Judgments

Decision Information

Decision Content

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.
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