Judgments

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T-2329-87
Canadian Olympic Association (Plaintiff) v.
Konica Canada Inc. and Brick Communications Ltd. (Defendants)
INDEXED AS: CANADIAN OLYMPIC ASSN. V. KONICA CANADA INC. (T.D.)
Trial Division, Denault J.—Toronto, May 23, 24, 25, 1989; Ottawa, March 20, 1990.
Trade marks — Infringement — Injunction — Whether marks adopted within meaning of ss. 9, 11 Trade-marks Act — Whether ss. 9, 11 retrospective re prior use of marks subsequently registered as official trade-marks.
Constitutional law — Distribution of powers — Ss. 9, 11 Trade-marks Act not ultra vires — Parliament not going beyond trade and commerce power — Not infringing provincial jurisdiction over property and civil rights.
Construction of statutes — Trade-marks Act — Meaning of phrase "No person shall adopt in connection with a business, as a trade-mark or otherwise" — Against rules of statutory construction to give legislation retrospective effect.
An interlocutory injunction herein had been granted by Martin J. in November, 1987. This was an application for a permanent injunction restraining the defendant, Konica, from publishing its edition of Guinness Book of Olympic Records: The Complete 1988 Winter & Summer Olympic Schedule. The defendant first published its book in 1987. The plaintiffs official registered trade marks are "Olympic", "Summer Olym- pics" and "Winter Olympics".
The issue was whether Konica had "adopted the marks within the meaning of the Trade-marks Act and whether sections 9 and 11 had a retrospective effect so as to prohibit prior uses of marks registered as official marks. It was also argued that sections 9 and 11 were unconstitutional.
Held, the application should be denied.
The sale and distribution of the Konica edition did not violate the plaintiffs official marks. The marks were not adopt ed by Konica within the meaning of section 9, since they had already been adopted by Guinness well before Konica distribut ed its book. Sections 9 and 11 could not be given a retrospective interpretation where adoption ôr first use took place before the registration of the plaintiffs trade marks. This interpretation coincided with the principle that new marks, whether trade marks or official marks, should defer to marks adopted or registered prior to registration of a new mark. While it may be
that this decision will create a loophole in plaintiff's monopoly over the commercial spin-offs of the Games, it is not for the Courts to take into account policy considerations in interpreting legislation. Effect must rather be given to the clear provisions of the legislator. To go against the rules of statutory interpreta tion and give this legislation retrospective effect would allow any "public authority" to run roughshod over the rights of registered trade mark users.
Sections 9 and 11 of the Act are not ultra vires. Parliament had not overstepped its jurisdiction and gone beyond its trade and commerce power. The words "or otherwise" in the phrase "no person shall adopt, in connection with a business, as a trade mark or otherwise" mean "or in connection with a business in any other way". Parliament had not prohibited the every day common use of official marks. Konica was distributing the book "in connection with a business" otherwise than as a trade mark.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 91(2).
Federal Court Rules, C.R.C., c. 663, RR. 500-507. Trade-marks Act, R.S.C., 1985, c. T-13, ss. 3, 6(5), 9(1)(n)(iii), 11.
CASES JUDICIALLY CONSIDERED
APPLIED:
Registrar of Trade Marks v. Canadian Olympic Asso ciation (1982), 139 D.L.R. (3d) 190; 67 C.P.R. (2d) 59;
43 N.R. 52 (F.C.A.); The Queen v. Kruger (1978), 44 C.P.R. (2d) 135 (Reg. T.M.); Canadian Olympic Assn. v. Allied Corp., [1990] 1 F.C. 769 (C.A.).
CONSIDERED:
Jordan & Ste-Michelle Cellars Ltd. v. Andres Wines Ltd., T-2820-83, Cullen J., judgment dated 17/4/85, not reported; Cdn. Olympic Assn. v. Allied Corp. (1987), 14 C.I.P.R. 126; 16 C.P.R. (3d) 80; 13 F.T.R. 93 (F.C.T.D.); Insurance Corporation of British Columbia v. Registrar of Trade Marks, [1980] 1 F.C. 669; (1979),
44 C.P.R. (2d) 1 (T.D.).
REFERRED TO:
Canadian Olympic Assn. v. Mannington, Mills, Inc. (1989), 24 C.P.R. (3d) 152 (T.M. Opp. Bd.).
AUTHORS CITED
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
Fox, Harold G. Canadian Law of Trade Marks and Unfair Competition, 3rd ed. Toronto: Carswell Co. Ltd., 1972.
COUNSEL:
Kenneth D. McKay and Arthur B. Renaud for plaintiff.
D. H. Jack and Susan A. Goodeve for defendants.
SOLICITORS:
Sim, Hughes, Dimock, Toronto, for plaintiff.
McDonald & Hayden, Toronto, for defend ants.
The following are the reasons for judgment rendered in English by
DENAULT J.: This is an application for a perma nent injunction restraining the defendant Konica from publishing or distributing, in any form its premium edition of the Guinness Book of Olympic Records. On November 30, 1987 an interlocutory injunction was granted by Mr. Justice Martin prohibiting the defendant from "selling, offering for sale, distributing, advertising, or exhibiting in public the shrink wrapped film and Olympic record book". This was the form of the original Konica premium package; it consisted of three cartons of Konica colour film placed end to end and to the left of the Guinness Book of Olympic Records; the entire package was then shrink wrapped in cellophane making it impossible for prospective purchasers to open the book; all that could be seen was the cover. The cover consists of an indigo band across the top upon which the defendant's trade name appears in large white letters along with its trade mark spectrum under which appear the full title and subtitle of the book: Guinness Book of Olympic Records: The Com plete 1988 Winter & Summer Olympic Schedule.
From the time of service of notice in the inter locutory injunction until Mr. Justice Martin's order, the defendant interrupted its sale and distri bution of the promotional package. The defendant had initially ordered 100,000 copies of the book and then made a supplementary order of 25,000 copies. After the injunction it cancelled its supple mentary order, tried to give the books themselves without the film to its distributors, and finally were left with a surplus of 22,000 books. The parties have agreed that the damages be subject to a reference under Rules 500 to 507 [Federal Court Rules, C.R.C., c. 663]. The action between the plaintiff and the defendant Brick Communications Ltd. was settled in April 1988.
In order to succeed the plaintiff must establish a breach of sections 9 or 11 of the Trade-marks Act, R.S.C., 1985, c. T-13. The relevant sections are as follows:
9. (1) No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for,
(a) the Royal Arms, Crest or Standard;
(b) the arms or crest of any member of the Royal Family;
(c) the standard, arms or crest of His Excellency the Governor-General;
(d) any word or symbol likely to lead to the belief that the wares or services in association with which it is used have received, or are produced, sold or performed under, royal, vice-regal, or governmental patronage, approval or authority;
(e) the arms, crest or flag adopted and used at any time by Canada or by any province or municipal corporation in Canada in respect of which the Registrar has, at the request of the Government of Canada or of the province or municipal corporation concerned, given public notice of its adoption and use;
(J) the heraldic emblem of the Red Cross on a white ground, formed by reversing the federal colours of Switzerland and retained by the Geneva Convention for the Protection of War Victims of 1949 as the emblem and distinctive sign of the Medical Service of the armed forces and used by the Canadi- an Red Cross Society, or the Expression "Red Cross" or "Geneva Cross";
(g) the heraldic emblem of the Red Crescent on a white ground adopted for the same purpose as specified in para graph (J) by a number of moslim countries;
(h) the equivalent sign of the Red Lion and Sun used by Iran for the same purpose as specified in paragraph (/);
(i) any national, territorial or civic flag, arms crest or emblem, or official control and guarantee, sign or stamp, notice of the objection to the use of which as a commercial device has been received pursuant to the provisions of the Convention and publicly given by the Registrar;
(j) any scandalous, obscene or immoral word or device;
(k) any matter that may falsely suggest a connection with any living individual;
(1) the portrait or signature of any individual who is living or has died within the preceding thirty years;
(m) the words "United Nations" or the official seal or emblem of the United Nations:
(n) any badge, crest, emblem or mark
(i) adopted or used by any of Her Majesty's Forces as defined in the National Defence Act;
(ii) of any university, or
(iii) adopted and used by any public authority, in Canada as an official mark for wares or services,
in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority, as the case may be, given public notice of its adoption and use; or
(o) the name "Royal Canadian Mounted Police" or "R.C.M.P." or any other combination of letters relating to the Royal Canadian Mounted Police, or any pictorial representation of a uniformed member thereof.
(2) Nothing in this section prevents the use as a trade-mark or otherwise, in connection with a business, of any mark described in subsection (1) with the consent of Her Majesty or such other person, society, authority or organization as may be considered to have been intended to be protected by this section.
and also,
11. No person shall use in connection with a business, as a trade-mark or otherwise, any mark adopted contrary to section 9 or 10 of this Act or section 13 or 14 of the Unfair Competi tion Act, chapter 274 of the Revised Statutes of Canada, 1952.
The Plaintiffs Argument
The plaintiff contends that the distribution of the defendant's Guinness Book of Olympic Records, first printed and published in 1987, is a breach of subparagraph 9(1)(n)(iii) and section 11 of the Trade-marks Act. In proving this point, counsel for the plaintiff has sought to establish that: (1) the plaintiff, Canadian Olympic Associa tion, is a public authority; (2) that the title and subtitle of the defendant's book so nearly resemble the plaintiffs official marks "Olympic", "Summer Olympics" and "Winter Olympics" as to be likely to be mistaken for them; and (3) the adoption of
the offending marks by the defendant occurred in 1987 and that alternatively prior adoption of the same marks by the defendant's predecessor in title is equally a breach of sections 9 and 11 of the Act.
The Defendant's Argument
The defendant has argued in response that: (1) recognition as a public authority must be demon strated in each case, since it is a characteristic which is susceptible to change; (2) the plaintiff is seeking a monopoly over certain words which is contrary to public order; (3) sections 9 and 11 have not been breached since Konica did not "adopt" the marks in question, as they were adopt ed long before the plaintiff's registration of its official marks by Konica's predecessor in title, and the defendant submits that registration of an offi cial mark cannot have retrospective effect; and (4) the words "or otherwise" in sections 9 and 11 give the legislation an unacceptably wide scope so as to offend the ambit of subsection 91(2) of the Con stitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]]; only by reading down those words so as to exclude the sort of use made by the defendant can the provision be made infra vires.
Narrowing the issue
The most strongly contested arguments by the parties concerned the retrospective effect of sec tions 9 and 11 of the Act. This, I believe, is the central issue in the case. While I agree that a public authority must repeatedly demonstrate its public character when required to do so in a case such as this, I am satisfied that the Canadian Olympic Authority continues to meet the two-fold test of public benefit and government control established by the Court of Appeal in Registrar of Trade Marks v. Canadian Olympic Association (1982), 139 D.L.R. (3d) 190 (F.C.A.), at pages 199 and 200. The defendant relied on a statement by the Minister for Fitness and Amateur Sport, to
the House of Commons where he indicated that the government had received certain assurances from "the Olympic Trust on behalf of Olympic authorities ... that they will not be concerned with anyone using names or trade marks prior to 1980 unless it is in direct conflict with the Olympics". Counsel for the defendant then referred the court to the case of Canadian Olympic Assn. v. Man- nington Mills, Inc. (1989), 24 C.P.R. (3d) 152 (T.M. Opp. Bd.), where the C.O.A. sued the owner of a trade mark in use since 1974 which was not in direct conflict with the Olympics since the trade mark in question "JT-88" was used in con nection with floor tiling. The defendant then argued that the C.O.A. acted in contempt of its undertaking to Parliament as reported to the House of Commons by the responsible Minister, and alleged that there was therefore no govern ment control over the C.O.A. and that consequent ly it no longer met the requirements for recogni tion as a public authority. Regardless of the weight to be given in Court to such ministerial statements as counsel has relied on, I fail to see how the C.O.A. actions in this case should be affected by the statement (November 23, 1987) since it was made two weeks after the action in the present case had been launched (November 10, 1987). Moreover, while counsel's argument is well struc tured with respect to the Mannington Mills case, supra, I find that the argument provides insuffi cient grounds for refuting the five reasons given by the Court of Appeal in 1982 when it held that the Canadian Olympic Association was indeed a public authority. To my mind, those five grounds remain as true today as they were in 1982. (Regis- trar of Trade Marks v. Canadian Olympic Asso ciation (1982), 139 D.L.R. (3d) 190 (F.C.A.) at page 200.)
Secondly, I accept that the title and subtitle of the defendant's book so nearly resemble as to be likely to be mistaken for some of the official marks registered by the plaintiff. The defendant did not
strongly contest that point. Furthermore, it was established by the Registrar in The Queen v. Kruger (1978), 44 C.P.R. (2d) 135 (Reg. T.M.) at page 139 that the resemblance test in subpara- graph 9(1)(n)(iii) of the Act is even less stringent than the test for confusion. Resemblance of the official mark and the adopted mark is the only factor to be considered, other considerations deemed relevant in trade mark cases, such as those listed in subsection 6(5) are not relevant in this case. Based on the foregoing, I find that the resemblance test has been met.
Furthermore, I reject the defendant's argument as to the unconstitutionality of sections 9 and 11. Counsel for the defendant relied heavily on the meaning he ascribed to the words "or otherwise". He submitted that the defendant's use of the mark "Olympic" was otherwise than as a trade mark, as it was part of the title that was stipulated for the book in its licensing agreement with the publisher. The defendant submits it had no choice under its contract but to use the title and sub-title already in use by the publisher. Then the defendant submit ted that in prohibiting the use of the word "Olym- pic" other than as a trade mark Parliament has overstepped• its jurisdiction, and gone beyond its trade and commerce power and infringed upon the province's jurisdiction over property and civil rights. The defendant states that if the words "or otherwise" are interpreted as the plaintiff suggests so as to interfere with its legitimate contractual agreement with the publisher of its premium edi tion of the Guinness book, then the Court is con doning an ultra vires intention of Parliament. Counsel went so far as to suggest that the present wording of the statute prohibits any use, even every day common parlance uses, of official marks. With respect I do not think the Act makes any such provision. The words "or otherwise" have to be interpreted in their context. When properly interpreted, the words cannot have the ultra vires character which the defendant has imputed to them. I would recall here the opening words of both sections 9 and 11, which are as follows:
No person shall adopt, in connection with a business, as a trade mark or otherwise...
The words "as a trade mark or otherwise" merely reinforce the main qualifier in those sections which are the words "in connection with a business". Thus the words "or otherwise" actually mean "or in connection with a business in any other way". The sections do not prohibit uses which have no commercial purpose. In fact I would think that they do not even prevent the use of marks unless the use of that mark is primarily for a business purpose. Counsel for the plaintiff suggested that if the plaintiff so desired it could sue Guinness itself, or any one else who used its official marks in an editorial context, but that as a matter of internal policy the Canadian Olympic Association did not contest the use of its marks in an editorial context. I have some doubts as to whether the plaintiff could actually succeed if it reversed its policy and launched such actions. While our news media and publishing industry may be strongly influenced by market incentives, I tend to think the courts must initially proceed on the assumption that their pri mary motivation is not profit.
The defendant Konica however is a manufactur er of photographic equipment and wares; its foray into the field of Canadian publishing, it may safely be assumed, is primarily in order to promote its own products. Thus it is a use "in connection with a business" albeit otherwise than as a trade mark. The defendant was required under its licensing agreement to use the title and sub-title it did, containing as they do words which may appear to be the official marks of the plaintiff. The defend ant's use of the word "Olympic" or of other words resembling the plaintiff's marks is not a use as a trade-mark, as that word is defined in the Act.' It is evident to me that Konica has not adopted the words "Olympic" or "1988 Winter & Summer Olympic Schedule" as trade marks. Rather they
' Trade-mark is defined in section 2 of the Act as:
(Continued on next page)
have been adopted in connection with a business otherwise than as trade marks.
Finally, as for the defendant's public policy arguments, these, I believe, merely raise consider ations which can be subsumed under the other grounds of opposition as an aid to interpretation. If the plaintiff has any monopoly it is at best a monopoly over certain uses of certain words and only in certain contexts. These findings allow me to narrow the issues to two related questions:
1. Did the defendant "adopt" the marks within the meaning of the Act?; and, if not,
2. Do sections 9 and 11 have retrospective effect so as to prohibit prior uses of marks registered as official marks?
"No person shall adopt"
The defendant's central argument in this case was that subparagraph 9(1)(n)(iii) cannot be given retrospective effect. The defendant claimed that the marks were not adopted by it since they had been adopted and used by Guinness well before Konica distributed its book. The defendant states it did not adopt the mark, since it was already adopted. Counsel for the defendant referred the Court to section 3 of the Act which provides as follows:
3. A trade-mark is deemed to have been adopted by a person when that person or his predecessor in title commenced to use it in Canada or to make it known in Canada or, if that person or his predecessor had not previously so used it or made it known, when that person or his predecessor filed an application for its registration in Canada. [My emphasis.]
I think the defendant's argument on this score is well founded. The uncontradicted evidence of the defendant is that Bantam Books had been publish-
(Continued from previous page)
2. In this Act,
"Trade-mark" means
(a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or service: manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others,
(b) a certification mark,
(c) a distinguish guise, or Nil a nrnnnced trade-mark
ing the Canadian edition of the Guinness Book since the late 1960s, many years before the adop tion by the plaintiff of its official marks.
However that is just the beginning of the argu ment; the defendant admits that Guinness, its predecessor in title, did adopt the mark which the plaintiff has subsequently registered as an official mark. In order to escape liability under section 9 the defendant must also establish that the section does not have retrospective effect. That very issue was already addressed, as counsel for the plaintiff suggested, in Jordan & Ste-Michelle Cellars Ltd. v. Andres Wines Ltd. (T-2820-83, Cullen J., judg ment dated 17/4/75, not reported) * and also in Cdn. Olympic Assn. v. Allied Corp. (1987), 14 C.I.P.R. 126 (F.C.T.D.) Cullen J. Both these cases build on the obiter dicta of Cattanach, J., in Insurance Corporation of British Columbia v. Registrar of Trade Marks, [1980] 1 F.C. 669 (T.D.), at page 686 which reads as follows:
From the documents on file in the Registrar's office trans mitted to the Court under section 60 of the Trade Marks Act the Registrar was concerned with the effect the prohibition following upon the notification of the adoption and use of an official mark would have on trade marks registered in the normal manner with which the official mark conflicts. This particular issue is not before me but it appears evident to me that the normal commercial trade mark registered by a trader must defer to the official mark adopted and used by a public authority or like body because that is the legislative intent.
The Court of Appeal has recently rejected that obiter dicta. In an appeal from the Allied case [[1990] 1 F.C. 769], the Court dismissed the appeal by the applicant Allied but held that sec tion 9 of the Act could not be given retrospective effect, and that the obiter dicta of Cattanach J., went too far. Unlike Cattanach J., the Court of Appeal gives due weight, in its interpretation, to the presumption against retrospective intent. Mac- Guigan J.A., at page 774, supra, refers to the quotation given above from Cattanach J., and states:
* Editor's note: This judgment was identical to the judgment rendered in T.G. Bright & Co. Ltd. v. Andres Wines Ltd. reported at (1985), 5 C.I.P.R. 110 (F.C.T.D.).
It seems to me that this interpretation goes well beyond the true intent of Parliament as expressed by the language of subparagraph 9(1)(n)(iii) of the statute. Subsection 9(1) is not univocal in its prohibitions, and paragraph 9(1)(n) contains qualifying words not found in most of the other paragraphs. For official marks such as the Royal Arms or various recog nized emblems, there is an absolute prohibition against adop tion by others, but the wording of paragraph 9(1)(n) is not absolute.
Section 9 of the Act as a whole deals with adoption, and the prohibition against adoption is in the future tense ("No person shall adopt"). Subparagraph 9(1)(n)(iii) therefore forebids the adoption of a trade mark "so nearly resembling as to be likely to be mistaken for" a mark adopted by a public authority in respect of which the Registrar "has ... given" (past tense) public notice. Consequently, it does not retroactively prohibit the adoption of marks. It is only prospective in operation.
I do not see that this interpretation is affected by section 11, since that provision forbids only use of a mark adopted contrary to section 9. A mark adopted before the giving of public notice would not be adopted contrary to section 9.
Driedger in his text Construction of Statutes, 2nd ed., Butterworths, 1983, at page 196, offers the very advice MacGuigan J.A., seems to have followed in the Allied case:
Thus, the position appears to be that whenever the operation of a statute depends upon the doing of something or the happening of some event, the statute will not operate in respect of something done or in respect of some event that took place before the commencement of the statute; but if the operation of the statute depends merely upon the existence of a certain state of affairs, the being rather than the becoming, the statute will operate with respect to a status that arose before the com mencement of the statute, if it exists at that time. Having decided that a statute is not by reason of the retrospective rule precluded from operating in particular circumstances, there is the further, and" unrelated, question whether the statute is precluded from so operating for the reason that it impairs existing rights.
In sections 9 and 11 of the Trade-marks Act, there is in fact no ambiguity, no wording which could give rise to the suggestion that the section was intended to have retrospective effect. The phrase in question in the present case is "No person shall adopt". There is no use of the past or perfect tense to suggest a retrospective intention. In fact the wording in respect of official marks suggests the opposite: "9. (1) No person shall adopt ... (n) any .. . mark (iii) adopted and used by any public authority ... in respect of which the Registrar has . .. given public notice". This draft-
ing indicates that the statute was clearly intended to merely have a prospective application. Thus the same logic that informed the Court of Appeal's finding in Allied, compels me to conclude that sections 9 and 11 cannot be given a retrospective interpretation. Even if the wording were more supportive of such an intention the fact situation in question—the adoption, or first use, of a mark—is an event, and one which took place before the registration of the plaintiff's marks, and thus before the statute took effect in respect of those marks. The case law and the authors suggest that a retrospective intent cannot be imputed to Parlia ment in such circumstances. Moreover not only is the presumption against retrospective operation not rebutted here, neither is the presumption against interference with vested rights.
Only by clearly expressed statutory language could Parliament override the vested rights of Guinness Books and its licensees such as Konica. The statute makes no such provision; in fact it leaves no room for ambiguity and is expressly drafted in terms which, in accordance with well known interpretive rules, cannot be given retro spective effect. Consequently, sale and distribution of the Konica edition of the Guinness Book of Olympic Records and the shrink wrapped film and book package do not violate the Canadian Olym- pic Association's official marks.
I am confirmed in this opinion by virtue of the fact that to hold otherwise would set a dangerous precedent. Indeed it would allow any "public authority" to run roughshod over the vested rights of users of registered trade marks, and leave them without any remedy. I prefer an interpretation which holds true to the principle that new marks, whether they be trade marks or official marks, should defer to marks adopted or registered prior to registration of the new mark, since the newcom er had the choice of finding a more innovative mark in the first place. (See Fox, Canadian Law of Trade Marks and Unfair Competition, page 178).
It may be that this decision will create a small loophole in the Canadian Olympic Association's monopoly over the commercial spin-offs of mar keting wares in association with Olympic Games. To that degree the decision may appear to be impolitic. On the other hand public policy could also be invoked to support any decision that would help to halt the commercialization of amateur sport. However as Cattanach J., stated in Insur ance Corporation of British Columbia v. Registrar of Trade Marks, [1980] 1 F.C. 669, at page 684, it is not for the Courts to weigh the policy or impolicy of legislative enactments; they must instead "administer the law as [they] find [...] it", and give effect to the clear statutory provisions of the legislator.
The application for a permanent injunction is refused, with costs to the defendant.
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