. 15, s. 60), 32, 38(2)(b),(d), 56.

CASES JUDICIALLY CONSIDERED

APPLIED:

McDonald’s Corp. v. Silcorp Ltd. (1989), 24 C.P.R. (3d) 207; 25 F.T.R. 151 (F.C.T.D.); affd (1992), 41 C.P.R. (3d) 67; 139 N.R. 319 (F.C.A.); Benson & Hedges (Canada) Limited v. St. Regis Tobacco Corporation, [1969] S.C.R. 192; (1968), 1 D.L.R. (3d) 462; 57 C.P.R. 1; 39 Fox Pat. C. 207; E. & J. Gallo Winery v. Andres Wines Ltd., [1976] 2 F.C. 3 (1975), 25 C.P.R. (2d) 126; 11 N.R. 560 (C.A.); Kellogg Company of Canada Ltd. v. Registrar of Trade Marks, [1940] Ex. C.R. 163; [1939] 3 D.L.R. 65; Crosfield (Joseph) & Sons Ld. — In the Matter of an Application to Register a Trade Mark (“Perfection”) by (1909), 26 R.P.C. 837 (C.A.); Great Lakes Hotels Ltd. v. The Noshery Ltd., [1968] 2 Ex. C.R. 622; (1968), 56 C.P.R. 165; Battle Pharmaceuticals v. The British Drug Houses Ltd., [1946] S.C.R. 50; [1946] 1 D.L.R. 289; (1945), 5 C.P.R. 71.

DISTINGUISHED:

Standard Coil Products Can. Ltd. v. Standard Radio Corp., [1971] F.C. 106; (1971), 1 C.P.R. (2d) 155 (T.D.); affd [1976] 2 F.C. iv; (1976) 26 C.P.R. (2d) 288 n (C.A.).

CONSIDERED:

Carling Breweries Ltd. v. Molson Companies Ltd., [1984] 2 F.C. 920 (1984) 1 C.P.R. (3d) 191 (T.D.); Carling Breweries Ltd. v. Molson Cos. Ltd. (1988), 16 C.I.P.R. 157; 19 C.P.R. (3d) 129 (F.C.A.); Robinson’s Camera Centre Ltd. v. Black Photo Corp. (1990), 34 C.P.R. (3d) 439 (T.M.O.B.); Morris et al. trading as Happy Cooker Catering v. Lisko (1982), 70 C.P.R. (2d) 254 (T.M.O.B.); DeCaria Hair Studio Ltd. v. Massimo De Berardinis et al. trading as De Berardinis (1984), 2 C.P.R. (3d) 309 (T.M.O.B.).

REFERRED TO:

Molson Breweries, a Partnership v. Swan Brewery Co. (1994), 58 C.P.R. (3d) 303 (T.M.O.B.); Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R. (3d) 289 (F.C.A.); Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; (1997), 144 D.L.R. (4th) 1; 71 C.P.R. (3d) 417; 209 N.R. 20; affg (1995), 127 D.L.R. (4th) 329; 21 B.L.R. (2d) 68; 63 C.P.R. (3d) 67; 185 N.R. 291 (C.A.); Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 (F.C.A.); Muffin Houses Inc. v. Muffin House Bakery Ltd. (1985), 4 C.P.R. (3d) 272 (T.M.O.B.); Imperial Group plc and Another v Philip Morris Limited and Another, [1984] R.P.C. 293 (Ch.D.); Moore Dry Kiln Co. of Canada v. U.S. National Resources Inc. (1976), 30 C.P.R. (2d) 40; 12 N.R. 361 (F.C.A.); Johnson (S.C.) and Son, Ltd. et al. v. Marketing International Ltd., [1980] 1 S.C.R. 99; (1979), 105 D.L.R. (3d) 423; 9 B.L.R. 327; 44 C.P.R. (2d) 16; 29 N.R. 515; Mr. P’s Mastertune Ignition Services Ltd. v. Tune Masters (1984), 82 C.P.R. (2d) 128 (F.C.T.D.); All Canada Vac Ltd. v. Lindsay Manufacturing Inc. (1990), 28 C.P.R. (3d) 385; 32 F.T.R. 259 (F.C.T.D.).

AUTHORS CITED

Black’s Law Dictionary, 7th ed. St. Paul, Minn.: West Group, 1999, “trial de novo”.

Clark, Joan. “The Distinctiveness Required for the Validity of a Trade Mark” (1971), 2 C.P.R. (2d) 239

Fox, H. G. Canadian Law of Trade Marks and Unfair Competition, 3rd ed., Toronto: Carswell, 1972.

APPEAL from a Trial Division judgment (Molson Breweries, a Partnership v. John Labatt Ltd. (1998), 82 C.P.R. (3d) 1; 148 F.T.R. 281 (F.C.T.D.)) allowing an appeal from the Registrar’s refusal to register the trade-mark “Export” (John Labatt Ltd. v. Molson Breweries, A Partnership, [1995] T.M.O.B. No. 223 (QL)) based largely on additional evidence filed on the appeal. Appeal allowed.

APPEARANCES:

Nicholas H. Fyfe, Q.C. and Kohji Suzuki for appellants.

Elizabeth G. Elliott and John S. Macera for respondent.

SOLICITORS OF RECORD:

Smart & Biggar, Ottawa, for appellants.

Macera & Jarzyna, Ottawa, for respondent.

The following are the reasons for judgment rendered in English by

[1]        Isaac J.A. (dissenting): I have had the privilege of reading, in draft, the reasons for judgment which Mr. Justice Rothstein proposes to deliver in this appeal. I regret that I am unable to subscribe to them or to the manner of his proposed disposition of the appeal.

[2]        The reasons for my conclusion follow.

[3]        I do not find it necessary to express an opinion on the first five issues with which Justice Rothstein has dealt, namely: the nature of and appeal under section 56 of the Trade-marks Act, R.S.C., 1985, c. T-13 (the Act), and the standard of review; the standard of proof under subsection 12(2) of the Act; the relevant date for determining distinctiveness under subsection 12(2) of the Act; whether distinctiveness must be established throughout Canada; and whether exclusivity is essential to prove distinctiveness, since those issues have been dealt with either in existing jurisprudence or in legislation.

[4]        To my mind, the critical question in this appeal is whether the Court at first instance was right in concluding on the facts placed before it, that the respondent, Molson Breweries, A Partnership (Molson), had discharged the onus imposed by subsection 12(2) of the Act of showing that at the date of the filing of its application for registration, the trade-mark had been “so used in Canada by the applicant or his predecessor in title as to have become distinctive” [(1998), 82 C.P.R. (3d) 1 (F.C.T.D.)].

[5]        The relevant portions of section 12 of the Act read:

12. (1) Subject to section 13, a trade-mark is registrable if it is not

…

(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 …

…

(2) A trade-mark that is not registrable by reason of paragraph (1)(a) or (b) is registrable if it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application for its registration. [Emphasis added.]

[6]        This proceeding was commenced in the Trial Division of this Court as an appeal brought by the respondent, pursuant to section 56 of the Act, from a decision of the Registrar of Trade-marks (the Registrar) dated 22 November 1995 [[1995] T.M.O.B. No. 223 (QL)], denying its application to register the trade-mark “Export” for use in association with “brewed alcoholic beverages.”

[7]        Before the Registrar, the respondent filed the affidavit of David J. Pye, a research methodologist, to which was exhibited a survey conducted for the respondent at four locations in Ontario. The Registrar found that this evidence did not meet the evidentiary burden which subsection 12(2) of the Act had imposed on the respondent. He concluded that, even if the Pye affidavit proved that the word “Export” had acquired distinctiveness in Ontario, that proof did not extend to show that it had acquired distinctiveness in the remainder of the country. Such a showing was, in his judgment, mandated by the provisions of the Act. Accordingly, he refused the respondent’s application.

[8]        As I have already said, the respondent appealed from that refusal to the Trial Division pursuant to section 56 of the Act which reads, in relevant parts:

56. (1) An appeal lies to the Federal Court from any decision of the Registrar under this Act within two months from the date on which notice of the decision was dispatched by the Registrar or within such further time as the Court may allow, either before or after the expiration of the two months.

…

(5) On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.

[9]        On the authority of subsection 56(5) of the Act, the respondent filed before the Court at first instance the affidavit of two of its senior officers together with a certified copy of the record in the Trade-marks Office respecting an application by Oland Breweries Ltd. (Oland), a wholly owned subsidiary of the appellant, John Labatt Limited and Labatt Brewing Company Limited (Labatt), to register the word “Export” as a trade-mark. This evidence was new and was not considered by the Registrar in reaching his conclusion.

[10]      It should be noticed here that Labatt had opposed the respondent’s application before the Registrar pursuant to paragraphs 38(2)(b) and (d) of the Act. As a consequence, the Registrar heard evidence and conducted opposition proceedings as required by that section of the Act. It is from his refusal of the respondent’s application that the respondent appealed to the Trial Division, pursuant to subsection 56(1) of the Act.

[11]      In McDonald’s Corp. v. Silcorp Ltd.[1] (McDonald’s Corp.), Strayer J. (as he then was) reviewed the role of the Court on an appeal from a decision of the Registrar in opposition proceedings. He said, in part:

It seems clear that in opposition proceedings where the issue is essentially one of fact concerning … distinctiveness the decision of the registrar or the Board represents a finding of fact and not the exercise of discretion. Therefore the court should not impose upon itself the same degree of restraint, in reviewing that decision, as it would if the decision were essentially an exercise of discretion. It is thus free to review the facts to determine whether the decision of the registrar or Board was correct, but that decision should not be set aside lightly considering the expertise of those who regularly make such determinations: see Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp. (1968), 57 C.P.R. 1 at p. 8, 1 D.L.R. (3d) 462, [1969] S.C.R. 192, at pp. 199-200 (S.C.C.). While different panels of the Federal Court of Appeal have variously expressed the duty of this court on appeal to be to determine whether the registrar has “clearly erred”, or whether he has simply “gone wrong”, it appears that it is the duty of a judge sitting on an appeal such as this to come to his own conclusion as to the correctness of the finding of the registrar. In doing that he must, however, take into account the special experience and knowledge of the registrar or the Board, and more importantly have regard to whether new evidence has been put before him that was not before the Board. The parties agree that in the present case that there was no new evidence before me which was not before the Opposition Board ….[2] [Emphasis added.]

[12]      Here, then, the conclusion of the Registrar was one of fact. The Court below was, therefore, free to review it and to reach its own conclusion. More significantly, unlike McDonald’s Corp., the Court had before it, as I have already noticed, additional evidence which was not before the Registrar.

[13]      The Trial Judge reviewed this new evidence, as well as the record before the Registrar, and concluded that the respondent had discharged the onus imposed on it by subsection 12(2) of the Act, to demonstrate by proof to the requisite degree, that the word “Export” actually distinguished Molson’s beer from that of others, over time, such that, in the words of that subsection, it had “been so used in Canada by [Molson] … as to have become distinctive at the date of filing an application for its registration.”

[14]      The evidence which the respondent put before the Court was the only relevant new evidence to consider. That evidence was uncontradicted. At first instance, the appellant, Labatt, did not cross-examine either Moran or Shier on their affidavits, or file any responding material that applied to the relevant period. Labatt had filed the affidavits of Bernard Beasely and John Tilden, but they referred to sales after 28 June 1995 and so the Court rejected them as irrelevant.

[15]      In reaching its conclusion, the Court placed great reliance on the decision of this Court in Standard Coil Products Can. Ltd. v. Standard Radio Corp.[3] (Standard Coil). In that case Cattanach J. found that the trade-mark “Standard” was distinctive of the appellant’s television tuners and could be registered under subsection 12(2) of the Act. In his view, the case turned on whether there was sufficient evidence adduced to establish that the trade-mark of the appellant actually distinguished its wares. As in this case, there was before him, new evidence which was not before the Registrar. He found that evidence of extensive sales and advertising expenditures was significant.

[16]      Consistent with the principles laid down in Standard Coil, the Court at first instance concluded that the Shier and Moran affidavits showed significant sales and advertising over a long period of time, and the prominent display of “Export” on the packaging. The affidavits disclosed the following:

a) EXPORT brand ale has been continuously sold in both Ontario and Quebec by Molson since 1955;

b) From 1976 to 1985 inclusive, Molson sold in excess of 19.4 million hectolitres of its EXPORT brand ale in Ontario and Quebec;

c) From 1976 to 1985 inclusive, Molson expended in excess of $25 million in advertising its EXPORT brand ale thought the media of television, radio, and printed publication;

d) The trade-mark EXPORT has been prominently displayed by Molson on labels affixed to the bottles and on the cartons in which the bottles of EXPORT brand ale are packaged and sold.[4]

[17]      These two executives deposed to having extensive experience in the brewing industry. Shier was the President, Western Region at Molson as of December 1995. He had been with the company since 1989 and before that was the Director of Brand Management, Carling O’Keefe Breweries. He was employed by Carling from 1979 to 1989. Harold Moran was Senior Vice-President, Central Division, of Molson and had been since 1989. His background with Molson was in marketing and before that he had worked for many years at an advertising agency.

[18]      Because of this expensive experience and his position, Shier was able to swear that:

As a result of my many years experience in the brewing industry in Canada, including my review of corporate records which include various studies and research conducted over the years, it is my view that the public throughout Canada associate, to a large degree, the word EXPORT with a brand of beer which is the product of Molson Breweries, and not a product of any other person.[5]

Similarly, for the same reason, Moran was able to swear that:

It can be seen from the survey evidence of Mr. Pye that the consumers of brewed alcoholic beverages in Ontario would recognize the word “EXPORT” as designating a brand of beer of the Molson Brewing Group. This is consistent with the extensive sales and advertising of EXPORT brand alcoholic beverages in Ontario and Quebec for many years, which has resulted in such public recognition.[6]

[19]      The Court at first instance found that the Pye survey was unsatisfactory in several respects and, consequently, accorded it “little weight”. The Court said that the Pye survey was not enough “in itself” to prove distinctiveness. However, because the survey was consistent with the opinions expressed in Shier and Moran affidavits, which assert the distinctiveness of the mark “Export,” the Court concluded that the Pye survey reinforced or “bolstered”[7] the assertions of those deponents.

[20]      I agree with Mr. Justice Rothstein that the Oland application for a trade-mark for the word “Export” is entirely attributable to the appellant, Labatt. However, I do not read the reasons of the Court at first instance as placing reliance on that application for proof of the distinctiveness of the Molson trade-mark. Rather, the Court concluded correctly, in my respectful view, that the Oland application was an admission against interest and as such it tended to weaken the credibility of the appellant’s opposition to the respondent’s application. After reviewing all the evidence, the Court was satisfied that the respondent, Molson, had established the distinctiveness of the “Export” trade-mark in Ontario and Quebec.

[21]      In my respectful view, that conclusion was open to the Court at first instance on the evidence which it considered. Absent, a showing of a palpable and overriding error which affected the Court’s view of the facts, and there was none shown, I find no reason to interfere with that conclusion.

[22]      I would, accordingly, dismiss the appeal with costs.

* * *

The following are the reasons for judgment rendered in English by

Rothstein J.A.:

INTRODUCTION

[23]      On June 28, 1985, a predecessor in title of Molson Breweries, A Partnership (Molson) applied to the Registrar of Trade-marks to register as a trade-mark the word “Export” in association with its brewed alcoholic beverages.

[24]      On July 18, 1986, John Labatt Limited and Labatt Brewing Company Limited (Labatt) opposed the registration on the grounds that the word “Export” was either clearly descriptive or deceptively misdescriptive of the character and quality of brewed alcoholic beverages and was not a distinctive term.

[25]      On November 22, 1995, David J. Martin, a member of the Trade-marks Opposition Board (Registrar) refused the Molson application to register the trade-mark “Export”. Molson appealed the Registrar’s decision to the Federal Court Trial Division under section 56 of the Trade-marks Act.[8] Additional evidence was filed on the appeal. On June 25, 1998, the Trial Division Judge, largely on the basis of the additional evidence filed, allowed the appeal and found that Molson was entitled to registration of the word “Export” as a trade-mark restricted to the provinces of Ontario and Quebec.[9] This is an appeal from the judgment of the Trial Division Judge.

STATUTORY CONTEXT

[26]      By reason of paragraph 12(1)(b) of the Trade-marks Act, a mark that is clearly descriptive of goods is not registrable. However, under subsection 12(2), if, by long use of the mark in association with the goods, it has become distinctive of the applicant’s wares at the date of application for registration of the mark, such that the clearly descriptive connotation of the trade-mark is subordinated to its distinctiveness, the trade-mark may be registered. Paragraph 12(1)(b) and subsection 12(2) provide:

12. (1) Subject to section 13, a trade-mark is registrable if it is not

…

(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;

…

(2) A trade-mark that is not registrable by reason of paragraph (1)(a) or (b) is registrable if it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application for its registration.

[27]      In the present case, Molson’s June 28, 1985 application did not refer to section 12. Labatt opposed the registration application by Molson on the basis that the word “Export” was clearly descriptive of a quality of beer under paragraph 12(1)(b) and that the word “Export” was not distinctive of the Molson beer product in association with which it was used pursuant to paragraph 38(2)(d). Paragraph 38(2)(d) provides:

38. (1) …

(2) A statement of opposition may be based on any of the following grounds:

…

(d) that the trade-mark is not distinctive.

[28]      On May 30, 1988, Molson amended its application to claim the benefit of subsection 12(2) of the Act.

DECISION OF THE REGISTRAR

[29]      The Registrar considered the Molson application in the context of the two grounds of opposition raised by Labatt: that the “Export” trade-mark was not registrable pursuant to paragraph 12(1)(b) of the Trade-marks Act and that the mark was not distinctive pursuant to paragraph 38(2)(d) of the Trade-marks Act.

[30]      As to the first ground of opposition, he found that the relevant time for considering the circumstances relating to paragraph 12(1)(b) was the date of his decision, November 22, 1995, that the issue was to be determined from the point of view of an everyday user of the wares and that the trade-mark in question must be considered in its entirety and as a matter of first impression.

[31]      Citing from a previous Registrar’s decision[10] in which the term “Export” was found to be “common to the trade in general”, and in which various dictionary definitions were cited to the effect that “Export” was a word “designating an article of a quality suitable for export”, the Registrar found that Labatt had met its evidentiary burden of opposition. He then discounted an affidavit of David J. Pye, who had conducted a survey for Molson at four locations in Ontario. The Registrar found that the results could not reasonably be extrapolated to the rest of Canada. He concluded [at page 5 (QL)]:

Thus, the applicant’s evidence would be insufficient, in any event, to show that its mark is not clearly descriptive or deceptively misdescriptive of the character or quality of the applicant’s wares throughout Canada. Thus, the first ground of opposition is successful.

[32]      The Registrar then went on to determine whether, having regard to subsection 12(2) of the Act, the word “Export” had become distinctive as of the filing date of the application. The relevant evidence before the Registrar was again the Pye affidavit. The Registrar noted that Mr. Pye’s survey was conducted only in Ontario and that it failed to meet the “heavy onus” imposed on applicants by subsection 12(2). He found that the Pye affidavit was ambiguous and unclear as to whether the term “Export” was identified as a trade-mark, separate and apart from the house-mark Molson or Molson’s. He therefore concluded that Molson had failed to meet the evidentiary burden under subsection 12(2).

[33]      He then went on to consider the second ground of opposition—whether Molson had met the onus of establishing that its mark distinguished its wares from those of others throughout Canada. The material time for doing so, he thought, was as of the filing date of the opposition. The Registrar reiterated that the word “Export” was clearly descriptive of the character of a quality of beer. Further, he found some minor evidence of sales of beer by third parties whose trade-marks incorporated the word “Export” in areas of Canada other than Ontario. He concluded that even if the Pye affidavit proved the word “Export” had acquired distinctiveness in Ontario, there was no such evidence throughout the rest of the country. He, therefore, found the second ground of opposition successful.

[34]      He concluded by refusing the Molson application to register the word “Export” as a trade-mark.

DECISION OF THE TRIAL DIVISION JUDGE

[35]      Filed before the Trial Division Judge but not before the Registrar were Molson sales and advertising figures, as well as an August 24, 1990 application by Labatt on behalf of its wholly owned subsidiary Oland Breweries Limited (Oland) to register the word “Export” as its trade-mark. It was on the basis of this new evidence that she treated the appeal as a trial de novo.

[36]      She then considered the Molson application in light of subsection 12(2). She accepted that the word “Export” is normally descriptive of a type of beer and that Molson “must discharge itself of a very heavy burden before being able to establish that its trade-mark is distinctive”.

[37]      The learned Judge rejected Labatt’s submission that Molson must show exclusive use of the trade-mark in order to satisfy the requirements of subsection 12(2). She concluded that it was sufficient for the mark to be distinctive to a substantial portion of the relevant public. In submissions before her, Molson advised that it was seeking registration restricted to Ontario and Quebec only. She found that a trade-mark was registrable as long as it distinguished wares in the restricted area in which registration is sought. She, therefore, rejected evidence of use of the word “Export” by others outside of Ontario and Quebec. She also rejected evidence of use of the word by others in Ontario and Quebec after the date of filing of the trade-mark application by Molson, namely June 28, 1985. The result was that there was no evidence of use of the “Export” mark by others in Ontario and Quebec as of the date Molson filed its trade-mark application.

[38]      She then assessed the evidence before her. As to the Pye affidavit that had also been before the Registrar, she concluded that it could not establish the Molson claim under subsection 12(2). She noted numerous flaws in the methodology of the survey. Consequently, as did the Registrar, she gave the survey little weight.

[39]      The learned Judge then noted the evidence of extensive sales of Molson’s “Export” beer, as well as significant advertising expenditures for the product. Based on affidavits of two Molson senior executives, Shier and Moran, she found that there was public recognition of the word “Export” in association with a brand of beer produced by Molson. She found that the Shier and Moran affidavits were consistent with the Pye survey. She accepted the evidence of Shier and Moran that Molson is, in effect, a “house-mark” and that “Export” is a brand of beer sold by Molson. In this respect, she observed [at page 12, paragraph 40] that “all the labels of the Molson family contain the house-mark `Molson’ in conjunction with the brand names: CANADIAN, GOLDEN, or EXPORT”.

[40]      The learned Judge then referred to Labatt’s attempt to register “Export” as a trade-mark in association with an Oland beer product as an admission against interest from which Labatt should not be allowed to resile for the purposes of the Molson application.

[41]      Having regard to the evidence and the analysis in Standard Coil Products Can. Ltd. v. Standard Radio Corp.,[11] the learned Judge concluded that the “Export” trade-mark was distinctive of Molson’s product in Ontario and Quebec. In particular, she noted that the evidence filed in the Standard Coil case was the same as that filed in this case.

[42]      She then went on to consider the question of distinctiveness under paragraph 38(2)(d). In her view, the relevant time for the determination of distinctiveness was as of the date of the filing of the opposition. However, she found no evidence of a change in market conditions between the date of filing of the trade-mark application by Molson and the date of the filing of the opposition by Labatt that would have adversely affected the distinctiveness of the “Export” mark. Therefore, distinctiveness under paragraph 38(2)(d) was moot.

[43]      As a result, the learned Judge allowed the appeal and found that Molson was entitled to the registration of its mark pursuant to subsection 12(2) of the Trade-marks Act.

ANALYSIS

[44]      This appeal gives rise to a number of issues:

(1) nature of an appeal under section 56 and standard of review;

(2) standard of proof under subsection 12(2);

(3) the relevant date for determining distinctiveness under subsection 12(2);

(4) whether distinctiveness must be established throughout Canada;

(5) whether exclusivity is essential to prove distinctiveness;

(6) assessment of the decision of the Trial Judge.

1. Nature of an Appeal under Section 56 and Standard of Review

[45]      Subsections 56(1) and (5) provide:

56. (1) An appeal lies to the Federal Court from any decision of the Registrar under this Act within two months from the date on which notice of the decision was dispatched by the Registrar or within such further time as the Court may allow, either before or after the expiration of the two months.

…

(5) On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.

[46]      Because of the opportunity to adduce additional evidence, section 56 is not a customary appeal provision in which an appellate court decides the appeal on the basis of the record before the court whose decision is being appealed. A customary appeal is not precluded if no additional evidence is adduced, but it is not restricted in that manner. Nor is the appeal a “trial de novo” in the strict sense of that term. The normal use of that term is in reference to a trial in which an entirely new record is created, as if there had been no trial in the first instance.[12] Indeed, in a trial de novo, the case is to be decided only on the new record and without regard to the evidence adduced in prior proceedings.[13]

[47]      On an appeal under section 56, the record created before the Registrar forms the basis of the evidence before the Trial Division judge hearing the appeal, which evidence may be added to by the parties. Thus, although the term trial de novo has come into frequent usage in describing a section 56 appeal, the term is not an entirely accurate description of the nature of such an appeal. That an appeal under section 56 is not a trial de novo in the strict sense of the term was noted by McNair J. in Philip Morris Inc. v. Imperial Tobacco Ltd. (No. 1).[14]

[48]      An appeal under section 56 involves, at least in part, a review of the findings of the Registrar. In conducting that review, because expertise on the part of the Registrar is recognized, decisions of the Registrar are entitled to some deference. In Benson & Hedges (Canada) Limited v. St. Regis Tobacco Corporation,[15] Ritchie J. stated, at page 200:

In my view the Registrar’s decision on the question of whether or not a trade mark is confusing should be given great weight and the conclusion of an official whose daily task involves the reaching of conclusions on this and kindred matters under the Act should not be set aside lightly but, as was said by Mr. Justice Thorson, then President of the Exchequer Court, in Freed and Freed Limited v. The Registrar of Trade Marks et al:

… reliance on the Registrar’s decision that two marks are confusingly similar must not go to the extent of relieving the judge hearing an appeal from the Registrar’s decision of the responsibility of determining the issue with due regard to the circumstances of the case.

[49]      In McDonald’s Corp. v. Silcorp Ltd.,[16] Strayer J. (as he then was), having regard to the words of Ritchie J., explained that while the Court must be free to assess the decision of the Registrar, that decision should not be set aside lightly.

It seems clear that in opposition proceedings where the issue is essentially one of facts concerning confusion or distinctiveness the decision of the registrar or the Board represents a finding of fact and not the exercise of discretion. Therefore the court should not impose upon itself the same degree of restraint, in reviewing that decision, as it would if the decision were essentially an exercise of discretion. It is thus free to review the facts to determine whether the decision of the registrar or Board was correct, but that decision should not be set aside lightly considering the expertise of those who regularly make such determinations: see Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp. (1968), 57 C.P.R. 1 at p. 8, 1 D.L.R. (3d) 462, [1969] S.C.R. 192 at pp. 199-200 (S.C.C.). While different panels of the Federal Court of Appeal have variously expressed the duty of this court on appeal to be to determine whether the registrar has “clearly erred”, or whether he has simply “gone wrong”, it appears that it is the duty of a judge sitting on an appeal such as this to come to his own conclusion as to the correctness of the finding of the registrar. In doing that he must, however, take into account the special experience and knowledge of the registrar or the Board, and more importantly have regard to whether new evidence has been put before him that was not before the Board.[17]

[50]      McDonald’s Corp. v. Silcorp Ltd. was a 1989 decision, well before the recent Supreme Court jurisprudence establishing the modern spectrum of standards of review, namely, correctness, reasonableness simpliciter and patent unreasonableness. See Canada (Director of Investigation & Research) v. Southam Inc.[18] Because Strayer J. was prepared to accord some deference to the Registrar, I do not consider his use of the term “correct” to reflect the non-deferential and rigorous standard of review that is today associated with the terms “correct” or “correctness”.

[51]      I think the approach in Benson & Hedges and McDonald’s Corp. are consistent with the modern approach to standard of review. Even though there is an express appeal provision in the Trade-marks Act to the Federal Court, expertise on the part of the Registrar has been recognized as requiring some deference. Having regard to the Registrar’s expertise, in the absence of additional evidence adduced in the Trial Division, I am of the opinion that decisions of the Registrar, whether of fact, law or discretion, within his area of expertise, are to be reviewed on a standard of reasonableness simpliciter. However, where additional evidence is adduced in the Trial Division that would have materially affected the Registrar’s findings of fact or the exercise of his discretion, the Trial Division judge must come to his or her own conclusion as to the correctness of the Registrar’s decision.

2. Standard of Proof under Subsection 12(2)

[52]      The cases often refer to a “heavy onus” in an application under subsection 12(2). For example, in Carling Breweries Ltd. v. Molson Companies Ltd.,[19] Strayer J. (as he then was) stated at pages 928-929:

I am not only of the view that the onus lay instead on the applicant to prove distinctiveness within subsection 12(2), but I also think that it was a very heavy onus given the nature of the mark “Canadian”. There are various authorities to the effect that where one must prove that a normally descriptive word has acquired a secondary meaning so as to make it descriptive of a particular product, the onus is indeed heavy: see, for example, The Canadian Shredded Wheat Co., Ld. v. Kellogg Co. of Canada Ld. et al., (1938), 2 D.L.R. 145 at pp. 151-2, 55 R.P.C. 125, at page 142 (P.C.); J.H. Munro Limited v. Neaman Fur Company Limited, [1946] Ex. C.R. 1, at pages 14-15; 5 Fox Pat. C. 194, at page 208. In my view, this is particularly true where the word is one such as “Canadian” which is first and foremost, legally and factually, an adjective describing any citizen of this country, and more particularly for present purposes any product of any sort having its point of origin in this country. As used in conjunction with the word “beer” it is capable of describing any such malt beverage produced in Canada by any brewer. The onus, as I have noted above, is on the applicant for registration of such a mark to demonstrate clearly that it has become so distinctive of his product that it has acquired a secondary meaning which would not, vis-à-vis the relevant public, normally be confused with the primary meaning of the word.

The Federal Court of Appeal found that Strayer J. was “entirely right” in this passage.[20]

[53]      Although no case suggests otherwise, I think it is salutary to confirm that the standard of proof under subsection 12(2), as in other civil proceedings, is proof on a balance of probabilities. The term “heavy onus” would appear to be directed to the exceptional aspect of subsection 12(2). Subsection 12(2) is an exception to non-registrability of a trade-mark under paragraph 12(1)(a) or (b). In this case, Molson concedes that the term “Export” was clearly descriptive of a quality of beer. However, because of its long use in Canada by Molson—since 1903—it is said to have become distinctive, that is, that its original descriptive connotation had been subordinated in the minds of the public in relation to Molson’s “Export” beer product, such that its secondary or distinctive meaning will dominate.[21] It is because subsection 12(2) is an exception to non-registrability of clearly descriptive terms, that an applicant must provide evidence on an issue that does not arise when a trade-mark has not been a clearly descriptive term. In this case, evidence must be adduced that long use has caused a descriptive word in association with beer to have become distinctive of the Molson’s beer product. If such evidence is provided, it is to be assessed on a balance of probabilities. There is no onus beyond the onus of addressing and satisfying the requirement of subsection 12(2).

[54]      I would add that, contrary to the submission of Labatt, subsection 12(2) does not require demonstrating the elimination of the descriptiveness of a mark. As was stated by Angers J. in Kellogg Company of Canada Ltd. v. Registrar of Trade Marks,[22] it is not to be assumed that something which is descriptive cannot also be distinctive. Angers J. referred to the words of Lord Justice Fletcher Moulton of the Court of Appeal in the English Perfection case:[23]

Much of the argument before us on the part of the opponents and the Board of Trade was based on an assumption that there is a natural and innate antagonism between distinctive and descriptive as applied to words, and that if you can show that a word is descriptive you have proved that it cannot be distinctive. To my mind this is a fallacy. Descriptive names may be distinctive, and vice versa.

Accordingly, what the applicant under subsection 12(2) must show is that the trade-mark it seeks to register, although it may be descriptive, has acquired a dominant secondary or distinctive meaning in relation to the wares or services of the applicant.

3. The Relevant Date for Determining Distinctiveness under Subsection 12(2)

[55]      This issue assumes some importance because depending upon whether the relevant date is the date of application for a registration, date of filing of the opposition or the date of the Registrar’s decision, there is either no evidence, minimal evidence, or more evidence of use of the term “Export” in association with beer in Ontario and Quebec by others than Molson.

[56]      Subsection 12(2) is clear. To be registrable, the date on which the distinctiveness of a mark must be established by reason of long use in Canada is “at the date of filing of an application for its registration”. Some different dates appear in the legislation and the jurisprudence—the date of bringing the validity of a registration into question (paragraph 18(1)(b)) or the date of determination by the Registrar).[24] Nonetheless, I am of the opinion that the only relevant date, in so far as an application involving subsection 12(2) is concerned, is the date of filing the application for the trade-mark.

[57]      I am in complete agreement with Strayer J. (as he then was) in Carling Breweries Ltd. v. Molson Companies Ltd.[25] where he stated at pages 926-927:

I am aware that in E. & J. Gallo Winery v. Andres Wines Limited, [1976] 2 F.C. 3 (C.A.), at page 7; 25 C.P.R. (2d) 126, at page 130 it was said by Thurlow J. (as he then was), for the Court of Appeal that the material time for the purposes of an opposition based on para. 37(2)(d) “that the trade mark is not distinctive” is the date of the filing of the opposition. This appears to have been obiter dicta, however, as he goes on to say that in that case it did not matter which date was chosen. Furthermore, as it relates to paragraph 37(2)(d) and not paragraph 37(2)(b), I do not think it is determinative in the present case. Where registrability depends on the criterion in subsection 12(2) that the mark be “distinctive at the date of filing an application for its registration” I do not see how its distinctiveness at the date of the filing of an opposition should be determinative if there were in fact a difference in its distinctiveness as between the two dates.

I would only add that although Andres Wines [E. & J. Gallo Winery v. Andres Wines Ltd., [1976] 2 F.C. 3 (C.A.)] dealt with paragraph 37(2)(b) [of the Trade Marks Act, R.S.C. 1970, c. T-10] (now 38(2)(b)) and not 38(2)(d), the ground of opposition in this case, I agree with Strayer J. that Thurlow J.’s remarks would appear to be obiter dicta in that he found that it did not matter in that case whether it was the date of application or the date of opposition that was determinative.

[58]      In the case at bar, the learned Trial Judge seems to have made two determinations: first, that Molson’s “Export” mark had been distinctive at the date of the filing of the application for registration; and second, that while the date of opposition was relevant for purposes of the opposition under paragraph 38(2)(d), the issue was moot as there was no change in market conditions between the date of application and the date of opposition. The Registrar appears to have adopted the same two-stage approach.

[59]      I am of the opinion that once it is advertised, there is not a two-stage approach in respect of applications under subsection 12(2). The opposition under paragraph 38(2)(d) and the question of whether a mark has acquired distinctiveness under subsection 12(2) involve the same determination. Indeed, the question of registrability is also part of the same determination because if the mark is found to be registrable by reason of subsection 12(2), such finding will have displaced non-registrability by reason of paragraphs 12(1)(a) or (b). Throughout, the onus is on the applicant to prove distinctiveness. Where an application is based on subsection 12(2), the decision as to whether the mark has become distinctive of the applicant’s wares is as of the date of the filing of the application for registration of a mark.

[60]      Under paragraph 18(1)(b) a registration of a trade-mark is invalid if it is not distinctive at the time proceedings bringing the validity of the registration into question are commenced. Paragraph 18(1)(b) provides:

18. (1) The registration of a trade-mark is invalid if

…

(b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced, or

As I read paragraph 18(1)(b), it applies in cases where there has been a registration granted and subsequently, proceedings are taken to invalidate the registration. Paragraph 38(2)(d) provides for opposition to be filed based on non-distinctiveness. I do not construe the filing of an opposition under paragraph 38(2)(d) to be proceedings bringing the validity of an already registered trade-mark into question under paragraph 18(1)(b). Therefore, the filing of the opposition in this case did not create a second date for the determination of distinctiveness.

4. Whether Distinctiveness Must be Established Throughout Canada

[61]      This issue arises because there was evidence that even before Molson’s application for registration, there was use of the term “Export” in association with beer in Canada other than in Ontario and Quebec, implying that Molson could not claim that the “Export” mark was distinctive of its beer product.

[62]      The Registrar appears to have been of the opinion that because the evidence did not support the conclusion that the word “Export” was distinctive throughout all of Canada, that Molson had not met the test for registration under subsection 12(2). In requiring evidence of distinctiveness throughout Canada, he makes reference to Muffin Houses Inc. v. Muffin House Bakery Ltd.[26]

[63]      Section 19 [as am. by S.C. 1993, c. 15, s. 60] of the Trade-marks Act provides:

19. Subject to sections 21, 32 and 67, the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services.

Section 19 is stated to be subject to section 32. Section 32 provides:

32. (1) An applicant who claims that his trade-mark is registrable under subsection 12(2) or section 13 shall furnish the Registrar with evidence by way of affidavit or statutory declaration establishing the extent to which and the time during which the trade-mark has been used in Canada and with any other evidence that the Registrar may require in support of the claim.

(2) The Registrar shall, having regard to the evidence adduced, restrict the registration to the wares or services in association with which the trade-mark is shown to have been so used as to have become distinctive and to the defined territorial area in Canada in which the trade-mark is shown to have become distinctive.

[64]      The legislation appears to contemplate a general registration throughout Canada, subject, in certain circumstances, to restriction by the Registrar to defined territorial areas where the evidence only supports distinctiveness having been acquired in those areas. In Great Lakes Hotels Ltd. v. The Noshery Ltd.[27], Cattanach J. addressed the issue in the following words:

I think that a trade mark is distinctive within the meaning of the definition of distinctive in section 2(f) if the mark actually distinguishes the wares and services of its owner from the wares or services of others in a particular restricted area of Canada.

In reaching this conclusion, I am influenced by section 31(2) of the Trade Marks Act which authorizes the Registrar of Trade Marks to restrict the registration of a trade mark to the wares or services in association with which the trade mark is shown, by evidence furnished to the Registrar under subsection (1) of section 32, to have been so used as to have become distinctive and also authorizes the Registrar to restrict the registration to the defined territorial area in Canada in which the trade mark is shown thus to have become distinctive.

It follows irrefutably therefrom that a trade mark is distinctive if it actually distinguishes the wares or services of its owner from those of others in a restricted area of Canada and need not distinguish those wares throughout Canada or from those of all other persons in Canada.

[65]      The “throughout Canada” requirement is dealt with in a number of cases before the Trade-marks Opposition Board in which the finding of Cattanach J. in Great Lakes was disapproved or distinguished. In Robinson’s Camera Centre Ltd. v. Black Photo Corp.,[28] Chairman Partington states:

I disagree with the applicant’s submission which, in my opinion, is contrary to the over-all basic policy of the Trade-marks Act to grant registrations to registrants which are national in scope, whereby the owner has the right to the exclusive use of the registered trade mark throughout Canada in association with the wares and services covered in the registration. In general, a trade mark must either distinguish or be adapted to distinguish the wares or services of the owner thereof in all parts of the country in order to be distinctive within the scope of the definition of “distinctive” as set forth in s. 2 of the Act.

[66]      In Morris et al. trading as Happy Cooker Catering v. Lisko,[29] the Chairman stated:

Rather, the basic policy underlying the Trade Marks Act contemplates the granting to registrants of registrations which are national in scope, giving the owner thereof the right to the exclusive use thereof throughout Canada in association with the wares or services covered by the registration (s. 19 of the Act). Further, the fact that s. 31(2) specifically empowers the registrar to grant a territorial registration only in a particular circumstance supports the conclusion that the basic philosophy and intention of the Trade Marks Act is the granting of national registrations, as opposed to registrations which are limited territorially in Canada.

Great Lakes was also thought to be distinguishable by the hearing officer in DeCaria Hair Studio Ltd. v. Massimo De Berardinis et al. trading as De Berardinis,[30] on the basis that it applied only to cases under subsection 12(2).

[67]      I accept that the Registrar and the Trade-marks Opposition Board have expertise and that their opinions on the interpretation of the Trade-marks Act are entitled to some deference. The scheme of section 32 in its entirety would seem to support the view that territorially restricted trade-marks are limited to cases to which subsection 12(2) or section 13 apply. Subsection 32(2) does not appear to be an independent provision applicable to all trade-mark applications, but rather only to those to which subsection 32(1) applies, namely applications under subsection 12(2) or section 13. The Trial Division Judge [at page 8] was correct in holding that “[a] trade-mark is registrable as long as it distinguishes those wares in a restricted area in which registration is sought” but I would limit the statement and the application of Great Lakes on this issue to applications under subsection 12(2) or section 13 of the Trade-marks Act. Accordingly, I have no difficulty in applying subsection 32(2) and the Great Lakes approach to the present case, so that if Molson can establish distinctiveness in Ontario and Quebec of its “Export” mark, it will be entitled to registration under subsection 12(2).

5. Whether Exclusivity is Essential to Prove Distinctiveness

[68]      Having determined that the relevant date for determining distinctiveness is the date of filing the application for registration and that such application may be restricted to a defined territorial area—Ontario and Quebec in this case, this question becomes moot. Labatt conceded that as of the date of filing the application, there was no other use of the word “Export” in association with brewed alcoholic beverages in Ontario and Quebec.

[69]      I would add, however, that while in this case Molson did make exclusive use of the word “Export” in Ontario and Quebec at the material time, I do not agree with the submission of counsel for Labatt that an applicant must show itself to be the sole user of the mark to demonstrate distinctiveness. I have read the authorities put forward by the appellant in support of this proposition[31] and have not found in them any clear statement that proof of exclusive use of a trade-mark by an applicant is required to demonstrate distinctiveness for the purpose of registration. While use of the same mark by others in association with similar wares is relevant in determining whether a mark is in fact distinctive, I agree with counsel for Molson that exclusivity is not essential in proving distinctiveness.

[70]      The definitions of “distinctive” and “trade-mark” in the Trade-marks Act provide:

2. …

“distinctive”, in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them;

…

“trade-mark” means

(a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others,

(b) a certification mark,

(c) a distinguishing guise, or

(d) a proposed trade-mark;

There is no reference to exclusive use in either definition. In H. G. Fox, Canadian Law of Trade Marks and Unfair Competition (3rd ed., 1972) Toronto: Carswell, the learned author states at page 36:

The extent to which a tribunal will be influenced by a claim of distinctiveness must depend upon all the circumstances including the area within which and the time during which such distinctiveness in fact can be predicated of the mark in question.

I agree with Mr. Fox that distinctiveness will depend upon all the circumstances. While exclusive use of a mark may be compelling evidence of its distinctiveness, I am of the opinion that exclusive use is not a requirement to prove distinctiveness.

6. Assessment of the Decision of the Trial Division Judge

[71]      The learned Trial Division Judge made a number of legal findings. She found that the onus was on the applicant for registration under subsection 12(2). Because she viewed the term “Export” as normally descriptive of a type of beer, she found [at page 7] that the applicant “must discharge itself of the very heavy burden in order to establish that its trade-mark is distinctive.” I interpret her reference to “very heavy burden” as a burden, on a balance of probabilities, of demonstrating acquired distinctiveness of a descriptive mark. I can find no error in these determinations of the learned Judge.

[72]      She then found that it was not necessary for an applicant to demonstrate exclusivity of use of a term in order to prove distinctiveness. Again, there was no other use of the term “Export” in association with beer in Ontario and Quebec except for Molson up to the date of the filing of its application for registration. Therefore, strictly, it was not necessary to decide this issue. However, I am in agreement with the learned Judge’s disposition of it.

[73]      She then went on to find that a trade-mark is registrable if it is distinctive in a restricted area in which the registration is sought. Again, as there was no other use of the term “Export” in association with beer in Ontario and Quebec, I agree with her findings in respect of a subsection 12(2) application, of which this was one.

[74]      She then went on to consider the evidence before her. She accorded little weight to the Pye survey. Indeed, she concluded that this evidence could not, of itself, establish Molson’s claim to registration under subsection 12(2). According little weight to the Pye survey was consistent with the Registrar’s treatment of it.

[75]      What caused the learned Judge to allow the appeal was:

(1) the evidence of sales and advertising expenditures before her, that was not before the Registrar; and

(2) the position taken by Labatt before the Registrar in respect of the Oland application to register the mark “Export” in association with its product.

[76]      In coming to her decision, she drew conclusions from this evidence. I think that this Court is in as good a position as she was to determine what conclusions should be drawn from this evidence. In E. & J. Gallo Winery v. Andres Wines Ltd., supra, Thurlow J. stated at page 6:

As there was no cross-examination it seems to me that, save in so far as a sound objection has been shown, they are receivable and are entitled to be considered for what they do say and what inferences may properly be drawn from them and that as they are in no way contradicted, this court is in as favourable a position as the learned Trial Judge to determine what conclusions should be drawn from what they say as well as from the failure of the appellant to produce additional support for its attacks.

[77]      There is no doubt that Molson had sold significant volumes of its “Export” product in Ontario and Quebec. There is also no doubt that considerable amounts have been expended for advertising the product.

[78]      In Standard Coil Products Can. Ltd. v. Standard Radio Corp., supra, evidence of sales and advertising expenditures were found to be significant. However, that evidence was read in conjunction with the evidence of customers, all of whom deposed that the word “Standard” was used as a trade-mark to distinguish the television tuners of Standard Coil Products Can. Ltd. in that case. There was also evidence that the word “Standard” was the dominant word on packages, cartons and advertisements and in trade magazines for the television tuners of Standard Coil .

[79]      By contrast, in the present case, the evidence is that the word “Export” never appears alone but only in conjunction with the word “Molson” or “Molson’s” on bottles or cartons.[32] On the bottles, the words “Molson” or “Molson’s” and “Export” are of the same size and of the same appearance. Therefore, I do not see how extensive sales or advertising expenditures prove that the word “Export” alone is distinctive of Molson’s beer. I have no doubt that the term “Molson Export” is distinctive but here Molson is attempting to separate the two words by calling Molson a “house-mark” and “Export” a “trade-mark”. I fail to see the significance of the distinction. In all the advertising evidence, the effort is to present the words “Molson Export” and not “Export” alone.

[80]      The learned Judge found that the evidence of two Molson senior executives that there was public recognition of the term “Export” in association with the Molson product was consistent with the Pye survey. I do not see how self-serving evidence of Molson executives or the Pye survey which the learned Judge found was flawed, have significant probative value. As to the Pye survey, she found that it contained numerous flaws:

(a) absence of evidence as to the manner in which the questionnaires were completed;

(b) the limited locations where the surveys were conducted in Ontario, thereby not providing any indication of distinctiveness elsewhere in Ontario or anywhere in Quebec;

(c) absence of control questions;

(d) weakness of word association surveys compounded by artificial stimuli introduced into the questions to elicit the type of answers sought by Molson;

(e) ambiguity in the interpretation of the survey.

In terms of their opinions of the perception in the minds of the relevant public about the term “Export” in association with beer, the probative value of the Molson executives’ evidence is minimal. To accord little weight to this evidence is consistent with the opinion of the Supreme Court in Battle Pharmaceuticals v. The British Drug Houses Ltd.[33] that:

We agree that a witness may not state his opinion as to the effect the use of a mark would have, or would be likely to have, on the mind of someone else because, as stated in the Proctor and Gamble case (1), that is the very point to be determined in the proceedings, but that he may testify as to the effect the use of the mark in dispute would have on his own mind. That is one of the circumstances to be considered by the court.

[81]      As I have said, I have no difficulty accepting that the words “Molson Export” are distinctive of a Molson product. However, the evidence does not lead to the conclusion that the term “Export” of itself is distinctive of the product.

[82]      The learned Judge treated the Oland application to trade-mark the word “Export” as an admission against Labatt’s interest. Labatt attempted to distance itself from its position respecting the Oland application. However, all the correspondence to the Trade-marks Office was written on Labatt letterhead and signed by Labatt employees. The affidavits filed before the Registrar in the Oland application were those of Labatt employees. The Oland application is clearly attributable to Labatt.

[83]      However, that is not the issue. The question is whether Labatt’s apparently inconsistent positions should be held against it to prove, in favour of Molson, a fact that Labatt is now trying to deny. In other words, is the fact that Oland is seeking the same kind of recognition of the term “Export” with respect to one of its products, evidence that the term “Export” in relation to Molson’s product has acquired distinctiveness. In my opinion, the answer is no. As the Registrar pointed out, distinctiveness is to be determined from the point of view of an everyday user of the wares in question and that the trade-mark must be considered in its entirety and as a matter of first impression. In the circumstances here, the fact that Oland has made an application to trade-mark the word “Export” is irrelevant to the Molson application.

[84]      The Oland application also raises the question of the credibility of the Labatt opposition to the Molson application when it has made the same type of application. On the facts of this particular case, I do not think that the Oland application discredits Labatt’s opposition in the Molson proceedings. The obvious inference to draw is that the Oland 1990 application for registration of the word “Export” was a response to the earlier Molson application. Oland was trying to protect its use of the term “Export” in the face of the Molson application. This is made clear by the fact that it repeatedly wrote to the Registrar requesting postponement of proceedings on its application pending the outcome of the Molson application.

[85]      Having regard to the fact that little weight can be attributed to the Pye survey and the Molson executives’ evidence relative to public recognition of the term “Export” in association with Molson’s product, that the sales and advertising evidence does not prove that the term “Export” alone is distinctive of the Molson product and that the Oland application should not have been treated as an admission against Labatt’s interest by the learned Judge, I must conclude that the additional evidence before the learned Judge was not such that the original decision of the Registrar should have been disturbed. Applying the reasonableness simpliciter standard of review to the decision of the Registrar and having regard to the fact that the additional evidence adduced in the Trial Division would not have materially affected his findings of fact or exercise of discretion, the learned Judge should have allowed the Registrar’s decision to stand.

[86]      In coming to this conclusion, I do not say that “Export” may not actually be a well-known or a famous term in association with a Molson beer product. However, by reason of subsection 32(1), a decision under subsection 12(2) must be supported by evidence satisfactory to the Registrar. Where the evidence does not prove, on a balance of probabilities, acquired distinctiveness of a descriptive term under subsection 12(2) to the satisfaction of the Registrar, the application cannot be allowed.

[87]      The appeal will be allowed with costs in this Court and in the Trial Division.

Létourneau J.A.: I agree.

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