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How to Prove that a Mark is Distinctive

A recent decision of the Federal Court considers a ground of opposition based on lack of distinctiveness and reviews what evidence is necessary to support such a ground.

The Facts

1648074 Ontario Inc.(“Applicant”) applied for the mark DO GHAZAL & design in association with the tea leaves and tea bags, dried fruits, nuts and food products. Akbar Brothers (PVT) Ltd., (“Akbar”), a company incorporated in Sri Lanka, opposed the application on several grounds, including a claim that the applied-for mark was not distinctive in light of Akbar’s use of its trademark DO GHAZAL & design (not registered in Canada) used in association with tea.

The Decision of the Trademarks Opposition Board

The opposition proceeded to a hearing before the Trademark Opposition Board. The Hearing Officer found that the DO GHAZAL & Design owned by Akbar was sufficiently known in association with the tea products to negate the distinctiveness of the applied-for mark. The evidence supporting the finding consisted of:

  • annual sales in Canada ($105,000 in 2012; $193,000 in 2013; $255,000 in 2014);

  • labels bearing the DO GHAZAL & Design mark were attached to the products sold in Canada;

  • invoices for shipments of tea from the opponent to its Canadian distributor between July 29, 2012, and June 13, 2014.

Since Akbar had discharged the initial burden on it of showing that the DO GHAZAL & Design trademark had become known in Canada sufficiently to negate the distinctiveness of the applied-for mark, the Hearing Officer considered whether there would be confusion between the marks, because the Applicant must then show that its mark was adapted to distinguish its goods from those of Akbar.

The Hearing Officer said that the applied-for mark was not adapted to distinguish the Applicant’s goods if, at the time opposition proceedings are commenced, it was already known as the trademark of another in respect of similar goods. The dominant word component of both parties’ marks was identical, their goods are almost identical or overlapping, and the Akbar’s mark had been used to a greater extent than the applied-for mark as of the material date – the date of filing the statement of opposition. As a result, the application was refused.

The Appeal to the Federal Court

The Applicant appealed to a judge of the Federal Court. While the number of grounds were raised the primary ground was that the Hearing Officer erred when it was found that as of the date of filing the opposition Akbar’s DO GHAZAL & Design trademark had become known in Canada sufficiently to negate the distinctiveness of the applied-for mark.

The Judge observed that in the opposition the initial evidentiary burden was on Akbar to show that his goods were known sufficiently to negate the distinctiveness of the applied-for mark.

Since the Hearing Officer applied the correct test but the contention was that he had erred in doing so the judge categorized this as a question of mixed fact and law. As a result, the Hearing Officer’s decision was reviewed on the standard of reasonableness.

The Judge said that Akbar had not filed any evidence concerning what its distributor did with the goods it purchased from Akbar. It was not known if the tea had been sold, to whom and where or re-exported. There was no evidence of marketing efforts or advertising and a complete lack of evidence regarding whether the mark was known in Canada.

The Judge also reviewed previous decisions of both the Court and the Board which had insisted upon evidence of consumer knowledge of the marks in issue, marketing efforts and advertising in similar cases.

In order for a decision to be reasonable, it must fall within a range of acceptable outcomes which are defensible in respect of the facts and the law. The decision in issue reached a conclusion without any evidence to support the finding and therefore lacked intelligibility and justification.

As a result, the appeal was allowed and the opposition returned to the Board because there were other grounds of opposition that needed to be determined.

Comment

Generally, three conditions must be satisfied to show distinctiveness: (1) the mark and the product are associated or linked; (2) the owner uses the association or link between the mark and its product and is selling the product; (3) the association or link enables the owner of the mark to distinguish its product from that of others. Under the Trademark Act, the use by the distributor can accrue to the benefit of the trademark owner.

In this case, as correctly observed by the Judge, Akbar failed to provide sufficient evidence to show that the consumers who would normally purchase the product had knowledge of Akbar’s mark.

If you have questions, please contact me at mckeown@gsnh.com.

John McKeown

Goldman Sloan Nash & Haber LLP 480 University Avenue, Suite 1600 Toronto, Ontario M5G 1V2 Direct Line: (416) 597-3371 Fax: (416) 597-3370 Email: mckeown@gsnh.com

These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.

This article originally appeared on The Lawyer’s Daily website published by LexisNexis Canada Inc.

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