IN THE MATTER OF AN OPPOSITION by
eLoyalty Corporation to applications Nos. 862,344 and 862,346 for the trade-marks
LE GROUPE LOYALTY and LOYALTY LE GROUPE LOYALTY & Design
filed by Loyalty Management Group Canada Inc.
On November 24, 1997, the applicant, Loyalty Management Group Canada Inc., filed applications to register the trade-marks LE GROUPE LOYALTY and LOYALTY LE GROUPE LOYALTY & Design, the latter of which is shown below:
The applications are based upon use of the trade-marks in Canada since at least as early as September 21, 1997 in association with the following wares and services:
Posters,
banners, brochures, pens, t-shirts, hats.
Advertising and
promotion of wares and services of others by means
of an incentive rewards program; organization, operation and
supervision of sales and promotional incentive schemes; management
consultations; market research; database marketing services, namely
the provision of statistical analysis and consultation regarding the
use of databases in the marketing of goods and services; database
analysis; provision of business to business and consumer programs in
which credits are accumulated and redeemed for rewards; providing
merchandising programs for others, namely assisting in the preparation
of point-of-sale materials; customer relationship management;
data-driven business management; rewards management and delivery;
consulting, designing, implementing and administrating incentive award
programs for others; computerized database management; data processing
services; printing production services; marketing services, namely
providing statistical information to businesses on the purchasing
patterns of consumers and other businesses; travel agency services;
business, consumer and government research; business consulting
services; conducting business and market research surveys; Internet
support services, namely Internet information services and webpage
design; geographic information services and consulting; decision
support consulting; data warehouse development and consulting
services; data mining consulting services; scientific and technical
product development and consulting for others; distribution and
development of computer hardware and software for others; coalition
marketing.
The applications are also based upon proposed use of the trade-mark in Canada in association with the following wares and services:
Stickers,
vouchers, magazines, newspapers, periodicals; display
stands for promotional materials; promotional decals; cardboard,
books; pencils, balloons, kiosk displays; desk and office equipment,
namely, calculators, paper weights, staplers, desk pads, and holders
for pens, pencils and ink; leather wear, namely jackets, overcoats and
winter coats; jean wear, namely pants, shorts, jackets, shirts and
overalls, all made from jean material; sweaters, dress shirts,
sweatshirts, golf shirts, socks, gloves; men's, women's and infant
footwear, namely, shoes, sandals and boots; watches; CD ROMs and
videotapes containing corporate information or profiles; golf
equipment, namely, balls, tees, bags, gloves, putter covers, towels
and umbrellas; sunglasses; briefcases and luggage tags.
Printing and
electronic distribution of flyers and catalogue
services; Internet commerce services, namely online transactions for
obtaining goods and services; arranging for the manufacture of
customer durables and customer consumables to the order and
specification of others; organization, operation, consultation and
administration of fulfilment services for others, namely operation of
a telephone call centre and printing and distribution of point-of-sale
materials and advertisement mailings; providing merchandising programs
for others, namely assisting in the preparation of point-of-sale
programs.
In September 1999, the applicant disclaimed the right to the exclusive use of the word LOYALTY in respect of the services, apart from the trade-marks.
The applications were advertised for opposition purposes in the Trade-marks Journal of January 3, 2001. On June 5, 2001, eLoyalty Corporation filed statements of opposition against each of the applications. The grounds of opposition are summarized below:
1. The application does not comply with section 30 of the Trade-marks Act because the applicant has not used the trade-mark within the meaning of section 4 since at least as early as September 21, 1997 in association with the wares and services for which the applicant has claimed use.
2. The trade-mark is not registrable having regard to paragraph 12(1)(b) because “the trade-mark and specifically the word LOYALTY is clearly descriptive or deceptively misdescriptive of the character or quality of the services described in the application.”
3. The trade-mark is not registrable having regard to the provisions of section 12(1)(e) because “the trade-mark and specifically the word LOYALTY has, by ordinary and bona fide commercial usage, become recognized in Canada as designating the kind or quality of the services and is therefore prohibited under section 10.”
4. The trade-mark is not distinctive within the meaning of section 2 because the applicant’s trade-mark does not distinguish the wares and services of the applicant from the wares and services of others, is not adapted so to distinguish and is incapable of distinguishing the wares and services of the applicant from the wares and services of others.
The applicant filed and served counter statements. In addition to denying the opponent’s allegations, the applicant pleaded with respect to the distinctiveness grounds of opposition that “the opponent has not described with any particularity the basis for the allegation and hence the opponent has not pleaded a valid ground of opposition.”
The opponent filed the affidavit of Sandra Spadafora. Ms. Spadafora provides copies of what she describes as printouts from “the Internet website www.eloyalty.com and the Intranet website www.eloyaltymatters.com”, which she obtained on March 22, 2002. However, some of the pages included in her exhibit bear the address www.corporate-ir.net and there are no pages from www.eloyaltymatters.com, although there are pages from www.loyaltymatters.com.
The opponent claims, “Ms. Spadafora’s affidavit provided evidence of the common usage of the descriptive word LOYALTY for incentive programs.” However, in my view her evidence shows nothing more than that there were two websites in existence on March 22, 2002. The pages from www.eloyalty.com, which appears to be connected with the opponent, display the word LOYALTY, sometimes as part of a trade-mark or trade-name and other times in a non-proprietary sense. The pages from www.loyaltymatters.com, which appears to be connected with a U.K. company called pgw Ltd., display articles that use the word “loyalty” in various ways, e.g. loyalty card, loyalty scheme, and loyalty program. There is no evidence that the websites stem from Canada or that any Canadians, other than Ms. Spadafora, have ever viewed them.
The applicant elected to not file any evidence.
Written arguments were filed by both parties and an oral hearing was held at which both parties were represented. At the oral hearing, the opponent’s agent withdrew the first and third grounds of opposition.
Although the applicant bears the legal onus of establishing, on a balance of probabilities, that its applications comply with the requirements of the Trade-marks Act, there is an initial burden on the opponent to adduce sufficient admissible evidence from which it could reasonably be concluded that the facts alleged to support each ground of opposition exist. [see John Labatt Limited v. The Molson Companies Limited, 30 C.P.R. (3d) 293 at 298; Dion Neckwear Ltd. v. Christian Dior, S.A. et al. (2002), 20 C.P.R. (4th) 155 (F.C.A.)] It is nevertheless possible for a paragraph 12(1)(b) ground of opposition to succeed in the absence of evidence, e.g. based solely on the dictionary definition of the words in issue.
In its written arguments, the opponent submits that it has met its initial burden with respect to each of the grounds and that each ground of opposition should succeed due to the absence of evidence from the applicant. I disagree.
The material date with respect to the paragraph 12(1)(b) grounds of opposition is the date of filing of the applications, namely November 24, 1997 [see Zorti Investments Inc. v. Party City Corporation re application No. 766,534, January 12, 2004; Havana Club Holdings S.A. v. Bacardi & Company Limited re application No. 795,803, January 12, 2004; Fiesta Barbeques Limited v. General Housewares Corporation (2003), 28 C.P.R. (4th) 60 (F.C.T.D.)]. No evidence has been provided that predates November 24, 1997.
The issue as to whether the applicant’s mark is clearly descriptive must be considered from the point of view of the average purchaser of those services. Furthermore, the mark must not be dissected into its component elements and carefully analyzed but must be considered in its entirety as a matter of immediate impression [see Wool Bureau of Canada Ltd. v. Registrar of Trade Marks, 40 C.P.R. (2d) 25 at 27-8; Atlantic Promotions Inc. v. Registrar of Trade Marks, 2 C.P.R. (3d) 183 at 186]. Character means a feature, trait or characteristic of the service and “clearly” means “easy to understand, self-evident or plain” [see Drackett Co. of Canada Ltd. v. American Home Products Corp. (1968), 55 C.P.R. 29 at 34].
The opponent’s agent submitted that a trade-mark is unregistrable pursuant to paragraph 12(1)(b) if it is clearly descriptive when the words are sounded. I agree. I am aware that in Fiesta Barbeques Ltd. v. General Housewares Corp. (2003), 28 C.P.R. (4th) 60 (F.C.T.D.), Mr. Justice Russell expressed the view that a design feature may prevent a mark from being clearly descriptive as a whole, even though the mark’s word components are clearly descriptive. However, in the as yet unreported decision in Best Canadian Motor Inns Ltd. v. Best Western International, Inc., T-656-02, January 29, 2004, Mr. Justice Gibson respectfully found that Mr. Justice Russell’s comments on this point ran contrary to the principals of statutory interpretation.
Paragraph 12(1)(b) is reproduced below:
12. (1) Subject to section 13, a trade-mark is registrable if it is not
…
(b) whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin;
As stated by the Chairperson of the Opposition Board in Insurance Co. of Prince Edward Island v. Prince Edward Island Mutual Insurance Co., 2 C.P.R. (4th) 103 at page 110:
In my view, Paragraph 12(1)(b) of the Trade-marks Act may not have been intended to preclude the registration of a design trade-mark comprising design elements which could otherwise be registrable as a trade-mark apart from the descriptive wording. Certainly, it does not seem reasonable that a design trade-mark should suddenly become unregistrable by virtue of the addition of a descriptive word (or descriptive words), particularly where Section 35 of the Trade-marks Act contemplates the disclaimer of such portions of a trade-mark. On the other hand, the wording of Paragraph 12(1)(b) of the Act is clear in precluding the registration of a trade-mark which, when sounded, is inter alia clearly descriptive in the English language of the character or quality of the services in association with which it is used. In this regard, the Registrar must apply the Trade-marks Act as it currently exists and not as it ought to be drafted.
The opponent’s agent submits that the disclaimers filed by the applicant amount to an admission that the word LOYALTY is clearly descriptive of its services. However, in Fiesta Barbeques, supra, Mr. Justice Russell overturned a decision of this Board, stating at pages 68-69:
[24] As the Applicant points out, there are several errors in the Registrar's decision. To begin with, the Registrar should not have placed reliance upon the Applicant's disclaimer of the words "GRILL" and "GEAR" to support a decision under s. 12(1)(b). Section 35 of the Act reads as follows:
35. The Registrar may require an applicant for registration of a trade-mark to disclaim the right to the exclusive use apart from the trade-mark of such portion of the trade-mark as is not independently registrable, but the disclaimer does not prejudice or affect the applicant's rights then existing or thereafter arising in the disclaimed matter, nor does the disclaimer prejudice or affect the applicant's right to registration on a subsequent application if the disclaimed matter has then become distinctive of the applicant's wares or services.
[25] Clearly, this provision does not allow a "without prejudice" disclaimer to affect "the applicant's rights then existing or thereafter arising in the disclaimed matter".
For that reason, I am not prepared to treat the applicant’s disclaimers as admissions. I also note that the applicant filed the revised applications that incorporated its disclaimers during examination and therefore after the material date.
The opponent also takes the position that it is self-evident that the word LOYALTY is clearly descriptive of the applied-for services, but it is not self-evident to me. The common meaning of “loyalty”, i.e. “faithfulness” or “allegiance”, does not appear to readily describe a feature or characteristic of the applicant’s services. The opponent’s position is that “loyalty program” is a common term that refers to the rewarding of recurring customers. There is no dictionary reference to such a meaning and I certainly cannot take judicial notice of such a meaning. The opponent points to references in the websites provided by its affiant to support such meaning. Even if such evidence predated the material date, I would not find that it showed that “loyalty program” is a common term that refers to the rewarding of recurring customers or that either of the marks in issue are likely to be understood to clearly describe a characteristic of the applied for services.
The opponent has not met its initial burden to adduce evidence that would enable me to conclude that the dominant word in the trade-marks, LOYALTY, was clearly descriptive of the applicant’s services as of November 24, 1997. Therefore, it matters not whether the additional words LE GROUPE are clearly descriptive.
To sum up, the paragraph 12(1)(b) grounds of opposition are rejected due to the opponent’s failure to meet its initial burden.
The distinctiveness grounds of opposition also fail because the opponent has not satisfied its initial burden. The material date with respect to distinctiveness is the date of filing the opposition, namely June 5, 2001 [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.)]. None of Ms. Spadafora’s evidence predates June 5, 2001. In any event, the distinctiveness grounds of opposition are based on the premise that the applicant’s marks are clearly descriptive and, as already discussed, there is no basis on which I could reach such a conclusion.
Having been delegated by the Registrar of Trade-marks by virtue of subsection 63(3) of the Trade-marks Act, I reject the oppositions pursuant to subsection 38(8) of the Act.
DATED AT TORONTO, ONTARIO, THIS 28TH DAY OF MAY 2004.
Jill W. Bradbury
Member
Trade-marks Opposition Board