Date: 20170815

Docket: A-3-16

Citation: 2017 FCA 170

CORAM:

WEBB J.A. SCOTT J.A. WOODS J.A.

 

BETWEEN:

U-HAUL INTERNATIONAL INC.

Appellant

and

U BOX IT INC.

Respondent

Heard at Ottawa, Ontario, on January 18, 2017.

Judgment delivered at Ottawa, Ontario, on August 15, 2017.

REASONS FOR JUDGMENT BY:	WOODS J.A.
CONCURRED IN BY:	WEBB J.A. SCOTT J.A.

 

Date: 20170815

Docket: A-3-16

Citation: 2017 FCA 170

CORAM:

WEBB J.A. SCOTT J.A. WOODS J.A.

 

BETWEEN:

U-HAUL INTERNATIONAL INC.

Appellant

and

U BOX IT INC.

Respondent

REASONS FOR JUDGMENT

WOODS J.A.

[1]               U-Haul International Inc. (U-Haul) is a U.S. corporation that applied for registration under the Trade-marks Act, R.S.C. 1985, c. T-13 (the Act) in respect of four trademarks, U-BOX, U-BOX WE-HAUL, U-HAUL U-BOX, and U-HAUL U-BOX WE-HAUL. U-Haul has licensed these marks to entities that carry on U-Haul’s business in Canada.

[2]               U Box It Inc., a Canadian corporation, opposed the applications on the ground that the trademarks are confusing with its registered trademark U BOX IT.  

[3]               In four separate decisions, The Trade-marks Opposition Board (the Board) permitted the registration of the two marks that contain U-Haul’s name, U-HAUL U-BOX and U-HAUL U-BOX WE-HAUL. It denied registration of the other two, U-BOX and U-BOX WE-HAUL.

[4]               U-Haul appealed to the Federal Court under section 56 of the Act with respect to the two decisions adverse to it. The Federal Court upheld these decisions, and U-Haul now appeals to this Court.

[5]               In this appeal, U-Haul submits that the Federal Court erred by: (1) not conducting a de novo analysis on the basis of new evidence, and (2) upholding the Board’s conclusion that the trademarks are confusing.

[6]               By way of background, U-Haul applied for registration of U-BOX and U-BOX WE-HAUL on October 15, 2009 for use in association with “moving and storage services, namely, rental, moving, storage, delivery and pick up of portable storage units.” Use of these trademarks in Canada commenced around the same time.

[7]               As suggested by the marks, this part of U-Haul’s business involves a service whereby a large box, or portable storage unit, is supplied to a customer, filled by the customer, and then taken away by a U-Haul entity for moving or storage. Typically the service itself offers an opportunity for advertising because the boxes prominently display the trademarks at issue and sit on the customer’s driveway. 

[8]               U Box It Inc.’s trademark, U BOX IT, was registered on February 29, 2008 for use in association with “garbage removal and waste management services.”

[9]               The garbage removal business is performed in a similar fashion to U-Haul’s business. A large box is supplied to a customer, and after being filled with waste by the customer the box is picked up for disposal. Typically these boxes also prominently display the trademark at issue and sit on customers’ driveways.

I.                   Relevant Legislation

[10]           The relevant provisions of the Act are reproduced in Appendix A.

[11]           Under section 38 of the Act, the registration of a trademark may be opposed on any of the following grounds:

[12]           These grounds relate to various requirements for registration in the Act. Three of these are relevant in this appeal, and all relate to the test for confusion. They are:

(a)                A trademark is not registrable if it is confusing with a registered trademark (paragraphs 38(2)(b) and 12(1)(d) of the Act). The determination of whether two trademarks are confusing is made as at “the date where the matter is disposed of on the evidence adduced” (Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R. (3d) 413 at 422, 130 N.R. 223 (F.C.A.)).

(b)               A trademark that had been used in Canada or made known in Canada may not be registered if it is confusing with a trademark that had been previously used in Canada or made known in Canada by any other person. This determination is to be made as at the date that the applicant’s mark was first used or made known in Canada (paragraphs 38(2)(c) and 16(1)(a) of the Act).

(c)                A trademark can only be registered if it is “distinctive”, which means that the trademark distinguishes the goods or services from the goods or services of others, or is adapted to distinguish them (paragraph 38(2)(d) and section 2 of the Act). This is to be determined as at the date of filing the statement of opposition (Park Avenue Furniture, at 423-424).

[13]           The framework for determining whether one trademark is confusing with another is set out in section 6 of the Act. In general, the test to determine confusion is whether the use of both marks in the same area would be likely to lead to the inference that the relevant goods or services are manufactured, sold, leased, hired or performed by the same person. For this purpose, the term “use” is given an expansive meaning in section 4 of the Act.

[14]           Subsection 6(5) sets out the considerations to be taken into account in this determination. All the surrounding circumstances are to be considered, including:

II.                The Board and Federal Court decisions

[15]           The Board (per Member Fung) determined that, based on the three grounds of opposition mentioned in the previous section, U-Haul failed to show on a balance of probabilities that U-Haul’s two trademarks were not confusing with U Box It Inc.’s mark: 2014 TMOB 207 (U-BOX) and 2014 TMOB 208 (U-BOX WE-HAUL). The particular findings of the Board are concisely summarized in U-Haul’s memorandum, at paragraph 16:

(a)        On September 26, 2014, the date of the TMOB Decisions, the U-Haul Trademarks were confusing with the previously registered Respondent Trademark – contrary to s. 12(1)(d) of the Trade-marks Act, RSC 1985, c T-13 (“TMA”);

(b)       On October 3, 2009, the date of first use of the U-Haul Trademarks, the Appellant was not entitled to registration because the U-Haul Trademarks were confusing with the previously used Respondent Trademark – contrary to s. 16(1)(a) of the TMA; and

(c)        On August 31, 2010 (U-BOX) and on November 15, 2010 (U-BOX WE-HAUL), the dates of the Statements of Opposition, the U-Haul Trademarks were not distinctive because they were confusing with the Respondent Trademark – contrary to s. 2 of the TMA.

[16]           In its confusion analysis, the Board considered the factors listed in subsection 6(5) of the Act and then weighed these factors in reaching an overall conclusion. The Board’s general conclusion with respect to each of the subsection 6(5) factors is set out below.

                         (a)               Paragraph 6(5)(a) – The factor of distinctiveness favours U-Haul because of the distinctiveness acquired through greater sales and presence.

                        (b)               Paragraph 6(5)(b) – The factor of length of time in use favours U Box It Inc. because it commenced sales using its trademark in 2006 whereas U-Haul did not commence using its trademarks in Canada until October 3, 2009.

                         (c)               Paragraph 6(5)(c) – The nature of the services factor slightly favours U Box It Inc. Although the services themselves are not the same since one is garbage disposal and the other is moving and storage, there is similarity in the way the services are provided and the services are complementary since a customer who is moving or renovating may require moving or storage services and also garbage removal services.

                        (d)               Paragraph 6(5)(d) – The nature of trade factor does not favour either party. Although there is a connection between the services in that potential customers could require both types of services in connection with a move or renovation project, an overlap in channels of trade is unlikely.

                         (e)               Paragraph 6(5)(e) – The factor of resemblance favours U Box It Inc. because the trademarks share the same important feature, “U BOX”.

[17]           In weighing these factors, the Board found in favour of U Box It Inc. The Board’s analysis was very similar for the two U-Haul trademarks and at all material dates.  Its general conclusion with respect to U-BOX is reproduced from paragraph 53 of that decision.  

[53] In applying the test for confusion, I have considered it as a matter of first impression and imperfect recollection. Having regard to all the surrounding circumstances including the high degree of resemblance between the parties’ trade-marks, the longer period of time for which the Opponent’s trade-mark has been in use, as well as the similarities in the execution of and the complementary nature of the parties’ services, I am of the view that the average Canadian consumer, when faced with moving and storage services offered and performed under the trade-mark U-BOX, would likely think that they originate from the same source as the garbage removal and waste management services offered and performed under trade-mark U BOX IT, or vice versa. While I acknowledge that the Applicant’s Mark has acquired distinctiveness to a larger extent than that of the Opponent’s from 2009 to 2012, I am of the view that it is insufficient to shift the balance of probabilities in favour of the Applicant in the present case.

[18]           Accordingly, the Board allowed the opposition to U-Haul’s applications and denied the registration of these two trademarks.

[19]           In the appeal to the Federal Court, there were two issues, whether to conduct a de novo analysis on account of new evidence, and whether there was an error in the Board’s finding of confusion.

[20]           In reasons cited as 2015 FC 1345, the Federal Court (per Camp J.) refused to conduct a de novo review on the basis that the new evidence would not have made a material difference in the Board’s findings of fact or exercise of discretion. As for the confusion finding, the Federal Court applied a reasonableness standard of review and dismissed the appeal on the basis that the Board’s decisions were reasonable.

III.             Analysis

A.                Should the Federal Court have undertaken a de novo analysis?

[21]           Section 56 of the Act permits an appeal of a decision of the Board to the Federal Court. In the appeal, new evidence may be introduced and the Federal Court “may exercise any discretion vested in the Registrar” (subsection 56(5)).

[22]           The introduction of new evidence may radically change the approach to be taken by the Federal Court. This was discussed in Servicemaster Company v. 385229 Ontario Ltd. (Masterclean Service Company), 2015 FCA 114, 132 C.P.R. (4th) 161, at paragraph 16:

[16] The standard of review to be applied in an appeal of a decision of the Board is reasonableness. In particular, the Board’s interpretation of the Act as its home statute is subject to deference.  […] Moreover, when new evidence is adduced on appeal before the judge under section 56 of the Act and the judge comes to the conclusion that the new evidence would have materially affected the Board’s finding of fact or exercise of discretion, the judge must come to his own conclusion on the issue to which the additional evidence relates (Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145, [2000] F.C.J. No. 159 at para.51).

[23]           At the Federal Court, U-Haul introduced new affidavit evidence that included telephone listings for the purpose of establishing that U-Haul’s and U Box It Inc.’s services and channels of trade do not overlap. According to U-Haul, this evidence reveals that no one business in Canada likely provides the services of both garbage removal and moving and storage.

[24]           The Federal Court considered whether a de novo analysis was appropriate as a result of this new evidence and concluded that it was not because the new evidence would not have materially affected the Board’s reasoning or its findings of fact (Federal Court reasons, paragraph 34).

[25]           U-Haul submits that the Federal Court should have conducted a de novo review. It submits that the new evidence is material because it negates the Board’s finding that the parties’ services may be complementary. This is a question of mixed fact and law for which the standard of review is palpable and overriding error: Monster Cable Products, Inc. v. Monster Daddy, LLC, 2013 FCA 137, 445 N.R. 379, at paragraph 4.

[26]           In my view, the Federal Court made no palpable and overriding error in refusing to undertake a de novo review. I agree with U Box It Inc. that the new evidence merely supplements or confirms the findings of the Board. The Federal Court’s conclusion on this issue, which was well explained in its reasons, was open to it. 

B.                 Are the trademarks confusing?

[27]           As mentioned above, the Board and the Federal Court confirmed all three grounds of opposition relating to confusion. I will first consider the decision under paragraph 12(1)(d) of the Act that U-Haul’s trademarks are confusing with a registered trademark, U BOX IT.

[28]           The standard of review that applies to this issue is set out in Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559, at paras. 45-47, (Servicemaster, at paragraphs 16-18). In essence, this Court is to step into the shoes of the Federal Court and determine whether the Board’s decisions are reasonable.

[29]           U-Haul submits that the Board’s confusion analysis contains many errors in its selection of subsection 6(5) factors to be considered and in its determination as to how these factors should be weighed. Some of the key alleged errors are listed below.

                         (a)               The Board did not give sufficient weight to the fact that the services of moving and storage and garbage removal are so dissimilar.

                        (b)               The Board should not have given any weight to the similarities in the manner in which the services are provided.

                         (c)               The Board erred in giving weight to unreliable evidence as to the first use of U Box It Inc.’s trademark.

                        (d)               The Board failed to give sufficient weight to minor differences in the trademarks given that they all had low inherent distinctiveness.

                         (e)               The Board erred in considering that the channels of trade was a neutral factor because it was clearly in U-Haul’s favour.

                         (f)               The Board erred in not giving due weight to U-Haul’s notoriety.

[30]           In light of the appropriate standard of review, this Court cannot intervene in the Federal Court’s decision if the Board’s overall conclusions are within a range of reasonable outcomes. In addition, the Supreme Court has instructed that significant deference should be shown to the Board in its confusion analysis: “[t]he determination of the likelihood of confusion requires an expertise that is possessed by the Board (which performs such assessments day in and day out) in greater measure than is typical of judges …”: Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, [2006] 1 S.C.R. 772, at paragraph 36.

[31]           For the reasons below, I have concluded that the Board’s decisions withstand scrutiny and that there is no basis to intervene. I acknowledge that in this case there are important factors in U-Haul’s favour. On the other hand, it was reasonable for the Board to give overriding weight to the circumstances in favour of U Box It Inc.

[32]           One of U-Haul’s main submissions was that the Board did not give sufficient weight to the fact that the services of moving and storage and garbage removal are so dissimilar. It provides the following analogy at paragraph 54 of its memorandum:

Allowing the manner in which a service is provided to be a paramount consideration in the determination of confusion between two trademarks will drastically enlarge the rights of trade-mark holders and prevent businesses with similar trademarks from providing even unrelated goods and services. The effect of upholding the findings of Mr. Justice Camp and the Registrar would be, for example, to prevent a bottled water delivery service from carrying a similar trade-name as an electrician because both rely upon a van to drive to a customer’s door to provide the service. Additionally, with many businesses providing their goods and services through the internet, one senior trade-mark holder would effectively be able to monopolize the entirety of the internet, because the manner in which the service is provided is similar.

[33]           In my view, this analogy does not hold water. Unlike the services at issue in this appeal, there is very little in common between the delivery of bottled water and an electrician’s services. In this case, the Board reasonably found that the services of U-Haul and U Box It Inc. were performed in a similar manner and that their customers might overlap because individuals who are in the process of moving or renovating may be interested in the services of both companies.

[34]           U-Haul also submits that the manner in which the services are performed should not have been the paramount consideration.  This was not the case in the Board’s decisions. In particular, the Board emphasized other factors, such as the strong resemblance in appearance, sound, and ideas between the marks. It also noted that U-Haul’s trademarks are not inherently distinctive, and were not used in Canada until a few years after the trademark belonging to U Box It Inc.

[35]           U-Haul also submits that the Board did not give sufficient weight to the small differences in the trademarks, which provide distinctiveness in circumstances where the marks are not inherently distinctive.

[36]           I disagree. The Board concluded that distinctiveness was in U-Haul’s favour, based on the distinctiveness that it acquired from significant use. However, other factors trumped this consideration. The weighing exercise undertaken by the Board was reasonable based on the facts of this case.  

[37]           U-Haul also takes issue with the Board’s conclusion as to the nature of the trade. U-Haul submits that this factor is in its favour, whereas the Board found that it was not in either party’s favour. This is explained in paragraph 46 of the Board’s decision with respect to U-BOX WE-HAUL.

[46]      In view of the connection that exists between the parties’ services and the fact that the Opponent’s registration and the application for the Mark do not contain any restrictions, there is potential for overlap in the parties’ channels of trade. However, such overlap appears to be unlikely as the evidence shows that the Applicant’s services are only made available by contacting U-HAUL by phone, via the U-HAUL website or at the U-HAUL service locations.

[38]           I agree with U-Haul that the Board’s conclusion that this factor does not favour either party is difficult to reconcile with the Board’s finding that an overlap in the channels of trade is unlikely. However, when the reasons of the Board are considered as a whole, it is clear that the “channels of trade” was not a factor that would have affected the Board’s decisions. The Board took a number of circumstances into account and weighed them reasonably in U Box It Inc.’s favour. It is the facts and circumstances that are important, rather than the formal label given to them in subsection 6(5) of the Act.  

[39]           U-Haul further submits that the Board erred in its conclusion on length of use in paragraph 6(5)(b). In particular, U-Haul suggests that there was not sufficient reliable evidence to support the Board’s finding that U Box It Inc.’s use commenced in 2006.

[40]           I disagree. The Board is entitled to significant deference in its evaluation of the evidence. The Board’s reasons amply support the conclusion that U Box It Inc.’s first use was in 2006, and there is no basis for this Court to intervene.

[41]           Essentially, in this appeal U-Haul asks this Court to re-evaluate the evidence and re-weigh the confusion factors. In my view, the decisions of the Board with respect to paragraph 12(1)(d) are reasonable, and it is not appropriate to conduct a re-weighing exercise in this case.  

[42]           As a result of this conclusion, it is not necessary to discuss paragraphs 16(1)(a) and 38(2)(d) of the Act, which are U Box It Inc.’s other grounds of opposition.

[43]           I would dismiss the appeal with costs.

“Judith Woods”

“I agree

Wyman W. Webb J.A.”

“I agree

A.F. Scott J.A.”

APPENDIX A

Trade-marks Act, R.S.C., 1985, c. T-13

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

Docket:

A-3-16

APPEAL FROM A JUDGMENT OF THE HONOURABLE MR. JUSTICE CAMP DATED DECEMBER 4, 2015, NO. T-2448-14 AND T-2449-14

STYLE OF CAUSE:	U-HAUL INTERNATIONAL INC. v. U BOX IT INC.
PLACE OF HEARING:		Ottawa, Ontario
DATE OF HEARING:		January 18, 2017
REASONS FOR JUDGMENT BY:		WOODS J.A.
CONCURRED IN BY:		WEBB J.A. SCOTT J.A.
DATED:		AUGUST 15, 2017

APPEARANCES:

Scott Miller	For The Appellant
Matthew R. Norwood	For The Respondent

SOLICITORS OF RECORD:

MBM Intellectual Property Law LLP Ottawa, Ontario	For The Appellant
Ridout & Maybee LLP Toronto, Ontario	For The Respondent