IN THE MATTER OF OPPOSITIONS BY
Midway Industries Ltd. to applications Nos.
708,013; 708,014 and 708,015 for the trade-marks
FOUR GROMMETS & Design, THREE GROMMETS
& Design and SIX GROMMETS & Design respectively
filed by Tilley Endurables Inc.
On July 9, 1992, the applicant, Tilley Endurables Inc., filed applications to register three trade-marks for “hats” based on use of the marks in Canada since January of 1988. The first trade-mark (application No. 708,013) is described as follows:
The trade-mark is shown in the attached drawing. The representation of the hat in dotted outline does not form part of the trade mark. The trade mark consists of four grommets and their relative size and placement in relation to the applicant's wares as shown in the above drawing.
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The second trade-mark (application No. 708,014) is described as follows:
The trade-mark is shown in the attached drawing. The representation of the hat in dotted outline does not form part of the trade mark. The trade mark consists of two grommets and one closed snap fastener, with the brim snapped up, and their relative size and placement in relation to the applicant's wares.
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The third trade-mark (application No. 708,015) is described as follows:
The trade-mark is shown in the attached drawing. The representation of the hat in dotted outline does not form part of the trade mark. The trade mark consists of four grommets and two open halves of a snap fastener, and their relative size and placement in relation to the applicant's wares.
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All three applications were advertised for opposition purposes on July 7, 1993.
The opponent, Midway Industries Ltd., filed a statement of opposition against each of the three applications on August 24, 1993. Copies of each statement were forwarded to the applicant on December 9, 1993.
All three statements of opposition are very similar, the one filed against application No. 708,013 being representative. The grounds of opposition in that case read as follows:
Section 38(2)(a):
The Opponent alleges that application serial No. 708,013 does not comply with the provisions of Section 30 of the Act in that during January 1988, the date that the Applicant supposedly first used its pretended trade mark in Canada in association with hats, the Applicant knew or should have known that it was not entitled to secure registration of the trade mark which is the subject of the said application because it knew or should have known that its said pretended trade mark was confusing with the grommets used in Canada by the Opponent and others for many years prior to January 1988, which grommets of the Opponent and others, both as to size and placement, had been widely used and made known in Canada long before January 1988.
Section 38(2)(a):
The Opponent alleges that application serial No. 708,013 does not comply with the provisions of Section 30 of the Act in that during January 1988, the date that the Applicant supposedly first used its pretended trade mark in Canada in association with the wares specified in the said application, the Applicant knew or should have known that it was not entitled to secure registration of its pretended trade mark which is the subject of its said application because it knew or should have known that the said pretended trade mark was not a trade mark and as such the Applicant was not entitled to pretend that the pretended mark was a trade-mark or that it was satisfied that it was entitled to claim to use it as a trade-mark in Canada in association with hats.
Section 38(2)(a):
The Opponent alleges that application serial No. 708,013 does not comply with the provisions of Section 30 of the Act in that on July 9, 1988 the date on which application serial No. 708,013 was filed, the applicant knew or should have known that it was not entitled to secure registration of its pretended trade mark which is the subject of its said application because it knew or should have known that its said pretended trade mark was confusing with or was likely to be confusing with the grommets, both as to size and placement, of the Opponent and others previously used in Canada in association with the same general class of wares as those specified in application serial No. 708,013.
Section 38(2)(a):
The Opponent further alleges that the mark that is the subject of Application number 708,013 is not a trade mark as defined in Section 2 of the Act. The said mark cannot be used for the purpose of distinguishing or so as to distinguish the wares of the Applicant from the wares of the Opponent.
Section 38(2)(b):
The Opponent further alleges that the pretended mark that is the subject of Application No. 708,013 is not registrable in that the pretended mark consists of utilitarian features.
Section 38(2)(b):
The Opponent further alleges that the pretended mark that is the subject of Application No. 708,013 is not registrable in that the registration of the pretended mark is likely to limit the development of the hat industry in Canada, which industry has been using the same, or practically the same, grommets, including their size and placement, for many years prior to January 1988.
Section 38(2)(c):
The Opponent further alleges that the Applicant is not the person entitled to registration of the mark that is the subject of Application number 708,013 because said mark is confusing with and is likely to be confusing with the grommets of the Opponent and of others which for many years have been used and continue to be used in Canada.
Section 38(2)(d):
The Opponent further alleges that the pretended mark that is the subject of Application number 708,013 is not distinctive. The said mark neither distinguishes nor is it adapted to distinguish the wares specified in Application No. 708,013 in association with which it is allegedly used from the wares provided in Canada by the Opponent and others for many years and the said pretended mark is in the public domain and was in the public domain prior to January 1988.
Paragraph four of the statement of opposition reads as follows:
The Opponent alleges that the use by it and others of grommets, and the size and placement of such grommets, on hats has been so extensive in Canada prior to 1988, that the consuming public is used to consider the design that is the subject of Application No. 708,013 as being indicative solely of a type of hat and surely not as an indication of a hat emanating from any particular source or any one trader and surely not as emanating from the Applicant.
The statements of opposition respecting the other two applications are essentially identical to the first statement except that, where appropriate, references to grommets are replaced by references to grommets and snap fasteners in the second opposition and to grommets and open halves of snap fasteners in the third opposition.
The applicant filed and served a counter statement in each case. As its evidence in each case, the opponent submitted the affidavits of Robert Lanning and Christine Lothian. In each case, the applicant submitted an affidavit of its President, Alex Tilley, the three Tilley affidavits being very similar to one another in content. Mr. Tilley was cross-examined on all three of his affidavits and the transcript of that cross-examination and the replies to undertakings given form part of the record of these proceedings.
As evidence in reply in each case, the opponent submitted an affidavit of its President, Gary Bromberg. Mr. Bromberg was cross-examined on his affidavit and the transcript of that cross-examination and the replies to undertakings given form part of the record of these proceedings. Both parties filed a written argument and an oral hearing was conducted at which both parties were represented.
The Applicant’s Evidence
In his affidavit, Mr. Tilley states that in 1980 he designed his own hat for sailing and other recreational pursuits. That hat is shown in the drawing accompanying application No. 708,103 and has been designated by Mr. Tilley and the applicant as the T1 Tilley Hat. It has two grommets on each side of the hat near the crown and two eyelets on the brim to accommodate an adjustable security cord.
The applicant was incorporated in 1981 and carried on the business started by Mr. Tilley. In 1982, a T3 model Tilley hat was introduced with eyelets on the band of the hat and a snap on either side of the hat. The drawing accompanying application No. 708,015 shows such a hat with the snap undone and the drawing for application No. 708,014 shows such a hat with the snap done up. Sometime prior to 1988, the design of the T1 hat was changed to move the eyelets on either side of the hat from the brim to the band.
Sales of the various Tilley hats have been significant, totalling in excess of $20 million for the period 1980 to 1994. Total sales of all of the applicant’s products for that period were in excess of $80 million. Advertising expenditures by the applicant for its various clothing products (including its hats) were in excess of $9 million for the period 1982 to 1994. As of the date of Mr. Tilley’s affidavit (September 18, 1995), the applicant’s products were sold in Canada through its five retail outlets and by more than 250 independent retailers.
On cross-examination, Mr. Tilley was questioned as to the size, placement and purpose of the grommets, eyelets and snaps used on the T1 and T3 Tilley hats. At page 20 of the transcript, Mr. Tilley states that the grommets are bigger than the eyelets to provide better air flow and to maintain a nautical flavor for the hats. At pages 21 and 25, he states that the grommets are used for ventilation purposes. At page 24, he states that at one point they raised the grommets nearer the crown of the hat to prevent blocking the passage of air.
At pages 13-14 of the transcript, Mr. Tilley states that the security cord on the Tilley hats passes through the two pairs of eyelets which were originally on the brim of the T1 hat but are now on the band of both the T1 and T3 hats. At page 21, Mr. Tilley indicates that the size of the eyelets is important since they must be large enough to accommodate the width of the adjustable security cord but small enough to ensure that there will be sufficient tension on the cord to keep it in place.
At page 42 of the transcript, Mr. Tilley states that the purpose of the snaps which are used on the T3 hat are to hold one or both sides of the hat brim up. He indicates that this is done for reasons of style or to prevent the front of the brim coming up in the wind.
At page 46 of the transcript, Mr. Tilley agrees that his company’s hats are a variation of the Aussie or Australian slouch hat. At page 52, he admits that when people tell him that the Tilley hats are great hats, they don’t say that they recognize it by the placement of the grommets. At page 53, he admits that the applicant has not conducted any market surveys to establish the reputation of its hats.
The Opponent’s Evidence
In her affidavit, Ms. Lothian identifies herself as the Import Director of the opponent and states that the opponent is an importer and distributor of such items as hats, caps, shirts, scarves and accessories. The opponent has used foreign suppliers including two businesses based in China. Ms. Lothian states that those two Chinese businesses were suppliers of the opponent prior to 1988 and she has appended pre-1988 catalogues from these two suppliers which include a number of hats with grommets and snaps, a few being of a similar design to the applicant’s hats. According to Ms. Lothian, the opponent and others have been selling similar hats in Canada for many years prior to 1988. In her affidavit, Ms. Lothian also states that Australian bush hats with snaps and grommets have been sold in Canada since at least 1983. Exhibit E to the Lothian affidavit is one of the opponent’s bush hats which is very similar in styling to the opponent’s T3 hat and includes two grommets on either side near the crown, two eyelets on either side on the band and the two halves of a snap on either side.
In his affidavit, Mr. Lanning states that he was associated with his family business, G.T. Lanning Ltd., for many years. According to Mr. Lanning, G.T. Lanning Ltd. sold hats like the applicant’s T1 and T3 models for at least five or six years prior to January of 1988. Appended as Exhibit B to Mr. Lanning’s affidavit is a 1989 catalogue of G.T. Lanning Ltd. which includes two hats similar to the applicant’s hats. Further exhibits establish that G.T. Lanning Ltd. ordered substantial numbers of such hats from a Chinese supplier in 1987 and 1988. In paragraph seven of his affidavit, Mr. Lanning states that in late 1987 or early 1988, G.T. Lanning Ltd. offered to sell hats of that type to the applicant but the applicant would not commit for a large enough quantity.
In his affidavit, Mr. Bromberg states that his company was incorporated on November 20, 1950 and has been selling and distributing various types of hats in Canada since that time. According to Mr. Bromberg, hats with adjustable cords going through eyelets have been sold as far back as the 1950's. He further states that Aussie hats with snaps have been sold since the 1960's. Exhibit 4 to his affidavit shows hats with grommets on display at a 1955 toy fair. According to Mr. Bromberg, hats with grommets equidistant from the midseam have been sold since 1960. In paragraph 13 of his affidavit, Mr. Bromberg states that for as long as he has been associated with the opponent, grommets have been used on hats to allow ventilation, eyelets have been used on hats to allow for adjustable cords and snaps have been used on hats to allow one or more portions of the brim to be fastened to the crown.
The Grounds of Opposition
As a preliminary matter, the opponent has asserted that the trade-mark which is the subject of application No. 708,013 has not been used since January of 1988 as claimed. In this regard, the opponent has relied on Mr. Tilley’s admission that the design of the T1 hat changed sometime prior to 1988 to move the eyelets from the brim of the hat to the band. The opponent contends that such a change constituted a change in the applied for mark and that the applicant has failed to show continuous use of the mark as applied for since January of 1988. While there may be some merit in the opponent’s argument, it does not assist the opponent’s case since there is no ground of opposition based on non-conformance with Section 30(b) of the Trade-marks Act.
At the oral hearing, the opponent’s agent also contended that all three applications do not conform to the requirements of Section 30(a) of the Act because the trade-marks claimed by the applicant only apply to specific Tilley hats and not to hats in general. However, no such ground appears in any of the three statements of opposition.
The first ground of opposition in each case appears to be based on non-conformance with Section 30(i) of the Act. However, the opponent has asserted that the applicant could not have been satisfied that it was entitled to register the applied for mark whereas Section 30(i) only requires the applicant to state that it was satisfied that it was entitled to use the applied for mark. Furthermore, the opponent has asserted that the applied for mark was confusing with the grommets (or grommets, snaps and/or eyelets) used by the opponent and others. However, the opponent has failed to identify any previously used trade-marks. Thus, the first ground in each case does not raise a proper ground of opposition and is unsuccessful. Similar comments also apply to the third ground of opposition.
The fifth ground in each case states that the applied for trade-mark is not registrable because it consists of utilitarian features. However, as noted by the applicant, Section 12 of the Act provides no such basis for a ground of non-registrability. Thus, the fifth ground is also unsuccessful.
The sixth ground in each case is that the applied for trade-mark is not registrable because its registration is likely to limit the development of the hat industry in Canada. Again, there is no provision in Section 12 of the Act to support such a ground. The sixth ground is therefore also unsuccessful.
As for the seventh ground in each case, the opponent is precluded from relying on the prior use of confusing trade-marks by others in view of the provisions of Section 17(1) of the Act. As for the balance of that ground, the opponent is not relying on its prior use of trade-marks but rather on its use of functional or design elements in the hats it has sold in Canada as confirmed by its own evidence. Thus, the seventh ground is not a proper ground of opposition and is unsuccessful.
The second and fourth grounds of opposition in each case appear to be based on the preamble to Section 30 of the Act. In other words, the opponent is apparently asserting that the applicant’s application does not conform to the provisions of Section 30 because it is not an application for a trade-mark. While the legal burden is on the applicant to show that its application conforms to the requirements of Section 30, there is an initial evidential burden on the opponent to establish the facts relied on by it in support of its Section 30 grounds: see Joseph E. Seagram & Sons Ltd. v. Seagram Real Estate Ltd. (1984), 3 C.P.R. (3d) 325 at 329-330 (T.M.O.B.) and John Labatt Ltd. v. Molson Companies Ltd. (1990), 30 C.P.R.(3d) 293 (F.C.T.D.). That burden can be met by reference to the applicant’s own evidence. The material time for considering the circumstances respecting the issues of non-conformance with Section 30 of the Act is the filing date of the application: see the opposition decision in Georgia-Pacific Corp. v. Scott Paper Ltd. (1984), 3 C.P.R.(3d) 469 at 475.
The evidence of record suggests that each of the applicant’s applied for marks is not a trade-mark as defined in Section 2 of the Act. The opponent’s evidence establishes that, prior to the applicant’s filing date, it had been common in the hat industry to use grommets, eyelets and snaps on hats. There is even some evidence of use of configurations of these elements on hats similar to those appearing on the applicant’s T1 and T3 hats prior to the applicant’s filing date.
The Bromberg affidavit evidences the functional nature of grommets, eyelets and snaps on hats. The descriptions of the trade-marks themselves appearing in the applications underscore the functional nature of the elements by linking their relative size and three-dimensional placement to a specific type of hat manufactured by the applicant. On cross-examination, Mr. Tilley conceded the functional nature of all of these elements on both models of his company’s hats. To the extent these elements serve any other purpose, it appears to be ornamental.
In view of the above, I find that the opponent has met the evidential burden on it respecting its second and fourth grounds of opposition. The applicant’s marks appear to be primarily functional and do not appear to have any existence separate and apart from their placement on the applicant’s hats. As stated by MacGuigan, J.A. at page 475 of the decision in Remington Rand Corp. v. Philips Electronics N.V. (1995), 64 C.P.R.(3d) 467 (F.C.A.):
If functionality goes either to the trade mark itself (imperial Tobacco, and Parke, Davis) or to the wares (Elgin Handles), then it is essentially or primarily inconsistent with registration. However, if it is merely secondary or peripheral, like a telephone number with no essential connection with the wares, then it does not act as a bar to registration.
In view of the above, it was incumbent on the applicant to meet its evidential burden by showing that its applied for marks are not primarily functional or ornamental but that they do, in fact, function primarily as trade-marks. The applicant has failed to meet that burden. Although the applicant has evidenced significant sales of its hats over the years, sales alone do not establish that all elements of a product function as trade-marks. The applicant has, as well, engaged in significant advertising activities but none of those activities specifically educated the public as to the claimed trade-mark status of the three applied for marks. In fact, the applicant has failed to provide any evidence which would point to consumer recognition of the various grommet, eyelet and/or snap configurations functioning as trade-marks. The applicant has done no market surveys and even Mr. Tilley admitted on cross-examination that when people tell him that his company’s hats are great, they don’t recognize the hat by the placement of the grommets (see pages 52-53 of the Tilley transcript). Thus, the second and fourth grounds of opposition are successful.
As for the eighth ground of opposition in each case, the onus or legal burden is on the applicant to show that its 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.). Furthermore, the material time for considering the circumstances respecting this issue is as of the filing of the opposition (i.e. - August 24, 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.).
My findings respecting the second and fourth grounds are also applicable to the eighth ground. The evidence shows that grommets, eyelets and snaps are common functional elements of various types of hats. As conceded by Mr. Tilley on cross-examination, the grommets, eyelets and snaps on his company’s hats are primarily functional in nature. He further conceded that consumers who are aware of his company’s hats don’t recognize them by the placement of those elements on the hats.
As discussed, there is some evidence that hats similar to those of the applicant’s were sold in Canada by others prior to the applicant’s claimed date of first use. The evidence of such sales is stronger as of the filing of the opposition. Mr. Lanning’s former company placed significant orders for such hats in the late 1980's and Exhibit E to the Lothian affidavit is a sample of one such hat which the opponent sells. This evidence underscores the commonality and functionality of the elements of the applicant’s claimed trade-marks and points to third party uses of such elements in the same or similar configurations as used by the applicant.
In view of the above, I find that the opponent has met its onus to show that the applicant’s marks are not adapted to distinguish and do not in fact distinguish the applicant’s hats from those of others. The legal burden is on the applicant to show otherwise and the applicant has failed to file evidence to meet that burden. As conceded by Mr. Tilley, consumers don’t recognize Tilley hats by the relative placement of the hardware on the hats. Furthermore, the applicant has not conducted any market surveys to determine how consumers react to the grommets, eyelets and/or snaps on its hats. In fact, the applicant has not submitted even one affidavit from a consumer stating that he or she recognizes the applicant’s applied for marks as trade-marks. Thus, the eighth ground of opposition 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 applications.
DATED AT HULL, QUEBEC, THIS 28th DAY OF MAY, 1999.
David J. Martin,
Member,
Trade Marks Opposition Board.