T-83-84
Kraft Limited (Appellant)
v.
Registrar of Trade Marks (Respondent)
Trial Division, Strayer J.—Ottawa, September 17
and October 3, 1984.
Trade marks — Appeal from decision of Registrar of Trade
Marks rejecting application to register "Breadwinners" as
trade mark for use in association with "providing coupon
programs pertaining to line of food products" — Registrar
finding services as described not within meaning of "services"
in Act and therefore application not meeting requirements of s.
29(a) of Act — Respondent submitting "services" not within
s. 29(a) if merely "incidental" or "ancillary" to sale of goods
— Appellant submitting distribution of coupons to consumers
who, by using coupons, obtain products at reduced price,
constituting "service" — No Canadian case on meaning of
"services" in Act — Appeal allowed — American decisions,
drawing distinctions which are not obvious and having incon
sistent results, not persuasive — Reference to American case,
American International Reinsurance Co., Inc. v. Airco, Inc.,
wherein liberal construction of "services" recommended — S.
2 requiring trade mark with respect to services to distinguish
services performed by person from those performed by others
— Definition not suggesting "services" with respect to which
trade mark established limited to those not "incidental" or
"ancillary" to sale of goods — In absence of definition in Act
and binding case law, no reason for Registrar to impose
restrictive interpretation on "services" — Coupon program not
normal contractual requirement or within normal expectation
of purchaser in connection with sale of goods so not part of
sale of "wares" — Coupon program within meaning of "ser-
vices" in context of definition of trade mark — No harm to
public or competitors in offering coupon program and using
trade mark to distinguish it from other operations — Trade
Marks Act, R.S.C. 1970, c. T-10, ss. 2, 29(a), 36(1)(a).
CASE JUDICIALLY CONSIDERED
APPLIED:
American International Reinsurance Co., Inc. v. Airco,
Inc., 571 F.2d 941; 197 USPQ 69 (C.C.P.A. 1978).
COUNSEL:
A. J. S. Davidson for appellant.
Barbara Mcisaac for respondent.
SOLICITORS:
Angus J. S. Davidson, Ottawa, for appellant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
STRAYER J.: This is an appeal from a decision
of the Registrar of Trade Marks of November 18,
1983, rejecting the appellant's application number
471,302 to register "Breadwinners" as a trade
mark.
The appellant filed evidence to indicate that
since at least January, 1979 it has used this word
"Breadwinners" in association with its "coupon
programs". These programs involve the publica
tion in newspapers, etc. of coupons which may be
saved by the consumer and presented by him or
her to retail stores to obtain a reduction in price in
the course of the purchase of certain products of
the appellant Kraft Limited. Particular coupons
are redeemable for particular products. The appel
lant demonstrated in its evidence that it has used
the term "Breadwinners" on these coupons and in
its advertisements of the coupon program in asso
ciation with its general "Kraft" trade mark.
The appellant Kraft applied for the registration
of "Breadwinners" as its trade mark for the
coupon program on June 12, 1981. Its initial state
ment as to the services in association with which
the mark was being used was that of "marketing
services pertaining to a line of food products
involving coupon programs". As the Examiner
found this objectionable the statement was subse
quently modified to read "providing coupon pro
grams pertaining to a line of food products". The
Examiner then indicated that while this was still
objectionable the Trade Marks Office would be
prepared to consider a statement of the services
reading "promotional services rendered to super
markets and other retail stores by providing
coupon programs pertaining to a line of food pro
ducts". It will be noted from this that the Examin
er seemingly took the view that, if services were
being provided by the applicant [appellant], they
were not being provided to consumers. The appli
cant [appellant] declined to make this modifica
tion and consequently on November 18, 1983 the
Registrar rendered a decision rejecting the
application.
While that decision relates the history of the
application and digresses somewhat on the reasons
for the rejection, it is clear to me that the legal
basis for the decision is set out in the seventh
paragraph thereof: namely that the Registrar con
cluded that the services as described do not fall
within the meaning of "services" as contemplated
by the Trade Marks Act [R.S.C. 1970, c. T-10]
and thus the application did not meet the require
ment of paragraph 29(a) of the Act which requires
an applicant for registration of a trade mark to file
an application containing
29....
(a) a statement in ordinary commercial terms of the specific
wares or services in association with which the mark has been
or is proposed to be used;
Therefore the Registrar concluded he was obliged
to refuse the application because of paragraph
36(1)(a) of the Act which so requires where the
application does not comply with the requirements
of section 29.
There was an argument presented by the appli
cant [appellant] in the correspondence with the
Trade Marks Office, and by its counsel before me,
to the effect that the Registrar was really rejecting
the application because he did not accept the
applicant's [appellant's] statement as to the date
of commencement of use of the trade mark. It was
contended that the Registrar had no jurisdiction to
refuse an application on these grounds or to go
behind the evidence of the applicant [appellant] in
this connection. I am unable to find any evidence
that the Registrar decided the matter on this basis.
Certainly his letter of November 18, 1983 makes
no mention of it and does in my view make it
amply clear that the reason for rejection is that the
applicant's [appellant's] statement does not
describe any services within the meaning of "ser-
vices" in the Trade Marks Act. I am therefore
going to confine my judgment to this issue. I would
also affirm at this point that in my view the
Registrar had the jurisdiction to decide whether
the application had met the requirements of sec
tion 29 by including all the information which that
section requires. I need not conclude whether the
Registrar is free to disbelieve such information and
reject any or all of it if he believes it to be untrue;
he at least has the jurisdiction to determine wheth
er in form it is correct and that is what, I believe,
the Registrar has done here.
The essential question then remains as to what is
the meaning of "services" as referred to in para
graph 29(a) of the Trade Marks Act. Essentially,
Kraft argues that in any normal sense of the word
its coupon program is a "service". Kraft contends
that it is irrelevant that such a program quite
obviously benefits Kraft: most trade marks when
used in association with goods are involved in
transactions for the profit of the owner of the trade
mark. Kraft also argues that its coupon program is
not simply incidental to the sale of goods because
it is not the normal expectation of the public that
coupons will be available for the purchase of goods
at a discount. Therefore these "services" should
not be seen as something merely ancillary to the
sale by Kraft of its products.
Unfortunately there appears to be little guid
ance available as to the proper interpretation of
the word "services" as used in the Trade Marks
Act. There was no common law right to a trade
mark in connection with services and such trade
marks were not established in Canada until the
amendment of the Trade Marks Act [S.C. 1952-
53, c. 49] in 1953. This followed on a similar
development in the United States in the adoption
of the Lanham Act [ch. 540, 60 Stat. 427 (1946)]
in 1946. Counsel could not cite to me any Canadi-
an jurisprudence on the meaning of "services" as
used in the Trade Marks Act.
Counsel for the Registrar argued for a some
what narrow interpretation of the word "services".
Although conceding that there is nothing in the
Act nor in the jurisprudence to dictate such a
construction she contended that some delineation
of the concept is required to enable the Registrar
to determine what trade marks are properly reg-
istrable in relation to services. She therefore
referred me to a number of U.S. authorities in
support of the proposition that "services" do not
come within the meaning of paragraph 29(a) if
they are merely incidental or ancillary to, inter
alia, the sale of goods. In particular she referred to
McCarthy, Trade Marks and Unfair Competition
(1984, 2nd ed.) at pages 937-941 (Vol. I) and to a
number of decisions of the U.S. Patent and Trade
mark Office and U.S. courts as cited therein. I
have examined these decisions but I do not find
them overwhelmingly persuasive. They draw dis
tinctions which are by no means obvious and the
results are somewhat inconsistent. I am led to
somewhat the same conclusion as that of the Court
of Customs and Patent Appeals in American
International Reinsurance Co., Inc. v. Airco, Inc.,
571 F.2d 941; 197 USPQ 69 (1978), at page 71,
where the Court in speaking of the Lanham Act
observed as follows:
It would appear self-evident that no attempt was made to
define "services" simply because of the plethora of services that
the human mind is capable of conceiving. This, ipso facto,
would suggest that the term be liberally construed. Cognizant
of the foregoing statement, each case must be decided on its
own facts, giving proper regard to judicial precedent.
I would also observe that some of the decisions of
the U.S. Patent and Trademark Office appear to
be stating policy as well as law, and seem to have
been influenced to some extent by the legislative
history of the Lanham Act which, of course, is not
relevant in the interpretation of the Trade Marks
Act.
As counsel have been unable to suggest any
further guidance, nor indeed, any rationale, for the
determination of this question I will start with first
principles by referring to the definition of "trade
mark" in section 2 of the Act which provides, inter
alia, that it means
2....
(a) a mark that is used by a person for the purpose of
distinguishing or so as to distinguish wares or services manu-
factured, sold, leased, hired or performed by him from those
manufactured, sold, leased, hired or performed by others,
The basic requirement of a trade mark with
respect to services, then, is that it "distinguish ...
services . .. performed by [a person] from those
... performed by others ...". It is this definition
which brings within the scope of the Act trade
marks with respect to services. I can see nothing in
this definition to suggest that the "services" with
respect to which a trade mark may be established
are limited to those which are not "incidental" or
"ancillary" to the sale of goods. Kraft has submit
ted that it is providing a service by making its
coupons widely and randomly available to consum
ers who, by the use of such coupons, can obtain its
products at a reduced price. I can see no reason
why this cannot be described as a service and I see
nothing in the Act which requires the Registrar to
reject Kraft's statement of its services as "provid-
ing coupon programs pertaining to a line of food
products".
While I think no general rules or criteria can be
suggested for deciding what services come within
the meaning of the Act, I have given considerable
weight to the fact that the coupon program here is
not something which is a normal contractual
requirement or within the normal expectation of
the purchaser in connection with the sale of goods.
If it were, it might well have to be regarded as part
of the sale of "wares" of the applicant [appellant].
But I can take judicial notice of the fact that for
the majority of goods there is not a coupon pro
gram to provide discounts on purchase. Therefore
I believe that a mark such as "Breadwinners" can
distinguish such a coupon program from the sale
of Kraft's products. Also, of course, this word,
especially when combined with the usual Kraft
trade mark, can distinguish this coupon program
from the coupon program of any other manufac
turers. Therefore it seems to me that the coupon
program comes within the meaning of "services"
in the context of the definition of "trade mark" as
found in section 2.
By way of summary, when faced with an
absence of any definition in the Act and any
binding jurisprudence, I can see no reason why the
Registrar should impose a restrictive interpretation
on the word "services" as added to the Trade
Marks Act in 1953. If the applicant [appellant]
chooses to offer a coupon program and to use a
trade mark to distinguish it from its other opera
tions, I can see no harm to the public nor to its
competitors. If such there be, it has not been
demonstrated to me. In the absence of any such
justification for a restrictive interpretation I see no
reason why the decision of the applicant [appel-
lant] to use this mark for such a program should
not be accepted and protected by registration.
Further, I might add that I see no logic in the
phraseology which the Examiner indicated that the
Trade Marks Office would be prepared to consid
er, namely "promotional services rendered to
supermarkets and other retail stores by providing
coupon programs pertaining to a line of food pro
ducts". Presumably this implies that the Office is
prepared to regard this program as a service to
retailers but not to consumers. If, however, the
essential basis for its rejection is that the coupon
program is not a service because it is "ancillary"
or "incidental" to the sale of the applicant's prod
ucts, as argued before me, it is hard to see how it is
any less objectionable on this ground when seen as
a service only to retailers.
I am therefore allowing the appeal by way of
reversing the decision of the Registrar that the
applicant's [appellant's] statement of its services
as that of "providing coupon programs pertaining
to a line of food products" is not a statement of
services as contemplated by the Trade Marks Act
and therefore not in compliance with paragraph
29(a) of that Act. The matter will be remitted to
the Registrar for further determination on that
basis.
In accordance with the usual practice, no costs
will be awarded either in favour of, or against, the
Registrar.
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.