The Federal Court has confirmed that the Trademark Opposition Board was correct when it found that the trademark HALLMARK in association with real estate and related services was not clearly descriptive of the quality of the services.
The Facts
The Applicant applied for the trademark HALLMARK in association with real estate and related services. The Opponent opposed the application on the basis, among others, that the mark a) was not registerable because it was clearly descriptive of the quality of the services specified in the application as a laudatory term meaning “excellence”; and b) was not distinctive of the applicant’s services.
The Trademark Opposition Board-Spagnuolo v Re/Max Hallmark Realty Ltd 2021 TMOB 149
The Hearing Rejected Officer rejected the opposition. She said that the test under the Act considered whether the trademark as a whole was clearly descriptive of the character or quality of the services in association with which it is used. “Character” means a feature, trait or characteristic of the goods or services and “clearly” means easy to understand or plain.
While the word “Hallmark” had a laudatory connotation, it was not clearly descriptive of the Applicant’s real estate and related services. The word is a noun which refers to a distinctive feature, mark or sign indicating quality or excellence, but not a descriptor or adjective that clearly describes the Applicant’s services as excellent.
Concerning the allegation of non-distinctiveness, she said there was no evidence presented on behalf of the Opponent to establish that “Hallmark” has been commonly used in Canada as designating an aspect of the services which where the subject of the mark, and it has become so recognized. The Opponent failed to meet its burden under this ground.
The Appeal Spagnuolo v Re/Max Hallmark Realty Ltd 2022 FC 416
The Opponent appealed to the Federal Court. Neither party filed any new evidence, and the appellate standard of review applied to all issues. Questions of law were reviewed according to the correctness standard, and questions of fact or questions of mixed fact and law (absent an extricable question of law) were reviewed for palpable and overriding error.
Clearly Descriptive
The Judge agreed that the Hearing Officer had stated the correct test, which indicated that the correct test was applied, absent some clear sign there was a subsequent variation.
Laudatory words are not a special category of automatically excluded trademarks under the Act. To be clearly descriptive of quality, the word must be assessed according to the paragraph 12(1)(b) test. The test is not simply whether a word has a laudatory connotation- it must be “clearly” descriptive, and it must be clearly descriptive not of quality in an abstract sense, but of the quality of the services in association with which it is used. Courts have consistently recognized that a trademark is registrable even though it is suggestive or even descriptive. Courts also permit a skilful allusion to a characteristic of the associated services. The wording of paragraph 12(1)(b) contemplates the acceptance of some descriptive connotation.
The Hearing Officer’s conclusion that HALLMARK has a laudatory connotation and that it refers to a distinctive feature, mark or sign indicating quality or excellence did not compel the conclusion that HALLMARK was not registerable or undermine the conclusion that HALLMARK does not clearly describe that the Applicant’s services are excellent. The Officer’s conclusion related to the general meaning of the word were consistent with the definitions in the dictionary passages that the Opponent introduced. Some words may have a sufficiently strong connotation of excellence and clearly describe the excellent quality of just about any good or service. The Officer did not find Hallmark to be such a word.
It was not an error of law to consider that the word Hallmark was a noun. Grammar can be relevant when assessing whether a trademark is clearly descriptive of the character or quality of associated goods or services.
Because of the evidence before the Board, particularly the dictionary definitions that reflect the nuanced meanings of Hallmark, the Hearing Officer did not make a palpable and overriding error in finding that HALLMARK was not clearly descriptive of the real estate and other services set out in the application.
Non-Distinctiveness
Under the Act, “distinctive” means a trademark that actually distinguishes the goods or services in association with which it is used by its owner from goods or services of others. The Opponent alleged that HALLMARK was not a trademark because it lacked an arbitrary character in relation to the applicant’s services and did not “distinguish” the applicant’s services from the services of others.
The Opponent bore an initial evidential burden to prove the allegations of fact supporting this ground of opposition, and the Hearing Officer found it had failed to meet this burden. The Officer did not have to assess whether the Applicant had met its burden to demonstrate that HALLMARK had acquired distinctiveness because the Opponent failed to meet its initial onus. Hence, the onus never shifted to the Applicant. The Opponent did not demonstrate that the Hearing Officer made a palpable and overriding error in rejecting this ground.
Comment
While there is agreement on the principles that apply to assess when a trademark is “clearly descriptive,” their application can be unclear. It is difficult to reconcile the recorded decisions.
This decision, although just issued, was decided under the Act as it stood before June 17, 2019. Under the current Act, applications are now examined on the basis of distinctiveness. Paragraph 37(1)(d) provides that an application shall be refused if the Register is satisfied the trademark is not distinctive. The Register may require an applicant to file evidence establishing that the trademark is distinctive at the filing date (not considering any priority filing date) if the Registrar’s preliminary view is that the trademark is not inherently distinctive. These provisions could result in a materially different result.
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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.
A version of this article originally appeared in the Lawyer’s Daily, published by LexisNexis Canada Inc.