In no mood for charity: Federal Court confirms that charities are not necessarily public authorities

The Federal Court of Canada recently confirmed in Starbucks (HK) Limited v. Trinity Television Inc., 2016 FC 790 (the “Decision”) that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority for the purpose of obtaining an official mark.

(For a discussion about official marks and their interplay with regular trade-marks, please see this previous post on our blog.)

The facts leading up to the Decision are straightforward: in 2013, Starbucks (HK) Limited (“Starbucks”) filed an application to register the trade-mark NOW TV & Design.  During prosecution, an official mark for NOWTV, owned by Trinity Television Inc. (“Trinity”), was cited against the Starbucks application.  In response, Starbucks commenced a judicial review application against the Registrar’s decision – made in June 2001 – to give public notice of the adoption and use of NOWTV as an official mark.

In the result, the Court quashed the Registrar’s decision to grant NOWTV as an official mark to Trinity, clearing the path for Starbucks to move ahead with its application.  Of particular interest were the following points made by the Court:

– the law is now clear that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority; and

– it would be patently unfair and completely contrary to the interest of justice if an entity that is not a public authority was permitted to enjoy the exceptional rights conferred on the holder of an official mark.

As a potential point of distinction when it comes to the precedential value of this case, it is noteworthy that Trinity did not participate in the judicial review application; indeed, the Court was advised by counsel for Starbucks that a former president and director of Trinity had advised that Trinity had sold its business to Rogers in 2005.  That being said, given how easily the Court arrived at the conclusion that charitable status does not necessarily equate to being a public authority, it seems unlikely that Trinity’s participation would have changed the result.

From a practical perspective, the Decision serves as a timely reminder to trade-mark applicants that, while robust, official marks can nevertheless be challenged and removed under the right circumstances.  Where an official mark has been cited during prosecution of a regular trade-mark application, it is important to carefully scrutinize the official mark, in order to ascertain any potential vulnerabilities that could lead to its removal.

On the other hand, the Decision is also a reminder to charities holding official marks that those official marks may potentially be at risk, if challenged via judicial review.  To mitigate that risk, those charities ought to consider filing regular applications to register their trade-marks.

Canada’s Federal Court of Appeal Provides Welcome Guidance on Geographically Descriptive Trademarks

Canada’s Federal Court of Appeal (the “Court of Appeal”) has recently had the opportunity to clarify the test for  registrability of geographically descriptive trademarks in two separate decisions. The most recent of these is the decision in MC Imports Inc. v. AFOD Ltd., 2016 FCA 60.  In the proceedings underlying the appeal, MC Imports Inc. (“MC Imports”) brought an action for infringement against AFOD Ltd. (“AFOD”) on the basis that AFOD’s use of the words “Lingayen Style”, which appeared on AFOD’s imported Philippines food products in a relatively small font, infringed MC Imports’ registered trade-mark LINGAYEN. MC Imports’ registration issued in 2003 and covered Filipino food products, including fish sauce and fish paste. Invoking the old adage that the best defence is a good offence, AFOD counterclaimed and sought to invalidate MC Imports’ LINGAYEN registration on the basis that it was either clearly descriptive or deceptively misdescriptive of the place of origin of the claimed goods and therefore not registrable under the Trade-marks Act, and also on the basis that it was not distinctive of MC Imports as the source of the claimed goods.

The lower court (the “Federal Court”) found that LINGAYEN was the name of a geographical location in the Philippines, known for bagoong products; that the LINGAYEN brand goods of MC Imports originated from Lingayen; and that the ordinary consumers of those products were Canadians of Filipino or South East Asian origin.  The Federal Court ruled in AFOD’s favour and declared the registration for LINGAYEN invalid on the basis that it is clearly descriptive of the place of origin of the goods.  However, the Federal Court declined to settle the issue of whether the perspective of the “ordinary consumer” is relevant to a finding that a trade-mark is clearly descriptive of place of origin on the basis that, in this case, the end result would have been the same. On the issue of distinctiveness, the Federal Court also found in AFOD’s favour and held that the mark had not acquired sufficient distinctiveness in Canada through long term advertising and use by MC Imports. Accordingly, the Federal Court ordered that the LINGAYEN registration be struck from the Register.

On appeal, the key issues reviewed by the Court of Appeal were the appropriate legal test for assessing a finding of clear descriptiveness of a place of origin and the definition of the relevant “ordinary consumer”.  In dismissing the appeal of MC Imports and upholding the Federal Court’s decision, the Court of Appeal found that the perspective of the ordinary Canadian consumer is not always relevant for a finding that a mark is clearly descriptive of its place of origin. The Court of Appeal went on to clarify the legal test to be followed when assessing whether a trade-mark is clearly descriptive of place of origin, setting out a three-step assessment:

(1) whether the trade-mark is the name of a geographic place. The Court of Appeal stated that if the primary meaning of the trade-mark is as a geographic place, it was not relevant whether the place was known to Canadian consumers.  If there is more than one meaning (other than geographic) attached to the trade-mark, then the perception of the relevant “ordinary consumer” comes into play in determining the primary meaning of the trade-mark;

(2) whether the goods or services associated with the trade-mark originate from that geographic place. If the goods/services do not originate from that geographic place, the analysis switches to whether the trade-mark is deceptively misdescriptive; and

(3) an assessment of the trade-mark owner’s claims of use, if any. The Court of Appeal concluded that since registration of a descriptive trade-mark can be obtained under Section12(2) of the Trade-marks Act if the trade-mark had become distinctive at the time of filing the application for registration, the perception of the relevant “ordinary consumer” becomes significant at this stage. The Court of Appeal noted that MC Imports’ evidence of use in Canada, although spanning a long period of time (since 1975), was insufficient to support a finding of acquired distinctiveness.

The Court of Appeal agreed with the Federal Court that the ordinary consumer whose perspective should be considered is not the general public in Canada, but the person who would ordinarily buy the products or services associated with the trade-mark. In this case, the actual consumer would have been Canadians of Filipino or South East Asian descent.

The Court of Appeal found that MC Imports’ registration for LINGAYEN was invalid and not distinctive, and dismissed the appeal.  In doing so, the Court of Appeal pointed out that the name of a geographic place “should remain open to all producers of goods and services to describe the origin of what they are selling, even if the ordinary consumer might not be previously familiar with that place”.

This decision comes close on the heels of Lum v. Dr. Coby Cragg Inc., 2015 FCA 293, another Court of Appeal decision on the issue of clear descriptiveness of place of origin in which the registration for OCEAN PARK – registered in association with dental services performed in the Ocean Park neighborhood in Surrey, BC – was similarly invalidated.  While the OCEAN PARK decision was not referred to in the LINGAYEN decision, the analysis and conclusions were similar and serve to consolidate the Court of Appeal’s approach in considering registrability of trade-marks that refer to a geographic place which is the place of origin of the goods or services associated with the trade-mark.

 

 

 

Save the Date: the Importance of the Date of First Use in Canadian Trade-mark Applications (for now)

A recent decision of the Canadian Trade-marks Opposition Board, Constellation Brands Québec Inc. c Sociedad Vinícola Miguel Torres, S.A., 2016 TMOB 4 (“Miguel Torres”), serves as a reminder of the importance of stating an accurate and supportable date of first use, when claiming use as a basis for registration in Canada.

In Miguel Torres, the Applicant filed an application to register the trade-mark HEMISFERIO (the “Mark”) for “wines”, claiming use in Canada since at least as early as October 28, 2011.  As one of its grounds of opposition, the Opponent alleged that the Applicant had not used the Mark in Canada as of the claimed date of first use.

As support for its claimed date of first use, the key piece of evidence relied upon by the Applicant was an invoice dated October 28, 2011, which purportedly corroborated the date of first use asserted by the Applicant’s affiant.  However, the Opposition Board instead agreed with the Opponent’s submission that while the invoice was dated October 28, 2011 and goods were shipped to Canada from Chile on that date, the approximate date of arrival in Canada of those goods was not until January 26, 2012.

Accordingly, because transfer of the property in or possession of the wine bearing the Mark from the Applicant to its Canadian distributors did not take place in Canada until after October 28, 2011, there was no “use” of the Mark in Canada, within the meaning of Section 4(1) of the Trade-marks Act (the “Act”), as of the date of first use claimed in the application.  The application was therefore refused.

While we understand that there will no longer be a need to claim a date of first use in trade-mark applications once the Canadian trade-mark regime changes (likely in 2018), for the time being, trade-mark applicants should strive to claim a date of first use that is accurate and, where possible, supported by documentary evidence.

Location Matters: The Perils of Geographic Names as Trade-marks

When choosing a trade or business name it may seem like a good idea to incorporate the location of your business into the name. There are benefits: it is helpful for marketing, it gives your audience an idea of where your business is and who your market is, it can help establish your business in a neighborhood, and it can help you build a brand based on community and locality.

However, using the location of your business in your trade or business name can cause difficulties when it comes to registering that name as a trade-mark. Under section 12(1) (b) of the Trade-marks Act, a trade-mark is not registerable if it is clearly descriptive or deceptively misdescriptive of the place of origin of the goods or services with which the trade-mark is used, unless that trade-mark has acquired distinctiveness through its use.

The Federal Court of Appeal recently reviewed section 12(1)(b), and considered the issue of whether a service provider can register, as a trade-mark, the name of a geographic location, purely in relation to its services.

In 2012, a dental practice owned by Dr. Cragg applied to register the trade-mark OCEAN PARK (the “Mark”) in association with dental services based on use since as early as 2000. The Mark was registered for use in association with “dental clinics” in 2013.

Prior to Dr. Cragg applying to register the Mark, another dentist, Dr. Lum purchased an existing dental practice a block away from Dr. Cragg’s and changed the name of the practice to “Ocean Park Dental Group”. Then, after moving the practice, Dr. Lum changed the name to “Ocean Park Village Dental”, and advertised and displayed signage using the trade-name “Village Dental in Ocean Park”.

In early 2014 Dr. Cragg brought an action against Dr. Lum for infringement of the Mark. In response, Dr. Lum brought an action seeking to invalidate the Mark on the grounds that it was not registerable under section 12(1)(b) of the Trade-marks Act.

In the court below, the trial judge held that in order to prove that a trade-mark is not registerable under section 12(1)(b), a plaintiff has to show (1) that a trade-mark refers to a geographic location; and (2) that the location was indigenous to the services in question. Under this analysis, in order for the Mark to be non-registerable, a reasonable person would have equate the geographic location “Ocean Park” with dental services.  Based on the evidence, the trial judge found that this was not the case, and the court dismissed the action to invalidate the Mark.

However, the Court of Appeal held that this was not the correct analysis.  Instead, the analysis under section 12(1)(b) is to focus on:

–          the type of services involved;

–          the average consumers to whom the services are offered; and

–          the character of the geographic location.

Under this analysis, if the trade-mark is the name of the geographic location where the services or goods are provided, then the trade-mark is descriptive within the meaning of 12(1)(b) and non-registerable because the trade-mark is descriptive of the origin of the services or goods.

The Court of Appeal reminded us that the reason why trade-marks that are descriptive of geographic locations are not registerable or protectable is to prevent a single service provider from monopolizing the name of a geographic location, so as to prevent other service providers from using that name to describe their own services.

On the issue of acquired distinctiveness, the problem identified by the Court of Appeal was that while geographic locations can be used in business names and for other purposes, they often do not meet the key requirement of a registerable trade-mark: distinctiveness. In this case, the Mark as registered, OCEAN PARK, was never used by itself in association with dental services. It was always used in the context of the name Ocean Park Dental. In this case, upon hearing “Ocean Park”, consumers would not think about Dr. Cragg’s dental services; as such, it could not be said that the Mark had acquired distinctiveness. Therefore, the Mark was declared invalid and struck from the Trade-mark Register.

This case warns businesses to be careful when choosing geographic locations as business or trade names which they may wish to register as a trade-mark. The use of a geographic location within the context of a broader trade-mark may be permissible. However, it is unlikely that a business can expect to register a trade-mark consisting purely of a geographic location, unless that business and the trade-mark have acquired significant distinctiveness through lengthy and extensive advertising and use.

Back to school – Keyword advertising 101

In the 21st century, when advertising is frequently conducted via the Internet, the use of keyword advertising has become an increasingly contentious point of trade-mark law.

In short, keyword advertising is a form of online advertising in which a business selects words or phrases (the “keywords”) that trigger its advertisements to appear when the user of a search engine performs a search using those keywords.  The advertisements typically appear alongside the organic search results produced by the search engine.

Where multiple companies use the same keywords to trigger advertisements, the search engine will use an algorithm to select which company’s advertisements actually appear and in what order, based at least in part on the amount each business is willing to pay for the advertisement.  The difficulty from a trade-mark perspective is that businesses frequently choose competitors’ trade-marks as keywords.

There has been little development in Canadian jurisprudence in the area since the first Canadian decision on keyword advertising in 2010.  Last week, the Supreme Court of British Columbia, writing through Justice Affleck, tackled the issue head-on in Vancouver Community v. Vancouver Career (Burnaby) Inc., 2015 BCSC 1470.

In this case, the Vancouver Community College (“Community”) brought a passing off action against the Vancouver Career College (“Career”) in which it alleged, among other claims, that Career, principally through keyword advertising, misrepresented its educational services as those of Community.  As part of its claims, Community objected to the use of the acronym VCC by Career as part of the latter’s keyword advertising campaign, notwithstanding Community’s unregistered, common law trade-mark rights in VCC.  The evidence showed that Community used VCC as a trade-mark from 1965 until 1990, when it largely abandoned the use of VCC, until 2013, when significant use resumed.

Ultimately, Justice Affleck concluded that there was no passing off by Career, since Community failed to meet the first part of the test for passing off, in that it did not have sufficient goodwill and acquired distinctiveness in its unregistered VCC trade-mark to impart a secondary meaning to consumers.  However, the trial judge went on to discuss the second part of the test, namely, whether Career had caused confusion by misrepresenting its services as those of Community.  In doing so, Justice Affleck made the following comments of interest:

-on bidding by advertisers, and the operation and process of searching using search engines – “a bid on a keyword may send a searcher to the bidder’s landing page, but the process of the search is controlled by the searcher and the search engine, not by the advertiser”.

-on when a first impression is made on the consumer – consistent with the decision in Insurance Corporation of British Columbia v. Stainton Ventures Ltd., 2014 BCCA 296 (the “ICBC Decision”), “the “first impression” cannot arise on a [search] at an earlier time than when the searcher reaches a website […] the “relevant consumer” will “understand that it is necessary to view a website to determine whose site it is” [citing the ICBC Decision].  In my opinion that is the point during a search when the relevant first impression is made”.

-on bidding on another company’s trade-mark as a keyword – “to award damages to the plaintiff or to enjoin the defendant from certain conduct because the defendant bids on the plaintiff’s name for the purposes of keyword advertising would be to disadvantage the defendant in a way that other online advertisers are not”.

In the result, Justice Affleck concluded that Career did not cause confusion by taking advantage of the keyword advertising service offered by Google.

Other than the issue of keyword advertising, which we expect is the point that will garner the most interest and commentary from practitioners, the decision is interesting for:

-Justice Affleck’s reliance on the ICBC Decision, as referenced above, which sparked its own interest for its assessment of when a “first impression” is made upon Internet users;

-Justice Affleck’s disposition of the official mark issue raised by Community in essentially 3 brief paragraphs without going into detail, such as whether Career actually used VCC as a trade-mark prior to publication of Community’s official mark for VCC;

-Justice Affleck’s finding that Community’s VCC mark enjoys “goodwill in the educational services it provides, but [has] not achieved a “secondary meaning” in the marketplace”, which contrasts with the comments of the Trade-marks Opposition Board (the “Board”) with respect to Community’s VCC mark in an earlier decision in which the Board rejected Career’s application to register the trade-mark VCCollege.ca; and

-Justice Affleck’s observation that Community’s action for passing off was an attempt to handicap Career, and was “motivated by a concern that its own inability to invest the necessary funds and expertise to create a sophisticated online advertising program leaves it at a competitive disadvantage in the marketplace in comparison with [Career]”.

Community has until September 19, 2015 to appeal Justice Affleck’s decision to the British Columbia Court of Appeal.

Just in time for the Olympics – a Race to the Trademark Podium

As we approach the opening ceremonies of the 2014 Olympic Winter Games in Sochi, the Canadian Olympic Committee (COC) has launched a lawsuit against outdoor apparel maker The North Face in the British Columbia Supreme Court, over allegations that it is infringing on Olympic trademarks through ambush marketing techniques.

The COC is seeking an injunction against The North Face and unspecified damages.  Readers of this blog will recall that the 2010 Winter Olympic Games in Vancouver/Whistler featured many similar skirmishes and special legislation enacted to assist the COC in its ongoing battle against ambush marketing.

As reported in the Globe and Mail, the North Face is not a sponsor of the Olympic games, but introduced a new line of clothing in November 2013.  The clothing line, originally launched as the Villagewear Collection, was renamed as the International Collection in response to complaints by the COC. 

The clothing line, which includes jackets, toques and bags, is decorated with the colours and flags of various countries. This includes items bearing the Canadian flag which feature the colours red and white.  Some items featured a patch with the symbol “RU 14” which, according to the COC, is a reference to the Winter Olympic games in Sochi, Russia.  Other merchandise showed a world map with a red star where Sochi is located.  A t-shirt featured the date of the opening ceremonies for the Games.

.CA Domain Names Held To Be Personal Property

A recent Ontario Superior Court of Justice decision (Court File No. CV-13-480391) has held that .CA domain names are personal property and as such are subject to the rules that govern any other type of personal property, including those against wrongful conversion.  Perhaps more importantly, the case appears to stand for the proposition that title in .CA domain names exists independently of the registration of those domain names.

17 .CA domain names were in issue,  including mold.ca and mould.ca.  All were registered by Mr. Sullivan in his own name for the benefit of a company that he co-founded with Mr. Dalrymple, called Mold.Ca Inc.  (Mold.Ca Inc.)  The business of Mold.Ca Inc., not surprisingly, involves  mold inspection and removal services in the Greater Toronto area.  Sullivan purchased the domain names using the company’s credit card but listed himself as the Registrant of all of the domain names, rather than Mold.Ca Inc., unbeknownst to Dalrymple. 

Sullivan parted ways with Dalrymple and Mold.Ca Inc. a year later, while Mold.Ca Inc. continued to carry on its business, as before.  Unbeknownst to Dalrymple, Sullivan retained the domain name registrations and the passwords for the domain name registrations and then subsequently transferred the domain name registrations to a third party (Romelus).   Once Dalrymple found out about the above events, he commenced a Canadian Internet Registration Authority (CIRA) Dispute Resolution Proceeding (CDRP) against Romelus.  The CDRP proceeding were unsuccessful because there was no evidence that the domain names had been registered by Romelus in bad faith (they hadn’t been), nor was there evidence that they were being used for other than legitimate purposes by Romelus.

Following the failed CDRP proceeding, Romelus transferred the domain names back to Sullivan and Sullivan began using them in a competing business to that of Mold.Ca Inc.  Undaunted by its loss in the CDRP, this turn of events led to Mold.Ca Inc. to commence proceedings in the Ontario Superior Court of Justice.  Finding in favour of Mold.Ca Inc., the Court held that “the issue is a simple matter of property law”, whereby title to the domain names belongs to the company, which had been wrongly converted by Sullivan.  The Court therefore ordered that all of the domain names, including all administrative information and passwords, be transferred to Mold.Ca Inc.