Date: 19990310
Docket: 98-T-57
BETWEEN:
MAGNOTTA WINERY CORPORATION
and MAGNOTTA WINES LTD.
and MAGNOTTA WINERY ESTATES LIMITED
and MAGNOTTA CELLARS CORPORATION
and MAGNOTTA VINEYARDS LTD.
and MAGNOTTA DISTILLERY LTD.
and MAGNOTTA VINTNERS LTD.
and MAGNOTTA WINERY (TORONTO) LTD.
Applicants
- and -
VINTNERS QUALITY ALLIANCE OF CANADA
Respondent
REASONS FOR ORDER
REED, J.:
[1] This is a motion for an extension of time within which to file an application for judicial review. In the alternative a request is made pursuant to section 54 of the Federal Court Rules for direction as to the procedure the applicants should follow. The decision that it is sought to have reviewed, by some means, is that made by the Registrar of Trade-marks on May 11, 1998. He accepted, pursuant to subparagraph 9(1)(n)(iii) of the Trade-marks Act, R.S.C. 1985, c. T-13, the word ICEWINE as an official mark used by the Vintners Quality Alliance ("VQA"). This decision was followed by the publication in the Trade-marks Journal on May 27, 1998, of notice that ICEWINE had been adopted and used as an official mark by the VQA.
[2] The relevant paragraph of the Trade-marks Act provides that no person may use a mark that has been adopted and used by a public authority as an official mark for wares or services when the Registrar has given public notice of such adoption and use:
| 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, |
| . . . |
| (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; |
[3] There is no doubt that the applicants have an interest in the Registrar's decision and are prejudiced thereby. Five of the Magnotta companies manufacture and sell icewine. A sixth intends to do so in the future. A seventh manufactures a distilled alcohol product, Icegrappa, made from icewine grapes. The applicant, Magnotta Winery Corporation, controls the other applicants and is in turn controlled by Magnotta Family Holdings, a private corporation controlled by Mr. Magnotta and his wife. The Magnotta Winery Corporation, since its beginning, has been and continues to be a member of the VQA. The applicants will be referred to collectively as Magnotta.
[4] There are provisions that allow for existing uses of an official mark to continue despite the adoption of such by a public authority. Nevertheless the applicants' ability to sell their icewine through the L.C.B.O. is affected by the Registrar's decision, as is the group's ability to expand. The applicants assert that Magnotta was the market leader in Canada in the production and sale of icewine at the time of the application for the official mark and they allege that the subtext of the application by the VQA to "register" the name ICEWINE, as its official mark, is the desire of Magnotta's competitor (Inniskilin) to regain the market share it previously held (Inniskilin is owned by Vincor International Inc. which allegedly, together with Andres Wines, dominates the VQA).
[5] I turn then to the events leading up to the "registration" of ICEWINE as an official mark of the VQA. At some time prior to September 1997, the VQA applied to register ICEWINE as a trade-mark (a certification mark) - application no. 0835,778. Mr. Magnotta had notice of this application and his counsel wrote, on September 17, 1997, to counsel for the VQA stating that the mark was not registerable because it was purely descriptive and no one could appropriate the exclusive use of that word any more than they could appropriate the exclusive use of words such as "varietal", "chardonnay" or "cabernet". The letter indicated that Magnotta intended to file an Opposition to the trade-mark application.
[6] On October 15, 1997, counsel for Magnotta wrote again to counsel for the VQA confirming that he had been advised the day before by counsel for the VQA that the prosecution of the application for the ICEWINE trade-mark had been suspended as there had been some objections raised by the Trade-marks examiner. Counsel for Magnotta wrote on October 20, 1997, stating that he would be bringing Magnotta's objections to the attention of the Trade-marks examiner.
[7] Indeed, the examiner had already, long before October 15, 1997, informed counsel for the VQA that ICEWINE was not registerable because it was the name of a type of wine and the name of wares. The application for a trade-mark in ICEWINE expired on October 26, 1997.
[8] On November 26, 1997, counsel for the VQA filed an application requesting that the Registrar give public notice pursuant to paragraph 9(1)(n)(iii) of the Trade-marks Act that the VQA had adopted and was using the word ICEWINE as an official mark in association with wares and services.
[9] Unlike an application for a trade-mark, there is no requirement that public notice be given of a request to the Registrar for the publication of notice of the adoption and use of an official mark. Despite counsel for Magnotta's previously expressed opposition to ICEWINE being registered as a trade-mark, and the fact that Magnotta was a member of the VQA, neither the VQA, nor counsel for the VQA, advised Magnotta that a request for an official mark "registration" was being made. Also, notice was not given by the Registrar's office. Thus Magnotta did not know of the VQA request, no opportunity to file an opposition to it was given, and Magnotta only learned of the Registrar's decision that the VQA's request had been acceded to on August 21, 1997, when the VQA announced in a press release of August 20, 1998, that Icewine was now its official mark and that "[t]he granting of the Trade-mark for Icewine [is] a very positive development for the protection of consumers and wineries."
[10] As noted, the notice required by paragraph 9(1)(n)(iii), was published in the Trade-marks Journal, on May 27, 1998. This notice was clearly not seen by either Magnotta or its counsel. Counsel for Magnotta wrote to counsel for the VQA, on September 2, 1998, and again on September 10, 1998, objecting to the action that had been taken and objecting to the VQA's position that it was entitled to enforce the ICEWINE official mark as a trade-mark.
[11] The September 2, 1998, letter states that the mark is a descriptive product name, not an official mark and that, in any event, the VQA is not a public authority. Mr. Magnotta's affidavit states that the VQA is a voluntary trade organization in which voting is weighted in accordance with the respective overall market share of its members and thus it is controlled by Vincor International Inc. and Andres Wines Ltd. He states that its decisions are made for the benefit of its members, not the public. Part of the text of the September 2, 1998 letter reads:
| . . . The word "icewine" is an ordinary english word which as a part of the language is purely descriptive of the product in question, and is entered as follows in the Canadian Oxford Dictionary (1998): |
| "specifically Canadian, a very sweet wine made from ripe grapes left to freeze on the vine before being picked, and still frozen when they go into the press. A similar wine made in California from artificially frozen grapes (Germain: eiswein)". |
| Contrary to your memorandum, Magnotta does not see the VQA's adoption of ICEWINE as an official mark to be a positive step. In Magnotta's opinion, it represents a fundamentally wrongful appropriation by the VQA of a generic product-category term in the wine making industry. |
| . . . |
| Further . . . |
| (a) the VQA is not a "public authority" and had no right to apply for an official mark under section 9(1)(n)(iii) (not subclause (ii) as per your memorandum). For further specificity, and contrary to the representations made both by you (in your correspondence dated November 14, 1997 to the trade Marks Office) and your solicitors Deeth Williams Wall (by their correspondence dated April 30, 1998 to the Trade Marks Office): |
| (i) The VQA owes no duty to the public and its activities are for the benefit of its members. It is a private trade organization that functions as a cartel. The proportionate voting of the VQA members in accordance with marketshare makes the VQA puppet to the two large Ontario wineries, and ensures that the VQA will pursue a private agenda. |
[12] The September 10, 1998, letter reiterated Magnotta's objection to the action that had been taken and to the VQA's position that it was entitled to control the ICEWINE official mark as a trade-mark. The letter reiterates Magnotta's position that what is really at issue is a restrictive trade practice.
[13] On November 3, 1998, counsel for Magnotta wrote to counsel for the VQA and to the VQA itself stating that in view of the fact that no response had been received to the September 2, 1998, letter, he had been instructed by Magnotta to proceed to the Federal Court to challenge the VQA official mark "registration" of ICEWINE. At the same time, counsel for Magnotta expressed uncertainty as to exactly how this might be accomplished and indicated that one alternative was to commence three separate proceedings under different statutory provisions, and another was to seek directions pursuant to section 54 of the Federal Court Rules as to how he should proceed.
[14] Counsel for the VQA responded that: (1) Magnotta could not proceed under section 57 to have the official mark expunged from the Register because it is not a mark that is on the Register; (2) Magnotta had no right to appeal the Registrar's decision under section 56 of the Trade-marks Act because it was not a party to the Registrar's decision, and in any event it was out of time to launch such an appeal; (3) Magnotta could not proceed for judicial review under section 18 of the Federal Court Act because it did not have a legal interest in the decision at the time the decision was made, and it was in any event out of time for filing such an application.
[15] Before me counsel for the VQA argued that the Court had no jurisdiction pursuant to Rule 54 to give the type of directions that counsel for Magnotta seeks since Rule 54 only contemplates the giving of directions under the Rules, not the advising of counsel as to how he should conduct his case. She noted that it was not unusual for a party to commence a claim using the wrong procedure and to find out only at the end of the proceeding that it has chosen the wrong road. I note as well that while in many circumstances a person could simply ignore the protestations of an official mark-holder, thereby attracting legal action by that person, in the course of which the legality of the official mark could be tested, in this case, it is the actions of third parties (e.g., the L.C.B.O.) that will cause the applicants damage, and the VQA may never find it necessary to sue Magnotta in order to enforce the right it asserts.
[16] I agree with counsel for the VQA that Rule 541 does not appear to contemplate the kind of direction that counsel for Magnotta is seeking. The Rule refers to "directions concerning the procedure to be followed under these Rules". This would not seem to encompass directions as to whether one should proceed by appeal under the Trade-marks Act or by judicial review under the Federal Court Act.
[17] Nevertheless, counsel's question must be answered since part of counsel for the VQA's argument, that an extension of time to file an application for judicial review should not be granted, is that judicial review is not appropriate because section 18.5 of the Federal Court
Act2 provides that where an appeal under a statute lies, judicial review under sections 18 and 18.1 will not lie. This pleading is a bit baffling since counsel's argument in support of it is that an appeal of the Registrar's decision is available under section 56 of the Trade-marks Act, but not for these applicants as they were not parties to the Registrar's decision. If the appeal procedure is not available for these applicants then the decision is not to that "extent" subject to appeal and section 18.5 does not apply.
[18] Everyone agrees that the applicants cannot proceed under section 57 of the Trade-marks Act to have the ICEWINE mark expunged from the Register. The mark is not on the Register. Section 2 of the Trade-marks Act defines "register" to mean the register under section 26 of the Act. Section 26 refers to a register only of trade-marks and does not include official marks. I quote from the text by R. Hughes and T. Ashton in Hughes on Trade Marks at 453-4:
| It is doubtful that a section 9 mark can be revoked by an action in the Courts since there is nothing in the Act providing for revocation of such mark. |
[19] It is not as clear whether an appeal by the applicants might lie under section 56 of the Trade-marks Act. Subsection 56(1) states:
56. (1) An appeal lies to the Federal Court from any decision of the Registrar under this Act within two months from the date on which notice of the decision was dispatched by the Registrar or within such further time as the Court may allow, either before or after the expiration of the two months.
56. (1) Appel de toute décision rendue par le registraire, sous le régime de la présente loi, peut être interjeté à la Cour fédérale dans les deux mois qui suivent la date où le registraire a expédié l'avis de la décision ou dans tel délai supplémentaire accordé par le tribunal, soit avant, soit après l'expiration des deux mois.
[20] In Canadian Olympic Assn v. USA Hockey, Inc. (1997), 74 C.P.R. (3d) 348 (F.C.T.D.) at 350, Associate Chief Justice Jerome stated that there was no provision allowing for the revocation of an official mark, nor for rescinding a Registrar's decision to give public notice of the adoption and use of an official mark. He continued however, "any remedy which the plaintiff might have had with respect to the Registrar's decision, assuming it had standing, was to launch an appeal." A similar statement is found in Canadian Olympic Assn. v. USA Basketball , [1997] F.C.J. No. 825 (June 13, 1997) para. 7. At the same time, in the text previously referred to, Hughes on Trade Marks, at 453-7, note 27, it is noted that these statements are believed to be in error since there is no proceeding concerning a paragraph 9(1)(n) notice that a person other than the applicant for that notice could appeal.3
[21] I turn then to the remedy of judicial review set out in the Federal Court Act:
18. (1) Subject to section 28, the Trial Division has exclusive original jurisdiction
| (a) to issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus or writ of quo warranto, or grant declaratory relief, against any federal board, commission or other tribunal; and |
. . .
18. (1) Sous réserve de l'article 28, la Section de première instance a compétence exclusive, en première instance, pour :
| (a) décerner une injonction, un bref de certiorari, de mandamus, de prohibition ou de quo warranto, ou pour rendre un jugement déclaratoire contre tout office fédéral; |
. . .
18.1 (1) An application for judicial review may be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought. [Underlining added.]
18.1 Une demande de contrôle judiciaire peut être présentée par le procureur général du Canada ou par quiconque est directement touché par l'objet de la demande. [C'est moi qui souligne.]
[22] Section 28 is not relevant for present purposes. Counsel for the VQA argues that Magnotta cannot seek judicial review of the Registrar's decision because it is not "directly affected by the matter in respect of which relief is sought." The decisions in Pharmascience Inc. v. Canada (Commissioner of Patents), [1998] F.C.J. No. 1735 (November 26, 1998), and Cangene Corp. v. Eli Lilly and Co. et al. (1995), 63 C.P.R. (3d) 377 (F.C.T.D.) were cited as support for this position.
[23] The Pharmascience and Cangene decisions address quite different situations than the one that exists in this case. The Pharmascience case dealt with two decisions by the Commissioner of Patents to allow Searle to file a patent application late and subsequently to amend that application. The Cangene case dealt with a decision of the Commissioner of Patents to issue a patent to Eli Lilly. In the Pharmascience case, it was held that Pharmascience was only indirectly affected by the decisions to allow Searle to late file and amend its patent application because the decisions in question merely created a situation that might eventually affect Pharmascience. It was also noted that Pharmascience had a remedy under Rule 10 of the Patent Rules, which allowed it to protest the grant of the patent to Searle. In addition, Pharmascience could challenge the patent by bringing an action for a declaration of invalidity after its grant had issued. Similarly in the Cangene case, that corporation could assert its challenge to the Commissioner's interpretation of section 39(1) of the Patent Act and to the patent that had been issued to Eli Lilly by way of an action for a declaration of invalidity. In the case at bar, the applicants have a far more direct interest in the decision that has been made and, apparently, no mechanism for challenging the decision apart from either a section 56 appeal or a section 18.1 judicial review application.
[24] Whether the applicants should proceed by way of appeal under section 56 of the Trade-marks Act, or by way of judicial review pursuant to section 18.1 of the Federal Court Act, I would be prepared to grant the applicants an extension of time to allow them to commence the proceeding. It is clear that the applicants always had an intention to challenge the VQA's attempts to establish ICEWINE as its trade-mark, and they would equally have challenged the acceptance by the Registrar that it was a VQA official mark had they known of the VQA request. I would not characterize Magnotta's failure to notice the publication in the Trade-marks Journal of May 27, 1998, as "going to sleep" as counsel for the VQA argues. There was a certain amount of subterfuge involved in the VQA's application for, and obtaining of the publication of adoption and use of ICEWINE as its official mark, without notice to Magnotta. Not every person, nor every counsel, continually checks the publications in the Trade-marks Journal, particularly if they have no reason to suspect that it might contain information relevant to them or their clients' situation, which if the VQA is not a public authority, Magnotta's counsel could not be expected to find. The cases state that notice in that journal is public notice to all the world, but surely there has to be some reasonable likelihood that the person to whom the notice is thereby given should expect to find information relevant to their situation in the journal before it can be relied upon as notice to them.
[25] The applicants moved reasonably expeditiously after learning of the Registrar's decision, albeit initially inviting voluntary action by the VQA to resolve the differences between them. Lastly, there is considerable prejudice to the applicants if they cannot challenge the decision.
[26] I conclude that the applicants have demonstrated a continuing intention to challenge any issuance to the VQA of trade-mark (or official mark) rights in the word ICEWINE. They have provided an adequate explanation for the delay, due diligence in proceeding once they became aware of the decision, prejudice to themselves if the decision is allowed to stand, and a seriously arguable case. The requirements set out in Grewal v. Minister of Employment and Immigration (1985), 63 N.R. 106 (F.C.A.) have been met.
[27] I return then to the question whether a judicial review application is in any event the appropriate procedure. It is my understanding that other applicants have commenced actions by appeals under section 56 (e.g., T-2127-98). As noted above, it is not clear whether this is the correct procedure. Certainly, a judicial review application is well suited to a situation in which no notice has been given to an interested party and I note that courts have implied such requirements into legislative procedures when they have not been statutorily required. Counsel for the applicants is of the view that a section 18.1 judicial review application is the more legally correct way to proceed. I have no doubt that what is correct will not be decided by this Court. It will be for the Court of Appeal to decide. There may, therefore, be merit in having applications instituted pursuant to both routes proceeding simultaneously. Insofar as the need for a legal interest to commence a judicial review application is concerned, I am not persuaded that only those who have participated in the proceeding leading to the decision that it is sought to be reviewed have such an interest. This is so at least in the situation in which the interested person has not been given notice of, nor an opportunity to participate in, that process.
[28] For the reasons given the extension of time that is sought to commence a judicial review proceeding will be granted.
"B. Reed"
Judge
TORONTO, ONTARIO
March 10, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: 98-T-57
| STYLE OF CAUSE: MAGNOTTA WINERY CORPORATION and MAGNOTTA WINES LTD. and MAGNOTTAWINERY ESTATES LIMITED and MAGNOTTA CELLARS CORPORATION and MAGNOTTA VINEYARDS LTD. and MAGNOTTA DISTILLERY LTD. and MAGNOTTA VINTNERS LTD. and MAGNOTTA WINERY (TORONTO) LTD. |
- and -
VINTNERS QUALITY ALLIANCE
OF CANADA
DATE OF HEARING: MONDAY, FEBRUARY 22, 1999
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR ORDER BY: REED J. |
DATED: WEDNESDAY, MARCH 10, 1999
APPEARANCES: Mr. A.B. Schwisberg
For the Applicant
Ms. A. Thomas
For the Respondent
SOLICITORS OF RECORD: Schwisberg & Company
Barristers & Solicitors
809-2001 Sheppard Ave. E.,
North York, Ontario
M2J 4Z8
For the Applicant
Deeth Williams Wall
Barristers & Solicitors
National Bank Building
400-150 York St.,
Toronto, Ontario
M5H 3S5
For the Respondent
FEDERAL COURT OF CANADA
Date: 19990310
Docket: 98-T-57
Between:
| MAGNOTTA WINERY CORPORATION |
and MAGNOTTA WINES LTD.
and MAGNOTTA WINERY ESTATES LIMITED
and MAGNOTTA CELLARS CORPORATION
and MAGNOTTA VINEYARDS LTD.
and MAGNOTTA DISTILLERY LTD.
and MAGNOTTA VINTNERS LTD.
and MAGNOTTA WINERY (TORONTO) LTD.
| Applicant |
- and -
| VINTNERS QUALITY ALLIANCE |
OF CANADA
Respondent
REASONS FOR ORDER
__________________
| 54. A person may at any time bring a motion for directions concerning the procedure to be followed under these Rules. | 54. Une personne peut présenter une requête à tout moment en vue d'obtenir des directives sur la procédure à suivre dans le cadre des présentes règles. |
| 18.5 Nothwithstanding sections 18 and 18.1, where provision is expressly made by an Act of Parliament for an appeal as such to the Court, to the Supreme Court of Canada, to the Court Martial Appeal Court, to the Tax Court of Canada, to the Governor in Council or to the Treasury Board from a decision or order of a federal board, commission or other tribunal made by or in the course of proceedings before that board, commission or tribunal, that decision or order is not, to the extent that it may be so appealed, subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with, except in accordance with that Act. | 18.5 Par dérogation aux articles 18 et 18.1, lorsqu'une loi fédérale prévoit expressément qu'il peut être interjeté appel, devant la Cour fédérale, la Cour suprême du Canada, la Cour d'appel de la cour martiale, la Cour canadienne de l'impôt, le gouverneur en conseil ou le Conseil du Trésor, d'une décision ou d'une ordonnance d'un office fédéral, rendue à tout stade des procédures, cette décision ou cette ordonnance ne peut, dans la mesure où elle est susceptible d'un tel appel, faire l'objet de contrôle, de restriction, de prohibition, d'évocation, d'annulation ni d'aucune autre intervention, sauf en conformité avec cette loi. |
3 . . .These decisions suggest that an appeal could be taken from a decision to publish notice of adoption of such marks. However, this is believed to be an error since there was no proceeding concerning such notice in the Trade-marks Office which a person other than the applicant could appeal.