T-3942-81
Royal Doulton Tableware Limited, Paragon China
Limited and Doulton Canada Inc. (Plaintiffs)
v.
Cassidy's Ltd.—Cassidy's Ltée (Defendant)
Trial Division, Strayer J.—Toronto, May 7, 8, 9,
10, 11; Ottawa, June 29, 1984.
Trade marks — Use — Distributor of china registering
"Victorian Rose" as trade mark — Manufacturer affixing
backstamp on china bearing words "Paragon" and "Victoriana
Rose" — China often delivered to customers in original pack
aging from manufacturer — Promotional material for retail
ers with distributor's name not reaching consumers — Con
sumers regarding "Victoriana Rose" as denoting products of
manufacturer — Distributor not using trade mark to distin
guish wares sold by it from those sold by others pursuant to s.
2 — Under s. 4 manufacturer deemed user of trade mark —
Trade Marks Act, R.S.C. 1970, c. T-10, ss. 2, 4(1), 16(3).
Trade marks — Distinctiveness — Necessary for trade
mark to link goods with vendor so as to distinguish goods
from those of other vendors — Not enough to distinguish one
design of goods from another — Trade mark "Victoriana
Rose" not distinctive of wares of distributor in light of public
perception that manufacturer's mark — Trade Marks Act,
R.S.C. 1970, c. T-10, ss. 2, 18(1)(b).
Copyright — "Victoriana Rose" — Floral pattern on china
tableware — Employee of manufacturer author of design —
Copyright subsisting therein under s. 4(1) of Copyright Act —
By s. 12(3) manufacturer first owner of copyright — No
evidence lithograph sheets ordered by distributor — Design for
application to china tableware not intended for multiplication
by industrial process as no mention of porcelain or china in
Industrial Designs Rules — S. 46(1) exemption from applica
tion of Copyright Act not applicable — Copyright Act, R.S.C.
1970, c. C-30, ss. 4(1), 12(2),(3), 46(1),(2) — Industrial Design
Act, R.S.C. 1970, c. I-8 — Industrial Designs Rules, C.R.C.,
c. 964, s. 11.
Jurisdiction — Federal Court — Trial Division— Jurisdic
tion to declare trade mark registration invalid and to expunge
registration from register — Jurisdiction to issue permanent
injunction as equitable remedy incidental to Court's jurisdic
tion re: substantive determination of validity of registration —
Power to amend register not including order of involuntary
substitution of one registrant for another — Jurisdiction to
declare ownership of trade mark and copyright — Require-
ments of s. 101 of Constitution Act, 1867 met in both instances
— S. 7(a) and (b), if applicable, might be invoked for protec
tion of owner of trade mark — Trade Marks Act, R.S.C. 1970,
c. T-10, ss. 7(a),(b), 18(1)(b),(2), 29, 36, 37, 53, 57(1) —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 20 —
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (R.S.C. 1970,
Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982, Item 1), ss.
91(23), 101 — Copyright Act, R.S.C. 1970, c. C-30, s. 20.
Paragon China Limited manufactures china tableware bear
ing a floral pattern and the trade mark "Victoriana Rose".
Cassidy's Ltd. had the exclusive distributorship in Canada for
"Victoriana Rose". When the plaintiffs attempted to terminate
this arrangement, Cassidy's informed them that it had regis
tered "Victoriana Rose" as a trade mark and that the plaintiffs
would have to pay for using it. The plaintiffs allege that the
defendant was not entitled to registration at the time of its
application, and that at the time this action was commenced,
the mark was not distinctive of the defendant's wares.
Held, the registration of the trade mark "Victoriana Rose" is
invalid and is expunged from the register. The plaintiff is
entitled to a permanent injunction restraining the defendant
from representing to the public that it is the owner of the trade
mark "Victoriana Rose". The Court does not have jurisdiction
to substitute Paragon as the owner of the trade mark. Paragon
is declared to be the owner of the copyright in "Victoriana
Rose".
Each item of china bore a backstamp, affixed by the manu
facturer, with the words "Paragon" and "Victoriana Rose" on
it. The china was often delivered to the final customers in its
original packaging from Paragon in England. Promotional ma
terial for Victoriana Rose with Cassidy's name on it was sent to
retailers, but such material would not in the normal course of
events reach the consumer. In light of all the evidence, the
ultimate purchasers must have regarded "Victoriana Rose" as
denoting the products of Paragon. Cassidy's was not entitled to
registration of the trade mark "Victoriana Rose". It never used
the trade mark for the purpose of distinguishing wares sold by
them from those sold by others, as required by section 2 of the
Trade Marks Act. The manufacturer placed the mark on the
china for its own purposes, not as agent for the distributor. As
the pattern's name was conceived by an employee of the
manufacturer, no inference in favour of the distributor as to an
implied understanding as to ownership and use of the mark can
be drawn from the authorship of the name. The manufacturer
would, according to subsection 4(1) of the Trade Marks Act,
be deemed to have used the mark in association with these
wares.
At the time of the commencement of this action the mark
was not distinctive of the wares of the distributor so as to
distinguish them from the wares of others. Thus, under para-
graph 18(1)(b) of the Trade Marks Act, the registration of the
trade mark is invalid. A distinctive trade mark is one which
links goods with a vendor so as to distinguish them from the
goods of other vendors. It is not distinctive if it simply distin
guishes one design of goods from another design of goods even
though if one had special trade knowledge, one might know
that these two kinds of goods are sold respectively by two
different vendors. The audience to which the trade mark must
be distinctive is the public. The message received by the public
in the normal course of business was that this was a manufac
turer's mark.
The Court has jurisdiction to declare that registration of
"Victoriana Rose" is invalid and void under subsection 18(1) of
the Trade Marks Act, setting out the grounds of invalidity, and
section 20 of the Federal Court Act and section 53 of the Trade
Marks Act. The order expunging the trade mark from the
register is within the exclusive jurisdiction of the Court under
subsection 57(1) of the Trade Marks Act. The injunction
restraining the defendant from representing that it owns the
trade mark "Victoriana Rose" is an equitable remedy which is
incidental to the Court's jurisdiction with respect to its substan
tive determination of the validity of the registration of this
mark. The evidence suggests that the defendant might other
wise continue to impede the plaintiff by asserting an interest in
the trade mark "Victoriana Rose".
The Court does not have jurisdiction to substitute Paragon
for Cassidy's as registered owner as a subsection 57(1) amend
ment to the register. The procedure for registration of trade
marks involves a process of examination to be carried out with
respect to any registrant. This process has not taken place with
respect to Paragon.
Theoretically the Court has jurisdiction to declare that Para
gon is the owner of the trade mark, pursuant to section 20 of
the Federal Court Act, which gives it concurrent jurisdiction
where a remedy is sought in equity respecting a trade mark.
The requirements of section 101 of the Constitution Act, 1867
are met since Parliament has prescribed a regime in the Trade
Marks Act concerning what constitutes a trade mark, and the
adoption thereof, whether registered or not. However, on the
evidence before the Court, a declaration as to ownership is not
justified because it is possible that other barriers to Paragon's
ownership were not canvassed. A declaration as to use may be
useful to the Registrar should Paragon seek registration of the
mark.
An employee of Paragon was the author of the rose pattern.
Copyright subsists therein in Canada by virtue of subsection
4(1) of the Copyright Act. By virtue of subsection 12(3)
Paragon was the first owner of the copyright. Cassidy's sugges
tions and advice do not render it the author of the pattern.
The defendant was unable to support its contention that it
was entitled to the copyright under subsection 12(2) of the Act.
There was no agreement that Cassidy's had "ordered" the
lithograph sheets and would be obliged to pay for them if it did
not proceed with a firm order for a quantity of china. Paragon
has distributed the china in other countries for years and
Cassidy's has neither claimed nor received, any royalty. This is
inconsistent with Cassidy's having the copyright in the pattern.
A design for application to china tableware is not excepted
from the protection of the Copyright Act by subsection 46(1),
which provides that the Copyright Act does not apply to designs
capable of registration under the Industrial Design Act. The
Industrial Designs Rules require that a design be applied to
certain kinds of materials, but does not mention porcelain or
china.
Although there was no breach of copyright, the Court can
give a declaration as to copyright ownership under section 20 of
the Federal Court Act, and in accordance with the regime
under the Copyright Act, which is sustained by Parliament's
jurisdiction over copyrights under head 23 of section 91 of the
Constitution Act, 1867. There is no basis for granting an
injunction as there is no evidence that the defendant intends to
breach the copyright.
The claim for damages under section 7 of the Trade Marks
Act is dismissed for want of evidence, not because the Federal
Court does not have jurisdiction. Paragraphs 7(a) and (b)
might be invoked for the protection of the owner of a trade
mark.
CASES JUDICIALLY CONSIDERED
APPLIED:
Manhattan Industries Inc. v. Princeton Manufacturing
Ltd. (1971), 4 C.P.R. (2d) 6 (F.C.T.D.); Marchands
Ro -Na Inc. v. Tefal S.A. (1981), 55 C.P.R. (2d) 27
(F.C.T.D.); Sportcam Co. v. Breck's Sporting Goods Co.,
[1973] F.C. 360; 10 C.P.R. (2d) 28; confd [1976] 1
S.C.R. 527; (1975), 17 C.P.R. (2d) 201; Friendly Ice
Cream Corp. v. Friendly Ice Cream Shops Ltd., [1972]
F.C. 712; 7 C.P.R. (2d) 35 (T.D.).
DISTINGUISHED:
Cellcor Corp. of Canada Ltd. v. Kotacka, [1977] 1 F.C.
227 (C.A.).
REFERRED TO:
Cassidy's Ltd.—Cassidy's Ltée v. Doulton Canada Inc.
et al. (1982), 36 O.R. (2d) 305 (H.C.); Saxon Industries,
Inc. v. Aldo Ippolito & Co. Ltd. (1982), 66 C.P.R. (2d)
79 (F.C.T.D.); In the Matter of an Application by War-
schauer to Register a Trade Mark (1925), 43 R.P.C. 46
(Ch. D.); In the Matter of the Trade Mark of Elaine
Inescourt (1928), 46 R.P.C. 13 (Ch. D.); Wilkinson
Sword (Canada) Ltd. v. Juda (1966), 51 C.P.R. 55 (Ex.
Ct.); Attorney-General for Ontario v. Attorney-General
for Canada, [1937] A.C. 405 (P.C.).
COUNSEL:
J. E. Sexton, Q.C. and B. Morgan for
plaintiffs.
S. Anissimoff and P. Kappel for defendant.
SOLICITORS:
Osler, Hoskin & Harcourt, Toronto, for
plaintiffs.
MacBeth, Johnson, Toronto, for defendant.
EDITOR'S NOTE
The decision herein ought not to be relied upon
without taking into consideration the reasons for
judgment of the Federal Court of Appeal in Dora!
Boats Ltd. v. Bayliner Marine Corporation,
A-536-85, judgment rendered June 13, 1986. The
last-mentioned appeal case will be reported in the
Canada Federal Court Reports.
The following are the reasons for judgment
rendered in English by
STRAYER J.: This action concerns the use of a
floral pattern as applied to china tableware, and
the use of the name thereof, "Victorians Rose", as
a trade mark.
China tableware of this pattern and bearing this
trade mark was first manufactured in England by
the plaintiff Paragon China Limited in 1968 and
has been manufactured by it there even since. It
has proven to be very successful in the Canadian
market. Since 1971 or 1972 the plaintiff Paragon
has been controlled by the plaintiff Royal Doulton
Tableware Limited, a United Kingdom company.
The plaintiff Doulton Canada Inc. is a Canadian
subsidiary of the plaintiff Royal Doulton
Tableware Limited. It and its corporate predeces
sors have since 1973 acted as agents in Canada for
the Doulton group of companies including the
other two plaintiffs herein. I think I need go no
farther into the rather complicated corporate his
tory of these companies.
The defendant is a company incorporated in
Quebec and carries on business in Canada as a
distributor of china tableware.
Until 1973, Paragon was represented in Canada
by an agent known as Oakley, Jackson and Fare
well. Since 1973 it has been represented by the
plaintiff Doulton Canada Inc. or its corporate
predecessors.
The rose pattern in question was designed at the
Paragon factory at Stoke-on-Trent, England, in
1967 and was given the name of "Victoriana
Rose". The circumstances of these events will be
discussed more fully later. Production by Paragon
of this pattern apparently commenced in 1968.
There was an understanding between Paragon and
the defendant Cassidy's Ltd. that the latter would
have the exclusive distributorship in Canada for
china tableware of this pattern. This arrangement
does not seem to have been committed to writing
nor was any duration specified for the arrange
ment. Cassidy's continued to have the exclusive
distributorship, acting as a wholesaler throughout
Canada for the sale of Victoriana Rose china, until
about the end of 1980. This arrangement was
terminated on the initiative of the plaintiff Doul-
ton Canada Inc. Doulton first gave notice in writ
ing to Cassidy's on December 11, 1979 that it
intended to take over distributorship of Victoriana
Rose in Canada. Subsequent discussions resulted
in a delay in the termination of Cassidy's distribu-
torship and Cassidy's appears to have been dis
tributing Victoriana Rose as late as September or
October of 1980. In September of 1980, Cassidy's
tried to persuade Doulton to reverse its position on
this matter and when Doulton declined to do so
Cassidy's for the first time indicated that it had
registered "Victoriana Rose" as a trade mark and
that Doulton would have to pay for using it. It
emerged that Cassidy's had indeed applied for
registration of this trade mark on February 13,
1968 and obtained registration as number 162,829
on May 16, 1969. Consistently with the position
that was taken, Cassidy's sent to Doulton a letter
on September 30, 1980 offering to licence Doulton
Canada Inc. to use the "Victoriana Rose" trade
mark, setting out the fees it would expect to be
paid in return.
Doulton Canada Inc. has nevertheless proceeded
to distribute Victoriana Rose in Canada and has
refused to pay any licence fee to the defendant.
The defendant commenced an action in the
Supreme Court of Ontario claiming infringement
of its trade mark and copyright and claiming
damages against Doulton for passing off. It has
been held by that Court that the action there can
proceed notwithstanding the fact that the present
action in this Court was commenced by the plain
tiffs. See Cassidy's Ltd.—Cassidy's Ltée v. Doul-
ton Canada Inc. et al. (1982), 36 O.R. (2d) 305
(H.C.).
In the present action the plaintiffs are advancing
essentially three claims:
(1) A declaration that Paragon owns the trade mark "Vic-
toriana Rose", a declaration that Cassidy's registration of
"Victoriana Rose" is invalid and the expungement of same, and
an appropriate injunction accordingly; and
(2) a declaration that Paragon has copyright in the rose pattern
and an appropriate injunction to protect it;
(3) damages on the basis that the defendant's representatives
have made false and misleading statements tending to discredit
the business and wares of the plaintiffs in Canada contrary to
paragraph 7(a) of the Trade Marks Act and have directed
public attention to the defendant's wares or business in such a
way as to cause confusion in Canada between the wares and
business of the defendant and those of the plaintiffs, contrary to
paragraph 7(b) of the Trade Marks Act.
The facts relevant to each of these issues are
somewhat different and I will therefore discuss
them separately in relation to each.
Trade mark
Before proceeding further it is necessary to say a
word about the continuity of any possible claim
which the plaintiff Paragon has or might have had
with respect to the trade mark "Victoriana Rose".
It was suggested, but not explained, by counsel for
the defendant that the corporate changes involving
Paragon and the other plaintiffs might somehow
have made their claim to the trade mark "Vic-
toriana Rose" unsustainable. In my view the evi
dence of Mr. Churton and Mr. Johnson has estab
lished prima facie that the corporate mergers and
changes of corporate ownership have occurred as
detailed in the statement of claim. In the state
ment of defence, the defendant merely indicated
that it had no knowledge of the current status of
Paragon although at trial its counsel seemed to
imply that either Paragon no longer existed in
reality or that it was no longer the manufacturer
of the china bearing its name. No evidence was
produced to substantiate this suggestion, however,
except some evidence that ornamental ware (not
tableware) bearing the Victoriana Rose pattern is
made at the Adderley Floral Chinaworks which is
an "associated company"; that is, associated with
Paragon. No precise evidence was given as to the
trade mark, if any, which this ornamental ware
carries. From this I think I can conclude that such
ornamental ware is being made on the authority,
and to the specifications, of Paragon and I do not
think that such an arrangement would preclude
Paragon from being the user of the trade mark if
indeed it is used on such ornamental ware. It is
also, of course, open to the owner of a trade mark
to assign it, pursuant to subsection 47(1) of the
Trade Marks Act [R.S.C. 1970, c. T-10]. What
ever the arrangement may be between Paragon
and Adderley, two associated companies, I do not
see how it can assist the defendant unless it can
establish some sort of abandonment of the trade
mark. There was no evidence presented to estab
lish abandonment. Moreover, it is evident that the
ornamental ware trade is only incidental to the
main issue here which concerns tableware. Indeed
much of the relief requested by the plaintiff relates
only to tableware. In conclusion on this point, I am
satisfied that the plaintiffs among them are in a
position to assert the rights, if any, of the manu
facturer of Victoriana Rose china in the trade
mark thereof.
The plaintiffs seek expungement of the trade
mark with the registration number 162,829, "Vic-
toriana Rose" as registered in the name of Cas-
sidy's Ltd. They also seek associated remedies
which will be discussed later. The grounds for
attacking this registration are essentially that the
defendant was not entitled to registration at the
time of its application or registration, and that at
the time this action was commenced (August 7,
1981) the mark was not distinctive of the defend
ant's wares. In order to deal with these two
grounds of attack it is necessary to look more
closely at the way in which Victoriana Rose was
produced and marketed.
It appears that production of Victoriana Rose
china tableware was started at the Paragon factory
in Stoke-on-Trent in early 1968. It was only sold in
Canada at first and from the outset was imported
by Cassidy's Limited which had the sole distribu-
torship in Canada. The china of this pattern which
was entered as exhibits bore a backstamp as set
out herein.
While there is a suggestion that at some time since
1968 there may have been some change in the
words modifying "Paragon", the defendant admit
ted that throughout the period that it was the sole
distributor, the words "Paragon" and "Victoriana
Rose" both appeared on each item of china. It is
obvious that this backstamp was put on prior to
the final glaze and therefore has been affixed by
the manufacturer. I think I may assume that this
would be the impression given to anyone examin
ing the backstamp. This china was shipped by
Paragon to Cassidy's Ltd. from time to time in
response to orders placed by Cassidy's. The china
was typically shipped in cartons such as that
entered as Exhibit P-31. Such cartons bore the
word "Paragon" in large letters together with the
words "fine English bone china" and "England".
There was also the symbol and words indicating
that Paragon is by appointment to both H.M. the
Queen and H.M. Queen Elizabeth the Queen
Mother, manufacturers of fine bone china. There
was evidence of retailers indicating that also quite
typically the china would reach them from Cas-
sidy's in such cartons and that, depending on the
nature and quantity of china bought, the china
would often be delivered to their customers still in
such boxes. Promotional material for Victoriana
Rose was sent to retailers by both Cassidy's Ltd.
and, after its establishment in Canada, the plain
tiff Doulton Canada Inc. This was usually done in
cooperation between Doulton Canada and Cas-
sidy's. The material sent by Cassidy's to retailers
would, of course, bear its name and the material
sent by Doulton Canada Inc. would (because Cas-
sidy's had the exclusive distributorship for this
pattern) also indicate that orders for Victoriana
Rose pattern should be placed through Cassidy's.
It was common ground that the material mention
ing Cassidy's would not in the normal course of
events ever reach the consumer and that generally
he or she would have no way of knowing who was
the distributor in Canada of Victoriana Rose.
Indeed Mr. Jack Robertson, a former officer of
Cassidy's called as a witness, confirmed that for
reasons having to do with their relations with
retailers it would be to their disadvantage publicly
to identify Victoriana Rose with Cassidy's. He also
agreed that the name "Paragon" would sell more
china to the public than would the name "Cas-
sidy's". There was also evidence from retailers that
in the normal course of trade they would, when
selling, such china to a customer, issue an invoice
which would usually have on it the name of the
pattern and commonly also the word "Paragon".
None could recall using the name "Cassidy's" on
such invoices. In the light of all this evidence, it is
difficult to see how the ultimate purchasers, or
even the retailers, of Victoriana Rose china could
have regarded the words "Victoriana Rose" as
anything other than denoting one of the products
of the plaintiff Paragon China Limited. It is equal
ly hard to imagine how more than a handful of
consumers could ever have known that Cassidy's
Ltd. was the sole distributor of this pattern in
Canada from 1968 to 1980.
As to the first issue raised concerning the validi
ty or registration number 162,829, I am satisfied
that Cassidy's Ltd. was not the person entitled to
secure such registration. As I understand it, when
they applied for registration of the trade mark
"Victoriana Rose" on February 13, 1968, the
china had not yet been put on sale in Canada. I
take this to be the position because counsel for the
defendant invoked the definition of "proposed
trade mark" to justify their application for a trade
mark which presumably had not yet been used in
Canada. But I do not think it makes much differ
ence whether sales of the china in Canada com-
menced before or after their application for the
trade mark because in my view they never "used"
the trade mark for the purpose of distinguishing
wares sold by them from those sold by others.
Such use is required whether one applies the defi
nition of "trade mark" or "proposed trade mark"
in section 2 of the Trade Marks Act. To ascertain
what is meant by "use" in the Act it is necessary
to consider subsection 4(1) which provides:
4. (1) A trade mark is deemed to be used in association with
wares if, at the time of the transfer of the property in or
possession of such wares, in the normal course of trade, it is
marked on the wares themselves or on the packages in which
they are distributed or it is in any other manner so associated
with the wares that notice of the association is then given to the
person to whom the property or possession is transferred.
In Manhattan Industries Inc. v. Princeton Manu
facturing Ltd. (1971), 4 C.P.R. (2d) 6 (F.C.T.D.),
at pages 16-17, Heald J. considered this subsection
as it would apply to a foreign manufacturer whose
mark was put on the product at the factory and
who sold through retailers in Canada. Heald J.
gave particular emphasis to the words "normal
course of trade" and said that in such a situation
section 4 contemplates that sales of the manufac
turer's product bearing the trade mark would con
stitute use in Canada by the manufacturer even if
property in the product might have passed from
the manufacturer to a distributor or retailer before
entry into Canada. Section 4 in such a situation
recognizes the continuity of the transaction from
manufacturer to ultimate consumer and contem
plates protection of the manufacturer's trade mark
throughout these intervening transactions conduct
ed "in the normal course of trade". This decision
was followed in Marchands Ro -Na Inc. v. Tefal
S.A. (1981), 55 C.P.R. (2d) 27 (F.C.T.D.). That
case also involved a mark placed on products by a
foreign manufacturer and sold in Canada through
a distributor and it was held that the mark affixed
by the manufacturer was a manufacturer's mark
which was "used" by it when the products were
sold in Canada through a distributor. See also
Saxon Industries, Inc. v. Aldo Ippolito & Co. Ltd.
(1982), 66 C.P.R. (2d) 79 (F.C.T.D.).
The defendant of course takes the position that
the trade mark "Victoriana Rose" did not exist
until it was created for the purpose of supplying
Cassidy's, that no use had been made of the mark
in Canada except through Cassidy's distributor-
ship, that it was the registered owner of the trade
mark at the time when sales first commenced in
Canada, and therefore Paragon never established
any use in Canada. In its view, any use that was
made of the trade mark in Canada was by Cas-
sidy's as registered owner of the trade mark and
sole distributor of the china. I am satisfied, how
ever, that Paragon as the manufacturer was the
user of the trade mark. It placed the mark on the
china and I can only conclude that it did so for its
own purposes. Paragon certainly did not do it as
agent for Cassidy's. There is no evidence of any
agreement to this end and it would be impossible
to imply an agreement since the evidence was clear
that Paragon never learned of the existence of
Cassidy's registered trade mark until 1980, over
twelve years after production started. While it was
common ground that the question of who actually
thought of the name "Victoriana Rose" would not
be directly determinative of the ownership of the
trade mark, it might be a factor in implying some
common understanding as to the ownership of the
trade mark. To this extent it may be relevant, and
I would therefore record my conclusion that the
name was first thought of by Mr. Johnson while an
employee of Paragon, with the assistance of his
wife. To the extent that it was her idea I believe
she can be taken to have assigned any interest in it
to her husband in his capacity as an employee of
Paragon. The evidence of Mr. and Mrs. Johnson
was very clear as to the selection of the name. On
the other hand, Mr. Robertson, the former officer
of Cassidy's Ltd. who asserted that it was his idea,
was quite vague as to how he had chosen the name.
Therefore I can draw from the authorship of the
name no inference in favour of Cassidy's with
respect to any implied understanding as to owner
ship and use of the trade mark. I am therefore left
with the fact that the mark "Victoriana Rose" was
placed on the product by the manufacturer in a
manner which clearly identified this china pattern
with its maker. In the normal course of trade the
product reached the ultimate customer bearing
this mark which he would understand to be the
mark of the manufacturer. In that normal course
of trade nothing would have transpired to suggest
to either retailers or consumers that the mark was
anything other than the manufacturer's mark. I
conclude that it was the manufacturer who would,
according to subsection 4(1) of the Trade Marks
Act, be deemed to have used the mark in associa
tion with these wares. For its part, Cassidy's did
nothing with its trade mark other than to register
it and occasionally to advertise to retailers the fact
that the "Victoriana Rose" pattern made by Para
gon could be ordered from it. In these circum
stances I do not see how this could be deemed to
be a use of the trade mark.
It is therefore apparent that the defendant Cas-
sidy's Ltd. did not use the trade mark "Victoriana
Rose" "for the purpose of distinguishing ... wares
... sold ... by [it] from those ... sold ... by
others" as required by the Trade Marks Act.
When they distributed china with this mark on it,
it was the manufacturer's mark and it was the
manufacturer Paragon which was using it. It is
fundamental that a trade mark is only created
through use. Although by subsection 16(3) of the
Act Cassidy's Ltd. was entitled to apply for a
"proposed trade mark", as its counsel suggested at
the trial, it is questionable that that is what Cas-
sidy's thought it was doing at the time of the
application as it filed an affidavit of use, sworn by
Mr. Robertson, which was dated February 14,
1968 only one day after the date of the applica
tion. Whatever Cassidy's considered the nature of
the process to be, it is clear that it would have had
to establish use before the trade mark could actu
ally be registered. While Mr. Robertson may well
have sworn his affidavit in good faith to the effect
that Cassidy's had commenced use of the trade
mark, it is my conclusion that in law the activities
of Cassidy's Ltd. concerning the trade mark did
not then and have never constituted use of it in the
terms of the Act.
The second ground of attack on the registration
of the trade mark, as noted above, was to the
effect that at the time of the commencement of
this action the mark was not distinctive of the
wares of Cassidy's Ltd. so as to distinguish them
from the wares of others. Thus, as provided by
paragraph 18 (1) (b) of the Trade Marks Act, the
registration of the trade mark is invalid. I have
concluded that this ground of attack is also well
founded.
Counsel for the defendant argued, inter alia,
that a trade mark is distinctive if it distinguishes
certain goods from certain other goods without
necessarily identifying the vendor or manufacturer
of either. On this basis it was suggested that, since
Victoriana Rose was a pattern of china for which
Cassidy's had the exclusive distributorship while
there were other patterns of Paragon china for
which it did not have the distributorship, then the
trade mark Victoriana Rose on a piece of Paragon
china would distinguish this product from other
products of Paragon which Cassidy's did not sell. I
can find no support for this position in either the
statute nor in the cases. The definition in section 2
of the word "distinctive" reads as follows:
2....
"distinctive" in relation to a trade mark means a trade mark
that actually distinguishes the wares or services in association
with which it is used by its owner from the wares or services
of others or is adapted so to distinguish them;
It is to be noted that a distinctive trade mark is
one which links e.g., goods with a vendor so as to
distinguish them from the goods of other vendors.
It is not distinctive if it simply distinguishes one
design of goods from another design of goods even
though if one had special trade knowledge one
might know that these two kinds of goods are sold
respectively by two different vendors. Such a con-
cept of distinctiveness would run counter to a basic
purpose of the trade mark which is to assure the
purchaser that the goods have come from a par
ticular source in which he has confidence. See Fox,
The Canadian Law of Trade Marks and Unfair
Competition (3rd ed., 1972), at pages 25-26.
There was also some debate as to the relevant
audience to which the trade mark must be distinc
tive. I believe this matter to have been settled
authoritatively by the Federal Court of Appeal in
Sportcam Co. v. Breck's Sporting Goods Co.,
[1973] F.C. 360; 10 C.P.R. (2d) 28, confirmed by
the Supreme Court of Canada in [1976] 1 S.C.R.
527; (1975), 17 C.P.R. (2d) 201. In interpreting
the definition of "distinctive" as quoted above,
Jackett C.J. said at page 368 F.C.; at page 34
C.P.R. "the question is one of fact as to what
message the trade mark `actually' conveys to the
public". In that case the Court concluded that as
the trade mark had been used in Canada to identi
fy the product with its French manufacturer, prior
to registration of the trade mark by the Canadian
distributor, the public would have come to believe
the mark to be distinctive of the manufacturer.
Nothing had happened on the occasion of registra
tion to "convey to the market some other mes
sage". See also In the Matter of an Application by
Warschauer to Register a Trade Mark (1925), 43
R.P.C. 46 (Ch. D.); In the Matter of the Trade
Mark of Elaine Inescourt (1928), 46 R.P.C. 13
(Ch. D.); and Wilkinson Sword (Canada) Ltd. v.
Juda (1966), 51 C.P.R. 55 (Ex. Ct.). While coun
sel for the defendant sought to distinguish the
Breck's case and certain others on the basis that
there had been prior use by the manufacturer in
the country of registration before registration,
while in the present case there was no prior use by
Paragon in Canada of "Victoriana Rose" before
its registration by Cassidy's Ltd., I do not think
this distinction suggests a different result. In the
final analysis the critical factor according to these
cases is the message given to the public. In the
present case I can see no basis on which the public
could have received any message in the normal
course of business other than this mark, obviously
placed on the china at the time of manufacture
associating the name of the pattern with the name
of the manufacturer, was a manufacturer's mark.
Cassidy's own witness and former senior officer
confirmed that it was indeed not the company's
wish nor its manner of doing business to convey to
the ultimate consumer an association between Vic-
toriana Rose and Cassidy's Ltd. Such association
of this nature as was conveyed was communicated
to retailers but it was within the context of inform
ing retailers that if they wanted to buy Paragon's
Victoriana Rose they would have to order it from
Cassidy's. It was obvious that any goods labelled
"Victoriana Rose" came from Paragon: Cassidy's
did not sell any other products made by itself or
other manufacturers with the "Victoriana Rose"
mark. I therefore conclude that the registration in
favour of Cassidy's Ltd. of a trade mark consisting
of the words "Victoriana Rose" is invalid.
As for the remedies sought by the plaintiff, the
defendant raised several objections concerning the
jurisdiction of the Court. I shall deal with these
objections in relation to each remedy.
The plaintiff seeks a declaration that registra
tion number 162,829 of "Victoriana Rose" as a
trade mark is invalid and void. Having regard to
the foregoing I believe the plaintiff is entitled to
such a declaration. The jurisdiction of the Court in
my view arises from subsection 18 (1) of the Trade
Marks Act which includes two grounds of invalidi
ty which I have found in this case to exist. In my
view it is open to the Court to make a declaration
to this effect, by virtue of section 20 of the Federal
Court Act [R.S.C. 1970 (2nd Supp.), c. 10] and
section 53 of the Trade Marks Act.
The plaintiff is also entitled, as requested, to an
order expunging registration number 162,829 in
the name of Cassidy's Ltd.—Cassidy's Ltée from
the trade mark register. Such an order is clearly
within the exclusive jurisdiction of this Court set
out in subsection 57(1) of the Trade Marks Act.
I also conclude that the plaintiff is entitled to
the permanent injunction which it has requested
restraining the defendant from representing to the
public or otherwise that it is the owner of a valid
registered trade mark "Victoriana Rose". Such an
injunction is an equitable remedy which is inciden
tal to the jurisdiction of the Court with respect to
its substantive determination of the validity of the
registration of this trade mark. I have exercised
my discretion in favour of granting the injunction
because I think there is sufficient evidence to
suggest that the defendant might otherwise contin
ue to impede the plaintiff by asserting an interest
in a registered trade mark "Victoriana Rose".
It was suggested by counsel for the plaintiff, and
resisted by counsel for the defendant, that it would
be open to me simply to substitute as registered
owner Paragon China Limited for Cassidy's Ltd.
with respect to registration number 162,829.
Counsel for the plaintiff contended that this could
be regarded as an amendment of the register
which by subsection 57(1) of the Trade Marks Act
the Court is entitled to order. In Friendly Ice
Cream Corp. v. Friendly Ice Cream Shops Ltd.,
[1972] F.C. 712; 7 C.P.R. (2d) 35 (T.D.), Heald
J. held at page 717 F.C.; at page 40 C.P.R. that
the Court has no jurisdiction to make an amend
ment of this sort and I respectfully concur. If one
examines the scheme of the Trade Marks Act,
particularly the procedure by which registration of
trade marks is obtained, it is clear that Parliament
contemplated a process of examination to be car
ried out with respect to any registrant which pro
cess has not taken place here with respect to
Paragon China Limited. In particular section 29 of
the Act requires a considerable amount of infor
mation to be provided by an applicant to the
Registrar which has not happened in this case with
respect to Paragon China Limited. There is of
course also the process of advertising under section
36 and the process of considering opposition to
registration under section 37, none of which has
happened here. In my view any specific proposed
registration should go through these processes and
it matters not that another applicant, Cassidy's
Ltd. has undergone this process with respect to the
same trade mark. I can find nothing in the Act nor
in the jurisprudence which would support an inter-
pretation of the Court's power of amendment of
the register so as to include ordering the involun
tary substitution—as compared to a transfer con
sented to by the registrant—of one registrant for
another.
The plaintiffs further request a declaration that
Paragon "is the owner of the trade mark `Vic-
toriana Rose' for use in association with china
tableware". It is to be noted that as framed the
relief requested does not involve entitlement to
registration. In my view it would be open to this
Court to make such a declaration if it had before it
all the necessary evidence. I believe that this Court
has jurisdiction to make such a declaration pursu
ant to section 20 of the Federal Court Act which
gives it concurrent jurisdiction "in all other cases
in which a remedy is sought under the authority of
any Act of the Parliament of Canada or at law or
in equity, respecting any ... trade mark...." Here
the Trade Marks Act in sections 1 to 11 defines
and prescribes a number of rules concerning trade
marks and the adoption thereof, without reference
to registration. Thereafter, the Act only deals with
registered trade marks. Within the context of sec
tion 20 of the Federal Court Act, the declaration is
a remedy "in equity" and in this case is with
respect to a trade mark. The requirements of
section 101 of the Constitution Act, 1867 [30
& 31 Vict., c. 3 (U.K) [R.S.C. 1970, Appendix II,
No. 5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982,
Item 1)] are also met since Parliament by sections
1 to 11 of the Trade Marks Act has prescribed a
regime concerning what constitutes a trade mark
and the adoption thereof, whether registered or
not. The jurisdiction of Parliament with respect to
trade marks has long since been recognized:
Attorney-General for Ontario v. Attorney-General
for Canada, [1937] A.C. 405 (P.C.). I believe a
declaration with respect to ownership of an unreg
istered trade mark is distinguishable from the
forms of relief sought, and refused, in Cellcor
Corp. of Canada Ltd. v. Kotacka, [1977] 1 F.C.
227 (C.A.). The Court of Appeal held in that case
that the declaration which was sought to the effect
that the plaintiff was the person entitled to obtain
letters patent to a certain invention was not obtain
able under section 20 of the Federal Court Act
because the Patent Act expressly confers on the
Commissioner of Patents the authority to decide in
the first instance on entitlement to patents. In the
present case the Trade Marks Act provides, of
course, no other procedure for determination of
ownership of unregistered trade marks and, unlike
the Patent Act, it does define entitlement to such
industrial property even in the absence of recogni
tion by an official such as the Registrar of Trade
Marks or the Commissioner of Patents. Further, it
may well be that the jurisdiction of Parliament
over trade marks, depending as it does on federal
authority over "the regulation of trade and com
merce" (see Attorney-General for Ontario v.
Attorney-General for Canada, supra) is intrinsi
cally broader than is Parliament's jurisdiction over
"patents of invention and discovery". As to the
latter, it was argued in the Cellcor case supra that
the word "patent" only gives jurisdiction over the
issuance of patents for the protection of inventions,
but not over property rights in an unpatented
invention. The Court of Appeal does not appear to
have found it necessary to deal with this issue,
however.
While then it would in my view be legally
possible to issue a declaration as to ownership of
an unregistered trade mark, I believe in this case I
should confine myself to the evidence before me
relating to the use of the trade mark "Victoriana
Rose". Counsel for the plaintiffs requested that, if
I could not give the broader declaration as to
ownership, I declare that Paragon has been using
this trade mark and that Cassidy's has not. The
evidence and the legal principles referred to above
with respect to the meaning of "use" would justify
me in making such a declaration and I shall
therefore do so. While for all practical purposes it
may be that this is tantamount to a declaration of
ownership, it is at least theoretically possible that
other barriers to Paragon's ownership—barriers
which were not canvassed before me—could pre
clude ultimate recognition of that ownership. I
believe it is unnecessary for me to go further than
this with a declaration but this should not be
interpreted as a finding in any way that there is a
barrier to full recognition of ownership by the
plaintiff Paragon of an unregistered trade mark.
At the same time I believe it could be useful that
the use issue be clarified in this way for whatever
relevance it may have to the future conduct of the
parties. It may also provide assistance to the Reg
istrar should Paragon seek registration of this
mark, but it does not usurp the functions of the
Registrar who must consider many other matters
before reaching a decision as to registration.
Copyright
The copyright issue relates to the rose pattern
used on this china tableware. The plaintiffs seek a
declaration that copyright subsists in this rose
pattern and that Paragon is the owner of that
copyright, and injunctions restraining the defend
ant from reproducing that pattern or representing
to the public that it is the owner of the copyright
therein.
With respect to this issue, the question of
authorship of the rose pattern is critical. While the
evidence was not clear in all details, I am statisfied
that Mr. Reginald Johnson while employed by
Paragon, after being made aware that there might
be a market in Canada for a new rose floral
design, did some paintings for such a design. In
doing so he may have drawn on earlier paintings
which he had done. It further appears that the
suggestion that some such design might have a
market in Canada came directly or indirectly from
Mr. Jack Robertson of Cassidy's. Further, after
the initial design was painted by Mr. Johnson it
was shown to Mr. Robertson who suggested that
the "sprays" of roses should be spread out some
what so as to occupy more of the top surface of the
tableware. Mr. Johnson modified the design
accordingly. Mr. Robertson was satisfied with the
modifications and Cassidy's placed an order for
Victoriana Rose tableware to a value of about
£15,000. For production to begin it was necessary
to have lithograph sheets prepared, which in effect
provided transfers bearing the pattern to be placed
on the china before the final stages of firing and
glazing. The initial cost of these lithograph sheets
was about £3,000.
I conclude that Mr. Johnson was the author of
the pattern and that copyright subsists therein in
Canada by virtue of subsection 4(1) of the Copy
right Act [R.S.C. 1970, c. C-301. At the time of
the making of the work Mr. Johnson was a British
subject, resident within Her Majesty's Realms and
Territories in 1967 and the work was first pub
lished within such Realms and Territories, namely
in England or Canada. Further, by virtue of sub
section 12(3), because Mr. Johnson was in the
employment of Paragon and the work was made in
the course of that employment, Paragon was the
first owner of the copyright and remains so. I do
not accept that Mr. Robertson's suggestions and
advice, helpful as they may have been, rendered
him the author of the pattern. It was the skill and
experience of Mr. Johnson, who testified that
during his career he had made perhaps two thou
sand such sketches of possible patterns, which
created an aesthetically pleasing design, albeit that
it was in reaction to Mr. Robertson's marketing
idea.
The defendant also contends that it is entitled to
the copyright by virtue of subsection 12(2) of the
Copyright Act which reads as follows:
12....
(2) Where, in the case of an engraving, photograph, or
portrait, the plate or other original was ordered by some other
person and was made for valuable consideration in pursuance of
that order, then in the absence of any agreement to the
contrary, the person by whom such plate or other original was
ordered shall be the first owner of the copyright.
The argument seems to be here that the lithograph
sheets were in the nature of "an engraving, photo
graph, or portrait" and that they were "ordered"
by Cassidy's and were "made for valuable con
sideration in pursuance of that order...." The
defendant strove to show that it would have been
obliged to pay for the lithograph sheets if it had
not proceeded with a firm order for a quantity of
this china. Assuming that the lithograph sheets do
come within subsection 12(2), I am not satisfied
that the evidence establishes any such agreement
as would mean that those sheets were ordered by
Cassidy's. There is no evidence in writing of any
agreement by which Cassidy's undertook to pay
the approximately £3,000 cost of the preparation
of the sheets. It is not clear that any sheets were
prepared until Cassidy's had placed its order for
the china. Certainly it was not suggested that
Cassidy's ever did directly pay for the lithograph
sheets although no doubt they did so indirectly
through ordering china just as would any purchas
er of china from Paragon. While it seems clear
that there was an oral agreement that Cassidy's
would have the exclusive right to distribute this
pattern in Canada for some indefinite period, there
was no agreement restraining Paragon from selling
this china in other countries by other means. In
fact Paragon started selling Victoriana Rose in the
United Kingdom in 1975 and it has for a number
of years been distributed in about twenty countries
by Paragon or distributors other than Cassidy's.
Cassidy's has neither claimed, nor received, any
royalty for use of the pattern in this way by
Paragon. None of this is consistent with Cassidy's
having the copyright in the pattern, as it might
have been entitled to under subsection 12(2) if it
had really "ordered" the lithograph sheets.
It was also argued by the defendant that the
Copyright Act is irrelevant, since by subsection
46(1) of that Act it is provided as follows:
46. (1) This Act does not apply to designs capable of being
registered under the Industrial Design Act, except designs that,
though capable of being so registered, are not used or intended
to be used as models or patterns to be multiplied by any
industrial process.
Subsection 46(2) provides that general rules may
be made under the Industrial Design Act [R.S.C.
1970, c. I-8] for determining when a design shall
be deemed to be used as models or patterns to be
multiplied by any industrial process. By Rule 11
[Industrial Designs Rules, C.R.C., c. 964] of the
rules made under the Industrial Design Act, it is
clear that to be deemed to be so used for multi
plication by an industrial process, the design must
be reproduced in more than 50 single articles
(admittedly the case here) and must be applied to
certain kinds of materials therein specified such as
paper hangings, carpets, textiles, or lace. There is
no mention of porcelain or china. Therefore it is
clear that a design for application to china
tableware is not a design deemed to be intended
for multiplication by an industrial process and
therefore is not excepted from the protection of the
Copyright Act by subsection 46(1) thereof.
As noted earlier, the plaintiffs ask for a declara
tion and injunctions with respect to Paragon's
copyright. The defendant contends that in any
event the Court is unable to give any such reme
dies whatever its view may be of Paragon's rights.
The defendant relies on subsection 20(1) of the
Copyright Act which provides:
20. (1) Where copyright in any work has been infringed, the
owner of the copyright is, except as otherwise provided by this
Act, entitled to all such remedies by way of injunction, dam
ages, accounts, and otherwise, as are or may be conferred by
law for the infringement of a right.
It is argued that since this subsection only author
izes remedies where copyright has been infringed,
and there has been no evidence of infringement
here, no remedies are available in the Federal
Court.
I agree that there has been no evidence of
breach of copyright with respect to the floral
pattern. There was no suggestion that Cassidy's
had ever itself tried to reproduce this pattern or
that it had engaged others to do so. It has never
sold any wares bearing this pattern which were not
made by Paragon. Therefore there has been no
infringement of copyright even though there is
obviously a dispute, as evidenced by these proceed
ings, as to who is the owner of the copyright. For
the same reason that I held above with respect to
trade marks that this Court can give a declaration
under section 20 of the Federal Court Act, I find
that I can give a declaration in this case. Such a
declaration is a remedy sought "in equity, respect
ing any ... copyright...." The Copyright Act
prescribes a comprehensive regime of property
rights concerning copyright and it is open to this
Court to declare the entitlement of certain persons
to certain rights in accordance with that regime.
Further, Parliament's jurisdiction, as assigned by
head 23 of section 91 of the Constitution Act,
1867, is with respect to "copyrights" in general
and this amply sustains the comprehensive regime
prescribed by the Copyright Act.
I will therefore make a declaration that the first
and present owner of the copyright in the floral
design Victoriana Rose is Paragon China Limited.
Since, however, there is no evidence that the
defendant has or intends to reproduce or cause the
reproduction of this pattern or to sell reproduc
tions thereof other than those supplied by Paragon
China Limited, nor is there clear evidence that the
defendant has asserted to the public that it is
entitled to this copyright, there would not appear
to be a basis for exercising judicial discretion in
favour of granting the injunctions requested.
Claims under section 7 of the Trade Marks Act
As noted earlier, the plaintiffs also seek dam
ages on the basis that the defendant's representa
tives have made false and misleading statements
tending to discredit the business and wares of the
plaintiffs in Canada and have directed public
attention to its wares in such a way as to cause
confusion in Canada between those wares and the
wares of the plaintiffs, all said to be contrary to
paragraphs 7(a) and (b) of the Trade Marks Act.
The evidence as to any such misrepresentations
was very meager indeed and there was no serious
effort made to establish that damages were suf
fered by the plaintiffs as the result of such alleged
statements. Nor was there any basis suggested
upon which the Court might quantify such dam
ages. I therefore would dismiss this part of the
claim. Fortunately very little time of the Court
was occupied in argument on this matter.
In dismissing this claim for damages, however, I
would not wish to be taken as endorsing the argu
ment of counsel for the defendant that the Federal
Court has no jurisdiction in the matter on the
grounds that paragraphs 7(a) and (b) as they
might be applied in this case would be in relation
to matters not within the authority of Parliament.
It will suffice to note that these paragraphs, if
applicable here, might well be found to be invoked
for the protection of the owner of a trade mark, a
matter within the jurisdiction of Parliament.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.