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Focus: Hard to register trademarks with place names

Focus on: Intellectual Property Law
|Written By Michael McKiernan

Applicants hoping to register trademarks that include place names face a tall order after new guidance from the Canadian Intellectual Property Office, according to lawyers who practise in the area.  

The CIPO notice, which reflects the Federal Court of Appeal decision last year in MC Imports Inc. v. AFOD Ltd., was released in November, and it confirms that a trademark for the name of a place where the good or services associated with it came from will be considered clearly descriptive. Under s. 12 (1) (b) of the Trade-marks Act, that renders the mark unregisterable.  

And for geographic names other than the place of origin, the notice says applicants risk rejection if they submit trademarks for place names that would lead consumers of the product or service to believe that they actually came from that place. CIPO says those marks are unregisterable for being “deceptively misdescriptive.”

“The takeaway is that the trademark office is going to be pretty stringent when it comes to looking at geographic names,” says Susan Keri, a partner in the Toronto office of intellectual property law boutique Bereskin and Parr LLP.

Ottawa lawyer Paula Clancy says businesses that have previously succeeded in registering geographic names will now face problems enforcing their rights.

“If you launch an infringement action for marks that are purely geographic, then it’s going to be virtually impossible, because the validity of the mark is going to be challenged and there is a good chance it will be knocked down,” she says.

According to the CIPO notice, trademark applicants still have room to argue for registration if they can show that the geographic name is only one of multiple meanings, and that the ordinary Canadian consumer would not consider the place the main meaning of the word. Another option is to prove the mark has acquired distinctiveness in Canada by the time the application is made for registration.  

Despite the narrowing of the path to registration of geographic name trademarks, Ottawa intellectual property lawyer Adam Tracey says IP lawyers and their clients will welcome the clarity that comes with the CIPO guidance.

“It’s a very straightforward, neat and tidy practice note that reflects the way the law has been going for some time,” he says.

MC Imports concerned a food company that imports and sells food under the trademark “Lingayen,” which is also the name of a region of the Philippines known for its distinctive shrimp paste. When rival importer AFOD brought in its own batch of shrimp paste and labelled it “Lingayen style,” MC Imports launched an infringement action seeking damages for use of its trademark.

However, a federal court judge sided with AFOD and found the trademark invalid because it was clearly descriptive of the product’s place of origin. MC Imports appealed, arguing that the trademark could not be clearly descriptive because an ordinary Canadian consumer would not make the connection between the mark and its namesake in the Philippines. But the company lost again when a unanimous three-judge panel of the Federal Court of Appeal ruled that the consumer perspective was irrelevant, rejecting one line of judicial thought on the issue.

“If the wares or services originate in the place referred to by the trade-mark, then the trade-mark is clearly descriptive of place of origin. There is no ambiguity when the trade-mark is the name of the place of origin that would invite further inquiry: referring to the place of origin by its name is the pinnacle of clarity. This is why the perspective of the ordinary consumer of the wares or services is unnecessary,” Federal Appeal Court Justice Johanne Trudel wrote on behalf of her colleagues. “When filing an application for registration of a trade-mark referring to a geographical place, an applicant should not be allowed to benefit from the consumer’s lack of knowledge in geography.”

According to Keri, the MC Imports decision and the CIPO notice that flowed from it are the culmination of a recent shift in jurisprudence to treat geographic descriptiveness differently from other types. Apart from place of origin, s. 12 (1) (b) of the Trade-marks Act also deals with the registerability of marks that are clearly descriptive or deceptively misdescriptive of the “character or quality of the goods or services” associated with it.

“There is a fairly sizable body of case law that has held that the impression of the ordinary consumer is important when determining the issue of whether a mark is clearly descriptive or deceptively misdescriptive of the character, quality or place of origin,” Keri says. “The more recent jurisprudence suggests that there is a different test for geographic descriptiveness.

“Many would argue that there isn’t any statutory basis for the distinction,” she adds.

In MC Imports, the court said that consumer views can come into play on an assessment of whether a trademarked place name has other meanings and which one is predominant.

“Where such an inquiry is necessary, the relevant ordinary consumer from whose perspective this question ought to be considered is the ordinary consumer of the products or services with which the Mark is associated,” rather than the broader “general public” definition preferred by some judges in previous decisions, Trudel wrote.

Clancy says that approach sets an even higher threshold for trademark applicants to cross.

“In this case, the average Canadian probably doesn’t have enough knowledge of South East Asia to know that the mark refers to a geographic place. Once you start narrowing it to consumers of the product, it makes it much more likely that they will make that connection,” she says.

According to Tracey, the CIPO guidance comes at a particularly opportune time, with Canada preparing for the implementation of the Madrid Protocol in the next couple of years. Canada was one of the last developed countries in the world to sign on to the agreement, which allows businesses to file trademark registrations in as many as 100 Madrid-member countries and territories with a single application.

Enacting the protocol is expected to save legal fees for trademark owners with international interests by bypassing the need for local counsel.

Amendments to the Trade-marks Act intended to enact the protocol were initially made in 2014 under the previous federal government of Stephen Harper, but implementation has been pushed back several times since then.

CIPO has set 2018 as its current target, when Tracey says a wave of new foreign trademarks will hit these shores.

Many of those are likely to include geographic names, and he says the office’s practice note will make his job a lot simpler when advising foreign clients about the chances of registering in Canada.

For example, he says, advising a hypothetical client who imports Taiwanese liquor on the registration of a trademark that includes a local place name used to require a complicated analysis.

“Up until now, you would have to worry about how likely it was that Canadians would know about that region and whether an examiner would pick up on it.

“Now you can simply ask if this is the province where the product comes from.

“If the answer is yes, then you can say that the chances of getting the trademark registered are very limited,” Tracey says.

“The certainty of being able to run quickly through a straightforward analysis that gives a good sense of the registerability of a mark from the outset is a good thing.”

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