2023 QCCA 94, 2023 QCCA 94

The Ministry of Energy, Commerce and Industry of the Republic of Cyprus c. 3878422 Canada inc. 2023 QCCA 94 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-029244-209 ( 500-17-098048-179 ) MINUTES OF HEARING DATE: January 20, 2023 CORAM: THE HONOURABLE FRANÇOIS DOYON, J.A. GENEVIÈVE MARCOTTE, J.A. PATRICK HEALY, J.A. APPELLANT COUNSEL the ministry of energy, commerce and industry of the republic of Cyprus Mtre jean-sébastien dupont ( Smart & Biggar ) Absent RESPONDENTS COUNSEL 3878422 canada inc. La maison Alexis de Portneuf INC. Saputo produits laitiers canada s.e.n.c .

Mtre patrick girar D M tre Rémi Leprévost ( Stikeman Elliott ) Absent On appeal from a judgment rendered on November 12, 2020 by the Honourable David R. Collier of the Superior Court , District of Montreal . NATURE OF THE APPEAL: Contract – Intellectual property – Trademark. Clerk at the hearing : Annabelle M-Trudel Courtroom: Antonio-Lamer HEARING

Continuation of the hearing held on January 18, 2023. The parties were excused from appearing in Court. BY THE COURT: Judgment – see page 3. Annabelle M-Trudel, Clerk at the hearing JUDGMENT [ 1 ] The dispute before the trial judge concerned the

interpretation of contractual provisions and the respondents’ alleged breach thereof through the use of the word “Haloumi” on the packaging for cheese sold by respondent Maison Alexis de Portneuf Inc. (“MAPI”) under the “Doré-Mi” trademark and manufactured by respondent Saputo Produits Laitiers Canada S.E.N.C. (“Saputo”). [ 2 ] The contractual provisions allegedly breached were first entered into in 1999, in the context of a trademark dispute between the appellant and Fromagerie Cayer inc., and then in 2004 between the appellant and Fromages Saputo Limitée, a company amalgamated with Fromagerie Cayer inc.

In 2005, Fromages Saputo Limitée was renamed, becoming respondent 3878422 Canada Inc.

That same year, the latter corporation transferred its production to respondent Saputo. [ 3 ] The contractual provisions in question incorporate the notion of “trademark” by providing, among other things, for the following undertaking by Fromagerie Cayer Inc. and, subsequently, by Fromages Saputo Limitée: Refrain, in Canada or in any other country, from further using, offering for sale, selling, distributing, importing, exporting, advertising, promoting or displaying any goods or services in association with the trade-mark HALOMI or with any other trade-mark confusingly similar with HALLOUMI or HALOMI ; [ 4 ] The trial judge was therefore required to determine whether respondents had sold or marketed cheese “in association with the trade-mark HALOMI or with any other trade-mark confusingly similar with HALLOUMI or HALOMI “.

This is what he did when he ruled that, absent proof that the trademark was used on packaging for cheese sold by the respondents, there had been no breach of contract. [ 5 ] In the judge’s opinion, the word “Haloumi” that appears on packaging for cheese sold by respondent MAPI was not used as a trademark, but rather for the purpose of describing the type of cheese sold, in the same manner that the words “cheddar”, “mozzarella” and “brie” serve to describe other types of cheese.

His reasoning is found in the following paragraphs of his judgment: [14] This clause does not stipulate that 3878 Canada shall not use the word HALOUMI on its products. It provides that 3878 Canada shall not use the trademark HALOMI on its products, or any other trademark confusingly similar with HALLOUMI or HALOMI. Accordingly, there is no contractual breach unless 3878 Canada (or the defendants, according to the Ministry’s legal theory) make use of HALOUMI as a trademark on their products. [15] A “trademark” is defined in

section 2 of the Trademarks Act : trademark means (

a) a sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others, […] [16] In the Court’s view, the defendants are correct to argue that HALOUMI is not used on MAPI’s packaging so as to distinguish its goods from those of others.

HALOUMI is not used as a trademark, but rather as a description of a kind of cheese, in the same manner that the words cheddar, mozzarella and brie describe types of cheese. [17] When the 1999 and 2004 agreements were concluded the Ministry had a pending application before the Canadian Trademark Office to register HALLOUMI as a trademark. It was the Ministry’s contention that it owned the trademark because the word HALLOUMI was distinctive in Canada of the cheese produced under the Ministry’s supervision in Cyprus. [18] The Ministry’s attempt to register HALLOUMI as a trademark was unsuccessful.

In 2008, the Registrar of Trademarks determined that HALLOUMI was not registerable as a trademark. He pointed to evidence showing that for several years the words HALLOOM, HALOUMI and HALLOUM had been used by cheese producers in Canada to designate a type of cheese. The Registrar concluded that the closely-related word HALLOUMI could therefore not be distinctive of a particular trader and registered as a trademark. [19] The Ministry applied for the judicial review of the Registrar’s decision to the Federal Court, and ultimately appealed the matter to the Federal Court of Appeal.

In both instances, the Registrar’s decision was upheld. Writing for the Federal Court of Appeal, Justice Robert Mainville concluded:

[24] La conclusion du registraire voulant « qu’il ressort de la preuve qu’en raison d’une pratique commerciale authentique, la marque ou d’autres termes semblables sont devenus reconnus au Canada comme désignant une sorte de fromage » (voir sa décision à la page 9), repose donc sur une analyse quant à moi correcte de la nature et de la portée de la preuve requise afin de soutenir une opposition fondée sur l’article 10 de la Loi. [20]

Section 10 of the Trademarks Act, referred to by Justice Mainville, and underpinning the Registrar’s decision, provides that where a sign (in this case HALLOUMI) “has by ordinary and bona fide commercial usage become recognized in Canada as designating a kind […] of any goods […] no person shall adopt it as a trademark” in association with similar goods in a way that is likely to mislead the public. [21] The Federal Court of Appeal released its decision in June 2011. Two years later, in 2013, MAPI began using the word HALOUMI on its packaging.

Its decision was in response its competitors’ use of similar words on their packaging. [22] When HALOUMI first appeared on MAPI’s packaging in 2013 the law in this country was settled that HALOUMI, or similar words, could not be used as a trademark.

Consequently, the Court cannot conclude that the defendants use HALOUMI as a trademark on their products in violation of the 1999 and 2004 agreements. [ 6 ] On appeal, the appellant is attempting to present the matter from a new perspective, arguing that when the agreements were entered into, the parties sought to preclude the use of the term “Haloumi”, whether or not as a validly registered trademark.

They claim that the fact that the Registrar did not find the trademark to be registrable (as the Federal Court of Appeal confirmed) has no bearing on the respondents’ contractual undertaking and on determining whether it was breached. This approach—which was not part of the appellant’s pleading in first instance—was not adjudicated by the judge and is not supported by the evidence in the record.

Moreover, it disregards the wording of the relevant contractual provisions as well as the context in which the undertaking was made where, as noted by the trial judge, it was “the Ministry’s contention that it owned the trademark because the word HALLOUMI was distinctive in Canada of the cheese produced under the Ministry’s supervision in Cyprus”. [1] [ 7 ] Ultimately, the appellant has not shown a palpable and overriding error in the trial judge’s findings of fact that led him to conclude that the word “Haloumi” is used descriptively on the packaging for cheese sold and/or marketed by the respondents and that the latter did not breach their contractual undertakings.

Moreover, as regards the trial judge’s

interpretation of the contractual provisions and his

interpretation of the scope of the Federal Court of Appeal judgment, the appellant has not proved a reviewable error that would warrant this Court’s intervention. FOR THESE REASONS, THE COURT: [ 8 ] DISMISSES the appeal, with legal costs. FRANÇOIS DOYON, J.A. GENEVIÈVE MARCOTTE, J.A. PATRICK HEALY, J.A.