Havana House Cigar & Tobacco Merchants Ltd. v. Skyway Cigar Store
T-2144-96
Teitelbaum J.
19/5/98
38 pp.
Action for declaration of trade mark infringement-Defendant requesting order to strike registration of trade marks by Havana House on grounds: (1) not entitled to secure registration pursuant to Trade-marks Act, s. 16; (2) registration invalid since trade mark not distinctive of plaintiff company at time proceedings to expunge instituted-Havana House importing, distributing, selling tobacco, tobacco products-Purporting to own trade marks "Hoyo de Monterrey de José Gener Habana", "Monte Cristo Habana", "Montecristo", "Romeo y Julieta" in association with cigar products-Selling these cigars in Canada to other retailers, wholesalers since March 28, 1988-Havana House executing exclusive distributor agreement with Cubatabaco to distribute cigars in Canada-Cubatabaco owning trade marks "H. Upmann Habana", "H. Upmann Habana & Design"-Defendant importing, retailing tobacco, tobacco products-House of Horvath wholesale supplier of cigar, tobacco products-Receiving cigar products through Havana House-Cigars sold in Canada since at least as early as 1960s-Since 1995, Havana House placing rubber stamp with words "exclusive distributor" on bottom of cigar boxes receives-Prior to that date, no notice on boxes Havana House either owner of marks or exclusive distributor of cigars-In December 1995, defendant ordering full line of cigar products from Horvath-Horvath unable to supply defendant so defendant sought out other wholesale dealers-In July 1996 Havana House refusing to supply tobacco products to defendant because defendant buying from other sources-Since August 1996 defendant buying tobacco products, including those bearing trade marks in issue, from outlets in Cuba-In August 1996 Havana House advised defendant to cease importation of tobacco products bearing trade marks in issue-Trade-marks Act, s. 57 providing Federal Court having exclusive jurisdiction to expunge registration of trade mark on application of "person interested"-As person charged with infringement or passing off goods as those of another, defendant person interested-Given presumption of validity of registration, onus on defendant to show trade marks should be expunged-Main issue whether Havana House "used" trade marks-"Use" defined in Trade-marks Act, ss. 2, 4(1): trade mark deemed to be used in association with wares if, at time of transfer of property in or possession of wares, in normal course of trade, marked on wares themselves or on packages in which distributed, or in any other manner so associated with wares that notice of association then given to person to whom property or possession transferred-Concerning "normal course of trade", use in Canada if any part of chain taking place in Canada-S. 16(1) providing first person to use trade mark in Canada acquiring right to registration-Distributor can acquire rights to trade mark of foreign company if used mark as "use" defined in s. 4 and if mark distinctive of distributor-Havana House acting as distributor for other plaintiffs and Cuban state-owned tobacco manufacturers-Trade marks registered by Havana House marks bearing brand names of cigars-Cigars manufactured, sold in Cuba bearing marks in question-Also exported by Habanos S.A. to many countries, including Canada-Havana House not "using" relevant trade marks in Canada, not entitled to register them-Trade marks not conveying to consumer that distributor owner of trade marks, but clearly indicating manufacturer as source of marks-Havana House distributing products in Canada for benefit of Cuban trade mark owner-Not showing used trade marks-Havana House not entitled to register trade marks in issue-Alternative ground i.e. Havana House not entitled to trade marks because other parties used trade marks in Canada before Havana House, failing because under Trade-marks Act, s. 17 only previous user may attack registration on ground of prior use-As retailer, defendant not using trade marks within s. 4-Test for distinctiveness whether clear message given to public that wares with which trade mark associated wares of trade mark owner, not those of another party-According to s. 18(1)(b), trade mark registration may be invalidated on basis no longer distinctive at time expungement proceedings launched-Defendant's argument Havana House losing right to marks because widespread use of marks by other traders irrelevant since issue whether marks distinctive under Canadian law-Havana House exclusive distributor of Cuban cigars in Canada-Cigars imported from Habanos S.A., distributed to other distributors, retailers for sale-Any other Cuban cigars available for resale in Canada bought from Cuban stores, transported out of country-Havana House not allowing widespread use by rival traders-Loss of distinctiveness not founded on this argument-Use by Havana House constituting use by foreign entity-Trade marks distinctive of manufacturer's cigars rather than Havana House-Only possible ground upon which Havana House can maintain registration if can prove acquired distinctiveness such that entitled to use them as of November 14, 1996-No evidence message to public that Havana House owner of trade mark-Havana House not acquiring distinctiveness-As no contestable issue, defendant should receive summary judgment-Trade marks "Hoyo de Monterrey de José Gener Habana", "Monte Cristo Habana", "Montecristo", "Romeo y Julieta" declared invalid, ordered expunged from register-Action for infringement of these marks denied-As to infringement of "H. Upmann Habana & Design", necessary facts not available to find no triable issue on any of plaintiffs' grounds of trade mark infringement-No evidence defendant sold product bearing Cubatobaco's trade-mark "H. Upmann & Design"-No evidence of depreciation of goodwill-Plaintiffs not showing no triable issue defendant violated Trade-marks Act, ss. 19, 20, 22-As to action for passing off, plaintiffs not showing no triable issue-While may be open to Court to rule defendant's lack of quality control may damage plaintiffs' goodwill, no evidence defendant engaging in poor quality control methods allowing Court to rule no triable issue-Plaintiff's motion for summary judgment premature-Trade-marks Act, R.S.C., 1985, c. T-13, ss. 2 "use", 4, 7(b),(c),(d), 16(1), 17, 18, 19 (as am. by S.C. 1993, c. 15, s. 60), 20 (as am. by S.C. 1994, c. 47, s. 196), 22, 57-Federal Court Rules, C.R.C., c. 663, R. 432.3 (as enacted by SOR/94-41, s. 5).