Citation: 2018 TMOB 28

Date of Decision: 2018-03-05

IN THE MATTER OF A SECTION 45 PROCEEDING

	Deeth Williams Wall LLP	Requesting Party
and
	PPG Architectural Coatings Canada, Inc. / PPG Revêtements architecturaux Canada, inc.	Registered Owner
	TMA718,628 for SMART PAINT	Registration

Introduction

[1]  At the request of Deeth Williams Wall LLP (the Requesting Party), the Registrar of Trade-marks issued a notice under section 45 of the Trade-marks Act, RSC 1985, c T-13 (the Act) on October 21, 2015 to PPG Architectural Coatings Canada, Inc. / PPG Revêtements architecturaux Canada, inc. (the Owner), the registered owner of registration No. TMA718,628 for the trade-mark SMART PAINT (the Mark). 

[2]  The Mark is registered for use in association with “Insulating interior acrylic paints”.

[3]  Section 45 of the Act requires the registered owner of the trade-mark to show whether the trade-mark has been used in Canada in association with each of the goods specified in the registration at any time within the three-year period immediately preceding the date of the notice and, if not, the date when it was last in use and the reason for the absence of such use since that date. In this case, the relevant period for showing use is October 21, 2012 to October 21, 2015.

[4]  The relevant definition of use for goods is set out in section 4 of the Act as follows:

4(1) A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed or it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred.

[5]  It is well established that mere assertions of use are not sufficient to demonstrate use in the context of section 45 proceedings [Plough (Canada) Ltd v Aerosol Fillers Inc (1980), 53 CPR (2d) 62 (FCA)]. Although the threshold for establishing use in these proceedings is low [Woods Canada Ltd v Lang Michener (1996), 71 CPR (3d) 477 (FCTD)], and evidentiary overkill is not required [Union Electric Supply Co Ltd v Registrar of Trade Marks (1982), 63 CPR (2d) 56 (FCTD)], sufficient facts must still be provided to permit the Registrar to arrive at a conclusion of use of the trade-mark in association with each of the goods specified in the registration during the relevant period [John Labatt Ltd v Rainier Brewing Co (1984), 80 CPR (2d) 228 (FCA)]. 

[6]   In response to the Registrar’s notice, the Owner furnished the affidavit of Alison Goldman, sworn on May 18, 2016 in Vaughan, Ontario. Both parties filed written representations, but only the Requesting Party was represented at a hearing held on February 14, 2018.

The Owner’s Evidence

[7]  In her affidavit, Ms. Goldman identifies herself as a Brand Manager of the Owner.  She provides a corporate history of the Owner, explaining that the Owner is a subsidiary of PPG Industries, Inc., a global supplier of paints and other products.  She states that, in April 2013, PPG Industries acquired the North American business of AkzoNobel, N.V.  This transaction resulted in the Owner acquiring, among other trade-marks, the registration for SMART (TMA731,527) and the registration for the subject Mark. 

[8]  Ms. Goldman asserts that, since its acquisition of the Mark in 2013, the Owner has used the Mark in association with the registered goods, namely, insulating interior acrylic paints.  In particular, Ms. Goldman attests that the Owner has used the Mark as a sub-brand for its CIL paint products line.  In support, she provides images of CIL paint cans within her affidavit and, at Exhibit B, a sampling of representative labels for such paint cans.  A variation of the Mark appears on the labels, as depicted below:

[9]  Although the reproduction is of poor quality, I note that a superscript “3” appears next to the word “smart” below the CIL logo. 

[10]  In this respect, at paragraph 16 of her affidavit, Ms. Goldman attests as follows:

Given the very dominant impression the element SMART creates when considering the overall appearance of the SMART PAINT Mark on the label, the use or appearance of the additional superscript element “3” and the absence of the word PAINT – considering that the mark appears on cans of paint – has not had a significant visual impact on the overall appearance of the SMART PAINT Mark, nor has this additional element altered the unique character or visual impact of the SMART PAINT Mark to a degree that [the Owner’s] consumers or prospective consumers (who refer to [the Owner’s] product as “SMART PAINT”) would believe that the mark appearing on the label is a different trademark from the SMART PAINT Mark as registered … or that the source for goods bearing the SMART PAINT Mark as shown is any different from the source for goods bearing the SMART PAINT Mark (as registered).

[11]  Ms. Goldman attests that revenues generated from sales of such products bearing the “smart³” trade-mark exceeded CDN$25.7 million since the Owner acquired the Mark in 2013.

[12]  At Exhibit C to her affidavit, Ms. Goldman attaches a sampling of invoices from the relevant period, showing sales of various products from the Owner to Home Depot stores in Canada.  Highlighted on these invoices are sales of the relevant goods, such as “IC SMART3 PINKWH CEIL” and “IC SMART3 ANYWHERE PRIMER”.

[13]  Ms. Goldman also attests to the advertising and promotional efforts of the Owner, attaching to her affidavit excerpts from various Home Depot flyers from the relevant period (Exhibit D) and excerpts from the Owner’s website, www.cil.ca (Exhibit E). Both the flyers and the website pages advertise various CIL “smart³” paint products.  I note that, in addition to featuring images of the paint cans available for purchase, the text of the website otherwise identifies them as “CIL SMART3” products.

[14]  The Mark as registered does not appear in any of the exhibits.

Analysis

[15]  As the Owner has demonstrated transfers of the registered goods in association with the “smart³” trade-mark in Canada during the relevant period, the determinative issue in this case is whether the display of “smart³” on the Owner’s products constitutes display of the Mark as registered.

[16]  Notwithstanding the assertions made by Ms. Goldman at paragraph 16 of her affidavit, reproduced above, the test for deviation, as articulated by the Federal Court of Appeal, is as follows:

The practical test to be applied in order to resolve a case of this nature is to compare the trade mark as it is registered with the trade mark as it is used and determine whether the differences between these two marks are so unimportant that an unaware purchaser would be likely to infer that both, in spite of their differences, identify goods having the same origin. [Canada (Registrar of Trade-marks) v Compagnie Internationale pour l’informatique CII Honeywell Bull (1985), 4 CPR (3d) 523 (FCA) at 525]

[17]  As the Court of Appeal noted, the question “... must be answered in the negative unless the mark was used in such a way that the mark did not lose its identity and remained recognizable in spite of the differences between the form in which it was registered and the form in which it was used.” [at 525]

[18]  In deciding this issue, one must look to see if the “dominant features” of the trade-mark have been preserved [Promafil Canada Ltée v Munsingwear Inc (1992), 44 CPR (3d) 59 (FCA)]. The assessment as to which elements are the dominant features and whether the deviation is minor enough to permit a finding of use of the trade-mark as registered is a question of fact to be determined on a case-by-case basis.

[19]  In this case, in addition to Ms. Goldman’s statements above, the Owner notes that the descriptive word PAINT is disclaimed from the registered Mark.  The Owner emphasizes that the superscript “3” is barely visible and “much smaller” relative to the other elements appearing on the paint can labels, in particular, the “smart” element.

[20]  The Requesting Party refutes Ms. Goldman’s statements regarding how consumers refer to the Owner’s products as “SMART PAINT”, noting that the Owner’s own exhibits nowhere refer to the Mark as registered.  Indeed, the Requesting Party notes that the Owner’s own invoices and website advertisements identify the goods as “SMART3” products, suggesting that the “3” is an important element in relation to the registered goods.

[21]  In its evidence and written representations, the Owner attempts to downplay the significance of the superscript “3” in the trade-mark as used.  Again, however, the Mark as registered, “SMART PAINT”, does not appear anywhere in the exhibited evidence, nor does the word SMART appear anywhere by itself.  As noted above, the goods sold are identified as “SMART3” products on the Owner’s website and in its invoices to customers, thus emphasizing the importance of the “3” in the trade-mark used. 

[22]  Even if I accept that the dominant feature of the Mark as registered is the word “SMART” alone, I agree with the Requesting Party that the dominant feature of the trade-mark as used is the word SMART in combination with the superscript “3”.   This superscript is not descriptive and, in my view, would not be viewed as a separate trade-mark.  Rather, it is closely connected to the word SMART, indicating that the Owner’s paint products have, perhaps, an exponential level of “SMART”-ness. As such, as a matter of first impression, a member of the public would not perceive the Mark per se as being used.

[23]  As the evidence does not show use of the Mark as registered, I am not satisfied that the Owner has demonstrated use of the Mark in association with the registered goods within the meaning of sections 4 and 45 of the Act.

Special Circumstances

[24]  In the absence of evidence of use of the Mark as registered, the issue is whether, pursuant to section 45(3) of the Act, special circumstances existed to excuse such non‑use.

[25]  The general rule is that absence of use should result in expungement, but there may be an exception where the absence of use is due to special circumstances [Scott Paper Ltd v Smart & Biggar, 2008 FCA 129, 65 CPR (4th) 303].

[26]  To determine whether special circumstances have been demonstrated, the Registrar must first determine why the trade-mark was not used during the relevant period. Second, the Registrar must determine whether those reasons for non-use constitute special circumstances [Registrar of Trade Marks v Harris Knitting Mills Ltd (1985), 4 CPR (3d) 488 (FCA)]. Special circumstances means circumstances or reasons that are unusual, uncommon, or exceptional [John Labatt Ltd v Cotton Club Bottling Co (1976), 25 CPR (2d) 115 (FCTD)].

[27]  If the Registrar determines that the reasons for non-use constitute special circumstances, the Registrar must still decide whether such circumstances excuse the period of non-use. This determination involves the consideration of three criteria: (i) the length of time during which the trade-mark has not been in use; (ii) whether the reasons for non-use were beyond the control of the registered owner; and (iii) whether there exists a serious intention to shortly resume use [per Harris Knitting Mills, supra].

[28]  The intention to shortly resume use must be substantiated by “a sufficient factual basis” [NTD Apparel Inc v Ryan, 2003 FCT 780, 27 CPR (4th) 73 at paragraph 26; see also Arrowhead Spring Water Ltd v Arrowhead Water Corp (1993), 47 CPR (3d) 217 (FCTD)].

[29]  All three criteria are relevant, but satisfying the second criterion is essential for a finding of special circumstances excusing non-use [per Scott Paper, supra].

[30]  In its written representations, the Owner submits that, in view of the Owner’s acquisition of the Mark in 2013, “it is reasonable to assume that a new owner would need some time to make arrangements concerning the use of a newly acquired trademark”.  It submits that, in view of the “recent acquisition … and the efforts required generally to re-launch a product line following an acquisition, the non-use of [the Mark] would appear to be beyond the control of [the Owner].”  With respect to the third criterion, the Owner submits that “such an intention can be inferred from the activities of [the Owner], in particular its extensive and ongoing use of a substantially similar mark, in association with the Registered Goods.”

[31]  In this case, notwithstanding the change in ownership of the registration in 2013, the reason for non-use of the Mark as registered appears to be a deliberate decision of the Owner.  The Owner’s assertion that non-use of the Mark was beyond its control due to the efforts it would take to re-launch a product line is inconsistent with the evidence before me.  In this respect, Ms. Goldman attests to significant sales and advertising of the CIL “smart³” paint product line, but makes no reference to any efforts on the part of the Owner to commence use of the Mark as registered.  Thus, contrary to the Owner’s representations, the reason for non-use of the Mark as registered appears to simply be the Owner’s voluntary decision to use the “smart³” trade-mark instead of SMART PAINT. Such voluntary decisions are not the sort of “unusual” circumstances that would constitute special circumstances.

[32]  I note the following observation from the Federal Court in Plough, supra, at paragraph 10:

There is no room for a dog in the manger attitude on the part of registered owners who may wish to hold on to a registration notwithstanding that the trade mark is no longer in use at all or not in use with respect to some of the wares in respect of which the mark is registered.

[33]  As the reason for non-use appears to be the voluntary business decision of the Owner, I do not find that the Owner has established that the reasons for non-use constitute special circumstances. As such, it is not necessary to consider whether such circumstances excuse the period of non-use. Suffice to say, a voluntary business decision to use a modified version of the Mark is not beyond the Owner’s control.  Furthermore, as noted above, there is no evidence before me of a serious intent to commence or re-commence use of the Mark as registered.

[34]  As such, I am not satisfied that the Owner has demonstrated special circumstances excusing non-use of the Mark.

Disposition

[35]  In view of all of the foregoing, pursuant to the authority delegated to me under section 63(3) of the Act and in compliance with the provisions of section 45 of the Act, the registration will be expunged.

Andrew Bene

Member

Trade-marks Opposition Board

Canadian Intellectual Property Office

TRADE-MARKS OPPOSITION BOARD

CANADIAN INTELLECTUAL PROPERTY OFFICE

APPEARANCES AND AGENTS OF RECORD

___________________________________________________

HEARING DATE: 2018-02-14

APPEARANCES

No one appearing	For the Registered Owner
David Bowden	For the Requesting Party

AGENTS OF RECORD

Borden Ladner Gervais LLP	For the Registered Owner
Deeth Williams Wall LLP	For the Requesting Party