A-605-79
Plough (Canada) Limited (Appellant) (Respond-
ent)
v.
Aerosol Fillers Inc. (Respondent) (Appellant)
Court of Appeal, Thurlow C.J., Heald and Urie
JJ.—Ottawa, September 24 and 25, October 20,
1980.
Trade marks — Expungement — Appeal from decision of
Trial Division directing expungement of the registration of the
mark PHARMAco — Evidence constituting "use" — Failure to
describe what is referred to as use and to state facts as
required by s. 44(3) of the Trade Marks Act — Failure to
furnish such evidence within the meaning of s. 44(3) — Appeal
dismissed — Trade Marks Act, R.S.C. 1970, c. T-10, s. 44.
This is an appeal from a judgment of the Trial Division
which allowed an appeal from a decision of the Registrar of
Trade Marks under section 44 of the Trade Marks Act and
directed the expungement of the appellant's registration of the
trade mark PHARMAco. With respect to the affidavit filed by
the appellant in response to the Registrar's notice pursuant to
subsection 44(1) of the Act, the Trial Judge held that the bare
statement it contained to the effect that the appellant "was ...
using" and "is ... using" the trade mark in question is a
conclusion of law which the affiant was not entitled to make.
The Trial Judge also held that the affidavit was insufficient in
not showing use of the trade mark prior to the date of the
section 44 notice. Counsel for appellant submits that the affida
vit meets the requirements of the Act and that on what is
contained in it, the Registrar could only conclude that it did not
appear that the trade mark was not in use in Canada.
Held, the appeal is dismissed. Subsection 44(1) requires an
affidavit not merely stating but "showing", i.e. describing the
use made of the trade mark within the meaning of the defini
tion of "trade mark" in section 2 and of "use" in section 4 of
the Act. The purpose is to inform the Registrar in detail of the
prevailing situation so that he and the Court on appeal can
form an opinion and apply the substantive rule set out in
subsection 44(3). The affidavit does not comply with the Regis
trar's notice in that it does not purport to deal with and
distinguish between pharmaceutical preparations in association
with which it is said to be used and in association with which it
is not used. It fails to describe what is referred to as use of the
trade mark, i.e. in the case of wares, use of the kind referred to
in section 4. It does not say what is being done or in what sense
the word is used. What is contained in it cannot be character
ized as a conclusion of law, since the affidavit is ambiguous as
to what it states. As it does not state the facts required by
subsection 44(1), and by the Registrar's notice under same, the
situation is one in which there has been a "failure to furnish
such evidence" within the meaning of subsection 44(3). It is a
failure which justifies the conclusion that it appears therefrom
that the trade mark is not in use in Canada.
Broderick & Bascom Rope Co. v. Registrar of Trade
Marks (1970) 62 C.P.R. 268, referred to. John Labatt
Ltd. v. The Cotton Club Bottling Co. (1976) 25 C.P.R.
(2d) 115, referred to.
APPEAL.
COUNSEL:
John C. Osborne, Q.C. and Rose-Marie Perry
for appellant.
Samuel Godinsky, Q.C. and Richard Uditsky
for respondent.
SOLICITORS:
Gowling & Henderson, Ottawa, for appellant.
Greenblatt, Godinsky, Uditsky, Montreal, for
respondent.
The following are the reasons for judgment
rendered in English by
THURLOW C.J.: This is an appeal from a judg
ment of the Trial Division [[1980] 2 F.C. 338]
which allowed an appeal from a decision of the
Registrar of Trade Marks under section 44' of the
Trade Marks Act, R.S.C. 1970, c. T-10, and
directed the expungement of the appellant's regis
tration, number 115,881, of the trade mark
PHARMACO.
' 44. (1) The Registrar may at any time and, at the written
request made after three years from the date of the registration
by any person who pays the prescribed fee shall, unless he sees
good reason to the contrary, give notice to the registered owner
requiring him to furnish within three months an affidavit or
statutory declaration showing with respect to each of the wares
or services specified in the registration, whether the trade mark
is in use in Canada and, if not, the date when it was last so in
use and the reason for the absence of such use since such date.
(2) The Registrar shall not receive any evidence other than
such affidavit or statutory declaration, but may hear represen
tations made by or on behalf of the registered owner of the
trade mark or by or on behalf of the person at whose request
the notice was given.
(3) Where, by reason of the evidence furnished to him or the
failure to furnish such evidence, it appears to the Registrar that
The mark was registered in 1958 as the trade
mark of Pharmaco (Canada) Ltd., for use in asso
ciation with pharmaceutical preparations and was
transferred to the appellant in 1973. On Septem-
ber 7, 1978, at the request of the respondent made
on July 6, 1978, a notice in the terms of subsection
44(1) of the Act was given by the Registrar to the
appellant requiring the appellant to furnish within
three months an affidavit or statutory declaration
showing with respect to each of the wares or
services specified in the registration, whether the
trade mark was in use in Canada, and if not, the
date when it was last in use and the reason for the
absence of such use since such date.
To this, the appellant responded with an affida
vit of its president stating:
2. THAT Plough (Canada) Limited is currently using and was
on September 7, 1978 using the registered trade mark PHAR-
MAco in the normal course of trade in Canada in association
with pharmaceutical preparations.
The Registrar's decision was given by a letter
which stated:
By reason of the evidence adduced, it appears that the above
registrered [sic] trade mark is in use in Canada in association
with the wares and services specified in the registration.
Accordingly, I have decided that the registration ought not to
be amended or expunged.
On appeal to the Trial Division, however, the
learned Trial Judge held [at page 342] that "the
bare allegation in paragraph 2 of the affidavit that
the respondent 'is ... using' and 'was ... using the
registered trade mark PHARMACO' are conclusions
of law which the affiant was not entitled to make
the trade mark, either with respect to all of the wares or
services specified in the registration or with respect to any of
such wares or services, is not in use in Canada and that the
absence of use has not been due to special circumstances that
excuse such absence of use, the registration of such trade mark
is liable to be expunged or amended accordingly.
(4) When the Registrar reaches a decision as to whether or
not the registration of the trade mark ought to be expunged or
amended, he shall give notice of his decision with the reasons
therefor to the registered owner of the trade mark and to the
person at whose request the notice was given.
(5) The Registrar shall act in accordance with his decision if
no appeal therefrom is taken within the time limited by this Act
or, if an appeal is taken, shall act in accordance with the final
judgment given in such appeal.
and swear to as a fact", that this alone would
effectively conclude the appeal but that the affida
vit was also insufficient in not showing use of the
trade mark prior to September 7, 1978, the date of
the section 44 notice, and that there was no evi
dence before the Registrar to justify his decision.
The learned Judge therefore allowed the appeal
and directed expungement of the registration.
The position taken by counsel for the appellant
on the appeal to this Court, as I understood it,
was, basically, that the material in the affidavit
was sufficient to satisfy the requirements of the
Act, that it was in accordance with long estab
lished practice in the Trade Marks Office and that
the Trial Judge erred in holding it insufficient. He
also contended that the Trial Judge misconceived
the issue to be decided and did not address the
question posed by subsection 44(3) whether it was
open to the Registrar to conclude on the affidavit
that the trade mark was not in use in Canada. His
submission on this point was that, on what is
contained in the affidavit, the Registrar could only
conclude that it did not appear that the trade mark
was not in use in Canada.
The purpose and scope of section 44 have been
discussed in a number of cases, including Re
Wolfviile Holland Bakery Ltd. 2 , The Noxzema
Chemical Co. of Canada Ltd. v. Sheran Manufac
turing Ltd. 3 , and Broderick & Bascom Rope Co.
v. Registrar of Trade Marks 4 . It is not necessary
to reiterate what is said in those cases as in my
view the analyses of section 44 made in them
clearly and adequately expound the law. The pur
pose is capsulated in the following passage from
the reasons of Jackett P. (as he then was) in
2 (1965) 42 C.P.R. 88.
3 [1968] 2 Ex.C.R. 446, at p. 453.
4 (1970) 62 C.P.R. 268.
Broderick & Bascom Rope Co. v. Registrar of
Trade Marks [at pages 276-277]:
What s. 44 contemplates is a simple procedure for clearing out
the Registrar entries of trade marks which are not bona fide
claimed by their owners as active trade marks. Clearly, all the
Registrar can do is decide whether the evidence supplied by the
registered owner or his failure to supply evidence makes it
appear that the trade mark is used or that there are excusing
circumstances. That is the question that s. 44 opens up. The
Registrar's decision is not a decision that finally determines
anything except whether the entry is liable to be expunged
under s. 44 or not.
Reliance was, however, placed on an expression
used by Jackett P. in the Noxzema case as justify
ing what, it was said, had since become an estab
lished practice in preparing affidavits in answer to
section 44 notices. In that case, Jackett P. in
paraphrasing the requirements of section 44 said
[at page 453]:
To put it another way, section 44 provides a means for
clearing from the Registry registrations for which the owners
no longer assert that there is any real foundation. An owner can
avoid having any action taken against his registration by either
a mere declaration of user or, if he admits non-user, by any
reasonable explanation therefor.
I do not think that the use in this context of the
expression "a mere declaration of user" is any
thing but a way of putting a name on what is
required. It is by no means a definition of what is
required to show user. In my opinion, the expres
sion used by Jackett P. is not fairly open to an
interpretation that what is required to establish
use for the purposes of section 44 is a mere bald
statement that the trade mark is used or has been
used 5 . The expression is perfectly consistent with
what the statute requires and it is to the statute
that one ought to look to ascertain what the owner
of the registration is required to show by affidavit
or declaration, remembering always that the object
of the procedure is to clear the Register of entries
of trade marks which are not bona fide claimed by
their owners as active trade marks. The fact that
5 Compare the comments of Cattanach J. in John Labatt
Ltd. v. The Cotton Club Bottling Co. (1976) 25 C.P.R. (2d)
115 at p. 122.
practice in the Trade Marks Office has sanctioned
or tolerated answers of the kind here in question,
or even less informative ones, while suggesting a
possible reason or explanation for the deficiency in
the affidavit put before the Registrar in the
present instance affords, in my opinion, no basis
whatever for departing from the letter and spirit of
the law as expressed in section 44 in adjudging its
sufficiency and effect.
What subsection 44(1) requires is an affidavit or
statutory declaration not merely stating but
"showing", that is to say, describing the use being
made of the trade mark within the meaning of the
definition of "trade mark" in section 2 and of
"use" in section 4 of the Act. The subsection
makes this plain by requiring the declaration to
show with respect to each of the wares and services
specified in the registration whether the trade
mark is in use in Canada and if not the date when
it was last used and the reason for the absence of
such use since that date. The purpose is not merely
to tell the Registrar that the registered owner does
not want to give up the registration but to inform
the Registrar in detail of the situation prevailing
with respect to the use of the trade mark so that
he, and the Court on appeal, can form an opinion
and apply the substantive rule set out in subsection
44(3). There is no room for a dog in the manger
attitude on the part of registered owners who may
wish to hold on to a registration notwithstanding
that the trade mark is no longer in use at all or not
in use with respect to some of the wares in respect
of which the mark is registered.
Turning to the affidavit filed by the appellant in
response to the Registrar's notice, it is first to be
observed that it does not comply with the Regis
trar's notice in that it does not purport to deal with
and distinguish between pharmaceutical prepara
tions in association with which it is said to be used
and pharmaceutical preparations in association
with which it is not used. It says nothing about
which of this broad and ill-defined class it speaks
and it is not shown with respect to each of the
wares specified in the registration whether the
trade mark was in use in Canada and, if not, the
date when it was last so in use and the reason for
the absence of such use since such date. It may be
doubted that the registrant ever was entitled to
registration in respect of so wide a class of wares
but, be that as it may, because the registration
purports to cover so broad a class is no justifica
tion for not distinguishing in the affidavit by
naming the preparations in respect of which it is
said to be in use and giving the information
required by the subsection and the notice. The
failure to do this, the apparent studied effort to
avoid giving what the notice required casts doubt
on the sincerity of what is said. What is said in the
affidavit is consistent with a minor use of some
sort in association with a single pharmaceutical
preparation and with such a use being put forward
as use in association with a class that embraces a
diverse host of wares. Further, the failure to
describe what is referred to as use of the trade
mark leaves in doubt the meaning of what is said.
A deponent who does not describe what he refers
to as use of the trade mark may well be saying in
ordinary language that he is using the trade mark
when in fact all that is happening is that it appears
in advertising of the business of the registrant.
Regarding that as the meaning of what he is
saying, the deponent might rest his conscience in
the belief that what the affidavit says is, in a sense,
true and justifiable. But the use of which evidence
is required is trade mark use, in the case of wares,
use of the kind referred to in section 4 by the mark
being marked on wares or their packages or
associated with wares at the time of their sale or
delivery in the normal course of trade and for the
purpose of distinguishing the wares as those manu
factured or sold by the owner of the trade mark
from the goods of others. The affidavit does not
show that the word is used in that sense since it
does not say what is being done or in what sense
the word is used.
With respect, I do not think, as did the learned
Trial Judge, that what is in the affidavit should be
characterized as a conclusion of law. In my view,
the affidavit is ambiguous in what it states. It is
capable of being read as a pure statement of fact
in a sense that is not relevant. It is also capable of
being read as a statement in a sense that is rele
vant but which is a statement of a conclusion of
mixed fact and law. Neither the Court nor the
Registrar, however, is bound by or interested in
the deponent's opinion or conclusion that what is
going on is use of the trade mark within the
meaning of the statute. The statute requires the
facts to be shown and when that has been done the
Registrar, and the Court in its turn, will determine
whether the facts stated show use. In my view,
therefore, in whichever of its two senses the affida
vit here in question is read, it does not satisfy the
requirements of subsection 44(1) and it is not
evidence of use within the meaning of the statute.
Moreover, like the affidavit considered in
American Distilling Co. v. Canadian Schenley
Distilleries Ltd. 6 , the affidavit must be considered
from the point of view of what it does not say. It
seems incredible that a registered owner who up to
the time of receiving a notice under section 44 has
in fact been selling a number of pharmaceutical
preparations in association with the trade mark
would not say so but would seek to answer the
demand of the notice with a bare statement that
the registrant was currently using the trade mark
in the normal course of trade in Canada and was
so using it in association with pharmaceutical
preparations on the date of the notice. I agree with
the submission of counsel for the respondent that
instead of stating the facts required by the notice
the affidavit seeks to hide them. Further, the fact
that the appellant, in response to the notice of
appeal from the Registrar's decision, did not file,
as it might have, a further affidavit describing the
use made of the trade mark, if indeed there was
any use of the relevant kind, lends support to the
inference that in fact the trade mark was not in
6 (1979) 38 C.P.R. (2d) 60.
use as a trade mark either in the period leading up
to the notice or subsequently.
The case, in my view, therefore, falls to be
decided on the same basis as if no affidavit had
been filed by the appellant for it is not the filing of
an affidavit but what it shows that matters under
subsection 44(3). The filing of an affidavit that
does not disclose the facts is an instance of "the
failure to furnish such evidence" within the mean
ing of that subsection and that, in my view, is the
result of the filing of the affidavit here in question.
It was accordingly not open to the Registrar to
conclude as he did, that by reason of the evidence
adduced it appeared that the trade mark was in
use in Canada in association with the wares and
services specified in the registration. Indeed, coun
sel for the appellant did not dispute that that was
the situation. He did submit, however, that the
affidavit was effective to prevent a finding, in the
terms of subsection 44(3), that it appeared that
the trade mark was not in use in Canada within
the meaning of the subsection. In my view that
submission is met by the conclusion that as the
affidavit does not state the facts required by sub
section 44(1) and by the Registrar's notice under
that subsection, the situation is one in which there
has been a "failure to furnish such evidence"
within the meaning of subsection 44(3). It is a
failure which in the circumstances, in my view,
justifies the conclusion that it appears therefrom
that the trade mark is not in use in Canada within
the meaning of the subsection, that the registration
is therefore liable to be expunged and that it ought
to be expunged.
It was submitted that under subsection 44(3)
even when a trade mark registration is liable to be
expunged there is still a discretion to be exercised
by the Registrar to expunge or not expunge the
registration. I have some doubt that the Registrar
can properly decline to expunge a registration that
is "liable" to expungement under subsection 44(3)
in the absence of evidence of special circumstances
that excuse absence of use within the meaning of
the subsection. However, assuming that a discre-
tion to expunge or not to expunge arises from the
presence in the subsection of the word "liable" it is
a discretion which, in the circumstance of this
case, is exercisable by the Court. As the Registrar
has not purported to exercise it, having been satis
fied, albeit without supporting evidence, that the
trade mark was in use, the case is not one in which
there has been an exercise of discretion by the
Registrar which should be supported unless shown
to have been exercised on a wrong principle. The
discretion, if there is one, is accordingly exercis-
able by the Court under subsection 56(5)' of the
Trade Marks Act.
In my view, there is nothing in the record before
the Court that should lead to an exercise of discre
tion to maintain the registration. There is in my
opinion, no evidence of use in the time the trade
mark was registered and not even evidence of plans
for future use of it as a trade mark by the regis
tered owner.
Before parting with the matter, I should men
tion the affidavit filed by the respondent on the
appeal to the Trial Division. In my view, evidence
submitted by the party at whose instance the
subsection 44(1) notice was sent is not receivable
on the appeal from the Registrar any more than it
would have been receivable before the Registrar.
On this point, I would adopt the view expressed by
Jackett P. in Broderick & Bascom Rope Co. v.
Registrar of Trade Marks (supra) when he said
[at page 279]:
What the applicant relies upon is the dictum that the Court can
be "satisfied that the trade mark is in use". In their context, I
am satisfied that these words refer only to the Court being
satisfied in the same way as the Registrar might have been
satisfied at the earlier stage — that is, by evidence adduced by
the registered owner. The learned President did not have to
deal there with the question whether third parties could come
in with evidence and there is nothing in what he said to suggest
that he addressed his mind to this possibility.
The applicant also relies on s. 55(5), which provides that "On
the appeal evidence in addition to that adduced before the
'56. ...
(5) On the appeal evidence in addition to that adduced
before the Registrar may be adduced and the Court may
exercise any discretion vested in the Registrar.
Registrar may be adduced". This cannot, however, extend to
authorizing evidence on issues that are not before the Court on
the appeal. When, therefore, the sole question is whether the
registered owner's evidence makes it "appear" to the Court that
there is user, any other evidence on the question of user is
obviously not relevant to that issue.
I have accordingly not considered the affidavit
of the respondent and 1 think it is apparent from
the lack of any reference to it in his reasons that
the learned Trial Judge disregarded it as well, and
quite probably for the same reason.
I should also mention that in reply counsel for
the appellant submitted that if the Court should be
of the view that the affidavit was insufficient the
matter should be referred back to the Registrar
with a direction to permit the appellant to file
further evidence. Assuming that such a direction
could be given 8 , in my view it would be wrong to
send the matter back to give such a further oppor
tunity either before the Registrar or the Trial
Division when the appellant had three months in
the first instance before the Registrar and ample
time within the Rules of this Court thereafter to
file evidence and did not do so. I am not unaware
of the representations made to the Court that it
was the practice in the Trade Marks Office to
accept as sufficient affidavits such as that filed by
the appellant, but I know of no reason why the
appellant or the counsel who acted for it at the
material time and who was presumably familiar
with the statute should have assumed that the
Court would not require more. There is certainly
nothing in the view expressed by Cattanach J. in
John Labatt Ltd. v. The Cotton Club Bottling Co.
(supra), that would have encouraged such a
course. Moreover, there is nothing in the record
before the Court which indicates that there is
further material evidence which could be given by
the appellant.
8 See Re Wolfville Holland Bakery Ltd. (supra) per Thorson
P. at p. 91. "In my opinion, the Registrar was right in refusing
to grant the requested extension. He could have granted it, if
the period of three months fixed in the notices had expired, if
he had not yet made his decision, but he had no authority to do
so after he had made his decision. This left an appeal to this
Court as the only course open to the appellant."
I would dismiss the appeal with costs.
RoAco l:lconcur.
Uu/a I0000ur
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