Date: 19990129
Docket: T-733-96
BETWEEN:
PRINCE EDWARD ISLAND MUTUAL INSURANCE
Plaintiff
AND:
THE INSURANCE COMPANY OF PRINCE EDWARD ISLAND
Defendant
REASONS FOR JUDGMENT
ROULEAU, J.
[1] This is a statutory passing off action pursuant to paragraph 7(b) of the Trade-marks Act, R.S., c. T-10, s.1.
[2] The plaintiff claims that, although it does not own a registered trade mark, it has acquired a valuable reputation and goodwill which is symbolized by its name PRINCE EDWARD ISLAND MUTUAL FIRE INSURANCE COMPANY (amended in 1994 to drop the word FIRE), which the plaintiff and its predecessors have used as a trade mark or trade name in association with insurance services for over one-hundred and ten years.
[3] The plaintiff further claims that the defendant has, by commencing to offer and sell insurance services since January 1, 1993, in association with the trade mark and trade name THE INSURANCE COMPANY OF PRINCE EDWARD ISLAND, directed public attention to its services and business in such a way as to cause or be likely to cause confusion in Canada between the defendant's insurance services and business and the plaintiff's services and business. The plaintiff therefore seeks a permanent injunction, delivery up, nominal damages of $1.00 and costs.
[4] The facts are not in dispute and are set out in an Agreed Statement of Facts which is attached as Schedule "A" to these Reasons for Judgment and which can be summarized as follows.
[5] On April 10, 1885, the PRINCE EDWARD ISLAND AGRICULTURAL MUTUAL FIRE INSURANCE COMPANY was incorporated, for the purpose of carrying on the business of issuing insurance polices and providing insurance services with respect to loss or damage to farm property located in Prince Edward Island. In 1899, another company, the PRINCE EDWARD ISLAND MUTUAL FIRE INSURANCE COMPANY, was incorporated for the purpose of issuing insurance policies and providing insurance services in respect to loss or damage to rural property, other than farm property, located in the province. The two companies were related and shared the same head offices in Summerside, P.E.I.
[6] On April 10, 1941, the two companies amalgamated under the name PRINCE EDWARD ISLAND MUTUAL FIRE INSURANCE COMPANY, the plaintiff in the present action. In 1992, the plaintiff's Board of Directors agreed to delete the word FIRE from the company name and on May 19, 1994, the plaintiff's name was amended to PRINCE EDWARD ISLAND MUTUAL INSURANCE COMPANY. Since that date it has carried on its insurance business under that name and other related names such as PEI MUTUAL INSURANCE COMPANY and PEI MUTUAL.
[7] On April 11 and 18, 1987, a notice of petition to be presented to the Legislature of the Province of Prince Edward Island to incorporate THE PRINCE EDWARD ISLAND GENERAL INSURANCE COMPANY to carry on the business of selling fire, automobile and general insurance, excluding life insurance, was published in the Royal Gazette.
[8] After seeing that announcement, the plaintiff's manager, Malcolm MacFarlane, wrote to the Superintendent of Insurance, Mr. Bennett Campbell, on April 21, 1987, asking that he "intervene and prevent the name of "The Prince Edward Island General Insurance Company from being used as the name for this new proposed insurance company" on the basis that the plaintiff's and defendant's services would be confused with each other.
[9] The Superintendent of Insurance shared the plaintiff's concern and raised the issue with the promoter of the petition and counsel for the defendant, Mr. James Revell, suggesting that another name be chosen so as to avoid confusion. Mr. Campbell specifically advised Mr. Revell that the plaintiff had raised a concern relating to the defendant's proposed name. Mr. Revell then advised Mr. Charlie Cooke, the President and founder of the defendant, of the issue and sought instructions. Mr. Cooke agreed that the defendant should change its name to accommodate the plaintiff and the proposed name of the defendant was amended to THE INSURANCE COMPANY OF PRINCE EDWARD ISLAND.
[10] Thereafter, a petition was filed with the Legislature of the Province of Prince Edward Island on April 27, 1987, to incorporate THE INSURANCE COMPANY OF PRINCE EDWARD ISLAND and the defendant company was incorporated on May 14, 1987. The defendant did not commence its business until late December of 1992 or January of 1993, although with the approval of the Superintendent of Insurance, it did list its name in the Yellow Pages directory in May of 1992.
[11] Aside from these agreed facts, the evidence at trial established the following particulars.
[12] After Mr. Cooke conceded that the defendant should change its name, Mr. Revell made the necessary revisions to the defendant's proposed private member's bill and forwarded the bill to the Superintendent with a cover letter confirming that the defendant had agreed to change its name. Mr. Revell testified that he expected to hear from the Superintendent if there was any further concern regarding the name.
[13] Mr. Campbell's evidence at trial was that he was fully satisfied with the solution and upon receipt of the defendant's amended bill, he advised Mr. MacFarlane in writing of the name change. The Superintendent stated in his correspondence that he believed the solution would solve any potential problem and that he hoped it met with Mr. MacFarlane's approval. Mr. Campbell did not receive a reply or any response from Mr. MacFarlane and the plaintiff, and the matter was never raised when he attended the plaintiff's annual general meeting. He therefore believed that the matter had been satisfactorily concluded.
[14] However, the plaintiff did raise the issue of the defendant's name with the Superintendent again in February of 1992, at which time Mr. MacFarlane sent a letter to Mr. Campbell complaining of a rumour about a new insurance company which was about to be incorporated, and which intended to use the words "PEI" or "Prince Edward Island" in its name. During his examination-in-chief, Mr. Campbell stated that he was surprised and confused by Mr. MacFarlane's letter as he thought the matter had been resolved in 1987.
[15] The Superintendent wrote back to Mr. MacFarlane confirming that the Insurance Company of Prince Edward Island had been incorporated in 1987 and that the company had changed its name prior to its incorporation at the request of the plaintiff. He indicated that he felt the problem had been resolved in 1987. There was no response from Mr. MacFarlane or the plaintiff, leading Mr. Campbell, once again, to the conclusion that the plaintiff, having been reminded of the events of 1987 was satisfied with the situation.
[16] Nothing more transpired until June 27, 1995, when Blair Campbell, the plaintiff's claims manager met with the Superintendent of the Insurance to canvass certain concerns he had over some "misdirected communications" the plaintiff had received and which were clearly intended to be sent to the defendant. During the course of the meeting, and in a follow-up letter, Blair Campbell asked the Superintendent to use his powers to have the defendant change its name.
[17] The Superintendent did not take any steps in this regard however because, as he testified at the trial, the issue had already been dealt with in 1987. Furthermore, he was not satisfied that the misdirected communications offered by Mr. Campbell were compelling evidence that a problem existed and his own records revealed that there had been no complaints or inquiries from the public or otherwise.
[18] On November 15, 1995, plaintiff's counsel sent a letter to the defendant requesting that it change its name. In January of 1996, the plaintiff's solicitors provided copies of the misdirected communications to the defendant's counsel and reiterated its request for a name change. When the defendant did not acquiesce, the plaintiff commenced its action in this Court on March 29, 1996, by way of Statement of Claim.
[19] The issues raised in this litigation have been delineated by the parties as follows:
| 1. Is paragraph 7(b) of the Trade-marks Act intra vires the Parliament of Canada; |
| 2. Does the Federal Court have jurisdiction to grant the injunctive relief and other relief requested by the plaintiff as against the defendant; |
| 3. As at the material date, (which is on or about January 1, 1993, when the defendant actually commenced its business), did the plaintiff have a reputation or goodwill associated with its trade mark and trade name PRINCE EDWARD ISLAND MUTUAL FIRE INSURANCE COMPANY which was capable of protection; |
| 4. As at the material date, did the defendant, through its use of its name as a trade mark and/or trade name, begin to direct public attention to its services or business in such a way as to cause or be likely to cause confusion in Canada between its services or business and the services or business of the plaintiff; and, |
| 5. Is the plaintiff disentitled to the relief it has claimed by reason of the applicable statutory limitation period, laches or acquiescence. |
[20] The first two issues may be summarily disposed of. The defendant maintains that this Court does not have jurisdiction to force a company to change its name where that name has been granted by an act of the legislature of a province. Both the defendant and plaintiff corporations, it is argued, came into existence in this fashion and neither of the names are registered trade marks. The defendant submits that this Court is not empowered to indirectly tell the legislature of Prince Edward Island what to do by ordering the injunctive relief requested by the plaintiff, particularly in a dispute between two unregistered trade marks. The defendant's position is that it is not trade marks which are at issue in this dispute, but rather the corporate names or trade names "PRINCE EDWARD ISLAND MUTUAL INSURANCE COMPANY" and "THE INSURANCE COMPANY OF PRINCE EDWARD ISLAND".
[21] I do not agree. First, the evidence is clear that both the plaintiff and the defendant have intended to use, and have used, their corporate names as a trade marks and trade names in carrying on their respective insurance businesses. In Asbjorn Horgard A/S v. Gibbs/Nortac Industries et al, [1987] 3 F.C. 544 and Celliers du Monde Inc. v. Dumont Vins & Spiritueux Inc., [1992] 2 F.C. 634, the Federal Court of Appeal held that paragraph 7(b) of the Trade-marks Act is valid federal legislation insofar as the passing off claim is connected to a trade mark, whether that mark is registered or not. In other words, the section protects the goodwill associated with unregistered trade marks.
[22] Second, if the plaintiff were to succeed in establishing a case of passing off under paragraph 7(b) of the Trade-marks Act, this Court is not impeded from ordering the defendant to cease using its name, as a trade mark, trade name or in any other way. If a corporate name is adopted that is likely to cause confusion with another older established company, the use of that corporate name will be enjoined even though the name may have been adopted innocently and even though the competent authority has issued a charter of incorporation.
[23] The issue of estoppel can also be dealt with summarily. The defendant maintains that the plaintiff is estopped from asserting its claim by virtue of its conduct; namely, that although it was aware of the defendant's activities, the plaintiff was silent and delayed in taking any action to protect its asserted rights. It is submitted that this silence and delay constitutes acquiescence on the plaintiff's part and it would therefore be unjust to allow its claim to stand.
[24] I am not prepared to dismiss the plaintiff's claim on this basis. It is true, that in a suitable case, the Court may refuse to provide equitable relief to a claimant who has delayed in asserting its claim. This will only be done however, where the delay has been for an inordinate length of time. In Invacare Corp. v. Everest and Jennings Canadian Ltd. (1987), 14 C.P.R. (3d) 156 (F.C.T.D.), this Court made the following comments with respect to the defence of laches and acquiescence at pp. 165-6:
| Mere silence, is not, in my view, a defence to an action for infringement of rights. |
| Nor is a long delay in bringing action against an infringer a ground for invoking the bar of laches. I cite Thorson P., of the Exchequer Court, in Minerals Separation North American Corp. v. Noranda Mines, Ltd. (1947), 12 C.P.R. at p. 102 and pp. 183-4, [1947] Ex. C.R. 306, 6 Fox Pat. C. 130 at pp. 208-9: |
| It was this inaction that was relied upon as laches and acquiescence. But counsel for the defendant admitted that he could not, in this Court, maintain this defence in view of the statement by Fletcher Moulton L.J. in Vidal Dyes Syndicate v. Levinstein Ltd. (1912), 29 R.P.C. 245 at 259 that it is settled law that a patentee need not attempt to stop an infringement when he first learns of it and that his right of action against an infringer is not affected by the circumstance that he did not take action until just before the expiry of the patent. While counsel admitted that he could not urge the defence of laches and acquiescence in this Court he did not abandon it. I adopt the statement of Fletcher Moulton L.J. as applicable in the present case. The plaintiff's delay in bringing action was not laches or acquiescence on its part. |
[25] I find that principle equally applicable to the facts of this case. It may be true that the plaintiff did not commence its action as soon as it was entitled to do so. However, the relevant limitation period is six years, and the action was commenced approximately three years after the defendant's impugned activities began. Furthermore, given the complaints made to the Superintendent by the plaintiff with respect to the defendant's name and the subsequent meeting between the Superintendent and the plaintiff's representative, the plaintiff cannot, in any way, be considered to have consented to the defendant's use of its name. The circumstances therefore do not warrant dismissing the action on the grounds of laches or estoppel.
[26] I turn now to the issue of passing off. In Giba-Giegy Canada Ltd. v. Apotex Inc., (1993), 44 C.P.R. (3d) 289, the Supreme Court of Canada held that, in order to succeed in an action for passing off, a plaintiff must prove three things:
| 1. that it has goodwill attached to the goods or services which it supplies, in the mind of the purchasing public, by association with the identifying name or mark under which its particular goods or services are offered; |
| 2. that the defendant has made a misrepresentation (whether or not intentional) leading or likely to lead the public to believe that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff; and, |
| 3. that the plaintiff, as a result of the misrepresentation, has suffered, or is likely to suffer damage. |
[27] The evidence in this case leaves no doubt that the plaintiff has established the existence of goodwill associated with its name PRINCE EDWARD ISLAND MUTUAL INSURANCE COMPANY. The plaintiff and its predecessors have used PRINCE EDWARD ISLAND MUTUAL FIRE INSURANCE COMPANY (amended in 1994 to drop the word FIRE) as a trade mark or trade name in association with insurance services for over one-hundred and ten years. In addition:
| (a) the plaintiff has, continuously from 1971 to the present used its name in a prominent fashion in Yellow Page advertisements published in Prince Edward Island; |
| (b) the name of the plaintiff has been used on exterior signage prominently displayed at its head office address in Summerside, Prince Edward Island since at least as early as 1972. The signage on the back of the building has, since 1994, borne the words PEI MUTUAL INSURANCE COMPANY; |
| (c) the name of the plaintiff has appeared, in a prominent and distinctive fashion, on thousands of insurance policies and annual reports distributed by the plaintiff to its policy holders since at least as early as 1980; |
| (d) the name of the plaintiff has been labelled on fire extinguishers sold by the plaintiff (between four-hundred and five-hundred each year) to its policy holders since 1978; |
| (e) the name of the plaintiff has been used in connection with advertising, promotional and sponsorship activities for many years prior to the material date; and, |
| (f) in paragraph 27 of its written submissions, the defendant concedes that the plaintiff has established goodwill in association with its name. |
[28] I am satisfied therefore that the plaintiff has established goodwill in connection with its name.
[29] What the evidence does not support however, is that a likelihood of confusion exists as to the source of the services offered by the defendant, such that the public would assume that those services were performed by, or in some way connected to, the plaintiff.
[30] In addressing the issue of "likelihood of confusion, regard must be had to the following factors set out in subsection 6(5) of the Trade-marks Act:
| (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 idea suggested by them. |
a) le caractère distinctif inhérent des marques de commerce ou noms commerciaux, et la mesure dans laquelle ils sont devenus connus; b) la période pendant laquelle les marques de commerce ou noms commerciaux ont été en usage; c) le genre de marchandises, services ou entreprises; d) la nature du commerce; e) le degré de ressemblance, entre les marques de commerce ou les noms commerciaux dans la présentation ou le son, ou dans les idées qu'ils suggèrent. |
[31] In considering these factors and making its determination with respect to confusion, the Court is required not only to consider the evidence before it, but also to apply its own common sense to the facts. The test is whether the ordinary and average consumer would be confused. As stated by the Supreme Court of Canada in Giba-Giegy Canada Ltd. v. Apotex Inc., supra, at p. 301:
| The courts and authors have unanimously concluded that the facts must be weighed in relation to an "ordinary" public, "average" customers: ". . . you must deal with the ordinary man and woman who would take ordinary care in purchasing what goods they require, and, if desiring a particular brand, would take ordinary precautions to see that they get it" (Neville J. in Henry Thorne & Co. v. Sandow (1912), 29 R.P..C. 440 (Ch.D.) at p. 453.) |
[32] With respect to the first factor in subsection 6(5) of the Act, inherent distinctiveness of the trade marks in question, it is well established that marks which contain descriptive words are not inherently distinctive and will be afforded only a minimal degree of protection by the Court. In particular, trade marks or trade names which contain a reference to a geographic location, such as those in issue here, are descriptive rather than distinctive and do not deserve a wide ambit of protection. Where the court is called upon to determine the "likelihood of confusion" in respect of a descriptive name or mark, even small differences between the marks will be sufficient to diminish the "likelihood of confusion".
[33] Furthermore, where a party adopts a descriptive name, it must accept that a certain amount of confusion may arise. In Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 56 C.P.R. (3d) 129 (Alta. Q.B.); aff'd (1996) 67 C.P.R. (3d) 444 (Alta. C.A.); the Court made the following comments in this regard at p. 183:
| Even where services are identical, where the name is descriptive rather than distinctive, a certain amount of confusion may be inevitable without sanction: . . . Office Cleaning Services Ltd. v. Westminster Window and Sign General Cleaners Ltd., supra. In the latter authority, Lord Simonds, at p. 41, said: |
| So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some embers of the public will be confused whatever the differentiating words may be . . . It comes in the end, I think, to no more than this, that where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must run unless the first user is allowed unfairly to monopolize the words. The Court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered. |
[34] In the present case, the plaintiff's name is highly descriptive (Insurance Company) and includes a descriptive geographic element (Prince Edward Island). Accordingly, it is not entitled to a high degree of protection and it must accept the inevitable risk of some confusion in the use of such a highly descriptive.
[35] Turning to the other factors listed in subsection 6(5) of the Act, the evidence demonstrates that there are significant differences in the services and the trade of the parties. For example, the plaintiff's products are sold through employee agents who service specific areas of the province. These agents are given a "book" of clients and an emphasis is placed on servicing these clients rather than marketing or sales.
[36] In contrast, the defendant sells its product through an exclusive agency which was founded by Charlie Cooke, the founder of the defendant. As a result, there is a strong relationship and linkage between the defendant and its agency which serves to distinguish the defendant in the marketplace. Indeed, most of the witnesses who testified referred to the defendant not by its trade name, but rather as "Cooke Insurance".
[37] Furthermore, the manner in which the plaintiff is presented to the public in general, and to its members in particular, is strikingly different than the manner in which the defendant presents itself. Most importantly, the plaintiff has carefully and purposefully nurtured its reputation as a mutual company. In fact, the plaintiff is never referred to without the word "mutual"; that is, it is never referred to as Prince Edward Island or PEI Insurance. It is most commonly referred to as "PEI Mutual". All of its stationery, advertising and policies emphasize the "mutual" nature of the plaintiff. Indeed, the plaintiff emphasizes its nature as a "mutual" company owned by its members, protecting each other, providing reasonably-priced services and even discounts and rebates from time to time.
[38] In contrast, the defendant's marketing and business materials paint an entirely different picture. In particular, the defendant represents itself as an island-based general insurance company linked to Charlie Cooke Insurance. Its dominant market is in automobile insurance as well as writing commercial risks. The plaintiff does not, and never has, sold auto insurance and the extent of its commercial sales is minimal, its emphasis being fire insurance related primarily to the farming community.
[39] Accordingly, while there is some level of overlap and competition between the parties, what is significant for purpose of determining the question of confusion, is that the nature of the relevant services and trade is such that the parties interact with the public, market, advertise and sell, emphasize their business goals and identities, all in manner so as to distinguish one from the other. These factors weigh heavily against any possibility of likelihood of confusion.
[40] I turn now to the degree of resemblance between the trade marks. There is no doubt that the names contain two elements in common, namely, "Prince Edward Island" and "Insurance Company". However, the fact that both marks contain these particular elements is not sufficient, in and of itself, to conclude that the marks are confusing. The tests to be applied are those of appearance, sound and the ideas suggested by the marks. In applying these tests, the first principle to be invoked is that the marks are to be looked at as totalities and not as dissected items. It is the idea of each mark, that is, the net impression left by the mark as a whole upon the mind, which is to be considered. Accordingly, the marks should not be subjected to intense and detailed analysis, but should rather be viewed from the standpoint of a person who has only an imperfect recollection of one mark and then later sees or hears the competing mark by itself.
[41] This was the approach followed by the Court in Sealy Sleep Products Ltd. v. Simpson's-Sears Ltd (1960), 20 Fox Pat. C. 76, (Ex. Ct), wherein Thorson, P. made the following comments at pp. 81-82:
| It is not a proper approach to the determination of whether one trade mark is confusing with another to break them up into their elements, concentrate attention upon the elements that are similar and conclude that, because there are similarities in the trade marks, the trade marks as a whole are confusing with one another. Trade marks may be different from one another and, therefore, not confusing with one another when looked at in their totality, even if there are similarities in some of the elements when viewed separately. It is the combination of the elements that constitutes the trade mark and it is the effect of the trade mark as a whole, rather than any particular part in it, that must be considered. |
[42] I am satisfied that as a matter of first impression, the trade marks in issue here are substantially dissimilar and, when looked at in their totality, there is so little resemblance between them that one could not conclude there exists a likelihood of confusion. Again, the plaintiff's logo emphasizes the word "Mutual" and features an umbrella covering Prince Edward Island. The defendant's mark on the other hand, depicts a tree with three smaller trees surrounding it. In short, the entire scheme and structure of the plaintiff's name and the manner in which it is presented is completely and readily distinguishable from that of the defendant.
[43] Finally, there is the issue of actual confusion. The plaintiff has submitted in evidence a series of misdirected form letters and telephone calls in support of its allegation that there was actual confusion sufficient to justify a finding of a "likelihood of confusion" under section 7 of the Trade-marks Act.
[44] I am not satisfied that the evidence tendered by the plaintiff substantiates its claim. First of all, the majority of the misdirected documents have explanations which are unrelated to confusion. For example, the vast majority of them originated from the Co-operators as a result of a mis-entry in the Co-operators' internal directory. Until this was brought to The Co-operators attention, there was no reason for it to identify the error. The plaintiff did not advise Co-operators and the defendant, not having been informed of the documents by the plaintiff, was not in a position to take any steps to correct the error until after this action had commenced.
[45] With respect to the other incidents of alleged confusion, the evidence is clear that they were the result of carelessness, ignorance or inadvertence, rather than confusion as to source.
[46] Most significant however, is the fact that there are no examples of any consumer or third party contacting the defendant or Cooke Insurance in an effort to find or contact or deal with the plaintiff. The Superintendent of Insurance has been satisfied with the names of the two companies since 1987 and nothing has happened to change his mind; he has not received any complaints from the public or from other insurance companies. Furthermore, since 1992, the plaintiff and the defendant have received and reviewed literally thousands of pages of correspondence from bankers, lawyers and policy holders. With over twenty-thousand policies at play between the parties, there is no evidence of one misdirected piece of paper, letter, cheque or application from an actual or potential client.
[47] What the plaintiff is in effect seeking here is a monopoly over the use of the name Prince Edward Island and the words Insurance Company. However, the court must strive to balance the rights of the plaintiff and the public while still respecting the right of the defendant to compete freely in the marketplace. In United Artists Corp. v. Pink Panther Beauty Products Ltd. (1998), 80 C.P.R. (3d) 247, the Federal Court of Appeal made the following observations in this regard at pp. 258-9:
| A trade-mark is a mark used by a person to distinguish his or her wares or services from those of others. The mark, therefore, cannot be considered in isolation, but only in connection with those wares or services. This is evident from the wording of subsection 6(2). The question posed by that subsection does not concern the confusion of marks, but the confusion of goods or services from one source as being from another source. It is for this reason that marks which rely on geographic origins or generally descriptive words (e.g. the fictional marks Pacific Coffee or Premium Soda) are not afforded a wide ambit of protection. Even though proposed marks might be similar to them, the public is not likely to assume that two products that describe themselves as being "Pacific" or "Premium" necessarily originate from the same source. Because confusion is not likely, protection is not necessary. |
| . . . The five specific considerations [in section 6 of the Trade-marks Act] that must be considered indicate that the Court must balance the right of the trade-mark owner to the exclusive use of his or her mark, with the right of others in the marketplace to compete freely. |
[48] Applying those principles to the facts before me, I am satisfied that the evidence before the Court in this case does not establish a likelihood of confusion as to the source of the services offered by the plaintiff and the defendant.
[49] For these reasons, the plaintiff's action is dismissed. However, this dispute did raise legitimate questions of fact and law and it is appropriate therefore that there be no order as to costs.
JUDGE
OTTAWA, Ontario
January 29, 1999