A recent Opposition Board decision highlights a little-examined area of Canadian trademark law, raising questions pertaining to the entitlement to file a trademark application, and issues of good faith related thereto.

In Cerveceria Modelo, S.A. de C.V. v. Marcon, issued August 12, 2008, the Trade-mark Opposition Board upheld an opposition brought by Cerveceria Modelo against Marcon’s application to register the trademark CORONA for use in association with both a variety of beverages and with beverage bottling services.

The application was opposed on several grounds, including alleged confusion with Cerveceria Modelo’s familiar CORONA trademark. Additionally, the opposition was also founded on Marcon’s alleged failure to comply with s. 30(i) of the Trade-marks Act, which requires the applicant to file with the Registrar an application that contains a statement that the applicant is satisfied that “he is entitled to use the trade-mark in Canada in association with the wares or services described in the application.”

In the decision, the Board concluded that the opponent had adduced sufficient evidence to properly support its allegation relating to s. 30(i), by:

• establishing that the applicant Marcon had filed applications for a number of other allegedly well-known marks contemporaneously with or following his application for the CORONA mark; and

• pointing out that, when initially filed, Marcon’s CORONA application claimed beer, just as was claimed in the CORONA registration owned by the Opponent (even though the statement was later revised to remove these directly overlapping wares, which Marcon claimed under cross-examination to have been included by mistake).

In addition, the Board appeared to draw a negative inference from Marcon’s failure to have approached a manufacturer to produce many of the proposed wares he desired to offer in association with the trademark.

In the Board’s view, these facts constituted “exceptional circumstances”, and accordingly, the Opponent had done enough to put the “entitlement” issue into question, requiring Marcon to establish grounds for his belief in his entitlement.

Aside from an expression of his sincere desire to use the mark, Marcon’s evidence in this regard was comprised of proof of his ownership of two inactive trademark applications for unrelated marks, and of his ownership of patents relating to dental floss and to a fuel tank product.  In making such filings, Marcon appears to have been attempting to demonstrate that apart from his full-time job as an electrician he was also a closet entrepreneur, from which the Board could infer his genuine interest in using the marks.

Considering this evidence on a balance of probabilities, the Board decided it was insufficient to confirm Marcon’s entitlement, questioning “how any reasonable person would be satisfied that he/she was entitled to file trade-mark applications for over 18 arguably well known marks for arguably related wares and/or services.” (It is worth noting that of these applications, only half were filed contemporaneously with the subject application, with the balance being filed after the date of the subject application. Nonetheless, the Board relied upon all of these to call into question Marcon’s motives, and by extension, the propriety of his assertion of entitlement at the time of filing.)

This decision is somewhat troubling insofar as the rights of applicants are concerned: arguably, it has the effect of requiring an applicant to have a knowledge of the niceties of trademark law that the legislation does not require.  The Board concluded that the “exceptional circumstances” outlined above “raised questions about Marcon’s good faith in submitting” the application. However, review of Marcon’s testimony reproduced in the decision indicates he considered the question of confusion and entitlement as part of his filing, but was clearly mistaken with respect to the import of the similarity of the goods offered as part of a confusion analysis. Under cross-examination Marcon made clear that he did not believe that he should have the right to claim CORONA in association with beer, but believed (incorrectly) that no one would be confused as to the source of CORONA-branded water, juice or even wine products he might offer.  In this light, it appears Marcon turned his mind to the entitlement issue, and came to a (seemingly) honest, but incorrect, conclusion.

In light of the foregoing, the Board’s decision may open the door to a slightly different line of attack against the s. 30(i) statements of applicants than had previously been available, imposing a standard not merely of the truthfulness of the applicant’s belief in entitlement, but the correctness of that belief in entitlement at law. This decision should alert applicants to the need to take care in confirming both the propriety of their belief to their entitlement to use a trademark in Canada in association with prescribed wares and services, and in ensuring the availability of evidence to support that claim.