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.

Implementation of Trademarks Act amendments pushed back to 2018

Since the Canadian Government announced massive changes to the Canadian Trademarks Act (the “Act”) in 2014, practitioners and other stakeholders in the trademark space have been anxiously awaiting its implementation.

Unfortunately we are all going to have to wait a little longer.

It is now expected that the amendments to the Act which have been passed but not yet implemented will not be implemented until sometime in 2018. This pushes out the implementation date again, from an original (and optimistic) implementation date of late 2015, and a revised implementation date of  2017, to 2018.

The implementation of the remaining amendments is expected to coincide with the Canadian Intellectual Property Office’s implementation of the Madrid Protocol, the Nice Agreement and the Singapore Treaty.

We will provide further updates here on the timeline for implementation as more information becomes available.

Canadian Intellectual Property Office posts proposed amendments to Trade-marks Regulations

The Canadian Intellectual Property Office has today posted proposed amendments to the Trade-marks Regulations at http://bit.ly/1xCOIEj  The consultation period for these proposed amendments is from October 1 to November 30, 2014.   As quoted in CIPO’s press release:

“The proposed regulatory amendments to the Trade-marks Regulations are required to enable Canada to accede to the Singapore Treaty on the Law of Trademarks, the Protocol relating to the Madrid Agreement concerning the International Registration of Marks and the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.

The new regulations reflect the requirements of the trade-mark treaties and aim to increase legal certainty, streamline and clarify CIPO’s procedures, and align Canada’s trade-mark protection regime with international norms. The proposed amendments also include measures relating to the opposition regime and summary cancellation proceedings.”

 

Cigars and Alcohol: Confusing Trademarks

Tequila Cuervo, S.A.(“Cuervo“) filed an application in the Canadian Intellectual Property Office for the registration of the trademark LAZARO COHIBA based on proposed use in Canada with alcoholic beverages. Empresa Cubano Del Tabaco (“Empresa“), a distributor of tobacco related products that predominately distributes cigars and holds the COHIBA trademark, opposed the application on several grounds, including the likelihood of confusion.

The Trade-marks Opposition Board, in a decision rendered September 30, 2008, rejected all of the grounds of opposition and in doing so placed considerable weight on the fact that Empresa had not established an extensive reputation for its mark.  Also relevant was the differences between the wares of the parties, as well as the channels and trades of the parties. Empresa appealed the Board’s decision to the Federal Court of Canada, submitting new evidence with respect to the above two issues.

On the reputation issue, Empresa submitted expert evidence of Cohiba cigar’s iconic brand status, noting that this brand was featured in television shows, movies and other media forms. This evidence was corroborated by other affidavit evidence establishing that the Cohiba cigar brand had been featured in magazines and other media content that had been circulated throughout Canada. On the distinctiveness issue, expert evidence was tendered to establish that users of tobacco and alcohol often consume both products, and that the use of one involves the use of the other. On this latter issue, new evidence was submitted by Empresa showing that many stores sold both hard alcohol and cigars.

In its October 4, 2013 decision, the Federal Court, in light of this new evidence, reversed the Board’s decision and held that the test for confusion had been met. The Court first noted that Empresa’s cigar sales in Canada were not insignificant and accepted the evidence establishing that the COHIBA cigar brand had an iconic status. On this latter point, the Court noted that “personal ownership or use of the product is not essential to the awareness or knowledge of a trade-mark.”

With respect to the distinctiveness issue, the Court held that the sale of cigars and spirits in many stores across Canada was not particularly persuasive on its own. However, the Court noted that,

[t]he reason why the proximity of cigars and alcohol is important for the analysis only becomes apparent upon examination of the relationship between smoking and alcohol. This is where the [expert evidence] is very helpful.

The Court accorded significant weight to the fact that a smoker subjectively relates alcohol to cigars, and therefore, a “predisposition for confusion” exists. Moving forward, it remains to be seen how far this reasoning can be taken. Does such a predisposition exist with wine and cheese, particularly in those parts of Canada where they are available in the same store?

Thus, the iconic status of COHIBA, coupled with the close relationship between sales of alcohol and tobacco led the Court to conclude that there was confusion.

Bodum: Appeal Court Affirms Trademark Distinctiveness Analysis

An earlier blog commented on the Federal Court’s decision in  Bodum USA, Inc. v. Meyer Housewares Canada Inc.  Bodum commenced an action for infringement, passing off and depreciation of goodwill against Meyer, which counterclaimed for a declaration that Bodum’s registration was invalid.  Bodum’s action was dismissed and the registration expunged.

The Court of Appeal has now affirmed this decision, noting that this is “essentially a distinctiveness case” and quoting statements from the trial decision that “‘French press’ is and was at all relevant times a common name for the type of non-electric coffee making device” and “the registration is invalid because the term was and is in ordinary and bona fide commercial use as a generic term”.

MACDIMSUM: Challenging a Family of Marks

In Cheah v. McDonald’s Corporation, the Federal Court of Canada held that MACDIMSUM is likely to be confusing with the MacDonald’s family of trademarks.  Focusing on the evidence presented, the Court distinguished several earlier cases in which McDonald’s failed to preclude other businesses from using the MC or MAC prefix, including McDonald’s Corporation v. Silcorp Ltd (1989) and McDonald’s Corporation v. Coffee Hut Stores Ltd (1996), where McDonald’s failed to prevent the use of MAC for convenience stores and MCBEAN for a coffee business.  In Cheah, the Applicant, who was self‑represented, did not meet the onus on him to prove the mark was registrable.  It was also important that the application was simply for the word MACDIMSUM and not for that word in any particular type style or in combination with any other word or design.  Since a proposed use application was at issue, the Court stated that it must remain open to the fact that the trademark could potentially be used in any type style, with any combination of words or design, and in any trade environment as may present itself from time to time.

The Applicant failed to present any evidence of actual use and during cross‑examination he acknowledged he had not yet finalized plans regarding use.  McDonald’s’ evidence focused on its family of marks and included affidavits regarding McDonald’s “four score” trademarks, use and advertising in Canada, as well as an expert survey. 

In dismissing the appeal, the Court stated that the evidence presented regarding use or intended use is critical to a decision such as this.  While the respondent McDonald’s Corporation presented considerable evidence to oppose the registration of the word MACDIMSUM, the Applicant presented little probative evidence throughout the proceedings.  The Court also accepted the survey that McDonald’s presented, which involved showing certain members of the public a card bearing the word MACDIMSUM, and others a card bearing the word MAZDIMSUM.  Based on the results, the expert concluded that a statistically significant portion of consumers would identify the McDonald’s as the source of the MACDIMSUM food products.

The Court also found that the Applicant’s evidence of the use of MC and MAC in other jurisdictions was largely hearsay and did not establish dilution in Canada.  Finally, the Court found no merit in the Applicant’s assertion that he was being bullied, noting that the McDonald’s counsel was proper and courteous.  Instead, a hint of the Applicant’s true intention was to be found in a letter in which he suggested the possibility of “a global MACDIMSUM partnership”.

A Clearly Descriptive Engineering Trademark

In the recent case of Continental Teves AG & Co v. Canadian Council of Professional Engineers, the Federal Court of Canada dismissed an appeal of the Trade-mark Opposition Board’s refusal to register a mark.  The original application was brought by Continental Teves, a foreign corporation, to register the words ENGINEERING EXCELLENCE IS OUR HERITAGE for use as a trade-mark in Canada in association with wares, namely brake pads and rotors for land vehicles.  The Canadian Council of Professional Engineers (the “Council”), a national organization of the 12 provincial and territorial associations that license and regulate Canadian engineers, opposed the application.  It is the Council’s policy to oppose trademarks which consist of or include the term “engineering” in order to both protect the integrity of the titles of Canadian engineering professionals and to protect the public.

At issue on the appeal was whether the Hearing Officer erred in finding that the mark:

1. Was not clearly descriptive of the character or quality of the wares, based on section 12(1)(b) of the Trade-Marks Act;

2. Was deceptively misdescriptive of the character or quality of the wares, based on section 12(1)(b) of the Act; and

3. Was not distinctive of the wares based on the section 2 definition of “distinctive”.

Regarding the section 12(1)(b) prohibition on registering “clearly descriptive” and “deceptively misdescriptive” marks, the Court came to the same result, that the mark was not registrable, although for opposite reasons.  A mark is not registrable if it is either “clearly descriptive” or “deceptively misdescriptive”.  Whereas the Hearing Officer found the mark to be not clearly descriptive yet deceptively misdescriptive of the persons employed in the production of the wares, the Court found the converse – that the mark was “clearly descriptive” yet not “deceptively misdescriptive”.

Informing this reversal was the additional affidavit evidence from one of Continental Teves’ vice presidents, stating that the company employs a substantial number of engineers in the production of the wares in question and had done so for decades.  However, the Court also noted that nothing in the evidence established whether Canadian engineers were involved although it appeared that none were.  This additional evidence was enough to change the mark’s characterisation from “not clearly descriptive” to “clearly descriptive”  since it established that engineers were involved and the mark was therefore a clear description of the manner in which the wares are designed and produced.  Nothing in the evidence established whether the engineers involved were Canadian, but this did not matter since there was no evidence indicating or suggesting that the average consumer, on encountering the mark, would believe the wares were designed or produced by Canadian engineers.  Thus, the mark was not deceptively misdescriptive according to the Court.  The decision appears to be at odds with the earlier decision in Canadian Council of Professional Engineers v. Kelly Properties LLC, but in that case the Applicant was seeking to use KELLY ENGINEERING RESOURCES in association with employment services, which implied that Canadian engineers were involved since the services were being offered in Canada and only a licensed Canadian engineer could offer such services.

The Court came to the same result as the Hearing Officer on the finding of a lack of distinctiveness, noting that distinctiveness is “the very essence of a trademark” since it allows a consumer to identify the source of goods.  Continental Teves failed to meet its onus to prove the mark was distinctive of the wares in the face of the Council’s evidence showing the use of the phrase “engineering excellence” in Canada and abroad in multiple contexts.

Finally, the Court noted the Council was “zealous” in protecting the exclusivity of the words “engineer” and “engineering”, although this was not an endorsement or disapproval of the approach but only an observation regarding the policy.