Federal Court of Appeal Clarifies Test for Clearly Descriptive Composite Trademarks

In January of 2025, we discussed the Federal Court’s decision in Auberge & Spa Le Nordik Inc. v. Therme Development (CY) Ltd., 2024 FC 1765. In this case, the Applicant had sought to strike specific services from the registrations for THERME, THERME GROUP, THERME WOMANS HEAD LOGO and THERME WOMAN LOGO owned by Therme Development (CY) Ltd. (TD), mainly related to health spa resort services.

Clearly Descriptive

A trademark is not registrable if whether depicted, written or sounded, it is clearly descriptive in the English or French language of the character or quality of the services in association with which it is used.

In this context, “clearly” means “easy to understand, self-evident or plain” and not merely “accurate”. “Descriptive” pertains to the “goods or services in association with which the trademark is used” and “character” means a “feature, trait or characteristic of the goods or services”.

One purpose of this prohibition is to prevent one person from monopolizing clearly descriptive words and placing legitimate competitors at a disadvantage.

The Judge found that the Applicant had established, on a balance of probabilities, that when sounded in French, the mark THERME was clearly descriptive of the character of the services specifically related to thermal baths and, therefore, not registrable. These services included:

design of health spa resorts and health and wellness centres featuring thermal baths and swimming baths, health spa resorts featuring thermal baths, swimming pools, Turkish baths facilities, mineral pools, hot tubs and hydrotherapy and operation of thermal baths. 

The Applicant was also successful concerning the THERME WOMANS HEAD LOGO and THERME WOMAN LOGO registrations. Shown below. The Judge found that the ordinary Francophone Canadian consumer would sound these trademarks as the French word THERMES, as a matter of first impression after viewing either composite mark as a whole, and would easily understand that the service provided by TD (being among other things thermal baths) was clearly described in the THERME WOMEN’S HEAD mark and the THERME WOMAN mark as sounded by their dominant element THERME. While these marks included attractive design elements, the Judge found they were as sounded clearly descriptive of the services, and therefore unregistrable as of the registration dates.

The Applicant was not successful under this ground of challenge against the THERME GROUP registration. The Judge found that given the applicable legal test and the addition of the word GROUP, the Applicant had not discharged its burden to prove that the trademark THERME GROUP when sounded in French, clearly described the character of the impugned services as of the registration date. However, the Applicant succeeded in challenging the registration based on confusion with its registered trademark.

The Appeal

TD appealed to the Federal Court of Appeal. The Court agreed with the Application Judge’s findings subject to one caveat regarding her analysis of the THERME WOMANS HEAD LOGO and THERME WOMAN LOGO registrations. Specifically, the Court held that design elements themselves cannot be sounded, only the word elements. 

A trademark which when sounded, is clearly descriptive of the character or quality of the relevant services may still be unregistrable despite having accompanying design features. The correct approach to assess whether design features are sufficiently distinctive to result in a registrable mark, is to consider the first impression created by the mark. If the “substance” of the trademark is the design, it may not be caught under the prohibition. But if the “substance” of the mark in a word or words that can be sounded which are clearly descriptive, the mark may be unregistrable.

In making the determination one should consider whether a prospective consumer would, as a matter of first impression, perceive the word as the most influential or prominent feature of the trademark. Looking at the trademark as a whole, the visual impression created by the word element is compared to the visual impression created by the design element. Relevant factors include the size of the words and design and the font, style, colour, layout of the lettering of the words as well as the inherent distinctiveness of the design element. 

While the Judge’s approach was in error the Court agreed with her ultimate conclusion. The design elements in each mark were larger and more complex than the word element, but the word element was still dominant. On first impression, a prospective consumer would have the word THERME, and not the less articulable design features, at the front of mind in viewing both marks.

The appeal was therefore dismissed.

Comment 

This decision serves as helpful guidance when considering whether composite marks with design features are clearly descriptive and not registrable, although the exercise is subjective in nature.

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John McKeown

Loopstra Nixon LLP.  

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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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