Unitel Communications Inc. v. Bell Canada, (1995) 92 F.T.R. 161 (TD)

• Judge: Gibson, J.
• Court: Federal Court (Canada)
• Case Date: April 24, 1995
• Jurisdiction: Canada (Federal)
• Citations: (1995), 92 F.T.R. 161 (TD)

Unitel Com. Inc. v. Bell Can. (1995), 92 F.T.R. 161 (TD)

MLB headnote and full text

In The Matter Of an Application in the Federal Court of Canada, Trial Division, to expunge Trade-Mark Registration No. 311,052 for WATS, No. 310,547 for INWATS, No. 311,051 for OUTWATS, No. 372,519 for 900 SERVICE, No. 372,518 for LE SERVICE 900, No. 285,112 for CALLING CARD, No. 285,658 for CARTE D'APPEL, and No. 377,785 for 800 PLUS

Unitel Communications Inc. (applicant) v. Bell Canada (respondent)

(T-718-91)

Indexed As: Unitel Communications Inc. v. Bell Canada

Federal Court of Canada

Trial Division

Gibson, J.

April 24, 1995.

Summary:

Unitel Communications Inc. applied under s. 57(1) of the Trade-marks Act to strike out eight trademarks owned by Bell Canada relating to telecommunication services (i.e., "Wats", "Inwats", "Outwats", "900 Service", "Le Service 900", "Calling Card", "Carte D'Appel" and "800 Plus"). Unitel argued that the initial registrations were prohibited because the trademarks were descriptive, and further, at the time of commencement of the expungement proceedings the trademarks were not distinctive.

The Federal Court of Canada, Trial Division, allowed Unitel's action and declared the trademark registrations invalid because at the time the expungement proceedings commenced the trademarks were not distinctive. The court rejected the argument that the trademarks were descriptive. In addition to the lack of distinctiveness, the trademark registrations for "Calling Card" and "Carte D'Appel" were declared invalid because of false statements in the registration applications and declarations of use.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Descriptive marks - Bell Canada was the owner of eight trademarks relating to telecommunication services (i.e., "Wats", "Inwats", "Outwats", "900 Service", "Le Service 900", "Calling Card", "Carte D'Appel" and "800 Plus") - Unitel applied to expunge the trademarks, arguing that registration of the marks was prohibited on the ground of descriptiveness - The Federal Court of Canada, Trial Division, held that none of the trademarks were clearly, as of the date of registration, descriptive of the wares or services in association with which they were registered - Therefore none of the marks were prohibited within the meaning of ss. 10 or 12(1)(e) of the Trade-marks Act - See paragraphs 38 to 47, 99 to 106, 132 to 139 and 175 to 178.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Descriptive marks - The Federal Court of Canada, Trial Division, stated that "... in order to be clearly descriptive, a trademark must be more than merely suggestive of the character or quality of the wares or services in association with which it is used or proposed to be used. The descriptive character must go to the material composition of the services or refer to an intrinsic quality of the goods or services which are the subject of the trademark. The test is the immediate first impression formed in the minds of members of the relevant universe." - See paragraph 175.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Descriptive marks - Bell Canada owned eight trademarks relating to telecommunication services (i.e., "Wats", "Inwats", "Outwats", "900 Service", "Le Service 900", "Calling Card", "Carte D'Appel" and "800 Plus") - Unitel sought expungement, raising issues of whether the marks were descriptive or distinctive - The Federal Court of Canada, Trial Division, stated that "... the analysis of whether or not a trademark is descriptive derives from the first impression of the relevant 'purchasers', 'consuming public' or 'universe'. With respect to distinctiveness, a similar 'universe' acts as the 'measuring stick' against which evidence of use is analyzed" - See paragraph 99 - The court held that, in this case, the evidence of the "ultimate consumers" of the products should be included in determining whether the marks were descriptive or distinctive - See paragraphs 99 to 106.

Trademarks, Names and Designs - Topic 707

Trademarks - Registration - Conditions precedent - Requirement of use - Bell Canada owned the trademarks "Calling Card" and "Carte D'Appel" respecting telecommunication services - The trademarks were originally registered by TCTS which also filed declarations of use - However, TCTS never directly provided telecommunication services, but acted as a cooperative organization for its members, who eventually became users of the marks - Unitel sought expungement, arguing that the marks were originally registered because of TCTS's false declarations - The Federal Court of Canada, Trial Division, held that the trademarks "Calling Card" and "Carte D'Appel" were void ab initio where the statement of intent and the declarations of use were simply false - It was unnecessary to show fraud or intent to deceive where the application and declaration both contained material false statements - See paragraphs 121 to 131.

Trademarks, Names and Designs - Topic 885

Trademarks - Registration - Expungement - Who may apply for expungement - "Person interested" - Unitel applied under the Trade-marks Act, s. 57(1), to strike out trademarks owned by Bell Canada relating to telecommunication services - Section 57(1) gave the Federal Court jurisdiction on an application of "any person interested" to strike an entry from the trademarks register where the register was inaccurate - Section 2 defined "person interested" to include any person "who is affected or reasonably apprehends that he may be affected by any entry in the register" - Bell argued that Unitel was not a "person interested" at the time the proceeding was commenced and therefore did not meet the statutory threshold to file its application - The Federal Court of Canada, Trial Division, rejected Bell's argument - See paragraphs 17 to 28.

Trademarks, Names and Designs - Topic 889.1

Trademarks - Registration - Expungement - Grounds - Loss of distinctiveness - Bell Canada was the owner of eight trademarks relating to telecommunication services (i.e., "Wats", "Inwats", "Outwats", "900 Service", "Le Service 900", "Calling Card", "Carte D'Appel" and "800 Plus") - Unitel sought expungement, arguing that the trademarks had lost their distinctiveness at the time of commencement of the expungement proceedings because of extensive unauthorized use of the trademarks - The Federal Court of Canada, Trial Division, agreed that none of the trademarks were distinctive when the proceedings were commenced and the trademarks were therefore invalid - See paragraphs 38 to 47, 99 to 106, 140 to 186.

Trademarks, Names and Designs - Topic 889.1

Trademarks - Registration - Expungement - Grounds - Loss of distinctiveness - "Dual-meaning theory" - Bell Canada owned eight telecommunication related trademarks - Unitel sought expungement, arguing loss of distinctiveness - Bell countered that the "dual-meaning theory" was part of Canadian law (i.e., that a trademark can be understood by the relevant public to have both a generic and trademark sense, particularly where the mark is used in commercial discourse in a descriptive sense over a lengthy period of time) - The Federal Court of Canada, Trial Division, held that there was insufficient evidence to show that the trademarks had established a dual-meaning, but opined that in an industry such as the telecommunication industry, dual-meaning in some or all marks was a distinct possibility - See paragraph 145.

Trademarks, Names and Designs - Topic 889.1

Trademarks - Registration - Expungement - Grounds - Loss of distinctiveness - [See third Trademarks, Names and Designs - Topic 261 ].

Trademarks, Names and Designs - Topic 889.6

Trademarks - Registration - Expungement - Grounds - False declarations - [See Trademarks, Names and Designs - Topic 707 ].

Trademarks, Names and Designs - Topic 890

Trademarks - Registration - Expungement - Evidence - Unitel applied to strike out Bell Canada's trademarks for telecommunication services (Trade-marks Act, s. 57(1)) - Bell objected to admission of evidence of the United States Trademarks Register respecting the impugned marks and of use of the marks in the U.S. or in U.S. publications circulated in Canada - The Federal Court of Canada, Trial Division, held that the evidence respecting the U.S. Register and the use of terms in the U.S. identical or similar to the impugned marks was irrelevant for this application - While the marks were possibly used in the U.S. for long-distance telecommunication services, and advertising of those services possibly occurred in Canada, no such services or wares were being offered in Canada by the U.S. company - See paragraphs 30 to 34.

Trademarks, Names and Designs - Topic 890

Trademarks - Registration - Expungement - Evidence - Bell Canada owned eight trademarks relating to telecommunication services - Unitel applied to expunge the trademarks - Both parties sought to admit survey evidence to show the extent of trademark recognition - The Federal Court of Canada, Trial Division, discussed the admissibility and weight of the survey evidence - The court held that Unitel's survey evidence was admissible but had only slight probative value because the survey was directed to only a small portion of the relevant universe and that an unrepresentative portion - Bell's survey evidence had no probative value and was inadmissible because of the range of variation from "approved" methods, techniques and procedures combined with the lack of geographical representation in the sample employed - See paragraphs 107 to 120.

Trademarks, Names and Designs - Topic 4406

Trademarks - Practice - Evidence - General - [See first Trademarks, Names and Designs - Topic 890 ].

Trademarks, Names and Designs - Topic 4408

Trademarks - Practice - Evidence - Public opinion surveys - [See second Trademarks, Names and Designs - Topic 890 ].

Cases Noticed:

Canadian Pacific Ltd. v. Telesat Canada (1982), 36 O.R.(2d) 229 (C.A.), refd to. [para. 14].

Téléphone Guévremont Inc. v. Régie des télécommunications du Québec et al., [1994] 1 S.C.R. 878; 168 N.R. 7; 61 Q.A.C. 175; 112 D.L.R.(4th) 127; 54 C.P.R.(3d) 401, refd to. [para. 15, footnote 2].

Labatt (John) Ltd. v. Carling Breweries Ltd. (1974), 18 C.P.R.(2d) 15 (F.C.T.D.), refd to. [para. 19].

Aladdin Industries Inc. v. Canadian Thermos Products Ltd. (1969), 57 C.P.R. 230 (Exch. Ct.), refd to. [paras. 20, 144].

Building Products Ltd. v. B.P. Canada Ltd. (1961), 21 Fox Pat. C. 130 (Exch. Ct.), refd to. [para. 23].

Coronet Wallpaper (Ontario) Ltd. v. Wall Paper Manufacturers Ltd. (1983), 77 C.P.R.(2d) 282 (F.C.T.D.), refd to. [para. 23].

Appollinaris Company's Trademark, In Re (1890), 8 R.P.C. 137 (C.A.), refd to. [para. 27, footnote 3].

Powell's Trademark, Re, Powell v. Birmingham Vinegar Brewary Co. (1893), 10 R.P.C. 195 (C.A.), affd. (1894), 11 R.P.C. 4 (H.L.), refd to. [para. 27].

Sun-Maid Growers of California v. Williams & Humbert Ltd. (1981), 54 C.P.R.(2d) 41 (F.C.T.D.), refd to. [para. 30].

Morris (Philip) Inc. v. Imperial Tobacco Ltd. (1987), 81 N.R. 28; 17 C.P.R.(3d) 289 (F.C.A.), refd to. [para. 30].

Fibregrid Inc. v. Precisioneering Ltd. (1991), 42 F.T.R. 114; 35 C.P.R.(3d) 221 (T.D.), refd to. [paras. 30, 166].

Motel 6 Inc. v. No. 6 Motel Ltd. et al. (1981), 56 C.P.R.(2d) 44 (F.C.T.D.), refd to. [paras. 31, 151].

Institut National des Appellations d'Origine des Vins et Eau de Vie et al. v. Andres Wines Ltd. et al. (1990), 30 C.P.R.(3d) 279 (Ont. H.C.), refd to. [para. 32].

Orkin Exterminating Co. v. Pestco Co. of Canada Ltd. and Valder (1985), 10 O.A.C. 14; 50 O.R.(2d) 726 (C.A.), refd to. [para. 32].

Lightening Fastener Co. v. Canadian Goodrich Co., [1932] S.C.R. 189, refd to. [para. 42].

General Motors Corp. v. Bellows, [1949] S.C.R. 678; 10 C.P.R. 101, refd to. [para. 42].

Laboratoire Pantagone Ltée v. Parke, Davis & Co., [1968] S.C.R. 307, refd to. [para. 91].

Boliden Aktiebolag v. Osmose Wood Preserving Co. of Canada Ltd. (1974), 14 C.P.R.(2d) 222 (F.C.T.D.), refd to. [para. 100].

Intel Corp. v. Advanced Micro Devices Inc. (1991), 21 U.S.P.Q.2d 1623 (Cal. Dist. Ct.), refd to. [para. 100].

Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120; 143 N.R. 241; 58 O.A.C. 321; 44 C.P.R.(3d) 289, appld. [para. 102].

R. v. Prairie Schooner News Ltd. (1970), 75 W.W.R.(N.S.) 585 (Man. C.A.), refd to. [para. 107].

Walt Disney Productions v. Fantasyland Hotel Inc. (1994), 154 A.R. 161; 20 Alta. L.R.(3d) 146 (Q.B.), refd to. [para. 109].

Kingsdown Medical Consultants Ltd. v. Hollister Inc. (1988), 9 U.S.P.Q.2d 1384 (C.A. Fed. Circ.), refd to. [para. 123].

Bonus Foods Ltd. v. Essex Packers Ltd. (1964), 29 Fox Pat. C. 1 (Ex. Ct.), refd to. [para. 127].

Hughes (W.J.) & Sons "Corn Flower" Ltd. v. Morawiec (1970), 44 Fox Pat. C. 88 (Ex. Ct.), refd to. [para. 127].

Standard Brands Ltd. v. Staley (1947), 6 C.P.R. 27 (Exch. Ct.), refd to. [para. 128].

Marchands Ro-Na Inc. v. Tefal S.A. (1981), 55 C.P.R.(2d) 27 (F.C.T.D.), refd to. [para. 129].

Provenzano v. Registrar of Trademarks (1978), 37 C.P.R.(2d) 189 (F.C.T.D.), affd. (1979), 22 N.R. 529; 40 C.P.R.(2d) 288 (F.C.A.), refd to. [para. 132].

Jordan & Ste-Michelle Cellars Ltd. v. Bright & Co. (1984), 57 N.R. 214; 81 C.P.R.(2d) 103 (F.C.A.), refd to. [para. 132].

General Motors Corp. v. Bellows (1949), 10 C.P.R. 101 (S.C.C.), refd to. [paras. 133, 176].

Mitel Corp. v. Registrar of Trademarks (1984), 79 C.P.R.(2d) 202 (F.C.T.D.), refd to. [para. 134].

Alberta Government Telephones v. Rogers Cantel Inc. (1994), 55 C.P.R.(3d) 116 (T.M. Opp. Bd.), refd to. [para. 134].

Johnson (S.C.) & Son Ltd. et al. v. Marketing International Ltd., [1980] 1 S.C.R. 99; 29 N.R. 515; 44 C.P.R.(2d) 16, refd to. [para. 135, footnote 4].

Intel Corp. v. Radiation Inc. (1974), 184 U.S.P.Q. 54 (P.O.T.T.A.B.), refd to. [para. 135, footnote 6].

Canada Packers Inc. v. Rogar/STB Inc. (1987), 15 C.P.R.(3d) 496 (T.M. Opp. Bd.), refd to. [para. 136, footnote 7].

Healthy, Happy, Holy Yoga Foundation v. Maharishi International Trademarks Corp. (1983), 74 C.P.R.(2d) 186 (T.M. Opp. Bd.), refd to. [para. 137, footnote 8].

Moore Dry Kiln Co. of Canada Ltd. v. U.S. Natural Resources Inc. (1976), 12 N.R. 361; 30 C.P.R.(2d) 40 (F.C.A.), refd to. [para. 142].

All Canada Vac Ltd. v. Lindsay Manufacturing Inc. (1990), 32 F.T.R. 259 (T.D.), refd to. [para. 143].

American Thermos Products Co. v. Aladdin Industries (1962), 134 U.S.P.Q. 98 (Dist. Ct.), refd to. [para. 145].

Laurentide Chemicals Inc. v. Marchants Deco Inc. et al. (1985), 7 C.P.R.(3d) 357 (F.C.T.D.), refd to. [para. 161].

Home Juice Co. v. Orange Maison Ltée., [1970] S.C.R. 942; 1 C.P.R.(2d) 14, refd to. [para. 165].

Carling Breweries Ltd. v. Molson Cos. (1984), 1 C.P.R.(3d) 191 (F.C.T.D.), refd to. [para. 167].

Canadian Olympic Association v. Allied Corp. and Registrar of Trademarks (1990), 105 N.R. 388; 28 C.P.R.(3d) 161 (F.C.A.), refd to. [para. 168].

Canadian Shredded Wheat Co. v. Kellogg Co. of Canada (1938), 55 R.P.C. 125 (P.C.), refd to. [para. 172].

Palmer's Trademark, Re (1883), 24 Ch. D. 504, refd to. [para. 172].

Standard Coil Products (Canada) Ltd. v. Standard Radio Corp. (1971), 1 C.P.R.(2d) 155 (F.C.T.D.), refd to. [para. 173].

Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. et al., [1982] S.C.R. 494; 41 N.R. 553; 64 C.P.R.(2d) 1, refd to. [para. 173].

Statutes Noticed:

Federal Court Rules, rule 419 [para. 186].

National Telecommunications Powers and Procedures Act, R.S.C. 1985, c. N-20, generally [para. 14].

Railway Act, R.S.C. 1985, c. R-3, sect. 336 [para. 14].

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 2 [paras. 17, 47]; sect. 3 [para. 138]; sect. 10 [para. 46]; sect. 12(1) [paras. 1, 46]; sect. 18 [para. 43]; sect. 19 [para. 40]; sect. 21, sect. 32 [para. 41]; sect. 40(2) [paras. 36, 122]; sect. 50 [paras. 147, 148]; sect. 57(1), sect. 58 [para. 17].

Authors and Works Noticed:

Calgary Herald (1989), generally [para. 69].

Fox, Harold G., The Canadian Law of Trademarks and Unfair Competition (3rd Ed. 1972), pp. 252, 253 [para. 123].

Gilson, Jerome, Trademark Protection and Practice (1994), vol. 1a, p. 2-36 [para. 30].

Long Distance for Less, The Official Guide to Long Distance Telephone Services in the United States (3rd Ed.), generally [para. 63].

McCarthy, J. Thomas, Trademarks and Unfair Competition (3rd Ed. 1994), vol. 1, pp. 11 to 55 [para. 135, footnote 5].

Newton's Telecom Dictionary [para. 63].

Ontario Communications Handbook, 1988, generally [para. 68].

Toronto Star (1990), generally [para. 70].

Counsel:

Michael H. Ryan, Christopher J. Pibus and Cynthia Rowden, for the applicant;

Pierre-André Dubois and C. Ross Carson, for the respondent.

Solicitors of Record:

Law Department, Unitel Communications Inc., Toronto, Ontario, for the applicant;

Ogilvy Renault, Montreal, Quebec, for the respondent.

This case was heard in Ottawa, Ontario, on September 19 to 22, 26 to 30 and October 3 to 6, 1994, before Gibson, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on April 24, 1995.