T-1746-78
Mister Transmission (International) Limited
(Appellant)
v.
Registrar of Trade Marks (Respondent)
Trial Division, Thurlow A.C.J.—Toronto, Novem-
ber 7; Ottawa, November 27, 1978.
Trade marks — Certification mark — Appeal from Regis
trar's refusal to register certification mark MISTER TRANSMIS -
SION - Trade mark Mister TRANSMISSION registered, and
assigned to appellant with former owner a registered user —
Whether or not subject matter of application confusing with
registered trade mark Mister TRANSMISSION, and not regis-
trable — Whether or not registrant deemed to be engaged in
performance of services covered by registration because of
activities of registered user of trade mark, and hence unable to
register certification mark pursuant to s. 23 — Trade Marks
Act, R.S.C. 1970, c. T-10, ss. 2, 6(1),(2),(5), 12(1)(d), 15(1),
23(1),(2), 36(1), 49(1),(2),(3).
This is an appeal under section 56 of the Trade Marks Act
from a decision of the Registrar of Trade Marks refusing,
under paragraph 36(1)(b) of the Act, the appellant's applica
tion for registration of the words MISTER TRANSMISSION (dis-
claiming the word TRANSMISSION) as a certification mark for
use in association with specific services. The appeal is confined
to issues on objections that were raised by the Registrar under
subsection 36(2). The mark Mister TRANSMISSION, was regis
tered in 1970 as the trade mark of Mister Transmission Sys
tems Limited and was used continuously since 1963 in associa
tion with services concerned with automobile transmissions
until 1977 when it was assigned to the appellant together with
the goodwill attaching to it. Following the assignment, the
former owner continued to use the trade mark under a regis
tered user agreement with the appellant. The Registrar's first
objection was that the subject matter of the application was
confusing with the registered mark Mister TRANSMISSION, and
not registrable. The second objection was that, although the
registered owner of the trade mark had appointed a registered
user, the registrant was deemed to be engaged in the perform
ance of services covered by that registration, and pursuant to
section 23, unable to adopt and register the certification mark.
Held, the appeal is allowed. The Registrar should not have
been satisfied that the certification mark of which registration
was sought was not registrable either because it was confusing
with the registered trade mark Mister TRANSMISSION or
because the appellant must be deemed to be engaged in the
performance of services such as those in association with which
the certification mark, MISTER TRANSMISSION, is used. Firstly,
although the presence on the register of the registered mark
Mister TRANSMISSION, owned by the appellant, with which the
certification mark applied for is confusing, constitutes a bar
under paragraph 12(1)(d) to the application, because of subsec
tion 15(1) it is not a bar. Secondly, it does not follow that,
because a trade mark is used by a registered user and because,
for the purposes of the Act, that use has the same effect as use
by the owner, the registered owner must be deemed to be
engaged in the manufacture, sale, leasing or hiring of wares or
the performance of services in association with which the mark
is used.
APPEAL.
COUNSEL:
I. Goldsmith, Q.C. and M. Hebert for
appellant.
T. L. James for respondent.
SOLICITORS:
Immanuel Goldsmith, Q.C., Toronto, for
appellant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
THURLOW A.C.J.: This is an appeal under sec
tion 56 of the Trade Marks Act' from a decision
of the Registrar of Trade Marks refusing, under
paragraph 36(1)(b) 2 of the Act, the appellant's
application for registration of the words MISTER
TRANSMISSION as a certification mark for use in
association with the specific services described as:
repairing, replacing, renewing and installing automobile
transmissions
the operation of a transmission repair and replacement centre.
' R.S.C. 1970, c. T-10.
2 Subsection 36(1):
36. (1) The Registrar shall refuse an application for the
registration of a trade mark if he is satisfied that
(a) the application does not comply with the requirements
of section 29;
(b) the trade mark is not registrable; or
(c) the applicant is not the person entitled to registration
of the trade mark because it is confusing with another
trade mark for the registration of which an application is
pending;
and where the Registrar is not so satisfied, he shall cause the
application to be advertised in the manner prescribed.
The right to the exclusive use of the word TRANS
MISSION apart from the certification mark was
disclaimed.
The appeal, because it is from a decision under
subsection 36(1), is a narrow one. It appears to me
to be confined to issues on objections that have
been raised by the Registrar under subsection
36(2). On such an appeal, it is not open to the
Registrar or his counsel to raise objections which
the applicant has not been afforded an opportu
nity, under subsection 36(2), to answer and it is
not the function of the Court on appeal to raise
new or additional objections.
The Registrar's reasons for refusing the applica
tion were expressed in a letter to the appellant's
representatives after they had responded to two
objections raised by the Registrar under subsection
36(2) of the Act. While the reasons referred only
to the second of the two objections, both were
discussed on the hearing of the appeal and counsel
for the Registrar relied on both in support of the
Registrar's conclusion.
The first of the objections was that the subject
matter of the application was confusing with the
registered trade mark Mister TRANSMISSION and
was for that reason not registrable.' That mark
had been registered in 1970 as the trade mark of
Mister Transmission Systems Limited, which had
used it since 1963 and which thereafter continued
to use it in association with the services of repair
ing, replacing, renewing and installing automobile
transmissions until 1977 when the mark was
assigned, together with the goodwill attaching to
it, to the appellant. Following the assignment, the
former owner continued to use the trade mark
under a registered user agreement with the
appellant.
3 Subsection 12(1):
12. (1) Subject to section 13, a trade mark is registrable
if it is not
(d) confusing with a registered trade mark; or
The position taken by counsel for the Registrar
was that the use of the two marks in the same
area, one indicating origin and the other a stand
ard would be confusing to the public both in the
ordinary sense of the term and within the meaning
of the term as defined in the statute, and that the
subject matter of the application was not regis-
trable notwithstanding the provision of subsection
15(1).
I am inclined to agree that the use of the two
marks in the same area could be confusing in the
ordinary sense but, as the term is defined by the
Act as having a particular meaning, that meaning,
in my view, must prevail and what must be con
sidered is whether the use of both marks in the
same area would be confusing, or likely to cause
confusion, in the statutory sense.
The word "confusing" as used in the Act is
defined in section 2 as follows:
"confusing" when applied as an adjective to a trade mark or
trade name, means a trade mark or trade name the use of
which would cause confusion in the manner and circum
stances described in section 6;
Section 6 provides:
6. (1) For the purposes of this Act a trade mark or trade
name is confusing with another trade mark or trade name if the
use of such first mentioned trade mark or trade name would
cause confusion with such last mentioned trade mark or trade
name in the manner and circumstances described in this
section.
(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 such trade marks are manufactured,
sold, leased, hired or performed by the same person, whether or
not such wares or services are of the same general class.
(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.
As the subject matter of the application as
applied for is broad enough to embrace the mark
Mister TRANSMISSION and is in any case very
similar to it, in sound and in the ideas suggested by
them if not also in appearance, and having regard
to the length of time the registered mark has been
in use as well as to the fact it has been used in
association with services of the same kind as those
in respect of which the registration is sought, it
appears to me that the use of the mark MISTER
TRANSMISSION by - licensees of the appellant,
though intended to indicate a standard, in the
same area as that in which the trade mark Mister
TRANSMISSION is used for the purpose for which it
is registered, would be likely to lead to the infer
ence that the services associated with such trade
marks were performed by the same person within
the meaning of subsection 6(2) and thus to cause
confusion. However, at this point, it becomes
necessary to consider the effect of section 15 and
in particular subsection 15(1). It provides:
15. (1) Notwithstanding section 12 or 14, confusing trade
marks are registrable if the applicant is the owner of all such
trade marks, which shall be known as associated trade marks.
This provision appears to me to override the
exception provided for in paragraph 12(1)(d) and
to be an answer to the objection that the subject
matter applied for is confusing with the registered
mark.
While the registered mark and the certification
mark are used for quite different purposes, the
first for the purpose of distinguishing the services
of the owner of the mark from services performed
by others, and the other for the purpose of distin
guishing services of the defined standard from
services that are not of such a defined standard
and they are thus marks of different categories or
types, both are included in the definition of "trade
mark" in section 2 of the Act and there is nothing
in the Act, as there was in paragraph 28(1)(b) 4 of
4 S.C. 1932, c. 38; R.S.C. 1952, c. 274.
28. (1) Notwithstanding anything hereinbefore contained,
(b) similar marks are registrable for similar wares if the
applicant is the owner of all such marks, which shall be
(Continued on next page)
the Unfair Competition Act, which prohibits a
person from owning registered marks of both types
so long as he complies with subsection 23(1) and is
not engaged in the performance of services of the
kind in association with which the certification
mark is used. If he is not so engaged, the fact he is
on the register as being the owner by assignment
of a registered trade mark with which the certifi
cation mark is confusing appears to me to be
irrelevant to his right to registration of the certifi
cation mark.
Reference was made to Fox on the Canadian
Law of Trade Marks and Unfair Competition, 3rd
ed., at page 210 and it was submitted that, as the
marks were not of the same class, they cannot be
associated marks, but, as I read it, what Fox refers
to is the situation where a person is manufacturing
or selling wares or performing services and is thus
ineligible under subsection 23 (1) to obtain regis
tration of a certification mark. The learned author
goes on to say that paragraph 28(1)(b) of the
Unfair Competition Act legislated against a situa
tion that never could have arisen, which was no
doubt true under that legislation, that paragraph
28(1)(c) of that Act adequately covered such a
situation and that section 24 of the 1953 Act is
equally effective. It does not appear to me, how
ever, that either paragraph 28(1)(c) of the former
Act or section 24 of the 1953 Act deals with the
point here in question.
Whether under the present Act the registration
of Mister TRANSMISSION is capable of continuing
as a valid registration in association with the cer
tification mark MISTER TRANSMISSION, whether
the certification mark MISTER TRANSMISSION is
capable of distinguishing services of a defined
standard from others while the mark Mister
TRANSMISSION is in use to indicate the origin of
services of the same kind, and whether the effect
of the appellant having licensed others, who are
not registered users, to use MISTER TRANSMIS -
(Continued from previous page)
known as associated marks, but no group of associated
marks shall include both a mark intended to indicate that
the wares bearing it have been manufactured, sold, leased,.
or hired by the owner of the mark and a mark intended to
indicate that the wares bearing it are of a defined standard
or have been produced under defined working conditions,
by a defined class of persons or in a defined territorial
area;
SION as a certification mark has invalidated the
registration of Mister TRANSMISSION 5 are all
questions which do not appear to me to arise on
this appeal. The point here, as I see it, is simply
whether the presence on the register of the regis
tered mark Mister TRANSMISSION, owned by the
appellant, with which the certification mark
applied for is confusing, constitutes a bar, under
paragraph 12(1)(d), to the application. Because of
subsection 15(1), I am of the opinion that it is not
a bar.
I turn now to the second of the Registrar's two
objections, that on which his decision is based. The
decision follows:
Re: Certification Mark—MISTER TRANSMISSION Mister
Transmission (International) Limited
Your correspondence of February 2, 1978 is acknowledged.
The representations submitted in your letter have been duly
considered and I have come to the conclusion in view of
Sections 36(1)(b) and 23 of the Trade Marks Act that the
certification mark MISTER TRANSMISSION pending under No.
409,694 is not registrable.
Section 23 of the Trade Marks Act provides for the adoption
and registration of a certification mark by a person who is not
engaged in the "manufacture, sale, leasing or hiring of wares or
the performance of services in association with which the
certification mark is used".
Under the provisions of Section 49, the use of a trade mark by
a registered user is referred to as "permitted use". This permit
ted use by the registered user has the same effect as use by the
registered owner.
Therefore, in the present case, although the registered owner of
the trade mark MISTER TRANSMISSION Design registered
under No. 170,256 has appointed a registered user, the regis
trant is deemed to be using the trade mark. Accordingly Mister
Transmission (International) Limited is deemed to be engaged
in the performance of the services covered by registration No.
170,256.
Since the registrant is engaged in "repairing, replacing, renew
ing and installing automobile transmissions" it cannot be the
applicant for a certification mark claiming similar or identical
services.
Accordingly, this application is refused pursuant to Section
36(1) of the Trade Marks Act.
Section 23 is one of three sections of the Act
which follow the title "Certification Marks". Its
first two subsections read:
5 Compare Marketing International Ltd. v. S.C. Johnson &
Son, Limited [1979] 1 F.C. 65, where the registration was
expunged because, though used by a registered user, the use
made of the trade mark by the registered user did not in fact
distinguish the wares as those of the registered owner of the
mark.
23. (1) A certification mark may be adopted and registered
only by a person who is not engaged in the manufacture, sale,
leasing or hiring of wares or the performance of services such as
those in association with which the certification mark is used.
(2) The owner of a certification mark may license others to
use the mark in association with wares or services that meet the
defined standard, and the use of the mark accordingly shall be
deemed to be use thereof by the owner.
As a certification mark cannot be registered as a
proposed trade mark, in order to be registered it
must be in use when the application for registra
tion is made. But as, under subsection 23(1), the
applicant for registration may not be engaged in
the manufacture, sale, leasing or hiring of wares or
the performance of services such as those in asso
ciation with which the certification mark is used, it
is impossible for him to rely on use by himself in
order to secure the registration.
Subsection 23(2) appears to remedy this by
providing that use by a licensee of the owner shall
be deemed to be use by the owner. But plainly,
such use is not deemed to be equivalent to engag
ing in the manufacture, sale, leasing or hiring of
wares or the performance of services. If it were,
the owner would be disqualified by subsection
23(1), with the result that no one could ever
qualify to register a certification mark.
Subsection 49(3), the provision invoked by the
Registrar to reach his conclusion, occurs in a
group of sections which follow the title "Regis-
tered Users". Subsections 49(1),(2) and (3) read:
49. (1) A person other than the owner of a registered trade
mark may be registered as a registered user thereof for all or
any of the wares or services for which it is registered.
(2) The use of a registered trade mark by a registered user
thereof in accordance with the terms of his registration as such
in association with wares or services manufactured, sold, leased,
hired or performed by him, or the use of a proposed trade mark
as provided in subsection 39(2) by a person approved as a
registered user thereof, is in this section referred to as the
"permitted use" of the trade mark.
(3) The permitted use of a trade mark has the same effect
for all purposes of this Act as a use thereof by the registered
owner.
These provisions are designed to prevent the loss
of rights by the owner of a trade mark which
would otherwise flow from his own failure to use
the trade mark or from his permitting others to use
it. For the purpose of the requirement that the
owner, in order to maintain his right to registra
tion, use the mark and, for the purpose of avoiding
the destructive effect of permitting others to use
the trade mark, the use of the trade mark by a
registered user, for all purposes of the Act, has the
same effect as use by the registered owner. But, in
my opinion, it does not follow that, because a trade
mark is used by a registered user and because, for
the purposes of the Act, that use has the same
effect as use by the registered owner, the regis
tered owner must be deemed to be engaged in the
manufacture, sale, leasing or hiring of the wares or
the performance of the services in association with
which the trade mark is used. The statute does not
say so. It does not say so in subsection 49(3) any
more than it does in subsection 23(2). It is one
thing to say of the owner of a mark who is engaged
in supplying services that the supplying of services
by another in association with the mark shall, if
done by a registered user in accordance with the
terms of a registered user agreement, have the
same effect for purposes of the Act as use by the
owner. For purposes of the Act, the use by the
registered user accrues to the owner. But it is quite
another thing and it involves a large and unwar
ranted extension of this to say that, because a
registered user uses a mark, the owner of it is for
purposes of the Act engaged in supplying services.
In the present case, the material before the
Court indicates that the appellant does not per
form any of the services referred to in the applica
tion. Its function is simply to hold and license or
permit use of its trade marks by others who per
form such services. It was submitted that, because
the appellant is affiliated with the former owner of
the trade mark Mister TRANSMISSION, which per
forms such services, it should be regarded as fall
ing within the meaning of "engaged in the
performance of services such as those in associa
tion with which" the subject matter of the applica
tion is used, within the meaning of subsection
23(1). However, the two companies are separate
entities carrying on separate corporate enterprises,
and I do not think there is, in the material before
the Court, any basis for reaching such a conclu
sion. Moreover, the statement in paragraph 3A of
the application, as amended, that the appellant is
not (in fact) engaged in the performance of the
services was not challenged by the Registrar. His
conclusion that the appellant is so engaged, as I
read it, was based entirely on his view of the effect
of subsection 49(3).
I am accordingly of the opinion that the Regis
trar should not have been satisfied that the certifi
cation mark of which registration was sought was
not registrable either for the reason that it was
confusing with the registered trade mark Mister
TRANSMISSION or for the reason that the appel
lant must be deemed to be engaged in the perform
ance of services such as those in association with
which the certification mark, MISTER TRANSMIS
SION, is used and that the application should not
have been refused under subsection 36(1)(b) for
either of such reasons.
The appeal will therefore be allowed and the
matter will be referred back to the Registrar to
proceed with the application on that basis.
In accordance with the practice of the Court,
the Registrar will not be ordered to pay costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.