IN THE MATTER OF AN OPPOSITION
by Great Pacific Industries Inc. to applica-
tion No. 601,799 for the trade-mark
PERMANENT DISCOUNT & Design
filed by Westfair Foods Ltd.
On February 26, 1988, the applicant, Westfair Foods Ltd., filed an application to register the trade-mark PERMANENT DISCOUNT & Design (shown below) based on use in Canada since January 18, 1985 with the following services:
the operation of retail outlets for the sale of food and general merchandise, namely health and beauty aids including shampoo, conditioner and styling gel, clothing, housewares, medicine, books, magazines, hardware, soap, detergent, toys, greeting cards, gift wrap, sporting goods, dry goods and automotive supplies.
The application was amended to include a disclaimer to the words PERMANENT DISCOUNT and was subsequently advertised for opposition purposes on March 3, 1993.
The opponent, Great Pacific Industries Inc., filed a statement of opposition on April 30, 1993, a copy of which was forwarded to the applicant on July 21, 1993. The first ground of opposition is that the applicant’s trade-mark is not distinctive because (1) the applicant has only displayed it in conjunction with the name of its business, (2) it clearly describes an ongoing marketing policy of selling goods at a discount and (3) it is common in the trade to use rectangular borders to focus attention on the enclosed words.
The second ground of opposition is that the applied for trade-mark is not registrable pursuant to Section 12(1)(b) of the Trade-marks Act because it is clearly descriptive of the character or quality of the applied for services. The third ground reads as follows:
Having regard to subparagraph (a) hereof, the applicant in not a person entitled to registration of the trade-mark. The alleged trade-mark is not a trade-mark that the applicant has used in association with services as defined in the application either since the date of first use alleged in the application or at all. It is merely a device used to describe a marketing policy of its business.
The applicant filed and served a counter statement on August 18, 1993. The applicant denied the opponent’s grounds of opposition and supporting allegations of fact. Furthermore, the applicant stated that the opponent did not provide sufficient detail in its third ground of opposition to allow the applicant to reply to it.
As its evidence, the opponent filed an affidavit of Sheila K. McCabe. As its evidence, the applicant filed the affidavits of Serge Khalid Darkazanli, Marian Burrows and Kathryn Anne Marshall. Only the applicant filed a written argument and no oral hearing was conducted.
As for the third ground of opposition, I agree with the applicant’s contention that it does not comply with the provisions of Section 38(3)(a) of the Act in that the opponent did not provide sufficient details to enable the applicant to reply to the ground. On the one hand, it appears that the opponent is seeking to assert a ground of prior entitlement pursuant to Section 16 of the Act yet it has not relied on any prior use, prior making known or prior filing by itself. On the other hand, it may be that the opponent is seeking to assert that the applicant has not used its mark as a trade-mark, an allegation that would more properly have been raised as a ground of non-compliance with Section 30(b) of the Act.
In any event, the opponent was put on notice as to the deficiency in its third ground and chose not to clarify the matter or seek leave to amend its statement of opposition pursuant to Rule 40 of the Trade-marks Regulations. Thus, the third ground is unsuccessful. If the third ground can be interpreted as an allegation that the applicant has not used its applied for mark as a trade-mark, then it would be unsuccessful anyway in view of the evidence of use of that mark appearing in the exhibits to the Darkazanli affidavit.
As for the opponent’s second ground of opposition, the material time for considering the circumstances respecting the issue arising pursuant to Section 12(1)(b) of the Act is the date of my decision: see the decision in Lubrication Engineers, Inc. v. The Canadian Council of Professional Engineers (1992), 41 C.P.R.(3d) 243 (F.C.A.). Furthermore, the issue is to be determined from the point of view of an everyday user of the services. Finally, the trade-mark in question must not be carefully analyzed and dissected into its component parts but rather must be considered in its entirety and as a matter of first impression: see Wool Bureau of Canada Ltd. v. Registrar of Trade Marks (1978), 40 C.P.R.(2d) 25 at 27-28 and Atlantic Promotions Inc. v. Registrar of Trade Marks (1984), 2 C.P.R.(3d) 183 at 186.
Initially, it should be noted that the applicant has disclaimed the words PERMANENT DISCOUNT which is an admission that those words are either clearly descriptive or non-distinctive in relation to the applied for services. In its written argument (at page ten), the applicant has mischaracterized the disclaimer as being a disclaimer of the individual words PERMANENT and DISCOUNT rather than the phrase PERMANENT DISCOUNT. However, the Examiner’s report of March 6, 1992 called for a disclaimer of the phrase PERMANENT DISCOUNT and that was what was provided in the amended application accompanying the applicant’s letter of July 24, 1992 and what appeared in the March 3, 1993 advertisement of the mark in the Trade-marks Journal.
Also of note are the examples of the applicant’s advertisements appended to the McCabe affidavit which illustrate descriptive uses of the words PERMANENT DISCOUNT. Exhibit A refers to “Our Permanent Discount Price Policy.” Exhibit B includes a representation of the applied for trade-mark appearing above and below the following text:
Our complete in-store selection of today’s most popular patterns are discounted permanently at 50% off the “suggested book price”. [emphasis added]
Several of the exhibits comprise ads which include a box with the heading PERMANENT DISCOUNT appearing above the following text:
....is a Superstore policy reflecting our ongoing endeavor to continuously adjust prices to deliver overall, better value than the majority of our major competitors. While not every item or product may provide a savings or discount over the price at all of our major competitors, we continuously make price adjustments in an effort to best or meet the majority of our major competitors based on ongoing store price checks and constant monitoring of their advertised specials. Our prices and our competitor’s prices may change thereby affecting any discount available on a particular item. This policy does not mean that our prices or any discount is permanently fixed, but that we are permanently committed to a policy of overall discounted prices.
Two additional exhibits to the McCabe affidavit comprise copies of the reasons for judgment of the British Columbia Supreme Court and the Court of Appeal in Westfair Foods Ltd. v. Jim Pattison Industries Ltd. (1990), 30 C.P.R.(3d) 174 (B.C.C.A.); affg. (1989), 26 C.P.R.(3d) 28 (B.C.S.C.). In that case, the applicant commenced an action for passing off based on its applied for mark and sought an interlocutory injunction to restrain the defendant’s use of a trade-mark incorporating the words PERMANENT DISCOUNT. At page 38 of the reported decision of the British Columbia Supreme Court, Mr. Justice Gibbs states as follows:
When the common law tests are applied it is clear that the plaintiff cannot maintain a right to the sole use of the constituent parts of its mark, with the possible and doubtful exception of the stylized S, which the defendant has not adopted. As to the words “permanent” and “discount”, each is a descriptive word in common use in everyday speech, and each is also found frequently employed as part of the name of any number of commercial enterprises. It has been, and still is, a long-standing principle of the common law that no person can appropriate to himself (or herself) the sole right to descriptive words. The plaintiff cannot therefore be heard to assert the exclusive right to the use of those words.
The Court of Appeal concurred and Mr. Justice Wallace states as follows at page 180 of the reported reasons:
I agree that the use of the words “permanent discount” by themselves require a further explanation for the customer to appreciate exactly how the policy affects the price of the goods which he may purchase. However, in my view, the words clearly describe an ongoing marketing policy of selling goods at a discount.
In my view, the foregoing more than satisfies the opponent’s evidential burden respecting its second ground. It was therefore incumbent on the applicant to satisfy its legal burden to show that its mark is registrable. In my view, the applicant’s evidence does not satisfy that burden.
The Burrows and Marshall affidavits evidence a number of registrations and advertised applications for trade-marks which include independent disclaimers of each of the word portions of the mark - i.e. - what is sometimes called a double disclaimer. Such disclaimers arguably are a recognition by an applicant or a registrant that the individual words or phrases in his mark are not independently registrable but that the combination is. While that concept is interesting, it is irrelevant to the issue at hand. As previously noted, the present applicant has disclaimed the entire phrase PERMANENT DISCOUNT rather than each word independently. Furthermore, in my view, it would not be appropriate to allow a double disclaimer in the present case since the word PERMANENT is virtually meaningless when used in association with the applied for services apart from its use in conjunction with the word DISCOUNT.
The Darkazanli affidavit also does not advance the applicant’s case. Although Mr. Darkazanli does evidence that the applicant has used the applied for mark as a trade-mark, that fact alone does not remove it from the prohibition in Section 12(1)(b) of the Act. The Darkazanli affidavit also evidences that the applicant has made fairly extensive use of its mark in advertisements, flyers and store signage and displays. However, the applicant has not claimed the benefit of Section 12(2) of the Act in an attempt to overcome the Section 12(1)(b) prohibition. Even if it had, the evidence of use provided by Mr. Darkazanli is, in my view, far from adequate to meet the heavy onus imposed on an applicant by Section 12(2) of the Act: see Molson Companies Ltd. v. Carling Breweries Ltd. (1988), 19 C.P.R.(3d) 129 at 130 (F.C.A.). Even if it were, the evidence of use appears to be restricted to portions of western Canada and thus any registration to issue from this application would have to be territorially restricted pursuant to Section 32(2) of the Act.
The applicant has further submitted that even if the words PERMANENT DISCOUNT are clearly descriptive, its applied for mark is still registrable in view of the design components. I disagree. As for the stylized S appearing in the mark, it is an integral component of the word DISCOUNT and therefore does not avoid the prohibition in Section 12(1)(b) of the Act: see John Labatt Ltd. v. Registrar of Trade Marks (1984), 79 C.P.R.(2d) 110 at 120 (F.C.T.D.). As for the border surrounding the words PERMANENT DISCOUNT, Exhibit J to the McCabe affidavit shows that such devices are very common in the food industry and are therefore not distinctive. Furthermore, I have considered the following finding of Mr. Justice Gibbs at page 39 of his decision in the Westfair Foods case:
The same rule of “non-exclusivity” applies to the rectangular shape of each of the marks at issue here. It would be untenable to suggest that merely enclosing words in a rectangular border conferred upon the party doing so the right to prevent anyone else from doing so forever.
Even if the applicant were correct in its assertion that the design components of its mark circumvent Section 12(1))(b), I would still find that the applicant’s mark is clearly descriptive of the character or quality of the applied for services since Section 12(1)(b) prohibits registration if the mark is clearly descriptive when sounded: see Arthur v. Auto Mart Magazine Ltd. (1995), 66 C.P.R.(3d) 117 (T.M.O.B.). In the present case, the only way to sound the applicant’s mark is by sounding the clearly descriptive words PERMANENT DISCOUNT.
In view of the above, I find that the applicant has failed to meet its onus or evidential burden to show that its trade-mark PERMANENT DISCOUNT & Design is registrable. Consequently, the second ground of opposition is successful.
As for the first ground of opposition, the onus or legal burden is on the applicant to show that its mark is adapted to distinguish or actually distinguishes its services from those of others throughout Canada: see Muffin Houses Incorporated v. The Muffin House Bakery Ltd. (1985), 4 C.P.R.(3d) 272 (T.M.O.B.). Furthermore, the material time for considering the circumstances respecting this issue is as of the filing of the opposition (i.e. - April 30, 1993): see Re Andres Wines Ltd. and E. & J. Gallo Winery (1975), 25 C.P.R.(2d) 126 at 130 (F.C.A.) and Park Avenue Furniture Corporation v. Wickes/Simmons Bedding Ltd. (1991), 37 C.P.R.(3d) 412 at 424 (F.C.A.).
As for the first aspect of the first ground, the fact that the applicant has displayed its trade-mark in conjunction with the name of its business does not necessarily render the mark non-distinctive. As for the second and third aspects of the first ground, in view of my finding respecting the second ground of opposition, it follows that the applicant’s trade-mark PERMANENT DISCOUNT & Design is not distinctive because it is clearly descriptive of the character or quality of the applicant’s services in the English language. Thus, the first ground is also successful.
In view of the above, and pursuant to the authority delegated to me under Section 63(3) of the Act, I refuse the applicant’s application.
DATED AT HULL, QUEBEC, THIS 20th DAY OF JUNE, 1997.
David J. Martin,
Member,
Trade Marks Opposition Board.