Federal Court Clarifies Leave Requirement for New Evidence in Trademark Appeals

The Facts

The Appellant appeals from a decision of the Trademarks Opposition Board, refusing its application for registration of the trademark FILTER DESIGN. The FILTER DESIGN trademark consists of the “positioning of a sign” in the form of a pattern of diamond-shaped apertures on the surface of certain air filters. The Board refused the application on grounds that the diamond-shaped apertures were dictated primarily by a utilitarian function, and the trademark was unregistrable pursuant to subsection 12(2) of the Trademarks Act. Products Unlimited, Inc. v. Five Seasons Comfort Limited 2026 FC 48.

The Amendment

 On April 1, 2025, several amendments to the Trademarks Act that had been enacted years earlier came into force. These included an amended subsection 56(5), which now requires parties to obtain leave to file additional evidence on an appeal from the Trademarks Opposition Board to the Federal Court. The subsection is as follows:

56 (5) If, on an appeal under subsection (1), the Federal Court grants leave to adduce evidence in addition to that adduced before the Registrar, the Court may exercise, with respect to that additional evidence, any discretion vested in the Registrar.

While the previous inability of confidentiality orders before the Board was part of the problem, the primary reason for the amendment related to the fact that unlimited right to file evidence on appeal had led to inefficiencies arising from trademark issues being re-litigated in the Federal Court on a different record.

In this decision the appeal was commenced on April 2, 2025, so the requirement to obtain leave was applicable. The Federal Court has not previously had the opportunity to consider the interpretation of subsection 56(5) and the proper approach to determining requests for leave to adduce additional evidence. The respondent who had been successful with its opposition did not take part in the appeal.

The Decision

The Judge observed that the Trademarks Act as amended does not set out any grounds or factors for consideration in assessing whether to grant leave to file additional evidence leaving the Court with a broad discretion. The proper approach to exercising that discretion is dictated by the principles of statutory interpretation, which consider the text, context, and purpose of the provision.

The Traditional Four-Part Test

The usual test regarding the filing of new evidence on appeal consists of a four-part test: 

(1) The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial; 

(2) The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;

(3) The evidence must be credible in the sense that it is reasonably capable of belief, and

(4) The evidence if believed could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

The traditional four part test is (a) purposive, fact-specific, and driven by an overarching concern for the interests of justice; (b) ensures that the admission of additional evidence on appeal will be rare; (c) seeks to balance principles of finality and order with reaching a just result in the context of the proceedings; and (d) is sufficiently flexible to adapt to unique concerns raised in a case. 

Why Subsection 56(5) is Different?

In subsection 56(5) of the Act, Parliament has signalled that there are differences between appeals from the Registrar and other typical appeals. Not only has Parliament expressly indicated that leave may be granted to file new evidence on appeal (without limiting language like “in special circumstances”), but it has also preserved the Court’s power to exercise “any discretion vested in the Registrar” with respect to that additional evidence. This signaled a broader approach to new evidence than the one that applies in a typical appeal.

However, by requiring that leave be obtained, Parliament clearly intended to limit the filing of additional evidence and reduce the extent to which new evidence may be adduced on appeal. Leave cannot be granted simply because a party asks for it, or else a substantial procedural amendment would be reduced to a mere formality.

The Court’s Approach in This Case

The Judge concluded that in this context a more flexible approach to the leave requirement than the strict application of the usual test was warranted. At the same time, the underlying principles including the interests of justice and the importance of finality, order, and efficiency, apply equally to trademark litigation.

In summary, in assessing a request to file additional evidence on appeal the Court should consider whether the interests of justice favour granting leave on the basis of all relevant factors, including:

(a)the relevance, credibility, and admissibility of the evidence;

(b)the materiality of the evidence;

(c)the circumstances surrounding the delay in filing the evidence; and

(d)whether granting leave would cause prejudice to the opposing party.

The first two requirements are not inconsistent with the existing requirement the new additional evidence to affect the standard of review must be “material” i.e., evidence that could have materially affected the Registrar’s finding since it was of probative value and was sufficiently substantial and significant’.

The second two requirements are new. The third requirement reflects the important principle that litigants must put their best foot forward and preserves the distinction between trial and appellate courts but with greater flexibility in the admission of new evidence than is generally afforded in typical appeals.

The question of whether the evidence could have been put before the Board remains an important one, and in some cases may be a determinative factor. However, other surrounding circumstances that may explain, for example, why evidence was not filed with the Board, may also be relevant. Such circumstances will necessarily be fact-specific and cannot be exhaustively enumerated.

For some time after April 1, 2025, matters will be coming before the Court on appeal that were presented to the Board at a time when the former legislation applied, both in respect of additional evidence on appeal and in respect of confidentiality orders before the Board. While subsection 56(5) applies to these appeals by virtue of the transitional provisions this may be a relevant factor for consideration.

In this case the new evidence was primarily directed at matters raised in the opponent’s written argument which explained why leave was not sought to file it before the Board and supported granting leave.

There is no indication that granting leave would cause any prejudice to any other party, particularly given that no other party has appeared to oppose the appeal.

Considering all the circumstances and factors together, the Judge concluded that it was in the interests of justice to grant leave to the appellant to adduce the additional affidavit on the appeal as additional evidence pursuant to subsection 56(5). 

When the new evidence was considered, the Judge concluded that the appellant had satisfied its onus, to demonstrate that the features of the trademark were not dictated primarily by a utilitarian function, and the trademark was registrable and the appeal allowed. 

Key Takeaways

 For Trademark owners who have brought appeals after April 1, 2025, concerning decisions of the Board made under the old rules, the Judge’s comments that this should be a factor concerning granting leave may be helpful.

The test may be further refined and clarified as additional judges consider it particularly in cases which are fully contested.

However, the fact remains that in the future litigants must put their best foot forward before the Trademark Opposition Board.

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John McKeown

Loopstra Nixon LLP.  

130 Adelaide St W Suite 2800Toronto, Ontario, M5H 3P5Canada

 jmckeown@LN.Law

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This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances. Copyright © John Mckeown, All rights reserved. To unsubscribe to the IP Update, please send me an email at jmckeown@Ln.Law

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