Depreciation A Possible Ground in Opposition Proceedings

In Parmalat Canada Inc. v. Sysco Corporation, the Federal Court allowed an application by Parmalat to set aside the Trade-mark Opposition Board’s refusal to amend a statement of opposition to include an additional ground of opposition. Sysco had filed an application on May 3, 2002 to register the trademark, BLACK DIAMOND, in association with various kitchen utensils, chef’s apparel, cooking pots and frying pans. Parmalat had registered various BLACK DIAMOND trademarks in Canada for use since 1933 in association with cheese and other food products. Parmalat originally filed its statement of opposition on May 4, 2004 based on a number of grounds, including confusion with Parmalat’s family of BLACK DIAMOND trademarks.

On June 2, 2006, the Supreme Court of Canada released its decision in Veuve Clicquot Ponsardin, Maison Fondee en 1772 v. Boutiques Cliquot Ltée which discussed the depreciation of goodwill contrary to section 22 of the Trade-marks Act. Subsequent to the Veuve Clicquot decision Parmalat sought to amend its statement of opposition to include depreciation of the value of the goodwill attached to its registered trademark, BLACK DIAMOND, as an additional ground of opposition. The Trade-mark Opposition Board dismissed Parmalat’s application for leave to amend on the basis that the inquiry on the issue of depreciation of goodwill was not to be decided in an opposition hearing; instead, the Federal Court had jurisdiction to decide the issue.

The Federal Court found that the circumstances of the decision justified judicial review although a refusal to amend a statement of opposition is an interlocutory decision and therefore not normally subject to review. No other adequate remedy was available to Parmalat because the Court could not consider additional grounds on an appeal from the Opposition Board.

The Federal Court also concluded that the appropriate standard of review was correctness on the basis that the Board erred in law by rejecting Parmalat’s application for leave to amend its statement of opposition.

The Board had reasoned that it did not have authority to inquire into issues of depreciation and, consequently, disallowed Parmalat’s application for lack of jurisdiction. The Federal Court disagreed, concluding that depreciation under section 22 of the Trade-marks Act can, in the right circumstances, sustain an opposition on grounds that the applicant cannot be satisfied it is entitled to use the mark. The judicial review was allowed, but the Court refused Parmalat’s submission to consider the matter de novo, and referred Parmalat’s application to include an additional ground of opposition back to the Board for reconsideration by a different member.

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The authors of the Canadian Trademark Blog are all members of the Canadian law firm Clark Wilson LLP, based in Vancouver, Canada. Each author's practice focuses–either in whole or in substantial part–on Canadian intellectual property law. Together, they manage the trade-mark portfolios of local, national and international brand owners in nearly all industries and markets.

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