The Importance of Appropriate State of the Register Evidence
A recent decision of the Federal Court relates to an appeal from the Trademark Opposition Board which turned on the state of register evidence filed.
The applicant filed two applications. The first was for the word mark SMART FOOD FOR A GOOD MOOD. The second application related to the design shown below:
Both marks were for use in association with a lengthy list of food products.
The opponent opposed the applications on several grounds, but the primary ground was based on confusion with its SMART registration for use with bakery products consisting of bread, hot dog and hamburger buns, English muffins, bagels and tortillas.
The Decision of the Trademarks Opposition Board
The Trademarks Act directs that in determining whether trademarks are confusing, the court or the Registrar shall have regard to all the surrounding circumstances including:
(a) the inherent distinctiveness of the trademarks and the extent to which they have become known; (b) the length of time the trademarks have been in use; (c) the nature of the goods, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trademarks in appearance or sound or in the ideas suggested by them.
The Hearing Officer began the review of confusion with resemblance. It was found that the two marks applied for differed from the SMART mark. The Hearing Officer used the preferable approach of first considering whether an aspect of the trademark is striking or unique.
The Hearing Officer’s focus was on comparing the design mark to the SMART mark. It was found that the design differed completely from the opponent’s trademark SMART in appearance, sound and in the ideas suggested.
With respect to the word mark, the Hearing Officer acknowledged that its first component consisted of the opponent’s entire trademark SMART. However, when the trademarks were considered in their totality, they were found to be more different than alike in appearance and sound. The applicant’s trademark suggested an intended result of the goods, i.e. to lift someone’s mood. This was not the idea suggested by opponent’s trademark. The Hearing officer also concluded on the evidence available relating to the state of the register that the component SMART was commonly used in association with food products including bakery products.
The opponent’s mark benefited from its acquired distinctiveness, but the evidence of the state of the register diluted the scope of the protection and the differences in appearance, sound and ideas suggested were sufficient to shift the balance of probabilities in favour of the applicant. As a result, the oppositions were dismissed.
The opponent appealed to the Federal Court from the decision concerning the word mark. The judge determined that the standard of review was the “reasonableness’ standard. As long as the outcome reached by the Board fell within a range of possible, acceptable outcomes, which were defensible in respect of the facts and the law, no intervention by the court is warranted. However, the reasonableness standard requires that the process and the outcome fit comfortably with the principles of justification, transparency and intelligibility.
The Judge said there were issues with the analysis of the degree of resemblance and the state of the register evidence that made the Hearing Officer’s decision unreasonable because it lacked justification, transparency and more particularly intelligibility.
Four factors favoured the opponent and one favoured the applicant. The Hearing officer also relied on the state of the register evidence. This evidence was said to have diluted the scope of the protection to which the mark SMART was entitled and counterbalanced the acquired distinctiveness of the mark.
When the judge reviewed the evidence on this point he was not satisfied with its probative value as there was no evidence of any use made by third parties. Without evidence of use, one is hard pressed to figure out if, and how much, dilution there can be. The Hearing officer erred in drawing a negative inference from the state of the register by itself. The reasons seemed to indicate that the Hearing officer did not see the degree of resemblance as sufficiently high to carry the day and reference was made to the state of the register evidence to bolster the conclusion reached.
As a result, the judge allowed the appeal and ordered that the matter be referred to a different Hearing officer for a new determination.
The message is clear that in cases of this type there must be evidence that the mark was used in relation to goods that are similar to those of the parties before any negative inference can be found. It is not sufficient to file evidence consisting of copies of registrations by themselves.
After the current amendments are in force on June 17, 2019 new evidence cannot be filed on an appeal from the Board without obtaining leave from the Federal Court. As a result, those involved in oppositions must make sure that the necessary evidence is filed before the Board or take their chances in obtaining leave.
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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.