The Federal Court of Appeal recently delivered its decision on the appeal in SC Prodal 94 SRL v. Spirits International B.V., as well as on a motion to quash the appeal.

The Respondent (Spirits) had applied to the Federal Court to expunge the Appellant’s (SC Prodal’s) mark STALINSKAYA for Vodka from the register.  In the meantime, the Appellant had submitted a new application for the same trade-mark and subsequently cancelled the original mark.  By the time the Respondent’s application for expungement of the original mark was considered, it was no longer on the register and consequently the Appellant did not file a notice of appearance.  Although the original mark had been cancelled, the applications judge allowed the Respondent’s application and went on to issue a declaration that the trade-mark STALINSKAYA was not distictive as it was confusing with the Respondent’s trade-marks, including STOLICHNAYA for Vodka.  The applications judge ordered a stay of proceedings and granted a “permanent mandatory injunction” prohibiting the Registrar of Trade-marks from considering the Appellant’s new STALINSKAYA application.  The Appellant appealed and the Respondent moved to quash the appeal on the grounds that the Appellant had waived its rights in the court below by failing to file a notice of appearance.

Before considering the main appeal, the Court of Appeal dismissed the motion to quash the appeal following Desormeaux v. Ottawa (City) which stated that failure to file a notice of appearance does not necessarily prevent a party from appealing a decision if there is evidence that the respondent did not intend to waive all rights as a party.  In this case, the Court of Appeal found that the Appellant had not acquiesced to the granting of relief in circumstances where it did not have notice of the relief being requested.

The Court of Appeal then addressed the appeal and found that in light of the fact the original STALINSKAYA mark had been cancelled, the application before the applications judge was a moot point: “that which does not exist cannot be expunged”.  Contrary to the requirements of the Federal Court Rules, the Respondent’s notice of application did not include a request for a stay of proceedings, an injunction or an order of prohibition and as a result, the Appellant had no notice of this requested relief.  The Court of Appeal was critical of the applications judge for granting relief that was not set out in the notice of application, particularly when the expungement of the original mark was a moot point: “in circumstances where a respondent party does not have notice of the relief being requested, such relief should not be granted until notice is given and the respondent party is offered the opportunity to respond”.

The appeal was allowed with costs and the order of the applications judge was set aside.