IN THE MATTER OF AN OPPOSITION by Info Touch Techonogies Corp. to Application No. 817,848 for the trade-mark NETLOCK & N Design in the name of HE Holdings, Inc. d/b/a Hughes Electronics
On July 12, 1996, HE Holdings, Inc. d/b/a Hughes Electronics (the “Applicant”) filed an application to register the trade-mark NETLOCK & N Design (the “Mark”), as illustrated hereafter, on the basis of proposed use in Canada. The Mark has been applied for registration in association with “computer software used to provide a secure computer network; brochures, advertising materials, namely paper printed brochures, cardboard displays, printed flyers and printed instructions manuals”. The Applicant has disclaimed the right to the exclusive use of NET apart from the Mark.
The application was advertised for opposition purposes in the Trade-marks Journal of May 5, 1999. Info Touch Technologies Corp. (the “Opponent”) filed a statement of opposition on October 5, 1999, which raises two grounds of opposition. The first ground of opposition is that the Applicant is not the person entitled to registration of the Mark pursuant to Section 16(3)(a) of the Trade-marks Act (the “Act”) in that, at the filing date of the application, the Mark was confusing with the Opponent’s trade-mark NETLOCK, which had been previously used in Canada by the Opponent’s predecessor in title, Info Touch Systems Inc., in association with computer software for security and internet management. The second ground of opposition is that the Mark is not distinctive.
The Applicant timely filed and served a counter statement. The Opponent filed evidence consisting in an affidavit of Roy Goncalves dated June 20, 2000. Although the Applicant obtained an order for the cross-examination of the affiant, it did not conduct cross-examination. The Applicant elected not to file evidence. The parties neither filed a written argument nor requested an oral hearing.
Mr. Goncalves, who is the Opponent’s Chief Programmer, states that the Opponent was incorporated in British Columbia on June 17, 1997 and it acquired all outstanding shares of Info Touch Systems Inc. (“Info Touch Systems”) on October 29, 1997. Both the Opponent and Info Touch Systems are in the business of creating, manufacturing and marketing electronic international kiosks for use by the general public. They specialize in the marketing, research and development and servicing of multimedia products.
When Info Touch Systems hired Mr. Goncalves in November 1995, the company was manufacturing and selling information kiosks that included computers running off the shelf software products. Mr. Goncalves was hired to develop a software program for use with Internet enabled kiosks that Info Touch Systems were selling to News & Brews Café, in Surrey, British Columbia. These kiosks were to be connected to the Internet and were to be used by patrons for browsing the World Wide Web. The software program, named NETLOCK, was to provide overall system management and security for the Internet enabled kiosks. Specifically, it was to limit access to the computer system by a user, provide access to pre-specified programs, and track and monitor usage, access and revenues. It took Mr. Goncalves less than two months to complete and install the NETLOCK software program at News & Brews Café (paragraph 9 of the affidavit). According to Mr. Goncalves, the trade-mark NETLOCK would appear in the upper left hand corner of the kiosk screen during use of the software program and this feature has been incorporated in all versions of the software program. He provides a print out of a screen from an Internet enabled kiosk running the current version of the NETLOCK software program (Exhibit A). I note that NETLOCK 98 does appear on the print out.
Attached as Exhibit B to the affidavit is a photocopy of an article from Business in Vancouver dated February 4 to 10, 1997 relating to the installation of the program at News & Brews Café. There is no evidence regarding the circulation of Business in Vancouver.
Mr. Gonclaves states that during the first quarter of 1996, Info Touch Systems decided to make the NETLOCK software program available to the public. In April 1996, the program was renamed NETLOCK 2.0 and “was made available to the public and Info Touch Systems' current customers”. From the later half of 1996 up to the time of the affidavit, the program was improved and renamed NETLOCK 3.0, NETLOCK 96, NETLOCK 4.0, NETLOCK 5.0 and NETLOCK 98, which is the current name of the software program.
In May 1997, Info Touch Systems allowed users to download the NETLOCK software program from its website at www.infotouch.net (paragraph 18 of the affidavit). Mr. Goncalves states that the trade-mark NETLOCK appears on the web page where the software can be downloaded and has always been on that web page. He provides a print out of the web page where the current NETLOCK software program can be downloaded (Exhibit C). Noting that “6/19/00” appears at the right bottom corner of the print out of the web page, I conclude that the web page was printed on June 19, 2000. The web page is entitled INFO TOUCH / SURFNET KIOSK SOFTWARE. Amongst the information provided on the web page is a description of the NETLOCK program as well as links for downloading the program for a first time try-out (Surfnet Netlock'98 Setup Program), for downloading the latest update of the program (Surfnet Netlock'98 Latest Update) and for downloading the “SurfnetNetlock’98 Manual” or for viewing a PDF file for “the latest Netlock Manual dated April 12, 1999”. A copy of the current users manual that comes with the NETLOCK software program (Exhibit D) is provided by Mr. Goncalves. I note that it is entitled Surfnet/Netlock '98 Users Manual with the Opponent’s name displayed at the bottom of the cover page. Since the mentions “© 1999 Info Touch technologies Corp” and “Last edited: February 22, 1999” both appear in the footer of the cover page, I conclude that the users manual has been available since at least as early as February 22, 1999. There is no material evidence with respect to the users manual that would have been available prior to that date. Even if it seems reasonable to infer that a users manual could be downloaded from the website starting in May 1997, I cannot conclude that the manual provided as Exhibit D is patterned after the version that would have been available in May 1997.
Mr. Goncalves states that for the year ending July 31, 2000, the Opponent has sold approximately 600 copies of the NETLOCK software, which has generated approximately $180,000 in sales. I should note that Mr. Goncalves executed his affidavit on June 20, 2000, which raises a doubt as to the accuracy of his reference to July 31, 2000 as the year ending date. He could have meant to refer to a fiscal year ending July 2000, in which case the figures provided would cover only an eleven-month period. He could have meant to provide the overall figures since the first installation of the software at News & Brews Café, in which case there is no yearly breakdown. The Applicant elected to forgo cross-examination, which could have clarified this issue. Therefore, regardless of the ambiguity as to the applicable period, I have no reasons to question the reliability of Mr. Goncalves’ written testimony as to the number of copies sold and revenues generated by these sales.
Finally, Mr. Goncalves identifies 42 Canadian cities where the Opponent has sold and/or installed the NETLOCK software, these cities being located in the provinces of Ontario (21), Quebec (5), Alberta (2), Manitoba (1), British Columbia (8), Nova Scotia (2), Saskatchewan (2) and Newfoundland (1). I may reasonably infer that this information would apply at the date of the affidavit.
In view of Mr. Goncalves’ statement at paragraph 4 of his affidavit, I conclude that the NETLOCK software would have been first installed at News & Brews Café in January 1996 or February 1996. Even if I accept his testimony that the trade-mark NETLOCK would have then appeared on the screen during use of the program, such display does not necessarily fulfill the requirement that the trade-mark was associated with the wares at the time of transfer of the property in or possession of the wares as required by Section 4(1) of the Act [see Unisys Corp. v. Northwood Technologies Inc. (2002), 29 C.P.R. (4th) 115 (T.M.O.B.)]. All I can conclude is that the patrons of News & Brews Café using the Internet enabled kiosks would have seen the trade-mark displayed on the screen. There is no evidence of record from which I could conclude that when the program was first installed at News & Brews Café, the trade-mark NETLOCK would have been seen by the representatives of News & Brews Café prior to and after the sale of the program so that the required notice of association would then have been given. However, I am satisfied that the display of the trade-mark at the time the program is downloaded from the Opponent’s website amounts to use in association with the wares in the manner required by Section 4(1) of the Act. In so concluding, I have regard to the following comments of Mr. Justice Teitelbaum in BMB Compuscience Canada Ltd. v. Bramalea Ltd. (1988), 22 C.P.R. (3d) 561 (F.C.T.D.):
What we are dealing with is software which forms a part of a computer system. It is not the type of object, such as a pair of socks, to which one can simply attach a label and which label is clearly visible. Although this could have been done, it is not to say that one could not "attach" the label onto the program and which "label" would only appear when the program is called upon by the user of the computer.” (p. 569)
In addition, the notice of association that is given at the time the customers download the software is continued by displaying the trade-mark on the users manual which would come to the attention of the customers after having downloaded the software [see Dominion Automotive Group, Inc. v. Firebolt Engine Installation Centres Inc. (1998), 86 C.P.R. (3d) 403 (T.M.S.H.O.].
As the Opponent’s program has been renamed over the years, it necessarily raises the issue of whether the use of the word “netlock” followed by a numeral, which is currently 98, amounts to use of the trade-mark NETLOCK. I should first note that the numeral is only a minor element of the trade-mark. Furthermore, numerals possess very little inherent distinctiveness. In any event, the test for determining if it constitutes use of the trade-mark NETLOCK is a question of fact based on the public's first impression [see Nightingale Interloc Ltd. v. Prodesign Ltd. (1984), 2 C.P.R. (3d) 535 (T.M.O.B.)]. In Smart & Biggar v. Oy Ladden Poltimo AB (2004) 35 C.P.R. (4th) 348, the Trade-marks Senior Hearing Officer found that the use of the trade-mark MALTAX in combination sometimes with the numeral "1500" and other times with the expression "200 F" constituted use of the trade-mark MALTAX "per se". The Senior Hearing Officer was of the view that the additional matter would probably be perceived as representing different formulations or different versions of the registrant's MALTAX malt extract. Similarly, in the present case, I am of the view that the numeral would be perceived as representing a new version of the Opponent’s software program and therefore it does not detract from the public's perception of the "per se" use of NETLOCK as a trade-mark.
Regarding the first ground of opposition, which is based upon Section 16(3)(a), I must first consider whether the Opponent has met its initial burden to prove use of the trade-mark NETLOCK prior to the filing date of the application [July 12, 1996] and non-abandonment of the trade-mark at the date of advertisement of the application [May 5, 1999].
As I have previously indicated, the display of the trade-mark on the screen by itself does not necessarily fulfill the requirement of Section 4(1) of the Act. While I am willing to accept Mr. Goncalves’ testimony that the trade-mark NETLOCK has always been on the web page where the software can be downloaded, which I have found amounts to use within the meaning of Section 4(1), the evidence of record only allows me to conclude that the software can be downloaded from a website since May 1997. In this regard, I note that although Mr. Goncalves declares that the software program “was made available to the public and Info Touch Systems' current customers” in April 1996, he does not indicate how this was done before May 1997. Furthermore, there is no evidence with respect to the date when Info Touch Systems started operating its website.
In view of the evidence of record, I find that the earliest date at which the Opponent has shown use of the trade-mark by its predecessor-in-title, within the meaning of Section 4(1) of the Act, is May 1997. Accordingly, I find that the Opponent has not met its initial burden to show use of the trade-mark NETLOCK at the filing date of the application and, therefore, I dismiss the first ground of opposition. I would like to add that had the Opponent evidenced use of the trade-mark NETLOCK within the meaning of Section 4(1) of the Act prior to July 12, 1996, I would have found that the Opponent had discharged its initial evidentiary burden as I am satisfied that the Opponent was using the trade-mark at the date of advertisement of the application.
Turning now to the second ground of opposition, I note that it has been pleaded as follows:
“The opponent further relies on Section 38(2)(d) and says that the trade-mark applied for is not distinctive, in particular, it does not actually distinguish nor is it adapted to distinguish the services of the applicant from the services of the opponent.” (my emphasis)
The Applicant did not challenge the pleading on the ground that it refers to services whereas the Mark has been applied for registration in association with wares nor did the Applicant challenge the pleading on the ground that it is merely referring to the services of the opponent. Furthermore, the Applicant in its counter statement has asserted that the Mark “is distinctive and at all material times has been distinctive and is capable of distinguishing the applicant’s wares from those wares and services of others, including those of the opponent”. I note that where the pleadings have not been challenged, the Federal Court of Appeal directed us in Novopharm Ltd. v. AstraZeneca AB et al. (2002), 21 C.P.R. (4th) 289 to consider the evidence in conjunction with the pleadings when assessing the case that the Applicant has to meet. I find it difficult to conclude that the Applicant could not understand that the second ground of opposition was implicitly based on the Mark not being distinctive of the Applicant’s wares because it is confusing with the Opponent’s trade-mark. I am therefore prepared to consider the reference to services as a technical deficiency as I find it does not prejudice the Applicant.
The material date with respect to this ground of opposition has been generally accepted as the date of filing of the statement of opposition [see Metro-Goldwyn-Mayer Inc. v. Stargate Connections Inc. (2004), 34 C.P.R. (4th) 317 (F.C.T.D.)]. There is an initial evidential burden on the Opponent to establish the facts relied upon in support of this ground of opposition. Once this burden is met, the legal onus is on the Applicant to show that the Mark is adapted to distinguish or actually distinguishes its wares 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.)].
The test for confusion is one of first impression and imperfect recollection. In applying the test for confusion set forth in Section 6(2), the Registrar must have regard to all the surrounding circumstances, including those specifically enumerated in Section 6(5). Each of these factors does not necessarily have equal weight as the significance of one may far outweigh that of the others [see Classic Door & Millwork Ltd. v. Oakwood Lumber & Millwork Co. (1995), 63 C.P.R. (3d) 337 (F.C.T.D.)]
I find that neither trade-mark possesses a high degree of inherent distinctiveness. The Oxford Canadian Dictionary defines the term “Net” (also “net”) as an informal noun for the Internet. Further, amongst the definitions attaching to the noun “net” is that of a network of interconnected computers. The term “lock” is a common ordinary word to designate a fastening device that can only be opened by means of a key, combination, code, etc. Therefore, it may reasonably be concluded that one would react to the word NETLOCK by thinking that the software involve a security feature for Internet access or for a computer network. I do not consider that the design feature of the Mark enhanced significantly its distinctiveness. Since the Applicant did not file any evidence whereas the Opponent has provided evidence of use, I must conclude that an overall consideration of the inherent distinctiveness of the trade-marks and the extent to which they have become known favours the Opponent as does the length of time the trade-marks have been in use. Both trade-marks are associated with computer software having a security feature and I have no reasons to believe that the advertising materials specifically identified in the application as printed brochures, cardboard displays, printed flyers and printed instructions would not relate to the software associated with the Mark. I also have no reasons to assume that the channels of trade would not overlap. Finally, the degree of resemblance between the trade-marks in appearance, sound, and the ideas suggested all favour the Opponent.
After consideration of all the surrounding circumstances, I find on a balance of probabilities that at the filing date of the statement of opposition, there was a reasonable likelihood of confusion between the Mark and the Opponent’s trade-mark. The Opponent’s evidence has clearly demonstrated that its trade-mark NETLOCK has become known sufficiently to negate the distinctiveness of the Mark. Since there is no evidence with respect to the use of the Mark, I find that the Applicant has failed to meet its legal onus. I therefore accept the ground of opposition based upon non-distinctiveness.
Having regard to the foregoing, and with the authority delegated to me under Section 63(3) of the Act, I refuse the application pursuant to Section 38(8) of the Act.
DATED AT BOUCHERVILLE, QUEBEC, THIS 28th DAY OF JULY 2005.
Céline Tremblay
Member
Trade-marks Opposition Board