Havana House Cigar & Tobacco Merchants Ltd. et al. v. Skyway Cigar Store, (1998) 147 F.T.R. 54 (TD)

• Judge: Teitelbaum, J.
• Court: Federal Court (Canada)
• Case Date: May 19, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 147 F.T.R. 54 (TD)

Havana House Cigar v. Skyway Cigar (1998), 147 F.T.R. 54 (TD)

MLB headnote and full text

Temp. Cite: [1998] F.T.R. TBEd. JN.021

Havana House Cigar & Tobacco Merchants Ltd., Empresa Cubana Del Tabaco trading as Cubatabaco and Habanos S.A. (plaintiffs) v. Skyway Cigar Store (defendant)

(T-2144-96)

Indexed As: Havana House Cigar & Tobacco Merchants Ltd. et al. v. Skyway Cigar Store

Federal Court of Canada

Trial Division

Teitelbaum, J.

May 19, 1998.

Summary:

Havana House, the exclusive Canadian distributor for Cuban state-owned tobacco manufacturers, registered four trademarks in association with cigars. Havana House sought a declaration that Skyway, an Ontario tobacco retailer, passed off its wares as those of Havana House or infringed Havana House's trademarks by selling counterfeit or unauthorized cigars. Skyway sought to expunge the registration of Havana House's trademarks. Both parties applied for summary judgment.

The Federal Court of Canada, Trial Division, granted summary judgment to Skyway and expunged Havana House's four registered trademarks. The court dismissed Havana House's summary judgment application where the evidence was insufficient to find that there was no triable issue.

Trademarks, Names and Designs - Topic 707

Trademarks - Registration - General - Conditions precedent - Requirement of use - Havana House was the exclusive Canadian distributor for Cuban state-owned tobacco manufacturers - Havana House registered four trademarks in association with cigars - The registered trademarks were marks bearing the brand names of the cigars - The cigars were manufactured and sold in Cuba bearing these marks and also exported to Canada - The Federal Court of Canada, Trial Division, expunged the trademarks - Havana House could not be said to have "used" the trademarks within the meaning of s. 4 of the Trade-marks Act and was therefore not entitled to register them - The trademarks did not convey to the consumer that the distributor was the owner of the trademarks, but rather clearly indicated that the source of the marks was the manufacturer - See paragraphs 44 to 60.

Trademarks, Names and Designs - Topic 885

Trademarks - Registration - Expungement of mark - Who may apply for expungement - The defendant in an action for trademark infringement and passing off sought to expunge the registration of the plaintiff's trademarks - Section 57 of the Trade-marks Act provided that a "person interested" could apply to expunge the registration of a trademark - The Federal Court of Canada, Trial Division, held that the defendant was a "person interested" under s. 57 - A person charged with infringement or with passing off his goods as those of another person was a person interested - See paragraph 42.

Trademarks, Names and Designs - Topic 889

Trademarks - Registration - Expungement of mark - Grounds - Lack of use - [See Trademarks, Names and Designs - Topic 707 ].

Trademarks, Names and Designs - Topic 889.1

Trademarks - Registration - Expungement of mark - Grounds - Loss of distinctiveness (incl. non-distinctiveness) - Havana House, the exclusive Canadian distributor for Cuban state-owned tobacco manufacturers, registered four trademarks in association with cigars - The registered trademarks were marks bearing the brand names of the cigars - The only mark on the cigar boxes and in Havana House's advertising stated that it was the exclusive distributor of Cuban cigars - The Federal Court of Canada, Trial Division, expunged the trademarks - Use by Havana House constituted use by the foreign manufacturers - The trademarks were therefore distinctive of the manufacturers' cigars rather than of Havana House - Havana House failed to provide that it acquired distinctiveness in the trademarks such that it was entitled to use them - See paragraphs 62 to 68.

Trademarks, Names and Designs - Topic 889.2

Trademarks - Registration - Expungement of mark - Grounds - Prior use - Havana House was the exclusive Canadian distributor for Cuban state-owned tobacco manufacturers - It registered four trademarks in association with cigars - Skyway, a Canadian tobacco retailer, sought to expunge the trademarks, asserting that other parties had used the trademarks in Canada before Havana House - The Federal Court of Canada, Trial Division, rejected the assertion - Pursuant to s. 17 of the Trade-marks Act, the only party that could attack a registration on the ground of prior use was the actual previous user or predecessor in title - As a retailer, Skyway had not sued the trademarks within the meaning of s. 4 and could not challenge the registration based on prior use - See paragraph 61.

Trademarks, Names and Designs - Topic 1808

Trademarks - Infringement - Use - Depreciation of goodwill - Havana House, the exclusive Canadian distributor for state-owned Cuban tobacco manufacturers, registered four trademarks in association with cigar products - Skyway, a Canadian tobacco retailer, purchased cigars from Cuban outlets - Havana House et al. sued Skyway, for trademark infringement and sought summary judgment - Havana House asserted that Skyway sold counterfeit or unauthorized cigars and that Skyway's lack of quality control violated Havana House's rights under ss. 19, 20 and 22 of the Trade-marks Act - In particular, Havana House suffered a depreciation of goodwill as a result of Skyway's lack of quality control - The Federal Court of Canada, Trial Division, declined to grant summary judgment - The evidence was insufficient to establish that there was no triable issue - At best, there was speculation that a consumer would not buy further cigars if the consumer had received lower quality cigars - See paragraphs 69 to 80.

Trademarks, Names and Designs - Topic 3068

Trademarks - Unfair competition - Passing off - Havana House, the exclusive Canadian distributor for Cuban state-owned Cuban tobacco manufacturers, registered trademarks in association with cigars - Skyway, a Canadian retailer, purchased cigars from Cuban outlets - Havana House sued Skyway for passing off and sought summary judgment - Havana House asserted that Skyway sold counterfeit or unauthorized cigars and that its lack of quality control resulted in a depreciation of goodwill - The Federal Court of Canada, Trial Division, declined to grant summary judgment - Although it may be open to the court to rule that a defendant's lack of quality control could damage a plaintiff's goodwill, there was insufficient evidence of this failure to make this a non-triable issue - See paragraphs 81 to 83.

Trademarks, Names and Designs - Topic 4411

Trademarks - Practice - Summary judgments - [See Trademarks, Names and Designs - Topic 1808 and Trademarks, Names and Designs - Topic 3068 ].

Cases Noticed:

Seiko Time Canada Ltd. v. Consumers Distributing Co., [1984] 1 S.C.R. 583; 54 N.R. 161, refd to. [para. 34].

Breck's Sporting Goods Co. v. Sportcam Co. and Magder, [1976] 1 S.C.R. 527; 3 N.R. 601, refd to. [para. 37].

Heintzman v. 751056 Ontario Ltd. et al. (1990), 38 F.T.R. 210 (T.D.), refd to. [para. 37].

All Canada Vac Ltd. v. Lindsay Manufacturing Inc. (1990), 32 F.T.R. 259; 28 C.P.R.(3d) 385 (T.D.), affd. (1990), 134 N.R. 231; 33 C.P.R.(3d) 285 (F.C.A.), refd to. [para. 37].

Smith & Nephew Inc. et al. v. Glen Oak Inc. et al., [1996] 3 F.C. 565; 198 N.R. 302 (F.C.A.), leave to appeal dismissed (1997), 215 N.R. 319 (S.C.C.), refd to. [para. 38].

Granville Shipping Co. v. Pegasus Lines Ltd. S.A. et al., [1996] 2 F.C. 853; 111 F.T.R. 189 (T.D.), refd to. [para. 41].

Uniwell Corp. v. Uniwell North America Inc. (1996), 109 F.T.R. 81; 66 C.P.R.(3d) 436 (T.D.), refd to. [para. 43].

Unitel Communications Inc. v. Bell Canada (1995), 92 F.T.R. 161; 61 C.P.R.(3d) 12 (T.D.), refd to. [para. 43].

White Consolidated Industries Inc. v. Beam of Canada Inc. (1991), 47 F.T.R. 172; 39 C.P.R.(3d) 94 (T.D.), refd to. [para. 45].

Manhattan Industries Inc. v. Princeton Manufacturing Ltd. (1971), 4 C.P.R.(2d) 6 (F.C.T.D.), refd to. [para. 46].

Saxon Industries Inc. v. Aldo Ippolito & Co. (1982), 66 C.P.R.(2d) 79 (F.C.T.D.), refd to. [para. 49].

McCabe v. Yamamoto & Co. (America) Inc. et al., [1989] 3 F.C. 290; 25 F.T.R. 186 (T.D.), refd to. [para. 49].

Royal Doulton Tableware Ltd. v. Cassidy's Ltée, [1986] 1 F.C. 357 (T.D.), refd to. [para. 50].

Sequa Chemicals Inc. v. United Color and Chemicals Ltd. (1993), 165 N.R. 316; 53 C.P.R.(3d) 216 (F.C.A.), refd to. [para. 50].

Industrie Alimentari Molisane S.r.1. v. Distributions Rosalba J.D. Inc. (1995), 94 F.T.R. 218; 61 C.P.R.(3d) 149 (T.D.), refd to. [para. 50].

Waxoyl AG v. Waxoyl Canada Ltd. (1984), 3 C.P.R.(3d) 105 (F.C.T.D.), refd to. [para. 52].

Argenti Inc. v. Exode Importations Inc. (1984), 8 C.P.R.(3d) 174 (F.C.T.D.), refd to. [para. 52].

Wilhelm Layher GmbH v. Anthes Industries Inc. (1986), 1 F.T.R. 82; 8 C.P.R.(3d) 187 (T.D.), refd to. [para. 52].

Citrus Growers Association Ltd. v. Branson (William D.) Ltd., [1990] 1 F.C. 641; 32 F.T.R. 53 (T.D.), refd to. [para. 53].

Optagest Canada Inc. et al. v. Services Optométriques Inc. et al. (1991), 43 F.T.R. 241; 37 C.P.R.(3d) 28 (T.D.), refd to. [para. 54].

Fennessy v. Verb Investments Inc. (1993), 67 F.T.R. 319; 50 C.P.R.(3d) 477 (T.D.), refd to. [para. 55].

Morris (Philip) Inc. v. Imperial Tobacco Ltd. (1985), 7 C.P.R.(3d) 254 (F.C.T.D.), affd. (1987), 91 N.R. 76; 17 C.P.R.(3d) 237 (F.C.A.) and (1987), 81 N.R. 28; 17 C.P.R.(3d) 289 (F.C.A.), refd to. [para. 62].

Professional Publishing Associates Ltd. v. Toronto Parent Magazine Inc. (1986), 8 F.T.R. 207; 9 C.P.R.(3d) 207 (T.D.), refd to. [para. 64].

Mr. P's Mastertune Ignition Services Ltd. v. Tune Masters (1984), 82 C.P.R.(2d) 128 (F.C.T.D.), refd to. [para. 65].

Manos Foods International Inc. v. Coca-Cola Ltd. et al. (1997), 26 O.T.C. 41; 74 C.P.R.(3d) 2 (Gen. Div.), refd to. [para. 81].

Statutes Noticed:

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 2, sect. 4(1) [para. 20]; sect. 7(b), sect. 7(c), sect. 7(d) [para. 24]; sect. 16 [para. 21]; sect. 17(1) [para. 23]; sect. 18(1) [para. 22]; sect. 19, sect. 20(1), sect. 22 [para. 25].

Authors and Works Noticed:

Fox, Harold G., Canadian Law of Trade-marks and Unfair Competition (3rd Ed. 1972), pp. 187 [para. 33]; 304, 305 [para. 42]; 358 [para. 27].

Counsel:

Kenneth D. McKay, for the plaintiffs;

Alnaz I. Jiwa, for the defendant.

Solicitors of Record:

Sim, Hughes, Ashton & McKay, Toronto, Ontario, for the plaintiffs;

Alnaz I. Jiwa, North York, Ontario, for the defendant.

These applications were heard on April 16 and 17, 1998, at Toronto, Ontario, before Teitelbaum, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on May 19, 1998.