Date: 20021015
Docket: A-418-01
A-419-01
Neutral citation: 2002 FCA 387
CORAM: LINDEN J.A.
BETWEEN:
NOVOPHARM LIMITED
Appellant
(Applicant)
- and -
ASTRAZENECA AB and
THE REGISTRAR OF TRADE-MARKS
Respondents
(Respondents)
Heard at Toronto, Ontario, on Monday, September 9, 2002.
Judgment delivered at Ottawa, Ontario, on October 15, 2002.
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: LINDEN J.A.
MALONE J.A.
Date: 20021015
Docket: A-418-01
A-419-01
Neutral citation: 2002 FCA 387
CORAM: LINDEN J.A.
BETWEEN:
NOVOPHARM LIMITED
Appellant
(Applicant)
- and -
ASTRAZENECA AB and
THE REGISTRAR OF TRADE-MARKS
Respondents
(Respondents)
REASONS FOR JUDGMENT
ROTHSTEIN J.A.
FACTS
[1] This is an appeal from a decision of the Trial Division. The proceeding in the Trial Division was an appeal under section 56 of the Trade-marks Act R.S.C. 1985, c. T-10, from two decisions of the Registrar of Trade Marks. The Registrar's two decisions rejected Novopharm's Statements of Opposition to Astrazeneca AB's (Astra) applications to register two trade marks in relation to tablets containing "felodipine," a pharmaceutical preparation for use in the treatment of hypertension. One was in relation to tablets that are pink, round and biconvex in shape (5 mg) and the other in relation to tablets that are red-brown in colour, round and biconvex in shape (10 mg). The Trial Judge dismissed the appeals and upheld the decisions of the Registrar.
[2] The Registrar's primary basis for rejecting the Novopharm oppositions was that Novopharm's Statements of Opposition were insufficiently detailed to enable Astra to respond to Novopharm's assertions that Astra's trade marks were not distinctive. A secondary basis for rejecting the oppositions was that there was no quantitative and insufficient qualitative evidence of sales and use of any pharmaceutical tablets which have a colour and shape combination resembling the marks applied for by Astra.
[3] On appeal to the Trial Division, the learned Trial Judge was of the opinion that she was to review the Registrar's decisions on a standard of reasonableness simpliciter. She found that the Registrar was not clearly wrong in rejecting the Novopharm oppositions on the basis that the oppositions were insufficiently detailed to enable Astra to know the case it had to meet and to respond to it. As the requirement for detailed pleadings was statutory, the Trial Judge found that she could not say that the Registrar was unreasonable for requiring compliance with the statute. Because that conclusion was dispositive of the appeal, the Trial Judge did not go on to consider the Registrar's secondary, insufficient evidence, basis for rejecting the oppositions.
ISSUES
[4] The issues in the appeal are:
1. Did the Trial Judge err in confirming the decisions of the Registrar to reject Novopharm's oppositions on the primary ground that the Statements of Opposition were insufficiently detailed?
2. If the Trial Judge was in error in confirming the Registrar's decisions on the primary ground, did she also err in not reviewing, and not overturning, the Registrar's secondary, insufficient evidence, basis for rejecting Novopharm's oppositions?
3. If the Trial Judge was in error in upholding the Registrar's decisions, how should the merits be dealt with?
ANALYSIS
Issue 1
Procedural Error
[5] Novopharm argues that when the Registrar considered the adequacy of its Statements of Opposition, he erred by considering the Statements of Opposition without regard to the evidence that was filed. In support of this position, Novopharm relies on the decision of this Court in Novopharm Limited v. Ciba-Geigy Canada Limited; Novopharm Limited v. Astra Aktiebolag, [2002] 2 F.C. 148.
[6] Novopharm, supra, which I find to be dispositive of the procedural issues in this appeal, was decided after both the decisions of the Registrar and the Trial Judge in this case.
[7] From paragraphs 38 to 43 of Novopharm, supra, I deduce the following principles in respect of the adequacy of pleadings:
1. A Statement of Opposition must be in conformity with paragraph 38(3)(a) of the Act. In particular, the grounds of opposition must be set out in sufficient detail to enable the trade mark applicant to reply to it. Paragraph 38(3)(a) provides:
| 38(3) A statement of opposition shall set out (a) the grounds of opposition in sufficient detail to enable the applicant to reply thereto; [...] |
38(3) La déclaration d'opposition indique_: a) les motifs de l'opposition, avec détails suffisants pour permettre au requérant d'y répondre; [...] |
2. The sufficiency of pleadings should be determined on an interlocutory basis. If sufficiency is determined at an interlocutory stage, only the pleadings need be considered in making the determination.
3. In determining the sufficiency of a Statement of Opposition after evidence is filed, regard must be had to the evidence, as well as the Statement of Opposition, to see if the applicant has been provided with sufficient detail to make an adequate reply.
[8] As the Court implied in Novopharm, supra, once evidence is filed, it is too late to go back and assess the pleadings as if the evidence was not filed. The time to assess the adequacy of the pleadings in isolation has past. Once evidence is filed, the Registrar must take the evidence into consideration when deciding whether the parties know the case they have to meet and whether they are able to respond. The filed evidence may cure whatever inadequacy may be in the pleadings.
[9] The Respondent says there is no provision in the Canadian Trade-mark Regulations (1996) SOR/96-195 to have the adequacy of pleadings determined in interlocutory proceedings. It is true there is no express regulation that provides for interlocutory motions to strike pleadings for failure to comply with a requirement such as paragraph 38(3)(a). However, nothing in the Regulations precludes interlocutory motions. Moreover, section 40 of the Regulations provides for amendments to Statements of Opposition or Counter Statements with leave of the Registrar. Section 40 provides:
| 40. No amendment to a statement of opposition or counter statement shall be allowed except with leave of the Registrar and on such terms as the Registrar determines to be appropriate. |
40. La modification d'une déclaration d'opposition ou d'une contre-déclaration n'est admise qu'avec la permission du registraire aux conditions qu'il estime indiquées. |
Even though there is no express provision in the Regulation, section 40 necessarily implies that an applicant or opponent may make an interlocutory motion to amend its own pleadings. I think it must also follow that the applicant or opponent may make an interlocutory motion to strike all or any portion of the other party's pleadings. As determined in Novopharm, supra, the appropriate time to challenge pleadings is at an interlocutory stage before evidence is filed.
[10] If the adequacy of the pleadings is challenged after evidence is filed, then the Registrar should not consider the pleadings without regard to the evidence. At this stage, the Registrar should be considering whether the parties know the case they have to meet and whether they can respond to it on the basis of the evidence, as well as the pleadings. If the Registrar finds, without regard to the evidence filed, that the parties do not know the case they have to meet and cannot respond to it, he makes a discretionary decision without regard to a relevant consideration - namely, the evidence filed.
[11] As indicated in Molson Breweries v. John Labatt Ltd., [2000] 3 F.C. 145 at paragraph 51, a decision of the Registrar is entitled to deference when it is made within his field of expertise, unless evidence is filed on appeal in the Trial Division that would have materially affected his decision. In that case, the standard of review is correctness. I would add that, where deference is to be accorded to the Registrar, it is subject to the provisos that his decision is not unreasonable, is supported by the evidence, is not vitiated by the failure to consider relevant factors and is subject to appropriate procedures. Compare Suresh v. Canada, 2002 SCC 1; [2002] S.C.J. No. 3 at para. 41, where patent unreasonableness was the standard of review.
[12] This is a case in which the Registrar failed to consider the evidence in assessing whether the applicant knew the case it had to meet and was able to respond to it. This constituted a failure to consider a relevant factor and, therefore, a failure to apply the correct legal test for determining the adequacy of the pleadings. Had the learned Trial Judge had the benefit of Novapharm, supra when rendering her decision, she would have found that the Registrar's failure to consider the evidence constituted a reviewable error. Having come to that conclusion, the Trial Judge would then, initially, have had regard to the evidence before the Registrar. In addition, even if she was of the opinion that the evidence filed before the Registrar was, itself, insufficient, because new evidence was filed on appeal, she would have taken that new evidence into consideration.
[13] I proceed to conduct that analysis now.
The Decision of the Registrar
[14] In respect of distinctiveness, the Novopharm Statements of Opposition, with regard to Astra's red-brown trademark application, provided:
The opponent bases its opposition on the grounds provided by s. 38(2)(d) in that the trade-mark is not distinctive in that it does not distinguish, nor is adapted to distinguish the wares of the applicant from those of others. Red-brown tablets were and are at all material times common to the trade and had been used by others so that the wares of the applicant cannot be distinguished from others, inter alia, the tablets of
Apotex Inc.
Boehringer Ingelheim (Canada) Ltd.
Merrell Dow Pharmaceuticals (Canada) Inc.
[15] In its written argument, Astra stated:
Of the three companies referred to, there is no indication of any specific pharmaceutical products relied on [i.e. which red-brown tablets] the active ingredients therein, the shape thereof, or of any circumstances relevant to when, where or in what quantity such red-brown tablets were used.
[16] The Registrar's reasons state:
[...] I must agree with the applicant. In my view, the applicant should not be faced with the burden of investigating what products are sold by third parties in an attempt to discover which red-brown tablets the opponent may possibly be referring to.
[17] In the case of Astra's pink trade-mark application, Novopharm's Statement of Opposition is almost identical to its red-brown Statement, except that it lists 26 pharmaceutical producers. Astra's written argument is almost identical to its argument in the red-brown case. The Registrar's reasons read almost the same as in the red-brown case:
[...] I must agree with the applicant. In my view, the applicant should not be faced with the burden of investigating what products are sold by the opponent, and by third parties, in an attempt to discover which pink tablets the opponent may possibly be referring to.
The Evidence before the Registrar
[18] In the pink case, Novopharm's affiants swore that there were pink tablets on the market in 1992 and provided excerpts from the Compendium of Pharmaceutical Specialties (CPS). These excerpts included pictures which indicated the colour and shape of the tablets, the name of tablets and the manufacturer of the tablets. Included in the CPS pictures of the pink pills, there were pills made by the manufacturers listed in the Statement of Opposition.
[19] In the red-brown case, the Novopharm affiants swore that there were many red-brown pills on the market. The affidavits attached pages from the CPS containing photographs of red-brown pills that included those made by manufacturers listed in the Statement of Opposition.
[20] Astra's affiant, Wilton, stated in his affidavit:
Each of the pharmaceutical products described in the CPS includes, among other things, the brand name or trade-mark for the product, the name of the manufacturer of the product and the generic or chemical name for the active ingredient, together with a description of the physical appearance of the product.
[21] Novopharm's affiants were cross-examined by Astra about material in the CPS and products available in the market-place. Astra's affiant admitted in cross-examination that he was aware of specific pink and red-brown tablets in the market-place.
[22] Had the Registrar taken into account this evidence, he could not have found that Astra was burdened with investigating what products Novopharm may have been referring to in its Statements of Opposition. The products and details respecting them were included in the CPS. Whatever deficiencies there may have been in Novopharm's Statements of Opposition were cured by the evidence filed. Astra was fully able to know and respond to the products that Novopharm was relying upon to demonstrate lack of distinctiveness in Astra's proposed trade-marks.
[23] It is not necessary to go further. Had the Registrar taken account of the evidence before him, he should not have rejected Novopharm's oppositions on the ground that the Statements of Opposition were not sufficiently detailed to enable Astra to respond. On appeal, the Trial Judge should have reached the same conclusion. Because the evidence filed with the Registrar cured any such insufficiency in the pleadings, it was not necessary for the Trial Judge to consider the evidence filed in the Trial Division on this issue.
Issue 2
[24] I proceed now to deal with the Registrar's secondary basis for rejecting the Novopharm oppositions, that there was no qualitative and insufficient quantitative evidence of sales or use of any pharmaceutical tablets which have a colour and shape combination resembling the applied-for marks.
[25] The Novopharm evidence before the Registrar was that other pink and red-brown pills were in the Canadian market-place. The evidence in the Trial Division was more specific. Qualitative evidence about the names, manufacturers and uses of products were provided. In addition, quantitative evidence of the number of prescriptions dispensed by the pharmacist and the annual sales of specific pink and red-brown products were provided. Because the Trial Division evidence would have affected the decisions of the Registrar, it was necessary for the Trial Judge to take it into account and conduct the review of the Registrar's secondary basis for rejecting Novopharm's oppositions on a correctness standard. Whatever deficiency there may have been in the evidence before the Registrar was cured by the evidence filed in the Trial Division.
[26] The Trial Judge was in error in not going on to consider the secondary basis for rejection. She should have taken into account the evidence filed in the Trial Division and concluded that the evidence filed in the Trial Division cured any deficiency in evidence before the Registrar.
Issue 3
[27] The question then is whether this Court should give the judgment that the Trial Judge should have given, or remit the matter to the Trial Division for an initial determination on the merits. While the Appeal Division has jurisdiction to give the judgment the Trial Division should have given, it is normally preferable to remit a matter involving the assessment of evidence for determination on the merits to the Trial Division. This is especially the case where the merits have not yet been considered by either the Registrar or the Trial Division.
CONCLUSION
[28] I would, therefore, allow the appeal with costs, quash the decisions of the Registrar and the Trial Division, and remit the matter to the Trial Division for determination of the merits. The Trial Judge should decide whether to give the parties the opportunity to file additional evidence and/or argument or proceed to determine the merits on the material already filed.
"Marshall Rothstein"
J.A.
"I agree
A.M. Linden J.A."
"I agree
B. Malone J.A."
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-418-01 and A-419-01
STYLE OF CAUSE: NOVOPHARM LIMITED
Appellant
(Applicant)
- and -
ASTRAZENECA AB and
THE REGISTRAR OF
TRADE MARKS
Respondents
(Respondents)
DATE OF HEARING: MONDAY, SEPTEMBER 9, 2002
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: LINDEN J.A.
MALONE J.A.
DATED: OCTOBER 15, 2002
APPEARANCES BY: Ms. Carol Hitchmam
Ms. Paula Bremner
For the Appellant (Applicant)
Mr. Gunars A. Gaikis
For the Respondents (Respondents)
SOLICITORS OF RECORD:Hitchman & Sprigings
Toronto, Ontario
For the Appellant (Applicant)
Smart & Biggar
Toronto, Ontario
For the Respondents (Respondents)
FEDERAL COURT OF APPEAL
Date: 20021015
Docket: A-418-01
A-419-01
BETWEEN:
NOVOPHARM LIMITED
Appellant
(Applicant)
- and -
ASTRAZENECA AB and
THE REGISTRAR OF
TRADE MARKS
Respondents
(Respondents)
REASONS FOR JUDGMENT