Trademark Evidentiary Issues / Colour as a Trademark

JTI Macdonald TM Corp. v. Imperial Tobacco Products Limited, a recent decision of the Federal Court, includes interesting findings regarding the introduction of additional evidence on appeals, colour constituting a trademark rather than a distinguishing guise and the evidence necessary to establish non-distinctiveness.

Imperial Tobacco applied to register “the colour orange applied to the visible surface of the packaging as shown in the attached drawing”, namely a drawing of a cigarette package.  JTI-Macdonald opposed the application and, being unsuccessful before the Opposition Board, appealed to the Federal Court.  The Federal Court agreed with the Board and rejected the various grounds of opposition.

The Court applied a standard of reasonableness, rather than correctness, when considering the appeal, given that the issues were mixed fact and law and within the expertise of the Board.  On an appeal from the Opposition Board a party is entitled to introduce new evidence and if that evidence would have “materially affected” the Board’s findings, the standard of review is one of correctness.  However, in this case, the Court concluded that the additional evidence that JTI-Macdonald sought to introduce merely provided additional examples of products rejected by the Board in its analysis of distinctiveness and therefore would not have affected the Board’s decision. 

The Court also considered the issue whether the applied for colour formed part of a mode of wrapping or packaging so as to constitute a distinguishing guise.  The Court noted that what was applied for was the colour orange applied to the packaging.  The colour was claimed separately and was not just an element of the packaging. Thus, the Board reasonably concluded that the colour was not part of the wrapping or packaging and could be claimed alone as a trademark.

With regards to the evidence necessary to establish distinctiveness, the Court noted that the relevant date for establishing a lack of distinctiveness is the date of the filing of the opposition.  Some of JTI-Macdonald’s evidence was from the period prior to the date when the opposition was filed and was therefore not probative.  As well, a number of the products relied on by JTI-Macdonald to establish non-distinctiveness either lacked sales data or had very low sales figures and did not assist.

In the end none of the grounds of opposition were accepted by the Board or the Court and the trademark was allowed to proceed to allowance.

A Professional Designation Can Be A Certification Mark: Canada’s Federal Court

In a decision rendered earlier this year, Ontario Dental Assistants Association v. Canadian Dental Association, the Federal Court of Canada held that a professional designation could function as a certification mark, although not  in the case at hand.

The case was an appeal from a decision of the Trademarks Opposition Board (TMOB) allowing the Canadian Dental Association’s opposition to the registration of the certification mark “CDA”.  The Ontario Dental Assistants Association (ODAA) had applied to register the certification mark “CDA” in association with dental assisting services, and more particularly to denote a dental assistant that possessed specific qualifications as approved by the ODAA.  The ODAA alleged use in Canada since at least as early as 1965.

The TMOB denied the registration of “CDA” as a certification mark on the basis that a professional designation could not function as a certification mark and consequently the acronym “CDA” could not be said to have been used as a certification mark from the time claimed by ODAA in its application.  The TMOB also held that the certification mark “CDA” was not distinctive enough to be registered, given its use by the Canadian Dental Association as an acronym to refer to itself.

On appeal, the Federal Court focused on paragraph (c) of the definition of “certification mark” in section 2 of the Trade-Marks Act: “means a mark that is used for the purpose of distinguishing or so as to distinguish wares or services that are of a defined standard with respect to… (c) the class of persons by whom the wares have been produced or the services are performed… from wares or services that are not of that defined standard.”

The Court held that the definition must be viewed in the context of the Act as a whole and listed the criteria a certification mark must meet, namely: not be clearly descriptive or deceptively misdescriptive of the wares or services; be distinctive; not be used by the owner, but only by authorized licensees; not be confusing with a registered or previously applied for trade-mark or trade name; and be used in accordance with section 4 of the Act which includes, with respect to services, use or display in the advertising of the services.  The Court disagreed with a 1988 Opposition Board decision, Life Underwriters Association of Canada v. Provincial Association of Quebec Life Underwriters, which suggested that a professional designation could never serve as a valid certification mark, and found that there is nothing in the Act to preclude a valid certification mark from being registered for a professional designation, so long as the mark satisfies the listed criteria.

Despite this finding, the Court dismissed the ODAA’s appeal on the grounds that the ODAA had not established use of the acronym “CDA” as a certification mark since as early as 1965.  Documents issued by the ODAA to dental assistants did not constitute use by licensees or certified users and name tags evidenced use by dental assistants to show their membership in the association, but not to distinguish the services performed.  Moreover, the mark was not distinctive given its use by the Canadian Dental Association.

Thus, while the ODAA was not successful, it is now clear that a professional designation could constitute a certification mark, if the criteria are met.

Trademark Interlocutory Injunction Denied

A recent decision of the Saskatchewan Court of Appeal, setting aside the interlocutory injunction granted by the Chambers judge, illustrates how difficult it is to obtain an interlocutory injunction absent convincing evidence that satisfies the three part test for an interlocutory injunction.  In Kulyk v. Wildman (Weight Loss Forever Consulting), the Saskatchewan Court of Queen’s Bench granted the plaintiff an interlocutory injunction precluding the defendant from using or carrying on business under the plaintiff’s alleged business name and trademark, “Global Healthcare Connections” and directing the defendant to remove all references to the plaintiff’s mark on social media sources.  In assessing the plaintiff’s application, the Chambers judge looked to Potash Corp. of Saskatchewan Inc. v. Mosaic Potash Esterhazy Limited Partnership which set out the well‑established test for an interlocutory injunction:  

(1) the strength of the plaintiff’s case;

(2) the presence of a meaningful risk of irreparable harm if the injunction is not granted; and,

(3) whether the balance of convenience favours the granting of the injunction. 

The Court of Appeal allowed the appeal and held that the plaintiff’s application for injunctive relief was based on the common law tort of passing off, which in turn, required evidence of goodwill, deception of the public due to misrepresentation, and actual or potential damage to the plaintiff.  The Court stated that the plaintiff’s case was weak because she failed to put forth any evidence to establish the existence of goodwill associated with the name Global Healthcare Connections.  The plaintiff’s affidavit referred to various steps she had taken to launch her business, but it also stated that she had had difficulty launching her business because of the defendant’s actions.  Thus, there was no evidence that the plaintiff or her services were known in the market.

The Court found it unnecessary to assess the remaining elements of the common law tort, although it did comment on these.  With respect to the element of irreparable harm, the Court disagreed with the Chambers judge’s finding that the plaintiff had suffered loss of business, finding instead, that the similarity between the names used by the parties would likely result in a benefit rather than harm to the plaintiff’s business.  Noting that a balance of convenience analysis could be “compendious”, the Court was satisfied that the balance of convenience also favoured the defendant, given the weakness of the plaintiff’s case and given that irreparable harm favoured the defendant.  Thus, the Chambers judge’s decision could not stand.

No Trademark Monopoly: Red Horse / Black Horse

Red Horse Black Horse

In January 2013 the Federal Court considered whether an ordinary beer drinking consumer, on hearing the words RED HORSE, would likely think that RED HORSE must be a beer made by the same company that makes BLACK HORSE.  The Court’s response: “unlikely”.

This decision was reached in San Miguel Brewing International Ltd v. Molson Canada, in which the Federal Court allowed an appeal by San Miguel from the refusal of the Trade-Mark Opposition Board to register San Miguel’s RED HORSE trademark and horse head design.

In the proceedings before the Board, the Member analysed the surrounding circumstances to determine whether the RED HORSE mark was confusing with the  BLACK HORSE trademark in the minds of the relevant consumer.  The Member found that the RED HORSE mark had noteworthy design features, but the word HORSE in the mark rendered it too similar to the BLACK HORSE mark.  Accordingly, the Board denied registration on the basis of confusion.

On appeal, Justice Phelan of the Federal Court applied the well-established test set out in the Supreme Court of Canada decision of Masterpiece  Inc. v. Alavida Lifestyles Inc., emphasizing that one has to: (1) look at the mark as a whole and not tease out each portion of the mark; (2) approach confusion on the basis of first impression, from the perspective of the average person who goes into the market; and (3) use common sense.  The average consumer being the “‘ordinary harried purchaser’ – neither the ‘careful diligent purchaser’ nor the ‘moron in a hurry'”.  Justice Phelan held that the ordinary purchasers in this case were beer drinkers “sensitive to the names of beers and to what they know and like”.  The ordinary purchaser was not the “non-beer drinking life partner who is asked to pick up beer”.

In reversing the Board’s decision, the Court concluded that one look at the labels above, and common sense, was “sufficient to dispel any notion of confusion”.  The Court then went on to state that the Member did not consider that in refusing to register the RED HORSE trademark, Molson was effectively being granted a trademark monopoly over the word HORSE of any colour in relation to beer.  The breadth of that monopoly was found to be unreasonable.

It is clear that Justice Phelan looked at the marks as a whole, including the design element.  It is also of note that he focused on a beer-drinking consumer and not just an average consumer.  However, it is the concern about granting a monopoly that is most interesting.

Invoices Evidencing Use and Abandoning Use of Trademarks

A decision from the Federal Court of Appeal, Iwasaki Electric Co. Ltd. v. Hortilux Schreder B.V, provides some useful commentary regarding invoices as evidence of trademark use and regarding the issue of abandonment. 

Hortilux opposed Iwasaki’s application to register HORTILUX in association with electric lamps.  The Opposition Board accepted October 1997 as Iwasaki’s date of first use and concluded that the invoices submitted by Hortilux did not establish use prior to October 1997, although no reasons were provided byt the Board on this particular issue.  No additional evidence on this point was provided on appeal, but the Federal Court judge, applying a standard of reasonableness, reviewed the case law and concluded that Hortilux did have use prior to October 1997.  The Court of Appeal concluded there was no reason to interfere with the judge’s decision. 

The Court of Appeal quoted the judge’s earlier decision that “if a trademark is placed at the top of the invoice, with no use in the body of the invoice, the use will not generally be in association with the invoiced wares…”, but agreed that there were exceptions to this general rule, noting the judge’s reasons for drawing an exception in this case: the trademark was prominent on the invoice, appearing in large font and with design elements; it was clear that HORTILUX was not simply the trade name, particularly when Hortilux B.V. appeared separately; the recipient was the distributor and would therefore have understood that HORTILUX referenced the source of the reflectors; the reflectors were the only goods referenced in the invoices and no other trademark appeared on the invoices.

Having found use prior to October 1997, the Federal Court judge also had to consider whether the mark had been abandoned by Hortilux at the time Iwasaki’s application was advertised (a point that the Board Member did not need to address).  The Court of Appeal agreed that when applying the test in section 16(5) of the Trade-marks Act – whether at the time an application is advertised, a confusing trademark has been “abandoned” – there must be evidence of an intention to abandon. If the failure to use has continued for a long period of time, this may amount to evidence of an intention to abandon absent evidence to the contrary.  However, in this case there was affidavit evidence stating that Hortilux did not intend to abandon the mark.  This evidence did not amount to evidence of use but that was not necessary.  Thus, the judge had made no overiding error and Hortilux succeeded on its appeal.

Affidavit Struck: US Trademark Decision Not to Be Used as Evidence

The Federal Court recently took the unusual step of striking evidence on an interlocutory application, concluding that the affidavit at issue contained irrelevant or hearsay evidence going to controversial issues and that the objecting party would be prejudiced if admissibility was left to the trier of fact.

In The Chamberlain Group v. Lynx Industries Inc., Chamberlain sought to file an affidavit in support of its appeal of two Opposition Board decisions, the Board having rejected its oppositions to the trade-marks LYNXMASTER and LYNXMASTER & Design.  The Affidavit at issue was sworn by Chamberlain’s U.S. counsel and sought to introduce the decision of the U.S. Trademark and Trial Appeal Board (“TTAB”) which allowed Chamberlain’s opposition to LYNXMASTER and was not appealed by Lynx.

In its decision the Federal Court of Canada specifically noted that Chamberlain was seeking to rely on the TTAB decision as evidence of the likelihood of confusion and not simply as a precedent, concluding that, while the TTAB decision might have precedential value in appropriate circumstances, it was clearly irrelevant to the determination of factual issues in the Canadian trademark proceedings.  Moreover, the fact that Lynx did not appeal the TTAB decision was irrelevant and not something Lynx should be required to explain.

The Court was also concerned that the affidavit sought to summarize evidence given by Lynx’s deponent in the TTAB proceedings, although the same deponent filed affidavits in the Canadian opposition proceedings which Chamberlain declined to cross-examine on.

In light of these concerns the Court chose to exclude the affidavit.

Certification Mark Under the Trade-marks Act Refused: Evidence of Use by Others

In Ministry of Commerce and Industry of the Republic of Cyprus v.  Les Producteurs Laitiers du Canada et al. the Federal Court set aside two decisions of the Registrar of Trade-marks, but allowed a third to stand in part, which was sufficient to prevent registration of the Applicant’s certification mark, HALLOUMI, in association with cheese.

The Registrar concluded that contrary to sections 38(2)(a) and 30(a) of the Trade-marks Act, the Applicant had not discharged its initial burden of proving that it was in fact the authority that issued licences authorizing the use of the Mark in association with cheese.  Section 23(2) of the Act provides that only the owner of a certification mark may authorize others to use the mark in association with wares that meet the defined standard.  Relying on the Applicant’s own affidavit material the Registrar concluded that it was the Ministry of Health, in collaboration with the Department of Veterinary Services of the Ministry of Agriculture, National Resources and the Environment, that issued licences.  On appeal by the Applicant, the Ministry of Commerce and Industry, filed additional evidence explaining the internal operations of the Cypriot government in terms of the responsibility for monitoring the use of the Mark.  The Court accepted this evidence, applied a correctness standard of review given the new evidence, and concluded that the Applicant was the authority with the power to authorize use of the Mark.

The Applicant also appealed on the basis that the Registrar incorrectly concluded that the Mark had become recognized in Canada by ordinary and bona fide commercial usage as designating a type of cheese, contrary to sections 38(2)(b), 10 and 12(1)(e) of the Act.  No new evidence was filed on this point and the standard of review was therefore reasonableness.  The Court agreed that one of the Opponents, the Cheese Council, had filed evidence before the Registrar, including packaging from cheese purchased in Ottawa and various cities in Quebec, establishing that marks resembling the Mark and likely to be mistaken for it had been used in Canada to designate a type of cheese.

The other two opponents could not rely on the evidence filed by the Cheese Council and therefore, given the Court’s finding on the other issue, their oppositions failed with the appropriate cost consequences.  Nevertheless, success by the Cheese Council meant the certification mark could not be registered, with costs to the Cheese Council on its opposition.