Engineering a Successful Trademark Opposition: Canada’s Federal Court finds that KELLY ENGINEERING RESOURCES mark is deceptively misdescriptive

A recent Federal Court decision in Canadian Council of Professional Engineers v. Kelly Properties, LLCreversed a prior Trademarks Opposition Board (TMOB) decision by holding that Kelly Properties’ KELLY ENGINEERING RESOURCES trademark application was not registrable. In the prior TMOB proceedings, the opposing party, Canadian Council of Engineers, was unsuccessful in its opposition to the KELLY ENGINEERING RESOURCES application. On appeal, the Federal Court had to consider three main issues.

Firstly, the Court had to consider the appropriate standard of review for an opposition appeal when new evidence was adduced. The Court affirmed that where new evidence has been filed, as was the case here, if such evidence would materially affect the TMOB’s findings, the Federal Court must come to its own conclusion as to the correctness of the decision after considering the evidence before it.

Secondly, the Court considered whether the TMOB had erred in its assessment of the date of first use of the KELLY ENGINEERING RESOURCES trademark. While the TMOB had been satisfied that Kelly Properties had used this trademark in Canada since April 1999, the Federal Court’s review of the material evidence indicated that this claim was not justifiable and that this should have been a valid ground for opposition. However, and importantly, Kelly Properties’ application was not based solely on the claim of prior use in Canada; the application was also filed on the basis of prior use and registration in the United States. The Federal Court affirmed a previous TMOB decision in Aetna Life Insurance Co of Canada v. SNJ Associates Inc. where it was held that the failure of a prior use basis in a trademark application does not defeat the application in its entirety if there is a separate claim on the basis of use and registration in a foreign country. Accordingly, while Kelly Properties’ application was compromised by its inaccurate Canadian first use date, ultimately its claim based on prior use and registration in the United States prevented the Canadian Council of Engineers from successfully opposing the application on this ground . This aspect of the decision reaffirms the importance of claiming more than one basis for registration when applying to register a trademark in Canada, if the facts allow for such additional claims to be made.

Thirdly, the Federal Court considered whether the KELLY ENGINEERING RESOURCES trademark was clearly descriptive or deceptively misdescriptive. The TMOB had found that the trademark was neither clearly descriptive nor deceptively misdescriptive. In considering the new evidence presented by the Canadian Council of Engineers, the Court ultimately came to the conclusion that the trademark was deceptively misdescriptive of the character and quality of the claimed services, despite the fact that the services included in the application did not include “engineering” services. In concluding that the trademark was not registrable, the Court noted that acceptance of this trademark would run the risk of opening up the door to abuse, thereby placing the public interest at risk due to the association between “engineering” and the regulation of the engineering profession in Canada. This battle may continue as Kelly Properties has until December 21, 2012 to appeal this decision.

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