Federal Court of Appeal Decisions

Date: 20080207

Docket: A-182-07

Citation: 2008 FCA 50

 

CORAM:       DÉCARY J.A.

                        SHARLOW J.A.

                        TRUDEL J.A.

 

BETWEEN:

CHEAPTICKETS AND TRAVEL INC.

Appellant

and

EMALL.CA INC. and EMALL.INC.,

carrying on business as CHEAPTICKETS.CA

Respondents

 

 

 

Heard at Vancouver, British Columbia, on February 5, 2008.

Judgment delivered at Vancouver, British Columbia, on February 07, 2008.

 

REASONS FOR JUDGMENT BY:                                                                          SHARLOW J.A.

CONCURRED IN BY:                                                                                                DÉCARY J.A.

                                                                                                                                     TRUDEL J.A.

 

Date: 20080207

Docket: A-182-07

Citation: 2008 FCA 50

 

CORAM:       DÉCARY J.A.

                        SHARLOW J.A.

                        TRUDEL J.A.

 

BETWEEN:

 

CHEAPTICKETS AND TRAVEL INC.

Appellant

and

EMALL.CA INC. and EMALL.INC.,

carrying on business as CHEAPTICKETS.CA

Respondents

 

 

REASONS FOR JUDGMENT

SHARLOW J.A.

[1]               This is an appeal of the judgment of Justice Strayer dated March 2, 2007 (2007 FC 243) in which he granted the application of the Respondents Emall.ca Inc. and Emall Inc. (collectively, “Emall”) for the expungement of two registered trade-marks owned by the Appellant Cheaptickets and Travel Inc. (“Cheaptickets”). The registered trade-marks in issue are CHEAP TICKETS, No. 564,905, and CHEAP TICKETS AND TRAVEL & DESIGN, No. 564,432.

Preliminary point on jurisdiction

[2]               The Registrar of Trade-Marks gave effect to the expungement order approximately 17 days after the order was made, before the expiry of the appeal period for the order. Cheaptickets had not asked Justice Strayer or this Court for a stay of the order. It appears that, contrary to the understanding of Cheaptickets, the Registrar has no policy of deferring the execution of an expungement order until all rights of appeal are exhausted.

[3]               Emall argues that, although section 57 of the Trade-Marks Act, R.S.C. 1985, c. T-13, gives the Federal Court the exclusive original jurisdiction to order the expungement of a registered trade-mark, there is nothing in the Trade-Marks Act or the Federal Courts Act, R.S.C. 1985, c. 1985, c. F-7, that specifically gives this Court the authority to order the reinstatement of a trade-mark that has been expunged as the result of an order of the Federal Court. If that argument is correct, this appeal is moot.

[4]               I do not accept Emall’s argument. In my view, this Court has the jurisdiction to grant the remedy sought by Cheaptickets in this appeal. I reach that conclusion for the following reasons.

[5]               Subsection 57(1) of the Trade-Marks Act reads as follows:

 

[6]               The expungement of a registered trade-mark is, in the language of section 57, the striking out of an entry on the register of trade-marks.

[7]               An order to expunge a registered trade-mark is a final judgment of the Federal Court. The respondent in the expungement proceedings has the right to appeal the expungement order to this Court pursuant to paragraph 27(1)(a) of the Federal Courts Act.

[8]               Section 52 of the Federal Courts Act states the powers of this Court in appeals. In the case of an appeal from the Federal Court, subparagraph 52(b)(i) provides that this Court may:

 

[9]               As I read subparagraph 52(b)(i), where the order under appeal is an expungement order, this Court may either dismiss the appeal (in which case the expungement order would stand), or allow the appeal. If the appeal is allowed, this Court may go further and, making the order the Federal Court should have made, dismiss the application for expungement. If that order is made after the expungement has occurred, the Registrar of Trade-Marks would be required, upon receiving notice of the order, to reverse the expungement and, in effect, re-instate the registration of the trade-mark.

The presumption of the validity of the registration of a trade-mark

[10]           The argument of Cheaptickets invoked, in several different contexts, the proposition that the registration of a trade-mark is presumed to be valid. Emall does not disagree that there is such a presumption, and I have no doubt that Justice Strayer was aware of it. However, it seems to me that Cheaptickets is attempting to place more weight on this presumption than it can reasonably bear.

[11]           The existence of the presumption of validity is confirmed in General Motors of Canada v. Décarie Motors Inc. (C.A.), [2001] 1 F.C. 665 (at paragraph 31). The cited authority for the existence of the presumption is Hughes on Trade Marks (Markham Ont.: Butterworths, 1984, at page 556). In the current looseleaf version of that publication, Hughes on Trade Marks (Second Edition, Markham Ont.: LexisNexis Canada Inc.), the discussion about the presumption of validity appears at §56 (page 817). From the cited cases, in particular Unitel Communications Inc. v. Bell Canada, 61 C.P.R. (3d) 12 (F.C.T.D.), at page 27, it appears that the source of the presumption is the statutory predecessor to paragraph 19 of the Trade-Marks Act. Section 19 reads as follows:

 

[12]           The presumption of validity established by section 19 of the Trade-Mark Act is analogous to the presumption of validity of a patent in section 45 of the Patent Act, R.S.C. 1985, c. P-4. In Apotex Inc v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153, Justice Binnie characterized that presumption as weakly worded, and he explained (at paragraph 43) that the presumption adds little to the onus already resting, in the usual way, on the attacking party. What that means, in my view, is that an application for expungement will succeed only if an examination of all of the evidence presented to the Federal Court establishes that the trade-mark was not registrable at the relevant time. There is nothing more to be made of the presumption of validity.

Whether the trade-marks were clearly descriptive at the relevant time

[13]           The application for expungement was based on subsection 18(1) of the Trade-Marks Act, which reads in relevant part as follows (my emphasis):

 

[14]           An application for expungement on the basis of paragraph 18(1)(a) necessarily invokes subsection 12(1), which reads in relevant part as follows:

 

[15]           Justice Strayer found that the trade-marks were clearly descriptive of the character or quality of the services or wares in association with which they were used by Cheaptickets, a travel agency. On that basis, he concluded that by virtue of the combined operation of paragraph 18(1)(a) and paragraph 12(1)(b), the registration was invalid.

[16]           Cheaptickets argues that Justice Strayer erred in determining that the trade-marks were “clearly descriptive” within the meaning of paragraph 12(1)(b), because they are at most merely suggestive of the character or quality of the services offered by Cheaptickets. This is a question of mixed fact and law that will not be disturbed on appeal in the absence of palpable and overriding error, or a readily extricable error of law. My review of the record and the submissions of counsel reveal no legal error on the part of Justice Strayer, and no palpable and overriding error of fact.

The saving provision in subsection 12(2)

[17]           Cheaptickets argues that Justice Strayer failed to consider the application of subsection 12(2) of the Trade-Marks Act. Subsection 12(2) reads as follows (my emphasis):

 

[18]           Emall argues that subsection 12(2) may be invoked during the process of trade-mark registration, but not during expungement proceedings. Emall submits that in expungement proceedings the relevant provision is subsection 18(2), which reads as follows (my emphasis):

 

[19]           Subsection 18(2) makes available to the holder of a registered trade-mark a specific defence in expungement proceedings which may come into play if the trade-mark has acquired distinctiveness by the time the registration process was complete, even if the Registrar of Trade-Marks was not given evidence of that fact.

[20]           The consequence of Emall’s argument is that if Cheaptickets is unable to establish distinctiveness as of the completion of the registration process as contemplated by subsection 18(2), Cheaptickets would be barred from even attempting to establish distinctiveness as of the commencement of that process. Emall referred to no authority that would compel subsection 12(2) to be construed in such a limited fashion, and I see no reason to accept that interpretation. In my view, the existence of subsection 18(2) does not preclude Cheaptickets from invoking subsection 12(2) during expungement proceedings.

[21]           Cheaptickets is correct to say that Justice Strayer does not mention subsection 12(2). That may have been an error or oversight on his part, or it may indicate that he found subsection 12(2) not to be worthy of mention. In either case, the omission is inconsequential. The record discloses no evidence that is reasonably capable of supporting Cheaptickets’ submission that the trade-marks had acquired distinctiveness as of the date on which the applications for registration were filed.

[22]           Cheaptickets points to paragraph 16 of Justice Strayer’s reasons as an indication that he had in fact concluded that the trade marks were distinctive at the date of the filing of the application for registration, because he refers to the absence of evidence that they had ceased to be distinctive after that time. I am unable to accept Cheaptickets’ interpretation of paragraph 16. As I read paragraph 16, it is intended to explain that, because Justice Strayer had concluded that Emall’s expungement application had succeeded on the basis of paragraph 18(1)(a), it was not necessary to deal with the part of Emall’s expungement application that relied on paragraph 18(1)(b). Justice Strayer then stated by way of obiter dicta that the application based on paragraph 18(1)(b) would have failed in any event for lack of evidence.

Separate consideration of the design mark

[23]           Cheaptickets argues that Justice Strayer failed to consider the unique and distinctive aspects of the CHEAP TICKETS AND TRAVEL & DESIGN mark separate and apart from the CHEAP TICKETS mark. In my view there is no merit to this submission. The challenge to the registrability of the trade-marks was based on the use of the words “CHEAP TICKETS” as an integral part of Cheaptickets’ registered trade-marks. There is no evidence that Cheaptickets has ever disclaimed, or indicated a willingness to disclaim, the words CHEAP TICKETS as used in the CHEAP TICKETS AND TRAVEL & DESIGN mark.

Conclusion

[24]           I would dismiss this appeal with costs.

 

"K. Sharlow"

FEDERAL COURT OF APPEAL

 

NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

 

 

DOCKET:                                                      A-182-07

 

 

STYLE OF CAUSE:                                      Cheaptickets and Travel Inc. v.

                                                                        Emall.Ca Inc. et al.

 

 

PLACE OF HEARING:                                Vancouver, British Columbia

 

DATE OF HEARING:                                  February 5, 2008

 

REASONS FOR JUDGMENT BY:             SHARLOW J.A.

 

CONCURRED IN BY:                                 DÉCARY J.A.

                                                                        TRUDEL J.A.

 

DATED:                                                         February 7, 2008

 

 

 

APPEARANCES:

 

Mr. Gregory Harney Mr. Andrew Morrison	FOR THE APPELLANT
Mr. Zak Muscovitch Mr. D. Scott Lamb	FOR THE RESPONDENTS

 

SOLICITORS OF RECORD:

 

Shields Harney Barristers & Solicitors Victoria, BC	FOR THE APPELLANT
Muscovitch & Associates Toronto, Ontario	FOR THE RESPONDENTS