T-1674-97
Disney Enterprises Inc. (formerly The Walt Disney Company) (Appellant)
v.
Fantasyland Holdings Inc. and Registrar of Trade-marks (Respondents)
Indexed as: Disney Enterprises Inc.v. Fantasyland Holdings Inc. (T.D.)
Trial Division, Campbell J."Toronto, October 8; Edmonton, November 19, 1998.
Trade-marks — Registration — Appeal from T.M.O.B. decision concept of res judicata not applicable in opposition proceedings — In passing-off action respecting use of —Fantasyland— as name of closed-in amusement park, Alberta Court of Queen's Bench, Court of Appeal finding confusion — Alberta Court dismissing second action to preclude use of unregistered trade-mark —Fantasyland Hotel—, confirming injunction against use of —Fantasyland— except in conjunction with —Hotel— — In opposition proceedings to registration of —Fantasyland Hotel— appellant arguing T.M.O.B. bound by decisions in determining outcome — Nothing precluding application of doctrine of issue estoppel in opposition proceedings subsequent to passing-off action, but same question must be answered in both — Only same question if goods at issue in passing-off action same as those in opposition proceeding — Issue estoppel not applicable herein as not proven goods at issue in passing-off action same as those in opposition proceeding.
Estoppel — Appeal from Trade-marks Opposition Board decision res judicata not applicable in opposition proceedings — Relied upon TMOB decision in Sunny Crunch Foods Ltd. v. Robin Hood Multifoods Inc., based on F.C.T.D. decision in The Molson Companies Ltd. v. Halter — Molson not directly speaking to issue of whether issue estoppel applies in opposition to registration of trade-mark on basis of confusion — Stating doctrine of res judicata not applicable to s. 44 proceedings in which only Registrar involved in making decision — Molson not authority for position adopted in Sunny Crunch, subsequent cases, issue estoppel not applicable in opposition proceedings — Issue estoppel requiring determination of whether same question already determined — Confusion common element to statutory opposition proceedings, common law passing-off action — Test therefor substantially similar in passing-off action, subsequent opposition proceedings — —Same question— if goods at issue in passing-off action same as those in opposition proceeding — Each case must be assessed on facts to determine effect of doctrine — Issue estoppel having no effect herein as necessary criteria not proved.
This was an appeal from a decision of the Trade-marks Opposition Board that it was not bound by Alberta Court of Appeal decisions respecting the use of the word "Fantasyland". The appellant had brought a passing-off action respecting the use of "Fantasyland" as the name of the closed-in amusement park in the West Edmonton Mall. The Alberta Court of Queen's Bench, in a decision upheld by the Court of Appeal, found that there was evidence of confusion, and issued an injunction enjoining the defendants therein from using "Fantasyland" as and in the operation of an amusement park. In a second action to preclude the use of the unregistered trade-mark "Fantasyland Hotel" at the West Edmonton Shopping Mall, the Alberta Court of Queen's Bench, in a decision upheld by the Court of Appeal, held that the appellant had failed to establish the necessary elements to sustain a passing-off action in relation to the name "Fantasyland Hotel", but confirmed the injunction against use of "Fantasyland" except in conjunction with "Hotel".
In 1987 the respondent filed an application to register the words "Fantasyland Hotel", and the appellant filed a statement of opposition. Before the Opposition Board, the appellant argued that the Board was bound by the Alberta decisions. The hearing officer held that the concept of res judicata does not apply in opposition proceedings, and rejected the appellant's opposition to the registration of "Fantasyland Hotel".
The issues were: (1) whether the doctrine of issue estoppel applies in opposition proceedings; and if so, (2) what was the effect of applying issue estoppel to this case.
Held, the appeal should be dismissed.
(1) The hearing officer erred in law in determining that the doctrine of issue estoppel does not apply to opposition proceedings. The hearing officer relied upon Sunny Crunch Foods Ltd. v. Robin Hood Multifoods Inc., a decision of the Trade-marks Opposition Board, which was based on the Federal Court Trial Division's decision in The Molson Companies Ltd. v. Halter. The Molson decision does not directly speak to the issue of whether the doctrine of issue estoppel applies in the case of an opposition to the registration of a trade-mark on the basis of confusion. Rather, it states that the doctrine of res judicata is not applicable to section 44 proceedings in which only the Registrar is involved in making a decision. Molson is not authority for the position adopted in Sunny Crunch and subsequent cases that issue estoppel does not apply in opposition proceedings.
The first element of the doctrine of issue estoppel involves a determination of whether the same question had already been determined. Confusion is an essential element of the common law action of passing-off and statutory opposition proceedings. The "test" for confusion in both is substantially similar such that it can be said that the "same question" is put forth in both cases. Therefore, there is nothing which precludes the application of the doctrine of issue estoppel in a case involving a passing-off action and a subsequent opposition proceeding. However, in determining whether a passing-off action is well-founded, a plaintiff must establish goodwill in the name or mark at issue . Therefore, the "same question" has been answered only if the goods at issue in the passing-off action are the same as those at issue in an opposition proceeding. Each case must be assessed on its facts in order to determine the effect of the doctrine.
(2) The doctrine of issue estoppel had no effect herein, as the necessary criteria had not been proved. The appellant asserted that a liberal scope of activities result from registration, which might entitle the respondent to operate services for which confusion has already been found to exist, and for this reason registration should be denied. This argument could be given no weight. While the registration of a trade-mark gives the owner exclusive right to use the mark, the use is restricted to those wares or services specified in the application. If the respondent's use of its wares breaches the injunction, then the appropriate remedy is to apply to enforce the injunction.
statutes and regulations judicially considered
Trade Marks Act, R.S.C. 1970, c. T-10, s. 44.
Trade-marks Act, R.S.C., 1985, c. T-13, ss. 6(2),(5), 12(1)(d), 19 (as am. by S.C. 1993, c. 15, s. 60), 38, 56(1).
cases judicially considered
applied:
Angle v. M.N.R., [1975] 2 S.C.R. 248; (1974), 47 D.L.R. (3d) 544; 74 DTC 6278; 2 N.R. 397; Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120; (1992), 95 D.L.R. (4th) 385; 44 C.P.R. (3d) 289; 143 N.R. 241; 58 O.A.C. 321.
distinguished:
The Molson Companies Ltd. v. Halter (1976), 28 C.P.R. (2d) 158 (F.C.T.D.); Walt Disney Productions v. Triple Five Corp. et al. (1992), 130 A.R. 321; 93 D.L.R. (4th) 739; [1992] 5 W.W.R. 622; 3 Alta. L.R. (3d) 159; 43 C.P.R. (3d) 321 (Q.B.); affd (1994), 149 A.R. 112; 113 D.L.R. (4th) 229; [1994] 6 W.W.R. 385; 17 Alta. L.R. (2d) 225; 53 C.P.R. (3d) 129; 63 W.A.C. 112 (C.A.); leave to appeal to S.C.C. refused [1994] 2 S.C.R. x; (1994), 162 A.R. 319; 114 D.L.R. (4th) vii; [1994] 7 W.W.R. lxix; 20 Alta. L.R. (3d) xxxix; 55 C.P.R. (3d) vi; 178 N.R. 160; 83 W.A.C. 319; Walt Disney Productions v. Triple Five Corp. et al. (1994), 154 A.R. 161; [1994] 9 W.W.R. 45; 20 Alta. L.R. (3d) 146; 15 B.L.R. (2d) 1; 56 C.P.R. (3d) 129 (Q.B.); affd (1996), 184 A.R. 110; [1996] 6 W.W.R. 403; 38 Alta. L.R. (3d) 441; 67 C.P.R. (3d) 444; 122 W.A.C. 110 (C.A.).
considered:
Sunny Crunch Foods Ltd. v. Robin Hood Multifoods Inc. (1982), 70 C.P.R. (2d) 244 (T.M.O.B.); Baron Petroleums Inc. v. Pronto Auto Repair Dealerships Inc. (1984), 2 C.P.R. (3d) 558 (T.M.O.B.); Simmons I.P. Inc. v. Park Avenue Furniture Corp. (1993), 49 C.P.R. (3d) 138 (T.M.O.B.); Simmons I.P. Inc. v. Park Avenue Furniture Corp. (1994), 56 C.P.R. (3d) 284 (T.M.O.B.); Georgia Pacific Corp. v. Scott Paper Ltd. (1996), 70 C.P.R. (3d) 570 (T.M.O.B.); Schering Can. Inc. v. Thompson Medical Co. Inc. (1983), 1 C.I.P.R. 148; 81 C.P.R. (2d) 270 (T.M.O.B.); Original Chalet (Can.) Inc. v. Foodcorp. Ltd. (1984), 3 C.I.P.R. 205 (T.M.O.B.); Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; (1990), 76 D.L.R. (4th) 256; [1991] 2 W.W.R. 217; 52 B.C.L.R. (2d) 160; 46 C.P.C. (2d) 1; 122 N.R. 81; 15 R.P.R. (2d) 1; Mr. Submarine Ltd. v. Amandista Investments Ltd., [1988] 3 F.C. 91; (1987), 16 C.I.P.R. 282; 19 C.P.R. (3d) 3; 81 N.R. 257 (C.A.).
APPEAL from a decision of the Trade-marks Opposition Board that it was not bound by Alberta Court of Appeal decisions respecting the use of the word "Fantasyland" (Walt Disney Co. v. Fantasyland Holdings Inc. (1997), 77 C.P.R. (3d) 356 (T.M.O.B.)). Appeal dismissed, although the doctrine of issue estoppel applied to opposition proceedings, because the necessary criteria were not proved.
appearances:
Roger T. Hughes, Q.C. for appellant.
Michelle G. Crighton for respondents.
solicitors of record:
Sim, Hughes, Ashton & McKay, Toronto, for appellant.
McLennan Ross, Edmonton, for respondents.
The following are the reasons for order rendered in English by
Campbell J.: In recent years, the corporate parties to this appeal have, in two separate actions, received the judgment of the Alberta Court of Appeal respecting the use of the word "Fantasyland". This appeal under subsection 56(1) of the Trade-marks Act , R.S.C., 1985, c. T-13 concerns a judgment of the Trade-Marks Opposition Board issued June 18, 1997 [(1997), 77 C.P.R. (3d) 356] respecting the same issue. The question is: what is the effect of the Alberta Court of Appeal decisions on the application of the respondent, Fantasyland Holdings Inc., to register the words "Fantasyland Hotel" (Hotel disclaimed) for a variety of wares and services? The hearing officer found that she was not bound by either decision in determining the outcome of the opposition proceedings. This appeal is based on the argument that this finding constitutes an error in law.
A. The Alberta Court of Appeal decisions
In Walt Disney Productions v. Triple Five Corp. et al. (1992), 130 A.R. 321 (Q.B.) the appellant in this case brought an action of passingoff respecting the use of the name "Fantasyland" as the name of the closed-in amusement park in the West Edmonton Mall.
At page 343 Dea J. came to the following conclusions:
The defendants argued throughout the trial that no one was or could be confused between the amusement park called Fantasyland at Disneyland and the amusement park called Fantasyland at West Edmonton Mall. They argued forcefully that such confusion was an element of the tort that the plaintiff could not prove.
The evidence discloses several examples of confusion by the public. For instance, an inquiry was made of the plaintiff concerning an accident on a roller coaster at West Edmonton Mall. Evidence was cited of persons who, when asked about connections between the Fantasyland at West Edmonton Mall and the plaintiff, indicated that they were not sure. The more recent cases, however, recognize that misrepresentation almost always creates a likelihood of confusion. Here there is evidence that while large numbers of people in Canada generally associate Fantasyland with the plaintiff's amusement park at Disneyland, that in Edmonton that association is absent. Bearing in mind the standard of confusion and the change which [the plaintiff's expert witness] Senders says occurred in strength of association after the defendants started their Fantasyland at West Edmonton Mall there is evidence of confusion even in the classic sense.
These findings were upheld by the Alberta Court of Appeal, (1994), 149 A.R. 112 (C.A.). Leave to appeal to the Supreme Court of Canada was refused [[1994] 2 S.C.R. x].
In relation to this action, Dea J. issued the following injunction:
IT IS HEREBY ORDERED AND ADJUDGED THAT each of the Defendants, both jointly and severally, their officers, directors, employees, servants, agents, and all those over whom they exercise control or over whom they exercise control or with whom they act in concert, is enjoined from using the name FANTASYLAND as and in the operation of an amusement park, or any part thereof and in particular and without restricting the generality of the foregoing in respect of an amusement park or any part thereof:
a. Immediately alter the interior and exterior appearance of the buildings and improvements in, on and about the West Edmonton Mall in such manner so as to remove the name FANTASYLAND in its operations;
b. Immediately cease and desist from any further publication of any advertising and promotion utilizing the name FANTASYLAND or any confusingly similar name, in any written, oral or visual publications and hereafter refrain from any advertising, actions or other practices which utilize the FANTASYLAND name;
c. Immediately discontinue all actions, advertising and any other practices which would indicate in any manner that the Defendants are, or in any way, connected with The Walt Disney Company or any other Disney affiliated or related corporation;
d. Immediately discontinue the use of the name FANTASYLAND, West Edmonton Mall FANTASYLAND, and other names and designs utilized by the Defendants that utilize the word "FANTASYLAND", or any name confusingly similar thereto;
e. Immediately remove and discontinue use of all advertisement, logos, marks, brochures, printed matter, merchandise, signs, giftware, apparel, glasses, napkins, balloons, designs and other things wherever located under the control of the Defendants, or persons with whom they act in concert, which bear the name "FANTASYLAND";
f. Immediately notify the telephone company, and all other directory services wherein the Defendants have caused the name FANTASYLAND to appear, that the listing and advertising in all telephone and other directories should be changed to no longer use the name FANTASYLAND; and
g. Have thirty (30) days from the date of entry of the within Order within which to comply with this Order.
A second passing-off action was commenced by the appellant to this action against Triple Five Corporation ((1994), 154 A.R. 161 (Q.B.)). In the second action, the appellant sought to preclude the use of the unregistered trade-mark "Fantasyland Hotel" at the West Edmonton Shopping Mall. In that case, the appellant also argued that the doctrine of issue estoppel precluded the Alberta Court of Queen's Bench from adjudicating in a manner different from that of the Alberta Court of Appeal in the first action. In essence, the appellant argued that the defendant was estopped by virtue of the previous decision from using the word "Fantasyland".
This argument was dismissed by Rooke J. who found that the appellant had failed to establish the necessary elements to sustain a passing-off action in relation to the name "Fantasyland Hotel". The judgment roll in that decision reads:
. . . the Defendant (and its officers, directors, employees, servants, agents and all those over whom it exercises control or acts in concert is hereby:
a. Enjoined from using the words:
i. "fantasyland" other than in conjunction with the word "Hotel", for which each shall have equal prominence;
ii. "resort" in conjunction with the words "Fantasyland Hotel"; and
iii. "fantasyland" in any way so as to be associated with the amusement park facilities in the West Edmonton Mall, except as provided in (b) hereof and
all material in the possession, custody or control of the Defendant that is enjoined hereby, be, within 90 days hereof, mutatis mutandis, altered ceased, discontinued, removed, changed and modified so as to comply herewith; and
b. Entitled to:
i. continue to use the words "Fantasyland Hotel" in signage on the exterior of the hotel, and within the West Edmonton Mall, to the extent used on September 3, 1993; and
ii. refer, in its advertising of the "Fantasyland Hotel", to its proximity to, or association with, the West Edmonton Mall, and to display such advertising within West Edmonton Mall, only to the same extent as would any independent third party, that is not associated with either, be legally entitled, and permitted by the West Edmonton Mall to do so.
This decision was also upheld on appeal to the Alberta Court of Appeal ((1996), 184 A.R. 110 (C.A.)).
B. The application before the hearing officer
On February 13, 1987, the respondent filed an application to register the words "Fantasyland Hotel" for:
Wares: all wares incidental to the performance of hotel, restaurant and hospitality services, namely novelty item namely mugs, glasses, souvenir spoons, plates, figurines, ashtrays, statuettes, hats, caps, T-shirts, sweat shirts, aprons, miniature football helmets, bumper stickers, buttons, pennants, flags, posters, stationery namely envelopes, writing paper, writing tablets, pens, pencils, erasers, pencil cases, key rings, pencil sharpeners, wallets, plaques, salt and pepper shakers, umbrellas, windmills, stuffed toys, match books, candles, candle holders, balloons, tea towels, napkins, napkin holders, brooches, souvenir pins, coasters.
Services: (1) Hotel services. (2) Restaurant and hospitality services namely promoting, attracting, arranging and conducting of conventions, Trade Shows; arranging tours of local attractions.
The respondent claimed use since October 1, 1986 on hotel services and the balance of the application was based on proposed use in Canada of wares and restaurant and hospitality services. The respondent disclaimed the word "Hotel" apart from the trade-mark.
The application was advertised for opposition in the Trade-Marks Journal on March 30, 1988. On April 14, 1988, the appellant filed a statement of opposition under section 38 of the Trade-marks Act. The statement of opposition was amended on July 14, 1995 with leave.
The appellant opposed the registration of "Fantasyland Hotel" as a trade-mark on essentially four grounds:
a. The trade-mark is not registerable as it is confusing with a previously registered trade-mark DISNEYLAND, numbers 107,332; 144,094 and 164,194 covering a broad range of wares;
b. The trade-marks FANTASYLAND and DISNEYLAND had, prior to the alleged date of first use, and filing date, been made known in Canada by the Opponent, thus the applicant is not the person entitled to registration; and
c. The trade-mark as applied for is not distinctive of the wares or services of the Opponent as it is confusing with the trade-mark DISNEYLAND previously registered, used and made known in Canada by the Opponent and the trade-mark FANTASYLAND previously used and made known by the Opponent in Canada; and
d. The Applicant, a corporation situated in Alberta, is precluded from seeking registration of the trade-mark at issue by reason of a judgment of the Alberta courts.
C. The hearing officer's decision
Before the Opposition Board, the appellant introduced into evidence the decisions from the Alberta courts and argued that the Board was bound by the decisions in determining the outcome of the opposition. On this issue, the hearing officer made the following comment at pages 363-364 of that decision, reported at (1997), 77 C.P.R. (3d) 356 (T.M.O.B.):
The opponent has introduced the judgment of Mr. Justice Dea into this opposition proceeding through paragraph 1(d) of the statement of opposition and both parties referred to the decisions of Mr. Justice Rooke and Mr. Justice Dea in the oral hearing. Let me begin by saying that I do not think I am bound by either decision in determining the outcome of this opposition. It is well established that the concept of res judicata does not apply in opposition proceedings (see Sunny Crunch Foods Ltd. v. Robin Hood Multifoods Inc. (1982), 70 C.P.R. (2d) 244 (T.M.O.B.)). The Registrar is free to decide each case on its own merits. If the Registrar is not to be bound by prior opposition board decisions or Federal Court Appeals, then it follows that passing off decisions of other courts should also not be binding. The issues in other actions are bound to differ at least slightly, the evidence presented will be different from that presented in the opposition process and the material dates may be different. In the amusement park case, for example, the mark was different from the mark in this case as it did not include the word "hotel". The wares and services differed as the defendant was operating an amusement area, not a hotel, and in the Judgment Roll all the restrictions on the use of the word FANTASYLAND were stated to be with regard to an amusement park and therefore cannot be taken out of context as the opponent is attempting to do by saying that this judgment should prevent the applicant from registering the mark FANTASYLAND HOTEL for use in association with balloons, napkins and glasses. Also, the evidence presented at the trial for both cases was much more extensive than the evidence presented for the opposition and included survey evidence, testimony from witnesses, transcripts from inquiries and no doubt many other pieces of evidence. In the hotel passing off action, although the mark was the same, the wares and services were not as extensive as they are in this application as they did not really extend beyond the mere operation of a hotel.
In the final result, the hearing officer, in a careful and full analysis of the evidence, rejected the appellant's opposition to the registration of the words "Fantasyland Hotel". No error of law is alleged respecting this analysis.
D. Issues arising from the hearing officer's decision
1. Does the doctrine of issue estoppel apply in opposition proceedings?
The appellant argues that the decisions of the Alberta courts already determined that there is confusion between the appellant's mark and that which is intended for use by the respondent, and, as a result, the hearing officer is bound by them. On this issue, the appellant relies on the case of Angle v. M.N.R., [1975] 2 S.C.R. 248 in which Dickson J., as he then was, made the following comments at pages 253-255:
In earlier times res judicata in its operation as estoppel was referred to as estoppel by record, that is to say, estoppel by the written record of a court of record, but now the generic term more frequently found is estoppel per rem judicatam. This form of estoppel, as Diplock L.J. said in Thoday v. Thoday ([1964] P. 181), at p. 198, has two species. The first, "cause of action estoppel" precludes a person from bringing an action against another when that same cause of action has been determined in earlier proceedings by a court of competent jurisdiction. We are not here concerned with cause of action estoppel as the Minister's present claim that Mrs. Angle is indebted to Transworld in the sum of $34,612.33 is obviously not the cause of action which came before the Exchequer Court in the s. 8(1)(c ) proceedings. The second species of estoppel per rem judicatam is known as "issue estoppel", a phrase coined by Higgins J. of the High Court of Australia in Hoystead [sic] v. Federal Commissioner of Taxation ((1921), 29 C.L.R. 537), at p. 561:
I fully recognize the distinction between the doctrine of res judicata where another action is brought for the same cause of action as has been the subject of previous adjudication, and the doctrine of estoppel where, the cause of action being different, some point or issue of fact has already been decided (I may call it "issue estoppel").
Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2) ([1967] 1 A.C. 853), at p. 935, defined the requirements of issue estoppel as:
. . . (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies . . . .
Is the question to be decided in these proceedings, namely the indebtedness of Mrs. Angle to Transworld Explorations Limited, the same as was contested in the earlier proceedings? If it is not, there is no estoppel. It will not suffice if the question arose collaterally or incidentally in the earlier proceedings or is one which must be referred by argument from the judgment. That is plain from the words of De Grey C.J. in the Duchess of Kingston's case ((1776), 20 St. Tr. 355, 538n.), quoted by Lord Selborne L.J. in R. v. Hutchings ((1881), 6 Q.B.D. 300), at p. 304, and by Lord Radcliffe in Society of Medical Officers of Health v. Hope ([1960] A.C. 551). The question out of which the estoppel is said to arise must have been "fundamental to the decision arrived at" in the earlier proceedings: per Lord Shaw in Hoystead [sic] v. Commissioner of Taxation ([1926] A.C. 155). The authors of Spencer Bower and Turner, Doctrine of Res Judicata, 2nd ed. pp. 181, 182, quoted by Megarry J. in Spens v. I.R.C. ([1970] 3 All. E.R. 295), at p. 301, set forth in these words the nature of the enquiry which must be made:
. . . whether the determination on which it is sought to found the estoppel is "so fundamental" to the substantive decision that the latter cannot stand without the former. Nothing less than this will do.
As cited, the hearing officer concluded that the doctrine of res judicata does not apply to opposition proceedings, and as authority relied upon the decision of Sunny Crunch Foods Ltd. v. Robin Hood Multifoods Inc. (1982), 70 C.P.R. (2d) 244 (T.M.O.B.). In that case, the Trade-Marks Opposition Board made the following finding at page 248:
As in the case of s. 44 proceedings, opposition proceedings do include a public interest in so far as the registrar maintaining the parity of the register. However, unlike s. 44 proceedings, both an applicant and an opponent may file evidence in an opposition and either party may request an order from the registrar to cross-examine the evidence of the other party. As a result, and while I consider the respective claims of the parties to an opposition to be of more significance than in the case of a s. 44 proceeding, I am of the opinion that the decision of Mr. Justice Gibson is binding in this instance and that the doctrine of res judicata would not apply in an opposition proceeding.
The decision in Sunny Crunch was based on Gibson J.'s decision in The Molson Companies Ltd. v. Halter (1976), 28 C.P.R. (2d) 158 (F.C.T.D.).1 At issue in Molson was whether the doctrine of res judicata applied to proceedings brought pursuant to section 44 [R.S.C. 1970, c. T-10] (now section 45 [as am. by S.C. 1994, c. 47, s. 200]) of the Trade-marks Act. That provision provides that:
45. (1) The Registrar may at any time and, at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee shall, unless the Registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or a 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 at any time during the three year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since that date.
In Molson, the earlier proceedings had taken place under section 44 by the same parties in respect of which the Registrar had, on each occasion, sustained the registration. On appeal to the Federal Court, the respondent, Molson, maintained that the doctrine of res judicata applied to that proceeding as there were two previous unappealed section 44 decisions involving the same parties and the same trade-mark. In response to that argument, at page 181 Gibson J. concluded as follows:
A proceeding, however, under s. 44 of the Trade Marks Act is not an ordinary proceeding inter partes. For example, in such a proceeding before the Registrar of Trade Marks, affidavit or statutory declaration evidence of the registrant only may be filed and considered by the Registrar. No cross-examination may be had on any such affidavit or statutory declaration by any third party or by the Registrar. For these and other reasons, res judicata or any principle having an equivalent result does not apply: cf Maynard v. Maynard, [1951] 1 D.L.R. 241, [1951] S.C.R. 346.
Moreover, the doctrine of res judicata or the application of any principle not technically so denominated but having an effect equivalent to res judicata cannot apply to proceedings under s. 44 of the Trade Marks Act. This is so because there is a public interest in proceedings under s. 44 of the Trade Marks Act to maintain and preserve the purity of the register, which public interest transcends the rival claims between parties as to their respective interests, namely, the interest of the registrant and the interest of any other private person in the registration: cf. Re Wolfville Holland Bakery Ltd. (1964), 42 C.P.R. 88 at P. 91, 25 Fox Pat. C. 169, per Thorson, P.; Noxzema Chemical Co. of Canada Ltd. v. Sheran Manufacturing Ltd. et al. (1968), 55 C.P.R. 147 at p. 156, [1968] 2 Ex. C.R. 446, 38 Fox Pat. C. 89; Cheerio Toys & Games Ltd. v. Dubiner (1965), 48 C.P.R. 226 at p. 234, 55 D.L.R. (2d) 313, [1966] S.C.R. 206 at p. 228, per Judson, J.; John Labatt Ltd. v. Carling Breweries Ltd. (1974), 18 C.P.R. (2d) 15 at p. 26.
I agree with the appellant's argument that, indeed, the Molson decision does not directly speak to the issue of whether the doctrine of issue estoppel applies in the case of an opposition to the registration of a trade-mark on the basis of confusion. Rather, the case states that the doctrine of res judicata is not applicable to section 44 proceedings in which only the Registrar is involved in making a decision.
Thus, I find that Molson is not authority for the position adopted in Sunny Crunch and subsequent cases that issue estoppel does not apply in opposition proceedings.
Regarding whether issue of estoppel should apply in opposition proceedings, the appellant argues that an administrative tribunal cannot be insulated from the general application of the doctrine of issue estoppel due to the operation of Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077. That case recognized as a matter of conflict of laws that a decision of an Alberta court should be enforceable in British Columbia. At page 1095 of that decision, La Forest J. said the following:
Modern states, however, cannot live in splendid isolation and do give effect to judgments given in other countries in certain circumstances. Thus a judgment in rem, such as a decree of divorce granted by the courts of one state to persons domiciled there, will be recognized by the courts of other states. In certain circumstances, as well, our courts will enforce personal judgments given in other states . . . . This, it was thought, was in conformity with the requirements of comity, the informing principle of private international law, which has been stated to be the deference and respect due by other states to the actions of a state legitimately taken within its territory. Since the state where the judgment was given had power over the litigants, the judgments of its courts should be respected.
I find that this statement does not assist in determining whether the doctrine of issue estoppel is applicable in opposition proceedings. Morguard does not detract from or modify the binding authority of Angle, which was decided after Sunny Crunch, and which requires that certain conditions be met before the doctrine applies.
As stated in Angle, the first element of the doctrine of issue estoppel involves a determination of whether the same question has already been determined. In order to answer this question, it is necessary to keep in mind that what is at issue in an opposition proceeding is whether there is confusion between a registered trade-mark and that seeking registration. This is embodied in paragraph 12(1)(d) which provides that:
12. (1) Subject to section 13, a trade-mark is registrable if it is not
. . .
(d) confusing with a registered trade-mark;
In determining whether confusion is likely, regard must be had to subsection 6(5) which provides that:
6. . . .
(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
(b) the length of time the trade-marks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.
Regard must also be had to subsection 6(2) which provides that:
6. . . .
(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.
For the common law tort of passingoff, the Supreme Court of Canada in Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, at page 132 set out the necessary elements which must be established:
The three necessary components of a passing-off action are thus: the existence of goodwill, deception of the public due to a misrepresentation and actual or potential damage to the plaintiff.
Gonthier J. added at page 140 that:
There is no question that confusion, which is the essence of the tort of passing-off, must be avoided in the minds of all customers, whether direct"here one thinks of the retailers"or indirect"in that case the consumers. [Emphasis added.]
In determining the second element of a passing-off action, namely deception of the public due to a misrepresentation, the courts have often reverted to the "test" set out in subsection 6(5) of the Trade-marks Act . On this point, Rooke J. [154 A.R. 161], in the second passing-off action referred to above involving the parties to this appeal, at page 201 stated as follows:
Counsel were substantially agreed with the argument put forward by counsel for the defendant that, while it is not necessary to prove intention to defraud in a passing-off action (and no fraud was alleged here), if there is no fraud then the probability or likelihood of deception (I consider "deception" and "confusion" to be synonymous) must be proved by a plaintiff on a balance of probabilities. [Emphasis added.]
At page 206 he added:
In determining confusion, where the same trade name is the only common element between two parties which are carrying on completely different businesses, the court will consider the following factors: the nature of the trade, including the custom and usage of the trade and the character of the market through the names that are to be used; the probable purchasers of the goods in question, and the degree of resemblance in the names, in appearance or sound or the idea conveyed by them: Joseph E. Seagram & Sons v. Seagram Real Estate Ltd. That case's only common element was the word "Seagram" with one business being a distiller and the other being a real estate agency. The court held the characteristics of the services offered would not be confusing to an ordinary person of average intelligence who was presumed to know the characteristics that generally distinguish the goods and services of one supplier from those of another.
General Motors Corp v. Bellows, at p. 692, is authority for the proposition that when considering the likelihood of confusion, one must take into account the entire circumstances of the trade, including the class of person seeking access to the services and the ordinary manner in which they do it.
From the above statements, I am satisfied that confusion is an essential element to the common law action of passingoff and statutory opposition proceedings. I further find that the "test" for confusion in an opposition proceeding and in a passing-off action is substantially similar such that it can be said that the "same question" is put forth in both cases.
Therefore, in answering the question posed above, I find that there is nothing which precludes the application of the doctrine of issue estoppel in a case involving a passing-off action and a subsequent opposition proceeding. That said, however, it must be noted that in determining whether a passing-off action is well-founded, a plaintiff must establish goodwill in the name or mark at issue. Therefore, it can only be said that the "same question" has been answered if the goods at issue in the passing-off action are the same as those at issue in an opposition proceeding. Each case will need to be assessed on its facts in order to determine the effect of the doctrine.
2. What is the effect of applying the doctrine of issue estoppel to this case?
The only way in which the doctrine of issue estoppel can be said to have any effect in this case is if Rooke J.'s finding of confusion applicable to amusement parks is also applicable to the registration of "Fantasyland Hotel" in association with the wares and services listed in the respondent's application.
The appellant's argument in support of an affirmative finding in this respect is based on a fear that, if registration is allowed, the respondent at some future time might use "Fantasyland Hotel" in respect of services such as "operating tours of local attraction" in such as way as to enter the area in which confusion has already been found. That is, even though the registration application relates to "hotel" services and wares incidental to its operation, the concern is that a hotel service might, in fact, become an "amusement park service" and, thus, will come within the ambit of the amusement park injunction.
In making this argument, the appellant relies on section 19 of the Act and on the following quotation from Thurlow C.J. in Mr. Submarine Ltd. v. Amandista Investments Ltd., [1988] 3 F.C. 91 (C.A.), at pages 102-103:
Before addressing these considerations it should be noted that the appellant's right to the exclusive use of "Mr. Submarine" is not confined to those parts of Canada in which the appellant and its licensees have carried on business but extends throughout Canada. The appellant is thus entitled to its exclusive use in any additional outlets for its sandwiches that it may see fit to establish. Nor is the appellant's exclusive right confined to the sale of sandwiches by the methods it now employs or has employed in the past. Nothing restricts the appellant from changing the colour of its signs or the style of lettering of "Mr. Submarine" or from engaging in a telephone and delivery system such as that followed by the respondent or any other suitable system for the sale of its sandwiches. Were it to make any of these changes its exclusive right to the use of "Mr. Submarine" would apply just as it applies to its use in the appellant's business as presently carried on. Whether the respondent's trade marks or trade names are confusing with the appellant's registered trade mark must accordingly be considered not only having regard to the appellant's present business in the area of the respondent's operations but having regard as well to whether confusion would be likely if the appellant were to operate in that area in any way open to it using its trade mark in association with the sandwiches or services sold or provided in the operation. [Emphasis added.]
Section 19 [as am. by S.C. 1993, c. 15, s. 60] of the Act provides that:
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. [Emphasis added.]
The appellant asserts that, considering the case authority and statutory provision in combination, a liberal scope of activities result from registration which might entitle the respondent to operate services for which confusion has already been found to exist, and for this reason, registration should be denied. With respect, I give no weight to this argument.
While the quote from Mr. Submarine does appear to allow an applicant for registration to make liberal use of the wares and services once having obtained the registered trade-mark, it does not, however, in any way affect the applicant's right to obtain registration. Similarly, the statement in Mr. Submarine does not attempt to vary the rights set out in section 19; that is, while the registration of a trade-mark gives the owner exclusive right to use the mark, the use is restricted to those wares or services specified in the application.
If the respondent's use of its wares breaches Rooke J.'s injunction, then the appropriate remedy is to apply to enforce the injunction. In my opinion, the fear at the source of the appellant's argument should be comforted in this way, not by denying registration.
Therefore, in answering the question posed above, I find that the doctrine of issue estoppel has no effect in this case, as the necessary criteria have not been proved.
E. Result
Although I have found that the hearing officer made an error in law in determining that the doctrine of issue estoppel does not apply to opposition proceedings, my decision that the application of the doctrine has no effect leaves the otherwise unchallenged decision on the merits unaffected. Accordingly, I dismiss this appeal.
1 There have been a number of decisions of the Trade-Marks Opposition Board which have followed the Sunny Crunch decision: Baron Petroleums Inc. v. Pronto Auto Repair Dealerships Inc. (1984), 2 C.P.R. (3d) 558 (T.M.O.B.); Simmons I.P. Inc. v. Park Avenue Furniture Corp. (1993), 49 C.P.R. (3d) 138 (T.M.O.B.); Simmons I.P. Inc. v. Park Avenue Furniture Corp. (1994), 56 C.P.R. (3d) 284 (T.M.O.B.); Georgia Pacific Corp. v. Scott Paper Ltd. (1996), 70 C.P.R. (3d) 570 (T.M.O.B); Schering Can. Inc. v. Thompson Medical Co. Inc. (1983), 1 C.I.P.R. 148 (T.M.O.B.); and Original Chalet (Can.) Inc. v. Foodcorp. Ltd. (1984), 3 C.I.P.R. 205 (T.M.O.B.).