New Hearsay Rules Applied in Trade-Mark Opposition Case

1996-01-01

NEWHEARSAYRULESAPPLIEDINTRADE-MARKOPPOSITIONCASE

by
BarryGamache
LEGERROBICRICHARD,Lawyers
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
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AdecisionhandeddownbytheTrialDivisionoftheFederalCourtofCanada
hasappliedCanada’snewlawofhearsayasdefinedrecentlybythe
SupremeCourtofCanadatoatrade-markcaseinvolvinganappealfroman
OppositionBoarddecision(LabattBrewingCompanyLimitedv.Molson
Breweries,apartnership,T-646-95,May28,1996,HealdD.J.).
TheappealwasbroughtagainstadecisionoftheTrade-MarksOpposition
BoardrejectingLabattBrewingCompanyLimited’s(“Labatt”)applicationfor
registrationofthetrade-markCLUBDESIGNWITHBORDERbasedonusein
Canadainassociationwithalcoholicbrewerybeveragessinceatleastas
earlyas1957.
Labatt’sapplicationwasfiledonFebruary22,1984.OnMay8,1985,the
applicationwasadvertisedforoppositionpurposesandastatementof
oppositionwasfiledonMay31,1985byMolsonBreweries,apartnership
(“Molson”)whichallegedthatLabatt’sapplicationdidnotconformtothe
requirementsofSection30ofCanada’sTrade-MarksAct(R.S.C.1985,c.T-13)
inthattheappliedfortrade-markhadpresumablynotbeenusedinCanada
byLabatt(oritspredecessors)sincethedateclaimedintheapplicationorat
all;othergroundsofopposition(includingagroundbasedonconfusion)were
alsoraisedinMolson’sstatementofopposition.
WhileMolsonfiledasevidencecertifiedcopiesofitsregistrationsforthree
trade-markswhichitallegedwereconfusingwithLabatt’sappliedfortrade-
mark,LabattfiledwiththeRegistrar8affidavitsincludingonefromanaffiant
namedBeasleyandsworninMarch1990.ReviewingLabatt’sownevidence
(andthedefectssupposedlyfoundtherein),theTrade-MarksOpposition
BoardrendereditsdecisiononJanuary31,1995wherebyitrefusedLabatt’s
applicationforregistrationonthebasisofMolson’sfirstgroundofopposition
namelythatthemarkhadnotbeenusedinCanadasince1957asclaimedin
theapplication.Inlightofhisconclusion,theRegistrardidnotmakeafinding
inrespectoftheothergroundsofoppositionsubmittedbyMolson.Labatt

appealedtheRegistrar’sdecisionbeforetheTrialDivisionoftheFederalCourt
whichonlyconcerneditselfwiththegroundofoppositionbasedonalleged
nonuseoftheappliedfortrade-marksince1957inCanada.
BeforetheFederalCourt(HealdD.J.),adebateoccurredbetweenthe
partiesontheadmissibilityofevidencenamelytheBeasleyaffidavitthatwas
filedbyLabattbeforetheRegistrar.AlthoughtheTrade-MarksActpermitsthe
filingofaffidavitevidenceinrespectofanoppositionandeveninanappeal
fromanOppositionBoarddecision,itdoesnotspecifythecriteriaforthe
affidavit.ReferencemustthereforebemadetoRule332(1)oftheFederal
CourtRules(C.R.C.1978,c.663)whichreadsasfollows:”Affidavitsshallbe
confinedtosuchfactsasthewitnessisableofhisownknowledgetoprove,
exceptoninterlocutorymotionsonwhichstatementsastohisbeliefwiththe
groundsthereofmaybeadmitted”.ItfollowsthatinorderfortheBeasley
affidavittobeadmissible,theCourtconsideredthatitmustcomewithin
requirementsofthisrule.AsthematterbeforetheCourtwasnotamotionfor
interlocutoryrelief,Rule332(1)wouldseemtorequirethattheaffidavit
evidenceberestrictedtofactswithinthepersonalknowledgeoftheaffiant.
However,theBeasleyaffidavitwasconstitutedinpartofhearsaysinceit
restatedthecontentofa1978affidavitalsosignedbyBeasleyfordefending
amotionforaninterlocutoryinjunctionandchroniclingtheinterviewsdone
byBeasleyof12Labattemployeesandformeremployeesregardinguseof
theappliedfortrade-markgoingbackto1957.
InCanada,upuntilrecently,itwasthegeneralrule(subjecttospecific
exceptions)thathearsayevidencewasinadmissibleinaCourtofLaw.A
classicformulationofwhatconstitutes”hearsayevidence”isfoundin
Subramaniamv.PublicProsecutor,[1956]1W.L.R.965(P.C.)atpage970:
“Evidenceofastatementmadetoawitnessbyapersonwhoisnothimself
calledasawitnessmay(…)behearsay.Itishearsayandinadmissiblewhen
theobjectoftheevidenceistoestablishthetruthofwhatiscontainedinthe
statement”.However,thisgeneralprohibitionagainsthearsayevidencewas
criticizedbyCanada’sSupremeCourtinR.v.Khan[1990]2S.C.R.531at
page540:”Thehearsayrulehastraditionallybeenregardedasanabsolute
rule,subjecttovariouscategoriesofexceptions,suchasadmissions,dying
declarations,declarationsagainstinterestandspontaneousdeclarations.
Whilethisapproachhasprovidedadegreeofcertaintytothelawon
hearsay,ithasfrequentlyprovedundulyinflexibleindealingwithnew
situationsandnewneedsinthelaw.Thishasresultedincourtsinrecentyears
onoccasionadoptingamoreflexibleapproach,rootedintheprincipleand
thepolicyunderlyingthehearsayruleratherthanthestricturesoftraditional
exceptions”.TheSupremeCourtthereforeconcludedthattheprinciplesthat
shouldgoverntheadmissionofsuchhearsayevidencearetobethe
“necessity”oftheevidencetoproveafactinissue,andthe”reliability”ofthis

evidence.ThisapproachwasconfirmedinthesubsequentdecisionofR.v.
Smith[1992]2S.C.R.915.
Mr.JusticeHealdtooknotethatindeedthelawrelatingtohearsayevidence
hadchangedsignificantlyinCanadafollowingtheSupremeCourtof
CanadadecisionsinKhanandSmith,twocriminalcases.Theimpactofthese
twodecisionsontheadmissibilityofaffidavitevidenceunderRule332(1)was
reflectedintheFederalCourtofAppealdecisioninEthierv.Canada
(R.C.M.P.)[1993]2F.C.659(C.A.)andtheFederalCourtTrialDivisiondecision
inLecoupev.CanadianArmedForces(1994),81F.T.R.91(T.D.).Making
referencetothetwoaforementioneddecisionsoftheSupremeCourtof
Canada,Mr.JusticeHugesseninEthierstatedthathearsayevidenceisnow
admissibleonaprincipledbasis,thegoverningprinciplebeingthereliability
oftheevidenceanditsnecessity.Finally,Mr.JusticeNadoninLecoupe
reconciledtheSupremeCourt’sdecisionsinKhanandSmithwiththewording
ofRule332(1)whenhestatedthatthatrulemustbereadasbeingsubjectto
theCommonLawexceptionstothehearsayrule;inotherwords,inorderto
determinewhetherhearsayevidencecontainedinanaffidavitfallswithinthe
newCommonLawexceptionsonemustaskiftheevidencewhichanaffiant
seekstointroduceisreliableandnecessary.
Mr.JusticeHealdconsequentlywrote:”Rule332(1)isnolongertobegivenits
clearandstraightforwardinterpretation.Anaffidavitmaynowcontain
statementsofthedeponentthatarebasedoninformationandbelief,ifthis
primafacieinadmissiblehearsayevidencefallswithinthecommonlaw
exceptionstothehearsayrule.Thequestiontobeaskediswhetherthe
evidencesoughttobeadmittedmeetsthecommonlawexceptionsto
hearsay,whicharenowgovernedbythecriteriaofnecessityandreliability”.
Applyingthecriteriaofnecessityandreliability,Mr.JusticeHealdreviewed
theBeasleyaffidavitwhichwaspreviouslyjudgedtohavebeeninadmissible
ashearsayunderastrictinterpretationofRule332(1)oftheFederalCourt
Rules.ReviewinghowBeasleyconductedhis1978interviewsand
determiningthatitwasnotunreasonableforLabatttorelyonthe1978
affidavit(sincethememoriesofthe12individualsinterviewedin1978
(presumingallwerestillalive)wouldbelessreliablein1996thantheywere18
yearsago),Mr.JusticeHealdconcludedthattheevidencesubmittedby
Beasleyinhisaffidavitwasadmissible.ThisfindingleadtheCourttoconsider
evidencewhichsupportedLabatt’sclaimthatithaduseditsappliedfor
trade-markinCanadasince1957.Mr.JusticeHealdwasthereforeableto
overturntheRegistrar’sfindingonthispointandrejectedMolson’sgroundof
oppositionbasedonnonuse.

AstheRegistrarhadnotcommenteduponMolson’sothergroundsof
opposition,thefilewasreferredbacktotheRegistrarforrehearingand
determinationonMolson’sothergroundsofopposition.
Mr.JusticeHeald’sdecisionisanillustrationofhowdramaticallyclarifiedand
simplifiedthelawofhearsayhasbecomeinCanada;asstatedbyMr.Chief
JusticeLameroftheSupremeCourtinCanadainSmith,thenewrulessignal
anendtotheoldcategoricalapproachtotheadmissionofhearsay:”What
isimportant(…)isthedeparture(…)fromaviewofhearsaycharacterizedby
ageneralprohibitiononthereceptionofsuchevidence,subjecttoalimited
numberofdefinedcategoricalexceptions,andamovementtowardsan
approachgovernedbytheprincipleswhichunderlietheruleandits
exceptionsalike.Themovementtowardsaflexibleapproachwasmotivated
bytherealizationthat,asageneralrule,reliableevidenceoughtnottobe
excludedsimplybecauseitcannotbetestedbycross-examination”.Hearsay
evidencecannowbeconsideredadmissibleprovideditsatisfiesthetestof
necessityandreliability.
Publishedat(1996),10W.I.P.R.243-244underthetitleNewHearsayRules
AppliedinTrade-MarkOppositionCase.

LEGERROBICRICHARD,1996.

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