Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. et al.

Supreme Court of Canada

CITATION: Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. et al., [1982] 1 S.C.R. 494
DATE: May 6, 1981, April 5, 1982;
DOCKET: 16057

Oxford Pendaflex Canada Limited
(Plaintiff) Appellant
Korr Marketing Limited, Pirie-Mckie Limited, Mitchell Plastics Limited and Pirham Manufacturing Inc.
(Defendants) Respondents.

Laskin C.J. and Ritchie, Dickson, Estey and McIntyre.


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The judgment of the Court was delivered by ESTEY J.–

The appellant brought an action against the respondents founded in the tort of passing-off and, having failed at trial and in the Court of Appeal of Ontario, now seeks in this Court an injunction and an accounting on two principal grounds:

The product in question is a tray commonly used on desks in offices and elsewhere to hold letters and documents. The history of the appellant’s product and its sale in Canada began in the mid-1960’s when an American company, which had been manufacturing and marketing this tray in the United States, exported it to Canada through a manufacturer’s agent. The tray sold under the name “Contempo Tray”. Sometime thereafter the importation into Canada was conducted through a company jointly owned by the American manufacturer and the Canadian manufacturer’s agent. Later, the manufacturer’s agent bought out the United States company’s interest in the Canadian venture which thereupon changed its name to Starmark of Canada Limited and proceeded to manufacture the identical tray and to market it in this country. Thus by 1968 the tray was marketed in western Canada under the Starmark name (which was later registered under the Trade Marks Act) and which name is still used by the appellant in the marketing of this product. The U.S. company continues to manufacture and market its trays in the United States, now under the name Con-Tempo-Tray. The foregoing evidence is imprecise as to dates and sometimes as to names used by the marketing companies.

Subsequently (in 1973), the appellant acquired the shares of Starmark of Canada Limited and from that time forward has manufactured and marketed these trays under the name Starmark. Prior to this acquisition of the Starmark company, the appellant manufactured and marketed a tray under the name “Index Card”. This tray was identical in shape and appearance to the Starmark tray except that it was made of heavier material and the stacking holes along the sides of the tray were located in a slightly different position than in the Starmark tray. The manufacture of this Index Card tray was discontinued in 1974 when the appellant commenced to make and market the Starmark tray. The Index Card tray was, however, still being sold at the retail level in 1978.

When asked how the appellant came to acquire the Starmark tray the chairman of the board of the appellant stated:

Thus the appellant and its predecessors have marketed their present tray under different names since the mid-1960’s, the trays being provided first by importation from the American manufacturer, and since 1968 by manufacture in this country. It is also evident that a very similar tray was marketed in Canada by the appellant itself prior to 1974; and that the U.S. manufacturer who apparently originated this tray continues to make and to market it in the United States but under a different name. None of the trays are the subject of any registration under statute.

The respondents consist of three companies, apparently commonly owned and operated, and Mitchell Plastics Limited who are the makers of the mould and the manufacturers of the tray sold by the respondent group. The Mitchell company has simply submitted its rights to the Court and has not participated in these proceedings. When reference is made to the respondents herein, the reference does not include, unless the context otherwise requires, Mitchell Plastics Limited.

The respondents indeed had been selling the appellant’s trays for its predecessor, Starmark of Canada Limited, until 1973 when its right to do so was terminated by the then owner of Starmark of Canada Limited. In fact the respondents or their shareholders at one time sought to buy Starmark of Canada Limited. In 1978, after selling other trays and studying the market, the respondents took a sample of the appellant’s tray to a plastics manufacturer (the Mitchell company) and had a mould made from which the respondents produced the identical product which the respondents proceeded to market in 1978. Apparently the respondents also market this tray in the United States. The only difference between the trays is the lighter plastic used by the respondents and a slightly less ruffled surface on the floor of the respondents’ tray. As the learned trial judge Hughes J. put it:

As to why the respondents copied the appellant’s tray, the evidence is clear:

  (The testimony of the President of the respondents.)

The operations of the respondents in this connection are summarized in the judgment at trial:

It is apparent from the record that the appellant has enjoyed large sales of its trays in Canada, with over a million sold in the past five years. The sales of its trays by the respondents have been very much smaller.

The appellant in this Court submitted that the conclusion reached by the learned trial judge on the facts relating to the origin of the appellant’s trays is wrong and has influenced the later application of the law (which will be discussed shortly) to the evidence at trial. This submission springs largely from the following comment contained in the judgment at trial:

The judgment shortly thereafter referred to the names under which the appellant’s product has been marketed in Canada:

Before dealing further with this first submission of the appellant, it will be helpful to set out the appellant’s second point. This was stated at the outset and refers to the burden on a plaintiff in a passing-off action. Specifically, the question raised by the appellant is put in its factum this way:

In amplification of this submission the appellant stated:

The appellant on this second ground takes exception to the conclusion reached by the learned trial judge:

Similar objection is taken to the endorsement on the record by the Court of Appeal when dismissing the appeal:

The character of the action of passing-off in the law of tort is succinctly described in Fleming, The Law of Torts,4th ed., 1971, at p. 626:

(Adopted in MacDonald et al. v. Vapor Canada Ltd., [1977] 2 S.C.R. 134 at p. 147.) By the fifth edition (1977) of this work this reference was subtly altered to read, at p. 700:

The learned author continues, at pp. 701-02:

As to the immediate issue here, some guidance is to be found in the comment by Russell L.J. in Roche Products Ltd. v. Berk Pharmaceuticals Ltd., [1973] R.P.C. 473 at p. 482:

It is to be noted that in the first part of the observation of Russell L.J. there seems to be a requirement that the purchasing public be left with the impression that the goods of the defendant are the goods of the plaintiff. The next part of the paragraph makes it clear, however, that all that need be left in the mind of the purchaser is the idea that all of the pills (in that case), by reason of their shape, size and mode of marking, came from “one trade source”. There is in that standard no need for the plaintiff to take the next and difficult step of showing that the customer must have known or believed that the only source of the product was the plaintiff. The Roche rule is but a refinement or detailed application of the general requirement for success in a passing-off action as pronounced by Cozens-Hardy M.R. in J.B. Williams Company v. H. Bronnley & Co. Ld. (1909), 26 R.P.C. 765 at p. 771:

(Cited with approval by Hall J. in Parke, Davis & Company v. Empire Laboratories Limited,[1964] S.C.R. 351 at p. 358.)

More precise to our issue are the words of Lord Herschell in Birmingham Vinegar Brewery Company v. Powell,[1897] A.C. 710 at p. 715:

Lord Gorell spoke to the same effect in William Edge & Sons, Limited v. William Niccolls & Sons, Limited, [1911] A.C. 693 at p. 705:

That there may be cases where the distinctive presentation of the product will stamp it in the minds of the intended public as being that of the specific supplier, there is no doubt. John Haig and Company Limited v. Forth Blending Company Limited and W.R. Paterson Limited (1953), 70 R.P.C. 259. That is not to say that where the actual activity of the single or common source is not notorious, the proprietor of the original and unique product will fail. The fundamental requirement for success, however, must always be (whatever else may be required in each instance) something akin to the imitation of a “unique or distinctive dress” which is recognized by the buying public. In the words of the learned author of Fox, The Canadian Law of Trade Marks and Unfair Competition,3rd ed., 1972, at p. 552:

The learned trial judge recited the general test for a successful action for the tort of passing-off relying on authorities which did not require the plaintiff to prove that the product which had acquired “a secondary meaning” was known by the purchasing public to be the goods of the plaintiff. The expression used in the trial judgment “…would be misled as to the origin of the defendants’ tray” and the succeeding reference to the plaintiff (appellant) follow after a discussion of the evidence concerning the eminent position of the appellant in the market for interlocking trays. The judgment at trial then continues:

It is perhaps, unhappily, a close association between the two ideas, firstly of the misleading implication of the origin of the trays of the defendants-respondents, and the pre-eminent position of the plaintiff-appellant as the supplier of these trays in the market. Nonetheless, in my view, the learned trial judge has correctly expressed himself on the law and has not put upon the appellant a burden not required of a plaintiff in a passing-off action.

In this connection, the appellant has drawn the attention of this Court to the judgment of the Ontario Court of Appeal in Eldon Industries Inc. et al. v. Reliable Toy Co. Ltd. et al., [1966] 1 O.R. 409 where Schroeder J.A. stated at p. 419:

This excerpt must be read in the context of earlier language in the judgment, including the observation at p. 418–

–referring in that connection to the decision of this Court in Parke, Davis & Co., supra. On the facts of that case the failure of the claim was not due to the lack of proof of association of the plaintiff with the product or the lesser standard of proof of a common source. This issue was not addressed by the Court. Rather than being at variance with the law as already examined on the issue now before this Court, the Eldon case simply did not concern itself with that issue but rather with ss. 7 (a) to (e) of the Trade Marks Act, 1952-53 (Can.), c. 49; the Copyright Act,R.S.C. 1952, c. 55; breach of confidence and breach of an implied term in a contract. Indeed, the common law tort of passing-off is not discussed.

This brings us back to the first issue, namely the evidence concerning the alleged distinctiveness acquired by the tray marketed by the appellant. The trial judge reviewed the history of this type of tray and while there may be some lack of precision in articulating the origin and linear development of the product, this in my view was occasioned by the sketchy and incomplete oral evidence on this aspect of the issue. By his careful review of the testimony of the customers of the appellant and others associated at one level or another in the market, it is clear that the trial judge took full advantage of his opportunity in trial to assess the conflicting evidence. Indeed, the trial judge, at several points in the trial, was required to press for clarification by the witnesses of their evidence relating to the marketing of the several trays produced here and in the United States. In the end the trial judge concluded, and rightly if I may say so, that all these stacking trays had a common origin in the aforementioned American manufacturer, that nothing had been adapted or created by any of the suppliers, including the appellant, which made any of these trays distinctive, and consequently no secondary meaning had been acquired by the product of the appellant in the market. Hughes J. concluded his assessment of the claims of the appellant:

This finding of fact of lack of the acquisition of secondary meaning is concurrently found in the Court of Appeal, and this Court would not, save on the existence of some special circumstance or unusual element, disturb such a concurrent finding.

Complaint is raised by the appellant of what might be said to be an inferred or added requirement imposed by the trial judge upon the appellant in order to establish the prerequisite secondary meaning upon which an action for passing-off may be founded, namely that either by name or get-up used in the marketing of its trays by the appellant, such a secondary meaning in the province had been established. These references to name no doubt sprang from the rather complex origin of these trays in the first instance and the changing names under which they have been marketed, first by the American manufacturer and then by the predecessors of the appellant and finally by the appellant itself. It is true that the learned trial judge does make reference to “name or get-up” in the same context or phraseology in the course of his reasons for judgment. However, in what might be termed the operative parts of those reasons there does not appear to be, in my view, anything approaching a fatal imposition of such an element on the applicable tests to determine whether or not a secondary meaning has indeed been established by the appellant in connection with its trays.

The Court of Appeal, in its short judgment already set out, appears to have repeated the phrase used at trial to which objection has been taken by the appellant, and with which I have already dealt. The reference in the Court of Appeal judgment must be read as part of a cryptic summary of the trial judgment, the essential part being a concurring conclusion that the appellant had failed to establish the fundamental prerequisite, that a “secondary meaning or secondary reputation had been acquired by the product of the appellant”.

The claim of the appellant originally sounded in both tort and statute (s. 7(b) of the Trade Marks Act, supra). I adopt the view of the learned trial judge:

In this Court no issue as to constitutionality arose and the argument was confined to the action of passing-off as it exists in the common law.

For these reasons I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Fraser & Beatty, Toronto.

Solicitors for the respondent Mitchell Plastics Limited: McKay, Kirvan, Guy, Kitchener.

Solicitors for the respondents Korr Marketing Limited, Pirie-McKie Limited and Pirham Manufacturing Inc.: Weir & Foulds, Toronto.

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