T-8069-82
Carling Breweries Limited (Appellant)
v.
Molson Companies Limited—Les Compagnies
Molson Limitée and Registrar of Trade Marks
(Respondents)
Trial Division, Strayer J.—Ottawa, March 21, 22
and April 13, 1984.
Trade marks — Appeal from registration of "Canadian" as
trade mark designating brand of beer — Although s. 10 of Act
not put in issue in opposition proceedings, Registrar consider
ing s. 10 not barring registration — While court or' tribunal
should refrain from deciding legal issues dependent on facts
not pleaded, s. 10 ground of appeal marginal as Registrar
correctly concluding opponent not meeting onus of establishing
"ordinary and bona fide commercial usage" by which
"Canadian" recognized as designating beer's place of origin
prior to 1959 — "Canadian" prima facie unregistrable pursu
ant to s. 12(1)(b) as descriptive of beer's place of origin — S.
12(2) providing exception if mark used by applicant so as to
have become distinctive of product at date of filing of applica
tion for registration — Statement in E. & J. Gallo Winery v.
Andres Wines Limited that date opposition filed relevant date
obiter dicta — Case distinguished as opposition based on s.
37(2)(d) (distinctiveness), not s. 37(2)(b) (registrability) —
Onus on applicant/respondent to prove "Canadian" distinctive
of its beer — Registrar erred in stating onus on opponent to
show mark not within s. 12(a) — Notwithstanding Registrar
concluding applicant proving distinctiveness, error concerning
onus possibly affecting decision — Applicant not discharging
onus of proving distinctiveness — Appeal allowed — Trade
Marks Act, R.S.C. 1970, c. T-10, ss. 10, 12(1)(b),(2), 29, 36(1),
37(2) (b), (d), (3) (a).
The respondent applied for registration of "Canadian" as a
trade mark for one of its brands of beer. The appellant opposed
the application on the ground that "Canadian" was not distinc
tive of the applicant's goods, and in particular that the appli
cant had not met the requirements of subsection 12(2) of the
Trade Marks Act with respect to proving distinctiveness.
Although the statement of opposition did not mention section
10 of the Act the Registrar held that section 10 did not apply to
prevent registration and that the distinctiveness of "Canadian"
had been adequately established. The appellant alleges that the
Registrar erred in failing to find that "Canadian" had become
recognized as designating the place of origin of the wares and
was therefore contrary to section 10; that he failed to attach
sufficient weight to evidence of use of another brewer of a
warranty clause including the word "Canadian"; and that he
erred in accepting the respondent's evidence as sufficient to
show distinctiveness.
Held, the appeal is allowed. The section 10 issue was not
argued before the Registrar but he dealt with it in his decision.
While a court or tribunal of first instance may invoke principles
of law not argued before it, it should apply such principles to
the facts as pleaded and proved. Where the necessary allega
tions have not been pleaded, a court or tribunal should refrain
from deciding legal issues dependent on such facts, as should an
appellate court in a subsequent appeal. The section 10 issue was
perhaps not properly before the Registrar nor the Court. In any
event, the Registrar correctly concluded that the opponent did
not adequately establish that section 10 was a bar to the
registration of the applicant's trade mark. The opponent did not
meet the onus of establishing an "ordinary and bona fide
commercial usage" by which "Canadian" has become recog
nized as designating the place of origin of beer in and before
1959.
"Canadian" is clearly descriptive of the place of origin of
beer made in Canada. The mark is prima facie not registrable
pursuant to paragraph 12(1)(b), unless it can be brought within
subsection 12(2) on the basis that it had been so used by the
respondents as to have become distinctive of their product at
the date of the filing of an application for its registration.
Although it was remarked in E. & J. Gallo Winery v. Andres
Wines Limited that the material time for the purposes of an
opposition based on paragraph 37(2)(d) "that the trade mark is
not distinctive" is the date of filing of the opposition, this
appears to have been obiter dicta. Also, it related to paragraph
37(2)(d), not paragraph 37(2)(b) "that the trade mark is not
registrable".
The Registrar concluded that the onus with respect to the
issue of distinctiveness was on the opponent. The Registrar's
decision under subsection 36(1) to advertise the application for
registration was not a decision that the trade mark was
registrable; it was a decision that he was not satisfied that it
was not registrable. Paragraph 37(2)(b) may thus be ground
for opposition on the basis that the mark is not registrable
because it does not come within the exception in subsection
12(2). The onus is on the applicant/respondent to prove that the
mark "Canadian" had become distinctive of its particular
brand of beer at the date of filing of the application for
registration under subsection 12(2). While the Registrar held
that the applicant had proved the distinctiveness of the mark,
his conclusions may have been affected by his view as to where
the onus lay. The onus on the applicant was heavy particularly
since "Canadian" is an adjective, the primary meaning of
which is to describe any citizen of this country or any product
originating in Canada. The applicant has not discharged the
onus of showing that "Canadian" has become so distinctive of
its product that it has acquired a secondary meaning which
would not be confused with the primary meaning by the general
public.
Evidence consisting of a survey indicating that the majority
of beer drinkers in bars were served a Molson's "Canadian"
when they asked for a "Canadian" was not convincing as those
sampled were "professionals who are used to responding to
incomplete cues and thus are representative of the wrong
population". Evidence that "Canadian" is used to distinguish
between domestic and imported brands detracts from the con
tention that "Canadian" has in the field of beer achieved an
established, generally recognized, secondary meaning of identi
fying a brand of beer sold by Molson's.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
E. & J. Gallo Winery v. Andres Wines Limited, [1976] 2
F.C. 3; 25 C.P.R. (2d) 126 (C.A.).
REFERRED TO:
Crush International Ltd. v. Canada Dry Ltd. (1979), 59
C.P.R. (2d) 82 (T. M. Opp. Bd.); Leco Industries Ltd. v.
W. R. Grace & Co. (1980), 62 C.P.R. (2d) 102 (T. M.
Opp. Bd.); American Cigarette Co. S.A. (Canada) Ltd. v.
Macdonald Tobacco Inc. (1978), 39 C.P.R. (2d) 116
(Reg.); The Canadian Shredded Wheat Co., Ld. v.
Kellogg Co. of Canada Ld. et al. (1938), 55 R.P.C. 125
(P.C.); J.H. Munro Limited v. Neaman Fur Company
Limited, [1946] Ex.C.R. 1; 5 Fox Pat. C. 194; Beverley
Bedding & Upholstery Co. v. Regal Bedding & Uphol
stering Ltd. (1980), 47 C.P.R. (2d) 145 (F.C.T.D.);
Benson & Hedges (Canada) Limited v. St. Regis Tobacco
Corporation, [1969] S.C.R. 192; 57 C.P.R. 1.
COUNSEL:
Donald F. Sim, Q.C. and Toni Poison Ashton
for appellant.
John S. Macera and Andrew K. Jarzyna for
respondents.
SOLICITORS:
Sim, Hughes, Toronto, for appellant.
Macera & Jarzyna, Ottawa, for respondents.
The following are the reasons for judgment
rendered in English by
STRAYER J.:
Facts
On December 10, 1971 the respondent filed an
application with the Registrar of Trade Marks for
registration of the word "Canadian" as a trade
mark. It alleged, and this does not appear to have
been refuted, that it had been using this mark
since November, 1959 to designate one of the
brands of beer which it produces and sells. In due
course, the application was advertised in the Trade
Marks Journal for December 25, 1974. On Febru-
ary 13, 1975, the appellant filed a statement of
opposition. This statement asserted that
"Canadian" was not distinctive of the goods of the
applicant and in particular that the applicant had
not met the requirements of subsection 12(2) of
the Trade Marks Act [R.S.C. 1970, c. T-10] with
respect to proving distinctiveness.
A decision was rendered on behalf of the Regis
trar by the Chairman of the Trade Marks Opposi
tion Board on August 12, 1982. That decision is
now reported at 70 C.P.R. (2d) 154. Although the
statement of opposition had made no specific men
tion of section 10 of the Trade Marks Act the
Chairman considered it to be arguably one of the
issues involved as well as that of the application of
subsection 12(2) which was specifically referred to
in the statement of opposition. He held that section
10 did not apply so as to prevent registration of the
trade mark and he further held that the distinc
tiveness of "Canadian" as related to the appli
cant's goods had been adequately established, or
not adequately challenged, so that registration was
justified under subsection 12(2) or otherwise.
The appellant has appealed from this decision
made by the Chairman on behalf of the Registrar
(hereinafter referred to simply as "the Registrar")
on the following grounds:
(i) the Registrar erred in failing to find that the
word "Canadian" had become recognized in
Canada as designating the wares and therefore
was contrary to section 10 of the Trade Marks
Act;
(ii) the Registrar erred in failing to attach suffi
cient weight to evidence of use of another
brewer in Canada of a warranty clause which
includes the word "Canadian" on beer cartons;
and
(iii) the Registrar erred in accepting the Molson
evidence as sufficient to show distinctiveness.
Conclusions
(1) Section 10—This section provides as follows:
10. Where any mark has by ordinary and bona fide commer
cial usage become recognized in Canada as designating the
kind, quality, quantity, destination, value, place of origin or
date of production of any wares or services, no person shall
adopt it as a trade mark in association with such wares or
services or others of the same general class or use it in a way
likely to mislead, nor shall any person so adopt or so use any
mark so nearly resembling such mark as to be likely to be
mistaken therefor.
In my view this section was not properly put in
issue in the opposition proceedings. While one
might not expect to find in such proceedings resort
to the technical rules of pleading, paragraph
37(3)(a) of the Act does require that the state
ment of opposition set out "the grounds of opposi
tion in sufficient detail to enable the applicant to
reply thereto". It is an elementary condition of
fairness that each party be adequately informed of
the case it has to meet. Different facts might well
have to be introduced to demonstrate that the
mark in question does or does not come within the
prohibitions of section 10. These facts might well
be different from those relevant to the application
of subsection 12(2): for example the critical dates
as to public recognition of the mark may be differ
ent in the two cases.
It appears that the section 10 issue was not
actually argued before the Registrar. Nevertheless
he did deal with it in his decision. Presumably for
that reason the appellant has specifically dealt
with it in its notice of appeal. It is doubtful that
this Court should deal with the issue under these
circumstances. While it may well happen that a
court or tribunal of first instance may invoke
principles of law not argued by either party before
it, it should apply such principles to the facts as
pleaded and proved. Where the necessary allega
tions have not been pleaded a court or tribunal
should refrain from deciding legal issues depend
ent on such facts as should an appellate court in a
subsequent appeal. On this basis, the section 10
issue was at best marginal and perhaps not proper
ly before the Registrar or me for determination.
In any event, I am in agreement with the con
clusion reached by the Registrar that the opponent
did not adequately establish that section 10 was a
bar to the registration of the applicant's trade
mark. It should first be noted that the relevant
date for determining the "ordinary and bona fide
commercial usage" of the mark for the purposes of
section 10 would be the date when the applicant
first started to use it, namely, November, 1959.
(See Crush International Ltd. v. Canada Dry Ltd.
(1979), 59 C.P.R. (2d) 82, at page 88 (T. M. Opp.
Bd.); Leco Industries Ltd. v. W. R. Grace & Co.
(1980), 62 C.P.R. (2d) 102, at page 109 (T. M.
Opp. Bd.).) In my view the onus was on the
opponent to prove that section 10 was applicable to
the applicant's trade mark. Section 10 provides a
ground for attack of a trade mark which is other
wise registrable and to establish that section 10
applies it is necessary to prove an "ordinary and
bona fide commercial usage" by which the mark
has become recognized "as designating the kind,
quality, quantity, destination, value, place of origin
... of any wares or services". In the present case
the issue was principally as to "place of origin". I
respectfully agree with the Registrar that the
opponent did not by its opposition evidence ade
quately establish such a usage of the mark
"Canadian" in and before 1959 to establish its
clear recognition in Canada as designating the
place of origin of beer or any particular beer. Nor
did the new evidence filed by the appellant in this
appeal: indeed, as far as I can determine, none of it
relates to 1959 or earlier, and most of it relates to
the late 1960's, the 1970's, and the 1980's.
(2) Parag z raph 12(1)(b) and subsection 12k2)—
These provisions are as follows:
12. (1) Subject to section 13, a trade mark is registrable if it
is not
(b) whether depicted, written or sounded, either clearly
descriptive or deceptively misdescriptive in the English or
French languages of the character or quality of the wares or
services in association with which it is used or proposed to be
used or of the conditions of or the persons employed in their
production or of their place of origin;
(2) A trade mark that is not registrable by reason of para
graph 1(a) or (b) is registrable if it has been so used in Canada
by the applicant or his predecessor in title as to have become
distinctive at the date of filing an application for its
registration.
It is common ground that the mark "Canadian" is
now clearly descriptive of the place of origin of
beer made in Canada. Thus the mark is prima
fade unregistrable unless it can be brought within
subsection 12(2) on the basis that it had been so
used by the respondents so as to have become
distinctive of their product at the date of the filing
of an application for its registration, namely
December 10, 1971.
In my view this was the main issue in the
opposition proceedings and it is the main issue on
this appeal. The opposition should be seen as
essentially based on the grounds authorized by
paragraph 37(2)(b), namely "that the trade mark
is not registrable". As noted, this mark is prima
fade unregistrable by virtue of paragraph
12(1)(b) unless it can be shown that it had become
distinctive "at the date of filing an application for
its registration". Therefore the material time in
this case for the application of paragraph 37(2)(b)
is the date of filing of the application for registra
tion. I am aware that in E. & J. Gallo Winery v.
Andres Wines Limited, [1976] 2 F.C. 3 (C.A.), at
page 7; 25 C.P.R. (2d) 126, at page 130 it was said
by Thurlow J. (as he then was) for the Court of
Appeal that the material time for the purposes of
an opposition based on paragraph 37(2)(d) "that
the trade mark is not distinctive" is the date of the
filing of the opposition. This appears to have been
obiter dicta, however, as he goes on to say that in
that case it did not matter which date was chosen.
Furthermore, as it relates to paragraph 37(2)(d)
and not paragraph 37(2)(b) I do not think it is
determinative in the present case. Where registra-
bility depends on the criterion in subsection 12(2)
that the mark be "distinctive at the date of filing
an application for its registration" I do not see how
its distinctiveness at the date of the filing of an
opposition should be determinative if there were in
fact a difference in its distinctiveness as between
the two dates.
It is, perhaps, important that I emphasize that
the central issue in this appeal is subsection 12(2)
as counsel for the respondent strongly contended
that a finding of distinctiveness at the time of
application for registration had already been made
by the Registrar under subsection 12(2) and that
such a finding could not be the subject of the
opposition proceedings nor of this appeal. He fur
ther contended that the only remaining statutory
basis for the opposition was paragraph 37(2)(d).
From this he invited me to draw certain conclu
sions as to the onus of proof and as to the relevant
facts (contending that on the basis of the Andres
case, supra, the relevant date for distinctiveness
was that of the filing of the opposition). The
Registrar in his decision appears to have reached
the conclusions urged upon me, namely, that the
onus with respect to the issue of distinctiveness
was on the opponents appellant and that the rele
vant date for testing distinctiveness was that of the
filing of the opposition. After a review of the
statute I am satisfied that this is not the case.
Where an application for registration is filed under
section 29, the Registrar must consider it and then
make a decision under subsection 36(1). Under
that subsection he can decide basically one of two
things: either, to refuse the application if he is sure
it is not registrable; or, if he is not sure that it is
not registrable he must advertise it. A decision to
advertise is not a decision that a trade mark is
registrable; it is a decision by the Registrar that he
is not satisfied that it is not registrable. Therefore
the fact of the trade mark being advertised is not
indicative of a positive decision as to its registrabil-
ity vis-Ã -vis subsection 12(2). Paragraph 37(2)(b)
may thus be used for grounds for an opposition to
the application on the basis that the mark is not
registrable because it does not come within the
exception in subsection 12(2). That subsection cre
ates an exception to the general rule, laid down in
paragraph 12(1)(b) that, as in this case, a mark
descriptive of the place of origin of the product is
prima fade not registrable. As in any case where a
party wishes to take advantage of an exception in
the law, the onus is on him to show that he comes
within it. Therefore the onus in this case remains
on the applicants respondent to prove that the
mark "Canadian" had become distinctive of its
particular brand of beer that bears this name at
the date of filing of the application for registra
tion, namely December 10, 1971. (See generally
American Cigarette Co. S.A. (Canada) Ltd. v.
Macdonald Tobacco Inc. (1978), 39 C.P.R. (2d)
116, at pages 119-120 (Reg.); Goldsmith, Trade
Marks and Industrial Designs, 32 C.E.D. (Ont.
3rd), paragraph 119.) I have given particular
emphasis to the matter of onus of proof as the
Registrar in his decision in the present case stated
several times that in his view the onus was not on
the applicant for registration of the mark to show
that it came within subsection 12(2) but instead
was on the opponent to show that it did not. (See
the Registrar's decision, 70 C.P.R. (2d) 154, at
pages 164, 168, 176-177.) While the Registrar
held that the applicant had nevertheless satisfac
torily proven the distinctiveness of the mark, his
conclusions may have been affected to some extent
by his view as to where the onus really lay.
I am not only of the view that the onus lay
instead on the applicant to prove distinctiveness
within subsection 12(2), but I also think that it
was a very heavy onus given the nature of the
mark "Canadian". There are various authorities to
the effect that where one must prove that a nor
mally descriptive word has acquired a secondary
meaning so as to make it descriptive of a particular
product, the onus is indeed heavy: see, for exam
ple, The Canadian Shredded Wheat Co., Ld. v.
Kellogg Co. of Canada Ld. et al. (1938), 55
R.P.C. 125, at page 142 (P.C.); J.H. Munro Lim
ited v. Neaman Fur Company Limited, [1946]
Ex.C.R. 1, at pages 14-15; 5 Fox Pat. C. 194, at
page 208. In my view this is particularly true
where the word is one such as "Canadian" which
is first and foremost, legally and factually, an
adjective describing any citizen of this country,
and more particularly for present purposes any
product of any sort having its point of origin in this
country. As used in conjunction with the word
"beer" it is capable of describing any such malt
beverage produced in Canada by any brewer. The
onus, as I have noted above, is on the applicant for
registration of such a mark to demonstrate clearly
that it has become so distinctive of his product that
it has acquired a secondary meaning which would
not, vis-Ã -vis the relevant public, normally be
confused with the primary meaning of the word.
I am not satisfied that the applicant/respondent
has discharged that onus. Again, it must be kept in
mind from what I have said above that the rele
vant date for demonstrating that the mark had
achieved such distinctiveness was December 10,
1971. In my view the only evidence which can be
given much weight is that which relates to percep
tions of the mark in or about 1971. The principal
evidence relevant for this purpose was the material
filed with the application consisting of an affidavit
of Mr. Thomas King of International Surveys
Limited as to a survey conducted by his company
in 1971 and 1972 of a sample of beer vendors,
together with some 59 affidavits from those in the
beer retail business such as bar managers, waiters,
waitresses, etc. The survey was conducted pre
dominantly in a few urban locations and the
majority were places where beer is consumed on
the premises as compared to those engaged in sale
of beer for off-premises consumption. The survey
indicated that in the majority of such situations
when the surveyors asked for a "Canadian" they
were served a Molson's beer of that brand. Simi
larly the affidavits were predominantly from those
engaged in on-premises sales and they were to the
general effect that when customers asked such
persons engaged in the retail beer trade for a
"Canadian" they served their customers a Mol -
son's beer of that brand. They also indicated that a
high percentage of consumers of this brand asked
for it by the name "Canadian", or sometimes
"Molson's Canadian". While this evidence is not
without value I do not find it convincing. The
appellant/opponent in the proceedings before the
Registrar filed the affidavit of Charles S. Mayer, a
professor of marketing at York University and an
expert on market surveys. In his affidavit he
analyzed a similar survey done on behalf of the
applicant/respondent in 1977 (see affidavit of
Rolfe Schliewen of August 5, 1977), and he
strongly criticized the methodology employed in
that survey which, it appears, was deliberately
done on essentially the same basis as the one
conducted in 1971-72. Among the weaknesses he
pointed out were the fact that the sampling was
unrepresentative, and that those surveyed were
"professionals who are used to responding to
incomplete cues and thus, are representative of the
wrong population". In effect he was saying that to
ascertain whether, a descriptive word has really
become distinctive of a particular product it is
necessary to survey the people who use the prod
uct, and this was not done. I find this to be a
telling criticism of both surveys and even if I
should be wrong in finding that the relevant date
for establishing distinctiveness was December 10,
1971 instead of February 13, 1975, the date of the
filing of the opposition, I think the result would be
the same. The principal evidence of distinctiveness
in 1975 would probably be the survey conducted in
1977 but this is flawed in the same way as is the
earlier survey.
I should also mention that the appellant/oppo-
nent did introduce considerable evidence demon
strating that a common use of the term "Canadi-
an" in the beer retail business in Canada is to
distinguish between those brands which are domes
tic and those which are imported. Thus, as was
demonstrated by the evidence, it is common for
provincial liquor boards, and restaurants, to list
beers under the headings of "Canadian" and
"imported". While I did not find this evidence to
be compelling proof either of an exclusive meaning
for "Canadian" as distinguishing domestic from
imported beer, it is no doubt one very common use
of the word "Canadian" in association with beer.
At the very least it can be said to detract from the
contention of the applicant/respondent that
"Canadian" has in the field of beer achieved an
established, generally recognized, secondary mean
ing of identifying a brand of beer sold by Molson's.
While I reject with reluctance the conclusions of
fact in this respect reached by the Registrar, I
understand it to be my responsibility, where the
appeal is as to conclusions of fact and not as to the
propriety of the exercise of a discretion by the
Registrar, to form my own opinion on the facts:
see Beverley Bedding & Upholstery Co. v. Regal
Bedding & Upholstering Ltd. (1980), 47 C.P.R.
(2d) 145 (F.C.T.D.); Benson & Hedges (Canada)
Limited v. St. Regis Tobacco Corporation, [1969]
S.C.R. 192; 57 C.P.R. 1.
I conclude that the applicant has not met the
burden of proof on it to establish the distinctive
ness of the mark "Canadian" in this context and
the mark is therefore not registrable in accordance
with its application. I therefore would allow the
appeal with 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.