Trademark Appeals: Stays and Service Requirements

A recent blog noted that a failure to obtain a stay of a Federal Court judgment when an appeal to the Federal Court of Appeal is sought, means the Registrar of Trademarks will act in accordance with the Federal Court judgment, which may be contrary to what the appellant is seeking before the Court of Appeal.

A recent Practice Notice from the Trademarks Office clarifies the issue. Section 50 of the Federal Courts Act allows the Federal Court and the Federal Court of Appeal to stay proceedings. If there is an appeal from the Federal Court to the Federal Court of Appeal, the Registrar, absent a stay, must act in accordance with the judgment of the Federal Court.

There is, however, an exception in the case of opposition and section 45 procedings. If there is an appeal to the Federal Court of Appeal the Registrar will not treat the Federal Court decision as final because it must, pursuant to sections 39(1) and 45(5) of the Trade-marks Act, act in accordance with “the final judgment given in the appeal”.

Thus, where there is an appeal from the Federal Court to the Federal Court of Appeal, it is important to consider whether an opposition or section 45 proceeding is at issue, and if not, obtain the requisite stay.

The Practice Notice also provides guidance regarding the service of court documents on the Registrar.

Where a decision of the Registrar is appealed under section 56 of the Trade-marks Act or where judicial review of a Registrar’s decision is sought, the Registrar must be served personally. This is best effected by leaving the document with an employee of the Executive Office who is authorized to accept service.

All Notices of Appeal filed with the Federal Court must also be filed with the Registrar. These may be transmitted by any means, but failure to comply with sections 56(1), (2) and (3) of the Act, including the filing requirement, may render the appeal a nullity.

Trademark Statistics: The Year in Review

The Canadian Intellectual Property Office released its 2006-7 Annual Report earlier today. The report contains some interesting information:

  • over 45,000 applications were filed in the twelve month period ending March 31, 2007, reflecting a 4% increase over the previous year
  • Canada remains the most common country of applicant origin, with nearly 20,000 applications filed; the US placed second, with over 14,700 applications, while applicants from Germany, France and the United Kingdom rounded out the top 5
  • 90% of Canadian trade-mark applications were filed online; prior to 2004, only 20% of applicants were using the e-filing system
  • despite the addition of several new Examiners, turn-around times remained the same as in the previous year, and an examination backlog of approximately 20,000 files remains to be addressed
  • the number of Statements of Oppositions filed continued to decline, with just over 1100 filings; however, the number of Section 45 (cancellation) notices issued increased slightly over the previous year.

The full report is available here.

Canadian Intellectual Property Office News

Good news from the Canadian Intellectual Property Office: in an announcement posted to their website yesterday, CIPO advised that it will soon be making information concerning the status of both Section 45 proceedings and Opposition proceedings available online.

Currently, CIPO’s database provides limited information to the public respecting Trademark Opposition proceedings, setting out only the names of the Opponent and their counsel, and the date the Opposition was filed. The situation for Section 45 (or summary cancellation) proceedings is worse for those, the database indicates only the name of the Section 45 Requestor and their counsel, and does not even indicate when the Section 45 request was issued. In neither case is information about the current stage of the proceeding available through the database; for a member of the public to get such information they would have to perform a manual review of the physical file located at CIPO’s office in Gatineau, Quebec.

The addition of further information relating to these proceedings will permit interested third parties to make better informed decisions concerning the mark(s) at issue, allowing them to consider the impact such proceedings may have on their own interests. While CIPO has a long way to go before matching the standards set by the USPTO Trademark Office and its excellent Trademark Document Retrieval system, this step is an important one and CIPO should be applauded.

Amendment to Trade-marks Act: the Red Crystal Comes to Canada

Though normally a somewhat staid corner of trademark law, prohibited marks have garnered a lot of attention of late particularly as a result of the Olympic and Paralympic Marks Act, which we commented on in several previous posts. However, the Trade-marks Act itself has been recently amended to add a new entrant to the list of prohibited marks.

Bill C-61, titled “An Act to amend the Geneva Conventions Act, An Act to incorporate the Canadian Red Cross Society and the Trade-marks Act” came into force on January 31, 2008. This Act was introduced to account for recent changes in the Red Cross Movement the term used to refer to work performed by the International Federation of the Red Cross and Red Crescent Societies and the International Committee of the Red Cross.

Over the last decade, efforts have been underway to find a single symbol devoid of any religious, political, ethnic or other connotation that could be used by all nations engaged in the Movement’s humanitarian work. The Red Crystal is the result, and the Trade-marks Act has now been amended to add the Red Crystal to the list of marks whose adoption is prohibited by section 9. The Red Crystal joins the Red Cross, the Red Crescent and the now little-used Red Lion and Sun in the list of emblems that have been used by a variety of nations in humanitarian efforts over the last several centuries, and that are now protected by section 9 of the Act.

The addition of this mark to the prohibited list will be sure to catch the eye of video-game developers several of whom raised the ire of the Canadian Red Cross years ago by depicting the familiar Red Cross emblem in their games. But gamers aren’t the only ones attracting legal trouble from use of the Red Cross emblem: in 2007 the American arm of the Movement found itself in hot water when it was sued by Johnson & Johnson over its licensing of the emblem to for-profit companies to be used on commercial products, notwithstanding that the licensing revenues it received were directed toward humanitarian aid projects.

We’ll keep you posted on developments related to the Red Crystal.

Canadian Trademark Registrations Expunged

Following up on a case we first told you about in March 2007, Canada’s Federal Court of Appeal recently delivered its judgement in the case of Cheap Tickets and Travel Inc. v. Inc.

Disputes between these parties have been underway for some time. In 2002, Cheap Tickets obtained Canadian trademark registrations for CHEAP TICKETS and CHEAP TICKETS AND TRAVEL & DESIGN for use in association with a range of travel agency and other ticketing-related services, claiming use in Canada dating back to July 1997. Emall obtained the domain name in 1999.

In 2003, Cheap Tickets tried to use the CDRP to stop Emall from using the domain. This effort failed, so in late 2004, Cheap Tickets took to the courts, commencing a trademark infringement action against Emall in the Supreme Court of British Columbia.

Likely tired of Cheap Tickets’ attacks, Emall commenced an action in the Federal Court of Canada to expunge Cheap Tickets’ trade-marks. And the Federal Court obliged: concluding that the marks were clearly descriptive of the character or quality of the services in association with which they were registered, the Court expunged Cheap Tickets’ trademarks.

On appeal to the FCA, Cheap Tickets made a variety of arguments: that their marks were not “clearly descriptive” but rather “merely suggestive;” that their marks had acquired distinctiveness at the time applications to register them were filed; that the Design mark contained unique and distinct visual elements, entitling it to remain on the Register.

Again, all of Cheap Tickets arguments failed. The Federal Court concluded that no errors of fact or law could be found in the Trial Division’s judgement; accordingly, Cheap Tickets’ appeal was dismissed.

Beyond serving as another example of the maxim “turnabout is fair play”, there are a couple of important lessons for both trademark owners and advisors arising from this case. For trademark owners, this case is a prime example of the perils of selecting and using trademarks that are strongly suggestive of the products and services offered in association therewith. Such marks, even if secured by a registration, typically enjoy a narrow scope of protection, are highly susceptible to attack, and should be avoided. In addition, if you have already registered trade-marks that “push the limits” of descriptiveness, consider if it is possible to file supporting applications for those marks on the basis of acquired distinctiveness. Had Cheap Tickets done so, or if they had been able to establish acquired distinctiveness at the time of their original filings, they likely would not have lost their registrations.

For advisors: remember that once judgment is rendered and an order made by a court, the Registrar of Trademarks will not tarry in acting upon it, unless a stay is in place. Though it filed an appeal, Cheap Tickets did not seek a stay of the trial judge’s expungement order; accordingly, the Registrar struck Cheap Tickets’ marks from the Registry before the order’s appeal period had even expired. Had a stay been obtained, Cheap Tickets’ registrations would have remained on the Registry through the appeal period, and could have been used to assert claims against third parties while it awaited its hearing before the Federal Court of Appeal.

A Successful Interlocutory Injunction

A recent posting noted how difficult it is to obtain interlocutory injunctions in Canadian trade-mark actions. However, a judge of the Manitoba Court of Queen’s Bench recently concluded that the Plaintiffs in Marlborough Hotel Corporation et al. v. First Canadian Hotels & Entertainment Ltd. et al. were entitled to an interlocutory injuction. The Plaintiffs had since 1959 marketed and advertised a large ballroom at their hotel facilities as the “Skyview Ballroom”. On May 1, 2007, the Defendant, a hotel located one block away, started using the name “Radisson Winnipeg Skyview”.

The judge applied the three-part test in R.J.R. MacDonald Inc. v. Attorney General (Canada) noting also that, according to Apotex Fermentation Inc. v. Novopharm Ltd, a 1994 decision of the Manitoba Court of Appeal, the three factors are not individual hurdles for an applicant to overcome, but are to be viewed as interrelated. 

The judge concluded that there was a serious issue to be tried. Although the Defendants raised numerous arguments regarding the Plaintiffs’ likelihood of success, these were matters for the trial judge to assess.

The judge also found that there would be irreparable harm, noting that there would very likely be confusion, given that the two businesses were one block apart. The judge was also satisfied that it would be difficult for the Plaintiffs to quantify or prove the extent of any damages, both financially and to their goodwill, should the Defendants be allowed to use “Skyview”. Finally, the judge was satisfied that the balance of convenience favoured the Plaintiffs, given that the Plaintiffs were a long-established business and that the Defendants had only started to use the word “Skyview” in May of 2007.

Interlocutory Injunctions in Trademark Cases: A Difficult Test to Meet

Two recent cases, one from the Federal Court and the other from the Federal Court of Appeal, illustrate how difficult it is to meet the test for an interlocutory injunction in a Canadian trademark case.

In CMAC Mortgages Ltd. et al v. Canadian Mortgage Expert Centres Ltd. et al, Lemieux, J. of the Federal Court applied the 3-part test found in the Supreme Court of Canada’s decision in RJR-MacDonald Inc. v. Canada Attorney General (that the applicant for an injunction must demonstrate (1) a serious question to be tried; (2) that the applicant would suffer irreparable harm in the absence of the injunction; and (3) that an assessment of which party would suffer greater harm from the granting or refusal of a remedy favours the applicant.)

The Applicant (Plaintiff), Ontario Mortgage Action Centre Ltd. c.o.b. as OMAC, had been operating a residential mortgage business in Ontario for a number of years and had several trademark registrations. The principal of OMAC had only recently incorporated CMAC Mortgages Ltd. and opened a Calgary office under the latter name.

The Defendant Canadian Mortgage Expert Centres Ltd. c.o.b. CMEC was incorporated shortly after CMAC Mortgages Ltd. and opened two offices, both in Ontario. Thus, CMAC Mortgages Ltd. and the company carrying on business as CMEC operated in different jurisdictions.

There was no evidence of actual confusion regarding CMAC and CMEC. There was, however, some evidence of actual confusion as between OMAC and CMEC, although minimal. Lemieux, J. concluded that there was a serious issue to be tried in respect of confusion and passingoff between OMAC and CMEC, but not between the other Plaintiffs and CMEC since the latter were not operating in the same marketplace.

However, the Plaintiffs had not led sufficient evidence to establish irreparable harm. According to Lemieux J. “the loss of goodwill and the resulting irreparable harm cannot be inferred. It must be established by ‘clear evidence'”. It was noted that the Plaintiffs, rather than focusing on evidence of irreparable harm had attempted to show the defendants were impecunious.

Finally, Lemieux, J. explained that his preliminary assessment of OMAC’s case was that it was weak in terms of confusion since buying mortgage services is not like buying wares off a shelf, given that the buyer of mortgage services will be more discriminating.

In Hyundai Auto Canada v. Cross Canada Auto Body Supply (West) Limited et al the Court of Appeal dismissed the appeal with costs noting that the test for granting an interlocutory injunction had been clearly set out by the Supreme Court of Canada in RJR-MacDonald. The Court of Appeal also agreed with the trial judge that the evidence as to irreparable harm was essentially speculative and there was no demonstration that the harm could not be compensated in damages if the injunction was refused.

It is clear from these cases that interlocutory injunctions are very difficult to obtain. In the absence of clear evidence of irreparable harm that cannot be compensated for in damages, courts will refuse to grant the injunction.