The Trade-marks Act defines a certification mark as a type of trademark and sets up a specific regime for its adoption and registration by a person not engaged in the manufacture, sale, leasing or hiring of the wares or services in question, who wishes to license others to use the marks.  With wares a certification mark is intended to signify character or quality, working conditions, the class of persons producing the wares or the area they are produced.

The opponent successfully established that HALLOUMI could not be registered pursuant to section 12(1)(b) of the Trade-marks Act, which precludes registration of a mark contrary to section 10, namely a mark that has by ordinary and bona fide usage become recognized in Canada as designating, among other things, a kind of wares.  The evidence established such usage with regards to the cheese at issue.

On appeal to the Court of Appeal, the Cyprus Ministry of Commerce and Industry argued that the relevant date for an opposition based on section 10 was other than the date of the Registrar’s decision and that the judge had failed to apply the proper burden of proof and assess the evidence.  However, none of these arguments succeeded and the registration was not allowed.

While certainly not exhaustive of all of the descriptions that an Examiner will consider to be acceptable, if an applicant’s wares and services can fit within the approved descriptions in the Manual, the processing of the application is likely to be much smoother.  

The complete list of descriptions that were approved as of today can be accessed by typing the query “2011-09-07″ as a search term in the online Wares and Services Manual.  These changes relate almost entirely to descriptions of wares, with only a few new service descriptions.  Notable changes to the services descriptions include “online social networking services”, “real estate development” and “resort services”.  This is somewhat disappointing in that rapid ongoing changes in online service delivery (e.g. social media, cloud computing, outsourcing and the like) and technology continue to far outpace changes to the Wares and Services Manual and challenges often arise in attempting to obtain approval for descriptions of new wares and services.

Practitioners continue to eagerly await the implementation of many new wares and services descriptions called for in the Trilateral Agreement – see our earlier post on this topic.

First, a recap of the basic facts.  Alavida obtained a registration of the mark MASTERPIECE LIVING in Canada in 2007 for use in association with various real estate related services.  Its application was filed in December of 2005, based on proposed use of the mark in Canada.  Alavida commenced use of the mark in January of 2006.   Masterpiece Inc. didn’t oppose Alavida’s application, but instead sought to expunge Alavida’s registration, after it issued, on the basis, among other things, that Masterpiece Inc. had used the same or a similar mark in Canada in association with the same or similar services, prior to Alavida’s application being filed and prior to Alavida’s use of the mark in Canada.

At the Trial Division and in the Federal Court of Appeal, Alavida won and its registration was maintained, on the basis of the argument that Masterpiece Inc.’s prior use of the same mark for the same services, even if proven, was limited in time and space and was in a different part of Canada (Alberta) than where Alavida used its mark (Ontario) and that the geographic location of any alleged prior use was a factor to be looked at in determining likelihood of confusion – in essence importing into the analysis, a common law passing off test.

This result was contrary to what most practitioners in Canada assumed the test to be for likelihood of confusion in the context of non-entitlement, based on the wording of the Trade-marks Act, which makes no express reference to the geographic location of prior use in the relevant provisions of the Act.

In today’s decision, the Supreme Court allowed the appeal and held that Alavida’s registration should be expunged on the basis that Alavida’s mark, at the time its application was filed, was confusing with a mark that had previously been used anywhere in Canada by Masterpiece Inc.

Speaking for the unanimous Court, Rothstein J. stated: “In order for the owner of a registered trade-mark to have exclusive use of the trade-mark throughout Canada, there cannot be a likelihood of confusion with another trade-mark anywhere in the country.”

As such, the over 12,000 Trilateral-approved entries that were added to the Wares and Services Manual yesterday are being removed today.  CIPO has provided no official word on possible solutions, or a timetable for the (re)implementation of Trilateral-approved identification entries.

By way of background, in 2009 CIPO signed a memorandum of co-operation with the United States Patent and Trademarks Office, the Japan Patent Office and the Office for the Harmonization of the Internal Market (responsible for overseeing the CTM system).  These entities – known as the Trilateral Partners – have worked in a loose association over the last few decades to promote and effect harmonization in their IP registration systems.

The Memorandum saw CIPO join the Trilateral Partners’ trademark identification project: the Partners maintain a list of identifications of goods and services that, if entered in an application for the registration of a trademark in any Partner country, will be accepted in that country.

As a condition of its accession to the Memorandum, Canada was permitted to assess the Trilateral list, and to reject a small percentage of identifications that it did not believe reflected Canadian requirements.  With today’s announcement, that process is now complete, and the acceptable terms have been added to the Wares and Services Manual.

The Applicant’s new affidavit sought to introduce evidence that employees of the company had included promotional flyers bearing the trademark at issue when shipping other goods to customers.  On cross-examination the deponent acknowledged he was not personally involved with the flyers.  The Federal Court concluded that this evidence met the criteria of reliability and necessity required by the Supreme Court of Canada decision, R. v. Smith, particularly in the context of section 45 proceedings which are intended to be expeditious and straightforward.  The Court noted that other cases had accepted the reliability of evidence given by individuals who operate businesses.  The evidence was also necessary since requiring evidence from several employees would not be consistent with the summary procedure intended for section 45 proceedings.

The Court was also satisfied that the new evidence would have affected the Registrar’s decision.  The affidavit before the Registrar had used the present tense when explaining that promotional flyers were sent out and the Registrar could only conclude that the procedure was in place at the time the affidavit was sworn and not during the earlier three-year period at issue in the section 45 proceedings.  The new evidence specifically addressed that oversight.

Finally, given the low threshold of use required for a section 45 proceeding, the Court was satisfied that the trademark was used as registered. The use of a surrounding square and the addition of three letters connoting a product model identifier did not mean the trademark was not used as registered.

By way of background, Glaxo registered its mark (depicted right, below) in May of 2007. A collection of generic drug manufacturers brought a Federal Court application to expunge the mark about 6 months later, alleging that the mark was not distinctive.

In its decision, the Federal Court concluded that for the mark to be distinctive the constituency of consumers for the inhaler (including physicians, pharmacists and patients) must relate the trade-mark to a single source, and thereby use the mark to make their prescribing, dispensing and purchasing choices. In market sectors where purchasing decisions are made by or on the advice of professionals, commercial distinctiveness of such marks will be inherently more difficult to establish: such persons will make purchasing or prescription decisions based on the specific properties of the product, and not on the packaging or marks associated with those products.

However, the Court went further to suggest that the distinctiveness of a mark based on colour and shape may also be diminished by its association with a registered trade-name, noting that “where a pharmaceutical product is always used in direct association with a well-known word-mark, the risk of customer confusion will be diminished, if not entirely absent, where a look-alike product is presented for purchase with a different brand name.”

In this case, because the Glaxo inhaler was always labelled with other indicators of source, the Court concluded that Glaxo’s evidence was not sufficient to support its claims the mark was distinctive – largely because it had adduced only a small amount of evidence regarding the extent to which the mark, independent of other factors, served to lead the relevant constituency to decisions about prescribing, dispensing and purchasing.  The Court concluded that while colour and shape may help patients identify what is inside the device, they do not necessarily serve as a signifier of source – and in any event, do not play this function at the point of sale.

This decision was upheld at the Federal Court of Appeal: there, in a brief decision the Court stated that it could not identify any palpable or overriding errors in the underlying decision to merit disturbing the lower court’s findings.

This case provides a stark reminder of the challenges associated with adducing evidence to support the use and distinctiveness of marks that are constantly used in tandem with other indicators of source – whether other marks, trade names or the like.  In such cases, it may prove difficult to establish the extent to such mark serves to act as an indicator of source, separate and apart from those other indicators – and this will be particularly true where the mark in question may be viewed as a secondary indicator (whether for reasons of design, the means by which the target constituency selects products, or otherwise).

Glaxo has now sought leave to appeal to the Supreme Court of Canada. We’ll keep you posted on the progress of the case.

The Registrar had refused registration of this mark on the basis that it was clearly descriptive of the character of the claimed services, contrary to S. 12(1)(b) of the Trade-marks Act.   On appeal, the Federal Court agreed, finding that the word TEACHERS’ in its plural and possessive form, is a distinguishing feature, and therefore the character, of this pension plan because it is a pension plan for teachers.  It clearly describes a prominent characteristic of the wares or services provided.  According to the Court, providing the applicant with a monopoly on the use of this word would prevent other pension or financial services targeted to or belonging to teachers within Ontario or in other provinces and territories from using the term.

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.

One of the Defendant companies had been a 30%  owner  of one of the Plaintiff companies and a Letter of Intent had been executed setting out the basic relationship whereby the Plaintiff s were to distribute valves manufactured by the Defendants in China.  The parties had also executed a Consignment Agreement which the Court found to be a critical document since clause 12 specified that the intellectual property arising by virtue of the Agreement was deemed to be equally owned by the parties. 

For marketing purposes, the Plainitffs adopted the trademark FUSION and proceeded to market wares manufactured by the Defendants, as well as wares sourced from a different manufacturer, using the trademark.  However, following the breakdown of the relationship, one of the Defendants registered the trademark.  The disputes arising between the parties were eventually settled under an Alberta Queen’s Bench action, which left only the intellectual property issues unresolved. The Plaintiffs had also applied to register the trademark, but the Defendants successfully opposed the application on the basis of alleged prior use. 

In light of the Consignment Agreement, the Federal Court concluded that neither the Plaintiffs nor the Defendants had a right to register the trademark.  Since neither party was prepared to acknowledge joint ownership, FUSION was essentially “poisoned” as a viable trademark. 

The Court also concluded that the Defendants could not claim first use on the basis that the Plaintiffs were distributors of a product the Defendants manufactured off-shore (similar to the conclusion reached in the 1989 case, Lin Trading Co. v. CBM Kabushiki Kaisha). Under the Consignment Agreement the Defendants retained ownership of the goods until ownership was transferred to a third party and therefore there could be no use of the trade-mark by the Defendants in Canada.

The Plaintiffs’ request that they be substituted as the registered owner of the trademark was also denied, in light of the equal ownership referenced in the Consignment Agreement, but also because the Court had no such jurisdiction.  The Court also found that the Defendants had mislead the Trademarks Office when they sought to register FUSION, having specificially omitted any reference to section 12 of the Consignment Agreement in the Affidavit filed with the Office.  Following General Motors of Canada v. Décarie Motors Inc.  the Court found there was a material misrepresentation which meant the registration could be invalidated, even in the absence of a fraudulent intent.

Finally, with regard to section 7(a) of the Trade-marks Act, which provides that no person shall “make a false or misleading statement tending to discredit the business wares or services of a competititor”, the Court found that the Defendants had mislead a client of the Plaintiffs by suggesting that the Plaintiffs’ manufacturing facility in China had been closed down.  However, the issue of damages was to be determined in a further hearing and the Court left open the possibility of further evidence from the Plaintiffs’ client.

Thus, neither party was entitled to the registration of the trademark and the issue of damages pursuant to section 7(a) was left open for a further hearing.