T-48-89
Citrus Growers Association Ltd. and Jamaica
Export Trading Company Limited (Applicants)
v.
William D. Branson Limited (Respondent)
INDEXED AS: CITRUS GROWERS ASSN. LTD. V. WILLIAM D.
BRINSON LTD. (T.D.)
Trial Division, Rouleau J.—Toronto, October 23,
1989; Ottawa, January 9, 1990.
Trade marks — Expungement — No right in importer/
agent to register, under own name and for own benefit, trade
mark owned by foreign principal — Obligation on importer/
agent to register mark on behalf of foreign principal — "Use"
by agent "use" by foreign principal — Breach of fiduciary
obligations of importer/agent to foreign principal legitimate
basis of attack — Court without jurisdiction to substitute one
registered owner for another — Act s. 17(2) 5-year limitation
period not applicable as mark "used" by owner through agent.
The applicant, Citrus Growers Association Limited (CGA),
was a Jamaican company whose members included Jamaican
farmers and fruit growers. Jamaica Export Trading Company
(Jetco) was a Jamaican exporter which acted as agent for
CGA. The respondent, Branson, was a Canadian importing
company. "Ortanique" is a fruit combining the orange and the
tangerine, developed in Jamaica in the 1920's. It is also a trade
mark for the fruit, registered by CGA in several countries
throughout the world. From 1978 to 1981, Branson imported
Ortaniques through Jetco. From then on, Branson continued to
import Ortaniques directly from various Jamaican producers.
Branson, without the consent or knowledge of the applicants,
obtained registration of "Ortanique" in Canada in March
1980.
This is an application by CGA and Jetco against Branson for
an order striking the respondent's registration of the trade
mark "Ortanique" on the ground that Branson was under a
legal obligation as agent and fiduciary to register the mark only
on behalf of CGA, the proper owner of the mark and the only
one entitled to registration. They also seek to have the register
amendéd to substitute CGA as the registered owner of the
mark.
Held, the application should be allowed in part.
The second prayer for relief could not be granted. It is a
well-settled principle of trade mark law that this Court does not
have jurisdiction to substitute one registered owner for another.
Whatever the respective rights of the parties may be, a party
seeking registration of a trade mark must satisfy the whole of
the scheme of the Act, by applying through the proper channels
for trade mark registration.
The case law under section 57 is clear that an importer or
agent has no right to register a trade mark owned by a foreign
principal, under his own name and for his own benefit. Any
thing the importer does with respect to the mark must be for
the benefit of the foreign supplier and owner of the mark. On
the wording of section 57, breach of the fiduciary obligation of
an importer/agent to his foreign principal is a legitimate basis
of attack, and the applicant can succeed on this ground alone.
Use in Canada by a wholesaler or distributor of goods
bearing the mark of the foreign trade mark owner is use by the
foreign owner, not the Canadian importer. There has therefore
been no use in Canada by the respondent and it was not entitled
to registration.
The lack of a written exclusive distributorship agreement
does not alter the fact that Branson was acting on behalf of
CGA, through Jetco, in importing goods covered by the trade
mark. Branson was therefore an importing agent who ultimate
ly owed a fiduciary duty of care to its principal. That duty was
breached by the registration of the trade mark.
Athough CGA did not sell Ortaniques in Canada subsequent
to 1981, the respondent could not argue that the mark had been
abandoned because, at the date of the respondent's application
for registration, the relevant date for the purpose of expunge -
ment proceedings under section 17 of the Act, the mark was
actively in use in Canada.
Nor could Branson invoke the 5-year limitation period pre
scribed by subsection 17(2) of the Act because use by the
respondent was use by the rightful owner, whose consent had
not been obtained.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Trade-marks Act, R.S.C., 1985, c. T-13, ss. 4, 16, 17,
18(1), 57.
CASES JUDICIALLY CONSIDERED
APPLIED:
Friendly Ice Cream Corp. v. Friendly Ice Cream Shops
Ltd., [1972] F.C. 712; (1972), 7 C.P.R. (2d) 35 (T.D.);
Royal Doulton Tableware Limited v. Cassidy's Ltd.,
[1986] 1 F.C. 357; (1984), 5 C.I.P.R. 10; 1 C.P.R. (3d)
214 (T.D.); Labatt (John) Ltd. v. Carling Breweries Ltd.
(1974), 18 C.P.R. (2d) 15 (F.C.T.D.); Lin Trading Co. v.
CBM Kabushiki Kaisha, [1989] 1 F.C. 620; (1988), 20
C.I.P.R. 1; 25 F.T.R. 80 (C.A.); Wilhelm Layler GmbH
v. Anthes Industries Inc. (1986), 8 C.P.R. (3d) 187; 1
F.T.R. 82 (F.C.T.D.); Waxoyl AG v. Waxoyl Can. Ltd.
(1984), 4 C.I.P.R. 127; 3 C.P.R. (3d) 105 (F.C.T.D.);
Argenti Inc. v. Exode Importations Inc. (1984), 8 C.P.R.
(3d) 174 (F.C.T.D.); Manhattan Industries Inc. v.
Princeton Manufacturing Ltd. (1971), 4 C.P.R. (2d) 6
(F.C.T.D.); Philip Morris Inc. v. Imperial Tobacco Ltd.
(No. 1) (1987), 17 C.P.R. (3d) 289 (F.C.A.).
AUTHORS CITED
Fox, Harold G. Canadian Law of Trade Marks and
Unfair Competition, 3rd ed., Toronto: The Carswell
Company Limited, 1972.
COUNSEL:
Robert A. Spence for applicants.
Kenneth E. Tull for respondent.
SOLICITORS:
Aird & Berlis, Toronto, for applicants.
Beard, Winter, Toronto, for respondent.
The following are the reasons for judgment
rendered in English by
ROULEAU J.: This is an application by Citrus
Growers Association Ltd. ("CGA Ltd.") and Ja-
maica Export Trading Company Limited ("Jet-
co") against William D. Branson Limited ("Bran-
son") for an order striking the respondent's
registration of the trade-mark "Ortanique", on the
grounds that the entry on the register does not
accurately express or define the rights of Branson
as at the date of application or on the date the
registration for the trade-mark was granted
(Trade-marks Act, R.S.C., 1985, c. T-13, section
57); they further seek an amendment to the regis
ter substituting CGA Ltd. as the registered owner
of the trade-mark.
As to the second prayer for relief, it is a well
settled principle of trade-mark law that this Court
does not have the jurisdiction to substitute one
registered owner for another. Whatever this Court
may conclude as to the respective rights of the
parties before it, a party seeking registration of a
trade-mark must satisfy the whole of the scheme
of the Act, by applying through the proper chan
nels for trade-mark registration (Friendly Ice
Cream Corp. v. Friendly Ice Cream Shops Ltd.,
[1972] F.C. 712; (1972), 7 C.P.R. (2d) 35 (T.D.);
Royal Doulton Tableware Limited v. Cassidy's
Ltd., [ 1986] 1 F.C. 357; (1984), 5 C.I.P.R. 10; 1
C.P.R. (3d) 214 (T.D.) Thus, whatever party I
may determine to be entitled to the trade-mark in
issue, I cannot substitute what I perceive to be the
proper owner of the mark.
The facts may be briefly set out as follows:
CGA Ltd. was a Jamaican company whose mem
bers included farmers and fruit growers in Jamai-
ca. Jetco is a Jamaican exporter who acted as
agent for CGA Ltd. The respondent Branson is a
Canadian importing company. At the hearing of
this application it was indicated that in fact CGA
Ltd. no longer exists. However, their standing to
pursue this application was not challenged.
The "Ortanique" is a fruit developed in Jamaica
in the 1920's, combining the orange and the tange
rine. CGA Ltd. is the registered owner of the
trade-mark in several countries throughout the
world.
In February, 1978, Jetco, as agent for CGA
Ltd., entered into a verbal agreement with Bran-
son to supply Ortaniques to Canada. A shipment
was made in 1978 on fixed terms, and further
shipments continued in 1979 and 1981 on consign
ment. Jetco has made no shipments of the product
through Branson since 1981. The evidence indi
cates that this was as a result of "deregulation" in
Jamaica of the sale of Ortaniques, whereby the
respondent was able to buy them directly from
producers rather than solely through CGA Ltd. or
Jetco. Mr. Hernal Hamilton, Director/General
Manager of Jetco, testified that they sold no
Ortaniques in Canada between 1981 and 1985
because they could not obtain a viable price,
although Branson continued to import on their
own from various producers.
There was no written agreement between Jetco
and Branson, although the applicant maintains
that Branson was the importing agent for Jetco
and, through it, for CGA Ltd. Promotional ma
terials meant for consumers were supplied by Jetco
to Branson, which apparently identified
Ortaniques and their point of origin, Jamaica. The
applicants submit that this effectively identified
the fruit with CGA Ltd., who was at that time the
only supplier. The fruit was sold in Canada in
association with the mark "Ortanique", which
they claim gave it a distinctive identity; further,
they argue this mark is in no way distinctive of
Branson.
Branson applied for the trade-mark
"Ortanique" on March 1, 1978, under its own
name. Registration was granted March 20, 1980,
No. 242077.
CGA Ltd. and Jetco claim they did not consent
to or authorize Branson's registration of the trade
mark, and that at all times Branson was acting as
agent for Jetco and through them for CGA Ltd.
They therefore claim that Branson was under a
legal obligation as agent and as fiduciary to regis
ter the trade-mark only on behalf of CGA Ltd.,
who they claim is the proper owner of the mark,
and the only one entitled to registration.
Mr. Hamilton states, and it is not disputed, that
he did not become aware of Branson's registration
until February, 1987, at which time they attempt
ed to persuade Branson to transfer the mark to
CGA Ltd. Branson refused unless it were reim
bursed the registration expenses, guaranteed the
exclusive selling agency in Canada, and recovered
another $25,000 towards marketing expenses.
It is the respondent's position that the applicants
never intended to register the trade-mark in
Canada, but simply needed a temporary market
from 1978 to 1981 to dispose of surplus. Further,
Branson has been importing the Ortaniques for a
period of over 10 years (since 1978), obtaining
their supply from various producers, and expend
ing money and effort to promote the fruit in
Canada. It denies that they were ever the agent or
fiduciary of CGA Ltd. or Jetco, and asserts that it
registered the trade-mark in an effort to protect it
from unauthorized use and consequent injury to
their goodwill. The respondent submits that it is
the party entitled to registration of the trade-mark,
and that the applicants have established no such
right. It states that it was not aware of the appli
cant CGA Ltd.'s ownership of the trade-mark in
other countries at the time of application.
The respondent further argues that the appli
cants are precluded from making the present
application for expungement under subsection
17(2) of the Trade-marks Act, since they did not
object within 5 years of the date of registration.
The applicant is claiming under subsection
57(1) of the Trade-marks Act, which reads as
follows:
57. (1) The Federal Court has exclusive original jurisdic
tion, on the application of the Registrar or of any person
interested, to order that any entry in the register be struck out
or amended on the ground that at the date of the application
the entry as it appears on the register does not accurately
express or define the existing rights of the person appearing to
be the registered owner of the mark.
(2) No person is entitled to institute under this section any
proceeding calling into question any decision given by the
Registrar of which that person had express notice and from
which he had a right to appeal.
I am satisfied that the applicant CGA Ltd., as
owner of the trade-mark in several other countries,
is a "person interested" within the meaning of
section 57. Further, I am prepared to accept that
Jetco, as their selling agent, is also a "person
interested", since they may be affected by the
respondent's registration, having some entitlement
to use of the mark (Labatt (John) Ltd. v. Carling
Breweries Ltd. (1974), 18 C.P.R. (2d) 15
(F.C.T.D.)). It is not necessary that an applicant
show that it is the person entitled to registration of
the mark.
The jurisprudence under section 57 is clear that
an importer or agent has no right to register a
trade-mark owned by the foreign principal, under
his own name and for his own benefit (Lin Trading
Co. v. CBM Kabushiki Kaisha, [1989] 1 F.C. 620;
(1988), 20 C.I.P.R. 1; 25 F.T.R. 80 (C.A.); Wil-
helm Layler GmbH v. Anthes Industries Inc.
(1986), 8 C.P.R. (3d) 187; 1 F.T.R. 82
(F.C.T.D.); Waxoyl AG v. Waxoyl Can. Ltd.
(1984), 4 C.I.P.R. 127; 3 C.P.R. (3d) 105
(F.C.T.D.); Argenti Inc. v. Exode Importations
Inc. (1984), 8 C.P.R. (3d) 174 (F.C.T.D.); Royal
Doulton Tableware Limited v. Cassidy's Ltd.,
supra). Anything the importer does with respect to
the mark must be for the benefit of the foreign
supplier and owner of the mark. The cases have
reached this conclusion in a variety of ways: prior
use by the foreign supplier in Canada (paragraph
16(1)(a)); no "use" by the importer/agent in
Canada within the meaning of sections 4 and 16,
since its use was on behalf of the principal; the
mark is not distinctive of the wares of the respon
dent (paragraph 18(1)(b)); and, generally, the
respondent is not the person entitled to registration
of the mark, on the grounds of the fiduciary
obligation existing between an agent and his
principal.
This last-noted ground has not stood alone as a
basis to expunge, although it is a common thread
running throughout the case law. In each of the
cases noted above, the applicants relied specifically
on sections 16 or 18 of the Act. This has not been
done in the case at bar. However, I am prepared to
accept that, on the wording of section 57, breach
of the fiduciary obligations of an importer/agent to
his foreign principal,is a legitimate basis of attack,
and the applicant can succeed on this ground
alone. I am also satisfied that the present applicant
can fit within other sections of the Act, in accord
ance with the preceding jurisprudence.
Subsection 18 (1) sets out the grounds on which
the registration of a trade-mark is invalid:
18. (1) The registration of a trade-mark is invalid if
(a) the trade-mark was not registrable at the date of
registration,
(b) the trade-mark is not distinctive at the time proceedings
bringing the validity of the registration into question are
commenced, or
(c) the trade-mark has been abandoned,
and subject to section 17, it is invalid if the applicant for
registration was not the person entitled to secure the
registration.
Section 17 provides:
17. (1) No application for registration of a trade-mark that
has been advertised in accordance with section 37 shall be
refused and no registration of a trade-mark shall be expunged
or amended or held invalid on the ground of any previous use or
making known of a confusing trade-mark or trade-name by a
person other than the applicant for that registration or his
predecessor in title, except at the instance of that other person
or his successor in title, and the burden lies on that other person
or his successor to establish that he had not abandoned the
confusing trade-mark or trade-name at the date of advertise
ment of the applicant's application.
(2) In proceedings commenced after the expiration of five
years from the date of registration of a trade-mark or from
July 1, 1954, whichever is the later, no registration shall be
expunged or amended or held invalid on the ground of the
previous use or making known referred to in subsection (1),
unless it is established that the person who adopted the regis
tered trade-mark in Canada did so with knowledge of that
previous use or making known.
Section 16 dictates who is entitled to the regis
tration of a trade-mark:
16. (1) Any applicant who has filed an application in
accordance with section 30 for registration of a trade-mark that
is registrable and that he or his predecessor in title has used in
Canada or made known in Canada in association with wares or
services is entitled, subject to section 38, to secure its registra
tion in respect of those wares or services, unless at the date on
which he or his predecessor in title first so used it or made it
known it was confusing with
(a) a trade-mark that had been previously used in Canada or
made known in Canada by any other person;
(b) a trade-mark in respect of which an application for
registration had been previously filed in Canada by any other
person; or
(e) a trade-name that had been previously used in Canada
by any other person.
(5) The right of an applicant to secure registration of a
registrable trade-mark is not affected by the previous use or
making known of a confusing trade-mark or trade-name by
another person, if the confusing trade-mark or trade-name was
abandoned at the date of advertisement of the applicant's
application in accordance with section 37.
Section 4 defines "use":
4. (1) A trade-mark is deemed to be used in association with
wares if, at the time of the transfer of the property in or
possession of the wares, in the normal course of trade, it is
marked on the wares themselves or on the packages in which
they are distributed or it is in any other manner so associated
with the wares that notice of the association is then given to the
person to whom the property or possession is transferred.
(2) A trade-mark is deemed to be used in association with
services if it is used or displayed in the performance or advertis
ing of those services.
(3) A trade-mark that is marked in Canada on wares or on
the packages in which they are contained is, when the wares are
exported from Canada, deemed to be used in Canada in
association with those wares.
The definition of use in section 4 is satisfied by
the applicant, since the fruit was marketed under
its trade-mark "Ortanique". This also appeared on
the promotional materials sent by the applicants.
Under section 16, an applicant is entitled to
registration of the trade-mark if he has used or
made it known in Canada in association with the
wares, and it is not confusing with a trade-mark
previously used in Canada. In the case of Manhat-
tan Industries Inc. v. Princeton Manufacturing
Ltd. (1971), 4 C.P.R. (2d) 6 (F.C.T.D.), it was
held that use in Canada by a wholesaler or dis
tributor of goods bearing the mark of the foreign
trade-mark owner was "use" by the foreign owner,
not the Canadian importer. This was applied in
Waxoyl AG v. Waxoyl Can. Ltd.; Royal Doulton
Tableware v. Cassidy's Ltd.; Argenti Inc. v. Exode
Importations Inc.; and Lin Trading Co. v. CBM
Kabushiki Kaisha, supra. Based on this reasoning,
there has been no "use" in Canada by the respon
dents, and therefore they were not entitled to
registration of the trade-mark.
The respondent also submitted that there was no
prior use of the trade-mark in Canada by CGA
Ltd. Section 16 entitles an applicant to registration
of a trade-mark if, prior to the date of his use or
his making known of it, no other person used or
made known a confusing mark. It is clear from the
evidence that the first use of the trade-mark by the
respondent was when they received their first ship
ment of Ortaniques from the applicant, on or
about March 7, 1978. On the basis of Manhattan
Industries, supra, this constitutes "use" by the
owner, not by Branson.
In this respect I quote the editorial note to
Manhattan Industries, supra, as quoted by Reed
J. in Waxoyl, supra, at page 122:
"Many internationally known marks are sold through distribu
tors in Canada. The mark is still that of the original supplier,
not the distributor.
"The question is not who is using the mark but whose mark is
being used. As long as the wares originate from the owner it is
suggested that his mark is being used even if no sales in Canada
are directly made by that owner." [Emphasis added.]
It was argued on behalf of the respondent that it
was not acting as agent for Jetco or CGA Ltd.,
pointing out the lack of a written exclusive dis-
tributorship agreement. I am not persuaded by this
argument. There is no doubt in my mind, Branson
was acting on behalf of CGA Ltd., through Jetco,
in importing goods covered by the trade-mark. The
president of the respondent company, Mr. William
Branson, admitted as much on cross-examination.
The absence of a written agreement or of exclusivi
ty does not alter its status as an importing agent,
who ultimately owes a fiduciary duty of care to its
principal. This duty is breached by the registration
of the trade-mark rightfully belonging to CGA
Ltd..
The respondent further argues that it had no
knowledge of CGA Ltd.'s prior registrations of the
trade-mark in other countries, and thus should not
be held responsible for what was in effect an
"innocent user", attempting to protect its own
goodwill in the product. This submission is com
pletely irrelevant.
The respondent also submitted that the appli
cants had abandoned their use of the trade-mark
in Canada subsequent to 1981. Non-use alone does
not constitute abandonment (Philip Morris Inc. v.
Imperial Tobacco Ltd. (No. 1) (1987), 17 C.P.R.
(3d) 289 (F.C.A.). The evidence of Mr. Hamilton
was that they did not sell in Canada between 1981
- 1985 because they could not obtain a viable
price. But above all, section 17 of the Act requires
merely that a prior user not have abandoned use of
the mark as at the date of the applicant's (here
respondent's) application; that is, in 1979, when
the mark was actively in use. An applicant's rights
to registration of a trade-mark under the Act are
determined as at the date of application, not when
expungement proceedings are commenced.
The final submission by the respondent is that
the applicant's right to expungement is prescribed
by subsection 17(2) of the Act; more than 5 years
having elapsed since the registration date of
March 20, 1980. The respondent, although it was
the first user as well as the party "making known"
the mark, did so in law on behalf of the rightful
owner, whose consent it had not obtained. Branson
therefore cannot invoke the limitation period in
section 17.
It is hereby ordered, as sought in this applica
tion for relief, that the Registrar of Trade-marks
strike William D. Branson Limited as registered
owner of the trade-mark "Ortanique".
I wish to comment further that I have grave
doubts as to the registrability of "Ortanique" as a
trade-mark; it appears descriptive of a fruit whose
existence was brought about by combining the
orange and the tangerine, said to have a unique
flavour. I presume from the evidence that
"Ortanique" is the name by which this fruit is
generally known, and is not exclusive to any one
supplier or grower. However, no arguments were
specifically directed at this issue.
In the circumstances that I have alluded to, the
duty on the Court is set out in Fox, Canadian Law
of Trade Marks and Unfair Competition (3rd
ed.), at page 309:
In matters concerning rectification of the register the court acts
in the interests of the purity of the register, and in the public
interest. In so acting, the court has inherent jurisdiction and a
duty to expunge in a proper case ex proprio motu even though
the point on which expungement is ordered has not been raised
in the pleadings. But even though the court might so act,
although no person appeared as a person interested to ask for
expungement, it ought to do so only in a case where it clearly
appears that the mark is wrongly on the register. The public
interest is of paramount importance, and the equities in favour
of or against the applicant for rectification are of little rele
vance, for the matter is one between the public and the owner
of the mark. [Footnotes omitted; emphasis added.]
In the absence of specific argument, and insuffi
cient evidence, I would not be justified in taking
such action.
Costs to the applicants.
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.